/raid1/www/Hosts/bankrupt/TCRAP_Public/160519.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
Thursday, May 19, 2016, Vol. 19, No. 98
Headlines
A U S T R A L I A
ALBOX AUSTRALIA: First Creditors' Meeting Set For May 26
ARRIUM LIMITED: Administrators Put Business Up for Sale
CHALLENGER MILLENNIUM: Fitch Affirms 'Bsf' Rating on Cl. B Debt
CME CAPITAL: Court Orders Wind Up of Fundraising Companies
FIRSTMAC MORTGAGE 2-2016: S&P Prelim. Rates Class D RMBS 'BB'
IMPACT CONTRACTING: First Creditors' Meeting Set For May 26
INNOTECH SITE: First Creditors' Meeting Set For May 27
LINC ENERGY: Creditors to Vote to Wind Up Firm on May 23
MRSOCCER PTY: First Creditors' Meeting Set For May 25
QUEENSLAND NICKEL: Clive Palmer to Sue Administrators
TRESEDAR PTY: First Creditors' Meeting Slated For May 25
ULTIMATE MEDIA: First Creditors' Meeting Slated For May 25
* Aussie Auto Loan ABS Performance Weakens in Q1, Moody's Says
C H I N A
361 DEGREES: Fitch Rates LT Foreign-Currency IDR at 'BB'
361 DEGREES: S&P Assigns 'BB' Corp. Credit Rating; Outlook Stable
BEIJING CAPITAL: Moody's Lowers CFR to Ba3; Outlook Negative
EVERGREEN HOLDING: Defaults on Bond Amid Cash Shortage
H O N G K O N G
NOBLE GROUP: Fitch Cuts Long-Term Issuer Default Rating to 'BB+'
NOBLE GROUP: Moody's Confirms Ba3 CFR; Outlook Negative
I N D I A
ANANDAM TEXTILES: CRISIL Reaffirms B+ Rating on INR25MM Cash Loan
ARYA AUTOWHEELS: ICRA Suspends 'B' Rating on INR4.0cr Cash Loan
B.MELARAM: ICRA Reaffirms B+ Rating on INR7cr Cash Loan
BANMORE FOAM: CRISIL Upgrades Rating on INR50MM Loan to B+
BHADRESH TRADING: Ind-Ra Cuts Long-Term Issuer Rating to IND BB-
BIC CHEMICALS: CRISIL Assigns 'B' Rating to INR35MM Cash Loan
CARTHIC CREDITS: CARE Assigns B+ (FD) Rating to INR6.0cr Loan
CVT TECHNOLOGY: CRISIL Reaffirms 'B' Rating on INR50MM LT Loan
DAINIK SAVERA: CRISIL Ups Rating on INR56MM Term Loan to B+
DEEPAK SPINNING: CRISIL Assigns B- Rating to INR100MM Term Loan
DHANRAJ JEWELLERS: Ind-Ra Affirms IND B+' Long-Term Issuer Rating
DHARAM PAUL: CRISIL Reaffirms B+ Rating on INR120MM Cash Loan
DIPAK J. BHIVARE: CRISIL Ups Rating on INR105MM Loan to B-
DURGA AUTOMOTIVES: ICRA Assigns 'D' Rating to INR12cr Cash Loan
DYNAMIX CHAINS: CRISIL Reaffirms 'D' Rating on INR351.5MM Loan
FAIRDEAL STEELS: Ind-Ra Assigns 'IND BB' Long-Term Issuer Rating
GENUS APPARELS: CARE Ups Rating on INR8.07cr LT Loan to BB-
GTC OILFIELD: Ind-Ra Assigns Additional Term Loans 'IND BB'
GUDI EXPORTS: CRISIL Reaffirms B- Rating on INR42.5MM Loan
GUPTA EXIM: CARE Cuts Rating on INR409.30cr LT Loan to D
HUBTOWN BUS: CARE Lowers Rating on INR100cr LT Loan to D
IBC LIMITED: ICRA Suspends 'C' Rating on INR30.40cr Bank Loan
INTERNATIONAL TRADE: CARE Reaffirms B+ Rating on INR24.55cr Loan
INTERNATIONAL TRADING: CRISIL Ups Rating on INR30MM Loan to 'B'
JAGDISH PRASAD: Ind-Ra Assigns 'IND BB' Long-Term Issuer Rating
JK SURFACE: CRISIL Reaffirms B- Rating on INR90MM Overdraft Loan
KALPANA SHIVHARE: CARE Assigns B+ Rating to INR3.5cr LT Loan
KANASE AUTO: CARE Assigns B+ Rating to INR15cr LT Loan to B+
KURSEONG CARRIERS: ICRA Suspends 'D' Rating on INR15cr Loan
LODHA DEVELOPERS: Moody's Lowers CFR to B1; Outlook Negative
M. P. K. ISPAT: CRISIL Lowers Rating on INR100MM Loan to 'B'
M. P. K. METALS: CRISIL Lowers Rating on INR48MM Cash Loan to B
M.P.K. STEEL: CRISIL Lowers Rating on INR150MM Cash Loan to 'B'
MECWEL CONSTRUCTIONS: CRISIL Reaffirms B+ Rating on INR100MM Loan
MOHIT VENTURES: CRISIL Assigns 'B' Rating to INR140MM Term Loan
NARESH KUMAR: CRISIL Reaffirms B+ Rating on INR82.5MM Cash Loan
OMEGA COLORS: ICRA Suspends 'B' Rating on INR2.0cr Cash Loan
ORIENTAL PATHWAYS: CARE Lowers Rating on INR102.52cr Loan to D
ORIENTAL PATHWAYS (NAGPUR): CARE Lowers Loan Rating to D
ORION WATER: CRISIL Assigns B+ Rating to INR47.5MM Term Loan
PINCHA GRIHA: CRISIL Assigns B+ Rating to INR135.6MM Term Loan
PK THUNGAN: CRISIL Assigns B+ Rating to INR200MM Cash Loan
PLUS MEDICARE: CRISIL Assigns B+ Rating to INR350MM Term Loan
PREMIER PIPES: CRISIL Reaffirms B+ Rating on INR65MM Cash Loan
RAM SWAROOP: CARE Assigns B+ Rating to INR5.0cr LT Loan
RISING SUN: CARE Assigns 'D' Rating to INR7cr LT Loan
SANGATH INFRASTRUCTURES: CRISIL Cuts Rating on INR140MM Loan to D
SEATEL ELECTRONICS: CRISIL Assigns B- Rating to INR50MM Loan
SETMAX CERAMIC: ICRA Suspends B- Rating on INR3.5cr Cash Loan
SHREE BALAJI: CRISIL Assigns B+ Rating to INR100MM e-DFS
SHREE DATTA: CRISIL Reaffirms B+ Rating on INR95MM Cash Loan
SHREE MANIBHADRA: CRISIL Lowers Rating on INR530MM Cash Loan to D
SHREE SAI: CRISIL Assigns B+ Rating to INR150MM Loan
SHREE SHARANAM: CRISIL Lowers Rating on INR125MM Loan to B-
SHREEPATI JEWELS: ICRA Reaffirms 'D' Rating on INR100cr Loan
SHYAM GINNING: CRISIL Reaffirms 'B' Rating on INR275MM Cash Loan
SILK COTTON: CARE Assigns 'B' Rating to INR7.52cr LT Loan
SILPA PROJECTS: CRISIL Upgrades Rating on INR330MM Loan to B+
SOMENATH ENTERPRISES: CARE Assigns B+ Rating to INR9.35cr Loan
SOUHARDHA INFRA-TECH: Ind-Ra Assigns 'IND B-' LT Issuer Rating
SRI PRASANNA: CRISIL Lowers Rating on INR50MM Cash Loan to 'B'
SRI SHRIDEVI: CRISIL Reaffirms D Rating on INR660MM Term Loan
STRESCON INDUSTRIES: CRISIL Reaffirms B+ Rating on INR105MM Loan
SWAGAT HOSPITALS: CRISIL Lowers Rating on INR250MM Loan to B-
T.R. AGRO: CRISIL Puts 'B' Rating on INR205MM Loan
TIMES STEEL: CARE Ups Rating on INR22cr LT Loan to BB-
UBC-KIPL-GIL-JV: CRISIL Assigns B+ Rating to INR35MM Cash Loan
VARADHA STEELS: ICRA Suspends B- Rating on INR2.0cr Loan
VICTORIAN LABEL: CRISIL Reaffirms B+ Rating on INR42.1MM Loan
VIJAY IRON: CRISIL Reaffirms 'B' Rating on INR80MM Cash Loan
VINIT FABRICS: Ind-Ra Suspends 'IND B' Long-Term Issuer Rating
VISHAL AUTOMOBILES: CRISIL Assigns B+ Rating to INR49.5MM Loan
YESKAY CONSTRUCTIONS: CRISIL Reaffirms B+ Rating on INR70MM Loan
J A P A N
CAFES 1 TRUST: Moody's Puts Class C-1 Cert's Ba3 Rating on Review
KAWASAKI KISEN: Moody's Withdraws Ba3 CFR for Business Reasons
MITSUBISHI MOTORS: President to Quit Over Fuel Economy Scandal
SHARP CORP: S&P Raises CCR to 'CCC+' & Keeps on CreditWatch Pos.
TAKATA CORP: Hawaii Sues Firm Over Defective Air Bags
TAKATA CORP: Recall Cost Issues Still Unresolved
S O U T H K O R E A
DONGBU GROUP: Chief Faces Probe Over Alleged Unfair Stock Trading
* KKR Not Eyeing Ailing Sectors in Korea, CEO Says
T H A I L A N D
KRUNG THAI: Fitch Affirms 'B' Int'l. Rating for Tier 1 Securities
- - - - -
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A U S T R A L I A
=================
ALBOX AUSTRALIA: First Creditors' Meeting Set For May 26
--------------------------------------------------------
Timothy James Clifton and Simon Richard Miller of Clifton Hall
were appointed as administrators of Albox Australia Pty Ltd on
May 16, 2016.
A first meeting of the creditors of the Company will be held at
Clifton Hall, Level 3, 431 King William Street, in Adelaide,
South Australia, on May 26, 2016, at 10:00 a.m.
ARRIUM LIMITED: Administrators Put Business Up for Sale
-------------------------------------------------------
Cliff Sanderson at Dissolve.com.au reports that the Whyalla
steelworks of Arrium Limited is up for sale.
The company is currently under the control of administrators
Bryan Webster, Martin Madden, Cassandra Mathews and Mark Mentha
of KordaMentha. They were appointed on April 7, 2016, says the
report.
Arrium entered administration in April reportedly due to
sustained low commodity prices, Dissolve.com.au notes. The
administrators want to restructure Arrium. The company's major
businesses are Arrium Mining Consumables, Arrium Steel and Arrium
Mining.
The steel business is the only steel long products manufacturer
in Australia that has around 2.5 million tonnes per year of
steel-making capacity. Also, it is the top steel distributor and
supplier of reinforcing steel in the country.
CHALLENGER MILLENNIUM: Fitch Affirms 'Bsf' Rating on Cl. B Debt
---------------------------------------------------------------
Fitch Ratings has downgraded five and affirmed 10 classes of
notes from four transactions of the Interstar Millennium Series
and Challenger Millennium Series. These transactions are backed
by pools of Australian conforming residential mortgages
originated through a network of mortgage originators and brokers
under the Challenger Millennium Trust and Interstar Millennium
Trust Securitisation programmes. A full list of rating actions
can be found at the end of this commentary.
KEY RATING DRIVERS
The downgrades of the Class AB notes of Challenger Millennium
Series 2007-2L, the class AB notes of Interstar Millennium Series
2005-2L Trust and the class A1, A2 and AB notes of Interstar
Millennium Series 2006-2G Trust reflect the pro rata pay
structure throughout the majority of the life of the transactions
that leaves downgraded notes exposed to tail risk as the
transaction gets smaller. Payment priority in these transactions
reverts to sequential paydown if there are carryover charge-offs
or 60+ days arrears are greater than 5% of the pool balance.
Fitch makes the assumption in all structured finance ratings that
no clean-up call options are exercised unless originators are
obligated to do so, which is not the case in the Interstar and
Challenger transactions. In recent years Challenger has chosen
not to exercise clean-up call options.
The 60+ days arrears for Interstar 2005-2L and Challenger 2007-2L
are 4.16% and 4.36% respectively as of 31 March 2016. While the
class AB notes in these two transactions are exposed to
concentration risk due to the current pro-rata pay structure,
there is a higher likelihood that the transactions will revert to
sequential paydown with further portfolio deterioration or with
continued paydown of the portfolio, which would mean that the
arrears trigger would be met. The Interstar 2005-2L portfolio
consists of 87.0% low-documentation mortgages and 91.3% for
Challenger 2007-2L. Low-doc mortgages typically perform worse
than full-documentation loans. The current pool factors for
Interstar 2005-L and Challenger 2007-2L are 5.8% and 10.7%
respectively.
Interstar 2006-2G's portfolio is 84.5% full-documentation loans,
and as a result, the credit enhancement was lower at closing
compared to the Interstar 2005-2L and Challenger 2007-2L
transactions. This feature, in conjunction with the credit
enhancement level required before pro-rata amortisation could
start being lower than that for Interstar 2005-2L and Challenger
2007-2L, results in the transaction providing less credit
enhancement to support the class A1 and A2 notes. The low
absolute level of credit enhancement exposes the class A1 and A2
notes to some degree of concentration risk at the tail of the
transaction. As of March 2016, the 60+ days arrears was 2.15%,
which is well below the trigger of 5% at which the transaction
would be required to revert to sequential paydown.
In its analysis, Fitch modelled various default distributions and
interest rate stresses, as well as prepayment speeds. In running
the scenarios, for Interstar 2006-2G, Fitch observed that most
scenarios passed 'AAsf'; however, the model did result in one
minor (less than 2% unpaid principal) scenario failure for the
class A1 and class A2 notes. Fitch determined that the small
amount of discrepancy caused by the severe stress on a number of
variables simultaneously is within the tolerance level of the
ratings assigned.
The Challenger 2007-1E, Interstar 2005-2L and Interstar 2006-2G
transactions are exposed to foreign-currency risk in the event
that the Libor (Challenger 2007-1E, Interstar 2005-2L and
Interstar 2006-2G), Euribor (Challenger 2007-1E) or GBP Libor
(Challenger 2007-1E) turn negative and the affected trust has to
make additional payments to the currency swap provider in the
relevant foreign currency. Excess spread is likely to be
sufficient to cover any payments payable by the trust and as such
this risk has not resulted in any of the negative ratings actions
taken at this time. Since closing, the trusts have had a positive
coupon.
As of 31 March 2016, the 30+ days arrears for Challenger 2007-1E
and Interstar 2006-2G were 2.69% and 3.11% respectively, above
Fitch's 4Q15 Dinkum Index of 0.95%. As of 31 March 2016, 30+ day
arrears levels for Challenger 2007-2L and Interstar 2005-2L were
5.26% and 5.59% respectively, below Fitch's most recent low-doc
RMBS Index of 7.29%.
All loans in the underlying portfolios have 100% lenders'
mortgage insurance (LMI) in place, provided mainly by QBE
Lenders' Mortgage Insurance Limited (Insurer Financial Strength
Rating: AA-/Stable) and Genworth Financial Mortgage Insurance Pty
Limited (Insurer Financial Strength Rating: A+/Stable). Losses
have remained within expectations. At end-March 2016, LMI covered
99.2% of the claims submitted from the Challenger 2007-2L
transaction while LMI covered between 94.9% and 97.2% of LMI
claims submitted from the other three transactions. All losses
that were not covered by LMI have been covered by excess spread
or the residual unit holders.
The affirmations of the ten RMBS classes reflect Fitch's view
that available credit enhancement supports the notes' current
ratings, the agency's expectations of Australia's economic
conditions and that the credit quality and performance of the
loans in the collateral pools have remained within the agency's
expectations.
Challenger Millenium Series 2007-1E does not have the same
structural issue that exposes senior notes to tail risk as it
pays sequentially for the life of the transaction.
VARIATIONS FROM CRITERIA
"In our analysis of foreign-currency exposure as a result of
potential negative Libor, Euribor and GBP Libor, Fitch assumed
the coupons due on the notes are floored at zero and that in a
'AAAsf' stress, each of these base rates go to -0.65% for five
years and for 55 months at 'AAsf'. The foreign-currency path
assumption for AUD/GBP, AUD/$US and AUD/EUR used for the class A
notes was year 1: +/-60%, year 2: +/-80%, year 3: +/-100%, year 4
and onwards: +/-120%. For the class B notes in Challenger 2007-
1E, the path assumption was year 1: +/-60%, year 2: +/-60%, year
3: +/-60%, year 4 and onwards: +/-60%."
The criteria variation from the "Criteria for Interest Rate
Stresses in Structured Finance and Covered Bonds" arises from
stressing the impact of negative interest rates on the
transactions and the criteria variation from the "APAC
Residential Mortgage Criteria" arises from using the foreign-
currency path assumptions for payments payable by the trust in
the case of negative interest rates. There is no rating impact on
the transactions as a result of the criteria variations.
RATING SENSITIVITIES
Credit enhancement levels for the class A notes across the
transactions can support many multiples of the arrears levels
reported in the latest investor reports. The ratings are not
expected to be affected by modest changes in performance.
The class A notes of Challenger 2007-2L and Interstar 2005-2L can
withstand additional foreclosure of 33.8% and 47.7% respectively
at their 'AAAsf' loss severity. The class AB notes can withstand
additional foreclosure of 81.8% and 79.4% respectively at the
'Asf' loss severity. The class A and AB notes of Challenger 2007-
2L and class AB notes of Interstar 2005-2L are LMI independent at
their respective ratings. All other classes are LMI dependent.
At the 'AAsf' loss severity, the class A notes of Interstar 2006-
2G can withstand additional foreclosure of 74.3%. The class AB
notes can withstand additional foreclosure of 96.7% at 'BBBsf'
loss severity. Both the class A and AB notes are LMI independent
at their respective rating.
The class A and AB notes of Challenger 2007-1E can withstand an
additional foreclosure of 100% at their 'AAAsf' loss severity.
The class A and AB notes are LMI independent.
Class B notes for all transactions would be downgraded if there
was a significant reduction in payment of LMI claims and an
unexpected deterioration in delinquencies, defaults and losses.
All class B notes are LMI dependent and there are currently no
charge-offs to date. Fitch's analysis excludes credit to excess
spread.
DUE DILIGENCE USAGE
No third party due diligence was provided or reviewed in relation
to this rating action.
DATA ADEQUACY
Fitch conducted a file review of 10 sample loan files focusing on
the underwriting procedures conducted by Challenger Mortgage
Management Pty Ltd compared to its credit policy at the time of
underwriting. Fitch has checked the consistency and plausibility
of the information and no material discrepancies were noted that
would impact Fitch's rating analysis.
A comparison of the transaction's representations, warranties and
enforcement mechanisms (RW&Es) to those of typical RW&Es for this
asset class is available by accessing the reports and links given
under Related Research below.
The rating actions are as follows (note balances as end-March
2016):
Interstar Millennium Series 2005-2L (Interstar 2005-2L):
$US26.9 million Class A1 (ISIN US46071TAA16) affirmed at 'AAAsf';
Outlook Stable
AUD53.8 million Class A2 (ISIN AU300INTC012) affirmed at 'AAAsf';
Outlook Stable
AUD8.5 million Class AB (ISIN AU300INTC020) downgraded to 'Asf'
from 'AA+sf'; Outlook Stable
AUD4.6 million Class B (ISIN AU300INTC038) affirmed at 'Bsf';
Outlook Stable
Interstar Millennium Series 2006-2G Trust (Interstar 2006-2G):
$US54.3 million Class A1 (ISIN USQ49677AA73) downgraded to 'AAsf'
from 'AAAsf'; Outlook Stable
$US49.8 million Class A2 (ISIN USQ49677AB56) downgraded to 'AAsf'
from 'AAAsf'; Outlook Stable
AUD6.8 million Class AB (ISIN AU0000INBHC6) downgraded to 'BBBsf'
from 'AAAsf'; Outlook Stable
AUD8.0 million Class B (ISIN AU0000INBHD4) affirmed at 'Bsf';
Outlook Stable
Challenger Millennium Series 2007-1E (Challenger 2007-1E)
$US40.4 million Class A2a (ISIN XS0280784637) affirmed at
'AAAsf'; Outlook Stable
GBP25.0 million Class A2b (ISIN XS0280786335) affirmed at
'AAAsf'; Outlook Stable
EUR31.0 million Class AB (ISIN XS0280787226) affirmed at 'AAAsf';
Outlook Stable
EUR32.5 million Class B (ISIN XS0280788976) affirmed at 'Bsf';
Outlook Stable
Challenger Millennium Series 2007-2L (Challenger 2007-2L)
AUD84.3 million Class A (ISIN AU0000CHUHA5) affirmed at 'AAAsf';
Outlook Stable
AUD7.0 million Class AB (ISIN AU0000CHUHB3) downgraded to 'Asf'
from 'AAAsf'; Outlook Stable
AUD5.3 million Class B (ISIN AU0000CHUHC1) affirmed at 'Bsf';
Outlook Stable
CME CAPITAL: Court Orders Wind Up of Fundraising Companies
----------------------------------------------------------
Following an application by the Australian Securities and
Investment Commission, the Federal Court of Australia has ordered
the wind up of CME Capital Australia Pty Ltd, Boston Pacific
Capital Pty Ltd, Boston Pacific Capital Australia Pty Ltd, GKN
Capital Pty Ltd and IMCG Pty Ltd.
In doing so, the Court also ordered that Mr Ross Blakeley and Mr
Quentin Olde of FTI Consulting be appointed as joint and several
liquidators of the companies.
Justice Moshinsky ordered that the companies be wound up on just
and equitable grounds given that there was a justifiable lack of
confidence in the management of the companies, that the companies
were insolvent, their records were in an unsatisfactory state and
that there had been a number of possible contraventions of the
Corporations Act 2001.
ASIC's investigation into the activities of the companies is
continuing.
CME Capital Australia Pty Ltd, Boston Pacific Capital Australia
Pty Ltd and GKN Capital Pty Ltd operated websites through which
investments were invited from the public. According to the
websites, the companies -- none of which hold an Australian
financial services licence -- issued promissory notes in exchange
for investments.
Under s727 of the Corporations Act 2001, an offer of securities
(which includes promissory notes) must not be made unless a
disclosure document has been lodged with ASIC. An exception to
this is when the offer is made to a professional investor, as
defined by s9 of the Act, or has (or controls) gross assets of
$10 million.
Mr Petrou is the sole director of CME Capital Australia Pty Ltd,
Boston Pacific Capital Australia Pty Ltd, Boston Pacific Capital
Pty Ltd and GKN Pty Ltd which operate from a residence in
Rowville, Victoria. Mr Grujicic is the sole director and
shareholder of IMCG Pty Ltd, with the company operating from his
residence in Hallam, Victoria.
On Nov. 17, 2015, ASIC obtained Court orders that froze the
assets of the companies and restrained Mr Petrou and Mr Grujicic
from leaving Australia.
In December 2015, ASIC applied to the Federal Court of Australia
to wind up the companies on just and equitable grounds.
In December 2015, the Federal Court of Australia ordered the
appointment of Ross Blakeley and Quentin Olde of FTI Consulting
as joint and several provisional liquidators.
FIRSTMAC MORTGAGE 2-2016: S&P Prelim. Rates Class D RMBS 'BB'
-------------------------------------------------------------
S&P Global Ratings assigned its preliminary ratings to six of the
seven classes of prime residential mortgage-backed securities
(RMBS) to be issued by Firstmac Fiduciary Services Pty Ltd. as
trustee for Firstmac Mortgage Funding Trust No.4 Series 2-2016.
The preliminary ratings reflect:
-- S&P's view of the credit risk of the underlying collateral
portfolio, including the fact that this is a closed
portfolio, which means no further loans will be assigned to
the trust after the closing date.
-- S&P's view that the credit support is sufficient to
withstand the stresses S&P applies. This credit support
comprises lenders' mortgage insurance to 16.7% of the
portfolio, which covers 100% of the face value of these
loans, accrued interest, and reasonable costs of
enforcement, as well as note subordination for all rated
notes.
-- S&P's expectation that the various mechanisms to support
liquidity within the transaction, including an amortizing
liquidity reserve equal to 1.2% of the invested amount of
all notes that is to be provided through note overissuance,
principal draws, a spread reserve that builds from
available excess spread, and 24 months' timely payment
cover on approximately 16.7% of loans in the portfolio, are
sufficient under S&P's stress assumptions to ensure timely
payment of interest.
-- The extraordinary expense reserve of A$150,000, funded from
day one by Firstmac Ltd., available to meet extraordinary
expenses. The reserve will be topped up via excess spread
if drawn.
-- S&P's view of the underwriting standards and centralized
approval processes of the originator, Firstmac Ltd.,
together with S&P's view on the servicing standards of
Firstmac Ltd. as the servicer of the loans.
-- The fixed-to-floating interest-rate swap provided by
Westpac Banking Corp. to hedge the mismatch between
receipts from fixed-rate mortgage loans and the
variable-rate RMBS.
A copy of S&P Global Ratings' complete report for Firstmac
Mortgage Funding Trust No.4 Series 2-2016 can be found on
RatingsDirect, S&P Global Ratings' Web-based credit analysis
system, at:
http://www.globalcreditportal.com
The issuer has informed Standard & Poor's (Australia) Pty Ltd.
that the issuer will be publicly disclosing all relevant
information about the structured finance instruments that are
subject to this rating report.
PRELIMINARY RATINGS ASSIGNED
Class Rating Amount (A$ mil.)
A-1a AAA (sf) 277.50
A-1b AAA (sf) 20.00
A-2 AAA (sf) 24.50
B AA (sf) 18.20
C A (sf) 4.55
D BB (sf) 3.85
E NR 1.40
NR--Not rated.
IMPACT CONTRACTING: First Creditors' Meeting Set For May 26
-----------------------------------------------------------
Justin Denis Walsh and Adams Pauls Nikitins of Ernst & Young were
appointed as administrators of Impact Contracting Pty Ltd on May
17, 2016.
A first meeting of the creditors of the Company will be held at
Level 51, 111 Eagle St, in Brisbane, Queensland, on May 26, 2016,
at 12:00 p.m.
INNOTECH SITE: First Creditors' Meeting Set For May 27
------------------------------------------------------
Wayne Rushton and Dermott McVeigh of Ferrier Hodgson were
appointed as administrators of Innotech Site Services Pty Ltd on
May 17, 2016.
A first meeting of the creditors of the Company will be held at
QV1 Theatrette, Level 2, 250 St Georges Terrace, in Perth, on
May 27, 2016, at 11:00 a.m.
LINC ENERGY: Creditors to Vote to Wind Up Firm on May 23
--------------------------------------------------------
Anthony Marx at The Courier-Mail reports that wealthy Brisbane
bizoid Peter Bond has got to be a tad nervous right now. There's
no estimate of how much creditors might claw back from the ruins
of Linc Energy, the company he founded 20 years ago.
