/raid1/www/Hosts/bankrupt/TCRAP_Public/161114.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 14, 2016, Vol. 19, No. 225
Headlines
A U S T R A L I A
2 NORTH: First Creditors' Meeting Scheduled for Nov. 21
BLUESCOPE STEEL: S&P Raises CCR to 'BB+'; Outlook Stable
BOYD METAL: First Creditors' Meeting Slated for Nov. 18
CASMAR (AUSTRALIA): S&P Assigns Preliminary 'B+' Issuer Rating
KUDOS AUSTRALASIA: First Creditors' Meeting Set for Nov. 21
NEXTGEN NETWORKS: Moody's Withdraws B1 Corporate Family Rating
RESI BASEMENTS: First Creditors' Meeting Set for Nov. 21
ROYAL DIAMONDS: Will be Forced to Shut After Incorrect Price List
C H I N A
CHINACAST EDUCATION: Files for Chapter 11 Bankruptcy Protection
CHINACAST EDUCATION: Case Summary & 20 Largest Unsec. Creditors
I N D I A
AADI CREDIT: CRISIL Suspends 'B' Rating on INR50MM LT Loan
ABELLON AGRISCIENCES: Ind-Ra Withdraws B+ Long-Term Issuer Rating
ABELLON CLEANENERGY: Ind-Ra Withdraws BB Long-Term Issuer Rating
AGRA OIL: ICRA Reaffirms B+ Rating on INR11.10cr Cash Loan
ALFA CHEMO: CRISIL Reaffirms B- Rating on INR25MM Cash Loan
ARYA INDUSTRIES: CRISIL Ups Rating on INR100MM Cash Loan to B+
BABA SAW: CRISIL Reaffirms 'B' Rating on INR30MM Cash Loan
BAL CHAND: CRISIL Reaffirms B+ Rating on INR55MM Cash Loan
BEE JAY: Ind-Ra Raises Long-Term Issuer Rating to BB-
BHANDARI STEELS: CRISIL Reaffirms B+ Rating on INR110MM Loan
DEIFY INFRASTRUCTURES: ICRA Cuts Rating on INR300cr Loan to D
EVER ELECTRONICS: ICRA Reaffirms 'B' Rating on INR6cr Loan
FLOURISH PUREFOODS: Ind-Ra Withdraws B+ Long-Term Issuer Rating
GOLDCOIN POLYPLAST: CRISIL Reaffirms B+ Rating on INR63.5MM Loan
GROW WELL: ICRA Reaffirms 'B' Rating on INR6cr Term Loan
GUJRAL ROADWAAYS: Ind-Ra Assigns BB Long-Term Issuer Rating
HAJI ALIMOHAMED: ICRA Reaffirms B+ Rating on INR12cr Loan
J.I. ENTERPRISES: ICRA Reaffirms 'B' Rating on INR6.44cr Loan
K.C. RICE: CRISIL Reaffirms B+ Rating on INR120MM Cash Loan
KINJAL COTTON: CRISIL Lowers Rating on INR75MM Cash Loan to B
KISSAN INDUSTRIES: CRISIL Reaffirms 'B' Rating on INR72.8MM Loan
KISSAN SOLVEX: CRISIL Reaffirms 'B' Rating on INR120MM Cash Loan
LINCOLN INDUSTRIES: CRISIL Reaffirms B+ Rating on INR60MM Loan
LOGHORN INDUSTRIES: CRISIL Lowers Rating on INR30MM Loan to B+
MEGA AUTOMOBILES: CRISIL Reaffirms B+ Rating on INR10.7MM Loan
MEGAMILES BEARING: ICRA Suspends B- Rating on INR5.3cr Loan
MEHALA MACHINES: CRISIL Assigns 'B' Rating to INR95MM Cash Loan
MITHRA COTTON: CRISIL Reaffirms B+ Rating on INR49MM Cash Loan
MODERN LAMINATORS: Ind-Ra Assigns BB+ Long-Term Issuer Rating
NR AGARWAL: Ind-Ra Raises Long-Term Issuer Rating to BB+
PARADEEP PARIVAHAN: CRISIL Suspends 'D' Rating on INR100MM Loan
RAJASTHAN METALS: Ind-Ra Assigns B+ Long-Term Issuer Rating
RAME ELECTROWIRE: CRISIL Suspends 'D' Rating on INR120MM Loan
REGAL PLYWOOD: CRISIL Reaffirms B+ Rating on INR20MM Cash Loan
REWA SHIKSHA: ICRA Suspends 'B' Rating on INR6.5cr Bank Loan
RISHAB INTERNATIONAL: CRISIL Assigns 'B' Rating to INR70MM Loan
ROLAND CERAMIC: CRISIL Reaffirms B+ Rating on INR47.3MM Loan
ROYAL PLYWOOD: CRISIL Lowers Rating on INR40MM LT Loan to B+
SAI SRINIVASA: CRISIL Reaffirms B+ Rating on INR100M Cash Loan
SARVODYA HOSPITAL: CRISIL Ups Rating on INR190MM Term Loan to B-
SERVOTECH POWER: CRISIL Assigns B+ Rating to INR62.6MM Loan
SHARMA KALYPSO: ICRA Suspends D Rating on INR92cr Bank Loan
SHRISHTI TECHNOLOGIES: ICRA Reaffirms B+ Rating on INR6cr Loan
SOMA INDUS: CRISIL Reaffirms 'B' Rating on INR18.5BB Term Loan
STALWART ALLOYS: CRISIL Assigns B+ Rating to INR120MM Cash Loan
SULOCHANA AGRO: CRISIL Reaffirms 'B' Rating on INR67.5MM Loan
SYNERGY TELECOM: CRISIL Suspends 'D' Rating on INR285MM Cash Loan
UNITED CORPORATION: CRISIL Cuts Rating on INR70MM Loan to 'D'
VHB MEDISCIENCES: CRISIL Raises Rating on INR348.7MM Loan to BB+
VISHWAS BUILDCON: ICRA Reaffirms B+ Rating on INR23cr Term Loan
ZENOVA BIO: CRISIL Reaffirms 'D' Rating on INR66MM LT Loan
I N D O N E S I A
JAPFA COMFEED: S&P Raises CCR to 'B+'; Outlook Stable
J A P A N
MITSUBISHI MOTORS: S&P Affirms 'BB-' CCR & Removes from Watch
M A L A Y S I A
1MALAYSIA: Ex-BSI Banker Yak Found Guilty in Singapore
S O U T H K O R E A
STX OFFSHORE: Court OKs Revival Plan, Ends Court Receivership
T A I W A N
INTERNATIONAL ENGINEERING: Files for Bankruptcy
- - - - -
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A U S T R A L I A
=================
2 NORTH: First Creditors' Meeting Scheduled for Nov. 21
-------------------------------------------------------
A first meeting of the creditors in the proceedings of 2 North
Terrace Pty Ltd, trading as Royal Hotel, Kent Town, will be held
at the offices of Worrells Solvency & Forensic Accountants, Suite
1103, Level 11, 147 Pirie Street, in Adelaide, on Nov. 21, 2016,
at 12:00 p.m.
Nicholas David Cooper and Rajendra Kumar Khatri of Worrells
Solvency & Forensic Accountants were appointed as administrators
of 2 North on Nov. 10, 2016.
BLUESCOPE STEEL: S&P Raises CCR to 'BB+'; Outlook Stable
--------------------------------------------------------
S&P Global Ratings said that it had raised its corporate credit
and issue ratings on BlueScope Steel Ltd. and the company's
US500 million and US$110 million senior-unsecured debt issues to
'BB+', from 'BB'. The outlook is stable.
The recovery rating on the debt issues is '4', indicating S&P's
expectation of average recovery (40%-50%) in the event of a
payment default.
"The upgrade reflects our expectation that BlueScope would
generate solid credit metrics in the year ending June 30, 2017,
due to its strong earnings momentum for the year to date and
further debt reduction," said S&P Global Ratings credit analyst
May Zhong.
In S&P's view, BlueScope's Australian Steel Products (ASP)
segment should generate sustainable profits due to its deep cost
cuts over the past year. The company's restructuring initiatives
have significantly lowered its breakeven spreads, increasing its
resilience to a weakening in trading conditions. In addition,
the company will reduce its gross debt by another US$110 million
in November 2016, funded by cash on hand.
This, together with the strong earnings momentum for the year to
date, should support its credit metrics in line with a 'BB+'
rating. S&P forecasts that its adjusted funds from operations
(FFO)-to-debt will be higher than 45% and adjusted debt to EBITDA
well below 2x over the next two years.
S&P also notes that BlueScope targets a net debt sustainably
lower than 1.0x of its underlying EBITDA (not adjusted for
leases, pension, and asset retirement obligations). In S&P's
opinion, its U.S. subsidiary North Star's relatively strong and
stable cash flow generation, as well as favorable trading
conditions in Australia, should support the generation of free
cash flow and maintenance of such a leverage target.
Nonetheless, BlueScope's cash flows remain sensitive to weakening
spreads. This could occur if the spike in raw material costs
(especially metallurgical coal) sustains and steel mills are
unable to pass on the cost pressure through increasing the
selling price for steel. For now, the improvement in BlueScope's
Australian business due to better dispatch volumes and
productivity gains have largely tempered the impact of high raw
material costs for the company in the first half of fiscal 2017.
In addition to rising raw material costs, BlueScope's earnings
and cash flows are sensitive to deterioration in domestic
residential renovation and alteration activity, or an
appreciation of the Australian dollar.
Ms. Zhong added: "The stable outlook reflects our view that
BlueScope's improved cost profile in steel making, geographic
diversity, and commitment to a low leverage should maintain its
credit metrics in line with the rating."
When trading conditions are conducive, S&P expects the company's
lease-adjusted FFO to debt to be higher than 45% and adjusted
debt to EBITDA lower than 2x.
S&P could lower the rating if the company's adjusted FFO to debt
falls below 30% and debt to EBITDA rises above 3x. This scenario
could occur if trading conditions were to weaken materially due
to, for example, a significant drop in Asian hot rolled coil
spreads without an offsetting impact from a depreciating
Australian dollar; softening housing market in Australia; or a
large acquisition that the company funds with debt.
An upgrade is unlikely in the near term. S&P could ultimately
consider an upgrade if the company maintains a conservative
balance sheet and further improves its operating efficiency,
making it more resilient to cyclically weak steel spreads or a
downturn in the Australian housing market.
BOYD METAL: First Creditors' Meeting Slated for Nov. 18
-------------------------------------------------------
A first meeting of the creditors in the proceedings of Boyd Metal
Industries Pty Ltd ATF Boyd Unit Trust and Grosvenor (1967) Pty
Ltd, trading as Simcraft Products, will be held at the offices of
Ferrier Hodgson, Level 28, 108 St Georges Terrace, in Perth, on
Nov. 18, 2016, at 11:00 a.m.
Dermott McVeigh of Ferrier Hodgson was appointed as administrator
of Boyd Metal on Nov. 8, 2016.
CASMAR (AUSTRALIA): S&P Assigns Preliminary 'B+' Issuer Rating
--------------------------------------------------------------
S&P Global Ratings said that it had assigned its preliminary 'B+'
long-term issuer rating to Casmar (Australia) Pty Ltd. and Casmar
Finance LLC. The rating outlook is stable.
At the same time, S&P assigned its preliminary 'B+' issue rating
and recovery rating of '3' to Casmar's proposed first-lien
facilities, which will consist of a US$515 million term loan due
2023 and a US$60 million revolving credit facility (RCF) due
2021. The '3' recovery rating indicates S&P's expectation for
meaningful (50%-70%; higher end of the range) recovery in the
event of a payment default. S&P expects the RCF will be largely
undrawn at financial close of the transaction. The issue ratings
are based on the preliminary terms and conditions of the
facilities.
S&P also assigned its preliminary 'B-' long-term issue rating and
recovery rating of '6' to the company's proposed AUD160 million
second-lien term loan due 2024. The '6' recovery rating
indicates S&P's expectation for negligible (0%-10%) recovery in
the event of a payment default.
"The corporate credit rating on Casmar reflects our assessment of
SAI Global's leading market position for its risk management
services in large global markets and property settlement services
in Australia, its highly diverse customer and end markets, and
high customer retention rates," said S&P Global Ratings credit
analyst Parvathy Iyer.
Offsetting these strengths is the company's highly leveraged
financial profile under financial sponsor ownership, as well as
SAI Global's small size and modest entry barriers in certain
services, and exposure to competitive pressures from larger
players and a subdued business environment.
SAI Global is established as one of the leading providers of a
range of risk management services globally as well as property
information, brokerage, and settlement related services in
Australia. Risk management services include assurance services,
aggregation and distribution of standards, e-learning platforms,
and risk-management software services. In fiscal 2016, SAI Global
reported total revenues of AUD570 million and EBITDA of AUD124
million.
S&P believes SAI Global provides critical services to businesses
to comply with increasing regulatory standards and managing
complex supply chain issues, which should continue to support
modest revenue growth over the medium term. Backed by its market
position, the company enjoys high customer retention rates (90%
on average), recurring subscription-based revenues, and low end
market concentration. While there isn't a competitor who
competes across all of the company's services, there are some
larger competitors in each service segment who can provide a
substitute to varying degrees and limit the company's pricing
powers over the medium to longer term. Likewise, a subdued
business environment can affect discretionary spend by companies
and the take-up of some services, subscriptions, or renewals.
These factors underpin S&P's assessment of a fair business risk
profile for Casmar.
The company's ownership by a financial sponsor constrains its
financial risk profile. In addition, S&P assess Casmar's
financial risk profile as highly leveraged because S&P expects
the company's adjusted debt to EBITDA to stay at low-to-mid 5x
from the year ending June 30, 2018. In fiscal 2017, S&P expects
slightly weaker debt to EBITDA of about 6x due to one-time costs
of AUD12 million to achieve targeted cost efficiencies of
AUD20 million over a 12-month period. Still, the company's high
cash conversion rate should generate positive free operating cash
flow, and S&P expects the company to make some mandatory debt
repayments over the next two or three years.
Ms. Iyer added: "The stable rating outlook reflects the company's
reasonably established market position across its suite of
services, its brand recognition in Australia, and its modest
global footprint. We expect the company would consolidate and
leverage on its current market position, grow its revenue in the
mid-single digit annually, and substantially achieve its targeted
cost savings over the next 12 months."
Furthermore, S&P do not expect any dividend payments, divestment
of any business lines or major acquisitions, although S&P has
factored in small acquisitions. On this basis, S&P forecasts the
company's debt to EBITDA to be 6.3x at fiscal 2016, before
settling in the range of 5x-5.3x, and an EBITDA interest coverage
of about 2.5x over the next two years.
S&P could lower the rating if the targeted cost savings do not
occur over the next 12 months or the forecast growth in revenues
does not materialize. These factors can lead to lower-than-
forecast free cash flows and delay potential deleveraging. Such
a scenario is likely to result from management's inability to
transform the business, higher-than-expected competition or
weaker customer retention rates.
While S&P don't expect Casmar to increase its leverage
aggressively, any change in its philosophy toward debt-funded
acquisition above S&P's expectation or shareholder distributions
could lead to downward rating pressure. An EBITDA interest
coverage of below 2x or debt to EBITDA approaching 6x will likely
lead to a lower rating.
S&P believes rating upside is limited, based on the ratio trend
of debt to EBITDA staying above 5x over the next couple of years.
Nonetheless, the rating could move up by a notch if the company's
performance exceeds S&P's expectations, excess cash is applied to
debt reduction bringing debt to EBITDA to below 5x, and the
management remains committed to such a financial profile on a
sustained basis.
KUDOS AUSTRALASIA: First Creditors' Meeting Set for Nov. 21
-----------------------------------------------------------
A first meeting of the creditors in the proceedings of Kudos
Australasia Pty Ltd, trading as Kudos Audio Visual & Kudos
Security Solutions, will be held at the offices of DCL Associates
Level 10, 239 George Street, in Brisbane, Queensland, on Nov. 21,
2016, at 4:00 p.m.
Domenic Calabretta & Grahame Ward of Mackay Goodwin were
appointed as administrators of Kudos Australasia on Nov. 9, 2016.
NEXTGEN NETWORKS: Moody's Withdraws B1 Corporate Family Rating
--------------------------------------------------------------
Moody's Investors Service has withdrawn the B1 corporate family
rating for Nextgen Networks Group Pty Limited and the B1 senior
secured rating for its (1) USD term loan facility; and (2) USD
senior secured revolving credit facility for Nextgen Networks Pty
Limited, as well its stable outlook.
RATINGS RATIONALE
Moody's has withdrawn the rating for its own business reasons.
BACKGROUND INFORMATION
Nextgen Networks Group Pty Limited is an Australia based backhaul
network provider, operating a circa 17,000km of fibre optic cable
network connecting to both mainland capital cities and to
regional and remote areas. Nextgen's network access and services
enable corporate, government and wholesale customers to transfer
data and content between offices, sites, data centres, services
and exchanges.
RESI BASEMENTS: First Creditors' Meeting Set for Nov. 21
--------------------------------------------------------
A first meeting of the creditors in the proceedings of Resi
Basements Pty Ltd will be held at the offices of Charles & Co,
Suite 2, Level 1, 190 Queen Street, in Melbourne, on Nov. 21,
2016, at 10:00 a.m.
