/raid1/www/Hosts/bankrupt/TCRAP_Public/170306.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Monday, March 6, 2017, Vol. 20, No. 46
Headlines
A U S T R A L I A
CRUSADE ABS 2017-1: Fitch Rates AUD36MM Class E Notes at 'BB+sf'
GOHRT NOMINEES: First Creditors' Meeting Set for March 13
INFINITI VICTORIA: First Creditors' Meeting Set for March 14
LIBERTY FUNDING: Moody's Assigns B2(sf) Rating to Class F Notes
MANPAK HOLDINGS: First Creditors' Meeting Set for March 14
MESA MINERALS: Director, CFO Accused of Breaching Duties
MIRNDA MD: First Creditors' Meeting Set for March 14
PENRICE SODA: ATO to Repay AUD1.2MM to Liquidators
REFTRANS PTY: First Creditors' Meeting Set for March 13
C H I N A
AOXING PHARMACEUTICAL: Posts $32,960 Net Loss for Second Quarter
TIMES PROPERTY: Fitch Says Credit Profile Stable Amid Expansion
YINGDE GASES: Ratings Still Under Pressure, Fitch Says
H O N G K O N G
CHINA SOUTH: S&P Rates Proposed US$-Denom. Sr. Unsec. Notes 'B-'
I N D I A
A P STEEL: CRISIL Assigns 'B' Rating to INR3.5MM Cash Loan
ANGAYARKKANNI ENTERPRISES: CRISIL Reaffirms B+ Cash Credit Rating
BHAGABATI STORE: CRISIL Ups Rating on INR12.5MM Cash Loan to B+
BHUVAN WHEELS: CRISIL Reaffirms B- Rating on INR6MM Cash Loan
CLASSIC FOODS: Ind-Ra Assigns 'B+' Long-Term Issuer Rating
DATTA MEGHE: CRISIL Reaffirms 'B' Rating on INR7MM Cash Loan
DHIREN DIAMONDS: CRISIL Assigns B+ Rating to INR16MM Loan
ESSAR STEEL: Banks to Defer Debt Recast, to Take INR44,000cr Hit
G. P. TIMBER: CRISIL Reaffirms 'B' Rating on INR3MM Cash Loan
GOEL FOOD: CRISIL Assigns 'B+' Rating to INR5MM Cash Loan
GSM PLUS: CRISIL Reaffirms 'B+' Rating on INR5.5MM LT Loan
GURU NANAK: Ind-Ra Assigns 'BB-' Long-Term Issuer Rating
JAIDHAR CONSTRUCTIONS: CRISIL Assigns B Rating to INR4.10MM Loan
KARNATAKA TURNED: CRISIL Reaffirms 'B' Rating on INR5.7MM Loan
LENZ CERAMIC: Ind-Ra Assigns 'BB' Long-Term Issuer Rating
LINGARD IFMR: Ind-Ra Rates INR12.7MM PTCs-Series A2 Prov. 'BB+'
MAKALU TRADING: CRISIL Lowers Rating on INR235MM Loan to 'D'
MINI DIAMONDS: CRISIL Lowers Rating on INR2MM Cash Loan to 'B'
MULLAS WEDDING: CRISIL Reaffirms 'B' Rating on INR5MM LT Loan
N. S. ENGINEERING: CRISIL Reaffirms B- Rating on INR39MM Loan
P. MURUGESAN: CRISIL Assigns 'B+' Rating to INR4.5MM Cash Loan
PAREKH PETROCHEMICALS: CRISIL Assigns B+ Rating to INR5MM Loan
PAREVARTAN EDUCARE: CRISIL Ups Rating on INR10MM Term Loan to B+
PCM STRESCON: CRISIL Reaffirms 'B' Rating on INR31.00MM Loan
PHOENIX ISPAT: CRISIL Reaffirms B+ Rating on INR7.5MM Loan
PICASSO HOME: CRISIL Reaffirms 'B' Rating to INR3.25MM Loan
RATAN COLD: CRISIL Assigns B+ Rating to INR5.70MM Term Loan
RATNADEEP METAL: Ind-Ra Assigns 'BB' Long-Term Issuer Rating
RUBY MICA: CRISIL Reaffirms B+ Rating on INR2.06MM Loan
RUCHI SOYA: Faces Insolvency Action Over INR9.63cr Debt
RVM CHARITABLE: CRISIL Assigns 'B+' Rating to INR30MM LT Loan
SAUMIL IMPEX: CRISIL Upgrades Rating on INR7.1MM Loan to 'B'
SHREE VENKATESH: Ind-Ra Affirms 'BB' Long-Term Issuer Rating
SKYHIGH HOSPITALITY: CRISIL Reaffirms B- Rating on INR10MM Loan
SOLANO CERAMIC: CRISIL Reaffirms 'B' Rating on INR3.73MM Loan
SRI KANGEYAA: CRISIL Reaffirms B+ Rating on INR3.1MM LT Loan
VARDHINI INDUSTRIES: CRISIL Assigns 'B+' Rating to INR6.48MM Loan
VISHAL CONSTRUCTION: CRISIL Assigns 'D' Rating to INR3.55MM Loan
VRAJPACK INDUSTRIES: CRISIL Reaffirms B Rating on INR5.95MM Loan
J A P A N
TOSHIBA CORP: To Sell 18.1% Stake in Molding Machines Unit
N E W Z E A L A N D
CHRISTIAN SAVINGS: Fitch Affirms B+ LT Issuer Default Rating
SEADRAGON LTD: Expects Annual Net Loss of NZ4.5 Million
S I N G A P O R E
EZRA HOLDINGS: Misses Deadline to Settle $4.4MM Debt
EZRA HOLDINGS: Necotrans Withdraws Winding-Up Bid v. Emas Chiyoda
S O U T H K O R E A
HANJIN SHIPPING: Creditors Fighting Over Sale of Container Assets
- - - - -
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A U S T R A L I A
=================
CRUSADE ABS 2017-1: Fitch Rates AUD36MM Class E Notes at 'BB+sf'
----------------------------------------------------------------
Fitch Ratings has assigned final ratings to Crusade ABS Series
2017-1 Trust's floating-rate notes. The issuance consists of
notes backed by automotive lease and loan receivables originated
by Westpac Banking Corporation (Westpac, AA-/Stable/F1+).
The ratings are:
AUD741m Class A1 notes: 'AAAsf'; Outlook Stable
AUD1,000m Class A2 notes: 'AAAsf'; Outlook Stable
AUD108m Class B notes: 'AA+sf'; Outlook Stable
AUD86m Class C notes: 'Asf'; Outlook Stable
AUD60m Class D notes: 'BBBsf'; Outlook Stable
AUD36m Class E notes: 'BB+sf'; Outlook Stable
AUD119m Seller notes: 'NRsf'.
The 'BB+sf' rating assigned to the class E note is higher than
the expected rating of 'BB(EXP)sf' assigned to the note. The new
rating is driven by the increased deal size, which resulted in a
reduction in stress through the tail-end of the transaction.
The notes were issued by Perpetual Corporate Trust Limited in its
capacity as trustee of Crusade ABS Series 2017-1 Trust.
KEY RATING DRIVERS
Asset Origination: All receivables will be sourced from Westpac,
as the lender of record, and are reviewed under the same central
credit policy. The servicer of record is Westpac. Collections are
outsourced to Collection House Ltd and overseen by Westpac.
Consumer Finance Composition: Consumer finance receivables
comprise 57.2% of the portfolio. Consumer finance has higher loss
levels than other product types and longer lease terms of up to
85 months. Fitch has taken this into account in the rating
analysis.
Low Historical Defaults: The receivables book has experienced
relatively low levels of defaults to date, with the majority of
quarterly vintage gross loss percentages ranging from 1.3%-3.8%
for passenger vehicles. Delinquencies greater than 30 days have
generally tracked below 3.0%.
Consistent Credit Quality: The collateral backing the Crusade ABS
2017-1 transaction, statistically, is of similar credit quality
to prior pools securitised under the Crusade ABS programme. The
pool comprises receivables backed by motor vehicles with
weighted-average (WA) seasoning of 10.1 months and average
receivable size of AUD26,786. The WA balloon residual percentage
is 7.0% (percentage of the original outstanding balance of the
receivable).
Eligibility Criteria and Pool Parameters: A substitution period
of 12 months will allow receivables to be sold to the trust on a
regular basis, subject to eligibility criteria and pool
parameters to ensure consistent portfolio characteristics. All
substitutions will cease upon unreimbursed charge-offs exceeding
1%; if an event of default or servicer termination event
subsists; or if the average percentage of loans more than 90 days
in arrears over the prior three months exceeds 3%.
RATING SENSITIVITIES
Unanticipated increases in the frequency of defaults and loss
severity on defaulted receivables could produce loss levels
higher than Fitch's base case, likely resulting in a decline in
credit enhancement and remaining loss-coverage levels available
to the notes. Fitch has evaluated the sensitivity of the ratings
assigned to Crusade ABS Series 2017-1 to increased gross default
levels and decreased recovery rates over the life of the
transaction.
Expected impact upon the note rating of increased defaults:
Final rating: AAAsf/AA+sf/Asf/BBBsf/BB+sf
Increase defaults by 10%: AAAsf/AAsf/A-sf/BBB-sf/BBsf
Increase defaults by 25%: AA+sf/A+sf/A-sf/BB+sf/BBsf
Increase defaults by 50%: AAsf/Asf/BBBsf/BBsf/B+sf
Expected impact upon the note rating of decreased recoveries:
Final rating: AAAsf/AA+sf/Asf/BBBsf/BB+sf
Reduce recoveries by 10%: AAAsf/AA+sf/Asf/BBB-sf/BB+sf
Reduce recoveries by 25%: AAAsf/AAsf/A-sf/BBB-sf/BB+sf
Reduce recoveries by 50%: AAAsf/AAsf/A-sf/BB+sf/BBsf
Expected impact upon the note rating of multiple factors:
Final rating: AAAsf/AA+sf/Asf/BBBsf/BB+sf
Increase defaults by 10%; reduce recoveries by 10%: AAAsf/AA-
sf/A-sf/BB+sf/BBsf
Increase defaults by 25%; reduce recoveries by 25%:
AA+sf/A+sf/BBBsf/BBsf/B+sf
Increase defaults by 50%; reduce recoveries by 50%: A+sf/A-
sf/BBB-sf/Bsf/NRsf
USE OF THIRD-PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G-10
Form ABS Due Diligence-15E was not provided to, or reviewed by,
Fitch in relation to this rating action.
REPRESENTATIONS, WARRANTIES AND ENFORCEMENT MECHANISMS
A description of the transaction's representations, warranties
and enforcement mechanisms (RW&Es) disclosed in the offering
document that relate to the underlying asset pool is available by
accessing the appendix referenced under "Related Research" below.
The appendix also contains a comparison of these RW&Es to those
Fitch considers typical for the asset class, as detailed in the
Special Report titled "Representations, Warranties and
Enforcement Mechanisms in Global Structured Finance
Transactions," dated 31 May 2016.
DATA ADEQUACY
As part of its ongoing monitoring, Fitch conducted a review of a
small targeted sample of Westpac's origination files and found
the information contained in the reviewed files to be adequately
consistent with the originator's policies and practices and the
other information provided to the agency about the asset
portfolio.
Fitch sought to receive a third-party assessment conducted on the
asset portfolio information, but none was made available.
Overall, Fitch's assessment of the asset pool information relied
upon for the agency's rating analysis according to its applicable
rating methodologies indicates that it is adequately reliable.
Key rating drivers and final rating sensitivities are further
discussed in the corresponding new issue report entitled "Crusade
ABS Series 2017-1 Trust", published.
SOURCES OF INFORMATION
The information below was used in the analysis:
Loan-by-loan data provided by Westpac as at 17 February 2017
Loss and recovery data provided by Westpac as at 31 December 2016
Transaction documentation provided by King & Wood Mallesons, the
issuer's counsel.
The issuer has informed Fitch that not all relevant underlying
information used in the analysis of the rated notes is public.
GOHRT NOMINEES: First Creditors' Meeting Set for March 13
---------------------------------------------------------
A first meeting of the creditors in the proceedings of Gohrt
Nominees Pty Ltd, trading as Carpets by Design, on will be held
at the offices of Sheridans, Chartered Accountants, Level 9, 40
St George's Terrace, in Perth, on March 13, 2017, at 11:00 a.m.
Jennifer Elizabeth Low of Sheridans, Chartered Accountants, was
appointed as administrator of Gohrt Nominees on March 1, 2017.
INFINITI VICTORIA: First Creditors' Meeting Set for March 14
------------------------------------------------------------
A first meeting of the creditors in the proceedings of Infiniti
Victoria Pty Ltd will be held at Level 10, 575 Bourke Street, in
Melbourne, Victoria, on March 14, 2017, at 12:00 p.m.
David Ross, Richard Albarran and Cameron Shaw of Hall Chadwick
were appointed as administrators of Infiniti Victoria on March 1,
2017.
LIBERTY FUNDING: Moody's Assigns B2(sf) Rating to Class F Notes
---------------------------------------------------------------
Moody's Investors Service has assigned the following definitive
ratings to notes issued by Liberty Funding Pty Ltd:
Issuer: Liberty Funding Pty Ltd in respect of the Liberty PRIME
Series 2017-1 Trust
-- AUD 262.5 million Class A1 Notes, Assigned Aaa (sf)
-- AUD 11.9 million Class A2 Notes, Assigned Aaa (sf)
-- AUD 38.8 million Class B Notes, Assigned Aa2 (sf)
-- AUD 10.5 million Class C Notes, Assigned A2 (sf)
-- AUD 8.4 million Class D Notes, Assigned Baa1 (sf)
-- AUD 7.7 million Class E Notes, Assigned Ba1 (sf)
-- AUD 5.9 million Class F Notes, Assigned B2 (sf)
The AUD 2.3 million Class G1 and AUD 2.0 million Class G2 Notes
are not rated by Moody's.
The ratings address the expected loss posed to investors by the
legal final maturity.
RATINGS RATIONALE
The transaction is an Australian prime RMBS secured by a
portfolio of residential mortgage loans. All receivables were
originated and are serviced by Liberty Financial Pty Ltd.
This is the 6th prime RMBS transaction sponsored by Liberty.
The ratings take account of, among other factors:
- Class A1 and Class A2 Notes benefit from 25.0% and 21.6%
credit enhancement (CE), while Moody's MILAN CE assumption,
the loss Moody's expects the portfolio to suffer in the event
of a severe recession scenario, is at 13.8%. Moody's expected
loss for this transaction is 1.4%. The subordination
strengthens ratings stability, should the pool experience
losses above expectations.
- The experience of Liberty in servicing residential mortgage
portfolios. This is Liberty's 6th prime, and 26th RMBS
securitisation, which highlights the lender's experience as a
manager and servicer of securitised transactions.
The key transactional feature is as follows:
- The rated notes will initially be repaid on a pro-rata basis.
The Class G Notes do not step down and will only receive
principal payments once all other notes have been repaid. The
principal pay-down switches back to sequential pay across all
notes, once the stepdown requirements are not satisfied.
Methodology Underlying the Rating Action:
The principal methodology used in these ratings was "Moody's
Approach to Rating RMBS Using the MILAN Framework" published in
September 2016.
Factors that would lead to an upgrade or downgrade of the
ratings:
Levels of credit protection that are greater than necessary to
protect investors against current expectations of loss could lead
to an upgrade of the rating. Moody's current expectations of loss
could be better than its original expectations because of fewer
defaults by underlying obligors or higher recoveries on defaulted
loans. The Australian job market and the housing market are
primary drivers of performance.
A factor that could lead to a downgrade of the notes is worse-
than-expected collateral performance. Other reasons for
performance worse than Moody's expects include poor servicing,
error on the part of transaction parties, a deterioration in
credit quality of transaction counterparties, fraud and lack of
transactional governance.
Moody's Parameter Sensitivities:
Parameter Sensitivities are designed to provide a quantitative
calculation of how the initial rating might change if key input
parameters used in the initial rating process - here the MILAN CE
and mean expected loss - differed. The analysis assumes that the
deal has not aged. Parameter Sensitivities only reflect the
ratings impact of each scenario from a quantitative/model-
indicated standpoint.
Based on the current structure, if the MILAN CE losses were to
increase to 20.7% from 13.8%, and the mean expected loss were to
increase to 2.1% from 1.4%, the model-indicated rating for the
Class A2 Notes would drop one notch to Aa1. The excess
subordination at closing reduces the probability of ratings
migration. Using these same assumptions, the ratings on the Class
B Notes drop two notches, and Class C and Class D Notes drop
three notches to A1, Baa2 and Ba1 respectively. The Class A1
Notes are not sensitive to any rating migration using these same
assumptions.
MANPAK HOLDINGS: First Creditors' Meeting Set for March 14
-----------------------------------------------------------
A first meeting of the creditors in the proceedings of Manpak
Holdings Pty Ltd, trading as Infiniti Group, will be held at
Level 4, 16 St Georges Terrace, in Perth, on March 14, 2017, at
10:00 a.m.
Cameron Shaw, David Ross and Richard Albarran of Hall Chadwick
were appointed as administrators of Manpak Holdings on March 1,
2017.
MESA MINERALS: Director, CFO Accused of Breaching Duties
--------------------------------------------------------
Tess Ingram at Australian Financial Review reports that one of
Western Australia's richest businessmen, Chris Ellison, has been
accused of failing in his duties as a director of a junior
company majority owned by the mining services group he heads,
Mineral Resources.
In a Supreme Court of Western Australia hearing on Feb. 20, high-
profile Banco Chambers barrister Robert Newlinds, SC, alleged
Mr. Ellison and Mineral Resources chief financial officer Bruce
Goulds had potentially breached their "fiduciary duties" while
acting as directors of Mesa Minerals, which is now in
administration, according to AFR.
Mr. Ellison, a millionaire and BRW Rich Lister, is managing
director and the largest shareholder of the $2.4 billion Mineral
Resources, AFR discloses.
AFR says Mr. Ellison and Mr. Goulds both became directors of Mesa
Minerals after Mineral Resources launched an off-market takeover
offer for the manganese junior in 2010.
The takeover was blocked by Mesa's second largest shareholder,
Mighty River International, which is controlled by Chinese
businessman Yuzheng Xie, the report says.
Mineral Resources now owns about 60% of Mesa Minerals, with
Mighty River retaining a 13% stake, the report discloses.
The two parties have been at loggerheads since 2010, with the
Feb. 20 court hearing representing the latest front in their
near-seven-year battle, adds AFR.