That means there's a very good chance Mr. Bond's 31.6% stake --
once valued at many millions -- is worthless, especially if
creditors vote to wind up the stricken company at their meeting
next on May 23.
The bean counters at Credit Suisse, which held a 12.7% stake in
the outfit, are also feeling the pain, the report says.
The Courier-Mail relates that a detailed report released by
administrators at PPB Advisory on May 13 revealed Linc collapsed
with AUD289.3 million owed to 155 creditors, the vast majority of
whom are unsecured.
It also showed the dire state of the company over the past four
financial years, The Courier-Mail notes.
Since 2013, the company amassed a staggering AUD518 million in
losses and generated just AUD11 million in revenue, with
overheads funded by the sale of assets, according to The Courier-
Mail.
It wrote off more than AUD320 million since June last year and
had just AUD1.4 million cash in the bank when it appointed PPB
last month.
Linc is still owed AUD84.7 million from eight of its subsidiaries
but there's virtually no chance of recovering that money,
according to PPB, The Courier-Mail relays.
The Courier-Mail notes that like many resources firms doing it
tough, Linc fell victim to plunging oil prices. But the final
nail in the proverbial coffin was the unwillingness of investors
to recapitalise and restructure the company once it became clear
it faced a costly legal battle over alleged environmental
contamination near Chinchilla. According to the report, PPB has
recommended that Linc be wound up but creditors could vote to
progress talks with parties looking to buy assets and that may
include a deed of company arrangement.
While no deeds of proposal have emerged so far, 20 parties struck
confidentiality agreements with PPB, says The Courier-Mail.
As reported in the Troubled Company Reporter-Asia Pacific on
April 19, 2016, Grant Dene Sparks, Stephen Longley and Martin
Ford of PPB Advisory were appointed as administrators of Linc
Energy Limited on April 15, 2016.
MRSOCCER PTY: First Creditors' Meeting Set For May 25
-----------------------------------------------------
Frank Lo Pilato of RSM Australia Partners was appointed as
administrator of MrSoccer Pty Ltd on May 13, 2016.
A first meeting of the creditors of the Company will be held at
RSM Australia Partners, Equinox Building 4, Level 2, 70 Kent
Street, in Deakin, on May 25, 2016, at 3:00 p.m.
QUEENSLAND NICKEL: Clive Palmer to Sue Administrators
-----------------------------------------------------
Matthew Killoran at The Courier-Mail reports that embattled
businessman Clive Palmer is threatening to sue Queensland
Nickel's administrators he had appointed for AUD1.2 billion in
alleged damages.
In a statement released on May 17 he said he and two of his
companies would serve a statement of claim "within weeks" on FTI
Consulting.
FTI went from being administrators to liquidators at the second
creditors meeting in April, after issuing a damning report into
Queensland Nickel's finances, The Courier-Mail recalls.
According to the report, liquidators and Mr Palmer have a
dispute, already before the courts, with the businessman arguing
FTI should not be able to touch QN's assets, which he claims
belong to his joint venture.
The Courier-Mail relates that Mr Palmer makes accusations of a
breach of trust, conflict of interest and even "criminal
actions", but does not specify what these are alleged to be.
The report says Mr Palmer accused the company of causing "an
unlawful breach of trust and contract disregarding the lawful
rights of joint ventures to close the refinery and dismiss the
workforce causing social upheaval" to fill its own pockets."
TRESEDAR PTY: First Creditors' Meeting Slated For May 25
--------------------------------------------------------
Gavin Moss of Chifley Advisory was appointed as administrator of
Tresedar Pty Ltd on May 13, 2016.
A first meeting of the creditors of the Company will be held at
the Boardroom of Chifley Advisory, Suite 3.04, Level 3, 39 Martin
Place, in Sydney, on May 25, 2016, at 11:00 a.m.
ULTIMATE MEDIA: First Creditors' Meeting Slated For May 25
----------------------------------------------------------
Gavin Moss of Chifley Advisory was appointed as administrator of
Ultimate Media Group Pty. Ltd., trading as "Street Smart Media",
on May 13, 2016.
A first meeting of the creditors of the Company will be held at
the Boardroom of Servcorp, Level 56, MLC Centre, 19 Martin Place,
in Sydney, on May 25, 2016, at 9:30 a.m.
* Aussie Auto Loan ABS Performance Weakens in Q1, Moody's Says
--------------------------------------------------------------
Moody's Investors Service says that the performance of Australian
auto loan asset-backed securities (ABS) deteriorated in the three
months to March 31, 2016.
"In particular, 30-plus day delinquencies increased to 1.50% at
March 31, 2016, from 1.19% at Dec. 31, 2015," says Natsumi
Matsuda, a Moody's Analyst.
"We typically see higher delinquencies in Q1, after the end-of-
year holiday season," adds Matsuda. "The natural amortization of
auto ABS portfolios has also had a large impact on the arrears
rates of some older and smaller deals."
Matsuda was speaking on the release of Moody's quarterly
Australian auto ABS Indices for the three months between January
and March 2016 (Q1 2016).
Moody's says that delinquencies also increased year-on-year,
rising from 1.19% at March 31, 2015.
Macquarie Leasing Pty Limited's SMART transactions demonstrated
the lowest weighted-average 30-plus day delinquency rate of 0.72%
at March 31, 2016. But this result was up from 0.65% at Dec. 31,
2015, and 0.69% at March 31, 2015.
The weighted-average 30-plus day delinquency rate of St George
Bank Limited's Crusade transactions increased to 3.23% at
March 31, 2016, up from 2.45% at Dec. 31, 2015, and 2.22% at
March 31, 2015. One of the reasons for the increase is the fact
that some operational challenges impacted the collection process.
The servicer expects these issues to be addressed during the
second half of 2016.
The weighted-average 30-plus day delinquency rate of BOQ
Equipment Finance Limited's REDS transactions increased to 1.71%
at March 31, 2016, up from 1.22% at Dec. 31, 2015, and 1.30% at
March 31, 2015.
Despite the increase in delinquencies, default and loss levels
remained low. At March 31, 2016, the 2012 vintage -- the most
seasoned of outstanding pools -- had a cumulative default rate of
1.79% and a net loss rate of 0.86%.
Recovery rates for all vintages remained stable, at around the
45%-50% range.
Moody's expects delinquencies and defaults to continue to rise
throughout the remainder of 2016 because of Australia's below
trend GDP growth. In particular, ABS portfolios with exposure to
commercial loans and leases in Western Australia and Queensland
will come under the most pressure, owing to slowing business
conditions in these states.
Moody's forecast is for Australia's GDP to grow by 2.5% in 2016,
below the long-term average of 3.5%. Weaker commodity prices and
slower demand from China continue to weigh on Australian
investments and some commodities exports, with iron ore and coal
producers and resource-oriented states coming under particular
strain.
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361 DEGREES: Fitch Rates LT Foreign-Currency IDR at 'BB'
--------------------------------------------------------
Fitch Ratings has assigned a Long-Term Foreign-Currency Issuer
Default Rating (IDR) of 'BB' and a senior unsecured rating of
'BB' to Chinese sportswear brand 361 Degrees International
Limited (361 Degrees). The Outlook for the IDR is Stable. Fitch
has also assigned 361 Degrees' proposed US dollar-denominated
senior notes an expected rating of 'BB(EXP)'.
The ratings are supported by 361 Degrees' stable margins and
working capital following the industry downturn in 2012-2013, and
its sustained net cash position. Furthermore, the sportswear
market in China continues to expand, driven by rising incomes and
consumer spending. However, 361 Degrees' small scale and market
share in an industry characterised by limited brand recognition
beyond global foreign brands constrains its rating.
The senior notes are rated at the same level as 361 Degrees'
senior unsecured rating as they represent direct, unconditional,
unsecured and unsubordinated obligations of the company. The
final rating is subject to the receipt of final documentation
conforming to information already received.
KEY RATING DRIVERS
Robust Operations: 361 Degrees' stable market share and healthy
EBITDA margins are underpinned by its strong production
capabilities and ongoing efficiency gains, as well as a extensive
distribution network with more than 7,000 outlets. In addition,
361 Degrees' flexible pricing strategy and inventory monitoring
systems allow it to adapt quickly to changes in market
conditions. The company has maintained a reasonable inventory
level of 4.0x-4.2x average monthly sales, and has reported 8%-18%
order growth in the seven quarters up to June 2016.
Resilience Following Downturn: The sportswear industry in China
faced a significant downturn in 2012-2013, as overproduction and
weaker-than-expected demand led to an inventory glut from which
the industry took more than two years to recover. The slump -
2015 revenue was still below the level achieved in 2012 -
prompted 361 Degrees to enhance inventory monitoring and order
management systems, which appears to have resulted in more stable
and sustainable growth.
Bright Industry Growth Prospects: Fitch expects China's
sportswear industry to benefit from rising disposable incomes,
increasing health-consciousness and supportive policies. The
sales value of sportswear in China is projected to grow at a
compound annual growth rate (CAGR) of 6.4% in 2016-2018, versus
6.2% in 2008-2013, according to Euromonitor International. 361
Degrees' growth has been in line with the industry average in the
past few years.
Competitive Industry, Low Differentiation: China's sportswear
industry is highly price-competitive. The industry is led by Nike
and Adidas, together accounting for 37% of the market. The top
five domestic brands have a total market share of 28%, and there
is limited pricing power due to low product differentiation and
brand recognition. 361 Degrees is the fourth-largest among them,
with a 4% market share over the past eight years.
Healthy Financial Profile: 361 Degrees has a record of stable
recurring EBITDA margins and operating cash flow, and has
maintained a net cash position for the past four years. Fitch
expects the company to generate positive FCF in 2016-2018, driven
by reduced capex requirements and prudent working-capital
management.
KEY ASSUMPTIONS
Fitch's key assumptions within the rating case for 361 Degrees
include
-- EBITDA margin in the range of 16%-17% in 2016-2019
-- Capital expenditure of CNY200 million in 2016 and CNY150
million thereafter
-- Receivable days and inventory days similar to the 2015 levels
RATING SENSITIVITIES
Positive: Developments that may, individually or collectively,
lead to positive rating action include:
-- No positive rating action will be considered until 361
Degrees significantly boosts its operating scale and market
share.
Negative: Developments that may, individually or collectively,
lead to negative rating action include:
-- EBITDA margin sustained below 15%
-- Sustained negative FCF
-- Failure to sustain net cash position
-- Trade receivables (including bill receivables) days sustained
above 190 days and/or channel inventory sustained above 4.5x
average monthly sales
361 DEGREES: S&P Assigns 'BB' Corp. Credit Rating; Outlook Stable
-----------------------------------------------------------------
S&P Global Ratings said that it had assigned its 'BB' long-term
corporate credit rating and 'cnBBB-' long-term Greater China
regional scale rating to 361 Degrees International Ltd. The
outlook on the long-term corporate credit rating is stable.
S&P also assigned its 'BB' long-term issue rating and 'cnBBB-'
long-term Greater China regional scale rating to the company's
proposed issue of U.S. dollar-denominated senior unsecured notes.
The issue ratings are subject to S&P's review of the final
issuance documentation. 361 Degrees is a China-based sportswear
manufacturer.
"The ratings on 361 Degrees reflect the company's small scale,
limited product differentiation and pricing power, and
substantial exposure to intense competition in China's sportswear
industry," said S&P Global Ratings credit analyst Sophie Lin.
"361 Degrees' good brand awareness, extensive distribution
network across China, high profit margin, and good operating cash
flow temper the risks."
S&P expects 361 Degrees' scale to remain small and revenue
diversity to stay limited as compared to global peers over the
next 12-24 months. Although the company is actively diversifying
its business by expanding overseas and cooperating with foreign
sportswear brands, in S&P's view, these initiatives are in the
early stage and they may take time to generate meaningful profit
and cash flow.
In S&P's view, the lack of product differentiation and pricing
power will constrain 361 Degrees' competitive position, given
intense competition in the fragmented sportswear market in China.
The company offers higher wholesale price discounts and longer
account receivable days to distributors than its major domestic
peers, in order to maintain long-term distributor relationships
and grow sales.
S&P anticipates continued intense competition in the sportswear
market in China, with global brands dominating the higher-tier
cities and domestic players competing in the lower-tier cities.
S&P believes global brands' plans to gradually penetrate into
lower-tier cities will intensify competition for domestic
players, including 361 Degrees. Nevertheless, S&P believes 361
Degrees will benefit from the good growth prospect of the Chinese
sportswear industry.
S&P expects 361 Degrees to maintain its high brand awareness and
market position over the next 12-24 months. The company's
extensive distribution network across China and active
sponsorship for sports events and sports stars will continue to
underpin this strength.
361 Degrees' good profit margin is a key rating strength, in
S&P's view. The company's vertically integrated supply chain,
good cost control, and lower marketing investment than global
peers support its profitability. S&P believes that 361 Degrees'
effort to upgrade its product mix to higher-margin functional
sportswear products will further enhance its profitability. S&P
assess the company's business risk profile as weak based on the
above-mentioned factors.
S&P believes that 361 Degrees will continue to generate good
operating cash flow and sustain its debt to EBITDA ratio at
comfortably below 3x over the next 12 months. The company's
gradual improvement in account receivable turnover, efficient
inventory management, and disciplined capital spending underpin
S&P's estimate. However, 361 Degrees' relatively low interest
coverage tempers its cash flow adequacy. As a result, S&P assess
the company's financial risk profile as significant.
S&P views 361 Degrees' overall competitive position at the
stronger end of the weak business risk profile category and its
credit metrics are very solid for the rating. S&P reflects this
relative strength in its positive comparable rating analysis
assessment, which results in a one-notch rating uplift from the
company's anchor score of 'bb-'.
S&P has equalized the issue ratings on the proposed notes with
the corporate credit ratings on 361 Degrees, reflecting S&P's
view of limited subordination risk.
"The stable outlook reflects our expectation that 361 Degrees
will maintain its market position in the sportswear industry in
China and good operating cash flow over the next 12 months,
despite intense competition," said Ms. Lin. "We also expect the
company to improve its working capital management and remain
disciplined with capital spending."
S&P could lower the rating if 361 Degrees' debt-to-EBITDA ratio
exceeds 3x on a sustained basis. This could happen if the
company's sales growth or profit margin is materially below S&P's
expectation, due to intense competition or a material markdown on
inventories or account receivables. This could also happen if
the company undertakes more aggressive debt-funded investments or
shareholder-friendly capital management than S&P expects.
S&P could raise the rating if 361 Degrees improves its debt-to-
EBITDA ratio to less than 2x on a sustained basis. This could
happen if the company materially improves its profit margin and
operating cash flow by continuously upgrading its product mix
toward higher margin sportswear products. This could also happen
if the company uses cash to pay down its debts.
BEIJING CAPITAL: Moody's Lowers CFR to Ba3; Outlook Negative
------------------------------------------------------------
Moody's Investors Service has downgraded these ratings of Beijing
Capital Land Limited and its subsidiaries:
1. The corporate family rating of Beijing Capital Land Limited
to Ba3 from Ba2;
2. The corporate family rating of International Financial
Center Property Ltd. (IFC) to B1 from Ba3;
3. The backed senior unsecured debt rating on the bonds issued
by Central Plaza Development Ltd. (CPD) to B1 from Ba3; and
4. The backed senior unsecured rating on the medium-term note
(MTN) program of CPD to provisional (P)B1 from provisional
(P)Ba3.
The outlook on all ratings is negative.
This concludes the ratings review initiated on Feb. 29, 2016.
Both the bonds and MTN program of CPD are guaranteed by IFC.
The bonds and MTN program are also supported by Deeds of Equity
Interest Purchase Undertaking and Keepwell Deeds between Beijing
Capital Land Limited, CPD, IFC and the bond trustee. Both CPD
and IFC are wholly-owned subsidiaries of Beijing Capital Land
Limited.
Additionally, Beijing Capital Group Co., Ltd. (Capital Group,
Baa3 negative), the parent of Beijing Capital Land Limited,
provides Letters of Support in favor of Beijing Capital Land
Limited and IFC in connection with both the bonds and the MTN
program.
RATINGS RATIONALE
"The rating downgrade of Beijing Capital Land Limited reflects
its weakened credit profile due to its high debt leverage and
contracted profit margins," says Kaven Tsang, a Moody's Vice
President and Senior Credit Officer.
Beijing Capital Land Limited's Ba3 corporate family rating
reflects its standalone credit strength and a two-notch rating
uplift, based on expected strong financial and operating support
from its parent, Capital Group.
The weakened standalone credit strength is primarily due to the
company's strategy to reposition its business to focus on major
cities in China, including Beijing, Shanghai and Tianjin, over
the last 1-2 years.
This strategy has significantly increased the company's funding
needs to purchase new land in these major cities.
At the same time, the company has aggressively cut prices to
clear its inventories in low tier cities, thereby pressuring its
profit margin and interest coverage position.
As a result, its EBIT/interest dropped to 1.3x in 2015 from 1.7x
in 2014.
While the new strategy has supported the company's strong growth
in contracted sales to RMB32.5 billion (+31% year on year) in
2015 and allows the company to benefit from rising property
prices in major cities, high land costs in major cities will
constrain the improvement in the company's profit margins.
Additionally, the company's funding needs will remain high in the
next 1-2 years because it will continue to buy land in major
cities to support its growth plan.
Therefore, Beijing Capital Land Limited's debt leverage --
measured by revenue/adjusted debt -- will stay weak at around 30%
in the next 1-2 years, compared to 26.3% as of Dec. 31, 2015.
Similarly, its EBIT/interest will stay low at around 1.5x in the
coming 1-2 years.
Despite the slight improvement, these ratios position the
company's standalone credit profile at the mid-B level.
The two-notch parental uplift continues to reflect Moody's belief
that Capital Group will provide funding support to Beijing
Capital Land Limited in a distressed situation given its
strategic and economic importance as the group's core property
arm.
Additionally, Capital Group has managerial control over the
company and a track record of financially supporting Beijing
Capital Land Limited. Such support includes providing guarantees
that cover the repayment of BJCL's onshore debt, and a letter of
support covering its offshore bond.
The negative outlook reflects (1) the company's high debt
leverage; and (2) the weakened ability of Capital Group to
provide support to Beijing Capital Land Limited.
A ratings upgrade is unlikely in the near term, given the
negative outlook and the company's high debt leverage.
However, the outlook could be revised to stable if: (1) the
outlook on Capital Group's ratings returns to stable; (2) Beijing
Capital Land Limited demonstrates a track record of sustainable
contracted sales growth; (3) it maintains a disciplined land
acquisition plan; and (4) it improves its financial profile with
EBIT/interest rising above 1.5x-2.0x on a sustained basis.
Downward rating pressure could emerge if Beijing Capital Land
Limited shows: (1) weak contracted sales; (2) a weak liquidity
position as evidenced by cash holdings falling substantially
below the short-term debt level; or (3) weak financial metrics
whereby EBIT/interest coverage falls below 1x-1.5x on a sustained
basis.
Any evidence of weakening support from the Capital Group will
also pressure Beijing Capital Land Limited's rating.
For IFC, its corporate family rating is downgraded to B1 from Ba3
due to the weakened ability of Beijing Capital Land Limited to
provide support after its downgrade. The negative outlook also
mirrors the outlook of Beijing Capital Land Limited.
IFC's B1 corporate family rating reflects its standalone credit
strength and a one-notch rating uplift, based on expected
financial and operating support from its parent, Beijing Capital
Land Limited.
IFC's standalone credit strength reflects its small-scale
operation, thin capital base, and weak projected EBIT/interest of
around 1.5x.
Moody's assessment of a high level of support from Beijing
Capital Land Limited is based on its: (1) 100% ownership of IFC;
and (2) track record of providing financial support to IFC.
A ratings upgrade is unlikely in the near term, given the
negative outlook. However, the outlook could be revised to
stable if Beijing Capital Land Limited's outlook is revised to
stable.
On the other hand, a downgrade of Beijing Capital Land Limited
will result in a downgrade of IFC.
Downward pressure on IFC could also arise if there is evidence of
a reduction in ownership or weakening support from Beijing
Capital Land Limited.
The principal methodology used in these ratings was Homebuilding
And Property Development Industry published in April 2015.
Incorporated in the British Virgin Islands in 2000, International
Financial Center Property Ltd. (IFC) is a 100%-owned subsidiary
of Beijing Capital Land Limited. IFC is an overseas investment
holding company that owns property development projects in China.
Beijing Capital Land Limited was incorporated in China in 2002
and is the property arm of Beijing Capital Group Co., Ltd
(Capital Group). Beijing Capital Land Limited listed on the
Stock Exchange of Hong Kong in 2003. Capital Group is Beijing
Capital Land Limited's largest shareholder with an equity
interest of 54.5%. GIC, Singapore's sovereign wealth fund, is
also a major shareholder with a 5.5% stake.
EVERGREEN HOLDING: Defaults on Bond Amid Cash Shortage
------------------------------------------------------
Bloomberg News reports that Evergreen Holding Group Co. defaulted
on bonds, becoming at least the 10th company to miss local debt
payments in the world's third-biggest note market this year.
Evergreen Holding said it can't make full payment due May 23 on a
one-year notes because of a cash flow shortage, Bloomberg relates
citing a statement on Shanghai Clearing House's website.
Bloomberg says the company, based in the eastern province of
Zhejiang, sold the CNY400 million ($61.3 million) of bonds with a
coupon rate of 7.955 in May 2015.
Credit woes are spreading in China as both privately held and
state-owned firms struggle with record debt repayments this year
amid the worst economic slowdown in a quarter century, Bloomberg
notes. Nanjing Yurun Foods Co., a sausage maker, recently missed
a payment for a second time in two months before saying on May 16
it had later made the payment, says Bloomberg.
Evergreen is making efforts to raise funds for the 431.8 million
yuan in principal and interest, including selling assets,
according to the statement cited by Bloomberg.
Based in McMinnville, Oregon, Evergreen Holdings, Inc. --
http://www.evergreenaviation.com/-- provides integrated air
cargo transportation and aviation support services. It is the
parent company of Evergreen International Aviation, Inc. The
companies and their consolidated subsidiaries provide global air
cargo shipping, ground handling and logistics services,
helicopter transportation services, small aircraft charters, and
aircraft maintenance and repair services.
================
H O N G K O N G
================
NOBLE GROUP: Fitch Cuts Long-Term Issuer Default Rating to 'BB+'
----------------------------------------------------------------
Fitch Ratings has downgraded the Long-Term Issuer Default Rating
(IDR) of Hong Kong-based commodities trader Noble Group Limited
(Noble) to 'BB+' from 'BBB-'. The Outlook is Stable. Fitch has
also downgraded the senior unsecured ratings to 'BB+' from 'BBB-
', and removed the ratings from Rating Watch Negative.
The downgrade reflects Fitch's expectation that Noble's debt
structure is shifting towards shorter term financing to
complement its asset-light business model that focuses on
working-capital management, and to reduce overall finance costs.
This will result in a weakening debt maturity profile, which
Fitch deems no longer to be consistent with an investment-grade
rating.
The Stable Outlook reflects Noble's continuous improvements in
its balance sheet and its commitment to maintaining sufficient
liquidity to cover its working-capital needs.
KEY RATING DRIVERS
Focus on Short-Term Debt: Fitch expects Noble to use more short-
term debt to complement its asset-light strategy and to reduce
overall financing costs - resulting in a weakening debt maturity
profile. This is reflected in its recent refinancing of
$US1billion of unsecured committed bank facilities which contains
only a one-year tranche compared with multiple-year tranches in
previous years.
Limited Use of Secured Debt:
Fitch said, "Noble's secured debt as a percentage of total debt
has always remained very low, at less than 10% (less than 8%
1Q16). We understand that the company intends to utilise more
borrowing base facilities for its working-capital financing, in
particular for the issuances of letters of credit (LCs), rather
than for secured debt drawdowns. However, a significant increase
in secured debt could reduce the company's unencumbered assets
relative to its unsecured debt."
Balance-Sheet Improvements:
Fitch said, "Noble's ratio of working capital/total debt
(including 50% of perpetual capital securities as debt) improved
to 1.12x in 1Q16 from 0.96x at end-2015, consistent with our
previous expectations. This ratio may improve further as Noble is
planning an additional $US1billion of liquidity inflow from sales
of non-core assets and equity raising. Higher-rated peers like
Archer Daniels Midland Company (A/Stable) and Bunge Limited
(BBB/Stable) had working capital/total debt ratios of 1.34x and
1.10x, respectively, at 1Q16."
Sufficient Liquidity:
Fitch said, "Noble's current liquidity stands at $US1.86billion
(comprising of $US862 million of unrestricted cash and
equivalents and $US1billion of undrawn committed facilities),
down from $US2.16billion at year-end 2015. This is equivalent to
1.25x inventory, which we believe is sufficient to cover
requirements arising from reasonable commodity price increments.
"However, we do expect this ratio to decrease in the short-term
after repayment of its debt totalling approximately $US1.6billion
in May. This temporary reduction in liquidity headroom is
partially relieved by a potential drawdown from its newly signed
$US2billion borrowing base facilities, and will increase post-
realisation of planned equity placement and non-core asset
sales."
KEY ASSUMPTIONS
Fitch's key assumptions within its rating case for the issuer
include:
-- Sales volume to remain similar to that of 2015
-- Capex and business acquisitions of $US100m-150m a year
RATING SENSITIVITIES
Positive: Developments that may, individually or collectively,
lead to positive rating action include:
-- The company reverting to more longer-term and competitively
priced funding on a sustained basis.
Negative: Developments that may, individually or collectively,
lead to negative rating action include:
-- Working capital/total debt sustained below 1.0x
-- Liquidity position (as defined by unrestricted cash and cash
equivalent plus undrawn committed facility) to total
inventory
sustained below 1.0x (1.25x at 1Q16)
-- Sustained negative cash flow from operations (CFO was
negative
in 2014 and 2010)
-- Weakened business strength, as evident from reduced funding
capacity to support working-capital expansion over the cycle
or sustained decline in tonnage volume that is more severe
than industry performance, and evidence of weakening of risk
management process
-- Sustained weakening of quarterly EBITDA / working capital
below 3%
-- Senior unsecured ratings might be notched down if there is
insufficient coverage of unsecured debt by unencumbered
assets.
NOBLE GROUP: Moody's Confirms Ba3 CFR; Outlook Negative
-------------------------------------------------------
Moody's Investors Service has confirmed Noble Group Limited's Ba3
corporate family rating, the Ba3 senior unsecured bond ratings,
and the (P)Ba3 provisional rating on its senior unsecured medium-
term note (MTN) program.
The rating outlook is negative.
This concludes the rating review for downgrade, which was
initiated on Feb. 23, 2016.
RATINGS RATIONALE
"The rating confirmation follows Noble Group's successful
refinancing of its bank facilities," says Joe Morrison, a Moody's
Vice President and Senior Credit Officer.
