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/raid1/www/Hosts/bankrupt/TCRAP_Public/150817.mbx T R O U B L E D C O M P A N Y R E P O R T E R A S I A P A C I F I C Monday, August 17, 2015, Vol. 18, No. 161 Headlines C H I N A CAR INC: Moody's Assigns Ba1 Definitive Rating to Unsecured Notes DTS8 COFFEE: Appoints New CEO and Looks to Accelerate Growth MAOYE INTERNATIONAL: Moody's Cuts Corporate Family Rating to Ba3 WINHA INT'L: Marcum Bernstein Expresses Going Concern Doubt I N D I A AXLEO INDUSTRIES: CRISIL Cuts Rating on INR43.3MM Loan to 'B' BALAJI POLYTEX: CRISIL Reaffirms B+ Rating on INR70MM Cash Loan CHARCHCO ELECTRONICS: Ind-Ra Affirms B+ Long-Term Issuer Rating INTERNATIONAL CERTIFICATION: CRISIL Rates INR37MM LT Loan at B+ KEYEM ENGINEERING: CRISIL Reaffirms B Rating on INR125MM Loan KOMMAN PEOPLES: CRISIL Ups Rating on INR77.8MM Term Loan to B+ M/S CHITTARANJAN SWAIN: Ind-Ra Suspends B+ Long-Term Rating MAHATHI SOFTWARE: Ind-Ra Affirms D Long-Term Issuer Rating MEGASOFT LTD: Ind-Ra Suspends BB+ Long-Term Issuer Rating MJ LOGISTICS: Ind-Ra Raises Long-Term Issuer Rating to BB+ MORTH INFRASTRUCTURE: CRISIL Reaffirms B+ Rating on INR65.5M Loan NEOSA ELECTRONICS: Ind-Ra Affirms B+ Long-Term Issuer Rating PADIKKALA GOLD: CRISIL Suspends B+ Rating on INR100MM Cash Loan SHREE SURGOVIND: CRISIL Cuts Rating on INR125MM Cash Loan to B SRI KANGEYAA: CRISIL Assigns B+ Rating to INR31MM LT Loan SRI PARAMESWARA: CRISIL Cuts Rating on INR190MM Cash Loan to D UNIVERSAL AIR: CRISIL Ups Rating on INR155MM Term Loan to 'B' - - - - - ========= C H I N A ========= CAR INC: Moody's Assigns Ba1 Definitive Rating to Unsecured Notes ----------------------------------------------------------------- Moody's Investors Service has assigned a definitive Ba1 rating to CAR Inc.'s USD300 million, 6.00%, 5.5-year senior unsecured notes, due February 11, 2021. The ratings outlook is stable. RATINGS RATIONALE Moody's definitive rating on this debt obligation follows CAR Inc.'s completion of its USD bond issuance, the final terms and conditions of which are consistent with Moody's expectations. The provisional rating was assigned on 3 August, and Moody's ratings rationale was set out in a press release published on the same day. The proceeds from the bond issuance will be used for capital expenditure and other general corporate purposes, including refinancing outstanding indebtedness, to enhance the company's capital structure. CAR Inc., founded in 2007 and headquartered in Beijing, provides car rental services, including short-term rental, long-term rental and leasing in China. CAR listed on the Hong Kong Stock Exchange in September 2014. As of March 31, 2015, CAR had a total fleet of 72,994 company- owned cars. CAR commands a leadership position in terms of fleet size, revenue and network coverage. In the 12 months ended 31 March 2015, CAR reported net sales of RMB3.8 billion (USD608 million). CAR's key shareholders include Legend Holdings (unrated); private equity firm Warburg Pincus; the world's second-largest car rental company The Hertz Corporation (B1 stable); and its chairman, founder and CEO, Mr. Charles Lu. These parties hold stakes of 29.2%, 18.3%, 16.2% and 14.8%, respectively. DTS8 COFFEE: Appoints New CEO and Looks to Accelerate Growth ------------------------------------------------------------ DTS8 Coffee Company, Ltd., announced that effective Aug. 10, 2015, Mr. Douglas Thomas was appointed as a director, president, chief executive officer, chief financial officer and secretary of the Company. Mr. Thomas will manage the day-to-day business affairs of DTS8. The change is necessary as DTS8 looks to improve its finances, launch new brand initiatives, and leverage the "DTS8 Coffee" brand name to pursue new coffee sales opportunities. Mr. Alex Liang, Chairman of DTS8 said, "Mr. Thomas, our new CEO, brings a wealth of public company, marketing and management experience to DTS8. It is time for a management change following relatively weak revenue growth in China. China is one of the most highly sought after and a strong growing coffee markets in the world. We are excited with the management change. We look forward to increased market share, revenues and enhanced shareholder value." Mr. Thomas's engagement will continue on a year-to-year basis until terminated by either party upon 60 days prior written notice to the other party. The Company will make monthly management fee payment of $6,000 to Thomas, in arrears, on the 25th day of each month and 4 million common shares of the Company as engagement bonus remuneration. Effective Aug. 10, 2015, Mr. Sean Tan the current chief executive officer resigned as an officer and a director of the Company, and his management contract dated March 31, 2011, was also terminated. About DTS8 Coffee DTS8 Coffee Company, Ltd. (previously Berkeley Coffee & Tea, Inc.) was incorporated in the State of Nevada on March 27, 2009. Effective Jan. 22, 2013, the Company changed its name from Berkeley Coffee & Tea, Inc., to DTS8 Coffee Company, Ltd. On April 30, 2012, the Company acquired 100 percent of the issued and outstanding capital stock of DTS8 Holdings Co., Ltd., a corporation organized and existing since June 2008 under the laws of Hong Kong and which owns DTS8 Coffee (Shanghai) Co., Ltd. DTS8 Holdings, through its subsidiary DTS8 Coffee, is a gourmet coffee roasting company established in June 2008. DTS8 Coffee's office and roasting factory is located in Shanghai, China. DTS8 Coffee is in the business of roasting, marketing and selling gourmet roasted coffee to its customers in Shanghai, and other parts of China. It sells gourmet roasted coffee under the "DTS8 Coffee" label through distribution channels that