/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/160627.mbx T R O U B L E D C O M P A N Y R E P O R T E R A S I A P A C I F I C Monday, June 27, 2016, Vol. 19, No. 125 Headlines A U S T R A L I A APN NEWS: S&P Affirms Then Withdraws 'BB' Issuer Rating AQUAINT CAPITAL: First Creditors' Meeting Set for July 4 BRONSON GROUP: de Vries Tayeh Appointed as Administrators DICK SMITH: Shareholders to Receive Nothing After Firm Collapse NEWCASTLE DISTRICT: First Creditors' Meeting Set For July 4 TAGARA BUILDERS: Subcontractors to Gain Nothing, Says Liquidator TRITON TRUST 2014-P: Fitch Affirms 'Bsf' Rating on Class F Notes VAN EYK: Macquarie Settles With ASIC Over Handling of Fund C H I N A CHINA AUTOMATION: S&P Lowers CCR to 'B-'; Outlook Negative CHINA GINSENG: $1.6M Debenture Convertible to 4M Shares SHENZHEN BAILI: Firm in Patent Dispute With Apple Insolvent * CHINA: Corporate Bankruptcies Rise 52.5% in Q1 I N D I A ABC TRANSFORMERS: CRISIL Assigns 'B' Rating to INR35MM Loan AJAY ENGICONE: ICRA Assigns 'D' Rating to INR8.47cr Bank Loan ANITHA TEXCOT: CRISIL Reaffirms B+ Rating on INR150MM Cash Loan BANASHANKARI POULTRY: ICRA Assigns 'B' Rating to INR3.5cr Loan BANSHIDHAR CONSTRUCTION: CRISIL Rates INR87.5MM LT Loan at B+ BDB EXIM: CRISIL Reaffirms B+ Rating on INR4MM LT Loan BDB EXPORTS: CRISIL Reaffirms B+ Rating on INR65MM Packing Loan CENTURY TEXOFIN: Ind-Ra Assigns BB Long-Term Issuer Rating COMBINE DIAMONDS: CRISIL Suspends B+ Rating on INR240MM Loan DEWSOFT FABRICATION: Ind-Ra Suspends B Long-Term Issuer Rating GVK BAGODARA: CRISIL Suspends 'D' Rating on INR8.91BB Term Loan HARICONS ENGINEERS: CRISIL Assigns B+ Rating to INR18.5MM Loan KAVITA EXIM: ICRA Suspends B Rating on INR12.50cr Bank Loan KIZAN IRON: CRISIL Suspends B+ Rating on INR100MM Capital Loan KIZAN ISPAT: CRISIL Suspends 'B' Rating on INR1.20BB LT Loan M. A. AMEER: CRISIL Reaffirms 'B' Rating on INR35M Cash Loan MAHASHAKTI POLYCOAT: ICRA Assigns 'B' Rating to INR3.0cr Loan MAHESHWAR REFOILS: ICRA Reaffirms 'B+' Rating on INR4.75cr Loan MANPURIA AGRO: Ind-Ra Assigns BB Long-Term Issuer Rating MANPURIA CONSORTIUM: Ind-Ra Assigns BB Long-Term Issuer Rating MANPURIA REALATORS: Ind-Ra Assigns BB Long-Term Issuer Rating MARUTI NANDAN: CRISIL Reaffirms 'B' Rating on INR101MM Loan MEGHAAARIKA INTERNATIONAL: Ind-Ra Affirms IND BB- Issuer Rating MEHTA INTERTRADE: CRISIL Suspends B+ Rating on INR384MM Loan MONTAGE HEALTH: CRISIL Suspends B+ Rating on INR121.4MM Loan PANALE INFRASTRUCTURES: CRISIL Reaffirms B- Rating on INR26M Loan PIONEER NF: CRISIL Reaffirms 'B' Rating on INR50MM Cash Loan PNP ENGINEERING: CRISIL Ups Rating on INR110MM LT Loan to B- PRABHAT POULTRY: CRISIL Suspends 'D' Rating on INR100MM Term Loan PUNEET LABORATORIES: Ind-Ra Assigns B+ Long-Term Issuer Rating R. B. MEHTA: CRISIL Suspends B+ Rating on INR58MM Loan R. P. MOTORS: ICRA Reaffirms 'B' Rating on INR2.80cr Loan RANKAS TEXFAB: Ind-Ra Assigns BB+ Long-Term Issuer Rating RATNA COT: CRISIL Reaffirms B+ Rating on INR40MM Cash Loan RIVU ENTERPRISES: Ind-Ra Lowers Long-Term Issuer Rating to D ROLTA PRIVATE: Ind-Ra Lowers to 'BB' then Withdraws Rating RUPNARAYAN VANJIYA: Ind-Ra Assigns BB Long-Term Issuer Rating RVS EDUCATIONAL: Ind-Ra Suspends BB+ Rating on INR1,562MM Loan S2 REALTY: ICRA Withdraws D Rating on INR7.0cr Term Loan SAFIRE OFFSET: CRISIL Reaffirms 'D' Rating on INR80MM Cash Loan SAMET PLAST: ICRA Assigns 'B+' Rating to INR5.0cr Cash Loan SARWATI HOME: CRISIL Assigns 'B+' Rating to INR47MM Cash Loan SAYONA CERAMIC: CRISIL Suspends 'B' Rating on INR39.3MM Loan SHIV COTGIN: ICRA Lowers Rating on INR34cr Cash Loan to 'D' SRI GAYATRI: ICRA Suspends 'D' Rating on INR12cr Loan VERONICA MARINE: CRISIL Reaffirms B Rating on INR16.8MM LT Loan VISHAL COATERS: Ind-Ra Suspends IND BB Long-Term Issuer Rating VRV FOODS: Ind-Ra Affirms D Long-Term Issuer Rating J A P A N SHARP CORP: Shareholders Grill Management Over Foxconn Deal S I N G A P O R E DCS ASSET: Fitch Affirms BB Rating on Class C Notes SABANA SHARI'AH: S&P Lowers CCR to 'BB+'; Outlook Stable S O U T H K O R E A MAGNACHIP SEMICONDUCTOR: S&P Affirms 'CCC+' CCR; Outlook Stable S R I L A N K A DFCC BANK: Fitch Affirms 'B+' Long-Term Foreign-Currency IDR - - - - - ================= A U S T R A L I A ================= APN NEWS: S&P Affirms Then Withdraws 'BB' Issuer Rating ------------------------------------------------------- S&P Global Ratings said that it had affirmed its 'BB' issuer and issue ratings on APN News & Media Ltd. S&P subsequently withdrew the rating at the issuer's request. This rating withdrawal follows the shareholder approval of the demerger of the group's New Zealand business and associated equity raising. At the time of withdrawal, the outlook on the long-term rating was stable. RATINGS LIST Not Rated Action; CreditWatch/Outlook Action To From APN News & Media Ltd. Corporate Credit Rating NR/-- BB/Stable/-- Not Rated Action To From APN Newspapers Pty Ltd. Senior Secured Local Currency NR BB Recovery Rating NR 4H Biffin Pty Ltd Senior Secured Local Currency NR BB Recovery Rating NR 4H Buspak Advertising (Hong Kong) Ltd. Senior Secured Local Currency NR BB Recovery Rating NR 4H Cody Outdoor International (Hong Kong) Ltd. Senior Secured Local Currency NR BB Recovery Rating NR 4H Wilson & Horton Ltd. Senior Secured Local Currency NR BB Recovery Rating NR 4H AQUAINT CAPITAL: First Creditors' Meeting Set for July 4 -------------------------------------------------------- Samuel John Freeman of Ernst & Young was appointed as administrator of Aquaint Capital Limited on June 22, 2016. A first meeting of the creditors of the Company will be held at Level 5, Ernst & Young Building, Mounts Bay Road, in Perth, on July 4, 2016, at 12:00 p.m. BRONSON GROUP: de Vries Tayeh Appointed as Administrators --------------------------------------------------------- Riad Tayeh and Suelen McCallum of de Vries Tayeh were appointed as administrators of Bronson Group Limited on June 22, 2016. DICK SMITH: Shareholders to Receive Nothing After Firm Collapse --------------------------------------------------------------- Brendon Foye at CRN reports that Dick Smith administrators have advised shareholders they will not recoup any of their investment following the company's collapse. Based on a preliminary investigation into the affairs of Dick Smith, administrator McGrathNicol believes it is unlikely shareholders would receive any distribution from Dick Smith, CRN relates. "Whilst our investigations to date have revealed that there may be sources of recovery available for the benefit of creditors, at this stage we do not believe that there will be a recovery sufficient to repay creditors in full. On this basis, there will not be a return of capital to shareholders," CRN quotes McGrathNicol administrator Joseph Hayes as saying. CRN notes that Dick Smith fell into administration and receivership on January 5 with reported debts of AUD390 million. Nearly two months later, receivers Ferrier Hodgson announced it was closing its 301 Australian retail stores on February 25, leading to the loss of 2,460 jobs. According to CRN, the administrators have not yet released the full list of creditors, but it said that all employee entitlements would be paid in full. CRN says Ferrier Hodgson filed to change the name of Dick Smith Holdings Limited to DSHE Holdings Limited on June 2. The name change was part of the deal to sell the online business and Dick Smith branding to online retailer Kogan for AUD2.6 million, CRN notes. The name change is effective as of June 23, notes CRN. About Dick Smith Dick Smith Holdings Limited Ltd (ASX:DSH) -- http://dicksmithholdings.com.au/-- is a retailer of consumer electronics products. The Company sells a range of products across four categories: office, mobility, entertainment, and other products and services. The Company has two segments: Dick Smith Australia and Dick Smith New Zealand. The Company connects with its customers through four physical store formats, catering for three distinct consumer demographics: Dick Smith, MOVE, David Jones Electronics Powered by Dick Smith and MOVE by Dick Smith Sydney International Airport. The Company's store network consists of approximately 393 stores across Australia and New Zealand, which include approximately 351 Dick Smith stores, approximately 10 MOVE stores, approximately four MOVE by Dick Smith stores and approximately 28 David Jones Electronics Powered by Dick Smith stores. As reported in the Troubled Company Reporter-Asia Pacific on Jan. 6, 2016, Dick Smith Holdings Ltd was placed in receivership on Jan. 5 following the appointment of Voluntary Administrators. Ferrier Hodgson partners Mr James Stewart, Mr Jim Sarantinos and Mr Ryan Eagle were appointed Receivers and Managers over DSH and an number of associated entities. The appointment was made by a syndicate of lenders which hold security over the group. NEWCASTLE DISTRICT: First Creditors' Meeting Set For July 4 ----------------------------------------------------------- James Stuart McPherson & Gavin Moss of Chifley Advisory Pty Ltd were appointed as administrators of Newcastle District Tennis Club Ltd on June 22, 2016. A first meeting of the creditors of the Company will be held at First Floor Theatrette of the City Library Cultural Centre, Laman Street, in Newcastle, on July 4, 2016, at 12:00 p.m. TAGARA BUILDERS: Subcontractors to Gain Nothing, Says Liquidator ---------------------------------------------------------------- Renato Castello at The Advertiser reports that subcontractors owed millions of dollars by failed construction firm Tagara Building are unlikely to receive a cent, a year on from the spectacular collapse of the South Australian company. And the amount owed to the nearly 800 creditors -- which includes staff and subcontractors -- has ballooned to more than AUD27 million, The Advertiser discloses citing the latest calculations by liquidators. Last year Tagara directors John Kassara and Tullio Tagliaferri released a statement pledging to co-operate with the liquidators to "get the best outcome for creditors" after their 22-year-old firm went into liquidation with AUD21 million in debts leaving employees and subcontractors in limbo, The Advertiser recalls. But joint liquidator Simon Miller, director of Clifton Hall indicated to The Advertiser that any return to the more than 700 subcontractors engaged on the company's 20-odd projects appeared unlikely. "To date, the recoveries from the projects have not been sufficient to clear the priority claims (employee entitlements)," he said on the eve of the company's collapse, the report relays. "Unfortunately we don't estimate a dividend to creditors. "On any event, we will write to creditors within three months of the anniversary of the appointment (26 June 2016). Depending on the developments over the next few months, we may also call a meeting of creditors at that time." His firm has revised the debt bill to AUD27.5 million and he said that it is "likely to go up," The Advertiser relays. According to The Advertiser, Mr Miller said of the AUD1.67m owed to staff, AUD930,000 of eligible claims had been paid. Tagara had about AUD70m in projects across South Australia before it went into liquidation in June last year, The Advertiser notes. The Advertiser relates that at least seven subcontractors are pursuing claims for payment through the Supreme Court having lodged almost AUD4 million worth of liens on the Murray Bridge Green Shopping Centre, which Tagara was building before it collapsed. The action is to try and recoup any money owed to Tagara by the property owners MBC Holdings (SA) Pty Ltd and Greenhill Holdings Pty Ltd, The Advertiser says. According to The Advertiser, lawyer David Ellix, who is acting for creditors TC Formwork, Whitty's Excavations, Fast Fix Steel Fixing Services in the Supreme Court action, said his clients should know within a fortnight if there was any money available to them. "The owner's claim there is nothing outstanding and that Tagara owes them millions of dollars," the report quotes Mr. Ellix as saying. "We're just confirming what the true position is. If there's no money owed, the liens mean nothing." The Advertiser says some subcontractors went into liquidation shortly after the failure of Tagara. Among them were plumbing firm RS Burbidge and Charter Construction who have claimed debts of AUD236,037 and AUD614,095 respectively. South Australia-based Tagara Builders was placed into liquidation on July 26, 2015. Timothy Clifton and Simon Miller of Clifton Hall were appointed as Joint and Several Liquidators of the company. The builder owed more than 750 suppliers and subcontractors AUD21.6 million, according to the notice to creditors issued earlier this month by Clifton Hall. TRITON TRUST 2014-P: Fitch Affirms 'Bsf' Rating on Class F Notes ---------------------------------------------------------------- Fitch Ratings has affirmed the ratings of 18 tranches from five Triton Trust RMBS transactions. These transactions are backed by pools of Australian residential mortgages. The notes have been issued by Perpetual Corporate Trust Limited, in its capacity as trustee. KEY RATING DRIVERS The affirmations reflect Fitch's view that the available credit enhancement is sufficient to support the notes' current ratings and the agency's expectations of Australia's economic conditions. Credit quality and performance of the underlying loans remain within Fitch's expectations. As per the APAC Residential Mortgage criteria, the default model was not run for the two transactions, Triton Trust No. 2 Bond Series 2013-1 (Triton 2013-1) and Triton Trust No. 2 Bond Series 2014-1 (Triton 2014-1), as a review of pre-determined performance triggers indicates the transactions display stable asset performance. The default model was run for Triton Trust No.2 Bond Series 2014-P (Triton 2014-P), Triton Trust No.7 Bond Series 2015-1 (Triton 2015-1) and Triton Trust No.7 CS Warehouse Series No 1 (Triton CS). At April 30, 2016, Triton 2014-P had the highest level of arrears at 8.0%, above Fitch's 4Q15 Dinkum RMBS Index of 0.95%. Low- documentation loans made up 24.0% of the pool, which had an average loan to value ratio (LVR) of 68% and an indexed LVR of 54.2%. Interest-only loans accounted for 26.5% of the pool by balance and investment loans made up 52.3%. Lender's mortgage insurance (LMI) covered 21.9% of the Triton 2014-P pool and was provided by Genworth Financial Mortgage Insurance Pty Ltd (Insurer Financial Strength Rating: A+/Stable) and QBE Lenders' Mortgage Insurance Limited (Insurer Financial Strength Rating: AA-/Stable). At the end of April 2016, Triton 2013-1, Triton 2014-1 and Triton 2015-1 had arrears levels below Fitch's 4Q15 Dinkum RMBS Index of 0.95%, while Triton CS had 30+ days arrears of 1.9%. All loans in the underlying portfolios have LMI provided by Genworth Financial Mortgage Insurance Pty Ltd and QBE Lenders' Mortgage Insurance Limited. The transactions have performed within Fitch's expectations, with minimal levels of losses. Since closing, only Triton 2013-1 and Triton 2014-P have experienced losses, resulting in zero losses across the outstanding Fitch-rated notes. LMI covered 89% of the losses, with all losses not paid by LMI covered by excess spread. The ratings of the Triton 2014-P notes have not been upgraded, despite increased credit enhancement, as the transaction is currently constrained by concentration, based on the pool composition. RATING SENSITIVITIES The ratings are not expected to be affected by any foreseeable change in performance. The pro-rata amortization will switch to sequential when the call-option triggers are met, mitigating tail-risk. All the notes of Triton Trust No.7 CS Warehouse Series No 1 are LMI dependent; therefore LMI is a key driver supporting the 'AAAsf' rating. The class A notes' ratings of the remaining transactions are independent of downgrades to the LMI provider's ratings. There are currently no charge offs on any notes. The prospect for downgrades is considered remote at present, given the level of subordination available to all rated notes, the performance of the pools as well as adequate excess spread. 