/raid1/www/Hosts/bankrupt/TCRAP_Public/170510.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
Wednesday, May 10, 2017, Vol. 20, No. 92
Headlines
A U S T R A L I A
AMPLIPHI BIOSCIENCES: Has $2.2M Cash Balance as of March 31
CONTRACTING SERVICES: Second Creditors' Meeting Set for May 16
DIPLOMA GROUP: ASIC Seeks to Appoint Provisional Liquidators
GUVERA EMPLOYMENT: Second Creditors' Meeting Set for May 17
RETAIL ADVENTURES: Liquidation in Final Stage
TRIMONT PTY: First Creditors' Meeting Set for May 15
C H I N A
BANK OF EAST: S&P Assigns 'BB' Rating to Proposed AT1 Securities
CHINA ZHENGTONG: S&P Affirms 'B+' CCR then Withdraws Rating
SPI ENERGY: Needs More Time to Complete Form 20-F
I N D I A
ACADEMY OF ENGINEERING: Ind-Ra Assigns BB+ Rating to INR250M Loan
ACUTE DESIGNS: CRISIL Assigns 'B+' Rating to INR2MM Cash Loan
AISWARYA GRANITES: CRISIL Cuts Rating on INR3MM Overdraft to B
AKAR TOOLS: Ind-Ra Migrates BB+ Rating to Non-Cooperating
ALEX GREEN: Ind-Ra Migrates BB+ Rating to Non-Cooperating
ANONDITA HEALTHCARE: Ind-Ra Migrates B+ Rating to Non-Cooperating
AVADH RAIL: Ind-Ra Affirms BB+ Long-Term Issuer Rating
AXSYS SOLUTIONS: CRISIL Reaffirms B- Rating on INR4.96MM Loan
BALAJI FIBRE: Ind-Ra Assigns BB Long-Term Issuer Rating
BALANAGU INDUSTRIES: CRISIL Cuts Rating on INR4.26MM Loan to B
FCOM'S TEX: CRISIL Assigns 'B' Rating to INR10MM LT Loan
D D INTERNATIONAL: CRISIL Assigns 'B' Rating to INR10MM Loan
DACC INTERNATIONAL: CRISIL Cuts Rating on INR3MM Cash Loan to B
DALIP SINGH: CRISIL Downgrades Rating on INR1.0MM Cash Loan to B
DB DEVICES: CRISIL Assigns 'B' Rating on INR8MM Term Loan
DBM GEOTECHNICS: CRISIL Reaffirms 'D' Rating on INR122MM Loan
DGP STEEL: CRISIL Reaffirms 'B-' Rating on INR4.50MM Loan
EASTERN CONSTRUCTION: Ind-Ra Moves BB Rating to Non-Cooperating
HARITASA CHECKMATE: CRISIL Downgrades Rating on INR9MM Loan to B
HIMACHAL FLOUR: CRISIL Reaffirms B+ Rating on INR7MM Loan
HINDUSTHAN LOHA: Ind-Ra Affirms 'BB' Long-Term Issuer Rating
HOLLY OFFSHORE: CRISIL Lowers Rating on INR5.55MM LT Loan to B
HOTEL VAKRATUNDA: Ind-Ra Migrates B Rating to Non-Cooperating
INDICO MOTORS: Ind-Ra Assigns BB Long-Term Issuer Rating
INFINIUM PHARMACHEM: CRISIL Cuts Rating on INR5MM Cash Loan to B
IQBAL CONSTRUCTION: Ind-Ra Migrates BB+ Rating to Non-Cooperating
J.D. CONSTRUCTION: Ind-Ra Migrates BB- Rating to Non-Cooperating
KBR COMMODITIES: Ind-Ra Affirms BB Long-Term Issuer Rating
KHUDIRAM COLD: CRISIL Reaffirms 'B' Rating on INR4.90MM Loan
LOTUS WIRELESS: CRISIL Lowers Rating on INR58MM Bank Loan to B
MAHAVIR BUILDERS: CRISIL Lowers Rating on INR10MM Cash Loan to B
NICHEM INDUSTRIES: Ind-Ra Migrates BB Rating to Non-Cooperating
OM POWER: CRISIL Downgrades Rating on INR1MM Cash Loan to 'B'
PRITS LEATHER: Ind-Ra Assigns BB+ Long-Term Issuer Rating
SANGINI COMMERCE: CRISIL Reaffirms 'B-' Rating on INR50MM Loan
SATTIK EXPORTS: CRISIL Reaffirms 'B+' Rating on INR.45MM Loan
SHREE BALA: CRISIL Lowers Rating on INR11MM Term Loan to 'B'
SHRI LAL: CRISIL Reaffirms 'B+' Rating on INR3MM LT Loan
SHUKAN MICRO: CRISIL Reaffirms 'B' Rating on INR7.2MM Term Loan
SIRI GANESH: CRISIL Lowers Rating on INR7.0MM Cash Loan to 'B'
SPARSH INDUSTRIES: Ind-Ra Affirms BB+ Long-Term Issuer Rating
SRI LAKSHMI: CRISIL Reaffirms 'B' Rating on INR4.5MM Loan
SRI MURUGAR: CRISIL Downgrades Rating on INR9MM Cash Loan to B
SRI POWER: Ind-Ra Migrates BB Rating to Non-Cooperating
SRI RAM: CRISIL Lowers Rating on INR2.4MM Bill Discounting to 'B'
STEELWAYS ENTERPRISES: CRISIL Reaffirms 'D' Rating on INR7MM Loan
VINOD KUMAR: Ind-Ra Affirms BB Long-Term Issuer Rating
WINTOUCH CERAMIC: CRISIL Raises Rating on INR6.97MM Loan to B+
YOGESH TRADING: Ind-Ra Migrates B Rating to Non-Cooperating
J A P A N
TOSHIBA CORP: Warns Western Digital to Stop Impeding Chip Sale
N E W Z E A L A N D
ASSET FINANCE: S&P Affirms 'B' ICR; Outlook Remains Stable
S O U T H K O R E A
WOORI BANK: S&P Assigns 'BB+' Rating to Proposed Tier 1 Notes
- - - - -
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A U S T R A L I A
=================
AMPLIPHI BIOSCIENCES: Has $2.2M Cash Balance as of March 31
-----------------------------------------------------------
Ampliphi Biosciences Corporation filed with the Securities and
Exchange Commission a free writing prospectus in conjunction with
the Company's registration statement on Form S-1 (File
No.333-217169). The Company disclosed that it:
* raised $9 million in 2016 through the issuance of common
stock;
* received $0.9 million in tax rebates from Australian
Government in 2016;
* filed for $1.8M in tax rebates from Australian Government;
expects receipt in mid-2017 subject to Australian tax
authorities review
* has $2.2 million cash balance as of March 31, 2017
And
* has 1.65M shares outstanding as 2.6M fully diluted as of
as April 30, 2017.
A full-text copy of the FWP is available for free at:
https://is.gd/U67JVc
About AmpliPhi
AmpliPhi Biosciences Corp. is a biotechnology company focused on
the discovery, development and commercialization of novel phage
therapeutics. Its principal offices occupy approximately 1,000
square feet of leased office space pursuant to a month-to-month
sublease, located at 3579 Valley Centre Drive, Suite 100, San
Diego, California. It also leases approximately 700 square feet
of lab space in Richmond, Virginia, approximately 5,000 square
feet of lab space in Brookvale, Australia, and approximately
6,000 square feet of lab and office space in Ljubljana, Slovenia.
Ampliphi reported a net loss attributable to common stockholders
of $24.27 million for the year ended Dec. 31, 2016, compared to a
net loss attributable to common stockholders of $10.79 million
for the year ended Dec. 31, 2015. As of Dec. 31, 2016, AmpliPhi
had $18.19 million in total assets, $8.47 million in total
liabilities and $9.72 million in total stockholders' equity.
Ernst & Young LLP, in San Diego, California, issued a "going
concern" qualification on the consolidated financial statements
for the year ended Dec. 31, 2016, citing that the Company has
recurring losses and negative cash flows from operations that
raise substantial doubt about its ability to continue as a going
concern.
CONTRACTING SERVICES: Second Creditors' Meeting Set for May 16
--------------------------------------------------------------
A second meeting of creditors in the proceedings of Contracting
Services Pty Ltd has been set for May 16, 2017, at 11:00 a.m. at
the offices of Veritas Advisory, Level 5, 123 Pitt 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 15, 2017, at 4:00 p.m.
Steve Naidenov and David Iannuzzi of Veritas Advisory were
appointed as administrator of Contracting Services on March 31,
2017.
DIPLOMA GROUP: ASIC Seeks to Appoint Provisional Liquidators
------------------------------------------------------------
The Australian Securities and Investments Commission appeared in
the Federal Court of Australia at the first mention of its
application for the appointment of a provisional liquidator to
ASX-listed Diploma Group Limited (Receivers and Managers
Appointed) (Administrators Appointed) and its subsidiaries. The
subsidiaries are:
1. Diploma Construction (WA) Pty Ltd (Receivers and Managers
Appointed) (Administrators Appointed);
2. DGX Construction Pty Ltd (Receivers and Managers Appointed)
(Administrators Appointed);
3. Diploma Properties Pty Ltd;
4. Diploma TCO Holdings Pty Ltd;
5. Diploma Construction (NSW) Pty Ltd;
6. Diploma Capital Pty Ltd;
7. Allegro Realty Holdings Pty Ltd;
8. Diploma Development Management Pty Ltd;
9. Weststructure Pty Ltd;
10. 24 Flinders Lane Pty Ltd;
11. 176 Adelaide Tce Pty Ltd;
12. Rockingham Serviced Apartments Pty Ltd;
13. Chemlabs Emporium Pty Ltd;
14. Allegro Realty Pty Ltd;
15. 300 Lord St Pty Ltd;
16. 303 Campbell St Pty Ltd;
17. 254 West Coast Hwy Pty Ltd;
18. Subiaco Residential Apartments Pty Ltd; and
19. Diploma Capital Securities Pty Ltd
(collectively, the Diploma Group)
In its application, ASIC alleges that the Diploma Group needs to
be wound up on just and equitable grounds and/or on the grounds
of insolvency.
ASIC seeks the appointment of David Hodgson and Andrew Hewitt, of
Grant Thornton, as provisional liquidators of the Diploma Group
and orders requiring the provisional liquidator to provide a
detailed report to the Court that sets out, among other things,
the financial position of the Diploma Group.
Mr. Hodgson and Mr. Hewitt have consented to being appointed as
the provisional liquidators of the Diploma Group.
ASIC is considering the status of its application in relation to
one further company.
ASIC made the application in relation to the Diploma Group to
protect the interests of shareholders, investors and creditors.
The matter has been listed for hearing in the Federal Court of
Australia in Perth at 11:00 a.m. on May 11, 2017.
ASIC's investigation into the Diploma Group is ongoing.
About Diploma Group
Diploma Group Limited was a Perth-based commercial construction
and property development company.
On December 21, 2016 a secured creditor appointed Martin Jones
and Andrew Smith of Ferrier Hodgson as receivers and managers of
Diploma Group Limited, Diploma Construction (WA) Pty Ltd and DGX
Construction Pty Ltd.
Following this, on December 22, the board of directors of Diploma
appointed Matthew Donnelly, Mr. Hewitt and Mr. Hodgson of Grant
Thornton as voluntary administrators (Administrators) to Diploma
Group Limited, Diploma Construction (WA) Pty Ltd and DGX
Construction Pty Ltd.
The Administrators held the first creditors meeting on Jan. 6,
2017.
The Administrators have obtained orders from the Supreme Court of
Western Australia extending the convening period for the second
creditors meeting. A further creditors meeting is due to be held
next week.
GUVERA EMPLOYMENT: Second Creditors' Meeting Set for May 17
-----------------------------------------------------------
A second meeting of creditors in the proceedings of Guvera
Employment Pty Ltd has been set for May 17, 2017, at 12:30 p.m.
at the offices of Worrells Solvency & Forensic Accountants,
Level 2, AMP Building 1 Hobart Place, in Canberra, ACT.
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 16, 2017, at 5:00 p.m.
Stephen John Hundy and Simon Cathro of Worrells Solvency &
Forensic Accountants were appointed as administrator of Guvera
Employment on March 31, 2017.
RETAIL ADVENTURES: Liquidation in Final Stage
---------------------------------------------
Michael Gorey at The Sydney Morning Herald reports that
liquidation of the company that operated discount retail brands
Crazy Clark's and Sam's Warehouse is close to being finalised,
with unsecured creditors expected to receive 17.44 cents in the
dollar.
Fairfax Media has obtained the annual report of liquidator
Deloitte into Retail Adventures Pty Ltd, which entered voluntary
administration on October 26, 2012, SMH says.
According to the report, the administrators sold the business to
DSG Holdings on March 13, 2013 and the company went into
liquidation on February 3, 2014.
The annual report dated April 27 said the estimated dividend of
17.44 cents is higher than earlier predictions of up to 15.32
cents, SMH discloses.
SMH says the liquidator initiated legal action in the NSW Supreme
Court in October 2015 against 18 creditors who it identified as
having received almost $50 million in preferential payments
before the company went into voluntary administration.
The annual report reveals almost $8.5 million was recovered, SMH
adds.
SMH says the final dividend is subject to collection of
settlement funds, the finalisation of two public liability
claims, proofs of debt and appeals.