According to AFR, Mighty River, represented by Mr. Newlinds, is
frustrated Mineral Resources has not progressed Mesa's Ant Hill
and Sunday Hill manganese projects and alleges Mesa's directors
allowed Mineral Resources and other third parties to use Mesa's
access rights and capacity at the Utah Point facility at Port
Hedland port, as well as a nearby storage area, on terms it does
not consider commercial.
"We think that looks like potentially a breach of fiduciary
duties or the like," Mr. Newlinds told Master Craig Sanderson,
arguing the alleged action would have benefited Mineral Resources
at the expense of Mesa and its shareholders, AFR relays.
Since acquiring the majority stake in 2010, Mesa has been reliant
on Mineral Resources for funding.
In July 2016 Mesa's directors -- Mr. Ellison, Mr. Goulds and
chairman Collis Thorp -- appointed Bryan Hughes and Daniel
Bredenkamp of Pitcher Partners as administrators of the company
after Mineral Resources withdrew its financial support, AFR
recalls.
Mineral Resources claimed it was owed about AUD8 million.
AFR says the court heard Mr. Hughes had told creditors he was
aware of Mighty River's allegations against Mesa's directors but
had not yet had time to raise the matter with the directors or
conduct investigations.
The report says the court hearing concerned an action by Mighty
River against the administrators.
According to the report, Mighty River is seeking to set aside a
deed of company arrangement and terminate the administrators'
appointment on the basis Mr. Hughes allegedly did not declare a
relationship with Mr. Ellison and Mr. Goulds and provided the
businessmen with advice in their capacity as directors of Mineral
Resources, rather than as directors of Mesa Minerals.
Both Mr. Hughes and Mineral Resources, which now counts former
federal resources minister Gary Gray as its general manager of
external affairs, declined to comment as the matter is before the
courts, AFR adds.
About Mesa Minerals
Mesa Minerals Limited (ASX:MAS) -- http://mesaminerals.com.au/--
is engaged in the exploration, mining, processing and export of
manganese products. The Company operates through Australia as its
geographical segment. The Company focuses on the development of
its jointly held Ant Hill and Sunday Hill manganese ore mining
tenements in the Pilbara district of Western Australia, and
moving towards commercialization of the Company's mineral
processing technologies in order to enable the development of
secondary processing facilities utilizing low grade manganese
ores and wastes. The Company focuses on hydrometallurgical
process technology designed to facilitate the production of
manganese electrolytic products and fertilizer products from low-
grade manganese dioxide ores and from solid wastes containing
levels of manganese. The Company's products include electrolytic
manganese dioxide, electrolytic manganese metal, micro nutrient
fertilizer, granulated manganese sulfate, manganese ore and
lithium batteries.
Bryan Kevin Hughes and Daniel Johannes Bredenkamp of Pitcher
Partners were appointed as administrators of Mesa Minerals
Limited on July 13, 2016.
MIRNDA MD: First Creditors' Meeting Set for March 14
----------------------------------------------------
A first meeting of the creditors in the proceedings of Mirnda MD
Pty Ltd will be held at the offices of Worrells Solvency &
Forensic Accountants, Level 15, 114 William Street, in Melbourne,
Victoria, on March 14, 2017, at 2:00 p.m.
Ivan Glavas and Con Kokkinos of Worrells Solvency & Forensic
Accountants were appointed as administrators of Mirnda MD on
March 1, 2017.
PENRICE SODA: ATO to Repay AUD1.2MM to Liquidators
--------------------------------------------------
ABC News reports that the Australian Taxation Office (ATO) has
been ordered to refund more than AUD1 million it took from
Penrice Soda Holdings Limited, after being sued by the company's
liquidators.
The soda products maker collapsed in 2014 with debts of up to
AUD200 million, leaving 100 staff out of work. In the lead up to
its demise, Penrice paid the ATO more than AUD1.2 million, ABC
notes.
ABC says the liquidators McGrath Nicol sued the ATO and the
Federal Court has ordered the money be repaid.
The report, citing court documents, relates that McGrath Nicol
claimed the payments between 2013 and 2014 should not have been
made to the ATO because Penrice was insolvent and unable to pay
its debts.
It said the tax office received a so-called "unfair preference"
ahead of other creditors, the report relates.
"The payments resulted in the ATO receiving . . . more than the
ATO would receive if the payments were set aside and the ATO was
to prove for the debt in the winding up of the company," the
liquidator's court submission, as cited by ABC, said. "The ATO
has failed, refused or neglected to pay the plaintiff the amount
demanded."
Court documents showed before its collapse, Penrice had AUD97.5
million in loans provided by NAB and Westpac and no further
funding available, ABC discloses.
Between August 2013 and April 2014 at least 95 payment plans were
entered into with 70 separate suppliers, of which Penrice failed
to honor the terms of 85, according to ABC News.
ABC News adds that the liquidators have identified more than two
dozen potential claims where they believe parties received an
"unfair preference".
It has estimated up to AUD9 million could be recouped, including
the funds from the ATO - but that is a fraction of what is owed
to creditors, the report notes.
According to ABC News, liquidators have also not given up on a
potential insolvent trading claim against the directors of
Penrice, but any legal action would likely need to be funded by a
third-party.
A spokesperson for the ATO said it would return preference
payments where the claim was made in full accordance with the
law.
"The ATO may lodge a defence in cases where we received the
payment in good faith and had no reasonable grounds for
suspecting the company was insolvent or would become insolvent,"
the report quotes a spokesperson as saying. "Due to our
obligations of confidentiality under the law the ATO cannot
comment further on specific aspects of this case."
About Penrice Soda
Australian-based Penrice Soda Holdings Limited (ASX:PSH ) --
http://www.penrice.com.au/-- is engaged in the manufacture,
distribution and sales of soda ash and sodium bicarbonate and the
mining, distribution and sale of quarry and mineral products.
McGrathNicol announced on April 11, 2014, that partners
Sam Davies, Peter Anderson, and Thea Eszenyi have been appointed
joint and several Voluntary Administrators to Penrice Soda
Holdings Ltd and its subsidiaries. The Penrice Group consists
of:
PSH;
Penrice Soda Products Pty Ltd;
Penrice Pty Ltd;
PSP SPV Pty Ltd;
Penrice Finance Pty Ltd;
Penrice Holdings Pty Ltd; and
Penrice Soda JV Pty Ltd.
REFTRANS PTY: First Creditors' Meeting Set for March 13
-------------------------------------------------------
A first meeting of the creditors in the proceedings of Reftrans
Pty Ltd will be held at the offices of Jones Partners Insolvency
& Business Recovery, Level 13, 189 Kent Street, in Sydney, on
March 13, 2017, at 11:00 a.m.
Bruce Gleeson of Jones Partners Insolvency was appointed as
administrator of Reftrans Pty on March 1, 2017.
=========
C H I N A
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AOXING PHARMACEUTICAL: Posts $32,960 Net Loss for Second Quarter
----------------------------------------------------------------
Aoxing Pharmaceutical Company, Inc., filed with the Securities
and Exchange Commission its quarterly report on Form 10-Q
disclosing a net loss of $32,960 on $8 million of sales for the
three months ended Dec. 31, 2016, compared to net income of $2.18
million on $8.19 million of sales for the same period during the
prior year.
For the six months ended Dec. 31, 2016, the Company reported net
income of $358,797 on $15.57 million of sales compared to net
income of $3.53 million on $16.94 million of sales for the same
period a year ago.
As of Dec. 31, 2016, Aoxing had $58.72 million in total assets,
$40.91 million in total liabilities and $17.80 million in total
equity. The Company's cash balance as of Dec. 31, 2016, was
$6,848,691, compared to $6,912,100 as of June 30, 2016.
Operations during the six month period ended Dec. 31, 2016,
provided $222,874 in cash, as compared to $714,855 cash used in
operations during the six month period ended Dec. 31, 2015.
"Despite the decline in net income year-over-year for the six
months ended December 31, 2016, cash flow from operation for the
six months ended December 31, 2016 was better than a year ago.
This incongruity occurred because the decline in net income was
almost entirely attributable to a $2,979,245 bad debt write off
that we recorded during the six months ended December 31, 2016.
Since, during that same period, the $3,331,374 increase in
accrued expenses and other current liabilities, $1,200,053
increase in accounts payable, and the $694,449 reduction in
inventory served to offset most of the $5,985,664 increase in
accounts receivable, our operations for the six months ended
December 31, 2016 yielded positive cash flow. In contrast,
during the six months ended December 31, 2015 we used cash to
significantly reduce our accounts payable and to increase our
inventory, which resulted in a net use of cash in operations for
the period. During this reporting period, we did not make any
major investment.
"Our working capital deficit on December 31, 2016 was $9,672,535,
compared to $10,948,767 as of June 30, 2016. The improvement
resulted primarily from a $5,985,664 increase in accounts
receivable, although the effect of that increase on our balance
sheets was partially offset by the $2,979,245 bad debt expense
that we recorded in the six months ended December 31, 2016. The
increase in accounts receivable reflects the conversion of our
marketing program from a distributor network to direct sales to
hospitals, since accounts receivable from hospitals typically
take longer to collect than those from distributors.
"The Company's negative working capital is primarily due to our
accumulated deficit, which we have been partially funded by
taking short-term bank loans. The Company is able to operate
with negative net working capital because of loans from banks and
related parties that are rolled-over or refinanced as needed.
The Company believes future positive operating cash flows,
continued support from related parties, and the ability to
continue to roll over short-term debt, taken together, provide
adequate resources to fund ongoing operations in the foreseeable
future. The Company may also seek equity financing to replace
both short-term and long-term debts. The Company believes that
the market demand for its main product will recover in the near
term and the sales from several new products in future years will
produce substantial positive cash flow.
"Management of the Company believes that the Company's large
negative working capital will continue to improve during fiscal
year 2017. Management expects the improvement to come from
improved operating results, by extending short term into longer
term loans, and by selling equity and converting debt to equity.
Management anticipates that these improvements will enable the
Company to reduce current high interest expenses and fund on-
going operations. The management of the Company has taken a
number of actions and will continue to address this situation in
order for the Company to achieve a sound financial position going
forward," as disclosed in the report.
A full-text copy of the Form 10-Q is available for free at:
https://is.gd/NIbzE5
About Aoxing
Aoxing Pharmaceutical Company, Inc., has one operating
subsidiary, Hebei Aoxing Pharmaceutical Co., Inc., which is
organized under the laws of the People's Republic of China.
Since 2002, Hebei Aoxing has been engaged in developing narcotics
and pain management products. In 2008 Hebei Aoxing supplemented
its product lines by acquiring Shijiazhuang Lerentang
Pharmaceutical Company, Ltd., a specialty pharmaceutical company
focusing on herbal pain related therapeutics. The Company owns
95% of the equity in Hebei Aoxing.
Aoxing Pharmaceutical reported net income attributable to
shareholders of the Company of $5.49 million on $25.48 million of
sales for the year ended June 30, 2015, compared to a net loss
attributable to shareholders of the Company of $8.21 million on
$12.7 million of sales for the year ended June 30, 2014.
TIMES PROPERTY: Fitch Says Credit Profile Stable Amid Expansion
---------------------------------------------------------------
Times Property Holdings Limited's (B+/Positive) 2016 full-year
results are in line with Fitch Ratings' expectations. Fitch
estimates that Times' leverage - measured by net debt/adjusted
inventory - dropped to around 33% from 35% in 2015. Fitch expects
the EBITDA margin to hover around 20% in the next few years,
having edged down to 19.4% from 20.8% in 2015. Times' land bank
average life in core markets such as Guangzhou, Foshan, Zhuhai
and Zhongshan also increased - to 3.8 years from 2.9 years.
Times is targeting sales of CNY32.5bn in 2017, representing 11%
growth over 2016. The company will be able to retrieve around
CNY28bn from the sales proceeds, assuming a historical cash-
collection rate of 86%. Times also took advantage of the offshore
debt financing window in the beginning of the year by issuing a
USD375m 6.25% bond due 2020 to refinance a USD305m 12.625% bond
due 2019 (already redeemed in February 2017) and a CNY1.5bn
10.375% bond due 2017. Times' average funding cost had dropped to
8.3% by end-2016 from 9.6% at end-2015, and Fitch expects this to
drop further to below 8% in 2017.
Fitch believes that Times' strong cash collection from larger
sales and lower funding costs will continue to support expansion
in the next three years. Fitch revised the Outlook on Times to
Positive from Stable on Jan. 11, 2017, and Fitch may take further
positive rating action if Times can maintain leverage below 45%
and keep its land bank sufficient for three years of development.
YINGDE GASES: Ratings Still Under Pressure, Fitch Says
------------------------------------------------------
The continued uncertainties over ownership and control of Yingde
Gases Group Company Limited (Yingde, B+/Negative) and a potential
need to redeem two offshore bonds with principals totalling
USD675m due to a proposed shareholder change weigh on the
company's credit profile, Fitch Ratings says.
Yingde announced on March 1, 2017 that PAG Asia Capital (PAG) has
agreed to acquire shares from three directors of the Chinese
company. If the three directors exercise all their share options,
PAG could end up acquiring more than 40% of Yingde's outstanding
share issue, which could lead to a general offer for all of
Yingde's shares. The proposed acquisition by PAG follows the
termination in January 2017 of a proposed equity placement to
Beijing OriginWater Technology Co., Ltd.
Fitch's rating on Yingde has been on Negative Outlook since
January due to a continued dispute among the company's major
shareholders. Shareholders are due to vote on the composition of
the board of directors at an extraordinary general meeting
scheduled on March 8, 2017, and the outcome could affect the
company's strategic direction.
The three directors' agreement with PAG, if completed, may
trigger the change of control clause in the covenants for
Yingde's two outstanding bonds of USD425m due 2018 and USD250m
due 2020. The clause calls for the bonds to be redeemed fully by
the issuer if a change of control event happens together with a
rating downgrade. The potential bond redemption could pressure
Yingde's liquidity although refinancing is possible if the
company's operations are intact after the shareholder change.
Fitch will closely monitor developments at Yingde, including the
new shareholding structure, leadership changes, strategic
direction, as well as the likelihood of bond redemption and the
company's refinancing abilities, which depend on the company's
business operations.
================
H O N G K O N G
================
CHINA SOUTH: S&P Rates Proposed US$-Denom. Sr. Unsec. Notes 'B-'
----------------------------------------------------------------
S&P Global Ratings assigned its 'B-' long-term issue rating and
'cnB' long-term Greater China regional scale rating to a proposed
issue of U.S. dollar-denominated senior unsecured notes by China
South City Holdings Ltd. (B/Negative/--; cnB+/--). The ratings
are subject to S&P's review of the final issuance documentation.
S&P expects China South City to use the proceeds primarily for
refinancing of existing debt, including, but not limited to, the
potential redemption of the remaining US$200 million 8.25% senior
notes due in 2019. The company has already redeemed the first
US$200 million of the same notes in February 2017 with proceeds
from notes issuances in September and October 2016. China South
City also intends to use a portion of the proceeds to repay
maturing bank loans. The new issuance helps the company reduce
its interest expense, lengthen debt maturity profile, and lower
refinancing needs for fiscal 2018.
S&P expects China South City to achieve moderate sales recovery
in the financial year ending March 2017 and reach its target of
Hong Kong dollars (HK$) 7.5 billion-HK$8.5 billion. However, S&P
believes the operating environment of trade centers in China
remains challenging and China South City's performance is likely
to remain weak in fiscal 2018. However, the company's growing
recurring revenue provides some relief on the gross margin
pressure and the modest sales level.
The negative outlook on the corporate credit rating on China
South City reflects S&P's expectation that the operating
environment for CSC will remain tough in the next 12 months.
This stems from the weakness in trade center sales in China. S&P
expects a mild recovery in China South City's contracted sales in
the period. S&P also expects the company to curb its capital
expenditure and improve its leverage in fiscal years 2017 and
2018 (ending March 31). S&P's base case anticipates that China
South City's debt-to-EBITDA ratio will be about 15x for fiscal
2017 and about 12x-13x in fiscal 2018. At the same time, S&P
expects the company's EBITDA interest coverage to improve to
about 1x in fiscal 2017 from 0.8x in the previous year.
=========
I N D I A
=========
A P STEEL: CRISIL Assigns 'B' Rating to INR3.5MM Cash Loan
----------------------------------------------------------
CRISIL has revoked the suspension of its rating on the bank
facilities of A P Steel Re-Rolling Mill Limited and has assigned
its 'CRISIL B/Stable/CRISIL A4' ratings to the bank facilities.
The rating was 'Suspended' on July 29, 2016 since APS had not
provided necessary information required to take the rating
review. APS has now shared the requisite information.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee .5 CRISIL A4 (Assigned;
Suspension Revoked)
Cash Credit 3.5 CRISIL B/Stable (Assigned;
Suspension Revoked)
Letter of Credit 4.0 CRISIL A4 (Assigned;
Suspension Revoked)
Proposed Long Term .5 CRISIL B/Stable (Assigned;
Bank Loan Facility Suspension Revoked)
The ratings reflects APS's small scale of operations, working
capital intensive nature of operations and susceptibility of its
operating performance to volatility in steel prices. These rating
weaknesses are partially offset by comfortable financial risk
profile, marked by low gearing and the benefits the company
derives from semi-integrated operations and established
relationship with its customers.
Key Rating Drivers & Detailed Description
Weaknesses
* Small scale of operations and susceptibility to intense
industry competition: APS's scale of operations is small as
reflected in its estimated gross sales of Rs.17.9 crore in fiscal
2016 due to a large number of players and highly fragmented steel
industry. The small scale of operations are also because of low
installed capacity of 13,500 tpa for mild steel (MS) ingots and
12,150 tpa for rolled products, with modest utilization.
* Large working capital requirements: APS's operations are
working-capital-intensive, as reflected in its gross current
assets (GCAs) estimated at 153 days as on March 31, 2016. The
GCAs have ranged between 150 and 220 days over the past three
years. The GCAs have been high because of its high inventory and
moderate debtors.
Strength
* Comfortable financial risk profile: The gearing is estimated to
be comfortable at around 0.19 times as on March 31, 2016. The
gearing has been less than 0.5 times times over the past three
years.
Outlook: Stable
CRISIL expects APS to maintain stable business risk profiles over
the medium term, backed by its established relationships with its
customers. The outlook may be revised to 'Positive' in case there
is significant and sustained improvement in the company's scale
of operations while maintaining a comfortable capital structure
and if the working capital cycle improves substantially.
