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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
Thursday, April 16, 2015, Vol. 18, No. 074
Headlines
A U S T R A L I A
ATLAS IRON: Lenders Push for Voluntary Administration
AUSTRALIA NOODLE: First Creditors' Meeting Set For April 22
BO-JEAN PTY: Bankwest Taps Ferrier Hodgson as Receivers
CRALEXIAN PTY: First Creditors' Meeting Slated For April 21
DEGBANE PTY: First Creditors' Meeting Set For April 22
EFFICIENT DATA: First Creditors' Meeting Slated For April 22
RED2BLACK ACCOUNTING: ASIC Asks Liquidator to Repay AUD24K
SEQ ELECTRICAL: Goes Into Liquidation; 80 Jobs Lost
TERMITE RESOURCES: Cu-River Mining Buys Cairn Hill Mine
C H I N A
CENTRAL CHINA: Moody's Assigns Ba3 Rating on Proposed USD Notes
CENTRAL CHINA: S&P Rates Proposed US$ Sr. Unsecured Notes 'BB-'
CHINA XINGBANG: Baker Tilly HK Expresses Going Concern Doubt
YANZHOU COAL: Fitch Lowers IDR to 'BB-'; Outlook Negative
I N D I A
A D INDUSTRIES: CRISIL Suspends D Rating on INR50MM Cash Credit
A.K.PROPERTIES: CRISIL Suspends D Rating on INR110MM Cash Loan
AARKAY FOOD: CRISIL Cuts Rating on INR28.1MM Term Loan to D
AEON RKB: ICRA Suspends B+ Rating on INR27.5cr LT Loan
ALAKNANDA HYDRO: CARE Lowers Rating on INR2,147.94cr Loan to D
BARFLEX POLYFILMS: ICRA Reassigns C+ Rating to INR23.35cr Loan
BRAJESH PACKAGING: ICRA Reaffirms B+ Rating on INR6.75cr Loan
DUSAD ELECTRICALS: ICRA Assigns B+ Rating to INR6.5cr LT Loan
ELORA COTTON: CARE Assigns B+ Rating to INR1.30cr LT Bank Loan
GAGAN AGRO: CRISIL Reaffirms B+ Rating on INR300MM Pledge Loan
GOYAL SONS: ICRA Reaffirms B+ Rating on INR17cr Fund Based Loan
HANS RAJ: CRISIL Reaffirms B+ Rating on INR190MM Cash Credit
HAP GARMENTS: CRISIL Suspends D Rating on INR150MM Cash Credit
HYDROBATHS RAMCO: ICRA Reaffirms B Rating on INR9.25cr Loan
JYOTI GENERAL: ICRA Reaffirms B+ Rating on INR6cr Cash Credit
KANCHAN EXPORTS: CRISIL Suspends D Rating on INR56MM Bank Loan
KINGFISHER: Fined For 'Duping' Fliers To Take Low-Cost Flight
KLAUS WAREN: CRISIL Reaffirms D Rating on INR200MM Cash Credit
KRIPTON CERAMIC: CARE Reaffirms B Rating on INR9.05cr LT Loan
M D AGRO: CRISIL Suspend B+ Rating on INR250MM Cash Loan
M.S.P. TYRES: CRISIL Assigns B Rating to INR65MM Cash Credit
MANSA DEVI: CRISIL Suspends B Rating on INR160MM Cash Credit
METALOGICS SYSTEMS: CRISIL Suspends D Rating on INR75MM Loan
MITTAL INFRASTRUCTURE: CRISIL Reaffirms B Rating on INR60MM Loan
NAMPA ELECTRICALS: CRISIL Suspends D Rating on INR351MM Loan
NUCIFERA RENEWABLE: ICRA Assigns 'SP 3D' Grading
PARTH THREAD: CRISIL Suspends B+ Rating on INR92.8MM Term Loan
PUNJAB BIOMASS: CARE Ups Rating on INR31.78cr Term Loan to BB-
PUSHTI ENTERPRISE: CARE Assigns B+ Rating to INR7cr LT Loan
R. J. AGRO: ICRA Reaffirms B Rating on INR6cr Cash Credit
RC GOLDEN: CARE Reaffirms B+ Rating on INR0.09cr LT Bank Loan
RAUNAQ ICE: CARE Reaffirms B Rating on INR0.17cr Bank Loan
RAVINDRA RICE: ICRA Reaffirms B+ Rating on INR14.5cr FB Loan
RAWALWASIA STEEL: CRISIL Assigns B+ Rating to INR120MM Cash Loan
REALTRACK WIRE: CRISIL Assigns B Rating to INR102.3MM LT Loan
RELIANCE CELLULOSE: CRISIL Reaffirms D Rating on INR185MM Loan
ROOPLAXMI INDUSTRIES: ICRA Reaffirms B- Rating on INR5cr Loan
S P DEVELOPERS: ICRA Assigns B Rating to INR2.75cr Loan
S.B. SYSCON: ICRA Suspends B+ Rating on INR12cr Bank Loan
SAHIBZADA TIMBER: CRISIL Suspends B Rating on INR150MM Cash Loan
SANT AUTOS: ICRA Assigns B+ Rating to INR6.0cr Cash Credit
SARASWATI RICE: ICRA Reaffirms B Rating on INR12cr Long Term Loan
SEWRI ENGINEERING: CARE Revises Rating on INR4.95cr Loan to B+
SHIV-OM SULZ: CARE Assigns B+ Rating to INR8.25cr LT Loan
SHREE BALA: CRISIL Assigns B+ Rating to INR250MM Cash Credit
SUNRISE HYGIENE: ICRA Reaffirms B Rating on INR5cr Cash Credit
SWAMINARAYAN COTTON: CARE Rates INR7.91cr LT Bank Loan at B+
TANTIA SANJAULIPARKINGS: CARE Reaffirms B+ Rating on INR25cr Loan
UB VENTURES: CRISIL Ups Rating on INR70MM Cash Loan to B+
UMA GLASS: CARE Assigns B+ Rating to INR6.57cr LT Bank Loan
I N D O N E S I A
PELABUHAN INDONESIA: S&P Assigns 'BB+' CCR; Outlook Stable
N E W Z E A L A N D
E2 NEW HOMES: Palmerston North Pub Still For Sale
NCF INT'L: Chinese Directors Maybe Asked to Pay Back NZ$145K
WAIMEA CONTRACT: Administrators Work to Save Transport Firm
S I N G A P O R E
STATS CHIPPAC: Moody's Reviews 'Ba3' Ratings for Downgrade
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A U S T R A L I A
=================
ATLAS IRON: Lenders Push for Voluntary Administration
-----------------------------------------------------
watoday.com.au reports that a group of Atlas Iron's lenders are
reportedly pushing for the miner to enter voluntary administration
so they can carry out a debt-to-equity conversion.
The lenders represent more than half of the miner's $US275 million
Term B Loan and have sent a letter to the company warning they may
accelerate the debt, according to a report from Debtwire,
watoday.com.au relates. The report notes that they believe the
embattled iron ore miner is insolvent and has defaulted on its
loan.
The Pilbara iron ore miner announced on April 10 it would
gradually suspend production at its three mines in reaction to the
plummeting price, the report discloses.
Atlas is struggling under $327 million in gross debt, with the
group's $169 million cash on hand at the end of December
understood to have fallen to about $130 million, the report
relays.
The company is undertaking a review of its operations and capital
structure, and in an update Atlas said it had not defaulted on its
secured debt facilities and remained in discussions with both
secured and unsecured creditors, the report relays.
The letter, sent by the lenders' legal counsel Gilbert+Tobin to
the company's lawyer Ashurst, reportedly argues Atlas will run out
of funds within eight to twelve months and the closure of its
mines constitutes an event of default under the terms of the loan,
the report discloses.
The group has based its insolvency warning on iron ore price
forecasts and the company's financial statements, according to the
report, the report says.
Atlas denies it is insolvent or in default of its loan.
Atlas' advisers have been inviting pitches for the potential role
of administrator. It is understood KordaMentha and FTI Consulting
have interviewed for the role of administrator, the report
relates. The lenders have been pushing for the appointment of
Ferrier Hodgson, the report notes.
Sources told Debtwire the group of lenders is interested in
pursuing a debt-to-equity conversion under voluntary
administration in order to "crush the shareholders," the report
notes.
Mirabela Nickel was the first listed company where shares were
compulsorily transferred from shareholders to creditors without
the shareholders' consent, the report says. Last year the Supreme
Court of New South Wales approved the debt-for-equity restructure,
through which bondholders exchanged $US395 of notes for a 98.2 per
cent stake in the company, the report adds.
AUSTRALIA NOODLE: First Creditors' Meeting Set For April 22
-----------------------------------------------------------
Gavin Moss & Nick Combis of Vincents Chartered Accountants were
appointed as administrators of Australia Noodle King Pty Ltd,
formerly trading as "Lane Cove Noodle King" and as "Lane Cove BBQ
Kitchen" on April 10, 2015.
A first meeting of the creditors of the Company will be held at
The Boardroom of Servcorp, Level 57, MLC Centre, 19-29 Martin
Place, in Sydney, on April 22, 2015, at 3:00 p.m.
BO-JEAN PTY: Bankwest Taps Ferrier Hodgson as Receivers
-------------------------------------------------------
Morgan Kelly and Ryan Eagle of Ferrier Hodgson were appointed
Receivers and Managers to the assets and undertakings of the Bo-
Jean Pty Limited on April 9, 2015, by the Commonwealth Bank of
Australia trading as Bankwest, the holder of an all present and
after acquired property security interest.
"The effect of the appointment is that the Receivers are now in
control of the Company's assets, undertakings and operations,"
Ferrier Hodgson said in a statement.
"The Receivers intend to trade the Hotels in the ordinary course
while the Company's financial position is assessed.
"At this stage, it is too early to advise creditors of the likely
outcome of the Receivership."
Payment of unsecured creditors' accounts as at 9 April 2015 is
deferred.
Bo-Jean Pty Ltd operates the following venues: Henry Kendall
Tavern; Kariong Tavern; Duttons Tavern; and The Gosford Bottle
Shop.
CRALEXIAN PTY: First Creditors' Meeting Slated For April 21
-----------------------------------------------------------
Glen Oldham of Oldhams Advisory was appointed as administrator of
Cralexian Pty Ltd on April 9, 2015.
A first meeting of the creditors of the Company will be held at
Oldhams Advisory, Level 20, 300 Queen Street, in Brisbane,
Queensland, on April 21, 2015, at 10:00 a.m.
DEGBANE PTY: First Creditors' Meeting Set For April 22
------------------------------------------------------
Blair Pleash and David Ingram of Hall Chadwick Chartered
Accountants were appointed as administrators of Degbane Pty
Limited trading as Dr What Video on April 10, 2015.
A first meeting of the creditors of the Company will be held at
Hall Chadwick Chartered Accountants, Level 40, 2 Park Street, in
Sydney, on April 22, 2015, at 11:00 a.m.
EFFICIENT DATA: First Creditors' Meeting Slated For April 22
------------------------------------------------------------
Andrew John Cummins of BRI Ferrier was appointed as administrator
of Efficient Data Communications Pty Ltd on April 14, 2015.
A first meeting of the creditors of the Company will be held at
Level 30, Australia Square, 264 George Street, in Sydney, on
April 22, 2015, at 11:00 a.m.
RED2BLACK ACCOUNTING: ASIC Asks Liquidator to Repay AUD24K
----------------------------------------------------------
The Australian Securities and Investments Commission has accepted
an enforceable undertaking (EU) from Perth-based registered
liquidator, Ross Stephen Thomson.
ASIC looked at Mr Thomson's handling of three external
administrations and found he failed to properly investigate the
affairs of the companies, withdrew approximately AUD4,200 in
remuneration not properly approved, failed to secure assets in a
timely manner, did not adequately record his work, and failed to
lodge documents with ASIC.
The EU prevents Mr Thomson from accepting any new appointments for
three months or alternatively, only accept joint and several
appointments with another registered liquidator.
The EU also requires Mr Thomson to improve his systems and
procedures, repay the AUD24,200 and appoint an independent expert
to review his practices. The expert will report to ASIC, and ASIC
may publish the results of the reports.
ASIC Commissioner John Price said, 'We continue to see similar
issues from our surveillance of some insolvency practices; that
is, a lack of investigation, not complying with lodgement
obligations, poor record keeping and lax practices around
remuneration.'
'Since 2013 ASIC has achieved 20 enforcement-related outcomes
relating to liquidators, including cancelling or suspending
registrations and entering into voluntary arrangements with
liquidators to either exit the industry or engage independent
experts to improve their insolvency services.
'We are committed to sanctioning those few practitioners who do
not comply with the high standards the law imposes on them.'
ASIC expects to release its annual report on the supervision of
registered liquidators later this week. The report details ASIC's
work aimed at improving the profession including by removing the
problem liquidators.
Mr. Thomson trades as Red2Black Accounting Solutions.
SEQ ELECTRICAL: Goes Into Liquidation; 80 Jobs Lost
---------------------------------------------------
Jenny Rogers at Gold Coast Bulletin reports that SEQ Electrical
has collapsed into liquidation, putting at least 80 employees and
contractors out of work. Liquidators from SV Partners were
appointed to the company last week, the report says.
SEQ, co-founded by Matthew O'Brien in Southport in 2011, had grown
to have annual revenue of more than AUD20 million, employ 115
people nationally and was a major national supplier to NBN Co.,
according to the report.
The Bulletin says the Molendinar-based company had expanded into
three states, establishing offices in Darwin and Perth. According
to the report, SEQ's managing director Matthew Kirk previously
said the company had brought together a team of senior
electricians who had worked together on other projects and had
used their existing contacts to build the operation.
The report relates that the company appointed Russell Cahill as
its NT construction manager in 2013.
SEQ picked up an Emerging Business monthly gong in November in the
Gold Coast Business Excellence Awards, the Bulletin notes.
According to the Bulletin, the company had carried out projects
worth up to AUD20 million including the upgrade of Defence Force
facilities in Darwin, the relocation of the Gold Coast Showgrounds
to the Gold Coast Turf Club, development of the Gold Coast Airport
Virgin Lounge and the new Australian Federal Police building at
Gold Coast airport.
More recently, SEQ, which said it offered a complete range of
electrical services from highrise buildings to complex data
exchange sites, had been working with NBN Co to roll out the
National Broadband Network in the Northern Territory, the report
relays.
The Bulletin notes that the company was hoping to expand with NBN
into other states.
SV Partners' Gold Coast director Matthew Bookless said SEQ hit
trouble last August when it experienced cashflow problems with two
projects -- a floating jetty for Brisbane City Council's City Cat
Ferries, to replace the one destroyed in the 2011 floods, and a
multi-level highrise, Halikos, in Darwin, due to be completed by
mid year, the report adds.
TERMITE RESOURCES: Cu-River Mining Buys Cairn Hill Mine
-------------------------------------------------------
Ferrier Hodgson has successfully completed a transaction involving
the transfer of the Mining Lease for the Cairn Hill iron-copper
ore mine in South Australia, despite the iron ore price falling to
a near record low.
The Cairn Hill mine, located 55 kilometres south-east of Coober
Pedy, has been transferred to Perth-based Cu-River Mining
Australia Pty Ltd for an undisclosed sum.
The transaction documents were executed in December 2014 and were
subject to approvals from the South Australian government, the
Department of Defence and the Federal Treasurer (under the Foreign
Acquisitions and Takeover Act). The transaction was completed on
April 8, 2015, following receipt of the relevant approvals.
The mine was previously operated by Termite Resources NL before
the company became one of the first casualties of the recent
collapse in iron ore prices. The company went into Voluntary
Administration in June 2014 and later into liquidation in
September 2014.
The iron ore price at the time of the Voluntary Administration had
fallen around 34% to US$89 a tonne. It has since collapsed further
to a low US$47 a tonne.
Ferrier Hodgson Partner, Mr Martin Lewis, said he was delighted
with the transaction considering the conditions facing Australian
iron ore miners.
"The transaction follows a comprehensive international marketing
campaign conducted in conjunction with the PCF Capital Group,"
said Mr Lewis.
"Cu-River Mining Australia has continued to invest in Australian
iron ore assets and the company's acquisition of Cairn Hill
follows its acquisition of IMX Resources' Mt Woods tenements late
last year."
The undisclosed sum received by Termite Resources from the
transaction will be returned to Termite Resources' unsecured
creditors by way of a dividend in due course.
