/raid1/www/Hosts/bankrupt/TCRAP_Public/141006.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
Monday, October 6, 2014, Vol. 17, No. 197
Headlines
A U S T R A L I A
ATLAS IRON: S&P Lowers CCR and Sr. Secured Debt Rating to 'B'
DIRTY ROTTEN: Worrells Solvency Appointed as Administrators
JENNI ELLIS: Placed in Administration; First Meeting Set Oct. 10
NINE ENTERTAINMENT: Moody's Withdraws Ba2 Corporate Family Rating
O'BRIEN BOILER: In Administration; First Meeting Set For Oct. 8
TOTAL CONCEPT: Collapses Into Voluntary Administration
I N D I A
ADHISHAKTHI EXPORTS: CRISIL Rates INR50MM Overdraft Loan at B+
AIR INDIA: To Clear Unpaid Dues Of Pilots
AMBIKA DECOR: CRISIL Assigns 'B' Rating to INR85MM Term Loan
AMKETTE ANALYTICS: CRISIL Rates INR70MM Cash Credit at 'B+'
ANURITA ENTERPRISES: CRISIL Reaffirms INR140MM Cash Credit at B
ASHIAN OILS: CRISIL Cuts Rating on INR95MM Cash Credit to 'B'
ASN AGRI: ICRA Reaffirms B+ Rating on INR15cr Cash Credit
B. NEHAL: ICRA Reaffirms 'B+' Rating on INR0.38cr Term Loan
BHARAT EXPORT: ICRA Assigns B+ Rating to INR6.67cr Packing Credit
BHOORATHNOM CONSTRUCTION: CRISIL Ups Rating on INR140M Loan to C
DEEPAK AGRO: CRISIL Assigns B+ Rating to INR112.5MM Cash Credit
EUREKA CLOTHING: CRISIL Assigns B Rating to INR30M Packing Credit
EXIMPIPES PRIVATE: CRISIL Assigns B+ Rating to INR85MM Cash Loan
G.S. MAJESTIC: CRISIL Reaffirms B Rating on INR300MM Cash Credit
GLADS HOME: CRISIL Assigns B+ Rating to INR60MM Cash Credit
GOKILAA GAARMENTS: ICRA Reaffirms B+ Rating on INR1.33cr Loan
JAGANNATH POLYMERS: CRISIL Puts B Rating on INR56MMM Cash Credit
JAGANNATH POLYPACKS: CRISIL Rates INR45MM Cash Credit at 'B-'
JAI MAA: ICRA Assigns 'D' Rating to INR31cr Bank Facilities
K.S. GOWDA: CRISIL Assigns B- Rating to INR55.5MM Bank Loan
KAMAKSHI COTTON: CRISIL Puts B+ Rating on INR82.5MM Cash Loan
KWALITY TOWNSHIP: ICRA Assigns B+ Rating to INR5cr Term Loan
MR. BROWN: CRISIL Assigns B+ Rating to INR80MM Term Loan
MAHALAXMI PADDY: CRISIL Assigns B+ Rating to INR63MM Bank Loan
MARUTI COTTON: CRISIL Assigns B Rating to INR50MM Cash Credit
METKORE ALLOYS: Maharashtra Court Orders Sale of Seized Assets
MEENA DEVELOPERS: ICRA Suspends B Rating on INR12.45cr FB Loan
OM SHREE: CRISIL Assigns B+ Rating to INR40MM Term Loan
RATNAGIRI GAS: Lenders Hiving Off Firm's Assets; Convert Debt
S. S. CONSTRUCTION: CRISIL Puts B+ Rating on INR60MM Cash Credit
SARBAMANGALA AGRO: CRISIL Assigns D Rating to INR38MM Cash Credit
SHREE DEVELOPERS: CRISIL Assigns B+ Rating to INR50MM Bank Loan
SHREE KANKESHWARI: CRISIL Reaffirms B+ INR200M Cash Loan Rating
SHRI KRISHAN: CRISIL Assigns B Rating to INR50MM Cash Credit
SIAN HOTEL: CRISIL Assigns B Rating to INR75.2MM Bank Loan
SKM INDUSTRIES: CRISIL Reaffirms B+ Rating on INR12.5MM Cash Loan
TEJA TIMES: ICRA Reaffirms B+ Rating on INR8cr Cash Credit
UNIBIC BISCUITS: ICRA Reaffirms B+ Rating on INR6cr LT FB Limits
UNITED COMPOSHEETS: ICRA Reaffirms B Rating on INR6cr Bank Loan
VEGA INFRASTRUCTURES: CRISIL Puts D Rating on INR130MM Term Loan
I N D O N E S I A
SMARTFREN TELECOM: Fitch Ups IDR603BB Bond Rating to 'CCC(idn)'
N A U R U
NAURU: Wins Court Case vs Hedge Fund; Gets Access to Frozen Money
S O U T H K O R E A
DONGBU GROUP: Creditors OK Unit's Debt Restructuring Program
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A U S T R A L I A
=================
ATLAS IRON: S&P Lowers CCR and Sr. Secured Debt Rating to 'B'
-------------------------------------------------------------
Standard & Poor's Ratings Services said that it had lowered its
corporate credit rating on Australian iron ore miner Atlas Iron
Ltd. to 'B', from 'B+'. The outlook is stable. S&P also lowered
its ratings on Atlas Iron's senior secured debt to 'B', from 'B+'.
The recovery rating on the senior secured debt is affirmed at '3'.
The downgrades follow the revision of S&P's benchmark iron ore
price assumption to US$85 per ton. S&P believes continued sizable
supply from major iron ore producers in calendar 2015, together
with S&P's expectation of soft demand growth from China, would
continue to depress iron ore prices. S&P believes the downward
price pressure would not ease unless the supply and demand
equilibrium for iron ore improves. This could occur when low-cost
seaborne supply displaces high-cost production in the medium term
or demand grows strongly in China, reducing the supply overhang.
As such, S&P has revised its base-case assumption for benchmark
iron ore prices (including cost and freight [CIF] to China, 62%
iron [Fe] content) to US$85 per ton, from US$95 per ton for the
rest of 2014, and calendar years 2015 and 2016.
"We expect the company's credit metrics to deteriorate to the
"highly leveraged" financial risk profile category in fiscal year
2015 under this price deck. Assuming an exchange rate of US$0.87
per one Australian dollar for the rest of fiscal 2015, we estimate
that Atlas Iron's EBITDA margin would fall to about A$5 per ton,"
said Standard & Poor's credit analyst May Zhong. As such, the
company's adjusted debt to EBITDA will rise to more than 5x in
fiscal 2015, from 1.5x in fiscal 2014, due to the prospective fall
in its earnings and cash flows. S&P also forecasts its EBITDA
interest cover to decrease substantially, to between 1.5x and
2.5x, from 7.7x in fiscal 2014. Atlas Iron's credit metrics are
also very sensitive to exchange rate movements because a
depreciation in the Australian dollar would shield the company to
some extent from the impact of lower iron ore prices.
"We assess Atlas Iron's business risk profile as "weak",
reflecting its relatively small scale globally, relatively high
production cost, and exposure to volatile iron ore prices. In our
opinion, Atlas Iron's C1 costs are relatively high at A$48-A$50
per wet metric ton (wmt), compared to the top-three iron ore
miners in Australia, whose C1 costs are lower than US$35 per ton.
This is partly due to the company's relatively small scale and
high transportation costs because it uses trucks to deliver all of
its iron ore to port, which offset its relatively low mining
costs," S&P said.
"In our view, the company's current all-in cash costs are not
sustainable if iron ore prices stay below US$85 per ton for a
prolonged period. We estimate that its all-in cash costs
(including C1 cash cost, royalties, freight, administrative
expenses, sustaining capital expenditure, and converting them to a
CIF China 62% Fe basis) are likely to be about US$80 per ton
(assuming US$0.87 per Australian dollar). A successful
improvement in Atlas Iron's cost profile is therefore key to its
long-term viability. We believe the company is working on
initiatives to reduce its costs," S&P added.
S&P considers Atlas Iron liquidity to be "strong", based on these:
-- S&P expects that sources of liquidity in the next 12 months
will exceed uses by at least 1.5x. S&P expects that
liquidity sources will continue to exceed uses, even if
EBITDA were to decline by 30%.
-- The company has a manageable debt-maturity profile in the
next two years, with no major debt maturing until 2017.
Principal liquidity sources
-- A$264 million of cash and cash equivalents as of June 30,
2014;
-- S&P'sexpectation of about A$50 million to A$60 million in
EBITDA; and
-- A$50 million revolving credit facility.
Principal liquidity uses:
-- Capital expenditure of about A$125 million in fiscal 2015;
and
-- No dividend payment.
Ms. Zhong added: "The stable outlook reflects our expectation that
Atlas Iron would maintain its strong liquidity level, which is
underpinned by its large cash holding, undrawn credit facility,
minimal debt refinancing requirement, and reduction in capital
expenditure."
The ratings could be lowered if liquidity were to weaken such that
liquidity sources exceeded liquidity uses by less than 1.5x. This
scenario could occur if iron prices fall below S&P's current
pricing assumptions for a prolonged period, or there is an
unforeseen operational issue at Atlas Iron's mines.
An upgrade is less likely unless there is a sustained improvement
in iron ore prices or Atlas Iron's cost position.
DIRTY ROTTEN: Worrells Solvency Appointed as Administrators
-----------------------------------------------------------
Christopher Darin -- chris.darin@worrells.net.au -- & Aaron Lucan
-- aaron.lucan@worrells.net.au -- of Worrells Solvency & Forensic
Accountants were appointed as administrators of Dirty Rotten
Scoundrels (Aust) Pty Limited on Sept. 29, 2014.
A first meeting of the creditors of the Company will be held at
Suite 3, Level 3, 350 George Street, in Sydney, on Oct. 9, 2014,
at 10:30 a.m.
JENNI ELLIS: Placed in Administration; First Meeting Set Oct. 10
----------------------------------------------------------------
Mitchell Warren Ball -- mitchellb@bpsrecovery.com.au -- of BPS
Recovery was appointed as administrator of Jenni Ellis Home Loans
Pty Ltd on Sept. 29, 2014.
A first meeting of the creditors of the Company will be held at
BPS Recovery, Level 18, 201 Kent Street, in Sydney, on Oct. 10,
2014, at 11:00 a.m.
NINE ENTERTAINMENT: Moody's Withdraws Ba2 Corporate Family Rating
-----------------------------------------------------------------
Moody's Investors Service has withdrawn its Ba2 Corporate Family
Rating on Nine Entertainment Co Holdings Limited and Ba2 Senior
Secured Rating on Nine Entertainment Group Pty Ltd, for business
reasons.
Ratings Rationale
Moody's has withdrawn the ratings for its own business reasons.
Nine Entertainment Co Holdings Limited (Nine) is one of
Australia's leading diversified media and entertainment groups.
Its core business is free-to-air television broadcasting which
accounts for over 70% of EBITDA. Nine's other businesses comprise
ticketing and events businesses Ticketek/Allphones Arena and
digital news and entertainment portal Mi9.
O'BRIEN BOILER: In Administration; First Meeting Set For Oct. 8
---------------------------------------------------------------
Gideon Rathner -- grathner@lowelippmann.com.au -- of Lowe Lippmann
was appointed as administrator of O'Brien Boiler Services Western
Australia Pty Ltd on Sept. 29, 2014.
A first meeting of the creditors of the Company will be held at
Lowe Lippmann, Level 7, 616 St Kilda Road, in Melbourne, on
Oct. 8, 2014, at 3:30 p.m.
TOTAL CONCEPT: Collapses Into Voluntary Administration
------------------------------------------------------
Eloise Keating at SmartCompany reports that a Queensland-based
window and door manufacturer that was previously featured on the
BRW Fast Starters list has collapsed into voluntary
administration.
