/raid1/www/Hosts/bankrupt/TCRAP_Public/141002.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, October 2, 2014, Vol. 17, No. 195
Headlines
A U S T R A L I A
ALINTA ENERGY: S&P Raises ICR to 'BB-'; Outlook Stable
AUSTRALIAN BILLBOARD: Placed in Administration
GGQ HYDRAULIC: PwC Appointed As Administrators
GLOBAL CAPACITY: BRI Ferrier Appointed as Administrators
PEPPER RESIDENTIAL: S&P Assigns Prelim. B Rating to Class F Notes
RIETTE EXPORT: In Administration; First Meeting Set Oct. 8
SUMMERFRUIT ORCHARDS: Placed in Receivership
VAN EYK: ASIC Raids Sydney Offices Again; Plans to Sell NZ Arm
I N D I A
AMIT COTTONS: CRISIL Cuts Rating on INR1.04BB Cash Loan to 'D'
AQUILA CERAMIC: CRISIL Assigns B Rating to INR48.5MM Term Loan
ASIAN THAI: CRISIL Assigns 'B' Rating to INR80MM Cash Credit
BABASAHEB DESHMUKH: CRISIL Rates INR224MM Term Loan at 'B-'
BARMENDRA AGROTECH: ICRA Assigns B Rating to INR25.72cr FB Limits
BEST BUILDWELL: CRISIL Reaffirms B+ Rating on INR100MM Cash Loan
CHINAR SYNTEX: CRISIL Reaffirms B+ Rating on INR210MM Cash Loan
D. S. TEXTILES: ICRA Suspends D Rating on INR4.30cr Term Loan
DACC INT'L: CRISIL Reaffirms B+ Rating on INR40MM Cash Credit
DELUXE KNITTING: CRISIL Cuts Rating on INR70MM Packing Loan to D
DEVIPRASAD CONSTRUCTIONS: ICRA Ups Rating on INR12cr Loan From D
G3 FABRICATION: ICRA Assigns D Rating to INR8.55cr Term Loan
IVRCL CHANDRAPUR: ICRA Cuts Rating on INR313.99cr Term Loan to D
K V ALLOYS: CRISIL Assigns B+ Rating to INR49.6MM Term Loan
KESHAR SAFETY: ICRA Assigns 'D' Rating to INR7cr Term Loan
KONERU CONSTRUCTIONS: CRISIL Ups Rating on INR30M Cash Loan to B+
KOSHAL POLY: CRISIL Raises Rating on INR118.1MM Bank Loan to B-
LUXMI RICE: ICRA Reaffirms B Rating on INR10cr Long Term Loan
MAYUR COLDSTORAGE: CRISIL Reaffirms D Rating on INR65MM Term Loan
METALLICA INDUSTRIES: ICRA Reaffirms D Rating on INR40MM Limits
NARESH CLOTH: CRISIL Assigns 'B+' Rating to INR75MM Bank Loan
PPARADISE AUTO: CRISIL Cuts Rating on INR55MM Cash Credit to D
PROVIEW RISHABH: ICRA Cuts Rating on INR31cr Fund Based Loan to D
QUAZAR INFRASTRUCTURE: CRISIL Puts B Rating on INR90MM Cash Loan
SHAH REALTY: ICRA Assigns B+ Rating to INR9.75cr Term Loan
SHREE DURGA: CRISIL Assigns B+ Rating to INR100MM Cash Credit
SOCIAL CHANGE: CRISIL Cuts Rating on INR412.5MM Term Loan to B+
SREE GOURIPUTRA: CRISIL Ups Rating on INR55MM Cash Loan to 'B'
SRI RAMA: CRISIL Assigns 'B+' Rating to INR129MM Bank Loan
TAPAL STEEL: CRISIL Reaffirms D Rating on INR100MM Cash Credit
UNIK BAZAR: CRISIL Assigns 'B+' Rating to INR60MM Cash Credit
J A P A N
SHINSEI BANK: S&P Lowers Rating on Preferred Stock to 'BB-'
N E W Z E A L A N D
PYNE GOULD: Faces NZX Suspension For Failure to File Reports
N O R T H E R N M A R I A N A I S L A N D S
COMMONWEALTH UTILITIES CORPORATION: Avoids Receivership
S O U T H K O R E A
WOORI BANK: Fitch Retains 'BB-' Rating on Hybrid Securities
T A I W A N
JIH SUN: Fitch Affirms 'B' Short-Term Issuer Default Rating
WINTEK CORP: To Sell Assets to Resolve Financial Woes
- - - - -
=================
A U S T R A L I A
=================
ALINTA ENERGY: S&P Raises ICR to 'BB-'; Outlook Stable
------------------------------------------------------
Standard & Poor's Ratings Services said that it has raised its
long-term issuer credit rating and issue credit ratings on
Australian energy retailer and electricity generator Alinta Energy
Finance Ltd, a subsidiary of Alinta Holdings Ltd (collectively
Alinta), to 'BB-' from 'B+'. The outlook is stable. S&P has also
affirmed the recovery rating of '3' on Alinta's senior debt
issuance.
"The rating actions reflect an improvement in Alinta's financial
risk profile, which we believe has been driven by improved
leverage credit metrics," said credit analyst Richard Creed.
S&P's positive revision to Alinta's financial risk profile
reflects its view that Alinta will sustain an "aggressive"
financial risk profile, with ratio of adjusted gross debt to
EBITDA of between 4x and 4.5x for the next two-to-three years.
Alinta has achieved higher earnings than expected, mainly as a
result of better performance from its Alinta West and its East
Coast integrated retail and electricity generation businesses.
S&P regards Alinta's liquidity as "adequate". S&P expects the
group's sources of liquidity to cover its uses of liquidity by
more than 1.2x in the next 12 months.
"The outlook on the long-term rating is stable, reflecting
Alinta's relatively stable earnings and cash flows from its core
businesses and our expectations that Alinta will achieve fully
adjusted gross debt to EBITDA of about 4x to 4.5x over the next
two years," said Mr. Creed.
Upward rating pressure is considered unlikely given private-equity
ownership and S&P's expectation that shareholders will seek to
maximize returns. For an upgrade to occur, transition out of
financial sponsor ownership is likely to be necessary, as well as
financial policies supportive of operating at lower leverage
levels.
Downward rating pressure could arise if there were a material
deterioration in Alinta's liquidity from stretched working capital
or aggressive shareholder distributions of all cash.
Alternatively, downward momentum could occur if there
deterioration in financial metrics such that Alinta's fully
adjusted debt to EBITDA were to be sustained above 5x. This could
emanate from increased competition in the Alinta West retail
business or weaker operating performance observed in deteriorating
margins.
AUSTRALIAN BILLBOARD: Placed in Administration
----------------------------------------------
Derrick Craig Vickers and Darryl Edward Kirk of
PricewaterhouseCoopers were appointed as administrators of
Australian Billboard Company Pty Ltd on Sept. 26, 2014.
A first meeting of the creditors of the Company will be held at
Soul Surfers Paradise, 4-14 The Esplanade, in Surfers Paradise,
Queensland, on Oct. 8, 2014, at 11:00 a.m.
GGQ HYDRAULIC: PwC Appointed As Administrators
----------------------------------------------
Darryl Edward Kirk and Derrick Craig Vickers of
PricewaterhouseCoopers were appointed as administrators of
GGQ Hydraulic Solutions Pty Ltd, trading as Enzed Charters Towers,
on Sept. 29, 2014.
A first meeting of the creditors of the Company will be held at
PricewaterhouseCoopers, Level 15, 123 Eagle Street, in Brisbane,
Queensland, on Oct. 10, 2014, at 11:00 a.m.
GLOBAL CAPACITY: BRI Ferrier Appointed as Administrators
--------------------------------------------------------
Giovanni Maurizio Carrello and Mathieu Tribut of BRI Ferrier were
appointed as administrators of Global Capacity Solutions Pty Ltd
on Sept. 25, 2014.
A first meeting of the creditors of the Company will be held at
BRI Ferrier Western Australia, on Oct. 8, 2014, at 10:30 a.m.
PEPPER RESIDENTIAL: S&P Assigns Prelim. B Rating to Class F Notes
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
ratings to seven classes of nonconforming residential mortgage-
backed securities (RMBS) to be issued by Permanent Custodians Ltd.
as trustee of Pepper Residential Securities Trust No.13. Pepper
Residential Securities Trust No.13 is a securitization of
nonconforming residential mortgages originated by Pepper HomeLoans
Pty Ltd. (Pepper).
The preliminary ratings reflect:
-- S&P's view of the credit risk of the underlying collateral
portfolio, including the fact that this is a closed
portfolio, which means no further loans will be assigned to
the trust after the closing date.
-- S&P's view that the credit support is sufficient to
withstand the stresses it applies. This credit support
comprises note subordination for each class of rated note.
-- The availability of a retention amount, amortization
amount, and yield reserve, which will all be funded by
excess spread, but at various stages of the transaction's
term. They will have separate functions and timeframes,
including reducing the balance of senior notes, reducing
the balance of the most subordinated notes, and paying
senior expenses and interest shortfalls on the class A
notes.
-- The extraordinary expense reserve of AUD150,000, funded
from day one, available to meet extraordinary expenses.
The reserve will be topped up via excess spread if drawn.
-- S&P's expectation that the various mechanisms to support
liquidity within the transaction, including a liquidity
facility equal to 2.5% of the outstanding balance of the
notes, and principal draws, are sufficient under S&P's
stress assumptions to ensure timely payment of interest.
-- The condition that a minimum margin will be maintained on
the assets.
A copy of Standard & Poor's complete report for Pepper Residential
Securities Trust No.13 can be found on RatingsDirect, Standard &
Poor's Web-based credit analysis system, at:
http://www.globalcreditportal.com
The issuer has not informed Standard & Poor's (Australia) Pty
Limited whether the issuer is publically disclosing all relevant
information about the structured finance instruments that are
subject to this rating report or whether relevant information
remains non-public.
STANDARD & POOR'S 17G-7 DISCLOSURE REPORT
SEC Rule 17g-7 requires an NRSRO, for any report accompanying a
credit rating relating to an asset-backed security as defined in
the Rule, to include a description of the representations,
warranties and enforcement mechanisms available to investors and a
description of how they differ from the representations,
warranties and enforcement mechanisms in issuances of similar
securities.
The Standard & Poor's 17g-7 Disclosure Report included in this
credit rating report is available at:
http://standardandpoorsdisclosure-17g7.com/2746.pdf
REGULATORY DISCLOSURES
PRELIMINARY RATINGS ASSIGNED
Class Rating Amount (mil. A$)
A-1 AAA (sf) 280.0
A-2 AAA (sf) 47.6
B AA (sf) 19.6
C A (sf) 18.4
D BBB (sf) 13.6
E BB (sf) 8.8
F B (sf) 6.0
G N.R. 6.0
N.R.--Not rated.
