/raid1/www/Hosts/bankrupt/TCRAP_Public/170525.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Thursday, May 25, 2017, Vol. 20, No. 103
Headlines
A U S T R A L I A
A DOG: Second Creditors' Meeting Set for May 31
AKS HOMES: First Creditors' Meeting Slated for May 31
BUSINESS CONNECT: Second Creditors' Meeting Set for May 29
G. G. ENGINEERING: Second Creditors' Meeting Set for June 2
MASTER JEDI: Second Creditors' Meeting Set for May 30
REX BIONICS: Shareholders Back Bioscience Managers Lifeline Deal
TINKLER GROUP: ASIC Bans Nathan Tinkler from Managing Companies
UNIBIC AUSTRALIA: Liquidators File Suit Against Directors
C H I N A
DR PENG: Moody's Assigns (P)Ba2 Rating to Proposed Sr. Notes
H O N G K O N G
NANYANG COMMERCIAL: Moody's Rates Proposed USD Securities at Ba2
I N D I A
ASHOK BRICKS: CRISIL Lowers Rating on INR10MM Cash Loan to 'B'
BASUDEB ENGINEERING: CRISIL Cuts Rating on INR10MM Loan to B
BRAHMA REFRACTORIES: CRISIL Reaffirms B Rating on INR6.25MM Loan
CJ'S HARITHA: CRISIL Assigns 'B' Rating to INR21.78MM Term Loan
CKOMPAX METATECH: CRISIL Reaffirms 'B' Rating on INR30MM Loan
GAJRAJ FLOUR: CRISIL Lowers Rating on INR10MM Cash Loan to 'B'
GAYATRI MICRONS: CRISIL Lowers Rating on INR6.08MM Term Loan to B
GEETA ENTERPRISES: CRISIL Cuts Rating on INR2.5MM Cash Loan to B
GNB MOTORS: CRISIL Downgrades Rating on INR7.5MM Loan to 'B'
GUPTA INFOTECH: CRISIL Lowers Rating on INR9MM Loan to 'B'
GURANDITTA MAL: CRISIL Cuts Rating on INR17MM Cash Loan to 'B'
HANSRAJ AGROFRESH: CRISIL Cuts Rating on INR3.46MM Loan to 'B'
HANUMAN ALLOYS: CRISIL Reaffirms B Rating on INR10.75MM Loan
HIMALAYAN FLOUR: CRISIL Lowers Rating on INR6MM Cash Loan to B
INSTYLE EMBROIDERIES: CRISIL Cuts Rating on INR7.35MM Loan to B
KANCHESHWAR SUGAR: CRISIL Cuts Rating on INR50MM Loan to 'D'
KRISHNA COTTON: CRISIL Ups Rating on INR14MM Cash Loan to BB-
L. MADANLAL: Ind-Ra Affirms BB- Long-Term Issuer Rating
MAXTAR BIO: CRISIL Lowers Rating on INR12MM Cash Loan to 'B'
MOHAMMED ENTERPRISES: CRISIL Reaffirms B+ Rating on INR52.1M Loan
PRUDENTIAL SUGAR: CRISIL Reaffirms 'C' Rating on INR20MM LT Loan
PUSHKAR PROPERTIES: CRISIL Cuts Rating on INR5.0MM Loan to 'B'
QUALITY INDUSTRIES: Ind-Ra Migrates BB+ Rating to Non-Cooperating
RAJ RAJESHWARI: CRISIL Assigns 'B' Rating to INR15MM Term Loan
RUSHABH TRADING: CRISIL Cuts Rating on INR8MM Cash Loan to 'B'
SADASIVAPET MUNICIPALITY: Ind-Ra Assigns B+ Issuer Rating
SANGAREDDY MUNICIPALITY: Ind-Ra Assigns B+ LT Issuer Rating
SANT BHAGATRAM: CRISIL Raises Rating on INR6.5MM Cash Loan to BB-
SANVI SPINNING: CRISIL Lowers Rating on INR34.50MM Term Loan to B
SATNAM INDUSTRIES: Ind-Ra Migrates B+ Rating to Non-Cooperating
SHARADA EDUCATION: CRISIL Reaffirms B- Rating on INR11MM Loan
SHREE BALAJI: CRISIL Downgrades Rating on INR10MM Loan to 'B'
SREENATH ENGG: CRISIL Lowers Rating on INR3.5MM Cash Loan to B
SRI PARANTHAMAN: CRISIL Assigns B- Rating to INR5.5MM Loan
TANDUR MUNICIPALITY: Ind-Ra Assigns B+ Long-Term Issuer Rating
TATA POWER: FY2017 Results Support Ba3 Moody's CFR
TECHOPS INFRASTRUCTURE: CRISIL Rates INR10MM Term Loan at B+
VIKARABAD MUNICIPALITY: Ind-Ra Assigns B Long-Term Issuer Rating
Z FASHIONS: CRISIL Reaffirms 'B+' Rating on INR5MM Cash Loan
ZAHEERABAD MUNICIPALITY: Ind-Ra Assigns B Long-Term Issuer Rating
I N D O N E S I A
AGUNG PODOMORO: Fitch Assigns BB- Long-Term Issuer Default Rating
AGUNG PODOMORO: Moody's Assigns Ba3 CFR; Outlook Stable
J A P A N
TOKYO ELECTRIC: Moody's Upgrades CFR to Ba2; Outlook Stable
N E W Z E A L A N D
PACIFIC EDGE: Annual Net Loss Widens to NZ$21 Million in 2017
VIADUCT: FMA Reviews Disclosure Processes After Aborted Case
V I E T N A M
VIETNAM: Moody's B1 Rating Reflect Strong FDI to Help Economy
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A U S T R A L I A
=================
A DOG: Second Creditors' Meeting Set for May 31
-----------------------------------------------
A second meeting of creditors in the proceedings of A Dog Called
Spot Pty Ltd has been set for May 31, 2017, at 3:00 p.m. at the
offices of Holzman Associates, Level 2, 32 Martin Place, in
Sydney, New South Wales.
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 30, 2017, at 10:00 a.m.
Justin Holzman of Holzman Associates was appointed as
administrator of A Dog on April 26, 2017.
AKS HOMES: First Creditors' Meeting Slated for May 31
-----------------------------------------------------
A first meeting of the creditors in the proceedings of AKS Homes
Pty Ltd and AKS Homes (QLD) Pty Ltd will be held at the offices
of SV Partners, SV House, 138 Mary Street, in Brisbane,
Queensland, on May 31, 2017, at 2:30 p.m.
Terrence John Rose and David Michael Stimpson of SV Partners were
appointed administrators of AKS Homes on May 19, 2017.
BUSINESS CONNECT: Second Creditors' Meeting Set for May 29
----------------------------------------------------------
A second meeting of creditors in the proceedings of Business
Connect Carlingford Pty Limited has been set for May 29, 2017, at
3:30 p.m. at the offices of Worrells Solvency, Suite 601B, Level
6, 91 Phillip Street, in Parramatta, NSW.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the
Company be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by May 28, 2017, at 4:00 p.m.
Graeme Robert Beattie of Worrells Solvency was appointed as
administrator of Business Connect on April 12, 2017.
G. G. ENGINEERING: Second Creditors' Meeting Set for June 2
-----------------------------------------------------------
A second meeting of creditors in the proceedings of G. G.
Engineering (Aust) Pty Ltd has been set for June 2, 2017, at
9:30 a.m. at the offices of Grant Thornton, Grant Thornton
The Rialto, Level 30, 525 Collins Street, in Melbourne, Victoria.
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 June 1, 2017, at 9:30 a.m.
Stephen Robert Dixon and Ahmed Bise of Grant Thornton were
appointed as administrators of G. G. Engineering on March 14,
2017.
MASTER JEDI: Second Creditors' Meeting Set for May 30
-----------------------------------------------------
A second meeting of creditors in the proceedings of Master Jedi
Pty Ltd has been set for May 30, 2017, at 11:00 a.m. at the
offices of Ferrier Hodgson, Level 28, 108 St Georges Terrace, in
Perth, WA.
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 29, 2017, at 4:00 p.m.
Dermott Joseph McVeigh and Wayne Rushton of Ferrier Hodgson were
appointed as administrators of Master Jedi on Sept. 26, 2016.
REX BIONICS: Shareholders Back Bioscience Managers Lifeline Deal
----------------------------------------------------------------
Paul McBeth at BusinessDesk reports that Rex Bionics investors
have backed a deal that will see their investment diluted to
little more than a third of the company in exchange for a
AUD10 million (NZ$10.7 million) lifeline by Australian fund
manager and fellow shareholder BioScience Managers.
At a meeting in London on May 22, Rex shareholders voted in favor
of a deal that would pour the company's business and assets into
its Australian subsidiary, Rex Pty, which would then sell
AUD7.5 million of shares to BioScience, lifting the fund
manager's stake to 64 per cent, Rex said in a notice to the
London Stock Exchange, BusinessDesk relates. BioScience would
also commit to a further investment of AUD2.5 million if certain
targets were met, in a rights issue that the existing Rex
investors could participate in.
According to BusinessDesk, the second part of the transaction
would see Rex sign a two-year development agreement with McLaren
Applied Technologies, a unit of the luxury car maker McLaren
Group, to design the next phase of the Rex product in an effort
to reduce the cost of making the exoskeletons which help
wheelchair-bound people walk.
McLaren would be issued warrants to help pay for its services,
which could dilute existing Rex shareholders down to
29.2 per cent, BusinessDesk says.
In March, Rex said it would probably need external funding to
keep operating after struggling to raise capital to pay for a
prototype of the new product, BusinessDesk recalls. The directors
on May 22 said if the transaction isn't approved the company
won't be able to pay its debts and will have to stop operating or
kick off an insolvency procedure immediately, which would wipe
out shareholders' entire equity investment, according to
BusinessDesk.
BusinessDesk says the transaction will see the board and
management of the Australian subsidiary assume responsibility for
the strategic direction and day-to-day running. The board of Rex
Pty will be made up of BioScience managing director Jeremy
Curnock Cook, BioScience appointees Amanda Gillon and Bill
Hunter, and current Rex Bionics chair David Macfarlane, the
report notes.
The notice of meeting said Rex expects there to be significant
investment in staff, facilities and development programmes in
Australia, where BioScience-managed funds focus their investment,
while the New Zealand subsidiary will own the patents, product
registrations, operating systems and other intellectual property
required to operate the Rex business, BusinessDesk relays.
Rex has been a beneficiary of Callaghan Innovation funding,
receiving research and development grants totalling $2.9 million
before it listed on the London Stock Exchange's AIM market in
2014 with a condition that production stayed in New Zealand until
2017.
The listed entity will delist from the AIM market around the end
of June and continue as an unquoted company to provide input and
support to Rex Pty through its board representative, it said in
the notice, adds BusinessDesk.
Rex Bionics produces exoskeletons which help wheelchair-bound
people walk.
TINKLER GROUP: ASIC Bans Nathan Tinkler from Managing Companies
---------------------------------------------------------------
The Australian Securities and Investments Commission has
disqualified Nathan Tinkler, Donna Dennis and Troy Palmer from
managing companies for between three and four years for multiple
serious failures in their duty as directors.
Mr. Tinkler's three-years and nine-months disqualification
follows the appointment of liquidators to 11 companies he
managed:
Ocean Street Holdings Pty Ltd
Tinkler Group Pty Ltd
Tinkler Group Holdings Administration
Monegeetta Holdings Pty Ltd
Patinack Farm Holdings No 4 Pty Ltd
Patinack Farm Holdings No 8 Pty Ltd
Thoroughbred Administration Pty Ltd
Aston Metals Limited
Patinack Farm Administration Pty Ltd
Mulsanne Resources Pty Ltd
Supercar International Holdings Ltd
Ms. Dennis' three-year disqualification follows the appointment
of liquidators to nine companies she managed:
Ocean Street Holdings Pty Ltd
Thoroughbred Administration Pty Ltd
Hunter Sports Special Events Pty Ltd
Tinkler Group Pty Ltd
Tinkler Group Holdings Administration Pty Ltd
Monegeetta Holdings Pty Ltd
Patinack Farm Holdings No 4 Pty Ltd
Patinack Farm Holdings No 8 Pty Ltd
Newcastle Jets Football Operations Pty Ltd
Mr. Palmer's three-years and nine-months disqualification follows
the appointment of liquidators to nine companies he managed:
Thoroughbred Administration Pty Ltd
Newcastle Jets Football Operations Pty Ltd
Ocean Street Holdings Pty Ltd
Aston Metals Limited
Patinack Farm Administration Pty Ltd
Mulsanne Resources Pty Ltd
Supercar International Holdings Ltd
The Supercar Club Pty Ltd
TSCCF Pty Ltd
As a result of information contained in reports provided by the
liquidators of the failed companies, ASIC was concerned
Mr. Tinkler, Ms. Dennis and Mr. Palmer had:
* failed to prevent the companies from trading while insolvent;
* failed to ensure the companies paid their taxes;
* failed to discharge their duties as a director; and
* allowed one of the companies to deliberately operate at
a loss.
Mr. Tinkler and Mr. Palmer were each disqualified from managing
companies for three years and nine months, effective from
May 18, 2017 and May 12 respsectively. Ms Dennis has been
disqualified from managing corporations for three years,
effective from May 22, 2017.
ASIC Commissioner John Price said, 'The disqualifications imposed
on these directors should highlight the consequences that can
follow when companies are poorly managed. ASIC will seek to hold
company directors accountable if they systemically fail to
discharge their obligations when managing companies'.
Section 206F of the Corporations Act allows ASIC to disqualify a
person from managing corporations for up to five years if, within
a seven-year period, the person was an officer of two or more
companies, and those companies were wound up and a liquidator
provides a report to ASIC about the company's inability to pay
its debts.
ASIC also maintains a public register of banned and disqualified
persons that provides information about people who have been:
- disqualified from involvement in the management of a
corporation;
- disqualified from auditing self-managed superannuation
funds (SMSFs); or
- disqualified from practising in the financial services of
credit industry.
UNIBIC AUSTRALIA: Liquidators File Suit Against Directors
---------------------------------------------------------
Ben Butler at The Australian reports that liquidators of
collapsed Anzac biscuit maker Unibic Australia have launched
legal action to claw back millions of dollars from the sons of
former Coles boss Brian Quinn, two former investment bankers and
a director of NZ dairy giant Fonterra for allegedly running the
business while it was insolvent.
It is alleged Unibic was insolvent from June 30, 2010, more than
a year and a half before it collapsed into administration in
February 2012 -- one of the first high-profile suppliers to fall
victim to the intense pressure on prices imposed by supermarket
giants Coles and Woolworths.
Citing documents filed with the Victorian Supreme Court, the
report says liquidators Stirling Horne, Glenn Franklin and Petr
Vrsecky, of PKF, are seeking more than AUD7 million each from
Paul and Michael Quinn, and millions more from former Lazard
private equity boss Lindsay Phillips, his then-offsider Christian
Bernecker and agribusiness veteran Ashley Waugh, who now sits on
the Fonterra board.
As the company teetered on the brink of collapse, Michael Quinn
told media the business had been crushed by the supermarket wars,
unable to increase biscuit prices even as ingredient costs
soared.