Claudio Trimboli of Charles and Co. were appointed as
administrators of Resi Basements on Nov. 9, 2016.
ROYAL DIAMONDS: Will be Forced to Shut After Incorrect Price List
-----------------------------------------------------------------
Dominic Powell at SmartCompany reports that a New South Wales
jeweller may be forced to close its doors after a customer took
the business to court over an online pricing error and won.
In October last year, Royal Diamonds jeweller mistakenly listed a
2.16-carat diamond engagement ring on its online store for
AUD1123, where the actual price of the ring was approximately
AUD34,000, SmartCompany says.
SmartCompany relates that customer Nicholas Buttle purchased the
ring for his fiancee at the advertised price, but was informed by
the jeweller the selected ring was "no longer available".
According to the report, the judgment from the NSW Civil and
Administrative Tribunal reveals at the time of purchase, the
company's website notified Buttle "in the event that a diamond is
unavailable, a diamond of similar or higher grade may be offered,
or a refund of the purchase price".
When the customer reminded the store he would like a replacement
diamond "as per the note on your website", the jeweller denied
the request, citing a typing error, according to evidence tended
to the court, SmartCompany says.
"The price for the specific diamond was not correct, due to a
typing error. Usually we would offer a diamond of a similar or
higher grade, however in this instance, unfortunately, it won't
apply," read the email from Royal Diamonds, relays SmartCompany.
Buttle then took the jeweller to the NSW Civil and Administrative
Tribunal, which ruled in favour of him as the customer. Royal
Jewellers appealed the case on the grounds the customer was
acting unconscionably, but the appeal was dismissed, according to
SmartCompany.
SmartCompany says the jeweller has been ordered to provide the
customer with a similar or higher-grade diamond ring with the
value of AUD34,279. The store must also pay Buttle's legal fees.
A director at Royal Diamonds, who did not want to be named, told
the Daily Telegraph the "company is going to be closing down
because of this," reports SmartCompany.
"We are going to make the ring and close the company," they said.
The director was also worried the case would "set the precedent"
for opportunistic customers to buy expensive items at incorrect
prices, the report states.
According to SmartCompany, the Tribunal said there were "several
issues" related to provisions of Australian Consumer Law (ACL)
that were not raised by either party, which instead relied on the
law of contract. The Tribunal found an "absolute contract of
sale" was made.
"Having considered various authorities, the Tribunal found that
there was an absolute contract of sale made between the parties;
that payment for the ring had been accepted as was confirmed by
the appellant and that the appellant was unable to avoid the
agreement by virtue of its claimed mistake," the judgment, as
cited by SmartCompany, reads.
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C H I N A
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CHINACAST EDUCATION: Files for Chapter 11 Bankruptcy Protection
---------------------------------------------------------------
ChinaCast Education Corp. sought bankruptcy protection with the
goal of maximizing the value of its enterprise by continuing to
wind-up its affairs without the distraction and substantial costs
of having to defend against a class action suit.
Formerly engaged in the business of providing college-level
education to students in China, ChinaCast was left in financial
ruin, has no current operations, and is winding up its affairs as
a result of its founder's alleged looting of the Company in 2012,
as disclosed in the court filing.
According to Douglas Woodrum, chief financial officer and a
member of the Board of Directors of ChinaCast, Ron Chan Tze Ngon
was removed as chairman and CEO of ChinaCast in March 2012 for
his attempt to thwart an annual audit of the Company. Following
his departure, ChinaCast had "uncovered questionable activities
and transactions which raise the specter of possible illegal
conduct by Ron Chan and his accomplices," and prompted a further
investigation.
Mr. Woodrum said the Company investigated the possible transfer
of interests in certain of its schools to unauthorized parties,
potentially involving Mr. Chan and other individuals. The
Company also investigated the wrongful withdrawal of
approximately $120 million from Company accounts. The Company
also believed Mr. Chan may have transferred control of its
interests in certain of the schools it operated without
authorization.
These events prompted the initiation of an initial securities
fraud class action complaint filed against ChinaCast on May 25,
2012.
Following the consolidation of several related actions against
the Company and others, and the appointment of lead plaintiffs, a
consolidated class action complaint styled In re ChinaCast
Education Corporation Securities Litigation was filed in the
United States District Court for the Central District of
California, Case No. CV 12-04621-JFW (PLAx) on Sept. 17, 2012.
The Class Action Complaint asserted causes of action under, inter
alia, section 10(b) of Securities Exchange Act of 1934 and Rule
10b-5 promulgated thereunder against ChinaCast, as well as Derek
Feng, Stephen Marksheid, Ned Sherwood and Daniel Tseung, the
members of the Board during the time of Mr. Chan's looting of the
Company. Mr. Chan was not named as a defendant in the Class
Action Complaint.
On Oct. 15, 2012, ChinaCast and the Independent Directors moved
to dismiss the Class Action Complaint. On Dec. 7, 2012, the
District Court granted the motion to dismiss. The District Court
ruled among other things, that (i) the plaintiffs failed to
adequately plead the level of scienter by each of ChinaCast and
the Independent Directors required to sustain a private cause of
action under section 10(b) and Rule 10b-5 and under the Private
Securities Litigation Reform Act; (ii) that Mr. Chan's state of
mind could not be imputed to the Company because of the so-called
"adverse interest" exception to agency common law; and (ii)
because the Independent Directors had no knowledge of Mr. Chan's
concealed looting of the Company or facts sufficient to
constitute "reckless disregard" of facts that would have caused
the Independent Directors to know of Chan's looting of the
Company, the claims against them had to be dismissed.
The plaintiffs in the Class Action appealed the District Court
Decision, but solely as to ChinaCast. Almost three years after
the District Court Decision, on Oct. 23, 2015, the United States
Court of Appeals for the Ninth Circuit reversed the District
Court in a published decision ruling that "the adverse interest
exception itself had exceptions when necessary to protect the
rights of a third party who dealt with the principal in good
faith."
Upon remand, without sufficient resources to defend against the
Class Action any further, the Company did not answer the Class
Action Complaint. A hearing on the plaintiffs' motion for entry
of a default judgment is scheduled for Nov. 14, 2016.
Prior to the Petition Date, the Debtor commenced seven recovery
actions that are currently pending in the United States and in
Hong Kong.
The Debtor expects to promptly file a Chapter 11 plan that
establishes a litigation trust, which will then continue pursuit
of the Recovery Actions until completed.
Founded in 1999 by Ron Chan Tze Ngon, ChinaCast is a publicly-
held corporation organized under the law of Delaware. On
March 1, 2014, the Secretary of State of Delaware proclaimed that
the Debtor was no longer in good standing for failure to pay
taxes. As a result, the Debtor is winding up its affairs within
the limitations provided by Section 278 of the Delaware General
Corporation Law.
ChinaCast owned and operated three universities in China: the
Foreign Trade and Business College of Chongqing Normal
University, the Lijiang College of Guangxi Normal University and
the Hubei Industrial University Business College, in addition to
internet-based interactive distance learning applications,
multimedia education content delivery, and vocational training
courses.
As of the Petition Date, the Recovery Action Debt outstanding
totaled approximately $9,380,647. In addition to the Recovery
Action Debt, the Debtor owes vendors, professionals and other
commercial parties approximately $12,893,088 in the aggregate, as
disclosed in court papers.
The Chapter 11 case is pending in the U.S. Bankruptcy Court for
the Southern District of New York (Case No. 16-13121) before
Judge Mary Kay Vyskocil.
Klestadt Winters Jureller serves as counsel to the Debtor. Reid
Collins & Tsai LLP acts as the Debtor's special litigation
counsel.
The Debtor estimated assets in the range of $500 million to $1
billion and debts in the range of $10 million to $50 million as
of the bankruptcy filing.
A full-text copy of Douglas Woodrum's declaration in support of
the petition is available for free at:
http://bankrupt.com/misc/4_CHINACAST_Declaration.pdf
CHINACAST EDUCATION: Case Summary & 20 Largest Unsec. Creditors
---------------------------------------------------------------
Debtor: ChinaCast Education Corporation
fka ChinaCast Communications Limited
fka ChinaCast Communications Holdings Limited
fka Great Wall Acquisition Corp.
c/o Douglas Woodrum
5 Vista Real
Mill Valley, CA 94941
Case No.: 16-13121
Type of Business: Provider of college-level education
Chapter 11 Petition Date: November 9, 2016
Court: United States Bankruptcy Court
Southern District of New York (Manhattan)
Judge: Hon. Mary Kay Vyskocil
Debtor's Counsel: Joseph Corneau, Esq.
KLESTADT WINTERS JURELLER SOUTHARD & STEVENS,
LLP
200 West 41st Street, 17th Floor
New York, NY 10036
Tel: (212) 972-3000
Fax: (212) 972-2245
E-mail: jcorneau@klestadt.com
- and -
Tracy L. Klestadt, Esq.
KLESTADT WINTERS JURELLER SOUTHARD & STEVENS,
LLP
200 West 41st Street, 17th Floor
New York, NY 10036-7203
Tel: (212) 972-3000
Fax: (212) 972-2245
E-mail: tklestadt@klestadt.com
Debtor's
Special
Litigation
Counsel: REID COLLINS & TSAI LLP
Estimated Assets: $500 million to $1 billion
Estimated Debts: $10 million to $50 million
The petition was signed by Douglas Woodrum, chief financial
officer.
Debtor's List of 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Fried Frank Harris Professional Fees $5,996,483
Shriver & Jacobson
One New York Plaza
New York, NY 10004
Fir Tree Value 2011 Proxy Costs $1,500,000
Master Fund, LP
55 West 46th Street
29th Floor
New York, NY 10036
Fir Tree Value Unpaid Interest $1,098,187
Master Fund, LP
55 West 46th Street
29th Floor
New York, NY 10036
Ashford Capital Unpaid Interest $584,608
Partners LP
1 Walker's Mill Road
Wilmington, DE 19807
Norton Rose Professional fees $500,000
Fulbright Hong Kong
1 Connaught Road
38/F Jardine House
Central Hong Kong
Columbia Pacific CVR Priority Return $450,000
Opportunity Fund LP December 2015
Columbia Pacific CVR Priority Return $450,000
Opportunity Fund LP June 2016
Fir Tree Value CVR Priority $378,000
Master Fund, LP Return June 2016
55 West 46th Street
29th Floor
New York, NY 10036
Columbia Pacific Unpaid Interest $356,667
Opportunity Fund LP
1910 Fairview
Avenue E, Suite 200
Seattle, WA 98102
MRMP Managers LLC CVR Priority $300,000
151 Terrapin Point Return June 2016
Vero Beach, FL 32963
Fir Tree Value CVR Priority $276,000
Master Fund, LP Return December
55 West 46th Street, 29th Floor 2015
New York, NY 10036
Special Situations Unpaid Interest $272,000
Fund III QP LP
527 Madison Avenue
26th Floor
New York, NY 10022
Lake Union Capital Fund LP Unpaid Interest $256,197
714 3rd Street South
Kirkland, WA 98033
Park Financial CVR Priority $225,000
Corporation Return June 2016
Jeff Swanson
4300 East Fifth Avenue
Columbus, OH 43219
Park Financial CVR Priority $225,000
Corporation Return December
2015
Anvil Investment Unpaid Interest $213,333
Associates LP
Fir Tree Value Unpaid Interest $194,239
Capital Opportunity
Master Fund LP
MRMP Managers LLC CVR Priority $180,000
Return December
2015
MRMP Managers LLC Unpaid Interest $175,300
Special Situations Unpaid Interest $153,000
Cayman Fund LP
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I N D I A
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AADI CREDIT: CRISIL Suspends 'B' Rating on INR50MM LT Loan
----------------------------------------------------------
CRISIL has suspended its rating on the bank facility of Aadi
Credit Cooperative Society Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term
Bank Loan Facility 50 CRISIL B/Stable
The suspension of rating is on account of non-cooperation by Aadi
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, Aadi is yet to
provide adequate information to enable CRISIL to assess Aadi's
ability to service its debt. The suspension reflects CRISIL's
inability to maintain a valid rating in the absence of adequate
information CRISIL views information availability risk as a key
factor in its assessment of credit risk.
Aadi Society is a Delhi-based cooperative society registered
under the Multi-State Cooperative Societies Act, 2002. The
society was incorporated in 2013, promoted by Mr. Rajesh Kumar
Singh. It currently has five branches, one each in Uttar Pradesh,
Madhya Pradesh, Uttarakhand, Bihar, and New Delhi. The society
accepts deposits from its members. It also provides small
business, personal, and housing loans to its members.
ABELLON AGRISCIENCES: Ind-Ra Withdraws B+ Long-Term Issuer Rating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has withdrawn Abellon
Agrisciences Ltd's (AAL) 'IND B+(suspended)' Long-Term Issuer
Rating.
The ratings have been withdrawn due to lack of information.
Ind-Ra will no provide ratings or analytical coverage for AAL.
Ind-Ra suspended AAL's ratings on May 9, 2016.
AAL's ratings:
-- Long-Term Issuer Rating: 'IND B+(suspended)'; rating
withdrawn
-- INR97.6 mil. term loan limits: 'IND B+(suspended)'; rating
withdrawn
-- INR23.4 mil. fund-based cash credit limits:
'IND B+(suspended)'; rating withdrawn
ABELLON CLEANENERGY: Ind-Ra Withdraws BB Long-Term Issuer Rating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has withdrawn Abellon
CleanEnergy Limited's (ABCEL) 'IND BB(suspended)' Long-Term
Issuer Rating.
The ratings have been withdrawn due to lack of information.
Ind-Ra will not provide ratings or analytical coverage for ABCEL.
Ind-Ra suspended ABCEL's ratings on May 9, 2016.
ABCEL's ratings:
-- Long-Term Issuer Rating: 'IND BB(suspended)'; rating
withdrawn
-- INR838.1 mil. term loan limits: 'IND BB(suspended)'; rating
withdrawn
-- INR155 mil. fund-based working capital limits:
'IND BB(suspended)'; rating withdrawn
-- INR15 mil. non-fund-based working capital limits:
'IND A4+(suspended)'; rating withdrawn
AGRA OIL: ICRA Reaffirms B+ Rating on INR11.10cr Cash Loan
----------------------------------------------------------
ICRA has reaffirmed its long-term rating of [ICRA]B+ on the
INR11.10-crore bank facilities of Agra Oil and General Industries
Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 11.10 [ICRA]B+; Reaffirmed
The rating reaffirmation takes into account the company's stable
operating income in FY2016, though it has been decreasing
marginally on a year-on-year basis due to the decrease in the
trading sales. However, the company's scale of operations
continues to remain moderate at an absolute level.
ICRA's rating is constrained by the business risks associated
with the edible oils industry, including high competition and
fragmentation therein; the vulnerability of AOGIL's profitability
to volatility in global edible oil prices; and the agro-climatic
risks associated with the availability of the raw materials. ICRA
also takes note of the company's low profitability, weak coverage
indicators and elevated gearing levels. The rating, however,
takes comfort from the extensive experience of the promoters in
the edible oil industry; the company's competitive advantage in
raw material procurement on account of its proximity to oilseed
producing belt; and the favorable demand outlook for edible oil
and related products in the domestic market.
Going forward, the company's ability to improve its operating
margins and optimally manage its working capital requirements
will remain the key rating sensitivities.
Agra Oil and General Industries Limited was incorporated in 1972
as a proprietorship firm and was later converted into a private
limited company. The company manufactures mustard oil and mustard
cake at its unit in Agra, Uttar Pradesh, which has a seed
crushing capacity of 32,000 metric tonnes per annum (MTPA).It is
also involved in the trading of mustard oil and cake.
Recent Results
In 2016, AOGIL reported a net profit of INR0.55 crore on an
operating income (OI) of INR70.42 crore as against a net profit
of INR0.47 crore on an OI of INR73.21 crore in the previous year.
ALFA CHEMO: CRISIL Reaffirms B- Rating on INR25MM Cash Loan
-----------------------------------------------------------
CRISIL's ratings on bank facilities of Alfa Chemo Plast Private
Limited (ACPPL) continue to reflect the weak financial risk
profile, because of subdued debt protection metrics and average
capital structure. The ratings also factor in the large working
capital requirement, small scale of operations, and exposure to
volatility in raw material prices and foreign exchange rates.
These weaknesses are partially offset by extensive experience of
promoters in the chemicals trading business.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 25 CRISIL B-/Stable (Reaffirmed)
Letter of Credit 55 CRISIL A4 (Reaffirmed)
Proposed Cash
Credit Limit 12.5 CRISIL B-/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility 22.5 CRISIL B-/Stable (Reaffirmed)
Proposed Letter of
Credit 20.0 CRISIL A4 (Reaffirmed)
Outlook: Stable
CRISIL believes ACPPL will continue to benefit from extensive
experience of its promoters. The outlook may be revised to
'Positive' if increase in scale of operations and sustained
growth in operating margin, leads to higher cash accrual. The
outlook may be revised to 'Negative' if a stretch in the working
capital cycle, or lower-than-expected revenue/profitability,
constrains the financial risk profile, especially liquidity.