Conversely, the outlook may be revised to 'Negative' if APS's
financial risk profile deteriorates, because of sharp decline in
profitability margins or revenues, or further deterioration in
its working capital cycle.
APS was incorporated in 1992, as private limited company. The
company has semi integrated operations and manufactures ingots,
TMT bars, rounds, flats and angles. The company's TMT bars are
marketed under the brand name 'AP Suraksha'. APS's manufacturing
facility is located at Palakkad, Kerala, with an installed
capacity of 13,500 tonnes per annum (TPA) for ingots and 12,150
TPA for rolled products. The day to day operations are managed by
Mr. A Gulam Mohamed.
The company reported net losses of INR5.18 crore on total revenue
of INR21.82 crore in fiscal 2016, against net losses of INR0.18
crore and total revenue of INR30.63 crore, respectively, in
fiscal 2015.
ANGAYARKKANNI ENTERPRISES: CRISIL Reaffirms B+ Cash Credit Rating
-----------------------------------------------------------------
CRISIL has reaffirmed its 'CRISIL B+/Stable' rating on the long-
term bank loan facilities of Angayarkkanni Enterprises.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 1.5 CRISIL B+/Stable (Reaffirmed)
Working Capital
Term Loan 18.5 CRISIL B+/Stable (Reaffirmed)
The rating continues to reflect the firm's modest scale of
operations, large working capital requirement, and below-average
financial risk profile because of weak debt protection metrics
and high gearing. These weaknesses are partly offset by its
proprietor's extensive experience in the civil construction
industry.
Key Rating Drivers & Detailed Description
Weaknesses
* Modest scale of operations: The firm's modest scale, indicated
by operating income of INR11.2 crore in fiscal 2016, will
continue to constrain its market position, bargaining power with
creditors, and ability to bid for large projects.
* Large working capital requirement: The firm had high gross
current assets of 456 days as on March 31, 2016, driven by large
inventory and receivables of 324 and 159 days, respectively.
* Below-average financial risk profile: The financial risk
profile is constrained by high gearing of 2.53 times as on March
31, 2016. Debt protection metrics remain weak, with interest
coverage ratio at 1.38 times for fiscal 2016.
Strength
* Extensive experience of proprietor: The firm will benefit from
its proprietor's experience of more than 25 years in the civil
construction industry over the medium term.
Outlook: Stable
CRISIL believes AE will continue to benefit from its proprietor's
extensive industry experience. The outlook may be revised to
'Positive' if revenue and profitability increase, and capital
structure improves. The outlook may be revised to 'Negative' if
the financial risk profile deteriorates because of reduced
revenue and profitability, or large debt-funded capital
expenditure, or if principal customers delay payments.
AE, set up in 1988, is a proprietorship firm established by Mr.
Kannan. The firm undertakes civil works such as construction of
roads, bridges, canals, and water tanks for government agencies.
BHAGABATI STORE: CRISIL Ups Rating on INR12.5MM Cash Loan to B+
---------------------------------------------------------------
CRISIL has upgraded its rating on the long-term bank facility of
Bhagabati Store to 'CRISIL B+/Stable' from 'CRISIL D'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 12.5 CRISIL B+/Stable (Upgraded
from 'CRISIL D')
The rating upgrade reflects prepayment of its housing loans for
next 10 months in February 2017. CRISIL had earlier downgraded
the rating on account of CRISIL's understanding of delays in term
loans which was actually a housing loan in the name of
proprietor. However on account of pre-payment of housing loans of
next 10 months EMI, firm's liquidity has improved. There is also
proposed takeover of bank limits which is expected to improve
liquidity on account of enhancement in its working capital limits
to INR18 crore from existing INR14 crore. The firm is expected to
pre-pay the entire housing loan in fiscal 2017 on the back of
improved liquidity.
Analytical Approach
CRISIL has treated 75% of interest 'free unsecured loans in
business as on March 31, 2016 as equity while 25% is treated as
debt since the unsecured loans are from promoters and is expected
to continue to remain in the business.
Key Rating Drivers & Detailed Description
Weaknesses
* Exposure to risks relating to limited bargaining power with
principal: BGS is authorised distributor products for Hindustan
Unilever Limited (HUL; 'CRISIL AAA/Stable') and Dabur India
Limited (Dabur; 'CRISIL AAA/Stable/CRISIL A1+'). BGS as a
distributor does not have significant bargaining power as the
pricing decisions are taken by the principals. BGS is also
exposed to competition from its principals, as they supply
products directly to some large customers in the firm's area of
operations.
* Below-average financial risk profile: Networth was modest at
INR6.6 crore. However interest coverage ratio was weak at 1.5
times. Capital structure was average as seen by total outside
liabilities to adjusted networth ratio of 2.3 times as on
March 31, 2016.
Strengths
* Extensive experience of the proprietor and established
relationship with principals: BGS's operations are looked after
by its proprietor, Mr. Ramesh Chandra. Mr. Chandra has an
extensive experience of around 31 years as a HUL distributor
through BGS. Over these years, the proprietor has also forged
strong relationship with its clientele which comprises 3500
customer including around 1100 wholesalers. Furthermore, the
proprietor has also obtained distributorship of Dabur in 2014,
resulting in improvement in its business risk profile.
* Efficient working capital management: BGS' business has
efficient working capital management, as reflected in gross
current asset (GCA) days of 61 days as on March 31, 2016 on
account of low inventory levels and receivable days of around 17
days and 43 days.
Outlook: Stable
CRISIL believes that BGS will maintain its business risk profile
over the medium term backed by the proprietor's extensive
industry experience and diverse and established customer base and
distribution network. The outlook may be revised to 'Positive' if
the liquidity improved on account of higher-than-expected
accruals, or with fresh capital infusion. Conversely, the outlook
may be revised to 'Negative' if the liquidity weakens on account
of decline in revenues or profitability or stretched working
capital or due to a large, debt-funded capital expenditure
programme.
Established in 1986, BGS is a proprietorship firm of Mr. Ramesh
Chandra Sahoo. The firm is an authorised distributor cum stockist
of HUL in Puri (Odisha) since 1896. Since 2014, BGS also obtained
the distributorship of Dabur for the same region
Net profit was INR50.4 lakh on net sales of INR107.97 crore in
fiscal 2016, against INR37.03 lakh and INR100.66 crore,
respectively, in fiscal 2015.
BHUVAN WHEELS: CRISIL Reaffirms B- Rating on INR6MM Cash Loan
-------------------------------------------------------------
CRISIL has reaffirmed its rating on the long-term bank facility
of Bhuvan Wheels Pvt Ltd at 'CRISIL B-/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 6 CRISIL B-/Stable (Reaffirmed)
The rating continues to reflect a weak operating performance
leading to losses and stretched liquidity as indicated by almost
full bank limit utilisation. However, receipt of a part of the
advance extended to affiliates during the current fiscal has
supported the liquidity to some extent. The financial risk
profile remains weak due to loss-making operations that led to an
erosion in the networth.
Key Rating Drivers & Detailed Description
Weakness
* Weak financial risk profile and stretched liquidity: The net
worth has been eroded on account of continuous losses, the
capital structure is leveraged, and the debt protection metrics
is weak. The losses led to very high reliance on bank lines and
thus to a strain on liquidity. However, in fiscal 2017, the
company has received about INR2.2 crore of advances that had been
earlier extended to affiliates; has partly supported the
liquidity.
* Subdued operating performance: Revenue was INR58.86 crore and
operating margin was 1.90% in fiscal 2016. Revenue growth is
expected to remain muted in fiscal 2017 and though margin will
improve slightly, a net loss is likely due to high finance cost.
Improvement in sales and profitability remains a key monitorable.
Strengths
* Extensive experience of the promoters in the automobile (auto)
dealership business and association with Hyundai Motor India Ltd
(HMIL; rated 'CRISIL A1+'): The promoters have an experience of
more than a decade in this business. They were initially involved
in setting up an auto dealership business for Chevrolet passenger
cars through another group entity; they received the dealership
for Hyundai passenger cars in Aurangabad, Maharashtra, in October
2013. The company opened another showroom in Jalna, Maharashtra,
in fiscal 2016.
Outlook: Stable
CRISIL believes BWPL will continue to benefit from the extensive
industry experience of its promoters and association with HMIL.
The outlook may be revised to 'Positive' in case of substantial
improvement in sales and profitability, leading to sizeable net
cash accruals. The outlook may be revised to 'Negative' if the
financial risk profile, particularly liquidity, weakens further
because of slower ramp-up in sales, lower profitability, large
working capital requirement, or substantial, debt-funded capital
expenditure.
BWPL was incorporated in 2013, promoted by Mr. Subhash Zambad and
his family. It is an authorised dealer of Hyundai passenger cars
in Aurangabad. The company currently operates one showroom and a
workshop each, in Aurangabad and Jalna.
Net loss was INR1.65 crore on net sales of INR56.80 crore in
fiscal 2016, against a net loss of INR2.47 crore on net sales of
INR49.24 crore in fiscal 2015.
CLASSIC FOODS: Ind-Ra Assigns 'B+' Long-Term Issuer Rating
----------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Classic Foods
(CF) a Long-Term Issuer Rating of 'IND B+'. The Outlook is
Stable. The instrument-wise rating actions are:
-- INR68 mil. Fund-based facilities assigned with INR68 IND
B+/Stable/IND A4 rating; and
-- INR3.4 mil. Long-term loans assigned with IND B+/Stable
rating
KEY RATING DRIVERS
The ratings reflect CF's weak credit profile. In FY16 revenue
was INR287 million (FY15: INR208 million); revenue grew at a CAGR
of 26.43% over FY14-FY16 due to increase in orders. Net leverage
(total adjusted net debt/operating EBITDAR) deteriorated to 6.9x
in FY16 (FY15: 4.2x) and gross interest coverage (operating
EBITDA/gross interest expense) deteriorated to 1.6x (FY15: 1.9x)
due to increase in debt. EBITDA margin remained volatile and
fluctuated between 3.0% and 4.5% during FY14-FY16 on account of
fluctuating raw material prices.
The firm has indicated revenue of INR204 million in 8MFY17
(unaudited).
The ratings factor in the firm's tight liquidity position with
the fund-based facilities being utilized at an average of 99.51%
over the 12 months ended December 2016. The firm has stretched
cash conversion cycle which deteriorated in FY16 to 70 days
(FY15: 21 days).
The ratings, however, draw support from promoter have more than a
decade long experience in the trading line of business.
RATING SENSITIVITIES
Positive: Significant increase in scale and profitability leading
to sustained improvement in credit metrics could be positive for
the rating.
Negative: A decline in the revenue and operating profitability
resulting in significant deterioration in the credit metrics
could be negative for the ratings.
COMPANY PROFILE
Set up in 2000, CF is engaged in trading of agriculture products
mainly nutmeg, nutmeg mace and pepper. Mrs. Mini Dominic is the
proprietor of the firm and day-to-day operations are managed by
Mr. P.P Dominic along with his accounts team. CF deals with wide
range of products in agricultural business.
DATTA MEGHE: CRISIL Reaffirms 'B' Rating on INR7MM Cash Loan
------------------------------------------------------------
CRISIL has reaffirmed its 'CRISIL B/Stable/CRISIL A4' ratings on
the bank facilities of Datta Meghe Institute of Medical Sciences.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 16 CRISIL A4 (Reaffirmed)
Cash Credit 7 CRISIL B/Stable (Reaffirmed)
Loan Against
Property 5 CRISIL B/Stable (Reaffirmed)
The ratings continue to reflect the trust's below-average
financial risk profile because of a weak capital structure; and
exposure to intense competition in, and regulatory risks
associated with, the education sector. These weaknesses are
partially offset by its established regional position, its
trustee's extensive industry experience, and its diversified
revenue.
Key Rating Drivers & Detailed Description
Weaknesses
* Exposure to intense competition in the education sector: The
education industry in India is intensely competitive, with many
small and niche colleges competing with bigger colleges and
universities. Maharashtra, especially, has a large number of
colleges offering a wide variety of engineering, medical, dental,
and other professional education courses, resulting in intense
competition for DMIMS.
* Regulatory risks associated with the education sector: Courses
offered by DMIMS have to comply with operational and
infrastructure norms laid of regulatory bodies such as Medical
Council of India, Dental Council of India, Indian Nursing
Council, and Central Council of Indian Medicine. Setting up a new
institute requires approval from the All India Council for
Technical Education, state government, and governor of the state
in which the institute is being established.
* Below-average financial risk profile: The financial risk
profile is constrained by high gearing of 19.7 times and small
networth of INR4.44 crore as on March 31, 2016.
Strengths
* Established regional position supported by trustee's extensive
industry experience: DMIMS was established in 1988 by Mr. Datta
Meghe, who has experience of over 30 years in the education
industry. The trust has seven institutes offering graduate and
postgraduate courses in medicine, pharmacy, engineering, and
nursing. It also runs a super-speciality hospital with 1170 beds
at Sawangi in Wardha in Maharashtra. DMIMS has regularly
undertaken capex to expand capacity and add courses, which helped
increase income by 18% in the five years ended March 31, 2016.
Established position in Vidarbha has led to healthy occupancy at
its educational institutes and hospital, reflected in revenue of
INR201.36 crore in fiscal 2016.
* Diverse revenue streams: DMIMS operates seven educational
institutes. It also runs a super-speciality hospital and 15
hostels in Wardha. The diverse revenue streams lend stability to
cash flow.
Outlook: Stable
CRISIL believes DMIMS will continue to benefit from its
established regional position in the education sector. The
outlook may be revised to 'Positive' if revenue and surplus
increase significantly, leading to high cash accrual. The outlook
may be revised to 'Negative' if accrual is low because of reduced
occupancy at the trust's institutions or hospital, or in case of
large, unanticipated debt-funded capital expenditure, leading to
deterioration in its financial risk profile, particularly
liquidity.
Established in 1988, DMIMS is a public trust registered under the
Bombay Public Trust Act, 1950. It offers medical, engineering,
and nursing courses at its nine institutes in Sawangi, and
operates a teaching hospital.
For fiscal 2016, DMIMS's profit after tax (PAT) was INR39 lakh on
total sales of INR201.36 crore, against a PAT of INR205 lakh on
total sales of INR175.69 crore in fiscal 2015.
DHIREN DIAMONDS: CRISIL Assigns B+ Rating to INR16MM Loan
--------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-
term bank facility of Dhiren Diamonds.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Export Packing Credit 16 CRISIL B+/Stable
The rating reflects the firm's large working capital requirement
and modest scale of operations in an intensely competitive
industry, and its below-average financial risk profile because of
high total outside liabilities to adjusted networth (TOLANW)
ratio, and modest debt protection metrics. These weaknesses are
partially offset by its promoters' extensive experience in the
diamond industry, and its established customer relationships.
Key Rating Drivers & Detailed Description
Weaknesses
* Modest scale of operations in an intensely competitive
industry: The gems and jewellery industry in India is highly
fragmented and dominated by the unorganised sector as it is not
capital intensive. The firm's revenue was modest, at INR72.6
crore in fiscal 2016.
* Large working capital requirement: Gross current assets were at
308 days as on March 31, 2016, mainly on account of substantial
inventory.
* Below-average financial risk profile: DD's TOLANW ratio was
high, at 3 times, as on March 31, 2016, and interest coverage
ratio was modest, at 1.5 times, in fiscal 2016.
Strength
* Promoters' extensive industry experience and established
customer relationships: The promoters have been in the diamond
business since the 1990s. Their experience has helped the firm
establish healthy relationships with suppliers and customers.
Outlook: Stable
CRISIL believes DD will continue to benefit from its promoters'
extensive industry experience and its established relationships
with customers. The outlook may be revised to 'Positive' if
profitability improves, leading to an increase in cash accrual,
or if partners infuse capital in the business, leading to a
better capital structure. The outlook may be revised to
'Negative' if there is a steep decline in profitability, or
significant deterioration in capital structure because of a
stretch in working capital cycle or additional long-term debt.
DD was set up in 1992 by Mr. Dahyabhyai M Dhamelia and his
friends as a partnership firm. The current partners of the firm
are Mr. Dahyabhyai M Dhamelia, Mr. Arvindbhai Dhamelia, Mr.
Hitendra Dhamelia, Mr. Chintan Dhamelia, Mr. Kishan Dhamelia, and
Mr. Rasikbhai Dhamelia.
The firm manufactures large diamonds, and specialises in
certified and non-certified polished diamonds of 20 cents to 5
carats. Its head-office is in Mumbai and manufacturing unit is at
Surat, Gujarat.
Profit after tax (PAT) was INR0.39 crore on net sales of INR72.57
crore in fiscal 2016, against PAT of INR0.52 crore on net sales
of INR90.30 crore in fiscal 2015.
Status of non-cooperation with previous CRA: DD has not
cooperated with CARE Ratings which was suspended its rating on
the firm through a release dated July 21, 2016. The reason
provided by CARE Ratings is non-furnishing of information
required for monitoring of ratings.
ESSAR STEEL: Banks to Defer Debt Recast, to Take INR44,000cr Hit
----------------------------------------------------------------
The Times of India reports that banks are set to take a hit of
hundreds of crores in the March quarter as the biggest loan
restructuring of Essar Steel would be pushed to next fiscal year
since none of the bankers want to risk the prospect of being
questioned by investigative authorities few years down the line.
In January, bankers led by the State Bank of India informally
agreed to recast the INR44,000 crore loans of Essar Steel that
has been struggling to repay for over a year now. However, within
days of this development, the Central Bureau of Investigation
arrested five IDBI Bank officials, including former CMD Yogesh
Agarwal, for lending to the now-defunct Kingfisher Airlines, TOI
recalls.
"We were hopeful of sealing the deal by March-end but with the
arrest of IDBI officials, lenders have developed cold feet. Now
banks will go ahead with debt recast of any company only if the
package is endorsed by an external committee," said two senior
bank officials who did not want to be named, TOI relays.
TOI says the arrests of IDBI officials shocked the banking
industry leading to paralysis in decision making.
"This is particularly so because Kingfisher is tagged as wilful
defaulter for not repaying INR9,000 crore of loans and its
promoter Vijay Mallya fled the country in March 2016. The bank
suffered huge losses and the bankers are now behind bars," the
report quotes a bank official as saying.
According to the report, bankers have asked the Reserve Bank of
India to enhance the scope of the overseeing committee to vet all
types of debt recast. As of now, the overseeing committee (OC)
comprises eminent experts who will independently review the
processes involved in preparation of resolution plan of S4A or
Scheme for Sustainable Structuring of Stressed Assets. Essar
Steel's debt recast is outside S4A and hence outside the purview
of the overseeing committee, the report states.
