/raid1/www/Hosts/bankrupt/TCRAP_Public/150323.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, March 23, 2015, Vol. 18, No. 057
Headlines
A U S T R A L I A
BLUENERGY GROUP: First Creditors' Meeting Slated For March 30
C.D.S. ROOFING: First Creditors' Meeting Slated For March 31
CODICOTE PTY: First Creditors' Meeting Set For March 27
FORTESCUE METALS: S&P Affirms BB Rating on Senior Unsecured Debt
LOYVIC PTY: S&P Affirms then Withdraws BB+ Issuer Credit Rating
MISSION NEWENERGY: Provides More Info on Joint Venture
PYLONES INTERNATIONAL: In Admin.; Creditors' Meeting on Mar. 30
R.W.E. ROBINSON: Placed Into Liquidation; 75 Jobs Axed
REGIONAL COMMUNITY: Liquidator Files Case Against ATO
RHUBARB ENTERPRISES: First Creditors' Meeting Set For April 1
C H I N A
CHINA TELETECH: Shareholders Oust Dong Liu From Board
GUANGZHOU R&F: Ba3 CFR Not Affected by 2014 Results, Moody's Says
HENGSHI MINING: 2014 Results Won't Affect B1 CFR, Moody's Says
LONGFOR PROPERTIES: 2014 Results Well Positions Ba1 CFR
SHIMAO PROPERTY: Fitch Rates 2022 Senior Unsecured Notes 'BB+'
SUNRISE REAL ESTATE: Hires Kenne Ruan CPA as New Accountants
YINGDE GASES: Weak 2014 Cash Flow Pressures Ba3 CFR, Moody's Says
* CHINA: More Processing Firms Shut Down in Dongguan
I N D I A
ANOOP FORGINGS: ICRA Reaffirms B- Rating on INR4cr Packing Loan
BANSAL SHIP: CRISIL Reaffirms B+ Rating on INR50MM Bank Loan
BHAVIN STEEL: ICRA Reaffirms B+ Rating on INR8cr Cash Credit
CAPARO ENGINEERING: CARE Revises Rating on INR350.13cr Loan to B
CURE LIFE: CARE Reaffirms D Rating on INR18.06cr LT Bank Loan
DB MALLS: ICRA Suspends 'B' Rating on INR401cr LT Loan
ECOBOARD INDUSTRIES: ICRA Cuts Rating on INR23cr Loan to D
EMARK ENERGISERS: CRISIL Reaffirms B Rating on INR50MM Loan
GANGA DIAGNOSTIC: ICRA Reaffirms B Rating on INR13.99cr Term Loan
GROVER IMPEX: ICRA Reaffirms 'B+' Rating on INR2.0cr FB Loan
HEAVY METAL: CARE Lowers Rating on INR78.04cr LT Loan to B
ISHITA BUILDCON: CARE Reaffirms B Rating on INR10cr LT Loan
JAIN AGENCIES: ICRA Reaffirms B+ Rating on INR10cr Cash Credit
JAYAHO AGRI: CRISIL Cuts Rating on INR120MM Cash Loan to D
KANCHESHWAR SUGAR: CARE Reaffirms B+ Rating on INR89.79cr Loan
KARTHIK INDUCTIONS: CARE Reaffirms B Rating on INR6cr Bank Loan
KISAN AGRO: CARE Reaffirms B+/A4 Rating on INR17cr Bank Loan
KISAN MOULDINGS: ICRA Cuts Rating on INR137cr Cash Loan to D
KISAN PROTEINS: CARE Reaffirms B+/A4 Rating on INR9.5cr Bank Loan
LODHA DEVELOPERS: Fitch Gives Final 'B+' Rating to US$200MM Notes
LODHA DEVELOPERS: Moody's Rates Notes Ba3, Outlook Stable
MANDOVI MINERALS: CRISIL Reaffirms D Rating on INR81.9MM LT Loan
NAGA SINDHU: CRISIL Reaffirms D Rating on INR144.5MM Term Loan
NEETY INT'L: ICRA Assigns SP 4D Grading on Weak Fin'l Strength
NESTOR PHARMACEUTICALS: ICRA Reaffirms C+ Rating on INR51cr Loan
NINE GLOBE: ICRA Puts 'D' LT Rating on Notice for Withdrawal
OCEAN CONSTRUCTIONS: ICRA Reaffirms B Rating on INR50.23cr Loan
PAE LTD.: CARE Revises Rating on INR15cr LT Bank Loan to B+
PATEL COTTON: CARE Assigns B Rating to INR14.89cr LT Bank Loan
PRABHU CREATIONS: CARE Assigns B+ Rating to INR7.97cr LT Loan
PRAHLAD ISPAT: ICRA Assigns B Rating to INR7.75cr Cash Credit
QUALITY RICE: CRISIL Reaffirms B+ Rating on INR180MM Cash Loan
R.K ICE: CARE Lowers Rating on INR25cr Bank Loan to D
RAMAKRISHNA ELECTRONICS: CARE Reaffirms B+ INR30cr Loan Rating
SAA VISHNU: CARE Assigns B+ Rating to INR14.29cr LT Bank Loan
SHARPLINE AUTOMATION: ICRA Cuts Rating on INR7.05cr Loan to D
SHIVALIK VYAPAAR: CRISIL Reaffirms D Rating on INR164MM Loan
SHIVAM FOODS: CRISIL Reaffirms B+ Rating on INR147.5MM Cash Loan
SHRI MOHAN: ICRA Assigns B Rating to INR40cr Proposed Loan
SLN TECHNOLOGIES: ICRA Reaffirms B Rating on INR4.5cr Loan
SOHAN INDUSTRIES: CARE Reaffirms B+ Rating on INR8.5cr LT Loan
SOHAN LAL: CARE Reaffirms B+ Rating on INR6cr LT Bank Loan
SRI KRISHNA: CRISIL Cuts Rating on INR150MM Cash Credit to B-
TIMES STEEL: CARE Lowers Rating on INR22cr LT Bank Loan to B+
TM TYRES: CRISIL Reaffirms D Rating on INR200MM Term Loan
I N D O N E S I A
BERAU COAL: Restructuring Plan May Improve Ratings, Moody's Says
N E W Z E A L A N D
STANLEY CONSTRUCTION: Owes NZ$1.9 Million to 42 Creditors
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A U S T R A L I A
=================
BLUENERGY GROUP: First Creditors' Meeting Slated For March 30
-------------------------------------------------------------
Gideon Rathner of Lowe Lippmann was appointed as administrator of
Bluenergy Group Limited on March 19, 2015.
A first meeting of the creditors of the Company will be held at
Level 7, 616 St Kilda Road, in Melbourne, on March 30, 2015, at
10:30 a.m.
C.D.S. ROOFING: First Creditors' Meeting Slated For March 31
------------------------------------------------------------
Matthew Jess and Paul Burness of Worrells Solvency & Forensic
Accountants were appointed as administrators of C.D.S. Roofing Pty
Ltd on March 20, 2015.
A first meeting of the creditors of the Company will be held at
Worrells Solvency & Forensic Accountants, Level 15, 114 William
Street, in Melbourne, on March 31, 2015, at 2:30 p.m.
CODICOTE PTY: First Creditors' Meeting Set For March 27
-------------------------------------------------------
Andrew Sallway and Gayle Dickerson of Grant Thornton were
appointed as administrators of Codicote Pty Ltd on March 17, 2015.
A first meeting of the creditors of the Company will be held at
Grant Thornton, Level 17, 383 Kent Street, in Sydney, on
March 27, 2015, at 11:00 a.m.
FORTESCUE METALS: S&P Affirms BB Rating on Senior Unsecured Debt
----------------------------------------------------------------
Standard & Poor's Ratings Services said that it has affirmed its
issue ratings on Fortescue Metals Group Ltd.'s (Fortescue) senior
secured debt at 'BBB', following Fortescue's withdrawal of its
proposed US$2.5 billion senior secured note offering. S&P also
affirmed the issue rating on the company's senior unsecured debt
at 'BB'. The withdrawal of the voluntary refinancing is due to
unfavorable debt capital-market conditions. S&P notes that
Fortescue has no debt maturing until April 2017.
At the same time, S&P removed both ratings on the debts issued by
Fortescue's financing subsidiary FMG Resources (August 2006) Pty
Ltd. from CreditWatch with negative implications, where they were
placed on March 5, 2015. The recovery ratings remain unchanged at
'1' (very high recovery) for the secured debt and '5L' (10%-30%,
lower half of the range) for the unsecured debt.
The 'BB+/Stable' issuer credit rating on Fortescue is unaffected
by the withdrawal of the note offering. Nonetheless, falling iron
prices have reduced Fortescue's buffer at current rating levels.
S&P considers Fortescue to be more sensitive to iron ore price
movements than a diversified miner, notwithstanding its good cost
position. If benchmark iron ore prices were to dip below S&P's
base-case assumption for an extended period, it would increase
downward rating pressure on the company.
LOYVIC PTY: S&P Affirms then Withdraws BB+ Issuer Credit Rating
---------------------------------------------------------------
Standard & Poor's Ratings Services said that it has affirmed and
subsequently, at the issuer's request, withdrawn its 'BB+/Stable'
issuer credit rating on Australia-based Loyvic Pty Ltd. and
Loyvic's associated trading company, IPM Australia Ltd. Loyvic is
the owner of the 1,000 MW brown coal Loy Yang B power plant.
The stable outlook prior to the withdrawal reflected the continued
parental support of Loyvic, and Loyvic's near-term stable earnings
and cashflow, which are underpinned by the favorable offtake
contract with the State of Victoria for at least 56% of its output
until 2016. It also reflects the plant's sound operating
performance.
MISSION NEWENERGY: Provides More Info on Joint Venture
------------------------------------------------------
Mission NewEnergy Limited disclosed in a document filed with the
U.S. Securities and Exchange Commission that pursuant to the
announcement made on Feb. 19, 2015, the following detailed
information is provided:
* The calculation of the 40.28 cents per Share Value Accretion
was made up of:
-- the enterprise value of the new Joint Venture (JV) of
29.84 cents per share which is calculated by dividing the
JV agreed Enterprise Value of A$60.9 million by
40,870,275, issued ordinary shares. The Enterprise Value
is the sum of the Equity injected by each JV partner and
the Debt raised to meet the asset acquisition and
technology retrofit cost; and
-- the cash value available to Mission from the transaction
of 10.44 cents per share which is calculated by dividing
the cash retained by the group from the transaction of
A$4.3 million by 40,870,275 issued ordinary shares.
As reported by the TCR on Feb. 24, 2015, Mission NewEnergy has
successfully completed the company transformation plan commenced
in 2012. Management has continued to improve the balance sheet
and restructure the Company's operations achieving major
milestones in 2013 and 2014.
Mission had achieved the final step of the transformation plan
being:
* Completion of the sale of its 250,000 tpa biodiesel refinery
for US$22.5 million
* Settlement of all outstanding convertible note debt of
approximately A$25 million
* Retention of a 20% stake in a highly prospective Joint
Venture with the world's largest oil palm plantation company
and one of the United States' most promising disruptive fuels
technology providers
* Retention of approximately two years in general working
capital to cover operational and legal expenses
Mission has added 40.28 cents per share of asset value on a fully
diluted basis from this Transaction including 10.44 cents per
share of cash and enterprise value of Mission's interest in the
Joint Venture of 29.84 cents per share.
About Mission NewEnergy
Based in Subiaco, Western Australia, Mission NewEnergy Limited is
a producer of biodiesel that integrates sustainable biodiesel
feedstock cultivation, biodiesel production and wholesale
biodiesel distribution focused on the government mandated markets
of the United States and Europe.
The Company is not operating its biodiesel refining segment. The
refineries are being held in care and maintenance either awaiting
a return to positive operating conditions or the sale of assets.
The Company has materially diminished its Jatropha contract
farming operation and the company is now focused on divesting the
remaining Indian assets. The Company intends to cease all Indian
operations.
Mission NewEnergy reported a net loss of $1.09 million on $9.68
million of total revenue for the year ended June 30, 2014,
compared to net income of $10.05 million on $8.41 million of total
revenue during the prior year.
The Company's balance sheet at June 30, 2014, showed
$4.04 million in total assets, $15.40 million in total liabilities
and a $11.35 million total deficiency.
BDO Audit (WA) Pty Ltd, in Perth, Western Australia, issued a
"going concern" qualification on the consolidated financial
statements for the year ended June 30, 2013. The independent
auditors noted that the Company incurred operating cash outflows
of $3.7 million during the year ended 30 June 2013 and, as of that
date the consolidated entity's total liability exceeded its total
assets by $12.5 million. These conditions, along with other
matters, raise substantial doubt the Company's ability to continue
as a going concern.
PYLONES INTERNATIONAL: In Admin.; Creditors' Meeting on Mar. 30
---------------------------------------------------------------
Eloise Keating at SmartCompany reports that Pylones Australia is
for sale after the company collapsed into voluntary administration
on March 18.
Pylones International, trading as Pylones Australia, operates
three retail stores in the Sydney CBD, the Melbourne CBD and
Chadstone Shopping Centre in Melbourne's eastern suburbs.
Pylones is a French giftware brand that designs, produces and
distributes brightly coloured personal and home accessories,
including clocks, photo frames, some jewellery and gifts for
children. The company has been operating in France for 30 years
and has retail stores across Europe, Asia, South America and the
Middle East. The Australian subsidiary was established in 2011.
However, administrators HLB Mann Judd said in a statement on March
18 the Australian business has "not performed in Australia as
expected due to a number of factors including the current
difficult retail trading environment," SmartCompany relates.
According to SmartCompany, HLB Mann Judd partners Todd Gammel and
Barry Taylor have been appointed as administrators and will
continue to trade the three Pylones stores while they seek
expressions of interest in the business and or its assets.
Meanwhile, a 30% off sale is underway at the three stores.
Mr. Gammel told SmartCompany Pylones Australia employs 17 people
across the three stores, with another three workers employed in
the back office.
The retailer turned over AUD2 million last year and Mr. Gammel
said it was on track to record the same level of sales this year,
the report relays.
But like other "smaller guys struggling to compete for the same
dollar", Mr. Gammel said the current structure of the business
meant Pylones Australia was not achieving the level of sales
needed to remain viable, according to SmartCompany.
SmartCompany notes that an advertisement for the business appeared
in March 20's edition of The Australian Financial Review, with
Pylones three retail stores up for sale, as well as "significant
stock across complete category range" and a "wholesale and online
client database".
SmartCompany relates that Mr. Gammel said the administrators have
already begun to receive interest in Pylones from established
Australian retailers and it would make sense to "bolt on" the
business to an existing retail operation.
While Mr. Gammel said the company's directors would consider
restructuring the business, their preference would be for "another
solution or option with someone out here," SmartCompany relays.
"That would make sense from where we are too," SmartCompany quotes
Mr. Gammel as saying. "There's a lot of interest in the brand. It
is a stable, global brand. Someone just needs to work out how to
make money with it."
A first meeting of the creditors of the Company will be held at
HLB Mann Judd, Level 19, 207 Kent Street, in Sydney, on
March 30, 2015, at 11:00 a.m.
R.W.E. ROBINSON: Placed Into Liquidation; 75 Jobs Axed
------------------------------------------------------
Cliff Sanderson at Dissolve.com.au reports that R.W.E. Robinson
and Sons Pty Ltd, which trades as Robinson Buildtech, has been
placed into liquidation. WA Insolvency Solutions Pty Ltd's David
Ashley Norman Hurt was appointed liquidator of the business on
March 11, 2015.
Around 75 workers were left jobless as a result of the
liquidation, Dissolve.com.au says. According to the report, the
O'Connor-based company pulled out from around 6 unfinished
construction jobs. Suppliers, subcontractors and other creditors
are said to be owed around AUD4 million, the report notes.
Aside from construction, the business had plumbing, maintenance,
gas and minor works department. The business had branches in
Albany and Perth, Dissolve.com.au says.
REGIONAL COMMUNITY: Liquidator Files Case Against ATO
-----------------------------------------------------
Kelmeny Fraser at The Courier-Mail reports that the Regional
Community Association of Moreton Bay, a taxpayer-funded community
association that collapsed in the wake of allegations surrounding
former MP Scott Driscoll, is embroiled in a six-figure battle with
the Australian Taxation Office.
Documents obtained by The Courier-Mail reveal the fallout over the
Driscoll controversy continues with an upcoming test case in the
Supreme Court of Queensland over tens of thousands of dollars in
taxes paid before the Redcliffe not-for-profit went bust.
According to the report, the Regional Community Association of
Moreton Bay was wound up months after it was revealed it was being
secretly controlled by the former MP when more than AUD100,000 in
consultancy work was given to Mr. Driscoll's family company
Norsefire.
Public funding of the Association, which helped the homeless and
needy, was frozen as Government agencies carried out an audit in
2013, The Courier-Mail recalls.
The RCA, which changed its name to Regional Community Association
Incorporated, was wound up in August 2013 with almost AUD110,000
in debt, including AUD53,000 in unpaid staff annual leave, the
report says.
The Courier-Mail reports that liquidator Robson Cotter has now
launched court action against the ATO to recover AUD117,616 paid
by the Association in arrears before it closed its doors.
The report relates that Robson Cotter argues in court documents
that the ATO "knew that (the Association) was insolvent or would
become insolvent as a result of making any of the payments".
The ATO has denied that it knew or should have suspected the
Association was insolvent, the report states.