RIETTE EXPORT: In Administration; First Meeting Set Oct. 8
----------------------------------------------------------
Roderick Mackay Sutherland -- RodS@jirschsutherland.com.au -- and
Daniel Jean Civil -- DanielC@jirschsutherland.com.au -- of Jirsch
Sutherland were appointed as administrators of Riette Export Pty
Ltd on Sept. 26, 2014.
A first meeting of the creditors of the Company will be held at
the offices of Jirsch Sutherland, Level 4, 55 Hunter Street, in
Sydney, on Oct. 8, 2014, at 11:00 a.m.
SUMMERFRUIT ORCHARDS: Placed in Receivership
--------------------------------------------
Cliff Sanderson at Dissolve.com.au reports that the packhouse and
orchard of Summerfruit Orchards Ltd at Earnscleugh is for sale by
tender following the move of the company to enter receivership
earlier in September. It is understood that the company has
between 10 and 15 permanent employees and over 300 seasonal
workers at its harvest peak, the report says.
Dissolve.com.au, citing the website of Summerfruit, says the
business began operating in 1986 concentrating on the production
of export apricots, cherries, apples and nectarines. The vision of
the company was to become the number one producer of stonefruit,
the report relays.
VAN EYK: ASIC Raids Sydney Offices Again; Plans to Sell NZ Arm
--------------------------------------------------------------
Chris Pash at Business Insider Australia reports that the
Australian Securities and Investments Commission has again raided
the Sydney offices of fund manager and long-time research house
van Eyk.
According to the report, the Australian Financial review said ASIC
was back at van Eyk on September 30, taking documents and files.
ASIC was at the offices last week as part of an investigation into
van Eyk's Blueprint funds management business, the report relates.
The report says the problems centre around a series of portfolios
van Eyk ran as investment manager on behalf of Macquarie Bank,
which is the responsible entity charged with protecting investor
interests for the funds.
The report says the funds had about AUD800 million under
management but the problem area is reported to be a AUD31 million
investment in hedge fund Artefact Partne INR. This investment was
not immediately available to be turned into cash.
Last month, four of the funds were either suspended or terminated
and in total 13 have been shut, the report recalls.
Business Insider Australia adds that the New Zealand regulator is
also investigating.
The Financial Markets Authority in New Zealand said it's liaising
with ASIC and making its own inquiries into van Eyk and the
Blueprint funds, the report adds.
Meanwhile, Stuff.co.nz reports that sources said the raids came as
van Eyk was preparing to part ways with its New Zealand business.
Van Eyk's administrator, insolvency firm Moore Stephens, is
believed to have headed in New Zealand and be seeking to sign sale
documents with another Kiwi firm on October 1, Stuff.co.nz
relates.
As reported in the Troubled Company Reporter-Asia Pacific on
Sept. 17, 2014, SmartCompany said that an Australian investment
research, advice and funds management company founded
in 1989 has collapsed. van Eyk Research called in voluntary
administrator Trent Hancock of Moore Stephens Sydney
Corporate Recovery Group on September 15. According to the
report, van Eyk Research has four business arms -- investment
research through van Eyk Research, consulting through van Eyk
Consulting, financial advisory through van Eyk Advice and funds
management through van Eyk Blueprint Series -- and the
administrators said in a statement it entered administration
because of the "recent and sudden closure of the Blueprint Series
of managed funds".
=========
I N D I A
=========
AMIT COTTONS: CRISIL Cuts Rating on INR1.04BB Cash Loan to 'D'
--------------------------------------------------------------
CRISIL has downgraded its rating on the long term bank facilities
of Amit Cottons Private Limited to 'CRISIL D' from 'CRISIL
BB+/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 1,047 CRISIL D (Downgraded from
'CRISIL BB+/Stable')
Term Loan 150.2 CRISIL D (Downgraded from
'CRISIL BB+/Stable')
The rating downgrade reflects instances of delay by ACPL in
servicing its debt; the delays have been caused by the company's
weak liquidity.
ACPL's profitability margins are susceptible to volatility in
cotton prices, and the company is also exposed to intense
competition and regulatory changes in the cotton ginning industry.
However, the company benefits from its promoters extensive
experience in the cotton ginning business.
ACPL is engaged in ginning and pressing of raw cotton and its
ginning unit is located in Shadnagar district in Andhra Pradesh.
The company is owned and managed by Mr. Vinod Agarwal and his
sons.
AQUILA CERAMIC: CRISIL Assigns B Rating to INR48.5MM Term Loan
--------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable/CRISIL A4' ratings to the
bank facilities of Aquila Ceramic Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 48.5 CRISIL B/Stable (Assigned)
Proposed Long Term
Bank Loan Facility 40.5 CRISIL B/Stable (Assigned)
Bank Guarantee 11 CRISIL A4 (Assigned)
Cash Credit 25 CRISIL B/Stable (Assigned)
The ratings reflect ACPL's start-up phase and modest scale of
operations in the highly competitive ceramics industry, and its
large working capital requirements. These rating weaknesses are
partially offset by the extensive industry experience of the
company's promoters and the proximity of its manufacturing
facilities to raw material and labour sources.
Outlook: Stable
CRISIL believes that ACPL will continue to benefit over the medium
term from its promoters' extensive industry experience. The
outlook may be revised to 'Positive' in case of a significant
improvement in the company's revenue and profitability, leading to
a substantial increase in its cash accruals and hence to a better
financial risk profile,. Conversely, the outlook may be revised to
'Negative' if ACPL's operating margin is lower than expected or
its working capital management deteriorates, thereby significantly
weakening its financial risk profile.
Incorporated in 2013, ACPL is promoted by Morbi (Gujarat)-based
Mr. Rajeshbhai Kasundra, Mr. Sureshkumar N Kothiya, and others.
The company manufactures non-vitrified wall tiles. It started
commercial operations from February 2014. Its key promoters, Mr.
Kasundra and Mr. Kothiya, have been in the ceramic tiles
manufacturing industry through other group companies for more than
a decade.
ASIAN THAI: CRISIL Assigns 'B' Rating to INR80MM Cash Credit
------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable' rating to the long-term
bank facilities of Asian Thai Foods and Investments Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 80 CRISIL B/Stable
Term Loan 20 CRISIL B/Stable
The rating reflects Asian's expected weak financial risk profile
marked by weak debt protection metrics, and small scale of
operations in the intensely competitive packaging industry. These
rating weaknesses are partially offset by the company's moderate
net worth and gearing, its promoters' extensive experience in the
packaging industry, and the funding support it receives from the
promoters.
Outlook: Stable
CRISIL believes Asian will continue to benefit over the medium
term from its promoters' extensive industry experience; its
liquidity, however, is expected to remain constrained by small
cash accruals, large debt obligations, and working-capital-
intensive operations. The outlook may be revised to 'Positive' in
case the company's liquidity improves aided by large cash accruals
driven by significant scaling up of operations and profitability,
or there is a substantial improvement in its working capital
management. Conversely, the outlook may be revised to 'Negative'
if Asian's financial risk profile deteriorates because of low cash
accruals or large debt-funded capital expenditure or working
capital requirements.
Incorporated in 2006 by the Sharda group of Nepal, under the name
of Abhishek Viniyog Pvt Ltd, Asian got its current name at the end
of 2006. The company manufactures woven sacks of polypropylene,
which are used for packaging in various industries such as cement
and food items. The company's manufacturing unit is at Rudrapur in
Nainital (Uttarakhand).
BABASAHEB DESHMUKH: CRISIL Rates INR224MM Term Loan at 'B-'
-----------------------------------------------------------
CRISIL has assigned its 'CRISIL B-/Stable' rating to the long-term
bank facilities of Babasaheb Deshmukh Shetkari Sahakari Soot Girni
Maryadit (Babasaheb).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 224 CRISIL B-/Stable
The rating reflects Babasaheb's modest scale of operations in the
competitive and fragmented cotton industry and vulnerability of
its operating performance to volatility in raw material prices and
adverse regulatory changes. The rating also factors in the
company's below-average financial risk profile, marked by a modest
net worth, high gearing, and weak debt protection metrics. These
rating weaknesses are partly offset by the extensive experience of
Babasaheb's promoter in the cotton industry.
Outlook: Stable
CRISIL believes that Babasaheb will continue to benefit over the
medium term from its promoter's extensive experience in the cotton
industry and established relations with customers. The outlook may
be revised to 'Positive' in case of higher-than expected scale of
operations while improving its profitability margins, resulting in
better-than-expected cash accruals from operations. Conversely,
the outlook may be revised to 'Negative' if Babasaheb's scale of
operations and profitability decline, resulting in lower-than-
expected cash accruals from operations, or if the company
undertakes larger-than-expected debt-funded capital expenditure
programmes, or if its working capital cycle stretches, resulting
in deterioration in its financial risk profile, especially
liquidity.
Set up in 1990, Babasaheb manufactures cotton yarn at its
manufacturing unit in Sangli (Maharashtra), which has an installed
capacity of 19488 spindles. Babasaheb's day-to-day operations are
managed by Mr. Sukumar Powar.
BARMENDRA AGROTECH: ICRA Assigns B Rating to INR25.72cr FB Limits
-----------------------------------------------------------------
ICRA has assigned a long term rating of [ICRA]B to INR25.72 crore
fund-based facilities of Barmendra Agrotech Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Fund
Based Limits 25.72 [ICRA]B assigned
The assigned rating is constrained by the risks associated with
the completion of the green field project for setting up of cold
storage unit within reasonable timelines, budgeted costs and also
timely stabilization of its operations; given that the project is
currently facing execution delays. The rating is further
constrained by the high working capital intensive nature of
operations given the high inventory holding period which coupled
with large scheduled debt repayments going forward may put
pressure of the company's liquidity in the medium term.
The assigned rating, however, favourably takes into account the
satisfactory track record of the promoters' group in the agro
trading business and the favourable demand scenario for the fruits
trading industry given paucity of cold storage facilities in the
country for perishables. Further, proposed new facility would be
eligible under Government's subsidy from National Horticulture
Board which would support the project's return metrics.
In ICRA's view, the key rating sensitivities would be the
company's ability to execute the project within the reasonable
timelines and utilization of the installed capacity at optimum
levels, as these would be critical for future cash accruals and
servicing of debt obligations in a timely manner.
Barmendra Agrotech Private Limited was incorporated in the year
2006. The company is promoted by Mr. Chattrasal Singh Judev, Mrs.
Uma Kumari & Mr. Krishnadev Singh. The company is setting up a
controlled atmosphere cold storage unit at Unchera (Satna) in
Madhya Pradesh with an installed capacity of 2500 MT.