A consortium of 17 lenders has already classified the Essar Steel
loan as sub-standard in the quarter ending March 2016, says TOI.
Any delay in restructuring the loans now would mean that banks
would have to set aside more money as provisions in the fourth
quarter.
The report notes that the banks have to set aside 15% in the
first year as provisions for bad loans which would increase to
25% in the second year. Beginning March 2017 quarter, banks would
have set aside 25% as provisions for Essar Steel.
"The proposed decision of the Banks to refer all restructuring to
the overseeing committee (OC) for final approval is a policy
initiative for all cases that are being taken up by the banks,"
the report quotes Essar CFO V Ashok as saying.
"Bankers are willing to take a hit of hundreds of crores but do
not want to take decisions on big-ticket loan recasts with the
fear of being questioned in future by investigative authorities,"
said a senior bank official, adds the report.
After two years of negotiations, bankers and Essar Steel finally
arrived at a mutually acceptable debt recast package which
includes promoters, the Ruias, losing control of the company,
according to the report. Close to 25% would be sold to Farallon
Capital for INR1,800-2,000 crore and banks would convert INR2,200
crore debt into equity for a 30% stake, the report discloses.
Incorporated in 1976, Essar Steel India Ltd. is a part of
the Essar Group and is having 10 MTPA integrated steel
manufacturing facilities at Hazira, Gujarat and iron ore
beneficiation and pelletisation facilities in Paradeep, Odisha
(12 mtpa) and Vizag, Andhra Pradesh (8 mtpa). The company also
owns and operates two iron ore slurry pipelines -- one each in
Odisha (Dabuna to Paradip) and Andhra Pradesh (Kirandul-Vizag),
which transport the iron ore slurry from the beneficiation plant
(located near the iron ore mines in Dabuna and Kirandul) to the
pellet plant (located near the Paradip and Vizag ports). A large
portion of the iron ore pellets produced are intended for captive
consumption by ESIL's steel plant at Hazira for cost
optimization.
G. P. TIMBER: CRISIL Reaffirms 'B' Rating on INR3MM Cash Loan
-------------------------------------------------------------
CRISIL has reaffirmed its 'CRISIL B/Stable/CRISIL A4' ratings on
the bank facilities of G. P. Timber.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 3 CRISIL B/Stable (Reaffirmed)
Letter of Credit 7 CRISIL A4 (Reaffirmed)
The ratings continue to reflect the firm's modest scale of
operations in the highly fragmented timber trading business and
its large working capital requirement. These weaknesses are
partially offset by its proprietor's extensive industry
experience.
Key Rating Drivers & Detailed Description
Weaknesses
* Modest scale of operations in the highly fragmented timber
trading business: The firm's modest scale, reflected in revenue
of INR29.9 crore in fiscal 2016, and the intense competition in
the highly fragmented timber industry restrict bargaining power
with customers and suppliers.
* Large working capital requirement: The firm had gross current
assets of 228 days as on March 31, 2016, on account of
substantial receivables of 164 days and inventory of 52 days.
Strength
* Proprietor's extensive industry experience: Proprietor Mr.
Premjibhai Ramjibhai Patel has experience of over two decades in
the timber trading business, which has helped the firm establish
relationships with major suppliers and customers, and strengthen
its market position.
Outlook: Stable
CRISIL believes GP Timber will continue to benefit from its
proprietor' extensive industry experience. The outlook may be
revised to 'Positive' if GP Timber's revenue and operating
profitability increase considerably, leading to higher cash
accrual, or if the proprietor infuses capital, leading to a
better financial risk profile. The outlook may be revised to
'Negative' if revenue or operating margin falls substantially, or
if the financial risk profile, particularly liquidity, weakens
because of significant increase in working capital requirement.
Set up in 1990 by Mr. Premjibhai Ramjibhai Patel, GP Timber
processes and trades timber. It has a saw mill in Gandhidham,
Gujarat, with sawing capacity of 72-80 cubic meter of timber per
day.
Its profit after tax (PAT) was INR0.18 crore on net sales of
INR29.9 crore in fiscal 2016, vis-a vis INR0.17 crore and INR29
crore, respectively, in fiscal 2015.
GOEL FOOD: CRISIL Assigns 'B+' Rating to INR5MM Cash Loan
---------------------------------------------------------
CRISIL has revoked the suspension of its ratings on the bank
facilities of Goel Food Product and assigned its 'CRISIL
B+/Stable' ratings to the facilities.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 5 CRISIL B+/Stable (Assigned;
Suspension Revoked)
Proposed Long Term 1 CRISIL B+/Stable (Assigned;
Bank Loan Facility Suspension Revoked)
Term Loan 4 CRISIL B+/Stable (Assigned;
Suspension Revoked)
CRISIL had, in its rating rationale dated December 5, 2016,
suspended the ratings since GFP had not provided information
necessary for a rating review. It has now shared the requisite
information.
The rating reflects GFP's modest and working capital intensive
operations in highly fragmented rice industry. The rating also
factors in GFP's small net worth. These rating weaknesses are
partially offset by promoter's extensive experience in rice
milling industry.
Analytical Approach
For arriving at the rating, CRISIL has treated the unsecured loan
of INR0.73 crores as neither debt nor equity as it is expected to
remain in the business over the medium term.
Key Rating Drivers & Detailed Description
Weaknesses
* Large working capital requirements: GFP's operations are
working capital intensive as indicated by estimated gross current
asset of 60 days as on March, 2017. This is primarily on account
of high inventory level of 50-60 days.
* Modest scale of operations: GFP has modest scale of operations
as indicated by modest revenues of INR25 crores in 2015-16.
CRISIL believes that the moderate scale of operations will
continue to constrain the business risk profile over the medium
term.
Strength
* Extensive experience of promoters in rice industry: GRP
benefits from the extensive experience of over 25 years in rice
milling industry. Over the years, the management has established
longstanding relationship with the customers and suppliers.
Outlook: Stable
CRISIL believes GFP will maintain its business risk profile
backed by the promoter's extensive industry experience. The
outlook may be revised to 'Positive' if the company substantially
scales up its operations while sustaining profitability leading
to an improvement in its financial risk profile. Conversely, the
outlook may be revised to 'Negative' in case of lower-than-
expected cash accrual, stretch in the working capital cycle, or
if GFP undertakes any larger-than-expected, debt-funded capital
expenditure leading to weakening of the financial risk profile.
GFP was set up in 2014 as a partnership firm by Mr. Tarsem Kumar
Goel, Ms. Anita Rani, Ms. Mamta Rani, and Ms. Neelam Rani. The
firm is engaged in milling and sorting of basmati rice. GFP is
based in Kaithal (Haryana), and its plant has a milling capacity
of 3 tonnes per hour.
GFP had a profit after tax of INR0.02 crore on sales of INR23.3
crore in fiscal 2016, vis-a-vis INR0.01 crore and INR8.08 crore,
respectively, in fiscal 2015.
GSM PLUS: CRISIL Reaffirms 'B+' Rating on INR5.5MM LT Loan
----------------------------------------------------------
CRISIL has reaffirmed its ratings at 'CRISIL B+/Stable/CRISIL A4'
rating on the bank facilities of GSM Plus India.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Packing Credit 6 CRISIL A4 (Reaffirmed)
Proposed Long Term
Bank Loan Facility 5.5 CRISIL B+/Stable (Reaffirmed)
Term Loan 0.5 CRISIL B+/Stable (Reaffirmed)
The ratings reflect the modest scale of operations in a
fragmented industry, susceptibility of operating profitability to
raw material price volatility and forex rates and average
financial risk profile. The rating also factors in the large
working capital requirements. These weaknesses are mitigated by
the extensive industry experience of the promoters and
established relationship with the customers.
Key Rating Drivers & Detailed Description
Weaknesses
* Modest scale of operations in intensely competitive textile
industry: GSM has modest scale of operations as reflected in
estimated operating income of INR42 crore during fiscal 2017. It
is exporting its products mainly to USA, Europe where it faces
intense competition, both from global players such as China and
Turkey, as well as from numerous small Indian companies.
* Susceptibility of operating margin to raw material price
volatility and foreign exchange (forex) rates: The main raw
material constitutes of cotton yarn, prices of which are highly
volatile in nature rendering the margins susceptible to
fluctuation in raw material prices. The margins were 2.8-4.8%
over the three years through March 2016. Moreover, the firm is
exposed to high forex risk as 100% of its revenue is through
exports. The firm does not hedge its forex receivables and is
exposed to any adverse fluctuation in forex rates.
* Average financial risk profile: Modest networth (estimated at
INR5.5 crore as on March 31, 2017) and subdued debt protection
metrics (net cash accruals to total debt [NCATD] and interest
cover of 0.09 times and 2.24 times respectively estimated for
fiscal 2017) reflect average financial risk profile.
* Large working capital requirement: Gross current assets of 118
days as on March 31, 2016, driven by sizeable debtors and
inventory, reflect working capital-intensive operations.
Strength
* Extensive experience of promoters and established relations
with customers: Over their 40 years' experience, the promoters
built strong relationship with customers and suppliers. Hence,
revenue reported a compound annual growth rate of about 31% over
the five years ended March 31, 2017.
Outlook: Stable
CRISIL believes GSM will continue to benefit over the medium term
from the promoters' experience and established relationship with
customers. The outlook may be revised to 'Positive' if
significant and sustained improvement in scale of operations and
profitability leads to sizeable cash accrual. Conversely, the
outlook may be revised to 'Negative' if decline in revenue and
profitability, unanticipated, large, capital expenditure
programme, or stretch in working capital cycle weakens liquidity.
Set up in 2009 as a partnership firm by Mr. G Boominathan, Ms G
Savriti, and Mr. N Gurusamy, GSM manufactures and exports terry
towels and towelling material. Its facility is in Madurai, Tamil
Nadu.
For fiscal 2016, GSM made a profit after tax (PAT) of INR48.22
lakh on total income of INR34.7 crore, against a PAT of INR42.58
lakh on total income of INR26.5 crore for the previous fiscal.
GURU NANAK: Ind-Ra Assigns 'BB-' Long-Term Issuer Rating
--------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Guru Nanak
International Private Limited (GNIPL) a Long-Term Issuer Rating
of 'IND BB-'. The Outlook is Stable. The instrument-wise rating
actions are:
-- INR115 mil. Fund-based working capital limits assigned with
IND BB-/Stable/IND A4+ rating;
-- INR10 mil. Proposed fund based working capital limits *
assigned with provisional IND BB-/Stable/Provisional
IND A4+ rating
* The ratings are provisional and the final rating will be
assigned subject to execution of sanction letter for the above
facilities.
KEY RATING DRIVERS
The ratings reflect GNIPL's short track record of operations,
moderate credit metrics and elongated working capital cycle.
FY16 financials indicate net leverage (Ind-Ra adjusted net
debt/operating EBITDAR) of 4.42x (FY15: 4.92x), interest cover
(operating EBITDA/gross interest expense) of 1.71x (1.55x) and
working capital cycle of 183 days (168 days).
The ratings also factor in GNIPL's tight liquidity position as
evident from its 99.87% average utilization of the working
capital limits for the 12 months ending November 2016.
The ratings, however, are supported by GNIPL's moderate scale of
operations with revenue of INR384.79 million in FY16 (FY15:
INR381 million) and comfortable EBITDA margins of 9.05% (8.46%).
The ratings are further supported by the promoters' experience of
more than two decades in the textile industry.
RATING SENSITIVITIES
Negative: A significant decline in the revenue coupled with
deterioration in the overall credit metrics shall lead to
negative rating action.
Positive: An improvement in the revenue along with a significant
improvement the credit metrics will be positive for the ratings.
COMPANY PROFILE
GNIPL was incorporated in 2012, promoted by Mr. Tarsem Lal Batra,
Mr. Anuj Batra, Mr. Atul Batra and Ms. Sakshi Batra. GNIPL sells
women's apparels (bridal wear) at its showroom in Rajouri Garden
(Delhi). The company sells its products under the brand name
'Frontier Bazar'. The company also exports its products to
wholesalers based in the US, Canada and the UK.
JAIDHAR CONSTRUCTIONS: CRISIL Assigns B Rating to INR4.10MM Loan
----------------------------------------------------------------
CRISIL has assigned its rating on the bank facilities of Jaidhar
Constructions to 'CRISIL B/Stable/CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 4.03 CRISIL B/Stable
Proposed Long Term
Bank Loan Facility 1.07 CRISIL B/Stable
Bank Guarantee 0.80 CRISIL A4
Cash Credit 4.10 CRISIL B/Stable
The rating reflect the firm's modest scale of operation in the
intensely competitive and cyclical ready-mix concrete business,
and working capital-intensive operations. These weaknesses are
partially offset by the extensive experience of promoters in
ready-mix concrete business.
Key Rating Drivers & Detailed Description
Weaknesses
* Modest scale of operation in the intensely competitive and
cyclical ready-mix concrete business: With an operating income of
INR9.84 crore in 2015-16 (refers to financial year, April 1 to
March 31), scale remains small in the intensely competitive
ready-mix concrete segment that also has low product
differentiation.
* Working capital intensive nature of operation: Jaidhar's
business is highly working-capital-intensive, as reflected in its
gross current asset (GCA) days of 190 of sales as on March 31,
2016; the GCA days were at a similar level in the past. The high
GCA days are driven mainly by the firm's large receivables of 171
days as on March 31, 2016. CRISIL believes that Jaidhar's GCA
days will remain high, resulting in large working capital
requirements for the firm, over the medium term.
Strength
* Extensive experience of promoters in ready-mix concrete
business: The promoters of the firm have extensive experience in
the RMC industry. CRISIL believes that the extensive experience
of the promoters and established relationships with its suppliers
and customers will help the firm to maintain its business risk
profile over the medium term.
Outlook: Stable
CRISIL believes that Jaidhar will benefit over the medium term
from its promoters' extensive experience in the construction
material industry. The outlook may be revised to 'Positive' if
the company reports a significant growth in its revenues and
profitability while improving its working capital cycle.
Conversely, the outlook may be revised to 'Negative' in case the
significant decline in revenues and margins or further
lengthening of its working capital cycle leading to pressure on
Liquidity and financial risk profile.
Established in 2008, Jaidhar Constructions (Jaidhar) is a
partnership firm based out Secunderabad and engaged in
manufacturing of readymix concrete (RMC). Jaidhar is promoted by
Mr. N Chandrashekhar Rao.
Its profit after tax (PAT) was INR0.10 crore on net sales of
INR9.84 crore in fiscal 2016, against INR0.06 crore and INR9.18
crore, respectively, in fiscal 2015.
KARNATAKA TURNED: CRISIL Reaffirms 'B' Rating on INR5.7MM Loan
--------------------------------------------------------------
CRISIL's rating on the bank facilities of Karnataka Turned
Components Private Limited continue to reflect its small scale of
operations and dependence on key customers.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Overdraft 3 CRISIL B/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility 5.7 CRISIL B/Stable (Reaffirmed)
Term Loan 4.3 CRISIL B/Stable (Reaffirmed)
The rating also factors in the susceptibility of KTCPL's revenue
and operating profitability to slowdown in the automobile sector.
These weaknesses are partially offset by the extensive experience
of promoters in the precision engineering components industry,
and the company's average financial risk profile, marked by
moderate networth, and adequate debt protection metrics.
Analytical Approach
Unsecured loan from promoters has been treated as neither debt
nor equity (NDNE).
Key Rating Drivers & Detailed Description
Strengths
* Extensive experience of promoters and established relations
with reputed customers:
The six decades of presence in the industry has helped the
promoters establish healthy relationship with suppliers and
customers. It has an established market position and a reputed
customer base, resulting in regular orders from Shakti Precision
Components Pvt Ltd and Bucher Hydraulics Pvt Ltd and Bosch Ltd -
for whom KTCPL is a preferred vendor. The ability to meet the
customer's stringent quality requirements and maintain delivery
deadlines has enabled KTCPL to obtain consistent orders. Hence
benefits from the promoters' extensive experience and established
customer relationships are expected to support business risk
profile.
* Funding support from promoters: The promoters have extended
unsecured loans to support working capital requirements as and
when needed. The ability of the promoters to infuse funds when
required enhances the financial flexibility of the company.
Weaknesses
* Working-capital-intensive operations: Operations are expected
to remain moderately working capital intensive over the medium
term - gross current assets were 127 days as on March 31, 2016,
primarily due to elongation in debtors. Over the past 12 months
ended December, 2016, bank limit has been utilised at 75%.
* Susceptibility of operating margin to cyclicality in automobile
industry- KTCPL derives all its revenues from the automobile
industry and thus remains exposed to cyclicality in the end-user
industry. Over the past five years through March 2016, margin has
been at 4-8% due to fluctuations in the topline and high overhead
costs. Margin is expected to be moderate at 7-8% over the medium
term. CRISIL, however, believes KTCPL's profitability over the
medium term will remain susceptible to the inherent cyclicality
in the auto industry.
Outlook: Stable
CRISIL believes KTCPL will continue to benefit from the extensive
experience of its promoters and established customer
relationships. The outlook may be revised to 'Positive' if
increase in scale of operations and profitability, improves
business risk profile. The outlook may be revised to 'Negative'
if low cash accrual or stretch in working capital cycle weakens
liquidity.
KTCPL, incorporated in 1960 in Bengaluru and promoted by Mr. Raj
Kumar and family, manufactures precision engineering components.
In fiscal 2016, KTCPL reported net sales of Rs.18.05 crore and
net loss of Rs.1.46 crore against Rs.19.20 crore and Rs.3.40
crore, respectively, for fiscal 2015.
LENZ CERAMIC: Ind-Ra Assigns 'BB' Long-Term Issuer Rating
---------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Lenz Ceramic
Private Limited (LCPL) a Long-Term Issuer Rating of 'IND BB'.
The Outlook is Stable. The instrument-wise rating actions are:
-- INR80 mil. Fund-based working capital limits assigned with
IND BB/Stable/IND A4+ rating;
-- INR12.59 mil. Term loan assigned with IND BB/Stable rating
-- INR25 mil. Non fund based limits assigned with IND A4+
rating
KEY RATING DRIVERS
The ratings are constrained by LCPL's small scale of operations
as evident from the top line of INR312.06 million in FY16 (FY15:
INR401.27 million) and its presence in a highly fragmented and
competitive industry.