Kathmandu founder Jan Cameron bought the discount variety chain
out of receivership in March 2009, hoping it would fund her
philanthropic activities. At its peak the chain had more than
300 stores trading as Crazy Clark's, Sam's Warehouse, Go-Lo and
Chickenfeed. After racking up losses of $114 million between
2010 and 2012, Retail Adventures collapsed for the second time.
The liquidator said in the annual report that payment of a final
dividend is expected to be made in December, adds SMH.
About Retail Adventures
Retail Adventures Pty Ltd is an Australia-based discount variety
retailer and operates nationally under brand names Chickenfeed,
Go-Lo, Crazy Clark's, and Sam's Warehouse. The company operates
around 270 stores across the four brands.
Deloitte Restructuring Services Partners Vaughan Strawbridge,
David Lombe and John Greig were appointed Joint Voluntary
Administrators of Retail Adventures Pty Limited, effective
Oct. 26, 2012.
Ms. Cameron, the sole shareholder and only secured creditor,
bought back 210 Sam's Warehouse and Crazy Clarks stores and two
distribution centres for AUD59 million from the administrators,
Deloitte, in February 2013.
TRIMONT PTY: First Creditors' Meeting Set for May 15
----------------------------------------------------
A first meeting of the creditors in the proceedings of Trimont
Pty Ltd will be held on May 15, 2017, at 12:00 p.m., at the
offices of SV Partners, Level 17, 200 Queen Street, in Melbourne,
Victoria.
Michael Carrafa and Peter Gountzos of SV Partners were appointed
as administrators on May 3, 2017.
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C H I N A
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BANK OF EAST: S&P Assigns 'BB' Rating to Proposed AT1 Securities
----------------------------------------------------------------
S&P Global Ratings assigned its 'BB' long-term issue rating to a
proposed issuance of Basel III-compliant additional tier-1 (AT1)
undated non-cumulative subordinated capital securities by The
Bank of East Asia Limited (BEA: A/Watch Neg/A-1; cnAA+/Watch
Neg/cnA-1). At the same time, S&P also assigned its 'cnBBB'
long-term Greater China regional scale rating to the securities.
The issue rating is subject to S&P's review of the final issuance
documentation.
S&P's rating on the issuance is four notches below its assessment
of BEA's stand-alone credit profile (SACP) of 'bbb+' to reflect
S&P's view on these features:
-- One notch because the notes are contractually subordinated;
-- Two notches because S&P expects the notes to have
discretionary and mandatory nonpayment clauses leading to
coupon nonpayment, and the regulator classifies them as
tier-1 regulatory capital; and
-- One notch because the notes contain a contractual principal
write-down clause.
S&P has not placed the ratings on the proposed issuance on
CreditWatch, where it has kept the issuer credit ratings on BEA
and the issue ratings on the bank's senior unsecured notes and
non-Basel III compliant nondeferrable subordinated debt
instruments. This is because S&P's rating on the proposed
issuance has not incorporated any extraordinary government
support. When assigning ratings on the proposed issuance, S&P
uses the bank's SACP as the starting point of notching.
S&P placed the BEA ratings on CreditWatch with negative
implications on April 25, 2017, to reflect its view that: (1)
upon implementation of Hong Kong's resolution regime and in the
event of distress, the likelihood of extraordinary government
support for the bank and its senior debt obligations will reduce;
and (2) extraordinary government support would no longer be
extended to non-Basel III compliant nondeferrable subordinated
debt instruments.
S&P recognizes the full amount of the proposed hybrid issuance in
its capital calculation. The notes should be able to absorb
losses on a going-concern basis, will be recognized as regulatory
Tier-1 capital, and have no coupon step-up features. S&P regards
the hybrid as total adjusted capital (TAC), until the aggregate
amount of such instruments reaches 33% of the TAC.
S&P do not expect an immediate impact to our assessment of BEA's
capital position. S&P projects that the bank's risk-adjusted
capital (RAC) ratio for the next two years is still likely to be
below 10% amid challenging economic conditions in Hong Kong and
China. That said, S&P notes that the proposed AT1 issuance and
recent disposal of BEA's share in Tricor Holdings Ltd. would
strengthen the bank's capitalization.
CHINA ZHENGTONG: S&P Affirms 'B+' CCR then Withdraws Rating
-----------------------------------------------------------
S&P Global Ratings affirmed its 'B+' long-term corporate credit
rating on China Zhengtong Auto Services Holding Ltd. with a
stable outlook. S&P also affirmed its 'cnBB' long-term Greater
China regional scale rating on the China-based auto retailer.
S&P subsequently withdrew all the ratings at Zhengtong's request.
The affirmed rating at the time of withdrawal reflected S&P's
view that Zhengtong would maintain its satisfactory market
position in China and fairly diversified product and service
offerings. S&P considers the company's revenue concentration to
new car sales and smaller scale than global peers' as tempering
factors. S&P expects Zhengtong's profitability to stay subdued
due to intensifying competition in China's auto retailing market
and potentially higher operating costs for new stores.
The stable outlook at the time of withdrawal reflected S&P's view
that Zhengtong will be able to generate stable and recurring
operating cash flows over the next 12 months due to its better
product mix. Nonetheless, S&P expects the company's expansion
will continue to be based on aggressive debt funding and high
working capital outflows, resulting in a debt-to-EBITDA ratio of
4.0x-5.0x over the next 12 months. S&P anticipates that
Zhengtong will continue to expand its captive finance operations
while maintaining strict underwriting standards and satisfactory
delinquency ratios.
SPI ENERGY: Needs More Time to Complete Form 20-F
-------------------------------------------------
SPI Energy Co., Ltd., notified the U.S. Securities and Exchange
Commission on Form 12b-25 that it has experienced a delay in
preparing the Form 20-F and the audited financial statements
required in the Form 20-F for the year ended Dec. 31, 2016, and
needs additional time to complete the Form 20-F and the audited
financial statements for the year ended Dec. 31, 2016. The
Company said it is still in the process of completing its annual
financial statements, including the assets impairment, goodwill
evaluation and U.S. tax package services. As a result, a
reasonable estimate of the results cannot be made by the Company.
About SPI Energy Co., Ltd.
SPI Energy Co., Ltd. is a global provider of photovoltaic (PV)
solutions for business, residential, government and utility
customers and investors. SPI Energy focuses on the downstream PV
market including the development, financing, installation,
operation and sale of utility-scale and residential solar power
projects in China, Japan, Europe and North America. The Company
operates an innovative online energy e-commerce and investment
platform, www.solarbao.com, which enables individual and
institutional investors to purchase innovative PV-based
investment and other products; as well as www.solartao.com, a B2B
e-commerce platform offering a range of PV products for both
upstream and downstream suppliers and customers. The Company has
its operating headquarters in Hong Kong and maintains global
operations in Asia, Europe, North America and Australia.
For additional information, please visit: www.spisolar.com,
www.solarbao.com or www.solartao.com.
SPI Energy reported a net loss of $185 million on $191 million of
net sales for the year ended Dec. 31, 2015, compared to a net
loss of $5.19 million on $91.6 million of net sales for the year
ended Dec. 31, 2014. As of Dec. 31, 2015, SPI Energy had $710
million in total assets, $493 million in total liabilities and
$216.6 million in total stockholders' equity.
KPMG Huazhen LLP, in Shanghai, China, issued a "going concern"
qualification on the consolidated financial statements for the
year ended Dec. 31, 2015, citing that SPI Energy Co., Ltd., and
its subsidiaries have suffered significant losses from operations
and have a negative working capital as of Dec. 31, 2015. In
addition, the Group has substantial amounts of debts that will
become due for repayment in 2016. The auditors said these
factors raise substantial doubt about the Group's ability to
continue as a going concern.
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I N D I A
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ACADEMY OF ENGINEERING: Ind-Ra Assigns BB+ Rating to INR250M Loan
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has rated The Academy of
Engineering and Management Trust's (AEMT) bank facilities as:
-- INR108.25 mil. Bank loans assigned with 'IND BB+/Stable'
rating; and
-- INR250.00 mil. Fund-based working capital assigned with
'IND BB+/Stable' rating
KEY RATING DRIVERS
The rating is constrained by the fall in AEMT's operating
profitability in FY16. The operating margins excluding rent were
above 30% during FY12-FY15; however, they fell to 22.07% in FY16
from 33.29% in FY15 on account of an 18.99% yoy increase in
operating expenditures as against a 1.87% yoy increase in
operating revenue.
The rating is further constrained by AEMT's small scale of
operations (FY16: INR362.80 million), although it commenced
operations in 1999. Tuition fee, the primary revenue generator,
grew at a CAGR of 14.09% over FY12-FY16. The trust reported a
net operating surplus of INR18.62 million.
The rating reflects the continuous fall in student headcount in
AEMT's engineering college to 1,277 in FY17 from 1,607 in FY13.
However, this has been offset by the continuous growth in student
headcount in its schools since FY13. The total headcount
(schools and college) increased 12.01%yoy to 9,996 students in
FY17.
The rating, however, is supported by the trust's reasonable
market position in eastern part of India. AEMT manages schools
under the brand Techno India Group Schools. Despite setting up
school campuses in various place of West Bengal, AEMT was able to
fill seats with 77.57% capacity utilization in FY17.
Moreover, AEMT's debt remains low despite the set-up of new
school campuses under its capex plan during FY12-FY16. This is
because the capex was mainly funded by internal accruals. Debt
in relation to the total income and debt/current balance before
interest, depreciation and rent was 28.33% and 1.21x,
respectively, in FY17. AEMT's capital light operating model
(leasing premises for schools) gives an advantage and
considerably eases the debt burden.
Also, AEMT's liquidity profile is comfortable due to low debt
service commitments. Its debt service coverage ratio including
rental payments was above 3.15x over FY14-FY16. Available
funds/total long-term debt was 65.49% and available
funds/operating expenditure was 24.23% in FY16. Moreover, the
trust has not utilized working capital facilities fully.
However, interest cost will increase in FY18 in case of full
utilization of working capital and will adversely impact the
financial profile of the trust.
RATING SENSITIVITIES
Positive: A sustained improvement in the operating margins of the
trust and an increase in the scale of operations resulting in an
improvement in the liquidity profile could positively affect the
rating.
Negative: A significant fall in enrolments leading to
deterioration in the operating profitability and liquidity
profile may trigger the negative rating action.
COMPANY PROFILE
AEMT was established in 1999 under the Indian Trust Act, 1882.
The trust manages an engineering and management college, eight
CBSE schools and a state board school. It offers K-12 education,
engineering, management and computer application courses. It is
a part of Techno India group which manages several
trust/societies/ partnership firm and private limited companies.
ACUTE DESIGNS: CRISIL Assigns 'B+' Rating to INR2MM Cash Loan
-------------------------------------------------------------
CRISIL Ratings has assigned 'CRISIL B+/Stable/CRISIL A4' ratings
to the bank facilities of Acute Designs (AD).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 8 CRISIL A4 (Assigned)
Cash Credit 2 CRISIL B+/Stable (Assigned)
The ratings reflect modest scale of operations with high
geographical concentration in revenue and exposure to intense
competition in the highly fragmented industry. These weaknesses
are partially offset by the extensive experience of its partners
in the civil construction business and funding support from them.
Key Rating Drivers & Detailed Description
Weaknesses
* Modest scale of operations and high geographical concentration
in revenue: Scale of operations remains small in the competitive
civil construction segment. Also, majority of the projects are
from the Municipal Corporation of Mumbai, scale of operations
becomes proportional to the number of tenders floated in the
region.
* Exposure to intense competition: Low entry barrier has led to
many players in the civil construction industry, which affects
the players' ability to win tenders and maintain profitability.
Strengths
* Extensive experience of partners: Presence of around 20 years
in the civil construction industry has enabled the partners to
undertake several projects for the Municipal Corporation of
Mumbai without significant delays.
* Fund support from partners: The partners have extended need-
based fund support in the form of unsecured loans'estimated at
INR10 crore as on March 31, 2017.
Outlook: Stable
CRISIL believes AD will continue to benefit from the experience
of its partners. The outlook may be revised to 'Positive' if
there is significant improvement in scale of operations and
profitability leads to high cash accrual. The outlook may be
revised to 'Negative' if sizeable, debt-funded capital
expenditure, failure to execute projects on time, or aggressive
bidding exerts pressure on margins.
Set up as a partnership firm in 2006, AD undertakes civil
construction work for Municipal Corporation of Mumbai
Profit after tax (PAT) was INR0.65 crore on net sales of INR18.87
crore in fiscal 2016 against INR 1.06 crore and INR20 crore in
fiscal 2015.
AISWARYA GRANITES: CRISIL Cuts Rating on INR3MM Overdraft to B
--------------------------------------------------------------
CRISIL Ratings has been consistently following up with Aiswarya
Granites (AG) for obtaining information through letters and
emails dated January 25, 2017 and February 14, 2017 among others,
apart from telephonic communication. However, the issuer has
remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Long Term Loan 2 CRISIL B/Stable (Issuer Not
Cooperating; Downgraded from
CRISIL BB-/Stable)
Overdraft 3 CRISIL B/Stable (Issuer Not
Cooperating; Downgraded from
CRISIL BB-/Stable)
Proposed Working 1 CRISIL B/Stable (Issuer Not
Capital Facility Cooperating; Downgraded from
CRISIL BB-/Stable)
'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 Aiswarya Granites. 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 Aiswarya Granites 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.