reach consumers at restaurants, multi-location coffee shops, and offices. DTS8 Coffee reported a net loss of $3.8 million on $369,000 of sales for the year ended April 30, 2015, compared to a net loss of $2.3 million on $310,000 of sales for the year ended April 30, 2014. As of April 30, 2015, the Company had $286,000 in total assets, $1.10 million in total liabilities, all current, and a $781,000 total shareholders' deficit. MaloneBailey, LLP, Houston, Texas, issued a "going concern" qualification on the consolidated financial statements for the year ended April 30, 2015, citing that the Company has suffered recurring losses from operations, which raises substantial doubt about its ability to continue as a going concern. MAOYE INTERNATIONAL: Moody's Cuts Corporate Family Rating to Ba3 ---------------------------------------------------------------- Moody's Investors Service has downgraded Maoye International Holdings Ltd.'s corporate family rating (CFR) to Ba3 from Ba2. At the same time, Moody's has downgraded the company's senior unsecured ratings to B1 from Ba3. The ratings outlook is stable. RATINGS RATIONALE "The downgrade reflects our expectation that Maoye's revenue growth will remain weak and its debt leverage will stay elevated in the next 12-18 months," says Lina Choi, a Moody's Vice President and Senior Analyst. A recent profit warning issued by the company pointed to continued weakness in Maoye's core retail business, where revenue decline trends have yet to be arrested. For the six months ended June 2015, Moody's estimates Maoye's same-store-sales to be negative 7%-8%, and for its direct sales to decline 10%-15% year on year. Management has indicated that its weak sales performance was partly the result of the renovation of one of its key stores in Shenzhen (Huaqiangbei), which will be completed in the second half of the year. Nonetheless, Moody's expects Maoye's sales growth to remain weak over the next 12-18 months, given the challenging operating environment. Moody's also estimates Maoye's property sales revenue was only about RMB200 million-RMB300 million in 1H 2015, which is significantly below the company's full-year target of RMB1 billion. The company has been facing a sluggish property market in the tier 2 and 3 cities in which it has property developments, and Moody's estimates its inventory for these cities remains largely unchanged from the RMB 11.5 billion reported at end-2014. On the other hand, Moody's estimates that Maoye's profitability remained broadly stable in the last 12-18 months. Maoye's EBITDA/gross sales proceeds was estimated to be around 14% in 1H 2015 despite weak revenue growth; a result of measures to improve its merchandizing mix in key stores. Accordingly, Moody's expects Maoye to maintain an adjusted EBITDA margin of 38-39% in the next 12-18 months. Maoye's leverage -- as measured by adjusted debt/EBITDA -- will likely remain elevated at 6.5x-7.0x over the next 12-18 months, similar to the level in 2014. This estimate reflects Moody's expectation that (1) Maoye's earnings growth will remain sluggish; and (2) there will be a limited increase in debt, as the expected working capital surplus stemming from property sales will offset sizeable capital expenditures. The company has been gradually selling some of its inventory in the last six months, while slowing its pace of further development. Maoye has not acquired any new land titles in the last 12 months. This level of leverage provides little leeway for further deterioration at the lowered Ba3 CFR category. Maoye's liquidity remains weak. Moody's estimates that its cash of around RMB1.0 billion-RMB1.5 billion at end-June 2015 and operating cash flow over the next 12 months are insufficient to cover its short-term debt of RMB2.0 billion and capital expenditure of around RMB1.6 billion. However, Moody's expects the company will be able to roll over its short-term debt, given its solid market position and more supportive financial market, against the backdrop of the Chinese government's monetary easing. The stable rating outlook reflects Moody's expectation that Maoye will maintain stable profit margins and curb a further rise in debt leverage over the next 12-18 months. An upgrade in the near term is unlikely, given the challenging operating environment for retail and uncertainty in its property sales. Upward ratings pressure could emerge over time if Maoye (1) successfully implements its business plan; (2) improves operating cash flow and generates positive free cash flow on a sustained basis; and (3) improves its credit metrics, such that EBITDA margin exceeds 40-42% and adjusted debt/EBITDA falls below 5.5x- 6.0x. Further downgrade pressure could arise if Maoye (1) is unable to sell its development properties; (2) invests in additional new projects that further delay its deleveraging; (3) records a material deterioration in sales and cash flows at its existing stores, or takes longer than expected to break even at its new stores; or (4) liquidity weakens materially because onshore refinancing dries up. Credit metrics indicative of downgrade pressure include EBITDA margin falls below 35-36% or adjusted debt/EBITDA above 7x on a sustained basis. Maoye International Holdings Ltd. is one of the leading department store operators in China (Aa3 stable). Headquartered in Shenzhen, Guangdong Province, the company has built a strong position in its home market, while strategically expanding elsewhere in the country. The company had 40 stores in 18 cities across China's four main regions at end-2014. WINHA INT'L: Marcum Bernstein Expresses Going Concern Doubt ----------------------------------------------------------- WINHA International Group