/raid1/www/Hosts/bankrupt/TCRAP_Public/170501.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, May 1, 2017, Vol. 20, No. 85
Headlines
A U S T R A L I A
AUSTRALIA WEALTH: ASIC Suspends AFS License Until October 3
CANTRO PTY: In Liquidation; Creditors' Meeting Set for May 8
ELITE LOGISTICS: Second Creditors' Meeting Set for May 4
NATIONAL FRANCHISE: First Creditors' Meeting Set for May 10
SOUTH HEAD: First Creditors' Meeting Set for May 8
WESTERN LIBERTY: Moody's Revises Outlook Pos.; Affirms Ba2 Rating
WORLDWIDE FRANCHISE: First Creditors' Meeting Set for May 10
* Worsening Housing Affordability Credit Neg. to Australian RMBS
C A M B O D I A
CAMBODIA: Move to Strengthen Finances Supports Moody's B2 Rating
C H I N A
CENTRAL CHINA: S&P Affirms 'B+' CCR & Revises Outlook to Negative
CHINA: Bond Buyers Blacklist Some Provinces After Run of Defaults
CHINA EVERGRANDE: Fitch Revises Outlook to Stable; Affirms B+ IDR
YANLORD LAND: Moody's Hikes CFR to Ba2; Outlook Stable
H O N G K O N G
NORD ANGLIA: Moody's Puts B1 CFR on Review for Downgrade
I N D I A
AMBICA CHEMICALS: Ind-Ra Migrates 'B' Rating to Non-Cooperating
AMIDEEP AUTO: Ind-Ra Migrates BB- Rating to Non-Cooperating
ATAL TEA: ICRA Assigns B- Rating to INR9.25CR Cash Loan
AVINASHI ADS: CRISIL Cuts Rating on INR5MM Cash Loan to 'B'
BALLIA NAGAR: Ind-Ra Assigns 'BB-' Long-Term Issuer Rating
BHAVANI COTEX: ICRA Reaffirms B+ Rating on INR5.0cr Cash Loan
BLISS ANAND: CRISIL Raises Rating on INR8.5MM Loan to 'B'
CAPITAL INFRAPROJECTS: Ind-Ra Affirms 'BB+' LT Issuer Rating
CHANDAN TEA: ICRA Assigns B- Rating to INR10.50cr Cash Loan
D S DEVELOPERS: ICRA Reaffirms 'B' Rating on INR10cr Loan
DENZONG ALBREW: CRISIL Reaffirms 'B-' Rating on INR17MM Loan
EMPIRE MULTIPACK: Ind-Ra Migrates 'B+' Rating to Non-cooperating
ENCORP POWERTRANS: CRISIL Reaffirms 'B' Rating on INR5MM Loan
FERIS SPINTEX: CRISIL Reaffirms 'B' Rating on INR33MM LT Loan
FINE LINES: Ind-Ra Assigns 'BB+' Long-Term Issuer Rating
HOTEL MAGIC: CRISIL Reaffirms 'B' Rating on INR3.5MM Term Loan
INDIA STEEL: Ind-Ra Migrates B- Issuer Rating to Non-cooperating
JALPAIGURI DUARS: ICRA Assigns B- Rating to INR7.71cr Loan
JUST TEXTILES: CRISIL Reaffirms 'D' Rating on INR9.2MM Cash Loan
JYOTI PROCESSORS: Ind-Ra Assigns 'BB' Long-Term Issuer Rating
K. P. SAHA: ICRA Reaffirms 'B+' Rating on INR2.69cr Term Loan
KANSARA FORGE: ICRA Reaffirms B+ Rating on INR3.50cr Term Loan
KIRPA FOODS: ICRA Reaffirms B Rating on INR25cr Capital Loan
KNOWLEDGE EDUCATION: Ind-Ra Migrates D Rating to Non-Cooperating
LAXMI VISHNU: CRISIL Assigns 'B' Rating to INR3.0MM Cash Loan
MAHAVEER INFRAENG'G: CRISIL Reaffirms 'B' Rating on INR10MM Loan
MATRIX ROLLER: Ind-Ra Migrates 'B' Rating to Non-Cooperating
MITTAPALLI AUDINARAYANA: CRISIL Reaffirms B Rating on INR56M Loan
NORTH DINAJPUR: ICRA Assigns 'B' Rating to INR6.65cr Cash Loan
PRAFFUL EXPORTS: Ind-Ra Migrates 'B' Rating to Non-Cooperating
PRESIDENCY EXPORTS: ICRA Reaffirms 'D' Rating on INR13cr Loan
R.K. NATURAL: Ind-Ra Migrates 'B' Rating to Non-Cooperating
RAMESHWAR PRASAD: Ind-Ra Migrates 'BB-' Rating to Non-Cooperating
SAMPURN AGRI: Ind-Ra Migrates 'B' Rating to Non-Cooperating
SANJAY DIESELS: Ind-Ra Migrates 'B+' Rating to Non-Cooperating
SHREEGOPAL GOBIND: ICRA Assigns B+ Rating to INR25cr Loan
SHREYANS OILS: Ind-Ra Migrates 'B' Rating to Non-Cooperating
SHRI SHYAM: ICRA Reaffirms B+ Rating on INR2.80cr Term Loan
SN BUILDCON: Ind-Ra Migrates 'B' Rating to Non-Cooperating
SUNHILL HOMES: CRISIL Reaffirms 'B' Rating on INR175MM Loan
SURI SHOES: Ind-Ra Assigns 'BB+' Long-Term Issuer Rating
VASWANI INDUSTRIES: Ind-Ra Migrates BB+ Rating to Non-Cooperating
* 35 Corporate Insolvency Resolution Processes in Progress
J A P A N
TELLMECLUB: Clients to Seek for Compensation, Call for Probe
P A P U A N E W G U I N E A
BANK OF SOUTH: S&P Affirms 'B+' ICR; Outlook Remains Negative
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A U S T R A L I A
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AUSTRALIA WEALTH: ASIC Suspends AFS License Until October 3
-----------------------------------------------------------
The Australia Securities and Investment Commission has suspended
the Australian financial services (AFS) license of Australia
Wealth Capital Group Pty Ltd until October 3, 2017, for failing
to comply with a number of key obligations as a financial
services licensee, including:
* establishing and maintaining compliance measures to ensure,
as far as reasonably practical, that the licensee complies
with financial services laws;
* lodging its financial reports within the required timeframe;
* maintaining the competence to provide the financial service
under its licence; and
* notifying ASIC of significant breaches within 10 days.
ASIC Commissioner John Price said, 'Licensees are required to
lodge financial statements and auditor reports with ASIC to
demonstrate their capacity to provide financial services.'
'Failure to comply with financial reporting and other obligations
can be an indicator of a poor compliance culture. ASIC won't
hesitate to act against licensees who do not meet these important
requirements.'
The suspension of Australia Wealth Capital Group's AFS licence is
part of ASIC's ongoing efforts to improve standards across the
financial services industry.
For the suspension order to be revoked, Australia Wealth must
first satisfy ASIC that it is able to meet all of its compliance
and financial reporting requirements.
Australia Wealth Capital Group has the right to appeal to the
Administrative Appeals Tribunal for a review of ASIC's decision.
Background
Australia Wealth Capital Group AFS license was suspended with
effect from April 26, 2017.
CANTRO PTY: In Liquidation; Creditors' Meeting Set for May 8
------------------------------------------------------------
Scott Sawyer at Sunshine Coast Daily reports that the company
behind two Coast supermarkets has gone bust, with liquidators
appointed to wind up Cantro Pty Ltd.
The Daily says dozens of staff have been left out of pocket after
Cantro, directed by Dennis Curran and owned by Dennis, Lisa and
Troy Curran went bust.
The group operated Woombye Supa IGA and Palmwoods IGA prior to
Cantro's collapse, the report says.
Weeks of speculation about the future of the stores had been
circulating prior to the appointment of liquidators, with
supplies dwindling on shelves and Woombye State School's rewards
card not being honoured, according to the report.
The report says the two supermarkets run by the Curran Group, an
arm of Cantro, were believed to have been dumped by IGA in early
March.
A staffer who asked not to be identified as she was seeking
payment of her entitlements owed by Cantro told the Daily SPAR
had taken over the store and re-hired employees.
Newcastle-based liquidators Rapsey Griffiths Insolvency and
Advisory were appointed on April 11, and a notice was issued
about the appointment on April 21, the Daily discloses.
On April 24 a second notice was issued that a meeting of Cantro
creditors would take place on May 8 at 11:00 a.m. in
Maroochydore.
According to the report, SPAR Australia's Corporate Stores
general manager Nick Koutsis said they'd taken control of both
supermarkets on March 31, and they were now Australian-owned by a
subsidiary of SPAR Australia.
He said they'd re-hired "everybody who wanted to stay on" after
the demise of the former IGA supermarkets, but added about half
of the staff had opted not to come across, frustrated by the
collapse of Cantro, the Daily relates.
ELITE LOGISTICS: Second Creditors' Meeting Set for May 4
--------------------------------------------------------
A second meeting of creditors in the proceedings of Elite
Logistics Pty Limited, Elite Logistics (Victoria) Pty Limited,
Elite Logistics (Queensland) Pty Limited, Australian Liquor
Network Pty Limited, and Elite Logistics Holdings Pty Limited,
has been set for May 4, 2017, at 3:00 p.m. at the offices of
Jones Partners Insolvency & Business Recovery,
Level 13, 189 Kent Street, in Sydney, NSW.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the
Company be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by May 3, 2017, at 3:00 p.m.
NATIONAL FRANCHISE: First Creditors' Meeting Set for May 10
-----------------------------------------------------------
A first meeting of the creditors in the proceedings of National
Franchise Insurance Brokers Pty Ltd will be held at BGC
Conference Room, Plaza Level, BGC Centre, 28 The Esplanade, in
Perth, WA, on May 10, 2017, at 12:30 p.m.
Clifford Stuart Rocke and Jeremy Joseph Nipps of Cor Cordis were
appointed as administrators of National Franchise on April 28,
2017.
SOUTH HEAD: First Creditors' Meeting Set for May 8
--------------------------------------------------
A first meeting of the creditors in the proceedings of South Head
& District Synagogue (Sydney) will be held at the Synagogue Hall
at the South Head & District Synagogue (Sydney), 664-666 Old
South Head Road, in Rose Bay, New South Wales, on May 8, 2017, at
11:00 a.m.
Anthony Elkerton and Ronald Dean-Willcocks of Dean-Willcocks
Advisory were appointed as administrators of South Head on
April 26, 2017.
WESTERN LIBERTY: Moody's Revises Outlook Pos.; Affirms Ba2 Rating
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Moody's Investors Service has revised the outlook on Western
Liberty Group Finance Pty Ltd's (WLGF) Ba2 senior secured rating
to positive from negative. At the same time, Moody's has affirmed
WLGF's Ba2 senior secured debt rating.
WLGF is a financing vehicle for Western Liberty Group Pty Ltd
(unrated), a SPV established to build and maintain the Perth
Courts project under a PPP framework.
RATINGS RATIONALE
"The change in WLGF's rating outlook to positive reflects the
materially improved refinancing prospects for its 2018 debt
maturities, after successful execution of two management
initiatives that improve the project's capacity to raise new debt
funding under current market conditions," says Spencer Ng, a
Moody's Vice President and Senior Analyst.
Refinancing risk has posed a key constraining factor for WLGF's
rating, given the project's weak debt service coverage metrics,
and the company's limited ability to increase its revenue. These
factors limited the amount of debt that the project can support
and raised concerns -- in Moody's view - over WLGF's ability to
refinance around AUD77 million of debt maturing in June 2018,
absent capital support from an external party.
"The two management initiatives, firstly the decision to replace
out-of-money interest rate swaps and secondly the reorganization
of the project's corporate structure will reduce Western Liberty
Group's future interest costs, and could also free up additional
cash flow that can be used to help service new debt raised for
the refinancing," adds Ng.
The positive rating outlook also considers improved visibility
over its equity sponsor's, IFM Investors Pty Ltd (IFM, unrated),
willingness to support WLGF's refinancing, given the amount of
capital already committed by the sponsor as part of these
initiatives.
"WLGF's debt servicing capacity remains weak, although the
additional support that would be required to manage the
refinancing task has been greatly diminished," Ng says, adding
"we believe IFM is incentivized to provide further support,
mainly because any such support will likely be less than the
value of future dividends that IFM would forego should WLGF fail
to refinance."
WLGF's Ba2 rating considers its solid operating track record over
the past 4-5 years, as well as its fixed availability payments
from a highly rated counterparty, the State of Western Australia
(Western Australian Treasury Corporation, rated Aa2 stable).
Absent refinancing risk, these credit factors support an
investment grade rating profile for WLGF.
Accordingly, WLGF's rating could be upgraded, potentially by
multiple notches, if it executes its refinancing plan while
maintaining supportive credit metrics, including DSCR of close to
1.20x, and assuming the Perth Courts project's performance does
not unexpectedly deteriorate.
On the other hand, WLGF's rating will see material downward
pressure, if Moody's believes that IFM will not provide the
required support for WLGF to achieve refinancing, or if there is
a material deterioration in WLGF's operating performance.
The principal methodology used in this rating was Operational
Privately Financed Public Infrastructure (PFI/PPP/P3) Projects
published in March 2015.
Western Liberty Group Finance Pty Ltd is the financing vehicle of
the Western Liberty Group Pty Ltd, a special purpose vehicle
which contracted with the State of Western Australia to design,
build, refurbish, finance and maintain the Perth Courts project
under a public private project framework.
Western Liberty Group Pty Ltd is ultimately owned by pooled
funds, which are managed by IFM, a global infrastructure fund
manager.
WORLDWIDE FRANCHISE: First Creditors' Meeting Set for May 10
------------------------------------------------------------
A first meeting of the creditors in the proceedings of Worldwide
Franchise Insurance Brokers Pty Ltd will be held at BGC
Conference Room, Plaza Level, BGC Centre, 28 The Esplanade, in
Perth, WA, on May 10, 2017, at 2:30 p.m.
Clifford Stuart Rocke and Jeremy Joseph Nipps of Cor Cordis were
appointed as administrators of Worldwide Franchise on April 28,
2017.
* Worsening Housing Affordability Credit Neg. to Australian RMBS
----------------------------------------------------------------
Moody's Investors Service says housing affordability deteriorated
on average across Australia over the year to March 2017, a credit
negative for Australian residential mortgage backed securities
(RMBS).
"Rising housing prices outstripped the positive effects of lower
interest rates and moderate income growth," says Alena Chen, a
Moody's Vice President and Senior Analyst.
"In the near term, Moody's expects housing affordability to
continue to deteriorate because of ongoing housing price
increases," adds Chen.
Moody's conclusions are contained in a just-released report
entitled "RMBS -- Australia: Housing Affordability Worsening Amid
Rising Property Prices".
Moody's measures housing affordability as the proportion of
household income needed to meet mortgage repayments. Less
affordable mortgages increase the risk of delinquencies and
defaults and are therefore credit negative for Australian RMBS.
On average across Australia, Australian households with two
income earners needed 27.9% of their monthly income to meet
monthly mortgage repayments in March 2017, up from 27.6% in March
2016.
Housing affordability deteriorated in Sydney, Melbourne and
Adelaide, where housing prices increased the most over the year
to March 2017, but improved in Perth and Brisbane.
While household incomes increased by an average 1.6% and average
mortgage interest rates declined by 0.35% percentage points over
the year, the positive effects of higher incomes and lower
interest rates were outweighed by the 6.4% rise in housing
prices.
Sydney remains the least affordable city in Australia, with 37.5%
of household income needed on average to meet monthly mortgage
repayments in March 2017, compared to 30.3% in Melbourne, 23.9%
in Brisbane, 23.0% in Adelaide and 19.9% in Perth.
The affordability of houses worsened over the year to March 2017,
while the affordability of apartments was unchanged.
Moody's expects new regulatory measures to restrict interest-only
mortgage lending will have some impact on demand for housing,
particularly apartments. However, upward pressure on housing
prices will likely continue in the near term amid the low
interest rate environment.
Moody's also tested the impact of changes to housing prices,
incomes and interest rates on housing affordability. Of all
Australian cities, Sydney is the most sensitive to changes in the
three variables.
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C A M B O D I A
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CAMBODIA: Move to Strengthen Finances Supports Moody's B2 Rating
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Moody's Investors Service says that Cambodia's B2 rating is
supported by ongoing efforts to strengthen government finances
and effective delivery of exchange rate stability, which increase
policy flexibility.
These factors are balanced by financial system risks, a weak
institutional framework, low incomes and a factious political
environment that constrain the credit profile.
Moody's conclusions were contained in its just-released annual
credit analysis "Government of Cambodia -- B2 Stable".
This analysis elaborates on Cambodia's credit profile in terms of
Economic Strength, Low (-); Institutional Strength, Very Low (+);
Fiscal Strength, Moderate (-), and Susceptibility to Event Risk,
Moderate (+), which are the four main analytic factors in Moody's
Sovereign Bond Rating Methodology. It does not constitute a
rating action.