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 review of 10 sample loan files focusing on the underwriting procedures conducted by Columbus Capital Pty Limited compared to its credit policy at the time of underwriting. Fitch checked the consistency and plausibility of the information and no material discrepancies were noted that would impact Fitch's rating analysis. The full list of rating actions is: Triton Trust No.2 Bond Series 2013-1: -- AUD166.6 mil. Class A notes affirmed at 'AAAsf'; Outlook Stable -- AUD26.2 mil. Class AB notes affirmed at 'AAAsf'; Outlook Stable Triton Trust No.2 Bond Series 2014-P: -- AUD58.0 mil. Class A1 notes affirmed at 'AAAsf'; Outlook Stable -- AUD13.1 mil. Class A2 notes affirmed at 'AAAsf'; Outlook Stable -- AUD3.9 mil. Class B notes affirmed at 'AAsf'; Outlook Stable -- AUD3.0 mil. Class C notes affirmed at 'Asf'; Outlook Stable -- AUD3.7 mil. Class D notes affirmed at 'BBBsf'; Outlook Stable -- AUD3.7 mil. Class E notes affirmed at 'BBsf'; Outlook Stable -- AUD0.7 mil. Class F notes affirmed at 'Bsf'; Outlook Stable Triton Trust No.2 Bond Series 2014-1: -- AUD265.2 mil. Class A notes affirmed at 'AAAsf'; Outlook Stable -- AUD30 mil. Class AB notes affirmed at 'AAAsf'; Outlook Stable Triton Trust No.7 Bond Series 2015-1 (May 2016): -- AUD300.0 mil. Class A1 notes affirmed at 'AAAsf'; Outlook Stable -- AUD0 mil. Class A2 notes affirmed at 'AAAsf'; Outlook Stable -- AUD18.8 mil. Class B notes affirmed at 'AAsf'; Outlook Stable -- AUD6.8 mil. Class C notes affirmed at 'BBBsf'; Outlook Stable Triton Trust No.7 CS Warehouse Series No 1: -- AUD97.6 mil. Class A notes affirmed at 'AAAsf'; Outlook Stable -- AUD6.0 mil. Class B notes affirmed at 'Asf'; Outlook Stable -- AUD1.5 mil. Class D notes affirmed at 'BBsf'; Outlook Stable VAN EYK: Macquarie Settles With ASIC Over Handling of Fund ---------------------------------------------------------- Robb M. Stewart at The Wall Street Journal reports that Macquarie Group Ltd. has admitted to violating Australia's corporations act by failing to properly oversee a collapsed fund manager that invested in a Cayman Islands fund. The Journal relates that Macquarie Investment Management Ltd., an arm of Sydney-based Macquarie, said it reached a settlement with the Australian Securities and Investments Commission over its role in one of a series of funds managed by van Eyk Research Pty. Ltd., which went into liquidation in 2004. According to the Journal, Macquarie Investment and the securities and investment commission filed joint court submissions related to an agreed settlement as the corporate regulator launched proceedings in the Supreme Court of New South Wales state on June 23. Both sides plan to request an early hearing from the court, which will rule on penalty amounts. The Journal says the case against Macquarie comes as Australia's banks face accusations from lawmakers about a failure of corporate culture. In recent months, the securities and investment commission has taken three of the country's biggest banks to court for allegedly manipulating the setting of the primary interest-rate benchmark. The Journal relates that the opposition Labor Party has said it would hold a royal commission, Australia's highest form of investigation, to look into alleged misconduct in the banking and financial services industry if it wins this week's federal election. According to the report, the environment-focused Greens party has also called for a commission to explore what it said is a sector "riddled with scandals" in recent years. The Liberal-led government doesn't support a commission. In its settlement with the regulator, Macquarie Investment admitted it didn't exercise sufficient care and diligence with van Eyk's 2012 decision to invest in a Cayman Islands-based fund called Artefact Partners Global Opportunities Fund, or in monitoring of the investments and liquidity of van Eyk's fund, the Journal relays. In all, there were five contraventions of the corporations act. In early August 2014, Macquarie Investment suspended redemptions from the van Eyk Blueprint International Shares Fund, or VBI Fund, and three other van Eyk Blueprint funds that had invested in the VBI Fund after learning that Artefact had invested in an illiquid investment, the Journal recalls. Later that month it terminated the VBI Fund. Unit holders were owed about 30.9 million Australian dollars (US$23.2 million). The Journal relates that the securities and investment commission said Artefact has since repaid AUD20 million to the VBI Fund, and Macquarie Investment recently paid the remaining amount plus interest to investors. It expects to recover the majority of that from Artefact's liquidators. Macquarie said the money invested in Artefact in 2012 has now been returned to investors, the Journal relays. The Journal adds that the commission said it continues to investigate van Eyk. Earlier this month, the regulator launched legal action against National Australia Bank Ltd., accusing it of market manipulation and "unconscionable conduct" with regard to rate setting several years ago, the Journal notes. It began similar proceedings against Westpac Banking Corp. in early April and against Australia & New Zealand Banking Group Ltd. a month earlier. Each of the banks have denied wrongdoing and said they would defend themselves in court, says the Journal. In April, Australia's banks agreed to new measures that included improved protections for whistleblowers and the immediate establishment of an independent review for product-sales commissions and product-based payments that might not benefit customers, adds the Journal. As reported in the Troubled Company Reporter-Asia Pacific on Oct. 23, 2014, The Australian said van Eyk Research has been put into liquidation on the recommendation of an administrator. The Australian related that administrator Trent Hancock, from Sydney accountants Moore Stephens, said corporate regulator ASIC had been investigating the group's financial failure, as had the Financial Markets Authority in New Zealand, where it also has operations. Van Eyk went into administration in September 2014 after Macquarie Investement Management, which was acting as responsible entity for the Blueprint series of funds, terminated all but one of the 14-fund series after a run on redemptions by investors that started in August. Macquarie had declared three of the funds to be "illiquid", according to The Australian. ========= C H I N A ========= CHINA AUTOMATION: S&P Lowers CCR to 'B-'; Outlook Negative ---------------------------------------------------------- S&P Global Ratings said that it had lowered to 'B-' from 'B+' its long-term corporate credit rating on China Automation Group Ltd. (CAG), a China-based provider of safety and critical control systems and control valves. The outlook is negative. At the same time, S&P lowered its issue rating to 'B-' from 'B+' on the US$30 million 8.75% senior unsecured notes due 2018 issued by Tri-Control Automation Co. Ltd. CAG unconditionally and irrevocably guarantees the notes. In addition, S&P lowered its long-term Greater China regional scale on CAG and its notes to 'cnB-' from 'cnBB-'. "We lowered the rating on CAG because we expect the company's profitability and leverage to weaken further over the next 12 months," said S&P Global Ratings credit analyst Stanley Chan. S&P believes CAG's business performance and profitability will remain sluggish in the coming 12 months. S&P sees project delays at its end customers continuing to weigh on the company's revenue and profitability. CAG's customers are mainly in petrochemical and coal chemical related industries and suffer from weak commodity prices and economic down cycles, and are accordingly inclined to postpone their capital expenditure plans, even if they have agreements with CAG. CAG has also seen a price war for its business segment. S&P also believes it is unlikely the company can materially reduce its fixed overhead costs. Therefore, S&P revised its EBITDA margin forecast to 2%-5% in the coming 12 months, from 8.8% in 2015. S&P expects CAG's leverage to weaken further. S&P believes the sharp reduction in EBITDA would reduce the company's interest and debt serving capabilities. S&P estimates EBITDA interest coverage to deteriorate to 0.3x-1x in 2016 and 2017 from 1.5x in 2015. S&P also sees potential risk that CAG's gross debt will increase further as working capital is subject to high volatility. S&P believes the company faces heightened refinancing risk due to a large amount maturing debt due in the coming six-to-12 months. In S&P's view, CAG's liquidity position will largely depend on its proposed Chinese renminbi (RMB) 200 million onshore bond issuance and its asset disposal plan. S&P estimates that CAG's cash on hand of RMB270 million and expected operating cash inflow of RMB25 million-RMB30 million will not be sufficient to cover the maturing debt of RMB420 million in the coming 12 months, if the company fails to effectively complete its funding plans. Although CAG has a track record of refinancing in the offshore and onshore market, S&P believes the company is still vulnerable to any sudden change to the currently favorable liquidity conditions in the onshore market. S&P is also cautious over the timing and overall size of refinancing the company can secure in the coming 12 months. S&P assess CAG's liquidity as less than adequate because S&P estimates the company's liquidity sources are unlikely to exceed 1.2x of liquidity uses over the next 12 months. Still, S&P believes the company can maintain a fair relationship with banks and a fair standing in credit markets. "The negative outlook reflects our expectation that CAG will have very high leverage with limited sign of improvement in the coming 12 months," said Mr. Chan. "We expect the company to have a weak debt and interest servicing capability position over the next 12 months." The outlook also reflects S&P's expectation that the weighted average maturity of debt is less than 1.5 years, and liquidity and refinancing risk may escalate in the coming six-to-12 months if there is any delay in the refinancing plan. S&P may lower the ratings by one or more notches if there is any material delay or unfavorable change to CAG's refinancing plan to address its short-term debt maturities and sustainably improve its liquidity profile. This could happen if: (1) CAG fails to refinance it maturing short-term debt with longer tenor debt; (2) the company's profitability deteriorates further due to its high fixed cost structure, weak customer demand, or price war with peers; (3) its operating cash flows are substantially lower than we estimate; or (4) it undertakes a more aggressive capex plan funded by debt. S&P could revise the outlook to stable if: (1) CAG can strengthen its liquidity such that sources of liquidity exceed uses of liquidity by a material amount and the company lengthens its debt maturity profile to materially more than two years; and (2) the company improves its interest serving capability such that EBITDA interest coverage improves to materially higher than 1x. CHINA GINSENG: $1.6M Debenture Convertible to 4M Shares ------------------------------------------------------- On July 21, 2015, in connection with a security purchase agreement between China Ginseng Holdings, Inc. and an investor, China Ginseng closed a private placement to sell a Series A Convertible Debenture for a price of $1,600,000. The Debenture is convertible into 4,000,000 shares of the Company's common stock, par value $0.001 per share, at a conversion price of $.40 per share. On June 15, 2016, the Investor informed the Company its intent to convert the Debenture into shares of the Company's common stock. Accordingly, pursuant to the Debenture, the Company will issue an aggregate amount of 4,000,000 shares of its common stock, to the Investor. The Offering was made in reliance upon the exemption from securities registration afforded by Regulation S as promulgated under the Securities Act of 1933, as amended. About China Ginseng Changchun City, China-based China Ginseng Holdings, Inc., conducts business through its four wholly-owned subsidiaries located in China. The Company has been granted 20-year land use rights to 3,705 acres of lands by the Chinese government for ginseng planting and it controls, through lease, approximately 750 acres of grape vineyards. However, recent harvests of grapes showed poor quality for wine production which indicates that the vineyards are no longer suitable for planting grapes for wine production. Therefore, the Company has decided not to renew its lease for the vineyards with the Chinese government upon expiration in 2013 and, going forward, it intends to purchase grapes from the open market in order to produce grape juice and wine. China Ginseng reported a net loss of $3.90 million on $272,600 of revenue for the year ended June 30, 2015, compared with a net loss of $4.76 million on $2.61 million of revenue for the year ended June 30, 2014. As of March 31, 2016, China Ginseng had $8.66 million in total assets, $21.40 million in total liabilities and a total stockholders' deficit of $12.73 million. Cowan, Gunteski & Co., P.A., in Tinton Falls, NJ, issued a "going concern" qualification on the consolidated financial statements for the year ended June 30, 2015, citing that the Company had net losses of $3.90 million and $4.76 million for the years ended June 30, 2015 and 2014, respectively, an accumulated deficit of $18.1 million at June 30, 2015 and a working capital deficit of $16.5 million at June 30, 2015, and there are existing uncertain conditions the Company faces relative to its ability to obtain working capital and operate successfully. These conditions raise substantial doubt about its ability to continue as a going concern. SHENZHEN BAILI: Firm in Patent Dispute With Apple Insolvent ----------------------------------------------------------- Eva Dou and Alyssa Abkowitz at The Wall Street Journal report that when a Beijing regulator recently ruled against Apple Inc. in a patent dispute, it handed a victory to a Chinese company that barely exists. Phone calls to the company, Shenzhen Baili Marketing Services Co., ring unanswered. Its websites have been deleted. Visits to its three registered addresses found no company offices, says the Journal. The Journal notes that Baili and its parent, Digione, are part of a rapid boom and bust in China's new wave of smartphone makers. When Baili took on Apple in December 2014, telling Chinese regulators that the Cupertino, Calif., company's new models infringed on its smartphone design patents, it had bold aspirations, a big-name investor in Chinese internet giant Baidu Inc. and a team of experienced executives, according to the Journal. The Journal relates that by the time regulators reached a decision this year, Digione had collapsed, brought down by buggy products, mismanagement and fierce competition, according to former employees and investors. Digione has been absent from China's mobile-phone market for at least a year and Baidu has accused it of squandering its investment. Digione lawyer Andy Yang, of Beijing Wis & Weals said Baili, its unit that registered the phone patents, will continue to battle Apple in court, the Journal relates. "Shenzhen Baili is still operational in its necessary functions," he said. Mr. Yang declined to comment on queries on Digione's relationship with Baidu, the Journal notes. Digione, whose formal name is Shenzhen City 100/100 Digital Technology Co., and Baili are both insolvent, their debt exceeding their total assets, the Journal discloses citing the companies' annual financial reports. * CHINA: Corporate Bankruptcies Rise 52.5% in Q1 ------------------------------------------------ China Daily reports that Chinese courts accepted 1,028 cases filed for bankruptcy in the first quarter of 2016, an increase of 52.5 percent year on year, the Supreme People's Court (SPC) said June 22. Among them, 507 cases were concluded in the first three months, up 61 percent compared to the same period last year, the SPC added, China Daily relays. According to China Daily, the SPC said that during the period from 2008 to 2015, 19,551 bankruptcy cases were accepted and 21,995 cases including those filed before 2008 were concluded by courts nationwide. China's corporate bankruptcy law, which is intended to protect both creditors of bankrupt companies and the companies' employees, went into effect from June 1, 2007, China Daily notes. Chinese courts have sped up trials for bankruptcy cases in recent years, which has boosted transformation of economic development pattern and the building of a fair and orderly market, said Yang Linping with the SPC, adds China Daily. ========= I N D I A ========= ABC TRANSFORMERS: CRISIL Assigns 'B' Rating to INR35MM Loan ----------------------------------------------------------- CRISIL has assigned its 'CRISIL B/Stable/CRISIL A4' ratings to the bank facilities of ABC Transformers Private Limited (ATPL). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Proposed Fund-Based Bank Limits 5 CRISIL B/Stable Bank Guarantee 25 CRISIL A4 Cash Credit 35 CRISIL B/Stable The ratings reflect the company's modest scale of operations, weak financial risk profile marked by high gearing, working capital intensive operations, and geographical concentration in revenue. These weaknesses are partially offset by the extensive experience of promoters in the transformers industry. Outlook: Stable CRISIL believes ATPL will continue to benefit over the medium term from the extensive experience of its promoters. The outlook may be revised to 'Positive' in case of higher-than-expected cash accrual, while improving working capital management and hence, financial risk profile, particularly liquidity. The outlook may be revised to 'Negative' if substantially low cash accrual, or sizeable working capital requirement or debt-funded capital expenditure puts pressure on liquidity. Incorporated in 1993 and promoted by Mr. GK Bansal, Mr. NK Goyal, Mr. SR Gupta, Mr. KK Bansal, and Mr. OP Goyal (the last two joined the company later), ATPL manufactures and repairs power and distribution transformers. The company has two plants in Noida. Net profit was INR5.98 million on sales of INR171.5 million for 2014-15 (refers to financial year, April 1 to March 31), against INR3.31 million on sales of INR177.8 million for 2013-14. AJAY ENGICONE: ICRA Assigns 'D' Rating to INR8.47cr Bank Loan ------------------------------------------------------------- ICRA has assigned a long-term rating of [ICRA]D to the INR0.28 crore term loan and INR1.25 crore cash credit facilities of Ajay Engicone Pvt. Ltd. ICRA has also assigned a long-term and short-term rating of [ICRA]D to the INR8.47 crore bank guarantee facility of AEPL. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund-Based Limit Term Loan 0.28 [ICRA]D assigned Fund-Based Limit Cash Credit 1.25 [ICRA]D assigned Non-Fund Based Limit Bank Guarantee 8.47 [ICRA]D assigned The assigned rating primarily takes into account AEPL's unsatisfactory track record in timely servicing of debt obligations. The rating factors in the consistent decline in the top-line of the company during the past two years along with a moderate order book position, which provides limited revenue visibility over the medium term, and the high working capital intensity of the business due to the company's high receivable position, which adversely impacts its liquidity position. The rating is also constrained by the highly competitive nature of the construction industry, wherein business is procured on a tender-based contract awarding system, which keeps margins of all the players, including AEPL, under check. The rating, however, favourably considers the long experience of the promoters in the civil construction business and its clientele, comprising Government and semi-Government bodies, leading to a relatively low counterparty risk. Incorporated in March 1997, AEPL constructs and maintains roads, dams, canals and bridges in the states of Jharkhand and Bihar. The company is registered as a Class-I contractor with the Road Construction Department, Jharkhand. In 1997, it took over the entire business of the partnership firm - M/s Ajay Construction, which had been in the same line of business since 1982. Recent Results During FY2016, the company reported a turnover of INR10.13 crore (provisional). It reported a net profit of INR0.63 crore on an operating income of INR16.62 crore in FY2015. ANITHA TEXCOT: CRISIL Reaffirms B+ Rating on INR150MM Cash Loan --------------------------------------------------------------- CRISIL's rating on the long-term bank facilities of Anitha Texcot India Private Limited (ATPL) continues to reflect the company's modest scale of operations in the intensely competitive cotton trading business, and its below-average financial risk profile. These weaknesses are partially offset by extensive industry experience of its promoters, and its established customer base. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 150 CRISIL B+/Stable (Reaffirmed) Proposed Long Term Bank Loan Facility 50 CRISIL B+/Stable (Reaffirmed) Outlook: Stable CRISIL believes ATPL will continue to benefit over the medium term from its promoters' extensive industry experience. The outlook may be revised to 'Positive' if scale of operations increases significantly, and financial risk profile improves on account of higher cash accrual or better capital structure. The outlook may be revised to 'Negative' if financial risk profile deteriorates because of increase in working capital requirement or lower profitability, leading to fall in cash accrual. Update ATPL's revenue is estimated to have increased 10.8 percent year- on-year to INR1.6 billion in 2015-16 (refers to financial year, April 1 to March 31), in line with CRISIL's expectation, largely led by increase in customer base. Operating margin remained stable, at 3 percent, because of ability to pass on changes in input prices. Working capital cycle is expected to improve with efficiency in inventory due to increased procurement against customer orders. Also, efficient realization of receivables resulted in decline in gross current asset days to 101 days as on March 31, 2016, from 134 days a year earlier. The company will maintain efficient working capital management over the medium term, with steady inventory and receivables. Financial risk profile remains constrained by high total outside liabilities to tangible networth ratio (expected at 4.96 times as on March 31, 2016), because of substantial creditors and advances from customers. Debt protection metrics are likely to remain comfortable, with net cash accrual to total debt and interest coverage ratios estimated at 16 percent and 2.3 times, respectively, in 2015-16. ATPL's liquidity will remain adequate over the medium term, with sufficient cash accrual to meet long-term debt obligations. Its bank line utilisation averaged 85 percent over the 12 months through March 2016. ATPL, set up in 1999 as a partnership firm and reconstituted as a private limited company in 2012, trades in Melange (blended) yarn, cotton yarn, and viscous yarn. Its daily operations are managed by Mr. A Elangovan and Mr. A Chandrasekharan. For 2014-15, ATPL has reported a profit after tax (PAT) of INR9.4 million on revenue of INR1.5 billion as against a PAT of INR12.3 million on revenue of INR1.7 billion in 2013-14. For 2015-16, the company is expected to report revenues of INR1.6 billion. BANASHANKARI POULTRY: ICRA Assigns 'B' Rating to INR3.5cr Loan -------------------------------------------------------------- ICRA has assigned a long term rating of [ICRA]B to the INR3.50 crore working capital limit and INR2.70 crore term loan facility of Banashankari Poultry Farms Private Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Working Capital Limit 3.50 [ICRA]B; assigned Term Loans 2.70 [ICRA]B; assigned The assigned rating is constrained by the small scale of BPFPL's operations that limits economies of scale and the highly working capital intensive nature of operations resulting in high gearing levels and high utilization of working capital limits. ICRA further takes note of the inherent weaknesses of the business in the form of seasonal demand and susceptibility to risks like disease outbreak. Further, the rating is constrained by the fragmented industry structure with the presence of various unorganised players which limits pricing flexibility, while the profitability margins remain vulnerable to volatility in the feed prices (i.e. Maize and Soya). However, the rating favourably considers the extensive experience of the promoters in the poultry industry and the increasing trend in consumption of poultry products in the country which is likely to support long- term growth of the domestic industry. Going forward, the company's ability to scale-up its operations, maintain profitability and efficiently manage its working capital requirements will remain key rating sensitivities. Established in 2001, BPFPL is a closely held company owned and managed by Mr. S N Raghunath and his family. The company is engaged in the breeding of parent broiler bird and sells the hatchable eggs laid by the birds. The company's plant is located at Malur (Karnataka) with breeder farming capacity of 60,000 birds and hatching capacity of 1,20,000 eggs per week. The promoters of BPFPL are also associated with other group entities namely, Banashankari Agro Farms LLP, Banashankari Feeds, Madhuban Industries and Banashankari Enterprises. Recent Results As per FY 2016 (provisional unaudited financials), BPFPL recorded a net profit of INR0.66 crores on an operating income of INR9.06 crores. During FY 2015, the company recorded a net profit of INR0.09 crore on an operating income of INR7.30 crore, as against a net profit of INR0.07 crore on an operating income of INR6.46 crore in FY 2014. BANSHIDHAR CONSTRUCTION: CRISIL Rates INR87.5MM LT Loan at B+ ------------------------------------------------------------- CRISIL has assigned its 'CRISIL B+/Stable' rating to the long- term bank loan facility of Banshidhar Construction Private Limited (BCPL). The rating reflects the company's volatile revenue and profitability on account of tender-based business, and its large working capital requirement. These weaknesses are partially offset by its promoters' extensive experience in the civil construction industry, and its moderate financial risk profile because of moderate debt protection metrics. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Long Term Loan 87.5 CRISIL B+/Stable Outlook: Stable CRISIL believes BCPL will continue to benefit over the medium term from its promoters' extensive industry experience. The outlook may be revised to 'Positive' if there is significant and sustained increase in revenue and profitability leading to better-than-expected cash accrual, and improvement in working capital management. Conversely, the outlook may be revised to 'Negative' in case of low cash accrual, increase in working capital requirement, or larger-than-expected debt-funded capital expenditure, constraining liquidity. BCPL, incorporated in 2007-08 (refers to financial year, April 1 to March 31), undertakes construction of roads, and irrigation projects for Water Resource Department for Bihar. The company is promoted by Mr. Subhash Yadav, Mr. Ram Prasad Rai, Mr. Ashok Rai, and Mr. Dev Prasad. BDB EXIM: CRISIL Reaffirms B+ Rating on INR4MM LT Loan ------------------------------------------------------ CRISIL's ratings on the bank facilities of BDB Exim Private Limited (BDB Exim; part of the BDB group) continue to reflect the BDB group's average financial risk profile because of modest networth and subdued debt protection metrics. The ratings also factor in a small scale of operations and susceptibility to volatility in raw material prices. These rating weaknesses are partially offset by the extensive experience of promoters in the agro industry and efficient working capital requirement. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 1 CRISIL A4 (Reaffirmed) Packing Credit 95 CRISIL A4 (Reaffirmed) Proposed Long Term Bank Loan Facility 4 CRISIL B+/Stable (Reaffirmed) For arriving at its ratings, CRISIL has combined the business and financial risk profiles of BDB Exim and BDB Exports Pvt Ltd (BDB Export). This is because both the companies, together referred as BDB group, are in the same line of business, with operational fungibility, and have a common management. Outlook: Stable CRISIL believes the BDB group will continue to benefit over the medium term from the extensive industry experience of promoters. The outlook may be revised to 'Positive' if significant improvement in scale of operations while maintaining profitability and working capital management results in higher cash accrual and subsequently improved financial risk profile. Conversely, the outlook may be revised to 'Negative' in case of deterioration in the financial risk profile, most likely because of a decline in revenue or profitability, or a stretch in its working capital cycle. BDB Export and BDB Exim, both based in Kolkata were established in late 2000 by the Bhura family. The entities export cotton bales, cotton fabrics, bleaching powder, and agricultural commodities such as rice, wheat, maize and others. BDB EXPORTS: CRISIL Reaffirms B+ Rating on INR65MM Packing Loan --------------------------------------------------------------- CRISIL's ratings on the bank facilities of BDB Exports Private Limited (BDB Export; part of the BDB group) continue to reflect the BDB group's average financial risk profile because of modest networth and subdued debt protection metrics. The ratings also factor in a small scale of operations and susceptibility to volatility in raw material prices. These rating weaknesses are partially offset by the extensive experience of promoters in the agro industry and efficient working capital requirement. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 2.5 CRISIL A4 (Reaffirmed) Export Packing Credit 65.0 CRISIL B+/Stable (Reaffirmed) Proposed Long Term Bank Loan Facility 22.5 CRISIL B+/Stable (Reaffirmed) For arriving at its ratings, CRISIL has combined the business and financial risk profiles of BDB Export and BDB Exim Pvt Ltd (BDB Exim). This is because both the companies, together referred to as the BDB group, are in the same line of business, with operational fungibility, and have a common management. Outlook: Stable CRISIL believes the BDB group will continue to benefit over the medium term from the extensive industry experience of promoters. The outlook may be revised to 'Positive' if significant improvement in scale of operations while maintaining its profitability and working capital management results in higher cash accrual, and subsequently, improved financial risk profile. Conversely, the outlook may be revised to 'Negative' in case of deterioration in its financial risk profile, most likely because of a decline in revenue or profitability, or a stretch in its working capital cycle. BDB Export and BDB Exim, both based in Kolkata were established in late 2000 by the Bhura family. The entities export cotton bales, cotton fabrics, bleaching powder, and agricultural commodities such as rice, wheat, maize and others. CENTURY TEXOFIN: Ind-Ra Assigns BB Long-Term Issuer Rating ---------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned Century Texofin Private Limited (CTPL) a Long-Term Issuer Rating of 'IND BB'. The Outlook is Stable. KEY RATING DRIVERS The ratings reflect CTPL's moderate scale of operations, weak credit metrics and volatile profitability. According to FY16 provisional financials, its revenue was INR1,104.45 mil. (FY15: INR1,355.08), interest coverage (operating EBITDA/gross interest expense) was 1.58x (1.52x), net leverage (total adjusted net debt/operating EBITDAR) was 6.53x (8.08x) and EBITDA margins were 5.47% (3.32%). The ratings are constrained by CTPL's presence in the highly competitive and fragmented textile industry and long net working capital cycle of 125days in FY16 (FY15: 94days). The ratings, however, are supported by CTPL's comfortable liquidity profile as evident from 76.13% utilization of its fund- based limits during the 12 months ended May 2016. The ratings are further supported by over 30 years of operating experience of the company's promoters' in the textile industry. RATING SENSITIVITIES Positive: Improvement in the operating profitability leading to an improvement in the credit metrics could lead to a positive rating action. Negative: A decline in the operating profitability leading to deterioration in the credit metrics or further deterioration in the working capital cycle could lead to a negative rating action. COMPANY PROFILE CTPL, incorporated in 2007, is into the business of processing of cotton fabrics and producing dyed poplin and lining rubia which is used in ladies dress material (mainly petticoats). For dyed poplin and rubia, the company has its manufacturing plant with an annual installed capacity of 720 LakhMeters located in Balotra, Rajasthan. The company sells its products under the registered trademarks of 333, C4u, Kajal, Kaveri, etc. CTPL's ratings: -- Long-Term Issuer Rating: assigned 'IND BB'/Stable -- INR210 mil. fund-based facilities: assigned 'IND BB'/Stable/'IND A4+' -- INR60.50 mil. term loan facilities: assigned 'IND BB'/Stable COMBINE DIAMONDS: CRISIL Suspends B+ Rating on INR240MM Loan ------------------------------------------------------------ CRISIL has suspended its rating on the bank facilities of Combine Diamonds Limited (CDL). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Packing Credit 150 CRISIL B+/Stable Post Shipment Credit 240 CRISIL B+/Stable Proposed Long Term Bank Loan Facility 110 CRISIL B+/Stable The suspension of rating is on account of non-cooperation by CDL with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, CDL is yet to provide adequate information to enable CRISIL to assess CDL's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key factor in its rating process as outlined in its criteria 'Information Availability - a key risk factor in credit ratings' CDL was incorporated in 1999, promoted by Mr. Dinesh Shantilal Desai. The company primarily trades in polished diamonds, but also undertakes cutting and polishing of diamonds. The trading segment accounts for around 80 per cent of its revenue. DEWSOFT FABRICATION: Ind-Ra Suspends B Long-Term Issuer Rating -------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated Dewsoft Fabrication Private Limited's (DFPL) Long-Term Issuer Rating of 'IND B' to the suspended category. The Outlook was Stable. The rating will now appear as 'IND B(suspended)' on the agency's website. The ratings have been migrated to the suspended category due to lack of adequate information. Ind-Ra will no longer provide ratings or analytical coverage for DFPL. 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. DFPL's ratings: -- Long-Term Issuer Rating: migrated to 'IND B(suspended)' from 'IND B'/Stable -- INR50 mil. fund-based limit: migrated to 'IND B(suspended)'/'IND A4(suspended)' from 'IND B/'IND A4' -- INR70m term loan: migrated to 'IND B(suspended)' from 'IND B' GVK BAGODARA: CRISIL Suspends 'D' Rating on INR8.91BB Term Loan --------------------------------------------------------------- CRISIL has suspended its rating on the bank facility of GVK Bagodara Vasad Expressway Private Limited (GVKBVEPL). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Term Loan 8917.7 CRISIL D The suspension of rating is on account of non-cooperation by GVKBVEPL with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, GVKBVEPL is yet to provide adequate information to enable CRISIL to assess GVKBVEPL's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key factor in its rating process as outlined in its criteria 'Information Availability - a key risk factor in credit ratings' GVKBVEPL, incorporated in February 2011, is a special purpose vehicle (SPV) and a subsidiary of GVKTPL. The SPV is involved in six-laning and strengthening of the existing three-lane section of the 101.9-kilometer Bagodara-Wataman-Tarapur-Vasad Road on State Highway-8 in Gujarat. The project has been awarded by Gujarat State Road Development Corporation Ltd (GSRDC) on a build, operate, and transfer basis for a concession period of 27 years (including 2.5 years of construction period) from November 2011. HARICONS ENGINEERS: CRISIL Assigns B+ Rating to INR18.5MM Loan -------------------------------------------------------------- CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to the bank facilities of Haricons Engineers and Contractors (HEC). The ratings reflect a small scale, and working capital-intensive nature, of operations, and low order book with significant client concentration. These rating weaknesses are partially offset by partners' extensive experience in the civil construction industry. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Proposed Short Term Bank Loan Facility 21.5 CRISIL A4 Proposed Long Term Bank Loan Facility 18.5 CRISIL B+/Stable Bank Guarantee 18.5 CRISIL A4 Overdraft Facility 1.5 CRISIL B+/Stable Outlook: Stable CRISIL believes HEC will continue to benefit over the medium term from the extensive industry experience of its partners. The outlook may be revised to 'Positive' in case of significant and sustainable increase in scale of operations while profitability is maintained, along with improved working capital management and diversification in customer base, leading to a better business risk profile. Conversely, lower-than-expected cash accrual, a stretched working capital, or any large debt-funded capital expenditure, leading to deterioration in the financial profile, particularly liquidity, may lead to a revision in outlook to 'Negative'. HEC, established in 2004 as a partnership firm in Hubli, Karnataka, mainly undertakes civil construction in the irrigation sector. The firm is managed by Mr. Kommi Chandrasekhar, who has been in the civil construction business for more than a decade. KAVITA EXIM: ICRA Suspends B Rating on INR12.50cr Bank Loan ----------------------------------------------------------- ICRA has suspended long term Rating of [ICRA]B assigned to the INR12.50 Crore bank lines of Kavita Exim Private Limited. The suspension follows ICRA's inability to carry out a rating surveillance in the absence of the requisite information from the company. KEPL was incorporated by Mr. Ashu Jain and his family members in October 2013 by merging the operations of two proprietorship entities Kavita Overseas and Sonia Enterprises. KEPL is engaged in trading of finished fabrics (mostly cotton based), with focus on dress material for women. The promoter family has experience of over two decades in trading of fabrics through proprietorships. KIZAN IRON: CRISIL Suspends B+ Rating on INR100MM Capital Loan -------------------------------------------------------------- CRISIL has suspended its rating on the bank facility of Kizan Iron Traders & Imports Private Limited (KITIPL). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Proposed Working Capital Facility 100 CRISIL B+/Stable The suspension of rating is on account of non-cooperation by KITIPL with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, KITIPL is yet to provide adequate information to enable CRISIL to assess KITIPL's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key factor in its rating process as outlined in its criteria 'Information Availability - a key risk factor in credit ratings' Incorporated in 2014, KITIPL trades in various steel products in Kannur (Kerala). The company is promoted by Mr. Abdul Gaffoor Puthalath. KIZAN ISPAT: CRISIL Suspends 'B' Rating on INR1.20BB LT Loan ------------------------------------------------------------ CRISIL has suspended its rating on the bank facility of Kizan Ispat Private Limited (KIPL). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Proposed Long Term Bank Loan Facility 1200 CRISIL B/Stable The suspension of rating is on account of non-cooperation by KIPL with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, KIPL is yet to provide adequate information to enable CRISIL to assess KIPL's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key factor in its rating process as outlined in its criteria 'Information Availability - a key risk factor in credit ratings' KIPL, incorporated in 2014, is setting up an integrated TMT manufacturing project in Bengaluru. The company is promoted by Mr Abdul Gaffoor and Mr. M Sirajudheen. M. A. AMEER: CRISIL Reaffirms 'B' Rating on INR35M Cash Loan ------------------------------------------------------------ CRISIL's ratings on the bank facilities of M. A. Ameer (AMA) continues to reflect its modest scale of operations in the fragmented civil construction segment and its large working capital requirements. These rating weaknesses are partially offset by the promoters' extensive experience in the civil construction segment. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 25 CRISIL A4 (Reaffirmed) Cash Credit 35 CRISIL B/Stable (Reaffirmed) Outlook: Stable CRISIL believes that AMA will continue to benefit over the medium term from its promoters' extensive industry experience. The outlook may be revised to 'Positive' if the company scales up its operations significantly while improving its profitability, leading to substantial cash accruals and a better financial risk profile. Conversely, the outlook may be revised to 'Negative' if AMA reports low revenue or profitability, or if its working capital management deteriorates resulting in weak liquidity, or if it undertakes a large debt-funded capital expenditure programme, leading to weakening of its financial risk profile. Set up as a proprietorship firm and based in Kasargod (Kerala), AMA undertakes civil contracts - primarily road construction projects - for various government entities in Kerala. The firm was founded and is managed by Mr. M A Ameer. MAHASHAKTI POLYCOAT: ICRA Assigns 'B' Rating to INR3.0cr Loan ------------------------------------------------------------- The long term rating of [ICRA]B has been assigned to INR2.86 crore term loan facility and INR3.00 crore cash credit facility of Mahashakti Polycoat. The ratings of [ICRA]B and [ICRA]A4 have also been assigned to the INR0.14 crore unallocated limits of MP. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Term Loan 2.86 [ICRA]B Assigned Cash Credit 3.00 [ICRA]B Assigned Unallocated Limits 0.14 [ICRA]B/[ICRA]A4 Assigned The assigned ratings are constrained by the modest scale of firm's operations as well as weak financial profile characterized by stretched capital structure and weak coverage indicators; predominantly owing to debt funded capex as well as low networth base. The ratings also take into account the vulnerability of the firm's profitability to adverse fluctuations in raw material (HDPE granules) prices; which are crude oil derivatives, limited entry barriers in tarpaulin and woven fabric industry leading to highly competitive market and the firm's low bargaining power with major suppliers (Indian Oil Corporation Limited and Haldia Petrochemicals Limited). Further, ICRA also notes the potential adverse impact on net worth and gearing levels in case of any substantial withdrawal from capital accounts given the constitution as a partnership firm. The ratings, however, take comfort from the long-standing experience of the promoters in the woven fabric industry and the stable demand outlook supported with anticipation growth in packaging industry led by Government of India's 'Make in India' initiative. The revenue of Mahashakti Polycoat is expected to witness moderate growth on account of stable demand outlook for woven bags/sacks and increased sales volumes with increased plant capacity utilization levels; although the profitability of the firm will remain exposed to any adverse fluctuations in crude oil linked prices of raw material (HDPE granules). Further, the capital structure is likely to improve with scheduled repayments of term loan. In ICRA's view, the ability of the firm to efficiently manage the impact of raw material price changes on its profitability and improve its capital structure by managing working capital requirements will remain the key rating sensitivities. Established in 2015, Mahashakti Polycoat (MP) is engaged in the business of HDPE & PP3 woven fabric (laminated and non-laminated) and tarpaulin in the range of 68 GSM (gram per square meter) to 250 GSM. The firm started commercial operations from April, 2015 at its manufacturing facility located in Mehsana, Gujarat having an installed capacity of processing 1800 MT of HDPE/PP laminated fabric per annum. The promoters of the firm have an experience of about 10 years in HDPE/PP woven fabric industry. Recent Results FY2016 being the first year of operations, MP reported an operating income of INR12.38 crore and profit after tax of INR0.31 crore (as per unaudited provisional financial). MAHESHWAR REFOILS: ICRA Reaffirms 'B+' Rating on INR4.75cr Loan --------------------------------------------------------------- ICRA has reaffirmed the [ICRA]B+ rating assigned to the INR8.75 crore long term fund based facilities of Maheshwar Refoils Private Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Cash Credit 4.00 [ICRA]B+ reaffirmed Term loan 4.75 [ICRA]B+ reaffirmed The reaffirmation of the rating factors in Maheshwar Refoils Private Limited's (MRPL) modest scale of operations, the company's limited track record, and its weak financial profile as reflected in its low profitability, adverse gearing and weak coverage indicators. The rating continues to be constrained by the vulnerability of profitability to movement in raw material prices, which are subject to seasonality, and crop harvest; and the regulatory risks with regard to the MSP fixed by GoI. The rating is further constrained by MRPL's low profitability due to limited value addition, commoditised nature of products, and highly competitive and fragmented industry structure owing to low entry barriers. The rating, however, continues to favourably factor in the experience of the promoters in the edible oil sector, spanning more than three decades, proximity to a large number of cotton ginning and processing units located at Kapadwanj, Gujarat and the favourable outlook for the edible oil sector. Incorporated in 2013, Maheshwar Refoils Private Limited (MRPL) trades in and refines cotton seed oil, soyabean oil, and refined palm oil. It commenced commercial operations from April 2015. The plant is located in Kapadwanj, Kheda, with a total installed capacity of refining 100 MT of oil per day. The company is promoted by the Mehta family who have more than three decades of experience of trading in edible oil. Recent Results For the year ended on March 31, 2016 (provisional numbers), the firm reported an operating income of INR71.95 crore and profit before tax of INR0.15 crore. MANPURIA AGRO: Ind-Ra Assigns BB Long-Term Issuer Rating -------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned Manpuria Agro Products Private Limited (MAPPL) a Long-Term Issuer Rating of 'IND BB'. The Outlook is Stable. KEY RATING DRIVERS The rating reflects MAPPL's weak operating profitability despite strong scale of operations, due to the trading nature of business. The company's provisional FY16 financials indicate revenue of INR2,109 mil. (FY15: INR1,592 mil.) and operating EBITDA margins of 0.60% (0.60%). The ratings, however, are supported by MAPPL's moderate credit metrics and comfortable liquidity position. Its interest coverage (operating EBITDA/gross interest expense)increased to 1.5x in FY16 (FY15: 1.0x) and net financial leverage (total adjusted net debt/operating EBITDAR) reduced to 3.6x (5.5x) due to an increase in EBITDA on account of the improvement in scale of operations. Also, the company's use of the working capital limits was 85.90% on average during the 12 months ended May 2016. The ratings are further supported by more than three decades of operating experience of MAPPL's founder in the sugar trading business. RATING SENSITIVITIES Positive: An improvement in the profitability leading to improvement in the overall credit metrics could be positive for the ratings. Negative: Deterioration in the profitability leading to deterioration in the credit metrics could be negative for the ratings. COMPANY PROFILE Mr Vishnu Kumar Manpuria started business of sugar trading in 1979. MAPPL is a part of Manpuria Group. MAPPL's ratings: -- Long-Term Issuer Rating: assigned 'IND BB'/Stable -- INR70 mil. fund-based limits: assigned 'IND BB'/Stable -- Proposed INR180 mil. fund-based limits: assigned 'Provisional IND BB'/Stable MANPURIA CONSORTIUM: Ind-Ra Assigns BB Long-Term Issuer Rating -------------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned Manpuria Consortium LLP (MCLLP) a Long-Term Issuer Rating of 'IND BB'. The Outlook is Stable. KEY RATING DRIVERS The ratings reflect MCLLP's moderate scale of operations and weak operating profitability. Provisional FY16 financials indicate revenue of INR1,541 mil. (FY15: INR1,090 mil.) and operating EBITDA margins of 0.70% (0.60%). The ratings, however, are supported by MCLLP's moderate credit metrics and comfortable liquidity position. Its interest coverage increased to 1.7x in FY16 (FY15: 1.4x) and net financial leverage reduced to 3.3x (7.6x) due to an increase in EBITDA on account of an improvement in the total scale of operations. The company's utilization of the working capital limits was 76.42% on average during the 12 months ended May 2016. The ratings are further supported by more than three decades of operating experience of MCLLP's founder in the sugar trading business. RATING SENSITIVITIES Positive: An improvement in the profitability leading to improvement in the overall credit metrics could be positive for the ratings. Negative: Deterioration in the profitability leading to deterioration in the credit metrics could be negative for the ratings. COMPANY PROFILE M/s Manpuria Enterprise, a proprietorship concern of Manpuria Group, was converted to MCLLP on June 29, 2015, and is engaged in the trading of wholesale sugar. Mr Arabinda Bose, who has been associated with Manpuria Group for more than two decades, is the partner of MCLLP. MCLLP's ratings: -- Long-Term Issuer Rating: assigned 'IND BB'/Stable -- INR50 mil. fund-based limits: assigned 'IND BB'/Stable -- Proposed INR200 mil. fund-based limits: assigned 'Provisional IND BB'/Stable MANPURIA REALATORS: Ind-Ra Assigns BB Long-Term Issuer Rating ------------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned Manpuria Realators Private Limited (MRPL) a Long-Term Issuer Rating of 'IND BB'. The Outlook is Stable. KEY RATING DRIVERS The ratings reflect MRPL's weak operating profitability despite strong scale of operations, due to the trading nature of business. The company's provisional FY16 financials indicate revenue of INR1,546 mil. (FY15: INR1,101 mil.) and operating EBITDA margins of 0.80% (0.50%). The ratings however are supported by MRPL's moderate credit metrics and comfortable liquidity position. Its interest coverage increased to 1.7x in FY16 (FY15: 0.90x) and net financial leverage reduced to 6.7x (12.1x) due to an increase in EBITDA on account of an improvement in in the total scale of operations. The company's use of the working capital limits was 76.67% on average during the 12 months ended May 2016. The ratings are also supported by more than three decades of operating experience of MRPL's founder in the sugar trading business. RATING SENSITIVITIES Positive: An improvement in the profitability leading to improvement in the overall credit metrics could be positive for the ratings. Negative: A deterioration in the profitability leading to deterioration in the credit metrics could be negative for the ratings. COMPANY PROFILE MRPL, a part of Manpuria Group, is into wholesale trading of sugar. On April 1, 2015, the company acquired M/s Ma Tara Store, a proprietorship concern and a wholesale trader of sugar. MRPL's ratings: -- Long-Term Issuer Rating: assigned 'IND BB'/Stable -- INR50 mil. fund-based limits: assigned 'IND BB'/Stable -- Proposed INR200 mil. fund-based limits: assigned 'Provisional IND BB'/Stable MARUTI NANDAN: CRISIL Reaffirms 'B' Rating on INR101MM Loan ----------------------------------------------------------- CRISIL's rating on the long-term bank facilities of Maruti Nandan Oils Private Limited (MOPL) continues to reflect its weak financial risk profile marked by high gearing and weak debt protection metrics, and a modest scale of operations in the highly fragmented oil industry. These rating weaknesses are partially offset by the extensive industry experience of the promoters. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 75 CRISIL B/Stable (Reaffirmed) Proposed Long Term Bank Loan Facility 24 CRISIL B/Stable (Reaffirmed) Warehouse Financing 101 CRISIL B/Stable (Reaffirmed) Outlook: Stable CRISIL believes MOPL will continue to benefit over the medium term from its promoters extensive industry experience. The outlook may be revised to 'Positive' if the scale of operations and profitability increase significantly leading to better-than- expected cash accrual and improvement in the financial risk profile. Conversely, the outlook may be revised to 'Negative' if the financial risk profile deteriorates, most likely because of an increase in working capital requirement and/or any debt-funded capital expenditure. Incorporated in 2008 and based in Mansa, Punjab, MOPL is promoted by Mr. Sunny Kumar and Mr. Parminder Kumar. The company extracts rice bran oil; it has an installed capacity of 400 million tonne per day. MEGHAAARIKA INTERNATIONAL: Ind-Ra Affirms IND BB- Issuer Rating --------------------------------------------------------------- India Ratings and Research (Ind-Ra) has affirmed Meghaaarika International Private Limited's (MIPL) Long-Term Issuer Rating at 'IND BB-'. The Outlook is Stable. KEY RATING DRIVERS The ratings remain constrained by MIPL's limited size of operations. Revenue fell 20% yoy to INR2.2 bil. due to a decline crude oil prices while volumes grew 3.1% yoy in FY16 according to the provisional statements. Revenue in FY15 grew 4% yoy to INR2,772 mil. driven by a 25% yoy volume increase because of the addition of new customers. The ratings continue to reflect MIL's weak credit metrics with net leverage remaining high at 5.8x in FY16 (FY15: 5.7x) and interest coverage deteriorating to 1.9x (2.6x). Although the total debt reduced to INR229 mil. at FYE16 (FYE15: INR318 mil.), EBITDA reduced to INR39 mil. (INR56 mil.) as gross margin/kg reduced to INR1.67 (INR2.2/kg). The ratings are also constrained by MIPL's thin and volatile EBIDTA margins (1.5%-2.0%), attributable to its trading nature of business, price volatility in the goods traded, and unhedged foreign exchange exposure. The company mitigates commodity price risk by conducting most of its sales against back-to-back orders. Also, it is continuously working towards reducing its inventory holding period to minimize price risk (FY16: 3 days, FY15: 10 days, FY14: 16 days). However, its net working capital cycle still remains long (FY16: 56 days, FY15: 57 days). The ratings are restricted due to MIPL's high customer concentration risk as its top five customers account for about 95% of its total sales (FY15: 96.3%, FY14: 98.6%). However, the company has an informal tie-up for 30% of its output with group companies. The ratings factor in MIPL's moderate liquidity position as reflected by 94% and 61% average peak utilization in the fund- based and non-fund-based working capital limits respectively, for the 12 months ended May 2016. The ratings are supported by the company's promoters' three- decade-long operating experience in the chemical industry. RATING SENSITIVITIES