/raid1/www/Hosts/bankrupt/TCRAP_Public/170126.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Thursday, January 26, 2017, Vol. 20, No. 19
Headlines
A U S T R A L I A
D&B NORTHERN: First Creditors' Meeting Slated for Feb. 3
LAKE CITY: First Creditors' Meeting Set for Feb. 3
N & F ENTERPRISES: First Creditors' Meeting Set for Feb. 3
C H I N A
CHINA PROPERTIES: S&P Affirms 'CCC+' CCR; Outlook Negative
CHINA SUNERGY: Grant Thornton Casts Going Concern Doubt
FUJIAN ZHANGLONG: Fitch Rates Prop. US$ Sr. Unsec. Bonds at 'BB+'
TIMES PROPERTY: Fitch Rates USD375MM Senior Notes Final 'B+'
H O N G K O N G
FWD LIMITED: Fitch Assigns BB+ Final Rating to USD250MM Loan
HANERGY THIN: SFC Asks court to Ban Former Chairman, 4 Directors
I N D I A
ABT LIMITED: CARE Ups Rating on INR183.96cr LT Loan to BB-
ALUCOP INDIA: CARE Ups Rating on INR10cr Long Term Loan to BB-
AMIYA STEEL: Ind-Ra Assigns 'B-' Long-Term Issuer Rating
ASHWINI FROZEN: CARE Assigns 'B' Rating to INR0.15cr LT Loan
AWADH OILS: Ind-Ra Affirms 'BB-' Long-Term Issuer Rating
BANSAL RICE: CARE Assigns 'B' Rating to INR15cr Long Term Loan
BASANTI MATA: CARE Reaffirms B+ Rating on INR8.79cr LT Loan
BHAGAWATI ESTATE: CARE Reaffirms B+ Rating on INR0.86cr LT Loan
CATVISION LIMITED: Ind-Ra Raises Long-Term Issuer Rating to 'BB+'
CHANAKYA TECHNOS: Ind-Ra Assigns 'BB-' Long-Term Issuer Rating
DTC PROJECTS: Ind-Ra Raises Long-Term Issuer Rating to 'BB'
ECOKRIN HYGIENE: Ind-Ra Affirms 'BB' Long-Term Issuer Rating
EMAAR MGF: CARE Reaffirms 'D' Rating on INR2,260cr Debenture
GULSHAN PRINTS: CARE Assigns B+ Rating to INR5.50cr LT Bank Loan
HERITAGE WORLD: CARE Assigns 'B+' Rating to INR15cr LT Loan
HI-REACH CONSTRUCTION: CARE Cuts Rating on INR8.50cr Loan to B+
JOHNS PALLAZZIO: CRISIL Assigns 'B' Rating to INR8MM LT Loan
K.A.I.G. CONSTRUCTIONS: CRISIL Assigns B+ Rating to INR4.5MM Loan
KALIKUND DEVELOPERS: Ind-Ra Affirms 'B+' Long-Term Issuer Rating
KINGFISHER AIRLINES: CBI Charges Mallya in Loan Default Case
MGM INFRA: CARE Lowers Rating on INR5.69cr Long Term Loan to D
NEERG ENERGY: Moody's Assigns Ba3 Rating to Senior Secured Notes
OVERSEAS TIMBER: Ind-Ra Affirms 'B-' Long-Term Issuer Rating
PADMAVATHI ASSOCIATES: CARE Assigns B+ Rating to INR7cr LT Loan
PALNADU INFRASTRUCTURE: CRISIL Reaffirms 'D' Term Loan Rating
RAJHANS METALS: CARE Revises Rating on INR47.35cr Loan to BB-
RATNAGARBHA AGRO: CARE Reaffirms 'D' Rating on INR12.99cr LT Loan
RAVI SHEET: CARE Assigns B+ Rating to INR7.51cr Long Term Loan
REGENERATIVE MEDICAL: Ind-Ra LT Lowers Issuer Rating to 'B+'
S. K. JAI: CARE Assigns B+ Rating to INR5.0cr Long Term Loan
SAMBHAV EXIM: CARE Assigns 'B' Rating to INR10cr Long Term Loan
SAMRAT IRONS: Ind-Ra Raises Long-Term Issuer Rating to 'BB+'
SHINING STAR: Ind-Ra Affirms 'B-' Long-Term Issuer Rating
SHIVA SPECIALITY: CARE Lowers Rating on INR69.89cr LT Loan to D
SHIVA WHEELS: CARE Reaffirms B+ Rating on INR8.89cr LT Bank Loan
SREE DHANNVIJAY: CRISIL Assigns B+ Rating to INR10MM Cash Loan
SRI SENDRAYAPERUMAL: CARE Reaffirms B+ Rating on INR5.5cr Loan
SRI SITARAMANJANEYA: CRISIL Assigns B+ Rating to INR6MM Loan
SSPT LOGISTICS: CARE Reaffirms B+ Rating on INR6cr Long Term Loan
TAMILNADU STATE: CARE Reaffirms 'B' Rating on INR15cr LT Loan
TROIX CHEMICALS: CARE Assigns 'B' Rating to INR8.5cr LT Loan
UMAK EDUCATIONAL: CARE Reaffirms 'D' Rating on INR66.37cr LT Loan
VIJAYANAG POLYMERS: CARE Assigns 'B' Rating to INR7.3cr LT Loan
VIRAJ ENTERPRISES: CARE Assigns B+ Rating to INR5.5cr LT Loan
WEST INN: CARE Reaffirms B+ Rating on INR25cr Long Term Bank Loan
YOGINDERA WORSTED: CARE Lowers Rating on INR66.18cr LT Loan to D
J A P A N
TAKATA CORP: Share Surges After Denying Bankruptcy Plan
TOSHIBA CORP: S&P Lowers CCR to CCC+ & Remains on Watch Negative
TOSHIBA CORP: To Unveil Extent of Nuclear Biz Writedown on Feb 14
TOSHIBA CORP: Bank-Related Funds May Invest in Flash Memory Unit
N E W Z E A L A N D
ROSS ASSET: Liquidators Recouped NZ$4MM; Await McIntosh Ruling
S I N G A P O R E
OCEANUS GROUP: Enters Debt Restructuring Deal With Key Creditors
S O U T H K O R E A
SAMSUNG HEAVY: Net Loss Narrows in 2016 to KRW139 Billion
STX OFFSHORE: Ordered to Compensate Shareholders for Acctg Fraud
- - - - -
=================
A U S T R A L I A
=================
D&B NORTHERN: First Creditors' Meeting Slated for Feb. 3
--------------------------------------------------------
A first meeting of the creditors in the proceedings of
D&B Northern Beaches Auto and Cabs Repairs Pty Ltd will be held
at the offices of Cor Cordis Chartered Accountants, Level 6
55 Clarence Street, in Sydney, on Feb. 3, 2017, at 11:00 a.m.
Ozem Kassem & Jason Tang of Cor Cordis Chartered Accountants were
appointed as administrators of D&B Northern on Jan. 23, 2017.
LAKE CITY: First Creditors' Meeting Set for Feb. 3
--------------------------------------------------
A first meeting of the creditors in the proceedings of Lake City
Car Repairs Pty Ltd, trading as "Lake City Smash Repairs" and
"Lake City Smash Repairs (Toronto)", will be held at the
Boardroom of Chifley Advisory, Suite 3.04, Level 3, 39 Martin
Place, in Sydney, on Feb. 3, 2017, at 11:00 a.m.
Gavin Moss and Trent Aaron McMillen of Chifley Advisory Pty Ltd
were appointed as administrators of Lake City on Jan. 23, 2017.
N & F ENTERPRISES: First Creditors' Meeting Set for Feb. 3
----------------------------------------------------------
A first meeting of the creditors in the proceedings of N & F
Enterprises Pty Ltd, trading as Nunzio's Restaurant,
will be held at the offices of Piggott Partners, Ground Floor,
237 Adelaide Terrace, in Perth, on Feb. 3, 2017, at 10:30 a.m.
Mathieu Tribut of Piggott Partners was appointed as administrator
of N & F Enterprises on Jan. 23, 2017.
=========
C H I N A
=========
CHINA PROPERTIES: S&P Affirms 'CCC+' CCR; Outlook Negative
----------------------------------------------------------
S&P Global Ratings said it had affirmed its 'CCC+' corporate
credit rating on China-based property developer China Properties
Group Ltd. (CPG) with a negative outlook. S&P also affirmed
'CCC+' issue rating on the company's senior unsecured notes and
the 'cnCCC+' Greater China regional scale rating both the company
and the notes. S&P then withdrew all the ratings on CPG
following the conclusion of the rating agreement.
At the time of withdrawal, S&P's rating reflected its view that
CPG's small operational scale and high geographical concentration
subject it to volatile operational performance. S&P believes
CPG's business is not sustainable, given its weak sales.
However, the company does not face any immediate liquidity stress
because it continues to receive new bank loans and shareholder
support. CPG's reliance on new borrowings to meet short-term
obligations makes it vulnerable to tightening of credit
conditions. The rating also reflected the company's weak
liquidity.
The negative outlook on CPG reflected S&P's view that the
company's property sales execution is likely to remain very weak
over the next 12 months. CPG faces heightened refinancing risk
and negative cash flow. Its reliance on external refinancing
could grow and its liquidity could deteriorate over the period,
in S&P's view. S&P continues to believe the controlling
shareholder will support the company's weak financial
performance, but with lower visibility. The outlook also
reflects S&P's view that communication with the company remains
weak.
CHINA SUNERGY: Grant Thornton Casts Going Concern Doubt
-------------------------------------------------------
China Sunergy Co., Ltd., filed with the U.S. Securities and
Exchange Commission its annual report on Form 20-F, disclosing a
net loss of $79.99 million on $441.83 million of total revenues
for the fiscal year ended December 31, 2015, compared to a net
loss of $56.49 million on $341.11 million of total revenues for
the fiscal year ended December 31, 2014.
Grant Thornton states that the Group's losses from operations,
negative cash flow from operations, and negative working capital
raise substantial doubt about its ability to continue as a going
concern.
The Company's balance sheet at December 31, 2015, showed total
assets of $577.88 million, total liabilities of $760.27 million,
and a stockholders' deficit of $182.39 million.
A full-text copy of the Company's Form 20-F is available at:
https://is.gd/6NG3Ca
Nanjing, China-based China Sunergy Co., Ltd., (OTCMKTS:CSUNY) --
http://www.csun-solar.com/-- manufactures and sells solar cell
and solar module products that convert sunlight into electricity
for a variety of uses. Currently, the Company's principal end-
products are solar modules in different sizes and with varying
power outputs.
FUJIAN ZHANGLONG: Fitch Rates Prop. US$ Sr. Unsec. Bonds at 'BB+'
-----------------------------------------------------------------
Fitch Ratings has assigned Fujian Zhanglong Group Co., Ltd.'s
(Zhanglong, BB+/Stable) proposed tap of its US dollar senior
unsecured bonds an expected rating of 'BB+(EXP)'.
The tap issuance will carry the same terms and conditions as the
earlier issuance of USD150m of 4.50% notes due 2019. The offshore
notes will be issued directly by Zhanglong, and the proceeds will
be used for working capital and general corporate purposes.
The final rating on the proposed notes is contingent upon the
receipt of final documents conforming to information already
received.
KEY RATING DRIVERS
Issue Rating: The proposed bonds are rated at the same level as
Zhanglong's Issuer Default Rating as the bond will constitute a
direct, unconditional, unsubordinated and unsecured obligation of
Zhanglong and rank at least pari passu with all of the company's
other present and future unsecured obligations.
Linked to Zhangzhou Municipality: The ratings of Zhanglong are
credit-linked to, but not equalised with, Fitch's internal
assessment of the creditworthiness of Zhangzhou Municipality. The
link reflects strong government control and oversight of the
entity, mid-range assessment of the entity's strategic importance
to the municipality, integration with the government budget and
its legal status. These factors result in a high likelihood of
extraordinary support, if needed, from the municipality.
Therefore, Zhanglong is classified as a credit-linked public-
sector entity under Fitch's criteria.
Zhangzhou's Creditworthiness: Zhangzhou is the fastest-growing
economy in China's southern Fujian Province. Its gross regional
product (GRP) has been expanding at about 11% a year for the past
three years. GRP per capita for 2015 was CNY55,569, higher than
the national average of CNY49,351. Its operating revenue has been
growing steadily with satisfactory operating margin. Fiscal
strength was partly offset by a high debt burden relative to its
fiscal performance.
Legal Status Attribute Assessed at Mid-Range: Zhanglong is
registered as a state-owned limited liability company under
Chinese company law. It is wholly owned by Zhangzhou State-owned
Assets Supervision and Administration Commission and supervised
by the Zhangzhou government.
Strategic Importance Attribute Assessed at Mid-Range: Zhanglong
is one of the largest investment and financing vehicles owned by
the Zhangzhou Municipality, and it plays an important role in the
city's daily operations and development. It is the city's sewage
treatment service provider and the major water supplier to urban
areas in the city. It also engages in infrastructure construction
and has participated in bridge and expressway projects linking
Zhangzhou Municipality to other cities. In addition, Zhanglong is
a designated agency for sourcing building materials for certain
local-government-owned housing and infrastructure projects.
Integration Attribute Assessed at Mid-Range: Zhanglong has been
receiving subsidies from the Zhangzhou municipal government. It
received CNY912 million in 2013, CNY728 million in 2014, CNY562
million in 2015 and CNY461 million in the first half of 2016.
Furthermore, Zhanglong had other receivables of more than CNY800
million due from government entities at end-2015.
Control and Supervision Attribute Assessed at Stronger:
Zhanglong's board of directors is appointed by the government.
Major projects and investments require the government's approval.
Zhanglong's financing plan and debt levels are monitored by the
government, and the company is required to report its operational
and financial results to the government on a regular basis.
'B' Category Standalone Profile: Zhanglong has a weak credit
profile, with increasing debt and weakening profitability. Its
debt-to-adjusted EBITDA ranged from 7x to more than15x in the
past three years. Fitch believes this trend will continue in the
medium term, driven by ongoing infrastructure investments in
Zhangzhou City, and the thin profitability of its trading
business.
RATING SENSITIVITIES
Link with Municipality: A stronger or more explicit support
commitment from Zhangzhou Municipality, or an increased focus on
public-service provision and infrastructure construction may
trigger a positive action on Zhanglong's ratings. Significant
weakening of Zhanglong's strategic importance to the
municipality, dilution of the government's shareholding, and/or
reduced government support could result in a downgrade.
Creditworthiness of Municipality: An upgrade of Fitch's internal
credit view on Zhangzhou Municipality may trigger a positive
rating action. Negative rating action could derive from
deterioration in Zhangzhou Municipality's credit profile.
A rating action on Zhanglong would also lead to a similar action
on the proposed US dollar bonds.
TIMES PROPERTY: Fitch Rates USD375MM Senior Notes Final 'B+'
------------------------------------------------------------
Fitch Ratings has assigned Times Property Holdings Limited's
(B+/Positive) USD375 million 6.25% senior notes due 2020 a final
rating of 'B+' and Recovery Rating of 'RR4'.
The notes are rated at the same level as Times Property's senior
unsecured rating because they constitute direct and senior
unsecured obligations of the company. The assignment of the final
rating follows the receipt of documents conforming to information
already received. The final rating is in line with the expected
rating assigned on 15 January 2017.
The China homebuilder's ratings are supported by its good
execution track record but constrained by the need to
consistently replenish its land bank with quality sites, which
results in fluctuation in leverage. Fitch may take further
positive rating action if Times Property is able to maintain
leverage, measured by net debt to adjusted inventory, below 45%
and keep its land bank sufficient for three years of development.
KEY RATING DRIVERS
Larger Scale, Strong Sales: Times Property's contracted sales
rose 50% in 2016 to CNY29.3bn, beating its annual target of
CNY21.5bn by more than 35%. The average selling price (ASP) for
contracted sales climbed to CNY11,860/square metre (sq m) in 2016
from CNY9,010/sq m in 2015, mostly due to better market
performances in Foshan and Zhuhai. Fitch estimates that Times
Property would have maintained high sales efficiency with
contracted sales/total debt at 1.4x at end-2016 (1.4x at end-June
2016).
Improving Land Bank: Times Property had 12 million sq m of land
as of end-June 2016, with 19% located in Guangzhou, 38% in
Guangdong's Tier-2 cities (Foshan, Zhuhai and Zhongshan), and the
rest in less-developed noncore cities - Qingyuan, Dongguan and
Changsha. Fitch estimates the company increased its land bank in
its core markets (Guangzhou, Foshan and Zhuhai) to 2.9 years of
development activity at end-2016 from 2.3 years at end-2015.
High-Cost Acquisitions: Times Property started to acquire higher-
priced land parcels in its core markets from 2015 to expand the
share of products that appeal to upgraders and to solidify its
foothold in Guangzhou and core Tier 2 cities, such as Foshan and
Zhuhai. It bought several land parcels in Foshan and Zhuhai at
above CNY12,000/sq m, resulting in an weighted average land
acquisition cost of more than CNY8,500/sq m in 2016, compared
with around CNY6,000/sq m in 2015 and less than CN3,000/sq m
before 2014. However, Fitch expects Times Property to add two to
three projects from urban redevelopment sites annually, to
complement high-cost land acquisitions from public auctions.
Higher Leverage: As a result of higher-cost acquisitions,
leverage increased to 40% at end-June 2016 from 35% at end-2015.
Fitch expects leverage to fluctuate while Times Property expands,
particularly as the government has implemented a series of
policies since October 2016 to curb excessive increases in
housing prices. The company's maintenance of sales at current
levels would be key to managing the fluctuations in leverage.
Fitch will consider taking positive rating action if Times
Property is able to maintain its leverage below 45%.
Concentration in Guangdong Province: Times Property is a regional
property developer focused on Guangdong Province in southern
China. Guangzhou, Foshan and Zhuhai together accounted for more
than 85% of the total contracted sales in the past three years.
We believe that Times Property will concentrate on expanding
within Guangdong Province and is unlikely to expand into other
provinces in the near term.
KEY ASSUMPTIONS
Fitch's key assumptions within our rating case for the issuer
include:
- Contracted sales sustained above CNY30bn in the next three
years
- Gross profit margin (including capitalised interests)
maintained at 20%-25% over 2017-2019
- Attributable land premium around 45% of total contracted sales
in the next three years.
RATING SENSITIVITIES
Positive: Future developments that may, individually or
collectively, lead to positive rating action include:
- Net debt/adjusted inventory sustained below 45%
- Contracted sales/total debt sustained above 1.5x
- EBITDA margin sustained above 20%. (1H16: 20%)
- Land bank sufficient for 3 years of development
Negative: Future developments that may lead to the Outlook
reverting to Stable:
- Failing to maintain the positive guidelines
================
H O N G K O N G
================
FWD LIMITED: Fitch Assigns BB+ Final Rating to USD250MM Loan
------------------------------------------------------------
Fitch Ratings has assigned Hong Kong-based insurance group FWD
Limited's (BBB+/Stable) USD250 million 6.25% subordinated
perpetual securities a final rating of 'BB+'.
The assignment of the final rating follows the receipt of
documents conforming to information already received. The final
rating is in line with the expected rating assigned on Jan. 8,
2017.
KEY RATING DRIVERS
FWD Limited has issued the subordinated debts to strengthen
liquidity and fund the growth of its Hong Kong-based life
insurance subsidiary, if needed. Fitch estimates FWD Limited's
consolidated financial leverage would stand at 29% at end-1H16 on
a pro-forma basis (end-2015: 30%), following the security issue.
The perpetual securities will be eligible for 50% equity credit
in calculating financial leverage according to Fitch's
methodology based on their cumulative features.
The securities are rated three notches below FWD Limited's Issuer
Default Rating (IDR) due to their subordination status and non-
performance risk. The securities are notched down two levels to
reflect the poor recovery prospects of subordinated debt issued
at a holding company. The rights and claims of security holders
in the event of winding-up rank pari-passu with those of any
parity obligations, such as the issuer's preference shares. One
additional notch is applied for non-performance risk, which Fitch
views as minimal since interest deferral is at the issuer's sole
discretion.
RATING SENSITIVITIES
Any change to the Insurer Financial Strength Rating of FWD
Limited's subsidiary, FWD Life Insurance Company (Bermuda) Ltd
(Insurer Financial Strength A/Stable), will lead to a
corresponding change in FWD Limited's Issuer Default Rating and
the rating of the subordinated perpetual securities.
For rating sensitivities details for the rating on FWD Limited
and its insurance subsidiaries, see Fitch Rates FWD Limited's
Proposed Subordinated Securities 'BB+(EXP), dated Jan. 8, 2017.
HANERGY THIN: SFC Asks court to Ban Former Chairman, 4 Directors
----------------------------------------------------------------
The Securities and Futures Commission (SFC) has commenced legal
proceedings in the Court of First Instance to seek
disqualification orders against the former chairman, Mr. Li
Hejun, and four current independent non-executive directors,
Ms. Zhao Lan, Mr. Wang Tongbo, Mr. Xu Zheng and Mr. Wang Wenjing,
of Hanergy Thin Film Power Group Limited.
The SFC is also seeking a court order requiring Li to procure
that Hanergy's parent company, Hanergy Holding Group Limited
and/or its affiliates pay all outstanding receivables due to
Hanergy under various sales contracts and execute a guarantee
securing their payment. The first hearing of the petition will be
in the Court of First Instance on May 31, 2017.
