/raid1/www/Hosts/bankrupt/TCRAP_Public/151002.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
Friday, October 2, 2015, Vol. 18, No. 195
Headlines
A U S T R A L I A
CBJ INTERNATIONAL: Placed Into Liquidation
FP TURBO 2007-1: Moody's Assigns B1(sf) Rating to Class F-g Notes
L'HAYYIM PTY: First Creditors' Meeting Set For Oct. 8
ORIGIN ENERGY: S&P Affirms 'BB' Rating on Subordinated Debt
SOUNDWAVE FESTIVAL: Former Operating Company in Administration
YATANGO MOBILE: First Creditors' Meeting Set for Oct. 12
C H I N A
CHINA: Hard Landing Will Hit HK, Korea, Japan Hardest, Fitch Says
CHINA GENSING: Needs More Time to File Fiscal 2015 Form 10-K
CHINA GUANGFA: Moody's Raises Rating to Ba1; Outlook Stable
SOHO CHINA: Moody's Retains Ba2 CFR on Cash Tender Offer
I N D I A
A.S. REDDY: ICRA Assigns B- Rating to INR6.0cr Cash Loan
ADARSH SAMAJ: ICRA Assigns 'B' Rating to INR8.20cr Loan to B
ANDHRA PRADESH: ICRA Reassigns D Rating to INR1,951.6cr Loan
ARIHANT JEWELS: ICRA Suspends B+ Rating on INR5.0cr Cash Loan
ASIAN SOCIETY: CRISIL Ups Rating on INR107.6MM Term Loan to B+
BHAGWATI RICE: ICRA Reaffirms B+ Rating on INR28.4cr Loan
D.G. COLD: ICRA Reaffirms 'C' Rating on INR8.0cr Cash Loan
DAAJ HOTELS: ICRA Lowers Rating on INR79.50cr Term Loan to D
DELHI INTERNATIONAL: S&P Affirms 'BB' CCR; Outlook Stable
ELKOSTA GROUP: CRISIL Lowers Rating on INR70MM Loan to 'B'
EXODUS ISPAT: CRISIL Assigns B+ Rating to INR35MM Cash Loan
HOLIDAY VILLAGE: CRISIL Reaffirms D Rating on INR151.2MM Loan
IMPRINT VINIMAY: ICRA Ups Rating on INR22.50cr Demand Loan to C-
INDIAN OVERSEAS: S&P Affirms 'BB+' ICR; Outlook Stable
LAKSHMI TRANSFORMERS: CRISIL Reaffirms B Rating on INR45MM Loan
LAKSHMI VENKATA: ICRA Reaffirms B- Rating on INR6.10cr LT Loan
M. K. GUPTA: ICRA Assigns B+ Rating to INR4.77cr Fund Based Loan
OM TRADING: ICRA Assigns 'B' Rating to INR4.95cr LT Loan
SAHARA GROUP: Gets SC Notice on Appointment of Receiver
SANSKAR BHARTI: ICRA Reaffirms B+ Rating on INR6.5cr Term Loan
SARDAR JEWELLERS: CRISIL Reaffirms B- Rating on INR90MM Loan
SHEETAL INDUSTRIES: ICRA Assigns B+ Rating to INR11cr Cash Loan
SHREE GANPATI: CRISIL Assigns 'B' Rating to INR77MM LT Loan
SHYAM COAL: ICRA Reaffirms 'B+' Rating on INR7.0cr Cash Loan
SONU BUILDERS: CRISIL Reaffirms B+ Rating on INR30MM Cash Loan
SRI SARVARAYA: ICRA Assigns 'B' Rating to INR132cr Cash Loan
SUDALAGUNTA SUGARS: CRISIL Reaffirms B+ Rating on INR688MM Loan
SURAJMAL JAINARAYAN: Ind-Ra Assigns BB Long-Term Issuer Rating
SWAPNA ENTERPRISE: CRISIL Assigns B+ Rating to INR820MM Loan
TATA MOTORS: S&P Revises Outlook to Stable & Affirms 'BB' CCR
UNDAVALLI CONSTRUCTIONS: ICRA Puts B+ Rating on INR6.15cr Loan
WAAMAN PRODUCTS: CRISIL Reaffirms 'B' Rating on INR120MM LT Loan
I N D O N E S I A
SMARTFREN TELECOM: Fitch Affirms 'CCC(idn)' Long Term Rating
VALE INDONESIA: S&P Affirms 'BB' CCR; Outlook Stable
J A P A N
TOSHIBA CORP: Appoints New Board Members
P H I L I P P I N E S
BAYAN TELECOM: On Track to Exit Corporate Rehabilitation
S I N G A P O R E
JURONG AROMATICS: Placed in Receivership After Debt Talks Fail
S R I L A N K A
SRI LANKA INSURANCE: Fitch Affirms 'BB-' Rating; Outlook Stable
T H A I L A N D
SAHAVIRIYA STEEL: UK Unit Mothballs Redcar Plant, Axes 1,700 Jobs
V I E T N A M
VIETNAM NATIONAL: S&P Lowers CCR to 'B'; Outlook Stable
X X X X X X X X
* Asian High-Yield Corporate Default Rate will Stay Low in 2015
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A U S T R A L I A
=================
CBJ INTERNATIONAL: Placed Into Liquidation
------------------------------------------
Cliff Sanderson at Dissolve.com.au reports that CBJ International
Print Group Pty Ltd has been placed into liquidation.
Matthew Jess and Paul Burness from Worrells Solvency and Forensic
Accountants were appointed liquidators of the company on Aug. 11,
2015, the report discloses.
Established in 2009, CBJ International Print Group brokered nearly all
its printing from China. This includes screen print, offset print,
merchandising, point of sales and packaging products.
FP TURBO 2007-1: Moody's Assigns B1(sf) Rating to Class F-g Notes
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Moody's Investors Service has assigned a definitive rating to the
following notes issued by Perpetual Trustee Company Limited in its
capacity as trustee of FP Turbo Trust 2007-1 (Australia).
Issuer: FP Turbo Trust 2007-1 (Australia)
AUD35,578,947 Class A-g Notes, Assigned Aaa (sf)
AUD4,736,842 Class B-g Notes, Assigned Aa2 (sf)
AUD1,842,105 Class C-g Notes, Assigned A2 (sf)
AUD1,842,105 Class D-g Notes, Assigned Baa2 (sf)
AUD1,631,579 Class E-g Notes, Assigned Ba1 (sf)
AUD2,736,842 Class F-g Notes, Assigned B1 (sf)
The AUD 1,631,579 Seller 1A-g Note (collectively, the Green Notes) is
unrated. The minimum credit support levels are as follows:
For Class A and A-g Notes, 32.4%
For Class B and B-g Notes, 23.4%
For Class C and C-g Notes, 19.9%
For Class D and D-g Notes, 16.4%
For Class E and E-g Notes, 13.3%
For Class F and F-g Notes, 8.1%
For Seller 1A and 1A-g Notes, 5.0%
The issuance of the new Green Notes will not, in and of itself and at
this time, result in the reduction or withdrawal of the ratings of the
existing Class A, Class B, Class C, Class D, Class E, and Class F
notes.
The existing ratings are as follows:
Class A Notes, Aaa (sf);
Class B Notes, Aa2 (sf);
Class C Notes, A2 (sf);
Class D Notes, Baa2 (sf);
Class E Notes, Ba1 (sf); and
Class F Notes, B1 (sf).
The ratings address the expected loss posed to investors by the legal
final maturity. The structure allows for timely payment of interest
and the ultimate payment of principal with respect to Class A-g, B-g,
C-g, D-g, E-g and F-g notes by the legal final maturity.
The transaction is a cash securitization of operating, novated and
finance leases extended to Australian corporates, small and
medium-sized businesses and their employees. The leases are secured by
passenger cars, light and heavy commercial vehicles and equipment.
The transaction has a one-year revolving period, followed by the
scheduled amortization period.
FP Turbo Trust 2007-1 (Australia) is one of three Australian ABS rated
transactions issued by FleetPartners since 2010.
The Green Notes will reflect the same capital structure as the
existing notes and rank pari pasu with existing notes of the same
class.
FP Turbo Trust 2007-1 (Australia) will use the issuance proceeds of
the Green Notes to fund finance and operating leases for green
vehicles which comply with certain carbon dioxide emission standard at
a discounted interest rate.
RATINGS RATIONALE
The current portfolio backing the rated notes consists of vehicle and
equipment lease contracts with a weighted average seasoning of 20.8
months. The securitized portfolio totaled AUD485.5 million and has an
average portfolio residual value of 50.8%. The residual value (RV)
portion of the lease cash flows was set at closing of the lease
contracts, based on estimates of vehicle values at lease contract
maturity. The transaction is subject to both default and market or RV
risk of the underlying vehicles, because the lessees have the right to
return the vehicles at the contract maturity date to cover the final
lease balance outstanding under an operating lease.
Moody's analysis focused, amongst other factors, on: (1) an evaluation
of the credit quality of the underlying lessees; (2) an evaluation of
the underlying RV exposures; (3) back-up maintenance and servicer
solutions; (4) the credit enhancement provided by subordination; (5)
the liquidity support available in the transaction by way of principal
to pay interest, and the liquidity reserve fund.
Moody's applies a two-stage approach to modelling transactions with RV
risk. In the first step, Moody's models the expected loss on the notes
due to defaults. In the second step, additional losses resulting from
RV risk are modelled based on the RV haircuts applied at contract
maturity.
For the assessment of lessee default risk, Moody's determined the
lessee default distribution of the portfolio using CDOROM, which
simulates lessee defaults based on asset correlations and default
probability assumptions.
Moody's assumed a mean lessee default rate of 3.3%. For cash flow
modeling, Moody's assumed a recovery rate following lessee default of
45%. To account for RV risk in the portfolio, Moody's assumes a Aaa
haircut of 40%, a Aa2 haircut of 30.5%, an A2 haircut of 25.5%, a Baa2
haircut of 22%, a Ba1 haircut of 18%, and a B1 haircut of 11% on RV
cash flows.
During the revolving period, principal collections are first allocated
towards the purchase of new receivables. Remaining funds are allocated
to the remaining notes ensuring that required minimum CE levels are
maintained.
During the amortization period, all notes will be repaid sequentially.
If a Green Note amortization event occurs during the revolving period,
a proportion of the principal collections will be allocated senior in
the principal waterfall to redeem the Green Notes pro rata and pari
pasu. The amount of principal collections allocated to the Green Notes
will equal to the proportion of Green Notes to total outstanding notes
(including the Green Notes) as at the first day of the Green Note
amortisation period. The amount of principal collections allocated to
the Green Notes will be paid pro rata and pari passu to all classes of
Green Notes. This will mean that the credit enhancement will erode in
dollar terms as the junior Green Notes would be redeemed pari passu
with the senior Green Notes. However, the proportion of total Green
Notes relative to the total outstanding notes is currently less than
10% will provide the senior notes enough protection against erosion of
credit enhancement in dollar terms during such period.
A liquidity reserve equal to 2.5% of the outstanding amount of all
rated notes (with a hard floor of AUD300,000) provides support to the
transaction.
Methodology Underlying the Rating Action:
The principal methodology used in these ratings was Moody's Global
Approach to Rating Auto Loan- and Lease-Backed ABS published in
January, 2015. Please see the Credit Policy page on www.moodys.com for
a copy of this methodology.
Factors That Would Lead to an Upgrade or Downgrade of the Rating:
Factors that could lead to an upgrade or downgrade of the notes'
ratings include: (1) an improvement or deterioration in the credit
quality and performance of the collateral pool; (2) higher or lower
than expected recoveries on defaulted loans; and (3) higher or lower
than expected RV cash flows.
The Australian economy and the market for used vehicles are primary
drivers of performance.
Other reasons for worse performance than Moody's expects include poor
servicing, error on the part of transaction parties, a deterioration
in credit quality of transaction counterparties, lack of transactional
governance, and fraud
L'HAYYIM PTY: First Creditors' Meeting Set For Oct. 8
-----------------------------------------------------
Christopher John Palmer of O'Brien Palmer was appointed as
administrator of L'Hayyim Pty Ltd on Sept. 29, 2015.
A first meeting of the creditors of the Company will be held at
the offices of O'Brien Palmer, level 14, 9-13 Hunter Street, in
Sydney, on Oct. 8, 2015, at 10:00 a.m.
ORIGIN ENERGY: S&P Affirms 'BB' Rating on Subordinated Debt
-----------------------------------------------------------
Standard & Poor's Ratings Services said that it has affirmed its
'BBB-' corporate credit rating on Origin Energy Ltd. and the
'BBB-' ratings on the company's senior unsecured debt issued by Origin
Energy Finance Ltd. At the same time, S&P affirmed the short-term
rating on Origin at 'A-3' and the ratings on Origin Energy Finance's
subordinated debt issues at 'BB'. The outlook on the long-term rating
remains stable.
Origin announced a range of measures to strengthen its balance sheet
in light of the continued depressed oil price environment. These
include a A$2.5 billion equity raising, investment cutbacks and other
cash preservation measures of about A$1 billion, and reduction of
dividends by about 40%. With these measures, S&P forecasts Origin's
debt balance in the year ending June 30, 2018, will be about A$3.5
billion lower than S&P's prior forecast and corresponding to a
reduction of about 30%. From a financial ratio perspective, S&P
estimates that these measures improve the ratio of debt to EBITDA by
more than 100 basis points. To put this headroom in perspective, S&P
believes that it would be equivalent to the impact of a further
downward revision of our oil price assumptions by at least US$15 per
barrel.
"The affirmation of the ratings primarily reflects our view that the
capital management measures announced by Origin will considerably
strengthen the company's balance sheet in the medium term," Standard &
Poor's credit analyst Thomas Jacquot said. "In addition, following
completion of the Asia-Pacific liquefied natural gas (APLNG) project,
the measures will provide a comfortable buffer to Origin's financial
metrics in case of continuing depressed oil prices."
In fact, accounting for the equity raising and other measures
announced and all else being equal, S&P believes Origin's earnings
from its core business could support the company's leaner balance
sheet at the current rating level, with no reliance on APLNG cash
flows. Further, these measures provide concrete evidence that
management and the board are now willing to proactively tackle the
debt that Origin took on during the development phase of the APLNG
project.
In the context of the measures announced, S&P views the reduction in
dividends as less material from a quantitative perspective. Saying
that, S&P believes this willingness to cut dividends is further
evidence of the company's revised commitment to implement all possible
measures to support its balance sheet, ahead of its shareholders'
short-term interests.
Mr. Jacquot added: "The stable outlook reflects our expectation that
the APLNG project will be fully completed in the second half of fiscal
2016, with no material increase in Origin's capital contributions
beyond current commitments. After that stage and release of the
guarantees currently supporting the APLNG's debt, we view Origin's
exposure to volatile oil prices as significantly reduced, thereby
supporting our outlook."
The stable outlook further reflects S&P's expectation of a stable
operating environment for Origin Energy's energy market segment,
enabling modest underlying growth over the medium term (excluding the
increase generated by gas sales to other LNG projects in Queensland).
Furthermore, the outlook reflects S&P's expectation that Origin
Energy's debt-to-EBITDA ratio will drop below 4x in fiscal 2017 and
beyond.
