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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 30, 2015, Vol. 18, No. 062
Headlines
A U S T R A L I A
AG STOCKBROKING: First Creditors' Meeting Set For April 10
GARBOLOGIE PTY: First Creditors' Meeting Set For April 7
GOLDEN PEARL: First Creditors' Meeting Slated For April 7
LIGHT TRUST 2: Fitch Affirms 'BBsf' Rating on Class B Notes
RELIANCE RAIL: Moody's Raises Senior Secured Rating to Ba3
C H I N A
CENTRAL CHINA REAL: Moody's Says Increased JV Debt is Credit Neg.
HENGDELI HOLDINGS: Fitch Affirms 'BB' Senior Unsecured Rating
KWG PROPERTY: Moody's Affirms Ba3 CFR; Outlook Negative
MODERN LAND: 2014 Results Support B2 CFR, Moody's Says
I N D I A
AL-SAMI AGRO: CARE Assigns B+ Rating to INR22.5cr LT Bank Loan
APT PACKAGING: CRISIL Reaffirms D Rating on INR82.1MM Term Loan
ASHVI DEVELOPERS: CARE Reaffirms D Rating on INR325cr LT Loan
BALAJI FIBER: CARE Lowers Rating on INR13cr Bank Loan to D
BHAGYODAYA MOTORS: CRISIL Reaffirms B Rating on INR150MM Loan
CEBON CERAMIC: CARE Assigns B Rating to INR4cr LT Bank Loan
DIAMANT INFRASTRUCTURE: CRISIL Reaffirms B+ Rating on INR80M Loan
ETCO DENIM: CARE Cuts & Suspends 'D' Rating on INR237cr Loan
G. PURUSHOTHAM: CRISIL Assigns B Rating to INR50MM Capital Loan
INFINITY INFRATECH: CRISIL Rates INR47.5MM Term Loan at B+
JAY DEVELOPERS: CARE Assigns B Rating to INR8cr LT Bank Loan
JOY MAHAPROVU: CARE Assigns B Rating to INR8.0cr LT Bank Loan
JSM DEVCONS: CARE Reaffirms B+ Rating on INR13.07cr LT Bank Loan
KOHINOOR HATCHERIES: CRISIL Reaffirms B- Rating on INR462MM Loan
KJS EDUCATIONAL: CRISIL Reaffirms D Rating on INR255MM Loan
MAITHAN ISPAT: CARE Reaffirms D Rating on INR600.75cr LT Loan
METRO ECO: CARE Reaffirms B+ Rating on INR75cr LT Bank Loan
MOAT PROJECT: CRISIL Assigns B Rating to INR100MM Bank Loan
MONGA FOODS: CARE Assigns B+ Rating to INR10.5cr LT Loan
NEPTUNE ESTATE: CARE Reaffirms B- Rating on INR6.77cr LT Loan
NEPTUNE INFRA: CARE Reaffirms B- Rating on INR35.57cr Loan
OFFSHORE MARINETECH: CRISIL Reaffirms B+ Rating on INR45MM Loan
P.V.R. SHIP: CARE Reaffirms B/A4 Rating on INR50cr Bank Loan
PRAVIN BUILDTECH: CARE Assigns D Rating to INR9.37cr LT Loan
RADHALAXMI SPINTEX: CARE Revises Rating on INR36.3cr Loan to B+
RICHA REALTORS: CARE Reaffirms C Rating on INR20cr NCDs
RISHI TRADERS: CRISIL Cuts Rating on INR80MM Cash Loan to B
SHARAYU MOTORS: CRISIL Reaffirms B- Rating on INR75MM Cash Loan
SHIVA SHAKTI: CARE Reaffirms B- Rating on INR243.35cr LT Loan
SILK WOVEN: CARE Assigns B+ Rating to INR6cr LT Bank Loan
SIYARAM IMPEX: CRISIL Assigns B Rating to INR80MM Cash Credit
SONIA FISHERIES: CRISIL Assigns B Rating to INR15.2MM Term Loan
SWIZZER CERAMIC: CRISIL Assigns B+ Rating to INR215MM LT Loan
TFS CORPORATION: Moody's Affirms B3 CFR; Outlook Stable
UNECHA ASSOCIATES: CRISIL Cuts Rating on INR87.5MM Loan to D
VIDHI MINERALS: CRISIL Cuts Rating on INR25MM Cash Loan to B
I N D O N E S I A
DUTA ANGGADA: Moody's Withdraws (P)B1 Corporate Family Rating
J A P A N
TAKATA CORP: Facing Three Class Action Suits in Canada
M O N G O L I A
MONGOLIAN MINING: Moody's Says Credit Profile Weakened in 2014
N E W Z E A L A N D
MAINZEAL PROPERTY: Liquidator to File Court Action
P A K I S T A N
NATIONAL BANK OF PAKISTAN: Moody's Cuts Deposit Ratings to Caa1
PAKISTAN MOBILE: Moody's Revises Outlook on B2 CFR to Positive
S I N G A P O R E
IBC CAPITAL: Moody's Affirms B2 CFR, Outlook Stable
MMI INTERNATIONAL: Fitch Puts 'BB-' Rating on Negative Watch
S O U T H K O R E A
DONGKUK STEEL: Prosecutors Raid Office Over Alleged Embezzlement
KEANGNAM ENTERPRISES: Files for Court Receivership
S R I L A N K A
AMW CAPITAL: Fitch Raises Rating to BBB+ from BB-; Outlook Stable
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A U S T R A L I A
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AG STOCKBROKING: First Creditors' Meeting Set For April 10
----------------------------------------------------------
Craig Shepard and Leanne Chesser of KordaMentha were appointed as
administrators of AG Stockbroking Limited on March 27, 2015.
A first meeting of the creditors of the Company will be held at
KordaMentha, Level 14, 12 Creek Street, in Brisbane, Queensland,
on April 10, 2015, at 11:00 a.m.
GARBOLOGIE PTY: First Creditors' Meeting Set For April 7
--------------------------------------------------------
Dino Travaglini and Bruno A Secatore of Cor Cordis Chartered
Accountants were appointed as administrators of Garbologie Pty
Ltd, trading as Tipshop, on March 24, 2015.
A first meeting of the creditors of the Company will be held at
Cor Cordis Chartered Accountants, BGC Centre, Level 8, 28 The
Esplanade, in Perth, on April 7, 2015, at 11:00 a.m.
GOLDEN PEARL: First Creditors' Meeting Slated For April 7
----------------------------------------------------------
George Aubrey Lopez & Evan Robert Verge of Melsom Robson Chartered
Accountants were appointed as administrators of
Golden Pearl Development Pty Ltd on March 26, 2015.
A first meeting of the creditors of the Company will be held at
Melsom Robson Chartered Accountants, 143 Edward Street, in Perth,
on April 7, 2015, at 11:00 a.m.
LIGHT TRUST 2: Fitch Affirms 'BBsf' Rating on Class B Notes
-----------------------------------------------------------
Fitch Ratings has affirmed the ratings of eight Light Trust RMBS
tranches from three transactions backed by pools of Australian
first-ranking residential mortgages originated by People's Choice
Credit Union (a trading name of Australian Central Credit Union
Ltd.).
The rating actions are:
Light Trust No. 2 Trust:
AUD39.9 m Class A1 notes affirmed at 'AAAsf'; Outlook Stable;
AUD7.3m Class A2 notes affirmed at 'AAAsf'; Outlook Stable; and
AUD2.3m Class B notes affirmed at 'BBsf'; Outlook Stable.
Light Trust No. 3 Trust:
AUD138.8m Class A3 notes affirmed at 'AAAsf'; Outlook Stable; and
AUD10.3m Class AB notes affirmed at 'AAAsf'; Outlook Stable.
Light Trust No. 4 Trust:
AUD190.3m Class A notes affirmed at 'AAAsf'; Outlook Stable;
AUD22.5m Class AB notes affirmed at 'AAAsf'; Outlook Stable; and
AUD9.0m Class B1 notes affirmed at 'AA-sf'; Outlook Stable.
KEY RATING DRIVERS
The affirmations reflect Fitch's view that available credit
enhancement is sufficient to support the notes' current ratings,
and the agency's expectations of Australia's economic conditions.
The credit quality and performance of the loans in the collateral
pools have remained in line with Fitch's expectations.
At Feb. 28 2015, Light Trust No. 2 reported 30+ days arrears at
1.5% and Light Trust No. 3 at 1.76%, both of which were above
Fitch's Dinkum RMBS Index of 1.15%. Light Trust No. 4 recorded
the lowest level of arrears at 0.24%.
As at Feb. 28, 2015, the three transactions were 100% covered by
lenders' mortgage insurance (LMI) provided by QBE Lenders Mortgage
Insurance Ltd (Insurer Financial Strength Rating: AA-/Stable).
The transactions have experienced no losses since closing.
RATING SENSITIVITIES
Sequential pay-down has increased credit enhancement for the
senior notes of each transaction, with the 'AAAsf' rated notes
able to withstand many multiples of the latest reported arrears.
The ratings of the transactions' Class A notes are independent of
downgrades to the LMI provider's ratings. The Class AB notes of
Light Trust 3 are LMI dependent, while the Class AB notes of Light
Trust No.4 are independent of the LMI provider's ratings.
The 'AAAsf' modeled loss severities after LMI of between 16.22%
and 18.72%, with the Class A notes of each transaction able to
withstand default rates of between 28.97% and100% while the Class
AB notes can withstand default rates of between 23.5% and 35.11%
at their modeled 'AAAsf' loss severity levels, with LMI. This
analysis excludes credit to excess spread, and as a result, the
agency considers that a downgrade of any senior notes rated
'AAAsf' to be unlikely.
Current credit enhancement levels for the Light Trust No.4 Class
B1 notes are able to withstand default rates of 29.09% at the 'AA-
sf' loss severity. However, once the transaction moves to pro-
rata amortization, the Class B1 notes will be constrained by
concentration.
Fitch's initial Key Rating Drivers and Rating Sensitivities are
further discussed in the corresponding New Issue reports listed
under "Related Research".
RELIANCE RAIL: Moody's Raises Senior Secured Rating to Ba3
----------------------------------------------------------
Moody's Investors Service has upgraded the senior secured rating
of Reliance Rail Finance Pty Ltd (RRF) to Ba3 from B1. Moody's
has also upgraded RRF's subordinated debt rating to B2 from B3.
The ratings outlook is positive.
RRF is the funding vehicle for Reliance Rail, the consortium
appointed to manufacture and maintain 78 new trains for Sydney
Trains, the State-owned metropolitan train services provider for
Sydney. Sydney Trains' obligations under the Waratah project are
backed by the State of New South Wales (Aaa stable).
RATINGS RATIONALE
"The ratings upgrade reflects Reliance Rail's solid operating
track record over the past 12 months, which resulted in gradual
improvement in reliability as well as lower than expected revenue
abatements," says Spencer Ng, a Moody's Vice President / Senior
Analyst.
The fleet's solid reliability performance, as measured by the
average distance between incidents of around 35,000 km, compares
well to the minimum requirement of 10,000km under the contract.
"We believe the fleet's performance demonstrates Reliance Rail and
its contractor's ability to manage teething issues in a timely
manner as they emerged during the early stages of operations, and
is also an indication of their capacity to handle future issues
that might arise over time," says Spencer Ng,
"That said, we note that the technical nature of Reliance Rail's
train fleet and its maintenance tasks mean that the project faces
greater exposure to unexpected teething and defect issues.
Moreover, these issues can take longer to emerge and rectify
relative to those experienced in the typical PPP project, which is
required to provide simpler facility maintenance services in
buildings," adds Ng.
The higher exposure to teething issues is evident in the
persistent -- albeit modest and within our ratings expectation --
level of revenue abatement attributed to trains being late or
unavailable. Moody's expects revenue deductions to continue going
forward, but for average annual abatements to be maintained at
current levels or improve marginally.
The positive ratings outlook reflects the possibility of further
upgrade, if the project can maintain its current operating
performance over the next 12-18 months.
The project's ratings also incorporate its refinancing exposure in
2017/18, when close to AUD1.15 billion of bullet bank facilities
and bonds expire. In particular, we note that 1) the
conditionality in the vital State capital injection and 2) the
material size of the refinancing task would mean that some
uncertainty would remain in the execution of the project's
refinancing plan until its completion.
"We note that securing the proceeds from the State's capital
injection is crucial to Reliance Rail's ability to repay a portion
of the expiring debt in order to offset the expected rise in
credit margins at the refinance," Moody's says.
Reliance Rail's ratings could be considered for an upgrade if
Reliance Rail maintains its solid operating track record over the
next 12-18 months and if there is no material deterioration in the
capital market conditions that is likely to affect the project's
ability to refinance leading up to 2018.
On the other hand, the ratings could experience downward pressure
if: 1) the operating performance of the fleet deteriorates
substantially from current level, or 2) there is a significant
deterioration in capital market conditions.
Reliance Rail Finance Pty Ltd is the funding vehicle for the
Reliance Rail Group, which in turn was the successful consortium
appointed by Sydney Trains in 2006 to deliver the NSW Rolling
Stock public private partnership project. Reliance Rail completed
its manufacture of 78, eight-car Waratah trains for the Sydney
suburban rail network in May 2014 and an associated maintenance
facility in 2010. The consortium will maintain the trains and the
maintenance facility from completion until early 2044.
The principal methodology used in this rating was Operational
Privately Financed Public Infrastructure (PFI/PPP/P3) Projects
published in March 2015.
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CENTRAL CHINA REAL: Moody's Says Increased JV Debt is Credit Neg.
-----------------------------------------------------------------
Moody's Investors Service said that Central China Real Estate
Limited's (CCRE) increased debt leverage at its joint ventures
(JVs) is credit negative and has placed the company's credit
metrics at the weaker end of its ratings.
Nevertheless, the company's weakened financial metrics will not
immediately impact its Ba3 corporate family and senior unsecured
ratings, or its stable ratings outlook.
"CCRE's financial metrics -- adjusted to take into account JV debt
-- have weakened because of its higher debt leverage," says Kaven
Tsang, a Moody's Vice President and Senior Analyst.
"CCRE's JVs have also seen their debt levels rise during the year,
mainly because two new projects -- Jiurui House and Wulongkou
Project -- are at the initial stage of development, so they have
not been sold or delivered," adds Tsang, who is also the Lead
Analyst for CCRE.
CCRE had a 32.8% growth in its reported revenues and a 31% growth
in reported EBITDA in 2014. It also maintained a stable EBITDA
margin of 26% despite the industry trend of margin contraction.
However, lower revenue and profit contributions from JVs during
2014 led to a 22% fall in the company's adjusted EBITDA to around
RMB2.7 billion.
Moody's has adjusted CCRE's credit metrics by consolidating the
results of its JVs, given the company's substantial economic
interests in and effective control over its JVs' operations and
cash flows. The importance of the JVs to CCRE is also evident from
CCRE's extension of guarantees to the debt incurred by its JVs.
Moody's estimates that CCRE's adjusted EBITDA/interest expense
fell to around 2.0x in 2014 from 2.8x in 2013. The result
positions the company at the lower end of its Ba3 ratings
category.
Moody's expects moderate improvement in the company's adjusted
EBITDA/interest to 2.0x-2.2x over the next 12-18 months, given the
increased contracted sales and revenue contributions from its JVs
such as Sky Mansion and Tihome Jianye International City; both of
which are based in Zhengzhou.
CCRE's reported an 11% increase in contracted sales to RMB15.6
billion in 2014. Of which, RMB4.2 billion comprised contracted
sales from JVs. At end-2014, the company's unrecognized contracted
sales totaled around RMB8.2 billion, including RMB1.7 billion from
JVs.
Moody's expects that in 2015, CCRE will see a moderate growth in
contracted sales to around RMB17 billion; including sales from its
JVs. This expectation is based on Moody's estimate that the
company's saleable resources will total around RMB29 billion in
2015.