RHUBARB ENTERPRISES: First Creditors' Meeting Set For April 1
-------------------------------------------------------------
Craig Shepard and Rahul Goyal of KordaMentha were appointed as
administrators of Rhubarb Enterprises Pty Ltd, Rhubarb Investments
Pty Ltd and Rhubarb (Retail) on March 20, 2015.
A first meeting of the creditors of the Company will be held at
KordaMentha, Level 24, 333 Collins Street, in Melbourne, on
April 1, 2015, at 3:00 p.m.
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C H I N A
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CHINA TELETECH: Shareholders Oust Dong Liu From Board
-----------------------------------------------------
The holders of more than a majority of the issued and outstanding
common stock of China Teletech Holding, Inc. removed Mr. Dong Liu,
without cause, from his positions as a member of the Board of
Directors of the Company and as the Chairman of the Board,
effective March 19, 2015, according to a document filed with the
Securities and Exchange Commission.
The Majority Shareholders elected Ms. Yankuan Li as the Chairwoman
of the Board, effective as of March 20, 2015.
About China Teletech
Tallahassee, Fla.-based China Teletech Holding, Inc., is a
national distributor of prepaid calling cards and integrated
mobile phone handsets and a provider of mobile handset value-added
services. The Company is an independent qualified corporation
that serves as one of the principal distributors of China Telecom,
China Unicom, and China Mobile products in Guangzhou City.
On June 30, 2012, the Company strategically sold its wholly-owned
subsidiary, Guangzhou Global Telecommunication Company Limited
("GGT"), to a third party. GGT was engaged in the trading and
distribution of cellular phones and accessories, prepaid calling
cards, and rechargeable store-value cards.
China Teletech reported a net loss of $1.96 million on
$30.9 million of sales for the year ended Dec. 31, 2013, as
compared with net income of $53,500 on $26.6 million of sales in
2012.
As of Sept. 30, 2014, the Company had $11.3 million in total
assets, $13.9 million in total liabilities and a $2.53 million
total deficit.
WWC, P.C., in San Mateo, California, issued a "going concern"
qualification on the consolidated financial statements for the
year ended Dec. 31, 2013, citing that the Company has incurred
substantial losses which raise substantial doubt about its ability
to continue as a going concern.
GUANGZHOU R&F: Ba3 CFR Not Affected by 2014 Results, Moody's Says
-----------------------------------------------------------------
Moody's Investors Service says that Guangzhou R&F Properties Co.,
Ltd.'s weak financial results and credit metrics for 2014 are
credit negative.
However, the company's Ba3 corporate family rating and stable
outlook are not immediately affected as Moody's expects the
company's key credit metrics to moderately recover in 2015 when it
progressively recognizes sales contracted in the last two years.
Moody's will closely monitor the company's contracted sales, and
financial and liquidity positions, and any deviation from the
aforesaid expectations will pressure the company's rating.
"The decline in its revenue and rise in its debt level have
weakened Guangzhou R&F's key credit metrics, pressuring its Ba3
rating," says Kaven Tsang, a Moody's Vice President and Senior
Analyst.
Guangzhou R&F's revenue dropped 4% year-on-year to RMB34.7 billion
in 2014 from RMB36.3 billion in 2013 because of slower-than-
expected sales of completed inventory against the backdrop of a
weak market in 2014.
At the same time, its total debt (including onshore perpetual
securities) rose to RMB83 billion as of December 2014 from RMB 62
billion as of December 2013, due to the company's aggressive land
acquisitions and expansion in 2013 and early 2014.
Moody's notes that the debt level (including onshore perpetual
securities) had dropped slightly from RMB84 billion as of June
2014.
As a result, Guangzhou R&F's EBITDA/interest and revenue/debt
(including onshore perpetual securities) fell to 1.5x and 42% in
2014 from 3.2x and 58% in 2013. These ratios are weak for the
company's Ba3 rating.
"Gaungzhou R&F's EBITDA/interest and revenue/debt (including
onshore perpetual securities) would moderately recover to 1.8x-2x
and 55% in 2015, as the company will recognize more sales in the
year. These ratios are still in line with our expectations for
Guangzhou R&F's Ba3 rating," adds Tsang, also the lead analyst for
Guangzhou R&F.
Moody's expectation of better revenue recognition in 2015 is based
on the company's inventory of RMB40 billion in unrecognized
contracted sales at end-2014. Around RMB30 billion of the
inventory is scheduled for delivery in 2015.
A slowdown in expansion and a planned suspension of dividend
payments for 2014 will also help the company to preserve liquidity
and to contain further growth in debt leverage.
As industry trends, Guangzhou R&F's gross margin contracted to
35.5% in 2014 from 39.2% in 2013. But this profit margin is
higher than many of its Ba-rated peers.
The company's liquidity has weakened with its cash to short-term
debt ratio dropping to 0.9x as of December 2014 from 1.3x as of
December 2013.
Its overall liquidity profile remains marginally adequate. Its
cash holding of RMB19.8 billion as of December 2014 and Moody's
estimation of an operating cash flow of around RMB10 billion in
2015 can cover its short-term debt and committed land payments.
Downward rating pressure for Guangzhou R&F could emerge if: (1)
the company's contracted sales significantly fall short of our
expectations; (2) its liquidity weakens with cash falling
substantially below its level of short-term debt; or (3) its
revenue/debt (including onshore perpetual securities) fails to
trend up to 55%, or EBITDA/interest is unlikely to recover to
1.8x-2.0x in the next 6-12 months.
Moody's further notes that Guangzhou R&F has acquired 5 new
projects in Australia. While these overseas ventures will add
execution risks to the company, they are manageable, given the
small scale of the investments with an aggregate land premium of
around RMB1.27 billion.
Established in 1994 and listed on the Hong Kong Exchange in 2005,
Guangzhou R&F Properties Co Ltd is a mid-sized developer in
China's residential and commercial properties sector. As of
Dec. 31, 2014, the company had an attributable land bank of 40.8
million sqm in 27 cities and areas -- 24 cities and areas in
China, one in Malaysia and two in Australia. Mr Li Sze Lim and Mr
Zhang Li are its co-founders and own 33.36% and 32.02% in equity
interests, respectively.
HENGSHI MINING: 2014 Results Won't Affect B1 CFR, Moody's Says
--------------------------------------------------------------
Moody's Investors Service says that Hengshi Mining Investments
Limited's weak 2014 results were within Moody's expectations and
will not immediately impact its B1 corporate family rating or
stable rating outlook.
"Hengshi's weak 2014 results were because of weak iron ore prices.
We expect that the weak prices will continue to pose challenges to
the company over the next 12-18 months," says Franco Leung, a
Moody's Vice President and Senior Analyst.
Hengshi reported a 14% year-on-year fall in revenue to RMB1.1
billion in 2014 and its adjusted EBITDA margin decreased to about
45% in 2014 from around 53% for 2013, mainly because of a 24%
year-on-year decline in the price of iron ore concentrates, which
in turn resulted in a 25% year-on-year fall in its adjusted
EBITDA.
On the other hand, Hengshi's gross debt fell to about RMB200
million at end-2014 from RMB310 million at end-2013, because the
company used its cash holdings to repay debt. The move resulted
in the company's adjusted debt/EBITDA improving to 0.4x in 2014
from 0.5x in 2013.
Moody's expects Hengshi's adjusted EBITDA margin to decrease to
about 40% over the next 12 months, mainly because of the continued
weakness in iron ore prices. Nevertheless, this level of
profitability is robust when compared with its similarly rated
mining peers, and demonstrates its strong cost competitiveness.
In addition, pressure on its profit margins is mitigated by the
continued improvement in its productivity levels and the change in
its product mix; with a focus on premium concentrates.
Moody's expects Hengshi's debt leverage to remain below 1.0x-1.5x
over the next 12 months, in the absence of a large-scale debt-
funded mine acquisition. This level of financial leverage is
strong for its B1 rating and mitigates its weaknesses in terms of
its small scale and high geographical and customer concentration.
Hengshi's liquidity profile weakened in 2014 because of a need to
fund its capital expenditures. Its cash balance fell
significantly to about RMB167 million at end-2014 from around
RMB988 million at end-2013. Moody's believes the company will
have little difficulty in refinancing any maturing debt, given its
low financial leverage and robust profitability.
LONGFOR PROPERTIES: 2014 Results Well Positions Ba1 CFR
-------------------------------------------------------
Moody's Investors Service says that Longfor Properties Co. Ltd.'s
2014 results, in particular its strong liquidity and coverage
metrics, position well its Ba1 corporate family rating with a
stable outlook.
"Specifically, Longfor is well positioned for 2015 on the back of
contracted sales growth of about 10% year-on-year, a growing
stream of rental income, a healthy level of unrecognized
contracted sales, and a strong liquidity position," says Gerwin
Ho, a Moody's Vice President and Senior Analyst.
"It continues to diversify geographically, having entered Nanjing,
Guangzhou and Foshan in 2014, and which should solidify its 2015
sales pipeline," adds Ho.
Moody's further notes that rental income grew 38.1% year-on-year
to RMB876 million and covered 31.3% of gross interest expense in
2014, up from 24.2% in 2013.
With shopping malls in Hangzhou and Chengdu commencing operation
in 2015, we expect Longfor's recurring income stream to continue
to grow over the next 12 months. As a result, Fitch projects
adjusted EBITDA/interest expenses to reach 4.0-4.5x, compared to
4.1x in 2014 and 3.8x in 2013.
Longfor's 2014 revenue grew 23% year-on-year to RMB51 billion,
with an adjusted EBITDA margin of about 22.3%. While its EBITDA
margin was in line with our expectations, delivered completions
were ahead of our expectations and reflected good execution.
Contracted sales grew 2% year-on-year to reach RMB49.1 billion in
2014, reflecting GFA growth of 7% year-on-year, while average
selling prices (ASP) declined slightly by 4% year-on-year to
RMB10,802 per sqm.
With unrecognized contracted sales of RMB52 billion at end-2014,
we expect the company to recognize total revenue of about RMB55-60
billion in 2015 and to maintain an EBITDA margin of 20% to 25%.
Moody's notes that the company has a strong track record of
management of cash collections, which will continue to support its
liquidity profile. Its cash position grew 30% YoY to RMB19.0
billion, driven by a strong cash collection rate of about 90%.
Its cash holding also rose, resulting in stronger liquidity, with
cash to short-term debt rising to 239% in 2014 from 162% in 2013.
Moody's expects adjusted debt to capitalization to remain at
around 50% in 2015, compared to 49% in 2014. Moody's expect cash-
on-hand and operating cash flow to be adequate for committed land
premiums and debt-servicing requirements in the next 12 months.
Moody's also believes that the change in the company's chief
financial officer is not expected to lead to operational
disruptions. Mr. Wei Huaning resigned as Executive Director and
CFO from March 18, 2015. Mr. Wei confirmed that he had no
disagreement with the Board.
Mr Zhao Yi was appointed as the new CFO effective the same day.
Aged 38, Mr Zhao joined the company in 2006 and has served as the
senior manager of Longfor's Chongqing Company (unrated) and the
financial controller of its Chengdu Company (unrated). Moody's do
not believe the management change will disrupt Longfor's
operations.
The principal methodology used in this rating was Global
Homebuilding Industry published in March 2009.
Longfor Properties Co Ltd is one of the leading developers in
China's residential and commercial property development sector.
Founded in 1994, the company began its business in Chongqing and
has since established a leading brand name in the municipality.
As of end-2014, it had an attributable land bank of 32.8 million
square meters in gross floor area, spanning 24 cities in five
major regions in China.
SHIMAO PROPERTY: Fitch Rates 2022 Senior Unsecured Notes 'BB+'
--------------------------------------------------------------
Fitch Ratings has assigned China-based property developer Shimao
Property Holdings Limited's (BB+/Stable) USD300 million 8.375%
senior unsecured notes due 2022 a final rating of 'BB+'.
The bonds are rated at the same level as Shimao's senior unsecured
rating as they represent direct, unconditional, unsecured and
unsubordinated obligations of the company. The assignment of the
final rating follows the receipt of documents conforming to
information already received and the final rating is in line with
the expected rating assigned on 10 March 2015.
KEY RATING DRIVERS
Contracted Sales Increased: Despite weak market conditions,
Shimao's contracted sales rose 5% to CNY70bn in 2014, as expected
by Fitch. Its 2014 contracted sales by gross floor area (GFA) rose
10% to 5.79 million sqm, but the average selling price fell 5% to
CNY12,130 per sqm. Fitch believes the company's improved internal
management through eight key regions and the implementation of an
SAP IT system allow better day-to-day management of regional
operations and sales.
Region-focused Player: Shimao has become a leading player in the
Yangtze River Delta region while maintaining operations across
China. Shimao continued to focus on key cities such as Hangzhou,
Shanghai, Ningbo, the Fujian province and the Jiangsu province.
These accounted for 70% of contracted sales in 1H14 and 2013
respectively, compared with 64% in 2012. Fitch believes Shimao can
leverage on market leadership, brand reputation, local know-how
and operational efficiency in these regions. In 1H14, around 50%-
60% of its 36.9 million sqm land bank was in the above cities.
Shift of Product Mix: To improve contracted sales Shimao adjusted
its residential property development mix to focus on first-time
home buyers and upgraded the quality of housing stock. Shimao
continues to focus on small- to medium-sized units of ranging from
below 90 sqm to 140 sqm, which accounted for 75% to 80% of its
units available for sale in 2012, 2013 and 1H14.
Stable EBITDA Margins: Shimao had EBITDA margins of 29% for 2012
and 2013 and 26.6% in 1H14. This is lower than its historical
margins of above 30%, as Shimao shifted its product mix to first-
time buyers and upgraders. However, its EBITDA margin is still
higher than its 'BB'-rated peers' of 20% to 25%. Fitch expects
Shimao to maintain its EBITDA margin at around the current level
for the next two years, but it may decline as competition
intensifies in the sector.
Delivery of Prudent Financial Strategy: During the challenging
operating environment in 2011, Shimao demonstrated operational
flexibility and prudent financial management. It slowed down land
acquisitions to conserve cash, and it was able to depend on strong
support from over 10 onshore and offshore banks, which continue to
support the company. In 2013 and 2014, Shimao actively managed its
offshore debt maturity profile by refinancing its debt ahead of
maturity. This has resulted in interest costs falling to around
7.4% in 2013 from over 8% in 2012. Fitch expects this to trend to
continue. Management's focus on maintaining both ample liquidity
and ready access to various funding channels further supports its
ratings.
Stable Operating Performance: Fitch expects Shimao to maintain a
stable operating performance and prudent financial policies in the
short to medium term. A large and well-located land bank of 36
million sqm across China and its proven track record in selective
expansion in third-tier cities and tourism properties also support
Shimao's rating.
KEY ASSUMPTIONS
Fitch's key assumptions within our rating case for the issuer
include:
-- Contracted sales by gross floor area to increase by 5% over
2015-2017;
-- Average selling price for contracted sales to increase by 3%
for 2015-2017;
-- Fitch estimates the EBITDA margin at around 23-25% in 2015-
2017
RATING SENSITIVITIES
Negative: Future developments that may, individually or
collectively, lead to negative rating action include:
-- continued weakening of the operating environment, leading to
EBITDA margin erosion below 20% (26.6% at end-June 2014 and
29.0% at end-2013)
-- aggressive debt-funded expansion leading to net debt-to-
inventory sustained above 40% (38.5% at end-June 2014 and
30.1% at end-2013)
-- Contracted sales/gross debt below 1.25x (0.94x at end-June
2014 and 1.3x at end-2013) on a sustained basis
-- Tightening liquidity due to a sustained fall in free cash
flows, or weakened access to financing channels
Positive: Future developments that may, individually or
collectively, lead to positive rating action include:
-- Longer track record of operating as a nationwide developer
with leadership in multiple cities with a sound financial
profile
SUNRISE REAL ESTATE: Hires Kenne Ruan CPA as New Accountants
------------------------------------------------------------
Sunrise Real Estate Group, Inc.'s Board of Directors engaged Kenne
Ruan, CPA, P.C., as the Company's certifying accountant to audit
its financial statements, replacing its former certifying
accountant, Finesse CPA, P.C., according to a document filed with
the Securities and Exchange Commission. Upon receipt of the
notice of the Company's acceptance of the proposal from Kenne Ruan
to audit its consolidated financial statements for the fiscal year
ending Dec. 31, 2014, Finesse resigned as the Company's certifying
accountant on March 13, 2015.
None of the reports of Finesse on the Company's financial
statements for either of the past two fiscal years contained an
adverse opinion or disclaimer of opinion, or was qualified or
modified as to uncertainty, audit scope or accounting principles,
except that the reports did contain a going concern paragraph.
During the most recent two fiscal years ended Dec. 31, 2014, and
2013, and any subsequent interim period through March 13, 2015,
the Company did not consult with Kenne Ruan regarding any
accounting matters.
The engagement of Kenne Ruan as the Company's new certifying
independent accountant was approved by the Board of Directors.
About Sunrise Real Estate
Headquartered in Shanghai, the People's Republic of China, Sunrise
Real Estate Group, Inc. was initially incorporated in Texas on
Oct. 10, 1996, under the name of Parallax Entertainment, Inc. On
Dec. 12, 2003, Parallax changed its name to Sunrise Real
Estate Development Group, Inc. On April 25, 2006, Sunrise Estate
Development Group, Inc., filed Articles of Amendment with the
Texas Secretary of State, changing the name of Sunrise Real Estate
Development Group, Inc. to Sunrise Real Estate Group, Inc.,
effective from May 23, 2006.