The Australian relates that Paul and Michael Quinn face the
largest claims, of AUD7.3 million each, because they were Unibic
directors for the longest period -- from the company's
establishment in 1992 through to its collapse.
Their father, Brian Quinn, served 2-1/2 years' jail for fraud in
the late 1990s after spending AUD4.5m of Coles Myer shareholders'
money on renovations at his home in the Melbourne suburb of
Templestowe, including on a tennis court, cricket pitch and spa
room, The Australian says.
According to the report, Unibic's liquidators demand AUD3.29
million from Mr. Phillips, a Unibic director from mid-December
2007 until late March 2011, and AUD3.1m from Mr. Bernecker, who
joined at the same time and served until the end of November
2010.
About AUD2.53m is sought from Mr. Waugh, who became a director at
the start of September 2010 and stepped down in March 2011.
In an affidavit, Mr. Franklin said demands for the money were
sent to the defendants on March 9 but no payment had yet been
received, the report relays.
He told The Weekend Australian the amounts sought were "separate
claims and you can't technically add them up for a total amount".
"These claims have been calculated and represent the sum of the
increase in the debts incurred by the company (when the company
was insolvent) for the relevant period where each defendant was a
director," the report quotes Mr. Franklin as saying.
The Australian adds that Paul Quinn said he and his brother were
"aware of the proceedings and will be vigorously contesting, as
the claim is unfounded".
Mr. Bernecker declined to comment and asked The Weekend
Australian to contact his lawyer, Paul Reidy of Johnson Winter &
Slattery.
Mr. Reidy, who also represents Mr. Phillips and Mr. Waugh, did
not respond to requests for comment, adds The Australian.
Unibic Australia Pty. Ltd. manufactures and supplies biscuits,
cakes, cookies, pastries, and shortbreads to supermarkets in
Australia, the United Kingdom, South East Asia, New Zealand,
Canada, and the United States. It also sells ANZAC biscuits in
India.
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C H I N A
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DR PENG: Moody's Assigns (P)Ba2 Rating to Proposed Sr. Notes
------------------------------------------------------------
Moody's Investors Service has assigned a provisional (P)Ba2
rating to the senior notes to be issued by Dr. Peng Holding
Hongkong Limited, and guaranteed by Dr. Peng Telecom & Media
Group Co., Ltd. (Dr. Peng, Ba2 stable).
The ratings outlook is stable.
The proceeds from the proposed note issuance will be used for
overseas investments and other general corporate purposes.
The provisional status of the note rating will be removed once
the note issuance is completed upon satisfactory terms and
conditions, including proper registration of the notes and
guarantee with the National Development and Reform Commission and
the State Administration of Foreign Exchange in China (Aa3
negative).
RATINGS RATIONALE
"The proposed notes will support Dr. Peng's growth plans in the
telecommunication sector in China and enhance its financial
flexibility, which in turn will support its overseas expansion,"
says Lina Choi, a Moody's Vice President and Senior Credit
Officer.
Moody's expects Dr. Peng to raise debt to fund its investments
and capital expenditures in 2017. The proposed notes will not
change Moody's expectation that the company's debt leverage will
remain around 2x over the next 12 to 18 months. This level of
leverage supports the company's Ba2 corporate family rating.
Dr. Peng's Ba2 corporate family rating reflects the company's:
(1) ownership of a last mile broadband network; (2) steadily
growing and predictable revenue and cash flow from its broadband
internet services; (3) early entrant advantage and established
network coverage; (4) solid financial profile, providing it with
a buffer against execution risks; and (5) diversified funding
sources.
However, the rating is constrained by the challenges that Dr.
Peng faces in: (1) competing against well-sourced and large-sized
rivals in a market with regulatory risks; and (2) expanding into
overseas markets and into lower margin businesses, which heighten
execution risks.
The stable outlook reflects Moody's expectation that the company
will: (1) grow its revenue and cash flow steadily and achieve its
business targets; (2) preserve its solid financial profile and
good liquidity; and (3) be prudent in executing its overseas
expansion strategy and meet its capital requirements through
balancing its diversified funding sources.
Positive rating pressure could emerge if the company: (1)
achieves its growth targets and maintains its operating margin
above 12%-15%; (2) strengthens its scale and position in China's
broadband internet access market, as measured by a subscriber
share of over 10%-15%; (3) maintains a strong financial profile,
as reflected by adjusted debt/EBITDA of 1.5x-2.0x and positive
free cash flow generation, all on a sustained basis.
On the other hand downward rating pressure could arise if the
company: (1) shows weakening revenue and cash flow growth; (2)
encounters material adverse regulatory changes that weaken its
business model and market share; (3) undertakes an aggressive
dividend policy or acquisitions which weaken its balance sheet
liquidity; and/or (4) shows weakening credit metrics, with
adjusted debt/ EBITDA above 3.0x and negative free cash flow over
a prolonged period.
The principal methodology used in these ratings was
Telecommunications Service Providers published in January 2017.
Dr. Peng Telecom & Media Group Co., Ltd. is the fourth-largest
telecom operator and the largest private telecom operator in
China, offering broadband internet access and application
services across 26 provinces and 211 cities.
Headquartered in Beijing, Dr. Peng Telecom & Media Group Co.,
Ltd. was founded in 1985 and listed on the Shanghai Stock
Exchange (600804.CH) in 1994. At end-2016, Chairman Yang Xue Ping
and President Lu Liu together held an approximate 20% stake in
the company.
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H O N G K O N G
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NANYANG COMMERCIAL: Moody's Rates Proposed USD Securities at Ba2
----------------------------------------------------------------
Moody's Investors Service has assigned a Ba2(hyb) rating to
Nanyang Commercial Bank, Ltd.'s (NCB) (deposits A3 stable, BCA
baa2) proposed USD-denominated, perpetual, non-cumulative and
subordinated Additional Tier 1 (AT1) capital securities.
The terms and conditions of the notes incorporate Basel III-
compliant non-viability language in accordance with Hong Kong
capital rules, and will qualify as regulatory AT1 capital
securities.
The rating is subject to the receipt of final documentation, the
terms and conditions of which are not expected to change in any
material way from the draft documents that Moody's has reviewed.
RATINGS RATIONALE
The Ba2(hyb) rating is positioned three notches below the bank's
Adjusted baseline credit assessment (BCA) of baa2, in accordance
with Moody's standard notching guidance for preferred securities
with loss triggered at the point of non-viability on a
contractual basis.
The three-notch difference from the Adjusted BCA reflects the
probability of impairment associated with noncumulative coupon
suspension, as well as the likelihood of high loss severity when
the bank reaches the point of non-viability.
Under the terms and conditions, the principal and any accrued but
unpaid distribution on these capital securities would be written
down, partially or in full, in the event that the Hong Kong
Monetary Authority notifies the bank that without such write-off,
the bank would become non-viable, or if the relevant government
body, government officer or regulatory body decides to make a
public sector injection of capital without which the bank would
become nonviable.
And, the amount of write-off has to be sufficient to ensure that
the non-viability event ceases to continue.
In addition, to be classified as AT1 capital, NCB, as a going
concern, may choose not to pay distributions on a non-cumulative
basis. As such, the distributions on these capital securities are
fully discretionary. However, a common share dividend stopper
applies if a distribution is missed.
These securities are senior to common shareholders, but junior to
all depositors, general creditors, senior debt and subordinated
debt holders.
The bank's standalone credit assessment reflects its satisfactory
asset quality metrics, strong capital adequacy and sound
liquidity. Its BCA also takes in to account the bank's relatively
faster growth and growing exposure to Mainland China.
The bank's long-term deposit ratings of A3 incorporate two
notches of government support uplift, and reflect Moody's
expectation of a very high likelihood that indirect support to
the bank from the Chinese government (Aa3 negative) would flow
through its parent.
Nanyang Commercial Bank, Ltd.'s ratings are:
- Long-term/short-term deposits ratings: A3/P-2
- Non-cumulative preferred stock: Ba2(hyb)
- Counterparty Risk Assessment: A2(cr)/P-1(cr)
- Baseline credit assessment: baa2
- Adjusted baseline credit assessment: baa2
The outlook on the bank's deposit ratings is stable.
What could change the ratings up/down
The rating of the capital securities could be upgraded if NCB's
BCA is adjusted upwards. And, if the bank maintains strong
capitalization and sound asset quality, while improving its
franchise and market position, its standalone assessment may be
upgraded.
Downward pressure on the rating of this instrument could
materialize if NCB's BCA were adjusted downwards. The bank's BCA
could experience downward pressure as a result of: 1) a
substantial decrease in its core capital, associated with strong
asset growth and/or higher-than-expected credit costs; 2) a
significant deterioration in the bank's asset quality metrics;
and/or 3) difficulties arising from the integration process,
especially with regards to risk management changes and cost
controls.
The principal methodology used in this rating was Banks published
in January 2016.
Nanyang Commercial Bank, Ltd., headquartered in Hong Kong, held
total assets of HKD349 billion at end-2016.
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I N D I A
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ASHOK BRICKS: CRISIL Lowers Rating on INR10MM Cash Loan to 'B'
--------------------------------------------------------------
CRISIL has been consistently following up with Ashok Bricks
Industries Private Limited (ABIPL) for obtaining information
through letters and emails dated January 19, 2017, and
February 9, 2017, among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 20 CRISIL A4 (Issuer Not
Cooperating; Downgraded
from CRISIL A4+)
Cash Credit 10 CRISIL B/Stable (Issuer
Not Cooperating; Downgraded
from CRISIL BB/Stable)
Proposed Cash .03 CRISIL B/Stable (Issuer
Credit Limit Not Cooperating; Downgraded
from CRISIL BB/Stable)
Standby Letter of 1.50 CRISIL B/Stable (Issuer
Credit Not Cooperating; Downgraded
from CRISIL BB/Stable)
Term Loan 0.47 CRISIL B/Stable (Issuer Not
Cooperating; Downgraded
from CRISIL BB/Stable)
'The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of Ashok Bricks Industries
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 Ashok Bricks
Industries 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.
ABIPL was formed as a partnership firm in 1992, between Orissa
based, Mr. Pramod Agarwal and his brother Mr. Ashok Agarwal, to
manufacture red bricks used in construction industry. The firm
was reconstituted as Ashok Bricks Industries Pvt. Ltd. (ABIPL), a
private limited company, in the year 2000 and entered the
business of road construction.
BASUDEB ENGINEERING: CRISIL Cuts Rating on INR10MM Loan to B
------------------------------------------------------------
CRISIL has been consistently following up with Basudeb
Engineering Enterprises Limited (BEEL) 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
---------- --------- -------
Cash Credit 10 CRISIL B/Stable (Issuer Not
Cooperating; Downgraded from
'CRISIL BB/Stable')
'The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of Basudeb Engineering
Enterprises 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 Basudeb Engineering
Enterprises 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.
BEEL, incorporated in 1996 and promoted by members of the Ranchi-
based Kataruka family, commenced operations in February 2013. It
is an authorised dealer of HCIL's passenger vehicles in Ranchi,
where it has a showroom and workshop.
BRAHMA REFRACTORIES: CRISIL Reaffirms B Rating on INR6.25MM Loan
----------------------------------------------------------------
CRISIL has been consistently following up with Brahma
Refractories Private Limited (BRPL) for obtaining information
through letters and emails dated January 24, 2017, and
February 13, 2017, among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 2 CRISIL A4 (Issuer Not
Cooperating; Rating
Reaffirmed)
Cash Credit 6.25 CRISIL B/Stable (Issuer
Not Cooperating;
Downgraded from
CRISIL B+/Stable)
Proposed Non Fund 0.63 CRISIL A4 (Issuer Not
based limits 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 Brahma Refractories 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 Brahma Refractories 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.
BRPL, incorporated in 2005 by Mr. Surendra Kumar Sinha,
manufactures refractory bricks, refractory mortars, and
highalumina castables. It is based in Dhanbad (Jharkhand).
CJ'S HARITHA: CRISIL Assigns 'B' Rating to INR21.78MM Term Loan
---------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable' rating to the long-term
bank facilities of CJ'S Haritha Homes (CJS). The rating reflects
susceptibility to risks related to completion & saleability of
the ongoing residential real estate project in Kottayam, Kerala,
and to cyclicality in the Indian real estate industry and
economic cycles. These rating weakness are partially offset by
the extensive experience of the promoters in the Kottayam real
estate industry.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term
Bank Loan Facility 13.22 CRISIL B/Stable
Term Loan 21.78 CRISIL B/Stable
Key Rating Drivers & Detailed Description
Weakness
* Susceptibility to risks related to completion and saleability
of the ongoing project:
Currently, about 60% of the ongoing project is complete. Bookings
for 132 (56%) out of a total 237 flats have been received.
Booking rates are expected to remain low compared with the
construction status due to cyclicality in the real estate market
and demonetisation.
* Exposure to risks relating to cyclicality in the Indian real
estate industry:
The real estate sector in India is cyclical and marked by
volatile prices, opaque transactions, and a highly fragmented
market structure. The execution of real estate projects in India
is affected by multiple property laws and non-standardised
government regulations across the states. The risk is compounded
by aggressive timelines for completion with shortage of man power
(project engineers and skilled labour) in this sector. The recent
slowdown in the real estate sector has delayed the execution and
saleability of several ongoing projects. With the increase in
supply, and attractive prices offered by various builders and
constant regulatory changes, the profitability of various real
estate players is expected to come under pressure over the medium
term. Also, the continuous changes in fiscal and monetary
measures will cause a variation in interest rates, impacting the
demand for housing loans. The firm will remain susceptible to
risks relating to cyclicality in the Indian real estate industry.
Strengths
* Extensive industry experience of the promoters:
The promoters have, till date, executed four projects in Kottayam
with an aggregate built up area of about 1,25,000 square foot.
Currently, the firm is executing four residential real estate
projects with an aggregate built up area of over 3,33,675 square
foot. The firm would continue to benefit from the extensive
experience of its promoters in the residential real estate
segment.
Outlook: Stable
CRISIL believes that CJS will continue to benefit from the
extensive industry experience of its promoters. The outlook may
be revised to 'Positive' in case of a substantial increase in
cash flow, driven most likely by early completion of the ongoing
project and faster realisation of advances from residential
properties. The outlook may be revised to 'Negative' in case of a
delay in completion of the ongoing project or in receipt of
payments from customers, or inability to sell the project at
profitable rates.
Established in 2010, CJS is a Kottayam-based residential real
estate developer, promoted by Mr. D Kumar and his wife Mrs Sreeja
Kumar. Prior to setting up of CJS, the promoters were engaged in
civil construction, primarily commercial buildings and shopping
malls, under their group firm, CJS Constructions.
CKOMPAX METATECH: CRISIL Reaffirms 'B' Rating on INR30MM Loan
-------------------------------------------------------------
CRISIL has reaffirmed its rating on the long-term bank facilities
of Ckompax Metatech Private Limited (CMPL) at 'CRISIL B/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 30 CRISIL B/Stable (Reaffirmed)
Proposed Working
Capital Facility 20 CRISIL B/Stable (Reaffirmed)
In January 2017, CRISIL had assigned 'CRISIL B/Stable' rating on
the long-term bank facility of CMPL.
The rating continues to reflect the company's modest scale of
operations in the fragmented sugar trading industry and
susceptibility of operating margin to volatility in sugar prices.