Negative: Any deterioration in the profitability and/or working capital cycle, leading to deterioration in the interest coverage could result in a negative rating action. Positive: Customer diversification along with an increase in the scale of operations and profitability and/or an improvement in working capital cycle leading to a sustained improvement in the interest coverage will be positive for the ratings. COMPANY PROFILE Incorporated in 2007, MIPL (formerly Ritzy International) is engaged in the trading of chemical and plasticisers. MIPL reported EBITDA of INR39 mil. and net income of INR14 mil. in FY16 (provisional). MIPL's ratings are: -- Long-Term Issuer Rating: affirmed at 'IND BB-'/Stable -- INR100 mil. fund-based working capital limits (sublimit of non-fund-based limit): affirmed at 'IND BB-'/Stable/ 'IND A4+' -- INR430 mil. non-fund-based working capital limits: affirmed at 'IND BB-'/Stable/'IND A4+' MEHTA INTERTRADE: CRISIL Suspends B+ Rating on INR384MM Loan ------------------------------------------------------------ CRISIL has suspended its ratings on the bank facilities of Mehta Intertrade Steels Private Limited (MISL; part of the Mehta group). The suspension of rating is on account of non-cooperation by MISL with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, MISL is yet to provide adequate information to enable CRISIL to assess MISL's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key factor in its rating process as outlined in its criteria 'Information Availability - a key risk factor in credit ratings' Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 60 CRISIL B+/Stable Letter of Credit 384 CRISIL A4 Long Term Loan 56 CRISIL B+/Stable For arriving at its ratings, CRISIL has combined the business and financial risk profiles of RBM and Mehta Intertrade Steels Pvt Ltd (MISL), together referred to as the Mehta group. This is because both these entities are managed by the same promoters, are in similar line of business, have strong operational linkages, and have fungible funds. RBM was established in 1984 as a proprietorship firm by Mr. Rajendra B Mehta in Mumbai. RBM primarily trades in steel products, which constitutes 90 per cent of total sales, which include cold-rolled and hot'rolled coils, and mild steel plates. The firm also trades in import licenses, which account for the remaining 10 per cent of sales. MISL was established in 2005 as a partnership firm by Mr. Rajendra Mehta, his brothers, Mr. Bhupendra Mehta and Mr. Hasmukhrai Mehta, and Mr. Bhupendra Mehta's son, Mr. Harsh Mehta, and Mr. Hasmukhrai Mehta's sons, Mr. Nilesh Mehta and Mr. Amit Mehta. . The firm was reconstituted as a private limited company in 2007. It manufactures electric resistance welded (ERW) pipes and precision tubes and also trades in hot rolled coils. The company's manufacturing sales are expected to increase over the medium term. MONTAGE HEALTH: CRISIL Suspends B+ Rating on INR121.4MM Loan ------------------------------------------------------------ CRISIL has suspended its rating on the bank facilities of Montage Health Care & Biochem Private Limited (MHCBPL). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 11.9 CRISIL B+/Stable Term Loan 121.4 CRISIL B+/Stable The suspension of rating is on account of non-cooperation by MHCBPL with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, MHCBPL is yet to provide adequate information to enable CRISIL to assess MHCBPL's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key factor in its rating process as outlined in its criteria 'Information Availability - a key risk factor in credit ratings' MHCBPL, incorporated in September 2011, is setting up a unit for manufacturing of bio-degradable plastic granules from mango kernels in Sameerpet, Telangana with capacity of 1000MTPA. The company is promoted by Mr. Rajesh Shukla, Ms. Shweta Shukla, Mrs. Anupama Shukla and Mr. Govind Swarup. PANALE INFRASTRUCTURES: CRISIL Reaffirms B- Rating on INR26M Loan ----------------------------------------------------------------- CRISIL's ratings on the bank facilities of Panale Infrastructures Private Limited (PIPL) continue to reflect weak financial risk profile, especially liquidity, on account of large working capital requirement, aggressive gearing, and modest net worth. The ratings also factor in modest scale of operations in the intensely competitive civil construction industry, and geographic concentration in revenue. These weaknesses are partially offset by extensive industry experience of the promoters, and moderate debt protection measures because of moderate profitability. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 30 CRISIL A4 (Reaffirmed) Cash Credit 26 CRISIL B-/Stable (Reaffirmed) For arriving at the ratings, CRISIL has treated unsecured loans extended to PIPL by the promoters, estimated at INR22.6 million as on March 31, 2016, as neither debt nor equity, as these will be retained in business over the medium term. Outlook: Stable CRISIL believes PIPL will continue to benefit over the medium term from the extensive experience of its promoters. The outlook may be revised to 'Positive' if significant increase in revenue and stable profitability lead to large cash accrual, or if improved working capital management strengthens financial risk profile and liquidity. Conversely, the outlook may be revised to 'Negative' if stretch in working capital cycle, or low accrual because of decline in revenue or profitability, weakens the financial metrics. PIPL was incorporated in 2009 by Mr. Pundik Vitthalrao Panale. It undertakes construction of roads, bridges and buildings for government and private players in Maharashtra. PIPL is registered with the Public Works Department, Maharashtra, and the Maharashtra Irrigation Department. PIONEER NF: CRISIL Reaffirms 'B' Rating on INR50MM Cash Loan ------------------------------------------------------------ CRISIL's ratings on bank facilities of Pioneer NF Forgings India Pvt Ltd (PNFL) continue to reflect the small scale of operations and susceptibility to volatile raw material prices. These weaknesses are partially offset by the moderate financial risk profile, marked by modest gearing and debt-protection metrics, and extensive industry experience of promoters. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 5 CRISIL A4 (Reaffirmed) Cash Credit 50 CRISIL B/Stable (Reaffirmed) Proposed Long Term Bank Loan Facility 19.5 CRISIL B/Stable (Reaffirmed) Term Loan 10 CRISIL B/Stable (Reaffirmed) Outlook: Stable CRISIL believes PNFL will continue to benefit from the extensive industry experience of its promoters. The outlook may be revised to 'Positive' if increase in scale of operations and profitability leads to healthy cash accrual and strengthens the financial risk profile. The outlook may be revised to 'Negative' if a large debt-funded capital expenditure (capex), or decline in revenue or operating profit margin, weakens the financial metrics. Update For 2015-16 (refers to financial year, April 1 to March 31), both revenue and operating margin, estimated at INR160 million and 10 percent, respectively, are broadly in line with CRISIL's expectations. However, revenue is stagnant when compared with INR162 million reported in 2014-15, due to the overall market scenario and weak demand in the automotive components segment. CRISIL expects the business risk profile to sustain over the medium term, with moderate growth in turnover and a stable operating margin, supported by repeat orders from customers. The financial risk profile remains moderate, due to modest debt- protection metrics and gearing. Debt is in line with expectation. The networth is estimated at INR42.7 million as on March 31, 2016, due to constrained accretion to reserves. Gearing is moderate, estimated at 1.50 times as of March 2016 and would remain at similar levels over the medium term, due to dependence on external working capital debt and in the absence of any significant debt funded capex plans. Liquidity is stretched due to the small accruals, highly utilised bank limit and coupled with low cash and bank balance. Bank limit utilisation averaged 92.6 percent for the 12 months ended February 2016. Expected accrual of INR8.4-9.7 million over the medium term, would be adequate against repayment obligation of INR4.7 million. Set up in 2006, PNFL manufactures forgings for the automotive and automotive ancillaries industries, and for the electro-mechanical equipment sector. The director, Mr. Niranjan Sankar manages the daily operations. PNP ENGINEERING: CRISIL Ups Rating on INR110MM LT Loan to B- ------------------------------------------------------------ CRISIL has upgraded its rating on the long-term bank facilities of PNP Engineering Works Private Limited (PNP) to 'CRISIL B+/Stable' from 'CRISIL B-/Stable', and has reaffirmed its rating on the company's short-term bank facility at 'CRISIL A4'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 50 CRISIL A4 (Reaffirmed) Cash Credit 40 CRISIL B+/Stable (Upgraded from 'CRISIL B-/Stable') Proposed Long Term 110 CRISIL B-/Stable (Upgraded Bank Loan Facility from 'CRISIL B-/Stable') The rating upgrade reflects improvement in PNP's business risk profile marked by improvement in its revenue level and profitability margin in 2015-16. Revenue level of the company grew by a CAGR of 76% from 2013-14 to 2015-16 and y-o-y growth of around 20% in 2015-16 to INR305.7 million compared to INR259.1 million in 2014-15. The same was also better than CRISIL's expectation of INR200 million in 2015-16 and INR220 million in 2014-15. This was mainly due to healthy execution of orders from its reputed clientele. Liquidity has also improved, with cash accrual increasing to INR11.7 million from INR8.5 million over this period. CRISIL believes that improvement in the business risk profile is likely to be sustained over the medium term, supported by a healthy current order book of INR300 million, which is to be executed over the next 10-12 months. The rating continues to reflect PNP's improved working capital management and extensive experience of PNP's promoters in the engineering and construction services business. These rating strengths are partially offset by PNP's small scale of operations and its average financial risk profile marked by modest net worth. Outlook: Stable CRISIL believes PNP will continue to manage its working capital efficiently over the medium term. Nevertheless, liquidity will remain a key sensitivity factor over the medium term, given the tender-driven nature of business. The outlook may be revised to 'Positive' if there is substantial improvement in PNP's cash accruals. Conversely, the outlook may be revised to 'Negative' if the company delays in servicing of its debt on time or if its financial risk profile deteriorates on the back of decline in expected cash accruals or any major debt-funded capital expenditure programme undertaken by the company over the medium term. PNP was set up by Mr. Subhas Chandra Panja in Haldia (West Bengal) in 1998. The company provides engineering and construction services such as installation of storage tanks, industrial piping, and structures for oil refineries, petrochemical companies, and the steel industry. PRABHAT POULTRY: CRISIL Suspends 'D' Rating on INR100MM Term Loan ----------------------------------------------------------------- CRISIL has suspended its rating on the bank facilities of Prabhat Poultry Private Limited (PPPL). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 50 CRISIL D Rupee Term Loan 100 CRISIL D The suspension of rating is on account of non-cooperation by PPPL with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, PPPL is yet to provide adequate information to enable CRISIL to assess PPPL's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key factor in its rating process as outlined in its criteria 'Information Availability - a key risk factor in credit ratings' PPPL was established as a proprietorship firm in 1963, and was reconstituted as a partnership firm in 1980 and again as a private limited company (with its current name) in 2004. The company is based in Mumbai. PPPL's manufacturing unit is in Alibaug (Maharashtra). It is currently managed by Mr. Pramod Mhatre and his family. PPPL manufactures table eggs and poultry feed, and also processes broiler chicken meat. All the products manufactured by PPPL are sold under the Prabhat brand within Maharashtra. PUNEET LABORATORIES: Ind-Ra Assigns B+ Long-Term Issuer Rating -------------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned Puneet Laboratories Private Limited (PLPL) a Long-Term Issuer Rating of 'IND B+'. The Outlook is Stable. KEY RATING DRIVERS The ratings reflect PLPL's small scale of operations and moderate credit metrics. Provisional (P) FY16 financials indicate revenue of INR241 mil. (FY15: INR213 mil.), net leverage (total Ind-Ra adjusted debt net of cash/EBITDA) of 6.8x (8x) and interest coverage (operating EBITDA/gross interest expense) of 1.2x (1.6x). Its EBITDA margin was 6.3% in FY16 (P) (FY15: 6.9%). The ratings also factor in the company's tight liquidity position, with 98.5% average use of its fund-based facilities during the 12 months ended April 2016. The ratings derive support from PLPL's promoter's experience of more than a decade in the pharmaceutical industry. RATING SENSITIVITIES Positive: Substantial top-line growth and an improvement in profitability, leading to a sustained improvement in credit metrics, will lead to a positive rating action. Negative: A substantial decline in profitability, resulting in a sustained deterioration in the company's credit profile, will lead to a negative rating action. COMPANY PROFILE PLPL was incorporated in Mumbai in 1986 by Mr. Lalit Raizada. The company provides pharmaceutical solutions from the concept stage to the final product to pharmaceutical manufacturers such as Zydus Cadila Healthcare Private Limited, Sanofi Aventis and Micro Labs Limited. The company started with trading and contract manufacturing of pharmaceutical active pharmaceutical ingredients and intermediates and later diversified into the finished formulations business in the Indian and overseas markets Ms Sunila Raizada, Ms. Priyanka Raizada and Mr. Puneet Raizada, the family members of Mr. Lalit Raizada manage PLPL's operations. In FY16 (P), 75% of the company's revenue came from the trade of pharmaceutical intermediates. PLPL's ratings: -- Long-Term Issuer Rating: assigned 'IND B+'; Outlook Stable -- INR60.96 mil. long-term loans: assigned 'IND B+'/Stable -- INR50 mil. fund-based facilities: assigned 'IND B+'/Stable/'IND A4' R. B. MEHTA: CRISIL Suspends B+ Rating on INR58MM Loan ------------------------------------------------------ CRISIL has suspended its ratings on the bank facilities of R. B. Mehta and Company (RBM; part of the Mehta group). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Letter of Credit 150 CRISIL A4 Proposed Long Term Bank Loan Facility 42 CRISIL B+/Stable Secured Overdraft Facility 58 CRISIL B+/Stable The suspension of ratings is on account of non-cooperation by RBM with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, RBM is yet to provide adequate information to enable CRISIL to assess RBM's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key factor in its rating process as outlined in its criteria 'Information Availability - a key risk factor in credit ratings' For arriving at its ratings, CRISIL has combined the business and financial risk profiles of RBM and Mehta Intertrade Steels Pvt Ltd (MISL), together referred to as the Mehta group. This is because both these entities are managed by the same promoters, are in similar line of business, have strong operational linkages, and have fungible funds. RBM was established in 1984 as a proprietorship firm by Mr. Rajendra B Mehta in Mumbai. RBM primarily trades in steel products, which constitutes 90 per cent of total sales, which include cold-rolled and hot'rolled coils, and mild steel plates. The firm also trades in import licenses, which account for the remaining 10 per cent of sales. MISL was established in 2005 as a partnership firm by Mr. Rajendra Mehta, his brothers, Mr. Bhupendra Mehta and Mr. Hasmukhrai Mehta, and Mr. Bhupendra Mehta's son, Mr. Harsh Mehta, and Mr. Hasmukhrai Mehta's sons, Mr. Nilesh Mehta and Mr. Amit Mehta. . The firm was reconstituted as a private limited company in 2007. It manufactures electric resistance welded (ERW) pipes and precision tubes and also trades in hot rolled coils. The company's manufacturing sales are expected to increase over the medium term. R. P. MOTORS: ICRA Reaffirms 'B' Rating on INR2.80cr Loan --------------------------------------------------------- ICRA has reaffirmed the long-term rating of [ICRA]B assigned to the INR1.86 crore term loan, INR3.80 cash credit facilities and INR0.30 crore untied limits of R. P. Motors (RPM). Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based Limit Term Loan 1.86 [ICRA]B reaffirmed Fund Based Limit Cash Credit e-DFS 2.80 [ICRA]B reaffirmed Fund Based Limit Cash Credit regular 1.00 [ICRA]B reaffirmed/assigned Untied limits 0.30 [ICRA]B reaffirmed The reaffirmation of the rating takes into account the relatively small size and the short period of RPM's operations, inherently low margins of the entity, on account of industry dynamics, and commission structure decided by the principal, and its weak financial risk profile characterised by a leveraged capital structure and depressed level of coverage indicators; though the same have shown some improvement in FY2016. The rating continues to remain constrained by the high working capital requirements in the automobile dealership business and vulnerability of the sales to the cyclicality of the passenger vehicle industry. The rating further incorporates the risks associated with the entity's status as a proprietorship concern, including the risk of capital withdrawal by the proprietor. The rating, however, derives comfort from the current status of RPM as the sole authorised dealer of Ford vehicles in Meghalaya, which provides business comfort to an extent, though risk associated with competition from other original equipment manufacturer (OEM) dealerships remains. ICRA notes that the top- line as well as profitability of the entity has witnessed an improvement in FY2016 over the previous fiscal due to the stability of its operations. In ICRA's opinion, the ability of the entity to improve its capital structure and profitability while managing its working capital requirement efficiently would remain key rating sensitivities, going forward. Established in December 2013 as a proprietorship concern, R. P. Motors (RPM) is an automobile dealer and has a showroom-cum- service workshop with 3S facilities (Sales-Services-Spares) in Shillong, Meghalaya. The entity is at present the sole authorised dealer of Ford India Private Limited (FIPL) in Meghalaya, and also sells and services vehicles. The entity also sells spare parts and accessories and trades in second hand cars of any make. RPM is managed by the proprietor, Mr. Renikton Lyngdoh. Recent Results The entity has reported a net profit of INR0.52 crore on an Operating Income of INR16.67 crore during FY2016 (provisional). It reported a net profit of INR0.09 crore on an operating income of INR13.73 crore in FY2015. RANKAS TEXFAB: Ind-Ra Assigns BB+ Long-Term Issuer Rating --------------------------------------------------------- India Ratings has assigned Rankas Texfab Private Limited (RTPL) a Long-Term Issuer Rating of 'IND BB+'. The Outlook is Stable. KEY RATING DRIVERS The ratings reflect RTPL's moderate scale of operations and weak credit metrics. The company's provisional FY16 financials indicate revenue of INR813 (FY15: INR804 mil.) with an order book worth INR80 mil. to be executed over the next two months. Its net leverage (net adjusted debt/operating EBITDAR) was 3.9x in FY16 (FY15: 4.6x) and interest coverage was 2.4x (2.0x). RTPL's EBITDA margin was in the range of 5.6% to 7.9% over FY11- FY15 due to the fluctuations in the raw materials price. It, however, improved during FY16 to 8.3%. The management expects the EBITDA margin to remain at FY16 level over the medium term on account of the growth in the company's topline due to increased order flow. The ratings further reflect RTPL's moderate liquidity profile with its fund based facilities being utilized at an average of 93% over the 12 month ended May 2016. The ratings, however, are supported by over two decades of operating experience of the company's promoter in the textile manufacturing business. RATING SENSITIVITIES Positive: A substantial growth in the company's topline along with the improvement in the profitability leading to a sustained improvement in the overall credit metrics could lead to a positive rating action. Negative: A significant decline in the profitability resulting in a sustained deterioration in the overall credit metrics of the company could lead to a negative rating action COMPANY PROFILE RTPL, incorporated in 1994 as a private limited company by Mr. Chetankumar Motilal Ranka, is into textile processing, dyeing, printing, and stitching. The company mainly processes polyester fabrics and manufactures dress materials, African wax prints, curtains, scarves, table linen and bed linen at its plant in Ahmedabad (Gujrat) which runs two shifts every day with 80% capacity utilization. RTPL's ratings: -- Long term Issuer Rating: assigned 'IND BB+'/Stable -- INR45.09 mil. long-term loans: assigned 'IND BB+'/Stable -- INR205 mil. fund-based facilities: assigned 'IND BB+'/Stable/'IND A4+' -- INR2 mil. non-fund-based facilities: assigned 'IND A4+' RATNA COT: CRISIL Reaffirms B+ Rating on INR40MM Cash Loan ---------------------------------------------------------- CRISIL's rating on the long-term bank facilities of Ratna Cot Fibers (RCF) continues to reflect its small scale of operations in the intensely competitive cotton ginning industry, average financial risk profile, and susceptibility to adverse regulatory changes. These weaknesses are partially offset by the extensive experience of the partners in the cotton ginning industry. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 40 CRISIL B+/Stable (Reaffirmed) Long Term Loan 18 CRISIL B+/Stable (Reaffirmed) Outlook: Stable CRISIL believes RCF will continue to benefit over the medium term from the extensive experience of the partners. The outlook may be revised to 'Positive' if significant improvement in revenue and stable profitability strengthen cash accrual and financial risk profile. Conversely, the outlook may be revised to 'Negative' if financial risk profile weakens because of low cash accrual, or large working capital requirement or capital expenditure. RCF was set up as a partnership firm in June 2014 by Mr. Om Prakash Agarwal, Mr. Shivam Shyam Sunder Agarwal, and Mr. Ajay Agarwal. It gins and presses raw cotton. Its unit at Sendhwa, Madhya Pradesh, has capacity of 200 bales per day and commenced operations from February 2015. RIVU ENTERPRISES: Ind-Ra Lowers Long-Term Issuer Rating to D ------------------------------------------------------------ India Ratings & Research (Ind-Ra) has downgraded Rivu Enterprises Pvt Ltd's (REPL) Long-Term Issuer Rating to 'IND D' from 'IND BB-'. The Outlook was Stable. KEY RATING DRIVERS The ratings reflect REPL's tight liquidity, leading to delays in debt servicing by the company for the 12 months ended May 2016. RATING SENSITIVITIES Timely servicing of debt for three consecutive months could result in a positive rating action. COMPANY PROFILE Incorporated in 2010, REPL is engaged in the processing of chicken in Kolkata, West Bengal. REPL's ratings: -- Long-Term Issuer Rating: downgraded to 'IND D' from 'IND BB-'/Stable -- INR27.4 mil. term loan: downgraded to 'IND D' from 'IND BB-'/Stable -- INR25 mil. fund-based working capital limits: downgraded to 'IND D' from 'IND BB-'/Stable -- INR35 mil. proposed fund-based working capital limits: 'Provisional IND BB-'/Stable; rating withdrawn as the company did not proceed with the instrument as envisaged ROLTA PRIVATE: Ind-Ra Lowers to 'BB' then Withdraws Rating ---------------------------------------------------------- India Ratings and Research (Ind-Ra) has downgraded Rolta Private Limited's (RPL) Long-Term Issuer Rating and the rating on its INR2,240 mil. long-term loan (future lease rental) to 'IND BB' from 'IND BBB'. The Outlook is Stable. The agency has simultaneously withdrawn the ratings. KEY RATING DRIVERS The downgrade reflects the deterioration in the credit profile of one of RPL's major tenants (Rolta India Ltd, 'IND D'). The rating action also reflects RPL's vacancy levels at 1,05,000sqft of the entire 420,000sqft being higher than Ind-Ra's expectations. Moreover, the company's cash flows for FY17 are likely to be lower than the agency's expectations as Rolta India has not declared a dividend for FY16. RPL has not shared its recent financials with Ind-Ra. The bank loan rating has been withdrawn following the receipt of a no objection certificates from the company's banker. Consequently, Ind-Ra has withdrawn the Long-Term Issuer Rating. COMPANY PROFILE RPL is a strategic investor (37.7% holding on March 31, 2016,) in Rolta India from where it avails dividend income and royalty income (equivalent to 0.2% of Rolta India's revenue). It has a commercial property in Udyog Vihar, Gurgaon through which it derives rental income. RUPNARAYAN VANJIYA: Ind-Ra Assigns BB Long-Term Issuer Rating ------------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned Rupnarayan Vanjiya Private Limited (RVPL) a Long-Term Issuer Rating of 'IND BB'. The Outlook is Stable. KEY RATING DRIVERS The rating reflects RVPL's moderate scale of trading operations and weak operating profitability. Provisional FY16 financials indicate revenue of INR811 mil. (FY15: INR720 mil.) and operating EBITDA margins of 0.50% (0.30%). The ratings, however, are supported by RVPL's strong credit metrics and comfortable liquidity position. Interest coverage increased to 2.5x in FY16 (FY15: 1.3x) and net financial leverage reduced to negative 3.1x (10.4x) due to a decline in the total debt. The company's use of the working capital limits was 82.42% on average during the 12 months ended May 2016. The ratings are also supported by RVPL's founder's experience of more than three decades in sugar trading. RATING SENSITIVITIES Positive: An improvement in scale of operations leading to an improvement in the overall credit profile will be positive for the ratings. Negative: Deterioration in the profitability leading to deterioration in the credit metrics will be negative for the ratings. COMPANY PROFILE RVPL is a part of Manpuria Group. The company acquired M/s Mahabir Store effective from April 1, 2015, a partnership firm and a wholesale trader in sugar. Prior to April 2015, RVPL had no commercial activity. NVPL's ratings: -- Long-Term Issuer Rating: assigned 'IND BB'/Stable -- INR10 mil. fund-based limits: assigned 'IND BB'/Stable -- Proposed INR240 mil. fund-based limits: assigned Provisional 'ND BB'/Stable RVS EDUCATIONAL: Ind-Ra Suspends BB+ Rating on INR1,562MM Loan -------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated Rathnavel Subramaniam (RVS) Educational Trust's INR1,562 mil. bank loan and INR70 mil. fund-based-working capital loans to 'IND BB+(suspended)' from 'IND BB+'. The Outlook was Stable. The rating has been migrated to the suspended category due to lack of adequate information. Ind-Ra will no longer provide ratings or analytical coverage for RVS's bank facilities. The rating 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 rating could be reinstated and will be communicated through a rating action commentary. S2 REALTY: ICRA Withdraws D Rating on INR7.0cr Term Loan -------------------------------------------------------- ICRA has withdrawn the [ICRA]D rating assigned to the INR7.00 crore long term bank facilities of S2 Realty, at the request of the company, as there is no debt outstanding against the rated instruments. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term, Fund based limits Term Loan 7.00 [ICRA]D withdrawn Established in 2009, S2R is developing affordable residential real estate projects under two schemes known as Anandgram and Urbangram in Pune. Under Anandgram sceme the firm has already developed two projects viz. Anandgram Yewat and Anandgram Talegaon Dhamdhare. Under Urbangram scheme it has already developed two projects under viz. Urbangram Kondhave Dhawade and Urbangram Kirkitwadi. Currently there are two projects under development firm is developing the following projects in Pune. SAFIRE OFFSET: CRISIL Reaffirms 'D' Rating on INR80MM Cash Loan --------------------------------------------------------------- CRISIL's ratings on the bank facilities of The Safire Offset Printers (SOP; part of the Safire group) continue to reflect instances of delay by the Safire group in servicing its debt. The delays have been caused by the group's weak liquidity, driven by large working capital requirements, particularly because of stretched receivables. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 5 CRISIL D (Reaffirmed) Cash Credit 80 CRISIL D (Reaffirmed) Letter of Credit 10 CRISIL D (Reaffirmed) Long Term Loan 64.5 CRISIL D (Reaffirmed) Proposed Working Capital Facility 20 CRISIL D (Reaffirmed) The Safire group has large working capital requirements and is also exposed to risks related to the highly fragmented and intensely competitive printing industry. However, the group benefits from its established market position in the printing and publications industry. For arriving at its ratings, CRISIL has combined the business and financial risk profiles of The Safire Industries (SI) and The Safire Offset Printers (SOP). This is because the two entities, together referred to as the Safire group, are in the same line of business, and have a common management and fungible cash flows. Set up in 1989 by Mr. Ayyanathan, SOP is part of the Safire group, which prints film posters, brochures, calendars, text books, and school magazines. Both SI and SOP are based in Sivakasi (Tamil Nadu). SAMET PLAST: ICRA Assigns 'B+' Rating to INR5.0cr Cash Loan ----------------------------------------------------------- The long term rating of [ICRA]B+ has been assigned to the INR6.00 crore1 (enhanced from INR5.20 crore) long term fund based facilities of Samet Plast. Further, the short-term rating of [ICRA]A4 has been assigned to the INR2.00 crore (enhanced from INR1.30 crore) short-term non-fund based facility of SP. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Term Loan 1.00 [ICRA]B+ assigned/outstanding Cash Credit 5.00 [ICRA]B+ assigned/outstanding Letter of Credit 2.00 [ICRA]A4 assigned/outstanding The assigned ratings take into account the steady revenue growth of 41% reported in FY 2016 supported by increase in volume sales following capacity addition, improvement in profitability margins which has led to improvement in capital structure as well as debt coverage indicators. The ratings also draw comfort from the long- standing experience of the promoters in the master batch industry. The ratings, however, continue to remain constrained by the moderate scale as well as highly working capital intensive nature of operations, which leads to pressure on the liquidity position of the company, as reflected by high utilization of bank limits. The ratings also take into account the vulnerability of the firm's profitability to fluctuations in raw material prices on account of low bargaining power with customers and the highly competitive master batch industry characterized by a number of organized and unorganized players due to low entry barriers. ICRA also notes that as SP is a partnership firm, any significant withdrawals from the capital account by the partners would adversely affect its net worth and thereby its capital structure. Incorporated in 2010, Samet Plast (SP) is a partnership firm engaged in the manufacturing of master batches. The products are sold under the brand name "Samtone" and are ISO: 9001-2000 certified. The firm has a manufacturing facility with an installed capacity of 2500 Metric Tonnes per Annum (MTPA) located at Waghodia near Vadodara in Gujarat. Earlier, the firm was promoted by three partners namely Mr. Shwetang Patel, Mr. Ram Chandra Patel and Mrs. Bhavita Shah; however Mr. Ram Chandra Patel separated from the organisation in FY 2016. Recent Results As per the provisional financial, the firm reported an operating income of INR28.12 crore and profit after tax of INR1.16 crore in FY 2016 as against an operating income of INR19.88 crore and profit after tax of INR0.66 crore in FY 2015. SARWATI HOME: CRISIL Assigns 'B+' Rating to INR47MM Cash Loan ------------------------------------------------------------- CRISIL has revoked the suspension of its ratings on the bank facilities of Sarwati Home Furnishings (SHF) and has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to the facilities. CRISIL had suspended the ratings on April 27, 2016, as SHF had not provided the necessary information required to maintain valid ratings. The firm has now shared the requisite information, enabling CRISIL to assign ratings to its bank facilities. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 6 CRISIL A4 (Assigned; Suspension Revoked) Cash Credit 47 CRISIL B+/Stable (Assigned; Suspension Revoked) Term Loan 35.1 CRISIL B+/Stable (Assigned; Suspension Revoked) The ratings reflect the firm's modest scale of operations and large working capital requirement in the intensely competitive home furnishings industry, and weak financial risk profile because of subdued debt protection metrics. These weaknesses are partially offset by extensive industry experience of its partners. Outlook: Stable CRISIL believes SHF will continue to benefit from the extensive experience of its partners in the textile industry. The outlook may be revised to 'Positive' if there is substantial growth in revenue and operating margin, leading to significant increase in networth, and consequently, improvement in financial risk profile. The outlook may be revised to 'Negative' if the financial risk profile and liquidity deteriorate due to sizeable debt-funded capital expenditure or stretch in working capital cycle. SHF is a partnership firm set up by Mr. Jughminder Das Jain, Mr. Sachin Jain, Ms. Neelam Jain and Ms. Punita Jain in May 2014. It manufactures polyester knitted fabric/polar fabric in Panipat, Haryana. SAYONA CERAMIC: CRISIL Suspends 'B' Rating on INR39.3MM Loan ------------------------------------------------------------ CRISIL has suspended its ratings on the bank facilities of Sayona Ceramic (Sayona). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 1.6 CRISIL A4 Cash Credit 30.0 CRISIL B/Stable Term Loan 39.3 CRISIL B/Stable The suspension of ratings is on account of non-cooperation by Sayona with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, Sayona is yet to provide adequate information to enable CRISIL to assess Sayona's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key factor in its rating process as outlined in its criteria 'Information Availability - a key risk factor in credit ratings' Sayona, established in December 2010 and based in Morbi, has set up a facility to manufacture ceramic-glazed wall tiles. The project commenced commercial production in October 2011. SHIV COTGIN: ICRA Lowers Rating on INR34cr Cash Loan to 'D' ----------------------------------------------------------- ICRA has downgraded the long term rating from [ICRA]B+ to [ICRA]D for the INR34.00 crore cash credit facility and the INR0.61 crore term loan facility of Shiv Cotgin Private Limited. ICRA has also downgraded the short term rating from [ICRA]A4 to [ICRA]D to INR5.00 crore fund based FBP facility (sublimit with cash credit) of SCPL. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based Limit- Cash Credit 34.00 Downgraded to [ICRA]D from [ICRA]B+ Fund Based Limit- Term Loan 0.61 Downgraded to [ICRA]D from [ICRA]B+ Fund Based-FBP (5.00) Downgraded to [ICRA]D from [ICRA]A4 The rating revision reflects the recent delays in interest as well as debt servicing reflecting the stress on its liquidity position. The rating is further constrained by the low operating margin on account of limited value addition and highly competitive and fragmented industry structure due to low entry barriers. The ratings are further constrained by vulnerability of profitability to raw material prices, which are subject to seasonality and crop harvest and regulatory risks with regard to minimum support price (MSP) of raw cotton and export of cotton bales. The ratings, however, continue to favorably consider the extensive experience of the promoters in the cotton industry as well as strategic location of the plant in the cotton producing belt of India giving it easy access to raw cotton. Shiv Cotton Industries (SCI) was established as partnership firm on 9th July, 2009 by Mr. Bharat Selani along with other family members and relatives. The firm commenced its operations in February 2010, ans was engaged in cotton ginning and pressing to produce cotton bales and cotton seeds. However, later in December 2013 the firm was converted into private limited company in the name of Shiv Cotgin Private Limited (SCPL). The company has its production facility located at Gondal (Dist: Rajkot), Gujarat. The plant is equipped with 24 ginning machines having capacity to produce 240 bales and 77 MT cotton seeds per day. SRI GAYATRI: ICRA Suspends 'D' Rating on INR12cr Loan ----------------------------------------------------- ICRA has suspended the long term rating of [ICRA]D assigned to the INR12 crore working capital facility and the short term rating of [ICRA]D assigned to the INR22.5 crore non fund based bank facility of Sri Gayatri Minerals Pvt. Ltd. The suspension follows ICRA's inability to carry out a rating surveillance in the absence of the requisite information from the company. VERONICA MARINE: CRISIL Reaffirms B Rating on INR16.8MM LT Loan --------------------------------------------------------------- CRISIL's ratings on the bank facilities of Veronica Marine Exports Private Limited (VMEPL; a part of the CEC group) continues to reflect the CEC group's below-average financial risk profile, marked by high gearing and weak debt protection metrics, and its working-capital-intensive operations. The ratings also factor in the group's exposure to risks inherent in the seafood exports industry. These rating weaknesses are partially offset by its established brand in this industry. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 5 CRISIL A4 (Reaffirmed) Bill Purchase- Discounting Facility 50.1 CRISIL A4 (Reaffirmed) Foreign Bill Negotiation 120.0 CRISIL A4 (Reaffirmed) Packing Credit 150.0 CRISIL A4 (Reaffirmed) Long Term Loan 16.8 CRISIL B/Stable (Reaffirmed) For arriving at the ratings, CRISIL has combined the business and financial risk profiles VMEPL and Capithan Exporting Company (CEC). This is because both entities, together referred to as the CEC group, are in the same line of business and have common promoters and fungible funds. Outlook: Stable CRISIL believes that the CEC group will continue to benefit over the medium term from its healthy relationships with suppliers and customers. The outlook may be revised to 'Positive' if the group further improves its working capital management while achieving a substantial increase in its cash accruals, resulting in improved financial risk profile. Conversely, the outlook may be revised to 'Negative' in case of pressure on the group's liquidity, driven most likely by large working capital requirements, debt-funded capital expenditure, or low cash accruals. Set up in 1974 and promoted by Mr. Alphonse Joseph, the CEC group processes and exports cuttlefish, peeled un-deveined shrimp, fin fish, shell fish, and cooked/blanched fish. VISHAL COATERS: Ind-Ra Suspends IND BB Long-Term Issuer Rating ---------------------------------------=---------------------- India Ratings and Research (Ind-Ra) has migrated Vishal Coaters Limited's (VCL) Long-Term Issuer Rating of 'IND BB' to the suspended category. The Outlook was Stable. The rating will now appear as 'IND BB(suspended)' on the agency's website. The ratings have been migrated to the suspended category due to lack of adequate information. Ind-Ra will no longer provide ratings or analytical coverage for VCL. 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. VCL's ratings: -- Long-Term Issuer Rating: migrated to 'IND BB(suspended)' from 'IND BB'/Stable -- INR25 mil. fund-based limit: migrated to 'IND BB(suspended)'/'IND A4+(suspended)' from 'IND BB'/ 'IND A4+' -- INR2.63 mil. term loan: migrated to 'IND BB(suspended)' from 'IND BB' VRV FOODS: Ind-Ra Affirms D Long-Term Issuer Rating --------------------------------------------------- India Ratings and Research (Ind-Ra) has affirmed VRV Foods Limited's (VRV) Long-Term Issuer Rating at 'IND D'. KEY RATING DRIVERS The affirmations reflect the delays in servicing of term loan obligation by the company during March, April and May 2016. RATING SENSITIVITIES Positive: Timely debt servicing for at least three consecutive months could result in a positive rating action. COMPANY PROFILE VRV was incorporated in 1992. It is engaged in the bottling of Indian made foreign liquor and trading of edible oils. VRV Ratings: -- Long Term Issuer Rating: affirmed at 'IND D' -- INR30.5 mil. fund-based working capital limit: affirmed at Long-term 'IND D' -- INR1.1 mil. o/s term loans (reduced from INR2.5 mil.): affirmed at Long-term 'IND D' -- INR104 mil. working capital term loan: affirmed at Long- term 'IND D' -- INR140 mil. non-fund-based limits: affirmed at Short-term 'IND D' ========= J A P A N ========= SHARP CORP: Shareholders Grill Management Over Foxconn Deal ----------------------------------------------------------- Asian Nikkei Review reports that Sharp Corp shareholders took the ailing electronics maker's executives to task on June 23 for their handling of sale talks with Foxconn, signaling doubts about the deal's viability even while giving it the requisite thumbs- up. Nikkei relates that Sharp's acquisition by the Taiwanese contract manufacturer -- officially known as Hon Hai Precision Industry -- received approval at the shareholders meeting. According to the report, the Foxconn group will invest JPY388.8 billion ($3.67 billion), gaining a 66% voting stake in Sharp via newly allocated shares. Nikkei says higher-ups from the Taiwanese company were appointed as Sharp directors including Foxconn second-in-command Tai Jeng-wu, who will serve as the Japanese company's chief. But Sharp's final shareholders meeting as an independent entity was anything but placid, says Nikkei. The first shareholder to speak during the open question period, a former employee, chided outgoing President Kozo Takahashi and other executives for not revealing "inconvenient information" -- contingent liabilities that delayed the deal -- until buyout talks seemed complete. That move "caused JPY100 billion to be knocked off the purchase price," the shareholder said, calling the company's current state "all [the executives'] fault," Nikkei relates. According to Nikkei, Sharp attributes the delay to Foxconn's slower due diligence relative to Innovation Network Corp. of Japan, a public-private fund that had been in the running to acquire the electronics maker. "Hon Hai was rushing to catch up in the last week," the report quotes Takahashi as saying. Had the liabilities been kept hidden, the investment deal could have collapsed, he said. Nikkei relates that other shareholders voiced doubts about whether Foxconn will hold up its end of the bargain to invest in Sharp. The deal will be completed within the month, Foxconn Chairman Terry Gou said June 22 at that company's general shareholders meeting, relays Nikkei. But the investment itself still needs to pass inspection by Chinese antitrust authorities before payment can occur, the report notes. Takahashi was vague about the timeline for the transaction, saying only that he thinks it will occur "in the coming days," but he signaled confidence that it will go through without issue, Nikkei adds. About Sharp Based in Osaka, Japan, Sharp Corporation (TYO:6753) -- http://sharp-world.com/-- manufactures and sells electronic telecommunication devices, electronic machines and components. As reported in the Troubled Company Reporter-Asia Pacific on May 16, 2016, Nikkei Asia Review said Sharp Corp.'s net loss for fiscal 2015 widened enough to pull the company into technical insolvency as its liabilities exceeded assets on a consolidated basis. More than ever, the Japanese electronics maker is banking on Hon Hai Precision Industry, its soon-to-be owner, to turn around its fortunes, Nikkei said. According to Nikkei, Sharp announced on May 12 that its group net loss came in at JPY255.9 billion ($2.35 billion) for the year ended in March. The figure is wider than the previous fiscal year's JPY222.3 billion group net loss. The company's display panel business and consumer electronics business in particular sunk the company deeper into its hole. Heavy extraordinary losses also damaged the overall result. The operating loss came in at JPY161.9 billion, narrower than the JPY170 billion that Sharp had forecast. The company's net worth now stands at minus JPY31.2 billion, with a capital to asset ratio at minus 2.7%. However, fresh funding from Taiwan's Hon Hai, once the takeover is completed, is expected to bring the Japanese electronics giant's net worth back above zero, Nikkei noted. On May 17, 2016, S&P Global Ratings said it has raised its long- term corporate credit rating on 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. The TCR-AP reported on April 15, 2016, that Egan-Jones Ratings Company lowered the foreign currency senior unsecured rating on debt issued by Sharp Corp. Japan to CCC+ from B- on March 30, 2016. ================= S I N G A P O R E ================= DCS ASSET: Fitch Affirms BB Rating on Class C Notes --------------------------------------------------- Fitch Ratings has affirmed DCS Asset Funding Pte. Ltd. The transaction is a securitisation of credit card and charge card receivables in Singapore originated by Diners Club (Singapore) Private Limited (Diners Singapore). The rating actions are: (balance as of May 9, 2016): SGD8.3 mil. (outstanding balance out of SGD10m facility) working capital facility due Sept. 2016, affirmed at 'A-sf'; Outlook Stable SGD100 mil. Class A1 fixed-rate notes due Sept. 2018 affirmed at 'A-sf'; Outlook Stable SGD24.7 mil. Class A2 floating-rate notes due Sept. 2018, affirmed at 'A-sf'; Outlook Stable SGD9.8 mil. Class B floating-rate notes due Sept. 2018, affirmed at 'BBBsf'; Outlook Stable SGD8.2 mil. Class C floating-rate notes due Sept. 2018, affirmed at 'BBsf'; Outlook Stable KEY RATING DRIVERS The affirmation reflects Fitch's view that the performance of the underlying assets has remained within expectations, and that credit enhancement (CE) is sufficient to support the current ratings. Delinquencies, defaults, payment rates and excess spreads of the transaction have performed with Fitch's expectations since the last review. Payment rates have tracked upward in the last 12 months due to a larger portion of charge card receivables, which tend to have higher payment rates. In terms of the excess spreads, they were in the range of 0.4%-2.2% with an average of 1.3% since closing, and the most recent three-month average excess spread was 1.95% (April 2016). No losses on the notes have been realized since closing because excess spreads have absorbed all defaults so far. According to the April 2016 servicer report, the three-month rolling average delinquency ratio was 0.80%, well below the transaction's 3% early amortization trigger. At the same time, the three-month rolling default rate was 0.80%, well below the transaction's 2% early amortization trigger. Delinquency and default rates increased slightly in late 2015 consistent with the industry. This can be attributed to a new Monetary Authority of Singapore origination guideline, imposed industry wide, placing an obligor borrower limit of 24x gross monthly income across all unsecured credit lines. This requirement came into effect on 1 June 2015. Delinquency and default rates have started to stabilize in the last two months, though, and Fitch expects the performance to remain steady because Singapore's economy is likely to continue to expand, albeit at a slower pace in 2016. RATING SENSITIVITIES The ratings on the notes may be upgraded if the transaction performance remains sound and credit enhancement builds up. The ratings on the working capital facility, and class A1 and A2 notes may be downgraded by one notch to 'BBB+sf' if the base-case default rate increases by 38%, keeping all other factors constant. The class B notes may be downgraded by one notch to 'BBB-sf' if the base-case default rate increases by 16%, keeping all other factors constant. The class C notes may be downgraded by one notch to 'BB-sf' if the base-case default rate increases by 3%, keeping all other factors constant. SABANA SHARI'AH: S&P Lowers CCR to 'BB+'; Outlook Stable -------------------------------------------------------- S&P Global Ratings lowered its long-term corporate credit rating on Sabana Shari'ah Compliant Reit to 'BB+' from 'BBB-'. The outlook is stable. At the same time, S&P affirmed its 'axBBB+' long-term ASEAN regional scale rating on the Singapore-based REIT. S&P subsequently withdrew all the ratings at Sabana's request. S&P downgraded Sabana because the REIT's balance sheet has weakened on prolonged difficult industry conditions. S&P's base- case expectation is that Sabana's ratio of funds from operations (FFO) to debt will be 7%-9% for the next 12 months as negative rental reversions and a higher cost of borrowing reduce its profitability. Lumpy lease expiries since November 2013 coincided with an industry downturn with declining capital values and expanding capitalization rates in the industrial space in Singapore. Still, S&P recognizes that the management has sound financial discipline whereby leverage, as defined by the ratio of total debt to total assets, has been consistently kept below 40% since the REIT's listing. The temporary peak of 41.7% as of Dec. 31, 2015, arising from significant valuation loss was quickly brought down below 40% in the first quarter of 2016. The downgrade also reflects Sabana's limited headroom under one of its covenants measured by total assets. Sabana intends to pursue a built-to-suit transaction of moderate size (about Singapore dollar 25 million) with target completion by mid-2018. This transaction will involve an equity portion because the REIT has little headroom to take on more debt under its leverage policy. The potential equity raising could reduce the REIT's debt. However, given Sabana's low unit prices (below its net asset value), still lumpy lease expiries (more than 30% in 2016), and subdued industry conditions, the timing and the amount of such equity raising are uncertain, in S&P's view. The stable outlook at the time of withdrawal reflected S&P's view that Sabana would take creditor-friendly measures to preserve its balance sheet strength, such that the FFO-to-debt ratio would be above 7% over the next 12 months. ==================== S O U T H K O R E A ==================== MAGNACHIP SEMICONDUCTOR: S&P Affirms 'CCC+' CCR; Outlook Stable --------------------------------------------------------------- S&P Global Ratings revised to stable from negative its outlook on its 'CCC+' long-term corporate credit rating on Korea-based analog and mixed-signal semiconductor designer and manufacturer MagnaChip Semiconductor Corp. At the same time, S&P affirmed its 'CCC+' long-term corporate credit and debt ratings on the company. S&P's revision of the outlook on MagnaChip to stable mainly reflects S&P's expectation that the company will modestly improve its profitability and operating cash flows over the next 12 months. This is mainly attributable to its ongoing cost reduction efforts, including discontinuation of unprofitable operations and growing demand for active matrix organic light emitting diodes (AMOLED) display drivers. "We expect MagnaChip to grow its display solution revenues because of the increasing adoption of AMOLED technology for smartphones, wearable devices, and TVs, given its good relationship with a leading AMOLED panel maker," said S&P Global Ratings analyst Sangyun Han. "However, we believe the company's operating and financial performance will remain volatile over the next one to two years due to its relatively small scale and less competitive technological capabilities, particularly associated with its semiconductor foundry business." In S&P's base-case scenario, it expects MagnaChip will not face significant liquidity distress over the next 12 months mainly because of its cash holdings of US$73.5 million as of March 31, 2016, and modestly improving operating cash flows, which would be sufficient to cover its interest payments and capital expenditures in the near term. S&P believes that the uncertainty pertaining to legal disputes in connection to restatement issues has somewhat reduced as the company is currently in the process of settling these litigations. The company plans to fund the settlement mainly through insurance proceeds of around US$29 million, which it has already received from the insurance company and booked as restricted cash on its balance sheet. However, S&P still sees some legal uncertainties related to the restatement issues such as ongoing investigation from the SEC, the outcome of which could impair the company's financial position. "The rating affirmation at 'CCC+' reflects our view that the company remains susceptible to nonpayments of interest and principal of its outstanding US$225 million debt due in 2021 because of its vulnerable profitability and cash flow, and its lack of access to capital markets," Mr. Han said. S&P