Jason Bettles and Raj Khatri of Worrells Solvency and Forensic
Accountants were appointed administrators of Total Concept Glass
on August 21, SmartCompany relates.
The first meeting of creditors was held in Robina, Queensland on
September 1, followed by a second creditors' meeting on
September 24, according to SmartCompany.
SmartCompany says a deed of company arrangement was accepted by
creditors on September 25.
SmartCompany notes that the company featured on the BRW Fast
Starters list in 2010 with annual turnover in 2008-09 of
AUD9.65 million.
But documents seen by SmartCompany indicate the company was sold
to a related entity, Total Lifestyle Windows, in June 2014, with a
sale price of just AUD100,000. As Total Lifestyle Windows agreed
to take on outstanding entitlements to former employees of Total
Concept Glass, which totalled approximately AUD107,000, no cash
actually changed hands.
Total Concept Glass is not taking on new customers but
SmartCompany understands Total Lifestyle Windows, which is not in
administration, will complete six outstanding rectification jobs,
worth close to AUD200,000 as part of the deed of company
arrangement, SmartCompany relates.
SmartCompany notes that the collapse of the company has been
attributed to the non-collection of debtors and adverse legal
actions.
According to the report, the administrators received more than 50
claims of debts from creditors, totalling approximately AUD7.1
million. Among the major creditors are other building companies
and the Australian Tax Office, which is owed just under
AUD700,000, while employee claims totalled just over AUD46,000.
Total Concept Glass, which was previously known as Total
Refurbishment and Total Concept Group, was incorporated in 2005.
The company specialised in renovations, glass fabrication and
window and door installations.
=========
I N D I A
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ADHISHAKTHI EXPORTS: CRISIL Rates INR50MM Overdraft Loan at B+
--------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-term
bank facilities Adhishakthi Exports (AE).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Long Term Loan 5.9 CRISIL B+/Stable
Secured Overdraft 50 CRISIL B+/Stable
Facility
The rating reflects AE's modest scale of operations in the
intensely competitive cashew industry and its below-average
financial risk profile, marked by a small net worth and a high
total outside liabilities to tangible net worth ratio. These
rating weaknesses are partially offset by the extensive industry
experience of AE's proprietor.
Outlook: Stable
CRISIL believes that AE will continue to benefit over the medium
term from its proprietor's extensive experience in the cashew
industry. The outlook may be revised to 'Positive' if the firm
scales up its revenue and profitability, resulting in an
improvement in its financial risk profile. Conversely, the outlook
may be revised to 'Negative' if AE records lower-than-expected
revenue and profitability, or undertakes a substantial debt-funded
capital expenditure programme, or in case of significant
withdrawals by its proprietor, leading to weakening of its
financial risk profile.
Set up in 2007 as proprietorship firm, AE is engaged in processing
of and trading in raw cashew nuts. The firm is based in Udupi
(Karnataka) and is promoted by Mrs. Deepa Dinesh.
For 2013-14 (refers to financial year, April 1 to March 31), AE
reported a net profit of INR2.6 million on net sales of INR96.9
million, against a net profit of INR2.6 million on net sales of
INR74.6 million for 2012-13.
AIR INDIA: To Clear Unpaid Dues Of Pilots
-----------------------------------------
The Times of India reports that after many years, Air India had
some good news for its disgruntled pilots. The report relates
that the pilots have had at least a month of flying allowance as
dues for almost two years as the airline had delayed salaries and
could not pay them in time.
Now, AI has promised to pay the unpaid allowance on October 15,
says TOI. "After that our payment will be current and there will
be no dues. However, this does not account in the 25% pay cut that
AI has implemented on its own," the report quotes a member of
Indian Commercial Pilots' Association (ICPA) as saying.
According to the report, AI's outgoing chairman Rohit Nandan is
learnt to have promised the employees that he would ensure the
airline is current with their salary payments before he leaves in
a month or so. Mr. Nandan's three-year-term as CMD is over and
the government is looking for a suitable officer to succeed him as
the Modi government is not in favour of giving extensions to
senior officials, the report notes.
Air India Ltd -- http://www.airindia.com/-- is the flag carrier
airline of India owned by Air India Limited (AIL), a Government of
India enterprise. The airline operates a fleet of Airbus and
Boeing aircraft serving various domestic and international
airports. It is headquartered at the Indian Airlines House in
New Delhi.
As reported in the Troubled Company Reporter-Asia Pacific on
March 28, 2014, The Times of India said Air India Lt got a
breather in the form of INR1,000-crore equity infusion from the
government on March 26. According to the report, the airline's
unending financial stress had got worse as the Centre had so far
given INR6,000 crore instead of the promised INR8,500 crore for
the fiscal. As a result, AI had to bridge this gap by borrowing
money from banks at 11%-12%, which increased its debt servicing
burden, the report said. Before the infusion, the government had
injected INR12,200 crore into AI and there was a shortfall in
equity to the tune of INR3,574 crore -- despite the airline
meeting most of the milestone-linked equity targets -- leading to
a liquidity crunch, the report related. TOI said the airline's
aircraft and working capital debt was INR26,033 crore and
INR21,125 crore respectively on December 31, 2013. The airline is
expected to lose INR3,990 crore this fiscal.
Air India has posted continuous losses since 2007, according to
The Economic Times.
AMBIKA DECOR: CRISIL Assigns 'B' Rating to INR85MM Term Loan
------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable' rating to the long-term
bank facilities of Ambika Decor Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 25 CRISIL B/Stable
Term Loan 85 CRISIL B/Stable
The rating reflects ADPL's expected small scale of operations and
its exposure to start-up phase of operations. The rating also
factors in the company's below-average financial risk profile,
driven by debt-funded capital expenditure and moderate working
capital requirements. These rating weaknesses are partially offset
by the benefits that ADPL derives from the extensive experience of
its promoters in the laminates trading business and established
network.
For arriving at the rating, CRISIL has treated the unsecured loan
of INR14 million extended to ADPL by its promoters as neither debt
nor equity as the loan is subordinated to bank borrowings.
Outlook: Stable
CRISIL believes that ADPL will continue to benefit over the medium
term from its promoters' extensive experience in the laminate
business. The outlook may be revised to 'Positive' if the company
successfully ramps up its operations and reports higher-than-
expected revenue and profitability leading to better-than-expected
cash accruals. Conversely, the outlook may be revised to
'Negative' if its financial risk profile, particularly liquidity,
weakens because of large working capital requirements or lower
accruals.
ADPL was incorporated as a private limited company in March 2011
and started operations in August 2014. The company is engaged in
manufacturing of laminates. ADPL is promoted by Mr. Yogesh Sharma,
Mr. Rajesh Sharma, Mr. Ravi Patel, and Mr. Manoj Patel. The
company has a manufacturing facility with a capacity of 0.1
million board laminate sheets per month at Pithampur Industrial
Area, Dhar (Madhya Pradesh).
AMKETTE ANALYTICS: CRISIL Rates INR70MM Cash Credit at 'B+'
-----------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to
the bank facilities of Amkette Analytics Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Letter of Credit 50 CRISIL A4
Bank Guarantee 10 CRISIL A4
Cash Credit 70 CRISIL B+/Stable
The ratings reflect AAL's working capital intensive operations and
below-average financial risk profile marked by high total outside
liabilities to tangible net worth ratio and below-average interest
coverage ratio. These rating weaknesses are partially offset by
its promoters' extensive industry experience and healthy supplier
relationships.
Outlook: Stable
CRISIL believes AAL will continue to benefit from its promoters'
extensive experience in the trading of scientific equipment and
balances. The outlook may be revised to 'Positive' if the
company's financial risk profile improves on a sustainable basis,
backed by healthy growth in scale of operations or any significant
capital infusion. Conversely, the outlook may be revised to
'Negative' in case AAL's financial risk profile, particularly
liquidity, weakens because of a decline in its cash accruals or
deterioration in its working capital management.
AAL was established as a private limited entity in October 2000 in
Mumbai by Mr. Manish Mehta and his brother Mr. Sanjay Mehta. It
was reconstituted as a limited company in 2003. AAL trades in
scientific instruments and balances like viscometers and color-
matching instruments.
AAL recorded, on a provisional basis, a net loss of INR10.4
million on net sales of INR351.9 million for 2013-14 (refers to
financial year, April 01 to March 31) as against a profit after
tax of INR29.5 million on net sales of INR453.2 million for 2012-
13.
ANURITA ENTERPRISES: CRISIL Reaffirms INR140MM Cash Credit at B
---------------------------------------------------------------
CRISIL rating on the bank facilities of Anurita Enterprises
Private Ltd. continues to reflect AEPL's modest financial risk
profile, marked by a high gearing and modest debt protection
metrics, its moderate scale of operations in the highly fragmented
aluminium extrusion industry, and its susceptibility to foreign
exchange volatility. These rating weaknesses are partially offset
by the funding support received by AEPL from its promoters.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 140 CRISIL B/Stable (Reaffirmed)
Proposed Long Term 0.5 CRISIL B/Stable (Reaffirmed)
Bank Loan Facility
Term Loan 26.7 CRISIL B/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that AEPL's credit risk profile will continue to
remain constrained over the medium term due to its leveraged
capital structure and generation of modest cash accruals. The
outlook may be revised to 'Positive' if the revenues or
profitability is higher than expected, resulting in increased cash
accruals leading to an improvement in its financial risk profile.
Conversely, the outlook may be revised to 'Negative' if the
company's working capital cycle lengthens, or if it undertakes a
large debt-funded capital expenditure programme, further weakening
its financial risk profile, particularly its liquidity.
Update
AEPL recorded revenue of INR383 million in 2013-14 (refers to
financial year, April 1 to March 31), a decrease of 3 per cent
year-on-year. The decline is reflective of the intense competition
in the segment, and decreased demand due to lower industrial
activity and slowdown in real estate construction. The
profitability was also lower at 6.6 percent in 2013-14 as against
7.6 percent in 2012-13 on account of lower capacity utilisation
and high overhead costs. However, the business performance of AEPL
is likely to improve gradually backed by its foray into
manufacturing of value added products. AEPL has upgraded its plant
and machinery and has begun operations at its Silvassa plant for
manufacturing customised products, and has received orders from
multiple government entities for the value added products. CRISIL
believes that the revenues and profitability of AEPL are likely to
improve over the medium term backed by higher capacity
utilisation.
The operations of AEPL are working capital intensive as reflected
in gross current assets (GCA) of 227 days which are driven by high
inventory requirements; inventory for 2013-14 stood at 175 days,
partly impacted by the large stock of dies and finished products.
The company's financial risk profile is also affected by the
working capital intensity of operations - gearing continues to
remain high at 3.2 times as on March 31, 2014, while net worth was
moderate at INR 77.7 million. CRISIL expects that the sizeable
working capital requirements, coupled with modest accruals are
expected to lead to continued dependence on external funding over
the medium term.
AEPL's liquidity is also constrained by its modest accruals of INR
6.9 million viz-a-viz repayment commitments of INR 9.6 million in
2014-15. The liquidity is, however, supported by infusion of funds
from the promoters; promoters infused equity of INR 10.4 million
and unsecured loans of INR 13.9 million in 2013-14 to support the
operations of AEPL. CRISIL believes that the availability of need
based funding from the promoters will remain a critical factor,
and supports AEPL's liquidity profile.
Incorporated in 2000, AEPL manufactures aluminium extrusions for
use in the construction, automobile, consumer durables, and
electronic components industries. The company is promoted by Mr.
Ajay Kumar Baid and Mrs. Aruna Baid.
For 2013-14, AEPL reported a net profit of INR0.7 million on net
sales of INR383.01 million, against a net loss of INR0.44 million
on net sales of INR390.76 million for 2012-13.
