/raid1/www/Hosts/bankrupt/TCRAP_Public/170809.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Wednesday, August 9, 2017, Vol. 20, No. 157
Headlines
A U S T R A L I A
FIRE TECHNOLOGIES: First Creditors' Meeting Set for Aug. 15
GEOEXCHANGE CONTRACTING: First Creditors' Meeting Set for Aug. 15
ISHERWOOD PROTECTIVE: First Creditors' Meeting Set for Aug. 16
JUST THINK: Second Creditors' Meeting Set for Aug. 16
WEST COAST MILLING: Second Creditors' Meeting Set for Aug. 15
YERING MEADOWS: Second Creditors' Meeting Set for Aug. 16
C H I N A
CHINA HUIYUAN: Moody's Assigns First-Time B1 CFR; Outlook Stable
CHINA ZHENGTONG: Moody's Withdraws B1 Corporate Family Rating
FUTURE LAND: Fitch Assigns BB- Rating to USD Senior Notes
* CHINA: Next Debt Headache is $580BB of Put Options Coming Due
H O N G K O N G
CHINA OCEAN: Shinhan Again Refuses to Give Audit Opinions
NOBLE GROUP: Does Not Wish to Comment Further on Iceberg Research
I N D I A
ADHUNIK METALIKS: NCLT Initiates Insolvency Process
AMIT SPINNING: Insolvency Proceedings Initiated
ARADHANA AUTOMOBILES: CRISIL Reaffirms B Rating on INR6MM Loan
AZURE POWER: Fitch Assigns BB- Rating to USD500MM Sr. Notes
B L FOUNDRY: CRISIL Reaffirms 'B' Rating on INR12MM Loan
BABANRAOJI SHINDE: CRISIL Reaffirms D Rating on INR127.32MM Loan
BINDU FOOD: CRISIL Reaffirms D Rating on INR3.25MM LT Loan
BIRAMANE HOSTEL: CRISIL Reaffirms D Rating on INR6.51MM Loan
BISUI POULTRY: ICRA Reaffirms 'B' Rating on INR5.11cr Loan
CHAHAL SPINTEX: CRISIL Reaffirms 'D' Rating on INR22.81MM Loan
FLOCK SUR: ICRA Reaffirms B+ Rating on INR10cr Cash Loan
HARE KRISHNA: ICRA Reaffirms 'B' Rating on INR8.0cr Loan
HILLTOP CERAMIC: ICRA Reaffirms B+ Rating on INR5.42cr Loan
J.G. AGRO: CRISIL Reaffirms 'D' Rating on INR4MM Cash Loan
JAGATJIT INDUSTRIES: ICRA Cuts Rating on INR174.44cr Loan to B-
JAJODIA EXPORTS: ICRA Reaffirms B Rating on INR7.50cr Cash Loan
JALANDHAR AMRITSAR: Ind-Ra Affirms 'IND B-' Bank Loan Rating
JAYPEE INFRATECH: NCLT to Issue Insolvency Order Today
K.G.O.C. TERMINALS: ICRA Assigns 'B' Rating to INR47cr LT Loan
KOPARGAON AHMEDNAGAR: Ind-Ra Affirms D Rating on INR1,560MM Loan
KOTKAPURA MUKTSAR: Ind-Ra Affirms 'D' Rating on INR750MM Loan
MALLIKARJUNA PARBOILED: ICRA Reaffirms B+ Rating on INR5cr Loan
MANORAMA HOSPITEX: ICRA Withdraws 'D' Rating on INR11.40cr Loan
MASCONS ENGINEERING: CRISIL Reaffirms D Rating on INR5MM Loan
P.C.S TRADES: CRISIL Assigns 'B' Rating to INR6MM Cash Loan
RELIANCE DIAMOND: CRISIL Reaffirms B+ Rating on INR6.5MM Loan
ROYAL PLAZA: CRISIL Reaffirms 'D' Rating on INR10MM Term Loan
ROYAL POWER: ICRA Assigns B- Rating to INR6.25cr LT Loan
S.N.N TEXTILES: ICRA Lowers Rating on INR18cr Term Loan to B
SAINI ALLOYS: Ind-Ra Assigns 'BB' Issuer Rating, Outlook Stable
SAKSHI AUTO: CRISIL Reaffirms 'D' Rating on INR3.32MM LT Loan
SATGURU METALS: ICRA Reaffirms 'D' Rating on INR4.95cr Loan
SHAKTI ENTERPRISES: CRISIL Reaffirms B- Rating on INR6MM Loan
SHREE DURGA: Ind-Ra Raises Issuer Rating to 'BB+', Outlook Stable
SHRI VEERGANAPATHI: CRISIL Lowers Rating on INR10MM Loan to 'D'
SRI BALAJI: ICRA Reaffirms B+ Rating on INR5.0cr Cash Loan
SURYA AUTOMOBILES: ICRA Reaffirms B+ Rating on INR4cr Loan
UNITED ELECTRICALS: ICRA Reaffirms B Rating on INR2.65cr Loan
UNIVERSAL INDIA: ICRA Reaffirms B Rating on INR5.0cr Cash Loan
VAIDYANATH SAHAKARI: CRISIL Reaffirms D Rating on INR81.96MM Loan
VIRGIN ROCK: ICRA Puts B+ Rating to Issuer Not Cooperating
J A P A N
TOSHIBA CORP: Shares Demoted From First Section of TSE
S I N G A P O R E
EMAS OFFSHORE: High Court Orders Winding Up of Subsidiary
SINGAPORE AIRLINES: Offers Cabin Crew Unpaid Leave to Cut Costs
S O U T H K O R E A
HANJIN SHIPPING: Says Bankruptcy Claims Top $10 Billion
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A U S T R A L I A
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FIRE TECHNOLOGIES: First Creditors' Meeting Set for Aug. 15
-----------------------------------------------------------
A first meeting of the creditors in the proceedings of Fire
Technologies Australia Pty Ltd will be held at Level 14, 197 St
Georges Terrace, in Perth, WA, on Aug. 15, 2017, at 12:00 p.m.
Domenico Alessandro Calabretta and Grahame Robert Ward of Mackay
Goodwin were appointed as administrators of Fire Technologies on
Aug. 3, 2017.
GEOEXCHANGE CONTRACTING: First Creditors' Meeting Set for Aug. 15
-----------------------------------------------------------------
A first meeting of the creditors in the proceedings of
Geoexchange Contracting Pty Ltd will be held at the Chartered
Accountants Australia and New Zealand, Level 10, 60 Marcus Clarke
Street, in Canberra, ACT, on Aug. 15, 2017, at 10:30 a.m.
Henry Peter Mckenna and Sule Arnautovic of Jirsch Sutherland were
appointed as administrators of Geoexchange Contracting on Aug. 3,
2017.
ISHERWOOD PROTECTIVE: First Creditors' Meeting Set for Aug. 16
--------------------------------------------------------------
A first meeting of the creditors in the proceedings of Isherwood
Protective Services Pty Ltd will be held at the the Boardroom of
Chifley Advisory, Suite 3.04, Level 3, 39 Martin Place, in
Sydney, New South Wales, on Aug. 16, 2017, at 3:00 p.m.
Gavin Moss and Trent McMillen of Chifley Advisory Pty were
appointed as administrators of Isherwood Protective on Aug. 6,
2017.
JUST THINK: Second Creditors' Meeting Set for Aug. 16
-----------------------------------------------------
A second meeting of creditors in the proceedings of Just Think
Property NSW Pty Ltd, trading as Just Think Real Estate, has been
set for Aug. 16, 2017, at 11:00 a.m., at the offices of Helm
Advisory Suite 4, Level 35, 50 Bridge Street, in Sydney, NSW.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the
Company be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by Aug. 15, 2017, at 4:00 p.m.
Stephen Wesley Hathway of Helm Advisory was appointed as
administrator of Just Think on July 12, 2017.
WEST COAST MILLING: Second Creditors' Meeting Set for Aug. 15
-------------------------------------------------------------
A second meeting of creditors in the proceedings of West Coast
Milling Pty Ltd has been set for Aug. 15, 2017, at 10:00 a.m., at
Swan Room, Parmelia Hilton, 14 Mill Street, 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 Aug. 14, 2017, at 4:00 p.m.
Kimberley Andrew Strickland, David Ashley Norman Hurt and Jimmy
Trpcevski of WA Insolvency were appointed as administrators of
West Coast Milling on July 11, 2017.
YERING MEADOWS: Second Creditors' Meeting Set for Aug. 16
---------------------------------------------------------
A second meeting of creditors in the proceedings of Yering
Meadows Golf Club Ltd has been set for Aug. 16, 2017, at
2:30 p.m., at the offices of Worrells Solvency & Forensic
Accountants, Level 15, 114 William 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 Aug. 15, 2017, at 5:00 p.m.
Matthew Jess & Matthew Kucianski of Worrells Solvency were
appointed as administrators of Yering Meadows on July 12, 2017.
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C H I N A
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CHINA HUIYUAN: Moody's Assigns First-Time B1 CFR; Outlook Stable
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Moody's Investors Service has assigned a first-time B1 corporate
family rating (CFR) to China Huiyuan Juice Group Limited.
At the same time, Moody's has assigned a B1 senior unsecured
rating to its proposed USD notes.
The ratings outlook is stable.
The net proceeds from the notes issuance will be used to
refinance certain existing indebtedness and for other general
corporate purposes.
RATINGS RATIONALE
"Huiyuan's B1 CFR reflects the company's leading position and
strong brand name in China's growing fruit juice market, its
vertically integrated business model - which safeguards product
quality - and improved profitability," says Lina Choi, a Moody's
Vice President and Senior Credit Officer.
Huiyuan has more than 20 years of operational experience in the
juice industry in China. It has established significant brand
recognition in the country, based on the fact that it was one of
the pioneers in launching 100% juice products during the 1990s.
According to Nielsen's report, Huiyuan achieved the largest share
(44.2%) of China's 100% fruit and vegetable juice market by sales
value in 2016, leading the second-largest player's 36.4% share by
a wide margin.
In terms of its nectar product, Huiyuan had a 28.3% market share
by sales value in 2016 versus the second and third largest
players' 19.9% and 9.9%.
The CFR also reflects the favorable demand trend existent in
China, supported by urbanization, rising disposable income
levels, and a greater focus by consumers on natural foods, such
as 100% fruit juices.
This steady demand will support Huiyuan's revenue, which Moody's
expects will grow over the next two years and exceed RMB6 billion
by the end of the fiscal year ending 31 December 2018.
The B1 CFR also considers Huiyuan's improved profitability,
supported by its vertical business model and rationalized
distribution channel. This strength provides it with a buffer
against competition-driven pricing pressures.
Moody's expects that Huiyuan's gross margin - which rose to 40.7%
in 2016 from 34.7% in 2014 - will stay solid over the next two
years, driven primarily by its steady access to raw materials.
China Huiyuan Industry Holdings, a key upstream subsidiary, is
the main supplier of raw materials for Huiyuan. The subsidiary's
output accounted for 60% of the total raw materials purchased by
Huiyuan in 2016, on a value basis.
Huiyuan's vertically integrated operation enables it to control
the entire value chain from fruit processing, bottling, and all
the way to sales and marketing.
The company has proactively developed direct sales relationships
with large corporate customers, as well as hypermarkets and
convenience chain stores, particularly for the coverage of Tier-1
cities.
Direct sales relationships reduce the number of self-run sales
offices and associated staff, lower overall selling costs, and
improve Huiyuan's EBITDA margin.
Moody's expects that Huiyuan's adjusted EBITDA margin - which
rose to 19.6% in 2016 from 9% in 2014 - will stay steady at
around 18%-19% over the next two years.
"However, Huiyuan's ratings are constrained by its product
concentration, weak cash flow generation and resultant modest
financial profile," adds Choi, who is also Moody's Lead Analyst
for Huiyuan.
Huiyuan's product concentration in fruit juices will expose it to
the risks of pricing competition and alternative products,
especially during times of slow consumption.
While Huiyuan's focus on 100% juice products has earned it a
position among the top tier players in China's non-alcoholic
beverage market, its product portfolio only covers a portion of
the same market. Such concentration will reduce the company's
pricing flexibility, and results in high cash flow volatility
when sales slow significantly or pricing competition is keen.
Moody's expects that Huiyuan will generate positive free cash
flow in 2017 and 2018, driven primarily by improving working
capital management and reduced capital spending levels.
Huiyuan has experienced working capital outflow in the last two
years, due to the extended payment terms it has provided to
dealers, against the backdrop of slow sales. In addition, it has
incurred heavy capital expenditure in the last few years, as it
worked to complete its vertically integrated business model.
Moody's expects that both factors - which have weakened the
company's free cash flow - to improve over the next two years.
Huiyuan has proactively reduced its receivables since 2016, and
it will not need to invest significant capital expenditure to
further increase its production and processing centers.
Maintenance capital expenditure will be in the order of RMB150-
RMB200 million per year, and can be fully funded by cash flow
generated from operations.
Moody's expects that Huiyuan will deleverage and improve its
financial profile over the next two years. Moody's further
expects that the company's adjusted debt/EBITDA will fall to
around 6.0x by end-2017, and further to 4.5x by end-2018.
Huiyuan's liquidity is modest. Moody's estimates that at end-June
2017, Huiyuan had RMB3.5-RMB4.5 billion in payment obligations
over the next 12-18 months.
Moody's says that Huiyuan should be able to meet these
obligations, with a combination of its solid cash position and
refinancing activities.
Huiyuan's bond rating is not notched down from its CFR of B1
because the majority of claims - which are mainly composed of
debt - reside at the holding company level.
The stable ratings outlook reflects Moody's expectation that
Huiyuan will maintain its leading market position in China's
juice market, healthy revenue growth, and stable profit margin.
Moody's expects that the company can refinance its payment
obligations through improving working capital management and
reducing capital expenditure.
Upward ratings pressure could arise if Huiyuan: (1) establishes a
track record of stable free cash flow generation; (2) expands its
product variety outside juices; (3) continues to deleverage and
improve its debt maturity profile; and (4) shows improved credit
metrics, such that its debt/EBITDA falls below 4.0x on a
sustained basis.
Downward ratings pressure could arise if Huiyuan exhibits: (1)
weakening sales and/or a weakening market position; and (2) a
deteriorating profit margin and weakened liquidity, due to
increased competition, poor working capital management, or
aggressive financial policies.
Metrics indicative of downward ratings pressure include its
debt/EBITDA failing to trend toward 5.0x-5.5x on a sustained
basis.
The principal methodology used in these ratings was Global Soft
Beverage Industry published in January 2017.
Established in 1992 and headquartered in Beijing, China Huiyuan
Juice Group Limited (Huiyuan) is one of the major players in
China's juice market. The company has manufactured and
distributed fruit juices, vegetable juices and other beverages
for more than 20 years.
It operates four major business segments - Juice Products,
Nectars, Juice Drinks and Other Beverage Products - through
subsidiaries.
The company is 65% owned by its chairman, Mr. Zhu Xinli. In May
2013, Huiyuan completed the acquisition of the entire share
capital of China Huiyuan Industry Holdings, an upstream juice
puree and concentrates producer previously owned by its chairman.
At end-2016, Huiyuan owned 40 production bases, including 28
bottling bases and 12 fruit processing and packaging plants
across China.
CHINA ZHENGTONG: Moody's Withdraws B1 Corporate Family Rating
-------------------------------------------------------------
Moody's Investors Service has withdrawn China ZhengTong Auto
Services Holdings Ltd.'s B1 corporate family rating with a stable
outlook.
RATINGS RATIONALE
Moody's has withdrawn the rating for its own business reasons.
China ZhengTong Auto Services Holdings Ltd. is a top auto
dealership group in China. The company focuses primarily on the
luxury and ultra-luxury car market. It operated 108 dealership
stores in China at end-2016 and listed on the Hong Kong Stock
Exchange in 2010.
FUTURE LAND: Fitch Assigns BB- Rating to USD Senior Notes
---------------------------------------------------------
Fitch Ratings has assigned Future Land Holdings Co., Ltd.'s (FLH)
US dollar senior notes issued by FLH's indirect wholly owned
subsidiary, New Metro Global Limited, a final 'BB-' rating.
The notes, which are unconditionally and irrevocably guaranteed
by FLH, are rated at the same level as FLH's senior unsecured
rating because they constitute direct and senior unsecured
obligations of the company. The assignment of the final rating
follows the receipt of documents conforming to information
already received. The final rating is in line with the expected
rating assigned on July 31, 2017.
