/raid1/www/Hosts/bankrupt/TCRAP_Public/160411.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Monday, April 11, 2016, Vol. 19, No. 70
Headlines
A U S T R A L I A
ARRIUM LIMITED: Placed Into Administration
AUSPEC CONSTRUCTIONS: First Creditors' Meeting Set for April 18
AUSTRAIL CIVIL: First Creditors' Meeting Slated for April 18
CORNER OFFICE: First Creditors' Meeting Set For April 18
MASSENA PTY: First Creditors' Meeting Scheduled for April 15
MDS TRANSPORT: First Creditors' Meeting Set for April 19
C H I N A
CENTRAL CHINA: Moody's Says 2015 Results Won't Affect Ba3 CFR
CHINA UNITED: Moody's Downgrades IFS Rating to Ba1
KU6 MEDIA: Enters Into Merger Deal for Going Private Transaction
SOHO CHINA: Moody's Cuts Corporate Family Rating to Ba3
I N D I A
AIMS BEVERAGES: CRISIL Assigns B Rating to INR79.5MM LT Loan
ANJANEYA COTTON: CARE Assigns B+ Rating on INR5.13cr LT Loan
CHL LIMITED: CARE Lowers Rating on INR49.75cr LT Loan to 'D'
COSMAS RESEARCH: CRISIL Suspends 'D' Rating on INR510MM Term Loan
DC INDUSTRIAL: CARE Reaffirms 'D' Rating on INR188cr ST Loan
DEEPAM SILK: CRISIL Assigns B+ Rating to INR70MM Cash Loan
DIPU ENTERPRISES: CRISIL Reaffirms B+ Rating on INR50MM Cash Loan
DIVINE RESORT: CARE Assigns B+ Rating to INR6.30cr LT Loan
ESSAR STEEL: CARE Reaffirms D Rating on INR42,100cr Loan
HANWANT FASTENERS: CARE Reaffirms B+ Rating on INR5.41cr LT Loan
HARI OMRETAIL: CARE Assigns B+ Rating to INR10cr LT Loan
HARMAN EXPORTS: CRISIL Suspends B+ Rating on INR152.5MM LT Loan
KS PIPE: Ind-Ra Assigns BB- Issuer Rating; Outlook Stable
LAXMI BUILDERS: CRISIL Assigns 'B' Rating to INR140MM Cash Loan
MAAMUNDESHWARI AGRO: CRISIL Assigns B- Rating to INR41MM LT Loan
MOBILESTORE SERVICES: CARE Raises Rating on INR70.66cr Loan to B+
MOR POULTRIES: CRISIL Suspends B- Rating on INR149MM Cash Loan
NANDI GRAIN: CARE Reaffirms 'D' Rating on INR69.30cr LT Loan
NEWRISE HEALTHCARE: CARE Reaffirms D Rating on INR75cr LT Loan
PANACEA BIOTEC: CARE Ups Rating on INR1,202.88cr Loan to B-
PARI AGRO: CRISIL Suspends B+ Rating on INR70MM Cash Loan
PARIKH BROTHERS: Ind-Ra Affirms BB- Issuer Rating; Outlook Stable
PERCEPT SOLAR: CRISIL Assigns 'B' Rating to INR70MM LT Loan
PRASHANTH POULTRY: CRISIL Cuts Rating on INR107.7MM LT Loan to D
R M AUTO: CARE Assigns B+ Rating to INR7.50cr LT Loan
R. P. TEK: CRISIL Suspends 'B' Rating on INR60.5MM LT Loan
RAJ RAYON: Ind-Ra Lowers LT Issuer Rating to D; Outlook Stable
RELIANCE COMMUNICATION: Moody's Affirms Ba3 CFR; Outlook Now Neg.
RMG ALLOY: CARE Reaffirms 'D' Rating on INR257.40cr Loan
S. V. FOODS: CARE Assigns 'B' Rating to INR6.50cr LT Loan
SAGAR EDUCATIONAL: CRISIL Suspends 'D' Rating on INR45MM Loan
SANT DEEPAK: CRISIL Suspends 'D' Rating on INR180MM Term Loan
SHIV SHAKTI: CRISIL Suspends B+ Rating on INR133MM Bill Loan
SHIW PRASAD: Ind-Ra Assigns 'IND BB' LT Issuer Rating
SHREE DURGA: CRISIL Suspends 'D' Rating on INR60MM LT Loan
SHRI MAHAVIR: CARE Lowers Rating on INR537.74cr Loan to D
SHRI MASANIYAMMAN: CRISIL Ups Rating on INR92.2MM Loan to B+
SOMANIL CHEMICALS: CRISIL Suspends B Rating on INR45MM Loan
SRI VENKATA: CRISIL Assigns 'B' Rating to INR170MM Cash Loan
SRV KNIT: CRISIL Raises Rating on INR57MM Cash Loan to B+
STOTZ GEARS: CRISIL Suspends B- Rating on INR32MM Cash Loan
SUNDARAM STEELS: CARE Revises Rating on INR17.07cr Loan to BB-
SWASTIK METAFORGE: CRISIL Suspends 'D' Rating on INR39.8MM Loan
TARUN OILS: Ind-Ra Assigns B+ LT Issuer Rating; Outlook Stable
TATA CHEMICALS: Fitch Affirms 'BB+' LT IDR; Outlook Stable
THOMAS CONSTRUCTIONS: CRISIL Assigns B+ Rating to INR41.8MM Loan
TRANSSTROY INDIA: CARE Reaffirms D Rating on INR1,730.2cr Loan
TRINITY BEVERAGES: CARE Reaffirms D Rating on INR59.24cr LT Loan
VAJRAKALPA COTTON: CRISIL Assigns B+ Rating to INR140MM Loan
VARSHA SUPER: CRISIL Reaffirms B+ Rating on INR137.5MM Loan
VILAS JAVDEKAR: CARE Reaffirms B+ Rating on INR13.40cr Loan
VISWAKARMA ROOFINGS: CARE Assigns B+ Rating to INR15cr LT Loan
I N D O N E S I A
JAPFA COMFEED: Fitch Affirms 'BB-' IDR; Outlook Negative
N E W Z E A L A N D
PRESTIGE EVENTS: Goes into Receivership
STONEWOOD HOMES: Two Companies Owe IRD More Than NZ$1MM
- - - - -
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A U S T R A L I A
=================
ARRIUM LIMITED: Placed Into Administration
------------------------------------------
Arrium Limited announced on April 7, 2016, that Voluntary
Administrators have been appointed to oversee the affairs of the
Company and subsidiaries.
Said Jahani, Paul Andrew Billingham, Michael Gerard McCann and
Matthew James Byrnes of Grant Thornton have been appointed to act
as Voluntary Administrators for each of the Relevant Companies.
As previously announced, Arrium has been in discussions with its
lenders (banks and noteholders) following the lenders' rejection
of the recapitalisation plan for Arrium involving GSO Capital
Partners LP (on behalf of funds managed by it and its
affiliates) that was announced on Feb. 22, 2016.
"These discussions have now ceased. After considering the
available alternatives, in the current circumstances it has
become clear to the board of Arrium that it has,
unfortunately, been left with no option other than to place the
Relevant Companies into voluntary administration in order to
protect the interests of stakeholders," the company said.
Arrium Limited (ASX:ARI) -- http://www.arrium.com/-- is an
Australia-based mining and materials company. The Company is
engaged in mining and supply of iron ore and steelmaking raw
materials; manufacture and supply of mining consumable products;
manufacture and distribution of steel products, and recycling of
ferrous and non-ferrous scrap metal. Its segments include Mining,
Mining Consumables, Steel and Recycling. Its Mining segment
exports hematite iron ore and supplies both pelletized magnetite
iron ore and hematite lump iron ore. Its Mining Consumables
segment consists of Moly-Cop grinding media business, Waratah
steel mill and Altasteel steel mill. Its Mining Consumables
segment supplies various mining consumables, such as grinding
media, wire ropes and rail wheels. Its Steel segment manufactures
billet and distributes steel and metal products, including
structural steel selections, steel plate, angels, channels,
reinforcing steel and carbon products. Its Recycling segment
supplies steelmaking raw materials.
AUSPEC CONSTRUCTIONS: First Creditors' Meeting Set for April 18
---------------------------------------------------------------
Glenn Anthony Crisp of Jirsch Sutherland was appointed as
administrator of Auspec Constructions Pty Ltd on April 6, 2016.
A first meeting of the creditors of the Company will be held at
Jirsch Sutherland, Melbourne, Level 12, 460 Lonsdale Street, in
Melbourne, on April 18, 2016, at 11:30 a.m.
AUSTRAIL CIVIL: First Creditors' Meeting Slated for April 18
------------------------------------------------------------
John Shanahan of Gervase Consulting was appointed as
administrator of Austrail Civil Pty Ltd on April 7, 2016.
A first meeting of the creditors of the Company will be held at
Eagle Street Business Centre - Level 9, 167 Eagle Street, in
Brisbane, Queensland, on April 18, 2016, at 12:00 p.m.
CORNER OFFICE: First Creditors' Meeting Set For April 18
--------------------------------------------------------
Mark William Pearce and Michael Dullaway of Pearce & Heers
Insolvency Accountants were appointed as administrators of The
Corner Office Pty Ltd on April 7, 2016.
A first meeting of the creditors of the Company will be held at
Level 12, 127 Creek Street, in Brisbane, Queensland, on April 18,
2016, at 10:30 a.m.
MASSENA PTY: First Creditors' Meeting Scheduled for April 15
------------------------------------------------------------
Robert Michael Kirman and Matthew Wayne Caddy of McGrathNicol
were appointed as administrators of Massena Pty Ltd, trading as
Star Freightlines, on April 5, 2016.
A first meeting of the creditors of the Company will be held at
St Martins Centre Conference Suite, Level 9, 40 St Georges, in
Terrace, Perth, on April 15, 2016, at 11:00 a.m.
MDS TRANSPORT: First Creditors' Meeting Set for April 19
--------------------------------------------------------
Jonathan Paul McLeod of McLeod & Partners was appointed as
administrator of MDS Transport Logistics Pty Ltd on April 7,
2016.
A first meeting of the creditors of the Company will be held at
McLeod & Partners, Hermes Building, Level 1, 215 Elizabeth
Street, in Brisbane, Queensland, on April 19, 2016, at 10:00 a.m.
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C H I N A
=========
CENTRAL CHINA: Moody's Says 2015 Results Won't Affect Ba3 CFR
-------------------------------------------------------------
Moody's Investors Service says that Central China Real Estate
Limited's (CCRE) results for calendar 2015 were broadly in line
with Moody's expectations. Consequently, the results will not
immediately affect the company's Ba3 corporate family rating, its
Ba3 senior unsecured rating, or the stable outlook on the
ratings.
"CCRE's 2015 results showed that the company achieved a moderate
improvement in its leverage and liquidity, supported by robust
revenue growth and the company's disciplined approach to land
acquisitions," says Kaven Tsang, a Moody's Vice President and
Senior Credit Officer.
"These improvements partly mitigated the pressure on its interest
coverage, which was in turn because of the sharp fall in its
profit margins," adds Tsang.
In 2015, CCRE achieved a strong 36.1% year-on-year growth in its
reported revenues to RMB12.6 billion. Moody's estimates that the
company's revenues grew by 41.3% year-on-year after incorporating
the contribution from its joint ventures (JVs).
At the same time, its adjusted debt -- including its share of JV
debt -- was largely stable, due to improved cash flow from
contracted sales and lower capex for land acquisitions.
As a result, CCRE's revenue/adjusted debt -- adjusted for its JV
financials -- strengthened to 86.0% in 2015 from 58.4% in 2014.
Moody's notes that during 2015, CCRE cut prices to clear existing
inventories in low tier cities.
While such destocking efforts have enhanced the company's balance
sheet and liquidity, its reported gross margin dropped sharply to
22.2% in 2015 from 33.6% in 2014. Moody's estimates that CCRE's
JV projects faced a similar decline in profit margins.
These sharp falls have offset the impact of revenue growth.
Consequently, its JV-adjusted EBIT/interest fell to 2.1x in 2015
from 2.5x in 2014. This ratio is weak for the company's Ba3
ratings.
While Moody's expects that CCRE's margin will remain under
pressure over the next 1-2 years - due to destocking activities
in low-tier cities -- lower funding costs in China will partly
mitigate the impact.
Moody's expects that CCRE's JV-adjusted EBIT/interest will trend
towards 2.5x over the next 1-2 years. Any deviation from such a
trend -- due to further margin contraction or significant
increases in borrowings -- will pressure its Ba3 ratings.
Moody's further expects that CCRE will maintain moderate revenue
growth over the next 1-2 years, supported by its stable
contracted sales, and that the company will continue to adopt a
disciplined approach towards managing its land acquisitions.
As a result, its revenue/adjusted debt will stay at around 80%-
85%.
CCRE's contracted sales edged up 1.2% year-on-year to RMB15.7
billion in 2015. At end- 2015, the company registered
unrecognized contracted sales of around RMB9.39 billion,
including RMB1.96 billion from its JVs.
CCRE also reported a 40.4% year-on-year increase in contracted
sales to RMB1.6 billion during the three months between January
and March 2016.
Moody's expects that CCRE's current sales momentum, as well as
the stable property market in its core Zhengzhou market, will
provide some support for the company's contracted sales and
revenues in 2016. According to CCRE, new projects will be
launched in Zhengzhou in 2016. These projects will account for
around 38.5% of its contracted sales target in 2016.
Moody's points out that CCRE's liquidity has improved. In
particular, its adjusted cash-to-short-term debt - including
amounts due to and from JVs- rose to 1.5x at end-2015 from below
1.0x at end-2014. Such a liquidity position provides some buffer
against the operating risks it faces in low-tier cities.
Central China Real Estate Limited is a leading property developer
in China's Henan Province. Founded in 1992, it listed on the Hong
Kong Stock Exchange in June 2008.
CHINA UNITED: Moody's Downgrades IFS Rating to Ba1
--------------------------------------------------
Moody's Investors Service has downgraded the insurance financial
strength rating of China United SME Guarantee Corporation
(Sinoguarantee) to Ba1 from Baa3. The rating outlook is now
stable. At the same time, Moody's has downgraded to Ba1 from Baa3
the backed senior unsecured ratings of Golden Bauhinia Investment
Holdings Co Ltd. and BL Capital Holdings Limited.
Sinoguarantee is a financial guarantee company in China, with its
main business in financial guarantees and wholesale risk-sharing.
RATINGS RATIONALE
This rating action reflects an upcoming shareholding change. On
January 14, 2016, Sinoguarantee received a capital injection of
RMB 2.358 billion from three existing shareholders. The
transaction is still subject to certain regulatory approvals in
China. If the transaction is approved, HNA Capital Group Co.,
Ltd. (unrated) and an affiliate together will hold a 43.3% stake
in total, effectively becoming the largest shareholder. On the
other hand, China EXIM's stake will reduce to 7.0% from 9.75% as
it did not participate in the capital injection.
"As a result of the pending reduction in China EXIM's
shareholding and the government's reform of policy banks, Moody's
understands that China EXIM is less involved in Sinoguarantee's
business and operations compared to our assumptions when
Sinogurantee was first rated. As a result, Moody's has removed
extraordinary support as a consideration in the rating of
Sinogurantee."
"The current rating of Sinoguarantee reflects its stand-alone
credit profile, which Moody's assessed to be at ba1. This
reflects the strengthening of the company's capitalization
following the capital injection to support its business growth.