These weaknesses are partially offset by the extensive experience
of its promoters and established relationship with principals and
customers.
Key Rating Drivers & Detailed Description
Weakness
* Modest scale of operations: Since trading operations began from
February 2017, revenue was small at INR53 crore in fiscal 2017.
However, it is expected to be INR500 crore for fiscal 2018.
* Susceptibility of operating margin to volatility in sugar
prices and adverse regulatory changes: An erratic monsoon can
adversely affect sugarcane yields, which can lead to significant
volatility in sugar prices, thereby affecting profitability of
sugar mills and trading players such as CMPL. Also, as sugar is
an essential commodity under the Essential Commodity Act, its
prices are regulated and kept under control.
Strengths
* Experience of promoters and established relationship with
suppliers: The promoters have been in the sugar trading industry
for about a decade, leading to established relationship with
suppliers.
Outlook: Stable
CRISIL believes CMPL will maintain a stable business risk profile
over the medium term. The outlook may be revised to 'Positive' if
substantial and sustained increase in operating income and cash
accrual, along with efficient working capital management
strengthens financial risk profile. The outlook may be revised to
'Negative' if lower-than-expected operating income or cash
accrual or stretched working capital cycle weakens liquidity.
Incorporated in October 2011 and promoted by Zaveri family, CMPL
was acquired in July 2016 by its current promoters, Mr. Atul
Kshirsagar and Mr. Sachin Singare. Since then, the company
changed its operations from lock assembly to sugar and ethanol
trading.
For fiscal 2016, CMPL's profit after tax (PAT) was INR0.03 crore
on net sales of INR0.06 crore. The estimated PAT was INR0.19 cr.
on net sales of INR53.36 cr. for fiscal 2017.
GAJRAJ FLOUR: CRISIL Lowers Rating on INR10MM Cash Loan to 'B'
--------------------------------------------------------------
CRISIL has been consistently following up with Gajraj Flour Mill
(GFM) for obtaining information through letters and emails dated
January 24, 2017, and February 13, 2017, among others, apart from
telephonic communication. However, the issuer has remained non
cooperative.
'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.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 10 CRISIL B/Stable (Issuer Not
Cooperating; Downgraded from
'CRISIL BB-/Stable')
Proposed Long Term 10 CRISIL B/Stable (Issuer Not
Bank Loan Facility Cooperating; Downgraded from
'CRISIL BB-/Stable')
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 Gajraj Flour Mill. This
restricts CRISIL's ability to take a forward looking view on the
credit quality of the entity. CRISIL believes that the
information available for Gajraj Flour Mill is consistent with
'Scenario 1' outlined in the 'Framework for Assessing Consistency
of Information with CRISIL B rating category or lower.' Based on
the last available information, CRISIL has downgraded the rating
to CRISIL B/Stable.
GFM was set up in 1997 as a proprietorship firm by Delhi based
Ms. Sunita Sharma. The firm manufactures wheat flour and trades
in wheat. Its manufacturing facility is located in Najafgarh (New
Delhi). The firm is actively managed by Mr. Bhagirath Lal and his
wife, Ms. Sunita Sharma.
GAYATRI MICRONS: CRISIL Lowers Rating on INR6.08MM Term Loan to B
-----------------------------------------------------------------
CRISIL has been consistently following up with Gayatri Microns
Limited (GML) for obtaining information through letters and
emails dated January 24, 2017, and February 13, 2017, among
others, apart from telephonic communication. However, the issuer
has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 4.92 CRISIL B/Stable (Issuer Not
Cooperating; Downgraded
from 'CRISIL B+/Stable')
Term Loan 6.08 CRISIL B/Stable (Issuer Not
Cooperating; Downgraded
from 'CRISIL B+/Stable')
'The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of Gayatri Microns 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 Gayatri Microns 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.
GML was originally incorporated as Gayatri Microns Pvt Ltd on
February 25, 1998; the company was reconstituted as a limited
company with the current name on April 11, 2003. The company is
promoted by Mr. Rashminbhai Mohanbhai Patel and family. The
company manufactures micronised minerals and is setting up
additional facility with total capacity of 12,000 MTPA.
GEETA ENTERPRISES: CRISIL Cuts Rating on INR2.5MM Cash Loan to B
----------------------------------------------------------------
CRISIL has been consistently following up with Geeta Enterprises
Private Limited (GEPL) for obtaining information through letters
and emails dated January 24, 2017, and February 13, 2017, among
others, apart from telephonic communication. However, the issuer
has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 2.5 CRISIL B/Stable (Issuer Not
Cooperating; Downgraded
from 'CRISIL B+/Stable')
Letter of Credit 10.0 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 Geeta Enterprises 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 Geeta Enterprises 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.
GEPL was incorporated in November 1993, but started operations
from 2011-12 (refers to financial year, April 1 to March 31). The
company undertakes high-sea timber trading. Mr. Vijendra Gupta
and Mr. Jai Gopal handle operations. They have an experience of
more than a decade through group concern, Jai Gopal International
Import Pvt Ltd (JGIIPL), which processes and trades in timber.
JGIIPL had sales of INR1210 million in 2014-15.
GNB MOTORS: CRISIL Downgrades Rating on INR7.5MM Loan to 'B'
------------------------------------------------------------
CRISIL has been consistently following up with GNB Motors Private
Limited (GNB) for obtaining information through letters and
emails dated January 24, 2017, and February 13, 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; Downgraded
from CRISIL BB-/Stable)
Channel Financing 7.5 CRISIL B/Stable (Issuer Not
Cooperating; Downgraded
from CRISIL BB-/Stable)
Proposed Fund- 2.1 CRISIL B/Stable (Issuer Not
Based Bank Limits 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 GNB Motors 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 GNB Motors 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.
GNB was incorporated in Kolkata (West Bengal) in 1980. The
company is an authorised dealer for CVs of Ashok Leyland Ltd and
three-wheelers of Piaggio Ltd in the state. In 2010, GNB
commenced sales and servicing of Doosan India (P) Ltd's heavy
earth moving machines and inter-solvent compressors. Promoter Mr.
Pawan Kumar Todi manages GNB's operations.
GUPTA INFOTECH: CRISIL Lowers Rating on INR9MM Loan to 'B'
----------------------------------------------------------
CRISIL has been consistently following up with Gupta Infotech
(GI) for obtaining information through letters and emails dated
January 24, 2017, and February 13, 2017, among others, apart from
telephonic communication. However, the issuer has remained non
cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bill Discounting 9 CRISIL B/Stable (Issuer
Not Cooperating; Downgraded
from 'CRISIL B+/Stable')
Cash Credit 3 CRISIL B/Stable (Issuer Not
Cooperating; Downgraded
from 'CRISIL B+/Stable')
Cash Credit/ 2 CRISIL B/Stable (Issuer Not
Overdraft facility Cooperating; Downgraded
from 'CRISIL B+/Stable')
Import Letter of 3 CRISIL A4 (Issuer Not
Credit Limit Cooperating; Rating
Reaffirmed)
Letter of Credit .05 CRISIL A4 (Issuer Not
Cooperating; Rating
Reaffirmed)
Proposed Long Term 6.95 CRISIL B/Stable (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 Gupta Infotech. 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 Gupta Infotech 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.
GI, a proprietorship firm, was set up in 2003 by Mr. Saurabh
Gupta as compact fluorescent lamps (CFL) manufacturing unit. The
firm has also recently diversified into the manufacture and sale
of light-emitting diodes (LED).
GURANDITTA MAL: CRISIL Cuts Rating on INR17MM Cash Loan to 'B'
--------------------------------------------------------------
CRISIL has been consistently following up with Guranditta Mal
Mohan Lal (GMML) for obtaining information through letters and
emails dated January 24, 2017, and February 13, 2017, among
others, apart from telephonic communication. However, the issuer
has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 17 CRISIL B/Stable (Issuer Not
Cooperating; Downgraded
from 'CRISIL BB-/Stable')
'The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of Guranditta Mal Mohan Lal. 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 Guranditta Mal Mohan Lal 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.
GMML was set up as a partnership firm in 1978. The firm is being
managed by Mr. Roshan Lal and Mr. Adarsh Kumar. It primarily
processes basmati and non-basmati rice. Its production facilities
are in Fazilka (Punjab), with a milling and sorting capacity of
around 4 tonnes per hour, which is utilised at around 90 percent.
HANSRAJ AGROFRESH: CRISIL Cuts Rating on INR3.46MM Loan to 'B'
--------------------------------------------------------------
CRISIL has been consistently following up with Hansraj Agrofresh
Private Limited (HAFPL) for obtaining information through letters
and emails dated January 24, 2017, and February 13, 2017, among
others, apart from telephonic communication. However, the issuer
has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 2.01 CRISIL B/Stable (Issuer
Not Cooperating; Downgraded
from 'CRISIL B+/Stable')
Long Term Loan 3.46 CRISIL B/Stable (Issuer
Not Cooperating; Downgraded
from 'CRISIL B+/Stable')
'The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of Hansraj Agrofresh 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 Hansraj Agrofresh 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.
HAFPL, a private limited company incorporated in August 2014,
manufactures fruit juice under its Hansraj brand. HAFPL's
registered office is in Varanasi, Uttar Pradesh, and
manufacturing unit is in Jalpaiguri, West Bengal.
HANUMAN ALLOYS: CRISIL Reaffirms B Rating on INR10.75MM Loan
------------------------------------------------------------
CRISIL has been consistently following up with Hanuman Alloys
Private Limited (HAPL) for obtaining information through letters
and emails dated January 24, 2017, and February 13, 2017, among
others, apart from telephonic communication. However, the issuer
has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 2.91 CRISIL A4 (Issuer Not
Cooperating; Rating
Reaffirmed)
Cash Credit 10.75 CRISIL B/Stable (Issuer Not
Cooperating; Rating
Reaffirmed)
Letter of Credit 0.97 CRISIL A4 (Issuer Not
Cooperating; Rating
Reaffirmed)
Proposed Cash 6.87 CRISIL B/Stable (Issuer Not
Credit Limit Cooperating; Rating
Reaffirmed)
Proposed Fund- 3.50 CRISIL B/Stable (Issuer Not
Based Bank Limits 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 Hanuman Alloys 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 Hanuman Alloys 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 1996 and based in Kolkata, HAPL manufactures mild
steel ingots and thermo-mechanically treated bars. It is promoted
by Mr. Vijay Kumar Rai and his family members.
HIMALAYAN FLOUR: CRISIL Lowers Rating on INR6MM Cash Loan to B
--------------------------------------------------------------
CRISIL has been consistently following up with Himalayan Flour
Mill Private Limited (HFMPL) for obtaining information through
letters and emails dated January 24, 2017, and February 13, 2017,
among others, apart from telephonic communication. However, the
issuer has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 1 CRISIL A4 (Issuer Not
Co-operating; Downgraded
from 'CRISIL A4+')
Cash Credit 6 CRISIL B/Stable (Issuer
Not Co-operating; Downgraded
from 'CRISIL BB/Stable')
Proposed Bank 2 CRISIL B/Stable (Issuer
Guarantee Not Co-operating; Downgraded
from 'CRISIL BB/Stable')
Proposed Cash 1 CRISIL B/Stable (Issuer
Credit Limit Not Co-operating; 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 Himalayan Flour Mill 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 Himalayan Flour Mill 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.
HFMPL, incorporated in 2007, manufactures wheat-based products
such as atta, maida, suji, and bran. Its manufacturing unit is in
Siliguri, West Bengal, and has installed capacity of around 225
tonnes per day. Mr. Surendra Kumar Shah, Mr. Vinod Kumar Goyal,
Mr. Sharda Goyal and Mr. Sanjeev Kumar Agarwal are the directors
of the company. The operations are however primarily managed by
Mr. Vinod Kumar Goyal.
INSTYLE EMBROIDERIES: CRISIL Cuts Rating on INR7.35MM Loan to B
---------------------------------------------------------------
CRISIL has been consistently following up with Instyle
Embroideries Private Limited (IEPL) for obtaining information
through letters and emails dated January 23, 2017, and
February 13, 2017, among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 1.25 CRISIL B/Stable (Issuer Not
Cooperating; Downgraded from
'CRISIL BB-/Stable')
Proposed Long Term 3.40 CRISIL B/Stable (Issuer Not
Bank Loan Facility Cooperating; Downgraded from
'CRISIL BB-/Stable')
Term Loan 7.35 CRISIL B/Stable (Issuer Not
Cooperating; Downgraded from
'CRISIL BB-/Stable')
'The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of Instyle Embroideries 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 Instyle Embroideries 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.
Incorporated in 1998, IEPL undertakes fabric embroidery on a job-
work basis for garment manufacturers. The company is promoted by
Mr. Sanjeev Jindal, Mr. Jitender Bansal, and Mr. Vipin Mehta. Its
production facility is in Manesar (Haryana) while the marketing
office is in Okhla (Delhi).
KANCHESHWAR SUGAR: CRISIL Cuts Rating on INR50MM Loan to 'D'
------------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facilities
of Kancheshwar Sugar Ltd (KSL) to 'CRISIL D' from 'CRISIL
B/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Pledge Loan 50 CRISIL D (Downgraded
from 'CRISIL B/Stable')
Term Loan 23 CRISIL D (Downgraded
from 'CRISIL B/Stable')
Working Capital 20 CRISIL D (Downgraded
Term Loan from 'CRISIL B/Stable')
The downgrade reflects recent delays in servicing term debt owing
to stretched liquidity.
Due to lower availability of sugarcane, KSL was not operational
during sugar season 2016-17, against 94 days during sugar season
2015-16. Consequently, operating revenue declined to INR43.9
crore in fiscal 2017 from INR90.4 cr ore of previous year. The
company continued to incur estimated losses of INR12.08 crore
during fiscal 2017.
Key Rating Drivers & Detailed Description
Weakness
* Delays in servicing term debt due to weak liquidity: KSL
recently delayed servicing term debt due to stretched liquidity.
Liquidity is weak because of large working capital requirement,
reflected in gross current assets of 219 days as on March 31,
2017, due to sizeable inventory of 158 days. Large debt of more
than INR6 crore over the next two years is also likely to
adversely affect liquidity.
* Below-average financial risk profile: Large working capital
debt has led to high gearing, which is likely to remain leveraged
over the medium term.
* Susceptibility to cyclicality in, and regulatory framework of,
the sugar industry: The sugar industry is highly regulated and is
also exposed to risks related to seasonality in sugarcane
production. These factors can affect scale of operations and
margins.
Strengths
* Extensive experience of promoter: The promoters have been in
the sugar industry for more than a decade. KSL will continue to
benefit over the medium term from its promoters' extensive
experience.
Incorporated in 2011 and promoted by Mr. Dilip Mane, Mr.
Ashwinkumar Bhopale, and Mr. Pravin More, among others, KSL began
operations from fiscal 2015 and manufactures sugar at its plant
in Mangrul, Maharashtra. The unit has installed capacity of 3500
tonne crushing per day. KSL also has a 15 megawatt co-generation
power plant.
For fiscal 2016, KSL reported net loss of INR23.57 crore on total
operating income of INR90.42 crore. The estimated net loss is
INR12.08 crore on total operating income of INR43.81 crore for
fiscal 2017.