"The refinancing of the credit facilities and receipt in March of
$750 million in proceeds from the sale of its remaining stake in
Noble Agri Limited (unrated) has alleviated the immediate
pressure on the company's liquidity. However, the short-term
nature of these facilities and its sizeable maturing debt over
the next 1-2 years mean its liquidity remains constrained," adds
Morrison.
On May 12, 2016, Noble Group announced new revolving credit and
borrowing base facilities. The new $1 billion, 364-day senior
unsecured revolving credit facility is committed, and the
majority of the new $2 billion, 364-day senior secured borrowing
base facility is also committed.
The company's unrestricted cash of $862 million at end-March 2016
and operating cash flow are additional sources of liquidity.
However, the successful roll-over of the credit facilities is
critical to satisfying its maturing debt of about $2.0 billion
till end-2017.
The rating confirmation on its senior unsecured notes also
reflects Moody's expectation that the utilization of the new
borrowing base facility for borrowings will be limited. Moody's
expects that secured debt will not exceed 10%-15% of total debt
over the next 12-18 months. The limited level of secured debt in
the overall capital structure warrants not notching down the
senior unsecured bonds from the corporate family rating.
Noble Group's results for 1Q 2016, also reported on May 12, 2016,
exhibited the effects of uncertainty regarding the now completed
refinancing of its bank facilities. Adjusted operating cash flow
was negative $86 million, as payables declined substantially due
in large part to the reduced availability of term letters of
credit from banks.
However, operating income from supply chains showed sequential
improvement in 1Q 2016, rising to $250 million from $139 million
the prior quarter, and its reported operating income margin
improved to 2.19% from 1.07%.
Adjusted net debt to EBITDA for the 12 months ended March 31, was
about 4.6x, and Moody's expects the ratio to slightly improve
over the next 12 months on the back of a reduction in debt.
Moody's expects that with the refinancing completed, the company
will be able to focus on strategies to improve profitability and
cash flow and execute on its other capital raising initiatives.
These measures, if executed as planned, should help stabilize its
credit profile.
The Ba3 corporate family rating reflects (1) Noble Group's large
scale and product and geographic diversity; (2) the low level of
profitability inherent in its business; (3) its exposure to
volatility in the commodities markets; and (4) the negative free
cash flows -- excluding proceeds from asset sales -- in recent
years.
The negative outlook reflects the uncertainty regarding the
company's ability to rebuild and reposition its operations to
improve profitability, cash flow and liquidity amid the prolonged
commodity down cycle.
The rating outlook could return to stable, if (1) the company can
improve its liquidity, such that its liquidity sources can meet
maturing debt and other cash outlays over the next couple of
years; (2) profitability continues to improve, with the company
consistently generating positive free cash flow; and (3) adjusted
net debt to EBITDA trends toward 4.0x on a sustained basis.
However, Moody's will likely downgrade Noble Group's ratings if
(1) its liquidity profile and access to funding markets
deteriorate; or (2) adjusted net debt/EBITDA remains in excess of
4.5x.
The principal methodology used in these ratings was Trading
Companies published in March 2015.
Noble Group Limited is the largest global physical commodities
supply chain manager in Asia by revenue. Its diversified
activities across the supply chain include the sourcing, storage,
processing, transportation and distribution of over 20 commodity
products.
The company is publicly traded on the Singapore Stock Exchange
and at May 16, 2016, had a market capitalization of about $1.5
billion.
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ANANDAM TEXTILES: CRISIL Reaffirms B+ Rating on INR25MM Cash Loan
-----------------------------------------------------------------
CRISIL's ratings on the bank facilities of Anandam Textiles (AT)
continue to reflect the firm's modest scale of operations in the
fragmented cotton textile industry, below-average financial risk
profile because of high gearing, and susceptibility of its
operating profitability to volatility in raw material prices.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bill Discounting 12.2 CRISIL A4 (Reaffirmed)
Cash Credit 25 CRISIL B+/Stable (Reaffirmed)
Key Cash Credit 25 CRISIL B+/Stable (Reaffirmed)
Long Term Loan 1.5 CRISIL B+/Stable (Reaffirmed)
These weaknesses are partially offset by extensive experience of
its promoters in the textile industry.
Outlook: Stable
CRISIL believes AT will continue to benefit over the medium term
from the extensive industry experience of its promoters. The
outlook may be revised to 'Positive' if there is considerable
increase in revenue and profitability, leading to a better
business risk profile. Conversely, the outlook may be revised to
'Negative' in case of steep decline in revenue and profitability,
or deterioration in working capital management, impacting
liquidity, or large, debt-funded capital expenditure, weakening
financial risk profile.
AT, set up in 1973 by Mr. M Mahalingam, manufactures cotton yarn
and grey fabric. Its operations are managed by the founder's son-
in-law, Mr. A Murugaraj.
ARYA AUTOWHEELS: ICRA Suspends 'B' Rating on INR4.0cr Cash Loan
--------------------------------------------------------------
ICRA has suspended the long term rating of [ICRA]B outstanding on the
INR4.00 crore cash credit facilities and the INR3.50 crore term loans
of Arya Autowheels Private Limited. The suspension follows ICRA's
inability to carry out a rating surveillance in the absence of the
requisite information from the company.
B.MELARAM: ICRA Reaffirms B+ Rating on INR7cr Cash Loan
-------------------------------------------------------
ICRA has reaffirmed the long term rating at [ICRA]B+ for the
INR7.00 crore cash credit limits, which is the sublimit of short
term non fund based limits of B.Melaram & Sons. ICRA has also
reaffirmed the short term rating at [ICRA]A4 for INR35.00 crore
of non-fund based bank limits of the firm. The total utilization
should not exceed INR35.00 crore at any point of usage.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Fund
Based Limit
Cash Credit 7.00 [ICRA]B+ Reaffirmed
Short Term Non
Fund Based Limit
Letter of Credit 35.00 [ICRA]A4 Reaffirmed
The ratings reaffirmation continue to take into account B.
Melaram & Sons' (BMS) exposure to the cyclicality associated with
the steel industry as evident from volatility in turnover and
profitability in the past and its high reliance on external funds
resulting into TOL/TNW of 3.43 times as on 31st March 2016.
Further, the modest profit margin reflects the firm's weak market
position on account of low barriers to entry, lack of value
addition and intense competition in steel trading and ship
breaking industry, which limits its pricing flexibility.
The ratings, however, takes into account the long standing
experience of the promoters in steel trading and ship breaking
business and revenue growth recorded by the firm over the past
two years on the back of increased sales volume.
ICRA expects BMS's revenue to register a y-o-y de-growth in FY17
on account of stringent measures undertaken by the government to
curb cheaper imports and protect the domestic steel industry. The
extension of these measures can adversely impact the operations
and margin of the firm, going forward. While, some comfort is
expected from increasing domestic consumption on the back of
rising government expenditure on infrastructure, the
profitability of the firm will remain susceptible to fluctuations
in foreign exchange rates and steel prices. Further, any
significant withdrawal of capital by the partners could adversely
affect the credit profile of the firm.
Established in June 1982 by the Agarwal family, BMS is engaged in
trading of steel products and ship breaking. The share of each
activity to the total revenue has been changing, depending on the
viability in steel trading and ship breaking operations. Steel
trading has been the major revenue contributor for the firm from
the past two financial years. The promoters ventured in ship
breaking and trading of steel products in 1958 through its
associate-Baijnath Melaram (rated [ICRA]BB(Stable)/[ICRA]A4+).
BMS carries out trading operations from its office located in
Mumbai.
Recent Results
BMS recorded profit before tax of INR1.04 crore on an operating
income of INR110.07 crore for the year ending March 31, 2016
(provisional).
BANMORE FOAM: CRISIL Upgrades Rating on INR50MM Loan to B+
----------------------------------------------------------
CRISIL has upgraded its rating on the long-term bank facilities
of Banmore Foam Private Limited (BFPL) to 'CRISIL B+/Stable' from
'CRISIL B/Stable', while reaffirming the rating on the short-term
bank facilities at 'CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 50 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
Letter of Credit 16 CRISIL A4 (Reaffirmed)
Letter of Credit 15 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
Proposed Long Term 1.5 CRISIL B+/Stable (Upgraded
Bank Loan Facility from 'CRISIL B/Stable')
Standby Line of Credit 2.5 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
Term Loan 15 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
The rating upgrade reflects CRISIL's belief that BFPL will
sustain its improved financial risk profile, especially
liquidity, over the medium term supported by better cash
accruals. While revenues remained muted at about INR 250 million
for 2015-16 (refers to financial year, April 1 to March 31);
improved capacity utilization led to high operating profitability
and cash accruals. BFPL is expected to achieve cash accruals of
over Rs 8 million against annual debt repayments of about INR 3
million over the medium term. With increased contribution from
sale of mattresses and established customer relationships, CRIISL
believes that BFPL will continue to achieve higher cash accruals.
The ratings reflect BFPL's below-average financial risk profile,
marked by a small net worth and below-average debt protection
metrics. The ratings also factor in the company's exposure to
pricing pressure due to its small scale of operations,
competition, and fluctuations in raw material prices. These
rating weaknesses are partially offset by the extensive
experience of BFPL's promoters in the polyurethane (PU) foam
manufacturing and marketing industry, its established customer
relationships, and its reputed brand.
Outlook: Stable
CRISIL believes that BFPL will continue to benefit over the
medium term from its promoters' extensive industry experience and
strong client relationships. The outlook may be revised to
'Positive' if the company records significant growth in revenue
while improving its profitability, and maintains its financial
risk profile. Conversely, the outlook may be revised to
'Negative' if it registers substantially low cash accruals, or in
case of a large debt-funded capital expenditure (capex) impacting
BFPL's financial risk profile and liquidity. The length of
working capital cycle will continue to remain a key rating
sensitivity factor over the medium term.
BFPL was incorporated in 1988, promoted by Mr. Yogesh Mittal. The
company manufactures PU foam sheets, foam rolls, and other foam
products which find application in the furniture, leather,
garments, automobile, footwear, and packaging industries. In
2011-12, the company had started manufacturing complete
mattresses under its brand Cozymate (retail brand for mattresses,
pillows, and cushions). Other brands owned by the company are
Lexus, Shagun, Oxford, and Banmore Foam (industrial brands for
thin foam sheets).
BHADRESH TRADING: Ind-Ra Cuts Long-Term Issuer Rating to IND BB-
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has downgraded Bhadresh
Trading Corporation Ltd's (BTCL) Long-Term Issuer Rating to 'IND
BB-' from 'IND BBB+'. The Outlook is Negative. A full list of
rating actions is at the end of this commentary.
KEY RATING DRIVERS
The downgrade reflects BTCL's stressed liquidity, as a result of
delays in receipt of remittances against exports to its clients
in Bangladesh.
Given the surplus cotton stocks in China (its main export
destination) since FY15, the company increased its exports to
Bangladesh, which accounted for 40%-50% of its FY16 sales, as
against 15% in FY15.
The Negative Outlook reflects Ind-Ra's view that BTCL's liquidity
situation is unlikely to improve over the next one-two quarters,
given the time BTCL would take to diversify its customer base.
The agency understands that the company has not filed its FY15
audited financials with the Ministry of Corporate Affairs.
RATING SENSITIVITIES
Negative: Inability to improve its liquidity position in the next
three months could lead to negative rating action.
Positive: Improvement in liquidity on a sustained basis over the
next two quarters could lead to positive rating action.
COMPANY PROFILE
Incorporated in 1964, BTCL was converted into a limited company
in 2008 and is promoted by Mr. Bhadresh Mehta. It exports and
trades raw cotton and cotton yarn, purchasing raw cotton from
ginners primarily in Gujarat and Maharashtra and exporting it
primarily to China, Southeast Asia, Pakistan and Bangladesh. BTCL
sells under its own brand 'Bhadresh' to China and Bangladesh. The
company has offices in China, Singapore, Turkey and the US.
Recently, BTCL diversified its operations, and began the trade of
pulses in FY13 and the generation of solar power in FY15.
BTCL's ratings:
-- Long-Term Issuer Rating: downgraded to 'IND BB-'/Negative
from
'IND BBB+'/Stable
-- INR8,500 million fund-based limits: downgraded to 'IND BB-
'/Negative and 'IND A4+' from 'IND BBB+'/Stable and 'IND A2'
-- INR686.8 million long-term loans: downgraded to 'IND BB-
'/Negative from 'IND BBB+'/Stable
-- INR1,350 million non-fund-based limits: downgraded to 'IND
A4+' from 'IND A2'
BIC CHEMICALS: CRISIL Assigns 'B' Rating to INR35MM Cash Loan
-------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable/CRISIL A4' ratings to
the bank facilities of BIC Chemicals and Packagings Private
Limited (BIC).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 8.3 CRISIL B/Stable
Cash Credit 35.0 CRISIL B/Stable
Inland/Import
Letter of Credit 15.0 CRISIL A4
The ratings reflect the modest scale of operations of the company
in the highly fragmented packaging industry, vulnerability of
operating profitability to volatility in raw material prices, and
a modest networth. These rating weaknesses are partially offset
by the extensive experience of its promoters in the packaging
industry.
Outlook: Stable
CRISIL believes BIC will continue to benefit over the medium term
from the extensive industry experience of its promoters. The
outlook may be revised to 'Positive' if liquidity improves,
driven most likely by sustainable improvement in profitability,
efficient working capital management, or sizeable funding support
from promoters leading to reduction in debt levels. Conversely,
the outlook may be revised to 'Negative' if the company's
financial risk profile weakens because of deterioration in
working capital management, decline in profitability, or any
large, debt-funded capital expenditure.
BIC was originally established as a proprietorship firm in 1991;
the firm was reconstituted as a private limited company in 2009,
promoted by Mr. S L Sharma, Mr. Bhavya Sanwal, and Mr. Sunita
Sharma. The company undertakes repacking and export of various
inorganic and organic chemicals. It also manufactures blow- and
injection-moulded cans and other articles.
CARTHIC CREDITS: CARE Assigns B+ (FD) Rating to INR6.0cr Loan
-------------------------------------------------------------
CARE assigns 'CARE B+ (FD)' rating to the fixed deposit programme
of Carthic Credits Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fixed Deposits 6.00 CARE B+ (FD) Assigned
Rating Rationale
The rating assigned to the fixed deposit programme of Carthic
Credits Limited (CCL) is constrained by the relatively small
size of operations with presence in single state, low
profitability indicators, moderate asset quality indicators and
significant presence in used vehicle financing which is
relatively riskier asset class.
The ratings, however, derives strength from the long track record
of operations, experience of the promoters and comfortable
capital adequacy levels.
Going forward, the ability of the company to scale up the
operations while maintaining the capital adequacy levels,
improve asset quality and profitability would be the key rating
sensitivities.
Carthic Credits Limited (CCL) is deposit taking Non-Banking
Finance Company (NBFC-D). The company was initially established
in 1984 as a partnership firm. Later CCL was registered as a Non-
Banking Finance Company in November 1998. CCL is primarily
engaged in the business of Hire Purchase loans. The company
offers hire purchase loans for Two wheelers (2W) and Used Cars
with 2W loan accounting for 60% of loan portfolio as on March 31,
2015. The company Lends at an interest rate of 18% to 30%. The
average tenor of the hire purchase loan is 30 months. CCL has
operations in 2 branches located in Karaikudi and Coimbatore.
During FY15, the company generated PAT of INR0.02 crore on a
total income of INR1.05 crore as against PAT of INR0.03 crore on
a total income of INR1.09 crore during FY14.
CVT TECHNOLOGY: CRISIL Reaffirms 'B' Rating on INR50MM LT Loan
--------------------------------------------------------------
CRISIL's rating on the long-term bank facilities of CVT
Technology Solutions Private Limited (CVT) continues to reflect
its modest scale of operations in the intensely competitive
information technology (IT) industry and high receivable days.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Long Term Loan 50 CRISIL B/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility 20 CRISIL B/Stable (Reaffirmed)
Proposed Working
Capital Facility 10 CRISIL B/Stable (Reaffirmed)
These rating weaknesses are partially offset by the extensive
experience of promoters in the IT industry, moderate financial
risk profile and growth prospects of its healthcare related
software products.
Outlook: Stable
CRISIL believes CVT will continue to benefit over the medium term
from the extensive industry experience of promoters. The outlook
may be revised to 'Positive' if significant scaling up of
operations while maintaining healthy profitability leads to an
improved financial risk profile. Conversely, the outlook may be
revised to 'Negative' if low cash accrual, or a large, debt-
funded capital expenditure, or any stretch in the working capital
cycle weakens the financial risk profile.
Update
CVT, on a provisional basis, recorded an operating income of
INR53.1 million in 2015-16 (refers to financial year, April 1 to
March 31), a year-on-year growth of 5 percent. Also, operating
margin was stable at 39 percent. The operating margin is expected
to remain at a similar level over the medium term.
Financial risk profile remains moderate, with gearing of 1.18
times as on March 31, 2016, and interest coverage and net cash
accrual to total debt ratios are estimated at above 2 times and
0.19 time, respectively in 2015-16. Financial risk profile is
constrained by debtors greater than six months of over INR50
million as on March 31, 2016.
Liquidity remains adequate driven by comfortable cash accrual
against debt obligation.
CVT was incorporated in 1995 as Kaveri Infosys Pvt Ltd by Mr.
Thangamuthu and his friend Mr. Pasupathy and got its current name
in 2012. The company provides software solutions and services
mainly to the healthcare industry. Mr. Thangamuthu has experience
of around two decades in the application development industry.
Mr. Pasupathy is the founder promoter of CareVoyant Inc, which is
a US-based company that provides integrated healthcare solutions
in clinical, financial, and business intelligence.
CVT's profit after tax (PAT) was INR3.73 million on total revenue
of INR50.47 million in 2014-15, against PAT of INR1.83 million on
total revenue of INR43.01 million in 2013-14. Revenue is
estimated at INR53.08 million for 2015-16.
DAINIK SAVERA: CRISIL Ups Rating on INR56MM Term Loan to B+
-----------------------------------------------------------
CRISIL has upgraded its rating on the bank facilities of Dainik
Savera News and Media Network (DSMN) to 'CRISIL B+/Stable/CRISIL
A4' from 'CRISIL D/CRISIL D'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 20 CRISIL B+/Stable (Upgraded
from 'CRISIL D')
Letter of Credit 20 CRISIL A4 (Upgraded from
'CRISIL D')
Proposed Long Term 24 CRISIL B+/Stable (Upgraded
Bank Loan Facility from 'CRISIL D')
Term Loan 56 CRISIL B+/Stable (Upgraded
from 'CRISIL D')
The rating upgrade reflects timely servicing of debt by DSMN
driven by improvement in its liquidity owing to improved revenue,
margins and hence adequate cash accrual. This is due to increased
advertising revenue which are estimated at INR360-380 million for
2015-16 (refers to financial year, April 1 to March 31)
contributing 70-75 percent to the overall revenue compared to
INR199 million in 2014-15 (56 percent revenue contribution).
Although, DSMN has limited visibility on the advertisement
revenue in the near term, with improved circulation, the
advertisement income will continue to flow in, supporting its
profitability and consequently the net cash accrual will remain
adequate to cover the debt obligation.
Ratings also factor in modest scale, high working capital-
intensive operations and intense competition faced by DSMN from
established regional players. Margins are also susceptible to
fluctuations in economic cycles and newsprint prices. These
weaknesses are mitigated by improving circulation and thereby
improving advertisement income.
Outlook: Stable
The Stable outlook reflects CRISIL's view that DSMN will maintain
its financial risk profile owing to improving circulation and
advertising income. The outlook may be revised to 'Positive' with
better-than-expected revenue and margins leading to better
financial risk profile. The outlook may be revised to 'Negative'
in case of any debt-funded major capital expenditure or if the
advertisement income does not flow in as expected.
DSMN was set up in December 2012 and is owned and managed by Mr.
Shital Vij and family. The firm owns a printing press through
which it publishes Dainik Savera Times, a regional newspaper with
presence in Jammu, Punjab, Haryana, Chandigarh, Delhi and
Himachal Pradesh. The firm has its printing facility at
Jalandhar, Punjab.
DEEPAK SPINNING: CRISIL Assigns B- Rating to INR100MM Term Loan
---------------------------------------------------------------
CRISIL has assigned its 'CRISIL B-/Stable' rating to the long-
term bank facilities of Deepak Spinning Mills (DSM).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 100 CRISIL B-/Stable
Cash Credit 30 CRISIL B-/Stable
Proposed Cash
Credit Limit 10 CRISIL B-/Stable
The rating reflects DSM's weak financial risk profile because of
high gearing and below-average debt protection metrics, and its
small scale of operations in the highly fragmented cotton yarn
industry. These weaknesses are partially offset by the extensive
experience of promoters in the textile industry and their funding
support.
Outlook: Stable
CRISIL believes DSM will continue to benefit from the extensive
industry experience of promoters. The outlook may be revised to
'Positive' if an increase in net cash accrual leads to stronger
debt protection metrics, or if infusion of substantial capital
strengthens the capital structure. Conversely, the outlook may be
revised to 'Negative' in case of low cash accrual, or weakening
of working capital management, or any substantial, debt-funded
capital expenditure.
Established in 1996 as a partnership between Mr. Sanjay Garg and
Ms. Aruna Gupta, DSM, based in Panipat (Haryana), manufactures
yarn and waste cotton yarn from waste cotton.
DHANRAJ JEWELLERS: Ind-Ra Affirms IND B+' Long-Term Issuer Rating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed Dhanraj
Jewellers' Long-Term Issuer Rating at 'IND B+'. The Outlook is
Stable. The agency has also affirmed the company's INR150 million
fund based limit (increased from INR80 million) at 'IND B+' with
a Stable Outlook.
KEY RATING DRIVERS
The affirmation reflects Dhanraj Jewellers' continued moderate
scale of operations and credit metrics with revenue of INR1,020
million in FY15 (FY14: INR801 million), interest coverage of
1.5x (1.4x) and net financial leverage of 4.5x (4.2x). According
to the provisional FY16 financials of the company, revenue was
INR790m and EBITDA interest coverage was 1.4x.
The ratings are constrained by the year-on-year decline in the
company's operating margins (FY15: 2.8%; FY14: 3.2%; FY13: 3.4%)
due to increasing raw material cost. Moreover, the liquidity
profile of the company is tight, as indicated by its overuse of
the working capital limits several times during the 12 months
ended April 2016. The use of working capital limits, however, was
regularised within two days. The ratings are also constrained by
the proprietorship nature of business.
The ratings, however, are supported by almost two decades of
operating experience of the firm's founder in the jewellery
business.
RATING SENSITIVITIES
Positive: Improvement in the operating EBITDA margin will be
positive for the ratings.
Negative: A decline in the interest coverage will be negative for
the ratings.
COMPANY PROFILE
Incorporated in 1995 by Deepak Murpana, Dhanraj Jewellers is a
jewellery retail shop in Mumbai.
DHARAM PAUL: CRISIL Reaffirms B+ Rating on INR120MM Cash Loan
-------------------------------------------------------------
CRISIL's rating on the long-term bank facility of Dharam Paul
Rice Mills (DPRM) continue to reflect DPRM's weak financial risk
profile because of high gearing, weak debt protection metrics,
and working capital-intensive operations. These rating weaknesses
are partially offset by the extensive experience of partners in
the rice industry and their financial support.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 120 CRISIL B+/Stable (Reaffirmed)
Rupee Term Loan 27 CRISIL B+/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes DPRM will maintain its business risk profile,
backed by the extensive experience of its promoters in the rice
industry. The outlook may be revised to 'Positive' in case of
significant improvement in financial risk profile due to capital
infusion, and higher-than-expected cash accrual mainly led by
improvement in the scale of operations and operating
profitability. Conversely, the outlook may be revised to
'Negative' in case of deterioration in the financial risk profile
due to a significant increase in inventory, leading to large
incremental bank borrowings or in case of a debt-funded, capital
expenditure (capex) or a significant decline in revenue and
profitability leading to lower-than-expected cash accrual.
Update
DPRM's revenue is estimated to improve by around 40 percent to
INR440 million in 2015-16 (refers to financial year, April 1 to
March 31) vis-a-vis INR320 million in 2014-15 and is expected to
be at INR500-550 million over the medium term. Operating margin
is also estimated to continue at around 6 percent over this
period.
The financial risk profile is expected to remain weak because of
estimated small networth of INR39.3 million and high gearing of
4.85 times as on March 31, 2016, and weak interest coverage ratio
at 1.28 times in 2015-16. CRISIL believes the financial risk
profile will remain weak over the medium term due to its working
capital-intensive operations and low cash accrual leading to high
reliance on bank debt. The operations are working capital
intensive, with inventory of 166 days as on March 31, 2016, owing
to seasonal availability of raw material paddy, thus leading to
high bank limit utilisation of 92 percent for the four months
through March 2016. For 2016-17, the net cash accrual is expected
to be at INR7.6-8.0 million against debt obligation of INR4.2
million per annum. Liquidity is also supported by unsecured loans
from promoters (INR32.7 million as on March 31, 2016) and absence
of any considerable, debt-funded capex plan over the medium term.
DPRM was established in 1999 by Mr. Ashok Kumar, Mr. Mahendra Pal
and Mr. Sandeep Kumar. It is engaged in rice milling and rice
shelling at its plant located in Budhlada, Punjab. The firm has
an installed capacity of 4 tonne of rice per hour. The firm
processes basmati rice and by-products such as bran and phuk
which are sold to both merchant exporters and domestic traders.
DIPAK J. BHIVARE: CRISIL Ups Rating on INR105MM Loan to B-
----------------------------------------------------------
CRISIL has upgraded its ratings on the bank facilities of M/S.
Dipak J. Bhivare (DJB) to 'CRISIL B-/Stable/CRISIL A4' from
'CRISIL D/CRISIL D.'
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 15 CRISIL A4 (Upgraded from
'CRISIL D')
Cash Credit 105 CRISIL B-/Stable (Upgraded
from 'CRISIL D')
Proposed Long Term 1.2 CRISIL B-/Stable (Upgraded
Bank Loan Facility from 'CRISIL D')
The rating upgrade reflects improvement in liquidity as indicated
by lower utilisation of cash credit limit at around 90 per cent,
along with timely payment of interest, over the three months
through April 2016 against instances of over-utilisation of the
limit in the past. The improvement in liquidity is driven by a
better working capital cycle due to timely recovery of
receivables. CRISIL believes the firm will sustain its improved
liquidity over the medium term, driven by improving cash accrual
and a better working capital cycle.
The ratings reflect the firm's below average financial risk
profile because of an aggressive capital structure and average
debt protection metrics. It also has a small scale of operations
and large working capital requirement. These rating weaknesses
are partially offset by the extensive experience of its
proprietor in the civil construction industry and a moderate
order book in hand.