The company has substantial claim paying resources to cover
potential losses. However, its portfolio has not been tested
through a credit down cycle, and we also consider its significant
growth in the ramp-up period."
Further, delinquencies could rise as more clients may default in
light of slowing economic growth in China. The transparency of
its insured companies is limited, and the ultimate repayment
ability of the debt made by local government financing vehicles
and SMEs is highly uncertain. In addition, SMEs tend to provide
little collateral and are highly susceptible to economic cycles.
"Because the company is still relatively new, its portfolio is
exposed to high single-borrower concentration, including those to
related parties. Large concentrated exposures could expose
guarantors to substantial capital volatility if such guarantees
were to default. We expect that the company's portfolio will
become more diversified as the portfolio grows."
The ratings on the backed senior debt ratings of Golden Bauhinia
Investment Holdings Co Ltd. and BL Capital Holdings Limited are
also downgraded to Ba1 at the same time, based on the
unconditional and irrevocable guarantee provided by
Sinoguarantee. Hence, these debt ratings are in line with the
insurance financial strength rating of Sinoguarantee.
RATING DRIVERS
Upward rating pressure is limited at this stage, considering the
downside risk from weaker economic growth in China. However, the
rating could be upgraded if Sinoguarantee demonstrates that it
would maintain a strong level of capital while continuing to
reduce its single borrower concentration and improve
profitability.
However, the rating could be downgraded if the company's capital
adequacy and profitability weakens significantly, which could be
a result of higher claims from weaker economic conditions, or
significant investment losses. In addition, the rating could also
be downgraded if the company's portfolio characteristics
deteriorates significantly, gearing towards riskier, lumpier
risks, and/or engages in significant related party transactions.
China United SME Guarantee Corporation, headquartered in Beijing,
provides credit enhancement in the form of guarantees on
financial products such as bonds and loans. As of 31 December
2015, its total assets and shareholders' equity were RMB7.7
billion and RMB5.8 billion, respectively.
KU6 MEDIA: Enters Into Merger Deal for Going Private Transaction
----------------------------------------------------------------
Ku6 Media Co., Ltd. announced that it had entered into a
definitive Agreement and Plan of Merger with Shanda Investment
Holdings Limited ("Parent") and Ku6 Acquisition Company Limited,
a wholly-owned subsidiary of Parent ("Merger Sub").
Pursuant to the Agreement, Parent will acquire the Company for
cash consideration equal to US$0.0108 per ordinary share of the
Company or US$1.08 per American Depositary Share of the Company,
each representing 100 Shares. This price represents a premium of
54% over the closing price of the Company's ADSs on Jan. 29,
2016, the last trading date immediately prior to the Company's
announcement on Feb. 1, 2016, that it had received a "going
private" proposal, a premium of 42% over the average closing
price of its ADSs during the 30 trading days prior to Feb. 1,
2016, and a premium of 52% over the average closing price of its
ADSs during the 60 trading days prior to Feb. 1, 2016.
As of the date of the Agreement, Parent beneficially owns
approximately 69.9% of the Company's issued and outstanding
Shares.
Subject to the terms and conditions set forth in the Agreement,
Merger Sub will merge with and into the Company, with the Company
continuing as the surviving company and becoming a wholly owned
subsidiary of Parent, and each of the Shares issued and
outstanding immediately prior to the effective time of the Merger
(including Shares represented by ADSs) will be cancelled in
consideration for the right to receive US$0.0108 per Share or
US$1.08 per ADS, in each case, in cash, without interest and net
of any applicable withholding taxes, except for (i) the Shares
(including ADSs corresponding to such Shares) beneficially owned
by Parent, any Shares held by the Company or any of its
subsidiaries and any Shares (including ADSs corresponding to such
Shares) held by the depositary and reserved for issuance and
allocation pursuant to the Company's equity compensation plans,
in each case, immediately prior to the effective time of the
Merger, each of which will be cancelled without payment of any
consideration or distribution therefor, (ii) restricted Shares
(including restricted Shares represented by ADSs) issued by the
Company under the Company's equity compensation plans, each of
which will be cancelled at the effective time of the Merger and
thereafter represent only the right to receive the issuance of
restricted shares in the surviving company in accordance with the
Agreement, and (iii) Shares owned by holders who have validly
exercised and not effectively withdrawn or lost their rights to
dissent from the Merger pursuant to Section 238 of the Companies
Law of the Cayman Islands, which Shares will be cancelled at the
effective time of the Merger for the right to receive the fair
value of such Shares determined in accordance with the provisions
of Section 238 of the Companies Law of the Cayman Islands.
Parent intends to fund the transaction through cash at hand.
The Company's Board of Directors, acting upon the unanimous
recommendation of the special committee of independent directors
formed by the Board of Directors, unanimously approved the
Agreement, the plan of merger required to be filed with the
Registrar of Companies of the Cayman Islands in connection with
the Merger and the transactions contemplated thereby, including
the Merger, and resolved to recommend that the Company's
shareholders vote to approve the Agreement and the Transactions,
including the Merger. The Special Committee, which is composed
solely of independent directors who are unaffiliated with Parent,
Merger Sub or management of the Company, exclusively negotiated
the terms of the Agreement with Parent with the assistance of its
independent financial and legal advisors.
The Merger, which is currently expected to close in the second
half of 2016, is subject to customary closing conditions,
including the approval by an affirmative vote of shareholders
holding two-thirds or more of the votes represented by the Shares
(including Shares represented by ADSs) present and voting in
person or by proxy as a single class at the extraordinary general
meeting, which will be convened to consider the approval of the
Agreement and the Transactions, including the Merger. Parent
beneficially owns sufficient Shares to approve the Agreement and
the Transactions, including the Merger, and intends to vote in
favor of such approval. If completed, the Transactions will
result in the Company becoming a privately-held company and, if
applicable, the ADSs will no longer be listed on the NASDAQ
Global Market.
Duff & Phelps, LLC and Duff & Phelps Securities, LLC is serving
as financial advisor to the Special Committee, Weil, Gotshal &
Manges LLP is serving as U.S. legal advisor to the Special
Committee, and Harney Westwood & Riegels is serving as Cayman
Islands legal advisor to the Special Committee. Akin Gump
Strauss Hauer & Feld LLP is serving as legal advisor to Duff &
Phelps.
Davis Polk & Wardwell LLP is serving as U.S. legal advisor to
Parent. Conyers Dill & Pearman is serving as Cayman Islands
legal advisor to Parent.
A copy of the press release is available for free at:
http://is.gd/JJKCR1
About Ku6 Media
Ku6 Media Co., Ltd. -- http://ir.ku6.com/-- is an Internet video
company in China focused on User-Generated Content. Through its
premier online brand and online video Web site --
http://www.ku6.com/-- Ku6 Media provides online video uploading
and sharing service, video reports, information and entertainment
in China.
As of Dec. 31, 2015, the Company had $9.01 million in total
assets, $14.31 million in total liabilities and a $5.29 million
total shareholders' deficit.
PricewaterhouseCoopers Zhong Tian LLP, in Shanghai, the People's
Republic of China, issued a "going concern" qualification on the
consolidated financial statements for the year ended Dec. 31,
2014, citing that the Company's recurring losses, negative
working capital, net cash outflows, and uncertainties associated
with significant changes made, or planned to be made, in respect
of the Company's business model, raise substantial doubt about
the Company's ability to continue as a going concern.
SOHO CHINA: Moody's Cuts Corporate Family Rating to Ba3
-------------------------------------------------------
Moody's Investors Service has downgraded SOHO China Limited's
corporate family rating and the senior unsecured debt rating on
its bonds due November 2022 to Ba3 from Ba2.
The ratings outlook is negative.
This action concludes the rating review initiated on 14 March
2016.
RATINGS RATIONALE
"The downgrades reflect Moody's expectation that SOHO China's
credit metrics will remain weak for the next 12 -- 18 months,"
says Stephanie Lau, a Moody's Assistant Vice President and
Analyst.
SOHO China's credit metrics had already deteriorated in 2015, as
EBITDA/interest coverage declined to 0.7x-0.8x -- after excluding
fees related to the company's senior notes' tender and consent
solicitation -- from 3.1x in 2014. Moreover, net debt/EBITDA rose
to 9.4x from 2.3x.
This worst-than-expected deterioration in credit metrics was the
result of a substantial decline in development revenue of RMB5.6
billion in 2015, and which could not be offset by a 148% rise in
rental income to RMB1.05 billion.
Development revenue fell because of SOHO China's shift to a
build-and-hold strategy from a build-to-sell model. Such a
strategy exposes the company to execution risks and Moody's
expects its credit metrics to remain pressured.
EBITDA/interest coverage and net debt/EBITDA will remain weak at
around 0.8x-1.0x and 10x-11x respectively in 2016, levels which
do not support a Ba2 corporate family rating.
Moody's expects uncertainty over whether SOHO China can
successfully ramp up its Guanghualu SOHO II, Hongkou SOHO, and
Bund SOHO projects over the next 12-18 months and whether the
consequent rise in rental income can counter the expected further
deterioration in credit metrics.
"The negative rating outlook reflects uncertainty over whether
the company can successfully ramp up its leases to improve its
credit metrics against the backdrop of the slowdown in China's
economy," adds Lau who is also the Lead Analyst for SOHO China.
It also reflects the consideration that company's liquidity
position could weaken if it continues with dividend distributions
and capital spending at levels seen in 2015.
SOHO China's Ba3 corporate family is constrained by execution
risks related to the development of its investment property
portfolio, but -- at the same time -- reflects its track record
of developing commercial properties in Beijing and Shanghai's
prime locations.
SOHO China's liquidity position is adequate. Its cash holdings of
around RMB9.0 billion at end-2015 were sufficient to cover short-
term debt of around RMB1.9 billion.
But Moody's expects the company's cash position to decline in the
near future because it has announced plans to redeem in full its
outstanding senior notes of USD253 million due 2022 on 6 June
2016.
Upgrade rating pressure is unlikely in the near term, given the
negative outlook.
However, the rating outlook could return to stable if SOHO China
(1) successfully ramps up the leases of its investment
properties; and/or (2) improves EBITDA/interest to above 1.25 -
1.5x and debt/total assets to below 25%.
On the other hand, downgrade pressure could emerge if SOHO China
shows (1) a material weakening in liquidity; (2) delays in
ramping up the leases of its investment properties; or (3) weak
credit metrics, that is, debt/total assets rises above 30% or
EBITDA/interest is unlikely to trend above 1.25x -- 1.5x in 2017.
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 the core business districts in
Beijing and Shanghai.
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I N D I A
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AIMS BEVERAGES: CRISIL Assigns B Rating to INR79.5MM LT Loan
------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable' rating to the long-term
bank facilities of Aims Beverages (AB).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term
Bank Loan Facility 0.5 CRISIL B/Stable
Cash Credit 20.0 CRISIL B/Stable
Long Term Loan 79.5 CRISIL B/Stable
The rating reflects its limited track record of operations,
susceptibility to volatility in raw material prices, and risks
related to project execution and saleability. These rating
weaknesses are partially offset by the firm's comfortable
operating margin.
Outlook: Stable
CRISIL believes AB will benefit from timely commissioning of
project and availability of funds. The outlook may be revised to
'Positive' if the firm commissions the project on time and
demonstrates higher-than-expected capacity utilisation and hence
healthy ramp-up of operations. Conversely, the outlook may be
revised to 'Negative' if significant time and cost overruns
weaken capacity to adhere to the repayment programme stipulated
by lenders.
Established in September 2014, as a proprietorship firm, Gujarat-
based AB is promoted by Mr. Sagar Jasani. It will manufacture and
supply carbonated soft drinks and fruit-based drinks under its
Sailor, Frutas, and Rebellion. Its facility, with an installed
capacity of 120 bottles per minute, is expected to be
commissioned from April 2016.
ANJANEYA COTTON: CARE Assigns B+ Rating on INR5.13cr LT Loan
------------------------------------------------------------
CARE assigns 'CARE B+' rating to the long-term bank facilities of
Anjaneya Cotton Traders.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 5.13 CARE B+ Assigned
Rating Rationale
The rating assigned to the bank facilities of Anjaneya Cotton
Traders (ACT) is constrained by small scale of operations,
volatility in the raw material prices impacting margins, working
capital intensive nature of operation with leveraged capital
structure, highly regulated industry with Government fixing the
Minimum Support Price (MSP) of cotton and constitution of the
entity as a proprietary concern. The rating is, however,
underpinned by the satisfactory experience of the promoter,
adequate availability of the raw material due to presence in the
cotton-growing area of Andhra Pradesh and increasing trend in the
total operating income (TOI) during the last 3 years (FY13-FY15)
(refers to the period April 1 to March 31). Going forward, the
ability of the firm to further increase the scale of operations
with improvement in profitability and liquidity and the ability
of the firm to improve the capital structure and adequately
manage the working capital requirements are the key rating
sensitivities.
ACT is a propriety concern started by Mr Challa Vishwanadha
Bhargava Reddy in 2007. The day-to-day activities of the firm are
looked after by his father Mr Siva Venkata Reddy. The firm is
engaged in manufacturing and processing of Kappas into cotton
lint. The firm has 14 double roller cotton ginning machine and
baling press located at Guntur district of Andhra Pradesh.
During FY15, ACT registered a TOI of INR24.82 crore (Rs.18.66
crore in FY14) with net profit of INR0.14 crore (Rs.0.10 crore
in FY14).
CHL LIMITED: CARE Lowers Rating on INR49.75cr LT Loan to 'D'
------------------------------------------------------------
CARE revises the rating assigned to bank facilities of CHL
Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 49.75 CARE D Revised from
CARE BB
Rating Rationale
The revision in the ratings assigned to the bank facilities of
CHL Ltd (CHL) takes into consideration the on-going delays in
debt servicing on account of liquidity mismatches.
CHL was originally constituted as Cosmopolitan Builders and
Hoteliers Pvt. Ltd. in March 1979 and the name was changed to the
present one in December 1997. CHL is promoted by Dr. L.K.
Malhotra and Mr DV Malhotra who have business interests in India,
Kuwait and UAE. CHL is engaged in the hospitality business. It
owns and manages a hotel by the name of "The Suryaa" (Suryaa)
located at New Delhi. Suryaa has been operational since October
1982.It is a 5-Star hotel having 242 rooms, two dining
restaurant, one coffee shop, bakery shop, bar, fitness center and
4 halls for conference and banquet facilities for 30000 sq.ft of
commercial space. CHL has also set up of a new 5 star hotel in
Tajikistan through its 70% subsidiary CHL International (CHLI).
The Hotel is managed and marketed by Starwood Hotels as "Sheraton
Dushanbe Hotel". It consists of 172 rooms, two dining restaurant,
one cafe, a sports bar and 1790 sq.mt. of banquet space. The
hotel commenced its operations from December 24, 2014.
For FY15 (refers to the period April 01 toMarch 31), CHL
registered a total income of INR58.32 crore with PAT of INR0.48
crore against total income of INR59.98 crore with a PAT of
INR1.27 crore in FY14.
COSMAS RESEARCH: CRISIL Suspends 'D' Rating on INR510MM Term Loan
-----------------------------------------------------------------
CRISIL has suspended its rating on the bank facilities of
Cosmas Research Lab Limited (CRL; part of the Cosmas group).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 130 CRISIL D
Term Loan 510 CRISIL D
Working Capital
Term Loan 50 CRISIL D
The suspension of rating is on account of non-cooperation by CRL
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, CRL is yet to
provide adequate information to enable CRISIL to assess CRL's
ability to service its debt. The suspension reflects CRISIL's
inability to maintain a valid rating in the absence of adequate
information. CRISIL considers information availability risk as a
key factor in its rating process as outlined in its criteria
'Information Availability - a key risk factor in credit ratings'
For arriving at the rating, CRISIL has combined the business and
financial risk profiles of Cosmas Pharmacls Ltd. (CPL) with its
and its subsidiary CRL. The two companies, together referred to
as the Cosmas group. This is because the entities, are engaged in
similar lines of business, and have financial fungibility and a
common management.
