/raid1/www/Hosts/bankrupt/TCRAP_Public/141029.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
Wednesday, October 29, 2014, Vol. 17, No. 214
Headlines
A U S T R A L I A
ATLAS IRON: Moody's Downgrades Corporate Family Rating to B3
BUNNY BITES: Creditors to Pursue Missing Millions
TUFFSTUFF (QLD): First Creditors' Meeting Set For Nov. 6
C H I N A
CHINA HONGQIAO: S&P Puts 'BB' Rating on Proposed US$ Sr. Notes
HIDILI INDUSTRY: Moody's Affirms Caa3 Sr. Unsecured Debt Rating
I N D I A
A. S. CARRIERS: CRISIL Ups Rating on INR1.08BB Term Loan to 'B'
BELGIUM ALUMINIUM: CRISIL Cuts Rating on INR127MM Cash Loan to B+
BURGUNDY LIFESTYLE: CRISIL Cuts Rating on INR62.5MM LOC to 'D'
ERNAD CONSTRUCTIONS: CRISIL Reaffirms B- Rating on INR55MM Loan
GOLDSTONE INFRATECH: CRISIL Ups Rating on INR200MM Cash Loan to B
GOODLUCK PETROLEUM: CRISIL Cuts INR310.5M Cash Credit Rating to D
IGNIS INTERNATIONAL: CRISIL Rates INR30MM Bank Loan at 'B+'
LEARNINGLINKS PUBLISHING: CRISIL Reaffirms B+ Cash Credit Rating
MORINDA RICE: CRISIL Reaffirms B+ Rating on INR50MM Cash Credit
POSITIVE CHIP: CRISIL Assigns 'B' Rating to INR49MM Term Loan
RAGHAV RAMMING: CRISIL Reaffirms B+ Rating on INR65MM Term Loan
S.T.S. & CO: CRISIL Assigns 'B' Rating to INR52MM Credit Limit
SATYAM COMPUTER: Court to Fix Date For Verdict on October 30
SHIVNATH TRACTORS: CRISIL Ups Rating on INR50MM Cash Loan From B+
SRI JAGANNATH: CRISIL Ups Rating on INR180MM Cash Loan From 'B'
SRI VENKATRAMA: CRISIL Reaffirms B+ Rating on INR120MM Cash Loan
SUDALAGUNTA SUGARS: CRISIL Ups INR569.8MM Cash Loan Rating to B+
UNIQUE STAR: CRISIL Reaffirms B Rating on INR20MM Term Loan
VENUS CONTROLS: CRISIL Cuts Rating on INR400MM Cash Credit to D
YASH PHARMA: CRISIL Ups Rating on INR85MM Cash Credit to B+
I N D O N E S I A
ADARO INDONESIA: Fitch Affirms 'BB+' Issuer Default Ratings
ANEKA TAMBANG: Moody's Withdraws B2 Corporate Family Rating
METROPOLIS PROPERTINDO: S&P Lowers CCR to 'B-' on Weak Execution
N E W Z E A L A N D
VINCENT AVIATION: New Zealand Operations Go Into Liquidation
P H I L I P P I N E S
SECURITY BANK: S&P Assigns 'B' Short-Term Issuer Credit Rating
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A U S T R A L I A
=================
ATLAS IRON: Moody's Downgrades Corporate Family Rating to B3
------------------------------------------------------------
Moody's Investors Service has downgraded Atlas Iron Limited's
corporate family rating to B3. At the same time Moody's has
lowered Atlas' senior secured ratings to B3. The outlook on all
ratings is stable.
Ratings Rationale
"The rating downgrade reflects Moody's expectation for continued
weakness in iron ore prices that is exerting pressure on Atlas'
cashflow and margins", says Saranga Ranasinghe, a Moody's Analyst.
"We believe that the combination of the iron ore industry's
increased production capacity and slowing demand from China, will
keep prices suppressed into 2016. As a result, we have revised
Moody's price sensitivity for iron ore for the period through 2016
to a range of $75 - $85 per metric tonne -- (62% Fe)" adds
Ranasinghe who is also the lead Analyst for the company.
"The rating downgrade also considers the decrease in Atlas'
margins given the further downward pressure increasing supply is
placing on the 58% Fe products with significantly increased
discounts to the 62% Fe index price for the lower grade".
"Moody's acknowledges the cost rationalization initiatives taken
by Atlas, but the weakness in the operating environment means that
credit metrics will likely be pressured for the FY15 period and
will no longer sustain a financial profile that is consistent with
its previous rating".
The stable outlook reflects the adequate liquidity and the
diminishing execution risk and capital expenditure requirements
following the scheduled completion of the Mt. Webber project
development in FY 2015.
Atlas had AUD204 million of cash on hand at the end of
September 2014 and Moody's expect the company to maintain adequate
liquidity levels to offset the current weakness in iron ore
prices.
The rating and/or outlook could face negative pressure if
fundamentals for iron ore deteriorate further and beyond Moody's
expectations. The rating and/or outlook could also face negative
pressure if there are any material cost increases and/or delays to
Atlas' project delivery, leading to concerns about the company's
ongoing production profile, liquidity, and/or credit metrics.
Specifically, an inability to maintain debt-to EBITDA below 7.0x
on a consistent basis could pressure the outlook and/or rating.
Moody's would also look to the company maintaining an adequate
liquidity buffer to cover its debt service obligations.
The rating and/or outlook would face positive pressure if there
was a marked and sustained improvement in iron ore prices leading
to an improvement in margins. Specifically, Moody's would look to
leverage improving to below 5.0x on an ongoing basis.
Atlas Iron Limited (Atlas), headquartered in Perth, Australia, is
an iron ore producer and developer focused on the North Pilbara
region of Western Australia. In FY14, Atlas shipped 10.9Mt of iron
ore and generated revenues of around $1.1 billion.
The principal methodology used in this rating was Global Mining
Industry published in August 2014.
BUNNY BITES: Creditors to Pursue Missing Millions
-------------------------------------------------
Sarina Locke at ABC Rural reports that one year after a Queensland
vegetable processor collapsed, creditors met on October 28 to
pursue their missing millions.
Bunny Bites went into liquidation in mid 2013, and a committee of
five creditors met with the insolvency group Robson Cotter in
Brisbane on October 28 to decide the future of the company Bun
Jurgen trading as Bunny Bites.
Robson Cotter is the group charged with deciding whether creditors
have any claim, the report relates.
When Bunny Bites collapsed it owed nearly AUD10 million to about
100 companies, including vegetable growers, wholesalers and
packing companies, according to ABC Rural.
The largest creditor, Glen Moore's vegetable company in Tasmania,
was owed AUD1.25 million at the time, the report relays.
According to ABC Rural, the liquidator, Robson Cotter, reported
there was evidence the company traded while insolvent, and
borrowed money to maintain operations for up to two years.
In July 2013 the administrator found more than AUD5 million was
still owed to creditors following the sale of the business and key
assets to Veg Pro 4, ABC Rural recalls.
"The company has been clearly reliant on leverage and borrowing to
maintain its operations since at least 2011," a report to
creditors cited by ABC Rural said. "It is evident that the
company is insolvent and has traded and incurred additional debts
while insolvent."
Bunny Bites Foods was a Queensland-based vegetable processing
company. The Company went into voluntary administration in June
2013 owing nearly AUD10 million, ABC News disclosed.
TUFFSTUFF (QLD): First Creditors' Meeting Set For Nov. 6
--------------------------------------------------------
James Alexander Shaw -- jshaw@shawgidley.com.au -- and Jeffrey
Allan Shute -- jshute@shawgidley.com.au -- of Shaw Gidley were
appointed as administrators of Tuffstuff (QLD) Pty Ltd on
Oct. 27, 2014.
A first meeting of the creditors of the Company will be held at
Shaw Gidley, Level 6, 384 Hunter Street, in Newcastle, New South
Wales, on Nov. 6, 2014, at 3:00 p.m.
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C H I N A
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CHINA HONGQIAO: S&P Puts 'BB' Rating on Proposed US$ Sr. Notes
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB' long-term
issue rating and 'cnBBB-' long-term Greater China regional scale
rating to a proposed issue of U.S. dollar-denominated senior
unsecured notes by China Hongqiao Group Ltd. (Hongqiao:
BB/Stable/--; cnBBB-/--). The company intends to use the issuance
proceeds for general corporate purpose.
The rating on Hongqiao reflects the company's exposure to China's
highly cyclical and volatile aluminum market and its debt-funded
expansion. Hongqiao's low production costs due to its self-owned
captive power plants temper these weaknesses. S&P expects the
company to maintain large capital expenditure over the next 12-24
months, at least, in contrast to S&P's previous assumption that
its expansion will slow down. Nevertheless, Hongqiao's large cash
holdings give the company some financial buffer to maintain the
existing rating. S&P expects the company's ratio of funds from
operations (FFO) to debt to be around 21% in 2014, which is in
line with about 20% in 2013.
