/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/140925.mbx T R O U B L E D C O M P A N Y R E P O R T E R A S I A P A C I F I C Thursday, September 25, 2014, Vol. 17, No. 190 Headlines A U S T R A L I A MISSION NEW ENERGY: Director Reports Zero Equity Stake in Co. NEW CAP REINSURANCE: Final Creditors' Meeting Set for Oct. 20 T & A MORRISSY: Placed in Administration C H I N A AGILE PROPERTY: Proposed Rights Issue No Impact on Ba2 Rating HUAIKUANG MODERN: Defaults on Debt as China's Economy Slows OSI (CHINA): To Axe 300 Jobs Amid Food Scandal at Shanghai Site SINOSTEEL CORP: China Said to Remove President Amid Cash Problems I N D I A ABRAHAM MEMORIAL: CRISIL Suspends D Rating on INR241.8M Term Loan AMBIENT CONTROLS: CRISIL Cuts Rating on INR20MM Cash Loan to B+ ANKIT INTERNATIONAL: ICRA Revises Rating on INR25cr Loan to 'B' ARISTOCRAFT PAPERS: CRISIL Assigns 'B+' Rating to INR45.5MM Loan ASSOCIATE DECOR: ICRA Cuts Rating on INR366.5cr Term Loan to 'D' BALAJI ISPAT: CRISIL Reaffirms B+ Rating on INR60MM Cash Credit BINJUSARIA SOLVENTS: ICRA Reaffirms 'B' Rating on INR11cr Loan CIEMME JEWELS: ICRA Cuts Rating on INR20cr Cash Credit to B+ CYTECH COATINGS: CRISIL Rates INR30MM Foreign Bill at 'B+' GOPAL DIAMONDS: CRISIL Suspends B+ Rating on INR92.5MM Bank Loan HIGHWAY COMFORT: ICRA Assigns 'B' Rating to INR10cr Term Loan HITECH LITHO: CRISIL Assigns B+ Rating to INR30MM Cash Credit JADWET RESORTS: CRISIL Assigns 'B' Rating to INR100MM Bank Loan JAS ORCHID: CRISIL Reaffirms 'D' Rating on INR255MM Term Loan JINDAL CHARITABLE: CRISIL Suspends 'B' Rating on INR160MM Loan JOHNSON JEWELLERS: CRISIL Reaffirms 'B+' INR200M Cash Loan Rating KVS SPINNING: ICRA Assigns 'B-' Rating to INR21.8cr Term Loan LANDMARK TREASURE: CRISIL Suspends 'D' Rating on INR146.3MM Loan MERCURY GRANITES: CRISIL Suspends 'C' Rating on INR34.5MM Loan OMNITEL TECHNOLOGIES: CRISIL Assigns B+ Rating to INR10MM Loan ORISSA CONCRETE: CRISIL Suspends B+ Rating on INR90MM Cash Credit PIONEER WINCON: CRISIL Suspends B- Rating on INR475MM Cash Credit PRESS KUNJ: CRISIL Suspends 'D' Rating on INR50MM Cash Credit RELICAB CABLE: CRISIL Reaffirms B Rating on INR30MM Cash Credit RUDRA AUTO: ICRA Assigns B Rating to INR14.5cr Term Loan S.K. CONSTRUCTION: CRISIL Suspends B- Rating on INR65MM Cash Loan S K GOLD: CRISIL Suspends 'B' Rating on INR150MM Cash Credit SERA EXPORTS: CRISIL Reaffirms 'B' Rating on INR50MM Bill Loan SHARADA FLOUR: CRISIL Assigns 'B' Rating to INR65MM Cash Credit SHREE SIDDHNATH: ICRA Ups Rating on INR40cr Cash Credit From 'B+' SHREE VIGNESHKUMAR: CRISIL Suspends B+ Rating on INR60M Cash Loan SION CERAMICS: CRISIL Assigns 'B+' Rating to INR61.8MM Term Loan SS MARKETING: CRISIL Lowers Rating on INR90MM Cash Credit to D STALLION GARMENTS: ICRA Suspends 'D' Rating on INR14.11cr Loan SWASTIK OVERSEAS: CRISIL Reaffirms B Rating on INR5MM Cash Loan TALWAR MOBILES: CRISIL Ups Rating on INR150MM Term Loan to 'B' UNISOURCE PAPERS: ICRA Reaffirms C Rating on INR1.83cr Term Loan VIJAY STEEL: ICRA Reaffirms B+ Rating on INR9cr Fund Based Limits VISHWASRAO NAIK: CRISIL Assigns B+ Rating to INR75MM Cash Loan * INDIA: Gov't Mulls Introducing Bankr. Code for Bankrupt Firms I N D O N E S I A BAKRIE TELECOM: Meeting Held as Rival Bondholder Groups Duel N E W Z E A L A N D ROSS ASSET: Investors Want Fidelity Fund Protection TERRY SEREPISOS: High Court to Decide on Bankruptcy Release S O U T H K O R E A KB FINANCIAL: FSC to Strengthen Inspection of Finance Firms PANTECH CO: To Be Put Up For Sale Soon T H A I L A N D TRUE CORPORATION: Moody's Upgrades Corporate Family Rating to B2 - - - - - ================= A U S T R A L I A ================= MISSION NEW ENERGY: Director Reports Zero Equity Stake in Co. ------------------------------------------------------------- Mohd Azlan Bin Mohammed, a non-independent non-executive director of Mission NewEnergy Ltd, disclosed with the U.S. Securities and Exchange Commission that as of Sept. 15, 2014, he did not own any shares of the Company's securities. Karisma Integrasi Sdn Bhd, a Malaysian incorporated company in which Mr. Mr. Mohd Azlan holds a major equity interest and serves as a director, owns 5,000,000 ordinary shares of Mission NewEnergy. A copy of the regulatory filing is available at: http://is.gd/aGRV0G About Mission NewEnergy Based in Subiaco, Western Australia, Mission NewEnergy Limited is a producer of biodiesel that integrates sustainable biodiesel feedstock cultivation, biodiesel production and wholesale biodiesel distribution focused on the government mandated markets of the United States and Europe. The Company is not operating its biodiesel refining segment. The refineries are being held in care and maintenance either awaiting a return to positive operating conditions or the sale of assets. The Company has materially diminished its Jatropha contract farming operation and the company is now focused on divesting the remaining Indian assets. The Company intends to cease all Indian operations. BDO Audit (WA) Pty Ltd, in Perth, Western Australia, issued a "going concern" qualification on the consolidated financial statements for the year ended June 30, 2013. The independent auditors noted that the Company incurred operating cash outflows of $3.7 million during the year ended 30 June 2013 and, as of that date the consolidated entity's total liability exceeded its total assets by $12.5 million. These conditions, along with other matters, raise substantial doubt the Company's ability to continue as a going concern. NEW CAP REINSURANCE: Final Creditors' Meeting Set for Oct. 20 ------------------------------------------------------------- A final meeting of creditors and members of New Cap Reinsurance Corporation Limited, currently in liquidation, will be held at the Chartered Insurance Institute, at 20 Aldermanbury, London EC2V 7HY, United Kingdom at 11:00 a.m. on October 20, 2014. The Agenda at the meeting include: 1. To lay before the Meeting an account showing how the winding up of the company has been conducted and showing how the property of the company was disposed of; 2. To provide any necessary explanation of the account received by the Meeting; and 3. To consider any other relevant business. The Liquidator and Scheme Administrator for New Cap Reinsurance can be reached at: John R. Gibbons Bentleys Corporate Recovery Pty. Ltd., Level 3 1 Castlereagh Street Sydney NSW 2000 Australia In April 1999, Mr. Gibbons was appointed Administrator of New Cap Reinsurance Corporation and subsequently became Liquidator. New Cap Reinsurance was the first failure in the general collapse of the reinsurance industry in Australia, according to a notice posted on the New Cap's website. The liquidation has involved major cross-jurisdictional issues and focused the spotlight on particular aspects of Australian Corporations and Insurance Law which impact on insurance and reinsurance insolvencies in Australia. New Cap Reinsurance Corp. (Bermuda) Ltd. and its New Cap Reinsurance Corp. Ltd. subsidiary filed chapter 11 petitions in the U.S. Bankruptcy Court in Manhattan on April 27, 1999, with the parent estimating both assets and liabilities at over US$100 million. The parent company, based in Hamilton, Bermuda, is engaged in the business of insurance and reinsurance whereas the Sydney, Australia-based subsidiary, founded in 1997, writes worldwide casualty, catastrophe, marine, occupational, and personal insurance policies. The Supreme Court of Bermuda and the High Court of Justice of England and Wales sanctioned on Feb. 23, 2006, a Scheme of Arrangement between New Cap Reinsurance Corporation (Bermuda) Limited, and the scheme creditors of the company. T & A MORRISSY: Placed in Administration ---------------------------------------- Jason G. Stone -- jstone@lawlerdd.com.au -- and Petr Vrsecky -- pvrsecky@pkflawler.com.au -- of PKF Lawler were appointed as administrators of T & A Morrissy Investments Pty. Ltd. ATF Camdana Discretionary Trust, trading as Carrington Hotel, on Sept. 19, 2014. A first meeting of the creditors of the Company will be held at PKF Lawler Melbourne, Level 13, 440 Collins Street, in Melbourne, on Oct. 1, 2014, at 10:30 a.m. ========= C H I N A ========= AGILE PROPERTY: Proposed Rights Issue No Impact on Ba2 Rating ------------------------------------------------------------- Moody's Investors Service says that Agile Property Holdings Limited's (Ba2 stable) proposed rights issue is credit positive but has no immediate rating impact. Agile has proposed a rights issue that is expected to raise around HKD2.79 billion, with the net proceeds estimated to be around HKD2.75 billion. The company will use the proceeds to refinance its existing indebtedness and for general working capital purposes. The rights issue is expected to be finalized on 4 November 2014. "Agile's proposed rights issue is credit positive as it will lower its leverage, which is in line with the company's deleveraging plans," says Gerwin Ho, a Moody's Vice President and Senior Analyst. The company will use most of the net proceeds to repay its USD475 million term loan due December 2014. As a result, its pro forma adjusted debt/capitalization will decrease to 60.0% from 62.5% at end-June 2014, which remains high for its rating level. Moody's previously noted that Agile's rating headroom had narrowed following its 1H 2014 results, as a result of its rising debt leverage and declining interest coverage. "Although Moody's expect only marginal improvements to its credit metrics, this rights issue demonstrates that the company is actively exploring different funding channels to manage its business expansion and funding needs," adds Ho, also the Lead Analyst for Agile. The weak 1H 2014 results did not result in a negative rating action, as Agile's operating performance remains solid. This is evidenced by its healthy contracted sales, moderate revenue growth and stable gross margins. A negative rating action could result if Agile fails to deliver its contracted sales and revenue targets for the full year 2014, or if its credit metrics do not improve in line with Moody's expectations. The company reported contracted sales of RMB27 billion in the first eight months of 2014, or 55% of its RMB48 billion annual target. Moody's expects Agile will achieve its contracted sales target of RMB48 billion in 2014. The company's gross margins also remained relatively stable at 35.2% for the 12 months to end-June 2014, from 35.6% for the year ended 2013. Agile's Ba2 corporate family rating reflects its long operating track record and established brand in the economically strong Pearl River Delta, as well as its resilient sales performance, and competitive land costs. The principal methodology used in this rating was Global Homebuilding Industry published in March 2009. Agile Property Holdings Limited is one of China's major property developers, operating in the mid- to high-end segment. As of 26 August 2014, the company had projects in over 40 cities and districts in China, and a land bank with a total gross floor area of over 42 million square meters. Agile listed on the Hong Kong Stock Exchange in 2005. As at 26 August 2014, the company's founding family -- the Chen family -- owned a 63.75% interest in Agile. HUAIKUANG MODERN: Defaults on Debt as China's Economy Slows ------------------------------------------------------------ Bloomberg News reports that Huaikuang Modern Logistics Co. said it defaulted on borrowings, highlighting concern non-payment problems will spread as China's economy slows. Bloomberg relates that Anhui Wanjiang Logistics Group, based in the southeastern city of Wuhu, disclosed the unit's default in a statement to the Shanghai Stock Exchange on September 23, without giving any more details. The company cited banks' unwillingness to extend loans to the steel industry as the reason for the nonpayment, Bloomberg notes. According to Bloomberg, Chinese steel traders are grappling with loan repayments after prices for the metal in the country slid 27 percent this year as the slumping property market exacerbates industry overcapacity. Sinosteel Corp., a Chinese state-owned mining company and steel trader, said on September 23 it's facing financial difficulties as the economy slows and some customers aren't paying on time, Bloomberg reports. "The financial problem is really big in the steel industry," Bloomberg quotes Li Ning, a bond analyst at Haitong Securities Co., as saying. "Maybe this is just the beginning, and it could get worse." Shanghai Chaori Solar Energy Science & Technology Co. marked China's first onshore corporate bond default in March when it missed a coupon payment, Bloomberg notes. Chinese firms have the most debt globally after increasing borrowings to $14.2 trillion as of Dec. 31, surpassing the U.S.'s $13.1 trillion, Bloomberg discloses citing Standard & Poor's June report. Huaikuang Modern Logistics has outstanding debt of CNY14.7 billion ($2.4 billion), Anhui Wanjiang said in the filing cited by Bloomberg. Liu Yibiao, chairman of the unit, and Wang Jing, chief accountant, have been detained on suspicion of dereliction of duty, it said. Anhui Wanjiang itself has a CNY1.5 billion bond due in 2018 that it sold last year, according to data compiled by Bloomberg. Huai Kuang Modern Logistics Co., Ltd. provides logistics services. OSI (CHINA): To Axe 300 Jobs Amid Food Scandal at Shanghai Site --------------------------------------------------------------- Ding Yining at Shanghai Daily reports that OSI (China) Group's Shanghai facility will dismiss more than 300 employees as it does not expect to resume operations soon as the authorities continue their investigation into a food safety scandal that rocked the company and its clients during the summer. Shanghai Daily relates that OSI (China) said in an e-mailed statement on September 22 that the local government and the trade union had reviewed the "worker redundancy plan" at Shanghai Husi Food, adding affected workers had been advised of their options. Most of Shanghai Husi's employees have been on paid leave since the food safety scandal first broke on July 21, the report notes. According to the report, Shanghai Husi will dismiss 340 workers, including 226 directly employed by Shanghai Husi along with 114 contractors. A small number of staff would be retained in order to assist with the ongoing food safety investigation, Shanghai Daily