Outlook: Stable
CRISIL believes DJB will continue to benefit over the medium term
from the extensive industry experience of its proprietor and
moderate order book. The outlook may be revised to 'Positive' in
case of significant and sustained improvement in scale of
operations and cash accrual, while working capital requirement is
efficiently managed. Conversely, the outlook may be revised to
'Negative' if the financial risk profile, especially liquidity,
weakens, most likely because of substantial increase in working
capital requirement or a decline in cash accrual.
DJB was set up in 2002 as a proprietorship firm by Mr. Dipak J
Bhivare. The firm undertakes civil construction work, primarily
construction of water filters and overhead reservoirs, and laying
of pipelines, for government agencies. It is registered as a
Class 1 contractor with Maharashtra Jiwan Pradhikaran.
DURGA AUTOMOTIVES: ICRA Assigns 'D' Rating to INR12cr Cash Loan
---------------------------------------------------------------
ICRA has assigned an [ICRA]D rating to the INR12.00 crore cash
credit facility of Durga Automotives Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 12.00 [ICRA]D assigned
The rating primarily takes into account the pressure on the
liquidity position of DAPL as reflected by continuous
overutilization of the cash credit facilities. The rating also
takes cognizance of the weak financial profile of DAPL
characterised by high gearing, weak debt coverage indicators and
high working capital intensity as reflected by net working
capital relative to operating income of around 50% during FY15
resulting in adverse impact on the liquidity position of the
company. ICRA also notes the high geographical concentration
risk, with entire operations being limited to the state of West
Bengal and significant fall in revenue during FY14 and FY15 due
to declining sales volume. The rating, however, derives comfort
from the long experience of the promoters in the vehicle
dealership business.
Durga Automotives Private Limited (DAPL) is an authorized dealer
of Hyundai for the sale of passenger cars and of Piaggio for the
sale of commercial vehicles at Siliguri, West Bengal. The company
also deals in the sales of spares and accessories besides
providing after sales services. DAPL started its operation in
1998 with a single showroom at Siliguri, West Bengal. Presently,
DAPL has four showrooms for Hyundai at Malda, Siliguri,
Darjeeling and Raigunj, and one showroom for Piaggio at Siliguri.
Recent Results
In 2014-15, DAPL reported a profit after tax (PAT) of INR0.24
crore (provisional) on an operating income of INR37.14 crore
(provisional) as compared to a PAT of INR0.37 crore on an
operating income of INR47.65 crore in 2013-14.
DYNAMIX CHAINS: CRISIL Reaffirms 'D' Rating on INR351.5MM Loan
--------------------------------------------------------------
CRISIL has reaffirmed its ratings on the long-term bank
facilities of Dynamix Chains Manufacturing Private Limited
(Dynamix), while the ratings on the short term bank facilities
have been downgraded to 'CRISIL D'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Funded Interest
Term Loan 49.7 CRISIL D (Reaffirmed)
Packing Credit 50.0 CRISIL D (Downgraded from
'CRISIL A4')
Post Shipment Credit 90.0 CRISIL D (Downgraded from
'CRISIL A4')
Proposed Long Term 351.5 CRISIL D (Reaffirmed)
Bank Loan Facility
Term Loan 28.4 CRISIL D (Reaffirmed)
Working Capital
Demand Loan 158.9 CRISIL D (Reaffirmed)
The downgrade is driven by the delays by Dynamix in meeting its
debt obligations. The delays were caused by the company's weak
liquidity.
Dynamix has a weak financial risk profile, marked by high gearing
and weak debt protection metrics. Besides, the company has large
working capital requirements, resulting in weak liquidity, and
there is geographical concentration in its revenue profile.
However, Dynamix has an established market position in the
jewellery industry, and sound manufacturing facilities.
Dynamix, established in October 2007, is promoted by Mr. Pramod
Goenka of Mumbai. It manufactures specialised chains and
pendants, which are exported to the US.
FAIRDEAL STEELS: Ind-Ra Assigns 'IND BB' Long-Term Issuer Rating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Fairdeal Steels
Private Limited (FSPL) a Long-Term Issuer Rating of 'IND BB'. The
Outlook is Stable. The agency has also assigned FSPL's INR85
million fund-based working capital limit a Long-term 'IND BB'
rating with a Stable Outlook and a Short-term 'IND A4+' rating.
KEY RATING DRIVERS
The ratings factor in FSPL's moderate-to-weak credit metrics
primarily due to its low operating profitability. It had gross
interest (operating EBITDA/gross interest expense) coverage of
1.32x in FY15 (FY14: 1.25x) and net leverage (total adjusted net
debt/operating EBITDAR) of 4.67x (4.86x). Provisionals FY16
financials indicate gross interest coverage and net leverage of
1.48x and 4.84x, respectively.
However, the ratings are supported by the company's moderate
scale of operations (FY16: INR1,112.63 million (provisional),
FY15: INR1,307.51 million, FY14: INR1438.69 million).
The ratings factor in FSPL's comfortable liquidity as well as in
over three decades of operating experience of one of the
company's promoters in the steel business. The company's average
working capital utilisation was 67% during the 12 months ended
April 2016.
RATING SENSITIVITIES
Negative: A decline in the profitability leading to deterioration
in the credit metrics could be negative for the ratings.
Positive: An improvement in the profitability leading to an
improvement in the credit metrics could be positive for the
ratings.
COMPANY PROFILE
Incorporated in 1995 in Jalandhar, FSPL trades hot rolled coils,
sheets and plates. The company is promoted by Mr. Rakesh Garg and
Mr. Mahavir Garg.
GENUS APPARELS: CARE Ups Rating on INR8.07cr LT Loan to BB-
-----------------------------------------------------------
CARE revises the ratings assigned to the bank facilities of
Genus Apparels Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank facilities 8.07 CARE BB- Revised from
CARE BB to CARE D
and then revised to
CARE BB-
Short-term Bank facilities 9.36 CARE A4 Revised from
CARE A4+ to CARE D and
then revised to CARE A4
Rating Rationale
The revision in the ratings assigned to the bank facilities of
Genus Apparels Limited (GAL) to 'CARE D' factors in instances
of past delays in servicing of debt obligations.
The subsequent revision in the rating to 'CARE BB-'/'CARE A4'
takes into account the improvement in the debt-servicing track
record of the company.
The ratings continued to be constrained by the company's small
scale of operations with low net worth base and its leveraged
capital structure as well as debt coverage indicators. The
ratings also factor in working capital intensive nature of
operations and its presence in the highly fragmented and
competitive industry.
The ratings, however, derive strength from experience of the
company promoters and its association with the promoter Group.
Going forward, ability of the company to profitably scale up the
operations while effectively managing the competition
and improve its gearing shall remain the key rating
sensitivities.
Incorporated in 2003, GAL is a public limited company (closely
held) promoted by Kailash group having Mr Amit Agarwal, Mr
Kailash Agarwal and Mr N P Todi as its directors. GAL is engaged
in the manufacturing of readymade garments (knitted) such as T-
shirts, tops, jackets, heavy fabrics, thermals etc. for ladies
and gents in the ratio of 70% and 30% respectively. The
manufacturing facility is located in Faridabad, Haryana with the
total installed capacity of manufacturing 14.40 lakh knitted
garments per annum as on March 31, 2015. The main raw material
for the company is cotton yarn which it procures from dealers and
distributors based in Delhi - National Capital Region (NCR). The
company is a 100% export oriented unit and mainly caters to the
various fashion houses and retail chains of United States of
America (USA), United Kingdom (UK) and Canada.
During FY15 (refers to the period April 1 to March 31), on a
total operating income of INR47.89 crore, the company reported a
PBILDT of INR3.33 crore and loss at net level INR1.30 crore,
respectively. Furthermore, during 9MFY16 (provisional) (refers to
the period April 1 to December 31), it has reported a PBILDT and
PAT of INR4.53 crore and INR0.86 crore on total operating income
of INR30.86 crore.
GTC OILFIELD: Ind-Ra Assigns Additional Term Loans 'IND BB'
-----------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned GTC Oilfield
Services Private Limited's (GTC Oil) INR191.4 million term loans
an 'IND BB' rating. The Outlook is Stable.
The additional term loans were availed in FY16 and are not
guaranteed by GTC Oil's sister concern, Globe Eco Logistics Pvt
Ltd ('IND BBB+'/Stable/'IND A2'). Hence, a standalone rating has
been assigned.
GTC Oil's outstanding ratings, including the above, are as
follows:
-- Long-Term Issuer Rating: 'IND BB'; Outlook Stable
-- INR331.2 million outstanding term loan: 'IND BBB+(SO)'/Stable
-- INR70 million fund-based cash credit limits: 'IND BBB+(SO)'/
Stable/'IND A2'
-- INR146 million non-fund based limits: 'IND A2(SO)'
-- INR369.5 million outstanding term loan: 'IND BB'/Stable
GUDI EXPORTS: CRISIL Reaffirms B- Rating on INR42.5MM Loan
----------------------------------------------------------
CRISIL ratings to the bank facilities of Gudi Exports Pvt Ltd
(GEPL) continues to reflect GEPL's small scale of operations in
the intensely competitive and fragmented ready-made garments
(RMG) industry, the company's weak financial risk profile marked
by a small net worth, its large working capital requirements, and
the high geographic and customer concentration in its revenue
profile.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 0.5 CRISIL A4 (Reaffirmed)
Foreign Bill
Discounting 42.5 CRISIL B-/Stable (Reaffirmed)
Foreign Bill 27.0 CRISIL B-/Stable (Reaffirmed)
Foreign Exchange
Forward 20.0 CRISIL A4 (Reaffirmed)
Packing Credit 70.0 CRISIL A4 (Reaffirmed)
These rating weaknesses are partially offset by the extensive
industry experience of GEPL's promoters.
Outlook: Stable
CRISIL believes that GEPL will continue to benefit over the
medium term from its promoters' extensive experience in the RMG
industry. The outlook may be revised to 'Positive' if the company
generates substantial cash accruals while improving its working
capital cycle. Conversely, the outlook may be revised to
'Negative' if GEPL generates low cash accruals, or if its working
capital management deteriorates, or if it undertakes a large
debt-funded capital expenditure programme.
GEPL was incorporated in 2012 by Mr. Mandeep Wasu and Mr. Ajit
Singh Wasu. GEPL manufactures and exports RMG, primarily high-end
ladies fashionable clothing. Its daily operations are managed by
key promoter Mr. Mandeep Wasu.
GUPTA EXIM: CARE Cuts Rating on INR409.30cr LT Loan to D
--------------------------------------------------------
CARE revises the ratings assigned to the bank facilities of
Gupta Exim (India) Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank facilities 409.30 CARE D Revised from
CARE C
Short-term Bank facilities 0.50 CARE D Revised from
CARE A4
Rating Rationale
The revision in the rating assigned to the bank facilities of
Gupta Exim (India) Private Limited (GEIPL) factor in the ongoing
delays in the servicing of debt obligations by the company due to
its weak operational performance as reflected by the loss making
operations and weak solvency as well liquidity position. The
ratings also factor in weak financial risk profile marked by high
debt levels and complete erosion of the net-worth due to the
losses.
GEIPL, a Government of India recognized export house, was
established in 1990 and started commercial operations in
1992. The company is engaged in knitting, dyeing, printing and
processing of knitted fabrics and manufacturing of garments like
cotton t-shirts and sweaters. GEIPL is promoted by Mr Sandeep
Gupta who has an experience of more than two decades in the
manufacturing and export of fabrics and garments.
During FY15 (refers to period from April 1 to March 31), GEIPL
reported a total operational income of INR 301.08 crore
with operating loss of INR 8.89 crore and net loss of INR 71.60
crore as against the total operating income of INR298.31
crore with loss at operating level of INR 68.65 crore and losses
at the net level of INR 116.37 crore during FY14.
HUBTOWN BUS: CARE Lowers Rating on INR100cr LT Loan to D
--------------------------------------------------------
CARE revises the rating assigned to the bank facilities of
Hubtown Bus Terminal (Ahmedabad) Pvt Ltd.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 100.00 CARE D Revised from
CARE BB
Short-term Bank Facilities 27.55 CARE D Revised from
CARE A4
Rating Rationale
The revision in the ratings factors in the ongoing delays in
servicing of debt obligations by Hubtown Bus Terminal (Ahmedabad)
Pvt. Ltd. (HBTAPL) on account of its weakened liquidity position
caused by the delay in project completion and delays in receipt
of customer advance.
Hubtown Bus Terminal (Ahmedabad) Pvt Ltd (HBTAPL) is a special
purpose vehicle formed by Hubtown Ltd. (formerly known as Akruti
City Ltd) with an objective to develop a bus terminal at
Geeta Mandir, Ahmedabad Gujarat, as per the concession agreement
with Gujarat State Road Transport Corporation (GSRTC). The
Hubtown group is in the business of developing real estate since
two decades. The group commenced operations with the
incorporation of Akruti Nirman Private Limited (ANPL) in February
1989. ANPL was subsequently converted into a public limited
company in April, 2002 renamed as Hubtown Ltd. in 2012. Gujarat
State Road Transport Corporation (GSRTC) floated a tender for
redevelopment of the bus terminal at GeetaMandir (Ahmedabad) in
2007. The Hubtown group was allotted development rights of the
said bus terminal project to be executed through HBTAPL.
IBC LIMITED: ICRA Suspends 'C' Rating on INR30.40cr Bank Loan
-------------------------------------------------------------
ICRA has suspended the long term rating of [ICRA]C assigned to
the INR30.40 Crore bank facilities of IBC Limited. The suspension
follows ICRA's inability to carry out a rating surveillance, in
the absence of the requisite information from the company.
INTERNATIONAL TRADE: CARE Reaffirms B+ Rating on INR24.55cr Loan
----------------------------------------------------------------
CARE reaffirms the ratings assigned to the bank facilities of
International Trade Links Private Ltd.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 24.55 CARE B+ Reaffirmed
Short term Bank Facilities 0.30 CARE A4 Reaffirmed
Rating Rationale
The ratings for the bank facilities of International Trade Links
Private Ltd (ITLPL) continue to remain constrained by its
relatively small scale of operations with low profit margins,
working capital intensive nature of operations with high
operating cycle, stiff competition in the export apparel market,
high customer concentration risk and exposure to foreign
exchange fluctuation risk. The aforesaid constraints are
partially offset by the experience of the promoters in the
apparel
industry, established business relations and integrated
manufacturing facility.
The ability of the company to improve its scale of operations
with diversification of product line along with an improvement in
the overall financial profile through improvement in
profitability margins and effective management of the working
capital would be the key rating sensitivities.
Incorporated in January 1991, Kolkata-based ITLPL was promoted by
two brothers, Mr Sanjay Chowdhury and Mr Bijoy Chowdhury. Since
its inception, the company has been engaged in the business of
manufacturing and export of readymade garments. ITLPL is an
export-oriented unit (EOU) recognized since 2006. It exports 100%
of its products like collared and polo-neck T-shirts to USA and
Germany. ITLPL is associated with brands like Surf Style, Alvins
Island, Cute, Soa Print, and BB Tropics.
The manufacturing facility of the company is located at Bodai,
West Bengal, with an aggregate installed capacity of 47.8
lakh pieces per annum as on March 31, 2015. The unit is well
integrated for knitting, cutting, stitching, sewing, ironing
and packing of readymade garments. However, dyeing, bleaching and
washing activities are being outsourced on job work basis.
During FY15 (refers to the period April 1 to March 31), the
company has reported a total operating income of INR74.82 crore
(FY14: INR75.04 crore) with a PAT of INR0.75 crore (FY14: INR0.57
crore). Furthermore, in 11MFY16, the company has earned a
turnover of INR74.14 crore.
INTERNATIONAL TRADING: CRISIL Ups Rating on INR30MM Loan to 'B'
---------------------------------------------------------------
CRISIL has upgraded its rating on the long-term bank loan
facilities of International Trading Company (ITC) to 'CRISIL
B/Stable' from 'CRISIL B-/Stable' and reaffirmed its rating on
the short-term facilities at 'CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bill Discounting 30 CRISIL A4 (Reaffirmed)
Cash Credit 30 CRISIL B/Stable (Upgraded
from 'CRISIL B-/Stable')
Letter of credit &
Bank Guarantee 20 CRISIL A4 (Reaffirmed)
Packing Credit 20 CRISIL A4 (Reaffirmed)
Term Loan 10 CRISIL B/Stable (Upgraded
from 'CRISIL B-/Stable')
The rating upgrade reflects improvement in the business risk
profile of the firm, driven by sustained improvement in scale of
operations. The upgrade also factors in a better financial risk
profile.
Revenue is estimated to have increased to INR183 million in 2015-
16 (refers to financial year, April 1 to March 31) from INR154
million in 2013-14; this led to cash accrual of INR20-30 million
in 2015-16, higher than CRISIL's expectation. Liquidity remained
comfortable due to moderate bank limit utilisation at an average
of 79 per cent over the 12 months through March 2016. Gearing is
estimated to have declined to 1.0 time as on March 31, 2016, from
5.4 times as on March 31, 2014. CRISIL believes ITC will sustain
its business risk profile over the medium term, supported by
capacity expansion and healthy market demand.
The ratings reflect the firm's exposure to intense competition,
small scale of operations in the domestic readymade garments
industry, and customer concentration in revenue profile. These
rating weaknesses are partially offset by the extensive industry
experience of the firm's promoters.
Outlook: Stable
CRISIL believes ITC will continue to benefit over the medium term
from the extensive industry experience of its promoters. The
outlook may be revised to 'Positive' in case of an increase in
revenue and profitability along with efficient working capital
management, leading to better cash accrual and liquidity. The
outlook may be revised to 'Negative' if scale of operations
reduces, or the financial risk profile deteriorates, most likely
because of increased working capital borrowing or low cash
accrual.
Set up in 2004, ITC manufactures knitted garments for both the
domestic and international markets at its facility in Salem,
Tamil Nadu. The firm is managed by partners Mr. Zahir Sait, Mr.
Osman Sait, and Ms. Niza Osman.
JAGDISH PRASAD: Ind-Ra Assigns 'IND BB' Long-Term Issuer Rating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Jagdish Prasad
Shukla (JPS) a Long-Term Issuer Rating of 'IND BB' with Outlook
Stable. A full list of rating actions is at the end of this
commentary.
KEY RATING DRIVERS
The ratings are constrained by JPS' small scale of operations and
weak profitability. 9MFY16 interim financials indicate overall
revenue of INR282.29m (FY15: INR537.54 million) and EBITDA margin
of 3.17% (2.62%). JPS is highly susceptible to government
regulations; any adverse change in the policy pertaining to the
construction and infrastructure sector may hamper its operations
severely.
The ratings, however, are supported by JPS' comfortable credit
metrics in FY15 on account of its low debt levels and low
utilisation of the working capital limits. Interest coverage
(operating EBITDA/gross interest expense) was 4.97x in 9MFY16
(FY15: 38.14x) and financial leverage (total adjusted
debt/operating EBITDAR) was 3.19x (1.67x). Moreover, the net
working capital cycle of the firm was negative in FY14-FY15.
The ratings are further supported by the firm's operating record
of more than three decades in the civil construction business. By
end-April 2016, the firm had orders worth INR900 million for road
construction, which are to be executed in FY17-FY18.
RATING SENSITIVITIES
Negative: Any decline in work order leading to a decline in the
overall revenue and/or deterioration in the credit metrics will
be negative for the ratings.
Positive: A significant improvement in the revenue while
maintaining the credit profile and working capital cycle will be
positive for the ratings.
COMPANY PROFILE
Established in 1985, JPS executes civil construction work for
public sector entities and various state government bodies. The
firm mainly executes projects for the public works department of
Uttar Pradesh.
JPS' ratings:
-- Long-Term Issuer Rating: assigned 'IND BB'; Outlook Stable
-- INR30 million fund-based working capital limits: assigned
'IND
BB'/Stable and 'IND A4+'
-- INR90 million non-fund-based working capital limits: assigned
'IND A4+'
JK SURFACE: CRISIL Reaffirms B- Rating on INR90MM Overdraft Loan
----------------------------------------------------------------
CRISIL's ratings on the bank facilities of JK Surface Coatings
Private Limited (JKSC) continue to reflect the firm's modest
financial risk profile because of average capital structure and
debt protection metrics, and large working capital requirement.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 76 CRISIL A4 (Reaffirmed)
Overdraft Facility 90 CRISIL B-/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility 19.5 CRISIL B-/Stable (Reaffirmed)
Rupee Term Loan 12.0 CRISIL B-/Stable (Reaffirmed)
These rating weaknesses are partially offset by the extensive
experience of the prompters of the company in the surface coating
industry.
Outlook: Stable
CRISIL believes JKSC will continue to benefit over the medium
term from the extensive industry experience of its promoters. The
outlook may be revised to 'Positive' in case of more-than-
expected cash accrual, most likely through higher execution of
offshore orders. Conversely, the outlook may be revised to
'Negative' if liquidity weakens because of a decline in cash
accrual, further stretch in working capital cycle, or large debt-
funded capital expenditure.
Incorporated in 1998, JKSC is a service contractor for protective
surface coatings. The company is based in Navi Mumbai and is
promoted by Mr. Ajay Sagar and Mr. Sanjiv Thakur. It undertakes
contracts for application of surface coatings at industrial
sites, on both work- and labour-contract basis.
KALPANA SHIVHARE: CARE Assigns B+ Rating to INR3.5cr LT Loan
------------------------------------------------------------
CARE assigns 'CARE B+/CARE A4' ratings to bank facilities of
Kalpana Shivhare.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 3.50 CARE B+ Assigned
Long/Short term Bank
Facilities 5.00 CARE B+/CARE A4
Assigned
Rating assigned by CARE is based on the capital deployed by the
proprietor and the financial strength of the firm at present. The
rating may undergo change in case of withdrawal of capital or the
unsecured loans brought in by the proprietor in addition to the
financial performance and other relevant factors.
Rating Rationale
The ratings assigned to the bank facilities of Kalpana Shivhare
(KSH) are constrained on account of high business risk arising
out of operations of the firm in a highly regulated liquor
industry and trading nature of business characterized by thin
profitability. The ratings are also constrained on account of
limited financial flexibility considering proprietorship
nature of constitution and working capital intensive nature of
operations.
The ratings, however, derive strength from the experienced
promoters and financial risk profile marked by moderate
gearing and debt coverage indicators.
The ability of KSH to increase its scale of operation along with
improvement in profitability is the key rating sensitivity.
Any significant changes in state government's policy for liquor
trading shall also be the key rating monitorable.
Incorporated in 1990, KSH is a sole proprietorship firm which is
into the business of retailing of alcohol. The firm also owns and
operates petrol pump under the name M/s Patel & Sons in Madhya
Pradesh. KSH undertakes retail trade of Indian made foreign
liquor (IMFL), country liquor (CL), wine, etc, and holds retail
license for liquor shops in the state of MP. KSH has been
allotted retail liquor license for 10 shops in different
districts of MP in FY15 (refers to the period April 1 to March
31) and FY16. The firm enters into open tendering process every
year to avail license for the retailing of the liquor. Depending
upon the allotment of shops during tendering, the number of shops
held by the firm varies every year.
Based on the audited results for FY15, KSH reported a total
operating income (TOI) of INR43.33 crore (FY14: INR21.46
crore) and profit after tax (PAT) of INR0.54 crore (FY14: INR0.12
crore).
KANASE AUTO: CARE Assigns B+ Rating to INR15cr LT Loan to B+
------------------------------------------------------------
CARE assigns 'CARE B+' rating to bank facilities of Kanase Auto
Wheels 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 Kanase Auto Wheels
Private Limited (KAPL) is constrained by low profitability
margins, weak solvency position, working capital intensive nature
of operations, limited bargaining power with Hyundai Motor
Private Limited (Hyundai), performance linked to the performance
of Hyundai and intense competition in the industry.
The above weaknesses are partially offset by the experienced
promoters and integrated nature of operations.
The ability of the company to improve its solvency position and
efficiently managing its working capital requirement is the key
rating sensitivity.
Incorporated on November 27, 2008, in Satara, KAPL is promoted by
Mr Ruturaj Kanase and Mr Arun Kanase. KAPL is an authorized
dealer and authorized service provider for the vehicles of
Hyundai. The
company manages three showrooms located at Satara, Karad, and
Shirwal. All the three showrooms are equipped with 3-S facilities
(Sales, Service and Spare-parts).
The company has a group concern, namely, 'Kanase Auto World
Private Limited' which is an authorized dealer for vehicle of
Honda Motorcycle and Scooter India Private Limited.
In FY15 (refers to the period April 01 to March 31), the company
registered an income from operations of INR43.86 crore and PAT of
INR0.06 crore as against the income from operations and PAT
of INR27.51 crore and INR0.06 crore, respectively, in FY14.
KURSEONG CARRIERS: ICRA Suspends 'D' Rating on INR15cr Loan
-----------------------------------------------------------
ICRA has suspended the long term rating of [ICRA]D assigned to
the INR15.00 crore fund based bank facilities, and the short term
rating of [ICRA]D assigned to the INR7.00 crore non-fund based
bank facility of Kurseong Carriers Private Limited (KCPL). The
suspension follows ICRA's inability to carry out a rating
surveillance in the absence of the requisite information from the
company.
LODHA DEVELOPERS: Moody's Lowers CFR to B1; Outlook Negative
------------------------------------------------------------
Moody's Investors Service has downgraded the corporate family
rating of Lodha Developers Private Limited (LDPL) to B1 from Ba3.
Moody's has also downgraded the senior unsecured debt rating of
the US dollar denominated bonds issued by Lodha Developers
International Limited and guaranteed by LDPL to B1 from Ba3.
The outlook on the ratings is negative.
RATINGS RATIONALE
"The downgrade reflects our expectation that the company's credit
metrics will fail to improve to a level more appropriate for its
ratings over the next 12-18 months. The company's operating
performance will remain well below our original expectations at
the time we assigned the ratings for the first time in November
2014 and also below our reduced expectations in June 2015", says
Vikas Halan, Moody's Vice President and Senior Credit Officer.
The company made operating sales of INR64.3 billion for fiscal
2016 against Moody's expectation of INR90-93 billion.
Cash collections of INR62 billion made during the year, though
higher than last year's collection by 14%, were lower than
Moody's expectation of INR75-80 billion for fiscal 2016.
The weak operating performance has also resulted in the increase
in borrowings to INR133 billion as of March 31, 2016, compared to
INR118 billion a year ago.
The management targets to achieve INR90 billion in cash
collections in fiscal 2017. A substantial portion of the
collection is expected to come from projects such as - The Park
and World Towers. The company also intends to collect a sizeable
amount from sales made at the Palava City. Collections, however,
will be a function of construction progress at these projects.
The negative outlook reflects a challenging operating environment
for real estate companies in India and the company's weak credit
metrics and liquidity position.
LDPL's liquidity profile is weak.
The company needs to refinance GBP75 million by June 2016 and
another GBP225 million by December 2016. These debt maturities
are with respect to the company's London assets. Such large debt
maturities are exposes the company to refinancing risk, which
gets heightened because of uncertainties surrounding Britain's
possible exit from the Euro zone.