CCRE's liquidity is adequate. It reported cash totaling RMB6.5
billion at end-2014; an amount which fully covers its reported
short-term debt of RMB1.4 billion, as well as Moody's forecast of
committed land payments in 2015 of RMB300 million.
The principal methodology used in this rating was the Global
Homebuilding Industry published in March 2009.
Central China Real Estate Limited is a leading property developer
in China's Henan Province. Founded in 1992, it listed on the Hong
Kong Stock Exchange in June 2008.
HENGDELI HOLDINGS: Fitch Affirms 'BB' Senior Unsecured Rating
-------------------------------------------------------------
Fitch Ratings has revised the Outlook on China-based watch
retailer Hengdeli Holdings Limited's (Hengdeli) Long-Term Issuer
Default Rating (IDR) to Negative from Stable while affirming the
IDR and senior unsecured rating at 'BB'.
The Outlook revision is due to the continued weakness in Chinese
retail spending that could hamper Hengdeli's margin recovery and
deleveraging.
KEY RATING DRIVERS
Lower Profitability: Hengdeli's EBITDA margin further contracted
to 7.53% in 2014 from 8.32% in 2013, due to heavier sales
discounting, particularly for high-end watches, and higher
distribution cost in Harvest Max, a Hong Kong-based souvenir and
watch retailer it acquired in 2013. While Hengdeli could raise its
EBITDA margin if it upgrades its product mix, restructures the
Harvest Max business and cuts down its heavy distribution cost,
this would be challenging to achieve because general consumer
spending continues to be weak in China and it will likely have to
persist in giving discounts, especially for high-end watches. It
is unlikely that Hengdeli will return to its pre-2013 EBITDA
margin of above 11% in next 24 months.
Weak Retail Environment: In 2014, Hengdeli managed to stem the
sharp drop in sales experienced in 2013 amid a slow retail
environment. The contraction in same-store sales in mainland China
slowed to 0.8% in 2014 from 7.1% in 2013; the decline in same-
store sales for high-end watches decelerated to 6.5% from 18.5%.
This was due to the company's efforts to diversify product
offerings, improve customer service and spruce up stores.
Nevertheless, the current sluggish general consumer environment
will continue to hamper Hengdeli's efforts to improve its
financial performance.
High Working Capital: The company had negative free cash flow and
high FFO adjusted net leverage of 3.63x in 2014 (2013: 3.57x) due
to high working capital needs that stem from high average
inventory days of 224 days in 2014 (2013: 223 days) and shorter
payable days of 52 in 2014 (57 in 2013). The high inventory and
low payables were the result of slow sales in Hong Kong from 4Q14
due to the pro-democracy protests, which exacerbated a long-term
decline in mainland tourists to the city. Fitch expects Hengdeli's
Hong Kong business, which contributed to about 25% of group EBITDA
(including Harvest Max), to improve from the 4Q14 trough, but
continue to be weak. Fitch expects the company's net leverage to
trend towards 3.0x over the next 12 months, provided its inventory
and payables improve and there are no significant acquisitions in
2015.
Strong Business Positioning: Hengdeli's rating is still supported
by its leading position in the market for retailing of Swiss
watches in China, its established distribution network and
exclusive distribution arrangements that support its wholesale
business. In 2014, Hengdeli maintained an approximate 36% market
share of Swiss watch sales in China and further fine-tuned its
business strategy to focus on mid-end products, which have higher
margins and faster turnover, in lower tier cities. Tier 3 and Tier
4 cities accounted for 31% of total sales in 2014, up from 21% in
2011. The shift towards mid-end watches will help Hengdeli to
optimise its product mix, achieve a higher margin and trim
inventory.
Adequate Liquidity: Hengdeli maintained sufficient cash of
CNY2.0bn as end-2014 to cover its short-term bank loans of CNY992m
and estimated capital expenditure of around CNY100m for the next
12 months.
KEY ASSUMPTIONS
Fitch's key assumptions within our rating case for the issuer
include:
-- Neutral same-store sales growth in China
-- EBITDA margin hovers around 8% into 2017
-- Inventory turnover days and payable days to improve from
2014 levels
-- Annual capex plus acquisition budget of about CNY150m
RATING SENSITIVITIES
Negative: Future developments that may, individually or
collectively, lead to negative rating action include
-- Contraction in same-store sales in China
-- Sustained weakening in EBITDA margin to below 8%
-- FFO adjusted net leverage sustained above 3.5x
Positive: The Outlook may be revised back to Stable if retail
spending recovers, and the company's profitability, sales and
leverage do not reach the levels that may lead to negative rating
action.
KWG PROPERTY: Moody's Affirms Ba3 CFR; Outlook Negative
-------------------------------------------------------
Moody's Investors Service has affirmed KWG Property Holding
Limited's Ba3 corporate family rating and B1 senior unsecured
ratings.
The ratings outlook remains negative.
RATINGS RATIONALE
"Although KWG's 2014 results position it at the weaker end of the
Ba3 rating level, its strong liquidity buffer and stable business
profile continue to support its rating," says Franco Leung, a
Moody's Vice President and Senior Analyst.
KWG has consistently maintained a strong liquidity profile over
the past 2-3 years. Its cash to short-term debt ratio was high at
314% at end-2014, even though slightly down from 354% at end-2013.
KWG has one of the strongest liquidity buffers among its Ba3/B1
peers, which will help protect the company against potential
headwinds in the challenging property market.
But a sustained deterioration in its cash to short-term ratio
could result in rating pressure.
The company has a good operating track record in the property
sector through the cycles. Its strong market positions in its
core markets, mainly Guangzhou, Beijing and Shanghai, also support
its ratings.
"The negative outlook reflects that KWG's weak interest coverage
and high debt leverage continue to constrain its financial
flexibility. In particular, its interest coverage is weaker than
that of its similarly rated domestic peers," adds Leung, also
Moody's lead analyst for KWG.
KWG's adjusted EBITDA interest coverage declined to 1.2x in 2014
from 1.4x in 2013 as a result of its high leverage. Even after
taking into account the attributable portion of KWG's jointly
controlled entities, Moody's estimates that its adjusted
EBITDA/interest coverage would have been around 1.8x in 2014,
which is weak for its rating level.
KWG's reported debt increased 17% year-on-year to RMB24.5 billion
at end 2014. Its debt leverage -- as measured by revenue/gross
debt -- remained very weak at 42.7% in 2014 from 45.3% in 2013,
despite 11% year-on-year growth in revenue to RMB10.5 billion in
2014.
Moody's expects the company's credit metrics will remain weak,
with revenue/gross debt around 40%-45%, and adjusted EBITDA
interest coverage -- including the pro-rated shares of its jointly
controlled entities -- around 2x over the next 12 months.
Given the challenging operating conditions in China's property
market, Moody's expects the company to achieve only modest sales
growth in 2015. Such modest sales growth, together with the
company's continued investments in its investment property
portfolio, makes any material deleveraging over the next 1-2 years
unlikely.
KWG reported 26% year-on-year contracted sales growth to RMB20.5
billion in 2014, even amid the weak property market conditions in
China.
The company will continue to reply on joint venture projects to
support its future growth. While its project partners are mostly
reputable developers, Moody's notes that joint venture disclosure
is less vigorous and hence reduces corporate transparency.
KWG's Ba3 corporate family rating continues to reflect its strong
brand name, supported by its good quality and diversified
portfolio of office, retail and residential properties that
command premium pricing. The rating also recognizes the firm's
good operating track record in Guangzhou, Beijing, Shanghai,
Chengdu and Suzhou.
Moody's would consider downgrading KWG's ratings if it: (1) fails
to achieve strong sales growth; (2) materially increases its
project investments, such that its liquidity or leverage positions
come under pressure with cash to short-term debt falling below
200%; (3) shows evidence of a material weakening of its
profitability; and/or (4) shows a deterioration in its interest
coverage, such that adjusted EBITDA/interest falls below 2.0x-
2.5x, or its debt leverage further rises.
Given KWG's negative rating outlook, a ratings upgrade is
unlikely.
Nevertheless, the rating outlook could return to stable if KWG:
(1) continues its prudent approach to financial management,
including the maintenance of a good liquidity buffer, and its
cautious approach to business expansion; or (2) improves its
interest coverage and manages down its current debt leverage, thus
improving its financial flexibility.
The principal methodology used in this rating was Global
Homebuilding Industry published in March 2009.
KWG Property Holding Limited is a Chinese property developer
founded in 1995. At end-2014, it had a total attributable land
bank of around 10.1 million sqm in gross floor area in Guangzhou,
Chengdu, Suzhou, Beijing, Shanghai, Tianjin and Hainan, Hangzhou,
Nanning, and Zhengzhou. KWG mainly develops mid- to high-end
residential properties, office buildings, shopping malls and
hotels.
MODERN LAND: 2014 Results Support B2 CFR, Moody's Says
------------------------------------------------------
Moody's Investors Service says that Modern Land (China) Co.,
Limited's full-year results for 2014 were in line with Moody's
expectation and support its B2 corporate family rating and senior
unsecured rating.
The ratings outlook is stable.
"Modern Land's credit profile remained well-positioned relative to
B2 peers, despite an increase in leverage during the year to fund
land acquisitions," says Dylan Yeo, a Moody's Analyst.
Modern Land's leverage increased in 2014, with revenue-to-debt
ratio declining to 80.6% from 133.3%, as total adjusted debt rose
by 94% to RMB5.1 billion from RMB 2.6 billion. EBITDA interest
coverage also fell to 2.8x from 8.7x as a result of the higher
debt. Nevertheless, these ratios remained well-positioned at the
B2 rating level.
The increase in debt level was mainly due to the issuance of the
RMB1.1 billion senior unsecured notes in January 2014 and the $125
million senior unsecured notes in July 2014 that were used to
partly used to finance land purchases. The company acquired 9
parcels of land in 2014 with total GFA of 1.5 million square
meters (sqm) across Jiujiang, Changsha, Beijing, Wuhan, Hefei and
Shanghai.
"We expect revenue-to-debt to improve to 90-100% in 2015 if the
company successfully executes its sale plans, while keeping a
balance between liquidity and growth.
Modern Land's sales performance was resilient amid the weakened
operating environment, as it successfully maintained EBITDA margin
at a healthy level while scaling up" says Yeo.
The company recorded stable adjusted EBITDA margin of around 30%
in 2014, reflecting the company's pricing power through product
differentiation. Revenue increased by 18% to RMB4.1 billion from
RMB 3.5 billion mainly from volume growth. Total saleable GFA
increased to 431,044 sqm from 367,098 sqm while average selling
price increase slightly to RMB9,077 per sqm from RMB8,950 per sqm.
Contracted sale also increased by 69% in 2014, driven by an
increase in GFA to 0.8 million sqm from 0.4 million sqm. However,
average selling price fell to RMB9,096 per sqm from RMB11,235 sqm,
reflecting a rising proportion of mass market projects and weaker
market conditions.
In 2015, we expect revenue to grow by 40-50%, backed by strong
contracted sales in prior years. EBITDA margin will gradually
compress due to greater contribution of mass market projects and
lower selling prices.
"Liquidity remained a key credit strength for the company as it
expands its operational scale," adds Yeo.
Modern Land maintained a healthy liquidity position in 2014 with
cash on hand, including restricted cash, of RMB3.9 billion
compared to RMB2.9 billion in 2013.
Short-term debt increased in 2014 as a larger proportion of longer
term bank loans comes due over the next 12 months. However, cash-
to-short term debt remained strong at 300% at end-2014.
The principal methodology used in this rating was Global
Homebuilding Industry published in March 2009.
Listed on the Hong Kong Stock Exchange in July 2013, Modern Land
(China) Co., Limited was founded in Beijing in 2000 by the
company's chairman, Mr Zhang Lei. It specializes in developing
"comfort living" housing units and is one of the few early
pioneers of green and eco-friendly projects in China.
As of end-December 2014, the company had a total land bank of 4.5
million square meters in gross floor area in China, excluding
investment properties and properties held for own use. Its
properties are located in cities such as Beijing, Jiujiang,
Nanchang, Taiyuan, Changsha, Xiantao, and Wuhan.
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AL-SAMI AGRO: CARE Assigns B+ Rating to INR22.5cr LT Bank Loan
--------------------------------------------------------------
CARE assigns rating of 'CARE B+' to the bank facilities of
Al-Sami Agro Products Private Ltd.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 22.50 CARE B+ Assigned
Rating Rationale
The rating assigned to the bank facilities of AL-Sami Agro
Products Private Ltd (AAPPL) is constrained by the aggressive
debt-funded nature of the project, cost and time overrun in the
project with commencement of principal repayments before
commencement of commercial operation, time lag associated with
stabilisation of the operation and vulnerability of the business
to changes in import regulations in the targeted export markets.
The rating is, however, underpinned by the experienced promoters
with financial support provided and significant project work
completed with the project being on the verge of commencement of
the operation. The ability of the company to commence the
operation within the timeline envisaged, derive benefit therefrom
and continued financial support from the promoters are the key
rating sensitivities.
AAPPL, incorporated in January 2009, is promoted by Mr Abdul Salam
(Managing Director) and his family. The company is setting up a
slaughterhouse along with meat processing plant and a rendering
plant at Sankhavaram Mandal in East Godavari district of Andhra
Pradesh. Mr Abdul Salam has around 25 years of experience in food
processing business.
The aggregate project cost of INR43.75 crore is being financed
through term loan of INR22.50 crore, equity of INR15.00 crore and
balance trough unsecured loans from the promoters. The company has
already spent INR43.25 crore (99%) on the project as on February
28, 2015, and the rendering plant has been completed. The trial
run is in progress for the slaughterhouse and meat processing
plant and the same is expected to start commercial operation from
first week of April 2015.
APT PACKAGING: CRISIL Reaffirms D Rating on INR82.1MM Term Loan
---------------------------------------------------------------
CRISIL's ratings on the bank loan facilities of Apt Packaging
Limited (Apt) reflects the company's weak financial risk profile,
marked by a small net worth, high gearing, and weak debt
protection metrics, and small scale of operations. However, the
company benefits from its established relationships with
customers.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 4 CRISIL D (Reaffirmed)
Cash Credit 26.4 CRISIL D (Reaffirmed)
Cash Credit - Book 22.5 CRISIL D (Reaffirmed)
Debt
Cash Credit-Stock 22 CRISIL D (Reaffirmed)
Letter of Credit 21 CRISIL D (Reaffirmed)
Packing Credit 11 CRISIL D (Reaffirmed)
Post Shipment Credit 11 CRISIL D (Reaffirmed)
Rupee Term Loan 82.1 CRISIL D (Reaffirmed)
CRISIL had downgraded its ratings on the bank facilities of Apt
Packaging Ltd (Apt) to 'CRISIL D/CRISIL D' from 'CRISIL B-
/Stable/CRISIL A4' through its rating rationale dated Feb. 10,
2015.
The rating downgrade was driven by delays in servicing of term
loan by Apt; the delays were on account of the company's weak
liquidity arising from operating losses over the past four years
because of high interest cost. The company had undertaken a large
capital expenditure (capex) programme to set up a plant in
Haridwar (Uttarakhand) to take advantage of the excise duty
exemption offered by the state government. The company contracted
a large loan to finance the capex, which has resulted in a
substantial interest burden on it. Its operating profit is lower
than its interest cost leading to losses at the operating level.
Apt was established in 1979 as Anil Chemicals Pvt Ltd, and was
listed on the Bombay Stock Exchange in 1985 as Anil Chemicals and
Industries Ltd; it got its present name in 2008. Apt manufactures
coextruded plastic tubes for pharmaceutical and fast-moving
consumer goods companies. The company was discharged from the
Board for Industrial and Financial Reconstruction in June 2011.