Martin David Lewis, David William Kidman & Tim David Mableson of
Ferrier Hodgson were appointed as administrators of Termite
Resources NL on June 18, 2014.
Termite Resources NL was a metal ore mining company located in
West Perth.
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C H I N A
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CENTRAL CHINA: Moody's Assigns Ba3 Rating on Proposed USD Notes
---------------------------------------------------------------
Moody's Investors Service has assigned a Ba3 senior unsecured
rating to the proposed USD senior unsecured notes to be issued by
Central China Real Estate Limited (CCRE, Ba3 stable).
The rating outlook is stable.
The proceeds from the issuance will be used to repay existing debt
and for general corporate purposes.
"The proposed USD notes will improve CCRE's liquidity position
because the proceeds will be used to repay some of the company's
short-term debt obligations, including joint venture debt. Also,
the company's debt maturity profile will lengthen," says Kaven
Tsang, a Moody's Vice President and Senior Analyst.
"In addition, the proposed issuance will not materially affect
CCRE's debt leverage, including adjustments for joint venture
debt, because the majority of the proceeds will be used for
refinancing," adds Tsang, who is also the Lead Analyst for CCRE.
Moody's expects that CCRE's debt leverage -- as measured by
adjusted revenue/debt -- adjusted for joint venture (JV) debt --
will exceed 75% over the next 12-18 months, while its adjusted
EBITDA/interest coverage -- adjusted for JV debt -- will be at
around 2.0x-2.5x for the same period.
These ratios support CCRE's Ba3 corporate family and senior
unsecured ratings.
Moody's has adjusted CCRE's credit metrics by consolidating the
results of all 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.
CCRE's Ba3 ratings also continue to reflect its leading market
position and long operating track record in Henan Province.
On the other hand, the company's geographic concentration in Henan
Province will expose it to any volatility in the provincial
economy, as well as any changes in the local government's policy
on property purchases.
CCRE's ratings are also constrained by its moderately high debt
leverage and financial risk; both factors of which relate to the
pace of growth through debt funded JV arrangements.
Moody's notes that CCRE's higher levels of onshore debt at JV in
2014 could raise subordination risk for offshore bondholders. As
of 31 December 2014, its adjusted priority debt to total assets
-- adjusted for JV debt -- exceeded 15% as against 14% as of
December 2013.
Moody's expects CCRE to manage down its onshore financing levels.
In particular, its adjusted priority debt to total assets should
fall to 15% or less.
The stable rating outlook reflects our expectation that CCRE: 1)
can maintain its leadership position in Henan Province and
generate sales growth; 2) can maintain adequate liquidity levels;
and 3) will adopt a disciplined approach to land acquisitions,
against the backdrop of a challenging economic environment over
the next 12-18 months.
Upward rating pressure is unlikely in the near term, given its
high debt leverage.
Nevertheless, an upgrade could occur over the medium term if CCRE:
(1) consistently achieves its sales targets; (2) demonstrates a
track record of good financial discipline by keeping its adjusted
cash to short-term debt -- including amounts due to and due from
JVs -- in excess of 2.0x, adjusted revenue/debt in excess of 95%-
100% and adjusted EBITDA/interest coverage consistently in excess
of 3.5x-4.0x on a sustainable basis; and (3) broadens its
geographic coverage and offshore banking relationships.
On the other hand, the rating could come under pressure for a
downgrade if CCRE: (1) experiences significant sales declines; (2)
suffers a material decline in profit margins; and/or (3)
accelerates its expansion such that its liquidity position
deteriorates, and/or its debt levels rise materially.
Specific indicators of a downgrade include: (1) an adjusted cash
to short-term debt of below 1.0x-1.5x; (2) an adjusted
EBITDA/interest coverage below 2.0x-2.5x; and/or (3) adjusted
revenue/debt below 70%.
The senior unsecured ratings for bonds issued by CCRE will be
notched down for subordination, if CCRE's adjusted priority debt
to total assets exceeds 15% for an extended period.
The principal methodology used in these ratings was 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.
CENTRAL CHINA: S&P Rates Proposed US$ Sr. Unsecured Notes 'BB-'
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB-' long-term
issue rating and 'cnBB+' long-term Greater China regional scale
rating to a proposed issue of U.S.-dollar-denominated senior
unsecured notes by Central China Real Estate Ltd. (CCRE: BB-
/Stable/--; cnBB+/--). The rating on the notes is subject to
S&P's review of the final issuance documentation.
S&P anticipates that CCRE will use majority of the proceeds from
the proposed notes for refinancing its existing debt, and the rest
for funding new and existing projects and for general corporate
purposes.
CCRE's debt-to-EBITDA ratio for full-year 2014 slightly exceeded
S&P's downgrade trigger of 5x, mainly due to lower-than-expected
revenue recognition and cash dividends from joint ventures (JVs).
Nevertheless, S&P expects the ratio to gradually improve in the
coming 12 months. S&P expects the company's satisfactory sales
performance in 2014 to support moderate revenue growth and higher
dividend contribution from JVs in 2015. At the same time, S&P
forecasts that CCRE's debt will only increase slightly during the
period, given its cautious expansion plan and controlled
expenditure on land acquisitions and construction. In calculating
S&P's adjusted debt-to-EBITDA ratio, it added back cash dividends
from JVs in CCRE's EBITDA, and debt guarantees to JVs in its debt.
The rating on CCRE continues to reflect the company's increased
debt leverage, high geographic concentration, and growing
competition. CCRE's established market position in Henan,
satisfactory sales execution, and good profitability stemming from
sizable low-cost land reserves temper these weaknesses.
CHINA XINGBANG: Baker Tilly HK Expresses Going Concern Doubt
------------------------------------------------------------
China Xingbang Industry Group Inc. filed with the U.S. Securities
and Exchange Commission its annual report on Form 10-K for the
year ended Dec. 31, 2014.
Baker Tilly Hong Kong Limited expressed substantial doubt about
the Company's ability to continue as a going concern, citing that
the Company's operations resulted in used cash in operations of
$2.48 million for the year ended Dec. 31, 2014. As of Dec. 31,
2014, the Company had an unappropriated accumulated deficit of
$8.5 million and a working capital deficiency of $7.98 million.
The Company reported a net loss of $3.47 million on $37,500 of
total revenue for the year ended Dec. 31, 2014, compared with a
net loss of $3.19 million on $19,900 of total revenue in 2013.
The Company's balance sheet at Dec. 31, 2014, showed $1.18 million
in total assets, $8.46 million in total liabilities, and a
stockholders' deficit of $7.28 million.
A copy of the Form 10-K is available at:
http://is.gd/KcZagS
Based in the city of Guangzhou, Guangdong Province, China,
Guangdong Xingbang is a company principally engaged in the
provision of marketing consultancy services to manufacturers,
distributors and other businesses and local governments in the
lighting, ceramics and other home furnishings industry in the PRC.
YANZHOU COAL: Fitch Lowers IDR to 'BB-'; Outlook Negative
---------------------------------------------------------
Fitch has downgraded Yanzhou Coal Mining Company Limited's
(Yancoal) Long-Term Issuer Default Rating (IDR) to 'BB-' from
'BB+'. The Outlook is Negative. Simultaneously, Fitch has
downgraded the rating on the USD1bn dual-tranche notes issued by
Yancoal International Resources Development Co., Ltd and
guaranteed by Yancoal to 'BB-' from 'BB+', and the ratings on the
US dollar senior perpetual capital securities issued by Yancoal
International Trading Co., Ltd and guaranteed by Yancoal to 'B+'
from 'BB'.
The downgrade of Yancoal's ratings and the Negative Outlook
reflects the substantial deterioration of the company's cash
generation capacity and credit metrics. Coal prices have
continued to fall despite some production cuts across the
industry. Fitch expects China coal prices to remain subdued for
an extended period. In addition, further room for cost savings by
Yancoal is fairly limited while its capital expenditure will
remain elevated in the next two years, which will constrain its
capability to deleverage.
Yancoal's good access to sources of funds and its strong liquidity
buffer against its short-term obligations are the key factors
supporting its 'BB-' IDR. However, there is little headroom under
the revised ratings. The ratings would be vulnerable to negative
action if coal prices fall further from current levels or if the
company fails to increase production following the capex to expand
capacity.
KEY RATING DRIVERS
Sustained Weakening of Coal Market: China's coal consumption in
2014 fell 2.5%, the first decline since 2001. Fitch does not
expect any material recovery of domestic coal prices as the market
will continue to be oversupplied for another two to three years
with more new capacity being added. At the same time, coal demand
will continue to be sluggish with a slowdown of industrial
production and thermal power generation growth. In addition,
thermal coal prices in China could come under more pressure after
the government recently said it would cut the thermal power on-
grid tariff by around 5%.
Weaker Credit Metrics: Yancoal's average realised selling price in
2014 dropped by 16%, faster than the reduction in costs, resulting
in materially weaker profitability and cash generation. The
company's EBITDA fell by a third. Funds flow from operations
(FFO) gross interest coverage weakened to 2.1x at end-2014 from
4.0x at end-2013, and FFO adjusted net leverage rose to over 10x
from 6.1x at end-2013.
Limited Room for More Cost-Savings: Yancoal has been actively
cutting costs to cope with the adverse market conditions since
2013. In 2014, Yancoal managed to further reduce its average
production cost by 9% per tonne of coal produced through
production process optimisation and labour cost cuts. Fitch
expects a good portion of these cost-cutting measures to be
sustained in the short to medium term. However, with most of its
cost-cutting options already exploited since 2013, there is
unlikely to be further room for meaningful cost reduction.
High Capex to Continue: Despite the low coal prices, Yancoal is
maintaining high capex to increase its production capacity, mainly
in Inner Mongolia and Australia, in the medium term, which will
continue to reduce its cash holdings in the next two years. In
2014, the company reported modest total capex of CNY5.4bn (2013:
CNY9.1bn) due to delays in expansion projects and equipment
delivery. However, Yancoal has budgeted CNY9.7bn capex for 2015,
close to historical highs, to accelerate its expansion programme.
Fitch expects Yancoal's capex level to remain elevated in the next
two years till new projects in Ordos in China and Moolarben in
Australia are completed, which would result in continued negative
free cash flows.
Liquidity Still Adequate: At end-2014, Yancoal had over CNY15bn
cash and CNY5bn term deposits on hand. These, together with
operating cash generation, provide adequate cover for its total
short-term debt of CNY11bn and planned capex of CNY9.7bn. The
company has maintained a high cash position against possible
financing difficulties, given the deteriorating financial
performance of the coal mining sector. Yancoal's ample liquidity
buffer, compared to 'B' category rated coal mining peers, is a key
supporting factor for its 'BB-' IDR.
Linkages with Parent: Yancoal is 56.5% owned by Yankuang Group
Corporation Limited (Yankuang), which is wholly owned by the
Shandong State-owned Assets Supervision and Administration
Commission (SASAC). The linkage is considered weak to moderate,
and therefore, Yankuang's weaker credit profile does not constrain
Yancoal's rating. The large number of institutions that are
minority shareholders in Yancoal and the rules governing its
listing on the Hong Kong Stock Exchange provide a meaningful
counter-balance to Yankuang's controlling stake. Fitch has not
provided any rating uplift to Yancoal on account of any implied
support from the Shandong government. However, Yancoal benefits
from good access to sources of funds due to its status as an
entity majority-owned by the Shandong government.
KEY ASSUMPTIONS
Fitch's key assumptions within our rating case for the issuer
include:
-- average realised coal selling price to drop by 5% on
average in 2015
-- cost of coal sales per tonne to remain stable at the 2014
level
-- new production from the Ordos and Moolarben projects to
increase from 2015 and 2016, respectively
RATING SENSITIVITIES
Negative: Future developments that may individually or
collectively lead to negative rating action include:
-- FFO fixed charge coverage lower than 2.5x and failure to
reduce FFO adjusted net leverage to or below 6x on a
projected basis post-2016
-- Sustained substantial negative free cash flow post-2016
-- Weakening of the sizeable liquidity buffer Yancoal
currently maintains with large cash balances
-- Failure to ramp up production and improve profitability of
Yancoal Australia as expected by Fitch
Positive Triggers: We do not expect any positive rating action in
the medium term given our expectation of weak market conditions
and Yancoal's limited headroom under the current rating. However,
Fitch may revise the Outlook to Stable at the current rating level
if:
-- The company can improve its credit metrics and liquidity
such that its interest cover and financial leverage can be
comfortably improved to beyond the negative guidelines
listed above; and
-- Attain at least near-natural free cash flows on a projected
basis post-2016; and
-- Maintain strong liquidity; and-Ramp up Yancoal Australia
production volume and materially improve its profitability
=========
I N D I A
=========
A D INDUSTRIES: CRISIL Suspends D Rating on INR50MM Cash Credit
---------------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of
A D Industries Pvt Ltd (ADIPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 50 CRISIL D Suspended
Proposed Cash
Credit Limit 50 CRISIL D Suspended
The suspension of ratings is on account of non-cooperation by
ADIPL with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, ADIPL is yet to
provide adequate information to enable CRISIL to assess ADIPL's
ability to service its debt. The suspension reflects CRISIL's
inability to maintain a valid rating in the absence of adequate
information. CRISIL considers information availability risk as a
key credit factor in its rating process and non-sharing of
information as a first signal of possible credit distress, as
outlined in its criteria 'Information Availability Risk in Credit
Ratings'
ADIPL was established by Mr. Gouranga Roy in December 2008. The
company began commercial operations in March 2010. It trades on a
wholesale basis in ready-made garments such as T-shirts, shirts,
jeans, trousers, woollen clothes, and babywear.
A.K.PROPERTIES: CRISIL Suspends D Rating on INR110MM Cash Loan
--------------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of
A.K.Properties Pvt Ltd (AKP).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 30 CRISIL D Suspended
Cash Credit 110 CRISIL D Suspended
Rupee Term Loan 14.5 CRISIL D Suspended
The suspension of ratings is on account of non-cooperation by AKP
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, AKP is yet to
provide adequate information to enable CRISIL to assess AKP's
ability to service its debt. The suspension reflects CRISIL's
inability to maintain a valid rating in the absence of adequate
information. CRISIL considers information availability risk as a
key credit factor in its rating process and non-sharing of
information as a first signal of possible credit distress, as
outlined in its criteria 'Information Availability Risk in Credit
Ratings'
AKP was originally set up in 1993 as a proprietorship firm by Mr.
Ashok Kumar Bhunia; the firm was reconstituted as a private
limited company in 2007. AKP is a civil contractor executing road
construction and irrigation projects for state and public sector
undertakings, mainly in Odisha.
AARKAY FOOD: CRISIL Cuts Rating on INR28.1MM Term Loan to D
-----------------------------------------------------------
CRISIL has downgraded its ratings on the bank facilities of
Aarkay Food Products Limited (AFPL) to 'CRISIL D' from
'CRISIL BB-/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 27. 5 CRISIL D (Downgraded
from 'CRISIL BB-/Stable')
Term Loan 28.1 CRISIL D (Downgraded
from 'CRISIL BB-/Stable')
The rating downgrade reflects instances of delay in term debt
servicing by AFPL. The delays were due to the company's weak
liquidity, driven by stretch in working capital cycle.
AFPL also has a weak financial risk profile, marked by high
gearing and a small net worth, and large working capital
requirements. However, the company benefits from the extensive
experience of its promoters in the food colour and additives
business.
AFPL was incorporated in 1983 by Mr. Ravi Kapoor to manufacture
food colouring agents such as caramel colour and annatto colour.
Since then the company has ventured into related domains like
additives that comprise of fruit and vegetable powder and
flavouring ingredients. The manufacturing facility is located at
Ahmedabad and the firm is currently managed by the members of
Kapoor family.
AFPL reported a profit after tax (PAT) of INR2.6 million on net
sales of INR177.5 million for 2013-14 (refers to financial year,
April 1 to March 31) as compared to PAT of INR3.3 million on net
sales of INR180.5 million.
AEON RKB: ICRA Suspends B+ Rating on INR27.5cr LT Loan
------------------------------------------------------
ICRA has suspended [ICRA]B+ rating assigned to the INR27.50 crore
long term fund based limits of Aeon RKB Motors Private Limited.
The suspension follows ICRA's inability to carry out a rating
surveillance in the absence of the requisite information from the
company.