The SFC's action follows its investigation into various very
substantial connected transactions between Hanergy and Hanergy
Holding since 2010.
The SFC alleges that the five directors failed to question the
viability of Hanergy's business model which relied on the sales
of solar panel production systems to its connected parties,
Hanergy Holding and its affiliates, as its main source of
revenue; and failed to properly assess the financial positions of
the connected parties and hence the recoverability of the
receivables due from them as a result of these connected
transactions.
They also failed to take proper steps to recover these
receivables by putting the interests of the connected parties
before that of Hanergy, and so did not act in Hanergy's best
interest.
On July 15, 2015, the SFC suspended trading in the shares of
Hanergy. The trading suspension remains in place.
Hanergy has indicated its intention to seek a resumption of the
trading in its shares. The SFC has stipulated two requirements
for a resumption:
* that the five directors agree not to contest the legal
proceedings and the SFC's application to disqualify them
and that Li also agrees not to contest the SFC's application
for a court order requiring him to procure and guarantee
payment of receivables; and
* the publication of a disclosure document which will provide
detailed information on the company, its activities,
business, assets, liabilities, financial performance and
prospects to address the SFC's concerns that led it to
suspend trading in Hanergy's shares.
Hanergy is required to submit the disclosure document to the
Board of the SFC for it to consider Hanergy's request for
resumption of trading. There is no assurance that the SFC Board
will agree that the trading of Hanergy's shares on the Stock
Exchange of Hong Kong Limited (SEHK) may resume.
According to the South China Morning Post, Hanergy was suspended
from trading on May 20, 2015, after its share price dived 47% in
70 minutes. The SFC in December 2015 ordered its trading be
suspended indefinitely until certain disclosure requirements were
fulfilled.
In its last set of audited financial statements covering figures
in 2015 for which it posted a net loss of HK$12.23 billion,
external auditor E&Y said it was unable to obtain "sufficient
appropriate audit evidence" from Hanergy on the recoverability of
HK$4.93 billion of trade receivables due from customers and some
prepayments they made, SCMP relays.
"This [loss] . . . in the consolidated financial statements
indicates the existence of a material uncertainty that may cast
significant doubt about the company's ability to continue as a
going concern," the auditor, as cited by SCMP, said.
Of the HK$2.6 billion of trade receivables owed to listed Hanergy
by its parent and sister firms, HK$1.71 billion was more than six
months overdue, says SCMP. Thanks to multiyear agreements by its
parent to buy US$8.5 billion of solar panel production lines,
Hanergy booked handsome profit for several years before 2015, the
report adds.
Based in Hong Kong, Hanergy Thin Film Power Group Limited,
formerly Hanergy Solar Group Limited, is an investment holding
company. The Company, along with its subsidiaries, is engaged in
producing equipment and turnkey production lines for manufacture
of amorphous silicon based thin film solar photovoltaic modules,
as well as the design, manufacture and sale of toys. The Company
operates in one segment: manufacture of equipment and turnkey
production lines, which includes the manufacture of equipment and
turnkey production lines for the manufacture of amorphous silicon
based thin film solar photovoltaic modules.
=========
I N D I A
=========
ABT LIMITED: CARE Ups Rating on INR183.96cr LT Loan to BB-
----------------------------------------------------------
The ratings assigned to the bank facilities and fixed deposits of
ABT Limited (ABT) were earlier placed under "Credit watch" on
account of the proposed demerger scheme of the company which has
now been completed and the revision in the ratings take into
account the significant reduction in the exposures of ABT towards
its group entities, with a major loan (Not rated by CARE, where
there were delays in repayment obligations) along-with other
investments of ABT transferred to the resultant demerged entities
post the demerger process.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 183.96 CARE BB-; Stable
Removed from Credit
Watch and rating
revised from CARE B
Fixed Deposits 60.00 CARE BB-(FD); Stable
Removed from Credit
Watch and rating
revised from
CARE B (FD)
The ratings, however, are constrained by the low profitability &
accruals of ABT, weak liquidity position of the company,
outstanding group exposures as on March 2016 and intense
competition from other OEM dealers.
The ratings continue to factor in the vast experience of the
promoters, group's operational track record of more than eight
decades and strong brand image of the company in dealership
segment and longstanding relationship of the company with Maruti.
Going forward, the ability of the company to further reduce its
exposure to its group companies, improve profitability and
efficiently manage its working capital would be key rating
sensitivities.
Detailed description of the key rating drivers
In the past, ABT had 12 subsidiaries including ABT (Madras)
Private Limited (AMPL) and ABT (Trichy) Private Limited. However,
during FY16 (refers to the period April 1 to March 31), ABT filed
a scheme of arrangement (Demerger) with the High Court of Madras
and the same was sanctioned on April 18, 2016, effective from
January 01, 2015. As per the scheme of arrangement, all the 12
subsidiary companies were demerged from ABT and all the
investments held by ABT in these subsidiaries were transferred to
ATPL, which was subsequently renamed as ABT Investments (India)
Private Limited. Meanwhile, a major loan (not rated by CARE)
which was availed by ABT & further on lent to another group
company Sakthi Sugars Limited (SSL) and the fixed assets provided
as collateral for the same were transferred to AMPL.
This demerger process was carried out with the view of demarking
various business activities under separate entities while
enabling the flagship company ABT to concentrate on its core
activities. Going forward, AMPL would be engaging in the business
of real estate development while, AIPL would be an investment
company holding the investments of the group.
As a result, the total exposure of ABT in form of investments and
loans & advances reduced from INR417.96 crore as on March 31,
2014, to INR154 crore as on March 31, 2016. The company does not
have any investments in its books as on March 31, 2016, and is
expected to receive the balance loans and advances of INR154
crore from its group companies in the medium term. Besides this,
the company has also provided guarantee amounting to INR257 crore
to one of its group companies backed by a counter guarantee by
the concerned group company.
The total income of ABT increased to INR1005 crore in FY16 from
INR959 crore in FY15. However, the PBILDT margin, slightly
declined from 6.21% in FY15 to 5.82% in FY16, mainly on account
of increase in the cost of spare parts purchased during the year.
The company's liquidity position remained weak with a current
ratio of 0.86 times as on March 31, 2016.
The coverage indicators of the company remained moderate with
interest coverage of 1.69 in FY16 and total debt to GCA of 11.32
years as on March 31, 2016.
ABT is into the field of transport business since 1931 and the
company is currently managed by third generation of the family.
The company is one of the largest dealers of Maruti Vehicles in
Tamilnadu. The company is associated with Maruti for about 30
years. The company being one of the first Vehicle dealers in
Tamil Nadu has a strong brand image in this category. ABT's
widespread network of automobile service stations has also
enhanced the brand image of the company.
However, the company faces stiff competition from other passenger
car dealers including other Maruti dealers and dealers of other
OEMs like Hyundai, Nissan, etc. The easy availability of Maruti
spares has also intensified the competition for ABT service
centres.
ABT was incorporated on August 28, 1931, by Mr. P Nachimuthu
Gounder as a bus service company with 21 buses. In the year 1946,
his son Mr. N Mahalingam joined the business and the company has
grown over the years to become a conglomerate with various
businesses. ABT has various business segments, of which the major
ones are:
- A Vehicle Dealership network that exclusively sells Maruti
Vehicles and True value showrooms that sells used
cars. The Company also has a widespread network of service
stations. The network has 8 dealership outlets in Tamilnadu
and about 30 service stations.
- A Logistics division which transports couriers and parcels
throughout India.
- A Passenger Travels division which operates intercity buses in
South India.
Besides this, the Company also operates Fuel stations and
Windmills in western Tamil Nadu.
During FY16, the company reported a PAT of INR6.95 crore on a
total income of INR1,004.63 crore as against a reported
PAT of INR4.44 crore on a total income of INR958.51 crore for
FY15.
Status of non-cooperation with previous CRA:
ICRA in its press release dated December 2013, suspended the
rating assigned to the bank facilities of ABT Limited. The
suspension was on account of ICRA's inability to carry out a
rating surveillance in the absence of the requisite information
from the company.
ALUCOP INDIA: CARE Ups Rating on INR10cr Long Term Loan to BB-
--------------------------------------------------------------
The revision in the ratings assigned to the bank facilities of
Alucop India Private Limited (AIPL) take into consideration the
stabilization of operations with significant growth in turnover
during FY16 (refers to the period April 1 to March 31). The
ratings, however, continue to remain constrained on account of
its moderate capital structure, weak debt coverage indicators,
moderate liquidity position, presence in the highly competitive
steel industry and susceptibility to the cyclical steel industry.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 10.00 CARE BB-; Stable
Revised from CARE B+
Short-term Bank Facilities 35.00 CARE A4 Reaffirmed
The ratings, however, continue to derive benefits from the
experience of the promoters.
AIPL's ability to increase scale of operations, along with
improvement in profitability and capital structure while managing
its working capital efficiently would be the key rating
sensitivities.
Detailed description of key rating drivers
During FY16, the operations of the company stabilized and it
reported a total operating income (TOI) of INR53.99 crore in
FY16.The company reported moderate PBILDT of INR1.77 crore
(3.28%) and PAT of INR0.33 crore (0.61%). Because of trading
nature of operations, profitability margins remained at moderate
level. GCA of the company remained positive at INR0.38 crore
during FY16. The company is procuring its different products
either from local suppliers i.e. Steel Authority of India Limited
(SAIL), JSW Steel or imports from China depending upon prevailing
price variations between them.
The capital structure of AIPL remained moderate marked by an
overall gearing of 1.48 times as on March 31, 2016. The debt
coverage indicators of the company remained weak marked by total
debt to GCA of 32.20 years and interest coverage of 1.43 times
[FY15:0.38 times] in FY16. The liquidity position of the company
remained moderate marked by current ratio of 1.39 times and quick
ratio of 1.30 times as on March 31, 2016 as compared to current
ratio and quick ratio, both of 7.58 times for FY15. The operating
cycle of the company stood at 20 days in FY16 as compared with -
52 days in FY15.
Indore-based (Madhya Pradesh), AIPL was incorporated in
September, 2012 by Mr. Sanjay Agrawal and his son Mr. Brijesh
Agrawal. AIPL started business in trading of coal but due to
unfavorable regulatory aspect it decided to shift its business
line to import & trading of steel products from August, 2015
onwards. AIPL deals in the products of ferrous metals like Hot
Rolled Coil/ Sheet/ Plate, PPGI (Pre Painted Galvanized Iron)
Coil/ Sheet, Stainless Coil/ Sheet, etc. AIPL obtains sales
orders from its customers and procures the products from prime
suppliers of India and also imports from China.
The promoters are also associated with Nalanda Infrastructure
Private Limited, which is engaged into real estate business,
specifically in township development.
During FY16 (A), AIPL reported PAT of INR0.33 crore on a TOI of
INR53.99 crore. During 8MFY17 (Provisional), AIPL has achieved a
total operating income of INR60.81 crore.
AMIYA STEEL: Ind-Ra Assigns 'B-' Long-Term Issuer Rating
--------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Amiya Steel
Private Limited (ASPL) a Long-Term Issuer Rating of 'IND B-'.
The Outlook is Stable.
KEY RATING DRIVERS
The ratings reflect ASPL's moderate scale of operations, weak
credit profile and tight liquidity position. Revenue was
INR774 million in FY16 (FY15: INR692 million), net financial
leverage (adjusted net debt/operating EBITDA) was negative 9.7x
(7.8x) and interest coverage of negative 0.9x (1.2x) and EBITDA
margin was negative 4% (5.8%).
The company's average use of working capital limits was almost
full during the 12 months ended December 2016.
However, the ratings are supported by the promoters' over a
decade-long experience in the iron and steel industry.
RATING SENSITIVITIES
Positive: An improvement in the profitability margin resulting in
an overall improvement in the credit metrics will be positive for
the ratings.
COMPANY PROFILE
Incorporated in 2002, ASPL manufactures sponge iron, with
manufacturing facility is located in Bankura, West Bengal having
an installed capacity of 60,000MTPA. The company is also
involved in trading of other related materials such as coal, iron
ore, thermo mechanical treatment bar, among others.
ASHWINI FROZEN: CARE Assigns 'B' Rating to INR0.15cr LT Loan
------------------------------------------------------------
The ratings assigned to the bank facilities of Ashwini Frozen
Foods (AFF) are constrained on account of its consistent decline
in the scale of operations, moderate profit margins, leveraged
capital structure, weak debt coverage indicators, weak liquidity
position and working capital intensive operations during FY16
(refers to the period April 1 to March 31). The ratings are
further constrained on account of presence in fragmented
industry, raw material price fluctuation and foreign exchange
risk.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 0.15 CARE B; Stable
Assigned
Short-term Bank Facilities 0.25 CARE A4 Assigned
Long-term/ Short-term Bank 6.00 CARE B; Stable/CARE A4
Facilities Assigned
The ratings, however, derive strength from experience of
promoters and easy accessibility to raw materials.
The ability of NPPL to increase the scale of operations along
with profit margins and efficient working capital management
amidst competitive nature of industry and raw material price
volatility are the key rating sensitivities.
Detailed description of key rating drivers
AFF's total operating income (TOI) witnessed decrease of about
67% due to increasing competition which led to inadequate raw
material supply coupled with relatively lower demand from export
markets. However, PBILDT margin has increased during the year
(11.52% vis-Ö-vis 6.43%). On account of high total debt and loss
during FY16, AFF's overall gearing increased to 6.46 times as on
March 31, 2016. With the increase in total debt and loss reported
during FY16, the debt coverage indicators deteriorated.
AFF continues to have an elongated working capital cycle which
has increased and stood at 600 days in FY16 due to high inventory
period (644 days). The average working capital utilisation of the
company was moderate at 95% during 12 months ended December 2016.
AFF's is promoted by Mr. Bhimji Khorava along with 4 others
partners. He is a graduate with more than two decades of
experience and looks after the overall operation of the firm.
Ashwini Frozen Foods was established in 1995 and is engaged in
processing of sea food which includes ribbon fish, croaker
cuttlefishes, crabs etc. which are exported to countries like
Saudi Arabia, Mozambique, and Oman etc. The firm has set up its
processing facility at Mangrol, Gujarat. The firm is currently
owned and managed by Mr. Bhimji M Khorava along with 4 other
partners and has a long experience in sea food industry. The firm
also has an associate concern with the name of Jalfish Sea Food
which is engaged in the similar line of business.
During FY16 (A), AFF reported loss of INR0.18 crore on a TOI of
INR5.23 crore as against PAT of INR0.00 crore on a TOI of
INR15.73 crore during FY15.
AWADH OILS: Ind-Ra Affirms 'BB-' Long-Term Issuer Rating
--------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed Awadh Oils Pvt
Ltd's (AOPL) Long-Term Issuer Rating at 'IND BB-'. The Outlook
is Stable.
KEY RATING DRIVERS
The ratings reflect AOPL's continued moderate scale of operations
and weak credit profile. However, Ind-Ra expects an improvement
in AOPL's revenue and credit metrics from FY17 onwards on the
back of steady revenue growth owing to establishment of the
company's mustard oil brands during FY16 in the market. This
will result in an increase in the volume of sales on the back of
lower total debt resulting from reduction of the company's fund-
based limits which is likely to improve the net leverage of the
company and result in lower interest expenses. Revenue reported
by the company in FY16 was INR350 million (FY15: INR431 million).
EBITDA margins were 3.7% in FY16 (FY15: 3.4%), gross interest
coverage (operating EBITDA/gross interest expense ) was 1.4x
(1.4x) and net leverage (net debt/EBITDA) was 5.3x (5.8x).
The liquidity of the company was also comfortable with the
average utilization of the fund based limits being around 83%
over the past 12 months ended December 2016.
The ratings continue to benefit from its founders' experience of
more than four decades in the Edible oil industry.
RATING SENSITIVITIES
Positive - Positive rating action may result from substantial
improvement in the scale of operations along with improvement in
the credit metrics of the company.
Negative - Negative rating action may result from further
deterioration in the credit metrics
COMPANY PROFILE
AOPL was incorporated in 1997 by Mr. Rajendra Ji Goyal and Vipin
Ji Goyal and primarily manufactures mustard oils and mustard
cake. The company has an installed capacity of 5,400mt edible oil
and 10,000mt cake per annum. AOPL also trades in rice bran oil,
mustard oil other edible oils. The company caters to the markets
in Chattisgarh, Orissa, Assam, Bihar, West Bengal, Uttar Pradesh
and other North-eastern regions of the country and sells its
products under the brand names Agri Drop and Active Heart.
RATING SENSITIVITIES
Positive: A significant improvement in the top line while
maintaining the current level of credit metrics would be positive
for the ratings.
Negative: A decline in the revenue growth or EBITDA margins
leading to deterioration in overall credit metrics will be
negative for the ratings.
COMPANY PROFILE
CATVL was incorporated on June 28, 1985. The company
manufactures community antenna television equipment for providing
cable television services and also produces cable TV products,
such as modulators, combiners, optic transmitters, optic nodes,
radio frequency amplifiers, power supplies & splitters and tap-
offs of different functionalities.
BANSAL RICE: CARE Assigns 'B' Rating to INR15cr Long Term Loan
--------------------------------------------------------------
The rating assigned to the bank facilities of Bansal Rice Mills
is constrained by its small scale of operations with low PAT
margin, leveraged capital structure and weak debt coverage
indicators. The rating is further constrained by elongated
operating cycle, susceptibility of margins to fluctuation in raw
material prices, fragmented nature of industry coupled with
high level of government regulation in the sector and partnership
nature of its constitution. The rating, however, derives
strength from experienced partners and locational advantages.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 15 CARE B; Stable
Assigned
Going forward, the ability of the firm to increase its scale of
operations while improving its profitability margins and
solvency position and managing its working capital requirements
efficiently would remain the key rating sensitivities.
Detailed description of the key rating drivers
Despite being in operations for around one decade, the firm's
scale of operations has remained small marked by TOI of
INR27.32 crore for FY16(refers to the period April 1 to
March 31).
The PBILDT margin and PAT margin of the firm stood at 11.99% and
0.52% respectively in FY16. BRM has leveraged capital structure
with overall gearing ratio of 6.43x as on March 31, 2016 as
compared to 13.80x as on March 31, 2015. Also, the debt coverage
indicators stood weak marked by interest coverage ratio at 1.26x
in FY16 total debt to GCA at 26.59x for FY16. The average
operating cycle of the firm stood elongated at 257 days for FY16.
The firm is susceptible towards fluctuation in raw material
prices and monsoon dependent operations. Furthermore, the
commodity nature of the product makes the industry highly
fragmented.
BRM's constitution as a partnership firm has the inherent risk of
possibility of withdrawal of the partners' capital at the time of
personal contingency and the firm being dissolved upon the
death/retirement/insolvency of partners. However, the firm has
experienced partners. Mr. Sandeep Kumar and Mr. Amandeep Bansal
have total work experience of around one decade while Mr. Badri
Prasad has a total work experience of two decades. Also, the
firm's processing facility is situated at Sangrur, Punjab which
is one of the largest producers of paddy in India. Its presence
in the region gives additional advantage over the competitors in
terms of easy availability of the raw material as well as
favorable pricing terms.
Bansal Rice Mill (BRM) was established in April, 2007 as a
partnership firm and is currently being managed by Mr. Sandeep
Kumar, Mr. Amandeep Bansal, Mr. Badri Prasad, Mrs Rashmi Bansal
and Mrs Manisha Bansal as its partners sharing profit and loss
equally. The firm is engaged in processing of paddy and milling
of rice since FY15 (refers to the period April 1 to March 31) at
its manufacturing facility located at Sangrur (Punjab) having an
installed capacity of 12306 tonnes per annum as on March 31,
2016. Prior to FY15, BRM was involved in cotton ginning and
milling of rice primarily for the government. Presently, BRM
procures paddy directly from local grain markets located in
Punjab and sells the finished products to various wholesalers
located in Delhi and Haryana.
In FY16, BRM has achieved a total operating income of INR27.32
crore with PAT of INR0.14 crore, as against the total operating
income of INR7.13 crore with PAT of INR0.03 crore in FY15. In
8MFY17 (Provisional), the firm has achieved TOI of INR15.50
crore.
BASANTI MATA: CARE Reaffirms B+ Rating on INR8.79cr LT Loan
-----------------------------------------------------------
The rating assigned to the bank facilities of Basanti Mata Agri
Product Private Limited (BMAPL) continues to be constrained by
its regulated nature of industry, seasonality of business with
susceptibility to vagaries of nature and competition from other
local players. However, the aforesaid constraints are partially
offset by the company's experienced management team and proximity
to potato growing area.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facility 8.79 CARE B+; Stable
Reaffirmed
Short-term Bank Facility 0.18 CARE A4 Reaffirmed
Going forward, the ability of the company to increase its scale
of operations with improvement in profitability and effective
management of working capital would be the key rating
sensitivities.
Detailed description of the key rating drivers
BMAPL's scale of operations remained modest as compared to its
peers with a PAT of INR0.10 crore on total operating income of
INR3.26 crore during FY16. Furthermore, total capital employed of
the company, increased as on March 31, 2016, remained low at
INR16.24 crore as against INR10.79 crore as on March 31, 2015.