FLH is a subsidiary of Future Land Development Holdings Limited
(FLDH, BB-/Positive). Fitch uses a consolidated approach to rate
FLH, based on Fitch Parent and Subsidiary Rating Linkage
criteria.
KEY RATING DRIVERS
Focus on Yangtze River Delta: The group's strategy to focus
resources on the Yangtze River Delta, a wealthy region in eastern
China, and around Shanghai, helped to drive strong sales
turnover, as measured by contracted sales/gross debt, and its
expansion in scale. Sales turnover was 1.7x in 2016 and averaged
1.6x annually since 2012, demonstrating the group's ability to
rapidly generate sales from new land acquisitions. Its fast-churn
strategy enabled it to tap the strong demand in the Yangtze River
Delta to achieve higher contracted sales growth than its peers.
The group recorded exceptionally strong presales in 2016, driven
by better sell-through rates on projects located in Tier 3 and 4
cities, as well as a higher average selling price (ASP) in the
Yangtze River Delta, which accounted for about 81% of contracted
sales. Consolidated gross floor area sold in 2016 increased 45%
yoy to 4.7 million square metres (sq m) and the ASP increased 13%
yoy to CNY10,121/sq m. Fitch expects the group to maintain annual
consolidated contracted sales of CNY60 billion-80 billion in
2017-2018.
Rising Recurring Income: Fitch estimates the group's ratio of
recurring EBITDA to interest expense will improve over the next
three years to 0.3x-0.4x as it expands its shopping mall
portfolio. The group plans to open more than 10 shopping malls in
2017, mainly in Tier 2 cities. The increasing recurring income
from the malls will help to offset volatility in income from its
property development business.
Improving Land Bank Quality: The group had attributable land bank
of 20 million sq m at end-2016, sufficient for three to four
years of development activity. The group increased the share of
sites in Tier 1 and 2 cities in its land bank to 69% at end-2016
from 61% at end-2015. It expects to diversify its land bank by
reducing the proportion of land in the Yangtze River Delta to
around 65%-70% and expand into the Pearl River Delta region in
southern China, central and western China as well as the Bohai
Economic Rim in northern China.
Potential Margin Expansion: EBITDA margin improved slightly to
17.6% in 2016 from 16.6% in 2015. Land premium costs for its land
bank averaged CNY2,627/sq m, which is reasonable compared with
the consolidated ASP of contracted sales of CNY10,121/sq m in
2016. Fitch expects the group's margin to improve gradually to
around 20% in the next two years as ASP for contracted sales
increase and the company's scale expands. The group's EBITDA
margin is low relative to its 'BB' category peers, as its rapid
turnover sacrifices profitability for faster cash returns on its
investment.
Leverage May Pressure Rating: The group's leverage rose to 45% at
end-2016 from 33% at end-2015 following land acquisitions,
particularly in 2H16. Its full-year attributable land premiums
reached CNY47 billion, representing 72% of total presales of
CNY65 billion (including presales from joint ventures). The group
has been sourcing JV partners to share the costs of the more
expensive sites it bought in Shanghai, Nanjing and Suzhou.
Fitch expects the group to reduce leverage in 2017 by chalking up
higher contracted sales and keeping the land-acquisition budget
at the 2016 level. Aggressive land acquisitions with land
premiums relative to contracted sales at a level similar to that
in 2016 will mean that the group's leverage will stay above 40%,
which will exceed the level at which Fitch would consider
positive rating action.
DERIVATION SUMMARY
Fitch uses a consolidated approach to rate FLH, based on Fitch
Parent and Subsidiary Rating Linkage criteria. FLH is 67.1% owned
by FLDH. FLH makes up FLDH's entire exposure to the China
homebuilding business, demonstrating the two companies' strong
strategic and operational ties. FLDH, meanwhile, has raised
offshore capital to fund the group's business expansion. The two
entities share the same management, including their chairman.
The group's ratings are supported by its focus in the Yangtze
River Delta region and the rapid expansion in its scale to a
level comparable to 'BB' rated peers, while maintaining similar
financial profiles. The group's recent aggressive land
acquisitions have increased leverage, but this may be mitigated
by its fast sales churn rate that will allow the group to
deleverage.
The group has the largest scale among 'BB-' peers. Its contracted
sales scale is comparable to Guangzhou R&F Properties Co. Ltd.
(BB/Stable). However, the group's EBITDA margin is lower than
most 'BB' peers, but is likely to improve gradually given rising
contracted sales ASP. Sales churn of 1.8x is highest among 'BB'
peers. Its leverage of 45% is lower than Guangzhou R&F's, but
higher than CIFI Holdings (Group) Co. Ltd.'s (BB-/Positive).
KEY ASSUMPTIONS
Fitch's key assumptions within Fitch rating case for the issuer
include:
- contracted sales to grow 20%-26% in 2017-2019
- gross margins to improve to 20%-21% in 2017-2019
- total land premium represents 50%-60% of contracted sales in
2017-2019
- FLDH maintains a controlling shareholding in FLH and the
operational ties between FLDH and FLH do not weaken
RATING SENSITIVITIES
Future Developments That May, Individually or Collectively, Lead
to Positive Rating Action
- Contracted sales, excluding JVs, remain above CNY40 billion
- Contracted sales/total debt sustained above 1.5x
- Consolidated net debt/adjusted inventory sustained below 40%
- EBITDA margin sustained above 18%
(All the ratios mentioned above are based on parent FLDH's
consolidated financial data)
Future Developments That May, Individually or Collectively, Lead
to Negative Rating Action
- Failure to maintain the positive guidelines will lead to the
Outlook being revised to Stable from Positive.
LIQUIDITY
Sufficient Liquidity: Fitch expects the group to maintain
sufficient liquidity. At end-2016, the group had available cash
of CNY11.9 billion and unutilised credit facilities (uncommitted)
of CNY46.6 billion, which were sufficient to cover the repayment
of its short-term borrowing of CNY10.1 billion.
* CHINA: Next Debt Headache is $580BB of Put Options Coming Due
---------------------------------------------------------------
Bloomberg News reports that Chinese companies battling to cope
with the government-induced tightening in funding markets are
bracing themselves for the next shoe to fall: a wave of early
bond redemptions.
Bloomberg says the nation's businesses sold about 65 percent of
all corporate bonds with put options worldwide, at CNY3.9
trillion ($580 billion). Creditors holding some CNY2 trillion of
mainland notes will be able to exercise those options in the next
two years, forcing issuers to either increase interest payments
or redeem the debt early. Bonds sold by property companies are
most affected, accounting for about a quarter of the CNY2
trillion pile, Bloomberg discloses.
According to Bloomberg, Chinese authorities' efforts to cut
excessive and speculative borrowing have helped drive up costs
across the corporate bond market, the world's largest outside the
U.S., with yields on top-rated notes rising 144 basis points in
the past year. It's also meant the overwhelming majority of
puttable bonds are now ripe for exercising, adding to concerns
expressed by ratings companies that the strain on cash flows will
lead to more missed payments, Bloomberg says.
"Right now liquidity conditions are relatively tight and
financing costs have been high," Bloomberg quotes Christopher
Lee, managing director of corporate ratings at S&P Global
Ratings, as saying in an interview. "The financing environment is
not very conducive for issuers and they may face refinancing
pressure, even defaults."
Some 82 percent of Chinese bonds with these options are now "in
the money," after yields climbed since late 2016, Bloomberg
discloses citing a Fitch Ratings Inc. report from June 28. That
means investors have an incentive to put the bonds back to the
company or ask for higher coupons to match the changed interest-
rate environment. The peak of put redemption will come in 2019,
with 1.4 trillion of bonds with those options becoming
exercisable, according to data compiled by Bloomberg.
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H O N G K O N G
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CHINA OCEAN: Shinhan Again Refuses to Give Audit Opinions
---------------------------------------------------------
Yonhap News Agency reports that an accounting firm again refused
to provide its audit opinions on China Ocean Resources Co., a
Hong Kong-based deep-sea fisheries company listed on the Korean
stock market, saying the company's accounting books were riddled
with problems.
Yonhap relates that in a regulatory filing on Aug. 8, Shinhan
Accounting Corp. said it could not "rationally judge" the
financial status of China Ocean Resources, which is on the verge
of being delisted from the Korean stock market due to its false
financial disclosures.
China Ocean Resources, which listed its stocks in South Korea in
2009, has been accused of posting false public disclosures, the
report says.
In April, Shinhan Accounting had refused to give its audit
opinions on China Ocean Resources, saying it failed to receive
sufficient evidence and feedback from the company, Yonhap
recalls.
Last month, the Financial Services Commission, South Korea's top
financial regulator, reported the chief executive of China Ocean
Resources, Zhang Huoli, to prosecutors on allegations that he
falsified public disclosures, according to Yonhap.
Yonhap says the alleged motive was to lower the company's stock
price to attract more investors seeking to buy cheaper stocks,
according to the regulator.
China Ocean Resources Co., Limited, is a Hong Kong-based holding
company engaged in the management of its subsidiaries. The
Company has one China-based subsidiary, Fujian Province Lianjian
Far-Sea Fishery Co., Ltd., engaged in the fishery business.
Through its subsidiary, the Company provides variety of fishes,
including sharks such as pelagic thresher sharks, gummy sharks,
silly sharks and others, sea breams, groupers such as epinephelus
tsirimenara, sailfish, skipjack tunas, hairtails, cuttlefish and
others. The Company's products are sold to primary wholesalers.
The Company's products are mainly distributed in mainland China
and Hong Kong.
NOBLE GROUP: Does Not Wish to Comment Further on Iceberg Research
-----------------------------------------------------------------
Business Times reports that Noble Group Limited said on Aug. 7
that it does not want to comment further on allegations hurled by
Iceberg Research, having "already commented extensively" on them.
"The company provided a comprehensive update to the market on
July 26, 2017, and will continue to provide further updates as
appropriate," Noble, as cited by Business Times, added.
According to the report, the short release was issued in response
to statements from Iceberg Research on Aug. 3 that cast doubts on
Noble Group's plans to resolve its crisis with plans to sell US
energy units.
Noble had, in the week before, announced radical plans to dispose
of its profitable energy business units to pay off debt, and
warned of a possible loss of as much as US$1.8 billion for the
second quarter, Business Times adds.
Hong Kong-based Noble Group Limited (SGX:N21) --
http://www.thisisnoble.com/-- engages in supply of agricultural,
industrial and energy products. The Company supplies agricultural
and energy products, metals, minerals and ores. Agriculture
products include grains, oilseeds and sugar to palm oil, coffee,
and cocoa. Energy business includes coal, gas and liquid energy
products. In metals, minerals and ores (MMO), it supplies iron
ore, aluminum, special ores and alloys. The Company operates
nearly in 140 locations. It supplies growth demand markets in
Asia and Middle East. Alcoa World Alumina and Chemicals is the
subsidiary of this company.
As reported in the Troubled Company Reporter-Asia Pacific on
Aug. 1, 2017, Moody's Investors Service said that Noble Group
Limited's (Caa1 negative) profit warning for its 2Q 2017 results
is credit negative, and will further increase the challenges the
company faces in turning around its operations and tackling large
near-term debt maturities.
The TCR-AP reported on June 27, 2017, that Fitch Ratings has
downgraded Noble Group Limited's Long-Term Foreign-Currency
Issuer Default Rating (IDR) to 'CCC' from 'B-'. At the same time,
the agency has downgraded Noble's senior unsecured rating and the
ratings on all its outstanding senior unsecured notes to 'CCC'
from 'B-'. The Recovery Rating is 'RR4'. Fitch has removed these
ratings from Rating Watch Negative.
The TCR-AP also reported on May 18, 2017, Moody's Investors
Service has downgraded Noble Group Limited's corporate family
rating and senior unsecured bond ratings to Caa1 from B2, and the
rating on its senior unsecured medium-term note (MTN) program to
(P)Caa1 from (P)B2. The ratings outlook remains negative.
=========
I N D I A
=========
ADHUNIK METALIKS: NCLT Initiates Insolvency Process
---------------------------------------------------
Moneycontrol.com reports that Adhunik Metaliks Limited disclosed
that pursuant to an Order dated Aug. 3, 2017, of the National
Company Law Tribunal, Kolkata Bench, Corporate Insolvency
Resolution Process (CIRP) has been initiated for Adhunik Metaliks
Limited as per the provisions of the Insolvency and Bankruptcy
Code, 2016. A copy of the said order has been received by the
Company on Aug. 4, 2017.
Mr. Sumit Binani, Interim Resolution Professional supported by
Grant Thornton Advisory Pvt Ltd, the financial adviser for
managing the operations of the Company has been appointed for
carrying out the CIRP of the Company, Moneycontrol.com relates.
Upon initiation of CIRP, the powers of the Board of Directors of
the Company has been suspended and shall be exercised by the
Interim Resolution Professional, the report says.
Adhunik Metaliks Limited is an alloy, special and construction
steel manufacturing company. The Company is engaged in the
manufacture and sale of steel, both alloy and non-alloy.
AMIT SPINNING: Insolvency Proceedings Initiated
-----------------------------------------------
Reuters reports that Amit Spinning Industries Ltd said that
Corporate Insolvency Resolution Process (CIRP) has been initiated
in respect of the company under provisions of Insolvency and
Bankruptcy code by order of NCLT effective Aug. 1, 2017.
Powers of board of directors stands suspended, and such powers
shall be vested with Parveen Bansal appointed as Interim
Resolution Professional (IRP), the report relates.
Amit Spinning Industries Limited is an India-based cotton yarn
manufacturer. The Company is not carrying on its business
operations. The Company's operating segments were Textile
Manufacturing and Textile Trading. Its geographical segments were
Within India and Outside India. The Company is a subsidiary of
Spentex Industries Limited.
ARADHANA AUTOMOBILES: CRISIL Reaffirms B Rating on INR6MM Loan
--------------------------------------------------------------
CRISIL has been consistently following up with Aradhana
Automobiles Private Limited (AAPL) for obtaining information
through letters and emails dated April 13, 2017, and May 8, 2017,
among others, apart from telephonic communication. However, the
issuer has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Inventory Funding 6 CRISIL B/Stable (Issuer Not
Facility Cooperating; Rating
Reaffirmed)
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of Aradhana Automobiles 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 Aradhana Automobiles Private
Limited is consistent with 'Scenario 1' outlined in the
'Framework for Assessing Consistency of Information with CRISIL
B' rating category or lower. Based on the last available
information, CRISIL has reaffirmed the rating at 'CRISIL
B/Stable'.
Incorporated in August 2015, AAPL is an authorised dealer of
Hyundai's automobiles in Dehradun and Muzaffarpur. It started
operation in October 2015 and is promoted by Mr. Mohit Goyal, Mr.
Vineet Gupta and Mr. Kapil Gupta. AAPL operates sales, service
and spares showrooms, and deals in all the models manufactured by
Hyundai.
AZURE POWER: Fitch Assigns BB- Rating to USD500MM Sr. Notes
-----------------------------------------------------------
Fitch Ratings has assigned Azure Power Energy Ltd.'s (APEL)
USD500 million senior notes due 2022 a final rating of 'BB-'. The
rating on the notes reflects the credit profile of a restricted
group of operating entities under Azure Power Global Limited
(APGL), a company engaged in solar power generation in India. The
issuance is the group's first US dollar debt.
APEL, a subsidiary of NYSE-listed APGL, will use the proceeds of
the US dollar notes mainly to subscribe to rupee-denominated debt
(a combination of non-convertible debentures and external
commercial borrowings) to be issued by the entities in the
restricted group. APEL will not undertake any business activity
other than investing in the rupee debt via issuance of the US
dollar notes.
The rating benefits from restrictions on cash outflow and
additional indebtedness of the restricted group and reflects the
restricted group's diversified and stable portfolio of solar
power assets, high quality counterparty mix and a moderate
financial profile. The notes also benefit from limits on prior
ranking debt in the restricted group.
The assignment of the final rating follows a review of the final
documentation conforming to the draft documentation previously
received. The final rating is the same as the expected rating
assigned on July 18, 2017.
KEY RATING DRIVERS
Ratings Linked to Restricted Group: Fitch's rating on the
proposed US dollar notes reflects the credit strengths and
weaknesses of the debt structure and assets of the operating
entities that form the restricted group. The US dollar note
holders will benefit from a first charge over the shares of the
SPV. The rupee debt in turn is secured by a first charge on all
assets (excluding current assets and receivables) and cash flows
of the operating entities in the restricted group.
The indentures on the proposed US dollar notes and rupee debt
limit cash outflows and debt incurrence. The restricted group is
not permitted to incur additional debt or make restricted
payments if they raise the restricted group's ratio of gross debt
to EBITDA to above 5.5x subject to certain carve-outs.