In S&P's view, the financial headroom for the existing rating has
reduced because of Hongqiao's significant expansion. Any capital
spending that is larger than S&P expects or unfavorable bauxite
and aluminum price movements will have a negative impact on the
corporate CREDIT RATING. A downgrade trigger could be the ratio
of FFO to total debt dropping to below 20% on a sustainable basis.
HIDILI INDUSTRY: Moody's Affirms Caa3 Sr. Unsecured Debt Rating
---------------------------------------------------------------
Moody's Investors Service has affirmed Hidili Industry
International Development Limited's Caa2 corporate family rating.
At the same time, Moody's has affirmed the company's Caa3 senior
unsecured debt rating.
The outlook for the ratings remains negative.
Ratings Rationale
"The ratings affirmation reflects Moody's expectation that the
recovery prospects for Hidili's creditors have not improved,
following the completion of Hidili's exchange offer for the USD400
million, 8.625% senior notes due 2015," says Simon Wong, a Moody's
Vice President, Senior Credit Officer and Manager.
"Hidili's capital structure is still highly leveraged, and is
unlikely to improve over the next 12 months," adds Wong.
On 22 October 2014, Hidili completed its debt exchange exercise
and purchased USD197.2 million of bonds at the distressed price of
USD700 per USD1,000 principal amount, including the consent
payment of USD20 per USD1000 principal amount.
The company used bank borrowings and existing cash on hand to fund
the transaction.
However, the debt exchange exercise resulted in an insignificant
3% reduction of its total debt.
In addition, Hidili's liquidity position is under pressure.
Moody's expects Hidili's EBITDA to remain negative over the next
12 months; a situation which will increase its external funding
requirements.
Moody's notes that Hidili's operating environment remains weak.
The average selling price for its clean coal fell 18.5% year-on-
year to RMB863/ton in 1H 2014 from RMB1,059/ton in 1H 2013.
Moody's expects that prices will remain depressed over the next 12
months.
Moody's also expects that Hidili's short-term debt will exceed its
combined pledged and unpledged cash for the financial year ended
31 December 2014.
While the company exhibits a good track record of rolling over
short term debt, its refinance risk is high, given its weak
operating performance, the sluggish industry outlook, and the
impairment of mining assets provided to banks as collateral.
The senior notes are rated Caa3, reflecting the high probability
of default, and the high level of economic loss when compared to
the original payment promise for the notes.
The negative outlook reflects the company's weak liquidity
position in the absence of any material asset sales and the fact
that its operating model has weakened sharply.
Upgrade pressure over at least the next 12 to 18 months is
unlikely, given the company's weak profitability and liquidity
positions.
Further downgrade pressure will emerge if the company does not
meet its debt payment obligations.
The principal methodology used in this rating was Global Mining
Industry published in August 2014.
Hidili Industry International Development Ltd is a vertically
integrated coal mining enterprise in southwest China. It supplies
coking coal products to the domestic steel industry.
The company -- formerly known as Panzhihua City Sanlian Industrial
Co Ltd -- was established in 2000 as a coal trading business. It
was transformed into a coal mining company, after its first
acquisition of five mines, and coal washing and coking facilities.
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I N D I A
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A. S. CARRIERS: CRISIL Ups Rating on INR1.08BB Term Loan to 'B'
---------------------------------------------------------------
CRISIL has upgraded its rating on the long-term bank facilities of
A. S. Carriers Pvt Ltd to 'CRISIL B/Stable' from 'CRISIL D'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Long Term Loan 1,080 CRISIL B/Stable (Upgraded
from 'CRISIL D')
The rating upgrade reflects ASC's improving liquidity on the back
of steady lease-rental income that has translated into timely
servicing of corresponding debt over the past four months ended
August 31, 2014 and further supported by divestment of low-
yielding assets. ASC is expected to sell the non-leased assets by
the end of October 2014. With the funds thus generated being
utilised to pare its debt to INR560 million from INR1.1 billion,
the gearing is expected to reduce to around 2 times by March 31,
2015, from 3.6 times as on March 31, 2014. Lease rentals from the
remaining assets are expected to sufficiently cover the reduced
interest costs and repayment obligations.
The rating reflects ASC's weak financial risk profile, marked by
high gearing and inadequate debt protection metrics, and modest
cash accruals. These rating weaknesses are partially offset by the
company's established position in the domestic organised
warehousing business.
Outlook: Stable
CRISIL believes that ASC's financial risk profile will remain
constrained over the medium term by its large fixed financial
obligations, and modest cash accruals. The outlook may be revised
to 'Positive' if sizeable inflow of funds results in substantial
and sustainable improvement in liquidity for ASC. Conversely, the
outlook may be revised to 'Negative' if significant delays in
rental receivables from tenants constrain cash flows, or if any
large debt-funded capital expenditure weakens it's overall
financial risk profile.
ASC was established in 1993. Till 2006-07 (refers to financial
year, April 1 to March 31), the company carried out clearing and
forwarding services for Hindustan Unilever Ltd (rated 'CRISIL
AAA/Stable'). ASC is currently in the business of constructing and
leasing out industrial warehouses. ASC has warehouse properties in
Bengaluru (Karnataka), Hosur, and Chennai (both in Tamil Nadu),
with a combined storage space of 1.23 million square feet.
For 2013-14, ASC, on a provisional basis, reported a net loss of
INR21.8 million on net sales of INR212.4 million (Rs.42.8 million
and INR216.9 million, respectively, for 2012-13).
BELGIUM ALUMINIUM: CRISIL Cuts Rating on INR127MM Cash Loan to B+
-----------------------------------------------------------------
CRISIL has downgraded its ratings on the bank facilities of
Belgium Aluminium & Glass Industries Pvt Ltd to 'CRISIL
B+/Stable/CRISIL A4' from 'CRISIL BB-/Stable/CRISIL A4+'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 300 CRISIL A4 (Downgraded from
'CRISIL A4+')
Cash Credit 127 CRISIL B+/Stable (Downgraded
from 'CRISIL BB-/Stable')
Inland/Import 145 CRISIL A4 (Downgraded from
Letter of Credit 'CRISIL A4+')
The rating downgrade reflects deterioration in BAGIPL's financial
risk profile and liquidity on account of substantial increase in
its working capital requirements. Company's working capital
requirements increased sharply with gross current asset days of
384 as on March 31, 2014, compared to 282 as on March 31, 2013.
The company has witnessed large inventory holding of around 368
days as on March 31, 2014, compared to 239 days as on March 31,
2013, due to slow execution of some projects. The company has
relied on bank debt to fund its incremental working capital
requirements, which has resulted in deterioration in gearing
levels from 0.6 times as on March 31, 2013, to 4.0 times as on
March 31, 2014. Further, increasing working capital requirements
have also resulted in moderate utilization of bank line at an
average of 75 percent over the last 12 months ended August 2014.
Also company's modest net worth levels of INR39 million as on
March 31, 2014, limits its ability to meet exigency.
The ratings continue to reflect BAGIPL's susceptibility of its
revenue and profitability to offtake by the real estate sector,
its working-capital-intensive nature of operations and its weak
financial risk profile. These rating weaknesses are mitigated by
extensive experience of the company's promoters in the
infrastructure industry and support from group company.
Outlook: Stable
CRISIL believes that BAGIPL will continue to benefit over the
medium term from its promoters' extensive industry experience and
their strong technical and financial support. The outlook may be
revised to 'Positive' if the company reports a significant growth
in its revenues and profitability, and managing its working
capital cycle efficiently, resulting in improvement in its
financial risk profile and liquidity. Conversely, the outlook may
be revised to 'Negative' if BAGIPL's revenues or margins decline
significantly, or if its working capital cycle lengthens further,
leading to pressure on its liquidity and financial risk profile.
BAGIPL, established in 2007, is engaged in facade engineering; it
designs, fabricates, and installs aluminium and glazed structures.
The company started its operations in February 2012. BAGIPL is
promoted by Dr. J R Gangaramani, who has cofounded the United Arab
Emirates-based Al Fara'a Group, which has an established position
in the infrastructure industry.
BAGIPL has its registered office in Mumbai and manufacturing unit
at Rabale (Maharashtra) and Manesar (Haryana).
BURGUNDY LIFESTYLE: CRISIL Cuts Rating on INR62.5MM LOC to 'D'
--------------------------------------------------------------
CRISIL has downgraded its rating on the bank facilities of
Burgundy Lifestyle Private Limited to 'CRISIL D/CRISIL D' from
'CRISIL B+/Stable/CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 52 CRISIL D (Downgraded from
'CRISIL B+/Stable')
Letter of Credit 62.5 CRISIL D(Downgraded from
'CRISIL A4')
Packing Credit 34.5 CRISIL D (Downgraded from
'CRISIL A4')
The rating downgrade reflects consistent overdrawals for over 30
days in the group's bank facilities owing to stretched liquidity.