KRISHNA COTTON: CRISIL Ups Rating on INR14MM Cash Loan to BB-
-------------------------------------------------------------
CRISIL has upgraded its rating on the long-term bank facility of
Krishna Cotton Company (KCC; part of the Geeta group) to 'CRISIL
BB-/Stable' from 'CRISIL B+/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 14 CRISIL BB-/Stable (Upgraded
from 'CRISIL B+/Stable')
Proposed Long Term 5.9 CRISIL BB-/Stable (Upgraded
Bank Loan Facility from 'CRISIL B+/Stable')
The rating upgrade reflects CRISIL's belief that Geeta group's
liquidity will improve over the medium term on account of absence
of any long term debt obligations and large debt funded capex
plans. Geeta group is expected to report steady revenue growth of
5 to 7 percent and stable operating margins in the range of 3.8
to 4.0 per cent over the medium term. Liquidity is further
supported by timely need-based fund support extended by the
promoters of INR7 crores during the 3 years ended fiscal 2016
which are treated as debt. Absence of debt-funded capital
expenditure (capex) plans and demonstrated financial flexibility
of the promoters will support the group's liquidity profile over
the medium term.
The rating reflects the extensive experience of the promoters in
the cotton ginning industry, proximity to a cotton growing region
and its established customer and supplier relationships. These
rating strengths are partially offset and exposure to intense
competition, to raw material price volatility and modest
financial risk profile.
Key Rating Drivers & Detailed Description
Strengths
* Extensive industry experience of the partners: The promoters
have been active in the cotton industry for more than two
decades. This has helped them to understand local market dynamics
and establish relationships with farmers and customers.
* Proximity to the cotton growing-belt in Telangana: The
production facility is close to Telangana's cotton-growing belt,
resulting in easy availability of raw cotton directly from
farmers.
Weaknesses
* Susceptibility to volatility in cotton prices: Cotton prices
are highly volatile as cotton yield depends on the monsoon. The
group is unable to pass on any increase in cotton prices to
customers because of intense competition.
* Modest financial risk profile: Financial risk profile remains
modest, with high gearing and below-average debt protection
metrics.
Outlook: Stable
CRISIL believes Geeta group will continue to benefit over the
medium term from its promoters' extensive experience and its
proximity to Telangana's cotton-growing belt. The outlook may be
revised to 'Positive' in case of sustained and significant
improvement in scale of operations and profitability, leading to
higher accrual, while efficient working capital management
improves capital structure. The outlook may be revised to
'Negative' if the financial risk profile or liquidity weakens,
most likely because of a decline in profitability, a stretch in
working capital requirement, or large, debt-funded capital
expenditure
GCC was originally set up as a proprietorship firm in 1983 by Mr.
K Nagnath Patel; this firm was reconstituted as a private limited
company in 2013. KCC was set up as a proprietorship concern by
Mr. Patel in 2006. Both the entities primarily undertake ginning
and pressing of raw cotton. The group also has crushing units to
extract de-oiled cake and oil from cotton seeds. The
manufacturing facilities of both the entities are in Bhainsa,
Telangana.
Loss was INR0.2 Cr on operating income of INR180 Cr in fiscal
2016, vis-a-vis Profit after tax (PAT) of INR0.04 Cr on operating
income of INR140 Cr in fiscal 2015.
L. MADANLAL: Ind-Ra Affirms BB- Long-Term Issuer Rating
-------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed L.Madanlal
(Aluminium) Ltd' (LMAL) Long-Term Issuer Rating at 'IND BB-'.
The Outlook is Stable. Instrument-wise rating action is:
-- INR60 mil. Fund-based limits affirmed with
'IND BB-/Stable/IND A4+' rating;
KEY RATING DRIVERS
The affirmation reflects LMAL's continued small scale of
operations and moderate credit metrics. As per provisional
financials for FY17, revenue declined to INR467 million (FY16:
INR619 million; FY15: INR347 million) on account of low work
orders from customers. Gross interest coverage (operating
EBITDA/gross interest expense improved to 2.4x in FY17P (FY16:
1.4x; FY15: 1.5x) and net financial leverage (total adjusted net
debt/operating EBITDAR to 5.3x (5.6x; 4.1x) owing to an
improvement in operating margin to 4.5% (1.8%; 1.5%), driven by a
decrease in raw material cost.
However, the ratings are supported by the company's comfortable
liquidity position as reflected by 62.98% maximum average use of
fund-based limits during the six months ended March 2017.
The ratings continue to benefit from LMAL's founders five decades
of experience in the manufacturing of aluminum products.
RATING SENSITIVITIES
Positive: An improvement in the overall credit metrics would lead
to a positive rating action.
Negative: Deterioration in the overall credit metrics would lead
to a negative rating action.
COMPANY PROFILE
LMAL was formed in 1953 as a partnership firm in the name of
Lachhminarain Madanlal. It was converted into a closely held
limited company in 1967. The company imports, manufactures and
supplies aluminium utensils, aluminium notch bar, aluminium
wire, aluminium ingot, aluminium shots, aluminium cubes, among
others. The main raw material aluminium scrap is purchased from
Malaysia, Indonesia etc.
The company's head office is situated in Camac Street, Kolkata
and its production unit is situated in Belur, Howrah.
MAXTAR BIO: CRISIL Lowers Rating on INR12MM Cash Loan to 'B'
------------------------------------------------------------
CRISIL has been consistently following up with Maxtar Bio -
Genics (MBG) for obtaining information through letters and emails
dated January 23, 2017, and February 13, 2017, among others,
apart from telephonic communication. However, the issuer has
remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 12 CRISIL B/Stable (Issuer Not
Cooperating; Downgraded from
'CRISIL BB/Negative')
'The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of Maxtar Bio - Genics. 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 Maxtar Bio - Genics 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.
MBG, a partnership firm, was established in 2007 by Mr. Madan Lal
Bansal and Mr. Jagdish Bansal. The firm manufactures and exports
various allopathic over-the-counter (OTC) drugs such as
paracetamol, amoxicillin, and ibuprofen, which it sells under its
own brand name in both the domestic and global markets. It
exports to Cameroon, Cambodia, Sri Lanka, Nigeria, Vietnam,
Philippines, and other countries.
MOHAMMED ENTERPRISES: CRISIL Reaffirms B+ Rating on INR52.1M Loan
-----------------------------------------------------------------
CRISIL has reaffirmed its rating on the long term bank facility
of Mohammed Enterprises Private Limited (MEPL) at 'CRISIL
B+/Stable'
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 52.1 CRISIL B+/Stable (Reaffirmed)
The rating continues to reflect the company's large working
capital requirement, susceptibility of its profitability margins
to volatility in tobacco prices and to fluctuations in foreign
exchange rates. The ratings also reflect a weak financial risk
profile marked by modest net worth, high total outside
liabilities to tangible net worth ratio (TOL/TNW), and weak debt
protection metrics. These rating weaknesses are partially offset
by the benefits that MEPL derives from its promoters' extensive
industry experience in the tobacco industry and its established
relations with customers.
Key Rating Drivers & Detailed Description
Weakness
* Working capital intensive operations:
MEPL's operations are working capital intensive as reflected in
gross current assets (GCA) of 202 days estimated as on March 31
2017. High GCAs are on account of high inventory level, ranging
from 3-4 months, and a credit period from 1-2 months extended to
its customers.
* Susceptibility of its profitability margins to volatility in
tobacco prices and to fluctuations in foreign exchange rates
Tobacco prices depend upon factors such as acreage under
cultivation and yield in crop season and hence are volatile. The
company maintains a tobacco inventory of around 3-4 months, which
exposes its operating margin to the risk of any significant fall
in its prices. Furthermore, Around 20% of MEPL's total revenue
comes from direct exports which exposes the company's
profitability margins to volatility in foreign exchange rates.
* Weak financial risk profile:
Net worth is estimated to be modest at around INR19 crore as on
March 31 2017 with TOLTNW estimated at 4.6 times as on the same
date. Interest coverage ratio is estimated at 1.5 times for
fiscal 2017.
Strengths
* Promoters' extensive industry experience in the tobacco
industry and its established relations with customers and
suppliers:
Mr. Mohammed Mustafa, the managing director, and other working
directors of MEPL have about 26 years of experience in the
tobacco industry. This has helped the company develop healthy
relationships with customers in domestic and exports market.
Outlook: Stable
CRISIL believes MEPL will continue to benefit over the medium
term from its promoters' extensive industry experience and
established relationship with customers. The outlook may be
revised to 'Positive' if there is sustained improvement in
working capital management, coupled with a better-than-expected
improvement in its capital structure on the back of sizeable
equity infusion from its promoters. Conversely, the outlook may
be revised to 'Negative' in case of a steep decline in revenues
or profitability margins, or significant deterioration in its
liquidity profile caused most likely by a stretch in its working
capital cycle.
MEPL was originally set up as a proprietorship firm in 1985 by
Mr. Mohammed Mustafa Shaik and his family members; it was
reconstituted as a private limited company in 2000. The company,
based in the Guntur district of Andhra Pradesh, processes raw
tobacco.
MEPL reported profit after tax (PAT) of INR1.75 crore on revenue
of INR148.52 crore in fiscal 2016, against INR1.29 crore and
INR124.24 crore, respectively, in fiscal 2015.
PRUDENTIAL SUGAR: CRISIL Reaffirms 'C' Rating on INR20MM LT Loan
----------------------------------------------------------------
CRISIL has reaffirmed its 'CRISIL C' rating on the long-term bank
facilities of Prudential Sugar Corporation Ltd (PSCL). The rating
reflects instances of delays by PSCL in servicing its debt (loan
from Ashok Leyland Finance Ltd; not rated by CRISIL) owing to
weak liquidity. These rating weaknesses are partially offset by
its Promoters' extensive industry experience in the sugar
industry.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term
Bank Loan Facility 20 CRISIL C (Reaffirmed)
Key Rating Drivers & Detailed Description
Weakness
* Key Rating Drivers & Detailed Description
Delays in serving debt to Ashok Leyland Finance Ltd
PSCL entered into a settlement agreement with Ashok Leyland
Finance Ltd for INR28.52 lakhs payable in three installments. Out
of the said settlement amount, PSCL already paid sum of INR20
lakhs.
* Delay in redeemable preference share along with overdue
dividend.
PSCL issued cumulative redeemable preference shares to promoters
in fiscal 1996 redeemable on or before May 01, 2005 which is
pending redeemable. The liability up to March 31, 2016 stands at
INR66.01.87 lakhs (Previous Year INR5,634.99 lakhs) on account of
dividend.
Strengths
* Promoters' extensive industry experience in the sugar industry
PSCL benefits from the long standing entrepreneurial experience
of its promoters. The key promoters Mr. Vinod Kumar Baid and
associates have large entrepreneurial experience in diverse
sectors ranging from pharmaceuticals, education services to
agricultural commodities.
The company has sold off its assets pertaining to its sugar
business, and currently does not have any operations.
PSCL was set up in 1994 Mr. Vinod Kumar Baid and his associates.
The company manufactured sugar, and its by-products - molasses
and bagasse.
Net losses was INR17 crores on operating income of INR94 crore in
fiscal 2016, vis-a-vis INR2 crore and INR84 crore, respectively,
for fiscal 2015.
PUSHKAR PROPERTIES: CRISIL Cuts Rating on INR5.0MM Loan to 'B'
--------------------------------------------------------------
CRISIL has been consistently following up with Pushkar Properties
Private Limited (PPPL) for obtaining information through letters
and emails dated January 23, 2017, and February 13, 2017, among
others, apart from telephonic communication. However, the issuer
has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Overdraft 2.5 CRISIL B/Stable (Issuer
Not Cooperating; Downgraded
from CRISIL BB+/Stable)
Proposed Overdraft 2.5 CRISIL B/Stable (Issuer
Facility Not Cooperating; Downgraded
from CRISIL BB+/Stable)
Proposed Working 5.0 CRISIL B/Stable (Issuer
Capital Facility 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 Pushkar Properties 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 Pushkar Properties 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.
Incorporated in 2002, PPPL undertakes residential real estate
projects in Chennai. Operations are managed by its promoter, Mr.
P Kruthivas.
QUALITY INDUSTRIES: Ind-Ra Migrates BB+ Rating to Non-Cooperating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Quality
Industries' Long-Term Issuer Rating to the non-cooperating
category. The issuer did not participate in the surveillance
exercise, despite continuous requests and follow-ups by the
agency. Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will
now appear as 'IND BB+(ISSUER NOT COOPERATING)' on the agency's
website. The instrument-wise rating actions are:
-- INR3.33 mil. Term loan migrated to Non-Cooperating Category;
-- INR81.50 mil. Fund-based working capital limit migrated to
Non-Cooperating Category; and
-- INR150 mil. Non-fund-based working capital limit migrated to
Non-Cooperating Category
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
April 18, 2016. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Quality Industries commenced operations in 2008 and is a
partnership-based unit that manufactures consumer electronics
such as fans, clothing irons, heat convectors, immersion rods,
toasters, etc. at its plant in Solan, Himachal Pradesh.
RAJ RAJESHWARI: CRISIL Assigns 'B' Rating to INR15MM Term Loan
--------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable' rating to the long-term
bank facilities of Raj Rajeshwari Techno Fab Private Limited.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Cash Credit Limit 4 CRISIL B/Stable
Proposed Rupee Term Loan 15 CRISIL B/Stable
The rating reflects the company's modest scale of, and working
capital intensive, operations and significant investment in
associate company. These weaknesses are partially offset by the
extensive experience of its promoters in the textile industry and
moderate financial risk profile because of comfortable networth
and gearing.
Key Rating Drivers & Detailed Description
Weakness
* Modest scale of, and working capital-intensive, operations in
competitive industry: Intense competition in the textile segment
has constrained scale of operations (revenue was INR20 crore in
fiscal 2016 and is likely to be Rs50 crore in fiscal 2017). Also,
working capital requirement is large, reflected in gross current
assets of more than 162 days as on March 31, 2016, due to
stretched receivables and inventory.
* Significant investment in associate company: RRTPL has invested
INR14.25 crore (as of March 2016) in associate company, Shri
Lakshmi Cotsyn Ltd.
Strengths
* Extensive experience of promoters: Presence of around three
decades in the textile industry has enabled the promoters to
establish strong relationship with customers.
* Moderate financial risk profile: Networth is estimated to have
increased to INR14.9 crore as on Mach 31, 2017, from INR12.9
crore as on March 31, 2016. Gearing is estimated at 0.09 time.
Debt protection metrics are likely to be robust because of high
cash accrual, with net cash accrual to total debt and interest
coverage ratios of 2.10 time and 16.1 times, respectively, in
fiscal 2017.
Outlook: Stable
CRISIL believes RRTPL will benefit over the medium term from the
extensive experience of its promoters and established customer
relationship. The outlook may be revised to 'Positive' if
substantial increase in scale of operations and profitability
leads to better-than-expected cash accrual, or if working capital
cycle improves. The outlook may be revised to 'Negative' if
financial risk profile weakens due to further stretch in working
capital cycle, decline in revenue and profitability, or large,
debt-funded capital expenditure.