Set up in 2007, Kollam (Kerala)-based AG manufactures blue metals
and M-Sand. Its operations are managed by the partner Mr. A M
Chackochan and his family.
AKAR TOOLS: Ind-Ra Migrates BB+ Rating to Non-Cooperating
---------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Akar Tools
Limited's (ATL) 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:
-- INR343 mil. Fund-based working capital limits migrated to
Non-Cooperating Category;
-- INR45 mil. Long-term loan migrated to Non-Cooperating
Category; and
-- INR60 mil. Non-fund-based working capital limits migrated
to Non-Cooperating Category
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
Jan. 11, 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, ATL situated in Waluj near Aurangabad,
Maharashtra, and manufactures and sells hand tools, automobile
forgings, leaf springs and parabolic springs.
ALEX GREEN: Ind-Ra Migrates BB+ Rating to Non-Cooperating
---------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Alex Green
Energy Pvt. Ltd.'s (AGEPL) 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. The instrument-wise rating action is:
-- INR285.1 mil. Term loan migrated to Non-Cooperating
Category
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
May 5, 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 2009, AGEPL is a part of the Alex group, which
has an experience in the solar energy sector. AGEPL was
implementing a 28MW green field solar power project in three
locations, Odisha (5.5MW), Tamil Nadu (11MW) and Bihar (11.5MW).
However, its Tamil Nadu and Bihar projects were deferred and
AGEPL proposed to form a separate special purpose vehicle for
each project.
ANONDITA HEALTHCARE: Ind-Ra Migrates B+ Rating to Non-Cooperating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Anondita
Healthcare's (AHC) 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:
-- INR40 mil. Term loan migrated to Non-Cooperating Category;
-- INR70 mil. Fund-based working capital limits migrated to
Non-Cooperating Category; and
-- INR15 mil. Non-fund-based working capital limits migrated
to Non-Cooperating Category
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
March 30, 2016. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
AHC was established as a proprietorship concern in 2004 by
Mr. Anupam Ghosh. It manufactures latex condoms and surgical
gloves under the following brands: Mid Night (condoms) and Cure
(surgical gloves).
AVADH RAIL: Ind-Ra Affirms BB+ Long-Term Issuer Rating
------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed Avadh Rail Infra
Limited's (ARIL) Long-Term Issuer Rating at 'IND BB+'. The
Outlook is Stable. The instrument-wise rating actions are:
-- INR150 mil. Fund-based working capital limit affirmed with
'IND BB+/Stable/IND A4+' rating; and
-- INR100 mil. Non-fund-based working capital limit affirmed
with 'IND A4+' rating
KEY RATING DRIVERS
The ratings reflect ARIL's moderate scale of operations and
credit metrics. In FY16, revenue was INR833.11 million (FY15:
INR680.66 million), net leverage (total adjusted net
debt/operating EBITDAR) was 3.37x (3.21x) and interest coverage
(operating EBITDAR/net interest expense + rents) was 3.01x
(2.75x).
The ratings factor in the tender-based nature of the business.
The ratings, however, are supported by ARIL's comfortable EBITDA
margin (FY16: 8.19%; FY15: 8.90%) and liquidity profile. The
company's average peak utilization of fund-based limits was
52.62% during the 12 months ended February 2017. Moreover, the
company is a part-I-approved vendor by Research Designs &
Standards Organization for several safety products, and its
promoter has over 30 years of experience in the manufacturing of
rubber and allied products.
RATING SENSITIVITIES
Negative: Any decline in revenue or EBITDA margin leading to a
deterioration in credit metrics will be negative for the ratings.
Positive: Substantial revenue growth, along with a rise in EBITDA
margin, leading to an improvement in credit metrics will be
positive for the ratings.
COMPANY PROFILE
Incorporated in 1980, Lucknow-headquartered ARIL (formerly Avadh
Rubber Prop. Madras Elastomers Limited) supplies critical rubber
and rubber-to-metal bonded components to Indian Railways for
freight wagons, passenger coaches, locomotives and tracks.
It has three production sites (ISO-9001: 2008 certified) across
Lucknow, Haridwar and Chennai. The facilities have total 100,000
square feet of factory area and spread across 250,000 square feet
of land.
According to provisional financials for 10MFY17, revenue was
INR626.72 million, EBITDA margin was 12.51%, gross interest
coverage was 6.07x and net leverage was 3.12x.
AXSYS SOLUTIONS: CRISIL Reaffirms B- Rating on INR4.96MM Loan
-------------------------------------------------------------
CRISIL Ratings has reaffirmed its ratings on the bank facilities
of Axsys Solutions (Axsys) at 'CRISIL B-/Stable/CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 5 CRISIL A4 (Reaffirmed)
Cash Credit 2.5 CRISIL B-/Stable (Reaffirmed)
Letter of Credit 6.25 CRISIL A4 (Reaffirmed)
Proposed Long Term
Bank Loan Facility 4.96 CRISIL B-/Stable (Reaffirmed)
Standby Line of Credit .50 CRISIL A4 (Reaffirmed)
The ratings reflect the expectation of a modest business risk
profile because of low operating income and operating
profitability. Operating revenue was INR13.2 crore in fiscal 2016
and is estimated at around INR15 crore in fiscal 2017. Operating
profitability remained negative in fiscal 2016 and is estimated
at around 3% for fiscal 2017. The operating revenue is expected
to remain stable over the medium term due to muted demand amid
intense competition.
Analytical Approach
CRISIL has treated unsecured loans of INR79 lakh as on March 31,
2016 (estimated at INR2.5 crore as on March 31, 2017) from
promoters, as neither debt nor equity, as the funds are non-
interest bearing and are expected to be retained in the business
over the medium term.
Key Rating Drivers & Detailed Description
Weaknesses
* Modest scale of operations, and low profitability owing to
intense competition
Axsys is a marginal player in the aluminium facade industry and
is vulnerable to changes in the domestic and global economies.
Demand from the domestic construction and real estate sector has
been subdued. Revenue is estimated at around INR15 crore for
fiscal 2017. Modest scale limits benefits of economies of scale,
and exposes the firm to intense competition. The intense
competition, in turn, constrains pricing power and profitability.
Ramp-up in scale will likely be gradual.
* Weak financial risk profile
Networth, at INR7.35 crore as on March 31, 2016, is expected to
remain modest over the medium term due to negative accretion to
reserves, driven by low operating profitability. Debt protection
metrics were below average, as reflected in negative interest
coverage (-0.11 time in fiscal 2016) and net cash accrual to
adjusted debt (-0.20 time in fiscal 2016) ratios. The interest
coverage and net cash accrual to adjusted debt ratios are
estimated at 0.55 time and -0.09 time in fiscal 2017. The metrics
are expected to remain below average over the medium term driven
by modest profitability.
Strength
* Extensive experience of promoters in business
The promoters and their family have been in the glass products
and processing industry through group entities Art N Glass Inc
(rated 'CRISIL BBB/Stable/CRISIL A3+'), Green Fenestration
Technologies, and other family-run businesses for close to three
decades. Synergies derived from having common end-user industries
such as real estate, and common suppliers are expected to
continue. Benefits from the extensive experience of the promoters
and growth prospects for the aluminium composite panels industry
are expected to continue over the medium term.
Outlook: Stable
CRISIL believes Axsys will continue to benefit over the medium
term from the experience of its promoters. The outlook may be
revised to 'Positive' if significant increase in scale and
profitability strengthens net cash accrual, and consequently, the
financial risk profile. The outlook may be revised to 'Negative'
if the financial risk profile, particularly liquidity,
deteriorates, most likely because of large, debt-funded capital
expenditure or a stretched working capital cycle.
Axsys, based in Sirmour, Himachal Pradesh (HP), manufactures
aluminium facades. Its unit is in Kala Amb, HP. The firm
commenced commercial operations in February 2015.
Axsys reported a net loss of INR2.6 crore on net sales of
INR13.16 crore in fiscal 2016, against net loss of INR1.5 crore
on net sales of INR68 lakhs in fiscal 2015.
BALAJI FIBRE: Ind-Ra Assigns BB Long-Term Issuer Rating
-------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Balaji Fibre
Reinforce Private Limited (BFRPL) a Long-Term Issuer Rating of
'IND BB'. The Outlook is Stable. The instrument-wise rating
actions are:
-- INR120 mil. Fund-based limits assigned with 'IND BB/Stable'
rating;
-- INR160 mil. Non-fund-based limits assigned with 'IND A4+'
Rating;
-- INR80 mil. Proposed fund-based limits* assigned with
'Provisional IND BB/Stable' rating; and
-- INR90 mil. Proposed non-fund-based limits* assigned with
'Provisional IND A4+' rating
* The above ratings are provisional and shall be confirmed upon
the sanction and execution of the loan documents for the above
facilities by BFRPL to the satisfaction of Ind-Ra.
KEY RATING DRIVERS
The ratings reflect BFRPL's small scale of operations and weak
credit metrics. According to provisional financials for FY17,
revenue was INR302 million (FY16: INR437 million; FY15: INR356
million), gross interest coverage (EBITDA/gross interest) was
1.2x (1.4x; 1.2), net financial leverage (net debt/EBITDA) was
4.0x (5.0x; 5.7x), operating EBITDA margin was 20.5% (18.8%;
19.1%) and debt/equity ratio was 2.3x (2.6x; 2.5x). The decrease
in revenue was due to low work order execution. Meanwhile, the
marginal decline in EBITDA margin was due to fluctuations in
costs of raw materials. Given BFRPL is likely to raise equity by
divesting its stake in FY18, Ind-Ra expects its credit metrics to
improve during the year.
The ratings also reflect BFRPL's tight liquidity profile,
indicated by almost 100% average working capital limit
utilization during the 12 months ended March 2017.
The ratings, however, are supported by a healthy long-term
revenue visibility. As of March 2017, the company had an order
book of INR4.244.70 billion (97x of FY16 revenue). Moreover,
BFRPL has a long operational track record of more than five
decades in manufacturing glass reinforced plastics/fiber-
reinforced plastics (GRP/FRP).
RATING SENSITIVITIES
Negative: Any deterioration in the credit profile could be
negative for the rating.
Positive: An improvement in the overall credit profile, along
with an improvement in debt/equity ratio, could be positive for
the ratings.
COMPANY PROFILE
BFRPL was formed in 1963 by Mr. Shantilal D Patel. The company
is an ISO 9001:2008, ISO 14001:2004 and OHSAS 18001:2007
certified company engaged in manufacturing various types of
GRP/FRP pipes, equipment and components used for water, oil and
gas, and other supply, and sewage treatment activity.
BALANAGU INDUSTRIES: CRISIL Cuts Rating on INR4.26MM Loan to B
--------------------------------------------------------------
CRISIL Ratings has been consistently following up with Balanagu
Industries (BI) for obtaining information through letters and
emails dated January 25, 2017 and February 14, 2017 among others,
apart from telephonic communication. However, the issuer has
remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Long Term Loan 4.26 CRISIL B/Stable (Issuer
Not Cooperating; Downgraded
from 'CRISIL B+/Stable')
Open Cash Credit 1.00 CRISIL B/Stable (Issuer Not
Cooperating; Downgraded
from 'CRISIL B+/Stable')
'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 Balanagu Industries. 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 Balanagu Industries 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.
Set up in May 2015, BI manufactures corrugated boxes, fibre
drums, and poly bags. The plant is located at Visakhapatnam
(Andhra Pradesh). The firm is promoted by the Mr. B V R Rao and
his family.
FCOM'S TEX: CRISIL Assigns 'B' Rating to INR10MM LT Loan
--------------------------------------------------------
CRISIL Ratings has assigned 'CRISIL B/Stable' rating to the long
term bank facility of Fcom's Tex (FCT). The ratings are driven by
FCT's project funding and implementation related risks and
geographical concentration in revenue profile. These weaknesses
are partially offset by the extensive experience of the promoters
in the apparel retail industry.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term
Bank Loan Facility 10 CRISIL B/Stable
Key Rating Drivers & Detailed Description
Weakness
* Early stage of operations and exposure to risks related to
stabilization of store
The promoters have proposed to set up a showroom of 8000 square
feet in Ernakulam, Kerala in the main market street, for
retailing readymade garments. The store is on leased property.
The interior work will be done post sanction of bank loan and
operations are expected to commence in the second half of fiscal
2018.
* Exposure to intense competition
FCT is exposed to intense competition from a number of Indian and
global brands in the domestic market. The domestic apparel market
is highly fragmented, marked by the presence of a large number of
organised and unorganised brands. FCT's business of selling
branded apparels for middle and lower-middle segment is driven by
fashion trends. Business risk profile should remain exposed to
intense competition from global and Indian brands.
Strengths
* Extensive experience of promoters
FCT benefits from the two-decade long experience of its promoters
and their established relationship with suppliers. The promoters
have 4 other stores as on February 26, 2017, and as a result have
a well-established presence in Kerala. The firm has an in-house
designing team. Benefits from the extensive experience of
promoters in the RMG segment should support business risk
profile.
Outlook: Stable
CRISIL believes FCT will continue to benefit from the extensive
experience of its promoters and the group fund support. The
outlook may be revised to 'Positive' in case of high cash accrual
or if improvement in capital structure strengthens financial risk
profile. The outlook may be revised to 'Negative' if commencement
of operations is delayed or cost overruns lower cash accrual or
if product demand is low.