relates. "Shanghai Husi has experienced significant financial and customer losses and the ongoing investigation means it is very unlikely that production will resume soon," the statement, as cited by Shanghai Daily, said. OSI added that it is working closely with government agencies to ensure that severance payments will be made to those workers in accordance with applicable laws, as well as company policies, the report relays. At the end of August, Shanghai prosecutors approved the arrests of six Shanghai Husi Food Co executives over the safety scandal that shocked famous fast-food chains such as McDonald's and KFC, Shanghai Daily notes. SINOSTEEL CORP: China Said to Remove President Amid Cash Problems ----------------------------------------------------------------- Bloomberg News reports that China is said to have removed Sinosteel Corp. President Jia Baojun from his post, according to people familiar with the situation, after the state-owned steel trader said it's facing financial difficulties. Citing two people who have seen an internal notification of his departure, Bloomberg relates that the State-owned Assets Supervision and Administration Commission also discharged him from his position as chairman of unit Sinosteel Corp. Ltd. this month. An official from the Beijing-based Sinosteel said on September 23 that the company is facing difficulties amid slowing economic growth, with some account receivables not collected on time, Bloomberg relays. Three years ago Mr. Jia replaced Huang Tianwen who was removed by the state-owned enterprises watchdog after the company was accused of inflating sales at its units by the National Audit Office, Bloomberg recalls. The most recent leadership change comes as the trader battles tumbling steel prices that have sent its peers into financial trouble, says Bloomberg. "Steel trading is money-losing and Sinosteel hasn't done anything to effectively boost earnings in the past years," Bloomberg quotes Xu Zhongbo, chief executive officer of Beijing Metal Consulting Ltd., as saying. "Management's failure to bail out the company may eventually prompt SASAC to restructure Sinosteel." The company cannot immediately comment on the leadership change, said the Sinosteel official told Bloomberg. Sinosteel Corporation is a central state owned enterprise, primarily in mining, trading, equipment manufacturing and engineering, under the supervision of the State-owned Assets Supervision and Administration Commission. ========= I N D I A ========= ABRAHAM MEMORIAL: CRISIL Suspends D Rating on INR241.8M Term Loan ----------------------------------------------------------------- CRISIL has suspended its ratings on the bank facilities of The Abraham Memorial Educational Trust (AMET). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Long Term Loan 241.8 CRISIL D Suspended The suspension of ratings is on account of non-cooperation by AMET with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, AMET is yet to provide adequate information to enable CRISIL to assess AMET's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key credit factor in its rating process and non-sharing of information as a first signal of possible credit distress, as outlined in its criteria 'Information Availability Risk in Credit Ratings' Set up in 1998 by Dr. Abraham Ebenezer, AMET runs the Ebenezer International School in Bengaluru (Karnataka), which provides education from kindergarten to standard 12 (K12). AMBIENT CONTROLS: CRISIL Cuts Rating on INR20MM Cash Loan to B+ --------------------------------------------------------------- CRISIL has downgraded its rating on the long-term bank facilities of Ambient Controls Pvt Ltd (ACPL) to 'CRISIL B+/Stable' from 'CRISIL BB-/Stable', and has downgraded its rating on the company's short-term facilities to 'CRISIL A4' from CRISIL A4+. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 20 CRISIL A4 (Downgraded from 'CRISIL A4+') Cash Credit 20 CRISIL B+/Stable (Downgraded from 'CRISIL BB-/Stable') Letter of Credit 30 CRISIL A4 (Downgraded From 'CRISIL A4+') Standby Line of 2 CRISIL B+/Stable (Downgraded Credit from 'CRISIL BB-/Stable') Term Loan 3 CRISIL B+/Stable (Downgraded from 'CRISIL BB-/Stable') The rating downgrade reflects ACPL's weakening liquidity as its cash accruals could be tightly matched with its debt obligations, over the medium term. Moreover, the company fully utilised its bank limits with a few instances of the facilities being overdrawn over the last 12 months through July 2014 thereby constraining its overall liquidity. The ratings reflect ACPL's modest scale of operations in an intensely competitive Building products industry, large working capital requirements, along with susceptibility to volatility in raw material prices and to economic cycles. These rating weaknesses are partially offset by the promoters' extensive industry experience. Outlook: Stable CRISIL believes that ACPL will continue to benefit over the medium term from the promoters' extensive experience in the steel structural industry. The outlook may be revised to 'Positive' if the company records a significant and sustained improvement in its revenue and profitability, and maintains its capital structure. Conversely, the outlook may be revised to 'Negative' if ACPL's financial risk profile weakens with its revenue or profitability margins or sizeable debt-funded capital expenditure. ACPL, established in 1990 by Mr. Anil Kumar and his wife, Mrs. Malti Kumar, manufactures steel structures such as pre-engineered building, roofing, and cladding systems, metal false ceilings, and ventilation systems. The company has a manufacturing facility in Doddagubbi (Karnataka). ANKIT INTERNATIONAL: ICRA Revises Rating on INR25cr Loan to 'B' ---------------------------------------------------------------- ICRA has revised the long term rating assigned to the INR25.00 crore fund based bank facility of Ankit International from [ICRA]B+ to [ICRA]B. ICRA has reaffirmed the short term rating of [ICRA]A4 to the INR25.00 crore non-fund based bank facility of AI. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term Fund Based 25.00 [ICRA]B Revised Limit - Cash Credit from [ICRA]B+ Short Term Non Fund 25.00 [ICRA]A4 Reaffirmed Based Limit - Letter of Credit The revision in rating reflects AI's weak financial profile characterized by a considerable drop in operating income in 2013-14, its low profit margins as a result of low value addition, and a leveraged capital structure coupled with weak coverage indicators. The ratings note the small scale of AI's operations, the competition existing in the domestic market from unorganized as well as larger players which affects the profitability of the firm; the profitability is also vulnerable to the fluctuating foreign exchange rates and steel prices. ICRA also notes that the substantial financial support provided by AI to its group companies may hurt the liquidity of the firm, as evident from the high working capital intensity of operations. Further, AI is a proprietorship firm and any significant withdrawals from the capital account would affect its capital structure. However, the ratings favourably consider the long standing experience of AI's promoters in the scrap trading and ship breaking business; and the support it derives from its group companies which are in the same line(s) of business. Ankit International is a proprietorship firm, engaged in ship breaking activities as well as import and trading of ferrous and non-ferrous metals, scrap and pipes. The firm has its warehouse at Navi Mumbai while the registered office and its ship breaking plot are located at Mumbai. Recent Results During the financial year 2012-13, AI registered a profit after tax(PAT) of INR0.21 crore on an operating income of INR47.83 crore, while in the year 2013-14 the firm registered a PAT of INR0.24 crore on an operating income of INR29.28 crore (Provisional numbers). ARISTOCRAFT PAPERS: CRISIL Assigns 'B+' Rating to INR45.5MM Loan ---------------------------------------------------------------- CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-term bank facilities of Aristocraft Papers Pvt Ltd (APPL). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Term Loan 45.5 CRISIL B+/Stable Cash Credit 27.5 CRISIL B+/Stable Proposed Long Term Bank Loan Facility 22 CRISIL B+/Stable The rating reflects APPL's working-capital-intensive and small scale of operations in the fragmented paper industry. The rating also factors in the company's average financial risk profile, marked by a small net worth, and average gearing and debt protection metrics. These rating weaknesses are partially offset by the extensive experience of APPL's promoters in the paper industry and the financial support it receives from them. Outlook: Stable CRISIL believes that APPL will continue to benefit over the medium term from its promoters' extensive industry experience. The outlook may be revised to 'Positive' if the company reports higher-than-expected revenue and profitability, leading to an improvement in its financial risk profile, particularly its net worth. Conversely, the outlook may be revised to 'Negative' if APPL's financial risk profile weakens significantly, most likely because of large borrowings for meeting working capital or capital expenditure requirements, or a decline in its revenue and operating margin. APPL was incorporated in 2008, promoted by Mr. Sanjay Kumar Jain, Mr. Praveen Kumar Jain, Mr. Praveen Kumar Singhal, and Mr. Naresh Kumar Jain. The company manufactures kraft paper at its facility in Muzzafarnagar (Uttar Pradesh). APPL reported a profit after tax (PAT) of INR1.08 million on net sales of INR39.2 million for 2012-13 (refers to financial year, April 1 to March 31), against a net loss of INR1.5 million on net sales of INR22.4 million for 2011-12. For 2013-14, the company is estimated to report a PAT of INR0.8 million on net sales of INR122.8 million. ASSOCIATE DECOR: ICRA Cuts Rating on INR366.5cr Term Loan to 'D' ---------------------------------------------------------------- ICRA has revised the long-term rating for the INR366.50 crore term loan facilities, INR135.00 crore long-term, fund based limits and INR39.00 crore long-term bank guarantee limits of Associate Decor Limited to [ICRA]D from [ICRA]BB. The term loan limits of INR366.50 crore are fully interchangeable with long-term, non- fund-based limits. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Term loans 366.50 Revised to [ICRA]D from [ICRA]BB (Stable) Long-term, non-fund- (366.50) Revised to [ICRA]D based facilities from [ICRA]BB (Stable) Long-term, non-fund- 39.00 Revised to [ICRA]D based facilities from [ICRA]BB (Stable) Long-term, fund-based 135.00 Revised to [ICRA]D facilities from [ICRA]BB (Stable) The rating revision reflects the delays in debt servicing by the company due to liquidity issues arising on account inadequate working capital limits to support its growing business requirements. Associate D‚cor Limited was incorporated in 2007 by Associate group (holding 67% stake) -- comprising of companies owned and managed by the Darvesh and Agicha family, in collaboration with Kings Wood Suppliers, Bangalore (holding 33% stake). While Associate group has been dealing in wood imports and exports, and manufacturing and sales of plywood in India, Kings Woods Suppliers are one of the leading wood suppliers in Bangalore with a significant holding of wood growing wasteland. The company has set up a plant to manufacture Particle Boards -- plain and pre- laminated -- along with facilities to manufacture high pressure laminates and formaldehyde at Malur, Karnataka. Recent results: ADL reported a net profit of INR7.10 crore on an operating income of INR297.71 in FY14 as against a net loss of INR7.92 crore on an operating income of INR141.57 in FY13. BALAJI ISPAT: CRISIL Reaffirms B+ Rating on INR60MM Cash Credit --------------------------------------------------------------- CRISIL's ratings on the bank facilities of Balaji Ispat continue to reflect Balaji Ispat's below-average financial risk profile marked by a weak interest coverage ratio and a high total outside liabilities to tangible net worth (TOLTNW) ratio, and its marginal scale of operations in the fragmented steel industry leading to low profitability. These rating weaknesses are partially offset by the extensive industry experience of Balaji Ispat's partners in the steel industry and its moderate working capital requirements. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Buyer Credit Limit 25 CRISIL A4 (Reaffirmed) Buyer Credit Limit 15 CRISIL B+/Stable (Reaffirmed) Proposed Long Term Bank Loan Facility 35 CRISIL B+/Stable Reaffirmed) Cash Credit 60 CRISIL B+/Stable (Reaffirmed) Outlook: Stable CRISIL believes that Balaji Ispat will continue to benefit from its partners' extensive experience in the steel industry; however, its financial risk profile is expected to remain constrained on account of its weak debt protection metrics. The outlook may be revised to 'Positive' if Balaji Ispat significantly scales up its operations leading to higher-than-expected cash accruals while prudently managing its working capital cycle. Conversely, the outlook may be revised to 'Negative' if its working capital cycle lengthens, or its revenues and profitability come under pressure. Balaji Ispat was established in 2013 by Mr. Pawan Garg and Mr. Satpal Goyal. It is engaged in import and trading of mild steel scrap. It is based in Mandi Gobindgarh (Punjab). BINJUSARIA SOLVENTS: ICRA Reaffirms 'B' Rating on INR11cr Loan -------------------------------------------------------------- ICRA has reaffirmed the rating of [ICRA]B assigned to the INR11.00 crore long-term fund based limits of Binjusaria Solvents Private Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund based limits 11.00 [ICRA]B reaffirmed The rating reaffirmation factors in BSPL's weak financial profile characterized by low profitability and moderate capital structure resulting in stretched coverage indicators. The rating also factors in the intense competition in the edible oil industry which coupled with low value addition in the oil processing business -results in thin profitability which is further exposed to the volatility in edible oil prices which are linked to international edible oil prices. ICRA makes note of the vulnerability of BSPL's operations to agro-climatic risks related to the availability of raw materials; the risk however, is partly mitigated by favourable location of BSPL's plant in the rice producing belt of Andhra Pradesh/Telangana, facilitating easy procurement of rice bran. The rating also factors in the extensive experience of the promoters in the edible oil business, steady growth in BSPL's operating income at a CAGR of 17.24% during the period FY10-FY14 and a positive demand outlook for rice bran oil in the domestic market due to its health benefits and affordability. BSPL, incorporated in 1982, is engaged in solvent extraction from rice bran with the product mix of rice bran oil and DOC. Sales of rice bran oil and DOC are made to oil refineries and cattle & fish feed firms respectively. The solvent extraction unit has an installed capacity of 60,000 MTPA. It has its production facilities in the Nacharam area of Hyderabad. The Managing Director, Mr. Arun Kedia has over two decades of experience in the business. Recent Results BSPL has, for the financial year ended March 31, 2014 reported an operating income of INR69.77 crore and a net profit of INR0.38 crore as against INR57.61 crore and INR0.12 crore respectively for 2012-13. CIEMME JEWELS: ICRA Cuts Rating on INR20cr Cash Credit to B+ ------------------------------------------------------------ ICRA has downgraded the long term rating of [ICRA]BB+ to [ICRA]B+ for INR38.30 Cr bank facilities (revised from INR38.40 crore) of Ciemme Jewels Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Cash Credit 20.00 [ICRA]B+ downgraded EPC/PSC 4.00 [ICRA]B+ downgraded Forward Contract 0.40 [ICRA]B+ downgraded Term Loans 13.90 [ICRA]B+ assigned The rating action takes into account the sharp deterioration in the Company's performance during FY2014 with over 63% drop in revenues on the back of regulatory curbs on gold availability and relatively weak demand in its primary markets. Delays in realisation of debtors, primarily in the diamond trading segment, has lead to a strained liquidity position and moderation in coverage metrics. Over the last few quarters, the Company has stalled its diamond trading operations leading to scaling down of operations. The working capital facilities of CJL have also been reduced over the previous fiscal, with the some working capital facilities being converted to long term liabilities. ICRA also notes that CJL's venture into film production and distribution business through its subsidiary -- Ciemme Entertaiment Private Limited has also witnessed subdued performance, given the nascent stage of operations and is yet to report profit. The nature of business further exposes the company to vagaries of box office collections in the absence of minimum guarantee agreements. The rating however favourably factors in the long standing long- standing experience of the promoters and the CJL's management in the gems and jewellery business for over three decades. Ciemme Jewels Limited is a wholly owned subsidiary of C Mahendra International Limited. CMIL is in turn a wholly owned subsidiary of C Mahendra Exports Limited which is the flagship company of the C Mahendra Group. CMIL is the holding company for all other C Mahendra group companies. CJL was incorporated on April 03, 2003 as C.M. Jewels Private Limited to buy, sell, export, import, deal market and manufacture diamonds, precious stones, semi-precious stones and jewellery. The name of the company was changed to Ciemme Jewels Private Limited on June 06, 2003. The company was converted into a public limited company and name was further changed to Ciemme Jewels Limited with effect from June 28, 2007. The company is engaged in the manufacturing and marketing of Diamond studded jewellery. It also engages in trading of diamonds. Recent Results As per unaudited results for FY 2014, CJL reported a net loss of INR9.03 crore over an operating income (OI) of INR45.17 crore as against a Profit after Tax (PAT) of INR2.57 crore on an OI of INR116.07 crore in FY 2013. CYTECH COATINGS: CRISIL Rates INR30MM Foreign Bill at 'B+' ---------------------------------------------------------- CRISIL has revoked the suspension of its ratings on the bank facilities of Cytech Coatings Pvt Ltd and has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings on the bank facilities of CCPL. The rating was previously 'Suspended' by CRISIL vide the Rating Rationale dated July 14, 2014, since CCPL had not provided the necessary information required for a rating review. CCPL has now shared the requisite information enabling CRISIL to assign a rating on its bank facilities. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 2 CRISIL A4 B+/Stable (Assigned; Suspension revoked) Cash Credit 20 CRISIL B+/Stable (Assigned; Suspension revoked) Foreign Bill 30 CRISIL B+/Stable (Assigned; Discounting Suspension revoked) Letter of Credit 21.5 CRISIL A4 (Assigned; Suspension revoked) Proposed Long Term 20.1 CRISIL B+/Stable (Assigned; Bank Loan Facility Suspension revoked) Term Loan 3.4 CRISIL B+/Stable (Assigned; Suspension revoked) The ratings reflect CCPL's constrained financial risk profile marked by a modest net worth, average capital structure and stretched liquidity, on account of working- capital-intensive operations and modest cash accruals. The ratings also factor in CCPL's modest scale of operations and susceptibility of the company's operating profitability to volatility in raw material prices. These rating weaknesses are partially offset by the extensive industry experience of CCPL's promoters, and the company's moderate debt protection metrics. Outlook: Stable CRISIL believes that CCPL will continue to benefit over the medium term from its promoters' extensive experience in the printing inks industry. The outlook may be revised to 'Positive' in case of alleviation of pressure on the company's liquidity on account of improvement in its working capital cycle or significant increase in its cash accruals. Conversely, the outlook may be revised to 'Negative' if CCPL's financial risk profile, especially its liquidity, deteriorates, because of decline in its profitability or further stretch in its working capital cycle. Incorporated in April 2009, CCPL commenced commercial operations in July 2010. The company is promoted by Mr. Birendrakant Srivastava and his business acquaintance Mr. Manish B Ray. CCPL manufactures various types of printing inks, resins, and adhesives, which are used in the packaging industry. CCPL registered a profit after tax (PAT) of INR3.6 million on net sales of INR245 million for 2013-14, (refers to financial year, April 1 to March 31), against a PAT of INR2.9 million on net sales of INR203 million for 2012-13. GOPAL DIAMONDS: CRISIL Suspends B+ Rating on INR92.5MM Bank Loan ---------------------------------------------------------------- CRISIL has suspended its ratings on the bank facilities of Gopal Diamonds Pvt Ltd. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 17.5 CRISIL B+/Stable Suspended Long Term Loan 40.0 CRISIL B+/Stable Suspended Proposed Long Term Bank Loan Facility 92.5 CRISIL B+/Stable Suspended The suspension of ratings is on account of non-cooperation by GDPL with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, GDPL is yet to provide adequate information to enable CRISIL to assess GDPL's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key credit factor in its rating process and non-sharing of information as a first signal of possible credit distress, as outlined in its criteria 'Information Availability Risk in Credit Ratings' GDPL was set up in February 2012 by Mr. Yash Pal Verma. The company, based in New Delhi, mainly trades in gold and diamond- studded gold jewellery. GDPL has taken over the business operations of its promoter's proprietorship firm, Gopal Jewellers, with effect from November 1, 2012. GDPL has a showroom of around 750 square feet (sq ft) at Karol Bagh (New Delhi); it is currently setting up a showroom of around 1000 sq ft in New Delhi. HIGHWAY COMFORT: ICRA Assigns 'B' Rating to INR10cr Term Loan ------------------------------------------------------------- ICRA has assigned a long term rating of '[ICRA]B' to the INR10.0 crore fund-based bank facilities of Highway Comfort Inn. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Term Loans 10.0 [ICRA]B Assigned The assigned rating takes into consideration project implementation risks with respect to the timely completion of the proposed motel project, 'The Eden', undertaken by HCI, within the budgeted cost. The ratings also factor in the significant competitive intensity in the region, though it is partially mitigated by the favourable location of the resort. Further, the firm's debt repayments are to start from December 2014, any delay in project implementation or stabilization of operations can result in cash flow mismatch and necessitate refinancing. However, ICRA takes into cognizance the experience of the promoters in real estate development and related industries. Going forward, the ability of the firm to complete the project within the estimated time schedule and achieve optimum occupancy levels in order to generate healthy cash flows, will be the key rating sensitivities. HCI is constructing a motel by the name of 'The Eden' at GT Road on NH-1, at a distance of about 6 kms from Karnal. The motel, spread across 14.5 acres of land, will have 22 rooms with two banquet halls. The directors of the firm include Mr. Sushil Jain, Dr. Manoj Gupta, Mr. Navneet Gupta, Mrs. Anita Jain, Mrs. Ritika Gupta and Mrs. Deepta Gupta. Mr. Jain is the proprietor of M/s Jain Tube Company and a super distributor of GI/PVC pipes at Karnal. Dr Manoj Gupta and Mrs. Ritika Gupta are partners in M/s Ultratech Pharmaceuticals, Baddi and owner of Shri Hari Hospital, Karnal. Dr Gupta has experience of more than 20 years in the pharmaceutical industry and also has experience in real estate development. Mr. Navneet Gupta is the proprietor of M/s Gupta Enterprises. Mrs. Deepta Gupta, wife of Mr. Navneet Gupta is the proprietor of M/s Yuvnish Enterprises. HITECH LITHO: CRISIL Assigns B+ Rating to INR30MM Cash Credit ------------------------------------------------------------- CRISIL has revoked the suspension of its ratings on the bank facilities of Hitech Litho Pvt Ltd and has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to the bank facilities. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 30 CRISIL B+/Stable (Assigned; Suspension revoked) Letter of Credit 10 CRISIL A4 (Assigned; Suspension revoked) Proposed Long Term 13.5 CRISIL B+/Stable (Assigned; Bank Loan Facility Suspension revoked) Term Loan 8.4 CRISIL B+/Stable (Assigned; Suspension revoked) The ratings were suspended by CRISIL (refer to Rating Rationale dated July 14, 2014) as HLPL had not provided the necessary information required for a rating review. HLPL has now shared the requisite information enabling CRISIL to assign ratings to its bank facilities. The ratings reflect HLPL's small scale of operations, volatile operating margin, and below-average financial risk profile marked by small net worth, average capital structure, and stretched liquidity on account of large working capital requirements and low cash accruals. These rating weaknesses are partially offset by the extensive experience of HLPL's promoters in the printing ink industry. Outlook: Stable CRISIL believes that HLPL will benefit over the medium term from its promoters' extensive industry experience. The outlook may be revised to 'Positive' if HLPL reports significant growth in revenue and cash accruals while improving its working capital cycle. Conversely, the outlook may be revised to 'Negative' in case of deterioration in the company's financial risk profile, especially liquidity, because of further stretch in receivables or decline in cash accruals. HLPL was incorporated in February 2011 by Mr. Birendrakant Srivastava and Mr. Manish B Ray. It manufactures printing inks used in the packaging industry. HLPL, on a provisional basis, reported a profit after tax (PAT) of INR1.5 million on net sales of INR71.4 million for 2013-14 (refers to financial year, April 1 to March 31), against a PAT of INR1.3 million on net sales of INR70.9 million for 2012-13. JADWET RESORTS: CRISIL Assigns 'B' Rating to INR100MM Bank Loan --------------------------------------------------------------- CRISIL has assigned its 'CRISIL B/Stable' rating to the proposed bank facilities of Jadwet Resorts & Leisure Pvt Ltd. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Proposed Long Term 100 CRISIL B/Stable Bank Loan Facility The rating reflects JRLPL's susceptibility to risks related to implementation and stabilisation of its ongoing hotel project. This rating weakness is partially offset by the extensive experience of JRLPL's promoters in the hospitality industry and their funding support to the company. Outlook: Stable CRISIL believes that Jadwet will benefit over the medium term from its promoters' extensive industry experience and their fund support. The outlook may be revised to 'Positive' if the company completes its ongoing project on a timely basis and achieves earlier than expected stabilization of operations. Conversely, the outlook may be revised to 'Negative' in case of any significant time or cost over-runs in the project or additional debt-funded capital expenditure, leading to deterioration of the company's financial risk profile. Incorporated in 2013-14 (refers to financial year, April 1 to March 31), JRLPL is based in Port Blair (Union Territory of Andaman & Nicobar Islands) and is promoted by Mr. Mohamed Jadwet and Mr. Zakir Jadwet. The company is undertaking a project for setting up a high-end spa resort on 9200 square metres on Vijay Nagar Beach in Havelock (Andaman and Nicobar Islands). The project plan includes a 30-room resort, one all-year restaurant, bar and lounge, indoor meeting/conference space, and spa and scuba centre. The project outlay is INR160 million. JAS ORCHID: CRISIL Reaffirms 'D' Rating on INR255MM Term Loan ------------------------------------------------------------- CRISIL has reaffirmed its rating on the long-term bank facilities of Jas Orchid Resorts Pvt Ltd (JAS); while reassigning its short- term rating at 'CRISIL D'. CRISIL's ratings on the bank facilities of JAS continue to reflect instances of delay by JAS in servicing its term debt; the delays have been caused by the company's weak liquidity because of its nascent stage of operations. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 12 CRISIL D (Reaffirmed) Term Loan 80 CRISIL D (Reaffirmed) Rupee Term Loan 255 CRISIL D (Reaffirmed) Proposed Long Term Bank Loan Facility 67 CRISIL D (Reaffirmed) Cash Credit 26 CRISIL D (Reaffirmed) JAS is also exposed to risks related to start-up nature of operations and susceptibility to intense competition and cyclicality in the hospitality industry. Furthermore, JAS also has an average financial risk profile, marked by its weak debt protection metrics. However, JAS benefits from the funding support it receives from its promoters and its operations and maintenance (O&M) contract with Intercontinental Hotel Group under the Holiday Inn brand. JAS was incorporated in 2004, promoted by Mr. Sanjeev Pinjha, Mr. Jaspal Singh, and Mr. Jagdeep Singh, to set up a 5-star hotel at Amritsar (Punjab). The hotel, located near the district shopping centre, commenced operations in February 2013 with 75 rooms ready and the rest estimated to become operational by September 2013. The company has an O&M agreement with Intercontinental Hotel Group for management of its hotel under the Holiday Inn brand. JINDAL CHARITABLE: CRISIL Suspends 'B' Rating on INR160MM Loan -------------------------------------------------------------- CRISIL has suspended its ratings on the bank facilities of Jindal Charitable Society (JCS). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Overdraft Facility 20 CRISIL B/Stable Suspended Proposed Long Term Bank Loan Facility 20 CRISIL B/Stable Suspended Term Loan 160 CRISIL B/Stable Suspended The suspension of ratings is on account of non-cooperation by JCS with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, JCS is yet to provide adequate information to enable CRISIL to assess JCS's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key credit factor in its rating process and non-sharing of information as a first signal of possible credit distress, as outlined in its criteria 'Information Availability Risk in Credit Ratings' JCS was set up in 1995 by Mrs. Raj Rani Gupta, Ms. Sudha Gupta, and Mr. Vikas Goel. The society has been operating Presidium School, a senior secondary school, at Ashok Vihar in New Delhi since 2003. JOHNSON JEWELLERS: CRISIL Reaffirms 'B+' INR200M Cash Loan Rating ----------------------------------------------------------------- CRISIL's rating on the long-term bank facilities of Johnson Jewellers continues to reflect JJ's below-average financial risk profile, marked by a modest net worth, high gearing, and weak debt protection metrics, and its vulnerability to fluctuations in gold prices. These rating weaknesses are partially offset by the extensive experience of the firm's proprietor in the jewellery business. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 200 CRISIL B+/Stable (Reaffirmed) Outlook: Stable CRISIL believes that JJ will continue to benefit over the medium term from its proprietor's extensive industry experience. The outlook may be revised to 'Positive' if JJ's financial risk profile improves, backed by healthy accruals or infusion of equity capital. Conversely, the outlook may be revised to 'Negative' if the firm's capital structure deteriorates further, most likely on account of higher-than-expected working capital requirements or debt-funded capital expenditure. Update In 2013-14 (refers to financial year, April 1 to March 31), on a provisional basis, JJ's net sales declined by 22 per cent year-on- year to INR1.19 billion. The decline was due to lower-than- expected demand as a result of an increase in gold prices and change in government policies. With JJ's plan to improve its product mix, it is expected to register moderate sales growth during 2014-15. However, the firm remains susceptible to any further changes in government policies and any impact of these on its performance will remain a rating sensitivity factor. In 2013- 14, JJ has maintained its operating margin at around 2.8 per cent, driven by its established brand and its manufacture of customised jewellery. The firm has large working capital requirements due to large inventory comprising a variety of designs of chains, bracelets, and other items at its current retail outlet. Its gross current assets are expected to remain high at around 75 days over the medium term. As on March 31, 2014, JJ's gearing is estimated to have been high at 2.41 times, due to debt-funding of working capital requirements and a modest net worth. With incremental working capital requirements expected to remain high, the gearing is expected to remain at more than 2 times over the medium term. JJ's liquidity is marked by highly utilised bank limits, at an average of 87 per cent during the 12 months through June 2014. It is expected to generate accruals of around INR1.6 million in 2014-15 against no term debt repayments. For 2013-14, on a provisional basis, JJ reported net profit is INR0.43 million on net sales of INR1.19 billion, against a net profit of INR3.20 million on net sales of INR1.52 billion for 2012-13. JJ, set up in 1995-96 by Mr. Anil Soni as proprietorship firm, is engaged in manufacturing, wholesaling, and retailing gold, diamond, and other precious gem-studded jewellery, and also in silver ware and gold bullion trading. The firm has one store in Ahmedabad (Gujarat). KVS SPINNING: ICRA Assigns 'B-' Rating to INR21.8cr Term Loan ------------------------------------------------------------- ICRA has assigned a long term rating of [ICRA]B- to INR25.80 crore fund based limits of KVS Spinning Mills Private Limited. ICRA has also assigned a short term rating of [ICRA]A4 to INR0.45 crore bank guarantee limits and ratings of [ICRA]B-/[ICRA]A4 to INR6.75 crore unallocated limits of KVS. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Term Loan Limits 21.80 [ICRA]B- assigned Cash Credit Limits 4.00 [ICRA]B- assigned Bank Guarantee Limits 0.45 [ICRA]A4 assigned Unallocated Limits 6.75 [ICRA]B-/[ICRA]A4 assigned The assigned ratings are constrained by KVS's limited operating history with company starting operations from April 2013; small scale of operations in the cotton spinning industry; and exposure to cotton price fluctuations which have witnessed significant volatility in the past coupled with limited ability to pass on increase in raw material prices owing to intense competition in a highly fragmented market structure. The ratings are also constrained by high customer concentration risk with top 5 customers contributing to 56% of total revenue in FY2014 and weak capital structure characterized by high gearing and low debt protection metrics with NCA/TD at 4%, Debt/ OPBDIT at 7.59 times for FY2014. The ratings however positively factor in experience of promoters in cotton industry of more than a decade and operational linkage with group company for purchase of major raw material cotton lint. The ratings also positively factor in the proximity to cotton growing areas of Guntur, Andhra Pradesh. Going forward, ability of the company to improve the operating margins with sufficient generation of accruals with term loan repayments started from March, 2014 and managing of working capital requirements will remain key rating sensitivities from credit perspective. KVS Spinning Mills Pvt. Ltd was incorporated in May 2011 by Mr. K. Subba Rao, one of the directors of the company. KVS is into manufacturing of cotton yarn and the plant is located at Nalgonda disctrict, Telangana. The company started its commercial operations in April, 2013 and has a manufacturing facility with an installed capacity of 14688 spindles. Recent Results The company reported an operating income and profit before tax of INR24.80 crore and 0.05 crore respectively in FY2014 (provisional and unaudited). LANDMARK TREASURE: CRISIL Suspends 'D' Rating on INR146.3MM Loan ---------------------------------------------------------------- CRISIL has suspended its ratings on the bank facilities of M/s. Landmark Treasure Town. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Long Term Loan 146.3 CRISIL D Suspended Proposed Long Term Bank Loan Facility 3.7 CRISIL D Suspended The suspension of ratings is on account of non-cooperation by LTT with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, LTT is yet to provide adequate information to enable CRISIL to assess LTT's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key credit factor in its rating process and non-sharing of information as a first signal of possible credit distress, as outlined in its criteria 'Information Availability Risk in Credit Ratings' LTT is a partnership firm of Dazzling Properties Pvt Ltd (51 per cent partner) and Landmark Hi-tech Development Pvt Ltd (49 per cent partner). LTT, established in 2009, undertakes residential real estate development. MERCURY GRANITES: CRISIL Suspends 'C' Rating on INR34.5MM Loan -------------------------------------------------------------- CRISIL has suspended its ratings on the bank facilities of Mercury Granites Pvt Ltd (MGPL; part of the Alliance group). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Foreign Bill Purchase 17.5 CRISIL A4 Suspended Letter of Credit 7.5 CRISIL A4 Suspended Long Term Loan 34.5 CRISIL C Suspended Packing Credit 17.5 CRISIL A4 Suspended Standby Line of Credit 8.0 CRISIL A4 Suspended The suspension of ratings is on account of non-cooperation by MGPL with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, MGPL is yet to provide adequate information to enable CRISIL to assess MGPL's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key credit factor in its rating process and non-sharing of information as a first signal of possible credit distress, as outlined in its criteria 'Information Availability Risk in Credit Ratings'. CRISIL has combined the business and financial risk profiles of MGPL and Alliance Minerals Pvt Ltd (AMPL), together referred to as the Alliance group. This is because both entities are in the same line of business, have significant business synergies, common promoters, and fungible cash flows. MGPL, a subsidiary of AMPL, manufactures and exports polished granite slabs. AMPL is also in the same line of business. OMNITEL TECHNOLOGIES: CRISIL Assigns B+ Rating to INR10MM Loan -------------------------------------------------------------- CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to the bank facilities of Omnitel Technologies Private Limited. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Term Loan 10 CRISIL B+/Stable Bank Guarantee 147.5 CRISIL A4 Overdraft Facility 3.5 CRISIL A4 The ratings reflect the company's modest scale and working- capital-intensive operations. These rating weaknesses are partially offset by the extensive experience of OTPL's promoters in the information technology (IT) solutions segment, along with the company's improved operating profitability and financial risk profile. Outlook: Stable CRISIL believes that OTPL's business risk profile will continue to be supported by the promoters' extensive industry experience. However, the company's financial risk profile will remain vulnerable to its revenue profile and/or profitability level on account of contractual nature of business, over the medium term. The outlook may be revised to 'Positive', if the company improves its financial risk profile with a substantial increase in its scales of operations, and sustains its operating profitability level. Conversely, the outlook could be revised to 'Negative', if OTPL's financial risk profile weakens with significantly low revenue or profitability. OTPL was set up as AKD Infosystems; the current promoters, acquired the firm in April 2010, and renamed the company. OTPL provides system integration (SI) and telecom engineering services (TES) in India and Bangladesh. The company, based in Gurgaon, is managed by Mr. Nitish Mathur. OTPL's profit after tax (PAT) was estimated at INR12.1 million on an operating income of INR185.5 million in 2013-14, as compared to a PAT of INR1.2 million on an operating income of INR161.8 million, in 2012-13. ORISSA CONCRETE: CRISIL Suspends B+ Rating on INR90MM Cash Credit ----------------------------------------------------------------- CRISIL has suspended its ratings on the bank facilities of Orissa Concrete & Allied Industries Ltd (OCAIL; part of the Orissa Concrete group). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 35 CRISIL A4 Suspended Cash Credit 90 CRISIL B+/Stable Suspended Letter of Credit 5 CRISIL A4 Suspended Proposed Long Term Bank Loan Facility 30 CRISIL B+/Stable Suspended The suspension of ratings is on account of non-cooperation by OCAIL with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, OCAIL is yet to provide adequate information to enable CRISIL to assess OCAIL's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key credit factor in its rating process and non-sharing of information as a first signal of possible credit distress, as outlined in its criteria 'Information Availability Risk in Credit Ratings'. CRISIL has combined the business and financial risk profiles of OCAIL and Gold Star Steel Pvt Ltd (GSSPL). This is because the two companies, together referred to as the Orissa Concrete group, share a common management and have operational linkages. Moreover, GSSPL caters to OCAIL's entire insert requirement and around 20 per cent of its high-tensile steel (HTS) wire requirement. Set up in 1981 by Mr. Chaturbhuj Agarwal and the late Mr. Pramod Kumar Agarwal, OCAIL manufactures concrete sleepers used in railway tracks. The company's facility at Raipur (Chhattisgarh) has capacity to manufacture 0.6 million sleepers per annum. The Indian Railways accounts for more than 80 per cent of its total sales. GSSPL manufactures inserts and HTS wires, which are primarily used by OCAIL. PIONEER WINCON: CRISIL Suspends B- Rating on INR475MM Cash Credit ----------------------------------------------------------------- CRISIL has suspended its ratings on the bank facilities of Pioneer Wincon Pvt Ltd. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 475 CRISIL B-/Stable Suspended Letter of Credit 100 CRISIL A4 Suspended The suspension of ratings is on account of non-cooperation by PWPL with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, PWPL is yet to provide adequate information to enable CRISIL to assess PWPL's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key credit factor in its rating process and non-sharing of information as a first signal of possible credit distress, as outlined in its criteria 'Information Availability Risk in Credit Ratings' PWPL was promoted in 1996 by the Pioneer Asia group, Sivakasi (Tamil Nadu). The company assembles wind turbines in the 250 KW and 750 KW segments. PWPL also undertakes turnkey projects for setting up windmills. PRESS KUNJ: CRISIL Suspends 'D' Rating on INR50MM Cash Credit ------------------------------------------------------------- CRISIL has suspended its ratings on the bank facilities of Press Kunj. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 50 CRISIL D Suspended Letter of Credit 7.5 CRISIL D Suspended Proposed Long Term Bank Loan Facility 36.7 CRISIL D Suspended Term Loan 35.8 CRISIL D Suspended The suspension of ratings is on account of non-cooperation by PK with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, PK is yet to provide adequate information to enable CRISIL to assess PK's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key credit factor in its rating process and non-sharing of information as a first signal of possible credit distress, as outlined in its criteria 'Information Availability Risk in Credit Ratings' PK was set up as a proprietorship concern in 1995. It was promoted by Mrs. Pramila Mehra, a Mumbai-based first generation entrepreneur. It was later reconstituted as a partnership firm in 2004, and is currently promoted by Mr. Rajesh Mehra (son of Mrs. Pramila Mehra) and his wife, Mrs. Tanvi Mehra. The firm manufactures and prints packaging products for pharmaceutical companies. RELICAB CABLE: CRISIL Reaffirms B Rating on INR30MM Cash Credit --------------------------------------------------------------- CRISIL's rating on the bank facilities of Relicab Cable Manufacturing Pvt Ltd continues to reflect Relicab's weak financial risk profile, marked by a modest net worth, high gearing, and weak debt protection metrics. The ratings also reflect its modest scale of operations in the fragmented electrical cable manufacturing industry and its working-capital- intensive nature of operations. These rating weaknesses are partially offset by the benefits that Relicab derives from its promoters' extensive experience in the electrical cable manufacturing industry and their established relationships with customers and suppliers. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 1 CRISIL A4 (Reaffirmed) Cash Credit 30 CRISIL B/Stable (Reaffirmed) Letter of Credit 32.5 CRISIL A4 (Reaffirmed) Proposed Long Term Bank Loan Facility 116.5 CRISIL B/Stable (Reaffirmed) Outlook: Stable CRISIL believes that Relicab will continue to benefit from the promoters' long-standing industry experience and established relationships with customers and suppliers. The outlook may be revised to 'Positive' if a significant increase in its scale of operations while maintaining profitability and efficient working capital management, results in an improved financial risk profile. Conversely, the outlook may be revised to 'Negative' if Relicab's financial risk profile deteriorates, particularly its liquidity, on account of considerably low cash accruals or lengthening of the working capital cycle or if it undertakes any debt-funded capital expenditure (capex). Update Relicab's operating income has declined marginally to INR111 million during 2013-14 (refers to financial year, April 1 to March 31) as against INR133 million during 2012-13 on account of demand slowdown from its top customers. However, the operating margin has increased to 9.8 per cent during 2013-14 as against 7.3 per cent during 2012-13 due to addition of higher margin products and ability to pass on the prices to end customers. Relicab has reported modest net worth of INR13 million as on March 31, 2014, because of small scale of operations resulted in low accretion to reserve and absence of any equity infusion by promoters. The gearing is also high at around 3.90 times as on march 31, 2014 due to higher dependence on bank borrowings to fund its working capital requirements. The company has reported weak debt protection metrics with interest coverage and net cash accruals to total debt of around 1.15 times and 3 per cent respectively during 2013-14. Relicab's liquidity profile is weak marked by low net cash accruals of INR1.3 million during 2013-14 and high gross current assets of around 273 days driven by stretch in debtors and high inventory. The bank line of INR 30 million were utilized fully over the 12 months through June 2014. However, liquidity is supported by absence of any term debt obligation or capex plans and unsecured loan infused by promoters. Incorporated in 2010, Relicab manufactures polyvinyl chloride (PVC) electrical cables and compounds. The company has its manufacturing unit based in Daman (Union Territory). Relicab is promoted by Mr. Parag Shah and Mr. Suhir Shah. The promoters have been engaged in manufacturing PVC electrical cables for over two decades. RUDRA AUTO: ICRA Assigns B Rating to INR14.5cr Term Loan -------------------------------------------------------- ICRA has assigned its long-term rating of [ICRA]B to the INR14.5 crore term loan and INR11.0 crore cash credit facilities of Rudra Auto Tech Engineering Private Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Term Loan 14.5 [ICRA]B Assigned Cash Credit 11.0 [ICRA]B Assigned The assigned rating takes into consideration the promoter's industry strong relationships owing to another group company (KVN Auto Engineering Private Limited (KVN)) which is also engaged in auto components manufacturing, and the reputed client base of the company that is expected to grow further in the near term. ICRA also factors in the fiscal incentives available to the company owing to its location in Pantnagar. The rating, however, is constrained by the start up phase of operations resulting in muted sales and profitability. Further, the company's liquidity position is stretched owing to high working capital intensity on account of high debtor and inventory days, and capital expenditure being incurred. Also, the competitive intensity is high on account of presence of other auto ancillaries in the vicinity. Going forward, the ability of the company to increase its scale of operations and manage its working capital intensity would be the key rating sensitivities. RAPL manufactures precision forged and machined auto components in its factory located in Pantnagar, Uttarakhand. The company manufactures various auto components such as flange axle rear, flange propeller shaft, end flange rear, sleeve stop, steering arm, hub brake pedal , drop arm, planetary gear, spicer flange, end flange, rear flange axle, pivot pin, bracket etc. RAPL is promoted by Mr. Vishal Singh (holding a 20% stake) and his family members, and Mr. Singh is also the Managing Director of the company. Mr. Singh also owns a majority stake of 52% and serves as a Director in KVN, which is involved in manufacturing of auto components such as bright bars, traub components, CNC components etc in its manufacturing facilities in Pantnagar. S.K. CONSTRUCTION: CRISIL Suspends B- Rating on INR65MM Cash Loan ----------------------------------------------------------------- CRISIL has suspended its ratings on the bank facilities of S.K. Construction. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 40 CRISIL A4 Suspended Cash Credit 65 CRISIL B-/Stable Suspended The suspension of ratings is on account of non-cooperation by SKC with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, SKC is yet to provide adequate information to enable CRISIL to assess SKC's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key credit factor in its rating process and non-sharing of information as a first signal of possible credit distress, as outlined in its criteria 'Information Availability Risk in Credit Ratings'. SKC, a proprietorship firm, was established by Mr. Sufal Halder in 1982. The firm has been operating as a Class-I contractor for the state government departments, and primarily undertakes repair work for roads in the Howrah, Bankura, Hooghly and West Midnapore districts of West Bengal. S K GOLD: CRISIL Suspends 'B' Rating on INR150MM Cash Credit ------------------------------------------------------------ CRISIL has suspended its ratings on the bank facilities of S K Gold Chain Company Pvt Ltd. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 150 CRISIL B/Stable Suspended The suspension of ratings is on account of non-cooperation by SK with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, SK is yet to provide adequate information to enable CRISIL to assess SK's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key credit factor in its rating process and non-sharing of information as a first signal of possible credit distress, as outlined in its criteria 'Information Availability Risk in Credit Ratings' SK, set up in 1998 by Mr. Suresh Kumar Verma, manufactures and trades gold and fashion jewellery in India. The company commenced operations by manufacturing gold chains. In 2002, it shifted to gold jewellery manufacturing. The company mainly manufactures and trades CZ-studded gold jewellery. The company has also started trading diamond-studded jewellery. SERA EXPORTS: CRISIL Reaffirms 'B' Rating on INR50MM Bill Loan -------------------------------------------------------------- The rating continues to reflect Sera's average financial risk profile, marked by average debt protection metrics, working- capital-intensive operations, customer concentration in its revenue profile, and its susceptibility to intense industry competition. These rating weaknesses are partially offset by the extensive experience of the firm's partners in the architectural hardware industry and its established customer relationships. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Export Packing Credit 30 CRISIL B/Stable (Reaffirmed) Foreign Bill Purchase 50 CRISIL B/Stable (Reaffirmed) Proposed Long Term Bank Loan Facility 30 CRISIL B/Stable (Reaffirmed) Outlook: Stable CRISIL believes that Sera will continue to benefit over the medium term from its partners' extensive industry experience and its established relationships with customers. The outlook may be revised to 'Positive' if the firm increases its scale of operations while improving its financial risk profile. Conversely, the outlook may be revised to 'Negative' if Sera's revenue declines, or if its financial risk profile deteriorates, most likely due to a stretch in its working capital cycle or large additional debt-funded capital expenditure. Update Sera's net sales are estimated to be in the range of INR80 million to INR85 million for 2013-14 (refers to financial year, April 1 to March 31) as against INR43 million reported for 2012-13. The increase was driven by the addition of new products and customers, coupled with higher demand from its existing customers. The firm's operating margin increased by around 270 basis points in 2013-14 to an estimated 11 per cent. The increase in margin was driven by the customised nature of its new products, which fetch better margins. Sera's operations are highly working capital intensive as reflected in its estimated gross current asset (GCA) of around 450 days as on March 31, 2014. The GCA days are driven by large inventory, estimated at 200 to 220 days, and a long receivables cycle of 230 to 250 days. The firm's average bank limit utilisation was around 78 per cent during the 12 months ended March 31, 2014. Sera's net worth is estimated to have remained small at INR44 million to INR48 million as on March 31, 2014. The firm has moderate debt towards funding its working capital requirements; this, coupled with the small net worth, is estimated to have resulted in moderate gearing of 1.7 to 1.8 times as on March 31, 2014. Sera, established in 1999, is owned and managed by Mr. Sachdeva and his family. The firm manufactures architectural hardware, which includes door fittings and window fittings at its facility in Aligarh (Uttar Pradesh). SHARADA FLOUR: CRISIL Assigns 'B' Rating to INR65MM Cash Credit --------------------------------------------------------------- CRISIL has assigned its 'CRISIL B/Stable' rating to the long-term bank facilities of Sharada Flour Products India Pvt Ltd. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 65 CRISIL B/Stable Term Loan 15 CRISIL B/Stable The rating reflects SFPIPL's below-average financial risk profile, marked by a modest net worth, high gearing, and average debt protection metrics and modest scale of operations in the highly fragmented wheat processing industry. These rating weaknesses are partially offset by the extensive industry experience of SFPIPL's promoters and their funding support. Outlook: Stable CRISIL believes that SFPIPL will continue to benefit from its promoters' industry experience and their funding support. The outlook may be revised to 'Positive' in case of significantly better-than-expected cash accruals or substantial capital infusion along with efficient working capital management. Conversely, the outlook may be revised to 'Negative' in case the company's cash accruals are lower than expected or if its working capital requirements are larger than expected or if the company undertakes any unanticipated debt-funded capital expenditure programme. Established in 2010 and based in Kollam (Kerala), SFPIPL processes wheat into different products such as maida, suji, and aata. The company is promoted by Mr. Nair and his family members. SHREE SIDDHNATH: ICRA Ups Rating on INR40cr Cash Credit From 'B+' ----------------------------------------------------------------- ICRA has upgraded the long term rating assigned to the INR60.00 crore (enhanced from INR50.00 crore) cash credit facilities of Shree Siddhnath Cotex Private Limited to [ICRA]BB- from [ICRA]B+. ICRA has also assigned the long term rating of [ICRA]BB- to the INR3.00 crore proposed term loans and INR6.00 crore stand by line of credit of SCPL. The outlook on the long term rating is 'Stable'. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Cash Credit 40.00 Upgraded from [ICRA]B+ to [ICRA]BB-(stable) Cash Credit (Proposed) 20.00 Upgraded from [ICRA]B+ to [ICRA]BB-(stable) Term Loan 3.00 [ICRA]BB-(stable) assigned (Proposed) Standby Line of 6.00 [ICRA]BB-(stable) assigned Credit The upgrade of the rating takes into account the healthy scale up of the company's operations in the past two fiscals that has led to improvement in its cash accruals. The rating also continues to favourably factor in the experience of the company's promoters in the cotton ginning industry, the advantage the company enjoys by virtue of its location in the cotton producing belt of Saurashtra (Gujarat), and the favourable demand outlook for cotton and cottonseeds. The rating, however, continues to be constrained by the company's low profitability levels owing to the limited value addition in the business and highly competitive and fragmented industry structure, its stretched capital structure and weak coverage indicators. The rating also continues to remain constrained by the vulnerability of the company's profitability to raw material prices which are subject to seasonality, and crop harvest; and the regulatory risks with regard to MSP fixed by GoI and restrictions on cotton exports. Incorporated in 2008, Shree Siddhnath Cotex Private Limited is engaged in the business of ginning and pressing of raw cotton having an installed capacity of 85 TPD with its product profile comprising of cotton bales and cotton seeds. It is currently in the process of setting up crushing operations which are expected to commission from October 2014, thereby expanding its portfolio to include cotton seed oil and oil cake. The plant is located at Chotila in Surendranagar district of Gujarat. SCPL was erstwhile promoted by Mr. Girdhar Gangwani along with his family members; however from April 2013, the company was taken over by Mr. Suresh Lunagariya and his family members. Mr. Lunagariya has a vast experience of around two decades in the industry by the virtue of being a director/partner in other cotton ginning companies. Recent Results For the year ended March 31, 2014, Shree Siddhnath Cotex Private Limited reported an operating income of INR281.87 crore and profit after tax of INR0.88 crore as against an operating income of INR217.11 crore and profit after tax of INR0.58 crore for the year ended March 31, 2013. SHREE VIGNESHKUMAR: CRISIL Suspends B+ Rating on INR60M Cash Loan ----------------------------------------------------------------- CRISIL has suspended its ratings on the bank facilities of Shree Vigneshkumar Jewellers. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 60 CRISIL B+/Stable Suspended Metal Loan 40 CRISIL A4 Suspended The suspension of ratings is on account of non-cooperation by SVJ with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, SVJ is yet to provide adequate information to enable CRISIL to assess SVJ's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key credit factor in its rating process and non-sharing of information as a first signal of possible credit distress, as outlined in its criteria 'Information Availability Risk in Credit Ratings'. SVJ was set up as a partnership firm in 1998 by Mr. N S Chengalvarayan and his wife. The firm is in the retail jewellery business and has a showroom in Chennai (Tamil Nadu). SION CERAMICS: CRISIL Assigns 'B+' Rating to INR61.8MM Term Loan ---------------------------------------------------------------- CRISIL has assigned its 'CRISIL B+/Stable' rating to the bank facilities of Sion Ceramics Pvt Ltd. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Term Loan 61.8 CRISIL B+/Stable Cash Credit 30.0 CRISIL B+/Stable Proposed Long Term Bank Loan Facility 33.2 CRISIL B+/Stable The rating reflects its start-up nature and modest scale of operations in the highly competitive ceramic industry and large working capital requirements. These rating weaknesses are partially offset by the promoters' extensive experience in the ceramics industry and the proximity of the company's manufacturing facilities to sources of raw material and labour. Outlook: Stable CRISIL believes that SCPL will benefit from its promoters' extensive industry experience over the medium term. The outlook may be revised to 'Positive' if the company stabilises its operations in a timely manner, leading to larger-than-expected cash accruals. Conversely, the outlook maybe revised to 'Negative' if its accruals are lower than expectations due to reduced order flow or profitability, or if the company's financial risk profile deteriorates due to stretch in working capital or larger-than- expected debt-funded capital expenditure. Incorporated in 2013, SCPL is promoted by Morbi (Gujarat)-based Mr. Pravinbhai Karshanbhai Patel, Mr. Himalay Narbherambhai Patel, and Mr. Dilipbhai Prabhubhai Dangroshiya. The company manufactures ceramic wall tiles. Its commercial operations have commenced from July 2014. SS MARKETING: CRISIL Lowers Rating on INR90MM Cash Credit to D -------------------------------------------------------------- CRISIL has downgraded its rating on the long term bank facilities of SS Marketing (SSM) to 'CRISIL D' from 'CRISIL B+/Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 90 CRISIL D (Downgraded from 'CRISIL B+/Stable') The rating downgrade reflects instances of overdrawls in SSM's cash credit facility for more than 30 days owing to its weak liquidity. SSM has a below-average financial risk profile marked by its small net-worth, high total outside liabilities to tangible net worth ratio, and average debt protection metrics. The firm is also exposed to intense competition in the distribution business resulting in its low profitability margins. However, the firm benefits from its established relationship with its principals - ITC Ltd (ITC) and Samsung India Electronics Pvt Ltd (Samsung), and the extensive experience of SSM's promoter in the marketing and distribution business. SSM was established in 1998 as a sole proprietorship firm by Mr. Regonda Krishna. It is a wholesale distributor of ITC's cigarettes and fast-moving consumer goods in Hyderabad. SSM also operates two retail stores, which sell Samsung products, in Hyderabad. STALLION GARMENTS: ICRA Suspends 'D' Rating on INR14.11cr Loan -------------------------------------------------------------- ICRA has suspended the long-term rating of [ICRA]D assigned to the INR14.11 crore term loan facilities and the INR10.00 crore fund based facilities; and the short-term rating of [ICRA]D assigned to the INR12.00 crore fund based facilities of Stallion Garments. The suspension follows ICRA's inability to carry out a rating surveillance in the absence of the requisite information from the Firm. Stallion Garments, established in the year 1986 as a partnership firm, is primarily engaged in the manufacture and export of hosiery garments to Europe and U.S. The Firm sells innerwear under its brand name "When" for men and "Lam" for women in the domestic market. The Firm also has license to manufacture and market the series of series of Levi's Strauss innerwear for men to India, Sri Lanka, Bangladesh and Nepal. SWASTIK OVERSEAS: CRISIL Reaffirms B Rating on INR5MM Cash Loan --------------------------------------------------------------- CRISIL's ratings on the bank facilities of Swastik Overseas (SO) continue to reflect SO's small scale of operations, the exposure of its operating margin to volatility in foreign exchange (forex) rates, and its below-average financial risk profile, marked by a small net worth and a high total outside liabilities to tangible net worth (TOLTNW) ratio. These rating weaknesses are partially offset by the extensive experience of the firm's promoters in the silk yarn and fabric trading business, and its efficient working capital management. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 5 CRISIL B/Stable (Reaffirmed) Letter of Credit 55 CRISIL A4 (Reaffirmed) Outlook: Stable CRISIL believes that SO will continue to benefit from the extensive experience of its promoters in the silk yarn and fabric trading business. The outlook may be revised to 'Positive' if the firm improves its topline and profitability significantly while maintaining its working capital cycle, or if its promoters infuse substantial capital, thereby improving its net worth. Conversely, the outlook may be revised to 'Negative' if SO's working capital cycle deteriorates, or if there is a sharp decline in its profitability, most likely due to any adverse forex rate movement. Update: SO's topline of around INR260 million and operating margin of about 1.3 per cent in 2013-14 (refers to financial year April 1 to March 31), were broadly in line with those in the previous year; the firm is expected to maintain a similar performance in 2014-15 as well SO has a below-average financial risk profile, marked by a small net worth of about INR12 million and a high peak TOLTNW ratio of around 3 times, as on March 31, 2014. The firm manages its working capital efficiently with procurement against 60- to 90-day letters of credit/buyer's credit, against which it provides a credit period of 15 to 20 days to its customers and maintains an inventory of less than 50 days. This has resulted in negligible utilisation of its cash credit limit of INR5 million during the 12 months through August 2014. SO's cash accruals were, however, low, at just above INR1 million in 2013-14, which constrains its liquidity. The absence of any major debt-funded capital expenditure plan over the medium term will ensure that the firm's financial risk profile will remain at the current level over this period. SO reported a profit after tax (PAT) of INR1.9 million on net sales of INR260.8 million for 2012-13, against a PAT of INR0.8 million on net sales of INR117.5 million for 2011-12. Set up in 2010 and based in Bengaluru, SO trades in silk yarn and fabric. The firm's operations are managed by Mr. Sachin Kumar. TALWAR MOBILES: CRISIL Ups Rating on INR150MM Term Loan to 'B' -------------------------------------------------------------- CRISIL has upgraded its rating on the long-term bank facilities of Talwar Mobiles Pvt Ltd to 'CRISIL B+/Stable' from 'CRISIL B/Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 90 CRISIL B+/Stable (Upgraded from 'CRISIL B/Stable') Proposed Long Term 150 CRISIL B/Stable (Upgraded Bank Loan Facility from 'CRISIL B/Stable') The rating upgrade reflects the substantial improvement in TMPL's capital structure with the prepayment of a large portion of its debt through sale proceeds of its warehouse, and equity infusion by its promoters. The company sold its warehouse for around INR120 million and received equity infusion of INR20 million in the first quarter of 2014-15 (refers to financial year, April 1 to March 31). These funds have been used to prepay the company's debt, which has resulted in an improvement in its capital structure - TMPL's total outside liabilities to tangible net worth (TOL/TNW) ratio is estimated to have declined to around 5.0 times as on August 31, 2014 from 6.8 times as on March 31, 2014. CRISIL believes that TMPL will sustain the improvement in its financial risk profile over the medium term, supported by consistent growth in its net worth and absence of any large debt-funded capital expenditure plan. The rating continues to reflect TMPL's susceptibility to economic cyclicality, and its exposure to intense competition in the automobile dealership industry. The rating of the company is also constrained by its average financial risk profile marked by its modest net-worth, high TOL/TNW ratio, and average debt protection metrics. These rating weaknesses are partially offset by TMPL's established market position in the automobile dealership business supported by the extensive industry experience of its promoters, and the company's low exposure to inventory and debtor risks. Outlook: Stable CRISIL believes that TMPL will continue to benefit over the medium term from its established market position and its promoters' extensive experience in the automobile dealership business. The outlook may be revised to 'Positive' if there is a substantial and sustained improvement in the company's revenue and profitability margins, or there is a substantial increase in its net worth on the back of sizeable equity infusion by its promoters. Conversely, the outlook may be revised to 'Negative' in case of a steep decline in TMPL's profitability margins, or significant deterioration in its capital structure caused most likely by a stretch in its working capital cycle. TMPL is promoted by the Hyderabad-based Talwar family, which has two decades of experience in the automobile dealership business. The company is an authorised dealer for Hyundai Motors India Ltd vehicles in Hyderabad. It has three showrooms and four workshops. The company is currently managed by Mr. Sunil Talwar and his son, Mr. Saral Talwar. UNISOURCE PAPERS: ICRA Reaffirms C Rating on INR1.83cr Term Loan ---------------------------------------------------------------- ICRA has reaffirmed the long term rating at [ICRA]C for INR1.83 crore of term loans (enhanced from INR0.74 crore) and INR1.50 crore cash credit limits of Unisource Papers Private Limited. ICRA has also reaffirmed the rating at [ICRA]A4 for the INR5.00 non- fund based bank limits of UPPL. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund based-Cash Credit 1.50 [ICRA]C reaffirmed Term Loans 1.83 [ICRA]C reaffirmed Non-fund based- Letter of Credit 5.00 [ICRA]A4 reaffirmed The ratings reaffirmation of Unisource Papers Private Limited primarily incorporates continuing instances of Letter of Credit (LC) devolvement thereby resulting in overutilization of working capital limits reflecting the highly stressed liquidity profile of the company. The ratings also continue to incorporate subdued profit margins on account of low capacity utilizations, limited value addition and the fragmented nature of the industry with low entry barriers and the vulnerability of margins to raw material prices and foreign exchange fluctuations. The ratings, however, also take into consideration the promoter's long track record in the business of trading and paper processing, comfortable capital structure and expected improvement in the financial profile of the company following job-work orders from ITC Limited. Incorporated in 2005, UPPL was promoted by Mr. Aurora and is engaged in the business of paper trading and also executes job- work orders for paper manufacturers and printing agencies. The company imports high quality virgin kraft paper, processes it and caters to the Indian packaging industry. Currently, UPPL has an installed capacity of 56,400 metric tonne/annum at its manufacturing units located in Pune. The company has a registered office in Mumbai. Recent Results UPPPL recorded a net profit of INR0.01 crore on an operating income of INR20.18 crore for the year ending March 31, 2014. VIJAY STEEL: ICRA Reaffirms B+ Rating on INR9cr Fund Based Limits ----------------------------------------------------------------- ICRA has reaffirmed the long-term rating to the INR1.71 crore (reduced from INR2.77 crore) term loan and the INR9.0 crore fund- based bank facilities of Vijay Steel Corporation Private Limited (Erstwhile Vicksons Steels Private Limited) at [ICRA]B+. ICRA has reaffirmed the short-term rating to the INR6.0 crore fund-based and the INR9.0 crore (reduced from INR15.0 crore) non-fund based bank facilities of VSCPL at [ICRA]A4. Interchangeability between the fund-based and non-fund based limits is allowed such that the total rated working capital limits do not exceed INR18.0 crore. The utilisation of total fund-based limits is capped at INR9.0 crore. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Term Loans 1.71 [ICRA]B+ reaffirmed Long term fund 9.00 [ICRA]B+ reaffirmed based limits Short term fund 6.00 [ICRA]A4 reaffirmed based limits Non fund based 9.00 [ICRA]A4 reaffirmed limits The ratings reaffirmations take into account the fact that despite witnessing some improvement in FY14, financial risk profile of the company remains weak characterised by a leveraged capital structure, modest accruals and depressed coverage indicators. The company reported a net profit of INR0.22 crore in FY14 as against net loss of INR2.69 crore in FY13. ICRA also notes that large corporate guarantees are extended by VSCPL to its associate company namely Vijay Transmission Private Limited (VTPL, rated [ICRA]BB-(Stable)/[ICRA]A4), which further affects the financial risk profile of the company. The ratings also take into account the tight liquidity profile of the company and intensely competitive nature of the steel trading industry, which exerts pricing pressures. Nevertheless, the ratings take into account long experience of the promoters in the steel trading business; established relationships with reputed customers, which indicates good product quality and ensures repeat orders and low inventory levels maintained by the company, which reduce its exposure to volatility in steel prices. VSCPL was incorporated in 1966 by Mr. K. C. Paliwal as a partnership firm for trading of steel products. Subsequently, the firm was converted into a private limited company in 1995. The promoters have nearly four decades of experience in steel trading and have established relationships with reputed construction companies. The company predominantly trades in long products of numerous varieties and grades, which it procures from secondary steel manufacturers, rolling mills and other traders. The company's name was changed to VSCPL from Vicksons Steels Private Limited in 2012. Recent Results As per the audited results of FY13, VSCPL reported a net loss of INR2.69 crore on an operating income of INR110.40 crore. As per the provisional results for FY14, VSCPL reported a profit after tax (PAT) of INR0.22 crore on the back of an operating income of INR110.0 crore. VISHWASRAO NAIK: CRISIL Assigns B+ Rating to INR75MM Cash Loan -------------------------------------------------------------- CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-term bank facilities of Vishwasrao Naik Sahkari Sakhar Karkhana Ltd. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 75 CRISIL B+/Stable Proposed Long Term Bank Loan Facility 25 CRISIL B+/Stable The rating reflects VNSSKL's below-average financial risk profile marked by high gearing and average debt protection metrics, driven by large debt funded capital expenditure (capex) and working- capital-intensive operations. The rating also factors in VNSSKL's susceptibility to cyclicality and to regulatory changes in the sugar industry. These rating weaknesses are partially offset by the society's moderate operating efficiency backed by integrated operations and the benefits it derives from established relationships with its farmers/members, which renders good availability of sugar cane. Outlook: Stable CRISIL believes that VNSSKL will continue to benefit over the medium term from its established relationships with farmers in its command area and integrated operations. The outlook may be revised to 'Positive' in case of significant increase in the society's cash accruals supported by improved operating margins, leading to improvement in its financial risk profile, particularly its liquidity. Conversely, the outlook may be revised to 'Negative' if VNSSKL's financial risk profile, particularly liquidity, weakens most likely on account of lower cash accruals or stretch in working capital cycle caused by higher-than-expected inventory. VNSSKL is a co-operative sugar mill located in the Shirala taluka of Sangli district (Maharashtra). It was set up in 1972-73 (refers to financial year, April 1 to March 31) by Mr. Vishwasrao Naik, and is currently chaired by Mr. Mansingh Rao Naik. VNSSKL operates a sugar mill with a sugarcane crushing capacity of 2500 tonnes per day, a distillery with a capacity 30 kilolitres per day, and a 10- kilowatt cogeneration plant. For 2013-14, VNSSKL, on a provisional basis, booked a profit after tax (PAT) of INR2.4 million on net sales of INR2.4 billion; it had booked a PAT of INR2.1 million on net sales of INR1.9 billion for 2012-13. * INDIA: Gov't Mulls Introducing Bankr. Code for Bankrupt Firms --------------------------------------------------------------- The Wall Street Journal's livemint reports that in a move aimed at facilitating the faster wind-up of insolvent companies and providing an easier exit route to investors, the government is considering introducing a bankruptcy code for corporate entities that are headed for failure. Government officials said the legislation could be introduced by the time of the presentation of the next Union Budget in February, livemint says. The finance ministry formed a committee last month headed by former law secretary T.K. Viswanathan and comprising members from the departments of economic affairs and financial services, the ministries of law, corporate affairs, and micro, small and medium enterprises, the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (Sebi), the report recalls. According to livemint, the idea is to create a separate set of laws to streamline and update the existing regulations that deal with bankruptcy, although a final decision will be taken only after the terms of reference are finalized by the department of economic affairs towards the end of this month. "The country does not have an insolvency law. This will be for the domestic corporate sector," a government official said on condition of anonymity, livemint relays. Investors and the regulators have highlighted the need for an efficient bankruptcy system to deal with distressed companies so that investors are able to recover their money at the earliest, especially in the light of many companies facing financial difficulties as economic growth slowed to below 5% in each of the past two years, according to livemint. ================= I N D O N E S I A ================= BAKRIE TELECOM: Meeting Held as Rival Bondholder Groups Duel ------------------------------------------------------------ David Yong and Yudith Ho at Bloomberg News report that Bakrie Telecom held a meeting on September 24 to discuss reorganizing its debt as two competing groups of bondholders duel over the company's future. Bakrie Telecom, which defaulted on its $380 million of 11.5 percent notes in December, planned to update investors on its business performance and outline bond restructuring terms at the 10:00 a.m. [September 24] gathering in Singapore, according to a notice obtained by Bloomberg News. The Indonesian company and its affiliates were sued in a New York state court Sept. 22 by investors who claim Bakrie breached its contract regarding the dollar bonds, the report says. Bakrie's debt was downgraded to default by Standard & Poor's and to a level signaling imminent default by Fitch Ratings Ltd. after it failed to pay a $21.8 million coupon on its bonds in November, according to Bloomberg. The company, which has posted losses the past three years running, defaulted in December following a one- month grace period, Bloomberg says. "Their operating performance is weak and we don't see any scenario where it's going to drastically improve," Mehul Sukkawala, an S&P analyst in Singapore, told Bloomberg by phone Sept. 23. "A lot depends on how it comes out of this restructuring, how much debt they carry then and at what interest rates." According to the September 24 report, Bakrie's May 2015 notes, sold to investors at par in April 2010, rose 0.437 cents to 9.586 cents on the dollar as of 9:26 a.m. in Singapore, Bloomberg- compiled prices show. They traded as high as 111.548 cents in October 2010, the report notes. About Bakrie Telecom PT Bakrie Telecom Tbk -- http://www.bakrietelecom.com/-- is an Indonesia-based telecommunication services provider. The Company's services include fixed wireless access using extended- time division multiple access (E-TDMA) technology, which is a limited mobility service using code division multiple access (CDMA) 2000 1x technology. The Company's products consist of Esia, Wifone, Wimode, EsiaTel and SLI Hemat 009. * * * As reported in the Troubled Company Reporter-Asia Pacific on June 4, 2014, Fitch Ratings downgraded Indonesia-based PT Bakrie Telecom Tbk's (BTEL) Long-Term Foreign- and Local-Currency Issuer Default Ratings to 'Restricted Default' (RD) from 'C'. The USD380m May 2015 bond fully guaranteed by BTEL has also been affirmed at 'C' while the Recovery Rating on the bond has been downgraded to 'RR5' from 'RR4'. Fitch said the downgrade to 'RD' follows the uncured default on a coupon payment in November 2013 and no subsequent coupon payment or public announcement about the progress of debt restructuring discussions with its creditors. ==================== N E W Z E A L A N D ==================== ROSS ASSET: Investors Want Fidelity Fund Protection --------------------------------------------------- Hamish Fletcher at The New Zealand Herald reports that David Ross' out-of-pocket victims want an industry-backed fidelity fund to help "screwed" investors recover money from similar fraud and company failures. The Herald says the Ross Asset Management Investors Group -- formed in the wake of that company's collapse -- has written to the Commerce Minister Craig Foss criticising the "unfair and ineffective" regulatory environment in New Zealand. Wellington-based Ross Asset Management, run by one of New Zealand's biggest fraudsters David Ross, cost investors around NZ$115 million when it failed in November 2012. Investors are likely to get only a fraction of this back, the Herald notes. The Herald says Mr. Ross, a financial adviser, ran a Ponzi-scheme through the Wellington business and disguised it by falsely reporting clients' investments. His scheme reported false profits to investors of NZ$351 million between June 2000 and September 2012 from the purported trading of fictitious securities. Despite Mr. Ross receiving record-setting 10 year 10 month jail sentence, the RAM investor group has expressed dissatisfaction with this prison term -- a common sentiment found among victims of fraud, the Herald states. According to the Herald, the investor group, which copied Prime Minister John Key into its letter, said it was shocking that the finance industry did not "assist in unwinding messes like the RAM Ponzi". "We are aware that the USA has had legislation in place for 44 years (the Securities Investor Protection Act 1970 or SIPA) which requires an industry fidelity fund to help unwind frauds and failures," the investors said in the letter cited by the Herald. The Herald relates that spokesman for the investor group, Bruce Tichbon, said similar laws should be put in place in New Zealand, setting up an industry-financed fidelity fund to "help protect screwed investors" and aid with recovery action. "The problem is now dumped on the investors. With what little money is left they have to try fund recovery . . . what we haven't got is a proper ambulance at the bottom of the cliff," he said, the Herald relays. The Herald adds that elsewhere in the letter the investor group asked why there was no law in New Zealand to "reasonably unwind a Ponzi in a fair and just manner?" "We have been informed by the liquidator that there is no NZ law that ensures victims can effectively reclaim a reasonable proportion of their money from those who received stolen money," the group, as cited by the Herald, said. The group said there were "crippling problems" with unwinding Ross Asset Management and demanded Government action, the Herald adds. As reported in the Troubled Company Reporter-Asia Pacific on Nov. 8, 2012, the High Court appointed PricewaterhouseCoopers partners John Fisk and David Bridgman as Receivers and Managers to Ross Asset Management Limited and nine other associated entities following application by the Financial Markets Authority. The associated entities are: * Bevis Marks Corporation Limited; * Dagger Nominees Limited; * McIntosh Asset Management Limited; * Mercury Asset Management Limited; * Ross Investment Management Limited; * Ross Unit Trusts Management Limited; * United Asset Management Limited; * Chapman Ross Trust; * Woburn Ross Trust; * Ace Investments Limited or Ace Investment Trust Limited or Ace Investment Trust; * Vivian Investments Limited; and * Ross Units Trusts Limited. The Receivers and Managers have also been appointed to Wellington investment adviser David Robert Gilmore Ross personally. Mr. Fisk said they have identified investments of nearly NZ$450 million held on behalf of more than 900 investors across 1,720 individual accounts. The High Court in mid-December ordered John Fisk and David Bridgman be appointed liquidators of these companies: -- Ross Asset Management Limited (In Receivership); -- Bevis Marks Corporation Limited (In Receivership); -- McIntosh Asset Management Limited (In Receivership); -- Mercury Asset Management Limited (In Receivership); -- Dagger Nominees Limited (In Receivership); -- Ross Investment Management Limited (In Receivership); -- Ross Unit Trust Management Limited (In Receivership); and -- United Asset Management Limited (In Receivership). TERRY SEREPISOS: High Court to Decide on Bankruptcy Release ----------------------------------------------------------- Hamish Fletcher at The New Zealand Herald reports that Terry Serepisos is to have his financial affairs examined in front of a High Court judge, who will decide when the former reality TV star and football club owner is to be released from bankruptcy. The Official Assignee -- which manages personal insolvencies -- confirmed on September 23 it had objected to Mr. Serepisos' release from bankruptcy, which would normally last for three years, the Herald relates. Declared bankrupt in 2011 owing about NZ$203 million, Mr. Serepisos was due to be discharged this October -- until the OA filed the formal objection with the High Court at Wellington, according to the Herald. "This means that he will not be automatically discharged from his bankruptcy when he becomes eligible for discharge on October 7, 2014," the report quotes an OA spokesman as saying. Instead, Mr. Serepisos is due to appear in the High Court at Wellington for a hearing where his financial affairs will be examined, the report relays. The Herald relates that the spokesman said the court would decide when Mr. Serepisos would be released from bankruptcy. No date has been set for this hearing, the report notes. According to the report, the OA filed its opposition to Mr. Serepisos' release from bankruptcy on September 11 -- well before the former property developer was arrested and taken to court over child support for his 19-year-old son. The Herald says Mr. Serepisos was arrested on September 22 after arriving at Wellington Airport from Greece, where he was looking after his mother. Bankrupts need permission from the OA to travel overseas, the report notes. Asked whether Mr. Serepisos had approval for the trip and how he funded it, the spokesman said: "Information of this nature about a bankrupt's affairs is normally withheld from third parties in order to protect the bankrupt's privacy," the Herald adds. * * * As reported in the Troubled Company Reporter-Asia Pacific on Sept. 27, 2011, the New Zealand Herald said Wellington businessman and former Phoenix football owner Terry Serepisos was declared bankrupt in the High Court at Wellington after his last-minute bid for more time to pay debts was rejected. Judge Gendall granted an application by South Canterbury Finance, owed some NZ$22.5 million, to declare Mr. Serepisos bankrupt after he failed to convince the court to grant him four more days to secure funding from a Hong Kong-based merchant bank. In August 2011, BusinessDesk recalled, Mr. Serepisos was granted adjournment to put forward a proposal to creditors that would sell down his property portfolio in an orderly fashion, in a bid to meet the entirety of the NZ$204 million owed to his lenders. The portfolio, made up of some 150 residential properties and more than six commercial buildings, was valued at NZ$232.5 million, BusinessDesk said. The Serepisos-owned companies include Century City Hunter Street, Century City Investments, Century City Developments, Century City Management, and Century City Football, which previously owned the Wellington Phoenix football team. ==================== S O U T H K O R E A ==================== KB FINANCIAL: FSC to Strengthen Inspection of Finance Firms ----------------------------------------------------------- Choi Kyong-ae at The Korea Times reports that the authorities will supervise or inspect financial holding companies and their affiliates together, not separately, the Financial Supervisory Service (FSS) said September 22. "There should be improvement in our supervision and inspection systems given the recent mismanagement at KB Financial Group. Among other things, there should be a thorough review of the governing structure of financial holding companies and the selection process of board members," the report quotes FSS Governor Choi Soo-hyun as saying. The Korea Times says the move comes after KB Financial Group Chairman Lim Young-rok was dismissed and KB Kookmin Bank President Lee Kun-ho resigned from their jobs this month, following a months-long tug of war over a major management decision to change the banking system. Their lack of cooperation and disagreement worsened consumer sentiment towards KB and its business operations since April when the bank decided to change the system, the report relates. Executives are not alone. The board of KB Financial came under fire for lack of consistency in its positions towards the change of system from an International Business Machines' (IBM) main frame system to a Unix-based one to cut costs. Lim and Lee were at odds over the changeover. Lim stood for the change as banks are increasingly adopting the Unix system, but Lee took issue with the system's stability, says the Korea Times. According to the report, KB Financial directors initially supported Lim who pushed for the change. However, they later dismissed Lim after the FSC suspended him for three months from his chairman job. The KB board plans to select a chairman candidate for KB Financial by late October and then name a new president for KB Kookmin, the report says. The report relates that Mr. Choi said in the statement, "KB Financial should seek ways to boost shareholders' value and customers' rights. And there should not be internal conflicts within a financial holding company as these hurt the company and customers' interests." The governor went on to say that the FSS will give full support to help KB Financial get back on track. He asked FSS officials to "be on high alert about any possible financial incidents" in coming months as the heads of the country's biggest retail bank are gone, the report adds. PANTECH CO: To Be Put Up For Sale Soon -------------------------------------- Yonhap News reports that Pantech Co., under a court receivership, is set to be available for sale in the near future, industry sources said on September 24, in a move to get the company back on its feet. The report says the latest development came as the Seoul Central District Court gave the nod to Pantech's plan to post itself on the market for sale, a month after it commenced the troubled firm's court receivership program. Pantech's creditors, led by the Korea Development Bank, will accept bids from potential buyers soon, the sources, as cited by Yonhap, said. According to the report, the plan came as the creditors took into account the fact that Pantech's liquidating value stands at KRW189.5 billion (US$182.3 million), whereas its going-concern value is around KRW382.4 billion. Yonhap says industry watchers anticipate a foreign tech player will become the winner of the troubled firm. Earlier this year, India-based Micromax had expressed its intention to acquire shares in Pantech, the report recalls. Although Pantech graduated from a five-year debt rescheduling program in December 2011, its financial footing weakened again as it struggled with falling sales from increased competition in the local smartphone market dominated by Samsung Electronics Co. and LG Electronics Inc., according to Yonhap. As reported in Troubled Company Reporter on Aug. 21, 2014, The Wall Street Journal said Pantech Co. filed for court receivership after its latest flagship smartphone failed to take off. According to the report, the company, in which Qualcomm Inc. and Samsung Electronics Co. are major foreign shareholders, has been relying heavily on the South Korean market to sell its phones, where rivals like Samsung and LG Electronics Inc. are dominant players. About Pantech Headquartered in Seoul, Korea, Pantech Co., Ltd. -- http://www.pantech.co.kr/-- manufactures mobile phones. Pantech's products are mainly global system for mobile communication and code division multiple access phones. The company markets its products internationally, and supplies Motorola as an original equipment manufacturer and original design manufacturer. It has seven subsidiaries involved in the information technology and telecommunication sectors, and operates in Argentina and Russia, among other countries. =============== T H A I L A N D =============== TRUE CORPORATION: Moody's Upgrades Corporate Family Rating to B2 ---------------------------------------------------------------- Moody's Investors Service has upgraded the corporate family rating of True Corporation Public Company Limited, and that of its consolidated subsidiary, True Move Company Limited, to B2 from Caa1. The outlook on the ratings is stable. This action concludes the review for upgrade which commenced on 11 June 2014. Ratings Rationale "The rating actions follow True Corp's completion of a THB65 billion (approximately $2.0 billion) recapitalization, which has significantly improved the company's leverage and equity base," says Nidhi Dhruv, a Moody's Assistant Vice President and Analyst. True Corp raised THB28.6 billion in a private placement of shares to China Mobile (Aa3 stable) in September, while it raised the remaining THB36.4 billion through a rights offering to existing shareholders. True Corp used around THB55 billion of the proceeds to repay all of its outstanding bank loans, significantly reducing its debt level, while at the same time removing all associated financial covenants. Pro forma for the debt repayment, Moody's estimates True Corp's unadjusted debt level to be around THB45 billion as at June 2014 from THB99 billion and its adjusted debt/EBITDA to fall to below 4.0x by December 2014 from previous estimate of 6.5x-7.0x prior to the announcement of the recapitalization. Moody's makes operating lease adjustments to estimate True Corp's adjusted debt levels. Moody's expects True Corp's adjusted debt/EBITDA to remain in the range of 3.5x-4.0x over the next one to two years, given (1) True Corp's ongoing negative free cash flow -- due in turn to its high level of investments in 3G and 4G -- and (2) the increase in operating lease payments to its infrastructure fund. The transaction has also allowed the company to improve its weak equity base. Moody's estimates its reported shareholders' equity increased to over THB60 billion from THB6.2 billion as of June 2014, having been eroded after several years of net losses. In addition, savings in interest costs following the debt reduction should further help improve True Corp's cash flows. Following the transaction, China Mobile now holds 18% of the total issued and outstanding shares of True Corp and is the second largest shareholder. China Mobile will also have the right to appoint two of 18 board members and one independent director according to True Corp. Furthermore, True Corp and China Mobile have signed a strategic partnership agreement and intend to explore business cooperation. "Business cooperation with China Mobile would provide True Corp with an opportunity to leverage on China Mobile's technology and scale. China Mobile is a leader in time division-long-term evolution (TD-LTE) technology and is the world's largest mobile operator by subscriber numbers," says Dhruv, also the Lead Analyst for True Corp and China Mobile. The rating outlook is stable, reflecting True Corp's improved financial profile to help support continued 3G and 4G network investments to defend its market share. Downward rating pressure could emerge if True Corp continues to experience significant operating losses and substantial borrowing needs to fund its capex and operations. Its ratings could also be downgraded if True Corp undertakes aggressive shareholder returns or acquisition/expansion plans. Specific indicators that Moody's would consider include adjusted debt/EBITDA rising above 4.5x and negative free cash flow greater than THB15 billion. The rating will also likely experience downward pressure if competition escalates or if deterioration in political, economic, and regulatory environment in Thailand result in adjusted EBITDA margins declining below 20%. Upward pressure is unlikely over the near term, but could emerge if the company's fundamental financial profile continues to improve, such that adjusted debt/EBITDA falls below 3.0x-3.5x and there is a sustainable trend of improving free cash flow with reducing negative free cash flow. The Charoen Pokphand Group (CP Group, unrated) remains the largest shareholder in True Corp with a stake of approximately 51.3%. Moody's notes that True Move is rated at the same level as True Corp, largely because True Move's bank debt and bonds have historically been guaranteed by True Corp's mobile subsidiaries that offer mainly 3G services. In addition, given the strategic importance of the mobile business, Moody's believes that True Corp will support True Move, in times of need. The principal methodology used in this rating was Global Telecommunications Industry published in December 2010. Headquartered in Bangkok, True Corporation Public Company Limited is an integrated provider of fixed-line, broadband, mobile and pay TV services. True Move Company Limited, which is 99.4%-owned by True Corp, is a mobile company providing 2G services. ********* Tuesday's edition of the TCR-AP delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR-AP editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Tuesday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR-AP constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR-AP editor holds some position in the issuers' public debt and equity securities about which we report. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR-AP. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com Friday's edition of the TCR-AP features a list of companies with insolvent balance sheets obtained by our editors based on the latest balance sheets publicly available a day prior to publication. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Asia Pacific is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Valerie U. Pascual, Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Julie Anne L. Toledo, and Peter A. Chapman, Editors. Copyright 2014. All rights reserved. ISSN: 1520-9482. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. TCR-AP subscription rate is US$775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter Chapman at 215-945-7000 or Nina Novak at 202-241-8200. *** End of Transmission ***