Limited filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K for the fiscal year ended March 31, 2015. Marcum Bernstein & Pinchuk LLP expressed substantial doubt about the Company's ability to continue as a going concern, citing that the Company has a net loss and an accumulated deficit as of March 31, 2014. The Company reported net income of $2.37 million on $9.02 million of revenues in 2015, compared with a net loss of $1 million on $99,752 of revenues in 2014. The Company's balance sheet at March 31, 2015, showed $5.77 million in total assets, $1.66 million in total liabilities, and total stockholders' equity of $4.11 million. A copy of the Form 10-K is available at: http://is.gd/Lkh9w2 WINHA International Group Ltd. operates as a development stage company with interest in providing retail specialty products through physical franchise stores. It operates as mobile, set-top box sets for television stores and sells locally produced food, beverages and arts and crafts that are well-known across China. The firm markets and sells the local specialty goods through the following four channels: Online Store, Mobile store, Set-Top Box Store and Market Needs. The company was founded on April 15, 2013 and is headquartered in Zhongshan, China. ========= I N D I A ========= AXLEO INDUSTRIES: CRISIL Cuts Rating on INR43.3MM Loan to 'B' ------------------------------------------------------------- CRISIL has downgraded its rating on the long-term bank facilities of Axleo Industries (AI: part of the RK group) to 'CRISIL B/Stable' from 'CRISIL B+/Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 25 CRISIL B/Stable (Downgraded from 'CRISIL B+/Stable') Proposed Long Term Bank Loan Facility 32.7 CRISIL B/Stable (Downgraded from 'CRISIL B+/Stable') Term Loan 29 CRISIL B/Stable (Downgraded from 'CRISIL B+/Stable') Working Capital Demand Loan 43.3 CRISIL B/Stable (Downgraded from 'CRISIL B+/Stable') The rating downgrade reflects pressure on the RK group's business risk profile on account of subdued demand for components from tractor manufacturers, and decline in turnover to INR670 million in 2014-15 (refers to financial year April 1 to March 31) from INR846 million in the previous year. The accruals halved to about INR113 million from INR254 million during the period. The decline in topline and profitability, notwithstanding, the working capital requirements increased, with gross current assets increasing to around 275 days as on March 31, 2015 from 200 days a year earlier. Despite the resultant pressure on liquidity, however, the group has continued to service its maturing debt on time, aided largely by equity infusion of INR56 million by the promoters in 2014-15. The demand for tractor components and the funding support of promoters will remain rating sensitivity factors for the group. The rating reflects the RK group's large working capital requirements, weak liquidity, and fluctuations in operating profitability owing to volatility in raw material prices. These rating weakness are partially offset by the promoters' extensive experience, financial support, and steady relationships with customers and suppliers. For arriving at the rating, CRISIL has combined the business and financial risk profile of AI, Maharashtra Engineering (ME), and Armaax Auto Pvt Ltd (AAPL). This is because the three entities, collectively referred to as the RK group, are managed by the same promoters and have common suppliers and customers. The entities are also expected to support each other financially, if necessary. Outlook: Stable CRISIL believes that the R.K Group will continue to benefit over the medium term from its promoters' extensive industry experience. The outlook may be revised to 'Positive' if the group reports significant and sustainable improvement in revenue, margins, and working capital management while it maintains stable debt protection indicators. Conversely, the outlook may be revised to 'Negative' if decline in revenue or margins, stretch in working capital cycle, or reduction in promoter support weakens the group's financial risk profile. The RK group manufactures tractor components, primary for Mahindra & Mahindra Ltd (M&M; rated CRISIL AAA/Stable/CRISIL A1+). The group was established in 1974 by Mr. R S Kamble in Mumbai (Maharashtra). BALAJI POLYTEX: CRISIL Reaffirms B+ Rating on INR70MM Cash Loan --------------------------------------------------------------- CRISIL's ratings on the bank facilities of Balaji Polytex Industry Pvt Ltd (BPIPL) continue to reflect BPIPL's modest scale of operations in the competitive and fragmented packaging material industry, and the company's below-average financial risk profile. These rating weaknesses are partially offset by the extensive industry experience of BPIPL's promoters. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 5 CRISIL A4 (Reaffirmed) Cash Credit 70 CRISIL B+/Stable (Reaffirmed) Proposed Long Term Bank Loan Facility 20 CRISIL B+/Stable (Reaffirmed) Term Loan 70 CRISIL B+/Stable (Reaffirmed) On July 10, 2015, CRISIL had upgraded its rating on the long-term bank facilities to 'CRISIL B+/Stable' from 'CRISIL B/Stable', and reaffirmed its rating on the company's short term facility at 'CRISIL A4'. Outlook: Stable CRISIL believes that BPIPL will continue to benefit over the medium term from its promoters' extensive industry experience. The outlook may be revised to 'Positive' if the company significantly improves its revenue and profitability while maintaining a comfortable capital structure. Conversely, the outlook may be revised to 'Negative' if BPIPL's financial risk profile, particularly its liquidity, deteriorates, most likely because of large debt-funded capital expenditure or