In West Bengal, the basic rental rate for cold storage operations
is regulated by the state government through West Bengal State
Marketing Board. Due to ceiling on the rentals to be charged it
is difficult for the cold storage units like BMAPL to pass any
sudden increase in operating costs .The same may lead to downward
pressure on profitability.
BMAPL is setting up a cold storage unit for preservation of
potatoes and therefore the operations will be seasonal in
nature as potato is a winter season crop with its harvesting
period commencing in March. The loading of potatoes in cold
storages begins by the end of February and lasts till March.
Additionally, with potatoes having a preservable life of around
eight months in the cold storage, farmers liquidate their stock
from the cold storage by end of season i.e., generally in
the month of November. All the cold storage remains non-
operational during the period between December to February.
Furthermore, lower agricultural output may have an adverse impact
on the rental collections as the cold storage unit collects rent
on the basis of quantity stored and the production of potato is
highly dependent on vagaries of nature.
BMAPL, being new entrant in the industry, will face high
competition from the existing and established players which
might affect its profitability.
BMAPL's cold storage unit is proposed to be located in the
Hooghly district of West Bengal which is one of the major potato
growing regions of the state. The favourable location of the
storage unit, its close proximity to the leading potato growing
areas will auger well for the company, as it will provide it with
a wide catchment and will make it suitable for the farmers in
terms of transportation and connectivity.
Mr. Bijoy Krishna Ghosh aged about 43 years, having over two
decades of experience in trading agri products and over five
years of experience in cold storage industry through their family
business. He looks after the day to day operations of the
company. He is further assisted by other directors who are also
having over two decades of experience in diversified industry and
about five years of experience in cold storage industry. In view
of the same the company is benefited out of the wide experience
of the promoters in their respective fields.
Basanti Mata Agri Product Private Limited was incorporated on
July 8, 2013 by the Ghosh family of Hooghly, West Bengal.
The company was promoted to set up a cold storage unit mainly for
preservation of potatoes. The company commenced operation
(started loading potatoes to its cold storage) from March 01,
2015. The cold storage is located at Hooghly, West Bengal with an
aggregate storage capacity of 20,000 metric ton.
BMAPL is a closely held company with all the board members
consisting of six directors belonging to the promoter's family.
All the promoters having over two decades of experience in agri
product sector and trading look after the day to day operations
of the company.
In FY16 (refers to the period April 1 to March 31), the company
achieved a total operating income of INR3.26 crore and PAT of
INR0.10 crore as against a total operating income of INR0.17
crore and PAT of INR (0.24) crore in FY15. The company has
achieved a turnover of INR10.00 crore during 9MFY17.
BHAGAWATI ESTATE: CARE Reaffirms B+ Rating on INR0.86cr LT Loan
---------------------------------------------------------------
The ratings assigned to the bank facilities of Bhagawati Estate
Warehouse (Kolaras) [BEWK] continue to remain constrained on
account of its small scale of operations with low net worth base,
low profitability, leveraged capital structure, weak debt
coverage indicators and elongated working capital cycle. The
ratings are further constrained by its constitution as a
proprietorship firm and presence into fragmented industry.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 0.86 CARE B+, Stable
Reaffirmed
Long-term/Short-term Bank 4.00 CARE B+, Stable/
Facilities CARE A4 Reaffirmed
Short-term Bank Facilities 2.45 CARE A4 Reaffirmed
The ratings continue to derive strength from the wide experience
of the promoters through established presence of the group in
various business segments, i.e., warehousing, cold storage and
automobile distributorship within Madhya Pradesh (MP). The
reaffirmation also factors in increase in total operating income
(TOI), improvement in capital structure, debt coverage indicators
and working capital cycle during FY16 (refers to the period
April 1 to March 31).
The ability of BEWK to increase its scale of operations, improve
its profitability and capital structure along with efficient
management of its working capital requirements will remain the
key rating sensitivities.
Detailed description of the key rating driver
BEWK's total Operating Income (TOI) grew by 59.05% y-o-y during
FY16 on the back of increase in quantity sold of agro commodities
during the year. However, scale of operations continues to remain
small and due to trading nature of operations profitability of
BEWK remained low.
On the back of high bank borrowing and low net worth base as on
March 31, 2016, solvency position marked by overall gearing stood
weak at 4.99x. Furthermore, owing to low cash accruals during
FY16 and high debt level as on March 31, 2016, total debt to GCA
stood at 37.33 times as on March 31, 2016.
Operating cycle stood high and elongated at 122 days owing to
trading nature of operations wherein it has to maintain high
inventory level. Consequently, its fund-based limits remained
fully utilized during past 12 months period ended October 2016.
Mrs Lata Singh, proprietor of BEWK holds experience of more than
7 years and looks after the administrative aspects of the
business. She is also supported by Mr. Vikram Singh Kirar in the
day-today operations who has experience of over a decade in the
agri warehousing, agro commodity trading and warehouse receipts
funding business.
BEWK has other associate concerns namely Bhagawati Development
Services Private Limited (BDSPL - rated 'CARE B+/ CARE A4') and
Bhagawati Cools Private Limited (BCPL - rated 'CARE B+/CARE A4')
which are engaged in similar line of business and also have
distributorship of Indo Farm tractors and Mahindra and Mahindra
(M&M) tractors respectively in Madhya Pradesh.
Another associate, Bhagawati Estate Warehouse, Ashoknagar (BEWA
rated 'CARE B+/CARE A4') is a proprietorship firm owned by Mr.
Vikram Singh, is also engaged in warehousing and trading of agro
commodities. The group is also engaged into dealership of
Mahindra & Mahindra (M&M) vehicles and servicing of auto parts in
four districts of Madhya Pradesh (MP), namely, Shahdol, Mandla,
Dindori and Anuppur through other entity named Bhagawati India
Motorizer Private Limited (BIMPLrated 'CARE B+').
CATVISION LIMITED: Ind-Ra Raises Long-Term Issuer Rating to 'BB+'
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has upgraded Catvision
Limited's (CATVL) Long-Term Issuer Rating to 'IND BB+' from
'IND BB'. The Outlook is Stable.
*Term deposit is valid up to the date of the next annual general
meeting or within six months from the close of the next financial
year, whichever is earlier.
KEY RATING DRIVERS
The upgrade reflects CATVL's significant revenue growth of 54.94%
yoy to INR506.31 million in FY16 and improvement in operating
EBITDA margins to 9.34% (FY15: 5.58%). This was due to cable TV
digitalization and the company venturing into manufacturing set-
top boxes in FY16. The credit metrics also improved in FY16 with
interest coverage (operating EBITDA/gross interest expense) of
5.54x (FY15: 3.23x) and net financial leverage (total adjusted
net debt/operating EBITDAR) of 1.92x (2.01x).
The ratings, however, remain constrained by the company's
presence in the highly competitive electronic industry.
The ratings are supported by the three-decade-long experience of
CATVL's promoters in the community antenna television equipment
manufacturing business and its strong supplier and customer
relations. Also, the liquidity of the company remains
comfortable with its 84.86% average use of the working capital
limits during the 12 months ended December 2016.
CHANAKYA TECHNOS: Ind-Ra Assigns 'BB-' Long-Term Issuer Rating
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Chanakya Technos
Private Limited (CTPL) a Long-Term Issuer Rating of 'IND BB-'.
The Outlook is Stable.
KEY RATING DRIVERS
The ratings reflect CTPL's low revenue base and moderate
profitability margin. In FY16, revenue was INR330 million (FY15:
INR290 million) and EBITDA margin was 6.5% (7.1%). The ratings
are constrained by CTPL's regional concentration, as more than
90% of its contracts are executed solely in Bihar.
The ratings also reflect CTPL's tight liquidity position with
over 95% use of its working capital limits during the last 12
months ended December 2016.
The ratings benefit from the company's strong credit metrics with
net leverage (Ind-Ra adjusted net debt/operating EBITDAR) of
negative 0.4x in FY16 (FY15: negative 0.1x) and interest coverage
(operating EBITDA/gross interest expense) of 5.8x (4.4x) due to
low debt level. The ratings are also supported by CTPL's strong
order book of INR1,396.41 million (4.23x of FY16 revenue) as on
Dec. 31, 2016, and its founders' over 25 years of experience in
the civil construction business.
RATING SENSITIVITIES
Positive: An improvement in the scale of operations, along with
the liquidity position will be positive for the ratings.
Negative: A further deterioration in the liquidity position will
be negative for the ratings.
COMPANY PROFILE
Patna-based, CTPL was incorporated as a partnership firm in 1990
and then reconstituted as a private limited company in 2002. The
company executes civil construction contracts for government
entities.
DTC PROJECTS: Ind-Ra Raises Long-Term Issuer Rating to 'BB'
-----------------------------------------------------------
India Ratings and Research (Ind-Ra) has upgraded DTC Projects
Private Limited's (DTCPPL) Long-Term Issuer Rating to 'IND BB'
from 'IND BB-'. The Outlook is Stable.
*The non-fund-based limit is a bank guarantee limit, which is a
sublimit of the term loan.
KEY RATING DRIVERS
The upgrade reflects the timely execution of an ongoing project
(DTC Southern Heights) by DTCPPL. The company expects project
construction to complete by March 2020.
The ratings factor in customer advances totaling INR413.7 million
received by DTCPPL until November 2016 for the sale of 64.6% of
the total project area.
The ratings are supported by the promoter's experience of
completing two projects in Kolkata in the last decade.
However, the ratings constrained by the moderate scale of the
project and risks associated with time and cost overruns, as the
project is ongoing.
RATING SENSITIVITIES
Negative: Any project delays or cost overruns will lead to a
negative rating action.
Positive: Successful project completion will lead to a positive
rating action.
COMPANY PROFILE
DTCPPL was incorporated in 1995 by the DTC Group for its real
estate activities. Mr. Satya Narayan Jalan, Mr. Ayush Jalan and
Mrs Poonam Jalan are the directors of the company.
DTCPPL's registered office is located at Netaji Subhas Road,
Kolkata, and corporate office is located at AJC Bose Road,
Kolkata. Its ongoing residential project DTC Southern Heights is
located in Pailan, South 24 Parganas, near Joka, Kolkata. This
is the company's first project.
DTCPPL's directors belong to the DTC Group, which has 40 years of
experience in several businesses such as real estate, finance,
mining and infrastructure.
ECOKRIN HYGIENE: Ind-Ra Affirms 'BB' Long-Term Issuer Rating
------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed Ecokrin Hygiene
Pvt Ltd.'s (EHPL) Long-Term Issuer Rating at 'IND BB'. The
Outlook is Stable.
KEY RATING DRIVERS
The affirmation reflects EHPL's continued moderate credit profile
and small scale of operations, despite deterioration in financial
performance. The firm reported revenue of INR290 million in FY16
(FY15: INR284 million). Interest coverage declined to 2.4x
(4.9x) and net financial leverage deteriorated to 4.9x (1.6x) due
to increase in debt level.
EHPL's liquidity position was tight, as reflected with the
average utilization of working capital limits of around 85%
during the last 12 months ended December 2016.
However, the ratings draw support from the founders' more than
three decades of experience in chemical trading.
RATING SENSITIVITIES
Positive: A further improvement in the scale of operations, while
maintaining the credit profile will be positive for the ratings.
Negative: Any deterioration in the credit profile will be
negative for the ratings.
COMPANY PROFILE
Incorporated in 2001, EHPL trades various types of chemicals and
additives mainly used in food. The entity belongs to the Mumbai-
based Lakdawala family and has its registered office in Mumbai.
EMAAR MGF: CARE Reaffirms 'D' Rating on INR2,260cr Debenture
------------------------------------------------------------
The ratings to the bank facilities and NCDs of Emaar MGF Land
Limited (EMGF) factors in the subdued operational and financial
performance of the company with continuing losses at the net
level along with stress in liquidity on account of slow sales
with overall slowdown in real estate sector. This has led to cash
flow mismatches leading to delays in servicing of NCD II (S. No.
3), while the company has received deferment for the servicing of
interest for NCD I (S. No. 2) till March 31, 2017.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 205 CARE B; Stable
Re-affirmed
Non-convertible Debenture-
I (NCD - I) 2,260 CARE D Re-affirmed
Non-convertible Debenture- 41.69 CARE D Revised from
II (NCD - II) CARE B
The ratings, however, continue to factor in the promoter's
experience, execution track record, high booking status and large
land bank, which is largely paid for. The ratings also factor in
the financial support extended by one of the promoters (Emaar
Properties PJSC, Dubai; Emaar PJSC), through extending corporate
guarantee/ issuing SBLCs for the debt being raised by EMGF.
During the current financial year, EMGF has been raising debt
guaranteed by promoters at lower interest cost which has been
utilized to execute the ongoing projects and repayment of debt.
Going forward, the ability of the company to timely execute and
deliver its projects, and improve its capital structure shall be
the key rating sensitivities. Also, any adverse impact of pending
litigations on the company shall also remain a key rating
sensitivity. Furthermore, the outcome of the ongoing business
restructuring will be critical for the credit profile and shall
be a key rating sensitivity.
Detailed description of the key rating drivers
The decline in operational performance of the company is on
account of slowdown in the real estate industry. Furthermore, a
large proportion of ongoing projects of EMGF are concentrated in
Gurgaon (part of National Capital Region) which is one of the
most severely impacted on account of target segment pertaining to
medium to high end segment. The overall gearing remains at
relatively higher level on account of the erosion of networth
attributed to continued losses at the net level.
On account of high level of prices with large inventory getting
piled up, there has been slow sale with low collections leading
to stress in the liquidity position of the company. The same has
led to the cash flow mismatches leading to delays in servicing of
certain debt obligation as well as payables to authorities in the
past.
EMGF has a track record of over 10 years with over 210 lsf (lakhs
sq ft) of area developed, including group housing and commercial
complexes. The company is a JV of Emaar PJSC and MGF group. Emaar
PJSC is a public limited company, promoted by Government of
Dubai, and has presence in hospitality, education, healthcare and
finance with operations in 14 countries. It has developed
approximately 89 msf of real estate across residential,
commercial and other segments. MGF Group was founded in 1930 and
started operations with vehicle financing business and later
diversified into factoring, financial services and real estate
development.
EMGF has gone for demerger pursuant to a Scheme of Arrangement
under Section 391-394 of the Companies Act, 1956. The initiatives
are expected to lead to a more focused approach to revive
projects and enable further growth and expansion of each
business/project. The company has already filed the Scheme with
the Hon'ble High Court of Delhi on May 16, 2015. Subsequent to
the filling of the scheme in High Court, Emaar Properties PJSC,
Dubai has formally taken over the management and operational
control of the company on May 23, 2016 and henceforth, is playing
active role in the management of operations and policy decisions
of the company.
During the current financial year, the company has been raising
funds against guarantee / SBLCs issued by Emaar PJSC, to augment
its cash flow position for the execution of the ongoing projects.
During current financial year till November 30, 2016, the company
has got sanctioned debt of INR2,275 crore (availed INR1,269
crore) which has been supported by Emaar PJSC through corporate
guarantee or SBLCs issued against the borrowings.
Analytical approach: CARE has taken consolidated approach for the
ratings of EMGF. EMGF along with its subsidiaries and joint
ventures (EMGF group wherein EMGF is the holding company) is
engaged in the business of real estate development including
residential and commercial projects and is controlled and managed
by common management.
EMGF was incorporated in 2005 as a joint venture between Dubai-
based Emaar PJSC and MGF Group (MGF), India. EMGF is a real
estate developer with pan-India presence and operations spanning
across residential, commercial, retail and hospitality sectors
and has developed more than 210 lsf area in India.
During FY16 (refers to the period April 01 to March 31), EMGF on
a consolidated level, incurred loss of INR481.21 crore (PY:
INR366.04 crore) on a total operating income of INR795.84 crore
(PY: INR1,499.21 crore).
GULSHAN PRINTS: CARE Assigns B+ Rating to INR5.50cr LT Bank Loan
----------------------------------------------------------------
The ratings assigned to the bank facilities of Gulshan Prints
Private Limited (GPPL) is constrained on account of its moderate
scale of operations, thin profit margins, leveraged capital
structure, moderate debt coverage indicators and weak liquidity
position with operations in a highly fragmented textile industry
and susceptibility of profit margins to fluctuations in raw
material prices.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 5.50 CARE B+; Stable
Assigned
Short-term Bank Facilities 0.05 CARE A4 Assigned
The ratings, however, derive comfort from the wide experience of
its promoter in the textile industry and its established track
record of operations and its presence in textile cluster with
easy access to raw material and labor.
The ability of GPPL to increase in scale of operations along with
improving its profitability in light of the competitive nature of
the industry and raw material price fluctuation remains key
rating sensitivities. Further, improvement in solvency position
and debt coverage indicators would also remain crucial.
Detailed Description of the key rating drivers
During FY16 (refers to the period April 1 to March 31), Total
Operating Income (TOI) of GPPL decreased by 5.43%, and remained
moderate at INR43.45 crore as against INR45.95 crore in FY15.
Profits stood low primarily on the back of low value addition
nature of operations with loss reported during FY16. Capital
structure of GPPL remained leveraged due to low net worth base
and high dependence on bank borrowing to meet the working capital
requirement while debt protection metrics stood moderate.
Liquidity position stood weak marked by below unity current
ratio, negative operating cycle and moderately high working
capital utilization level for last 12-month period ended November
2016.
Mr. Bahadurchand H. Chopra has over four decades of experience in
the industry through his association with GPPL and also as a
partner in Gulshan Sarees which is engaged in similar business.
Mr. Ragunath R. Jhamb and Mr. Gulshan B. Chopra also have more
than two decades of experience through their association with
GPPL and Gulshan Sarees. GPPL has been in the textile business
since two decades with established operations and regional
presence, it has been also able to establish strong relationship
with the suppliers and customers.
Surat-based (Gujarat) GPPL was incorporated in March 1994 as a
private limited company by Mr. Bahadurchand H. Chopra, Mr.
Ragunath R. Jhamb, Mr. Gulshan B. Chopra, Mrs Sheelarani B.
Chopra. GPPL is engaged in the manufacturing of printed Sarees.
GPPL has an installed capacity of 495 lakh meters per annum as on
November 30, 2016.
During FY16, GPPL has reported a net loss of INR0.53 crore on a
total operating income of INR43.45 crore as against a PAT of
INR0.37 crore on a total operating income of INR45.95 crore in
FY15.
HERITAGE WORLD: CARE Assigns 'B+' Rating to INR15cr LT Loan
-----------------------------------------------------------
The rating assigned to the bank facilities of Heritage World
School (HWS) is primarily constrained by project implementation
risk, competition from existing schools and regulatory risk
associated with the education sector. The aforesaid constraints
are partially offset by experienced & qualified promoters; albeit
limited experience of the members in the education sector,
association with buoyant prospects of the K-12 segment in India.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-Term Bank Facilities 15.00 CARE B+; Stable
Assigned
Going forward, HWS's ability to successfully implement the
project and derive benefit from it and ability to attract &
enroll students as envisaged would be the key rating
sensitivities.
Detailed description of the key rating drivers
Heritage education and Human Welfare society is established under
the society registration Act, 1860. The society is founded by
Mr.Lal JI Rai who has an experience of more than two decades in
health care and construction industry. The land is situated on
the main road connecting to Allahabad-Delhi and Kolkata. The
society has acquired land on long term lease admeasuring 136000
Sq.fts, near NH2 Varanasi- Mughalsarai bypass from M/S. Heritage
Hotels P. Ltd (promoters owned and controlled concern). The land
has been acquired on lease for the period of 30 years.
The school project is envisaged to be completed in two phases.
The total cost of the project is INR28.84 crore (Rs.21.98 crore
for Phase-I & INR6.86 crore for Phase-II). Work on the project
commenced from November, 2015 and till July 31, 2016 society has
completed 25.57% of the total project cost for Phase-I and has
incurred INR5.63 crore ( funded by Heritage education & human
welfare society of INR4.67 crore & creditors of INR 0.96 crore).
HWS is expected to face competition from the existing and
prospective schools located/coming in the nearby regions.
Presently 15-20 reputed schools are running in Varanasi major of
them includes DPS, Kashi, Aryan Public School, Dayawati Modi
Academy, Sunbeam Group, St. John's, Kendriya Vidyalaya, CHS, Zee,
Gurunank and Jaipuria. Despite the increasing trend of
privatization of the education sector in India, regulatory
challenges continue to pose a significant threat to the
educational institutes.
Heritage Education & Human Welfare Society is incorporated under
the society registration act 1860. The society is establishing a
senior secondary school in the name of Heritage World School at
Chandauli, Varanasi. The school is being promoted by Mr. Lal Ji
Rai, Mr. Pankaj Rai, Smt Divya Rai and they are having experience
in health care industry for more than two decades. Heritage group
is one of the leading groups in Varanasi from last 20 years in
Health Care and Construction Industry. The health care business
is looked after by and Dr. Anushuman Rai, whereas real estate
sector is being looked after by Shri Pankaj Rai. Heritage group
is running a multi-specialty hospital i.e. Heritage hospital ltd
in Lanka, Varanasi (Uttar Pradesh) rated CARE BB+/CARE A4+ as on
March, 2016.
The school project is envisaged to be completed in two phases.
The total cost for the Phase I project is INR21.98 crore to be
funded through equity of INR7.37 crore and bank debt of INR 14.61
crore (yet to be tied up).