The ratings also reflect Burgundy's working-capital-intensive and
small scale of operations in the intensely competitive ready-made
garments industry. These rating weaknesses are partially offset by
the extensive experience of the company's promoters in the garment
industry.
Burgundy's production facilities were initially set up by Prime
Textiles Ltd in Tirupur (Tamil Nadu). In 2008, the entire
production facility was acquired by the Kolkata (West Bengal)-
based Jhawar group. Burgundy manufactures high-end T-shirts and
innerwear under various brands, including Burgundy. It also
manufactures products under the brands of its customers.
Burgundy reported a profit after tax (PAT) of INR0.4 million on
net sales of INR837.8 million for 2013-14, as against PAT of
INR1.9 million on net sales of INR988.6 million for 2012-13.
ERNAD CONSTRUCTIONS: CRISIL Reaffirms B- Rating on INR55MM Loan
---------------------------------------------------------------
CRISIL's ratings on the bank facilities of Ernad Constructions
Company Pvt Ltd continue to reflect its below-average financial
risk profile, marked by small net worth and below-average debt
protection metrics along with large working capital requirements,
commensurate with its inventory and stretched receivables. The
ratings also factor in the company's small scale of operations,
susceptibility to intense competition in the civil construction
segment, and geographical concentration in the revenue profile.
These rating weaknesses are partially offset by the extensive
industry experience of the promoters and a moderate order book.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 25 CRISIL A4 (Reaffirmed)
Cash Credit 55 CRISIL B-/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that Ernad will continue to benefit over the
medium term from its promoters' extensive industry experience. The
outlook may be revised to 'Positive' if the company significantly
scales up its operations and maintains its profitability, thereby
leading to better-than-expected cash accruals and improved
liquidity. Conversely, the outlook may be revised to 'Negative' if
Ernad's financial risk profile and liquidity deteriorate, most
likely because of larger-than-expected with sizeable working
capital requirements, delays in project execution, low cash
accruals, or large debt-funded capital expenditure (capex).
Update
Ernad's revenue of INR69 million in 2013-14 (refers to financial
year, April 1 to March 31) registered healthy growth of around 40
per cent, supported by its moderate order book. The company also
maintained its comfortable operating margin of over 25 per cent
over the past two years. Ernad benefits from healthy revenue
visibility over the medium term, with an order book of INR214
million. CRISIL believes that the company will maintain stable
revenue and operating margin over the medium term, backed by its
moderate order book.
Ernad's financial risk profile is marked by a small net worth of
INR47.8 million as on March 31, 2014, despite the promoters'
equity infusion of INR20 million during 2013-14. The company has
average debt protection metrics, with a net cash accruals to total
debt (NCATD) ratio of around 10 per cent and interest coverage
ratio of 2.25 times for 2013-14. The financial risk profile is
marginally supported by moderate gearing of 1.59 times as on March
31, 2014. CRISIL expects Ernad's financial risk profile to be
constrained by its small net worth over the medium term.
Ernad has large working capital requirements, with inventory
estimated at 430 days and debtors at 125 days as on March 31,
2014. The company's liquidity remains stretched, with modest cash
accruals, working-capital-intensive operations, and almost full
bank limit utilisation. CRISIL believes that Ernad's liquidity
will remain stretched over the medium term, because of its modest
accruals and working-capital-intensive operations.
Ernad was established as a proprietorship firm in 1982 by Mr. M K
Ali, and reconstituted as a private limited company in August
2004. The founder and his family manage the company's daily
operations. Ernad is a civil contractor and undertakes civil
construction work (landscaping, and construction of buildings and
roads) primarily in Kerala.
GOLDSTONE INFRATECH: CRISIL Ups Rating on INR200MM Cash Loan to B
-----------------------------------------------------------------
CRISIL has upgraded its ratings on the long-term bank facilities
of Goldstone Infratech Limited to 'CRISIL B/Stable/CRISIL A4' from
'CRISIL D/CRISIL D'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 220 CRISIL A4 (Upgraded from
'CRISIL D')
Cash Credit 200 CRISIL B/Stable (Upgraded
from 'CRISIL D')
Letter of Credit 100 CRISIL A4 (Upgraded from
'CRISIL D')
Standby Line of Credit 20 CRISIL B/Stable (Upgraded
from 'CRISIL D')
Term Loan 110 CRISIL B/Stable (Upgraded
from 'CRISIL D')
The upgrade reflects the timely servicing of debt by GIL over the
last five months ended September 2014. The upgrade also reflects
CRISIL's belief that GIL will continue to service its debt in a
timely manner, with its cash accruals expected to be sufficient to
meet its maturing debt obligations.
The ratings continue to reflect GIL's large working capital
requirements and the susceptibility of its profitability margins
to volatility in raw material prices and fluctuations in foreign
exchange rates. These rating weaknesses are partially offset by
GIL's established position in the polymer insulator industry, and
its longstanding relations with customers.
Outlook: Stable
CRISIL believes that GIL will continue to benefit over the medium
term from its promoters extensive industry experience, and its
longstanding relations with customers. The outlook may be revised
to 'Positive' if the company registers a substantial and sustained
increase in its scale of operations and profitability margins, or
there is a sustained improvement in its working capital cycle.
Conversely, the outlook may be revised to 'Negative' in case of a
steep decline in the company's profitability margins, or
significant deterioration in its capital structure caused most
likely by a stretch in its working capital cycle.
GIL manufactures polymer insulators that are used in power
transmission and distribution. The company's manufacturing unit is
located in Hyderabad.
GOODLUCK PETROLEUM: CRISIL Cuts INR310.5M Cash Credit Rating to D
-----------------------------------------------------------------
CRISIL has downgraded its ratings on the bank facilities of
Goodluck Petroleum Company Pvt Ltd to 'CRISIL D/CRISIL D' from
'CRISIL BB-/Stable/CRISIL A4+'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 310.5 CRISIL D (Downgraded from
'CRISIL BB-/Stable')
Letter of Credit 49.5 CRISIL D (Downgraded from
'CRISIL A4+')
The rating downgrade reflects GPCPL's overdrawn cash credit limits
for more than 30 consecutive days; the limits have been overdrawn
because of the company's weak liquidity. The company management
has not been cooperating with CRISIL and has not provided clarity
on the reason behind the weakening of its liquidity.
GPCPL remains vulnerable to cyclical downturns given its small
scale of operations. Furthermore, it has a below-average financial
risk profile, marked by average gearing and weak debt protection
metrics, working-capital-intensive operations, and low
profitability. However, the company benefits from the extensive
experience of its promoters in the business of recycling used and
waste oils.
GPCPL reprocesses and recycles used and waste oils. The company
was incorporated in 2005 as Vardhaman Rerolling Mill Pvt Ltd. Its
name was changed to the current one in 2008, when it entered the
business of reprocessing and recycling used and waste oils. It
commenced commercial operations in February 2009. GPCPL has the
capacity to refine 68,000 kilolitres of used oil per annum.
IGNIS INTERNATIONAL: CRISIL Rates INR30MM Bank Loan at 'B+'
-----------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to
the bank facilities of Ignis International Industries Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term 30 CRISIL B+/Stable
Bank Loan Facility
Cash Credit 10 CRISIL B+/Stable
Letter of Credit 85 CRISIL A4
The ratings reflect IIIPL's modest scale of operations, and it's
below average financial risk profile marked by low net worth and
leveraged capital structure coupled with susceptibility of its
operating profitability to fluctuations in raw material prices and
foreign exchange. These rating weaknesses are partially offset by
the extensive experience of IIIPL's promoters in the steel
industry and its established relationship with its customers on
the back of value additions in product offered.
Outlook: Stable
CRISIL believes that IIIPL will continue to benefit over the
medium term from its promoters' extensive industry experience and
established relationship with customers. The outlook may be
revised to 'Positive' if the company's scale of operations
increases substantially, leading to large accretion to reserves or
if there is large equity infusion leading to improvement in its
financial risk profile. Conversely, the outlook may be revised to
'Negative' in case of decline in the company's operating margin,
or large working capital requirements, leading to deterioration in
its financial risk profile.
Established in 2011, IIIPL trades in ferrous and non-ferrous metal
products in the domestic market. The company is promoted by
Vadodara (Gujarat)-based Mohnot family and managed by Mr. Preet
Mohnot.
LEARNINGLINKS PUBLISHING: CRISIL Reaffirms B+ Cash Credit Rating
----------------------------------------------------------------
CRISIL's ratings on the bank facilities of LearningLinks
Publishing House Pvt Ltd continue to reflect LLPL's highly
working-capital-intensive and small scale of operations. These
rating weaknesses are partially offset by the extensive experience
of LLPL's promoters in the publishing industry, and its moderate
financial risk profile, marked by average gearing and moderate
debt protection metrics.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 50 CRISIL B+/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that LLPL will continue to benefit over the medium
term from its promoters' extensive industry experience. The
outlook may be revised to 'Positive' if there is substantial and
sustained increase in the company's revenue while it maintains its
operating margin, or if its working capital management improves.
