/raid1/www/Hosts/bankrupt/TCRAP_Public/170814.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Monday, August 14, 2017, Vol. 20, No. 160
Headlines
A U S T R A L I A
BSK PAINTING: First Creditors' Meeting Set for Aug. 21
DRAGON EYE: Second Creditors' Meeting Slated for Aug. 18
EVERSAFE FIRE: Second Creditors' Meeting Set for Aug. 17
FIRM GLASS: First Creditors' Meeting Set for Aug. 21
LILLEY TRANSPORT: First Creditors' Meeting Set for Aug. 17
MMA OFFSHORE: Seeks Help from Deloitte Amid Debt Issues
PEPPER I-PRIME 2017-2: S&P Gives Prelim B Rating to Class F Notes
RIVERCITY SPORTS: Second Creditors' Meeting Set for Aug. 23
RIVET: Subsidiaries Placed in Administration and Receivership
SUPERIOR REMEDIAL: Second Creditors' Meeting Set for Aug. 17
C H I N A
AOXING PHARMACEUTICAL: BOD Appoints Guoan Zhang as New CFO
COUNTRY GARDEN: Tap Issuance No Impact on Fitch BB+ Bond Ratings
COUNTRY GARDEN: Tap Bond Issue No Impact on Moody's Ba1 CFR
LVGEM (CHINA): Fitch Rates US$225MM Senior Notes Due 2020 'B+'
YANZHOU COAL: Moody's Puts B2 CFR Under Review for Upgrade
I N D I A
ABHIMANU ADVENTURE: CRISIL Cuts Rating on INR8MM Term Loan to D
AP TRANSCO: ICRA Reaffirms 'D' Rating on INR350cr 2008 Bond
AVADH BUILDCON: ICRA Withdraws B+ Rating on INR50cr Loan
BHARAT FOOD: ICRA Lowers Rating on INR14.35cr Term Loan to D
BIHAR FOUNDRY: CRISIL Cuts Rating on INR75.09MM Term Loan to 'D'
C. S. INFRACONSTRUCTION: ICRA Lowers Rating on INR125cr Loan to D
DASHMESH EDUCATIONAL: Ind-Ra Assigns BB+ Rating to 5 Bank Loans
DCS LIMITED: Ind-Ra Withdraws 'BB' Long-Term Issuer Rating
FIVE STAR: CRISIL Reaffirms B- Rating on INR0.5MM Cash Loan
GEETA THREADS: CRISIL Upgrades Rating on INR8MM Cash Loan to B+
GREENWORTH INFRA: ICRA Reaffirms B+ Rating on INR10cr Loan
HILITE REALTORS: CRISIL Lowers Rating on INR50MM LT Loan to 'D'
JAGANNATH POLYPACKS: CRISIL Reaffirms 'C' Rating on INR4.5MM Loan
JENSON & NICHOLSON: Insolvency Resolution Process Commences
KRISHI NUTRITION: Ind-Ra Puts BB+ Rating to Not Cooperating
LAKSHMI INFRASTRUCTURE: CRISIL Rates INR3MM Cash Loan at B+
LAXMI NARASIMHA: Ind-Ra Moves B+ Issuer Rating to Not Cooperating
MAJESTIC EXPORTS: Ind-Ra Moves BB- Rating to Not Cooperating
MAROLI NH: Ind-Ra Affirms 'BB+' Rating on Sr. Project Bank Loan
MOBILE TELECOM: CRISIL Assigns B+ Rating to INR14MM Loan
N. A. SHELAR: CRISIL Reaffirms C Rating on INR4MM Loan
PATANJALI DISTRIBUTORS: CRISIL Reaffirms B+ INR18.75M Loan Rating
PAWAN ENTERPRISES: CRISIL Assigns B+ Rating to INR8.5MM Loan
PIMS MEDICAL: CRISIL Assigns B- Rating to INR10MM Cash Loan
PRINS POLYTECH: Ind-Ra Moves B+ Issuer Rating to Not Cooperating
RAJVIR MOTORS: CRISIL Assigns 'B' Rating to INR3.25MM Term Loan
ROHIT'S HERITAGE: Ind-Ra Moves B+ Rating to Not Cooperating
S S OFFSHORE: Ind-Ra Migrates BB Issuer Rating to Not Cooperating
SAMARTH SAI: ICRA Assigns 'B' Rating to INR3cr Cash Loan
SHETH SHIP: ICRA Lowers Rating on INR42cr Loan to D
SHIVPRASAD FOODS: Ind-Ra Puts BB- Rating to Not Cooperating
SHREE RUPANADHAM: ICRA Reaffirms B+ Rating on INR5cr Loan
SHRI GANESH: ICRA Assigns B+ Rating to INR6.0cr Cash Loan
SIDDHI VINAYAK: Ind-Ra Moves B Issuer Rating to Not Cooperating
SIKSHA-O-ANUSANDHAN: ICRA Reaffirms B+ Rating on INR115cr Loan
SUMANGLAM WOOD: ICRA Reaffirms B- Rating on INR6cr Cash Loan
SWAPNIL AGRO: CRISIL Reaffirms 'B' Rating on INR6.0MM Cash Loan
UNITED EXPORTS: CRISIL Reaffirms 'D' Rating on INR35MM Cash Loan
UV BOARDS: ICRA Lowers Rating on INR6cr Cash Loan to B+
VARMORA FOODS: CRISIL Lowers Rating on INR6.75MM Term Loan to D
VTJ SEA: CRISIL Lowers Rating on INR4.25MM LT Loan to 'D'
J A P A N
TAKATA CORP: Nissan to Pay $97.7 Million in Proposed Settlement
TOSHIBA CORP: Wins Auditor Endorsement; Posts JPY965.7BB Net Loss
M A L A Y S I A
MALAYSIAN NEWSPRINT: Goes Bankrupt on Low Newspaper Demand
P H I L I P P I N E S
* PHILIPPINES: Pre-Need Firms Post PHP831.54MM Net Loss in Q1
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A U S T R A L I A
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BSK PAINTING: First Creditors' Meeting Set for Aug. 21
------------------------------------------------------
A first meeting of the creditors in the proceedings of
BSK Painting Services Pty Ltd will be held at the offices of
Hall Chadwick Chartered Accountants, Level 12, 144 Edward Street,
in Brisbane, Queensland, on Aug. 21, 2017, at 11:30 a.m.
Richard Albarran and Glenn Shannon of Hall Chadwick were
appointed as administrators of BSK Painting on Aug. 9, 2017.
DRAGON EYE: Second Creditors' Meeting Slated for Aug. 18
--------------------------------------------------------
A second meeting of creditors in the proceedings of Dragon Eye
Properties Limited has been set for Aug. 18, 2017, at 3:30 p.m.,
at Level 35, EY Building, 200 George 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. 17, 2017, at 3:00 p.m.
Brett Lord and Duncan Clubb of EY were appointed as
administrators of Dragon Eye on July 20, 2017.
EVERSAFE FIRE: Second Creditors' Meeting Set for Aug. 17
--------------------------------------------------------
A second meeting of creditors in the proceedings of Eversafe Fire
Services Pty Ltd has been set for Aug. 17, 2017, at 11:00 a.m.,
at the Boardroom of Chifley Advisory, Level 2, 9 Phillip Street,
in Parramatta, NSW.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the
Company be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by Aug. 16, 2017, at 4:00 p.m.
Gavin Moss and Trent McMillen of Chifley Advisory were appointed
as administrators of Eversafe Fire on July 27, 2017.
FIRM GLASS: First Creditors' Meeting Set for Aug. 21
----------------------------------------------------
A first meeting of the creditors in the proceedings of Firm Glass
and Aluminium Pty. Ltd. will be held at the offices of Cor
Cordis, One Wharf Lane, Level 20, 161 Sussex Street, in Sydney,
NSW, on Aug. 21, 2017, at 3:00 p.m.
Andre Lakomy and Ozem Kassem of Cor Cordis were appointed as
administrators of Firm Glass on Aug. 9, 2017.
LILLEY TRANSPORT: First Creditors' Meeting Set for Aug. 17
----------------------------------------------------------
A first meeting of the creditors in the proceedings of
Lilley Transport Pty Limited will be held at the offices of
Jamieson Louttit & Associates, Penfold House, Suite 73, Level 15
88 Pitt Street, in Sydney, NSW, on Aug. 17, 2017, at 10:00 a.m.
Jamieson Louttit of Jamieson Louttit & Associates was appointed
as administrators of Lilley Transport on July 31, 2017.
MMA OFFSHORE: Seeks Help from Deloitte Amid Debt Issues
-------------------------------------------------------
Bridget Carter and Scott Murdoch at The Australian report that
MMA Offshore has hired financial services firm Deloitte to help
it through its challenges with lenders, which have triggered a
raft of asset sales at a time of low oil prices.
The Australian says the company has been on the radar of hedge
funds since it failed to meet its debt obligations, but now
appears to have put the worst behind it.
Earlier this year, MMA announced it had reached a deal to pay
only the interest on its loans for the short term until it could
improve its position through fleet sales, the report recalls.
It made a AUD45 million principal repayment on June 30 after
selling its Dampier Supply Base to Toll Group for AUD44.1 million
and it extended its loan term for six months until September
2019, the report says.
So far, at least 19 vessels have been sold for AUD55 million, The
Australian discloses.
MMA Offshore Limited (ASX:MRM) -- http://www.mmaoffshore.com/--
is a marine service provider. The Company is engaged in the
provision of marine logistics and supply of base services to the
offshore oil and gas industry. Its segments include Vessels,
Supply Base and Slipway. It owns and operates over 50 vessels
throughout Australia and internationally. It undertakes a range
of offshore marine activities, such as supply operations-drilling
and production; construction support; survey support; subsea
installation support, and tug and barge operations. It holds
interest in Broome Supply Base, which offers open laydown and
undercover storage, offices, casing storage and wash down
facilities. Its Dampier Slipway provides services, such as
routine and emergency dockings, mobilizations and a range of
marine repairs and maintenance services to third party operators.
Its Dampier Supply Base is capable of servicing a range of
vessels engaged in offshore support activities. It operates
approximately two international onshore facilities.
PEPPER I-PRIME 2017-2: S&P Gives Prelim B Rating to Class F Notes
-----------------------------------------------------------------
S&P Global Ratings assigned its preliminary ratings to eight
classes of prime residential mortgage-backed securities (RMBS) to
be issued by Permanent Custodians Ltd. as trustee of Pepper I-
Prime 2017-2 Trust. Pepper I-Prime 2017-2 Trust is a
securitization of prime residential mortgages originated by
Pepper HomeLoans Pty Ltd.
The preliminary ratings reflect:
-- S&P's view of the credit risk of the underlying collateral
portfolio, including its view that the credit support is
sufficient to withstand the stresses it applies. The credit
support for the rated notes comprises note subordination.
-- The underwriting standard and centralized approval process of
the seller, Pepper Homeloans.
-- The availability of a yield-enhancement reserve, amortization
reserve, and overcollateralization amount, which will all be
funded by excess spread to cover potential yield shortfalls
and loss reimbursements and to repay principal on the notes
at various stages of the transaction's term.
-- The extraordinary expense reserve of AUD150,000, funded by
Pepper on or before closing, available to meet extraordinary
expenses. The reserve will be topped up via excess spread if
drawn.
-- S&P's expectation that the various mechanisms to support
liquidity within the transaction, including a liquidity
facility equal to 2.2% of the outstanding balance of the
notes, and principal draws, are sufficient under our stress
assumptions to ensure timely payment of interest.
A copy of S&P Global Ratings' complete report for Pepper I-Prime
2017-2 Trust can be found on RatingsDirect, S&P Global Ratings'
web-based credit analysis system, at
http://www.globalcreditportal.com.
The issuer has not informed S&P Global Ratings Australia Pty Ltd.
whether the issuer is publically disclosing all relevant
information about the structured finance instruments that are
subject to this rating report or whether relevant information
remains non-public.
PRELIMINARY RATINGS ASSIGNED
Class Rating Amount (mil.)
A1-S AAA (sf) 164.0
A1-L AAA (sf) 236.0
A2 AAA (sf) 60.0
B AA (sf) 14.5
C A (sf) 8.5
D BBB (sf) 7.5
E BB (sf) 4.5
F B (sf) 2.5
G NR 2.5
NR--Not rated.
RIVERCITY SPORTS: Second Creditors' Meeting Set for Aug. 23
-----------------------------------------------------------
A second meeting of creditors in the proceedings of Rivercity
Sports & Outdoors Pty Ltd has been set for Aug. 23, 2017, at
11:00 a.m., at the offices of BRI Ferrier (SA) Pty Ltd, Level 4,
12 Pirie Street, in Adelaide, SA.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the
Company be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by Aug. 22, 2017, at 5:00 p.m.
Thomas Stuart Otway and Alan Scott of BRI Ferrier were appointed
as administrators of Rivercity Sports on July 20, 2017.
RIVET: Subsidiaries Placed in Administration and Receivership
-------------------------------------------------------------
Bridget Carter and Scott Murdoch at The Australian report that
subsidiaries of Rivet -- formerly McAleese Transport -- were
placed in voluntary administration and receivership last month.
According to The Australian, logistics arm ARX Group and heavy
haulage division Rivet Mining Services are in the hands of
McGrath Nicol as receiver and BRI Ferrier as voluntary
administrator.
The energy division of Rivet and Rivet Mining Services West
remain in operation, the report says.
It is understood owners thought the divisions would be more
valuable in liquidation, The Australian notes.
Chief executive and founder Mark Rowsthorn initially invested
AUD100 million into the business, but no longer owns any equity,
with the business controlled by its lenders, largely from Asia,
says The Australian.
SUPERIOR REMEDIAL: Second Creditors' Meeting Set for Aug. 17
------------------------------------------------------------
A second meeting of creditors in the proceedings of Superior
Remedial Solutions Pty Ltd has been set for Aug. 17, 2017, at
10:00 a.m., at the offices of Veritas Advisory,
Level 5, 123 Pitt Street, in Sydney, NSW.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the
Company be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by Aug. 16, 2017, at 4:00 p.m.
David Iannuzzi and Steve Naidenov of Veritas Advisory were
appointed as administrators of Superior Remedial on July 13,
2017.
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C H I N A
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AOXING PHARMACEUTICAL: BOD Appoints Guoan Zhang as New CFO
----------------------------------------------------------
Zheng James Chen resigned from his position as Aoxing
Pharmaceutical Company, Inc.'s chief financial officer On Aug. 4,
2017. The Board of Directors appointed Guoan Zhang to serve as
the Company's new chief financial officer.
Mr. Zhang has been the Company's senior vice president of finance
since June 2010 and chief accounting officer since March 2010.
Mr. Zhang also served as the Company's acting chief financial
officer from July 2012 to December 2014 and Nov. 30, 2015, to
Jan. 27, 2016.
About Aoxing
Foster City, California-based Aoxing Pharmaceutical Company,
Inc., has one operating subsidiary, Hebei Aoxing Pharmaceutical
Co., Inc., which is organized under the laws of the People's
Republic of China. Since 2002, Hebei Aoxing has been engaged in
developing narcotics and pain management products. In 2008 Hebei
Aoxing supplemented its product lines by acquiring Shijiazhuang
Lerentang Pharmaceutical Company, Ltd., a specialty
pharmaceutical company focusing on herbal pain related
therapeutics. The Company owns 95% of the equity in Hebei Aoxing.
Aoxing reported net income of $2.24 million for the year ended
June 30, 2016, compared to net income of $5.81 million for the
year ended June 30, 2015. As of March 31, 2017, Aoxing had $62.46
million in total assets, $44.38 million in total liabilities and
$18.08 million in total equity.
BDO China Shu Lun Pan Certified Public Accountants LLP, in
Shanghai, People's Republic of China, issued a "going concern"
qualification on the consolidated financial statements for the
year ended June 30, 2016, citing that the Company accumulated a
large deficit and a working capital deficit that raise
substantial doubt about its ability to continue as a going
concern.