ASHVI DEVELOPERS: CARE Reaffirms D Rating on INR325cr LT Loan
-------------------------------------------------------------
CARE reaffirms the rating assigned to the bank facilities of
Ashvi Developers Pvt Ltd.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 325 CARE D Reaffirmed
Rating Rationale
The rating assigned to the bank facilities of Ashvi Developers
Pvt. Ltd. (ADPL) continue to be constrained by the on-going
delays in the servicing of the company's debt obligations.
ADPL is promoted by the Ariisto Realtors group based in Mumbai.
The group began its operations under Mr Narendra Patel and is now
managed by his sons, Mr Hiren Patel and Mr Atithi Patel. The group
has real estate development experience of around three decades.
The group has developed 68 lakh square feet (lsf) area (11
completed projects) till date which includes super-premium
residential towers, affordable housing townships, luxurious retail
spaces and TDR generating rehab projects.
Project background
ADPL along with another company, Atithi Builders and Constructors
Pvt Ltd (ABCPL) of the Ariisto Realtors group, is developing a
real estate project "Ariisto Solitaire" at Goregaon, Mumbai. The
initial plan was to develop commercial real estate development
with retail shops on the lower floors. However, subsequently the
management revised the plans (in 2011) to build high street retail
shops on the lower floors and residential development on the upper
floors.
Continued delay in servicing the interest on bank loans
There has been a continuous delay in servicing the interest on the
term loan availed by the company for the ongoing project. The
delays in servicing of debt obligations are on account of its weak
liquidity position. "Ariisto Solitaire" project has got delayed as
ADPL has not received Commencement Certificate (CC) beyond the
podium level. This led to delay in launch of the project for sale
and subsequently non receipt of customer advances. Also, banks
have only disbursed part of the total sanctioned amount, which
further added to the liquidity crunch. The principal repayments
related to the bank loan are scheduled to begin from June 2015.
ADPL has applied for the revised CC and anticipates receiving it
in H1FY16, posting which it will launch the project for sale.
BALAJI FIBER: CARE Lowers Rating on INR13cr Bank Loan to D
-----------------------------------------------------------
CARE revises the ratings assigned to bank facilities of Balaji
Fiber Reinforce Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 12 CARE D Revised
from CARE B+
Long term/Short-term Bank
Facilities 13 CARE D Revised
from CARE B+/CARE A4
Short-term Bank Facilities 9 CARE D Revised
from CARE A4
Rating Rationale
The revision in the ratings assigned to the bank facilities of
Balaji Fiber Reinforce Private Limited (BFRPL) was primarily on
account of frequent instances of overdrawing in cash credit limit
above its drawing power due to its weak liquidity position.
Establishing a track record of debt servicing with no overdrawing
along with improvement in the liquidity position is the key rating
sensitivity.
Vadodara-based (Gujarat) BFRPL was incorporated as a
proprietorship concern named 'Reinforced Plastic Products' in
1963 by Mr Shantilal Patel. Later in March 2007, BFRPL assumed its
current name after being converted to into private limited company
subsequent to its reconstitution as a partnership firm in April
2002 to Balaji Industries. BFRPL manufactures fiber-reinforced
plastic (FRP)/glass-reinforced plastic (GRP) based components &
pipes, GRP/FRP tanks, filtration tanks, portable toilets, vessels,
etc. BFRPL also undertakes turnkey projects related to water
effluent disposable projects, sewage treatment plant, water supply
pipelines, tailor made products for railways, LED street lights,
solar water systems etc. BFRPL is certified as ISO 9001:2008, ISO
14001:2004, IS: 12709, IS: 14402 and OHSAS 18001:2007. Further,
BFRPL also has 'AA' class contractor from PWD department of
Gandhinagar and Rajasthan.
As per the audited results for FY14, BFRPL reported a TOI of
INR31.78 crore and PAT of INR0.91 crore as against a TOI of
INR75.67 crore and PAT of INR2.23 crore during FY13. As per the
provisional results for 11MFY15 (refers to the period
April 1 to February 28), BFRPL registered a TOI of INR21 crore.
BHAGYODAYA MOTORS: CRISIL Reaffirms B Rating on INR150MM Loan
-------------------------------------------------------------
CRISIL's ratings on the bank facilities of Bhagyodaya Motors
Private Limited (BMPL; part of the Bhagyodaya group) continue to
reflect the Bhagyodaya group's below-average financial risk
profile marked by high total outside liabilities to tangible net
worth (TOLTNW) ratio and weak debt protection metrics, and
exposure to intense competition in the automobile dealership
segment.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 150 CRISIL B/Stable (Reaffirmed)
Channel Financing 17.5 CRISIL A4 (Reaffirmed)
Long Term Loan 8.5 CRISIL B/Stable (Reaffirmed)
Proposed Long Term 18.5 CRISIL B/Stable (Reaffirmed)
Bank Loan Facility
Standby Line of 10 CRISIL B/Stable (Reaffirmed)
Credit
These rating weaknesses are partially offset by the Bhagyodaya
group's established position in the automobile dealership market
for Tata Motors Ltd (TML; rated 'CRISIL AAA (SO)/Stable/CRISIL
AA/Stable/CRISIL A1+') in north Karnataka.
For arriving at the ratings, CRISIL has combined the business and
financial risk profiles of Bhagyodaya Motors Pvt Ltd (BMPL) and
Bhagyodaya Trokhos Pvt Ltd (BTPL). This is because the two
companies, together referred to as the Bhagyodaya group, are in
the same line of business, under the same management, and have
significant operational linkages.
Outlook: Stable
CRISIL believes that the Bhagyodaya group will continue to benefit
over the medium term from its established position in the
automobile dealership market for TML in North Karnataka. The
outlook may be revised to 'Positive' if the group's volumes and
operating margin improve substantially or in case of any
significant equity infusion by the promoters, resulting in
improvement in its capital structure and debt protection metrics.
Conversely, the outlook may be revised to 'Negative' if the
Bhagyodaya group's revenue and profitability decline
significantly, or if the group undertakes a large debt-funded
capital expenditure programme, resulting in deterioration in its
capital structure and cash accruals.
Set up in 1998 as a partnership firm, BMPL was reconstituted as a
private limited company in 2002. The company is the exclusive
authorised dealer for TML's passenger car in three districts '
Bellary, Koppal, and Raichur (all in Karnataka).
BTPL was incorporated in 2006. The company is the exclusive
authorised dealer for TML's light commercial vehicles (LCVs) in
Bellary, Koppal, and Raichur.
CEBON CERAMIC: CARE Assigns B Rating to INR4cr LT Bank Loan
-----------------------------------------------------------
CARE assigns 'CARE B' and 'CARE A4' ratings to the bank facilities
of Cebon Ceramic Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 4 CARE B Assigned
Long-term/ Short-term 1 CARE B/CARE A4
Bank Facilities Assigned
Short-term Bank Facilities 1 CARE A4 Assigned
Rating Rationale
The rating assigned to the bank facilities of Cebon Ceramic
Private Limited (CCPL) are primarily constrained on account of
project implementation and stabilization risk associated with its
new ceramic tile manufacturing, susceptibility of its operating
margin to volatility in prices of natural gas and key raw
materials and presence in a highly competitive ceramic industry
and fortunes linked to demand from the cyclical real estate
sector.
The above constraints are partly offset by the wide experience of
the promoters in the ceramic industry and location advantage with
presence in ceramic hub with easy access to raw material, fuel and
labour.
CCPL's ability to stabilize its business operations by achieving
the envisaged sales and profitability in light of high level of
competition and raw material fluctuations while managing its
working capital requirements efficiently remain the key rating
sensitivity.
Cebon Ceramic Private Limited (CCPL) was incorporated in January,
2014 with Mr Amitkumar Thakarsinhbhai Patel and Mr Manishkumar
Jayantibhai Aghara being its key directors.CCPL has proposed to
set up its green field project for manufacturing of digital
ceramic wall tiles with an installed capacity of 12,000 Metric
Tonnes Per Annum(MTPA) at Morbi in Gujarat. CCPL has proposed to
manufacture the tiles in two different sizes i e 10"*13" and
10"*15". The company has completed the entire project till March
10, 2015. The total cost of the project is INR9.34 crore which is
to be funded through equity capital of INR3.50 crore, term loan of
INR4 crore and balance of INR 1.84 crore through unsecured loans
from the promoters. The company has envisaged commencing its
commercial production in the last week of March 2015.
DIAMANT INFRASTRUCTURE: CRISIL Reaffirms B+ Rating on INR80M Loan
-----------------------------------------------------------------
CRISIL's rating on the bank facilities of Diamant Infrastructure
Ltd (DIL) continue to reflect DIL's customer concentration in
company's order book, and risks associated with working-capital-
intensive nature of operations. These rating weaknesses are
partially offset by DIL's moderate gearing and healthy debt
protection metrics.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 20 CRISIL A4 (Reaffirmed)
Cash Credit 80 CRISIL B+/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility 40 CRISIL B+/Stable (Reaffirmed)
Update
DIL's revenue declined in 2013-14 (refers to financial year, April
1-March 31) to INR570 million from INR913 million in the previous
year on account of lower availability of major road construction
orders after the completion of the earlier projects. In 2014-15,
the company's revenue continued to be low at about INR344 million
till December 2014, on account of subdued demand in the
infrastructure sector. The company's order book stood at about
INR775 million to be executed by June 2016. The company continues
to be exposed to risks related to customer concentration in its
order book. The company's ability to execute the order book in a
timely manner and ability to secure new orders remain key rating
sensitivity factors that will determine revenue over medium term.
The company's working capital cycle continues to remain stretched
on account of the high debtors and inventory levels reflected in
the gross current assets in the range of 200-250 days, estimated
as on March 31, 2015.
The capital structure and debt protection metrics of the company,
however, are expected to remain above average marked by gearing of
about 0.60 time estimated as on March 31, 2015, net cash accruals
to total debt ratio of 29 per cent and interest coverage ratio of
about 2.75 times, estimated for 2014-15. The financial profile is
however, constrained by liquidity, which is marked by term debt
repayments of up to INR40 million annually against which its cash
accruals are expected to be tightly matched. The working capital
cycle and cash accruals generated by company will remain key
rating sensitivity factors as it will determine liquidity profile
over the medium term.
Outlook: Stable
CRISIL believes that DIL will continue to benefit over the medium
term from its comfortable gearing. The outlook may be revised to
'Positive' if DIL achieves higher than expected growth while
maintaining its profitability and capital structure. Conversely,
the outlook may be revised to 'Negative' if DIL's liquidity
deteriorates most likely from stretch in its incremental working
capital requirements or increase in reliance on debt to fund its
capacity expansion plans, thereby weakening its capital structure,
debt servicing metrics or if the company's cash accruals decrease
sharply, due to lower order execution or decline in its operating
profitability.
DIL, established in 1980, is a Nagpur based player, engaged in the
infrastructure business in India primarily as a sub-contractor in
the road sector.
The company registered a profit after tax (PAT) of INR0 on net
sales of INR570 million in 2013-14, against a PAT of INR12.5
million on net sales of INR913 million in 2012-13.
ETCO DENIM: CARE Cuts & Suspends 'D' Rating on INR237cr Loan
------------------------------------------------------------
CARE revises the rating assigned to the bank facilities of
Etco Denim Private Limited And Suspends Rating.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 237.00 CARE D Revised from
'CARE B'/Suspended
CARE has revised the ratings assigned to the bank facilities of
Etco Denim Private Limited on account of ongoing delays in
debt servicing.
Further, the rating has been suspended as the company has not
furnished the information required by CARE for monitoring of the
rating.
G. PURUSHOTHAM: CRISIL Assigns B Rating to INR50MM Capital Loan
---------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable' rating to the long term
bank facilities of G. Purushotham Naidu (GPN).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Working 50 CRISIL B/Stable
Capital Facility
The rating reflects GPN's modest scale of operations in the
fragmented civil construction industry, below average financial
risk profile marked by modest net worth and high gearing. These
rating weaknesses are partially offset by the extensive experience
of GPN's proprietor in the civil construction industry.
Outlook: Stable
CRISIL believes that GPN will continue to benefit over the medium
term from its proprietor's extensive industry experience. The
outlook may be revised to 'Positive' if the firm scales up its
operations significantly, leading to substantial cash accruals and
a better financial risk profile. Conversely, the outlook may be
revised to 'Negative' if GPN reports low revenue or profitability,
or if its working capital management deteriorates resulting in
weak liquidity, or if it undertakes a large debt-funded capital
expenditure programme, leading to weakening of its financial risk
profile.
Incorporated in 2005 and based out of Bengaluru (Karnataka), GPN
is engaged in execution of civil contracts, primarily construction
of buildings. The firm is founded and managed by Mr. G.
Purushotham Naidu.
GPN reported a profit after tax (PAT) of INR0.8 million on revenue
of INR5.8 million for 2013-14 (refers to financial year, April 1
to March 31), against a PAT of INR0.4 million on revenue of INR4.1
million for 2012-13.
INFINITY INFRATECH: CRISIL Rates INR47.5MM Term Loan at B+
----------------------------------------------------------
CRISIL has assigned 'CRISIL B+/Stable/CRISIL A4' ratings on the
bank facilities of Infinity Infratech.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 6 CRISIL A4
Cash Credit 20 CRISIL B+/Stable
Proposed Long Term 46.5 CRISIL B+/Stable
Bank Loan Facility
Term Loan 47.5 CRISIL B+/Stable
The ratings reflect the firm's modest scale of operations along
with working capital intensive nature of operations and below
average financial risk profile marked by high gearing levels and
modest debt protection metrics. These rating weaknesses are
partially offset by extensive experience of its promoter in the
pipes and stone aggregates industry coupled with established
relationship with customers and suppliers.
Outlook: Stable
CRISIL believes Infinity Infratech will continue to benefit from
the established relationship of promoters in the industry. The
outlook may be revised to 'Positive' if the firm substantially
increases its scale of operations leading to improvement in
financial risk profile. Conversely the outlook may be revised to
'Negative' in case of lower-than-expected accruals impeding its
debt repayment ability or larger-than-expected debt-funded capex
leading to further deterioration in financial risk profile.
Infinity Infratech was established in 2010 by Mr. Pratik Desai and
is engaged in the manufacturing of RCC Hume pipes, services
tenders of government in civil projects and manufactures stone
aggregates. The plant is located at Vapi.
JAY DEVELOPERS: CARE Assigns B Rating to INR8cr LT Bank Loan
------------------------------------------------------------
CARE assigns 'CARE B' rating to the bank facilities of Jay
Developers.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 8 CARE B Assigned
Rating Rationale
The rating assigned to the bank facilities of Jay Developers (JAD)
is constrained on account of implementation and salability risk
associated with the on-going project in light of low level of
booking advances received against booked units. The rating is
further constrained on account of inherent risk associated with
the cyclical real estate sector and constitution of JAD as a
partnership firm leading to limited financial flexibility and risk
of withdrawal of capital.
The rating, however, derives strength from the experience of the
promoters in the real estate sector coupled with moderate booking
status and moderate reliance on external debt. The ability of JAD
is to timely complete the on-going real estate project within
envisaged cost and timely receipt of booking advances along with
sale of balance units at envisaged prices are the key rating
sensitivities.
Established in May, 2013, Surat-based (Gujarat) Jay Developers
(JAD) was promoted by Mr Pareshbhai Lathiya along with 5 other
partners namely Mr Bhagwanbhai Lathiya, Mr Dilipbhai Lathiya, Mr
Govindbhai Lathiya, Mr Pravinbhai Lathiya and Mr Mahadevbhai
Bhigaradiya as a partnership firm to undertake real estate
projects. The promoters have experience of more than two decade in
real estate, land acquisition & development business. JAD was set
up to undertake one residential real estate project at Surat named
'Liberty Living' which comprises of 160 flats. The total saleable
area of the project is 2.24 lakh sq ft. (approximately).