Stable Solar Assets: The restricted group's portfolio of 621MW
focuses on solar power, which has lower yield volatility and
seasonal variation arising from weather conditions, compared with
other renewable energy sources. At end-March 2017, 84% of the
restricted group's portfolio was operational with the remaining
one asset expected to be commissioned in September 2017. About
36% of the assets began operation during or prior to the
financial year ended March 2016 (FY16), with consistently strong
performance, reflected in average plant and grid availability of
more than 99% (on a weighted average basis).
Well-Diversified Operations: The restricted group's portfolio is
highly diversified in terms of geography and number of assets,
which limits risks relating to any particular location, weather
pattern and counterparties. The portfolio consists of 17 solar
assets located in eight states, with no state accounting for more
than 31% of generation capacity.
Price Certainty, Volume Risks: The restricted group benefits from
long-term power purchase agreements (PPAs) for all of its
operating and under-development capacities. All of the PPAs have
terms of 25 years, except one 10MW project in Uttar Pradesh with
term of 12 years. While the long-term PPAs provide protection
from price risk, production volumes may vary with solar radiation
patterns.
Moderate to Weak Counterparties: The rating also reflects the
credit profiles of the key counterparties of the restricted
group. The PPAs with NTPC Limited (BBB-/Stable) and Solar Energy
Corporation of India Limited (SECI) make up 33% of its capacity;
with the state-owned power distribution utilities accounting for
the rest. While most state utilities have relatively weaker
credit profiles, the risk is mitigated by the considerable
exposure to NTPC and SECI, which have more robust credit
profiles, and diversification among many counterparties.
FX Risk Largely Hedged: Foreign-exchange risk arises as the
earnings of the restricted group's assets are in Indian rupees
while the notes are denominated in US dollars. However, APEL
plans to fully hedge the semi-annual coupon payments and hedge
the principal using call spreads.
Financial Profile to Improve: Fitch expects the restricted
group's financial profile to improve in FY18 due to the full-year
contribution of about 48% of the portfolio's capacity, which was
commissioned during FY17. Fitch expects the restricted group's
net leverage (net adjusted debt/operating EBITDAR) to improve to
5.5x by end-FY18 (FY17: 8.3x). Fitch believes that free cash
flows may remain negative over the medium term as APGL intends to
add assets to the restricted group. Nonetheless, Fitch expects
the higher EBITDA from additional capacities to further improve
net leverage to below 5.0x and EBITDAR net fixed-charge coverage
to around 2.0x (FY17: 1.7x) over the medium term.
Refinancing Risk: The proposed US dollar notes face refinancing
risk as the cash balance at the restricted group is not likely to
be sufficient to repay the notes at maturity. However, this risk
is mitigated by the restricted group's relatively good access to
funding in the domestic market and potential support from its
strong equity investors.
Parent Guarantee: The ratings on the proposed notes are not
linked to APGL's credit quality, although APGL plans to guarantee
the notes. The proposed guarantee may not be available for the
entire term of notes and will "fall away" if the restricted
group's total debt to EBITDA falls below 5.5x. However, Fitch
expects the restricted group to benefit from APGL's strong
capabilities in development and maintenance of solar projects.
DERIVATION SUMMARY
The rating on the proposed notes reflects restrictions on cash
outflow and additional indebtedness of the restricted group, its
diversified portfolio of solar generation assets, moderate to
weak but diversified counterparties and expectations of a
moderate financial profile. The restricted group's reasonable
scale, well-diversified portfolio of solar assets and relatively
better counterparty credit profile results in its business
profile being better than its peers such as Neerg Energy Ltd
(notes rated B+) and Greenko Investment Company (GIL, notes rated
B+). Fitch expects the restricted group's financial profile to
improve over the medium term and be similar to GIL's but better
than Neerg's.
The rating on the proposed notes is comparable to that assigned
to Greenko Dutch B.V's (GBV) notes (BB-) that are also issued by
a restricted group of entities. GBV's entities have a large
scale, longer operating history and better expected financial
profile, while APGL's restricted group has a better counterparty
profile and more stable solar assets. The credit profile of the
restricted group is a notch below Melton Renewable Energy UK PLC
(MRE UK, BB/Stable) given MRE UK's stronger financial profile,
expectations of positive free cash flow generation, and
favourable UK regulations relating to renewables obligation
scheme despite the price risk on the renewables obligation.
KEY ASSUMPTIONS
Fitch's key assumptions within Fitch rating case for the issuer
include:
- Plant load factors in line with historical performance,
ranging
from 17%-20% for most of the assets.
- Plant-wise tariff in accordance with the power purchase
agreements.
- Strong EBITDA margins in the range of 88%-90% over the
medium term.
- Average receivable period of around 2.5 months.
- Capex of around INR6.5 billion in FY18 and INR3.5 billion-
INR4 billion a year from FY19 onwards.
- No dividend payouts from the restricted group over the medium
term.
RATING SENSITIVITIES
Developments That May, Individually or Collectively, Lead to
Positive Rating Action
- EBITDAR net fixed-charge coverage of 2.5x or more on a
sustained basis. Fixed charges include the cost of forex
hedging;
- Improvement in leverage, as measured by net adjusted
debt/operating EBITDAR, to below 3.5x on a sustained basis
Developments That May, Individually or Collectively, Lead to
Negative Rating Action
- EBITDAR net fixed-charge coverage not meeting Fitch's
expectation of around 2.0x on a sustained basis over the
medium term
- Significant increase in refinancing risk.
- Failure to adequately mitigate foreign-exchange risk.
LIQUIDITY
Liquidity to Improve: The refinancing of the restricted group's
project-level debt by the proposed US dollar notes is likely to
improve the group's liquidity with minimal debt maturities in the
medium term. Further, the restricted group intends to maintain
minimum cash of about USD15 million and limit the amount of
equity investment in new solar assets to be added to the
restricted group to about 70% of operational cash generated.
B L FOUNDRY: CRISIL Reaffirms 'B' Rating on INR12MM Loan
--------------------------------------------------------
CRISIL has been consistently following up with B L Foundry
Private Limited (BFPL's) for obtaining information through
letters and emails dated April 13, 2017, and May 8, 2017, among
others, apart from telephonic communication. However, the issuer
has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Drop Line
Overdraft Facility 12 CRISIL B/Stable (Issuer Not
Cooperating; Rating
Reaffirmed)
Proposed Long Term
Bank Loan Facility 4.84 CRISIL B/Stable (Issuer Not
Cooperating; Rating
Reaffirmed)
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of B L Foundry 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 B L Foundry Private Limited is
consistent with 'Scenario 1' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL B' rating
category or lower. Based on the last available information,
CRISIL has reaffirmed the rating at 'CRISIL B/Stable'.
BFPL, promoted by Mr. Mahavir Prasad Jain, commenced operations
in 2008-09. The company manufactures copper products including
strips, besides brass strips, brass rods, and brass pipes. Its
manufacturing facility is at Kundli, Sonepat (Haryana).
BABANRAOJI SHINDE: CRISIL Reaffirms D Rating on INR127.32MM Loan
----------------------------------------------------------------
CRISIL has been consistently following up with Babanraoji Shinde
Sugar & Allied Industries Limited (BSSAIL; formerly, Indian Sugar
Manufacturing Company (Unit No. 2) Ltd) for obtaining information
through letters and emails dated April 10, 2017, and May 8, 2017,
among others, apart from telephonic communication. However, the
issuer has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 127.32 CRISIL D (Issuer Not
Cooperating; Rating
Reaffirmed)
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of Babanraoji Shinde Sugar &
Allied Industries Limited. This restricts CRISIL's ability to
take a forward looking view on the credit quality of the entity.
CRISIL believes that the information available for Babanraoji
Shinde Sugar & Allied Industries Limited is consistent with
'Scenario 1' outlined in the 'Framework for Assessing Consistency
of Information with CRISIL B rating category or lower. Based on
the last available information, CRISIL has reaffirmed the rating
at 'CRISIL D'.
Incorporated in 2011, BSSAIL is promoted by Mr. Ranjitsingh B
Shinde and his family. The company has set up a sugar plant
(capacity of 5000 tonnes of cane per day) along with a co-
generation power plant of 25 megawatts in Solapur, Maharashtra.
BINDU FOOD: CRISIL Reaffirms D Rating on INR3.25MM LT Loan
----------------------------------------------------------
CRISIL has been consistently following up with Bindu Food
Processors Private Limited (BFPPL) for obtaining information
through letters and emails dated April 12, 2017 and May 4, 2017
among others, apart from telephonic communication. However, the
issuer has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 5 CRISIL D (Issuer Not
Cooperating; Rating
Reaffirmed)
Long Term Loan 3.25 CRISIL D (Issuer Not
Cooperating; Rating
Reaffirmed)
Working Capital Loan .97 CRISIL D (Issuer Not
Cooperating; Rating
Reaffirmed)
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of Bindu Food Processors Private
Limited. This restricts CRISIL's ability to take a forward
looking view on the credit quality of the entity. CRISIL believes
that the information available for Bindu Food Processors Private
Limited is consistent with 'Scenario 1' outlined in the
'Framework for Assessing Consistency of Information with CRISIL
B' rating category or lower. Based on the last available
information, CRISIL has reaffirmed the rating at 'CRISIL D'.
BFPPL was established in 1997 by Mr. Inder Raj Agrawal and his
cousins, Mr. Hanuman Sahay Agrawal and Mr. Anil Agrawal. The
company operates a 21,000 tonne cold storage unit (primarily for
storing potatoes) in Paschim Medinipur. It also provides funding
to farmers against the potatoes stored, which is in turn re-
financed by banks. BFPPL sometimes trades in potatoes to ensure
optimum capacity utilisation of its cold storage unit. The
company is managed by Mr. Inder Raj Agrawal and Mr. Rajendra
Kumar Agrawal.
BIRAMANE HOSTEL: CRISIL Reaffirms D Rating on INR6.51MM Loan
------------------------------------------------------------
CRISIL has been consistently following up with Biramane Hostel
(BH) for obtaining information through letters and emails dated
April 10, 2017, and May 8, 2017, among others, apart from
telephonic communication. However, the issuer has remained non
cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Term Loan 3.49 CRISIL D (Issuer Not
Cooperating)
Term Loan 6.51 CRISIL D (Issuer Not
Cooperating)
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 Biramane Hostel. 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 Biramane Hostel is consistent with
'Scenario 1' outlined in the 'Framework for Assessing Consistency
of Information with CRISIL B rating category or lower. Based on
the last available information, CRISIL has reaffirmed the rating
at 'CRISIL D'.
BH is an AOP of the Biramane family based in Maharashtra. The AOP
provides hostel services to boarding students of Vidya Niketan
High School & Junior College and Vidya Niketan High School at
Panchgani (Maharashtra), which is run by Biramane Education
Foundation (a group trust).
BISUI POULTRY: ICRA Reaffirms 'B' Rating on INR5.11cr Loan
----------------------------------------------------------
ICRA has reaffirmed the long-term rating of [ICRA]B assigned to
the INR4.16-crore term loan, Rs.0.59-crore cash credit facilities
of Bisui Poultry Private Limited. ICRA has also reaffirmed the
long term rating of [ICRA]B for the INR5.11 crore untied limits
of BPPL. The outlook on the long term rating is Stable.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term Loan 4.16 Reaffirmed at [ICRA]B (Stable)
Cash Credit 0.59 Reaffirmed at [ICRA]B (Stable)
Untied limit 5.11 Reaffirmed at [ICRA]B (Stable)
The rating action is based on the best available information. As
part of its process and in accordance with its rating agreement
with BPPL, ICRA has been trying to seek information from the
company so as to undertake a surveillance of the ratings and also
had sent repeated reminders to the company for payment of
surveillance fee that became overdue, but despite repeated
requests by ICRA, the entity's management has remained non-
cooperative. In the absence of requisite information, ICRA's
Rating Committee has taken a rating view based on best available
information. In line with SEBI's Circular No.
SEBI/HO/MIRSD4/CIR/2016/119, dated Nov. 1, 2016, the entity's
rating is now denoted as: "[ICRA]B (Stable) ISSUER NOT
COOPERATING". The lenders, investors and other market
participants may exercise appropriate caution while using this
rating, given that it is based on limited or no updated
information on the entity's performance since the time it was
last rated.
Incorporated in 2012, BPPL is engaged in the business of
commercial layer poultry farming and is involved in sale of table
eggs. The poultry farm has a total capacity of 70,000 layer birds
with facilities located at Bankura, West Bengal. BPPL is also
setting up another unit in the same premise, wherein the company
plans to operate poultry farm with a total capacity of 80,000
layer birds.
CHAHAL SPINTEX: CRISIL Reaffirms 'D' Rating on INR22.81MM Loan
--------------------------------------------------------------
CRISIL has been consistently following up with Chahal Spintex
Limited (CSL) for obtaining information through letters and
emails dated April 13, 2017, and May 8, 2017, among others, apart
from telephonic communication. However, the issuer has remained
non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 1.29 CRISIL D (Issuer Not
Cooperating; Rating
Reaffirmed)
Cash Credit 16.00 CRISIL D (Issuer Not
Cooperating; Rating
Reaffirmed)
Term Loan 22.81 CRISIL D (Issuer Not
Cooperating; Rating
Reaffirmed)
'The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of Chahal Spintex 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 Chahal Spintex Limited is consistent
with 'Scenario 1' outlined in the 'Framework for Assessing
Consistency of Information with CRISIL B' rating category or
lower. Based on the last available information, CRISIL has
reaffirmed the rating at 'CRISIL D/CRISIL D'.
CSL, incorporated in 2007, is promoted by Mr. Sukhdev Singh and
his family members. The company manufactures cotton yarn in
counts of 20 to 30 at its unit in Bhatinda, Punjab; it sells to
traders and merchant exporters. The promoters also manage a
ginning and oil unit under group concern, Chahal Cotton Factory.
FLOCK SUR: ICRA Reaffirms B+ Rating on INR10cr Cash Loan
--------------------------------------------------------
ICRA has reaffirmed the long term rating assigned to the INR10.00
crore fund based limits of Flock Sur India Private Limited at
[ICRA]B+. The outlook on the long term rating is Stable.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based- 10.00 Reaffirmed at [ICRA]B+
Cash Credit (Stable)
The rating action is based on the best available information. As
part of its process and in accordance with its rating agreement
with FIPL, ICRA has been trying to seek information from the
company so as to undertake a surveillance of the ratings, but
despite repeated requests by ICRA, the company's management has
remained non-cooperative. In the absence of requisite
information, ICRA's Rating Committee has taken a rating view
based on best available information. In line with SEBI's Circular
No. SEBI/HO/MIRSD4/CIR/2016/119, dated Nov. 1, 2016, the
company's rating is now denoted as: "[ICRA]B+ (Stable) ISSUER NOT
COOPERATING". The lenders, investors and other market
participants may exercise appropriate caution while using this
rating, given that it is based on limited or no updated
information on the company's performance since the time it was
last rated.
Incorporated in 2013, FIPL is engaged in manufacture of flock
fabrics which find application in furnishing products. Prior to
the incorporation of FIPL, these operations were earlier carried
out under the partnership firm Flocksur India, having FIPL's
promoters Mr. Sunil Girdhar and his wife Mrs. Urvashi Girdhar as
partners. FIPL's manufacturing unit located in Gurgaon, Haryana
produces around 4-5 lakh meters of flocked fabric per month.
HARE KRISHNA: ICRA Reaffirms 'B' Rating on INR8.0cr Loan
--------------------------------------------------------
ICRA has reaffirmed the long-term rating of [ICRA]B assigned to
the INR8.00-crore fund-based facility of Hare Krishna Sponge Iron
Limited. ICRA has also reaffirmed the short-term rating of
[ICRA]A4 assigned to the INR5.50-crore non-fund based bank
facilities of SHKSIL. The outlook on the long-term rating is
Stable.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-based Limits 8.00 [ICRA]B (Stable); reaffirmed
Non Fund-based Limits 5.50 [ICRA]A4; reaffirmed
Rationale
The reaffirmation of the ratings takes into account SHKSIL's
modest scale of operations at present and its weak profitability
indicators. The ratings are also constrained by the high working
capital intensity of operations owing to significant stocking
requirements along with the cyclicality inherent in the steel
industry, which is going through a difficult phase. The ratings
also factor in the company's dependence on external sources for
procurement of raw materials, exposing SHKSIL to volatility in
raw material and finished goods prices, which are likely to keep
SHKSIL's profitability and cash flows volatile. The ratings,
however, derive comfort from the experience of the promoters in
the steel industry and low reliance on external debt, leading to
a comfortable capital structure of the company. ICRA also takes
note of the location-specific advantage of SHKSIL, with proximity
to raw material sources, which reduces supply risks and also
keeps freight costs low.