The Overall academic program of the school will be implemented in
two phases as stated above. First academic year is 2017-2018 and
session will begin in month of April 2017 from playgroup to class
7th. Admission for academic year 2017-2018 is expected to start
from December 2016. After completion of first phase the school
will be able to accommodate 784 students for academic year 2017-
2018.
HI-REACH CONSTRUCTION: CARE Cuts Rating on INR8.50cr Loan to B+
---------------------------------------------------------------
The revision in the long-term rating of Hi-Reach Construction
Equipments Private Limited (HRCL) factors in the decline in the
scale of operations, deterioration in capital structure, debt
service coverage indicators and elongation of operating cycle.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 8.50 CARE B+; Stable
Revised from CARE BB-
Short-term Bank Facilities 0.25 CARE A4 Reaffirmed
The ratings are further constrained by its exposure to volatility
in raw material prices and dependence on the real estate industry
which is inherently vulnerable to economic cycles. The ratings,
however, continue to draw comfort from the experienced promoters
and moderate profitability margins Going forward, HRCL's ability
to scale up its operations while improving its profitability
margins, capital structure along with an effective working
capital management shall be the key rating sensitivities.
The decline in FY16 (refers to the period April 1 to March 31)
was largely attributable to a slowdown in the construction
activities due to the subdued real estate and construction
industry leading to decline in demand of the construction related
products and consequently its scale of operations. The
profitability margin of the company in FY16 continues to be in
line with FY15 owing to low value addition and highly competitive
nature of industry reflected by PBILDT margin and PAT margin in
FY16. Overall gearing of the company continues to remain
leveraged due to high dependence on external borrowings to meet
the working capital requirements. The operating cycle elongated
significantly in FY16 on account of
slowdown in the construction activities leading to slow movement
of inventory and extended credit period given to the customers
amid the slowdown to push its sales in FY16.
The construction material (scaffold) sector is competitive,
comprising a number a large number of players in the organized
segment as a result of low entry barriers. Furthermore, the
sector is primarily dependent upon the demand of real estate and
construction sector across the globe. The risk is partially
mitigated by the fact that the promoters have considerable
experience in the similar industry.
HRCL was incorporated in September 1992 by Mr. Sanjay Mohan Kaul
and started commercial operations in October 1992. HRCL is
engaged in the manufacturing of scaffoldings items which find its
application in the construction industry. The company has two
manufacturing plants which are located at Sahibabad, Uttar
Pradesh, and Alwar, Rajasthan. The total combined installed
capacity of both the plants stood at 17,000 metrics tonnes per
annum (MTPA) as on March 31, 2016. HRCL procures raw materials
consisting mainly of cast iron and pipe angles from the domestic
market majorly Punjab, Uttar Pradesh, Rajasthan and Delhi. The
final products are sold in the domestic market on a pan-India
basis to various construction companies. The company is also
engaged into manufacturing and retailing store of home
furnishing, women apparels and accessories such as leather bag,
artificial jewelry, etc, under the brand name of Indian August in
Noida, Uttar Pradesh. The raw material mainly consists of
fabrics, leather, threads, etc, which is procured from local
market and the final products are sold through the retail store.
The total operating income (TOI) of HRCL has declined
exceptionally by about 47% during FY16 (refers to the period
April 1 to March 31) and stood at INR19.52 crore as against
INR36.64 crore which is for FY15. Furthermore, the company has
achieved TOI of INR12.50 for H1FY17 (refers to the period April 1
to September 30).
JOHNS PALLAZZIO: CRISIL Assigns 'B' Rating to INR8MM LT Loan
------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable' rating to the proposed
long-term bank facilities of Johns Pallazzio (JP).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term
Bank Loan Facility 8 CRISIL B/Stable
The rating reflects exposure to the risks related to ongoing
hotel project, expected below-average financial risk profile and
start-up phase in the intensely competitive hospitality sector.
These weaknesses are partially offset by extensive
entrepreneurial experience of promoters and favourable location
of the hotel.
Key Rating Drivers & Detailed Description
Weaknesses
* Exposure to project implementation risks: CRISIL believes that
JP faces High implementation as the construction of the structure
is yet to be started. JP has started the primary work of
excavation. The commercial operation of hotel is expected to
start from April 2018.
* Below average financial risk profile during initial years of
operations: The company is expected to have below average
financial risk profile during the initial years of operations.
The net worth is expected to remain modest on account of modest
accretion to reserves over the medium term. On account of modest
net worth and dependence on external debt to fund the ongoing
capex, the gearing of the company is expected to remain high over
the medium term. Further the debt protection metrics of the
company are also expected to be weak over the medium term.
* Exposure to risks related to cyclicality in the hospitality
sector: The hotel industry is vulnerable to changes in the
domestic and international economies. Typically the industry
follows a six-year cycle. It witnesses a reversal trend in the
wake of international slowdown due to the global financial
turmoil. During low demand periods, the revenue per available
room for premium hotels is expected to be affected more
significantly than for mid-scale or economy hotels. On the other
hand, costs remain high for premium properties even during
downward shifts in demand; cash flows from these properties are
therefore more susceptible to downturns. CRISIL believes that JP
will remain vulnerable to cyclical trends in hospitality
industry.
Strengths
* Favorable location of the hotel: The location is around 150kms
from Bangalore International Airport and 50kms from Hosur Railway
Station. The Project is on the National Highway and within 20 km
radius are two famous religious tourist destination Shree Parshwa
Padmavathi Shaktipeet Tirth Dham (famous Jain Temple) and Sri
Kattu Veera Anjaneya Temple (Famous 2500 yrs old hindu temple).
Also, Krishnagiri is business town famous for Granite Mines and
Tannery Industry which will result in demand for hotel room from
corporate throughout the year.
* Extensive entrepreneurial experience of promoters: The
proprietor of JP have extensive entrepreneurial experience of
over 2 decades. The promoters has transport business and a petrol
pump. The promoters have many land and other immovable assets in
and around Kirshnagiri region. However, this is the first venture
of the promoter in the hospitality industry. The company is
expected to benefit from the extensive entrepreneurial experience
of the promoters over the medium term.
Outlook: Stable
CRISIL believes JP would benefit over the medium term from
favorable location of the hotel. The outlook may be revised to
'Positive' if the company completes its project as expected in
stipulated timelines and ramps up its operations earlier than
expected. The outlook may be revised to negative in case there is
a cost or time over run in the project or if the ramp up in
operations is not as expected. Further the timely servicing of
term debt obligations will remain a key sensitivity factor.
JP, incorporated in 2015, is a propritor firm setting up a 30
room's capacity hotel named 'Hotel Ashok' in Thanjavur (Tamil
Nadu). The hotel is currently under construction and is expected
to be operational from April 2017. The company is promoted by Mr.
S. Noel Anthuvan.
The firm is in the project stage and has not recorded any
revenues in 2015-16.
K.A.I.G. CONSTRUCTIONS: CRISIL Assigns B+ Rating to INR4.5MM Loan
-----------------------------------------------------------------
CRISIL has revoked the suspension of its ratings on the bank
facilities of K.A.I.G. Constructions Private Limited (KAIG) and
has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to the
facilities. The ratings had been suspended by CRISIL on April 25,
2016, as KAIG had not provided information necessary for a rating
view. The company has now shared the requisite information,
enabling CRISIL to assign the rating.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 4.5 CRISIL A4 (Assigned;
Suspension Revoked)
Overdraft 4.5 CRISIL B+/Stable (Assigned;
Suspension Revoked)
The ratings reflect limited revenue visibility with modest order
book of INR20 crores as on December 31, 2016 to be executed by
July 2017. Going forward, revenue is also expected to be
supported by sale of plots. Operating margin is expected to be
moderate at around 10%.
Gearing and debt protection metrics are adequate. Liquidity is
supported by absence of any long term loans. Bank limit
utilisation is expected to be moderate with moderate reliance on
external funding for working capital requirements.
Key Rating Drivers & Detailed Description
Weaknesses
* Modest scale of operations amid intense competition in
construction industry: The company's modest scale of operations
is reflected in revenue of INR3.9 crore in fiscal 2016. The
construction industry and civil works sector are highly
fragmented and marked by presence of large players.
* High customer concentration and geographical concentration in
revenue: The company predominantly operates in and around
Madurai, Tamil Nadu and takes up orders from Public Works
Department (PWD), Government of Tamil Nadu.
Strengths
* Extensive experience of promoters: The promoters, Mr. I
Gurusamy and Mr. Ashok Kumar have experience of more than two
decades, and are both Class I contractors.
* Comfortable capital structure: Capital structure is
comfortable, with gearing of 0.03 time as on March 31, 2016. The
gearing is expected to remain comfortable owing to absence of
debt-funded capital expenditure over the medium term and moderate
reliance on external funding for working capital requirements.
Outlook: Stable
CRISIL believes KAIG will continue to benefit over the medium
term from the industry experience of its promoters in the civil
construction industry. The outlook may be revised to 'Positive'
in case of significant improvement in scale of operations and
profitability, leading to better financial risk profile,
particularly liquidity. Conversely, the outlook may be revised to
'Negative' if delay in execution of projects results in lower
revenue and profitability, or if decline in working capital
management, or any large capital expenditure weakens financial
risk profile.
Set up in 2001, KAIG is engaged in civil construction, primarily
irrigation projects in Tamil Nadu. The company is based in
Madurai (Tamil Nadu) and promoted by Mr. I. Gurusamy and Mr.
Ashok Kumar. Both the directors are Class I civil contractors.
Profit after tax was INR0.14 crore on operating income of INR3.3
crore in fiscal 2016, vis-a-vis loss of INR0.09 crore on
operating income of INR15.2 crore, for fiscal 2015.
KALIKUND DEVELOPERS: Ind-Ra Affirms 'B+' Long-Term Issuer Rating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed Kalikund
Developers' (KD) Long-Term Issuer Rating at 'IND B+'. The
Outlook is Stable.
KEY RATING DRIVERS
The affirmation reflects the execution risk for KD's ongoing
project, which leads to the risks of time and cost overrun. The
project is scheduled to be completed by December 2018; however,
till end-March 2016, only 57.67% of the total construction cost
was incurred and none of the flats were sold. The ratings are
constrained by the partnership structure of organization.
The ratings are supported by KD's promoter's extensive experience
of completing four residential projects over the last decade.
The ratings also factor in the locational advantage of the
project in terms of its vicinity to basic facilities such as
school, hospital, market, etc.
RATING SENSITIVITIES
Positive: The timely completion of the project and the sale of a
substantial number of housing units leading to a strong
visibility of cash flow will be positive for the ratings.
Negative: Any slowing down of flat booking leading to a cash flow
shortfall will be negative for the ratings.
COMPANY PROFILE
KD is a registered partnership firm constituted in 2007 for the
construction of residential towers. The firm is promoted by
Naresh R Mehta.
KINGFISHER AIRLINES: CBI Charges Mallya in Loan Default Case
------------------------------------------------------------
Reuters reports that Vijay Mallya, the liquor and aviation
tycoon, was charged on Jan. 24 with conspiracy and fraud
connected to a INR9 billion loan granted by a government-owned
bank, a Central Bureau of Investigation spokesperson said.
Reuters says the head of the Force India Formula One team and a
former owner of Indian Premier League cricket team Royal
Challengers Bangalore, Mallya moved to Britain last March after
being pursued in courts by banks seeking to recover about $1.4
billion the authorities claim is owed by his Kingfisher airline.
The report relates that the CBI, in its chargesheet, accused
Mallya of diverting from India INR2.54 billion intended for the
now-defunct airline.
In total, charges were brought against Mallya and nine other
people, as well as the airline itself, according to Reuters. A
former chairman and managing director of the government bank,
IDBI Bank Ltd, was arrested along with another four bank
executives on Jan. 23, says Reuters.
The CBI also arrested the airline's chief financial officer and
three senior officials, the report says.
The CBI spokesperson said the officials were to be held in
judicial custody until Jan. 23, pending a bail hearing.
According to Reuters, the arrests made were the first since 2014,
when the CBI initiated an enquiry into loans provided by the bank
to the already debt-ridden airline.
The Mallya case has emerged against the backdrop of regulatory
scrutiny over bank loans to over-extended companies, the report
states.
Reuters says the diplomatic passport Mallya was issued after his
Rajya Sabha membership was revoked in April 2016 following a non-
bailable warrant for his arrest.
Authorities had sought ways to have Mallya, who has said he is
living in "forced exile", deported by Britain, relates Reuters.
In an interview with Reuters in 2016, Mallya said that he owed
half of what was being reported. He also said he would return to
India on the condition that he was "assured of a fair trial . . .
if at all there needs to be a trial".
Reuters says the CBI action against Mallya may open the doors for
India to begin work on a formal extradition process, after
Britain rebuffed India's deportation request last year.
The CBI refused to comment on possible extradition proceedings
when contacted by Reuters on Jan. 24.
About Kingfisher Airlines
Headquartered in Mumbai, India, Kingfisher Airlines --
http://www.flykingfisher.com/-- formerly known as Deccan
Aviation Ltd., served about 35 domestic destinations with a fleet
of more than 40 aircraft, including Airbus jets and ATR 72
turboprops.
As reported in the Troubled Company Reporter-Asia Pacific on
Jan. 15, 2014, Bloomberg News said Kingfisher Airlines has
grounded planes since October 2012. The airline lost its
operating license in January 2013 after failing to convince
authorities it has enough funds to restart flights.
As reported in the TCR-AP on Nov. 25, 2016, the Times of India
said the Karnataka high court has ordered the winding up of the
now-defunct Kingfisher Airlines (KFA). Justice Vineet Kothari
gave this direction on Nov. 18, while allowing a petition filed
in 2012 by Aerotron, a UK-based company, for recovery of a little
over $6 million due to it for supply of rotable aircraft
components to KFA.
MGM INFRA: CARE Lowers Rating on INR5.69cr Long Term Loan to D
--------------------------------------------------------------
The revision in the rating assigned to the bank facilities of MGM
Infra Development Solution Private Limited (MGM) takes into
account the delays in debt servicing of the company due to its
weak liquidity position.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 5.69 CARE D Revised from
CARE B
Detailed description of the key rating drivers
There are ongoing delays in servicing the principal amount and
interest for term loan. The delays are on account of delay
in completion of project which was initially expected to be
operational from May, 2015. Also, there is weak liquidity as
the company is unable to generate sufficient funds in a timely
manner.
MGM, incorporated in 2009, is a private limited company being
managed by Mr. Gurpreet Singh and Mr. Manpreet Singh.
The company is setting up a unit to manufacture concrete blocks,
bricks, pavers etc at Roopnagar, Punjab. The commercial
operations commenced from December, 2015 with substantial
completion of project. The main raw materials required by the
company include fly ash, cement and ash. The fly ash is mainly
procured from Ropar Thermal Power Plant of PSPCL. The final
products are sold to builders and developers situated in Punjab.
The commercial operations were expected to commence from May,
2015, however, the same commenced from December, 2015 due to time
overrun. FY17 will be the first full year of operations.
Furthermore, the total cost of setting up the unit was revised to
INR18.50 crore from INR18.54 crore (earlier estimates). As on
September 30, 2016, MGM had incurred an expenditure of INR17.73
crore. The same has been funded through promoters' contribution
of INR4.61 crore, term loan of INR4.92 crore and venture capital
fund by IFCI amounting to INR8.20 crore. Debt of INR0.30 crore is
not yet tied up.
In FY16 (refers to the period April 1 to March 31), MGM has
achieved a total operating income of INR0.62 crore with net
loss of INR1.53 crore.
NEERG ENERGY: Moody's Assigns Ba3 Rating to Senior Secured Notes
----------------------------------------------------------------
Moody's Investors Service has assigned a provisional (P)Ba3
rating to the proposed 5-year USD senior secured notes of Neerg
Energy Ltd.
The outlook on the rating is stable.
The provisional status of the rating will be removed upon
completion of the transaction on satisfactory terms.
Neerg will use the proceeds from the USD notes to subscribe to
Masala bonds issued by seven restricted companies (the restricted
group), which are wholly-owned/majority-owned by Renew Power
Ventures Private Limited (RPVPL, unrated). Holders of the USD
notes will benefit from a first ranking charge over the Masala
bonds, thereby establishing a linkage between the credit profile
of Neerg and that of the restricted group.
The proceeds from the Masala bonds will be used to refinance the
existing debt of the restricted subsidiaries.
Neerg is held by a trust and its ownership is not linked to RPVPL
or its subsidiaries. Neerg will not undertake any other business
activity other than investing in the proposed Masala bonds.
The restricted companies are: Renew Solar Energy (Karnataka) Pvt
Ltd, Renew Solar Energy (TN) Pvt Ltd, Renew Wind Energy
(Karnataka) Pvt Ltd, Renew Wind Energy (MP Two) Pvt Ltd, Renew
Wind Energy (Rajkot) Pvt Ltd, Renew Wind Energy (Shivpur) Pvt Ltd
and Renew Wind Energy (Welturi) Pvt Ltd. All seven companies are
unrated.
RATINGS RATIONALE
"The (P)Ba3 rating of the notes is closely linked to the credit
quality of the restricted group, which benefits from its
portfolio diversification across five states with different
wind/solar resources and distinct regimes in India," says
Abhishek Tyagi, a Moody's Vice President and Senior Analyst.
This diversification helps mitigate the risk of its exposure to
seasonal variations in the availability of wind and solar
resources, as well as the offtakers' weak financial profiles.
"The (P)Ba3 rating is also supported by the experienced
management team and strong financial sponsors, which have infused
equity at the RPVPL level over the last five years," Tyagi adds.
"On the other hand, the (P)Ba3 rating factors in the short
operating track record of most of the group's projects and the
aggressive growth plans of RPVPL," adds Tyagi.
Moody's expects the restricted group to have high financial
leverage, with FFO interest coverage at 1.5x-1.6x and funds from
operations (FFO) to debt at 6.0%-6.5% over the next 12-24 months.
These levels are in line with a Ba3 rating.
The restricted group is also exposed to limited operating risks,
as its long-term equipment warranties for solar panels and wind
turbines, limited term performance guarantees, and operating and
maintenance contracts as per standard industry practice mitigate
the technology and operational risks of its projects
Further, as the restricted group companies are wholly or majority
owned by RPVPL, Moody's believes that there is a close
relationship between the credit profile of the issuer and that of
RPVPL. As such, any marked deterioration in RPVPL's credit
profile could impact the rating of the senior secured bonds.
However, the terms of the proposed Masala bonds, which serve as a
security to the USD notes, include restrictions on the restricted
group's leverage and on the upstreaming of dividends and other
types of payments to its parent and affiliates. These terms help
mitigate concerns over potential material cash leakages to the
parent.
In addition, Moody's expects the parent will show a strong
commitment to avoiding a material deterioration in the restricted
group's credit profile, given its importance to the parent.
The rating also takes into account the hedging arrangement
provided by Neerg, which includes a full hedge for the coupon
with no currency risk and a call spread for the principal amount
which protects Neerg against USD-INR exchange rate movements up
to a defined level, as well as a redemption premium for the
Masala bonds to provide additional buffer.
The USD notes will be secured by a first priority charge over the
Masala bonds, cash account of Neerg and by the pledging of
Neerg's shares. The Masala bonds in turn will be secured by the
moveable and immovable assets of the restricted group , as well
as by majority share pledges and by rights under project
documents. The Masala bonds will be guaranteed by each of the
Masala bond issuers and through a guarantee provided by RPVPL.
The parent guarantee will be released upon combined leverage
ratio falling below 5.5x.
The stable outlook reflects Moody's expectation of stable cash
flows from long-term Power Purchase Agreements over the next few
years and the absence of construction risk for the portfolio of
assets in the restricted group. These factors should support the
ability of the restricted group to maintain financial metrics
within the tolerance levels of its (P) Ba3 ratings category.
Upward pressure on the notes' rating is unlikely over the next
12-18 months, based on the company's business profile and
financial strategy. The ratings could be upgraded over time if
the restricted group maintains FFO to debt and FFO interest
coverage above 12% and 2.1x, respectively, on a sustained basis.
The rating could come under pressure if FFO/debt declines below
4%-5% on a sustained basis for the restricted group.
Additionally, the rating could face downward pressure if there is
a material change in the restricted group's growth plans and
financial strategy, leading to reduced financial flexibility
within its (P)Ba3 rating.
The principal methodology used in this rating was Power
Generation Projects published in December 2012.
Neerg Energy Ltd is a held by a trust, and was incorporated in
Mauritius in January 2017. Neerg is the issuer for the proposed
USD notes. Neerg will use the proceeds from the USD notes to
subscribe to Masala bonds issued by seven restricted companies
(the restricted group), which are wholly-owned/majority-owned by
Renew Power Ventures Private Limited (RPVPL, unrated). The 7
subsidiaries have a capacity of 504 MW of wind and solar power
plants in India, of which 471.5 MW is operational and 31.5 MW is
to be commissioned by March 2017.
OVERSEAS TIMBER: Ind-Ra Affirms 'B-' Long-Term Issuer Rating
------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed Overseas Timber
Corporation's (OTC) Long-Term Issuer Rating at 'IND B-'. The
Outlook is Stable.
KEY RATING DRIVERS
The affirmation reflects the company's continued small scale of
operations and weak credit metrics. In FY16, the company earned
revenue of INR69 million (FY15: INR81 million), interest coverage
of 0.9x (0.7x) and net financial leverage of 17.2x (15.6x). The
revenue declined in FY16 because of a lower number of orders
executed by the company and net financial leverage increased due
to an increase in debt level.