ACPPL, set up by Mr. Ambrish Mehta and his wife, Ms Jigna Mehta
in fiscal 2006, trades in specialty chemicals. The Mumbai-based
company has a godown at Bhiwandi in Thane (Maharashtra).
ARYA INDUSTRIES: CRISIL Ups Rating on INR100MM Cash Loan to B+
--------------------------------------------------------------
CRISIIL has upgraded the rating on the bank loan facilities of
Arya Industries (AI) to 'CRISIL B+/Stable' from 'CRISIL
B/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 100 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
Term Loan 25 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
The upgrade reflects CRISIL belief that the AI's financial risk
profile is expected to improve with improving financial risk
profile particularly its liquidity over the medium term. The
liquidity has improved on the back of improved cushion between
its accruals and term debt repayments of INR4.8 million per annum
for the year 2016-17(refers April 1st to March 31st) and 2017-18.
The bank lines utilization has also remained moderate with
average bank utilization of around 70 per cent for the past
twelve months through March, 2016. With improving gearing on
account of moderate incremental working capital debt vs. moderate
accruals supporting the networth its financial flexibility is
also expected to improve over the medium term.
The ratings reflect its exposure to the risks related to the on-
going project, initial phase and modest scale of operations in
the highly competitive cotton-ginning industry. These rating
weaknesses are partially offset by its promoters' extensive
experience in the cotton ginning industry, leading to its
established relationships with customers and suppliers, and
location advantages of its plant.
Outlook: Stable
CRISIL believes AI will continue to benefit over the medium term
from its promoters' extensive industry experience. The outlook
may be revised to 'Positive' if the company stabilises its
operations earlier than expected, leading to substantial increase
in scale of operations and large cash accruals, thus improving
its financial risk profile. Conversely, the outlook may be
revised to 'Negative', if the company achieves lower than
expected cash accruals or its financial risk profile weakens,
caused most likely by stretch in working capital borrowings or,
large debt-funded capital expenditure.
Established in 2014, AI is promoted by Gandhidham (Gujarat) based
Vadiya and Patel family. Majority of the partners have more than
a decade experience of working in the cotton industry. The
promoters are setting up a cotton ginning and pressing plant at
Sattapar, Anjar (Dist. Kutch, Gujarat). Commercial operations for
the firm started from December 2014.
AI's profit after tax (PAT) and sales are estimated at INR3.5
million and INR849.4 million, respectively, for 2015-16; the
company reported PAT of INR2.0 million on sales of INR227.4
million for 2014-15.
BABA SAW: CRISIL Reaffirms 'B' Rating on INR30MM Cash Loan
----------------------------------------------------------
CRISIL's ratings on the bank facilities of Baba Saw Mill continue
to reflect the firm's modest scale of operations, large working
capital requirement, and vulnerability of its profitability to
fluctuations in foreign exchange rates. The ratings also factor
in the firm's subdued financial risk profile because of small
networth, high total outside liabilities to tangible networth
ratio, and weak debt protection metrics. These weaknesses are
partially offset by its proprietor's extensive experience in the
timber industry.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 30 CRISIL B/Stable (Reaffirmed)
Letter of Credit 70 CRISIL A4 (Reaffirmed)
Outlook: Stable
CRISIL believes Baba Saw Mill will continue to benefit from its
proprietor's extensive industry experience. The outlook may be
revised to 'Positive' if there is a significant and sustained
increase in revenue and profitability, and if the financial risk
profile improves. The outlook may be revised to 'Negative' if
revenue or profitability falls steeply, or if working capital
cycle lengthens, or if the firm undertakes large, debt-funded
capital expenditure, weakening its financial risk profile.
Update
For fiscal 2016, on a provisional basis, the firm's profit after
tax (PAT) and operating margin fell to INR0.1 million and
INR101.6 million, respectively, from INR1.2 million and INR125.8
million, respectively, in fiscal 2015, on account of sluggish
order book. Operating margin remained at 7.3% in fiscal 2016.
CRISIL expects sales growth of 10-12% and operating margin at 7-
8% over the medium term. Gross current assets are expected at
280-300 days in line with ramp-up of operations. As on March 31,
2016, gearing improved to 1.70 times from 1.95 times a year
earlierdue to marginal decrease in working capital debt and
repayment of long-term debt. Over the medium term, the gearing is
expected at 1.40-1.60 times on account of low debt. Debt
protection metrics are likely to remain weak, with interest
coverage expected at 1.20-1.50 times and net cash accrual to
total debt ratio at 0.05-0.07 time due to modest profitability.
Liquidity remains stretched due to barely adequate accrual to
meet term debt obligation.
Baba Saw Mill, a proprietorship firm of Mr. Praful Ramjibhai
Jharu formed in December 2011, processes timber logs. The firm
commenced commercial operations in February 2012. It processes
pine wood, and plans to set up capacity to process teak wood, sal
wood, and hard wood. Its facility is at Padana in Kutch, Gujarat.
BAL CHAND: CRISIL Reaffirms B+ Rating on INR55MM Cash Loan
----------------------------------------------------------
CRISIL's rating on the long-term bank facilities of Bal Chand
Cotspin Pvt Ltd (BCCPL) continues to reflect the company's small
scale of operations, low profitability, and below-average
financial risk profile, marked by small networth and weak
interest coverage ratio. These weaknesses are partially offset by
the extensive experience of the promoters in the cotton industry
and efficient working capital management.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 55 CRISIL B+/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility 20 CRISIL B+/Stable (Reaffirmed)
Warehouse Receipts 30 CRISIL B+/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes BCCPL will continue to benefit over the medium
term from the promoters' experience and established relationships
with customers. The outlook may be revised to 'Positive' if the
company reports higher-than-expected revenue while improving its
profitability and capital structure. Conversely, the outlook may
be revised to 'Negative' in case of a decline in BCCPL's revenue
or profitability, or if the company undertakes any large debt-
funded capital expenditure, weakening the financial risk profile.
About the Company
Headquartered in Abohar (Punjab), BCCPL primarily trades in
cotton bales. The company also operates a ginning unit in Abohar
with installed capacity of 25,000 bales per annum. The company
derives around 70 per cent of its revenue from trading in cotton
bales and the remaining from its ginning unit. The company was
set up in 1994 by Mr. Pradeep Sharda and its day-to-day
operations are managed by Mr. Raghav Sharda and his mother, Ms.
Pushpa Sharda.
BEE JAY: Ind-Ra Raises Long-Term Issuer Rating to BB-
-----------------------------------------------------
India Ratings and Research (Ind-Ra) has upgraded Bee Jay
Industrial Corporation's Long-Term Issuer Rating to 'IND BB-'
from 'IND B+(suspended)'. The Outlook is Stable. The agency has
also upgraded the ratings on BEEJAY's INR200 mil. fund-based
limits (increased from INR120 mil.) to Long-term 'IND BB-' from
'IND B+(suspended)' with a Stable Outlook and Short-term
'IND A4+' from 'IND A4 (suspended)'.
Ind-Ra suspended BEEJAY's ratings on July 28, 2016.
KEY RATING DRIVERS
The upgrade reflects BEEJAY's improved scale of operations,
EBITDA margins and interest coverage. In FY16 its revenue rose
to INR1,727.09 mil. from INR1,684 mil. in FY15 on account of
rising sales. Its gross interest coverage (operating
EBITDA/gross interest expense) improved to 1.57x (1.49x). The
improvement in the gross interest cover was due to improved
absolute EBITDA. Further the EBITDA margins improved marginally
to 1.64% in FY16 from 1.53% in FY15 owing to favorable price
movement of the key raw material i.e. iron and steel.
The ratings factor in BEEJAY's comfortable liquidity profile as
evident from its average working capital utilization of around
85% during the 12 months ended October 2016.
The ratings derive strength from the two decades of experience of
BEEJAY's partners in the iron and steel industry; the ratings are
supported by the company's strong relationships with customers
and suppliers and the company's 20 year-long operational history.
The ratings are, however, constrained by deterioration in the
company's net leverage (total Ind-Ra adjusted net debt/operating
EBITDAR) to 6.08x in FY16 (FY15: 4.24x) due to infusion of
unsecured borrowings to the tune of around INR30 mil. in FY16.
The ratings are further constrained by BEEJAY's presence in a
highly fragmented and intensely competitive iron and steel
industry and risk associated with the fluctuation in raw material
prices.
RATING SENSITIVITIES
Positive: A sustained improvement in the credit metrics could be
positive for the ratings.
Negative: Deterioration in profitability leading to weakening of
the credit profile could be negative for the ratings
COMPANY PROFILE
BEEJAY was established as a partnership concern in 1996 by Mr.
Devender Garg and Mrs. Anju Garg. The company is engaged in the
trading of iron and steel products and has its head office in
Faridabad.
BHANDARI STEELS: CRISIL Reaffirms B+ Rating on INR110MM Loan
------------------------------------------------------------
CRISIL's ratings on the bank facilities of Bhandari Steels
Limited continue to reflect the company's average financial risk
profile, marked by weak debt protection metrics, and its working-
capital-intensive operations. These rating weaknesses are
partially offset by BSL's established market position and its
promoters' extensive experience in the steel product trading
business.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 70 CRISIL B+/Stable (Reaffirmed)
Electronic Dealer
Financing Scheme
(e-DFS) 110 CRISIL B+/Stable (Reaffirmed)
Letter of Credit 50 CRISIL A4 (Reaffirmed)
Proposed Long Term
Bank Loan Facility 10 CRISIL B+/Stable
(Reaffirmed)
Outlook: Stable
CRISIL believes that BSL will benefit over the medium term from
its established position and its promoters' extensive experience
in the steel product trading industry. The outlook may be revised
to 'Positive' in case of significant increase in revenue and
improvement in net cash accruals while improving its debt
protection metrics. Conversely, the outlook may be revised to
'Negative' in case of deterioration in operating margin or debt
protection metrics, thereby adversely affecting its debt-
servicing ability.
BSL, part of the Bhandari group, is currently managed by Mr.
Jitendra Bhandari, belonging to the Chennai-based Bhandari
family. The company was established in 1999 by the late Mr.
Dinesh Bhandari. The company trades in various steel products
like CR SS coils, SS tubes, seamless tubes, angles, beams, SS
rods, and other wide range of steel products. The company's
registered office is located in Chennai (Tamil Nadu).
DEIFY INFRASTRUCTURES: ICRA Cuts Rating on INR300cr Loan to D
-------------------------------------------------------------
ICRA has revised the long-term rating outstanding on the
INR300.00 crore fund based/non-fund based bank facilities of
Deify Infrastructures Limited from [ICRA]B to [ICRA]D and the
short-term rating from [ICRA]A4 to [ICRA]D.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Non-Fund Based Limits 300.00 [ICRA]D (Downgraded)
The rating revision factors in the deterioration in the financial
profile as well as liquidity position of the company resulting in
delays in debt servicing. The company largely caters to its group
company, namely, Jayaswal Neco Industries Limited for the
development projects in the power, iron and steel, and allied
sectors, and thus was adversely impacted by the weakening
financial profile of JNIL resulting in a slowdown in order inflow
coupled with delays in payments.
Deify Infrastructures Limited (DIL) is part of the Nagpur-based,
Neco Group. The promoters of the company have more than four
decades of experience in the steel and casting business. In July
1991, Neco Investments Private Limited was incorporated as an
investment entity within the Group. Subsequently, in July 2009
the name of the company was changed to Deify Infrastructure
Private Limited (DIPL), in line with the change in business
activities: DIPL was incorporated to function as the EPC arm of
the Group. DIPL was converted to a public limited company in June
2010. The entity is a 100% promoter Group-owned company; and all
shareholders comprise operating/investment companies ultimately
owned by the promoters.
DIL currently functions as the EPC arm implementing the Group's
development projects in the power, iron and steel, and allied
sectors. DIL does not own any equipment; but undertakes
design/planning/supervision roles, while subcontracting the
physical construction to third-party contractors. Currently, DIL
executes in-house projects, i.e., projects for the
development/expansion of Group companies.
For the financial year ending March 2015, DIL reported an
operating income of INR689.94 crore and a net profit of INR4.09
crore, as against an operating income of INR850.85 crore and a
net profit of INR4.44 crore in the previous fiscal year.
EVER ELECTRONICS: ICRA Reaffirms 'B' Rating on INR6cr Loan
----------------------------------------------------------
ICRA has reaffirmed the long term rating at [ICRA]B for INR6.00
crore (reduced from INR19.25 crore) long term facility of Ever
Electronics Private Limited. ICRA has also reaffirmed the short
term rating at [ICRA]A4 for INR11.82 crore (enhanced from INR4.75
crore) short term non-fund based facility of EEPL. The rating of
[ICRA]B/A4 assigned for the long term/short term unallocated
amount of INR9.18 crore.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term, Fund
Based-Term Loan 6.00 [ICRA]B reaffirmed
Short Term, Non-
Fund Based 11.82 [ICRA]A4 reaffirmed
Long Term/Short
Term-Unallocated 9.18 [ICRA]B/A4 assigned
The rating reaffirmation takes into consideration long standing
experience of promoters who enjoy a good relationship with
principal LG and other customers as well as expansion in the
product portfolio which has resulted in an improved revenue
performance. The company's take over by the new management in
December 2013 resulted in addition of new products to be supplied
to LG Electronics India (LG). The ratings however continue to
remain constrained by high client concentration risk as majority
of the output (~95%) is sold to LG. The company has been putting
efforts in order to diversify the customer base; however extent
of diversification remains marginal at present. ICRA also notes
that the company has reported improvement in operating
profitability but there are continued net losses and the same
have translated into weak capital structure marked by
deteriorated net worth position, high gearing level and weak
coverage indicators for the company.
Going forward, improving operational efficiency in order to
breakeven and resultantly improving financial risk profile remain
key sensitivities for the company.
Incorporated in 2004, EEPL is engaged assembling PCBs for LG
Electronics India (LG). The company assembles PCBs for Color
Televisions, LCD Televisions, DVD players, Refrigerators and
other electronic equipments of LG. The company is a single source
supplier for LG. The company has also diversified into PCB
manufacturing for automobile industry and is supplying to auto
ancillary players in Pune.
Recent Results
EEPL reported OPBDIT of INR3.1 crore in FY2016 on an operating
income of INR117.8 crore. The company had reported a net loss of
INR3.9 crore during the same period.
FLOURISH PUREFOODS: Ind-Ra Withdraws B+ Long-Term Issuer Rating
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has withdrawn Flourish
PureFoods Pvt Ltd's (FPF) 'IND B+(suspended)' Long-Term Issuer
Rating.
Ind-Ra suspended FPF's ratings on May 9, 2016.
FPF's ratings:
-- Long-Term Issuer Rating: 'IND B+(suspended)'; rating
withdrawn
-- INR1023.1 mil. long term loan limits: 'IND B+(suspended)';
rating withdrawn
-- INR14.6 mil. cash credit limits: 'IND B+(suspended)';
rating withdrawn
GOLDCOIN POLYPLAST: CRISIL Reaffirms B+ Rating on INR63.5MM Loan
----------------------------------------------------------------
CRISIL's rating on the long term bank facilities of Goldcoin
Polyplast (GP) continues to reflectextensive experience of
promoters in manufacturing of polyethylene (PE) stretch films and
packaging material, and their established relationships with
customers and suppliers. These rating strengths are partially
offset by the average financial risk profile, marked by high
gearing and nascent stage of operations.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 36.5 CRISIL B+/Stable (Reaffirmed)
Term Loan 63.5 CRISIL B+/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that GP will continue to benefit from extensive
experience of its promoters. The outlook may be revised to
'Positive' if significant increase in revenues and profitability
results in significant increase in cash accrual leading to
strengthening of the financial risk profile. The outlook may be
revised to 'Negative' if significantly low cash accrual,
substantial working capital requirement, or debt-funded capital
expenditure, weakens the financial risk profile.
GP was incorporated in 2012, by promoters, Mr. Ashvinbhai
Pansuriya and Mr. Rameshbhai Tilara. The Rajkot-based company
manufactures PP (polypropylene) flute board, PE stretch films and
EPE (expanded polyethylene) capliner/ wad sheets.
GP, reported a profit after tax (PAT) of INR0.8 million on net
sales of INR170.2 million for 2015-16 (refers to financial year,
April 1 to March 31) on a provisional basis, against a PAT of
INR3.5 million on net sales of INR169.6 million for 2014-15.
GROW WELL: ICRA Reaffirms 'B' Rating on INR6cr Term Loan
--------------------------------------------------------
ICRA has reaffirmed the short-term rating of [ICRA]D to the
INR240 crore non-fund based bank facilities of Grow Well
Mercantile Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term, Fund
Based-Term Loan 6.00 [ICRA]B reaffirmed
Short Term, Non-
Fund Based 11.82 [ICRA]A4 reaffirmed
Long Term/Short
Term-Unallocated 9.18 [ICRA]B/A4 assigned
The rating reaffirmation takes into account the continued delays
in debt servicing by the company owing to stretched liquidity
position following delays in payments from its customers. The
rating continues to be impacted by GWMPL's low operating
profitability and cash accruals resulting from limited value
addition in the business and intensely competitive nature of the
steel trading industry. The rating also takes into account the
exposure of the business to regulatory risks, along with the
cyclicality in investment patterns of its key end-user
industries. Nevertheless, the rating favorably factors in the
experience of the promoters in the steel industry and a healthy
revenue growth reported in FY2016.