COUNTRY GARDEN: Tap Issuance No Impact on Fitch BB+ Bond Ratings
----------------------------------------------------------------
Fitch Ratings says China-based Country Garden Holdings Co. Ltd.'s
(BB+/Stable) proposed issuance of an additional USD100 million of
its 4.75% senior notes due 2022 will not affect the existing
'BB+' rating on the bonds. The proposed and existing bonds are
rated at the same level as Country Garden's senior unsecured
rating as they represent direct, unconditional, unsecured and
unsubordinated obligations of the company.
Country Garden's ratings are supported by strong contracted sales
growth, high financial flexibility with low interest costs and a
record of strong execution. The ratings are constrained by its
opportunistic growth strategy, which increases financial
performance volatility, and a negative trend in its cash flow
from operations. Moving into higher-tier cities in 2015-2016 is a
positive development in Country Garden's progression towards
becoming a nationwide homebuilder.
Country Garden achieved an 89% increase in attributable
contracted sales to CNY235 billion in 2016, one of the highest
growth rates achieved by Chinese homebuilders during the year.
This was supported by its land-bank repositioning since late
2015, with nearly 60% of 2016 contracted sales coming from
products targeting Tier 1 and 2 cities, compared with 52% in
2015; 65% of its newly acquired CNY128 billion attributable land
bank in 2016 also targets Tier 1 and 2 cities.
On the other hand, Country Garden's fast expansion has been
coupled with financial performance volatility. Fitch has observed
that Country Garden's growth and expansion follow a three- to
four-year cycle. Its 89% contracted sales growth in 2016 raised
its leverage and churn ratio considerably. Leverage peaked at 41%
in 2016, but the higher debt did not pressure the churn ratio (as
measured by attributable contracted sales-to-gross debt) which
rose to 1.5x, compared with its lowest level of 1.1x-1.2x in
2015. Fitch uses three-year average ratios to reflect volatility,
and expects Country Garden to maintain its three-year average
leverage through the cycle at below 35% and its three-year
average asset turnover ratio at around 1.5x.
Country Garden's liquidity is still healthy and sufficient. The
company had CNY96 billion of cash on hand, including CNY12
billion in restricted cash, with undrawn bank facilities of
approximately CNY163 billion, as of end-2016. This was more than
sufficient to cover its short-term debt of CNY46 billion.
COUNTRY GARDEN: Tap Bond Issue No Impact on Moody's Ba1 CFR
-----------------------------------------------------------
Moody's Investors Service says that Country Garden Holdings
Company Limited's Ba1 corporate family rating and senior
unsecured debt rating are unaffected by the company's
announcement of a tap bond offering on its existing USD600
million 4.75% senior notes due July 2022.
The ratings outlook remains stable.
The company plans to use the proceeds to refinance existing debt
and for other general working capital purposes.
"The tap issuance will not materially affect Country Garden's
debt leverage, because Moody's estimates the size will not be
material relative to the company's total debt and the majority of
the proceeds will be used to refinance the company's existing
debt," says Franco Leung, a Moody's Vice President and Senior
Credit Officer.
Moody's forecasts that its debt leverage - as measured by revenue
to adjusted debt (including guarantees for joint ventures and
associates) - will trend towards 105%-110% in the next 12-18
months from around 94% at end-2016, as revenue growth should
outpace the expected increase in debt.
Country Garden's Ba1 ratings reflect its large scale and good
geographic coverage, as well as its established track record in
suburban property development in China.
On the other hand, the ratings are constrained by the challenges
that Country Garden faces in lower-tier cities, where inventory
levels are generally high. The ratings also consider profit
margin pressure in its mass-market portfolio, as well as weakened
credit metrics, due in part to its fast business expansion.
The stable rating outlook reflects Moody's expectation that
Country Garden will maintain its strong sales execution, and
improve debt leverage by continuing to achieve growth in revenue
and controlling the growth in debt.
The principal methodology used in these ratings was Homebuilding
And Property Development Industry published in April 2015.
Country Garden Holdings Company Limited- founded in 1997 and
listed on the Hong Kong Stock Exchange - is a leading Chinese
integrated property developer. At end-2016, its total gross floor
area (GFA) in China, including that of joint ventures and
associates, was 166 million square meters (sqm).
The company owned and operated 51 hotels with a total of 13,810
rooms at end-2016. The hotels are located mainly in Guangdong
Province and complement its township development projects.
LVGEM (CHINA): Fitch Rates US$225MM Senior Notes Due 2020 'B+'
--------------------------------------------------------------
Fitch Ratings has assigned China-based LVGEM (China) Real Estate
Investment Company Limited's (B+/Stable) US$225 million 8.5%
senior notes due 2020 a final rating of 'B+' with a Recovery
Rating of 'RR4'. The notes were issued by its wholly owned
subsidiary, Gemstones International Limited, and are guaranteed
by LVGEM. The notes are rated at the same level as LVGEM's senior
unsecured rating because they constitute its direct and senior
unsecured obligations. The final rating is in line with the
expected rating assigned on Aug. 2, 2017.
LVGEM's ratings are supported by its strong pipeline of property-
development projects, which Fitch expects to significantly
increase the company's scale to above CNY5 billion and widen
EBITDA margin to more than 50% from 2017. The rating is also
supported by LVGEM's good-quality investment property (IP)
portfolio that generates recurring EBITDA to provide the company
a healthy debt service buffer. The rating is constrained by
LVGEM's small scale compared with other Chinese homebuilders
rated 'B+' by Fitch, and its rising leverage due to expansion in
the property-development segment. Fitch expects LVGEM's net
debt/adjusted inventory to trend towards 45% from 41% at end-
2016.
KEY RATING DRIVERS
Small Regional Player, Growing Sales: Fitch expects LVGEM's
contracted sales to steadily expand to CNY10 billion over 2017-
2018, from less than CNY4 billion before 2016. LVGEM, whose
inventory is mainly made up of completed development properties
in Shenzhen, had volatile contracted sales in 2014-2016, ranging
from CNY830 million in 2016 to CNY3.4 billion in 2015. However,
its Shenzhen projects LVGEM Hongwan Garden and Mangrove Bay No. 1
Phase 1 will start sales in 2017-2018, and will be followed by
the Liguang and Meijing urban redevelopment projects. LVGEM also
expects several project injections from controlling shareholder
Mr. Wong Hong King to help the company further raise contracted
sales.
Urban Redevelopment Focus; Asset Injections: LVGEM has developed
13 projects in Shenzhen as of end-2016, of which 10 involved
urban redevelopment. Fitch expects LVGEM to obtain more urban
redevelopment projects through asset injections in 2017-2019 from
Mr. Wong, who has secured about 12 million square metres (sqm) of
land, mainly in Shenzhen, Dongguan and Zhuhai (three major cities
in Guangdong province).
One of the projects is a large Shenzhen project, which Fitch
expects will have about 4 million sqm of gross floor area (GFA)
and will be injected in 2018-2019. Fitch expects this Shenzhen
project to become LVGEM's flagship urban redevelopment project.
Quality Investment Properties: LVGEM's IP portfolio includes the
Shenzhen NEO complex that has office and retail components, and
three Zoll community retail centres, one of which opened earlier
this year. The Shenzhen NEO complex is located in the city's CBD
and is almost fully occupied. Rents that were up for renewal in
2016 were re-contracted at 15% more on average. The two older
Zoll centres had approximately 90% occupancy rates and positive
rental reversion of more than 10% in 2016.
Recurring Income Coverage to Decline: Fitch expects LVGEM to
generate recurring cash inflow of CNY700 million in 2017 from
rentals from the Shenzhen NEO towers, hotel and carpark rentals,
and its property-management business. Recurring EBITDA/interest
coverage was around 0.6x in 2014-2016 but Fitch expects the ratio
to gradually decline to 0.5x in 2017 and trend towards 0.3x by
end-2019 due to its expansion in the property-development
segment.
High Margin, Moderate Leverage: Fitch expects the property-
development segment to have a gross profit margin of above 60% in
2017-2018 due to sales from the high-margin LVGEM Hongwan Garden
and Mangrove Bay No. 1 projects. This will support the company's
overall EBITDA margin at above 55%. LVGEM's gross profit margin
averaged 42% in 2014-2016, higher than the industry average of
around 20% due to its advantages in obtaining lower-cost urban
redevelopment projects. Its average cost of land was below 20% of
the average selling price for all its Shenzhen projects.
Fitch expects LVGEM's net debt/adjusted inventory of 41% in 2016
to rise in 2018-2019, but remain below the 45% threshold where
Fitch may consider negative rating action, mainly due to the
substantial construction cost and land cost cash outflow
associated with the large Shenzhen urban redevelopment project
before its presales start after 2021.
DERIVATION SUMMARY
LVGEM has a good-quality IP portfolio that includes the centrally
located Shenzhen NEO towers, which enjoyed near full occupancy
and double-digit positive rental reversion on renewal. Fitch
thinks that LVGEM's high-quality IP alone has a business profile
consistent with a 'BB' rating as it has rental EBITDA of more
than USD50 million and above USD1.5 billion of rental assets.
These metrics are comparable with Lai Fung Holdings Limited's
(BB-/Stable) USD60 million in recurring EBITDA and USD2 billion
in IP value. Its recurring EBITDA /gross interest cover was
around 0.6x in 2014-2016; higher than that of most Chinese
homebuilders, which rely on more-risky development properties
sales to service their debt. However, Fitch expects recurring
EBITDA/gross interest cover to deteriorate due to its expansion
in the property-development segment.
LVGEM's small scale and volatile contracted sales constrain the
rating to the 'B' category. Its net debt/adjusted inventory of
41% in 2016 is lower than that of most 'B' rated peers, such as
Yida China Holdings Limited's (B/Positive) 46% and Hong Yang
Group Company Limited's (B/Stable) 53%, and hence in line with a
higher 'B+' financial profile.
KEY ASSUMPTIONS
Fitch's key assumptions within Fitch ratings case for the issuer
include:
- A large Shenzhen urban redevelopment project to be injected in
2018-2019, with LVGEM financing the consideration due to the
controlling shareholder mainly via equity issuance and
shareholder loans.
- LVGEM's contracted sales to reach CNY5 billion in 2017, and
CNY10 billion in 2018.
- Property-development segment's gross profit margin to rise to
68% in 2017 and 65% in 2018, from 47% in 2016.
- Recurring EBITDA to increase to above CNY400 million in 2017-
2018 from CNY380 million in 2016.
Recovery rating assumptions
- The recovery analysis assumes LVGEM would be liquidated in a
bankruptcy because it is an asset trading company.
- Fitch has assumed a 10% administrative claim.
- The liquidation estimate reflects Fitch's view of the value of
inventory and other assets that can be realised and
distributed to creditors.
- Fitch applied a haircut of 20% on its adjusted inventory,
lower than the norm used for its peers, because of its higher-
than-industry profit margin, which implies its inventory is
valued higher than that of peers.
- Fitch applied a 50% haircut to its net property, plant and
equipment.
- Fitch also assumed LVGEM will be able to use 100% of the
CNY1.7 billion in restricted cash to pay debt.
- Based on Fitch calculations of the adjusted liquidation value,
after administrative claims, Fitch estimates the recovery rate
of the offshore senior unsecured debt to be 67%, which
corresponds to a Recovery Rating of 'RR3'. However, LVGEM's
Recovery Rating is capped at 'RR4' because debt of offshore
Chinese holding companies face structural issues as the
onshore operating companies do not provide upstream
guarantees.
RATING SENSITIVITIES
Developments That May, Individually or Collectively, Lead to
Positive Rating Action
- Attributable contracted sales sustained above CNY20 billion
while net debt/adjusted inventory sustained below 35%
- Recurring EBITDA/cash interest sustained above 1.0x
Developments That May, Individually or Collectively, Lead to
Negative Rating Action
- Net debt/adjusted inventory sustained above 45%
- Failing to maintain a project pipeline (including controlling
shareholder's land bank) sufficient for two years of
development
LIQUIDITY
Satisfactory Liquidity: LVGEM's CNY4.7 billion in cash (including
restricted cash) at end-2016 is sufficient to cover CNY3.6
billion in short-term debt. LVGEM has CNY550 million in undrawn
credit facilities, as well as continued support from its
controlling shareholder via asset injections and shareholder
loans. Fitch believes that LVGEM has flexibility in its projects
to easily adjust the pace of development to alleviate its debt
interest burden. Fitch also expects LVGEM to be able to issue
more equity, based on its quality project pipeline, to support
its expansion.
YANZHOU COAL: Moody's Puts B2 CFR Under Review for Upgrade
----------------------------------------------------------
Moody's Investors Service has placed under review for upgrade,
Yanzhou Coal Mining Company Limited's B2 corporate family rating,
as well as the B2 backed senior unsecured rating on the bonds
guaranteed by Yanzhou Coal and issued by its subsidiary, Yancoal
International Resources Development Co., Limited.
The rating action follows the announcement on Aug. 1, 2017 by
Yancoal Australia - a 78% subsidiary of Yanzhou Coal - of its
plan to raise approximately $2.5 billion in equity to fund its
acquisition of Australia-based, Coal & Allied Industries Limited.
Yancoal Australia will launch a 23.6 for 1 pro-rata renounceable
entitlement offer to raise approximately $2.35 billion. Yanzhou
Coal has committed to take up $1.0 billion of its share under the
entitlement offer. The balance of the entitlement offer of around
$1.3 billion is underwritten by investors, including Glencore
Coal Pty Ltd. which will take up $300 million.
In addition, Yancoal Australia will raise $150 million in new
shares, $100 million of which are committed by Shandong Taizhong
Energy Co., Ltd, and $50 million of which by General Nice
Development Ltd.
RATINGS RATIONALE
"The review for upgrade of Yanzhou Coal's ratings reflects
Moody's expectations that Yancoal Australia's financial profile
and operations will improve, upon the successful completion of
the Coal & Allied acquisition," says Gerwin Ho, a Moody's Vice
President and Senior Analyst, and also the International Lead
Analyst for Yanzhou Coal.
Coal & Allied owns majority interests in three of the 10 largest
low-cost mines in Australia. The mines produce high quality
thermal coal products which are of high demand among power
generating companies in Asia. The low cost and high level of
demand result in these mines showing profitable operations.
The successful acquisition of these mines by Yancoal Australia
through the equity issuance would increase Yancoal Australia's
size and turn its operations profitable from the current loss
position.
Such an improvement in Yancoal Australia's profitability would in
turn facilitate debt deleveraging at Yanzhou Coal, because
Yancoal Australia will remain a 65%-owned subsidiary of Yanzhou
Coal, upon completion of the equity raising as currently planned,
and the conversion of Yanzhou Coal's subordinated capital notes
in Yancoal Australia into equity.
These developments could result in upward pressure on Yanzhou
Coal's B2 corporate family rating. The current rating includes a
two-notch uplift to reflect Moody's expectation of extraordinary
financial support from its parent, Yankuang Group Corporation
Limited - which is in turn wholly owned by the Shandong
Provincial Government - in cases of financial distress.
As part of its review, Moody's will focus on the following six
factors:
(1) Any change in the extraordinary financial support available
to Yanzhou Coal from the Yankuang Group;
(2) Any change in Yanzhou Coal's significant role in the coal
industry in Shandong Province;
(3) Yanzhou Coal's liquidity position and access to financing
from Chinese banks, in view of the material levels of short-term
debt that require refinancing;
(4) Yanzhou Coal's levels of capital expenditures and debt
leverage over the next two years;
(5) Yanzhou Coal's ability to raise $1 billion in equity to fund
its participation in Yancoal Australia's equity raising; and
(6) Yankuang Group's ability to provide funding to Yanzhou Coal
in the event that the proceeds from the entitlement offer and the
share placement fall short of $2.5 billion.
The principal methodology used in these ratings was Global Mining
Industry published in August 2014.
Yanzhou Coal Mining Company Limited listed on the Shanghai, Hong
Kong and New York stock exchanges in 1998. At end-2016, it was
56.6%-owned by Yankuang Group Corporation Limited, a state-owned
enterprise that is in turn wholly owned by the Shandong
Provincial Government.