Moreover, the liquidity profile of the company is weak with the
average working capital utilization being around 97% during the
12 months ended December 2016.
The ratings, however, are supported by more than three decades of
experience of the company's promoters in trading timber.
RATING SENSITIVITIES
Positive: A positive rating action could result from a sustained
improvement in the EBITDA interest coverage ratio.
COMPANY PROFILE
OTC is engaged in timber trading. It is a partnership firm
formed in 2002 between Kirti Manilal Lakdawala, Akhilesh Kantilal
Parekh, Deepak Visanji Patel, Skyline Holdings Pvt Ltd and
Jignesh M Lakdawala. The firm is managed by Kirti Manilal
Lakdawala. OTC imports timber logs from African countries and
sells them to sawmill owners all over India.
PADMAVATHI ASSOCIATES: CARE Assigns B+ Rating to INR7cr LT Loan
---------------------------------------------------------------
The rating assigned to the bank facilities of Padmavathi
Associates (PA) is constrained by the small scale and short track
record of operations, salability risk of the ongoing residential
real estate project, industry risk associated with high
competition in real estate business, geographical concentration
risk and constitution of the entity as a partnership firm.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 7.00 CARE B +; Stable
Assigned
However, the rating is underpinned by the experience of promoters
in the real estate industry, favorable location of the project
and achievement of financial closure of the project.
Going forward, the firm's ability to complete the project in
timely manner and its ability to sell the units and collect
advances would be the key rating sensitivity.
Detailed description of the key rating drivers
Padmavathi Associates (PA) was promoted by Mr. Y Suresh who has
been engaged in the business of real estate for more than one
decade. PA was started in the year 2013 and has short track
record of operations. Furthermore, it has small scale of
operations with total operating income of INR0.76 crore in FY16
and a low net worth base of INR2.53 crore as on March 31, 2016.
PA is primarily located in the Telangana State and executing
projects in and around Hyderabad which reflects high geographical
concentration risk. The current residential project, 'Aakasha
Lake View', of PA has industry risk associated with high
competition in real estate business. Furthermore, the said
residential project is likely to achieve COD in 2020, which
exposes the project to substantial salability risk. While the
firm has received expression of interest from several individual
customers; any delay in attaining envisaged sales and realizing
potential revenue may stretch the firm's cash flow. However, the
salability risk of the residential project is mitigated to an
extent due to favourable location which is one of the developing
residential and commercial areas of Hyderabad i.e, Miyapur which
is connected to the Bombay Highway on one side and Miyapur metro
station on the other side, and many important places were
accessible from the project location.
The firm has achieved financial closure of ongoing project in
June 2016. The project is proposed to be funded by INR7 crore of
project term loan from bank, INR4.68 crore as advance from
customers and rest INR4 core as partners' capital. As on November
30, 2016, the firm has incurred INR3.74 crore (around 24% of
total project cost) towards construction of residential project
funded by partners' capital of INR2.54 crore and bank debt of
INR1.30 crore.
Partnership firm nature of business has an inherent risk of
withdrawal of capital at the time of personal contingency. It
also has the risk of business being discontinued upon the
death/insolvency of the Partners.
Padmavathi Associates (PA) was established in the year 2013 as a
partnership firm, promoted by Mr. Y Suresh, Ms. Y Kavitha and Ms.
Y D Prasunamba. The firm is engaged in construction of
residential apartments and PA is currently implementing its first
project; Aakasha Lake View, located at Miyapur, Hyderabad. The
project is expected to be completed by March 2020.
'Aakasha Lake View' is a residential apartment project undertaken
as a joint development agreement between PA and various land
lords (Mr R Indira Krishna, Mr. G Sandhya Rani, Ms B Lakshmi, Mr.
M V Chalama Reddy, Ms K Hemalatha, Master Kosal Sai Reddy, Master
Ganesh Reddy and Ms Swarna) with a sharing ratio of 71.11% (64
flats) and 28.89% (26 flats) respectively. The firm is
constructing 90 residential flats comprising basement, ground +
four floors with total four blocks on a land area of 5962.47 sq.
yards at Miyapur, Hyderabad. The firm has obtained necessary
approvals from Greater Hyderabad Municipal Corporation (GHMC) for
construction of the said apartment. The residential apartment
will have 2 BHK / 3 BHK flats of various proportions i.e., 1200
sq. ft. to 1600 sq. ft. with a total built-up area of 5962.47 sq.
yards. The sale price will range between INR0.19 crore to INR0.26
crore with an average selling price ranging between INR1600 /-
per sq. ft. to INR1700/- per sq. ft.
In FY16, PA reported a Profit after Tax (PAT) of INR 0.02 crore
on a total operating income of INR0.76 crore, as against a PAT
and TOI of INR0.02 crore and INR0.30 crore respectively in FY15
PALNADU INFRASTRUCTURE: CRISIL Reaffirms 'D' Term Loan Rating
-------------------------------------------------------------
CRISIL has reaffirmed its ratings on the long term bank facility
of Palnadu Infrastructure Private Limited (PIPL) at 'CRISIL D'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Long Term Loan 3.5 CRISIL D (Reaffirmed)
Proposed Long Term
Bank Loan Facility 2.15 CRISIL D (Reaffirmed)
Term Loan 10.35 CRISIL D (Reaffirmed)
CRISIL had, vide its rating rationale dated August 8, 2016,
downgraded its rating on the long-term bank facilities of Palnadu
Infrastructure Private Limited (PIPL) to 'CRISIL D' from 'CRISIL
B+/Stable'. The downgrade reflects instances of delay in
servicing debt; the delays were caused by weak liquidity on
account of inadequate cash accrual.
The rating reflects instances of delay in servicing debt; the
delays were caused by weak liquidity. The weak liquidity is on
account of delays in commencement of operations in its commercial
property. Moreover, it has a high degree of geographic
concentration in its revenue profile, and is vulnerable to
cyclicality inherent in the Indian real estate industry. However,
the company benefits from the extensive industry experience of
its promoters and the strategic location of its project.
Key Rating Drivers & Detailed Description
Weaknesses
* Risk related to commencement and stabilisation of operations in
its ongoing project: PIPL has been facing delays in commencement
of operations in its ongoing commercial project in Hyderabad.
This has resulted in inadequate cash accruals to service debt
obligations.
* Revenue concentration risks: PIPL is exposed to revenue
concentration risks from its single project. The company is
developing a single commercial property in Hyderabad since 2014.
It is hence exposed to risks related to geographic concentration
in revenues.
* Instances of delays in servicing maturing debt obligation:
There have been instances of delay by PIPL in meeting its
maturing debt obligations over the last six months ended Dec. 31,
2016. The delays have been caused by weak liquidity. The weak
liquidity is on account of delay in commencement of operations in
its commencement of operations in its commercial property which
has resulted in weak liquidity.
Strengths
* Extensive industry experience of its promoters and the
strategic location of its project: PIPL is promoted by Mr. Mahesh
Reddy, who has over a decade's experience in real estate
development business. He has developed an aggregate construction
area of 12,000 square feet.
PIPL was set up in 2013 by Mr. K Mahesh Reddy, Mr. Rajesh Alla,
and their family members. The company develops real estate, and
is currently developing a commercial real estate project in
Hyderabad.
In fiscal 2016, PIPL reported net loss of INR5.75 lacs on
operating income of Rs.0 lacs as compared to net loss of INR5.98
lacs on operating income of Rs.0 lacs in the previous fiscal.
RAJHANS METALS: CARE Revises Rating on INR47.35cr Loan to BB-
-------------------------------------------------------------
The revision in the long-term rating of Rajhans Metals Private
Limited (RMPL) takes into account cash profit reported by the
company during FY16 (refers to the period April 1 to March 31),
after a period of three years, on the back of improvement in the
PBILDT margin due to decline in raw material prices which was not
entirely passed on to the customers as well as operational
synergies achieved due to amalgamation of Rajhans Alloys Private
Limited (RAPL; associate concern of RMPL engaged in the same line
of business) with RMPL. Furthermore, the revision also takes into
account improvement in overall gearing as on March 31, 2016, on
the back of subordination of unsecured loans to bank debt.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 47.35 CARE BB-; Stable
Revised from CARE B+
Short-term Bank Facilities 19.35 CARE A4 Reaffirmed
The ratings, however, continue to be constrained by
susceptibility of RMPL's profitability margins to volatile raw
material prices and foreign currency rate fluctuation on its
imports, high working capital intensity of its operations and
presence in the highly competitive and fragmented brass and
copper alloy extrusion industry.
The ratings continue to draw strength from vast experience of the
promoters along with RMPL's established track record of
operations in the industry aided by a good sales and distribution
network.
RMPL's ability to improve its operating profit margin by managing
raw material price volatility and foreign exchange rate
fluctuations in a highly competitive brass and copper industry
along with efficient management of its working capital
requirement would be the key rating sensitivities.
Detailed description of the key rating drivers
RMPL is one of the large players operating in brass/copper
extrusion cluster located in Gujarat. RMPL has an established
track record of operations of more than 25 years in industry with
established sales and distribution network. The promoters have
demonstrated their ability and resourcefulness to support the
operations.
RMPL's operations are working capital intensive as over 80% of
capital employed in business is being deployed in funding net
working capital, which results in high reliance on external
funding. However, the leverage indicator as on March 31, 2016,
improved on back of increase in amount of subordinated unsecured
loans.
The operating profit margins continue to remain susceptible to
volatile raw material prices as most of the key raw materials are
metal commodity where prices are driven by global factors and
foreign exchange fluctuation in wake of partial hedging.
Analytical approach: Standalone approach as RAPL has been
amalgamated with RMPL post the approval from Hon'ble Bombay High
Court vide order dated February 12, 2016. Previously, combined
approach was considered.
Incorporated in 1987, Jamnagar-based (Gujarat) RMPL is engaged in
the manufacturing of brass & copper alloy extruded rods and
extruded sections. RMPL's products find application in automobile
components, fixtures & fittings and lockbodies.
Hon'ble Bombay High Court, vide its order dated February 12,
2016, had approved the scheme of amalgamation of RAPL with RMPL
with effect from April 01, 2014. RAPL is engaged in the
manufacturing of brass & copper extrusion rods and components.
The amalgamation was carried out to achieve operational synergies
as both the entities are engaged in the same line of business.
As on December 31, 2016, RMPL had an aggregate installed capacity
of 21,600 Metric Tons per Annum (MTPA) for melting and 12,600
MTPA for extrusion of brass rods & sections.
Based on FY16 audited results, RMPL reported a total operating
income (TOI) of INR287.77 crore (Rs.301.94 crore in FY15) with a
PAT of INR0.80 crore (net loss of INR3.21 crore in FY15).
Furthermore, as per H1FY17 provisional results, RMPL reported a
TOI of INR142.88 with a PBT of INR3.17 crore.
RATNAGARBHA AGRO: CARE Reaffirms 'D' Rating on INR12.99cr LT Loan
-----------------------------------------------------------------
The rating assigned to Ratnagarbha Agro Private Limited (RAPL)
takes into account ongoing debt servicing due to stressed
liquidity position.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 12.99 CARE D Reaffirmed
Detailed description of the key rating drivers
Ratnagarbha Agro Private Limited is engaged in processing of
wheat into refined flour (Maida), Suji and flour (Atta).
Company's liquidly issues resulted into delays in servicing of
interest and principal repayment of ongoing term loan.
Ratnagarbha Agro Private Limited (RAPL) was incorporated in
February, 2007 and commenced its commercial operations
in October 2013. RAPL is engaged in processing of wheat into
refined flour (Maida), Suji and flour (Atta) and has an
installed capacity of 90,000 metric tonne per annum (MTPA) as on
March 31, 2015 at its manufacturing unit in Hardoi, Uttar
Pradesh. The company is promoted by Mr. Shri Kishan Agrawal and
Mr. Ram Kishan Agrawal. Mr. Shri Kishan Agrawal looks after
overall affairs of the company and has an experience of around
two decades in processing and trading of agro products through
group company SRPL. Mr. Ram Kishan Agrawal looks after finance
and accounts functions of the company and has an experience of
around 6 years in processing of wheat through his association
with SRPL.
RAVI SHEET: CARE Assigns B+ Rating to INR7.51cr Long Term Loan
--------------------------------------------------------------
The ratings assigned to the bank facilities of Ravi Sheet
Processors Private Limited (RSPPL) are primarily constrained on
account of its moderate scale of operations, thin profit margins,
leveraged capital structure, weak debt coverage indicators and
working capital intensive nature of operation. The ratings are
also constrained by RSPPL's presence in highly fragmented
industry, susceptibility of its profit margins to fluctuation in
prices of raw material and external factors.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 7.51 CARE B+; Stable
Assigned
Short-term Bank Facilities 2.25 CARE A4 Assigned
The ratings, however, derive comfort from the experienced
promoters along with established track record of business
operation.
RSPPL's ability to increase its scale of operations along with
improvement in overall financial risk profile would remain key
rating sensitivities.
Detailed description of the key rating drivers
Total operating income (TOI) of RSPPL remained moderate at
INR37.60 crore during FY16 (refers to the period April 1 to
March 31) compared with INR34.22 crore in FY15 thereby
registering a growth of 9.87% on the back of increase in the
sales volume on account of increase in demand from the end-user
industries. However, profitability of RSPPL remained thin marked
by low PBILDT and PAT margin on account of trading nature of
operations. Capital structure of RSPPL stood leveraged marked by
an overall gearing ratio of 2.45 times as on March 31, 2016,
mainly on account of low net worth base while debt coverage
indicators remained weak marked by high total debt to GCA ratio
of 52.38 times as on March 31, 2016.
The liquidity position of RSPPL remained moderate marked by
current ratio of 1.58 times as on March 31, 2016 and long
operating cycle on the back of higher debtor's days.
RSPPL is promoted by Mr. Narendrabhai Patel and Ms Jyotsnaben
Patel. Later on, Mr. Tushar Patel and Mr. Saurabh Patel became
directors of RSPPL in 2004. All of them possess overall
experience of more than a decade in steel industry.
Ahmedabad-based (Gujarat) RSPPL was incorporated in 1998 as a
private limited company. It is engaged in the business of
processing of MS Sheets which is used in engineering and capital
goods industry. It procures Mild Steel (MS) Coils manufactured by
steel companies such as Essar Steel, Jindal Steel, etc, directly
as well as from vendors. It sells MS Sheets to the wholesalers
who then sell it to the end users. M.S. Sheets are used in
various industries such as construction, engineering, etc, for
structural, mechanical and general engineering purpose.
During FY16, RSPPL reported PAT of INR0.07 crore (FY15: INR0.07
crore) on a total operating income (TOI) of INR37.60 crore (FY15:
INR34.22 crore). During 8MFY17 (Provisional), RSPPL has achieved
TOI of INR25.80 crore.
REGENERATIVE MEDICAL: Ind-Ra LT Lowers Issuer Rating to 'B+'
------------------------------------------------------------
India Ratings and Research (Ind-Ra) has downgraded Regenerative
Medical Service Private Limited (RMSPL) Long-Term Issuer Rating
to 'IND B+' from IND BB. The Outlook is Stable.
KEY RATING DRIVERS
The downgrade reflects deterioration in the credit profile of
RMSPL. Revenue declined 17.3% yoy to INR172 million in FY16.
The decline in revenue was mainly due to the temporary
discontinuation of cell Regrow segment during FY15-FY16.
Interest coverage (operating EBITDA/gross interest expense) was
negative 7.7x in FY16 (FY15: 0.7x) and net financial leverage
(total adjusted net debt/operating EBITDA) was negative 0.7x in
FY16 (FY15: 5.8x) on account of decline in EBITDA margins.
EBITDA margins were negative 42.2% in FY16 (FY15: 3.9%) due to
shut down of Regrow business and decline in revenue which
directly hampered the margins. The company has now given the
clinical trial to restart its cell Regrow business (which was
discontinued due to changes in government regulations), and is
expecting commercialization certificate for the same by mid of
February, 2017. Ind-Ra expects RMSPL's EBITDA margins and credit
metrics to improve in FY18 on account full operations in the stem
cell banking and regrow cell therapy segment.
The ratings, however, are supported by the firm's strong
liquidity position with the fund-based facilities being utilized
at an average of 38.1% over the 12 months ended December 2016.
The ratings are further supported by RMSPL's founders' over two
decades of experience in the stem cell banking and cell
regenerative therapies.
RATING SENSITIVITIES
Positive: A significant increase in the scale and profitability,
leading to sustained improvement in credit metrics, could be
positive for the ratings.
Negative: Non-achievement of revenue and profitability from
regrow business as expected by management could be negative for
ratings.
COMPANY PROFILE
RMSPL was set up in 1989 as Satyan Intermediaries and was engaged
in indenting. In 2009, Satyan Intermediaries was renamed RMSPL
and started carrying out stem cell banking (contributes to 100%
of revenue).
S. K. JAI: CARE Assigns B+ Rating to INR5.0cr Long Term Loan
------------------------------------------------------------
The rating assigned to the bank facilities of S. K. Jain
Constructions Pvt. Ltd. (SKJ) are constrained by its small scale
of operation, significant geographical concentration with single
state operation, volatility associated with input prices,
working capital intensive nature of business and high competition
in the industry on account of low complexity of work involved
with sluggish economic scenario. The aforesaid constraints are
partially offset by its experienced promoters with long track
record of operations, healthy order book position indicating
satisfactory revenue visibility and comfortable capital
structure.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 5.00 CARE B+; Stable
Assigned
Short term Bank Facilities 7.00 CARE A4 Assigned
The ability of the company to maintain a healthy order book
position, ability to execute orders within stipulated time
period, timely receipt of contract proceeds and ability to manage
working capital effectively would be the key rating
sensitivities.
Outlook: Stable
Detailed description of the key rating drivers
SKJ is a relatively small player in the construction business,
with total operating income and PAT of INR8.24 crore and INR0.28
crore respectively, in FY16. Further, the net worth base and
total capital employed was low as on Mar.31, 2016. This apart,
the profitability of the company has been moderate over the years
due to volatility in the prices of input materials. Further, to
the company has achieved total operating income of INR4.52 crore
during 9MFY17.
SKJ operates in the state of Chhattisgarh with majority of the
projects executed for structural fabrication, erection, and
commissioning works. In view of its presence in a single state,
the company is exposed to geographical concentration risk to a
large extent.
Steel, bitumen, cement and pipes are the major inputs for SKJ,
the prices of which are highly volatile. Moreover, the company
does not have any long term contracts with the suppliers for the
purchase of the aforesaid input materials.
Hence, the profitability margins of the company are exposed to
any sudden spurt in the input material prices. In absence of
escalation clauses in the majority of contracts, any increase in
input prices will affect the profitability of the company.
SKJ's business being structural fabrication, erection, and
commissioning works is working capital intensive by nature. The
average collection period remained in the range of 55-167 days
during FY14-FY16 leading to very high operating cycle during the
same period. Accordingly, the average utilization of the cash
credit limit remained high during the last 12 months ended
December, 2016.
The company has to bid for contracts based on tenders and upon
successful technical evaluation of various bidders, the lowest
bid is awarded the contract. Since the type of work done by SKJ
is mostly commoditised, the company faces intense competition
from other players.
The key promoter, Mr. Sushil Kumar Jain (aged about 56 years) has
an experience of around three decades in the civil construction
industry. He looks after the overall management of the company,
with adequate support from other directors and a team of
experienced personnel. Further, SKJ commenced commercial
operation in 1990 (as a proprietorship concern) and accordingly
has a long track record of commercial operation.
SKJ has healthy order book position with a strong order book
aggregating INR40.50 crore (4.92x of FY16 revenue) as on
January 11, 2017, executable within the next 15 months, providing
a satisfactory long term revenue visibility.
The debt profile of the company consists of cash credit limit
from bank and unsecured loans from promoters. The overall gearing
ratio remained comfortable at below unity at 0.69x as on Mar.31,
2016.
SAMBHAV EXIM: CARE Assigns 'B' Rating to INR10cr Long Term Loan
---------------------------------------------------------------
The ratings assigned to the bank facilities of Sambhav Exim (SBE)
is constrained on account of implementation and stabilization
risk associated with its ongoing project, SBE's presence in the
highly competitive and fragmented flexible packaging industry.
The ratings are further constrained by susceptibility of its
profit margins to fluctuation in raw material prices and risks
associated with its constitution being a partnership firm.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 10 CARE B; Stable
Assigned
Long-term/Short-term Bank 6 CARE B; Stable/CARE A4
Facilities Assigned
The ratings, however, derives comfort from the wide experience of
the partners in the packaging industry and favorable industry
scenario of the flexible packaging industry.
The ability of SBE to complete its project within time and cost
parameters and achieve the envisaged scale of operations and
profitability would be the key rating sensitivities.
Detailed description of the key rating drivers
The partners of SBE Mr. Vijaykumar P Shah and Mr. Ankit Kumar P
Shah have experience of more than a decade in the packaging
industry due to their association with Bardanwala & sons which is
proprietorship business of Mr. Pravinkumar B. Shah their father
who has been engaged in the packaging industry since four
decades.