FCT is part of the Fcom's group. It has been set up as a
partnership between Mr. Abdul Rahiman Firoz, his brother, Mr.
Faizal T Z and their wives. The firm is currently setting up a
showroom in Marker Road, Kochi for retailing textiles and
readymade garments.
Fcom Tex is yet to start operations.
D D INTERNATIONAL: CRISIL Assigns 'B' Rating to INR10MM Loan
------------------------------------------------------------
CRISIL Ratings has assigned its 'CRISIL B/Stable' rating to the
long-term bank facility of D D International (DDI).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 10 CRISIL B/Stable
The rating reflects DDI's below-average financial risk profile
with modest debt protection metrics and capital structure. The
rating also factors in a moderate scale in the highly competitive
dry fruit trading business. These weaknesses are partially offset
by the extensive experience of proprietor in the dry fruit
trading business.
Analytical Approach
For arriving at its ratings, unsecured loans of INR7.2 crore from
promoters as on March 2016, has been treated as neither debt nor
equity. This is because these are, infused by promoters and are
expected to remain in the business over the medium term.
Key Rating Drivers & Detailed Description
Weaknesses
* Below-average financial risk profile: The estimated total
outside liabilities to tangible networth ratio remained high at 9
times as on March 31, 2017. Also, the debt protection metrics is
subpar, with weak interest coverage ratio of 1.4 times in fiscal
2017.
* Moderate scale in the highly competitive dry fruit trading
business: Scale is moderate, with estimated revenue of INR60
crore in fiscal 2017. The dry fruit trading business is highly
competitive owing to presence of several traders across the
country.
Strength
* Extensive experience of proprietor in the dry fruit trading
business: The proprietor's extensive experience has helped forge
longstanding relationships with suppliers and customers.
Outlook: Stable
CRISIL believes DDI will continue to benefit from its
proprietor's extensive experience. The outlook may be revised to
'Positive' if the financial risk profile improves because of
higher-than-expected cash accrual, driven by substantial increase
in revenue and profitability. The outlook may be revised to
'Negative' if the financial risk profile weakens because of
lower-than-expected profitability or substantial working capital
requirement.
Formed in 1990 as a proprietorship firm, DDI trades in dry
fruits, including almonds, cashews, apricots, dates, and others.
The firm, based in Mumbai, is promoted by Mr. Darshan Kapadia.
Profit after tax was INR0.6 crore on net sales of INR41.68 crore
in fiscal 2016, against profit after tax of INR0.4 crore on net
sales of INR28.44 crore in fiscal 2015.
DACC INTERNATIONAL: CRISIL Cuts Rating on INR3MM Cash Loan to B
---------------------------------------------------------------
CRISIL Ratings has been consistently following up with DACC
International Private Limited (DACC) for obtaining information
through letters and emails dated November 30, 2016 and
January 20, 2017 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 3 CRISIL B/Stable (Issuer Not
Cooperating; Downgraded
from 'CRISIL B+/Stable')
Inland/Import Letter 15 CRISIL A4 (Issuer Not
of Credit Cooperating; Downgraded from
'CRISIL B+/Stable')
'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 DACC International 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 DACC International Private
Limited 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 long term rating to CRISIL
B/Stable and reaffirmed short term rating at CRISIL A4.
Incorporated in 2007 and promoted by Mr. Brij Bansal, DACC
manufactures and supplies alloys of aluminium and zinc, primarily
used for castings in the oil and gas and automotive industries.
Its facility is in Faridabad (Haryana); DACC's operations are
handled by Mr. Anuj Bansal and Ms. Shalu Bansal.
DALIP SINGH: CRISIL Downgrades Rating on INR1.0MM Cash Loan to B
----------------------------------------------------------------
CRISIL Ratings has been consistently following up with Dalip
Singh Rathore (DSR) 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
---------- --------- -------
Bank Guarantee 6.7 CRISIL A4 (Issuer Not
Cooperating; Downgraded
from 'CRISIL A4+')
Cash Credit 1.0 CRISIL B/Stable (Issuer Not
Cooperating; Downgraded
from 'CRISIL BB-/Stable')
'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 Dalip Singh Rathore. 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 Dalip Singh Rathore 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.
DSR, a proprietorship firm set up in 1985, is promoted by Mr.
Dalip Singh Rathore. It is a Class-A contractor and undertakes
civil construction works for state government agencies mainly in
Shimla and Solan (both in Himachal Pradesh).
DB DEVICES: CRISIL Assigns 'B' Rating on INR8MM Term Loan
---------------------------------------------------------
CRISIL Ratings has assigned its 'CRISIL B/Stable' rating to the
long-term bank facilities of dB Devices Private Limited (DB).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 8 CRISIL B/Stable
The rating reflects the DB's modest scale of operations in the
intensely competitive electronic components industry and its
below-average financial risk profile marked by modest net worth
and high capital structure. These weaknesses are partially offset
by the extensive experience of its promoter in electrical
component industry.
Key Rating Drivers & Detailed Description
Weaknesses
* Modest scale of operations in competitive industry: With
estimated turnover of INR11 crore for fiscal 2017, scale remains
modest in the intensely competitive electronic components
segment.
* Below-average financial risk profile:
The financial risk profile is constrained on high capital
structure and modest net worth. As on March 2017, the capital
structure is estimated at over 3 times and net worth is estimated
around INR3.5 crore during FY 2017.
Strength
* Extensive experience of promoters: Presence of more than four
decades in the electronic components industry has enabled the
promoters to establish strong relationship with customers and
suppliers.
Outlook: Stable
CRISIL believes DB will continue to benefit over the medium term
from the extensive experience of its promoters in electrical
component industry. The outlook may be revised to 'Positive' in
case of a significant and sustained increase in revenue and
profitability, while improving capital structure. The outlook may
be revised to 'Negative' if a sharp decline in revenue or
profitability, stretched working capital cycle, or sizeable,
debt-funded capital expenditure further weakens financial risk
profile.
Incorporated in 1996 and promoted by Shah family, DB manufactures
electronic components such as amplifiers and public audio at its
unit in Bhosari, Pune.
Profit after tax (PAT) was INR0.11 crore on operating income of
INR10.04 crore in fiscal 2016 against INR 0.13 crore and INR9.62
crore in fiscal 2015.
DBM GEOTECHNICS: CRISIL Reaffirms 'D' Rating on INR122MM Loan
-------------------------------------------------------------
CRISIL Ratings has been consistently following up with DBM
Geotechnics and Constructions Private Limited (DBM) for obtaining
information through letters and emails dated January 25, 2017 and
February 14, 2017 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 122 CRISIL D (Issuer Not
Cooperating; Rating
Reaffirmed)
Cash Credit 100.5 CRISIL D (Issuer Not
Cooperating; Rating
Reaffirmed)
Funded Interest 9.09 CRISIL D (Issuer Not
Term Loan Cooperating; Rating
Reaffirmed)
Proposed Long Term 42.82 CRISIL D (Issuer Not
Bank Loan Facility Cooperating; Rating
Reaffirmed)
Working Capital 10.59 CRISIL D (Issuer Not
Term Loan 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 DBM Geotechnics and
Constructions 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 DBM
Geotechnics and Constructions Private Limited 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 reaffirmed the rating
at CRISIL D/CRISIL D.
DBM, incorporated in 1990, specialises in offering geotechnical
services, foundation engineering services, and marine
construction activities. It is promoted by Mr. DB Mahajan, a
geotechnical engineer. DBM offers services such as geotechnical
investigation (land and marine), piling and micro piling,
construction of diaphragm wall, construction of berth/jetties,
pre-stressed rock anchoring, and topographic/hydrographic survey.
DGP STEEL: CRISIL Reaffirms 'B-' Rating on INR4.50MM Loan
---------------------------------------------------------
CRISIL's rating on the bank loan facilities of DGP Steel Star
Engineering Private Limited continue to reflect small scale and
working capital intensity in operations and concentration risks
in revenue profile. These rating weaknesses are partially offset
by moderate revenue visibility for the medium term.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 2.25 CRISIL A4 (Reaffirmed)
Cash Credit 4.50 CRISIL B-/Stable (Reaffirmed)
Earlier on 18th April 2017 CRISIL had upgraded the rating on the
bank loan facilities of DGP Steel Star Private Limited to 'CRISIL
B-/Stable/CRISIL A4' from CRISIL D/CRISIL D.
Key Rating Drivers & Detailed Description
Weaknesses
* Working capital intensity: Working capital requirement is
expected to remain large over the medium term. Gross current
assets were sizeable at 169 days as on March 31, 2016, because of
credit of around 90 days extended to customers, and inventory
mostly work-in-progress of 90 days.
* Small scale of operations: Intense competition in the
construction industry and the tender-driven nature of business
will continue to constrain scalability. Despite being in
operations since 1973, DGP's operating income was modest at
INR18.78 crore in fiscal 2016, exposing its profitability to
volatile raw material prices.
* Concentration risks in revenue: Operations are concentrated in
West Bengal and Odisha. Hence, the company is susceptible to
changes in the policies of the governments in these states.
Strengths
* Moderate revenue visibility: Unexecuted orders of INR10 crore
support revenue visibility for the medium term as on March 31,
2017.
Outlook: Stable
CRISIL believes DGP will continue to benefit over the medium term
from its long track record in the civil and industrial
construction sector and its healthy order book. The outlook may
be revised to 'Positive' in case of improvement in liquidity,
most likely through improved accrual or working capital
management, or infusion of capital by the promoters, along with
significant ramp-up in scale of operations. Conversely, the
outlook may be revised to 'Negative' if low accrual, stretch in
working capital cycle, or any large, capital expenditure weakens
financial metrics, including liquidity.
DGP was originally set up in 1973 as a proprietorship firm. In
1990, the firm was reconstituted as a corporate entity. It is
primarily engaged in industrial construction, including
construction of industrial buildings, setting up and
commissioning of industrial machinery and equipment such as
boilers in power plants, and fabrication and erection of rolling
mill structures. The company's day-to-day operations are looked
after by its current promoter-director, Mr. PS Mukherjee.
Profit after tax (PAT) was INR0.3 crore on revenue of INR18.78
crore in fiscal 2016, against PAT of INR0.31 crore on revenue of
INR23.03 crore in fiscal 2015.
EASTERN CONSTRUCTION: Ind-Ra Moves BB Rating to Non-Cooperating
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Eastern
Construction Company's (ECC) 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:
-- INR15 mil. Fund-based working capital limit migrated to
Non-Cooperating Category;
-- INR50 mil. Non-fund-based working capital limit migrated to
Non-Cooperating Category;
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
Feb. 19, 2015. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
ECC was established in 1991 as partnership unit and undertakes
civil construction jobs. The unit has its registered office in
Lucknow (Uttar Pradesh).
HARITASA CHECKMATE: CRISIL Downgrades Rating on INR9MM Loan to B
-----------------------------------------------------------------
CRISIL Ratings has been consistently following up with Haritasa
Checkmate Electronics Private Limited (HCEPL) 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
---------- --------- -------
Bank Guarantee 3 CRISIL A4 (Issuer Not
Cooperating; Downgraded
from CRISIL A4+)
Cash Credit 9 CRISIL B/Stable (Issuer Not
Cooperating; Downgraded from
CRISIL BB/Negative)
'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 Haritasa Checkmate Electronics
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 Haritasa Checkmate
Electronics Private Limited 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.
Incorporated in 2011, HCEPL is a manufacturer, agent, trader,
dealer and service provider of all Electronic and electrical
goods, Data and Voice Communication systems, security systems,
Building Management systems , Automation and Security, etc. The
company provides exclusive, standard as well as tailored
technical solutions for industrial projects, Cyber Parks, IT
industries, Hospitals, Hotels, educational institutions,
Government institutions and other sectors.
HIMACHAL FLOUR: CRISIL Reaffirms B+ Rating on INR7MM Loan
---------------------------------------------------------
CRISIL Ratings has reaffirmed its 'CRISIL B+/Stable' rating on
the long-term bank facility of Himachal Flour Mills Private
Limited.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 7 CRISIL B+/Stable (Reaffirmed)
The rating continues to reflect a modest scale of operations and
intense competition from other players in the vicinity. Revenue
was INR23.59 crore in fiscal 2017, and is expected to grow
moderately at 5-10% per annum over the medium term backed by the
extensive experience of the promoters and established
relationship with customers.
Liquidity is supported by unsecured loans from related parties,
and sufficient cash accrual to service debt over the medium term.
Although the working capital cycle is stretched, bank limit
utilisation averaged around 45% over the 12 months through
September 2016.
Key Rating Drivers & Detailed Description
Weakness
* Modest scale of operations in the highly fragmented agro-
commodities industry:
Operating revenue was INR23.59 crore in fiscal 2017. Scale of
operations is expected to remain modest because of the fragmented
nature of the industry and intense competition due to numerous
small-scale unorganised players catering to local demands.
* Below-average financial risk profile:
The total outside liabilities to tangible networth ratio was
high, estimated at around 3.49 times as on March 31, 2017, and is
expected at 2-3 times over the medium term. The debt protection
metrics were average: the interest coverage ratio is estimated at
around 1.53 times for fiscal 2017, and is expected to remain at a
similar level over the medium term due to a sustained operating
margin and limited debt.