ALAKNANDA HYDRO: CARE Lowers Rating on INR2,147.94cr Loan to D
--------------------------------------------------------------
CARE revises the ratings assigned to the bank facilities of
Alaknanda Hydro Power Company Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 2,147.94 CARE D Revised from
CARE BBB-
Rating Rationale
The revision in the rating is on account of recent delays in
servicing of Interest during Construction (IDC) on term loans,
owing to delay in project completion resulting in substantial cost
and time overrun.
Alaknanda Hydro Power Company Ltd (AHPCL) is a Special Purpose
Vehicle (SPV) promoted by the GVK group to set up a 330 MW
(4 x 82.5) run of the river hydroelectric power project on
Alaknanda river at Srinagar, Uttarakhand. AHCPL is the first
hydropower venture of the GVK group. The project is located on the
Alaknanda river, a major tributary of the Ganges river, a
perennial river in Uttarakhand. The project site is at a distance
of about 110 km from Rishikesh railhead along Rishikesh-Badrinath
highway. A dam is being constructed on the Alaknanda river at
Srinagar, about 26 kms downstream of Rudraprayag. At 90%
dependability and 95% availability, the project is expected to
generate 1,514 million units of electricity per annum translating
into capacity utilization factor of 62.17% (PLF of 52% on Gross
Capacity). AHPCL has signed PPA with UP Power Corporation Ltd
(UPPCL) for selling 88% of the power generated and the state of
Uttarakhand will be provided 12% of the power generated as free
energy.
The expected Commercial operation date (COD) is now rescheduled to
April 30, 2015 from May 31, 2014, due to collapse of central
divide wall of the desilting basin and intermittent stoppages of
the works for different reasons including delayed payment to the
employees, contractors & suppliers & non- infusion of funds by the
promoters on time. As on January 31, 2015 company has incurred
INR5227.70 on the project funded through equity of INR1075.27
crore and balance through debt.
BARFLEX POLYFILMS: ICRA Reassigns C+ Rating to INR23.35cr Loan
--------------------------------------------------------------
ICRA has revised the rating assigned to the INR55 crore long-term
fund based facilities of Barflex Polyfilms Private Limited (BPPL)
from [ICRA]B+ to [ICRA]D and simultaneously reassigned the rating
to [ICRA]C+. ICRA has also revised the rating assigned to INR7
crore short term non fund based limits from [ICRA]A4 to [ICRA]D
and simultaneously reassigned the rating to [ICRA]A4.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term Loan 11.95 Revised to [ICRA]D from
[ICRA]B+ and simultaneously
reassigned to [ICRA]C+
Cash Credit 23.35 Revised to [ICRA]D from
[ICRA]B+ and simultaneously
reassigned to [ICRA]C+
Unallocated 19.70 Revised to [ICRA]D from
[ICRA]B+ and simultaneously
reassigned to [ICRA]C+
Bank Guarantee 7.00 Revised to [ICRA]D from
[ICRA]A4 and simultaneously
reassigned to [ICRA]A4
The revision in ratings factors in the irregularities in debt
servicing by the company along with the deterioration in financial
profile as reflected by tight liquidity position, losses at the
operating, net level, adverse capital structure and weakened debt
protection metrics. The liquidity position is expected to remain
tight in the near term, although the company is trying to
restructure the operations by altering its product profile to
improve profitability and reduce working capital intensity. The
ratings continue to be constrained by the company's relatively
small scale of operations in relation to the size of the overall
flexible packaging industry; fragmented nature of the flexible
packaging industry resulting in high competition from organized as
well as unorganized players in the domestic market; and exposure
of profitability to any adverse fluctuations in foreign exchange
rates and volatility in raw material prices.
The ratings, however, continue to factor in the long experience of
the promoters in the domestic flexible packaging industry and
company's long standing relationships with reputed customers.
ICRA has revised its long term rating to [ICRA]BB from [ICRA]BB+
on the INR29.00 Cr. bank limits of Kochar Infotech Pvt. Ltd.
(KIPL). The outlook on the long term rating is 'Stable'.
Incorporated in January 2005 as a private limited company, Barflex
Polyfilms Private Limited (BPPL) began commercial production in
November 2005. The company is into manufacturing of 3 and 5-layer
films, PVC Labels and Laminates. It procures raw materials i.e.
plastic granules (like LLDPE/LDPE), inks, solvents & master
batches from Indian and overseas suppliers like Exxonmobil
Chemical Asia Pacific; Reliance Industries Limited, Uflex Ltd,
Jagriti Plastics Ltd, D.R. Polymers Ltd etc. The company's
customer profile includes major domestic brands like Reliance
Fresh, Shakti Bhog Foods Ltd, Kwality Dairy, Creamy Foods Ltd,
Pidilite Industries, Bunge India (Dalda) etc. BPPL's plants are
located at Baddi (Himachal Pradesh) and Noida (Uttar Pradesh). It
was promoted by Mr. Jaiwant Bery and his wife Mrs. Nomita Bery;
following private equity infusion in 2010-11, the promoter share
declined to 58% with the rest being held by the private equity
fund.
BRAJESH PACKAGING: ICRA Reaffirms B+ Rating on INR6.75cr Loan
-------------------------------------------------------------
ICRA has reaffirmed long term rating of [ICRA]B+ assigned to the
INR6.75 crore (enhanced from INR5.75 crore) from cash credit and
the INR0.73 crore term loan facilities of Brajesh Packaging
Private Limited. ICRA has also reaffirmed the [ICRA]A4 assigned to
the INR0.14 crore short-term, non-fund based facilities of BPPL.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term, fund based
Limits - Cash Credit 6.75 [ICRA]B+ Reaffirmed
Long-term, fund based
limits - Term Loan 0.73 [ICRA]B+ Reaffirmed
Short-term, non-fund
based limits - Bank
Guarantee 0.14 [ICRA]A4 Reaffirmed
The assigned ratings favourably factor in the long standing
experience of the promoters in the industry; established marketing
network in Maharashtra and adjoining states; and favourable demand
prospect for polypropylene (PP) strap in packaging industry. The
assigned ratings, however, remain constrained by stretched
accruals owing to low margins, and working capital intensive
nature of the business, resulting in a stretched capital structure
and weak coverage indicators.
The ratings are also constrained by the small scale of operations,
which limits the ability to gain economies of scale; and the
firm's vulnerability of margins to fluctuations in input prices
and foreign exchange, given the limited ability to pass on the
same to its clients. ICRA has taken a consolidated view of BPPL
and three other group companies, viz. Radhika Packaging Private
Limited (RPPL), Suyash Polymer (SP) and Harshita Polypack (SP) --
together referred to as the Dammani Group -- while arriving at the
ratings, as the group companies derive significant business
synergies from each other.
Incorporated in 1978, Brajesh Packaging Private Limited (BPPL) is
the flagship company of the Dammani Group, engaged in
manufacturing of PP straps and strap machines. Mr. Neelesh
Dammani, the Managing Director of the company, oversees the group
operations.
Recent Results
The company registered an operating income of INR33.5 crore and
PAT of INR0.05 crore for the year ending March 31, 2014. On a
consolidated basis, the group has registered an operating income
of INR104.9 crore and PAT of INR0.23 crore in FY14.
DUSAD ELECTRICALS: ICRA Assigns B+ Rating to INR6.5cr LT Loan
-------------------------------------------------------------
ICRA has assigned its long term rating of [ICRA]B+ to the INR10.0
crore fund based and non fund based facilities of Dusad
Electricals (DSD). ICRA has also assigned its short term rating of
[ICRA]A4 to the INR2.0 crore fund based facilities of DSD.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term fund
based limits 6.50 [ICRA]B+; assigned
Long term non
fund based limits 3.50 [ICRA]B+; assigned
Short term non
fund based limits 2.00 [ICRA]A4; assigned
ICRA's ratings are, constrained by the weak financial profile of
the firm marked by stretched capitalization (gearing of 4.24x) and
debt coverage ratios (interest coverage ratio of 1.51x, Net cash
accruals/Total debt of 7%) and pressure on liquidity as reflected
in the high utilization of working capital limits. The ratings
also factor in the high dependence of the firm on the project from
Jodhpur Vidyut Vitran Nigam Ltd (JVVNL), leading to geographic and
client concentration risk. Nothwithstanding its healthy revenue
growth, DSD's scale of operations remains modest.
The firm is also exposed to risks associated with proprietorship
nature of constitution like risk of capital withdrawals,
dissolution etc.
The ratings, however, positively factor in the more than two
decades of experience of the promoter and the firm's established
track record in supplying electrical equipment to both private and
government sector clients. Also, DSD's operating income has grown
at a compound annual growth rate of ~65% during the last four
years, largely due to enhanced manufacturing capacity and
favorable demand outlook. This apart, the outstanding order book,
largely comprising of the INR33 crore turnkey project for JVVNL,
also imparts revenue visibility in the short to medium term.
Going forward, the ability of the firm to win and execute new
orders while managing the working capital requirements would be
among the key rating sensitivities. Further ICRA will also monitor
the impact of any substantial capital expenditure or capital
withdrawals on DSD's operational and financial profile.
DSD was incorporated in 1992 by Mr. Narayan Dusad as a
proprietorship firm in Jaipur. The firm supplies electrical
equipment such as isolators, LT panels, fuses etc to private and
government sector clients. The firm has a manufacturing facility
in Jaipur and derives majority of its revenue through
manufacturing, with a small proportion of its revenues being
derived from trading, contract work and job work income.
Recent Results
For 2013-14, the firm reported a net profit of INR0.34 crore on an
operating income of INR20.5 crore, as compared to a net profit of
INR0.15 crore on an operating income of INR10.47 crore for the
previous year.
ELORA COTTON: CARE Assigns B+ Rating to INR1.30cr LT Bank Loan
--------------------------------------------------------------
CARE assigns 'CARE B+' & 'CARE A4' ratings to the bank facilities
of Elora Cotton Industries.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 1.30 CARE B+ Assigned
Long term/Short term 5.00 CARE B+/CARE A4
Facilities Assigned
Rating Rationale
The ratings assigned to the bank facilities of Elora Cotton
Industries (ECI) are primarily constrained on account of its short
track record with modest scale of operations, financial risk
profile marked by thin profit margins, leveraged capital
structure, weak debt coverage indicators and moderate liquidity
position. The ratings are further constrained on account of its
partnership nature of constitution, operating margins susceptible
to cotton price fluctuation and seasonality associated with cotton
industry along with presence in highly fragmented industry with
limited value addition and prices and supply for cotton being
highly regulated by government.
The ratings, however, derive comfort from ECI's experienced
partners along with proximity to cotton producing belt of Gujarat.
The ability of ECI to increase its scale of operations while
moving up in the textile value chain coupled with improvement in
profitability and capital structure along with better working
capital management are the key rating sensitivities.
Jamnagar-based (Gujarat) ECI was formed in 2013 as a partnership
firm. ECI is into the business of cotton ginning & pressing of
cotton bales and cotton seeds. Currently, ECI is managed by five
partners with equal profit and loss sharing agreement between
them. ECI operates from its sole manufacturing facility located in
Jamnagar (Gujarat) and has an installed capacity of 4,320 metric
tonnes per annum (MTPA) for cotton bales and 7,680 MTPA for cotton
seed as on March 31, 2014. ECI markets its products in the states
of Gujarat, Punjab, Haryana and Tamil Nadu.
During FY14 (refers to the period April 1 to March 31), ECI has
reported a TOI of INR8.81 crore.
GAGAN AGRO: CRISIL Reaffirms B+ Rating on INR300MM Pledge Loan
--------------------------------------------------------------
CRISIL's ratings on the long-term bank facilities of Gagan Agro &
Rice Exporters (GARE) continues to reflect initial stage of and
expected modest scale of its operations in the highly fragmented
rice industry, its susceptibility to volatility in raw material
prices and to adverse regulatory changes, and to erratic climatic
conditions.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 45 CRISIL B+/Stable (Reaffirmed)
Pledge Loan 300 CRISIL B+/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility 2 CRISIL B+/Stable (Reaffirmed)
Term Loan 103 CRISIL B+/Stable (Reaffirmed)
The rating also factors in below-average financial risk profile of
the firm marked by aggressive capital structure and average debt
protection metrics. These rating weaknesses are partially offset
by the extensive experience of GARE's partners in the rice
industry, and their established relations with suppliers and
customers.
CRISIL had assigned its 'CRISIL B+/Stable' rating to the long-term
bank facilities of GARE vide its rating rationale dated March 10,
2015.
Outlook: Stable
CRISIL believes that GARE will benefit over the medium term from
its promoters' extensive industry experience and established
relationship with its customers. The outlook may be revised to
'Positive' if GARE efficiently manages its working capital
requirement or reports substantial increase in revenue and
profitability, resulting in sizeable cash accruals. Conversely,
the outlook may be revised to 'Negative' in case of weakening of
financial risk profile, particularly liquidity because of lower
cash accruals resulting from decline in revenue or profitability,
or stretch in its working capital cycle.
Established in 2014, GARE mills, processes and exports Basmati
rice. GARE is a partnership firm promoted by Mr. Sumit Singla, Mr.
Rahul Garg and Mr. Amandeep Kaur. The manufacturing unit of the
firm is in Badrukhan in Sangrur (Punjab) with an installed rice
milling capacity of 5000 tonnes per month. The unit commenced
operations in January 2015.
GOYAL SONS: ICRA Reaffirms B+ Rating on INR17cr Fund Based Loan
---------------------------------------------------------------
ICRA has reaffirmed [ICRA]B+ rating to the INR17.00 crore fund
based limits of Goyal Sons Jewels Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based Limits 17.00 [ICRA]B+ reaffirmed
The reaffirmation of the rating take into account stable growth in
revenues in the past and established presence of the showroom in
Rohtak, Haryana. The rating also continues to favorably factors in
the satisfactory demand outlook in the long term for the organized
jewellery segment owing to rising disposable income levels and
strong demand from smaller towns and rural areas. However, the
assigned rating continues to be constrained by low operating
margins of the company on account of industry dynamics and the
price structure being decided by the principal. The rating is also
constrained by the GSZPL's high working capital intensity as
reflected in NWC/OI of 38% for FY2014 on account of high inventory
requirements in the jewellery retailing. , The working capital
requirements are primarily funded by debt resulting in leveraged
capital structure as reflected in gearing of 3.29 times as on 31st
March 2014 and modest coverage indicators (OPBDITA/Interest of
1.54 times for FY2014). The rating is also constrained by
competition from other jewelers which is mitigated to a certain
extent by the brand reputation enjoyed by Tanishq.
Goyal Sons Jewels Private Limited was established in 2011 in
Rohtak Haryana. It is an authorized dealer of Titan Industries
Limited under its brand name Tanishq for Gold and Diamond
Jewellery. The Promoters of the company have prior experience in
electronics industry in Hisar. They have opened the showroom under
franchisee from Tanishq in November 2011. The company is selling
only Tanishq jewellery which has been supplied by the company
itself. Apart from the showroom in Rohtak , company is operating
another showroom in Hisar under the company Goyal Sons Zaveri
Private Limited.
Recent Results:
GSJPL reported a net profit of INR0.39 crores on an operating
income of INR41.99 crores for the year ended March 31, 2014 and a
net profit of INR0.29 crores on an operating income of INR35.00
crores for the year ended March 31, 2013.
HANS RAJ: CRISIL Reaffirms B+ Rating on INR190MM Cash Credit
------------------------------------------------------------
CRISIL ratings on the bank facilities of Hans Raj Agros Pvt Ltd
(HRA) continue to reflect HRA's below-average financial risk
profile marked by high gearing and weak debt protection metrics,
along with its small scale of operations in the intensely
competitive rice processing industry, and susceptibility to
volatility in raw material prices. These rating weaknesses are
partially offset by the promoters' extensive industry experience.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 0.2 CRISIL A4 (Reaffirmed)
Cash Credit 190 CRISIL B+/Stable (Reaffirmed)
Proposed Long Term 4.8 CRISIL B+/Stable (Reaffirmed)
Bank Loan Facility
Term Loan 5.0 CRISIL B+/Stable (Reaffirmed)
Warehouse Receipts 100.0 CRISIL B+/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that HRA will continue to benefit from the
promoters' extensive industry experience. The outlook may be
revised to 'Positive' if the company improves its financial risk
profile, driven by an improvement in its gearing or working
capital cycle. Conversely, the outlook may be revised to
'Negative' if HRA's working capital cycle lengthens leading to
deterioration in its liquidity or capital structure or in case of
decline in its operating margin.
HRA was established in 1996 by Mr. Hans Raj in Fazilka (Punjab).