a sharp decline in its revenue or profitability. Incorporated in August 2011, BPIPL is promoted by Mr. Vinay Agarwal and Mr. Aditya Lahotia, and is based in Baddi (Himachal Pradesh). The company manufactures non-woven polypropylene sheets. CHARCHCO ELECTRONICS: Ind-Ra Affirms B+ Long-Term Issuer Rating --------------------------------------------------------------- India Ratings and Research (Ind-Ra) has affirmed Charchco Electronics (India) Private Limited's Long-Term Issuer Rating at 'IND B+'. The Outlook is Stable. The agency has also affirmed CEIPL's INR220 mil. fund-based limits (increased from INR152.5 mill) at 'IND B+' with a Stable Outlook. KEY RATING DRIVERS Ind-Ra continues to take a consolidated view of CEIPL and its associate entity Neosa Electronics Private Limited ('IND B+'/Stable) as the two companies are in the same line of business and have common founders. The affirmation reflects CEIPL's continuous tight liquidity position due to high working capital requirements. The average use of its fund-based limits for the 12 months ended July 2015 was 100.21%. The ratings also reflect the company's moderate credit profile and low profitability due to the trading nature of its business. According to the provisional consolidated financials for FY15, interest coverage was 1.1x (FY14: 1.1x), net leverage was 7.1x (7.4x) and operating EBITDA margins were 2.6% (3.2%). The ratings continue to benefit from CEIPL's strong network of about 600 dealers across Bengal and the over three-decade-long experience of its founders in the distribution of consumer durables. RATING SENSITIVITIES Positive: A sustained improvement in the consolidated EBITDA interest coverage ratio will be positive for the ratings. Negative: Deterioration in the company's liquidity position will be negative for the ratings. COMPANY PROFILE Incorporated in 1992, CEIPL and Neosa Electronics distribute electronic consumer durables across Bengal. INTERNATIONAL CERTIFICATION: CRISIL Rates INR37MM LT Loan at B+ --------------------------------------------------------------- CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to the bank facilities of International Certification Services Pvt Ltd, (ICS). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Proposed Overdraft Facility 3 CRISIL B+/Stable Proposed Bank Guarantee 5 CRISIL A4 Overdraft Facility 15 CRISIL B+/Stable Bank Guarantee 20 CRISIL A4 Long Term Loan 37 CRISIL B+/Stable The ratings reflect the promoter's extensive experience in the research and consultancy industry. This strength is partially offset by modest net worth, moderate financial risk profile and working-capital-intensive operations. Outlook: Stable CRISIL believes that ICS will maintain its presence in the research and consultancy industry over the medium term, supported by the promoters' extensive industry experience and its established customer relationships. The outlook may be revised to 'Positive' if ICS reports substantial and sustained improvement in revenue and profitability margins or working capital management. Conversely, the outlook may be revised to 'Negative' if ICS reports a steep decline in profitability margins or weakening of capital structure due to large working capital requirements. ICS, incorporated in 1999 by the Kataria family, provides certifications and inspection services to companies across industries. Its operations are managed by Mr. Sundar Kataria (MD), Ms. Sheela Kataria (Director Finance), Mr. Sumeet Kataria (Technical Director/Country Manager), Mr. Ramakant Prasad (VP) and Mr. Sudhir Vagal (VP). The company has its head office located in Mumbai and branch offices in Ahmedabad, Aurangabad, Bangalore, Baroda Belgum, Chennai, Coimbtore, Gandhidham, Goa, Guwahati, Hyderabad, Indore, Jaipur, Kanpur, Kerala, Kolhapur, Kolkata, Ludhiana, Mumbai, Nagpur, Nashik, New Delhi, Orissa, Pune, Surat, Udaipur and Vapi. KEYEM ENGINEERING: CRISIL Reaffirms B Rating on INR125MM Loan ------------------------------------------------------------- CRISIL's ratings on the bank facilities of Keyem Engineering Enterprises (KEE) continue to reflect KEE's modest scale of operations in the intensely competitive civil construction segment, and its working-capital-intensive nature of operations. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 125 CRISIL B/Stable (Reaffirmed) Letter of Credit 25 CRISIL A4 (Reaffirmed) These rating weaknesses are partially offset by KEE's healthy order book, its promoter's extensive industry experience, and its moderate financial risk profile marked by moderate net worth and debt protection metrics. Outlook: Stable CRISIL believes that KEE will continue to benefit over the medium term from its moderate order book and its promoter's extensive experience in the civil construction segment. The outlook may be revised to 'Positive' if KEE significantly scales up its operations and improves its working capital management, thereby enhancing its liquidity. Conversely, the outlook may be revised to 'Negative' if the firm's revenue and operating margin decline because of delay in execution of projects, or if its working capital management weakens leading to weakening in its liquidity. Update KEE reported revenue of INR632 million, on a provisional basis, with operating margin of 9.83 per cent. The firm has a healthy order book of INR2.0 billion as on June 15, 2015 to be executed over a period of 1.5 to 2.0 years. The proprietor has an experience of more than two decades in the industry. CRISIL believes that the firm's business risk profile will benefit from its healthy order book and its promoter's extensive industry experience. KEE's financial risk profile is marked by a modest net worth, moderate gearing and