The company is in advanced stages of refinancing its debt
maturing in June 2016 and Moody's expects them to be able to
refinance the same. Nonetheless, the refinancing risk will remain
as the December maturity approaches.
In addition, the company had, debt maturing over the next 12
months of INR16.4 billion in India as of March 2016. Against
this the company has indicated that it has already arranged for
INR 15 billion of facilities that have been sanctioned by banks
and remain undrawn. In addition, the company also had cash and
cash equivalents of INR 3 billion as of March 2016. Moody's
expects the company to continue to access project construction
loans for refinancing these borrowings. In absence of
substantial progress on refinancing, the ratings will remain
under pressure.
An upgrade in the ratings is unlikely, given the negative
outlook. The outlook could be moved back to stable if there is a
substantial reduction in the debt levels and improvement in
liquidity either by way of a) improvement in operating
performance or b) equity issue/ asset sales. Credit metrics
indicative of such a scenario include a) cash and cash
equivalents exceeding the debt maturing over the next 12 months;
b) Revenue/Debt exceeding 80%; and c) Homebuilding
EBITDA/Interest exceeding 3.0x on a sustained basis
The ratings could be downgraded further if the company fails to
reduce its borrowings materially over the next 6 months. The
ratings could also be downgraded further if the operating
performance and liquidity position continues to decline or the
company engages in any material debt-funded land acquisitions.
Credit metrics indicative of such downward pressure include a)
cash and cash equivalents staying below the debt maturing over
the next 12 months; b) Revenue/Debt staying below 70%; c)
Homebuilding EBITDA/Interest falling below 2.0x on a sustained
basis.
The principal methodology used in these ratings was Homebuilding
And Property Development Industry published in April 2015.
Lodha Developers Private Limited is the largest real estate
developer in India in terms of sales of residential apartments.
For fiscal year ended March 31, 2016, the Company reported
contracted sales of INR64.3 billion. LDPL is focused on
residential development in the Mumbai Metropolitan Region with
some projects in nearby Pune. More recently, the company along
with its promoters has expanded into the London market by
acquiring two properties, now in the process of development.
LDPL is privately held by the Lodha family.
These ratings were downgraded
Issuer: Lodha Developers Private Limited
Long Term Corporate Family Ratings: Downgraded from Ba3 to B1
Negative outlook is maintained
Issuer : Lodha Developers International Limited
12% USD200 million Foriegn Currency Senior Unsecured bonds due
in 2020: Downgraded from Ba3 to B1
Negative outlook is maintained
M. P. K. ISPAT: CRISIL Lowers Rating on INR100MM Loan to 'B'
------------------------------------------------------------
CRISIL has downgraded the rating on the bank facilities of
M. P. K. Ispat India Private Limited (MPKI; a part of the MPK
group) to 'CRISIL B/Stable/CRISIL A4' from 'CRISIL BB-
/Stable/CRISIL A4+'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 100 CRISIL B/Stable (Downgraded
from 'CRISIL BB-/Stable')
Letter of Credit 50 CRISIL A4 (Downgraded from
'CRISIL A4+')
Standby Line of 15 CRISIL B/Stable (Downgraded
Credit from 'CRISIL BB-/Stable')
Term Loan 65 CRISIL B/Stable (Downgraded
from 'CRISIL BB-/Stable')
The downgrade reflects weakening of the liquidity of the group on
account of lower realisation from steel products. The group is
expected to report operating income of below INR900 million in
2015-16 (adjusted for interparty sales) compared to INR1.03
billion in 2014-15. The net cash accruals are consequently
expected to be reported at less than INR40 million in 2015-16
against debt repayment obligations of INR47 million over the same
period. However, the group is expected to have ensured regular
repayments using the funds released from a decline in working
capital. In 2016-17, the group is expected to generate net cash
accruals of around INR50 million against debt repayment
obligations of INR47 million over the same period. The movement
of steel product prices would remain a key rating sensitivity
factor.
The rating reflects the MPK group's modest financial risk profile
because of modest debt protection metrics, and working capital-
intensive operations. These rating weaknesses are partially
offset by the extensive experience of its promoters in the steel
industry and semi-integrated facilities
For arriving at the ratings, CRISIL has combined the business and
financial risk profiles of MPKI, M. P. K. Metals Pvt Ltd (MPKM),
and M.P.K Steel India Pvt Ltd (MPKS). This is because the three
companies, together referred to as the MPK group, have common
ownership and management, and MPKM and MPKS have the same product
profile and sell under a common brand. MPKI has been set up in
order to backward integrate into billet manufacturing for
supporting the operations of the other two companies and has also
received corporate guarantees from them for its bank funding.
Outlook: Stable
CRISIL believes the MPK group will continue to benefit over the
medium term from the extensive industry experience of its
promoters; however, liquidity would remain sensitive to steel
product prices. The outlook may be revised to 'Positive' in case
of an increase in revenue and profitability leading to more-than-
expected cash accrual and hence better liquidity, or fresh equity
infusion, resulting in improved capital structure and debt
protection metrics. Conversely, the outlook may be revised to
'Negative' if liquidity weakens significantly, most likely
because of lower-than-expected cash accrual, or in case of large,
debt-funded capital expenditure, further weakening the capital
structure.
MPKS was set up as a private limited concern in 2005. It
manufactures structural products, including thermo-mechanically
treated (TMT) bars, channels, angles, and joints, at its
manufacturing facility in Jaipur. The company markets the
products under its own brand, MPK. The operations of the company
are managed by Mr. Santosh Kumar Upadhyay and his son, Mr. Manoj
Upadhyay.
MPKM was set up as a private limited concern in 2009 and
manufactures structural products including TMT bars, channels,
angles, and joints at its manufacturing facility in Jaipur and
markets the same under its MPK brand. The operations of the
company are managed by Mr. Santosh Kumar Upadhyay and Mr. Manoj
Upadhyay.
MPKI was set up as a private limited concern in 2010 and started
operations in 2012-13 (refers to financial year, April 1 to March
31) with 2013-14 being its first full year of operations. The
company has been set up as a backward integration unit of the
group to manufacture steel billets and ingots for captive
consumption in MPKS and MPKM. The company has its plant in Bagru
(Jaipur) and is managed by Mr. Santosh Kumar Upadhyay and Mr.
Manoj Upadhyay.
M. P. K. METALS: CRISIL Lowers Rating on INR48MM Cash Loan to B
---------------------------------------------------------------
CRISIL has downgraded the rating on the long term bank facilities
of M. P. K. Metals Private Limited (MPKM; a part of the MPK
group) to 'CRISIL B/Stable' from 'CRISIL BB-/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 48 CRISIL B/Stable (Downgraded
from 'CRISIL BB-/Stable')
Standby Line of
Credit 2.2 CRISIL B/Stable (Downgraded
from 'CRISIL BB-/Stable')
Term Loan 9.8 CRISIL B/Stable (Downgraded
from 'CRISIL BB-/Stable')
The downgrade reflects weakening of the liquidity of the group on
account of lower realisation from steel products. The group is
expected to report operating income of below INR900 million in
2015-16 (adjusted for interparty sales) compared to INR1.03
billion in 2014-15. The net cash accruals are consequently
expected to be reported at less than INR40 million in 2015-16
against debt repayment obligations of INR47 million over the same
period. However, the group is expected to have ensured regular
repayments using the funds released from a decline in working
capital. In 2016-17, the group is expected to generate net cash
accruals of around INR50 million against debt repayment
obligations of INR47 million over the same period. The movement
of steel product prices would remain a key rating sensitivity
factor.
The rating reflects the MPK group's modest financial risk profile
because of modest debt protection metrics, and working capital-
intensive operations. These rating weaknesses are partially
offset by the extensive experience of its promoters in the steel
industry and semi-integrated facilities.
For arriving at the ratings, CRISIL has combined the business and
financial risk profiles of MPKM, M.P.K Steel India Pvt Ltd
(MPKS), and M. P. K. Ispat India Pvt Ltd (MPKI). This is because
the three companies, together referred to as the MPK group, have
common ownership and management, and MPKM and MPKS have the same
product profile and sell under a common brand. MPKI has been set
up in order to backward integrate into billet manufacturing for
supporting the operations of the other two companies and has also
received corporate guarantees from them for its bank funding.
Outlook: Stable
CRISIL believes the MPK group will continue to benefit over the
medium term from the extensive industry experience of its
promoters; however, liquidity would remain sensitive to steel
product prices. The outlook may be revised to 'Positive' in case
of an increase in revenue and profitability leading to more-than-
expected cash accrual and hence better liquidity, or fresh equity
infusion, resulting in improved capital structure and debt
protection metrics. Conversely, the outlook may be revised to
'Negative' if liquidity weakens significantly, most likely
because of lower-than-expected cash accrual, or in case of large,
debt-funded capital expenditure, further weakening the capital
structure.
MPKS was set up as a private limited concern in 2005. It
manufactures structural products, including thermo-mechanically
treated (TMT) bars, channels, angles, and joints, at its
manufacturing facility in Jaipur. The company markets the
products under its own brand, MPK. The operations of the company
are managed by Mr. Santosh Kumar Upadhyay and his son, Mr. Manoj
Upadhyay.
MPKM was set up as a private limited concern in 2009 and
manufactures structural products including TMT bars, channels,
angles, and joints at its manufacturing facility in Jaipur and
markets the same under its MPK brand. The operations of the
company are managed by Mr. Santosh Kumar Upadhyay and Mr. Manoj
Upadhyay.
MPKI was set up as a private limited concern in 2010 and started
operations in 2012-13 (refers to financial year, April 1 to
March 31) with 2013-14 being its first full year of operations.
The company has been set up as a backward integration unit of the
group to manufacture steel billets and ingots for captive
consumption in MPKS and MPKM. The company has its plant in Bagru
(Jaipur) and is managed by Mr. Santosh Kumar Upadhyay and Mr.
Manoj Upadhyay.
M.P.K. STEEL: CRISIL Lowers Rating on INR150MM Cash Loan to 'B'
---------------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facilities
of M.P.K. Steel India Private Limited (MPKS; part of the MPK
group) to 'CRISIL B/Stable' from 'CRISIL BB-/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 150 CRISIL B/Stable (Downgraded
from 'CRISIL BB-/Stable')
Proposed Long Term 3.6 CRISIL B/Stable (Downgraded
Bank Loan Facility from 'CRISIL BB-/Stable')
Standby Line of Credit 5.0 CRISIL B/Stable (Downgraded
from 'CRISIL BB-/Stable')
Term Loan 24.4 CRISIL B/Stable (Downgraded
from 'CRISIL BB-/Stable')
The downgrade reflects weakening of the liquidity of the group on
account of lower realisation from steel products. The group is
expected to report operating income of below INR900 million in
2015-16 (adjusted for interparty sales) compared to INR1.03
billion in 2014-15. The net cash accruals are consequently
expected to be reported at less than INR40 million in 2015-16
against debt repayment obligations of INR47 million over the same
period. However, the group is expected to have ensured regular
repayments using the funds released from a decline in working
capital. In 2016-17, the group is expected to generate net cash
accruals of around INR50 million against debt repayment
obligations of INR47 million over the same period. The movement
of steel product prices would remain a key rating sensitivity
factor.
The rating reflects the MPK group's modest financial risk profile
because of modest debt protection metrics, and working capital-
intensive operations. These rating weaknesses are partially
offset by the extensive experience of its promoters in the steel
industry and semi-integrated facilities.
For arriving at the rating, CRISIL has combined the business and
financial risk profiles of MPKS, M. P. K. Metals Pvt Ltd (MPKM),
and M. P. K. Ispat India Pvt Ltd (MPKI). This is because the
three companies, together referred to as the MPK group, have
common ownership and management, and MPKM and MPKS have the same
product profile and sell under a common brand. MPKI has been set
up in order to backward integrate into billet manufacturing for
supporting the operations of the other two companies and has also
received corporate guarantees from them for its bank funding.
Outlook: Stable
CRISIL believes the MPK group will continue to benefit over the
medium term from the extensive industry experience of its
promoters; however, liquidity would remain sensitive to steel
product prices. The outlook may be revised to 'Positive' in case
of an increase in revenue and profitability leading to more-than-
expected cash accrual and hence better liquidity, or fresh equity
infusion, resulting in improved capital structure and debt
protection metrics. Conversely, the outlook may be revised to
'Negative' if liquidity weakens significantly, most likely
because of lower-than-expected cash accrual, or in case of large,
debt-funded capital expenditure, further weakening the capital
structure.
MPKS was set up as a private limited concern in 2005. It
manufactures structural products, including thermo-mechanically
treated (TMT) bars, channels, angles, and joints, at its
manufacturing facility in Jaipur. The company markets the
products under its own brand, MPK. The operations of the company
are managed by Mr. Santosh Kumar Upadhyay and his son, Mr. Manoj
Upadhyay.
MPKM was set up as a private limited concern in 2009 and
manufactures structural products including TMT bars, channels,
angles, and joints at its manufacturing facility in Jaipur and
markets the same under its MPK brand. The operations of the
company are managed by Mr. Santosh Kumar Upadhyay and Mr. Manoj
Upadhyay.
MPKI was set up as a private limited concern in 2010 and started
operations in 2012-13 (refers to financial year, April 1 to March
31) with 2013-14 being its first full year of operations. The
company has been set up as a backward integration unit of the
group to manufacture steel billets and ingots for captive
consumption in MPKS and MPKM. The company has its plant in Bagru
(Jaipur) and is managed by Mr. Santosh Kumar Upadhyay and Mr.
Manoj Upadhyay.
MECWEL CONSTRUCTIONS: CRISIL Reaffirms B+ Rating on INR100MM Loan
-----------------------------------------------------------------
CRISIL's ratings on the bank facilities of Mecwel Constructions
(Mecwel) continue to reflect the firm's modest scale of
operations in the competitive engineering-procurement-
construction industry, and large working capital requirement.
These rating weaknesses are partially offset by its promoters'
extensive industry experience, and its adequate financial risk
profile because of a moderate networth, comfortable gearing, and
above-average debt protection metrics.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 15 CRISIL A4 (Reaffirmed)
Overdraft Facility 100 CRISIL B+/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility 25 CRISIL B+/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes Mecwel will continue to benefit over the medium
term from its promoters' extensive industry experience. The
outlook may be revised to 'Positive' if there is a sustained
increase in revenue, while profitability is maintained, or
continued improvement in working capital management. Conversely,
the outlook may be revised to 'Negative' in case of a steep
decline in revenue or in profitability margins, or significant
weakening of the firm's capital structure caused most likely by a
stretched working capital cycle.
Mecwel, established in 1985, undertakes mechanical engineering
contracts for erection, commissioning, testing, and maintenance
of structural works and electrical equipment. The firm primarily
caters to the power and sugar industries, and is based in
Hyderabad. It currently has five partners ' Mr. A V V Narayana,
Mrs. A Vijayalakshmi, Mr. P Prasada Rao, Mr. P Shivaram, and Mr.
P Vijayaratnam.
MOHIT VENTURES: CRISIL Assigns 'B' Rating to INR140MM Term Loan
---------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable/CRISIL A4' ratings to
the bank facilities of Mohit Ventures Private Limited (Mohit).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 140 CRISIL B/Stable
Bank Guarantee 35 CRISIL A4
Cash Credit 65 CRISIL B/Stable
The ratings reflect Mohit's exposure to funding, implementation,
and demand risks associated with its ongoing project, accentuated
by initial stage of implementation. The rating also reflects
below-average financial risk profile with small networth and an
expected high gearing. These weaknesses are partially offset by
the benefits derived from the extensive entrepreneurial
experience of Mohit's promoters.
Outlook: Stable
CRISIL believes that Mohit will continue to benefit over the
medium term from its promoter's extensive entrepreneurial
experience. The outlook may be revised to 'Positive' if
operations of on-going project stabilise, or lower-than-expected
debt is contracted. The outlook may be revised to 'Negative' if
any significant time or cost overruns or lower-than-expected
demand adversely affect the liquidity profile.
Incorporated in 1999 as a private limited company by Mr. Pawan
Kumar Gupta, Mohit is based in Koderma (Jharkhand). Managed by
Mr. Anil Kumar Pandey and Mr. Jitesh Kumar Singh, it is currently
setting up a unit to manufacture TMT bars.
NARESH KUMAR: CRISIL Reaffirms B+ Rating on INR82.5MM Cash Loan
---------------------------------------------------------------
CRISIL's rating on the long-term bank facility of Naresh Kumar
Rajendra Kumar (NKRK) continues to reflect the firm's modest
scale of operations marked by geographical concentration in its
revenue profile, and susceptibility of profitability to raw
material price volatility and intense competition.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit Book Debt 82.5 CRISIL B+/Stable (Reaffirmed)
The rating also factors in a modest financial risk profile. These
rating weaknesses are partially offset by the extensive
experience of the firm's promoters in the agricultural (agro)
trading business.
Outlook: Stable
CRISIL believes NKRK will continue to benefit over the medium
term from the extensive industry experience of its promoters. The
outlook may be revised to 'Positive' in case of more-than-
expected increase in revenue and profitability, or significant
improvement in capital structure and working capital management.
Conversely, the outlook may be revised to 'Negative' in case of a
decline in profitability or revenue, resulting in lower-than-
expected cash accrual, substantial debt-funded capital
expenditure, or a stretched working capital cycle, leading to
deterioration of the financial risk profile.
NKRK was originally set up in 1980 as a proprietorship firm by
Mr. Mahaveer Prasad Vijay. In 2011, the firm was reconstituted as
a partnership firm with Mr. Naresh Kumar Vijay and Mr. Rajendra
Kumar Vijay (sons of Mr. Mahaveer Prasad Vijay) joining as
partners. NKRK trades in agro commodities, mainly wheat. Its
office is in Baran, Rajasthan, close to the food grain market,
which ensures easy availability of agro commodities.
OMEGA COLORS: ICRA Suspends 'B' Rating on INR2.0cr Cash Loan
------------------------------------------------------------
ICRA has suspended the long term rating of [ICRA]B outstanding on
the INR2.00 crore cash credit facilities of Omega Colors Private
Limited. ICRA has also suspended the short term rating of
[ICRA]A4 outstanding on the INR1.20 crore fund based bank
facility (Foreign Demand Bills Purchase), and the INR1.70 crore
non-fund based bank facility (Letter of Credit / Letter of
Guarantee) of the company. The suspension follows ICRA's
inability to carry out a rating surveillance in the absence of
the requisite information from the company.
ORIENTAL PATHWAYS: CARE Lowers Rating on INR102.52cr Loan to D
--------------------------------------------------------------
CARE revises the rating assigned to the bank facilities of
Oriental Pathways (Agra) Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 102.52 CARE D Revised from
CARE BBB-
Rating Rationale
The revision in the rating of the bank facilities of Oriental
Pathways (Agra) Private Limited (OPAPL) takes into account
delay in servicing of debt obligations by the company due to its
weak liquidity position emanating from low toll revenue.
OPAPL is a special purpose vehicle (SPV) promoted by Oriental
Structural Engineers Private Limited (OSE) for improvement,
operation and maintenance including strengthening and widening of
the existing two-lane road to four lane dual carriageway from km
17.756 - km 62.295 of NH-11 (Agra - Bharatpur Section) in the
states of Uttar Pradesh and Rajasthan on a Build, Operate and
Transfer (BOT) basis. OPAPL had entered into a Concession
Agreement (CA) with NHAI on March 10, 2006, for the project. The
concession period for the project is 20 years including
construction period of 30 months. The toll collection started
from July 2009.
During FY15 (refers to the period April 1 to March 31), OPAPL
reported total operating income of INR28.33 crore and net
loss of INR9.09 crore as compared to total operating income of
INR24.87 crore and net loss of INR1.82 crore in FY14. During
11MFY16, OPAPL achieved a toll collection of INR30.82 crore.
ORIENTAL PATHWAYS (NAGPUR): CARE Lowers Loan Rating to D
--------------------------------------------------------
CARE revises the rating assigned to the bank facilities of
Oriental Pathways (Nagpur) Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 104.21 CARE D Revised from
CARE BBB-
Rating Rationale
The revision in the rating of the bank facilities of Oriental
Pathways (Nagpur) Private Limited (OPNPL) takes into account
delay in servicing of debt obligations by the company due to its
weak liquidity position emanating from low toll revenue.
OPNPL is a Special Purpose Vehicle (SPV) promoted by Oriental
Structural Engineers Private Limited (OSEPL) for the improvement,
operation and maintenance including strengthening and widening of
the existing two-lane road to a four lane dual carriageway from
km 50 to km 100 of NH-6 (Kondhali-Talegaon Section) in the State
of Maharashtra on a Build, Operate and Transfer (BOT) basis.
OPNPL had entered into a Concession Agreement (CA) with National
Highway Authority of India (NHAI) on September, 2006 with a
concession period of 20 years including construction period of 3
months. The
project cost of INR317.84 crore was funded in a D/E ratio of
3.36x. The project got completed in March 2008 and the
company has started toll collection from 5th May, 2008. The
concession period is for a period of 20 years (from the
appointed date i.e. Sep 6, 2006) till September 5, 2026.
The current shareholders of the company are OSEPL and Prakash
Asphaltings and Toll Highways (India) Ltd with each holding
49.99% each and the balance is held by Delhi Brass & Metal Works
Ltd.
During FY15 (refers to the period April 1 to March 31), OPNPL
reported total operating income of INR28.23 crore and net
loss of INR6.28 crore as compared to total operating income of
INR30.75 crore and net loss of INR8.22 crore in FY14.
ORION WATER: CRISIL Assigns B+ Rating to INR47.5MM Term Loan
------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the bank
facilities of Orion Water Treatment Pvt Ltd (Orion).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 47.5 CRISIL B+/Stable
Proposed Long Term
Bank Loan Facility 12.7 CRISIL B+/Stable
Cash Credit 15.0 CRISIL B+/Stable
Drop Line Overdraft
Facility 4.8 CRISIL B+/Stable
The rating reflects Orion's modest scale of and working capital-
intensive operations, and below-average financial risk profile.
These rating weaknesses are partially offset by the extensive
experience of promoters in the water treatment and waste water
management industry.
Outlook: Stable
CRISIL believes Orion will continue to benefit over the medium
term from the extensive industry experience of promoters. The
outlook may be revised to 'Positive' if improvement in scale of
operations, operating profitability or working capital management
leads to a better financial risk profile, especially liquidity.
Conversely, the outlook may be revised to 'Negative' if weakening
of working capital management, or significant, debt-funded
capital expenditure, or lower profitability leads to
deterioration in liquidity.
Orion was set up in 2009 to undertake turnkey projects in the
area of water treatment, waste water/effluent treatment, sewage
treatment plants, and other products. The company provides
services of design, engineering, procurement, erection, and
commissioning, along with maintenance of the plants. The company
has a plant in Ambattur (Chennai) and is setting up another plant
in Sri Perumbadur. It is managed by Mr. M Bhaskaran and other
promoters.
PINCHA GRIHA: CRISIL Assigns B+ Rating to INR135.6MM Term Loan
--------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-
term bank facility of Pincha Griha Nirmaan Pvt Ltd (PGNPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 135.6 CRISIL B+/Stable
The rating reflects the company's exposure to risks inherent in
the real estate industry, and project and geographical
concentration in its revenue profile. These weaknesses are
partially offset by extensive experience of its promoters in the
real estate construction industry, and limited exposure to
funding and implementation risk for its ongoing project,
Someshwar Textile Market.
Outlook: Stable
CRISIL believes PGNPL will continue to benefit over the medium
term from the extensive industry experience of its promoters. The
outlook may be revised to 'Positive' if the company generates
substantial cash flow driven by expedited execution of project
and higher customer advances. The outlook may be revised to
'Negative' if cash flow is significantly low, either because of
subdued response to project or low customer advances or delay in
completion of project, leading to weakening of financial risk
profile, particularly liquidity.
PGNPL, incorporated in 2007, is constructing a commercial
building, Someshwar Textile Market, in Surat, Gujarat. The
company is part of Gujarat-based Someshwar group, which has
extensive experience in the real estate industry. Mr. Abhishek S
Rathi and Mr. Jaydayal Ladha are directors of the company.
PK THUNGAN: CRISIL Assigns B+ Rating to INR200MM Cash Loan
----------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to
the bank facility of PK Thungan Builders Private Limited.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Cash
Credit Limit 200 CRISIL B+/Stable
Proposed Letter of
Credit 50 CRISIL A4
The ratings reflect PKTBPL's nascent and small scale of
operations in high fragmented industry along with geographical
concentration. These rating weaknesses are partially offset by
PKTBPL s revenue visibility aided by healthy order book and
promoters' extensive experience in the construction industry
Outlook: Stable
CRISIL expects that PKTBPL will maintain its business risk
profile over the medium term backed by the promoters' extensive
experience and healthy order book position. The outlook may be
revised to 'Positive' in case of significant improvement in scale
of operations along with geographical diversification of its
revenues and sustenance of profitability while maintaining its
working capital management. Conversely, the outlook may be
revised to 'Negative', if the company registers less than
expected accruals or if it undertakes any large additional debt-
funded capex leading to deterioration in its financial risk
profile or pressure on liquidity due to further stretch in
working capital requirements.
Incorporated in 2014, PKTBPL based in Hyderabad, is promoted by
Mr. JVS Srinivas & Mr. PK Thungan. PKTBPL is engaged in
construction of tunnels for hydroelectric projects, power houses,
dams, and other types of heavy construction works mainly in
Andhra Pradesh.
PLUS MEDICARE: CRISIL Assigns B+ Rating to INR350MM Term Loan
-------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-
term bank facility of Plus Medicare Hospitals Pvt Ltd (PMHPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 350 CRISIL B+/Stable
The rating reflects PMHPL's exposure to risks related to its
ongoing hospital project and to subsequent ramp-up in sales post
commencement of operations. The rating also factors in an
expected average financial risk profile due to large, debt-funded
capital expenditure for the hospital project. These rating
weaknesses are partially offset by the fund support from
promoters in the form of equity and unsecured loans, leading to
adequate project capitalisation and benefits expected from the
appointment of reputed operations and management (O&M) partner
Fortis Healthcare Ltd (FHL) for the hospital.
Outlook: Stable
CRISIL believes PMHPL will benefit over the medium term from its
O&M tie-up with FHL and committed fund support from promoters.
The outlook may be revised to 'Positive' in case of timely ramp-
up in operations and higher-than-expected occupancy, leading to
sizable cash accrual during the early stage of operations.
Conversely, the outlook may be revised to 'Negative' in case of
any delay in commencement of operations or lower-than-expected
revenue or accrual, resulting in pressure on financial risk
profile and liquidity.
Established in 2011 and promoted by Mr. Satender Pal Chhabra, Mr.