The Company and its subsidiaries are engaged in the property
brokerage services, real estate marketing services, property
leasing services and property management services in China.
Sunrise Real Estate reported a net loss of $1.93 million in 2013
following a net loss of $3.47 million in 2012. As of Dec. 31,
2013, the Company had $61.7 million in total assets, $58.09
million in total liabilities and $3.60 million in total
stockholders' equity.
Finesse CPA, P.C., in Chicago, Illinois, issued a "going concern"
qualification on the consolidated financial statements for the
year ended Dec. 31, 2013. The independent auditors noted that the
Company has a working capital deficiency, accumulated deficit from
recurring net losses for the current and prior years, and
significant short-term debt obligations currently in default or
maturing in less than one year. These conditions raise
substantial doubt about its ability to continue as a going
concern.
YINGDE GASES: Weak 2014 Cash Flow Pressures Ba3 CFR, Moody's Says
-----------------------------------------------------------------
Moody's says that Yingde Gases Group Co Ltd's weak cash flow in
2014 continues to pressure its Ba3 corporate family rating and the
B1 senior unsecured rating on the bonds issued by Yingde Gases
Investment Limited and guaranteed by Yingde Gases.
The ratings outlook is negative.
"Yingde Gases' 2014 results show the collection of trade
receivables and cash flow generation remains weak. The sustenance
of this situation will increase the company's debt leverage and
liquidity risk," says Jiming Zou, a Moody's Assistant Vice
President and Analyst.
Despite a robust growth in revenues and earnings, Moody's
estimates that Yingde Gases' operating cash flow stayed weak at
about RMB900 million when compared with its EBITDA of RMB2.4
billion. Despite improvement in the second half versus the first
half of 2014, the company's operating cash flow has stagnated at
the similar level of 2013.
In addition, its past-due receivables more than doubled year-over-
year to RMB837 million at end-2014, even after the incurrence of
RMB233 million in bad debt provisions.
On the other hand, Yingde Gases' revenue grew 12.4% year-over-year
to RMB7.7 billion in 2014 as it ramped up its new production
facilities. Its gross profit also rose by 16% year-on-year to
RMB2.48 billion in 2014.
The company's adjusted debt/EBITDA increased only slightly to 3.9x
in 2014 from 3.8x in 2013, as higher debt levels were somewhat
mitigated by the increased earnings.
Moody's expects Yingde Gases' operating cash flow to remain
pressured in the next 12-18 months, because its large customers in
the steel industry face a challenging operating environment and
tighter bank credit. As such, its financially weakened customers
may not have the ability or willingness to honor agreed
contractual terms.
The company's indicated capital expenditure of about RMB1.5-RMB2.0
billion in 2015 implies it will continue to rely on external
financing for business growth, as its moderate operating cash flow
will be insufficient to meet such capex needs.
In this regard, Moody's expects the company's adjusted debt/EBITDA
to increase to about 4.5x and adjusted operating cash flow to debt
to stay below 10% in the next 12-18 months. Such credit metrics
weakly position the company in the low Ba rating category.
Yingde Gases' liquidity remains weak, as its short-term debt of
about RMB2 billion, including finance leases, well exceeds its
RMB737 million cash balance at end-2014. Although the company
expects a return of about RMB400 million cash from a suspended
project with a major client in the first half of 2015, its
refinancing risk will remain elevated over the next 12-18 months.
Yingde Gases' Ba3 corporate family rating reflects its leading
position in the independent on-site industrial gas market in
China. But the rating is constrained by its heavy exposure to the
steel industry and client concentration.
Yingde Gases Group Co Ltd is one of the largest players in the
independent on-site industrial gas market in China. The company
reported RMB7.7 billion in revenues in 2014. It had a total of 64
production facilities in operation and another 27 under
development as of end-2014. The company listed on the Hong Kong
Stock Exchange in September 2009.
* CHINA: More Processing Firms Shut Down in Dongguan
----------------------------------------------------
CCTV.com reports that concerns over China's manufacturing sector
have risen as more companies move their factories overseas.
Southern China's Dongguan used to be known as "the world's
factory," but more than 400 factories there closed last year,
CCTV.com says.
Microsoft closed the factory for its Nokia division and moved all
of its equipment to Vietnam in February, CCTV.com recalls.
In 2014, 428 companies closed in Dongguan, the report discloses.
Experts said the closures were because of rising labor costs,
CCTV.com relays.
"The technology, channel and branding divisions of these companies
are not located in China; they only placed their low-end assembly
processing departments in China. As Chinese labor cost rises, and
China transitions into a mid-to-high income country, foreign
capital will inevitably move their lowest end processing work to
cheaper regions," CCTV.com quotes Zhang Yansheng from NDRC, as
saying.
CCTV.com says Shenglian Technology is the manufacturer for
touchscreen maker Wintek in Taiwan, one of Apple's main parts
suppliers. Shenglian closed in December, after Wintek filed for
bankruptcy in October because it lost out on an Apple touchscreen
deal.
CCTV.com quotes Yang Xiaotang, deputy mayor of Dongguan, as saying
that "Capital outflow has nothing to do with Dongguan's
environment, some was due to bad operations themselves."
CCTV.com relates that Mr. Yang said traditional labor-intensive
processing companies took the biggest hit in the shutdown wave.
More than 90 percent of the closed factories had investments of
lower than US$3 million, the report notes.
=========
I N D I A
=========
ANOOP FORGINGS: ICRA Reaffirms B- Rating on INR4cr Packing Loan
---------------------------------------------------------------
ICRA has re-affirmed the long-term rating of [ICRA]B- outstanding
on the INR7.56 crore fund based bank facilities of Anoop Forgings
Private Limited. ICRA has also re-affirmed a short-term rating of
[ICRA]A4 outstanding on the INR4 crore fund based and INR2 crore
non-fund based bank facilities of AFPL. Utilization of the total
fund based limits (excluding working capital term loan) must not
exceed INR6 crore and utilization of total fund based and non-fund
based limits must not exceed INR8 crore at any point in time.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit Long-Term 3.00 [ICRA]B-/Re-affirmed
Packing Credit LT 4.00 [ICRA]B-/Re-affirmed
Working Capital 0.56 [ICRA]B-/Re-affirmed
Term Loan Long-Term
FOBP/FOBNLC/FOUBNLC (4.00) [ICRA]A4/Re-affirmed
(sub limit of packing
credit) Short-Term
Non-Fund Based Limits 2.00 [ICRA]A4/Re-affirmed
Indian Letter of
Credit (ILC) Short-Term
The re-affirmation of the ratings takes into account AFPL's weak
financial profile characterized by stretched capital structure
arising out of high debt levels and low net worth, weak debt
coverage indicators, and tight liquidity position on account of
high working capital intensity of operations as reflected in
consistently high utilization of fund based limits. The ratings
also factor in AFPL's modest scale of operations, with a weak
order-book position that hinders revenue visibility in the near
term; its exposure to high customer concentration risks, and
vulnerability of its profitability to unfavourable movements in
foreign exchange rates in the absence of a firm hedging mechanism.
ICRA also notes that as of December 31, 2014, AFPL's debtors
included certain receivables that have been outstanding for over
three years which are equivalent to over 23% of its net worth.
Consequently, any write-off of such debtors could have a material
adverse impact on AFPL's credit profile, and therefore constitutes
a rating sensitivity factor.
The ratings, however, favourably factor in the long standing
experience of the promoters in the steel forging industry with an
established relationship with its clients, which has enabled the
company to garner repeat orders over the years. The ratings also
take into account the improvement in profit margins in FY14, and
geographically diversified operations with significant presence in
the exports market. ICRA also notes that the group has a presence
in machining of forged products, which has helped reduce the lead
time for manufacturing.
Anoop Forgings Pvt. Limited (AFPL) was incorporated in 1994, and
is engaged in the manufacturing of closed die forgings. The
company is currently operating with an installed capacity of 2,000
tons per annum at its manufacturing facility at Murbad (near
Thane), Maharashtra. It manufactures gears, shafts and nuts for
the automobile and farm equipment sectors, and various types of
flanges and pipe fittings for the petrochemical industry. AFPL
caters to suppliers of major oil and gas companies as well. The
company had initially started out with the domestic market, but by
2001 it began exporting its products. It supplies both machined
and un-machined forgings (rough forgings) that are supplied in
material grades, such as alloy steel, carbon steel and stainless
steel.
BANSAL SHIP: CRISIL Reaffirms B+ Rating on INR50MM Bank Loan
------------------------------------------------------------
CRISIL's ratings on the bank facilities of Bansal Ship Breakers
(BSB) continue to reflect BSB's small scale of operations, and its
vulnerability to cyclicality in the fragmented shipping industry
and to changes in government regulations. The rating also reflects
the firm's below average financial risk profile marked by low net
worth and below average debt protection metrics. These rating
weaknesses are partially offset by the extensive industry
experience of the firm's promoter.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Letter of Credit 150 CRISIL A4 (Reaffirmed)
Letter of Credit 50 CRISIL B+/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility 50 CRISIL B+/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that BSB will continue to benefit over the medium
term from its promoters' extensive experience in the ship-breaking
industry. The outlook maybe revised to 'Positive' if BSB's sales
and profits increase more than expected, without deterioration in
its working capital cycle. Conversely, the outlook may be revised
to 'Negative' if the firm's operating margin declines
significantly, most likely because of a sharp decline in scrap
prices.
Update
Having undertaken ship breaking activity for only two ships for
the nine months ended December 2014; BSB's revenues are expected
to sharply decline to INR90 million in 2014-15 (refers to
financial year, April 1 to March 31) from INR323.2 million in
2013-14 on account of subdued business environment. The firm had
bid for lesser ships following volatility in foreign exchange
prices in 2013-14. However, given that most of the firm's costs
are variable in nature; BSB's operating margins are expected to
remain at 2-2.5 per cent over the medium term. CRISIL believes
that while the firm will continue to operate at reduced scale of
operations, it will sustain operating margins over the medium
term.
The firm's financial risk profile continues to remain below-
average with low expected net worth of INR23-25 million as on
March 31, 2015. Additionally, BSB's interest coverage is expected
to remain below-average at 1.7-1.9 times for 2014-15 on account of
low operating margins. CRISIL believes that low level of expected
accretion to reserves along with absence of capital infusion will
continue to constrain the firm's below-average financial risk
profile.
The firm has adequate liquidity with absence of term debt
obligations and low utilisation of bank limits. BSB utilised 26
per cent of bank limit for the 12 months ended November 2014
following reduced scale of operations. Additionally, the firm
continues its practise of creating fixed deposits with receipts
from scrap sales activities to meet one-time letter of credit
(created for purchase of ship) retirement obligations. According
to CRISIL, periodic creation of fixed deposits to meet letter of
credit payments significantly supports the firm's liquidity
profile.
Set up in 1993, BSB undertakes ship-breaking activity in
Maharashtra and Gujarat. The firm, promoted by Mr. B C Bansal,
undertakes ship-breaking activity at Mazagaon in Mumbai
(Maharashtra), where plots are made available for short periods as
per ships in hand. The promoter has been in the ship-breaking
business for the past 35 years.
For 2013-14, BSB reported a profit after tax (PAT) of INR1.7
million on net sales of INR323.2 million, against a PAT of INR2.4
million on net sales of INR387.3 million for 2012-13.
BHAVIN STEEL: ICRA Reaffirms B+ Rating on INR8cr Cash Credit
------------------------------------------------------------
ICRA has reaffirmed the long-term rating at [ICRA]B+ assigned to
the INR8.00 crore fund-based limits of Bhavin Steel Private
Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-based limits 8.00 [ICRA]B+ reaffirmed
Cash credit
The reaffirmation of the rating takes into account the long
standing experience of the promoters of the company in metal
trading business and the low price fluctuation risk on account of
zero inventory maintained by the company. Nonetheless, the rating
continues to remain constrained by the company's moderate scale of
operations and thin profitability margins on account of intense
competition and limited value adding nature of the trading
business. The rating also reflects the company's stretched capital
structure characterised by weak coverage indicators. ICRA has also
taken into consideration the inherent cyclicality and intensely
competitive nature of the steel industry.
Incorporated in 2007, BSPL is engaged in the business of trading
of TMT bars, structural steel and cement. BSPL purchases steel
from medium-sized manufacturers in Maharashtra and sells them to
real estate developers and contractors in Mumbai and its nearby
areas. Mr. Dharmendra Shah and Mr. Bhavin Shah are the key
directors of the company who look after overall operations of the
company.
In FY2014, BSPL registered a Profit after Tax (PAT) of INR0.33
crore on an operating income of INR87.35 crore. As per unaudited
results for the first six months of FY2015, the company reported a
PAT of INR0.18 crore on an operating income of INR52.61 crore.
CAPARO ENGINEERING: CARE Revises Rating on INR350.13cr Loan to B
----------------------------------------------------------------
CARE revises the ratings assigned to bank facilities of Caparo
Engineering India Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 350.13 CARE B (Revised from
CARE B to CARE D
and then upgraded to
CARE B)
Short-term Bank Facilities 100 CARE A4 (Revised from
CARE A4 to CARE D
and then upgraded to
CARE A4)
Rating Rationale
The revision in the ratings assigned to the bank facilities of
Caparo Engineering India Ltd. (CEIL) to 'CARE D' [Single D]
factors in instances of past delays in servicing of debt
obligations.
The subsequent revision in the rating to CARE B [Single B/CARE A4
[A Four] takes into account the improvement in the debt-servicing
track record of the company. The ratings continue to derive
strength from its experienced and resourceful promoters with
demonstrated funding support over the years and CEIL's strong
business association with major auto manufactures in India.
The ratings, however, continued to be constrained by the weak
financial risk profile marked by continued losses at the net
level, moderate capital structure, weak debt coverage indicators
and liquidity position. The rating is also constrained by the
working capital intensive nature of business operations and
cyclicality associated with the auto industry.
Going forward, the ability of the company to profitably scale up
the operations, while managing its working capital requirements
and register an improvement in its capital structure shall remain
the key rating sensitivities.
Caparo Engineering India Ltd (CEIL) incorporated in May 2000, is
engaged in the manufacturing of auto components viz. sheet metal
components, tubes and fasteners. The company's product range
includes outer body panel, large inner panels, brackets, frame
add-on parts, fasteners, Electric Resistance Welded (ERW) tubes
and cold-drawn welded tubes for automobile Original Equipment
Manufacturers (OEMs).
Currently, the company has 16 manufacturing plants located at
various locations across India. The company has changed its
accounting period from calendar year to financial year and has
reported results for 15 months as on March 31, 2014.
During FY14 (refers to the period January 1 to March 31), CEIL
registered a PBILDT of INR90.82 crore and a net loss of INR104.05
crore, respectively, on a total operating income of INR791.87
crore. During 9MFY15 (refers to the period April 1 to
December 31), the company has reported total operating income of
approximately INR495 crore with a PBILDT of approximately INR50
crore.
CURE LIFE: CARE Reaffirms D Rating on INR18.06cr LT Bank Loan
-------------------------------------------------------------
CARE reaffirms ratings assigned to bank facilities of Cure Life
Care Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 18.06 CARE D Reaffirmed
Rating Rationale
The reaffirmation of the rating assigned to the bank facilities of
Cure Life Care Private Limited (CLPL) was on account of continued
delay in debt repayment. Establishing a clear debt servicing
track record with improvement in the liquidity position remains
the key rating sensitivity.
CLPL was incorporated in 2011 to manufacture intra-venous (IV)
fluid under form-fill-seal (FFS) technology. The company is
currently setting up a manufacturing unit in Tapi, Gujarat and the
project is planned to be executed in two phases. Initially the
company plans to cater to the domestic pharmaceutical players.
CLPL is expected to commence its operations from April 2015
onwards.
DB MALLS: ICRA Suspends 'B' Rating on INR401cr LT Loan
------------------------------------------------------
ICRA has suspended the long-term rating of [ICRA]B assigned
earlier to the INR401 crore fund-based bank facilities of DB Malls
Private Limited. The suspension follows ICRA's inability to carry
out a rating surveillance in absence of the requisite information
from the company.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term fund-based 401.00 [ICRA]B Rating Suspended
bank facilities
DB Malls Private Limited (DB Malls) was incorporated in June-2006
and is a part of Dainik Bhaskar Group with promoters holding 100%
stake. DB Malls owns and operates DB City Mall in Bhopal (Madhya
Pradesh), which started its commercial operations in August-2010.
The mall has a total built-up area of 13.5 lakh square feet and
leasable area of around 8.5 lakh square feet, spread across retail
outlets, commercial offices and a hotel.
ECOBOARD INDUSTRIES: ICRA Cuts Rating on INR23cr Loan to D
----------------------------------------------------------
ICRA has revised the long-term rating assigned to the INR39.00
crore fund based facilities of Ecoboard Industries Limited to
[ICRA]D from [ICRA]C+. ICRA has also revised the short-term rating
assigned to the INR6.00 crore non-fund based facilities of the
company to [ICRA]D from [ICRA]A4.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based Limits 23.00 [ICRA]D from [ICRA]C+
Fund Based Limits 16.00 [ICRA]D from [ICRA]C+
Non-Fund Based 6.00 [ICRA]D from [ICRA]A4
Limits
The rating revision reflects the delays in debt servicing, due to
stretched liquidity position of the company.