Moody's report says that strengthening government revenue
collection bolsters the domestic funding base and supports
continuing high debt affordability. Meanwhile, a stable exchange
rate and price stability support foreign direct investment (FDI),
and in turn economic growth and the balance of payments.
Financial system risks could manifest in tighter liquidity
conditions, lower economic growth and contingent liabilities to
the government. Given the economy's high dollarisation levels,
the central bank has limited capability to act as a lender of
last resort. Rising political tensions and weak rule of law and
control of corruption could hinder the continuation of robust FDI
inflows and impetus for reform. In addition, the narrow economic
base and low incomes weigh on the shock absorption capacity of
the economy.
The stable outlook on the B2 rating balances both upside and
downside risks.
Credit-positive developments would include 1) steps to address
institutional weaknesses, such as the rule of law and control of
corruption, which hinder policy flexibility and effectiveness; 2)
continued strong growth in FDI that boosts GDP growth and
incomes; 3) further strengthening in policymaking institutions
that bolsters Cambodia's ability to adapt to any future tapering
in concessionary funding; and 4) a marked rise in economic
diversification that mitigates susceptibility to negative shocks.
Downward rating triggers would stem from 1) persistent strong
credit growth that points to a misallocation of lending and
inflates an already large financial system; 2) political turmoil
that undermines economic activity on a sustained basis, and 3) a
sustained, structural slowdown in the garments and tourism
industries.
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C H I N A
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CENTRAL CHINA: S&P Affirms 'B+' CCR & Revises Outlook to Negative
-----------------------------------------------------------------
S&P Global Ratings said that it has revised its rating outlook on
China-based property developer Central China Real Estate Ltd.
(CCRE) to negative from stable. At the same time, S&P affirmed
its 'B+' long-term corporate credit rating on CCRE and the
company's outstanding senior unsecured notes. As a result of the
outlook revision, S&P lowered its long-term Greater China
regional scale rating on CCRE and its outstanding notes to 'cnBB-
' from 'cnBB'.
"We revised the outlook on CCRE to negative to reflect our
expectation that the company's leverage recovery will take time,
given pricing pressure in lower-tier cities and the company's new
growth plan," said S&P Global Ratings analyst Esther Liu.
S&P anticipates CCRE's leverage will moderately improve in 2017,
but remain high, because it will recognize more projects from
jointly controlled entities (JCEs), mainly located in Zhengzhou.
At the same time, CCRE will continue to stress its balance sheet
by speeding up its construction and delivery as well as land
acquisitions, in S&P's view.
S&P affirmed the rating because it expects the company to take
steps to improve its leverage by ramping up sales, increasing
delivery, and stabilizing its profitability.
In S&P's base case, it forecasts that CCRE's debt-to-EBITDA
ratio, including the proportional consolidation of JCEs and
associates, will improve to 5x-7x in 2017, from 8x-10x in 2016.
This is driven by our forecast that the company will achieve
total contracted sales of Chinese renminbi (RMB) 21 billion-
RMB23 billion, supported by its increased saleable resources of
RMB39.4 billion and higher JCE contributions. CCRE has RMB10.8
billion in sales from JCEs, of which the company expects more
than half will be recognized in 2017. These are mainly projects
located in Zhengzhou, including Jiuru House, Sky Mansion Tianzhu,
and Tihome Jianye International City.
In S&P's view, the company's new growth plan is ambitious and may
result in volatile performance. S&P sees increasing execution
risks associated with the new growth plan. The new CEO and CFO
target to reach RMB100 billion in contracted sales in five years,
in addition to the old strategy of expanding through its asset-
light model. Therefore, S&P expects capital expenditure to be
elevated to RMB13 billion-RMB15 billion, with RMB5.5 billion-
RMB6.5 billion budgeted for land acquisitions, most of which will
be debt funded. This is despite CCRE's contracted sales being
about RMB20 billion in 2016. S&P believes the company's strategy
to drastically increase its scale is aggressive, given the
industry consolidation, the industry cycle, and the company's
focus on a single Chinese province.
S&P believes the financial risk resulting from an aggressive
expansion is partially offset by CCRE's strong cash position and
adequate liquidity . The company's cash position increased 31% to
RMB9.9 billion, from RMB7.5 billion in 2015. S&P believes the
refinancing risk is manageable in the coming 12 months, given
CCRE's limited short-term debt of RMB1.6 billion.
S&P expects margins to be stable over the next one to two years,
given the company's continued exposure in Henan province. In
S&P's view, the pricing pressure in China's lower-tier cities is
likely to persist despite policy support. More than 50% of
CCRE's contracted sales in 2016 were from lower-tier cities in
Henan, and S&P expects the trend to continue in 2017. In S&P's
base-case projection, CCRE's EBITDA margin will only slightly
improve to 18.5%-19.5%, in 2017, from 18.6% in 2016.
CCRE's unconsolidated JCEs have good quality assets and
profitability. They also provide strong cash flows that underpin
the company's large cash balance. S&P estimates sales from JCEs
will continue to be significant and account for about 35% of
CCRE's total contracted sales in 2017, compared with about 50% in
2016 and about 20% in 2015. To factor in the impact of JCEs in
S&P's analysis, it added back CCRE's debt guarantees to JCEs in
S&P's adjusted debt and the dividends from JCEs in S&P's EBITDA.
S&P also referenced the debt-to-EBITDA ratio on a proportional
consolidation basis. Most of CCRE's JCE partners are developers
and some are trust companies. S&P generally believes credit
risks of these projects are manageable, given that most are in
Zhengzhou.
CCRE's "see-through" leverage, which takes into account the
financial details of JCEs, is lower and more commensurate with a
highly leveraged financial risk profile. The lower see-through
leverage is because the JCEs have less debt; capital injections
from parent companies fund most of their land costs. This factor
supports CCRE's positive comparable rating analysis.
The negative outlook reflects S&P's view that CCRE's financial
leverage will remain high in the coming 12 months, given the
company's increasing growth appetite. Still, S&P believes CCRE
will maintain its leading position in Henan and generate stable
sales performance in the next 12 months.
S&P may lower the rating if CCRE's debt-to-EBITDA ratio on S&P's
adjusted and proportional consolidated basis shows no sign of
recovery in 2017. This could happen if the execution of the
company's debt-funded expansion is more aggressive than S&P
expected, or there are delays in project recognitions.
S&P may revise the outlook to stable if CCRE shows meaningful
improvement in its leverage due to a recovery in margins, and the
company controls its capital expenditure. An indication of that
is its ratio of debt to EBITDA on an adjusted and proportionally
consolidated basis improving toward 5x in the next 12 months and
its EBITDA interest coverage ratio remaining at about 2x
sustainably.
CHINA: Bond Buyers Blacklist Some Provinces After Run of Defaults
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Bloomberg News reports that investors are becoming more
discerning when it comes to the origin of Chinese debt.
China saw its worst start to a year on record for corporate
defaults, with companies headquartered in two eastern provinces
-- Liaoning and Shandong -- responsible for the lion's share,
Bloomberg says. The report says money managers are taking
notice, with a run of messy, high-profile company scandals
helping sour sentiment toward certain regions. Beijing's de-
leveraging drive, which has been ramped up this month and has
boosted borrowing costs, is also a factor.
"When the whole bond market is under pressure amid regulatory
checks, investors would certainly want to sell those in risky
regions first," the report quotes Nie Wen, an economist at Huabao
Trust Co. in Shanghai, which managed CNY557.5 billion ($81
billion) at the end of 2015, as saying. "As the liquidity tide
starts to ebb, it's time to see who's swimming naked."
A lot of institutions active in China's corporate bond market
have a "watch list" of regions they're wary of, Nie said, notes
the report. For many investors, which province the issuer is
based in is second only to monetary policy when it comes to
buying debt.
"With collateral and guarantees so important in the credit world,
being in a troubled place means the spillover effect could bring
problems to firms which are fundamentally healthy," the report
quotes Nie as saying.
Bloomberg News relates that the slowest-growing of China's 31
provinces, Liaoning hasn't been far from the headlines this year,
with officials in the rust-belt region admitting to falsifying
fiscal numbers for years. In the past, the bond market has
ignored differences in provinces' risk profiles on bets Beijing
will step in if they have trouble repaying liabilities, but that
may be shifting, Bloomberg says.
The Liaoning government paid the most this year to issue bonds,
while Tieling Public Asset Investment and Management Co., one of
the province's financing vehicles, failed to sell dollar debt
offshore in November, according to Bloomberg. The yield on
Liaoning's five-year notes rose one basis point on April 27 to
4.03 percent.
Liaoning is also the home of China Huishan Dairy Holdings Co.,
the Shenyang-based milk company which rocked the Hong Kong equity
market last month when its shares suddenly plunged 85% following
an emergency meeting with creditors, Bloomberg News discloses.
Dongbei Special Steel Group Co., too, hails from Liaoning. The
steelmaker, from Dalian on the Yellow Sea, was China's top
defaulter last year, missing repayments after its chairman was
found dead by hanging.
According to Bloomberg News, the Huishan Dairy case reverberated
beyond its home province, with shares of Jilin Jiutai Rural
Commercial Bank Corp., the company's second-largest creditor,
tumbling in Hong Kong on concern over the impact on its assets.
The lender is based in Jilin, which neighbors Liaoning to the
north.
In Shandong -- where two of last quarter's seven corporate
defaulters are headquartered -- local company Xiwang Foodstuffs
Co. saw its stock suspended on concern over a decision by its
controlling shareholder, Xiwang Group Co., to guarantee liability
for Shandong-based aluminum producer Qixing Group Co, Bloomberg
News discloses.
"It's not about prejudice when investors have geographical
preferences," Bloomberg quotes Li Yulong, chief investment
officer at Jyah Asset Management Co. in Shanghai, which oversees
CNY40 billion, as saying. "The reality in China is that local
governments are inextricably interwoven with local companies.
History shows the default frequency in different regions varies."
China's three northeastern provinces have higher government debt
ratios, meaning they could be harder hit by the tightening in
bond and money markets, said Nie at Huabao Trust.
"For those regions that don't have solid economic fundamentals,
we'll avoid the whole area," said He Qian, who manages the $895
million Fortis Haitong Pure Bond Fund at HFT Investment
Management Co.'s. The fund beat 84% of its peers over the past
year, Bloomberg News relays.
CHINA EVERGRANDE: Fitch Revises Outlook to Stable; Affirms B+ IDR
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Fitch Ratings has revised the Outlook on China Evergrande Group
to Stable from Negative, and affirmed the Long-Term Foreign-
Currency Issuer Default Rating (IDR) at 'B+'. Evergrande's senior
unsecured rating and the rating on all its outstanding senior
notes are affirmed at 'B-', with a Recovery Rating of 'RR6'.
The Outlook revision reflects Fitch's expectation that
Evergrande's leverage peaked at 59.6% in 2015 and is showing
signs of stabilisation in 2016 at 59%. This observation is also
supported by its lower payable-to-gross inventory ratio of 0.42x
compared with 0.46x in 2015, suggesting that the improvement in
leverage did not stem from the use of supplier credits.
Evergrande has also increased its land bank in tier 1 and 2
cities and has become less exposed to the more volatile housing
markets in the lower-tier cities.
Evergrande's leverage is likely to remain high in the 50% to 60%
range and this continues to constrain its ratings. Its high
interest expenses and high dividend payout ratio keeps free cash
flow largely negative, which prevents it from deleveraging
significantly.
KEY RATING DRIVERS
Leverage has Stopped Rising: Evergrande in 2016 arrested the rise
in its leverage and payables-to-gross inventory ratio, which had
been rising since 2010. The improvements came despite Evergrande
making its largest land acquisition to date in 2016, with a
commitment of CNY203 billion, although the company has yet to
make a significant payment. Its payable for land use rights
acquired rose to CNY36.3 billion in 2016 from CNY13.7 billion in
2015.
The strong 85% growth in contracted sales to CNY373 billion in
2016 helped to stop the rise in leverage. Fitch does not expect
further significant improvement in leverage as Evergrande will
need to fund construction of the projects sold, which have
increased rapidly. Evergrande faces pressure to sustain its
current large sales amount to meet the construction expenditure.
Stronger Land Bank Profile: Evergrande has shifted its sales away
from lower-tier cities, reducing risks to sales and
profitability. The company's land bank has swung sharply to tier
1 and 2 cities, with these two categories making up 74.7% of its
land bank by value and 57.9% by gross floor area at end-2016.
Contracted sales from tier 1 and 2 cities accounted for 67.4% of
total sales in 2016, compared with 59% in 2015. Evergrande's
average selling price (ASP) is still rising and reached CNY10,160
per square metre (sq m) in March 2017 and CNY9,465 per sq m in
1Q17 from CNY8,355 in 2016.
Large Interest Burden: Evergrande's gross interest expense and
distributions to holders of perpetual capital instruments in 2016
totalled CNY42.3 billion, a jump from CNY25.4 billion in 2015.
Evergrande's gross interest expense exceeded capitalised interest
for the first time. Interest expenses as a proportion of
contracted sales improved to 11.3% from 12.5% in 2015, although
the improvement is much smaller if an adjustment for Evergrande's
cheaper funding cost in 2016 is included. Fitch believes that
Evergrande's high expenditure will continue to limit its
operating cash flow generation and limit its ability to
deleverage meaningfully.
Shareholder-Friendly Moves Pressure Credit: Evergrande has bought
back shares totalling HKD3.6 billion (CNY3.2 billion) since 29
March 2017, after its 2016 results announcement. Evergrande also
plans to make dividend payment of 50% of distributable profit of
2016 and 1H17, only after it successfully lists its onshore
property operation in China's A-share market, despite sustaining
high negative FCF before dividend. This puts creditors at a
disadvantage as the company is not building up a healthy buffer
to improve its financial flexibility.
Recovery Rating Remains at 'RR6': Evergrande's Recovery Rating
remains weak because of its debt-funded expansion and heavy
reliance on onshore debt that is senior to its US dollar senior
unsecured notes. Fitch recovery rating analysis does not take
into account the company's large cash balance of CNY198 billion
at end-2016, as Fitch ascribes no recovery value to it because it
may substantially be used to meet operational and financial
commitments. This approach is in line with Fitch's "Recovery
Ratings and Notching Criteria for Non-Financial Corporate
Issuers" criteria dated November 21, 2016, where Fitch's general
assumption is that cash on the balance sheet is depleted during
or before a potential bankruptcy.
DERIVATION SUMMARY
Evergrande's business profile is more reflective of that of 'BB'
category peers as Evergrande has a diversified geographical and
product profile. This offsets its very aggressive financial
profile, which is comparable to that of companies in the weak 'B'
category.
Its peers, like Country Garden Holdings Co. Ltd. (BB+/Stable),
Greenland Holding Group Company Limited (BB+/Negative) and Sunac
China Holdings Limited (BB/Negative), are similarly aggressive in
expanding their scale and are among the 10 largest Chinese
homebuilders.
Country Garden's leverage of around 30% and churn rate of over
1.5x, is commensurate with a high 'BB' category profile and
explains the multiple notch rating gap between it and Evergrande.
Greenland's leverage is as high as Evergrande's but Greenland has
a large level of uncollected sales to mitigate its high leverage.
Greenland, as a state-owned enterprise, has a stronger position
in acquiring land at low costs, especially for new city districts
that local governments are keen to develop. This enhances
Greenland's business profile over that of Evergrande. Sunac's
leverage is low at between 40%-50% and it does not have high
payables risks, unlike Evergrande. Sunac's sales are also mostly
in major cities and is reflected by its higher ASP of CNY20,480
per sq m, more than double that of Evergrande.
KEY ASSUMPTIONS
Fitch's key assumptions within its rating case for the issuer
include:
- large homebuilders continue to win market share, which
supports Evergrande's aim to increase sales by 15% to 25%
between 2017 and 2019
- ASP in 2017 to match 1Q17 level and continue to climb at
around 3%-5% thereafter, with higher-tier cities making up a
larger share of sales
- land acquisition volume to stay at 120% of the gross floor
area sold in the same year
- trade payables and receivables to grow in line with contracted
sales growth
RATING SENSITIVITIES
Developments That May, Individually or Collectively, Lead to
Positive Rating Action
- Net debt/adjusted inventory sustained below 50% (59% in 2016)
- Contracted sales/gross debt sustained above 0.8x (0.57x in
2016)
- EBITDA margin sustained above 18% (16.5% in 2016)
Developments That May, Individually or Collectively, Lead to
Negative Rating Action
- Net debt/adjusted inventory sustained above 60%
- Total payables/gross inventory sustained above 0.45x (0.42x
in 2016)
- Tighter liquidity position due to weaker access to financing
channels
LIQUIDITY
Large Liquidity Gives Flexibility: Evergrande has continued to
maintain a large cash balance totalling CNY304 billion, including
CNY106 billion of restricted cash, and CNY138 billion of
available undrawn but uncommitted facilities to meet its debt
servicing and operation needs. This was higher than CNY164
billion in total cash (CNY61 billion restricted) and CNY155
billion in facilities in 2015. The company also issued USD2.5
billion of senior notes in 1Q17 to refinance its existing debts.