Conversely, the outlook may be revised to 'Negative' if LLPL's
capital structure deteriorates, most likely due to lower-than-
expected margins or a substantial increase in its working capital
requirements.
Update
LLPL registered an 18 per cent year-on-year growth in its revenue
to around INR177 million in 2013-14 (refers to financial year,
April 1 to March 31); the revenue growth was driven by the
addition of new book sellers. The company's operating margin has
remained largely within 10 to 11 per cent in the past three years
due to intense competition in a highly fragmented industry.
LLPL's operations are highly working capital intensive as
reflected in its estimated gross current assets (GCAs) of 384 days
as on March 31, 2014; the GCA days have been at similar levels in
the past. The high GCA days are driven by the company's large
inventory of around 121 days and receivables cycle of 267 days.
Its average bank limit utilisation has been high at around 94 per
cent during the 12 months ended August 31, 2014.
LLPL's net worth is estimated to have remained small at around
INR35.6 million as on March 31, 2014. The company has contracted
large debt for funding its working capital requirements; this,
coupled with a small net worth, resulted in moderate gearing of
around 2.24 times as on March 31, 2014.
LLPL was incorporated in 2008. The company publishes education
text books for the Central Board of Secondary Education (CBSE),
the Indian Certificate of Secondary Education (ICSE), and various
state boards. It is promoted by Mr. R N Malhotra and his wife Mrs.
Suman Malhotra.
MORINDA RICE: CRISIL Reaffirms B+ Rating on INR50MM Cash Credit
---------------------------------------------------------------
CRISIL's rating on the long-term bank facilities of Morinda Rice &
Gen. Mills continues to reflect MRGM's small scale of operations,
and modest financial risk profile marked by small net worth and
high gearing. These rating weaknesses are partially offset by the
experience of MRGM's promoter in the rice milling industry.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 50 CRISIL B+/Stable (Reaffirmed)
Proposed Long Term 30 CRISIL B+/Stable (Reaffirmed)
Bank Loan Facility
Outlook: Stable
CRISIL believes that MRGM will continue to benefit over the medium
term from its promoter's extensive experience in the rice milling
industry. The outlook may be revised to 'Positive' if the firm
registers significant improvement in its revenue and profitability
or benefits from significant infusion of capital, resulting in an
improvement in its financial risk profile. Conversely, the outlook
may be revised to 'Negative' if MRGM undertakes a significantly
large debt-funded capital expenditure (capex) programme, or if its
financial risk profile deteriorates with increase in its working
capital requirement.
Update
MRGM registered a turnover of INR296 million for 2013-14 (refers
to financial year, April 1 to March 31), 22 per cent higher than
the past year, driven by healthy demand for non-basmati rice in
the market. Its operating margin improved to 4.8 per cent in 2013-
14 from 3.7 per cent in 2012-13. The firm's net profits and cash
accruals improved in 2013-14 as compared to 2012-13, but remained
low at INR2.8 million and INR6.7 million, respectively. The firm's
financial risk profile remains constrained by its large working
capital requirement vis-a-vis its modest accruals. The same
results in weak liquidity and high gearing. The firm had net worth
of INR21.2 million and gearing of 2.77 times, as on March 31,
2014. Its bank limits remain fully utilised. The firm incurred
capex of INR19.5 million in 2013-14, which included INR7.6 million
on trucks (funded by vehicle loans of INR6 million) and INR12
million on machinery and equipment, funded by capital infusion and
internal accruals. The firm has no major capex plans for the
medium term.
For 2013-14, MRGM reported profit before tax (PBT) of INR4.0
million on operating income of INR296 million; it had reported a
PBT of INR2.6 million on operating income of INR242 million for
2012-13.
MRGM was set up in 1981 as a proprietorship entity. It is promoted
by Mr. Prem Singh. It mills and processes paddy into non-basmati
rice. It has paddy milling capacity of 10 tonnes per hour at Ropar
district (Punjab).
POSITIVE CHIP: CRISIL Assigns 'B' Rating to INR49MM Term Loan
-------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable/CRISIL A4' ratings to the
bank facilities of Positive Chip Board India Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 49 CRISIL B/Stable
Proposed Long Term 29.5 CRISIL B/Stable
Bank Loan Facility
Cash Credit 10 CRISIL B/Stable
Foreign Exchange 1.5 CRISIL A4
Forward
The rating reflects PCPL's exposure to risks related to the
implementation and commissioning of its ongoing project, of
setting up a particle board manufacturing unit. The rating
weakness is partially offset by the promoters' extensive
experience in the plywood and laminates industries.
Outlook: Stable
CRISIL believes that PCPL will benefit over the medium term from
its promoters' extensive industry experience. The outlook may be
revised to 'Positive' if the company generates sizeable cash
accruals and improves its financial risk profile by stabilising
its operations before schedule and within the budgeted costs.
Conversely, the outlook may be revised to 'Negative' if PCPL's
liquidity is constrained by significant project time and/or cost
overruns, or significantly low cash accruals, with demand-side
pressure.
Incorporated in 2007, PCPL is setting up a facility to manufacture
pre-laminated particle boards, used to design furniture. The unit
could commence operations from April 2015.
RAGHAV RAMMING: CRISIL Reaffirms B+ Rating on INR65MM Term Loan
---------------------------------------------------------------
CRISIL's ratings on the bank facilities of Raghav Ramming Mass
Private Limited (RRMPL) continue to reflect the company's modest
scale of operations, risks relating to off-take from its new
capacity, working capital intensive nature of operations and
moderate financial risk profile marked by high gearing and subdued
debt protection metrics. These rating weaknesses are partially
offset by benefit that RRMPL derives from its established customer
base and extensive experience of its promoters in the steel and
allied products industry.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bill Discounting 2.5 CRISIL A4 (Reaffirmed)
under Letter of
Credit
Cash Credit 40.0 CRISIL B+/Stable (Reaffirmed)
Credit Limit Under 7.5 CRISIL B+/Stable (Reaffirmed)
Gold Card
Proposed Long Term 35.0 CRISIL B+/Stable (Reaffirmed)
Bank Loan Facility
Term Loan 65.0 CRISIL B+/Stable (Reaffirmed)
Outlook: Stable
CRISIL expects Raghav Ramming Mass Private Limited (RRMPL) to
benefit from its established customer base and promoters'
extensive experience in end user steel industry. The outlook may
be revised to 'Positive' if RRMPL stabilizes operations at its new
plant and generates healthy cash accruals sufficient to meet its
debt repayment obligations, while improving capital structure.
Conversely, the outlook may be revised to 'Negative' in case of
lower-than-expected profitability or turnover, or deterioration in
liquidity or financial profile on account of stretch in working
capital cycle.
RRMPL, incorporated in 2009, is promoted by the Jaipur based Kabra
family. RRMPL is engaged in the manufacture of ramming mass used
for coating the inner surface of induction furnaces. Mr. Rajesh
Kabra and Mr. Sanjay Kabra oversee the day to day operations of
the company. Currently RRMPL has a manufacturing capacity of 200
TPD and is in the process of setting up a capacity for additional
200 TPD.
For 2013-14 (refers to financial year, April 1 to March 31), RRMPL
reported, a profit after tax (PAT) of INR6.5 million on net sales
of INR215.4 million, against a PAT of INR4.9 million on net sales
of INR172.0 million for 2012-13.
S.T.S. & CO: CRISIL Assigns 'B' Rating to INR52MM Credit Limit
--------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable 'rating to the long-term
bank facilities of S.T.S. & Co.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Buyer Credit Limit 52 CRISIL B/Stable
Cash Credit 2.5 CRISIL B/Stable
The rating reflects STS's modest scale of operations, its exposure
to risks related to volatility in foreign exchange (forex) rates,
and its below-average financial risk profile, marked by a small
net worth and weak debt protection metrics. These rating
weaknesses are partially offset by the extensive experience of the
firm's promoters in the silk yarn trading business.
Outlook: Stable
CRISIL believes that STS will continue to benefit over the medium
term from the extensive industry experience of its promoters. The
outlook may be revised to 'Positive' if the firm's cash accruals
increase substantially, most likely due to better revenue and
profitability along with efficient working capital management.
Conversely, the outlook may be revised to 'Negative' in case of
adverse forex rate movements, impacting STS's revenue growth and
hence its cash accruals, or if its working capital management
deteriorates.
Established in 1976 as a partnership firm, and based in Bengaluru,
STS trades in raw and tussan silk yarn. The firm's operations are
managed by Mr. S. Mohanlal.
For 2013-14 (refers to financial year, April 1 to March 31), STS
reported a profit after tax (PAT) of INR1.5 million on net sales
of INR100.3 million, against a PAT of INR1.1 million on net sales
of INR102.8 million for 2012-13.
SATYAM COMPUTER: Court to Fix Date For Verdict on October 30
------------------------------------------------------------
The Times of India reports that a local court trying the case of
multi-crore accounting fraud in erstwhile Satyam Computer Services
Limited may announce a date for verdict on October 30.