Incorporated on January 21, 1997, GWMPL is a closely-held private
limited company of the Uttam Galva Group, promoted by the Miglani
family. The company is engaged in trading steel products such as
hot rolled coils, cold rolled coils and sheets, as well as
galvanized products such as galvanized plain and galvanized
corrugated coils and sheets. GWMPL also has a steel processing
centre at Taloja for minor fabrication of steel products for
supply in the vicinity.
Uttam Galva Group has been engaged in manufacturing and trading
various steel products for close to five decades. The Group has
considerable expertise and linkages with both suppliers and
customers across various geographical locations.
Recent Results
For the year ended March 31, 2015, the company reported a Profit
after Tax (PAT) of INR2.46 crore on an operating income (OI) of
INR1168.53 crore. For the year ended March 31, 2016, the company
reported a PAT of INR2.45 crore on an OI of INR1321.40 crore.
GUJRAL ROADWAAYS: Ind-Ra Assigns BB Long-Term Issuer Rating
-----------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Gujral Roadwaays
Private Limited (GRPL) a Long-Term Issuer Rating of 'IND BB'.
The Outlook is Stable.
KEY RATING DRIVERS
The ratings reflect GRPL's moderate credit metrics and financial
profile. In FY16, its revenue was INR224 mil. (FY15: INR188
mil.) and EBITDA margins were 39.9% (37.4%). The company's
adjusted net leverage (total debt adjusted for cash/EBITDA) stood
at 3.3x in FY16 (FY15: 2.1x) and interest coverage (EBITDA/gross
interest expenses) was 3.9x (4.1x).
The ratings reflect GRPL's moderate liquidity profile with its
working capital facilities being utilized at an average of 87%
over the 12 months ended August 2016.
The ratings, however, are supported by over two decades of
experience of GRPL's directors in the transportation business.
RATING SENSITIVITIES
Positive: An improvement in the scale of operations with
maintenance of the credit metrics could lead to a positive rating
action.
Negative: A decline in the scale of operations leading to
deterioration in the credit metrics could lead to a negative
rating action.
COMPANY PROFILE
Incorporated in 1993, GRPL is engaged in providing transportation
services (transporting bulk LPG) to major oil companies such as
Bharat Petroleum Corporation Limited, Indian Oil Corporation
Limited and Hindustan Petroleum Corporation Limited. The firm
provides its transportation services in the eastern region of
India and has its head office situated in Haldia.
The directors of the company are Mr. Gaganjeet Singh Gujral,
Mr. Bhupinder Singh Gujral, Mrs. Rattan Kaur and Mr. Paranita
Gujral.
GRPL's ratings:
-- Long-Term Issuer Rating: assigned 'IND BB'/Stable
-- INR4.84 long-term loan: assigned 'IND BB'/Stable
-- INR34.3 mil. fund-based facilities: assigned
'IND BB'/Stable
-- INR1.13 mil. non-fund-based facilities: assigned 'IND A4+'
HAJI ALIMOHAMED: ICRA Reaffirms B+ Rating on INR12cr Loan
---------------------------------------------------------
ICRA has reaffirmed the [ICRA]B+ rating to the INR12.00-crore
working capital facility and INR1.10-crore term loan facility of
Haji Alimohamed Moosa & Co. ICRA has also reaffirmed an [ICRA]A4
rating to the INR0.50-crore short-term non-fund based facilities
of HAMC.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-based-
Working Capital
(CC/EPC/FBD/FBP) 12.00 [ICRA]B+; Reaffirmed
Fund-based-
Term Loan 1.10 [ICRA]B+; Reaffirmed
Non-fund Based
CEL of PFE 0.50 [ICRA]A4; Reaffirmed
The rating reaffirmation continues to be constrained by HAMC's
moderate scale of operations and weak financial profile as
depicted from low profitability, weak debt coverage indicators
and leveraged capital structure. The rating is further
constrained by the highly competitive and fragmented industry
structure due to low entry barriers, and the vulnerability of the
firm's profitability to raw material (cotton) prices, which are
subject to seasonality, crop harvest and regulatory risks.
The ratings, however, favorably takes into account the
significant growth of the firm's revenue to 16% in FY2016,
despite lower cotton prices during the year. The rating also
considers the favorable location of the firm's manufacturing
facility, giving it easy access to raw material. The ratings also
take in the improvement in the working capital cycle of the firm
and draws comfort from the firm's presence in the forward
integration of cottonseed and castor seed crushing, thus
providing diversification and additional revenues. The rating
also factors in the promoter's long experience in the cotton
ginning industry.
Going forward the firm's ability to increase its scale, maintain
adequate profitability and improve its capital structure, given
the seasonality in the business, volatility in prices of cotton
bales, high competitive intensity and high working capital
requirement, will remain critical to the credit metrics. ICRA
also notes that HAMC is a partnership concern and any substantial
withdrawal from the capital account in future could adversely
impact the credit profile of the firm.
Haji Alimohamed Moosa & Co. was initially established as a sole
proprietor concern by Mr. Adambhai A. Halai in the year 1959.
Subsequently, in October 2004, the sole proprietor status of the
firm was converted into a partnership constituted by three
partners -- Mr. Admabhai A. Halai and his two sons Mr. Aslam
Halai and Mr. Noormohamed Halai. The firm gins raw cotton and
crushes cottonseeds and castor seeds to produce cotton bales,
cottonseeds oil, oil cakes, castor seeds oil and castor seeds oil
cake. It also trades in cotton and agro products. The company's
manufacturing unit is at Junagadh, Gujarat, and is currently
equipped with 24 ginning machines and five expellers, with an
intake capacity of producing 250 fp cotton bales per day and 4500
mt cottonseeds oil & 6000 MT castor seeds oil per annum
respectively.
Recent Results
For the year-ended March 31, 2016, the firm reported an operating
income of INR84.99 crore with profit after tax (PAT) of INR0.72
crore.
J.I. ENTERPRISES: ICRA Reaffirms 'B' Rating on INR6.44cr Loan
-------------------------------------------------------------
ICRA has reaffirmed its long term rating of [ICRA]B on the
INR6.44 crore (reduced from INR6.65 crore) fund based bank
facilities and INR2.56 crore (enhanced from INR2.35 crore)
unallocated limits of J.I. Enterprises.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based Limits-
Long Term 6.44 [ICRA]B; reaffirmed
Unallocated-Long
Term 2.56 [ICRA]B; reaffirmed
ICRA's ratings favorably take into account the long standing
experience of JIE'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 JIE's declining operating profitability with
operating profit margin of 6.65% in FY2016 as against 9.23% in
FY2015 on account of decline in realisation. The ratings are
further constrained by the firm's leveraged capital structure as
indicated by gearing level of 11.36 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
1.38 times during FY2016. 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.
Going forward, the firm's ability to register revenue growth, and
bring about a sustained improvement in its coverage indicators
will be the key rating sensitivities.
The firm was established in 2003 as a proprietorship concern by
Mr. Rajeev Kumar. JIE is engaged in the business of processing
and trading of rice in domestic market as well as indirect sales
to countries in Middle East, Saudi Arabia, Dubai and Kuwait.
Initially the firm was carrying out rice milling operations from
leased plant. However in the year 2010 firm purchased its own
rice milling plant, thus increasing its scale of operations.
Company is having its manufacturing unit at Nadana Road, Taraori,
Karnal with an installed milling capacity of 2 tons per hour of
paddy and sorting capacity of 4 tons per hour.
Recent Results
JIE reported a net profit of INR0.12 crore on an operating income
of INR22.07 crore for FY2016, as compared to a net profit of
INR0.11 crore on an operating income of INR17.45 crore for the
previous year.
K.C. RICE: CRISIL Reaffirms B+ Rating on INR120MM Cash Loan
-----------------------------------------------------------
CRISIL's rating on the long-term bank facility of K.C. Rice Mills
continues to reflect the below-average financial risk profile,
marked by weak interest coverage ratio, and working capital
intensity in, and small scale of, operations. These rating
weaknesses are partially offset by extensive experience of
promoters and funding support extended by them.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 120 CRISIL B+/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that KCR will continue to benefit from extensive
experience of its promoters. The outlook may be revised to
'Positive' if significant improvement in scale of operations and
profitability, or working capital management, strengthens the
debt protection metrics and capital structure. The outlook may be
revised to 'Negative' if a slowdown in revenue or substantial
increase in working capital requirement, weakens the financial
risk profile.
KCR, based in Jalalabad (Punjab), processes and sells basmati
rice. The firm primarily processes the PUSA 1121 variety of
basmati rice for own sales and undertakes job-work for other
firms. Daily operations are managed by Mr. Raman Kumar and his
brother, Mr. Anil Kumar.
KINJAL COTTON: CRISIL Lowers Rating on INR75MM Cash Loan to B
-------------------------------------------------------------
CRISIL's has downgraded its rating on the long-term bank
facilities of Kinjal Cotton Private Limited to 'CRISIL B/Stable'
from 'CRISIL B+/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 75 CRISIL B/Stable (Downgraded
from 'CRISIL B+/Stable')
Term Loan 20 CRISIL B/Stable (Downgraded
from 'CRISIL B+/Stable')
The downgrade reflects deterioration in the financial risk
profile due to withdrawal of capital. The promoters had invested
INR8.7 million in fiscal 2015 towards capital expenditure
(capex). However, as the capex was postponed, the investment was
withdrawn. This weakened the gearing to 3.3 times as on March 31,
2016. Furthermore, the gearing is expected to remain high because
of a debt-funded capex of Rs 35 million in fiscal 2017. Of this,
about Rs 20 million is to be funded through a term loan and the
balance by an unsecured loan from the promoters. Hence, the
gearing is likely to remain high over the medium term.
The rating reflects a modest scale of operations in the
fragmented cotton ginning and pressing industry, and a below-
average financial risk profile because of an aggressive capital
structure and subdued debt protection metrics. These rating
weaknesses are partially offset by the extensive industry
experience of the promoters and their funding support.
Outlook: Stable
CRISIL believes KCPL will continue to benefit from the extensive
industry experience of its promoters. The outlook may be revised
to 'Positive' in case of significant improvement in the capital
structure through equity infusion or higher accretion to
reserves. The outlook may be revised to 'Negative' in case of
deterioration in the financial risk profile, particularly
liquidity, most likely because of low cash accrual, a stretched
working capital cycle, or any large, unanticipated capex.
Incorporated in 2008, KCPL is promoted by Mr. Vishnubhai Patel
and his family members. The company gins and presses raw cotton
and extracts oil from cotton seeds at its unit at Sillod in
Aurangabad, Maharashtra.
KISSAN INDUSTRIES: CRISIL Reaffirms 'B' Rating on INR72.8MM Loan
----------------------------------------------------------------
CRISIL's rating on the long-term bank facility of Kissan
Industries (KI; part of the Kissan group) continues to reflect
the group's weak financial risk profile, marked by high gearing
and average debt protection metrics, small scale of operations,
and large working capital requirements. The rating also factors
in susceptibility to unfavourable regulations on paddy and rice
prices. These rating weaknesses are partially offset by the
group's integrated operations, and the promoters' extensive
experience and financial support.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 72.8 CRISIL B/Stable (Reaffirmed)
For arriving at the rating, CRISIL has combined the business and
financial risk profiles of KI and Kissan Solvex Pvt Ltd (KSPL).
This is because the two entities, together referred to as the
Kissan group, have common promoters and management, and
considerable operational and business linkages with each other.
Outlook: Stable
CRISIL believes the Kissan group will continue to benefit over
the medium term from its established relationships with
customers. The outlook may be revised to 'Positive' if financial
risk profile improves, most likely driven by higher operating
margin and cash accrual, significant capital infusion by the
promoters, or better working capital management. Conversely, the
outlook may be revised to 'Negative' if working capital
requirements increase substantially, or profitability is low, or
it has large debt-funded capital expenditure, leading to further
weakening in financial risk profile.
Update
Revenue grew a healthy 20% in fiscal 2016 over the previous
fiscal, albeit on a small base; the growth was backed by higher
sales of rice bran oil and de-oiled cakes, supported by increase
in customers across India. However, operating margin was low
around 5.8% owing to increase in the prices of paddy.
Susceptibility to fluctuations in raw material prices is
magnified by sizeable inventory (around 230 days as on March 31,
2016). Revenue is expected to grow at 10% year on year, on the
back of healthy demand and addition of new customers, while
operating margin remains at 5.5-6%.
Financial risk profile remains weak - with high total outside
liabilities to tangible networth ratio and average weak debt
protection metrics - and should remain so on account of large
working capital debt, and low accretion to reserve.
Liquidity is weak, too, with low cash accrual, and sizeable
working capital borrowings. Net cash accrual may remain modest at
INR3.5-4 million. However, maturing debt remains nil.
The Kissan group, promoted by Mr. Indrajeet Singh of Jalalabad
(Punjab), manufactures rice, rice bran oil, and de-oiled cakes.
KI was set up in 1996 as a partnership firm by Mr. Singh and his
mother, Mrs. Manjeet Kaur. It had been earlier operating under
the name Kissan Rice Mill from 1975. The firm processes rice from
paddy. Its facility in Jalalabad has an installed milling
capacity of 2 tonne per hour. The firm processes 1121 variety of
basmati rice, which the bulk of revenue. It also processes non-
basmati rice.
KSPL was incorporated in 1992 to forward integrate the group's
operations into manufacturing rice bran oil and de-oiled cakes.
The company's unit, also in Jalalabad, has a capacity of 250
tonne per day. The revenue mix varies from year to year; over 90%
of revenue comes from sales of rice bran oil and the remainder
from de-oiled cake. The company also trades in other edible oil.
KISSAN SOLVEX: CRISIL Reaffirms 'B' Rating on INR120MM Cash Loan
----------------------------------------------------------------
CRISIL's rating on the long-term bank facility of Kissan Solvex
Private Limited (KSPL; part of the Kissan group) continues to
reflect the group's weak financial risk profile, marked by high
gearing and average debt protection metrics, small scale of
operations, and large working capital requirements. The rating
also factors in susceptibility to unfavourable regulations on
paddy and rice prices. These rating weaknesses are partially
offset by the group's integrated operations, and the promoters'
extensive experience and financial support.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 120 CRISIL B/Stable (Reaffirmed)
For arriving at the rating, CRISIL has combined the business and
financial risk profiles of KSPL and Kissan Industries (KI). This
is because the two entities, together referred to as the Kissan
group, have common promoters and management, and considerable
operational and business linkages with each other.
Outlook: Stable
CRISIL believes the Kissan group will continue to benefit over
the medium term from its established relationships with
customers. The outlook may be revised to 'Positive' if financial
risk profile improves, most likely driven by higher operating
margin and cash accrual, significant capital infusion by the
promoters, or better working capital management. Conversely, the
outlook may be revised to 'Negative' if working capital
requirements increase substantially, or profitability is low, or
it has large debt-funded capital expenditure, leading to further
weakening in financial risk profile.
Update
Revenue grew a healthy 20% in fiscal 2016 over the previous
fiscal, albeit on a small base; the growth was backed by higher
sales of rice bran oil and de-oiled cakes, supported by increase
in customers across India. However, operating margin was low
around 5.8% owing to increase in the prices of paddy.
Susceptibility to fluctuations in raw material prices is
magnified by sizeable inventory (around 230 days as on March 31,
2016). Revenue is expected to grow at 10% year on year, on the
back of healthy demand and addition of new customers, while
operating margin remains at 5.5-6%.
Financial risk profile remains weak - with high total outside
liabilities to tangible networth ratio and average weak debt
protection metrics - and should remain so on account of large
working capital debt, and low accretion to reserve.
Liquidity is weak, too, with low cash accrual, and sizeable
working capital borrowings. Net cash accrual may remain modest at
Rs 3.5-4 million. However, maturing debt remains nil.
About the Group
The Kissan group, promoted by Mr. Indrajeet Singh of Jalalabad
(Punjab), manufactures rice, rice bran oil, and de-oiled cakes.
KI was set up in 1996 as a partnership firm by Mr. Singh and his
mother, Mrs. Manjeet Kaur. It had been earlier operating under
the name Kissan Rice Mill from 1975. The firm processes rice from
paddy. Its facility in Jalalabad has an installed milling
capacity of 2 tonne per hour. The firm processes 1121 variety of
basmati rice, which the bulk of revenue. It also processes non-
basmati rice.
KSPL was incorporated in 1992 to forward integrate the group's
operations into manufacturing rice bran oil and de-oiled cakes.
The company's unit, also in Jalalabad, has a capacity of 250
tonne per day. The revenue mix varies from year to year; over 90%
of revenue comes from sales of rice bran oil and the remainder
from de-oiled cake. The company also trades in other edible oil.