SBE is setting up a debt funded green field project to
manufacture woven sack bags, BOPP woven bags and flexible pouches
with a proposed manufacturing capacity of 3,600 metric tons of
packaging material per annum. The total cost of the project is
estimated to be around INR16.10 crore which is proposed to be
funded in debt to equity ratio of 1.64:1.
Established in September, 2015, Ahmedabad-based (Gujarat) Sambhav
Exim (SBE) is a partnership firm managed by two partners viz. Mr.
Vijaykumar P Shah and Mr. Ankit Kumar P Shah. SBE is setting up a
plant in Ularia, Ahmedabad to manufacture woven sack bags, BOPP
woven bags and flexible pouches with a proposed manufacturing
capacity of 3,600 metric tons of packaging material per annum.
The products manufactured by SBE are used in various industries
such as agriculture, chemical, fertilizers, food etc. Both the
partners have over a decade of experience in the packaging
industry.
SAMRAT IRONS: Ind-Ra Raises Long-Term Issuer Rating to 'BB+'
------------------------------------------------------------
India Ratings and Research (Ind-Ra) has upgraded Samrat Irons
Private Limited's (SIPL) Long-Term Issuer Rating to 'IND BB+'
from 'IND BB'. The Outlook is Stable.
KEY RATING DRIVERS
The upgrade reflects improvement in SIPL's business risk profile
driven by revenue growth and improved working capital cycle. The
company's 1HFY17 sales were 8% higher at INR2,582 million
(1HFY16: INR2,382 million) on y-o-y basis. During FY16, it
registered a modest growth of 4.5% with total sales at INR4,675
million after registering 64% growth during the previous year
(FY15: INR4,474 million; FY14: INR2,727 million). The growth is
mainly attributed to increased volumes sales led by expanded
dealership network on the back of stable demand for steel
products in the construction segment. SIPL's working capital
cycle improved (FY16: 41 days; FY15: 47 days) mainly on account
of the faster inventory turnover (FY16: 17 days; FY15: 27 days).
The improvement in working capital cycle was sustained to a large
extent in 1HFY17 (43 days). 1HFY17 numbers are unaudited.
The ratings factor in SIPL's sole distributorship of the TMT bars
of Tata Steels Limited ('IND AA'/Negative- placed on RWE) in
Andhra Pradesh and Telangana which immunes the business from raw
material price volatility to a large extent (FY15-H1FY17: 1.9%;
FY14: 1.4%).
In FY16, net leverage (adjusted net debt/EBITDA) was 6.3x (FY15:
7.1x, FY14: 5.3x) while interest coverage (EBITDA/gross interest
expense) was 1.4x (FY15: 1.7x, FY14: 1.4x). According to 1HFY17
financials, interest cover improved to 1.6x (1HFY16: 1.3x) due
continued efficient working capital cycle and lower interest
rates sanctioned by the bank.
The ratings, however, are constrained by high competition in the
fragmented steel trading business limiting any significant margin
expansion. High working capital intensity and thin profitability
owing to the inherent trading nature of the business limits any
significant improvement in leverage.
RATING SENSITIVITIES
Positive: Improvement in the credit metrics with interest cover
increasing above 2.0x level will be positive for the ratings.
Negative: Deterioration in the credit metrics will be negative
for the ratings.
COMPANY PROFILE
Incorporated in FY12, SIPL deals in trading of steel products.
SHINING STAR: Ind-Ra Affirms 'B-' Long-Term Issuer Rating
---------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed Shining Star
Solutions & Services Private Limited's (SSPL) Long-Term Issuer
Rating at 'IND B-' with a Stable Outlook.
KEY RATING DRIVERS
The ratings are constrained by SSPL's small scale of operations
despite an improvement in revenue, and high leverage. Moreover,
the company has high revenue dependence on CIMB Group. For
1HFY17, the company reduced its employee strength to six
employees from eight in FY16 (FY15: 10), as CIMB Group's
operations trimmed.
SSPL reported revenue of INR31 million for 1HFY17 (FY16: INR43.65
million; 1HFY16: INR23.39 million). The year-on-year improvement
in revenue was supported by the additional revenue the company is
generating from the IT support services extended to CIMB
Securities (Singapore) FY16 onwards, over the contracted revenue
of INR25 million (contract term FY13-FY18). Thus, EBITDA margin
improved to 53% in 1HFY17 (FY16: 48%), supporting the improvement
in credit metrics. For 1HFY17, interest coverage (operating
EBITDA/gross interest) and net leverage (total debt net of
cash/operating EBITDA) was 1.5x (FY16: 1.4x) and 7.4x (12.1x),
respectively.
The agency expects the company to continue generating additional
revenue from IT support services and to report scale of
operations of around INR50 million over FY17-FY20, thereby
preventing any major improvement in the credit metrics.
Moreover, SSPL's continued small scale of operations shall result
in a cash flow shortfall for NCD repayment due in FY19,
indicating significant refinancing risk. The NCDs are redeemable
at 6% premium on maturity.
The ratings also factor in SSPL's promoters' around 10 years
association with CIMB Group and experience in areas of human
resources, statutory compliance and administration. The company
expects its association with CIMB Group to support revenue
stability over FY17-FY20.
RATING SENSITIVITIES
Negative: A sustained deterioration in the liquidity will be
negative for the ratings.
Positive: A sustained rise in the scale of operations with an
improvement in the credit metrics will be positive for the
ratings.
COMPANY PROFILE
SSPL was incorporated in September 2013 to provide various
support services in areas of human resources, administration,
information technology, primarily to financial services companies
globally.
SHIVA SPECIALITY: CARE Lowers Rating on INR69.89cr LT Loan to D
---------------------------------------------------------------
The revision in the ratings assigned to the bank facilities of
Shiva Speciality Yarns Limited (SSYL) takes into account the
ongoing delays in debt servicing due to the stressed liquidity
position of the company.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 69.89 CARE D Revised from
CARE C+
Short-term Bank Facilities 1.00 CARE D Revised from
CARE A4
Detailed description of the key rating drivers
On account of stressed liquidity position, there are ongoing
delays in the servicing of the interest and principle repayments
of the term loans. Furthermore, there are overdrawals in the cash
credit limits which have not been settled for a period exceeding
30 days.
The total operating income of the company declined by ~3% to
INR127.41 crore in FY16 (refers to the period April 1 to
March 31), on account of lower demand. The company continued to
remain in losses at the net level. The reported net loss stood at
INR2.91 crore in FY16 as compared with INR5.21 crore of Net Loss
in FY15. Despite the infusion of an additional equity capital of
INR1.49 crore in FY16 the losses incurred during the year led to
erosion of the networth.
Furthermore, additional working capital term loans and vehicle
loans were also availed during the year which led to weak capital
structure with long-term debt to equity ratio and overall gearing
ratio of 1.93x and 3.35x, respectively, as on March 31, 2016, as
compared with 1.93x and 3.29x, respectively, as on March 31,
2015. The debt coverage indicators also remained weak with total
debt to GCA of 31.18x, as on March 31, 2016, and interest
coverage ratio of 1.34x, in FY16.
The operating cycle of SSYL remained elongated at ~163 days as on
March 31, 2016, as compared with ~170 days as on March 31, 2015.
The operations of the company therefore remain highly working
capital intensive in nature with ongoing overdrawals in the cash
credit limits for more than 30 days.
Shiva Speciality Yarns Limited, formerly known as Punjab Cotspin
Limited, was incorporated in 2005. The company was promoted by
the Singla family of Ludhiana and was engaged in the
manufacturing of cotton yarn at its production facilities in
Bhatinda, Punjab. It was subsequently acquired by the 'Shiva'
Group in November 2007. The product profile was changed to
include synthetic yarns like dyed polyester spun yarn, blended
spun yarn and knitted cloth. It also engages in trading of
polyester fibers. Other group entities of the company include
Yogindera Worsted Limited (rated, 'CARE D'), K.K. Fibres Limited,
Himachal Fibres Limited (rated, 'CARE C+/ CARE A4'), Indian Yarns
Limited (rated, 'CARE D'), Shiva Texfabs Limited (rated, 'CARE
D'), Shiva Spin N Knit Limited, etc.
During FY16, SSYL has reported a net loss of INR2.91 crore on a
total operating income of INR127.41 crore as against a net loss
of INR5.21 crore on a total operating income of INR130.83 crore
in FY15.
Status of non-cooperation with previous CRA: SMERA has suspended
SSYL's ratings vide its press release dated July 14, 2015 on
account of its inability to undertake the surveillance of ratings
in absence of adequate information.
SHIVA WHEELS: CARE Reaffirms B+ Rating on INR8.89cr LT Bank Loan
----------------------------------------------------------------
The rating assigned to the bank facilities of Shiva Wheels
Private Limited (SWPL) continues to be constrained by its small
scale of operation, risk of non-renewal of dealership agreement,
pricing constraints and margin pressure arising out of
competition from other auto dealers, working capital intensive
nature of operation, thin profitability margins, leveraged
capital structure and moderate debt protection metrics. These
constraints are partially offset by its experienced promoters
with long track record of operation, authorized dealership of
Honda Motorcycle and Scooter India Pvt. Ltd (HMSI) and integrated
nature of business.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 8.89 CARE B+; Stable
Reaffirmed
The ability of the firm to increase its scale of operation,
improve profitability margins and ability to manage its working
capital effectively would be the key rating sensitivities.
Detailed description of the key rating drivers
The scale of operations of SWPL has remained small marked by
total operating income of INR29.31 crore with a PAT of INR0.12
crore in FY16. The company has a low net worth base of INR1.86
crore as on March 31, 2016. The small size restricts the
financial flexibility of the firm in times of stress and deprives
it from the benefits of economies of scale.
SWPL has entered into a dealership agreement with HMSI in
Feb.2010. The dealership agreement with HMSI has been renewed
every year and the same is valid till December, 2017 subject to
renewal of the agreement afterwards at the discretion of HMSI.
Furthermore, the agreements may get terminated at any time on
violation of certain clauses. However, the risk is mitigated to
some extent in view of its long association with HMSI.
SWPL faces aggressive competition on account of established
presence of authorized dealers of other passenger vehicle
manufacturers. Considering the existing competition, SWPL is
required to offer better terms like providing discounts on
purchases to attract new customers. This creates margin pressure
and may negatively impact the revenue earning capacity of the
company.
Automobile dealership business has inherent high working capital
intensity due to high inventory holding requirements.
The company has to maintain fixed level of inventory for display
to guard against supply shortages. On the other hand, the
principles or the dealers demand payment in advance and deliver
the vehicle only after receipt of full payment or against the
release order from financial institution (funding the vehicle)
which takes around 15-20 days. Thus, the business depends heavily
on working capital borrowings and inventory funding channels. The
average utilization of its bank limit was high during the last 12
month ended on November 2016.
Profit margin of the company remained thin and range bound over
the past years due to inherent low margin nature of dealership
business. Capital structure of the company remained leveraged
marked by high overall gearing ratio as on March 31, 2016. The
debt service coverage indicators remained depressed over the
years marked by its high total debt to GCA ratio in FY16 owing to
lower cash accruals and higher dependence on external borrowings.
Interest coverage ratio remained above unity in FY16.
SWPL has been in operation since 1988. The company is managed by
Mr. Sanjib Paul having two decades of experience in auto
dealership business along with the other three directors. All the
directors are actively involved in the business of the company.
SWPL is an authorised dealer of HMSI and has started its
association with the same since 2010. SWPL gets competitive
advantage of being one of the two dealers of HMSI for Kolkata.
This apart, as the company also sales multi brand 2W, it
enjoys revenue diversity. Honda is one of market leaders in the
2W segment for decades and has a wide & established distribution
network of sales and service centres across India, providing it a
competitive advantage over its peers.
SWPL operates through its workshop to provide after sales service
and deals in original accessories & spare parts apart from
selling 2W by virtue of being a '3-S' (Sales, Services and Spare
parts) authorized dealer of HMSI. Owning authorized service
centre helps the company to tap a larger client base who prefers
to purchase 2W from dealers having own authorized service
centres.
SWPL was established as a partnership firm, namely, Shiva Auto in
1988. Since inception, the firm has been in two wheelers selling
business. Later, in the year 2003, the firm was converted into a
company and rechristened as SWPL. The day-to-day affairs of the
company are looked after by Mr. Sanjib Paul, Director, with
adequate support from other three directors and a team of
experienced personnel.
During FY16 (refers to the period April 1 to March 31), the firm
reported a total operating income of INR29.31 crore (FY15:
INR17.85 crore) and a PAT of INR0.12 crore (in FY15: INR(0.08)
crore). Furthermore, the company has achieved a total operating
income of INR18.79 crore during H1FY17 (refers to the period
April 1 to September 30).
SREE DHANNVIJAY: CRISIL Assigns B+ Rating to INR10MM Cash Loan
--------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable rating to the bank
facilities of Sree Dhannvijay Texmills Private Limited (SDTPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 10 CRISIL B+/Stable
Proposed Cash
Credit Limit 0.54 CRISIL B+/Stable
The ratings reflect SDTPL's modest scale of operations and
exposure to intense competition in the textile industry and
vulnerability of its operating margins to fluctuation in raw
material prices. The ratings also reflect SDTPL's modest
financial risk profile on account of below average debt
protection metrics. These weaknesses are partially offset by the
extensive experience of SDTPL's promoters in the textile
industry.
Key Rating Drivers & Detailed Description
Weaknesses
* Modest scale of operations and exposure to intense competition:
Revenue of around INR38.5 crore, reflects the modest scale of
operations. Furthermore, as the spinning mills are located at
Coimbatore, which is a major cotton textile belt, there is
intense competition from several cotton yarn manufacturers
operating in the vicinity.
* Vulnerability to volatile raw material prices: Cotton is the
major raw material, accounting for around 65% of the production
cost. Hence, the operating margin of cotton yarn manufacturers
like SDTPL, remains susceptible to changes in cotton prices. The
price of cotton was highly volatile, in the past and may continue
to fluctuate, thus exposing the group to price risk. This is
because, prices are influenced not only by the demand-supply
related factors, but are also dependent on factors such as
monsoons, international demand and government policies.
* Modest Financial Risk Profile: SDTPL's financial risk profile
is modest on account of below average debt protection metrics.
The interest coverage and net cash accruals to total debt (NCATD)
ratio is expected to be at around 1.3 to 1.4 times and 6 to 8
percent respectively over the medium term. The gearing is
expected to be moderate in the range of around 1.4 to 1.5 times
over the medium term.
Strength
* Extensive experience of the promoters: The promoters, Mr. Vijay
Shankar and his wife, Mrs. Dhanalakshmi come from an
entrepreneurial family, and have an experience of over 2 decades
in the textile industry. Over this period, developed close
relationships with suppliers and customers, over the years.
Outlook: Stable
CRISIL believes SDTPL will continue to benefit from the extensive
experience of its promoters. The outlook may be revised to
'Positive' if the company reports a significant improvement in
the scale of operations, and maintains its capital structure. The
outlook may be revised to 'Negative' if a decline in the scale of
operations or profitability, or a major debt-funded capital
expenditure, weakens the financial risk profile.
SDTPL was established in 2004 by Mr. Vijay Shankar and his wife,
Mrs Dhanalakshmi. The Coimbatore-based company manufactures
cotton and polyester yarn.
SDTPL reported profit after tax (PAT) of around Rs.0.36 crore on
an operating income of Rs.37.51 crore in fiscal 2016 against PAT
of around Rs.0.35 crore on operating income of Rs.36.32 crore in
fiscal 2015.
SRI SENDRAYAPERUMAL: CARE Reaffirms B+ Rating on INR5.5cr Loan
--------------------------------------------------------------
CARE in its analysis has considered the consolidated business and
financial risk profiles of Sri Sendrayaperumal Transports (SST)
and its group entity; SSPT Logistics, together referred to as
SSPT group, as the entities are linked through group concern
relationship and collectively have management, business &
financial linkages.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 5.5 CARE B+; Stable
Reaffirmed
The rating assigned to the bank facilities of SST continues to be
constrained by the modest scale of operations, highly leveraged
capital structure, fluctuating diesel and unregulated toll
charges. The rating is further constrained on account of working
capital intensive nature of operation and presence in highly
fragmented logistics industry. The rating also takes into account
increase in total operating income albeit decline in profit
margins in FY16 (refers to period April 01 to March 31).
The rating, however, continues to derive strength from experience
of the partners in logistics industry, favourable industry
outlook with implementation of GST and established relationship
with reputed customer base.
Going forward, the firm's ability to improve its scale of
operations, sustain its operating profits and improve its
capital structure along with efficient management of working
capital requirements remains the key rating sensitivities.
Detailed description of the key rating drivers
SST and SSL combined have modest scale of operations with total
operating income of INR73.67 crore in FY16.
They have highly leveraged capital structure with overall gearing
at 18.0x and debt equity ratio at 13.48x as on March 31, 2016.
The PAT margins of the firm substantially declined by 190 bps
from 2.29% in FY15 to 0.58% in FY16 due to increase in
depreciation charges coupled with increase in finance cost. The
operating cycle of the firm increased from 42 days in FY15 to 64
days in FY16 due to increase in average collection period. The
firm has its presence in highly fragmented logistics industry.
The Indian logistic industry has been gaining traction, with e-
commerce penetration, economy revival, proposed GST
implementation and government initiatives like "Make in India",
National Integrated Logistic Policy, 100% FDI in warehouses and
food storage facilities, etc.
SST was incorporated in September 2011 with an objective to carry
out Full Truck Load (FTL) services as a partnership firm by Mr.
P. Maruthavel and his brother Mr. P. Jayavel with their family
members. SST currently owns 97 trucks being operated in the state
of Tamil Nadu, Kerala, Haryana, Punjab, Delhi, Uttar Pradesh,
Rajasthan, Jammu and Kashmir catering to industries such as
paper, textile (fabrics & yarn), steel, cashew, spices, household
items, automobile items and any other parcel services. SST also
operates trucks on contract basis to companies with a time period
of 3-12 months which are normally renewed after the contract
period.
In FY16, SST and SSL combined reported a Profit after Tax (PAT)
of INR0.43 crore on a total operating income of INR73.67 crore,
as against PAT and TOI of INR1.61 crore and INR 64.77 crore,
respectively, in FY15.
SRI SITARAMANJANEYA: CRISIL Assigns B+ Rating to INR6MM Loan
------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-
term bank facilities of Sri Sitaramanjaneya Sortex (SSRS).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Cash
Credit Limit 4 CRISIL B+/Stable
Cash Credit 2 CRISIL B+/Stable
Export Packing
Credit 6 CRISIL B+/Stable
The ratings reflect the firm's moderate scale of operations and
average financial risk profile marked by high gearing. These
rating weaknesses are partially offset by extensive experience of
promoters in the agro-commodity trading industry and the abundant
supply and stable demand for rice.
Key Rating Drivers & Detailed Description
Weaknesses
* Moderate scale and profitability of operations: The company's
scale of operations has remained modest at around Rs.53Cr. in
FY2015-16. The agro commodity trading business is highly
fragmented business, with numerous small scale of unorganised
players catering to local demands. The fragmented nature of
business and modest scale of operations limits SSRS's ability to
bargain with the suppliers and customers, leading to pressure on
operating margins. The company's operating margins has remained
low at around 2.2 percent in fiscal 2016.
* Average Financial Risk profile: SSRS has an average financial
risk profile marked by modest worth of Rs. 2.6 crores as on March
31, 2016. SSRS's capital structure is marked by high gearing of
4.13 times as on March 31, 2016 on account of dependence on
external borrowings to meet its working capital requirements.
Debt protection metrics are average marked by interest coverage
ratio of 2.2 times and NCATD of 5 per cent during 2015-16. The
debt protection metrics of the company are expected to remain
average over the medium term.
Strengths
* Extensive experience of the promoters in the agro commodity
industry: The partners of SSRS have been engaged in the agro
commodity trading business since 1985, and the promoters' family
is engaged in the same business since 1980. The promoters have
also promoted Sarala Foods Private Limited (rated CRISIL
BB/Stable/CRISIL A4+), as a private limited company for trading
in diversified product base which includes various agro
commodities like rice, cashew nuts, maize and mung beans. The
experience of the promoters have helped the company to maintain
its relations with the suppliers and the customers
* Abundant availability of raw material and stable demand for
rice:
India is the second largest producer and consumer of rice in the
world, after China. SSRS' proximity to the paddy cultivating
region of Andhra Pradesh ensures easy availability of raw
material. The firm benefits from the stable demand for rice, as
it is directly linked to population.
Outlook: Stable
CRISIL believes SSRS will continue to benefit from the extensive
industry experience of its promoters. The outlook may be revised
to 'Positive' in case of an increase in scale of operations and
operating profitability, leading to a better financial risk
profile. The outlook may be revised to 'Negative' if the
financial risk profile deteriorates on account of lower-than-
expected revenue and profitability, or more-than-expected
increase in working capital requirement.
SSRS was established in 2005 by Mr. Vinod Kumar Agarwal and his
wife, Mrs Usha Agarwal. The company, based in Kakinada, Andhra
Pradesh, trades in agro food commodities such as raw, par boiled,
and broken rice. The partners have also established Sarala Foods
Pvt Ltd. (SFPL) in 2005 which is engaged in the trading of agro
food commodities like raw rice, par boiled and broken rice,
cashew nus and mung beans.