Incorporated in 2005 and promoted by Mr. Vikas Agarwal and his
wife, Ms. Barsha Agarwal, RRTPL manufactures zippers and fusibile
interlining used in garments, bags, and shoes. Unit is in
Roorkee, Uttarakhand.
Net profit was INR0.47 crore on net sales of INR20 crore in
fiscal 2016, vis-a-vis net losses of INR0.43 crore on net sales
of INR10 crore in fiscal 2015.
RUSHABH TRADING: CRISIL Cuts Rating on INR8MM Cash Loan to 'B'
--------------------------------------------------------------
CRISIL has been consistently following up with Rushabh Trading
Co. (RTC) for obtaining information through letters and emails
dated January 23, 2017, and February 13, 2017, among others,
apart from telephonic communication. However, the issuer has
remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 8 CRISIL B/Stable (Issuer Not
Cooperating; Downgraded
from 'CRISIL B+/Stable')
Proposed Long Term 4 CRISIL B/Stable (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 Rushabh Trading Co.. 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 Rushabh Trading Co. 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.
RTC was set up in 1983 by Mr. Premji Velji Karani and family. The
firm trades in basmati rice. It is headquartered in Mumbai, and
has a branch office in New Delhi.
SADASIVAPET MUNICIPALITY: Ind-Ra Assigns B+ Issuer Rating
---------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Sadasivapet
Municipality a Long-Term Issuer Rating of 'IND B+'. The Outlook
is Stable.
KEY RATING DRIVERS
The rating is constrained by Sadasivapet's inadequate civic
infrastructure - lack of proper water supply services, sewerage
and storm water drainage network and proper treatment plants for
sewerage. The dearth of civic amenities provided by the
municipality exerts pressure on its finances and Ind-Ra expects
huge investments are required to provide proper civic services in
the town.
The municipality's revenue size is small. Its own revenue source
comprises tax (36.71% of total revenue) and non-tax revenue
(26.32%). Revenue receipts grew at a CAGR of 20% over FY12-FY16
to INR54.08 million (FY12: INR26.08 million).
The town's capital income has been volatile over FY12-FY16 and
grew at a CAGR of 12.72%. Grants/contribution for capital works
was the major contributor to the capital income. The
municipality's capital expenditure grew at a CAGR of 4% over
FY12-FY16. During FY12-FY16, the municipality witnessed a
capital surplus (except FY13) due to underutilization of funds,
leading to delay in infrastructure building in the town and
decrease in the future own revenue source margins.
The town's economy is mainly driven by employees working in
companies such as Madras Rubber Factory (MRF) Ltd, Rane Diecast
Ltd, United Beweries Ltd, etc., contributing significant
employment in the area. Sadasivapet is also predominantly an
agricultural driven economy with major cultivation of paddy,
sugarcane and potato.
Sadasivapet Municipality's dependency on the state government
(compensation in lieu of stamp duty and revenue grants and
contributions) is low. Revenue compensation and revenue grants
cumulatively contributed at an average of 20.73% to the total
revenue income during FY12-FY16. Ind-Ra expects the state
government support of INR100 million in FY18 will help improve
infrastructure facilities and development in the area.
RATING SENSITIVITIES
Positive: A significant improvement in Sadasivapet's
infrastructure facilities and increase in collection efficiency
of own revenue source would positively impact the rating.
Negative: A significant deterioration of financial performance
without improving civic services in the town would trigger a
negative rating action.
COMPANY PROFILE
Sadasivapet is a town in the Sangareddy district of Telangana.
Sadasivpet municipality was constituted in 1947 and has a
jurisdiction over an area of 21.70 sq km and a population of
42,950 (as per Census of India 2011). It is 65km. away from the
state capital, Hyderabad.
Sadasivapet municipality is responsible for the provisioning and
governance of civic services in the town.
SANGAREDDY MUNICIPALITY: Ind-Ra Assigns B+ LT Issuer Rating
-----------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Sangareddy
Municipality a Long-Term Issuer Rating of 'IND B+'. The Outlook
is Stable.
KEY RATING DRIVERS
The rating is constrained by Sangareddy's inadequate civic
infrastructure - lack of proper water supply services, sewerage
and storm water drainage network and treatment plant for
sewerage. The dearth of civic amenities exerts pressure on the
municipality's finances and Ind-Ra expects that huge investments
are required to provide the proper civic services in the town.
The municipality's own revenue sources comprise tax revenue and
non-tax revenue. Its tax revenue and non-tax revenue on average
contributed 51.00% and 26.59%, respectively, to the total revenue
income. Despite Sangareddy's revenue receipts increasing to
INR73.54 million in FY16 from INR50.12 million in FY12, revenue
balance margins were weak throughout FY12-FY16 and never exceeded
1.00%.
The city's economy is mainly driven by the employees working in
the companies such as Pepsi Food Products Ltd, Toshiba T&D
Systems Ltd, Aurobindo Pharma Ltd ('IND AA+'/Positive), and Crown
beers International Ltd, etc. The city is positioned adjacent to
Hyderabad and Patancheru Industrial Zone, which helps in driving
its economic growth.
The municipality's dependency on the state government
(compensation in lieu of stamp duty and revenue grants and
contributions) is low. Revenue compensation and revenue grants
cumulatively contributed at an average of 20.82% to the total
revenue income during FY12-FY16. Ind-Ra expects the state
government support of INR100 million in FY18 will help to improve
the infrastructure facilities and development in the area.
RATING SENSITIVITIES
Positive: A significant improvement in Sangareddy's
infrastructure facilities and an increase in collection
efficiency of the municipality's own revenue sources would
positively impact the rating.
Negative: A significant deterioration of financial performance
without improving civic services in the town would trigger a
negative rating action.
COMPANY PROFILE
Sangareddy is a city in the Sangareddy district of Telangana.
Sangareddy Municipality was constituted in 1954 and is classified
as a first grade municipality. The city has a jurisdiction over
an area of 13.69 sq km and a population of 72,344 (as per Census
of India 2011). It is located 50km away from the Hyderabad-
Mahatma Gandhi Bus Station and is located on Hyderabad-Mumbai
Highway (NH9).
Sangareddy Municipality is responsible for the provisioning and
governance of civic services in the city.
SANT BHAGATRAM: CRISIL Raises Rating on INR6.5MM Cash Loan to BB-
-----------------------------------------------------------------
CRISIL has upgraded its rating on long-term bank facilities of
Sant Bhagatram Ginning and Pressing (SBGP) to 'CRISIL BB-/Stable'
from 'CRISIL B+/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 6.5 CRISIL BB-/Stable (Upgraded
from 'CRISIL B+/Stable')
The upgrade factors in improvement in the business and financial
risk profiles, aided by increasing cash accrual and controlled
debt levels. Revenue rose to INR46 crore estimated in fiscal
2017, from INR32 crore in the previous fiscal, driven by better
capacity utilisation and increasing cotton prices; resultantly,
cash accrual rose to INR0.6 crore estimated in fiscal 2017, from
INR0.30 crore in fiscal 2016. Revenue and accrual are likely to
remain steady, aided by stable cotton prices. Further, increasing
accrual and controlled debt levels have helped gearing improve to
1.52 times, estimated as on March 31, 2017, from 2.43 times as on
March 31, 2015. Interest coverage ratio also improved to an
estimated 2.5 times in fiscal 2017, backed by increasing accrual.
Financial risk profile is likely to remain moderate, on the back
of controlled working capital debt and absence of capex plans.
The rating reflects partners' extensive experience in the cotton
industry, proximity to raw material sources, and a moderate
financial risk profile albeit on a modest networth. These
strengths are partially offset by the modest scale of operations
in the fragmented industry and exposure to volatility in raw
material prices and adverse government regulations.
Key Rating Drivers & Detailed Description
Strengths
* Extensive experience of the partners, and proximity to raw
material sources: Benefits from one decade-long experience of the
partners in the cotton industry, and their healthy relationships
with customers and suppliers, will continue. Furthermore,
presence of the unit at Parbhani district in Maharashtra, enables
proximity to a major cotton-producing belt of the country.
* Moderate financial risk profile, albeit on a modest networth:
Gearing is estimated at 1.52 times as on March 31, 2017, although
on a modest networth estimated at INR4.2 crore as on same date.
Debt protection metrics are also expected to remain moderate,
with interest coverage ratio of 2.5 times estimated for fiscal
2017.
Weakness
* Modest scale of operations amidst intense competition: Intense
competition in the cotton industry, keeps the scale modest, as
reflected in revenue of INR46 crore estimated for fiscal 2017.
* Exposure to volatility in raw material prices, and adverse
government regulations: Operations are susceptible to government
regulations related to the cotton industry, and fluctuations in
cotton prices, which can adversely impact revenue and
profitability.
Outlook: Stable
CRISIL believes SBGP will continue to benefit from the extensive
experience of its partners. The outlook may be revised to
'Positive' if sustainable growth in revenue and profitability,
leads to higher-than-expected cash accrual. The outlook may be
revised to 'Negative' if decline in cash accrual, stretch in the
working capital cycle, or a capital withdrawal, weakens the
financial risk profile, particularly liquidity.
SBGP was set up as a partnership firm by Mr. Raamniwas Sarda, and
his family, in 2008. The firm gins and presses raw cotton to make
cotton bales, at its processing unit in Manwath, district
Parbhani, Maharashtra.
For fiscal 2016, profit after tax was INR0.17 crore on an
operating income of INR32.05 crore, against INR0.09 crore and
INR38.98 crore, respectively, for the previous fiscal.
SANVI SPINNING: CRISIL Lowers Rating on INR34.50MM Term Loan to B
-----------------------------------------------------------------
CRISIL has been consistently following up with Sanvi Spinning
Mill Private Limited (SSPL) for obtaining information through
letters and emails dated January 23, 2017, and February 13, 2017,
among others, apart from telephonic communication. However, the
issuer has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 2.25 CRISIL A4 (Issuer Not
Cooperating; Rating
Reaffirmed)
Cash Credit 5.00 CRISIL B/Stable (Issuer Not
Cooperating; Downgraded
from CRISIL B+/Stable)
Term Loan 34.50 CRISIL B/Stable (Issuer Not
Cooperating; Downgraded
from CRISIL B+/Stable)
'The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of Sanvi Spinning Mill 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 Sanvi Spinning Mill 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 2015, SSPL is promoted by the Jamnagar-based
Ranipa and Jotaniya families. The company is setting up a
facility to manufacture cotton yarn in various counts, mainly in
the 30s count, used for knitting and weaving. It is expected to
commence operations from May 2016.
SATNAM INDUSTRIES: Ind-Ra Migrates B+ Rating to Non-Cooperating
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Satnam
Industries' Long-Term Issuer Rating to the non-cooperating
category. The issuer did not participate in the rating exercise,
despite continuous requests and follow-ups by the agency.
Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The ratings will
now appear as 'IND B+(ISSUER NOT COOPERATING)' on the agency's
website. The instrument-wise rating actions are:
-- INR50 mil. Fund-based working capital limit migrated to non-
cooperating category;
-- INR19.6 mil. Term loan migrated to Non-Cooperating Category;
and
-- INR20 mil. Non-fund-based limit migrated to Non-Cooperating
Category
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
March 10, 2016. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Incorporated in 2007, Satnam Industries produces and processes
rice at its manufacturing unit in Chhattisgarh, which has an
installed capacity of 8mt per hour. The company is managed by
Mr. Alok Sundarni and family.
SHARADA EDUCATION: CRISIL Reaffirms B- Rating on INR11MM Loan
-------------------------------------------------------------
CRISIL has reaffirmed its 'CRISIL B-/Stable' rating on the long-
term bank facility of Sharada Education Trust (SET).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 11 CRISIL B-/Stable (Reaffirmed)
The rating continues to reflect the trust's stretched liquidity
driven by low cash accrual and ongoing capital expenditure
(capex). The rating also factors its below-average financial risk
profile because of an aggressive capital structure and weak debt
protection metrics. These weaknesses are partially offset by the
extensive experience of SET's trustees in the education sector.
Key Rating Drivers & Detailed Description
Weakness
* Stretched liquidity driven by low cash accrual and ongoing
capex
Cash accrual is expected to remain constrained on account of cash
loss. However, the trustees infused close to INR4 cr over past
three years ending through fiscal 2017. CRISIL believes that
continued fund support from the trustees will continue to remain
a key driver of its liquidity position over the medium term.
* Below-average financial risk profile
The financial risk profile is constrained by estimated small
networth of INR6 crore and moderate gearing of 1.13 times as on
March 31, 2017. The trust has weak debt protection metrics, with
interest coverage ratio at 0.09 time in fiscal 2017. CRISIL
believes that the financial risk profile of SET will continue to
remain constrained due to its high interest expense and low
margins.
Strengths
* Established position in the education sector
SET established Adarsha Institute of Technology (AIT), which
started its first batch of engineering course in 2013. The trust
has a tie-up with Cambridge Institute of Technology, which will
help enhance the visibility of the institute and increase the
number of students going ahead.
Outlook: Stable
CRISIL believes SET's liquidity will remain weak over the medium
term because of modest cash accrual. The outlook may be revised
to 'Positive' if the financial risk profile, particularly
liquidity, improves because of higher cash accrual driven by
scales up its fee receipts. The outlook may be revised to
'Negative' if liquidity weakens due to low cash accrual or due to
less-than-expected funding support from the trustees.
SET was established in 2010 by Dr K Udaya Kumar in Bengaluru. The
trust set up Adarsha AIT, which offers Bachelor in Technology
courses. The institute is approved by All India Council for
Technical Education (AICTE) and is affiliated to Visvesvaraya
Technological University. AIT started its first batch in 2013.
For fiscal 2017, SET's estimated losses were INR1.4 cr on
receipts of INR2 cr; as against reported losses of INR1.59 cr on
receipts of INR0.61 cr in fiscal 2016.
SHREE BALAJI: CRISIL Downgrades Rating on INR10MM Loan to 'B'
-------------------------------------------------------------
CRISIL has been consistently following up with Shree Balaji Gum
Industries (SBGI) for obtaining information through letters and
emails dated January 23, 2017, and February 13, 2017, among
others, apart from telephonic communication. However, the issuer
has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 10 CRISIL B/Stable (Issuer Not
Cooperating; Downgraded
from 'CRISIL B+/Stable')
Proposed Long Term 2.71 CRISIL B/Stable (Issuer Not
Bank Loan Facility Cooperating; Downgraded
from 'CRISIL B+/Stable')
Term Loan 0.29 CRISIL B/Stable (Issuer Not
Cooperating; Downgraded
from 'CRISIL B+/Stable')
'The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of Shree Balaji Gum 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 Shree Balaji Gum Industries is
consistent with 'Scenario 1' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL B rating
category or lower.' Based on the last available information,
CRISIL has downgraded the rating to CRISIL B/Stable.
SBGI, a partnership firm, manufactures and exports guar gum and
guar gum powder. These products are used by the food processing,
petrochemical, pharmaceuticals, textile, and oil and gas drilling
industries. The firm is promoted by Mr. Satish Kumar, Ms. Sumita
Devi, and Mr. Ravi Kumar. It manufacturing unit is in Ellenabad
(Haryana).
SREENATH ENGG: CRISIL Lowers Rating on INR3.5MM Cash Loan to B
--------------------------------------------------------------
CRISIL has been consistently following up with Sreenath Engg.