FULL LIST OF RATING ACTIONS
China Evergrande Group
-- Long-Term IDR affirmed at 'B+', Outlook revised to Stable
from Negative
-- Senior unsecured debt rating affirmed at 'B-', with Recovery
Rating of 'RR6'
-- USD300 million 8% senior notes due 2019 affirmed at 'B-',
with Recovery Rating of 'RR6'
-- USD500 million 7% senior notes due 2020 affirmed at 'B-',
with Recovery Rating of 'RR6'
-- USD1billion 8.25% senior notes due 2022 affirmed at 'B-',
with Recovery Rating of 'RR6'
-- USD1 billion 9.5% senior notes due 2024 affirmed at 'B-',
with Recovery Rating of 'RR6'
YANLORD LAND: Moody's Hikes CFR to Ba2; Outlook Stable
------------------------------------------------------
Moody's Investors Service has upgraded Yanlord Land Group
Limited's corporate family and senior unsecured debt ratings to
Ba2 from Ba3. Moody's has also upgraded to Ba2 from Ba3 the
senior unsecured rating of the USD notes issued by Yanlord Land
(HK) Co., Limited and irrevocably and unconditionally guaranteed
by Yanlord Land Group Limited.
At the same time, Moody's has changed the ratings outlook to
stable from positive.
RATINGS RATIONALE
"The ratings upgrade reflects Moody's expectations that Yanlord's
credit metrics will be stronger and better than those of its Ba3
rated Chinese property peers, as it will continue its track
record of prudent financial and liquidity management," says
Anthony Lee, a Moody's Analyst.
Yanlord's prudent financial management -- with a focus on
containing debt growth and maintaining a good liquidity position
-- supports the rating upgrade.
The company's contracted sales grew by 174% and its revenues by
149% over 2012-2016, while its reported debt grew by 73% in the
same period.
This measured growth in debt is supported by Yanlord's business
strategy of developing quality properties and keeping its sales
growth at a moderate rate. This strategy in turn has underpinned
its manageable capital requirements.
Consequently, its contracted sales grew at a compound annual
growth rate of 29% over 2012-2016.
The company's business strategy also helps it maintain growth in
its average selling prices (ASP) and slow down the decline in its
gross margins. The ASP of its contracted sales increased from
around RMB23,100 per square meter (sqm) in 2012 to around
RMB30,900 per sqm in 2016, while its gross margins declined from
36.4% to 31.2% over the same period. The company's ASP and
margins were higher than those of its Ba-rated property peers.
Debt growth is also contained by Yanlord's land acquisition
strategy. Moody's estimates its aggregate land acquisition
payments (excluding joint ventures and associates) amounted to
RMB26.4 billion over 2012-2016, representing 27% of its aggregate
contacted sales (excluding joint ventures and associates) of
RMB99 billion over the same period. This level was low when
compared to more than 30% reported by some of its rated peers.
Notwithstanding this cautious land acquisition strategy, the
company's land bank of 5.9 million sqm at end-2016 can support
its development plans over the next 4-5 years, in turn enabling
it to exercise discretion in its land acquisitions -- one of the
company's strength.
Yanlord recorded sound credit metrics in 2016. It achieved
revenue/adjusted debt of 102% and EBIT/interest of 5.7x in 2016.
Moody's estimates that its revenue/adjusted debt and
EBIT/interest will be above 100% and over 5x respectively in the
next 12-18 months. These levels support its Ba2 corporate family
rating.
The company had RMB18 billion in cash at end-2016, covering 177%
and 80% of its short-term debt and gross debt respectively. Its
strong liquidity position provides it with a buffer against
market volatility and the negative impact from tightening policy
measures.
Yanlord's Ba2 corporate family rating reflects its good brand
name and high-quality properties, which provide it with strong
pricing power and support its healthy gross margin. In addition,
its sales execution strategy -- adjusted to cater to a broad
spectrum of market demand -- helps to reduce the negative impact
from regulatory measures that constrain property demand.
The rating also considers Yanlord's good ability to access the
debt and capital markets.
At the same time, the rating is constrained by its geographic
concentration, moderate scale with volatility in its sales, and
the potential impact of tightening measures on its property
purchases in key operating cities.
The stable outlook reflects Moody's expectation that Yanlord will
maintain a disciplined approach in its land acquisitions,
moderate growth in scale, stable financial metrics and a strong
liquidity position over the next 12-18 months.
Upward rating pressure could emerge if Yanlord increases its
scale, while maintaining (1) a strong liquidity position; and (2)
sound credit metrics, with adjusted revenue/debt above 100% and
EBIT/interest coverage above 4.5x on a sustained basis.
On the other hand, rating downgrade pressure could emerge if the
company's contracted sales fall and credit metrics weaken, with
EBIT/interest coverage falling below 3.5x, or adjusted
revenue/debt falling below 80%.
The principal methodology used in these ratings was Homebuilding
And Property Development Industry published in April 2015.
Yanlord Land Group Limited is a major property developer in
China. It operates in the major Chinese cities of Shanghai,
Nanjing, Suzhou, Nantong, Shenzhen, Tianjin, Zhuhai, Chengdu,
Tangshan, Zhongshan and Sanya. Yanlord was established in 1993
and Yanlord Land Group Limited was listed on the Singapore Stock
Exchange in 2006. Its land bank totaled 5.9 million square meters
at end-2016.
================
H O N G K O N G
================
NORD ANGLIA: Moody's Puts B1 CFR on Review for Downgrade
--------------------------------------------------------
Moody's Investors Service has placed the ratings of Nord Anglia
Education, Inc (NAE) on review for downgrade. Specifically, the
company's B1 corporate family rating, as well as the B1 ratings
on its $865 million senior secured term loan B, $125 million
senior secured revolving credit facility, and CHF200 million
senior secured notes, which were issued by Nord Anglia Education
Finance LLC., have been placed on review for downgrade.
RATINGS RATIONALE
The rating action follows the announcement made on 25 April 2017
that a consortium of investors, led by the Canada Pension Plan
Investment Board and Baring Private Equity Asia, entered into an
agreement with NAE to acquire NAE for a total transaction value
of $4.3 billion, including the repayment of debt.
"There is a significant likelihood of NAE's financial leverage
rising upon the completion of the transaction, because the buyers
will likely incur more debt to finance the transaction," says
Stephanie Lau, a Moody's Assistant Vice President and Analyst.
Moody's also notes that NAE's leverage level was high even before
the buyout was announced. At end-August 2016, its adjusted
debt/EBITDA registered 7.3x, which was high for its B1 corporate
family rating. Given its elevated leverage, an even higher debt
level would put immediate pressure on its ratings.
Moody's will continue to monitor the development of the
transaction.
NAE's B1 corporate family rating is supported by its solid
operating margins, the predictable nature of its revenue, good
geographic diversification and good liquidity. At the same time,
the rating is constrained by the company's high financial
leverage and its appetite for growth.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
Nord Anglia Education, Inc is headquartered in Hong Kong and
operates 43 international premium schools in Asia, Europe, the
Middle East, and North America, with more than 37,000 students
ranging in level from pre-school through to secondary school. NAE
also provides curriculum products through its Learning Services
division.
For the 12 months ended November 30, 2016, NAE generated revenues
of about $873 million.
=========
I N D I A
=========
AMBICA CHEMICALS: Ind-Ra Migrates 'B' Rating to Non-Cooperating
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Ambica
Chemicals' Long-Term Issuer Rating to the non-cooperating
category. The issuer did not participate in the surveillance
exercise, despite continuous requests and follow-ups by the
agency. Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will
now appear as 'IND B(ISSUER NOT COOPERATING)' on the agency's
website. Instrument-wise rating actions are:
-- INR42.2 mil. Term loan migrated to Non-Cooperating
Category; and
-- INR23.8 mil. Fund-based working capital limit migrated to
Non-Cooperating Category
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
Feb. 4, 2016. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Incorporated in 1989, Ambica Chemicals is a proprietorship firm
engaged in the manufacturing of nebivolol hydrochloride and drug
intermediates.
AMIDEEP AUTO: Ind-Ra Migrates BB- Rating to Non-Cooperating
-----------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Amideep
Automobiles' Long-Term Issuer Rating to the non-cooperating
category. The issuer did not participate in the surveillance
exercise, despite continuous requests and follow-ups by the
agency. Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will
now appear as 'IND BB-(ISSUER NOT COOPERATING)' on the agency's
website. Instrument-wise rating actions are:
-- INR95 mil. Fund-based working capital facilities migrated to
Non-Cooperating Category
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
Jan. 8, 2016. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Amideep Automobiles commenced operations as a family-owned
partnership firm in 2012 and is an authorised dealer of Honda
motorcycles and scooters in India.
ATAL TEA: ICRA Assigns B- Rating to INR9.25CR Cash Loan
-------------------------------------------------------
ICRA has assigned the long-term rating of [ICRA]B- to the
INR9.25-crore cash-credit facility of Atal Tea Company (1943)
Limited. ICRA has also assigned the short-term rating of [ICRA]A4
to the INR0.50-crore bank guarantee of ATCL. The outlook on the
long term rating is Stable.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
LT-Cash Credit
Limits 9.25 [ICRA]B- (Stable) assigned
ST-Bank Guarantee 0.50 [ICRA]A4 assigned
Detailed rationale
The assigned ratings consider ATCL's weak financial risk profile
as reflected by continuous net losses, depressed level of
coverage indicators and negative net worth on account of past
accumulated losses. The ratings also take into account ATCL's
small scale of current operations, and its significant dependence
on purchased leaves, which increases the market risks related to
its availability, quality and price to a large extent. The
ratings also factor in the risks associated with tea being an
agricultural commodity, which is dependent on agro-climatic
conditions as well as the inherent cyclicality of the fixed cost
intensive tea industry, thus leading to variability in
profitability and cash flows of bulk tea producers such as ATCL.
The risks get accentuated for ATCL because of the presence of a
single tea estate located in the Terai region in West Bengal. In
addition, domestic tea prices to a large extent are influenced by
international prices and hence the demand-supply situation in the
global tea market, in ICRA's opinion, would continue to impact
the profitability of Indian players, including ATCL. ICRA also
takes note of the lower average realisations ATCL's tea commands
as compared to the average auction prices in the overall North
Indian region.
The ratings, however, favorably consider the management's
experience in the tea business and its status as a part of the
New Tea Group, which provides some financial flexibility in terms
of access to bank finance.
Going forward, ICRA expects ATCL's financial profile to remain
unfavorable, due to its negative cash accruals, as well as
stretched liquidity position.
Key rating drivers
Credit Strengths
* Experience of the management in the tea industry
* Status as a part of the New Tea Group, which provides some
financial flexibility in terms of access to bank finance
Credit Weaknesses
* Weak financial profile characterised by net losses, depressed
level of coverage indicators and negative net worth on account
of past accumulated losses
* High dependence on purchased leaves, which increases the risks
related to its availability, quality and price to a large
extent
* Lower average realisation compared to average auction prices
of the overall North Indian region
* Only one tea estate in the Terai region in West Bengal, which
increases the company's exposure to unfavorable agro-climatic
conditions affecting production
Description of key rating drivers:
ATCL is a small player in the domestic tea industry and a
producer of the CTC (crush, tear, curl) variety of tea. The
company has five CTC lines with an annual production capacity of
1.3 million kg of black tea of the CTC variety. The average
capacity utilisation of the company has been around 90% in the
past few years. During FY2016, with around 372 Ha (hectares) of
area under tea cultivation, the company produced 1.03 million kg
of tea. Since green leaves sourced from its own garden remain
inadequate to meet the actual requirement, the company remains
dependent on purchased leaves procured from local gardens (around
35% of the total consumed leaves were bought from external
gardens in FY2016), which in turn exposes ATCL to the
availability, quality and price risks associated with purchased
leaves. The company also remains exposed to the geographical
concentration risk as it has only one tea estate located in the
district of Darjeeling, West Bengal resulting in high sensitivity
of its production to agro-climatic conditions and exposure to the
vagaries of nature. ATCL's tea fetches lower realisations as
compared to the average North Indian auction prices, adversely
affecting its profitability. In addition, domestic tea prices to
a large extent are determined by international prices and hence
the demand-supply situation in the global tea market, in ICRA's
opinion, would continue to influence the profitability of Indian
players including ATCL. The out-turn ratio of tea produced by
ATCL has, however, been in line with the industry standard and
stood at 23.45% in FY2016. The company sells tea through a mix of
consignment sales, private sales and sales through auction
market. The company markets tea under the brand name of
'Satbhaiya' (manufactured from purchased leaves) and 'Atal Tea'
(manufactured from leaves of own garden).
ATCL's operating income grew at a compounded annual growth rate
of around 5% from FY2012 to FY2016, primarily on account of the
increase in the average realisation. During the first eight
months of FY2017 the company reported a turnover of INR10.27
crore. The operating profit margin (OPM) of the company has
declined over the last couple of years on account of increase in
the operating expenses. The company's net margins followed its
operating margins, and declined further due to increase in the
interest and finance cost leading to net losses suffered by the
company from FY2014 onwards which increased to INR1.37 crore net
loss in FY2016. ATCL had incurred losses till FY2007, resulting
in a complete erosion of its net worth by March 31, 2007.
Although the company has been making profits since from FY2008
till FY2013 on the back of increased average realisations, the
company's net worth continues to remain negative reflecting a
highly adverse capital structure. Additionally, the coverage
indicators of the company continue to remain at depressed level,
as reflected by an interest coverage ratio of 2.04 times,
NCA/Total Debt of -6% and Total Debt/OPBDITA of 14.27 times in
FY2017, reflecting an unfavourable financial profile.
Incorporated in 1942, ATCL, manufactures black tea of CTC
variety. The company is being managed by the Agarwal and the
Bansal family, based in Kolkata, who are in the tea industry for
a long time. The company has one tea garden named 'Atal Tea
Estate' and a factory in the district of Darjeeling, West Bengal.
The company has five CTC lines with an annual installed capacity
to produce 1.3 million kg of black tea. The company markets tea
under the brand name of 'Atal Tea' and 'Satbhaiya.'
The company reported operating income of INR10.27 crore in 8M
FY2017 compared to a net loss of INR1.37 crore on an operating
income of INR15.65 crore during FY2016.
AVINASHI ADS: CRISIL Cuts Rating on INR5MM Cash Loan to 'B'
-----------------------------------------------------------
CRISIL has been consistently following up with Avinashi Ads for
obtaining information through letters and emails dated
January 20, 2017 and February 9, 2017 among others, apart from
telephonic communication. However, the issuer has remained non
cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 4 CRISIL A4 (Issuer Not
Cooperating; Downgraded
from CRISIL A4+)
Cash Credit 5 CRISIL B/Stable (Issuer Not
Cooperating; Downgraded
from CRISIL A4+)
'The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of Avinashi Ads. This restricts
CRISIL's ability to take a forward looking view on the credit
quality of the entity. CRISIL believes that the information
available for Avinashi Ads is consistent with 'Scenario 1'
outlined in the 'Framework for Assessing Consistency of
Information with CRISIL B rating category or lower.' Based on the
last available information, CRISIL has downgraded the rating to
CRISIL B/Stable/CRISIL A4.
Avinashi, promoted by Mrs. Ambuja A Talwar, was set up in 2000;
it provides out-of-home advertising solutions. The firm has
hoarding rights on railway stations in Bengaluru and several
private hoardings in Bengaluru and Mysore.
BALLIA NAGAR: Ind-Ra Assigns 'BB-' Long-Term Issuer Rating
----------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Ballia Nagar
Palika Parishad (BNPP) a Long-Term Issuer Rating of 'IND BB-'.
The Outlook is Stable.
KEY RATING DRIVERS
Ballia Nagar has inadequate civic infrastructure, which affects
the municipality's growth. There is lack of proper water supply
services and sewerage systems in the town. However, there is
scope for an improvement in the infrastructure facilities due to
its selection under the Atal Mission for Rejuvenation and Urban
Transformation (AMRUT) scheme.
Ballia jurisdiction is only 16 sq km, with a population of
104,424. Economic activities in the town are not buoyant, and
taxes, on average, contributed 4.81% to the total revenue over
FY12-FY16. The municipality's own non-tax revenue mainly
emanates from fees and rental income from municipal properties,
with an average contribution of 63.33% and 20%, respectively, to
the total non-tax revenue during FY12-FY16.
BNPP has a high level of dependence on the Uttar Pradesh
government. It receives compensation in lieu of stamp duty and
revenue grants and contributions. Revenue compensation and
revenue grants cumulatively contributed 87.8% to the total
revenue income during FY12-FY16.
BNPP reported a moderate financial performance for FY16. Revenue
receipts increased at a CAGR of 23.26% to INR230.9 million in
FY16 from INR100.04 million in FY12. Given it is a nagar palika
parishad, BNPP's revenue sources comprise tax revenue and non-tax
revenue, which contributed, on average, 4.81% and 2.5% to the
total revenue income, respectively, during FY12-FY16.
RATING SENSITIVITIES
Positive: A significant improvement in BNPP's operating
performance and timely execution of smart city and AMRUT projects
would be positive for the rating.
Negative: An unexpected withdrawal of revenue support by the
Uttar Pradesh government, without a suitable compensatory plan,
would trigger a negative rating action.