Strengths
* Extensive industry experience of the promoters:
An experience of more than four decades in the industry has
enabled the promoters to diversify revenue across different
districts and customers, while maintaining growth in topline,
despite competition and slowdown in demand.
Outlook: Stable
CRISIL believes HFMPL will continue to benefit from the extensive
industry experience of its promoters. The outlook may be revised
to 'Positive' in case of an improvement in the scale of
operations and profitability, leading to higher net cash accrual.
The outlook may be revised to 'Negative' if the financial risk
profile weakens, most likely due to pressure on profitability or
substantial, debt-funded capital expenditure.
HFMPL was set up in 1972 as a partnership firm, Himachal Flour
Mills, which was reconstituted as a private limited company with
the current name in 1996. The key promoter and director, Mr.
Jagmohan Lal Gupta, along with his family members, manages
operations. The company manufactures atta, suji, and maida at its
facilities in Kangra, Himachal Pradesh. The products are sold to
the state government as well as in the wholesale market under the
Hans brand.
On a provisional basis, profit after tax (PAT) was INR0.08 crore
on net sales of INR23.59 crore for fiscal 2017, vis-a-vis profit
after tax (PAT) was INR0.07 crore on net sales of INR21.45 crore
for ffor fiscal 2016.
HINDUSTHAN LOHA: Ind-Ra Affirms 'BB' Long-Term Issuer Rating
------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed Hindusthan Loha
Limited's (HLL) Long-Term Issuer Rating at 'IND BB'. The Outlook
is Stable. The instrument-wise rating action is:
-- INR230 mil. Fund-based limits affirmed with 'IND BB/Stable'
rating
KEY RATING DRIVERS
The affirmation reflects HLL's continued moderate scale of
operations and modest credit profile. According to provisional
results for FY17, revenue was INR1.322 billion (FY16: INR1.561
billion, FY15: INR1.489 billion) interest coverage (operating
EBITDA/gross interest expense) was 1.42x (1.20x, 1.27x) and net
financial leverage (adjusted net debt/operating EBITDAR) was
5.55x (5.77x, 6.88x). The fall in revenue since FY15 has
primarily been due to lower sales realization. However, the
credit metrics have improved since FY15 on the back of an
increase in EBITDA to INR35 million in FY17 (FY16: INR33 million;
FY15: INR26 million).
The ratings also factor in HLL's tight liquidity position as
reflected by its maximum working capital limit utilization of 91%
during the 12 months ended March 2017.
The ratings, however, are supported by the more than two decades
of experience of one of the company's promoters in the iron and
steel trading business.
RATING SENSITIVITIES
Positive: A positive rating action could result from a sustained
improvement in the EBITDA interest coverage ratio.
Negative: A negative rating action could result from further
deterioration in the EBITDA interest coverage ratio.
COMPANY PROFILE
Incorporated in July 2013, HLL is engaged in the trading of iron
and steel products in Raipur, Chhattisgarh. The company is
managed by three promoters namely Vipin Kumar Aggarwal, Ganga
Dhar Aggarwal and Ritu Agrawal.
HOLLY OFFSHORE: CRISIL Lowers Rating on INR5.55MM LT Loan to B
---------------------------------------------------------------
CRISIL Ratings has been consistently following up with Holly
Offshore Logistics Limited (HOLL) 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
---------- --------- -------
Bank Guarantee 0.5 CRISIL A4 (Issuer Not
Cooperating; Downgraded
from CRISIL A4+)
Cash Credit 1.5 CRISIL B/Stable (Issuer
Not Cooperating; Downgraded
from CRISIL BB/Stable)
Long Term Loan 5.55 CRISIL B/Stable (Issuer Not
Cooperating; Downgraded from
CRISIL BB/Stable)
'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 Holly Offshore Logistics
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 Holly Offshore Logistics
Limited 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.
Incorporated in 2007, HOLL offers logistics support and dredging
services, and is also engaged in ship-building activity. The
company operates from Visakhapatnam and Kakinada ports (both in
Andhra Pradesh). The day to day operations of the company is
managed by Mr. D Damodar.
HOTEL VAKRATUNDA: Ind-Ra Migrates B Rating to Non-Cooperating
-------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Hotel
Vakratunda'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 B(ISSUER NOT COOPERATING)' on the agency's
website. The instrument-wise rating action is:
-- INR62.50 mil. Term loan migrated to Non-Cooperating
Category
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
Feb. 23, 2016. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Hotel Vakratunda is a proprietorship entity and operates a hotel
and restaurant business.
INDICO MOTORS: Ind-Ra Assigns BB Long-Term Issuer Rating
--------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Indico Motors
Private Limited (IMPL) a Long-Term Issuer Rating of 'IND BB'.
The Outlook is Stable. The instrument-wise ratings actions are:
-- INR220 mil. Fund-based limits assigned with 'IND BB/Stable'
rating;
-- INR20 mil. Non-fund-based limits assigned with 'IND A4+'
Rating;
-- INR40 mil. Proposed fund-based limits* assigned with
'Provisional IND BB/Stable' rating;
-- INR50 mil. Proposed non-fund-based limits assigned with
'Provisional IND A4+' rating
* The above ratings are provisional and shall be confirmed upon
the sanction and execution of the loan documents for the above
facilities by IMPL to the satisfaction of Ind-Ra.
KEY RATING DRIVERS
The ratings reflect IMPL's moderate credit profile. According to
provisional financials for FY17, revenue was INR1.002 billion
(FY16: INR298 million; FY15: INR116 million), EBITDA margin was
10% (16.6%; 9.2%), interest coverage (operating EBITDA/gross
interest expense) was 2.7x (1x; 0.3x) and net leverage (total
adjusted net debt/operating EBITDAR) was 4.9x (6.5x; 30.7x). The
increase in revenue was due to higher orders from Tata Motors
Limited, and the decline in EBITDA margin was due to a rise in
cost of materials.
The ratings reflect IMPL's tight liquidity profile, indicated by
almost 99% average working capital limit utilization during the
12 months ended March 2017.
The ratings, however, are supported by IMPL's long operational
track record of almost three decades in manufacturing trippers,
trailers and tip trailers. Moreover, IMPL has long-term
relations with large automobile makers such as Tata Motors
Limited and Ashok Leyland Limited.
RATING SENSITIVITIES
Negative: A decline in the overall credit profile will be
negative for the ratings.
Positive: A substantial increase in revenue, along with an
improvement in credit metrics, will be positive for the ratings.
COMPANY PROFILE
IMPL is an ISO 9001:2000 certified company that was founded in
1989 by Mr. Sanjay Dubey. IMPL is engaged in the manufacturing
of bodies of heavy commercial vehicles such as tippers, trailers
and tip trailers. It has two manufacturing units in Jamshedpur
(Jharkhand) and Hosur (Chennai) that have a combined production
capacity of over 600 vehicles per month.
INFINIUM PHARMACHEM: CRISIL Cuts Rating on INR5MM Cash Loan to B
----------------------------------------------------------------
CRISIL Ratings has been consistently following up with Infinium
Pharmachem Private Limited (Infinium) 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 5 CRISIL B/Stable (Issuer Not
Cooperating; Downgraded from
CRISIL B+/Stable)
Term Loan 1.25 CRISIL B/Stable (Issuer Not
Cooperating; Downgraded from
CRISIL B+/Stable)
'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 Infinium Pharmachem 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 Infinium Pharmachem Private
Limited 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.
Infinium was set up in 2003 in Anand (Gujarat). It is a
manufacturer and supplier of around 60 Iodine derivatives and its
allied products. The business is managed by founder/Managing
director Mr. Sanjay Patel. Infinium also has its manufacturing
plant in Anand.
IQBAL CONSTRUCTION: Ind-Ra Migrates BB+ Rating to Non-Cooperating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Iqbal
Construction Company'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:
-- INR20 mil. Fund-based working capital limit migrated to Non-
Cooperating Category; and
-- INR55 mil. Non-fund-based working capital limit migrated to
Non-Cooperating Category
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
March 10, 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, Iqbal Construction Company executes civil
construction work for public sector entities and various state
government bodies.
J.D. CONSTRUCTION: Ind-Ra Migrates BB- Rating to Non-Cooperating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated J.D.
Construction'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 BB-(ISSUER NOT COOPERATING)' on the agency's
website. The instrument-wise rating actions as:
-- INR25 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 assigned on
April 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 2008 by Mr. Binapani Jena, J.D. Construction is a
civil contractor and order supplier for the West Bengal State
Electricity Transmission Company Limited ('IND A'/Stable), Odisha
Power Transmission Company Limited, Mavin Switch Gear & Control
Private Limited and other such organizations.
KBR COMMODITIES: Ind-Ra Affirms BB Long-Term Issuer Rating
----------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed KBR Commodities'
(KBRC) Long-Term Issuer Rating at 'IND BB'. The Outlook is
Stable. Instrument-wise rating actions are:
-- INR230 mil. Fund-based limit affirmed with 'IND BB/Stable'
rating; and
-- INR12 mil. (reduced from INR17) Term loan affirmed with
'IND BB/Stable' rating
KEY RATING DRIVERS
The affirmation reflects KBRC's partnership nature of business,
modest scale of operations and low EBITDA margins. As per
provisional financials for FY17, revenue plunged to INR2.788
billion (FY16: INR4.071 billion) on account of a decline in
cotton trading business to INR1.642 billion (INR3.366 billion);
although revenue from cotton seed oil manufacturing increased to
INR947 million (INR703 million). The cotton trading business is
dependent on the opportunities available in the market; hence,
its scale will continue to remain volatile.
KBRC's overall EBITDA margins improved to 2.2% in FY17 (FY16:
1.1%) due to lower contribution from low margin cotton trading
business in FY17. Gross interest coverage (operating
EBITDA/interest expenses) improved to 2.1x in FY17 (FY16: 1.5x)
owing to an improvement in EBITDA, although net adjusted leverage
(net adjusted debt/operating EBITDA) remained high at 4.2x
(4.0x).
The company has a low net cash cycle (FY17: 14 days, FY16: 1
day), which helps in mitigating commodity price risk. KBRC had a
moderate liquidity position with around 86% average use of fund-
based limits for the 12 months ended March 2017.
The ratings further benefit from the partners' experience of
nearly one decade in the cotton business.
RATING SENSITIVITIES
Positive: A positive rating action could result from an increase
in the scale of operations along with an improvement in the
overall credit metrics.
Negative: A negative rating action could result from reduction in
the scale of operations and/or EBITDA margins leading to
weakening of the overall credit metrics.
COMPANY PROFILE
Established in September 2014, KBRC is a partnership firm engaged
in the extraction of cotton seed oil, and trading of cotton and
allied products. The company has an annual installed cotton seed
processing capacity of 0.32 million quintals. KBRC is a part of
the Manjeet Cotton Group, engaged in ginning, pressing and
trading of cotton on a large scale in India.
KHUDIRAM COLD: CRISIL Reaffirms 'B' Rating on INR4.90MM Loan
------------------------------------------------------------
CRISIL Ratings has been consistently following up with Khudiram
Cold Storage Private Limited (KCSPL) 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
---------- --------- -------
Bank Guarantee 0.1 CRISIL A4 (Issuer Not
Cooperating; Rating
Reaffirmed)
Cash Credit 3.69 CRISIL B/Stable (Issuer
Not Cooperating; Rating
Reaffirmed)
Long Term Loan 4.90 CRISIL B/Stable (Issuer
Not Cooperating; Rating
Reaffirmed)
Working Capital Loan .97 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 Khudiram Cold Storage 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 Khudiram Cold Storage Private
Limited 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 reaffirmed the rating at CRISIL
B/Stable/CRISIL A4.
KCSPL was incorporated in 2004 to provide cold storage facility
to the potato farmers and traders. The company commenced
commercial operations in 2006. KCSPL is owned by the Midnapore
(West Bengal)-based Manna family having extensive experience of a
decade in cold storage industry and over two decades in potato
trading.
LOTUS WIRELESS: CRISIL Lowers Rating on INR58MM Bank Loan to B
--------------------------------------------------------------
CRISIL Ratings has been consistently following up with Lotus
Wireless Technologies India Private Limited (Lotus) 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
---------- --------- -------
Bank Guarantee 13 CRISIL A4 (Issuer Not
Cooperating; Downgraded
from 'CRISIL A4+')
Cash Credit 4 CRISIL B/Stable (Issuer
Not Cooperating; Downgraded
from 'CRISIL BB+/Stable')
Letter of Credit 5 CRISIL A4 (Issuer Not
Cooperating; Downgraded
from 'CRISIL A4+')
Proposed Long Term 58 CRISIL B/Stable (Issuer Not
Bank Loan Facility Cooperating; Downgraded from
'CRISIL BB+/Stable')
'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 Lotus Wireless Technologies
India 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 Lotus Wireless
Technologies India Private Limited 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.
Lotus was set up in 2003 by Mr. Maninder Singh and his family
members. The company designs and manufactures wireless and radio-
based control devices and equipment. It also undertakes wireless-
solutions based projects on a turnkey basis. The company is based
in Visakhapatnam (Andhra Pradesh).
