/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/170517.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 17, 2017, Vol. 20, No. 97 Headlines A U S T R A L I A AWT INTERNATIONAL: First Creditors' Meeting Set for May 23 B.C.I. FINANCES: Files for Chapter 15 Amid Tax Avoidance Case CHALLENGER MILLENNIUM: Fitch Affirms B Ratings on Class B Notes CLIFFS NATURAL: Will Take Legal Action Over 'Inaccurate' Comments GUANGDONG RISING: First Creditors' Meeting Set for May 24 GUVERA LTD: Shuts Down Operations; Co-Founder Claes Loberg Leaves INFRASTRUCTURE ELECTRICAL: 2nd Creditors' Meeting Set for May 24 KS SERVICE: First Creditors' Meeting Set for May 23 QUINTIS LIMITED: Moody's Cuts Corporate Family Rating to B3 RETAIL ADVENTURES: Liquidation in Final Stage SAVANNA ENERGY: Reports Q1 Results, Enters Into Amended Waiver SOUTHERN AUSTRALIAN: In Liquidation; Meeting Set for May 19 C H I N A TONGJI HEALTHCARE: Amends Form 10-K to Disclose Accountant Fees I N D I A AKAR CREATIONS: CRISIL Lowers Rating on INR20MM Overdraft to D APHRODITE INFRA: CRISIL Lowers Rating on INR40MM LT Loan to B+ AUTOLINE: CRISIL Reaffirms 'D' Rating on INR3.90MM LT Loan BATANAGAR EDUCATION: CRISIL Reaffirms 'D' Rating on INR13MM Loan BHARAT SCANS: CRISIL Lowers Rating on INR2.75MM LT Loan to 'B' DESAI TEXTILES: CRISIL Reaffirms 'D' Rating on INR4.62MM Loan GANPATI MINETECH: CRISIL Reaffirms B+ Rating on INR6.25MM Loan GARGO MOTORS: CRISIL Reaffirms B+ Rating on INR5MM Loan GAS PROJECTS: CRISIL Lowers Rating on INR3.0MM Cash Loan to 'B' GODHANI GEMS: CRISIL Reaffirms 'D' Rating on INR101.73MM Loan GOYAL ISPAT: CRISIL Assigns 'C' Rating to INR12.5MM Cash Loan GRITTON CERAMICS: CRISIL Lowers Rating on INR8.5MM Loan to 'D' HARIHAR INDUSTRIES: CRISIL Reaffirms B Rating on INR6MM Loan HEMNIL METAL: CRISIL Reaffirms 'D' Rating on INR9.62MM Term Loan JAMNADAS AND CO: CRISIL Lowers Rating on INR14MM Cash Loan to D KEYUR INDUSTRIES: CRISIL Cuts Rating on INR8MM Cash Loan to B+ KUSMASULI MULTIPURPOSE: CRISIL Reaffirms 'B' Loan Ratings MANN RESIDENCY: CRISIL Raises Rating on INR19MM Term Loan to B- MUTHULAXMI SPINNING: CRISIL Cuts Rating on INR6.5MM Loan to 'B' NILESH TIMBERS: CRISIL Lowers Rating on INR8MM Loan to 'B' ORACLE HOME: CRISIL Reaffirms 'D' Rating on INR25.16MM Loan RADHE GIRDHARI: CRISIL Assigns 'B' Rating to INR5.6MM LT Loan RAGHU INFRA: CRISIL Reaffirms 'D' Rating on INR75MM Bank Loan RAJKAMAL TEXTILES: CRISIL Reaffirms B+ Rating on INR8.5MM Loan RAJSHREE SUGARS: CRISIL Reaffirms 'D' Rating on INR411.45MM Loan RAM DEV: CRISIL Reaffirms 'D' Rating on INR189.07MM Cash Loan SNB INFRASTRUCTURE: CRISIL Ups Rating on INR20MM Loan from D SRI VEDHAA: CRISIL Reaffirms 'D' Rating on INR7.5MM LT Loan SSMP INDUSTRIES: CRISIL Reaffirms 'D' Rating on INR10.5MM Loan SUNIL TRADE: CRISIL Reaffirms B+ Rating on INR5.5MM Cash Loan SUPER SHIV: CRISIL Lowers Rating on INR21.25MM Cash Loan to D TRIDENT SUGARS: CRISIL Places 'C' Ratings on Rating Watch Dev. USHA CUBALS: CRISIL Reaffirms 'B-' Rating on INR12MM Cash Loan I N D O N E S I A INDOSAT TBK: Moody's Ups Issuer Rating from Ba1; Outlook Stable MNC INVESTAMA: Moody's Cuts CFR to Caa2 on Refinancing Risk J A P A N SURUGA BANK: Fitch Affirms 'B' Support Rating Floor N E W Z E A L A N D MAD BUTCHER: Franchisee in Papanui Placed in Liquidation PK FURNITURE: Goes Into Receivership P A P U A N E W G U I N E A PAPUA NEW GUINEA: B2 Rating Reflects Pressure on Liquidity S O U T H K O R E A HYUNDAI MERCHANT: Q1 Loss Widens to KRW735B on Lower Freight Rate - - - - - ================= A U S T R A L I A ================= AWT INTERNATIONAL: First Creditors' Meeting Set for May 23 ---------------------------------------------------------- A first meeting of the creditors in the proceedings of AWT International Pty Ltd will be held at Level 7, 175 Eagle Street, in Brisbane, Queensland, on May 23, 2017, at 2:30 p.m. Anthony Norman Connelly and William James Harris of McGrathNicol were appointed as administrators of AWT International on May 15, 2017. B.C.I. FINANCES: Files for Chapter 15 Amid Tax Avoidance Case ------------------------------------------------------------- Alex Wolf, writing for Bankruptcy Law360, reports that BCI Finances PTY Ltd. and three other related companies asked a New York bankruptcy court for Chapter 15 protection, hoping to avoid obstructions in the process of winding down. Liquidator John Sheahan and Ian Russell Lock are asking the bankruptcy court to recognize the companies' wind down proceedings taking place in Australia, where they are seeking more than $120 million in relation to tax avoidance claims against the companies' directors, Law360 relates. About BCI Finances B.C.I. Finances PTY Ltd. is an Australian borrowing and lending entity that operated within a complex group of companies targeted by Australian authorities for 25 years of tax avoidance. B.C.I. Finances Pty Limited (in Liquidation) and three affiliates, Binqld Finances Pty Limited (in Liquidation), E.G.L. Development (Canberra) Pty Limited (in Liquidation), and Ligon 268 Pty Limited (in Liquidation) filed Chapter 15 petitions (Bankr. S.D.N.Y. Lead Case No. 17-11266) on May 9, 2017, to seek recognition of their winding down proceedings in Australia. John Sheahan and Ian Russell Lock, the foreign representatives, signed the Chapter 15 petitions. The Hon. Sean H. Lane presides over the Chapter 15 cases. Robert N. H. Christmas, Esq., and Christopher J. Fong, Esq., at Nixon Peabody LLP, in New York, serve as counsel to the petitioners. CHALLENGER MILLENNIUM: Fitch Affirms B Ratings on Class B Notes --------------------------------------------------------------- Fitch Ratings affirmed 29 classes of notes from nine transactions of the Interstar Millennium Series and Challenger Millennium Series. These transactions are backed by pools of Australian conforming residential mortgages originated through a network of mortgage originators and brokers under the Challenger Millenium Trust and Interstar Millenium Trust Securitisation programmes. KEY RATING DRIVERS The affirmations of the 29 RMBS classes reflect Fitch's view that the available credit enhancement supports the notes' current ratings, the agency's expectations of Australia's economic conditions and that the credit quality and performance of the loans in the collateral pools have remained within the agency's expectations. As of March 31, 2017, the 30+ days arrears for all transactions ranged from 2.01% (2005-3E) to 8.04% (2006-4H); all above the 4Q16 Dinkum Index of 1.09%. All loans in the underlying portfolios have 100% lenders' mortgage insurance (LMI) in place, provided mainly by QBE Lenders' Mortgage Insurance Limited (Insurer Financial Strength Rating: AA-/Stable) and Genworth Financial Mortgage Insurance Pty Limited (Insurer Financial Strength Rating: A+/Stable). Losses have remained within expectations. All losses that were not covered by LMI have been covered by excess spread or the residual unit holders. The ratings of the notes (except class B notes) for the 2007-2L, 2005-2L, 2006-1, 2006-2G, 2006-3L and 2006-4H transactions also reflect the pro rata pay structure throughout the majority of the life of the transactions that leaves notes exposed to tail risk as the transaction gets smaller. Payment priority in these transactions reverts to sequential paydown if there are carryover charge-offs or if 60+ days arrears are greater than 5% of the pool balance. Fitch makes the assumption in all structured finance ratings that no clean-up call options are exercised unless originators are obligated to do so, which is not the case in the Interstar transactions. In recent years Challenger has chosen not to exercise clean-up call options. 2007-1E, 2005-2L, 2005-3E and 2006-2G are exposed to foreign- currency risk in the event that the Euribor, USD Libor or GBP Libor turn negative and the trust has to make additional payments to the currency-swap provider in the relevant foreign currency. Excess spread is likely to be sufficient to cover any payments due by the trust. Since closing, the trust has had a positive excess spread. The Royal Bank of Scotland plc (BBB+/F2/Stable) is the currency- swap provider for the 2005-3E transaction. RBS has been collateralising in accordance with the transaction documents, which reflected Fitch's counterparty criteria at the time of the transaction's closing. Fitch always applies its current criteria in assessing transactions. Fitch has assessed the gap in collateralisation between the two criteria remains significant and the class A and AB notes remain capped at 'Asf' in accordance with the minimum derivative counterparty ratings under Fitch's counterparty criteria. A full assessment of the transactions cash flows was not completed on any of the reviewed transactions because there have been no significant changes to the transaction structures and asset performance is within expectations. The class B notes were affirmed based on the transactions' continued performance, low losses and deleveraging with at least five years of seasoning. LMI providers continue to pay all submitted claims. Fitch does not expect the sponsor to call the transaction as the sponsor has called very few transactions. Default risk is still present, however, a limited safety margin remains. Fitch expects net excess spread to be sufficient to cover principal shortfalls and full repayment of the notes. However, the notes are exposed to deterioration in the economic environment. RATING SENSITIVITIES Credit enhancement levels for the class A and AB notes across the transactions can support many multiples of the arrears levels reported in the latest investor reports. The ratings are not expected to be affected by modest changes in performance. The class B notes may be downgraded if there is a significant deterioration in performance, with losses being above expectations, a significant reduction in the payment of LMI claims or a significant decrease in excess spread. DATA ADEQUACY Fitch has checked the consistency and plausibility of the information it has received about the performance of the asset pools and the transactions. There were no findings that were material to this analysis. Fitch has not reviewed the results of any third party assessment of the asset portfolio as part of its ongoing monitoring. As part of its on-going monitoring, Fitch conducted a file review of a small targeted sample of Challenger Mortgage Management Pty Ltd's origination files and found the information contained in the reviewed files to be adequately consistent with the originator's policies and practices and the other information provided to the agency about the asset portfolio. Overall, Fitch's assessment of the asset pool information relied upon for the agency's rating analysis according to its applicable rating methodologies indicates that it is adequately reliable. VARIATIONS FROM CRITERIA The criteria variation from the "APAC Residential Mortgage Rating Criteria" arises from the potential negative foreign-currency exposure. A full assessment of the cash flows to account for the potential impact of any unhedged residual foreign-exchange (FX) exposure was not completed for 2005-2L, 2005-3E, 2006-2G and 2007-1E. There have been no changes to the FX swap margins, the applicable FX stresses and no significant changes to the transaction structure or asset performance since the cashflow assessment was completed in May 2016. All rated notes passed the relevant stresses and negative interest rates were not a rating driver. There is no rating impact on the transactions as a result of the criteria variation. SOURCES OF INFORMATION The information below was used in the analysis: Loan-by-loan data provided by Advantedge Financial Services Pty Ltd as at March 31, 2017. Transaction reporting data provided by Advantedge Financial Services Pty Ltd as at March 31, 2017. Loan enforcement details provided by Advantedge Financial Services Pty Ltd as at March 31, 2017 The issuer has informed Fitch that not all relevant underlying information used in the analysis of the rated notes is public. The full list of rating actions is shown below (note balances as end-March 2017): Challenger Millennium Series 2007-1E (2007-1E): USD19.3m Class A2a (ISIN XS0280784637) affirmed at 'AAAsf'; Outlook Stable GBP11.9m Class A2b (ISIN XS0280786335) affirmed at 'AAAsf'; Outlook Stable EUR31.0m Class AB (ISIN XS0280787226) affirmed at 'AAAsf'; Outlook Stable EUR32.5m Class B (ISIN XS0280788976) affirmed at 'Bsf'; Outlook Stable Challenger Millennium Series 2007-2L (2007-2L): AUD68.6m Class A (ISIN AU0000CHUHA5) affirmed at 'AAAsf'; Outlook Stable AUD6.4m Class AB (ISIN AU0000CHUHB3) affirmed at 'Asf; Outlook Stable AUD4.9m Class B (ISIN AU0000CHUHC1) affirmed at 'Bsf'; Outlook Stable Interstar Millennium Series 2004-5 Trust (2004-5): AUD15.1m Class AB (ISIN AU300INTA032) affirmed at 'AAAsf'; Outlook Stable AUD11.3m Class B (ISIN AU300INTA040) affirmed at 'Bsf'; Outlook Stable Interstar Millennium Series 2005-2L Trust (2005-2L): USD19.9m Class A1 (ISIN US46071TAA16) affirmed at 'AAAsf'; Outlook Stable AUD39.8m Class A2 (ISIN AU300INTC012) affirmed at 'AAAsf'; Outlook Stable AUD6.3m Class AB (ISIN AU300INTC020) affirmed at 'Asf'; Outlook Stable AUD3.4m Class B (ISIN AU300INTC038) affirmed at 'Bsf'; Outlook Stable Interstar Millennium Series 2005-3E Trust (2005-3E): GBP17.3m Class A2 (ISIN XS0232803709) affirmed at 'Asf'; Outlook Stable AUD37.0m Class AB (ISIN AU300INTD010) affirmed at 'Asf'; Outlook Stable AUD44.5m Class B (ISIN AU300INTD028) affirmed at 'Bsf'; Outlook Stable Interstar Millennium Series 2006-1 Trust (2006-1): AUD51.2m Class A (ISIN AU300INTE018) affirmed at 'AAsf; Outlook Stable AUD1.9m Class AB (ISIN AU300INTE026) affirmed at 'BBBsf; Outlook Stable AUD2.2m Class B (ISIN AU300INTE034) affirmed at 'Bsf'; Outlook Stable Interstar Millennium Series 2006-2G Trust (2006-2G): USD42.2m Class A1 (ISIN USQ49677AA73) affirmed at 'AAsf'; Outlook Stable USD38.7m Class A2 (ISIN USQ49677AB56) affirmed at 'AAsf'; Outlook Stable AUD5.3m Class AB (ISIN AU0000INBHC6) affirmed at 'BBBsf'; Outlook Stable AUD6.2m Class B (ISIN AU0000INBHD4) affirmed at 'Bsf'; Outlook Stable Interstar Millennium Series 2006-3L Trust (2006-3L): AUD119.6m Class A2 (ISIN AU0000INNHB3) affirmed at 'AAAsf'; Outlook Stable AUD9.5m Class AB (ISIN AU0000INNHC1) affirmed at 'Asf'; Outlook Stable AUD7.3m Class B (ISIN AU0000INNHD9) affirmed at 'Bsf'; Outlook Stable Interstar Millennium Series 2006-4H Trust (2006-4H): AUD32.8m Class A2 (ISIN AU3FN0000816) affirmed at 'Asf'; Outlook Stable AUD6.0m Class AB (ISIN AU3FN0000824) affirmed at 'BBsf'; Outlook Stable AUD6.2m Class B (ISIN AU3FN0000832) affirmed at 'Bsf'; Outlook Stable CLIFFS NATURAL: Will Take Legal Action Over 'Inaccurate' Comments ----------------------------------------------------------------- Cliffs Natural Resources Inc. disclosed it has already instructed its outside legal counsel to pursue appropriate legal action against all parties involved in the publication of "inaccurate" and "materially misleading" remarks regarding Lourenco Goncalves' previous share purchases. Cliffs said these comments were intended to manipulate the Company's share price. On May 4, 2017, Barron's Ben Levisohn and Axiom Capital Management's Gordon Johnson reported the open market purchase of 200,000 Cliffs shares made on May 3 by Mr. Goncalves, the Company's chairman, president and CEO. In particular, Cliffs noted, Barron's and Axiom inaccurately reported that Mr. Goncalves' last open market share purchase occurred in March 2015 when, in fact, Mr. Goncalves has made multiple significant open market purchases of Cliffs shares since March 2015, totaling 300,000 shares, including two purchases in May 2015 and one purchase in May 2016. The Company maintained that all of these purchases were reflected in Form 4's filed with the United States Securities and Exchange Commission. "Both Barron's and Axiom would have been well aware of these later trades from publicly available information at the time their comments were made," Cliffs stated in a regulatory filing with the SEC. "Cliffs believes that such materially misleading misstatements are an intentional attempt to manipulate Cliffs' share price to support the "bearish" position Mr. Johnson's firm Axiom has historically taken with respect to Cliffs' stock." About Cliffs Natural Resources Cliffs Natural Resources Inc. -- http://www.cliffsnaturalresources.com/-- is a mining and natural resources company. The Company is a major supplier of iron ore pellets to the U.S. steel industry from its mines and pellet plants located in Michigan and Minnesota. Cliffs also produces low-volatile metallurgical coal in the U.S. from its mines located in West Virginia and Alabama. Additionally, Cliffs operates an iron ore mining complex in Western Australia and owns two non-operating iron ore mines in Eastern Canada. Driven by the core values of social, environmental and capital stewardship, Cliffs' employees endeavor to provide all stakeholders operating and financial transparency. On Jan. 27, 2015, Bloom Lake General Partner Limited and certain of its affiliates, including Cliffs Quebec Iron Mining ULC commenced restructuring proceedings in Montreal, Quebec, under the Companies' Creditors Arrangement Act (Canada). The initial CCAA order will address the Bloom Lake Group's immediate liquidity issues and permit the Bloom Lake Group to preserve and protect its assets for the benefit of all stakeholders while restructuring and sale options are explored. Cliffs Natural reported net income attributable to common shareholders of $174.1 million for the year ended Dec. 31, 