ASHIAN OILS: CRISIL Cuts Rating on INR95MM Cash Credit to 'B'
-------------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facilities
of Ashian Oils Pvt Ltd to 'CRISIL B/Stable' from 'CRISIL
B+/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 95 CRISIL B/Stable (Downgraded
from 'CRISIL B+/Stable')
Proposed Long Term 43 CRISIL B/Stable (Downgraded
Bank Loan Facility from 'CRISIL B+/Stable')
The rating downgrade reflects deterioration in AOPL's business
risk profile in a challenging economic environment arising from
unfavourable government policies and competition from substitute
products; AOPL's turnover and profitability declined steeply in
2013-14 (refers to financial year April 1 to March 31). The
revenue reduced to an estimated INR468 million in 2013-14 from
INR876 million in 2012-13; the company booked cash losses for
2013-14, which have continued into the first half of 2014-15. AOPL
is likely to report net loss of INR18.5 million for 2013-14,
against a profit after tax of INR1.3 million for 2012-13. The
extent of revival in demand and improvement in AOPL's business
risk profile and liquidity will determine the rating direction
over the medium term.
The rating reflects AOPL's limited track record, exposure to
intense competition in the edible oils industry, and below-average
financial risk profile marked by small net worth and weak debt
protection metrics. These rating weaknesses are partially offset
by its promoters' extensive industry experience.
Outlook: Stable
CRISIL believes that AOPL's business risk profile will remain
constrained over the medium term by subdued demand and weak
realisations. The outlook may be revised to 'Positive' if revival
in demand leads to significant improvement in AOPL's topline and
profitability, and if its working capital cycle improves.
Conversely, the outlook may be revised to 'Negative' if continued
subdued demand leads to decline in AOPL's turnover and
profitability or if unprecedented delay in realisation of
receivables leads to deterioration of its liquidity.
AOPL, set up in 2007, Kolkata (West Bengal) undertakes refining of
rice bran oil and crushing of mustard seeds. The company is also
engaged in opportunistic trading of edible oils. Its operations
are managed by Mr. Ashish Chowdhary and Mr. Anuj Chowdhary.
ASN AGRI: ICRA Reaffirms B+ Rating on INR15cr Cash Credit
---------------------------------------------------------
ICRA has reaffirmed the long-term rating for the INR15.07 crore
fund-based bank-facilities of ASN Agri Genetics Private Limited at
[ICRA]B+. ICRA has also reaffirmed the short-term rating for the
company's INR8 crore fund-based and non-fund-based bank-facilities
at [ICRA]A4.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-based facility 15.00 [ICRA]B+ reaffirmed
Cash Credit
Fund-based facility 0.07 [ICRA]B+ reaffirmed
Term Loans
Non-fund based facility 3.00 [ICRA]A4 reaffirmed
Bank guarantee
Fund-based facility- 5.00 [ICRA]A4 reaffirmed
ledge loan
The ratings reaffirmation factors in the steady financial profile
of the company characterized by stable revenues, operating profits
and cash accruals as well as highly working capital intensive
nature of its operations which together with a small net-worth
base results in a leveraged capital structure. Working capital
intensity of company's operations (as reflected in NWC/ OI)
increased further in FY14 which together with marginal operating
profitability margins created a further pressure on company's cash
flow and debt coverage indicators. The low profitability is driven
by high competition in the business and commoditized nature of the
product due to dependence on breeder seeds from agricultural
universities given the limited in-house research capabilities.
Further the margins continue to be vulnerable to movement in
commodity prices given the company's concentrated product
portfolio. Although proportion of revenues derived from sale of
soybean seeds declined to 75% in FY14 from 87% in FY13, it
continues to be high keeping its modest profitability margins
vulnerable to volatile and adverse fluctuations in commodity
prices. Further, the ratings also continue to factor in ASN Agri's
modest scale of operations and its highly leveraged capital
structure which necessitates infusion of fresh capital to support
growth going forward.
The ratings, however, continue to derive strength from the
relevant experience of ASN Agri's promoters in the seeds business
and their established relationships with a wide farmer-base which
facilitates the seed re-production process. Further, the company's
established brand and a widespread sales and distribution network
enable it to compete in an intensely competitive and fragmented
market. The risk of increased concentration of revenues on top few
customers is also mitigated to an extent by the presence of a
fairly diversified and regularly churning client-base which
reduces the off-take risk for company's products. While
reaffirming the ratings, ICRA has also factored in the favorable
growth potential for the hybrid seeds market in India which is
expected to drive company's growth going forward.
In ICRA's view, ASN Agri's ability to diversify its product
portfolio further so as to reduce the concentration risk as well
as increase its scale of operations; enhance resistance to adverse
movements in commodity prices by prudent working capital
management; strengthen its capital base; and get timely
enhancement of its working capital facilities to support growth,
will be the key rating sensitivities.
Incorporated in 1995 by Mr. Radheyshyam Patidar, ASN Agri Genetic
Private Limited (ASN Agri) is an Indore (Madhya Pradesh) based
company engaged in processing and trading of seeds. Company's
product portfolio mainly comprises of soybean and wheat seeds
which together accounted for ~100% of its revenues in FY14.
Besides these, the company also trades in cotton seeds on a
limited scale.
ASN Agri procures hybrid breeder seeds from agricultural research
centers and institutions and sells them to various farmers for
sowing and reproduction. It then purchases the seeds from these
farmers. The process is repeated through four stages (Breeder
Seeds - Foundation Seeds Stage I - Foundation Seeds Stage II -
Certified Seeds Stage I - Certified Seeds Stage II). The seeds
finally procured for sale (mainly Certified Seed Stage I and II)
are processed by fumigating and cleaning and graded based on
quality.
B. NEHAL: ICRA Reaffirms 'B+' Rating on INR0.38cr Term Loan
-----------------------------------------------------------
ICRA has reaffirmed the [ICRA]B+ and [ICRA]A4 ratings assigned to
fund based limits of INR66.00 crore (enhanced from INR55.00 crore)
of M/s B. Nehal. ICRA has also reaffirmed the [ICRA]B+ rating
assigned to the term loan facility of INR0.38 crore (reduced from
INR0.65 crore).
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based Limits 66.00 [ICRA]B+/[ICRA]A4
reaffirmed/assigned
Term Loan 0.38 [ICRA]B+ reaffirmed
The rating reaffirmation continues to factor in the stretched
liquidity position of firm arising from stretched receivable and
high inventory levels which has also led to high working capital
utilisation. The ratings also continue to remain constrained by
weak financial profile characterised by modest profitability and
adverse capital structure of firm. ICRA also notes the high
competitive intensity prevalent in the cut and polished
diamond industry has also been putting pressure on the margins.
Further, BN being a partnership firm and any significant
withdrawals from the capital account would affect its net worth
adversely.
The ratings however favourably incorporate the long experience of
the partners in the cut and polished diamond business.
M/s. B. Nehal (BN) was established in 1988 and is engaged in the
import of rough diamonds and processing and export of Cut and
Polished Diamonds. The firm was reconstituted in 1993 and later in
1999 by its current partners. The firm has its head office at
Mumbai and a production facility at Surat. BN primarily procures
rough diamonds from Belgium and the local market and deals in
smaller, medium and large size diamonds which lie in the range of
20 cents to 5 carats.
Recent Results
For the year ended 31st March, 2014, BN reported an operating
income of INR154.91 crore and profit after tax of INR1.57 crore.
BHARAT EXPORT: ICRA Assigns B+ Rating to INR6.67cr Packing Credit
-----------------------------------------------------------------
ICRA has assigned long-term rating of [ICRA]B+ to INR13 crore fund
based facilities of Bharat Export Overseas.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Packing Credit 6.67 [ICRA]B+ Assigned
FBP 4.17 [ICRA]B+ Assigned
Stand by Limit 2.16 [ICRA]B+ Assigned
The assigned rating factors in small scale of operations of the
firm resulting in modest economies of scale and limited pricing
flexibility of the firm given low entry barriers in a highly
fragmented and competitive industry. Further, profitability of the
firm is exposed to adverse movements in foreign exchange rates
with the business being majorly export oriented. However, this
risk is mitigated to an extent as the firm hedges its forex
exposure by entering into forward contracts. The rating also
factors in high client and geographical concentration, as majority
of revenues are generated from three customers based out of U.K
and Germany. Rating concerns also emanate from high gearing of the
firm due to funding of working capital borrowings majorly through
bank borrowings. However, the assigned rating draws comfort from
long experience of the promoters in garments manufacturing
business and the firm's established relationships with reputed
international retailers which results in repeat orders. The rating
also takes into account healthy order book position of the firm
which provides revenue visibility for the near term.
Incorporated in the year 1985, Bharat Export Overseas is a
partnership firm promoted by Mr. Gurprit Sawhney and Ms. Preeti
Singh. The firm is engaged in manufacturing and export of Ladies
garments. BEO has three manufacturing facilities located in
Gurgaon, Haryana with total annual capacity of 6 lakhs pieces. The
firm majorly exports to U.K and Germany.
Recent Results
The firm reported net profit of INR1.71 crore on an operating
income of INR29.11 crore in FY2014 (as per provisional numbers) as
against net profit of INR1.04 crore on an operating income of
INR21.81 crore in FY2013.
BHOORATHNOM CONSTRUCTION: CRISIL Ups Rating on INR140M Loan to C
----------------------------------------------------------------
CRISIL has upgraded its ratings on the bank facilities of
Bhoorathnom Construction Company Pvt Ltd to 'CRISIL C/CRISIL A4'
from 'CRISIL D/CRISIL D'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 725 CRISIL A4 (Upgraded
from 'CRISIL D')
Cash Credit 140 CRISIL C (Upgraded
from 'CRISIL D')
Proposed Long Term 115 CRISIL C (Upgraded
Bank Loan Facility from 'CRISIL D')
Secured Overdraft 20 CRISIL C (Upgraded
Facility from 'CRISIL D')
The rating upgrade reflects the regularisation of BCC's rated debt
over the last three months ended August 2014. However, there are
delays by the company in servicing its vehicle loans (not rated by
CRISIL) on account of its weak liquidity.
BCC has large working capital requirements, and has moderate scale
of operations in the intensely competitive construction industry.
However, BCC benefits from its promoters extensive industry
experience, and its healthy order book which provides medium-term
revenue visibility.
BCC, set up in 1972, undertakes water pipeline projects and road
construction for state and central government agencies across
India. The company also manufactures pre-stressed concrete,
reinforced cement concrete, and mild steel pipes. The company is
based out of Hyderabad.
DEEPAK AGRO: CRISIL Assigns B+ Rating to INR112.5MM Cash Credit
---------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the bank
facilities of Deepak Agro Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 17 CRISIL B+/Stable
Proposed Term Loan 3 CRISIL B+/Stable
Cash Credit 37.5 CRISIL B+/Stable
Proposed Cash Credit
Limit 112.5 CRISIL B+/Stable
The ratings reflect DAPL's large working capital requirements
leading to low return on capital employed, and its weak financial
profile marked by high gearing and weak debt protection metrics.
These rating weaknesses are partially offset by the promoter's
extensive experience in the rice processing industry.
Outlook: Stable
CRISIL believes that Deepak Agro Private Limited will maintain its
business risk profile, backed by the extensive experience of its
promoters in the rice industry. Its financial risk profile is,
however, expected to remain constrained due to high gearing and
weak debt protection metrics. The outlook may be revised to
'Positive' in case of significant improvement in the DAPL's
financial risk profile, due to capital infusion or improvement in
the scale of operations. Conversely, the outlook may be revised to
'Negative' in case of deterioration in DAPL's financial risk
profile due to significant increase in inventory, leading to large
incremental bank borrowings or in case of a debt-funded capital
expenditure programme.
Deepak Agro Private Limited (DAPL), incorporated in 1994 by Mr.