debt protection metrics. The firm's net worth was at around INR81 million as on March 31, 2015. The gearing is estimated to be moderate at 1.89 times as on the same date. The debt protection metrics are expected to be moderate, marked by interest coverage ratio of 2.06 times and net cash accruals to total debt ratio of 15 per cent. CRISIL believes that KEE's financial risk profile will remain moderate over the medium term supported by a moderate gearing and debt protection metrics. KEE's liquidity is constrained by high average bank limit utilisation at 93 per cent for the 12 months through May 2015. The firm is expected to generate annual cash accruals of INR26 million to INR32 million over the medium term adequate to meet its debt obligations of INR2.3 million to INR6.4 million a year. CRISIL believes that KEE's liquidity will remain constrained over the medium term on account of high utilisation of its bank limits, though partially supported by adequate cash accruals to meet debt obligations. Set up in 1996 as a proprietorship firm by Mr. Ramachandran, Chennai (Tamil Nadu)-based KEE undertakes civil construction works such as installation of underground drainage systems, pumping stations, and water treatment plants. KOMMAN PEOPLES: CRISIL Ups Rating on INR77.8MM Term Loan to B+ -------------------------------------------------------------- CRISIL has upgraded its rating on the long-term bank facility of Komman Peoples Welfare Society (KPWS) to 'CRISIL B+/Stable' from 'CRISIL B/Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Term Loan 77.8 CRISIL B+/Stable (Upgraded from 'CRISIL B/Stable') The rating upgrade reflects CRISIL's belief that the real estate project being undertaken by the society will have low funding constraints and implementation risks, as the available flats have been entirely booked by the stakeholders. The limited track record of the promoters has not impacted the construction of the project. The construction cost and customer advances have been in line with CRISIL's expectations, although the project is three months behind schedule, and possession is expected to be handed over to customers by September 2016. CRISIL's ratings continue to reflect the society's exposure to project implementation and funding risks and susceptibility to cyclicality in the Indian real estate industry. These rating weaknesses are partially offset by the project's moderate revenue visibility. Outlook: Stable CRISIL believes that KPWS will maintain a stable business risk profile over the medium term on the back of moderate revenue visibility for its ongoing project. The outlook may be revised to 'Positive' if healthy customer advances lead to timely completion of the society's project. On the other hand, the outlook may be revised to 'Negative' if further delays in the project or in receipt of customer advances affect the society's liquidity. KPWS, set up in 2006 by Mr. Rajiv Chopra, is setting up a group housing complex for its members at Sector 49 in Faridabad (Haryana). KPWS has been set up as a not-for-profit society. M/S CHITTARANJAN SWAIN: Ind-Ra Suspends B+ Long-Term Rating ----------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated M/s Chittaranjan Swain's (Chittaranjan) 'IND B+' Long-Term Issuer Rating with a Stable Outlook to the suspended category. The rating will now appear as 'IND B+(suspended)' on the agency's website. The ratings have been migrated to the suspended category due to lack of adequate information. Ind-Ra will no longer provide ratings or analytical coverage for Chittaranjan. The ratings will remain in the suspended category for a period of six months and be withdrawn at the end of that period. However, in the event the issuer starts furnishing information during this six-month period, the ratings could be reinstated and will be communicated through a rating action commentary. Chittaranjan's ratings are: -- Long-Term Issuer Rating: migrated to 'IND B+(suspended)' from 'IND B+' -- INR35 mil. fund-based working capital limits: migrated to 'IND B+(suspended)' from 'IND B+' -- INR4.7 mil. long-term loans: migrate to 'IND B+(suspended)' from 'IND B+' -- INR50 mil. non-fund-based limits: migrate to 'IND A4(suspended)' from 'IND A4' MAHATHI SOFTWARE: Ind-Ra Affirms D Long-Term Issuer Rating ---------------------------------------------------------- India Ratings and Research (Ind-Ra) has affirmed Mahathi Software Private Limited's (MSPL) Long-Term Issuer Rating at 'IND D'. The rating actions on MHPL's bank loans are: Amount Facilities (INR Mln) Ratings ---------- --------- ------- Fund-based working 70.0 Affirmed at long-term capital limit (reduced from 'IND C' and short-term INR250.0 mil.) at 'IND A4' Term loan limit 320.2 Affirmed at long-term (increased from 'IND D' INR191.1 mil.) KEY RATING DRIVERS The affirmation reflects MHPL's continued delays in term debt servicing for the 12 months ended July 2015. Also, the company fully used its working capital facility over the 12 months ended July 2015, indicating its stressed liquidity position. RATING SENSITIVITIES Timely debt servicing for at least three consecutive months could result in a positive rating action. COMPANY PROFILE MSPL is a software service provider based in Visakhapatnam. It primarily caters to healthcare sector in the US. The key divisions in the company include analytics, development and revenue cycle management. MEGASOFT LTD: Ind-Ra Suspends BB+ Long-Term Issuer Rating --------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated Megasoft Ltd's 'IND BB+' Long-Term Issuer Rating with a Negative Outlook to the suspended category. The rating will now appear as 'IND BB+(suspended)' on the agency's website. The ratings have been