CPL, incorporated in 1995, is involved in contract manufacturing
in the beta lactam segment. Its facility is in Baddi (Himachal
Pradesh). CRL, incorporated in 2010, is involved in contract
manufacturing in the beta lactam segment with facility in
Ludhiana (Punjab). CRL is setting up an oncology segment. Both
the entities are managed by Mr. Punit Jain and Mr. Sanjay Jain.
DC INDUSTRIAL: CARE Reaffirms 'D' Rating on INR188cr ST Loan
------------------------------------------------------------
CARE reaffirms the rating assigned to the bank facilities of
DC Industrial Plant Services Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 64.5 CARE D Reaffirmed
Short term Bank Facilities 188.0 CARE D Reaffirmed
Rating Rationale
The ratings of DC Industrial Plant Services Pvt. Ltd (DCIPS)
takes into account the ongoing delays in debt servicing on
account of stressed liquidity position of the company. The
ability of the company to improve its liquidity and regularize
its debt servicing will be the key rating sensitivity.
DCIPS incorporated in June 1983 is a premier turnkey ash handling
system contractor for coal based power plant projects in India.
The company was a wholly-owned subsidiary of Development
Consultants Pvt Ltd (DCPL), an established player in the area of
engineering & consulting services in various industries
especially in the power sector. The company is jointly owned by
DCPL and TCG
group. The contracts being executed by DCIPS include complete
design, engineering, supply and installation including civil
works of ash handling plants. The company also undertakes
contracts for operation and maintenance of such plants along with
supplying spare parts.
In FY15 (refers to the period April 1 and March 31), DCIPS
reported loss of INR 22.62 crore (loss of INR8.20 crore in FY14)
on a total operating income of INR 53.22 crore (Rs. 51.41 crore
in FY14).
DEEPAM SILK: CRISIL Assigns B+ Rating to INR70MM Cash Loan
----------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating on the long-
term bank facilities of Deepam Silk Retail Private Limited
(DSRPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 2.3 CRISIL B+/Stable
Cash Credit 70.0 CRISIL B+/Stable
Proposed Long Term
Bank Loan Facility 17.7 CRISIL B+/Stable
The rating reflects the DSRPL's weak financial risk profile
marked by an aggressive capital structure and a modest interest
coverage ratio. The rating also reflects the fragmented nature of
clothing retail industry which restricts its pricing flexibility.
These weaknesses are partially offset by long track record of the
promoters in the saree trading business.
Outlook: Stable
CRISIL believes that DSRPL will be able to maintain a stable
business risk profile on account of its promoter's experience in
the industry. The outlook may be revised to 'Positive' if the
company's financial risk profile improves significantly through
equity infusion or improvement in accretion to reserves.
Conversely, the outlook may be revised to 'Negative' if the
company generates less than expected accretion to reserves, or if
the company undertakes a larger than expected debt funded capex
over the medium term thus affecting its financial or liquidity
profiles.
Deepam Silk Retail Private Limited (DSRPL), based in Bangalore,
was started by Mr M. Chandrasekhar and Mr M. Vijaysekhar in 1978
as a proprietary concern. It was reconstituted as a private
limited company in 2008. The company is engaged in retailing of
sarees, readymade garments and silk fabrics. It has a presence of
45 years in Bangalore and operates two outlets.
DIPU ENTERPRISES: CRISIL Reaffirms B+ Rating on INR50MM Cash Loan
-----------------------------------------------------------------
CRISIL's rating on the long-term bank facilities of Dipu
Enterprises Private Limited (DEPL) continues to reflect the
company's below-average financial risk profile marked by its
small net worth, high gearing, and weak debt protection metrics.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 50 CRISIL B+/Stable (Reaffirmed)
Term Loan 5 CRISIL B+/Stable (Reaffirmed)
The ratings of the company are also constrained on account of its
large working capital requirement and exposure to intense
competition in the textile industry. These rating weaknesses are
partially offset by the extensive experience of the company's
promoters in the textile industry.
Outlook: Stable
CRISIL believes DEPL will continue to benefit over the medium
term from its promoters' extensive industry experience. The
outlook may be revised to 'Positive' in case of a significant and
sustained increase in profitability margins, or substantial
improvement in the company's capital structure on the back of
sizeable equity infusion by its promoters. Conversely, the
outlook may be revised to 'Negative' in case of a steep decline
in profitability margins, or substantial deterioration in the
capital structure caused most likely by large, debt-funded
capital expenditure or a stretch in its working capital cycle.
DEPL was established in 2005 with the merging of three family-run
firms - Dipu Enterprises (established in 1985), Dipu Fab (1994),
and Dipu Handloom (1997) - all in the same line of business. DEPL
manufactures women's dress material and kurtis, which it sells in
the organised retail market. It is based in Mumbai.
DIVINE RESORT: CARE Assigns B+ Rating to INR6.30cr LT Loan
----------------------------------------------------------
CARE assigns 'CARE B+' rating to the bank facilities of The
Divine Resort.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 6.30 CARE B+ Assigned
Rating Rationale
The rating assigned to the bank facilities of The Divine Resort
(TDR) is constrained primarily on account of high project
implementation risk owing to greenfield project implementation,
its presence in an inherently cyclical nature of the hotel
industry and intense competition and its partnership nature of
constitution.
The rating, however, derives comfort from the vast experience of
the promoters in the hospitality business and moderate reliance
debt.
The ability of TDR to complete the project implantation within
the envisaged time and cost parameters and the ability to
achieve projected level of scale of operations and profitability
would be the key rating sensitivity.
Formed as a partnership firm in September 2015, TDR was
incorporated by Mr Naranbhai Behtaria along with nine partners.
Mr Naranbhai Betaria, Mr Ramshibhai Kamaliya and Mr Nagajanbhai
Kambaliya are the key managing partners of the firm. The resort
has 61 rooms, an indoor restaurant, a garden restaurant, coffee
shop, indoor & outdoor game zone, swimming pool, 2 party plots
and 4 banqueting facilities spread across around 10,000 sq.
meters of land situated at Veraval (Gujarat).
The cost of said project was envisaged at INR10.72 crore against
which TDR has incurred the cost of INR8.63 crore (81% of the
total project cost) till November 27, 2015. The projects has been
funded through partners' capital of INR2.27 crore, unsecured
loans of INR2.10 crore and balance INR4.26 crore through
creditors. The firm is expected to commence the operations from
January 2016.
ESSAR STEEL: CARE Reaffirms D Rating on INR42,100cr Loan
--------------------------------------------------------
CARE reaffirms the rating on various bank facilities and
instruments of Essar Steel India Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term/Short term
Bank Facilities 42,100 CARE D Reaffirmed
Non-Convertible Debenture
Issue 312 CARE D Reaffirmed
Rating Rationale
The ratings reflect the ongoing delays in servicing of debt
obligations by the company.
Incorporated in 1976, Essar Steel India Ltd. (ESIL) is a part of
the Essar Group and a vertically integrated producer of flat
steel products with presence across the entire value chain of
steel manufacturing. ESIL has steel manufacturing capacity
of 10 Million Tonnes Per Annum (MTPA) at Hazira, Gujarat. The
Company also has 20 MTPA of pelletization capacity at Paradeep
(12 mtpa) and Vizag (8 MTPA with 6 MPTA under implementation).
The Paradeep and Vizag pelletization facilities are being linked
to iron ore mines in the hinterland through slurry pipelines of
253km and 267 km respectively from Dabuna to Paradeep (Odisha
pipeline) and Kirandul to Vizag (Andhra pipeline) which transport
the iron ore slurry from the beneficiation plant (located near
the iron ore mines in Dabuna and Kirandul) to the pellet plant
(located near the Paradip and Vizag ports). The slurry pipelines
enable low cost transportation of Iron Ore in slurry form from
the respective beneficiation facilities to the pelletization
plants. ESIL produces both DR grade and BF grade pellets at both
the pelletization locations. A large portion of the pellets
produced are shipped for steel making at Hazira, Gujarat and the
remaining pellets are sold in the domestic and export markets.
During FY15, the company posted a net profit of INR648 crore on a
total income of INR16,574 crore as compared to a net loss of
INR1,597 crore on a total income of INR16,449 crore.
HANWANT FASTENERS: CARE Reaffirms B+ Rating on INR5.41cr LT Loan
----------------------------------------------------------------
CARE reaffirms the rating assigned to the bank facilities of
Hanwant Fasteners Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 5.41 CARE B+ Reaffirmed
Rating Rationale
The rating assigned to the bank facilities of Hanwant Fasteners
Private Limited (HFPL) continues to remain constrained by its
small scale of operations, working capital intensive nature of
operations, leveraged capital structure and weak debt coverage
indicators. The rating is further constrained by the presence in
a highly competitive market.
The rating, however, continues to draw comfort from experienced
promoters and moderate profitability margins.
Going forward, the ability of the company to increase the scale
of operations while improving its profitability margins and
capital structure with efficient management of the working
capital requirements shall be the key rating sensitivities.
HFPL was incorporated in September 1994 and started its
commercial operations in March 1995. The company is currently
being managed by Mr Mahavir Singh and Mr Hari Singh. The company
is engaged in the manufacturing of fasteners, mainly bolts. The
company has its manufacturing facility located at Rohtak,
Haryana, with installed capacity of 280 metrics tonnes per annum
(MTPA) as on March 31, 2015. The company manufactures the
products as per specific design and requirements of the customers
and the same are sold to the manufacturers of auto-parts (mostly
vendors of automobile companies) in the domestic market. The
processes of the company are ISO 9001-2000 certified for quality
certifications. The company procures raw material consisting
majorly of bright bars, mild steel wires and high tensile wires
directly from the manufacturers in the domestic market mainly
from Punjab, Haryana and Delhi.
In FY15 (refers to the period April 1 to March 31), HFPL achieved
a total operating income (TOI) of INR15.64 crore with PBILDT and
PAT of INR1.37 crore and INR0.09 crore, respectively, as against
total operating income of INR12.33 crore with PBILDT and PAT of
INR1.25 crore and INR0.14 crore, respectively, in FY14.
Furthermore, in 11MFY16 (refers to the period April 1 to
February 29) (as per the unaudited results), the company achieved
total operating income of INR15.93 crore.
HARI OMRETAIL: CARE Assigns B+ Rating to INR10cr LT Loan
--------------------------------------------------------
CARE assigns 'CARE B+' rating to the bank facilities of Hari
Omretail Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 10 CARE B+ Assigned
Rating Rationale
The rating assigned to the long-term bank facilities of Hari Om
Retail Private Limited (HOR) is primarily constrained by low
profitability margins, leveraged capital structure and weak debt
service coverage indicators. The rating is further constrained by
highly competitive industry & low entry barriers.
The rating, however, draws comfort from experienced promoters,
growing scale of operations and comfortable working capital
cycle. Going forward, the ability of the company to profitably
scale up its operations and improve its capital structure shall
be the key rating sensitivities.
HOR was incorporated in 2011 by Mr Gaurav Juneja, Mr Sunil Juneja
and Ms Seema Juneja. The company is engaged in retail trading of
electronic products such as LED, AC, refrigerator, washing
machine, mobile phones, etc. HOR has 4 retail outlets/showrooms
located at Ashok Vihar, Lajpat Nagar, Kamla Nagar, Rohini and
Kingsway Camp, Delhi. The company procures goods from
distributors and also directly from companies.
HOR reported a PAT of INR0.30 crore on a total operating income
of INR113.85 crore in FY15 (refers to the period April 1 to
March 31) as against PAT of INR0.29 crore on a total operating
income of INR87.40 crore in FY14. Furthermore, the firm achieved
total sales of INR108 crore in FY16 till January 31, 2016 (as per
unaudited results).
HARMAN EXPORTS: CRISIL Suspends B+ Rating on INR152.5MM LT Loan
---------------------------------------------------------------
CRISIL has suspended its rating on the bank facilities of
Harman Exports Private Limited (HEPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 47.5 CRISIL B+/Stable
Proposed Long Term
Bank Loan Facility 152.5 CRISIL B+/Stable
The suspension of rating is on account of non-cooperation by HEPL
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, HEPL is yet to
provide adequate information to enable CRISIL to assess HEPL's
ability to service its debt. The suspension reflects CRISIL's
inability to maintain a valid rating in the absence of adequate
information. CRISIL considers information availability risk as a
key factor in its rating process as outlined in its criteria
'Information Availability - a key risk factor in credit ratings'
HEPL is promoted by Mr. Bhupinder Singh, Mr. Dilip Singh, and
Mrs. Manpreet Kaur. The group operates in the rice industry and
is involved in milling and sorting of basmati and non-basmati
rice. HEPL's operating capacity is 12 mtph and is based in
Bathinda (Punjab).
KS PIPE: Ind-Ra Assigns BB- Issuer Rating; Outlook Stable
---------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned K.S.Pipe
Fittings Private Limited (KSPF) a Long-Term Issuer Rating of 'IND
BB-'. The Outlook is Stable.
KEY RATING DRIVERS
The ratings reflect KSPF's small scale of operations, moderate-
to-weak credit metrics and working capital intensive nature of
business. Revenue increased at a CAGR of 13.84% over FY12-FY15
on a continuous inflow of orders from regular customers and was
INR228.66 mil. in FY15 (FY14: INR206.76 mil.). Net leverage in
FY15 was 4.41x in FY15 (FY14: 3.60x) and interest coverage was
1.99x (2.20x).
The ratings are supported by KSPF's strong EBITDA margins of
11.19% in FY15 (FY14: 11.29%), established customer base and more
than 10 years of promoter's experience in the pipe & fittings
industries.
The ratings also factor in KSPF's moderate liquidity position
with as evident from 86.50% of average of the maximum utilization
of its fund based limits during the12 months ended March 2016.
The company's net cash conversion cycle is long (FY15: 226 days;
FY14: 184 days) due to the nature of the business.
RATING SENSITIVITIES
Positive: An improvement in working capital cycle with operating
margins being sustained at the current levels could lead to a
positive rating action.
Negative: A decline in the operating profitability leading to
deterioration in the credit metrics could lead to a negative
rating action.
COMPANY PROFILE
Incorporated in 2007, KSPF manufactures a large variety of pipes
and fittings. The company is located in Faridabad, Haryana. It
is managed by its directors Bhagwan Dass Sharma and Kavita
Sharma.
KSPF's Ratings:
-- Long-Term Issuer Rating: assigned 'IND BB-'; Outlook Stable
-- INR70 mil. fund-based facilities: assigned
'IND BB-/Stable/IND A4+'
-- INR50 mil. non-fund-based facilities: assigned 'IND A4+'
LAXMI BUILDERS: CRISIL Assigns 'B' Rating to INR140MM Cash Loan
---------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable' rating to the long-term
bank facility of Laxmi Builders and Transport Co (LBTC).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 140 CRISIL B/Stable
The rating reflects LBTC's modest scale and geographically
concentrated operations in the intensely competitive construction
materials trading business, and its average financial risk
profile because of subdued debt protection metrics and large
working capital requirement. These weaknesses are partially
offset by its partners' extensive industry experience and
established relationships with suppliers and customers.