The ratings are further constrained by the tight liquidity
position of the company as reflected in its average working
capital utilization of around 99.59% during the 12 months ended
January 2017.
The ratings, however, are supported by the three decades of
experience of LCPL's promoters in the tiles manufacturing
business, the company's strong relationships with its customers
and suppliers, and the improvement in operating EBITDA margins to
14.78% in FY16 (FY15: 12.19%). Margins improved due to a fall in
its manufacturing cost in FY16.
The ratings are further supported by the comfortable credit
metrics of the company; gross interest coverage (operating
EBITDA/gross interest expense) stood at 2.30x in FY16 (FY15:
2.34x) and net financial leverage (total adjusted net
debt/operating EBITDA) was at 2.44x (2.62x).
RATING SENSITIVITIES
Positive: A significant improvement in the top line along with
improvement in the EBITDA margins could be positive for the
ratings.
Negative: Any deterioration in the EBITDA margins leading to
deterioration in the credit metrics could lead to a negative
rating action.
COMPANY PROFILE
Incorporated in 2010, LCPL manufactures polished glazed vitrified
tiles (GVT). Earlier, the company was engaged in the
manufacturing of vitrified tiles only but from December 2016, it
started manufacturing polished GVT due to an increase in its
demand in the market. Currently, LCPL is manufacturing GVT tiles
of two sizes 2/2 and 2/4 having wide applications in commercial
as well as residential buildings.
The company is managed by Mr. Ashoknhai Patel, Mr. Babulal
Nayakpara, Mr. Jayendrabhai Sanja and Mr. Jitendrabhai Nayakpara.
The manufacturing facility of LCPL is located at Morbi in
Gujarat.
LINGARD IFMR: Ind-Ra Rates INR12.7MM PTCs-Series A2 Prov. 'BB+'
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Lingard IFMR
Capital 2017 (an ABS transaction) provisional ratings as:
-- INR270.4 mil. Pass through certificates (PTCs)-Series A1
assigned with Provisional IND A-(SO)/Stable rating;
-- INR12.7 mil. PTCs-Series A2 assigned with Provisional IND
BB+(SO)/Stable rating
The final ratings are contingent upon the receipt of final
documents conforming to the information already received.
The microfinance loan pool to be assigned to the trust has been
originated by S.M.I.L.E. Microfinance Limited (SMILE).
KEY RATING DRIVERS
The provisional ratings are based on the origination, servicing,
collection and recovery expertise of SMILE, the legal and
financial structure of the transaction and the credit enhancement
(CE) provided in the transaction. The provisional rating of
Series A1 and Series A2 PTCs addresses the timely payment of
interest on monthly payment dates and the ultimate payment of
principal by the final maturity date of Dec. 19, 2018, in
accordance with transaction documentation.
The provisional rating of Series A2 PTCs addresses the timely
payment of interest on monthly payment dates only after the
complete redemption of Series A1 PTCs and the ultimate payment of
principal by the final maturity date of Dec. 19, 2018, in
accordance with transaction documentation.
The transaction benefits from the internal CE on account of
excess interest spread, subordination and over-collateralisation.
The levels of over-collateralisation available to Series A1 and
Series A2 PTCs are 15% and 11% of the initial pool principal
outstanding (POS), respectively. Total excess cash flow or
internal CE available to Series A1 and A2 PTCs is 22.9% and
18.4%, respectively, of the initial POS. The transaction
benefits from the external CE of 4.50% of the initial POS in the
form of fixed deposits in the name of the originator with a lien
marked in favor of the trustee. The collateral pool to be
assigned to the trust at par had an initial POS of INR318.2
million, as of the pool cut-off date of Feb. 5, 2017.
The external CE will be used in case of a shortfall in a) the
complete redemption of all Series of PTCs on the final maturity
date, b) the monthly interest payment to Series A1 investors c)
the monthly interest payment of Series A2 investors after the
complete redemption of Series A1 investors and d) any shortfall
in Series A2 maximum payout on the Series A2 final maturity date.
RATING SENSITIVITIES
As part of its analysis, Ind-Ra built a pool cash flow model
based on the transaction's financial structure. The agency
analyzed historical data to determine the base values of key
variables that would influence the level of expected losses in
this transaction. The base values of the default rate, recovery
rate, time to recovery, collection efficiency, prepayment rate
and pool yield were stressed to assess whether the level of CE
was sufficient for the current rating levels.
Ind-Ra also conducted rating sensitivity tests. If the
assumptions about the base case default rate worsen by 30%, the
model-implied rating sensitivity suggests that the ratings of
Series A1 PTCs will be downgraded by two notches and Series A2
PTCs ratings will not be impacted.
COMPANY PROFILE
SMILE was incorporated in 2004. The company was registered as a
non-deposit taking NBFC in January 2006, and subsequently
received the MFI licence in May 2015. SMILE is engaged in
providing credit to economically backward, married women through
the joint liability group mechanism. DWM Investments (Cyprus)
Limited infused equity of INR250 million in FY10 and INR250
million in FY11 and acquired a 66.6% stake in the company.
The company's loan portfolio stood at INR3,000 million on Dec.
31, 2016, up 110% yoy. The company classifies any loan as non-
performing asset if it is overdue for over 90 days. In FY16, the
gross non-performing asset (PAR> 90) of SMILE's portfolio dropped
to 0.03% from 0.03% on FY15.
MAKALU TRADING: CRISIL Lowers Rating on INR235MM Loan to 'D'
------------------------------------------------------------
CRISIL has downgraded its ratings on the bank facilities of
Makalu Trading Limited to 'CRISIL D/CRISIL D' from 'CRISIL
BB/Stable/CRISIL A4+'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Letter of Credit 40 CRISIL D (Downgraded from
'CRISIL BB/Stable')
Letter of Credit 235 CRISIL D (Downgraded from
'CRISIL A4+')
The downgrade reflects recent instances of letter of credit (LC)
devolvement on account of cash flow mismatches, leading to
stretched liquidity.
Analytical Approach
For arriving at the ratings, CRISIL has now rated MTL on a
standalone basis, against the previously consolidated approach.
The revision in analytical approach is because of track record of
no financial fungibility with the associates, despite common
promoters.
Key Rating Drivers & Detailed Description
Weakness
* Weak financial risk profile: Significant delay in payments by
key customers has led to stretched liquidity. Furthermore,
operating margin fell to 0.5% in fiscal 2016 from1.1% in fiscal
2015 and 2% in fiscal 2014, weakening the debt protection
metrics.
Strength
* Large scale of operations: The company's large scale is
reflected in revenue of INR944 crore in fiscal 2016 against
INR635 crore in fiscal 2015. Its promoters' extensive experience
in the steel industry and established relationships with key
buyers and suppliers will also support business risk profile.
MTL, incorporated in 1981 by Mr. Vinod Jatia and his family
members, primarily trades in iron and steel products such as hot-
and cold-rolled coils, sheets, and plates, sponge iron lumps, and
fines.
Profit after tax (PAT) was INR9.05 crore on trading income of
INR944.77 crore in fiscal 2016, vis-a-vis INR4.71 crore and
INR635.20 crore, respectively, in fiscal 2015.
MINI DIAMONDS: CRISIL Lowers Rating on INR2MM Cash Loan to 'B'
--------------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facilities
of Mini Diamonds India Limited to 'CRISIL B/Stable' from 'CRISIL
B+/Stable' and reaffirmed its 'CRISIL A4' rating on the short-
term facility.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 2 CRISIL B/Stable (Downgraded
from 'CRISIL B+/Stable')
Export Packing Credit
& Export Bills
Negotiation/Foreign
Bill discounting 6 CRISIL A4 (Reaffirmed)
Proposed Long Term 1 CRISIL B/Stable (Downgraded
Bank Loan Facility from 'CRISIL B+/Stable')
The downgrade reflects MDIL's stretched liquidity, indicated by
inadequate cash accrual to meet debt obligation. Cash accrual was
INR68 lakh in fiscal 2016 and is expected at a similar level over
the medium term, against annual debt obligation of INR1.5 crore.
The promoters are expected to infuse unsecured loans to meet debt
obligation.
Key Rating Drivers & Detailed Description
Weaknesses
* Below-average financial risk profile: MDIL's financial risk
profile is constrained by modest networth of INR5.66 crore and
high total outside liabilities to adjusted networth ratio of 21
times as on March 31, 2016. Debt protection metrics were weak,
with interest coverage ratio of 1.5 times and net cash accrual to
total debt ratio of 0.04 time in fiscal 2016.
* Large working capital requirement: The company had gross
current assets of 314 days as on March 31, 2016, because of large
receivables and inventory.
* Small scale of operations: MDIL's small scale, reflected in
revenue of INR125 crore in fiscal 2016, limits its bargaining
power in the fragmented diamond industry.
Strength
* Extensive experience of promoters in the gems and jewellery
industry, and established customers relationships with customers:
MDIL's promoters, Mr. Upendra Shah and Mr. Himanshu Shah, have
experience of more than two decades in the diamond industry. The
company will benefit from their industry experience,
understanding of market dynamics, and established relationships
with suppliers and customers.
Outlook: Stable
CRISIL's believes MDIL will continue to benefit from its
promoters' extensive industry experience and established
relationships with customers and suppliers. The outlook may be
revised to 'Positive' if revenue and profitability are higher
than expected, leading to increase in cash accrual and a better
capital structure. The outlook may be revised to 'Negative' if
there is a stretch in working capital cycle or lower-than-
expected cash accrual, leading to deterioration in the financial
risk profile.
MDIL, incorporated in 1987 by Mr. Upendra Shah and Mr. Himanshu
Shah, manufactures and trades in cut and polished diamonds, and
trades in rough diamonds.
Its profit after tax (PAT) was INR0.51 crore on net sales of
INR129.3 crore in fiscal 2016, against INR0.49 crore and INR123.7
crore, respectively, in fiscal 2015. PAT was INR0.46 crore on net
sales of INR102.62 crore for the first nine months of fiscal
2017.
MULLAS WEDDING: CRISIL Reaffirms 'B' Rating on INR5MM LT Loan
-------------------------------------------------------------
CRISIL's rating on the long-term bank facilities of Mullas
Wedding Centre continues to reflect modest scale of operations in
the intensely competitive and highly fragmented apparel retail
industry, large investments made in its associate entity. its
and average debt protection metrics. These weaknesses are
partially offset by the proprietor's extensive experience and
healthy net-worth.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Long Term Loan 5 CRISIL B/Stable (Reaffirmed)
Overdraft 3 CRISIL B/Stable (Reaffirmed)
Key Rating Drivers & Detailed Description
Weaknesses
* Modest scale of operations amid intense competition: Business
risk profile remains constrained by modest scale of operations
reflected by revenue of INR12.7 crore for fiscal 2016. MWC is
expected to book revenues of INR15 crs for fiscal 2017 supported
by sales of INR12 crs till January 2017.
The low entry barriers have led to a highly fragmented industry
structure, with intense competition among players. The modest
scale of operations, which restricts the derivation of benefits
of economies of scale, should constrain business risk profile
over the medium term as well.
* Weak debt protection metrics: The debt protection metrics were
weak, with interest coverage ratio of 1.6 times and net cash
accrual to total debt of 0.04 time in fiscal 2016.
* Large investment in associate entity: MWC has extended fund
support to the extent of INR14.38 crores as of March 31, 2016 to
its group company Mother Care & Health Centre.
Strengths
* Extensive experience of proprietor: The proprietor, Mr. M V
Thomas has over 2 decades of experience in the textile industry
and was involved in wholesale trading prior setting up of MWC.
Benefits from the proprietor's experience should support business
risk profile.
* Healthy Net-worth: MWC has healthy net worth of INR17.33 crs.
as on March 31, 2016.
Outlook: Stable
CRISIL believes MWC will continue to benefit from the
proprietor's extensive experience. The outlook may be revised to
'Positive' if the revenues and profitability improves
significantly improving its cash accruals. The outlook may be
revised to 'Negative' if liquidity weakens because of decline in
sales or profitability or large, debt-funded capital expenditure
weakens financial risk profile.
Set up as a proprietorship firm by Mr. M V Thomas in 2013, MWC
operates a retail textile showroom in Mannarkkad, Kerala.
MWC had a book profit of INR0.10 crore on sales of INR12.6 crore
in fiscal 2016, against lossed of INR0.31 crore on sales of
INR11.58 crore, in fiscal 2015.
N. S. ENGINEERING: CRISIL Reaffirms B- Rating on INR39MM Loan
-------------------------------------------------------------
CRISIL has reaffirmed its 'CRISIL B-/Stable/CRISIL A4' ratings on
the bank facilities of N. S. Engineering Projects Private
Limited.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 5.5 CRISIL A4 (Reaffirmed)
Cash Credit 39.0 CRISIL B-/Stable (Reaffirmed)
Funded Interest
Term Loan 7.67 CRISIL B-/Stable (Reaffirmed)
Inland Guarantees 1 CRISIL A4 (Reaffirmed)
Letter of Credit 8 CRISIL A4 (Reaffirmed)
Proposed Long Term
Bank Loan Facility 10.51 CRISIL B-/Stable (Reaffirmed)
Term Loan 18.1 CRISIL B-/Stable (Reaffirmed)
Working Capital
Term Loan 10.36 CRISIL B-/Stable (Reaffirmed)
The ratings reflect the company's weak financial risk profile and
large working capital requirement. These weaknesses are partially
offset by the experience of its promoters.
Key Rating Drivers & Detailed Description
Weaknesses
* Weak financial risk profile: Gearing increased to 2.8 times as
on March 31, 2016, from 1.84 times in the previous year on
account of erosion in networth due to losses incurred in the last
two fiscals. Also, debt protection metrics remained subdued.
However, financial risk profile is expected to improve over the
medium term with sizeable equity infusion of INR8 crore in fiscal
2017.
* Large working capital management: Gross current assets have
been in the 122-277 days range in the three years ended March
2016 due to stretched receivables and large inventory.
Strength
* Extensive experience of promoters: Presence of over a decade in
the fabrication and galvanising industry has enabled the
promoters to establish a strong customer and supplier base.
Outlook: Stable
CRISIL believes NSEPL will benefit over the medium term from the
extensive experience of its promoters and diverse product
profile. The outlook may be revised to 'Positive' if a
significant increase in revenue and cash accrual or better
working capital requirement improves financial risk profile. The
outlook may be revised to 'Negative' if decline in cash accrual
or stretch in working capital cycle affects financial risk
profile, especially liquidity.
Incorporated in 2007 and promoted by Mr. Manoj Kumar Kedia and
Mr. Anil Kumar Goel, NSEPL manufactures deck sheets, sheet piles,
and components for the railways at its fabrication and
galvanising unit in Domjur, West Bengal.
NSEPL reported a net loss of INR7.18 crore on revenue of INR80.07
crore in fiscal 2016, vis-a-vis a net loss of INR11.69 crore on
revenue of INR134.76 crore for fiscal 2015.
P. MURUGESAN: CRISIL Assigns 'B+' Rating to INR4.5MM Cash Loan
--------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to
the bank facilities P. Murugesan.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term
Bank Loan Facility 1.5 CRISIL B+/Stable
Bank Guarantee 3.0 CRISIL A4
Cash Credit 4.5 CRISIL B+/Stable
The ratings reflect the extensive experience of promoters in the
civil construction business, and above-average financial risk
profile, with comfortable debt protection metrics. These
strengths are partially offset by a modest scale of operations,
and customer concentration in revenue profile.
Key Rating Drivers & Detailed Description
Weaknesses
* Modest scale of operations in the fragmented and intensely
competitive civil construction industry: PM operates in the
highly fragmented civil construction industry, with several small
regional players. Scale of operations is modest as reflected in
its turnover of INR6.7 crore for fiscal 2016. It currently is
executing orders of INR15 crore which will likely be completed by
March 2017. Scale will likely remain small over the medium term.
* Customer concentration in revenue: PM derives 90% of its
revenue from railways lines works for the Southern and South
Western Railways. Any delay in execution of government projects
or in payments will have an impact on turnover, thereby exposing
the firm to severe customer concentration risks.
Strengths
* Proprietor's extensive experience in the civil construction
industry: The firm is promoted by Mr. P Murugesan who has close
to 30 years of experience in the same line of business as a small
contractor for the Indian Railways. His extensive experience has
helped forge established relationships with customers and also
have high success rate on its tenders.
* Above-average financial risk profile: PM had a modest networth
of INR2.6 crore as on March 31, 2016; however, gearing remained
healthy at 0.5 time. Debt protection metrics were comfortable as
reflected in net cash accrual to total debt ratio of 0.24 time
and interest coverage ratio of 3.07 times for fiscal 2016.
Outlook: Stable
CRISIL believes PM will continue to benefit over the medium term
from the extensive experience of its promoter in the civil
construction industry. The outlook may be revised to 'Positive'
in case of significant improvement in scale of operations and
profitability strengthening the financial risk profile.
Conversely, the outlook may be revised to 'Negative' if revenue
or profitability deteriorates or if large, debt-funded capital
expenditure weakens the capital structure.
PM was established by Mr. P.Murugesan as a proprietary firm and
is a contractor for Southern Railways and Southern Western
Railways and is engaged in laying of blue metal (Jalli Kallu) on
railway tracks.
PM booked Net Profit (NP) of INR40 lakhs on revenues booked of
INR6.7 crores in fiscal 2016 against NP of INR66 lakhs on
revenues booked INR13.12 crore in fiscal 2015.
PAREKH PETROCHEMICALS: CRISIL Assigns B+ Rating to INR5MM Loan
--------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to
the bank facilities of Parekh Petrochemicals (PP).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 5 CRISIL B+/Stable
Letter of Credit 10 CRISIL A4
The ratings reflect below-average financial risk profile because
of high total outside liabilities to adjusted networth (TOLANW)
and low profitability. These weakness are partially offset by the
extensive experience of its proprietor and efficient working
capital management.
Key Rating Drivers & Detailed Description
Weaknesses
* Low profitability: Operating margin was 2.4% for fiscal 2016
due to trading nature of business. The operating profitability is
susceptible to any adverse foreign exchange fluctuations.
* Weak financial risk profile: The TOLANW ratio was high at 12.5
times as on March 31, 2016, and debt protection metrics were
average, with interest coverage and net cash accrual to total
debt ratios of 1.5 times and 6%, respectively, during fiscal
2016.
Strengths
* Extensive experience of proprietor: Business risk profile is
strengthened by proprietor's experience of four decades in the
polymer trading industry.