LINCOLN INDUSTRIES: CRISIL Reaffirms B+ Rating on INR60MM Loan
--------------------------------------------------------------
CRISIL's rating on the long-term bank facilities of Lincoln
Industries Ltd continues to reflect LIL's modest scale of
operations and low profitability. The rating also factors in the
susceptibility of LIL's operating margin to intense competition
and to the regulated nature of the cotton industry. These rating
weaknesses are partially offset by the extensive industry
experience of LIL's promoters and the company's established and
reputed clientele base.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 60 CRISIL B+/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that LIL will continue to benefit over the medium
term from its promoters' extensive industry experience. The
outlook may be revised to 'Positive' in case of a substantial and
sustained increase in the company's revenue and accruals along
with better working capital management. Conversely, the outlook
may be revised to 'Negative' if LIL's revenue and cash accruals
are lower than expected, or if its working capital cycle is
stretched, or it undertakes a large debt-funded capital
expenditure programme, leading to deterioration in its financial
risk profile.
Update
LIL's scale of operations has remained modest as reflected in its
estimated operating revenue of around INR181 million in Fiscal
2016. It is estimated to have declined by 36 percent in Fiscal
2016 due to the whitefly impact on the crop. The modest scale
also limits the company's bargaining power with its suppliers and
customers. Benefiting from the extensive experience of the
promoters, growth will remain moderate as operations are
concentrated in and around Haryana mainly. Operating margin has
improved from 2.56 times to 3.05 times in fiscal 2016, the reason
for growth is LIL's intent to do more profitable business rather
than concentrating on volume.
LIL's financial risk profile remains average with low TOL/TNW
ratio of around 0.27 times for 2015-16 and in absence of any debt
funded capex, it is expected to remain below 0.5 times over
medium term The debt protection metrics is expected to remain
average with interest coverage ratios of 2.19 times in fiscal
2016 and is expected to be in the range of 1.7-2.0 times over
medium term.
LIL's liquidity is moderate with net cash accruals expected to be
in the range of INR2.5-2.8 million against no term debt
repayments, and low bank limit utilization. Gross current assets
estimated at 80 days as on March 31, 2016, driven by inventory
and receivables of 32 days and 8 days, respectively, leading to
low bank limit utilisation of 27% over the 18 months ended
Sept. 30, 2016.
LIL, established in February 1983, gins cotton and manufactures
oil and oil cakes from cotton seeds. The company also trades in
cotton and cotton seeds. Mr. Praveen Chand Dhandhania, Mr. Shyam
Sunder Bhageria, Mr. Sushil Kumar Sureka, Mrs. Rinku Dhandhania,
and Mr. Sushovan Saharoy are the company's directors. Its
operations are, however, primarily managed by Mr. Dhandhania and
Mr. Bhageria.
LOGHORN INDUSTRIES: CRISIL Lowers Rating on INR30MM Loan to B+
--------------------------------------------------------------
CRISIL has downgraded its ratings on Loghorn Industries Pvt Ltd
(LIPL; a part of the Royal group) to 'CRISIL B+/Stable/CRISIL A4'
from 'CRISIL BB-/Stable/CRISIL A4+'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 30 CRISIL B+/Stable (Downgraded
from 'CRISIL BB-/Stable')
Letter of Credit 100 CRISIL A4 (Downgraded from
'CRISIL A4+')
Proposed Long Term 20 CRISIL B+/Stable (Downgraded
Bank Loan Facility from 'CRISIL BB-/Stable')
The downgrade reflects weak liquidity, with a stretch in working
capital cycle resulting in high gross current assets (GCAs). The
downgrade also reflects deterioration in the business risk
profile, with a sustained decline in scale of operations
resulting in reduced cash flows. The group will need capital
infusion from promoters, or will have to register sustained
improvement in working capital cycle, to support liquidity.
Revenue, which registered a year-over-year decline of 22% to
INR670 million in fiscal 2016, is expected to marginally improve
by 5% in fiscal 2017. The decline in revenue was due to reduced
availability of its key raw material, timber logs. Furthermore,
the working capital cycle was stretched as reflected in high GCAs
of 308 days as on March 31, 2016 because of stretched
receivables, which resulted in higher debt reliance.
The ratings reflect below-average financial risk profile because
of modest networth, high total outside liabilities to tangible
networth ratio, and weak debt protection metrics. The ratings are
also constrained by large working capital requirement and the
susceptibility of profitability margins to volatile raw material
prices and fluctuations in foreign exchange rates. These
weaknesses are partially offset by the extensive experience of
promoters and entrenched distribution network.
For arriving at the ratings, CRISIL has combined the business and
financial risk profiles of LIPL, Royal Plywood Industries (RPI)
and Regal Plywood Industries Pvt Ltd. This is because these three
entities, together referred to as the Royal group, have business
and financial synergies.
Outlook: Stable
CRISIL believes the Royal group will continue to benefit over the
medium term from extensive experience of promoters and
established customer relationship. The outlook may be revised to
'Positive' if scale of operations and operating profitability
increase significantly and sustainably, strengthening financial
risk profile. Conversely, the outlook may be revised to
'Negative' if decline in revenue or profitability, large debt-
funded capital expenditure or capital withdrawal weakens
financial risk profile.
Visakhapatnam-based RPIPL, incorporated in 1997 by Mr. Ajit Kumar
Minda, Mr. Naresh Kumar Garg and their families, manufactures
veneer and plywood, which it sells under the brand, Donyl.
Visakhapatnam-based RPI, incorporated in 1997 by Mr. Ajit Kumar
Minda, Mr. Naresh Kumar Garg and their families, manufactures
veneer and plywood, which it sells under the brand, Donyl.
Set up in 2004, LIPL is promoted by Mr. S K Singhal and his
family. RPI is a proprietorship entity set up in 1997 by M/s. S K
Singhal & Sons Hindu Undivided Family (HUF). Both the entities
manufacture plywood veneers and laminates. The group is based out
of Visakhapatnam (Andhra Pradesh).
MEGA AUTOMOBILES: CRISIL Reaffirms B+ Rating on INR10.7MM Loan
--------------------------------------------------------------
CRISIL's rating on the bank loan facilities of Mega Automobiles
Pvt Ltd continues to reflect MAPL's modest scale of operations in
the intensely competitive automotive dealership business and
large working capital requirements. These rating weaknesses are
partially offset by the extensive industry experience of MAPL's
promoters and the company's established relationship with
principal Mahindra & Mahindra Ltd (M&M).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Overdraft Facility 95 CRISIL A4 (Reaffirmed)
Proposed Long Term
Bank Loan Facility 5 CRISIL B+/Stable (Reaffirmed)
Term Loan 10.7 CRISIL B+/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that MAPL will benefit over the medium term from
its association with M&M. The outlook may be revised to
'Positive' in case of significant improvement in accruals and
capital structure, leading to a better financial risk profile and
liquidity. Conversely, the outlook may be revised to 'Negative'
in case of large debt-funded capital expenditure or deterioration
in working capital management, adversely impacting financial risk
profile and liquidity.
Incorporated in July 1995, MAPL is an authorised dealer of
passenger vehicles and light commercial vehicles of M&M in
Ankleshwar (Gujarat). The company is promoted by Mr. Sallauddin
Baig and his family members.
MEGAMILES BEARING: ICRA Suspends B- Rating on INR5.3cr Loan
-----------------------------------------------------------
ICRA has suspended the long-term rating of [ICRA]B- assigned to
the INR5.30 crore long-term bank facilities and the short-term
rating of [ICRA]A4 assigned to the INR1.50 crore short-term bank
facilities of Megamiles Bearing Cups Private Limited. The
suspension follows ICRA's inability to carry out a rating
surveillance in the absence of the requisite information from the
company.
MEHALA MACHINES: CRISIL Assigns 'B' Rating to INR95MM Cash Loan
---------------------------------------------------------------
CRISIL has revoked the suspension of its rating on the bank
facility of Mehala Machines India Limited and assigned its
'CRISIL B/Stable' ratings to the long term bank facility of the
company. CRISIL had suspended the rating vide its Rating
Rationale dated June 30, 2014, since MMIL had not provided
necessary information required for a rating review. MMIL has now
shared the requisite information, enabling CRISIL to assign its
rating to the bank facilities.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 95 CRISIL B/Stable (Assigned;
Suspension Revoked)
The rating reflects the company's modest scale of operations,
below-average financial risk profile marked by low TOLTNW and
moderate interest coverage, and large working capital
requirement. These weaknesses are partially offset by the
extensive experience of its promoters in the textile industry.
Outlook: Stable
CRISIL believes MMIL will continue to benefit from its promoters'
extensive industry experience. The outlook may be revised to
'Positive' if there is a significant and sustained improvement in
its revenue and operating profitability, leading to better
liquidity. The outlook may be revised to 'Negative' in case of a
decline in its revenue or operating profitability, or a stretch
in its working capital cycle, or debt-funded capital expenditure,
leading to deterioration in its financial risk profile.
MMIL was established by Mr. C Subramaniam as a proprietorship
firm in 1978, and was reconstituted as a limited company in 1991.
The company is based in Tiruppur, Tamil Nadu, and imports and
sells sewing machines to garment manufacturers.
MITHRA COTTON: CRISIL Reaffirms B+ Rating on INR49MM Cash Loan
--------------------------------------------------------------
CRISIL's rating on the long-term bank facilities of Mithra Cotton
Enterprises (MCE) continues to reflect modest scale of operations
and low operating profitability in the intensely competitive
cotton ginning industry. The rating also reflects weak financial
risk profile because of small networth, high gearing and weak
debt protection metrics. These weaknesses are partially offset by
extensive experience of the promoter.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 49 CRISIL B+/Stable (Reaffirmed)
Proposed Cash
Credit Limit 51 CRISIL B+/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes MCE will continue to benefit over the medium term
from the promoter's experience. The outlook may be revised to
'Positive' if revenue and profitability increase substantially,
thereby strengthening financial risk profile. Conversely, the
outlook may be revised to 'Negative' if an aggressive, debt-
funded expansion or decline in revenue and profitability weakens
financial risk profile.
Established in 2008, Guntur-based MCE gins and presses raw cotton
and sells cotton lint and seeds. Ms Kondaveeti Siva Kumari is the
promoter.
MODERN LAMINATORS: Ind-Ra Assigns BB+ Long-Term Issuer Rating
-------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Modern
Laminators Limited (MLL) a Long-Term Issuer Rating of 'IND BB+'.
The Outlook is Stable.
KEY RATING DRIVERS
The ratings reflect MLL's moderate scale of operations, moderate
credit metrics and low EBITDA margins. The company's FY16
financials indicate revenue of INR1,109.89 mil., (FY15:
INR1,170.44 mil.). Its net leverage (total Ind-Ra adjusted net
debt/operating EBITDAR) was 3.28x in FY16 (FY15: 3.03x), interest
cover (operating EBITDA/Gross Interest Expense) was 2.57x (2.60x)
and EBITDA margins were at 3.07% (3.35%). EBITDA margins
fluctuated between 3.07% to 3.53% over FY13-FY16 due to the
volatility in raw material prices.
The ratings, however, are supported by over 20 years of operating
experience of MLL's promoters in the manufacturing of
polyethylene (HDPE) and polyvinyl chloride woven sacks. The
ratings are further supported by the company's strong
relationships with customers and suppliers.
The ratings factor in MLL's comfortable liquidity as evident from
its 86.76% average utilization of the working capital limits
during the 12 months ended September 2016.
RATING SENSITIVITIES
Positive: A significant improvement in operating profitability
leading to improvement in the overall credit metrics could be
positive for the ratings.
Negative: Deterioration in the operating profitability leading to
weaker credit metrics could be negative for the ratings.
COMPANY PROFILE
MLL was incorporated in 1992, and is engaged in manufacturing of
high-density polyethylene (HDPE) and polyvinyl chloride woven
sacks in Gorakhpur (Uttar Pradesh). The company's products are
sold to companies such as Indian Farmers Fertilizer Cooperative
Limited, Krishak Bharati Cooperative Limited, and Tata Chemicals
Ltd amongst others in the fertilizer and cement industries.
MLL's ratings:
-- Long-Term Issuer Rating: assigned 'IND BB+'/Stable
-- INR14.1 mil. term loan: assigned 'IND BB+'/Stable
-- INR100 mil. fund-based limits: assigned
'IND BB+'/Stable/'IND A4+'
-- INR60 mil. non-fund-based limits: assigned 'IND A4+'
NR AGARWAL: Ind-Ra Raises Long-Term Issuer Rating to BB+
--------------------------------------------------------
India Ratings and Research (Ind-Ra) has upgraded NR Agarwal
Industries Ltd's (NRA) Long-Term Issuer Rating to 'IND BB+' from
'IND B-'. The Outlook is Positive.
KEY RATING DRIVERS
The upgrade reflects the improvement in NRA's operating
performance over FY16 and 1HFY17 and the company's exit from
corporate debt restructuring (CDR).
In FY16, NRA's revenue increased 21.8% yoy to INR8,833 mil. and
EBITDA margins improved to 7.4% (FY15: 4.2%), driven largely by
incremental revenue generated from the higher margin yielding
writing printing paper product segment (FY16: INR3,276 mil.;
FY15: INR1,444 mil.) as well as higher capacity utilization at
Unit V (FY16: 71%; FY15: 59%). NRA's EBITDA margins improved
further in 1HFY17 to 14% owing to improved realizations and
higher production at Unit V (capacity utilization in 1HFY17:
85.7%), which led to a 18.2% yoy increase in revenue to INR5,008
mil. and allocation of fixed costs over a larger revenue base.
The improvement in margins was also aided somewhat by lower coal
prices. While Unit V commenced production in FY15, margins were
low in the initial period owing to low capacity utilization,
teething issues and discounts given by the company to establish
itself in the writing printing paper segment. Subsequently,
utilization levels have improved and the plant has stabilized,
leading to higher margins.
The CDR cell, via a letter dated Aug. 30, 2016, approved the exit
of NRA from CDR subject to payment of a recompense amount. The
company deposited INR79.8 mil. towards recompense payment in
October 2016. Hence, the company stands exited from CDR. Loans
restructured earlier had a step-up interest rate schedule which
would have been a strain on its cash flows. Consequent to the
exit from CDR, the interest rate on the term loans stands lower.
The company's liquidity position has thus benefitted from the
incremental operating cash flows from Unit V as well as the exit
from CDR. Additionally, in 1HFY17 NRA sold a commercial property
for INR147.5 mil., which it used partly for repayment of debt
availed against the purchase of the property. The sale of the
commercial property was also beneficial for liquidity.
In FY16, NRA's net leverage (net debt/operating EBITDA) and gross
interest coverage (EBITDA/gross interest expenses) improved to
5.34x (FY15: 11.94x) and 1.43x (0.85x), respectively, owing to
the improvement in EBITDA margins. Gross interest coverage for
1HFY17 stood at 3.1x. The agency expects operating margins to
correct slightly over 2HFY17 owing to an increase in coal prices.
Nevertheless, credit metrics for FY17 and FY18 are expected to be
better than the FY16 levels because of higher sales mix of higher
margin yielding writing printing paper product segment. Also,
the company does not have any major capex plans.
The ratings continue to derive support from NRA's established
presence of over two decades and its sponsors' experience in the
paper manufacturing business. NRA enjoys a strong market
position in western India and has an established agent network.
Also, demand from end-user industries remains healthy.
RATING SENSITIVITIES
Positive: Sustained improvement in operating margins leading to
credit metrics remaining comfortable while maintaining sound
liquidity may lead to a rating upgrade.
Negative: Deterioration in liquidity or credit metrics may lead
to the Outlook being revised to Stable.
COMPANY PROFILE
Incorporated in 1993, NRA manufactures various varieties of paper
including duplex board, writing, printing and newsprint. The
company has five operational manufacturing facilities, all of
which are located in Gujarat. FY16 financials indicate that
duplex board paper sales accounted for 52.5% of the company's
revenue, followed by writing and printing paper sales, which
accounted for 37.1% and newsprint sales, which accounted for the
remaining 10.4%.
NRA's ratings:
-- Long-Term Issuer Rating: upgraded to 'IND BB+'/Positive
from 'IND B-'/Stable
-- INR992.6 mil. fund-based limits (reduced from
INR1,007.6 mil.): upgraded to 'IND BB+'/Positive/'IND A4+'
from 'IND B-'/Stable/'IND A4'
-- INR742.3 mil. non-fund-based limits: upgraded to 'IND A4+'
from 'IND A4'
-- INR1,738.23 mil. term loans (reduced from INR2,046.7 mil.):
upgraded to 'IND BB+'/Positive from 'IND B-'/Stable
-- INR253.2 mil. funded interest term loans: rating withdrawn
due to refinancing of the instrument
-- INR174.5 mil. term loans: assigned 'IND BB+'/Positive
-- INR144.38 mil. term loans (reduced from INR150 mil.):
upgraded to 'IND BB+'/Positive from 'IND B-'/Stable
PARADEEP PARIVAHAN: CRISIL Suspends 'D' Rating on INR100MM Loan
---------------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of
Paradeep Parivahan Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Bank
Guarantee 10 CRISIL D
Proposed Cash
Credit Limit 100 CRISIL D
Proposed Short Term
Bank Loan Facility 100 CRISIL D
The suspension of ratings is on account of non-cooperation by
PPPL with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, PPPL is yet to
provide adequate information to enable CRISIL to assess PPPL's
ability to service its debt. The suspension reflects CRISIL's
inability to maintain a valid rating in the absence of adequate
information. CRISIL views information availability risk as a key
factor in its assessment of credit risk.