Sales and Service Private Limited (SESSPL) for obtaining
information through letters and emails dated January 23, 2017,
and February 13, 2017, among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 1.5 CRISIL A4 (Issuer Not
Cooperating; Downgraded
from 'CRISIL B+/Stable')
Cash Credit 3.5 CRISIL B/Stable (Issuer Not
Cooperating; Downgraded
from 'CRISIL B+/Stable')
Letter of Credit 0.5 CRISIL A4 (Issuer Not
Cooperating; Downgraded
from 'CRISIL B+/Stable')
Proposed Long Term 0.5 CRISIL B/Stable (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 Sreenath Engg. Sales and
Service 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 Sreenath Engg.
Sales and Service 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.
SESSPL, incorporated in 2010, installs, maintains, and provides
after-sales support for high-value medical equipment. Its
registered office is in Kolkata and has branches in Dhanbad and
Ranchi (both in Jharkhand). Operations are managed by Mr. Kumar
Mitra and his son, Mr. Kaustav Mitra.
SRI PARANTHAMAN: CRISIL Assigns B- Rating to INR5.5MM Loan
----------------------------------------------------------
CRISIL has assigned its 'CRISIL B-/Stable' rating to the long-
term bank facility of Sri Paranthaman Textiles Private Limited.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Secured Overdraft
Facility 5.5 CRISIL B-/Stable
The rating reflects the company's below-average financial risk
profile, susceptibility of operating margin to volatility in raw
material prices, and exposure to intense competition. These
weaknesses are partially offset by extensive experience of
promoters in the cotton yarn industry and need based fund
support.
Analytical Approach
CRISIL has treated unsecured loans estimated at INR1.47 Crore
from promoters as on March 31, 2017, as neither debt nor equity
as these loans are subordinate to bank debt.
Key Rating Drivers & Detailed Description
Weakness
* Below-average financial risk profile: Networth has been eroded
due to past losses and weak accrual, leading to negative gearing
as on March 2017. Debt protection metrics were also muted with
estimated interest coverage and net cash accruals to total debt
(NCATD) of 0.8 times and 0.02 times, respectively as on March
2017. The liquidity is stretched, reflected in bank lines being
fully utilised. Debt repayments are timely, supported by fund
support by promoters.
* Susceptibility of operating margin to volatility in raw
material prices: Operating profitability will remain susceptible
to volatility in the prices of cotton, which accounts for 60-65%
of total operating costs. Cotton prices have remained volatile in
the past few years.
* Exposure to intense competition in cotton yarn manufacturing
industry: SPTPL's scale of operations is modest, as reflected
from its estimated operating income of INR7.5 crores in fiscal
2017. The Indian cotton fabric industry is marked by intense
competition from unorganised, non-integrated, small scale
spinning enterprises resulting in increased pricing pressure
among the players.
Strengths
* Promoters' extensive experience and need based fund support:
The promoters have been in the textile industry for over four
decades, resulting in established relationship with customers.
The promoters have supported the operations of the company
through need based fund support. The unsecured loans from
promoters are estimated at INR1.47 crores at 31 March 2017.
Outlook: Stable
CRISIL believes SPTPL will continue to benefit over the medium
term from the extensive experience of its promoters and
established track record in the cotton yarn industry. The outlook
may be revised to 'Positive' if considerable increase in revenue
and profitability results in improved cash accrual and debt
protection metrics. The outlook may be revised to 'Negative' if
low cash accrual or large, debt-funded capital expenditure
affects financial risk profile, particularly liquidity.
SPTPL, was incorporated in 2000 in Chennai (Tamil Nadu) and is
engaged in the manufacture of cotton yarn, primarily 60s and 80s
count. The day to day operations are overseen by Mrs Prema
Paranthaman and Mr. Pramod Paranthaman
STPL booked Profit after Tax (PAT) of INR13.10 lakhs on revenues
of Rs10.62 crores in fiscal 2016 against a PAT of INR10.3 lakhs
on revenues of INR9.9 crores in fiscal 2015.
TANDUR MUNICIPALITY: Ind-Ra Assigns B+ Long-Term Issuer Rating
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Tandur
Municipality a Long-Term Issuer Rating of 'IND B+'. The Outlook
is Stable.
KEY RATING DRIVERS
The rating is constraint by the Tandur city's inadequate civic
infrastructure facilities - lack of proper water supply, sewerage
and storm water drainage network. This dearth of proper
amenities exerts pressure on municipality's finances. In Ind-
Ra's view, huge investments are required by the municipality to
provide proper civic services and upgrade the civic
infrastructure in the city.
The municipality's dependency on the state government for revenue
(compensation in lieu of stamp duty and revenue grants and
contributions) is low. Revenue compensation and revenue grants
cumulatively contributed 41.14% on an average to the total
revenue income during FY12-FY16.
The municipality's revenue income grew at a CAGR of 20.15% over
FY12-FY16, while operating margin was comfortable at 75.80% for
FY16 (FY15: 42.07%). The municipality incurred total expenses
for capital works of INR65.86 million during FY12-FY16. It did
not receive any capital grant for FY12 to FY14; for FY15 and
FY16, the municipality received a capital grant of INR1.98
million and INR16.70 million, respectively. During FY12-FY15,
the municipality remained in a capital deficit, while for FY16
the capital surplus was INR3.35 million.
Tandur is located 70km from Hyderabad and this gives a locational
advantage. Tandur's economy depends on stone manufacturing and
other allied activities. There are other small scale industries
in the vicinity. The municipality is likely to have an expansion
of its jurisdiction and this will help revenue generation of more
than INR10 million with an increase in population by 20,000.
RATING SENSITIVITIES
Positive: A significant improvement in Tandur's infrastructure
facilities and a sustained increase in revenue income leading to
a significant improvement in operating margins would positively
affect the rating.
Negative: A significant deterioration in the financial
performance without any improvement in civic services in the town
would trigger a negative rating action.
COMPANY PROFILE
Tandur town was constituted as Grade III municipality in 1953 and
upgraded to Grade II in 2010. Tandur was part of Hyderabad in
1956 and now it is in Vikarabad district of Telangana state. The
jurisdiction of the civic body is spread over an area of 5.82
sq.km. and is likely to be extended to an area of 29.19km. There
are 31 wards in the city and the population is 65,115 (Census
2011).
TATA POWER: FY2017 Results Support Ba3 Moody's CFR
--------------------------------------------------
The Tata Power Company Limited's (TPC, Ba3 negative) results for
the fiscal year ending March 2017 (FY2017), are within Moody's
expectations and continues to support its Corporate Family Rating
of Ba3.
Based on Tata Power's FY2017 results, its credit metrics remain
within the tolerance limits for its Ba3 ratings. For example, FFO
interest coverage is around 1.8x compared to the tolerance range
of 1.4-2x and Debt / book capitalization as at March 31, 2017 is
approximately 73%, which is within the tolerance range of 65-75%.
While these calculations do not reflect Moody's standard
adjustments, Moody's expects adjusted metrics to remain within
rating expectation.
For FY2017, TPC reported a net income of INR 7.5 billion compared
to INR 6.6 billion in FY2016. The reported net income was
impacted by INR 6.5 billion payment made for the purchase of
equity shares of Tata Teleservices Limited (unrated, TTSL) from
NTT DOCOMO, INC (NTT DOCOMO, Aa3 stable). TPC had previously
remitted INR 7.9 billion to Tata Sons Ltd. on August 9, 2016 and
this amount would be adjusted against the final payment.
Tata Power has adopted new accounting standards in FY2017 and has
thus discontinued consolidating Coal & Infra Companies which
contributed to 21% of the revenue and 20% EBIDTA in FY2017. The
contribution of the coal companies, along with other Joint
Ventures, is now captured in the share of associates in the
financial statements.
Adjusted for the one-off payment made to NTT DOCOMO, the company
reported net income of INR 13.9 billion mainly driven by strong
performance of the coal companies, Indian subsidiaries and the
renewable business.
Tata Power's coal revenues increased by 5% year on year, on the
back of a 3% increase of total coal sold and a 6% increase in
coal realizations. The 7% YoY reduction in cash cost of mining
further supported the growth in the coal business.
Tata Power's FY2017 consolidated debt at Rs480 billion increased
by a sharp 22% year-on-year (YoY) mainly due to the acquisition
of Welspun Renewables Energy Limited (Welspun, unrated) during
the year.
Over the next 12-18 months, Moody's expects Tata Power's
financial metrics such as FFO interest coverage and Debt to
Capitalization to be in the range of 1.8x-2.2x and 70-75%
respectively over next 12-18 months, positioning it appropriately
within the rating.
The principal methodology used in these ratings was Regulated
Electric and Gas Utilities published in December 2013.
The Tata Power Company Limited (TPC) is one of the largest
private-sector power utility in India with an installed
generation capacity of 10,613 MW as of March 2017. The company's
business operations include power generation (thermal, hydro,
solar and wind), transmission and distribution.
TECHOPS INFRASTRUCTURE: CRISIL Rates INR10MM Term Loan at B+
------------------------------------------------------------
CRISIL has revoked the suspension of its rating on the bank
facility of Techops Infrastructure Private Limited (TIPL) and has
assigned its 'CRISIL B+/Stable' rating to its bank facility.
CRISIL had suspended the ratings on November 11, 2016, as TIPL
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
---------- --------- -------
Term Loan 10 CRISIL B+/Stable (Assigned;
Suspension Revoked)
The rating reflects exposure to risks associated with the ongoing
project, Techops Garden ' Phase 2 at Umred Road, Nagpur,
Maharashtra, and susceptibility to cyclicality in the real estate
sector. These weaknesses are partially offset by the extensive
industry experience of the promoters.
Key Rating Drivers & Detailed Description
Weakness
* Exposure to risks associated with an ongoing project: The
company has completed 30% and sold 20-25% of its ongoing project,
which leads to moderate offtake and implementation risks. Any
delay in bookings or inflow of customer advances may impact
construction progress and liquidity.
* Susceptibility to cyclicality in the real estate sector: The
real estate sector in India is cyclical and is marked by sharp
movements in prices and a highly fragmented market structure. The
overall uncertain economic climate, and higher caution by banks
towards exposure to the sector, can also impact the company's
credit risk profile.
Strengths
* Extensive industry experience of the promoters: The promoters
have more than a decade of experience in the industry and have
completed several projects in Nagpur, leading to an established
presence and brand value.
Outlook: Stable
CRISIL believes TIPL will continue to benefit from the extensive
industry experience of its promoters. The outlook may be revised
to 'Positive' if customer response to the project is
significantly better than expected, leading to substantial cash
accrual and improvement in the financial risk profile. The
outlook may be revised to 'Negative' if cash flow is
significantly below expectation due to subdued response to the
project and hence low advances.
TIPL, incorporated in 2007, develops real estate in Nagpur. The
company is currently working on a residential project, Techops
Gardens Phase 2, which comprises of 650 flats across 13 towers.
Phase 1 of the project has already been completed.
Net loss was INR1.07 crore on net sales of INR30 crore in fiscal
2016, as against a net loss of INR0.28 crore on net sales of
INR13.5 crore in fiscal 2015.
VIKARABAD MUNICIPALITY: Ind-Ra Assigns B Long-Term Issuer Rating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Vikarabad
Municipality a Long-Term Issuer Rating of 'IND B'. The Outlook
is Stable.
KEY RATING DRIVERS
The rating is constraint by inadequate civic infrastructure in
Vikarabad. There is lack of proper water supply, sewerage and
storm water drainage network. This dearth of proper amenities
provided by the municipality exerts pressure on the
municipality's finances. In Ind-Ra's view, huge investments are
required by the municipality to provide proper civic services and
upgrade civic infrastructure in the city.
The municipality's dependency on the state government for revenue
(compensation in lieu of stamp duty and revenue grants and
contributions) is low. Revenue compensation and revenue grants
collectively contributed 30.77% on average to revenue income
during FY12-FY16.
The municipality's income generating activities are limited.
Revenue income was INR38.46 million in FY16 (FY15:
INR72.59million). Moreover, revenue income expanded at a CAGR
9.23% during FY12-FY16. With a share of 51.54%, property tax and
non-tax revenues were major contributors to revenue income during
FY12-FY16. During FY13-FY16, Vikarabad Municipality remained a
revenue surplus municipality, except in FY12. Its operating
margin declined to 14.57% in FY16 from 44.25% in FY15, as the
municipality did not receive a grant for FY16 and property tax
collection declined 18.78% yoy during the period.
The municipality has underutilized the available capital grant
for capital project works. During FY12-FY16, the municipality
was in capital surplus. In FY16, grant contribution was INR46.50
million (FY15: INR56.28 million), with total capital works
standing at INR21.39 million (INR11.09million).
Vikarabad is located 70km from Hyderabad, giving it a locational
advantage. Moreover, good educational institutions in the
vicinity can provide greater support in developing the
municipality in future. Agriculture is the main occupation and
major produce are vegetables, cotton and maize.
RATING SENSITIVITIES
Positive: A significant improvement in Vikarabad's infrastructure
facilities, an increase in the collection efficiency of own
revenue source and an improvement in operating margin would
positively impact the rating.
Negative: A significant deterioration in the financial
performance without improving civic services in the town would
trigger a negative rating action.
COMPANY PROFILE
Formed in 1987, Vikarabad Municipality was upgraded to Grade II
municipality on 18 May 2001 by merging the following gram
panchayats: Vikarabad, Sivareddypet, Kothagadi and
Ananthagiripalli.
The municipality has 28 election wards. The jurisdiction of the
civic body is spread over an area of 64 square kilometres. It
had a population of 53,185 according to the 2011 census.
The municipality is considered an educational and institutional
hub, given it is home to a large number of educational
institutions, including dental colleges and other professional
colleges. Small-scale industrial activities have also come up.
However, financial constraints pose a major challenge to its
growth. The municipality's finances have not been promising,
given no major investment in the town was made in the last three
years.
Z FASHIONS: CRISIL Reaffirms 'B+' Rating on INR5MM Cash Loan
------------------------------------------------------------
CRISIL's rating on the long-term bank facilities of Z Fashions
(ZF), continues to reflect ZF's modest scale of operations in the
intensely competitive ready-made garments (RMG) segment and
exposure to geographic and customer concentration in revenue
profile. These rating weaknesses are partially offset by the
promoters' extensive industry experience and moderate financial
risk profile.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 5 CRISIL B+/Stable (Reaffirmed)
Proposed Cash
Credit Limit 2.5 CRISIL B+/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility 2.5 CRISIL B+/Stable (Reaffirmed)
Key Rating Drivers & Detailed Description
Weakness
* Modest scale of operations in the intensely competitive RMG
segment: With revenue of INR25 crores in fiscal 2016, ZF's scale
of operations is modest in the highly fragmented textile
industry. The RMG segment is highly fragmented due to low entry
barriers.
* Exposure to geographic and customer concentration in revenue
profile: ZF generates around 75-80% of its revenues from sale to
its principal in Canada. This exposes the firm to significant
geographic and customer concentration risks.
Strengths
* Promoter's extensive industry experience: ZF was established by
Mr. Jinu V, who has over 14 years of experience in the textile
industry. Over the years, promoter has established healthy
relationship with customers and suppliers.