Ecoboard Industries Limited, formerly known as Western Bio Systems
Ltd., was incorporated in 1991 as a public limited company. The
company manufactures particle boards and undertakes turnkey
implementation of environment-friendly effluent treatment projects
(referred to as its bio-systems business). The firm is engaged in
two lines of business -- particle boards and bio systems. The
particle board business involves manufacturing and sale of wood-
free particle boards from non-conventional renewable materials
such as agro-residue; while bio systems involves the supply and
erection of effluent treatment plants for distilleries and allied
industries.
EMARK ENERGISERS: CRISIL Reaffirms B Rating on INR50MM Loan
-----------------------------------------------------------
CRISIL's rating on the long-term bank facilities of Emark
Energisers Pvt Ltd (EEPL) continues to reflect EEPL's weak
financial risk profile, marked by a small net worth, high gearing,
and weak debt protection metrics.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 50 CRISIL B/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility 17.2 CRISIL B/Stable (Reaffirmed)
Term Loan 22.8 CRISIL B/Stable (Reaffirmed)
The rating also factors in the company's small scale of operations
compared with large players in the automotive battery industry,
and the susceptibility of its margins to raw material price
fluctuations. These rating weaknesses are partially offset by the
promoters' extensive industry experience and their funding
support.
Outlook: Stable
CRISIL believes that EEPL will continue to benefit over the medium
term from its promoters' extensive industry experience and the
funding support extended by them. The outlook may be revised to
'Positive' in case of a significant increase in the company's
scale of operations and profitability and further improvement in
its working capital cycle. Conversely, the outlook may be revised
to 'Negative' in case of deterioration in EEPL's liquidity, most
likely because of low cash accruals or unprecedented stretch in
its working capital cycle.
Update
For 2014-15 (refers to financial year, April 1 to March 31), EEPL
is likely to register net sales of around INR130 million, a growth
of 12 per cent from INR115.9 million in 2013-14 back by steady
addition to its customer base. The company's operating
profitability is expected to increase to around 12 per cent on
account of better prices from newer contracts and is expected to
remain at 12 per cent to 13 per cent over the medium term.
EEPL's financial risk profile remains average, with modest net
worth, high gearing and modest debt protection metrics. The
company's gearing is expected to be around 3.51 times in 2014-15,
mainly because of its modest net worth of INR27.6 million which in
turn has remained modest because of low accretions to reserves.
The company's financial risk profile will remain average marked by
modest networth, high gearing and modest debt protection metrics
over the medium term.
EEPL has stretched liquidity. For 2014-15, EEPL is likely to
register cash accruals of INR7.3 million. However, the company's
term debt of INR2.5 million has been repaid largely from its bank
lines of INR50 million, which remained utilised at an average of
97 per cent through January 2015. Over the medium term, its cash
accruals are expected to be at INR8 million to INR9 million
against which its term debt obligations are INR2.5 million.
EEPL's operations are working capital-intensive, as reflected in
its expected large inventory of 160 days for March 31, 2015. As a
result, the company's gross current assets are expected to be
around 200 days for March 31, 2015.
EEPL, incorporated in 2011 in Mumbai, is promoted by Mr. Mahesh
Kumar Shah and his son, Mr. Ishan Mahesh Shah. The company
manufactures automotive and tubular batteries used largely in the
automotive industry and also solar batteries.
GANGA DIAGNOSTIC: ICRA Reaffirms B Rating on INR13.99cr Term Loan
-----------------------------------------------------------------
ICRA has reaffirmed [ICRA]B rating to the INR13.99 crore (reduced
from INR20.61 crore) fund based facilities of Ganga Diagnostic and
Medical Research Center Private Limited. ICRA has withdrawn the
short term rating of [ICRA]A4 outstanding on the INR12.00 crore
non fund based bank limits (sub-limit of fund based facility) of
GDMRL.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based Limit- 13.99 [ICRA]B Reaffirmed
Term Loan
Non Fund Based (12.00) [ICRA]A4 Withdrawn
Limits
The rating reaffirmation takes into account the weak financial
profile characterized by high gearing and weak coverage
indicators, significant debt repayment obligations which are
likely to impact the cash flows in the near term and the
operations remains vulnerable to stiff competition from other low-
cost laboratories within hospitals as well as other organized and
unorganized established diagnostic centers in the vicinity. ICRA
however takes into account the comprehensive range of diagnostic
services provided at the centre. The rating continues to derive
comfort from GDMRL's strong promoter profile and their regular
funding support to scale up the operations and collaborations made
by the company with reputed hospitals, doctors and corporate
sector in the near vicinity for referral cases. Going forward, the
ability of GDMRL to increase its scale of operations and
profitability along with limited reliance on the promoters for
timely servicing of debt obligations will remain key rating
sensitivities.
GDMRL was incorporated in 2010 and started its commercial
operations from 2012. The company is engaged in providing
radiology and pathology diagnostic services. FY13 was the first
year of operations of the company.
The promoters of the company are part of the Vandana Group of
companies based in Raipur, Chhattisgarh; the operations of the
Vandana group are looked after by Mr. Subhash Agarwal and Mr.
Ashok Agarwal, who are also the directors of GDMRL. The principal
area of operations of the Vandana group includes steel
manufacturing.
GDMRL reported a profit after tax (PAT) of INR0.79 crore in 2013-
14 on an operating income (OI) of INR5.57 crore. 2012-13 was the
first year of commercial operations of the company.
GROVER IMPEX: ICRA Reaffirms 'B+' Rating on INR2.0cr FB Loan
------------------------------------------------------------
ICRA has reaffirmed [ICRA]B+ rating for the INR2.00 crore fund
based limits and [ICRA]A4 rating for the INR6.50 crore non fund
based limits of Grover Impex Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based limits 2.00 [ICRA]B+ reaffirmed
Non Fund Based Limits 6.50 [ICRA]A4 reaffirmed
The rating reaffirmation takes into account modest scale of
operations of the company which coupled with high intensity of
competition in the industry has resulted in low profitability and
weak coverage indicators. Given the nature of the business in
which the company is operating, ICRA does not expect any
significant improvement in profitability indicators in the medium
term. Further, majority of the product procurement is through
imports (in USD) and the import payables are not hedged by the
company exposing the company to exchange rate fluctuations.
Further, the profitability of the company will remain exposed to
fluctuations in market prices of commodities traded, given that
most trading transactions are not on a back to back basis.
However, the ratings favourably factor in long experience of the
promoters in agro commodity trading and company's established
relationships with its customers which results in repeat orders.
Going forward, the ability of the company to increase its scale of
operations while maintaining adequate profitability and a prudent
capital structure will be the key rating sensitivities.
Grover Impex Private Ltd (GIPL) is a closely held company and has
been promoted by Mr. Deepak Daing and Mr Pawan Kumar Jain. The
company was incorporated in 1982 as Grover Tankers Pvt Ltd and was
initially engaged in transportation of edible oils. In 2008 the
company started trading in agro commodities. GIPL imports agro
commodities from countries such as Indonesia, Vietnam, China etc
and sells it primarily in the domestic market.
The company reported a net profit of INR0.19 crores on an
operating income of INR27.08 crores in FY2014 as against net
profit of INR0.20 crores on an operating income of INR27.21 crores
in FY2013.
HEAVY METAL: CARE Lowers Rating on INR78.04cr LT Loan to B
----------------------------------------------------------
CARE revises/reaffirms rating assigned to bank facilities of Heavy
Metal & Tubes Ltd.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 78.04 CARE B Revised from
CARE BB+
Short-term Bank Facilities 140.00 CARE A4 Reaffirmed
Rating Rationale
The revision in the ratings of the bank facilities of Heavy Metal
& Tubes Ltd (HMTL) take into account net loss incurred by it
during FY14 (refers to the period April 1 to March 31) due to sub-
optimal utilization of its hot finished carbon steel (HFCS) pipe
manufacturing facility along with foreign currency fluctuation
loss and consequent stretched liquidity which resulted in the
company approaching its lenders for debt restructuring.
The ratings continue to be constrained by the susceptibility of
its profitability to volatile raw material prices and foreign
currency exchange rate fluctuation; its high leverage, weak debt
coverage indicators, high working capital intensity of operations
and its presence in a competitive industry.
The ratings, however, continue to draw strength from HMTL's
established track record of operations in Carbon Steel (CS)
and Stainless Steel (SS) tube business as well as its experienced
promoters.
HMTL's ability to quickly turn around the operations of its HFCS
division, manage volatility associated with raw material price and
foreign currency exchange rate fluctuation along with improvement
in its profitability and capital structure would be the key rating
sensitivities.
Incorporated in 1991, HMTL is engaged in the manufacturing of CS
and SS based seamless tubes and pipes and welded pipe. HMTL
backward integrated to manufacture HFCS pipes in FY12. HMTL's
products find application in condensers, heat exchangers, boilers,
pressure vessels, instrumentation, hydraulic and pneumatic systems
used in industries such as oil & gas refineries, steel plants,
power plants, fertilizers etc.
As per the audited results for FY14, HMTL incurred a net loss of
INR11.67 crore on a total operating income (TOI) of INR275.43
crore as against a PAT of INR0.65 crore on a TOI of INR272.35
crore in FY13.
ISHITA BUILDCON: CARE Reaffirms B Rating on INR10cr LT Loan
-----------------------------------------------------------
CARE reaffirms the rating assigned to the bank facilities of
Ishita Buildcon Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 10 CARE B Reaffirmed
Rating Rationale
The rating assigned to the bank facilities of Ishita Buildcon
Private Limited (IBPL) continues to remain constrained on account
of its moderate scale of operation, thin profit margins inherent
to trading industry, leveraged capital structure, weak debt
coverage indicators and working capital intensive operations with
elongated operating cycle. Further, the rating is also constrained
on account of seasonal and fragmented nature of agro product
industry and risks associated with change in government
regulations. The rating factors in the increase in operating
income and cash accruals along with elongation of working capital
cycle during FY14 (refers to period April 1 to March 31).
The ratings, however, derives strength from experience of
promoters and proximity to paddy growing areas.
The ability of IBPL to increase its scale of operations and
improvement in the profitability and capital structure while
managing working capital efficiently is the key rating
sensitivity.
IBPL incorporated on September 08, 2010 at Bhopal, Madhya Pradesh
is promoted by Mr. Ashok Anand along with his sons Mr. Gagan Anand
and Mr. Raman Anand. IBPL is engaged in trading of cereals
primarily rice (both basmati and non-basmati). IBPL is located in
Bhopal, Madhya Pradesh and procures cereals from the farmer and
local market and sells the same to rice milling units directly as
well as through agents.
The promoters also manage Anand Warehousing and Anand & Anand
Associates. The former operates a warehouse on lease rental basis
and has 2 lakh sq.ft of owned warehousing space which is also used
by IBPL while latter is engaged in investing in real estate
assets.
As per the audited results for FY14, IBPL reported a total
operating income (TOI) of INR26.16 crore (FY13:19.05 crore) with a
PAT of INR0.12 crore (FY13: 0.02 crore). As per provisional
results of 10MFY15, IBPL has achieved TOI of INR24.17 crore.
JAIN AGENCIES: ICRA Reaffirms B+ Rating on INR10cr Cash Credit
--------------------------------------------------------------
ICRA has reaffirmed the long term rating of [ICRA]B+ to the
INR10.00 crore cash credit facility of Jain Agencies.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based Limit- 10.00 [ICRA]B+ Reaffirmed
Cash Credit
The rating reaffirmation takes into consideration the trading
nature of business characterized by low profitability, also its
modest scale of current operations along with a fixed territory
within which the company needs to operate, as earmarked by its
principal, limits growth opportunities and geographical
diversification in future. ICRA notes that reduction in area under
coverage by Samsung since January 2014 has resulted in low sales
volume in the current fiscal. The rating also takes into account
the low bargaining power of the company against strong profile of
its only supplier Samsung Electronics India Limited. However, ICRA
notes that the company has taken distributorship of ONIDA CRT in
January 2014 which is likely to diversify its product profile to
some extent. The rating continues to derive comfort by the
established track record of the partners in product distribution
business in the state of Assam and its association with a leading
brand like Samsung with steady growth outlook for the consumer
durables industry in India.
Jain Agencies was established in August 2012 as a partnership
firm. It deals in electronic consumer durable goods such as
television, refrigerator, air conditioners, etc. The firm has
entered into a dealership agreement to distribute products of
Samsung Electronics India Limited in the state of Assam.
Jain Agencies reported a profit after tax (PAT) of INR0.21 crore
in 2013-14 on an operating income (OI) of INR51.21 crore. 2012-13
was the first year of commercial operations of the firm.
JAYAHO AGRI: CRISIL Cuts Rating on INR120MM Cash Loan to D
----------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facilities
of Jayaho Agri Ventures Private Limited (JAVPL) to 'CRISIL D' from
'CRISIL B/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 120 CRISIL D (Downgraded from
'CRISIL B/Stable')
The rating downgrade reflects overdrawn working capital limit for
more than 30 days. The delays have been caused on account of
weakening of the company's liquidity owing to large working
capital requirements.
The rating continues to reflect JAVPL's large working capital
requirements and below-average financial risk profile, marked by
small net worth, high gearing, and below-average debt protection
metrics. These rating weaknesses are partially offset by the
benefits that JAVPL derives from its promoters' extensive industry
experience and its established relations with clients.
Incorporated in 2009, JAVPL trades in tobacco. The company is
promoted by Mr. Nagothu Sleeva Raju and his family members.
KANCHESHWAR SUGAR: CARE Reaffirms B+ Rating on INR89.79cr Loan
--------------------------------------------------------------
CARE reaffirms the rating assigned to the bank facilities of
Kancheshwar Sugar Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 89.79 CARE B+ Reaffirmed
(Fund-based)
Rating Rationale
The rating assigned to the bank facilities of Kancheshwar Sugar
Limited (KSL) continues to be constrained by its financial risk
profile marked by highly leveraged capital structure, working
capital intensive nature of operations and cyclical and seasonal
nature of the sugar industry and associated agro-climatic risks.
The rating, however, derives strength from the qualified and
experienced promoters, successful commissioning of the partially
integrated sugar unit and strategic location of the sugar factory
thereby ensuring adequate cane availability.
The ability of KSL to procure the envisaged volume of sugar cane
at the envisaged prices, improve its debt protection metrics and
effective management of the working capital are the key rating
sensitivities.
Kancheshwar Sugar Limited (KSL) was incorporated in July 2011 to
undertake manufacturing of sugar and sugar related products at
Osmanabad, in Solapur, Maharashtra. KSL is promoted by Mr Dilip B
Mane, Chairman & managing director (CMD) along with Mr Sanjeev
Kumar Jadhav (CEO) and Mr Pravin D More as Technical Director. KSL
has setup a partially integrated sugar production unit with an
installed capacity of 3,500 tonnes of cane crushed per day (TCD)
and cogeneration power unit of 15 mega-watts (MW).
The sugar plant is located in Village Manglur, Taluka Tuljapur,
Osmanabad, Maharashtra. The erection of the partially integrated
sugar plant of KSL commenced in September 2013 and was completed
in November 2014. Sugar Season (SS) 2014-15 is the first crushing
season of the company and KSL commenced commercial production from
January 4, 2015.
KSL has signed power purchase agreement (PPA) with Maharashtra
Electricity Distribution Company Limited for the offtake of the
surplus power from the co-generation unit of the plant post
captive consumption.
In the ongoing crushing season KSL has crushed sugar cane to the
tune of 1.48lakh MT (from January 04, 2015 to February 26, 2015)
as per the crushing report dated February 26, 2015. FY15 (refers
to the period of April 01 to March 31) is the first full year of
commercial operation of the company.
KARTHIK INDUCTIONS: CARE Reaffirms B Rating on INR6cr Bank Loan
---------------------------------------------------------------
CARE reaffirms the rating assigned to the bank facilities of
Karthik Inductions Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 6 CARE B Reaffirmed
Short-term Bank Facilities 12.75 CARE A4 Reaffirmed
Rating Rationale
The ratings assigned to the bank facilities of Karthik Inductions
Limited (KIL) continue to remain constrained on account of weak
financial risk profile characterised by decline in the total
operating income in FY14 (refers to the period April 1 to
March 31), highly leveraged capital structure, low profitability
margins and weak liquidity position. The ratings also factor
in the customer concentration risk with a majority of sales to the
group companies, cyclical nature of the steel industry and
susceptibility of margins to volatility in the raw material
prices. The ratings continue to factor in the experience of the
promoters and KIL's established track record in the iron and steel
industry.
The ability of the company to increase the scale of operations,
and effectively manage its working capital requirements remain the
key rating sensitivities.
KIL was incorporated in the year 1994 by Mr B. Raghvendra. The
company was established in order to support the group's operations
by way of backward integration through manufacturing of mild steel
(MS) ingots and billets and its byproducts, viz, runners and
risers. The company procures (sponge iron, pig iron and MS scarp)
required raw material from domestic market and has a manufacturing
plant (leased) in Kundaim, Goa. The company has installed capacity
of 37,200 MTPA with average utilisation of around 64% from last 3
years ending FY14.
KIL's group companies are Karthik Alloys Limited (KAL, rated 'CARE
D') and Rukminirama Steel Rolling Private Limited (RSRPL, rated
'CARE D'). KIL, is the backward integration of the group in the
steel manufacturing value chain and supplies majority of its
production to group companies which are engaged in the
manufacturing of TMT bars, structured steel and steel rolled bars.