In ICRA's opinion, the company's ability to increase the scale of
operations while improving profitability and maintain a
conservative capital structure would remain key rating
sensitivities, going forward.
Key rating drivers
Credit strengths
* Experience of the promoters in the steel industry
* Strategic location of the manufacturing unit results in
proximity to raw material sources and customer base, which
reduces freight costs and augments sales
Credit weaknesses
* Modest scale of operations and weak profitability indicators
* Dependence on external sources for procurement of raw
materials exposes it to volatility in raw material prices
* Working capital intensive nature of operations primarily
driven by sizeable inventory holdings
* Cyclical nature of the steel industry likely to keep SHKSIL's
profitability and cash flows volatile
Description of key rating drivers:
Incorporated in May 2003, SHKSIL started manufacturing of sponge
iron from 2004 with an installed capacity of 30,000 metric tonne
per annum (MTPA). In 2006, the company had set up its induction
furnace for manufacturing MS ingots with an installed capacity of
16,200 MTPA. In 2007, the company had set up rolling mill for
manufacturing MS structurals with an installed capacity of 24,000
MTPA. However, the unit was closed down in 2009 as the management
did not consider it a profitable venture. In 2011, the company
had set up a steel-shot manufacturing unit with an installed
capacity of 5,100 MTPA. However, due to sluggish demand and weak
macro-economic scenario prevailing in the country, the company
closed down its induction furnace and steel-shot unit in October
2014 and is operating only its sponge-iron unit. The
manufacturing facilities of the company are located at Siltara,
Chhattisgarh.
The major raw materials required for manufacturing of sponge iron
are iron ore and coal. SHKSIL sources iron ore primarily from
National Mineral Development Corporation (NMDC) and coal from
South Eastern Coalfields Ltd (SECL). Iron ore and coal are
primarily procured against letter of credit or advance payment.
SHKSIL receives a credit period of ~30 days for procurement of
other raw materials from the local suppliers. By virtue of its
location, SHKSIL enjoys proximity to its key raw materials, which
ensures timely availability and also keeps inward freight costs
under control. However, external dependence of SHKSIL for the
procurement of raw materials makes profitability and cash flows
of the company susceptible to the fluctuations in input and
output prices.
The capacity utilisation of the company stood at 96% in FY2017
(P). The average realisation per MT of sponge iron declined to
~INR15,474 / MT in FY2016 from ~Rs. 20,835 / MT during FY2015,
leading to a de-growth in top-line by ~39% during FY2016. There
was further reduction in the sales realisation of sponge iron by
~8% in FY2017. On account of significant decrease in the
realisation of sponge iron with no significant fluctuation in the
prices of raw materials, the OPM deteriorated to -13.13% in
FY2016. On account of decline in prices of raw materials in
FY2017, the company recorded an operating margin of 3.38% in
FY2017. The capital structure of the company remained
conservative in the past few years backed by comfortable net
worth. The coverage indicators of the company remained weak due
to overall modest profitability in FY2017. The working capital
intensity, as indicated by the NWC/OI, increased from ~31% in
FY2015 to ~35% in FY2017.
Incorporated in 2003, SHKSIL manufactures sponge iron with an
installed capacity of 30,000 metric tonne per annum (MTPA).
Besides, the company has capacities for manufacturing mild steel
ingots and steel shots with an installed capacity of 16,200 MTPA
and 5,100 MTPA, respectively, although the operations of the same
are suspended at present. The manufacturing facilities of the
company are located at Siltara, Raipur, Chhattisgarh.
HILLTOP CERAMIC: ICRA Reaffirms B+ Rating on INR5.42cr Loan
-----------------------------------------------------------
ICRA has reaffirmed the long-term rating of [ICRA]B+ on the
INR3.00 crore cash credit facility and the INR2.42 crore term
loans facility of Hilltop Ceramic (HC). ICRA has reaffirmed the
short-term rating of [ICRA]A4 on the INR1.40 crore non-fund based
bank guarantee facility of HC. The outlook on the long-term
rating is 'Stable'.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-based Limits 5.42 [ICRA]B+ (Stable); reaffirmed
Non-fund based Limits 1.40 [ICRA]A4; reaffirmed
Rationale
The rating action is based on the best available information. As
part of its process and in accordance with its rating agreement
with HC, ICRA has been trying to seek information from the
company so as to undertake a surveillance of the ratings and also
had sent repeated reminders to the company for payment of
surveillance fee that became overdue, but despite repeated
requests by ICRA, the company's management has remained non-
cooperative. In the absence of requisite information, ICRA's
Rating Committee has taken a rating view based on best available
information. In line with SEBI's Circular No.
SEBI/HO/MIRSD4/CIR/2016/119, dated Nov. 1, 2016, the company's
rating is now denoted as: "[ICRA]B+ (Stable)/A4 ISSUER NOT
COOPERATING". The lenders, investors and other market
participants may exercise appropriate caution while using this
rating, given that it is based on limited or no updated
information on the company's performance since the time it was
last rated.
Key rating drivers
Credit strengths
* Experience of key promoters in the ceramic industry
* Firm's location in Morbi, India's ceramic hub provides
easy access to raw material sources
Credit weaknesses
* Modest scale of operations
* Financial profile characterized by net loss in FY15 and
modest coverage indicators
* Vulnerability of profitability and cash flows to cyclicality
inherent in the real estate industry, which is the main
consuming sector
* Competitive business environment with presence of large
established organized tile manufacturers as well as
unorganized players
* Partnership firm; any substantial withdrawals from capital
account would impact the net worth and thereby the capital
structure
Description of key rating drivers:
Hilltop Ceramic (HC) is engaged in manufacturing of wall tiles
and floor tiles with its plant situated at Morbi, Gujarat. The
firm was established in 2003 and is engaged into manufacturing of
wall tiles and floor tiles having sizes of 10"x15" and 12"x12".
Raw material and power &fuel cost constitutes major proportion to
the total cost. Hence, availability of cheaper raw material and
fuel can command price competitiveness over its peers. Hilltop
Ceramic sells its products through a network of dealers/
distributors present across the country that caters to both
retail and the institutional customers. It markets its product
under the brand name of 'Hilltop'. HC is predominantly a domestic
player with bulk of the volumes coming from the domestic retail
market. The company's presence in the highly fragmented ceramic
industry, which is characterised by intense competition, limits
its pricing flexibility. This in turn reduces the firm's ability
to effectively pass on the increase in raw material prices to
customers.
Hilltop Ceramic (HC) is a wall tiles and floor tiles manufacturer
with its plant situated at Morbi, Gujarat. The firm was
established in 2003 and is promoted by Mr. Jagdish Kanjiya having
experience of more than a decade in ceramic industry along with
other partners. It currently manufactures wall tiles and floor
tiles of sizes 10"x15" and 12"x12" with the current set of
machineries and production facilities.
J.G. AGRO: CRISIL Reaffirms 'D' Rating on INR4MM Cash Loan
----------------------------------------------------------
CRISIL has been consistently following up with J.G. Agro Foods
(JGAF) for obtaining information through letters and emails dated
April 13, 2017, and May 8, 2017, among others, apart from
telephonic communication. However, the issuer has remained non
cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 4 CRISIL D (Issuer Not
Cooperating; Rating
Reaffirmed)
Proposed Cash
Credit Limit 2 CRISIL D (Issuer Not
Cooperating; Rating
Reaffirmed)
Term Loan 4 CRISIL D (Issuer Not
Cooperating; Rating
Reaffirmed)
Warehouse Receipts 2 CRISIL D (Issuer Not
Cooperating; Rating
Reaffirmed)
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of J.G. Agro Foods. 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 J.G. Agro Foods is consistent with
'Scenario 1' outlined in the 'Framework for Assessing Consistency
of Information with CRISIL B' category or lower. Based on the
last available information, CRISIL has reaffirmed the rating at
'CRISIL D'.
JGAF was established in 2013 as a partnership firm by Mr. Vijay
Kumar Chhabra, Mr. Pritam Dass, and Mr. Pawan Kumar. The firm
processes basmati rice at its plant at Ghubaya village,
Jalalabad, in Punjab. It has a total milling and sorting capacity
of 2 tonnes per hour.
JAGATJIT INDUSTRIES: ICRA Cuts Rating on INR174.44cr Loan to B-
---------------------------------------------------------------
ICRA has downgraded the long-term rating for the INR174.44-crore
fund-based bank facilities and INR26.40-crore unallocated bank
facilities of Jagatjit Industries Limited (JIL) to [ICRA]B- from
[ICRA]B+ earlier. The outlook on the long-term rating continues
to be negative. The short-term rating for the INR25.72-crore
fund-based and non-fund based bank facilities of the company has
been reaffirmed at [ICRA]A4.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term: Fund 174.44 [ICRA]B- (Negative);
Based facilities downgraded
Short Term: Fund
Based facilities 0.72 [ICRA]A4; reaffirmed
Short Term: Non-
Fund Based facilities 25.00 [ICRA]A4; reaffirmed
Unallocated bank 26.40 [ICRA]B- (Negative);
facilities downgraded
Term: Fixed Deposit 20.00 MB- downgraded;
ICRA has also downgraded the medium-term rating for the INR20.00-
crore fixed-deposit program of JIL to MB- from MB+ earlier. The
outlook on the medium-term rating also continues to be negative.
Detailed rationale
JIL announced its quarterly results for Q4 FY2017 as well as
annual results for FY2017 on July 14, 2017. During Q4 FY2017, the
company reported an operating income (OI) of INR128.76 crore and
a net loss of INR46.56 crore compared to an OI of INR165.64 crore
and net loss of INR36.78 crore in Q4 FY2016. During FY2017, the
company reported an operating income (OI) of INR518.15 crore and
a net loss of INR119.09 crore.
The ratings downgrade takes into account continued cash losses
being reported by JIL which together with delays in stated
monetisation of the non-core real estate assets and sizeable
repayment obligations resulted in significant weakening of the
company's liquidity from the last year's asset sale and debt tie-
up. Pressure on the company's liquidity position is corroborated
from its stretched payable position as well as reduced free cash
balances and lower cushion in working capital limits vis-a-vis
drawing power available. Although operational restructuring and
cost-rationalisation initiatives undertaken by JIL have resulted
in a quarter-on-quarter decline in operating losses from
continuing operations over the past few quarters, the pace of
improvement has been slower than envisaged. Further, sizeable
provisions created for non-moving obsolete inventory and doubtful
debts and advances resulted in widening of operating losses
during Q4 FY2017. The negative outlook continues to reflect the
company's dependence on timely monetisation of assets for funding
cash losses as well as meeting its debt-servicing obligations.
Further, the ratings continue to remain constrained by the highly
regulated nature of the industry as well as high level of duties
and taxes which result in vulnerability of sales volume and
profitability to any adverse change in the duty structure.
Nevertheless, the ratings continue to be supported by the
established market presence of JIL in the domestic Indian Made
Foreign Liquor (IMFL) market through its flagship brand,
Aristocrat, with operational track record of more than five
decades. The ratings also continue to take into account the
regular rental income from the leased commercial properties in
the National Capital Region (NCR) and steady sales of the malted
milk food on account of long-term supply contract with GSK
Consumer Healthcare which provides steady accruals and have
cushioned the impact of weakness in the liquor business to some
extent.
Going forward, the company's ability to generate sufficient
accruals from asset monetisation to meet debt servicing in the
near term would be the key rating sensitivity. Further, the
company's ability to improve financial profile through sustained
increase in operational profitability and decline in debt levels
would continue to be the key rating sensitivities.
Key rating drivers
Credit strengths
* Established presence in the domestic IMFL market though
its flagship brand, Aristocrat, with operational track
record of over five decades
* Regular rental income and steady sales of malted milk food
under long-term supply contract with GSK Consumer Healthcare
provide steady accruals and have cushioned the impact of
weakness in the liquor business to some extent
Credit weaknesses
* Continued pressure on IMFL's sales volume, which resulted
in decline in revenues for the fifth consecutive year in
FY2017; high fixed overheads and financial obligations amid
declining sales, resulted in cash losses and substantial
erosion of net worth
* Continued dependence on external funding and timely
monetisation of the surplus real-estate assets for meeting
debt-servicing obligations and for maintaining liquidity
* Significant debt levels and reliance on high cost-debt
funding of the cash losses which along with declining net
worth resulted in further weakening of the financial profile
* Sizeable provisions for obsolete/ non-moving inventory and
doubtful debt and advances raise concerns pertaining to
realisable value of the working capital
* Highly regulated industry with state government controlling
the distribution and pricing in most of the states and also
the application of high levels of duties and taxes
Description of key rating drivers:
JIL has an established presence in the domestic IMFL market
through its flagship brand, Aristocrat, with operational track
record of more than five decades. However over the last couple of
years, the sales volume of its liquor business, which accounts
for ~90% of JIL's revenues, has been declining on account of
operational issues and funding constraints which limited the
promotional activities. This has resulted in a decline in the
company's operating income while the cost structure has remained
relatively inflexible, resulting in sizeable operating losses. As
the losses and repayments have been funded through additional
borrowings, the debt levels have been rising which have increased
the financial obligations and thereby the cash losses as well.
While losses led to erosion of net worth, debt funding of the
cash losses have increased the debt levels to unsustainable
levels, resulting in weak financial profile.
While the incremental debt availed during FY2017 (with bullet
repayment after three years along with interest accrued) helped
the company tide over liquidity pressure in the short term,
improvement in profitability and reduction in high-cost debt
through timely monetisation of non-core assets remain critical
for improvement in the company's financial profile and long-term
sustainability.
ICRA has taken a note of the operational restructuring and cost-
rationalisation initiatives undertaken by JIL which resulted in a
quarter-on-quarter decline in operating losses from continuing
operations over the past few quarters. Nevertheless, the impact
of the same on the company's operational efficiencies on a
sustained basis remains to be seen. This becomes particularly
critical in the light of challenging market scenario given the
highly regulated nature of the industry with the state government
controlling the distribution and pricing in most states, which
limit the pricing and distribution flexibility of the industry
players to pass on the hike in raw material prices and increase
market penetration. Moreover, the liquor industry is subject to
high levels of duties and taxes which result in vulnerability of
sales volume and profitability to any adverse change in the duty
structure. Increase in prices can impact sales while absorbing
the cost increase impacts the profitability.
In addition, JIL manufactures malt extract and malt milk food,
primarily on long-term supply contract with GSK Consumer
Healthcare, which accounts for ~9% of the company's sales. JIL
has also leased commercial properties in Gurgaon (Haryana) and
New Delhi which provide regular rental income of ~Rs. 20-25 crore
annually. Besides getting regular income from these assets, the
company has also mobilised loans against rent receipts and have
utilised the same to fund losses and support liquidity of the
company.
Incorporated in August 1944 by Late Mr. L P Jaiswal, JIL is
primarily involved in manufacturing and distribution of IMFL
under its flagship brand, Aristocrat, in the domestic market. JIL
also manufactures country liquor in Punjab. Liquor sales account
for ~90% of the company's revenues. In addition to liquor, JIL
also manufactures malt extract and malt milk-food, mainly for GSK
Consumer Healthcare, which accounts for ~9% of JIL's revenues.
Moreover, JIL has leased commercial properties in Gurgaon
(Haryana) and New Delhi which provide rental income of ~Rs. 18
crore annually.
JIL's manufacturing unit for IMFL, country liquor as well as malt
extract and malt milk-food, is located in Kapurthala (Punjab).
The unit also has an in-house distillery. Besides this, JIL also
has two bottling units in Alwar (Rajasthan) and Hyderabad
(Telangana).
JAJODIA EXPORTS: ICRA Reaffirms B Rating on INR7.50cr Cash Loan
---------------------------------------------------------------
ICRA has reaffirmed the long-term rating of [ICRA]B assigned to
the INR7.5 crore cash credit facility of Jajodia Exports Private
Limited. The outlook on the long-term rating is stable.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-based-Cash
Credit 7.50 [ICRA]B (Stable); Reaffirmed
Rationale
The rating action is based on the best available information. As
part of its process and in accordance with its rating agreement
with JEPL, ICRA has been trying to seek information from the
company so as to undertake a surveillance of the ratings and also
had sent repeated reminders to the company for payment of
surveillance fee that became overdue, but despite repeated
requests by ICRA, the company's management has remained non-
cooperative. In the absence of requisite information, ICRA's
Rating Committee has taken a rating view based on best available
information. In line with SEBI's Circular No.