Outlook: Stable
CRISIL believes LBTC will continue to benefit from its partners'
extensive industry experience. The outlook may be revised to
'Positive' if the firm significantly improves scale of operations
and profitability leading to larger-than-expected net cash
accrual, or receives substantial capital infusion from partners,
resulting in a better financial risk profile. Conversely, the
outlook may be revised to 'Negative' in case of increase in
working capital requirement leading to deterioration in
liquidity, or large debt-funded capital expenditure, weakening
capital structure.
LBTC set up in 1997 as a partnership firm by Mr. Vinod Goswami
and Mr. Vipul Giri, trades in construction materials such as
steel, cement, tiles, iron, thermo-mechanically treated (TMT)
bars, blocks, electrical items, and sanitary ware. Its office is
in Noida and it does business in Uttar Pradesh, mainly Ghaziabad
and Noida.
LBTC had book profit of INR4.7 million on net sales of INR575.6
million in 2014-15 (refers to financial year, April 1 to March
31), against book profit of INR4.2 million on net sales of
INR530.4 million in 2013-14.
MAAMUNDESHWARI AGRO: CRISIL Assigns B- Rating to INR41MM LT Loan
----------------------------------------------------------------
CRISIL has assigned its 'CRISIL B-/Stable/CRISIL A4' ratings to
the bank facilities of Maamundeshwari Agro Oils Private Limited
(MAOPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Short Term
Bank Loan Facility 4 CRISIL A4
Cash Credit 25 CRISIL B-/Stable
Long Term Loan 41 CRISIL B-/Stable
The ratings reflect MAOPL's weak financial risk profile marked by
stretched liquidity position, high gearing, and average debts
protection metrics. The rating also factors in the company's
initial and modest scale of operations in fragmented edible oil
industry. These rating weaknesses are partially offset by the
extensive experience of MAOPL's promoters in the agro-commodity
industry.
Outlook: Stable
CRISIL believes MAOPL will continue to benefit over the medium
term from the promoters' extensive industry experience. The
outlook may be revised to 'Positive' if revenue and cash accrual
grow substantially, and financial risk profile improves
especially gearing and net worth. Conversely, the outlook may be
revised to 'Negative' if the financial risk profile, particularly
liquidity, weakens, most likely because of low cash accrual, or
large debt-funded capital expenditure.
Maamundeshwari Agro Oils Private Limited (MAOPL) is incorporated
in April 2013 and it is promoted by Madam Kumar Gupta, Bechan
Prasad Gupta and Hira Lal Gupta. It processes oil from rice. The
company has started its commercial operation in May 2014.
MOBILESTORE SERVICES: CARE Raises Rating on INR70.66cr Loan to B+
-----------------------------------------------------------------
CARE revises the ratings assigned to the bank facilities of
The Mobilestore Services Ltd.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 70.66 CARE B+ Revised from
CARE B+ to CARE D and
then revised to
CARE B+
Short term Bank Facilities 90.00 CARE A4 Revised from
CARE A4 to CARE D and
then revised to
CARE A4
Rating Rationale
The revision in ratings assigned to the bank facilities of The
MobileStore Services Ltd to CARE D factors in delay in debt
servicing during the period October 2014 to March 2015. The
rating has been revised to 'CARE B+' as the debt servicing has
been regular sinceMay 2015.
The ratings of TMSSL reflect the stretched liquidity position of
the company primarily due to working capital intensive nature of
operations and significant dependence of its revenue from one of
the large Indian retail arm - The MobileStore Limited, which is
incurring losses. The rating is also constraint by the thin
profit margin due to the trading nature of operations and
increasing competition in mobile handset retailing segment from
e-commerce players in India.
The rating derives strength from the established promoter group,
association with the leading mobile handset brands and low
inventory risk.
Ability of the company to manage its working capital cycle in an
efficient manner, derive envisaged benefits from its strategic
technology initiatives and improve its profitability remains key
rating sensitivity.
TheMobileStore Services Limited (TMSSL), a part of the Essar
Group, is engaged in the business of distribution of telecom,
consumer electronics and related products including mobile
handsets, accessories, domestic appliances and other consumer
durable products. The company is a step-down subsidiary of Essar
Global Limited (the ultimate holding company). The Essar Group is
engaged in diversified activities like infrastructure, steel, oil
and gas, power, telecom and technology, shipping and logistics
and construction.
TMSSL is the owner of the brand "The MobileStore" and has
licensed it to TMSL for usage of the brand. As on February 29,
2016, TMSL operated through over 450 retail stores in India using
the brand name "The MobileStore" and has presence through other
channels such as E-Commerce, Franchisees and Institutional Sales.
Recently the company has taken two strategic technology
initiatives in the area of on demand delivery & digital sales -
FED (Fastest Expert Delivery) and MOJO (Match Online Joy
Offline). This would cater the demand from both online and
offline segment of customers and help in boosting the sales.
TMSSL has posted a total income of INR1,083.88 crore and PAT of
INR1.15 crore during FY15 (refers to the period April 1 to
March 31) as compared with a total income of INR1,728.39 crore
and PAT of INR0.26 crore during FY14.
MOR POULTRIES: CRISIL Suspends B- Rating on INR149MM Cash Loan
--------------------------------------------------------------
CRISIL has suspended its rating on the bank facilities of Mor
Poultries (Mor).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 149 CRISIL B-/Stable
Long Term Loan 46 CRISIL B-/Stable
The suspension of rating is on account of non-cooperation by Mor
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, Mor is yet to
provide adequate information to enable CRISIL to assess Mor's
ability to service its debt. The suspension reflects CRISIL's
inability to maintain a valid rating in the absence of adequate
information. CRISIL considers information availability risk as a
key factor in its rating process as outlined in its criteria
'Information Availability - a key risk factor in credit ratings'
Mor was established as a partnership firm in Jind (Haryana) in
2006. The firm owns a poultry farm with capacity to accommodate
about 75,000 chickens. The partners in the firm, Mr. Anil Kumar
Mor, Mr. Shamsher Singh Mor, and Mr. Raj Kumar Mor, have been in
the poultry business for over a decade. The firm's business
includes purchasing egg-laying birds, selling eggs and chicks,
and selling the birds when they become incapable of producing
eggs (culling).
NANDI GRAIN: CARE Reaffirms 'D' Rating on INR69.30cr LT Loan
------------------------------------------------------------
CARE reaffirms the ratings assigned to the bank facilities of
Nandi Grain Derivatives Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 69.30 CARE D Re-affirmed
Short term Bank Facilities 0.50 CARE D Re-affirmed
Rating Rationale
The ratings assigned to the bank facilities of Nandi Grain
Derivatives Private Limited (NGDPL) continue to remain
constrained by the stretched liquidity position resulting in
delays in debt servicing.
Established in June 2010, NGDPL is part of the Nandi Group of
Industries based out of Nandyal in Andhra Pradesh. NGDPL
is engaged in manufacturing of liquid starch using maize (wet
milling process) as raw material with an installed milling
capacity of 400 tons per day. Gluten, germs, corn steep soluble
and fiber are the other by-products produced in the wet milling
process which constitutes about 35% of the throughput.
Nandi group established in 1978 has a diversified presence of
businesses such as cement, dairy, PVC pipes, construction,
TMT bars, etc.
NEWRISE HEALTHCARE: CARE Reaffirms D Rating on INR75cr LT Loan
--------------------------------------------------------------
CARE reaffirms rating assigned to bank facilities of Newrise
Healthcare Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 75 CARE D Reaffirmed
Rating Rationale
The rating assigned to the bank facilities of NewRise Healthcare
Private Limited (NRHPL) continues to take into account ongoing
delays in servicing of the company's debt obligations.
NewRise Healthcare Private Ltd (NRHPL) is promoted by Panacea
Biotec Limited (PBL; 87.60% stake) and the Umkal group (12.40%
stake). NRHPL was previously known as Umkal Medical Institute
Private Limited (UMIPL). The name was changed to the present one
inMarch 2011. NRHPL has set up a multi-specialty hospital with
224 beds in DLF (Phase-3), Gurgaon on a 2.5 acres area. PBL had
entered as a promoter by taking 75.20% stake in NRHPL in May 2008
by way of infusion of equity. Consequent to this, the Umkal group
(Umkal) would act only as an investor without offering any
further financial or management support. The hospital achieved
partial COD in December 2012 as per the revised scheduled
commencement date.
The total project cost stood at INR180 crore funded through debt
of INR101 crore and equity of INR79.00 crore from an earlier
estimate of INR142.60 crore funded through debt of INR101 crore
and equity of INR41.60 crore.
PANACEA BIOTEC: CARE Ups Rating on INR1,202.88cr Loan to B-
-----------------------------------------------------------
CARE revises ratings assigned to bank facilities of Panacea
Biotec Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 1202.88 CARE B- Revised from
CARE D
Short term Bank Facilities 61.97 CARE A4 Revised from
CARE D
Rating Rationale
The revision in the ratings assigned to the bank facilities of
Panacea Biotec Limited (PBL) takes into consideration improved
liquidity profile of the company on account of relisting of its
vaccines by WHO. Furthermore, the ratings continue to factor in
the experienced promoters and management team of the company, its
long track record of operations and various strategic alliances
formed by the company to boost its revenues from the overseas
market.
These rating strengths are, however, partially offset by PBL's
weak financial risk profile as well as its recent history of debt
restructuring.
Going forward the ability of the company to increase its scale of
operations while improving its profitability margins as well as
its ability to effectively manage its liquidity position would
remain the key rating sensitivities.
Panacea Biotec Limited (PBL) was incorporated in February, 1984
under the name of Panacea Drugs Private Limited (PDPL). In
September 1993, it was converted into a public limited company
and its name was changed to the present one.
PBL is promoted by the Jain family, which is present in the
pharmaceutical business for the last three generations. PBL has
manufacturing facilities for vaccines and pharmaceutical
formulations complying with international regulatory standards
of US-FDA, BfArMGermany and ANVISA Brazil etc.
During the period FY15 (refers to the period April 1 to March
31), PBL reported total operating income of INR688.65 crore and
loss of INR65.23 crore as compared to total operating income of
INR512.58 crore and loss of INR0.42 crore during FY14.
Furthermore, during the period 9MFY16 (refers to the period April
01 to December 31), PBL reported total operating income of
INR443.75 crore and loss of INR71.28 crore.
PARI AGRO: CRISIL Suspends B+ Rating on INR70MM Cash Loan
---------------------------------------------------------
CRISIL has suspended its rating on the bank facilities of Pari
Agro Exports (PAE).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 70 CRISIL B+/Stable
Proposed Long Term
Bank Loan Facility 10 CRISIL B+/Stable
The suspension of rating is on account of non-cooperation by PAE
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, PAE is yet to
provide adequate information to enable CRISIL to assess PAE's
ability to service its debt. The suspension reflects CRISIL's
inability to maintain a valid rating in the absence of adequate
information. CRISIL considers information availability risk as a
key factor in its rating process as outlined in its criteria
'Information Availability - a key risk factor in credit ratings'
PAE, based in Sangrana Sahib in Amritsar (Punjab), is a
partnership firm incorporated in 2008 by Mr. Varun Sachdeva and
Mr. Vaneet Sachdeva. It is engaged in milling, processing, and
selling of basmati rice in both the export and domestic markets.
PAE has a rice milling capacity of three to four tonnes per hour.
Its plant is located in Tarn Taran in Amritsar.
PARIKH BROTHERS: Ind-Ra Affirms BB- Issuer Rating; Outlook Stable
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed Parikh Brothers'
Long-Term Issuer Rating at 'IND BB-'. The Outlook is Stable.
KEY RATING DRIVERS
Parikh Brothers' ratings reflect its low revenue base of
INR286.22 mil. in FY15 (FY14: INR208.85 mil.) along with the
proprietorship nature of its business.
The ratings are constrained by the company's moderate credit
profile with interest coverage (operating EBITDA/gross interest
expenses) of 2.4x during FY15 (FY14: 11.8x) and net financial
leverage (total adjusted net debt/operating EBITDAR) of 2.6x
(5.2x). Operating EBITDA margins have improved but are low
(FY15: 3.4%; FY14: 2.7%).
The ratings, however, benefit from the proprietor's over 25 years
of experience in processing and manufacturing of diamond stones
of various qualities.
RATING SENSITIVITIES
Positive: A substantial improvement in the overall scale of
operations along with an improvement in overall credit metrics or
a change in the organizational constitution will be positive for
the ratings.
Negative: An increase in the overall debt, impacting the net
financial leverage of the entity will lead to a negative rating
action.
COMPANY PROFILE
Parikh Brothers was incorporated in 1988. Its registered office
is situated at Opera House, Mumbai and manufacturing unit is in
Palanpur, Gujarat. The firm imports, exports and
processes/manufactures diamond stones of various qualities. The
firm is promoted by Mukesh Parikh.
The firm is a third generation organisation, descended from
Saralal Laxmichand & Co established in 1939. The organization
became the first Indian Diamond Trading Company Sight Holder in
1964.
Parikh Brothers' ratings:
-- Long-Term Issuer rating: affirmed at 'IND BB-'/Stable
-- INR110 mil. fund-based working capital limits: affirmed at
'IND A4+'
-- INR5 mil. non-fund-based working capital limits: affirmed
at 'IND A4+'
PERCEPT SOLAR: CRISIL Assigns 'B' Rating to INR70MM LT Loan
-----------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable' rating to the long-term
bank facility of Percept Solar Enterprises (PSE).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Long Term Loan 70 CRISIL B/Stable
The rating reflects the firm's limited track record and exposure
to demand and sales risk related to ongoing project. These
weaknesses are partially offset by locational advantage,
management's extensive experience in related line of business,
and funding support from group companies.
Outlook: Stable
CRISIL believes PSE will continue to benefit over the medium term
from promoter's extensive experience. The outlook may be revised
to 'Positive' if higher-than-expected cash flow backed by healthy
bookings results in better liquidity. Conversely, the outlook may
be revised to 'Negative' if significantly low sales and customer
advances weaken financial risk profile, particularly liquidity.
Established in 2014 as partnership firm, PSE is a part of the
Visa group. The day to day operations of the firm are managed by
Mr. Satinder Agarwal. PSE is developing a 50 megawatt solar park
in Satara. Group entities Visa Powertech Pvt Ltd (rated 'CRISIL
BB-/Stable/CRISIL A4+') and Visa Ventures Pvt Ltd (VVPL) hold 25
percent and 75 percent stake, respectively, in PSE. VVPL acts as
a holding company.
PRASHANTH POULTRY: CRISIL Cuts Rating on INR107.7MM LT Loan to D
----------------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facilities
of Prashanth Poultry Private Limited (PPPL) to 'CRISIL D' from
'CRISIL B/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 44.5 CRISIL D (Downgraded from
'CRISIL B/Stable')
Long Term Loan 107.7 CRISIL D (Downgraded from
'CRISIL B/Stable')
Proposed Cash 30.0 CRISIL D (Downgraded from
Credit Limit 'CRISIL B/Stable')
Proposed Long Term 7.8 CRISIL D (Downgraded from
Bank Loan Facility 'CRISIL B/Stable')
The downgrade reflects instances of delay by the company in
servicing its debt; the delays were caused by weak liquidity on
account of inadequate cash accrual.
PPPL has a weak financial risk profile because of a small
networth, high gearing, and weak debt protection metrics. It also
has working capital-intensive operations, and is exposed to
inherent risks in the poultry industry. However, the company
benefits from the extensive industry experience of its promoters.
PPPL, set up in 2005, and promoted by Mr. V Bhaskar Rao and his
family is in the poultry business; it produces eggs at its unit
in Mahbubnagar, Andhra Pradesh.