COMPANY PROFILE
Ballia is located in the eastern part of Uttar Pradesh bordering
Bihar. Bhojpuri is the primary language. The city is well
connected to Varanasi and Gorakhpur by both road and railway, and
to Patna by road. Ballia has a major railway station by the same
name that handles about 35 trains daily. Dadri Mela, a prominent
cattle fair of Uttar Pradesh, is organised every year in October
or November on Kartik Purnima at Dadri, Ballia.
Ballia is administered by BNPP. According to the 2011 census,
Ballia had a population of 104,424, with an average literacy rate
of 83.33% and a sex ratio of 883 females per 1,000 males.
BHAVANI COTEX: ICRA Reaffirms B+ Rating on INR5.0cr Cash Loan
-------------------------------------------------------------
ICRA has reaffirmed the long-term rating of [ICRA]B+ to the
INR0.60 crore term loan facility and the INR5.00 crore cash
credit facility of Bhavani Cotex (BC). The outlook assigned on
the long-term rating is 'Stable'.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-based Term Loan 0.60 [ICRA]B+ (Stable) reaffirmed
Fund-based Cash Credit 5.00 [ICRA]B+ (Stable) reaffirmed
Rationale
The reaffirmation of the rating continues to factor BC's modest
scale of operations and financial profile characterised by a
leveraged capital structure, weak debt coverage indicators and
high working capital intensity of operations owing to high
inventory levels. BC's operating profit remains vulnerable to
adverse movements in raw cotton prices, which are subject to
seasonality, crop harvest and Government regulations regarding
Minimum Support Price (MSP) of raw cotton and export of cotton
bales. ICRA further notes that the limited value-added nature of
its operations, coupled with the intense competition and the
fragmented industry structure, arising from low entry barriers,
exert further pressure on the firm's profitability margins.
Furthermore, the rating considers the potential adverse impact on
net-worth and gearing level in case of any substantial withdrawal
from capital accounts, given its constitution as a partnership
firm.
The rating, however, continues to draw comfort from the
substantial experience of the promoters in the cotton industry
and the locational advantage of the firm from its presence in the
cotton producing state of Gujarat, giving its easy access to
quality raw cotton.
Going forward, the firm's ability to increase its scale of
operations and maintain adequate profitability, given the
seasonality in the business, fluctuation in raw material price,
highly competitive business environment and improve its capital
structure by effectively managing working capital requirements
would remain the key rating sensitivities.
Key rating drivers
Credit strengths
* Experience of promoters in the cotton ginning business
* Favourable location of the plant in the cotton producing belt
of India, giving it easy access to raw cotton.
Credit weaknesses
* Financial risk profile characterised by moderate scale of
operations, stretched capital structure, weak debt coverage
indicators and high working capital intensive nature of
operations.
* Limited value addition; highly competitive and fragmented
industry structure with low entry barriers restricts pricing
flexibility.
* Profitability is vulnerable to adverse movements in raw cotton
prices and regulatory policy changes in terms of exports and
MSP
* Risk inherent in partnership firm with respect to capital
withdrawals and its potential impact on credit profile
Description of key rating drivers:
The rating reaffirmation reflects the firm's weak financial
profile marked by stretched capital structure as reflected in
gearing of 4.22 times as on March 31, 2016, weak debt coverage
indicators (NCA/TD of 5.74% and Total Debt/OPBDITA of 7.77 times
in FY2016) and high working capital intensity driven by high
inventory holding, which stood at 100 days in FY2016.
Furthermore, BC's operations remain modest with the firm
recording an operating income of INR22.74 crore in FY2016 as
compared to INR15.05 crore in FY2015. Owing to the limited value
additive nature of operations, the firm's profitability remains
moderate.
Additionally, BC's profits remain vulnerable to any adverse
movements in raw cotton prices, which are subject to seasonality,
crop harvest and Government regulations regarding MSP of raw
cotton and export of cotton bales. The cotton ginning and
crushing industry is highly fragmented and competitive with
numerous players operating in Gujarat due to low entry barriers,
which further restricts the pricing flexibility of the firm.
However, the experience of partners in the industry and the
location of the firm's manufacturing facility at Vadodara in
Gujarat, which is one of the largest cotton producing states in
the country, provide some comfort.
Established in 2010 as a partnership firm, Bhavani Cotex is in
the business of ginning and pressing raw cotton. In FY2015, BC
commenced crushing of cottonseeds. Its manufacturing facility is
at Bodeli in Vadodara (Gujarat). It is equipped with 32 ginning
machines, a pressing machine and five crushing machines with a
processing capacity of 300 cotton bales and 3 Metric Tonnes (MT)
of cottonseed oil per day (24-hour operations). The firm is owned
and managed by three partners - Mr. Gordhanbhai Patel, Mr.
Rakeshbhai Patel and Mr. Naineshbhai Patel - with extensive
experience in the cotton industry.
For FY2016, BC reported an operating income of INR22.74 crore,
with a net profit of INR0.15 crore, as against an operating
income of INR15.05 crore with a net profit of INR0.22 crore in
FY2015.
BLISS ANAND: CRISIL Raises Rating on INR8.5MM Loan to 'B'
---------------------------------------------------------
CRISIL has upgraded its ratings on the bank facilities of Bliss
Anand Private Limited (BAPL) to 'CRISIL B/Stable/CRISIL A4' from
'CRISIL D/CRISIL D'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 8 CRISIL A4 (Upgraded from
'CRISIL D')
Bill Discounting 8.5 CRISIL B/Stable (Upgraded
from 'CRISIL D')
Cash Credit 6.5 CRISIL B/Stable (Upgraded
from 'CRISIL D')
Rupee Term Loan 2.0 CRISIL B/Stable (Upgraded
from 'CRISIL D')
The upgrade reflects timely servicing of debt on back of quick
realization of receivables and surplus net cash accrual
generation by the company during fiscal 2016. During fiscal 2016,
the company generated net cash accruals of INR2.37 crore against
debt repayment obligations of INR0.82 crore.
Key Rating Drivers & Detailed Description
Weakness
* Modest scale of, and working capital intensive operations: With
turnover of INR51.23 crore as on March 2016, the scale remains
modest on account of tender-based operations. Further the
operations are working capital intensive, as reflected in high
gross current assets (GCAs) of 383 days as on March 2016. The
same is majorly driven by the company's large debtor and
inventory requirement.
* Below average financial risk profile: Debt protection metrics
are subdued, with low but stable interest coverage ratio at 1.5
times over the past four years through fiscal 2016. Gearing was
high, at 3.5 time, as on March 31, 2016 on account of higher
dependence on external debt.
Strength
* Long-standing presence in the industry and established customer
base: Established in 1975, Mr. Anand has extensive experience in
the industry and has developed technical expertise and
established business relationship with its overseas and domestic
customers.
Outlook: Stable
CRISIL believes that BAPL will continue to benefit from the long-
standing presence and established relationship with its
customers. The outlook may be revised to 'Positive' if the
company's higher-than-expected sales and improvement in the
working capital cycle result in a better financial risk profile.
Conversely, the outlook may be revised to 'Negative' in case of
low profitability, or if BAPL undertakes large debt-funded
capital expenditure leading to further deterioration in its
financial risk profile.
Incorporated in 1975 by Late Mr. Prem Anand, BAPL manufactures
level gauges'equipment used for flow and level measurement and
control'and safety relief valves for application in the oil and
gas sector. The company has manufacturing facilities in Bawal
(Haryana) and its corporate office is based in Manesar (Haryana)
currently managed by Mr. Vikas Anand, Mr. Gaurav Anand, and Mr.
Kunal Anand.
BAPL had net profit of INR0.64 crore on net sales of INR50.11
crore in 2015-16 (refers to financial year, April 1 to March 31),
against net profit of INR0.57 crore on net sales of INR45.89
crore in 2014-15.
CAPITAL INFRAPROJECTS: Ind-Ra Affirms 'BB+' LT Issuer Rating
------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed Capital
Infraprojects Private Limited's (CIPL) Long-Term Issuer Rating at
'IND BB+'. The Outlook is Stable. The instrument-wise rating
actions is:
-- INR1 bil. Term loan affirmed with 'IND BB+/Stable' rating
KEY RATING DRIVERS
The affirmation reflects the time and cost overrun risks in
CIPL's ongoing project, The Golden Palms, in Noida. Around 901
flats were sold till December 2016 (December 2015: 839 flats).
The ratings are supported by CIPL's promoter's experience of over
four decades in the residential and commercial real estate space.
Also, CIPL is a joint venture between IITL Projects Limited, a
subsidiary of Industrial Investment Trust Limited, and Nimbus
Group. The ratings are further supported by the project being
located 7 km. from Sector 168's market on the Greater Noida
Expressway. Moreover, the project is in the vicinity of Jaypee
Hospital, Genesis Global School and Amity University.
The project is in the advance stage of completion, with major
expenses already incurred. According to the management, CIPL has
already incurred INR4.279 billion (73%) of the total cost and
will spend additional INR1.620 billion (27%).
RATING SENSITIVITIES
Negative: Time and cost overruns or cancellations of sold units,
leading to stressed cash flows, could lead to a negative rating
action.
Positive: An improvement in sales and timely receipt of advances
from customers, leading to stronger cash flows, could lead to a
positive rating action.
COMPANY PROFILE
CIPL was incorporated in 2010 as a private limited company and
constructs residential and commercial real estate projects.
Upon completion, the project will have 1,408 units (1, 2, 3 and 4
BHK) spread across 13 towers with areas ranging from 506sf. to
2,473sf. The complex will have a commercial area, club house,
gym, play area, community hall, business lounge and space for
yoga/meditation.
CHANDAN TEA: ICRA Assigns B- Rating to INR10.50cr Cash Loan
-----------------------------------------------------------
ICRA has assigned a long-term rating of [ICRA]B- to the INR10.50-
crore cash credit limit of Chandan Tea Industries Private Limited
(CTIPL). ICRA has also assigned a short-term rating of [ICRA]A4
to the INR0.50-crore non-fund based bank facility of CTIPL. The
outlook on the long term rating is Stable.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
LT-Cash Credit
Limits 10.50 [ICRA]B- (Stable) assigned
ST-Bank Guarantee 0.50 [ICRA]A4 assigned
Detailed Rationale
The assigned ratings consider the weak financial profile of CTIPL
as reflected by the continuous net losses, depressed level of
coverage indicators and the negative net worth on account of the
past accumulated losses. The ratings also take into account
CTIPL's significant dependence on purchased leaves, which
increases the market risks related to its availability, quality
and price to a large extent. The ratings also factor in the risks
associated with tea being an agricultural commodity, which is
dependent on agro-climatic conditions as well as the inherent
cyclicality of the fixed cost intensive tea industry, thus
leading to variability in profitability and cash flows of bulk
tea producers such as CTIPL. The risks get accentuated for CTIPL
because of the presence of a single tea estate located in the
Terai region in West Bengal. In addition, domestic tea prices to
a large extent are influenced by international prices and hence
the demand-supply situation in the global tea market, in ICRA's
opinion, would continue to impact the profitability of Indian
players including CTIPL. ICRA also takes note of the lower
average realisation CTIPL's tea commands as compared to the
average auction prices in North India.
The ratings, however, favorably considers the experience of the
management in the tea business and status of the entity as a part
of the New Tea Group, which provides some financial flexibility
in terms of access to bank finance.
Going forward, ICRA expects CTIPL's financial profile is expected
to remain unfavorable, due to its loss-making operations,
negative cash accruals, as well as a stretched liquidity
position. ICRA further notes that the movement in tea realisation
as well as own tea production in the next tea season along with
cost rationalisation would remain the key rating sensitivity,
going forward.
Key rating drivers
Credit Strengths
* Management's experience in the tea industry
* Status as a part of the New Tea Group, which provides some
financial flexibility in terms of access to bank finance
Credit Weaknesses
* Weak financial profile characterised by net loss depressed
level of coverage indicators and negative net worth on account
of past accumulated losses
* High dependence on purchased leaves, which increases the risks
related to its availability, quality and price to a large
extent
* Lower average realisation compared to average auction prices
of the overall North Indian region
* Only one tea estate in the Terai region in West Bengal, which
increases the company's exposure to unfavourable agro-climatic
conditions affecting production
Description of key rating drivers:
CTIPL is a small player in the domestic tea industry and a
producer of the CTC (crush, tear, curl) variety of tea. The
company has six CTC lines with an annual production capacity of
2.0 million kg of black tea of the CTC variety. Capacity
utilisation of the company has declined significantly in FY2016,
primarily on account of a significant decline in the production
of tea from bought leaves by 62% over the previous fiscal as the
leaves in the neighboring tea garden had been badly affected by
pest attack on the tea bushes and, therefore, the company could
not purchase leaves. The average capacity utilisation of the
company declined sharply to 35% in FY2016 from 65% in FY2015. The
company's capacity utilisation witnessed a fluctuating trend,
primarily on account of the variation in bought leaves production
over the years. During FY2016, with around 259 Ha (hectares) of
area under tea cultivation, the company produced only 0.70
million kg of tea, as bought leaf declined from 3.27 million kg
in FY2015 to 0.59 million kg in FY2016. The company also remains
exposed to the risk of geographical concentration as it has only
one tea estate located in the district of Uttar Dinajpur, West
Bengal resulting in high sensitivity of its production to agro-
climatic conditions and exposure to the natural calamities.
CTIPL's tea fetches lower realisations as compared to average
North Indian auction prices, adversely affecting its
profitability. In addition, domestic tea prices to a large extent
are determined by international prices and hence the demand-
supply situation in the global tea market, in ICRA's opinion,
would continue to influence the profitability of Indian players,
including CTIPL. The out-turn ratio of tea produced by CTIPL has,
however, been in line with the industry standards and stood at
22.61% in FY2016. The company sells tea through a mix of
consignment sales, private sales and sales through the auction
market. It markets tea under the brand name of 'Jiaguri'
(manufactured from purchased leaves) and 'Chandan Tea'
(manufactured from leaves of its own garden).
The operating income of CTIPL has declined sharply in FY2016
compared to FY2015, primarily on account of the decline in
production during the year due to lower production from bought
leaf. Further, foodgrain trading sales declined sharply in FY2016
to only INR2.55 crore compared to INR7.97 crore in the preceding
year. During the first eight months of FY2017, the company
reported an operating income of INR6.95 crore. The operating
profit margin of the company had increased substantially in
FY2016 to 11.33% (-1.47% in FY2015) compared to the preceding
year, primarily due to a sharp decline in green leaf purchased to
green leaf consumed to 20% from 57% in the preceding year.
However, substantial increase in finance costs led to the net
loss of -3.69% in FY2016.
The company had been incurring losses from FY2014 onwards,
resulting in a complete erosion of its net worth. CTIPL suffered
a net loss of INR0.51 crore during FY2016. The net worth of the
company continues to remain negative, reflecting a highly adverse
capital structure. Additionally, the coverage indicators continue
to remain at a depressed level, as reflected by an interest
coverage ratio of 0.95 time, NCA/Total Debt of 0% and Total
Debt/OPBDITA of 10.67 time in FY2016, reflecting an unfavourable
financial profile.
Incorporated in 1989, CTIPL manufactures black tea of the CTC
variety. The company is being managed by the Agarwal and the
Bansal family based in Kolkata who have been involved in the tea
industry for a long time. The company has one tea garden named
'Chandan Tea Estate' and a factory in the district of Uttar
Dinajpur, West Bengal. It also has six CTC lines with an annual
installed capacity to produce 2 million kg of black tea. The
company markets tea under the brand name of 'Jiaguri' and
'Chandan Tea'.
The company reported an operating income of INR6.95 crore in 8M
FY2017 compared to a net loss of INR0.51 crore on an operating
income of INR13.82 crore during FY2016.
D S DEVELOPERS: ICRA Reaffirms 'B' Rating on INR10cr Loan
---------------------------------------------------------
ICRA has reaffirmed its long-term rating on the INR10.00-crore
term loan facilities of D S Developers at [ICRA]B. The outlook
on the long-term rating is Stable.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term Loan 10.00 [ICRA]B(Stable) Reaffirmed
Rationale
As part of its process and in accordance with its rating
agreement with D S Developers, ICRA has been trying to seek
information from the company so as to undertake a surveillance of
ratings, but despite multiple requests; the company's management
has remained non-cooperative. In absence of requisite information
ICRA's Rating Committee has taken a rating view based on the best
available information. In line with SEBI's Circular No.
SEBI/HO/MIRSD4/CIR/2016/119, dated November 1, 2016, the
company's rating is now denoted as: "[ICRA]B (Stable); ISSUER NOT
COOPERATING". The lenders, investors and other market
participants may exercise appropriate caution while using this
rating, given that it is based on limited or no updated
information on the company's performance since the time it was
last rated.
Incorporated in FY2012, D S Developers is a special purpose
vehicle based in Jodhpur, Rajasthan. The firm is promoted by the
Jajra family of Jodhpur and is undertaking its maiden project in
the name of "Marwar Heights" at Dileep Garden, PWD Road, Jodhpur.
The project comprises 80 flats with a total built up area of 1,
39,100 Square Feet.