In FY14, KIL earned PAT of INR0.23 crore on a total operating
income of INR 69.64 crore against PAT of INR0.36 crore on a
total operating income of INR83.92 crore in FY13.
KISAN AGRO: CARE Reaffirms B+/A4 Rating on INR17cr Bank Loan
------------------------------------------------------------
CARE reaffirms the ratings assigned to the bank facilities of
Kisan Agro Product Industries.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term/Short-term 17.00 CARE B+/CARE A4
Bank Facilities Reaffirmed
Short-term Bank
Facilities 2.80 CARE A4 Reaffirmed
Rating Rationale
The ratings assigned to the bank facilities of Kisan Agro Product
Industries (KAPI) continue to be constrained on account of its
thin profitability, leveraged capital structure and weak debt
coverage indicators. Furthermore, the ratings are also constrained
on account of its highly working capital intensive nature of
operations resulting in tight liquidity, susceptibility of its
profitability to fluctuations in castor seed price and its
presence in the highly fragmented and seasonal castor oil/seed
industry.
The ratings, however, derive strength from the vast experience of
the partners with an established track record of operation, its
proximity to raw material producing area and its diversified
customer base having a presence in the domestic and overseas
markets.
The ability of KAPI to improve its profitability and capital
structure through efficient working capital management would
be the key rating sensitivities.
Kisan Agro Product Industries (KAPI) is a group entity of
Palanpur-based (Gujarat) Kisan Group. KAPI is a partnership firm
established in 1995 by Mr Ramanbhai Patel and other three members
of the Patel family. The firm is engaged in manufacturing of
castor oil and castor de-oiled cake (DOC) through solvent
extraction. It also carries out the trading of castor seed, castor
oil and castor DOC. KAPI has an installed capacity of 100 Metric
Tonnes Per Day (MTPD) for solvent extraction and 100 MTPD for seed
crushing as on March 31, 2014.
Promoters of the group are also engaged in a similar line of
business through their other entities. Kisan Proteins Private
Limited (KPPL; rated CARE B+ / CARE A4) and Kisan Oleochem &
Derivatives Pvt. Ltd. being the major ones among them.
As per the audited results for FY14 (refers to the period April 1
to March 31), KAPI reported a total operating income of INR146.18
crore (FY13: INR148.34 crore) and PAT of INR0.11 crore (FY13:
INR0.10 crore). As per the unaudited results for 10MFY15, KAPI
reported a total operating income of INR123.04 crore and PBILDT of
INR3.64 crore.
KISAN MOULDINGS: ICRA Cuts Rating on INR137cr Cash Loan to D
------------------------------------------------------------
ICRA has downgraded the long-term rating assigned to the INR85.70
crore term loan and INR137.00 crore fund based limits of Kisan
Mouldings Limited (KML) from [ICRA]BB- with a negative outlook to
[ICRA]D. ICRA has also downgraded the short-term rating assigned
to the INR55.30 crore non-fund based limits of KML from [ICRA]A4.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based Limits- 85.70 [ICRA]D; downgraded from
Term Loans [ICRA]BB-(Negative)
Fund based Limits- 137.00 [ICRA]D; downgraded from
Cash Credit [ICRA]BB-(Negative)
Non fund based 55.30 [ICRA]D; downgraded from
Limits [ICRA]A4
The downgrade in ratings reflects the delays in debt servicing by
the company owing to stretched liquidity position on account of
loss making operations, high working capital intensity in the
operations and high finance costs. ICRA notes that the company's
financial risk profile has deteriorated in 9m FY 2015 owing to
weak demand conditions, intense competitive pressures in the
business and also on account of inventory losses due to sharp
decline in prices of raw materials (which are crude linked) in Q3
FY 2015.
The ratings are further constrained by the company's high debt
repayment obligations till FY 2017 and low profitability levels in
the business. ICRA notes that the company has plans to monetise
the non-core assets so as to improve its liquidity profile in the
near term; however, the progress has remained slow. Further, while
the company is undertaking consolidation of operations to trim its
high fixed cost structure and improve the operational
efficiencies, the actual impact of the same on the company's
financial profile remains to be seen. Ability of the company to
scale up volumes, pass on any increase in raw material prices to
its customers and improve net profitability remains critical from
the credit perspective.
ICRA however positively takes note of the company's established
market position in PVC pipes and fittings business across India
supported by a wide dealer network & long standing experience of
the promoters in the business. The rating also factors in the
company's wide product portfolio and high geographic penetration.
Incorporated in 1989 as a private company under the name Sanwaria
Synthetics Private Limited, Kisan Mouldings Limited (KML) is
engaged in manufacturing and sales of Poly-vinyl chloride (PVC)
pipes & fittings, micro irrigation systems and moulded furniture.
The name of the company was changed to "Kisan Mouldings Limited"
in 1993. KML is promoted by the Aggarwal family viz. Mr. Ramesh
Aggarwal, Mr. Sanjeev Aggarwal, Mr. Satish Aggarwal, Mr. Ashok
Aggarwal and Mr. Vijay Aggarwal.
The company operates plants in Maharashtra, at Mahagaon, Tarapur,
Silvassa and Roha which cater mainly to the Western Region, while
the other plants commissioned in Raipur (Chhattisgarh), Jaipur
(Rajasthan), Dewas (Madhya Pradesh) and Baddi (Himachal Pradesh)
essentially cater to markets in the Northern and Eastern Regions.
However, the company has shut operations at the Raipur and Jaipur
plants. The operations of the Roha and Silvassa undertakings were
de-merged from a group company, Kisan Irrigations Ltd. and merged
into KML in July 2011.
In FY 2014, the company has reported Profit After Tax (PAT) of
INR2.33 crore on an operating income (OI) of INR536.35 crore.
During 9m FY15, the company has reported loss of INR20.94 crore on
an OI of INR339.62 crore (unaudited).
KISAN PROTEINS: CARE Reaffirms B+/A4 Rating on INR9.5cr Bank Loan
-----------------------------------------------------------------
CARE reaffirms the ratings assigned to the bank facilities of
Kisan Proteins Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term/Short-term 9.50 CARE B+/CARE A4
Bank Facilities Reaffirmed
Rating Rationale
The ratings assigned to the bank facilities of Kisan Proteins
Private Limited (KPPL) continue to be constrained on account
of its thin profitability, leveraged capital structure and weak
debt coverage indicators. Furthermore, the ratings are also
constrained on account of its highly working capital intensive
nature of operations resulting in tight liquidity condition, its
presence in the highly fragmented mustard oil industry, and
susceptibility of its profitability to the fluctuations in mustard
seed price.
The ratings, however, derive strength from the vast experience of
the promoters with an established track record of operation and
easy availability of raw materials with diversified customer base
hiving presence in the domestic and overseas markets.
The ability of KPPL to increase its scale of operations along with
improvement in the profitability and capital structure through
efficient working capital management are the key rating
sensitivities.
Kisan Proteins Private Limited (KPPL) is a group entity of
Palanpur-based (Gujarat) Kisan Group. KPPL is a private limited
company incorporated in 2005 by Mr Manubhai Patel and other
members of Patel family. The company is primarily engaged in
solvent extraction from the rapeseed and mustard seed. It also
carries out the trading of caster seed, castor oil and castor DOC.
KPPL has an installed capacity of 6,000 Metric Tonnes Per Annum
(MTPA) for solvent extraction as on March 31, 2014.
Promoters of the group are also engaged in similar line of
business through their other entities. Kisan Agro Product
Industries (KAPI; rated CARE B+ / CARE A4) and Kisan Oleochem &
Derivatives Pvt. Ltd. being the major ones among them.
As per the audited results for FY14 (refers to the period April 1
to March 31), KPPL reported a total operating income of INR55.15
crore (FY13: INR60.46 crore) and PAT of INR0.13 crore (FY13:
INR0.14 crore). As per the unaudited results for 10MFY15, KPPL
reported a total operating income of INR17.02 crore.
LODHA DEVELOPERS: Fitch Gives Final 'B+' Rating to US$200MM Notes
-----------------------------------------------------------------
Fitch Ratings has assigned India-based Lodha Developers Private
Limited's (Lodha; B+/Stable) USD200 million 12% senior unsecured
notes due on 13 March 2020 a final rating of 'B+' and Recovery
Rating of 'RR4'. The final rating follows the receipt of documents
conforming to information already received, and is in line with
the expected rating assigned on March 4, 2015.
The notes were issued by Lodha Developers International Limited
(Lodha Mauritius). Lodha Mauritius is a wholly owned subsidiary of
Lodha, and the notes are unconditionally and irrevocably
guaranteed by Lodha and its key subsidiaries. The notes are
therefore rated at the same level as Lodha's Long-Term Issuer
Default Rating of 'B+'.
For more information on the structure of the transaction, please
refer to the press release entitled "Fitch Assigns 'B+(EXP)' to
Lodha Developers' US Dollar Notes", dated 4 March 2015, available
on www.fitchratings.com.
KEY RATING DRIVERS
Deleveraging Slower Than Expected: Lodha's leverage, as measured
by net debt to inventory less customer advances, is high at 84% at
end-December 2014 compared to its rating peers, and above our
previous expectations. Leverage has increased from 77% at FYE14
(fiscal year ended 31 March 2014) because of expected land
purchases and investments in its overseas ventures, as well as
slower-than-expected cash collection from contracted sales. The
slower cash collection is a result of a shift in its FY15 sales
mix towards newer projects rather than the mature projects
originally planned, due to slower-than-expected construction
progress in some of the mature developments. Fitch currently
expects leverage to remain high at around 65% at FYE16, and reduce
thereafter to below 55%, which is the threshold above which
negative rating action may be considered.
Nevertheless, any unanticipated land purchases over the next 18
months, or the management's limited ability to improve the pace of
construction of its large projects or accelerate its overall cash
collections, or any other factor that may impede Lodha's
deleveraging progress, could result in negative rating action.
Largest Domestic Developer: Lodha is the largest India-based
residential real estate property developer based on sales. The
company has demonstrated strong execution capabilities in high-end
residential developments in Mumbai. Lodha's contracted sales for
the 11 months to end-February 2015 are INR75bn, and the company is
broadly on track to meet its FY15 sales targets. Lodha's land bank
of 25 million square meters is among the largest among Indian
developers, with the land valued at over USD10bn by external
valuers. The company expects its current land bank to support
developments and sales over the next seven years.
Project Concentration: Lodha's rating reflects its high
concentration in a few projects despite the considerable scale of
its operations. Its four largest projects will account for nearly
80% of contracted sales in FY15, reducing to around 60% in FY19.
Furthermore, a majority of Lodha's medium-term sales are focused
in the high-end and luxury segments, which are defined by the
company as properties with per square foot prices of over
INR20,000 (USD325) and over INR50,000 respectively. For the 18
months to 15 September 2014, over 60% of the company's INR106.3bn
sales stemmed from these two market segments. Sales within these
segments typically exhibit higher correlation with economic
cycles, and therefore are generally more volatile, owing to
consumers' ability to delay their purchase decisions.
KEY ASSUMPTIONS
Fitch's key assumptions within our rating case for the issuer
include:
-- 10% growth in annual contracted sales in FY16
-- Leverage reduces to 65% by FYE16, and to below 55% thereafter
-- Contracted sales / gross debt increases to 1.1x at FYE16
(end-December 2014: 0.8x)
-- EBITDA margin remains above 40% in FY15 and FY16
(end-December 2014: 46%)
RATING SENSITIVITIES
Positive: Future developments that may, individually or
collectively, lead to a positive rating action include:
-- Lower project concentration, with no single project
accounting for more than 15% of contracted sales on a
sustained basis
-- High sales turnover, with contracted sales/gross debt
maintained at over 1.2x
Negative: Future developments that may, individually or
collectively, lead to a negative rating action include:
-- Total debt net of cash / inventory less customer advances
sustained above 55%
-- Contracted sales / gross debt sustained below 1x
-- EBITDA margin sustained below 25%
LODHA DEVELOPERS: Moody's Rates Notes Ba3, Outlook Stable
---------------------------------------------------------
Moody's Investors Service has assigned a definitive Ba3 corporate
family rating (CFR) to Lodha Developers Private Limited (LDPL) and
also assigned a Ba3 rating to the notes issued by Lodha Developers
International Limited and guaranteed by LDPL.
The outlook on the ratings is stable.
RATINGS RATIONALE
Moody's assignment of the definitive rating follows the company's
completion of the bond issuance and Moody's review of the final
terms and conditions of the bonds.
The provisional (P)Ba3 rating was assigned on Nov. 24, 2014.
Moody's rating rationale was set out in a press release published
on the same day.
"LDPL's rating remains supported by its position as the largest
residential property developer in India in terms of contracted
sales, the high quality of its projects under construction and its
strong execution capability, as well as its track record of
delivering high-rise apartments," says Vikas Halan, a Moody's Vice
President and Senior Credit Officer.
The rating is further supported by the company's strong ability to
sell its products, as evident from its performance during the
downturn in the Indian real estate market over the past two years.
The rating is also supported by the diversity of its project
portfolio with 49 projects, in multiple phases, contributing to
sales for the next five years.
On the other hand, the rating is constrained by LDPL's weak
margins and credit metrics, both of which are expected to improve
as it starts recognizing higher revenues from its current projects
and as the subsequent phases of its Palava City development
project attract higher prices.
"The rating is also constrained LDPL's concentration in the Mumbai
Metropolitan Region and its focus on residential properties.
Fitch expects the company's liquidity will improve following the
bond issuance and that its credit metrics will strengthen over the
next two years, as key projects reach revenue-recognition
thresholds," says Halan.
As of end-December 2014, the company's reported secured debt to
total assets ratio was about 39%. The bonds will be subordinated
to the claim of these secured lenders and hence are exposed to
structural subordination risk.
"Nevertheless the bonds are rated at the same level as LDPL's Ba3
rating, as the structural subordination risk is largely mitigated
by protection provided to bondholders under the bond covenants
that require the company to hold land at Palava City -- on an
unencumbered basis -- with a value 4.0x the amount of the
outstanding bonds during their tenure," says Halan, who is also
the Lead Analyst for LDPL.
The company will have its land bank independently valued each year
to demonstrate compliance with this covenant.
The land at Palava City that is not under any development project
and that is therefore largely unencumbered was valued -- in a
valuation report contained in the bonds' offering circular -- at
about 29.0x the amount of the bonds. As such, LDPL's land bank
provides a significant buffer against possible fluctuations in the
land value, thus mitigating market risk.
The market value of the company's assets is substantially higher
than their book value, which are stated at cost price. As a
result of this high market value the ratio of secured debt to the
market value of asset -- as per the valuation report -- was low at
14.6% at end-December 2014. Moody's expects this ratio to decline
to about 13.5% as the company uses part of the bond proceeds to
pay down some of the secured debt.
Moody's would consider notching the bonds from the CFR to reflect
subordination if the protection provided to bond holders
deteriorates either because of a decline in the market value of
the company's assets or a decline in the value of the unencumbered
assets relative to the amount of unsecured debt.
Metrics indicative of such downward rating pressure include a)
secured debt to the market value of the assets rising above 15%-
20%; or b) the value of its unencumbered assets to unsecured debt
declining below 6x.
The stable outlook reflects Moody's expectation that LDPL will
substantially achieve its sales and collection targets, execute
its construction plans without material delays, and remain prudent
in its Indian land acquisitions over the next 2-3 years.
An upgrade over the next two years is unlikely, as Moody's expects
LDPL's credit metrics will remain weakly positioned for its rating
over this period.
Upward rating pressure could emerge beyond the fiscal year ending
March 2017(F2017) if the company successfully executes its
projects and increases its margins. Specifically, Moody's would
consider upgrading the ratings if LDPL (1) maintains a cash
balance of above 150% of debt maturing over the next 12 months;
and (2) maintains strong financial discipline, such that
revenue/debt is above 100% and EBTIDA/interest is above 4.0x on a
sustained basis.
Downward rating pressure could emerge if (1) the company's
liquidity and operating cash flow generation deteriorate because
of weak contracted sales or aggressive land acquisitions; (2)
there is a decline in prices for its products, slower-than-
expected revenue recognition, or a fall in profit margins,
negatively affecting interest coverage and/or financial
flexibility; or (3) the company engages in material debt-funded
acquisitions.
Metrics indicative of such downward rating pressure include cash
and cash equivalents falling below 100% of debt maturing over the
next 12 months, and/or deteriorating credit metrics, with
EBITDA/interest stays under 3.0x beyond F2017.
LDPL is the largest real estate developer in India in terms of
sales of residential apartments. For nine months ended December
2014, the Company reported contracted sales of INR54.7 billion.
The company also has the largest land bank in the country,
totaling about 481 msf in saleable area as of September 2014.
LDPL is focused on residential development in the Mumbai
Metropolitan Region with some projects in nearby Pune. More
recently, the company along with its promoters has expanded into
the London market by acquiring two properties, now in the process
of development. LDPL is privately held by the Lodha family.