R M AUTO: CARE Assigns B+ Rating to INR7.50cr LT Loan
-----------------------------------------------------
CARE assigns 'CARE B+' rating to the bank facilities of R M Auto
Link Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 7.50 CARE B+ Assigned
Rating Rationale
The rating assigned to the bank facilities of R M Auto Link
Private Limited (RMPL) is constrained on account of its small
scale of operations in working capital intensive and competitive
automobile dealership business, thin profitability, highly
leveraged capital structure and weak debt coverage indicators.
The rating, however, derives strength from the vast experience of
the promoters in managing automobile dealership business along
with long-standing association with its key principal - Honda
Motorcycle and Scooter India Private Limited (HMSI) and
relatively stable demand outlook for two-wheeler (2W) automobile
industry in India. The ability of RMPL to increase its scale of
operations along with improvement in profitability and capital
structure and
effective management of its working capital are the key rating
sensitivities.
Incorporated in April 2005, RMPL was promoted by Rajpal and
Moolchandani family. RMPL is engaged in 2W automobile
dealership business as an authorized dealer of HMSI. RMPL has one
showroom with 3S facility (Sales, Services and Spare Parts), one
service centre with 2S facility (Services and Spare parts) and
one sales outlay located in Bhopal.
As per the Audited result for FY15 (refers to period April 1 to
March 31), RMPL reported a PAT of INR0.08 crore on a total
operating income of INR37.06 crore as against a PAT of INR0.05
crore on a total operating income of INR30.76 crore in FY14
(A). Further, as per the unaudited results for 9MFY16, RMPL
earned a total operating income of INR30.97 crore.
R. P. TEK: CRISIL Suspends 'B' Rating on INR60.5MM LT Loan
----------------------------------------------------------
CRISIL has suspended its rating on the bank facilities of
R. P. Tek India Private Limited (RTPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 4.5 CRISIL B/Stable
Proposed Long Term
Bank Loan Facility 60.5 CRISIL B/Stable
The suspension of rating is on account of non-cooperation by RTPL
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, RTPL is yet to
provide adequate information to enable CRISIL to assess RTPL's
ability to service its debt. The suspension reflects CRISIL's
inability to maintain a valid rating in the absence of adequate
information. CRISIL considers information availability risk as a
key factor in its rating process as outlined in its criteria
'Information Availability - a key risk factor in credit ratings'
RTPL was set up in 2009 by reconstituting proprietorship firm RP
Tek India, which was established in 2007. The company is engaged
in the construction of computer labs in schools and colleges and
installation of fire safety and security systems in various
institutions. RPL is managed by Mr. Rupesh Kumar Srivastava and
his wife Mrs. Preeti Srivastava and is based out of Ghaziabad
(Uttar Pradesh).
RAJ RAYON: Ind-Ra Lowers LT Issuer Rating to D; Outlook Stable
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) has downgraded Raj Rayon
Industries Limited's (RRIL) Long-Term Issuer Rating to 'IND D'
from 'IND B+'. The Outlook was Stable.
KEY RATING DRIVERS
The downgrade follows RRIL's announcement of a strategic debt
restructuring (SDR) programme as the lenders invoked their right
of SDR due to company's inability to service its debts.
The company has been recording losses over the past five quarters
as its input costs increased on account of a shortage in raw
material; this led to a weak liquidity position. Therefore, the
company could not service its debt and the lenders invoked their
rights under the SDR scheme.
RATING SENSITIVITIES
Positive: Recovery from the SDR scheme and sustainable
profitability, along with timely debt servicing, would lead to a
positive rating action.
COMPANY PROFILE
RRIL is a public limited company and manufactures polyester yarn
at its plant located in Silvassa. Its products include polyester
texturized yarn, partially oriented yarn, fully drawn yarn,
twisted yarn and polyester chips. The company is promoted by
Mr. Sushil Kanodia.
RRIL's ratings:
-- Long-Term Issuer Rating: downgraded to 'IND D' from
'IND B+'/Stable
-- INR2,538.5 mil. term loans: downgraded to Long-term 'IND D'
from 'IND B+'
-- INR2,571.8 mil. working capital term loans: downgraded to
Long-term 'IND D' from 'IND B+'
-- INR1,023.8 mil. fund-based limits: downgraded to Long-term
'IND D' from 'IND B+' and Short Term 'IND D' from 'IND A4'
-- INR42.5 mil. non-fund-based limits: downgraded to Short-
term 'IND D' from 'IND A4'
-- INR1,063.4 mil. funded interest term loans: downgraded to
Long-term 'IND D' from 'IND B+'
RELIANCE COMMUNICATION: Moody's Affirms Ba3 CFR; Outlook Now Neg.
-----------------------------------------------------------------
Moody's Investors Service has affirmed Reliance Communications
Limited's (RCOM) Ba3 corporate family rating and senior secured
rating.
Moody's has also changed the ratings outlook to negative from
stable.
List of affected ratings:
Rating Affirmations:
-- Issuer: Reliance Communications Limited
-- Corporate family rating, affirmed at Ba3
Senior secured rating, affirmed at Ba3
Outlook Actions:
-- Issuer: Reliance Communications Limited
-- Outlook changed to negative from stable
RATINGS RATIONALE
"The change in outlook to negative from stable reflects
persistent delays in the company's sale of non-core assets, which
underpins its deleveraging strategy. As such, there is unlikely
to be a material improvement in leverage, as well as associated
liquidity and refinancing pressures over the next 6-9 months,
even if the company announces a binding tower sale transaction
this quarter," says Nidhi Dhruv, a Moody's Vice President and
Senior Analyst
"Furthermore, the negative outlook encapsulates expected changes
in the key terms of the transaction -- including valuation which
in our view could be up to 20-25% lower than our earlier
estimates of $3.4 billion."
"Assuming a lower transaction value, adjusted leverage will
decrease to about 4.0x-4.5x in the fiscal year ended 31 March
2018 (compared with 3.5x-4.0x in our earlier expectations) from
6.2x as of end-2015."
Upon the completion of the share swap transaction with Sistema
Shyam Teleservices (SSTL unrated), RCOM will have adequate
spectrum. However, should the company participate in the upcoming
spectrum auctions, its leverage metrics will be further
pressured.
"RCOM also continues to have a strained liquidity profile, with
the company remaining reliant on recurring covenant waivers due
to its high leverage. There is also an ongoing need to refinance
upcoming debt maturities, including $450 million in debt falling
due in the quarter ending 30 June 2016. This includes a $350
million ECB facility at Reliance Infratel (unrated), which is
guaranteed by RCOM and has a cross-default with other debt," adds
Dhruv, also Moody's Lead Analyst for RCOM.
"Had the tower transaction closed within the original planned
timelines, the proceeds from the sale could have been used for
debt repayments, and our expectation was that the resultant
reduced leverage would alleviate pressure on covenants."
"Moody's notes that RCOM has initiated discussions with banks for
refinancing its upcoming maturities although the facilities are
yet to be agreed on. Any delay in obtaining final approvals from
the banks will lead to imminent ratings downgrade, which would be
more than one notch. However, in our view, the probability of
this occurring is very low."
In addition, RCOM is pursuing a restructuring of its wireless
activities. In December 2015, the company announced that it had
entered into exclusive discussions with Aircel Limited (unrated)
for a potential combination of businesses. This deal has yet to
close and on 23 March 2016, the company announced that it had
extended the exclusivity period by 60 days to May 2016.
"Cumulatively, these transactions, when consummated, could
benefit RCOM substantially. However, in our view, changes in the
company's strategy have led to significant delays in execution of
its plans. Hence any tangible benefit to RCOM's financial and
credit profile will now be delayed for at least 6-9 months, which
is beyond Moody's tolerance levels for its Ba3 rating," says
Dhruv.
When Moody's assigned RCOM's ratings in March 2015, the forecast
incorporated the company's articulated deleveraging plans, which
were largely premised on the sale of its non-core assets,
primarily its sub-sea cable subsidiary GCX Limited (B2 stable),
its direct-to-home (DTH) cable business and property assets in
Mumbai and Delhi.
However, Moody's believes RCOM is currently not pursuing the sale
of GCX and the DTH "business" as the deleveraging strategy is now
hinged on tower disposals and the merger of the wireless
business.
RCOM has received cash proceeds of about INR3.3 billion ($50
million) through property sales, which represents less than 20%
of Moody's initial expectations.
There have been some positive developments over the last 3
months, relating to finalization of the spectrum trading and
sharing agreement with Reliance Jio Infocomm (R Jio, unrated) and
imminent completion of the share swap with SSTL.
Benefits of the spectrum agreement will start accruing to RCOM
with transition of its CDMA subscribers to LTE, however
meaningful financial and operational benefits will only accrue
upon the, yet to be commercially launched 4G services by R Jio.
"The negative outlook reflects our view that ongoing delays in
RCOM's rollout of its deleveraging plans will keep its financial
and credit profile strained over the near term. Moody's will
closely review the progress on RCOM's stated plans over the next
6-9 months."
The ratings could be downgraded if RCOM (1) experiences a
significant deterioration in market share and/or competition
intensifies, such that profitability deteriorates; (2) fails to
execute its deleveraging plans in a timely manner; (3) encounters
difficulty in complying with its financial covenant requirements,
accessing capital to fund growth or repaying/refinancing debt, as
and when it falls due; or (4) implements aggressive investment
and/or shareholder return policies.
Specific indicators that Moody's would consider for a downgrade
include: (1) adjusted debt/EBITDA failing to trend in line with
expectations towards 4.0x by end-2016; (2) adjusted EBITDA
margins falling below 30%; and (3) adjusted funds from operations
+ interest)/interest remaining below 3.0x.
Furthermore, any unexpected regulatory developments in the Indian
telecommunications sector will also be negative for the rating.
Given the negative outlook, an upgrade is unlikely over the near
term. However, the outlook could stabilize should RCOM (1)
continue to grow its revenues and earnings of its core-Indian
operations by increasing the number of subscribers and data
revenue without compromising its EBITDA margins; (2) continues to
generate positive free cash flow on a sustained basis; and (3)
improve its liquidity profile significantly.
Specific indicators that Moody's would consider for stabilizing
the outlook include: adjusted debt/EBITDA at 4.0x-4.5x; adjusted
EBITDA margins between 30%-35%; and adjusted funds from
operations + interest/interest over 3.0x on a sustainable basis.
RCOM is an integrated telecommunications operator in India (Baa3
positive) with a presence across wireless, enterprise, broadband,
tower infrastructure and DTH businesses. Through its wholly-owned
subsidiary, GCX Limited (B2 stable), the company also provides
data connectivity solutions to major telecommunications carriers
and large multinational enterprises in the US, Europe, Middle
East and Asia Pacific which need multi-national IP-based
solutions and connectivity.
RCOM is the fourth-largest mobile operator in India by number of
subscribers, which totaled 109.1 million or approximately 10.7%
of the total market share by subscribers (pro forma for Sistema
acquisition) as of 31 January 2016 according to the Telecom
Regulatory Authority of India (TRAI).
RMG ALLOY: CARE Reaffirms 'D' Rating on INR257.40cr Loan
--------------------------------------------------------
CARE reaffirms ratings assigned to bank facilities of RMG Alloy
Steel Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 257.40 CARE D Reaffirmed
Short term Bank Facilities 155.98 CARE D Reaffirmed
Rating Rationale
The ratings continue to factor in the ongoing delays in servicing
of debt obligations by the company on account of its weak
liquidity position as a result of continuing net losses.
Promoted by Mr. V.C. Saraf and Mr. R.C. Saraf, RMG Alloy Steel
Ltd (RMGL) is engaged in manufacturing of alloy steel and steel
seamless pipes/tubes at its facilities located in Jhagadia,
Gujarat. RMGL's produced steel is mainly used for
automanufacturing/auto components, earth-moving equipment and
bearing applications, while seamless pipes and tubes find
application mainly in boilers, which are required in the power
sector. Due to inefficiencies in the plant on account of lack
of critical equipment, the operations of the company were
unprofitable. Subsequently, the company became a sick unit in
August 1999 and has been under the purview of the Board for
Industrial and Financial Reconstruction (BIFR) since then. In
2009, the Welspun group, having experience in steel industry and
clientele in oil & gas and petroleum industry, was inducted as a
strategic partner of RMGL for revival of the company.
During FY15 (refers to the period April 1, 2014 to March 31,
2015), RMGL posted a total income of INR335.52 crore with a
net loss of INR36.64crore. Further, the company posted a total
income of INR208.59crore and a net loss of INR49.36crore in
9MFY15 (refers to the period April 1, 2015 to December 31, 2015).
S. V. FOODS: CARE Assigns 'B' Rating to INR6.50cr LT Loan
---------------------------------------------------------
CARE assigns 'CARE B' rating to the bank facilities of S. V.
Foods.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 6.50 CARE B Assigned
Rating Rationale
The rating assigned to the bank facilities of S. V. Foods (SVF)
is primarily constrained on account of its modest scale of
operations, thin profitability, weak solvency position along with
working capital intensive nature of operations. The rating
is, further, constrained on account of its constitution as a
partnership concern and vulnerability of margins to fluctuation
in the prices of agricultural commodities due to seasonality of
products.
The rating, however, favourably takes into account experience of
the partners and established marketing network. The ability of
the company to increase its scale of operations with improvement
in profitability and solvency position are the key rating
sensitivities.
Jaipur-based (Rajasthan) SVF was formed in 2012 as a partnership
concern by Mr Sunil Kumar Tiwari and Mr Vikas Choudhary. It is
engaged in the business of packaging and marketing of food
products like rice flakes poha, papad, daliya, moong dal, bhujia,
cattle feed, etc. The firm gets the product from other
manufacturers on job work basis as well directly and sells the
products after packaging in its brand name. Its own products are
sold under the brand name of "Nandraj". It markets its products
in Rajasthan, Punjab, Delhi, West Bengal and Haryana.
During FY15 (refers to the period April 1 toMarch 31), SVF has
registered TOI of INR19.72 crore with net profit of INR36,000 as
against INR15.21 crore with PAT of INR0.02 crore in FY14. Till
January 31, 2016, the firm has achieved TOI of INR16.60 crore.
SAGAR EDUCATIONAL: CRISIL Suspends 'D' Rating on INR45MM Loan
-------------------------------------------------------------
CRISIL has suspended its rating on the bank facilities of
Sagar Educational Society (SES).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Overdraft Facility 45 CRISIL D
Term Loan 25 CRISIL D
The suspension of rating is on account of non-cooperation by SES
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, SES is yet to
provide adequate information to enable CRISIL to assess SES's
ability to service its debt. The suspension reflects CRISIL's
inability to maintain a valid rating in the absence of adequate
information. CRISIL considers information availability risk as a
key factor in its rating process as outlined in its criteria
'Information Availability - a key risk factor in credit ratings'
SES was formed in 2000 by Mr. Sunil Jhunhunwala, Mr. Anil
Jhunjhunwala, and Mrs. Madhu Agarwal. The society provides
education through four institutes: Sagar Institute of Technology
& Management; Sagar Institute of Technology & Management,
Department of Pharmacy; Shri P L Memorial PG College; and Sagar
Nurture International School. All the institutes are situated in
a single campus in Barabanki (Uttar Pradesh). The society also
offers hostel accommodation to around 250 students. Currently,
its day-to-day operations are managed by its chairperson, Mrs.
Madhu Agarwal.