Positive rating movements will remain constrained in the near term
until both trains for APLNG have been successfully completed, entered
revenue service, and Origin is no longer directly exposed to the
project through the current guarantees. Beyond that, the oil price
environment and the company's potential willingness to return cash to
shareholders will likely drive any potential positive rating momentum.
In S&P's view, a prerequisite will be its confidence that Origin would
maintain its debt to EBITDA ratio below 3x, together with continued
solid operating performance from the group's core energy market
businesses.
Absent major and material problems in the commissioning and start-up
of APLNG, S&P believes the risk of negative rating action has abated
given that the company has realigned its capital structure to the
current oil price environment. In S&P's view, post completion, the
company will be able to sustainably withstand oil price levels that
are materially lower than current levels. Even in those scenarios,
S&P believes that the company would take proactive measures to support
its balance sheet. All else being equal, a ratio of debt to EBITDA
sustainably above 4x from fiscal 2017 and beyond would place pressure
on the rating.
SOUNDWAVE FESTIVAL: Former Operating Company in Administration
--------------------------------------------------------------
Michael Carr at Music Feeds reports that Soundwave Festival's former
operating company is going into voluntary administration.
Music Feeds relates that a preliminary directions hearing was held at
the NSW Supreme Court on September 29, following an application filed
by World Stages Pty Ltd on August 28, seeking to wind up the company's
operations over an unpaid debt. World Stages were themselves forced in
liquidation on July 16th this year, the report notes.
Music Feeds has learned that Soundwave also owes a substantial amount
of money to a number of other creditors. This is in addition to AUD2.5
million owed to the Australian Taxation Office, the report notes.
AJ Maddah changed the name of Soundwave Festival Pty Ltd twice last
month. On September 24 the company name was changed briefly to Penny
Denny Pty Ltd, only to be changed once more the following day to ACN
127 870 866 PTY LTD, the report says.
The official hearing will be heard on October 19, the report notes.
Soundwave Festival Pty Ltd has been the name of the operating company
of AJ Maddah's flagship festival since 2007 and Maddah is the sole
shareholder. Speaking to Music Feeds on September 29 Maddah has stated
this company ceased to be the operating company of Soundwave Festival
in April this year.
Maddah has assured Music Feeds that the 2016 festival will definitely
still go ahead, reiterating that the company under administration is
the festivals' former operating company and that proceedings will not
affect next year's event.
The 2016 festival is scheduled to kick off in Brisbane on 23rd
January, before making its way to Sydney on Sunday, 24th January and
Melbourne on Tuesday, 26th January. The full Soundwave Festival 2016
line-up is due to be announced in the coming weeks, the report notes.
YATANGO MOBILE: First Creditors' Meeting Set for Oct. 12
--------------------------------------------------------
Hugh Armenis and Katherine Elizabeth Barnet of Bentleys Corporate
Recovery were appointed as administrators of Yatango Mobile
(Australia) Pty Ltd on Sept. 29, 2015.
A first meeting of the creditors of the Company will be held at
Level 3, 1 Castlereagh Street, in Sydney, on Oct. 12, 2015, at 11:00 a.m.
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C H I N A
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CHINA: Hard Landing Will Hit HK, Korea, Japan Hardest, Fitch Says
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A Chinese "hard landing" would have a significant impact on global
growth and economic stability, with economies in Asia and major
emerging market commodities exporters among the hardest hit, says
Fitch Ratings. Besides China itself, Hong Kong, Korea and Japan would
be the most affected major economies in the event of a sharp slowdown
in Chinese GDP growth.
Fitch's base case forecasts China's economy to expand by 6.8% and 6.3%
in 2015 and 2016 respectively. But in the latest Global Economic
Outlook report, Fitch assessed an alternative scenario in which
China's economic growth falls below 3% in 2016 driven by a collapse in
public and private investment. Fitch's assumptions in the shock
scenario included a contraction in public investment of 4% in 2016 and
deceleration in consumption growth to 5.6% in 2017 from 8.3% in 2014.
This would result in asset-quality deterioration with a spike in the
banking system NPL ratio to 8%, a cumulative 10% depreciation in
CNY/USD, a double-digit percentage decrease in foreign direct
investment and a peak to trough fall in home prices of over 4%.
According to the analysis, which used Oxford Economics' global
macroeconomic model, the impact would be greatest within Asia. The
resulting decline in trade combined with the regional investment
exposures to China would weigh most on the export-centred economies of
Hong Kong and Korea, with the cumulative reduction in GDP from the
2017 baseline amounting to 4.5pp and 4.3pp respectively. Japan would
enter a deep recession, with the economy contracting in both 2016 and
2017 and its GDP down by 3.6pp by 2017 versus our base case estimates.
Taiwan and Singapore would also face significant slowdowns, though not
as severe, with GDP falling by 3.3pp and 3.0pp from the baseline
respectively.
GDP growth in the Association of Southeast Asian Nations (ASEAN)
economies of Indonesia, Malaysia, Thailand and the Philippines would
be less affected by the direct feedthroughs of a China hard landing,
though they would still face a cumulative GDP effect of around -2pp.
Australia would be affected to a similar extent as the aforementioned
ASEAN economies. Australia has large exposures through its direct
trading relationship with China, but it would be able to offset some
of the negative impact through counter-cyclical policy. As a
'AAA'-rated developed economy, Australia benefits from sound
fundamentals, which will help to stabilise the economy during a
broader global downturn.
At the global level, a Chinese contraction would intensify deflation
risks. This is especially the case for the euro zone, where demand
has remained persistently weak and inflation low. That said, developed
countries other than Japan would fare relatively better than their EM
counterparts. Relative to the baseline, the cumulative effect on US
and euro zone GDP would be -1.5pp and -1.7pp respectively, implying
average annual growth rates of around 1.7% in the US and 0.8% in the
euro zone for 2016-2017.
Major emerging markets outside Asia, especially the commodities
exporters such as Brazil and Russia, would be doubly impacted by the
effects on energy and materials prices and the risk premium shock that
would raise borrowing costs and weigh on domestic demand. However,
they would not be as heavily affected as the trade-reliant economies
within Asia, with a Chinese hard landing likely to reduce GDP from the
baseline by around 3pp for Brazil and 2.8pp for Russia.
CHINA GENSING: Needs More Time to File Fiscal 2015 Form 10-K
------------------------------------------------------------
China Ginseng Holdings Inc. was unable to file its annual report on
Form 10-K for the fiscal year ended June 30, 2015, by the filing date
of Sept. 28, 2015, due to a delay experienced by the Company in
completing its financial statements and other disclosures in the
Annual Report.
The Company is still in the process of compiling the required
information to complete the Annual Report and its independent
registered public accounting firm requires additional time to
complete its audit of the financial statements for the fiscal
yearended June 30, 2015, to be incorporated in the Annual Report. The
Company anticipates that it will file the Annual Report no later than
the 15 calendar days following the prescribed filing date.
About China Ginseng
Changchun City, China-based China Ginseng Holdings, Inc., conducts
business through its four wholly-owned subsidiaries located in China.
The Company has been granted 20-year land use rights to 3,705 acres of
lands by the Chinese government for ginseng planting and it controls,
through lease, approximately 750 acres of grape vineyards. However,
recent harvests of grapes showed poor quality for wine production
which indicates that the
vineyards are no longer suitable for planting grapes for wine
production. Therefore, the Company has decided not to renew its
lease for the vineyards with the Chinese government upon
expiration in 2013 and, going forward, it intends to purchase
grapes from the open market in order to produce grape juice and
wine.
China Ginseng reported a net loss of $4.76 million on $2.61
million of revenue for the year ended June 30, 2014, compared to a net
loss of $3.64 million on $3.56 million of revenue for the year ended
June 30, 2013.
As of March 31, 2015, the Company had $8.92 million in total
assets, $16.2 million in total liabilities, and a $7.24 million
total stockholders' deficit.
Cowan, Gunteski & Co., P.A., in Tinton Falls, NJ, issued a "going
concern" qualification on the consolidated financial statements
for the year ended June 30, 2014. The independent auditors noted
that the Company has incurred an accumulated deficit of
$14.2 million since inception, has a working capital deficit of
$11.6 million, and there are existing uncertain conditions the
Company faces relative to its ability to obtain working capital
and operate successfully. These conditions raise substantial
doubt about its ability to continue as a going concern.
CHINA GUANGFA: Moody's Raises Rating to Ba1; Outlook Stable
-----------------------------------------------------------
Moody's Investors Service has upgraded the foreign currency long-term
deposit rating of China Guangfa Bank Co., Ltd. (CGB) to Ba1, from Ba2,
and affirmed the bank's foreign currency short-term deposit rating at
Not Prime.
Moody's has also affirmed the bank's baseline credit assessment (BCA)
and Adjusted BCA at ba3.
In addition, Moody's has assigned a Counterparty Risk Assessment (CR
Assessment) of Ba1(cr)/NP(cr).
The outlook on all ratings is stable.
RATINGS RATIONALE
The rating upgrade reflects Moody's expectation that CGB will receive
a high level of extraordinary support from the Chinese government (Aa3
stable), if needed. This assumption of government support results in
a two-notch uplift from its ba3 BCA to its final Ba1 deposit rating.
Moody's expectation of government support for CGB is underpinned by
the bank's entrenched position in the banking sector as a nationwide
joint-stock commercial bank with a sizable market share of system
deposits and loans of around 1%, as well as its significant presence
in Guangdong Province, where it is headquartered.
CGB's importance to the economy is also evidenced by the involvement
of both central and local governments in its previous reorganization
in 2005. In addition, its systemic importance in the eyes of the
authorities is evidenced by its annual disclosure of 12 indicators
used by the Chinese Banking Regulatory Commission to classify a bank
as systemically important, as is required for all banks with adjusted
on balance sheet and off balance sheet assets exceeding RMB1.6
billion.
At the same time, the rating uplift also considers the bank's
ownership by several state-owned entities, which raises the prospect
that extraordinary support in time of crisis could be extended to the
bank through one or more of these government-related shareholders.
At end-2014, the bank's largest shareholders included three
state-owned entities: China Life Insurance Co Ltd (Aa3 stable), State
Grid Yingda International Holdings Co., Ltd. (unrated), CITIC Trust
Co., Ltd. (unrated), each with a 20% stake.
CGB's ba3 BCA reflects its modest capital adequacy, weakening asset
quality and small franchise. The BCA also incorporates its sound
liquidity profile and moderate profitability.
CGB's capital position has been consistently low among Chinese banks,
partly reflecting its status as an unlisted company. Its core tier 1
ratio of 8.1% at end-2014 was lower than the system average of 10.6%.
CGB's asset quality has deteriorated due to China's slowing economy
and the bank's focus on personal operating loans and credit card
business. Its 90+ days delinquencies loans increased to 1.63% of
total loans at end-2014 from 0.86% a year ago.
Because its franchise is smaller than that other joint-stock
commercial banks, the bank is more challenged compared to this peer
group on average in managing its funding costs at a time of interest
rate liberalization. Its average deposit cost increased to 3.24% in
2014 from 2.86% in 2013, amid intensifying competition for deposits.
The bank's profitability was negatively affected by these high funding
costs and increasing provisioning needs to cover asset quality risks.
Its return on average assets dropped to 0.77% in 2014 from 0.88% in
2013.
Nevertheless, its revenue structure has been improving as the bank is
increasingly focused on its retail business. In 2014, the bank's
retail business contributed 46.3% of total revenues, up from 44.0% in
2013. Its pre-provisioning profits increased by 43.8% in 2014 to
RMB24.3 billion due to increasing yields on interest bearing assets
and fees and commissions from credit card business, despite higher
funding costs.
CGB maintains adequate liquid resources, with total liquid assets
accounting for around 39.4% of total assets at end-2014 -- sufficient
to cover its market funds.
However, Moody's notes that interbank assets accounted for 14.6% of
its total assets at end-2014. The liquidity of these assets is likely
to weaken when market conditions deteriorate since the counterparts
are likely to be facing their own liquidity challenges in such
conditions. Meanwhile, the percentage of investment receivables
increased to 10.6% of total assets at end-2014 from 6.3% a year ago.
These investments, most of which are packaged by other banks,
securities firms and trust companies, have relatively weak liquidity
since their underlying investments comprise repackaged loans.
WHAT COULD CHANGE THE RATING UP/DOWN
CGB's deposit ratings could be upgraded if its standalone BCA is
revised upwards. An upward adjustment of CGB's BCA and deposit
ratings would require the bank to demonstrate a consistent and solid
financial performance, against the backdrop of slower economic growth
in China, and increasing competition in the banking sector.
In addition, given the bank's limited franchise and modest capital
adequacy, any material improvement in its market share or capital
ratios would be positive for the bank's ratings.
CGB's BCA and deposit ratings could come under downward pressure if:
(1) its core Tier 1 capital ratio drops to 7%; (2) its net income to
tangible assets falls to 0.5%; (3) its NPL ratio is trending towards
rising to above 4% or if its 90+ day delinquency ratio trending
towards 5%; or (4) there is a significant weakening of its liquidity
position.
CR ASSESSMENT
For CGB, the CR Assessment is positioned, prior to government support,
at one notch above the Adjusted BCA, reflecting Moody's view that its
probability of default is lower than those of senior unsecured debt
and deposits in absence of government support.
CGB'S CR assessment also benefited from one notch of government
support, broadly in line with Moody's support assumptions on deposits.
This reflects Moody's view that any support provided by governmental
authorities to a bank, which benefits deposits, is very likely to
benefit operating activities and obligations reflected by the CR
Assessment as well, consistent with Moody's belief that governments
are likely to maintain such operations as a going-concern in order to
reduce contagion and preserve a bank's critical functions.
As a result, the CR Assessments for Chinese banks could be positioned
at one notch higher than their deposit ratings. However, for Chinese
banks whose deposit ratings already incorporate a very high or high
level of government support, their CR Assessments are typically
positioned at the deposit ratings, reflecting Moody's view that the
probability of default on their operating liabilities would not be
materially different from that of deposits after government support
and in the event of bank resolution. In arriving at this view,
Moody's has taken into account the fact that China does not have a
transparent operational resolution regime that creates confidence that
operating liabilities have a lower probability of default for banks
whose deposit ratings also benefit from a material amount of
government support. Also, Moody's judgment is that supporting
deposits is likely to be one of the Chinese government's highest
priorities when it provides extraordinary support to prevent a bank
failure.
China Guangfa Bank Co., Ltd. is headquartered in Guangzhou. It
reported total assets of RMB1.65 trillion at end-2014.
The Local Market Analyst for this rating is Yulia Wan, +86 (21) 2057 4017.
SOHO CHINA: Moody's Retains Ba2 CFR on Cash Tender Offer
--------------------------------------------------------
Moody's Investors Service says SOHO China Limited's Sept. 25, 2015,
announcement that it had commenced a cash tender offer for its
outstanding USD400 million 7.125% senior unsecured notes due 2022 is
credit positive.
However, such a proposal will not have an immediate impact on its Ba2
corporate family and senior unsecured bond ratings and stable outlook.
Moody's believes that the company has adequate cash to cover its tender offer.
SOHO China announced on 23 September 2015 that it has entered into an
agreement to effectively unwind its 50% stake in Shanghai Haizimen, a
50/50 joint-venture with Fosun International Limited (Ba3, stable).
As a result, SOHO China will receive RMB4.6 billion in proceeds.
These developments are credit positive because SOHO China will reduce
its project-development commitments in the joint-venture project amid
a slowing Chinese economy.