MAHAVIR BUILDERS: CRISIL Lowers Rating on INR10MM Cash Loan to B
----------------------------------------------------------------
CRISIL Ratings has been consistently following up with Mahavir
Builders (MB) 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 10 CRISIL B/Stable (Issuer
Not Cooperating; Downgraded
from 'CRISIL BB-/Stable')
Proposed Long Term 10 CRISIL B/Stable (Issuer Not
Bank Loan Facility Cooperating; Downgraded from
'CRISIL BB-/Stable')
'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 Mahavir Builders. 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 Mahavir Builders 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.
Set up in 2003 as a partnership entity by Mr. Pravin K Dedhia and
his family, MB develops commercial real estate in Hyderabad.
NICHEM INDUSTRIES: Ind-Ra Migrates BB Rating to Non-Cooperating
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Nichem
Industries' 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:
-- INR150 mil. Fund-based working capital limit migrated to
Non-Cooperating Category; and
-- INR40 mil. Proposed fund-based working capital limit
migrated to Non-Cooperating Category
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
Jan. 29, 2016. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Established in 1988, Nichem is an Ahmedabad-based manufacturer of
reactive and synthetic organised dyes, with an annual installed
capacity of 1,560mtpa.
OM POWER: CRISIL Downgrades Rating on INR1MM Cash Loan to 'B'
-------------------------------------------------------------
CRISIL Ratings has been consistently following up with Om Power
Transmission Private Limited (OPTPL) for obtaining information
through letters and emails dated January 25, 2017 and February
14, 2017 among others, apart from telephonic communication.
However, the issuer has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 6.55 CRISIL A4 (Issuer Not
Cooperating; Rating
Reaffirmed)
Cash Credit 1.00 CRISIL B/Stable (Issuer
Not Cooperating; Downgraded
from 'CRISIL B+/Stable')
'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 Om Power Transmission 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 Om Power Transmission Private
Limited 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 long term rating to CRISIL
B/Stable and reaffirmed short term rating at CRISIL A4.
OPTPL, formerly known as OM Enterprise is Ahmedabad based
Electrical Contracting Company which was formerly into marketing
of LT electrical products & contracting of lighting & maintenance
work. Over the years, it has emerged as EPC and Operations &
Maintenance Contracting Company in the area of Transmission lines
& Sub stations up to 400 KV including Industrial Power
Distribution.
PRITS LEATHER: Ind-Ra Assigns BB+ Long-Term Issuer Rating
---------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Prits Leather
Art Private Limited (PLAPL) a Long-Term Issuer Rating of 'IND
BB+'. The Outlook is Stable. The instrument-wise rating action
is:
-- INR145 mil. Fund-based limits assigned with
'IND BB+/Stable/IND A4+' rating
KEY RATING DRIVERS
The ratings are constrained by PLAPL's volatile operating EBITDA
margins due to its vulnerability to foreign exchange fluctuations
and presence in a highly competitive industry. FY17 provisional
numbers indicate EBITDA margins of 8.73% (FY16: 3.82%; FY15:
5.46%).
The ratings, however, are supported by PLAPL's moderate scale of
operations and strong credit metrics. In FY17, revenue was
INR681.11 million (FY16: INR682.94 million; FY15: INR616.89
million), net interest coverage (operating EBITDAR/net interest
expense + rents) was 15.10x (4.86x; 6.03x) and net leverage
(adjusted net debt/operating EBITDAR) was 1.84x (2.69x; 2.29x).
The significant improvement in interest coverage in FY17 is
attributed to an improvement in absolute EBITDA and a decrease in
interest expense to INR6.94 million (FY16: INR12.54 million).
The ratings are also supported by the company's comfortable
liquidity profile and negative net working capital cycle. Its
average peak use of the fund-based limits was 33.90% during the
12 months ended March 2017, cash flow from operations was
INR32.31 million (INR21.64 million) and working capital cycle was
negative 9 days (negative 22 days).
RATING SENSITIVITIES
Negative: Any dip in the revenue or operating profitability
leading to deterioration in the credit metrics on a sustained
basis and/or elongation in the net working capital cycle will be
negative for the ratings.
Positive: Substantial growth in the revenue along with
improvement in the operating profitability leading to improvement
in the credit metrics on a sustained basis will be positive for
the ratings.
COMPANY PROFILE
Established in 2009, PLAPL manufactures and exports a wide line-
up of leather products including garments, bags, belts,
accessories. Its production capacity is 20,000 garments, 10,000
belts and about 10,000 bags per month.
SANGINI COMMERCE: CRISIL Reaffirms 'B-' Rating on INR50MM Loan
--------------------------------------------------------------
CRISIL Ratings has been consistently following up with Sangini
Commerce Private Limited (SCPL) 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
---------- --------- -------
Term Loan 50 CRISIL B-/Stable (Issuer
Not Cooperating; Rating
Reaffirmed)
Working Capital 5 CRISIL B-/Stable (Issuer
Demand Loan 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 Sangini Commerce 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 Sangini Commerce Private
Limited 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 reaffirmed the rating at CRISIL B-
/Stable.
SCPL was incorporated in March 2007 by Mr. Pun Pun Agrawal and
Mr. Pawan Agrawal to undertake trading operations. In September
2009, SCPL was acquired by Ms. Rani Maurya and Mr. Madhukar
Maurya to enter the hotel business. The company is constructing a
150-room premium (five-star category) hotel at Sarnath in
Varanasi (Uttar Pradesh), and recently entered into an agreement
with the Hyatt group for management of the hotel.
SATTIK EXPORTS: CRISIL Reaffirms 'B+' Rating on INR.45MM Loan
-------------------------------------------------------------
CRISIL Ratings has reaffirmed its ratings on the bank facilities
of Sattik Exports Private Limited (SEPL) at 'CRISIL
B+/Stable/CRISIL A4'. The ratings reflect small scale of
operations and high geographic and customer concentration risks
in revenue. These rating weaknesses are mitigated by the
promoter's extensive experience and moderate financial risk
profile.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Letter of Credit 1 CRISIL A4 (Reaffirmed)
Packing Credit 6 CRISIL A4 (Reaffirmed)
Proposed Long Term
Bank Loan Facility .45 CRISIL B+/Stable (Reaffirmed)
Key Rating Drivers & Detailed Description
Weakness
* Small scale of operation: Despite being in operations since
2006, scale of operations remains modest with operating income of
INR6.72 crore in fiscal 2016 and around INR9.01 crore in fiscal
2017. This is because of slowdown in European Union, currency
fluctuations and slow demand in fiscal 2016. The operating income
is expected to improve over the medium term with improved
conditions in European Union.
* High geographical and customer concentration in revenue: Export
of leather bags to Netherlands alone contributes 75% to revenue.
Customer base is also small, with sales to Mokorian BV alone
contributing more than 70% to revenue, despite the company's
initiatives to add new customers. Revenue is, therefore,
susceptible to any slowdown in demand in the European market, or
from the key customer, as witnessed in fiscal 2016.
Strengths
* Promoter's extensive experience and healthy relations with
customers: Promoter, Mr. Sanjay Saha has been in the leather
industry since 2005, and has substantial trading experience
through partnership firm, The United Trade. Benefits from his
keen grasp of industry dynamics, and healthy relationships with
key customers such as Mokarian BV, Kadro GM and Nomade, resulted
in an operating income of INR 6.72 crores in fiscal 2016 and
around INR9.01 crores in fiscal 2017, despite the overall decline
in export of leather goods from India. Mr. Saha's extensive
experience is expected to provide continuous support business and
result in repeat orders leading to better sales.
* Moderate financial risk profile: The net worth has improved to
INR13.98 crore in fiscal 2016 and is estimated to be around
INR14.13 crore on March 31, 2017, on account of steady accretion
to reserves and continuous equity infusion. Gearing remains
moderate at around 0.24 times and 0.25 times as on March 31, 2016
and March 31, 2017. The debt protection metrics remain moderate
with NCATD and interest coverage in the range of 0.12 times and
6.18 times respectively in fiscal 2016 and is estimated to
improve at similar level in fiscal 2017. The debt protection
metrics is expected to remain moderate in the absence of any debt
funded capex plans over the medium term.
Outlook: Stable
CRISIL believes SEPL will continue to benefit over the medium
term from the promoter's extensive experience. The outlook may be
revised to 'Positive' if substantial improvement in scale of
operations and profitability leads to better liquidity.
Conversely, the outlook may be revised to 'Negative' if low
revenue, profitability and accrual, or any large, debt-funded
capital expenditure weakens financial metrics.
Set up in 2005, by Mr. Sanjay Saha, SEPL manufactures and exports
leather bags and wallets.
Profit after tax (PAT) and net sales are estimated at around
INR0.04 crore and INR6.12 crore, respectively, for 2015-16
(refers to financial year, April 1 to March 31); the company
reported a PAT of INR0.25 crore on net sales of INR8.42 crore for
2014-15.
SHREE BALA: CRISIL Lowers Rating on INR11MM Term Loan to 'B'
------------------------------------------------------------
CRISIL Ratings has been consistently following up with Shree Bala
Ji Warehouse (SBW) 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
---------- --------- -------
Term Loan 11 CRISIL B/Stable (Issuer Not
Cooperating; Downgraded
from 'CRISIL B+/Stable')
'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.
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of Shree Bala Ji Warehouse. 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 Shree Bala Ji Warehouse 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.
SBW Incorporated in 2012, Shree Bala Ji Warehouse (SBW) is a
partnership firm and is promoted by Mr.Sandeep Kodan, Ramesh
Kumar and Mr. Suresh Kumar. The firm has constructed a warehouse
of 52,500 MT to facilitate storage of agro based products storage
in Barwara (Haryana). It has signed an agreement of 10 years with
The Haryana State Cooperative Supply and Marketing Federation Ltd
(HAFED)for the same. The warehouse is constructed with an
estimated cost of INR18.10 Cr and has started its commercial
operations in May 2014.
SHRI LAL: CRISIL Reaffirms 'B+' Rating on INR3MM LT Loan
--------------------------------------------------------
CRISIL Ratings has been consistently following up with Shri Lal
Bahadur Shastri Research and Training Institute (SLBS) 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 2 CRISIL B+/Stable (Issuer Not
Cooperating; Rating
Reaffirmed)
Proposed Long Term 3 CRISIL B+/Stable (Issuer Not
Bank Loan Facility Cooperating; Rating
Reaffirmed)
Term Loan 2 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 Shri Lal Bahadur Shastri
Research and Training Institute. 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 Shri
Lal Bahadur Shastri Research and Training Institute 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
reaffirmed the rating at CRISIL B+/Stable.
Established in 2000, SLBS is a registered society which runs 10
education institutions including one school and nine institutions
offering various courses in engineering, nursing, teacher
training and animal husbandry. These institutions are located in
Jodhpur and Jaipur (both in Rajasthan).
SHUKAN MICRO: CRISIL Reaffirms 'B' Rating on INR7.2MM Term Loan
---------------------------------------------------------------
CRISIL Ratings has reaffirmed ratings on the bank facilities of
Shukan Micro Minerals LLP (SMM LLP) at 'CRISIL B/Stable/CRISIL
A4'. The ratings reflect a small scale and early stage of
operations in the intensely competitive ceramics industry, and
large working capital requirement. These weaknesses are mitigated
by the extensive industry experience of the partners, and the
favourable location of the plant ensuring availability of raw
material and labour.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 0.6 CRISIL A4 (Reaffirmed)
Cash Credit 4.0 CRISIL B/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility 0.2 CRISIL B/Stable (Reaffirmed)
Term Loan 7.2 CRISIL B/Stable (Reaffirmed)
Analytical Approach
For arriving at the ratings, unsecured loans from partnershave
been treated as neither debt nor equity as thesecarry a lower-
than-the-market interest rate, and will remain in the business
over the medium term.
Key Rating Drivers & Detailed Description
Weaknesses
* Initial phase and modest scale of operations in a competitive
industry:
Operations began from August 2016. Cash accrual will be lower
during the plant stabilisation period. Hence, scale of operations
will remain small over the medium term (revenue is estimated at
Rs9.9 crore for fiscal 2017).This is compounded by intense
competition,which limits bargaining power with suppliers and
customers.
* Large workingcapitalrequirement:
Inventory is sizeable at 40-50 days, in line with industry
practice. Also, credit of 80-100 daysis extended to clients.
Strengths
* Extensive experience of the partners
The partners have been in theceramics industry for over a decade
through group companies. This has enabled them to understand
local market dynamics and establish a strong relationship with
suppliers and customers.
* Favourable location ensuring availability of raw material and
labour:
The plant is located in Morbi, Gujarat, the hub of India's
ceramic tiles segment. This ensures easy access to clay (main raw
material), and availability of contractors and skilled labour.
Outlook: Stable
CRISIL believes SMM LLP will maintain its business risk profile
backed by the experience of its partners. However, the financial
risk profile is expected to remain moderate over the medium term
with average gearing and debt protection metrics due to lower
accrual during the project stabilisation phase. The outlook may
be revised to 'Positive' if earlier-than-expected stabilisation
of operations improves the financial risk profile. The outlook
may be revised to 'Negative' in case of a lower-than-anticipated
operating margin, sizeable debt-funded expansion, or inefficient
working capital management, leading to weakening of the financial
risk profile.
SMM LLP was incorporated in June 2015 in Morbi, promoted
byMrGodhaviyaBhaveshNarbheram, MrBhesadadia Hitesh Hardas,
MrVirangama Ramesh Amarsi, and MrFultariyaGunvanyRavji. It has a
manufacturing unit for NA2O feldspar and K2O feldspar - purified
clay used in manufacturing of ceramic products.