The company is mainly engaged in the milling and marketing of
higher grade variety of rice such as basmati and other varieties
such as parmal. Mr. Ranjam Kamra oversees daily operations.
HRA reported a net profit of INR1.4 million on net sales of INR432
million for 2013-14 (refers to financial year, April 1 to March
31), as against a net profit of INR1.1 million on net sales of
INR249 million for 2012-13.
HAP GARMENTS: CRISIL Suspends D Rating on INR150MM Cash Credit
--------------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of
Hap Garments Pvt Ltd (HGPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 150 CRISIL D Suspended
The suspension of ratings is on account of non-cooperation by HGPL
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, HGPL is yet to
provide adequate information to enable CRISIL to assess HGPL's
ability to service its debt. The suspension reflects CRISIL's
inability to maintain a valid rating in the absence of adequate
information. CRISIL considers information availability risk as a
key credit factor in its rating process and non-sharing of
information as a first signal of possible credit distress, as
outlined in its criteria 'Information Availability Risk in Credit
Ratings'
HGPL, incorporated in 2010 and based in Kolkata, manufactures
garments such as salwar suits and sarees for women. The company
also trades in salwar suits. It has a manufacturing unit in
Kolkata with capacity of about 60,000 pieces per month. It derives
about 90 per cent of its revenue from sales to wholesalers and the
rest from retail sales. HGPL commenced commercial operations in
August 2010.
HYDROBATHS RAMCO: ICRA Reaffirms B Rating on INR9.25cr Loan
-----------------------------------------------------------
ICRA has reaffirmed its long term rating of [ICRA]B on the
INR10.43 crore fund based bank facilities and INR1.0 crore
unallocated limits of Hydrobaths Ramco Marketing Private Limited.
ICRA has also reaffirmed its short term rating of [ICRA]A4 on the
INR2.50 crore non fund based bank facilities of HRMPL.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based limits 9.25 [ICRA]B; reaffirmed
Term loan 1.18 [ICRA]B; reaffirmed
Non fund based limits 2.50 [ICRA]A4; reaffirmed
Unallocated 1.00 [ICRA]B; reaffirmed
ICRA's ratings reaffirmation takes into account HRMPL's modest
scale of operations and weak financial profile marked by a
leveraged capital structure and weak coverage indicators (Debt
Equity ratio of 2.69x, Debt/OPBITDA of 6.84x and NCA/Debt of 2%).
Further, given the high working capital intensity of business
owing to substantial inventory requirements (NWC/OI of 81%), the
company remains dependent on working capital limits. These limits
have remained over utilized thereby indicating liquidity
pressures. The ratings also factor in high competitive intensity
in the industry and HRMPL's exposure to foreign exchange
fluctuation risk as the company does not hedge its imports.
The ratings, however, take into consideration the experience of
the promoters who have been in this business for over a decade now
and have established multiple channels through which the products
are sold such as a strong network of dealers and distributors,
institutional and retail clients. Further, the ratings also factor
in the low dependence on a single product as well as its moderate
operating profitability.
Going forward, the ability of the company to increase its scale of
operations, improve its debt coverage indicators while managing
the working capital requirement will remain key rating drivers for
the company.
Incorporated in 2009, HRMPL is involved in trading of products
like sanitary ware, faucets, tiles and others. The company
procures products from various manufactures in countries like
Thailand, Italy and China and sells in domestic markets under
brand names like Newform, Bravat, Cotto, Hydrobaths and others.
Recent Results
In 2013-14, the company reported an operating income (OI) of
INR26.64 crore and a profit after tax (PAT) of INR0.15 crore, as
compared to an OI of INR23.19 crore and a PAT of INR0.11 crore in
2012-13.
JYOTI GENERAL: ICRA Reaffirms B+ Rating on INR6cr Cash Credit
-------------------------------------------------------------
ICRA has reaffirmed the long term rating of [ICRA] B+ for INR1.20
crores term loans and INR6.00 crores fund based bank facilities of
Jyoti General Industries.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 6.00 [ICRA]B+ reaffirmed
Term Loan 1.20 [ICRA]B+ reaffirmed
The rating reaffirmation factors in small scale of operations of
the firm which coupled with low value added nature of the business
and high competition in the industry has led to modest
profitability and debt coverage indicators. Funding of working
capital requirements through bank borrowings has led to relatively
high gearing for the firm. The rating also takes into account the
working capital intensive nature of rice milling business arising
out of the need to maintain substantial inventories (paddy which
is procured seasonally and rice is stocked for aging purposes) in
line with the industry trends. The rating also takes into account
agro climatic risks, which can affect the availability of paddy in
adverse conditions. The rating however, takes comfort from long
standing experience of promoters, strong relationships with
customers which results in repeat orders and proximity of the mill
to major rice growing area which results in easy availability of
paddy.
Jyoti General Industries was established in the year 1981 as a
partnership firm with Than Mal Totla, and Mr. Prabhulal Totla as
partners. In the year 2004 partnership was re constituted with Mr
Than Mal Totla, Mr. Vinod Kumar Totla, Ashok Kumar Totla, Shiv
Kumar Totla as partners in equal ratio. JGI is engaged in
processing and trading of rice. The manufacturing facility of the
company is located at Chittor road, Bundi Rajasthan.
Recent Results:
JGI reported a net profit of INR0.63 crore on an operating income
of INR37.35 crore for the year ended March 31, 2014 as compared to
net profit of INR0.79 crore on an operating income of INR23.79
crore for the year ended March 31, 2013.
KANCHAN EXPORTS: CRISIL Suspends D Rating on INR56MM Bank Loan
--------------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of
Kanchan Exports (KE).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 20 CRISIL D Suspended
Proposed Long Term
Bank Loan Facility 56 CRISIL D Suspended
Working Capital
Demand Loan 4 CRISIL D Suspended
The suspension of ratings is on account of non-cooperation by KE
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, KE is yet to
provide adequate information to enable CRISIL to assess KE's
ability to service its debt. The suspension reflects CRISIL's
inability to maintain a valid rating in the absence of adequate
information. CRISIL considers information availability risk as a
key credit factor in its rating process and non-sharing of
information as a first signal of possible credit distress, as
outlined in its criteria 'Information Availability Risk in Credit
Ratings'
KE was established as a proprietorship firm in 2003 by Mr. Dev
Kumar. It trades in paddy and rice. KE's office is in Narela
(Delhi).
KINGFISHER: Fined For 'Duping' Fliers To Take Low-Cost Flight
-------------------------------------------------------------
The Times of India reports that the National Consumer Disputes
Redressal Commission on April 9 ordered the defunct Kingfisher
Airlines to deposit INR25 lakh in the Consumer Welfare Fund of the
Government of India as fine for making fliers take the low-cost
airline, Deccan, after taking payments for the premier-service
airline (Kingfisher).
The report says the order follows a complaint filed by a Delhi
lawyer, J K Mittal, and an NGO, Consumer Voice, in 2008. "We also
direct that one copy each of this order be sent to the Director
General, Civil Aviation, and the Secretary to Government of India,
Department of Civil Aviation, to consider taking adequate steps to
ensure that such unfair means and practices are not adopted by
other airlines operating from India," the commission said, TOI
relays.
The report relates that while asking the airline to pay the lump
sum amount, the commission said, "Though, we do not know as to how
many tickets of the flights operated by airline in the aforesaid
manner, it cannot be disputed that the number of such tickets must
be very large. Though, it is not known how much amount it
collected from the fliers in the aforesaid manner, it can be
safely said it has to be (a) huge amount."
According to the report, the commission said that the fliers who
made the booking through the agents and the airline's website were
made to believe that they will get the services, including
facilities and amenities, which a premier airlines provides on its
flights. "It is on account of the aforesaid belief generated in
their minds due to the misleading statements contained on the
tickets, that they pay a price higher than the price charged by a
low-cost airline. Not only there is failure on the part of airline
to disclose the material facts to the flier, the statements
contained in the tickets are misleading and the impression given
to him is false. We therefore, hold that Kingfisher Airlines had
adopted unfair means and practices, while selling tickets of the
flights operated by Deccan Airlines from its website," the
commission, as cited by TOI, observed while finding the airline
guilty under the Consumer Protection Act.
In the complaint, Mittal cited his own experience, says TOI. He
had booked a Delhi to Bhubaneswar return flight for March 12, 2008
on the website of Kingfisher Airlines. When Mittal reached the
airport, he was told that the airline did not operate any flight
from Delhi to Bhubaneswar and he was directed to take the low-cost
airline flight. On return from Bhubaneswar to Delhi, Mittal was
once again issued a boarding pass for the low-cost airline despite
the fact that his booked ticket had cited a Kingfisher Airline
flight, the report states.
TOI notes that the airlines claimed that as part of its business
endeavour, Kingfisher Airlines offered the facility of booking
certain flights operated by Deccan Airlines, for the routes on
which it did not operate. The report relates that the airlines
further claimed that it made explicitly clear at the time of
booking that the flight would be operated by Deccan Airlines. As
regards to the flight fare, it stated that the price of the ticket
is related to the time when the booking is made, adds TOI.
About Kingfisher Airlines
Headquartered in Mumbai, India, Kingfisher Airlines --
http://www.flykingfisher.com/-- formerly known as Deccan
Aviation Ltd., served about 35 domestic destinations with a fleet
of more than 40 aircraft, including Airbus jets and ATR 72
turboprops.
As reported in the Troubled Company Reporter-Asia Pacific on
Jan. 15, 2014, Bloomberg News said Kingfisher has grounded planes
since October 2012. The airline lost its operating license in
January last year after failing to convince authorities it
has enough funds to restart flights.
The airline defaulted on payments to lessors, creditors and
airports as losses widened amid rising fuel costs and competition.
According to Bloomberg News, Mr. Mirpuri said in an e-mail on
January 13 the airline continues its efforts to recapitalize and
restart services.
As reported in the TCR-AP on Jan. 27, 2014, CRISIL's ratings on
bank loan facilities of Kingfisher Airlines Ltd continue to
reflect delays by KFAL in servicing its debt; the delays have been
caused by the company's weak liquidity and continued losses at the
operating level. Losses in the past six years have resulted in a
complete erosion of KFAL's net worth, leading to its weak
financial risk profile.
For 2012-13 (refers to financial year, April 1 to March 31),
KFAL reported a net loss of INR83.5 billion (INR23.3 billion for
2011-12) on net sales of INR5 billion (INR54.85 billion). For the
six months ended September 30, 2013, it reported a net loss of
INR18.72 billion (INR14.04 billion for the corresponding period
of 2012-13) on net revenues of INR0.0 (INR5.01 billion).
KLAUS WAREN: CRISIL Reaffirms D Rating on INR200MM Cash Credit
--------------------------------------------------------------
CRISIL's ratings on the bank facilities of Klaus Waren Fixtures
Pvt Ltd (KWFPL) continue to reflect instances of delays by KWFPL
in servicing its term debt; the delays have been caused by KWFPL's
weak liquidity because of its large working capital requirements.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 200 CRISIL D (Reaffirmed)
Letter of Credit 30 CRISIL D (Reaffirmed)
Proposed Long Term
Bank Loan Facility 20 CRISIL D (Reaffirmed)
Term Loan 15.2 CRISIL D (Reaffirmed)
KWFPL has a below-average financial risk profile, marked by high
gearing and weak debt protection metrics, modest scale of
operations, and large working capital requirements. However, the
company benefits from its promoters' extensive experience in the
bathroom fittings industry.
KWFPL based in Mumbai was promoted by Dr. N M Shah and his family.
It is engaged in manufacturing of bathroom fittings made of brass
and is marketed under the brand name of 'Aquel'. The company has
its unit based in Bhuj (Gujarat).
KRIPTON CERAMIC: CARE Reaffirms B Rating on INR9.05cr LT Loan
-------------------------------------------------------------
CARE reaffirms the ratings assigned to the bank facilities of
Kripton Ceramic Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 9.05 CARE B Reaffirmed
Short-term Bank Facilities 1.16 CARE A4 Reaffirmed
Rating Rationale
The ratings assigned to the bank facilities of Kripton Ceramic
Private Limited (KCPL) are constrained primarily on account of its
presence in the highly competitive and fragmented ceramics
industry, susceptibility of profitability to the volatility
associated with the raw material and fuel prices. The
reaffirmation of the ratings factor in the stabilization of
operation with moderate operating income during FY15 (provisional;
refers to the period April 1 to March 31).
The above constraints outweigh the benefits derived from the
promoters' experience in the ceramic industry and location
advantage in terms of presence in the ceramic tile hub resulting
in easy accessibility to the raw material and fuel.
The ability of KCPL to increase the scale of operations and
managing raw material price volatility risk and working capital
requirement are the key rating sensitivities.
Incorporated in the year 2013, KCPL is set up to manufacture
glazed ceramic tiles. KCPL is promoted by two promoters namely Mr
Dharmeshbhai Kanjiya and Mr Rajeshbhai Patel who look after the
entire operations of the company. KCPL has successfully
implemented greenfield project for manufacturing glazed ceramic
wall tiles with an installed capacity of 30,000 metric tonnes per
annum (MTPA) at its facilities located at Morbi in Rajkot district
which is the ceramic tile manufacturing hub of Gujarat and started
commercial production from April, 2014.
As per the provisional results for FY15, KCPL registered a
turnover of INR24 crore.
M D AGRO: CRISIL Suspend B+ Rating on INR250MM Cash Loan
--------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of
M D Agro Foods (MDAF).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 250 CRISIL B+/Stable Suspended
The suspension of ratings is on account of non-cooperation by MDAF
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, MDAF is yet to
provide adequate information to enable CRISIL to assess MDAF's
ability to service its debt. The suspension reflects CRISIL's
inability to maintain a valid rating in the absence of adequate
information. CRISIL considers information availability risk as a
key credit factor in its rating process and non-sharing of
information as a first signal of possible credit distress, as
outlined in its criteria 'Information Availability Risk in Credit
Ratings'
MDAF was established in Karnal (Haryana) in 2009. The firm mills
and processes basmati rice. MDAF commenced commercial operations
in January 2010, and is owned and managed by Mr. Ajay Kumar and
Mr. Praveen Kumar.
M.S.P. TYRES: CRISIL Assigns B Rating to INR65MM Cash Credit
------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable' rating to the bank
facilities of M.S.P. Tyres (MSP).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 65 CRISIL B/Stable
The rating reflects MSP's below-average financial risk profile
marked by a modest net worth, high total outside liabilities to
tangible net worth (TOLTNW) ratio and weak debt protection
metrics. The rating also reflect MSP's modest scale of operations
in the intensely competitive tyre trading industry resulting in
subdued profitability. These rating weaknesses are partially
offset by the benefits that MSP derives from its promoters'
extensive industry experience and their established supplier
relationships.
Outlook: Stable
CRISIL believes that MSP will continue to benefit over the medium
term from its promoters' extensive industry experience. The
outlook may be revised to 'Positive' in case of a substantial
increase in the firm's profitability, leading to a better
financial risk profile. Conversely, the outlook may be revised to
'Negative' if cash accruals decline most likely due to
deterioration in its scale of operations, or its working capital
cycle elongates leading to weakening of its liquidity.
Incorporated in 2000 as a partnership firm, MSP is engaged in
trading of tyres of two wheelers, four wheelers and commercial
vehicles. The firm has 6 retail outlets located in Namakkal,
Karoor and Dharmapuri districts of Tamil Nadu. The firm is managed
by the managing partner, Mr. Subramanian.
MSP reported a profit after tax (PAT) of INR 2.1 million on
operating income of INR 420 million for 2013-14 (refers to
financial year, April 1 to March 31), against a PAT of INR0.3
million on operating income of INR422.7 million for 2012-13.
MANSA DEVI: CRISIL Suspends B Rating on INR160MM Cash Credit
------------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of
Mansa Devi Rice Mills (MDRM).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 160 CRISIL B/Stable Suspended
Proposed Long Term
Bank Loan Facility 8.2 CRISIL B/Stable Suspended
Term Loan 4.2 CRISIL B/Stable Suspended
The suspension of ratings is on account of non-cooperation by MDRM
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, MDRM is yet to
provide adequate information to enable CRISIL to assess MDRM's
ability to service its debt. The suspension reflects CRISIL's
inability to maintain a valid rating in the absence of adequate
information. CRISIL considers information availability risk as a
key credit factor in its rating process and non-sharing of
information as a first signal of possible credit distress, as
outlined in its criteria 'Information Availability Risk in Credit
Ratings'
Set up in 1982 by its partners, Mr. Raj Kumar and Mr. Ved Prakash,
MDRM processes basmati rice and sells it in the domestic market.