In addition, the company will be able to maintain its prudent
financial management by reducing debt with its own cash.
If the company is able to redeem about 50% of the outstanding notes,
then the company's EBITDA interest coverage in 2016 will improve to
1.4x from 1.3x, and its debt to total assets to around 27% from 29%,
respectively.
The principal methodology used in these ratings was Global Rating
Methodology for REITs and Other Commercial Property Firms published in
July 2010.
SOHO China Limited, incorporated in March 2002 and listed on the Hong
Kong Stock Exchange in October 2007, develops, leases and manages
commercial properties in Beijing and Shanghai's core business
districts.
=========
I N D I A
=========
A.S. REDDY: ICRA Assigns B- Rating to INR6.0cr Cash Loan
--------------------------------------------------------
ICRA has assigned the long-term rating of [ICRA]B- to the INR6.00
crore cash credit limits of A.S. Reddy Infratech Private Limited. ICRA
has also assigned the long term/short term rating of [ICRA]B-/[ICRA]A4
to the INR4.00 crore unallocated limits of ASRIPL.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 6.00 [ICRA]B- assigned
Unallocated limits 4.00 [ICRA]B-/[ICRA]A4 assigned
The assigned ratings take into account the stretched liquidity
position of the company indicated by high working capital intensity of
101% in FY15 owing to high debtor days, small scale of operations with
operating income of INR6.45 crore in FY15, and high geographic and
client concentration with entire order book comprising of one single
project received from Uttar Pradesh Nirman Nigam Limited (UPNNL) for
construction of sports hostel in Uttar Pradesh. The rating is further
constrained by the weak financial profile of the company characterized
by low profitability, highly geared capital structure and stretched
coverage indicators. The ratings, however, favourably factors in the
established relationships with the customers resulting in repeated
orders from existing clients.
Going forward, the ability of the company to execute the existing
order in a timely manner and manage its working capital requirement
will be the key rating sensitivity from the credit perspective.
A.S. Reddy Infratech Private limited (ASRIPL) is a Hyderabad based
infrastructure and engineering construction company involved in the
execution of civil construction works. The firm mainly executes civil
construction works for the government departments. The current
unexecuted order book comprises of the construction of sports hostel
for the government of Uttar Pradesh on behalf of Uttar Pradesh Nirman
Nigam Limited.
Recent Result
According to audited FY2014 results, the firm recorded an operating
income of INR4.35 crore with a net profit of INR0.05 crore. As per
provisional FY2015 numbers, the firm estimates an operating income of
INR6.45 crore with a net profit of INR0.06 crore.
ADARSH SAMAJ: ICRA Assigns 'B' Rating to INR8.20cr Loan to B
------------------------------------------------------------
ICRA has assigned its long term rating of [ICRA]B to the INR10.0 crore
term loans and fund based facilities of Adarsh Samaj Kalyan Sansthan.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term Loan 8.20 [ICRA]B; assigned
Cash Credit 1.25 [ICRA]B; assigned
Unallocated 0.55 [ICRA]B; assigned
ICRA's rating favourably factors in the experience of ASKS' promoters
in the field of education, the satisfactory operating metrics of ASKS'
school as reflected in occupancy of 88% in Academic Year 15 (AY15)
with a student strength of 1400, and the school's adequate
infrastructure. The ratings are however constrained by the society's
weak coverage indicators (DSCR of 0.90, Debt/Operating Surplus of
4.70x) which are expected to see further deterioration on account of
ongoing debt funded capital expenditure. Consequently, pending
adequate ramp up in operating metrics of the new school facility, the
society is expected to remain dependent on additional promoter
funding. The rating also factors in competition from other similar
residential schools and exposure to regulatory risks, as is prevalent
in the education sector.
Going forward, ASKS's ability to improve its operating and debt
coverage metrics and receive promoter support when required, will be
the key rating sensitivities.
ASKS is an education society registered in September 2004, under the
U.P. Society Registration Act. The society currently runs a K-12
school at Lucknow, Uttar Pradesh under the name of 'Surya Public
School'. The school is an English medium school affiliated to the
Central Board of Secondary Education, providing day boarding
facilities and commenced operations in 2008. The current student
strength of the school is 1400 (AY2014-15). The society has completed
the construction of the swimming pool, gym and the hostel in Q2FY16
and has started the construction of the second school which is
expected to become operational in AY2016-17.
Recent Results
ASKS reported a net surplus of INR0.55 crore on revenue receipts of
INR2.55 crore in 2013-14 as compared to a net surplus of INR0.52 crore
on a revenue receipts of INR2.19 crore in 2012-13.
ANDHRA PRADESH: ICRA Reassigns D Rating to INR1,951.6cr Loan
------------------------------------------------------------
ICRA has reassigned the ratings on the INR4,053.3 crore long term bond
programmes of Andhra Pradesh Power Finance Corporation Limited to
[ICRA]D.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bond
Programme 1,951.6 [ICRA]D; reassigned
Long-term Bond
Programme 314.1 [ICRA]D; reassigned
Long-term Bond
Programme 1,787.6 [ICRA]D; reassigned
ICRA had earlier assigned a rating of [ICRA]A(SO) with negative
outlook to the aforesaid bond programmes. ICRA ratings were based on
the strength of an unconditional and irrevocable guarantee from the
Government of Andhra Pradesh and the structured payment mechanism
designed to ensure timely payment on the rated bonds. ICRA notes that
the Trustee did not invoke the guarantee, leading to delays on the
debt servicing in the recent past.
Since the structured payment mechanism involving timely invocation of
the guarantee by the Trustee in the event of a funding shortfall has
not functioned, the existing rating on the bonds is not meaningful.
APPFC was incorporated in July 2000 by GoAP with the main objective of
acquiring shares or providing long-term finance to enterprises wholly
engaged in the business of developing, maintaining and operating in
the power sector. APPFC is registered as a Non-banking Finance Company
(NBFC) with Reserve Bank of India (RBI).
As on March 31, 2013, APPFC had a net worth of INR29 crore and its
outstanding borrowings were INR5,929 crore. The capital structure of
the corporation is weak (gearing of 204 times as on March 31, 2013),
however the borrowings are fully guaranteed by the GoAP and debt
servicing is funded through budgetary provisions. So far, APPFC has
borrowed funds on behalf of State Government of undivided AP and
transferred these funds to the latter on cost basis.
The ratings of the aforesaid bonds programme of APPFC was placed on
watch with developing implications in June 2014 following the
bifurcation of the State of Andhra Pradesh into the successor States
of Telangana and residuary Andhra Pradesh (AP) on June 2, 2014. In
pursuance of the section 53 of the AP Reorganisation Act 2014, a
separate Telangana Power Finance Corporation Limited was created for
Telangana State and existing APPFC continued for residuary AP State.
The outstanding bonds of APPFC were allocated between Telangana and
residuary AP State in the ratio 59.54% and 40.46% respectively.
ARIHANT JEWELS: ICRA Suspends B+ Rating on INR5.0cr Cash Loan
-------------------------------------------------------------
ICRA has suspended the long term rating of [ICRA]B+ assigned to the
INR5.00 crore bank facilities of Arihant Jewels. The suspension
follows ICRAs inability to carry out a rating surveillance due to non
cooperation from the company.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- Cash
Credit Limit 5.00 [ICRA]B+; suspended
Arihant Jewels (AJ) was incorporated as a partnership firm in the year
2011 by Mr Ankit Sagar, Mr Jigar Hebra and Mr. Maulik Shah prior to
which it operated as a proprietorship firm since 2009. Mr. Jigar Hebra
is also director in another group concern Bhagya Diamond Jewellery
Private Limited engaged into similar line of business. The business is
operated from its office/showroom located at Ahmedabad. AJ in engaged
primarily in gold jewellery trading.
ASIAN SOCIETY: CRISIL Ups Rating on INR107.6MM Term Loan to B+
--------------------------------------------------------------
CRISIL has upgraded its rating on the long-term bank facilities of
Asian Society of Film and Television (ASFT) to 'CRISIL B+/Stable' from
'CRISIL B/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Term Loan 72.4 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
Term Loan 107.6 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
The upgrade reflects ASFT's improved liquidity marked by expected cash
accrual of INR42-50 million against debt obligation of INR30.2 million
in 2015-16 (refers to financial year, April 1 to March 31) and
2016-17, and absence of significant capital expenditure plan over the
near term. The upgrade also factors in expected growth in revenue. In
2014-15, revenue increased 43 per cent year-on-year due to aggressive
marketing and admission strategies. It is expected to grow by more
than 50 per cent in academic session 2015-16 backed by healthy
response, and is likely to receive a further boost from addition of
three courses (performing arts, music production, and bachelor of
business administration) by the next session. Operating margin was
healthy, at 20-25 percent in past three years through 2014-15. Gearing
improved to 1.08 times as on March 31, 2015, from 1.56 times as on
March 31, 2014, on account of reducing long-term debt. CRISIL
believes, that with repayment of existing term debt and with no
anticipated additional debt in near term the gearing will improve
further to below 0.8 times by March 31, 2016.
The rating reflects ASFT's modest scale of operations, though growing
and its susceptibility to regulatory restrictions in the education
sector. These weaknesses are partially offset by low competition for
its niche courses, and healthy demand prospects for education in
India; and healthy operating margins leading to comfortable debt
protection metrics.
Outlook: Stable
CRISIL believes ASFT will continue to benefit over the medium term
from its promoter's extensive industry experience and its niche
courses. The outlook may be revised to 'Positive' if revenue increases
significantly because of expected incremental intake while
profitability remains stable, and if capital structure improves.
Conversely, the outlook may be revised to 'Negative' if financial risk
profile weakens because of decline in revenue and profitability, or if
the society undertakes a large debt-funded capital expenditure
programme, or if liquidity weakens significantly on account of delay
in fee collection.
Set up in 2003 by Mr. Sandeep Marwah, ASFT operates two institutes in
Noida (Uttar Pradesh): Asian School of Media Studies (ASMS) and Asian
Business School (ABS). ASMS offers degree and diploma courses in
filmmaking, and ABS provides diploma courses in management. ASMS is
affiliated to Punjab Technical University and University of Central
Lancashire, UK. Courses offered by ABS are approved by the All India
Council for Technical Education.
ASFT, has reported, on provisional basis, fee receipts and related
income of INR198 million and net profit of INR22 million for 2014-15,
against fee receipts and related income of INR139 million and net
profit of INR14 million for 2013-14.
BHAGWATI RICE: ICRA Reaffirms B+ Rating on INR28.4cr Loan
---------------------------------------------------------
ICRA has re-affirmed the [ICRA]B+ rating for INR28.40 crore bank lines
(Enhanced from INRRs. 17.75 crore) of Bhagwati Rice Mill (P) Ltd.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based Facilities 28.40 [ICRA]B+ (reaffirmed)
The rating reaffirmation factors in BRM's weak financial profile
reflected by low operating margins on account of fall in realization
of basmati rice coupled with high gearing level. The rating continues
to be constrained by high intensity of competition in the industry and
agro climatic risks, which can affect the availability of paddy in
adverse weather conditions. The rating, however favorably takes into
account long standing experience of promoters in rice industry and
proximity of the mill to major rice growing area which results in easy
availability of paddy.
Bhagwati Rice Mill (P) Ltd (BRM) was established in 1996. The company
is primarily engaged in milling of rice. BRM's milling unit is based
out of Mainpuri, Uttar Pradesh and is in close proximity to the local
grain market. BRM sells rice under its 4 different regional brands --
Shree, Hathi, Gulab and Ujjwal in the domestic market.
Recent Results
The company reported net profit after tax of INR0.10 crore on an
operating income of INR108.93crore during FY2015 as against a net
profit after tax of INR0.04 crore on an operating income of INR53.39
crore during FY2014.
D.G. COLD: ICRA Reaffirms 'C' Rating on INR8.0cr Cash Loan
----------------------------------------------------------
ICRA has reaffirmed the long-term rating assigned to INR8.00 crore
(revised from INR8.40 crore) cash credit facility, INR2.58 crore
(revised from INR4.21 crore) term loans, INR0.22 crore non-fund based
facility and INR4.20 crore (revised from 2.17 crore) unallocated bank
limits of D.G. Cold Storage Private Limited at [ICRA]C.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 8.00 [ICRA]C reaffirmed
Term Loans 2.58 [ICRA]C reaffirmed
Non Fund Based 0.22 [ICRA]C reaffirmed
Unallocated 4.20 [ICRA]C reaffirmed
The rating continues to take into consideration high working capital
requirement of the company during the storage period, on account of
upfront advances extended to the farmers at the time of storing
potatoes, impacting liquidity position, DGCSPL's weak financial
profile reflected by nominal profits, adverse capital structure, weak
debt coverage indicators and the small scale of its operations with a
single cold storage unit. The rating also takes into account the
company's exposure to agro-climatic risks, with its business
performance being entirely dependent upon a single agricultural
commodity, i.e. potato and the counter party risk arising from loans
extended to farmers, which may lead to high delinquency, if potato
prices fall to a low level. ICRA also considered the regulated nature
of the industry, making it difficult to pass on the increase in the
operating costs in a timely manner, leading, in turn, to a downward
pressure on profitability. The rating, however, favourably takes into
account the long track record of the promoters in the cold storage
business, and the locational advantage of DGCSPL by way of presence of
its cold storage unit in West Bengal, a state with large potato
production.
DGCSPL is promoted by the Bose family and operates one cold storage
unit at Kathpara in the Jalpaiguri district of West Bengal. The
storage capacity of the unit is 24,000 tonnes. DGCSPL provides cold
storage facilities to potato growing farmers and traders and also
engages in trading of potatoes.
Recent Results
DGCSPL reported a net profit of INR0.07 crore during FY14 on an OI of
INR5.31 crore as against a net profit of INR0.18 crore and an OI of
INR3.13 crore during FY13.
DAAJ HOTELS: ICRA Lowers Rating on INR79.50cr Term Loan to D
------------------------------------------------------------
ICRA has revised the long term rating assigned to INR79.50 crore term
loan facility of Daaj Hotels and Resorts Private Limited to [ICRA]D
from [ICRA]C+.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term Loan 79.50 Revised to [ICRA]D
The revision in rating takes into consideration the delays in
servicing of debt obligations by the company on account of
insufficient cash accruals arising from low occupancy rates and
average room rent of the hotel facility owing to high competition as
well as demand slowdown due to political instability in the region.
This apart, the rating continues to be constrained by weak outlook as
well as the highly competitive nature of the hotel industry in
Hyderabad region which puts further pressure on the Average Room Rent
and Occupancy Rates of the company; weak financial profile of the
company with operating margin of 12.49% in FY15, cash losses of
INR11.92 crore, gearing of 9.35 times, OPBITDA-to-Interest & Finance
Charges of 0.21, and Net Cash Accruals-to-Total Debt of -9% as on 31st
March, 2015. The ratings however favorably factor in the association
of the company with Carlson Group of Hotels as well as the benefits
reaped by the company from the global marketing and advertising
networks of Carlson Group.
Going forward, the ability of the company to service its debt
obligations in a timely manner while improving its operational
parameters as well as its profitability are the key rating drivers
from credit perspective.
Daaj Hotels and Resorts Private Limited was incorporated in 1998 and
is promoted by Mr. B.S. Sahney and family for the development,
operation and maintenance of a 5-star deluxe hotel at Banjara Hills,
Hyderabad which became operational from July, 2012 onwards. The
operation of the 157 room hotel is currently being carried out by M/s
Carlson Hotels Asia Pacific Pvt. Limited under the brand name Radisson
Blu Plaza.
