/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/161107.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, November 7, 2016, Vol. 19, No. 220 Headlines A U S T R A L I A ARRIUM LTD: Sells Moly-Cop to American Industrial for AUD1.6BB CALIBURN POTTER: First Creditors' Meeting Set for Nov. 14 CENTRE ROAD: First Creditors' Meeting Set for Nov. 14 EMECO HOLDINGS: Chapter 15 Case Summary HOME AUSTRALIA: Homestead Homes' Creditors to Lose AUD4.9 Million MONNIF PTY: First Creditors' Meeting Slated for Nov. 15 PEABODY ENERGY: Unit Enters Into Metropolitan Mine Sale Agreement RISELEY LEISURE: First Creditors' Meeting Set for Nov. 14 SLATER & GORDON: Hit with 'First Strike' on Remuneration News C H I N A CHINA CINDA: Moody's Affirms B1(hyb) FC Preferred Stock Ratings I N D I A A.A. SNACK: ICRA Lowers Rating on INR5.25cr ST Loan to 'D' ADVANCE STEEL: ICRA Suspends B- Rating on INR6cr LT Loan ARUPPUKOTTAI SHRI: ICRA Reaffirms 'B' Rating on INR20cr Loan BABA HEALTHCARE: Ind-Ra Hikes Long term Issuer Rating to 'IND BB' BARAKA OVERSEAS: ICRA Reaffirms B+ Rating on INR10cr Credit Loan BAVA MINES: ICRA Suspends 'D' Rating on INR8cr Loan BHADRA INTERNATIONAL: ICRA Rates INR304.53cr Term Loan at 'D' BRAHMANI DEVELOPERS: Ind-Ra Assigns 'IND BB+' LT Issuer Rating D. K. ELECTRICAL: Weak Financial Strength Cues ICRA SP3D Grading DINESH ENTERPRISES: Weak Financial Strength Cues ICRA SP3D Grade DOLL CERAMIC: ICRA Raises Rating on INR3.06cr Term Loan to B EYE-Q VISION: ICRA Reaffirms B+ Rating on INR3cr NCD Programme FLEXPACK FIBC: CARE Assigns 'B' Rating to INR9cr Long Term Loan GAJANAND FOODS: Ind-Ra Assigns 'IND B+' Long term Issuer Rating GANGA DIAGNOSTIC: ICRA Ups Rating on INR13.99cr Term Loan to B+ GMR RAJAHMUNDRY: CARE Reaffirms 'D' Rating on INR2,419.41cr Loan HUNSUR PLYWOOD: ICRA Reaffirms B+ Rating on INR5.25cr LT Loan INDERA ETHNIC: ICRA Lowers Rating on INR4.97cr Loan to 'D' MAHAKALI CHANDRAPUR: ICRA Assigns 'C' Rating to INR7cr LT Loan MORAJ BUILDING: ICRA Assigns B+/A4 Rating to INR11cr Term Loan MURUGAN TEXTILES: ICRA Suspends 'B' Rating on INR7cr Loan MUTHULAXMI SPINNING: ICRA Suspends B/A4 Rating on INR8.61cr Loan NAGPAL EXPORTS: Ind-Ra Assigns 'IND B+' Long term Issuer Rating NEELKANTH PROPERTIES: ICRA Reaffirms B+ Rating on INR18cr Loan NOOLI JEWELLERS: ICRA Reaffirms B+ Rating on INR12cr Loan RSV RICE: ICRA Reaffirms 'B' Rating on INR15cr Term Loan S.P. AUTOMOBILES: CARE Assigns B+ Rating to INR5cr Long Term Loan SADANAND GUPTA: ICRA Suspends 'B' Rating on INR2cr Loan SAGARSHREE HOSPITAL: Ind-Ra Assigns 'IND B+' LT Issuer Rating SAKTHI ACCUMULATORS: ICRA Suspends 'B' Rating on INR7cr Loan SANDEEP RICE: ICRA Reaffirms 'B' Rating on INR10cr LT Loan SATHYA SHANMUKHA: ICRA Suspends B+ Rating on INR5cr LT Loan SINGHANIA BUILDCON: ICRA Suspends B- Rating on INR21.72cr Loan SRI GAYATRI: Ind-Ra Assigns 'IND B' Long term Issuer Rating SVS FOOD: ICRA Reaffirms B- Rating on INR5.5cr Cash Loan TARAWADE LOGISTICS: CARE Rates INR1cr Long Term Loan at B+ VADIVEL PYROTECHS: ICRA Lowers Rating on INR15cr Loan to B+ VARDHMAN POLYTEX: ICRA Reaffirms 'D' Rating on INR464cr LT Loan VARIDHI HYGIENE: Ind-Ra Affirms 'IND B' Long term Issuer Rating VIKAS COTTON: CARE Assigns 'B' Rating to INR8.82cr LT Loan J A P A N MITSUI O.S.K: Merger Will Not Affect Ba1 Rating, Moody's Says TAKATA CORP: Readies Bankruptcy Filing for U.S. Unit N E W Z E A L A N D ORIGINAL CHILDREN'S BOOKSHOP: Goes Into Liquidation P H I L I P P I N E S COMMUNITY RURAL: PDIC to Takeover and Liquidate Bank S O U T H K O R E A HANJIN SHIPPING: Number of Ships Seized Rises to Five STX OFFSHORE: French Gov't to Defend Interests in Shipyard Sale - - - - - ================= A U S T R A L I A ================= ARRIUM LTD: Sells Moly-Cop to American Industrial for AUD1.6BB -------------------------------------------------------------- Prashant Mehra at the Australian Associated Press reports that Arrium's creditors have waved through a plan to sell the troubled company's steel and mining assets after its administrators signed a AUD1.6 billion deal to sell the Moly-Cop grinding media business. Moly-Cop -- the world's largest supplier of grinding media used in mining and construction -- will be acquired by US private equity firm American Industrial Partners for US$1.23 billion (AUD1.64 billion), AAP says. "The sale is a great step forward for all creditors of Arrium. It is probably AUD300 million to AUD400 million more than what was offered last year," administrator Mark Korda of KordaMentha told reporters after a creditors meeting in Sydney, the report relays. Proceeds from the sale of the profitable division, which was not under administration, will be used to reduce Arrium's total debt of AUD2.8 billion, according to AAP. The sale is likely to be finalised by January, says AAP. In a resolution passed at a creditors meeting in Sydney on Nov. 4, Arrium's financers agreed to put the current administrators KordaMentha in charge of realising the remaining assets and distributing the proceeds. According to AAP, KordaMentha said in a report last month that it was better to sell the individual businesses held by the South Australian group than to wind it up, as this would provide a better return to creditors. And the administrator on Nov. 4 took the first step in realising value for creditors by signing an agreement to sell Moly-Cop - the company's only profit making division, AAP notes. Arrium's other assets include the flagship Whyalla steelworks and port, an east coast steel business, and an iron ore mine in South Australia, the report discloses. AAP relates that the administrators have currently received a handful of non-binding indicative proposals for the remaining business, Mr. Korda said, but declined to indicate their identity or the likely size of the bids. Recent media reports have named South Korean steel giant POSCO and UK steelmaker Liberty House as among the possible bidders. "Arrium's steel business has 6000 employees and holds strong market share. It is a big company. So the bidder will have to be a substantial company," the report quotes Mr. Korda as saying. The administrators expect to complete the sale process for the remaining businesses by end of January 2017, adds AAP. Arrium Limited (ASX:ARI) -- http://www.arrium.com/-- is an Australia-based mining and materials company. The Company is engaged in mining and supply of iron ore and steelmaking raw materials; manufacture and supply of mining consumable products; manufacture and distribution of steel products, and recycling of ferrous and non-ferrous scrap metal. Its segments include Mining, Mining Consumables, Steel and Recycling. Its Mining segment exports hematite iron ore and supplies both pelletized magnetite iron ore and hematite lump iron ore. Its Mining Consumables segment consists of Moly-Cop grinding media business, Waratah steel mill and Altasteel steel mill. Its Mining Consumables segment supplies various mining consumables, such as grinding media, wire ropes and rail wheels. Its Steel segment manufactures billet and distributes steel and metal products, including structural steel selections, steel plate, angels, channels, reinforcing steel and carbon products. Its Recycling segment supplies steelmaking raw materials. Pursuant to orders made by the Federal Court of Australia on April 12, 2016, Mark Mentha, Bryan Webster, Martin Madden and Cassandra Mathews of KordaMentha have been appointed Joint and Several Voluntary Administrators of the Company and its 93 Australian subsidiaries replacing Said Jahani, Paul Billingham, Michael McCann and Matthew Byrnes of Grant Thornton, who were appointed earlier in April. CALIBURN POTTER: First Creditors' Meeting Set for Nov. 14 --------------------------------------------------------- A first meeting of the creditors in the proceedings of Caliburn Potter Pty Limited, 'Caliburn Potter' and 'Caliburn Potter Asset Services', will be held at Suite 1, Level 15, 9 Castlereagh Street, in Sydney, on Nov. 14, 2016, at 11:00 a.m. Christopher Darin of Worrells Solvency & Forensic Accountants was appointed as administrator of Caliburn Potter on Nov. 2, 2016. CENTRE ROAD: First Creditors' Meeting Set for Nov. 14 ----------------------------------------------------- A first meeting of the creditors in the proceedings of Centre Road Pty Ltd will be held at the offices of BRI Ferrier Western Australia, Unit 3, 99-101 Francis Street, in Northbridge, Western Australia, on Nov. 14, 2016, at 10:00 a.m. Giovanni Maurizio Carrello of BRI Ferrier was appointed as administrator of Centre Road on Nov. 2, 2016. EMECO HOLDINGS: Chapter 15 Case Summary --------------------------------------- Chapter 15 Petitioner: Ian Matthew Testrow Level 3 71 Walters Drive Western Australia, 6017 Osborne Park Australia Chapter 15 Debtor: Emeco Holdings Limited Chapter 15 Case No.: 16-13080 Type of Business: Rental provider of heavy mining equipment Chapter 15 Petition Date: November 2, 2016 Court: United States Bankruptcy Court Southern District of New York (Manhattan) Chapter 15 Petitioner's Counsel: Erin Elizabeth Broderick, Esq. BAKER & MCKENZIE LLP 300 East Randolph, Suit 5000 Chicago, IL 60601 Tel: 312-861-8000 Fax: 312-861-2899 E-mail: erin.broderick@bakermckenzie.com Estimated Assets: Not Indicated Estimated Debts: Not Indicated HOME AUSTRALIA: Homestead Homes' Creditors to Lose AUD4.9 Million ----------------------------------------------------------------- The Australian Associated Press reports that more than 150 unsecured creditors of former senator Bob Day's failed building company in South Australia will not be paid the money they are owed. These 157 unsecured creditors are owed a total of AUD4.9 million by Homestead Homes and include tradesmen and subcontractors as well as customers who have paid deposits to build homes, according to AAP. "It owes people in this room and people that might not be here today about AUD4.9 million," liquidator Matthew Caddy told a creditors meeting in Adelaide on Nov. 4. "It is almost certain that there will be no money available for insecure creditors. It will essentially be a bad debt." AAP relates that the meeting came after Mr. Day formally resigned from the Senate on Nov. 1, effective immediately, after an investor interested in buying his collapsed home-building empire Home Australia decided not to proceed. The company operates under different brand names in five states, including as Homestead Homes in South Australia. According to the report, Mr. Caddy said Home Australia lost about AUD12 million in the final three years before it was declared insolvent. When the former Family First senator called in the liquidators the companies had "no money". "We had to cease construction of any homes," he said. "We had no money to pay tradesmen." AAP notes that there are 28 unsecured creditors in SA who paid deposits on homes and 75 across the whole group, which consists of five companies. According to AAP, the liquidator said when Mr Day entered politics he did not appoint anyone else to run the business and it went downhill. He said money was being moved between separate businesses in SA, Victoria, NSW, Queensland and Western Australia but they were being run without cohesion. "They were left to run themselves," the report quotes Mr Caddy as saying. "There was limited integration of the businesses. They were operating within their own silos." He said the demise of the NSW business Huxley Homes was most significant in the downfall of the group. Mr. Day has also been referred to the High Court for potentially breaching the Constitution by having an indirect financial interest through a lease agreement on a building in Adelaide, adds AAP. Home Australia is a residential new home building group operating in five Australian States under the brands Homestead Homes; Collier Homes; Newstart Homes; Ashford Homes; and Huxley Homes. On Oct. 17, 2016, Mathew Caddy and Barry Kogan of McGrathNicol were appointed as joint and several Liquidators of Home Australia Pty Ltd and wholly owned subsidiaries: -- Homestead Homes Pty Ltd -- Collier Homes Pty Ltd -- Newstart Homes (SE QLD) Pty Ltd -- Ashford Homes Pty Ltd -- Huxley Homes Pty Ltd -- Nationwide Australian Investments Pty Ltd -- Smart Road Property Rentals Pty Ltd MONNIF PTY: First Creditors' Meeting Slated for Nov. 15 ------------------------------------------------------- A first meeting of the creditors in the proceedings of Monnif Pty Ltd, trading As Monty's Plant Hire, will be held at the Conference Room, Level 4, 16 St Georges Terrace, in Perth, on Nov. 15, 2016, at 10:00 a.m. Richard Albarran and Cameron Shaw of Hall Chadwick were appointed as administrators of Monnif Pty on Nov. 3, 2016. PEABODY ENERGY: Unit Enters Into Metropolitan Mine Sale Agreement ----------------------------------------------------------------- Peabody Energy on Nov. 2, 2016, announced that one of its Australian subsidiaries has entered into a definitive agreement to sell Metropolitan Mine in New South Wales, Australia, and its associated 16.67 percent interest in the Port Kembla Coal Terminal to a subsidiary of South32 Limited for US$200 million in cash, subject to customary working capital adjustments. The transaction also includes a contingent value right that enables Peabody to realize additional cash proceeds should future metallurgical coal prices remain in excess of an agreed forward curve for a period of approximately 12 months following completion. The sale also is expected to release Peabody of approximately A$20 million in financial assurances, in the form of bank guarantees and cash, that will be replaced by South32 upon completion. "This sale supports our actions to strengthen the Australian portfolio, which remains core to Peabody, and is consistent with the strategy outlined in our business plan," said President and Chief Executive Officer Glenn Kellow. "We expect the transaction to be accretive to the value reflected in the business plan, generate meaningful proceeds for the Australian business, decrease future capital expenditure needs, and reduce risk to the Australian platform as we pursue a smaller but more profitable portfolio going forward." South32 Chief Executive Officer Graham Kerr said: "The Metropolitan Colliery is a natural fit within our portfolio and the acquisition is consistent with our strategy to invest in high quality mining operations where we can create value. The mine's recently upgraded infrastructure and close proximity to Illawarra Metallurgical Coal will enable us to further optimize performance and unlock unique blending and resource synergies. We look forward to the Metropolitan team joining South32." The transaction is not expected to have any impacts on the mine staff, workforce, or community, as South32 shares similar core values as Peabody from a safety, operations and sustainability perspective. The mine employs approximately 250 mine-site employees and as of December 31, 2015 has approximately 28 million tons of proven and probable reserves. The contingent value right enables Peabody to share equally with South32 in any revenue above an agreed metallurgical coal price forward curve after taxes, royalties and appropriate discounts on all coal sold for the 12 months following completion, subject to extension if a minimum amount of coal is not sold in that period. Transaction closing is anticipated to occur in the first quarter of 2017, subject to clearance by the Australian Competition and Consumer Commission. The sale is not subject to a financing condition as South32 intends to fund the transaction using existing cash on hand. South32 Limited is a globally diversified mining and metals company with high quality operations in Australia, Southern Africa and South America. About Peabody Energy Corporation Headquartered in St. Louis, Missouri, Peabody Energy Corporation claims to be the world's largest private-sector coal company. As of Dec. 31, 2014, the Company owned interests in 26 active coal mining operations located in the United States (U.S.) and Australia. The Company has a majority interest in 25 of those mining operations and a 50% equity interest in the Middlemount Mine in Australia. In addition to its mining operations, the Company markets and brokers coal from other coal producers, both as principal and agent, and trade coal and freight-related contracts through trading and business offices in Australia, China, Germany, India, Indonesia, Singapore, the United Kingdom and the U.S. Peabody posted a net loss of $1.988 billion for 2015, wider from the net loss of $777 million in 2014 and the $513 million net loss in 2013. At Dec. 31, 2015, the Company had total assets of $11.02 billion against $10.1 billion in total liabilities, and stockholders' equity of $919 million. On April 13, 2016, Peabody Energy Corp. and 153 affiliates filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code. The 154 cases are pending joint administration before the Honorable Judge Barry