At Dec. 31, 2016, Yanzhou Coal owned and operated 18 coal mines
across China and Australia, including in Shandong and Shanxi
provinces and the Inner Mongolia Autonomous Region in China, as
well as in the Australian states of Queensland, New South Wales
and Western Australia.
=========
I N D I A
=========
ABHIMANU ADVENTURE: CRISIL Cuts Rating on INR8MM Term Loan to D
---------------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facilities
of Abhimanu Adventure Resorts Private Limited to 'CRISIL D' from
'CRISIL B-/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 2 CRISIL D (Downgraded from
'CRISIL B-/Stable')
Term Loan 8 CRISIL D (Downgraded from
'CRISIL B-/Stable')
The downgrade reflects irregularity in paying instalments on the
term loan due to stretched liquidity.
Key Rating Drivers & Detailed Description
* Delay in debt servicing: Liquidity is stretched as the net cash
accruals are not sufficient to service the annual debt repayment
obligations; these are being funded by promoters' loans and
advances and other short term borrowings.
Weakness
* Small scale of operations in an intensely competitive industry,
and geographical concentration in revenue
With expected revenue of INR3 crore in fiscal 2018, the scale of
operations remain small in the intensely competitive hospitality
industry. Also, the company has only two hotels in just one
region, unlike entities that own a chain of hotels spread across
many locations. One hotel has 30 rooms, a banquet hall, two
lawns, and a restaurant. The other, still to be completed, has 10
cottages running out of the total plan of 100. Though the scale
of operations is likely to increase gradually, it would remain
small over the medium term on account of intense competition in
the hospitality industry and geographical concentration in
revenue.
Below-average financial risk profile and tightly matched cash
accrual vis-a-vis debt obligation
The total outside liabilities to adjusted net worth ratio was
moderate at 1.4 times as on March 31, 2017, and is expected to
stay at this level over the medium term. Debt protection metrics
were weak: the interest coverage ratio is expected to remain
below 1.1 times and the net cash accrual to debt ratio at a 1%,
over the medium term.
Strengths
* Extensive experience of the promoters
The promoters have an established relationship with many tour
operators and travel agencies, leading to increase in the
occupancy levels during the initial stage of operations. They
have also been running an educational institute through another
group company. The extensive entrepreneurial experience of the
promoters along with the established relationship with various
tour operators will help the company to increase its scale of
operations gradually over the medium term.
* Locational advantage of the hotel
The company's hotel, Ram Shehar Fort, is located in the semi-
hilly city of Nalagarh, in the Solan district of Himachal
Pradesh. Nalagarh is a gateway to Himachal Pradesh in North
India, 300 kilometre (km) from North Delhi and 60 km from
Chandigarh. The company will continue to benefit from the
locational advantage of its hotel over the medium term.
Incorporated in 2010, AARPL owns and operates Ram Shehar Fort, a
hotel in Nalagarh. It commenced operations in June 2014;
operations are managed by Mr. Parveen Bansal and Mr. Sanjeev
Bansal. It has converted a historical fort into a hotel (under
the heritage hotel category), which has 30 rooms, a banquet hall,
two lawns, and a restaurant.
Profit after tax (PAT) was INR0.13 crore on revenue of INR1.82
crore in fiscal 2017, against PAT of INR0.09 crore on revenue of
INR1.32 crore in fiscal 2016.
AP TRANSCO: ICRA Reaffirms 'D' Rating on INR350cr 2008 Bond
-----------------------------------------------------------
ICRA has reaffirmed the long-term rating assigned to the
INR975.0-crore bond programme of Transmission Corporation of
Andhra Pradesh Limited at [ICRA]D.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
AP Transco Vidyut Bond 200.0 [ICRA]D; Reaffirmed
Series I / 2006
AP Transco Vidyut Bond
Series II / 2006 300.0 [ICRA]D; Reaffirmed
AP Transco Vidyut Bond
Series I / 2007 125.0 [ICRA]D; Reaffirmed
AP Transco Vidyut Bond
Series I / 2008 350.0 [ICRA]D; Reaffirmed
Rationale
The rating reaffirmation takes into consideration the continued
lack of clarity on the final apportionment of assets and
liabilities between successor entities of AP Transco namely
Transmission Corporation of Telangana Limited and AP Transco (for
residual Andhra Pradesh) post bifurcation of the state of Andhra
Pradesh in June 2014; and the non-availability of disclosures
pertaining to debt servicing of listed NCDs from AP Transco to
the stock exchanges.
ICRA had earlier reassigned the rating assigned to the bond
programme of AP Transco to ICRA[D] owing to non-adherance to the
structured payment mechanism involving timely invocation of
guarantee by the trustee in case of a funding shortfall, which in
turn arose due to dispute with respect to the terms of
bifurcation between TS Transco and AP Transco.
While AP Transco claims that the last two half yearly repayments
were made in a timely manner, there is lack of regulatory
disclosures pertaining to the same. Additionally, the uncertainty
with respect to bifurcation of assets between TS Transco and AP
Transco persists. ICRA will, hence, continue to monitor updates
pertaining to the same on a regular basis.
Transmission Corporation of Andhra Pradesh Limited was
incorporated in the year 1998 subsequent to the first transfer
scheme of State Electricity Reform Act for unbundling of
erstwhile Andhra Pradesh State Electricity Board into two
entities, Andhra Pradesh Transmission Corporation Limited and
Andhra Pradesh Generation Corporation Limited (APGENCO). As per
the Electricity act, 2003 "Transcos" are not allowed to trade in
power, thus necessitating separation of trading and transmission
functions. Currently, AP Transco is engaged in transmission and
state load dispatch center activities. In accordance with the
section 53 of The Andhra Pradesh Reorganisation Act, 2014, AP
Transco has been bifurcated into two successor entities namely
Transmission Corporation of Telangana Limited (TS Transco) and AP
Transco (for residual Andhra Pradesh).
AVADH BUILDCON: ICRA Withdraws B+ Rating on INR50cr Loan
--------------------------------------------------------
ICRA has withdrawn the long-term rating of [ICRA]B+ assigned to
the INR50.00 crore fund based facility of Avadh Buildcon in
accordance with ICRA's policy on withdrawal and suspension.
Rationale: The rating is withdrawn as there is no amount
outstanding against the rated instrument.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based Limit 50.00 [ICRA]B+ withdrawn
Established as a partnership firm in 2013, Avadh Buildcon is
engaged in developing residential projects in Surat, Gujarat.
'Avadh Carolina is its first real estate project, comprising 20
towers with 461 units of 3BHK apartments. The construction
commenced from May 2014 and the completion is scheduled for
September 2017. The firm also has other group concerns involved
in real estate development in Surat.
BHARAT FOOD: ICRA Lowers Rating on INR14.35cr Term Loan to D
------------------------------------------------------------
ICRA has revised its long-term rating to [ICRA]D from [ICRA]B- on
the INR27.00-crore fund-based facilities of Bharat Food & Agro
Products (BFAP).
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 12.65 [ICRA]D; downgraded from
[ICRA]B-
Term Loan 14.35 [ICRA]D; downgraded from
[ICRA]B-
Rationale
The rating revision is on account of delays in debt servicing
owing to the stretched liquidity position of the firm. ICRA takes
note of the firm's moderate scale of operations in the highly
competitive rice industry and the vulnerability of its
profitability to raw material price fluctuation. ICRA also takes
note of the extensive experience of the promoters in the rice
milling industry.
Going forward, the ability of the company to improve its
liquidity position and service its debt in a timely manner will
be the key rating sensitivity.
Key rating drivers
Credit strengths
* Experienced promoters with long-track record in the textile
business - The management of BFAP has been involved in the
business of rice milling for more than 10 years. Such a long
presence in the industry has helped the firm in establishing
relationship with its suppliers and customers.
Credit weakness
* Delay in debt servicing and over-utilisation of working
capital limits on account of stretched liquidity position - High
working capital intensity arising out of the need to hold high
inventory and elongated debtor cycle has led to stretched
liquidity position for the firm, thereby leading to over-
utilisation in the bank limits and delays in payment of term loan
installments
* Weak financial profile characterised by high gearing,
fluctuating profitability and weak coverage indicators - The
operating margins of the company have remained low and
fluctuating on account of low value added nature of the business
and high competition in the industry. Further, highly leveraged
capital structure due to funding of working capital requirements
through bank borrowings, along with high interest expense has led
to weak debt coverage indicators.
* Intensely competitive nature of the industry characterized by
a number of small players - The rice industry is highly
competitive and characterised by the presence of a large number
of players in the unorganised segment. BFAP is a moderate sized
player, relative to the size of the industry. Moreover, the
industry is high fragmented, given the low entry barriers and
relatively low technical and capital intensity; which limits the
pricing flexibility of the participants, including BFAP.
* Agro climatic risks, which can affect the availability of the
paddy in adverse weather conditions - Rice being an agricultural
commodity is exposed to vagaries of monsoon and other
agricultural risks such as outbreak of diseases, lower/higher-
than-projected production levels (which impact the supply and
hence the price), poor storage capacities and inconsistencies in
quality. The firm's ability to buy paddy of consistent quality at
right price is the key to success in the basmati rice industry.
Incorporated in 2008, BFAP is a partnership firm involved in
milling and processing of basmati and non-basmati rice. The
firm's plant at Payal, Ludhiana (Punjab) has a milling capacity
of 6 ton/hour. It sells its products under its registered brand
names 'Nature Gold', and 'Royal Taste of India'.
BIHAR FOUNDRY: CRISIL Cuts Rating on INR75.09MM Term Loan to 'D'
---------------------------------------------------------------
CRISIL has downgraded its ratings on the bank facilities of Bihar
Foundry and Castings Limited (BFCL) to 'CRISIL D/CRISIL D' from
'CRISIL B/Stable/CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 53.98 CRISIL D (Downgraded from
'CRISIL B/Stable')
Funded Interest
Term Loan 3.87 CRISIL D (Downgraded from
'CRISIL B/Stable')
Letter of Credit 4.00 CRISIL D (Downgraded from
'CRISIL A4')
Proposed Fund-Based 18.06 CRISIL D (Downgraded from
Bank Limits 'CRISIL B/Stable')
Term Loan 75.09 CRISIL D (Downgraded from
'CRISIL B/Stable')
The downgrade reflects delays in meeting debt obligations under
the term loan and funded interest term loan accounts,
overdrawings in working capital limits.
Key Rating Drivers & Detailed Description
Weakness
*Marginal share in the fragmented ferroalloys and ingots industry
and working capital-intensive operations: BFCL is a marginal
player in the industry. The market for the products is highly
fragmented, leading to intense competition and thus constraining
operating margins and working capital management. Furthermore,
BFCL's profitability is linked to the overall fortunes of the
steel industry, which witnessed a slowdown in the recent past,
accentuating inherent risks related to cyclical demand in the
steel industry.
* Working capital-intensive operations: Operations will remain
working capital intensive with large debtors and inventory over
the medium term. BFCL has large working capital requirement, as
indicated by gross current assets (GCAs) of 140 days, as on
March 31, 2016, driven by large debtors (67 days) and inventory
(48 days).
Strengths
* Promoters' extensive industry experience and funding support:
The promoters have an experience of over four decades in the
ferroalloys and ingots industry. The company has developed an
established customer base of distributors and steel rolling
millers over the period, resulting in regular and a stable order
flow. Moreover, the company has also developed healthy
relationships with suppliers, enabling timely procurement at
competitive prices. Operations will benefit over the medium term,
from its promoters' extensive industry experience.
Established in 1971 by Mr. Hari Krishna Budhia and his family,
BFCL manufactures silico-manganese, sponge iron, and ingots. Its
manufacturing facility is in Ranchi (Jharkhand).
BFCL booked net loss of INR4.44 crore on revenues of INR383.24
crores in fiscal 2016 against net profit of INR4.31 crores on
revenues of INR344.22 crores in fiscal 2015.
C. S. INFRACONSTRUCTION: ICRA Lowers Rating on INR125cr Loan to D
-----------------------------------------------------------------
ICRA has revised the rating assigned to the INR5 crore term
loans, INR30 crore fund based limits and INR125 crore non fund
based limits of C. S. Infraconstruction Limited to [ICRA]D from
[ICRA]BB+, with Positive outlook.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term loans 5.00 [ICRA]D; revised from
[ICRA]BB+ (Positive)
Fund-based limits 30.00 [ICRA]D; revised from
[ICRA]BB+ (Positive)
Non-fund based 125.00 [ICRA]D; revised from
limits [ICRA]BB+ (Positive)
Rationale
The rating revision is on account of delays in debt servicing
owing to the stretched liquidity position of the company. ICRA
takes note of the company's exposure to political and geographic
risks emanating from CSIL's order book being primarily
concentrated towards the road sector, in Uttar Pradesh. The
rating continues to draw comfort from CSIL's promoters'
experience in the road construction business and healthy
operating margins.
Going forward, the ability of the company to improve its
liquidity position and service its debt in a timely manner will
be the key rating sensitivity.
Key rating drivers
Credit strengths
* Long experience in the road construction business: CSIL is
into the road construction business for around 15 years; however,
the size of the projects executed had remained smaller during the
initial years. Since FY2009, the company's scale has improved as
CSIL started executing larger-sized projects in the road sector.
* CSIL continues to witness healthy operating profitability
levels: CSIL continues to witness healthy profitability levels
supported by its strong equipment base.
Credit weaknesses
* Delays in debt servicing on account of stretched liquidity
position: Stretched liquidity position of CSIL, has led to delay
in servicing of term loan obligations and overutilization of its
fund based limits
* Most of the orders are awarded from the State government
clients - The dependence on State Government clients exposes CSIL
to political risk as the change in Government impacts new order
inflow for the company
* Exposure to geographic concentration risks: CSIL is involved
in execution of road projects in the State of Uttar Pradesh
thereby exposing it to geographic concentration risks
CSIL was set up as a partnership firm (Chhatrashakti Construction
Company) in 2002 by Shri Umashanker Singh and his friends. The
partnership firm was converted into its present form of a limited
company on November 10, 2009. CSIL is involved in the road
construction business and has executed multiple projects in Uttar
Pradesh offered by State Government bodies, primarily Public
Works Department (PWD).
DASHMESH EDUCATIONAL: Ind-Ra Assigns BB+ Rating to 5 Bank Loans
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Dashmesh
Educational Charitable Trust's (DECT) bank facilities the
following ratings:
-- INR273.40 mil. December 2009 Term loans due on October 2019
assigned with IND BB+/Stable rating;
-- INR350.20 mil. March 2013 Term loans due on April 2021
assigned with IND BB+/Stable rating;
-- INR760 mil. June 2015 Term loans due on October 2023 assigned
with IND BB+/Stable rating;
-- INR150 mil. Fund-based working capital facility assigned with
IND BB+/Stable rating;
-- INR177 mil. Non-fund-based facility assigned with IND A4+
rating; and
-- INR389.40 mil. Proposed fund-based working capital facility*
assigned with Provisional IND BB+/Stable rating.
* The ratings are provisional and shall be confirmed upon the
sanction and execution of loan documents for the proposed
facilities by DECT to the satisfaction of Ind-Ra.
KEY RATING DRIVERS
The ratings are constrained by the increase in DECT's debt burden
since FY15, as reflected in its net debt to current balance
before interest and depreciation ratio of 4.15x in FY17 (FY16:
3.51x; FY15: 2.98x). FY17 financials are provisional in nature.
Also, the trust's debt service coverage ratio declined to 1.11x
in FY17 from 1.35x in FY16. However, Ind-Ra expects the debt
burden to reduce in the coming years on account of scheduled debt
repayments.
The ratings are further constrained by DECT's weak liquidity
profile, as available funds - cash and unrestricted investments -
provide a weak financial cushion to both financial leverage
(FY17: 2.47%) and operating expenditure (FY17: 2.58%).
The ratings, however, are supported by the trust's moderate
credit profile. Its revenue increased at a 27.92% CAGR over FY13-
FY17 and was INR1,197.22 million in FY17. Ind-Ra expects the
revenue to grow steadily in coming years, backed by annual
tuition fee revisions depending upon the demand of the courses.