2016, compared to a net loss attributable to Cliffs common shareholders of $788 million for the year ended Dec. 31, 2015. As of March 31, 2017, Cliffs Natural had $1.92 billion in total assets, $2.62 billion in total liabilities and a $703 million total deficit. * * * As reported by the TCR on Feb. 14, 2017, Moody's Investors Service upgraded Cliffs Natural Resources' Corporate Family Rating (CFR) and Probability of Default Rating to 'B2' and 'B2- PD' from 'Caa1' and 'Caa1-PD', respectively, and assigned a 'B3' rating to the new senior unsecured guaranteed notes. The upgrade follows the company's announcement of a $500 million senior unsecured guaranteed note issuance and an approximate $590 million equity issuance. In February 2017, S&P Global Ratings said it raised its long-term corporate credit rating on Cliffs to 'B' from 'CCC+' after the company announced a $591 million equity issuance and the tender offer for high-cost debt. The outlook is stable. GUANGDONG RISING: First Creditors' Meeting Set for May 24 --------------------------------------------------------- A first meeting of the creditors in the proceedings of: -- Guangdong Rising (Australia) Pty Ltd, -- Caledon Coal Pty Ltd, -- CC Pty Ltd, -- Blackwater Coal Pty Ltd, and -- Bowen Basin Pastoral Company Pty Ltd will be held at Ballroom 2, Stamford Plaza, Corner Edward and Margaret Streets, in Brisbane, Queensland, on May 24, 2017, at 11:00 a.m. Martin Ford, Grant Sparks and Stephen Longley of PPB Advisory were appointed as administrators of May 12, 2017. GUVERA LTD: Shuts Down Operations; Co-Founder Claes Loberg Leaves ----------------------------------------------------------------- Michael Bailey at The Australian Financial Review reports that Guvera Limited has ceased all operations nearly a year after the ASX rejected the music streaming service's controversial AUD1.3 billion float, with co-founder Claes Loberg stepping down as director and major backer Steve Porch also giving up. AFR relates that in a note on May 12 to the 3,000 shareholders from whom Guvera raised AUD185 million between 2008 and 2016, sole remaining director Darren Herft asked for two volunteers to replace the departees on Guvera's board and help him "rebuild our company". Messrs. Loberg and Porch owned 11.5% and 6.5% of Guvera shares respectively as at the 2016 prospectus. Mr. Herft indicated Mr. Porch's Coterie Nominees had provided further funding over the past 12 months, but that had now ceased. After narrowly escaping an insolvency bid in January from an investor owed AUD1.8 million, Guvera briefly reinvented itself as provider of a tracking tool for advertisers on a white-labelled streaming service in India and Indonesia, according to AFR. AFR relates that the company needed the revenue to meet terms of a deed of company arrangement (DOCA) administered by Deloitte, after it placed subsidiaries Guvera Australia and Guv Services into administration last year, sacking 80 staff. Under the DOCA, Guvera was supposed to pay $180,000 a month to creditors of the subsidiaries, but Mr. Herft admitted that DOCA may now be subject to "further claims," according to the report. Mr. Herft still held out some hope of a capital return to shareholders, saying Guvera Limited held "valuable IP" which could be commercialised or sold, AFR says. The company owns shares in video messaging play Kwickie, of which Mr. Herft is also a director, and Street Talk reported in February that he had approached Guvera shareholders to buy shares in this venture. Mr. Herft claimed Guvera now wanted to sell its Kwickie shares to "re-establish working capital". According to the report, Mr. Herft claimed Guvera Limited was also owed $6 million in refunds for company tax and research and development. In his note, Mr. Herft lamented that the R&D had been registered by AusIndustry last September and the refund was supposed to be payable within 30 days, but accepted that "the Australian Tax Office is following a process it is entitled to". However, the ATO is expected to find an extra $4 billion from 'integrity measures' in 2017-18, and even one of the 'big four' accountants is understood to have written several cheques refunding commission to clients whose R&D claims have been retrospectively rejected. So Mr. Herft could be waiting a while yet, AFR relays. On the downside, Mr. Herft noted two court cases involving Guvera Limited remained outstanding: one against staff from failed acquisition Blinkbox Music, who are claiming entitlements, and a related case against former UK direct Michael de Vere, AFR says. According to the report, Mr. Herft co-owns AMMA Private Equity, who together with its network of accounting firms raised most of Guvera's funding, much of it from self-managed superannuation funds. Mr. Herft said he was "as upset as anyone" about the company's predicament, adds AFR. About Guvera Guvera offered online music and entertainment streaming service. Deloitte Restructuring Services partners Neil Cussen and Enzio Sentatore have been appointed as voluntary administrators of Guvera Australia and Guv Services. According to The Australian, the firm recently pulled out of the Australian market after a failed attempt to list on the ASX, in a float that would have valued the company at more than AUD1 billion. The company -- which lost CEO Darren Herft to co-founder Claes Loberg, who has taken the job on a temporary basis -- has also recently pulled out of several other markets, including the US and Russia, The Australian said. A memo to investors said shutting the Australian market was linked to changes in its product and a "strategic re-evaluation of the business," The Australian added. INFRASTRUCTURE ELECTRICAL: 2nd Creditors' Meeting Set for May 24 ---------------------------------------------------------------- A second meeting of creditors in the proceedings of Infrastructure Electrical Services Pty Ltd has been set for May 24, 2017, at 11:00 a.m. at the offices of Heard Phillips Chartered Accountants, Level 12, 50 Pirie Street, in Adelaide, SA. 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 23, 2017, at 5:00 p.m. Andrew Heard and Anthony Phillips of Heard Phillips were appointed as administrators of Infrastructure Electrical on KS SERVICE: First Creditors' Meeting Set for May 23 --------------------------------------------------- A first meeting of the creditors in the proceedings of AKS Service City Smash Pty Ltd, formerly trading as "AKS SERVICE CITY SMASH" will be held at the boardroom of Chifley Advisory, Suite 3.04, Level 3, 39 Martin Place, in Sydney, NSW, on May 23, 2017, at 3:00 p.m. Gavin Moss and Henry Kwok of Chifley Advisory Pty Ltd were appointed as administrators of KS Service on May 11, 2017. QUINTIS LIMITED: Moody's Cuts Corporate Family Rating to B3 ----------------------------------------------------------- Moody's Investors Service has downgraded Quintis Limited's (formerly known as TFS Corporation Ltd) corporate family rating and senior secured debt rating to B3 from B2, and has placed the ratings on review for downgrade. RATINGS RATIONALE "The rating action and review follows a number of negative announcements by Quintis which could reduce the company's future earnings and cash flow generation, and potentially negatively affect the willingness of wholesale investors to invest in new plantations", says Maurice O'Connell, Vice President, Senior Credit officer. The most recent announcement relates to Quintis' subsidiary, Santalis Pharmaceuticals, which had entered into a 20 year contract to supply East Indian sandalwood oil to pharmaceutical company Galderma, a subsidiary of Nestle. Quintines supplied over 1200 Kg of oil to Galderma during the 2014-15 calendar years. On May 9, 2017, Quintis' board was advised that Santalis' licensing and supply arrangements had terminated with effect from January 1, 2017. Moody's notes that Santalis made no sales to Galderma in FY17 and that the Quintis' guidance for FY17 does not factor in any sales to Galderma. However, the loss of the contract beyond FY17 creates some uncertainty around the sustainability of its future earnings and cash flow generation, as well as the effectiveness of management reporting. News of this development follows a previous announcement in March 2017, that Quintis had ceased shipping to its largest Chinese customer, and that its Managing Director had resigned. Quintis production sandalwood and sandalwood oil is still ramping up as its first plantations reach maturity. In the interim, sales of investments in plantation assets still represent a material, albeit declining, source of revenue for the company. Consequently, should the flow of negative news affect investor sentiment, the impact on revenues and cashflow could be material. Quintis currently has elevated levels of leverage of more than 5.0x adjusted debt/EBITDA for the half year ended December 31, 2016, which further limits the company's ability to manage any unforeseen events. The rating review will focus on company's ability to secure new contracts to maintain its earnings; the ongoing rate of take-up of investments in plantation assets; whether a put option to sell 400 hectares of plantation assets back to the company is exercised; clear direction from new management; and greater clarity on management reporting and corporate governance. What could change the rating - Down Quintis' rating could be downgraded if: [1] the company is unable to execute its strategy of increasing revenue from the sale of oil and heartwood; [2] there are adverse tax rulings affecting its MIS business; [3] or yields and sales from its harvests fall below expectations. Any of the above could reduce expected cash flow generation and ongoing demand for its investment products such that credit metrics fall outside of the range expected for the rating. Credit metrics that Moody's would look for on a continuing basis to maintain the current rating include, FFO-to-Interest remaining above 1.5x and FFO-to-Debt above 10%. Downward pressure could also emerge if Quintis does not maintain adequate liquidity on the balance sheet to mitigate the highly seasonal cash flows. What Could Change the Rating - Up The outlook will return to stable if Quintis is able to demonstrate investor demand substantially in line with previous years and obtains new contracts for its oil and hardwood products to replace lost revenue from the cessation of the Chinese contract as well as maintaining adequate liquidity. The principal methodology used in these ratings was Global Paper and Forest Products Industry published in October 2013. Quintis Limited is one of the world's largest vertically integrated manager and grower of Indian Sandalwood plantations, with over 12,182 hectares of sandalwood trees under management. 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 relates. According to SMH, 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 AUD50 million in preferential payments before the company went into voluntary administration. The annual report reveals almost AUD8.5 million was recovered, SMH discloses. SMH notes that 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, SMH recalls. 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 AUD114 million between 2010 and 2012, Retail Adventures collapsed for the second time. The first creditors' meeting in November 2012 heard Retail Adventures "examined every possible measure to reduce costs without going into administration," SMH recalls. Almost 1,700 unsecured creditors were owed AUD97.6 million excluding landlord and employee claims. SMH relates that in the first year following acquisition the company closed 80 unprofitable stores at a cost of AUD28 million and in the second year closed its distribution centres in NSW and Tasmania. According to SMH, retail wages were found to have been around five per cent above market benchmarks for three years, resulting in variable cost overspends of almost AUD7 million per year. This was identified by senior management, but efforts to reduce wages were unable to take effect in time to stabilise the business. In order to preserve leases on acquisition, creditors heard the company agreed to uncommercial leases at above market rents, costing more than AUD7 million a year, SMH relays. In July 2014, Ms Cameron told Fairfax Media she was relieved that her five-year foray into the struggling discount variety sector had come to an end, according to SMH. "I'm relieved that I can stop worrying and trying desperately to make the company work," the report quotes Ms. Cameron as saying. "I don't feel bitter (but) disappointed for all the staff. Some of them are finding jobs, but it will be very difficult for others." The liquidator said in the annual report that payment of a final dividend is expected to be made in December, adds SMH. SAVANNA ENERGY: Reports Q1 Results, Enters Into Amended Waiver -------------------------------------------------------------- Savanna Energy Services Corp. reported financial results for the first quarter of 2017. First Quarter Results Savanna (SVY) generated revenue of $117.3 million, EBITDAS of $10.8 million and a net loss, attributable to shareholders of the Company, of $19.8 million or $0.17 per share in the first quarter of 2017, compared to revenue of $93.7 million, EBITDAS of $20.3 million and a net loss, attributable to shareholders of the Company, of $10.1 million or $0.11 per share in Q1 2016. Improving industry sentiment in late 2016 and into 2017, resulted in increased activity levels throughout Savanna's business lines in Canada and drilling activity in the U.S. The increased activity in Canada resulted in revenue and operating margin increases in Canadian drilling, well servicing and rentals compared to Q1 2016, despite lower year-over-year pricing. However, lower utilization and operating margins in Savanna's Australian divisions, combined with the effect of 2016 contract rollovers and negative operating margins realized in the Company's U.S. drilling division, resulted in lower overall operating margin and EBITDAS in Q1 2017 compared to Q1 2016. Savanna's negative operating margins in U.S. drilling resulted from increased operating costs associated with reestablishing a more significant operation in the Permian basin. In Canada, revenues increased by $25.8 million and operating margin increased by $2.5 million relative to Q1 2016. In the U.S., compared to Q1 2016, revenues increased by $4 million while operating margin declined by $8.7 million. In Australia, revenues were $6.2 million lower and operating margin was $3.8 million lower compared to Q1 2016. Savanna's overall operating margin in Q1 2017 was $10 million lower relative to Q1 2016, and operating margin percentages were 15 percentage points lower. General and administrative expenses declined from $7.8 million in Q1 2016 to $7.3 million in Q1 2017. As a result, EBITDAS was $9.5 million lower than in Q1 2016. Long-reach drilling, shallow drilling, well servicing and rentals in Canada all experienced increases in utilization and activity, which resulted in higher revenue and operating margins compared to Q1 2016, despite year-over-year pricing decreases. Billable days in long-reach drilling increased by 123% relative to Q1 2016, while average day rates were 11% lower. The shallow drilling fleet achieved a 51% increase in billable days with average day rates 16% lower relative to Q1 2016. Activity in well servicing increased by 47%, while pricing remained relatively flat compared to Q1 2016, after increasing from Q4 2016 levels to cover higher labour costs. Other than labour costs in Canadian well servicing, per day/hour rig costs and field office costs were relatively in-line with Q1 2016, in each of Savanna's Canadian operating divisions. Overall in Canada during Q1 2017, Savanna generated $11.5 million in operating margin on $63.8 million of revenue, compared to $9 million in operating margin on $38 million of revenue in Q1 2016. Sequentially, operating margins increased compared to the $4.6 million generated on $41.8 million of revenue in Canada in Q4 2016 as a result of a seasonal increase in activity levels. In the U.S., increases in drilling activity were driven by a larger number of drilling rigs working in the quarter, which resulted in increased revenue in Q1 2017, relative to Q1 2016, despite a 31% decrease in average day rates. The decrease in day rates in the U.S. were based on 2016 contract roll overs on two of Savanna's three Velox triple drilling rigs with Q1 2017 rates approximately $10,000 U.S. dollars per day lower than in Q1 2016, and changes in rig mix, as seven rigs were upgraded and reactivated in the Permian basin in the second half of 2016. A delay in the commencement of work under the two new Marcellus contracts, as well as crew retention, rig move, and repairs and maintenance costs associated with those two rigs and the rigs recently reactivated in West Texas, combined with an increase in field office costs and operational challenges in the region in Q1 2017, resulted in negative operating margins in Savanna's U.S. drilling division in the quarter. In Savanna's U.S. well servicing division, both utilization and pricing decreased in Q1 2017, relative to Q1 2016, which resulted in decreases in revenue and operating margin. Overall in the U.S., Savanna generated negative $1.9 million in operating margin on $21 million of revenue in Q1 2017, compared to $0.1 million in operating margin on $22.3 million of revenue in Q4 2016 and $6.8 million in operating margin on $17 million of revenue in Q1 2016. Negative operating margins have been realized in the Company's West Texas operation