Mahendra Pal Singh Chhabra, and Mr. Sanjeev Modi, PMHPL is
setting up a multi-speciality hospital and neurology centre at
Udaipur (Rajasthan) which is expected to start commercial
operations in November 2016. It has appointed FHL as O&M agency
for the hospital.
PREMIER PIPES: CRISIL Reaffirms B+ Rating on INR65MM Cash Loan
--------------------------------------------------------------
CRISIL's ratings on the bank facilities of Premier Pipes Limited
(PPL) continue to reflect PPL's working-capital-intensive
operations and low operating profitability. These weaknesses are
partially offset by the benefits PPL derives from its promoters'
extensive experience.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 20 CRISIL A4 (Reaffirmed)
Cash Credit 65 CRISIL B+/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility 15 CRISIL B+/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that PPL will maintain its business risk profile,
over the medium term, owing to its promoters' extensive
experience. The outlook may be revised to 'Positive' if PPL
reports significant improvement in scale of operations,
profitability and working capital management, thereby
strengthening its liquidity. Conversely, the outlook may be
revised to 'Negative' if PPL reports low cash accruals, large
additional debt-funded capital expenditure, or stretched working
capital requirements, thereby weakening its financial risk
profile, particularly liquidity.
Kanpur-based PPL, set up in 1971 and promoted by Mr. Ajay Kumar
Jain, manufactures primarily mild steel, galvanised iron pipes
and polyvinyl chloride pipes.
RAM SWAROOP: CARE Assigns B+ Rating to INR5.0cr LT Loan
-------------------------------------------------------
CARE assigns 'CARE B+/CARE A4' ratings to bank facilities of
Ram Swaroop Shivhare.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 5.00 CARE B+ Assigned
Long/Short term Bank
Facilities 5.00 CARE B+/CARE A4
Assigned
Rating assigned by CARE is based on the capital deployed by the
proprietor and the financial strength of the firm at present. The
rating may undergo change in case of withdrawal of capital or the
unsecured loans brought in by the proprietor in addition to the
financial performance and other relevant factors.
Rating Rationale
The ratings assigned to the bank facilities of Ram Swaroop
Shivhare (RSH) are constrained on account of high business risk
arising out of operations of the firm in a highly regulated
liquor industry and trading nature of business characterized by
thin profitability. The ratings are also constrained on account
of limited financial flexibility considering proprietorship
nature of constitution and working capital intensive nature of
operations.
The ratings, however, derive strength from the experienced
promoters and financial risk profile marked by moderate
gearing and debt coverage indicators.
The ability of RSH to increase its scale of operation along with
improvement in profitability is the key rating sensitivity.
Any significant changes in state government's policy for liquor
trading shall also be the key rating monitorable.
Incorporated in 1990, RSH is a sole proprietorship firm which is
into the business of retailing of alcohol. RSH is part of
Shivhare Liquor Group which is based out of Madhya Pradesh (MP).
RSH undertakes retail trade of Indian made foreign liquor (IMFL),
country liquor (CL), wine, etc, and holds retail license for
liquor shops in the state of MP. RSH has been allotted retail
liquor license for 18 shops in different districts of Madhya
Pradesh for FY15 (refers to the period April 1 to March 31) &
FY16. The firm enters into open tendering process every year to
avail license for the retailing of the liquor. Depending upon
the allotment of shops during tendering, the number of shops held
by the company varies every year.
Based on the audited results for FY15, RSH reported a total
operating income (TOI) of INR76.18 crore (FY14: INR108.39
crore) and profit after tax (PAT) of INR0.60 crore (FY14: INR1.04
crore).
RISING SUN: CARE Assigns 'D' Rating to INR7cr LT Loan
-----------------------------------------------------
CARE assigns 'CARE D' rating to the bank facilities of Rising Sun
Power Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities
Term Loan 7 CARE D Assigned
Rating Rationale
The rating assigned to the bank facilities of Rising Sun Power
Private Limited (RSPL) takes into account the instances of
delays in debt servicing by the company owing to insufficient
cash flow generation on account of the project running at low
capacity utilization factor.
RSPL was incorporated in December 2009 by Mr Ashirwad Agarwal and
Mr R. Shridhar of Bangalore, Karnataka, with the objective of
setting up a hydel power plant. The company commenced operation
from October 26, 2014, with commencement of 2.5 MW (1.25 MWx2)
run-of-the-river hydro power generation plant in Ramanagaram
district of Karnataka. RSPL has already entered into medium-term
(5 years) power purchase agreements (PPAs) with Ozone Properties
Private Limited for the entire hydro power generation capacity
(expiring in the year 2019) at a tariff of INR6.05 per kwh, which
ensures steady revenues from sale of power. The project was setup
at an aggregate cost of INR 21.71 crore, financed at a debt
equity mix of 0.68:1.
During FY15 (refers to the period April 1 to March 31), the
company reported after tax loss of INR1.46 crore on a total
operating income of INR0.32 crore.
SANGATH INFRASTRUCTURES: CRISIL Cuts Rating on INR140MM Loan to D
-----------------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facilities
of Sangath Infrastructures Private Limited (SIPL) to 'CRISIL D'
from 'CRISIL BB/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term 10 CRISIL D (Downgraded from
Bank Loan Facility 'CRISIL BB/Stable')
Term Loan 140 CRISIL D (Downgraded from
'CRISIL BB/Stable')
The downgrade reflects SIPL's delay in meeting term loan
obligation because of weak liquidity.
The company faces risks and cyclicality inherent in the real
estate industry, and risks related to timely receipt of customer
advances. However, it benefits from extensive experience of its
promoters in the real estate market in Ahmedabad, Gujarat.
SIPL, incorporated in 2009, develops residential and commercial
projects in Ahmedabad. It is promoted by Gujarat-based Shah and
Jain families.
SEATEL ELECTRONICS: CRISIL Assigns B- Rating to INR50MM Loan
------------------------------------------------------------
CRISIL has assigned its 'CRISIL B-/Stable/CRISIL A4' ratings to
the bank loan facilities of Seatel Electronics India Private
Limited (SEIPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 10 CRISIL A4
Cash Credit 50 CRISIL B-/Stable
The ratings reflect weak financial risk profile because of high
gearing and low networth along with highly working capital-
intensive operations in addition to revenue remaining susceptible
to intense competition in the trading industry. These weaknesses
are mitigated by promoters' extensive experience and longstanding
presence in this industry.
Outlook: Stable
CRISIL believes SEIPL will benefit from its established market
position and promoters' extensive industry experience. The rating
outlook may be revised to 'Positive' if scale of operations
improves while maintaining capital structure or if profitability
improves significantly leading to better business and financial
risk profile. Conversely, the outlook will be revised to
'Negative' if financial risk profile deteriorates because of
lower-than-expected profitability or if a stretch in working
capital cycle results in high debt.
SEIPL a Jaipur-based company, was established in 2003 and is
promoted by Mr. Pankaj Sharma and Mr. Neeraj Sharma. The company
trades in various electronic products such as computer
peripherals, mobiles phones, and inverter batteries in addition
to acting as Carrying and Forwarding (C&F) agent for it. The
areas of operation are: Rajasthan, Odisha, Haryana, Delhi and
Kolkata.
SEIPL reported net profit of INR1.1 million on net sales of
INR252.9 million in FY 2014-15 against net profit of INR2.8
million on net sales of INR235.6 million in FY 2013-14.
SETMAX CERAMIC: ICRA Suspends B- Rating on INR3.5cr Cash Loan
-------------------------------------------------------------
ICRA has suspended [ICRA]B- rating assigned to the INR3.50 crore
working capital facilities & INR2.78 crore term loan facility of
Setmax Ceramic. ICRA has also suspended [ICRA]A4 rating assigned
to the INR1.50 crore short term non fund based facilities of
Setmax Ceramic. The suspension follows ICRA's inability to carry
out a rating surveillance in the absence of the requisite
information from the company.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 3.50 [ICRA]B- suspended
Term Loan 2.78 [ICRA]B- suspended
Bank Guarantee 1.50 [ICRA]A4 suspended
Setmax Ceramic (SC) was established as partnership firm in 2010.
It is currently managed by partners Mr. Hardik Ghodasara and Mr.
Vinod Bhadja. The promoters have been involved in the ceramic
industry for past many years through manufacturing and trading of
ceramic products and have established firm to cater domestic
porcelain tiles market. The firm is involved in manufacturing and
supplying body clay with installed capacity of 91,250 MT per
annum and manufacturing of porcelain floor tiles with installed
capacity of 43,800 MT per annum. The commercial production of
body clay was commenced in July 2010 while production of
porcelain floor tiles commenced in April 2012. The manufacturing
facility of SC is located at Wakaner, Gujarat.
SHREE BALAJI: CRISIL Assigns B+ Rating to INR100MM e-DFS
--------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long
term bank facility of Shree Balaji Steel Enterprises (SBSE).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Electronic Dealer
Financing Scheme(e-DFS) 100 CRISIL B+/Stable
The rating reflects SBSE's modest scale of operations in
intensely competitive steel trading industry, geographic
concentration in its revenue profile and below-average financial
risk profile marked by high Total outside liabilities to adjusted
networth (TOLANW), modest debt protection metrics and networth.
These rating weaknesses are partially offset by the benefits
derived from the extensive industry experience of partner's and
its established relation with its supplier and customers.
Outlook: Stable
CRISIL believes SBSE will continue to benefit over the medium
term from partner's extensive industry experience. The outlook
may be revised to 'Positive' if revenue and profitability
increase substantially, leading to better financial risk profile,
or if partners infuse significant capital, resulting in improved
capital structure. Conversely, the outlook may be revised to
'Negative' if the firm undertakes aggressive, debt-funded
expansions, or if revenue and profitability decline sharply, or
if partners withdraw large capital, leading to deterioration in
financial risk profile.
Set up in 2009 as a partnership firm, SBSE is the authorised
distributor for Jindal Steel and Power Limited (JSPL, rated
'CRISIL D') in Hyderabad, Telangana and deals in products such as
Angles, Beams, Channels, Plates, Pipes, and Bars. The day to day
operations of the firm are managed by Mr. Deepak Agarwal.
For 2015-16 (refers to financial year, April 1 to March 31),
reported provisional profit after tax (PAT) of INR4 million on
net sales of INR610 million against PAT of INR2 million on net
sales of INR333 million for 2014-15.
SHREE DATTA: CRISIL Reaffirms B+ Rating on INR95MM Cash Loan
------------------------------------------------------------
CRISIL's rating on the long-term bank facilities of Shree Datta
Fertilizers and Chemical Private Limited (SDFCPL) continues to
reflect the company's modest scale of operations, large working
capital requirement, and susceptibility to the level of
agricultural activity in and around Vidarbha. The rating also
factors in weak debt protection metrics and exposure to risks
related to regulatory changes affecting raw material procurement.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 95 CRISIL B+/Stable (Reaffirmed)
Proposed Cash
Credit Limit 10 CRISIL B+/Stable (Reaffirmed)
These rating weaknesses are partially offset by the extensive
experience of the company's promoter in the fertiliser and
chemical industry and benefits expected from the healthy demand
for granular fertilisers.
Outlook: Stable
CRISIL believes SDFCPL will continue to benefit over the medium
term from its promoter's extensive industry experience and the
healthy demand for granular fertilisers. The outlook may be
revised to 'Positive' in case of a significant increase in
revenue and net cash accrual, while capital structure and debt
protection metrics improve. Conversely, the outlook may be
revised to 'Negative' in case of a decline in scale of
operations, a stretched working capital cycle, or contraction of
considerable debt.
SDFCPL was set up by Mr. Ashok Ratanlal Soni in 1999. It
manufactures nitrogen, phosphorous, and potassium (NPK)
granulated mixed fertilisers. The company sells these primarily
through a network of dealers in and around Vidarbha.
SHREE MANIBHADRA: CRISIL Lowers Rating on INR530MM Cash Loan to D
-----------------------------------------------------------------
CRISIL has downgraded its ratings on the bank facilities of
Shree Manibhadra Food Product Pvt Ltd (SMFPL; part of Manibhadra
group) to 'CRISIL D/CRISIL D' from 'CRISIL BBB-/Stable/CRISIL
A3'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 530 CRISIL D (Downgraded from
'CRISIL BBB-/Stable')
Letter of Credit 50 CRISIL D (Downgraded from
'CRISIL A3')
Term Loan 25 CRISIL D (Downgraded from
'CRISIL BBB-/Stable')
The downgrade reflects the group's continuous overutilisation of
bank line and delay in meeting term loan obligation.
For arriving at its ratings, CRISIL has combined the business and
financial risk profiles of SMFPL and Dhanshree Seeds Pvt Ltd
(DSPL). This is because both the companies, together referred to
as the Manibhadra group, are in a similar line of business, have
a common management, and have extended cross guarantees for each
other's bank loan facilities.
SMFPPL, incorporated in 2010, is promoted by Ahmedabad-based Mr.
Prakash Shah and his family members and relatives. The company
processes non-basmati rice.
Incorporated in 2012 by Mr. Prakash Shah, DNSDPLis into
processing of non-basmati rice with its processing unit based in
Moriya (Gujarat). The total processing capacity of unit is 5
tonnes per hour.
SHREE SAI: CRISIL Assigns B+ Rating to INR150MM Loan
----------------------------------------------------
CRISIL has revoked the suspension of its rating on the long-term
bank facility of Shree Sai Marketing and Trading Co. (SSMTC) and
has assigned its 'CRISIL B+/Stable' rating to the facility. The
rating was previously 'Suspended' by CRISIL on January 25, 2016,
since SSMTC had not provided necessary information required for a
rating review. It has now shared the requisite information
enabling CRISIL to assign rating to the bank facility.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 150 CRISIL B+/Stable (Assigned;
Suspension Revoked)
The rating reflects SSMTC's exposure to volatility in raw
material prices and tender-based nature of business, and large
working capital requirement because of stretched receivables. The
rating also factors in an average financial risk profile because
of large capital withdrawal by partners. These rating weaknesses
are partially offset by the extensive experience of promoters in
providing services to government agencies and its established
association with these agencies, along with an expected ramp-up
in operations.
Outlook: Stable
CRISIL believes SSMTC will benefit over the medium term from the
extensive industry experience of promoters. The outlook may be
revised to 'Positive' if financial risk profile improves due to
significant and sustained improvement in revenue and
profitability, leading to sizable cash accrual, along with better
working capital management. Conversely, the outlook may be
revised to 'Negative' if the financial risk profile, particularly
liquidity, weakens because of low cash accrual, stretched working
capital cycle, or any large capital withdrawal or funding support
to associates.
Set up in 2005 as a proprietorship firm by Mr. Sunil Devkinandan
Zawar, SSMTC provides multiple services for government agencies.
It is based in Jalgaon (Maharashtra) and supplies food grains,
pulses, and other food items to government agencies under mid-day
meal scheme and ashram shala scheme. It has also entered into a
contract with Rajasthan State Transport Corporation (RSTC) for
carriage of parcels, courier, and allied services through state-
run buses.
SHREE SHARANAM: CRISIL Lowers Rating on INR125MM Loan to B-
-----------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facility
of Shree Sharanam Real Estate Private Limited (SSREPL) to 'CRISIL
B-/Stable' from 'CRISIL B/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 125 CRISIL B-/Stable (Downgraded
from 'CRISIL B/Stable')
The downgrade reflects SSREPL's weak financial risk profile and
constrained liquidity. The financial risk profile deteriorated in
2015-16 (refers to financial year, April 1 to March 31) as the
company availed additional term loan of INR75.0 million to fund
increase in cost of its hotel project, which adversely impacted
its gearing (expected to increase to around 4.0 times as on March
31, 2016). Also, as the hotel was operational only for six months
in 2015-16, the liquidity remained stretched on account of start-
up phase of operations.
The rating reflects SSREPL's start-up phase of operations and
weak financial risk profile because of high gearing. These
weaknesses are partially offset by benefits derived from tie-up
with Sarovar Hotels and Resorts for managing the upcoming hotel
and favourable location of the hotel.
Outlook: Stable
CRISIL believes SSREPL will benefit over the medium term from its
association with the Sarovar group. The outlook may be revised to
'Positive' in case of a substantial increase in the company's
average room rental and occupancy, resulting in considerably
higher accrual, and thus in a better financial risk profile.
Conversely, the outlook may be revised to 'Negative' if financial
risk profile deteriorates because of low cash accrual on account
of low occupancy or debt-funded capital expenditure.
SSREPL, established in 2004 by Mr. Laxman Das Goel and Mr. Ravi
Goel, is currently operating a luxury 5-star hotel, Crystal
Sarovar Premiere, in Agra. The company has entered into a long-
term agreement with Sarovar Hotels and Resorts, under which, the
latter will operate, manage, and maintain the hotel.
SHREEPATI JEWELS: ICRA Reaffirms 'D' Rating on INR100cr Loan
------------------------------------------------------------
ICRA has reaffirmed the long-term rating outstanding on the
INR100.0 crore fund based facilities of Shreepati Jewels at
[ICRA]D.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term, Fund-
based limits
Term Loan 100.00 [ICRA]D/ reaffirmed
The rating reaffirmation takes into account the stretched
liquidity position due to modest booking status and delays in
construction of the ongoing project leading to delay in debt
servicing.
Shreepati group is promoted by Mr. Rajendra Chaturvedi. The group
is engaged in residential real estate projects, primarily located
in South Mumbai with majority of projects of redevelopment type.
The business has been carried out through a number of group
companies by the partners, formed primarily for tax purpose. The
group currently has 3.37 lac square feet of saleable area under
the project (Shreepati Jewels Wings D/E) under construction with
another 9 lac square feet of projects to be launched in the near
future and has so far completed more than 5 lac square feet of
construction through different project companies. The group has
completed four residential projects, prominent one being
Shreepati Arcade at Nana Chowk in South Mumbai having 45 floors
and which was the tallest residential building at the time of
completion in 2002. It has also completed another project of 39
floors in Girgaum, South Mumbai in September, 2011; it was part
of phase-I in Shreepati Jewels.
SHYAM GINNING: CRISIL Reaffirms 'B' Rating on INR275MM Cash Loan
----------------------------------------------------------------
CRISIL's rating on the long-term bank facilities of Shyam Ginning
and Pressing Private Limited (SGPPL) continues to reflect the
company's below-average financial risk profile because of high
gearing, a modest net worth, and subdued debt protection metrics.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 275 CRISIL B/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility 25 CRISIL B/Stable (Reaffirmed)
The rating also factors in exposure to intense competition in the
cotton industry, and vulnerability to volatility in raw cotton
(kapas) prices and changes in government policies. These
weaknesses are partially offset by the extensive industry
experience of the promoters and proximity to a cotton-growing
belt ensuring regular supply of raw cotton.
Outlook: Stable
CRISIL believes SGPPL will continue to benefit over the medium
term from the extensive industry experience of its promoters. The
outlook may be revised to 'Positive' in case of infusion of
capital leading to a better capital structure, and/or significant
improvement in scale of operations and profitability, thereby
improving debt protection metrics. Conversely, the outlook may be
revised to 'Negative' in case of higher-than-expected debt
contracted to fund incremental working capital requirement or
capital expenditure.
Update
Revenue declined to about INR1.46 billion in 2015-16 (refers to
financial year, April 1 to March 31) from INR1.62 billion in the
previous year mainly driven by the slump in overall demand for
cotton coupled with a decline in cotton prices. Operating
profitability was about 2.9 per cent in 2015-16, in line with
previous years. Operations remain moderately working capital
intensive as indicated by gross current assets of about 107 days
as on March 31, 2016, along with high bank limit utilisation.
The financial risk profile remains below average because of a
modest networth of about INR60.4 million and high gearing of
above 4.5 times as on March 31, 2016. Debt protection metrics
also remain weak with an interest coverage ratio of about 1.4
times in 2015-16.
Profit after tax (PAT) was INR1.9 million on net sales of INR1.46
billion in 2015-16, as against PAT of INR0.9 million on net sales
of INR1.62 billion in 2014-15.
SGPPL, located at Rajkot, is promoted by Mr. Bharatbhai Wala. The
company gins and presses raw cotton to make cotton bales. It
sells these to various traders, while the cotton seed is sold to
various oil mills in the vicinity of the plant.
SILK COTTON: CARE Assigns 'B' Rating to INR7.52cr LT Loan
---------------------------------------------------------
CARE assigns 'CARE B' rating to the bank facilities of Silk
Cotton.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 7.52 CARE B Assigned
Rating Rationale
The rating assigned to the bank facilities of Silk Cotton (Silk)
is primarily constrained on account of risk associated with
nascent stage of operations and stabilization risk associated
with debt-funded project, susceptibility of its profit margins to
volatility of raw material prices and presence in the highly
fragmented industry with limited value addition with prices
and supply of cotton being highly regulated. The rating is
further constrained on account of its constitution as a
partnership firm.
However, the rating derives strength from the experience of the
promoters in agro commodity trading and proximity of the firm to
cotton producing region of Gujarat.
Silk's ability to stabilize its business operations and
establishing customer base would be key rating sensitivity.
Furthermore, achieving envisaged level of sales and profitability
in volatile raw material pricing scenario and highly competitive
industry would also remain crucial.
Surat-based (Gujarat) Silk was formed in February 2014 as a
partnership firm by Mr Kalpeshbhai Vaghasiya and Mr Manishbhai
Vekariya with the main objective to carry out cotton ginning and
pressing. Silk started manufacturing activity from November,
2015. The installed capacity of the firm for cotton bales stood
at 8064 metric tonne per annum (MTPA) and 14336 MTPA for cotton
seeds as on December 31, 2015.
SILPA PROJECTS: CRISIL Upgrades Rating on INR330MM Loan to B+
-------------------------------------------------------------
CRISIL has upgraded its rating on the long-term bank facilities
of Silpa Projects and Infrastructure India Private Limited
(SPIPL) to 'CRISIL B+/Stable' from 'CRISIL C', and has reaffirmed
its rating on the company's short-term facilities at 'CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 360 CRISIL A4 (Reaffirmed)
Cash Credit 330 CRISIL B+/Stable (Upgraded
from 'CRISIL C')
Proposed Long Term 13 CRISIL B+/Stable (Upgraded
Bank Loan Facility from 'CRISIL C')
Standby Line of Credit 30 CRISIL B+/Stable (Upgraded
from 'CRISIL C')
Term Loan 10 CRISIL B+/Stable (Upgraded
from 'CRISIL C')
The ratings upgrade reflect timely servicing of term debt (not
rated by CRISIL) by SPIPL over the past three months through
March 2014, driven by improvement in liquidity backed by increase
in net cash accruals on account of improvement in scale of
operations and prudent management of working capital cycle.
The ratings continue to reflect SPIPL's working capital intensive
operations and geographical concentration in its revenue profile.
These rating weaknesses are partially offset by its established
regional presence in the civil construction segment aided by
extensive industry experience of its promoters and its
established customer relationships.
Outlook: Stable
CRISIL believes that SPIPL will continue to benefit over the
medium term from its promoters extensive experience in the civil
construction industry. The outlook may be revised to 'Positive'
if SPIPL records higher-than-expected revenues and profitability,
leading to better-than-anticipated accruals, or if its working
capital management improves, or in case of significant equity
infusion, leading to improvement in its liquidity. Conversely,
the outlook may be revised to 'Negative' in case of any delays in
completion of projects or receipt of payments from customers,
leading to weakening of SPIPL's liquidity, or if the firm
undertakes a larger-than-expected debt-funded capital expenditure
(capex) programme, resulting in deterioration in its financial
risk profile.
Incorporated in the year 1987 as a proprietorship entity, Silpa
Projects, the firm was subsequently rechristened as SPIPL in the
year 2007. Promoted by Mr. T.S.Sanil, SPIPL is engaged in the
business of civil construction in Kerala.
SOMENATH ENTERPRISES: CARE Assigns B+ Rating to INR9.35cr Loan
--------------------------------------------------------------
CARE assigns 'CARE B+' rating to the bank facilities of Somenath
Enterprises.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 9.35 CARE B+ Assigned
Rating Rationale
The rating assigned to the bank facilities of Somenath
Enterprises (SE) is constrained by its partnership nature of
constitution, small scale of operations with low profitability
margin, risk of
nonrenewal of dealership agreement from Escorts Ltd. (EL),
Mahindra & Mahindra Limited (MML), Bajaj Auto Ltd. (BAL), Bosch
Ltd. (BL) etc, stiff competition due to fragmented nature of the
industry with presence of many unorganized player, working
capital intensive nature of business and high gearing ratio. The
aforesaid constraints are partially offset by the experience of
the partners with moderate track record of operations, wide
distribution network and increasing trend in sales and adequate
warehousing arrangement.
Ability to improve the scale of operations and profitability
margins and ability to manage working capital effectively are the
key rating sensitivities.
Somenath Enterprises (SE) was established as a partnership firm
in 2008 by Mr Surendra Kumar Agarwal (50% stake) and Mrs Jaya
Agarwal (50% stake), based out of Patna, Bihar. The firm is
engaged in trading of automobile components in the state of
Bihar. SE has entered into dealership agreement with Escorts Ltd.
(EL) in May, 2014, Mahindra & Mahindra Limited (MML) in August,
2015, Tata Motors Ltd. (TML) in July, 2015, Bajaj Auto Ltd. (BAL)
in July, 2015, Bosch Ltd. (BL) in July, 2015.
Furthermore, the entity has entered into dealership agreements
with few relatively smaller entities also. Mr Surendra Kumar
Agarwal, the Managing Partner looks after the day to day
operations of the entity.
As per the audited results of FY15 (refers to the period April 01
to March 31), SE reported a PBILDT of INR1.06 crore (PBILDT of
INR 0.94 crore in FY14) and PAT of INR0.32 crore (PAT of INR 0.27
crore in FY14), on a total operating income of INR36.87 crore
(Total operating income of INR 27.62 crore in FY14). Furthermore,
during 9MFY16, the management has maintained to have achieved
total operating income of INR38.52 crore.
SOUHARDHA INFRA-TECH: Ind-Ra Assigns 'IND B-' LT Issuer Rating
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Souhardha Infra-
Tech Private Limited (Souhardha) a Long-Term Issuer Rating of
'IND B-'. The Outlook is Stable. A full list of rating actions is
at the end of this commentary.
KEY RATING DRIVERS
The ratings reflect Souhardha's limited operational track record,
small scale of operations and weak credit metrics. The company
was incorporated in January 2015 and recorded revenue of INR54.3m
in FY15, operating EBITDA interest coverage of 271x, net leverage
of 1.9x and operating EBITDA margins of 5%.
In FYE15, the company had an outstanding debt (interest-free
unsecured loan from its promotors) of INR10.5 million However,
Souhardha was sanctioned bank limits of INR50 million in 1QFY16
to meet its working capital requirements, resulting in higher
interest expense in FY16. Ind-Ra expects the company to have
ended FY16 with an EBITDA interest cover of below 1x based on its
11MFY16 provisional financials, which indicate revenue of around
INR20m and EBITDA margins of around 8.0%.