migrated to the suspended category due to lack of adequate information. Ind-Ra will no longer provide ratings or analytical coverage for Megasoft. The ratings will remain in the suspended category for a period of six months and be withdrawn at the end of that period. However, in the event the issuer starts furnishing information during the six-month period, the ratings could be reinstated and will be communicated through a rating action commentary Megasoft's ratings are: -- Long-Term Issuer Rating: migrated to 'IND BB+(suspended)' from 'IND BB+' -- INR150 mil. fund-based limits: migrated to 'IND BB+(suspended)' from 'IND BB+' -- INR70 mil. non-fund-based limits: migrated to 'IND A4+(suspended)' from 'IND A4+' MJ LOGISTICS: Ind-Ra Raises Long-Term Issuer Rating to BB+ ---------------------------------------------------------- India Ratings and Research (Ind-Ra) has upgrades MJ Logistics Services Limited's (MJLSL) Long-Term Issuer Rating to 'IND BB+' from 'IND BB'. The Outlook is Stable. Ind-Ra has also upgrades MJLSL's bank facilities: Amount Facilities (INR Mln) Ratings ---------- --------- ------- Fund-based facility 42.5 Assigned 'IND BB+'/Stable 'IND A4+' Long-term loans 116.4 Upgraded to 'IND BB+'/ Stable from 'IND BB' KEY RATING DRIVERS The upgrade reflects an improvement in MJLSL's scale of operations as well as profitability. In FY15, the company's revenue grew over 16% yoy to INR441.10 mil. and EBITDA margins increased to 14.82% (FY14: 14.71%). Ind-Ra expects the growth trend to continue on the back of benefits from the company's new business segment - procurement logistics - and continued healthy business from its established business relationships. Despite an improvement in the overall revenues in FY15 the scale of operations remains moderate. The upgrade also factors in an improvement in MJLSL's credit profile. In FY15, net financial leverage (adjusted net debt/operating EBITDAR) improved to 2.35x from 3.72x in FY14 and interest coverage (operating EBITDA/gross interest expense) to 2.35x from 1.57x. The company also has strong management and financial support from Bandra Mauritius Limited (100% subsidiary of Eredene Capital) which holds around 86% stake in it. The ratings continue to reflect the company's strong relationship with TATA Motors Limited and ITC Limited, which together accounted for 75% of MJLSL's total revenue in FY15. MJLSL caters to diverse, high-growth segments such as auto and light engineering, food and FMCG industry which is a rating positive as the ever- increasing demand for these products will result in higher growth prospects for the company. Liquidity is comfortable as net cash conversion cycle elongated to 51 days in FY15 (FY14: 45 days) due to a higher year-end inventory. The average use of fund-based limit was 56% for the 12 months ended July 2015. RATING SENSITIVITIES Negative: A decline in the profitability leading to deterioration in the credit metrics will be negative for the ratings. Positive: A significant increase in the operating profitability leading to an improvement in the credit metrics will be positive for the ratings. COMPANY PROFILE MJLSL, incorporated in July 2005 as a limited company, is engaged in third-party logistics (3PL) with service offerings spanning across transportation, warehousing and distribution. The company has its registered office in New Delhi. MORTH INFRASTRUCTURE: CRISIL Reaffirms B+ Rating on INR65.5M Loan ----------------------------------------------------------------- CRISIL's ratings on the bank facilities of Morth Infrastructure Pvt Ltd (MIPL) continue to reflect MIPL's modest scale of operations in a fragmented industry, and the high degree of customer and geographical concentration in its revenue profile. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 75 CRISIL A4 (Reaffirmed) Cash Credit 65.5 CRISIL B+/Stable (Reaffirmed) Proposed Long Term Bank Loan Facility 9.5 CRISIL B+/Stable (Reaffirmed) The ratings also factor in the company's average financial risk profile marked by a modest net worth and average debt protection metrics. These rating weaknesses are mitigated by the promoter's extensive experience in civil construction industry and the funding support from them. Outlook: Stable CRISIL believes that MIPL will continue to benefit from its promoters' extensive industry experience and their funding support. The outlook may be revised to 'Positive' in case the company significantly increases its scale of operations and profitability, and demonstrates efficient working capital management. Conversely, the outlook may be revised to 'Negative' in case MIPL generates significantly low cash accruals, or if its working capital requirements are large, or if it undertakes a debt-funded capital expenditure programme. Update MIPL depicted a healthy compound annual growth rate of around 39 per cent over the three years ending March 31, 2015 and on a provisional basis reported a revenue for 2014-15 (refers to financial year, April 1 to March 31) at INR250 million. The company's revenue is expected to grow a healthy pace of 30 to 40 per cent over the medium term backed by its healthy order book. The company's operating margin have remained volatile at 12 to 9 per cent over the past years due to volatility in the raw material prices as the company does not have any price escalation clause for the contracts leading to variation in margins. CRISIL believes that MIPL's operating margin will remain in the similar range over the medium term. MIPL has weak financial risk profile, marked by small net worth of INR50 million and gearing of 1.8 times as on March 31, 2015. The financial risk profile is supported by a moderate interest coverage ratio of 2.5 times as on