The ratings are also supported by the institute's strengthening
brand recognition. Student headcount increased at a CAGR of
49.29% over FY14-FY17 to 4,066. The headcount increased 48.23%
yoy in FY17 (FY16: 40.31% yoy). Nearly 40% of DECT's students are
from other states.
Also, DECT' diversified revenue profile supports the ratings. The
trust's diversified income originates from tuition fee, hospital
income, hostel income as well as interest income. Tuition fee was
the major source of income during FY13-FY17 with an average
contribution of 77.15%; however, the availability of a large
number of courses mitigates the concentration risk.
RATING SENSITIVITIES
Positive: DECT's ability to increase enrolments leading to
increase in revenue and to enhance its liquidity profile could
trigger a positive rating action.
Negative: Any unexpected fall in the student demand, in
conjunction with a disproportionate increase in debt-led capex,
resulting in strained liquidity and debt burden, could trigger a
negative rating action.
COMPANY PROFILE
DECT was incorporated under the Societies Registration Act, 1860.
It was founded by Mrs. Madhupreet Kaur Chawla and Mr. Manmohan
Singh Chawla in April 1999. The trust commenced operations with a
Shree Guru Gobind Singh Tricentenary dental college in 2002, and
went on to open a 300-bed general hospital in 2005, a medical
college in 2010 and a nursing college in 2012. Shree Guru Gobind
Singh Tricentenary attained private university status in 2013
under the name of Shree Guru Gobind Singh Tricentenary
University. The university, an autonomous body, has been
established under the Haryana Private Universities (amendment)
Act No. 8 of 2013 and recognised by University Grants Commission.
The university is located at Chandu-Budhera, Gurugram-Badli Road,
Gurugram. With 17 different educational institutes under its
ambit, it offers under graduate and post graduate courses in
dental science, medical & health science, nursing, physiotherapy,
engineering, commerce & management, law, pharmacy, ayurveda,
hotel & tourism management, mass communication, para medical
courses and allied health sciences.
DCS LIMITED: Ind-Ra Withdraws 'BB' Long-Term Issuer Rating
----------------------------------------------------------
India Ratings and Research (Ind-Ra) has withdrawn DCS Limited's
Long-Term Issuer Rating of 'IND BB'. The Outlook was Stable. The
instrument-wise rating actions are:
-- INR100 mil. Fund-based facilities withdrawn with WD rating;
-- INR480 mil. Non-fund-based facilities withdrawn with WD
rating;
-- INR300 mil. Proposed term loan withdrawn with WD rating;
-- INR50 mil. Proposed fund-based facilities withdrawn with WD
rating; and
-- INR420 mil. Proposed non-fund-based facilities withdrawn with
WD rating;
KEY RATING DRIVERS
The bank loan ratings have been withdrawn as Ind-Ra is no longer
required to maintain them, based on the receipt of no-objection
certificates from the lenders. Consequently, the Long-term Issuer
Rating has been withdrawn. This is consistent with the Securities
and Exchange Board of India's circular dated 31 March 2017 for
credit rating agencies.
COMPANY PROFILE
DCS provides engineering services for underground construction,
irrigation, mining and other infrastructure projects.
FIVE STAR: CRISIL Reaffirms B- Rating on INR0.5MM Cash Loan
-----------------------------------------------------------
CRISIL has reaffirmed its ratings on the bank facilities of
Five Star Builders (FSB) at 'CRISIL B-/Stable/CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 4 CRISIL A4 (Reaffirmed)
Cash Credit 0.5 CRISIL B-/Stable (Reaffirmed)
Overdraft 3 CRISIL A4 (Reaffirmed)
Proposed Long Term
Bank Loan Facility 0.5 CRISIL B-/Stable (Reaffirmed)
FSB's scale of operations is expected to remain small with
limited revenue visibility in the highly competitive civil
construction industry. There are no new orders taken in the firm
for last many years.
Provisional revenue was INR 1 crore for fiscal 2017, are expected
to stay constant in the medium term as it reflects only the
realisation from work already executed, with no new project
undertaken. Liquidity is weak with low profitability which is
tightly matched with interest obligations on outstanding debt.
Cash accruals are likely to remain negligible.
Key Rating Drivers & Detailed Description
Weakness
* Small scale of operations: With provisional operating revenue
of INR 1.04 crore in fiscal 2017, scale remains modest as the
firm is not bidding for any new government project, and has been
working on a single government project worth INR18 crore for the
past ten years, for which payments are being realised in
tranches. This is compounded by intense competition in the civil
construction industry, which has low entry barrier.
* Geographical concentration in revenue: All projects are in
Shimla, which exposes FSB to any slowdown in infrastructure
spending in the region.
Strengths
* Extensive experience of promoters: Presence of more than two
decades in the construction industry enables the promoters to bid
efficiently for new projects.
Outlook: Stable
CRISIL believes scale of operations will remain modest over the
medium term owing to discontinuation of business with the
government. The outlook may be revised to 'Positive' if new
projects increase revenue and profitability and result in better
business and financial risk profiles. The outlook may be revised
to 'Negative' if inability to undertake any new projects weakens
scale of operations and financial risk profile.
FSB is a partnership firm set up in 1983 by Mr. Dinesh Thakur and
family. It undertakes civil construction projects in Shimla.
Provisional book profit is INR0.09 crore on net sales of INR1.04
crore in fiscal 2017; book profit was INR0.03 crore on net sales
of INR0.19 crore in fiscal 2016.
GEETA THREADS: CRISIL Upgrades Rating on INR8MM Cash Loan to B+
---------------------------------------------------------------
CRISIL has upgraded its rating on the long-term bank facilities
of Geeta Threads Limited (GTL) to 'CRISIL B+/Stable' from 'CRISIL
B/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 8 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
Proposed Term Loan 5 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
The upgrade reflects expected improvement in liquidity over the
medium term on account of repayment of entire term loan, absence
of any debt-funded capital expenditure (capex), and need-based
funding from promoters. Expected cash accrual of INR1.45-1.55
crore annually in the next couple of years will be used to meet
incremental working capital requirement, leading to limited
dependence on working capital debt and hence, better financial
risk profile.
Analytical Approach
Estimated unsecured loans of INR1.94 crore (as on March 31, 2017)
from promoter have been treated as neither debt nor equity as
these are interest-free and are expected to remain in business
over the medium term.
Key Rating Drivers & Detailed Description
Weaknesses
* Working capital-intensive operations
Gross current assets are estimated at 166 days as on March 31,
2017, due to large inventory and moderate receivables of 88 days
and 39 days, respectively. The remaining represent advances
recoverable and cash. This has led to high bank limit utilisation
of 92% over the 12 months ended June 2017. Working capital
requirement is expected to remain large over the medium term.
* Small scale of operations in fragmented industry
With an estimated operating income of INR31.57 crore for fiscal
2017, scale remains small. Furthermore, GTL produces yarn of
4-23' counts, which belong to the lower end of the value chain.
Expected muted growth over the medium term will keep scale of
operations subdued.
Strengths
* Extensive experience of promoter
Presence of around two decades in the cotton yarn segment has
enabled the promoter to establish strong relationship with
customers and suppliers.
* Average financial risk profile
Total outside liabilities to tangible networth ratio is estimated
to be moderate at 1.94 times as on March 31, 2017. Ratio is
likely to improve to 1.3-1.5 times over the medium term owing to
term debt repayment and no further capex. Debt protection metrics
were average, with estimated interest coverage ratio of 2.42
times in fiscal 2017.
Outlook: Stable
CRISIL believes GTL will continue to benefit over the medium term
from the extensive experience of its promoter. The outlook may be
revised to 'Positive' if increase in capacity utilisation leads
to growth in revenue, higher-than expected cash accrual, and
better working capital management; or if significant improvement
in capital structure and debt protection metrics strengthens
financial risk profile. The outlook may be revised to 'Negative'
if low profitability leads to muted cash accrual, or if stretch
in working capital cycle or large, debt-funded capex weakens
financial risk profile.
Incorporated in 1992 as a closely held public limited company,
GTL manufactures open-ended cotton yarn of 4-23' counts used for
blankets, bedsheets, curtains, and towels. Operations are managed
by Dr BS Garg and facility is in Barnala, Punjab.
Profit after tax and net sales are estimated at INR0.13 crore and
INR31.57 crore, respectively, for fiscal 2017; net loss was
INR0.20 crore on net sales of INR25.37 crore for the previous
fiscal.
GREENWORTH INFRA: ICRA Reaffirms B+ Rating on INR10cr Loan
----------------------------------------------------------
ICRA has reaffirmed the long-term rating assigned to the
INR10.00-crore fund based facilities of Greenworth
Infrastructures Private Limited at [ICRA]B+. The outlook on the
long-term rating is stable. ICRA has also reaffirmed the short-
term rating at [ICRA]A4 for the INR10.00-crore non-fund based
facilities of the company.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term-Fund-based 10.00 [ICRA]B+ (Stable)/reaffirmed
Short term-Non-fund
based 10.00 [ICRA]A4/reaffirmed
Rationale
As a part of its process and in accordance with its rating
agreement with Greenworth Infrastructures Private Limited, ICRA
has been trying to seek information from the company so as to
undertake a surveillance of the rating. 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) and [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.
Greenworth Infrastructures Private Limited (GIPL) is a Cochin
based construction company which was incorporated in 2010. It is
promoted by Mr. K.J. Paul, Mr. P.J. Jacob and Mr. P.J. George.
The promoters have more than five decades of collective
experience in the construction sector. Greenworth has a class 'A'
registration with the Kerala Public Works Department (PWD). The
company primarily undertakes road construction contracts but also
have capabilities to undertake building and bridge constructions.
GIPL employs over 350 employees and owns all the necessary
machines and equipments required for its operations.
HILITE REALTORS: CRISIL Lowers Rating on INR50MM LT Loan to 'D'
---------------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facility
of HILITE Realtors (India) LLP to 'CRISIL D' from 'CRISIL
BB/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Long Term Loan 50 CRISIL D (Downgraded from
'CRISIL BB/Stable')
The rating reflects instances of delay by the company in
servicing its term debt. The company also has weak debt
protection metrics marked by absence of a liquidity backup
arrangement that would earmark funds for servicing of debt.
However, the company benefits from its promoters' extensive
experience in the commercial real estate segment.
Key Rating Drivers & Detailed Description
Weakness
*Delays in debt servicing:
There have been instances of delays in debt servicing by HILITE
due to significant delay in construction progress affecting its
cash inflows.
* Weak debt protection metrics:
The debt protection metrics of the company are weak marked by
absence of a liquidity backup arrangement that would earmark
funds for servicing of debt.
Strengths
* Promoters' extensive experience in the commercial real estate
segment:
Hilite Realtors is part of the Hilite group, the day-to-day
operations are managed by Mr. Sulaiman Puthukulangara, managing
director of the group. The promoters have around two decades'
experience in infrastructure and real estate development and have
successfully developed various real estate projects in the
region. Hilite Realtors' operations will benefit from its
promoters' extensive experience.
Incorporated in 2007 as Hilite Realtors India Pvt Ltd, HRLLP was
converted into a limited liability partnership in 2013. The firm
is engaged in construction and maintenance of a shopping mall,
Hilite Mall, in Kozhikode (Kerala). The mall is being constructed
in two phases with a total leasable area of 0.8 million square
feet. While Phase I of the mall is completed and has been
operational from May 2015, Phase II is under construction.
HILITE reported profit after tax (PAT) of INR0.05 crore on
operating income of INR47.55 crore for fiscal 2016 against PAT of
INR13.94 crore on operating income of INR74.07 crore in the
previous fiscal.
JAGANNATH POLYPACKS: CRISIL Reaffirms 'C' Rating on INR4.5MM Loan
-----------------------------------------------------------------
CRISIL has been consistently following up with Jagannath
Polypacks Limited for obtaining information through letters and
emails dated May 29, 2017 and July 12, 2017 among others, apart
from telephonic communication. However, the issuer has remained
non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 1.5 CRISIL A4 (Issuer Not
Cooperating; Rating
Reaffirmed)
Cash Credit 4.5 CRISIL C (Issuer Not
Cooperating; Rating
Reaffirmed)
Proposed Long Term 2.0 CRISIL C (Issuer Not
Bank Loan Facility Cooperating; Rating
Reaffirmed)
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of Jagannath Polypacks 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 Jagannath Polypacks Limited is
consistent with 'Scenario 3' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BBB' category or
lower. Based on the last available information, CRISIL has
reaffirmed the rating at 'CRISIL C/CRISIL A4'.
Jagannath Polypacks, incorporated in in 2007, manufactures PP
woven sacks for the cement and fertilizer industries. Its
promoters, the Cuttack-based Mr. M K Subudhi and his family, have
industry experience of three decades. The company's manufacturing
facility at Jagatpur in Cuttack began commercial operations in
March 2012.
JENSON & NICHOLSON: Insolvency Resolution Process Commences
-----------------------------------------------------------
Equity Bulls reports that the Insolvency Resolution process of
Jenson & Nicholson India Ltd under the aegis of the Hon'ble
National Company Law Tribunal (NCLT), Kolkata Bench has commenced
effective Aug. 8, 2017.
Jenson and Nicholson (India) Limited (BOM:523592) --
http://www.jensonnicholson.com/-- is a paint company. The
Company is engaged in the business of manufacturing, selling and
distribution of paints, coatings and products related to home
decor and providing related services. Its principal
products/services include paints and varnishes. It offers
products in various categories, including interior, exterior,
metal, wood, undercoats, industrial and designer finish. Its
interior category products include designer finish and
distempers. Its exterior category products include emulsions and
texture paint. Its wood category products include wood thinners
and enamels. Its undercoats category products include primer and
putty. Its industrial category products include aluminium paints.
Its InstaColor product range includes interiors, such as premium
acrylic wall coating and jensolin acrylic distemper; exteriors,
such as armor quartz extra life exterior finish and decor
exterior plastic emulsion, and metal and wood, such as pearl
lustre finish.
KRISHI NUTRITION: Ind-Ra Puts BB+ Rating to Not Cooperating
-----------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Krishi Nutrition
Company Private Limited's (KNCPL) Long-Term Issuer Rating to the
non-cooperating category. The issuer did not participate in the
surveillance exercise, despite continuous requests and follow-ups
by the agency. Therefore, investors and other users are advised
to take appropriate caution while using these ratings. The rating
will now appear as 'IND BB+(ISSUER NOT COOPERATING)' on the
agency's website. The instrument-wise rating actions are:
-- INR129.36 mil. Term loans migrated to non-cooperating
category with IND BB+(ISSUER NOT COOPERATING) rating;
-- INR65 mil. Fund-based working capital limit migrated to non-
cooperating category with IND BB+(ISSUER NOT COOPERATING)
rating; and
-- INR17 mil. Non-fund-based working capital limit migrated to
non-cooperating category with IND A4+(ISSUER NOT COOPERATING)
rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
July 28, 2016. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Incorporated in 2013, KNCPL manufactures animal feed through an
outsourcing arrangement with five units in Tamil Nadu and one in
Karnataka. It also manufactures products at its own 120,000mtpa
unit located in Tamil Nadu.
LAKSHMI INFRASTRUCTURE: CRISIL Rates INR3MM Cash Loan at B+
-----------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to
the bank facilities of Lakshmi Infrastructure and Developers
India Private Limited (LIDPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 7 CRISIL A4
Proposed Cash
Credit Limit 3 CRISIL B+/Stable
The ratings reflect a modest scale of operations in the
fragmented civil construction industry, susceptibility to risks
related to the tender-based nature of the business, and a below-
average financial risk profile. These weaknesses are partially
offset by the extensive industry experience of the promoter, and
a healthy order book providing revenue visibility over the medium
term.
Key Rating Drivers & Detailed Description
Weakness
* Modest scale of operations in a fragmented industry with
susceptibility to risks related to the tender-based nature of the
business: Turnover was modest at INR87.49 crore in fiscal 2017.
Moreover, the tender-based nature of operations limits pricing
flexibility in an intensely competitive industry.