DENZONG ALBREW: CRISIL Reaffirms 'B-' Rating on INR17MM Loan
------------------------------------------------------------
CRISIL has been consistently following up with Denzong Albrew
Private Limited (DAPL) for obtaining information through letters
and emails dated January 20, 2017 and February 9, 2017 among
others, apart from telephonic communication. However, the issuer
has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 1 CRISIL B-/Stable (Issuer
Not Cooperating; Rating
Reaffirmed)
Term Loan 17 CRISIL B-/Stable (Issuer
Not Cooperating; Rating
Reaffirmed)
'The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of Denzong Albrew Private
Limited. This restricts CRISIL's ability to take a forward
looking view on the credit quality of the entity. CRISIL believes
that the information available for Denzong Albrew Private Limited
is consistent with 'Scenario 3' outlined in 'Framework for
Assessing Consistency of Information with CRISIL BBB rating
category or lower. Based on the last available information,
CRISIL has reaffirmed the rating at CRISIL B-/Stable.
DAPL was incorporated in 1999. The promoter-directors, Mr Rishi
Kumar Mittal and his brother, Mr Sanjay Mittal, have been in the
liquor manufacturing business in North Eastern India since the
past two decades. DAPL commissioned its beer plant in June 2011,
with a production capacity of 150,000 hecto litres per annum
(hlpa). The manufacturing unit produces mild (lager) and strong
beer using malt and hops as primary raw materials. The company
has a memorandum of understanding (MOU) with UBL to manufacture
and bottle beer under the principal's brands Kingfisher and
Kalyani Black Label.
EMPIRE MULTIPACK: Ind-Ra Migrates 'B+' Rating to Non-cooperating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Empire Multipack
Private Limited's (EMPL) Long-Term Issuer Rating to the non-
cooperating category. The issuer did not participate in the
rating exercise despite continuous requests and follow-ups by the
agency. Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will
now appear as 'IND B+(ISSUER NOT COOPERATING)' on the agency's
website. The instrument-wise rating actions are:
-- INR30.85 mil. Long-term loan migrated to Non-Cooperating
Category;
-- INR42.5 mil. Fund-based working capital limit migrated to
Non-Cooperating Category; and
-- INR22.5 mil. Non-fund-based working capital limit migrated
to Non-Cooperating Category
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
Feb. 20, 2015. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Incorporated in 1996, EMPL manufactures printed corrugated boxes
and rolls. It is an ISO 22000:2205 certified organization and
been providing printing and packaging services mostly in and
around 300km of Chandigarh.
ENCORP POWERTRANS: CRISIL Reaffirms 'B' Rating on INR5MM Loan
-------------------------------------------------------------
CRISIL has been consistently following up with Encorp Powertrans
Private Limited (Encorp) for obtaining information through
letters and emails dated November 21, 2016 and December 22, 2016
among others, apart from telephonic communication. However, the
issuer has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 5 CRISIL B/Stable (Issuer
Not Cooperating; Rating
Reaffirmed)
Term Loan 4 CRISIL B/Stable (Issuer
Not Cooperating; Rating
Reaffirmed)
'The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of Encorp Powertrans Private
Limited. This restricts CRISIL's ability to take a forward
looking view on the credit quality of the entity. CRISIL believes
that the information available for Encorp Powertrans Private
Limited is consistent with 'Scenario 1' outlined in 'Framework
for Assessing Consistency of Information with CRISIL B rating
category or lower. Based on the last available information,
CRISIL has reaffirmed the rating at CRISIL B/Stable.
Encorp was set up in 2010 by Mr. Rahul Nowal and his brother Mr.
Vinay Nowal. The company is engaged in fabrication of power
transmission towers. It also undertakes galvanisation work for
fabricated steel structures. The company's manufacturing facility
is at Tarapur (Maharashtra).
FERIS SPINTEX: CRISIL Reaffirms 'B' Rating on INR33MM LT Loan
-------------------------------------------------------------
CRISIL has been consistently following up with Feris Spintex
Private Limited (FSPL) for obtaining information through letters
and emails dated November 21, 2016 and December 22, 2016 among
others, apart from telephonic communication. However, the issuer
has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 2 CRISIL A4 (Issuer Not
Cooperating; Rating
Reaffirmed)
Cash Credit 7 CRISIL B/Stable (Issuer Not
Cooperating; Rating
Reaffirmed)
Long Term Loan 33 CRISIL B/Stable (Issuer Not
Cooperating; Rating
Reaffirmed)
'The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of Feris Spintex Private Limited.
This restricts CRISIL's ability to take a forward looking view on
the credit quality of the entity. CRISIL believes that the
information available for Feris Spintex Private Limited is
consistent with 'Scenario 2' outlined in 'Framework for Assessing
Consistency of Information with CRISIL BB rating category or
lower. Based on the last available information, CRISIL has
reaffirmed the rating at CRISIL B/Stable/CRISIL A4.
Incorporated in 2013, FSPL is engaged in cotton spinning. The
company commenced commercial operations from January 2015 and has
a manufacturing capacity of 20,064 spindles. The company is
promoted by Mr. Nilesh Kumar Ghodsara and his family who have had
prior experience in various other entrepreneurial ventures.
FINE LINES: Ind-Ra Assigns 'BB+' Long-Term Issuer Rating
--------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Fine Lines
(FINE) a Long-Term Issuer Rating of 'IND BB+'. The Outlook is
Stable. The instrument-wise rating action is:
-- INR80.00 mil. Fund-based limits assigned with
'IND BB+/Stable/IND A4+' rating
KEY RATING DRIVERS
The ratings reflect FINE's high customer concentration risk,
given the firm generates 100% revenue from a single customer
(Industria De Dise§o Textil, S.A. (Inditex)) for its ZARA band.
Moreover, the firm is exposed to the risk of capital withdrawal
by the partners, as the firm has a partnership structure.
The ratings, however, are supported by a significant improvement
in financial profile. Revenue increased to INR1.487 billion in
FY16 from INR962.13 million in FY15, driven by a rise in demand
from ZARA. EBITDA margin improved to 11.92% in FY16 from 5.76% in
FY15, driven by a decline in raw material prices. Gross interest
coverage (operating EBITDA/gross interest expense) and net
financial leverage (adjusted net debt/operating EBITDA) improved
to 5.39x (FY15: 2.07x) and 1.57x (3.77x) in FY16, respectively.
Moreover, it has a comfortable liquidity position, indicated by
an average utilization of fund-based working capital limits of
67% during the 12 months ended March 2017.
The ratings are further supported by FINE's established
operational track record of over 20 years and partners' two
decades of experience in garment manufacturing.
RATING SENSITIVITIES
Negative: A significant decline in revenue and EBITDA margin
leading to deterioration in overall credit metrics will be
negative for the ratings.
Positive: Credit metrics being sustained at current levels could
be positive for the ratings.
COMPANY PROFILE
Established in 1992, FINE manufactures garments, primarily for
women and children. It has a production site in Noida, Uttar
Pradesh. The site has a manufacturing capacity of 7 million
pieces per annum.
HOTEL MAGIC: CRISIL Reaffirms 'B' Rating on INR3.5MM Term Loan
--------------------------------------------------------------
CRISIL has been consistently following up with Hotel Magic
Mountain (HMM) for obtaining information through letters and
emails dated January 20, 2017 and February 10, 2017 among others,
apart from telephonic communication. However, the issuer has
remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Term Loan 3.5 CRISIL B/Stable (Issuer Not
Cooperating; Rating
Reaffirmed)
'The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of Hotel Magic Mountain. This
restricts CRISIL's ability to take a forward looking view on the
credit quality of the entity. CRISIL believes that the
information available for Hotel Magic Mountain is consistent with
'Scenario 1' outlined in 'Framework for Assessing Consistency of
Information with CRISIL B rating category or lower. Based on the
last available information, CRISIL has reaffirmed the rating at
CRISIL B/Stable.
Established in 2015 by the Gangtok-based Mr. Yoland Christopher
and his sister, Ms. Stepheny Christopher, HMM is currently
setting up a three-star hotel in Gangtok.
INDIA STEEL: Ind-Ra Migrates B- Issuer Rating to Non-cooperating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated India Steel
Continental Private Limited's (ISCPL) Long-Term Issuer Rating to
the non-cooperating category. The issuer did not participate in
the surveillance exercise, despite continuous requests and
follow-ups by the agency. Therefore, investors and other users
are advised to take appropriate caution while using these
ratings. The rating will now appear as 'IND B-(ISSUER NOT
COOPERATING)' on the agency's website. The instrument-wise
rating actions are:
-- INR194.7 mil. Long-term loan migrated to Non-Cooperating
Category;
-- INR100 mil. Fund-based working capital limit migrated to
Non-Cooperating Category; and
-- INR15 mil. Non-fund-based working capital limit migrated to
Non-Cooperating Category
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
April 16, 2015. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
India Steel Continental was incorporated as a private limited
company in 2010. It manufactures mild steel billets and angles,
channels, flats and bars at its facility in Sirmour (Himachal
Pradesh).
JALPAIGURI DUARS: ICRA Assigns B- Rating to INR7.71cr Loan
-----------------------------------------------------------
ICRA has assigned the long-term rating of [ICRA]B- to the
INR7.71-crore cash-credit facility of Jalpaiguri Duars Tea
Company Limited. ICRA has also assigned the short-term rating of
[ICRA]A4 to the INR0.50-crore bank guarantee of ATCL.The outlook
on the long term rating is Stable.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
LT-Cash Credit
Limit 7.71 [ICRA]B- (Stable) assigned
ST-Bank Guarantee 0.50 [ICRA]A4 assigned
Detailed rationale
The assigned ratings consider the weak financial risk profile of
JDTCL as reflected by net losses, depressed level of coverage
indicators and a highly adverse capital structure on account of
accumulated losses, which led to a negative net worth. The
ratings also take into account JDTCL's small scale of current
operations, and its significant dependence on purchased leaves,
which increases the market risks related to its availability,
quality and price to a large extent. The ratings also factor in
the risks associated with tea being an agricultural commodity,
which is dependent on agro-climatic conditions as well as the
inherent cyclicality of the fixed cost intensive tea industry,
thus leading to variability in profitability and cash flows of
bulk tea producers such as JDTCL. The risks get accentuated for
JDTCL because of the presence of a single tea estate located in
the Terai region in West Bengal. In addition, domestic tea prices
to a large extent are influenced by international prices and
hence the demand-supply situation in the global tea market, in
ICRA's opinion, would continue to impact the profitability of
Indian players including JDTCL. ICRA also takes note of the lower
average realisations JDTCL's tea commands as compared to the
average auction prices in the overall North India region.
The ratings, however, favorably considers the experience of the
management in the tea business and status of the entity as a part
of the New Tea Group, which provides some financial flexibility
in terms of access to bank finance.
Going forward, ICRA expects JDTCL's financial profile to remain
unfavourable, due to its negative cash accruals, as well as its
stretched liquidity position. ICRA further notes that the
movement in tea realisation as well as own tea production in the
next tea season, along with the cost rationalisation would remain
the key rating sensitivity, going forward.
Key rating drivers
Credit Strengths
* Experience of the management in the tea industry
* Status as a part of the New Tea Group, which provides some
financial flexibility in terms of access to bank finance
Credit Weaknesses
* Weak financial profile characterised by net losses, depressed
level of coverage indicators and negative net worth on account
of past accumulated losses
* Dependence on purchased leaves, which increases the risks
related to its availability, quality and price to a large
extent
* Lower average realisation compared to average auction prices
of the overall North Indian region
* Only one tea estate in the Terai region in West Bengal, which
increases the company's exposure to unfavourable agro-climatic
conditions affecting production
Description of key rating drivers highlighted above:
JDTCL is a small player in the domestic tea industry and a
producer of the CTC (crush, tear, curl) variety of tea. The
company has five CTC lines with an annual production capacity of
1.2 million kg of black tea of the CTC variety. The average
capacity utilisation of the company has been more than 90% in the
past few years, however, it declined to 77% in FY2016 due to the
decline in procurement of bought out leaves. During FY2016, with
around 364 Ha (hectares) of area under tea cultivation, the
company produced 0.92 million kg of tea. Since green leaves
sourced from its own garden remain inadequate to meet the actual
requirement, the company remains dependent on purchased leaves
procured from local gardens (around 35% of the total consumed
leaves were bought from external gardens in FY2016), which in
turn exposes JDTCL to the availability, quality and price risks
associated with purchased leaves. The company also remains
exposed to the risk of geographical concentration as it has only
one tea estate located in the district of Darjeeling, West Bengal
resulting in high sensitivity of its production to agro-climatic
conditions and exposure to the natural conditions. JDTCL's tea
fetches lower realisations as compared to the average North
Indian auction prices, adversely affecting its profitability. In
addition, domestic tea prices to a large extent are determined by
international prices and hence the demand-supply situation in the
global tea market, in ICRA's opinion, would continue to influence
the profitability of Indian players, including JDTCL. The out-
turn ratio of tea produced by JDTCL has, however, been in line
with the industry standard and stood at 23.48% in FY2016. The
company sells tea through a mix of consignment sales, private
sales and sales through the auction market. It markets tea under
the brand name of 'Salbari' (manufactured from purchased leaves)
and 'Thanjhora Tea Estate' (manufactured from leaves of its own
garden).
JDTCL's operating income grew at a compounded annual growth rate
of around 5% during FY2012 to FY2016, primarily on account of an
increase in the average realisation. However, the turnover
witnessed a decline of around 31% in FY2016 over the preceding
year primarily due to lower sales volume. During the first eight
months of FY2017 the company reported an operating income of
INR20.36 crore. The operating profit margins of the company
declined to 5.01% in FY2016 from 10.14% in FY2015 due to a
substantial increase in power and manpower costs, the net profit
margin too declined sharply over the same period due to an
increase in the interest and finance cost leading to net loss of
INR1.34 crore in FY2016, compared to a net profit of INR0.36
crore in FY2015. JDTCL had incurred losses till FY2008, resulting
in a complete erosion of its net worth, which stood at a negative
INR4.51 crore on March 31, FY2016. Although the company has been
making profits from FY2009 to FY2015 on the back of increased
average realisations, the company's net worth continues to remain
negative reflecting a highly adverse capital structure.
Additionally, its coverage indicators continue to remain at a
depressed level, as reflected by an interest coverage ratio of
0.42 time, NCA/Total Debt of -7% and Total Debt/OPBDITA of 19.56
times in FY2016, reflecting an unfavourable financial profile.
JDTCL, incorporated in 1920, manufactures black tea of the CTC
variety. The company is being managed by the Agarwal and the
Bansal family based in Kolkata who are in the tea industry for a
long time. The company has one tea garden named 'Thanjhora Tea
Estate' and one factory in the district of Darjeeling, West
Bengal. It has five CTC lines with an annual installed capacity
to produce 1.2 million kg of black tea and it markets tea under
the brand name of 'Thanjhora Tea Estate' and 'Salbari.'
The company reported an operating income of INR20.36 crore in 8M
FY2017 compared to a net loss of INR1.34 crore on an operating
income of INR13.18 crore during FY2016.
JUST TEXTILES: CRISIL Reaffirms 'D' Rating on INR9.2MM Cash Loan
-----------------------------------------------------------------
CRISIL has been consistently following up with Just Textiles
Limited (JTL) for obtaining information through letters and
emails dated January 20, 2017 and February 10, 2017 among others,
apart from telephonic communication. However, the issuer has
remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 9.2 CRISIL D (Issuer Not
Cooperating; Rating
Reaffirmed)
Letter of Credit 0.4 CRISIL D (Issuer Not
Cooperating; Rating
Reaffirmed)
Long Term Loan 0.4 CRISIL D (Issuer Not
Cooperating; Rating
Reaffirmed)
'The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of Just Textiles Limited. This
restricts CRISIL's ability to take a forward looking view on the
credit quality of the entity. CRISIL believes that the
information available for Just Textiles Limited is consistent
with 'Scenario 1' outlined in 'Framework for Assessing
Consistency of Information with CRISIL B rating category or
lower. Based on the last available information, CRISIL has
reaffirmed the rating at CRISIL D/CRISIL D.
Incorporated in 1989, JTL is engaged in undertaking job work of
dying, printing, processing and finishing of grey fabric. The
company is promoted by Mr. Pradeep Modi and is based in
Ambernath, Thane. The company has capacity of 30 lac metres/month
of processing fabric and 2 lac units/month of processing
Garments.
JYOTI PROCESSORS: Ind-Ra Assigns 'BB' Long-Term Issuer Rating
-------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Jyoti Processors
Private Limited (JPPL) a Long-Term Issuer Rating of 'IND BB'.
The Outlook is Stable. The instrument-wise rating actions are:
-- INR105 mil. Fund-based limits assigned with 'IND BB/Stable'
rating; and
-- INR1.64 mil. Term loan assigned with 'IND BB/Stable' rating
KEY RATING DRIVERS
The ratings reflect JPPL's moderate scale of operations and
credit profile. In FY16, revenue was INR644 million (FY15:
INR675 million), interest coverage (operating EBITDA/gross
interest expense) was 5.2x (2.5x), net financial leverage (total
adjusted net debt/operating EBITDAR) was 3.1x (2.5x) and
operating EBITDA margin was 3.1% (3.9%). The decline in
operating EBITDA margin was due to a marginal fall in in the top
line. Considering JPPL booked INR387.6 million in revenue for
11MFY17 (provisional), Ind-Ra expects FY17 revenue to have
further declined to a level lower than that in FY16.