Mahesh Chand Agnihotri, Mr. Ram Naresh Agnihotri and their family
is engaged in the milling and processing of paddy into basmati and
non-basmati rice. Its milling capacity is situated at Mainpuri,
Uttar Pradesh.
DAPL reported, on a provisional basis a profit after tax (PAT) of
INR0.6 million on net sales of INR134.3 million for 2013-14
(refers to financial year, April 1 to March 31), as against a PAT
of INR0.2 million on net sales of INR93.7 million for 2012-13.
EUREKA CLOTHING: CRISIL Assigns B Rating to INR30M Packing Credit
-----------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable' rating to the long term
bank facilities of Eureka Clothing Company (ECC).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term 7.6 CRISIL B/Stable
Bank Loan Facility
Long Term Loan 2.4 CRISIL B/Stable
Export Packing 30.0 CRISIL B/Stable
Credit
Foreign Bill 30.0 CRISIL B/Stable
Discounting
The ratings reflect the firm's modest scale of operations and
below-average financial risk profile marked by weak debt
protection metrics. These weaknesses are partially offset by the
extensive experience of the firm's partners in the readymade
garment (RMG) segment.
Outlook: Stable
CRISIL believes that ECC will continue to benefit from its
partners' extensive experience and established client relations.
The outlook may be revised to 'Positive' if the firm improves its
scale of operations while maintaining its profitability, resulting
in an improvement in the financial risk profile of the firm.
Conversely, the outlook may be revised to 'Negative' if there is
considerable decline in accruals, or in case of deterioration in
working capital management or if the firm undertakes a large debt-
funded capital expenditure or in case of greater-than-expected
capital withdrawals leading to deterioration in the financial risk
profile.
Set up as a partnership firm in 1994, ECC manufactures RMG. The
day-to-day operations of the firm are managed by Mr. Manickam.
The firm recorded profit after tax (PAT) of INR3.5 million on
revenue of INR87.4 million in 2012-13 (refers to financial year,
April 1 to March 31) as against PAT of INR3.6 million on revenue
of INR90.5 million in 2011-12.
EXIMPIPES PRIVATE: CRISIL Assigns B+ Rating to INR85MM Cash Loan
----------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the bank
facilities of Eximpipes Private Limited.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 85 CRISIL B+/Stable
Long Term Loan 50 CRISIL B+/Stable
The rating reflects EPL's weak financial risk profile marked by
small networth, high gearing and weak debt protection metrics. The
rating also factors in its working capital intensive operations
and its exposure to intense competition in roofing sheet
manufacturing industry. These rating weaknesses are partially
offset by its promoters' extensive industry experience and their
established relationship with customers and suppliers.
Outlook: Stable
CRISIL believes that EPL will continue to benefit from the
extensive experience of its promoters. The outlook may be revised
to 'Positive' in case of higher-than-expected accruals or infusion
of substantial equity by the promoters, leading to improvement in
EPL's financial risk profile, particularly capital structure and
liquidity. Conversely, the outlook may be revised to 'Negative' in
case of lower-than-expected accruals or if the firm's working
capital cycle weakens or if it undertakes any large debt-funded
capital expenditure programme, leading to further deterioration in
its overall financial risk profile.
Established in 2004, EPL is engaged in manufacturing of various
types of roofing material. Promoted by Mr.P.Bhaskaran and his
family, the firm is based out of Palakkad in Kerala.
EPL reported a net loss of INR3 million on net sales of INR267.8
million for 2013-14 (refers to financial year, April 1 to
March 31).
G.S. MAJESTIC: CRISIL Reaffirms B Rating on INR300MM Cash Credit
----------------------------------------------------------------
CRISIL's rating on the bank facilities of G.S. Majestic Developers
Pvt Ltd continues to reflect GSMD's weak liquidity due to large
maturing debt repayments, which are expected to tightly match its
moderate expected cash accruals over the medium term.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 300 CRISIL B/Stable (Reaffirmed)
The rating also factors in the exposure to intense competition in
the commercial real estate market and risks relating to
cyclicality in the Indian real estate industry. These rating
weaknesses are partially offset by expected improvement in its
cash accruals on the back of improving occupancy at its shopping
mall and the expected timely funding support from its promoters'
group in case of any cash flow mismatch.
Outlook: Stable
CRISIL believes that GSMD's liquidity will remain stable over the
medium term on the back of expected improvement in its cash
accruals and expected timely funding support from its promoter
group in case of any cash flow mismatch. The outlook may be
revised to 'Positive' if the group achieves higher-than-expected
customer offtake and lease rentals leading to healthy cash
accruals. The outlook may be revised to 'Negative' if it faces
lower-than-expected customer offtake or delay in funding support
from the promoter group leading to significant pressure on its
liquidity.
Incorporated in 2010, GSMD is setting up a shopping mall in
Ludhiana (Punjab). The total project cost is estimated at INR1300
million and is expected to be funded in a debt-to-equity ratio of
3:10. The construction has been completed and the mall is expected
to begin operations by November 2014.
GSMD is a part of the Jujhar & Fastway group of companies, which
has varied business interests. The group has presence in the
passenger and goods transport business along with the MSO business
in Punjab, Himachal, and a part of Haryana.
GLADS HOME: CRISIL Assigns B+ Rating to INR60MM Cash Credit
-----------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-term
bank facilities of Glads Home Appliances Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 60 CRISIL B+/Stable
Proposed Long Term 40 CRISIL B+/Stable
Bank Loan Facility
The rating reflects GAPL's modest scale of operations in an
intensely competitive industry, and below-average financial risk
profile marked by subdued debt protection metrics. These rating
weaknesses are partially offset by GAPL's promoters' extensive
experience in the consumer durables distribution business.
Outlook: Stable
CRISIL believes that GAPL 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
higher-than-expected cash accruals, leading to improvement in its
financial risk profile. Conversely, the outlook may be revised to
'Negative' if GAPL registers lower-than-expected revenue or
operating profitability or in case of lengthening of its working
capital cycle, or if it undertakes a large debt-funded capital
expenditure programme, leading to weakening of its financial risk
profile.
Set up in 1996, GAPL is a distributor of consumer durable goods in
Chennai. Its day-to-day operations are managed by Mr. Arun Daniel
Robi.
GAPL registered, on a provisional basis, a profit after tax (PAT)
of INR5.1 million on net sales of INR450 million for 2013-14
(refers to financial year, April 1 to March 31), against a PAT of
INR2.4 million on net sales of INR386 million for 2012-13.
GOKILAA GAARMENTS: ICRA Reaffirms B+ Rating on INR1.33cr Loan
-------------------------------------------------------------
ICRA has reaffirmed the long-term rating of [ICRA]B+ outstanding
on the INR1.33 crore (enhanced from INR1.13 crore) term loan
facilities of Gokilaa Gaarments. ICRA has also reaffirmed the
short-term rating of [ICRA]A4 outstanding on the INR22.00 crore
(enhanced from INR15.00 crore) fund based facilities and the
INR1.00 crore non-fund based facilities of the Firm.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
LT-Term loan facilities 1.33 [ICRA]B+ reaffirmed
ST-Fund based facilities 22.00 [ICRA]A4 reaffirmed
ST-Non-fund based facilities 1.00 [ICRA]A4 reaffirmed
The ratings re-affirmation factors in healthy revenue growth
witnessed during last fiscal, on the back of favourable demand
scenario resulting in strong order flow from its existing
customers. The ratings also takes into account the experience of
promoter in the garment export business, the established and long-
standing relationship of the Firm with its customers translating
into regular order flow and the Firm's healthy order book position
providing revenue visibility in the near term. However, the
ratings remain constrained by the Firm's modest scale of
operations which restrict the benefits of scale economics, intense
competition prevalent in the highly fragmented textile industry
thus restricting pricing flexibility and high customer
concentration risks with its three customers adding ~92% of
revenues in 2013-14. Also, competition from low-cost countries and
the economic exposure risk related to foreign exchange rate
fluctuations affect the Firm's business risk profile; although the
Firm mitigates the foreign exchange risk by hedging a portion of
its export receivables through forward contracts. The ratings also
consider the deterioration in capital structure and coverage
indicators as on March 2014 primarily due to increase in working
capital borrowings on the back of stretched receivable period and
the stress on operating profits owing to increase in input costs
during the last fiscal. While the Firm's strong order book of
INR31.5 crore, as of August 2014, should support the sales
performance in the current fiscal, going forward, the Firm's
ability to broad base its clientele and improve its operating
margins amidst volatile input costs would be key rating
sensitivities.
Gokilaa Gaarments was established in the year 1997 as a
partnership firm and is engaged in manufacture and exports of
knitted garments, primarily to customers in Europe. The Firm
commenced its direct exports operation in the year 2003, prior to
which the Firm was undertaking job work activities and were taking
orders from merchant exporters. Currently, the Firm has four
stitching units and a printing/embroidery unit and the
manufacturing facility is located at Tirupur, Tamil Nadu.
Recent Results
The Firm reported net profit of INR1.3 crore on an operating
income of INR58.7 crore during 2013-14 as against net profit of
INR1.0 crore on an operating income of INR49.0 crore during 2012-
13.
JAGANNATH POLYMERS: CRISIL Puts B Rating on INR56MMM Cash Credit
----------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable' rating to the long-term
bank facilities of Jagannath Polymers Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term 38 CRISIL B/Stable
Bank Loan Facility
Cash Credit 56 CRISIL B/Stable
Long Term Loan 6 CRISIL B/Stable
The rating reflects JPL's stretched liquidity driven by its large
working capital requirements; and small scale of operations in the
fragmented polypropylene (PP) woven sacks manufacturing segment.
These rating weaknesses are partially offset by the extensive
industry experience of the promoters.
Outlook: Stable
CRISIL believes that JPL will maintain its financial risk profile
backed by the promoter's extensive experience in the PP woven
sacks manufacturing segment, and established customer
relationships. The outlook may be revised to 'Positive' if the
company's liquidity improves with sizeable operating income and
profitability, or enhanced working capital management or a
substantial capital infusion by the promoters. Conversely, the
outlook may be revised to 'Negative' if JPL's financial risk
profile and liquidity deteriorate with significantly low cash
accruals, stretched working capital cycle, or sizeable debt-funded
capital expenditure.
JPL was incorporated in in 1996. The company manufactures PP woven
sacks for the cement and fertiliser industries. The Cuttack-based
family of Mr. M K Subudhi ' with three decades of relevant
experience ' are the promoters. JPL has a manufacturing facility
in Jagatpur, Cuttack (Odisha).
JAGANNATH POLYPACKS: CRISIL Rates INR45MM Cash Credit at 'B-'
-------------------------------------------------------------
CRISIL has assigned its 'CRISIL B-/Stable/CRISIL A4' ratings to
the bank facilities of Jagannath Polypacks Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term 20 CRISIL B-/Stable
Bank Loan Facility
Bank Guarantee 15 CRISIL A4
Cash Credit 45 CRISIL B-/Stable
The ratings reflect Jagannath Polypacks's stretched liquidity,
driven by its large working capital requirements; and small scale
of operations in the fragmented polypropylene (PP) woven sacks
manufacturing segment. The ratings also factor in the company's
low capacity utilisation. These rating weaknesses are partially
offset by the promoters' extensive industry experience.
Outlook: Stable
CRISIL believes that Jagannath Polypacks will maintain its
financial risk profile, backed by the promoters' extensive
experience in the PP woven sacks manufacturing segment, and
established customer relationships. The outlook may be revised to
'Positive' if the company improves its liquidity with sizeable
capacity utilisation leading to improved cash accruals; or
enhanced working capital management; or a substantial capital
infusion by the promoters. Conversely, the outlook may be revised
to 'Negative' if Jagannath Polypacks's financial risk profile and
liquidity weaken with significantly low cash accruals, or
stretched working capital cycle, or large debt-funded capital
expenditure.