in the last two quarters and management is focused on improving results in the region. Savanna's strategic decision to reactivate drilling rigs in the Permian basin is expected to yield positive results as this market continues to improve and efforts to improve the efficiency of operations take effect. In Australia, Savanna's drilling, well servicing and trucking divisions experienced activity and revenue declines relative to Q1 2016. The decreases were driven by fewer rigs under contract and a decrease in trucking activity related to lower well servicing and drilling activity. Operating margin percentages also decreased in the quarter based on a greater proportion of operating versus stand-by activity in Q1 2017 relative to Q1 2016. Savanna generated $8.4 million in operating margin on $32.5 million of revenue in Australia in Q1 2017, compared to $12.3 million in operating margin on $38.7 million of revenue in Q1 2016. Sequentially, operating margin decreased from the $13.2 million generated on $40.1 million of revenue in Australia in Q4 2016. The decrease in operating margin sequentially was a result of decreases in drilling, well servicing and trucking activity in the quarter. Overall for the quarter, lower utilization and operating margins in Savanna's Australian divisions and U.S. well servicing division, combined with the negative operating margins realized in the Company's U.S. drilling division, resulted in a 47% decrease in EBITDAS, compared to Q1 2016. Additionally in Q1 2017, Savanna incurred $8.8 million of expenses with respect to Total Energy Services Inc.'s ("Total") take-over bid and Savanna's strategic review process undertaken in response thereto. The expenses incurred include financial and advisory costs, severance and other change of control costs, as well as legal and other professional fees. The acquisition by Total of more than 50% of the outstanding common shares of Savanna also triggered accelerated vesting provisions with respect to all of Savanna's share-based rewards, which resulted in a $2.2 million increase in share-based compensation expense. The decrease in EBITDAS, combined with the take-over bid related costs and increase in share-based compensation expense, resulted in a $9.5 million, or 94%, increase in the Company's net loss, compared to Q1 2016. Sequentially, Savanna's overall EBITDAS decreased from the $12.2 million generated in Q4 2016, in part due to increases in general and administrative expenses. Compared to Q4 2016 general and administrative expenses increased in Q1 2017, as a result of salary and wage roll back reversals, a reduction in the amount of salaries and wages capitalized toward Savanna's enterprise resource planning system upgrades, fees related to the audit of the Company's annual financial statements, and bad debt expenses. Savanna's net loss attributable to the shareholders of the Company increased from the Q4 2016 net loss attributable to the shareholders of the Company of $18.9 million, or $0.20 per share. The sequential increase in net loss was primarily a result of lower EBITDAS and the take-over bid and strategic review expenses outlined above, partially offset by an increase in deferred income tax recoveries due to a $4.3 million write-down against deferred tax assets in Q4 2016. Balance Sheet Savanna's working capital(1) at March 31, 2017, was $61.8 million, which included $25.4 million in cash. Savanna's total long-term debt outstanding on March 31, 2017, excluding unamortized debt issue costs, was $281.7 million, compared to $249.7 million outstanding at December 31, 2016. The March 31, 2017 total long-term debt amount included $4.2 million in gross partnership debt, of which Savanna's proportionate share is approximately 50%. Savanna's total debt position at March 31, 2017, net of cash, was $256.2 million compared to $235.1 million at December 31, 2016. Savanna's total debt, net of cash increased from the end of the year based on working capital requirements in the first quarter. The acquisition by Total of more than 50% of the outstanding common shares of Savanna was an event of default under Savanna's syndicated credit facility, second lien senior secured term loan, and mortgage. After evaluating its options and consulting with Total, Savanna determined to issue a change of control offer to repurchase the outstanding principal of senior unsecured notes at a price of 101% of the principal amount thereof. A holder of $60 million aggregate principal amount of senior unsecured notes agreed that it will not tender to the change of control offer, which expires on June 22, 2017. As a result of the defaults and change of control offer, all of the amounts under the syndicated credit facility, second lien senior secured term loan, and mortgage, and $47.1 million of the senior unsecured notes have been classified as a current liability on the Company's balance sheet at March 31, 2017. Savanna has engaged with Total who currently owns approximately 86% of the outstanding common shares of Savanna, and expects that any refinancing required with respect to its syndicated credit facility, second lien senior secured term loan, mortgage, and/or senior unsecured notes will be available to Savanna on a timely basis. On April 21, 2017, Savanna entered into a temporary waiver agreement with the lenders of its syndicated credit facility. In May 2017, Savanna also received a waiver in respect of its mortgage. On May 12, 2017, Savanna entered into an amended and restated temporary waiver agreement (the "Waiver") with the lenders of its syndicated credit facility. Pursuant to the Waiver, such lenders have: (a) acknowledged certain defaults under the syndicated credit facility that have occurred as a result of the acquisition by Total of more than 50% of the outstanding common shares of Savanna and the previously announced demand for payment pursuant to Savanna's second lien credit facility; and (b) waived such defaults until the earliest to occur of: (i) 2 business days immediately preceding the date of any repayment or redemption of Savanna's senior unsecured notes, (ii) the occurrence of any other default or event of default under the syndicated credit facility or other credit document, (iii) 2 business days immediately following the date upon which Savanna becomes a wholly owned subsidiary of Total, and (iv) June 30, 2017. Outlook The positive oil and natural gas industry sentiment entering 2017, contributed to significant improvement in North American industry activity in Q1 2017. In Canada, activity levels increased significantly in Q1 2017 relative to Q1 2016, however meaningful price increases did not materialize. Based on current stated customer intentions, Savanna expects activity to continue improving for the remainder of 2017 relative to 2016. With continued increases in activity, Savanna expects pricing will begin to improve gradually into the second half of 2017 in Canada. In the U.S., Savanna currently has two AC double drilling rigs and one Velox AC triple drilling rig under contract throughout 2017 and most of 2018 in the Marcellus. Rates, particularly with respect to Savanna's Velox AC triple drilling rigs, are beginning to show signs of upward momentum. In Q2 2017, Savanna signed a two-year contract on its Velox AC triple drilling rig in West Texas with a day rate over 30% higher compared to the lows reached in 2016. Savanna's third Velox triple drilling rig, not under long-term contract, is currently working at rates 15% higher than the lows reached in 2016. With respect to the drilling rigs reactivated in the Permian basis in the second half of 2016, Savanna expects operating margins on these rigs to begin improving later in the quarter and through the remainder of 2017, relative to the negative margins realized over the last two quarters. Additional drilling rig reactivations in the Permian basin, will be deferred until profitability in the region improves. In Australia, Savanna expects to have a new contract with an existing customer finalized in Q2 2017. The terms of the new contract have been agreed to outside of the formal tender process, which will cover one drilling rig, five service rigs and two flush-by units. All of these rigs are currently working for the same customer under various contacts. The drilling rig will start working under the new contract once finalized, while the seven original new-build contracts still in place in Australia will move onto the new contract as the original ones expire throughout the second half of 2017. The Company also has two other service rigs and one drilling rig on contract with a second customer and expects a third drilling rig to begin work with a third customer later in Q2 2017. Savanna believes its built-for- purpose drilling and service rigs, as well as its operational and safety performance, puts the Company in a strong competitive position to re-contract all of its drilling and service rigs in Australia. On April 5, 2017 the Board of Directors of Savanna was reconstituted and Daniel Halyk was appointed President and CEO of Savanna. Following this reconstitution, Savanna began the process of engagement with Total to formulate a business integration plan. Such plan will be premised on the primary objective of improving the financial performance of the combined entity by achieving revenue synergies and realizing operational and administrative efficiencies and cost savings. Execution of such plan will be completed as soon as reasonable practicable following completion of the acquisition of Savanna by Total, which is expected to occur prior to June 30, 2017. FIRST QUARTER RESULTS Overall contract drilling revenue increased relative to Q1 2016 as a result of higher activity levels in Canada and the U.S., notwithstanding lower day rates. Savanna increased market share in Canada in Q1 2017, despite having only one drilling rig on a long-term contract, and the higher activity levels resulted in revenue and operating margin increases relative to Q1 2016. In Canadian long-reach drilling, billable days increased by 123% while day rates were 11% lower compared to Q1 2016, and in shallow drilling in Canada, billable days increased by 51% while day rates were 16% lower. Competitive pressures in Canada, combined with pricing of Q1 work in the fall 2016, held day rates relatively low in the quarter which was the primary driver for the decrease operating margin percentages in Canada relative to Q1 2016. Billable days in the U.S. increased 108%, based on more rigs working, relative to Q1 2016, while average day rates were 31% lower. The decrease in day rates in the U.S. were based on 2016 contract roll overs on two of Savanna's three Velox triple drilling rigs with Q1 2017 rates approximately $10,000 U.S. dollars per day lower than in Q1 2016, and changes in rig mix, as seven rigs were upgraded and reactivated in the Permian basin in the second half of 2016. A delay in the commencement of work under the two new Marcellus contracts, as well as crew retention, rig move, and repairs and maintenance costs associated with those two rigs and the rigs recently reactivated in West Texas, combined with an increase in field office costs and operational challenges in the region in Q1 2017, resulted in negative operating margins in the U.S. in the quarter. In Australia, revenue decreased compared to Q1 2016 based on a 35% decrease in billable days. There were also additional costs related to mobilizing one of the drilling rigs for work with a new customer that commenced late in Q1 2017. The decrease in billable days combined with the mobilization costs resulted in a decrease in operating margin and operating margin percentages in Australia drilling in Q1 2017, compared to Q1 2016. FIRST QUARTER RESULTS Revenue for Savanna's oilfield services division in Q1 2017 increased relative to Q1 2016, as increases in activity in Canada more than offset decreases in activity in the U.S. and Australia in the respective periods. In Canada, revenue and operating margin in Q1 2017 increased relative to Q1 2016 based on a 47% increase in operating hours in Canadian well servicing and a 22% increase in Canadian rental revenue. In U.S. well servicing, revenue and operating margin decreased relative to Q1 2016 based on a 12% decrease in activity and pricing. The revenue decreases in Australia in Q1 2017 compared to Q1 2016 were based on a 22% decrease in billable hours in Australia well servicing and a decrease in trucking activity. The decrease in billable hours, as a result of having one less service rig and one less flush-by unit on contract, were partially offset by higher rates, which were based on a greater proportion of operating hours versus stand-by hours in Q1 2017 relative to Q1 2016. The decrease in billable hours did negatively affect Australian operating margin in Q1 2017 as per hour operating margins were relatively flat compared to Q1 2016. About Savanna Savanna is a contract drilling and oilfield services company operating in North America and Australia providing a broad range of drilling, well servicing and related services with a focus on fit for purpose technologies and industry-leading Aboriginal relationships. SOUTHERN AUSTRALIAN: In Liquidation; Meeting Set for May 19 ----------------------------------------------------------- Timothy Clifton and Mark Hall of Ferrier Hodgson were appointed as Joint and Several Liquidators of Southern Australian Seafoods Pty Ltd on May 5, 2017. A meeting of creditors will be held at 10:30 a.m. on May 19, 2017 at Clifton Hall, Level 3, 431 King William Street, in Adelaide. ========= C H I N A ========= TONGJI HEALTHCARE: Amends Form 10-K to Disclose Accountant Fees --------------------------------------------------------------- Tongji Healthcare Group Inc. filed an amendment No. 1 on Form 10-K/A to amend its annual report on Form 10-K for the fiscal year ended Dec. 31, 2016, as originally filed with the Securities and Exchange Commission on April 18, 2017, as it had inadvertently excluded information about its principal accounting fees and services for fiscal year 2016. The Company was billed by its current independent public accounting firms Anton & Chia, LLP, for the following professional services they performed for the Company during the years ended Dec. 31, 2016, and 2015: Year Ended December 31 2016 2015 ---------- ---------- Audit fees $41,000 $38,700 Audit-related fees $21,738 $16,500 Tax fees $- $- All other fees $62,738 $55,200 A full-text copy of the Form 10-K/A is available for free at: https://is.gd/MmIqdV About Tongji Healthcare Based in Nanning, Guangxi, the People's Republic of China, Tongji Healthcare Group, Inc., a Nevada corporation, operates Nanning Tongji Hospital, a general hospital with 105 licensed beds. Tongji Healthcare reported a net loss of $3.64 million on $1.93 million of total operating revenue for the year ended Dec. 31, 2016, compared to a net loss of $588,557 on $2.35 million of total operating revenue for the year ended Dec. 31, 2015. As of Dec. 31, 2016, Tonji had $8.36 million in total assets, $14.52 million in total liabilities and a total stockholders' deficit of $6.16 million. Anton & Chia, LLP, in Newport Beach, California, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2016. Anton & Chia, LLP, in Newport Beach, California, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2016, citing that the Company has negative working capital of $6,745,663, an accumulated deficit of $7,206,416, and shareholders' deficit of $6,162,728 as of Dec. 31, 2016. The Company's ability to continue as a going concern ultimately is dependent on the management's ability to obtain equity or debt financing, attain further operating efficiencies, and achieve profitable operations. Tongji Healthcare reported a net loss of $3.64 million on $1.93 million of total operating revenue for the year ended Dec. 31, 2016, compared to a net loss of $588,557 on $2.35 million of total operating revenue for the year ended Dec. 31, 2015. As of Dec. 31, 2016, Tonji had $8.36 million in total assets, $14.52 million in total liabilities and a total stockholders' deficit of $6.16 million. Anton & Chia, LLP, in Newport Beach, California, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2016. Anton & Chia, LLP, in Newport Beach, California, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2016, citing that the Company has negative working capital of $6,745,663, an accumulated deficit of $7,206,416, and shareholders' deficit of $6,162,728 as of Dec. 31, 2016. The Company's ability to continue as a going concern ultimately is dependent on the management's ability to obtain equity or debt financing, attain further operating efficiencies, and achieve profitable operations. ========= I N D I A ========= AKAR CREATIONS: CRISIL Lowers Rating on INR20MM Overdraft to D -------------------------------------------------------------- CRISIL Ratings has downgraded its rating on the long-term bank facilities of Akar Creations Private Limited (ACPL) to 'CRISIL D' from 'CRISIL BB-/Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Drop Line Overdraft 25 CRISIL D (Downgraded Facility from 'CRISIL BB-/Stable') Loan Against 3.5 CRISIL D (Downgraded Property from 'CRISIL BB-/Stable') Mortgage Loan 10.0 CRISIL D (Downgraded Facility from 'CRISIL BB-/Stable') Overdraft 20.0 CRISIL D (Downgraded from 'CRISIL BB-/Stable') Proposed Long Term 4.2 CRISIL D (Downgraded from Bank Loan Facility 'CRISIL BB-/Stable') Term Loan 2.3 CRISIL D (Downgraded from 'CRISIL BB-/Stable') The downgrade reflects excess drawing in the working capital facilities for more than 30 days continuously and delays in meeting interest obligation on the facilities due to weak liquidity. Downturn in the residential real estate market in Goa because of weak consumer sentiment post demonetization, led to lower-than-expected bookings for the company's project, leading to inadequate cash flows. Key Rating Drivers & Detailed Description Weaknesses * Delays in debt servicing due to weak bookings ACPL has delayed meeting its debt obligation following muted bookings for its residential real estate projects. The peak season for Goa residential real estate market is the second half of a fiscal, which was lean in fiscal 2017 because of weak consumer sentiment post demonetization. The resultant lower than expected customer advances led to stretched liquidity and delays in timely servicing debt obligations. * Susceptibility to cyclicality inherent in the real estate sector Exposure to risks and cyclicality inherent in the real estate sector may result in volatility in both saleability and realisations, and hence, cash flow. The residential real estate sector has been under pressure due to weak demand and bearish consumer sentiment over the past few years, increasing leverage and refinancing needs of players. Demonetisation has further affected demand in the near term. The current weak business environment will continue to constrain the outlook for the real estate sector in the near term. The impact on sales will remain a key rating sensitivity factor. Strength * Promoters extensive experience in the real estate market The promoters' extensive experience in developing real estate projects in Goa and Mumbai market. Their work has resulted in establishing a name in these regions and has helped the company build relationships with customers. ACPL, incorporated in 1993 by the Borkar family, develops real estate projects in Goa and Mumbai. The company's key promoters are Mr. Avinash Borkar and Mr. Chinmai Borkar. APHRODITE INFRA: CRISIL Lowers Rating on INR40MM LT Loan to B+ -------------------------------------------------------------- CRISIL Ratings has been consistently following up with Aphrodite Infra Private Limited (AIPL) for obtaining information through letters and emails dated November 30, 2016 and January 17, 2017 among others, apart from telephonic communication. However, the issuer has remained non cooperative. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Long Term Loan 40 CRISIL B+ (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 Aphrodite Infra 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 Aphrodite Infra 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'. AIPL is promoted by the Patel and Ramani families, based in Surat. The company is currently developing 69 residential apartments in Vesu, Surat, at a total project cost of around INR1.07 billion, to be funded through bank debt of around INR400 million, promoters' contribution of INR495.1 million; the rest will be funded through customer advances. AUTOLINE: CRISIL Reaffirms 'D' Rating on INR3.90MM LT Loan ---------------------------------------------------------- CRISIL Ratings has been consistently following up with Autoline for obtaining information through letters and emails dated January 27, 2017, and February 24, 2017, among others, apart from telephonic communication. However, the issuer has remained non cooperative. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 3 CRISIL D (Issuer Not Cooperating; Rating Reaffirmed) Long Term Loan 3.9 CRISIL D (Issuer Not Cooperating; Rating Reaffirmed) Proposed Long Term 2.09 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 Autoline. 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 Autoline 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. Autoline, promoted by the Desphande, Vyas, and Kulkarni families, was established in 1996 in Kolhapur (Maharashtra). The firm manufactures auto components and components for diesel pumps. BATANAGAR EDUCATION: CRISIL Reaffirms 'D' Rating on INR13MM Loan ---------------------------------------------------------------- CRISIL Ratings has been consistently following up with Batanagar Education and Research Trust (BERT) for obtaining information through letters and emails dated January 27, 2017, and February 28, 2017, among others, apart from telephonic communication. However, the issuer has remained non cooperative. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Term Loan 13 CRISIL D (Issuer Not Co-operating; 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 Batanagar Education and Research Trust. 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 Batanagar Education and Research Trust 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. BERT was registered in February 2007 as a public, non-profit, charitable trust. It has set up an engineering college, Batanagar Institute of Engineering Management and Science, at Maheshtala in Kolkata. BHARAT SCANS: CRISIL Lowers Rating on INR2.75MM LT Loan to 'B' -------------------------------------------------------------- CRISIL Ratings has been consistently following up with Bharat Scans Private Limited (BSPL) for obtaining information through letters and emails dated January 20, 2017 and February 19, 2017 among others, apart from telephonic communication. However, the issuer has remained non cooperative. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit .47 CRISIL B (Issuer Not Cooperating; Downgraded from 'CRISIL BB/Stable') Long Term Loan 2.75 CRISIL B (Issuer Not Cooperating; Downgraded from 'CRISIL BB/Stable') Overdraft 4.00 CRISIL A4 (Issuer Not Cooperating; Downgraded from 'CRISIL A4+') Proposed Working 1.31 CRISIL B (Issuer Not Capital Facility Cooperating; Downgraded from 'CRISIL BB/Stable') Working Capital .97 CRISIL B (Issuer Not Facility Cooperating; Downgraded from 'CRISIL BB/Stable') Working Capital .50 CRISIL B (Issuer Not Term Loan 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 Bharat Scans 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 Bharat Scans 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. Set up in 1995, BSPL operates six diagnostic centres in Tamil Nadu. It is promoted by Dr. Rajamani Emmanuel Gunaseelan and Dr. Beula Emmanuel. DESAI TEXTILES: CRISIL Reaffirms 'D' Rating on INR4.62MM Loan ------------------------------------------------------------- CRISIL Ratings has been consistently following up with Desai Textiles (DT) for obtaining information through letters and emails dated January 27, 2017, and February 24, 2017, among others, apart from telephonic communication. However, the issuer has remained non cooperative. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 3 CRISIL D (Issuer Not Cooperating; Rating Reaffirmed) Proposed Long Term .88 CRISIL D (Issuer Not Bank Loan Facility Cooperating; Rating Reaffirmed) Term Loan 4.62 CRISIL D (Issuer Not Cooperating; Rating Reaffirmed) 'The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of Desai Textiles. 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 Desai Textiles 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. Set up in 1991, DT is a partnership firm based in Surat (Gujarat), promoted by Mr. Pankajbhai Arvindlal Desai and Mr. Chetankumar Arvindlal Desai. The firm manufactures and markets yarn and grey fabric and undertakes sizing of beam. GANPATI MINETECH: CRISIL Reaffirms B+ Rating on INR6.25MM Loan -------------------------------------------------------------- CRISIL Ratings has been seeking information and a discussion with the management of Ganpati Minetech Private Limited since October 2016. Despite several emails and calls, the company has not submitted any information. CRISIL had, through a senior director letter dated April 12, 2017, informed the company of the extant guidelines and requested for cooperation. The issuer, however, remains non-cooperative. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 0.25 CRISIL A4 (Issuer Not Cooperating; Removed from 'Notice of withdrawal'; Rating Reaffirmed) Cash Credit 1.00 CRISIL B+/Stable (Issuer Not Cooperating; Removed from 'Notice of withdrawal'; Rating Reaffirmed) Proposed Long Term 6.25 CRISIL B+ (Issuer Not Bank Loan Facility Cooperating; Removed from 'Notice of withdrawal'; 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 CRISIL has reaffirmed its 'CRISIL B+/Stable/CRISIL A4' ratings on the bank facilities of GMPL and removed it from 'Notice of Withdrawal', in line with its revised policy regarding withdrawal of ratings. Inadequate information and lack of management cooperation restrict CRISIL from taking a forward looking view on the credit quality of the company. GMPL scores low ('L') on availability of past information. It scores low ('L') on future information due to unavailability of management's public stated stance on expectations, strategic decisions, and capital expenditure (capex). It also scores low ('L') on the stability attributes listed in CRISIL's criteria for surveillance of ratings of non- cooperative issuers. The available information is consistent with a 'CRISIL B' category rating. Outlook: Stable CRISIL believes GMPL will continue to benefit from its promoter's extensive experience in the spare parts trading business, and will maintain its comfortable capital structure. The outlook may be revised to 'Positive' if substantial growth in revenue and profitability, or improved working capital management, leads to better liquidity. The outlook may be revised to 'Negative' if lower-than-expected cash accrual, stretched working capital cycle, or large, debt-funded capital expenditure weakens the financial risk profile, especially liquidity. GMPL was incorporated in 2004. The company is a distributor of Sandvik Asia Ltd's spare parts for earthmoving, mining, and construction equipment in Jharkhand. It is also a dealer for ESAB India Ltd and undertakes some civil construction work for government and private entities. Mr. Pravin Kumar Agarwal, Mr. Chandra Sekhar Agarwal, Mr. Ajay Sharma, and Ms Preeti Agarwal are the company's directors. Operations are, however, primarily managed by Mr. Pravin Kumar Agarwal. Profit after tax (PAT) was INR21 lakhs on revenue of INR13.27 crore in fiscal 2015. GARGO MOTORS: CRISIL Reaffirms B+ Rating on INR5MM Loan ------------------------------------------------------- CRISIL Ratings has reaffirmed its 'CRISIL B+/Stable' rating on the long-term bank facilities of Gargo Motors Limited (GML). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 3 CRISIL B+/Stable (Reaffirmed) Channel Financing 5 CRISIL B+/Stable (Reaffirmed) Proposed Long Term Bank Loan Facility 2 CRISIL B+/Stable (Reaffirmed) The rating continues to reflect a modest scale of operations in an intensely competitive industry and a below average financial risk profile because of small networth and subdued debt protection metrics. These weaknesses are mitigated by the extensive experience of its promoters and an established relationship with the principal, Tata Motors Ltd (TML). Key Rating Drivers & Detailed Description Weakness * Modest scale of operations and exposure to intense competition Operating income has been modest and was at INR32.42 crore in fiscal 2016 against INR42.20 crore in fiscal 2015. Further GML faces intense competition from other dealers of TML as well as from dealers of other passenger vehicle manufacturers. The revenues are likely to remain modest over the medium term which shall continue to constrain the business profile. * Below average financial risk profile GML's financial risk profile is constrained by its small networth which was at INR4.94 crore as on March 31, 2016, and is expected to remain small over the medium term because of muted accretion to reserves. High gearing at 1.76 times and subdued profitability have resulted in weak interest coverage (1.25 times for fiscal 2016). Strengths * Promoter's extensive experience and established relationship with the principal, TML The promoters have been involved in automobile dealership business for over a decade, and have established cordial relations with TML. A group entity, Gargo Motors (rated 'CRISIL B+/Stable'), has also been dealing in commercial vehicles of TML for the past 16 years. Outlook: Stable CRISIL believes GML will continue to benefit over the medium term from the extensive experience of its promoter and diverse customer base.The outlook may be revised to 'Positive' if significant cash accrual or large equity infusion improves the capital structure alongwith the northward movement in the topline while maintaining consistencies in the working capital operations . The outlook may be revised to 'Negative' with the increase in pressure on topline and profitability or large, debt funded capital expenditure weakens the financial risk profile and stretch in working capital creates challenges with the normal operations of the business. Incorporated in 1996, GML is a closely held public-limited entity promoted by Mr. Kamakhya Borthakur; it commenced operations in 2006. The company is an authorised dealer for passenger cars of TML in Assam. Mr. Borthakur has also promoted Gargo Motors, which is an authorised dealer of TML's commercial vehicles. GML has five showrooms in Assam: at Tinsukia, Duliajan, Jorhat, Sibsagar, and Dibrugarh. It also has stockyards and workshops at Guwahati, Tinsukia, Dibrugarh, and Duliajan. Profit after tax was INR0.20 crore on net sales of INR32.42 crore in fiscal 2016, against INR0.24 crore and INR42.20 crore, respectively, in fiscal 2015. GAS PROJECTS: CRISIL Lowers Rating on INR3.0MM Cash Loan to 'B' --------------------------------------------------------------- CRISIL Ratings has been consistently following up with Gas Projects India Private Limited (GPIPL) for obtaining information through letters and emails dated November 21, 2016 and December 22, 2016 among others, apart from telephonic communication. However, the issuer has remained non cooperative. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 5.75 CRISIL A4 (Issuer Not Cooperating; Rating Reaffirmed) Cash Credit 3.00 CRISIL B (Issuer Not Cooperating; Downgraded from 'CRISIL B+/Stable') Proposed Long Term 0.25 CRISIL B (Issuer Not Bank Loan Facility 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 Gas Projects 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 Gas Projects 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 long term rating to 'CRISIL B/Stable' and reaffirmed the short term rating at CRISIL A4. Incorporated in 2001, GPIPL manufactures storage and distribution systems for compressed gases and fuels such as liquefied petroleum gas (LPG) bobtail and road tankers, vaporisers, and reticulated gas systems, and provides turnkey-based services for the same. The company is promoted by Mr. Sachin Parikh and its manufacturing facilities are located in Navi Mumbai (Maharashtra). GODHANI GEMS: CRISIL Reaffirms 'D' Rating on INR101.73MM Loan ------------------------------------------------------------- CRISIL Ratings has been consistently following up with Godhani Gems Private Limited (GGPL) for obtaining information through letters and emails dated February 6, 2017 and February 22, 2017 among others, apart from telephonic communication. However, the issuer has remained non cooperative. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Export Packing 43.69 CRISIL D (Issuer Not Credit Cooperating; Rating Reaffirmed) Post Shipment 101.73 CRISIL D (Issuer Not Credit Cooperating; Rating Reaffirmed) Proposed Long 58.58 CRISIL D (Issuer Not Term Bank Loan Cooperating; Rating Facility Reaffirmed) Proposed Short 3.00 CRISIL D (Issuer Not Term Bank Loan Cooperating; Rating Facility Reaffirmed) Standby Line of 6.00 CRISIL D (Issuer Not Credit 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 Godhani Gems 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 Godhani Gems 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. GGPL, set up in 1995 as a partnership firm by Mr. Ramesh V Godhani, Mr. Vinod V Godhani, and their family members, was reconstituted as a private limited company in 2011. The company cuts and polishes diamonds. GOYAL ISPAT: CRISIL Assigns 'C' Rating to INR12.5MM Cash Loan ------------------------------------------------------------- CRISIL Ratings has revoked the suspension of its ratings on the bank facilities of Goyal Ispat Limited (GIL) and has assigned its 'CRISIL C/CRISIL A4' ratings to its bank facilities. CRISIL had suspended the ratings on September 7, 2016, as GIL had not provided the necessary information required for a rating review. The company has now shared the requisite information, enabling CRISIL to assign ratings to its bank facilities. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 12.5 CRISIL C (Assigned; Suspension Revoked) Letter of Credit 5.0 CRISIL A4 (Assigned; Suspension Revoked) The rating reflects instances of overdrawn working capital limits followed by stretch in receivable cycle. These weaknesses are partly offset by promoter's extensive industry experience. Key Rating Drivers & Detailed Description Weaknesses: * Large working capital requirement: GIL has large working capital requirement with gross current assets of 213 days as on March 31, 2016, driven by stretch in receivables to over 150 days. Consequently, cash credit limit was also overdrawn over the six months through February 2017. * Exposure to volatility in steel prices: Slump in steel prices and low capacity utilisation led to operational losses in fiscal 2016, affecting the business and financial risk profiles. Strengths: *Promoter's experience: Promoters industry experience of more than 30 years is expected to support the business risk profile of the company over the medium term. GIL was set up in 1992 by Mr. G D Goyal. In September 2000, it was purchased by Mr. G L Kothari and Mr. Kewal Chand Kothari. GIL has a thermo-mechanically treated bar manufacturing facility in Chennai. GIL reported net loss of INR4.36 crore on operating income of INR64.54 crore in fiscal 2016 against net loss of INR0.28 crore on operating income of INR49.56 crore in fiscal 2015. GRITTON CERAMICS: CRISIL Lowers Rating on INR8.5MM Loan to 'D' -------------------------------------------------------------- CRISIL Ratings has consistently followed up with Gritton Ceramics Private Limited (GCPL) for obtaining information, through letters and emails (dated October 4, 2016; January 24, 2017; February 13, 2017; and February 21, 2017, among others), apart from telephonic communication. However, the issuer has remained non cooperative. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 1.5 CRISIL D (Downgraded from 'CRISIL A4') Cash Credit 8.5 CRISIL D (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 CRISIL has downgraded its ratings on the bank facilities of GCPL to 'CRISIL D/CRISIL D' from 'CRISIL B+/Stable/CRISIL A4' because of continued irregularity in working capital limit beyond 30 days because of weak liquidity. Despite repeated attempts to engage with the company's management, CRISIL failed to receive information on either the financial performance or strategic intent of GCPL. This restricts CRISIL's ability to take a forward looking view on the credit quality of the entity. As GCPL's management has not been cooperative, the rating action is based on best available information. CRISIL has obtained information, from sources it believes to be reliable, that GCPL's liquidity is under pressure and the company has not been regular in servicing its debt. The company has a weak financial risk profile and constrained business risk profile. However, it benefits from its promoters' experience in the ceramic tiles industry. Incorporated in 2014, GCPL is promoted by Ahmedabad, Gujarat- based Mr. Ashok Garg, Mr. Pervinderkumar Mechu, and Mr. Rameshbhai Patel. The company manufactures ceramic wall tiles. HARIHAR INDUSTRIES: CRISIL Reaffirms B Rating on INR6MM Loan ------------------------------------------------------------ CRISIL Ratings has been consistently following up with Harihar Industries - Kadi (HI) 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 ---------- --------- ------- Cash Credit 6 CRISIL B/Stable (Issuer Not Cooperating; Rating Reaffirmed) Proposed Long Term 2 CRISIL B/Stable (Issuer Bank Loan Facility Not 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 Harihar Industries - Kadi. 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 Harihar Industries - Kadi 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 2014, HI is a Gujarat-based partnership firm promoted by Mr. Pushkarbhai Patel and his family members. The firm is engaged in cotton ginning and pressing operations, and started its commercial operations from June 2015. HEMNIL METAL: CRISIL Reaffirms 'D' Rating on INR9.62MM Term Loan ---------------------------------------------------------------- CRISIL Ratings has been consistently following up with Hemnil Metal Processors Private Limited (HMPPL) for obtaining information through letters and emails dated January 27, 2017, and February 22, 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) Term Loan 9.62 CRISIL D (Issuer Not Cooperating; Rating Reaffirmed) 'The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of Hemnil Metal Processors 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 Hemnil Metal Processors 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. Incorporated in 1996, HMPPL cuts coils or sheets in sizes as specified by customers, mainly from the automobile industry. Operations are managed by key promoter, Mr. Hemant Mehta. JAMNADAS AND CO: CRISIL Lowers Rating on INR14MM Cash Loan to D --------------------------------------------------------------- CRISIL Ratings has downgraded its rating on the long-term bank facility of Jamnadas and Company (JNC) to 'CRISIL D' from 'CRISIL B/Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 14 CRISIL D (Downgraded from 'CRISIL B/Stable') The downgrade reflects excess drawing of the working capital for over 30 continuous days and delays in interest repayment, due to weak liquidity. This is due to stretch in working capital. Key Rating Drivers & Detailed Description Weaknesses * Delays in debt servicing due to weak sales: The firm delayed in meeting debt repayment obligation following stretch in working capital. * Weak financial risk profile: Highly leveraged capital structure with gearing estimated above 8 times as on March 31, 2016 and muted debt protection metrics with interest coverage ratio estimated at 1.1 time in fiscal 2016 has resulted in weak financial risk profile. Strength * Experience of partners: Benefits derived from the partners' family presence for six decades in steel products trading industry and established relationships with customers and suppliers; should continue to support the business risk profile. Set up in 1969 in Nagpur as a partnership firm by Mr. Jamnadas Udeshi and his family, JNC trades in structural steel products such as mild steel angles, beams, channels, flat, and round and square bars. For fiscal 2016, JNC provisionally reported profit after tax (PAT) of INR0.29 crore on operating income of INR79.86 crore as against PAT of INR0.38 crore on operating income of INR83.41 crore in fiscal 2015. KEYUR INDUSTRIES: CRISIL Cuts Rating on INR8MM Cash Loan to B+ -------------------------------------------------------------- CRISIL Ratings has been consistently following up with Keyur Industries (KI) for obtaining information through letters and emails dated November 30, 2016 and January 17, 2017 among others, apart from telephonic communication. However, the issuer has remained non cooperative. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bill Purchase- 2 CRISIL A4 (Issuer Not Discounting Cooperating; Downgraded Facility from 'CRISIL A4+') Cash Credit 8 CRISIL B+ (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 keyur 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 keyur industriesis 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/ CRISILA4'. Established in 1974, KI commenced operations as a small-scale manufacturer and exporter of psyllium seed (popularly known as Isabgol), psyllium husk, and psyllium husk powder. The firm is promoted by Mr. Girdharlal Patel and is currently managed by Mr. Manubhai Girdharlal Patel and family members. Its production facilities are in Sidhpur in the Mehsana district of Gujarat. KUSMASULI MULTIPURPOSE: CRISIL Reaffirms 'B' Loan Ratings --------------------------------------------------------- CRISIL Ratings has reaffirmed its ratings on the bank facilities of Kusmasuli Multipurpose Cold Storage Private Limited (KMCSPL) at 'CRISIL B/Stable/CRISIL A4'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 0.13 CRISIL A4 (Reaffirmed) Cash Credit 5.29 CRISIL B/Stable (Reaffirmed) Proposed Long Term Bank Loan Facility 1.38 CRISIL B/Stable (Reaffirmed) Term Loan 2.13 CRISIL B/Stable (Reaffirmed) Working Capital Facility .45 CRISIL B/Stable (Reaffirmed) The ratings continue to reflect weak financial risk profile and exposure to risks relating to unfavorable regulations and intense competition in the cold storage industry in West Bengal (WB). These weaknesses are partially offset by the promoters' extensive experience. Key Rating Drivers & Detailed Description Weaknesses * Exposure to highly regulated and intensely competitive nature of cold storage industry: The potato cold storage industry in WB is regulated by the West Bengal Cold Storage Association, with rental rates are fixed by Department of Agricultural Marketing, WB. The fixed rental will continue to limit players' ability to earn profits based on their respective strengths and geographical advantages. Pressure to offer discounts to ensure healthy utilisation of storage capacity, especially given the intense competition, will also constrain profitability. * Weak financial risk profile: Networth remains modest (Rs 22.4 million as on March 31, 2017), despite marginal improvement in recent years on account of accretion to reserve. Gearing was high at 3.30 times on account of loans extended to farmers, especially around end of fiscal. Debt protection metrics are likely to remain moderate: interest coverage and net cash accrual to total debt ratios were 2.07 times and 0.09 time in fiscal 2017. Strengths * Promoters extensive experience: Benefits from the promoters' experience of over 25 years, and strong relationships with potato farmers should continue to support business risk profile. They continue to help maintain healthy utilisation of storage capacity (90% on average in fiscal 2017). Outlook: Stable CRISIL believes KMCSPL will continue to benefit over the medium term from the promoters' extensive experience in the cold storage business. The outlook may be revised to 'Positive' if the company efficiently manages farmer credit financing, significantly scales up operations, and improves profitability. Conversely, the outlook may be revised to 'Negative' in case of pressure on liquidity because of delays in repayment by farmers, low cash accrual, or large debt-funded capital expenditure. KMCSPL, incorporated by Mr. Nandalal Ghosh and Mr. Bibekananda Sannigrahi in 2011, operates a cold storage unit for potatoes, with capacity of 16,000 tonne, in Paschim Medinipur, West Bengal. The company occasionally trades in potatoes to ensure optimum capacity utilisation of the cold storage unit. It also finances farmers' potato storage, which is refinanced by banks. The company has recorded profit after tax (PAT) of INR0.09 crore on net sales of INR2.38 crore in 2015-16 as against PAT of INR0.10 crore on net sales of INR2.72 crore in 2014-15. MANN RESIDENCY: CRISIL Raises Rating on INR19MM Term Loan to B- --------------------------------------------------------------- CRISIL Ratings has upgraded the rating on the bank facilities of Mann Residency Private Limited (MRPL) to 'CRISIL B-/Stable' from 'CRISIL C'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Term Loan 19 CRISIL B-/Stable (Upgraded from 'CRISIL C') The rating upgrade is driven by MRPL's improved liquidity driven by timely repayment of debt obligation and expected improvement in cash accrual, backed by improved scale of operations resulting in healthy cash accruals along with continued support from promoters in the form of unsecured loans. The overall liquidity is expected to improve further with improving scale of operations and healthy accruals, expected to cover the debt repayment obligations over the medium term. CRISIL's ratings on the bank facilities of MRPL continue to reflect its moderate financial risk profile because of negative networth owing to losses incurred in previous years which is expected to become positive due to generation of profits and small scale of operations in the hospitality industry. The company has limited track record (about six years) of managing a hotel. However, MRPL benefits from its favorable location. Key Rating Drivers & Detailed Description Weakness * Weak financial risk profile: Networth is negative due to losses incurred in the past. * Limited experience of promoters: The promoters do not have experience in running a hotel. They have also not collaborated with any experienced player in the industry. Strengths * Improving liquidity: The company is repaying its due installments of term loans on time and has no working capital limit. * Strong funding support: The promoters are likely to continue extending unsecured loans to support liquidity. Outlook: Stable CRISIL believes MRPL's business risk profile will improve over the medium term with the expected increase in operating income, thus supporting liquidity. The outlook may be revised to 'Positive' in case of significant rise in operating income and profitability. Conversely, the outlook may be revised to 'Negative' if large debt-funded capital expenditure or decline in operating income or profitability weakens liquidity. MRPL, incorporated in 2007 and promoted by Mr. Joginder Singh Mann and his family, operates a four-star hotel, Hotel Clarence, in Gurugram, Haryana. The hotel became operational in October 2011. Profit after tax was INR1.66 crore on net sales of INR11.65 crore in fiscal 2016, against a profit after tax of INR1.81 crore on net sales of INR14.95 crore in fiscal 2015. MUTHULAXMI SPINNING: CRISIL Cuts Rating on INR6.5MM Loan to 'B' --------------------------------------------------------------- CRISIL Ratings has been consistently following up with Muthulaxmi Spinning Mills Private Limited (MSMPL) 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 6.5 CRISIL B/Stable (Issuer Not Cooperating; Downgraded from 'CRISIL B+/Stable') Letter of Credit 2.0 CRISIL A4 (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 Muthulaxmi Spinning Mills 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 Muthulaxmi Spinning Mills 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 1996 by Mr. Shanmugavel, MSMPL manufactures cotton yarn of 20s to 40s counts. NILESH TIMBERS: CRISIL Lowers Rating on INR8MM Loan to 'B' ---------------------------------------------------------- CRISIL Ratings has been consistently following up with Nilesh Timbers (NT) 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; Downgraded from 'CRISIL B+/Stable') Foreign Letter 8 CRISIL B/Stable (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 Nilesh Timbers. 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 Nilesh Timbers 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. Nilesh Timbers, located in Shecottah, Tamil Nadu, is involved in the trading of timber majorly in Tamil Nadu and Karnataka. NT is promoted and managed by Mr.Nilesh Patel and his family members. ORACLE HOME: CRISIL Reaffirms 'D' Rating on INR25.16MM Loan ----------------------------------------------------------- CRISIL Ratings has been consistently following up with Oracle Home Textile Limited (Oracle) for obtaining information through letters and emails dated January 27, 2017, and February 24, 2017, among others, apart from telephonic communication. However, the issuer has remained non cooperative. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bill Purchase- 3.75 CRISIL D (Issuer Not Discounting Cooperating; Rating Facility Reaffirmed) Cash Credit 2.00 CRISIL D (Issuer Not Cooperating; Rating Reaffirmed) Letter of Credit 4.00 CRISIL D (Issuer Not Cooperating; Rating Reaffirmed) Packing Credit 22.45 CRISIL D (Issuer Not Cooperating; Rating Reaffirmed) Post Shipment Credit 7.10 CRISIL D (Issuer Not Cooperating; Rating Reaffirmed) Standby Export 6.70 CRISIL D (Issuer Not Packing Credit Cooperating; Rating Reaffirmed) Term Loan 25.16 CRISIL D (Issuer Not Cooperating; Rating Reaffirmed) 'The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of Oracle Home Textile 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 Oracle Home Textile 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. Oracle was originally set up in 1992 by Mr. Sanjay Dave and Ms. Shilpa Dave as a partnership firm, Oracle Exports; this firm was reconstituted as a closely held public limited company under the current name in August 2011. The company exports 75 per cent of its output of terry towels and home textiles to makers of leading global brands such as Esprit, Hollister, Kmart, and Tommy Hilfiger; the balance 25 per cent is sold in the domestic market. Oracle has a diverse customer base across different geographies, including the US, Europe, Australia, the Middle East, and Africa. The company is among the leading manufacturers of terry towels in the jacquard segment in India. It has vertically integrated operations, comprising weaving, yarn and fabric dyeing, and finishing facilities. RADHE GIRDHARI: CRISIL Assigns 'B' Rating to INR5.6MM LT Loan ------------------------------------------------------------- CRISIL Ratings has assigned its 'CRISIL B/Stable' rating to the long-term bank facilities of Radhe Girdhari Cold Storage Private Limited (RG). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Term Loan 1.8 CRISIL B/Stable Cash Credit 0.3 CRISIL B/Stable Long Term Loan 5.6 CRISIL B/Stable The rating reflects RG's nascent stage of operations and exposure to delays in payments by farmers because of adverse market conditions. These rating weaknesses are partially offset by the benefits that the company derives from its promoters' extensive experience in the agro industry and its established relationships with its customers. Key Rating Drivers & Detailed Description Weakness * Vulnerability to delays in payments by farmers because of adverse market conditions: The cold storage obtains loans from banks on behalf of the farmers and traders, and extends loans and advances to farmers and traders. However, the primary responsibility to repay the bank loan lies with cold storages. In the event of adverse market trends and the company's presence in an agriculture-based seasonal business renders it vulnerable to such downturns. Strengths * Track record and extensive experience of promoters: RG's promoters have extensive experience in the agro industry for over a decade. The day to day operations are managed by Mr. Randhir Kesari. Outlook: Stable CRISIL believes that RG will continue to benefit over the medium term from its promoters' extensive experience and its established relationship with its customers. The outlook may be revised to 'Positive' in case the company reports efficient management of farmer credit financing, along with significant ramp up in its scale of operations and profitability. Conversely, the outlook may be revised to 'Negative' in case RG reports pressure on its liquidity because of delays in repayments by the farmers, lower- than-expected cash accruals, or undertakes an additional debt- funded capital expenditure programme. Incorporated in 2017, Radhe Giridhari Cold Storage Private Limited (RG) operates a cold storage unit for storing potatoes, with a capacity of 6,000 MT, in the Khagaria district of Bihar. The company also, at times, undertakes trading in potatoes to ensure optimum capacity utilisation of its cold storage unit. It also provides funding to the farmers against the potatoes stored, which is in turn re-financed by the banks. The company was started by Mr. Randhir Kesari. RAGHU INFRA: CRISIL Reaffirms 'D' Rating on INR75MM Bank Loan ------------------------------------------------------------- CRISIL Ratings has been consistently following up with Raghu Infra Private Limited (RIPL) for obtaining information through letter dated April 5, 2017, among others, apart from telephonic communication. However, the issuer has remained non-cooperative. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 75 CRISIL D (Issuer Not Cooperating; Removed from 'Notice of withdrawal'; Rating Reaffirmed) Cash Credit 40 CRISIL D (Issuer Not Cooperating; Removed from 'Notice of withdrawal'; 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 CRISIL has reaffirmed its ratings on the bank facilities of RIPL at 'CRISIL D/CRISIL D' and has removed the ratings from 'Notice of Withdrawal',in line with the CRISIL's withdrawal policy. The ratings continue to reflect the delays in debt servicing by RIPL due to its weak liquidity. RIPL is exposed to intense competition in the fragmented civil construction industry. However, the company benefits from its promoters' extensive industry experience. Key Rating Drivers & Detailed Description Weakness *Susceptibility to risks related to fragmentation and intense competition in civil construction industry As almost all the sales of the company were tender based, and the revenue was dependent on its ability to bid successfully for tenders. The margins came under pressure because of the competitive pricing nature of the industry. Strengths * Promoters' extensive industry experience RIPL was initially set up as a family-held partnership concern with full management control and decision-making vested with the managing director, Mr. K Shiva Rao. Mr. Rao is assisted by a team of professionals. Set up in 1980, RIPL undertakes civil construction projects, especially works related to irrigation and roads. The Bengaluru- based company is promoted by Mr. K Shiva Rao and his family members. RAJKAMAL TEXTILES: CRISIL Reaffirms B+ Rating on INR8.5MM Loan -------------------------------------------------------------- CRISIL Ratings has reaffirmed its ratings on the bank facilities of Rajkamal Textiles (Rajkamal) at 'CRISIL B+/Stable/CRISIL A4'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee .65 CRISIL A4 (Reaffirmed) Cash Credit 8.50 CRISIL B+/Stable (Reaffirmed) Proposed Long Term Bank Loan Facility 1.44 CRISIL B+/Stable (Reaffirmed) Long Term Loan 0.50 CRISIL B+/Stable (Reaffirmed) The ratings continue to reflect Rajkamal's moderate scale of operations and, vulnerability of operating margin to raw material price fluctuations and, moderate financial risk profile marked by moderate gearing and below average debt protection metrics. These rating weaknesses are partially offset by the benefits the company derives from the extensive experience of its promoter in the grey melange yarn industry and established relationship with customers. Key Rating Drivers & Detailed Description Weaknesses * Susceptibility to volatility in raw material prices: Cost of cotton constitutes about 75 per cent of the firm's total cost of production. Any drastic volatility in raw material prices will effect company's performance over the medium term. * Moderate scale of operations in highly fragmented grey melange yarn industry: The scale of operation remain moderate with expected revenue of around INR 37.6 crore in fiscal 2017. The operations remain exposed to intense competition in the fragmented grey melange yarn industry. * Modest Financial Risk profile: Rajkamal has below-average financial risk profile marked by small networth and moderate gearing of INR5.8 crore and 1.76 times, respectively, as on March 31, 2016. Its debt protection metrics are also average with interest coverage of 1.63 times for fiscal 2016. Financial risk profile will continue to remain below-average over the medium term with moderately high reliance on working capital debt and modest operating profitability. Strengths * Established track record: Promoter's presence of over two decades in grey melange yarn business. This enabled a healthy growth in revenue. An established relationship with major suppliers and customers further strengthens the market position. Outlook: Stable CRISIL believes that Rajkamal will continue to benefit over the medium term from the extensive industry experience of its promoter. The outlook may be revised to 'Positive' if the firm scales up its operations and generates more-than-expected cash accruals on a sustained basis, resulting in an improvement in its financial risk profile. Conversely, the outlook may be revised to 'Negative' if Rajkamal's capacities are under-utilized, resulting in low cash flows, if the operating margin declines, or if it undertakes a large debt-funded capital expenditure programme, leading to deterioration in its financial risk profile. Set up in 2002 by Mr. C Rajendran and Mrs. C Nanjammal, Rajkamal manufactures grey melange yarn with counts ranging from 20s to 40s. It is based in Coimbatore in Tamil Nadu. For 2015-16, Rajkamal has registered a profit after tax (PAT) of INR10 lakh on net sale of INR37.59 crore, as against a PAT of INR9.7 Lakh on net sale of INR35.40 crore for 2014-15. RAJSHREE SUGARS: CRISIL Reaffirms 'D' Rating on INR411.45MM Loan ---------------------------------------------------------------- CRISIL Ratings has reaffirmed its rating on the long-term bank facilities of Rajshree Sugars and Chemicals Limited (RSCL) at 'CRISIL D'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Proposed Long Term Bank Loan Facility 169.89 CRISIL D (Reaffirmed) Rupee Term Loan 411.45 CRISIL D (Reaffirmed) Working Capital Term Loan 62.66 CRISIL D (Reaffirmed) CRISIL's ratings continue to reflect instances of delay by RSCL in servicing its term debt obligations. The ratings also factors RSCL's weak financial risk profile, marked by high gearing and below average debt protection metrics, and the company's susceptibility to regulatory risks in the sugar industry. However, these rating weaknesses are partially offset by the promoters' extensive industry experience and availability of diverse revenue streams. CRISIL while assigning the rating on bank facilities of RSCL, had earlier combined the business and financial risk profiles of RSCL with its wholly-owned subsidiary Trident Sugars Ltd (TSL). CRISIL now considered the standalone business and financial risk profiles of RSCL for rating its bank facilities following the announcement by RSCL's management confirming divestment of its entire stake in TSL. Key Rating Drivers & Detailed Description Weakness * Weak financial risk profile: The Company's financial risk profile continue to be weak marked by high gearing and subdued debt protection metrics. Substantial losses incurred in the past and sizeable debt has resulted in leveraged capital structure. Debt protection metrics, albeit improving, remains subdued marked by interest coverage of 1.4 times for the nine months period December 2016. Strengths * Established regional presence and diverse revenue streams: RSCL has established presence in sugar industry as reflected from its healthy scale of operations in the range of INR 585 to 854 crore over the 3 years ended fiscal 2016. The company has integrated operations with bagasse-based cogeneration plant of 57-MW and distillery capacity of 125 kilo litres per day. Revenue contribution from power and rectified spirits was around 23 per cent of revenues in 2015-16. CRISIL believes that established presence and diverse revenue streams will benefit RSCL over the medium term. Based in Coimbatore (Tamil Nadu), RSCL was incorporated in 1986 and is a fully integrated sugar manufacturer with distillery and cogeneration capabilities. The company's operations are managed by chairman-cum-managing director, Ms. Rajshree Pathy. For the three quarters ended December 2016, on a provisional basis, RSCL reported net profit of INR2.1 crores on income from operations of INR490 crores. The company reported net losses of INR14.3 crore on income from operations of INR570 crores for fiscal 2016. RAM DEV: CRISIL Reaffirms 'D' Rating on INR189.07MM Cash Loan ------------------------------------------------------------- CRISIL Ratings has been consistently following up with Ram Dev International Limited (RDIL) for obtaining information through letters and emails dated January 27, 2017, and February 22, 2017, among others, apart from telephonic communication. However, the issuer has remained non cooperative. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 189.07 CRISIL D (Issuer Not Cooperating; Reaffirmed) Export Packing 174.93 CRISIL D (Issuer Not Credit Cooperating; Reaffirmed) Foreign Exchange 6.35 CRISIL D (Issuer Not Forward Cooperating; Reaffirmed) Standby Line of 10.00 CRISIL D (Issuer Not Credit Cooperating; Reaffirmed) Term Loan 15.39 CRISIL D (Issuer Not Cooperating; 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 Ram Dev International 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 Ram Dev International 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. RDIL was set up in 1999 by Mr. Naresh Singla and Mr. Suresh Singla. The company mills and processes basmati rice, which it sells in India and abroad. It has processing plants in Daha and Hemda, near Karnal, Haryana. SNB INFRASTRUCTURE: CRISIL Ups Rating on INR20MM Loan from D ------------------------------------------------------------ CRISIL Ratings has upgraded its rating on the bank facilities of SNB Infrastructure Private Limited to 'CRISIL B-/Stable/CRISIL A4' from 'CRISIL D/CRISIL D' and has placed its ratings on 'Notice of Withdrawal' for 90 days on working capital limit, and withdrawing the rating on Proposed bank loan facility on SNB's request and receipt of no-due certificate (NOC) from banker. The ratings will be withdrawn at the end of the notice period. The rating action is in line with CRISIL's policy on withdrawal of its ratings on bank loans. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 20 CRISIL A4 (Upgraded from 'CRISIL D'; Placed on 'Notice of Withdrawal') Cash Credit 14 CRISIL B-/Stable (Upgraded from 'CRISIL D'; Placed on 'Notice of Withdrawal') Proposed Long Term Bank Loan Facility 16 CRISIL B-/Stable (Withdrawal) The upgrade reflects the regularization of its working capital limit over the past six months ended March 2017. The rating continues to reflect SNB's large working capital requirement and weak financial risk profile primarily liquidity. These rating weaknesses are partially offset by its promoter's extensive experience of more than three decades in the construction business. Key Rating Drivers & Detailed Description Weaknesses * Large working capital requirement SNB's operations are working capital intensive indicated by Gross current assets of about 264 days as on March 2016. * Weak financial risk profile The financial risk profile is expected to remain weak particularly its liquidity. Strengths * Extensive experience of promoters The promoter is in construction business of more than three decades. Outlook: Stable CRISIL believes that SNB will continue to benefit from promoter's extensive experience in the construction industry. The outlook may be revised to 'Positive' if the company successfully scales up its operations, while maintaining its profitability, or in case of improvement in its working capital cycle. Conversely, the outlook may be revised to 'Negative' in case of significant increase in SNB's debt, which could lead to further deterioration in its debt protection measures, or if there are any significant delay in realization of receivables. SNB was originally set up in 1977 as a partnership firm named Shyam Narayan & Brothers, and was reconstituted as a private limited company with the current name with effect from October 1, 2009. The Company, based in Mumbai, is managed by Mr. Ram Narayan Upadhyay and other Directors. SNB undertakes infrastructure- related construction activities and earthwork projects for government and private-sector entities. In fiscal 2016, profit after tax (PAT) was INR0.84 crore (INR3.62 crore loss in fiscal 2015) and operating income was INR74.39 crore (INR76.66 crore). SRI VEDHAA: CRISIL Reaffirms 'D' Rating on INR7.5MM LT Loan ----------------------------------------------------------- CRISIL Ratings has been consistently following up with Sri Vedhaa Creations Private Limited (VCPL) for obtaining information through letters and emails dated January 24, 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 7.5 CRISIL D (Issuer Not Cooperating; Rating Reaffirmed) 'The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of Sri Vedhaa Creations 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 Sri Vedhaa Creations 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. Incorporated in 2003 by Mr. G Ravichandran, VCPL undertakes real estate development in Tamil Nadu. Prior to 2003, Mr. Ravichandran developed plots in and around Puducherry under a proprietorship concern, the business of which was taken over by VCPL during 2003. SSMP INDUSTRIES: CRISIL Reaffirms 'D' Rating on INR10.5MM Loan -------------------------------------------------------------- CRISIL Ratings has been consistently following up with SSMP Industries Limited (SSMP) for obtaining information through letters and emails dated January 24, 2017, and February 14, 2017, among others, apart from telephonic communication. However, the issuer has remained non cooperative. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 2 CRISIL D (Issuer Not Cooperating; Rating Reaffirmed) Packing Credit 10.5 CRISIL D (Issuer Not Cooperating; Rating Reaffirmed) 'The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of SSMP Industries 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 SSMP Industries 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. Incorporated in 2007 in New Delhi, SSMP is a closely held public- limited company. SSMP processes fruit pulp, largely mango pulp. The company generates majority of its revenue via export of pulp, under the brand Garden Fresh, to the Middle East countries. SUNIL TRADE: CRISIL Reaffirms B+ Rating on INR5.5MM Cash Loan ------------------------------------------------------------- CRISIL Ratings has been seeking information and a discussion with the management of Sunil Trade Links (STL) since October 2016. Despite several emails and calls, the firm has not submitted any information. CRISIL had, through a senior director letter dated April 12, 2017, informed the firm of the extant guidelines and requested for cooperation. The issuer, however, remains non- cooperative. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 4.25 CRISIL A4 (Issuer Not Cooperating; Removed from 'Notice of withdrawal'; Rating Reaffirmed) Cash Credit 5.50 CRISIL B+/Stable (Issuer Not Cooperating; Removed from 'Notice of withdrawal'; Rating Reaffirmed) Proposed Long Term 1.50 CRISIL B+/Stable (Issuer Not Bank Loan Facility Cooperating; Removed from 'Notice of withdrawal'; Rating Reaffirmed) Proposed Short Term 0.75 CRISIL A4 (Issuer Not Bank Loan Facility Cooperating; Removed from 'Notice of withdrawal'; 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 CRISIL has reaffirmed its 'CRISIL B+/Stable/CRISIL A4' ratings on the bank facilities of STL and removed them from 'Notice of Withdrawal', in line with its revised policy on withdrawal of ratings. Inadequate information and lack of management cooperation restrict CRISIL from taking a forward looking view on the credit quality of the firm. STL scores low ('L') on availability of past information. It scores low ('L') on future information due to unavailability of management's public stated stance on expectations, strategic decisions, and capital expenditure (capex). It also scores low ('L') on the stability attributes listed in CRISIL's criteria for surveillance of ratings of non- cooperative issuers. The available information is consistent with a 'CRISIL B' category rating, leading to reaffirmation of the ratings. Outlook: Stable CRISIL believes STL will benefit over the medium term from its promoters' experience and established distribution network. The outlook may be revised to 'Positive' if significant and sustainable increase in revenue and profitability leads to higher cash accrual and improved capital structure. The outlook may be revised to 'Negative' if financial risk profile, especially liquidity, weakens because of low cash accrual or large working capital requirement. STL, incorporated in 2014 and based in Patna, is promoted by Mr. Kanhaiya Mehrotra and Ms Roli Mehrotra. The firm is an authorised distributor of mobile handsets and smartphones of Karbonn and TATA salt in Bihar. The firm began commercial operations in November 2013. Profit after tax (PAT) was INR50 lakhs on revenue of INR87.46 crore in fiscal 2015. SUPER SHIV: CRISIL Lowers Rating on INR21.25MM Cash Loan to D ------------------------------------------------------------- CRISIL Ratings has been consistently following up with Super Shiv Shakti Chemicals Private Limited (SSCPL) for obtaining information through letters and emails (dated February 8, 2017,March 22,2017,April 20, 2017 and April 24, 2017, among others), apart from telephonic communication. However, the issuer has remained non cooperative. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 21.25 CRISIL D (Issuer Not Cooperating; Downgraded from 'CRISIL BB-/Stable') Term Loan 12.75 CRISIL D (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 CRISIL has downgraded its ratings on the bank facilities of SSCPL to 'CRISIL D' from 'CRISIL BB-/Stable' due to delay in term debt obligations. Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of SSCPL. This restricts CRISIL's ability to take a forward looking view on the credit quality of the entity. As SSCPL's management has not been cooperative, the rating action is based on best available information. CRISIL has obtained information, from sources it believes to be reliable, that SSCPL's liquidity is under pressure and the company has not been regular in servicing its debt. The company has a weak financial profile and constrained business profile of the company. The company' promoters have extensive industry experience. SSCPL is engaged into manufacturing of industrial explosives, detonating fuse and detonators. It has its manufacturing facility based in Bhilwara and was incorporated in 2005. TRIDENT SUGARS: CRISIL Places 'C' Ratings on Rating Watch Dev. -------------------------------------------------------------- CRISIL Ratings has placed its rating on the bank facilities of Trident Sugars Limited (TSL) on 'Rating Watch with Developing Implications' while reaffirming the ratings at 'CRISIL C'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Proposed Long Term 34.2 CRISIL C (Placed on Bank Loan Facility 'Rating Watch with Developing Implications') Rupee Term Loan 15.8 CRISIL C (Placed on 'Rating Watch with Developing Implications') The rating action follows the announcement by Rajshree Sugars and Chemicals Limited (RSCL) confirming divestment of its entire stake in TSL. CRISIL is in discussions with the management to evaluate the extent of impact of the divestment on TSL's credit risk profile and will remove the ratings from watch and take a final rating action upon receiving adequate clarity. CRISIL while assigning the rating on bank facilities of TSL, had earlier combined the business and financial risk profiles of TSL with its parent RSCL. In view of the stake divestment, CRISIL has now considered the standalone business and financial risk profiles of TSL. The ratings also reflect TSL's below-average financial risk profile marked by high gearing and below average debt protection metrics, and the company's susceptibility to regulatory risks in the sugar industry. These rating weaknesses are partially offset by TSL's long-standing regional presence. Key Rating Drivers & Detailed Description Weakness * Weak financial risk profile: The Company's financial risk profile continue to be weak marked by high gearing and subdued debt protection metrics. Substantial losses incurred in the past and sizeable debt has resulted in leveraged capital structure. Debt protection metrics remains subdued marked by interest coverage of 0.39 for fiscal 2016. Strengths * Long-standing regional presence in Telanagana: TSL has a long standing presence in Zaheerabad, Telangana region. The plant currently has a crushing capacity of 3000 TCD (tonnes of cane per day). TSL's plant (crushing unit) is located close to sugar crane growing region. CRISIL believes that long standing presence in Telangana region and plant's proximity to crane growing regions will benefit TSL over the medium term. Based in Zaheerabad (Telanagana), TSL was incorporated in 2002 is into manufacturing of sugar and has a crushing capacity of 3000 TCD (tonnes of cane per day). For the fiscal 2016, TSL reported net loss of INR4.9 crores on income from operations of INR149.7 crore. The company reported net loss of INR12.9 crore on income from operations of INR161.25 crore for fiscal 2015. Status of non-cooperation with previous CRA: TSL has not cooperated with ICRA Ltd which has classified it as non-cooperative vide release dated January 04, 2017. The reason provided by ICRA Ltd is absence of the requisite information from the company. USHA CUBALS: CRISIL Reaffirms 'B-' Rating on INR12MM Cash Loan -------------------------------------------------------------- CRISIL Ratings has reaffirmed its rating on bank facilities of Usha Cubals Private Limited (UCPL) at 'CRISIL B-/Stable' Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 12 CRISIL B-/Stable (Reaffirmed) Long Term Loan 8 CRISIL B-/Stable (Reaffirmed) CRISIL's rating on the long-term bank facilities of Usha Cubals Pvt Ltd (UCPL) continues to reflect a below-average financial risk profile because of a weak capital structure and subdued debt protection metrics, susceptibility of operating margin to volatility in gold prices, and exposure to significant regulatory risks. These rating weaknesses are partially offset by the extensive experience of the company's promoters in the gold- trading business. Key Rating Drivers & Detailed Description Weakness * Below average financial risk profile Usha Cubals has a below average financial risk profile marked by low net worth at around INR7 cr as on March 31, 2017 however partially comforted by a moderate gearing close to 1.48 times. The debt protection metrics are subdued due to low profitability. CRIISL believes that the company's financial risk profile is expected to remain below average due to its working capital intensive operations. * Susceptibility of operating margins to volatility in gold prices The domestic prices of commodities are generally aligned to the international prices. Any sharp fall in prices of gold/copper scrap can result in inventory losses for players such as UCPL, impacting the operating performance. CRISIL believes that the operating margins of the company will remain susceptible to volatility in gold prices. Strengths * Promoter's extensive industry experience UCPL's promoter, Mr. S K Agarwal, has an extensive experience of over two decades in the metal trading industry. In 2010, Mr. Agarwal started UCPL to trade in metals such as gold and copper. Their extensive industry experience of the promoter has helped the company establish healthy business relationships with its suppliers and customers. CRISIL believes that the promoter's extensive industry experience will help UCPL maintain its business risk profile over the medium term. Outlook: Stable CRISIL believes UCPL will continue to benefit over the medium term from the extensive industry experience of its promoters. The outlook may be revised to 'Positive' in case of higher-than- expected cash accrual, driven by improvement in scale of operations and profitability, leading to a better financial risk profile. The outlook may be revised to 'Negative' in case of deterioration in the financial risk profile, particularly liquidity, most-likely because of a decline in revenue or profitability, or a stretched working capital cycle. UCPL, set up in 2010 by Mr. S K Agarwal, trades in bullion and copper scrap, with bullion trading contributing most of its revenue. The company currently trades in gold jewellery. UCPL, reported loss of INR0.89 cr on net sales of INR 51 cr for 2015-16, against profit after tax (PAT) of INR0.27 cr on net sales of INR180 cr for 2014-15. ================= I N D O N E S I A ================= INDOSAT TBK: Moody's Ups Issuer Rating from Ba1; Outlook Stable --------------------------------------------------------------- Moody's Investors Service has upgraded to Baa3 from Ba1 the issuer rating of Indosat Tbk. (P.T.) (Indosat Ooredoo). The outlook for the rating is stable. At the same time, Moody's has withdrawn the company's Ba1 Corporate Family Rating. RATINGS RATIONALE "The rating upgrade reflects the continued strengthening of Indosat Ooredoo's operational metrics as well as the ongoing stabilization of its financial profile, including lower leverage levels," says Nidhi Dhruv, a Moody's Vice President and Senior Analyst. The Baa3 issuer rating continues to incorporate a one-notch uplift to reflect Moody's expectation of extraordinary support from the parent company, Ooredoo Q.S.C. (A2 stable), in a distressed situation. Ooredoo has a 65% shareholding in Indosat Ooredoo. "Although the Indonesian mobile sector remains competitive with around seven operators, industry consolidation in recent years has led to moderating price competition. Moody's expects Indosat Ooredoo's revenue to grow around 7% in 2017, supported by the increasing contribution from data revenue as more subscribers utilize its 3G and 4G services," adds Dhruv, also Moody's lead analyst for Indosat Ooredoo. The company's subscriber base grew by 22.8% year-on-year to 85.7 million in 2016. The increase was driven by subscriber acquisition strategies, which included generous mobile data allowances, and which also targeted prospective subscribers outside the main Indonesian island of Java. While these initiatives resulted in a slight contraction in average revenue per user (ARPU), Indosat Ooredoo's adjusted EBITDA margin actually increased to around 52% in 2016 from 49% in 2015 due to tighter cost controls on its selling, general and administrative expenses in 2016. Moody's also expects the company to maintain its strong EBITDA margins over the next two years through further cost controls, including better management of network-related costs, such as through securing lower rentals on renewals of tower lease contracts. "Leverage -- as measured by adjusted debt/EBITDA -- declined to around 2.1x in 2016 from 2.5x in 2015 -- reflecting both lower debt levels and higher EBITDA. In addition, the company's US dollar debt exposure declined to around 10% from around 22% in 2015. Moody's expects a further reduction to a mid-single digit percentage over the next 12-18 months as the company continues to refinance its US dollar revolvers with rupiah bonds," adds Dhruv. Management has guided towards maintaining the company's net leverage at 1.4x-1.5x, on a reported basis, a level which supports the Baa3 rating. This ratio stood at 1.7x as of December 2016. In 2016, Indosat Ooredoo reported positive net profit after three years of losses. Although Moody's expects the company to re- initiate dividend payouts, any shareholder returns will likely be reasonable and adhere to the company's overall leverage and cash flow policies. "In keeping with the investment-grade rating, Moody's expects the company to maintain a prudent financial policy, with low leverage, and prioritizing the deployment of excess cash towards debt repayments and capital expenditures instead of large acquisitions and significant increases in shareholder returns," adds Dhruv. Given the continued investments needed to enhance its 3G and 4G LTE networks, Moody's expects Indosat Ooredoo's cash capex in 2017 to be around IDR7.0-7.5 trillion, in line with its capex for 2016 of IDR7.3 trillion, as it continues to increase its network capacity and coverage, especially outside of Java. Indosat Ooredoo's cash balance and projected cash flow from operations will be insufficient to meet its capex requirements along with its large debt maturities of around IDR8.3 trillion over the next 12 months. However, Moody's considers refinancing risk to be limited, given the company's strong access to the local bank and bond markets, as evidenced by its issuance of around IDR10 trillion local currency bonds between December 2014 and September 2016. The company also plans to issue an additional IDR3 trillion local currency bonds by June, with around 70% of the proceeds to be applied towards debt reduction, and the remainder applied to network-related costs. Indosat Ooredoo's rating reflects its fundamental credit strength, underpinned by its strong market position, established network, high margins, and improved financial profile, despite the competitive character of the operating environment. As a result, it is well positioned to benefit from the favorable growth dynamics existent in the industry. The stable outlook reflects Moody's expectations that Indosat Ooredoo will maintain a strong financial profile through steady revenue and earnings growth, and that the competitive and regulatory environments remain benign. What Could Change the Rating -- Up Further upward pressure is limited, given the small scale and the still competitive operating environment. However, positive rating pressure may build over time if there is consistent improvement in Indosat Ooredoo's financial profile, such that (1) adjusted debt/EBITDA falls below 1.5x on a consistent basis, and (2) retained cash flow/adjusted debt remains above 40%-45% on a sustained basis. What Could Change the Rating -- Down The rating could be downgraded if there is a material deterioration in its underlying credit strength, arising from diminishing profit margins, weaker operating cash flows, or increased shareholder returns. Metrics indicative of downward pressure include (1) adjusted debt/EBITDA rising above 2.5x, or (2) retained cash flow/adjusted debt falling below 30% on a sustained basis. In addition, the one-notch uplift -- based on expected support from the parent company, Ooredoo Q.S.C. -- could be removed if its stake falls below 50%, or if it indicates that Indosat Ooredoo is no longer a core asset. The principal methodology used in these ratings was Telecommunications Service Providers published in January 2017. Indosat Tbk. (P.T.) is a fully integrated telecommunications network and services provider in Indonesia. The company is the second-largest cellular operator in the country in terms of revenue and active subscribers, as well as the leading provider of international call services. It also provides multi-media, data communications, and internet services. The company is 65% owned by Ooredoo Q.S.C. MNC INVESTAMA: Moody's Cuts CFR to Caa2 on Refinancing Risk ----------------------------------------------------------- Moody's Investors Service has downgraded the corporate family rating (CFR) of MNC Investama Tbk. (P.T.) (BHIT) to Caa2 from Caa1, and the senior secured rating on the notes, issued by its wholly-owned subsidiary, Ottawa Holdings Pte. Ltd., and unconditionally and irrevocably guaranteed by BHIT, to Caa3 from Caa2. The outlook on the ratings is negative. Through its 52.84% stake in PT Global Mediacom Tbk (BMTR ), BHIT has stakes in media operating companies PT Media Nusantara Citra Tbk (MNCN), Indonesian's leading free-to-air broadcast company, and PT MNC Sky Vision Tbk, Indonesia's leading pay-TV operator. BHIT also has a significant interest in PT MNC Kapital Indonesia Tbk, a leading financial services company in Indonesia. RATINGS RATIONALE "The downgrade of BHIT's CFR rating to Caa2 reflects the significant and pressing level of refinancing risk throughout the group. As of March 31, 2017, BHIT's consolidated short-term, current debt and bonds payable totaled IDR6.3trillion . In addition, BHIT's $365 million senior secured notes are due in May 2018," said Annalisa DiChiara, a Moody's Vice President and Senior Credit Officer. Most of the short-term and current debt maturities are at the operating subsidiary levels, including a $250 million (IDR 3.4 trillion) bank loan maturing at MNCN, and an IDR999 billion bond payable at BMTR. In addition, the $365 million 5.875% senior secured notes -- issued by BHIT's wholly-owned subsidiary Ottawa Holdings Pte. Ltd. and unconditionally and irrevocably guaranteed by BHIT-- mature in May 2018. In Moody's views, the absence of a definitive refinancing plan to secure funding one year prior to maturity exposes the company to a material level of refinancing risk and market risk. The BHIT bond is secured by 3,276,739,031 shares of BMTR (equal to 2.0 times the principal amount of the notes offered as of the date of the offering memorandum in May 2013 based on the BHIT's financial statement disclosure). However, based on a closing price on May 10, 2017, the value of those shares is currently equal to just 0.4x of the principal amount of the $365 million senior secured notes outstanding. Moody's notes that the debt service account -- equal to two semi- annual interest payments - was fully funded with an amount equal to $10.7 million at March 31, 2017, according to the disclosure in BHIT's financial statements. At the same time, the Caa2 CFR reflects BHIT's complex organizational structure. BHIT owns less than 100% of its operating subsidiaries, including MNCN. As a result, Moody's also analyzes BHIT on a standalone basis whereby the company's EBITDA consists primarily of the cash dividends it receives from its subsidiaries, based on its effective equity ownership. For example, although fully consolidated, as of March 31, BHIT's effective interest in MNCN -- which Moody's estimates contributes a majority of BHIT's consolidated EBITDA -- was only around 33%. This is because BHIT owns around 52.84% of BMTR, which then owns around 62.66% of MNCN . Moody's believes this standalone analysis results in significantly higher leverage and weaker interest coverage than the 4.5x adjusted debt/EBITDA and 3.2x EBITDA/interest BHIT recorded on a Moody's adjusted consolidated basis for the 12 months ended 30 Dec 2016. Finally, although on a consolidated basis, cash and current financial assets totaled IDR8.2 trillion at March 31, 2017, a portion of this amount is at operating subsidiaries, including BMTR and MNCN, which are less than 100% owned. Moody's is also cognizant that a portion of consolidated cash and financial assets is either deposited in, or held in financial securities issued by, related parties, and so may not be immediately realizable. The outlook is negative, reflecting the persistent level of refinancing risk present throughout the BHIT group over the next 12-15 months, including the $365 million senior secured notes maturity in May 2018. Further negative ratings pressure could emerge should BHIT's operating subsidiaries fail to service or successfully refinance their maturing loans or BHIT's bond. Upward rating pressure is unlikely over the near term, given the significant level of refinancing risk associated with debt maturing at BHIT's key operating subsidiaries and its own bond maturity in May 2018. However, the ratings could be upgraded should BHIT refinance its upcoming bank and bond maturities in a timely manner and without a significant increase in interest costs. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. Headquartered in Jakarta, MNC Investama Tbk. (P.T.) (BHIT) is a listed investment holding company with strategic investments in operating companies in media, financial services, energy and real estate. BHIT is controlled by Mr. Hary Tanoesoedibjo. ========= J A P A N ========= SURUGA BANK: Fitch Affirms 'B' Support Rating Floor --------------------------------------------------- Fitch Ratings has revised the Outlook for The Shizuoka Bank, Ltd. to Stable from Negative and affirmed the Long-Term Issuer Default Rating (IDR) at 'A'. In addition, Fitch has affirmed Suruga Bank Ltd.'s IDR at 'A-' with a Stable Outlook. The Outlook revision for Shizuoka follows the affirmation of Japan's sovereign rating at 'A' and revision of the Outlook to Stable from Negative on April 27, 2017 (see Fitch Revises Outlook on Japan to Stable; Affirms at 'A'.) Fitch expects the operating environment for Japanese banks to stabilise. Market sentiment has begun to improve as the domestic economy gains some positive momentum leading to low positive, instead of negative, domestic market interest rates. As a result, Fitch has changed Fitch outlooks on the banking system to stable from negative as cyclical pressure is easing and credit costs remain low. This will support the stabilisation of Japanese regional banks' earnings in the fiscal year ending March 2018 (FYE18). Fitch believes regional banks that serve respective domestic regions' financial needs will remain more vulnerable to low interest rates and the competitive environment than Japan's major banks. This is due to their high dependence on interest revenue, with limited diversification of revenue sources, such as fees and overseas businesses. KEY RATING DRIVERS IDRS AND VIABILITY RATING (VR) The IDRs of Shizuoka and Suruga are driven by their VRs. Shizuoka's VR of 'a' reflects its strong capitalisation (with an FCC ratio of 17% and common equity tier 1 ratio of 16.3% at FYE17), which Fitch expects can be sustained over the medium term, although it will become more challenging should pressure on profitability increase. The bank has a leading franchise in Shizuoka Prefecture and potential buffers against credit-risk through high guarantee/collateral coverage, including public guarantees. Constraining factors for Shizuoka's VR include limited options to diversify its revenue base and the prevailing low interest rates coupled with intense competition increasingly pressuring profitability due to the bank's reliance on lending. Suruga's VR of 'a-' factors in its above-domestic peer profitability, with a return on assets of 0.9% for the nine months ending 2016, compared with the mega bank average of 0.4% and Shizuoka's 0.3%. Its operating profit/risk weighted assets ratio for the same period was 2.5%, compared with the mega bank average of 1.1% and Shizuoka's 0.7%. Suruga has also improved its net interest margin, with increased balance in higher-yield non- housing loans, whereas the net interest margins of domestic peers contracted. The bank's high profitability is backed by its unique business model, which differentiates itself from typical Japanese commercial banks by providing multi-purpose loans to a range of retail clients. Profitability is also supported by Suruga's proactive risk control, although to some degree it may reflect the bank's higher risk appetite. Suruga's VR is constrained by a lack of diversification due to its concentration on retail lending and small asset size, with consolidated total assets of JPY4.5 trillion at end-2016, compared with Shizuoka's JPY12 trillion. Strong funding and liquidity, sustained by a firm deposit base, are key strengths for Japan's banking system and underpin both banks' ratings. In addition, the banks' credit profiles are underpinned by adequate risk controls and buffers, particularly in terms of earning capacity. The Stable Outlook for Shizuoka's and Suruga's IDRs reflects the stable domestic operating environment and Fitch's view that overall asset quality will remain favourable and loss absorption buffers are sufficiently strong relative to the ratings. SUPPORT RATING AND SUPPORT RATING FLOOR Shizuoka's Support Rating of '2' and Support Rating Floor of 'BBB-' reflect Fitch's view that the sovereign has a strong propensity to support the bank, if necessary, due to Shizuoka's size relative to other banks in its prefecture and nationally. The bank accounts for 31% and 24% of Shizuoka prefecture's loans and deposits, respectively. Fitch believes the sovereign's propensity to support Suruga, which has a Support Rating of '4' and a Support Rating Floor of 'B', would be more limited due to its marginal systemic importance to Japan's financial system and small operational size, ranking 33rd in net asset size. RATING SENSITIVITIES IDRS AND VR Both banks' VRs and IDRs could be downgraded if unexpected deterioration in the operating environment increases performance volatility, resulting in the banks taking more risk, especially credit risk - the bulk of these banks' risks - without a corresponding increase in loss-absorption buffers. This also includes increased exposure to market risk, although Fitch expects it to be small, or involvement in industry consolidation, leading to potentially higher volatility in earnings or capital. Shizuoka's VR is sensitive to further downward pressure on profitability to a level that would affect its solid capitalisation, narrowing the gap between it and domestic peers. Its VR and IDR could also face negative rating action if the sovereign's rating or Fitch Outlooks on the rating was revised downward, in light of its ratings proximity to the sovereign. There is limited upside scope to Shizuoka's VR as it is rated at the same level as the sovereign. Suruga's VR is sensitive to the bank adopting a higher risk appetite to defend its competitive position without increasing its loss absorption buffers. Positive rating action for Suruga is likely to stem from further structural improvement in the domestic operating environment, leading to sustainable loan expansion and faster internal capital generation without a large increase in risk appetite. However, Fitch believes such structural improvement will take some time. SUPPORT RATING AND SUPPORT RATING FLOOR Shizuoka's Support Rating and Support Rating Floor are sensitive to a change in Fitch's assessment of the sovereign's ability and willingness to support the bank. A downgrade in the sovereign's ratings to 'A-' or below would be likely to lead to a downgrade in Shizuoka's Support Rating and Support Rating Floor. Suruga's Support Rating and Support Rating Floor are not immediately sensitive to the sovereign rating, as Fitch already factors in a limited probability of support. Changes to the regulatory support framework could lead to a change in Fitch perceptions about the sovereign's propensity to support Suruga. The rating actions are: Shizuoka: - Long-Term Foreign- and Local-Currency IDRs affirmed at 'A'; Outlook revised to Stable from Negative - Short-Term Foreign- and Local-Currency IDRs affirmed at 'F1' - Viability Rating affirmed at 'a' - Support Rating affirmed at '2' - Support Rating Floor affirmed at 'BBB-' Suruga: - Long-Term Foreign- and Local-Currency IDRs affirmed at 'A-'; Outlook Stable - Short-Term Foreign- and Local-Currency IDRs affirmed at 'F1' - Viability Rating affirmed at 'a-' - Support Rating affirmed at '4' - Support Rating Floor affirmed at 'B' ==================== N E W Z E A L A N D ==================== MAD BUTCHER: Franchisee in Papanui Placed in Liquidation -------------------------------------------------------- Hamish McNicol at Stuff.co.nz reports that a former Mad Butcher franchisee was not making enough money due to rising costs and low profit margins, liquidators said. Stuff relates that the company which formerly operated the Mad Butcher store in Papanui, Christchurch, went into liquidation last week. Insolvency Management liquidator Wayne Deuchrass was appointed the store's liquidator last week, but at the time said it was too early to say what had happened, Stuff discloses. Veritas Investments chairman Tim Cook was overseas and could not comment on the matter, Stuff says. On May 16, however, the first liquidators' report for the store said it had ceased trading earlier this month after the franchisor was granted an injunction against it by the High Court in Christchurch, according to Stuff. The store had operated for about two-and-a-half years before this, the liquidators' report, as cited by Stuff, said. "But increased operational costs combined with inadequate margins and funding costs ultimately lead to declining profitability and insufficient cash flow to pay debts as they fell due." It was estimated there would be a NZ$660,000 shortfall to creditors, Stuff discloses. PK FURNITURE: Goes Into Receivership ------------------------------------ NZ Herald reports that retailer PK Furniture -- which has close to 150 staff and 17 stores -- has gone into receivership. The company, which advertises itself as New Zealand's lowest- priced furniture retailer, has stores across the North Island. Receiver Andrew McKay, of BDO, told the Herald the chain employed between 140 and 150 staff and that it would continue to trade. The receivers were looking for a buyer, he said, the Herald relates. He could not reveal the extent of the chain's debt, according to the Herald. Asked about customers who had orders with the company, Mr. McKay said the receivers were working through the legal position, the Herald relays. Some customers, for example, had paid for furniture in full while others had paid in part. "We're working to get answers . . . we're working as fast as we can," the report quotes Mr. McKay as saying. PK Furniture is the trading name of Greenmark Wholesaler (NZ), which is directed by Jing Huang, the Herald reports citing Companies Office records. The Herald adds that Mr. McKay said the director had asked the bank to appoint receivers, who took over control of the business on May 15. ============================= P A P U A N E W G U I N E A ============================= PAPUA NEW GUINEA: B2 Rating Reflects Pressure on Liquidity ---------------------------------------------------------- Moody's Investors Service says that Papua New Guinea's (PNG) B2 rating and stable outlook reflect significant pressure on government financing and external liquidity amid structurally low commodity prices and continued weak GDP growth. Credit challenges also stem from weaknesses in governance and security, low incomes and poor infrastructure, while domestic political risk remains a constraint on the sovereign's credit profile. Balancing these, PNG's credit strengths include strong growth potential supported by natural resources wealth and low, albeit rising, government debt. Moody's conclusions are contained in its recently released annual credit analysis, "Government of Papua New Guinea -- B2 Stable." The report elaborates on PNG's credit profile in terms of Economic Strength, Low (-); Institutional Strength, Very Low (+); Fiscal Strength, Moderate (+); and Susceptibility to Event Risk, Moderate; the four main analytic factors in Moody's Sovereign Bond Rating Methodology. It does not constitute a rating action. Moody's forecasts real GDP growth of around 3% in the coming years as the economy adjusts to persistently lower commodity prices than in the first half of the decade. Stronger mining and agricultural production and construction ahead of the 2018 Asia-Pacific Economic Cooperation summit will support output; however, continuing fiscal tightening, high inflation and a shortage of foreign currency weigh on consumption and investment. Despite government efforts to curb expenditure, fiscal deficits remain wide and debt levels continue to climb. Government liquidity risks have risen due to an increasing reliance on short-term financing, while higher interest rates reduce debt affordability. External liquidity pressures are prominent. A backlog of foreign- exchange payments highlights a greater degree of balance of payments stress than PNG's metrics capture. Clearing this backlog will continue to place high demands on the country's foreign reserves. The rise in government debt since 2011, in contravention to fiscal rules, is an indication of limited fiscal policy effectiveness. Such debt breached the legislated limit of 30% of GDP in 2016. The government's new Medium Term Fiscal Strategy (MTFS) 2018- 2022, to be formulated later this year, will provide greater clarity on limits around fiscal deficits, debt and foreign currency borrowings. The MTFS, if successfully adhered to, could allow the government to build fiscal buffers that can help mitigate the impact of potential future negative shocks. Moody's expects the government's revenue performance to remain subdued because of persistent weak domestic demand and low commodity prices. The government is responding to fiscal pressure with broad-based cuts in expenditure, including operational expenses and capital investment. The stable outlook balances the weak near-term growth outlook against more robust prospects over the longer term. The boost to potential growth from investment in large energy and mining projects in the coming years would help alleviate fiscal and external pressures, and could lead to upward pressure on the rating. Downward rating pressure could develop as a result of (1) a re- emergence of wide fiscal deficits, leading to a rapid rise in government debt; (2) deteriorating growth prospects that ultimately weigh on fiscal and debt sustainability; and (3) a further decline in foreign currency reserves that increases external payment risks. ==================== S O U T H K O R E A ==================== HYUNDAI MERCHANT: Q1 Loss Widens to KRW735B on Lower Freight Rate ----------------------------------------------------------------- Yonhap News Agency reports that Hyundai Merchant Marine Co. said on May 15 that its loss widened in the first quarter from the previous quarter largely due to lower freight rates. Yonhap relates that net loss reached KRW735 billion (US$653 million) in the January-March period, compared with an operating loss of KRW276 billion in the three-month period a year earlier, Yonhap relates citing a regulatory filing. Hyundai Merchant said operating losses reached KRW131 billion in the first quarter, narrowing from an operating loss of KRW163 billion the previous year, while sales rose 7% on-year to KRW1.3 trillion over the cited period, Yonhap relays. Hyundai Merchant handled 958,000 twenty-foot equivalent (TEU) containers in the first quarter, up 37 percent from a year earlier, with shipments to the American and Asian regions spiking 41.4 percent and 62.4 percent on-year during the cited period, the report discloses. Hyundai Merchant expects freight rates to improve down the road on seasonal factors, adds Yonhap. "Entering the third and fourth quarters of the year, we will see an improvement (in the company's performance)," the report quotes Hyundai Merchant chief executive Yoo Chang-keun as saying in a press briefing. Yonhap relates that the top executive said Hyundai Merchant's stable profit is eyed next year on the back of improved business conditions, reduced costs and realigned routes. Hyundai Merchant Marine Co., Ltd. -- http://www.hmm21.com/-- is a Korea-based company specializing in the provision of shipping services. The Company provides its services under two main segments: container and bulk. Hyundai Merchant Marine is currently under a creditor-led restructuring scheme. On Feb. 9, Hyundai Merchant said Korea Investor Service (a Moody's Affiliate) upgraded HMM's credit rating from D (Default) to BB (Stable). Korea Investor Service said: * HMM has successfully overcome all the challenges through debt for equity swap and changing conditions (adjustment of charter fee/debt adjustment with bondholders etc) * Favorable conditions for HMM including reduced HMM's financial burden, benefits from Korean government supports, a possibility of support from its largest shareholder, and merits as Korea's main national flag carrier led to raise HMM's credit rating from D to BB. * Expected to have a high likelihood of upgrading its credit rating based on continuous improvement on earnings. * Meanwhile, HMM's debt ratio slightly increased from 186% (2016.09) to 235%, as HMM issued convertible bonds, and acquired overseas shipping terminals etc. ********* 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 ***