* Efficient working capital management: Gross current assets were
108 days as on March 31, 2016, due to small inventory of 13 days
and moderate receivables of 41 days.
Outlook: Stable
CRISIL believes PP will benefit over the medium term from the
extensive experience of its proprietor. The outlook may be
revised to 'Positive' if substantial increase in scale of
operations or profitability leads to higher-than-expected cash
accrual. The outlook may be revised to 'Negative' if lower-than-
expected profitability, or sizeable working capital requirement
or capital withdrawal further weakens financial risk profile,
particularly liquidity.
Established as a proprietary concern in 2001 by Parekh family, PP
trades in polymers.
Profit after tax was INR1.46 crore on net sales of INR185 crore
for fiscal 2016, against INR0.9 crore and INR124 crore,
respectively in fiscal 2015.
PAREVARTAN EDUCARE: CRISIL Ups Rating on INR10MM Term Loan to B+
----------------------------------------------------------------
CRISIL has upgraded its rating on the long-term bank facility of
Parevartan Educare Foundation to 'CRISIL B+/Stable' from 'CRISIL
B/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 10 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
The upgrade reflects the society's strengthening market position
indicated by increase in number of students and addition of
classes, and robust operating margin of 40% in fiscal 2016. The
upgrade also factors improving financial risk profile because of
repayment of long-term debt, and adequate liquidity, reflected in
cushion between net cash accrual and term debt obligation.
The rating reflects PEF's small scale of operations, and exposure
to risks related to implementation of its primary school project
and to successful stabilisation of operations after project
completion. These weaknesses are partially offset by its strong
track record in the education sector.
Analytical Approach
Unsecured loans of INR1.65 crore as on March 31, 2016, have been
treated as neither debt nor equity as these are expected to
remain in the business and are non- interest bearing.
Key Rating Drivers & Detailed Description
Weaknesses
* Small scale of operations: PEF's revenue was at a modest
INR5.51 crore in fiscal 2016. As the society's schools already
operate at more than 80% of capacity, there is limited scope for
revenue growth.
* Exposure to risks related to implementation of primary school
project: PEF is setting up a primary school at a cost of INR15
crore. While it has been sanctioned debt, this is the society's
first large expansion programme. Hence, timely implementation of
the project will be a rating sensitivity factor. In addition,
occupancy will depend on the number and quality of other schools
in the vicinity.
Strength
* Strong track record in the education sector: PEF's schools have
been operating for almost 14 years, resulting in strong market
position in its area of operations, reflected in over 80%
capacity utilisation.
Outlook: Stable
CRISIL believes PEF will continue to benefit from its promoters'
extensive experience in the education sector. The outlook may be
revised to 'Positive' if timely implementation and stabilisation
of operations at the upcoming primary school, along with a better
surplus margin, result in higher-than-expected cash accrual, thus
improving the financial risk profile. The outlook may be revised
to 'Negative' if revenue remains stagnant, and if the financial
risk profile, particularly liquidity, weakens due to a time and
cost overrun in the project, or because of additional, debt-
funded capital expenditure.
PEF, set up as an educational society in 2003, is based in
Ghaziabad, Uttar Pradesh. It operates a pre-school and a primary
school. The society is managed by Mr. V S Choudhary, and his wife
and son.
Net surplus of INR1.36 crore was reported on net receipts of
INR5.51 crore in fiscal 2016, against INR0.86 crore and INR3.73
crore, respectively, in fiscal 2015.
PCM STRESCON: CRISIL Reaffirms 'B' Rating on INR31.00MM Loan
------------------------------------------------------------
CRISIL's ratings on the bank loan facilities of PCM Strescon
Overseas Ventures Limited continue to reflect the volatility in
revenue because of the tender-based nature of operations,
operating losses due to time and cost overruns in project
execution and working capital intensive operations. These
weaknesses are partially offset by PCM's extensive experience and
expertise in the railway sleeper manufacturing projects.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 61.5 CRISIL A4 (Reaffirmed)
Letter Of Guarantee 25.65 CRISIL A4 (Reaffirmed)
Letter of Credit 21.85 CRISIL A4 (Reaffirmed)
Proposed Bank Guarantee 20.00 CRISIL A4 (Reaffirmed)
Proposed Long Term Bank
Loan Facility 31.00 CRISIL B/Stable
(Reaffirmed)
Proposed Term Loan 12 CRISIL B/Stable
(Reaffirmed)
Key Rating Drivers & Detailed Description
Weaknesses
* Volatile revenue owing to tender-based operations: The high
reliance on tender-based contracts has kept topline volatile at
INR35-238 crore over the three years through fiscal 2016.
* Operating losses on account of time and cost overruns in
project execution: The delay in the clearances and handover for
the projects in hand have led to operating losses over the last
two fiscals through 2016.
* Sizeable working capital requirement: Operations are working
capital intensive as projects extend from 1-3 years, resulting in
large work in progress. Also, bank guarantee given towards these
projects extends for another year, consequently margin money
requirements are large.
Strength
* Extensive experience and expertise in railway sleeper
manufacturing projects: PCM has a long track record of executing
railway sleeper projects, especially in Saudi Arabia. Benefits
from the two-decade long experience in the industry should
support business risk profile.
Outlook: Stable
CRISIL believes PCM will continue to benefit from the extensive
experience of its promoters; CRISIL also expects advances
extended to associate companies to be recovered in case of any
fund requirement. The outlook may be revised to 'Positive' if
there is significant and sustained improvement in scale of
operations and profitability along with prudent working capital
management leading to sizeable net cash accruals, thus improving
liquidity. The outlook may be revised to 'Negative' if delays in
offtake of awarded projects or in realization of receivables, or
if increase in investment in group companies weakens liquidity.
PCM, incorporated in 2006, manufactures pre-compressed heavy-haul
concrete sleepers. The West Bengal-based company is promoted by
PCM Cement Concrete Pvt Ltd, PCM Alloy Steels Private Limited and
Heaven Mercantile Private limited.
For fiscal 2016, the company reported a net loss of INR3.27 crore
on operating income of INR35.51 crore as against net loss of
INR12.51 crore on operating income of INR4.84 crore,
respectively, in the previous fiscal year.
PHOENIX ISPAT: CRISIL Reaffirms B+ Rating on INR7.5MM Loan
----------------------------------------------------------
CRISIL has reaffirmed its rating on long-term bank facilities of
Phoenix Ispat Pvt Ltd at 'CRISIL B+/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 6.5 CRISIL B+/Stable (Reaffirmed)
Electronic Dealer
Financing Scheme
(e-DFS) 7.5 CRISIL B+/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility 1.0 CRISIL B+/Stable (Reaffirmed)
The rating continues to reflect the company's below-average
financial risk profile because of small networth and high total
outside liabilities to adjusted networth (TOLANW) ratio, low
operating profitability due to trading business, and limited
bargaining power with principal. These weaknesses are partially
offset by the extensive entrepreneurial experience of its
promoters and established dealer network.
Analytical Approach
Unsecured loans of INR2.12 crore from the promoters have been
treated as neither debt nor equity since these carry interest
rate lower than market rate and are expected to remain in
business.
Key Rating Drivers & Detailed Description
Weaknesses
* Below-average financial risk profile: Networth was modest at
INR2.8 crore and TOLANW ratio high at 6.3 times as on March 31,
2016. Debt protection metrics were also muted, with an interest
coverage ratio of 1.6 times for fiscal 2016.
* Low operating profitability: Operating margin has been in the
1.17-0.86% range in the three fiscals through 2016 because of
trading nature of business and low bargaining power against
clients.
Strength
* Extensive entrepreneurial experience of promoters: The
promoters have been trading in thermo-mechanically treated (TMT)
bars, pipes, and other flat and long products in Odisha through
group entities since the past one decade.
Outlook: Stable
CRISIL believes PIPL will continue to benefit over the medium
term from the extensive entrepreneurial experience of its
promoters and established dealer network. The outlook may be
revised to 'Positive' if increased profitability leads to better
cash accrual, or if financial risk profile improves on account of
capital infusion by promoters. The outlook may be revised to
'Negative' if capital structure and debt protection metrics
deteriorate on account of stretch in working capital cycle or
decline in revenue or profitability.
Incorporated in 2013 and promoted by Odisha-based Agarwal and
Adukia families, PIPL is the exclusive distributor of Concast
Ispat Ltd's TMT steel bars and other long products in Odisha.
PIPL obtained distributorship of Jindal Steel and Power's
products in March 2015. Operations are managed by Mr. Milan
Agarwal and Mr. Shailendra Adukia.
Profit after tax (PAT) was INR0.28 crore on net sales of INR127.8
crore in fiscal 2016, against a PAT of INR0.35 crore on net sales
of INR113.3 crore in fiscal 2015.
PICASSO HOME: CRISIL Reaffirms 'B' Rating to INR3.25MM Loan
-----------------------------------------------------------
CRISIL has reaffirmed its 'CRISIL B/Stable' ratings on the long
term bank facilities of Picasso Home Products Private Limited,
while reassigning its short term rating to 'CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 3 CRISIL B/Stable (Reaffirmed)
Foreign Letter of
Credit 2 CRISIL A4 (Reassigned)
Proposed Long Term
Bank Loan Facility 3.25 CRISIL B/Stable (Reaffirmed)
The ratings reflect PHPPL's small scale of operations, large
working capital requirement, and subdued financial risk profile
because of modest networth, high total outside liabilities to
adjusted networth (TOLANW) ratio, and weak debt protection
metrics. These weaknesses are partially offset by its promoters'
extensive experience in the home appliance industry.
Key Rating Drivers & Detailed Description
Weaknesses
* Small scale of operations in the intensely competitive kitchen
appliances industry
The company's small scale, reflected in net sales of INR15.2
crore in fiscal 2016, and the intense competition in the
fragmented kitchen appliances industry restrict bargaining power
with customers or suppliers. While the industry has a few
national brands, more than half the market has been captured by
regional brands and the unorganised segment.
* Large working capital requirement
PHPPL had gross current assets of 285 days as on March 31, 2016,
on account of large receivables of 101 days and inventory of 151
days.
* Subdued financial risk profile
Networth was small at INR3.2 crore, and TOLANW ratio was high at
3.3 times, as on March 31, 2016, on account of large working
capital debt. Debt protection metrics were weak, indicated by
interest coverage ratio of 1.7 times for fiscal 2016.
Strength
* Promoters' extensive experience in home appliance industry
The company's promoters, Mr. Bhavesh Patel and Mr. Jayantilal
Jain, have experience of over two decades in the kitchen
appliances industry. The promoters' experience will help the
company register growth in revenue, and established relationships
with major suppliers and customers will help strengthen market
position.
Outlook: Stable
CRISIL believes PHPPL will continue to benefit from its
promoters' extensive industry experience. The outlook may be
revised to 'Positive' if revenue and profitability increase
significantly, or if working capital cycle improves, leading to
better liquidity. The outlook may be revised to 'Negative' if
profitability declines significantly or if capital structure
deteriorates on account of larger-than-expected working capital
requirement or sizeable, debt-funded capital expenditure.
PHPL was incorporated in 2003 by Mr. Bhavesh Patel and Mr.
Jayantilal Jain. The company took over the business of
partnership firm Picasso Home Products which was operational
since 1996. The company manufactures home cookware products. Its
manufacturing facility is in Daman.
PHPPL had a loss of INR0.59 crore on net sales of INR15.2 crore
in fiscal 2016, vis-a-vis a loss of INR0.008 crore on net sales
of INR15.3 crore, respectively, in fiscal 2015.
RATAN COLD: CRISIL Assigns B+ Rating to INR5.70MM Term Loan
-----------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-
term bank facilities of Ratan Cold Storage.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 5.70 CRISIL B+/Stable
Cash Credit 0.25 CRISIL B+/Stable
Proposed Long Term
Bank Loan Facility 1.05 CRISIL B+/Stable
The rating reflects the firm's initial stage and expected modest
scale of operations, and below-average financial risk profile
because of a small networth and moderate gearing. These
weaknesses are partially offset by the extensive experience and
funding support of its promoters.
Key Rating Drivers & Detailed Description
Weaknesses
* Modest scale of operations in competitive segment: With
estimated revenue of INR2 crore in fiscal 2017, scale remains
small in the competitive cold storage industry that is capital
intensive and has low entry barrier.
* Below-average financial risk profile: Networth was small at
INR1.02 crore and gearing moderate at over 1.67 times as on March
31, 2016. While networth will improve marginally, gearing will
remain at a similar level as on March 31, 2017.
Strength
* Experience of promoters: The promoters have been in the
agricultural segment for a decade.
Outlook: Stable
CRISIL believes RCS will continue to benefit over the medium term
from its promoters' extensive experience. The outlook may be
revised to 'Positive' if significant increase in scale of
operations and profitability leads to better cash accrual. The
outlook may be revised to 'Negative' if lower-than-expected
revenue and profitability adversely affect financial risk
profile, particularly liquidity.
Established in 2015 as a partnership firm by Mr. Manilal Patel,
Mr. Nitinkumar Parmar, Mr. Bharat Patel, and Mr. Bhaveshkumar
Mali, RCS provides cold storage facility at its unit in
Iqbalgadh, Banaskantha, Gujarat. Commercial operations started in
April 2016.
RATNADEEP METAL: Ind-Ra Assigns 'BB' Long-Term Issuer Rating
------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Ratnadeep Metal
& Tubes Limited (RMTL) a Long-Term Issuer Rating of 'IND BB'.
The Outlook is Stable. The instrument-wise rating actions are:
-- INR300 mil. Fund-based limits assigned with IND BB/Stable/
IND A4+ rating;
-- INR330 mil. Non-fund-based limits assigned with IND A4+
Rating
KEY RATING DRIVERS
The ratings reflect RMTL's moderate credit profile. During FY16,
RMTL's revenue was INR936 million (FY15: INR1,184 million), net
financial leverage was 4x (20.6x), interest coverage ratio was
1.4x (0.3x) and EBITDA margins were 10.4% (2%). Operating EBITDA
margins have remained high since inception, expect for FY15, when
an exceptional rise in raw material prices and cancellation of
few contracts along with high overhead costs including high
salaries and wages led to a sharp fall. However, the company has
now started accepting only those projects which have built-in
escalation clauses, to protect its margins against raw material
price fluctuations.
The ratings also reflect RMTL's moderate to tight liquidity. Its
average maximum use of the fund-based limits was 94.5% during the
12 months ended December 2016.
The ratings are supported by the promoter's rich experience of
over three decades in manufacturing tubes and pipes.
RATING SENSITIVITIES
Positive: A substantial improvement in the scale of operations
along with an improvement in the overall credit metrics would be
positive for the ratings.
Negative: Deterioration in the margins leading to deterioration
in the credit profile would be negative for the ratings.
COMPANY PROFILE
Incorporated in 2002, RMTL manufactures metal pipes and tubes at
its 6,610MTPA facility in Gujarat.
RUBY MICA: CRISIL Reaffirms B+ Rating on INR2.06MM Loan
-------------------------------------------------------
CRISIL has reaffirmed its ratings on the bank facilities of Ruby
Mica Company Limited at 'CRISIL B+/Stable/CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee .5 CRISIL A4 (Reaffirmed)
Cash Credit-Book
Debt .8 CRISIL B+/Stable
(Reaffirmed)
Cash Credit-Stock 1.2 CRISIL B+/Stable
(Reaffirmed)
Export Packing Credit 1.9 CRISIL A4 (Reaffirmed)
Letter of Credit .5 CRISIL A4 (Reaffirmed)
Post Shipment Credit .6 CRISIL A4 (Reaffirmed)
Proposed Long Term
Bank Loan Facility 2.06 CRISIL B+/Stable (Reaffirmed)
Standby Line of
Credit .9 CRISIL B+/Stable (Reaffirmed)
The ratings reflect the company's modest scale of operations in
the competitive mica industry and large working capital
requirement. These weaknesses are mitigated by moderate financial
risk profile because of comfortable capital structure and debt
protection metrics, and extensive experience of promoters.
Key Rating Drivers & Detailed Description
Weaknesses
* Modest scale of operations in competitive segment: With revenue
of INR17.8 crore in fiscal 2016, scale remains small in the
competitive mica segment. Exports account for 60% of total income
while the remaining comes from domestic sales.
* Working capital-intensive operations: Gross current assets were
234 days as on March 31, 2016, because of sizeable inventory and
moderately stretched receivables.
Strengths
* Extensive experience of promoters: Presence of more than four
decades in the mica industry has enabled the promoters to
establish a strong market position.
* Moderate financial risk profile: Networth was large at INR10.8
crore and total outside liabilities to adjusted networth ratio
healthy at 0.7 time as on March 31, 2016. Interest coverage ratio
was above average at 2.9 times for fiscal 2016.
Outlook: Stable
CRISIL believes RMCL will continue to benefit over the medium
term from the extensive experience of its promoters. The outlook
may be revised to 'Positive' in case of higher-than-expected cash
accrual due to ramp-up in operations, or if liquidity improves
with a better working capital cycle. The outlook may be revised
to 'Negative' if financial risk profile, particularly liquidity,
weakens because of decline in profitability, stretched working
capital cycle, or any debt-funded capital expenditure.
Set up as a partnership firm in 1968 by Jharkhand-based Bagaria
family and reconstituted as a closely held public limited company
in fiscal 2010, RMCL manufactures and exports synthetic mica
paper and other products.
Profit after tax (PAT) was INR15.12 lakh on net sales of INR17.69
crore in fiscal 2016, against a PAT of INR23.81 lakh on net sales
of INR16.00 crore in fiscal 2015.
RUCHI SOYA: Faces Insolvency Action Over INR9.63cr Debt
-------------------------------------------------------
Ruchi Soya Industries Limited has informed the Bombay Stock
Exchange that it has been served with a copy of Insolvency and
Bankruptcy Application (Under Section 9 of the Insolvency and
Bankruptcy Code, 2016 read with Rule 6 of the Insolvency and
Bankruptcy (Application to Adjudicating Authority) Rules, 2016)
filed by one of its unsecured creditors against the Company
before the Hon'ble National Company Law Tribunal, Bombay for
recovery of an amount of around INR9.63 Crores which is disputed
as per the company.
The Company said it is taking appropriate legal recourse in the
matter.