Recent Results
The company reported an operating income of INR26.51 crore, operating
profit of 12.49% and net loss of INR23.68 crore in FY2015 as against
an operating income of INR23.45 crore, operating loss of 7.47% and net
loss of INR29.21 crore in FY2014.
DELHI INTERNATIONAL: S&P Affirms 'BB' CCR; Outlook Stable
---------------------------------------------------------
Standard & Poor's Ratings Services said that it had affirmed its 'BB'
long-term corporate credit rating on Delhi International Airport Pte.
Ltd. (DIAL). The outlook is stable. S&P also affirmed the 'BB'
long-term issue rating on the company's senior secured notes.
India-based DIAL holds exclusive rights to operate, manage, and
develop India's largest airport, the Delhi airport.
"The affirmation reflects our view that DIAL will maintain its
competitive position, and will generate strong cash flows, given the
high tariffs," said Standard & Poor's credit analyst Mehul Sukkawala.
"However, uncertainty continues to surround the extent to which the
company's cash flows could fall based on the pending tariff decision
for the second regulatory period."
S&P expects DIAL to remain the largest airport in India by passenger
and cargo volumes. The growth in passenger traffic in fiscal 2015
(year ended March 31) was higher than S&P had expected. S&P
anticipates the growth trend to continue in fiscal 2016. S&P also
expects DIAL to maintain its good operating efficiency on operational
parameters even though EBITDA margins will remain depressed because of
46% revenue sharing with the Airport Authority of India (AAI).
S&P continues to assess the regulatory risk for airport operators in
India to be higher than that for other rated airports elsewhere in
Asia-Pacific. This is highlighted by Airports Economic Regulatory
Authority's (AERA) delay in passing regulatory orders and pending
decisions on tariff disputes. The delay is now because of the pending
decision from an appellate tribunal on DIAL's appeal.
DIAL's future cash flows can vary significantly from S&P's current
expectation depending on the decision of the appellate tribunal and
the regulator's tariff for the second period. Given the number of
factors that will impact the final decision, S&P estimates that
tariffs could fall 60%-85%, starting April 1, 2016.
S&P continues to believe that AAI's strategic shareholding and right
to approve DIAL's key decisions and related party transactions
insulates DIAL from the weak credit profile of its majority
shareholder GMR Infrastructure Ltd. At the same time, S&P no longer
considers DIAL to be a government-related entity under S&P's criteria
because it do not expect the government to provide extraordinary
support in case of financial distress. The change in S&P's view has
no rating impact, given that its prior assessment did not result in
any rating uplift.
DIAL's liquidity is "adequate." S&P has revised its liquidity
assessment from "strong" previously because the company may not have
enough covenant headroom over the next 24 months for this category
following a decline in tariffs.
Nevertheless, S&P expects DIAL's sources of liquidity to cover the
uses of liquidity by more than 1.5x over the next 24 months. Sources
are likely to cover uses even if EBITDA declines 30% over the next 12
months.
"The stable outlook reflects our view that DIAL's property leasing
income and cash accumulation would temper the company's temporary weak
cash flow adequacy following the tariff reduction," said Mr.
Sukkawala. S&P expects DIAL's ratio of funds from operations to debt
to remain more than 10% in fiscal 2018.
S&P could lower the rating if it expects DIAL's ratio of FFO to debt
to be less than 8% for a prolonged period because: (1) the regulator's
tariff order is not in line with S&P's expectation; (2) the company
faces significant delays in completing phase two of its commercial
property development; (3) its rental income is significantly lower
than S&P anticipated; or (4) S&P expects cash outflow reducing the
cash accumulation.
S&P could also downgrade DIAL if the regulatory environment is weaker
than S&P expected, resulting in significant uncertainty and volatility
in the company's operating performance. In addition, downgrade
pressure could also arise if DIAL faces covenant pressure because of a
significant decline in tariffs or GMR Infrastructure has a materially
negative influence on DIAL's strategy or cash flows.
S&P may raise the rating if it expects DIAL's FFO cash interest
coverage to be more than 2x on a consistent basis. S&P believes this
would depend on the company's ability to complete phase three of its
commercial property development. An upgrade would also assume
stabilization of the regulatory environment.
ELKOSTA GROUP: CRISIL Lowers Rating on INR70MM Loan to 'B'
----------------------------------------------------------
CRISIL has downgraded its ratings on the bank facilities of Elkosta
Security Systems India (Elkosta), part of Elkosta group to 'CRISIL
B/Stable/CRISIL A4' from 'CRISIL BB-/Stable/CRISIL A4+'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 70 CRISIL B/Stable (Downgraded
from 'CRISIL BB-/Stable')
Letter of credit 80.6 CRISIL A4 (Downgraded from
& Bank Guarantee 'CRISIL A4+')
Overdraft Facility 59.4 CRISIL B/Stable (Downgraded
from 'CRISIL BB-/Stable')
The rating downgrade reflects the significant deterioration in
business and financial risk profile of Elkosta Security Systems India
and ESSI Integrated Technologies Pvt Ltd (together referred to as
Elkosta group), marked by steep decline in turnover and profitability,
owing to weakening in the order book position and stretch in working
capital cycle seen in the year 2014-15, which is expected to continue
in 2015-16. Given the reduced profitability, the withdrawal of funds
from Elkosta by partners to fund purchase of personal property has led
to deterioration in liquidity profile. Fund support from promoters in
the form of equity, along with Elkosta's ability to bag profitable
orders in security systems provider space will be crucial for its
credit risk profile over the medium term.
The ratings continue to reflect the group's working capital intensive
and small scale of operations, and below average financial risk
profile. These weaknesses are partially offset by the group's
extensive track record in the security solutions industry.
For arriving at the ratings, CRISIL has combined the business and
financial risk profiles of Elkosta and ESSI Integrated Technologies
Pvt Ltd (ESSI), herein referred to as the Elkosta group. This is
primarily because both the entities are under the same management and
are engaged in the same line businesses. The entities also derive
considerable operational and business synergies from each other.
Outlook: Stable
CRISIL believes that the Elkosta group's business risk profile will be
supported by its promoters' extensive experience in the industry. The
outlook may be revised to 'Positive' if the group's liquidity improves
on account of prudent working capital management along with increase
in the group's scale of operations. Conversely, the outlook may be
revised to 'Negative' if its liquidity deteriorates further on account
of decline in profitability, substantial withdrawal of funds from
Elkosta or any debt-funded capital expenditure programme.
Elkosta is a proprietorship firm founded by Mr. Abhay Kumar Jha in
2002. It provides security system solutions.
ESSI was set up in 2003 by Mr. Jha and his wife Mrs. Archana Jha. It
was incorporated as a separate entity to undertake direct bidding in
the tenders. 2013-14 (refers to financial year,
April 1 to March 31) was ESSI's first year of operations.
EXODUS ISPAT: CRISIL Assigns B+ Rating to INR35MM Cash Loan
-----------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to the
bank facilities of Exodus Ispat Pvt Ltd (EIPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 35 CRISIL B+/Stable
Letter of Credit 20 CRISIL A4
The ratings reflect EIPL's exposure to intense competition in the
building material industry and to cyclicality in end-user industries;
the ratings also factor in its modest scale of operations. These
rating weaknesses are partially offset by the promoters' extensive
industry experience.
Outlook: Stable
CRISIL believes that EIPL will continue to benefit over the medium
term from its promoters' industry experience. The outlook may be
revised to 'Positive' in case of higher-than-expected revenue and
accrual or if the working capital management improves, leading to a
much better financial risk profile, particularly liquidity.
Conversely, the outlook may be revised to 'Negative' if revenue and
accrual are lower than expected, the working capital cycle is
stretched, and if there is large debt-funded capital expenditure,
resulting in weakening of the financial risk profile, especially
liquidity.
Incorporated in 2002, EIPL manufactures multi-colour steel roofing,
zed purlins, and accessories, and designs tiles, at its facility in
Bishnupur (West Bengal); the products are used in constructing
factories, warehouses, malls, and other buildings. The company is part
of the Exodus group. Its operations are managed by Mr. Manish Lohia.
HOLIDAY VILLAGE: CRISIL Reaffirms D Rating on INR151.2MM Loan
-------------------------------------------------------------
CRISIL's rating on the long-term bank facilities of Holiday Village
Resorts Pvt Ltd (HVRPL) continues to reflect instances of delay by
HVRPL in servicing its debt; the delays have been caused by the
company's weak liquidity, with insufficient cash accrual to meet debt
obligations and its working capital intensive operations.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 20 CRISIL D (Reaffirmed)
Term Loan 151.2 CRISIL D (Reaffirmed)
HVRPL also has a weak financial risk profile, because of a small net
worth, high gearing, and weak debt protection metrics. However, the
company benefits from the established track record of its promoters in
the hospitality industry.
Update
HVRPL has been delaying on the repayments of its term debt due to its
weak liquidity marked by accruals remaining inadequate against its
debt obligations and its stretched working capital requirements
leading to near full utilization of its cash credit limits with
occasional instances of overutilization. Though promoters have
supported its operations via infusion of unsecured loans, term debt
continues to be repaid with delay due to timing mismatch in infusion
of funds and its debt obligations. HVRPL on a provisional basis,
reported net sales of INR134.7 million in 2014-15, as against net
sales of INR132.9 million for 2013-14. Operating margins remained
around 38.7 per cent and is expected to sustain at similar level.
Operations remained working capital intensive with gross current
assets of 92 days as on March 31, 2015. Financial risk profile
remained weak with high gearing of 2.42 times and weak debt protection
metrics; interest coverage and net cash accruals to total debt ratio
remained at 2.1 times and 0.08 times respectively as on March 31,
2015.
For 2014-15, HVRPL, on a provisional basis, has reported a profit
after tax (PAT) of INR9.2 million on net sales of INR134.7 million, as
against a PAT of INR5.7 million on net sales of INR132.9 million for
2013-14.
HVRPL, based in Gandhidham (Gujarat), was incorporated in 2001. It
operates a three-star ethnic resort, Holiday Village Resorts, and a
club, Holiday Club.
IMPRINT VINIMAY: ICRA Ups Rating on INR22.50cr Demand Loan to C-
----------------------------------------------------------------
ICRA has revised upwards the long term rating assigned to the INR22.50
crore fund based bank facility of Imprint Vinimay Private Limited from
[ICRA]D to [ICRA]C-.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based Limits
(Demand Loan) 22.50 [ICRA]C- upgraded
The upward revision in the rating primarily takes into account the
regularization of debt service obligations by the company on the back
of receipt of advances from its customers. However, any further delay
in receipt of advances from its customers may lead to cash flow
mismatches, given significant debt service obligations in the near
term. The company also remains exposed to market risks for the balance
unsold portion of its property. The rating continues to consider the
experience of the promoters in the real estate business and the
favourable location of the residential complex at the heart of
Siliguri, West Bengal, with good road connectivity to airport, railway
station and other parts of the city, which strengthens project
attractiveness. Nevertheless, real estate sector remains susceptible
to the economic cycles, which along with intense competition from
other players in the region remains critical.
Incorporated in 2005 by the promoters of SBM Group, IVPL is currently
developing a residential complex at Siliguri, West Bengal. The
proposed residential tower 'SBM Height' would house eighty eight
residential flats and one duplex flat in a ground + 11 storey building
along with other amenities like, car parking space, swimming pool,
temple, club house, park, landscaped garden, security systems etc.
INDIAN OVERSEAS: S&P Affirms 'BB+' ICR; Outlook Stable
------------------------------------------------------
Standard & Poor's Ratings Services said that it had affirmed its 'BB+'
long-term issuer credit rating on India-based Indian Overseas Bank
(IOB). The outlook is stable. At the same time, S&P affirmed its 'B'
short-term rating and the 'BB+' long-term issue rating on the bank.
"Our rating affirmation reflects our expectation that IOB will
continue to benefit from a very high likelihood of timely and
sufficient extraordinary support from the government of India in the
event of financial distress," said Standard & Poor's credit analyst
Amit Pandey.
At the same time, S&P has lowered its assessment of IOB's stand-alone
credit profile (SACP) to 'bb-' from 'bb'. IOB's funding profile has
deteriorated and is no longer comparable to that of other banks with
above-average funding profiles. S&P believes it will be challenging
for IOB to improve its profile to levels better than the industry
average as the bank starts to expand. IOB's ratio of customer loans
(net) to customer deposits of 69% as of March 31, 2015, compares well
with the industry average. Its stable funding ratio of 137% is also
good. However, IOB's ratio of low cost current and savings accounts of
25.4% is lower than the industry average of about 30%. The bank's
ratio used to be above 30%. However, it has progressively deteriorated
in the past four years. S&P now assess IOB's funding profile as
average and comparable to that of other midsize banks.
"We expect IOB's credit costs to remain high because of the bank's
weak asset quality," said Mr. Pandey. We also anticipate that IOB's
earnings will remain under pressure because of its high credit costs.
The bank's mediocre internal capital generation is unlikely to support
its moderate loan growth. IOB relies on large capital infusions on an
ongoing basis to support its growth because its retained earnings are
low. The government's recent announcement of infusion of Indian rupee
(INR) 20 billion into IOB should improve the bank's capital.
The stable outlook on IOB reflects S&P's expectation that there is
very high likelihood that the government of India will continue to
support the bank, including through ongoing capital infusion, that
could help the bank maintain capital at moderate levels (with a
risk-adjusted capital ratio of 5%-6%).
S&P could lower the rating on IOB if the bank's stand-alone credit
profile deteriorates. This could happen if IOB's RAC ratio declines
to less than 5%. The bank's RAC ratio could decline if the bank is
unable to raise sufficient capital to support growth and economic risk
in India rises.
The probability of an upgrade of IOB is remote, in S&P's view. The
bank's stand-alone credit profile has to improve by two notches for
S&P to raise the rating.
LAKSHMI TRANSFORMERS: CRISIL Reaffirms B Rating on INR45MM Loan
---------------------------------------------------------------
CRISIL's ratings on the bank facilities of Lakshmi Transformers and
Electricals (LTE) continue to reflect LTE's large working capital
requirements, modest financial risk profile, and modest scale of
operations. These rating weaknesses are partially offset by the
extensive experience of the partners in the transformer manufacturing
segment.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 175 CRISIL A4 (Reaffirmed)
Buyer Credit Limit 45 CRISIL B/Stable (Reaffirmed)
Cash Credit 10 CRISIL B/Stable (Reaffirmed)
Cash Credit-Book Debt 20 CRISIL B/Stable (Reaffirmed)
Letter of Credit 60 CRISIL A4 (Reaffirmed)
Outlook: Stable
CRISIL believes LTE will continue to benefit over the medium term from
its partners' extensive industry experience. The outlook may be
revised to 'Positive' in case of substantial and sustained improvement
in revenue and operating margin, resulting in higher-than-expected
cash accrual, along with better working capital management,
particularly timely collection of receivables. Conversely, the outlook
may be revised to 'Negative' if there is any further pressure on the
revenue or profitability, or deterioration in liquidity resulting from
larger-than-expected working capital requirements, most likely driven
by significant delay in collection of receivables. Withdrawal of
capital by partners or large debt-funded capital expenditure may also
result in a 'Negative' outlook.