SANT DEEPAK: CRISIL Suspends 'D' Rating on INR180MM Term Loan
-------------------------------------------------------------
CRISIL has suspended its rating on the bank facility of
Sant Deepak Educational and Charitable Trust (SDECT).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 180 CRISIL D
The suspension of rating is on account of non-cooperation by
SDECT with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, SDECT is yet to
provide adequate information to enable CRISIL to assess SDECT's
ability to service its debt. The suspension reflects CRISIL's
inability to maintain a valid rating in the absence of adequate
information. CRISIL considers information availability risk as a
key factor in its rating process as outlined in its criteria
'Information Availability - a key risk factor in credit ratings'
SDECT was set up in 2007 by Mr. Mewa Ram, Dr. Ish Chadda, Mr.
Rakesh Kumar, Mr. Sanjay Jindal, Mr. Narendra Chauhan, and Mr.
Rajan Kumar. The trust provides Bachelor of Technology (B Tech),
Master of Technology (M Tech), and polytechnic courses through
its institution, Global Research Institute of Management and
Technology, in Yamuna Nagar (Haryana).
SHIV SHAKTI: CRISIL Suspends B+ Rating on INR133MM Bill Loan
------------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of
Shiv Shakti Exports (SSE).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bill Discounting 133 CRISIL B+/Stable
Packing Credit 95 CRISIL A4
Rupee Term Loan 25 CRISIL B+/Stable
The suspension of ratings is on account of non-cooperation by SSE
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, SSE is yet to
provide adequate information to enable CRISIL to assess SSE's
ability to service its debt. The suspension reflects CRISIL's
inability to maintain a valid rating in the absence of adequate
information. CRISIL considers information availability risk as a
key factor in its rating process as outlined in its criteria
'Information Availability - a key risk factor in credit ratings'
SSE is a partnership firm promoted by Mr. Sunil Mittal and his
family members in 2000. The firm manufactures rugs, bath mats,
and carpets. Its manufacturing unit is in Panipat (Haryana).
SHIW PRASAD: Ind-Ra Assigns 'IND BB' LT Issuer Rating
-----------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Shiw Prasad
Jyoti Prasad (SPJP) a Long-Term Issuer Rating of 'IND BB'. The
Outlook is Stable. The agency has also assigned SPJP's
INR800.00m fund-based working capital limit an 'IND BB' rating
with a Stable Outlook.
KEY RATING DRIVERS
The ratings reflect SPJP's moderate scale of operations as
reflected in its revenue of INR570 mil. during FY15. The ratings
also reflect the company's moderate liquidity position as
reflected in its average of maximum fund-based utilization of
91.85% for the 12 months ended January 2016. The ratings factor
the partnership structure of SPJP's business.
The ratings however are supported by SPJP's strong credit metrics
due to low debt levels, as reflected in its EBITDAR interest
coverage of 3x and net financial leverage of 2.3x during FY15.
The ratings are also supported by the company's promoter's two
decades of experience in the liquor business.
RATING SENSITIVITIES
Positive: A substantial increase in the scale of operations along
with maintenance of its credit profile would lead to a positive
rating action.
Negative: Sustained deterioration in the EBITDA interest coverage
would lead to a negative rating action.
COMPANY PROFILE
SPJP was set up in 2001 in Odisha for the retailing of liquor for
various brands. The firm has around 40 retail shops spread
across entire 14 districts of Odisha. The promoter, Mr Rajesh
Kumar Sahu, oversees the firm's daily operations. The firm
purchases liquor from Orissa State Breweries Corporation.
SHREE DURGA: CRISIL Suspends 'D' Rating on INR60MM LT Loan
----------------------------------------------------------
CRISIL has suspended its rating on the bank facilities of
Shree Durga Rice and General Mills (SDRGM).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 35 CRISIL D
Proposed Long Term
Bank Loan Facility 60 CRISIL D
Term Loan 5 CRISIL D
The suspension of rating is on account of non-cooperation by
SDRGM with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, SDRGM is yet to
provide adequate information to enable CRISIL to assess SDRGM's
ability to service its debt. The suspension reflects CRISIL's
inability to maintain a valid rating in the absence of adequate
information. CRISIL considers information availability risk as a
key factor in its rating process as outlined in its criteria
'Information Availability - a key risk factor in credit ratings'
SDRGM is a partnership firm established in 1949. The firm mills
paddy into parboiled rice, raw rice, and basmati rice. It is
headquartered in Sahnewal (Punjab) and is owned and managed by
Mr. Ganpat Rai and his two sons.
SHRI MAHAVIR: CARE Lowers Rating on INR537.74cr Loan to D
---------------------------------------------------------
CARE revises the ratings assigned to the bank facilities of
Shri Mahavir Ferro Alloys Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 537.74 CARE D Revised from
CARE B+
Short-term Bank Facilities 15.50 CARE D Revised from
CARE A4
Rating Rationale
The aforesaid revision in the ratings of Shri Mahavir Ferro
Alloys Private Ltd (SMFA) takes into account the on-going delays
in debt servicing due to cash losses incurred by the company in
FY15 (refers to the period April 1 to March 31) and high debt
obligation as the repayment of restructured term loan has
commenced from March 31, 2015. The ability of the company to
improve the liquidity position and timely service its debt
obligation, timely completion of the on-going project within the
estimated cost structure and derive the benefits from the project
as envisaged will be the key rating sensitivity.
SMFA, incorporated in September 2001, is promoted by a Jain
family of Rourkela, Odisha. SMFA is engaged in the manufacturing
of sponge iron and MS ingots. The manufacturing facilities of the
company are located at Rourkela, Odisha, having installed
capacity of 90,000 MTPA for sponge iron and 57,600 MTPA for MS
ingot. SMFA is also setting up a 0.6MTPA pellet plant, 18MW
captive power plant and railway siding at a cost of INR440.27
crore (being financed at a debt equity ratio of 2.76:1). As on
December 15, 2015, SMFA has incurred INR377.89 crore on the
project.
During FY15, SMFAPL reported a net loss of INR13.23 crore (as
against net loss of INR16.10 crore in FY14) on a total operating
income of INR174.96 crore (as against INR143.08 crore in FY14).
SHRI MASANIYAMMAN: CRISIL Ups Rating on INR92.2MM Loan to B+
------------------------------------------------------------
CRISIL has upgraded its rating on the long-term bank facilities
of Shri Masaniyamman Thunai Spinning Mills Private Limited (SMT)
to 'CRISIL B+/Stable' from 'CRISIL B/Stable' while reaffirming
the rating on the short-term facility at 'CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 7.8 CRISIL A4 (Reaffirmed)
Cash Credit 60.0 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
Term Loan 92.2 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
The rating upgrade reflects CRISIL's belief that the company's
financial risk profile will improve over the medium term
supported by steady operating performance. Moderate revenue
growth, supported by the recent capacity addition and stable
operating profitability, is expected to result in improved cash
accrual of INR18-21 million per annum over the medium term.
Steady accretion and capital infusion by the promoters is
expected to result in better gearing of 2.3 times as on March 31,
2016, from 3.2 times as on March 31, 2015. The rating upgrade
also factors in sustained improvement in liquidity. The bank
limits were moderately utilised by around 85 percent over the 10
months through January 2016 supported by prudent working capital
management. Furthermore, the cash balances were moderate at INR24
million as on March 31, 2015.
The ratings continue to reflect SMT's modest financial risk
profile, because of below-average debt protection metrics, and
its modest scale of operations in the highly fragmented textile
industry. These weaknesses are partially offset by the
entrepreneurial experience of the promoters.
Outlook: Stable
CRISIL believes that SMT will continue to benefit from
entrepreneurial experience of the promoters over the medium term.
The outlook may be revised to 'Positive' if the company reports
significant growth in revenue and profitability leading to
improvement in cash accruals and capital structure. Conversely,
the outlook may be revised to 'Negative' if the accrual declines,
or if it undertakes a large, debt-funded capital expenditure
programme, leading to deterioration of the financial risk profile
Set up in 2006 by Mr. K Kalyana Sundaram and family, SMT is into
spinning of cotton yarn.
SOMANIL CHEMICALS: CRISIL Suspends B Rating on INR45MM Loan
-----------------------------------------------------------
CRISIL has suspended its rating on the bank facilities of
Somanil Chemicals Limited (SCL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 45 CRISIL B/Stable
Letter of Credit 40 CRISIL B/Stable
Term Loan 4.5 CRISIL B/Stable
The suspension of rating is on account of non-cooperation by SCL
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, SCL is yet to
provide adequate information to enable CRISIL to assess SCL's
ability to service its debt. The suspension reflects CRISIL's
inability to maintain a valid rating in the absence of adequate
information. CRISIL considers information availability risk as a
key factor in its rating process as outlined in its criteria
'Information Availability - a key risk factor in credit ratings'
SCL, incorporated in 1999, manufactures pesticide formulations,
including insecticides, herbicides, and fungicides, which have
varied applications in the agriculture industry. The company also
trades in small quantities of pesticides in the domestic market.
It is managed by Mr. Satnaryan Mittal and his relatives, Mr.
Munesh Gupta and Mr. Jai Prakash Garg.
SRI VENKATA: CRISIL Assigns 'B' Rating to INR170MM Cash Loan
------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable' rating to the long-term
bank facilities of Sri Venkata Subrahmanyeswara Modern Raw and
Boiled Rice Mill (SVSMRBRM).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term
Bank Loan Facility 40 CRISIL B/Stable
Long Term Loan 14.3 CRISIL B/Stable
Open Cash Credit 170 CRISIL B/Stable
The rating reflects SVSMRBRM's modest scale of operations in the
intensely competitive rice-milling industry and the
susceptibility of the firm's operating profitability to changes
in government regulations and to volatility in raw material
prices. The rating also reflects the firm's weak financial risk
profile because of a below-average capital structure and subdued
debt protection metrics. These weaknesses are partially offset by
the extensive experience of the promoters' in the rice industry
and established relations with customers and suppliers.
Outlook: Stable
CRISIL believes SVSMRBRM will maintain a stable business risk
profile over the medium term on the back of the promoters'
extensive experience in the rice-milling industry. The outlook
may be revised to 'Positive' if revenue and profitability
increase substantially leading to improvement in the financial
risk profile or in case of significant capital infusion into the
firm resulting in improvement in the capital structure.
Conversely, the outlook may be revised to 'Negative' if SVSMRBRM
undertakes a large, debt-funded capital expenditure programme, or
if the partners [withdraw more than expected capital from the
firm leading to deterioration in the financial risk profile.
Set up in 1984, SVSMRBRM mills and processes paddy into rice,
rice bran, broken rice and husk. Its rice mill is located in
Kakinada, Andhra Pradesh. The operations are managed by Mr.
Bhaskara Rao.
SRV KNIT: CRISIL Raises Rating on INR57MM Cash Loan to B+
---------------------------------------------------------
CRISIL has upgraded its rating on the bank facilities of SRV Knit
Tech Private Limited (SRV) to 'CRISIL B+/Stable' from 'CRISIL
B/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 57 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
Long Term Loan 3 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
The rating upgrade reflects improvement in financial risk profile
on account of generation of steady cash accrual leading to
improvement in capital structure and liquidity. Gearing was 2.4
times as on March 31, 2015. CRISIL believes the financial risk
profile will improve over the medium term due to steady cash
accrual. The rating also takes into consideration the promoter's
extensive experience in the ready-made garments industry, and its
established relationships with customers. The ratings are however
constrained by modest scale of and working capital-intensive
operations.
Outlook: Stable
CRISIL believes SRV will continue to benefit over the medium term
from its established market position, and its promoter's
extensive industry experience. The outlook may be revised to
'Positive' in case of a significant increase in revenue, along
with sustained improvement in profitability margin and debt
protection metrics. Conversely, the outlook may be revised to
'Negative' in case of deterioration in operating margin or debt
protection metrics, or a significant stretch in working capital
cycle.
Incorporated in 2000, SRV manufactures ready-made cotton and
woollen garments for several leading brands. The company is
promoted by Mr. Akhil Khanna, a Delhi-based entrepreneur. It has
its manufacturing facility in Bengaluru.
STOTZ GEARS: CRISIL Suspends B- Rating on INR32MM Cash Loan
-----------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of
Stotz Gears Private Limited (SGPL; part of the Stotz group).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 32 CRISIL B-/Stable
Letter of Credit 23.2 CRISIL A4
Standby Line of Credit 4.8 CRISIL B-/Stable
The suspension of ratings is on account of non-cooperation by
SGPL with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, SGPL is yet to
provide adequate information to enable CRISIL to assess SGPL's
ability to service its debt. The suspension reflects CRISIL's
inability to maintain a valid rating in the absence of adequate
information. CRISIL considers information availability risk as a
key factor in its rating process as outlined in its criteria
'Information Availability - a key risk factor in credit ratings'.
For arriving at its ratings, CRISIL has combined the financial
and business risk profiles of SGPL and its subsidiary Swastik
Metaforge Pvt Ltd (SMPL). This is because the two companies,
together referred to as the Stotz group, have a common management
and strong operational and financial linkages.
SGPL was incorporated in 1992, promoted by Mr. Pradip Kalra and
Mr. Sunil Kalra. The company manufactures a wide range of heavy
machinery components. It supplies to various industries,
including sugar, cement, thermal power, iron and steel, and coal.
It specialises in manufacturing large-diameter (more than 6
metres) gears.
SMPL, a wholly owned subsidiary of SGPL, manufactures heavy
forgings, mild-steel castings, and other products. Its focus is
on kiln fabrication, hydro turbine components, and metal frames
for tunnels. It started production in March 2011. The
manufacturing units of both the companies are in Ghaziabad (Uttar
Pradesh).
SUNDARAM STEELS: CARE Revises Rating on INR17.07cr Loan to BB-
--------------------------------------------------------------
CARE revises the rating assigned to the bank facilities of
Sundaram Steels Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 17.07 CARE BB- Revised from
CARE B+
Rating Rationale
The revision in the rating assigned to the bank facilities of
Sundaram Steels Private Limited (SSPL) factors in successful
completion of the expansion project coupled with improvement in
profitability margins, capital structure and coverage indicators
in FY15 (refers to the period April 1 to March 31).
The ratings, however, continue to remain constrained by the small
scale of operations, working capital-intensive nature of
operations, presence in the highly competitive industry,
susceptibility of profitability margins to raw material price
fluctuation and cyclicality associated with the steel industry.
The ratings, however, continue to draw comfort from the
experienced promoters. Going forward, the ability of the company
to increase its scale of operations while maintaining its
profitability margin and capital structure, and efficiently
manage its working capital requirements shall be the key rating
sensitivities.
SSPL was incorporated in 2008 by Mr Yogesh Manek, Mr Anurag
Singhaia, Mr Mohit Jain and other family members. The commercial
operations of the company started in April, 2012. The company is
engaged in manufacturing of sponge iron. The manufacturing
facility of the company is located at Bokarao in Jharkhand with
the installed capacity of 27,000 tonne per annum (TPA) as on
March 31, 2015. The company sells its final product directly to
the blast furnace industry mainly in Uttar Pradesh and Jharkhand.
The major raw materials required for production of sponge iron
are iron ore, coal and limestone.
In FY15, SSPL achieved a total operating income (TOI) of INR43.51
crore with PBILDT and PAT of INR4.84 crore and INR0.75 crore
respectively as against total operating income of INR47.74 crore
with PBILDT and PAT of INR5.12 crore and 0.26 crore in FY14.