SEBI/HO/MIRSD4/CIR/2016/119, dated Nov. 1, 2016, the company's
rating is now denoted as: "[ICRA] B (Stable) ISSUER NOT
COOPERATING". The lenders, investors and other market
participants may exercise appropriate caution while using this
rating, given that it is based on limited or no updated
information on the company's performance since the time it was
last rated.
Incorporated in 2011, Jajodia Exports Private Limited (JEPL) is
engaged in the trading of food grains, diesel engines for
irrigation pumps and completely knocked down E-rickshaw
components. The promoters of JEPL started operations in the year
1995 as a partnership firm under the name of Jajodia Exports and
were initially engaged in the trading of food grains only. Over
the period of time the entity has also ventured into trading of
diesel engines for irrigation pumps and completely knocked down
E-rickshaws. JEPL primarily sells food grains and E-rickshaws
(CKD) in the state of West Bengal, while diesel engines are sold
in the state of Uttar Pradesh, Bihar and West Bengal. Due to
stiff competition from various unorganised players in the trading
segment the pricing is driven by the market.
JALANDHAR AMRITSAR: Ind-Ra Affirms 'IND B-' Bank Loan Rating
------------------------------------------------------------
India Ratings and Research (Ind-Ra) has taken the following
rating action on Jalandhar Amritsar Tollways Ltd's (JATL) bank
loans:
-- INR1,417 mil. (reduced from INR2,118.6 mil.) Bank loans
rating affirmed; Off RWN; Outlook Negative with
IND B-/Negative rating.
KEY RATING DRIVERS
The Negative Outlook reflects JATL's failure to undertake major
maintenance in FY17 due to the lack of a reserve. The company
plans to carry out in FY18, using project cash flows. However,
cash flows are inadequate for carrying out major maintenance and
the company, in Ind-Ra's view, would have to depend on its
sponsor.
Also, the project sponsor (IVRCL Ltd; 'IND D') is facing a weak
financial profile, thus the guarantee extended by it to meet any
shortfall in JATL's debt service, major maintenance and O&M
expenses and premium payment is unlikely to support the rating.
The company is likely to struggle to meet its obligations under
finance or concession agreements.
The affirmation, however, reflects the availability of a funded
debt service reserve account of INR45 million and sufficient cash
balance of INR270.14 million to meet any shortfall in debt
service. JATL clocked toll revenue of INR378.460 million in FY17
(FY16: INR369.76 million). However, according to the management,
an INR150 million claim is still pending with National Highways
Authority of India (NHAI; 'IND AAA'/Stable) towards the loss
during the demonetisation period in November 2016.
During FY19-FY21, the project company would be required pay a
premium of INR1,840 million to NHAI Although there will be no
principal repayment during these years, the debt service
coverages will be less than one.
RATING SENSITIVITIES
Negative: Extended period of liquidity strain and limited
availability of funds to meet debt obligations through the debt
service reserve account will result in a rating downgrade.
Positive: A strong increase in the toll revenue and sustained
improvements in coverage metrics will lead to rating upgrade.
COMPANY PROFILE
JATL is a special purpose company, set up to widen, operate, and
maintain a 49km road stretch on the National Highway 1 between
Jalandhar and Amritsar in Punjab. NHAI has awarded the project to
JATL under a 20-year concession. JATL is wholly owned by IVRCL
Ltd. The project stretch is maintained by IVRCL which has over
two decades of experience in operating toll roads.
JAYPEE INFRATECH: NCLT to Issue Insolvency Order Today
------------------------------------------------------
The Indian Express reports that Allahabad bench of the National
Company Law Tribunal (NCLT) will pronounce an order in the
insolvency petition against Jaypee Infratech today, August 9.
IDBI Bank had referred the company to the bankruptcy court in
June following a nudge from the RBI, the report says.
The report relates that the company said in a regulatory filing
on Aug. 4 that it has withdrawn its reply to the petition. "In
the larger interest of all stakeholders, including the home
owners and depositors, the company has withdrawn its reply. After
hearing both sides, NCLT has reserved its order to be pronounced
on August 9, 2017," Jaypee Infratech said, the Indian Express
relays.
According to the Indian Express, the company reported a net loss
of INR876 crore on INR962 crore in revenues in 2016-17 and its
gross debt stood at INR7,922 crore. The report notes that the
company is part of the 12 large defaulters identified by the RBI
based on a criterion of at least INR5,000 crore worth of debt
exposure, 60% of which being classified as non-performing. The
RBI had on June 13 asked banks to refer a dozen troubled
companies with a combined debt of close to INR2.4 lakh crore to
the NCLT, following several failed attempts at loan recovery, the
report says.
The Indian Express notes that once cases are with the NCLT, the
lenders need to set up a committee of creditors that will come up
with a plan on how the asset will be tackled. If the committee is
unable to find a solution within 180 days - this can be extended
to 270 days -- the borrowing entity will go into liquidation, the
report adds.
Jaypee Infratech Limited (JIL) is engaged in the real estate
development. The Company's business segments include Yamuna
Expressway Project and Healthcare. The Company's Yamuna
Expressway Project is an integrated project, which inter alia
includes construction of 165 kilometers long six lane access
controlled expressway from Noida to Agra with provision for
expansion to eight lane with service roads and associated
structures on build, own, operate and transfer basis. The Company
provides operation and maintenance of Yamuna Expressway for over
36 years, collection of toll and the rights for development of
approximately 25 million square meters of land for residential,
commercial, institutional, amusement and industrial purposes at
over five land parcels along the expressway. The Healthcare
business segment includes hospitals. The Company has commenced
development of its Land Parcel-1 at Noida, Land Parcel-3 at
Mirzapur and Land Parcel-5 at Agra.
K.G.O.C. TERMINALS: ICRA Assigns 'B' Rating to INR47cr LT Loan
--------------------------------------------------------------
ICRA has assigned the long-term rating of [ICRA]B to the
INR47.00-crore unallocated limits of K.G.O.C. Terminals Private
Limited (KGOC). The outlook on the long-term rating is Stable.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Unallocated 47.00 [ICRA]B (Stable)/Assigned
Rationale
The rating factors in the execution risk given the initial stages
of the project where the company is yet to tie-up debt funding
for the project. ICRA notes that commissioning of the project
would be subject to receipt of final approvals post construction
of the storage terminal. The rating considers competition from
existing players in the region. The rating, however, positively
factors in better quality storage facilities proposed to be
constructed and established relationships of the promoters with
the probable customers which would mitigate the off-take risk to
an extent. The rating also considers experienced management
personnel hired by the company to oversee the construction and
operation of the project.
Going forward, the company's ability to obtain financial closure,
timely completion of the project without any cost overrun, and
the company's ability to enter into long-term contracts to ensure
the minimum off-take would be the key rating sensitivities.
Key rating drivers
Credit strengths
* Better quality storage facilities proposed likely to
attract customers; promoters' relationship with probable
customers through existing businesses expected to support
the off-take
* Experienced management on board to oversee the construction
and operations of the storage terminal
Credit weaknesses
* Execution risk given that the company is in the nascent
stages of operation
* Financial closure is yet to be obtained; however, the loan
proposal is in the advanced stages with the bank
* Competition from existing players in the region; however,
better quality storage facilities expected to support
off-take
* Commissioning of the project is subject to final approvals
to be obtained post construction and installation of tanks
Description of key rating drivers
KGOC proposes to set up bulk liquid storage terminal near
Kakinada port at an estimated cost of INR69.63 crore funded by
INR48.05 crore term loan and INR21.58 crore promoters'
contribution. The company has procured land, located at a
distance of 4Km from the port, on long term lease. The company
has applied for term loan, however, the same is yet to be
sanctioned. The promoters have not been involved in the operation
of liquid storage terminal earlier, and hence, have hired
experienced personnel to oversee the operations. Moreover, the
promoters have established relationships with probable customers
through their existing business. Given that the construction is
yet to commence and funding is yet to be tied up, the project
faces execution risk. The company would also face competition
from existing players in the region; however, KGOC proposes to
offer superior quality storage facilities to overcome the
competition.
K.G.O.C. Terminals Private Limited (KGOC), incorporated in June
2012, proposes to set up a bulk liquid storage terminal in
Kakinada with installed storage capacity of 72,017 kilo litres
(KL). The estimated cost of the project is INR69.63 crore, funded
by INR21.58 crore promoter's contribution (equity and unsecured
loans), and INR48.05 crore term loans from bank. The company has
taken 10-acre land on long-term lease for 30 years and
construction work is expected to commence in H2 FY2018.
KOPARGAON AHMEDNAGAR: Ind-Ra Affirms D Rating on INR1,560MM Loan
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed Kopargaon
Ahmednagar Tollways Phase 1 Private Limited's (KATPL) senior
project term loan as follows:
-- INR1,560 mil. Senior project bank loan (Long Term) affirmed
with IND D rating.
KEY RATING DRIVERS
The affirmation reflects KATPL's continued delays in debt
servicing from the last review, as informed by the management,
due to a tight liquidity position. The company's sponsor, Supreme
Infrastructure India Ltd (SIIL: 'IND D') has a weak credit
profile. KATPL has not provided audited FY17 annual reports to
Ind-Ra.
RATING SENSITIVITIES
Positive: Timely debt servicing for at least three consecutive
months could result in a positive rating action.
COMPANY PROFILE
KATPL is a special purpose vehicle incorporated to implement a
42.6km lane extension (two- to four-laning) on the Kopargaon
Ahmednagar section of State Highway 10 in the state of
Maharashtra, under a seven-year concession from the Maharashtra
government. Initially, the estimated project cost was INR2,360
million, which was to be funded by a term loan of INR1,560
million and sponsors' equity of INR800 million. However, the
project has undergone cost overruns of INR530 million, the
funding of which in Ind-Ra's view is ambiguous.
KOTKAPURA MUKTSAR: Ind-Ra Affirms 'D' Rating on INR750MM Loan
-------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed Kotkapura
Muktsar Tollways Private Limited's (KMTPL) senior project bank
loan as follows:
-- INR750 mil. Senior project bank loan (Long term) affirmed
with IND D rating.
KEY RATING DRIVERS
The affirmation reflects KMTPL's continued delays in debt
servicing since the last review, as informed by the management,
due to a tight liquidity position. The company's sponsor, Supreme
Infrastructure India Ltd (SIIL: 'IND D') has a weak credit
profile. KMTPL has not provided audited FY17 annual reports to
Ind-Ra.
RATING SENSITIVITIES
Positive: Timely debt servicing for at least three consecutive
months could result in a positive rating action.
COMPANY PROFILE
KMTPL is a special purpose vehicle promoted by Supreme
Infrastructure BOT Holdings Private Limited (48%), SIIL (26%) and
SPML Infra Limited (26%). It has been set up to build, operate
and maintain a 30km stretch on State Highway 16. The corridor
connects Faridkot Wala chowk in Kotkapura town with Kher Singh
Sidhu Chowk in Muktsar in Punjab.
MALLIKARJUNA PARBOILED: ICRA Reaffirms B+ Rating on INR5cr Loan
---------------------------------------------------------------
ICRA has reaffirmed the long-term rating of [ICRA]B+ assigned to
the INR5.97 crore fund-based bank facilities of Mallikarjuna
Parboiled Binny Rice Mill (MPBRM). ICRA has also reaffirmed the
long term/short term ratings of [ICRA]B+(Stable)/[ICRA]A4
assigned to the INR1.53 crore unallocated limits of MPBRM.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-based-Cash
Credit 5.00 [ICRA]B+ (Stable); Reaffirmed
Fund-based-Term
Loan 0.97 [ICRA]B+ (Stable); Reaffirmed
Unallocated 1.53 [ICRA]B+ (Stable)/[ICRA]A4;
Reaffirmed
The rating action is based on the best available information. As
part of its process and in accordance with its rating agreement
with MPBRM, ICRA has been trying to seek information from the
company so as to undertake a surveillance of the ratings, but
despite repeated requests by ICRA, the company's management has
remained non-cooperative. In the absence of requisite
information, ICRA's Rating Committee has taken a rating view
based on best available information. In line with SEBI's Circular
No. SEBI/HO/MIRSD4/CIR/2016/119, dated Nov. 1, 2016, the
company's rating is now denoted as: "[ICRA]B+(Stable)/[ICRA]A4;
ISSUER NOT COOPERATING". The lenders, investors and other market
participants may exercise appropriate caution while using this
rating, given that it is based on limited or no updated
information on the company's performance since the time it was
last rated.
Mallikarjuna Parboiled Binny Rice Mill (MPBRM) was founded in the
year 1989 by Mr. K. Narayana. MPBRM is engaged in the milling of
paddy and produces raw and boiled rice. The rice mill is located
at Nalgonda district of Telangana. The installed production
capacity of the plant is 7 tons per hour.
MANORAMA HOSPITEX: ICRA Withdraws 'D' Rating on INR11.40cr Loan
---------------------------------------------------------------
ICRA has withdrawn the long-term and short-term rating of [ICRA]D
outstanding for the INR12.00-crore bank facilities of Manorama
Hospitex Private Limited (MHPL).
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Fund-
based Limits 11.40 [ICRA]D withdrawn
Short Term Fund-
based Limits 0.60 [ICRA]D withdrawn
Rationale
The rating assigned to the bank facilities of MHPL have been
withdrawn at the request of the company.
Manorama Hospitex Private Limited (MHPL) was established in 2004,
with the objective of setting up a hospital at Ranaghat, West
Bengal, for the advanced healthcare needs of patients in the
Nadia district, and adjoining areas of West Bengal. MHPL was
established under the norms of the National Accreditation Board
for Hospitals & Healthcare Providers (NABH), with a sanctioned
approval for a 100-bedded hospital. The hospital commenced
operations in January 2015. Currently it operates a multi-
specialty hospital, with a total capacity of 65 beds, treating
patients from the districts of Nadia, Burdwan, South 24 Parganas,
and adjoining areas. Major medical facilities offered by the
hospital include consultations, treatments and surgeries across
various medical disciplines.
MASCONS ENGINEERING: CRISIL Reaffirms D Rating on INR5MM Loan
-------------------------------------------------------------
CRISIL has been consistently following up with Mascons
Engineering & Contracting Company Private Limited (Mascons) for
obtaining information through letters and emails dated April 6,
2017, and May 8, 2017, among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 5 CRISIL D (Issuer Not
Cooperating; Rating
Reaffirmed)
'The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of Mascons Engineering &
Contracting Company 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
Mascons Engineering & Contracting Company Private Limited is
consistent with 'Scenario 1' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL B rating
category or lower. Based on the last available information,
CRISIL has reaffirmed the rating at 'CRISIL D'.
Incorporated in 2004, in Chennai and promoted by Mr. Said
Mohammed, Mascons undertakes civil construction and real estate
development.
P.C.S TRADES: CRISIL Assigns 'B' Rating to INR6MM Cash Loan
-----------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable' rating to the long-term
bank facility of P.C.S Trades (PCST).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 6 CRISIL B/Stable
The rating reflects firm's modest scale and working capital
intensity in operations in the intensely competitive agro
commodities trading business, and below-average financial risk
profile. These rating weaknesses are partially offset by
extensive experience of the proprietor in the agro-commodities
trading industry.
Key Rating Drivers & Detailed Description
Weakness
* Modest scale of operations in highly fragmented cotton yarn
industry
PCST is a small-size player in the highly competitive agro
commodities trading segment as reflected by its revenues of
around INR40 crs in fiscal 2017. The agro-commodity trading
business is highly fragmented, with several small-scale
unorganised players catering to local demand.
* Below average financial risk profile:
The financial risk profile of the firm is below average with low
net worth and highly leveraged capital structure. The debt
protection metrics of the firm are also subdued on account of
high working capital utilization and prioritizing the same over
timely servicing of debt obligations.
Strengths
* Extensive experience of promoters in agro-commodities trading
segment and their established track record:
PCST benefits from the extensive experience of its promoter in
the agro-commodities trading segment. The promoter family has
been in the peas trading business for more than 15 years. Over
the years, the promoters have developed healthy relationships
with their customers, resulting in repeat orders and timely
realisations of receivables.
Outlook: Stable
CRISIL believes PCST will continue to benefit over the medium
term from its proprietor's extensive experience. The outlook may
be revised to 'Positive' if capital infusion or improvement in
revenue, profitability and cash accrual strengthens financial
risk profile. Conversely, the outlook may be revised to
'Negative', if financial risk profile deteriorates due to
increase in working capital borrowings, or if any change in
government policies on agro commodity trading negatively impacts
operations.