METALOGICS SYSTEMS: CRISIL Suspends D Rating on INR75MM Loan
------------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of
Metalogics Systems Pvt Ltd (MSPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 10 CRISIL D Suspended
Cash Credit 75 CRISIL D Suspended
Export Packing Credit 35 CRISIL D Suspended
Term Loan 55 CRISIL D Suspended
The suspension of ratings is on account of non-cooperation by MSPL
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, MSPL is yet to
provide adequate information to enable CRISIL to assess MSPL's
ability to service its debt. The suspension reflects CRISIL's
inability to maintain a valid rating in the absence of adequate
information. CRISIL considers information availability risk as a
key credit factor in its rating process and non-sharing of
information as a first signal of possible credit distress, as
outlined in its criteria 'Information Availability Risk in Credit
Ratings'
MSPL, incorporated in July 1997, is based in Kolkata (West
Bengal). It has been providing software services since the past 12
years. The company's promoters, Mr. Arup Dasgupta and Mr. Ansuman
Bhattacharya, have combined experience of over two decades in
similar lines of business. MSPL has an established market position
in the niche legacy application modernisation, software
application migration, and software automation domain. MSPL is an
ISO 9001:2000 certified company. It also has ISO 27001:2005 (BS
7799) certification for information security management systems.
MITTAL INFRASTRUCTURE: CRISIL Reaffirms B Rating on INR60MM Loan
----------------------------------------------------------------
CRISIL's ratings on the bank facilities of Mittal Infrastructure
Pvt Ltd (MIPL) continue to reflect MIPL's average financial risk
profile marked by a modest net worth and average debt protection
metrics.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 20 CRISIL A4 (Reaffirmed)
Cash Credit 60 CRISIL B/Stable (Reaffirmed)
Proposed Bank
Guarantee 20 CRISIL B/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility 20 CRISIL B/Stable (Reaffirmed)
The ratings also factor in the high customer concentration in the
company's revenue profile, and its modest scale and working
capital intensive operations. These rating weaknesses are
partially offset by the extensive industry experience of MIPL's
promoters and the funding support it receives from them.
Outlook: Stable
CRISIL believes that MIPL will continue to benefit over the medium
term from the extensive industry experience of its promoters;
however, its liquidity is expected to remain constrained over this
period because of its large working capital requirements. The
outlook may be revised to 'Positive' if the company's liquidity
improves, most likely through equity infusion or higher-than
expected and sustainable profitability. Conversely, the outlook
may be revised to 'Negative' in case its working capital
requirements increase substantially due to delays in project
execution or realisation of payments, resulting in weak financial
risk profile, particularly liquidity.
Update
MIPL is estimated to register revenue of INR242 million in 2014-15
(refers to financial year, April 1 to March 31) as against INR240
million in the previous year. Furthermore, its revenue growth is
expected to remain subdued over the medium term due to muted
industry demand scenario resulting in slower flow of orders. It
has moderate order book of INR260 million to be executed over the
medium term. MIPL's operating margin is estimated to remain
moderate at about 10 per cent in 2014-15; CRISIL expects MIPL's
margin to remain in the range of 10 to 11 per cent over the medium
term.
MIPL continues to have below-average financial risk profile,
marked by a modest net worth, and moderate gearing which are
estimated to be at INR60 million and 1.48 times, respectively, as
on March 31, 2015. Furthermore, its debt protection metrics are
expected to remain average with interest coverage and net cash
accruals to total debt (NCATD) ratios of about 2 and 0.11 times
respectively, in 2014-15. The firm's liquidity is expected to
remain stretched with modest estimated cash accruals of INR 9.3
million in 2014-15. Also, due to working capital intensive nature
of the business, its bank limits are utilised at an average 99 per
cent in the 11 months through February 2015. CRISIL believes that
MIPL's liquidity will remain stretched over the medium term on
account of its modest cash accruals and large working capital
requirements.
MIPL was incorporated in 2004, promoted by the Mittal family of
Pune (Maharashtra). The company, registered as a Class A
government contractor, is engaged in civil works for government
entities such as the Indian Railways, semi government entities
such as Hindustan Aeronautics Ltd and Bharat Electronics Ltd, and
private entities such as educational trusts and manufacturing
companies.
NAMPA ELECTRICALS: CRISIL Suspends D Rating on INR351MM Loan
------------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of
Nampa Electricals Pvt Ltd (NEPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 40 CRISIL D Suspended
Cash Credit 110 CRISIL D Suspended
Proposed Long Term
Bank Loan Facility 351 CRISIL D Suspended
Term Loan 49 CRISIL D Suspended
The suspension of ratings is on account of non-cooperation by NEPL
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, NEPL is yet to
provide adequate information to enable CRISIL to assess NEPL's
ability to service its debt. The suspension reflects CRISIL's
inability to maintain a valid rating in the absence of adequate
information. CRISIL considers information availability risk as a
key credit factor in its rating process and non-sharing of
information as a first signal of possible credit distress, as
outlined in its criteria 'Information Availability Risk in Credit
Ratings'
NEPL was established in October 2005 by Mr. Manoj Kumar Singh and
his family members. The company undertakes railways and rural
electrification as well as installation and erection of power
tower lines and substations. It also manufactures and galvanises
structural products.
NUCIFERA RENEWABLE: ICRA Assigns 'SP 3D' Grading
------------------------------------------------
ICRA has assigned 'SP 3D' grading to Nucifera Renewable Energy
Systems (NRES), indicating 'Moderate Performance Capability' and
'Weak Financial Strength' of the channel partner to undertake off-
grid solar projects. The grading is valid till March 22, 2017
after which it will be kept under surveillance.
Grading Drivers
Strengths Long track record of the proprietor with established
technical competence in the solar space and also in the advisory
role for developers, regulators and financial institutions The
prospect of growth and favourable outlook in the solar industry
assisted by the favourable government policies
Risk Factors Modest financial profile as characterized by moderate
scale of operations, low net-worth and high TOL/TNW Limited
installations in Solar photovoltaic space Large number of
organized/unorganized players indicating high level of competition
may lead to pressure on margins
Fact Sheet
Year of Establishment
1987
Corporate Office
Nalanda Convent Road, Raghavendra Nagar, Tumkur, Karnataka-572102
Proprietor
Mr. M. R. Shiva Kumar Swamy
Nucifera renewable energy started in 1987 at Tiptur and was
initially engaged in producing highly efficient portable chulhas.
In 1988 the firm was engaged in the manufacturing of solar cooker,
solar water heater systems along with improved chulhas. In 1989
the factory was shifted to Bangalore for manufacturing of solar
thermal and solar photo voltaic lighting systems and in the same
year the firm opened a foundry at Sunkadakatte Bangalore. From
1997 onwards, the second unit was started in Tumkur for
manufacturing of solar thermal, solar photo voltaic products.
SI Related Business - Moderate Performance
Proprietor Track Record: The proprietor of the company, Mr. M. R.
Shiva Kumar Swamy has more than 26 years of experience in the
solar industry. His experience encompasses all phases of product
development, marketing sales for manufacturing energy saving
devices. He was instrumental in establishing the firm and has led
the firm into manufacturing and marketing of solar thermal and PV
products.
Technical competence and adequacy of manpower: NRES have in-house
design and installation teams which look into the various
technical aspects of manufacturing, installation and post
installation services. The company has experienced and highly
qualified management team who look after project management, sales
and marketing activities. The technical competence of NRES is
provided by a team of personnel including science graduates and
technicians who have practical and industrial experience. The
technical competence is adequate as represented by positive
feedback from the customers. The firm at present employs around 11
skilled employees and all the employees has been employed in
various divisions on a permanent basis. The team members of NRES
are well trained for the design and assembling of solar PV &
thermal systems and providing O&M services. The employee base for
the company is adequate with the size of operations for the firm.
Quality of suppliers and tie ups: The firm procures materials like
inverters, batteries, structures, cables, toughened glass etc for
the installation of its solar PV and thermal systems. The firm has
a rigorous process for choosing the suppliers indicating their
highest level of commitment to best quality delivery. The firm
shortlists the suppliers based on product certifications, quality
parameters and the service levels which suppliers can provide.
Customer and O&M Network: The firm execute most of the sales in
photovoltaic through their direct channels. The firm's clientele
include mostly domestic users and some institutional clients like
educational institutions and healthcare facilities. The firm has a
dedicated O&M team of 5 engineers. The firm has in house
operations and maintenance capabilities and provides optional
AMC's to all its institutional customers and also offers one to
five years of manufacturer's warranty to them.
Financial Strength - Weak
Revenues: Revenues of INR3.36 crore in FY14
Return on Capital Employed (RoCE): 22.66% in FY14
Total Outside Liabilities/Tangible Net worth: 4.02 times
Interest Coverage Ratio: 2.09 times
Net-Worth: INR 0.47 crore of firm
Current Ratio: 1.35 times
Relationship with bankers:
Bankers are satisfied with firm's conduct
The overall financial profile of the firm is Weak
PARTH THREAD: CRISIL Suspends B+ Rating on INR92.8MM Term Loan
--------------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of
Parth Thread Pvt Ltd (PTPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 55 CRISIL B+/Stable Suspended
Term Loan 92.8 CRISIL B+/Stable Suspended
The suspension of ratings is on account of non-cooperation by PTPL
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, PTPL is yet to
provide adequate information to enable CRISIL to assess PTPL's
ability to service its debt. The suspension reflects CRISIL's
inability to maintain a valid rating in the absence of adequate
information. CRISIL considers information availability risk as a
key credit factor in its rating process and non-sharing of
information as a first signal of possible credit distress, as
outlined in its criteria 'Information Availability Risk in Credit
Ratings'
PTPL was set up by Mr. Ambika Prasad Pandey and his family members
in 2005; it commenced operations in September 2009. The company
manufactures cotton yarn and polyester yarn at its facility at
Faizabad (Uttar Pradesh).
PUNJAB BIOMASS: CARE Ups Rating on INR31.78cr Term Loan to BB-
--------------------------------------------------------------
CARE revises rating assigned to various bank facilities of
Punjab Biomass Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 31.78 CARE BB- Revised from
(Term Loan) CARE D
Long-term Bank Facilities 11.95 CARE BB- Revised from
(Fund-based) CARE D
Rating Rationale
The revision in the rating of Punjab Biomass Power Ltd (PBPL)
factors regularization of debt servicing since January 2014,
financial support extended by promoter IL&FS Renewable Energy
Limited (IREL) to carry out necessary plant modifications to
achieve stable operating performance and meet the debt servicing
obligations. The rating also factors in increase in tariff and
favourable cost structure for the project which would translate
into moderate debt coverage indicators.
The rating, however, continues to be tempered due to inconsistent
operational track record (though the same has improved in past few
months post necessary modifications in plant), high working
capital intensity due to seasonal availability of raw material and
weak financial profile of off-taker Punjab State Power Corporation
Limited (PSPCL).
The ability of the company to operate the power plant efficiently
and improve the operating levels, sell power at remunerative
tariff and continued availability of biomass (paddy straw) at
viable prices are the key rating sensitivities.
PBPL, a joint venture (JV) between Bermaco Energy Systems Ltd.
(BESL) and IL&FS Renewable Energy Limited (IREL), has setup a 12-
MW biomass-based (paddy straw) power plant in District Patiala,
Punjab. The plant achieved the commercial operations in June 2010.
PUSHTI ENTERPRISE: CARE Assigns B+ Rating to INR7cr LT Loan
-----------------------------------------------------------
CARE assigns 'CARE B+' rating to the bank facilities of Pushti
Enterprise.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 7 CARE B+ Assigned
Rating Rationale
The rating assigned to the bank facilities of Pushti Enterprise
(PE) is primarily constrained on account of implementation risk
associated with the ongoing project and low booking status and low
receipt of booking advances against the same. The rating also
factors in the inherent risk associated with the cyclical real
estate industry coupled with partnership nature of business
operations.
These constraints outweigh the benefits derived from the
experience of the partners in the real estate industry.
The ability of PE to complete its ongoing project within envisaged
timeline and sale of its units at envisaged prices along with
timely realisation of sales proceeds is the key rating
sensitivity.
Valsad-based (Gujarat), PE was established as a partnership firm
in September 11, 2010. PE's partners through their associate
concerns in past have executed various projects regarding
residential and commercial projects. PE is engaged in the real
estate development and is currently executing its residential cum
commercial project named 'Vallabh Heights' at Valsad, Gujarat. It
comprises of a 10 storied building (Ground floor (shop) + 1st
floor (office) + Next 9 floors (residential flats). There will be
two wings, ie, wing B and wing C only. Wing B comprises of 13
shops on ground floor, 13 offices on 1st floor and 1flat on 1st
floor and 5 flats each on 2nd floor to 9th floor (total 41 flats
in Wing B). Wing C comprises 13 shops on ground floor, 13 offices
on 1st floor and 4 flats on 1st floor and 8 flats each on 2nd
floor to 9th floor (total 68 flats in Wing C). Total saleable area
of Wing B and Wing C will be 122,987 sqfts wherein shops will
comprise 9,418 sqfts, for offices 9,550 sqfts and for residential
flats of 104,019 sqfts. PE has received approvals for land and
other relevant clearances for the project.
R. J. AGRO: ICRA Reaffirms B Rating on INR6cr Cash Credit
--------------------------------------------------------
ICRA has reaffirmed its rating of [ICRA]B on the INR6.00 crore
fund-based cash credit facility of R. J. Agro Industries.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 6.00 [ICRA]B; reaffirmed
The rating reaffirmation takes into consideration the firm's small
scale of operations, low profitability and the highly working
capital intensive nature of operations with high inventory levels
which lead to stretched liquidity and adverse capital structure.
The rating continues to be constrained by the vulnerability of
profitability to raw material price movements, which are subject
to seasonality and crop harvest and the intensely competitive
nature of the industry which exerts pressure on the operating
margins. The rating also takes note of the risks inherent in
partnership firm like limited ability to raise capital, risk of
dissolution due to the death, insolvency and retirement etc of the
partners. However, the rating favourably takes into account the
extensive experience of the management in the rice industry and
the favourable long term demand prospects of the rice industry
with India being the second largest producer and consumer of rice
in the world. Going forward, the firm's ability to increase its
scale of operations in a profitable manner along with efficient
management of working capital will remain the key rating
sensitivities.
RJAI was started as partnership firm in 1995 by Mr. Brij Lal Garg
along with his family members. The firm is involved in the milling
and trading of basmati and non basmati rice. The processing
facility of the firm is located in Cheeka (Kaithal), Haryana and
has a milling capacity of 2 MTPH.
Recent Result
In 2013-14, RJAI recorded a net profit of INR0.02 crore on an
operating income of INR29.28 crore, as against a net profit of
INR0.01 crore on an operating income of INR22.81 crore in
2012-13.
RC GOLDEN: CARE Reaffirms B+ Rating on INR0.09cr LT Bank Loan
-------------------------------------------------------------
CARE reaffirms the ratings assigned to the bank facilities of
RC Golden Granites Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 0.09 CARE B+ Reaffirmed
Short term Bank Facilities 9.10 CARE A4 Reaffirmed
Rating Rationale
The ratings of RC Golden Granites Private Limited (RCG) continue
to be constrained by the company's small scale of operation; weak
financial risk profile marked by high gearing and stressed
liquidity position owing to an elongated operating cycle. The
ratings are also constrained by the dependence on a single client,
exposure to intense competition in the granite monument export
market and susceptibility of profit margins to volatility in the
foreign exchange rates.
The ratings, however, favourably take into account the experience
of the promoter and the company's presence in the select business
space of supplying monuments. The ratings factor in the modest
growth in revenues in FY14 (refers to the period April 1 to
March 31) albeit accompanied by decline in profitability.
Going forward, improvement in the company's liquidity position and
the overall financial risk profile along with diversification in
the client base will be the key rating sensitivities. Furthermore,
timely completion of the solar power plant without any cost
overruns will also be crucial from the credit perspective.
RCG was incorporated in 2006 by Mr R Chandrasekaran. The company
makes monuments out of granite & export. The manufacturing
facility, with an installed capacity of 40,000 square meters (Sq.
Mt) is located at Uthiramerur in Kanchipuram District of Tamil
Nadu. The Company is a 100% Export Oriented Unit (EOU) and exports
to Netherlands and US. The promoter has been in the business since
1987.