BEST BUILDWELL: CRISIL Reaffirms B+ Rating on INR100MM Cash Loan
----------------------------------------------------------------
CRISIL's ratings on the bank facilities of Best Buildwell Pvt Ltd
continue to reflect BBPL's large working capital requirements,
susceptibility to intense competition in the civil construction
industry, low bargaining power with key customers, customer and
geographic concentration in its revenue profile, and exposure to
risks arising from unrelated investments in various real estate
properties. These rating weaknesses are partially offset by the
company's moderate capital structure and term debt.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 100 CRISIL A4 (Reaffirmed)
Cash Credit 100 CRISIL B+/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that BBPL will continue to benefit over the medium
term from its moderate order book. However, the company will
remain highly dependent on timely completion of its projects for
Delhi Development Authority (DDA) and The Bhagwati Cooperative
Group Housing Society. The outlook may be revised to 'Positive' if
BBPL achieves significantly higher-than-expected revenue while
sustaining its operating margin, or improves its working capital
management. Conversely, the outlook may be revised to 'Negative'
if the company reports lower-than-expected revenue or
profitability, or its capital structure deteriorates, most likely
because of higher than expected working capital requirements or an
increase in unrelated investments.
Update
BBPL registered a 40 per cent year-on-year growth in its revenue
to around INR436 million in 2013-14 (refers to financial year,
April 1 to March 31); the growth was mainly driven by timely
execution of its residential projects and realisation of payments
from its customers. However, due to one of the projects being in
the advanced stages of completion, the company's operating margin
has remained in the range of 7.5 to 8.5 per cent in 2013-14, as
against around 9.2 per cent in the previous year. CRISIL believes
that BBPL's topline will grow at a moderate rate over the medium
term, driven by its healthy unexecuted order book.
BBPL's operations are working capital intensive, as reflected in
its high gross current assets (GCAs), estimated at 220 to 230 days
as on March 31, 2014. The high GCAs were driven by inventory of
around 100 days and receivables of 85 days. As a result, the
company's average bank limit utilisation has been high, at an
average of around 95 per cent during the 12 months through June
2014.
BBPL's net worth is estimated to have remained moderate in the
range of INR200 million to INR210 million as on March 31, 2014.
The company has moderate debt towards funding its working capital
requirements; this, coupled with its moderate net worth, is
estimated to have resulted in a gearing of 1.5 to 1.6 times as on
March 31, 2014.
BBPL provides turnkey construction services, mainly undertaking
civil works, and erection and commissioning of projects in group
housing schemes for government agencies such as DDA and National
Buildings Construction Corporation Ltd.
CHINAR SYNTEX: CRISIL Reaffirms B+ Rating on INR210MM Cash Loan
---------------------------------------------------------------
CRISIL's rating on the bank facilities of Chinar Syntex Ltd
continues to reflect the company's weak financial profile and
working-capital-intensive operations. The rating also factors in
the exposure of CSL's operating profitability to any fluctuations
in raw material prices. These rating weaknesses are partially
offset by the extensive experience of CSL's promoters in the
textile industry and moderate scale of operations.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 210 CRISIL B+/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility 20 CRISIL B+/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that CSL will continue to benefit over the medium
term from its promoters' extensive industry experience. The
outlook may be revised to 'Positive' if the company scales up its
operations substantially, while improving its profitability, thus
leading to better-than-expected cash accruals and easing the
pressure on its liquidity. Conversely, the outlook may be revised
to 'Negative' if CSL's financial risk profile deteriorates
further, most likely because of larger-than-expected working
capital requirements or a large debt funded capital expenditure.
CSL was incorporated in in 1992. The company is promoted by Mr.
Purushottam Aggarwal, Mr. Naresh Aggarwal, and Mr. Nand Kishore
Aggarwal. CSL manufactures suiting and shirting fabric under the
Chinar brand. The company has a weaving unit at Bhiwani (Haryana).
CSL has reported profit after tax (PAT) of INR5 million on net
sales of INR652 million for 2012-13; and PAT of INR4.6 million on
net sales of INR574 million for 2011-12.
D. S. TEXTILES: ICRA Suspends D Rating on INR4.30cr Term Loan
-------------------------------------------------------------
ICRA has suspended the [ICRA]D ratings assigned to the INR10.00
crore long-term and short-term, fund and non-fund based bank
facilities of D. S. Textiles. The suspension follows ICRA's
inability to carry out a rating surveillance in the absence of the
requisite information from the firm.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-Term Fund Based
Limit - Term Loans 4.30 [ICRA]D Suspended
Long-Term Fund Based
Limit - Cash Credit 3.50 [ICRA]D Suspended
Short-Term Non-Fund
Based Limit - Bank
Guarantee 0.04 [ICRA]D Suspended
Proposed Limits 2.16 [ICRA]D Suspended
According to its suspension policy, ICRA may suspend any rating
outstanding if in its opinion there is insufficient information to
assess such rating during the surveillance exercise. ICRA will
withdraw the rating in case it remains under suspension for a
period of three years.
Established as a proprietorship firm by Mr. Rakesh Dharamdas
Talreja in 2009, D. S. Textiles (DST) is engaged in the
manufacture of grey fabrics for suitings & shirtings and jacquard
fabrics for home decor purposes. DST commenced its commercial
operations in October 2009 and has ever since been adding to its
capacity. Currently the firm has 32 looms of which 24 looms are
jacquard-fitted, 1 rapier loom and 7 plain looms.
DACC INT'L: CRISIL Reaffirms B+ Rating on INR40MM Cash Credit
-------------------------------------------------------------
CRISIL's ratings on the bank facilities of DACC International Pvt
Ltd (DACC) continue to reflect DACC's modest scale of operations,
low operating margins due to low value addition, and weak
financial risk profile marked by below-average debt protection
metrics. These rating weaknesses are partially offset by DACC's
diverse clientele and the extensive experience of its promoters in
the alloys industry.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 40 CRISIL B+/Stable (Reaffirmed)
Inland/Import
Letter of Credit 140 CRISIL A4 (Reaffirmed)
Outlook: Stable
CRISIL believes that DACC's financial risk profile will remain
weak over the medium term, marked by its constrained margins and
working-capital-intensive operations. The outlook may be revised
to 'Positive' in case of more-than-expected increase in the
company's revenue, profitability, or equity infusion, leading to
improvement in its financial risk profile. Conversely, the outlook
may be revised to 'Negative' if DACC reports substantially lower-
than-expected revenue or profitability, its working capital
requirements increase, or it undertakes a significantly debt-
funded expansion programme, leading to deterioration in its
financial risk profile.
Incorporated in 2007 and promoted by Mr. Brij Bansal, DACC
manufactures and supplies alloys of aluminium and zinc, primarily
used for castings in the oil and gas and automotive industries.
Its facility is in Faridabad (Haryana); DACC's day-to-day
operations are handled by Mr. Anuj Bansal and Mrs. Shalu Bansal.
DELUXE KNITTING: CRISIL Cuts Rating on INR70MM Packing Loan to D
----------------------------------------------------------------
CRISIL has downgraded its ratings on the bank facilities of Deluxe
Knitting Mill to 'CRISIL D/CRISIL D' from 'CRISIL B/Stable/CRISIL
A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Long Term Loan 50 CRISIL D (Downgraded from
'CRISIL B/Stable')
Packing Credit 70 CRISIL D (Downgraded from
'CRISIL A4')
The rating downgrade reflects instances of delay by DKM in
servicing its debt obligations; the delays have been caused by the
firm's weak liquidity. DKM has weak liquidity on account of its
stretched working capital cycle.
The ratings also reflect DKM's small scale of operations and its
weak financial risk profile marked by weak debt protection
metrics. The firm, however, benefits from DKM's partners' long
standing industry experience.
Established as a partnership firm at Tiruppur (Tamil Nadu) in
1987, DKM exports knitted garments.
DEVIPRASAD CONSTRUCTIONS: ICRA Ups Rating on INR12cr Loan From D
----------------------------------------------------------------
ICRA has upgraded the long term rating assigned to the INR 12
crore cash credit limits and INR 12 crore bank guarantee limits of
Deviprasad Constructions Private Limited from [ICRA]D to [ICRA]B+.
ICRA has also upgraded the long term and short term ratings
assigned to the unallocated facility of Rs 3 crore from [ICRA]D to
[ICRA]B+ and [ICRA]A4.
The ratings upgradations take into account timely servicing of the
debt obligation by DCPL during the last twelve months. The ratings
also take comfort from the established track record of the company
with more than twenty five years of experience in the construction
business. ICRA also notes that the company has established strong
professional network and reputation which has helped them in
getting repeat orders from clients like Karantaka Housing Board.
The ratings are, however, constrained by DCPL's modest scale of
operations in the highly competitive construction industry. The
ratings are further constrained by the weak financial profile of
the company as indicated by a gearing level of 1.4x, NCA/Total
Debt of 10%, and interest cover of 1.6x in FY 2014 and the
vulnerability to raw material price volatility given the limited
ability to pass on the price increases to its clients. Further the
high working capital intensity has led to stretched liquidity
position, as evidenced by high utilisation of fund based working
capital limits. ICRA notes that all the orders of the company are
located in Karnataka exposing the company to geographical
concentration risk.
While DCPL had an unexecuted order book position of INR 40.44
crore as on Aug. 31, 2014, which translates into an order book to
revenue ratio of 1.53x with respect to FY 2014 revenue, timely
execution of the orders remains critical to ensure revenue growth,
going forward.
Deviprasad Construction, a construction company, was established
by Mr. K. Vasudeva Shetty at Kaup, Karnataka in the year 1984 as a
proprietorship concern. Initially, the entity undertook only civil
construction work and mainly focused on contracts from private
bodies. In 1995, the entity was converted into a private limited
company. Since then, the main focus of the company remains
construction of buildings, apartments, layouts & office complexes
for government agencies in Karnataka.
Recent Results
The firm reported a net profit of INR 0.5 crore on an operating
income of INR32.38 crore in FY 2013 and a net profit of INR1.0
crore on an operating income of INR 26.31 crore in FY 2014 (as per
provisional results).
G3 FABRICATION: ICRA Assigns D Rating to INR8.55cr Term Loan
-----------------------------------------------------------------
ICRA has assigned a long term rating of [ICRA]D to the INR8.55
crore term loans, INR0.70 crore fund-based limits and a short term
rating of [ICRA]D to the INR0.50 crore non-fund based limits of G3
Fabrication & Engineering Private Limited Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based Limits 0.70 [ICRA]D assigned
Term Loan 8.55 [ICRA]D assigned
Non-Fund Based Limits 0.50 [ICRA]D assigned
The ratings are constrained on account of the stretched liquidity
position of the company which has resulted in delays in debt
servicing in the past leading to a debt restructuring undertaken
in July 2014. The rating is further constrained by the small scale
of operations of the company and its weak financial profile as
reflected by high gearing levels, low profit margins, and weak
coverage indicator. The rating also takes into account the
slowdown in order inflow during FY14 resulting in a limited order
book position, with concerns over future order inflows as well.