S. Schermer under Case No. 16-42529 (Bankr. E.D. Mo.). As of the Petition Date, PEC has approximately $4.3 billion in outstanding secured debt obligations and $4.5 billion in outstanding unsecured debt obligations. The Debtors tapped Jones Day as general counsel; Armstrong, Teasdale LLP as local counsel; Lazard Freres & Co. LLC and investment banker Lazard PTY Limited as investment banker; FTI Consulting, Inc., as financial advisors; and Kurtzman Carson Consultants, LLC, as claims, ballot and noticing agent. The Office of the U.S. Trustee on April 29, 2016, appointed seven creditors of Peabody Energy Corp. to serve on the official committee of unsecured creditors. The Committee retained Morrison & Foerster LLP as counsel, Spencer Fane LLP as local counsel, Curtis, Mallet-Prevost, Colt & Mosle LLP as conflicts counsel, Blackacre LLC as its independent expert, and Berkeley Research Group, LLC, as financial advisor. RISELEY LEISURE: First Creditors' Meeting Set for Nov. 14 --------------------------------------------------------- A first meeting of the creditors in the proceedings of Riseley Leisure Investments Pty Ltd will be held at Level 2, 55 Carrington St, in Nedlands, on Nov. 14, 2016, at 10:30 a.m. Simon Roger Coad of Ticcidew Insolvency was appointed as administrator of Riseley Leisure on Nov. 2, 2016. SLATER & GORDON: Hit with 'First Strike' on Remuneration News ------------------------------------------------------------- Eli Greenblat and Daniel Palmer at The Australian report that Slater & Gordon has attracted a "first strike" against its remuneration report, after shareholders revolted against the company's payment of lucrative bonuses to key executives despite last year's AUD1.02 billion loss flowing from its calamitous UK acquisition. The Australian says the law firm, which specialises in personal injury cases and class action law suits, is facing its own shareholder class action from investors. Investors pushed the firm lower on the news, with shares closing 2.78% weaker at 35 cents, the report says. It followed a massive 43.15% vote against adoption of the group's remuneration report, at the Melbourne AGM, The Australian relates. According to The Australian, votes disclosed to the AGM showed 27.9 million shares voted against the remuneration report, while 30.3 million, or 46.95% in favor. Later in the meeting when a vote was called on the awarding of 485,673 performance rights to CEO Andrew Grech, on top of his AUD637,000 pay, more than 25% voted against it. There was also a 30.88% vote against the awarding of service rights to Mr Grech, the report says. The Australian says shareholders voiced their anger over the decision to buy UK professional services business Quindell that later triggered a billion dollar write-off that crunched Slater & Gordon's accounts, terminated its dividend and saw its share price collapse by 90%. Ratcheting up the anger of investors, Slater & Gordon decided to pay bonuses to executives just at a time the company is on its knees, the report states. A AUD189,000 cash bonus was awarded to CFO Bryce Houghton and a AUD93,750 cash bonus to COO Felicity Pantelidis, The Australian discloses. Proxy advisory group ISS Governance advised its clients to vote against the adoption of the remuneration report, according to the report. The Australian Shareholders Association was also expected to advise a similar "no" vote, The Australian add. In his opening speech to shareholders, Slater & Gordon chairman John Skippen said it was likely the remuneration report would earn a first strike, The Australian relates that. If Slater & Gordon earns a "second strike" next year it will cause a spill of the board. "In light of this we will review our remuneration structure and this will be reported to shareholders in our fiscal 2017 remuneration report," The Australian quotes Mr Skippen as saying. "We understand shareholder concerns about the current value ascribed to their shares, but we aimed to balance that against the need for us to provide market competitive remuneration packages to attract and retain staff and to address some of the critical matters that faced the business last year." As reported in the Troubled Company Reporter-Asia Pacific on March 14, 2016, The Sydney Morning Herald said struggling listed law firm Slater & Gordon has suffered another blow after the Australian Securities Exchange dumped the stock from its top 200 list. SMH said the removal of Slater & Gordon from the ASX 200 is significant because it means some of the index funds which are required under their self-imposed mandates to hold shares in ASX 200 stocks will exit the stock. According to the report, the law firm is in a fight for survival following a horror 2015 that saw its market capitalisation plummet from more than AUD2.7 billion to AUD121.6 million on March 11 following an accounting scandal in its UK arm and weaker-than-expected growth in both its British business and its Australian arm. Slater & Gordon has until April 30 to satisfy its bankers it can remain as a viable organization, SMH relayed. Its financial advisers from insolvency firm McGrath Nicol are delivering weekly cash-flow updates to the firm's bankers, the report stated. Australia-based Slater & Gordon Limited (ASX:SGH) -- https://www.slatergordon.com.au/ -- is engaged in operating legal practices in Australia and the United Kingdom. The Company operates through segments, including Slater and Gordon Australia (AUS), Slater and Gordon UK (UK) and Slater Gordon Solutions (SGS). The AUS segment conducts a range of legal services within a geographical area of Australia. The AUS segment also includes investments, borrowing and capital rising activities. The Company's UK segment conducts a range of legal services in in the United Kingdom. The UK segment also includes the investments in SGS. The SGS segment offers legal services relating to road traffic accidents, employee liability and noise, including hearing loss. The SGS segment also provides complementary services in health and motor services. The Company's business and specialized litigation services include commercial, estate and professional negligence litigation and class actions. ========= C H I N A ========= CHINA CINDA: Moody's Affirms B1(hyb) FC Preferred Stock Ratings --------------------------------------------------------------- Moody's Investors Service has affirmed the A3 long-term and P-2 short-term issuer ratings of four Chinese distressed asset management companies (AMCs): -- China Cinda Asset Management Co., Ltd. (Cinda AMC) -- China Huarong Asset Management Co., Ltd. (Huarong AMC) -- China Orient Asset Management Co., Ltd. (Orient AMC) -- China Great Wall Asset Management Corporation (Great Wall AMC) Their baseline credit assessments (BCAs) remain unchanged. At the same time, Moody's has changed the outlook on the four companies to stable from negative. Moody's has also affirmed the medium term note (MTN) program ratings and note ratings issued by the companies' offshore subsidiaries and changed the outlook to stable from negative. RATINGS RATIONALE The primary drivers for the change in the outlooks to stable from negative on the big four AMCs' A3 long-term issuer ratings are: -- Government support for these companies is unlikely to change over the medium term -- Each company's rating is resilient to a hypothetical downside scenario in which the sovereign rating is downgraded by one notch. Moody's said, "We considered this scenario in view of the current negative outlook on the sovereign rating, and which is a key input into the ratings of the four AMCs' respective support providers" -- The companies' standalone credit profiles, as indicated by their BCAs in the case of GRIs are appropriate at current levels The Chinese government (Aa3, negative) -- through the Ministry of Finance (MOF) -- is the single largest shareholder of these big four AMCs, which have been going through different stages of commercialization. This majority shareholding by MOF will likely continue. Moody's believes that the big four AMCs have a strategic role in economic rebalancing and maintaining the stability of the financial system. Their important role -- in relation to distressed asset management, the banking system and the overall economy -- is likely to increase as China's economy continues to restructure. In 1H2016, the regulators enhanced the capacity of the big four AMCs to absorb the distressed assets of financial institutions by lowering the risk weighting of traditional distressed assets and restructuring distressed assets acquired from financial institutions to 50% and 75% respectively, from 100%. Moreover, the new market-based debt-to-equity swap policy -- as announced by the National Development and Reform Commission on 10 October 2016 -- has reiterated the important role of the AMCs in the deleveraging of Chinese corporates. Moody's said, "While regulators have allowed more local AMCs to be established, we believe these local AMCs are not directly competing with the big four AMCs due to their limitations on business scope and funding source." As a result, Moody's believes the big four AMCs' ratings will continue to incorporate five to six-notch uplift based on the likelihood of very high support from the Chinese government; an important consideration in their rating affirmation, despite pressure on the sovereign rating. Moody's said, "Given that the sovereign rating currently has a negative outlook, we conducted a hypothetical stress test in which we considered the impact on the AMCs' ratings if the sovereign rating was lowered by one notch. We concluded that their ratings have sufficient headroom -- under our JDA approach -- to withstand such a development." Cinda AMC Cinda AMC's BCA of ba2 is unchanged. While the company's consolidated leverage has increased due to its acquisition of Nanyang Commercial Bank, Ltd., it issued USD3.2 billion in preference shares in late September 2016 to replenish its capital. Moreover, it adjusted its business strategy to manage growth in 1H2016, which could also ease capital adequacy pressures; an important consideration in the affirmation of its ba2 standalone credit strength. Huarong AMC Huarong AMC's BCA of ba3 is unchanged. While the company completed its initial public offering in Hong Kong and raised HKD18 billion (USD2.3 billion) in gross new capital, it also showed rapid growth in 1H2016. Total assets in 1H2016 increased by 24% from end-2015 to RMB1,073 billion, driven by 29% growth in its distressed asset management business, as well as 43% growth in its investment and asset management business. These developments have pressured its capital adequacy. Orient AMC Orient AMC's BCA of ba3 is unchanged. In 1H2016, the company completed its RMB15 billion acquisition of a 50.23% stake in the Bank of Dalian (unrated) and the RMB10 billion purchase of the bank's non-performing loans. This acquisition could drag down the overall asset quality and capital adequacy of Orient AMC. However, the company completed a reform of its shareholding structure in late September 2016. A RMB1.1 billion additional capital injection from the Social Security Fund could slightly enhance capital adequacy. The company could potentially raise capital from strategic investors. Great Wall AMC Great Wall AMC's BCA of ba3 is unchanged. The company's core business is distressed asset management. While it has also established multiple financial services subsidiaries to facilitate its core business, the sizes of these subsidiaries are relatively small when compared with the other three AMCs. Great Wall AMC has not yet completed its joint-stock restructuring. At end-June 2016, it reported a capital adequacy ratio of 15.9% at the parent company level. MTN Programs of AMCs For all four AMCs, the rating affirmations on their MTN programs and the notes of their offshore platforms under keepwell structures reflect the consideration that Moody's is likely to maintain a one-notch difference between the four AMCs' long-term issuer ratings and their respective offshore platforms' notes and programs' ratings. This is because the latter are only supported by keepwell agreements. The one-notch differential also reflects the uncertainty regarding (1) the priority of claims for note holders -- relative to the AMCs' senior unsecured creditors -- in the absence of a guarantee from the AMCs, and (2) the ability of the keepwell provider to obtain approval to transmit resources to the offshore platform, given China's capital controls. What Could Make the Ratings Go Up/Down The ratings for these distressed asset management companies could be upgraded if: (1) Moody's believes that support from the central government will strengthen in the event that their activities assume greater strategic importance; and/or (2) their standalone credit profiles significantly strengthen (please refer to each issuer's Credit Opinion for further detail). On the other hand, their ratings could be downgraded if: (1) Moody's believes that support from the central government will weaken in the event that these companies become engaged in more commercial-type activities and face more concrete competition from potentially growing number of platforms or companies engaged in similar distressed asset management business, therefore weakening their strategic importance; and/or (2) their standalone credit profiles significantly deteriorate. The methodologies used in these ratings were Finance Companies published in October 2015, and Government-Related Issuers published in October 2014. China Cinda Asset Management Co., Ltd. is one of four major distressed asset management companies in China. Headquartered in Beijing, it reported consolidated assets of RMB1,009 billion at end-June 2016. China Huarong Asset Management Co., Ltd. is one of four major distressed asset management companies in China. Headquartered in Beijing, it reported consolidated assets of RMB1,073 billion at end-June 2016. China Orient Asset Management Co., Ltd. is one of four major distressed asset management companies in China. Headquartered in Beijing, it reported consolidated assets of RMB411 billion at end-2015. China Great Wall Asset Management Corporation is one of four major distressed asset management companies in China. Headquartered in Beijing, it reported consolidated assets of RMB365.7 billion at end-2015. LIST OF AFFECTED RATINGS Issuer: China Cinda Asset Management Co., Ltd. (Lead analyst: Sean Hung) -- Local currency and foreign currency long term issuer rating affirmed at A3, Outlook changed to stable from negative -- Local currency and foreign currency short term issuer rating affirmed at P-2 -- Foreign currency preferred stock rating affirmed at B1(hyb) -- Outlook changed to stable from negative Issuer: China Cinda Finance (2014) Limited (Lead analyst: Sean Hung) -- BACKED senior unsecured local currency long term note rating affirmed at Baa1, Outlook changed to stable from negative -- Outlook changed to stable from negative Issuer: China Cinda Finance (2015) I Limited (Lead analyst: Sean Hung) -- BACKED senior unsecured local currency long term note rating affirmed at Baa1, Outlook changed to stable from negative -- BACKED senior unsecured long term and short term local currency MTN program ratings affirmed at (P)Baa1/(P)P-2 -- Outlook changed to stable from negative Issuer: China Cinda Finance (2015) II Limited (Lead analyst: Sean Hung) -- BACKED senior unsecured long term and short term local currency MTN program ratings affirmed at (P)A3/(P)P-2 -- Outlook changed to stable from negative Issuer: China Huarong Asset Management Co., Ltd. (Lead analyst: Sean Hung) -- Local currency and foreign currency long term issuer rating affirmed at A3, Outlook changed to stable from negative -- Local currency and foreign currency short term issuer rating affirmed at P-2 -- Outlook changed to stable from negative Issuer: Huarong Finance Co. Ltd. (Lead analyst: Sean Hung) -- BACKED senior unsecured local currency long term note rating affirmed at Baa1, Outlook changed to stable from negative -- Outlook changed to stable from negative Issuer: Huarong Finance II Co., Ltd (Lead analyst: Sean Hung) -- BACKED senior unsecured local currency long term perpetual bond rating affirmed at Baa1(hyb), Outlook changed to stable from negative -- BACKED senior unsecured local currency long term note rating affirmed at Baa1, Outlook changed to stable from negative -- BACKED senior unsecured long term local currency MTN program ratings affirmed at (P)Baa1 -- Outlook changed to stable from negative Issuer: China Orient Asset Management Co., Ltd. (Lead analyst: Sean Hung) -- Local currency and foreign currency long term issuer rating affirmed at A3, Outlook changed to stable from negative -- Local currency and foreign currency short term issuer rating affirmed at P-2 -- Outlook changed to stable from negative Issuer: Charming Light Investments Ltd. (Lead analyst: Sean Hung) -- BACKED senior unsecured local currency long term note rating affirmed at Baa1, Outlook changed to stable from negative -- BACKED senior unsecured long term and short term local currency MTN program ratings affirmed at (P)Baa1/(P)P-2 -- Outlook changed to stable from negative Issuer: United Wealth Development Ltd. (Lead analyst: Sean Hung) -- BACKED senior unsecured long term and short term local currency MTN program ratings affirmed at (P)A3/(P)P-2 Issuer: China Great Wall Asset Management Corporation (Lead analyst: David Yin) -- Local currency and foreign currency long term issuer rating affirmed at A3, Outlook changed to stable from negative -- Local currency and foreign currency short term issuer rating affirmed at P-2 -- Outlook changed to stable from negative Issuer: China Great Wall International Holdings III Limited (Lead analyst: David Yin) -- BACKED senior unsecured local currency long term note rating affirmed at Baa1, Outlook changed to stable from negative -- BACKED senior unsecured long term and short term local currency MTN program ratings affirmed at (P)Baa1/(P)P-2 -- Outlook changed to stable from negative ========= I N D I A ========= A.A. SNACK: ICRA Lowers Rating on INR5.25cr ST Loan to 'D' ---------------------------------------------------------- ICRA has revised the long term rating for the INR0.25 crore fund based facilities of A.A. Snack from [ICRA]B+ to [ICRA]D. ICRA has also revised the short term rating for the INR5.25 crore fund based facilities of the firm from [ICRA]A4 to [ICRA]D. The ratings for the INR4.50 crore unallocated facilities have also been revised to [ICRA]D. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term-Fund Based 0.25 [ICRA]D; revised from Facilities (CC) [ICRA]B+ Short term-Fund Based 5.25 [ICRA]D; revised from Facilities [ICRA]A4 Long term/Short term 4.50 [ICRA]D; revised from Unallocated [ICRA]B+/[ICRA]A4 The revision in the ratings considers the delays observed in servicing of debt obligations by the firm. AA Snack is a partnership firm engaged in the business of processing of RCNs (Raw Cashew Nuts) and exporting of cashew kernels. In addition to this, the company also engages in high seas RCN sales. The concern is promoted by Mr. M A Anzar, who has over three decades of experience in processing and marketing of cashew kernels. He is also one of the directors of Cashew Export Promotion Council of India (CEPCI). The company currently does its procurement of raw cashew nuts from Africa and Indonesia. High quality raw nuts are also procured from Kerala and Karnataka. The processed nuts are then exported to USA, Middle East and Singapore. The firm's registered office is located in Kilikolloor, Kollam and their factory, with an installed capacity of 1,400 MT RCNs, is located in Kuttichira, at a distance of 5 Kms from the office. ADVANCE STEEL: ICRA Suspends B- Rating on INR6cr LT Loan -------------------------------------------------------- ICRA has suspended the [ICRA]B- rating assigned to the INR6.00 crore long term working capital facilities and the [ICRA]A4 rating assigned to the INR4.00 crore short term non-fund based bank facilities of Advance Steel & Tube Mills. The suspension follows ICRA's inability to carry out a rating surveillance in the absence of the requisite information from the company. Established in 2001, ASTM is a part of the Purohit Group. The firm is managed by Mr. Rakesh Purohit and Mr. Mukesh Purohit. The firm is engaged in the business of manufacturing stainless steel seamless and welded pipes and tubes. The firm has manufacturing units located in Vadodara (Gujarat) with a total capacity of 6,000 mtpa, inclusive of fabrication works. ARUPPUKOTTAI SHRI: ICRA Reaffirms 'B' Rating on INR20cr Loan ------------------------------------------------------------ ICRA has reaffirmed the long-term rating of [ICRA]B outstanding on the INR4.86 crore (revised from INR5.32 crore) term loan facilities, the INR20.00 crore fund based facilities and the INR0.11 crore (revised from INR12.65 crore) proposed facilities of Aruppukottai Shri Ramalinga Spinners Private Limited. ICRA has also reaffirmed the short-term rating of [ICRA]A4 outstanding on the INR1.84 crore non-fund based facilities and has assigned a short- term rating of [ICRA]A4 for the INR13.00 crore fund based facilities of the company. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term-Term Loans 4.86 [ICRA]B/reaffirmed Long-term-Fund based facilities 20.00 [ICRA]B/reaffirmed Long-term-Unallocated 0.11 [ICRA]B/reaffirmed Short-term-Fund based facilities 13.00 [ICRA]A4/assigned Short-term-Non-fund based facilities 1.84 [ICRA]A4/reaffirmed The ratings reaffirmation factors in the decline in operating income by ~14.8% in FY2016 on account of sluggish demand for yarn leading to a decline in volumes coupled with lower realization for yarn during the period. Further, the operating margin continued to remain suppressed leading to losses at the net level for the second consecutive year in FY2016. While the company would benefit from the significant amount of low cost inventory held as on March 31, 2016 following the increase in cotton and yarn prices during the first half of FY2017, the margin would come under pressure during H2, FY2017 due to low contribution margin with cotton prices ruling high on account of tight availability amidst tepid yarn demand. The ratings remain constrained by the weak financial profile of the company characterized by highly leveraged capital structure and inadequate debt protection metrics. Further, the company's scale of operations remains moderate and its presence in a highly fragmented industry characterized by intense competition restricts the company's pricing flexibility thereby exposing the margins to volatility in cotton and yarn prices. Nonetheless, the ratings continue to favorably factor in the significant experience of the promoters in the spinning industry and the continuous financial support extended by the group company, Shri Ramalinga Mills Limited (rated [ICRA]BB (stable)/[ICRA]A4+). Aruppukottai Shri Ramalinga Spinners Private Limited was incorporated as a private limited company in June 1999 with an object of establishing spinning and textile mills. ASRSPL is one of the sister concerns of Shri Ramalinga Mills Limited. The Company commenced its production in November 2003 and currently operates as a cotton spinning unit in Aruppukottai, Tamil Nadu with an installed capacity of 68,016 spindles. Recent Results ASRSPL reported a net loss of INR1.5 crore on an operating income of INR77.1 crore for the financial year 2015-16 against a net loss of INR1.4 crore on an operating income of INR90.5 crore for the financial year 2014-15. BABA HEALTHCARE: Ind-Ra Hikes Long term Issuer Rating to 'IND BB' ----------------------------------------------------------------- India Ratings and Research (Ind-Ra) has upgraded Baba Healthcare Private Limited's Long-Term Issuer Rating to 'IND BB' from 'IND BB-'. The Outlook is Stable. The agency has also upgraded the Long-term rating on BHPL's INR330 million fund-based limits (increased from INR150 million) to 'IND BB'/Stable from 'IND BB- '/Stable and affirmed the Short-term rating at 'IND A4+'. KEY RATING DRIVERS The upgrade reflects BHPL's improved scale of operations and credit metrics. In FY16 its revenue rose to INR1,127.62 million from INR695.68 million in FY15 on account of rising sales. Its net leverage (total Ind-Ra adjusted net debt/operating EBITDAR) improved to 3.04x in FY16 (FY15: 4.59x) while net interest coverage (operating EBITDA/net interest expense) improved to 1.53x (1.50x). The improvement in credit metrics was due to improved absolute EBITDA. The ratings factor in BHPL's comfortable liquidity profile as evident from its average working capital utilisation of around 67.89% during the 12 months ended September 2016. The ratings are supported by the company's strong relationships with customers and suppliers. The ratings reflect the company's operating EBITDA margins of 3.08% in FY16 (FY15: 3.06%); margins remained moderate on account of decrease in the administrative expenses of the company. RATING SENSITIVITIES Positive: Improved profitability leading to improvement in the overall credit metrics could be positive for the ratings. Negative: Any fall in profitability leading to deterioration in the overall credit metrics could be negative for the ratings. COMPANY PROFILE BHPL was incorporated in June 2009 by Dinesh Aggrawal. It is a distributor for Patanjali Ayurved Limited BARAKA OVERSEAS: ICRA Reaffirms B+ Rating on INR10cr Credit Loan ---------------------------------------------------------------- ICRA has reaffirmed the long term rating of [ICRA]B+ assigned to the INR18.00 crore long term fund based facilities of Baraka Overseas Traders. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Packing Credit Loan 10.00 [ICRA]B+/reaffirmed Foreign Documentary Bills Purchase 8.00 [ICRA]B+/reaffirmed The reaffirmation of the rating takes into account the high working capital intensity of the firm on account of high debtors and inventory days leading to stretched cash flows and increase in gearing level during FY2016 end on account of withdrawals by one of the partners. The rating is also constrained by client concentration risks, with about 85% of the revenue dependent on the top five customers. However, the risk is mitigated to an extent on account of long standing relationship with the clients. ICRA also notes the inherent risks present in the seafood industry such as susceptibility to diseases, climate changes and government regulations. The rating reaffirmation, however, continues to derive comfort from the long track record of the promoters in the sea food processing business for more than three decades. The rating continues to favorably factor in the proximity of the firm's processing plant to west coast ensuring adequate supply of sea food with low delivery time and transportation cost. The rating also positively factors in the healthy growth in operating income by 20% during FY2016 on account of orders received from newly acquired customers, and improvement in margins owing to better price realization on sales made to the new customers. Going forward, the company's ability to scale up its operations while improving its margins and optimizing the working capital requirements would remain the key rating sensitivities. Baraka Overseas Traders, established in the year 1979, is engaged in the export of sea foods. The firm procures raw material (raw fish) from the fishermen through agents, does cleaning, processing and packaging and then exports it to different countries such as USA, UK, France, Mauritius and Germany, among others. The firm's plant is located in Ullal in Mangalore district of Karnataka with an installed capacity of 300 tons per day. The firm employs around 50 workers on permanent basis and 150 workers on temporary basis. The major varieties of seafood exported by the firm include Shrimp, Mackerel, King Fish and Ribbon Fish among others. Recent Results The firm reported an operating income of INR47.09 crore and a net profit of INR1.17 crore for the financial year 2015-16 as against an operating income of INR39.08 crore and a net profit of INR0.13 crore for the financial year 2014-15. BAVA MINES: ICRA Suspends 'D' Rating on INR8cr Loan --------------------------------------------------- ICRA has suspended the rating of [ICRA]D assigned to the INR8.00 crore fund based facilities, and to the INR2.00 crore non fund based facilities of Bava Mines and Minerals. The suspension follows ICRA's inability to carry out a rating surveillance in the absence of the requisite information from the company. BHADRA INTERNATIONAL: ICRA Rates INR304.53cr Term Loan at 'D' ------------------------------------------------------------- ICRA has assigned a long-term rating of [ICRA]D to the INR304.53 crore term loans and INR30.00 crore long-term fund based working capital facilities of Bhadra International (India) Private Limited. ICRA has also assigned a short term rating of [ICRA]D to the INR78.00 crore short-term non fund based working capital facilities of the company. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Term Loans 304.53 [ICRA]D assigned Long-term Fund-Based Working Capital Facilities 30.00 [ICRA]D assigned Short-term Non-Fund Based Working Capital Facilities 78.00 [ICRA]D assigned The assigned ratings reflect the delay in debt servicing by Bhadra International towards interest and principal repayments on outstanding term loans due to stretched liquidity. Having won the license to operate as the sole third party agency (other than the Airport operator and Air India) at seven airport locations, the company made sizeable debt-funded investments in anticipation of healthy business growth. However, the impasse on the implementation of the policy has resulted in weaker-than-expected business performance, thereby impacting the financial health of the company. Bhadra International's profitability indicators and cash accruals remain weak due to high interest costs on outstanding debt, high fixed operating overheads, large royalty commitments to AAI and low capacity utilization rates. Low profit coupled with an eroded net worth and significant debt (availed in the past for funding investments) continues to weigh on the company's financial profile. ICRA takes note of the company's exposure to regulatory risks given the impasse on the implementation of the erstwhile ground handling policy, resulting in competition from non-entitled players and thereby constraining the company's ability to scale up operations and also restricting its pricing power. However, the business profile of the company derives strength from its presence in two of the top five busiest airports (Kolkata and Chennai) in India; reputed client base comprising leading international airlines; strong infrastructure and state- of-the-art equipment which has supported the healthy growth in operating revenues over the last three years, despite delay in implementation of the policy. Going forward, conversion of outstanding term loans to foreign currency term loans will support savings on interest cost and provide a natural hedge to the company given that over 90% of its revenues are from international clients. The ability of the company to regularize delays in debt servicing and improve its cash flows, with higher operating leverage, in line with further scale up in operations will remain the key rating drivers. While ICRA acknowledges the suit filed by the company against AAI for losses caused due to failure to implement the policy, the timely and favorable conclusion of arbitrage proceedings on the same will remain a rating sensitivity. Bhadra International (India) Private Limited is promoted by Mr. Prem Bajaj who holds 62.5% of the total equity of the company while the remaining is held by GPC Mauritius IX LLC. Incorporated in 2000, Bhadra International provides ground handling services, ramp services and allied services at airports across India. The company entered into a technical collaboration with Novia International Consulting ApS (Denmark) in 2007 and was awarded concession from Airport Authority of India (AAI) to provide comprehensive ground handling services at seven airports including, Chennai, Trichy, Coimbatore, Kolkata, Calicut, Trivandrum and Mangalore. BRAHMANI DEVELOPERS: Ind-Ra Assigns 'IND BB+' LT Issuer Rating -------------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned Brahmani Developers Private Limited a Long-Term Issuer Rating of 'IND BB+'. The Outlook is Stable. KEY RATING DRIVERS The ratings reflect BDPL's low revenue base and moderate credit metrics. In FY16, revenue was INR211 million (FY15: INR230 million) with net leverage (Ind-Ra adjusted net debt/operating EBITDAR) of 3.1x (3.5x) and interest coverage (operating EBITDA/gross interest expense) of 2.7x (2.9x). BDPL's liquidity profile remains moderate with its fund-based facilities being utilised at an average of 95% over the 12 months ended September 2016. The ratings remain constrained by BDPL's regional concentration, as more than 90% of its contracts are executed in Odisha. The ratings, however, are supported by BDPL's outstanding order book of INR1,810.06 million (8.57x of FY16 revenue) as at end- September 2016. The ratings also benefit from its founders' experience of over two decades in the civil construction and real estate business. RATING SENSITIVITIES Positive: An improvement in the scale of operations along with overall credit metrics could be positive for the ratings. Negative: Further deterioration in the credit metrics could be negative for the ratings. COMPANY PROFILE Rourkela (Odisha)-based BDPL was incorporated in 2007. The company executes civil construction contracts for various public and private sector parties and is also engaged in the real estate (residential and commercial) development business. The