Established in 1991 by Mr. Sanjay Singhal and his family members, LTE
manufactures both power and distribution transformers ranging from 10
kilo volt amperes (kVA) to 5000 kVA. Its manufacturing facilities are
in Agra (Uttar Pradesh) and Haridwar (Uttarakhand).
LAKSHMI VENKATA: ICRA Reaffirms B- Rating on INR6.10cr LT Loan
--------------------------------------------------------------
INR6.10 crore (revised from INR5.17 crore) fund based limits and
INR1.90 crore (revised from INR2.83 crore) unallocated limits of
Lakshmi Venkata Sai Rice Industries.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
LT- fund based 6.10 [ICRA]B- re-affirmed
Unallocated 1.90 [ICRA]B- re-affirmed
The reaffirmation of the rating continues to be constrained by LVSRI's
weak financial profile characterized by low profitability indicators,
high gearing and modest coverage indicators, small scale of operations
in the intensely competitive rice milling industry restricting
operating margins and risks arising from partnership nature of the
firm.
The rating is further constrained by tight liquidity position of the
firm as reflected by high utilization (100%) of working capital
limits, and agro climatic risks which can affect the availability of
the paddy in adverse weather conditions. ICRA also notes that change
in government policy on levy rice also has adversely affected the
firm's revenues. The rating is however supported by the long track
record of the promoters in the rice mill business, ease in paddy
procurement due to proximity of the plant in major paddy cultivating
region of the country, and favorable demand prospects of the industry
with India being the second largest producer and consumer of rice
internationally augurs well for the firm.
Going forward, the firm's ability to increase its scale of operation
and improve its profitability while managing its working capital
requirements will be key rating sensitivities from credit perspective.
Founded in the year 2010 as a partnership firm, Lakshmi Venkata Rice
Industries (LVSRI) is engaged in the milling of paddy and produces raw
& boiled rice. The firm started its operations in November 2012. It is
promoted by Mr. B. Chandrasekhar. The firm has a milling unit in Pothy
reddypalem village of Nellore district of Andhra Pradesh with an
installed capacity of 4 tons per hour.
Recent Results
LVSRI has reported an operating income of INR13.03 crore and net
profit of INR0.02 crore respectively in FY2014 as against an operating
income and net profit of INR15.46 crore and INR0.02 crore in FY2015
(provisional and unaudited).
M. K. GUPTA: ICRA Assigns B+ Rating to INR4.77cr Fund Based Loan
----------------------------------------------------------------
ICRA has assigned a long term rating of [ICRA]B+ to the INR4.77 crore
cash credit facility and a short term rating of [ICRA]A4 to the INR9
crore bank guarantee facility of M/s. M. K. Gupta & Co. ICRA has also
assigned a long term rating of [ICRA]B+ and a short term rating of
[ICRA]A4 to an untied limit of INR0.23 crore of MKGC.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based
(Cash Credit) 4.77 [ICRA]B+ assigned
Non Fund Based
(Bank Guarantee) 9.00 [ICRA]A4 assigned
Untied 0.23 [ICRA]B+/[ICRA]A4 assigned
The assigned ratings take into account MKGC's high working capital
intensive nature of operations, which results in stretched liquidity
position as reflected by high utilization of the working capital
limits, and small scale of operations at present. ICRA notes that the
turnover improved significantly during FY15, however the sustenance of
the same remains to be seen especially in the light of modest order
book position of -Rs. 48 crore, 1.08 times of FY15 revenues, as on
August 31, 2015. The ratings are further constrained by high client
and geographic concentration risk since majority of the revenues and
the current order book outstanding is contributed by Road Construction
Department in Bihar, and highly fragmented and competitive nature of
the industry, which coupled with tender based contract awarding
system, keeps a check on the profitability. The ratings further
incorporate the risks associated with the entity's status as a
partnership firm, including the risk of capital withdrawal by the
partners. The ratings, however, derive support from the established
track record of the firm in the civil construction business, with an
experience of more than three decades, and reputed client profile
leading to low counterparty risks. The ratings also take into account
the favourable capital structure of the firm as indicated by a gearing
of 0.55 time as on March 31, 2015, and the presence of price
escalation clause in the majority of the contracts mitigates the
vulnerability of the firm's profitability to the variation in raw
material prices to an extent. In ICRA's opinion, the ability of the
entity to scale-up its execution capabilities to achieve revenue
growth while maintaining a conservative capital structure and managing
its working capital requirements efficiently would remain key rating
sensitivities going forward.
Established in 1981 as a partnership firm, MKGC is primarily engaged
in the construction and maintenance of roads and bridges in the state
of Bihar and West Bengal. The firm is a registered Class I category
contractor with P.W.D. -- West Bengal and Class A category contractor
with N.F. Railways.
Recent Results
During FY15, as per provisional financials, MKGC reported a net profit
of INR5.31 crore on an OI of INR44.46 crore as against a net profit of
INR1.01 crore and OI of INR21.04 crore during FY14.
OM TRADING: ICRA Assigns 'B' Rating to INR4.95cr LT Loan
--------------------------------------------------------
ICRA has assigned a long-term rating of [ICRA]B to the INR4.95 crore
fund based bank facilities of M/s. OM Trading Company.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term fund-
Based- Cash Credit 4.95 [ICRA]B assigned
The assigned rating takes into account the long track record of the
proprietor in commodities trading business and the firm's established
clientele relationship which has enabled it to garner repeat orders.
The rating is, however, constrained by the firm's adverse capital
structure as reflected by high gearing of 6.42x (as on March 31, 2015)
& weak coverage indicators, and its stretched liquidity position (as
reflected in high utilization of bank limits) owing to large inventory
levels coupled with elevated receivable position. ICRA notes that
while the profitability margins are susceptible to adverse movements
in raw material prices, the modest scale of operations in the highly
fragmented and competitive commodities trading business is likely to
keep the margins under pressure. The rating also takes cognisance of
risks associated with the entity's status as a proprietorship
including the risk of capital withdrawals by the proprietor.
Om Trading Company (OTC) was started in 2012 by the Nagpur based
Wadhwani group. The group is headed by Mr. Prakash Wadhwani who
handles the entire business operations along with marketing functions
of the group. His son, Mr. Chandraprakash Prakash Wadhwani, handles
the business of OTC. The firm is engaged in trading of different
commodities including betel nut, almond, turmeric, white poppy seeds,
chilli etc.
Recent Results
In FY2014, OTC reported a profit after tax (PAT) of INR0.27 crore on
an operating income of INR20.87 crore as against an operating income
of INR15.87 crore and PAT of INR0.22 crore during FY2013. As per the
unaudited results for FY2015, OTC registered sales of INR28.24 crore.
SAHARA GROUP: Gets SC Notice on Appointment of Receiver
-------------------------------------------------------
Reuters reports that the Supreme Court has given troubled conglomerate
the Subrata Roy-led Sahara group a month's time to explain why a
receiver should not be appointed to auction off its properties to
refund investors in its illegal bonds, a lawyer for the markets
regulator said on September 28.
Sahara is a household name in India as the former main sponsor of the
national cricket team. It also has major hotels overseas, including
the Plaza in New York and the Grosvenor House in London.
Sahara founder Subrata Roy was arrested in March last year after the
company failed to comply with a court order to refund money raised
from millions of small investors by selling them bonds later ruled to
be illegal, the report recalls.
In June, the court gave the group 18 months to pay the entire sum of
$5.7 billion it says Sahara owes the investors. Sahara has previously
said it had repaid 95% of its liability, which has not been accepted
by the court, Reuters relates.
According to the report, the group has been trying to raise funds
since Roy's arrest, but has failed in several of its bids in the past
year to raise the money against its hotels and some other properties
in India.
Last month, the court had asked the regulator, the Securities and
Exchange Board of India (SEBI), which is seeking redress for the bond
investors, to submit an application for the appointment of a receiver
for the property auction, the report recalls.
On September 28, the Supreme Court gave Sahara a month's time to
respond to its show cause notice, after which SEBI will get two weeks
to file a rejoinder, the lawyer told reporters after the court
hearing, Reuters reports.
Sahara did not immediately respond to a request for comment, but a
lawyer for the group confirmed the court order, the report notes.
As reported in the Troubled Company Reporter-Asia Pacific on
Feb. 15, 2013, The Economic Times said the Securities & Exchange
Board of India (Sebi) on Feb. 13, 2013, seized bank accounts and
properties of two Sahara Group companies and its promoter, Subrata
Roy. The move comes following the group's failure to refund INR24,000
crore to investors as directed by the Supreme Court.
Sahara Group operates businesses ranging from finance, housing,
manufacturing and the media. Sahara also sponsors the Indian
hockey team and owns a stake in Formula One racing team, Force
India.
SANSKAR BHARTI: ICRA Reaffirms B+ Rating on INR6.5cr Term Loan
--------------------------------------------------------------
ICRA has reaffirmed its long-term rating on the INR6.50 crore fund
based facilities of Sanskar Bharti Foundation (SBF) at [ICRA]B+.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term Loan 6.50 [ICRA]B+;reaffirmed
The rating reaffirmation takes into account the healthy revenue growth
in the society's school backed by growing occupancy and fee revision,
affiliation with Delhi public School brand and the experience of the
promoters in the field of education. The rating also factors in the
improvement in coverage indicators on the back of ongoing debt
repayment and moderate profitability.
The rating is however constrained by SBF's modest scale of operations
and limited track record of operations with revenues generated from
one school thereby resulting in concentration risk. The society's
capital structure also remains weak with majority of the capital
invested in the form of bank and interest bearing loans from
promoters. Going forward, SBF's ability to improve its scale of
operations, operating metrics and debt coverage indicators will be
amongst the key rating sensitivity factors.
Sanskar Bharti Foundation operates the Delhi Public School (DPS) in
Ambala which started operations in 2008. SBF has been incorporated by
Mr. K K Gupta, Mr. A K Gupta and Mr. Vijay Goel who have experience in
operating a reputed playschool franchisee in New Delhi.
Recent results
In FY 15, the society achieved revenue receipts (RR) of INR4.6 crore
and a net surplus of INR0.4 crore, as compared to RR of INR4.1 crore
and net surplus of INR0.1 crore in the previous year.
SARDAR JEWELLERS: CRISIL Reaffirms B- Rating on INR90MM Loan
------------------------------------------------------------
CRISIL's rating on the long-term bank facility of Sardar Jewellers
(SJ) continues to reflect SJ's modest financial risk profile because
of high gearing and weak debt protection metrics, and modest scale of
operations with geographical concentration in its revenue profile.
These weaknesses are partially offset by the promoters' extensive
experience in the jewellery industry.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 90 CRISIL B-/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that SJ will continue to benefit over the medium term
from its promoters' extensive industry experience. The outlook may be
revised to 'Positive' if the operating income substantially and
consistently improves with stable profitability margin. The outlook
may also be revised to 'Positive' if the working capital management
improves, or the net worth substantially increases backed by capital
infusion. Conversely, the outlook may be revised to 'Negative' if the
scale of operations or profitability declines, or the capital
structure weakens because of large working capital requirements or
debt-funded capital expenditure.
SJ was set up in 2010-11 (refers to financial year, April 1 to March
31) as a partnership firm by Mr. Surinder Singh and his family. The
firm sells gold and diamond-studded jewellery through its showroom in
Ludhiana (Punjab).
SHEETAL INDUSTRIES: ICRA Assigns B+ Rating to INR11cr Cash Loan
---------------------------------------------------------------
ICRA has assigned its long term rating of [ICRA]B+ to the INR11.00
crore fund based limits of Sheetal Industries.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 11.00 [ICRA]B+; assigned
The ratings are constrained by Sheetal Industries' modest scale of
operations, and the fragmented and highly competitive nature of the
industry, which coupled with the low value additive nature of the
business has led to thin margins (OPBDITA/OI of 2.6% in 2014-15). The
profitability of the firm is vulnerable to fluctuations in prices of
sesame seeds, which are dependent on the global crop position of
sesame seed as well as domestic agro-climatic conditions.
The ratings also factor in the vulnerability of the firm's
profitability to changes in export incentives provided by the central
government and adverse fluctuations in foreign exchange rates. The
ratings also take into account the firm's weak coverage indicators
(interest coverage of 1.34 times and NCA**/Total debt of 8% in
2014-15). ICRA also notes the proprietorship constitution of the firm
which exposes it to risks related to dissolution, withdrawal of
capital etc. Nevertheless, the ratings favorably factor in the
extensive experience of the promoters in the agro-commodity business
and the steady demand prospects for sesame seeds in the export
markets.
Going forward, the ability of the firm to ramp up its scale of
operations while maintaining profitability and efficiently manage its
working capital requirements will be the key rating sensitivities.
Established in 2001, Sheetal Industries is a proprietorship concern
with Mr. Dinesh Kumar Changulani managing the business. He has over 15
years of experience in the commodities industry. The firm is primarily
engaged in the processing, export and trading of hulled sesame seeds.
The firm derives the bulk of its revenues from exports, with its key
markets being United Arab Emirates (UAE), Jordan, United Kingdom (UK),
Russia etc. The firm has an installed hulling capacity of 3 tonnes per
hour.
Recent Results
Sheetal Industries reported a net profit of INR0.23 crore on an
operating income of INR38.75 crore for the year ended March 31, 2014,
as against a net profit of INR0.20 crore on an operating income of
INR43.53 crore for the previous year. The firm reported, on a
provisional basis, a net profit of INR0.17 crore an operating income
of INR52.64 crore for 2014-15.
SHREE GANPATI: CRISIL Assigns 'B' Rating to INR77MM LT Loan
-----------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable' rating to the long-term bank
facilities of Shree Ganpati Ridhi Sidhi Agro Industries Pvt Ltd
(SGPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Cash
Credit Limit 25 CRISIL B/Stable
Cash Credit 45 CRISIL B/Stable
Long Term Loan 77 CRISIL B/Stable
The rating reflects the company's initial stage of operations with a
track record of sustained operating income and profitability yet to be
seen, and its susceptibility to adverse regulatory changes, volatility
in raw material prices, and the vagaries of monsoon. These weaknesses
are partially offset by the extensive experience of the promoters in
the rice-trading business and growth prospects of the rice and wheat
processing industry.
Outlook: Stable
CRISIL believes that SGPL will benefit from the extensive industry
experience of the promoters and healthy prospects of the rice and
wheat processing industry over the medium term. The outlook may be
revised to 'Positive' if the company significantly scales up its
operations, while improving its profitability and working capital
management. Conversely, the outlook may be revised to 'Negative' if
SGPL's financial risk profile, particularly its liquidity, weakens,
most likely because of a substantial increase in its working capital
requirements, or a decline in its cash accruals, or large debt-funded
capital expenditure.
Incorporated in 2013, SGPL mills and processes non-basmati rice and
wheat. Its manufacturing unit is located at Mau (Uttar Pradesh) and
commenced commercial operations in April 2015. The company is promoted
by Mr. Nirmal Gupta and his family, who have more than 25 years of
experience in the rice trading business.