SSRS booked net profit of Rs. 46.11 lakhs on revenues of INR52.9
crs for fiscal 2016 against net profit of Rs.8.18 lakhs on
revenues of INR6.5 crs for fiscal 2015.
SSPT LOGISTICS: CARE Reaffirms B+ Rating on INR6cr Long Term Loan
-----------------------------------------------------------------
CARE in its analysis has considered the consolidated business and
financial risk profiles of SSPT Logistics and its group entity;
Sri Sendrayaperumal Transports (SST), together referred to as
SSPT group, as the entities are linked through group concern
relationship and collectively have management, business &
financial linkages.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 6 CARE B+; Stable
Reaffirmed
The rating assigned to the bank facilities of SST continues to be
constrained by the modest scale of operations, highly leveraged
capital structure, fluctuating diesel and unregulated toll
charges. The rating is further constrained on account of working
capital intensive nature of operation and presence in highly
fragmented logistics industry. The rating also takes into account
increase in total operating income albeit decline in profit
margins in FY16 (refers to the period April 01 to March 31).
The rating, however, continues to derive strength from experience
of the partners in logistics industry, favourable industry
outlook with implementation of GST and established relationship
with reputed customer base.
Going forward, the firm's ability to improve its scale of
operations, sustain its operating profits and improve its
capital structure along with efficient management of working
capital requirements remains the key rating sensitivities.
Detailed description of the key rating drivers
SSL and SST combined have modest scale of operations with total
operating income of INR73.67 crore in FY16. They have highly
leveraged capital structure with overall gearing at 18.0x and
debt equity ratio at 13.48x as on March 31, 2016. The PAT margins
of the firm substantially declined by 190bps from 2.29% in FY15
to 0.58% in FY16 due to increase in depreciation charges coupled
with increase in finance cost. The operating cycle of the firm
increased from 42 days in FY15 to 64 days in FY16 due to increase
in average collection period. The firm has its presence in highly
fragmented logistics industry. The Indian logistic industry has
been gaining traction, with e-commerce penetration, economy
revival, proposed GST implementation and government initiatives
like "Make in India", National Integrated Logistic Policy, 100%
FDI in warehouses and food storage facilities, etc.
SSL was incorporated in January 2013 as a partnership firm by Mr.
P. Maruthavel and his brother Mr. P. Jayavel with their family
members. The firm is engaged in logistics services, i.e speed
parcel and cargo services. SSL currently owns 113 trucks being
operated in the state of Tamil Nadu, Kerala, Haryana, Punjab,
Delhi, Uttar Pradesh, Rajasthan, Jammu and Kashmir catering to
industries such as paper, textile (fabrics & yarn), steel,
cashew, spices, household items, automobile items and any other
parcel services. SSL also operates trucks on contract basis to
companies with a time period of 3-12 months which are normally
renewed after the contract period.
In FY16, SSL and SST combined reported a Profit after Tax (PAT)
of INR0.43 crore on a total operating income of INR73.67 crore,
as against PAT and TOI of INR1.61 crore and INR64.77 crore,
respectively, in FY15.
TAMILNADU STATE: CARE Reaffirms 'B' Rating on INR15cr LT Loan
-------------------------------------------------------------
The rating assigned to the bank facilities of Tamilnadu State
Transport Corporation (Coimbatore) Limited (TNSTC-CBE) continues
to be constrained by the delays in debt servicing of term loans
(not rated by CARE) from the Government of Tamil Nadu (GoTN) and
continued losses incurred by the Corporation during FY16 (refers
to the period April 1 to March 31) resulting in erosion of
Networth.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 15 CARE B; Stable
Reaffirmed
The rating is also constrained by the company's high dependence
on debt funding and weak liquidity profile of the company with
high working capital utilisation. The rating, however, favourably
takes into account the established track record of operations and
funding support received from GoTN, being the state's public
transport undertaking in the Coimbatore region.
Going forward, the continual support from GoTN for day-to-day
operations and the ability of the company to manage working
capital efficiently would be the key rating sensitivities
Detailed description of the key rating drivers TNSTC-CBE began
its operation in March 1972 with 6 branches, operating 109 buses
taken from the private sector under CTC in Coimbatore, Nilgiri,
and Erode districts of Tamil Nadu. As on March 31, 2015, TNSTC-
CBE operates with 3,295 buses and 44 branches in 1,710 routes,
carrying around 25 lakh passengers per day.
TNSTC-CBE continues to default in repayment of term loan availed
from GoTN and as on March 31, 2016, the cumulative overdue stood
at INR343.3 crore of principal repayments and INR180.77 crore of
interest payments.
The Total Operating Income (TOI) during FY16 remained stable at
INR1,206 crore as against INR1,213 crore in FY15. On account of
higher operating expenses and employee costs, TNSTC-CBE reported
operating loss (PBILDT) of INR283 crore during FY16 as against
operating loss of INR259 crore in FY15. The Net worth stood
negative at INR2,099 crore as on March 31, 2016 as against
INR1,872 crore as on March 31, 2015.
TNSTC-CBE continues to depend on funding support from GoTN due to
cash losses. The Ways and Means advances (WMA) from Government
and Term loan from TDFC has increased from INR167 crore and
INR229.5 crore, respectively, as on March 31, 2015, to INR224.3
crore and INR388.4 crore, respectively, as on March 31, 2016. The
Corporation had also availed working capital limits of INR60
crore and the average utilisation for the past 12 months ended
May 2016 stood at 82.3%.
TNSTC-CBE, a Government of Tamil Nadu Undertaking, began its
operation of public transportation in 1972 under the name of
Cheran Transport Corporation Limited (CTC) in Coimbatore, Tamil
Nadu. As on March 31, 2015, TNSTC-CBE had a fleet of 3,295 buses
with 44 branches operating in Coimbatore, Tiruppur,
Udhagamandalam and Erode districts of Tamil Nadu. It also
operates long distance services to Chennai, Bangalore, Mysore,
Pondicherry, Thiruchendur, Marthandam, Sengottai, Guruvayoor,
Hassan, etc. The Corporation is operating 12.6 lakh km per day
carrying around 25 lakh passengers every day. TNSTC-CBE has its
own body building units and production facilities for paints and
Tyre flaps.
During FY16, the Corporation reported after tax loss of INR402
crore on total operating income of INR1,206 crore as against
after tax loss of INR431 crore and operating income of INR1,213
crore in FY15.
TROIX CHEMICALS: CARE Assigns 'B' Rating to INR8.5cr LT Loan
------------------------------------------------------------
The ratings assigned to the bank facilities of Troix Chemicals
Private Limited (TCPL) are constrained by its modest and
fluctuating scale of operations coupled with low profitability,
its leveraged capital structure and weak debt coverage
indicators. The ratings are further constrained by its working
capital intensive nature of operations and presence in the highly
competitive and fragmented industry.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 8.50 CARE B; Stable
Assigned
Short-term Bank Facilities 1.00 CARE A4 Assigned
The above weaknesses are partially offset by company's
experienced promoters having demonstrated financial support for
the operations of the company.
The ability of the company to scale up its operations amidst
intense competition along with efficiently managing its working
capital requirement is the key rating sensitivities.
Detailed description of the key rating drivers
TCPL is engaged into distribution (for APL) of chemicals
(primarily intermediaries used in PVC, paints, thinners and
varnish industries) and focuses in the Maharashtra region with
demand being influenced by price competition. Its TOI has been
fluctuating in the past three years due to varying demand for APL
products and stood at INR66.13 crore in FY16 (refers to the
period April 01 to March 31). Despite having an established
clientele, its fortunes are linked with APL's demand scenario
leading to fluctuation in scale of operations.
The capital structure of TCPL has been leveraged in the past
three years ending March 31, 2016, on account of high reliance on
working capital bank borrowings and low net-worth base. The
operations are moderately working capital intensive in nature as
it offers high credit period to its customers of around 8 weeks
leading to moderately high Gross Current Assets days.
Furthermore, due to the intensely competitive scenario
experienced in the chemical industry and availability of various
substitutes for APL's products, aggressive price competition
restricts TCPL's profitability.
Established in the year 1984, TCPL is a private limited company
engaged into trading and distribution of chemicals (Ethyl
Hexanol, Iso-Butanol and n-Butanol) which find application
primarily in the coatings (viz, paints, thinners and varnish),
plastic and pharmaceutical industry. It is an authorised
distributor of Andhra Petrochemicals Limited (APL) for
Maharashtra region and operates out of its office in Mumbai.
During FY16, TCPL reported a total operating income of INR66.13
crore (vis-a-vis INR54.68 crore in FY15) along with net profit of
INR0.06 crore (vis-a-vis INR0.05 crore during FY15). Furthermore,
during H1FY17 (refers to April 01 to September 30), it achieved a
turnover of INR22.35 crore.
UMAK EDUCATIONAL: CARE Reaffirms 'D' Rating on INR66.37cr LT Loan
-----------------------------------------------------------------
The rating assigned to Umak Educational Trust (UET) takes into
account ongoing delays in servicing of the interest due to
stressed liquidity position.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 66.37 CARE D Reaffirmed
Detailed description of the key rating drivers
Umak Educational Trust operates a college under the name of
Vedatya Institute (VEI) in Gurgaon, Haryana. In FY15 (refers
to the period April 1 to March 31), the trust undertook CAPEX
which included construction of new 16-acre college building at
Sohna road, Gurgaon, for providing courses. The liquidity profile
of the trust deteriorated on account of delay in commencement of
operations of the new campus leading to liquidity stress in the
trust.
Umak Educational Trust (UET) was established in 2006 with an
objective to provide education services. The trust operates
a college under the name of Vedatya Institute (VEI) in Gurgaon,
Haryana, offering varied courses. Dr Ramesh Kapur is the chairman
of the trust and has more than three decades of experience
through his association with UET as well as with other group
companies. Furthermore, he is assisted by others members of the
trust and other qualified professional in the relevant experience
to carry out the day-to-day operations the Kapur family is also
the promoters of AB Hotels Limited which manages the overall
operations of the Radisson Hotel, Mahipalpur (Delhi) and Bhadoi
Hotels Limited manages the Radisson Hotel at Varanasi (Uttar
Pradesh).
During FY15 (refers to the period April 01 to March 31), UET has
achieved a total operating income (TOI) of INR9.59 crore with
SBID (Surplus before interest and depreciation) and Deficit of
INR3.10 crore and INR3.76 crore, respectively, as against TOI of
INR12.21 crore with SBID and Surplus of INR0.53 crore and INR0.06
crore, respectively, in FY14.
VIJAYANAG POLYMERS: CARE Assigns 'B' Rating to INR7.3cr LT Loan
---------------------------------------------------------------
The rating assigned to the bank facilities of Vijayanag Polymers
Private Limited (VPPL) is constrained by the small scale and
short track record of operations, leveraged capital structure and
weak debt protection on account of cash losses incurred during
the review period, susceptibility of profit margins to
fluctuation in raw material prices and working capital intensive
nature of operation with the highly competitive industry.
However, the rating is underpinned by the moderate experience of
the promoters in the packaging industry, growth in total
operating income during the review period and stable demand
outlook for the packaging industry.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 7.30 CARE B; Stable
Assigned
Going forward, the ability of the company to increase the scale
of operations, turnaround from loss to profit and improve capital
structure and debt service indicators.
Detailed description of the key rating drivers
VPPL's has only completed around three years of operations and
has short track record of operations. Furthermore, its scale of
operations remained small as compared to other industry peers
marked by total operating income of INR11.54 crore during FY16
(refers to the period April 01 to March 31) and negative net
worth on account of net losses incurred during the review period.
However, the company has substantial order book in hand to offset
the risk of discontinued operations due to non-availability of
the business.
The primary raw material required by VPPL is LDPE, polymers,
polyester etc, which constituted around 80% of total raw
material purchases. The price of LDPE, polymers, polyester is
linked to crude oil prices which are volatile in nature thus
might affect the raw material prices.
VPPL is engaged into manufacturing of packaging material mainly
for FMCG and agriculture, where the company has to purchase raw
material like polymers, film role, chemical and others based on
client's requirement. However, the operating cycle of the company
is comfortable at 49 days in FY16, and improved year-on-year from
203 days in FY14 on account of improved in collection and
inventory days.
The company was incorporated in 2011 and currently promoted by Dr
V V Nagi Reddy and his wife Mrs M Vijaya Lakshmi.
Dr V V Nagi Reddy is a retired Physics professor and has an
experience of around four years in the packaging industry.
Vijayanag Polymers Private Limited (VPPL) was incorporated in the
July 2011 and commenced commercial operation from October 2012.
VPPL is promoted by Dr V V Nagi Reddy and his wife Mrs M Vijaya
Lakshmi. VPPL is engaged in production of plain and printed
packaging laminated materials like Laminated films, Pouches, Poly
bags and others, which are used across a wide range of industries
like consumer food, fertilizers and others. VPPL is having total
installed capacity of 200 tonne per month at the manufacturing
facility in Bapulapadu, near Vijayawada (Andhra Pradesh).
During FY16, the company reported PBILDT of INR0.56 crore (FY15 -
INR0.39 crore) and net loss of INR1.20 crore (FY15 - net loss of
INR1.67 crore) on a total operating income of INR11.54 crore
(FY15 - INR6.53 crore).
VIRAJ ENTERPRISES: CARE Assigns B+ Rating to INR5.5cr LT Loan
-------------------------------------------------------------
The ratings assigned to Viraj Enterprises (VJE) are primarily
constrained by the small scale of operations, highly leveraged
capital structure and weak debt service coverage indicators. The
ratings are further constrained by elongated operating cycle and
constitution of the entity being a proprietorship firm and highly
fragmented & competitive nature of the industry.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 5.50 CARE B+; Stable
Assigned
Short-term Bank Facilities 1.50 CARE A4 Assigned
The ratings, however, draws comfort from experienced proprietor
and growing scale of operations of VJE.
Going forward, the ability of the company to increase its scale
of operations while improving its profitability margins and
capital structure shall be the key rating sensitivities.
Detailed description of the key rating drivers
VJE's total operating income grew in the last 2 financial years
(from INR14.96 crore in FY15 to INR29.21 crore in FY16)
reflecting an annual growth rate of around 95.25%. The growth in
TOI was mainly on account of higher quantity sold through its
online channel partners. The profitability margins of the company
though declined in FY16 over the previous year continue to remain
moderate as reflected from PAT margin that remained above unity.
The capital structure of the firm remained highly leveraged due
to high dependence on bank borrowing to meet the working capital
requirements coupled with low networth base. The high dependence
on bank borrowing also led to weak debt service coverage
indicators of the firm. Being a trader, the firm to require to
maintain wide range of size, colour and designs etc resulting in
high operating cycle which also lead to high working capital
intensity of business operations.
Proprietor of the firm looks after overall operations of the firm
and has an experience of around half a decade in trading industry
through his association with this entity and prior to which he
was
working in relative's manufacturing business.
Delhi-based, Viraj Enterprises (VJE) is a proprietorship concern
established in 2011 as a proprietorship firm and started its
commercial operations in year 2014 and is currently being managed
by Mr. Kaushal Jajodia. The firm is engaged in the trading of
footwear viz. leather shoes, sandals, slippers, loafers, sports
shoes etc. for men & women. The company procures the traded
footwear of the brand Relaxo Footwear Limited, Lee Cooper and
Samsonite International etc. The firm supplies the product
to online portals like Snapdeal, Amazon and Flipkart etc.
The total operating income of the company stood at INR29.21 crore
in FY16 (refers to the period April 1 to March 31).
WEST INN: CARE Reaffirms B+ Rating on INR25cr Long Term Bank Loan
-----------------------------------------------------------------
The rating of West Inn Limited (WIL) continues to remain
constrained on account of its modest scale of operations,
operating losses reported during FY16 (refers to the period
April 1 to March 31) owing to high fixed overheads and change
in product mix, erosion in its net worth owing to net losses
which resulted in high leverage. The rating also factors in WIL's
dependence on one hotel and presence in a cyclical and highly
competitive hospitality industry.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 25.00 CARE B+; Stable
Reaffirmed
The rating, however, favourably takes into account WIL's
established track record and vast experience of the promoters in
the hospitality industry. The rating further takes into account
the strategic location of the hotel and its agreement with
Fortune Park Hotel Limited (FPHL) for management of hotel
operations.
WIL's ability to increase its scale of operations by increasing
the average occupancy ratio while maintaining the average
room rates along with efficiently managing its costs to improve
its profitability margins would be the key rating sensitivities.
Detailed description of the key rating drivers
WIL reported operational losses owing to high fixed costs coupled
with change in sales mix with increase in revenue from food &
beverages leading to higher cost of materials during the period.
Furthermore, tangible net worth eroded owing to net losses
reported during FY16 which resulted in deterioration in overall
gearing.
Promoters have over two decades of experience in the hotel
industry and have been supporting the operations through need-
based infusion of unsecured loans. The hotel operates under the
brand name of "Fortune Landmark" and is located in central
Ahmedabad, thereby benefiting from consistent occupancy levels.
WIL was incorporated in 1993, to operate in the hospitality
business by Galani and Khurana families. WIL owns a five star
business class hotel at Ahmedabad with around 95 rooms which is
operated by Fortune Park Hotels Limited (FPHL) under "Fortune
Landmark" brand. WIL is currently managed by Mr. Vikram Khurana
who has over two decades of experience in various businesses. In
January 2016, WIL received demerger order from the Honorable High
Court of Gujarat wherein one of the hotels 'Radisson Blu',
previously owned by WIL, is transferred to Rising Hotels Limited
promoted by Galani Group.
The demerger was undertaken for the purpose of separating the
business interests of Khurana and Galani families wherein,
Fortune Landmark shall be now managed and owned by Khurana family
and Radisson Blu by Galani family.
As per the audited results for FY16, WIL reported a total
operating income of INR13.41 crore (FY15: INR14.03 crore) and net
loss of INR5.12 crore (FY15: loss of INR6.00 crore).
YOGINDERA WORSTED: CARE Lowers Rating on INR66.18cr LT Loan to D
----------------------------------------------------------------
The revision in the ratings assigned to the bank facilities of
Yogindera Worsted Limited (YWL) takes into account the ongoing
delays in debt servicing due to the stressed liquidity position
of the company.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 66.18 CARE D Revised from
CARE C+
Short-term Bank Facilities 9.25 CARE D Revised from
CARE A4
Detailed description of the key rating drivers
On account of the stressed liquidity position, there are ongoing
delays in the servicing of the interest and principle repayments
of the term loans. Furthermore, there are ongoing overdrawals in
the cash credit limits as-well-as devolvement of letters of
credit, which have not been settled for a period exceeding 30
days.
The total operating income of the company declined by about 46%
to INR82.66 crore in FY16, on account of lower demand. The
company continued to remain in losses at the net level. The
reported net loss increased from INR0.82 crore in FY15 to INR2.02
crore in FY16. Despite the infusion of an additional equity
capital of INR1.53 crore in FY16 the losses incurred during the
year led to erosion of the networth. Furthermore, additional
working capital term loans and vehicle loans were also availed
during the year which led to weak capital structure with long-
term debt to equity ratio and overall gearing ratio of 1.28x and
2.12x respectively as on March 31, 2016 as compared to 1.29x and
2.05x respectively as on March 31, 2015. The debt coverage
indicators also remained weak with total debt to GCA of 29.07x,
as on March 31, 2016 and interest coverage ratio of 1.33x, in
FY16.
The operations of the company remain highly working capital
intensive in nature with an elongated operating cycle of about
390 days as on March 31, 2016 which further elongated from around
179 days as on March 31, 2015, on account of higher inventory
days. The operations of the company therefore remained highly
working capital intensive in nature with ongoing overdrawals in
the cash credit limits.
Incorporated in 1997, Yogindera Worsted Limited (YWL) was
promoted by Mr. Ajay Kumar Gupta and his family members in
collaboration with Punjab State Industrial Development
Corporation Limited (PSIDCL). It was subsequently acquired by the
'Shiva' group in 2007. The product profile of YWL was also
changed from pre-dyed worsted/acrowool yarn to include other
varieties of yarns like dyed/white worsted woolen yarn, acro-
woolen yarn, acrylic yarn, polyester yarn, fancy yarn, hand
knitting yarn, melange yarns, space dyed/printed yarns, knitted
cloth etc. The company operates from its manufacturing facility
in Bathinda, Punjab at an installed capacity of 11,464 meteric
tonnes per annum as on March 31, 2015. The company also engages
in exports of its products to countries in the Middle East, South
Africa etc. Export sales constituted around 18% of the total
operating income in FY16. Other group entities include Shiva
Speciality Yarns Limited (rated, 'CARE D'), K.K. Fibres Limited,
Himachal Fibres Limited (rated, 'CARE C+/ CARE A4'), Indian Yarns
Limited (rated, 'CARE D'), Shiva Texfabs Limited (rated, 'CARE
D'), Shiva Spin N Knit Limited etc.
During FY16 (refers to the period April 1 to March 31), YWL has
reported a net loss of INR2.02 crore on a total operating
income of INR82.66 crore as against a net loss of INR0.82 crore
on a total operating income of INR153.06 crore in FY15.
Status of non-cooperation with previous CRA: SMERA has suspended
YWL's ratings vide its press release dated July 14, 2015 on
account of its inability to undertake the surveillance of ratings
in absence of adequate information.