JOY MAHAPROVU: CARE Assigns B Rating to INR8.0cr LT Bank Loan
-------------------------------------------------------------
CARE assigns 'CARE B' rating to the bank facilities of Joy
Mahaprovu Cold Storage Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 8.0 CARE B Assigned
Rating Rationale
The rating assigned to the bank facilities of Joy Mahapravu Cold
Storage Private Limited (JMCSPL) is constrained by its regulated
nature of business, seasonality of business with susceptibility to
the vagaries of nature, risk of delinquency in loans extended to
farmers, intense competition from local cold storage players and
weak financial risk profile marked by small scale of operations
with thin profit margins, leveraged capital structure and moderate
liquidity position. The rating, however, derives strength from the
experience of the promoters, its long track record of operations
and its' proximity to potato growing area.
The ability to increase its scale of operations with increase in
the profit margins and improvement in the capital structure along
with effective management of working capital will be the key
rating sensitivities.
JMCSPL was incorporated on June 1996 for setting up a cold storage
facility by the Dhawa family of Paschim Medinipur, West Bengal.
JMCSPL is engaged in the business of providing cold storage
services for potatoes to local farmers and traders on rental basis
with an aggregate storage capacity of around 8,000 metric ton per
annum (MTPA). The cold storage is located at Paschim Medinipur
district of West Bengal. Besides providing cold storage facility,
the company also provides interest bearing advances to farmers and
traders for potato farming and storing purposes against potato
stored.
During FY14 (refers to the period April 1 to March 31), the
company reported a PBILDT (profit before interest lease
depreciation) of INR0.10 crore (Rs.0.29 crore in FY13) and a PAT
(profit after tax) of INR0.05 crore (Rs.0.03 crore in FY13)
on the total income from operations of INR1.86 crore (Rs.1.66
crore in FY13).
JSM DEVCONS: CARE Reaffirms B+ Rating on INR13.07cr LT Bank Loan
----------------------------------------------------------------
CARE revokes suspension and reaffirms the ratings assigned to the
bank facilities of JSM Devcons India Pvt. Ltd.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 13.07 CARE B+ Reaffirmed
Long term/Short term Bank
Facilities 0.77 CARE B+/CARE A4
Reaffirmed
Rating Rationale
The ratings assigned to the bank facilities of JSM Devcons India
Pvt. Ltd. (JDIPL) continue to remain constrained on account of
risk associated with the on-going project owing to changes in the
scope of the project, time and cost overrun along with saleability
risk associated with unsold units in light of moderate booking
status due to subdued real estate scenario and presence in highly
competitive and cyclical industry.
The ratings, however, continue to derive strength from experience
of the promoters, moderate project gearing with strategic project
location coupled with advanced stage of project implementation.
The ability of JDIPL to complete its on-going project within
envisaged time and cost parameters along with sale of balance
units at envisaged prices is the key rating sensitivity.
Indore-based JDIPL was incorporated as a private limited company
in 2011 and is engaged in real estate development business. JDIPL
is executing one residential township project named 'Pinnacle D
Desire' at Indore, Madhya Pradesh, with saleable area of 13.01
lakh sq. ft. (lsf) which includes sale of 280 plots. JDIPL also
has one associate concern, namely, JSM Devcons Pvt. Ltd., which is
also into real estate business with projects concentrated into
Madhya Pradesh.
During FY14 (refers to the period April 1 to March 31), JDIPL
reported a TOI of INR23.49 crore and PAT of INR0.54 crore as
against a TOI of INR1.06 crore and a PAT of INR0.11 crore during
FY13.
KOHINOOR HATCHERIES: CRISIL Reaffirms B- Rating on INR462MM Loan
----------------------------------------------------------------
CRISIL's ratings on the bank facilities of Kohinoor Hatcheries
Private Limited (KHPL) continue to reflect KHPL's working capital
intensive operations and its below average financial risk profile
marked by high gearing and below average debt protection metrics
and its vulnerability to risks inherent in poultry industry .These
rating weaknesses are partially offset by KHPL's established
regional presence in poultry segment backed by experience of
promoters.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 180 CRISIL B-/Stable (Reaffirmed)
Term Loan 462 CRISIL B-/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that KHPL will continue to benefit over the medium
term from its promoters' extensive experience in the poultry
industry. The outlook may be revised to 'Positive' if there is a
substantial and sustained improvement in the company's revenues
and profitability margins, or there is a sustained improvement in
its working capital management. Conversely, the outlook may be
revised to 'Negative' in case of a steep decline in the company's
profitability margins, or significant deterioration in its capital
structure caused most likely by a large debt-funded capital
expenditure.
KHPL was incorporated in 1991 by Mr. D Raghava Rao. The company is
engaged in undertaking poultry breeding and is based out of
Hyderabad, Telangana.
KJS EDUCATIONAL: CRISIL Reaffirms D Rating on INR255MM Loan
-----------------------------------------------------------
CRISIL's rating on the long-term bank facilities of
KJs Educational Institute (KEI) continues to reflect instances of
delay by KEI in servicing its interest obligations; the delays
have been caused by the trust's poor liquidity.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term 255 CRISIL D (Reaffirmed)
Bank Loan Facility
Term Loan 245 CRISIL D (Reaffirmed)
KEI also has a weak financial risk profile, marked by high gearing
and weak debt protection metrics, though supported by a moderate
net worth. Moreover, it is susceptible to regulatory changes in
the education sector. However, the trust benefits from the healthy
demand prospects for the education sector in India.
Update
KEI operating income grew 33 per cent year-on-year to INR645
million in 2013-14 (refers to financial year, April 1 to
March 31). The trust has intake of 6350 students for 2014-15; this
is expected to register a moderate growth of around 10 per cent.
The operating margin of the trust is expected to remain healthy at
above 30 per cent over the medium term, supported by healthy
occupancy of more than 85 per cent. The working capital cycle,
however, is stretched as the grant for students admitted for
reserved categories is realised with delay. The trust is gradually
paying off the outstanding creditors from group company K J
Infrastructure Projects India Pvt Ltd. Thus the liquidity of the
trust continues to be stretched and it is delaying in servicing
its term debt obligation. The trust has half yearly obligation of
INR34 million and the installment due in December 2014 is being
gradually clearly in March 2015. CRISIL expects the liquidity of
the trust to remain weak over the medium term, on account of
stretch in working capital cycle and cash flow mismatch in
repayments and fee received.
KEI reported a net surplus of INR43.1 million on a net income of
INR645 million for 2013-14, against a net surplus of INR26.7
million on a net income of INR487.0 million for 2012-13.
KEI, registered as a trust in 2005, provides courses in
engineering and business administration. The trust currently
operates four colleges: Trinity College of Engineering & Research,
KJ College of Engineering & Management Research, Purandar College
of Engineering and Management Research, and Trinity Institute of
Management & Research. These colleges have the required approvals
from authorities such as the All India Council for Technical
Education, Directorate of Technical Education, and the Government
of Maharashtra, and are affiliated to the University of Pune
(Maharashtra).
MAITHAN ISPAT: CARE Reaffirms D Rating on INR600.75cr LT Loan
-------------------------------------------------------------
CARE reaffirms the rating assigned to the bank facilities of
Maithan Ispat Ltd.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 600.75 CARE D Reaffirmed
Short-term Bank Facilities 144.85 CARE D Reaffirmed
Rating Rationale
The rating takes into account the ongoing delays in debt servicing
amidst deteriorating financial position of the company and subdued
steel industry scenario.
MIL, incorporated in August 2003, was promoted by Maithan group
belonging to Agarwalla family of Asansol. Shri Basant Kumar
Agarwalla, the main promoter, has rich experience in iron & steel
industry for over three decades. MIL commenced commercial
operation in August, 2006 and currently, the company's activities
comprise manufacturing of sponge iron (2,30,000 TPA), billets
(2,46,000 TPA), heavy section steel (3,76,000 TPA) and captive
power generation (30 MW) at Kalinganagar Industrial Complex,
Orissa. Apart from the promoters, Orix Corporation, Japan, has
invested in MIL and holds 28.22% stake in the company.
Due to the continued subdued scenario of the steel industry, high
input cost, non-availability of raw material, lower absorption of
fixed overheads arising out of underutilisation of capacities, the
cash accruals of the company has been severely affected leading to
delays in debt servicing. Further, due to erosion of networth by
more than 50% in the FY12, a reference had been made with the
Board for Industrial & Financial Re-construction (BIFR).
During FY14 (refers to the period April 1 to March 31), the
company incurred net loss of INR 146.7 crore on a total
operating income of INR397.9 crore. During H1FY15, the company
reported a loss of INR62.03 crore on total operating income of
INR238.5 crore.
METRO ECO: CARE Reaffirms B+ Rating on INR75cr LT Bank Loan
-----------------------------------------------------------
CARE reaffirms the ratings assigned to the bank facilities of
Metro Eco Green Resorts Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 75 CARE B+ Reaffirmed
Rating Rationale
The rating of the bank facilities of Metro Eco Green Resorts Ltd
(MEGRL) is constrained by the project execution risk given the
initial stage of the project, high competition from the existing
and upcoming hotels in the vicinity, and cyclical nature of the
hospitality industry. These constraints are, however, partially
offset by the strength derived from operating and marketing
arrangement with one of the leading hotel chains, EIH Ltd,
achievement of financial closure and favourable location of the
resort. Going forward, the ability of the company to complete the
project within the envisaged cost and time and achieving the
projected average room revenue (ARR) and occupancy remain the key
rating sensitivities.
Metro Eco Green Resorts Ltd (MEGRL) was originally constituted as
Continental Hatcheries Pvt. Ltd in August 1985 to carry on the
hatchery business; however, the same was discontinued in November
1990. The land of the company has been lying vacant since then and
the promoters are now looking to develop an eco tourist resort on
the same. A fresh certificate of incorporation was issued in June
2008 vide which the name and objective of the company was changed
to the present one.
MEGRL is setting up a premium resort in Pallanpur, Punjab by the
name of Oberoi Sukhvillas at an estimated project cost of
INR123.56 crore to be financed with a debt equity ratio of 1.31:1.
The resort will consist of 48 villas, 12 tents, one presidential
suite, 2 restaurants, a bar, a spa, swimming pool, banquet
facility and business centre. The management agreement for
management and operation of the resort has been entered into with
EIH Ltd. (Oberoi group of hotels). The resort is expected to
commence operations from April 2016.
MOAT PROJECT: CRISIL Assigns B Rating to INR100MM Bank Loan
-----------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable' rating to the long term
bank facilities of Moat Project Management Pvt Ltd (MPMPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term 100 CRISIL B/Stable
Bank Loan Facility
The rating reflects the MPMPL group's exposure to risks related to
the implementation and stabilisation of its on-going project,
which involves setting up of a school. The rating also factors in
the group's modest financial risk profile marked by moderate
gearing and modest net worth. The above-mentioned weaknesses are
partially offset by the benefits derived from the extensive
industry experience of its promoters and its favourable industry
prospects.
For arriving at its rating, CRISIL has combined the business and
financial risk profiles of Moat Project Management Pvt Ltd.
(MPMPL) and The Charter School (Charter), together referred to as
the MPMPL group. This is because the two companies are under the
same management team, and have considerable financial linkages
with each other.
Outlook: Stable
CRISIL believes that the MPMPL group will continue to benefit over
the medium term from its promoters' extensive industry experience.
The outlook may be revised to 'Positive' if earlier-than-expected
stabilisation of the project results in higher revenues and
profitability, leading to improvement in its financial risk
profile. Conversely, the outlook may be revised to 'Negative' if
there is significant delay in stabilisation of its operations
leading to time and cost overruns in its ongoing project resulting
in weakening of its financial risk profile.
Incorporated in 2012 and based in Cochin, MPMPL group is setting
up a school. The company is promoted by Mr. Binoy J Kattadiyil,
Mr. Rakhinth Subramanian and their associates.
MONGA FOODS: CARE Assigns B+ Rating to INR10.5cr LT Loan
--------------------------------------------------------
CARE assigns 'CARE B+' rating to the bank facilities of Monga
Foods Private Limited (MFP).
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 10.50 CARE B+ Assigned
Rating Rationale
The rating assigned to the bank facilities of Monga Foods Private
Limited (MFP) is primarily constrained by its small scale of
operations with low net worth base, working capital intensive
nature of operations and weak financial risk profile characterized
by low profitability margins, leveraged capital structure and weak
debt coverage indicators. The rating is further constrained by
susceptibility of margins to fluctuations in raw material prices
and MFP's presence in a highly fragmented industry characterized
by intense competition.
The rating, however, derives comfort from experience of the
promoters in the agro processing industry and favourable
processing location.
Going forward, the ability of the company to increase its scale of
operations along with improvement in profitability margins as
well as capital structure and efficient working capital management
would be the key rating sensitivities.
Monga Foods Private Limited (MFP) was incorporated in April, 2000
and is currently being managed by Mr Kamal Kishore, Mr Ranjit
Singh, Mr Harpreet Singh and Mr Rahul Garg. The company is engaged
in the processing of paddy at its facility located at Ferozpur,
Punjab having an installed capacity of 28,800 metric ton per annum
(MTPA) as on March 31, 2014. MFP is also engaged in trading of
rice (constituted around 20% of the total income in FY14 -- refers
to the period April 1 to March 31). The company procures paddy
directly from local grain markets through commission agents
located in Punjab. Furthermore, MFP sells its products i e Basmati
and Non-Basmati rice under the brand name of 'Real Punjab' and
'Balle Balle' in the states of Maharashtra, Andhra Pradesh,
Himachal Pradesh and Punjab through a network of commission
agents. The group concerns of the company include RSG Foods
Private Limited (CARE B+), Jossan Commission Agents, Rahul Trading
Company and Sahib International Private Limited which are engaged
in a similar line of business.
Credit risk assessment
Small scale of operations with low net worth base
Despite being in operations for around one and a half decade, the
company's scale of operations has remained low marked by TOI of
INR41.91 crore for FY14 (refers to the period April 1 to March31)
and tangible net worth of INR2.04 crore as on March 31, 2014.
Although, the total operating income of MFP had increased from
INR15.22 crore in FY12 to INR41.91 crore in FY14 due to increase
in sale of basmati rice owing to higher orders received, but the
scale continues to remain small. During FY15, the company achieved
total operating income of INR47 crore till January 31, 2015. The
company's GCA was relatively small at INR0.66 crore for FY14. The
small scale limits the company's financial flexibility in times of
stress and deprives it from scale benefits.
Weak financial risk profile
The financial risk profile of the company is characterized by
declining profitability margins, leveraged capital structure and
weak debt coverage indicators.
The company's profitability margins are low and have declined on a
year on year basis from FY12-14. PBILDT and PAT margins stood at
4.43% and 0.33% respectively in FY14. The PBILDT margin witnessed
a declining trend due to company offering attractive pricing in
order to increase the total operating income. Furthermore, low
value addition and intense market competition given the highly
fragmented nature of the industry also results in low
profitability margins. This apart, interest burden on working
capital borrowings restricts the net profitability of the company.
NEPTUNE ESTATE: CARE Reaffirms B- Rating on INR6.77cr LT Loan
-------------------------------------------------------------
CARE reaffirms the rating assigned to the bank facilities of
Neptune Estate.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 6.77 CARE B- Reaffirmed
Rating Rationale
The rating assigned to the bank facilities of Neptune Estate (NEE)
continues to remain constrained on account of its small scale of
operations, short track record of operations, high dependence on
the promoter group for debt servicing, risk inherent to real
estate sector and its partnership nature of constitution.
The rating, however, favourably takes into account the vast
experience of the resourceful promoters in real estate sector.
Increase in the income from rent and continuous financial support
from the partners will remain the key rating sensitivity.