ICRA notes that the operating profitability remains vulnerable to
any sharp fluctuations in raw material prices given that the
equipment supply contracts are fixed price in nature.
ICRA, however, positively takes into account the long experience
of the promoters in the fabrication business, the reputed customer
profile and diversified product portfolio of the company.
G3 Fabrication & Engineering Private Limited was started as a
partnership firm in 2010 by Mr. Suresh Bhatt, Mr. Suresh Kotadia,
Mr. Mohan Nair and Mr. Raju Mathai. It is engaged in fabrication
and manufacturing of pressure vessels, heat exchangers, reactors
and custom built equipments and system. The typical scope of
equipment supply contracts for the company includes design and
engineering (mainly mechanical design), procurement of raw
materials, fabrication, testing and supply/erection at the client
site. The company has its fabrication facility located at Hazira,
Surat, with an installed capacity of 480 MTPA. GFEPL started
commercial operations in December 2011. The total cost of the
project was around INR13 crore which was funded through term loans
of INR8 crore and the rest through equity and unsecured loan from
promoters. Since FY 14, the company has also started trading in
embroidered fabrics.
For FY 2013, the company has reported Profit after Tax (PAT) of
INR0.05 crore on an operating income of INR7.39 crore. For FY
2014, the company has reported net loss of INR0.45 crore on an
operating income of INR5.53 crore.
IVRCL CHANDRAPUR: ICRA Cuts Rating on INR313.99cr Term Loan to D
----------------------------------------------------------------
ICRA has downgraded the long-term rating to [ICRA]D from [ICRA]BB+
assigned earlier to the INR313.99 crore term loans and INR5.19
crore non-fund based facilities of IVRCL Chandrapur Tollways
Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term Loans 313.99 [ICRA]D (Downgraded;
suspension revoked)
Non-Fund Facilities 5.19 [ICRA]D (Downgraded;
suspension revoked)
The earlier suspension dated June 25, 2014 stands revoked.
The rating revision reflects the delay in servicing of debt
obligation by ICTL because of tight liquidity position. ICRA notes
complete infusion of sponsor's equity commitment of INR222.5
crore, however, delay in receipt of grant from the state
government has resulted in stretched liquidity profile, thus
impacting the project progress and cost as well as timeliness of
debt repayments. The scheduled commercial operation date (SCOD)
and the subsequent debt repayment commencement date was amended
once earlier with SCOD and debt repayment commencement date being
revised to June 30, 2014 and August 31, 2014 respectively. With
continuing delay in receipt of grant from state government
resulting in delay in the project progress, ICTL's management is
in the process of seeking further modification in the scheduled
commercial operation date (SCOD) and the subsequent debt repayment
commencement date. ICRA will continue to monitor the project
progress, its budget along with timeliness towards payment of debt
obligation going forward.
IVRCL Chandrapur Tollways Limited is a Special Purpose Vehicl
(SPV) incorporated in October 2010 for four-laning and improvement
of Karanji-Wani-Ghuggus-Chandrapur section of MSH-6 & 7 of length
85.11 km in Yavatmal and Chandrapur District of Maharashtra. The
project is to be developed on Design, Build, Operate, Transfer
basis. The project was earlier envisaged to have a capital outlay
of INR735.99 crore. However, owing to delay in execution of the
project the total cost has increased to INR775.77 crore, primarily
on account of interest during construction component. The revised
cost is being funded with a debt of INR341.83 crore of which
INR27.84 crore is yet to be tied up, positive grant of INR199.5
crore and sponsor equity of contribution of INR234.43 crore
(including promoter support of INR11.93 crore). As on July 2014
end, total equity was infused by the sponsor while INR252.91 crore
of debt was drawdown apart from INR101.23 crore of grant.
ICTL was a subsidiary of IVRCL Assets & Holdings Limited (IAHL)
(holding 98%) and IVRCL Limited (holding 1%). IAHL (excluding its
real estate assets) was merged into IVRCL in February 2012 with
effect from April 2011 and thus IVRCL has become the holding
company from the effective date. IVRCL is a Hyderabad based
construction company having presence in major infrastructure
segments including urban/rural water supply, irrigation &
environment related projects, pipelines, power projects
(substations and transmission & distribution Lines), buildings &
industrial structures, roads & bridges.
K V ALLOYS: CRISIL Assigns B+ Rating to INR49.6MM Term Loan
-----------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the bank
facilities of K V Alloys. The rating reflects KVA's nascent and
small scale of operations, and large working capital requirements.
These rating weaknesses are mitigated by the promoters' extensive
industry experience and their established network.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 49.6 CRISIL B+/Stable
Cash Credit 45.0 CRISIL B+/Stable
Proposed Long Term
Bank Loan Facility 5.4 CRISIL B+/Stable
Outlook: Stable
CRISIL believes that KVA will continue to benefit from the
extensive experience of its promoters copper pipes and tubes
industry, over the medium term. The outlook may be revised to
'Positive' if the firm efficiently manages its working capital
requirement or significantly improves its topline and
profitability, resulting in sizeable cash accruals. Conversely,
the outlook may be revised to 'Negative' if KVA's liquidity
deteriorates with substantial working capital requirements; or its
financial risk profile weakens because of significantly low top
line and profitability, or sizeable debt-funded capital
expenditure.
KVA was founded by Mr. Navendu Babbar and Mr. Aryan Dhunna in
2013. The firm manufactures copper pipes and tubes at its facility
in Chopanki (Rajasthan). KVA started commercial operations in July
2014.
KVA is expected to have a moderate gearing over the medium term
since the project has estimated DER (Debt Equity Ratio) of 0.68
times. Going forward the capital structure of firm will be driven
by short-term funding requirements due to large working capital
requirements of the firm.
KESHAR SAFETY: ICRA Assigns 'D' Rating to INR7cr Term Loan
----------------------------------------------------------
ICRA has assigned a long term rating of [ICRA]D to the INR7.00
crore term loan and INR2.00 crore cash credit facility of Keshar
Safety Glass. ICRA has also assigned a short term rating of
[ICRA]D to the INR3.63 crore import letter of credit, which is a
sub-limit of term loan of KSG.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based Limit- 7.00 [ICRA]D assigned
Term Loan
Fund Based Limit- 2.00 [ICRA]D assigned
Cash Credit
Non Fund Based Limit (3.63) [ICRA]D assigned
Import Letter of Credit
The assigned ratings primarily take into account KSG's
unsatisfactory track record in timely servicing of debt
obligations, leading to overdue interest and principal on the term
loan. The ratings are also impacted by significant delay witnessed
in commissioning its plant and the weak financial profile of KSG,
characterized by highly leveraged capital structure on account of
debt funded capex. The ratings also factor in the substantial debt
servicing obligation in the near term, which may exert pressure on
the firm's cash flows going forward and the risks associated with
the legal status of KSG as a partnership firm, including the risk
of capital withdrawal by the partners. The ratings, however,
favourably consider the long experience of the promoter in the
similar line of business through its group entity and entitlement
of the firm to various fiscal incentives and subsidies, available
under North East Industrial and Investment Promotion Policy
(NEIIPP) 2007, which are likely to favourably impact the
profitability and cash flows going forward.
Established in May 2011 as a partnership firm, KSG is engaged in
manufacturing of toughened glass, aluminium windows, and UPVC
(unplasticized polyvinyl chloride) doors and windows with an
annual installed capacity of 4,96,080 square meter, 2,400 pieces,
1,500 pieces and 5,700 pieces respectively. The firm also has
clear float glass cutting capacity of 2,13,900 square meter per
annum. The manufacturing facility of the firm is situated at
Kamrup, Assam. The firm is being managed by the four partners,
namely Mr. Rajesh Kumar Bengani, Ms. Keshar Devi Bengani, Mr.
Ankush Bengani and Mr. Amit Bengani. The firm commenced its
commercial production in the month of June 2014.
KONERU CONSTRUCTIONS: CRISIL Ups Rating on INR30M Cash Loan to B+
-----------------------------------------------------------------
CRISIL has upgraded its rating on the long-term bank facilities of
Koneru Constructions Pvt Ltd (KCPL) to 'CRISIL B+/Stable' from
'CRISIL B/Stable', while reaffirming its rating on the short-term
bank facilities at 'CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 50 CRISIL A4 (Reaffirmed)
Cash Credit 30 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
Proposed Cash 10 CRISIL B+/Stable (Upgraded
Credit Limit from 'CRISIL B/Stable')
SME Care Loan 5 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
Term Loan 5 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
The upgrade reflects the improvement in KCPL's business risk
profile driven by a substantial increase in its scale of
operations, while maintaining its profitability margins. The
upgrade also reflects the expected improvement in KCPL's net
worth, which would enhance its financial flexibility, and the
subsequent improvement in its capital structure. CRISIL believes
that KCPL will sustain the improvement in its financial risk
profile over the medium term on the back of consistent growth in
its net-worth and absence of any large debt-funded capital
expenditure (capex) programme.
KCPL's revenues, which registered a year-on-year growth of 15 per
cent in 2013-14 (refers to financial year, April 1 to March 31),
is expected to grow by 80 per cent in 2014-15. The revenue growth
will be driven by timely execution of its healthy order-book of
around INR340 million (3.2 times its 2013-14 revenues) as on
June 30, 2014. The company's operating profit margin is expected
to remain stable at around 13.0 per cent over the medium term, as
the company will continue to prudently bid for building its order
book.
KCPL's net worth is expected to increase to around INR55 million
as on March 31, 2015 from around INR31 million as on March 31,
2013 on the back of moderate accretion to reserves over this
period. Consequently, its gearing is expected to improve to around
0.8 times as on March 31, 2015 from 1.3 times as on March 31,
2013.
The ratings reflect KCPL's modest scale of operations in the
intensely competitive construction industry, high degree of
geographic and customer concentration in its order-book, the
company's large working capital requirements, and its small net-
worth limiting its financial flexibility. These rating weaknesses
are partially offset by the extensive experience of KCPL's
promoters in the civil construction segment, and the company's
above-average financial risk profile marked by its low gearing and
robust debt protection metrics.
Outlook: Stable
CRISIL believes that KCPL will continue to benefit over the medium
term from its promoters' extensive industry experience. The
outlook may be revised to 'Positive' if there is a sustained
improvement in its working capital management, or there is
substantial improvement 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 the company's
profitability margins, or significant deterioration in its capital
structure caused most likely by a stretch in its working capital
cycle.
KCPL was incorporated in 2006 by Mr. K V Prasad. The company is
engaged in civil and structural fabrication. The company is based
in Vijayawada, Andhra Pradesh.