believes that only favorable market conditions can significantly improve Magnachip's profitability and help the company rebuild its access to capital markets and meet its long- term debt obligations. In S&P's base case, it expects the company to generate marginal free operating cash flow over the next two years, despite its relatively low capital expenditures. The stable outlook reflects S&P's expectation that the company can sustain its cash levels over the next 12 months without significant pressures on its liquidity, primarily owing to its modestly improving operating cash flows. S&P may lower the ratings if it sees significantly increasing liquidity risk for the company with rapidly deteriorating cash level, possibly due to worse-than-anticipated operating performance. S&P could raise the ratings if the company significantly improves its profitability and generates positive free operating cash flows, enabling the company to lower its debt-to-EBITDA ratio approaching to 5.0x on a sustainable basis, maintain a cash level of over US$100 million, and improve its access to capital markets. ================ S R I L A N K A ================ DFCC BANK: Fitch Affirms 'B+' Long-Term Foreign-Currency IDR ------------------------------------------------------------- Fitch Ratings has downgraded National Development Bank PLC's (NDB) National Long-Term Rating to 'A+(lka)' from 'AA-(lka)'. The ratings on eight other Sri Lanka banks have been affirmed. The agency also revised the Outlook on DFCC Bank PLC's (DFCC) and Sampath Bank PLC's National Long-Term Ratings to Negative. The Long-Term Issuer Default Ratings (IDRs) on National Savings Bank (NSB) and Bank of Ceylon (Bank of Ceylon) have been affirmed at 'B+' and their National Long-Term Ratings have been affirmed at 'AAA(lka)' and 'AA+(lka)', respectively. The Outlooks on the IDRs of NSB and Bank of Ceylon have been maintained at Negative while the Outlooks on their National Long-Term Ratings have been maintained at Stable. Fitch has also affirmed the National Long- Term Rating of People's Bank (Sri Lanka) (People's Bank) at 'AA+(lka)' with a Stable Outlook. Furthermore, Fitch has affirmed the National Long-Term Rating of Commercial Bank of Ceylon PLC (CB) at 'AA(lka)', Hatton National Bank PLC (HNB) at 'AA-(lka)', and Seylan Bank PLC (Seylan) at 'A- (lka)'. DFCC's Support Rating Floor (SRF) was revised to 'B-' from 'B'. KEY RATING DRIVERS IDRS, NATIONAL RATINGS AND SENIOR DEBT The rating actions follow Fitch's periodic review of the large banks peer group. Fitch downgraded its assessment of Sri Lankan banks' operating environment to 'b+' from 'bb-' and assigned a negative outlook. Fitch believes operating conditions have become more challenging - as signalled by the downgrade of the sovereign rating to 'B+' from 'BB-' in February 2016 - and expects increased volatility to add pressure on the banks' credit metrics. However, Fitch maintains a stable outlook for the Sri Lankan banking sector for 2016, as a material deterioration in the sector's credit profile is not expected in the short-term. Fitch believes the underlying operating conditions supporting sector performance are likely to remain intact and pressure on the economic environment is likely to be contained through tighter monetary policy. The operating environment is a key rating driver for the Sri Lankan banking sector. It constrains the Viability Rating (VR) of some banks, as it is rare for a VR to be assigned significantly above the sovereign rating, however well banks score on other factors. Banks With Long-Term Ratings Driven by Sovereign-Support The IDRs and National Long-Term Ratings of NSB and Bank of Ceylon, and the National Long-Term Rating of People's Bank, reflect Fitch's expectation of extraordinary support from the sovereign (B+/Negative). Fitch believes state support for NSB stems from its policy mandate of mobilising retail savings and primarily investing them in government securities. The National Savings Bank Act contains an explicit deposit guarantee and Fitch is of the view that the authorities would support, in case of need, the bank's depositors and senior unsecured creditors to maintain confidence and systemic stability. Fitch has not assigned a VR to NSB, as it is considered to be a policy bank. Fitch expects support for Bank of Ceylon and People's Bank to stem from their high systemic importance, quasi-sovereign status, role as key lenders to the government and full state-ownership. The Negative Outlook on Bank of Ceylon's and NSB's IDRs reflect the Negative Outlook on the sovereign's rating. The Outlook on Bank of Ceylon's, NSB's and People's Bank's National Long-Term Ratings is Stable as their national ratings reflect the banks' creditworthiness relative to the best credit in Sri Lanka. The ratings of Bank of Ceylon, NSB and People's Bank are unlikely to be affected unless Fitch's expectations of sovereign support change. The US Dollar senior unsecured notes issued by NSB and Bank of Ceylon are rated at the same level as the banks' Long-Term Foreign-Currency IDRs, as the notes rank equally with other senior unsecured obligations. The notes have a Recovery Rating of 'RR4'. Bank of Ceylon's VR reflects its thin capitalization and weak asset quality. This is counterbalanced by its strong domestic funding franchise, which is underpinned by its state linkages. Fitch considers state support as Bank of Ceylon's primary rating driver, even though its VR is at the same level as its SRF. The National Long-Term Rating of Seylan reflects Fitch's expectation of state support due to its state shareholding, which came about in the aftermath of the bank's crisis in December 2008, and higher share of banking sector deposits relative to some peers. Seylan has a lower support-driven rating due to its smaller market share compared with larger peers. Fitch believes Seylan's standalone financial strength has improved, reaching the same level as it support-driven rating. Seylan's senior debt is rated at the same level as its National Long-Term Rating, as the debentures rank equally with other senior unsecured obligations. Banks With Long-Term Ratings Driven by Intrinsic Strength The downgrade of NDB's National Long-Term Rating reflects the decline in its capitalisation alongside continued strong loan growth, and weaker profitability. Fitch's expectation that the bank's higher risk appetite could dilute the benefit of a capital infusion has been incorporated in the rating action. NDB's ratings reflect its satisfactory asset quality, weaker franchise and lower capitalisation relative to higher-rated peers. The Outlook on DFCC's National Long-Term Rating has been revised to Negative to reflect weakening capital buffers that stem from weaker asset quality metrics, increased loan growth and below- average internal capital generation. The Negative Outlook on DFCC's IDR reflects Fitch's approach of generally capping bank ratings at the sovereign rating level. This is because of the likely adverse impact on the bank's credit profile from the sovereign's deteriorating credit profile and increasing risks in the domestic operating environment. DFCC's VR captures its developing commercial banking franchise and still-high capitalization. Its weaker asset quality compared with better- rated peers weighs on its rating. DFCC's US dollar notes are rated at the same level as its Long- Term Foreign-Currency IDR. The notes have a Recovery Rating of 'RR4'. DFCC's Sri Lanka rupee-denominated senior debt is rated at the same level as its National Long-Term Rating, as the debentures rank equally with other senior unsecured obligations. Sampath's Outlook has been revised to Negative as Fitch expects the bank's capitalisation to worsen beyond previous expectations. Fitch does not believe Sampath can sustain its capitalisation purely through retained earnings. The bank's ratings reflect its lower capitalisation and higher risk appetite relative to peers, which counterbalance its satisfactory asset quality and improving franchise. The bank's regulatory Tier 1 capital-adequacy ratio continued to deteriorate and stood at 7.6% by end-March 2016 (end-2015: 8%; end-2014: 9%). The National Long-Term Rating of CB reflects its measured risk appetite relative to peers, strong funding profile, solid domestic franchise and sound performance. The ratings reflect Fitch's expectation that its non-domestic operations will remain small. The National Long-Term Rating of HNB reflects its strong domestic franchise, satisfactory capitalisation and strong performance, counterbalanced by a higher risk appetite as seen through sustained high loan growth that has put pressure on its funding and liquidity profile. HNB's senior debentures carry the same rating, as they rank equal with other unsecured obligations. SUPPORT RATING AND SUPPORT RATING FLOOR The SRs and SRFs of privately owned DFCC reflect its relative lower systemic importance, in Fitch's view. The SR and SRFs of NSB and Bank of Ceylon reflect the state's ability and propensity to provide support to the banks given their high importance to the government and high systemic importance. SUBORDINATED DEBT AND OTHER HYBRID SECURITIES NDB's, DFCC's, Sampath's, Bank of Ceylon's, Seylan's, CB's and HNB's old-style Basel II Sri Lanka rupee-denominated subordinated debt is rated one notch below their National Long-Term Ratings to reflect the subordination to senior unsecured creditors. RATING SENSITIVITIES IDRS, NATIONAL RATINGS AND SENIOR DEBT The banks' credit profiles are sensitive to changes in the operating environment. Fitch may take negative rating action if the banks' appetite for risk-taking and pressure on key credit metrics increases amid challenging operating conditions that raises capital impairment risks which are not counterbalanced through adequate capital buffers. Fitch may take positive rating action if stronger risk management and higher capital buffers enhance the resilience of the banks' balance sheets, but this is only likely to happen in the medium term. Banks With Long-Term Ratings Driven by Sovereign Support Any change in the sovereign rating or perception of state support to NSB, Bank of Ceylon and People's Bank could result in a change in their SRFs. Fitch may downgrade NSB's National Long-Term Rating if there is a reduced expectation of state support through, for instance, the removal of preferential support, or a substantial change in its policy role or deviation from mandated core activities indicating its reduced importance to the government. A downgrade of Bank of Ceylon's IDRs will only result from a downgrade of its VR and SRF. Visible demonstration of preferential support for Bank of Ceylon and People's Bank in the form of an explicit guarantee may be instrumental to an upgrade of their National Long-Term Ratings. NSB's and Bank of Ceylon's senior debt ratings are sensitive to changes in the banks' Long-Term IDRs. The Recovery Ratings of NSB and Bank of Ceylon are sensitive to Fitch's assessment of potential recoveries for creditors in case of default or non- performance. Bank of Ceylon's VR may come under pressure if there is a continued decline in capitalisation through a surge in lending or further decline in asset quality alongside high dividend payouts. Further deterioration in the operating environment reflected in a decline in Bank of Ceylon's key credit metrics could negatively affect its VR. A downgrade of Seylan's rating could result from a reassessment of state support and a material reversal in recent improvements to its asset quality, together with a weakening financial profile. In the absence of changes to Fitch's support assessment, an upgrade of Seylan's rating would be contingent on further improvements in its standalone profile through improved asset quality and provisioning, mainly stemming from recovery of legacy NPLs. Seylan should also maintain other credit metrics in line with higher-rated peers to warrant an upgrade. Seylan's senior debt ratings will move in tandem with its National Long-Term Rating. Banks with Long-Term Ratings Driven by Intrinsic Strength NDB's National Long-Term Rating may be downgraded if the bank is not able to sustain its capitalisation at a level commensurate with its risk profile. Drivers for an upgrade are the quantum of a potential capital injection and its sensible deployment alongside the sustainability of a sufficient capital buffer to counterbalance weaknesses in NDB's credit profile. Fitch does not see upside potential for NDB's ratings in the near term, as the bank is likely to face difficulty sustaining a capital buffer in line with higher-rated peers due to its higher risk appetite and operating environment-related risks. The Outlook on DFCC's National Long-Term Rating may be revised to Stable if the bank can sustain capital buffers to sufficiently cushion its weaker asset quality amid higher operating environment-related risks and counterbalance its developing franchise relative to more established peers. Fitch expects project finance to remain integral to the bank's business and, as such, expects the bank to maintain higher capitalisation to offset the higher risk of this business. DFCC's IDRs and National Long-Term Rating could be downgraded if there is a sustained deterioration in its capitalisation or further weakening of the operating environment. DFCC's RR is sensitive to Fitch's assessment of potential recoveries for creditors in case of default or non-performance. A downgrade of Sampath's National Long-Term Rating could result from a sustained decline in capitalisation, further increase in risk-taking or a sharp decline in asset quality. Fitch would revise Sampath's Outlook to Stable if there is a capital infusion and the bank maintains sufficient capital buffers commensurate with its risk profile and operating environment-related risks. Enhanced resilience against a volatile operating environment could be positive for CB's National Long-Term rating. The bank's ratings could be downgraded if its ability to withstand cyclical asset-quality deterioration declines due to lower earnings and capitalisation. In addition, any marked weakening in its deposit franchise and deviation from its measured risk appetite, both viewed by Fitch as key factors that differentiate CB from its lower-rated peers, would be negative. An upgrade of HNB's National Long-Term Rating is contingent on the bank achieving sustained improvements in its financial profile, in particular in terms of its funding, and a moderation of its risk appetite. A rating downgrade could result from a significant increase in risk-taking and operating environment- related risks, unless sufficiently mitigated through capital and financial performance. Further weakening of HNB's liquidity position could also negatively affect its rating. SUPPORT RATING AND SUPPORT RATING FLOOR Reduced propensity of the government to support systemically important banks could result in a downgrade in the assigned SRs and SRFs, but Fitch sees this to be unlikely in the medium-term. A change in the sovereign's ratings could also lead to a change in the SRs and SRFs of the banks. SUBORDINATED DEBT Subordinated debt ratings will move in tandem with the banks' National Long-Term Ratings. FULL LIST OF RATING ACTIONS The rating actions are: National Development Bank PLC: National Long-Term Rating downgraded to 'A+(lka)' from 'AA-(lka)'; Stable Outlook Basel II compliant subordinated debentures downgraded to 'A(lka)' from 'A+(lka)' DFCC Bank PLC: Long-Term Foreign-Currency IDR affirmed at 'B+'; Negative Outlook Long-Term Local-Currency IDR affirmed at 'B+'; Negative Outlook Short-Term Foreign-Currency IDR affirmed at 'B' National Long-Term Rating affirmed at 'AA-(lka)'; Outlook revised to Negative from Stable Viability Rating affirmed at 'b+' Support Rating affirmed at '4' Support Rating Floor revised to 'B-' from 'B' US dollar senior, unsecured notes affirmed at 'B+'; Recovery Rating at 'RR4' Sri Lanka rupee-denominated senior unsecured debentures affirmed at 'AA-(lka)' Basel II compliant Sri Lanka rupee-denominated subordinated debentures affirmed at 'A+(lka)' Sampath Bank PLC: National Long-Term Rating affirmed at 'A+(lka)'; Outlook revised to Negative from Stable Basel II compliant outstanding subordinated debentures affirmed at 'A(lka)' National Savings Bank: Long-Term Foreign-Currency IDR affirmed at 'B+'; Negative Outlook Long-Term Local Currency IDR affirmed at 'B+'; Negative Outlook Short-Term Foreign-Currency IDR affirmed at 'B' National Long-Term Rating affirmed at 'AAA(lka)'; Stable Outlook Support Rating affirmed at '4' Support Rating Floor affirmed at 'B+' US dollar senior unsecured notes affirmed at 'B+'; Recovery Rating at 'RR4' Bank of Ceylon: Long-Term Foreign-Currency IDR affirmed at 'B+'; Negative Outlook Long-Term Local-Currency IDR affirmed at 'B+'; Negative Outlook Short-Term Foreign-Currency IDR affirmed at 'B' National Long-Term Rating affirmed at 'AA+(lka)'; Stable Outlook Viability Rating affirmed at 'b+' Support Rating affirmed at '4' Support Rating Floor affirmed at 'B+' US dollar senior unsecured notes affirmed at 'B+'; Recovery Rating at 'RR4' Basel II compliant Sri Lanka rupee-denominated subordinated debentures affirmed at 'AA(lka)' People's Bank (Sri Lanka): National Long-Term Rating affirmed at 'AA+(lka)'; Outlook Stable Seylan Bank PLC: National Long-Term Rating affirmed at 'A-(lka)'; Stable Outlook Sri Lanka rupee-denominated senior unsecured debentures affirmed at 'A-(lka)' Basel II compliant subordinated debentures affirmed at 'BBB+(lka)' Commercial Bank of Ceylon PLC: National Long-Term Rating affirmed at 'AA(lka)'; Stable Outlook Basel II compliant outstanding subordinated debentures affirmed at 'AA-(lka)' Hatton National Bank PLC: National Long-Term Rating affirmed at 'AA-(lka)'; Stable Outlook Sri Lanka rupee-denominated senior unsecured debentures affirmed at 'AA-(lka)' Basel II compliant outstanding subordinated debentures affirmed at 'A+(lka)' ********* 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 ***