PPPL was originally set up in 2000 as a partnership firm,
Paradeep Parivahan, by Mr. Khalid Khan. The firm was
reconstituted as a private limited company with the current name
in 2006. PPPL undertakes port handling and on-shore dredging.
RAJASTHAN METALS: Ind-Ra Assigns B+ Long-Term Issuer Rating
-----------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Rajasthan Metals
(RM) a Long-Term Issuer Rating of 'IND B+'. The Outlook is
Stable.
KEY RATING DRIVERS
The ratings reflect RM' small scale of operations as indicated by
revenue of INR362.83 mil. in FY16 (FY15: INR349.75 mil., FY14:
INR320 mil.) coupled with stable EBITDA margins of 2.55% (2.38%,
1.42%); margins were stable due to inherent trading nature of
business. The ratings also reflect the entity's weak credit
metrics in FY16 with net financial leverage (total adjusted net
debt/operating EBITDAR) of 3.49x (4.53x, 3.46x) and low EBITDA
gross interest coverage (operating EBITDA/gross interest expense)
of 1.53x (1.15x, 0.51x).
The ratings are constrained by RMs' presence in a highly
fragmented and intensely competitive non-ferrous industry and
dependence on some specific suppliers.
The ratings, however, derive strength from over three decades of
experience of RMs' promoter in the non-ferrous industry and the
entity's long operational history. The ratings are supported by
the entity's strong relationship with its customers and
suppliers.
RATING SENSITIVITIES
Negative: Further deterioration in the credit metrics could lead
to a negative rating action.
Positive: A significant increase in the size of business and/or
improvement in the credit metrics could lead to a positive rating
action.
COMPANY PROFILE
RM is a proprietorship concern founded in 1974 having its offices
at Chawri Bazar in Delhi. The entity is involved in the business
of imports and trading of copper and copper alloys. The major
customers of the firm are manufacturers engaged in the field of
refrigeration, air-conditioning and engineering industries. The
entity also procures copper and brass alloy goods in bulk and
wholesales it to various customers.
RM's ratings:
-- Long-Term Issuer Rating: assigned 'IND B+'/Stable
-- INR145 mil. non-fund-based limits: assigned at 'IND A4'
-- INR40 mil. fund-based Limit: assigned at
'IND B+'/Stable/'IND A4'
-- Proposed INR5 mil. non-fund-based facility: assigned z
'Provisional IND A4'*
-- Proposed INR10 mil. fund-based facility: assigned
'Provisional IND B+'/Stable/ 'Provisional IND A4'*
*the ratings are provisional as RM plans to increase its fund-
based and non-fund-based facility in order to be able to import
bigger orders and the final rating will be assigned subject to
execution of sanction letter for the above facilities.
RAME ELECTROWIRE: CRISIL Suspends 'D' Rating on INR120MM Loan
-------------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of Rame
Electrowire Private Limited.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 114.5 CRISIL D
Inland/Import
Letter of Credit 120 CRISIL D
Term Loan 56 CRISIL D
The suspension of ratings is on account of non-cooperation by
REPL with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, REPL is yet to
provide adequate information to enable CRISIL to assess REPL's
ability to service its debt. The suspension reflects CRISIL's
inability to maintain a valid rating in the absence of adequate
information. CRISIL views information availability risk as a key
factor in its assessment of credit risk.
REPL, incorporated in 2012, is promoted by Mr. Paresh Shah, Mr.
Sandeep Mehta, and Mr. Dinesh Mehta. The company manufactures
copper wire and rods. Its plant is in Kalol (Gujarat) and became
operational in December 2012.
REGAL PLYWOOD: CRISIL Reaffirms B+ Rating on INR20MM Cash Loan
--------------------------------------------------------------
CRISIL's ratings on Regal Plywood Industries Private Limited
(RPIPL; a part of the Royal group) continue to reflect below-
average financial risk profile because of modest networth, high
total outside liabilities to tangible networth ratio, and weak
debt protection metrics. The ratings are also constrained by
large working capital requirement and susceptibility of
profitability margins to volatile raw material prices and
fluctuations in foreign exchange rates. These weaknesses are
partially offset by extensive experience of promoters and
entrenched distribution network.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 20 CRISIL B+/Stable (Reaffirmed)
Letter of Credit 140 CRISIL A4 (Reaffirmed)
Outlook: Stable
CRISIL believes Royal group will continue to benefit over the
medium term from extensive experience of promoters and entrenched
distribution network. The outlook may be revised to 'Positive' if
scale of operations reports substantial and sustained increase
while maintaining profitability margins, or if working capital
management improves. Conversely, the outlook may be revised to
'Negative' if profitability margins decline steeply, or capital
structure weakens due to stretched working capital cycle.
Visakhapatnam-based RPIPL, incorporated in 1997 by Mr. Ajit Kumar
Minda, Mr. Naresh Kumar Garg and their families, manufactures
veneer and plywood, which it sells under the brand, Donyl.
Visakhapatnam-based RPI, incorporated in 1997 by Mr. Ajit Kumar
Minda, Mr. Naresh Kumar Garg and their families, manufactures
veneer and plywood, which it sells under the brand, Donyl.
Set up in 2004, LIPL is promoted by Mr. S K Singhal and his
family. RPI is a proprietorship entity set up in 1997 by M/s. S K
Singhal & Sons Hindu Undivided Family (HUF). Both the entities
manufacture plywood veneers and laminates. The group is based out
of Visakhapatnam (Andhra Pradesh).
REWA SHIKSHA: ICRA Suspends 'B' Rating on INR6.5cr Bank Loan
------------------------------------------------------------
ICRA has suspended the [ICRA]B rating for the INR6.50 Crore bank
facilities of Rewa Shiksha Samiti. The suspension follows ICRA's
inability to carry out a rating surveillance in the absence of
the requisite information from the company.
RISHAB INTERNATIONAL: CRISIL Assigns 'B' Rating to INR70MM Loan
---------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable 'rating to the long-term
bank facility of Rishab International - Safidon (RI).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Inventory Funding Facility 50 CRISIL B/Stable
Proposed Inventory Funding 70 CRISIL B/Stable
The rating reflects the firm's modest scale of operations in the
intensely competitive basmati rice market. The rating also
factors in firm's below average financial risk profile marked by
high leverage and subdued debt protection metrics. These rating
weaknesses are partially offset by the extensive industry
experience the proprietor and their financial support, and
benefits expected from the healthy growth prospects for the
basmati rice industry.
Outlook: Stable
CRISIL believes RI will continue to benefit over the medium term
from the extensive industry experience of its partners. The
outlook may be revised to 'Positive' in case of an increase in
revenue and profitability or significant capital infusion,
leading to a better financial risk profile, particularly capital
structure. Conversely, the outlook may be revised to 'Negative'
in case of weakening of the capital structure, lower-than-
expected cash accrual, or substantial debt-funded capital
expenditure.
Established in 1997 by Mr. Sandeep Kumar Jain, RI is a
proprietorship firm, engaged in processing and sale of basmati
rice. Its facility is at Safidon Haryana.
ROLAND CERAMIC: CRISIL Reaffirms B+ Rating on INR47.3MM Loan
------------------------------------------------------------
CRISIL's ratings on the bank facilities of Roland Ceramic
continue to reflect the firm's small scale of operations in the
highly competitive ceramics industry, its large working capital
requirement, and its leveraged capital structure. These
weaknesses are partially offset by its production unit's
strategic location and its promoters' extensive industry
experience.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 10 CRISIL A4 (Reaffirmed)
Cash Credit 30 CRISIL B+/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility 24.9 CRISIL B+/Stable (Reaffirmed)
Term Loan 47.3 CRISIL B+/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes RC will continue to benefit from its promoters'
extensive industry experience. The outlook may be revised to
'Positive' if a significant increase in revenue and profitability
leads to larger-than-expected accrual, and if the financial risk
profile improves because of equity infusion or better liquidity.
The outlook may be revised to 'Negative' if the financial risk
profile weakens, due to a decline in profitability, or a stretch
in working capital requirement, or debt-funded capital
expenditure.
RC, formed in 2013, is promoted by Morbi, Gujarat-based Mr.
Nitinbhai Dalsaniya, Mr. Manishbhai Moradiya, Mr. Rohanbhai
Kundaria, and other partners. It manufactures wall tiles under
the Roland brand.
ROYAL PLYWOOD: CRISIL Lowers Rating on INR40MM LT Loan to B+
------------------------------------------------------------
CRISIL has downgraded its ratings on Royal Plywood Industries
(RPI; a part of Royal Plywood group) to 'CRISIL B+/Stable/CRISIL
A4' from 'CRISIL BB-/Stable/CRISIL A4+'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 20 CRISIL B+/Stable (Downgraded
from 'CRISIL BB-/Stable')
Letter of Credit 80 CRISIL A4 (Downgraded from
'CRISIL A4+')
Proposed Long Term 40 CRISIL B+/Stable (Downgraded
Bank Loan Facility from 'CRISIL BB-/Stable')
The downgrade reflects weak liquidity, with a stretch in working
capital cycle resulting in high gross current assets (GCAs). The
downgrade also reflects deterioration in the business risk
profile, with a sustained decline in scale of operations
resulting in reduced cash flows. The group will need capital
infusion from promoters, or will have to register sustained
improvement in working capital cycle, to support liquidity.
Revenue, which registered a year-over-year decline of 22% to Rs
670 million in fiscal 2016, however expected to marginal improve
by 5% in fiscal 2017. The decline in revenue is due to reduced
availability of its key raw material, timber logs. Furthermore,
the working capital cycle was stretched as reflected in high GCAs
of 308 days as on March 31, 2016 because of stretched
receivables, which resulted in higher debt reliance.
The ratings reflect below-average financial risk profile because
of modest networth, high total outside liabilities to tangible
networth ratio, and weak debt protection metrics. The ratings are
also constrained by large working capital requirement and the
susceptibility of profitability margins to volatile raw material
prices and fluctuations in foreign exchange rates. These
weaknesses are partially offset by the extensive experience of
promoters and entrenched distribution network.
For arriving at the ratings, CRISIL has combined the business and
financial risk profiles of RPI, Loghorn Industries Pvt Ltd (LIPL)
and Regal Plywood Industries Pvt Ltd (RPIPL). This is because
these three entities, together referred to as the Royal Plywood
group, have business and financial synergies.
Outlook: Stable
CRISIL believes the Royal Plywood group will continue to benefit
over the medium term from extensive experience of promoters and
established customer relationship. The outlook may be revised to
'Positive' if scale of operations and operating profitability
increase significantly and sustainably, strengthening financial
risk profile. Conversely, the outlook may be revised to
'Negative' if decline in revenue or profitability, large debt-
funded capital expenditure or capital withdrawal weakens
financial risk profile.
About the Group
Visakhapatnam-based RPIPL, incorporated in 1997 by Mr. Ajit Kumar
Minda, Mr. Naresh Kumar Garg and their families, manufactures
veneer and plywood, which it sells under the brand, Donyl.
Visakhapatnam-based RPI, incorporated in 1997 by Mr. Ajit Kumar
Minda, Mr. Naresh Kumar Garg and their families, manufactures
veneer and plywood, which it sells under the brand, Donyl.
Set up in 2004, LIPL is promoted by Mr. S K Singhal and his
family. RPI is a proprietorship entity set up in 1997 by M/s. S K
Singhal & Sons Hindu Undivided Family (HUF). Both the entities
manufacture plywood veneers and laminates. The group is based out
of Visakhapatnam (Andhra Pradesh).
SAI SRINIVASA: CRISIL Reaffirms B+ Rating on INR100M Cash Loan
--------------------------------------------------------------
CRISIL ratings on the bank facilities of Sai Srinivasa Bottles
Private Limited continues to reflect the high degree of customer
concentration in SSB's revenue profile, and its exposure to
intense competition in the bottle trading business resulting in
low profitability margins.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 13 CRISIL A4 (Reaffirmed)
Cash Credit 100 CRISIL B+/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility 12 CRISIL B+/Stable (Reaffirmed)
The ratings of the company are also constrained on account of its
average financial risk profile marked by modest net worth,
moderate gearing, and average debt protection metrics. These
rating weaknesses are partially offset by the extensive
experience of promoters in the glass bottle industry, the
company's established relationships with customers, and efficient
working capital management.
Outlook: Stable
CRISIL believes that SSB will continue to benefit over the medium
term from promoters' extensive experience and established
relationships with customers. The outlook may be revised to
'Positive' if there is a substantial and sustained increase in
the company's profitability margins, while it registers a healthy
revenue growth, or there is a substantial increase in its net
worth on the back of sizeable equity infusion from promoters.
Conversely, the outlook may be revised to 'Negative' in case of a
steep decline in profitability margins, or significant
deterioration in capital structure, caused most likely by a
stretch in working-capital cycle.
SSB was set up in 2004 by Mr. Uppala Srinivas as a partnership
firm, and was reconstituted as a private limited company in 2011.
The company trades in glass bottles, used for packaging of
alcoholic beverages. It is based in Hyderabad (Telangana).
SARVODYA HOSPITAL: CRISIL Ups Rating on INR190MM Term Loan to B-
----------------------------------------------------------------
CRISIL has upgraded its rating on the long-term bank facility of
Sarvodya Hospital to 'CRISIL B-/Stable' from 'CRISIL D'. The
rating upgrade reflects timely servicing of interest obligations
since April 2016, backed by equity infusion by, and unsecured
loans received from, promoters.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 190 CRISIL B-/Stable (Upgraded
from 'CRISIL D')
The firm is exposed to project-related risks, with no track
record of operations in the medical services industry, as the
hospital is yet to commence operations. Nevertheless, the
hospital receives funding support from promoters. There has been
significant delay in commencement of operations (originally
scheduled in December 2015); operations are now expected to start
from February-March 2017. Repayment towards the term loan is
likely to commence from October 2017.
Outlook: Stable
CRISIL believes SH will continue to receive funding support from
its promoters over the medium term. The outlook may be revised to
'Positive' in case of earlier-than-expected ramp up of
operations, leading to better-than-expected cash accrual.
Conversely, the outlook may be revised to 'Negative' in case of
significant delays in commencement of operations, or more-than-
expected reliance on debt to fund working capital requirements,
leading to weakening of the financial risk profile.
SH, established in 2011, is constructing a 110-bed multi-
speciality hospital at Jalandhar, with departments such as
cardiology, neurology, and urology.
SERVOTECH POWER: CRISIL Assigns B+ Rating to INR62.6MM Loan
-----------------------------------------------------------
CRISIL has revoked the suspension of its ratings on the bank
facilities of Servotech Power Systems Pvt Ltd and assigned its
'CRISIL B+/Stable/CRISIL A4' ratings to the facilities. CRISIL
had suspended the ratings on December 28, 2015, as Servotech had
not provided necessary information required for a rating review.
The company has now shared the requisite information, enabling
CRISIL to assign ratings to its facilities.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 40 CRISIL A4 (Assigned;
Suspension Revoked)
Cash Credit 62.6 CRISIL B+/Stable (Assigned;
Suspension Revoked)
Letter of Credit 75 CRISIL A4 (Assigned;
Suspension Revoked)
Loan Against Property 22.4 CRISIL B+/Stable (Assigned;
Suspension Revoked)
The ratings reflect the company's high gearing and subdued debt
protection metrics, modest scale of operations in the fragmented
LED lighting and power storage equipment industry, large working
capital requirement, and exposure to risks inherent in tender-
based business. These weaknesses are partially offset by its
promoters' extensive industry experience and their funding
support.
Outlook: Stable
CRISIL believes Servotech will benefit over the medium term from
the extensive industry experience of its promoters, and will
maintain healthy topline growth. The outlook may be revised to
'Positive' in case of significant increase in revenue and stable
profitability, leading to more-than-expected accrual, or
improvement in working capital management resulting in a better
financial risk profile. The outlook may be revised to 'Negative'
if liquidity deteriorates due to larger-than-expected working
capital requirement or sizeable debt-funded capital expenditure.
Servotech was set up in 1998 as a partnership firm and was
reconstituted as a private limited company in 2004. It is
promoted by Mr. Raman Bhatia and Ms. Sarika Bhatia, and
manufactures LED lighting solutions, UPS (uninterruptible power
supply) systems, inverters, and batteries. It has ISO 9001:2000
and ISO 14001:2008 certifications. Servotech is based in New
Delhi and has manufacturing capacity of 0.3 million pieces per
month at its unit in Sonipat, Haryana.
SHARMA KALYPSO: ICRA Suspends D Rating on INR92cr Bank Loan
-----------------------------------------------------------
ICRA has suspended the long term rating of [ICRA]D assigned to
the INR92.00 crore bank facilities of Sharma Kalypso Private
Limited (formerly RAUS Infras Limited). The suspension follows
ICRA's inability to carry out rating surveillance in the absence
of requisite information from the company.
SHRISHTI TECHNOLOGIES: ICRA Reaffirms B+ Rating on INR6cr Loan
--------------------------------------------------------------
ICRA has reaffirmed its long term rating of [ICRA]B+ on the INR6
crore fund based limits of Shrishti Technologies.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based-long term 6.00 [ICRA]B+: reaffirmed
ICRA's rating continues to derive comfort from the extensive
experience of the management in fan manufacturing business, and
its established relations with its key customer Bajaj Electricals
Limited.