The ratings, however, are supported by the directors' around two
decades of experience in the textile industry and the company's
comfortable liquidity position, indicated by an average fund-
based working capital limit utilization of 26.4% during the 12
months ended March 2017.
RATING SENSITIVITIES
Negative: A decline in operating EBITDA margin leading to a
deterioration in credit metrics would be negative for the
ratings.
Positive: An improvement in the scale of operations and overall
credit metrics could be positive for the ratings.
COMPANY PROFILE
Incorporated in 2005, JPPL manufactures Bengali cotton sarees for
the West Bengal market. It has a facility in Ahmedabad, Gujarat.
K. P. SAHA: ICRA Reaffirms 'B+' Rating on INR2.69cr Term Loan
-------------------------------------------------------------
ICRA has re-affirmed the long term rating of [ICRA]B+ to the
INR2.69 crore term loan, INR2.50 crore cash credit and INR0.13
crore bank guarantee facility of K. P. Saha Private Limited Unit:
Maa Bameswari Rice Mill. The outlook on the long term rating is
stable.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
LT-Term Loan 2.69 [ICRA]B+ (Stable) reaffirmed
LT-Cash Credit 2.50 [ICRA]B+ (Stable) reaffirmed
LT-Bank Guarantee 0.13 [ICRA]B+ (Stable) reaffirmed
Detailed Rationale
While reaffirming the rating, ICRA has considered the standalone
financial performance of the rice mill as this unit contributed
to around 98% of the company's overall turnover during FY2016.
The reaffirmation of the rating primarily takes into
consideration the small scale of current operations of the rice
mill, the intensely competitive nature of the industry as
characterised by numerous small players and the regulated nature
of operations of the company which is subject to Government
policies towards agro based commodities, thus keeping the
profitability under pressure. ICRA also take a note of the agro-
climatic risks which can affect the availability of paddy in
adverse weather conditions.
The rating, however, derives comfort from the proximity of the
mill to major rice-growing area which results in easy
availability of paddy and the improvement in profits owing to
subsidies received leading to better margins and coverage
indicators during FY2016. ICRA also takes into account the
favourable demand prospects of the industry as rice is a staple
food grain and India is the world's second largest producer and
consumer of rice.
In ICRA's opinion, the company's ability to increase cash
accruals while improving its scale of operations would be the key
rating sensitivities, going forward.
Key rating drivers
Credit Strengths
* Presence in major rice-growing area results in easy
availability of paddy
* Rice is a staple food grain and India is the world's second-
largest producer and consumer of rice, so demand prospects for
the industry are expected to remain favourable
* Improvement in profits owing to receipt of subsidies, leading
to higher margins and better coverage indicators during FY2016
Credit Weaknesses
* Small scale of current operations
* Intensely competitive nature of the industry characterised
by a large number of small players adversely impacting the
margins
* Regulated nature of operations subject to Government policies
towards agro-based commodities keep profitability under
pressure
* Agro-climatic risks, which can affect the availability
of paddy in adverse weather conditions
Description of key rating drivers highlighted above:
MBRM is involved in the milling of paddy (non-basmati) and
produces parboiled rice. The mill started commercial production
towards the end of December 2010. It has an installed capacity of
96 tonnes per day (TPD), translating into an annual milling
capacity of 28,800 MT. In FY2016, the capacity utilisation of the
mill remained low at around 48% of the installed capacity. As the
mill is located in a major paddy-growing region, paddy
requirements are met locally from the farmers. The company
basically produces two types of rice, common rice (Swarna Rice)
and fine rice (Ratna Rice).
By virtue of its location, MBRM enjoys easy access to the raw
material (paddy). However, both the quantity and quality of the
crop depend on the agro-climatic conditions. ICRA notes that the
low entry barrier and highly fragmented nature of the rice-
milling industry leads to stiff competition among the players,
pressurising margins. The rice-milling industry is also exposed
to the changes in Government policies which includes the
stipulation of minimum support price (MSP) for procurement of
paddy from farmers and revision of policies on levy sale etc.
Both the common paddy and fine paddy are procured at Minimum
Support Price (MSP), which is revised every year.
The sale of common rice in the open market is regulated by the
Government through statutory levy system. Every rice miller has
to first supply common rice produced to the Government through
Food Corporation of India (FCI) and District Controller (Food &
Supply). The rice miller can sell in the open market at market
rates after fulfilling the levy quota. The main markets for the
company for the sale of parboiled rice are Burdwan, Hooghly,
North 24 Parganas and South 24 Parganas in West Bengal.
The company's operating income remained flat due to decline in
volume of rice sold by around 20% during FY2016, notwithstanding
the increase in sales volume of fine rice with higher realisation
during the year. In addition, the increase in other income from
receipt of power subsidies from the government of around INR0.87
crore led to the increase in operating profitability during
FY2016 to 6.19% compared to 4.05% in the preceding year. Net
margin improved to 2.65% in FY2016 compared to 0.19% in FY2015,
supported by a term-loan interest subsidy of INR0.37 crore.
The total debt of the company includes primarily cash credit
worth INR1.97 crore and unsecured loans from directors worth
INR1.71 crore as on March 31, 2016. The capital structure of the
company remained aggressive over the years on account of low
tangible net worth and high debt level. However, due to decline
in short-term debt as on March 31, 2016, it has improved to
around 1.38 times as on March 31, 2016. The coverage indicators
of the company also improved to an extent due to the decline in
gearing in FY2016 over the previous year, as reflected by the
interest coverage of 4.46 times, net cash accrual relative to
total debt of 37% and total debt relative to OPBDITA of 2.23
times in FY2016.
The working capital intensity has improved and stood at a
comfortable 3% due to decline in inventory holdings and increase
in payables.
K.P. Saha Private Limited was set up in 1990 and its rice mill
unit Maa Bameswari Rice Mill (MBRM) was set up and started
operations in December 2010 at Dhaniakhali, West Bengal. K.P.
Saha also owns two cinema halls at Kalyani and Kolkata, West
Bengal. MBRM is engaged in production of parboiled rice and has a
milling capacity of 96 MT per day on a double-shift basis,
translating into an annual milling capacity of 28,800 MT.
The company reported net profit of INR0.71 crore on an operating
income of INR26.59 crore in FY2016 compared to a net profit of
INR0.05 crore on an operating income of INR26.55 crore during
FY2015.
KANSARA FORGE: ICRA Reaffirms B+ Rating on INR3.50cr Term Loan
--------------------------------------------------------------
ICRA has reaffirmed the long term rating assigned to the INR6.00
crore fund based limits of Kansara Forge & Wires Private Limited
at [ICRA]B+. ICRA has also reaffirmed its short term rating
assigned to the INR2.00 crore non fund based limits of KFWPL at
[ICRA]A4. The outlook on the long term rating is Stable.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 2.50 [ICRA] B+ (Stable) Reaffirmed
Term Loan 3.50 [ICRA] B+ (Stable) Reaffirmed
Non Fund Based
Limits 2.00 [ICRA]A4 Reaffirmed
The rating action is based on the best available information. As
part of its process and in accordance with its rating agreement
with KFWPL, ICRA has been trying to seek information from the
company so as to undertake a surveillance of the ratings, but
despite repeated requests by ICRA, the company's management has
remained non-cooperative. In the absence of requisite
information, ICRA's Rating Committee has taken a rating view
based on best available information. In line with SEBI's Circular
No. SEBI/HO/MIRSD4/CIR/2016/119, dated November 1, 2016, the
company's rating is now denoted as: "[ICRA]B+ (Stable)/A4 ISSUER
NOT COOPERATING". The lenders, investors and other market
participants may exercise appropriate caution while using this
rating, given that it is based on limited or no updated
information on the company's performance since the time it was
last rated.
Kansara Forge & Wires Private Limited (KFWPL), incorporated in
2000, is engaged in manufacturing of steel drawn wires used for
the manufacturing of rollers for bearings. The company was
founded by the Kansara Group and began its commercial operations
from January 2013. The manufacturing unit is located at Jodhpur
with an annual production capacity of 12 Metric Tonne Per Day
(MTPD).
KIRPA FOODS: ICRA Reaffirms B Rating on INR25cr Capital Loan
------------------------------------------------------------
ICRA has reaffirmed the long-term rating at [ICRA]B on the
INR28.00-crore (enhanced from INR22.50-crore) fund-based facility
of Kirpa Foods (KF). The outlook on the long-term rating is
'Stable'.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Working Capital
Limits 25.00 [ICRA]B; reaffirmed,
Stable Outlook assigned
Term Loan 3.00 [ICRA]B; reaffirmed, Stable
Outlook assigned
Rationale
The rating reaffirmation factors in the stabilization of firm's
operations as it is expected to achieve operating income in line
with FY 2016 levels; this is however accompanied with high
gearing levels, elevated DEBT/OPBDITA levels and high working
capital intensity.
ICRA's rating continues to factor in the entity's modest scale of
operations in the rice milling and sorting business, which
coupled with low value-adding operation and high industry
competition has resulted in low profitability and weak debt
coverage indicators. The rating also continues to take into
account the high repayment obligation at present, which would
keep the liquidity under pressure. The rating also continues to
be constrained by the agro climatic risks, which affect paddy
availability. ICRA also takes note of the partnership
constitution of the firm, which exposes it to risks such as
dissolution and capital withdrawal.
However, the rating continues to be favorably supported by the
experience of the promoters in the rice industry; the proximity
of the mill to a major rice growing area which ensures easy
availability of paddy; and the stable demand outlook as rice is
an important part of the staple Indian diet.
Going forward, the ability of the firm to increase its scale of
operations, sustain its profitability, achieve a prudent capital
structure and optimise the working capital intensity will be the
key rating sensitivities.
Key rating drivers
Credit strengths
* Experienced promoters with long presence in the industry
* Presence in a major rice growing area ensures easy
availability
of rice
* Good demand prospects for the industry as rice is a staple
food grain and India is the world's second largest producer
and consumer of rice
Credit weaknesses
* High gearing due to funding of working capital requirement
through bank borrowings
* High repayment obligation likely to keep the liquidity under
Pressure
* Intense industry competition, characterized by a large number
of organized and unorganiozed players
* Agro climatic risks can affect paddy availability
* Risk inherent in the partnership firm
Description of key rating drivers
The promoters and their family have been involved in the rice
milling business for more than four decades and have gained a
thorough knowledge of the market. The long presence in the
industry has helped the firm to establish strong relationship
with its suppliers and customers.
The working capital intensity has remained high over the past two
years, primarily on account of high inventory holdings. Paddy is
a seasonal crop and millers have to buy and stock paddy from
September to December every year, leading to high inventory
level. Moreover, millers undertake ageing of paddy before it is
processed (as it fetches better realisation) which necessitates
higher inventory days and consequently higher working capital
requirement. Furthermore, the debt-funded capex and funding of
working capital primarily through bank loans have led to a
leveraged capital structure; the gearing stood at 9.76 times as
on March 31, 2016. Higher debt, coupled with moderate
profitability, has translated to modest debt metrics. Further,
high annual repayment obligation at present would keep the
liquidity under pressure in the near term.
Analytical approach: While arriving at the rating, ICRA has taken
a standalone view of the operational and financial profile of the
company.
Incorporated in 2014, KF is a partnership firm engaged in
milling, processing and sorting of basmati rice. The firm also
sells some quantities of non-basmati rice, although the
proportion remains low. The company's plant is at Fazilka
(Punjab) and has a milling capacity of 8 tonnes per hour. The
commercial operations of the entity started from December 2014
onwards.
KF recorded a net profit of INR0.05 crore on an operating income
of INR96.99 crore in FY2016 as against a net profit of INR0.0.04
crore on an operating income of INR17.94 crore in the previous
year.
KNOWLEDGE EDUCATION: Ind-Ra Migrates D Rating to Non-Cooperating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated the ratings on
Knowledge Education Foundation's (KEF) bank loans to the non-
cooperating category. The issuer did not participate in the
rating exercise despite continuous requests and follow-ups by the
agency. Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will
now appear as 'IND D(ISSUER NOT COOPERATING)' on the agency's
website. The rating actions are:
-- INR38.63 mil. Term loans (long term) migrated to Non-
Cooperating Category; and
-- INR15 mil. Working capital facility (long term) migrated to
Non-Cooperating Category
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
April 16, 2016. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
KEF, a registered foundation, along with Delhi Public School
Society, runs a CBSE-affiliated school (Delhi Public School) in
Bikaner. The school currently has little over 1,000 students.
LAXMI VISHNU: CRISIL Assigns 'B' Rating to INR3.0MM Cash Loan
-------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable' rating to the long-term
bank facilities of Laxmi Vishnu Cotton Industries (LVCI).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 3.00 CRISIL B/Stable
Long Term Loan 2.25 CRISIL B/Stable
The rating reflects LVCI's modest scale of operations, a weak
financial risk profile because of a small net worth, high
gearing, and below-average debt protection metrics. The rating
also factors in the susceptibility of profitability to volatility
in cotton prices and changes in government regulations. These
rating weaknesses are partially offset by the extensive
experience of the promoters in the cotton industry and an
established customer relationship.
Key Rating Drivers & Detailed Description
Weakness
* Modest scale of operations: With estimated revenue of INR28.4
crore and operating margin of 3.5% in fiscal 2017, scale remains
modest in the intensely competitive cotton ginning industry.
* Susceptibility to volatility in cotton prices: Raw cotton, the
major raw material, accounts for about 95% of the production
cost; hence, operating profitability is susceptible to volatility
in raw cotton prices.
* Weak financial risk profile: Networth was estimated to be
modest at INR1.7 crore as on March 31, 2017; hence, gearing was
high at 3.1 times. Debt protection metrics were weak because of
small scale of operations and hence modest cash accrual. The
financial risk profile is expected to remain below average over
the medium term.
Strengths
* Experience of promoters and established customer relationship
Benefits from the promoters' experience and strong relationships
with customers and suppliers should continue to benefit the
company.
Outlook: Stable
CRISIL believes LVCI will continue to benefit from the experience
of promoters. The outlook may be revised to 'Positive' in case of
sizeable increase in scale of operations and improved operating
margin, or better capital structure because of significant
increase in cash accrual or infusion of funds. Conversely, the
outlook may be revised to 'Negative' if lower-than-expected scale
of operations or operating margin, or large, debt-funded capital
expenditure weakens financial risk profile.
Established in 2014 as a partnership firm, LVCI gins and presses
cotton. Based in Bhainsa, Telangana, the firm is promoted and
managed by Mr Vishnu Prakash Bajaj, Mr Rohit Bajaj, Mr Rahul
Bajaj and Ms Nikita Bajaj.
Net loss of INR0.1 crore was reported on net sales of INR15.9
crore in fiscal 2016, against INR0.2 crore and INR1.9 crore,
respectively, in fiscal 2015.
MAHAVEER INFRAENG'G: CRISIL Reaffirms 'B' Rating on INR10MM Loan
-----------------------------------------------------------------
CRISIL has reaffirmed its ratings on the bank facilities of
Mahaveer Infraengineering Private Limited (MIPL) at 'CRISIL
B/Stable/CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 5 CRISIL A4 (Reaffirmed)
Cash Credit 10 CRISIL B/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility 5 CRISIL B/Stable (Reaffirmed)
The rating continue to reflect MIPL's modest scale of operation
in fragmented nature of industry and its working capital-
intensive operations because of large receivables. These rating
weaknesses are mitigated by moderate order book, which provides
revenue visibility over the medium term.
Key Rating Drivers & Detailed Description
Weakness
* Modest scale of operation
MIPL is estimated to report revenue of about INR38 crore to INR39
crore during FY 2017 a decline of about 30 percent from about
INR55 crore in the preceding year.
* Working capital intensive operations
The working capital remains working capital intensive indicated
by high Gross current assets of over 500 days as on March 2017 on
account of stretched in its receivable cycle.
Strengths
* Moderate order book provides the revenue visibility
MIPL has a moderate order book of about INR90 crore to INR95
crore hence provides the revenue visibility over the medium term.
Outlook: Stable
CRISIL believes MIPL is continue to benefit from its moderate
order book which provides the revenue visibility over the medium
term. The outlook may be revised to 'Positive' in case of
significant revenue growth while maintaining profitability and
capital structure, or if working capital management improves,
particularly through faster realisation of receivables from
customers. Conversely, the outlook may be revised to 'Negative'
if capital structure and debt protection metrics weaken due to
substantially low revenue and profitability, or increased
reliance on debt to fund capacity expansion plans and incremental
working capital requirement.
MIPL was incorporated in 2008, promoted by Mr. Pukhraj Jain and
Mr. Kishore Jain. The company undertakes earthwork, roadwork, and
civil construction projects on a turnkey basis.
Profit after tax was INR0.60 crore on net sales of INR54.42 crore
for fiscal 2016, against a profit after tax of INR1.76 crore on
net sales of INR105.22 crore for fiscal 2015.