* Below-average financial risk profile: Large debt funded capital
expenditure (capex) in fiscal 2017 resulted in a leveraged
capital structure with gearing of about 2 times on March 31,
2017. This has also resulted in large upcoming repayment
obligation, constraining liquidity and financial flexibility.
Strengths
* Extensive industry experience of the promoter:
A presence of about two decades in the civil construction segment
has enabled the key promoter, Mr V Ravi Kiran, to establish a
strong relationship with customers and suppliers.
* Healthy order book: An order book of over INR250 crore, to be
executed over the next two years, provides revenue visibility
over the medium term.
Outlook: Stable
CRISIL believes LIDPL will continue to benefit from the extensive
industry experience of its promoter. The outlook may be revised
to 'Positive' if the financial risk profile, particularly
liquidity, improves because of significant increase in net cash
accrual. The outlook may be revised to 'Negative' if time or cost
overrun in the ongoing projects, delays in realisation of
receivables, or any large, debt-funded capex impacts liquidity.
Cheema Boilers Limited: Ratings ReaffirmedMr V Ravi Kiran had
established a proprietary concern, Lakshmi Constructions, in
2004; LIDPL was incorporated in November 2014 to take over the
business of Lakshmi Constructions. The company undertakes
construction of roads and bridges.
In fiscal 2017 profit before tax was INR5.5 crore on revenue of
INR87.49 crore as against INR1.39 crore and INR22.16 crore
respectively in fiscal 2016.
LAXMI NARASIMHA: Ind-Ra Moves B+ Issuer Rating to Not Cooperating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Laxmi Narasimha
Breeding Farm's (LNBF) Long-Term Issuer Rating to the non-
cooperating category. The issuer did not participate in the
rating exercise despite continuous requests and follow-ups by the
agency. Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will
now appear as 'IND B+(ISSUER NOT COOPERATING)' on the agency's
website. The instrument-wise rating actions are:
-- INR10 mil. Fund-based working capital limits migrated to non-
cooperating category with IND B+(ISSUER NOT COOPERATING)/IND
A4(ISSUER NOT COOPERATING) rating;
-- INR21.6 mil. Term loan migrated to non-cooperating category
with IND B+(ISSUER NOT COOPERATING) rating; and
-- INR110 mil. Proposed fund-based working capital limits
migrated to non-cooperating category with Provisional IND
B+(ISSUER NOT COOPERATING)/Provisional IND A4(ISSUER NOT
COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
July 8, 2016. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
LNBF is a Telangana-based partnership firm involved in the
poultry business.
MAJESTIC EXPORTS: Ind-Ra Moves BB- Rating to Not Cooperating
------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Majestic
Exports' (ME) Long-Term Issuer Rating to the non-cooperating
category. The issuer did not participate in the rating exercise
despite continuous requests and follow ups by the agency.
Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will
now appear as 'IND BB-(ISSUER NOT COOPERATING)' on the agency's
website. The instrument-wise rating actions are:
-- INR140.0 mil. Fund-based facilities migrated to non-
cooperating category with IND BB-(ISSUER NOT COOPERATING)/IND
A4+(ISSUER NOT COOPERATING) rating;
-- INR3.5 mil. Non-fund-based facilities migrated to non-
cooperating category with IND A4+(ISSUER NOT COOPERATING)
rating;
-- INR29.3 mil. Term loans migrated to non-cooperating category
with IND BB-(ISSUER NOT COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on 5
March 2015. Ind-Ra is unable to provide an update, as the agency
does not have adequate information to review the ratings.
COMPANY PROFILE
Established in 1987, ME is a Tirupur, Tamil Nadu-based
partnership firm. The company manufactures and exports knitted
garments. Its plant has a manufacturing capacity of 4 million
pieces per annum.
MAROLI NH: Ind-Ra Affirms 'BB+' Rating on Sr. Project Bank Loan
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has undertaken the following
rating action on Maroli NH Road Private Limited's (MNRPL) senior
project bank loan:
-- USD3.9 mil. (INR223.9 mil.) Senior project bank loan* due on
Sept. 25, 2024 affirmed with IND BB+/Stable rating.
* Outstanding USD3.123 million as on Aug. 9, 2017
KEY RATING DRIVERS
The affirmation reflects a moderate sponsor risk due to the
moderate financial profile of Relcon Infraprojects Ltd (Relcon),
which has provided an unconditional and irrevocable guarantee to
fund any shortfall in debt servicing obligation. However, Ind-Ra
has not provided credit enhancement value, given the guarantee
would be invoked only in a post-default scenario.
The rating reflects moderate foreign exchange risk. MNRPL has
hedged the entire principal outstanding. However, higher
depreciation of the Indian rupee against the US dollar than the
base case assumption can increase interest payments.
The loan will be completely amortised one year prior to the date
of receipt of the last annuity (September 2025), leaving a short
tail. The repayments are made in March and September, while
interest payments are made in May and November. A debt service
reserve account equivalent to six months of debt servicing
obligations is maintained in the form of a bank guarantee. In
addition, MNRPL is maintaining a fixed deposit of INR17 million
to meet major maintenance expenses.
The rating also reflects a moderate-to-low operating risk. The
operation and maintenance of the project stretch is contracted to
Sunrise Stone Industries, a sister concern of Relcon, for the
entire concession period with a 5% escalation annually. Ind-Ra
believes the maintenance requirement is straightforward, given
there are less complex road structures on the project corridor.
The project's operating expenses in FY17 were about 30% lower
than Ind-Ra's base case projections. Only one periodic
maintenance cycle is scheduled, in FY22-FY23, during the loan
tenure.
The rating, however, is supported by the fact that MNRPL's
coverage metrics are likely to be adequate as per Ind-Ra's base
case projections, except during FY22-FY23, when major maintenance
is scheduled, necessitating sponsor support to the tune of over
INR20 million during the period. In FY17 (provisional),
debt/EBITDA was 5.12x in FY17 (FY16: 6.79x) and interest coverage
ratio was 2.14x (1.69x). The improvement in both ratios was
driven by favourable foreign exchange rates.
The rating is also supported by continued receipt of fixed, pre-
agreed semi-annual annuities (INR26.64 million each) in September
2016 and March 2017 from a strong counterparty, the Roads and
Buildings Department, government of Gujarat (GoG). The company
has received six annuities (plus 1 bonus) until date, with
average receivable standing at 34 days, barring the first annuity
that was delayed by over four months. Ind-Ra's base case assumes
receipt of 95% of annuity each year in its projections.
RATING SENSITIVITIES
Negative: Any material delays in the receipt of annuity or
adverse changes in currency and interest, along with absent
sponsor support, could result in a negative rating action.
Positive: An improvement in coverage ratios compared with Ind-
Ra's base case estimates on a sustained basis could result in a
positive rating action.
COMPANY PROFILE
MNRPL, a special-purpose vehicle promoted by Relcon, has been
incorporated to implement the two-laning of NH Maroli section
(0.70km to 15.60km) on National Highway 8 in Gujarat under a
design, build, finance, operate and transfer (annuity basis)
model under a 13-year concession by the Roads and Buildings
Department, GoG. Relcon has over three decades of experience in
the civil construction industry, especially roads and buildings.
MOBILE TELECOM: CRISIL Assigns B+ Rating to INR14MM Loan
--------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-
term bank facility of Mobile Telecommunications Limited (MTL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Overdraft 14 CRISIL B+/Stable
The rating reflects the company's below-average financial risk
profile because of subdued debt protection metrics, and low and
volatile operating margin due to trading nature of business.
These weaknesses are partially offset by the extensive experience
of its promoter and established relationship with customers.
Key Rating Drivers & Detailed Description
Weaknesses
* Below-average financial risk profile: Debt protection metrics
are subdued, reflected in interest coverage and net cash accrual
to total debt ratios of 1.38 times and 0.04 time, respectively,
for fiscal 2017. The company has also incurred net losses in the
last two fiscals.
* Low operating margin: Profitability is estimated at 0.9% in
fiscal 2017 and has been in the 0.2-1.3% range in the last three
fiscals due to trading nature of business. Modest margin
constrains ability to generate cash flow.
Strength
* Extensive experience of promoters: Presence of around two
decades in the electronic equipment business has enabled the
promoter to establish strong relationship with customers.
Outlook: Stable
CRISIL believes MTL will benefit over the medium term from the
extensive experience of its promoter. The outlook may be revised
to 'Positive' in case of a significant ramp-up in operations and
sustained improvement in profitability and debt protection
metrics. The outlook may be revised to 'Negative' if financial
risk profile, especially liquidity, weakens further because of
sizeable increase in working capital requirement or sustained low
profitability.
Established in 1995 by Mr Anil Ved Mehta, MTL manufactures and
trades in electronic hardware. It is listed on the Bombay Stock
Exchange.
In fiscal 2017, net loss was INR53 lakh on total sales of
INR152.89 crore, against a net loss of INR134 lakh on total sales
of INR125.17 crore in fiscal 2016.
N. A. SHELAR: CRISIL Reaffirms C Rating on INR4MM Loan
------------------------------------------------------
CRISIL has been consistently following up with N. A. Shelar and
Company (NAS) for obtaining information through letters and
emails dated May 25, 2017 and July 12, 2017 among others, apart
from telephonic communication. However, the issuer has remained
non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Overdraft 4 CRISIL C (Issuer Not
Cooperating; Rating
Reaffirmed)
Proposed Long Term 1 CRISIL C (Issuer Not
Bank Loan Facility Cooperating; Rating
Reaffirmed)
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of N. A. Shelar and Company. 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 N. A. Shelar and Company is consistent
with 'Scenario 3' outlined in the 'Framework for Assessing
Consistency of Information with CRISIL BBB' category or lower.
Based on the last available information, CRISIL has reaffirmed
the rating at 'CRISIL C'.
Established in the year 1983, as a proprietorship concern of Mr.
Narayan Shelar, NASC is a civil contractor primarily engaged in
construction of buildings (residential and commercial) in the
Mumbai region of Maharashtra.
PATANJALI DISTRIBUTORS: CRISIL Reaffirms B+ INR18.75M Loan Rating
-----------------------------------------------------------------
CRISIL has reaffirmed its rating to 'CRISIL B+/Stable' on the
bank facilities of Patanjali Distributors Private Limited (PDPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 18.75 CRISIL B+/Stable (Reaffirmed)
Proposed Cash Credit
Limit 11.25 CRISIL B+/Stable (Reaffirmed)
The ratings continue to reflect the extensive experience of the
promoters, and the company's healthy relationships with Patanjali
Ayurved Ltd (PAL). These strengths are partially offset by PDPL's
weak financial risk profile.
CRISIL had assigned its 'CRISIL B+/Stable' ratings to the bank
facilities of PDPL as on 11th July 2017.
Key Rating Drivers & Detailed Description
Weakness
* Weak financial risk profile: Low networth and high total
outside liabilities to tangible networth ratioestimated at
INR2.22 crore and 18.39 times as on March 31, 2017-have resulted
in a weak financial risk profile. Debt protection metrics are
weak, with interest coverage estimated at about 1.4 times and net
cash accrual to adjusted debt ratio at around 0.04 time in fiscal
2017, but should improve marginally over the medium term.
Strengths
* Promoters' experience and healthy relationship with PAL: The
promoters distributed Patanjali products for whole of West Bengal
under Diba Distributors since 2009. However, with increase in
demand for Patanjali products, the business of the firm was
transferred to the already incorporated company, PDPL, in
December 2015. The promoters' strong relationship of over a
decade and super distributor status with PAL have helped PDPL's
revenue grow at more than 300% in fiscal 2017 over the previous
year.
Outlook: Stable
CRISIL believes PDPL will benefit from the promoters'
longstanding presence in the distribution business, and their
established relations with PAL. The outlook may be revised to
'Positive' if significant improvement in scale of operations and
profitability, or benefits from substantial equity infusion by
the promoters, strengthens financial risk profile and cash
accrual. Conversely, the outlook may be revised to 'Negative' if
increase in working capital requirement constrains liquidity, or
if any large, debt-funded capital expenditure weakens capital
structure.
Incorporated in August 2009, by Mr Surendra Kumar Sharma, PDPL
began operations only in December 2015. The company is one of the
four super distributors of Patanjali products in West Bengal.
For fiscal 2017, profit after tax was INR39 lakh on net sales of
INR102.47 crore, against INR19 lakh and INR24.16 crore for fiscal
2016.
PAWAN ENTERPRISES: CRISIL Assigns B+ Rating to INR8.5MM Loan
------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating on the long-
term bank facility of Pawan Enterprises - Bikaner (PEB).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Cash
Credit Limit 8.5 CRISIL B+/Stable
PEB estimated to book net sales of INR57.16 crore in fiscal 2017,
increasing 15% over the previous fiscal. CRISIL expects stable
revenue growth of around 10% per fiscal over the medium term,
susceptible to volatility in food grain prices. Operating margin
are estimated low at 3.71% at the end of fiscal 2017 and is
expected to remain at a similar level over the medium term.
Liquidity is expected to remain adequate, given nil term debt
obligation, and funding support from partners in the form of
capital infusion and unsecured loans despite high bank limit
utilisation.
The financial risk profile is weak, with high total outside
liabilities to tangible networth (TOLTNW) ratio of 5.2 times and
small networth of INR5.68 crore as on March 31, 2017, and subpar
debt protection metrics as indicated by interest coverage ratio
of 1.11 times in fiscal 2017.
Analytical Approach
Unsecured loans worth INR3.29 crore in fiscal 2017 are considered
as 75% equity and 25% debt.
Key Rating Drivers & Detailed Description
Weakness
* Modest scale and exposure to intense competition in the agro
commodity trading business:
The scale remains modest, as reflected in net sales of INR57.16
crore in fiscal 2017 (Rs 49.31 crore in fiscal 2016). Also,
trading business is highly fragmented and intensely competitive,
with organised and unorganised players catering to regional
demand. Small scale and fragmentation limit bargaining power with
suppliers and customers, thus constraining its operating margin.
* Below-average financial risk profile:
The financial risk profile is constrained by a small networth and
high TOLTNW ratio, estimated at INR5.68 crore and 5.20 times,
respectively, as on March 31, 2017. Networth remains constrained
by low accretion to reserves and muted profitability. The TOLTNW
ratio though high, has improved from 5.61 times reported in the
previous fiscal. Nil debt-funded capex plans for the medium term
should support financial flexibility; nevertheless, the TOLTNW
ratio is likely to remain high owing to large working capital
borrowings. Debt protection metrics have also been weak because
of large debt and low cash accrual, resulting in interest
coverage ratio estimated at 1.11 times for fiscal 2017; the ratio
is expected to remain at a similar level over the medium term.
Strength
* Partners' extensive experience in the trading business and
funding support from them:
The partners' experience of 15 years has helped establish a
strong market position. Also, they fund the business as and when
required through capital infusion and unsecured loans. They have
infused capital worth INR1.2 crore in fiscal 2017 and will likely
infuse more capital over the years. Also, they extended unsecured
loans of INR3.29 crore as on March 31, 2017, and the amount will
likely be increased over the medium term.
Outlook: Stable
CRISIL believes PEB will continue to benefit over the medium term
from the partners' extensive experience and funding support. The
outlook may be revised to 'Positive' in case of a substantial
improvement in scale and financial risk profile, driven most
likely by higher than-expected cash accrual or capital infusion,
along with efficient working capital management. Conversely, the
outlook may be revised to 'Negative' in case of lower-than-
anticipated cash accrual, or larger-than-expected working capital
requirement, or large, debt-funded capital expenditure, putting
further pressure on liquidity.
Established in 1999 in Bikaner, Rajasthan as a partnership
between Mr Vinod Kumar Sipani, Mr Shikhar Chand Sipani, Ms Poonam
Devi Sipani, and Mr Prem Chand Agarwal, PEB trades in cattle
feed, grains, and pulses.
Profit after tax and net sales were INR16 lakh and INR57.16
crore, respectively, for fiscal 2017, as against INR8 lakh and
INR49.31 crore, respectively, for the previous fiscal.
Expected profit after tax and net sales are INR18 lakh and
INR62.88 crore for fiscal 2017.