TOI relates that CBI special public prosecutor K Surender said the
court has ordered all the accused to appear before it on that
date.
The ten accused in the case include prime accused Satyam Computers
founder and former chairman B Ramalinga Raju, his brother and
Satyam's former MD B Rama Raju, ex-CFO Vadlamani Srinivas, former
PwC auditors Subramani Gopalakrishnan and T Srinivas, Raju's
another brother B Suryanarayana Raju, former employees G
Ramakrishna, D Venkatpathi Raju and Ch Srisailam, and Satyam's
former internal chief auditor V S Prabhakar Gupta, the report
discloses.
According to the report, the trial in Satyam fraud case had
concluded in June before the special court, which examined 216
witnesses and marked 3,038 documents during the course of the
hearing.
Touted as India's biggest accounting fraud, the scam came to light
on January 7, 2009 after Raju allegedly confessed to manipulating
his company's account books and inflating profits over many years
to the tune of several crores of rupees, the report discloses.
TOI recalls that Mr. Raju was arrested by the Crime Investigation
Department of Andhra Pradesh Police two days later along with his
brother.
In February that year, CBI took over the investigation and filed
three charge sheets (on April 7, 2009, November 24, 2009 and
January 7, 2010), which were later clubbed into one, TOI relates.
The report notes that Mr. Raju and others were charged with
offences like cheating, criminal conspiracy, forgery and breach of
trust, under relevant sections of IPC, for inflating invoices and
incomes, account falsification, faking fixed deposits, besides
allegedly falsifying returns through violation of various I-T
laws.
During the trial, the CBI alleged that the scam caused a loss of
INR14,000 crore to Satyam shareholders, while the defence
countered the charges, saying the accused were not responsible for
the fraud and all the documents filed by the central agency
relating to the case were fabricated and not according to law,
adds TOI.
Headquartered in Secunderabad, India, Mahindra Satyam, formerly
known as Satyam Computer Services Limited, is an information,
communications and technology (ICT) company providing business
consulting, information technology and communication services.
The Company is powered by a pool of information technology (IT)
and consulting professionals across enterprise solutions, client
relationship management, business intelligence, business process
quality, operations management, engineering solutions, digital
convergence, product lifecycle management, and infrastructure
management services. The Company is a part of the Mahindra Group,
a global industrial conglomerate in India.
SHIVNATH TRACTORS: CRISIL Ups Rating on INR50MM Cash Loan From B+
-----------------------------------------------------------------
CRISIL has upgraded its ratings on the bank facilities of Shivnath
Tractors to 'CRISIL BB-/Stable/CRISIL A4+' from 'CRISIL
B+/Stable/CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 25 CRISIL A4+ (Upgraded from
'CRISIL A4')
Cash Credit 50 CRISIL BB-/Stable (Upgraded
from 'CRISIL B+/Stable')
Proposed Long Term 45 CRISIL BB-/Stable (Upgraded
Bank Loan Facility from 'CRISIL B+/Stable')
The rating upgrade reflects improvement in ST's business risk
profile, with the firm's net sales increasing to INR436.7 million
in 2013-14 (refers to financial year, April 1 to March 31) from
INR343.9 million in 2012-13. The increase was on account of a good
monsoon that led to healthy demand, as well as the firm's
expanding dealership network. ST's operating profit margin
increased to 4.2 per cent in 2013-14 from 2.5 per cent in 2012-13
driven by discounts and incentives received from its principal,
Mahindra & Mahindra Ltd (M&M; rated 'CRISIL AAA/Stable/CRISIL
A1+'). ST's financial risk profile has also improved with its net
worth increasing to INR33.2 million as on March 31, 2014, from
INR10.88 million a year earlier, because of equity infusion by its
promoters. The promoters also extended unsecured loans to support
the firm's incremental working capital requirements and opening of
new showrooms; outstanding unsecured loans stood at INR25.9
million as on March 31, 2014.
The ratings reflect the benefits that ST derives from its strong
association with its principal, and its adequate working capital
management. These rating strengths are partially offset by the
firm's average liquidity, weak debt protection metrics, and its
exposure to intense competition in the automobile dealership
industry.
Outlook: Stable
CRISIL believes that ST will continue to benefit over the medium
term from its established relationship with its principal, M&M.
The outlook may be revised to 'Positive' if the firm improves its
financial risk profile, most likely driven by equity infusion by
its promoters or a substantial increase in its cash accruals.
Conversely, the outlook may be revised to 'Negative' if there is a
significant slowdown in ST's revenue, or if the firm undertakes a
large debt-funded capital expenditure programme, resulting in
deterioration in its financial risk profile.
ST was set up as a partnership firm in 2008, promoted by Mr. Shyam
Kishore Gupta and his family members. The firm operates a
dealership for farm vehicles manufactured by M&M. It has exclusive
sales rights in five districts of Chhattisgarh.
SRI JAGANNATH: CRISIL Ups Rating on INR180MM Cash Loan From 'B'
---------------------------------------------------------------
CRISIL has upgraded its rating on the long-term bank loan
facilities of Sri Jagannath Roller Flour Mills to 'CRISIL BB-
/Stable' from 'CRISIL B/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 180 CRISIL BB-/Stable (Upgraded
from 'CRISIL B/Stable')
Proposed Long Term 21.3 CRISIL BB-/Stable (Upgraded
Bank Loan Facility from 'CRISIL B/Stable')
Term Loan 98.7 CRISIL BB-/Stable (Upgraded
from 'CRISIL B/Stable')
The rating upgrade reflects the improvement in SJRFM's business
risk profile, marked by healthy growth in its turnover and in cash
generation from its business. Leveraging the promoters' four-
decade-long experience and relationships with various stakeholders
in the flour mills business, the firm is expected to register a
robust growth in turnover to cross INR1.5 billion in 2014-15
(refers to financial year, April 1 to March 31), which will be its
first full year of operations. It started commercial operations in
the late 2013 and had registered a turnover of about INR600
million in around six months of operations in 2013-14.
Additionally, the net cash accruals generated by the business is
expected to increase to more than INR80 million in 2014-15 from
INR29 million in 2013-14. The comfortable cash accruals, which are
expected to be reinvested in the firm's operations, will result in
an improvement in its financial risk profile over the medium term.
The ratings reflect the extensive experience of SJRFM's promoters
in the flour mill business, and its moderate financial risk
profile, marked by a healthy net worth and comfortable debt
protection metrics. These rating strengths are partially offset by
the firm's working-capital-intensive operations and its exposure
to intense industry competition.
Outlook: Stable
CRISIL believes that SJRFM will continue to benefit over the
medium term from its promoters' extensive experience in the flour
milling business. The outlook may be revised to 'Positive' if the
firm registers a considerable increase in its topline and
profitability or reduces its working capital cycle, or if its
promoters infuse significant equity, leading to improvement in its
liquidity. Conversely, the outlook may be revised to 'Negative' if
SJRFM's profitability declines, there is a stretch in its working
capital cycle, or if it undertakes any significantly debt-funded
capital expenditure programme, leading to weakening of its overall
financial risk profile.
SJRFM was established as a partnership firm in 1980, and has been
engaged in flour milling since then. The firm has now moved to
Khurda Industrial City situated outside Bhubaneswar (Odisha) city
limits. The operation of this plant has started from August 2013.
For 2013-14, SJRFM reported a profit after tax (PAT) of INR6.7
million on net sales of INR598.2 million.
SRI VENKATRAMA: CRISIL Reaffirms B+ Rating on INR120MM Cash Loan
----------------------------------------------------------------
CRISIL's rating on the long-term bank facilities of Sri Venkatrama
Agro Tech continues to reflect its below-average financial risk
profile marked by high gearing and modest debt protection metrics,
and the susceptibility of its operating profitability to
volatility in raw material prices. These rating weaknesses are
partially offset by the extensive experience of SVRAT's promoters
in the rice milling industry.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 120 CRISIL B+/Stable (Reaffirmed)
Proposed Cash
Credit Limit 20 CRISIL B+/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that SVRAT will benefit over the medium term from
its promoters' extensive industry experience. The outlook may be
revised to 'Positive' in case of a significant and sustained
increase in the firm's revenue and profitability, or a substantial
capital infusion by its promoters, resulting in improvement in its
financial risk profile. Conversely, the outlook may be revised to
'Negative' if SVRAT's revenue and profitability decline
substantially, or if it undertakes a large debt-funded capital
expenditure programme, or if its promoters withdraw capital from
the firm, leading to weakening of its financial risk profile.
Update
For 2013-14 (refers to financial year, April 1 to March 31), SVRAT
booked revenue of INR301.3 million and operating margin of 6 per
cent, which resulted in cash accruals of INR1.1 million. The
revenue remained subdued in comparison with that in 2012-13,
despite moderate growth in volume, on account of decline in
realisations. CRISIL believes that SVRAT's revenue will grow
moderately over the medium term, supported by the firm's
established relationship with customers. However, on account of
its modest scale of operations and low profitability, its cash
accruals are expected to remain low, in the range of INR1 million
to INR2 million per annum, over the medium term.