Jagannath Polypacks was incorporated in in 2007. The company
manufactures PP woven sacks for the cement and fertiliser
industries. The Cuttack-based family of Mr. M K Subudhi ' with
three decades of relevant experience ' are the promoters. The
company's manufacturing facility in Jagatpur, Cuttack (Odisha),
began commercial operations in March 2012.
JAI MAA: ICRA Assigns 'D' Rating to INR31cr Bank Facilities
-----------------------------------------------------------
ICRA has assigned its long term rating of [ICRA]D to the INR31.00
crore fund-based bank facilities of Jai Maa Savitri Educational
Society.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based Bank facilities 31.00 [ICRA]D; assigned
The assigned rating takes into account the delays in servicing of
debt obligations by the society, with its loan account being
classified as a non-performing asset (NPA) since March 31, 2013.
Irregularities in debt servicing were on account of JMSES'
stretched liquidity position owing to the modest occupancy levels
of the institute operating under the society (which can partly be
attributed to the recent commencement of operations of the
institute in AY2010-11) as well as the stretched capital structure
of the society, as it undertook significant debt funded capital
expenditure for infrastructure development. The liquidity position
of the society was exacerbated by the delays in receipt of fee
reimbursements for students from reserved categories (who account
for more than 50% of the existing student base of the institute)
from the State Government of Uttar Pradesh. On account of a
combination of these factors, JMSES has been incurring cash losses
over the past two years and is dependent on funding support from
the member group for meeting its debt servicing obligations.
ICRA however takes note of the society's strength in the form of
its experienced member group, which has been engaged in the
education sector for more than a decade.
In ICRA's view, funding support from the member group and/or
restructuring of the debt obligations which will help ease the
immediate liquidity pressure, thereby enabling timely servicing of
debt obligations, will be the key rating sensitivity in the short
term. This apart, improvement in the occupancy levels of the
institute operating under the society, timely receipt of fee
reimbursement from the State Government as well as the scale and
funding mix of incremental investments undertaken by the society
will remain critical determinants of JMSES' liquidity profile, and
hence would be key rating sensitivities.
Established in 2010, JMSES is a single asset society, which runs
and operates the JMS group of Institutions in Ghaziabad (Uttar
Pradesh). The institute offers courses in engineering, (including
B. Tech as well as diploma courses), management (BBA, MBA, PGDM),
computer applications (BCA) and architecture (B. Arch). All the
courses are approved by All India Council for Technical Education
and the institute is affiliated to UPTU ** for technical courses
(B.Tech, MBA, B. Arch), Ch. Charan Singh University (Meerut, U.P)
for BBA and BCA courses and Board of technical education (U.P) for
diploma courses. The institute catered to 1,279 students in
AY2014-15 (till August 2014).
Recent Results
JMSES reported a net deficit of INR4.53 crore and cash loss of
INR3.05 crore on revenue receipts of INR6.53 crore in 2013-14 as
against a net deficit of INR4.24 crore and cash loss of INR3.01
crore on revenue receipts of INR6.18 crore in the previous year.
K.S. GOWDA: CRISIL Assigns B- Rating to INR55.5MM Bank Loan
-----------------------------------------------------------
CRISIL has assigned its 'CRISIL B-/Stable' rating to the long-term
bank facilities of K.S. Gowda Educational Trust (R.).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 41.5 CRISIL B-/Stable
Overdraft Facility 3.0 CRISIL B-/Stable
Proposed Long Term 55.5 CRISIL B-/Stable
Bank Loan Facility
The rating reflects KSGET's below-average financial risk profile,
marked by high gearing and weak debt protection metrics and its
susceptibility to regulatory changes and to intense competition in
the education sector. These rating weaknesses are partially offset
by the experience of KSGET's trustees in the education sector.
Outlook: Stable
CRISIL believes that KSGET will continue to benefit over the
medium term from its trustees' extensive experience in the
education sector. The outlook may be revised to 'Positive' in case
of sustainable ramp-up in the trust's operations with increase in
the intake of students, leading to significant improvement in its
liquidity. Conversely, the outlook may be revised to 'Negative' if
KSGET's financial risk profile, particularly its liquidity,
weakens, most likely because of sizeable debt-funded capital
expenditure, or an adverse impact of any regulatory change, or
deterioration in its cash flow management.
KSGET was set up in 2005 by Mr. Ashok Kumar. The trust operates
three schools, one industrial training centre, one pre-university
college, and a degree college Sullia (Karnataka).
KAMAKSHI COTTON: CRISIL Puts B+ Rating on INR82.5MM Cash Loan
-------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long term
bank facilities of Kamakshi Cotton Industries Ginning & Pressing
Unit.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 10 CRISIL B+/Stable
Cash Credit 82.5 CRISIL B+/Stable
Proposed Long Term
Bank Loan Facility 32.5 CRISIL B+/Stable
The rating reflects KCI's modest scale of operations in the highly
fragmented cotton ginning industry, and its below-average
financial risk profile marked by high gearing, small net worth,
and weak debt protection metrics. These rating weaknesses are
partially offset by its promoters' extensive industry experience
and its established relationship with key customers and suppliers.
Outlook: Stable
CRISIL believes that KCI will continue to benefit over the medium
term from its promoters' extensive industry experience. The
outlook may be revised to 'Positive' if the firm's revenue and
profitability increase substantially leading to improvement in its
financial risk profile. Conversely, the outlook may be revised to
'Negative' if the firm undertakes any aggressive debt-funded
expansion, or if its revenue and profitability decline
substantially, leading to weak financial risk profile.
Established in 2008 as a partnership concern, KCI is engaged in
ginning and pressing of raw cotton, and sells cotton lint and
cotton seeds. The firm also undertakes extraction of cottonseed
oil. It is promoted by J. Bhaskar Rao and his family members and
is based in Karimnagar (Telangana).
For 2013-14 (refers to financial year, April 1 to March 31), KCI
reported a profit after tax (PAT) of INR3.1 million on net sales
of INR609.3 million, against a PAT of INR2.8 million on net sales
of INR455.5 million for 2012-13.
KWALITY TOWNSHIP: ICRA Assigns B+ Rating to INR5cr Term Loan
------------------------------------------------------------
ICRA has assigned its long term rating of [ICRA]B+ to the INR5
crore long term bank facilities of Kwality Township Pvt. Ltd.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term Loan 5.0 [ICRA]B+; Assigned
The assigned rating favorably factors in the experience of the
promoters in the real estate sector, largely in the underwriting
business, as well as the healthy bookings of the residential units
in KTPL's ongoing project "ARK Residency". The rating is also
supported by the tie up of the entire debt requirement for the
project as well as the moratorium period available after the
project completion, which provides some flexibility in cash flow
management.
However, the rating is constrained by the moderate size of the
project under execution and the execution risks, given that only
57% of the project cost has been incurred so far. ICRA also notes
that only 17% of the commercial space has been sold so far, hence
the company remains dependent on additional bookings to fund its
committed outflows.
Going forward, the ability of the company to execute the project
in a timely manner and achieve additional bookings, especially for
the commercial space, will be the key rating sensitivities.
Incorporated in 2009, KTPL develops housing projects and townships
and undertook its first township project, "ARK City" in 2009. In
this project located in Meerut, Uttar Pradesh, the company sold
300 plots and is developing single storey and duplex houses on
another 100 plots as row houses. KTPL commenced the construction
of its second project "ARK Residency", Meerut, in 2012. This is a
mixed use project, comprising 72 commercial units and 45
residential units. The total project cost is estimated at INR19.72
crore, which is proposed to be funded by customer advances (40%),
promoter's contribution (35%) and debt (25%).
Recent Results
In 2013-14, KTPL registered an operating income (OI) of INR6.27
crore and profit after tax (PAT) of INR0.59 crore, as against an
OI of INR1.97 crore and PAT of INR0.10 crore in the previous year.
MR. BROWN: CRISIL Assigns B+ Rating to INR80MM Term Loan
--------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-term
bank facilities of Mr. Brown Bakery & Food Products Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term 2 CRISIL B+/Stable
Bank Loan Facility
Term Loan 80 CRISIL B+/Stable
The rating reflects Mr. Brown Bakery's exposure to high project
implementation risks, and it's below average financial risk
profile. The rating also factors in the company's modest scale of
operations in the competitive bakery products segment. These
rating weaknesses are partially offset by Mr. Brown Bakery's
established brand in Lucknow and Kanpur regions, the extensive
industry experience of its promoters, and the funding support
received from them.
Outlook: Stable
CRISIL believes that Mr. Brown Bakery will continue to benefit
over the medium term from its established brand, its promoters'
extensive industry experience, and their funding support. The
outlook maybe revised to 'Positive' if the company completes its
project in time and within the budgeted cost, and generates
better-than-expected cash accruals during its initial phase of
operations. Conversely, the outlook maybe revised to 'Negative' in
case of any time or cost overrun in the company's ongoing project,
or lower-than-expected cash accruals, constraining its liquidity.
Mr. Brown Bakery was established on 12th June 2008. The company
manufactures bakery and confectionary products that it sells
through retail outlets in Lucknow and Kanpur (Uttar Pradesh) under
its brand Mr. Brown Bakery. It is headquartered in Lucknow, and is
promoted by Mr. Ramu Gupta and his family members.
MAHALAXMI PADDY: CRISIL Assigns B+ Rating to INR63MM Bank Loan
--------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to
the bank facilities of Mahalaxmi Paddy Products (P) Ltd (MPPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 16 CRISIL B+/Stable
Proposed Long Term
Bank Loan Facility 63 CRISIL B+/Stable
Cash Credit 35 CRISIL B+/Stable
Letter of Credit 16 CRISIL A4
The ratings reflect MPPL's below-average financial risk profile,
marked by a modest net worth, a high gearing and weak debt
protection metrics, and modest scale of operations in a fragmented
industry. These rating weaknesses are partially offset by MPPL's
promoters' extensive industry experience, and the funding support
that the company receives from them.
Outlook: Stable
CRISIL believes that MPPL will continue to benefit over the medium
term from its promoters' extensive industry experience and funding
support. The outlook may be revised to 'Positive' if the company
generates better-than-expected cash accruals or receives
substantial capital infusion by its promoters along with efficient
working capital management. Conversely, the outlook may be revised
to 'Negative' in case MPPL generates lower-than-expected cash
accruals or if its working capital requirements are larger than
expected, or if it undertakes a larger-than-expected debt-funded
capital expenditure programme.
Set up in 1990, MPPL is promoted by Mr. Arun Kumar Maheshwari and
his family. The company mills and processes basmati and non-
basmati rice at its production facility in Mainpuri (Uttar
Pradesh).
MARUTI COTTON: CRISIL Assigns B Rating to INR50MM Cash Credit
-------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable' rating to the long-term
bank facilities of Maruti Cotton Ind - Kadi (MCI).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 50 CRISIL B/Stable
Long Term Loan 19.5 CRISIL B/Stable
The rating reflects MCI's exposure to the risks related to the
ongoing project, initial phase and susceptibility of profitability
to volatility in cotton prices and intense competition. These
rating weaknesses are partially offset by its promoters' extensive
experience in the cotton ginning industry, leading to its
established relationships with customers and suppliers, and
plants' advantageous location.
Outlook: Stable
CRISIL believes MCI will continue to benefit over the medium term
from its promoters' extensive industry experience. The outlook may
be revised to 'Positive' if MCI stabilises its operations
considerably early, leading to sizeable cash accruals. Conversely,
the outlook may be revised to 'Negative', if the firm achieves
substantially low cash accruals or its financial risk profile
weakens, caused most likely by stretch in working capital
borrowings or, large debt-funded capital expenditure, or
disruption in its operations driven by adverse regulatory changes.
Incorporated in 2013, MCI is promoted by Kadi (Gujarat)-based
Bhavsar and Prajapati family. The firm is engaged in cotton
ginning and pressing. Commercial operations for the firm are
expected to start from November 2014.