MATRIX ROLLER: Ind-Ra Migrates 'B' Rating to Non-Cooperating
------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Matrix Roller
Mill Private Limited's (MARF) Long-Term Issuer Rating to the non-
cooperating category. The issuer did not participate in the
surveillance exercise despite continuous requests and follow-ups
by the agency. Therefore, investors and other users are advised
to take appropriate caution while using these ratings. The
rating will now appear as 'IND B(ISSUER NOT COOPERATING)' on the
agency's website. The instrument-wise rating action are:
-- INR60 mil. Long-term loan migrated to Non-Cooperating
Category;
-- INR71 mil. Fund-based working capital limit migrated to
Non-Cooperating Category;
-- INR29 mil. Proposed fund-based working capital limit
migrated to Non-Cooperating Category; and
-- INR16 mil. Proposed long-term loan migrated to Non-
Cooperating Category
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
July 22, 2016. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Incorporated in 2012 in Uttar Pradesh, MARF is a private limited
company engaged in the business of flour milling, i.e.
manufacturing maida, atta, suji and bran. The total installed
capacity of the plant is 90,000 metric tons processing per annum.
MITTAPALLI AUDINARAYANA: CRISIL Reaffirms B Rating on INR56M Loan
-----------------------------------------------------------------
CRISIL's has reaffirmed its rating on the long-term bank facility
of Mittapalli Audinarayana Enterprises Private Limited
(Mittapalli) at 'CRISIL B/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Open Cash Credit 56 CRISIL B/Stable (Reaffirmed)
The ratings continue to reflect modest scale of operations and
below average financial risk profile marked by its modest net
worth, high gearing, and below average debt protection metrics.
The ratings of the company are also constrained on account of its
large working capital requirements, and its exposure to intense
competition and regulatory risks in the tobacco industry, and the
susceptibility to fluctuations in foreign exchange rates. These
rating weaknesses are partially offset by the extensive
experience of the company's promoters in the tobacco-processing
industry, and established relationship with customers.
Key Rating Drivers & Detailed Description
Weakness
* Modest scale of operations: With revenue of INR58 Cr in the
Fiscal 2016 the scale of operations remains small. Small scale of
operations limits company's ability to take advantages associated
with economies of scale that other players with large scale of
operations are able to enjoy.
* Below average financial risk profile: Company's financial risk
profile is marked by modest net worth, high gearing and below
average debt protection metrics. Gearing is expected to remain
high on account of small scale of operation, hence small
accretion to reserves and high working capital requirements
resulting in dependence upon cash credit limits. Debt protection
metrics are below average and are expected to remain so over the
medium term.
* High working capital requirements: Working capital requirement
for the company remains high on account of stretched debtors and
increasing inventory requirement of the company. Working capital
requirements of the company are partially assuaged by the credit
period of 3 to 4 months that the company is able to get from
local raw material suppliers. Incremental working capital
requirement results in stretched liquidity, as reflected in fully
utilized cash credit facility, however the same is expected to
improve on the back of expected realization of money from some
debtors which were struck for more than 1 year and sum of money
received from ECGC. Furthermore comfortable current ratio and no
major long term debt gives some comfort to the liquidity
position.
* Exposure to intense competition and regulatory Risk: Company's
business risk profile remains constrained on account of intense
competition in the tobacco processing industry. Furthermore as
the industry in many aspects are controlled by the government of
India any non-favorable regulation may adversely impact the
business risk profile of the company.
Strengths
* Extensive experience of promoters: Mittapalli was promoted in
the year 1964 by Mr. Mitapalli Rama Rao. It gives the promoter an
extensive experience in the tobacco processing industry which has
enabled the firm to establish strong relationships with the
customers and suppliers which ensures steady procurement of raw
material and repeated orders from the customers. CRISIL believes
that Mittapalli will continue to benefit from the extensive
industry experience of promoters.
Outlook: Stable
CRISIL believes that Mittapalli will continue to benefit over the
medium term from its promoters' extensive industry experience and
its established relationship with customers. The outlook may be
revised to 'Positive' if the company registers a sustained
improvement in its working capital cycle, resulting in improved
liquidity or there is a substantial improvement in its capital
structure on the back of sizeable equity infusion by its
promoters. Conversely, the outlook may be revised to 'Negative'
in case of a steep decline in the company's profitability, or
significant deterioration in its capital structure caused most
likely because of a large debt-funded capital expenditure or a
stretch in its working capital cycle.
Mittapalli was set up as a partnership firm in 1964 by Mr.
Mittapalli Rama Rao and his sons Mr. Mittapalli Umamaheswar Rao
and Mr. Mittapalli Siva Kumar. The firm was reconstituted as a
private limited company in 2006. The company is engaged in
tobacco leaves trading and is based in Guntur, Andhra Pradesh.
Mittapalli reported a profit after tax of INR0.32 crore on
revenue of INR57.95 Cr. crore in fiscal 2016, against INR 0.34
crore and INR 52.61 crore, respectively, in fiscal 2015.
NORTH DINAJPUR: ICRA Assigns 'B' Rating to INR6.65cr Cash Loan
--------------------------------------------------------------
ICRA has assigned an [ICRA]B rating to the INR6.65-crore cash
credit and INR3.30-crore unallocated facilities of North Dinajpur
Tea Agro Private Limited. ICRA has also assigned an [ICRA]A4
rating to the INR0.50-crore non-fund based bank facilities of
NDTAPL. The unallocated amount had also been rated on a short-
term scale at [ICRA]A4. The outlook on the long term rating is
Stable.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
LT-Cash Credit
Limits 6.65 [ICRA]B (Stable) assigned
ST- Bank Guarantee 0.50 [ICRA]A4 assigned
LT/ST- Unallocated 3.30 [ICRA]B (Stable)/[ICRA]A4
assigned
Detailed rationale
The assigned ratings consider the weak financial risk profile of
NDTAPL as reflected by net loss, depressed level of coverage
indicators and negative tangible net worth on account of past
accumulated losses . The ratings also factor in NDTAPL's small
scale of current operations and its total dependence on purchased
leaves as it has no gardens of its own, which exposes the company
to availability, quality and price risks of purchased green
leaves. The ratings also take into account the cyclicality
inherent in the tea industry that leads to variability in
profitability and cash flows of all players in the tea industry
including NDTAPL and the lower average realisation NDTAPL's tea
commands compared to average North Indian auction prices.
The ratings, however, favourably considers the experience of the
management in the tea business and favourable outlook for the
domestic tea industry over the short to medium term. Going
forward, ICRA expects NDTAPL's financial profile to remain
stretched due to its net loss and nominal cash accruals.
Key rating drivers
Credit strengths
* Experience of the management in the tea industry
* Status as a part of the New Tea Group, which provides some
financial flexibility in terms of access to bank finance
Credit weaknesses
* Weak financial profile characterised by net loss, depressed
level of coverage indicators and negative tangible net worth
on account of past accumulated losses
* Entire dependence on purchased leaves primarily from the
market increases risks related to green leaves availability,
quality and price to a large extent
* Lower average realisation compared to average auction prices
of the overall North Indian region
* Small scale of current operations
Description of key rating drivers highlighted above:
NDTAPL is a small player in the domestic tea industry and a
producer of crush, tear, curl (CTC) variety of tea. The company
has six CTC lines with an annual installed capacity of 1.90
million kg for production of tea. The company's capacity
utilisation has been around 97-105% during the last three years.
NDTAPL has to depend entirely upon purchased green leaves as it
has no plantation facility of its own, which exposes it to
availability, quality and price risks associated with the
purchased leaves. Since tea is an agricultural commodity, its
production is highly sensitive to agro-climatic conditions. The
company sells its entire produce in the domestic market. The
company sells through a mix of consignment sales, private sales
and through auction centre. NDTAPL's tea fetches lower
realisations compared to average North Indian auction prices,
affecting its profitability. In addition, domestic tea prices to
a large extent are determined by international prices and hence
the demand-supply situation in the global tea market would
continue to influence the profitability of Indian players,
including NDTAPL.
NDTAPL's operating income grew at a compounded annual growth rate
of only 2% during FY2012 till FY2016. During the first eight
months of FY2017, the company reported an operating income of
INR18.03 crore. The operating profit margin (OPM) of the company
declined sharply in FY2016 to 2.04% from 8.25% in FY2015 due to
decline in average realisation of made tea and increase in
manpower costs. NDTAPL had incurred losses in FY2016 of INR0.81
crore, resulting in a complete erosion of its net worth by March
31, 2016. The company's negative net worth and high debt led to a
highly adverse capital structure. The coverage indicators as
recorded by an interest coverage ratio of 0.31 times, NCA/Total
Debt of -10% and Total Debt/OPBDITA of 20.47 times in FY2016
reflect an unfavourable financial profile.
Incorporated in 1997, NDTAPL manufactures black tea of CTC
variety. The company has no plantation facility and has to depend
entirely on purchased green leaves for production of black tea.
The factory is located in North Dinajpur district, West Bengal.
The annual installed capacity for production of black tea is 1.90
million kg. The company markets tea under the brand name of
'Shera', 'Surya Mukhi, 'Kasturi Gold' and Kesar Gold'.
PRAFFUL EXPORTS: Ind-Ra Migrates 'B' Rating to Non-Cooperating
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Prafful Exports'
Long-Term Issuer Rating to the non-cooperating category. The
issuer did not participate in the surveillance exercise, despite
continuous requests and follow-ups by the agency. Therefore,
investors and other users are advised to take appropriate caution
while using these ratings. The rating will now appear as
'IND B(ISSUER NOT COOPERATING)' on the agency's website. The
instrument-wise rating actions are:
-- INR60 mil. Fund-based facilities migrated to Non-
Cooperating Category; and
-- INR35 mil. Non-fund-based facilities migrated to Non-
Cooperating Category
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
March 29, 2016. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Started in 1993, Prafful Exports exports fabrics and ready-to-
stitch dress materials to Europe, the US, and the Middle East.
PRESIDENCY EXPORTS: ICRA Reaffirms 'D' Rating on INR13cr Loan
-------------------------------------------------------------
ICRA has reaffirmed the long-term and the short-term rating of
[ICRA]D to the INR13.00-crore fund-based bank limits of
Presidency Exports & Industries Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based Bank
Limits 13.00 Reaffirmed at [ICRA]D
As part of its process and in accordance with its rating
agreement with PEIL, ICRA had sent repeated reminders to the
company for payment of surveillance fee that became overdue;
however despite multiple requests; the company's management has
remained non-cooperative. ICRA's Rating Committee has taken a
rating view based on best available information. In line with
SEBI's Circular No. SEBI/HO/MIRSD4/CIR/2016/119, dated November
1, 2016, the company's rating is now denoted as: "[ICRA] D ISSUER
NOT COOPERATING". The lenders, investors and other market
participants may exercise appropriate caution while using this
rating, given that it is based on limited or no updated
information on the company's performance since the time it was
last rated.
Analytical approach: For arriving at the ratings, ICRA has taken
into account the debt-servicing track record of PEIL, its
business risk profile, financial risk drivers and the management
profile.
Presidency Exports & Industries Limited, promoted by Kolkata
based Bajoria family, was incorporated in the year 1919. The
company had been engaged in the export of iron ore fines from the
year 2007 onwards. However, due to unfavourable changes in the
Government policies related to iron ore mining in the past few
years, has adversely impacted its revenues from this segment.
Although, the company had commenced exports of onion and rice to
Bangladesh, the revenue from the same also witnessed a decline in
FY15. The company also has a warehouse in Rishra which has been
leased to the corporate.
R.K. NATURAL: Ind-Ra Migrates 'B' Rating to Non-Cooperating
-----------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated R.K. Natural
Fibre Private Limited's (RKN) Long-Term Issuer Rating to the non-
cooperating category. The issuer did not participate in the
rating exercise despite continuous requests and follow-ups by the
agency. Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will
now appear as 'IND B(ISSUER NOT COOPERATING)' on the agency's
website. The instrument-wise rating actions are:
-- INR68 mil. Fund-based facilities migrated to Non-
Cooperating Category
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
Feb. 26, 2016. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
RKN was incorporated in 2010 and is engaged in the business of
ginning and pressing of raw cotton. The company's plant is
located near Vadodara with production capacity of 16,000MT per
annum.
RAMESHWAR PRASAD: Ind-Ra Migrates 'BB-' Rating to Non-Cooperating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Rameshwar Prasad
Sharma Contractor's Long-Term Issuer Rating to the non-
cooperating category. The issuer did not participate in the
rating exercise, despite continuous requests and follow-ups by
the agency. Therefore, investors and other users are advised to
take appropriate caution while using these ratings. The rating
will now appear as 'IND BB-(ISSUER NOT COOPERATING)' on the
agency's website. The instrument-wise rating actions are:
-- INR62.50 mil. Fund-based working capital limit migrated to
Non-Cooperating Category;
-- INR65 mil. Non-fund-based working capital limit migrated to
Non-Cooperating Category;
-- INR37.50 mil. Proposed fund-based working capital limit
migrated to Non-Cooperating Category;
-- INR35 mil. Proposed non-fund based working capital limit
migrated to Non-Cooperating Category
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
Feb. 12, 2016. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Rameshwar Prasad Sharma Contractor, established in 1997, is an AA
class road construction contractor.
SAMPURN AGRI: Ind-Ra Migrates 'B' Rating to Non-Cooperating
-----------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Sampurn Agri
Ventures Pvt. Ltd.'s (SAVPL) Long-Term Issuer Rating to the non-
cooperating category. The issuer did not participate in the
rating exercise, despite continuous requests and follow-ups by
the agency. Therefore, investors and other users are advised to
take appropriate caution while using these ratings. The rating
will now appear as 'IND B(ISSUER NOT COOPERATING)' on the
agency's website. The instrument-wise rating actions are:
-- INR20 mil. Term Loan migrated to Non-Cooperating Category;
and
-- INR80 mil. Term Loan migrated to Non-Cooperating Category
Note: ISSUER NOT COOPERATING: The ratings last reviewed on
March 3, 2016. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
SAVPL was incorporated as a private limited company in 2006, to
set up a project for the co-generation of power and production of
bio fertilizers, at village Panchanwali, Fazilika, Punjab. On
Dec. 23, 2011, the Punjab government sanctioned SAVPL's proposed
project as a mega project.
The project aims to use paddy straw, which is a hazardous
agricultural waste, to produce renewable energy in the form of
biogas. The residue that comes out is then used to develop
manure, phospho compost, azolla weed and other such elements of
organic farming.
SANJAY DIESELS: Ind-Ra Migrates 'B+' Rating to Non-Cooperating
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Sanjay Diesels'
Long-Term Issuer Rating to the non-cooperating category. The
issuer did not participate in the surveillance exercise, despite
continuous requests and follow-ups by the agency. Therefore,
investors and other users are advised to take appropriate caution
while using these ratings. The rating will now appear as
'IND B+(ISSUER NOT COOPERATING)' on the agency's website. The
instrument-wise rating actions are:
-- INR70 mil. Fund-based working capital limit migrated to
Non-Cooperating Category; and
-- INR80 mil. Non-fund-based working capital limit migrated to
Non-Cooperating Category
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
March 4, 2015. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Sanjay Diesels manufactures and exports silent diesel power
generating sets and electrical control panels in India. It also
assembles diesel generator sets and provides turnkey projects for
power plant installations. The founders of the firm have more
than 20 years of experience in the same line of business. The
company is also an authorized genset original equipment
manufacturer.
SHREEGOPAL GOBIND: ICRA Assigns B+ Rating to INR25cr Loan
---------------------------------------------------------
ICRA has assigned its long-term rating of [ICRA]B+ on the
INR25.0-crore fund-based bank facilities of Shreegopal Gobind
Agro Tech Private Limited. The outlook on the long-term rating is
'Stable'.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-based limits 25.0 [ICRA]B+ (Stable); assigned
Rationale
ICRA's ratings are constrained by SGAT's limited track record of
operations as the commercial production started in May 2016; the
moderate financial risk profile as reflected in the moderate
scale of operations; and the stretched liquidity position as
evident from the high utilisation of working capital limits as
well as substantial debt repayment burden going forward. The
rating is further constrained by the high industry competition,
due to the presence of various rice millers in the domestic
market; and by agro climatic risk associated with the paddy,
which can affect the quality and availability, particularly in
adverse weather conditions.
The rating, however, favorably takes into account the relevant
experience of the promoters in the rice industry and the
proximity of the mill to major rice growing areas and paddy
markets, which result in easy availability of paddy throughout
the year.
Going forward, the company's ability to increase its scale of
operations in a profitable manner, maintain a healthy capital
structure and optimal working capital intensity will be the key
rating sensitivities.
Credit strengths
* Presence in a major rice growing area ensures easy
availability of paddy
* Good demand prospects as rice is a staple food grain and India
is world's second largest producer and consumer
Credit weaknesses
* Limited track record of operations
* Stiff competition due to low-entry barriers, which has
resulted
in the presence of numerous established players and a large
base of unorganised small players
* Agro-climatic risks may affect the quality and availability
Paddy
Description of key rating drivers
The company mainly procures traditional non basmati varieties of
paddy, which differ in length, breadth, aroma etc. The
procurement is made from agents in different mandis located
nearby. Rice industry is a highly competitive industry,
characterised by low-entry barriers and presence of large number
of unorganised players and a few established players. This exerts
pressure on the margins of the firm. Given that majority of the
paddy is procured during October-December (procurement season),
the business is inherently working capital intensive. Also, given
that the company operates in the agro- based industry, it remains
exposed to the inherent cyclicality, volatility in prices, and
changes in government regulations.