The company has an outstanding weak order book of INR100m until
mid-March 2016, which needs to be executed by December 2016.
The ratings, however, are supported by the company's comfortable
liquidity as reflected in its fund-based facilities being
utilised at an average 56% during the eight months ended December
2015.
The ratings are further supported by the promoter's 10 years of
operating experience in the civil construction domain.
RATING SENSITIVITIES
Positive: An increase in the scale of operations and
profitability leading to a sustained improvement in the credit
metrics could be positive for the ratings.
Souhardha is a Bengaluru-based civil contractor.
Souhardha's ratings:
-- Long-Term Issuer Rating: assigned 'IND B-'; Outlook Stable
-- INR40 million fund-based limits: assigned 'IND B-'; Outlook
Stable
-- INR10 million non-fund-based limits: assigned 'IND A4'
SRI PRASANNA: CRISIL Lowers Rating on INR50MM Cash Loan to 'B'
--------------------------------------------------------------
CRISIL has downgraded the long-term ratings of Sri Prasanna
Metals and Alloys (SPMA) to 'CRISIL B/Stable' from 'CRISIL
B+/Stable', while reaffirming its short-term ratings at 'CRISIL
A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 50 CRISIL B/Stable (Downgraded
from 'CRISIL B+/Stable')
Letter Of Guarantee 10 CRISIL A4 (Reaffirmed)
Letter of Credit 10 CRISIL A4 (Reaffirmed)
Proposed Long Term 6 CRISIL B/Stable (Downgraded
Bank Loan Facility from 'CRISIL B+/Stable')
Term Loan 14 CRISIL B/Stable (Downgraded
from 'CRISIL B+/Stable')
The rating downgrade reflects SPMA's stretched liquidity, as the
firm sought an enhanced bank facility and the limit is highly
utilized. The ratings also reflect the average financial risk
profile and capital structure, and working-capital-intensive
operations.
These weaknesses are partially offset by the extensive experience
of SPMA's partners in the steel fabrication industry.
Outlook: Stable
CRISIL believes that SPMA will continue to benefit over the
medium term from its partners' extensive experience. The outlook
may be revised to 'Positive' if increase in scale of operations
and profitability strengthen the capital structure and financial
risk profile. The outlook may be revised to 'Negative' if SPMA
undertakes any large debt-funded capital expenditure or the
working capital cycle is stretched further.
SPMA, set up in 2004, is involved in fabrication of structural
steel components used in cement factories and sugar mills. Its
manufacturing facility is in Vellore (Tamil Nadu). It is promoted
by three partners - N Muruganandam, R Manivannan and PS
Veeramani.
SRI SHRIDEVI: CRISIL Reaffirms D Rating on INR660MM Term Loan
-------------------------------------------------------------
CRISIL's rating on the long-term bank facilities of Sri Shridevi
Charitable Trust (SSCT) continues to reflect instances of delay
by SSCT in servicing its debt; the delays have been caused by
weak liquidity resulting from irregular cash inflows and large,
debt-funded capital expenditure undertaken by the trust over the
past few years.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 40 CRISIL D (Reaffirmed)
Term Loan 660 CRISIL D (Reaffirmed)
SSCT is also exposed to regulatory risks associated with the
education sector and to intense competition from other
educational institutes in its region of operations. However, the
trust benefits from the extensive experience of its promoters in
the education sector and its diversified course offerings.
SSCT (previously known as Sri Shridevi Charitable Trust (R.)),
established in 1992, provides education from primary school to
graduation in engineering; it also has a medical college which
became operational in 2013-14 (refers to financial year, April 1
to March 31). The trust's operations are managed by its managing
trustee, Dr. M R Hulinaykar.
STRESCON INDUSTRIES: CRISIL Reaffirms B+ Rating on INR105MM Loan
----------------------------------------------------------------
CRISIL's ratings on the bank facilities of Strescon Industries
Limited (SIL) continues to reflect its modest scale, and working-
capital-intensive nature, of operations.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 20 CRISIL A4 (Reaffirmed)
Cash Credit 45 CRISIL B+/Stable (Reaffirmed)
Letter of Credit 20 CRISIL A4 (Reaffirmed)
Term Loan 105 CRISIL B+/Stable (Reaffirmed)
The rating also reflects customer concentration in its revenue
profile. These rating weaknesses are partially offset by the
extensive industry experience of SIL's promoters, and the
company's comfortable financial risk profile, marked by low
gearing and moderate debt protection metrics.
Outlook: Stable
CRISIL believes SIL will continue to benefit over the medium term
from its promoters' extensive industry experience. The outlook
may be revised to 'Positive' if the company reports substantial
and sustained increase in its scale of operations and accruals
along with improved working capital management thereby improving
its financial risk profile. Conversely, the outlook may be
revised to 'Negative' in case of low operating income or accruals
or stretch in the working capital cycle, or if SIL undertakes any
large, debt-funded capital expenditure leading to deterioration
in its financial risk profile, particularly liquidity.
Incorporated in 1978 in Kolkata, SIL manufactures railway
sleepers. The company ventured into manufacturing of sleepers
from 1991. SIL primarily caters to the Indian Railways and its
day-to-day operations are managed by its promoter-director, Mr.
Sabyasachi Munshi.
SWAGAT HOSPITALS: CRISIL Lowers Rating on INR250MM Loan to B-
-------------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facilities
of Swagat Hospitals Pvt Ltd (SHPL) to 'CRISIL B-/Stable' from
'CRISIL B/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 250 CRISIL B-/Stable (Downgraded
from 'CRISIL B/Stable')
The downgrade reflects deterioration in the SHPL's business risk
profile because of decline in profitability and stretched
liquidity profile because of tightly matched cash accruals
against repayment obligations. SHPL's has commercialized
operations in its new super-speciality hospital at Maligaon,
Guwahati under the name Swagat Super Specialty Surgical Institute
(SSSSI) from July 2015.
The hospital has commenced Phase I of operations by
commercializing 30 out of total 77 beds. Turnover is estimated to
have increased to around INR62 million till February 2016 in
2015-16 (refers to financial year, April 1 to March 31) from
INR36.8 million in 2014-15 supported by scaling up of operations
in newly started unit within a short span of time. However,
operating profitability is estimated to have declined to around
30 percent in 2015-16 from 45.2 percent in 2014-15 because of
high overhead costs in the newly started hospital.
Financial risk profile of SHPL is marked by highly leveraged
capital structure with an estimated gearing of around 2.5 times
and a net worth of around INR116 million as on March 31, 2016.
Debt protection metrics is also expected to have deteriorated,
with interest coverage and net cash accrual to total debt ratios
declining to 1.2 time and 0.01 time, respectively, in 2015-16
from 661.5 times and 0.03 time, respectively, in 2014-15 due to
lower profitability. Liquidity profile of SHPL is marked by
tightly matched cash accruals against repayment obligation. The
company also has a bullet repayment of INR75.3 million in
September 2016 against expected cash accruals of INR30 to 35
million. The repayment is expected to be met from capital subsidy
receivable.
The rating continues to reflect SHPL's modest scale of operations
and the challenges that SHPL is expected to face in attaining
optimum capacity utilisation in its initial year of operations.
These rating weaknesses are partially offset by the extensive
experience of SHPL's promoters in the healthcare sector.
Outlook: Stable
CRISIL believes that SHPL would continue to benefit from its
promoters' extensive industry experience over the medium term.
The outlook may be revised to 'Positive' if SHPL implements its
super specialty hospital project in a timely manner without any
further cost overrun, and is able to demonstrate higher than
expected occupancy levels leading to improvement in its
liquidity. Conversely, the outlook may be revised to 'Negative'
in case of any further time or cost overruns in commissioning of
SHPL's project leading to pressure on SHPL's liquidity.
SHPL, set up in 1999 by Dr. Subhash Khanna, is operating a 50 bed
hospital in Shantipur (Guwahati) under the name of 'Swagat
Endolaparoscopic Surgical Research Institute' (SESRI). The
company is currently also undertaking a project to set up a 77
bed super specialty hospital near Maligaon (Guwahati) which is
expected to commence operations from April 2015.
T.R. AGRO: CRISIL Puts 'B' Rating on INR205MM Loan
--------------------------------------------------
CRISIL has revoked the suspension of its rating on the bank
facilities of T.R. Agro Industries (TRAI) and has assigned its
'CRISIL B/Stable' ratings to these facilities. The ratings had
been suspended by CRISIL on April 10, 2013, as TRAI had not
provided the necessary information for taking a rating view. The
firm has now shared the requisite information, enabling CRISIL to
assign ratings to the bank facilities.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 205 CRISIL B/Stable (Assigned;
Suspension Revoked)
Term Loan 35 CRISIL B/Stable (Assigned;
Suspension Revoked)
The ratings reflect the firm's modest scale of operations in the
highly fragmented rice milling industry, susceptibility of
operating profitability to volatility in paddy prices, below-
average financial risk profile because of high leverage and weak
debt protection metrics. These rating weaknesses are partially
offset by the partners' extensive experience and their funding
support.
Outlook: Stable
CRISIL believes TRAI will continue to benefit over the medium
term from its partners' extensive industry experience. The
outlook may be revised to 'Positive' in case of substantial
improvement in the financial risk profile, driven most likely by
more-than-expected revenue growth leading to high cash accrual,
or capital infusion, along with efficient working capital
management. Conversely, the outlook maybe revised to 'Negative'
in case of lower-than-expected cash accrual, a substantial
increase in working capital requirement, or large debt funded
capital expenditure, further constraining the firm's liquidity.
T.R. Agro Industries (TRAI) was formed as proprietorship firm in
1998 by Mr. Sham Sunder and Mr. Harsh Kumar. The firm is
primarily engaged in processing and sale of basmati and non-
basmati rice to export houses. TRAI sells its products under the
brand Husenpari, TR Kachi carat Gold and Arghya. The
manufacturing unit of the firm is based in Kotkapura (Punjab)
with the capacity of 7 tonnes per hour.
It posted a book profit of INR0.63 million on sales of INR300
million in 2014-15 (refers to financial year, April 1 to March
31) as against a book profit of INR0.61 million on sales of
INR224 million in 2013-14.
TIMES STEEL: CARE Ups Rating on INR22cr LT Loan to BB-
------------------------------------------------------
CARE revises the rating assigned to the bank facilities of
Times Steel And Power Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 22 CARE BB- Rating
Suspension revoked
and Upgraded from
CARE B+
Rating Rationale
The revision in the rating of Times Steel and Power Limited
(TSPL) factors in improvement in profitability margin and capital
structure. The ratings also continue to draw comfort from
experienced promoters in the steel industry and favorable plant
location.
The rating however, continues to remain constrained on account of
its modest scale of operations, weak coverage indicators and
working capital intensive nature of operations. Furthermore, the
rating is also constrained due to the exposure to commodity price
fluctuations leading to volatility in margins and cyclicality
inherent in the steel business.
Going forward, the company's ability to increase the scale of
operations while improving its profitability margins & capital
structure and efficiently managing its working capital
requirements shall be the key rating sensitivities.
Times Steel and Power Limited (TSPL) was originally incorporated
as Nixon Steel and Power Ltd on October 21, 2002, by Mr Rajvir
Choudhary, his son Mr Atul Choudhary and his nephew Mr Vinay
Choudhary. The name of the company was subsequently changed to
TSPL in 2010. MrVinay Choudhary has more than a decade's
experience in the iron industry. The manufacturing facility of
the company is located at Rourkela, Odisha with an installed
capacity of 100,000 tons per annum (TPA) as on March 31, 2015.
The company currently procures iron ore from the open market and
has arrangements for the procurement of coal with Mahanadi Coal
Limited (MCL). The sponge iron manufactured by the company is
sold to the steel plants in the adjoining areas through brokers.
For FY15 (refers to the period April 01 to March 31), TSPL
achieved a total operating income (TOI) of INR107.68 crore with
PBILDT and PAT of INR10.49 crore and INR3.82 crore, respectively,
as against TOI of INR104.75 crore with operating and cash loss of
INR0.11 crore and 7.13 crore respectively for FY14. Furthermore,
the company has achieved total operating income of around INR60
crore till 9MFY16 (refers to the unaudited period April 1 to
December 31).
UBC-KIPL-GIL-JV: CRISIL Assigns B+ Rating to INR35MM Cash Loan
--------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to
the bank facilities of UBC-KIPL-GIL-JV (UKG). The ratings reflect
the firm's small scale of operations and average financial risk
profile because of a small networth. These rating weaknesses are
partially offset by the extensive experience of the partners in
the industry.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 65 CRISIL A4
Cash Credit 35 CRISIL B+/Stable
Outlook: Stable
CRISIL believes UKG will continue to benefit over the medium term
from the extensive industry experience of its promoters and
established customer relationship. The outlook may be revised to
'Positive' in case of more-than-expected growth in revenue and
profitability, resulting in higher cash accrual. Conversely, the
outlook may be revised to 'Negative' if profitability or revenue
declines, or working capital cycle is stretched, resulting in
lower-than-expected cash accrual, thereby further weakening the
financial risk profile.
Established in 2015, UKG is a joint venture between Umesh Brother
Construction (UBC), Kaytax Industries Pvt Ltd (KIPL), and Gepdec
Infratech Ltd (GIL). The firm is engaged in the electrification
of a railway line for Eastern Railways. It is managed by Mr.
Salil Aggarwal (promoter of KIPL).
VARADHA STEELS: ICRA Suspends B- Rating on INR2.0cr Loan
--------------------------------------------------------
ICRA has suspended the long term rating of [ICRA]B- assigned to
the INR2.00 Crore Fund based facility and the short term rating
of [ICRA]A4 assigned to the INR10.60 Crore Non-fund based
facility of M/s Varadha Steels. The suspension follows ICRA's
inability to carry out a rating surveillance, in the absence of
the requisite information from the company.
VICTORIAN LABEL: CRISIL Reaffirms B+ Rating on INR42.1MM Loan
-------------------------------------------------------------
CRISIL's ratings on the bank loan facilities of Victorian Label
Company (VLC) continue to reflect the firm's modest scale of
operations in the intensely competitive label-manufacturing
industry, and its subdued financial risk profile because of
modest networth. The weaknesses are partially offset by the
extensive industry experience of the firm's promoters.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 3 CRISIL A4 (Reaffirmed)
Cash Credit 5 CRISIL B+/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility 19.9 CRISIL B+/Stable (Reaffirmed)
Term Loan 42.1 CRISIL B+/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes VLC will continue to benefit over the medium term
from the extensive industry experience of its promoters. The
outlook may be revised to 'Positive' if the firm registers
sustainable increase in revenue while maintaining healthy
operating profitability, and improves its capital structure.
Conversely, the outlook may be revised to 'Negative' in case of
low cash accrual, or stretch in working capital cycle, or
substantial capital withdrawal, leading to deterioration in
financial risk profile.
Update
Operating income is estimated at INR50 million for 2015-16
(refers to financial year, April 1 to March 31). Operating margin
was 28.8 percent for 2014-15 and in line with CRISIL's
expectation. The margin is likely to improve over the medium term
on account of stabilisation in operations.
Financial risk profile has improved as indicated by decline in
gearing to 1.55 times as on March 31, 2016, from 1.6 times as on
March 31, 2015. The gearing is expected to remain stable over the
medium term. The debt protection metrics were average, with net
cash accrual to total debt at 0.19 time and interest coverage
ratio at 3 times in 2015-16.
Liquidity remains adequate, indicated by cash accrual of INR9.2
million against debt obligation of INR8 million in 2015-16. Bank
limit was fully utilised. The liquidity is supported by funds
from promoters, who are expected to bring in additional funds of
INR5 million in 2016-17.
VLC, set up in 2013 is based in Tiruppur, Tamil Nadu,
manufactures woven and printed labels. Its daily operations are
managed by Mr. K Krishnakumar.
VIJAY IRON: CRISIL Reaffirms 'B' Rating on INR80MM Cash Loan
------------------------------------------------------------
CRISIL ratings on the long-term bank facility of Vijay Iron
Foundry Pvt Ltd (VIFPL) continue to reflect VIFPL's below-average
financial risk profile because of a small net worth, high
gearing, and average debt protection metrics.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 80 CRISIL B/Stable (Reaffirmed)
Letter of Credit 70 CRISIL A4 (Reaffirmed)
Proposed Long Term
Bank Loan Facility 20 CRISIL B/Stable (Reaffirmed)
Long Term Loan 60 CRISIL B/Stable (Reaffirmed)
The ratings also factor in working capital-intensive operations
and exposure to intense competition in the steel industry
resulting in its low profitability margins. These rating
weaknesses are partially offset by the extensive industry
experience of the company's promoters.
Outlook: Stable
CRISIL believes VIFPL 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 sustained
improvement in the working capital cycle or sizeable equity
infusion, leading to better liquidity. Conversely, the outlook
may be revised to 'Negative' in case of a steep decline in
profitability margins, or significant deterioration in the
capital structure caused most likely by large debt-funded capex
or a stretch in its working capital cycle
VIFPL was set up in 1993, and was taken over by the Singhal group
in 2004. The company manufactures mild steel billets at its plant
in Medak district (Telangana). It is managed by Mr. Suresh Kumar
Singhal.
VINIT FABRICS: Ind-Ra Suspends 'IND B' Long-Term Issuer Rating
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Vinit Fabrics
Limited's (VFL) 'IND B' Long-Term Issuer Rating to the suspended
category. The Outlook was Stable. This rating will now appear as
'IND B(suspended)' on the agency's website. A full list of rating
actions is at the end of this commentary.
The ratings have been migrated to the suspended category due to
lack of adequate information. Ind-Ra will no longer provide
ratings or analytical coverage for VFL.
The ratings will remain in the suspended category for a period of
six months and be withdrawn at the end of that period. However,
in the event the issuer starts furnishing information during the
six-month period, the ratings could be reinstated and will be
communicated through a rating action commentary.
VFL's ratings are as follows:
-- Long-Term Issuer Rating: migrated to 'IND B(suspended)' from
'IND B'/Stable
-- INR15 million fund-based working capital limits (cash
credit):
migrated to 'IND B(suspended)' from 'IND B'
-- INR43.87 million term loans: migrated to 'IND B(suspended)'
from 'IND B'
VISHAL AUTOMOBILES: CRISIL Assigns B+ Rating to INR49.5MM Loan
--------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-
term bank facilities of Vishal Automobiles (VA).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 49.5 CRISIL B+/Stable
Term Loan 10.0 CRISIL B+/Stable
The rating reflects the firm's below-average financial risk
profile because of high gearing and weak debt protection metrics,
and modest scale of, and working capital-intensive, operations in
the intensely competitive automobile dealership industry. These
weaknesses are partially offset by the extensive experience of
promoters and their funding support.
For arriving at the rating, unsecured loans of INR13.5 million
from the promoters have been treated as neither debt nor equity
as they are interest-free and will be retained in the business
over the medium term.
Outlook: Stable
CRISIL believes VA will benefit over the medium term from the
extensive experience of its promoters. The outlook may be revised
to 'Positive' if the firm cash accruals improve along with
significant improvement in working capital management results in
a better financial risk profile, particularly liquidity. The
outlook may be revised to 'Negative' if stretch in working
capital cycle, further diversion of funds to associate concerns,
or large, debt-funded capital expenditure results in
deterioration in overall financial risk profile.
Set up in 2004 in Korba, Chhattisgarh, as a partnership firm by
Mr. Ashok Rishi and Mr. Shushma Rishi, VA is an authorised dealer
for Honda Motorcycle & Scooter India Pvt Ltd's entire range of
two-wheelers, and Kamaz Vectra Motors Ltd's trucks. The firm
operates a 4S (sales-service-spares-safety) showroom in Korba.
YESKAY CONSTRUCTIONS: CRISIL Reaffirms B+ Rating on INR70MM Loan
----------------------------------------------------------------
CRISIL's rating on the long-term bank facilities of Yeskay
Constructions (Yeskay) continues to reflect its modest scale of
operations and exposure to intense competition in the fragmented
civil construction industry. These weaknesses are partially
offset by Yeskay's above-average financial risk profile, because
of moderate gearing and debt protection metrics, the extensive
experience of the proprietor in the infrastructure segment, and
its moderate order book.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 70 CRISIL B+/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility 20 CRISIL B+/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes Yeskay will benefit over the medium term from the
proprietor's industry experience and its moderate order book. The
outlook may be revised to 'Positive' in case of significant
improvement in the scale of operations and profitability leading
to substantial cash accrual. Conversely, the outlook may be
revised to 'Negative' in case of a steep decline in revenue and
profitability, or deterioration in the working capital
management, or implementation of a large, debt-funded capital
expenditure (capex) programme, weakening the financial risk
profile.
Update
Revenue was around INR349 million in 2014-15 (refers to financial
year, April 1 to March 31), a year-on-year increase of around 20
percent on account of steady orders. Operating margin, however,
declined to 7.81 percent in 2014-15 from 11.30 percent in 2013-
14, marked by intense competition in the civil construction
industry. CRISIL believes the business risk profile will remain
stable over the medium term supported by its moderate order book
position.
The capital structure is modest with networth of around INR65
million and gearing of 1.60 times as on March 31, 2015. The
capital structure is expected to improve gradually with repayment
of term debt and absence of any debt-funded capex plan. The debt
protection metrics are moderate as indicated by interest coverage
ratio of around 2.43 times and net cash accrual to total debt
ratio of around 11 percent for 2014-15. CRISIL believes the
financial risk profile will remain above average over the medium
term.
The bank limits were fully utilised during the 12 months through
September 2015 owing to working capital intensive operations. The
cash accrual of around INR12 million per annum is expected to be
sufficient to meet repayment obligations over the medium term.
Yeskay, set up in 1988 as a proprietary concern and promoted by
Mr. Sunil Kumar, is a sub-contractor in the infrastructure
segment; it offers civil construction services such as
construction of industrial, residential, and commercial
buildings.
=========
J A P A N
=========
CAFES 1 TRUST: Moody's Puts Class C-1 Cert's Ba3 Rating on Review
-----------------------------------------------------------------
Moody's Japan K.K has placed the ratings for the Class A-1
through D-2 Trust Certificates issued by Cafes 1 Trust on review
for downgrade.
The affected ratings are:
Class A-1, A2 (sf) placed under review for downgrade;
previously
on April 6, 2015, downgraded to A2 (sf)
Class A-2, A2 (sf) placed under review for downgrade;
previously
on April 6, 2015, downgraded to A2 (sf)
Class B, Baa3 (sf) placed under review for downgrade;
previously
on April 6, 2015, downgraded to Baa3 (sf)
Class C-1, Ba3 (sf) placed under review for downgrade;
previously on April 6, 2015, downgraded to Ba3 (sf)
Class C-2, Ba3 (sf) placed under review for downgrade;
previously on April 6, 2015, downgraded to Ba3 (sf)
Class D-1, B3 (sf) placed under review for downgrade;
previously
on April 6, 2015, downgraded to B3 (sf)
Class D-2, B3 (sf) placed under review for downgrade;
previously
on April 6, 2015, downgraded to B3 (sf)
Deal Name: Cafes 1 Trust
Class: Class A-1 through D-2 Trust Certificates
Issue Amount (Initial): JPY53.2 billion
Dividend: Fix/Floating
Issue Date (Initial): July 21, 2006
Legal Final Maturity: May 31, 2018
Underlying Asset (Initial): A non-recourse loan backed by an
office property in Tokyo
Originator: CrÇdit Agricole Corporate and Investment Bank,
Tokyo
Branch
Arranger: Credit Agricole Securities Asia BV, Tokyo branch
RATINGS RATIONALE
The rating action reflects Moody's concern over a possible
deterioration in cash flow from the underlying property when the
current lease from the single tenant expires. Such a
deterioration will affect the property value as well as
refinancing or property sales activities before the legal final
Maturity.
The loan is backed by an office building located in Tokyo, and
the property is occupied by a single tenant and its lease
agreement will expire during the tail period of the transaction,
from the expected maturity (May 2016) to the legal final maturity
(May 2018).
While market rents of properties in the same area have risen, the
rent paid by the current tenant is still higher than the upper
range of the market rent. As such, Moody's thinks the cash flow
from the property could fall upon expiry of the current lease
agreement.
During the review period, Moody's will reassess its assumptions
in relation to the cash flow and property value, in light of the
rental conditions in the sub-markets surrounding the property,
and the refinancing activities of the property.
The principal methodology used in these ratings was "Moody's
Approach to Rating Large Loan and Single Asset/Single Borrower
CMBS" (Japanese) published in November 2015.
Factors that would lead to an upgrade or downgrade of the
ratings:
The key rating driver of the deal is the loan-to-value (LTV)
ratio, because the credit quality of the rated tranches is
supported by the sales proceeds of the underlying property. A
decrease or increase in the LTV ratio for each rated tranche may
lead to upward or downward rating pressure.
KAWASAKI KISEN: Moody's Withdraws Ba3 CFR for Business Reasons
--------------------------------------------------------------
Moody's Japan K.K. has withdrawn the Ba3 corporate family rating
and its stable outlook of Kawasaki Kisen Kaisha, Ltd. (K-Line)
for its business reasons.
RATINGS RATIONALE
Moody's has withdrawn the rating for its own business reasons.
Kawasaki Kisen Kaisha, Ltd., headquartered in Kobe, is the third-
largest shipping company in Japan with revenues of JPY1.2
trillion for the fiscal year ended March 31, 2016. Its
operations are diversified and cover almost all ocean shipping
segments, including containerships, bulk carriers, car carriers,
and energy transports. It operates a fleet of more than 500
vessels, including spot-chartered ships.
MITSUBISHI MOTORS: President to Quit Over Fuel Economy Scandal
--------------------------------------------------------------
Nikkei Asian Review reports that the president of Mitsubishi
Motors decided May 17 to step down, taking responsibility for the
fuel economy data scandal that surfaced in April.
Nikkei relates that the position to be vacated by Tetsuro Aikawa,
62, will be filled temporarily by Chairman Osamu Masuko. The 67-
year-old will continue to do double duty until after Nissan Motor
completes its planned purchase of a 34% equity stake.
Mitsubishi Motors submitted to the transport ministry on May 18 a
report on internal findings about improprieties regarding minicar
fuel economy, Nikkei says. Mr. Aikawa, who rose through the
ranks at the automaker, has his roots in the product development
unit. Because the data-cooking originated in the same unit, he
apparently determined that he should bear the brunt of the blame,
Nikkei notes.
Mr. Aikawa is expected to leave either around the time the third-
party investigative committee compiles the final report in July
or the stockholders meeting in June, according to Nikkei. Up to
now, he had said he would not make a decision regarding his
future at the company until after the committee released its
results, the report says.
Nikkei says Nissan will install one of its directors to head
Mitsubishi Motors' product development division after the
latter's regular shareholders meeting June 24. Nissan aims to
acquire the 34% stake through a third-party allocation of new
shares this fall upon completion of due diligence. Mitsubishi
Motors plans to decrease its own directors from 13 to 11, while
Nissan is set to install four directors, including the chairman.