As reported in the Troubled Company Reporter-Asia Pacific on
Jan. 17, 2017, the reaffirmation of the ratings for the bank
facilities of Ruchi Soya takes into account recent delays in
servicing of debt obligations on account of stress on its
liquidity on the back of huge loss posted in FY16 and subdued
operating performance in H1FY17.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank Facilities 3,424.24 CARE D Suspension
Revoked and ratings
Reaffirmed
Long Term/Short Term 6,490.95 CARE D/CARE D
Bank Facilities Suspension revoked
and ratings
reaffirmed
Ruchi Soya Industries Ltd. is engaged in crushing of oil seeds
and extraction/refining of edible oil along with manufacturing of
related products like vanaspati and textured proteins. It is also
engaged in import/export as well as domestic trading of various
agri-commodities. It is the flagship entity of the Indore, Madhya
Pradesh based Ruchi Group, which has business interests spread
across various sectors including edible oil, agri-commodity
trading, liquid and dry storage warehousing for agri-products and
real estate. RSIL has manufacturing presence at 20 locations
across India.
RVM CHARITABLE: CRISIL Assigns 'B+' Rating to INR30MM LT Loan
-------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-
term bank facility of RVM Charitable Trust.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Long Term Loan 30 CRISIL B+/Stable (Assigned)
The rating reflects the RVMCT's geographic concentration in
revenue profile, modest scale of operations and exposure to
intense competition and stringent regulations in the education
sector. These rating weaknesses are partially offset by its
promoters' extensive industry experience and moderate financial
risk profile marked by moderate debt service coverage ratio and
liquidity.
Key Rating Drivers & Detailed Description
Weaknesses
* Geographic concentration in revenue profile, modest scale and
exposure to intense competition: RVMCT derives its revenues from
a medical college and hospital located in Medak district of
Telangana. This leads to geographic concentration in its revenue
profile. Besides, RVMCT faces intense competition from many
reputed colleges in the state.
* Stringent regulations in the education sector: RVMCT is
affiliated to Kaloji Narayana Rao University of Health Sciences
and is regulated by authorities such as Ministry of Health and
Family Welfare. Each body has specified guidelines regarding
courses offered, infrastructure, faculty members, and syllabus
and course content. Any non-compliance with the guidelines may
adversely affect the Trust's operations.
Strengths
* Promoters' extensive experience: RVMCT's promoter, Dr. R.
Yakaiah is the Chairman of the Governing Body, and is an
academician and medical practitioner. He has more than 2 decades'
experience in the teaching and medical industry. CRISIL believes
that RVMCT's growth will be driven by its experienced management
and sound infrastructure.
* Moderate financial risk profile: RVMCT has moderate DSCR of
2.02 times over the next 3 years. The Trust is expected to spend
its surplus in improving the infrastructure over the medium term.
However, the absence of large debt funded capex plans would aid
the financial flexibility of the Trust. The financial risk
profile would continue to remain constrained by a modest net
worth as majority of promoters' contribution would come in the
form of unsecured loans.
Outlook: Stable
CRISIL believes that RVMCT will continue to benefit over the
medium term from its promoters' extensive experience. The outlook
may be revised to 'Positive' if the Trust reports significant
growth in revenue and profitability leading to improved cash
accruals and liquidity. Conversely, the outlook may be revised
to 'Negative' if it undertakes larger-than-expected debt-funded
capital expenditure, or reports a steep decline in revenue and
surplus. Any adverse impact on the Trust's financial risk profile
because of regulatory or legal policies related to educational
institutions may also result in the outlook being revised to
'Negative'.
The Hyderabad-based RVM Charitable Trust (RVMCT) was established
in 2004 by Dr. R Yakaiah, the Chairman, and runs a medical
college and teaching hospital.
In fiscal 2016, surplus was INR0 crore on net sales of INR0
crore. The Trust started operations in fiscal 2017.
SAUMIL IMPEX: CRISIL Upgrades Rating on INR7.1MM Loan to 'B'
------------------------------------------------------------
CRISIL has revised its ratings on the bank facilities of Saumil
Impex Private Limited from 'CRISIL BB/Stable/CRISIL A4+' to
'CRISIL D/CRISIL D' and simultaneously upgraded the ratings to
'CRISIL B/Stable/CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 7.1 CRISIL B/Stable (Revised
from 'CRISIL BB/Stable' to
'CRISIL D' and simultaneously
upgraded to 'CRISIL B/Stable')
Letter of Credit 61.0 CRISIL A4 (Revised from
'CRISIL A4+' to 'CRISIL D'
simultaneously upgraded to
'CRISIL A4')
Proposed Long Term 1.4 CRISIL B/Stable (Revised from
Bank Loan Facility 'CRISIL BB/Stable' to
'CRISIL D' and simultaneously
upgraded to 'CRISIL B/Stable')
The revision in ratings takes into account the devolvement of LC
on account of substantial losses in the business during 2015-16.
However, the ratings reassigned factors in improved liquidity
backed by upsurge in company's ship breaking activity and no
irregularity or delays in debt servicing by the company post the
debt restructuring sanctioned in February 2016. The company has
prepaid its debt liabilities towards the working capital term
loan until April 2017.
The ratings continue to reflect company's modest scale of
operations, and its exposure to business cyclicality, intense
competition in the ship-breaking industry and to regulatory
changes. These rating weaknesses are partially offset by the
extensive experience of SIPL's promoters in the ship-breaking
industry.
Key Rating Drivers & Detailed Description
Weakness
* Modest scale of operations and intense competition in ship
breaking industry: SIPL has been operating on a small scale on
account of the inherent cyclicality in the ship breaking industry
and intense competition in ship breaking industry.
* Susceptibility to cyclicality in shipping industry and
fluctuations in steel scrap prices and forex rate: CRISIL
believes that SIPL will continue to be susceptible to cyclicality
in the ship-breaking industry and the risk of adverse movements
in iron and steel prices and exchange rate.
* Susceptibility to adverse changes in government regulations,
specifically environmental concerns in ship-breaking industry:
The ship-breaking industry is highly vulnerable to changes in
government policies. CRISIL believes that the stringent
environmental regulations may adversely impact the ship-breaking
industry, which, in turn, will negatively impact SIPL's revenue
profile
Strengths
* Extensive experience of the promoters in ship breaking
activity: Promoters have more than two decade of experience in
the ship breaking activity which CRISIL believes will help the
firm in ramping up the operations during the upsurge in ship
breaking industry.
Outlook: Stable
CRISIL believes that SIPL will continue to benefit over the
medium term from its promoters' extensive industry experience.
The outlook may be revised to 'Positive' if the company reports a
substantial and sustained increase in its sales and profits,
while maintaining its financial risk profile. Conversely, the
outlook may be revised to 'Negative' if SIPL's operating margin
declines, most likely because of a sharp decline in steel scrap
prices, or if it fails to recover the cost of purchased ships.
Incorporated in 1991 and promoted by Mr. Kishore Parikh, SIPL is
engaged in ship-breaking activities at Alang (Gujarat), which is
the centre of the ship-breaking and recycling industry in Asia.
Net loss was INR8.02 crore on net sales of INR38.29 crore for
fiscal 2016, against a net loss of INR2.32 crore on net sales of
INR86.51 crore for fiscal 2015.
SHREE VENKATESH: Ind-Ra Affirms 'BB' Long-Term Issuer Rating
------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed Shree Venkatesh
Group's (SVG) Long-Term Issuer Rating at 'IND BB'. The Outlook
is Stable. Instrument-wise rating action is:
-- INR277.5 mil. Term loan affirmed with IND BB/Stable rating
KEY RATING DRIVERS
The affirmation reflects the continued execution, funding and
saleability risks associated with SVG's upcoming project, Joynest
Phase II (125 residential units). Construction for the Phase II
is likely to commence in 2QFY18 and is scheduled to be completed
by 4QFY19. Any significant time or cost overruns could result in
a cash flow mismatch, as customer advances are the major source
of income (76.4%) for the project. The total cost of the project
is INR177.8 million. Therefore, timely execution is critical for
the progressive advances to flow in.
The affirmation also factors in the saleability and funding risks
associated with SVG's ongoing project, Joynest Phase I (215
residential and 8 commercial units). SVG claims to have
completed 86% of the construction work under the Phase I, and
estimates final completion by September 2018. The firm has sold
92 residential units by end-January 2017 for INR238.7 million,
with cash collections of INR157 million. The total cost of
INR469.3 million incurred for the Phase I, includes land cost of
INR56 million.
However, the ratings continue to benefit from a 19-year-long
track record of the group company, Shree Venkatesh Buildcon Pvt
Ltd (SVBPL) in the Pune real estate market.
RATING SENSITIVITIES
Negative: A below-than-expected sales rate and realization of the
project or significant time or cost overruns in the project,
which will be funded mainly by debt or non-infusion of equity in
a timely manner, could result in a negative rating action.
Positive: A faster turnover of flats than the agency's
expectations, resulting in high customer advances, leading to
higher cash flow available for debt servicing could result in a
positive rating action.
COMPANY PROFILE
SVG is a Pune-based partnership firm engaged in housing
construction and real estate development activity. Most of the
housing projects are middle income group oriented and are
concentrated in Pune.
SVBPL is engaged in the similar line of business and also
provides corporate guarantee for SVG's debt. The company is
currently engaged in developing Venkatesh Graffiti Phase II - an
8.5 acres project with 460 homes and 28 shops in Mundhwa (Keshav
Nagar). The project has a total saleable area of 476,573sf, of
which 122,118sf is already sold. The project is a 37.38:62.62
joint venture with the land owner, Lonkar family and SVBPL.
SKYHIGH HOSPITALITY: CRISIL Reaffirms B- Rating on INR10MM Loan
---------------------------------------------------------------
CRISIL has reaffirmed its 'CRISIL B-/Stable' rating on the long-
term bank facility of Skyhigh Hospitality Private Limited (SHPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 10 CRISIL B-/Stable (Reaffirmed)
The rating continues to reflect SHPL's muted operating
profitability on account of low occupancy, and weak financial
risk profile because of subdued debt protection measures. These
weaknesses are mitigated by the favorable location of its hotel.
Key Rating Drivers & Detailed Description
Weaknesses
* Muted operating profitability on account of low occupancy:
SHPL's scale of operations is small. The company has a single
hotel and generated operating income of INR3.84 crore in fiscal
2016. The hotel industry is dominated by a few large players such
as the Taj group and the Oberoi group, which have diversified
geographic presence. Though SHPL will benefit from the management
contract signed with the Treehouse group for its brand, it will
remain exposed to intense competition and will be susceptible to
industry downturns.
* Weak financial risk profile: SHPL's financial risk profile is
constrained by adverse gearing, negative networth, and weak debt
protection metrics. Large accumulated losses in the past two
years have affected SHPL's networth. The negative networth
restricts ability to raise debt and limits financial cushion to
withstand adverse condition. The financial risk profile will
remain weak over the medium term on account of muted accrual
driven by low average room revenue.
Strength
* Favourable location of hotel: SHPL's hotel is in Gurgaon,
Haryana, and is close to industrial areas such as Bhiwadi in
Rajasthan and Bawal in Haryana. On account of proximity to the
National Capital Region, and availability of affordable land,
many large hospitality players are entering Gurgaon, which also
has many large manufacturing and service oriented companies. SHPL
will benefit from its location and witness improvement in its
occupancy and operating margin over the medium term.
Outlook: Stable
CRISIL believes SHPL will remain sensitive to timely infusion of
funds by its promoters to service its debt, given its low cash
accrual and early stage of operations. The outlook may be revised
to 'Positive' if higher-than-expected average room rent and
occupancy in early stage of operations result in adequate cash
accrual and improved financial risk profile. The outlook may be
revised to 'Negative' if there is a delay in funding support from
the promoters to meet term debt obligation.
SHPL was set up in 2008 by Gurgaon-based Mr. Ramesh Khurana and
Mr. S N Virmani. The company runs a boutique hotel, Treehouse
Queens Pearl, in Gurgaon.
SHPL had a net loss of INR3.04 crore on net sales of INR3.89
crore for fiscal 2016, vis-a-vis INR3.88 crore and INR3.23 crore,
respectively, in fiscal 2015.
SOLANO CERAMIC: CRISIL Reaffirms 'B' Rating on INR3.73MM Loan
-------------------------------------------------------------
CRISIL's rating on the long-term bank facilities of Solano
Ceramic Pvt Ltd continues to reflect the company's working
capital-intensive, and modest scale of, operations in a
competitive industry. These weaknesses are partially offset by
the extensive experience of its promoters in the ceramic industry
and favourable location of plant that ensures availability of raw
material and labour and proximity to customers.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 2.75 CRISIL B/Stable (Reaffirmed)
Proposed Term Loan 3.73 CRISIL B/Stable (Reaffirmed)
Term Loan 3.52 CRISIL B/Stable (Reaffirmed)
Key Rating Drivers & Detailed Description
Weakness
* Modest scale of operations: With an installed capacity of about
350 tonne per day, scale remains small in a competitive segment.
* Working capital-intensive operations: Operations are working
capital intensive with high GCA days of around 250 days
Strengths
* Extensive experience of promoters: Presence of more than two
decades in the ceramic industry has enabled the promoters to
establish strong relationship with suppliers and customers.
Outlook: Stable
CRISIL believes SCPL will continue to benefit over the medium
term from the extensive experience of its promoters. The outlook
may be revised to 'Positive' if improvement in working capital
management and higher-than-expected growth in revenue and
profitability lead to better cash accrual and hence, financial
risk profile. The outlook may be revised to 'Negative' if
significant decline in cash accrual, deterioration in working
capital management, or large, debt-funded capital expenditure
weakens financial risk profile.
Incorporated in 2012 and promoted and managed by Morbi-based
Fefar family, SCPL operates a spray dryer plant and supplies
products like processed clay to wall tiles units.
Net profit was INR2 lakh on net sales of INR14.4 crore in fiscal
2016, against a net profit of INR13 lakh on net sales of INR14.9
crore in fiscal 2015.
SRI KANGEYAA: CRISIL Reaffirms B+ Rating on INR3.1MM LT Loan
------------------------------------------------------------
CRISIL's rating on the bank facilities of Sri Kangeyaa Textiles
Private Limited continues to reflect SKTPL's modest scale of
operations in the intensely competitive and highly fragmented
textile industry and the company's below-average financial risk
profile marked by modest networth and high gearing. These rating
weaknesses are partially offset by its promoter's extensive
industry experience.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 2.5 CRISIL B+/Stable (Reaffirmed)
Long Term Loan 3.1 CRISIL B+/Stable (Reaffirmed)
Proposed Working
Capital Facility 0.4 CRISIL B+/Stable (Reaffirmed)
Key Rating Drivers & Detailed Description
Strengths
* Modest scale of operations in the intensely competitive and
highly fragmented textile industry: Company's revenues are modest
as indicated by its revenue of INR11.4 crores during fiscal 2016.
The modest scale of operations prevents the company from deriving
benefits of economies of scale. The spinning industry is highly
fragmented, marked by the presence of several players with small
capacities.
* Below-average financial risk profile marked by modest networth
and high gearing: Networth was modest at INR2.1 crores as on
March 31, 2016. Gearing was high at 2.3 times as on the said date
and interest coverage was moderate at 1.73 times for fiscal 2016.
Weakness
* Promoter's extensive industry experience: SKTPL benefits from
the extensive experience of its promoter in the textile industry.
The operations of the company are managed by Mr. V Kariveeran,
who has over two decades of experience in the current line of
business. Over the years, the promoters have developed healthy
relationships with suppliers and customers. This has resulted
timely supply of raw materials and repeat orders from customers.
Outlook: Stable
CRISIL believes SKTPL will continue to benefit over the medium
term from its promoter's extensive experience in the textile
industry. The outlook may be revised to 'Positive' if the company
reports a sustainable increase in revenue and profitability,
while maintaining working capital cycle, thereby improving its
business risk profile. Conversely, the outlook may be revised to
'Negative' if SKTPL generates low cash accruals or undertakes
large debt-funded capital expenditure programme, weakening its
financial risk profile.
Incorporated in 2005, Madurai (Tamil Nadu)-based SKTPL
manufactures cotton yarn. Its operations are managed by promoter
Mr. V Kariveeran.
SKTPL reported a Profit after tax (PAT) of INR0.1 crore on
revenue of INR11.4 crores in fiscal 2016 as against INR0.4 crore
and INR11.2 crores, respectively in fiscal 2015.
VARDHINI INDUSTRIES: CRISIL Assigns 'B+' Rating to INR6.48MM Loan
-----------------------------------------------------------------
CRISIL's has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings on
the bank facilities of Vardhini Industries.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term
Bank Loan Facility .52 CRISIL B+/Stable
Bank Guarantee 1.00 CRISIL A4
Cash Credit 6.48 CRISIL B+/Stable
The ratings reflect VI's below-average financial risk profile
because of small networth, moderate gearing, and average debt
protection metrics. The ratings are also constrained by modest
scale of operations. These weaknesses are partially offset by the
benefit derived from its promoters' extensive experience in the
steel furniture industries.
Key Rating Drivers & Detailed Description
Weaknesses
* Modest scale of operations
With revenue of INR14 crore for fiscal 2016, scale remains small
in the steel manufacturing industry that has limited value
addition.
* Below-average financial risk profile: Networth was modest at
INR2.9 crore and gearing high at 2.5 times as on March 31, 2016,
and debt protection metrics were average.
Strength
* Extensive experience of promoters: Presence of over three
decades in the segment has enabled the promoters to establish
strong relationships with customers and suppliers.
Outlook: Stable
CRISIL believes VI will continue to benefit over the medium term,
from its promoters' extensive experience. The outlook may be
revised to 'Positive' if revenue and profitability margins
improve substantially, or the networth increases considerably
backed by sizeable equity infusion by promoters. Conversely, the
outlook may be revised to 'Negative' in case of a decline in
profitability margin, or significant deterioration in the capital
structure caused by a large, debt-funded capital expenditure or a
stretched working capital cycle.
Established in 1992 as a proprietorship concern by Ms D Sai Mala,
VI based in Secunderabad (Hyderabad) is engaged in manufacturing
of steel furnitures.
Profit after tax (PAT) stood at INR0.63 crore on net sales of
INR14.14 crore for fiscal 2016, vis-a-vis INR0.67 crore and
INR14.01 crore, respectively, for fiscal 2015.
VISHAL CONSTRUCTION: CRISIL Assigns 'D' Rating to INR3.55MM Loan
----------------------------------------------------------------
CRISIL has assigned its 'CRISIL D/CRISIL D' ratings to the bank
facilities of Vishal Construction.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term
Bank Loan Facility 3.55 CRISIL D (Assigned)
Bank Guarantee 3.45 CRISIL D (Assigned)
Cash Credit 3.0 CRISIL D (Assigned)
The ratings reflect weak liquidity as reflected from instances of
continuous overdrawals of the bank limits till December 2016. The
company firm has a modest scale of operations. It however
benefits from the extensive experience of partners in the
construction industry.