Vadodara-based NEE was incorporated as a partnership firm in
October 2012 to execute business of real estate development and
acquiring properties and give the same on lease. Initially, NEE
was promoted by 14 different partners, however, currently, it has
11 partners. NEE is a part of the Neptune group which is in the
field of real estate development since 1999. The flagship entity
of the group, Neptune Realty Private Ltd (NRPL) is engaged in the
real estate development.
Furthermore, its two group concerns, namely, Amod Stamping Pvt.
Limited and Atlanta Electricals Pvt. Ltd. are engaged in
the manufacturing of transformer cores and manufacturing of
electrical equipment, respectively.
During FY14 (refers to the period April 1 to March 31), NEE
reported a total operating income (TOI) of INR1.65 crore with a
PAT of INR0.38 crore as against TOI of INR0.11 crore with a PAT of
INR0.07 crore during FY13.
NEPTUNE INFRA: CARE Reaffirms B- Rating on INR35.57cr Loan
----------------------------------------------------------
CARE reaffirms the rating assigned to the bank facilities of
Neptune Infrastructure.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 35.57 CARE B- Reaffirmed
Rating Rationale
The rating assigned to the bank facilities of Neptune
Infrastructure (NEI) continues to remain constrained on account of
no assured revenue visibility, leverage capital structure, high
dependence on the promoter group for debt servicing, risk
inherent to the real estate sector and its partnership nature of
constitution.
The rating, however, favourably takes into account the vast
experience of the resourceful promoters in the real estate
sector.
Timely receipt of sales process at envisaged prices along with
continuous financial support received from the partners will
remain the key rating sensitivity.
Vadodara-based NEI was incorporated as a partnership firm in 2005
to execute the business of constructing and developing industrial,
residential and commercial projects as well as sale and purchase
of land. Initially, NEI was promoted by 14 different partners,
however, currently there are just two partners, viz, Neptune
Realty Private Limited (NRPL) having 99% share in profits and Mr
Niral K Patel having the remaining 1% share in profits. NEI is a
part of the Neptune group which is in the field of real estate
development since 1979. Furthermore, its two group concerns,
namely, Amod Stamping Pvt Limited and Atlanta Electricals Pvt Ltd
are engaged in the manufacturing of transformer cores and
manufacturing of electrical equipment, respectively.
During FY14 (refers to the period April 1 to March 31), NEI did
not report any total operating income (TOI), whereas it recorded a
PAT of INR-0.02 crore as against TOI of INR29.47 crore with a PAT
of INR0.80 crore during FY13.
OFFSHORE MARINETECH: CRISIL Reaffirms B+ Rating on INR45MM Loan
---------------------------------------------------------------
CRISIL's ratings on the bank facilities of Offshore Marinetech Pvt
Ltd (OMPL) continue to reflect OMPL's average financial risk
profile, marked by a small net worth and moderate gearing,
constrained bargaining power because of its small scale of
operations, and exposure to intense competition. These rating
weaknesses are partially offset by the extensive experience of
OMPL's promoters in the offshore drilling industry and the
company's established clientele.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 55 CRISIL A4 (Reaffirmed)
Cash Credit 45 CRISIL B+/Stable (Reaffirmed)
Proposed Long Term 30 CRISIL B+/Stable (Reaffirmed)
Bank Loan Facility
Outlook: Stable
CRISIL believes that OMPL will continue to benefit over the medium
term from its promoters' extensive industry experience and its
established customer relationships. The outlook may be revised to
'Positive' in case of significant increase in OMPL's revenue and
net cash accruals, along with significant improvement in its
working capital cycle. Conversely, the outlook may be revised to
'Negative' in case of a steep decline in revenue or profitability,
or any significant debt-funded capital expenditure (capex),
constraining the company's liquidity.
Update
For 2013-14 (refers to financial year, April 1 to March 31), OMPL
reported stable revenue of INR57.4 million as against INR56.1
million for 2012-13The company's operating margin remained
healthy, over 28 per cent for 2013-14, given the service nature of
its operations and reduction in fixed overhead costs amidst
competitive bidding for projects. CRISIL believes that OMPL's
revenue will remain modest, in the range of INR80 million to
INR100 million, over the medium term on account of the service
nature of its operations and exposure to intense competition;
however, the management's focus on bidding for high-margin
projects and reduction of overhead costs will translate into
sustained operating margin over the period.
OMPL's financial risk profile remains average, marked by small net
worth of INR45 million as on March 31, 2014, constrained by its
modest accretion to reserves and absence of equity infusion. While
it's gearing improved to 1.2 times as on March 31, 2014, its
working capital requirements are expected to constrain its capital
structure. OMPL's debt protection metrics remain moderate, with
interest coverage and net cash accruals to total debt ratios at 2
times and 14 per cent, respectively, during 2013-14. The promoters
have extended unsecured loans of INR7.3 million to OMPL (treated
as debt by CRISIL), which are expected to remain in the business
over the medium term and support the company's financial risk
profile.
OMPL's working-capital-intensive operations led to full
utilisation of bank limits over the 12 months through November
2014. Also, the company maintains low unencumbered cash and bank
balances of INR2 million. CRISIL believes that while absence of
term debt obligations and capex plans over the medium term will
support OMPL's liquidity, large working capital requirements and
low unencumbered cash and bank balance will continue to constrain
the company's liquidity.
OMPL was established in 2007 by Mr. K S Pai. It is an engineering,
procurement, and construction (EPC) company, and undertakes
mechanical, piping, structural, and erection and installation work
for onshore and offshore projects. The company also undertakes
ship-repair work, chiefly for Indian Naval Dockyard. OMPL has
manufacturing units at Rabale, Navi Mumbai, and Mumbai (all in
Maharashtra).
For 2013-14, OMPL reported a profit after tax (PAT) of INR2.9
million on net sales of INR57.4 million, against a PAT of INR2.7
million on net sales of INR56.1 million for 2012-13.
P.V.R. SHIP: CARE Reaffirms B/A4 Rating on INR50cr Bank Loan
------------------------------------------------------------
CARE reaffirms the ratings assigned to the bank facilities of
P.V.R. Ship Breaking Company.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term/Short-term 50 CARE B/CARE A4
Bank Facilities Reaffirmed
Rating Rationale
The ratings assigned to bank facilities of P.V.R. Ship Breaking
Company (PSBC) was continue to remain constrained on account of
its financial risk profile marked by thin and fluctuating
profitability, leveraged capital structure, weak debt coverage
indicators and modest liquidity position. The ratings further
remain constrained on account of exposure to volatility in steel
prices on uncut ship inventory and foreign exchange fluctuation
coupled with partnership nature of its constitution leading to
limited financial flexibility and risk of withdrawal of capital.
The ratings, however, continue to take into account the benefits
derived from the wide experience of the partners in the ship-
breaking industry and PSBC's presence in the Alang-Sosiya belt.
The ratings further factor in the growth in the total operating
income in FY14 (refers to the period April 1 to March 31).
PSBC's ability to recover cost of ships purchased through sale of
scrap in light of volatile scrap prices thereby improving
profitability and capital structure and timely
availability/renewal of rental plots from the regulatory
authorities are the key rating sensitivities.
Bhavnagar-based (Gujarat) PSBC is a partnership firm engaged in
ship-breaking business since 1998. The firm is also engaged in the
business of producing oxygen gas. The firm operates on a single
plot located at Alang, Bhavnagar, which is leased out by Gujarat
Maritime Board (GMB). The firm purchases ships and break them into
steel scrap, which is supplied to rolling mills in Gujarat. The
entire operations of the firm are managed Mr Vijender Jain and Ms
Bina Jain. PSBC has one plot with a capacity to break ships
equivalent to 25,000 tonnes of scrap in a year.
As per the audited results of FY14, PSBC reported a net profit of
INR0.37 crore on a total operating income (TOI) of INR69.58 crore
as against the TOI of INR62.26 crore and PAT of INR0.33 crore.
PSBC achieved TOI of INR50.42 crore till March 15, 2015.
PRAVIN BUILDTECH: CARE Assigns D Rating to INR9.37cr LT Loan
------------------------------------------------------------
CARE assigns 'CARE D' rating to the bank facilities of
Pravin Buildtech Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 9.37 CARE D Assigned
Rating Rationale
The rating assigned to the bank facilities of Pravin Buildtech
Private Limited (PBPL) is primarily constrained on account of
frequent instances of delay in interest servicing on term loan in
recent past due to weak liquidity position.
Establishing a clear track record of timely servicing of debt
obligations alongwith improvement in the liquidity position is
the key rating sensitivity.
Morbi-Gujarat based PBPL was established in 2012 as a private
limited company by three promoters led by Mr Bhavesh Bhalodia and
Mr Mitul Panara. PBPL is engaged in the business of manufacturing
of Autoclaved Aerated Concrete (AAC) blocks and its manufacturing
facilities located at Morbi with an installed capacity to produce
90,000 sq. cubic meters per annum as on March 31, 2014. Commercial
operations have been started from March, 2013.
As per the audited results for FY14 (refers to the period April 1
to March 31), PBPL reported a net profit of INR0.19 crore on a
total operating income (TOI) of INR11.63 crore as against net loss
of INR0.77 crore on a TOI of INR1.10 crore in FY13. As per the
provisional results for 9MFY15, PBPL registered a turnover of
INR12.03 crore.
RADHALAXMI SPINTEX: CARE Revises Rating on INR36.3cr Loan to B+
---------------------------------------------------------------
CARE revises/reaffirms the rating assigned to the bank facilities
of Radhalaxmi Spintex Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 36.30 CARE B+ Revised
from CARE B
Short-term bank Facilities 1.70 CARE A4 Reaffirmed
Rating Rationale
The revision in the long-term rating assigned to the bank
facilities of Radhalaxmi Spintex Private Limited (RSPL) was on
account of the successful implementation of the greenfield project
by the company along with the quick stabilisation of its
manufacturing facilities resulting in reasonable level of turnover
during provisional 11MFY15 (refers to the period April 1 to March
31).
The ratings continue to remain constrained on account of its
nascent stage of operations, presence in highly fragmented
cotton yarn segment of textile industry, susceptibility of
profitability to raw material price fluctuations, leverage capital
structure and working capital-intensive nature of operations.
The ratings continue to draw strength from the experience of the
promoters in cotton ginning activity; albeit RSPL being
their first venture in spinning activity, proximity to cotton
producing area of Gujarat and government incentives to the
textile industry.
The ability of RSPL to increase its scale of operations, improve
profitability and capital structure while efficiently managing its
working capital requirements are the key rating sensitivities.
RSPL is a private limited company incorporated on March 11, 2013,
and belongs to the Kakasaniya & Kotadiya group. The group is
engaged in cotton ginning & pressing and crushing with the product
mix of cotton bales, cottonseed wash oil and oil cakes through
Shree Ramkrushna Ginning and Oil Industries (SRGOI), ceramics
tiles manufacturing through Fea Ceramic and manufacturing of acid
proof bricks for kiln machinery through Arya Refractories. RSPL
has set-up a spinning mill with 17,280 spindles for manufacturing
approximately 3,353 MT of different counts cotton yarn per annum
at Lakhdhirgadh village, Tankara, Morbi.
During 11 months of FY15, ATCPL reported net sales of INR44.20
crore.
RICHA REALTORS: CARE Reaffirms C Rating on INR20cr NCDs
-------------------------------------------------------
CARE reaffirms rating assigned to NCD issue of Richa Realtors
Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Non-Convertible Debentures 20 CARE C Reaffirmed
(NCDs)
Proposed NCDs 10 CARE C Reaffirmed
Rating Rationale
The rating assigned to the NCDs of Richa Realtors Pvt Ltd
continues to factor the on-going delays in servicing of interest
and redemption of debentures of INR50 crore issued to Milestone
Real Estate Fund (MREF) (which are not rated by CARE).
Incorporated in 1995, Richa Realtors Pvt Ltd (RRPL) is a part of
the Richa group. The group has an experience of nearly two
decades, primarily in residential real estate market in and around
Mumbai. The Richa group is headed by Mr Prakash Joshi, who is the
Chairman and Managing Director (CMD). Mr Joshi ventured into the
construction business in 1985 and since then the Richa Group has
completed more than 20 projects in Mumbai and Pune. RRPL, along
with its group companies, has developed over 5 lsf area and
further 40 lsf is under construction.
RRPL has one major project under construction named 'Sundernagar'
at Kalina, Santacruz in Mumbai. It is a MHADA Redevelopment
project whereby 60 tenants would be rehabilitated. The project
would have 35 units (sale component) with 2BHK and 3BHK apartments
with a super built up area, ranging 1200-1500 sq ft each. The
project at Sundernagar involves construction of a saleable area of
0.53 lsf with a sale potential value of INR100 crore. The total
project cost of INR57 crore is proposed to be funded by debt
(NCDs) of INR24 crore, equity of INR12 crore and customer advances
of INR21 crore. The project was envisaged to be completed by
August 2015; however, the completion timeline has been delayed by
a year. As on November 30, 2014, the construction of 4th slab is
on-going. The company has outstanding NCDs of INR20 crore, out of
which INR16 crore would be utilized for Sundernagar project and
the remaining INR4 crore would be utilized for Happy Homes
project, which is being executed by Richa Realtors (RR), a group
entity.
RISHI TRADERS: CRISIL Cuts Rating on INR80MM Cash Loan to B
-----------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facility of
Rishi Traders (RT) to 'CRISIL B/Stable' from 'CRISIL B+/Stable'
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 80 CRISIL B/Stable (Downgraded
from 'CRISIL B+/Stable')
The rating downgrade reflects RT's weak business risk profile,
marked by slow ramp-up of its operations, which has adversely
impacted the firm's accruals and consequently its liquidity. For
the nine months through December 2014, the firm generated sales of
around INR228.6 million, lower than CRISIL's expectations.
However, CRISIL believes that the firm's cash accruals are likely
to remain sufficient to meet its maturing debt repayment
obligations on time.
The rating reflects RT's weak financial risk profile, marked by a
small net worth and below-average debt protection metrics. These
rating weaknesses are partially offset by the extensive
entrepreneurial experience of RT's promoters.
Outlook: Stable
CRISIL believes that RT will continue to benefit over the medium
term from the extensive experience of its promoters. The outlook
may be revised to 'Positive' if the firm reports significantly
high revenue and profitability margins while improving its capital
structure. Conversely, the outlook may be revised to 'Negative' in
case of a significant decline in the firm's revenue or
profitability, or if its capital structure deteriorates on account
of a stretch in its working capital cycle.
RT, established in 2011, is engaged in ginning and pressing of raw
cotton. The day-to-day operations of the firm are managed by Mr.
Kirti Kumar Patel and Mr. Harilal Patel. It has its manufacturing
unit at Nagpur (Maharashtra).
RT reported a profit after tax (PAT) of INR2 million on net sales
of INR432 million for 2013-14 (refers to financial year, April 1
to March 31), as against a PAT of INR1 million on net sales of
INR96 million for 2012-13.
SHARAYU MOTORS: CRISIL Reaffirms B- Rating on INR75MM Cash Loan
---------------------------------------------------------------
CRISIL's rating on the long-term bank facilities of Sharayu Motors
(Sap Holdings and Leasing Private Limited) (SM) reflects SM's
below average financial risk profile, marked by modest net worth,
high external indebtedness, subdued debt protection metrics, and
financial support extended to group entities. The rating is also
constrained by exposure to intense competition in the automobile
dealership business. These rating weaknesses are partially offset
by the extensive industry experience of SM's promoters and
established position in automobile dealership market in Navi
Mumbai.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 75 CRISIL B-/Stable (Reaffirmed)
Update
The rating reflects significant pressure on SM's financial risk
profile marked by weak capital structure and liquidity profile.