SHYAM COAL: ICRA Reaffirms 'B+' Rating on INR7.0cr Cash Loan
------------------------------------------------------------
The long-term rating of [ICRA]B+ has been reaffirmed to the INR7.00
crore cash credit facility of Shyam Coal Corporation.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 7.00 [ICRA]B+; reaffirmed
The assigned rating is constrained by SCC's limited track record of
operation along with high competition and low value added nature of
the trading business, which has resulted in thin profitability
margins. The ratings are also constrained by stretched receivables
which has led to high working capital requirements & stretched
payables. The ratings also take into account the firm's high
dependence on imported coal which exposes it to any unfavorable
regulatory changes in the coal producing countries. ICRA also notes
that SCC is a partnership firm and any significant withdrawals from
the capital account could adversely impact its net worth and thereby
the capital structure.
The rating, however, favourably considers the experience of the
partners in the trading and distribution of coal along with presence
in ceramic industry and favorable demand outlook driven by increasing
demand for coal in the domestic market.
Shyam Coal Corporation is partnership firm engaged in grading and
trading of Indonesian coal with its plant situated at Wankaner-Morbi,
Gujarat. The firm was established in July 2013 and was reconstituted
in April 2014. The firm is currently managed by Mr. Vinod Bhadeja, Mr.
Ramesh Baria, and Mr. Pravin Baria along with four other partners
having a long experience in coal and ceramic business.
Recent Results
For the year ended 31st March, 2015, the firm reported operating
income of INR105.10 crore with profit after tax (PAT) of INR1.26
crore.
SONU BUILDERS: CRISIL Reaffirms B+ Rating on INR30MM Cash Loan
--------------------------------------------------------------
CRISIL's ratings on the bank facilities of Sonu Builders (SB) continue
to reflect the firm's large working capital requirements, modest scale
of operations, high degree of customer concentration in its
order-book, and exposure to intense competition in the construction
industry. These rating weaknesses are partially offset by the
extensive industry experience of the promoter.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 62.5 CRISIL A4 (Reaffirmed)
Cash Credit 30 CRISIL B+/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility 10 CRISIL B+/Stable (Reaffirmed)
CRISIL had, on June 4, 2015, downgraded its rating on SB's bank loan
facilities to 'CRISIL B+/Stable/CRISIL A4' from 'CRISIL
BB-/Stable/CRISIL A4+'. The rating downgrade reflects deterioration in
the firm's liquidity with a stretch in its working capital cycle
resulting in almost full utilisation of its bank limits.
Outlook: Stable
CRISIL believes SB will continue to benefit over the medium term from
its promoter's extensive industry experience. The outlook may be
revised to 'Positive' in case of sustained improvement in the working
capital cycle, or continued increase in the scale of operations and
profitability margins. Conversely, the outlook may be revised to
'Negative' if there is a steep decline in the profitability margins,
or significant deterioration in liquidity caused most likely by a
further stretch in the working capital cycle.
SB was set up in 1992 as a proprietorship concern by Mr. R K
Chaudhary. The firm is a civil contractor undertaking the construction
of residential and commercial buildings. It is based in New Delhi.
SB reported a net profit of INR12.8 million on net sales of INR256
million for 2014-15 (refers to financial year, April 1 to March 31),
against a net profit of INR12.7 million on net sales of INR319 million
for 2013-14.
SRI SARVARAYA: ICRA Assigns 'B' Rating to INR132cr Cash Loan
------------------------------------------------------------
ICRA has assigned a long-term rating of [ICRA]B to INR132 crore cash
credit limits and INR58.00 crore term loans of Sri Sarvaraya Sugars
Limited. ICRA has also assigned the rating of MB to the INR5.00 crore
Fixed Deposit Programme of SSSL.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 132.00 [ICRA]B assigned
Term Loan 58.00 [ICRA]B assigned
Fixed Deposit
Programme 5.00 MB assigned
The assigned ratings are constrained by exposure of the sugar unit of
the company to agro-climatic risks which impact sugarcane availability
and recovery; regulated nature and high working capital intensity
associated with the sugar industry, which coupled with delays in the
receipt of payments from Andhra Pradesh Transmission Corporation
Limited (AP Transco) for the power sales from the co-generation
division impacted SSSL's liquidity position in the past. Further,
reducing realizations in the sugar division have impacted the
profitability of the sugar unit of the company since SY 2014.
The ratings also remain constrained by the seasonal nature of the
beverages industry and the capital intensive nature of the bottling
business. In addition, the ratings remain tempered by the project
implementation risk and funding risk associated with the predominantly
debt funded capital expenditure plan of INR135 crore to be taken up by
the company in the bottling unit for which the financial closure is
yet to be achieved in terms of debt while the remaining portion is
funded through internal accruals.
The assigned ratings, however, positively factor in the relatively
diversified operational profile of the company with presence of
bottling unit along with the sugar division which in turn is fully
forward integrated (with cogeneration unit of 12.65 MW and distillery
unit of 30 KLPD) which provides cushion to the overall profitability
of the company during sugar downturn, stable business model of the
company due to exclusive franchisee agreement with Coca-Cola India
Private Ltd., for three districts of Andhra Pradesh/Telangana and
established market position of Coke products in those regions.
Further, the ratings also consider the extensive experience of the
promoters in the sugar industry which entails established
relationships with farmers (for sugar cane procurement) and customers
for the other product segments.
Going forward, the ability of the company to service the debt
obligations on a timely basis by ensuring fungibility of monetary
resources between the bottling and sugar units, improve crushing and
ensure timely completion of the planned expansion in the bottling
division are the key rating sensitivities from credit perspective.
Sri Sarvaraya Sugars Limited(SSSL) was incorporated in the year 1956
by Mr. SBPBK Satyanarayana Rao. The company operates an integrated
sugar plant with a crushing unit of 4000 TCD capacity located in
Chelluru district in Andhra Pradesh. The company also operates a
bottling division with units at three locations namely Vemagiri,
Kesavaram and Sathupally in Andhra Pradesh/Telangana and is a
franchisee bottler for Coca Cola India Private Limited.
SUDALAGUNTA SUGARS: CRISIL Reaffirms B+ Rating on INR688MM Loan
---------------------------------------------------------------
CRISIL's ratings on the bank facilities of Sudalagunta Sugars Ltd
(SSL) continue to reflect its large working capital requirements, the
susceptibility of its operating margin to sugar prices and to
regulations of the sugar industry.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bill Discounting 329.4 CRISIL B+/Stable (Reaffirmed)
Cash Credit 591.6 CRISIL B+/Stable (Reaffirmed)
Long Term Loan 688.7 CRISIL B+/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility 67.1 CRISIL B+/Stable (Reaffirmed)
Sugar Pledge Cash
Credit 84.1 CRISIL B+/Stable (Reaffirmed)
Warehouse Financing 248.5 CRISIL B+/Stable (Reaffirmed)
Working Capital
Demand Loan 33.4 CRISIL B+/Stable (Reaffirmed)
The ratings also reflect exposure to risks related to on-going
distillery project. These weaknesses are partially offset by SSL's
established regional presence in the sugar industry aided by its
promoters' extensive industry experience and linkages.
Outlook: Stable
CRISIL believes SSL will benefit over the medium term from its
promoters' extensive industry experience. The outlook may be revised
to 'Positive' if significantly high revenue and profitability with
improved working capital cycle enhances the financial risk profile.
Conversely, the outlook may be revised to 'Negative' if the financial
risk profile weakens, most likely because of significantly low revenue
and profitability, or any time or cost overrun in the project.
SSL was incorporated in 1994 by Mr. S Jayaram Chowdary. The company
manufactures white sugar, which it sells to dealers in the domestic
market, and exports to the Gulf countries and to Singapore.
In 2013-14 (refers to financial year, April 1 to March 31), SSL
reported a profit after tax (PAT) of INR209.2 million on net sales of
INR4.82 billion, against a PAT of INR35.8 million on net sales of
INR1.56 billion in 2012-13.
SURAJMAL JAINARAYAN: Ind-Ra Assigns BB Long-Term Issuer Rating
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Surajmal Jainarayan
(SMJN) a Long-Term Issuer Rating of 'IND BB'. The Outlook is Stable.
The agency has also assigned SMJN's
INR70 mil. fund-based working capital limit an 'IND BB' rating with a
Stable Outlook.
KEY RATING DRIVERS
The ratings reflect SMJN's moderate scale of operations as well as
credit metrics. During FY15, revenue was INR776 mil. (FY14: INR695
mil.), interest coverage was 2.7x (2.6x) and net leverage was 5.0x
(3.2x). The ratings are constrained by SMJN's partnership nature of
business.
Liquidity is comfortable with the average working capital use of 92.5%
during the 12 months ended August 2015.
The ratings benefit from the fact that SMJN's founder has an
experience of over five decades in trading oil and sugar.
RATING SENSITIVITIES
Positive: An improvement in the scale of operations while maintaining
the credit metrics will be positive for the ratings.
Negative: Deterioration in the overall credit profile will be negative
for the ratings.
COMPANY PROFILE
Incorporated in 1964 as a proprietorship concern, SMJN is engaged in
wholesale trading of oil, sugar and pulses with its registered office
located in Pipariya, Madhya Pradesh. In 2010, it was converted into a
partnership entity.
The entity procures oil, sugar and other products directly from mills
or from third-party agents based on the availability and price terms
and sells it to companies such as Hindustan Unilever Ltd, Hershey (I)
Pvt Ltd, M.P. Agro Food India Limited, Som Distilleries & Breweries
Ltd, etc. along with some small players.
The firm is managed by its three partners - Jainarayan Maheshwari,
Amol Maheshwari and Rukhmani Devi Maheshwari.
SWAPNA ENTERPRISE: CRISIL Assigns B+ Rating to INR820MM Loan
------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-term
bank facility of Swapna Enterprise (SE).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 820 CRISIL B+/Stable
The rating reflects susceptibility of SE's revenue and earnings to the
cyclicality in the real estate industry and the geographic
concentration in its revenue profile adding to high dependence on bank
debt. The firm has recently started booking and construction of its
Phase - II due to which it carries high amount of project risk. These
weaknesses are partially offset by the partners' extensive industry
experience, prudent project funding and successful completion of Phase
I.
Outlook: Stable
CRISIL believes SE will sustain its business risk profile over the
medium term backed by its partners' extensive industry experience. The
outlook may be revised to 'Positive' if customer response to the
projects is significantly better than expected leading to high cash
flow. Conversely, the outlook may be revised to 'Negative' if the
liquidity is restricted by low cash inflows, because of subdued
response to its project and, consequently, low flow of advances.
SE, a partnership firm established in 2008, is setting up Green City
in Adajan (Surat). The firm is a part of the Green group that has over
two decades' experience in residential and commercial development. The
group generally forms a new special purpose vehicle or partnership
firm for each of its projects. SE' is promoted by Mr. Alpesh G Kotadia
and Mr. V K Ravani.
TATA MOTORS: S&P Revises Outlook to Stable & Affirms 'BB' CCR
-------------------------------------------------------------
Standard & Poor's Ratings Services revised to stable from positive its
outlook on India-based automaker Tata Motors Ltd. At the same time,
Standard & Poor's affirmed its 'BB' long-term corporate credit rating
and 'BB' long-term issue ratings on the U.S.-dollar denominated senior
unsecured notes issued by the company.
S&P revised the outlook to stable as the lengthening slowdown in China
and continued capital expenditure by Jaguar Land Rover Automotive Plc
(JLR), Tata Motors' key wholly owned subsidiary, will result in
negative free operating cash flow for Tata Motors. As a result, Tata
Motors' ratio of funds from operations (FFO) to debt will be weaker at
about 20%, instead of S&P's previous expectation of above 30%.
"We believe the slowdown in Chinese demand--the key driver for growth
for JLR and other luxury carmakers in the past few years--will result
in weaker operating performance and lower margins for Tata Motors than
we had previously anticipated," said Standard & Poor's credit analyst
Abhishek Dangra. "Although global new model launches can support
growth in fiscal 2017, we now expect fiscal 2016 EBITDA to be weaker.
Based on JLR's successful launches in the Land Rover range, we are
optimistic that continuing growth in other international markets and
planned new launches for Jaguar can offset some of the weakness in
China demand from fiscal 2017."
However, JLR will continue to invest heavily with more than
GBP3 billion annual investments for new product development and
emission and safety controls. As a result, free operating cash flows
will be significantly negative, leading to a ratio of FFO to debt of
closer to 20%. This is despite the expected recovery in its Indian
operations and an equity rights issue of US$1.2 billion by Tata Motors
in May 2015, because S&P expects JLR to continue to contribute more
than 90% of Tata Motors' EBITDA.
JLR's established and improving market position in the global premium
automotive segment with well-recognized brands supports the global
scale and low-cost manufacturing capabilities of Tata Motors' Indian
commercial vehicle business. However, S&P views Tata Motors' market
position in Jaguar's luxury and Indian passenger car segments as
weaker. Tata Motors has significantly scaled up investments in both
these segments and there is potential for execution risks in the roll
out of new models. Tata Motors' smaller size and narrower product
suite than many of its global peers constrain its business risk
profile.
"The stable outlook reflects our expectation that, despite weaker
financials in fiscal 2016 due to the slowdown in China, new product
launches by JLR and a recovery in the China and Indian market will
help revive the company's ratio of FFO to debt to above 20% in fiscal
2017 onward. We also expect the company to lower its capital
expenditures in the event of any further adverse market conditions,"
Mr. Dangra said.
S&P may raise its rating on Tata Motors if JLR's strong operating
performance partly offsets the increase in capital expenditure, such
that S&P expects Tata Motors to sustain its ratio of FFO to debt above
30%. S&P may also upgrade Tata Motors if JLR's successful positioning
of its Jaguar range of vehicles improves Tata Motors' business risk
profile.
S&P may lower the rating if it believes weaker operating performance
is likely to result in a ratio of FFO to debt of below 20% on a
sustained basis. This may happen due to a sharper slowdown in China
or new product launches that are less successful than current
expectations, while capital expenditures remain elevated.
UNDAVALLI CONSTRUCTIONS: ICRA Puts B+ Rating on INR6.15cr Loan
--------------------------------------------------------------
ICRA has revised the long-term rating assigned to INR6.15 crore
(revised from INR0.00 crore) term loan and INR2.85 crore (revised from
INR9.00 crore) unallocated limits of Undavalli Constructions (UC) to
[ICRA]B+ from [ICRA]B. The rating suspension carried out in July 2015
has been revoked.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term Loan 6.15 [ICRA]B+ assigned; Suspension
Revoked
Unallocated 2.85 [ICRA]B+ upgraded from
[ICRA]B; Suspension Revoked
The rating upgrade positively factors in healthy demand prospects for
the ongoing project, 'Sri Valey Pallas' owing to the proximity of the
project to capital region of bifurcated Andhra Pradesh, sales progress
in the project with 22% of the inventory sold as on July 2015 as
compared to no sales as on December 2013 where the project was yet to
be started, and healthy collection efficiency in the ongoing projects
which helps UC in maintaining comfortable cash flow position. The
rating continues to draw comfort from long standing experience of more
than 20 years of UC's promoters in the real estate industry.
The rating is however constrained by the exposure to execution risk
with 42% of the cost yet to be incurred and scheduled completion in
March 2017.The rating is also constrained by exposure to market risk
due to significant unsold area, and premium pricing. The rating also
continues to be constrained by UC's concentration in the Elluru
residential market and exposure to cyclicality inherent to the real
estate sector.
Going forward, timely execution of the project and ability of the firm
to improve sales velocity in its ongoing project and maintain its
collection efficiency will be the key rating sensitivities.