KOSHAL POLY: CRISIL Raises Rating on INR118.1MM Bank Loan to B-
---------------------------------------------------------------
CRISIL has upgraded its ratings on the bank facilities of Koshal
Poly Pack to 'CRISIL B-/ Stable/CRISIL A4' from 'CRISIL D/CRISIL
D'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 3.5 CRISIL A4 (Upgraded from
'CRISIL D')
Cash Credit 40.0 CRISIL B-/Stable (Upgraded
from 'CRISIL D')
Proposed Long Term 118.1 CRISIL B-/Stable (Upgraded
Bank Loan Facility from 'CRISIL D')
Rupee Term Loan 38.4 CRISIL B-/Stable (Upgraded
from 'CRISIL D')
The rating upgrade reflects timely servicing of debt obligations
by KPP, backed by funding support from the promoters. The rating
upgrade also factors in CRISIL's belief that KPP's liquidity will
remain supported, backed by the low incremental working capital
requirements and absence of debt-funded capital expenditure plans
over the medium term.
The rating reflects KPP's modest scale of operations in the highly
fragmented packaging industry, and its below-average financial
risk profile, marked by modest net worth, high gearing and subdued
debt protection metrics. These rating weaknesses are partially
offset by the extensive industry experience of KPP's partners and
their established relationship with customers.
Outlook: Stable
CRISIL believes that KPP will benefit over the medium term from
its partners' extensive industry experience and their established
relationship with customers. The outlook may be revised to
'Positive' if the firm reports higher-than-expected cash accruals,
driven by increase in scale of operations, leading to improvement
in financial risk profile. Conversely, the outlook may be revised
to 'Negative' in case of deterioration in its financial risk
profile, particularly liquidity, because of lower-than-expected
cash accruals, or lower-than-expected funding support from
partners, or elongation in the working capital cycle.
KPP was established as a partnership firm in 2010 by the Bhimrajka
family. The firm commenced operations in January 2013 and is
engaged in manufacturing of high-density polyethylene and
polypropylene bags and fabrics.
LUXMI RICE: ICRA Reaffirms B Rating on INR10cr Long Term Loan
-------------------------------------------------------------
ICRA has reaffirmed its long term ratings of [ICRA]B on the
INR10.00 crore fund based bank facilities of Luxmi Rice Mill.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based-Long Term 10.00 [ICRA]B; reaffirmed
The rating continues to be constrained by the highly competitive
nature of the rice milling industry, along with the risk of
fluctuation in the price of raw material, which has impacted the
profitability indicators of the company. The high gearing of the
company, arising out of substantial debt funding of working
capital requirements coupled with low profitability, has resulted
in modest coverage indicators for the company. The rating also
factors in the agro climatic risks, which can impact the
availability of the basic raw material, namely paddy. However this
risk is partially offset by the proximity of the mill to major
rice growing areas which results in the easy availability of
paddy. The rating also favorably takes into account the extensive
experience of the proprietor in the rice industry.
LRM was established in 1983 as a proprietorship firm by Mr. Roshan
Lal. LRM is engaged in the business of processing and trading of
rice in the domestic market . The entire raw material requirement
is met from the local mandis in Haryana as well as commission
agents in Uttar Pradesh. The firm deals in both Basmati as well as
non-Basmati rice. The firm has its manufacturing unit at Nissing,
Haryana with a milling capacity of 2 tonnes per hour of paddy.
Recent Results
LRM reported a net profit of INR0.12 crore on an operating income
of INR30.87 crore for 2013-14 and a net profit of INR0.10 crore
on an operating income of INR26.03 crore for the previous year.
MAYUR COLDSTORAGE: CRISIL Reaffirms D Rating on INR65MM Term Loan
-----------------------------------------------------------------
CRISIL's rating on the long-term bank facilities of Mayur
Coldstorage Pvt Ltd continues to reflect instances of delay by
MCPL in servicing of its debt; the delays have been caused because
of the company's weak liquidity, driven by its working-capital-
intensive operations.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 10 CRISIL D (Reaffirmed)
Proposed Long Term
Bank Loan Facility 25 CRISIL D (Reaffirmed)
Term Loan 65 CRISIL D (Reaffirmed)
MCPL also has a below-average financial risk profile, marked by a
modest net worth, high gearing, and subdued debt-protection
metrics, and a modest scale of operations. These weaknesses are
partially offset by the extensive experience of MCPL's promoters
in the cold storage industry.
MCPL was incorporated in 2000, by the Shaikh family, along with
business acquaintances Mr. Esmail Ebrahim Kharodia and Mr.
Mohammad Muld Haroon Khan. MCPL provides cold storage facilities
to various wholesalers and distributors located in and around APMC
market at Vashi (Navi Mumbai). Mr. Esmail Ebrahim Kharodia
oversees the day-to-day operations of the company.
METALLICA INDUSTRIES: ICRA Reaffirms D Rating on INR40MM Limits
---------------------------------------------------------------
ICRA has re-affirmed the long term rating assigned to the INR 40.0
crore fund-based facilities of Metallica Industries Limited (MIL)
at [ICRA]D.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based Limits 40.0 [ICRA] D Re-affirmed
The rating re-affirmation continues to reflect delays by MIL in
meeting its debt servicing obligation, coupled with delays in
project execution accentuated by cost overruns, which has led to
stretched liquidity position for the company. Further, advances to
group entities, from where timely recovery of funds remains
critical has added to the liquidity issues for the company.
MIL has undertaken the construction of industrial galas / offices
under the name Kamla Industrial Park at Charkop Kandivali West,
Mumbai. MIL proposes to build a industrial complex with ground
plus seven floors and a total saleable area of 2,71,072 square
feet, mainly targeted at small businesses/manufacturing units.
NARESH CLOTH: CRISIL Assigns 'B+' Rating to INR75MM Bank Loan
-------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the bank
facilities of Naresh Cloth Store.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 50 CRISIL B+/Stable
Proposed Long Term
Bank Loan Facility 75 CRISIL B+/Stable
The rating reflects NCS's modest scale of operations and large
working capital requirements. The rating also reflects the firm's
below-average financial risk profile marked by high total outside
liabilities to tangible net worth ratio. These rating weaknesses
are partially offset by the benefits that NCS derives from its
promoter's extensive experience in the textile industry and its
established relationship with its key supplier.
Outlook: Stable
CRISIL believes that NCS's business risk profile will continue to
benefit over the medium term from its established relationship
with its key supplier Raymond Ltd. The outlook may be revised to
'Positive' if the firm increases its scale of operations and
profitability while effectively managing its working capital
requirements, leading to substantial cash accruals and improvement
in financial risk profile. Conversely, the outlook may be revised
to 'Negative' if the firm's financial risk profile weakens because
of inefficient working capital management or deterioration in
capital structure.
NCS is a proprietorship firm trading in fabric manufactured by
Raymond Ltd. The firm is promoted and managed by Mr. Naresh and
its corporate office is in Sangrur (Punjab).
NCS is estimated to have made a profit after tax (PAT) of INR0.8
million on operating income of INR290.8 million for 2013-14
(refers to financial year, April 1 to March 31), against a PAT of
INR0.7 million on operating income of INR301.5 million for 2012-
13.
PPARADISE AUTO: CRISIL Cuts Rating on INR55MM Cash Credit to D
--------------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facilities
of Pparadise Auto Sales to 'CRISIL D' from 'CRISIL B-/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 55 CRISIL D (Downgraded
from 'CRISIL B-/Stable')
The rating downgrade reflects instances of delay by PAS in
servicing its term debt as well as the firm's overdrawn cash
credit facility for more than 30 days; the same are on account of
the firm's weak liquidity.
PAS also has a weak financial risk profile, marked by a modest net
worth, high gearing, and weak debt protection metrics. The firm's
scale of operations is also modest. However, PAS benefits from the
extensive experience of its partners in the automotive dealership
business.
PAS, a partnership firm promoted by Mr. Amrish Oberoi and his
family, commenced its operations in 2009. It is an authorised
dealer for the entire range of two-wheelers and spare parts of
Honda Motorcycle and Scooter India Pvt Ltd (HMSI) in Dehradun
(Uttarakhand).
PROVIEW RISHABH: ICRA Cuts Rating on INR31cr Fund Based Loan to D
-----------------------------------------------------------------
ICRA has revised the long-term rating on the INR31.00 crore
fund-based bank facilities of Proview Rishabh Infra Private
Limited to [ICRA]D from [ICRA]B.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-Term Fund 31.00 [ICRA]D; Downgraded
Based Facilities
The rating revision takes into account the delays in debt-
servicing by PRIPL on account of the company's tight liquidity
position due to the project's moderate booking levels and low
customer advances. While the project is planned to be delivered by
March-2015; the level of bookings has remained low (~55% of area
booked as on June 2014) with most of the bookings done on deferred
payment plan as per which ~75% of the total amount is to be paid
on possession. Given that the company is currently delaying its
interest payments, the debt servicing will become increasingly
more onerous as the entire debt is scheduled for repayment between
September-2014 to March-2015. This would necessitate immediate
funding support from promoters to meet the upcoming scheduled debt
repayments while improvement in the level of sales and customer
advances would remain critical for the project to be self
sufficient in meeting debt servicing obligations in a timely
manner. ICRA has also taken note of change in PRIPL's shareholding
pattern as some of the promoters who have experience in real
estate development, sold their stake to the existing promoters,
which might further increase the project execution and market
risks.
Going forward, the ability of the company to secure timely funding
support from promoters for debt repayment and project completion,
improvement in booking levels and customer advances, along with
execution of the project as per the planned schedule and within
the budgeted costs will be crucial for timely debt servicing by
the company and remain the key rating sensitivities.
PRIPL was originally promoted by members of the Jassar family in
June-2011 as Hemkunt Builders and Developers Private Limited,
which was later renamed to Proview Rishabh Infra Private Limited
(PRIPL) in February-2012 with Mr. Rajeev Kumar Arora, Mr. Sanjeev
Kumar Mittal and Mr. Kapil Arora also joining as promoters. Later
in 2013-14, the Jassar family bought back the entire stake in the
company.
PRIPL is developing its maiden group housing project - The Grande
at Noor Nagar, Hapur by-pass road (NH-58), Meerut. The project is
proposed to be developed in phases and in the first phase which
has presently been launched, the company is constructing 362
residential flats with saleable area of 0.36 million square feet
on 2.5 acres of land, of the total area of 8 acres.
QUAZAR INFRASTRUCTURE: CRISIL Puts B Rating on INR90MM Cash Loan
----------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable' rating to the bank
facilities of Quazar Infrastructure Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 90 CRISIL B/Stable
Proposed Long Term
Bank Loan Facility 35 CRISIL B/Stable
The rating reflects QIPL's large working capital requirements
leading to low return on capital employed (RoCE) and average
financial risk profile marked by high gearing and average debt
protection metrics. These rating weaknesses are partially offset
by the extensive experience of QIPL's promoter in the construction
industry and his funding support to the company.