MANDOVI MINERALS: CRISIL Reaffirms D Rating on INR81.9MM LT Loan
----------------------------------------------------------------
CRISIL's rating on the long-term back facilities of Mandovi
Minerals Pvt Ltd continues to reflect instances of delay by
Mandovi Minerals in servicing its term debt; the delays have been
caused by the company's weak liquidity, driven by its large
working capital requirements.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 20 CRISIL D (Reaffirmed)
Long Term Loan 81.9 CRISIL D (Reaffirmed)
Proposed Long Term
Bank Loan Facility 68.1 CRISIL D (Reaffirmed)
Mandovi Minerals has a below-average financial risk profile,
marked by small net worth, aggressive gearing, and inadequate debt
protection metrics. Moreover, the company is exposed to intense
competition in the fragmented industrial sands market and is
susceptible to regulatory changes. However, the company benefits
from its promoters' extensive industry experience and the fund
support from its promoters and associate company.
Mandovi Minerals was promoted in 2004 by Mr. Shivaji Mendon and
Mrs. Rama Mendon. It manufactures washed and dry silica sand.
NAGA SINDHU: CRISIL Reaffirms D Rating on INR144.5MM Term Loan
--------------------------------------------------------------
CRISIL's ratings on the bank facilities of Naga Sindhu Spinning &
Ginnning Mills Pvt Ltd (Naga Sindhu) continue to reflect instances
of delay by Naga Sindhu in servicing its term debt. The delays
have been caused by the company's weak liquidity.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 100 CRISIL D (Reaffirmed)
Proposed Cash
Credit Limit 20.6 CRISIL D (Reaffirmed)
Term Loan 144.5 CRISIL D (Reaffirmed)
Naga Sindhu has modest scale of operations in the intensely
competitive cotton yarn industry, has large working capital
requirements, and its profitability margins are susceptible to
volatility in cotton prices. The company has a below-average
financial risk profile marked by its small net worth, high
gearing, and below-average debt protection metrics. However, Naga
Sindhu benefits from its promoters' extensive experience in the
textile industry.
Naga Sindhu was set up in 2006 by Mr. Sarikar Rao Kandru and his
family members. The company manufactures cotton yarn. Its spinning
unit is located in Guntur district in Andhra Pradesh.
NEETY INT'L: ICRA Assigns SP 4D Grading on Weak Fin'l Strength
--------------------------------------------------------------
ICRA has assigned a 'SP 4D' grading to Neety International (NI),
indicating the 'Weak Performance Capability' and 'Weak Financial
Strength' of the channel partner to undertake off-grid solar
projects. The grading is valid for a period of two years from
February 23, 2015 after which it will be kept under surveillance.
Grading Drivers
Strengths Longstanding experience proprietor in trading of solar
products business Forward integration of the operations with group
entity-Neety Euro Asia Solar Energy being engaged in the
manufacturing of solar modules
Risk Factors Small scale of operations Large number of organized/
unorganized players indicating high level of competition may lead
to difficulties in getting client contracts and may pressurize
margins Small size of projects executed for installation solar
panels
Fact Sheet
Year of Establishment: 2005
Office Address:
4FF, Shree Nagar Society, opp. Golden Triangle
SP Stadium Road, Ahmedabad
Proprietor: Mr. Falgun Bhatt
Neety International (NI) was established as a proprietorship firm
by Mr. Falgun Bhatt in the year 2005. The firm trades in solar
products such as solar wafers, solar cells and also executes small
projects for assembly and installation of solar power projects;
mostly sub-contracted by group entity-Neety Euro Asia Solar
Energy. The facility of the company is located in Ahmedabad,
Gujarat. Since, the beginning of PV based operations, the
promoters have installed PV based products totalling to about 0.54
MW. The clientele of the company consists of private customers.
SI Related Business - Weak Performance Capability
Promoter Track Record:
Neety International(NI) was established in 2005 as a
proprietorship concern of Mr. Falgun Bhatt. Mr. Bhatt has rich
experience (10 years) in the trading of solar products such as
solar wafers, solar cells etc. As regards to the experience in
manufacturing solar products and assembly, the promoters have a
moderate experience (~5 years). The promoters have an experience
of manufacturing, assembling and installing around 0.54 MW solar
photovoltaic products till date through associate concern Neety
Euro Asia Energy Solutions. NI carries out small solar
installation projects (mainly sub contracted by Neety Euro Asia
Solar Energy). Further, with establishment of Neety Euro-Asia
Solar Energy in 2010, the promoters commenced manufacturing,
assembly and installation of solar photovoltaic products. Prior to
establishment of Neety International in 2004, Mr. Falgun Bhatt had
a partnership stake in Jaguar Shipping and Logistic Private
Limited. The promoters have developed a dealership network
consisting of ~5-6 dealers across various states. Technical
competence and adequacy of manpower: NI currently employs ~5-6
employs who look after purchase, finance and marketing. The
promoters have demonstrated its technical ability by installing
and executing several projects translating to about ~0.54 MW till
date through their entity Neety Euro Asia Solar Energy (NEASE).
The products manufactured by the NEASE have ISO 9001:2008
certifications, ISO 14001:2004 certifications and TUV
certifications. Additionally, these products are approved by the
Ministry of New and Renewable Energy(MNRE). Quality of suppliers
and tie ups: Neety International is engaged in trading of solar
products such as solar wafers, solar cells etc. The firm mostly
imports its primary raw materials, solar cell and glass, from
China and Taiwan based companies. The suppliers are selected based
on their past track record, quality of the products and only after
the products are tested for accuracy and reliability. The
components supplied are subjected to testing at regular interval.
Customer and O&M Network: NI's clientele consists of private
customers who buy solar cells or panels to install in the
projects. The firm also has ~5-6 dealers spread across Gujarat,
Rajasthan, Uttar Pradesh, Tamilnadu, Karnataka. All the dealers
except for the dealer located in Uttar Pradesh, none is exclusive
to the firm (dealership network remains same for Neety Euro Asia
Solar Energy and Neety International). Quality and timely
deliverables have led to satisfactory feedback from customers.
Financial Strength - Weak
Revenues: INR4.05 Cr. for FY 2015 (provisional)
Return on Capital Employed (RoCE): 22.46%
Total Outside Liabilities/Tangible Net worth: 2.63 times
Interest Coverage Ratio: 10.76 times
Net-Worth: Networth position of the company is INR0.60 crore as on
31st March, 2014
Current Ratio: 1.40 times
Relationship with bankers:
The banker is satisfied with the performance of the accounts
The overall financial profile of the firm is weak.
NESTOR PHARMACEUTICALS: ICRA Reaffirms C+ Rating on INR51cr Loan
----------------------------------------------------------------
ICRA has reaffirmed its [ICRA]C+ rating on the INR51.00 crore bank
facilities of Nestor Pharmaceuticals Limited. ICRA has also
reaffirmed its short term rating of [ICRA]A4 on the INR16.00 crore
non fund based limits. The unallocated long term/short term
ratings for INR8.00 crore have been reaffirmed at
[ICRA]C+/[ICRA]A4.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based 51.00 [ICRA]C+; Reaffirmed
Facilities (CC)
Non Fund Based 16.00 [ICRA]A4; Reaffirmed
Facilities (LC/BG)
Unallocated LT/ST 8.00 [ICRA]C+/[ICRA]A4; Reaffirmed
The rating reaffirmation takes into account the continuing
consolidated net losses for NPL and the fact that these have
widened in 2013-14 relative to the previous year, which was
substantially on account of the weak performance of its UK
subsidiaries. The ratings also factor in the high working capital
intensity of the company with NWC/OI* at 50.4% as on March 31,
2014, this is largely on account of the company's large exposure
to African markets, which have a long receivables cycle; however,
the working capital intensity is expected to reduce going forward
due to the company moving towards a distributor based model in
Africa. ICRA also takes note of the closure of the company's UK
manufacturing operations, which had a total external debt of
INR28.18 crore, the repayment of which could lead to further
stress on the company's liquidity. ICRA also notes the company's
stretched financial risk profile with high gearing and weak debt
coverage indicators. However, the ratings positively factor in the
long experience of the promoters in the formulation business,
healthy growth in the formulations business and the company's
diversified geographic presence. The ratings also factor in the
company's healthy order book from the domestic government supplies
business.
Going forward, the ratings would remain sensitive to NPL's ability
to increase its profitability and manage its liquidity position
and continued support from promoters.
In 2013-14, NPL reported a consolidated operating income (OI) of
INR120.9 crore and net losses of INR12.6 crore as against an OI of
INR111.0 crore and net losses of INR10.3 crore in the previous
year.
Incorporated in 1975 by the Sehgal family, NPL manufactures and
markets a wide range of branded and generic formulations. Nestor
has two umbrella brands under which products are marketed globally
'Nestor' which is an established brand and 'Steriheal' which is
being developed as a 'hygiene for health' brand.
NINE GLOBE: ICRA Puts 'D' LT Rating on Notice for Withdrawal
------------------------------------------------------------
ICRA has placed the long term rating of [ICRA]D assigned to the
INR5.00 crore fund based bank facilities of Nine Globe Builders on
notice for withdrawal for one month. As per ICRA's 'Policy on
Withdrawal of Credit Rating', the aforesaid ratings will be
withdrawn after one month from the date of this withdrawal notice.
OCEAN CONSTRUCTIONS: ICRA Reaffirms B Rating on INR50.23cr Loan
---------------------------------------------------------------
ICRA has reaffirmed the long-term rating of [ICRA]B to the
INR12.00 crore fund based, INR4.77 crore term loan, INR11.00 crore
non-fund based and INR50.23 crore unallocated facilities of Ocean
Constructions (India) Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based- 12.00 [ICRA]B Reaffirmed
Cash Credit
Fund based- 4.77 [ICRA]B Reaffirmed
Term Loan
Non-fund based- 11.00 [ICRA]B Reaffirmed
Bank Guarantee
Unallocated 50.23 [ICRA]B Assigned
The reaffirmation of rating is constrained by the execution risk
due to the large pending order book size and historical low scale
of operations within the civil construction business and the
relatively low value additive nature of contracts leading to
significant competition and consequent pressure on margins. The
company is also exposed to high geographic and sector
concentration with orders executed mainly in the irrigation sector
in Karnataka. The ratings are further constrained by the
stretching of liquidity also resulting into high utilization of
the working capital limits. The ratings also factor in the high
'Total Outside Liabilities/Tangible Net Worth' of 5.26 times as on
31st March 2014 as the working capital requirements of the company
are largely funded by creditors. However the assigned ratings take
comfort from the 16 year long experience of the promoters in the
civil construction business and established relationship with
reputed clients resulting in repeat work orders. The ratings also
positively factor in the large order book size of INR423.49 Crore
as on 28th February 2015 (10.09 times of operating income of FY14)
that provides revenue visibility for the medium term and
significant improvement in the OI in 9M, FY15 due to higher
execution during the period.
M/s Ocean Constructions, a proprietorship firm set up in 2006 and
owned by Mr. Sharfuddin Ali Mulki was taken over by Ocean
Constructions India Private Limited (OCIPL, incorporated in 2008)
in April, 2013. OCIPL, promoted by Mr. Sharfuddin Ali and his
brothers Mr. Inayath Ali and Mr. Abid Ali undertakes civil
contracts involving irrigation canals, aqueducts, site grading &
levelling and road works in Karnataka mainly for government
clients including Karnataka Neeravari Nigam Limited, Krishna
Bhagya Jala Nigam Ltd, Public Works Department (Karnataka),
National Mineral Development Corporation and Mangalore City
Corporation. Ocean Constructions previously undertook sub-
contracting works for private companies including Shapoorji
Pallonji and company Ltd and AMR India Ltd.
According to audited financials, the company has recorded a profit
after tax of INR1.76 crore on an operating income of INR41.97
crore during FY 2013-14 as against a profit after tax of INR1.17
crore on an operating income of INR32.33 crore during FY 2012-13.
PAE LTD.: CARE Revises Rating on INR15cr LT Bank Loan to B+
-----------------------------------------------------------
CARE revises ratings assigned to bank facilities of PAE Ltd.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 15.00 CARE B+ Revised from
CARE BB
Long term/Short term Bank 5.00 CARE B+/CARE A4
Facilities Revised from
CARE BB/CARE A4
Rating Rationale
The revision in ratings takes into account continuing weakness in
business profile of the company with subdued demand, low market
penetration of its indigenous brands and highly competitive
trading nature of business leading to pressure on its
profitability. The ratings are further constrained by negative net
worth and stretched liquidity following cash losses.
The ratings, however, continue to be driven by experience of its
promoters and PAE's wide spread presence with pan India
distribution network.
Going forward, ability of PAE to revive its operations & make them
profitable remains key rating sensitivity.
Incorporated in 1950 as a distributor of auto electric components,
PAE Ltd (PAE) is presently operational in two segments viz Power
products and Auto components. In its power products segment, PAE
is engaged in marketing and distribution of lead storage batteries
(for automotive and industrial application) and power backup
systems; while in the Auto component segment it operates as a
distributor of automotive parts. Additionally, the company has
forayed into solar energy space through its various subsidiaries
which are engaged in developing, marketing and distribution of
solar panels and operates 2 solar power plants of 1 MW each. Over
the years PAE has developed pan-India presence.
PAE registered total income of INR96 crore and net loss of INR16
crore in FY14 (refer to period April 01 to March 31) as against
total income of INR141 crore and net loss of INR15 crore in FY13.
PATEL COTTON: CARE Assigns B Rating to INR14.89cr LT Bank Loan
--------------------------------------------------------------
CARE assigns 'CARE B' rating to the bank facilities of Patel
Cotton Industries.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 14.89 CARE B Assigned
The ratings assigned by CARE are based on the capital deployed by
the partners and the financial strength of the firm at present.
The ratings may undergo a change in case of withdrawal of capital
or the unsecured loans brought in by the partners in addition to
the financial performance and other relevant factors.
Rating Rationale
The rating assigned to the bank facilities of Patel Cotton
Industries (PCI) are constrained on account of its modest scale of
operations, thin profitability margins and high working-capital
intensive operation. The rating is further constrained by
presence in a fragmented and cyclical cotton industry along with
susceptibility of business to changes in Government policies.
The rating, however, continues to derive strength from the vast
experience of the promoters of PCI in the cotton ginning
business and its proximity to the cotton ginning region of
Gujarat.
PCI ability to significantly scale up its operations, improve its
profitability margins as well as capital structure and
effectively manage its working capital requirement would be the
key rating sensitivities.
Rajkot based, PCI was formed in 1997 as a partnership firm.
Currently there are four partners in the firm. Mr. Rajnikant
Ghodasara is the key managing partner and looks after the overall
management of the firm. PCI is involved in the business of cotton
ginning & pressing. As on March 31, 2014 PCI had an installed
capacity of manufacturing 14300 metric tone per annum (MTPA)
increased from 6500 MTPA as on March 31, 2013.
Based on audited FY14 (refers to the period April 1 to March 31),
PCI reported a total operating income (TOI) of INR116.31 crore
with a profit after tax (PAT) of INR0.20 crore as against a TOI of
INR84.90 crore with a PAT of INR0.74 crore in FY13. Further, as
per the provisional results for 10MFY15, the firm had reported
total sales of about INR127 crore.
PRABHU CREATIONS: CARE Assigns B+ Rating to INR7.97cr LT Loan
-------------------------------------------------------------
CARE assigns 'CARE B+' rating to the bank facilities of Prabhu
Creations Pvt. Ltd.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 7.97 CARE B+ Assigned
Rating Rationale
The rating assigned to the bank facilities of Prabhu Creations
Pvt. Ltd. (PCPL) is primarily constrained on account of its
nascent stage of operations with moderate profitability, working
capital-intensive nature of operations and fragmented industry
leading to intense competition from organised as well as
unorganised players.
The rating, however, derives comfort from PCPL's experienced and
resourceful promoters and comfortable capital structure and debt
coverage indicators.
The ability of PCPL to increase its scale of operations with
improvement in profit margins and stabilisation of the project
while managing its working capital requirements efficiently are
the key rating sensitivities.
Ahmedabad-based (Gujarat) PCPL is a private limited company
established in 2006 by Mrs Shital Patel and Ms Neeta Patel. The
overall operations of the PCPL are managed by Mr Manish Patel
(husband of Mrs Shital Patel), acting as CFO of the company. PCPL
did not have any major operations till FY12 (refers to the period
April 1 to March 31) and was engaged in the trading of laminated
sheets (0.7-1 mm varieties). In FY13, management decided to enter
into the manufacturing of laminated sheet and had set up
manufacturing facility in two phases at Mehsana with an installed
capacity of 19.20 lakh tons per annum (LTPA). The commercial
production for the first phase with production capacity of 9.2
LTPA began in FY13 and second phase was completed in February
2014.
During FY14, PCPL reported a TOI of INR18 crore and PAT of INR0.39
crore as against a TOI of INR10.06 crore and a PAT of INR0.36
crore during FY13. Furthermore, as per the provisional results for
11MFY15, PCPL has registered a turnover of INR18 crore.
PRAHLAD ISPAT: ICRA Assigns B Rating to INR7.75cr Cash Credit
-------------------------------------------------------------
ICRA has assigned its rating of [ICRA]B to the INR7.75 crore bank
facilities of Prahlad Ispat Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 7.75 [ICRA]B; assigned
Facilities
ICRA's rating takes into account the company's modest scale of
operations and the highly competitive and fragmented nature of the
industry it operates in, with the presence of numerous players in
both the organized and the unorganized sectors. This has resulted
in low capacity utilisation and low sales realisations, which have
translated into low profitability and weak return indicators. The
rating also factors in the company's high working capital
intensity with NWC/OI of 30% for 2013-14; the high working capital
intensity is on account of the high level of receivables, of which
46% have been outstanding for more than six months. The rating
also takes into account the company's weak financial profile with
weak coverage indicators and high TOL/TNW. The company also has a
stretched liquidity position, as reflected in the overutilization
of its bank limits. However, the ratings derive comfort from the
proximity of the company to the majority of its customers,
suppliers and ease of access to raw materials. The ratings also
derive comfort from the established brand name of Shri Krishna TMT
in the local market.