Undavalli Constructions was started in the year 2010 to undertake real
estate constructions work in Eluru, Andhra Pradesh. The firm has
bought land measuring 8100 sq. yard in the year 2010 and is developing
a residential apartment in Phase-1 on about 5000 sq yard of land
followed by a commercial space on the remaining land in Phase-2. The
residential apartment is being built built on about 5000 sq yard with
a total built up area of 1.89 lakh sq feet.
WAAMAN PRODUCTS: CRISIL Reaffirms 'B' Rating on INR120MM LT Loan
----------------------------------------------------------------
CRISIL rating on the bank facility of Waaman Products Pvt Ltd (WPPL)
continues to reflect the modest scale of operations in the highly
fragmented constructions material trading industry.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term
Bank Loan Facility 120 CRISIL B/Stable (Reaffirmed)
The rating also factors in the weak financial risk profile because of
a small net worth, a high total outside liabilities to tangible net
worth ratio, and below-average debt protection metrics. These rating
weaknesses are partially offset by the promoters' extensive experience
in the constructions material trading industry.
Outlook: Stable
CRISIL believes WPPL will continue to benefit over the medium term
from its promoters' extensive industry experience. The outlook maybe
revised to 'Positive' if the financial risk profile significantly
improves most likely through higher than expected cash accrual or
substantial equity infusion, along with efficient working capital
management. Conversely, the outlook maybe revised to 'Negative' if
considerably low cash accrual or large working capital requirements
put pressure on the liquidity.
Update
The revenue increased to INR217.6 million during 2014-15 (refers to
financial year, April 1 to March 31) from INR183.4 million in 2013-14
due to addition of a product line. Likewise, the operating margin
improved to 2.8 from 1.7 per cent owing to rupee depreciation. CRISIL
expects WPPL to sustain revenue between INR239 and 263 million, and
operating margin between 2.8 and 3.0 per cent over the near term. The
financial risk profile is weak because of weak liquidity, with low
cash accrual and high dependency on bank borrowings. The debt
protection metrics are expected to remain below average, with interest
coverage ratio around 2.0 times, the gearing is expected to remain
above 2 times while its net worth is expected to remain modest at
around 8 million by end of 2015-16.
WPPL, set up in 2011, is headquartered in New Delhi. The company
trades in construction materials such as tiles, ceramics, and sanitary
ware in the export market. It is promoted by Mr. Manish Vij and his
family members.
=================
I N D O N E S I A
=================
SMARTFREN TELECOM: Fitch Affirms 'CCC(idn)' Long Term Rating
------------------------------------------------------------
Fitch Ratings Indonesia has affirmed Indonesia-based PT Smartfren
Telecom Tbk's National Long-Term Rating at 'CCC(idn)'. At the same
time, Fitch has affirmed Smartfren's IDR603bn bond at 'CCC(idn)'. The
bond, originally IDR675bn in size, was issued in 2007 by PT Mobile-8
Telecom Tbk.
'CCC' National Ratings denote that default is a real possibility.
Capacity for meeting financial commitments is solely reliant upon
sustained, favourable business or economic conditions.
KEY RATING DRIVERS
Gradual Migration to LTE: Smartfren plans to gradually migrate its
subscribers from Code Division Multiple Access (CDMA) to Long-Term
Evolution (LTE) technology. As the company gradually rolls-out LTE
service, its annual capex will increase to above IDR2.2trn (USD157m)
in 2016 and 2017 from IDR1.7trn (USD121m) in 2014.
Fitch believes that successful return on the company's LTE investment
will depend on its ability to significantly increase subscribers above
its level of 11 million. This will be a challenge given the
historically modest subscriber growth and price-competitive nature of
the Indonesian telecom industry.
Capex Largely Financed: Smartfren has secured a USD300m loan from
China Development Bank and USD180m in vendor financing from Nokia for
its network expansion. Fitch believes that these facilities will
cover the company's planned capex until 2016.
Minimal EBITDA Generation: Fitch expects Smartfren to generate
positive EBITDA of around IDR200bn-300bn in 2015 (2014: IDR230bn),
however we think that this will remain insufficient to cover its
interest payment, working capital and capex needs in 2015.
Inadequate Liquidity: Smartfren plans to cover the cash shortfall in
2015 by issuing mandatory convertible bonds (MCB). The company still
has not utilised IDR3trn (USD214 mil) of its IDR9trn MCB series II.
Fitch does not give credit for future MCB injections despite its
successful issuances in the past. This is due to the uncertainty that
stems from Smartfren's low equity value and the inability to assess
the willingness and ability of the MCB investors to continue funding
the company.
Competition to Stabilize: Fitch believes that competition could
stabilize as smaller and weaker telcos are now focusing on
profitability rather than market share. The industry could further
consolidate as smaller unprofitable telcos, including PT Hutchison 3
Indonesia, may seek M&A due to a combination of depressed data tariffs
and significant investment needed for LTE roll-out. However,
competition may rebound in 2016 as the three largest telcos may offer
cheaper LTE data tariffs to boost market share.
KEY ASSUMPTIONS
Fitch's key assumptions within our rating case for the issuer include:
-- Subscriber base to increase modestly to 12 million in 2015
-- Blended average revenue per user of IDR22,000 in 2015
-- Capex progresses in line with management assumptions
RATING SENSITIVITIES
Positive: Future developments that may, individually or collectively,
lead to positive rating action include:
-- The company's ability to fund its operations without any
reliance on further issuance of mandatory convertible bonds
Negative: Future developments that may, individually or collectively,
lead to negative rating include:
-- Liquidity or operating performance deteriorates such that
the company appears unlikely to be able to meet obligations
VALE INDONESIA: S&P Affirms 'BB' CCR; Outlook Stable
----------------------------------------------------
Standard & Poor's Ratings Services said it affirmed its 'BB' global
scale corporate rating on PT Vale Indonesia Tbk (PTVI). The outlook
is stable.
At the same time, S&P affirmed the 'BBB' issue-level rating on the
company's senior unsecured debt, which PTVI's controlling shareholder
Vale S.A. fully and unconditionally guarantees.
"The ratings affirmation reflects PTVI's focus on cost efficiency,
which, combined with the currently low oil and coal prices as well as
the depreciated Indonesian rupiah, have offset the lower nickel
prices' effect on cash flow pressures," said Standard & Poor's credit
analyst Marcus Fernandes.
"The company's operating efficiency will also allow PTVI to continue
to present strong financial metrics stemming from the company's low
leverage and fairly low capital expenditure levels over the next few
years," he added.
The lower demand for nickel, especially due to the slower economic
activity in China, has reduced nickel prices and led S&P to review its
price deck, resulting in its assumption that prices will remain at
around $5 per pound for the remainder of 2015, and to improve slightly
to $5.5/lb in 2016 and 2017. S&P expects the company to continue
operating at full capacity of about 80,000 tons. At current prices,
S&P don't expect further capacity expansions.
In S&P's analysis, it factors PTVI's asset concentration in Indonesia,
where there has been less regulatory stability in recent years, which,
combined with the company's small overall scale and concentration of
products, leads it to compare negatively with other similarly rated
companies.
S&P continues to view PTVI's liquidity as "adequate," as defined in
S&P's criteria.
The stable outlook reflects S&P's view that PTVI will continue to
present strong credit measures, despite a weak pricing environment,
which its efficient operations prudent financial policies support.
S&P expects PTVI to fund its capital needs with internal cash flow
generation and to make use of its flexibility to reduce or cut
dividends if there are any additional cash flow pressures. In this
scenario, S&P expects EBITDA margins to remain around 25% and debt to
EBITDA to be below 1.0x over the next two years. The ratings on the
unsecured bonds will mirror that of its guarantor, Vale.
While unlikely in the next 12 months, S&P could downgrade the ratings
if nickel prices decline by more than $2,000/ton from the current
levels and oil prices increase, which would reduce revenues and
increase costs, resulting in gross debt to EBITDA above 2.0x and FFO
to debt below 45%. If cash flow pressures weaken the company's
liquidity position, S&P could also take a negative rating action.
An upgrade is unlikely in the next 12 months because the company's
limited scale and diversification, as well as its exposure to the
regulatory framework in Indonesia constrain its business risk profile
and the potential for a higher rating.
=========
J A P A N
=========
TOSHIBA CORP: Appoints New Board Members
----------------------------------------
Kazuaki Nagata at The Japan Times reports that Toshiba Corp. appointed
new board members on September 30 at an extraordinary shareholders
meeting, vowing to improve its corporate culture and governance in the
wake of a massive accounting scandal.
"We deeply apologize for betraying the trust of shareholders,
investors and other stakeholders and causing troubles that brought
confusion to the market," Toshiba President Masashi Muromachi told the
meeting in the city of Chiba, the report relays.
He stressed that the company will do its best to reform, the Japan
Times relates.
According to the report, many shareholders present expressed
frustration with the events that have hammered their investments.
"Toshiba stock went below JPY300 on September 29. I'm beyond being
angry -- now astounded," one shareholder said.
Others called for the involvement of former presidents in the
accounting scandal to be investigated further, expressing doubt that
the firm will successfully strengthen its corporate governance, the
report says.
The Japan Times says Toshiba's new management includes 11 board
members, with the number of outside directors increased from four to
seven.
The report relates that the firm will also create new divisions and
put more resources into strengthening its governance and internal
controls. But experts pointed out that reappointing three members of
the previous board was likely to hamper the reform efforts. This made
it tough to completely refresh the corporate culture even if new
measures were adopted, they said. "Toshiba's approach to reform its
management seems still too soft," the report quotes Masatoshi Yasuda,
executive director at the Tokyo-based Institute of Corporate
Governance, as saying.
The three reappointed board members are Muromachi, fellow company
insider Fumiaki Ushio, and Hiroyuki Itami, a professor at the Tokyo
University of Science, the report adds.
About Toshiba Corp.
The Troubled Company Reporter-Asia Pacific, citing Reuters,
reported on July 22, 2015, that an independent investigation said
in a report on July 21 that Toshiba Corp. overstated its operating
profit by JPY151.8 billion ($1.22 billion) over several years in
accounting irregularities involving top management.
The investigating committee said in a report filed by Toshiba to
the Tokyo Stock Exchange that Toshiba President and Chief
Executive Hisao Tanaka and his predecessor, Vice Chairman Norio
Sasaki, were aware of the overstatement of profits and delay in
reporting losses in a corporate culture that "avoided going
against superiors' wishes," according to Reuters.
The TCR-AP, citing Bloomberg News, reported on July 22, 2015, that
Toshiba Corp. President Hisao Tanaka and two other executives quit to
take responsibility for a $1.2 billion accounting scandal that caused
the maker of nuclear reactors and household appliances to restate
earnings for more than six years.
Norio Sasaki, the vice chairman, and Atsutoshi Nishida, a former
president who was serving as adviser, also resigned, the Tokyo-
based company said July 21, more than two months after announcing
it was investigating possible accounting irregularities, according to Bloomberg.
On Sept. 11, 2015, the TCR-AP reported that Moody's Japan K.K.
affirmed Toshiba Corporation's Baa2 issuer and senior unsecured
debt ratings as well as its Ba1 subordinated debt rating and P-2
commercial paper rating. The ratings outlook is stable.
The ratings affirmation follows Toshiba's announcement of its
results for the fiscal year ended March 31, 2015 (FYE3/2015) and
the restatement on September 7 of its results for FYE3/2009
through 3Q FYE3/2015.
Toshiba Corporation (TYO:6502) -- http://www.toshiba.co.jp/-- is
a Japan-based manufacturer involved in five business segments.
The Digital Products segment offers cellular phones, hard disc
devices, optical disc devices, liquid crystal televisions, camera
systems, digital versatile disc (DVD) players and recorders,
personal computers (PCs) and business phones, among others. The
Electronic Device segment provides general logic integrated
circuits (ICs), optical semiconductors, power devices, large-scale
integrated (LSI) circuits for image information systems and liquid
crystal displays (LCDs), among others. The Social Infrastructure
segment offers various generators, power distribution systems, water
and sewer systems, transportation systems and station automation
systems, among others. The Home Appliance segment offers
refrigerators, drying machines, washing machines, cooking utensils,
cleaners and lighting equipment. The Others segment leases and sells
real estate.
=====================
P H I L I P P I N E S
=====================
BAYAN TELECOM: On Track to Exit Corporate Rehabilitation
--------------------------------------------------------
BusinessWorld Online reports that Bayan Telecommunications, Inc.
(Bayantel) is on course to exit its corporate rehabilitation way ahead
of the original 2023 target after the ailing telecommunications firm
and its new controlling shareholder Globe Telecom, Inc. met all the
requirements of its rehab plan.
"You have to file the formal documents with the court to close it, but
all of the actions including the conversion of loans into equity has
been done. All of the actions on the amended rehab plan has been
done," the report quotes Globe Chief Financial Officer and Treasurer
Alberto M. de Larrazabal as saying in an interview.
BusinessWorld relates that the debt-to-equity conversion transaction
between Globe and Bayantel ensured the latter's continued viability as
a service provider, allowing it to exit rehabilitation and improve its
current service offering, Globe's General Legal Counsel Froilan M.
Castelo said in July.
The report recalls that Bayantel's newly-appointed Chairman Gil B.
Genio said last month Globe could be out of the court-assisted rehab
by October -- ahead of the original target of 2023, with the process
cut short following the entry of Ayala-led firm.
Asked if Bayantel is on track to exit the court-assisted rehab by next
month, Globe President and Chief Executive Officer Ernest L. Cu said:
"Sana."
"It's just paperwork with the court. It's just a formality," Mr.
Larrazabal, as cited by BusinessWorld, said.
Globe is still reviewing how much fresh capital it would infuse into
Bayantel, the report notes.
"We don't know yet, but we will modernize Bayantel facilities for
sure," Mr. Cu said, the report relays.
Globe already acquired a 38% interest in Bayantel in October 2013
after the Pasig City Regional Trial Court Branch 158 approved the
amended rehabilitation plan jointly filed by the companies, where
Globe converted Bayantel's unsustainable debt into common shares,
BusinessWorld discloses citing the listed telecommunication firm's
2014 annual report.
Globe, as principal creditor, was authorized to convert a portion of
the debt into a controlling interest of at least 54% in Bayantel's
outstanding shares, the report notes.
Globe reached a purchase agreement with Bayan Telecommunications
Holdings, Corp. and Lopez Holdings, Corp. in July for their entire
equity holdings in Bayantel. The debt-to-equity conversion scheme,
involving up to 70.76 million shares, jacked up Globe's control to
98.57% from 56.87%, the report notes.
BusinessWorld says the Ayala-led telco is buying out the rest of
Bayantel's minority shareholders.
So far, Globe's total investment in the acquisition of Bayantel,
including debt-to-equity conversions, has amounted to $172 million,
Mr. Genio had said, the report adds.
About Bayantel
Bayan Telecommunications Holdings Corporation, which is 85.4%
owned by Benpres Holdings Corp. and the Lopez Group, was
incorporated on October 15, 1993. Bayan Telecommunications Inc.
-- http://www.bayantel.com.ph/-- is the operating arm of BTHC
and is formerly known as International Communications
Corporation. BayanTel is a telecommunications company offering
an extensive breadth of traditional links and circuitry as well
as cutting edge data and voice applications. BayanTel's
existing service areas in Metro Manila and Bicol, as well as its
local exchange service areas in the Visayas and Mindanao regions
combined, cover a population of over 25 million, nearly 33% of
the population of the Philippines. BayanTel has operations in
Japan and the U.K.