SWASTIK METAFORGE: CRISIL Suspends 'D' Rating on INR39.8MM Loan
---------------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of
Swastik Metaforge Private Limited (SMPL; part of the Stotz
group).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 36 CRISIL D
Letter of Credit 30 CRISIL D
Proposed Long Term Bank
Loan Facility 39.2 CRISIL D
Standby Line of Credit 5 CRISIL D
Term Loan 39.8 CRISIL D
The suspension of ratings is on account of non-cooperation by
SMPL with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, SMPL is yet to
provide adequate information to enable CRISIL to assess SMPL's
ability to service its debt. The suspension reflects CRISIL's
inability to maintain a valid rating in the absence of adequate
information. CRISIL considers information availability risk as a
key factor in its rating process as outlined in its criteria
'Information Availability - a key risk factor in credit ratings'
For arriving at its ratings, CRISIL has combined the financial
and business risk profiles of SMPL and its parent Stotz Gears Pvt
Ltd (SGPL). This is because the two companies, together referred
to as the Stotz group, have a common management and strong
operational and financial linkages.
SGPL was incorporated in 1992, promoted by Mr. Pradip Kalra and
Mr. Sunil Kalra. The company manufactures a wide range of heavy
machinery components. It supplies to various industries,
including sugar, cement, thermal power, iron and steel, and coal.
It specialises in manufacturing large-diameter (more than 6
metres) gears.
SMPL, a wholly owned subsidiary of SGPL, manufactures heavy
forgings, mild-steel castings, and other products. Its focus is
on kiln fabrication, hydro turbine components, and metal frames
for tunnels. It started production in March 2011. The
manufacturing units of both the companies are in Ghaziabad (Uttar
Pradesh).
TARUN OILS: Ind-Ra Assigns B+ LT Issuer Rating; Outlook Stable
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Tarun Oils
Private Limited (TOPL) a Long-Term Issuer Rating of 'IND B+'.
The Outlook is Stable. The agency has also assigned TOPL's
INR81.50 mil. fund-based working capital limits an 'IND B+'
rating with a Stable Outlook.
KEY RATING DRIVERS
TOPL's ratings reflect its moderate scale of operations and weak
financial profile. It reported revenue of INR325 mil. in FY15,
as per its audited financials (FY14: INR440 mil.). Its credit
profile was weak, with EBITDA margins of 3.6% in FY15 (FY14:
2.5%), gross interest coverage of 1.2x (1.2x) and net leverage
(net debt/EBITDA) of 6.1x (8.5x). Its liquidity was also
moderate, with 94% average utilization of its fund-based limits
over the 12 months ended February 2016.
However, the ratings benefit from its founders' experience of
over three decades in the edible oil industry.
RATING SENSITIVITIES
Positive: A substantial improvement in its scale of operations,
along with an improvement in its credit metrics may lead to a
positive rating action.
Negative: Deterioration in its credit metrics could lead to a
negative rating action.
COMPANY PROFILE
TOPL was incorporated in 2003 by Mr. Rajendra Mittal and
primarily manufactures mustard oil and mustard cake. The company
has an installed capacity of 17820mtpa and mainly caters to Uttar
Pradesh, Madhya Pradesh and Delhi.
TATA CHEMICALS: Fitch Affirms 'BB+' LT IDR; Outlook Stable
-------------------------------------------------------
Fitch Ratings has affirmed India-based Tata Chemicals Limited's
(TCL) Long-Term Issuer Default Rating at 'BB+'. The Outlook is
Stable.
TCL, a Tata group company in which the holding company Tata Sons
Limited (TSOL) and other group companies hold an aggregate stake
of 30.98%, is the world's second-largest manufacturer of soda ash
by output and a leading manufacturer of fertilizers (especially
urea) and branded salt in India.
TCL's rating reflects its small size in relation to global peers
and high financial leverage. The ratings also factor the
company's strong market position in key businesses and improving
performance of its UK and Kenyan arms after restructuring. The
Stable Outlook is underpinned by the steady demand for soda ash
globally and for TCL's fertilisers and branded salt in India.
Fitch expects EBITDA margin to improve in the next 12 to 18
months and capex to remain modest, which will enable TCL to
generate positive free cash flow (FCF) and deleverage.
KEY RATING DRIVERS
Long Working Capital Cycle: TCL's business is working capital
intensive, with its working capital cycle ranging from 100 to 115
days during the last five years. A key driver of the working
capital cycle is the days receivable, which stood at 71 days in
in the financial year ended March 31, 2015, (FY15). Delay in the
receipt of fertiliser subsidies from the Indian government has
resulted in a fairly long working capital cycle and high
financial leverage (net adjusted debt/operating EBITDAR) of 3.4x
in FY15.
TCL's subsidies receivable from the government was INR19.71 bil.
as of March 31, 2015, of which INR5.46 bil. was delayed for more
than six months. Had TCL received these subsidies, its net
debt/EBITDA would have been lower at 2.53x as of end-FY15.
Subsidies receivable from the government was INR15.77 bil. as of
Dec. 31, 2015. TCL's ratio of secured and prior ranking debt to
operating EBITDAR is high at 2.37x as of end-FY15. Should Fitch
assign a senior unsecured rating, this ratio being sustained at
over 2.0x would result in TCL's senior unsecured debt being
notched down from TCL's IDR.
EBITDA Margin to Improve: The government at the end of March 2016
lowered gas prices by 20% to USD3.06 per unit, potentially up to
1HFY17. This is likely to result in higher EBITDA margin but
lower subsidies during FY17. Improving EBITDA margin and modest
capex should support positive FCF in the medium term. TCL
targets to reduce its net debt in the medium term even though
subsidy delays are likely to continue.
Improving UK and Kenyan Operations: TCL has completed the
restructuring of its UK arm with the commissioning of a 14MW
steam turbine during 3QFY16, resulting in an improvement in
EBITDA margin to 6.6% during 9MFY16 from 3.8% a year earlier.
The Kenyan operations, which were restructured in FY14, drove the
improvement in the African operations' EBITDA margin to 15.3% in
9MFY16 from 8.4% a year earlier.
Strong Market Position: TCL is the second-largest soda ash
producer globally by output, and the largest in India. TCL's
access to trona mines at its US and Kenyan operations support its
leading position. The company benefits from its position as one
of the leading players in branded salt, fertiliser and urea
products in India. The rating factors in the integrated nature
of TCL's Indian operations, demand for fertilisers in India
exceeding supply and TCL's position as an efficient urea producer
in India.
Diversified Business Profile: TCL's flagship inorganic chemicals
business (comprising soda ash, marine chemicals, caustic soda,
cement, bulk chemicals and salt) accounts for 47% of its FY15
consolidated revenue, fertilisers (both urea and phosphatic) 39%,
other agri inputs (including traded seeds, pesticides and
speciality crop nutrients) 12% and other products (pulses,
spices, water purifiers and nutritional solutions) 2%. Asia
accounts for 72% of TCL's consolidated FY15 revenues, followed by
America (15%), Europe (9%) and Africa and other countries (4%).
Linkages to the Tata Group: Fitch believes that the linkage
between TCL and the Tata Group is strong. However no uplift is
currently applied to TCL's IDR. Fitch will evaluate the
applicability of a one-notch uplift should TCL's IDR be
downgraded. Any uplift for support at that point will be a
function of several factors including TCL's strategic importance
to TSOL and TSOL's credit profile.
KEY ASSUMPTIONS
Fitch's key assumptions within the rating case for TCL include:
-- Improvement in the profitability of TCL's UK business from
FY17 after completion of the restructuring
-- Normal monsoon rainfall in FY17 supporting the Indian
fertilizer and agri input business
-- Stable North American operations
-- Delay in receipt of fertilizer subsidies to continue
-- Modest capex plans, with capital intensity (capex/revenues)
not exceeding 5% till end FY17
RATING SENSITIVITIES
Positive: Future developments that may, individually or
collectively, lead to positive rating action include:
-- Net financial leverage (net adjusted debt / operating
EBITDAR) sustained below 2.0x
-- The ratio of operating EBITDAR to the sum of gross interest
expense and lease rents improving to 5.0x on a sustained
basis (FY15: 4.08)
-- TCL generating positive free cash flows on a sustained
basis
Negative: Future developments that may, individually or
collectively, lead to negative rating action include:
-- Any adverse change in the Indian fertilizer subsidy policy
or a large debt-funded capex or acquisition that leads to
net financial leverage exceeding 3.5x on a sustained basis,
-- The ratio of operating EBITDAR to the sum of gross interest
expense and lease rents deteriorating to less than 3.5x on
a sustained basis
-- TCL trending towards negative free cash flows on a
sustained basis
LIQUIDITY
Adequate Liquidity: TCL's consolidated cash balance as of
March 31, 2015, was INR14.64 bil., which is adequate to meet the
FY16 capex, dividends and debt repayments.
Low Structural Subordination: TCL has 100% stakes in most of its
key operating subsidiaries, with Rallis India being a significant
exception. TCL held 50.06% in Rallis India as of Dec. 31, 2015,
with institutional shareholders (banks, mutual funds and
insurance companies) holding a 21.49% stake and retail investors
holding the rest. TCL's shareholdings and the management control
it exercises minimise structural subordination risk.
THOMAS CONSTRUCTIONS: CRISIL Assigns B+ Rating to INR41.8MM Loan
----------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to
the bank facilities of Thomas Constructions Private Limited
(TCPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Fund-Based
Bank Limits 41.8 CRISIL B+/Stable
Overdraft Facility 30.0 CRISIL A4
Long Term Loan 2.7 CRISIL B+/Stable
Bank Guarantee 21.0 CRISIL A4
Corporate Loan 4.5 CRISIL B+/Stable
The ratings reflect TCPL's modest scale of operations and working
capital-intensive operations. These weaknesses are mitigated by
the promoter's extensive experience along with healthy growth
prospects in telecom and power segment, and moderate financial
risk profile because of comfortable capital structure and
adequate debt protection metrics, albeit small networth.
Outlook: Stable
CRISIL believes TCPL will maintain a stable business risk profile
over the medium term backed by its promoter's considerable
entrepreneurial experience. The outlook may be revised to
'Positive' if higher-than-expected operating income and cash
accrual is achieved with improved networth and working capital
cycle. Conversely, the outlook may be revised to 'Negative' if
low revenue and cash accrual, stretched working capital cycle, or
significant debt-funded capital expenditure weakens financial
risk profile.
TCPL, previously known as Thomas Construction, commenced
operations in 1996. Thomas Construction was converted into a
private-limited company in 2007. TCPL is engaged in laying of
optical fibre cables/multipair jelly-filled telephone cables,
high-density polyethylene cables, routine maintenance, tower
fabrication and erection, and other related civil structural
work. The company's operations are managed by the promoter, Mr.
Thomas Joseph, and his son, Mr. Tom Joseph.
TRANSSTROY INDIA: CARE Reaffirms D Rating on INR1,730.2cr Loan
--------------------------------------------------------------
CARE reaffirms the ratings assigned to the bank facilities of
Transstroy India Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 938.32 CARE D Re-affirmed
Short-term Bank Facilities 552.63 CARE D Re-affirmed
Long-term/Short-term Bank 1,730.20 CARE D /CARE D
Facilities Re-affirmed
Rating Rationale
The ratings assigned to the bank facilities of Transstroy India
Limited (Transstroy) continue to be constrained by delays in
servicing debt obligations on account of tight liquidity
position.
Transstroy established in 2001, is a civil engineering and
construction company mainly engaged in the construction and
development of infrastructure projects. Transstroy initially
undertook sub-contracting works from key players in the
infrastructure sector. Having gained requisite experience over
the years, the company forayed into infrastructure development
segment on public private partnership (PPP) basis through joint
ventures (JVs).
During FY14 (refers to the period April 01 to March 31), the
company has earned a net profit of INR266.20 crore on a total
operating income of INR4,535.80 crore.
TRINITY BEVERAGES: CARE Reaffirms D Rating on INR59.24cr LT Loan
----------------------------------------------------------------
CARE reaffirms the rating assigned to the bank facilities of
Trinity Beverages Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 59.24 CARE D Re-affirmed
Rating Rationale
The reaffirmation of the rating of Trinity Beverages Private Ltd
(TBPL) takes into account the continued delays in debt servicing.
TBPL was incorporated in July 2002 and commenced business from
May 2003 with the setting up facilities for production of
beverages (mineral water, soda and flavoured drinks) at its plant
located at Hyderabad and Bangalore. The company was taken over by
Mr Kishore Agarwal (present managing director) who is the
promoter of the Iceberg group of companies. The group is mainly
engaged in carbonated soft drinks, flavoured drinks, soda and
packaged drinking water.
VAJRAKALPA COTTON: CRISIL Assigns B+ Rating to INR140MM Loan
------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating on the long-
term bank facility of Vajrakalpa Cotton (VC).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 140 CRISIL B+/Stable
The ratings reflect VC's low operating margin and modest
financial risk profile constrained by its aggressive capital
structure. These weaknesses are partially offset by moderate
scale of operations and extensive experience of promoters in
cotton industry.
Outlook: Stable
CRISIL believes that VC will benefit from its promoter's
extensive experience in the cotton ginning industry. The outlook
may be revised to 'Positive' if there is a material improvement
in operating profitability leading to improvement in its cash
accruals and thereby the financial and liquidity profiles.
Conversely, the outlook may be revised to 'Negative' if the
company's operating margin decreases or its working capital
management deteriorates, thereby weakening its liquidity profile.
Vajrakalpa Cotton (VC) is a partnership firm established in 1999
and is engaged in the ginning & pressing of raw cotton, oil
extraction and trading of cotton lint in Telangana.
VARSHA SUPER: CRISIL Reaffirms B+ Rating on INR137.5MM Loan
-----------------------------------------------------------
CRISIL's rating on the long term bank facilities of Varsha Super
Stockist India Private Limited (VSS) reflects its below-average
financial risk profile marked by high total outside liabilities
to total net worth ratio along with limited geographical
diversity in its revenue profile.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 137.5 CRISIL B+/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility 7.5 CRISIL B+/Stable (Reaffirmed)
These rating weaknesses are mitigated by its promoters' extensive
experience in the consumer durable distributorship business and
VSS's established relationship with its principal Samsung India
Electronics Pvt Ltd.
Earlier, CRISIL had assigned its 'CRISIL B+/Stable' rating to the
long-term bank facilities of VSS on 23/02/2016.
Outlook: Stable
CRISIL believes that VSS will benefit from its promoters' long-
standing presence in the distribution industry and established
presence. The outlook may be revised to 'Positive' if VSS reports
more-than-expected growth in revenues and profitability, leading
to improvement in its financial risk profile, led by increase in
cash accruals. Conversely, the outlook may be revised to
'Negative' if VSS's financial risk profile deteriorates, due to a
stretch in the working capital cycle or lower-than-expected
profitability.
Established as a proprietorship firm in 1993 and later
reconstituted into a private limited company, VSS is the sole
regional distributor for Samsung Mobile Phones in Trivandrum and
also the sole regional distributor for Samsung Home Appliances
for Trivandrum and Kollam District. It is also a distributor of
M/s MVJ Foods India Pvt Ltd and V-Guard Industries. Based in
Trivandrum (Kerala), the company is promoted by Mr. T.G. Thampy.
VILAS JAVDEKAR: CARE Reaffirms B+ Rating on INR13.40cr Loan
-----------------------------------------------------------
CARE reaffirms the ratings assigned to the bank facilities of
Vilas Javdekar Eco Shelters Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Non-Convertible Debenture 13.40 CARE B+ Reaffirmed
Rating Rationale
The rating continues to factor in the sluggish operational
performance of Vilas Javdekar Eco Shelters Private Limited (VJES)
marked by very low physical progress achieved at its 'Prudentia'
project in Wakad (Pune) as reflected in project cost incurred as
on December 31, 2015. Furthermore, the sales for the project
which have commenced had not been registered till December 31,
2015. Furthermore, the rating is constrained with approvals
related to plan sanctions till the 6th floor (out of 15 floors)
of Phase I, having a bearing on project construction commencement
and related sales and the cyclical nature of the real estate
industry.