Going forward, the ability of the company to bring about a
sustained improvement in its profitability and liquidity, will be
the key rating sensitivities.
In 2013-14, PIPL reported an operating income (OI) of INR52.70
crore and a profit after tax (PAT) of INR0.13 crore, as against an
OI of INR63.61 crore and a PAT of INR0.08 crore in the previous
year.
PIPL was incorporated in 2003 and was acquired by the Mittal
family in 2009. The registered office and the manufacturing plant
of the company are both located at Firozabad, Uttar Pradesh. PIPL
is engaged in the manufacturing of Mild Steel (MS) bars and MS
rolls with a cumulative installed capacity of 43,200 Metric Tonnes
(MT) per annum. The company sells its MS bars under the registered
brand name Shri Krishna TMT, through its marketing team.
QUALITY RICE: CRISIL Reaffirms B+ Rating on INR180MM Cash Loan
--------------------------------------------------------------
CRISIL's rating on the long-term bank facilities of Quality Rice
Exports Pvt Ltd (QREPL) continues to reflect its modest scale of
operations and below-average financial risk profile, marked by a
small net worth and subdued debt protection metrics. These rating
weaknesses are partially offset by the extensive experience of
QREPL's promoters in the rice processing industry, and its
established relationships with customers.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 180 CRISIL B+/Stable (Reaffirmed)
Warehouse Financing 70 CRISIL B+/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that QREPL will continue to benefit over the
medium term from its promoters' extensive experience in the rice
milling industry. The outlook may be revised to 'Positive' in case
of a significant increase in the company's revenue and
profitability, leading to an improvement in its financial risk
profile. Conversely, the outlook may be revised to 'Negative' if
QREPL's revenue and profitability decline, or its working capital
cycle stretches, resulting in weak financial risk profile.
Update
QREPL is expected to register an operating income of INR940
million to INR950 million in 2014-15 (refers to financial year,
April 1 to March 31), an year-on-year increase of around 11 per
cent, driven by higher demand from the company's existing customer
base. Its operating margin, however, is expected to remain at 4.0
to 4.5 per cent in 2014-15, in line with its operating margin of
4.24 per cent in 2013-14. The company's operations are working
capital intensive, as reflected in its high gross current assets
(GCAs); the GCAs are expected to be 180 to 200 days as on March
31, 2015 driven by high inventory of 160 days expected as on that
date; the GCAs were at 185 days as on March 31, 2014. Owing to its
working-capital-intensive nature of operations, QREPL's fund-based
limits were highly utilised at an average 95 per cent during the
12 months ended December, 2014.
QREPL's financial risk profile has been weak, marked by high
gearing, which is expected at over 7 times as on March 31, 2015;
its interest coverage and net cash accruals to total debt (NCATD)
ratios are also expected to be weak at around 1.3 times and 0.01
times, respectively, for 2014-15. The company's weak financial
risk profile is driven by heavy reliance on external debt to fund
its working capital requirement, and its small net worth.
QREPL reported a profit after tax (PAT) of INR1.3 million on net
sales of INR851.4 million for 2013-14, as against a PAT of INR1.1
million on net sales of INR746 million for 2012-13.
QREPL was incorporated in 2006 by Mr. Surinder Bansal along with
his brother Mr. Pawan Bansal. The company is engaged in milling
and sorting of paddy into par-boiled rice, broken rice, and rice
bran. It has paddy milling and sorting facilities at Patran
(Punjab).
R.K ICE: CARE Lowers Rating on INR25cr Bank Loan to D
-----------------------------------------------------
CARE revises the rating assigned to bank facilities of R.K Ice &
Cold Storage.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term/Short-term 25 CARE D/CARE D
Bank Facilities Revised from
CARE B+/CARE A4
Rating Rationale
The revision in the rating assigned to the bank facilities of R.K
Ice & Cold Storage (RKICS) is primarily because the account has
turned NPA due to default in its debt servicing.
RKICS was established as a partnership firm in 1991 by the
Khetalpar family of Mangrol (Gujarat). Headed by Mr Ratilal
Khetalpar and his four sons, the firm is engaged in the export of
seafoods such as squid, ribbon fish, cuttlefish and shrimp,
primarily to China, Europe and the Middle East. The firm has a
processing facility at Mangrol with an installed capacity of
60 tonnes per day for the processing of seafood and a cold storage
facility with a capacity of 1,400 tonnes for preserving processed
seafood.
RAMAKRISHNA ELECTRONICS: CARE Reaffirms B+ INR30cr Loan Rating
--------------------------------------------------------------
CARE reaffirms the ratings assigned to the bank facilities of
Ramakrishna Electronics.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 30 CARE B+ Reaffirmed
Rating Rationale
The rating assigned to the bank facility of Ramakrishna
Electronics (RE) continue to be constrained by its modest scale of
operations in a highly competitive and fragmented industry,
financial profile marked by thin profitability, highly leveraged
capital structure, weak debt coverage indicators and elongated
operating cycle. The ratings are also constrained due to limited
financial flexibility owing to its constitution as a partnership
firm, working capital intensive operations and high dependence on
demand from the cyclical consumer durable industry. The ratings
also factor in the decline in cash accruals despite an increase in
total operating income along with deterioration in capital
structure and elongation of working capital cycle in FY14 (refers
to the period April 1 to March 31).
However, the rating continues to derive strength from the
experience of the promoters in the consumer durable industry
and long track of operations with established network.
The ability of the firm to increase its scale of operations in
light of stiff competition, maintain profitability with effective
management of working capital and improvement in overall financial
risk profile are the key rating sensitivities.
Ramakrisha Electronics (RE) is a partnership firm established in
April, 2000 by Mr V Raghavenrdra, Mr V Ravi Kumar, Mrs V
Rajeshwari, Mrs V Neelima, Mr V Anantha krishna, Mr G Ramaiah, Mr
G Seshamma and Mrs V Nagarekha. The firm is engaged in
distribution and trading (retail and wholesale) of consumer
electronic products and home appliances. The firm has its
registered office and show room located at Kurnool with other
retail show rooms located at Ananthapur, Nadhyala, Madhanapally,
Thandapathi, Kadiri and Guntakal in Andhra Pradesh. The firm
distributes consumer durables of some major brands which include
Sony and LG electronics goods in and around Andhra Pradesh. The
firm has discontinued its operation in Telangana state during FY14
due to an increase in service tax on trading of consumer durables.
During FY14, RE reported a PAT of INR0.07 crore on a total
operating income of INR76.75 crore as against PAT of INR0.08
crore and a total operating income of INR67.16 crore in FY13.
SAA VISHNU: CARE Assigns B+ Rating to INR14.29cr LT Bank Loan
-------------------------------------------------------------
CARE assigns 'CARE B+' rating to the bank facilities of SAA Vishnu
Bakers Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 14.29 CARE B+ Assigned
Rating Rationale
The rating assigned to the bank facilities of Saa Vishnu Bakers
Private Limited (SVBPL) are primarily constrained by its small
scale of operation with low bargaining power, leveraged capital
structure with moderate debt service coverage indicators and high
repayment obligation. The rating also factor in operational risks
with respect to product quality, risk of non-renewal of contract
and intense competition. The above constraints far outweigh the
comforts derived from the experience of the promoters, assured tie
up with "Parle Biscuits Pvt Ltd" and continuous growth in the
scale of operations with healthy operating margin.
The ability of the company to grow its scale of operations and
improve its profit margins, the ability to improve its capital
structure and effective working capital management would be the
key rating sensitivities.
Saa Vishnu Bakers Pvt Ltd (SVBPL) incorporated in January 30, 2009
was promoted by Mr Ashok Dalmiya and Mr Aditya Dalmiya (son of Mr
Ashok Dalmiya) of Jaipur. The company commenced operations in
2011. The manufacturing facility of the company is located at
Ranchi, Jharkhand with an installed capacity of manufacturing
54,720 metric tonnes of biscuits per annum. The company is a
contract manufacturer of biscuits and has an agreement with Parle
Biscuits Pvt Ltd (PBPL), a subsidiary of Parle Products Private
Limited (PPPL).
During FY14 [refers to the period April 1 to March 31], the
company reported a total operating income of INR17.71 crore
(FY13: INR15.81 crore) and a PAT of INR0.06 crore (FY13: net loss
of INR0.15 crore). Furthermore, the company have achieved turnover
of INR8.45 crore during 9MFY15 ending on December 31, 2014.
SHARPLINE AUTOMATION: ICRA Cuts Rating on INR7.05cr Loan to D
-------------------------------------------------------------
ICRA has revised the long-term rating assigned to the INR6.77
crore fund based bank facilities of Sharpline Automation Private
Limited to [ICRA]D from [ICRA]B assigned to the company. ICRA has
also revised the short-term rating assigned to the INR7.05 crore
fund based/non-fund based bank facilities of SAPL to [ICRA]D from
[ICRA]A4 assigned to the company.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term fund- 3.15 [ICRA]D from [ICRA]B
based limits
Term loans 3.62 [ICRA]D from [ICRA]B
Short-term fund 7.05 [ICRA]D from [ICRA]A4
based/non-fund
based limits
The rating revision takes into account irregularities witnessed in
debt servicing by the company in the recent past.
Incorporated in 1995, Sharpline Automation Private Limited (SAPL)
is in the business of retrofitting and reconditioning of machine
tools with CNC components and refurbishing mechanical components
as required by the clients. At present, SAPL operates out of three
manufacturing/assembling facilities, two of which are located at
New Mumbai, Maharashtra and one is located at Ambattur (Chennai,
Tamil Nadu). Over the last 15 years, the Sharpline Group has
attained expertise in retrofitting old CNC machines with new CNC
packages and has successfully completed more than 750 retrofitting
projects of various types of machine tools.
SAPL is a part of the Sharpline group, with its sister concern
Sharpline Machinery Pvt. Ltd. (SMPL) (Rated [ICRA]B / [ICRA]A4)
also being involved in the same line of business as SAPL. SMPL
typically executes retrofitting orders for larger machine tools
and is also involved in the manufacture of new machines in
partnership with Asquith Butler, UK. In June 2008, SAPL formed a
50:50 joint venture with Paul Christiani GmbH & Co.of Germany to
start Christiani Sharpline Technical Training Pvt. Ltd. for
providing training in the field of CNC technology.
SHIVALIK VYAPAAR: CRISIL Reaffirms D Rating on INR164MM Loan
------------------------------------------------------------
CRISIL ratings continue to reflect instances of delays by
Shivalik Vyapaar Pvt Ltd (SVPL) in servicing its term debt; the
delays have been caused by the company's weak liquidity. The weak
liquidity has, in turn, been on account of working capital
intensity of the company.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 164 CRISIL D (Reaffirmed)
Letter of Credit 35 CRISIL D (Reaffirmed)
Term Loan 87.3 CRISIL D (Reaffirmed)
SVPL also has a modest scale of operations, and a weak financial
risk profile, marked by low net worth, and weak capital structure
and debt protection metrics. SVPL, however, benefits from its
promoters' extensive industry experience and its established
customer relationships.
Set up by Mr. Rajendra Agarwal in 2005, SVPL manufactures
automotive and industrial batteries and valve-regulated lead-acid
(VRLA) batteries. The company has a battery manufacturing facility
in Sanwar (Madhya Pradesh).
SHIVAM FOODS: CRISIL Reaffirms B+ Rating on INR147.5MM Cash Loan
----------------------------------------------------------------
CRISIL rating on the bank facilities of Shivam Foods Pvt Ltd
(SFPL) continue to reflect company's weak financial risk profile
marked by weak debt protection metrics and small networth, small
scale of operations in a highly fragmented and competitive
industry, and significant dependence on the agricultural products
segment for revenues. These rating weaknesses are partially offset
by SFPL's stable scale of operations.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 147.5 CRISIL B+/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that SFPL will continue to benefit over the medium
term from stable demand from its key customers. The outlook may be
revised to 'Positive' if the company registers improvement in its
profitability, leading to an improvement in its financial risk
profile, particularly in its liquidity. Conversely, the outlook
maybe revised to 'Negative' in case SFPL's working capital
requirements are larger than expected, or if the company
undertakes a larger-than-expected, debt funded capex programme,
thereby weakening its capital structure and liquidity.
Update
The revenues of the company has remained stagnant at around
INR422.6 million in 2013-14 (refers to financial year, April 1 to
March 31); due to full capacity utilization and lower demand from
exiting customers. The company's operating margins increased by
around 60 basis points to 4.2 per cent in 2013-14 on account of
better margins from pulses segment. Going forward the revenues is
expected to grow at a moderate pace with sustained margins on
account of increase in demand from existing customers. The company
is expected to achieve revenues of around Rs 460 million with
operating margins expected to be in range of 4 to 4.5 per cent.
The company's operations are working capital intensive as
reflected in its gross current asset (GCA) of around 175 days as
on March 31, 2014; due to higher procurement of raw material due
to anticipated rise in the prices of wheat. As a result, the
company has been utilizing its bank limits almost fully. Going
forward GCA days are expected to be marginally lower at around 163
days on account of lower inventory is expected to be maintained.
SFPL's net worth has remained low at around INR63 million, as on
March 31, 2014 thereby limiting its financial flexibility to meet
any exigency. The company has high debt levels towards funding its
working capital requirements; these coupled with low net-worth
levels results in high gearing of around 2.56 times as on March
31, 2014. Going forward also the gearing levels are expected to be
in range of 2.5 to 2.7 times in near to medium term. The debt
protection metrics are also expected to remain weak marked by
expected interest coverage of around 1.2 times and Net Cash
Accruals to total debt ratio expected to be at around 0.02 times.
SFPL promoted by Mr. Rajesh Kumar Gupta was in incorporated in
2002. SFPL operates flour mills for production of wheat products
such as maida, atta, suji, and bran.
SFPL reported profit after tax (PAT) of INR5.4 million on net
sales of INR422 million for 2013-14, against a net profit of
INR0.5 million on net sales of INR421.3 million for 2012-13.
SHRI MOHAN: ICRA Assigns B Rating to INR40cr Proposed Loan
----------------------------------------------------------
ICRA has assigned its long term rating of [ICRA]B to the INR40
crore proposed bank facilities of Shri Mohan Singh Shiksha
Sansthan (SMSSS).
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Proposed Bank 40.00 [ICRA]B; assigned
Facilities
The assigned rating takes into account the large on-going capital
expenditure being undertaken by the society for the proposed
medical college as well as expansion of hospital and the
associated funding risk. The society remains reliant on induction
of funds in the corpus as well as generation of internal accruals
to part fund the capital expenditure. While the society is
proposing the commencement of the academic session of the
aforementioned medical college from AY2015-16, it is yet to
receive the key approval from Medical Council of India (MCI). ICRA
notes that pending this approval, given the proposed term
borrowings for the project (INR30.50 crore), the society will be
dependent on the funding support from the member group for
servicing of its debt obligations as the accruals from the
existing operations would be inadequate to meet the interest
burden. Further in the event of delayed MCI approval, the
gestation period of the college would also elongate and
necessitate additional funding support to meet the shortfall in
accruals for the future debt repayment obligations.
The rating however derives strength from the experienced
management of the society who have been engaged in the education
sector for more than ten years as well as the favourable demand
prospects for medical education.
In ICRA's view, commencement of the academic session for the
medical college as proposed would be a rating positive. This
apart, achievement of optimum operating metrics post commencement
of operations as well as timely infusion of corpus
funds/generation of accruals will be key determinants for ensuring
the adequacy of accruals for debt servicing in the long-term and
would be key rating sensitivities.
Incorporated in year 1999 by Mr. Kishan Chaudhary, SMSS is a
registered society which is currently managing four colleges in
Mathura (Uttar Pradesh). These colleges offer degree courses (B.A.
BSc, B.Com), teacher training courses (B.Ed) and nursing courses
(GNM) and has a current student base of 3,075 students.
In 2012-13, the society decided to venture in the field of medical
education and since then has been undertaking capital expenditure
in its existing campus for construction a medical college (with an
intake capacity of 150 students) as well as a 700 bedded hospital.
The society proposes to commence the first academic session of the
medical college from AY 2015-16.
SLN TECHNOLOGIES: ICRA Reaffirms B Rating on INR4.5cr Loan
----------------------------------------------------------
ICRA has reaffirmed the long term rating assigned to the INR4.5
crore (enhanced from INR4.0 crore) fund based facilities and
INR2.0 crore (revised from INR3.0 crore) proposed term loan of SLN
Technologies Private Limited at [ICRA]B. ICRA has also reaffirmed
the short term rating assigned to the INR5.5 crore (enhanced from
INR5.0 crore) non fund based facilities of SLN at [ICRA]A4.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based limits 4.5 [ICRA]B reaffirmed
Proposed term loan 2.0 [ICRA]B reaffirmed
Non fund based limits 5.5 [ICRA]A4 reaffirmed
The reaffirmation of the ratings factor in the long standing
experience of the promoters in the electronics industry and SLN's
well established clientele base which has driven repeat orders for
the company. The ratings also factor in the favourable outlook for
aerospace, defence and nuclear segments in the near to medium
term, company's healthy order book position and the strong
execution track record that enhances revenue visibility. The
ratings are, however, constrained by the company's limited
financial flexibility on account of moderate scale of operations
and vulnerability of the company's sales and profit margins to the
currency exchange rate fluctuations on account of no hedging
mechanism. The ratings are also constrained by the company's
moderate financial profile marked by net loss, moderate gearing
and coverage indicators and stretched liquidity position on
account of high working capital requirements during 2013-14.