Key Rating Drivers & Detailed Description
Weaknesses
* Instances of overdrawn bank limit: Working capital-intensive
operations have resulted in high reliance on external debt and
hence to over-utilisation of the bank limit.
* Modest scale of operations and exposure to intense competition:
Operating revenue was INR16 crore in fiscal 2016.
Strength
* Extensive industry experience of the partners: The partners
have been in the construction business for 21 years.
VC is a partnership firm set up in 1996 by Mr. Vikas Kakad and Ms
Shakuntala Kakad. Based in Mumbai, the firm primarily undertakes
construction of bridges in Maharashtra.
VRAJPACK INDUSTRIES: CRISIL Reaffirms B Rating on INR5.95MM Loan
----------------------------------------------------------------
CRISIL has reaffirmed its 'CRISIL B/Stable' rating on the long-
term bank facilities of Vrajpack Industries.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 5.95 CRISIL B/Stable (Reaffirmed)
Term Loan 4.05 CRISIL B/Stable (Reaffirmed)
The rating reflects average financial risk profile marked by high
gearing and limited track record of operations. These weaknesses
are partially offset by its promoters' extensive experience in
the packaging industry.
Key Rating Drivers & Detailed Description
Weakness
* Average financial risk profile: The firm is likely to have high
gearing of 2.39 times over the near term on account of low cash
accruals.
* Limited track record of operations: The firm has started
operations in April 2016 and has limited track record of
operations leading to constrained business risk profile.
Strengths
* Promoters' extensive experience in the packaging industry: The
promoters have experience of a decade in manufacturing corrugated
boxes through associate firms.
Outlook: Stable
CRISIL believes VPI will benefit from its promoters' extensive
industry experience. The outlook may be revised to 'Positive' if
the firm stabilises operations at its plant in time and reports
significant revenue and profitability. The outlook may be revised
to 'Negative' if there is a lower-than-expected cash accrual in
the initial phase of operations, or substantial increase in
working capital requirement, resulting in weak liquidity.
VPI, set up in 2015, is a partnership firm promoted by Mr. Jatin
Dharsandiya, his family members, and others. The firm is engaged
in manufacturing of corrugated boxes in Morbi, Gujarat.
=========
J A P A N
=========
TOSHIBA CORP: To Sell 18.1% Stake in Molding Machines Unit
----------------------------------------------------------
Nikkei Asian Review reports that Toshiba Corp. said it will
unload the bulk of its holdings in affiliate Toshiba Machine, the
latest step to improve its balance sheet after incurring a
massive loss in the U.S. nuclear power business.
Nikkei says the Japanese company plans to sell an 18.1% stake, or
about 30.2 million shares. Toshiba owns roughly 33.54 million
shares in total, or around 20.1% of the company. After the deal,
Toshiba Machine will no longer be an equity-method affiliate, the
report relates.
Selling the 30.2 million shares would bring in around
JPY15.2 billion ($132 million), yielding a capital gain of about
JPY5.5 billion, says the report. Toshiba has already factored the
sale into its fiscal 2016 earnings estimates.
In line with the effort, Toshiba Machine will buy back shares
March 3 during off-hours trading on the Tokyo Stock Exchange. The
manufacturer of injection molding machines is willing to
repurchase shares from other investors as well, the report notes.
According to Nikkei, Toshiba Machine said it has not made a final
determination on what it will do with the repurchased shares.
They could be retired or released back into the market to raise
funds for such purposes as acquisitions.
Having announced an impairment loss of over JPY700 billion in the
U.S. nuclear power business, Toshiba is seen suffering a net loss
of JPY390 billion in the current fiscal year ending this month.
At the end of March, Toshiba's capital is likely to drop to a
negative JPY150 billion. So the company has been scrambling for
ways to boost its capital. It has decided to spin off its
mainstay memory chip business and sell a majority stake to drum
up much-needed cash.
Now, it must also consider selling shares in group companies and
other assets like land, although how much of an impact that will
have is unclear, Nikkei says.
Toshiba Machine's business with Toshiba accounts for only about
3% of the machine tool maker's overall sales, which were forecast
at JPY110 billion for fiscal 2016, Nikkei discloses. The impact
on either company's core operations is likely to be limited.
Nikkei adds that Toshiba Machine made headlines in 1987 for the
so-called Toshiba Cocom affair, in which the company illegally
shipped machine tools used to make screws for submarines to the
Soviet Union. The company's conduct became a political issue and
it was not allowed to sell products in the U.S. for three years.
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.
The TCR-AP reported on Jan. 26, 2017, that S&P Global Ratings
said it has lowered its long-term corporate credit rating on
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.
====================
N E W Z E A L A N D
====================
CHRISTIAN SAVINGS: Fitch Affirms B+ LT Issuer Default Rating
------------------------------------------------------------
Fitch Ratings has affirmed Christian Savings Incorporated's
(formerly known as New Zealand Baptist Savings & Development
Society Incorporated) Long-Term Issuer Default Rating (IDR) at
'B+' with a Positive Outlook and its Short-Term IDR at 'B'.
KEY RATING DRIVERS
IDRS AND VIABILITY RATING
The affirmation of Christian Savings' IDRs and Positive Outlook
reflects ongoing improvements in its risk appetite and Fitch's
expectation that Christian Savings will continue to strengthen
risk controls and underwriting over the next year. Christian
Savings has also strengthened its management structure with the
hiring of a CFO who appears suitably qualified based on previous
experience. Despite the improvements, Christian Savings' overall
risk appetite remains weaker than other small New Zealand-based
lenders; reflective of its business model.
Fitch does not consider Christian Savings to be an aggressive
lender, although its business model and underwriting standards
could be viewed as being of higher risk than other New Zealand
lenders. Its core service is providing loans to churches; a
segment traditional lenders tend to perceive as higher-risk.
Christian Savings' loan pricing and terms are comparable with
residential mortgages, reflecting its charitable lender purpose.
Low loan/value ratios across its portfolio mitigate some of its
risk.
Christian Savings has weak capitalisation in absolute terms and
relative to other small Fitch-rated New Zealand-based lenders,
leaving its capital base more susceptible to shocks that lead to
impairments or losses. Christian Savings' low internal capital
generation reflects its business model, although its ability to
raise additional capital has improved. Fitch expects
capitalisation to remain stable in 2017, with strong loan growth
offsetting its capital raising efforts.
Christian Savings' asset quality is also likely to remain stable;
characterised by low loan impairment and write-off levels that
reflect its underwriting and well-collateralised position.
However, Fitch believes Christian Savings' low impairment ratios
do not fully reflect its credit and concentration risk. Its 10-
largest exposures accounted for around 40% of total loans at end-
January 2017, which is significantly higher than for other New
Zealand lenders.
Christian Savings' lending activities are fully funded by a
combination of church and household deposits. Household deposits
account for about half of total deposits and Fitch expects
reinvestment rates to remain at a high 80% in 2017. Christian
Savings' loan/deposit ratio is ahead of peers and it has a sound
liquidity position, although it does not have access to the
Reserve Bank of New Zealand repo facility.
SUPPORT RATING AND SUPPORT RATING FLOOR
Christian Savings' Support Rating and Support Rating Floor are
based on Fitch's view that while support from the New Zealand
sovereign (AA/Stable) is possible, it cannot be relied upon.
Christian Savings is not captured under the Open Bank Resolution
scheme, which allows for the imposition of losses on depositors
and senior debt holders when a deposit-taking institution fails.
However, Fitch sees the existence of such a framework as an
indication of a lower propensity for the sovereign to support its
banks.
RATING SENSITIVITIES
IDRs AND VIABILITY RATING
An upgrade in Christian Savings' IDRs and Viability Rating will
be driven by further improvements in its risk appetite or
meaningful increase in capitalisation. Fitch expects positive
trends in loan and asset growth, which should broaden Christian
Savings' customer base and exposure type, to lower its
concentration risk over the next year.
The Positive Outlook on the rating could be revised to Stable if
Christian Savings loses momentum in its growth prospects or if
growth is achieved at the expense of a weaker risk appetite or
underwriting standards.
SUPPORT RATING AND SUPPORT RATING FLOOR
The Support Rating and Support Rating Floor are sensitive to any
change in assumptions around the propensity or ability of the
New Zealand government to provide timely support.
SEADRAGON LTD: Expects Annual Net Loss of NZ4.5 Million
-------------------------------------------------------
Seadragon Limited expects a Normalised EBITDA for the full
financial year to March 31, 2017 to be in the range of a loss of
NZ$(4.3) million to NZ$(4.5) million (2016: loss of (NZ$0.4
million)).
"This result is a reflection of the time it has taken to
transition the business from its legacy Omega-2 business to
Omega-3 fish oils refined in the new refinery. The transition of
the business is now substantially complete, with approximately
95% of all saleable inventory of legacy products now sold," the
company said in a statement.
"To enable future sales, a key focus for the last year has been
establishing on-going supply arrangements for crude tuna oil
(CTO) for processing through our new refinery. It has taken until
the final quarter of this financial year to receive ongoing
supply of CTO in commercially relevant quantities. This has taken
longer than originally expected and was also impacted by the
seasonal nature of CTO supply, whereby we have had to wait until
key supply partners have exited alternative customer contracts.
"We now have a signed supply agreement for approximately 500,000
to 750,000 kg of CTO from the Indian Ocean over the next 12
months, along with agreed supply of approximately 500,000 to
1,000,000 kg from the South Pacific, South East Asia and South
America. This gives us a good mix of CTO going forward for
refining for key existing and potential customers in Europe,
South East Asia, Japan, Australia and New Zealand.
"We have received and processed 6 containers of CTO, each
weighing 22,000kg, so far in the current financial quarter. By
31-March-17 we expect to have received, or have enroute, an
additional 4 containers of CTO. We have yet to enter into any
contracts for the sale of the refined oil. We will continue to
work on increasing supply volumes during the next financial year.
We note that we do not expect to fully utilise our refineries
capacity in the next financial year.
"Several of our existing and potential customers are currently
evaluating samples of refined tuna oil. Although no large volume
sales contracts have been entered into yet we believe our samples
meet their specifications and are hopeful we will soon receive
orders. When we have these orders confirmed we will have
sufficient volume throughput whereby overhead allocation across
our production facility is covered leading to a more profitable
result for our shareholders."
SeaDragon Limited -- http://www.seadragon.co.nz/-- is engaged in
the manufacture of refined fish oils. The Company is a producer
of refined New Zealand fish oils, which are suitable for human
consumption. The Company's products include Omega-2 and Omega-3.
The Company's Omega-2 product can be sourced from either animal
or vegetable sources and is primarily used in the cosmetics,
nutraceutical and pharmaceutical industries and also in high-
grade lubrication and fiber coating. The Company produces over 80
tons of Omega-3 finished product from a range of species,
including approximately 60 tons from the new refinery. The
Company exports its products to various countries, which include
Australia, South East and North Asia, Japan, the European Union,
China, the United States and Canada. The Company's subsidiaries
include Omega 3 New Zealand Limited and SeaDragon Marine Oils
Limited, which are engaged in marine oil blending activities.
=================
S I N G A P O R E
=================
EZRA HOLDINGS: Misses Deadline to Settle $4.4MM Debt
----------------------------------------------------
The Strait Times reports that the debt woes of Ezra Holdings
reached fever pitch on March 3 after it revealed that it had
missed the deadline to settle a SGD4.4 million debt with
Norwegian shipowner Forland Subsea.
ST says the development puts the creditor at liberty to file for
Ezra to be wound up in Singapore's High Court.
Ezra's failed joint venture company Emas Chiyoda Subsea (ECS) had
defaulted on charter payments to Forland last year, the report
notes. Ezra, which guaranteed the contracts, is now taking the
heat.
And that is just the tip of the iceberg. In total, Ezra is the
guarantor of a whopping US$900 million (SGD1.27 billion) of ECS'
loans and liabilities, it said on March 3, ST relays.
Although ECS filed for bankruptcy protection in the United States
on Feb. 28, the Chapter 11 application does not extend to its
charter hire liabilities, the report notes.
According to the report, the Singapore court has granted a stay
order for ECS and its five Singapore-incorporated subsidiaries to
mirror the automatic stay in the US - which means that ECS is
protected from its creditors here too. But Ezra has not said
that it will apply for any stay order for itself.
ST relates that Ezra also has substantial contingent liabilities
in relation to projects undertaken by ECS, which does engineering
and construction work for oil and gas projects. These liabilities
are not yet quantifiable, Ezra said.
According to the report, Ezra, which is in the midst of
restructuring its business, said it is continuing efforts to
engage Forland. But if claims are made against it in relation to
any of the guarantees, it will be faced with an immediate "going
concern" issue, the report says.
Investors have been piling out of Ezra. Its shares plunged
0.4 cent or 21% to a fresh low of 1.5 cents on March 3 after a
trading halt was lifted.
Nevertheless, some observers have said that Ezra may just be able
to wiggle its way out of liquidation, the report says. In a
statement to the Singapore Exchange on Feb 27, it announced that
it had incorporated a new wholly-owned subsidiary, Ezra Holdings
(NY), in the US with only 200 shares at a nominal issue price per
share. Ezra has not explained what prompted it to create an
American subsidiary at such a time.
Singapore-based Ezra Holdings Limited, an investment holding
company, provides integrated offshore solutions for the oil and
gas industry. The company operates in three divisions: Subsea
Services, Offshore Support and Production Services, and Marine
Services.
EZRA HOLDINGS: Necotrans Withdraws Winding-Up Bid v. Emas Chiyoda
-----------------------------------------------------------------
The Strait Times reports that Ezra Holdings said in a bourse
filing on March 3 that Emas Chiyoda Subsea (ECS) trade creditor
Necotrans Singapore is in the process of withdrawing its winding-
up application filed against a unit of ECS in Singapore.
The Straits Times understands that although Necotrans did
withdraw its application on March 3, about six other creditors
were present at the hearing.
Among them was Keppel Shipyard, another ECS trade creditor, which
wanted to be the substitute in the application to pursue the
winding-up, but was disallowed this because of the stay order,
the report discloses.
A full hearing for the stay order will take place on March 13,
and creditors can oppose the stay then, the report notes.
ECS' largest creditors include DBS Bank and OCBC Bank, with
unsecured claims of around US$84.6 million and US$13.1 million
respectively, according to court documents cited by ST.
Keppel Shipyard has an unsecured claim of US$2.8 million, the
report discloses.
Singapore-based Ezra Holdings Limited, an investment holding
company, provides integrated offshore solutions for the oil and
gas industry. The company operates in three divisions: Subsea
Services, Offshore Support and Production Services, and Marine
Services.
====================
S O U T H K O R E A
====================
HANJIN SHIPPING: Creditors Fighting Over Sale of Container Assets
-----------------------------------------------------------------
Erica E. Phillips, writing for The Wall Street Journal, reported
that following a declaration by a Seoul court that Hanjin
Shipping Co. is bankrupt, attorneys for a handful of the shipping
company's creditors asked for permission from a New Jersey
bankruptcy court to foreclose on the container assets and sell
them.
According to the Journal, the Seoul court declared Hanjin
bankrupt and ordered the firm's liquidation, bringing about the
final chapter of the ocean-shipping industry's largest-ever
collapse. All that remains of Hanjin will be liquidated,
including ships, stakes in seaport terminals and other assets
such as its containers, the report said.
The request came days after Maher Terminals LLC, which runs one
of the Port Authority of New York and New Jersey's marine
terminals, said in a court filing that Hanjin owes more than $3
million in penalties and storage fees on 256 containers clogging
up the terminal's docks, the report related.
The presence of those containers "causes a severe backlog and
limits the space available within the Maher Facility (which space
is extremely valuable) to offload containers from ships arriving
into the port," the Journal said, citing Maher Senior Manager
Bradley Sherwin as saying in the court filing.
Mr. Sherwin and attorneys for Maher asked for permission to sell
the containers, estimating each one would yield at most $1,000 if
sold in bulk -- "significantly less than the total Storage
Charges owed by Hanjin to Maher," the report further related.
That seemed to have gotten the attention of Hanjin's creditors,
the Journal said. "Every day that the Banks are delayed from
selling the Containers significant storage charges are incurred
and the risk that the Containers are sold by the terminals or
depots where they are stranded is heightened," they wrote in the
court filing, according to the Journal.
About Hanjin Shipping
Hanjin Shipping Co., Ltd., is mainly engaged in the
transportation business through containerships, transportation
business through bulk carriers and terminal operation business.
The Debtor is a stock-listed corporation with a total of
245,269,947 issued shares (common shares, KRW 5000 per share) and
paid-in capital totaling KRW 1,226,349,735,000. Of these shares
33.23% is owned by Korean Air Lines Co., Ltd., 3.08% by Debtor
and 0.34% by employee shareholders' association.
The Company operates approximately 60 regular lines worldwide,
with 140 container or bulk vessels transporting over 100
million tons of cargo per year. It also operates 13 terminals
specialized for containers, two distribution centers and
six Off Dock Container Yards in major ports and inland areas
around the world. The Company is a member of "CKYHE," a
global shipping conference and also a partner of "The
Alliance," another global shipping conference to be
launched in April 2017.
Hanjin Shipping listed total current liabilities of KRW 6,028,543
million and total current assets of KRW 6,624,326 million as of
June 30, 2016.
As a result of the severe lack of liquidity, Hanjin applied to
the Seoul Central District Court 6th Bench of Bankruptcy Division
for the commencement of rehabilitation under the Debtor
Rehabilitation and Bankruptcy Act on Aug. 31, 2016. On the same
day, it requested and was granted a general injunction and the
preservation of disposition of the Company's assets. The Korean
Court's decision to commence the rehabilitation was made on Sept.
1, 2016. Tai-Soo Suk was appointed as the Debtor's custodian.
On Sept. 2, 2016, Hanjin Shipping Co. filed in the U.S. a
Voluntary petition under Chapter 15 of the Bankruptcy Code. The
Chapter 15 case is pending in New Jersey (Bankr. D.N.J. Case No.
16-27041) before Judge John K. Sherwood. Cole Schotz P.C.
serves as counsel to Tai-Soo Suk, the Chapter 15 petitioner and
the duly appointed foreign representative of Hanjin Shipping.
*********
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
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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
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*** End of Transmission ***