Outlook: Stable
CRISIL believes that QIPL will continue to benefit over the medium
term from its promoter's industry experience. The outlook may be
revised to 'Positive' if QIPL scales up operations significantly
or improves its working capital management or witness's equity
infusion, resulting in improvement in its financial risk profile.
Conversely, the outlook may be revised to 'Negative' if the
company's order book declines or capital structure weakens or
working capital requirements increase, leading to deterioration in
its financial risk profile.
QIPL, incorporated in 2011 in New Delhi by Mr. Badal Sharma,
undertakes civil construction activities for government entities
as well as private players.
SHAH REALTY: ICRA Assigns B+ Rating to INR9.75cr Term Loan
----------------------------------------------------------
ICRA has assigned a long-term rating of [ICRA]B+ to the INR9.75
crore term loan facility of Shah Realty.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Fund Based 9.75 [ICRA]B+ Assigned
Limit - Term Loan
The rating assigned to Shah Realty (SR) is constrained by its
exposure to market risk and sales risk for the ongoing project,
particularly in light of the increasing competition within the
Surat real estate market; timely sales of all the flats will
remain critical from the credit perspective. Besides, the rating
also factors in the exposure of the project to cyclicality of the
real estate sector. Further, Shah Realty is a partnership concern
and any significant capital withdrawals could hurt the firm's
capital structure.
The rating, however, favourably factors in the promoter group's
experience in real estate development, particularly in the
residential segment and favourable location of the project in
terms of proximity to schools, railway station, market place,
hospitals etc.
Shah Realty was established as a partnership firm and is engaged
in real estate development. The firm is based out of Surat
(Gujarat) and is currently undertaking the development of the
project, "Sumeru Silverleaf" comprising two towers and housing a
total of 92 flats. The firm also has other group concerns engaged
in real estate development in Surat.
SHREE DURGA: CRISIL Assigns B+ Rating to INR100MM Cash Credit
-------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the bank
facilities of Shree Durga Fiber.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 100 CRISIL B+/Stable
The rating reflects SDF's modest scale of operations in the
fragmented cotton ginning and pressing industry, and its below-
average financial risk profile marked by modest net worth, high
gearing, and subdued debt protection metrics. These rating
weaknesses are partially offset by the extensive industry
experience of SDF's partners.
Outlook: Stable
CRISIL believes that SDF will continue to benefit over the medium
term from its partners' extensive industry experience. The outlook
may be revised to 'Positive' in case of substantial cash accruals
or capital infusion leading to correction in SDF's capital
structure and improvement in its liquidity. Conversely, the
outlook may be revised to 'Negative' in case of increased pressure
on the firm's liquidity most likely because of low cash accruals
or large working capital requirements or debt-funded capital
expenditure.
SDF is engaged in cotton ginning and pressing, and trades in
cotton bales and is headquartered in Shahada (Maharashtra). The
firm is owned and managed by Mr. Ajay Goyal and his family; it is
part of a group of companies promoted by the Sendhwa (Madhya
Pradesh)-based Goyal family and engaged in the cotton and sugar
industries.
SOCIAL CHANGE: CRISIL Cuts Rating on INR412.5MM Term Loan to B+
---------------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facilities
of Social Change and Development Trust to 'CRISIL B+/Stable' from
'CRISIL BB/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit/Overdraft 292.5 CRISIL B+/Stable (Downgraded
facility from 'CRISIL BB/Stable')
Long Term Loan 412.5 CRISIL B+/Stable (Downgraded
from 'CRISIL BB/Stable')
Proposed Long Term 95.0 CRISIL B+/Stable (Downgraded
Bank Loan Facility from 'CRISIL BB/Stable')
The rating downgrade reflects weakening in SCAD's liquidity
profile, marked by the decline in the operating margin, resulting
in a net deficit in 2013-14 (refers to financial year, April 1 to
March 31). CRISIL believes that SCAD's liquidity profile will
remain stretched over the medium term with its tightly matched
cash accruals vis-a-vis debt obligations.
The ratings also reflect SCAD's susceptibility to regulatory
changes and to intense competition in the education sector,
besides a below-average financial risk profile and liquidity.
These rating weaknesses are partially offset by the trust's
established market position in Tamil Nadu, supported by diverse
course offerings and extensive tenure.
Outlook: Stable
CRISIL believes that SCAD will continue to benefit over the medium
term from its established market position in Tamil Nadu. The
outlook may be revised to 'Positive' if the trust significantly
scales up operations and reports a sustainable improvement in its
surplus, resulting in substantial cash accruals. Conversely, the
outlook may be revised to 'Negative' if SCAD's financial risk
profile weakens with any large debt-funded capital expenditure, or
adverse impact of any regulatory or legal changes on educational
institutes run by the trust.
SCAD was set up in 1994 in Tirunelveli (Tamil Nadu) by Dr. Cletus
Babu. The trust operates various institutes offering graduate and
postgraduate courses.
SREE GOURIPUTRA: CRISIL Ups Rating on INR55MM Cash Loan to 'B'
--------------------------------------------------------------
CRISIL has upgraded its rating on the long-term bank facilities of
Sree Gouriputra Agro Products Pvt Ltd to 'CRISIL B/Stable' from
'CRISIL B-/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 55 CRISIL B/Stable (Upgraded from
'CRISIL B-/Stable')
Long Term Loan 35 CRISIL B/Stable (Upgraded from
'CRISIL B-/Stable')
Working Capital 30 CRISIL B/Stable (Upgraded from
Demand Loan 'CRISIL B-/Stable')
The rating upgrade reflects the improvement in SGAP's business
risk profile, marked by improved profitability and better working
capital management. The upgrade also factors in the funding
support that the company receives from its promoters and the lack
of any major debt-funded capital expenditure plans over the medium
term, which enhances its liquidity.
The rating, however, continues to reflect SGAP's below-average
financial risk profile, marked by a small net worth, high gearing,
and subdued debt protection metrics. The rating also factors in
the company's small scale of operations, and its susceptibility to
intense competition in the rice-processing industry, regulatory
changes, vagaries of the monsoon, and volatility in raw material
prices. These rating weaknesses are partially offset by the
extensive experience of SGAP's promoters in the rice industry.
Outlook: Stable
CRISIL believes that SGAP will continue to benefit over the medium
term from its promoters' extensive industry experience. The
outlook may be revised to 'Positive' if the company generates
substantial cash accruals or its promoters infuse considerable
equity, leading to an improved capital structure. Conversely, the
outlook may be revised to 'Negative' if SGAP's working capital
cycle lengthens or its profitability declines, further weakening
its financial risk profile.
SGAP was incorporated in 2002 and commenced commercial operations
in December 2009. It is based in Andhra Pradesh and is engaged in
the rice-milling business. The company mainly deals in non-basmati
rice. SGAP is managed by Mr. Chakrapani Kudapa and his family.
SRI RAMA: CRISIL Assigns 'B+' Rating to INR129MM Bank Loan
----------------------------------------------------------
CRISIL has revoked the suspension of its rating on the bank
facilities of Sri Rama Textile Spinning Mills Ltd, and has
assigned its 'CRISIL B+/Stable/CRISIL A4' rating to the
facilities. CRISIL had, on May 29, 2014, suspended the rating as
SRTSML had not provided necessary information required to maintain
a valid rating. SRTSML has now shared the requisite information,
enabling CRISIL to assign a rating to the bank facilities.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 40 CRISIL B+/Stable (Assigned;
Suspension revoked)
Letter of Credit 30 CRISIL A4 (Assigned;
Suspension revoked)
Proposed Long Term 129 CRISIL B+/Stable (Assigned;
Bank Loan Facility Suspension revoked)
The ratings reflect SRTSML's small scale of operations and below-
average financial risk profile marked by high gearing. These
rating weaknesses are partially offset by the extensive experience
of SRTSML's promoters in the spinning industry and its established
relationship with clients.
Outlook: Stable
CRISIL believes that SRTSML will continue to benefit over the
medium term from its promoters' extensive industry experience. The
outlook may be revised to 'Positive' if the company scales up
operations significantly while maintaining its profitability,
leading to improvement in its financial risk profile. Conversely,
the outlook may be revised to 'Negative' if SRTSML's cash accruals
decline, or if its working capital management deteriorates, or if
it undertakes a larger than expected debt-funded capital
expenditure programme, leading to deterioration in its financial
risk profile.
SRTSML, established in 2005, manufactures cotton yarn. Its day-to-
day operations are managed by its director Mr. P Muthuswamy.
The company recorded profit after tax (PAT) of INR6.6 million on
revenue of INR179.4 million for 2013-14 (refers to financial year,
April 1 to March 31), against PAT of INR5.1 million on revenue of
INR163 million for 2012-13.
TAPAL STEEL: CRISIL Reaffirms D Rating on INR100MM Cash Credit
--------------------------------------------------------------
CRISIL's ratings on the bank facilities of Tapal Steel Pvt Ltd
(TSPL; part of the Venkateshwara group) continues to reflect the
Venkateshwara group's continuous delay in term loan repayments.
This is driven by the group's weak liquidity, marked by inadequate
cash accruals to meet its debt obligations.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 100 CRISIL D (Reaffirmed)
Letter of Credit 50 CRISIL D (Reaffirmed)
Term Loan 43 CRISIL D (Reaffirmed)
The Venkateshwara group has a below-average financial risk
profile, marked by high gearing and weak debt protection metrics.
This rating weakness is partially offset by the extensive industry
experience of its management.
For arriving at the ratings, CRISIL has combined the business and
financial risk profiles of TSPL and Shree Venkateshwara Sponge and
Power Pvt Ltd. This is because the two companies, together
referred to as the Venkateshwara group, have operational and
financial linkages (fund transactions) with each other.
Promoted by Mr. Bhavani Prasad in 2005, the Venkateshwara group
manufactures sponge iron and steel ingots. TSPL manufactures steel
ingots and thermo-mechanically treated (TMT) bars whereas SVSPPL
manufactures sponge iron.
For 2012-13, the Venkateshwara group reported a net loss of
INR79.9 million on net sales of INR1240 million, as against a net
loss of INR87.5 million on net sales of INR1350 million for 2011-
12.
UNIK BAZAR: CRISIL Assigns 'B+' Rating to INR60MM Cash Credit
-------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the bank
facilities of Unik Bazar Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 46 CRISIL B+/Stable
Cash Credit 60 CRISIL B+/Stable
Proposed Long Term
Bank Loan Facility 14 CRISIL B+/Stable
The rating reflects UBL's modest scale of operations, large
working capital requirements, and weak financial risk profile
marked by high gearing and average debt protection metrics. These
rating weaknesses are partially offset by the company's successful
ramp-up of operations and its management's extensive experience in
the retail store segment.