Set up in 1997, Virudhunagar (Tamil Nadu)-based P.C.S. Trades
(PCST) is involved in importing and trading of agro commodities
like pulses. The operations of the firm are handled by the
proprietor Mr. PCS Govindaraja Perumal.
PCST reported profit after tax (PAT) of INR0.057 crore on net
sales of INR40.0 crore for fiscal 2017 against PAT of INR0.056
crore on net sales of INR53.63 crore in the previous fiscal.
RELIANCE DIAMOND: CRISIL Reaffirms B+ Rating on INR6.5MM Loan
-------------------------------------------------------------
CRISIL has reaffirmed its rating on the long-term bank facilities
of Reliance Diamond Tools (RDT) at 'CRISIL B+/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 1.6 CRISIL B+/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility 4.9 CRISIL B+/Stable (Reaffirmed)
Term Loan 6.5 CRISIL B+/Stable (Reaffirmed)
The rating continues to reflect the firm's large working capital
requirement and modest scale of operations. These weaknesses are
partially offset by RDT's above-average financial risk profile
because of moderate gearing and comfortable debt protection
metrics, and extensive experience of its proprietor in the tool
manufacturing industry.
Key Rating Drivers & Detailed Description
Weaknesses
* Large working capital requirement: Estimated gross current
assets are 182 days as on March 31, 2017, on account of high
credit extended to customers.
* Modest scale of operations: With estimated revenue of INR18.4
crore in fiscal 2017, scale remains small and will continue to be
so over the medium term despite expected improvement.
Strengths
* Moderate financial risk profile: Networth and gearing likely to
be comfortable at INR4 crore and 1.95 times, respectively, as on
March 31, 2017. Debt protection metrics were also above average,
with net cash accrual to adjusted debt and interest coverage
ratios of 0.23 time and 3 times, respectively, for fiscal 2017.
* Extensive experience of proprietor: Presence of more than 20
years in the tool manufacturing industry has helped the
proprietor to establish strong relationship with a large network
of customers and suppliers.
Outlook: Stable
CRISIL believes RDT will benefit over the medium term from the
extensive experience of its proprietor. The outlook may be
revised to 'Positive' if considerable increase in revenue, while
maintaining profitability, leads to better-than-expected cash
accrual and improvement in liquidity. The outlook may be revised
to 'Negative' if lower-than-expected sales or profitability,
inefficient working capital management, or large, debt-funded
capital expenditure weakens financial risk profile.
Set up in 1994 as a proprietorship concern by Mr. J Ravi, RDT
manufactures diamond-cutting tools used in the automobile
industry.
Profit after tax (PAT) was INR59.5 lakh on an operating income of
INR17.83 crore in fiscal 2016, against a PAT of INR56.1 lakh on
an operating income of INR12.90 crore in the previous fiscal.
ROYAL PLAZA: CRISIL Reaffirms 'D' Rating on INR10MM Term Loan
-------------------------------------------------------------
CRISIL has been consistently following up with Royal Plaza Inn
(RPI) for obtaining information through letters and emails dated
April 6, 2017, and May 8, 2017, among others, apart from
telephonic communication. However, the issuer has remained non
cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 10 CRISIL D (Issuer Not
Cooperating; Rating
Reaffirmed)
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of Royal Plaza Inn. 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 Royal Plaza Inn is consistent with
'Scenario 1' outlined in the 'Framework for Assessing Consistency
of Information with CRISIL B rating category or lower. Based on
the last available information, CRISIL has reaffirmed the rating
at 'CRISIL D'.
RPI, a sole proprietorship entity set up in 2010 by Mr. M P
Shamsudheen, is currently constructing a 108 room hotel in
Arayidathupalam, Kozhikode.
ROYAL POWER: ICRA Assigns B- Rating to INR6.25cr LT Loan
--------------------------------------------------------
ICRA has assigned the long-term rating of [ICRA]B- to the
INR6.25-crore long-term fund-based facilities of Royal Power
Turnkey Implements Private Limited. ICRA has also assigned the
rating of [ICRA]A4 to the INR8.75-crore short-term, non-fund
based limit of RPTIPL. The outlook on the long-term rating is
stable.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term: Fund
based limits 6.25 [ICRA]B- (Stable)/assigned
Short-term: Non-
fund based limits 8.75 [ICRA]A4/assigned
Rationale
The assigned rating takes into account the fairly established
track record of the promoters in executing turnkey power
projects. Gaining support from the Government's thrust on the
transmission and distribution systems, the company's order book
position as on May 2017 stood healthy at ~INR116-crore i.e. 5.9x
of FY2017 OI.
The rating, however, is constrained by the time overruns in the
ongoing work orders leading to a stretched liquidity profile as
evident in consistent high utilisation of working capital
facilities. Further, such elongated project duration leads to
funds being locked in the form of margin and retention money as
well as exposure to high contingent liability in the form of bank
guarantees submitted. ICRA also notes that any further deferment
in the execution will impact the revenue bookings and constrain
the company's capacity to place new bids. The rating also takes
note of the delays in collection from state utilities and the
revenues' vulnerability to the order cycle and execution co-
operation provided by the clients. The rating also factors in the
modest scale of operations with a declining trend in revenues
witnessed over the last three years, inherent execution risk
associated with the project nature of the business, and the
intense competition prevalent in the industry.
Going forward, the timely project completion, diversifying
clientele base to scale up operations and efficiency in the
working capital management will be the key rating sensitivities.
Key rating drivers
Credit strengths
* Long track record of promoters in executing turnkey projects
for setting up substations and electrical distribution lines
* Order book position stands at INR116 crore, which is 5.92x
FY2017 OI
* Favorable demand outlook for power transmission sector given
increased focus and outlay on enhancing transmission and
distribution infrastructure across country
Credit weaknesses
* Small scale of operations; intensely competitive industry with
well established as well as unorganised small scale players
* Inherent execution risks given the project nature of business,
time overruns in projects have impacted the revenue bookings
and constrained the company's capacity to place new bids
* Escalating working capital intensity with considerable overdue
receivables leading to high reliance on external working
capital borrowings and straining the cash flows
* Revenues' vulnerability to the order cycle and execution co-
operation provided by the clients
Description of key rating drivers:
Mr. K.K. Koshy, the promoter, has more than 25 years of
experience as an electrical contractor lending significant
expertise in the execution of projects. In the turnkey execution
projects for substations and transmission lines, the company is
exposed to intense competition from established players. Some of
the strongly positioned players enjoy competitive advantages
because of their backward integration into manufacturing of
transmission and distribution equipment such as different types
of switchgears, transformers, and automation and control panels
required in substations along with the project execution
experience.
As the revenue bookings are vulnerable to the order cycle and
execution co-operation provided by the clients, the operating
income of the company has witnessed de-growth in FY2016 and
FY2017. Instances of delays in site clearance and other requisite
approvals from state utilities have led to extension of the
project completion deadline. The company needs to maintain 15%
margin money as fixed deposit with banks against the bank
guarantees submitted for the project duration, which in light of
project time overruns stretches the liquidity profile of the
company. Furthermore, the stretched payment cycle from clients
and a large quantum of work-in-progress has resulted in sharp
increase in the working capital intensity and thereby high
reliance on external working capital borrowings. Nevertheless,
the capital structure is moderate as represented by a gearing of
less than 1x in FY2016 and FY2017.
RPTIPL's order book status as on May 2017 is healthy with ~Rs.
116-crore of orders (5.9x of FY2017 OI) comprising work orders
from various state utilities and private clients to be executed
over the next two years, which provides adequate revenue
visibility in the near to medium term; though timely execution of
the same will remain crucial for revenue growth.
Going forward, the company's ability to achieve timely completion
of its ongoing projects and improve its financial flexibility
will be critical from the credit perspective. The overall demand
outlook for the transmission and distribution system, essentially
line network, towers, substations, is expected to remain buoyant
over the next three to five-year period, mainly due to the
Government of India's strong thrust for generating capacity
addition through various schemes.
Incorporated in 2011, the company is engaged in executing turnkey
power projects for different government departments in
Maharashtra, Goa and Chhattisgarh. The company is a registered
class 'A' contractor with different state and local governing
bodies. Prior to 2011, the promoter, Mr. K.K Koshy was engaged in
similar line of business of designing and constructing of
electricity infrastructure and also commissioning of lighting
infrastructure and substations through a proprietorship concern
Royal Electricals.
S.N.N TEXTILES: ICRA Lowers Rating on INR18cr Term Loan to B
------------------------------------------------------------
ICRA has revised the long-term rating of [ICRA]B+ on the INR7.00-
crore cash credit facilities and the INR18.00 crore term loans of
S.N.N Textiles Private Limited to [ICRA]B . The outlook on the
long-term rating is 'Stable'.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-based-Cash
Credit 7.00 [ICRA]B (Stable); Revised
from [ICRA]B+(Stable)
Fund-based-Term
Loans 18.00 [ICRA]B (Stable); Revised
from [ICRA]B+(Stable)
Rationale
The assigned rating is constrained by the financial profile
characterized by weak profit margins and return indicators in
recent fiscals. Rating also factors in weak debt protection
metrics arising from aggressive gearing. The rating also takes
into account the high repayment obligations to be met by the
company in the near term. ICRA's rating also takes into account
the company's exposure to volatility of price of cotton and yarn
markets and intense competition in the industry restricting
pricing flexibility. The rating, however favourably factors in
the promoter's experience in the textile industry which aids in
procuring regular orders for the company. ICRA also takes note of
the considerable growth in the revenues in the last two fiscals.
Going forward, the company's ability to improve its scale and
profitability remain key rating sensitivity.
Key rating drivers
Credit strengths
* Experience of the promoters in the textile industry which
aids in retaining existing customers and adding new customers
to the company
* Considerable topline growth, albeit from lower levels, in the
last two fiscals
Credit weaknesses
* Small scale of operations, restricting economies of scale and
financial flexibility
* Financial profile characterised by weak profit margins and
return indicators and aggressive gearing
* Limited pricing flexibility, with profits exposed to
volatility in yarn prices
* Intense competition in the industry with organised and
unorganised players restricting price flexibility
Description of key rating drivers:
The company has recorded considerable growth in top line in the
last two fiscals on account of increase in the installed capacity
leading to increase in volumes. The raw materials are procured
mainly from Gujarat and Karnataka. The company's product profile
includes manufacture of coarser count of yarn (30s-40s) and sales
of grey fabric. The company has moderate customer concentration
as it continues to add new customers every year while retaining
its existing customers. The customers of the company are
predominantly garment manufacturers and yarn resellers Over the
last two fiscals the company has incurred capital expenditure for
expansion of facilities which has been funded mostly through
external borrowings.
The company's debt profile is skewed towards long-term
borrowings. The long term debt mainly includes from financial
institutions and unsecured loans from promoters. Unsecured loans
from promoters have no fixed repayment schedules and are not
interest bearing. The Company has aggressive gearing owing to
high level of borrowings from banks and low networth position on
account of net losses in the last few fiscals. Interest coverage
has been fluctuating between 0.8x and 2.8x in the last three
fiscals owing to movement in profits made by the company. In
FY2016, the company incurred net loss of INR1.4 crore on account
of increase in interest expenses and depreciation charges.
However net cash accrual was INR0.3 crore in FY2016 indicating no
cash losses for the company. The key sensitivity is in the
ability of the company in improving the margins and improving the
revenue growth.
STPL, incorporated in 2013 at Coimbatore, is engaged in the
manufacturing and selling of cotton yarn. The company
manufactures carded cotton yarn in the relatively coarser count
range of 30s to 40s. Its manufacturing facility is located in
Coimbatore (Tamil Nadu) and operates with a total installed
capacity of 14,400 spindles. The company also has installed wind
turbines with a generation capacity of 600 kW.
In FY2016, the company reported a net loss of INR1.4 crore on an
operating income of INR26.9 crore, as compared to a net loss of
INR2.1 crore on an operating income of INR10.1 crore in FY2015.
SAINI ALLOYS: Ind-Ra Assigns 'BB' Issuer Rating, Outlook Stable
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Saini Alloys
Private Limited (SAPL) a Long-Term Issuer Rating of 'IND BB'. The
Outlook is Stable. The instrument-wise rating actions are:
-- INR170 mil. Fund-based limit assigned with IND BB/Stable/IND
A4+ rating;
-- INR10 mil. Non-fund-based limit assigned with IND A4+ rating;
and
-- INR60 mil. Proposed fund-based limit* assigned with
Provisional IND BB/Stable/Provisional IND A4+ rating.
* The rating is provisional and shall be confirmed upon the
sanction and execution of loan documents for the above facility
by SAPL to the satisfaction of Ind-Ra.
KEY RATING DRIVERS
The ratings reflect SAPL's thin EBITDA margin (FY17
(provisional): 1.68%; FY16: 1.25%), as the trading business
contributed higher to revenue compared with the manufacturing
business. High competition in the fragmented steel industry
restricts the scope for any significant margin expansion.
The ratings also reflect SAPL's moderate-to-weak credit metrics
and tight liquidity. In FY17, interest cover (operating
EBITDA/gross interest expense) improved to 1.6x (FY16: 1.5x) and
net financial leverage (total Ind-Ra-adjusted debt/operating
EBITDAR) substantially enhanced to 4.91x (7.19x) due to a fall in
debt (FY17: INR196.81 million; FY16: INR218.55 million) and a
rise in EBITDA (FY17: INR40.01 million; FY16: INR30.23 million).
Its fund-based limit utilisation was 96.07% during the 10 months
ended June 2017. It had a moderate working capital cycle of 34
days in FY17 (FY16: 40 days), with debtor and inventory days
standing at 36 days (36 days) and 21 days (65 days),
respectively.
The ratings, however, are supported by SAPL's moderate scale of
operations and significant promoter experience. Revenue was
INR2,387.53 million in FY17 (FY16: INR2,413.65 million). The
decline in revenue was due to a slowdown in steel manufacturing.
Its promoters have over two decades of experience in the steel
industry.
RATING SENSITIVITIES
Negative: A decline in operating profitability leading to
deterioration in credit metrics could lead to a negative rating
action.
Positive: A substantial rise in operating profitability leading
to an improvement in credit metrics could lead to a positive
rating action.
COMPANY PROFILE
Incorporated in 1999, SAPL is engaged in the manufacturing of
ingots, steel pipes and casting products, and in the trading of
hot-rolled coils.
SAKSHI AUTO: CRISIL Reaffirms 'D' Rating on INR3.32MM LT Loan
-------------------------------------------------------------
CRISIL has been consistently following up with Sakshi Auto Parts
Private Limited (SAPL) for obtaining information through letters
and emails dated April 10, 2017, and May 8, 2017, among others,
apart from telephonic communication. However, the issuer has
remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 2 CRISIL D (Issuer Not
Cooperating; Rating
Reaffirmed)
Long Term Loan 3.32 CRISIL D (Issuer Not
Cooperating; Rating
Reaffirmed)
Proposed Long Term
Bank Loan Facility 4.68 CRISIL D (Issuer Not
Cooperating; Rating
Reaffirmed)
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of Sakshi Auto Parts 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 Sakshi Auto Parts Private
Limited is consistent with 'Scenario 1' outlined in the
'Framework for Assessing Consistency of Information with CRISIL B
rating category or lower. Based on the last available
information, CRISIL has reaffirmed the rating at 'CRISIL D'.
SAPL, incorporated in October 2011, was promoted by Mr. Jitendra
Gupta and Mrs. Premsheela Gupta. The company is engaged in
smelting and refining of battery scrap to recover lead. Its
manufacturing facility is in Shikrapur (Maharashtra) with
installed capacity of 3000 tonnes per month.
SATGURU METALS: ICRA Reaffirms 'D' Rating on INR4.95cr Loan
-----------------------------------------------------------
ICRA has reaffirmed the long-term rating of [ICRA]D assigned to
the INR4.0- crore term loan facility, and INR4.95-crore cash
credit facility of Satguru Metals & Power Private Limited. The
outlook on the long-term rating is stable.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-based-Term
Loan 4.00 [ICRA]D; Reaffirmed
Fund-based-Cash
Credit 4.95 [ICRA]D; Reaffirmed
Rationale
The rating action is based on the best available information. As
part of its process and in accordance with its rating agreement
with SMPPL, ICRA had sent repeated reminders to the company for
payment of surveillance fee that became overdue; however, despite
repeated requests by ICRA, the company's management has remained
non-cooperative. In the absence of requisite information, ICRA's
Rating Committee has taken a rating view based on best available
information. In line with SEBI's Circular No.