Incorporated in 1995, SLN Technologies Private Limited is
primarily engaged in designing and manufacturing of electronic
products with specific applications in the areas of aerospace,
defence, nuclear and satellite & communication. The company's
product mix includes solid state flight data recorders, automated
test equipments, antenna control systems, trip units and other
electronic products. The company was promoted by Mr. D R
Subramanyam and Mr. M Anil Kumar who have more than 30 years of
experience in this industry. The company has long term
associations with renowned clients such as Hindustan Aeronautics
Limited, Bharat Electronics Limited, Electronics Corporation of
India Limited, Nuclear Power Corporation of India and Indira
Gandhi Centre for Atomic Research among others.
During 2013-14, the company reported a net loss of INR0.7 crore on
an operating income of INR10.5 crore as against a net profit of
INR0.4 crore on an operating income of INR12.7 crore during 2012-
13.
SOHAN INDUSTRIES: CARE Reaffirms B+ Rating on INR8.5cr LT Loan
--------------------------------------------------------------
CARE reaffirms the ratings assigned to the bank facilities of
Sohan Industries.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 8.50 CARE B+ Reaffirmed
Rating Rationale
The ratings assigned to the bank facilities of Sohan Industries
(SOI) continue to remain constrained by its small scale of
operations, low profitability margins and leveraged capital
structure. The ratings are further constrained by working
capital intensive nature of operations, partnership nature of
constitution and its presence in a highly competitive and
fragmented agro-processing business with a high level of
government control.
The ratings, however, draw strength from the experienced partners
and family members in the agro-processing industry and proximity
of its processing unit to the paddy-growing areas. Going forward,
SOI's ability to scale-up its operations while improving its
profitability margins and capital structure along with effective
working capital management would be the key rating sensitivities.
Sohan Industries (SOI) was established as a partnership firm in
the year 1995. The firm is currently managed by present partners
Mr. Sohan Lal, Ms. Shakuntla and Mr. Amit Garg in profit sharing
ratio of 20%, 40% and 40% respectively. Mr. Sohan Lal and Mr. Amit
Garg look after the overall operations of the firm. SOI is engaged
in processing of Basmati and Non-Basmati rice. The firm has its
processing facility located at Karnal, Haryana with an annual
installed capacity of 36,000 metric ton per annum (MTPA) of rice
as on March 31, 2014. The firm has an open storage facility spread
in 0.75 acres each with storage capacity of 1,000 MTPA. The firm
procures paddy from nearby grain market (anaj mandies) located in
Haryana. The final product is sold through commission agents in
Delhi, Haryana and Uttar Pradesh. The group associate Sohan Lal
Aggarwal & Sons (CARE B+/A4) is also in the same line of business
and is located at Karnal, Haryana.
SOI has reported a net profit of INR0.05 crore on a total
operating income of INR19.59 crore during FY14 (refers to period
from April 1 to March 31) as compared with a net profit and TOI of
INR0.01 and INR17.11 crore in FY13. During FY15, the firm had
achieved total sales of INR23.50 crore till February 20, 2015.
SOHAN LAL: CARE Reaffirms B+ Rating on INR6cr LT Bank Loan
----------------------------------------------------------
CARE reaffirms the ratings assigned to the bank facilities of
Sohan Lal Aggarwal & Sons.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 6 CARE B+ Reaffirmed
Short-term Bank Facilities 2 CARE A4 Reaffirmed
Rating Rationale
The ratings assigned to the bank facilities of Sohan Lal Aggarwal
& Sons (SLS) continue to remain constrained by its small scale of
operations, low profitability margins and leveraged capital
structure. The ratings are further constrained by working capital
intensive nature of operations, partnership nature of constitution
and its presence in a highly competitive and fragmented agro-
processing business with a high level of government control.
The ratings, however, draw strength from the experienced partners
and family members in the agro-processing industry and proximity
of its processing unit to the paddy-growing areas.
Going forward, SLS's ability to scale-up its operations while
improving its profitability margins and capital structure along
with effective working capital management would be the key rating
sensitivities.
Sohan Lal Aggarwal & Sons (SLS) was established as a partnership
firm in the year 1992. The firm is currently managed by Mr Suresh
Chand and Mr Sunil Garg who share profit in the ratio of 60% and
40% respectively. Mr Sunil Garg looks after the overall operations
of the firm. SLS is engaged in the processing of basmati and non-
basmati rice. The firm has its processing facility located in
Village-Daha, Karnal, Haryana with an annual installed capacity of
17,520 MTPA of rice as on March 31, 2014. The firm has both open
and indoor storage facility spread in 0.75 acres each with a
combined storage capacity of 3,000 MTPA. The firm procures paddy
from nearby grain market (anaj mandies) located in Haryana and
avails 15 days credit from its suppliers. The final product is
sold through commission agents in Delhi, Haryana and U.P with
credit period of approximately 7 days. The group associate Sohan
Industries (CARE B+) is also in the same line of business and is
located at Karnal, Haryana.
SLS has reported a net profit of INR0.04 crore on a total
operating income of INR19.19 crore during FY14 as compared with
a net profit and TOI of INR0.02 and INR17.01 crore in FY13. During
FY15, the firm had achieved total sales of INR18.50 crore
till February 20, 2015.
SRI KRISHNA: CRISIL Cuts Rating on INR150MM Cash Credit to B-
-------------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facilities
of Sri Krishna Shipping Corporation (SKSC) to 'CRISIL B-/Stable'
from 'CRISIL B/Stable'; while reaffirming its rating on the short-
term bank facilities at 'CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 40 CRISIL A4 (Reaffirmed)
Cash Credit 150 CRISIL B-/Stable (Downgraded
from 'CRISIL B/Stable')
The rating downgrade reflects weakening in SKSC's liquidity, with
stretch in working capital cycle resulting in almost fully
utilized working capital limits. The downgrade also factors
deterioration in SKSC's business risk profile marked by decline in
its revenues in 2013-14 and expected muted growth in its revenues
over the medium term. CRISIL believes that SKSC will need fresh
capital from its promoters, or sustained improvement in working
capital cycle to alleviate pressure on its liquidity.
SKSC's working capital cycle is stretched, with debtor levels
expected to increase to be around 115 days as on March 31, 2015
from around 81 days as on March 2013. Consequently, the bank
limits have been almost fully utilized over the 12 months through
November 2014. SKSC's revenue declined year-on-year by 30 per cent
in 2013-14 (refers to financial year, April 1 to March 31) due to
weak demand scenario on account of political unrest in Andhra
Pradesh (AP). SKSC's revenue growth is expected to remain muted in
2014-15 as the operations were affected by cyclone named 'Hudhud'
during October 2014 to December 2014.
The ratings continue to reflect SKSC's stretched working capital
requirements, its small scale of operations in the intensely
competitive steel industry. The rating also reflects SKSC's below-
average financial risk profile marked by small net worth, high
gearing and below-average debt protection metrics. These rating
weaknesses are partially offset by the extensive industry
experience of SKSC's promoters in the steel industry.
Outlook: Stable
CRISIL believes that SKSC will continue to benefit from its
established customers relations, and the promoters' extensive
industry experience over the medium term. The outlook may be
revised to 'Positive' if the firm reports a substantial and
sustained improvement in its revenues and profitability margins,
or a sizeable increase in its net worth, on the back of capital
additions by the promoters. Conversely, the outlook may be revised
to 'Negative' if SKSC reports a substantial decline in its
profitability margins, or deterioration in its capital structure
because of larger-than-expected working capital requirements.
Set up in 1986 as a partnership firm, SKSC trades various steel
products such as thermo-mechanically treated bars, channels,
angles, I-beams, billets, squares, blooms, and rounds. The firm is
promoted by Mr. Y S V Rama Rao Chowdary and his family, and is
headquartered in Visakhapatnam, (Andhra Pradesh).
TIMES STEEL: CARE Lowers Rating on INR22cr LT Bank Loan to B+
-------------------------------------------------------------
CARE revises the rating assigned to the bank facilities of
Times Steel and Power Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 22 CARE B+ Revised from
CARE BB-
Rating Rationale
The revision in the long-term rating of the bank facilities of
Times Steel and Power Limited's (TSPL) factors in the on-going
operating and net losses in FY14 (refers to the period April 1 to
March 31), deterioration in its capital structure and debt
coverage indicators and working capital-intensive nature of
business operations. The rating also considers TSPL's exposure to
commodity price fluctuation risks and the cyclicality inherent in
the steel business.
The rating, however, draws comfort from the experience of the
promoters in the steel industry and favourable location of the
plant.
Going forward, the company's ability to ensure adequacy of raw
material, achieve the envisaged revenue and profitability
and effectively manage its working capital requirements shall
remain the key rating sensitivities.
TSPL was originally incorporated as Nixon Steel and Power Ltd on
October 21, 2002, by Mr Rajvir Choudhary, his son Mr Atul
Choudhary and his nephew Mr Vinay Choudhary. The name of the
company was subsequently changed to TSPL in 2010. Mr Vinay
Choudhary has more than a decade's experience in the iron
industry. The company set up a sponge iron manufacturing facility
with a capacity of 100,000 tons per annum (TPA) in Rourkela,
Odisha, in 2005. The company currently procures iron ore from the
open market and has arrangements for the procurement of coal with
Mahanadi Coal Limited (MCL). The sponge iron manufactured by the
company is sold to the steel plants in the adjoining areas through
brokers.
The company reported a total operating income (TOI) of INR104.75
crore with a PAT of INR-9.46 crore for FY14 (refers to the period
April 1 to March 31) as against INR89.32 crore with a PAT of
INR0.15 crore. The company has achieved a TOI of approximately
INR102.00 crore till January 31, 2015.
TM TYRES: CRISIL Reaffirms D Rating on INR200MM Term Loan
---------------------------------------------------------
CRISIL's ratings on the bank facilities of TM Tyres Ltd (TM Tyres)
continue to reflect instances of delay by TM Tyres in servicing
its debt; the delays have been caused by the company's weak
liquidity.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 120 CRISIL D (Reaffirmed)
Funded Interest 29.1 CRISIL D (Reaffirmed)
Term Loan
Letter of Credit 100 CRISIL D (Reaffirmed)
Working Capital 200 CRISIL D (Reaffirmed)
Term Loan
Term Loan 88.2 CRISIL D (Reaffirmed)
Proposed Long Term 72.7 CRISIL D (Reaffirmed)
Bank Loan Facility
TM Tyres' has weak liquidity marked by its operating losses and
large working capital requirements. The company's profitability
margins are also susceptible to volatility in raw material prices.
However, TM Tyres benefits from its promoters extensive experience
in the rubber tubes business.
TM Tyres (formerly, TM Tyres Pvt Ltd) was incorporated in 1996,
promoted by Mr. Ashok Kumar Agarwal and his family members. The
company manufactures inner rubber tubes (butyl tubes) for vehicle
tyres. It also manufactures butyl curing bags, envelopes, flaps,
and rubber compounds. The company is based in Hyderabad.
=================
I N D O N E S I A
=================
BERAU COAL: Restructuring Plan May Improve Ratings, Moody's Says
----------------------------------------------------------------
Moody's Investors Service says Berau Coal Energy Tbk's (BCE, Caa1
review for downgrade) recently announced restructuring plan for
its guaranteed senior secured notes due 2015 and 2017 will ease
mounting refinancing pressure and improve its liquidity profile,
and could therefore lead to moderate ratings upside, if approved.
Current ratings remain unchanged and continue to be reviewed for
downgrade, until the proposal is approved.
On March 18, Asia Resource Minerals plc (ARMS, unrated) --
85%-owner of BCE -- announced the terms of the proposed
restructuring plan. Under the proposed transaction, BCE will pay
a portion of the notes principal using $100 million of new equity
proceeds raised at ARMS and $18.75 million of cash-on-hand. The
unpaid portion of the $450 million notes due 2015, issued by Berau
Capital Resources Pte. Ltd. and guaranteed by BCE, and $500
million notes due 2017, issued by BCE, will be exchanged for new
notes maturing in July 2019 and December 2020, respectively. The
proposed restructuring also aims to reduce the coupon on the new
notes, comprising both a cash and paid-in-kind component.
"The proposed balance sheet restructuring, if executed, will be
positive for BCE in that it marginally reduces outstanding debt,
lowers the cash coupon and pushes back the looming maturity of its
2015 notes, which the company has had difficulty refinancing to
date," says Brian Grieser, a Moody's Vice President and Senior
Analyst.
While there is no haircut to the notes principal in the proposal,
Moody's views the extension of the notes as coercive to
noteholders and inconsistent with its original promise to repay
the notes as it has the effect of allowing BCE to avoid a payment
default at maturity. As such, Moody's would view the proposed
restructuring plan as a distressed exchange under Moody's
definition of default.
"BCE's ratings will remain on review for possible downgrade until
the notes are successfully restructured. Assuming the proposed
terms are agreed to by noteholders, the ratings would likely be
stabilized or potentially upgraded post-transaction," adds
Grieser, who is also Lead Analyst for BCE.
Based on the proposed plan, the next material maturity will be in
2019 which will allow management to focus on managing its thermal
coal business, which has been negatively impacted by persistently
weak coal prices.
The transaction is subject to lender approval and will be subject
to the successful equityraising at ARMS; creating uncertainty
around the timing of completion. The notes restructuring requires
approval from at least 75% of noteholders while the equity
offering -- as previously announced on Feb. 9, 2015, -- will
require simple majority of ARMS' shareholders' approval.
If the transaction goes through, BCE will have a significantly
improved maturity profile and lowered leverage by 0.75x to 1.0x.
Incremental debt reduction is expected once BCE or PT Berau Coal
(unrated) execute a new $50 million revolving credit facility.
Debt-to-EBITDA was approximately 4.8x at Sept. 30, 2014.
BCE is an investment holding company listed on the Indonesian
Stock Exchange. It has a 90% interest in PT Berau Coal (unrated),
Indonesia's fifth-largest producer and exporter of thermal coal.
Berau operates three active mines -- Lati, Sambarata and Binungan
-- at a single site in East Kalimantan. It has estimated
resources of about 2.6 billion tons, with probable and proven
reserves estimated at 512 million tons (mt).
====================
N E W Z E A L A N D
====================
STANLEY CONSTRUCTION: Owes NZ$1.9 Million to 42 Creditors
---------------------------------------------------------
Anne Gibson at The New Zealand Herald reports that about 42
creditors of Matamata-headquartered builder Stanley Construction
(Waikato) are owed NZ$1.9 million.
The Herald relates that Kevin Stanley, Stanley Group managing
director, said that was the scale of the issues at the business,
now seeking a compromise with those creditors to be decided at a
1:00 p.m. meeting at the Novotel Hamilton today, March 23.
"This was caused by a system error on a single project that the
company needs to take responsibility for," the report quotes
Mr. Stanley as saying. He clarified that there were no industry
trends which caused the problem and nor was it related to modular
construction after the failure of Auckland's eHome, the Herald
relays.
"Our modular business is trading very well. We've got good,
sustainable growth. We've been operating in the prefabrication
industry in New Zealand for about 12 years," Mr. Stanley, as cited
by the Herald, said.
Difficulties were limited to Stanley Construction (Waikato), he
said.
"Stanley Group is continuing to trade well and profitably. The
creditors' compromise being sought follows significant losses from
a project completed by Stanley Construction (Waikato) in 2014,"
the Herald quotes Mr. Stanley as saying. "It's unfortunate and we
have been working hard to try to right the situation. Construction
is a risky business. We have been very fortunate to have fantastic
support from our suppliers."
The Herald relates that Mr. Stanley said of the NZ$1.9 million,
$400,000 is owed to Stanley Group which was the single largest
creditor.
"We are a bespoke construction company specialising in difficult
construction and in retail, restaurants and some remediation," he
said.
According to the report, the struggling company had approached
financial specialist Jared Booth of McDonald Vague to write to the
creditors and ask for their support.
Mr. Stanley said he was optimistic that creditors' compromise
would stave off the need for liquidation or receiver, the Herald
relays.
Creditors included Stanley Group's joinery operation which
supplied internal fittings such as kitchens to the business, he
said, the report relays. Other creditors are owed about
NZ$1.5 million for goods, materials and subcontracting services,
the Herald discloses.
The report adds that Mr. Booth told creditors the builder had been
under significant financial pressure for some time and was relying
on Stanley Group's support.
Problems were due to losses from the single project "and
insufficient subsequent work and margins to allow such losses to
be cleared, the report states. In mid-February, it became apparent
to SCW's directors that it would no longer be able to trade
without entering into a compromise with all creditors of the
company," Mr. Booth, as cited by the Herald, wrote.
*********
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 2015. All rights reserved. ISSN: 1520-9482.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding,
electronic re-mailing and photocopying) is strictly prohibited
without prior written permission of the publishers.
Information contained herein is obtained from sources believed
to be reliable, but is not guaranteed.
TCR-AP subscription rate is US$775 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance
thereof are US$25 each. For subscription information, contact
Peter Chapman at 215-945-7000 or Nina Novak at 202-362-8552.
*** End of Transmission ***