Outlook: Stable
CRISIL believes that UBL will benefit over the medium term from
its management's extensive experience in the retail segment. The
outlook may be revised to 'Positive' if UBL scales up operations
and diversifies its revenue profile and geographic reach while
maintaining its capital structure. Conversely, the outlook may be
revised to 'Negative' in case of large working capital
requirements or debt-funded capital expenditure leading to
deterioration in its financial risk profile, or in case of steep
decline in margins.
UBL was incorporated in 2011 and is engaged in the retail-chain
business. The company operates eight retail stores in tier-2 and
tier-3 locations under its Unik Bazar brand. Its directors include
Mr. Ankit Gupta, Ms. Alka Goyal, and Mr. Dinesh Harbhajanka.
Unik reported a profit after tax of INR1.8 million on operating
income of INR146.0 million for 2012-13 (refers to financial year,
April 1 to March 31).
=========
J A P A N
=========
SHINSEI BANK: S&P Lowers Rating on Preferred Stock to 'BB-'
-----------------------------------------------------------
Standard & Poor's Ratings Services said that it has taken various
rating actions on the capital instruments issued by seven Japanese
financial institutions, following the publication of S&P's revised
criteria. S&P has lowered by one notch its issue ratings on the
Tier 1 capital instruments of five banks--all of which were issued
under the global Basel II regulatory capital framework--and
affirmed the issue ratings on the rest of the hybrid instruments
of the Japanese financial institutions under the scope of S&P's
revised criteria. S&P has so far not rated Basel III-type Tier 1
capital instruments issued by Japanese banks.
For S&P's issue ratings on Japanese banks' Tier 1 capital
instruments, it now deducts an additional notch. This is because
S&P believes that there is greater potential for coupon nonpayment
on a going-concern basis when the regulatory capital conservation
buffer under Basel III or other regulatory core equity capital
buffers can be applied. Also the recognition of regulatory
events, which will lead to nonpayment of Tier 1 coupon--even for
Basel II Tier 1 capital-- might occur earlier than before because
of heightened global pressure on all Tier 1 instruments to have
loss-absorption ability. These factors are a key determinant of
S&P's downgrades of hybrid capital instruments in Japan.
"In Japan, we continue to not assign an additional notch for a
contingency clause in Basel III Tier 2 instruments (which would
allow principal to be written down under certain conditions).
This is because we believe that it could be likely for
systemically important banks in Japan to receive extraordinary
government support--in a preemptive manner and at a relatively
early stage--if they were to be in financial distress; and
preemptive government support would not constitute a nonviability
event and, therefore, not lead to a principal write-down or equity
conversion of the hybrid," S&P said.
"We have a wider-than-standard notching for our issue rating on
Shinsei Bank's preferred stock. This reflects a somewhat higher
risk of deferral in times of stress, because its distributable
profits are somewhat low although they are recovering.
Separately, we equalized our rating on Citigroup Global Markets
Japan Inc.'s junior subordinated debt with our rating on the
deferrable subordinated debt issued by Citibank N.A., a core
operating company in Citigroup, because we consider Citigroup
Global Markets Japan a "core" subsidiary within the group," S&P
added.
RATINGS LOWERED
To From
Mitsubishi UFJ Financial Group Inc.
(issued via SPVs)
Preferred Stock BBB BBB+
Mizuho Financial Group Inc.
(issued via SPVs)
Preferred Stock BBB- BBB
Resona Bank Ltd.
(issued via SPV)
Preferred Stock BBB- BBB
Shinsei Bank Ltd.
(issued via SPV)
Preferred Stock BB- BB
Sumitomo Mitsui Financial Group Inc.
(issued via SPVs)
Preferred Stock BBB- BBB
RATINGS AFFIRMED
Citigroup Global Markets Japan Inc.
Junior Subordinated BBB-
Mizuho Financial Group Inc.
(issued via SPVs)
Junior Subordinated BBB+ (Guaranteed by Mizuho Bank Ltd.)
Subordinated BBB+ [Basel III Tier 2]
Resona Bank Ltd.
Junior Subordinated BBB
Shinkin Central Bank
Junior Subordinated BBB+
Shinsei Bank Ltd.
Junior Subordinated BB+
Sumitomo Mitsui Financial Group Inc.
Junior Subordinated BBB+ (Issued by Sumitomo Mitsui
Banking Corp.)
Subordinated BBB+ [Basel III Tier 2]
====================
N E W Z E A L A N D
====================
PYNE GOULD: Faces NZX Suspension For Failure to File Reports
------------------------------------------------------------
Tim Hunter at Stuff.co.nz reports that the NZX has threatened
Pyne Gould Corporation with suspension after it failed to file its
audited financial statements by deadline on September 30.
According to the report, the NZX said if the company's full annual
report was not filed by 5pm on October 8 its shares would be
suspended from trading.
In response PGC managing director George Kerr said it expected to
file its annual report "within a fortnight," notes Stuff.co.nz.
"The audit relating to one of the Torchlight Fund's larger
underlying property investments is not yet completed, leading to a
delay for PGC. Once completed, PGC can complete its own audit."
Torchlight is a limited partnership fund investing in alternative
assets that is 27 per cent owned by PGC and managed by a
subsidiary, according to Stuff.co.nz.
Kerr said PGC's net profit would be consistent with the
preliminary unaudited result announced in August, which was a net
profit of $20.1 million, note the report.
Pyne Gould Corporation Limited, together with its subsidiaries,
provides financial, trustee, and asset management services
primarily in New Zealand.
=============================================
N O R T H E R N M A R I A N A I S L A N D S
=============================================
COMMONWEALTH UTILITIES CORPORATION: Avoids Receivership
-------------------------------------------------------
Radio New Zealand reports that the Northern Marianas government
has signed a deal with the United States Environmental Protection
Agency to prevent the Commonwealth Utilities Corporation from
going into receivership.
The CNMI government will need to deposit at least US$22.8 million
to complete some stalled Commonwealth Utilities Corporation
projects, according to Radio New Zealand.
The report notes that the court-approved settlement also requires
the CUC to fund an annual budget of more than NZ$450,000 over a
five-year period for the technical manager for oil and associated
oil spill prevention, preparedness and response operations.
Under the deal, the US government will waive some US$40 million in
penalties that have accrued for failing to address issues such as
the repair and replacement of infrastructure, the management of
tanks and pipelines, and spill prevention and response, the report
relates.
====================
S O U T H K O R E A
====================
WOORI BANK: Fitch Retains 'BB-' Rating on Hybrid Securities
-----------------------------------------------------------
Fitch Ratings has upgraded South Korea based Woori Bank's (Woori;
A-/Stable) legacy subordinated unsecured notes to 'BBB+' from
'BBB-'.
KEY RATING DRIVERS
The two-notch upgrade reflects Fitch's reassessment of the Woori's
legacy lower Tier 2 capital securities. The agency has gained
sufficient confidence that sovereign support will flow through to
banks' Tier 2 regulatory capital securities in South Korea due to
the authorities' recent revision of its policy on subordinated
capital securities. Previously, the agency had believed that the
potential provision of extraordinary sovereign support would not
be reliable for such legacy Tier 2 notes of any Korean commercial
bank despite the terms and conditions of such notes.
In recent months, the Korean regulators have allowed its
commercial banks to change the key terms of Basel III write-off
triggers: i.e. the removal of a management improvement order
received from the regulator as one of two point of non-viability
(PONV) triggers. The other trigger - when the bank becomes
insolvent - remains. This effectively means that the PONV is
reached upon insolvency or default, which is similar to the point
at which senior debt is considered to be in default. Fitch
understands that the motive behind these changes is to deepen the
pool of investors for capital securities to support a rising trend
of issuance.
Based on such development, the agency has decided to consider
using the support-driven issuer default rating (IDR) or the
viability rating (VR) (whichever is higher) as the anchor rating
for systemically important banks' Tier 2 instruments (both Basel
III Tier 2 and legacy Tier 2 securities) because Fitch expects
pre-emptive support to be provided to avoid insolvency.
Woori's legacy Tier 2 notes are now rated one notch below its
Long-Term IDR, which in turn is based on an extremely high
probability of support, if required, from the Korean sovereign
(AA-/Stable) because of the bank's systemic importance. Woori's
support-driven IDR, which is higher than its VR of 'bbb', is used
as the anchor rating.
Specifically, the legacy Tier 2 notes have minimal non-performance
risk (no notch) relative to the senior unsecured debt issued by
Woori. The securities have gone-concern loss absorption features.
Fitch rates the notes one notch below the anchor rating to reflect
their below-average loss-severity relative to senior unsecured
instruments as a result of their subordinated status. The notes
have no coupon payment flexibility.
RATING SENSITIVITIES
Any change in Woori's Long-Term IDR, which is sensitive to changes
in the ability and propensity of the Korean authorities to provide
support, would affect the rating of these notes. Global
regulatory initiatives aimed at reducing implicit government
support available to banks may cause downward pressure on the
bank's IDR or/and the regulatory capital securities.
The upgraded notes of Woori are:
-- USD 389.17 mln 7.63% Lower Tier II Notes due on 14 April
2015 (ISIN: US981058AD23 and USY9695NDG52), and
-- USD 500 mln 5.875% Subordinated Notes Lower Tier II Notes
due on 13 April 2021 (ISIN: US98105FAB04 and US98105HAB69)
The other ratings of Woori are unaffected and are:
International ratings:
Long-Term IDR rated at 'A-'; Outlook Stable
Short-Term IDR rated at 'F1'
VR rated at 'bbb'
Support Rating rated at '1'
Support Rating Floor rated at 'A-'
Senior unsecured debt rated at 'A-'
Hybrid (legacy Tier 1) securities rated at 'BB-'
National ratings:
Senior unsecured THB-denominated debt rated at 'AAA(tha)'
===========
T A I W A N
===========
JIH SUN: Fitch Affirms 'B' Short-Term Issuer Default Rating
-----------------------------------------------------------
Fitch Ratings has taken rating actions on several private banks in
Taiwan:
-- Upgraded King's Town Bank's (KTB) Long-Term Issuer Default
Rating (IDR) to 'BBB' from 'BBB-',
-- Upgraded Jih Sun International Bank's (JSIB) Viability
Rating (VR) to 'bb' from 'bb-', and affirmed its other
ratings,
-- Affirmed EnTie Commercial Bank's (EnTie) ratings and
maintained them on Positive Outlook,
-- Affirmed the ratings on Far Eastern International Bank
(FEIB) and Taichung Commercial Bank (Taichung) and
maintained them on Negative Outlook,
-- Affirmed all ratings of Bank of Taipei (BOTP) and Shanghai
Commercial and Savings Bank (SCSB).