The firm's financial risk profile is below average, marked by
small net worth, high gearing, and weak debt protection metrics.
Its net worth is estimated at INR38 million and gearing is
estimated at 3.97 times as on March 31, 2014. The gearing is high
on account of large working capital requirements, marked by gross
current assets of 232 days as on March 31, 2014. As the firm
relies primarily on short-term bank borrowings to fund its working
capital requirements, its interest coverage ratio remains weak, at
1.07 times during 2013-14. CRISIL believes that over the medium
term, SVRAT's financial risk profile will remain weak on account
of low accretions to reserves and large working capital
requirements.
The firm has weak liquidity. On account of large working capital
requirements and low internal accruals, its bank limits remain
extensively utilised at an average of 95 per cent throughout the
year. However, it is likely to generate sufficient annual cash
accruals of over INR1.1 million to meet its annual term debt
obligations in the range of INR0.2 to 0.5 million over the medium
term. CRISIL believes that over the medium term, SVRAT's liquidity
will remain weak.
Set up in 2011, SVR is engaged in milling and processing of paddy
into rice, rice bran, broken rice, and husk. The firm is promoted
by Mr. Padmakar Choudary and his family members.
SUDALAGUNTA SUGARS: CRISIL Ups INR569.8MM Cash Loan Rating to B+
----------------------------------------------------------------
CRISIL has upgraded its rating on the long-term bank facilities of
Sudalagunta Sugars Ltd (SSL) to 'CRISIL B+/Stable' from 'CRISIL B-
/Stable', and reaffirmed its rating on the company's short-term
bank facilities at 'CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 569.8 CRISIL B+/Stable (Upgraded
from 'CRISIL B-/Stable')
Letter of credit & 112.8 CRISIL A4 (Reaffirmed)
Bank Guarantee
Long Term Loan 36.5 CRISIL B+/Stable (Upgraded
from 'CRISIL B-/Stable')
Proposed Long Term 268.5 CRISIL B+/Stable (Upgraded
Bank Loan Facility from 'CRISIL B-/Stable')
Working Capital 55.2 CRISIL B+/Stable (Upgraded
Demand Loan from 'CRISIL B-/Stable')
The rating upgrade reflects SSL's improving liquidity, driven by
increasing cash generation from the business which is being
reinvested in the business to fund growth along with better
working capital management. On the back of a robust order book for
supply of sugar to Andhra Pradesh State Civil Supplies Corporation
Ltd, SSL's turnover registered a healthy growth of around 200 per
cent year-on-year in 2013-14 (refers to financial year, April 1 to
March 31), which has translated into healthy net cash accruals of
about INR260 million during the year. With steady orders from
APSCSCL, the strong growth in turnover is expected to continue
over the medium term. In addition to cash generated from the
business, bill discounting limits of INR400 million from the bank
along with advances from APSCSCL helped SSL to fund its
incremental working capital requirements, without straining its
liquidity. Sustenance of prudent working capital management will
be crucial for SSL to sustain its improved liquidity over the
medium term.
The ratings reflect SSL's average financial risk profile, marked
by modest gearing and average debt protection metrics. The ratings
also factor in the company's working-capital-intensive operations
and its exposure to risks related to the highly regulated nature
of the sugar industry. These rating weaknesses are partially
offset by SSL's established market position in South India.
Outlook: Stable
CRISIL believes that SSL will continue to benefit over the medium
term from the sugar procurement programme of the Government of
Andhra Pradesh. CRISIL also believes that the company will
maintain its established market position in South India over this
period. The outlook may be revised to 'Positive' if SSL's capital
structure and liquidity improve, most likely through fresh equity
infusion by its promoter. Conversely, the outlook may be revised
to 'Negative' if unprecedented delays in realisation of
receivables from government agencies result in deterioration in
the company's liquidity.
SSL was set up in 1994 by Mr. S Jayaram Chowdary. The company
manufactures white sugar, which it sells to dealers in the
domestic market, and exports to Gulf countries and to Singapore.
For 2013-14, SSL, on a provisional basis, reported a profit after
tax (PAT) of INR209.2 million on net sales of INR4.82 billion; it
reported a PAT of INR35.8 million on net sales of INR1.56 billion
for 2012-13.
UNIQUE STAR: CRISIL Reaffirms B Rating on INR20MM Term Loan
-----------------------------------------------------------
CRISIL's rating on the bank facilities of Unique Star Alliance
Tools Manufacturing Pvt Ltd continues to reflect Unique's modest
scale of operations, and weak financial risk profile marked by
small net worth and high gearing, though partially supported by
robust debt protection metrics. These rating weaknesses are
partially offset by the extensive experience of its promoters in
the tool-manufacturing industry.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Packing Credit 35 CRISIL A4 (Reaffirmed)
Proposed Long Term 3 CRISIL B/Stable (Reaffirmed)
Bank Loan Facility
Term Loan 20 CRISIL B/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that Unique will continue to benefit over the
medium term from its promoters' extensive industry experience. The
outlook may be revised to 'Positive' if the company registers
significant improvement in its financial risk profile and
financial flexibility, most likely through a substantial increase
in its cash accruals or infusion of considerable capital by its
promoters. Conversely, the outlook may be revised to 'Negative' if
Unique registers a decline in its revenue growth and
profitability, if its working capital cycle is stretched, or if it
undertakes a large debt-funded capital expenditure (capex)
programme, resulting in deterioration in its financial risk
profile.
Update
Unique reported net sales of INR232.1 million for 2013-14 (refers
to financial year, April 1 to March 31) as against INR193.2
million for 2012-13. The increase was due to stable demand for its
products in Asia and Africa, as well as sustained demand from
Latin America where it undertakes contract manufacturing. The
company's operating margin was 7.5 per cent in 2013-14 as compared
with 6.1 per cent in the previous year. Its margin has been
fluctuating due to its limited ability to pass on any increase in
raw material prices to its customers. CRISIL believes that
Unique's operating margin will remain susceptible to raw material
price fluctuations over the medium term.
Unique had a high gearing of 5.9 times and a small net worth of
INR12 million, as on March 31, 2014. However, it maintained robust
debt protection metrics, with interest coverage ratio of around
3.2 times and net cash accruals to total debt ratio of 13 per cent
in 2013-14. The financial risk profile is expected to improve due
to absence of any debt-funded capex plans over the medium term.
Unique has weak liquidity, marked by high debt repayment
obligations as against limited net cash accruals; however, it
continues to be supported by unsecured loans from its promoters,
the balance of which stood at INR27.9 million as on March 31 2014,
and low bank limit utilisation. It generated net cash accruals of
around INR8.9 million in 2013-14; its net cash accruals are
expected to be tightly matched against its term debt obligations
of INR10.4 million, in 2014-15. The company reported a high
current ratio of 1.6 times as on March 31, 2014, and its bank
limit utilisation was low at an average of 39 per cent during the
12 months ended May 31, 2014.
Unique was set up in 2003 by the Mittal family. It manufactures
various types of steel files and rods under the brand names,
Marigold and Sunstar. Mr. Narendra Mittal and his wife, Mrs.
Kusumlata Mittal, are the company's directors. Their son, Mr.
Shashank Mittal, is also actively engaged in the business.
VENUS CONTROLS: CRISIL Cuts Rating on INR400MM Cash Credit to D
---------------------------------------------------------------
CRISIL has downgraded its ratings on the bank facilities of Venus
Controls & Switchgear Pvt Ltd to 'CRISIL D/CRISIL D' from 'CRISIL
BB/Stable/CRISIL A4+'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 100 CRISIL D (Downgraded from
'CRISIL BB/Stable')
Cash Credit 400 CRISIL D (Downgraded from
'CRISIL A4+')
Letter of Credit 100 CRISIL D (Downgraded from
'CRISIL BB/Stable')
Proposed Long Term 200 CRISIL D (Downgraded from
Bank Loan Facility 'CRISIL BB/Stable')
The rating downgrade reflects instances of delay by VCSPL in
payment of interest on its cash credit limit, and devolvement on
its letter of credit facility, due to weak liquidity.
VCSPL also has a below-average financial risk profile, marked by
subdued debt protection metrics, and working-capital-intensive
operations. However, the company benefits from its promoters'
experience in the electrical equipment industry.
VCSPL, incorporated in 1989, manufactures electrical control
panels. The company also started undertaking turnkey projects in
2010 to set up entire power sub-stations. Its manufacturing
facilities are located in Haryana. VCSPL has a team of engineers
that designs products or systems based on customer specifications.
The company's day-to-day operations are managed by its promoter-
director, Mr. Shyam Sunder Patodia, and his son, Mr. Vijay Kumar
Patodia.