In fiscal 2017, net loss was INR0.93 crore on an operating income
of INR9.90 crore.
SIRI GANESH: CRISIL Lowers Rating on INR7.0MM Cash Loan to 'B'
--------------------------------------------------------------
CRISIL Ratings has been consistently following up with Siri
Ganesh Rice And Oil Mills (SGRM) 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 7 CRISIL B/Stable (Issuer Not
Cooperating; Downgraded from
CRISIL BB-/Stable)
Proposed Long Term 5.5 CRISIL B/Stable (Issuer Not
Bank Loan Facility Cooperating; Downgraded from
CRISIL BB-/Stable)
'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 Siri Ganesh Rice And Oil
Mills. 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 Siri Ganesh Rice And Oil Mills 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.
SGRM was incorporated by Mahajan family of Amritsar (Punjab) in
1972 as a proprietorship firm and was reconstituted as a
partnership firm in 2002. It mills and processes paddy into
basmati rice, rice bran, broken rice, and husk. Mr. Krishan Lal
Mahajan, Mr. Sumit Mahajan, and Ms. Saroj Mahajan are partners in
the firm and manage its operations.
SPARSH INDUSTRIES: Ind-Ra Affirms BB+ Long-Term Issuer Rating
-------------------------------------------------------------
India Ratings and Research (Ind-Ra) has revised Sparsh Industries
Private Limited's (SIPL) Outlook to Stable from Positive while
affirming the Long-Term Issuer Rating at 'IND BB+'. The
instrument-wise rating actions are:
-- INR780 mil. (increased from INR545) Fund-based working
capital facilities affirmed with 'IND BB+/Stable/IND A4+'
rating and revises outlook to stable;
-- INR420 mil. Non-fund-based bank facilities affirmed with
'IND BB+/Stable/IND A4+' rating and revises outlook to
stable; and
-- INR2.555 mil. (increased from INR2504) Term loan affirmed
with 'IND BB+/Stable' rating and revises outlook to stable
KEY RATING DRIVERS
The Outlook revision back to Stable reflects SIPL's lower-than-
expected deleveraging in FY17 on account of a lower-than-expected
EBITDA. The net adjusted leverage (net adjusted debt/operating
EBITDAR) is likely to have stayed around 7.7x according to the
provisional FY17 (FY16: 8.3x; FY15: 5.6x) against Ind-Ra's
expectations of a ratio below 5x. This was driven by SIPL's
belief of commissioning its new biaxially-oriented polyethylene
terephthalate (BOPET) in June 2016, strong volume growth and an
expansion in EBITDA/kg. FY17 financials are provisional in
nature.
However, the BOPET line was commissioned in October 2016,
impacting the volume growth. The company achieved volume growth
of 36%yoyin FY17 (FY16: 35%) in BOPET films compared to
management expectations of about 52%. Also, gross margins
declined to INR27/kg in FY17 (FY16: INR30/kg), leading to
EBITDA/kg falling to INR12.5 (INR13.7) as against Ind-Ra's
expectation of an increase. Thus, the combined effect of both
lower per unit margin and lower quantity sold resulted in the
EBITDA being lower than expected.
Ind-Ra expects the net leverage to decline over FY18-FY19, due to
EBITDA accretion from the new BOPET capacity as the capacity
utilization improves and benefits of economies of scale kick in.
Moreover, SIPL does not intend to incur additional growth capex
over the near to medium term, limiting the possibility of further
debt requirements.
The ratings also factor in SIPL's weak debt service coverage
ratio at 1x-1.2x for FY18-FY19; however, Ind-Ra draws comfort
from the track record of the promoters to infuse funds.
SIPL's ratings continue to factor in the inherent business risks
of the demand-supply disparity in the BOPET markets, BOPET price
volatility and adverse movements in input prices (raw materials
are derived from crude oil). Moreover, the ability of the
company to pass on input price variations to the end consumers in
an oversupplied market could remain challenged.
RATING SENSITIVITIES
Positive: Increased earnings, leading to net financial leverage
reducing below 5x on a sustained basis, will result in a rating
upgrade.
Negative: Weak earnings leading to delays in deleveraging will
result in a rating downgrade.
COMPANY PROFILE
SIPL is a part of Kanpur-based Sparsh Group. It was incorporated
in 2009 and manufactures BOPET films at Jainpur industrial area,
near Kanpur. It has a total installed capacity of 61,683mtpa.
SRI LAKSHMI: CRISIL Reaffirms 'B' Rating on INR4.5MM Loan
---------------------------------------------------------
CRISIL Ratings has been consistently following up with Sri
Lakshmi Mini Rice Mill (SLMRM) 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 4.5 CRISIL B/Stable (Issuer Not
Cooperating; Rating
Reaffirmed)
Letter Of Guarantee .71 CRISIL A4 (Issuer Not
Cooperating; Rating
Reaffirmed)
Long Term Loan 3.75 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 Sri Lakshmi Mini Rice Mill.
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 Sri Lakshmi Mini Rice Mill is
consistent with 'Scenario 3' outlined in the '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/CRISIL A4.
SLMRM, a partnership firm, mills non-basmati parboiled rice from
paddy. Its manufacturing facility is in Bankura (West Bengal).
Mr. Nanigopal Dalui, Mr. Swapan Chandra Koner, Mr. Rajkumar
Dalui, Mr. Subir Kumar Dalui, and Ms. Padmarani Koner are the
firm's partners. Its operations are managed by Mr. Rajkumar
Dalui.
SRI MURUGAR: CRISIL Downgrades Rating on INR9MM Cash Loan to B
--------------------------------------------------------------
CRISIL Ratings has been consistently following up with Sri
Murugar Spinning Mill (SMSM) 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 CRISIL B/Stable (Issuer Not
Cooperating; Downgraded
from CRISIL BB-/Stable)
'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 Sri Murugar Spinning Mill.
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 Sri Murugar Spinning Mill 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.
SMSM was set up in 1997 by Mr. P V Devaraj and his family. The
firm is a synthetic yarn manufacturer with 27,000 installed
spindles.
SRI POWER: Ind-Ra Migrates BB Rating to Non-Cooperating
-------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Sri Power
Generation (India) Private Limited'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:
-- INR51 mil. Long-term loan migrated to Non-Cooperating
Category; and
-- INR31.5 mil. Non-fund-based working capital limits migrated
to Non-Cooperating Category
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
Oct. 19, 2015. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Sri Power develops solar power projects using photo voltaic
technology. It has two solar power plants in Andhra Pradesh, one
in Varadaipalem, Chittor District with a 2MW capacity and another
of 1MW capacity in Kadiri, Anantapur District.
SRI RAM: CRISIL Lowers Rating on INR2.4MM Bill Discounting to 'B'
-----------------------------------------------------------------
CRISIL Ratings has been consistently following up with Sri Ram
Fibres (SF) 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
---------- --------- -------
Bill Discounting 2.4 CRISIL B/Stable (Issuer
Not Cooperating; Downgraded
from CRISIL BB-/Stable)
Packing Credit 9.0 CRISIL A4 (Issuer Not
Cooperating; Downgraded
from CRISIL A4+)
Rupee Term Loan 1.1 CRISIL B/Stable (Issuer
Not Cooperating; Downgraded
from CRISIL BB-/Stable)
'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 Sri Ram Fibres. 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 Sri Ram Fibres 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.
SF, set up in 1992, manufactures and exports coconut coir. Its
day-to-day operations are managed by managing partner Mr. Leela
Krishnan.
STEELWAYS ENTERPRISES: CRISIL Reaffirms 'D' Rating on INR7MM Loan
-----------------------------------------------------------------
CRISIL Ratings has been consistently following up with Steelways
Enterprises (SE) 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 7 CRISIL D (Issuer Not
Cooperating; Rating
Reaffirmed)
Proposed Long Term 3 CRISIL D (Issuer Not
Bank Loan Facility 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 Steelways Enterprises. 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 Steelways Enterprises 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
reaffirmed the rating at CRISIL D.
SE was set up in 1983 as a partnership firm by Delhi-based Sharma
family. After a family separation, SE was reconstituted as a
proprietorship firm owned by Mr. B N Sharma. SE trades in tool
steels and alloy steels, such as cold work tool steel, plastic
mould steel, stainless steel, high-speed steel, and die block
steel, in the National Capital Region, Punjab, and Uttar Pradesh.
Mr. B N Sharma and his son Mr. Pawan Sharma actively manage the
firm's day-to-day operations.
VINOD KUMAR: Ind-Ra Affirms BB Long-Term Issuer Rating
------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed Vinod Kumar
Pandey's (VKP) Long-Term Issuer Rating at 'IND BB'. The Outlook
is Stable. Instrument-wise rating actions are:
-- INR50 mil. Fund-based working capital limit affirmed with
'IND BB/Stable' rating; and
-- INR40 mil. Non-fund-based working capital limit affirmed
with 'IND A4+' rating
KEY RATING DRIVERS
The ratings reflect VKP's small scale of operations, weak order
book, moderate EBITDA margin and modest liquidity position. As
per provisional financials for FY17, revenue was INR290 million
(FY16: INR280 million, FY15: INR256 million) and EBITDA margin
was 7.4% (7.2%). The firm had an order book of INR262.5 million
(0.90x of FY17 total revenue), expected to be completed by July
2017.
VKP's average use of working capital limits was 87.10% during the
12 months ended March 2017. The ratings are also constrained by
the proprietorship nature of the business.
However, the ratings benefit from VKP's strong credit metrics.
Gross interest coverage (operating EBITDA/gross interest expense)
improved to 4.2x in FY17 (FY16: 2.4x) owing to an increase in
operating EBITDA and decrease in interest expenses. Net
financial leverage (total adjusted net debt/operating EBITDAR)
improved to 0.8x in FY17 (FY16: 2.9x) due to low utilization of
working capital facilities during end-March 2017.
The ratings also draw support from the founder's more than two
decades of experience in the construction business.
RATING SENSITIVITIES
Positive: An improvement in the scale of operations, along with
an improvement in the credit metrics will lead to a positive
rating action.
Negative: A decline in the EBITDA margin leading to deterioration
in the credit metrics will be negative for the ratings.
COMPANY PROFILE
Raipur-based VKP was established in 1992 as a proprietorship
entity by Mr. Vinod Kumar Pandey. The entity is registered as
Class-A contractor with the government of Chhattisgarh. VKP
participates in the tender process of various government
departments of Chhattisgarh for civil construction projects such
as building construction and related ancillary works.
WINTOUCH CERAMIC: CRISIL Raises Rating on INR6.97MM Loan to B+
--------------------------------------------------------------
CRISIL Ratings has upgraded its rating on the long-term bank
facilities of Wintouch Ceramic (Wintouch) to 'CRISIL B+/Stable'
from 'CRISIL B/Stable',and reaffirmed the short-term rating at
'CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 1.6 CRISIL A4 (Reaffirmed)
Cash Credit 3 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
Proposed Long Term 0.93 CRISIL B+/Stable (Upgraded
Bank Loan Facility from 'CRISIL B/Stable')
Term Loan 6.97 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
The upgrade reflects ramp-up in, and stabilisation of,
operations. During fiscal 2017, sales are estimated to be around
INR24 crore, reflecting healthy increase since beginning
production in April 2015. Annual topline growth is likely to be
steady at 10-15% with increasing capacity utilisation and
geographical reach. Consequently, yearly cash accrual of INR2.5-3
crore will be sufficient to meet debt obligation. However,
financial risk profile remains constrained by modest networth and
large working capital requirement.
The ratings reflect Wintouch's modest, though improving, scale of
operations in the highly fragmented ceramics industry, and small
networth. These weaknesses are partially offset by the extensive
experience of its promoters, proximity to raw material and labour
resources, and adequate debt protection metrics.
Key Rating Drivers & Detailed Description
Weakness
* Modest, though improving, scale of operations: With an
estimated turnover of INR24 crore in fiscal 2017 (against INR13.6
crore in fiscal 2016), scale remains small in the competitive
ceramics industry.
* Small networth: Modest equity and low accretion to reserves led
to a subdued networth of INR4.8 crore as on March 31, 2016.
Networth will remain modest over the medium term.
* Large working capital requirement: Gross current assets (GCAs)
were high at 190 days as on March 31, 2016. The GCAs are
estimated to be 180 days for fiscal 2017.
Strengths
* Extensive experience of promoters: The promoters have been in
the ceramics segment for about a decade.
* Favourable location of plant: Unit in Morbi, which is India's
ceramic tiles hub, ensures easy availability of raw material and
labour.
*Adequate debt protection metrics: Interest coverage and net cash
accrual to total debt ratios are estimated at 3.5 times and 0.25
time, respectively, for fiscal 2017.
Outlook: Stable
CRISIL believes Wintouch will continue to benefit over the medium
term from the extensive experience of its promoters. The outlook
may be revised to 'Positive' if higher-than-expected sales lead
to substantial cash accrual, and if working capital cycle
improves. The outlook may be revised to 'Negative' if cash
accrual is significantly low due to reduced order flow or
profitability, or if financial risk profile weakens because of
stretched working capital cycle or larger-than-expected, debt-
funded capital expenditure.
Set up as a partnership firm in April 2014 by Morbi-based Mr.