The revenues for 2013-14(refers to financial year, April 1 to
March 31) fell by 13 per cent to INR 1716.4 million as against INR
1968.3 million in 2012-13. The company's gearing as on March 31,
2014, remains high at 3.4 times (4.1 times as on March 31, 2013)
and total outside liabilities to total net worth ratio at 4.2
times (5.02 times as on March 31, 2013). The debt of INR 484.4
million in 2014 comprised term loans of INR 190.6 million and
working capital borrowings of INR 293.7 million. While CRISIL
expects SM's capital structure to moderately improve over the
medium term on the back of plough back of earnings, the gearing is
expected to remain aggressive and significantly higher than the
initial expectations.
The company's liquidity profile is stretched with high bank limit
utilisation and term debt repayments tightly matched with expected
cash accruals. SM's bank limits were utilized at an average of 87
per cent for the 12 months through December 2014, leaving limited
headroom to absorb any spikes in working capital requirements. The
company generated cash accruals of INR 20.8 million in 2013-14,
and is expected to generate cash accruals of INR 30-35 million in
2014-15 and 2015-16. The company has term debt obligations of INR
37.6 million to be serviced in 2014-15. The company's liquidity is
also constrained by the financial support extended by SM to its
group entities, which have increased from INR 218.4 million in
2012 to INR 261.9 million in 2014. The liquidity profile is
expected to remain stretched on account of large working capital
requirements and continued financial support to group entities.
Outlook: Stable
CRISIL believes that SM will continue to benefit over the medium
term from its extensive experience of the promoter and established
position in automobile dealership market in Navi Mumbai. The
outlook may be revised to 'Positive' if SM's capital structure
improves significantly, most likely due to equity infusion by
promoters, or due to significant increase in cash flows from
operations. Conversely, the outlook may be revised to 'Negative'
if SM's cash accruals decline significantly, or if the company
avails larger than expected debt, significantly impacting its debt
servicing ability.
SM, a division of SAP Holding & Leasing Pvt. Ltd, is a dealer of
Hyundai Motors India Ltd, located in Vashi (Navi Mumbai). SAP
Holding & Leasing Pvt. Ltd was incorporated in 1994. The company
is part of the Sharayu Group, promoted by Mr. Shrinivas Pawar, and
his wife, Mrs Sharmila Pawar.
SM reported a profit after tax (PAT) of INR10.7 million on net
sales of INR 1654.3 million for 2013-14(refers to financial year,
April 1 to March 31) as against PAT of 13.6 million on net sales
of INR 1903.7 million for 2012-13.
SHIVA SHAKTI: CARE Reaffirms B- Rating on INR243.35cr LT Loan
-------------------------------------------------------------
CARE reaffirms the ratings assigned to bank facilities of Shiva
Shakti Sugars Ltd.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 243.35 CARE B- Reaffirmed
Rating Rationale
The rating of Shivashakti Sugars Limited (SSL) continues to be
constraint by the weak financial risk profile as evidenced in
continuing losses owing to poor performance by the sugar division,
the stressed capital structure primarily owing to heavily debt-
funded project, its working capital-intensive nature of operation
and losses eroding the networth. The rating is also constrained by
the cyclical and regulated nature of the sugar industry, single
site concentration exposing it to high agro-climatic risk. The
rating draws comfort from the experienced promoter, its partially
integrated nature of operation and the company's presence in a
high recovery zone.
The ability of the company to improve its capital structure and
running the business profitably would be the key rating
sensitivities.
SSL was set up in 1995 by Dr Prabhakar B Kore (Member of
Parliament, Rajya Sabha, Karnataka Legislative Assembly). Dr
Kore is currently the chairman of KLE Society, Belgaum, which runs
over 220 educational institutions in Karnataka. SSL was issued
license for setting up a sugar manufacturing unit in 1995;
however, it was unable to launch the project till 2000 for
various reasons. Subsequently, SSL was acquired by KPR Sugar Mills
Pvt Ltd [rated 'CARE BBB+/A3+'] (part of the KPR group of
companies of Coimbatore [Tamil Nadu] in the early 2000. Even under
the new management, the project did not commence operations until
2008-09. The company was reacquired by Dr Kore in April 2010. The
company had then set up the sugar plant with an installed capacity
of 3,500 tonnes crushed per day (TCD) and bagasse-based co-
generation capacity of 15 MW at a cost of INR135 crore. The plant
commenced operation from November 2011. The company has further
enhanced its sugar capacity to 4,800 TCD in November 2014 and
cogen capacity to be expanded to 22 MW by
April 2015.
SILK WOVEN: CARE Assigns B+ Rating to INR6cr LT Bank Loan
---------------------------------------------------------
CARE assigns 'CARE B+' rating to the bank facilities of Silk Woven
Sack Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 6 CARE B+ Assigned
Rating Rationale
The rating assigned to the bank facilities of Silk Woven Sack
Private Limited (SWSPL) is constrained on account of
implementation and stabilisation risk associated with its
greenfield project, susceptibility of its margins to volatility in
raw material and foreign exchange prices along with its presence
in a fragmented and highly competitive packaging industry.
The rating, however, derives benefits from the experience of the
promoters and stable long-term prospects of flexible packaging
industry.
The ability of SWSPL to successfully complete its ongoing project
without any time and cost overrun and achieve the envisaged level
of sales and profitability are the key rating sensitivities.
Morbi-based SWSPL was promoted by five promoter directors, namely,
Mr Darshan P. Jivani, Mr Divyesh N. Rangani, Mr Jaymin K. Rangani,
Mr Jaysukhbhai D. Jivani and Mr Jiten D. Dhedhi in June 2014 as a
private limited company. SWSPL has currently undertaken a
greenfield project to manufacture polypropylene (PP) & high
density polyethylene (HDPE) bags with an installed capacity of
4,000 metric tonnes per annum (MTPA) at Morbi with a total cost of
INR7.78, which will be funded through a term loan of INR5 crore,
equity capital of INR2 crore and balance through unsecured loans.
The plant is expected to begin commercial production from May
2015. These bags will find application as packaging material in
cement, fertilizer and agri-product industries.
SIYARAM IMPEX: CRISIL Assigns B Rating to INR80MM Cash Credit
-------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable' rating to the long-term
bank facilities of Siyaram Impex Private Limited (SIPL). The
rating reflects SIPL's modest scale of operations, large working
capital requirements and below average financial risks profile.
These rating weaknesses are partially offset by the extensive
industry experience of the company's promoters.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 80 CRISIL B/Stable
Proposed Long Term 9.1 CRISIL B/Stable
Bank Loan Facility
Outlook: Stable
CRISIL expects SIPL to continue to benefit from promoters' long
standing experience in the industry. The outlook may be revised to
'Positive' in case of significant rise in its revenues and/or
improvement in working capital management thereby improving
financial risk profile substantially. Conversely, the outlook may
be revised to 'Negative' in case of significant decline in its
profitability and/or debt-funded capex programme, which would
weaken its capital structure and liquidity.
Siyaram Impex Pvt Ltd (SIPL), incorporated in 2008, is promoted by
Mr. Ram Gopal Maheswari. SIPL is based in Jamnagar, Gujarat and is
engaged in manufacturing copper alloy ingots (brass ingots) and
copper alloy billets (brass billets).
SONIA FISHERIES: CRISIL Assigns B Rating to INR15.2MM Term Loan
---------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable/CRISIL A4' ratings to the
bank facilities of Sonia Fisheries (SF).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 1.5 CRISIL A4
Cash Credit 15 CRISIL B/Stable
Foreign Bill
Discounting 45 CRISIL A4
Packing Credit 140 CRISIL A4
Proposed Long Term
Bank Loan Facility 13.3 CRISIL B/Stable
Term Loan 15.2 CRISIL B/Stable
The ratings reflect SF's moderate scale of operations in a
fragmented industry, susceptibility to volatility in raw material
prices and foreign exchange (forex) movements and below average
financial risk profile marked by high gearing and modest net
worth. These rating weaknesses are partially offset by the
benefits that SF derives from its promoters' extensive experience
in the sea food processing industry.
Outlook: Stable
CRISIL believes that SF will continue to benefit over the medium
term from its promoters' extensive industry experience. The
outlook may be revised to 'Positive' in case SF's financial risk
profile improves driven by higher than expected cash accruals,
efficient working capital management or capital infusion by the
partners. Conversely, the outlook may be revised to 'Negative' if
SF's financial risk profile and liquidity deteriorates due to
lower cash accruals, higher than expected working capital
requirements, or larger-than-expected debt funded capital
expenditure.
Established in 1977 as a partnership firm, Sonia Fisheries (SF) is
engaged in exporting and processing of fish and manufacturing of
fish meal and fish oil. The firm is based in Mumbai and currently
managed by the Patil family.
Until 2013-14, SF only undertook processing of fish for while its
group companies namely Sonia Foods (Sonia) was engaged in the
exports of fish and Omega Fish meal and Oil Company Pvt Ltd
(Omega) was engaged in the manufacturing of fish meal and fish
oil. However in 2014-15, Sonia Foods was merged into SF and the
Mumbai unit (capacity of 100 tonnes per day) of Omega was
transferred into SF.
For 2013-14 (refers to financial year, April 1 to March 31) SF
reported a profit after tax (PAT) of INR3.7 million on net sales
of INR218.8 million, against INR6.4 million PAT of INR3.8 million
on net sales of INR 258.8 million for 2012-13.
SWIZZER CERAMIC: CRISIL Assigns B+ Rating to INR215MM LT Loan
-------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to
the long-term bank facilities of Swizzer Ceramic Pvt Ltd (SCPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 40 CRISIL A4
Cash Credit 60 CRISIL B+/Stable
Long Term Loan 215 CRISIL B+/Stable
The ratings reflect SCPL's exposure to its ongoing project, modest
scale of operations in the highly competitive ceramics industry,
and its working-capital-intensive operations. These rating
weaknesses are partially offset by the extensive experience of the
company's promoters in the ceramics industry and proximity of its
manufacturing facilities to raw material and labour resources.
Outlook: Stable
CRISIL believes that SCPL will benefit over the medium term from
its promoters' industry experience. The outlook may be revised to
'Positive' if the company stabilises its operations earlier than
expected, leading to healthy accruals and improvement in its
financial risk profile. Conversely, the outlook may be revised to
'Negative' if the firm's operating margin is significantly lower
than expected, or if it undertakes a substantial debt-funded
capital expenditure programme, or its working capital management
deteriorates, resulting in significant weakening in its financial
risk profile.
Established in 2014, SCPL was set up by Mr. Umang Dineshbhai
Gohel, Mr. Rajendra Dhanjibhai Zulasana, Mr. Manishbhai Prabhubhai
Bhalodiya, Mr. Suresh Durlabhjibhai Bhalodiya, and Mr. Piyush
Dharamshibhai Patel. The company is setting up plant to
manufacture glazed vitrified tiles of various sizes at its
production facilities in Morbi (Gujarat). SCPL's commercial
operations are estimated to commence from July 2015.
TFS CORPORATION: Moody's Affirms B3 CFR; Outlook Stable
-------------------------------------------------------
Moody's Investors Service has affirmed TFS Corporation Ltd's B3
corporate family rating and B3 senior secured rating. The outlook
is stable.
RATINGS RATIONALE
"The B3 rating reflects the inherent volatility in the company's
business model of relying on investments in its Indian Sandalwood
plantations, exposing the company to volatility in earnings and
cashflow generation," says Saranga Ranasinghe, a Moody's analyst.
The rating also reflects the uncertainty around the company's
ability to continue to execute its strategy of increasing sales of
its wholesale investment products and sales to retail investors,
the potential for regulatory challenges significantly reducing or
eliminating demand for the company's MIS investment products and
seasonality of cash flow.
"We expect TFS' operating performance to improve as it harvests
Indian Sandalwood plantations and the proportion of revenue
generated from the sale of Indian Sandalwood oil increases in the
next 18-24 months" adds Ranasinghe.
The company carried out its first harvest in June 2014 and plans
its second harvest for 2015.
TFS benefits from the contracts in place for the sale of
pharmaceutical grade oil and a European fine fragrance company for
the sale of oil from FY15.
TFS has a moderate financial leverage, which positions it well to
manage any unforeseen events that are beyond its control. Moody's
expects the ratio of Adjusted Debt/EBITDA to be in the 3.5x-4.0x
range in fiscal year ending June 30, 2015.
A change in outlook and/or upgrade is likely if TFS is able to
increase earnings from oil sales to represent at least 20% of cash
revenue. Moody's considers the revenue from the sale of
Sandalwood oil to be less volatile than the revenue from
plantation sales to both retail and wholesale investors.
TFS' rating also considers the company's large plantation holdings
that have begun maturing since 2013, strong demand for authentic
and legally harvested Indian Sandalwood oil and heartwood, the
high value of the company's Indian Sandalwood plantation assets
and production of oil and other byproducts, and the company's
vertically integrated operations. The company also plans to
increase its exposure to directly owned plantation assets, which,
supported by the strong demand for Indian Sandalwood, should
provide some stability to revenue and earnings generation.
TFS' rating could be downgraded if the company is unable to
execute its strategy to continue to grow its BC product sales, if
there are adverse tax rulings affecting its MIS business or if
yields and sales from its initial harvests fall below
expectations. Any of the above could reduce expected cash flow
generation and ongoing demand for its investment products such
that credit metrics fall outside of the range expected for the
rating.
Credit metrics that Moody's would look for on a continuing basis
to maintain the current rating include, FFO-to-Interest remaining
above 1.5x and FFO-to-Debt above 10%.
Downward pressure could also emerge if TFS does not maintain
adequate liquidity on the balance sheet to mitigate the highly
seasonal cash flows.
The principal methodology used in this rating was Global Paper and
Forest Products Industry published in October 2013.
TFS Corporation Limited (TFS) is one of the world's largest
vertically integrated manager and grower of Indian Sandalwood
plantations, with over 9,000 hectares of sandalwood trees under
management.
UNECHA ASSOCIATES: CRISIL Cuts Rating on INR87.5MM Loan to D
-------------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facilities
of Unecha Associates (UA) to 'CRISIL D' from 'CRISIL B/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Long Term Loan 87.5 CRISIL D (Downgraded from
'CRISIL B/Stable')
Proposed Long Term 62.5 CRISIL D (Downgraded from
Bank Loan Facility 'CRISIL B/Stable')
The downgrade in rating reflects instances of delay by UA in
servicing its term debt obligations; the delays have been caused
by its weak liquidity. The deterioration in the firm's liquidity
is due to low bookings and modest customer advances.
UA is also susceptible to project implementation risks and to
cyclicality in the real estate industry in India. However, the
firm benefits from the extensive industry experience of its
promoter.
UA was established in 1993 as a proprietorship concern by Mr.
Jagdish Unecha. The firm has been in real estate development in
Pune for over two decades, having developed over 0.30 million
square feet (sq ft) of real estate across 35 projects. The firm
has three ongoing projects in Pune with a total construction area
of about 0.13 million sq ft.
VIDHI MINERALS: CRISIL Cuts Rating on INR25MM Cash Loan to B
------------------------------------------------------------
CRISIL has downgraded its ratings on the bank facilities of
Vidhi Minerals and Alloys Pvt Ltd (VMAPL) to 'CRISIL
B/Stable/CRISIL A4' from 'CRISIL BB-/Stable/CRISIL A4+'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 5 CRISIL A4 (Downgraded
from 'CRISIL A4+')
Cash Credit 25 CRISIL B/Stable (Downgraded
from 'CRISIL BB-/Stable')
Letter of Credit 15 CRISIL A4 (Downgraded from
'CRISIL A4+')
Packing Credit 45 CRISIL A4 (Downgraded from
'CRISIL A4+')
The downgrade reflects the deterioration in VMAPL's financial risk
profile, and CRISIL's expectation that it will remain constrained
in the near-medium term. Following debtor write-offs, which led to
operating losses in 2013-14 (refers to financial year, April 1 to
March 31), the company's liquidity is expected to remain
constrained in the near-term. Its working capital requirements are
expected to remain sizeable, impacted primarily by the sharp
increase in debtors due for over six months. Further, CRISIL also
notes that advances to other companies in the group will also
impact VMAPL's liquidity over the medium term, and any sharp
increase in these balances will remain key rating sensitivity
factors.