METKORE ALLOYS: Maharashtra Court Orders Sale of Seized Assets
--------------------------------------------------------------
The Hindu Business Line reports the Maharashtra Protection of
Investors' Deposit (MPID) Court has directed the competent
authority, set up by the Government, to sell ferro-chrome
belonging to Metkore Alloys, one of the defaulters on the National
Spot Exchange.
According to the report, Justice DP Surana directed the authority
to sell 14,243 tonnes of ferro-chrome stock seized by the Economic
Offences Wing (EoW) within two months, and deposit the proceeds in
the NSEL escrow account.
The Andhra Pradesh-based Metkore Alloys owes INR95.08 crore to
NSEL investors, said NSEL in a press release on October 1, Hindu
Business Line relates.
The EoW of the Mumbai Police has attached over 300 assets of 22
defaulting members worth around INR4,000 crore. The exchange has
to settle trades worth INR6,500 crore entered on the platform.
Meanwhile, Yathuri Associates, which owes INR405.60 crore to the
NSEL trading clients, has agreed to pay INR15 crore by January as
part of its commitment to the MPID Court. It has already submitted
a cheque for INR2 crore towards the first instalment, said NSEL,
the report relays.
The Hindu Business Line relates that Saji Cherian, Managing
Director, National Spot Exchange, said the MPID order would set a
precedent for the time-bound recovery of amounts in default by
sale of assets and properties attached by the EoW.
The report adds that the exchange said its efforts to recover dues
from the defaulters were strengthened by the order passed by the
Bombay High Court, which had asked it to form a committee to
ascertain the defaulters' dues and oversee the process of asset
sale and recovery from defaulters. The committee would then
determine the dues payable by the defaulters/third parties.
Metkore Alloys & Industries Limited is engaged in the
manufacturing and trading of metal alloys. It produces high carbon
ferro chrome, silico mangenese and ferro silicon. The Company's
plant is located at Ravivalasa Village, Tekkali Mandal,
Srikakulam, Andhra Pradesh.
MEENA DEVELOPERS: ICRA Suspends B Rating on INR12.45cr FB Loan
--------------------------------------------------------------
ICRA has suspended the long term rating of [ICRA]B assigned to the
INR12.45 crore long term fund based bank facilities of Meena
Developers.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-Term Fund Based Limits 12.45 [ICRA]B Suspended
The suspension follows ICRA's inability to carry out a rating
surveillance in the absence of the requisite information from the
company.
OM SHREE: CRISIL Assigns B+ Rating to INR40MM Term Loan
-------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-term
bank facilities of Om Shree Thakurji Educational Society.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 40 CRISIL B+/Stable
Overdraft Facility 17.5 CRISIL B+/Stable
Proposed Overdraft 2.5 CRISIL B+/Stable
Facility
The rating reflects OST's modest scale of operations, high working
capital requirements and average financial risk profile marked by
high gearing. These rating weaknesses are partially offset by the
society's healthy profitability and the benefits expected from the
healthy demand prospects for the education sector.
Outlook: Stable
CRISIL believes that OST will continue to benefit from its healthy
profitability over the medium term. The outlook may be revised to
'Positive' in case of the society achieves significantly higher-
than-expected occupancy levels, leading to substantial accruals
and improved financial risk profile. Conversely, the outlook may
be revised to 'Negative' if the society registers significantly
lower-than-expected occupancy levels or if it faces further
stretch in receivables which adversely impacts its debt-servicing
ability.
OST, set up in 2007 by Mr. Ashish Goel, provides engineering and
management courses through Kalpi Institute of Technology (KIT,
affiliated to Kurukshetra University) situated at Ambala
(Haryana).
RATNAGIRI GAS: Lenders Hiving Off Firm's Assets; Convert Debt
-------------------------------------------------------------
The Times of India reports that saddled with crippled assets of
Ratnagiri Gas & Power (earlier Dabhol Power), lenders are hiving
off the company's assets and are once again converting their dues
into equity to avoid a hit on their exposure of close to INR10,000
crore.
Dabhol -- which has been a problem child for the government and
lenders for close to two decades now -- has already turned into a
non-performing asset for Power Finance Corporation as the company
has not paid its instalments for at least 90 days, the report
says. But other lenders, including SBI, ICICI Bank, IDBI Bank,
Canara Bank and IFCI, had so far avoided making provisions for
what is now a sticky asset by deciding to convert the overdues
into equity, according to TOI.
The report notes that bankers refused to comment on the issue but
it is not clear if the plan enjoys the blessings of the Reserve
Bank of India. The government has been involved with the exercise
and the finance ministry brass discussed the issue late in
September.
TOI says the problem, which has been brewing for over two years,
has turned into a full-blown crisis as the Maharashtra State
Electricity Distribution Co (MSEDCL) has also issued a notice to
terminate the power purchase agreement. According to the report,
Ratnagiri Gas & Power (RGPPL) has been facing acute gas shortage
and its supply to MSEDSL has been affected, which had contracted
to buy 95% of the electricity generated by it. The Maharashtra
government utility has been refusing payment, arguing that supply
is irregular and is in the nature of infirm power. Only the fuel
cost is paid for infirm power, says TOI.
Sources told TOI that the dues now added up to over INR2,100
crore, which included INR115 crore for electricity consumed by
MSEDCL and INR1,960 as capacity charge. With the state power
utility unable to clear its dues to RGPPL -- where GAIL and NTPC
hold close to 33% each -- the power company is finding it tough to
clear its dues to the lenders, TOI relays.
Now, the lenders who already hold close to 17% in RGPPL are
looking at ways to avert a fresh hit to their already NPA-saddled
balance sheets, according to TOI. The report relates that sources
said lenders are working with Deloitte and GAIL to work out a
long-term viability plan, which includes hiving off of the LNG
terminal.
The sources, however, cautioned that it will take a while for the
plan to be implemented and the immediate focus is on ensuring that
banks are not hit by another large NPA, TOI relates. Experts,
however, warned that even the plan to convert outstanding amount
into equity would only be able to defer the problem till October,
which means that they will have to set aside money when they
finalize their results for the December quarter, the report notes.
Ratnagiri Gas and Power Private Limited owns and operates an
integrated power generation and re-gasified LNG facility in India.
S. S. CONSTRUCTION: CRISIL Puts B+ Rating on INR60MM Cash Credit
----------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to
the bank facilities of S. S. Construction - Karad (SSC).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 1.5 CRISIL B+/Stable
Proposed Long Term 8.5 CRISIL B+/Stable
Bank Loan Facility
Bank Guarantee 50 CRISIL A4
Cash Credit 60 CRISIL B+/Stable
The ratings reflect the firm's modest scale and working capital
intensive operations, exposure to intense competition in civil
construction industry. The ratings also factor in SSC's
susceptibility to risks associated with the implementation of the
ongoing build, operate and transfer (BOT) project, which could
largely depend on the timeliness of customer advances for the
commercial property under construction. These rating weaknesses
are partially offset by the promoters' extensive experience in the
construction sector and SSC's moderate financial risk profile,
commensurate with its capital structure and debt protection
metrics, albeit a modest net worth.
Outlook: Stable
CRISIL believes that SSC will benefit over the medium term, from
the extensive industry experience of the promoters. The outlook
may be revised to 'Positive' if the firm improves its financial
risk profile with substantial cash accruals and timely inflow of
customer advances for the ongoing BOT project. Conversely, the
outlook may be revised to 'Negative' if SSC's financial risk
profile and liquidity weaken because of significantly low cash
accruals or sizeable increase in working capital requirements,
driven by delayed order execution.
SSC was set up in Karad (Maharashtra) in August 2005 as a
partnership firm, by Mr. Avinash Jagtap and Mr. Balasaheb More.
The firm undertakes civil construction such as roads and buildings
for various government and private players.
SARBAMANGALA AGRO: CRISIL Assigns D Rating to INR38MM Cash Credit
-----------------------------------------------------------------
CRISIL has assigned its 'CRISIL D/CRISIL D' ratings to the bank
loan facilities of Sarbamangala Agro Products Pvt Ltd. The rating
reflects instances of delay by SAPPL in servicing its term debt,
because of weak liquidity.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 19 CRISIL D
Proposed Long Term 21.2 CRISIL D
Bank Loan Facility
Bank Guarantee 1.8 CRISIL D
Cash Credit 38 CRISIL D
SAPPL also has large working capital requirements and a below-
average financial risk profile. However, the company benefits from
the promoter's extensive experience in the rice milling business.
SAPPL was incorporated in Murshidabad (West Bengal) in 2009. The
company is engaged in the milling and processing of par boiled
rice. The promoter, Mr. Sudip Roy, manages the company's daily
operations.
SHREE DEVELOPERS: CRISIL Assigns B+ Rating to INR50MM Bank Loan
---------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-term
bank facilities of Shree Developers.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term 50 CRISIL B+/Stable
Bank Loan Facility
Term Loan 50 CRISIL B+/Stable
The rating reflects Shree Developers' exposure to significant
risks associated with its ongoing real estate redevelopment
project at Mumbai. This rating weakness is partially offset by the
promoters' extensive experience in the real estate business, and
its prudent funding mix for its on-going project.
Outlook: Stable
CRISIL believes that Shree Developers will maintain a stable
business risk profile on the back of extensive experience of the
promoters in the real estate sector. The outlook may be revised to
'Positive' if the customer response to the project is
significantly better than expected leading to higher cash flow
generation and improvement in financial risk profile. The outlook
shall be revised to 'Negative' if cash flow from operations are
significantly below expectations, either due to subdued response
to the project or lower than envisaged flow of advances,
significantly affecting its debt servicing ability.
Shree Developers was setup in 2002-03 as partnership firm by Mr.
Digambar Sukhee and Mr. Jitendra Shah. The firm is engaged in real
estate development in Mumbai. The firm currently has two
residential redevelopment projects which are under construction in
Mulund area of Mumbai.
SHREE KANKESHWARI: CRISIL Reaffirms B+ INR200M Cash Loan Rating
---------------------------------------------------------------
CRISIL's ratings on the bank facilities of Shree Kankeshwari Agro
Pvt Ltd (SKA) continue to reflect its below-average financial risk
profile, driven by large working capital requirements, and a small
scale of operations in the highly fragmented industry. These
rating weaknesses are partially offset by the extensive industry
experience of SKA's promoter.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 200 CRISIL B+/Stable(Reaffirmed)
For arriving at the ratings, CRISIL has combined the business and
financial risk profiles of SKA and Shree Kankeshwari Agro
Industries (SKAI). This is because SKAI has given a corporate
guarantee to SKA; besides, both the entities, together referred to
as the Shree Kankeshwari group, have a common management and
operate in the same line of business.
Outlook: Stable
CRISIL believes that the Shree Kankeshwari group will continue to
benefit from the promoters' extensive experience in the rice
milling business, over the medium term. The outlook may be revised
to 'Positive' if the group improves its financial risk profile,
with significantly enhanced scale of operations, and
profitability, because of sizeable capital expenditure (capex).
Conversely, the outlook may be revised to 'Negative' if the Shree
Kankeshwari group's financial risk profile weakens, with
incremental working capital requirements.
Update
The Shree Kankeshwari group recorded net sales of INR768 million
for 2013-14(refers to financial year, April 1 to March 31). The
sales increased at a compound annual growth rate (CAGR) of 19 per
cent over the two years through, with improved sales. The group's
enhanced capacity following the completion of the proposed capex
could result in a 15 to 20 per cent growth in sales, over the
medium term. The operating margin in 2013-14 was 3 per cent, in
line with that the previous year. Following the capex, the group's
operating margin could increase to around 4 per cent, because of
improved efficiency.