RCG has achieved a PAT of INR0.65 crore on a total operating
income of INR14.91 crore in FY14as compared with a PAT of INR0.58
crore on a total operating income of INR13.49 crore in FY13.RCG
has achieved a PAT of INR0.43 crore on a total operating income of
INR11.10 crore in 9MFY15.
RAUNAQ ICE: CARE Reaffirms B Rating on INR0.17cr Bank Loan
----------------------------------------------------------
CARE reaffirms the ratings assigned to bank facilities of
Raunaq Ice & Cold Storage.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 0.17 CARE B Reaffirmed
Short term Bank Facilities 11.25 CARE A4 Reaffirmed
Rating Rationale
The ratings assigned to the bank facilities of Raunaq Ice & Cold
Storage (RICS) continue to remain constrained on account of the
modest scale of operations, thin profitability, highly leveraged
capital structure, weak debt coverage indicators and weak
liquidity position with elongated operating cycle. The ratings
also take into consideration its constitution as a partnership
firm and presence in a highly fragmented seafood industry marked
by dependence on government policies.
The ratings, however, continue to derive strength from experienced
promoters and long track record of two decades in the seafood
industry. The reaffirmation of ratings factor in tepid growth in
operating income and improvement in capital structure during FY14
(refers to the period April 1 to March 31).
The ability of RICS to increase its scale of operations, improve
its profitability and capital structure while efficiently managing
its working capital requirements are the key rating sensitivities.
RICS was established as a partnership firm in 2008 by the
Khetalpar family of Mangrol (Gujarat). Headed by Mr Naranbhai
Khetalpar and his brother, Mr Hirabhai Khetalpar, the firm is
engaged in the export of seafoods such as squid, ribbon fish,
cuttlefish and shrimp primarily to USA, China, Europe and Middle-
East. The firm has a processing facility at Mangrol with an
installed capacity of 40 tonnes per day for processing of seafood
and a cold storage facility with a capacity of 1750 tonnes per day
for preserving processed seafood.
During FY14, RICS reported a a PAT of INR0.09 crore on a total
operating income (TOI) of INR37.89 crore as against a PAT of
INR0.07 crore on a TOI of INR36.43 crore in FY13.
RAVINDRA RICE: ICRA Reaffirms B+ Rating on INR14.5cr FB Loan
------------------------------------------------------------
ICRA has re-affirmed [ICRA]B+ rating for INR14.50 crore (enhanced
from INR12.00 crore) bank lines of Ravindra Rice & General Mills.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based Limits 14.50 [ICRA]B+ (re-affirmed)
The rating continues to be constrained by RRM's presence in a
highly competitive nature of the industry, its moderate scale of
operations, weak profitability metrics, high gearing level and
consequently weak debt protection indicators. The rating is also
constrained by its stretched liquidity position as reflected by
consistently high working capital limits utilization arising out
of high inventory holding period and risks inherent in a
partnership firm like limited ability to raise equity capital,
risk of dissolution due to death/retirement/insolvency of partners
etc. However, the ratings favorably factor in RRM's experienced
promoters with long track record in rice milling industry.
Ravindra Rice & General Mills is a partnership firm promoted by
Mr. Ravindra and his family members. The firm is primarily engaged
in milling of basmati rice. The firm is also engaged in converting
semi processed rice into parboiled Basmati rice. RRM's milling
unit is based out of Jalalabad, Distt. Ferozpur, Punjab which is
in close proximity to the local grain market.
Recent Results
During the financial year 2013-14, the firm reported a profit
after tax (PAT) of INR0.20 crore on an operating income of
INR30.45 crore as against PAT of INR0.09 crore on an operating
income of INR26.92 crore in 2012-13.
RAWALWASIA STEEL: CRISIL Assigns B+ Rating to INR120MM Cash Loan
----------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-term
bank facility of Rawalwasia Steel Plant Pvt Ltd (RSPPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 120 CRISIL B+/Stable
The rating reflects RSPPL's below-average financial risk profile,
marked by a modest net worth, high gearing, and average debt
protection metrics. The rating also factors in the company's
working-capital-intensive operations, modest operating
profitability, and susceptibility to intense competition in the
steel pipes industry. These rating weaknesses are partially offset
by the extensive industry experience of RSPPL's promoters and the
funding support it receives from them through unsecured loans.
Outlook: Stable
CRISIL believes that RSPPL will continue to benefit over the
medium term from its promoters' extensive industry experience. The
outlook may be revised to 'Positive' if RSPPL's financial risk
profile, particularly its liquidity, improves, most likely driven
by substantial cash accruals or by infusion of sizeable equity by
its promoters. Conversely, the outlook may be revised to
'Negative' if the company's financial profile, particularly its
liquidity, deteriorates due to large working capital requirements
or debt-funded capital expenditure.
RSPPL, incorporated in 1989, manufactures galvanised steel pipes
and tubes, Electric resistance welding (ERW) black pipes, and hot-
rolled steel strips. Its manufacturing facility in Hisar (Haryana)
has an installed capacity of about 15,000 tonnes per annum.
Currently, the plant is operating at 60 to 62 per cent utilisation
levels. The company is promoted by Mr. Dinesh Aggarwal along with
his family members.
REALTRACK WIRE: CRISIL Assigns B Rating to INR102.3MM LT Loan
-------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable/CRISIL A4' ratings to the
bank facilities of Realtrack Wire Industries Pvt Ltd (RWIPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Long Term Loan 102.3 CRISIL B/Stable
Corporate Loan 15 CRISIL B/Stable
Bank Guarantee 7.5 CRISIL A4
Cash Credit 20 CRISIL B/Stable
The ratings reflect the company's modest scale of operations in
the highly competitive steel wire industry and its large working
capital requirements. These rating weaknesses are partially offset
by the extensive experience of the company's promoters in the
steel wire industry.
Outlook: Stable
CRISIL believes that RWIPL will maintain its business profile
backed by its promoter's extensive experience in steel wire
industry. The outlook may be revised to 'Positive' if there is a
sustained and substantial increase in scale of operations and
profitability leading to better than expected cash accruals or if
the firm improves its working capital management or the promoters
infuse equity leading to improvement in its capital structure.
Conversely, the outlook may be revised to 'Negative' if the
company reports lower than expected accruals due to decline in
revenues or profitability level, or if the company's working
capital requirement deteriorates leading to deterioration in
liquidity profile of the firm or if the firm undertakes any debt
funded capex.
Incorporated in 2011, RWIPL is promoted by Ahmedabad (Gujarat)-
based Mr. Tushar Shah and Mr. Vipul Shah. The company engaged in
manufacturing various types of steel wires from wire rods. It
began commercial operations in June 2013.
RELIANCE CELLULOSE: CRISIL Reaffirms D Rating on INR185MM Loan
--------------------------------------------------------------
CRISIL's ratings on the bank facilities of Reliance Cellulose
Products Ltd (RCPL) continue to reflect instances of delay by RCPL
in servicing its term debt and its overdrawn working capital
limits.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 5 CRISIL D (Reaffirmed)
Cash Credit 180 CRISIL D (Reaffirmed)
Letter of Credit 30 CRISIL D (Reaffirmed)
Term Loan 185 CRISIL D (Reaffirmed)
The delays have been caused by the company's weak liquidity. Its
liquidity has weakened because of stretch in its working capital
cycle. These rating weaknesses are partially offset by the
benefits that RCPL derives from the extensive experience of its
promoters in the cellulose industry.
RCPL, set up in 1978 by Mr. Shyam Sunder Jhunjhunwala,
manufactures cellulose and its derivatives. Currently, RCPL is
managed by Mr. S S Jhunjhunwala, who is the chairman and managing
director, and his son, Mr. AK Jhunjhunwala, who is the executive
director.
For 2013-14 (refers to the financial year April 1 to Mach 31),
RCPL reported a net loss of INR209 million on a net sales of
INR188 million against a profit after tax (PAT) of INR2.5 million
on net sales of INR689 million for 2012-13.
ROOPLAXMI INDUSTRIES: ICRA Reaffirms B- Rating on INR5cr Loan
-------------------------------------------------------------
ICRA has reaffirmed the long term rating of [ICRA]B- assigned to
the INR5 crore cash credit facility and INR2.9 crore term loan of
Rooplaxmi Industries India Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 5.0 [ICRA]B- reaffirmed
Term Loan 2.9 [ICRA]B- reaffirmed
The reaffirmation of the rating takes into account RIIPL's weak
financial risk profile, characterized by low profitability from
the core operations, and depressed debt coverage indicators. ICRA
notes that although the company incurred operating losses in its
steel business in FY14, it was able to post net profits largely
driven by profits from trading activities. The rating also factors
in the vulnerability of profitability to adverse movement in raw
material prices, the highly competitive business environment
coupled with the non-integrated nature of operations of RIIPL that
keep margins under check and the company's exposure to the
cyclicality associated with the steel industry, which is passing
through a downturn at present. The rating also takes note of the
high capacity utilization over the last three years, with 98%
capacity utilization during 11M FY15 and the favourable location
of the manufacturing unit in Chhattisgarh, in close proximity to
raw material sources and key customers, thus reducing freight
costs. In ICRA's opinion, the ability of the company to improve
its profitability without significantly increasing its debt levels
shall remain a key rating sensitivity, going forward.
Incorporated in June 2011, RIIPL is engaged in the manufacturing
of ingots. The manufacturing facility is located in Raipur,
Chhattisgarh and has an annual production capacity of 30,000 MT of
MS ingots. The company is also engaged in trading of textile
products.
Recent Results
During FY14, RIIPL registered a profit after tax (PAT) of INR0.16
crore on the back of an operating income (OI) of INR102.41 crore
as against a PAT of INR0.54 crore on the back of an OI of INR99.57
crore during FY13.
S P DEVELOPERS: ICRA Assigns B Rating to INR2.75cr Loan
-------------------------------------------------------
ICRA has assigned its long term rating of [ICRA]B to the INR3.82
crore fund based facilities of S P Developers and Decorators. ICRA
has also assigned its short term rating of [ICRA]A4 to the INR3.18
crore non-fund based facilities of S P Developers and Decorators
(SPDD).
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based - OD 2.75 [ICRA]B; Assigned
Facility
Non Fund based 3.18 [ICRA]A4; Assigned
Facility
Un-Allocated Facility 0.07 [ICRA]B; Assigned
ICRA's ratings favorably factor in the extensive experience of the
promoters in the construction industry and the healthy revenue
visibility for the firm, with an Order Book to Operating Income
ratio of 7.6 times. The ratings also derive comfort from the
firm's moderate debt protection metrics with gearing at 0.4 times
as on FY 2014, DSCR of 2.11 times and interest coverage of 2.04
times. Further the ratings takes into account the firm's
association with public sector entities like National Buildings
Construction Corporation (NBCC) and IRCON International Ltd
(IRCON), which leads to limited counterparty risks and the
presence of price escalation clause across the firm's contracts
which help it manage price fluctuations for key raw materials.
The ratings however remain constrained on account of the modest
scale of operations of the firm. Notwithstanding its healthy
revenue visibility, the firm is exposed to concentration risk with
a single order accounting for around 48% of the pending order
book. Further, the ratings also factor in the firm's stretched
liquidity position owing to high working capital intensity with
NWC/OI of 41% in FY 2014, which has resulted in high utilization
of bank limits. This apart, the ratings factor in the sole
proprietorship constitution of the firm which exposes it to risks
like withdrawal of funds, risk of dissolution etc.
Going forward, the firm's ability to ramp up its operating scale
by executing its pending order book in a timely manner while
improving its liquidity position and debt protection metrics will
be the key rating sensitivities.
Incorporated in 1992, SPDD is a Chandigarh, Punjab, based
proprietorship firm. SPDD undertakes construction work for
commercial, industrial and infrastructure improvement, with focus
on fabricated steel structures. The firm undertakes construction
work for government organizations including IRCON, NHPC, Indian
Army, and various state government entities. Currently the firm is
undertaking construction work for Rail Over Bridges in Bihar,
suspension bridges in Uttarakhand, and a project on road and sewer
construction for a society in Punjab.
Recent Results
In 2013-14, SPDD had an operating income of INR10.36 crore on
which it earned a Profit after Tax (PAT) of INR0.25 crore, as
compared to an operating income of INR0.85 crore on which it
earned a PAT of INR0.07 crore in the previous year..
S.B. SYSCON: ICRA Suspends B+ Rating on INR12cr Bank Loan
---------------------------------------------------------
ICRA has suspended the [ICRA]B+ rating for the INR12 Crore bank
facilities of S.B. Syscon Pvt. Ltd. The suspension follows ICRA's
inability to carry out a rating surveillance in the absence of the
requisite information from the company.
SAHIBZADA TIMBER: CRISIL Suspends B Rating on INR150MM Cash Loan
----------------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of
Sahibzada Timber & Ply Pvt Ltd (STPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 150 CRISIL B/Stable Suspended
Letter of Credit 15 CRISIL A4 Suspended
The suspension of ratings is on account of non-cooperation by STPL
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, STPL is yet to
provide adequate information to enable CRISIL to assess STPL's
ability to service its debt. The suspension reflects CRISIL's
inability to maintain a valid rating in the absence of adequate
information. CRISIL considers information availability risk as a
key credit factor in its rating process and non-sharing of
information as a first signal of possible credit distress, as
outlined in its criteria 'Information Availability Risk in Credit
Ratings'
STPL was set up in 1992 as a proprietorship firm, Sahibzada Timber
and Ply, by Mr. Narinder Singh Sandhu; the firm was reconstituted
as a private limited company with the current name on June 30,
2012. The company processes and trades in timber logs. STPL is
promoted by the Sandhu family and has its head office at Mohali
(Chandigarh). The company's day-to-day operations are managed by
Mr. Sandhu and his son, Mr. Jaspratap Singh Sandhu.
SANT AUTOS: ICRA Assigns B+ Rating to INR6.0cr Cash Credit
----------------------------------------------------------
ICRA has assigned a long term rating of [ICRA]B+ to the INR6.00
crore cash credit facility of Sant Autos.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based - Cash Credit 6.00 [ICRA]B+ assigned
The assigned rating reflects SA's small scale of current
operations, a weak financial risk profile characterized by low
cash accruals, high gearing and depressed coverage indicators and
the high working capital intensity of operation due to higher
inventory holding requirements, which leads to pressure on the
liquidity position of the company, as reflected by high
utilization of working capital limits. The rating are also
constrained by thin margins on vehicles coupled with the slowdown
in the auto industry, the high geographical concentration risk, as
the operations are limited to the State of Jharkhand and SA's
constitution as a partnership firm exposing it to risks such as
the risk of capital withdrawal. The rating favourably takes into
account the experience of the promoters of around four decades in
the auto dealership business, established position of Mahindra and
Mahindra Limited (MML) in the commercial vehicle segment and the
diversified portfolio of the vehicles, ranging from light
commercial vehicle (LCV) to heavy commercial vehicle (HCV), which
provides cushion against business downturns in any single segment.
Going forward, the company's ability to increase the scale of
operation along with efficient management of working capital would
remain key rating sensitivities.
Incorporated in 2011 as a partnership firm, Sant Autos is engaged
in auto dealership of commercial vehicle of Mahindra and Mahindra
Limited (MML). The company operates through one showroom and
workshop in Jamshedpur, Jharkhand and deals primarily in HCV's,
and LCV's.
Recent Results
SA reported a net profit of INR0.10 crore on an OI of INR17.31
crore during FY14 as compared to the net profit of INR0.07 crore
on an OI of INR9.40 crore in FY13.
SARASWATI RICE: ICRA Reaffirms B Rating on INR12cr Long Term Loan
-----------------------------------------------------------------
ICRA has reaffirmed its long term rating of [ICRA]B on the
INR12.00 crore (enhanced from INR5.50 crore) long term fund based
limits of Saraswati Rice & Gen. Mills.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Fund 12.00 [ICRA]B; (reaffirmed)
Based Limits
The rating reaffirmation takes into account the elevated gearing
of the firm due to large working capital requirements, which have
been primarily funded by working capital borrowings. Also, the low
value added nature of operations and the intensely competitive
nature of the rice milling industry have led to low profitability
margins. The low margins coupled with the high gearing have
resulted in weak coverage indicators as reflected in low interest
coverage of 1.40 times during FY 2013-14. However, the ratings
favourably take into account the extensive experience of the
promoters and their strong relationships with several customers
and suppliers, coupled with proximity of the mill to major rice
growing areas, which results in easy availability of paddy.