The rating continues to derive strength from the experience of
the promoters and favourable location of the project. The ability
of VJES to receive required approvals, improve the project
execution, timely collection of receivables and complete the
project without any cost overrun is the key rating sensitivities.
VJES is a Pune-based company belonging to the Vilas Javdekar
Group and was formed in February, 2013. VJES is promoted Mr
Aditya Javdekar in the strength of chairman and managing director
(CMD). The flagship entity of the group is Vilas Javdekar Eco
Homes (rated; CARE.BB (Is)). The group is currently engaged in
the construction and development of real estate projects
(residential and commercial) in Pune and Kolhapur areas in
Maharashtra and also undertakes construction of infrastructure
facilities such as water treatment plants, roads and highways.
The group also provides consultancy services to government bodies
for real estate and infrastructure development. The group has to
its credit completion of over 20 residential and commercial real
estate projects (as on December 31, 2015) with a total saleable
area of more than 11 lakh square feet (lsf). VJES had raised Non-
Convertible Debentures (NCD) aggregating to INR29.20 crore on
September 16, 2013. The current outstanding of the NCD as on
December 31, 2015 was INR13.40 crore.
The Vilas Javdekar groups was executing three projects through
VJES and VJEH (rated CARE BB) namely Prudentia (under VJES),
Yashwin and Shivalaya which were utilizing the proceeds of the
NCD raised.
VISWAKARMA ROOFINGS: CARE Assigns B+ Rating to INR15cr LT Loan
--------------------------------------------------------------
CARE assigns 'CARE B+' rating to the bank facilities of
Viswakarma Roofings (India) Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 15 CARE B+ Assigned
Rating Rationale
The rating assigned to the bank facilities of Viswakarma Roofings
(India) Private Limited (VRIPL) factors in nascent stage of
operations, vulnerability of margins to fluctuations in raw
material prices along with risk associated with foreign exchange
fluctuation and threats of restrictions on the usage of asbestos
on account of its hazardous nature.
The rating factors in experience of the promoter group, qualified
key management, rising demand for asbestos cement sheets from the
rural markets and strategic location of the plant.
Timely stabilization of the operations to achieve envisaged level
of sales & profitability is a key ratingsensitivity.
Bihar-based, VRIPL, was incorporated in November, 2009. VRIPL was
initially promoted by Mr Chittineni Sumalatha and Mr Katikaneni
Ahindrakumar Varma in 2009. The company was only registered under
the Companies Act and was not undertaking any operations. The
company were taken over by Mr Rahul Tupe and Mr V Laxminarayan
Rao in 2012. The company is involved in the manufacturing of
asbestos cement sheets. The company is operating under a rented
facility from Nibhi Industries Private Limited and has an
installed capacity of 120,000 MTPA and production of 75.18
running meter of standard width Asbestos Cement (AC) sheet. The
company commenced its commercial operations in February, 2016 and
sells its products under the brand name of 'Viswas'.
The AC sheets manufactured by the company are used for roofing of
factory building, warehouses, go downs, railway platforms,
garages, low cost housing, poultry farms etc. The plant is taken
on lease for three years from Nibhi Industries Private Limited.
The company has taken the plant on lease as it is registered
under the sales tax exemption scheme of the state. The said
scheme implies that the company will get refund of 33% of sales
tax after every six months for ten years starting from 2012 to
2022.
The company intends to import the basic raw material i.e. raw
asbestos fibre from Canada, Russia, Zimbabwe, Brazil, ordinary
port land cement, fly ash, cotton rag pulp etc. from local
suppliers which are available within 10 kms radius of the factory
while the finished products is intended to be sold to various
industries though a network of dealers primarily focusing on
Bihar region.
The group also has recently acquired Aashirwad Industries Pvt.
Ltd. (at Nagpur) which is also engaged in the manufacturing of AC
sheets. The company was into operations since 2012 and has been
selling its products under the brand name of 'Aashirwad'.
However, post-acquisition of the same by Tupe Family in October
2015, company will sell its products also under the brand name of
'Viswas'.
=================
I N D O N E S I A
=================
JAPFA COMFEED: Fitch Affirms 'BB-' IDR; Outlook Negative
--------------------------------------------------------
Fitch Ratings has affirmed Indonesia-based PT Japfa Comfeed
Indonesia Tbk's Long-Term Issuer Default Rating at 'BB-' with a
Negative Outlook. Japfa's senior unsecured rating and the rating
on its senior unsecured US dollar notes due in 2018 issued by
Comfeed Finance B.V. have also been affirmed at 'BB-'.
Fitch Ratings Indonesia has also affirmed Japfa's National Long-
Term Rating at 'A+(idn)' with a Negative Outlook. The rating on
its IDR1.5 trillion bonds due in 2017 is affirmed at 'A+(idn)'.
Market conditions in the poultry and animal feed markets and
Japfa's profitability have improved, which resulted its leverage
(net debt/EBITDA) declining to 2.6x in 2105 from 3.7x a year
earlier. However, Japfa faces significant debt maturities in
2017 and 2018 - IDR1.5 trillion of domestic rupiah bonds are due
January and February 2017, and USD203m of dollar bonds are due in
May 2018. The Negative Outlook captures the somewhat lumpy debt
maturity profile. However, the company has good access to
domestic funding sources and is currently addressing the
refinancing of its domestic bonds.
'A' National Ratings denote expectations of low default risk
relative to other issuers or obligations in the same country.
However, changes in circumstances or economic conditions may
affect the capacity for timely repayment to a greater degree than
is the case for financial commitments denoted by a higher rated
category.
KEY RATING DRIVERS
Significant Upcoming Debt Maturities: Japfa's rupiah and US
dollar bonds due in 2017 and 2018 represent around 60% of the
total outstanding debt as of end-2015. Fitch estimates that
Japfa will need to secure refinancing for the bonds, given
inadequate free cash flow generation over the next three years.
Risks to Japfa's credit profile remain because of the significant
refinancing needs.
Improved Supply Situation: The Indonesian government directed
producers to cull up to 6 million birds (parent stock) in October
2015 following weak prices for day-old chicks (DOC) and live
birds in 2H14 and 1H15. The exercise aimed to cut supply and
support prices, which dropped below the cost of production and
resulted losses at producers, including small-scale farmers.
Around 3 million birds (50% of the target) have been culled until
December 2015, and recent comments by the minister for
agriculture indicate that the government plans more steps, such
as managing imports of breeder stock, to keep supply in check.
The government-coordinated culling and higher chicken consumption
drove Japfa's better profitability in 2015, with EBITDA margin
improving to 9.1% (2014: 7.2%).
Robust Demand Growth: Chicken demand in Indonesia grew by 3.8% in
2015, compared with growth of less than 1% in 2013 and 2014,
according to data by the USDA. Higher demand for broiler meat
was likely driven by faster growth in overall government spending
last year, as well as lower inflation. Fitch expects chicken
demand in Indonesia to continue to increase as per capita poultry
consumption is low and the agency expects GDP growth to
accelerate.
Cost Pass-Through Ability: The animal feed business accounts for
over 90% of Japfa's operating profit. Japfa is exposed to the
risk rising in raw material costs, but this is mitigated by a
strong ability to pass-through cost increases. This is due to
the company's high market share and its ability to retain corn
inventory and adjust output.
PT Charoen Pokphand Indonesia (CPIN) and Japfa together control
about 50% of Indonesia's poultry feed market, and react similarly
to increases in raw material costs by seeking to raise prices.
Japfa's corn dryers also allow it to store dried corn for up to
four months, providing some flexibility in production. Japfa's
earnings are less volatile because the animal feed business is a
large contributor, and Fitch has adjusted its rating
sensitivities to account for the relative size of this segment.
Moderate Leverage: Fitch estimates Japfa's leverage to remain at
around 2.5x in 2016-2017, based on our expectation that demand
and supply in the Indonesian poultry market would remain
balanced. Hence, a key risk to our forecast is lack of
coordination among stakeholders in keeping supply growth in
check, which could result in a reversion to the low profitability
of 2014. A sharp rise in raw material costs could also restrict
Japfa's ability to pass through costs, impacting credit metrics.
KEY ASSUMPTIONS
Fitch's key assumptions within its rating case for the issuer
include:
-- Japfa's animal feed sales volume to remain flat in 2016,
and grow at 3% annually thereafter.
-- Average annual sales volume growth of 3%-4% for DOC and
live poultry from 2016.
-- EBITDA margin of around 9%, similar to 2015 level.
-- Capex of around IDR1trn in 2016 and IDR700bn thereafter.
-- Japfa refinances its domestic and US dollar bonds.
RATING SENSITIVITIES
Negative: Future developments that may, individually or
collectively, lead to negative rating action include:
-- Leverage (net debt/EBITDA) remaining higher than 2.5x on a
sustained basis (2015: 2.6x)
-- Significant reduction in size of the animal feed segment,
which is demonstrated in its share of total revenue falling
below 30%
-- Failure to adequately address upcoming maturities of the
Indonesian rupiah bonds (in 2017) and US dollar bond (in
2018)
Positive: Developments that may, individually or collectively,
lead to a revision in the Outlook to Stable include:
-- Leverage lowering to 2.5x or below on a sustained basis
-- No material reduction in relative size of animal feeds
segment
-- Success in addressing maturities of the rupiah and US
dollar bonds.
====================
N E W Z E A L A N D
====================
PRESTIGE EVENTS: Goes into Receivership
---------------------------------------
Cliff Sanderson at Dissolve.com.au reports that Prestige Events
has gone into receivership. Damien Grant of Waterstone
Insolvency has been appointed receiver of the company, the report
says.
According to the report, Prestige Events' fate resulted from
unpaid debts because of an invoice funding firm.
Prestige organises the upcoming Auckland Snapper Challenge.
STONEWOOD HOMES: Two Companies Owe IRD More Than NZ$1MM
-------------------------------------------------------
Stuff.co.nz reports that two Stonewood Homes companies owed
Inland Revenue (IRD) more than NZ$1 million at the time of their
collapse, court documents reveal.
The two firms owed more than NZ$330,000 in outstanding PAYE tax
-- a major debt that could result in senior figures being held
criminally liable if they were aware of the failure to pay PAYE,
Stuff.co.nz relates citing an insolvency expert.
According to Stuff.co.nz, Brent Mettrick, the building company's
founder and director when it faltered, said he only became aware
of tax issues "relatively late in the piece" after arrears had
mounted for some time.
IRD has filed liquidation proceedings against Stonewood Homes New
Zealand Ltd (in receivership) and Stonewood Homes Ltd (in
receivership) at the High Court in Christchurch. The extent of
the debts has not been made available until now, Stuff.co.nz
relates.
On February 22, Stonewood Homes New Zealand Ltd -- the master
franchisor of the Stonewood Group -- and sister companies
Stonewood Homes Ltd and Sterling Homes (Christchurch), went into
receivership, owing unsecured creditors NZ$15 million. Its
shareholder company, Holmfirth Group Ltd, is also in liquidation.
According to Stuff.co.nz, High Court documents show IRD wants to
liquidate the companies -- now insolvent and unable to meet debts
-- on April 21.
Its statement of claims revealed Stonewood Homes Ltd owed IRD
NZ$864,323. Stonewood Homes New Zealand Ltd owed NZ$183,224.
Stuff.co.nz relates that insolvency expert Jeremy Johnson --
email@wynnwilliams.co.nz -- of Christchurch firm Wynn Williams,
said the PAYE debts could be problematic for directors.
Stonewood Homes New Zealand Ltd had a NZ$148,394 outstanding PAYE
tax bill, while Stonewood Homes Ltd's was NZ$186,620. Employers
are responsible for deducting and paying PAYE (pay as you earn)
income tax on behalf of employees, the report discloses.
More than NZ$300,000 in unpaid PAYE was "a significant issue for
the directors", because PAYE was "effectively money owned by the
employees that's due to go to the Government on their behalf",
Mr. Johnson, as cited by Stuff.co.nz, said.
A failure to pay PAYE could give rise to criminal liability if
the directors knew about it, he said.
"The last thing a director should be doing is not paying PAYE,"
the report quotes Mr. Johnson as saying.
If the directors knew the company was not paying PAYE and it
happened to that extent, it indicated the company was "in serious
difficulty", Mr. Johnson said, the report relays.
The company would have most likely used the funds owed to IRD to
pay other creditors to continue trading, Mr. Johnson said.
Other Stonewood Homes New Zealand Ltd debts with IRD include;
NZ$12,063 in fringe benefit tax, NZ$7223 in Kiwisaver employee
deductions, NZ$5479 in Kiwisaver employer contributions, NZ$6935
in employer superannuation contribution tax and NZ$3128 in
student loan employer deductions, according to Stuff.co.nz.
Stonewood Homes Ltd had a large GST debt of NZ$641,614, along
with NZ$19,086 in fringe benefit tax debt, NZ$10,763 in Kiwisaver
employee deductions, NZ$2378 in Kiwisaver employer contributions,
NZ$3022 in employer superannuation contribution and NZ$837 in
student loan employer deductions, Stuff.co.nz discloses.
Stuff.co.nz adds that former Stonewood director Brent Mettrick,
who founded the building firm with his wife, Sue, in 1987, said
the companies were insolvent so it was "entirely appropriate"
they were liquidated. He would not oppose the proceedings.
Mr. Mettrick did not want to comment on what led to the large tax
debt, "other than to note that this issue was only drawn to my
attention relatively late in the piece after arrears had been
accruing for some time," Stuff.co.nz notes.
"I agree that there is a significant amount of tax owing and this
is naturally of concern to me (as are all amounts outstanding to
all creditors of SHNZL and other Stonewood entities). This is an
unfortunate result of a business failure," he said in an email,
Stuff.co.nz relays.
IRD declined to comment, notes Stuff.co.nz.
KordaMentha joint-receiver Neale Jackson said IRD was entitled to
file the proceedings. He had no comment, Stuff.co.nz adds.
*********
Tuesday's edition of the TCR-AP delivers a list of indicative
prices for bond issues that reportedly trade well below par.
Prices are obtained by TCR-AP editors from a variety of outside
sources during the prior week we think are reliable. Those
sources may not, however, be complete or accurate. The Tuesday
Bond Pricing table is compiled on the Friday prior to
publication. Prices reported are not intended to reflect actual
trades. Prices for actual trades are probably different. Our
objective is to share information, not make markets in publicly
traded securities. Nothing in the TCR-AP constitutes an offer
or solicitation to buy or sell any security of any kind. It is
likely that some entity affiliated with a TCR-AP editor holds
some position in the issuers' public debt and equity securities
about which we report.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR-AP. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com
Friday's edition of the TCR-AP features a list of companies with
insolvent balance sheets obtained by our editors based on the
latest balance sheets publicly available a day prior to
publication. At first glance, this list may look like the
definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical
cost net of depreciation may understate the true value of a
firm's assets. A company may establish reserves on its balance
sheet for liabilities that may never materialize. The prices at
which equity securities trade in public market are determined by
more than a balance sheet solvency test.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Asia Pacific is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Valerie U. Pascual, Marites O. Claro, Joy A. Agravante, Rousel
Elaine T. Fernandez, Julie Anne L. Toledo, and Peter A. Chapman,
Editors.
Copyright 2016. All rights reserved. ISSN: 1520-9482.
This material is copyrighted and any commercial use, resale or
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*** End of Transmission ***