March 31, 2015. The liquidity is stretched marked by high utilisation of cash credit limits at 99 per cent over the 13 months through June 2015. The company is likely to generate sufficient cash accruals of INR13 million to INR18 million over the medium term against the debt obligation of around INR6 million every year. CRISIL believes that MIPL's financial risk profile and liquidity will remain at similar levels owing to working-capital-intensive operations. Incorporated in 2010 and headquartered in Mathura (Uttar Pradesh), MIPL is involved in civil construction. The company primarily executes road construction projects for various government departments of Uttar Pradesh. MIPL is promoted by Mr. Om Veer Singh and family. NEOSA ELECTRONICS: Ind-Ra Affirms B+ Long-Term Issuer Rating ------------------------------------------------------------ India Ratings and Research (Ind-Ra) has affirmed Neosa Electronics Private Limited's Long-Term Issuer Rating at 'IND B+'. The Outlook is Stable. The agency has also affirmed NEPL's INR240 mil. fund-based limits at 'IND B+' with a Stable Outlook. KEY RATING DRIVERS Ind-Ra continues to take a consolidated view of NEPL and its associate entity Charchco Electronics (India) Private Limited ('IND B+'/Stable) as the two companies are in the same line of business and have common founders. The affirmation reflects NEPL's continuous tight liquidity position due to high working capital requirements. The average use of its fund-based limits for the 12 months ended July 2015 was 96.61%. The ratings also reflect the company's moderate credit profile and low profitability due to the trading nature of its business. According to the provisional consolidated financials for FY15, interest coverage was 1.1x (FY14: 1.1x), net leverage was 7.1x (7.4x) and operating EBITDA margins were 2.6% (3.2%). The ratings continue to benefit from NEPL's strong network of about 700 dealers across Bengal and the over three-decade-long experience of its founders in the distribution of consumer durables. RATING SENSITIVITIES Positive: A sustained improvement in the consolidated EBITDA interest coverage ratio will be positive for the ratings. Negative: Deterioration in the company's liquidity position will be negative for the ratings. COMPANY PROFILE Incorporated in 1986, NEPL and Charchco Electronics distribute electronic consumer durables across Bengal. PADIKKALA GOLD: CRISIL Suspends B+ Rating on INR100MM Cash Loan --------------------------------------------------------------- CRISIL has suspended its rating on the bank facilities of Padikkala Gold Traders Pvt Ltd (PGTPL). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 100 CRISIL B+/Stable Proposed Long Term Bank Loan Facility 50 CRISIL B+/Stable The suspension of ratings is on account of non-cooperation by PGTPL with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, PGTPL is yet to provide adequate information to enable CRISIL to assess PGTPL'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' Padikkala Gold Traders Private Limited (PGTPL) set in 2012 in Kerala is engaged in wholesale manufacture and sale of gold jewellery. The day-to-day operations of the company are managed by the promoters Mr. Biju Padikkala and his brother, Mr. Shaju Padikkala. Initially, the promoters carried out the business through a partnership firm Padikkala Gold (PG), since 2007. In 2012, the promoters set up PGTPL and shifted the entire operations of PG to this company. SHREE SURGOVIND: CRISIL Cuts Rating on INR125MM Cash Loan to B -------------------------------------------------------------- CRISIL has downgraded its rating on the long-term bank facility of Shree Surgovind Tradelink Ltd (SSTL) to 'CRISIL B/Stable' from 'CRISIL B+/Stable', while reaffirming its rating on the company's short-term facility at 'CRISIL A4'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 125 CRISIL B/Stable (Downgraded from 'CRISIL B+/Stable') Letter of Credit 125 CRISIL A4 (Reaffirmed) The rating downgrade reflects the weakening in SSTL's business risk profile. The company's revenue declined by 33 per cent year- on-year to about INR 552 million in 2014-15 (refers to financial year, April 1 to March 31) on account of subdued business environment and intense industry competition. Its operating margin also reduced to 1.9 per cent in 2014-15 from 6 per cent in the previous year, while its working capital cycle continued to remain stretched. SSTL has been trading in steel products, agricultural commodities, and dry fruits; however, with a view to turning around its business performance, the company plans to now focus only on steel products, mainly steel plates and coils. The management has experience in trading in steel products through its group company, RKB Global Pvt Ltd (RKB; rated 'CRISIL BB-/Stable/CRISIL A4+'), for over last three decades. CRISIL believes that SSTL's ability to ramp up its operations, backed by the extensive industry experience of its promoters, will remain a key rating sensitivity factor over the medium term. The ratings reflect SSTL's exposure to intense competition in the trading industry and the company's working-capital-intensive operations. The ratings also factor in its weak financial risk profile, marked by a high total outside liabilities to tangible net worth ratio, weak debt protection metrics, and a small net worth. These rating weakness are partially offset by the extensive industry experience of SSTL's promoters. Outlook: Stable CRISIL believes that SSTL will continue to benefit over the medium term from the extensive industry experience of its promoters. The outlook may be revised to 'Positive' if the company reduces its dependence on external bank facilities to