PIMS MEDICAL: CRISIL Assigns B- Rating to INR10MM Cash Loan
-----------------------------------------------------------
CRISIL has revoked the suspension of its ratings on the bank
facilities of Pims Medical and Education Charitable Society
(PIMS) and has assigned its 'CRISIL B-/Stable' rating to the
facilities. The ratings were suspended on November 7, 2013 as the
company had not provided the necessary information for a rating
review. It has now shared the requisite information.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 10 CRISIL B-/Stable (Assigned;
Suspension Revoked)
The rating reflects the society's weak financial risk profile and
exposure to geographic concentration risks. These rating
weaknesses are partially offset by moderate scale of operations
and the funding support of the trustees.
Key Rating Drivers & Detailed Description
Weakness
* Geographic concentration in revenue: Operations are limited to
a single location, Jalandhar, where the hospital and medical
college are located, exposing the firm to the dynamics of a
single market.
* Weak financial risk profile: Financial risk profile, especially
capital structure, remains weak on account of continued losses.
Strengths
* Moderate scale of operations: Although operations at the
hospital and college began in 2010 and 2011 respectively, revenue
remains modest-estimated at INR47.2 crore in fiscal 2017.
* Funding support from trustees: The trustees have provided
INR325.9 crore as unsecured loans in the three years through
March 2017, supporting liquidity.
Outlook: Stable
CRISIL believes PIMS will continue to benefit from the funding
support of the trustees. The outlook may be revised to 'Positive'
if improvement in revenues and operating margins leads to
sizeable cash accrual and substantially strengthens financial
risk profile. The outlook may be revised to 'Negative' if
financial risk profile weakens due to a sharp decline in revenue
or if the society undertakes larger than expected debt funded
capex and accruals are not commensurate to the increased
repayments.
PIMS was set up by the Government of Punjab in 1999 to establish
a medical college-cum-teaching hospital. It was later converted
into a public private partnership society and taken over by a
professional board in 2013. The society operates a hospital and
medical college in its campus in Jalandhar.
Net loss incurred was estimated at INR13.59 crore on net receipts
of INR48.49 crore for fiscal 2017 against a net loss of INR15.34
crore on net receipts of INR40.22 crore for fiscal 2016.
PRINS POLYTECH: Ind-Ra Moves B+ Issuer Rating to Not Cooperating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Prins Polytech
Private Limited's (PPPL) Long-Term Issuer Rating to the non-
cooperating category. The issuer did not participate in the
rating exercise despite continuous requests and follow-ups by the
agency. Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will
now appear as 'IND B+(ISSUER NOT COOPERATING)' on the agency's
website. The instrument-wise rating actions are:
-- INR22.5 mil. Fund-based limit migrated to non-cooperating
category with IND B+(ISSUER NOT COOPERATING)/IND A4(ISSUER
NOT COOPERATING) rating; and
-- INR34.5 mil. Term loan migrated to non-cooperating category
with IND B+(ISSUER NOT COOPERATING) rating.
migrated to non-cooperating category
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
May 23, 2016. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
Incorporated in 2013 by Mr. Naresh Kumar and Mr. Jayanti Lal
Mehta, PPPL began commercial operations in January 2014. The
company manufactures three-layer and five-layer polyvinyl
chloride water tanks at its facility in Boranada, Jodhpur with an
annual installed capacity of 24,000 tanks. The firm has an ISO
9001:2008 certification for its products and sells them under the
brand name, Prins.
RAJVIR MOTORS: CRISIL Assigns 'B' Rating to INR3.25MM Term Loan
---------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable' rating to the long-term
bank facilities of Rajvir Motors.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 3.25 CRISIL B/Stable
Cash Credit 2.75 CRISIL B/Stable
Proposed Term Loan 2 CRISIL B/Stable
The rating reflects a weak financial risk profile, a low
operating margin, a limited track record of operations, and
exposure to risks related to diversification into an unrelated
business. These weaknesses are partially offset by a moderate
order book.
Key Rating Drivers & Detailed Description
Weaknesses:
* Low operating margin: The margin was 2.04% in fiscal 2017,
lower than the average of 4-6% in the earlier years. That's due
to intense competition in the multi-brand workshops business.
With a move into the construction sector from fiscal 2018, the
margin in this business is expected to remain moderate at 4.5%in
the first fiscal with a possibility of an increase to 5.0-5.5% in
the following fiscal.
* Weak financial risk profile: The EBITDA (earnings before
interest, tax, depreciation, and amortisation) coverage has
declined continuously to 0.4 times in fiscal 2017 from 1.4 times
in fiscal 2015 mainly because of lower revenue and operating
margin. However, the continued non-operating income in the form
of rentals has helped to meet payment obligation on time, leading
to sustenance of the adjusted interest coverage ratio at 2.4
times in the fiscal 2017.
* Diversification into unrelated business: Since its inception,
the company was in the service station business, but from fiscal
2018 it has diversified into the unrelated construction industry.
This leads to risks related to ramp up in operations in a timely
manner due to a limited track record in this sector, while the
business is also dependent on capital expenditure (capex) by 2.25
crore for machinery purchase. However, the existing business
should continue to support cash accrual over the medium term.
Strength:
* Moderate order book: There are unexecuted orders of INR34 crore
on date, to be executed in the next 1-2 years. Out of this, INR32
crore comprises a tender for road construction, while the
remaining INR2 crore is from a building construction tender, both
for Himachal Pradesh Public Works Department. The moderate order
book will continue to support operations over the medium term.
Outlook: Stable
CRISIL believes RM will maintain a stable business risk profile
over the medium term on the back of a moderate order book. The
outlook may be revised to 'Positive' in case of substantial
improvement in revenue and profitability, leading to healthy cash
accrual. The outlook may be revised to 'Negative' if the
financial risk profile deteriorates due to larger-than-expected
debt-funded capex, a decline in revenue or profitability, or a
substantial increase in working capital requirement, leading to
deterioration in liquidity.
RM was established in 2005 and started business operations in
2006 as a service station for Maruti Suzuki India Ltd (MSIL). In
2008, it changed its franchise to Chevrolet India. Later, in
2014, the company shifted its business model to a multi-brand
workshop and started servicing different automobile brands
including Maruti and Chevrolet. The company operates through
three workshops, one each in Manali, Rampur, and Shimla, all in
Himachal Pradesh.
Currently, RM is planning to diversify into construction
activities and has also initiated road and civil construction
projects.
On a provisional basis, Rajvir Motors has registered a profit of
INR0.15 crore on net sales of INR7.16 crore, in fiscal 2017,
against profit of INR0.36 crore on net sales of INR7.78 crore for
fiscal 2016.
ROHIT'S HERITAGE: Ind-Ra Moves B+ Rating to Not Cooperating
-----------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Rohit's Heritage
Jewellers Private Limited's (RHJPL) Long-Term Issuer Rating to
the non-cooperating category. The issuer did not participate in
the rating exercise despite continuous requests and follow-ups by
the agency. Therefore, investors and other users are advised to
take appropriate caution while using these ratings. The rating
will now appear as 'IND B+(ISSUER NOT COOPERATING)' on the
agency's website. The instrument-wise rating action is:
-- INR110 mil. Fund-based limit migrated to non-cooperating
category with IND B+(ISSUER NOT COOPERATING)/IND A4(ISSUER NOT
COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
May 4, 2016. Ind-Ra is unable to provide an update, as the agency
does not have adequate information to review the ratings.
COMPANY PROFILE
Incorporated in 2000, RHJPL is engaged in manufacturing and
trading of jewellery. It operates a jewellery showroom in
Ludhiana, Punjab.
S S OFFSHORE: Ind-Ra Migrates BB Issuer Rating to Not Cooperating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated S S Offshore
Private Limited's Long Term Issuer Rating to the non-cooperating
category. The issuer did not participate in the rating exercise,
despite continuous requests and follow-ups by the agency.
Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will
now appear as 'IND BB(ISSUER NOT COOPERATING)' on the agency's
website. The instrument-wise rating actions are:
-- INR30 mil. Fund-based working capital limits migrated to non-
cooperating category with IND BB(ISSUER NOT COOPERATING)/IND
A4+(ISSUER NOT COOPERATING) rating; and
-- INR138.7 mil. Term loan limit migrated to non-cooperating
category with IND BB(ISSUER NOT COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
May 13, 2016. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Established in 2008, S S Offshore runs a marine transportation
business. The company, located in Mumbai, provides crew and
vessels on a contractual basis and operates only for eight months
from October till May.
SAMARTH SAI: ICRA Assigns 'B' Rating to INR3cr Cash Loan
--------------------------------------------------------
ICRA has assigned a long-term rating of [ICRA]B to the INR3.00-
crore fund based cash credit facilities (fully interchangeable
with letter of credit) and a short-term rating of [ICRA]A4 to the
INR4.00 crore non-fund based letter of credit of Samarth Sai
Logistics Private Limited. ICRA has also assigned long-term and
short-term rating of [ICRA]B/A4 to the INR6.00 crore unallocated
limits of SSLPL. The outlook on the long-term rating is 'stable'.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based-Cash (3.00) [ICRA]B (Stable); Assigned
Credit-Fully
interchangeable
with letter of
credit
Non-Fund based-
Letter of Credit 4.00 [ICRA]A4; Assigned
Unallocated Limits 6.00 [ICRA]B (Stable)/A4; Assigned
Rationale
The assigned ratings is constrained by company's relatively small
scale of operations and its weak financial risk profile
characterised by low operating margins, net losses in FY2017,
adverse capital structure and inadequate coverage indicators. The
cash flows for the company remained strained due to working
capital intensive nature of business coupled with elongated
receivables over last two years. ICRA also takes note of
vulnerabilities associated with commodity and currency
fluctuations coupled with intense competition in the coal trading
industry.
The ratings, however, favorably, takes into account the past
experience of the promoters in the coal trading and other
businesses and group support in terms of logistics services.
The operating income of the company is expected to exhibit
healthy growth in FY2018 considering healthy demand in Q1 FY2018;
though scaling up is dependent on its ability to access increased
funding from banks. The company's ability to scale up its
operations while improving its profitability by minimising the
impact of the price and currency exchange volatility and improve
its capital structure by managing its working capital cycle
(though current resolving of disputed payables and receivables
will ease the working capital cycle to an extent) remains crucial
from the credit perspective.
Key rating drivers
Credit strengths
* Past experience of the promoters in the coal trading and
other businesses- Incorporated in 2011, Samarth Sai Logistics
Private Limited is engaged in coal trading and is promoted by the
Patel family (Mr. Mahesh Patel & Sushila Patel). Mr. Mahesh Patel
along with his family was involved into family business since
1992
* Group support in terms of logistics services- The group is
involved in the transport business for sand, cement, imported
coal and other building materials in Bharuch and Vapi regions
with around 25 years' presence in the transportation business.
Credit weaknesses
* Relatively small scale of operations and weak financial risk
profile characterised by low operating margins, net losses in
FY2017, adverse capital structure and inadequate coverage
indicators: The operating income of the company though small, has
grown at a CAGR of 84% in the last four years from INR4.14 crore
in FY2014 to INR25.92 crore in FY2017 (provisional financials).
With the increase in the debt levels from INR0.08 crore as on
March 31, 2014 to INR8.57 crore as on March 31, 2016 and further
to INR14.66 crore as on March 31, 2017 coupled with low net-worth
base, the gearing of the company has deteriorated year-on-year
and stood at 10.82 times as on March 31, 2017. Higher debt levels
resulted in high interest cost, which coupled with weak margins
lead to poor debt indicators as reflected by interest coverage
ratio, TOL/TNW and NCA/TD of 0.26 times, 24.12 times and -1% with
increase in the debt level in FY2017.
* Strained cash flows owing to elongated debtor days: The fund
flow from the operations remained negative in last three years
owing to high working capital intensity. The company books the
sales as soon as the order for high seas is booked and provides a
credit period ~90-120 days from the date of dispatch of the goods
resulting in high debtor days for the company.
* Low profitability given the low value additive nature of the
trading business: The operating margins of the company have
remained low in range of 1.14% to 2.33% during past three
fiscals, as is common in the trading business.
* Intense competition, given trading nature of operations: The
coal trading industry is highly fragmented with presence of large
number of organised and unorganised players due to low entry
barriers.
* Profitability remains exposed to variation in price and
currency fluctuation as majority of the coal is imported: Being a
trader, SSLPL is exposed to though limited stock maintained by
the company. Further the profitability also remains exposed to
variation in the currency fluctuation as majority of the coal is
imported.
Incorporated in 2011, Samarth Sai Logistics Private Limited is
involved in coal trading and is promoted by the Patel family (Mr.
Mahesh Patel & Sushila Patel). Subsequently, from October 2015,
Mr. Jayesh Agrawal joined the company as a shareholder and was
appointed a director and he currently looks after the operations
of the company. The company imports coal and supplies the same to
various customers in Gujarat.
Mr. Mahesh Patel along with his family was involved in the family
business since 1992. The group is involved in the transport
business for sand, cement, imported coal and other building
materials in Bharuch and Vapi region with around 25 years'
presence in the transportation business.
SHETH SHIP: ICRA Lowers Rating on INR42cr Loan to D
----------------------------------------------------
ICRA has revised the long term rating assigned to the INR5.00-
crore fund-based limits of Sheth Ship Breaking Corporation from
[ICRA]B+ to [ICRA]D. ICRA has also revised the short-term rating
assigned to INR42.00-crore non fund-based limits from [ICRA]A4 to
[ICRA]D.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 5.00 Revised to [ICRA]D from
[ICRA]B+
Letter of Credit 42.00 Revised to [ICRA]D from
[ICRA]A4
The rating action is based on the continued delays in the firm's
debt servicing.
Key rating drivers
Credit strengths
* Longstanding experience of the promoter in the ship breaking
industry: Sheth Ship Breaking Corporation (SSBC) was incorporated
as a partnership firm in 1997 by Narendra Shah and other
partners.
Credit weaknesses
* Delays in debt servicing: The status of the account with the
bank has turned NPA owing to continued delays in debt servicing
* Slowdown in ship breaking industry owing to weakening prices
and intense competition: The ship-breaking industry characterised
by weakening steel prices due to the availability of cheap
Chinese steel in the market, as well as increased competition
from the ship-breaking yards of neighbouring countries such as
China, Bangladesh and Pakistan.
* Exposure to environmental regulatory risks: As per industry
norms, the firm is required to obtain mandatory approvals from
the Gujarat Maritime Board (GMB) each time, before beaching the
vessel at its yard for ship breaking purposes delays in obtaining
requisite approvals can result in higher working capital
requirements: firm's profitability is vulnerable to unfavorable
fluctuations in foreign exchange rates and steel prices
Sheth Ship Breaking Corporation (SSBC) was incorporated as a
partnership firm in 1997 by Narendra Shah and other partners. The
firm is engaged in the business of ship-breaking. The business
operations are carried out from Bhavnagar and the ship-breaking
activity is conducted at a plot leased by the Gujarat Maritime
Board (GMB) in the Alang Ship Recycling Yard (ASRY). The Group
Company Pioneer Globex Private limited is also involved in other
related businesses like trading of iron ore fines and loose mill
scales which has also turned into NPA and was assigned [ICRA]D in
March 2017.
SHIVPRASAD FOODS: Ind-Ra Puts BB- Rating to Not Cooperating
-----------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Shivprasad Foods
and Milk Products' (SFMP) Long-Term Issuer Rating to the non-
cooperating category. The issuer did not participate in the
rating exercise despite continuous requests and follow-ups by the
agency. Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will
now appear as 'IND BB-(ISSUER NOT COOPERATING)' on the agency's
website. The instrument-wise rating actions are: given below:
-- INR70 mil. Fund-based working capital limits migrated to non-
cooperating category with IND BB-(ISSUER NOT COOPERATING)/IND
A4+(ISSUER NOT COOPERATING) rating;
-- INR48.4 mil. Term loan migrated to non-cooperating category
with IND BB-(ISSUER NOT COOPERATING) rating; and
-- INR80 mil. Proposed fund-based working capital limits
migrated to non-cooperating category with Provisional IND BB-
(ISSUER NOT COOPERATING)/Provisional IND A4+(ISSUER NOT
COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on 1
July 2016. Ind-Ra is unable to provide an update, as the agency
does not have adequate information to review the ratings.