Arvind Ravji Kakasaniya, Mr. Dharmendra Karamshi Kakasaniya, Mr.
Jaydeep Bhikha Panara, and eight other partners, Wintouch
manufactures wall-glazed tiles.
For fiscal 2016, the firm incurred a loss of INR0.28 crore on
sales of INR13.6 crore.
YOGESH TRADING: Ind-Ra Migrates B Rating to Non-Cooperating
-----------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Yogesh Trading
Company'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 B(ISSUER NOT COOPERATING)' on the agency's website. The
instrument-wise rating action is:
-- INR180 mil. Fund-based working capital limit migrated to
Non-Cooperating Category
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
July 25, 2016. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Established in 2010 in Punjab, Yogesh Trading Company is a
proprietorship unit engaged in the business of rice milling.
=========
J A P A N
=========
TOSHIBA CORP: Warns Western Digital to Stop Impeding Chip Sale
--------------------------------------------------------------
Pavel Alpeyev and Takako Taniguchi at Bloomberg News report that
Toshiba Corp. has told partner Western Digital Corp. to stop
interfering in plans to sell its memory chip business, warning it
may take legal action to prevent the U.S. company from derailing
the sale.
Toshiba sent two letters to Western Digital on May 3, which were
obtained by Bloomberg. One from Toshiba's lawyers asserts the
Japanese company's right to sell its part of the semiconductor
joint venture, despite objections from the U.S. hard-disk maker,
Bloomberg says. The second, sent by Toshiba to Western Digital's
chief legal officer, says the U.S. company failed to ratify a
proposal to formalize their relationship after a merger, and that
Toshiba would bar Western Digital employees from its facilities
and networks unless it complies by May 15, Bloomberg relates.
Bloomberg notes that Western Digital became Toshiba's
manufacturing partner in the flash-memory business when it
acquired SanDisk Corp. for $15.8 billion last year. That unit may
now pass into the hands of a new owner after Toshiba decided to
put it up for sale to shore up its balance sheet following
multibillion-dollar losses in its nuclear business. Toshiba has
narrowed the list of potential buyers to a group that includes
Western Digital rivals, including Taiwan's Hon Hai Precision
Industry Co., South Korea's SK Hynix Inc. and chipmaker Broadcom
Ltd., Bloomberg says.
"If Western Digital continues to interfere with Toshiba's rights
to sell its Affiliate -- rights embodied in the joint venture
agreements that Western Digital itself relied on when it bought
SanDisk -- Toshiba will have no choice but to pursue all
available remedies," the Tokyo-based company, as cited by
Bloomberg, said.
According to Bloomberg, the letters effectively reject an
assertion by Western Digital that Toshiba should negotiate with
the San Jose, California-based company first, and that Toshiba
needs Western Digital's consent to complete the sale. Western
Digital Chief Executive Officer Steve Milligan told Toshiba's
board members in a letter on April 9 that the potential bidders
for the chips unit were unsuitable and the reported prices
offered were above the fair and supportable value of the
business, Bloomberg recalls. The CEO's letter cautioned in
particular against accepting a bid from Broadcom Ltd., which has
led the wave of consolidation in the chip industry over the past
two years.
Bloomberg relates that in the letter from law firm Morrison &
Foerster, Toshiba said it clearly has the right to sell under the
change of control provisions in the joint venture contract. In
fact, Western Digital took advantage of this very provision when
it bought SanDisk's share of the venture, according to the
letter.
Toshiba is aiming to complete the sale of the chips unit by
March 2018 to raise much-needed cash, the report says. The
potential offers, which are non-binding at this point, have come
in at about JPY2 trillion ($17.7 billion), with Hon Hai
indicating its willingness to pay as much as JPY3 trillion,
Bloomberg has reported. While the large size of the deal has made
it necessary for bidders to seek partners to ease the financial
burden, participation by Japanese companies may be key to
regulatory approval.
"Considering the current lineup of bidders, this shouldn't pose a
major risk for the sale process," Bloomberg quotes Kazunori Ito,
an analyst at Morningstar Investment Services, as saying. "From
the point of view of Toshiba's shares, any delay would be a
negative."
Western Digital is in talks with state-backed investment funds
Innovation Network Corp. of Japan and Development Bank of Japan
Inc. about options for a bid, Mr. Long said during an interview
last month, Bloomberg relates. He also suggested his company has
held discussions with Apple Inc. Western Digital may also join a
bid by KKR & Co., INCJ and DBJ, according to people familiar with
the matter.
Bloomberg says Toshiba is in favor of the proposal from KKR and
INCJ because it would simplify regulatory approval and speed up
the delivery of much-needed cash, said the people, asking not to
be identified because the matter is private. KKR and its partners
have indicated they would pay JPY1.8 trillion to JPY2.1 trillion,
one of the people said. Western Digital's CEO plans a trip to
Japan this week to discuss joining the group, another person
said.
About Toshiba
Toshiba Corporation (TYO:6502) -- http://www.toshiba.co.jp/-- is
a Japan-based manufacturer involved in five business segments.
The Digital Products segment offers cellular phones, hard disc
devices, optical disc devices, liquid crystal televisions, camera
systems, digital versatile disc (DVD) players and recorders,
personal computers (PCs) and business phones, among others. The
Electronic Device segment provides general logic integrated
circuits (ICs), optical semiconductors, power devices, large-
scale integrated (LSI) circuits for image information systems and
liquid crystal displays (LCDs), among others. The Social
Infrastructure segment offers various generators, power
distribution systems, water and sewer systems, transportation
systems and station automation systems, among others. The Home
Appliance segment offers refrigerators, drying machines, washing
machines, cooking utensils, cleaners and lighting equipment. The
Others segment leases and sells real estate.
As reported in the Troubled Company Reporter-Asia Pacific on
Dec. 30, 2016, Moody's Japan K.K. downgraded Toshiba
Corporation's corporate family rating (CFR) and senior unsecured
rating to 'Caa1' from 'B3'. Moody's has also downgraded
Toshiba's subordinated debt rating to 'Ca' from 'Caa3', and
affirmed its commercial paper rating of Not Prime. At the same
time, Moody's has placed Toshiba's 'Caa1' CFR and long-term
senior unsecured bond rating, as well as its 'Ca' subordinated
debt rating under review for further downgrade.
The TCR-AP reported on March 21, 2017, that S&P Global Ratings
has lowered its long-term corporate credit rating on Japan-based
capital goods and diversified electronics company Toshiba Corp.
two notches to 'CCC-' from 'CCC+' and lowered the senior
unsecured debt rating three notches to 'CCC-' from 'B-'.
Both ratings remain on CreditWatch with negative implications.
Also, S&P is keeping its 'C' short-term corporate credit and
commercial paper program ratings on the company on CreditWatch
negative. The long- and short-term ratings on Toshiba have
remained on CreditWatch with negative implications since December
2016, when S&P also lowered the long-term ratings because of the
likelihood that the company might recognize massive losses in its
U.S. nuclear power business; S&P kept them on CreditWatch
negative when it lowered the long- and short-term ratings in
January 2017.
====================
N E W Z E A L A N D
====================
ASSET FINANCE: S&P Affirms 'B' ICR; Outlook Remains Stable
----------------------------------------------------------
S&P Global Ratings affirmed its 'B' long-term and 'B' short-term
issuer credit ratings on New Zealand-based Asset Finance Ltd.
(AFL). The outlook remains stable.
"We have affirmed our ratings on AFL reflecting our opinion that
the finance company retains a higher-risk lending profile as a
very small asset-based lender in New Zealand, which typically
translates into a high degree of single-name concentration and
heightened credit losses. As a small, privately-owned finance
company, we believe the business and financial profile of AFL
could change in a short period of time. We expect key indicators
of asset quality to exhibit a high degree of volatility while the
finance company rebalances its portfolio toward consumer lending
and concurrently resolves a handful of relatively large, legacy
exposures, some of which have proven problematic and have
resulted in a reversal in the recent improvement in both arrears
and credit losses. AFL's very strong capitalization--as
reflected in our risk-adjusted capital (RAC) ratio--underpinned
by above-peer average net interest margins, provides somewhat of
an offset to the higher-risk lending profile, as does its good
levels of on-balance sheet liquidity and well-staggered debenture
maturity profile, which moderates the risk of a loss in investor
confidence," S&P said.
S&P believes the long-dated nature of AFL's funding base--close
to 80% of its debentures mature beyond 12 months, and two-thirds
mature beyond two years--provides a good degree of stability
within a 12-month window, comparable to that of higher rated
peers, including Avanti Finance Ltd. (BB/Stable/B) and Australia-
based Liberty Financial Pty Ltd. (BBB/Negative/A-2). As such,
S&P adjusts the stand-alone credit profile (SACP) of AFL higher
by one notch to capture this comparability.
Recent changes at both the senior executive and board levels have
resulted in a modest reduction in the finance company's risk
tolerance, in S&P's opinion. Despite the changes, AFL remains
reliant on a very small management team, exposing the finance
company to key-person risk, which could threaten its business
continuity, although S&P understands both management and
ownership are currently committed to preserving AFL's long-
established market position as a niche finance company.
The stable outlook on AFL reflects S&P's expectation that the
finance company's projected RAC ratio will remain above 15%.
S&P's expectation factors in the capital flexibility available to
the company by way of its dividend payout policies. This capital
headroom should allow AFL to absorb a modest increase in credit
losses without negatively affecting the rating; a scenario that
may eventuate should the company face difficulties exiting some
of its larger single-name concentrations. The stable outlook
also reflects S&P's expectation that AFL's level of on-balance
sheet liquidity and funding maturity will remain broadly
unchanged, and that it is well-positioned to manage its liquidity
over the next 12 months.
S&P would expect to lower its rating on AFL within the next 12
months if the finance company's RAC ratio falls below 15%. In
S&P's opinion, this is most likely to occur if the company takes
on significant credit losses stemming from a small number of its
large single-name concentrations. To this point, S&P believes
the company may not have enough capital buffer to overcome a
material loss stemming from one of its larger exposures without
undermining the rating. A noticeable change in the business and
financial profile of AFL could also result in downward rating
pressures.
S&P believes upward rating prospects are limited in the next 12
months. Longer term, S&P believes a measured reversal of New
Zealand's economic imbalances represents an upward rating
prospect for AFL. A sustained continuation of relatively lower
credit losses, as well as a significant reduction in the finance
company's exposure to single-name concentration, could also
support upward rating prospects, although similarly, S&P believes
this is a longer-term prospect beyond our 12-month outlook
horizon; particularly as it seeks to resolve some long-standing
legacy exposures.
====================
S O U T H K O R E A
====================
WOORI BANK: S&P Assigns 'BB+' Rating to Proposed Tier 1 Notes
-------------------------------------------------------------
S&P Global Ratings said that it has assigned its 'BB+' long-term
issue rating to the proposed U.S. dollar-denominated Basel III
Tier-1 subordinated notes to be issued by Woori Bank (A/Stable/A-
1). The notes will be drawn down from the bank's junior
subordinated tranche under its US$7 billion global medium-term
note program. The rating is subject to our review of the final
issuance documentation.
The subordinated notes are intended as Basel III Tier 1
regulatory capital for Woori, and will be direct, unsecured, and
subordinated to senior creditors' claims. S&P notes the
inclusion of a writedown clause in the event of nonviability. If
the bank is designated an "insolvent financial institution" by
Korean regulators, then the full principal amount will be
permanently written down to zero and the notes will be canceled;
and the payment of principal and interest will be irrevocably
waived.
The 'BB+' issue rating is three notches below Woori's 'bbb+'
stand-alone credit profile (SACP): One notch reflects S&P's
downward assessment for the risk related to subordination, and
the other two notches reflect our downward assessment for the
risk of dividend nonpayment for a Tier 1 instrument.
Additionally, S&P believes its SACP assessment also captures any
incremental risks related to dividend non-payment via legally
available reserves if and when the bank does not meet certain
minimum regulatory capital ratios.
S&P's 'BB+' rating does not reflect the risk of write-down and
waiver of principal and interest payments in the event of
nonviability. S&P believes nonviability would likely be
triggered only if the issuer falls into a negative net-worth
position. S&P also expects, based on the country's track record,
that Woori and other Korean banks would likely receive
extraordinary support from the government in a preemptive manner
and at a relatively early stage should they experience financial
stress; and that such preemptive government support would not
constitute a nonviability event in Korea.
That said, S&P could lower the issue rating by at least one
additional notch if it was to assess that extraordinary support
would not be provided in a preemptive manner, or such preemptive
government support would constitute a nonviability event and
therefore lead to a principal writedown or equity conversion of
the hybrid.
S&P recognizes the full amount of the proposed hybrid issuance in
our capital calculation. The notes should be able to absorb
losses on a going-concern basis; will be recognized as regulatory
Tier-1 capital; and have no coupon step-up features. In line
with Korea's Basel III-aligned capital framework, the notes have
no fixed maturity date and are noncallable for five years after
the issuance date. The dividends of the proposed issue are also
discretionary and noncumulative.
S&P do not expect any immediate impact to Woori's SACP and S&P's
issuer credit rating on the bank following the proposed issuance.
S&P estimates that Woori's risk-adjusted capital ratio before
diversification adjustment will likely stay in the 7.0%-7.5%
range in the coming 18-24 months, slightly over our 7% threshold
level for adequate capitalization.
*********
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, Ivy B. Magdadaro 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 ***