company is promoted by Mr. Ramesh Kumar Agarwal, Mr. Binay Kumar Giri and Mrs. Alka Kadmawala. BDPL's ratings: -- Long-Term Issuer Rating: assigned 'IND BB+'/Stable -- INR45 million fund-based working capital limits: assigned 'IND BB+'/Stable -- INR25 million non-fund-based working capital limits: assigned 'IND A4+' D. K. ELECTRICAL: Weak Financial Strength Cues ICRA SP3D Grading ---------------------------------------------------------------- ICRA has assigned 'SP3D' grading to D. K. Electrical Industries. The grading indicates 'Moderate Performance Capability and Weak Financial Strength' of the channel partner to undertake solar projects. The grading is valid for a period of two years from Oct. 24, 2016, after which it will be kept under surveillance. Grading Drivers Strengths * Technically sound promoter with relevant experience in running business * Healthy order book position with projects of 198kW in pipeline * Positive feedback from customers, suppliers and banker. Risk Factors * Relatively new player in the solar domain - ability to scale up its operations and achieve operational efficiency remains to be seen * Large number of unorganized players indicating high level of competition may lead to pressure on margins. * Low financial flexibility: Continuous drawings have limited the firm's tangible net worth at INR1.25 crore as on March 2016. However comfort maybe drawn from the healthy personal net worth of the partners * Low profitability as reflected in net profit margin of 0.91% in FY2016 * Weak coverage indicators with NCA/adjusted debt at 2%, and interest coverage of 0.95 times as on March 2016 Fact Sheet Year of establishment 1983 (registered as partnership in 2004) Registered Office Address 132 Ganjipura Jabalpur - 482 002, Madhya Pradesh Managing partner Mr. Dinesh Kumar Gupta Dinesh Enterprises and DK Electrical Industries are partnership firms, and form a part of the DK Group. D. K. Electrical Industries, established in 1983, and subsequently registered as a partnership firm in 2004, was promoted by Mr. Dinesh Kumar Gupta and Mrs. Shail Agrawal. Since inception, the firm is engaged in the business of manufacturing and trading of low tension power cables, conductors, and other telecom and electrical components. The firm was promoted by Mr. Dinesh Kumar Gupta, Mechanical Engineer by qualification, having a relevant experience of ~30 years. In FY2014, the firm has ventured into solar business and has executed up to 159kW of solar projects since then, and has projects of 198kW in pipeline. SI Related Business - Moderate Performance Capability Promoter Track Record: The firm was promoted by Mr. Dinesh Kumar Gupta, Mechanical Engineer by profession having a relevant experience of ~30 years. His prior strong experience has resulted in maintaining good relations with reputed customers including Madhya Pradesh State Electricity Board (MPSEB), Maharashtra State Electricity Board (MSEB) etc. Technical competence and adequacy of manpower: The firm is relatively new in the solar domain; however the group has an extensive experience of 30 years in the power and telecom industry. At a consolidated level, the group has commissioned off-grid solar projects of 357 kW in the past, and has ongoing on-grid projects of 291kW. The firm, at present, has a modest scale of operations with 81 permanent employees handling areas of administration, engineering, operation and management. The employee base for the company is adequate for the size of operations for the firm. The group has an employee base of ~100. Quality of suppliers and tie ups: The key materials required for the process includes solar panels, power conditioning unit (PCU), batteries, and other consumables which are procured from reputed suppliers such as Zodiac Energy Private Limited, Thrive Solar Energy Private Limited etc. Customer and O&M Network: Till now, the firm has executed off- grid roof top solar projects; however has ongoing on-grid projects which are in advanced stage of competition. As indicated by the management, the group is the first to commission an on- grid residential solar project in Jabalpur. The operations and maintenance is for a period of five years from the date of commissioning. DINESH ENTERPRISES: Weak Financial Strength Cues ICRA SP3D Grade ---------------------------------------------------------------- ICRA has assigned 'SP3D' grading to Dinesh Enterprises. The grading indicates 'Moderate Performance Capability and Weak Financial Strength' of the channel partner to undertake solar projects. The grading is valid for a period of two years from October 24, 2016, after which it will be kept under surveillance. Grading Drivers Strengths * Technically sound promoter with relevant experience in running business * Healthy order book position with projects of 198kW in pipeline * Positive feedback from customers, suppliers and banker Risk Factors * Relatively new player in the solar domain- ability to scale up its operations and achieve operational efficiency remains to be seen * Large number of unorganized players indicating high level of competition may lead to pressure on margins * Low financial flexibility: Continuous drawings have limited the firm's tangible net worth at INR3.15 crore as on March 2016. However comfort maybe drawn from the healthy personal net worth of the partners * Low profitability as reflected in net profit margin of 1.04% in FY2016 * Weak coverage indicators with NCA/Total debt at 3%, and interest coverage of 1.09 times as on March 2016 Fact Sheet Year of establishment 1981 (registered as partnership in 2010) Registered Office Address New Shed 1, Industrial Area, Richhai Jabalpur - 482 002, Madhya Pradesh Managing partner Ms. Ranjana Gupta Dinesh Enterprises and DK Electrical Industries are partnership firms, and form a part of the DK Group. Dinesh Enterprises established in 1981, and subsequently registered as a partnership firm in 2010. The current partners are Ms. Ranjana Gupta and Ms. Tanesha Gupta. Since inception, the firm is engaged in the business of manufacturing of low tension power cables, self supporting drop wires, LT distribution boxes, galvanized tower components etc. The firm mainly caters to the power and telecom industry. Over the years, the firm has catered to reputed customers including Madhya Pradesh State Electricity Board (MPSEB), Maharashtra State Electricity Board (MSEB) etc. In FY2014, the firm has ventured into solar business and has executed upto 98kW of off-grid solar projects since then, and has on grid projects of 193kW in pipeline. SI Related Business - Moderate Performance Capability Promoter Track Record: Ms. Tanesha Gupta is a second generation entrepreneur. The group was promoted by Mr. Dinesh Kumar Gupta, Mechanical Engineer by profession having a relevant experience of ~30 years. His prior strong experience has resulted in maintaining good relations with reputed customers including Madhya Pradesh State Electricity Board (MPSEB), Maharashtra State Electricity Board (MSEB) etc. Technical competence and adequacy of manpower: The firm is relatively new in the solar domain; however the group has an extensive experience of 30 years in the power industry. At a consolidated level, the group has commissioned off-grid solar projects of 357 kW in the past, and has ongoing on-grid projects of 291kW. The company at present has a modest scale of operations with 20 permanent employees handling areas of administration, engineering, and operations. The employee base for the company is adequate for the size of operations for the firm. The group has an employee base of ~100. Quality of suppliers and tie ups: The key materials required for the process includes solar panels, power conditioning unit (PCU), batteries, and other consumables which are procured from reputed suppliers such as Zodiac Energy Private Limited, Thrive Solar Energy Private Limited etc. Customer and O&M Network: Till now, the firm has executed off- grid roof top solar projects; however has ongoing on-grid projects which are in advanced stage of competition. As indicated by the management, the group is the first to commission an on- grid residential solar project in Jabalpur. The operations and maintenance is for a period of five years from the date of commissioning. DOLL CERAMIC: ICRA Raises Rating on INR3.06cr Term Loan to B ------------------------------------------------------------ ICRA has upgraded the long-term rating to [ICRA]B from [ICRA]B- to the INR3.06 crore (reduced from INR4.23 crore) term loan facility, INR3.00 crore cash credit facility and INR2.94 crore unallocated limits of Doll Ceramic Private Limited. ICRA has also reaffirmed the short-term rating of [ICRA]A4 to the INR1.00 crore non-fund based facilities of DCPL. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Term Loan 3.06 [ICRA]B; upgraded from [ICRA]B- Cash Credit 3.00 [ICRA]B; upgraded from [ICRA]B- Unallocated Limits 2.94 [ICRA]B; upgraded from [ICRA]B- Bank Guarantee 1.00 [ICRA]A4; reaffirmed The rating upgrade primarily factors in the improvement in the operating profitability, supported by the decline in power and fuel cost and improvement in the capital structure. The ratings also favorably take into account the extensive experience of the promoters in the ceramic industry and the favorable location of the plant ensuring easy availability of quality raw material at reasonable prices. The ratings are, however, constrained by DCPL's relatively small scale of operations and its weak financial risk profile characterized by low net margins, adverse capital structure and moderate debt protection metrics. The rating is further constrained by the vulnerability of the company's profitability to cyclicality inherent in the real estate industry and to the adverse fluctuations in raw material prices and other input costs. ICRA also takes into account the highly competitive domestic ceramic industry with presence of large, established and organised tile manufacturers as well as many unorganised players, resulting in limited pricing flexibility. Incorporated in April 2013, Doll Ceramic Private Limited (DCPL) manufactures ceramic wall tiles of two sizes, 10" X 15" and 12" X 18". The manufacturing facility is located at Morbi in Gujarat and has an installed capacity of manufacturing ~7,800 sqr. mtr. per day. DCPL started its commercial production in November 2013 and is currently managed by four directors namely Mr. Ankit Bavarva, Mr. Manoj Panchotiya, Mr. Dilip Kavar and Mr. Durlabhji Chhaniyara along with other shareholders. The promoters of the company have vast experience in the ceramic industry by virtue of their association with other companies engaged in manufacturing and trading of tiles. Recent Results During FY2016, DCPL reported an operating income of INR12.29 crore and profit after tax of INR0.10 crore as against operating income of INR12.01 crore and net losses of INR3.76 crore during FY2015. EYE-Q VISION: ICRA Reaffirms B+ Rating on INR3cr NCD Programme -------------------------------------------------------------- ICRA has reaffirmed the long-term rating of [ICRA]B+ assigned to the USD 3-million, non-convertible debenture (NCD) programme of Eye-Q Vision Private Limited. Further, ICRA has also assigned a fresh long-term rating of [ICRA]B+ to the proposed USD 1-million, non-convertible debenture (NCD) programme of the company. Amount Facilities (INR crore) Ratings ---------- ----------- ------- NCD Programme 3.0 [ICRA]B+; reaffirmed NCD Programme 1.0 [ICRA]B+; assigned Instruments with [ICRA]B rating are considered to have high risk of default regarding timely servicing of financial obligations. The modifiers {"+"(plus)/"-"(minus)} used with the rating symbols, reflect the comparative standing within the rating category. The rating reaffirmation takes into account Eye-Q's continued sub-optimal operating performance, as reflected in the operating losses being reported by the company primarily in light of high corporate overheads and initial gestation period of the new centres in its portfolio, though the centre-level profitability of mature centres has been improving year-on-year. An improvement in scale of operations supported by increased number of centres, together with cost-control initiatives and amortisation of fixed expenses over a larger revenue base resulted in a decline in operating losses of the company in FY2016. The improvement, however, has been slower than expected; and the company remained reliant on debt refinancing and private equity proceeds (pending deployment)for funding its cash losses. In light of this, steps taken by the company to maintain adequate liquidity in the system by issuing NCDs, while keeping private equity proceeds partially un-deployed, provide comfort. Although the company has moderated its incremental centre- addition plans for the next 3-5 years, its ability to rationalize corporate overheads, which were planned to support a larger number of centres, will be a critical determinant of its profitability going forward. Further, continued expansion coupled with short-debt maturity profile and high repayment obligations are expected to continue to put pressure on the company's cash flows. Stretched cash flows coupled with continuing cash losses from operations is likely to keep the company reliant on debt refinancing for meeting its repayment obligations. During FY2016 to H1'FY2017, the company opened three new centres in tier-II and tier-III cities of Maharashtra, and four new centres in Haryana and Gujarat, thus continuing with its strategy of focusing on lower tier cities in Northern and Western regions of the country where it faces limited competition from other organised players. However, the company has to compete with these players to attract skilled manpower and retain talent at a reasonable cost; the success of which will be an important determinant of its operating performance going forward. The company has also set up an overseas centre in a 50:50 joint venture. Considering the high capital as well as the operating expenditure of the venture and the lack of operational track record in international markets, the company's ability to profitably operate the centre, remains to be seen. Nevertheless, the rating continues to derive comfort from Eye-Q's experienced founders, who have established track record of operations in the domestic eye-care sector; and its strong investor base that has demonstrated commitment by participating in its multiple rounds of funding over the years. The ratings also derive comfort from the improving profitability margins of mature hospitals in company's portfolio, which together with initiatives taken to optimize the overall cost structure, are expected to improve the company's return metrics going forward. In ICRA's view, the company's ability to achieve a break-even at cash profit level and report consistent improvement in operating profit margins despite the capex incurred by new centre launches (as planned), would be the key rating sensitivity. Further, the company's ability to mobilize longer-tenor debt funding with back-ended repayments for refinancing its existing debt obligations in order to reduce the interim pressure on cash flows and to provide timely opportunity for exit to the investors as agreed, would also be a critical determinant of its credit profile going forward. Incorporated in 2006, by Mr. Ajay Sharma and Mr. Rajat Goel, Eye- Q Vision Private Limited owns and operates a chain of 37 super- specialty eye-care hospitals and four vision centres in India and employs over 65+ ophthalmologists. Hospitals operated by Eye-Q provide specialty services in cataract, cornea and refractive, retina, orbit and oculoplasty, glaucoma, optical and medicines among others. Geographically, the company has presence in 28 cities in North and West India (Delhi NCR, Haryana, UP, Uttarakhand, Gujarat and Maharashtra). While 33 centres are located in North India, the remaining 8 centres are located in West India (Gujarat and Maharashtra). The company aims at providing high-quality eye-care services at affordable prices. As a business strategy, it is largely present in tier-III and IV cities that have limited to no access to quality eye-care services. Over the years, the company has received multiple rounds of funding by reputed Private Equity investors such as Song Fund (sponsored by Soros Economic Development Fund, Google & the Omidyar Network), Helion Ventures, Nexus and International Finance Corporation. Recent Results Eye-Q reported an operating income of INR72.2 crore and a net loss of INR19.2 crore in FY2016 as compared to an operating income of INR65.9 crore and a net loss of INR22.2 crore in FY2015. FLEXPACK FIBC: CARE Assigns 'B' Rating to INR9cr Long Term Loan --------------------------------------------------------------- CARE assigns 'CARE B' rating to the bank facilities of Flexpack FIBC. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank Facilities 9 CARE B Assigned Rating Rationale The rating assigned to the bank facilities of Flexpack FIBC (FPF) is constrained on account of its proprietorship nature of constitution, implementation and stabilization risk associated with ongoing debt funded capex, susceptibility of operating margins to volatility in raw material prices and high bargaining power of suppliers coupled with foreign exchange fluctuation risk. The rating is further constrained on account of its presence in the highly competitive and fragmented industry. The above constraints, however, outweigh the comfort derived from the experienced proprietor. The ability of FPF to successfully commission its ongoing manufacturing plant within specified timeline and cost parameters, achieving envisaged level of sales and profitability in light of competition from other players and managing raw material price fluctuation risk would remain the key rating sensitivities. Silvassa-based FPF is a proprietorship firm, established in 2016 by the proprietor Mr. Vinayak Sheshrao Sanap. The entity is currently undertaking a greenfield project with proposed installed capacity of 1,800 MT of plastic tapes per annum to manufacture Polypropylene (PP)/ High-density polyethylene (HDPE) yarn, container liners, tarpaulin sheets, plastic woven sacks, Flexible Intermediate Bulk Containers (FIBC's) like bulk bags and jumbo bags which are used as plastic packaging products for transportation and storage of goods as well as utilized for water-proofing purposes. The products manufactured by FPF would find application primarily in industries like construction, agriculture and food-packaging. The total project cost is estimated at INR12.98 crore (including margin for working capital of INR0.86 crore) with a proposed debt-equity mix of 2.20 times. While, FPF will purchase PP/HDPE granules from local players or import them, it will export majority of the finished goods to U.S.A and various European and Latin American countries via dealers or direct sales agents under the brand name of "Flexpack". Also, its group entity Flexpack, established in October 2015 is in a similar line of business. GAJANAND FOODS: Ind-Ra Assigns 'IND B+' Long term Issuer Rating --------------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned Gajanand Foods Pvt. Ltd a Long-Term Issuer Rating of 'IND B+'. The Outlook is Stable. KEY RATING DRIVERS The ratings reflect GFPL's small scale of operations and weak credit metrics. Revenue was INR255 million in FY16 (FY15: INR209 million). EBITDA interest coverage (operating EBITDA/gross interest expense) was 1.5x in FY16 (FY15: 0.8x) and net financial leverage (total adjusted net debt/operating EBITDA) was 7.1x (12.2x). EBITDA margin improved to 10.1% in FY16 (FY15: 5.5%) on account of a drop in the advertising and marketing expenses. The company has already booked revenue of INR147.2 million in 6MFY17. The ratings are supported by the company's comfortable liquidity position with the fund-based facilities being utilised at an average of 65.9% over the 12 months ended September 2016. The ratings derive support from the promoter's over a decade long experience in processing spices. RATING SENSITIVITIES Positive: Substantial growth in the revenue and profitability leading to a sustained improvement in the overall credit metrics will be positive for the ratings. Negative: A substantial decline in profitability resulting in sustained deterioration in the company's credit profile, will lead to a negative for the ratings. COMPANY PROFILE GFPL, was established by Mr. Natvarbhai Patel and Mr. Vijaybhai Patel, in 1982. GFPL was incorporated as a private limited company in 1995. GFPL is engaged in manufacturing spices such as chilli, turmeric, premium garam masala, and instant food products. GFPL's ratings: -- Long Term Issuer Rating: assigned 'IND B+' /Stable -- INR52.46 million long term loan: assigned 'IND B+'/ Stable -- INR20.00 million fund-based facilities: assigned 'IND B+'/Stable/'IND A4' GANGA DIAGNOSTIC: ICRA Ups Rating on INR13.99cr Term Loan to B+ --------------------------------------------------------------- ICRA has revised upwards the long-term rating assigned to the INR13.99-crore term-loan facility of Ganga Diagnostic and Medical Research Centre Private Limited from [ICRA]B to [ICRA]B+. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Term Loan 13.99 [ICRA]B+/ Upgraded The upward revision of rating takes into account the consistent growth in the top-line and operating profits of the company witnessed over the past few years. The revision also derives comfort from the strong profile of the promoters as well as demonstrated funding support from the group, and comprehensive range of diagnostic services including radiology, pathology, microbiology and cardiology being provided at the centre. The rating, however, continues to be constrained by GDMRCPL's small scale of current operations and single diagnostic centre, which lead to stiff competition arising out of low-cost laboratories within hospitals as well as other diagnostic centres in the city. Besides, the company has a weak financial profile characterized by a highly leveraged capital structure and subdued level of coverage indicators. The rating continues to be impacted by the tight liquidity profile of the company. ICRA also notes that GDMRCPL has significant debt repayment obligations, which are likely to keep its cash flows under pressure in the near to medium term. In ICRA's opinion, the ability of the company to scale up its operations and generate adequate cash accruals from the business to service its debt obligations, while improving its capital structure would remain key rating sensitivities, going forward. Incorporated in 2010, Ganga Diagnostic and Medical Research Centre Private Limited (GDMRCPL) provide radiology and pathology diagnostic services in Raipur. The diagnostic service centre started its commercial operations in 2012. Mr. Subhash Agarwal and Mr. Ashok Agarwal, Raipur-based promoters of the company, are also part of the Vandana Group of Companies, which is involved in the steel-manufacturing business. Recent Results During FY2016, GDMRCPL reported a net profit of INR0.73 crore on an operating income (OI) of INR9.11 crore against a net loss of INR1.06 crore and OI of INR7.27 crore during FY2015. GMR RAJAHMUNDRY: CARE Reaffirms 'D' Rating on INR2,419.41cr Loan ---------------------------------------------------------------- CARE assigns/reaffirms the rating to the and facilities of GMR Rajahmundry Energy Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term bank facilities 2,419.41 CARE D Reaffirmed Short-term bank facilities Non fund based 138.02 CARE D Assigned Rating Rationale The rating assigned to the bank facilities of GMR Rajahmundry Energy Limited takes into account the ongoing delays in servicing of its debt obligations. Incorporated in November 2009, GMR Rajahmundry Energy Limited is a Special Purpose Vehicle (SPV) promoted by GMR Energy Limited [GEL, rated CARE BBB-(SO)] to set up a 768 MW (2x384 MW) gas- based Combined Cycle Power Plant (CCPP) at Vemagiri, Dist. East Godavari, Andhra Pradesh. GREL has been set up adjacent to the existing 389 MWgasbased CCPP of GMR Vemagiri Power Generation Limited, the project achieved Commercial Operations Date (COD) on October 22, 2015. Due to the delay in project commissioning, less gas available (under e-RLCNG scheme) no long term Fuel Supply Agreement (FSA) and long term Power Purchase Agreement (PPA) in place, the plant operated at sub-optimal level Plant Load Factor (PLF) which led to deterioration in financial risk profile and impacted cash accruals which were not adequate to service the debt obligations. The lenders decided to invoke Strategic Debt Restucturing (SDR) and was approved by all the lenders in May 2016. As per Q1FY17 (prov) (period from April 1 to June 30) the lenders held 55% of equity in GREL and the balance was held by GEL. The lenders also undertook the flexible restructuring (under 5/25 scheme of RBI) to increase the tenor of the debt. The flexible restricting has been approved by majority of lenders and approval from pending lenders are under process and at an advanced stage. GEL is a subsidiary of GMR Infrastructure Limited (GIL, rated CARE BBB-/A3) which is the holding company for all Infrastructure activities of GMR group. In FY16, the company reported a total operating income of INR384.92 crore and reported loss at net level of INR-234.24 crore. As per Q1FY17 (prov) the company reported total operating income of INR89.01 crore and loss at net level of INR134.14 crore. HUNSUR PLYWOOD: ICRA Reaffirms B+ Rating on INR5.25cr LT Loan ------------------------------------------------------------- ICRA has reaffirmed the long term rating of [ICRA]B+ assigned to the INR5.25 crore fund based cash credit limits and INR0.31 crore term loan of Hunsur Plywood Works Private Limited. ICRA has also reaffirmed the short term rating of [ICRA]A4 assigned to the INR9.50 crore non fund based limits. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term-Fund Based (CC) 5.25 [ICRA]B+; reaffirmed Long Term-Fund Based (TL) 0.31 [ICRA]B+; reaffirmed Short Term-Non Fund Based (LC) 9.50 [ICRA]A4; reaffirmed The reaffirmation of the ratings take into account the HPWPL's modest scale of operations restricting operational and financial flexibility, with further decline in turnover over last two years owing to slowdown in demand of timber. The ratings also factor in the weak financial profile as reflected by thin profitability and moderate return and coverage indicators; the high working capital intensity of operations on account of high inventory holding and the increased dependence on creditor funding resulting in high TOL/TNW of 4.3 times as on March 31, 2016. The profitability continues to remain exposed to fluctuations in raw material prices as well as currency exchange rates as majority of the raw materials are imported. The ratings also consider the highly competitive and fragmented industry which limits the bargaining power of the company. The ratings, however, take comfort from the long standing experience of the promoters in the timber industry and diversified client base which mitigates counter party risk to an extent and lends stability to revenues. The ratings also positively factor in the stable demand outlook for timber given the demand from furniture, real estate and infrastructure sectors. Going forward, the ability of the firm to improve its scale of operations and profitability while efficiently managing working capital requirements would remain the key credit monitorables. HPWL is located at Hunsur, Karnataka in an area spread over 26 acres of land, with an installed capacity of 1.0 msft per annum. The company is promoted by Mr. Moiz S Vagh, and his family members and is engaged in the manufacturing of Hardwood Plywood, Block Boards, Flush Doors and Decorative Veneers. The company's products are marketed under the brand "Hunsply". Recent Results The company reported a net profit of INR0.3 crore on an operating income of INR35.2 crore during FY2016, as against a net profit of INR0.6 crore on an operating income of INR36.5 crore during FY2015. INDERA ETHNIC: ICRA Lowers Rating on INR4.97cr Loan to 'D' ---------------------------------------------------------- ICRA has revised downwards the long term rating assigned to the INR4.97 crore1 cash credit, INR0.42 crore term loan and INR0.35 crore untied limit of Indera Ethnic & Designs Private Limited from [ICRA]B to [ICRA]D. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based Limit- Cash Credit 4.97 [ICRA]D downgraded Fund Based Limit- Term Loan 0.42 [ICRA]D downgraded Fund Based Limit- Untied Limit 0.35 [ICRA]D downgraded The rating action takes into account the recent delays made by the company in meeting its debt service obligations. Incorporated in 2005, IEDPL is engaged in the apparel retailing business in Rourkela, Odisha. The company's promoters have an experience of around two decades in the apparel retailing business. The company runs three showrooms under the name 'Inderas Lifestyle', offering outfits for men, women and kids along with other accessories. It deals in both branded and non- branded ready-made apparels and also provides tailoring services. MAHAKALI CHANDRAPUR: ICRA Assigns 'C' Rating to INR7cr LT Loan -------------------------------------------------------------- ICRA has assigned long term rating of [ICRA]C to the cash credit facility of INR2.00 crore and term loan facility of INR7.00 crore of Mahakali Chandrapur Polytex Private Limited. ICRA has also assigned [ICRA]C/[ICRA]A4 ratings to the unallocated amount of INR1.00 crore. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-fund-based facility - CC 2.00 [ICRAC; (Assigned) Long-fund-based facility - TL 7.00 [ICRA]C; (Assigned) Unallocated Amount 1.00 [ICRA]C/[ICRA]A4; (Assigned) ICRA takes into account the adverse financial risk profile of the company as reflected by negative networth, net losses as well as weak coverage indicators. The rating further takes into account the lack of track record of company's operation as well as risk associated with stabilization of operations. The ratings also take cognizance of the high working capital intensive nature of MCPL's operations, which has adversely impacted its liquidity position and has led to irregularities in the debt servicing track record in the past. MCPL's high sectoral concentration risk is another concern, since almost the entire revenue is generated by the cement industry which in turn is under pressure due to weak construction and real estate market. The ratings also take into account the highly fragmented nature of the industry, characterized by a large number of players; the limited product differentiation, which in turn leads to intense competition and keeps margins under check; and vulnerability of MCPL's profitability to adverse fluctuations in raw material prices which are subject to volatility in crude oil prices. The rating, however, favorably takes into account the past experience of the promoters in the plastic packaging industry and reputed client profile which minimizes counterparty risks to a large extent. Going forward, ICRA expects the operating income of the company to witness moderate growth, however, the ability of the company to scale up operations, improve profitability and manage input costs given the volatility associated with raw material prices and high competitive intensity, ability to infuse funds in-order to trim debt and improve the capital structure will remain the key rating sensitivities. Mahakali Chandrapur Polytex Pvt. Ltd. was incorporated in 2011 and started its operations from FY 15. The company has its registered office and manufacturing facility in Chandrapur, Maharashtra. The company is mainly engaged in manufacturing of high Density Polyethylene (HDPE)/Poly Propylene (PP) multi colour fabric and woven sacks (non-laminated). The key products include PP Woven sacks, PP Woven Fabric, Industrial woven fabric, PP Woven valve type bags, PP woven gusseted bags. The company has an installed capacity of 3000 MTPA per annum to manufacture HDPE/PP woven fabric. Recent Results: MCPL recorded a net loss of INR0.21 crore on an operating income of INR18.80 crore as per audited numbers of FY 16 and a net loss of INR0.66 crore on an operating income of INR6.61 cr as per provisional numbers of FY 17 (5M). MORAJ BUILDING: ICRA Assigns B+/A4 Rating to INR11cr Term Loan -------------------------------------------------------------- ICRA has assigned a long-term rating of [ICRA]B+ and a short-term rating at [ICRA]A4 to the INR11.00-crore bank facilities of Moraj Building Concepts Private Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund-based limits Term Loans 11.00 [ICRA]B+/[ICRA]A4; Assigned The ratings assigned to Moraj Building Concepts Private Limited are primarily constrained by the relatively high execution and residual regulatory risk of the project, given that a considerable portion of construction is yet to be achieved. ICRA also takes into consideration the relatively high funding risk as a substantial part of the pending project work and the debt servicing are planned to be funded through customer advances, which are contingent on the timing of the bookings and efficiency of collections from the customers while the pace of bookings has been sluggish, given the ongoing slowdown and weak consumer sentiment existing in the real estate industry. The ratings also factor in significant unsold inventory, the exposure of the firm's revenue to the falling property prices, inherent cyclicality in the real estate sector and the competition from other ongoing projects from established developers in the surrounding areas. Nevertheless, the assigned rating, favorably factors in MBCPL's affiliation to an established group, based in Mumbai, with an experienced management, having