SEBI/HO/MIRSD4/CIR/2016/119, dated Nov. 1, 2016, the company's
rating is now denoted as: "[ICRA]D ISSUER NOT COOPERATING". The
lenders, investors and other market participants may exercise
appropriate caution while using this rating, given that it is
based on limited or no updated information on the company's
performance since the time it was last rated.
Satguru Metals & Power Private Limited was established in August,
2008. The company started commercial production with an installed
capacity of 16005 MTPA in MS ingots at its manufacturing unit in
Sundargarh, Odisha. It thereafter expanded its capacity to 18,000
MTPA of MS ingots and 9000 MTPA of pig iron, with the pig iron
facility having been recently commissioned in August, 2012.
SHAKTI ENTERPRISES: CRISIL Reaffirms B- Rating on INR6MM Loan
-------------------------------------------------------------
CRISIL has been consistently following up with Shakti Enterprises
- Bangalore (SE) for obtaining information through letters and
emails dated April 10, 2017, and May 8, 2017, among others, apart
from telephonic communication. However, the issuer has remained
non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Corporate Mortgage Loan 6 CRISIL B-/Stable (Issuer
Not Cooperating; Rating
Reaffirmed)
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of Shakti Enterprises -
Bangalore. 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 Shakti Enterprises - Bangalore
is consistent with 'Scenario 1' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL B rating
category or lower. Based on the last available information,
CRISIL has reaffirmed the rating at 'CRISIL B-/Stable'.
Incorporated in 1983 by Mr .S Bagilthaya in Bengaluru
(Karnataka), SE is engaged in tea packaging.
SHREE DURGA: Ind-Ra Raises Issuer Rating to 'BB+', Outlook Stable
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has upgraded Shree Durga
Khandsari (Sugar) Mills' (SDKSM) Long-Term Issuer Rating to 'IND
BB+' from 'IND BB'. The Outlook is Stable. The instrument-wise
rating actions are:
-- INR48 mil. (reduced from INR70.2 mil.) Long-term loans due on
June 2019-August 2022 upgraded with IND BB+/Stable rating;
-- INR76 mil. Long-term loan due on December 2023 assigned with
IND BB+/Stable rating; and
-- INR77.5 mil. Fund-based working capital limits upgraded with
IND BB+/Stable rating.
KEY RATING DRIVERS
The upgrade reflects an increase in revenue (moderate scale of
operations) and an improvement in credit metrics (comfortable)
from the FY15 levels. Revenue was INR1,055 million in FY17
(provisional) (FY16: INR517 million; FY15: INR748 million). The
improvement in revenue was due to a substantial increase in
selling price and sales volume. In FY17, SDKSM's daily sugar
capacity increased to 2,500 metric tons from 1,800 metric tons.
In FY17, gross interest coverage (operating EBITDA/gross interest
expense) was 4.0x (FY16: 5.6x; FY15: 3.1x) and net leverage
(adjusted net debt/operating EBITDA) was 3.7x (FY16: 3.4x; FY15:
5.0x). The improvement in credit metrics was due to a rise in
EBITDA margin (FY17: 11.9%; FY16: 10.8%; FY15: 4.6%).
The ratings continue to remain constrained by the partnership
nature of organisation. Moreover, the ratings are constrained by
its presence in a highly regulated sugar industry and moderate
liquidity profile. Its utilisation of fund-based limits was 92%
during the 12 months ended June 2017.
The ratings, however, are supported by the completion of its 11MW
in-house power generation unit, which is likely to come online in
FY18 and, thus, have a positive impact on EBITDA margin.
RATING SENSITIVITIES
Negative: Deterioration in liquidity or credit metrics will be
negative for the ratings.
Positive: An improvement in the scale of operations and
liquidity, along with credit metrics staying or improving, will
be positive for the ratings.
COMPANY PROFILE
Incorporated in 1974, SDKSM manufactures sugar at its facility in
Barwani, Madhya Pradesh.
SHRI VEERGANAPATHI: CRISIL Lowers Rating on INR10MM Loan to 'D'
---------------------------------------------------------------
CRISIL has been consistently following up with Shri Veerganapathi
Steels Private Limited (SVSPL) 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 10 CRISIL D (Issuer Not
Cooperating; Downgraded from
'CRISIL B/Stable/Issuer Not
Cooperating')
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 SVSPL. This restricts CRISIL's
ability to take a forward looking view on the credit quality of
the entity. The issuer continues to remain non cooperative.
CRISIL has downgraded its rating on the long-term bank facility
of SVSPL to 'CRISIL D' from 'CRISIL B/Stable'. The rating
reflects delay by SVSPL in meeting debt obligation and continuous
overdrawal in the working capital limit for over 30 days. The
delays are driven by weak liquidity.
SVSPL was established in 1998 and trades in steel products such
as channels, pipes, angles, plates, thermo-mechanically treated
bars, and round/square bars. SVSPL, on a provisional basis,
reported profit after tax (PAT) of INR0.55 Crore on net sales of
INR140.23 Crore for 2014-15 (refers to financial year, April 1 to
March 31), as against PAT of INR0.46 Crore on net sales of
INR195.19 Crore for 2013-14.
SRI BALAJI: ICRA Reaffirms B+ Rating on INR5.0cr Cash Loan
----------------------------------------------------------
ICRA has reaffirmed the long term rating at [ICRA]B+ for the
INR5.00 crore fund based facilities, INR0.80 crore term loan and
INR4.20 crore unallocated limits of Sri Balaji Cotton Agro
Industries (SBCAI). The outlook on the long term rating is
Stable.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term Loan 0.80 [ICRA]B+ (Stable); Reaffirmed
Cash Credit 5.00 [ICRA]B+ (Stable); Reaffirmed
Unallocated 4.20 [ICRA]B+ (Stable); Reaffirmed
Rationale
The rating action is based on the best available information. As
part of its process and in accordance with its rating agreement
with SBCAI, ICRA has been trying to seek information from the
company so as to undertake a surveillance of the ratings, but
despite repeated requests by ICRA, the company's management has
remained non-cooperative. In the absence of requisite
information, ICRA's Rating Committee has taken a rating view
based on best available information. In line with SEBI's Circular
No. SEBI/HO/MIRSD4/CIR/2016/119, dated Nov. 1, 2016, the
company's rating is now denoted as: "[ICRA]B+(Stable) ISSUER NOT
COOPERATING". The lenders, investors and other market
participants may exercise appropriate caution while using this
rating, given that it is based on limited or no updated
information on the company's performance since the time it was
last rated.
Key rating drivers
Credit strengths
* Experienced management with around 30 years of experience
in the cotton ginning and pressing business
* Proximity to cotton producing belt of Adilabad results in
favorable access to raw material
* Cotton lint production using fully automated Technology
Mission on Cotton (TMC) units give better quality output and
better realizations as compared to non-TMC units
Credit weaknesses
* Weak financial profile, characterized by low profitability,
high gearing levels and modest coverage indicators
* Fragmented industry characterized by competition from a large
number of players, restricting ability to pass on hike in
input costs
* Vulnerability of profits to movements in raw material prices
that are subject to seasonality and crop harvest
* Risks arising from partnership nature of firm
Description of key rating drivers:
SBCAI is located at Bhainsa village of Adilabad district of
Telangana. The firm is promoted by Mr. M. Ramnaresh, who has 30
years of experience in the cotton ginning and pressing business.
He is also a partner in Sri Balaji Ginning Factory and Sri Balaji
Cotton Traders. As the mill is located in a major cotton growing
region, all the requirements are met locally through direct
purchases from farmers and from traders. 65% of the procurement
is from Medak, Adilabad, Warangal, Khammam districts and 10% is
from Karnataka through agents and remaining 25% of the
procurement is from local farmers of Bhainsa.
The sales revenue decreased from INR35.00 crore in FY2014 to
INR18.51 crore in FY2015 due to reduced scale of operations
during FY 2015. The revenue contribution from cotton lint
increased to 91% in FY 2015 owing to trading activity of cotton
lint. Out of the total cotton seed sales ~60-70% consists of out
of state sales and remaining from within state sales. ~50-60% of
the cotton seed sales consist of within state sales and 20%
constitutes out of state sales. The firm is not involved in any
exports directly, however makes sales to merchant exporters.
Large number of players operating in the cotton ginning business
has led to fragmented nature of industry and increased
competition amongst the players. This coupled with low additive
nature of business leads to thin profit margins for the firm. The
gearing of the firm is high at 3.26 times as on March 31, 2015
which decreased from 4.16 times as on March 31, 2014 due to
repayment of term loan and lower utilization of working capital
limits. The interest coverage ratio is low at 1.42 times as on
March 31, 2015 end owing to low operating profits.
Sri Balaji Cotton Agro Industries (SBCAI) was incorporated in
year 2011 as a partnership firm and is engaged in cotton ginning
and pressing activities with a product mix of cotton lint and
cotton seed. The firm has a plant located at Bhainsa village of
Adilabad district of Telangana with 30 double roller gins with
capacity to produce 15000 Metric tons of cotton lint per annum.
The firm started its commercial production in January 2012.
SURYA AUTOMOBILES: ICRA Reaffirms B+ Rating on INR4cr Loan
----------------------------------------------------------
ICRA has reaffirmed its long-term rating of [ICRA]B+ on the
INR6.00-crore bank facilities of Surya Automobiles Private
Limited (SAPL). The outlook on the long-term rating is 'Stable'.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term-Cash
Credit 4.00 [ICRA]B+ (Stable); re-affirmed
Long-term-Term
Loan 2.00 [ICRA]B+ (Stable); re-affirmed
Rationale
ICRA's rating reaffirmation takes into account SAPL's established
track record in the two-wheeler dealership business and its
established position as an authorised dealer of Hero MotoCorp
Limited (HML), the market leader in the two-wheeler segment. ICRA
also notes the improvement in the operating margin over the last
two years, which resulted in higher cash accruals. Furthermore,
the company's debt coverage indicators have improved because of
loan repayments and lower utilisation of working capital limits.
However, the rating is constrained by the intense competition
SAPL faces from the dealers of other OEMs such as Honda
Motorcycles and Scooters, Bajaj, and TVS and the pressure to pass
on discounts to end customers. Further, the rating also factors
in the year-on-year decline in sales volume, which resulted in
lower top-line. The rating also takes into consideration the
inherent cyclicality in the automobile industry and the company's
moderate financial profile, marked by high gearing due to large
working capital requirement.
Going forward, the company's ability to improve its margins on a
sustainable basis and improve its debt coverage indicators will
be the key rating sensitivity.
Key rating drivers
Credit strengths
* Extensive experience of the promoters in the two wheeler
business
* Authorised dealer of Hero MotoCorp Limited (HML), the market
leader in the two wheeler segment
Credit weaknesses
* Stiff competition from other OEM dealers such as Honda
Motorcycles and Scooters, Bajaj Auto, Suzuki, and Yamaha
forces company to pass on cash discount to end customers
* Exposure to inherent cyclicality of the automobile industry
* Stable but low profitability
* High industry competition along with low geographical
diversification
Description of key rating drivers:
SAPL is an authorised dealer of Hero MotoCorp Limited (HML) and
is involved in the sale of new motorcycles and scooters,
servicing of two-wheelers and sales of spare parts. The company
has one sales and service outlet in Sri Ganganagar in Uttar
Pradesh. SAPL witnessed a ~6% decline in its top-line, from
INR96.6 crore in FY2015 to INR90.5 crore in FY2016. As per the
provisional financials, the company reported a top-line of
INR89.5 crore in FY2017. The sales of two-wheelers marginally
declined to 20,030 units in FY2017 from 20,411 units in the
previous year.
However, the company's capital structure has improved because of
loan repayments and lower utilisation of working capital limits.
Even though the operating margin improved in FY2017, it continues
to be thin due to high competition.
SAPL was incorporated by the Saneja family in 1998. Mr Bharat
Saneja, Mr Prithiviraj Saneja and Mr Sumit Saneja are the
company's directors. Along with the 2W dealership of Hero
MotoCorp (HML) at Sri Ganganagar, Rajasthan through SAPL, the
promoters have HML dealerships in Abohar (Punjab) and Jaipur
(Rajasthan), through other entities.
In FY2016, the firm reported a net profit of INR0.54 crore on an
operating income of INR90.5 crore, as compared to a net loss of
INR0.61 crore on an operating income of INR96.67 crore in the
previous year. On a provisional basis, the company reported an
operating income of INR89.51 crore in FY2017.
UNITED ELECTRICALS: ICRA Reaffirms B Rating on INR2.65cr Loan
-------------------------------------------------------------
ICRA has reaffirmed the long-term rating of [ICRA]B assigned to
the INR2.35- crore cash credit facility and INR2.65-crore
proposed cash credit facility of United Electricals & Engineering
Private Limited. The outlook on the long-term rating is stable.
ICRA has also reaffirmed the short-term rating of [ICRA]A4
assigned to the INR3.5- bank guarantee facility, INR26.5-crore
proposed bank guarantee facility and Rs.7.0-crore proposed letter
of credit facility of UEEPL.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-based-Cash
Credit 2.35 [ICRA]B (Stable); Reaffirmed
Fund-based-Proposed
Cash Credit 2.65 [ICRA]B (Stable); Reaffirmed
Non-Fund based-
Bank Guarantee 3.50 [ICRA]A4; Reaffirmed
Non-Fund based-
Proposed Bank
Guarantee 26.50 [ICRA]A4; Reaffirmed
Non-Fund based-
Proposed Letter of
Credit 7.00 [ICRA]A4; Reaffirmed
Rationale
The rating action is based on the best available information. As
part of its process and in accordance with its rating agreement
with UEEPL, ICRA has been trying to seek information from the
company so as to undertake a surveillance of the ratings and also
had sent repeated reminders to the company for payment of
surveillance fee that became overdue, but despite repeated
requests by ICRA, the company's management has remained non-
cooperative. In the absence of requisite information, ICRA's
Rating Committee has taken a rating view based on best available
information. In line with SEBI's Circular No.
SEBI/HO/MIRSD4/CIR/2016/119, dated Nov. 1, 2016, the company's
rating is now denoted as: "[ICRA] B (Stable), [ICRA]A4 ISSUER NOT
COOPERATING". The lenders, investors and other market
participants may exercise appropriate caution while using this
rating, given that it is based on limited or no updated
information on the company's performance since the time it was
last rated.
United Electricals & Engineering Private Limited (UEEPL), located
in Odisha, is engaged in the manufacture of both power and
distribution transformers. The company also undertakes projects
pertaining to installation of electrical sub-station. The entity
was set up as a proprietorship firm in 1987 and later in 2004 it
was incorporated as a private limited company. As such, the
promoters of the company have been associated in the field of
transformer manufacturing for more than two decades now. UEEPL
primarily caters to the government sector with nominal presence
in the private sector.
UNIVERSAL INDIA: ICRA Reaffirms B Rating on INR5.0cr Cash Loan
--------------------------------------------------------------
ICRA has reaffirmed its long-term rating of [ICRA]B on the
INR5.00 crore fund-based bank facilities of Universal India Agro
Foods. The outlook on the long-term rating is 'Stable'.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-based-Cash
Credit 5.00 [ICRA]B (Stable); reaffirmed
Rationale
As part of its process and in accordance with its rating
agreement with UIAF, ICRA has been trying to seek information
from the company so as to undertake a surveillance of the
ratings, but despite repeated requests by ICRA, the company's
management has remained non-cooperative. In the absence of
requisite information, ICRA's Rating Committee has taken a rating
view based on best available information. In line with SEBI's
Circular No. SEBI/HO/MIRSD4/CIR/2016/119, dated Nov. 1, 2016, the
company's rating is now denoted as: "[ICRA]B (stable) ISSUER NOT
COOPERATING". The lenders, investors and other market
participants may exercise appropriate caution while using this
rating, given that it is based on limited or no updated
information on the company's performance since the time it was
last rated.
Key rating drivers
Credit Strengths
* Long association of promoter's family in the meat
processing businesses
* High potential in India in terms of raw material availability
and sufficient growth opportunities in the meat export sector
Credit Weakness
* Low capacity utilization owing to low availability of raw
material due to Agricultural and Processed Food Products
Exports Development Authority (APEDA) guidelines
* Inherent business risks due to sensitive nature of business,
which may be exposed to disease out breaks, socially
sensitive nature of industry and political risks as majority
of the revenue is from exports
* Limited track record of the firm as operations started only
in FY2014
Sensitivities
* Robust growth in sales led by improved capacity utilisation
* Unfavorable regulatory changes in key supplying markets
Description of key rating drivers
The rating is constrained on account of limited operational
record of the company, small scale of operations and highly
competitive nature of the industry. Further, the presence of the
company towards the end segments of the meat processing business
necessitates reliance on other meat plants for raw material
(animal waste) results in low availability of raw materials
leading to low capacity utilization. Further, with credit period
offered to large number of customers might leads to high
receivables leading to stretched liquidity position of the
company. ICRA, however, favorably takes note of long association
of the promoter's family in the meat processing businesses.