fund its incremental working capital requirements, while achieving steady growth in its revenue and maintaining its stable operating profitability, thereby improving its financial risk profile. Conversely, the outlook may be revised to 'Negative' if SSTL's profitability declines or its working capital cycle is severely stretched, adversely impacting its financial risk profile. SSTL, incorporated in 1985, trades in steel products. The company, based in Mumbai, is promoted by Mr. Sureshbhai Patel and Mr. Somabhai Patel. SSTL reported a profit after tax (PAT) of INR2.5 million on net sales of INR802.3 million for 2013-14, as against a PAT of INR9.6 million on net sales of INR1114.2 million for 2012-13. SRI KANGEYAA: CRISIL Assigns B+ Rating to INR31MM LT Loan --------------------------------------------------------- CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-term bank facilities of Sri Kangeyaa Textiles Pvt Ltd (SKTPL). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Proposed Working 4 CRISIL B+/Stable Capital Facility Cash Credit 25 CRISIL B+/Stable Long Term Loan 31 CRISIL B+/Stable The rating reflects SKTPL's modest scale of operations in the intensely competitive and highly fragmented textile industry. This rating weakness is partially offset by its promoter's extensive industry experience. Outlook: Stable CRISIL believes SKTPL will continue to benefit over the medium term from its promoter's extensive experience in the textile industry. The outlook may be revised to 'Positive' if the company reports a sustainable increase in revenue and profitability, while maintaining working capital cycle, thereby improving its business risk profile. Conversely, the outlook may be revised to 'Negative' if SKTPL generates low cash accruals or undertakes large debt- funded capital expenditure programme, weakening its financial risk profile. Incorporated in 2005, Madurai (Tamil Nadu)-based SKTPL manufactures cotton yarn. Its operations are managed by promoter Mr. V Kariveeran. For 2014-15 (refers to financial year, April 1 to March 31), on a provisional basis, SKTPL reported profit after tax (PAT) of INR4.97 million on total revenue of INR112.21 million; for 2013- 14, the company reported PAT of INR1.12 million on total revenue of INR103.13 million. SRI PARAMESWARA: CRISIL Cuts Rating on INR190MM Cash Loan to D -------------------------------------------------------------- CRISIL has downgraded its ratings on the bank facilities of M/s. Sri Parameswara Poultry Farm Pvt Ltd (SPPL) to 'CRISIL D/CRISIL D' from 'CRISIL B+/Stable/CRISIL A4'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 190 CRISIL D (Downgraded from 'CRISIL B+/Stable') Proposed Long Term Bank Loan Facility 47.5 CRISIL D (Downgraded from 'CRISIL B+/Stable') Short Term Loan 38 CRISIL D (Downgraded from 'CRISIL B+/Stable') The rating downgrade reflects instances of delay by SPPL in servicing its debt. The delays have been caused by weakening in the company's liquidity arising from a stretch in its working capital cycle. SPPL has a below-average financial risk profile marked by high gearing and below-average debt protection metrics. The company's profitability margin is susceptible to volatility in raw material prices. Also, SPPL is exposed to intense competition and to risks inherent in the poultry industry. However, the company benefits from its promoters' extensive experience. SPPL was set up in 2010 by Mr. B Siva Babu and family members. The company is engaged in the production of commercial eggs. It is based in Shadnagar (Telangana). UNIVERSAL AIR: CRISIL Ups Rating on INR155MM Term Loan to 'B' ------------------------------------------------------------ CRISIL has upgraded its rating on the long-term bank facilities of Universal Air Products Pvt Ltd (UAPPL) to 'CRISIL B/Stable' from 'CRISIL D'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 35 CRISIL B/Stable (Upgraded from 'CRISIL D') Term Loan 155 CRISIL B/Stable (Upgraded from 'CRISIL D') The rating upgrade reflects the improvement in UAPPL's liquidity driven by increase in cash accruals owing to improved operating profitability, and reduced interest outgo. With decrease in contribution from the company's wire trading business, which entails low margins, UAPPL's overall operating profitability has improved. Furthermore, there has been a decline in debt levels primarily on account of debt repayment, which has led to lower interest outgo. Outlook: Stable CRISIL believes that the extensive experience and technical background of promoters will continue to benefit the company. The outlook may be revised to Positive if the company generates significantly more than expected cash accruals and demonstrates stricter control on the working capital cycle. Conversely, the outlook may be revised to Negative in case of deterioration in the liquidity profile of the company on account of lower than expected cash accruals or stretch in working capital cycle or if the company takes up a large debt funded capital expenditure. The rating reflects UAPPL's modest scale of, and working-capital- intensive, operations. These rating weaknesses are mitigated by the benefits that the company derives from its promoter's extensive experience in the industrial gas industry, and its above-average financial risk profile, marked by adequate debt protection metrics and moderate gearing, albeit constrained by modest net worth. UAPPL, incorporated in 2004 by Mr. Subasish G Roy, bottles industrial gases such as oxygen, nitrogen, and carbon dioxide. The company has bottling units at Peenya, Mysore, Jigani, and Oskote (all in Karnataka). Its registered office is in Bengaluru. ********* 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 ***