The rating is, however, constrained by the firm's modest scale of
operations. The rating also takes into account the firm's
moderate profitability levels owing to low value additive nature
of its core business. The rating is further constrained by the
relatively high gearing levels of the firm, primarily owing to
high working capital debt coupled with the firm's modest net
worth. The firm made drawings of INR0.74 crore and INR0.86 crore
in FY2015 and FY2016 respectively, and thereby limiting the
firm's capital to INR3.86 crore and INR3.53 crore as on March
2016 and March 2015 respectively.
Going forward, the ability of the firm to increase its scale of
operations, diversify its customer base and improve its capital
structure will be the key rating sensitivities.
Shrishti Technologies is a partnership firm of the Tibrewal
family and has its manufacturing facility in Baddi, Himachal
Pradesh with a n installed capacity of 11.50 lakh units per
annum. The firm is engaged in the assembling and manufacturing of
electric fans for Bajaj Electricals Limited, Luminous Power
Technologies Private Limited, Maharaja Whiteline Industries
Private Limited and Anchor Electricals Private Limited.
Recent Results
Shrishti Technologies reported an operating income of INR82.39
crore and a net profit of INR0.88 crore in FY2016, as against an
operating income of INR81.43 crore and a net profit of INR0.74
crore in the previous year.
SOMA INDUS: CRISIL Reaffirms 'B' Rating on INR18.5BB Term Loan
--------------------------------------------------------------
CRISIL's rating on the long-term bank facilities of Soma Indus
Varanasi Aurangabad Tollway Private Limited (SIVATPL formerly
known as Soma Isolux Varanasi Aurangabad Tollway Private Limited)
reflects pick-up in project execution albeit significant time and
cost overruns.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term
Bank Loan Facility 1500 CRISIL B/Stable (Reaffirmed)
Term Loan 18500 CRISIL B/Stable (Reaffirmed)
The project has adequate funds in the escrow account. The project
entails revised milestones and terms based on supplementary
agreement entered with National Highways Authority of India
(NHAI, rated 'CRISIL AAA/Stable'). Following the supplementary
agreement entered with NHAI, the term loans were restructured in
March 2016, and the repayment is scheduled to start from December
2017.
CRISIL believes that the project continues to face high
implementation risk, with slow construction progress and non-
availability of complete right of way (ROW) for balance 69.2 km
out of total 192.4 km. However, the company benefits from its
strategic location and presence of industrial areas on the
project highway. SIVATPL's ability to successfully execute the
project without any further cost and time overruns and timeliness
in meeting the debt obligations will remain the key rating
sensitivity factors.
The rating reaffirmation is based on limited information shared
by the company.
Outlook: Stable
CRISIL believes that SIVATPL will be exposed to high project
implementation risk, though it will continue to benefit from its
strategic project location resulting in healthy toll revenue. The
outlook may be revised to 'Positive' if the progress on the
project is better than CRISIL's expectation, leading to
completion of the project as per the revised schedule and within
the budget. Conversely, the outlook may be revised to 'Negative'
if the project faces further substantial delays, leading to
liquidity constraints.
Incorporated in 2010, SIVATPL (erstwhile, Soma Isolux Varanasi
Aurangabad Tollway Pvt Ltd.) is a special-purpose vehicle (SPV)
set up by Indus Concessions India Pvt Ltd and Soma Enterprises
Ltd. The project entails augmentation of existing four-lane into
six-lane of Varanasi Aurangabad section of NH-2 (connecting
Delhi-Agra-Allahabad-Varanasi-Aurangabad-Kolkata, one of the
important arm of Golden Quadrilateral) from km 786 to km 978.40
(length of 192.40 km) in the state of Uttar Pradesh and Bihar on
a design, build, finance, operate, and transfer (DBFOT) toll
basis. This project was awarded by NHAI under NHDP Phase-V. The
concession period for the project is 30 years, including
construction period of 30 months.
The project execution is behind schedule, mainly on account of
non-availability of complete ROW and difficulty in procuring
aggregates for construction work due to mining ban in the State
of Bihar in the past. As of July 2016, the company received about
64% of ROW and completed about 51% of construction work. The
company has signed a supplementary agreement with NHAI in January
2015, and the commercial operation date has been revised to
June 30, 2017.
The company commenced tolling on the existing four-lane stretch
from September 12, 2011, and booked tolling revenue of INR2.67
billion and INR1.39 billion in fiscal 2016 and the first six
months ending fiscal 2017, respectively. Toll collections
continue to support the equity infusion requirement in the
company, as a part of project funding plan.
STALWART ALLOYS: CRISIL Assigns B+ Rating to INR120MM Cash Loan
---------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the bank
facility of Stalwart Alloys India Private Limited (SAIPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 120 CRISIL B+/Stable
The rating reflects SAIPL's average financial-risk profile marked
by weak debt protection metrics and large working capital
requirement. The rating also factors in SAIPL's modest scale of
operations with operating margin vulnerable to volatility in raw
material prices. These weaknesses are offset by the extensive
industry experience of its promoters.
Outlook: Stable
CRISIL believes SAIPL will continue to benefit from the long
standing experience of its promoters in the lead industry. The
outlook may be revised to 'Positive' if improvement in scale of
operations and profitability leads to healthy cash accrual and
efficient working capital management. The outlook may be revised
to 'Negative' if decline in profitability, resulting in low
accrual, or stretch in working capital cycle, or large debt-
funded capital expenditure exerts pressure on liquidity.
Incorporated in 2014 by Mr. Sandeep Garg and his wife Ms Shilpi
Garg, SAIPL manufactures lead alloys, refined lead, lead sub-
oxide grey and calcium lead. Its production unit, located at
Kurukshetra (Haryana).
SULOCHANA AGRO: CRISIL Reaffirms 'B' Rating on INR67.5MM Loan
-------------------------------------------------------------
CRISIL's rating on the long-term bank facilities of Sulochana
Agro and Infratech Pvt Ltd continues to reflect SAIPL's modest
scale of operations in the intensely competitive edible oils
industry and its working-capital-intensive operations. The rating
also factors in SAIPL's below-average financial risk profile
marked by modest net worth, high gearing and weak debt protection
metrics. These rating weaknesses are partially offset by the
extensive industry experience of SAIPL's promoters.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 67.5 CRISIL B/Stable (Reaffirmed)
Long Term Bank
Facility 28.0 CRISIL B/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility 54.5 CRISIL B/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes SAIPL will continue to benefit over the medium
term from the promoters' extensive industry experience and its
established customer relationships. The outlook may be revised to
'Positive' if there is substantial and sustained increase in its
scale of operations, while maintaining its profitability margins,
or there is sustained improvement in its working capital cycle.
Conversely, the outlook may be revised to 'Negative' if
profitability margins decline steeply or a significant
deterioration in its capital structure caused most likely because
of a stretch in its working capital cycle.
Incorporated in 2006, SAIPL manufactures rice bran oil and de-
oiled rice bran, which are used as animal feed. Its processing
facilities are in Nalgonda (Telangana). The company is managed by
Mr. T Mahender Reddy.
SYNERGY TELECOM: CRISIL Suspends 'D' Rating on INR285MM Cash Loan
-----------------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of
Synergy Telecommunications.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 285 CRISIL D
Letter of Credit 11 CRISIL D
Proposed Long Term
Bank Loan Facility 254 CRISIL D
The suspension of ratings is on account of non-cooperation by
Synergy with CRISIL's efforts to undertake a review of the
ratings outstanding. Despite repeated requests by CRISIL, Synergy
is yet to provide adequate information to enable CRISIL to assess
Synergy's ability to service its debt. The suspension reflects
CRISIL's inability to maintain a valid rating in the absence of
adequate information. CRISIL views information availability risk
as a key factor in its assessment of credit risk.
Synergy, set up in 2006, is a partnership firm that provides
passive infrastructure services to various telecom operators and
is a supplier of pre-fabricated building structures. The firm's
day-to-day operations are managed by Mr. Harpal Singh and his
wife, Mrs. Rachana Singh.
UNITED CORPORATION: CRISIL Cuts Rating on INR70MM Loan to 'D'
-------------------------------------------------------------
CRISIL has downgraded its ratings on the bank facilities of
United Corporation to 'CRISIL D/CRISIL D' from 'CRISIL BB-
/Stable/CRISIL A4+'. The downgrade reflects liquidity crunch
which resulted in cash flow mismatch in the company.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 70 CRISIL D (Downgraded from
'CRISIL BB-/Stable')
Proposed Short Term 5 CRISIL D (Downgraded from
Bank Loan Facility 'CRISIL A4+')
The ratings continue to factor in the firm's average financial
risk profile, geographical concentration in revenue, and exposure
to intense competition. These weaknesses are partially offset by
the extensive experience of the promoters, and the firm's
diversified customer base and established relationships with
principals.
Set up in 1977, UC trades in and distributes alcoholic beverages.
The firm is an authorised distributor for six districts in
northern West Bengal of Indian-made foreign liquor of Pernod
Ricard India Pvt Ltd, Jagatjit Industries Ltd (JIL), Radico
Khaitan, Mohan Meakin Ltd, and Beam Global Spirits & Wine; of
beer manufactured by Carlsberg India Pvt Ltd and InBev India
International Ltd (Budweiser); and of wines of Sula Vineyards Ltd
(Sula Wine) and Remy Martin. For JIL, Budweiser, and Sula Wine,
UC is the exclusive distributor in its area of operations.
VHB MEDISCIENCES: CRISIL Raises Rating on INR348.7MM Loan to BB+
----------------------------------------------------------------
CRISIL has upgraded its ratings on the bank facilities of VHB
Medisciences Ltd to 'CRISIL BB+/Stable/CRISIL A4+' from 'CRISIL
B/Stable/CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 40 CRISIL A4+ (Upgraded
from 'CRISIL A4')
Cash Credit 138.4 CRISIL BB+/Stable (Upgraded
from 'CRISIL B/Stable')
Inland/Import 60 CRISIL A4+ (Upgraded from
Letter of Credit 'CRISIL A4')
Proposed Long Term 348.7 CRISIL BB+/Stable (Upgraded
Bank Loan Facility from 'CRISIL B/Stable')
Term Loan 213.7 CRISIL BB+/Stable (Upgraded
from 'CRISIL B/Stable')
Working Capital 161.6 CRISIL BB+/Stable (Upgraded
Demand Loan from 'CRISIL B/Stable')
Working Capital 337.6 CRISIL BB+/Stable (Upgraded
Term Loan from 'CRISIL B/Stable')
The upgrade follows strengthening of the credit risk profile of
VHB Medi's parent Neon Laboratories Ltd (Neon; rating upgraded to
'CRISIL BBB+/Stable/CRISIL A2' from 'CRISIL BBB-/Positive/CRISIL
A3'). The upgrade also factors in expectation that VHB Medi's
business and financial risk profiles will improve over the medium
term, backed by stabilisation of operations.
With operations stabilising in fiscal 2016, VHB Medi is expected
to report turnover of around INR750 million in fiscal 2017 and a
healthy operating margin of 27%. Receipt of US Food and Drug
Administration (USFDA) certification expected shortly should also
help boost revenue and profitability, through growth in high-
margin export orders. Moreover, financial support from Neon is
expected to be limited towards timely servicing of loan repayment
obligations, if any.
VHB Medi continues to benefit from the extensive experience of
the promoters, its diversified product profile, and funding
support from Neon in servicing debt on time. These rating
strengths are partially offset by working capital intensity in
operations and weak financial risk profile.
For the previous rating exercise, CRISIL had combined the
business and financial risk profiles of VHB Medi and VHB Life
Sciences Ltd (rating upgraded to 'CRISIL BB+/Stable/CRISIL A4+'
from 'CRISIL B/Stable/CRISIL A4'). CRISIL has now considered VHB
Medi's standalone business and financial risk profiles and
applied its parent notch-up framework to factor in need-based
funding support from Neon.
Outlook: Stable
CRISIL believes VHB Medi will continue to benefit over the medium
term from its promoters' extensive experience. The outlook may be
revised to 'Positive' if VHB Medi's financial risk profile
improves substantially and sustainably, while revenue growth
remains healthy. Conversely, the outlook may be revised to
'Negative' in case of a steep decline in profitability, or
significant deterioration in capital structure caused most likely
by stretch in working capital cycle. Financial support received
from Neon will continue to be a key rating sensitivity factor.
VHB Medi, incorporated in 2007, manufactures injectables. The
facility at Rudrapur, Uttrakhand is USFDA compliant, though
certification is pending. It was acquired by Neon in fiscal 2011.
Profit after tax was INR4 million on net sales of INR734 million
in fiscal 2016-against net loss and net sales of INR41 million
and INR739 million, respectively, the previous fiscal.
VISHWAS BUILDCON: ICRA Reaffirms B+ Rating on INR23cr Term Loan
---------------------------------------------------------------
ICRA has re-affirmed the long-term rating of [ICRA]B+ assigned to
the INR23.001 crore term loan of Vishwas Buildcon.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based Limit-
Term loan 23.00 [ICRA]B+; re-affirmed
The rating re-affirmation continues to remain constrained by VB's
exposure to time and cost over-runs, given that ~41% of the
construction cost is yet to be incurred. The rating also takes
into account the exposure of the firm's operations to the
cyclicality inherent in the real estate sector, as well as the
risks of capital withdrawal associated with the partnership
nature of the firm.
The rating, however, continues to derive comfort from the
promoters' extensive experience in the development of real estate
within Surat through associate concerns. Furthermore, owing to
the requisite approvals being in place, the firm's exposure to
regulatory risks remains low. Approximately 69% of the project's
saleable area has been booked as on 30th September 2016 and the
firm has received healthy collections from its customers. VB has
utilised these funds to prepay 39% of the term loan disbursed to
it which is a rating positive.
With 69% of the project being booked as on 30th September 2016,
the pace of future bookings and timely receipt of customer
advances, coupled with the timely completion of the project, will
remain critical for the firm's debt servicing which is to
commence from May 2017.
Established in 2014 as a partnership firm, Vishwas Buildcon (VB)
is engaged in the construction of residential apartments. The
firm is based out of Surat, Gujarat, and is currently executing
its first residential project, "Opera Royal Phase I", at Kholwad
in Surat. The project consists of 23 towers comprising 447
apartments and 38 shops with a total saleable area of 4, 36, 912
sq. ft. The development of the project, which is targeted at
consumers from the lower income segment commenced in November
2014 and is expected to be completed by March 2017.
The partners of the firm have executed several projects in the
past under different partnership concerns. The firm has four
group concerns -- Vishwas Corporation, Vishwas Builders (rated
[ICRA]B+), Anjani Infra and Vishwas Hi-tech Infra Project Private
Limited.
Recent Results
VB has reported a net profit after tax and depreciation of
INR1.99 crore on an operating income of INR4.16 crore for the
year-ending March 31, 2016.
ZENOVA BIO: CRISIL Reaffirms 'D' Rating on INR66MM LT Loan
----------------------------------------------------------
CRISIL's rating on the bank facilities of Zenova Bio Nutrition
Private Limited (ZBNPL) continues to reflect instances of delay
by ZBNPL in servicing its debt obligations owing to weak
liquidity on account of delay in stabilization of its project.
The company's financial risk profile is also weak, marked by high
gearing and weak debt protection metrics. However, ZBNPL benefits
from its promoters' extensive industry experience.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 30 CRISIL D (Reaffirmed)
Long Term Loan 66 CRISIL D (Reaffirmed)
ZBNPL was incorporated in April 2010 by Mr. K V Rambabu and Mr. C
Sarat Chandra. The company has set up a plant to manufacture
medicinal nutraceutical products in the form of powder as well as
compressed diskettes.
=================
I N D O N E S I A
=================
JAPFA COMFEED: S&P Raises CCR to 'B+'; Outlook Stable
-----------------------------------------------------
S&P Global Ratings said that it had raised its long-term
corporate credit rating on PT Japfa Comfeed Indonesia Tbk. to
'B+' from 'B'. The outlook is stable. At the same time, S&P
raised its long-term ASEAN regional scale rating on the
Indonesia-based integrated poultry producer to 'axBB' from 'axBB-
'. S&P also raised its long-term issue rating on the senior
unsecured debts that Japfa guarantees to 'B+' from 'B'.
"We raised the ratings to reflect Japfa's initiatives to lengthen
its debt maturity profile and because its operating and financial
performances have surpassed our base-case expectations," said S&P
Global Ratings credit analyst Eric Nietsch.
Japfa's strong operations and financial results should lead to
increased cash flows in 2016. Low raw material costs in the feed
business, as well as rising prices in the day-old chick and
broiler chicken segments helped drive record profitability.
Japfa generated EBITDA of nearly Indonesian rupiah (IDR) 3
trillion in the first nine months of the year. That is almost
30% higher than EBITDA in all of 2015, which previously had the
most revenue and EBITDA of any year in the company's history.
However, S&P expects future margins to be lower as these
tailwinds normalize in the next couple years.
While S&P expects Japfa's profitability to be high this year,
spending will remain moderate. S&P estimates capital
expenditures to remain around IDR750 billion in this year and the
next, which is about half of the IDR1.5 trillion average during
the company's expansionary phase between 2012 and 2014. This
high profitability and limited spending should lead to stronger
free cash flows and higher cash balances over the next 12 months
than S&P had previously expected. Furthermore, S&P believes this
will facilitate the company's refinancing efforts.