COMPANY PROFILE
Established in 2009 in Malshiras taluka of Solapur district, SFMP
is engaged in processing of milk and manufacturing of other milk
products. It has an installed processing capacity of 0.4
megalitres of milk/day and 0.15 megalitres of milk/day for
manufacturing skimmed milk powder.
SHREE RUPANADHAM: ICRA Reaffirms B+ Rating on INR5cr Loan
---------------------------------------------------------
ICRA has reaffirmed the long-term rating of [ICRA]B+ assigned to
the INR5.00-crore cash credit facility of Shree Rupanadham Steel
Private Limited. ICRA has also reaffirmed the long-term rating of
[ICRA]B+ and the short-term rating of [ICRA]A4 assigned to the
INR1.00-crore letter of credit. SRSPL's cash credit facility has
a sub-limit of INR1 crore non fund based limit, which is entirely
interchangeable between long term and short term. The outlook on
the long-term rating is 'Stable'.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-based-Cash 5.00 [ICRA]B+ (Stable) ISSUER NOT
Credit COOPERATING; Rating moved to
the 'Issuer Not Cooperating'
category
Non Fund-based- (1.00) [ICRA]B+ (Stable)/ [ICRA]A4
Letter of Credit ISSUER NOT COOPERATING;
Rating moved to the 'Issuer
Not Cooperating' category
The rating action is based on the best available information. As
part of its process and in accordance with its rating agreement
with SRSPL, 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)/ [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 entity's performance since the time it was
last rated.
Established in 2007 as a private limited company, SRSPL is
engaged in the manufacturing of MS ingot with an installed
capacity of 16,750 metric tonne per annum (MTPA). Besides that,
the company is also engaged in trading of scrap. The company is
also undertaking civil construction work from FY13 onwards. The
promoters have an experience of more than a decade in the MS
ingot manufacturing business through SRSPL and other group
companies.
SHRI GANESH: ICRA Assigns B+ Rating to INR6.0cr Cash Loan
---------------------------------------------------------
ICRA has assigned a long-term rating of [ICRA]B+ to the INR6.00
crore fund-based cash credit limits and the INR4.00 crore
unallocated limits of Shri Ganesh Industries. The outlook on the
long-term rating is 'Stable'.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 6.00 [ICRA]B+ (Stable); Assigned
Unallocated 4.00 [ICRA]B+ (Stable); Assigned
Rationale
The assigned rating takes into account the longstanding
experience of the promoters in the cottonseed processing industry
and their established relationship with suppliers and customers
in the industry.
However, the rating is constrained by the firm's modest scale of
operations; and weak financial profile characterised by low
profitability owing to the limited value-add nature of the
business, leveraged capital structure, weak debt coverage
indicators, and high working capital intensity owing to high
inventory holding. Furthermore, the rating is constrained by the
competitive and fragmented nature of the cottonseed processing
industry, which limits the pricing power. Threats from imports
and substitutes; and the vulnerability of the firm's operations
to agro-climatic conditions, volatility in raw material costs and
risks of regulatory changes are other concerns. In addition to
the above, the rating is constrained by the risk of withdrawals
associated with a partnership firm.
Key rating drivers
Credit strengths
* Longstanding experience of the promoters in the cotton
oil extraction and refining business
* Diversified customer and supplier base
Credit weaknesses
* Modest scale of operations in a commoditised industry
* Financial profile characterised by low profitability due
to low value-add nature of business, leveraged capital
structure and weak debt coverage indicators
* High working capital intensity due to high inventory
* Exposed to high volatility in realisations on the back of
seasonal nature of business and agro-climatic conditions
* Inherent risks associated with oilseed industry owing to
high fragmentation, lack of pricing power, threat from
cheaper import substitutes and intense competition in the
edible oil industry
* Risk of withdrawals associated with a partnership firm
Description of key rating drivers:
The firm produces cotton crude oil and cotton de-oiled cake (DOC)
from cottonseeds. While the cotton DOC is sold to diaries,
farmers and traders as cattle feed, the crude oil is sold to
refineries who process it into cotton refined oil. The major
portion of the revenue is generated through sales of cotton DOC,
which has a yield of 84-86% as compared to 10-12% yield from
cotton crude oil.
The firm sells its refined oil and DOC in western India under the
brand, "Gai Chhap". While oil cake is largely sold in Rajasthan
and Gujarat, refined oil is primarily sold in the local markets
of Nagpur and Buldhana districts as well as in Mumbai and
Kolhapur (Maharashtra).
The firm's revenue growth is linked to cotton production and is
thus vulnerable to agro-climatic conditions. Though the revenues
of the firm have been growing over the last five years, the
revenues fluctuate on account of the cropping seasons and raw
material price fluctuations. On a provisional basis, the revenues
increased by 13% during FY2017 and stood at INR46.49 crore as
compared to INR41.03 crore. Given the limited value addition
involved in the business, operating margins vary between 2-3% and
remain vulnerable to agro-climatic conditions.
SGI is a partnership firm promoted by the Mohata family and is
involved in cotton oil milling for over 40 years. The firm has an
oil mill at Khamgaon (Maharashtra) with a crushing capacity of 80
tonnes per day. The end products of crushing are cotton oil cake
and crude oil, which can be further processed into cotton refined
oil; however, the firm is not engaged in the refining.
The firm has two group companies - Shri Ganesh Veg Oil Products
Pvt. Ltd. and Anand Mahota Agro Industries Pvt. Ltd. Shri Ganesh
Veg Oil Products Pvt. Ltd. was established in 1997 when the
Mohata Group took over an existing cotton oil refinery in
Khamgaon for expansion into the refining space. At present, the
company has a cotton oil mill and a refining unit at Khamgaon.
The total oil mill crushing capacity is 40 tonnes per day and the
capacity for the refinery is 80 tonnes per day. Anand Mahota Agro
Industries Pvt. Ltd., promoted by Mr. Anand Mahota, has an oil
mill and de-linting unit at Nagpur, Maharashtra. It has a
refining and crushing capacity of 80 tonnes per day and a de-
linting capacity of 35 tonnes per day.
SGI recorded a net profit of INR0.16 crore on an operating income
of INR46.49 crore for the financial year-ended March 31, 2017, on
a provisional basis as against a net profit of INR0.55 crore on
an operating income of INR41.03 crore for the year ended
March 31, 2016.
SIDDHI VINAYAK: Ind-Ra Moves B Issuer Rating to Not Cooperating
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Siddhi Vinayak
Enterprises' Long-Term Issuer Rating to the non-cooperating
category. The issuer did not participate in the rating exercise
despite continuous requests and follow-ups by the agency.
Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will
now appear as 'IND B(ISSUER NOT COOPERATING)' on the agency's
website. The instrument-wise rating actions are:
-- INR45 mil. Fund-based limit migrated to non-cooperating
category with IND B(ISSUER NOT COOPERATING)/IND A4(ISSUER NOT
COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
June 10, 2016. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Siddhi Vinayak Enterprises was established as a proprietorship
concern in June 2015 by Mr. Mahendra Nath Singh. The firm is
engaged in the coal trading business.
SIKSHA-O-ANUSANDHAN: ICRA Reaffirms B+ Rating on INR115cr Loan
--------------------------------------------------------------
ICRA has reaffirmed the long-term rating of [ICRA]B+ assigned to
the INR115.00-crore term loans of Siksha-O-Anusandhan (SOA). The
outlook on the long-term rating is 'Stable'.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-based-Term 115.00 [ICRA]B+ (Stable) ISSUER NOT
Loans COOPERATING Rating moved to
the 'Issuer Not Cooperating'
category
The rating action is based on the best available information. As
part of its process and in accordance with its rating agreement
with SOA, ICRA has been trying to seek information from the
society to undertake a surveillance of the rating and had also
sent repeated reminders to the society for payment of
surveillance fee that became overdue. Despite repeated requests
by ICRA, the society'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 society'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 society's performance since the time
it was last rated.
SOA was established in 1995 as a society in Bhubaneswar, Odisha
and manages SOA University (deemed University). SOA University
offers under and post graduate courses across different
disciplines like engineering, medicine, law, management and also
manages a 750 bed hospital. Currently, it has strength of more
than 12,000 students.
SUMANGLAM WOOD: ICRA Reaffirms B- Rating on INR6cr Cash Loan
------------------------------------------------------------
ICRA has reaffirmed its long-term rating of [ICRA]B- on the
INR6.00 crore fund-based bank facilities of Sumanglam Wood
Products (India) Private Limited. ICRA has also reaffirmed its
short-term rating of [ICRA]A4 on the INR10.00 crore bank
facilities of SWPL. The outlook on the long-term rating is
'Stable'.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-based-Cash
Credit 6.00 [ICRA]B- (Stable); reaffirmed
Non-fund based-
Bank Guarantee/
Letter of Credit 10.00 [ICRA]A4; reaffirmed
Rationale
The ratings reaffirmation continues to factor in the moderate
scale of operations of the company and decline in growth in the
operating income in last fiscal year. The sales slumped due to
decline in sales volume in the last quarter of FY2017 as a result
of demonetisation which impacted demand from the customers in
construction and real estate sector. Additionally, the highly
competitive and fragmented industry structure limits the
bargaining power of the company. The profitability remains
exposed to the fluctuations in input prices and foreign exchange
rates as most of the raw materials are imported. The ratings are
further constrained by the persisting sector specific
concentration as a major part of the company's revenue are driven
by the real-estate sector and any slowdown in the construction
activity could impact the revenue growth. The ratings have also
factored in the elongated working capital cycle of the company
due to stretched receivables position due to working capital
intensive nature of SWPL's operations, and the company's reliance
on bank borrowings for funding the working capital requirements.
Further, the ratings also factors in the highly leveraged capital
structure and moderate debt-coverage indicators of the company as
characterised by a gearing of 4.37 times as on March 31, 2017 and
interest cover of 1.21 times in FY2017. Nevertheless, the ratings
take comfort from the long standing experience of the promoters
in the timber industry with established client relationships
which imparts stability to business growth in future. Going
forward, the company's ability to register revenue growth,
improvement in profitability levels and capital structure and
managing the foreign currency fluctuations will be the key rating
sensitivities.
Key rating drivers
Credit Strengths
* Significant experience of the management in the timber
industry spanning close to three decades
* Cost benefits relating to logistics as the factory is located
in proximity to Kandla port where the products are imported
* Diverse clientele base consisting of large number of clients
from government and private entities
Credit Weakness
* High working capital requirement during the year pressurizing
the capital structure with gearing standing at 4.37 times as
on March 31 ,2017; coupled with weak coverage indicators
which was impacted by low profit margins.
* High competitive intensity in the timber and chemicals
trading business owing to low entry barriers and large number
of fragmented players limits pricing flexibility.
* Profit margins remain exposed to forex fluctuations in the
absence of any hedging mechanism
Sensitivities
* The company's ability to improve sales and profitability
levels amidst high competition
* Adverse fluctuation in foreign exchange rates
* Unfavorable regulatory changes in key supplying markets
* Cyclicality in the major end-consuming sectors like real
estate and construction industry hits timber demand
* Company's ability to contain its receivables cycle further
and manage its working cycle
Description of key rating drivers
The promoters of the company have over three decades of
experience in the timber industry. The company deals in teakwood
which is majorly imported from New Zealand, South Africa and
Malaysia. High dependence on imports in absence of formal hedging
policy exposes the company's profitability to foreign exchange
fluctuation risk. The scale of operations remained modest with
fluctuations in revenues in past few years; the operating income
registered ~14% de-growth from INR29.34 Crore in FY2016 to
INR25.19 Crore in FY2017 following decline in demand from the
existing customers, which majorly belongs to construction and
real estate industry. The company remains exposed to sector
specific slowdown in the end customer industry; however its
efforts to diversify the client base to government entities and
other large private timber traders in remains to be seen. The
capital structure of the company continues to remain aggressive
with a gearing of 4.37 times as on March 31, 2017 as against 3.55
times as on March 31, 2016 owing to higher reliance of external
debt coupled with modest net-worth base. High debt coupled with
modest profitability has kept the coverage indicators at moderate
level. The company benefits in terms of ease of logistics and
procurement of imported timber due to close proximity of
Gandhidham (Gujarat) with the Kandla port. However, the same has
attracted numerous timber players in Gandhidham region resulting
into intense competition which restricts the company's pricing
flexibility.
SWPL trades in lumber and chemicals like Ethyl Vinyl Acetate
(EVA), and manufactures packing boxes and pallets, with trading
of timber contributing to ~90% of its total revenues. SWPL
primarily imports timber from New Zealand, South Africa and South
Asian countries. Its saw mill is located at Gandhidham and it has
registered office at Assam Timber Market, Mundka in New Delhi.
SWAPNIL AGRO: CRISIL Reaffirms 'B' Rating on INR6.0MM Cash Loan
---------------------------------------------------------------
CRISIL has reaffirmed its rating on the bank facilities of
Swapnil Agro Private Limited (SAPL) at 'CRISIL B/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 6.0 CRISIL B/Stable (Reaffirmed)
Term Loan 0.1 CRISIL B/Stable (Reaffirmed)
The rating continues to reflect the average financial risk
profile, marked by moderate total outside liabilities to tangible
networth ratio and a modest networth. The rating also factors in
the modest scale of operations, exposure to intense competition
in the agricultural commodity trading segment, and large working
capital requirement. These rating weaknesses are partially offset
by extensive experience of the promoters.
Analytical Approach
CRISIL has treated unsecured loans extended by SAPL's promoters
(outstanding of INR1.48 crore estimated as on March 2017) as
neither debt nor equity. The loans are interest free, and
expected to stay in the business over the medium term.
Key Rating Drivers & Detailed Description
Weakness
* Large working capital requirement: Gross current assets were
estimated at 128 days as on March 31, 2017, due to stretched
receivables and moderate inventory of 20-25 days. The
Vyankateshwara Mahila Audyogik Utpadak Sahakari Sanstha (VMAU)
releases the payment only after it receives funds from the
government department. Working capital requirement is met through
credit from suppliers and external debt, thus resulting in high
bank limit utilisation.
* Modest scale of operations amidst intense competition: Despite
the company's longstanding presence in the agro-commodity trading
segment, the scale remains small and thus, limits the bargaining
power with suppliers and customers.
* Average financial risk profile: Financial risk profile is
average, as reflected in moderate networth and TOL/TNW ratio of
INR5 crore and around 3.7 times, respectively, estimated as on
March 31, 2017. Debt protection metrics were adequate, as
reflected in interest coverage and net cash accrual to total debt
ratios of 2.4 times and 0.15 time, respectively, estimated for
fiscal 2017.
Strengths
* Extensive experience of the promoter: The two decade-long
experience of the promoters, through other firms, such as Balaji
Enterprises and Mahalaxmi Enterprises, has enabled them to build
strong relationships with suppliers such as Vidarbha Enterprises,
Sumit Dal Udyog, and Tirupati Enterprises, and ramp-up scale,
resulting in estimated revenue of around INR77 crore for fiscal
2017.
Outlook: Stable
CRISIL believes SAPL will continue to benefit from the extensive
experience of its promoters. The outlook may be revised to
'Positive' if substantial cash accrual, driven by significant
ramp-up in revenue and profitability, or an equity infusion,
strengthens the capital structure and financial risk profile. The
outlook may be revised to 'Negative' if a decline in revenue or
profitability, or stretch in the working capital cycle, weakens
the financial risk profile, especially liquidity.
SAPL was promoted by Mr. Satish Munde at Nagpur (Maharashtra).
The company supplies agricultural commodities such as jaggery,
chana, moong and edible oil to Vyankateshwara Mahila Audyogik
Utpadak Sahakari Sanstha (VMAU).
For fiscal 2017 SAPL has registered profit after tax of INR0.7 cr
on an operating income of INR 76.5 cr as against profit after tax
of INR0.7 cr on an operating income of INR65 cr for the previous
fiscal.