YASH PHARMA: CRISIL Ups Rating on INR85MM Cash Credit to B+
-----------------------------------------------------------
CRISIL has upgraded the long-term ratings of Yash Pharma
Laboratories Pvt Ltd to 'CRISIL B+/Stable' from 'CRISIL B/Stable'
while reaffirming the short-term rating at 'CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 85 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
Letter of Credit 5 CRISIL A4 (Reaffirmed)
The rating upgrade reflects improvement in YPLPL's liquidity
marked by an improved cushion between its cash accruals and
repayments, backed by healthy growth in scale of operations and
improved profitability margin. The company's sales have increased
to an estimated INR486.8 million in 2013-14 (refers to financial
year, April 1 to March 31) from INR274.2 million in 2008-09,
backed by increasing domestic footprint. Further, the operating
margin has also gradually improved to an estimated 10.8 per cent
in 2013-14, on account of sales of higher margin products and
improved operational efficiencies. Consequently, the company is
likely to generate adequate cash accruals of INR27 million to
INR36 million over the medium term, up from an estimated INR20
million in 2013-14, vis-a-vis debt obligations of INR15 million to
INR21 million. With the company likely to sustain its business
performance, backed by scaling up of exports, CRISIL believes that
improvement in YPLPL's liquidity will be sustained over the medium
term.
The ratings continue to reflect YPLPL's working-capital-intensive
operations and average financial risk profile marked by a high
gearing and average debt protection metrics. The above-mentioned
rating weaknesses are partially offset by the extensive experience
of YPLPL's promoters in the pharmaceutical industry.
Outlook: Stable
CRISIL believes that YPLPL will continue to benefit over the
medium term from its promoter's extensive experience in the
pharmaceutical industry. The outlook may be revised to 'Positive'
in case of substantial and sustained improvement in its scale of
operations and margins, leading to improvement in its capital
structure and debt protection metrics. Conversely, the outlook may
be revised to 'Negative' in case of a decline in the company's
revenue or operating margin or an elongation of its working
capital cycle or if it undertakes any debt-funded capital
expenditure programme, leading to weakening of its financial risk
profile, especially its liquidity.
YPLPL was established in 1972 by the Mumbai (Maharashtra)-based
Shah family. The company manufactures pharmaceutical formulations.
YPLPL sells formulations under its brand such as Sunkroma, Iross,
and Lemolinctus. The company's manufacturing facilities in Roorkee
(Uttarakhand), are Good Manufacturing Practices (GMP) certified.
Mr. Yashodhan Shah is the Chairman and Managing Director and Mrs.
Nayna Shah (wife of Mr. Yashodhan Shah), their son Mr. Atri Shah
and Mrs. Falguni Shah (wife of Mr. Atri Shah) are the directors of
the company and manage the day to day operations of the company.
YPLPL reported, on a provisional basis, profit after tax (PAT) of
INR9.4 million on net sales of INR486.8 million in 2013-14 (refers
to financial year, April 1 to March 31). It reported PAT of INR7.4
million on net sales of INR409.1 million in 2012-13.
=================
I N D O N E S I A
=================
ADARO INDONESIA: Fitch Affirms 'BB+' Issuer Default Ratings
-----------------------------------------------------------
Fitch Ratings has affirmed coal producer PT Adaro Indonesia's
(Adaro) Long-Term Foreign- and Local-Currency Issuer Default
Ratings (IDRs) at 'BB+'. The Outlook is Stable. The agency has
simultaneously withdrawn the ratings. Adaro has fully prepaid its
USD800m senior unsecured notes due in 2019. Fitch will no longer
provide ratings or analytical coverage for this issuer.
KEY RATING DRIVERS
Adaro's ratings reflect the consolidated credit profile of its
parent, PT Adaro Energy Tbk (AE), due to the strong linkages
between the two entities. The affirmation of the ratings reflects
our expectation that AE will maintain adequate through-the-cycle
credit metrics despite a material weakening in coal prices. This
is due to AE's position as one of the world's lowest-cost
producers of thermal coal, its strong liquidity and its low capex
requirements, which result in positive free cash generation even
under low coal prices.
AE has largely completed resource acquisitions, and has deferred
the development spending required for most of its greenfield coal
assets acquired since 2011 due to low coal prices. AE's EBITDA was
USD510m in 1H14 (2013: USD859m) and its FFO net leverage was 1.8x
(2013: 2.3x).
The company refinanced its bonds using low-cost amortising bank
debt. Although such loans add to AE's annual cash requirement to
service debt amortisation, Fitch expects the requirement can be
comfortably managed with operating cash generation and cash on
hand. Furthermore, the amortising debt is better suited for the
company as this reduces large refinancing requirements closer to
the expiry of Adaro's largest mining concession in 2022. The low-
cost bank loans also substantially reduce its interest costs.
The ratings remain constrained owing to AE's high reliance on a
single mining concession and the uncertainty associated with
mining regulations in Indonesia.
ANEKA TAMBANG: Moody's Withdraws B2 Corporate Family Rating
-----------------------------------------------------------
Moody's Investors Service has withdrawn the B2 corporate family
rating of PT Aneka Tambang. The rating outlook is negative at the
time of its withdrawal.
Ratings Rationale
Moody's has withdrawn the rating for its own business reasons.
Established in 1968, PT ANTAM (Persero) Tbk ("Antam") is
Indonesia's second-largest nickel producing company, possessing
one of the country's largest nickel and bauxite reserves. It also
owns considerable gold reserves The company is 65%-owned by the
Indonesian government and is listed on the Indonesia and
Australian stock exchanges.
METROPOLIS PROPERTINDO: S&P Lowers CCR to 'B-' on Weak Execution
----------------------------------------------------------------
Standard & Poor's Ratings Services said it lowered its long-term
corporate credit rating on Indonesia-based property developer PT
Metropolis Propertindo Utama (MPU) to 'B-' from 'B+'. The outlook
is negative. At the same time, S&P lowered its long-term ASEAN
regional scale rating on the company to 'axB-' from 'axBB'.
"We lowered the rating to reflect our view that MPU's financial
performance will likely remain poor over the next 12 months. The
downgrade also reflects the deterioration in the company's
liquidity position. Liquidity weakened mainly because of the
company's weak execution, sluggish sales, and significant short-
term debt, in our opinion," said Standard & Poor's credit analyst
Kah Ling Chan.
Unlike other property developers', MPU's cash flows are volatile
and uneven due to its significant capital expenditure needs for
the acquisition and construction of projects, long cash-conversion
cycle, and large single customer.
MPU's cash flows are volatile and its funding needs are higher
than peers' because its build-and-sell model is capital intensive.
The company focuses on developing hospitals, retail malls,
offices, and hotels for sale to other property developers and
REITs. MPU funds its own projects, and its holding period is
uncertain. The company realizes cash proceeds only when the
projects are completed and sold. In comparison, other developers
can sell forward and realize cash from their projects before
completion.
MPU also has substantial customer concentration, as it mainly
sells it assets to PT Lippo Karawaci Tbk.
(BB-/Stable/ -- ; axBB+/ -- ). S&P had anticipated that the
strategic relationship would continue to underpin strong sales,
but sales for the first half of 2014 debunked this expectation.
The sales level has also exposed MPU to significant cash flow
risks. S&P has therefore revised its business risk profile
assessment to "vulnerable" from "weak."
In S&P's view, management's project and sales execution is weak,
as reflected in major delays in sales completion. S&P lowered its
base-case estimate of asset sales for full-year 2014 to about
Indonesian rupiah (IDR) 1.98 trillion from IDR4.22 trillion.
Asset sales declined 65.0% to IDR490.2 billion in the first half
of 2014, from IDR1.4 trillion a year earlier. The sales were also
materially lower than the company's original projection of IDR7.23
trillion for 2014.
MPU's liquidity sources could be insufficient to cover its
liquidity uses over the next 12 months, in S&P's opinion. This is
because of the company's falling sales, large short-term debt, and
significant interest expenses stemming from high funding costs.
However, S&P notes that MPU recently finalized a IDR2.5 trillion
short-term facility that should provide some cushion against near-
term pressure.
S&P believes MPU is vulnerable to credit tightening because of its
need to roll over its existing debt and the company's high
reliance on new borrowings to meet short-term payment obligations.
MPU's profitability will likely remain weak in 2014 and 2015,
reflecting continued weak sales. Recurring income is not
significant enough to offset the depressed sales. In S&P's base
case, it estimates that sales in the second half of 2014 will pick
up moderately on consistent EBITDA margins of about 35% due to a
stable property market.
S&P expects MPU's capital structure and cash flow coverage to
deteriorate over the 12 months because of poor sales and working
capital movements that S&P expects to be negative. In S&P's base
case, it estimates the debt-to-EBITDA ratio to increase to 9.4x in
2015 from 7.8x in 2014, with EBITDA interest coverage falling
below 1.7x for 2014 and 1.4x 2015. S&P has therefore revised the
financial risk profile to "highly leveraged" from "aggressive."
In S&P's base case, it projects negative free operating cash flows
of about IDR600 billion-IDR 700 billion annually in 2014 and 2015.