KEY RATING DRIVERS - IDRs, National Ratings and VRs
The ratings of most of the private banks covered are driven by
their intrinsic credit profiles. Their generally small deposit
market share renders them less systemically important. As such,
the probability of government support, if needed, is limited.
KTB's upgrade reflects Fitch's view that the bank will remain
disciplined in its risk-taking behaviour and capital deployment so
as to sustain a strong capital profile. JSIB's VR upgrade
reflects improving core profitability, an ability to sustain
adequate capitalisation commensurate with its risk appetite, and
metrics more in line with 'bb' rated peers.
The banks under review have a range of business profiles and
financial performance. The higher-rated SCSB and KTB are
distinguished by their managements' ability to implement coherent
strategies to occupy competitive niches and to effectively manage
risks.
The affirmation on the ratings of most the banks reviewed is based
on their stable profitability and risk appetite, which are
critical in sustaining adequate asset quality and capitalization.
This would also provide support for future growth and help the
banks withstand any sharp increase in credit costs in a cyclical
downturn.
Fitch expects most of these private banks to maintain adequate
capitalization against risk-taking. The Fitch core capital ratios
for these banks, which are adjusted for Taiwan's higher risk-
weights on mortgages, are between 10% and 15%.
JSIB's IDRs and National Ratings are aligned with the ratings of
its parent Jih Sun Financial Holding Co., Ltd (JSFH), reflecting
its status as core subsidiary of the group, as well as the
obligatory support from JSFH under the Taiwan's Financial Holding
Company Act.
RATING SENSITIVITIES - IDRs, National Ratings and VRs
Fitch believes that the banks' ratings will be most sensitive to
any sharp increase in risk appetite, including compromises in
underwriting or pricing discipline, and/or aggressive growth,
especially with entry into areas outside the banks' core
competencies.
The Negative Outlook on Taichung's ratings reflects the potential
for further asset quality deterioration from its aggressive
double-digit loan growth over 2011-2013. Loan growth in 1H14 has
slowed. Reduced risk appetite and improvement in asset quality
may result in its Outlook being revised to Stable.
Given generally modest core profitability, any excessive growth
can easily pressure capitalization, which Fitch considers as
having a high degree of influence on the banks' risk profiles.
Specifically, Fitch maintains EnTie's ratings on Positive Outlook,
and a potential upgrade will be highly dependent on a sustained
improvement in its capitalization. FEIB remains on Negative
Outlook and failure to sustain its capitalization at levels
comparable to 'bbb'-rated private-sector banks' is likely to
trigger a rating downgrade.
KTB's ratings may be downgraded if earnings and/or capitalization
are negatively impacted by interest rate risks from its overseas
bond investments and/or strong loan growth, especially in
corporate lending. Any material deterioration in capitalization
will also place pressure on the rating. Further positive rating
action is unlikely given KTB's small franchise and limited
business scope.
Any rating action on JFHC could trigger a similar rating action on
JSIB's IDRs and National Ratings. JSIB's ratings are likely to
remain support driven by its parent because the bank's standalone
credit profile is weaker than its parent's.
KEY RATING DRIVERS AND SENSITIVITIES - Support Rating and Support
Rating Floor (SCSB, KTB, FEIB and Taichung)
Support Ratings (SRs) and Support Rating Floors (SRFs) are driven
by the respective banks' systemic importance. The SR and SRF are
sensitive to any change in assumptions around the propensity or
ability of Taiwan government to provide timely support to these
banks. This would most likely be manifested in a change to
Taiwan's sovereign rating (A+/Stable).
KEY RATING DRIVERS - 1) EnTie's and FEIB's senior debt, 2)
EnTie's, FEIB's, JSIB's and Taichung's subordinated debt, and 3)
FEIB's and Taichung's Basel III-compliant subordinated debt
EnTie's senior unsecured debt is rated at the same level as its
National Long-Term Rating, and FEIB's senior unsecured debts are
rated at the same level as its Long-Term IDR and National Long-
Term Rating as they constitute direct, unconditional, unsecured
and unsubordinated obligations of the banks.
EnTie, FEIB, JSIB and Taichung's subordinated debts are rated one
notch below their National Long-Term Ratings to reflect their
subordinated status and the absence of any going-concern loss-
absorption mechanism.
FEIB and Taichung's Basel III-compliant subordinated debts are
rated two notches below the banks' National Long-Term Ratings
(which are anchored by their respective VRs) to reflect the bonds'
limited recovery prospects. The bondholders would risk
significant loss at the point of non-viability, when common equity
capital would be very low, which would result in a very thin loss
absorption buffer. At the point of non-viability, which is
reached upon government receivership, regulatory order for
resolution or liquidation, the bonds would be ranked equally with
common shares.
These notching practices are in accordance with Fitch's criteria
on rating senior unsecured bond instruments and bank subordinated
and hybrid securities.
RATING SENSITIVITIES - 1) EnTie's and FEIB's senior debt, 2)
EnTie's, FEIB's, JSIB's and Taichung's subordinated debt, and 3)
FEIB's and Taichung's Basel III-compliant subordinated debt
The full list of rating actions:
BOTP:
National Long-Term Rating affirmed at 'A-(twn)'; Outlook Stable
National Short-Term Rating affirmed at 'F1(twn)'
EnTie:
National Long-Term Rating affirmed at 'A-(twn)'; Outlook
maintained on Positive
National Short-Term Rating affirmed at 'F2(twn)'
Senior unsecured debt affirmed at 'A-(twn)'
Subordinated debt affirmed at 'BBB+(twn)'
FEIB:
Long-Term IDR affirmed at 'BBB-'; Outlook maintained on Negative
Short-Term IDR affirmed at 'F3'
National Long-Term Rating affirmed at 'A(twn)'; Outlook maintained
on Negative
National Short-Term Rating affirmed at 'F1(twn)'
Viability Rating affirmed at 'bbb-'
Support Rating affirmed at '4'
Support Rating Floor affirmed at 'B+'
Subordinated debt rating affirmed at 'A-(twn)'
Subordinated debt rating (Basel III-compliant) affirmed at
'BBB+(twn)'
Convertible bond affirmed at Long-Term Rating of 'BBB-' and
National Long-Term Rating of 'A(twn)'
JSIB:
Long-Term IDR affirmed at 'BB+'; Outlook Stable
Short-Term IDR affirmed at 'B'
National Long-Term Rating affirmed at 'A-(twn)'; Outlook Stable
National Short-Term Rating affirmed at 'F2(twn)'
Viability Rating upgraded to 'bb' from 'bb-'
Subordinated debt rating affirmed at 'BBB+(twn)'
KTB:
Long-Term IDR upgraded to 'BBB' from 'BBB-'; Outlook Stable
Short-Term IDR affirmed at 'F3'
National Long-Term Rating upgraded to 'A+(twn)' from 'A(twn)';
Outlook Stable
National Short-Term Rating affirmed at 'F1(twn)'
Viability Rating upgraded to 'bbb' from 'bbb-'
Support Rating affirmed at '5'
Support Rating Floor affirmed at 'No Floor'
SCSB:
-- Long-Term IDR affirmed at 'A-'; Stable Outlook
-- Short-Term IDR affirmed at 'F1'
-- National Long-Term Rating affirmed at 'AA(twn)'; Stable
Outlook
-- National Short-Term Rating affirmed at 'F1+(twn)'
-- Viability Rating affirmed at 'a-'
-- Support Rating affirmed at '4'
-- Support Rating Floor affirmed at 'B+'
Taichung:
Long-Term IDR affirmed at 'BB+'; Outlook maintained on Negative
Short-Term IDR affirmed at 'B'
National Long-Term Rating affirmed at 'A-(twn)'; Outlook
maintained on Negative
National Short-Term Rating affirmed at 'F2(twn)'
Viability Rating affirmed at 'bb+'
Support Rating affirmed at '5'
Support Rating Floor affirmed at 'No Floor'
Subordinated debt affirmed at 'BBB+(twn)'
Subordinated debt (Basel III-compliant) affirmed at 'BBB(twn)'
WINTEK CORP: To Sell Assets to Resolve Financial Woes
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Amy Su at Taipei Times reports that Wintek Corp on September 30
said it plans to introduce strategic partners, sell assets and
streamline its workforce to weather its financial woes.
Taipei Times relates that it was the second time the company has
talked about its financial problems to ease investors' concerns,
following the announcement on September 24 that it has obtained an
extension for the repayment of bank loans due September 30, while
seeking a new capital injection to fund its operations.
It said it had obtained an extension for the repayment of bank
loans due later this month and was seeking a new capital injection
to fund its operations, but reassured investors that the company
remains operational, according to the report.
"Wintek will endeavor to execute its restructuring plan to improve
its operational performance and reduce operational expenses,"
company spokesman Jay Huang said in a statement, Taipei Times
relays. However, jittery investors continued to sell Wintek
shares on September 30, the report says.
"The company hopes to introduce more strategic partners via
private placements to improve the company's financial structure,"
Mr. Huang said in a statement filed to the stock exchange, Taipei
Times relays.
In addition, Wintek will accelerate its pace of integrating
production capacity and shut down more production lines and
dispose of idled plants to boost cash holdings and lower
operational costs, Mr. Huang, as cited by Taipei Times, added.
Wintek has shut down two local factories, the report notes.
According to the report, Mr. Huang said the company is planning to
revitalize some under-utilized assets to raise operational
efficiency and accelerate the pace of debt repayment.
Company chairman Hyley Huang told local media that the company
aimed to save NT$1 billion (US$32.9 million) in costs a month. Mr.
Huang said he hopes to turn the touchpanel company around within
three years, Taipei Times relates.
Wintek has lost NT$15.03 billion over the past three years and
shed a further NT$3.42 billion in the first half of this year, the
report noted.
Based in Taichung, Taiwan, Wintek Corporation is principally
engaged in the design, research, development, manufacture and sale
of liquid crystal display (LCD) panels and liquid crystal modules
(LCMs) for indium tin oxide (ITO) conductive glass, touch panels,
light guides, twisted nematic (TN), super twisted nematic (STN)
and thin film transistors (TFTs). The company's LCDs and LCMs are
used in communication devices, digital still camera (DSCs),
portable navigation devices (PNDs), moving picture experts group
layer-3 audio (Mp3), moving picture experts group(MPEG) layer-4
audio(MP4), digital photo frame and ultra-mobile personal
computers(UMPCs). The Company also offers electronic components,
raw materials and semi-finished products. It distributes its
products in Taiwan, Europe, the Americas and other Asian markets.
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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
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or solicitation to buy or sell any security of any kind. It is
likely that some entity affiliated with a TCR-AP editor holds
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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-
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Valerie U. Pascual, Marites O. Claro, Joy A. Agravante, Rousel
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*** End of Transmission ***