According to the report, Mr. Masuko will likely stay at
Mitsubishi Motors in functions geared toward restoring the brand
and coordinating activities between the two companies. The duo
will work together to find a new president and chairman, the
report notes.
About Mitsubishi Motors
Japan-based Mitsubishi Motors Corporation (TYO:7211) --
http://www.mitsubishi-motors.com/index.html-- manufactures
automobile. The Company, along with its subsidiaries and
associated companies, is engaged in the development, production,
purchase, sale, import and export of general and small-sized
passenger vehicles, mini-vehicles, sport utility vehicles (SUVs),
vans, trucks and automobile parts, as well as industrial
machines. It is also engaged in the checking and maintenance of
new vehicles, as well as the provision of automobile sales
financing and leasing services.
As reported in the Troubled Company Reporter-Asia Pacific on
April 29, 2016, The Japan Times said Mitsubishi abstained from
releasing a forecast for fiscal 2016 on on April 27 as a scandal
involving falsified fuel efficiency figures threatened to be a
road wreck for the automaker.
On April 26, 2016, Standard & Poor's Ratings Services said that
it has placed its 'BB+' long-term corporate credit rating on
Japan-based automaker Mitsubishi Motors Corp. on CreditWatch with
negative implications following the company's announcement that
fuel-consumption test data for four of its mini-vehicle models
was deliberately falsified. This testing fraud is highly likely
to depress unit sales, and damage to business performance and the
company's financial profile over the next year or two may exceed
tolerances for the current rating, in S&P's view.
On April 20, 2016, Mitsubishi Motors announced confirmation of
the deliberate falsification of data for fuel-consumption testing
on four models of its mini-vehicles that sold 625,000 units in
total. Because the focus of the company's automotive lineup is
mini-vehicles and sports utility vehicles (SUVs), the success or
failure of any one model has a significant impact on earnings.
It remains difficult to immediately estimate the impact of the
fraudulent testing on vehicle unit sales in Japan and abroad.
However, given that Mitsubishi Motors' original equipment
manufacturing (OEM) partner Nissan Motor revealed the
falsification and that Mitsubishi Motors has admitted to two
recall coverups in the past, S&P thinks the fraud is likely to
lead to a decline in unit sales. In addition, this incident may
hurt the company's business results significantly over the mid-
to long-term if it reduces Mitsubishi Motors' OEM supplies to
other automakers or weakens its brand recognition in Southeast
Asian markets, which contributes to companywide sales and
profits. Meanwhile, the company has relatively ample cash and
deposits at hand, which will absorb the financial impact of the
incident to some extent if the fraud affects only mini-vehicles
in Japan.
SHARP CORP: S&P Raises CCR to 'CCC+' & Keeps on CreditWatch Pos.
----------------------------------------------------------------
S&P Global Ratings said it has raised its long-term corporate
credit rating on Japan-based electronics maker Sharp Corp. to
'CCC+' from 'CCC'. S&P kept the rating on CreditWatch with
positive implications. S&P also maintained its 'C' short-term
corporate credit and commercial paper program ratings and S&P's
'CCC+' long-term senior unsecured debt rating on Sharp on
CreditWatch positive. At the same time, S&P also raised its
long-term corporate credit rating on overseas Sharp subsidiary
Sharp International Finance (U.K.) PLC. to 'CCC+' from 'CCC',
kept the rating on CreditWatch positive, and kept S&P's 'C'
short-term corporate credit and commercial paper program ratings
on the subsidiary on CreditWatch positive.
The upgrade reflects more clear confirmation that Sharp's
creditor banks intend to maintain their supportive stance toward
the company, as borne out by agreements Sharp has updated on
existing syndicated loans. The updated agreements include lower
interest rates and longer repayment dates. S&P continues to
place its ratings on Sharp on CreditWatch with positive
implications because Sharp's financial base is likely to improve
as a result of a capital injection from Taiwan's Hon Hai
Precision Industry Co. Ltd. (A-/Stable/--) and a degree of
stabilization of Sharp's LCD business within the Hon Hai group.
S&P revised to positive from negative the CreditWatch
implications on its rating on Sharp on March 31, 2016, following
the company's announcement on March 30, 2016, that it will issue
new shares through third-party allocations totaling JPY388.8
billion to Hon Hai and its group companies by Oct. 5, 2016. Hon
Hai also announced it would acquire Sharp's shares.
Sharp's main lender banks, based on Hon Hai's agreement to
acquire Sharp's shares, novated on April 26, 2016, their
agreements regarding existing commitment lines and syndicated
loans, for which they had extended maturities by one month to
April 30, 2016. The banks have lowered the interest rates on some
agreements and extended the loan periods to 10 years. Although
S&P believes the improved terms and conditions are largely based
on Hon Hai's credit quality, which far exceeds that of Sharp, S&P
believes they indicate that the banks maintain their supportive
stance toward Sharp. The substitute agreements are a positive
factor for Sharp's credit quality because they help stabilize
Sharp's cash flow.
Sharp dropped to a negative net worth of JPY31.2 billion as of
March 31, 2016, because of a plunge in its operating performance,
particularly in the liquid crystal display business. While the
amount of a company's capital is not a direct factor in S&P's
assessment, it do view it as important for a company to maintain
good relationships with its banks. S&P believes the acceptance
that Sharp's lender banks' have shown toward longer loan periods
despite Sharp's negative net worth indicates they see a high
probability that Hon Hai will execute its plan to acquire Sharp.
S&P will remove the ratings from CreditWatch after confirming Hon
Hai's capital injection. In resolving the CreditWatch placement,
S&P will examine the degree to which enhanced capitalization will
improve Sharp's financial standing, the competitiveness of
Sharp's LCD business and prospects to improve the business'
profitability as a member of the Hon Hai group, and Hon Hai's
degree of willingness to support Sharp. Nonetheless, given
Sharp's weakened capacity to generate earnings, S&P believes a
recovery in its credit quality on a stand-alone basis will be
difficult. If S&P views Hon Hai's commitment to support Sharp as
not very strong, any upgrade of Sharp may be limited to one to
two notches.
TAKATA CORP: Hawaii Sues Firm Over Defective Air Bags
-----------------------------------------------------
Associated Press reports that the state of Hawaii is suing
Japanese manufacturer Takata Corp. over defective air bags they
say threaten peoples' lives.
The lawsuit filed on May 13 in the First Circuit Court of Hawaii
also names auto manufacturer Honda, the news agency says.
The AP notes that millions of Takata's defective air bags have
been recalled because their inflators can explode, spewing
shrapnel in cars. The report says Hawaii is the first state in
the nation to sue over the air bags, which are blamed for at
least 11 deaths worldwide and more than 100 injuries.
Independent reports have concluded that a chemical used in Takata
air bags -- ammonium nitrate -- can degrade when exposed to heat
and humidity, which can trigger explosions, the report says.
"We're particularly vulnerable here in Hawaii to the defect that
Takata has manufactured . . . we're not going to wait until
something like this happens," the AP quotes Stephen Levins,
executive director of the Hawaii Office of Consumer Protection,
as saying.
According to the AP, Mr. Levins said Takata switched to ammonium
nitrate, a cheaper component for the inflator of the company's
air bags, despite the fact that it was widely known to be an
unstable and dangerous chemical. Honda was in a position where
the company should have known what was going on, Mr. Levins, as
cited by the AP, said.
"Clearly Takata has engaged in a deceptive manner in marketing
this, and actually has put profits, their own profits, over the
personal welfare and safety of people around the United States,
and around the world, and people here in Hawaii," the report
quotes Mr. Levins as saying. "It's a situation that's
intolerable, and we're not going to put up with it."
Honda hasn't yet received the lawsuit so it can't comment, said
Chris Martin, a spokesman for American Honda Co., in an email,
the AP says. Mr. Martin said Honda is cooperating with the
government on the Takata air bag inflator issue, the report
notes.
More than 70,000 cars containing Takata air bags have been sold
in Hawaii, according to the complaint cited by the AP. The state
is seeking penalties of $10,000 per violation, the report states.
Earlier this month, the National Highway Traffic Safety
Administration said it was adding up to 40 million air bags to
the ongoing recall of 28.8 million air bags made by Takata, adds
the AP.
TAKATA CORP: Recall Cost Issues Still Unresolved
------------------------------------------------
Reuters reports that Takata Corp has declared nearly 14 million
air bag inflators defective as part of an expanded U.S. recall,
but it said it considered the recall investigative, leaving the
thorny question of cost-sharing with automakers unresolved.
According to Reuters, the question of just how much Takata will
have to pay for a deepening crisis over potentially deadly
airbags has been hanging heavily over the firm, with management
saying that can be worked out only when there is clarity on the
root cause of the problem.
Until now, automakers have launched what are called investigative
recalls, where they collect parts to determine the reasons for
the defects, Reuters says. Under such recalls, automakers bear
most of the burden, although Takata is widely expected to
shoulder more.
Reuters relates that the airbags have the potential to inflate
violently, spraying metal shrapnel in the vehicle and have been
blamed for 13 deaths and more than 100 injuries, mainly in the
United States.
The report says the company's woes worsened this month with U.S.
authorities announcing a recall of up to 40 million more of the
company's air bags, on top of the more than 50 million that have
already been recalled globally.
The notice to remove 14 million inflators is the first part of
the expanded recall, Reuters notes.
According to the report, Takata spokesman Toyohiro Hishikawa said
that the company considers the newly announced recall
investigative and reiterated the company's stance that it is
waiting until a study it commissioned presents its conclusions in
the summer.
But Mr. Hishikawa added the company "generally agrees" with the
National Highway Traffic Safety Administration's assessment that
a combination of time, environmental moisture and fluctuating
high temperatures contribute to the degradation of the ammonium
nitrate propellant in the inflators, Reuters relays.
"But we can't say that our assessments match NHTSA's 100 percent
because we have yet to make our own conclusions," Reuters quotes
Mr. Hishikawa as saying.
If Takata was found to be solely responsible for the problem, it
could face a bill of more than $9 billion in recall costs, based
on a rough calculation that each replacement kit costs around
$100, Reuters relays.
Sources have said the company has begun looking for a financial
backer to help with the recall costs, Reuters adds.
As reported in the Troubled Company Reporter-Asia Pacific on
April 14, 2016, Nikkei Asian Review said that Takata Corp, mired
in a deepening air bag scandal, hopes to select a sponsor by
August to pursue restructuring under new management. A third-
party committee of outside attorneys and others had briefed
automakers and banks on the plan by April 19, Nikkei said.
Takata hopes to select a sponsor by the end of August and draw up
fresh rehabilitation plans. It likely will accept a management
team from the sponsor.
On Nov. 24, 2014, 24/7 Wall St. said Takata Corporation faces
huge fines, and almost certainly lawsuits (which have already
begun), over its defective airbags. The report related that some
experts believe that the Japanese company was not forthcoming
about the technical failure that caused several serious accidents
and deaths. If Takata goes bankrupt, which could certainly
happen, claims against the company would be in limbo, 24/7 Wall
St. said.
Japan-based Takata Corporation (TYO:7312) --
http://www.takata.com/en/--develops, manufactures and sells
safety products for automobiles. The Company offers seatbelts,
airbags, steering wheels, child seats and trim parts. The Company
has subsidiaries located in Japan, the United States, Brazil,
Germany, Thailand, Philippines, Romania, Singapore, Korea, China
and other countries.
====================
S O U T H K O R E A
====================
DONGBU GROUP: Chief Faces Probe Over Alleged Unfair Stock Trading
-----------------------------------------------------------------
Yonhap News Agency reports that South Korea's financial
authorities are planning to ask prosecutors to investigate the
chief of the finance-to-electronics conglomerate Dongbu Group
over his alleged unfair trading of stocks of group affiliates in
late 2014, industry sources said on May 18.
Yonhap relates that an official from the Financial Services
Commission (FSC) said the authorities found that Dongbu Group
Chairman and CEO Kim Jun-ki used "undisclosed information" to
dispose of some stocks he held in the then-financially troubled
Dongbu Corp. and other group affiliates in November 2014 when
Dongbu Corp. was about to be put under court receivership.
"Kim is suspected of using undisclosed information either to
avoid losses or to gain unfair profits. He sold most of the
stocks (he owned) in Dongbu Corp. by late 2014 before the group's
construction affiliate was placed under a court-led debt
rescheduling program on Dec. 31 (the same year)," the official,
as cited by Yonhap, said.
Sending the chairman's unfair trading case to prosecutors
requires approval from the FSC's Securities & Futures Commission,
the report says.
On May 12, the court selected Keystone, a local private equity
fund, as the preferred bidder for an entire stake in the Dongbu
Corp., according to Yonhap.
Yonhap relates that the Dongbu Group said the chairman spent most
of the proceeds from the stock sale reviving financially shaky
affiliates.
The report says the stocks sold at the time were reportedly
valued at tens of billions of won.
According to Yonhap, FSC officials said the 73-year-old founder
of the Dongbu Group has owned hundreds of thousands of stocks
under borrowed names in group affiliates such as Dongbu Corp.,
Dongbu Securities Co. and Dongbu Insurance Co. for more than two
decades.
As reported in the Troubled Company Reporter-Asia Pacific on
Jan. 2, 2015, Yonhap News said Dongbu Corporation, a financially
troubled construction arm of South Korea's 18th-largest
conglomerate Dongbu Group, said on Dec. 31, 2014, it has filed
for court receivership.
The builder has accumulated debts totaling KRW137 billion
(US$125.9 million) due to mature by the end of 2016, with retail
investors accounting for KRW23 billion, Yonhap disclosed.
* KKR Not Eyeing Ailing Sectors in Korea, CEO Says
--------------------------------------------------
Kim Yoon-mi at The Korea Herald reports that U.S. private equity
giant KKR & Co. is not keen on investing in ailing sectors in
Korea including shipbuilding and steel, its CEO said on May 17.
"We've avoided, not just in Korea but around the world, investing
in steel or shipbuilding or auto companies mainly because of
cyclical nature of those businesses," the report quotes
George Roberts, cochairman and co-CEO of KKR, as saying at a
press conference in Seoul. "We would be delighted to partner
with some other fine Korean companies if they want to expand
outside Korea where they can bring their knowledge and operate
things efficiently, and they need a capital partner," he said.
Established in 1976, KKR has grown into a multi-asset, multi-
strategy firm with its core business being leveraged buyouts. It
manages $125 billion third party capital, on top of its own $10
billion capital, according to the company, the report discloses.
While KKR has invested about $11 billion in the Asian market, the
company wants to increase weight on Korea, where the U.S. private
equity firm has invested $570 million, Mr. Roberts, as cited by
the Korea Herald, said.
He added that KKR tends to focus on consumer businesses and tries
to find companies that it can help improve operations, the report
notes.
KKR first entered the Korean market in 2009 when it acquired
local Oriental Brewery with Affinity Equity Partners for $1.8
billion from AB InBev, the world's largest beer maker.
In five years, KKR helped the Korean company become the market
leader with a 66 percent market share and resold it to AB InBev
for $5.8 billion in 2014.
In March this year, KKR was selected as the preferred bidder for
Kim's Club, a hypermarket franchise with annual sales of around
KRW1 trillion ($852.5 million) under Korean retailer E-Land
Group.
Mr. Roberts declined to comment on the prospects of the Kim's
Club deal, while news reports speculated that heavily indebted
E-Land Group may sell Kim's Club for less than KRW700 billion
that it had initially hoped for, the report notes.
===============
T H A I L A N D
===============
KRUNG THAI: Fitch Affirms 'B' Int'l. Rating for Tier 1 Securities
-----------------------------------------------------------------
Fitch Ratings has today affirmed the ratings on Thailand's four
largest commercial banks. The Long-Term Issuer Default Ratings
(IDRs) on Bangkok Bank Public Company Limited (BBL), Kasikornbank
Public Company Limited (KBank) and Siam Commercial Bank Public
Company Limited (SCB) have been affirmed at 'BBB+', while the
Long-Term IDR of Krung Thai Bank Public Company Limited (KTB) has
been affirmed at 'BBB'. Fitch has also affirmed the National
Long-Term Ratings of two of the banks' subsidiaries - Kasikorn
Securities Public Company Limited (KS) and SCB Securities Company
Limited (SCBS) - at 'AA-(tha)'. The Outlooks are Stable.
KEY RATING DRIVERS
IDRs, NATIONAL RATINGS, and SENIOR DEBT
The IDRs, National Ratings, and Senior Debt of BBL, KBank, and
SCB are driven by their Viability Ratings (VR). The IDRs,
National Ratings, and senior debt of KTB are driven by the
Support Rating Floor.
The National Ratings of KS and SCBS are driven by their status as
strategically important subsidiaries of their respective parents
KBank and SCB. This is due to their key roles in their parent
banks' universal banking strategy, their status as wholly owned
subsidiaries, and high levels of management and operational
integration.
VR
The VRs of BBL, KBank, SCB and KTB reflect their strong domestic
franchises and large client bases. Their standalone financial
profiles have been sound but increasingly pressured against the
backdrop of a persistently negative operating environment.
BBL's VR incorporates its sound asset quality, underpinned by its
conservative risk appetite, a delinquency rate lower than its
peers, and a stronger buffer (in terms of loan-loss reserve). The
ratings also reflect BBL's healthy capital position, with ratios
that are among the highest in the Thai banking sector. Fitch
believes that BBL could maintain its above-average
capitalisation, backed by modest asset growth and profit
accumulation, despite the weaker operating environment. BBL's
liquidity risks are mitigated by its strong deposit franchise and
large holdings of high-quality liquid assets.
KBank's VR reflects Fitch's view that its overall financial
strength compares favourably with similarly rated or higher-rated
peers, particularly on profitability, asset-quality measures and
capital. The rating also take into account Fitch's expectation
that KBank should be able to weather an increasingly challenging
environment over the next one to two years. This is due to its
reasonable buffers in terms of capital, reserve coverage and
earnings.
SCB's VR is supported by its extensive universal banking
franchise, with a particular strength in retail banking. SCB's
higher risk appetite than other large banks leads to some
potential volatility in asset quality across the business cycle,
but consistent profit generation means that its financial
performance is generally strong. The economic environment remains
muted and will continue to constrain SCB's performance and asset
quality, but is not likely to significantly impair its acceptable
capital levels.
KTB's VR is rated two notches below the other large banks,
primarily to reflect its weaker capitalisation and asset quality,
as well as lower profitability compared with the other banks. Key
financial ratios such as the impaired-loan ratio, reserve
coverage, and profitability deteriorated in 2015, and remained
generally below the peer average. KTB also demonstrates greater
vulnerability to the economic slowdown compared with its large
domestic peers, as evident from asset-quality deterioration over
the past 12 months, which is likely to continue. However, most of
the key ratios remain acceptable and in line with - or better
than - overall banking sector averages.
SUPPORT RATING AND SUPPORT RATING FLOOR (SRF)
Fitch deems that all four banks are systemically important to the
Thai financial system. Each has a market share in commercial bank
deposits in excess of 14%. KTB's SRF of 'BBB' is one notch higher
than the other three banks, as it is not only systemically
important but also strategically important to the government. KTB
is the only state-owned commercial bank, with close operational
and branding links to Thailand's Ministry of Finance, and it has
a quasi-policy role supporting government initiatives.
SUBORDINATED DEBT AND OTHER HYBRID SECURITIES
All four banks have issued legacy Tier 2 notes (non-Basel 3
compliant) that are rated one notch down from their Long-Term
IDRs or National Long-Term Ratings. This reflects the
subordination in the capital structure relative to senior
unsecured debt, and is in line with Fitch's approach to rating
such instruments.
KBank's Basel 3 Tier 2 subordinated THB notes are rated one notch
below the National Long-Term Rating, to reflect their partial
write-down feature and higher loss-severity risk relative to
senior unsecured instruments arising from their subordinated
status.
KTB's US dollar-denominated Basel 3 Tier 2 subordinated debt is
rated one notch below the IDR. The use of the support-driven IDR
as the anchor rather than the VR reflects Fitch's view that
government support would flow to KTB to prevent non-viability.
The one-notch differential reflects their subordination status,
the presence of partial rather than full write-down feature, as
well as the lack of going-concern loss-absorption features.
KTB's international hybrid Tier 1 rating of 'B' is rated five
notches below the VR, reflecting going-concern risks of this
instrument that include a noncumulative coupon deferral feature
that could be triggered upon the bank posting a loss. KTB's
national hybrid Tier 1 rating also reflects this implied notching
approach from the VR.
RATING SENSITIVITIES
IDRs, NATIONAL RATINGS, and SENIOR DEBT
The IDRs, National Ratings, and senior debt of BBL, KBank, and
SCB would be affected by any changes in their respective
standalone profiles, as indicated by the VR, including as a
result of negative sovereign rating action (see VR section
below). The National Ratings of the three banks could be upgraded
if the banks can show that they can withstand the current weak
operating environment while continuing to strengthen their key
capital and asset-quality buffers.
The IDR, National Ratings, and senior debt of KTB would be
affected by any changes in its Support Rating Floor, which in
turn reflects the sovereign's capacity and propensity to support
on a timely basis.
The National Ratings of KS and SCBS would be similarly affected
by any changes in their parent's National Ratings. They could
also be affected by any perceived changes in the propensity of
KBank or SCB to support their respective subsidiaries - for
example, if there were a large reduction in shareholding or a
reversal of marketing and management linkages. However, Fitch
does not expect any such changes in the medium term.
VR
There is unlikely to be upside to the VRs for BBL, KBank, and
SCB, as the ratings are at the same level as the sovereign's
Long-Term Foreign Currency IDR (currently BBB+/Stable) and the
banks have a substantial exposure to sovereign bonds. On the
other hand, a downgrade of the sovereign's Long-Term Foreign
Currency IDR could result in negative ratings action for the VRs
of BBL, KBank and SCB.
KTB's VR could be upgraded if it can show sustained improvement
in key financial ratios (particularly in asset quality and
capitalisation) and reduce the current gap with its three peers.
However, this would likely be difficult to achieve in the short
term, given the weak operating environment. Furthermore, although
KTB may improve its profile in a more positive economic
environment, its tendency to fulfil policy-related activities is
most likely to become binding upon its financial profile during
times of greater economic challenges.
For all four banks, there could be a negative impact on the VR by
a sharp slippage in risk appetite discipline and sustained
weakness in asset quality, which leads to - or increases the risk
of - significantly lower capitalisation buffers.
SUPPORT RATING AND SUPPORT RATING FLOOR
Any change in the ability of the authorities to provide support -
such as through a downgrade of the sovereign Long-Term Foreign
Currency IDR - would most likely lead to a similar change in the
SRF of KTB, and would also lead to a re-assessment of the SRFs of
BBL, KBank, and SCB.
Any change in the propensity of the state to provide support to
systemically important banks would also lead to a change in the
SRFs of all four banks. For example, this might be evident from
legislation mandating new controls on the state's powers to
provide equity to banks. However, Fitch does not expect any such
changes in the medium term.
SUBORDINATED DEBT AND OTHER HYBRID SECURITIES
The subordinated and hybrid debts of all four banks would be
affected by any changes in the anchor ratings of the respective
instruments. The ratings on the hybrid Tier 1 notes (both
international and national) would also be re-assessed in the
event the bank posts a loss.
The rating actions are as follows:
BBL
Long-Term Foreign-Currency IDR affirmed at 'BBB+'; Outlook Stable
Short-Term Foreign-Currency IDR affirmed at 'F2'
Viability Rating affirmed at 'bbb+'
Support Rating affirmed at '2'
Support Rating Floor affirmed at 'BBB-'
National Long-Term Rating affirmed at 'AA(tha)'; Outlook Stable
National Short-Term Rating affirmed at 'F1+(tha)'
Senior unsecured $US3billion GMTN programme affirmed at 'BBB+'
Long-term foreign-currency senior unsecured notes affirmed at
'BBB+'
Long-term foreign-currency subordinated debt affirmed at 'BBB'
National long-term subordinated debt affirmed at 'AA-(tha)'
KBank
Long-Term Foreign-Currency IDR affirmed at 'BBB+'; Outlook Stable
Short-Term Foreign-Currency IDR affirmed at 'F2'
Viability Rating affirmed at 'bbb+'
Support Rating affirmed at '2'
Support Rating Floor affirmed at 'BBB-'
National Long-Term Rating affirmed at 'AA(tha)'; Outlook Stable
National Short-Term Rating affirmed at 'F1+(tha)'
Senior unsecured $US2.5billion EMTN programme affirmed at 'BBB+'
Long-term foreign-currency senior unsecured debt affirmed at
'BBB+'
National long-term subordinated debt rating affirmed at 'AA-
(tha)'
SCB
Long-Term Foreign-Currency IDR affirmed at 'BBB+'; Outlook Stable
Short-Term Foreign-Currency IDR affirmed at 'F2'
Viability Rating affirmed at 'bbb+'
Support Rating affirmed at '2'
Support Rating Floor affirmed at 'BBB-'
National long-term rating affirmed at 'AA(tha)'; Outlook Stable
National short-term rating affirmed at 'F1+(tha)'
Senior unsecured $US3.5billion MTN programme affirmed at 'BBB+'
Long-term foreign-currency senior unsecured debt affirmed at
'BBB+'
National rating on short-term senior unsecured debt programme
affirmed at 'F1+(tha)'
National rating on long-term subordinated debt affirmed at 'AA-
(tha)'
KTB
Long-Term Foreign-Currency IDR affirmed at 'BBB'; Stable Outlook
Short-Term Foreign-Currency IDR affirmed at 'F3'
Viability Rating affirmed at 'bbb-'
Support Rating affirmed at '2'
Support Rating Floor affirmed at 'BBB'
National Long-Term Rating affirmed at 'AA+(tha)'; Stable Outlook
National Short-Term Rating affirmed at 'F1+(tha)'
Senior unsecured $US2.5billion EMTN programme affirmed at 'BBB'
Senior unsecured notes affirmed at 'BBB'
Subordinated US dollar debentures affirmed at 'BBB-'
International rating for hybrid Tier 1 securities affirmed at 'B'
National rating on THB20billion short-term debenture programme
affirmed at 'F1+(tha)'
National subordinated debt rating affirmed at 'AA(tha)'
National rating hybrid Tier 1 securities affirmed at 'BBB(tha)'
KS
National Long-Term Rating affirmed at 'AA-(tha)'; Stable Outlook
National Short-Term Rating affirmed at 'F1+(tha)'
SCBS
National Long-Term Rating affirmed at 'AA-(tha)'; Stable Outlook
National Short-Term Rating affirmed at 'F1+(tha)'
*********
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
publication in any form (including e-mail forwarding,
electronic re-mailing and photocopying) is strictly prohibited
without prior written permission of the publishers.
Information contained herein is obtained from sources believed
to be reliable, but is not guaranteed.
TCR-AP subscription rate is US$775 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance
thereof are US$25 each. For subscription information, contact
Peter Chapman at 215-945-7000 or Nina Novak at 202-362-8552.
*** End of Transmission ***