The group's operations have historically been working capital
intensive, with gross current assets (GCA) of 128 days,. Despite
improved inventory in 2013-14, debtors were significantly high
because of sales at the end of the year. Consequently, the group
fully utilised its bank lines over the 12 months through October
2013, thus constraining its liquidity.
The Shree Kankeshwari group intends to undertake capex of INR150
million, to increase its capacity to 10 metric tonnes (MT) per
hour, from 6 MT per hour. The group is likely to fund the capex
through a debt-equity ratio of 2:1. Consequently, the gearing
could increase in the range of 2.8 to 3.2 times, over the medium
term. However, the group's liquidity is supported by sufficient
accruals vis-a-vis its debt obligations of INR14 million, and
unsecured loans of around INR53 million, from the promoter.
For 2013-14, SKA reported a net profit of INR2.0 million on net
sales of INR768.0 million, as against a net profit of INR2.9
million on net sales of INR753 million for 2012-13.
SKA was incorporated in April 2012. The company is engaged in
milling, processing and selling of non-basmati rice and its by-
products. SKA currently has 1 rice milling unit with a capacity of
6 MT per hour, besides a sorting and grading unit, each with a
capacity of 8 MT per hour. Mr. Koushik P Gandhi is the promoter.
SKAI was engaged in milling, processing and selling non-basmati
rice. The firm was in operations till July 2012, after which its
operations were transferred to SKA.
SHRI KRISHAN: CRISIL Assigns B Rating to INR50MM Cash Credit
------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable' rating to the bank
facilities of Shri Krishan Kirpa Rice Mill (SKRM).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Warehouse Financing 15 CRISIL B/Stable
Cash Credit 50 CRISIL B/Stable
Rupee Term Loan 15 CRISIL B/Stable
The rating reflect the SKRM's small scale of operations in highly
fragmented rice industry and weak financial risk profile marked by
high gearing and weak debt protection metrics. These rating
weaknesses are partially offset by promoters' extensive industry
experience in rice industry.
Outlook: Stable
CRISIL expects Shri Krishna Kirpa Rice Mill (SKRM) credit risk
profile to remain weak owing to working capital intensive nature
of the operations and weak financial risk profile. The outlook may
be revised to 'Positive' if the firm's revenues and profitability
increase substantially leading to an improvement in its overall
financial risk profile or in case of significant infusion of
capital into the firm resulting in improved capital structure.
Conversely, the outlook may be revised to 'Negative' if the firm
undertakes aggressive, debt-funded expansions, or if its revenues
and profitability declines substantially or if the promoter draws
capital from the firm leading to deterioration in its financial
risk profile.
Set up in 2007, Kurukshetra (Haryana) based Shri Krishan Kirpa
rice mill (SKRM) is a partnership firm engaged in milling and
processing of paddy into rice with milling capacity of 8 tonnes
per hour (tph) and sortex capacity of 5 tph. The firm has 4
partners namely Mr. Sat Pal, Mr.Ved Prakash, Mrs. Sunita Rani and
Mrs. Sushma Rani. The company derives ~70 per cent of its revenues
from sales of super fine rice (Non-basmati rice) while rest coming
from basmati variety.
SKRM reported a book profit of INR2.16 million on net sales of
INR228.74 million for 2013-14 (refers to financial year, April 1
to March 31), against a book profit of INR1.51 million on net
sales of INR223.13 million for 2011-12.
SIAN HOTEL: CRISIL Assigns B Rating to INR75.2MM Bank Loan
----------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable' rating to the long-term
bank loan facilities of Sian Hotel and Resorts Private Limited.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term 75.2 CRISIL B/Stable
Bank Loan Facility
The rating reflects SHARPL's exposure to stabilisation and demand
risks pertaining to its ongoing project, and also to risks related
to the cyclicality in the hospitality industry. These rating
weaknesses are partially offset by the experience of the company's
promoters in the hospitality industry.
Outlook: Stable
CRISIL believes that SHARPL will continue to benefit over the
medium term from its promoters' experience in the hospitality
industry. The outlook may be revised to 'Positive' if the company
successfully commercialises and stabilises its operations, and
registers higher-than-expected revenue and accruals. Conversely,
the outlook may be revised to 'Negative' in case of a time or cost
overrun in completing the ongoing project, or if it generates
lower-than-expected cash accruals, leading to weakening of its
liquidity.
Incorporated in 2014, SHARPL plans to set up a resort in
Darjeeling (West Bengal). The company's day-to-day operations are
being looked after by Mr. Sashish Singhal.
SKM INDUSTRIES: CRISIL Reaffirms B+ Rating on INR12.5MM Cash Loan
-----------------------------------------------------------------
CRISIL's ratings on the bank loan facilities of SKM Industries
continue to reflect its modest scale of operations in the
intensely competitive steel cable drum segment, and average
financial risk profile marked by its small net worth and average
debt protection metrics. These rating weaknesses are partially
offset by the extensive industry experience of the promoters.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 0.5 CRISIL A4 (Reaffirmed)
Cash Credit 12.5 CRISIL B+/Stable (Reaffirmed)
Export Packing Credit 12.5 CRISIL B+/Stable (Reaffirmed)
Export Post-Shipment
Credit 15 CRISIL A4 (Reaffirmed)
Letter of Credit 12.5 CRISIL A4 (Reaffirmed)
Proposed Long Term
Bank Loan Facility 0.6 CRISIL B+/Stable
Outlook: Stable
CRISIL believes that SKM will continue to benefit over the medium
term from its promoters' extensive industry experience. The
outlook may be revised to 'Positive' if the firm reports a
significant increase in its scale of operations and profitability,
or an improvement in its financial risk profile, due to
improvement in capital structure. Conversely, the outlook may be
revised to 'Negative' if SKM's financial risk profile deteriorates
with a decline in revenue and profitability, or substantial
increase in working capital requirements, or debt-funded capital
expenditure (capex).
Update
SKM's operating income increased by 46 per cent to around INR322
million in 2013-14 (refers to financial year, April 1 to March 31)
from INR220 million in 2012-13, due to increase in demand. The
firm's operating margin was around 6.3 per cent in 2013-14, and
will remain at similar levels over the medium term.
SKM's financial risk profile has remained average, marked by its
moderate gearing, a small net worth, and average debt protection
metrics. The firm's gearing was 1.53 times as on March 31, 2014
with the net worth of INR34.5 million as on March 31, 2014 because
of its low accretion to reserves. SKM's debt protection metrics
remained average with interest coverage and net cash accruals to
total debt (NCATD) ratios of 4.3 times and 0.16 times,
respectively, as on March 31, 2014, because of its moderate
profitability. The firm is likely to sustain its moderate debt
protection metrics, over the medium term.
SKM's liquidity is stretched marked by low cash accruals and
working capital intensive nature of operations. The firm's cash
accruals are estimated in the range of INR8 million to INR9
million for 2013-14, vis-a-vis nil debt obligations, over the
medium term. SKM's operations are working capital intensive which
reflects in gross current assets (GCAs) of 146 days as on
March 31, 2014. SKM utilised its bank facilities at 70 per cent on
average over the 12 months through July 2014.
SKM based in Mumbai (Maharashtra) was set up as a partnership firm
by the Kikani family in 2006. The firm manufactures a range of
steel cable drums, slotted angle and shelving racks, heavy duty
racks, and movable racks.
TEJA TIMES: ICRA Reaffirms B+ Rating on INR8cr Cash Credit
----------------------------------------------------------
ICRA has reaffirmed the long-term rating of [ICRA]B+ assigned to
INR8.30 crore fund based limits of Teja Times. ICRA has also
reaffirmed the long-term/short-term rating of [ICRA]B+/[ICRA]A4 to
its INR1.70 crore unallocated limits.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash credit 8.00 [ICRA]B+
Term loan 0.30 [ICRA]B+
Unallocated 1.70 [ICRA]B+/[ICRA]A4
The rating of the firm continues to be constrained by low
profitability margins of the firm on account of industry dynamics
and the price structure being decided by the principal; moderate
financial profile characterized by moderate gearing and coverage
ratios; and high working capital intensity owing to high inventory
requirements. The rating also continues to be constrained by the
modest scale of operations of the firm and competition from other
players in the area which is annulled to a certain extent by the
brand reputation enjoyed by Tanshq.
The assigned rating, however, continues to derive comfort from the
vast experience of the promoters in the industry and established
presence of the firm in Rajahmundry area in Andhra Pradesh. Going
forward, the ability of the firm to improve its scale of
operations while also improving its financial profile and working
capital management would be the key rating sensitivities.
Teja Times was established in 1993 in Rajahmundry in Andhra
Pradesh. It is an authorized dealer of Titan watches and Tanishq
jewelers. The company is managed by Mr. Rama Rao who has 20 years
of experience in the watch industry and more than 10 years of
experience in jewellery industry. The company at present has three
showrooms two Titan showrooms and one Tanishq showroom.
Recent Results
For FY2014, the firm has reported a provisional operating income
of INR30.06 crore and an operating profit of INR1.82 crore as
against an operating income of INR33.90 crore and an operating
profit of INR1.85 crore for FY2013.
UNIBIC BISCUITS: ICRA Reaffirms B+ Rating on INR6cr LT FB Limits
----------------------------------------------------------------
ICRA has reaffirmed the long term rating at [ICRA]B+ assigned to
INR16.00 crore fund based bank facilities of Unibic Biscuits India
Private Ltd. ICRA has also reaffirmed the short term rating at
[ICRA]A4 assigned to INR2.50 crore non-fund based facilities of
UBIPL.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Fund
based limits 6.00 [ICRA]B+ (reaffirmed)
Short term Non-
Fund based limits 2.50 [ICRA]A4 (reaffirmed)
The ratings reaffirmation continues to be constrained by high
competitive intensity of the biscuit industry in India, with
presence of numerous established players as well as a large
unorganised market, UBIL's relatively limited brand presence
domestically, and its relatively modest scale of operations. These
factors have led to high selling and distribution expense for the
company in the form of freight costs, discounts to dealers,
advertising and sales commission, thereby leading to consistent
operating losses and stretched liquidity profile. The losses,
along with the high working capital intensity of the business have
led to continued reliance on funding support, which is being met
by equity infusion from Private Equity investors. The ratings also
take into consideration the company's exposure to foreign exchange
fluctuations as export revenues remain un-hedged. Further, the
company is planning a capex in the near future to the tune of
INR8.5 crore funded by INR6 Cr of debt which may further stretch
the debt coverage indicators. However, the ratings take strength
from the established 'Unibic' brand in global markets, company's
association with established players such as Cafe Coffee Day, Food
Bazaar and PepsiCo to manufacture private label products in India,
growth in the market for premium cookies and health snacks in
India, and the experienced management team in place. Further, 48%
growth in revenues during FY14 has resulted in decrease over head
cost and improvement in operational losses; coupled with positive
outlook for FY2015 backed by strong domestic demand. Moreover,
controlling stake held by private equity player Peepul Capital
LLC, ensuring capital infusion to fund operational losses.
UBIL was incorporated July 2004, with an initial investment of
INR15 Cr, as the Indian subsidiary of the fourth largest
Australian cookie maker, Unibics Australia. The company was
currently acquired by the private equity player - Peepul Capital
LLC. UBIL has a manufacturing facility in Bangalore, Karnataka,
and specializes in the production of a range of premium cookies
including specialty Australian and European cookies, centre filled
products and niche products such as the Health Snacks range. The
company has operations in India, as well as exports to Australia,
Dubai and China. In India, the company also sells products under
private labels like 'Tasty Treats' for Food Bazaar and cookies for
Cafe Coffee Day.
Recent Results
The company has recorded an operating income of INR74.58 Cr in
FY14 with a net loss of INR8.24 Cr as opposed to an operating
income of INR50.64 Cr and net loss of INR32.91 Cr for the
financial year 2012-2013.