a long-standing history in the real estate industry. The rating also draws comfort from the clear land title for the project as well as the receipt of key regulatory approvals - mainly plan approval and commencement certificate for all floors of seven buildings which alleviate the regulatory risks to some extent. The rating also draws comfort from the favorable project location near Khopoli, one of the upcoming areas near Mumbai and Navi Mumbai and also in proximity to key industrial areas. Going forward, the firm's ability to execute the project without any cost overruns and achieve timely bookings and collections from the same, would be critical to generate sufficient cash flow to meet the residual project cost and repayment obligations and hence, it remains the key credit rating driver from a credit perspective. Conversely, any significant delays in construction may lead to cost overruns or delays in realization of sales and booking amounts, which could lead to refinancing risks. Established in 1994, Moraj Infratech Private Limited is a part of the Moraj Group of Companies, involved in the real estate development of residential and commercial undertakings. The group has an extensive history in the real estate sector and has executed several residential and commercial projects in Navi Mumbai and Nagpur. Mr. Mohan Gurnani is the key management personnel of the firm. Recent Results The company recorded a profit after tax of INR0.94 crore on an operating income of INR2.85 crore for the year ending March 31, 2016 (Provisional), as against a profit of INR1.30 crore on an operating income of INR11.29 crore for the year ending March 31, 2015. MURUGAN TEXTILES: ICRA Suspends 'B' Rating on INR7cr Loan --------------------------------------------------------- ICRA has suspended the long-term rating of [ICRA]B outstanding on the INR7.00 crore fund based facilities and INR3.00 crore proposed facilities of Murugan Textiles. The suspension follows ICRA's inability to carry out a rating surveillance in the absence of the requisite information from the company. According to its suspension policy, ICRA may suspend any rating outstanding if in its opinion there is insufficient information to assess such rating during the surveillance exercise. MUTHULAXMI SPINNING: ICRA Suspends B/A4 Rating on INR8.61cr Loan ---------------------------------------------------------------- ICRA has suspended the long-term rating of [ICRA]B and short term rating of [ICRA]A4 assigned to the INR8.61 crore bank facilities of Muthulaxmi Spinning Mills Private Limited. The suspension follows ICRA's inability to carry out a rating surveillance in the absence of the requisite information from the Company. NAGPAL EXPORTS: Ind-Ra Assigns 'IND B+' Long term Issuer Rating --------------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned Nagpal Exports a Long-Term Issuer Rating of 'IND B+'. The Outlook is Stable. KEY RATING DRIVERS The ratings reflect NGPE's long track record of operations and weak credit profile. FY16 financials indicate revenue of INR265.79 million, (FY15: INR272.39 million), net leverage (total Ind-Ra adjusted net debt/operating EBITDAR) of 5.45x (4.02x), interest cover (operating EBITDA/gross interest expense) of 1.62x (1.47x) and EBITDA margins of 6.79% (9.36%). The EBITDA margin declined mainly on account of an increase in the raw material prices. The ratings factor in NGPE's tight liquidity position as evident from its 97.81% average utilisation of the working capital limits for the 12 months ended September 2016 coupled with an elongated operating cycle of 144 days during FY16. However, the ratings are supported by the partners' experience of two decades in manufacturing readymade garments. RATING SENSITIVITIES Negative: Deterioration in the working capital cycle will lead to a negative rating action. Positive: A significant improvement in revenue along with an improvement the credit profile will be positive for the ratings. COMPANY PROFILE NGPE was established in 1995 and manufactures hosiery goods for kids and adults. The firm is also engaged in manufacturing various types of yarns such as acrylic yarn and polyester yarn. NGPE is managed by Mr. Bahadur Chand Nagpal, Mr. Gurinder Nagpal, Mr. Satish Nagpal, and Mr. Abi Nagpal. The firm's manufacturing facility is located in Ludhiana, Punjab. NGPE posted revenue of INR152.50m from April 2016 till September 2016. NGPE's ratings: -- Long-Term Issuer Rating: assigned 'IND B+'/Stable -- INR55 million fund-based working capital limits: assigned 'IND B+'/Stable/'IND A4' -- INR10.50 million non fund-based limits: assigned 'IND A4' -- Proposed INR34.50 million fund-based limits: assigned 'Provisional IND B+'/Stable/'Provisional IND A4' NEELKANTH PROPERTIES: ICRA Reaffirms B+ Rating on INR18cr Loan -------------------------------------------------------------- ICRA has re-affirmed the long-term rating of [ICRA]B+ to the INR18.00 crore fund based limits of Neelkanth Properties. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term fund based limits 18.00 [ICRA]B+; Reaffirmed The rating reaffirmation continues to factor in the decade long experience of the partners in residential real estate development and clear land title of the project. The rating also draws comfort from the fact that debt tie up of project is in place. Also, as the project is almost complete with 96% cost incurred as on Aug. 31, 2016, the project is exposed to low execution risk. The rating is, however, constrained by the exposure to market risk with only 30% of the total saleable area sold till August 31, 2016. The project is located at Khopoli, Raigad which is still developing; coupled with the competition from upcoming residential projects in the vicinity, this accentuates the sales risk, impacting the marketability of the project. Further, the constitution of the entity as a partnership firm also renders it susceptible to capital withdrawals by the partners which could adversely impact its credit metrics. The firm is also exposed to the industry related risk of slowdown in the real estate sector and competition from other projects in the vicinity. ICRA notes that the repayment of cash credit facility is scheduled to begin shortly and hence healthy increment in sales and collections from customer's remains critical for timely debt servicing failing which there exists a refinancing risk. Neelkanth Properties, incorporated in November 2010 is a partnership firm promoted with the main objective of undertaking real estate development in and around Navi Mumbai. The company is managed by three of the partners Mr. Hemant Gapatbhai Gaudani, Dinesh Dalpat Bahi Tarapura and Mr. Rameshbhai Rajivbhai Patel who have over a decade long experience in the real estate development. The partners have developed eleven projects in and around Navi Mumbai aggregating to 3.42 lakh sq ft of saleable area. Recent Results Firm reported a profit after tax (PAT) 0.33 crore on an operating income of INR0.45 crore in FY2016 as compared to a PAT of INR0.47 crore on an operating income of INR4.11 crores in FY2015. NOOLI JEWELLERS: ICRA Reaffirms B+ Rating on INR12cr Loan --------------------------------------------------------- ICRA has reaffirmed the long-term rating of [ICRA]B+ assigned to INR12.00 crore fund based limits of Nooli Jewellers. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based Limits 12.00 [ICRA]B+/Reaffirmed The reaffirmation of rating is constrained by the weak capital structure with gearing of 5.11 times as on March 31, 2016 and interest coverage ratio of 1.16 times and Debt/OPBITDA of 8.86 times for FY2016 on account of higher working capital borrowings coupled with thin profitability levels; and stretched liquidity profile of the firm as reflected by high utilization of working capital limits due to higher inventory levels required for the jewellery retailing business. The rating is further constrained by the high competitive intensity owing to fragmented nature of jewellery retailing industry which puts the margins under check; exposure to volatility in gold prices in the absence of formal hedging mechanism; and risks arising from the proprietorship nature of the firm. ICRA also notes the high geographic concentration risk given that the firm runs only one store at Tanuku spread across 1500 sq. ft. The rating however favourably factors in the substantial growth in scale of operations over the past two years with revenues increasing from INR19.91 crore in FY2014 to INR57.66 crore in FY2016 owing to increased sales volume; long track record of the promoters in jewellery retailing; and established position of the firm in Tanuku region. Going forward, the company's ability to improve financial profile and effectively manage working capital requirements would be the key rating drivers from a credit perspective. Nooli Jewellers was formerly known as Nooli Venkatratnam, and was promoted by Mr. Nooli Venkatranam 70 years back. In the year 1979, name of entity changed to Nooli Jewellers. The firm is engaged in manufacturing and trading of gold, silver and stone studded jewellery. The firm's jewellery collection ranges from 22 karat gold jewellery to 18 karat jewellery studded with diamonds, gemstones like rubies, emeralds, sapphires, semi precious stones. NJ sells all forms of jewellery including earrings, necklaces, bangles, rings, anklets etc. The retail show room of the firm is at Tanuku, East Godavari district of Andhra Pradesh spread across 1500 sq. ft. Recent Results As per the provisional results for FY 2016, the company reported profit after tax of INR0.41 crore on turnover of INR57.66 crore as against profit after tax of INR0.37 crore on turnover of INR37.35 crore during FY2015. RSV RICE: ICRA Reaffirms 'B' Rating on INR15cr Term Loan -------------------------------------------------------- ICRA has reaffirmed the long-term rating at [ICRA]B to INR7.50 crore cash credit, INR15.00 crore term loan and INR9.00 crore (enhanced from INR0.50 crore) unallocated limits of RSV Rice Industries. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based Limits- CC 7.50 [ICRA]B reaffirmed Fund Based Limits- Term Loan 15.00 [ICRA]B reaffirmed Unallocated Limits 9.00 [ICRA]B reaffirmed The rating reaffirmation considers the modest scale of operations, constrained liquidity position marked by high working capital intensity, high reliance on debt funding and significant debt repayments. The rating is also constrained by volatility of prices in the export market, high competition in the open market post the reduction of levy percentage from 25% to 0% in October 2015, risks in terms of policy decisions of the Government in terms of Minimum Support Price (MSP) for paddy, export quota, etc., and risks arising from the partnership nature of the firm. The rating, however, favorably factors in the proximity of the proposed milling facility to the major rice growing regions of Telangana and Andhra Pradesh; and the presence of 0.75MW captive power unit, reducing the dependence on state utility for power. The rating also factors in the longstanding experience of the partners in the rice milling industry. Going forward, ability of the firm to improve its scale of operations, margins and accruals with effective management of working capital requirements is the key rating sensitivity. RSV Rice Industries is a partnership firm established in 2015, with the objective of setting up a paddy milling unit to produce non-basmati, raw and boiled rice. The milling unit is located in the Nalgonda district of Telangana. The 57,600 MTPA capacity mill, with a 0.75MW captive power unit and 2000 tonne capacity silos, commenced operations in August 2015. The partners, Ranga Srikar, Ranga Ranzith Kumar and Gouru Rama Murthy, have longstanding experience in the industry through their association with other entities. S.P. AUTOMOBILES: CARE Assigns B+ Rating to INR5cr Long Term Loan ----------------------------------------------------------------- CARE assigns 'CARE B+/CARE A4' ratings assigned to the bank facilities of S.P. Automobiles. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 5 CARE B+ Assigned Short term Bank Facilities 1 CARE A4 Assigned Rating Rationale The ratings assigned to S.P. Automobiles (SPA) are primarily constrained by small scale of operations with low partners' capital base and weak financial risk profile characterized by low profitability margins, leveraged capital structure and weak debt coverage indicators. The ratings are further constrained by high inventory holding period coupled with intense competition in the industry and partnership nature of its constitution. The ratings, however, draw comfort from experienced partners and growing scale of operations. Going forward, the ability of the firm to increase its scale of operations while registering improvement in its profitability margins and capital structure shall be the key rating sensitivities. S.P. Automobiles was established in 1992 as a partnership concern and is currently being managed by Mr. Rajesh Kumar Dubey and Mr. Akhilesh Kumar Dubey sharing profits and losses equally. SPA is an authorized dealer for Hero Motocorp Limited and John Deere vehicles. The firm manages its operations from two showrooms {3S (sale, service, spares) facility} located in Uttar Pradesh. In FY15 (refers to the period April 1 to March 31), the firm achieved a total operating income (TOI) and PAT of INR47.53 crore and INR0.32 crore respectively. Furthermore, in FY16 (refers to the period April 1 to March 31), the firm achieved total sales of INR56.91 crore (as per the provisional results). SADANAND GUPTA: ICRA Suspends 'B' Rating on INR2cr Loan ------------------------------------------------------- ICRA has suspended the long term rating of [ICRA]B assigned to the INR2 crore overdraft facility of M/s. Sadanand Gupta. ICRA has also suspended the short term rating of [ICRA]A4 assigned to the INR6 crore bank guarantee facility of SG. The suspension follows ICRA's inability to carry out a rating surveillance in the absence of the requisite information from the company. SAGARSHREE HOSPITAL: Ind-Ra Assigns 'IND B+' LT Issuer Rating ------------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned Sagarshree Hospital & Research Institute Private Limited a Long-Term Issuer Rating of 'IND B+'. The Outlook is Stable. The agency has also assigned SHRIPL's INR140 million long-term loan limits an 'IND B+' rating with a Stable Outlook. KEY RATING DRIVERS The ratings reflect SHRIPL's nascent stage of the hospital project which is going to be completed by end of March 2017. The estimated cost of the project is INR206.71 million which has been funded through a mixture of debt and equity. The ratings benefit from the locational advantage of the proposed hospital in terms of its proximity to Raipur. The ratings are supported by the company's promoters' experience of close to one and half decade in the health care sector and diversified business. RATING SENSITIVITIES Positive: Timely completion of project and commencement of operations from April 2017 could be positive for the ratings. Negative: Any major delay (beyond April 2017) in the commencement of commercial operations could be negative for the ratings. COMPANY PROFILE SHRIPL was incorporated in 2014 for setting up of multispecialty hospital with 138 bed capacity, and advance machinery equipment to provide better services to patients. Presently the hospital is under completion stage, and commercial operation is expected to start from April 2017. The company is managed by its four directors, Dr. Santosh Kumar Rai, Abhishek Bhargava, Saurabh Singhai and Akash Bajaj. SAKTHI ACCUMULATORS: ICRA Suspends 'B' Rating on INR7cr Loan ------------------------------------------------------------ ICRA has suspended the rating of [ICRA]B assigned to the INR7.00 crore fund based facilities, and rating of [ICRA]A4 assigned to the INR3.60 crore non fund based facilities of Sakthi Accumulators Private Limited. The suspension follows ICRA's inability to carry out a rating surveillance in the absence of the requisite information from the company. SANDEEP RICE: ICRA Reaffirms 'B' Rating on INR10cr LT Loan ---------------------------------------------------------- ICRA has reaffirmed the long term rating of [ICRA]B to the INR10.00 crore long term fund based limits of Sandeep Rice Mills. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term Fund Based Limits 10.00 [ICRA]B; Reaffirmed ICRA's ratings favorably take into account the long standing experience of SRM's promoters, with strong relationships with various customers and suppliers, coupled with proximity of the mill to major rice growing area which results in easy availability of paddy and stable demand outlook given that India is a major consumer (rice being an important staple of the Indian diet) and exporter of rice. However, the ratings continue to be constrained by SRM's declining operating profitability with operating profit margin of 3.58% in FY2016 as against 3.64% in FY2015 on account of decline in realization. The ratings are further constrained by the firm's leveraged capital structure as indicated by gearing level of 8.13 times as on 31st March 2016 due to the firm's large working capital requirements, which have been primarily funded by working capital borrowings and unsecured loans. The low margins coupled with high gearing have resulted in weak coverage indicators as reflected in interest coverage of 1.32 times during FY2016 as against 1.47 times in FY2015. The ratings are also constrained by the high intensity of competition in the rice milling industry and agro climatic risks, which can affect the availability of paddy in adverse weather conditions. ICRA's ratings also factors in the partnership constitution of the firm which exposes it to risks related to capital withdrawal, dissolution etc. SRM was established in 2000 as a partnership firm by Mr. Amarjeet Goyal, Mrs. Meena Devi and Mr. Jai Bhagwan Goyal. The firm is engaged in milling and trading of basmati rice. The firm's milling unit is based out of Cheeka and has an installed capacity of 6 ton/hour for milling of rice. The key raw material for the firm is basmati paddy which is mostly procured from the "mandi" of Karnal and Cheeka (Haryana) during the paddy buying season i.e. September to December every year. However, if required firm also buys paddy from the market in off season period. Recent Results SRM reported a net profit (PAT) of INR0.06 crore on an operating income of INR33.81 crore in FY 2016 as compared to net profit (PAT) of INR0.06 crore on an operating income of INR38.60 crore in the previous year. SATHYA SHANMUKHA: ICRA Suspends B+ Rating on INR5cr LT Loan ----------------------------------------------------------- ICRA has suspended the [ICRA]B+ rating assigned to the INR5.0 crore long term fund based facilities of Sathya Shanmukha Traders. The suspension follows ICRA's inability to carry out a rating surveillance in the absence of the requisite information from the company. SINGHANIA BUILDCON: ICRA Suspends B- Rating on INR21.72cr Loan -------------------------------------------------------------- ICRA has suspended the long-term rating of [ICRA]B- assigned to the INR21.72-crore term loan and INR20.08-crore unallocated limit of Singhania Buildcon Private Limited. The suspension follows ICRA's inability to carry out a rating surveillance in the absence of the requisite information from the company. SRI GAYATRI: Ind-Ra Assigns 'IND B' Long term Issuer Rating ----------------------------------------------------------- India Rating and Research (Ind-Ra) has assigned Sri Gayatri Cotton Mills (SGCM) a Long-Term Issuer Rating of 'IND B'. The Outlook is Stable. KEY RATING DRIVERS The ratings reflect the under-construction status of SGCM's 350 bales/day cotton ginning and pressing unit in Adilabad, Andhra Pradesh. The total project cost is INR56.8 million (funded by INR38.5 of terms loans from the bank and remaining from the promoters) Production is scheduled to start by end-October 2016 while the repayment of debt is likely to start from June 2017. The ratings, however, factor in the unit's locational advantage which ensures availability and abundance of raw materials. The ratings are supported by the firm's partners' more than three decades of experience in the field of cotton ginning and pressing. RATING SENSITIVITIES Positive: Stabilisation of operations leading to substantial improvement in revenue and profitability could lead to positive rating action Negative: Failing to scale up operations leading to stress on liquidity position could be negative for the ratings COMPANY PROFILE SGCM was established in April 2016. It is engaged in ginning and processing of cotton bales in Adilabad, Andhrapradesh. SGCM's Ratings -- Long-Term Issuer Rating: assigned 'IND B'/Stable -- INR38.5 million long term loans: assigned 'IND B'/ Stable -- INR15 million fund-based working capital limit: assigned 'IND B'/Stable and 'IND A4' SVS FOOD: ICRA Reaffirms B- Rating on INR5.5cr Cash Loan -------------------------------------------------------- ICRA has reaffirmed the long-term rating at [ICRA]B- to INR5.50 crore (revised from 3.00) cash credit and INR1.50 crore (revised from INR3.58) term loan facilities of SVS Food Processors Private Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Cash Credit 5.50 [ICRA]B- reaffirmed Term Loan 1.50 [ICRA]B- reaffirmed The reaffirmation takes into account the weak financial profile of the company characterized by net losses incurred in FY2016 resulting from low capacity utilizations and higher interest costs with higher debt, highly geared capital structure and stretched liquidity position, given significant repayment obligations in the near term. The rating continues to be constrained by inherently low value additive nature of food processing industry; and risks inherent in an agro based business like flour milling including vulnerability towards the changes in government policies and raw material supply risks as the level of harvest and quality of wheat are highly dependent on agro climatic conditions. The rating, however, favorably factors in the demand outlook of wheat products in India and the location of plant in proximity to end user industry with sales profile dominated by institutional customers. Going forward, ability of the company to improve its scale of operations, operating and net margins, and capital structure, with effective working capital management and timely debt servicing is the key rating sensitivity from credit perspective. SVS Food Processors Private Limited is incorporated as a private limited company in the year 2012. The company had set up a flour mill with 60000 TPA capacity and the unit is located on a 3 acres land at Singannaguda Village, Medak district, Telangana, which is around 43 kms from the Hyderabad. The company is promoted by Mr. D. Narendra Reddy and Mr.CH. Narsimha Reddy. Recent Results According to audited results, the company reported net loss of INR0.50 crore on an operating income of INR49.85 crore for FY2016 as against net loss of INR0.57 crore on an operating income of INR22.99 crore during FY2015. TARAWADE LOGISTICS: CARE Rates INR1cr Long Term Loan at B+ ---------------------------------------------------------- CARE assigns 'CARE B+' and 'CARE A4' ratings to the bank facilities of Tarawade Logistics Private Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank Facilities 1 CARE B+ Assigned Short term Bank Facilities 5 CARE A4 Assigned Rating Rationale The ratings assigned to the bank facilities of Tarawade Logistics Private Limited is constrained on account of moderate scale of operations with fluctuating profitability, leveraged capital structure, weak debt coverage indicators along with revenue concentration risk and weak liquidity position with elongated collection period. The ratings also take into account its presence in fragmented and highly competitive industry with susceptibility to economic downturn. The above weaknesses are partially offset by experienced promoters with wide experience in logistics sector and long association with reputed clientele. The ability of the company to increase its scale of operations along with regular receipts of orders and improve profitability amidst increasing competition and manage its working capital requirement efficiently is a key rating sensitivity. Pune-based TLPL was incorporated in December 2010 and is led by Mr. Avinash Tarawade. TLPL has taken over operations from M/s P. D. Tarawade (PDT) in 2014. PDT, promoted by the Tarawade family, was established in 1968 and was engaged in clearing and forwarding activity since inception. TLPL has continued with the carrying and forwarding services and operates out of a facility spread over area of almost 4 acre located in Kunjirwadi (Pune). The entity owns a fleet of over 9 trucks having an average capacity of 20 tonne each. The company is the clearing and forwarding agent of RashtriyaIspat Nigam Limited (RINL) [rated 'CARE A+'] for Pune District; with RINL contributing over 70% of the total revenues in FY16 (refers to the period April 1 to March 31). The company enters into a contract having tenure of 7 years. The contract has been renewed previously 2 times and is next due for renewal in 2021. Furthermore, the company also undertakes transportation of goods for private clients primarily comprising Kalyani Steel limited and Gerdau Steel India Private Limited. A group concern of TLPL, Tarawade Transport Private Limited operates in transportation and logistics sector as well. VADIVEL PYROTECHS: ICRA Lowers Rating on INR15cr Loan to B+ ----------------------------------------------------------- ICRA has downgraded the long-term rating to the INR15.00 crore fund based facility (enhanced from INR8.50 crore) of Vadivel Pyrotechs Private Limited from [ICRA]BB- to [ICRA]B+. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Cash credit 15.00 [ICRA]B+ Downgraded from [ICRA]BB-(Stable) The rating revision considers the company's small scale of operations, which limits its pricing flexibility in a highly competitive market with much larger players, exposing the company's margins to volatility in raw material prices; highly geared capital structure and moderate coverage indicators; high working capital intensity and high labour churn due to hazardous nature of fireworks manufacturing and associated risks, despite stringent Government regulations/safety standards. Nevertheless, the rating factors in the longstanding track record of promoters in fireworks manufacturing business with healthy customer relationships. VPPL is primarily engaged in manufacturing of fireworks. It sources raw materials indigenously and a majority of its customers are located in North India. It was formed in 2011, by consolidating the businesses of four entities managed by the promoter group. The Company, which has four manufacturing facilities in and around Sivakasi, has leased six more manufacturing facilities since April 2013 from the promoter group. The promoters of the company are Mr. V Arumugasamy and Mr. A Vasantha Vikash. Recent results VPPL reported a net profit of INR0.50 crore on an operating income of INR31.6 crore during 2015-16 (unaudited), against a net profit of INR0.02 crore on an operating income of INR33.6 crore during 2014-15. VARDHMAN POLYTEX: ICRA Reaffirms 'D' Rating on INR464cr LT Loan --------------------------------------------------------------- ICRA has reaffirmed the [ICRA]D rating assigned to the INR514.00- crore bank facilities of Vardhman Polytex Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term fund-based 464.00 [ICRA]D/reaffirmed Short-term non fund- based 50.00 [ICRA]D/reaffirmed The rating reaffirmation takes into account the continued irregularities in debt servicing by VPL because of its weak liquidity position and inadequate cash accruals. As profitability and hence cash accruals of VPL's textile business had remained weak, the debt servicing in the past two years was largely supported by monetisation of its erstwhile acrylic yarn manufacturing unit's land as per the terms of the Corporate Debt Restructuring (CDR) scheme (approved in May 2013). With no incremental proceeds expected from asset monetisation currently, significant improvement in profitability of core operations would be necessary to regularize the debt servicing. The credit profile of VPL continues to remain stretched because of its highly leveraged capital structure (Total Debt/Tangible Net Worth of 4.4x and Total debt/ OPBDITA of 7.1x in FY2016, at the standalone level), significant debt repayments and weak profitability. While the leverage has remained high because of sizeable debt-funded investments in subsidiaries and past capital expenditure, profitability has been weak because of constrained raw material procurement ability. Longer credit period availed from suppliers due to weak liquidity has affected the company's raw material procurement costs. Besides, the company's profitability continues to remain susceptible to the cyclicality inherent in the spinning industry and volatility in cotton prices given its seasonal availability. Also, the commoditised nature of yarn and high competition in the spinning industry due to its fragmented nature exert pressure on the company's profitability. Further, the credit profile of VPL also remains constrained by the contingent liability of ~INR82.3 crore on account of the corporate guarantee given to its subsidiary, F.M. HÑmmerle Textiles Ltd., which was declared a 'sick company2' in FY2016. Going forward, regularisation of debt servicing supported by improvement in VPL's liquidity profile will be the key rating sensitivity. The improvement in liquidity, in-turn, will remain dependent on infusion of long-term funds and significant improvement in the profitability. Incorporated in 1981, VPL primarily manufactures cotton and cotton polyester blended spun yarn. Its manufacturing facilities in Ludhiana, Bathinda (both in Punjab) and Nalagarh (Himachal Pradesh) together have installed capacity of 1.95 lakh spindles. VPL also has a yarn dyeing unit in Ludhiana, with an installed capacity of 15.0 tons per day (tpd). It has a small presence in garmenting, with an installed capacity of manufacturing 7 lakh pieces per annum. VPL also manufactures yarn-dyed shirting fabric though its subsidiary, F.M. HÑmmerle Textiles Ltd, which has a manufacturing facility in Kohlapur (Maharashtra). VPL has invested INR91.50 crore in its two subsidiaries, F.M. HÑmmerle Textiles Ltd. and F.M. HÑmmerle Verwaltungs GmbH, Austria. F.M. HÑmmerle Textiles Ltd. falls under 'Sick Company' under the Sick Industrial and Companies (Special Provision) Act of 1985 and has been referred to Board for Industrial and Financial Reconstruction (BIFR). VARIDHI HYGIENE: Ind-Ra Affirms 'IND B' Long term Issuer Rating --------------------------------------------------------------- India Ratings and Research (Ind-Ra) has affirmed Varidhi Hygiene Products Private Limited's Long-Term Issuer Rating at 'IND B'. The Outlook is Stable. KEY RATING DRIVERS The affirmation reflects Varidhi's lack of operational track record and delay in starting commercial operations. Commercial production started in July 2014, however, there was a delay in installation of machinery and the entire installation was completed during FY16. In FY16, the company recorded revenue of INR49m (FY15: INR13 million) and a net loss of INR56 million (INR64 million). Operations are likely to stabilise during FY17 with exports contributing 45%-50% to the revenue. The ratings continue to benefit from Varidhi's comfortable liquidity position with the average utilization of fund-based facilities at around 85% over the 12 months ended September 2016. The ratings are also supported by the over two decades of experience of the promoters in the corrugated boxes manufacturing segment. RATING SENSITIVITIES Positive: Substantial revenue growth while maintaining the profitability leading to a sustained improvement in the credit profile will lead to a positive rating action. Negative: Inability to achieve revenue or generate profits leading to further deterioration in the credit metrics could lead to a negative rating action. COMPANY PROFILE Incorporated in 2011, Varidhi manufactures tissue paper jumbo rolls made from recycled paper and virgin pulp. Its manufacturing facility is in Vadodara, Gujarat. Varidhi has an installed capacity of 25 metric tonnes per day. Varidhi's facilities: -- Long-Term Issuer Rating: affirmed at 'IND B'; Outlook Stable -- INR20 million fund-based working capital limits: affirmed at 'IND B'/Stable -- INR25 million non-fund-based working capital limits: affirmed at 'IND A4' -- INR70 million (reduced from INR84.1 million) long term loans: affirmed at 'IND B'/Stable VIKAS COTTON: CARE Assigns 'B' Rating to INR8.82cr LT Loan ---------------------------------------------------------- CARE assigns 'CARE B' ratings to the bank facilities of Vikas Cotton Industries Private Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 8.82 CARE B Assigned Rating Rationale The rating assigned to the bank facilities of Vikas Cotton Industries Private Limited (VCIPL) is primarily constrained due to declining turnover, thin profit margins, seasonality associated with raw material availability and exposure to adverse changes in the government regulations. The rating is further constrained on account of its weak financial risk profile marked by moderate capital structure, weak debt coverage indicators and moderate liquidity position. The aforementioned constraints far outweigh the benefits derived from the vast experience of the promoters in the cotton ginning & pressing business and VCIPL's presence in the cotton producing belt of Gujarat. VCIPL's ability to increase the scale of operations along with improvement in the capital