"The negative outlook reflects our expectation that MPU's
liquidity may remain weak over the next six to 12 months because
of continuing weak property sales. It also reflects the
refinancing risks and reducing coverage ratios," said Ms. Chan.
S&P could lower the rating if MPU fails to improve its liquidity
due to weak sales or further increases its debt. S&P may also
lower the rating if the company faces difficulty in securing
refinancing for its existing debt, encounters challenges to access
credit facilities or fails to meet its operational obligations.
S&P could revise the outlook to stable if MPU enhances its
liquidity and financial performance. This could happen if the
company improves execution to increase property sales
significantly and reduces and extends debt maturity in the next 12
months.
====================
N E W Z E A L A N D
====================
VINCENT AVIATION: New Zealand Operations Go Into Liquidation
------------------------------------------------------------
Stuff.co.nz reports that Wellington Airport-based Vincent Aviation
has gone into liquidation days after it was placed into
receivership.
Earlier this month, owner Peter Vincent labelled the application
to liquidate the company, lodged by ANCL Investments, as a
"serious situation" for the company, Stuff.co.nz relates.
The report says the application to liquidate its New Zealand
operations related to lease and maintenance provision payments for
a BAe 146 aircraft, known as a Whisperjet.
But just last week, Stephen Tubbs from BDO was appointed receiver
of Vincent Aviation, the second aviation-related receivership in
as many weeks, according to Stuff.co.nz.
And in the High Court in Wellington on October 28 Associate Judge
Warwick Smith also put the company into liquidation, the report
relates.
According to the report, ANCL Investments said it only learned the
company was in receivership last week, and proceeded with its
application to liquidate the company as well.
Vincent Aviation was not represented at the hearing, where PwC
were appointed liquidators, the report relays.
In May, Vincent Aviation Australia, based in Darwin but owned by
Vincent Aviation in New Zealand, was liquidated and ceased
trading, the report discloses.
An Australian Securities & Investments Commission report showed
Vincent Aviation Australia's debts outweighed its assets by AUD8.8
million (NZ$9.7m), according to Stuff.co.nz.
Stuff.co.nz relates that Peter Vincent, who founded the company in
1990, said the receivership in Australia was largely behind the
financial issues in New Zealand.
Vincent Aviation, which has about 30 workers, is located at
Wellington Airport. The company carried out flight operations,
administration, engineering, planning and compliance. It has two
dedicated hangars to perform the engineering and maintenance of
the company's fleet and provided servicing and maintenance for
third-party aircraft.
=====================
P H I L I P P I N E S
=====================
SECURITY BANK: S&P Assigns 'B' Short-Term Issuer Credit Rating
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB+' long-term
and 'B' short-term issuer credit ratings to Security Bank Corp.
The outlook on the long-term rating is stable. S&P also assigned
its 'axBBB' long-term and 'axA-3 short-term ASEAN regional scale
ratings to the Philippine bank.
S&P bases its rating on Security Bank on the bank's "adequate"
business position, "adequate" capital and earnings, "strong" risk
position, "average" funding, and "adequate" liquidity, as S&P's
criteria define those terms. The stand-alone credit profile is
'bb+'.
S&P's 'bb' anchor for Security Bank draws on its Banking Industry
Country Risk Assessment (BICRA) methodology and S&P's view of the
economic and industry risks in the countries where the bank
operates. S&P's bank criteria uses the BICRA economic risk and
industry risk scores to determine a bank's anchor, the starting
point in assigning an issuer credit rating. The anchor for a bank
operating only in the Philippines is 'bb'.
The BICRA score is based on S&P's evaluation of economic risk in
the Philippines, where inadequate infrastructure and unfavorable
regulations hamper economic diversification and growth. Moderate
private sector debt in the context of low income levels and
relaxed underwriting standards heighten credit risk. Modest
growth in private sector credit and real estate prices in the past
several years temper these weaknesses.
Regulatory standards in the Philippines are generally in line with
international norms, but insufficient power to supervisors impedes
implementation. Risk appetite is generally restrained, given
limited loan growth and straightforward banking products. A high
level of stable customer deposits support the banking system, but
banks have few alternative sources of funds.
S&P views Security Bank's business position to be adequate in view
of its status as a mid-sized bank with stable revenue streams from
its traditional focus on the small and medium-sized enterprise
(SME) and corporate segments. The bank has a proven management
team, which contributes to its superior operating efficiency and
asset quality compared with peers'. S&P views Security Bank's
management and strategy to be proactive and prudent, and this
should continue to support an operating performance that is above
the industry average. The bank reported an averaged 19.7% return
on equity (ROE) from 2010 to June 2014, compared with the
industry's 12.2%.
Security Bank is less developed in consumer lending, which
accounts for about 6% of total loans, compared with 18% for the
industry. The bank aims to develop this business through branch
expansion and marketing efforts, with a focus on the mass
affluent. This could provide diversification and margins
benefits, but also present risk management and credit-cost
challenges. It remains to be seen if the bank can penetrate this
new segment.
S&P expects Security Bank's pre-diversification risk-adjusted
capital (RAC) ratio to be 7%-8% in the next one to two years.
This is based on S&P's expectation that the bank may sustain its
capitalization by maintaining above-average earning capacity and
prudent capital policy. This is also based on S&P's assumption
that the strong loan growth will slightly moderate to 10%-20% in
the next two years. However, growth remains above the industry
average and would consequently bring some pressure on the net
interest margin. Security Bank's operating performance is better
than peers' partly due to its well-controlled cost efficiency.
The bank averaged a cost-income ratio of 43% from 2010 to June
2014, and this was significantly lower than the industry average
of 64%.
The strong risk position assessment for Security Bank reflects
S&P's view of the bank's superior underwriting risk control with
more prudent risk appetite compared with industry peers', as well
as the bank's proven track record in its core corporate lending
business. These strengths result in consistently above-average
asset quality and lower credit costs than peers'. The bank's
ratio of nonperforming assets (including restructured loans and
real estate and other properties acquired) was about 2.1% at the
end of 2013, which is significantly lower than the industry
average of 5%-6%. The average net provision cost over the past
five years was less than 10 basis points (bps), which is
significantly lower than the industry average of 50bps-60bps.
Security Bank is pursuing higher growth from consumer loans, which
S&P views as an inherently higher-risk segment than others due to
poor transparency and the under-developed supporting
infrastructure in the Philippine banking system, such as the lack
of a comprehensive credit bureau. Nonetheless, S&P believes the
bank's good underwriting standards and prudent growth strategy may
offset some of these uncertainties, such that the bank's asset
quality and credit costs will remain superior to peers'.
Security Bank's funding profile is likely to remain average and
its liquidity should remain adequate over the next two years
because S&P expects the bank's expansion of its branch network to
help the bank to secure more stable deposit funding. Security
Bank's smaller branch network compared with larger peers' somewhat
constrains its deposit growth, resulting in a consistently higher
ratio of loans to customer deposits, which was 84% as of Dec. 31,
2013, versus the industry average of 65%-75%.
The bank's strategy to expand its branch should benefit its
funding profile, and this ratio will gradually move toward the
industry average. Security Bank's current accounts, savings
accounts (CASA) contribute 70% of total deposits, which is in-line
with the industry average. S&P expects the bank to maintain
sufficient liquid assets to meet its short-term liquidity needs.
Security Bank's ratio of broad liquid assets to short-term
wholesale borrowings multiple was about 1.8x as of Dec. 2013.
*********
Tuesday's edition of the TCR-AP delivers a list of indicative
prices for bond issues that reportedly trade well below par.
Prices are obtained by TCR-AP editors from a variety of outside
sources during the prior week we think are reliable. Those
sources may not, however, be complete or accurate. The Tuesday
Bond Pricing table is compiled on the Friday prior to
publication. Prices reported are not intended to reflect actual
trades. Prices for actual trades are probably different. Our
objective is to share information, not make markets in publicly
traded securities. Nothing in the TCR-AP constitutes an offer
or solicitation to buy or sell any security of any kind. It is
likely that some entity affiliated with a TCR-AP editor holds
some position in the issuers' public debt and equity securities
about which we report.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR-AP. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com
Friday's edition of the TCR-AP features a list of companies with
insolvent balance sheets obtained by our editors based on the
latest balance sheets publicly available a day prior to
publication. At first glance, this list may look like the
definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical
cost net of depreciation may understate the true value of a
firm's assets. A company may establish reserves on its balance
sheet for liabilities that may never materialize. The prices at
which equity securities trade in public market are determined by
more than a balance sheet solvency test.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Asia Pacific is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Valerie U. Pascual, Marites O. Claro, Joy A. Agravante, Rousel
Elaine T. Fernandez, Julie Anne L. Toledo, and Peter A. Chapman,
Editors.
Copyright 2014. All rights reserved. ISSN: 1520-9482.
This material is copyrighted and any commercial use, resale or
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*** End of Transmission ***