UNITED COMPOSHEETS: ICRA Reaffirms B Rating on INR6cr Bank Loan
---------------------------------------------------------------
ICRA has reaffirmed its long-term rating of [ICRA]B on the INR6.00
crore1 fund-based bank facilities of United Composheets Private
Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term fund-based 6.00 [ICRA]B; reaffirmed
bank facilities
ICRA's rating on UCPL continues to remain constrained by the
company's modest scale of operations and low profitability on
account of the company being a tier-2/tier-3 supplier to original
equipment manufacturers (OEMs), as well as significant client
concentration as its top three clients contributed to about 65% of
the company's operating income in 2013-14. The ratings also take
into account the limited financial flexibility of the company
owing to its low net-worth, low accruals and high working capital
intensity. The company's working capital intensity has increased
steadily over the past three years which coupled with revenue
growth has resulted in stretched liquidity as reflected in high
utilization of working capital limits and stretched creditors.
Increase in working capital borrowings coupled with debt funded
capacity expansion undertaken during 2013-14 at a new unit in
Ghaziabad has resulted in weakened capital structure as reflected
in gearing of 2.8x and TOL/TNW of 4.6x as on March 31, 2014. ICRA
further takes note of the likelihood of future debt funded
capacity expansion at the new unit, the scale and funding mix of
which, will have a key bearing on the company's credit metrics.
The rating however, favorably factors in the promoter's experience
of more than a decade in auto components manufacturing business
and the company's long and stable relationship with clients like
Denso India Limited, Trelleborg Automotive India Private Limited,
Minda Industries Limited, etc.
Going forward the ability of the company to improve its
profitability and utilize the additional capacities adequately
while managing its working capital requirements efficiently, will
be the key rating sensitivities.
Incorporated in 1998, UCPL is promoted by two brothers, Mr. Jinesh
Kumar Tyagi and Mr. Naresh Kumar Tyagi. The company is engaged in
manufacturing sheet metal components for electrical, electronic
and automotive applications. The company currently has two
manufacturing units in Ghaziabad while the company's unit in Pune
was closed during 2013-14.
The company reported, on a provisional basis, an Operating Income
(OI) of INR16.60 crore and Profit before tax (PBT) of INR0.35
crore in 2013-14 as compared to an OI of INR15.22 crore and PBT of
INR0.24 crore in the previous year.
VEGA INFRASTRUCTURES: CRISIL Puts D Rating on INR130MM Term Loan
----------------------------------------------------------------
CRISIL has assigned its 'CRISIL D' rating to the bank facilities
of Vega Infrastructures.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Long Term Loan 130 CRISIL D
Proposed Long Term 10 CRISIL D
Bank Loan Facility
The rating reflects regular instances of delay by VGI in meeting
its debt obligations; the delays were caused by the firm's weak
liquidity on account of delay in commencement of its shopping
mall-cum-commercial complex, leading to minimal cash flows from
lease rentals and sales receipts.
VGI's profitability hinges on timely leasing/sale of stores, and
the firm is exposed to high offtake risk; also, it has a below-
average financial risk profile. However, the firm benefits from
the extensive experience of its partners in the real estate
industry.
VGI is a partnership firm, with Mr. Gurdeep Singh Sethi and Mr.
Vikas Mahajan as partners. It is engaged in commercial real estate
development in Punjab.
VGI reported book profit of INR0.7 million on net sales of INR1.1
million for 2012-13 (refers to financial year, April 1 to
March 31).
=================
I N D O N E S I A
=================
SMARTFREN TELECOM: Fitch Ups IDR603BB Bond Rating to 'CCC(idn)'
---------------------------------------------------------------
Fitch Ratings has upgraded Indonesia-based PT Smartfren Telecom
Tbk's (Smartfren) National Long-Term Rating to 'CCC(idn)' from
'CC(idn)'. At the same time, Fitch has upgraded Smartfren's
IDR603 billion bond to 'CCC(idn)' from 'CC(idn)'.
The bond, originally IDR675bn in size, was issued in 2007 by PT
Mobile-8 Telecom Tbk.
'CCC' National Ratings denote that default is a real possibility.
Capacity for meeting financial commitments is solely reliant upon
sustained, favorable business or economic conditions.
Key Rating Drivers
Sustained EBITDA Improvement: The upgrade follows Smartfren's
gradual improvement in EBITDA generation as its subscriber base
grows. Smartfren expects to generate positive EBITDA in 2014 (1H14
EBITDA: IDR48bn), after sustaining negative EBITDA since 2008.
However, Fitch believes that the company's liquidity position
remains precarious, notwithstanding the improvement in EBITDA
generation. The company will continue to rely on external sources
of funding to meet its loan repayment and capex needs, and we
expect its EBITDA/interest coverage ratio will remain below 1.0x
at least until 2015.
Reliance on Mandatory Convertible Bonds: Smartfren is likely to
rely on the issuance of mandatory convertible bonds (MCB) in the
next 12-18 months to meet its loan repayment and capex needs,
given that EBITDA will continue to fall short of interest
expenses. The company has obtained shareholders' approval to issue
a second series of MCB of up to IDR9trn, out of which IDR1trn was
issued in the first half of 2014.
Uncertain Sources of Funding: Fitch does not factor in any future
equity-related injections, such as mandatory convertible bond
issuance, into Smartfren's ratings despite the successful issuance
of a first series of MCB worth IDR4.7trn followed by the partial
IDR1trn issuance of the second series. Fitch's analysis does not
rely on further similar cash injections as the willingness and
ability of these bond investors to continue to fund Smartfren
cannot be assessed, particularly given the company's low equity
value.
In general, due to the volatility and uncertainty of equity
valuations, Fitch does not give credit for future equity
injections unless there is a very high degree of certainty about
future receipt of funds.
Limited Financial Flexibility: Smartfren's funding flexibility
remains restricted because of the company's weak metrics. Access
to external funding has been limited to facilities from China
Development Bank and First Anglo Financial. Raising external funds
will be challenging because the covenants for its US dollar notes
prevent the company from raising new loans of more than USD10m
without the consent from more than 51% of bondholders.
Possible Partnership with BTel: We expect consolidation among code
division multiple access (CDMA) operators to happen within the
next 12-18 months. Compared with the dominant GSM operators,
Smartfren and PT Bakrie Telecom Tbk (BTel; Restricted Default)
continue to struggle to gain meaningful market share and face
liquidity problems at current tariff levels. Both companies are
currently discussing a possible partnership to strengthen their
market positions.
Rating Sensitivities
Positive: Future developments that may, individually or
collectively, lead to positive rating action include:
-- The company's ability to fund its operations without any
reliance on further MCB issuance
Negative: Future developments that may, individually or
collectively, lead to negative rating include:
-- Weakening liquidity or operating performance such that the
company's ability to meet obligations appears unlikely
=========
N A U R U
=========
NAURU: Wins Court Case vs Hedge Fund; Gets Access to Frozen Money
-----------------------------------------------------------------
Jamelle Wells at ABC News reports that the financially-strapped
government of Nauru has won a court case that could see money from
frozen bank accounts in Australia released within a week.
In 2012, a court ruled that Nauru owed AUD16 million to US-based
fund manager Firebird, the report relates.
Nauru has not paid any of the money and the debt is now
AUD30 million, says ABC News.
When Firebird lodged a NSW Supreme Court case to try to recoup the
money, Nauru's bank accounts in Australia were frozen, according
to the report.
ABC News says the court has dismissed the case and given Firebird
a week to appeal.
The decision means Nauru could have access to about 30 Westpac
bank accounts in Australia, the report notes.
It will still have to repay the debt to Firebird, says ABC News.
Last month Nauru's finance minister David Adeang revealed the
country was out of money and services would soon start shutting
down, including those for refugees, ABC News recalls.
ABC News relates that in an affidavit, Mr. Adeang told the court
that the island would shortly run out of cash, after making its
latest round of government salary payments late last month.
The minister said Nauru would not be able to make any further
salary payments, which will affect almost half of Nauru's
population who are employed by the government, and have a large
flow on impact to the island's tiny economy, ABC News adds.
====================
S O U T H K O R E A
====================
DONGBU GROUP: Creditors OK Unit's Debt Restructuring Program
------------------------------------------------------------
Choi Kyong-ae at The Korea Times reports that Dongbu Group
Chairman Kim Joon-ki will lose management control over the
construction-to-semiconductor conglomerate after its creditors
agreed to put its flagship unit under a restructuring program, the
Korea Development Bank (KDB) said on October 6.
"On Thursday, nine creditor banks reached an agreement to push for
a program to restructure the debt-ridden Dongbu Steel. They will
sign a pact with Dongbu Steel by Nov. 6 to launch the program,"
the report quotes a KDB spokesman as saying. KDB is the main
creditor of Dongbu Group.
If Dongbu Steel accepts the decision, the creditors are expected
to open a broad review of the company's operations and to closely
monitor its businesses, he said, the report relays. "Upon the
company's acceptance of the creditors-led revival plan, Kim will
lose his control of the group."
The Korea Times relates that under the restructuring plan, all the
loans extended by the nine creditors will be rolled over to Dec.
31, 2018. The report says fresh loans worth KRW500 billion($470
million) will be available from the creditors. Among other
measures, every 100 existing shares held by Kim and other large
shareholders will be reduced to one share in a capital reduction,
while every four shares held by individual shareholders will be
turned into one, the report relates.
"A drastic restructuring is essential for the group to remain a
going concern. The group's management has completely failed given
it is impossible to pay back its entire borrowings despite debt
rollovers and fresh loans with lower interest rates," KDB said in
the statement, the report relays.
So a hefty capital reduction will be applied for large
shareholders, including Kim, to minimize the impact on small
shareholders, KDB, as cited by The Korea Times, added. Creditors
of the troubled STX and Kumho Asiana Group also adopted the same
100:1 capital reduction for their shares in restructuring, the
statement said.
Dongbu Steel is already suffering capital erosion and the
preferred rights to buy back shares in Dongbu affiliates won't be
allowed to Kim due to his mismanagement, KBD said, the report
relays.
Dongbu Group borrowed about KRW3.6 trillion to diversify its
business portfolio into semiconductor and steel businesses. But
the businesses now suffer liquidity problems after they were hit
hard by the 2008 financial crisis, the report notes.
Dongbu is a South Korean conglomerate corporation which operates
through seven business segments with 42 subsidiaries and 35,000
employees. The Group produces industry, chemical, shipping,
insurance and financial products.
*********
Tuesday's edition of the TCR-AP delivers a list of indicative
prices for bond issues that reportedly trade well below par.
Prices are obtained by TCR-AP editors from a variety of outside
sources during the prior week we think are reliable. Those
sources may not, however, be complete or accurate. The Tuesday
Bond Pricing table is compiled on the Friday prior to
publication. Prices reported are not intended to reflect actual
trades. Prices for actual trades are probably different. Our
objective is to share information, not make markets in publicly
traded securities. Nothing in the TCR-AP constitutes an offer
or solicitation to buy or sell any security of any kind. It is
likely that some entity affiliated with a TCR-AP editor holds
some position in the issuers' public debt and equity securities
about which we report.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR-AP. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com
Friday's edition of the TCR-AP features a list of companies with
insolvent balance sheets obtained by our editors based on the
latest balance sheets publicly available a day prior to
publication. At first glance, this list may look like the
definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical
cost net of depreciation may understate the true value of a
firm's assets. A company may establish reserves on its balance
sheet for liabilities that may never materialize. The prices at
which equity securities trade in public market are determined by
more than a balance sheet solvency test.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Asia Pacific is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Valerie U. Pascual, Marites O. Claro, Joy A. Agravante, Rousel
Elaine T. Fernandez, Julie Anne L. Toledo, and Peter A. Chapman,
Editors.
Copyright 2014. All rights reserved. ISSN: 1520-9482.
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*** End of Transmission ***