Analytical approach: ICRA has taken standalone operational and
financial profile of SGAT in consideration while assigning the
rating.
Incorporated in 2013, SGAT is engaged in milling, processing and
sorting of non basmati rice. The company has its plant at Kaimur
(Bihar) with a milling capacity of 48000 tonnes per annum. It
started its commercial production in May 2016. The company sells
its products directly to its customers as well as through
commission agents. SGAT supplies rice mainly in Uttar Pradesh and
Bihar.
SHREYANS OILS: Ind-Ra Migrates 'B' Rating to Non-Cooperating
------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Shreyans Oils
Limited's (SOL) Long-Term Issuer Rating to the non-cooperating
category. The issuer did not participate in the rating exercise
despite continuous requests and follow-ups by the agency.
Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will
now appear as 'IND B(ISSUER NOT COOPERATING)' on the agency's
website. The instrument-wise rating actions are:
-- INR60 mil. Fund-based limit migrated to Non-Cooperating
Category;
-- INR45 mil. Proposed fund-based limit migrated to Non-
Cooperating Category;
-- INR45 mil. Proposed term loan Migrated to Non-Cooperating
Category
Note: ISSUER NOT COOPERATING: The ratings last reviewed on
Feb. 15, 2016. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Incorporated in 1992, SOL manufactures crude rice bran oil and
de-oiled rice bran also known as cattle feed. The company has a
2000MT/day manufacturing facility in Ludhiana, Punjab.
SHRI SHYAM: ICRA Reaffirms B+ Rating on INR2.80cr Term Loan
-----------------------------------------------------------
ICRA has reaffirmed the long term rating assigned to the INR5.25
crore fund based limits of Shri Shyam Polycoat Private Limited at
[ICRA]B+. ICRA has also reaffirmed its short term rating assigned
to the unallocated limits of Shri Shyam Polycoat Private Limited
at [ICRA]A4. The outlook on the long term rating is Stable.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 2.00 [ICRA] B+ (Stable) Reaffirmed
Term Loan 2.80 [ICRA] B+ (Stable) Reaffirmed
Long term/short
term unallocated 0.45 [ICRA] B+ (Stable)/A4
Reaffirmed
The rating action is based on the best available information. As
part of its process and in accordance with its rating agreement
with SSPPL, ICRA has been trying to seek information from the
company so as to undertake a surveillance of the ratings, but
despite repeated requests by ICRA, the company's management has
remained non-cooperative. In the absence of requisite
information, ICRA's Rating Committee has taken a rating view
based on best available information. In line with SEBI's Circular
No. SEBI/HO/MIRSD4/CIR/2016/119, dated November 1, 2016, the
company's rating is now denoted as: "[ICRA]B+ (Stable)/A4 ISSUER
NOT COOPERATING". The lenders, investors and other market
participants may exercise appropriate caution while using this
rating, given that it is based on limited or no updated
information on the company's performance since the time it was
last rated.
Incorporated in 2009, Shri Shyam Polycoats Pvt Ltd (SSPPL)
commenced commercial production of PVC leather (rexine) from
April 1, 2012. The company's sole manufacturing unit is located
at Bahadurgarh, Haryana in close proximity to the footwear park
which houses majority of the end users of its products. Rexine or
artificial leather, made by coating PVC on textile fabric, is a
versatile product with application in multiple products like
shoes, wallets, purses, car seat/sofa covers, belts jackets,
upholstery and furnishings etc.
SN BUILDCON: Ind-Ra Migrates 'B' Rating to Non-Cooperating
----------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated SN Buildcon's
Long-Term Issuer Rating to the non-cooperating category. The
issuer did not participate in the surveillance exercise, despite
continuous requests and follow-ups by the agency. Therefore,
investors and other users are advised to take appropriate caution
while using these ratings. The rating will now appear as
'IND B(ISSUER NOT COOPERATING)' on the agency's website. The
instrument-wise rating actions are:
-- INR60 mil. Proposed long-term loans migrated to Non-
Cooperating Category
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
Feb. 5, 2016. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
SNB is a partnership firm set up in July 2014. It is an SPV,
formed specifically for the execution of a residential project,
in Wadki.
SUNHILL HOMES: CRISIL Reaffirms 'B' Rating on INR175MM Loan
-----------------------------------------------------------
CRISIL has been consistently following up with Sunhill Homes
Private Limited (Sunhill) for obtaining information through
letters and emails dated January 20, 2017 and February 09, 2017
among others, apart from telephonic communication. However, the
issuer has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 175 CRISIL B/Stable (Issuer
Not Cooperating; Rating
Reaffirmed)
'The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of Sunhill Homes Private Limited.
This restricts CRISIL's ability to take a forward looking view on
the credit quality of the entity. CRISIL believes that the
information available for Sunhill Homes Private Limited is
consistent with 'Scenario 3' outlined in 'Framework for Assessing
Consistency of Information with CRISIL BBB rating category or
lower. Based on the last available information, CRISIL has
reaffirmed the rating at CRISIL B/Stable.
Sunhill was incorporated in 2012 by New Delhi-based Mr. Ajay
Khetarpal and Mr. Pardeep Jain. Sunhill is a residential real
estate developer in Gurgaon (Haryana). Sunhill has a development
agreement with HS Realty Pvt Ltd for setting up 804-flats group
housing project in Sector 67, Gurgaon. Mr. Ajay Khetarpal and Mr.
Pardeep Jain are the key promoters and are also the directors in
the company.
SURI SHOES: Ind-Ra Assigns 'BB+' Long-Term Issuer Rating
--------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Suri Shoes
Private Limited (SSPL) a Long-Term Issuer Rating of 'IND BB+'.
The Outlook is Stable. Instrument-wise rating actions are:
-- INR245 mil. Fund-based working capital limits assigned with
'IND BB+/Stable/IND A4+' rating; and
-- INR50.50 mil. Non-fund-based limits assigned with 'IND A4+'
rating
KEY RATING DRIVERS
The ratings reflect SSPL's stagnant and volatile revenue during
FY13-FY16. The overall revenue declined to INR756.38 million in
FY16 (FY15: INR825.73 million) due to Brexit crisis, as sales
from the UK contributes about 43% to the total top line. The
ratings also factor in high customer concentration, with five
customers accounting about 82% of the total revenue.
Moreover, the ratings are constrained by high susceptibility of
profitability margins to raw material and foreign exchange price
fluctuations, as well as any change in the governmental policy
towards the leather industry which may adversely impact the
company.
The ratings, however, are supported by SSPL's comfortable
operating EBITDA margin, moderate credit metrics and comfortable
liquidity position. Operating EBITDA margin was 10.24% in FY16
(FY15: 9.58%), gross EBITDA interest coverage (operating
EBITDAR/gross interest expense + rents was 3.7x (2.71x) and net
leverage (total adjusted net debt/operating EBITDA) was 2.8x
(2.74x). The company's average use of working capital limits was
77.83% during the 12 months ended February 2017.
The ratings are further supported by the management's experience
of about three decades in the footwear industry.
RATING SENSITIVITIES
Negative: Deterioration in the credit metrics could lead to a
negative rating action.
Positive: An improvement in the revenue along with an improvement
in the credit metrics will be positive for the ratings.
COMPANY PROFILE
SSPL was incorporated as a partnership firm in 1988 by Mr. Rakesh
Suri, Mr. Ranjan Suri and Ms. Amita Suri under the name Suri
Industries. In 1991, the company was reconstituted as a private
limited company.
SSPL manufactures and exports leather shoes and uppers for men,
women and kids. The company has two manufacturing units in
Kanpur (Uttar Pradesh) with an installed capacity to manufacture
1 million leather shoes and 0.2 million shoe uppers per annum.
It exports products to the UK, Australia, New Zealand and
Germany, among others.
VASWANI INDUSTRIES: Ind-Ra Migrates BB+ Rating to Non-Cooperating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Vaswani
Industries Limited's (VIL) Long-Term Issuer Rating of 'IND BB+'
to the non-cooperating category. The issuer did not participate
in the rating exercise despite continuous requests and follow-ups
by the agency. Therefore, investors and other users are advised
to take appropriate caution while using these ratings. The
rating will now appear as 'IND BB+(ISSUER NOT COOPERATING)' on
the agency's website. The instrument-wise rating actions are:
-- INR400 mil. Fund-based working capital limit migrated to
Non-Cooperating Category;
-- INR81.6 mil. Long-term loans migrated to Non-Cooperating
Category; and
-- INR320 mil. Non-fund-based working capital limit migrated
to Non-Cooperating Category
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
March 4, 2016. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Incorporated in 2003, Raipur-based VIL is engaged in power
generation and manufactures sponge iron and steel billets. Its
sponge iron is mainly used as a raw material for manufacturing
mild steel billets/ingots. It has a captive power plant that
provides uninterrupted power supply to its manufacturing plant.
* 35 Corporate Insolvency Resolution Processes in Progress
----------------------------------------------------------
The Press Trust of India reports that at least 35 corporate
insolvency resolution processes are going on under the Insolvency
and Bankruptcy Code, which is providing entities the "freedom to
exit", IBBI Chairperson M S Sahoo said on April 15. The Code,
which provides for market-determined and time-bound resolution
process, is being implemented by the Insolvency and Bankruptcy
Board of India (IBBI), PTI says.
"At least 35 corporate insolvency resolution transactions are
going on, which involve default of about INR4,000 crore in a
case," the report quotes Sahoo as saying. The Code, which came
into effect from December 1, 2016, seeks to consolidate and amend
laws relating to re-organisation as well as insolvency resolution
of corporate persons, partnership firms and individuals in a
time-bound manner, the report says.
Speaking at a conference organised by not-for-profit group H2Life
Foundation, Sahoo said the complete regime of economic freedom is
in place with the Code, PTI relates. "We had freedom of entry, to
compete and now we have freedom to exit . . ." he said, adding
that the IBBI is ready for changes in the resolution as per the
need of the hour.
H2Life Foundation President Vikas Sharma said the Code would not
only streamline the insolvency process but also help in boosting
business growth of the country, adds PTI.
=========
J A P A N
=========
TELLMECLUB: Clients to Seek for Compensation, Call for Probe
------------------------------------------------------------
The Japan Times reports that customers of discount tour company
Tellmeclub said on April 23 they have formed a group to seek
compensation and call for an investigation into problems that led
to its sudden demise.
The report relates that the Group of People Victimized by
Tellmeclub, set up the same day, held its first meeting in Tokyo,
where the company is based. Fifteen people showed up and at least
17 others have said they will join.
According to the report, Motomitsu Nakagawa, a lawyer advising
the group, said the firm could be held legally responsible for
asking customers to pay all fees far in advance all the way up to
the time it went belly up.
"The point is finding out how the money collected from the
customers was spent," the report quotes Mr. Nakagawa as saying.
A 29-year-old salaryman in Tokyo said he had been planning a
honeymoon trip to Hawaii in August, the report relays. He paid
JPY1.5 million for a tour covering 15 travelers including his
bride, family and friends.
"I feel a strong urge to do something about the situation,
because many people haven't found a recourse for their loss," he
said, the report relays.
Tokyo-based travel agency Tellmeclub filed for bankruptcy with
the Tokyo District Court on March 27 with liabilities estimated
at JPY15.1 billion, including JPY9.9 billion relating to 36,000
travel contracts.
===============================
P A P U A N E W G U I N E A
===============================
BANK OF SOUTH: S&P Affirms 'B+' ICR; Outlook Remains Negative
-------------------------------------------------------------
S&P Global Ratings said it has affirmed its 'B+' long-term and
'B' short-term issuer credit ratings on Bank of South Pacific
Ltd. (BSP). The long-term rating on the Papua New Guinea (PNG)
based bank remains on negative outlook.
S&P believes economic risks faced by banks operating in PNG
remain high by global standards. However, S&P believes those
risks have now stabilized (compared with a negative trend
previously). This is because S&P believes indicators of economic
resilience have improved more recently, underpinned by government
responsiveness to the reduction in resources-related revenues.
Medium-term growth prospects are sound for the country, although
they remain highly reliant on energy and mining activity. The
dual-effect of lower global energy prices and the slowdown in
government spending is likely to lead to a slowdown in corporate
activity and earnings. However, S&P believes the risk of a
systemwide increase in credit losses for the banking sector is
unlikely, given the low levels of leverage in PNG. S&P expects
indicators of asset quality to worsen, although not materially,
and not to a level observed in higher-risk jurisdictions (such as
Nigeria, Mongolia, and Egypt).
S&P's rating on BSP remains on negative outlook, however,
reflecting the negative outlook on our sovereign rating on PNG
(B+/Negative/B). S&P believes that the bank would be unlikely to
withstand a scenario in which the sovereign defaulted on its debt
obligations, given the bank's concentration in its domestic home
market--at around 70% of BSP's operations. S&P notes that BSP
also has high exposure to government and central bank debt, at
more than 100% of shareholders equity, which doesn't include cash
and statutory deposits held with the central bank. As a result,
for the foreseeable future S&P expects its rating on the bank to
remain no higher than S&P's long-term sovereign rating on PNG.
The ratings on BSP primarily reflect the high-risk economic and
operating conditions across both PNG and other underdeveloped
Pacific island nations that BSP is exposed to. In light of the
nascent phase of economic development in PNG and neighboring
islands, lending opportunities are somewhat limited and system
liquidity is high. Symptomatic of this is BSP's lending
portfolio, which is concentrated in various corporate sectors and
includes a significant holding of Treasury and Central Bank Bills
of PNG, leaving the bank exposed to sovereign credit stresses.
S&P's ratings on BSP also take into account its dominant market
position as the largest commercial and retail bank in PNG. S&P
believes the bank has a number of structural advantages over its
competitors, including an extensive distribution model and
affinity with customers as PNG's largest domestically-owned bank,
which should position the bank well to defend its market share as
business growth slows in the short term in response to a slowdown
in economic growth following the fall in global energy prices.
S&P expects the bank's profitability to remain strong over the
next two years, despite our expectation of slower lending growth.
Although S&P forecasts the bank's risk-adjusted capital--as S&P
measures it--to remain modest, S&P expects the bank's earnings to
provide good cover for any foreseeable rise in credit losses.
S&P expects credit pressures to remain relatively elevated as the
impact from the fall in global energy prices filters through to
increasing cash flow pressure for some customers, although S&P
forecasts loan loss reserves to remain comfortably above 100% of
nonperforming loans within the outlook period.
The negative outlook on BSP reflects the negative outlook on
S&P's long-term sovereign rating on PNG. S&P believes the bank
would be unlikely to withstand a scenario in which the sovereign
defaulted on its debt obligations, given the bank's concentration
in its domestic home market--at around 70% of BSP's operations.
BSP also has high exposure to government and central bank debt,
at more than 100% of shareholders equity, which doesn't include
cash and statutory deposits held with the central bank. As a
result, S&P expects its rating on the bank to remain no higher
than the long-term sovereign rating on PNG.
S&P would expect to lower its rating on BSP within the next 12
months by one notch in the event that S&P lowered the long-term
sovereign rating on PNG by one notch.
S&P would expect to revise the outlook to stable if pressures on
the sovereign in PNG abated. An improvement in the outlook for
PNG's external position over the next year would be supportive of
a return to a stable outlook for BSP, in S&P's opinion.
*********
Tuesday's edition of the TCR-AP delivers a list of indicative
prices for bond issues that reportedly trade well below par.
Prices are obtained by TCR-AP editors from a variety of outside
sources during the prior week we think are reliable. Those
sources may not, however, be complete or accurate. The Tuesday
Bond Pricing table is compiled on the Friday prior to
publication. Prices reported are not intended to reflect actual
trades. Prices for actual trades are probably different. Our
objective is to share information, not make markets in publicly
traded securities. Nothing in the TCR-AP constitutes an offer
or solicitation to buy or sell any security of any kind. It is
likely that some entity affiliated with a TCR-AP editor holds
some position in the issuers' public debt and equity securities
about which we report.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR-AP. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com
Friday's edition of the TCR-AP features a list of companies with
insolvent balance sheets obtained by our editors based on the
latest balance sheets publicly available a day prior to
publication. At first glance, this list may look like the
definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical
cost net of depreciation may understate the true value of a
firm's assets. A company may establish reserves on its balance
sheet for liabilities that may never materialize. The prices at
which equity securities trade in public market are determined by
more than a balance sheet solvency test.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Asia Pacific is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Valerie U. Pascual, Marites O. Claro, Joy A. Agravante, Rousel
Elaine T. Fernandez, Julie Anne L. Toledo, and Peter A. Chapman,
Editors.
Copyright 2017. All rights reserved. ISSN: 1520-9482.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding,
electronic re-mailing and photocopying) is strictly prohibited
without prior written permission of the publishers.
Information contained herein is obtained from sources believed
to be reliable, but is not guaranteed.
TCR-AP subscription rate is US$775 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance
thereof are US$25 each. For subscription information, contact
Peter Chapman at 215-945-7000 or Joseph Cardillo at 856-381-8268.
*** End of Transmission ***