The company's capital structure is expected to deteriorate, with
the company's accruals expected to be under pressure. Its reliance
on external debt for funding its working capital requirements is
expected to lead to total outside liabilities to tangible net
worth (TOLTNW) of about 2.6-3 times in the next 2 years, compared
to 1.2 times as on March 31, 2011. Furthermore, subdued
profitability, along with increasing debt levels, are expected to
impact interest coverage ratio, which is estimated at below 1.2
time for 2014-15.
CRISIL's ratings continue to reflect its promoters' extensive
industry experience. This rating strength is partially offset by
the company's below-average financial risk profile, its moderate
scale of operations and exposure to volatility in prices of
manganese alloys.
Outlook: Stable
CRISIL believes that VMAPL will continue to benefit over the
medium term from its promoters' extensive industry experience. The
outlook may be revised to 'Positive' if the company successfully
scales up its operations while it sustains its profitability and
capital structure. Conversely, the outlook may be revised to
'Negative' in case of weakening in VMAPL's operating margin
resulting in further deterioration in debt protection metrics.
VMAPL is a part of the larger Shyamji group, which is promoted by
Mr. Ajay Khandelwal and Mr. Vijay Khandelwal. The company was
incorporated in 2005 in Nagpur (Maharashtra). VMAPL trades in
commodities, such as manganese ore, silico manganese, ferro silico
manganese, and ferro manganese.
=================
I N D O N E S I A
=================
DUTA ANGGADA: Moody's Withdraws (P)B1 Corporate Family Rating
-------------------------------------------------------------
Moody's Investors Service has withdrawn the provisional (P)B1
corporate family rating of PT Duta Anggada Realty Tbk and the
provisional (P)B1 rating of the company's proposed USD-denominated
senior unsecured bond, to be issued by Primary Assets Pte. Ltd.
The corporate family rating assigned on Nov. 5, 2014 was
provisional, pending completion of the proposed bonds which were
never issued.
Moody's has withdrawn the rating for its own business reasons.
=========
J A P A N
=========
TAKATA CORP: Facing Three Class Action Suits in Canada
------------------------------------------------------
The Japan Times reports that Canadian drivers have launched three
class action lawsuits against Takata over defective air bags
linked to at least five fatalities worldwide, lawyers confirmed on
March 27.
Merchant Law Group LLP lead partner Tony Merchant said the
plaintiffs are seeking a total of 2.4 billion ($1.9 billion)
Canadian dollars for personal injuries, car repairs and an
expected devaluation of vehicles included in a massive global
safety recall, the report says.
In addition to Merchant, two other Canadian law firms have
launched suits, and a fourth is considering doing so, The Japan
Times relates.
If they are certified by a judge, they would likely be lumped into
a single class action lawsuit in the coming months, according to
the report.
The report notes that about 20 million vehicles produced by some
of the world's biggest automakers are being recalled due to the
risk that their Takata-made air bags could deploy with excessive
explosive power, spraying potentially fatal shrapnel into the
vehicle.
The problem has been linked to at least five deaths globally, with
a sixth under investigation, the report states.
"They're making products that are like grenades going off," the
report quotes Mr. Merchant as saying. "These things are supposed
to bring safety and instead they're a danger."
The Japan Times notes that the Canadian litigation involves
400,000 vehicles equipped with Takata air bags.
Potentially affected automakers include Acura, BMW, Chrysler,
Dodge/Ram, Ford, Honda, Infiniti, Lexus, Mazda, Mitsubishi,
Nissan, Pontiac, Subaru and Toyota, the report adds.
As reported in the Troubled Company Reporter-Asia Pacific on
Nov. 24, 2014, 24/7 Wall St. said Takata Corporation faces huge
fines, and almost certainly lawsuits (which have already begun),
over its defective airbags. The report related that some experts
believe that the Japanese company was not forthcoming about the
technical failure that caused several serious accidents and
deaths. If Takata goes bankrupt, which could certainly happen,
claims against the company would be in limbo, 24/7 Wall St. said.
According to the report, Takata's revenue in the first half of its
fiscal 2015 was just above $2.5 billion. It would barely make the
Fortune 500, said 24/7 Wall St. Due to its modest size, hundreds
of millions of dollars in repairs and recalls and billions of
dollars in liabilities for drivers harmed by its airbags could
easily render it insolvent, according to
24/7 Wall St.
Takata Corporation (TYO:7312) develops, manufactures and sells
safety products for automobiles. The Company offers seatbelts,
airbags, steering wheels, child seats and trim parts. The Company
has subsidiaries located in Japan, the United States, Brazil,
Germany, Thailand, Philippines, Romania, Singapore, Korea, China
and other countries.
===============
M O N G O L I A
===============
MONGOLIAN MINING: Moody's Says Credit Profile Weakened in 2014
--------------------------------------------------------------
Moody's Investors Service said that flat coking coal prices,
continued debt servicing and higher operating costs weakened
Mongolian Mining Corporation's (MMC, Caa2 negative) credit profile
in 2014, and will continue to exert pressure in 2015.
"Both MMC's revenue and sales volumes declined in 2014, as the
average selling price of hard coking fell and the company lowered
production. In addition, the company's cost base has increased as
it gradually takes on coal delivery to end-customers in inland
China," says Dylan Yeo, a Moody's Analyst.
"Despite its higher cash balance, MMC could deplete cash-on-hand
by end-2015 due to a higher rate of cash burn. The rights issue
last year and divestments of most of its non-core assets also left
it with limited alternative sources of liquidity," adds Yeo.
Yeo was speaking on the release of a new Moody's report on MMC,
titled "Challenging Market Conditions Weakened Credit Profile in
2014."
MMC recorded an adjusted EBITDA loss of $46 million in 2014, as
its EBIT margin dropped sharply to -29% from 6% in 2013. Revenue
also declined by 25% to $328 million, as the average selling price
of hard coking coal fell 9%, in line with the industry trend.
The reduced production and lower total costs in turn weighed on
the company's margin, due to higher idling costs and because its
spreading of fixed costs across lower production volumes increased
its unit production cash costs. In addition, MMC incurred higher
transportation costs for its coal delivery to end-customers in
inland China.
Further, although MMC's cash balance rose to $253 million in 2014
from $77 million in 2013, Moody's expects the company will deplete
its cash balance in the next 12 months. In addition to expected
negative operating cash flow of $35-$45 million and maintenance
capex of $5-$10 million, the company faces considerable debt
servicing requirements, including $115 million of short-term debt
and $70-80 million of interest expense.
Moody's further says that the credit impact of the Tavan Tolgoi
coalfield project -- if it goes ahead -- remains uncertain.
Although the consortium of MMC, China Shenhua Energy Co., Ltd.
(Aa3 stable) and Sumitomo Corporation (A2 negative) is in formal
negotiation with the Government of Mongolia (B2 negative) to
obtain mining concession rights for the project, there is little
clarity on the timing, costs, ownership and other key terms.
====================
N E W Z E A L A N D
====================
MAINZEAL PROPERTY: Liquidator to File Court Action
--------------------------------------------------
Catherine Harris at Stuff.co.nz reports that the liquidator of
Mainzeal Property and Construction plans to take court action on
behalf of the company and its creditors, thanks to the backing of
a litigation funder.
BDO is handling the liquidation of Mainzeal Property and
Construction and a number of associated companies, including King
Facade or KFL, Stuff.co.nz says.
Stuff.co.nz relates that in a new liquidator's report, BDO said it
believed there were a number of claims it could make under the
Companies Act relating to "the manner in which the business of the
companies and KFL has been conducted".
Mainzeal collapsed in February 2013, owing unsecured creditors an
estimated NZ$138 million. That amount has grown to NZ$151.3
million for KFL and the various Mainzeal companies BDO represents.
Mainzeal was owned by Richina Global Real Estate, whose sole
director is Auckland businessman Richard Yan. Its other directors,
including former prime minister Jenny Shipley, resigned shortly
before the collapse.
According to Stuff.co.nz, Andrew Bethell, the lead liquidator in
the Mainzeal case, is overseas but in the report said that
"proceedings will be issued shortly".
He did not say who the action would be taken against or what the
claims would be, Stuff.co.nz notes.
Stuff.co.nz adds that the BDO report also said that it was
assessing each of the 38 building contracts left uncompleted, and
any amounts recovered were expected to be "significantly lower
than the book value".
About Mainzeal Property
Mainzeal Property and Construction Ltd is a New Zealand-based
property and construction company. The company forms part of the
Mainzeal Group, which is owned by Richina Inc, a privately held
New Zealand-based company with a strong China focus.
On Feb. 6, 2013, Colin McCloy and David Bridgman, partners from
PricewaterhouseCoopers, were appointed receivers to Mainzeal
Property and Construction Limited and associated entities as a
result of a request made by its director to BNZ.
Mainzeal's director, Richard Yan advised that following a series
of events that had adversely affected the Company's financial
position coupled with a general decline in major commercial
construction activity, and in the absence of further shareholder
support, the Company could no longer continue trading.
On Feb. 28, 2013, BDO's Andrew Bethell and Brian Mayo-Smith were
appointed liquidators to those three companies in receivership and
nine others in the group that were not in receivership.
The companies now under the control of the liquidators are
Mainzeal Group, Mainzeal Property and Construction, Mainzeal
Living, 200 Vic, Building Futures Group Holding, Building Futures
Group, Mainzeal Residential, Mainzeal Construction, Mainzeal,
Mainzeal Construction SI, MPC NZ and RGRE.
Mainzeal is estimated to owe NZ$11.3 million to the BNZ,
NZ$70 million to unsecured creditors and NZ$5.2 million to
employees, NZN discloses. Subcontractors are among the unsecured
creditors, said NZN.
===============
P A K I S T A N
===============
NATIONAL BANK OF PAKISTAN: Moody's Cuts Deposit Ratings to Caa1
---------------------------------------------------------------
Moody's Investors Services downgraded to Caa1 from B3 the local-
currency deposit ratings of the five Moody's-rated Pakistani banks
and assigned positive outlooks to these ratings. The affected
banks are Allied Bank Limited, Habib Bank Ltd., MCB Bank Limited,
National Bank of Pakistan and United Bank Ltd.
The downgrades conclude the review initiated on 17 March 2015
following the publication of Moody's new bank methodology.
The following ratings of all five banks were not affected by this
action: the banks' caa1 baseline credit assessments, their Caa2
long-term foreign currency deposit ratings and their short-term
Not Prime ratings.
Please refer to the end of this press release for a list of all
ratings.
RATINGS RATIONALE
Downgrades driven by change in methodology
The downgrades of the banks' local currency deposit ratings to
Caa1, aligning them with the rating assigned to the government of
Pakistan, reflect Moody's revised approach in determining the
capacity of a government to support banks under the new bank
rating methodology.
Previously, when imputing systemic support assumptions in bank
ratings, deposit and senior unsecured debt ratings were, in
certain cases, positioned above their relevant sovereign rating.
This reflected an expectation that the extensive policy tools
available to central banks to support domestic banks, such as the
provision of liquidity or regulatory forbearance, could result in
a capacity for the sovereign to provide support to its country's
banks that is higher than its own creditworthiness.
However, insights gained from historical experiences showed that
when a crisis is prolonged, these measures remain insufficient to
restore confidence to the system and an outright recapitalisation
of the banks is necessary.
Consequently, Moody's new methodology relies solely on a bank's
home government's long-term local-currency rating as the anchor
for determining the capacity of the government to provide support
and, at the same time, as the upmost point that a bank's supported
rating can reach from systemic support assumptions.
Accordingly, in this case, the five banks' deposit ratings have
now been aligned with Pakistan's Caa1 rating.
Positive outlooks follow sovereign rating action
The positive outlook on the banks' ratings is driven by Moody's
recent revision of the outlook to positive from stable on
Pakistan's Caa1 government bond rating and reflects the
government's improving capacity to provide support to the banks.
What could change the ratings up/down
Upward pressure could be exerted on the banks' ratings as a result
of improvement in the operating environment and in the credit risk
profile of the sovereign.
The banks' ratings could come under pressure if there is a
significant increase in credit losses that will weaken their
capital. A weakening in the government's creditworthiness would
also have negative rating implications, although this is unlikely
given the positive outlook on the sovereign rating.
List of bank ratings:
Allied Bank Limited
-- Local currency deposit ratings: downgraded to Caa1 from B3,
positive outlook
-- Foreign currency deposit ratings: unchanged at Caa2
-- Baseline credit assessment (BCA): unchanged at caa1
-- Short term ratings: unchanged at Not Prime
MCB Bank Limited
-- Local currency deposit ratings: downgraded to Caa1 from B3,
positive outlook
-- Foreign currency deposit ratings: unchanged at Caa2
-- Baseline credit assessment (BCA): unchanged at caa1
-- Short term ratings: unchanged at Not Prime
Habib Bank Ltd.
-- Local currency deposit ratings: downgraded to Caa1 from B3,
positive outlook
-- Foreign currency deposit ratings: unchanged at Caa2
-- Baseline credit assessment (BCA): unchanged at caa1
Short term ratings: unchanged at Not Prime
National Bank of Pakistan
-- Local currency deposit ratings: downgraded to Caa1 from B3,
positive outlook
-- Foreign currency deposit ratings: unchanged at Caa2
-- Baseline credit assessment (BCA): unchanged at caa1
-- Short term ratings: unchanged at Not Prime
United Bank Ltd.
-- Local currency deposit ratings: downgraded to Caa1 from B3,
positive outlook
-- Foreign currency deposit ratings: unchanged at Caa2
-- Baseline credit assessment (BCA): unchanged at caa1
-- Short term ratings: unchanged at Not Prime
PAKISTAN MOBILE: Moody's Revises Outlook on B2 CFR to Positive
--------------------------------------------------------------
Moody's Investors Service has revised to positive from stable its
outlook on the B2 corporate family rating of Pakistan Mobile
Communications Limited (Mobilink).
At the same time, Moody's has also affirmed Mobilink's B2
corporate family rating.
RATINGS RATIONALE
The rating action reflects the outlook change for Pakistan's Caa1
sovereign rating and Mobilink's stronger fundamental credit
quality when compared to the sovereign.
On March 25, Moody's affirmed Pakistan's Caa1 foreign currency
government bond rating and Caa1 issuer and senior unsecured
ratings. Moody's also revised the outlook on Pakistan's sovereign
ratings to positive from stable.
"Despite its stronger fundamental credit quality, Mobilink's B2
corporate family rating is constrained by the two-notch
differential between its own rating and the sovereign's Caa1
rating," says Gloria Tsuen, a Moody's Vice President and Senior
Analyst.
"The rating outlook has also been changed to positive, in line
with that of Pakistan's sovereign ratings," adds Tsuen.
As Mobilink is predominantly a domestic entity, with substantially
all of its revenues derived from, and assets based in, Pakistan,
Moody's believes that the company's fundamental creditworthiness
needs to closely reflect the potential risks that it shares with
the sovereign.
Thus, non-financial corporates are not usually rated more than two
notches above the sovereign (see Credit Policy paper entitled "How
Sovereign Credit Quality May Affect Other Ratings" and published
on 16 March 2015).
"We continue to take into account Mobilink's strong fundamental
credit quality by keeping its B2 corporate family rating two
notches above the sovereign rating. We expect it to maintain its
leading market position in the mobile market in Pakistan and
preserve strong financial metrics for its rating level," says
Tsuen.
Moody's expects Mobilink to maintain the largest market share by
the number of subscribers and keep its market share of 27%-28%
this year, given its strong brand and extensive network coverage.
Its holding of the largest 3G spectrum in Pakistan will also help
it maintain good network quality in 3G services. The company
launched its commercial 3G services last July.