=========
J A P A N
=========
TAKATA CORP: Share Surges After Denying Bankruptcy Plan
-------------------------------------------------------
Ma Jie and Masatsugu Horie at Bloomberg News report that Takata
Corp. surged in Tokyo trading after the air-bag maker reiterated
it wants to avoid a court-led bankruptcy that could disrupt the
supply of parts needed to complete the biggest safety recall in
automotive history.
Bloomberg says the Tokyo-based manufacturer, whose faulty
products are linked to at least 17 deaths worldwide and the
subject of recalls that may exceed 100 million units, climbed as
much 18 percent and traded at JPY519 as of 10:01 a.m. on Jan. 25.
According to Bloomberg, the company said reports that assume it
was moving toward a court-led rehabilitation were "regrettable"
and causing confusion. The company is deciding on a direction
that takes into account all stakeholders and discussions are
ongoing, it said in a statement on Jan. 24, Bloomberg relates.
"We are prioritizing the stable supply of parts in determining
our restructuring," the report quotes Takata as saying in the
statement. "It'll be difficult to maintain the supply chain with
a court-led bankruptcy procedure and may result in us being
unable to fulfill our responsibility to supply parts. As a
result, it may cause trouble to a wide range of stakeholders."
Bloomberg says Chief Financial Officer Yoichiro Nomura made
similar comments in November that a court-led restructuring could
disrupt the supply of parts to automakers. Takata's comments on
on Jan. 24 come after its shares and bonds have plunged since
reports that bidders for the air-bag maker are leaning toward
bankruptcy for the company to shield them from liabilities,
Bloomberg relates.
About Takata Corp
Japan-based Takata Corporation (TYO:7312) --
http://www.takata.com/en/-- develops, manufactures and sells
safety products for automobiles. The Company offers seatbelts,
airbags, steering wheels, child seats and trim parts. The
Company has subsidiaries located in Japan, the United States,
Brazil, Germany, Thailand, Philippines, Romania, Singapore,
Korea, China and other countries.
In May 1995, a voluntary recall in the U.S. affecting 8 million
predominantly Japanese built vehicles made from 1986 to 1991 with
seat belts manufactured by the Takata was conducted.
Large recalls of vehicles due to faulty Takata-made airbags began
in 2013.
Takata is presently facing massive costs of recalling 100 million
defective airbag inflators worldwide and lawsuits tied to at
least 16 deaths and numerous injuries.
As of May 19, 2015, Takata has already recalled 40 million
vehicles across 12 vehicle brands for defective airbags.
In November 2015, Takata was fined $200 million by U.S. federal
regulators for mishandling the way it recalled its air bag
inflators. The fine is the largest civil penalty in NHTSA
history.
TOSHIBA CORP: S&P Lowers CCR to CCC+ & Remains on Watch Negative
----------------------------------------------------------------
S&P Global Ratings said it has lowered its long-term corporate
credit rating on Japan-based diversified electronics company
Toshiba Corp. to 'CCC+' and its short-term corporate credit and
commercial paper program ratings on the company to 'C', all by
one notch. All of these ratings remain on CreditWatch with
negative implications. S&P also lowered its senior unsecured
debt rating on Toshiba two notches to 'B-' from 'B+' and kept the
rating on CreditWatch negative. On Dec. 28, 2016, S&P placed the
long- and short-term ratings on Toshiba on CreditWatch with
negative implications at the same time as lowering the long-term
ratings, in response to Toshiba's announcement that it might
recognize several JPY100 billion in impairment losses related to
goodwill arising from its acquisition of a nuclear power business
through U.S.-based Westinghouse Electric Co. LLC, because the
goodwill far exceeded the company's initial estimates.
The downgrades and continued CreditWatch placements reflect S&P's
view that uncertainties are growing over Toshiba's ability to
continue to fulfill its financial commitments in the long term.
This reflects S&P's view of a growing likelihood that the losses
the company will recognize related to its U.S. nuclear power
business will exceed JPY500 billion, which would inevitably
substantially erode its shareholders' equity as of the end of the
third quarter (ended Dec. 31, 2016) of fiscal 2016. S&P also
sees a heightened likelihood Toshiba will need more time than it
assumed to restructure its businesses and improve its financial
standing.
In its restructuring measures, Toshiba is considering divesting
part of its stake in its main semiconductor business, and it is
reviewing its assets. But S&P thinks considerable time will pass
before financial institutions put together a framework of support
for Toshiba and S&P sees clear prospects of improvement in the
company's business performance and financial standing. Any delay
in compiling the restructuring plan would further constrain
Toshiba's business operations and funding, in S&P's view. Even
if Toshiba assembles the plan swiftly, its heavy debt burden
prevents us from ruling out the possibility it will request
financial support from its main creditor banks in the form of a
debt-to-equity swap, amendments to terms and conditions on
existing debt, or a debt waiver.
S&P has lowered its overall assessment of Toshiba's management
and governance to weak from S&P's previous assessment of fair.
Not only has the company been mired in widespread accounting
improprieties, which came to light in 2015, but in late 2016 it
said it would recognize massive losses related to its U.S.
nuclear power business. These developments show the company's
flawed ability to execute its business plan and manage risks,
leading S&P to believe the problems with its risk management
regime are more severe than S&P assumed.
S&P has lowered its assessment of Toshiba's liquidity to weak
from S&P's previous assessment of less than adequate. S&P
estimates its liquidity sources will be at or less than 1x uses
over the next 12 months because its business performance is
rapidly deteriorating. S&P expects considerable pressure on its
liquidity, even when taking into account unused commitment lines
beyond one year, because Toshiba might be in breach of financial
covenants, its access to capital markets is limited, and its
funding will remain reliant on the supportive stance of its main
creditor banks. Support from banks will continue to underpin
Toshiba's liquidity because S&P believes Toshiba's main creditor
banks intend to continue to extend it financial support.
"Our long-term senior unsecured debt rating on Toshiba is one
notch higher than our long-term corporate credit rating on the
company. We expect Toshiba's main creditor banks to maintain a
somewhat supportive stance toward the company. Therefore, any
default might take the form of main creditor banks providing
support that we define as 'SD' (selective default), leading us to
believe the company is more likely to fulfill its obligations to
bondholders than to lender banks. Nevertheless, Toshiba's main
creditor banks might take a cautious stance toward the company's
restructuring plan because the latest financial deterioration
stems from its high-risk nuclear power business and because the
accounting improprieties show the company's internal controls are
highly problematic. Therefore, Toshiba's creditor banks might
require a few months to flesh out details of any financial
support and execute the plan. On the basis of these factors, we
have narrowed the difference between the issue rating and the
long-term corporate credit rating to one notch from two notches
previously," S&P said.
S&P will review the ratings and resolve the CreditWatch
placements after examining Toshiba's earnings prospects,
developments related to the restructuring plan, and the support
stance of its creditor banks. If S&P sees a heightened
likelihood that banks will provide support in a form S&P define
as 'SD', it might further downgrade the company by multiple
notches.
RATINGS LIST
Downgraded; CreditWatch Action
To From
Toshiba Corp.
Corporate Credit Rating CCC+/Watch Neg./C B-/Watch Neg./B
Toshiba Corp.
Senior Unsecured B-/Watch Neg. B+/Watch Neg.
Commercial Paper C/Watch Neg. B/Watch Neg.
TOSHIBA CORP: To Unveil Extent of Nuclear Biz Writedown on Feb 14
-----------------------------------------------------------------
Reuters reports that Toshiba Corp. said Jan. 24 it will unveil
the extent of the writedown on its U.S. nuclear business on
Feb. 14 when it reports its results for the quarter ended Dec 31.
Reuters relates that the laptops-to-engineering conglomerate,
still recovering from a $1.3 billion accounting scandal two years
ago, shocked investors in December by announcing major cost
overruns at the U.S. nuclear business it bought in 2015.
"We will explain the reasons why this occurred in the nuclear
business and offer measures to prevent a repeat," Toshiba said in
a press release through the Tokyo Stock Exchange, Reuters relays.
Last week, media reported the troubled Japanese firm may unveil a
writedown of as much as JPY700 billion ($6.18 billion) for its
U.S. nuclear business, Reuters recalls.
To cope with its financial crunch, Toshiba has said it plans to
sell part of its core chip business, says Reuters.
About Toshiba
Toshiba Corporation (TYO:6502) -- http://www.toshiba.co.jp/-- is
a Japan-based manufacturer involved in five business segments.
The Digital Products segment offers cellular phones, hard disc
devices, optical disc devices, liquid crystal televisions, camera
systems, digital versatile disc (DVD) players and recorders,
personal computers (PCs) and business phones, among others. The
Electronic Device segment provides general logic integrated
circuits (ICs), optical semiconductors, power devices, large-
scale integrated (LSI) circuits for image information systems and
liquid crystal displays (LCDs), among others. The Social
Infrastructure segment offers various generators, power
distribution systems, water and sewer systems, transportation
systems and station automation systems, among others. The Home
Appliance segment offers refrigerators, drying machines, washing
machines, cooking utensils, cleaners and lighting equipment. The
Others segment leases and sells real estate.
As reported in the Troubled Company Reporter-Asia Pacific on
Dec. 30, 2016, Moody's Japan K.K. downgraded Toshiba
Corporation's corporate family rating (CFR) and senior unsecured
rating to Caa1 from B3. Moody's has also downgraded Toshiba's
subordinated debt rating to Ca from Caa3, and affirmed its
commercial paper rating of Not Prime. At the same time, Moody's
has placed Toshiba's Caa1 CFR and long-term senior unsecured bond
rating, as well as its Ca subordinated debt rating under review
for further downgrade.
TOSHIBA CORP: Bank-Related Funds May Invest in Flash Memory Unit
----------------------------------------------------------------
The Japan Times reports that investment funds established by
Toshiba Corp.'s main creditor banks may invest in the company's
flash memory unit as the conglomerate prepares to spin off the
operation, sources have said.
The report relates that Toshiba, facing huge potential losses
related to its U.S. nuclear business, is likely to hold a board
meeting on Jan. 27 to carry out procedures to spin off its
profitable unit in order to receive external assistance, the
sources said on Jan. 23.
The funds include UDS Mezzanine Fund, established by Sumitomo
Mitsui Banking Corp. and the state-owned Development Bank of
Japan, and Blue Partners Fund, launched by Mizuho Bank and the
DBJ, the Japan Times discloses.
Last week, the Japanese electronics manufacturer said that it is
considering spinning off its flash memory business to raise
funds, a move that would generate cash through the sale of a
stake in the new entity to offset losses in its U.S. nuclear
business. The company is eying listing the unit, the Japan Times
says.
While foreign investment funds and Canon Inc. have said they are
interested in buying stakes in the spun-off company, there are
also concerns that Toshiba's influence could be limited in such a
scenario, according to the report.
The Japan Times says bank-established investment funds raise cash
from a wide range of investors. Because investment through such a
vehicle would strongly suggest an intention to support, such
funds are unlikely to be heavily involved in management.
If the nuclear-to-electronics conglomerate falls into negative
net worth at the end of the current fiscal year in March, it will
be downgraded to the second section of the Tokyo Stock Exchange
from the first section, the report states.
Toshiba is likely to hold an extraordinary shareholder's meeting
in March as the spinoff move will need their approval, adds the
Japan Times.
About Toshiba
Toshiba Corporation (TYO:6502) -- http://www.toshiba.co.jp/-- is
a Japan-based manufacturer involved in five business segments.
The Digital Products segment offers cellular phones, hard disc
devices, optical disc devices, liquid crystal televisions, camera
systems, digital versatile disc (DVD) players and recorders,
personal computers (PCs) and business phones, among others. The
Electronic Device segment provides general logic integrated
circuits (ICs), optical semiconductors, power devices, large-
scale integrated (LSI) circuits for image information systems and
liquid crystal displays (LCDs), among others. The Social
Infrastructure segment offers various generators, power
distribution systems, water and sewer systems, transportation
systems and station automation systems, among others. The Home
Appliance segment offers refrigerators, drying machines, washing
machines, cooking utensils, cleaners and lighting equipment. The
Others segment leases and sells real estate.
As reported in the Troubled Company Reporter-Asia Pacific on
Dec. 30, 2016, Moody's Japan K.K. downgraded Toshiba
Corporation's corporate family rating (CFR) and senior unsecured
rating to Caa1 from B3. Moody's has also downgraded Toshiba's
subordinated debt rating to Ca from Caa3, and affirmed its
commercial paper rating of Not Prime. At the same time, Moody's
has placed Toshiba's Caa1 CFR and long-term senior unsecured bond
rating, as well as its Ca subordinated debt rating under review
for further downgrade.
====================
N E W Z E A L A N D
====================
ROSS ASSET: Liquidators Recouped NZ$4MM; Await McIntosh Ruling
--------------------------------------------------------------
BusinessDesk reports that the liquidator of Ross Asset Management
has lifted settlements with investors to NZ$6.1 million and got
NZ$161,585 from share sales in the past six months but its job is
partly on hold pending a Supreme Court decision.
PwC's John Fisk is seeking to recover as much as possible of the
NZ$100 million to NZ$115 million of investor money frittered away
in the country's biggest Ponzi scheme, BusinessDesk says. In his
latest update, Mr. Fisk said claims against 93 investors are
subject to standstill agreements that became necessary because of
the ongoing legal stoush with Hamish McIntosh, BusinessDesk
relates.
According to BusinessDesk, the Wellington lawyer has taken his
case to the Supreme Court after lower courts found he was
required to repay about NZ$454,000 he got back over and above the
NZ$500,000 he put in after managing to extract his paper profits
from the Ponzi scheme before it failed. The liquidator says at
the time of writing no timing for the decision was known.
BusinessDesk says two investors refused to enter a standstill and
the liquidator has since settled with one. It has also settled
with 39 investors "who wished to avoid any ongoing risk of
litigation".
Settlements totalled NZ$6.8 million, of which NZ$6.1 million was
received in the six months to December 16. More may settle as
more investors have retained the same legal adviser, according to
the report cited by BusinessDesk.
Total receipts since the liquidation started on December 17,
2012, rose to NZ$10.7 million, of which the biggest portion,
NZ$6.1 million, came from the clawback recovery, BusinessDesk
discloses. They have extracted NZ$876,069 from David Ross, the
RAM principal who is serving a 10-year 10-month jail term for
fraud, but this amount barely budged in the latest six months.
Payments during the liquidation have totalled NZ$4.6 million, of
which liquidators' fees are the biggest item at NZ$1.18 million.
BusinessDesk says the liquidation covers eight related entities,
of which the total funds held was NZ$7.2 million at December 16.
Of that, about NZ$6.1 million was held in the Ross Asset
liquidation and about NZ$1.1 milion was held in Dagger Nominees.
About Ross Asset
As reported in the Troubled Company Reporter-Asia Pacific on
Nov. 8, 2012, the High Court appointed PricewaterhouseCoopers
partners John Fisk and David Bridgman as Receivers and Managers
to Ross Asset Management Limited and nine other associated
entities following application by the Financial Markets
Authority. The associated entities are:
* Bevis Marks Corporation Limited;
* Dagger Nominees Limited;
* McIntosh Asset Management Limited;
* Mercury Asset Management Limited;
* Ross Investment Management Limited;
* Ross Unit Trusts Management Limited;
* United Asset Management Limited;
* Chapman Ross Trust;
* Woburn Ross Trust;
* Ace Investments Limited or Ace Investment Trust Limited or
Ace Investment Trust;
* Vivian Investments Limited; and
* Ross Units Trusts Limited.
The Receivers and Managers have also been appointed to Wellington
investment adviser David Robert Gilmore Ross personally.
Mr. Fisk said they have identified investments of nearly
NZ$450 million held on behalf of more than 900 investors across
1,720 individual accounts.
The High Court in mid-December ordered John Fisk and David
Bridgman be appointed liquidators of these companies:
-- Ross Asset Management Limited (In Receivership);
-- Bevis Marks Corporation Limited (In Receivership);
-- McIntosh Asset Management Limited (In Receivership);
-- Mercury Asset Management Limited (In Receivership);
-- Dagger Nominees Limited (In Receivership);
-- Ross Investment Management Limited (In Receivership);
-- Ross Unit Trust Management Limited (In Receivership); and
-- United Asset Management Limited (In Receivership).
=================
S I N G A P O R E
=================
OCEANUS GROUP: Enters Debt Restructuring Deal With Key Creditors
----------------------------------------------------------------
Judith Tan at Business Times reports that Oceanus Group has
entered into a binding term sheet with its key creditors in
relation to a proposed debt restructuring.
This is done by converting 76.4% of its total outstanding debt to
equity, substantially improving its balance sheet, it announced
on Jan. 25 before the market opens, BT says.
BT relates that with the proposed restructuring, its key
creditors - BW Investment, Ocean Wonder International and Ocean
King Group - have agreed to transfer approximately SGD31.87
million of the outstanding debt to a consortium consisting of new
value investors and Oceanus management (new investors).
To help with the general corporate purposes and the ongoing
working capital needs of Oceanus, the new investors will inject
new funds of up to SGD6 million, of which SGD5 million will be
contributed by new value investors and SGD1 million from the
management, according to the report.
A further SGD29.57 million of outstanding debt will be converted
to new shares at SGD0.00395 each, while the remaining SGD20
million will not be repayable until Dec. 31, 2018, says BT.
"This is a good outcome and signals the 'revival' of Oceanus.
With our books in the process of being cleaned up, and the
support of a committed management team, we can now drive new
business initiatives and put in place the growth engines required
to propel our turnaround," BT quotes Peter Koh, the group's
executive director and chief executive officer, as saying.
Oceanus Group Limited (SGX:579) is a seafood supplier. The
Company is engaged in the sale of aquaculture products. The
Company operates through Live Marine Products segment. The
Company produces abalones with a production capacity of
approximately 26,000 abalone tanks. Its products are canned
abalone and dry abalone. It sells live marine products and
processed marine products. Its total caged Abalone population is
over 8,220 million units. It works with an Australian processor
for the supply of abalone meat for canning and making dried
abalones. It also invests in research and development to breed
abalone and premium seafood, such as fish, prawn and sea
cucumber. It is diversifying its business units into fast-moving
consumer goods, such as canned abalone, premium seafood products
and frozen seafood products. Its farms are located along the
coastal lines of Fujian and Guangdong provinces in the People's
Republic of China.
====================
S O U T H K O R E A
====================
SAMSUNG HEAVY: Net Loss Narrows in 2016 to KRW139 Billion
---------------------------------------------------------
Yonhap News Agency reports that Samsung Heavy Industries Co. said
Jan. 25 that its loss narrowed sharply last year from a year
earlier largely thanks to its cost-cutting efforts.
Its net loss came to KRW139 billion (US$119 million) last year,
compared to a loss of KRW1.21 trillion a year earlier, the
company said in a regulatory filing, Yonhap relates.
Sales rose 7.2% on-year to KRW10.41 trillion last year, while it
suffered an operating loss of KRW147 billion, shifting from an
operating income of KRW1.5 trillion over the cited period, it
added, the report discloses.
Yonhap notes that the shipbuilding industry, once regarded as the
backbone of the country's economic growth and job creation, has
been reeling from mounting losses caused by an industry-wide
slump and increased costs.
According to Yonhap, the country's top three shipyards suffered a
combined operating loss of KRW8.5 trillion in 2015 due largely to
increased costs stemming from a delay in the construction of
offshore facilities and the industry-wide slump, with Daewoo
Shipbuilding alone posting a KRW5.5 trillion loss.
The shipbuilders have drawn up sweeping self-rescue programs
worth some KRW11 trillion in a desperate bid to overcome a
protracted slump and mounting losses, adds Yonhap.
Samsung Heavy Industries Co., Ltd. manufactures crude oil
tankers, container vessels, bulk carriers, cruisers, and
passenger ferries. The Company also produces steel and bridge
structures, and material handling equipment. In addition, Samsung
Heavy Industries provides civil engineering, architectural, and
plant construction services.
STX OFFSHORE: Ordered to Compensate Shareholders for Acctg Fraud
----------------------------------------------------------------
Yonhap News Agency reports that a lower court has ordered cash-
strapped STX Offshore & Shipbuilding Co. to compensate its
minority shareholders for losses they suffered due to its
accounting fraud, court records showed Jan. 25.
According to Yonhap, the Seoul Central District Court ruled in
favor of 290 plaintiffs who sued the shipbuilder, former STX
Group Chairman Kang Duk-soo and the accounting firm Samjong KPMG,
and ordered the defendants to pay a total of some KRW4.9 billion
(US$4.2 million) in damages.
Yonhap relates that the court said Kang, who led the group from
2003 to 2014, created and announced forged business reports and
financial statements.
"The plaintiffs bought STX Shipbuilding's shares, trusting the
audit report and suffered losses due to the fall in stock price,"
it said, Yonhap relays.
The KRW4.9 billion is about 60% of the KRW7.78 billion originally
sought by the plaintiffs, Yonhap says. The court said the losses
were caused, not just by the accounting fraud, but also by other
criminal activities committed by company executives as well as a
nationwide slump in the shipyard industry, according to Yonhap.
Kang, indicted for his role in the alleged business malpractice,
is awaiting the Supreme Court's decision, Yonhap notes.
In 2015, an appeals court convicted Kang of embezzlement and
negligence of duty and handed down a three-year term, suspended
for four years. Still, the court has acquitted him of cooking the
books, citing a lack of evidence, adds Yonhap.
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.
*********
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 2017. 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 ***