SRGM was established in 1983 as a partnership firm by Mr. Pradeep
Kumar and Mr. Manoj Kumar. The firm is engaged in milling &
trading of basmati & non basmati rice. The firm milling unit is
based out of Karnal (Haryana) with an installed capacity of 2
ton/hr. Further in FY2014, the company has incurred capex of
INR2.87 crore to import a sortex machine & Paddy dryer machine
from England. The capex was funded by the new term loan of INR2.0
crore and balance through promoter's funds.
Recent Results
SRGM has reported a net profit of INR0.08 crore on an operating
income of INR33.86 crore in FY 2013-14 as compared to a net profit
of INR0.09 crore on an operating income of INR24.16 crore in the
previous year.
SEWRI ENGINEERING: CARE Revises Rating on INR4.95cr Loan to B+
--------------------------------------------------------------
CARE revises/reaffirms rating assigned to the bank facilities of
Sewri Engineering Company Pvt. Ltd.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 4.95 CARE B+ Revised from
CARE B
Short-term Bank Facilities 5.00 CARE A4 Reaffirmed
Rating Rationale
The revision in the long-term rating assigned to the bank
facilities of Sewri Engineering Company Pvt. Ltd. (SECPL) is on
account of increase in the scale of operations and moderate order
book position.
The ratings assigned continue to be constrained by the relatively
small scale of operations, low capitalization, working capital
intensive nature of operations leading to stretched capital
structure and operations in the highly competitive EPC industry
with inherent project execution risk.
The ratings continue to draw comfort from the promoters experience
in the construction industry.
SECPL's ability to successfully execute the projects without any
time or cost overrun along with efficient management of its
working capital cycle are the key rating sensitivities.
SECPL is registered as "Class I" Contractor with Public Works
Department of Government of Maharashtra and is engaged in
providing civil construction services for various government and
private organizations.
During the FY14 (refers to the period April 01 to March 31), SECPL
reported total operating income of INR20.47 crore (vis-a-vis
INR11.84 in FY13) and PAT of INR0.16 crore (vis-…-vis INR0.11
crore in FY13). Furthermore, during 9MFY15 (refers to the period
April 1, 2014 to December 31, 2014), SECPL has posted total income
of INR10 crore and has an order book position of INR42.22 crore.
SHIV-OM SULZ: CARE Assigns B+ Rating to INR8.25cr LT Loan
---------------------------------------------------------
CARE assigns 'CARE B+' rating to the bank facilities of
Shiv-Om Sulz Fab Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 8.25 CARE B+ Assigned
Rating Rationale
The rating assigned to the bank facilities of Shiv-Om Sulz Fab
Private Limited (SFPL) is primarily constrained on account of its
relatively modest scale of operations in the highly competitive
and fragmented textile industry and its financial risk profile
marked by moderate profitability, moderately leveraged capital
structure along with its weak debt coverage indicators and
stressed liquidity position. The rating is further constrained on
account of the susceptibility of the company's profitability to
fluctuations in the raw material prices.
The rating, however, derives strength from the long standing
experience of the promoters along with its established track
record of more than a decade in the textile industry and location
advantage by way of proximity to the raw material as well as
customers due to its presence in the textile cluster.
SFPL's ability to increase its scale of operations while
improving/ maintaining its profitability in light of the volatile
raw material prices and efficient management of working capital
are the key rating sensitivities.
Bhilwara-based (Rajasthan) SFPL was initially incorporated in 1999
as BSM Suitings Private Limited. Subsequently, in 2002, the name
of the company changed to present one. SFPL was promoted by Mr
Sheo Ratan Sadan along with his sons, Mr Vinit Kumar Bubna and Mr
Amit Bubna. SFPL is primarily engaged in the business of
manufacturing of cotton grey fabrics and also trades in cotton
grey and finished fabrics. The company outsources the processing
work required for the manufacturing of cotton finished fabrics on
job work basis to the nearby process house located at Bhilwara.
SFPL sells its fabrics under the brand name "Silver Ox". It
markets its product through agents and has 20 agents located all
over India to market its product.
Furthermore, during FY14 (refers to period April 1 to March), SFPL
undertook a debt funded capex at its sole manufacturing facility
located at Bhilwara, to replace 38 obsolete looms with 32 second
hand Air Jet looms bringing the total no of looms to 75 with an
installed capacity of around 60 Lakh Meters Per Annum (LMPA) at an
envisaged total cost of INR3.87 crore. However, there was a time
and cost overrun with SFPL completing the project in August, 2014
at an aggregate cost of INR4.36 crore, funded through a term loan
of INR2.25 crore, unsecured loans of INR1.27 core and the rest
through equity share capital and internal accrual.
During FY14, SFPL has reported a total operating income of
INR23.62 crore (FY13: INR22.43 crore) with PAT of INR0.25 crore
(FY13: INR0.11 crore). As per the provisional results of 11MFY15,
the company has earned a total operating income of INR24 crore.
SHREE BALA: CRISIL Assigns B+ Rating to INR250MM Cash Credit
------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-term
bank facility of Shree Bala Ji Rice & General Mills (SBRGM).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 250 CRISIL B+/Stable
The rating reflects SBRGM's working-capital-intensive operations,
weak financial risk profile, marked by a high gearing and weak
debt protection metrics. These rating weaknesses are partially
offset by the extensive industry experience of, and financial
support from, SBRGM's partners.
Outlook: Stable
CRISIL believes that SBRGM will continue to benefit from its
partners extensive experience in the rice industry. The outlook
may be revised to 'Positive' if SBRGM's financial risk profile
improves driven by higher than expected net cash accruals or
infusion of equity. Conversely, the outlook may be revised to
'Negative' if there is significant deterioration in the firm's
liquidity or capital structure or pressure on its profitability.
SBRGM was established in 2001 as a partnership firm by Mr. Mahavir
Parshad, Mr. Bharat Bushan and Mr. Ashwani Kumar in Fazilka,
Punjab. Firm is engaged in milling and marketing of rice; both
Basmati as well as non-basmati varieties. The firm derives more
than 80 per cent of its revenues from sales of basmati rice while
the rest comes from non-basmati variety. The firm has a milling
capacity of 8 tonne per hour (tph).
SBRGM reported a book profit of INR2.4 million on net sales of
INR600.7 million for 2013-14 (refers to financial year, April 1 to
March 31), against a PAT of INR1.7 million on net sales of
INR349.6 million for 2012-13.
SUNRISE HYGIENE: ICRA Reaffirms B Rating on INR5cr Cash Credit
--------------------------------------------------------------
ICRA has reaffirmed the [ICRA]B rating for the INR5.00 crore cash
credit facility, INR2.12 crore term loan and INR1.75 crore fund
based pledge facility of Sunrise Hygiene Flours Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term fund based- 5.00 [ICRA]B; reaffirmed
Cash Credit
Long term fund based- 2.12 [ICRA]B ;reaffirmed
Term loan
Long term fund based- 1.75 [ICRA]B; reaffirmed
Pledge facility under
tie up with NBHC with
NCMSL
The rating continues to be constrained by SHFPL's modest scale of
operations as well as limited track record of operations and weak
financial profile characterized by thin margins and stretched
capital structure given the debt funded capex as well as high
working capital borrowings. The rating also incorporates the
highly fragmented nature of grain processing industry which
results in intense competitive pressures and exposure of the
entity's profitability to agro-climatic risks and government
policies which impacts the availability and prices of raw
material.
The ratings however take comfort from the entity's diversified
customer base and the stable outlook for the entity's products in
the domestic market. The rating also positively considers SHFPL
foray into manufacturing of chakki fresh Atta which is likely to
be a major growth driver in the coming years.
Incorporated in the year 2010, Sunrise Hygiene Flours Private
Limited (SHFPL) is primarily engaged in the milling of wheat to
manufacture Maida, Atta, Suji, Rava and Bran. The company is
promoted by Mr. Jayendra Akbari along with other directors.
SHFPL's flour milling unit is located in Rajkot, Gujarat with a
milling capacity of 33,600 MTPA.SHFPL commenced commercial
production from December 2011. The company sells its products
under the brand name of "Shreematiji".
Recent Results
For the year ended March 31, 2014, SHFPL reported an operating
income of INR41.61 crore and profit after tax of INR0.05 crore.
SWAMINARAYAN COTTON: CARE Rates INR7.91cr LT Bank Loan at B+
------------------------------------------------------------
CARE assigns 'CARE B+' rating to the bank facilities of
Swaminarayan Cotton And Oil Industries.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 7.91 CARE B+ Assigned
Rating Rationale
The rating assigned to the bank facilities of Swaminarayan Cotton
and Oil Industries (SCOI) is primarily constrained on account of
its weak financial risk profile marked by thin profit margins,
moderately leveraged capital structure and moderate debt coverage
indicators. The rating is further constrained on account of its
short track record of operations, presence in highly fragmented
industry with limited value addition, susceptibility of profit
margins to fluctuation in cotton price, seasonality associated
with cotton industry, prices and supply of cotton being highly
regulated by government, its constitution as a partnership firm.
The rating, however, takes comfort from the experience of the
partners in the cotton industry and location advantage in terms of
proximity to cotton-growing belt of Gujarat.
The ability of SCOI to increase its scale of the operations along
with improvement in overall financial risk profile marked by
improvement in profit margins, capital structure and efficient
management of working capital requirements are the key rating
sensitivities.
Sabarkantha-based (Gujarat) SCOI was established during March 2012
as a partnership firm by eight partners. During September 2012,
two more partners were admitted to the partnership firm. SCOI is
engaged into the business of cotton ginning, pressing and crushing
of cotton seeds and it commenced commercial production from
February 2013 with FY14 (refers to the period April 1 to March 31)
as the first full year of the operations. While cotton bales are
used in the manufacturing of cotton yarn, cotton seeds are further
processed for the extraction of edible oil. SCOI operates from its
manufacturing facility located at Bayad (Gujarat) with an
installed capacity of 250 cotton bales per day, 80 metric tons per
day (MTPD) of cotton seeds and 10 MTPD of oil extraction as on
March 31, 2014.
During FY14, SCOI reported a total operating income (TOI) of
INR36.53 crore and PAT of INR0.19 crore as against a TOI of
INR4.96 crore and a PAT of INR0.03 crore during FY13. Furthermore,
as per the provisional results for 11MFY15 , SCOI registered a TOI
of INR22 crore.
TANTIA SANJAULIPARKINGS: CARE Reaffirms B+ Rating on INR25cr Loan
-----------------------------------------------------------------
CARE reaffirms the ratings assigned to the bank facilities of
Tantia Sanjauliparkings Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 25.0 CARE B+ Reaffirmed
Short-term Bank Facilities 2.0 CARE A4 Reaffirmed
Rating Rationale
The ratings assigned to the bank facilities of Tantia
Sanjauliparkings Pvt Ltd (TSPL) continue to remain constrained by
slow progress of the project, equity infusion pending from
promoters, inherent revenue risk associated with the rental income
from commercial space with pending rental tie-up and weak
financial risk profile of Tantia Constructions Limited (TCL), the
promoter. The ratings, however, derive strength from the
completion of the construction of parking facility. The ratings
continue to draw strength from the experience of TCL, fixed price
nature of the EPC contract, achievement of financial closure for
the debt portion of project cost and favourable demand for parking
facility.
Successful completion of the commercial complex and growth in
parking & rental income are the key rating sensitivities.
TSPL, incorporated in December 2010, is a special purpose vehicle,
formed to undertake development and operation of a car parking and
commercial facility in Sanjauli, Shimla. TCL, engaged in civil
construction activities, holds 100% stake in TSPL. TSPL entered
into a Concession Agreement with Municipal Corporation, Shimla, to
develop the parking complex on design, build, operate and transfer
(DBOT) basis for a period of 30 years. The scope of the project
also includes an option to develop a commercial facility on the
top of the parking complex. The estimated project cost of INR43.96
crore is being funded at a debt equity ratio of 1.32:1. TSPL has
spent INR33.88 crore (77% of the estimated project cost) towards
the project till Feb 17, 2015. The construction of the parking
facility was completed in March 2015 and the same is expected to
be operational by April 2015.
UB VENTURES: CRISIL Ups Rating on INR70MM Cash Loan to B+
---------------------------------------------------------
CRISIL has upgraded its rating on the long term bank facility of
UB Ventures Private Limited (UBPL) to 'CRISIL B+/Stable' from
CRISIL B-/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 70 CRISIL B+/Stable (Upgraded
from 'CRISIL B-/Stable')
Term Loan 63.7 CRISIL B+/Stable (Upgraded
from 'CRISIL B-/Stable')
The rating upgrade reflects improvement in UBPL's business risk
profile led by stabilization of operations in the newly
commissioned TMT Bars plant. The capacity utilisation in 2014-15
had improved significantly to around 70-75 per cent leading to
high estimated cash accruals in the range of INR 15-20 million in
2014-15. The revenues of the company are estimated to improve to
around INR 100-120 million in 2014-15 as against that of INR 60
million in 2013-14. Against the accruals the company has moderate
repayment liabilities of around INR 10 million in the near term.
The business profile is also strengthened by the company's
efficient working capital management reflected in estimated Gross
Current Assets of around 70 days as on February 28, 2015.
The rating reflects the extensive experience of UBPL's promoters
in the iron and steel industry as well as the UBPL's efficient
working capital management. These rating strengths are partially
offset by company's below average financial risk profile, marked
by its high gearing and subdued debt protection metrics, and its
moderate scale of operations in the highly fragmented steel
industry.
Outlook: Stable
CRISIL believes that UBPL will maintain its business risk profile
over the medium term, backed by the promoters' experience in the
steel industry and its efficient working capital management. The
outlook may be revised to 'Positive' if the company reports
significant and sustainable improvement in the revenues while
maintaining its profitability and working capital cycle or if the
financial risk profile improves significantly most likely through
infusion of funds from the promoters. Conversely, the outlook may
be revised to 'Negative' if the UBPL's financial risk profile
weakens because of substantially low net cash accruals, or
significantly large, debt funded capital expenditure (capex) or
elongation of working capital cycle.
UBPL was incorporated in Sarguja District (Chhattisgarh) in 2008.
The company is promoted by the Malik and Panwar families. The
company manufactures thermo-mechanically-treated bars, under the
brand name of KDS 500 PLUS and started commercial operations in
October 2012.
UMA GLASS: CARE Assigns B+ Rating to INR6.57cr LT Bank Loan
-----------------------------------------------------------
CARE assigns 'CARE B+' and 'CARE A4' ratings to the bank
facilities of Uma Glass Works.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 6.57 CARE B+ Assigned
Short-term Bank Facilities 1.65 CARE A4 Assigned
Rating Rationale
The ratings assigned to the bank facilities of Uma Glass Works
(UGW) are primarily constrained by its small scale of operations
with low partners' capital with low profitability margins,
leveraged capital structure & weak coverage indicators. The
ratings are further constrained due to the working capital-
intensive nature of operations with high inventory holding period
and presence of the entity in a highly competitive nature of
industry and constitution of the entity being a partnership
concern.
However, the rating draws comfort from the experienced partners,
growing scale of operations and location advantage.
Going forward, the firm's ability to increase the scale of
operations while improvement in profitability margins, improvement
in its capital structure and effective working capital utilization
shall be the key rating sensitivities.
Firozabad-based (Uttar Pradesh) UGW was established in 2011 as a
partnership concern by Mr Gaurav Singh, Mrs Gunjan Singhal and Mr
S C Agarwal with profit & loss sharing ratio of 33%, 33% and 34%,
respectively.
UGW is engaged in the manufacturing of glass products such as
kitchen ware, table ware, glass ware headlight and laltens, etc.
The manufacturing facility of the firm is located in Firozabad
with an installed capacity of 40 tonnes per day as on March 31,
2014. The products find its application in household, and auto
sector. The firm is selling its products all over India (around
90%) and also exports to Nepal, Bangladesh and Nigeria (around
10%). The main raw materials for manufacturing of above-mentioned
products are soda ash, silica sand, chemicals and broken glass.
Soda ash is procured from chemical companies in Gujarat region,
silica sand is procured from Allahabad and Rajasthan region,
broken glass is procured from local market of Firozabad.
Uma Glass Private Limited is the group associates of UGW which is
in the manufacturing of glass products and caters to the export
market.
For FY14 (refers to the period April 1 to March 31) UGW achieved a
total operating income of INR26.48 crore and PAT of INR0.12 crore
as compared with a total operating income of INR14.68 crore and
PAT of INR0.04 crore for FY13. Furthermore, in the current till
February 15, 2015, the firm has achieved around INR18 crore.