Despite a difficult 2014 with intense competitive pressure and
regulatory changes such as the government's implementation of a
biometric verification system for all mobile subscriptions,
Mobilink has maintained a strong financial profile for its B2
rating level.
Mobilink's adjusted debt/EBTIDA rose closer to 2.0x in FY2014,
from 1.1x in FY2013, due to the 3G spectrum payment of $300.9
million and $350 million in capex. However, leverage remains very
strong for the rating level.
Mobilink also maintains adequate liquidity with a cash balance of
$35 million and undrawn committed lines totaling $171 million as
of September 2014. Moody's expects the company's operating cash
flows to total around $285 million in the next 12 months. These
funds will be sufficient to cover its short-term debt of about $70
million and its total estimated capital expenditure of around $300
million.
While Mobilink's rating does not include any uplift, its
fundamental credit profile continues to incorporate ongoing
operational and financial support from its indirect parents,
Global Telecom Holdings SAE (unrated), and its ultimate
shareholder, VimpelCom Ltd (Ba3 ratings under review for
downgrade); both of which are globally diversified and larger
telecommunications groups.
Given Moody's guidelines regarding the differential between
government and corporate ratings, it is unlikely that Mobilink
will experience any upward rating pressure in the absence of an
upgrade of Pakistan's sovereign rating.
Alternatively, Mobilink would need to generate a substantially
greater revenue share from outside Pakistan, which seems unlikely
over the near to medium term.
However, an upgrade is possible in the medium to long term if, in
addition to a sovereign upgrade, Mobilink maintains its (1) strong
market position with adjusted EBITDA margin in excess of 35%; (2)
current solid balance sheet and financial profile; (3) strong
relationships with its parents and banks; and (4) sufficient
cushion under its bank loan covenants.
Mobilink's ratings would be under downward pressure if the
sovereign rating is downgraded, as Moody's will seek to maintain
the current gap of two notches between their ratings.
Given Mobilink's fundamental credit quality, it is unlikely its
rating will be downgraded for reasons other than a downward
sovereign rating action absent a precipitous decline in its
financial and operating profile.
Such a decline would be evident if Mobilink: (1) experiences
significant deterioration in its market share; (2) resumes paying
dividends or increases management fees to its parent, thereby
reducing the available retained cash flow to the extent that
adjusted retained cash flow/debt falls below 20%; (3) faces
difficulty in accessing capital to fund ongoing growth, or
repay/refinance lines, as and when they fall due; or (4) sees
signs of Global Telecom or VimpelCom not providing financial
assistance, should there be any breach of covenants.
The principal methodology used in this rating was Global
Telecommunications Industry published in December 2010.
Mobilink is the largest mobile operator in Pakistan by number of
subscribers.
=================
S I N G A P O R E
=================
IBC CAPITAL: Moody's Affirms B2 CFR, Outlook Stable
---------------------------------------------------
Moody's Investors Service affirmed the B2 corporate family rating
of IBC Capital Limited (Goodpack), the B2 rating on its $550
million first lien term loan due 2021 and the B3 rating on its
$170 million second lien term loan due 2022. The rating outlook is
stable.
IBC Capital Limited, who acquired Goodpack Limited in September
2014 for $1.1 billion, is an indirect wholly owned subsidiary of a
fund affiliated and advised by Kohlberg Kravis Roberts & Co L.P.
(KKR).
"Goodpack's B2 CFR reflects its high leverage and the aggressive
financial polices implemented following KKR's 2014 leveraged
buyout balanced against its leading position in the niche and
growing logistics market for natural rubber and synthetic rubber,
its high margins and its solid cash generation," says Brian
Grieser, a Moody's Vice President and Senior Analyst.
The rating further reflects Moody's expectation that Goodpack will
continue to demonstrate consistent growth trends across its key
natural rubber and synthetic rubber and food and beverage
verticals as well as its nascent automotive parts business through
both existing customer penetration and new customer wins. Goodpack
is expected to largely fund its growth through internal cash flows
and is expected to maintain strong EBITDA margins and solid
liquidity. These factors are balanced against its relatively small
scale and moderate customer and supplier concentration.
"While initial post LBO performance lags expectations due to
headwinds in the natural rubber and synthetic rubber sector and a
couple of contract losses, the business continues to grow and
generate strong margins. We believe that long term growth
prospects remain intact and that earnings growth will gradually
result in lower first and second lien leverage, which is high at
almost 7.0x" added Grieser who is the lead analyst for Goodpack.
Following its acquisition of Goodpack, KKR issued a deeply
subordinated instrument that leverages its equity interest in
Goodpack. While Moody's views this instrument as debt-like,
according to its Hybrid Equity Credit methodology, the instrument
does not have any impact on Goodpack's CFR or instrument ratings
since the ratings do not anticipate any cash dividend payments
from Goodpack.
The stable outlook continues to incorporate our expectation for
first and second lien leverage to decline below 6.0x in the next
12-18 months from a combination of debt amortization payments and
EBITDA growth. We also expect Goodpack to maintain its EBITDA
margins at or around 50% while growing its customer base over the
next 12-18 months.
The ratings may come under pressure if Goodpack raises debt to
fund any acquisitions or to fund a shareholders distribution,
leverage through the second lien remains above 6.0x for an
extended period, or if it were to lose one or more of its top
customers. Any indication that Goodpack or KKR intends to
distribute cash, either to service subordinated instrument or for
dividends, would lead to a downgrade.
Ratings are unlikely to be upgraded in the next 12-18 months given
Goodpack's relatively small scale and high leverage. Rating
momentum would evolve if Goodpack demonstrates a commitment to
reduce its financial leverage such that it remains in the 4.0-4.5x
range and EBIT/interest exceeds 3.0x over a sustainable period
while maintaining its revenue and EBITDA growth rates and good
liquidity profile.
The principal methodology used in this rating was Business and
Consumer Service Industry published in December 2014.
Goodpack, headquartered in Singapore, owns a fleet of 3.5 million
IBCs used for the packaging, transportation and storage of cargo,
primarily natural rubber and synthetic rubber.
MMI INTERNATIONAL: Fitch Puts 'BB-' Rating on Negative Watch
------------------------------------------------------------
Fitch Ratings has placed the 'BB-' ratings on MMI International
Ltd. (MMI) and its parent Precision Capital Private Limited (PCPL)
on Rating Watch Negative.
The Negative Watch reflects MMI's adoption of a more aggressive
financial policy, which is likely to weaken its already stretched
credit profile. The new capital structure includes a five-year
USD520m syndicated bank loan and a USD60m revolving facility. MMI
expects to fully redeem its existing USD384m debt on 27 March 2105
via the syndicated bank loan.
The Rating Watch will be resolved when there is further
information on the company's capital structure and deleveraging
strategy; we expect this before the end of April 2015.
KEY RATING DRIVERS
Higher Leverage: The rating action and the likely downgrade of the
ratings reflect our expectation that the company may breach
thresholds at which negative rating action would be considered for
certain metrics. Our guidelines stand at 3.0x for funds flow from
operations (FFO) interest coverage and 4.0x for FFO-adjusted
leverage. Fitch expects MMI's more aggressive capital structure to
result in free cash flow deficits in the near term.
Slow Deleveraging: Fitch believes the deleveraging process will be
slow in the absence of a sustainable material expansion in EBITDA.
Assuming annual EBITDA of USD125m-130m in the next three years
(FY14 ended 30 June 2014: USD118m), we expect gross leverage
ratios to stay above 4.0x. Although MMI reported a stronger 2QFY15
on market share gains and new market penetration, we believe
recovery in the global hard disk drive (HDD) shipments will remain
gradual.
Seagate Dependence: MMI continues to face high customer
concentration risk due to its heavy reliance on Seagate Technology
Public Limited Company (BBB-/Stable), which contributes around 80%
of its revenue. However, we believe the high interdependence
between MMI and Seagate, with MMI being Seagate's largest supplier
for three key HDD components, mitigates this risk. MMI's ratings
factor in moderate-to-high barriers to entry into the HDD
component manufacturing industry.
Risk From SSDs: Solid state drives (SSDs) represent a significant
long-term threat to MMI's business if they become the standard
medium for data storage. However, in the medium term, we expect
that HDD sales volumes to be protected by the growth in the
overall data storage market and a continuing substantial per-
gigabyte price differential between SSDs and HDDs.
KEY ASSSUMPTIONS
Fitch's key assumptions within its rating case for the issuer
include:
-- Drawdown of USD520m to repay existing borrowings;
-- Low-to-mid single digit growth in revenue;
-- EBITDA margins of around 17% (FY14: 17%).
RATING SENSITIVITIES
Future developments that may individually or collectively lead to
a negative rating action include:
-- FFO-adjusted leverage of above 4.0x (FY14: 3.8x) on a
sustained basis
-- FFO interest coverage below 3.0x (FY14: 2.6x) on a
sustained basis
-- Demand for HDDs falling below expectations due to weaker
global IT spending, a significant fall in cost per gigabyte
differential between SSDs and HDDs, or if Seagate moves its
production capacity towards SSDs
Positive rating actions are not expected in the medium term.
FULL LIST OF RATING ACTIONS
MMI International Limited
Long-Term Foreign-Currency IDR at 'BB-'; on Rating Watch Negative
Senior secured debt class rating at 'BB-'; on Rating Watch
Negative
8% senior secured USD300m notes due 2017 at 'BB-'; on Rating Watch
Negative
USD180m secured bank loan affirmed at 'BB-'; on Rating Watch
Negative
Precision Capital Private Limited
Long-Term Foreign-Currency IDR at 'BB-'; on Rating Watch Negative
====================
S O U T H K O R E A
====================
DONGKUK STEEL: Prosecutors Raid Office Over Alleged Embezzlement
----------------------------------------------------------------
Yonhap News reports that prosecutors raided the office of Dongkuk
Steel Mill Co. on March 28 to look into alleged embezzlement and
tax evasion, authorities said.
According to the report, Seoul Central District Prosecutors'
Office said Dongkuk Steel is suspected of stashing about
KRW10 billion (US$90.3 million) in illegal funds in U.S. accounts
while in the process of purchasing raw materials and avoiding
paying taxes.
Investigators raided Dongkuk Steel's headquarters in central Seoul
in the latest probe into local companies, including top steelmaker
POSCO and other firms involved in overseas resource development
projects pushed by the former Lee Myung-bak administration, notes
the report.
Dongkuk Steel Mill Co., Ltd (KRX:001230) is a Korea-based company
principally engaged in the manufacture of steel products. The
Company operates in four business divisions: steel,
transportation, trading and other.
KEANGNAM ENTERPRISES: Files for Court Receivership
--------------------------------------------------
Yonhap News reports that Keangnam Enterprises, currently under a
debt workout program, filed for court receivership on March 27,
after its creditors rejected the company's request for additional
financial support.
The Seoul Central District Court said it has received the
builder's application for the court debt-workout program, the
report relates.
Earlier in the day [March 27], creditor banks of the cash-stripped
builder turned down its petition for an additional
KRW110 billion (US$99.2 million) in operating funds, according to
Yonhap. The creditors, led by policy lender Export-Import Bank of
Korea, had previously poured in KRW2.2 trillion for its rescue,
the report notes.
Yonhap says Keangnam Enterprises, which has been put in a state of
impaired capital, was also denied its request to swap
KRW90.3 billion worth of convertible bonds for new shares.
Stock trading of the company's shares has been suspended as of
March 11, Yonhap reports.
According to Yonhap, Keangnam Enterprises is under prosecution
investigation on suspicion of embezzlement. Its office was raided
earlier this month, and the probe is believed to be linked to
scrutinization of "energy diplomacy" by the previous Lee Myung-bak
government. During his years in office, companies launched
expansive business projects to secure energy resources, the report
relays.
Yonhap says the builder faces allegations that it embezzled money
from a state-led Russian oil exploration project that was
suspended in 2010 after disappointing results.
Out of the KRW35 billion it received for the overseas resources
project, Keangnam Enterprises allegedly misappropriated
KRW10 billion, Yonhap states.
Yonhap notes that the builder had been struggling in the red in
recent years amid a prolonged slump in the local housing market,
suffering annual losses of KRW182.7 billion and KRW310.9 billion
in 2014 and 2013, respectively.
Yonhap relates that on March 17, Sung Woan-jong, the head of
Keangnam Enterprises, said he would give up his managerial rights
in hopes of persuading creditors to continue supporting the
company. Mr. Sung is facing suspicions of pocketing the investment
money for his political activities when he was a lawmaker, says
Yonhap.
The former head has been banned from leaving the country, and is
set to be called in for questioning as early as later this month,
Yonhap adds.
Keangnam Enterprises Ltd (KRX:000800) is a Korea-based company
engaged in the construction business. It operates building
construction division, which constructs office buildings,
commercial buildings, education facilities, medical facilities,
public buildings and others; housing division, which develops and
constructs apartments, retail shops and residential complexes;
civil works division, which constructs railways, subways,
highways, and site development works, and plants division, which
constructs electricity plants and energy and oil refinery systems,
as well as water and sewage treatment facilities. It operates
overseas construction works. Through its subsidiaries, it engages
in the hotel, real estate leasing, energy and other businesses.
================
S R I L A N K A
================
AMW CAPITAL: Fitch Raises Rating to BBB+ from BB-; Outlook Stable
-----------------------------------------------------------------
Fitch Ratings Lanka has upgraded Sri Lanka-based AMW Capital
Leasing and Finance PLC's (AMCL) National Long-Term Rating to
'BBB+(lka)' from 'BB-(lka)'. The Outlook is Stable. The
multiple-notch upgrade follows Fitch's assessment of support from
its 90%-parent, Associated Motorways Limited (AMW).
KEY RATING DRIVERS
AMCL's rating reflects Fitch's view that support would be
forthcoming from AMW, given the finance company's strategic
importance to the latter. This assessment is based on AMCL's role
in group, given strong synergies and operational integration.
While its share of financing of AMW's vehicle sales has remained
moderate AMCL accounted for a substantial share of group profit
and assets at end-2014. About 46% of its advances comprised
vehicle finance facilities provided to its parents' clients (2013:
49%).
AMW is involved in the strategic direction of AMCL, having three
out of nine seats on AMCL's board and through the involvement of
current senior managers, including the Managing Director of AMW.
Fitch believes that additional incentives for AMW to provide
support to AMCL stem from the common AMW brand, which could have
high reputational impact on AMW should AMCL default. Of AMCL's 17
branches, 10 are based within AMW branches. In addition AMCL's
funding relies on the parent, which provided 67% of AMCL's
borrowings at end-2014.
AMW's rating factors in its modest credit profile, and its stable
and strong market share in the import and distribution of new
vehicles in Sri Lanka, particularly through products from the
Maruti Suzuki brands that are aimed at price-conscious consumers.
These vehicles are more likely to be sold in greater volumes
through macroeconomic cycles compared with high-end products where
import duties and indirect taxes are higher.
AMCL's intrinsic financial strength, while having improved, is
considerably weaker than the support assessment and thus no longer
a rating driver.
RATING SENSITIVITIES
AMCL's rating is sensitive to changes in its parent's ability and
propensity to provide support.
AMCL's rating may be downgraded if AMCL's size relative to AMW
increases and if its operations become more independent of that of
its parent.
AMW's rating could be downgraded if there is a weakening of its
financial profile, including its leverage as measured by adjusted
net debt/ EBITDAR, a sustained reduction in the market share of
vehicle brands such as Maruti Suzuki, or a material dilution in
the relationship between AMW and its automotive end-brands,
particularly Maruti Suzuki. AMW's rating may be upgraded if there
is a sustained increase in its market share in brand new vehicle
sales in Sri Lanka.
In the event of a reduction in its stake by AMW in AMCL, assuming
that AMW retains majority ownership, will not necessarily change
Fitch's classification of AMCL as a "strategically important"
subsidiary of AMW.
*********
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
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*** End of Transmission ***