* Moderate financial risk profile: ZF has moderate financial risk
profile as reflected by its gearing of 1.41 times as on March 31,
2016 and the interest coverage of 2.11 times for fiscal 2016.
However financial risk profile is constrained by the modest
networth of INR3.7 crores as on March 31, 2016.
Outlook: Stable
CRISIL believes that ZF will continue to benefit over the medium
term from the promoters' extensive experience and established
customer relations. The outlook may be revised to 'Positive' if
substantial improvement in scale of operations and profitability
leads to better cash accruals. Conversely, the outlook may be
revised to 'Negative' if revenues or profits decline or stretch
in the working capital results in stretched liquidity; or if any
large debt-funded capital expenditure is undertaken, resulting in
weakening of financial risk profile, particularly its liquidity.
Set up as a proprietorship concern in 2002 by Mr. Jinu V, ZF is
the sole Indian manufacturer of readymade garments for Canada-
based brands, Horse and Ride, Boston Bug, and Ferry & Tail. ZF is
based in Tirupur (Tamil Nadu).
ZF reported Profit after Tax (PAT) of INR0.5 crore on revenue of
INR25 crores in fiscal 2016 as against INR0.3 crore and INR26
crores, respectively in fiscal 2015.
ZAHEERABAD MUNICIPALITY: Ind-Ra Assigns B Long-Term Issuer Rating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Zaheerabad
Municipality a Long-Term Issuer Rating of 'IND B'. The Outlook
is Stable.
KEY RATING DRIVERS
The rating reflects Zaheerabad's inadequate civic infrastructure
due to lack of proper water supply services, sewerage and storm
water drainage network. This dearth of proper amenities provided
by the municipality exerts pressure on its finances. In order to
provide the proper civic services, Ind-Ra believes huge
investments are required to upgrade the infrastructure in the
city.
Zaheerabad's dependency on the state government for revenue
(compensation in lieu of stamp duty and revenue grants and
contributions) is low. Revenue compensation and revenue grants
cumulatively contributed an average 18.93% to the total revenue
income during FY12-FY16.
Income generating activities in the municipality is limited.
Revenue income grew 20.84% to INR61.66 million in FY16 (FY15:
INR51.03 million). Property tax and non-tax revenue were the
major contributors to the total revenue income during FY12-FY16.
The municipality's revenue income grew at a CAGR of 9.47% over
FY12-FY16, while revenue expenditure increased 3.59%. Barring
FY12 and FY13, the municipality remained revenue surplus.
Operating margins turned positive to 16.78% in FY16 (FY12:
negative 3.77%) as the municipality received a capital grant of
INR38.09 million during the year. However, it did not receive
any revenue grant in FY16 (FY15: INR2.90 million).
The municipality has underutilized the available capital grant
for capital project works. The municipality was in deficit until
FY12 and turned capital surplus starting FY14. For FY16, the
grant contribution was INR39.53 million (FY15:INR88.93 million)
and total capital works was INR27.52 million (INR75.49 million).
However, the rating benefits from Zaheerabad's proximity to the
Karnataka border. The locational advantage, along with exiting
automobile companies and future prospect of National Investment
and Manufacturing Zone places the municipality in the industrial
map.
RATING SENSITIVITIES
Positive: A significant improvement in Zaheerabad's
infrastructure facilities and an increase in collection
efficiency of own revenue would positively impact the rating.
Negative: A significant deterioration of financial performance
without an improvement in the town's civic services would trigger
a negative rating action.
COMPANY PROFILE
Zaheerabad Municipality was constituted in 1952 and is classified
as a third grade municipality with 24 election wards. The
jurisdiction of the civic body is spread over an area of 21.78
sq. km with a population of 52,193 as per 2011 census.
Zaheerabad is an agricultural area; farming has struggled due to
dry lands becoming fallow and the loss of a variety of crops such
as cereals, pulses and oilseeds.
=================
I N D O N E S I A
=================
AGUNG PODOMORO: Fitch Assigns BB- Long-Term Issuer Default Rating
-----------------------------------------------------------------
Fitch Ratings has assigned Indonesia-based property developer PT
Agung Podomoro Land Tbk (APLN) a first-time Long-Term Issuer
Default Rating (IDR) of 'BB-' with a Stable Outlook. The agency
has also assigned a 'BB-(EXP)' expected rating to the proposed
unsecured unsubordinated US dollar notes to be issued by APLN's
wholly owned subsidiary APL Realty Holdings Pte Ltd. The proposed
US dollar notes will be guaranteed by APLN and several of its
subsidiaries. The final rating on the notes is contingent upon
the receipt of final documents conforming to information already
received.
APLN is a leading property developer in Indonesia with a land
bank of more than 8 million square metres (sq m), and investment
properties and hotels that generated a combined recurring revenue
of IDR1.6 trillion (around USD120 million) in 2016. APLN's
property sales and investment properties are widespread, and
sales are diversified across the low-, middle-, and high-income
customer segments.
The proposed notes are rated at the same level as APLN's Long-
Term IDR because they constitute direct and unsubordinated
obligations of the company. APLN expects to use part of the
proceeds to refinance existing local-currency secured debt, which
will free up more of its property portfolio from encumbrances.
Therefore Fitch expects APLN's secured debt/EBITDA to remain
below the 2.0x-2.5x threshold (2016 pro forma for bond issuance:
2.2x; 2017 forecast: 1.8x) - the point beyond which Fitch
considers unsecured creditors recoveries to be significantly
affected.
KEY RATING DRIVERS
Strong Investment Property Portfolio: APLN's investment property
portfolio consists of 11 retail malls and one office building, as
well as six hotels, which generated a combined recurring revenue
of over IDR1.6 trillion in 2016, and is valued at IDR21.7
trillion (around USD1.6 billion). Recurring revenue from APLN's
malls benefit from their mostly prime locations and strong
footfall as a result of being located mostly within "superblocks"
consisting of retail, commercial, hospitality and residential
assets developed by APLN. Average mall occupancy was healthy at
85% in 2016, in spite of two of its larger properties - Kuningan
City and Baywalk Mall - undergoing strategic changes to its
tenant profile.
The tenant risk in APLN's malls is well dispersed, with the 10
largest tenants accounting for 16.4% of mall revenue in 2016.
Lease tenors were four to five years on average, and provide good
revenue visibility. APLN has a further four malls and two five-
star hotels in the pipeline, which the company expects will be
commissioned in the next three years and to boost recurring
revenue. Recurring revenue covered APLN's net interest costs by
2.7x in 2016, and Fitch expects this to improve to 3.0x-3.3x over
the next two years. Fitch adds dividends received from associates
and deducts minority interests' share of the profit when
calculating the recurring revenue coverage ratio.
Presales to Grow in 2017: Fitch expects APLN's property sales to
improve to around IDR4 trillion-5 trillion in 2017, supported by
its geographical and product diversity. Fitch expectations are
driven by improving demand for property purchases, following the
government's fairly successful tax amnesty programme that
concluded in March 2017 and regulatory measures to reignite the
property market. Fitch expects APLN's property sales to benefit
from the strategic positioning of its assets, as well as its
sales diversity across products and customer segments. In 2016,
38% of APLN's property sales were from the low-income customer
segment, up from 14% in 2015. Demand from customers in this
segment is more resilient to downturns because it is driven by
first-time homebuyers rather than upgraders or property
investors.
Moderate Financial Profile: APLN has historically maintained a
modest financial profile, with leverage defined as net debt /
adjusted inventory at 33% in 2016 and 27% in 2015. Fitch expects
leverage to increase marginally to around 34%-35% over the next
two years, driven mostly by the expansion of the investment
property and hotel portfolio. APLN has a limited number of joint-
ventures that provide a limited risk of structural subordination
to its creditors - but this stems mainly from its industrial
estates, which it is likely to dispose of in the next two years.
Pluit City Risks: The development of APLN's "Pluit City" project
involving the reclamation of an island off the coast of Jakarta
was halted in May 2016 by the Environment Ministry, which called
for a review of the environmental impact in relation to the
proposed National Capital Integrated Coastal Development plan.
APLN had presold around IDR5 trillion worth of property in this
project at the time it had to be halted, and had collected over
IDR2 trillion of advances from customers. The company expects to
receive the approval to continue with the project in the near
term, and has provided for capex of around IDR400 billion for
2017.
However, Fitch has excluded future sales from this project from
Fitch ratings case - given the significant uncertainty around the
legal proceedings. The company says this project is potentially
worth a further IDR5 trillion in sales over the medium term. In
the event that APLN is unable to restart the development of this
project in a timely manner, there is a risk that the company may
have to refund the advances it had collected. Fitch estimates
APLN's leverage to rise to 46% in a worst-case scenario where the
company has to borrow to issue the refund, from 33% in 2016.
There is a further risk that APLN may not be able to recover the
IDR2 trillion of costs already spent on the island development.
DERIVATION SUMMARY
APLN compares well with other 'BB-' rated Indonesian property
developers, such as PT Pakuwon Jati Tbk (PWON, BB-/Stable) and PT
Bumi Serpong Damai Tbk (BSD, BB-/Stable). APLN has a more
geographically diverse property development business than BSD,
although BSD's scale of operations is much larger than that of
APLN. APLN's investment property and hotel portfolio has a
similar number of assets as BSD, but APLN has a higher mix of
high-end assets which benefit from stronger demand. PWON has a
similar development scale as APLN, and a more geographically
concentrated project profile. PWON's investment property
portfolio has a higher mix of high-end assets than APLN, but
exhibits higher asset concentration. All three companies have
similar levels of leverage.
KEY ASSUMPTIONS
Fitch's key assumptions within Fitch ratings case for the issuer
include:
- Annual presales of between IDR4 trillion-IDR5 trillion in 2017
and 2018
- Recurring revenue of IDR1.9 trillion and IDR2.2 trillion,
respectively, in 2017 and 2018
- No incremental presales from the Pluit City project; Pluit City
capex limited to around IDR400 billion in 2017
- Investment property and hotel capex of around IDR900 billion in
2017 and IDR700 billion in 2018
RATING SENSITIVITIES
Future Developments That May, Individually or Collectively, Lead
to Positive Rating Action
Fitch does not expect any positive rating action in the next two
years, given the smaller scale of APLN's investment property and
hotel portfolio compared with higher-rated international peers.
Over the longer term, the following may lead to positive rating
action:
- Growth in investment properties and hotel assets such that
recurring revenue increases to more than IDR3 trillion,
with the five largest properties accounting for less than 50%
of recurring revenue
- Recurring revenue net interest cover ratio sustained above 4.5x
- Net debt/adjusted inventory sustained below 30%
Future Developments That May, Individually or Collectively, Lead
to Negative Rating Action
- Recurring revenue net interest cover ratio sustained below 3.0x
- Net debt/adjusted inventory sustained higher than 40%
LIQUIDITY
Strong Profile Supports Liquidity: Fitch expects APLN's cash
reserves and available committed but undrawn credit facilities to
fall marginally short of 2017 debt maturities and Fitch estimates
of negative FCF. However, Fitch believes APLN's strong operating
profile as one of the leading property developers in Indonesia,
its established track record and asset quality supports access to
domestic banks and capital markets. In addition, the proposed US
dollar unsecured notes, if successful, will boost liquidity by
refinancing near-term maturities and lowering the cost of debt.
Property developers also have a degree of flexibility to limit
land purchases and development capex on landed-housing during
periods of weak demand, which also supports liquidity during
downturns.
FULL LIST OF RATING ACTIONS
PT Agung Podomoro Land Tbk
-- Long-Term Issuer Default Rating: Assigned at 'BB-'; Stable
Outlook
APL Realty Holdings Pte Ltd
-- Long-term expected rating on proposed unsecured
unsubordinated
notes: Assigned at 'BB-(EXP)'
AGUNG PODOMORO: Moody's Assigns Ba3 CFR; Outlook Stable
-------------------------------------------------------
Moody's Investors Service has assigned a first-time Ba3 corporate
family rating to Agung Podomoro Land Tbk (P.T.) (APL).
At the same time, Moody's has assigned a Ba3 rating to the
proposed USD-denominated bonds to be issued by APL Realty
Holdings Pte. Ltd., a wholly owned subsidiary of APL. The
proposed bonds are unconditionally and irrevocably guaranteed by
APL and certain of its subsidiaries.
The outlook on the ratings is stable.
APL will use approximately USD155 million of the net bond
proceeds for debt repayment and the rest for general corporate
purposes.
The rating on the proposed bond is subject to review of final
terms and conditions of the bond indenture.
RATINGS RATIONALE
"APL's Ba3 ratings reflect its established market position as a
developer of mixed-use projects in Jakarta. The company is well-
diversified across multiple projects and property segments, and
successfully caters to customers across the price spectrum," says
Jacintha Poh, a Moody's Vice President and Senior Analyst.
APL has completed a total of 29 projects -- comprising
apartments, trade centers, shopping centers, office towers and
hotel properties -- in Jakarta over the last 10 years, and has
therefore established a strong presence in the city.
The company also has presences in second-tier Indonesian cities
and locations, such as Bali, Batam, Bogor, Karawang, Bandung and
Balikpapan.
"APL's ratings take into account its growing investment property
portfolio, with its healthy operating performance, and therefore
its ability to provide predictable recurring income, which
partially mitigates the effects of the lumpy cash flows from its
property development business," adds Poh.
At December 31, 2016, the company's investment properties
contributed approximately 27% of total revenue and 43% of
reported EBITDA, significant improvements from approximately 5%
of revenue and 22% of reported EBITDA in 2010.
Over the next 12-18 months, Moody's expects revenue from its
investment properties to grow by around 10% and contribute to
25%-30% of revenue and 35%-40% of EBITDA .
Nonetheless, APL's ratings are constrained by its small scale
relative to its global peers and uncertainty around its
reclamation project in North Jakarta. The company is also exposed
to the cyclical character of the property sector and evolving
nature of the regulatory environment in Indonesia.
APL had obtained concessions to reclaim three islands -- F, G and
I -- totaling around 550 hectares in North Jakarta, and had
started to reclaim island G, an area of 161 hectares, also known
as the Pluit City project.
However, the entire reclamation project has been suspended due to
administrative sanctions since May 2016. Given uncertainty over
when the suspension will end, Moody's base case scenario
incorporates only maintenance costs relating to the project and
the absence of cash flow contributions.
In 2017, Moody's expects APL to achieve around IDR5 trillion in
marketing sales, largely driven by the sale of industrial land at
the Podomoro Industrial Park for IDR1.6 trillion. The company
will also benefit from its sale of hotel - Pullman Jakarta
Central Park- for IDR1.3 trillion.
Moody's expects that the company's adjusted debt/homebuilding
EBITDA will measure around 2.5x in 2017 and adjusted homebuilding
EBIT/interest expense will stand at around 3.5x over the same
period. At December 31, 2016, APL had an adjusted
debt/homebuilding EBITDA of 2.8x and adjusted homebuilding
EBIT/interest expense of 2.6x.
Pro forma for the bonds, Moody's expects APL's secured debt/total
debt to come down to around 60% in 2017 from 97% in 2016.
Consequently, bondholders claims will be subordinated to the
claims of senior lenders. However, Moody's does not notch down
APL's proposed bonds as the company's secured debt/total assets
will improve to around 20% over the next 12-18 months, from 25%
in 2016.