=================
I N D O N E S I A
=================
PELABUHAN INDONESIA: S&P Assigns 'BB+' CCR; Outlook Stable
----------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB+' long-term
corporate credit rating to Indonesia-based port operator PT
Pelabuhan Indonesia II (Persero) (Pelindo II). The outlook is
stable. At the same time, S&P assigned its 'axBBB+' long-term
ASEAN regional scale rating to the company. S&P also assigned its
'BB+' rating to a proposed U.S.-dollar-denominated bond issue by
the company. The issue rating is subject to S&P's review of the
final issuance size and documentation.
The rating on Pelindo II reflects the company's strong and
sustainable competitive advantage in a large and growing port
concession area in Indonesia. The rating also captures the
company's stable profitability and cash flows adequacy ratios
because of a high share of lease income from joint ventures.
Pelindo II's exposure to the high country risk in Indonesia and
execution risks from a sizable, multi-year capital spending
program temper these strengths.
Pelindo II intends to use the proceeds of the proposed notes for
capital spending and general corporate purposes. The proposed
notes are unsecured and do not contain financial covenants. The
proposed terms and conditions include a change-of-control clause
that a sale of more than 50% of Pelindo II shares by its
government owner would trigger.
"We view the market position and competitive advantage of Pelindo
II's major ports to be sound and sustainable for at least the next
24 months," said Standard & Poor's credit analyst Xavier Jean.
The company controls the Tanjung Priok port complex, a major
gateway to West Java, the most heavily populated area in Indonesia
and a large and diversified economic center. That port complex
alone is responsible for almost half of Indonesia's yearly
domestic container traffic by throughput capacity. The market
share of Pelindo II's other port assets is immaterial nationally,
but they serve fairly sizable areas with palm oil, minerals, and
heavy industries in Sumatera and Kalimantan.
"In our opinion, the gradual expansion of Pelindo II's business
model to being an infrastructure lessor in addition to a port
operator is positive from a credit standpoint because it adds
stability to operating cash flows," Mr. Jean said. Pelindo II is
responsible for capital spending on the maintenance and expansion
of port assets in its concession. Outside operators sub-lease the
concession and pay Pelindo II a lease and a royalty over the
period; operators sometimes pay an upfront fee too.
This business model induces some competition between Pelindo II's
own operations and sub-leased operations, which tend to have
higher productivity. However, Pelindo II generally maintains a
majority stake in the joint ventures that sub-lease the
concession, which mitigates the financial impact of a possible
cannibalization of Pelindo II's own port operations. Also, a good
level of product differentiation exists between sub-leased
terminals and Pelindo II's own operations. Sub-leased terminals
tend to be more expensive and catered for international trade and
foreign customers.
"Pelindo II's aggressive capital spending strategy weighs on the
company's risk profile because we believe it entails substantial
execution risks," Mr. Jean said. The company expects its annual
capital spending to nearly double over the next three years, and
it has yet to demonstrate the ability to execute the large-scale
reclamation project for the subsequent phases at New Priok over
the next two to three years.
Pelindo II's leverage will grow substantially if the company
proceeds with its proposed bond issue. Nevertheless, S&P projects
Pelindo II's cash flow adequacy ratios to be mostly stable in the
next three years as operating cash flows are also growing. S&P
also expects the proceeds from the proposed bonds should be
sufficient for S&P's projected capital spending for the next three
years without the need for additional external funding.
S&P views Pelindo II as a government-related entity (GRE), and the
rating factors in S&P's view of a "very high" likelihood of
extraordinary support from the government of Indonesia. This is
because the company manages ports that S&P views as strategic for
the economy, given about 95% of Indonesia's goods are transported
by sea. S&P also considers the company's operations to be well-
aligned with the government's major economic policy of
infrastructure improvement. In addition, the Indonesian
government is the sole owner and exerts substantial control on the
company's strategy. S&P believes the government is committed to
retaining a controlling stake over the next three years at least.
"The stable outlook on the long-term rating reflects our view that
Pelindo II will maintain its sound competitive position in
Indonesia over the next 24 months and a stable operating profile,
thanks to a high share of predictable income streams from its
joint ventures," Mr. Jean said. It also reflects S&P's view that
the company will maintain a ratio of funds from operations (FFO)
to debt at about 25% through 2017. This is despite execution
risks and additional debt related to the company's large expansion
and modernization program.
S&P may lower the rating if Pelindo II's FFO-to-debt ratio falls
below 20%, with no prospect for improvement. This could happen
if: (1) annual revenues decline by a mid- to high-single-digit
level over the next two years while gross margins weaken below 50%
with no prospect of recovery; (2) the company undertakes debt-
funded expansion program well above S&P's base-case forecasts; or
(3) the company faces significant cost overruns and delays in its
port expansion.
S&P's 'BB+' sovereign credit rating on Indonesia caps the long-
term corporate rating on Pelindo II. This is because of the
company's high sensitivity to Indonesia's country risk and the
company's government-related status. Accordingly, an upgrade of
Indonesia would be a prerequisite to any positive rating action on
Pelindo II.
====================
N E W Z E A L A N D
====================
E2 NEW HOMES: Palmerston North Pub Still For Sale
-------------------------------------------------
Kelsey Wilkie at Stuff.co.nz reports that a once-popular
Palmerston North pub may still be on the market after not selling
under the hammer.
Stuff.co.nz says the old Highflyers building, on the corner of The
Square and Main St, was put on the market last month after the
company that owned it was placed into liquidation.
An auction for the building and land was held on April 9, says
Stuff.co.nz.
Karl Cameron, of Bayleys Manawatu who is marketing the property,
said it did not sell under the hammer, the report discloses.
"It didn't sell, it passed in at NZ$3.5 million," Stuff.co.nz
quotes Mr. Cameron as saying.
Stuff.co.nz relates that Mr. Cameron said the plan now was to find
a buyer who would be willing to pay about NZ$4 million for the
property.
Mr. Cameron said there were about 10 people at the auction and he
knew of two interested parties, the report relays.
Mortgagee Aston Investments Ltd was handling the assets of
E2 New Homes and Properties Ltd, the company that owned the
property, according to Stuff.co.nz.
The property has a rateable value of NZ$3.4 million, the report
notes.
NCF INT'L: Chinese Directors Maybe Asked to Pay Back NZ$145K
------------------------------------------------------------
BusinessDesk reports that liquidators of a failed milk exporting
company, which became insolvent after losing an unfair dismissal
case with employees, may force the company's Chinese-based
directors to pay back NNZ$145,200 to creditors.
NCF International was tipped into liquidation last June, after
former shareholders and employees David Cardno and Jan Wolyncewicz
won an unfair dismissal case and were awarded NZ$83,408 by the
employment court in January 2014, BusinessDesk relates citing a
ShephardDunphy liquidators report by Iain Bruce Shephard and Heath
Leslie Gair. BusinessDesk notes that the company was set up by
Chinese and New Zealand-based investors, to export milk into
China, with Wolyncewicz and Cardno employed for "their expertise
in food exportation and marketing".
Wolyncewicz and Cardno still hold 2.5 percent of NCF each, but
ceased being directors in April 2013, while in March 2014 NCF's
China-based directors Bing Li, Lai Yebin, Guo Xiaohai, Chen
Junliang resigned as directors, leaving Wellington-based Fu Bihua
as the sole director, BusinessDesk, citing records on the
Companies Office website, discloses.
BusinessDesk relates that after the legal stoush, NCF assets were
transferred to a related company and cornerstone shareholder,
Pairua Investment Group, which is jointly owned by former
directors of NCF, Li and Yebin. Prior to the transfer of NCF
assets to Pairua, NZ$145,200 was paid to China-based directors in
February, in what appears to be a voidable transaction, meaning
liquidators Shephard and Gair can claw it back for creditors, they
said, the report relays.
According to BusinessDesk, NCF had no secured creditors.
Liquidators have received a preferential claim from Inland Revenue
for NZ$15,189, on top of Wolyncewicz and Cardno's NZ$83,408
claims, while five unsecured creditors have claimed NZ$49,759. So
far liquidators have sold NZ$1,725 worth of office furniture,
while the NCF bank balance prior to liquidation was NZ$60.18,
BusinessDesk reports.
WAIMEA CONTRACT: Administrators Work to Save Transport Firm
-----------------------------------------------------------
Laura Basham at Stuff.co.nz reports that the axe hangs over Waimea
Contract Carriers as administrators work to save the log transport
company that owes more than NZ$16 million.
The company was placed in voluntary administration two weeks ago,
and a creditors' meeting was held in Nelson on April 13, the
report relates.
The firm has about 156 creditors and the debt which was initially
estimated at NZ$14 million has risen to just over NZ$16 million.
The directors are Jenny McIntyre, of Brightwater, and Peter
McIntyre, of Richmond.
Stuff.co.nz relates that the business has 120 staff -- 90 in
Nelson and 30 in Marlborough -- and is described as the top of the
south's largest privately owned local transport operator. It has
a fleet of 80 trucks and transports logs for Nelson Forests,
Hancock Forest Management and Nelson Pine Industries.
At the meeting John Fisk and Richard Longman, partners of PwC,
were confirmed as administrators, with nobody else nominated, and
a resolution was passed to appoint a creditors' committee,
according to the report.
Stuff.co.nz says the administrators plan to meet with the
committee within a month to keep them informed of how the
situation develops until a watershed meeting to decide what
happens to the company is held.
They have also successfully applied to the High Court at
Wellington for an extension to the statutory 25-day deadline, with
the court agreeing to give until July 31, Stuff.co.nz says.
According to the report, Mr. Fisk said the extra time was sought
because of the work that needed to be done, including analysis and
renegotiating contracts.
"Overall it's a difficult situation for creditors to be in a
spectrum of an insolvency process. There is at least potential to
have a positive outcome but I caution I don't want expectations to
be raised either," the report quotes Mr. Fisk as saying.
For the Waimea Contract Carriers staff it is business as usual,
the report says. "We are continuing to maintain their employment
contracts. I cannot give any promises in the future what staffing
levels will be," Mr. Fisk, as cited by Stuff.co.nz, said.
Asked if there might be a restructure, he said: "I cannot take
that off the table at this stage," the report relays.
There was still potential for a positive outcome for the
administration, he said. "We have had nothing but support from
the creditors and suppliers to the company and also the customers,
that's encouraging.
"While we don't want to get ahead of ourselves I am hopeful we can
put a deed of company arrangement that will allow the company to
continue to trade but I emphasis I cannot make promises,"
Stuff.co.nz quotes Mr. Fisk as saying.
A deed of company arrangement is a binding arrangement between a
company and its creditors governing how the company's affairs will
be dealt with, the report notes.
According to the report, Mr. Fisk said the cause of the company's
debt was a rang of factors, including reduced margins, the company
buying another business, CRB Transport in Blenheim, which had put
a strain on it, and the dry weather conditions in January and
February which had restricted logging, as well as a big forest
fire in Marlborough in February.
Mr. Fisk said the administrators were looking at renegotiating
contracts but there were still some negotiations to go through,
the report adds.
Waimea Contract Carrier is a privately-owned transport operator
that carts logs for the major forest owner in the Nelson,
Marlborough and West Coast regions, in New Zealand.
John Fisk and Richard Longman, were appointed joint and several
Administrators of Waimea Contract Carriers Limited on March 30,
2015.
=================
S I N G A P O R E
=================
STATS CHIPPAC: Moody's Reviews 'Ba3' Ratings for Downgrade
----------------------------------------------------------
Moody's Investors Service says STATS ChipPAC Ltd Ba3 corporate
family rating and senior unsecured bond rating ratings remain on
review for downgrade as JCET-SC (Singapore) Pte. Ltd.'s (JCET-SC,
unrated) pre-conditional voluntary offer to acquire STATS ChipPAC
Ltd remains outstanding.
STATS ChipPAC's ratings were put on review for downgrade on 10
November 2014 after Jiangsu Changjiang Electronics Technology Co.,
Ltd. (JCET, unrated), a leading electronics packaging service
provider in China, made a non-binding proposal to acquire all
STATS ChipPAC's shares on a fully diluted basis for an aggregate
purchase price of USD780 million.
Further, on 30 December 2014, JCET-SC, a subsidiary of JCET,
announced it intends to make a voluntary conditional cash offer
for all the shares in STATS ChipPAC subject to the fulfilment of
certain conditions. The purchase price of USD780 million was in
line with its original non-binding proposal made in November 2014.
JCET; the National Integrated Circuit Industry Investment Fund
Co., Ltd. (unrated); and SilTech Semiconductor (Shanghai)
Corporation Limited -- a subsidiary of Semiconductor Manufacturing
International Corporation (unrated), have formed a consortium to
undertake the offer.
Pre-conditions to the making of the offer by JCET-SC notably
include (1) regulatory and shareholder approvals; (2) Singapore
court approval of the Taiwan capital reduction; and (3) STATS
ChipPAC consolidated aggregate debt being below USD 1.28 billion
at the earlier of 30 April 2015 or the date of the offer
announcement. The consolidated aggregate debt excludes any debt to
be incurred by its Taiwan subsidiaries to repay intercompany debt
owing to the company.
No further details regarding adherence or non-adherence to the
pre-conditions have been made to date, nor has JCET disclosed any
details regarding the funding arrangements for the acquisition.
Moody's notes that if the pre-conditions are not fulfilled before
5pm on June 30, 2015 or such later date as the parties may agree,
the offer will not be made.
If the transaction is successful and Temasek Holdings (Private)
Limited's (Aaa stable) shareholding falls below 34%, this would
trigger the change of control put option on STATS ChipPAC's senior
unsecured bonds due 2016 and 2018, totaling USD811 million. There
are no ratings triggers. This means bond holders could put the
bonds back to the company at 101. Assuming all bonds are put back
to the company, the funding requirements for the acquisition would
increase by an additional USD819 million.
Moody's review continues to wait for further detail on (1) the
fulfilment of the pre-conditions (2) the final the terms and
conditions of the sale, including the funding arrangements at each
JCET-SC and STATS ChipPAC, particularly with respect to the
funding for any bonds that are put and (3) the organizational
structure of the combined entity. Moody's will also review the
overall operational and financial impact of the acquisition on
STATS ChipPAC's credit profile, should a definitive deal be
struck.
If the deal were to fail to materialize, and there is no
fundamental change to STATS ChipPAC's business and financial
profile, then the outlook could revert to stable at the Ba3 level.
The principal methodology used in these ratings was Global
Semiconductor Industry Methodology published in December 2012.
STATS ChipPAC is the fourth-largest player in the OSAT
(Outsourcing Semiconductor Assembly and Test) industry. It
provides full turnkey solutions to semiconductor companies, among
them foundries, integrated device manufacturers, and fabless
companies in the US, Europe, and Asia.
*********
Tuesday's edition of the TCR-AP delivers a list of indicative
prices for bond issues that reportedly trade well below par.
Prices are obtained by TCR-AP editors from a variety of outside
sources during the prior week we think are reliable. Those
sources may not, however, be complete or accurate. The Tuesday
Bond Pricing table is compiled on the Friday prior to
publication. Prices reported are not intended to reflect actual
trades. Prices for actual trades are probably different. Our
objective is to share information, not make markets in publicly
traded securities. Nothing in the TCR-AP constitutes an offer
or solicitation to buy or sell any security of any kind. It is
likely that some entity affiliated with a TCR-AP editor holds
some position in the issuers' public debt and equity securities
about which we report.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR-AP. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com
Friday's edition of the TCR-AP features a list of companies with
insolvent balance sheets obtained by our editors based on the
latest balance sheets publicly available a day prior to
publication. At first glance, this list may look like the
definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical
cost net of depreciation may understate the true value of a
firm's assets. A company may establish reserves on its balance
sheet for liabilities that may never materialize. The prices at
which equity securities trade in public market are determined by
more than a balance sheet solvency test.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Asia Pacific is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Valerie U. Pascual, Marites O. Claro, Joy A. Agravante, Rousel
Elaine T. Fernandez, Julie Anne L. Toledo, and Peter A. Chapman,
Editors.
Copyright 2015. All rights reserved. ISSN: 1520-9482.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding,
electronic re-mailing and photocopying) is strictly prohibited
without prior written permission of the publishers.
Information contained herein is obtained from sources believed
to be reliable, but is not guaranteed.
TCR-AP subscription rate is US$775 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance
thereof are US$25 each. For subscription information, contact
Peter Chapman at 215-945-7000 or Nina Novak at 202-362-8552.
*** End of Transmission ***