structure and better working capital management are the key rating sensitivities. Incorporated in the year 2005, VCIPL is promoted by two promoters Mr. Bhavin kumar Patel and Ms Palakben Patel. Mr. Bhavin Kumar Patel has industry experience of more than 10 years. VCIPL is engaged into the business of cotton ginning, pressing, seed crushing with an installed capacity of 350 cotton bales per day as on March 31, 2016 at its facilities located at Mehsana- Gujarat. As per the audited results for FY16, VCIPL reported net profit of INR0.10 crore on a total operating income (TOI) of INR41.85 crore as against net profit of INR0.09 crore on a TOI of INR53.09 crore during FY15 (Audited). During 5MFY17 VCIPL registered TOI of INR10 crore. ========= J A P A N ========= MITSUI O.S.K: Merger Will Not Affect Ba1 Rating, Moody's Says ------------------------------------------------------------- Moody's Japan K.K. says that the announcement of the merger of the container shipping businesses of Mitsui O.S.K. Lines, Ltd. (MOL, Ba1 corporate family rating, negative), Nippon Yusen Kabushiki Kaisha (Baa3 negative) and Kawasaki Kisen Kaisha, Ltd. (unrated) has no immediate impact on MOL's Ba1 rating and negative outlook. "The move highlights the very negative market conditions that continue to plague the containership industry," says Mariko Semetko, a Moody's Vice President and Senior Analyst. Moody's expects the integration of the three businesses could prove credit positive over time if it leads to more discipline in managing capacity. However, the potential cash flow synergies and balance sheet impact remain uncertain for now, including (1) whether the companies will transfer their vessels to a new joint venture and (2) the capital structure. According to the companies' announcement of 31 October 2016, the combined joint venture will hold a 7% share of the global containership market and will rank sixth in terms of container ship capacity globally. The potential economies of scale resulting from the merger could result in higher profits and cost competitiveness. In Moody's view, economies of scale in shipping could lead to lower operating costs, discounts on new buildings and on dry-docking expenses, and lower funding costs. The combined entity's enlarged size could also enable it to offer more frequent and reliable services, and optimize routes and capacity utilization. In addition, the larger fleet should increase the new entity's flexibility in reacting to shifts in geographical trade patterns, laddering out scheduled docking, and adapting to changing regulations. The companies target synergies of JPY110 billion annually, although little detail has been provided on how and when the joint venture will achieve this. "MOL's rating remains under significant pressure, and we estimate that debt/EBITDA will materially exceed 9x this year, which will provide it with very little, if any, cushion," adds Semetko. MOL will need to materially increase profitability and cash flow and reduce leverage over the coming 12-18 months in order to maintain its rating. In its 31 October 2016 earnings release, the company once again lowered its earnings guidance for the year ending 31 March 2017. It now expects an ordinary loss of JPY3 billion for the fiscal year, compared to its previous guidance of a JPY10 billion ordinary profit. Among MOL's various business segments, the Containerships segment remains the largest laggard in terms of profitability, with the company now expecting the segment to report JPY44 billion in ordinary losses for the fiscal year due to lower freight rates and persistent excess capacity. This will mark the sixth consecutive year for the segment to report ordinary losses, as significant and prolonged excess supply globally has kept rates low for container shipping companies. MOL also lowered its profit expectations for its Bulkships segment by JPY6.5 billion to JPY28 billion for the fiscal year, as the combined impact from the supply-demand gap widening in tankers caused by new deliveries and temporary demand decreases (e.g. reductions in vegetable oil trade and Nigeria's crude exports), and low demand for car carriers in resource-rich countries will offset a modest recovery in dry bulk. TAKATA CORP: Readies Bankruptcy Filing for U.S. Unit ---------------------------------------------------- Asia Nikkei Review reports that Takata Corp. is preparing for a possible bankruptcy protection filing in the U.S. amid the mounting costs related to the company's defective air bags, which have been linked to some deaths. The move could help the Tokyo-based company find a financial backer to ensure its parts-supplying operations remain ongoing as it seeks an out-of-court reorganization -- an important consideration for its automaker customers, Nikkei says. According to the report, the subsidiary eyed for a Chapter 11 filing, Michigan-based TK Holdings, contributed just over 30% of Takata's group sales for the year ended in March. But the unit suffered a fourth consecutive annual net loss, hit by the rising cost of air bag recalls, Nikkei relates. As of the end of March, TK Holdings had roughly JPY145 billion ($1.4 billion) in liabilities, surpassing its assets by some JPY30.5 billion. Sales for the year to March totaled JPY236.6 billion, Nikkei discloses. Takata already faces recall costs exceeding JPY1 trillion, with 69 million air bags on recall in the U.S. alone. TK Holdings likely will have to shoulder even more recall expenses as well as damage payouts down the road. A Chapter 11 filing would clarify the unit's liabilities and possibly lead to reductions, Nikkei states. Nikkei relates that the Japanese parent, through its financial adviser, has urged would-be sponsors to propose turnaround plans based on the assumption that the U.S. unit would file for bankruptcy protection. Global air bag leader Autoliv of Sweden, U.S. private equity funds and other potential backers have submitted proposals on this premise, the report says. Honda Motor, Toyota Motor and other customers that have shouldered some of the recall costs for Takata are also believed to be leaning in favor of TK Holdings entering bankruptcy protection, according to Nikkei. The automakers are expected to seek repayment of recall costs and other claims, but not to the extent that it would compromise Takata's ability to supply parts, adds Nikkei. As reported by the Troubled Company Reporter-Asia Pacific on Oct. 11, 2016, Bloomberg News, said Takata Corp., whose defective airbag inflators triggered the biggest recall in auto industry history, hired law firm Weil Gotshal & Manges LLP to help it weigh options that could include bankruptcy or a sale, according to people with knowledge of the matter. The Japanese manufacturer might choose to seek court protection just for its U.S. unit, said one of the people, who asked not to be named because the discussions are private, according Bloomberg. No final decisions have been made and Tokyo-based Takata continues to seek buyers, the people said, the report related. Takata is evaluating at least five bids as it confronts the potentially massive cost of recalling 100 million faulty airbag inflators worldwide and lawsuits tied to at least 16 deaths and numerous injuries, the Bloomberg report said. The airbags tend to degrade over time and erupt, sending shrapnel through the vehicle's cabin, the report noted. Japan-based Takata Corporation (TYO:7312) -- http://www.takata.com/en/-- develops, manufactures and sells safety products for automobiles. The Company offers seatbelts, airbags, steering wheels, child seats and trim parts. The Company has subsidiaries located in Japan, the United States, Brazil, Germany, Thailand, Philippines, Romania, Singapore, Korea, China and other countries. ==================== N E W Z E A L A N D ==================== ORIGINAL CHILDREN'S BOOKSHOP: Goes Into Liquidation ---------------------------------------------------- stuff.co.nz reports that the Original Children's Bookshop goes into liquidation after 37 years of trading The bookshop, which traded on Victoria St for about 35 years before moving to Riccarton after the 2011 earthquakes, went into voluntary liquidation on October 21, according to stuff.co.nz. Creditors are owed about NZ$295,000, including NZ$6,900 in employee claims and NZ$288,000 to unsecured creditors, according to the liquidator's first report, stuff.co.nz notes. The report states the bookshop has assets of about NZ$100,000, including NZ$46,000 worth of stock, stuff.co.nz relays. Liquidator Murray G. Allott's report states the company has struggled because it has "not achieved the level of sales necessary to be able to trade profitably," stuff.co.nz says. "The company's working capital has been expended to meet operating expenses and the ability to maintain stocks has diminished as a consequence," the creditor report states, stuff.co.nz relays. The bookshop has been put up for sale as a going concern. Long-time staff member Mary Sangster purchased the bookshop from former owner Sheila Sinclair last year, stuff.co.nz notes. The liquidator's report states the sale was delayed by a few months. "The purchase of the business was expected to settle in late 2014. However, due to issues arising over the lease of the premises, final settlement did not occur until April 2015. Trading in the intervening period was undertaken by the company pending settlement," the report stated, stuff.co.nz says. It is not clear if the bookshop will continue trading beyond Saturday, Oct. 29. ===================== P H I L I P P I N E S ===================== COMMUNITY RURAL: PDIC to Takeover and Liquidate Bank ---------------------------------------------------- The Monetary Board (MB) of the Bangko Sentral ng Pilipinas (BSP) prohibited Community Rural Bank of Dingras (Ilocos Norte), Inc. from doing business in the Philippines. Under Resolution No. 1956. A dated Nov. 3, 2016, the MB directed the Philippine Deposit Insurance Corporation (PDIC) as Receiver to proceed with the takeover and liquidation of the bank. PDIC took over the bank on Nov. 4, 2016. Community Rural Bank of Dingras is a three-unit rural bank with head office located at Medina St., cor. Puruganan St., Brgy. Madamba (Pob.), Dingras, Ilocos Norte. Its two branches are located in Batac and Paoay, both in Ilocos Norte. Based on the Bank Information Sheet filed by the bank with the PDIC as of June 30, 2016, Community Rural Bank of Dingras is owned by Teresita P. Villa (35.98%), Caridad U. Villa (18.28%), Jose S. Salasac (3.61%), Rolando Unciano (2.69%), Marino Unciano (2.41%), Evelyn G. Unciano (2.24%), Trinidad N. Nagum (2.12%), and Rene A. Hermano (2.09%). Latest available records show that as of June 30, 2016, Community Rural Bank of Dingras had 1,859 accounts with total deposit liabilities of PHP75.6 million. Total insured deposits amounted to PHP74.5 million involving 98.5% of total deposit accounts. PDIC assured depositors that all valid deposits and claims shall be paid up to the maximum deposit insurance coverage of PHP500,000.00. The schedule of claims settlement operations will be announced as soon as finalized. PDIC also reminded borrowers to continue paying their loan obligations with the closed Community Rural Bank of Dingras and to transact only with designated PDIC representatives at the bank premises. Meanwhile, PDIC enjoined all depositors and borrowers to attend the Depositors-Borrowers' Forum on Nov. 17, 2016 for information on requirements and procedures of filing claims and settlement of loan obligations. ==================== S O U T H K O R E A ==================== HANJIN SHIPPING: Number of Ships Seized Rises to Five ----------------------------------------------------- Yonhap News Agency reports that five ships operated by Hanjin Shipping have been seized after South Korea's No. 1 shipping line was put under court receivership in early September, according to industry sources on Nov. 4. According to the report, sources said the Hanjin China cargo ship was seized in Shanghai on Nov. 3 after unloading its cargo, as Hanjin Shipping failed to pay its terminal service fee estimated at KRW1 billion ($875,000). The Hanjin China had planned to return to Busan. Consequently, a total of five Hanjin ships have been seized, as the embattled shipper has failed to meet payments. The other four were seized in Singapore in August, in Canada in September and in South Korea in October, Yonhap says. Hanjin Shipping Co., Ltd., is mainly engaged in the transportation business through containerships, transportation business through bulk carriers and terminal operation business. The Debtor is a stock-listed corporation with a total of 245,269,947 issued shares (common shares, KRW 5000 per share) and paid-in capital totaling KRW 1,226,349,735,000. Of these shares 33.23% is owned by Korean Air Lines Co., Ltd., 3.08% by Debtor and 0.34% by employee shareholders' association. The Company operates approximately 60 regular lines worldwide, with 140 container or bulk vessels transporting over 100 million tons of cargo per year. It also operates 13 terminals specialized for containers, two distribution centers and six Off Dock Container Yards in major ports and inland areas around the world. The Company is a member of "CKYHE," a global shipping conference and also a partner of "The Alliance," another global shipping conference to be launched in April 2017. Hanjin Shipping listed total current liabilities of KRW 6,028,543 million and total current assets of KRW 6,624,326 million as of June 30, 2016. As a result of the severe lack of liquidity, Hanjin applied to the Seoul Central District Court 6th Bench of Bankruptcy Division for the commencement of rehabilitation under the Debtor Rehabilitation and Bankruptcy Act on Aug. 31, 2016. On the same day, it requested and was granted a general injunction and the preservation of disposition of the Company's assets. The Korean Court's decision to commence the rehabilitation was made on Sept. 1, 2016. Tai-Soo Suk was appointed as the Debtor's custodian. The Chapter 15 case is pending in the U.S. Bankruptcy Court for the District of New Jersey (Bankr. D.N.J. Case No. 16-27041) before Judge John K. Sherwood. Cole Schotz P.C. serves as counsel to Tai-Soo Suk, the Chapter 15 petitioner and the duly appointed foreign representative of Hanjin Shipping. STX OFFSHORE: French Gov't to Defend Interests in Shipyard Sale --------------------------------------------------------------- Emmanuel Jarry and Dominique Vidalon at Reuters report that the French government has told South Korea it will oppose any solution for shipbuilder STX France that is against national industrial interests, Industry Minister Christophe Sirugue told Reuters on Nov. 3 on the eve of a deadline for bids. STX France is 66.7% owned by failed South Korean shipbuilding group STX, Reuters discloses. An insolvency court in South Korea ruled last month that the French arm could be sold either separately from the parent, or as part of a bigger sale, Reuters recounts. Bids were due by Nov. 4, Reuters discloses. According to Reuters, the French government, which owns the remaining 33.3% of STX France, hopes to strike a deal that separates the French arm from its South Korean parent and leaves the French state with a blocking minority stake. Aside from the stake ownership, France also has special bid-blocking powers related to strategic industries such as defense, Reuters notes. "We have two intervention tools and should there be offers that do not fit our industrial aspirations we will not hesitate to use them," Mr. Sirugue told Reuters. Mr. Sirugue, as cited by Reuters, said he spoke by phone with Korea's Industry Minister and met with the country's ambassador to France to tell them that Italian shipbuilder Fincantieri and a consortium led by Dutch group Damen were likely to be among the bidders. He said French state-controlled naval shipbuilder DCNS would be involved as well in the rescue of STX France, regardless of the solution found, Reuters relays. STX Offshore & Shipbuilding Co. Ltd. is a Korea-based company mainly engaged in the shipbuilding and offshore business. The company operates its business through five segments: merchant vessel, cruise, offshore and specialized vessel (OSV), vessel apparatus and other segment. The merchant vessel segment engages in the manufacture of liquefied natural gas (LNG) and liquefied petroleum gas (LPG) carriers, container ships, tankers, very large ore carriers (VLOCs), bulk carriers as well as pure cars and truck carriers. The cruise segment provides cruise ships. The OSV segment engages in the manufacture of offshore patrol vessels, corvettes and others. The vessel apparatus segment produces vessel engines, deck houses and others. The other segment mainly engages in the plant construction business, rental business, crane business and others. ********* 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 ***