Moody's also notes that APL's book value of assets does not take
into account the significant appreciation in the market value of
its investment properties, which further improves the asset
coverage.
The ratings outlook is stable, reflecting Moody's expectation
that APL will work towards achieving its sales target and
maintaining financial discipline as it pursues growth.
An upward ratings trend could emerge if APL successfully: (1)
executes its business plans and grows revenue to above IDR8
trillion; (2) improves its financial profile, such that adjusted
debt/homebuilding EBITDA is less than 2.5x and adjusted
homebuilding EBIT/interest coverage is above 4.0x; and (3)
maintains a solid liquidity position in the form of cash balances
and committed facilities.
APL's rating could face downward pressure if: (1) the company
fails to implement its business plans; and/or (2) the property
market deteriorates, leading to protracted weakness in the
company's operations and credit profile.
Moody's consider adjusted debt/homebuilding EBITDA over 3.5x and
adjusted homebuilding EBIT/ interest coverage below 2.0x on a
sustained basis as indications that a downgrade may be necessary.
The principal methodology used in these ratings was Homebuilding
And Property Development Industry published in April 2015.
Agung Podomoro Land Tbk (P.T.) (APL) is an integrated property
developer. It listed on the Indonesia Stock Exchange in 2010. The
company and its subsidiaries are engaged in the development,
management and operation of apartments, landed houses, shopping
centers, office towers and hotel properties. APL is controlled by
Trihatma Kusuma Haliman, the son of the company's late founder,
who had a 73.9% stake in the company at December 31, 2016.
=========
J A P A N
=========
TOKYO ELECTRIC: Moody's Upgrades CFR to Ba2; Outlook Stable
-----------------------------------------------------------
Moody's Japan K.K. has upgraded Tokyo Electric Power Company
Holdings, Inc.'s (TEPCO) corporate family rating to Ba2 from Ba3
and its senior secured debt ratings to Ba1 from Ba2, and affirmed
the NP commercial paper program rating. The ratings outlook is
stable.
At the same time, Moody's has upgraded TEPCO's baseline credit
assessment (BCA) to b3 from caa1.
Details of the ratings are:
- Corporate family rating upgraded to Ba2 from Ba3
- Senior secured debt ratings upgraded to Ba1 from Ba2
- Commercial paper program affirmed at NP
RATINGS RATIONALE
"The upgrade reflects the Japanese government's continued support
of TEPCO in approving the company's latest business plan, which
also provides clarity on how TEPCO will pay for the
decommissioning costs for its Fukushima Daiichi nuclear plant,"
says Mariko Semetko, a Moody's Vice President and Senior Credit
Officer.
On May 18, 2017, the government approved TEPCO's revised
Comprehensive Special Business Plan, which shows how TEPCO will
pay for the decommissioning and incorporates the recent revision
of the Nuclear Damage Compensation and Decommissioning
Facilitation Corporation (NDF) act. The diet passed the bill to
revise the act on May 10, which is expected to be enacted this
fall.
Under the government-approved scheme, TEPCO will generate JPY500
billion on average annually to pay for the decommissioning (JPY8
trillion) and the company's portion of compensation payments
(JPY3.9 trillion). The NDF will control the decommissioning fund.
The NDF is TEPCO's majority owner, and oversees TEPCO's
compensation payments for the victims of the accident at
Fukushima and its decommissioning. The plant was damaged during
the March 2011 earthquake and tsunami.
The scheme will allow TEPCO to retain incremental earnings from
cost cuts and operating efficiencies to allocate to the
decommissioning fund. Traditionally, such cost savings would have
been passed through to TEPCO's end-users in the form of tariff
cuts.
"Establishing the decommissioning payment scheme addresses one of
the main uncertainties in assessing TEPCO's credit, which has
been how, when and who will pay for the estimated JPY8 trillion
of decommissioning costs, the biggest Fukushima-related
obligation that TEPCO must foot," adds Semetko.
Funds needed for decommissioning will be limited over the next
four years, since the actual removal of debris is not scheduled
to start until during the fiscal year ending in March 2022 based
on TEPCO's Mid-to-Long-Term Roadmap. In the meanwhile, the
company will start to pre-fund future decommissioning needs.
Moody's sees that the risk of the costs for decommissioning
rising above the current estimate is high, and if that occurs, it
is unclear how TEPCO will pay for them. Further, it is yet to be
seen if TEPCO can in fact reduce its costs to levels sufficient
to cover the JPY500 billion average annual funding needs.
As for the compensation payments, the rate of increase in
payments has been slowing. The scale of the compensation will be
manageable because -- under the government's support scheme --
initial payments to victims are pre-funded by the NDF, which in
turn is financed by the government. These funds have been, and
will continue to be, paid back each year by TEPCO and the other
Japanese electric power companies over the years.
As a government-related issuer (GRI), TEPCO's Ba2 corporate
family rating reflects a Baseline Credit Assessment of b3. The
rating continues to consider the very high dependence of TEPCO on
the Government of Japan (A1 stable) and the high probability of
ongoing support from the government under Moody's joint default
analysis approach. Government support remains critical to the
rating.
The stable outlook reflects Moody's view that, with the support
of the government and its banks, TEPCO will be able to pay for
the costs related to the Fukushima plant, and that the company
can generate JPY500 billion on average annually as set out in the
latest business plan. Moody's expects the company to achieve Cash
Flow pre-Working Capital to Debt in the 10% to 12% range.
Upward pressure on the rating would rise if the company
establishes a track record of paying the Fukushima costs as
highlighted in its revised business plan; deregulation does not
materially reduce the company's profitability and cash flow;
TEPCO's cost base improves as the company forecasts, once the
nuclear reactors at its Kashiwazaki-Kariwa power plant restart;
and the ultimate Fukushima-related costs or further cost
increases are capped more definitively.
The new business plan clearly highlights TEPCO's intent to pursue
a reorganization of its businesses through M&A and alliances. An
upgrade is unlikely prior to Moody's gaining more clarity on the
financial impact of the April 1, 2019 transfer of its domestic
power generation assets to JERA Co., Inc., TEPCO's joint venture
with Chubu Electric Power Company, Incorporated (A3 stable).
Moody's will need to be certain that any other corporate
restructuring or recapitalization that TEPCO may pursue will not
weaken its credit profile.
The ratings would face downward pressure if TEPCO is unable to
generate sufficient funds to pay for the decommissioning, or if
its Fukushima-related costs rise materially above current
estimates without a commensurate increase in government support
or improvements in cash flow and profitability. Any adverse
changes in government or bank support for TEPCO, or a decline in
TEPCO's margins or cash flow coverage could also lead to downward
rating pressure. A restructuring that will be to the detriment of
the existing bondholders could also lower the bond ratings.
Depending upon Moody's assessment at the time, the ratings could
also be impacted by any change in the rating or outlook of the
Government of Japan, or Moody's assessment of any negative
changes in the GRI factors.
The methodologies used in these ratings were Regulated Electric
and Gas Utilities (Japanese) published in February 2014, and
Government-Related Issuers (Japanese) published in November 2014.
Tokyo Electric Power Company Holdings, Inc., is the largest power
company in Japan with consolidated revenues of JPY5.4 trillion
and an electricity sales volume of 241.5 billion kWh for the
fiscal year that ended in March 2017.
====================
N E W Z E A L A N D
====================
PACIFIC EDGE: Annual Net Loss Widens to NZ$21 Million in 2017
-------------------------------------------------------------
BusinessDesk reports that Pacific Edge Limited widened its annual
loss as the cancer diagnostic company's focus on expanding its US
footprint drove a 62 percent boost in sales.
BusinessDesk relates that the Dunedin-based company posted a net
loss of NZ$21 million, or 5.5 cents per share, in the 12 months
ended March 31, widening from a loss of NZ$15.7 million, or 4.3
cents a year earlier. Operating revenue climbed to NZ$8.1 million
from NZ$5 million a year earlier, a slower increase than expected
as Pacific Edge took longer to close deals with large US health
administrators, BusinessDesk says.
It now has both the Veterans Administration and TRICARE Health
Plan Network under contract, which provide cover to 20 million US
military personnel, is in commercial talks with Kaiser Permanente
which are expected to close shortly, and is still chasing
regulatory approval for patients to get reimbursed under the
Centers for Medicare and Medicaid (CMS), according to
BusinessDesk.
"We have made strong commercial progress in FY17, particularly
with our targeted scale customers," BusinessDesk quotes chief
executive David Darling as saying in a statement. "We are seeing
increasing demand and uptake from both private and public
healthcare providers and expect to see a ramp up in sales from
new and existing customers in FY18."
BusinessDesk says Pacific Edge got a two-year extension to its
Callaghan Innovation research grant to fund its suite of cancer
detection products and raised NZ$8.8 million earlier this year to
help pay for the US drive and it expects to have all four
Cxbladder products fully launched in the US by 2018.
The company's operating cash outflow rose 5 percent to NZ$17.8
million in the year, as a jump in customer receipts largely
covered the increased cost paying suppliers and staff, and it
held NZ$14.6 million of cash at the March 31 balance date, down
from NZ$24.2 million a year earlier, BusinessDesk relays.
BusinessDesk adds that Pacific Edge's operating costs rose 33
percent to NZ$30.5 million as spending on research and
development rose 11 percent to NZ$4.9 million and sales and
marketing costs almost doubled to NZ$1.9 million. It also faced a
NZ$2.9 million bill to wind up an employee incentive scheme and a
NZ$2.6 million charge writing off bad debts.
Revenue from government grants and rebates for research from
Callaghan and New Zealand Trade and Enterprise dropped to NZ$1.1
million from NZ$1.4 million a year earlier, with changes to
Callaghan's scheme meaning international R&D couldn't be claimed
anymore, BusinessDesk discloses.
Pacific Edge Limited (NZX: PEB) is a New Zealand publicly listed,
cancer diagnostic company specialising in the discovery and
commercialisation of diagnostic and prognostic tests for better
detection and management of cancer. The company is developing and
commercialising its range of Cxbladder bladder cancer tests
globally through its wholly owned central laboratories in New
Zealand and the USA. The company's products have been tested and
validated in international multi-centre clinical studies.
VIADUCT: FMA Reviews Disclosure Processes After Aborted Case
------------------------------------------------------------
NBR Online reports that the Financial Markets Authority said it
will review its disclosure processes after its long trial against
the directors of failed finance companies Viaduct Capital and
Mutual Finance was aborted.
Earlier this month, the judge presiding over the case against the
four men involved in the two companies -- Paul Bublitz, Bruce
McKay, Richard Tim Blackwood and Lance Morrison -- ordered a
mistrial because of late disclosure after nine months in the
Auckland High Court, NBR says.
NBR relates that in Justice Mark Woolford's judgment outlining
his reasons, he said the FMA had disclosed an "unprecedented"
amount of late information -- more than 14,000 documents (some
duplicates) the market watchdog had deemed irrelevant or subject
to litigation privilege.
However, responding to the judgment, the FMA argued the late
disclosure issue was inadvertent, NBR relates.
"There is no suggestion of any bad faith. We will consider our
processes concerning disclosure in light of the issues that have
arisen during the course of this trial," NBR quotes a spokesman
as saying.
Viaduct Capital and Mutual Finance collapsed in 2010, owing a
total of about NZ$17 million but, because they held deposits
insured by the government's retail deposit guarantee scheme,
investors were bailed out, NBR notes.
Messrs. Bublitz, McKay and Blackwood are linked to both companies
and were accused of theft by a person in a special relationship,
making false statements in a prospectus, and making false
statements to a trustee, according to NBR.
NBR relates that Mr. Morrison also faced charges of theft by a
person in a special relationship and making false statements to a
trustee but only for Mutual Finance.
The FMA alleges Mr. Bublitz and his co-defendants deliberately
misled investors in the finance companies over the extent of
related-party transactions for their benefit and for
Mr. Bublitz's property company, Hunter Capital.
The defendants denied the charges, NBR adds.
=============
V I E T N A M
=============
VIETNAM: Moody's B1 Rating Reflect Strong FDI to Help Economy
-------------------------------------------------------------
Moody's Investors Service says that Vietnam's B1 rating and
positive outlook reflect its expectation that strong foreign
direct investment (FDI) inflows will continue to diversify the
country's economy when compared with similarly rated peers.
Moody's further notes that robust GDP growth continues, along
with macroeconomic and external stability, a situation which is
favorable for the stabilization of the government's debt burden.
Vietnam's B1 issuer rating incorporates credit strengths, which
include the size and diversity of the country's economy relative
to similarly rated peers. It has also improved its cross-country
assessments of institutional quality over the past four years,
particularly in government effectiveness, albeit from low levels.
Moody's conclusions are contained in its just-released annual
credit analysis of the sovereign, "Government of Vietnam -- B1
Positive". The report elaborates on Vietnam's credit profile in
terms of Economic Strength, , High (-); Institutional Strength,
Low (+); Fiscal Strength, Moderate (-); and Susceptibility to
Event Risk, High. These are the four main analytic factors in
Moody's Sovereign Bond Rating Methodology.
However, the banking system remains an important rating
constraint, and the recovery of domestic demand since 2015 has
coincided with rapid credit growth, challenging a system still
encumbered by poor capital adequacy and legacy non-performing
loans.
Moody's considers that Vietnam's advances in competitiveness and
reforms have in part been driven by the country's entry into
several free-trade agreements in recent years. The economy has
notable strengths in a range of sectors, including soft
commodities; traditional labor-intensive manufacturing such as
shoes and textiles; and more recently, moderately high value-
added manufacturing, which includes mobile phones and other
electronics.
With economic growth, Moody's projects it to increase in coming
quarters with full-year 2017 real GDP growth at 6.5%, slightly
below the government's target of 6.7%. The improvement in the
external environment has provided a boost for exports, which rose
16.4% year on year in US dollar terms through the first four
months of the year, up from 9.1% for the full year in 2016.
The country's improving competitiveness and reform impetus have
-- as indicated -- supported net FDI inflows, which averaged 5.2%
of GDP between 2014 and 2016, higher than the B1-rated median of
3.6%.
A risk to Vietnam's outlook for investment, exports, and GDP
growth is the rising protectionism from key trading partners; a
risk that affects the global trading system more generally. A
shift in US policies towards protectionism that significantly and
durably lowers growth in global trade would affect Vietnam, given
the economy's reliance on trade.
Vietnam's 'Moderate -' Fiscal Strength incorporates a debt burden
at around 50%-55% of GDP and high debt affordability. It also
incorporates the deterioration in these metrics in recent years.
Deficit consolidation is likely to progress only incrementally
over the medium term, but sufficiently to prevent a further
increase in government debt from the 2016 level.
Public debt, which includes debt guaranteed by the government,
reached 63.7% of GDP in 2016, approaching the government's own
65% limit, prompting it to slow the issuance of new guarantees.
Finally, Vietnam's 'High' Susceptibility to event risk continues
to be driven by banking sector risk, which is considered the most
severe among rated countries in the Asia Pacific.
However, government liquidity risks are 'Low' because of moderate
gross borrowing requirements and relatively low exposure to non-
resident ownership of its market debt. Moreover, the government
has established access to international markets, having issued
several US dollar-denominated bonds over the past decade.
*********
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.
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