S&P believes Japfa's plans to address upcoming maturities are
appropriate and feasible. The company will be able to fund its
rupiah bond due 2017 with cash on hand, including the equity
injection from minority equity sponsor Kohlberg Kravis Roberts,
and a proposed IDR3 trillion credit facility or IDR1 trillion
back stop from DBS Bank Ltd. Japfa could then finance its US$199
million 2018 maturity with cash flows, funds from the proposed
credit facility, or a separate refinancing transaction. The
upgrade reflects S&P's view that these options are realistic, and
mitigate the liquidity and refinancing risks associated with the
maturing bonds.
"The stable outlook reflects Japfa's reduced refinancing risk and
our view of more supportive industry conditions in the next 12
months," said Mr. Nietsch. "The outlook is stable even though we
expect margins will normalize and be lower than the strong levels
of the past nine months."
S&P could lower the rating if it assess the credit quality of
Japfa Ltd., Japfa's majority shareholder, to have weakened.
Given Japfa's large contribution to the parent's consolidated
revenues and EBITDA, S&P could lower the group credit profile if
Japfa's FFO interest coverage falls below 3x on a sustained
basis. This could materialize if the Indonesia operations
weaken, with the company's EBITDA margin falling below 7.0% and
the company pursuing expansionary capital spending. S&P could
also downgrade Japfa if the company fails to execute its
refinancing strategy for the 2018 U.S. dollar bonds within the
next 12 months.
S&P could raise the rating if Japfa sustains its recently
improved operating conditions and manages its capital spending
such that the FFO-to-debt ratio stays above 30% on a sustained
basis. An upgrade would be contingent on the company lengthening
its debt maturity profile.
=========
J A P A N
=========
MITSUBISHI MOTORS: S&P Affirms 'BB-' CCR & Removes from Watch
-------------------------------------------------------------
S&P Global Ratings said it has affirmed its long-term corporate
credit rating on Japan-based automaker Mitsubishi Motors Corp. at
'BB-' and has removed the rating from CreditWatch. The outlook
on the long-term corporate credit rating is negative. S&P placed
the rating on CreditWatch with negative implications on April 22,
2016, after the company revealed it had falsified fuel-economy
test data. S&P kept the rating on CreditWatch negative when it
lowered it two notches on May 16, 2016, and S&P again kept the
rating on CreditWatch negative on Aug. 3, 2016.
Mitsubishi Motors' admission in April 2016 that it falsified
fuel-economy test data dealt a heavy blow to its domestic auto
sales, which tumbled to 29,000 units in the fiscal first half
(April 1-Sept. 30, 2016,) from 46,000 units in the same period of
the previous year. Although the year-on-year decline in unit
sales shows signs of easing, S&P expects the fallout to linger
into the fiscal second half (Oct. 1, 2016-March 31, 2017),
causing its domestic unit sales for the full fiscal year to
largely undershoot last fiscal year's figures. Also, sluggish
commodity prices and worsening economies in Russia, the Middle
East, Latin America, and Asia and are eroding the company's unit
sales in those markets. A strong yen and intensifying
competition are likely to push its North America and Europe
operations into losses. S&P believes Mitsubishi Motors' slumping
profitability leaves it with relatively weaker business
competitiveness than the average of other corporations with
equivalent business risk profiles.
Mitsubishi Motors expects to make a net loss of JPY240 billion
for fiscal 2016 (ending March 31, 2017), mainly due to JPY205
billion in costs related to data falsification, including
reimbursements to suppliers and impairment losses at its mini-
vehicle plant. Still, S&P expects Nissan Motor Co. Ltd.'s
injection of about JPY237 billion into Mitsubishi Motors in
October 2016 to cover most of the near-term financial burden
resulting from the data falsification. In addition, S&P assumes
Mitsubishi Motors will recover its levels of cash and deposits to
more than JPY400 billion and its capital to more than JPY600
billion as of March 31, 2017. Therefore, S&P believes Mitsubishi
Motors is likely to maintain its financial strength for now.
With support from Nissan Motor, Mitsubishi Motors plans to reform
its development division, which was responsible for the data
falsification, to prevent recurrences. It also plans to use
Nissan Motor's operational know how to accelerate its decision
making and improve its internal control regime. The partners aim
to realize additional benefits in various areas, such as joint
procurement and sharing of vehicle platforms and technology.
However, S&P currently takes a cautious stance regarding the
likelihood that its operating performance will swiftly stabilize
or that Nissan Motor will provide additional support in future.
S&P needs to prudently determine whether the partners will make
progress undertaking these initiatives under the new structure
and whether the initiatives will lead to a stronger, more stable
governance regime. S&P will consider its assessment of
Mitsubishi Motors as a member of the Nissan Motor group,
including whether any mutual benefits across a wide range of
areas will heighten Mitsubishi Motors' strategic importance to
the Nissan Motor group.
"We assess Mitsubishi Motors' liquidity as strong, with sources
of liquidity likely to exceed 1.5x uses over the next year. We
expect its very close relationships with its main domestic
creditor banks to continue to underpin the company's financing
capabilities. Our assumptions as of the end of September 2016
are: principal liquidity sources of about JPY343 billion in cash
and deposits and JPY237 billion in capital from Nissan Motor; and
principal liquidity uses of about JPY33 billion in debt maturing
within one year, JPY71 billion in capital expenditures, and about
JPY140 billion in extraordinary losses related to the data
falsification, which entails cash payments," S&P said.
The outlook is negative because S&P believes a recovery in
operating performance in the next six to 12 months remains
uncertain, given the risk that unit sales could fall further both
at home and abroad and that the yen could appreciate further.
Also, it will take time before S&P can determine whether the
company actually enhances its internal controls and governance
regime under the new structure.
"We will consider downgrading Mitsubishi Motors if we see a
heightened likelihood of the company's fiscal 2017 operating
profit falling short of our assumption of about JPY30 billion to
JPY40 billion. This may occur if the company's operating
performance stages a slow recovery because of, for example, a
further decline in overseas unit sales, particularly in key
Southeast Asian markets, or a rapid appreciation of the yen. We
would also consider a downgrade if free cash flow remained
largely negative in and beyond fiscal 2017 and we see a
heightened likelihood of funds from operations to adjusted debt
falling below 60%. Absence of any improvement in governance,
which could show in the form of further improper conduct, would
also be cause to consider a downgrade," S&P noted.
Conversely, S&P would revise the outlook to stable if it sees a
shrinking risk of the company's operating performance
deteriorating, with unit sales at home and abroad turning up as
the impact of the data falsification peters out, the company
returning to profit on an operating basis in the second half of
fiscal 2016, and a concrete plan for additional benefits from the
alliance with Nissan Motor eventuating in fiscal 2017 and beyond.
===============
M A L A Y S I A
===============
1MALAYSIA: Ex-BSI Banker Yak Found Guilty in Singapore
------------------------------------------------------
Andrea Tan and Livia Yap at Bloomberg News report that Yak Yew
Chee, a former BSI SA private banker, became the first person to
be found guilty in a Singapore case linked to 1Malaysia
Development Bhd. He also became the first banker to be convicted
in the global corruption and money laundering probes surrounding
the Malaysian investment fund, the report says.
According to Bloomberg, Mr. Yak pleaded guilty in a Singapore
court on Nov. 11 and the judge convicted him of four charges,
including forging documents and failing to disclose suspicious
transactions allegedly related to Malaysian financier Low Taek
Jho. Bloomberg says the former senior banker at BSI had faced
seven charges, and prosecutors said the other three charges would
be taken into consideration for sentencing.
Bloomberg relates that Low has been named as a key person of
interest by Singapore authorities and characterized by U.S.
prosecutors as the controller of an illicit payments scheme
draining billions from the Malaysian investment fund. The high-
living financier had previously described his role with 1MDB as
informal consulting that didn't break any laws.
Mr. Yak, along with his former subordinate Yvonne Seah Yew Foong,
were charged last month for their roles in forging bank reference
letters and not reporting suspicious banking activities allegedly
involving Low, according to Bloomberg. Mr. Yak, 57, was also a
banker for 1MDB and related entities, his lawyer had said
previously. Another of Mr. Yak's former colleagues, Yeo Jiawei,
is currently on trial for obstructing justice by attempting to
tamper with witnesses in the probe, Bloomberg relates.
The judge sentenced Mr. Yak to 18 weeks in jail and a SGD24,000
fine, Bloomberg discloses.
"It is imperative that the public confidence in the integrity of
Singapore's banking and financial industry is zealously
protected," Judge Jennifer Marie said in handing down the
sentence, Bloomberg relays. "Bank officers should be seeking to
safeguard the public trust and confidence in the financial
industry and not succumb to the greed and the lure of huge
bonuses or the treachery of 'important' clients."
Mr. Yak was remorseful and took his cue from the top management
at BSI in his dealings with Low, his lawyer Lee Teck Leng said.
Yak will voluntarily disgorge SGD7.5 million and agree to
cooperate with prosecutors, Lee said, Bloomberg relays. The
convicted banker through his lawyer pleaded for leniency for his
long-time colleague Seah, who hasn't pleaded on her charges.
Mr. Yak "had no reasonable grounds to believe that Low was
involved in criminal conduct," or that there was something amiss
with the purported 1MDB investments, Mr. Lee, as cited by
Bloomberg, said. "Low very frequently declined to provide further
details or explanation on the ground that the deals were
government to government and hence state secret."
Singapore regulators have ordered BSI and Falcon Private Bank to
stop operations for money laundering breaches related to moving
funds associated with 1MDB, Bloomberg says.
The case is Public Prosecutor v Yak Yew Chee, Singapore State
Courts, Bloomberg notes.
About 1MDB
Kuala Lumpur-based 1Malaysia Development Bhd (1MDB) operates as a
government agency. The Company offers financial assistance,
analysis, and advice through investors, corporations, and
consultants to startups and growth companies. 1MDB focuses on
investments with strategic value and high multiplier effects on
the economy, particularly in energy, real estate, tourism, and
agribusiness.
As reported in the Troubled Company Reporter-Asia Pacific on
July 23, 2015, Reuters said Singapore Police Force has frozen two
bank accounts to help with an investigation in to Malaysia's
troubled state-owned investment fund 1Malaysia Development Bhd
(1MDB), which is being probed by authorities in Malaysia for
financial mismanagement and graft. Reuters said the freezing of
the Singapore bank accounts follows a similar move in Malaysia
where a task force investigating 1MDB said earlier in July that
it had frozen half a dozen bank accounts following a media report
that nearly $700 million had been transferred to an account of
Malaysia's Prime Minister Najib Razak.
The Wall Street Journal reported on July 3, 2015, that
investigators looking into 1MDB had traced close to US$700
million of deposits moving through Falcon Bank in Singapore into
personal bank accounts in Malaysia belonging to Najib.
The TCR-AP, citing Bloomberg News, reported on Nov. 26, 2015,
that 1MDB agreed to sell its power assets to China General
Nuclear Power Corp. for MYR9.83 billion ($2.3 billion) as the
state investment company moved one step closer to winding down
operations after its mounting debt raised investor concern.
Bloomberg related that the company faced cash-flow problems after
a planned initial public offering of Edra faced delays amid
unfavorable market conditions, President Arul Kanda said Oct. 31,
2015. The listing plan was later canceled as the company opted
for a sale of the assets, Bloomberg noted.
The TCR-AP, citing The Wall Street Journal, reported on April 27,
2016, that the company defaulted on a $1.75 billion bond issue,
triggering cross defaults on two other Islamic notes totaling
MYR7.4 billion ($1.9 billion).
Asian Nikkei Review reported last month that Malaysia has
replaced the board of 1Malaysia Development Berhad with treasury
officials, paving the way for the dissolution of the troubled
state investment fund.
====================
S O U T H K O R E A
====================
STX OFFSHORE: Court OKs Revival Plan, Ends Court Receivership
-------------------------------------------------------------
Yonhap News Agency reports that a Seoul court on Nov. 11 gave the
nod to a plan to resuscitate cash-strapped STX Offshore &
Shipbuilding Co., paving the way for the shipyard to survive on
its own.
STX Shipbuilding, once the country's No. 4 shipbuilder, has been
placed under court receivership since June, amid a protracted
slump in the shipbuilding industry.
In a meeting of security right holders and creditors on Nov. 11,
the Seoul Central District Court approved its revival plan,
ending the financially shaky shipyard's five-month long court
receivership, Yonhap relates.
According to the report, the Seoul court said it is currently
carrying out mergers and acquisitions (M&A) procedures for a
smooth restructuring of the shipyard and is reviewing proposals
from four enterprises that have been submitted as of last week.
It is planning to receive acquisition proposals until Dec. 27.
"The court will put forth every effort possible to establish a
foothold for STX Offshore & Shipbuilding Co. to normalize and
return to the market by promptly and fairly executing the M&A
procedures and help it contribute to the country and the regional
economy," the court said, Yonhap relays.
Yonhap notes that despite over KRW4 trillion (US$3.36 billion) in
financial aid from its creditors, the shipbuilder logged an
operating loss of KRW314 billion last year following a loss of
KRW1.5 trillion the previous year.
STX Offshore & Shipbuilding was affiliated with the now-defunct
STX Group that had a business portfolio that ranged from
construction and shipping to shipbuilding and energy.
It is one of the local shipyards that have been suffering massive
losses due to delays in the construction of offshore facilities
and an industry-wide slump, Yonhap states.
About STX Offshore
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.
As reported by the Troubled Company Reporter-Asia Pacific on
Oct. 21, 2016, STX Offshore & Shipbuilding Co., Ltd., filed a
Chapter 15 petition in the U.S. Bankruptcy Court for the Southern
District of Texas in an attempt to block creditors from seizing
control of its assets in the United States.
Mr. Yoon Keun Jang, the court-appointed administrator of the
Company, seeks recognition in the United States of the Company's
legal proceedings (case number 2016 hoehap 100109 Rehabilitation)
under the Republic of Korea's Debtor Rehabilitation and
Bankruptcy Act currently pending before the Republic of Korea's
Seoul Central District Court, Third Bankruptcy Division.
Contemporaneously with the petition, Mr. Jang asks the U.S.
Bankruptcy Court to enter a preliminary injunction and temporary
restraining order prohibiting the initiation or continuation of
any collection actions against the Company in the United States
pending a hearing on the Company's petition for recognition of a
foreign proceeding pursuant to Chapter 15 of the Bankruptcy Code.
On May 27, 2016, the Company applied for a commencement of
Rehabilitation Procedure under the DRBA which initiated the
Korean Bankruptcy Proceeding. On June 7, 2016, the Korean
Bankruptcy Court issued its decision commencing rehabilitation
proceedings under the DRBA and appointing the then CEO of the
Company, Mr. Byung Mo Lee, as the Company's administrator. Mr.
Lee was later replaced by Mr. Jang pursuant to a June 28, 2016,
order of the Korean Bankruptcy Court.
===========
T A I W A N
===========
INTERNATIONAL ENGINEERING: Files for Bankruptcy
-----------------------------------------------
Sean Lin at Taipei Times reports that construction of the Taipei
Performing Arts Center, which was already running behind
schedule, came to a halt on Nov. 11, after contractor
International Engineering and Construction Co on Nov. 10
unexpectedly filed for bankruptcy.
Company president Yi Chih-fan on Nov. 10 sent a letter to his
employees, complaining about the construction and "unexpectedly
high level of technicality" and restrictions the government
imposes on public infrastructure, saying that these, compounded
by the company's financial problems, are the reasons behind its
failure to complete the construction, Taipei Times relates.
According to Taipei Times, the NT$5.4 billion (US$169.8 million)
construction in Shilin District, one of the largest
infrastructure projects in Taipei, was scheduled for completion
next month.
Taipei Times says Taipei Mayor Ko Wen-je last year told the
Taipei City Council, amid criticism of the project's delay, that
if officials overseeing the project botched it, he would
"strangle every last one of them."
Democratic Progressive Party (DPP) Taipei City Councilor Wang
Wei-chung told a news conference in Taipei that, based on his
investigation, the construction firm knew it would go bankrupt,
as it had accumulated a debt of more than NT$2 billion in recent
years, Taipei Times relays.
The company had been dishonest about its finances and undertook
the project to secure a NT$760 million down payment from the
Taipei City Government to ease its financial difficulties, Wang
said, the report relates.
Taipei Times notes that the firm's shareholding structure had
undergone several major changes since 2014 and is now solely
owned by Yi, which means the city might not be able to reclaim
the down payment and levy fines for the construction delay if Yi
has transferred his assets elsewhere, he said.
The company should not have been selected as the contractor,
because it had concealed a syndicated loan of NT$540 million that
it took from seven banks in 2011, he said, the report relays.
As of last year, the firm owed the project's subcontractors up to
NT$80 million for building materials, prompting the
subcontractors to pull workers from the construction site and
causing the construction to fall seriously behind schedule, Mr.
Wang, as cited by Taipei Times, Mr. Wang said, adds Taipei Times.
International Engineering & Construction Co is a Taiwan-based
construction company. Founded in 1981, IEC started out as a
builder of industrial pre-engineered steel structures.
*********
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 ***