In a report on Aug. 15, 2007, the Philippine Star said BayanTel
was setting aside PHP760 million to PHP800 million in 2007 to pay
down debt, using internally-generated cash. BayanTel was placed
into receivership in 2004.
Weighed down by its huge debt, the company sought corporate
rehabilitation with the Pasig City Regional Trial Court in
July 2003 to restructure its short-and long-term bank loans and
bonds payable. The Pasig Regional Trial Court Branch 158 approved the
company's financial rehabilitation on June 28, 2004, based on
sustainable debt level of PHP17.13 billion, payable over 19 years.
According to RTC Judge Rodolfo R. Bonifacio, the remainder of
BayanTel's debt may be converted to another appropriate instrument
that will not be a financial burden to parent Benpres Holdings Corp.
It also mandated BayanTel to treat all creditors equally. Some of
BayanTel's creditors have appealed the lower court decision.
As reported in the Troubled Company Reporter-Asia Pacific on
July 7, 2015, Manila Standard Today said the National
Telecommunications approved the takeover of Bayan
Telecommunications Inc. by Globe Telecom Inc. amid opposition from
rival companies.
Globe acquired 98.26% of BayanTel's loans and 100% of Radio
Communications of the Philippines Inc.'s liabilities. RCPI, a unit of
BayanTel, is owned by the Lopez Group, Manila Standard noted. The
acquisition cost of $130 million was lower than the
$400-million face value of BayanTel, according to Manila Standard.
=================
S I N G A P O R E
=================
JURONG AROMATICS: Placed in Receivership After Debt Talks Fail
--------------------------------------------------------------
Bloomberg News reports that Jurong Aromatics Corp, operator of one of
the world's largest petrochemical plants, has been pushed into
receivership after debt-restructuring talks stalled, according to a
filing with Singapore's Accounting and Corporate Regulatory Authority.
Restructuring firm Borrelli Walsh has been appointed the receiver,
according to the filing dated September 28, Bloomberg relays. Cosimo
Borrelli, Hong Kong-based managing director at the receiver, didn't
immediately respond to a phone call and e-mail. Jurong Aromatics said
in an e-mailed statement it declined to comment.
Jurong Aromatics hasn't been able to service interest payments amid a
plunge in oil prices and operations have been stalled since December,
people familiar with the matter said last month, Bloomberg recalls.
The group had been locked in talks with lenders including BNP Paribas
SA and Standard Chartered Plc, as well as suppliers Glencore Plc, BP
Plc and SK Energy Co, the people said, asking not to be identified
because the details are private, according to Bloomberg.
Bloomberg notes that the latest move also comes amid a China-led
slowdown that's hurt prices for commodities from oil to copper and
investor concerns that Jurong Aromatics's shareholder Glencore isn't
cutting debt quickly enough.
According to Bloomberg, the Singapore government's Economic
Development Board had said the US$2.4 billion plant has given a boost
to the city's reputation as a leading chemical hub. The agency's
investment arm has a 5% stake in the project and had tried to
facilitate discussions among the stakeholders, the report says.
The company had US$1.53 billion in liabilities and US$68.7 million of
accumulated losses as at the end of 2013, Bloomberg discloses citing
the company's latest available financial records. BP, Glencore, SK
Energy have secured claims against the firm, while BNP Paribas led a
US$1.73 billion loan facility in 2011 that has yet to be repaid, the
records show, Bloomberg reports.
Jurong Aromatics is currently owned 30% by SK International
Investment, 25% by China's Jiangsu Sanfanxiang Group Co and 10% by
Glencore. Other shareholders include Arovin Ltd., Shefford
Investments Holding, UVM Investment Corp., EDB Investments Pte and
Essar Ltd., company records filed with Singapore's Accounting and
Corporate Regulatory Authority show. EDB Investments is a unit of
Singapore's Economic Development Board.
================
S R I L A N K A
================
SRI LANKA INSURANCE: Fitch Affirms 'BB-' Rating; Outlook Stable
---------------------------------------------------------------
Fitch Ratings has affirmed Sri Lanka Insurance Corporation Limited's
(SLIC) Insurer Financial Strength rating (IFS) at 'BB-' with a Stable
Outlook. The agency has also affirmed the National Insurer Financial
Strength Rating and National Long-Term Rating at 'AA(lka)' with Stable
Outlook.
KEY RATING DRIVERS
SLIC's ratings reflect its well-established franchise and market
position in Sri Lanka, 99.9% state ownership, and its importance to
the government as the largest state-owned insurer.
SLIC's profit retention dropped to 38% in 2014 (2013: 78%) due to
higher dividends to the government. In 2014, total comprehensive
income increased to LKR14.9 bil. (2013: LKR7.5 bil.) driven mainly by
fair-value gains in available-for-sale financial assets (LKR11.2 bil.
in 2014 and LKR2.8 bil. in 2013). Net profit in the non-life segment
dropped to LKR1.65 bil. in 2014 (2013: 2.9 bil.) due to poor
underwriting results. This stemmed mainly from a one-time increase in
provisions for third-party motor claims.
SLIC's total premiums fell to LKR20.7 bil. in 2014 from
LKR21.35 bil. in 2013 with the gross written premiums (GWP) in both
life and non-life declining slightly. The non-life business's
combined ratio deteriorated in 2014 due to higher reserving for
third-party motor claims and the competitive environment.
SLIC has significant investments in non-core subsidiaries that have
been made in line with government policy and a high proportion of
equities in its investment portfolio, which weaken SLIC's risk-based
capital (RBC). The company is also exposed to high interest rate risk
due to the asset and liability mismatches in the life business, which
stem from the limited availability of long-term investments in the
market. The company is in discussions with the regulator on
separating its life and non-life businesses to comply with new
regulatory requirements.
SLIC's regulatory solvency ratio at end-June 2015 was 13.6x
(end-2013:11.5x) for life and 3.4x (end-2013: 4.9x) for non-life.
These ratios are well above the regulatory required ratio of 1x for
each business and compare well against that of its peers. RBC, which
takes into account the high exposure to equity investments, was 202%
for non-life and 448% for life, well above the regulatory minimum of
120%. Fitch expects the RBC for both life and non-life to be
maintained above 200% in the medium to long term.
SLIC has an asset base of over LKR150 bil. The company is the market
leader in non-life insurance in Sri Lanka, accounting for 22% of GWP
in the market. In the life segment, the company is the
second-largest, accounting for 18% of market GWP in 2014.
RATING SENSITIVITIES
An upgrade is unlikely in the near term, as SLIC's IFS rating is at
the same level as Sri Lanka's Long-Term Local-Currency IDR
(BB-/Stable). Conversely, if Sri Lanka's rating is downgraded, SLIC's
Insurance Financial Strength rating is likely to be downgraded.
SLIC's National Ratings may be upgraded if it is able to maintain
sizeable market share, maintain its combined ratio well below 95%
(2014: 103.7%) and significantly reduce its non-core investments.
The National and International ratings may be downgraded if there is:
-- Significant weakening in SLIC's market position,
-- Deterioration in the non-life combined ratio to above 100%
on a sustained basis,
-- Weakening in SLIC's importance to the government, increased
pressure from the state for higher dividend payouts or a
significant increase in non-core investments.
===============
T H A I L A N D
===============
SAHAVIRIYA STEEL: UK Unit Mothballs Redcar Plant, Axes 1,700 Jobs
-----------------------------------------------------------------
Reuters reports that Britain's second-biggest steelmaker SSI UK said
on September 28 that it plans to mothball its Redcar plant in
northeast England and axe about 1,700 jobs, calling its future into
question and deepening a crisis in the British steel sector.
Reuters relates that the loss-making company, a unit of Thailand's
biggest steelmaker Sahaviriya Steel Industries (SSI), has been hit by
a slump in steel prices this year ST-CRU-IDX, which it expects will
continue in the short term.
The Redcar plant, SSI's only British operation, employs 2,000 people
directly, meaning it plans to axe nearly its entire workforce, the
report discloses.
According to the report, the company said it will continue to work
with stakeholders with a view to restarting operations in the future,
and will therefore keep its Redcar coke ovens and power stations
running.
"This is an extremely sad day for all of us, and in particular our
employees and their families," Reuters quots Cornelius Louwrens, SSI
UK's chief operating officer, as saying.
SSI UK missed several debt repayments earlier this year. Offering some
relief to workers, it said on September 25 that it would process this
month's payroll, the report relays.
"The steel industry across the UK is facing very challenging economic
conditions," said UK business minister Anna Soubry.
"The price of steel has almost halved over the past year. While
government cannot alter these conditions, I have called a steel summit
to see what more can be done to help."
Soubry previously promised to raise allegations of "dumping" by
Chinese firms - where products are sold at below fair value - during a
trip to China.
The Redcar plant, on the coast near the industrial town of
Middlesbrough, is in an economically deprived region of Britain, where
locals fear the loss of thousands more jobs indirectly related to
steelmaking.
"Any loss of the UK's steel-making capability is a huge blow and has
knock-on effects across the manufacturing supply chain," said Terry
Scuoler, chief executive of Britain's largest manufacturing body, EEF.
=============
V I E T N A M
=============
VIETNAM NATIONAL: S&P Lowers CCR to 'B'; Outlook Stable
-------------------------------------------------------
Standard & Poor's Ratings Services said that it had lowered its
long-term corporate credit rating on Vietnam National Coal And
Minerals Industries Holding Corp. Ltd. (Vinacomin) to 'B' from 'B+'.
The outlook is stable. At the same time, S&P lowered its long-term
ASEAN regional scale rating on the Vietnam-based coal and power
producer to 'axBB-' from 'axBB'.
"We downgraded Vinacomin because the company's cash flow adequacy and
EBITDA interest coverage over the next 12 months are likely to be
weaker than we had previously expected," said Standard & Poor's credit
analyst Yuehao Wu. "Our view is based on the company's persistently
high debt-funded capital spending amid tough operating conditions."
S&P now forecasts that Vinacomin's ratio of funds from operations
(FFO) to debt will weaken to less than 12% and its ratio of debt to
EBITDA will exceed 5.0x over the next 12-18 months. Accordingly, S&P
revised the company's financial risk profile to "highly leveraged"
from "aggressive." S&P lowered its estimate of Vinacomin's annual
EBITDA to Vietnamese dong (VND) 13 trillion-VND15 trillion, from VND17
trillion-VND19 trillion previously. The company reported EBITDA of
VND15.7 trillion in 2014. This is because of possibly lower coal
prices and volumes.
S&P anticipates that Vinacomin's capital expenditure will remain high
over the next two years to maintain coal production and on power
projects. S&P expects the company's negative free operating cash
flows to reach VND10 trillion-VND12 trillion annually through 2017 as
coal prices weaken and operating cash flows are insufficient to meet
the high capital spending needs. Vinacomin will likely rely on debt
to bridge the gap. S&P expects the company's debt to increase to
VND90 trillion-VND95 trillion by 2016, from VND74 trillion in 2014.
Growing coal sales to state-owned power producer Electricity of
Vietnam (EVN) is credit negative for Vinacomin, in S&P's view. This
growth would raise customer concentration risks, and this could
further increase trade receivables from EVN, which have historically
been high. It will also make Vinacomin more sensitive to pricing
interference from the government, making its operating cash flows more
volatile. S&P expects coal sales to EVN to increase to 60% of total
sales volume by 2017, from 42% in 2014 and 26% in 2013.
Vinacomin's capital structure is increasingly exposed to currency
swings, in S&P's opinion. Declining export sales, increasing sales to
EVN, and the prospect of rising interest rates in the U.S. will likely
squeeze the company's interest coverage ratios, particularly on U.S.
dollar debt.
S&P assess Vinacomin's management and governance as "weak," given the
company's complex organizational structure, with 85 subsidiaries and
associates, and more than 150 projects currently in the pipeline. S&P
considers Vinacomin's financial disclosure to remain substandard even
though it is modestly improving.
"The stable outlook reflects our view that Vinacomin's financial risk
profile will stabilize at lower levels because of weaker margins and
rising debt," said Ms. Wu.
S&P may lower the rating if Vinacomin's interest servicing capacity
weakens beyond S&P's expectation. A consolidated EBITDA interest
coverage of less than 1.5x would be such an indication. This could
arise from sustained high capital spending with little accretion to
the operating profitability, continued tough industry conditions as
shown by reduced coal volumes or prices, a delay in raising on-grid
electricity tariffs, or stagnating alumina prices.
S&P could also lower the rating if Vinacomin's U.S. dollar income
cannot sufficiently meet its U.S. dollar expenses. This could
materialize if the company's reduced U.S. dollar cash inflows from
export revenues coincide with it taking on more U.S. dollar debt with
higher interest rates.
The likelihood of an upgrade is limited over the next 12-18 months.
However, S&P could raise the rating if it sees a material and
sustainable improvement in Vinacomin's capital structure. An
FFO-to-debt ratio that is higher than 15% could indicate such
improvement. This could happen if the company's operating
profitability improves sustainably on the back of more supportive coal
prices, better meeting its capital spending requirements. An upgrade
hinges on a stabilized cost of funding and an adequate interest
coverage ratio on U.S. dollar debt.
===============
X X X X X X X X
===============
* Asian High-Yield Corporate Default Rate will Stay Low in 2015
---------------------------------------------------------------
Moody's Investors Service says that its Credit Transition Model
anticipates that the Asian high-yield corporate default rate will stay
at a low 3.1% for all of 2015.
"The forecast reflects our central macroeconomic scenario that the
recovery in the US -- and to a lesser extent, the euro area and Japan
-- will be offset by the ongoing slowdown in China, as well as the low
or even negative growth in Latin America," says Clara Lau, a Moody's
Group Credit Officer.
"Performance of Chinese corporates, in particular in cyclical
industries or sectors with excess capacity, such as steel, metals and
mining, commodities trading and property development will stay
pressured, due to China's slowing economic growth," says Lau.
"However, continued monetary policy easing by the Chinese government,
will help to prevent an escalation of corporate defaults,' adds Lau.
Moody's analysis is contained in its just-released report titled
"Default Report: Asian Non-Financial Corporate High-Yield Default Rate
Will Stay Low Over the Near-term," and is authored by Lau.
The trailing 12-month high-yield default rate for Asian non-financial
corporates was at 3.6% at end-July 2015; a slight fall from the 3.9%
at end-2014. The high-yield default rate Chinese non-financial
corporates was at 6.7%, up from 5.1% at year-end 2014 for the same
periods.
In the seven months between January and July 2015, three issuers in
Asia defaulted; two of them were Chinese firms and the third was
Indonesian. By industry, two of the three defaulters operated in the
coal mining sector; reflecting the ongoing challenges facing the
industry. The third was a Chinese property company.
The low Asian high-yield default rate of 3.1% forecast for the 12
months ended 31 December 2015 is in line with Moody's global default
forecast of 2.7% for the same period, which is low when compared with
the historical global average of 4.5%. The benign default outlook for
global corporates is supported by fundamental credit metrics, such as
healthy liquidity levels and manageable maturity profiles.
*********
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, Psyche A. Castillon, Julie Anne L. Toledo, and Peter A.
Chapman, Editors.
Copyright 2015. All rights reserved. ISSN: 1520-9482.
This material is copyrighted and any commercial use, resale or
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Information contained herein is obtained from sources believed
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TCR-AP subscription rate is US$775 for 6 months delivered via e-
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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 ***