VAIDYANATH SAHAKARI: CRISIL Reaffirms D Rating on INR81.96MM Loan
-----------------------------------------------------------------
CRISIL has been consistently following up with Vaidyanath
Sahakari Sakhar Karkhana Limited (VSSKL) for obtaining
information through letters and emails dated April 10, 2017 and
May 8, 2017 among others, apart from telephonic communication.
However, the issuer has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 1.73 CRISIL D (Issuer Not
Cooperating; Rating
Reaffirmed)
Cash Credit 81.96 CRISIL D (Issuer Not
Cooperating; Rating
Reaffirmed)
Short Term Loan 28.37 CRISIL D (Issuer Not
Cooperating; Rating
Reaffirmed)
Term Loan 33.60 CRISIL D (Issuer Not
Cooperating; Rating
Reaffirmed)
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of Vaidyanath Sahakari Sakhar
Karkhana 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 Vaidyanath Sahakari
Sakhar Karkhana Limited is consistent with 'Scenario 1' outlined
in the 'Framework for Assessing Consistency of Information with
CRISIL B' rating category or lower. Based on the last available
information, CRISIL has reaffirmed the rating at 'CRISIL D/CRISIL
D'.
VSSKL, set up as a co-operative society in 1996, manufactures
sugar. Its unit is in Parali, Maharashtra, and has sugar cane
crushing capacity of 4500 tonne per day. It also has a 60-
kilolitre-per-day distillery and a 21-megawatt co-generation
power unit.
VIRGIN ROCK: ICRA Puts B+ Rating to Issuer Not Cooperating
----------------------------------------------------------
ICRA has moved the ratings for INR7.41 crore bank facilities of
Virgin Rock Private Limited (VRPL) to the 'Issuer Not
Cooperating' category. The rating is now denoted as:
"[ICRA]B+(Stable)/[ICRA]A4 ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-based-Term 3.00 [ICRA]B+(Stable) ISSUER NOT
Loan COOPERATING; Rating moved to
the 'Issuer Not Cooperating'
category
Fund-based-Cash 3.00 [ICRA]B+(Stable) ISSUER NOT
Credit COOPERATING; Rating moved to
the 'Issuer Not Cooperating'
category
Unallocated 1.41 [ICRA]B+(Stable)/[ICRA]A4
ISSUER NOT COOPERATING;
Rating moved to the 'Issuer
Not Cooperating' category
Rationale
The rating is based on no updated information on the entity's
performance since the time it was last rated in January, 2016.
The lenders, investors and other market participants are thus
advised to exercise appropriate caution while using this rating
as the rating does not adequately reflect the credit risk profile
of the entity. The entity's credit profile may have changed since
the time it was last reviewed by ICRA; however, in the absence of
requisite information, ICRA is unable to take a definitive rating
action.
As part of its process and in accordance with its rating
agreement with VRPL, ICRA has been trying to seek information
from the entity so as to monitor its performance, but despite
repeated requests by ICRA, the entity's management has remained
non-cooperative. In the absence of requisite information, and in
line with SEBI's Circular No. SEBI/HO/MIRSD4/CIR/2016/119, dated
Nov. 1, 2016, ICRA's Rating Committee has taken a rating view
based on the best available information.
Key rating drivers
Credit strengths
* Experience of over five years of the promoters in granite
quarry business
* Geographically diversified revenue base in export market
helps to sustain sales
Credit weaknesses
* Small scale of operation with operating income of INR10.16
crore in FY2015
* Vulnerability of earnings to macro-economic factors such as
the housing and real estate sector in the US and Europe,
China impacting granite exports
* Debt funded cap-ex and consequential high interest burden
will keep the coverage indicators moderate in medium term
* High gearing of 1.37 times in FY2015 albeit comfortable
coverage indicators with interest coverage ratio of 8.06
times and NCA/total debt of 23%
* Earnings exposed to volatility in foreign exchange rates with
substantial revenues derived from exports in the absence of
defined hedging policy
Description of key rating drivers
The company is engaged in mining of granite. The promoters of the
company have more than 6 years of experience in the granite
quarry business and the company's sales are diversified to Italy,
US, Poland, Taiwan, Hong Kong, China, Poland and Switzerland
while a small portion of it comes from the domestic market.
However, the company's small scale of operations in highly
competitive granite processing industry with presence of large
number of players; limited value additive nature of the granite
processing resulting in thin margins; and weak financial profile
of the company characterized by high gearing at 1.37 times as on
March 31, 2015 albeit comfortable coverage indicators with
interest coverage ratio at 8.06 times and NCA/total debt at 23%
Incorporated in 2007, Virgin Rock Private Limited (VRPL) is
primarily into mining of granite. The company operates a quarry
based out of Srikakulam in Andhra Pradesh. The company also
acquired leasing rights for another quarry in Anakapalle, near
Visakhapatnam in FY2013 which is yet to be operational. The
majority of the sales of the company are from exports to Italy,
US, Poland, Taiwan, Hong Kong, China, Poland and Switzerland
while a small portion of it comes from the domestic market. The
company sells its product under brand name "Vizag Blue".
=========
J A P A N
=========
TOSHIBA CORP: Shares Demoted From First Section of TSE
------------------------------------------------------
The Japan Times reports that Toshiba Corp. shares were demoted on
Aug. 1 to the Tokyo Stock Exchange's second section after the
company's liabilities exceeded its assets in the year ended in
March.
According to the report, Toshiba failed to meet the bourse's
listing standards because the conglomerate incurred a negative
net worth due to huge losses from its U.S. nuclear business. Its
shares will be delisted automatically unless it eliminates its
negative net worth by next March, the report says.
The Japan Times relates that the company is likely to face an
uphill battle to remain listed, given delays to its plan to
overcome its negative balance sheet by selling the company's
profitable semiconductor unit.
The demotion of Toshiba follows a similar downgrading for fellow
electronics giant Sharp Corp. last year, the report notes.
The Japan says Toshiba hopes to eliminate its negative net worth
by selling its flash memory arm Toshiba Memory Corp. for at least
JPY2 trillion.
But the company has yet to seal a deal with the government-led
Japan-U.S.-South Korean consortium it has chosen as its preferred
bidder for the unit. Talks stalled after a consortium member,
South Korean chipmaker SK Hynix Inc., demanded voting rights in
the unit instead of only providing loans as initially planned,
the report states.
Moreover, Toshiba's joint chip production partner, U.S.-based
Western Digital Corp., is strongly opposed to the plan and is
seeking to block the sale through a court battle, says the Japan
Times.
According to the Japan Times, Toshiba also faces an Aug. 10
deadline to submit a fiscal 2016 financial report that was
supposed to be presented by the end of June. Whether the company
will be able to gain approval from its auditor for its full-year
accounts is key for it to remain listed.
If the auditor considers Toshiba's financial statements
inadequate, Japan Exchange Group Inc. - which has the TSE under
its umbrella - could decide to delist the Toshiba stock, the
report says.
Even if Toshiba remains listed, it may not be able to return to
the first section within the next five years or so, given TSE
rules that require companies to maintain proper account
settlements, adds the Japan Times.
About Toshiba
Toshiba Corporation (TYO:6502) -- http://www.toshiba.co.jp/-- is
a Japan-based manufacturer involved in five business segments.
The Digital Products segment offers cellular phones, hard disc
devices, optical disc devices, liquid crystal televisions, camera
systems, digital versatile disc (DVD) players and recorders,
personal computers (PCs) and business phones, among others. The
Electronic Device segment provides general logic integrated
circuits (ICs), optical semiconductors, power devices, large-
scale integrated (LSI) circuits for image information systems and
liquid crystal displays (LCDs), among others. The Social
Infrastructure segment offers various generators, power
distribution systems, water and sewer systems, transportation
systems and station automation systems, among others. The Home
Appliance segment offers refrigerators, drying machines, washing
machines, cooking utensils, cleaners and lighting equipment. The
Others segment leases and sells real estate.
As reported in the Troubled Company Reporter-Asia Pacific on
June 19, 2017, S&P Global Ratings said it has kept its 'CCC-'
long-term and 'C' short-term ratings on Japan-based capital goods
and diversified electronics company Toshiba Corp. on CreditWatch
with negative implications. The long- and short-term ratings on
Toshiba have remained on CreditWatch with negative implications
since December 2016, when S&P also lowered the long-term ratings
because of a likelihood that the company might recognize massive
losses in its U.S. nuclear power business. S&P kept them on
CreditWatch negative when it lowered the long- and short-term
ratings in January 2017 and when S&P lowered the long-term
ratings in March 2017.
The ratings remain on CreditWatch, reflecting S&P's view that
creditor banks' support for Toshiba together with the company's
liquidity levels warrant continued close monitoring because its
plan to sell its memory business has yet to materialize and
additional losses or financial burdens might still arise in
connection with its U.S. nuclear power business. S&P continues
to hold the view that without unanticipated, significantly
favorable changes in Toshiba's circumstances, the company might
become unable to fulfill its financial obligations in a timely
manner or might undertake a debt restructuring S&P classifies as
distressed in the next six months.
=================
S I N G A P O R E
=================
EMAS OFFSHORE: High Court Orders Winding Up of Subsidiary
---------------------------------------------------------
Lee Meixian at The Business Times reports that Emas Offshore on
July 26 said the High Court has ordered that a winding up order
be made against its wholly-owned unit, Lewek Champion.
At the hearing for the winding-up application on July 14, the
High Court also ordered that Andrew Grimmett and Lim Loo Khoon of
Deloitte & Touche LLP be appointed as joint and several
liquidators of Lewek Champion, The Business Times discloses.
Based on the unaudited consolidated financial statements of the
group for the financial period ended Nov 30, 2016, Emas Offshore
owed US$68.8 million to Lewek Champion, according to the report.
"Accordingly, the winding up order made against Lewek Champion
may result in a material impact on the financial position of the
group," Emas Offshore said, The Business Times relays.
Singapore-based EMAS Offshore Limited (SGX:UQ4) --
http://www.emasoffshore.com/home/-- engages in the offering of
offshore support, accommodation and offshore production services
to customers in the offshore oil and gas industry throughout the
oilfield lifecycle, spanning exploration, development, production
and decommissioning stages. It operates through two business
segments: Offshore Support and Accommodation Services division,
and Offshore Production Services division.
SINGAPORE AIRLINES: Offers Cabin Crew Unpaid Leave to Cut Costs
---------------------------------------------------------------
AFP reports that Singapore Airlines said on Aug. 4 it is offering
cabin crew unpaid leave in a cost-cutting measure as it struggles
to keep up in an increasingly tough market.
According to the report, the city-state's flag carrier has been
battling strong competition from Asian low-cost carriers and
Middle Eastern airlines, which now boast modern fleets and top-
quality inflight services.
AFP relates that the airline, which posted a net loss in the
fourth quarter of the last financial year, has launched a wide-
ranging review and refused to rule out job cuts.
The company said it had offered its cabin crew the option of
taking unpaid leave between September and November this year due
to a "temporary surplus of crew," the report relays.
"Having temporary surpluses or deficits of cabin crew is not
unusual due to the nature of our business, and this voluntary
scheme over a specific period of time is to ensure that we
efficiently manage crew resources and operational requirements,"
AFP quotes a spokesman as saying.
The spokesman added the airline now plans to offer the option
from time to time in the future, AFP relates.
AFP notes that Singapore Airlines did not say how many of its
8,200 crew members had so far taken up the offer or how many
staff they hoped would choose to partake in the scheme.
It last resorted to the measure in 2009, after the global
financial crisis, AFP states.
Aviation analyst Shukor Yusof of Endau Analytics told AFP it
showed "legacy carriers" were finding it harder to survive.
"(Singapore Airlines's) business travel segment has been hit hard
and more are turning to low cost carriers," Yusof told AFP.
Singapore Airlines Limited is the flag carrier of Singapore.
====================
S O U T H K O R E A
====================
HANJIN SHIPPING: Says Bankruptcy Claims Top $10 Billion
-------------------------------------------------------
Tom Corrigan, writing for The Wall Street Journal Pro Bankruptcy,
reported that South Korea's Hanjin Shipping Co., which roiled
global trade and temporarily marooned more than half a million
cargo containers when it filed for bankruptcy, says it has raised
only a fraction of what it needs to repay creditors, whose claims
total about $10.5 billion.
According to the report, citing court papers filed with the U.S.
Bankruptcy Court in Newark, N.J., the trustee overseeing the
carrier's bankruptcy proceeding in Seoul said Hanjin has raised
about $220 million since filing for bankruptcy nearly a year ago.
The shipper says more than 180 creditors attended an initial
court-supervised meeting, held June 1, the report related.
In the court papers filed Aug. 4, Hanjin said it was unclear when
distributions to creditors would begin, the report further
related. But it made clear those distributions would be carried
out according to a plan worked out in South Korea and consistent
with Korean bankruptcy law, the report said.
About Hanjin Shipping
Hanjin Shipping Co., Ltd., is mainly engaged in the
transportation business through containerships, transportation
business through bulk carriers and terminal operation business.
The Debtor is a stock-listed corporation with a total of
245,269,947 issued shares (common shares, KRW 5000 per share) and
paid-in capital totaling KRW 1,226,349,735,000. Of these shares
33.23% is owned by Korean Air Lines Co., Ltd., 3.08% by Debtor
and 0.34% by employee shareholders' association.
The Company operates approximately 60 regular lines worldwide,
with 140 container or bulk vessels transporting over 100
million tons of cargo per year. It also operates 13 terminals
specialized for containers, two distribution centers and
six Off Dock Container Yards in major ports and inland areas
around the world. The Company is a member of "CKYHE," a
global shipping conference and also a partner of "The
Alliance," another global shipping conference to be
launched in April 2017.
Hanjin Shipping listed total current liabilities of KRW 6,028,543
million and total current assets of KRW 6,624,326 million as of
June 30, 2016.
As a result of the severe lack of liquidity, Hanjin applied to
the Seoul Central District Court 6th Bench of Bankruptcy Division
for the commencement of rehabilitation under the Debtor
Rehabilitation and Bankruptcy Act on Aug. 31, 2016. On the same
day, it requested and was granted a general injunction and the
preservation of disposition of the Company's assets. The Korean
Court's decision to commence the rehabilitation was made on
Sept. 1, 2016. Tai-Soo Suk was appointed as the Debtor's
custodian.
On Sept. 2, 2016, Hanjin Shipping Co. filed in the U.S. a
Voluntary petition under Chapter 15 of the Bankruptcy Code. The
Chapter 15 case is pending in New Jersey (Bankr. D.N.J. Case No.
16-27041) before Judge John K. Sherwood. Cole Schotz P.C. serves
as counsel to Tai-Soo Suk, the Chapter 15 petitioner and the duly
appointed foreign representative of Hanjin Shipping.
*********
Tuesday's edition of the TCR-AP delivers a list of indicative
prices for bond issues that reportedly trade well below par.
Prices are obtained by TCR-AP editors from a variety of outside
sources during the prior week we think are reliable. Those
sources may not, however, be complete or accurate. The Tuesday
Bond Pricing table is compiled on the Friday prior to
publication. Prices reported are not intended to reflect actual
trades. Prices for actual trades are probably different. Our
objective is to share information, not make markets in publicly
traded securities. Nothing in the TCR-AP constitutes an offer
or solicitation to buy or sell any security of any kind. It is
likely that some entity affiliated with a TCR-AP editor holds
some position in the issuers' public debt and equity securities
about which we report.
A list of Meetings, Conferences and Seminars appears in each
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.
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S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Asia Pacific is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Valerie U. Pascual, Marites O. Claro, Joy A. Agravante, Rousel
Elaine T. Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro and
Peter A. Chapman, Editors.
Copyright 2017. All rights reserved. ISSN: 1520-9482.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding,
electronic re-mailing and photocopying) is strictly prohibited
without prior written permission of the publishers.
Information contained herein is obtained from sources believed
to be reliable, but is not guaranteed.
TCR-AP subscription rate is US$775 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance
thereof are US$25 each. For subscription information, contact
Peter Chapman at 215-945-7000 or Joseph Cardillo at 856-381-8268.
*** End of Transmission ***