UNITED EXPORTS: CRISIL Reaffirms 'D' Rating on INR35MM Cash Loan
----------------------------------------------------------------
CRISIL has been consistently following up with United Exports
(UE) for obtaining information through letters and emails dated
January 23, 2017 and February 13, 2017 among others, apart from
telephonic communication. However, the issuer has remained non
cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bill Purchase- 15 CRISIL D (Issuer Not
Discounting Facility Cooperating; Rating
Reaffirmed)
Cash Credit 35 CRISIL D (Issuer Not
Cooperating; Rating
Reaffirmed)
Packing Credit 35 CRISIL D (Issuer Not
Cooperating; Rating
Reaffirmed)
Term Loan 17 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 United Exports. 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 United Exports is consistent with 'Scenario1'
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.
UE was set up as a partnership firm in 1983. The firm's current
partners are Mr. Harish Narang, Mr. Samarth Narang, Mrs. Sangita
Narang and Mr. Sudhanshu Narang. UE mills and processes basmati
and non-basmati rice for sale in the domestic and export markets.
UV BOARDS: ICRA Lowers Rating on INR6cr Cash Loan to B+
-------------------------------------------------------
ICRA has downgraded the long term rating from [ICRA]BB to
[ICRA]B+ for the INR6.00 crore fund based facilities and
reaffirmed the short-term rating at [ICRA]A4 to the INR21.0 crore
non-fund based Letter of Credit facilities and INR1.50 crore
unallocated facilities of UV Boards Limited(the company); the
outlook on the long term rating is Stable.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 6.00 Downgraded [ICRA]B+ (stable)
from [ICRA]BB (stable)
Letter of Credit 21.00 Reaffirmed at [ICRA]A4
Unallocated 1.50 Reaffirmed at [ICRA]A4
As part of its process and in accordance with its rating
agreement with UV Boards Limited, 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+/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.
UV Boards Limited was incorporated as M/s Paro Leasing & Finance
Ltd. in December 1988 and began operations in January 1989. The
company was incorporated as a non-banking finance company (NBFC)
with the objective of carrying on financial hire-purchase and
leasing activities. The company had accumulated losses and
subsequently surrendered the NBFC certificate, changed its
objectives and began the business of manufacturing, trading,
importing and exporting plywood, veneers and allied products in
2005. UV Boards Limited and Scorpio Laminates Private Limited,
which were then, group companies of Uniply Industries Limited,
merged with Paro Leasing and Finance Ltd. and the merged entity
became UV Boards Limited with effect from March 2007.
VARMORA FOODS: CRISIL Lowers Rating on INR6.75MM Term Loan to D
---------------------------------------------------------------
CRISIL has downgraded its rating on the long term bank facilities
of Varmora Foods Private Limited (VFPL) to 'CRISIL D' from
'CRISIL B+/Stable' owing to irregularities in debt servicing
constrained by weak liquidity.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 3.15 CRISIL D (Downgraded from
'CRISIL B+/Stable')
Proposed Long Term 0.10 CRISIL D (Downgraded from
Bank Loan Facility 'CRISIL B+/Stable')
Term Loan 6.75 CRISIL D (Downgraded from
'CRISIL B+/Stable')
The rating also factors VFPL's modest scale of operations along
with presence in a highly fragmented market, stretched liquidity
and below average financial risk profile because of leveraged
capital structure and weak debt protection measures. However, the
company benefits from the managerial support from promoters.
Key Rating Drivers & Detailed Description
Weakness
* Stretched liquidity: Liquidity remains constrained by the high
bank limit utilisation, large debt obligation against modest cash
accrual and working capital intensive operations.
* Below-average capital structure: Networth and gearing were at
INR 2.9 crore and 3.3 times as on March 31, 2016. With modest
accretion and continued high debt, capital structure is estimated
to have remained weak in fiscal 2017. Further, high leverage
constrains debt protection metrics.
* Modest scale of operations and intense competition: The food
products industry is highly fragmented because of low entry
barriers due to less capital- and technology-intensive
operations, small gestation period, easy availability of raw
materials, and lack of product differentiation. Scale of
operations remains modest as reflected in estimated sales of INR
4 crore in fiscal 2017. Also, the Varmora group (manufacturers of
tiles and plastic products) no longer have any association with
the company.
Strengths
* Extensive experience and managerial support from promoters
Directors Mr. Patel and Mr. Trivedi have 15 years of experience
in manufacturing spray-dried powder and food colour, and handle
production and marketing, respectively.
VFPL, incorporated in August 2013, has a processing unit to
manufacture spray dried fruit powder, spray dried vegetable
powder and caramel colour. Its operations commenced from April
2014.
Profit after tax stood at INR0.03 crore on sales of INR 6.2 crore
in fiscal 2016 against loss of INR0.2 crore on sales of INR5.1
crore in the previous financial year.
VTJ SEA: CRISIL Lowers Rating on INR4.25MM LT Loan to 'D'
---------------------------------------------------------
CRISIL has downgraded its ratings on the bank facilities of
VTJ Sea Foods to 'CRISIL D/CRISIL D' from 'CRISIL
B+/Stable/CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bill Discounting 4 CRISIL D (Downgraded from
under Letter of 'CRISIL A4')
Credit
Packing Credit 4.25 CRISIL D (Downgraded from
'CRISIL A4')
Proposed Long Term 4.25 CRISIL D (Downgraded from
Bank Loan Facility 'CRISIL B+/Stable')
The rating downgrade reflect delays in the repayment of working
capital facilities for over 30 days. The delays are due to weak
operating performance. The ratings also factor in the working
capital intensive nature of operations. However the firm benefits
from the promoter's extensive industry experience.
Key Rating Drivers & Detailed Description
Weakness
* Working capital intensive nature of operations: The firm has
working capital intensive operations on account of high inventory
estimated at 105 days as on March 31, 2016.
Strength
* Promoter's extensive industry experience: The promoter of the
firm has more than a decade experience in the seafood export
industry with established relations with suppliers and customers.
Established in 2001 as a proprietorship firm, VTJ is engaged in
processing and exporting of seafood products. Based out of Kochi
(Kerala), the firm is promoted by Mr. Raju J Vayalat.
For 2014-15 (refers to the financial year April 1 to March 31),
VTJ reported a profit after tax (PAT) of INR0.2 crore on a net
sales of INR16 crores against a PAT of INR0.2 crore on a net
sales of INR11 crores for 2013-14.
=========
J A P A N
=========
TAKATA CORP: Nissan to Pay $97.7 Million in Proposed Settlement
---------------------------------------------------------------
The Japan Times reports that Nissan Motor Co. would pay $97.68
million (about JPY10.7 billion) under a proposed settlement with
vehicle owners affected by the Takata air bag recalls.
The report says the settlement would pay for a new outreach
program to ensure Takata air bags are removed from 4.4 million
affected Nissan vehicles. It would also compensate owners for
expenses while getting their cars fixed, including rental cars.
According to the report, Takata's air bag inflators can explode
with too much force, hurling shrapnel into drivers and
passengers. The inflators are blamed for at least 16 deaths and
180 injuries worldwide. The problem touched off the largest
automotive recall in U.S. history.
The Nissan settlement is similar to those reached in May with
Toyota, BMW, Mazda and Subaru, the report notes.
The settlement was filed on Aug. 8 in federal court in Miami, the
report relates. It still needs a judge's approval.
About Takata Corp
Japan-based Takata Corporation (TYO:7312) --
http://www.takata.com/en/-- develops, manufactures and sells
safety products for automobiles. The Company offers seatbelts,
airbags, steering wheels, child seats and trim parts.
Headquartered in Tokyo, Japan, Takata operates 56 plants in 20
countries with approximately 46,000 global employees worldwide.
The Company has subsidiaries located in Japan, the United States,
Brazil, Germany, Thailand, Philippines, Romania, Singapore,
Korea, China and other countries.
Takata Corp. filed for bankruptcy protection in Tokyo and the
U.S., amid recall costs and lawsuits over its defective airbags.
Takata and its Japanese subsidiaries commenced proceedings under
the Civil Rehabilitation Act in Japan in the Tokyo District Court
on June 25, 2017.
Takata's main U.S. subsidiary TK Holdings Inc. and 11 of its U.S.
and Mexican affiliates each filed voluntary petitions under
Chapter11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case
No. 17-11375) on June 25, 2017. Together with the bankruptcy
filings, Takata announced it has reached a deal to sell all its
global assets and operations to Key Safety Systems (KSS) for
US$1.588 billion.
Nagashima Ohno & Tsunematsu is Takata's counsel in the Japanese
proceedings. Weil, Gotshal & Manges LLP and Richards, Layton &
Finger, P.A., are serving as counsel in the U.S. cases.
PricewaterhouseCoopers is serving as financial advisor, and
Lazard is serving as investment banker to Takata. Ernst & Young
LLP is tax advisor. Prime Clerk is the claims and noticing
agent.
Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal
counsel, KPMG is serving as financial advisor, Jefferies LLC is
acting as lead financial advisor. UBS Investment Bank also
provides financial advice to KSS.
On June 28, 2017, TK Holdings, as the foreign representative of
the Chapter 11 Debtors, obtained an order of the Ontario Superior
Court of Justice (Commercial List) granting, among other things,
a stay of proceedings against the Chapter 11 Debtors pursuant to
Part IV of the Companies' Creditors Arrangement Act. The
Canadian Court appointed FTI Consulting Canada Inc. as
information officer. TK Holdings, as the foreign representative,
is represented by McCarthy Tetrault LLP.
The U.S. Trustee has appointed an Official Committee of Unsecured
Trade Creditors and a separate Official Committee of Tort
Claimants. Pachulski Stang Ziehl & Jones LLP represents the
Official Committee of Tort Claimants as bankruptcy counsel.
The Official Committee of Unsecured Creditors has selected
Christopher M. Samis, Esq., L. Katherine Good, Esq., and Kevin F.
Shaw, Esq., at Whiteford, Taylor & Preston LLC, in Wilmington,
Delaware; Dennis F. Dunne, Esq., Abhilash M. Raval, Esq., and
Tyson
Lomazow, Esq., at Milbank Tweed Hadley & McCloy LLP, in New York;
and Andrew M. Leblanc, Esq., at Milbank, Tweed, Hadley & McCloy
LLP, in Washington, D.C., as its bankruptcy counsel.
Chapter 15 Cases
Takata Corporation ("TKJP") and affiliates Takata Kyushu
Corporation and Takata Services Corporation commenced Chapter 15
cases (Bankr. D. Del. Case Nos. 17-11713 to 17-11715) on Aug. 9,
2017, to seek U.S. recognition of the civil rehabilitation
proceedings in Japan. The Hon. Brendan Linehan Shannon oversees
the Chapter 15 cases. Young, Conaway, Stargatt & Taylor, LLP,
serves as Takata's counsel in the Chapter 15 cases.
TOSHIBA CORP: Wins Auditor Endorsement; Posts JPY965.7BB Net Loss
-----------------------------------------------------------------
Pavel Alpeyev at Bloomberg News reports that Toshiba Corp.'s
auditors signed off on its full-year earnings, offering some
temporary relief as the Japanese company struggles to stabilize
after an accounting scandal, massive writedowns and a legal spat
that threatens to delay the sale of its chips business.
The industrial and consumer electronics maker reported a
JPY965.7 billion ($8.8 billion) net loss for the year ended
March 31, it said in a statement, Bloomberg discloses. That
compares with a JPY977.4 billion loss average of analysts'
estimates and the Tokyo-based company's own outlook of as much as
JPY1.01 trillion. Toshiba forecast a JPY230 billion in net income
for the current fiscal year.
Bloomberg relates that while the qualified endorsement for the
numbers marks a milestone for Toshiba, PricewaterhouseCoopers
Aarata also criticized the company's internal controls. Toshiba
said that the adverse opinion may have a "severe negative impact"
on its financing, earnings and ability of shareholders to sell
their shares, according to Bloomberg. The report notes that the
company has been on a watchlist for possible expulsion from the
Tokyo Stock Exchange after overstating profits to cover up
multibillion-dollar losses in its nuclear business. It may face a
delisting depending on a review by the exchange, or if it fails
to patch up its balance sheet by March 2018.
"The fact that they have finally managed to file and got a
qualified endorsement is good news," Bloomberg quotes Hideki
Yasuda, an analyst at Ace Research Institute, as saying. "That's
not to say that the risk of delisting is gone, but at least
they've cleared the most immediate hurdle."
Bloomberg says Toshiba has to sell its flash memory unit by
March 2018 to avoid reporting negative shareholders' equity for a
second fiscal year, which would automatically trigger a
delisting. The divestment may raise about JPY2.1 trillion,
Bloomberg relates citing people familiar with the matter. An
initial public offering of energy-metering company Landis+Gyr AG
will earn Toshiba another JPY161.7 billion for its 60 percent
stake, the company said last month.
According to Bloomberg, the Japanese company said the current
year profit outlook includes proceeds from the Landis IPO, but
not from the chip unit. Toshiba is forecasting a 59 percent rise
in operating profit to JPY430 billion, while sales will climb to
JPY4.97 trillion.
Toshiba also reported earnings results for the latest quarter,
which ended June 30. Operating profit climbed almost sixfold from
last year to JPY96.7 billion as profit from chip operations
quadrupled. Sales rose 8.2 percent, while net income fell
JPY37 percent to JPY50.3 billion, Bloomberg adds.
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.
===============
M A L A Y S I A
===============
MALAYSIAN NEWSPRINT: Goes Bankrupt on Low Newspaper Demand
----------------------------------------------------------
ScandAsia reports that Malaysian Newsprint Industries (MNI) has
gone bankrupt. The Norwegian company Norske Skog is a partial
owner of the company together with Hong Leong Group, The New
Straits Times Press, and Rimbunan Hijau Group, ScandAsia says.
ScandAsia relates that the board of directors has concluded that
the company no longer can proceed do to a very low demand on
newspaper. In the past three years, the company has lost money
according to the media group Media Prima Berhad, ScandAsia
relays. MNI trademarked itself on using 100% recycled fiber in
its manufacturing operations.
Malaysian Newsprint Industries manufactures and supplies paper
across South East Asia with customers from Malaysia, Singapore,
and Hong Kong. The company was established in 1996, in Pahang
Mentakab as an attempt to allow Malaysian and Singaporean
newspaper to source their newsprint without having to import,
according to ScanAsia.
=====================
P H I L I P P I N E S
=====================
* PHILIPPINES: Pre-Need Firms Post PHP831.54MM Net Loss in Q1
-------------------------------------------------------------
The Philippine Daily Inquirer reports that the ailing pre-need
sector suffered a net loss of PHP831.54 million in the first
quarter, reversing the profit posted in 2016, the latest
Insurance Commission data showed.
Total industry bottom line swung to a loss even as pre-need
firms' total premium income from January to March rose 6.1
percent to PHP4.09 billion from PHP3.855 billion a year ago, the
Inquirer discloses.
The Inquirer relates that the number of plans sold during the
first three months increased by a mere 0.06 percent from 183,729
a year ago to 183,837, of which 180,148 were life plans, 3,511
were pension plans and 178 were education plans.
According to the report, preliminary Insurance Commission data
showed that of the 19 licensed pre-need companies, nine posted
net losses at the end of the first three months.
On a per company basis, PhilPlans First Inc. posted the biggest
net loss of PHP1.12 billion, the Inquirer discloses.
The eight other firms that recorded net losses as of end-March
were AMA Plans Inc. (PHP5.24 million), Financial Freedom Future
Planners (PHP60,000), Ayala Plans Inc. (PHP13.09 million),
Manulife Financial Plans Inc. (PHP42.11 million), Sunlife
Financial Plans (PHP8.48 million), Cocoplans Inc. (PHP8.94
million), Loyola Plans Consolidated Inc. (PHP10.04 million), and
Trusteeship Plans Inc. (PHP260,000), the Inquirer discloses.
The Inquirer says the 10 pre-need providers that registered
profits were the following: Caritas Financial Plans (PHP1.22
million), Cityplans Inc. (PHP2.76 million), First Union Plans
Inc. (PHP3.42 million), Paz Memorial Services (PHP2.05 million),
St. Peter Life Plan Inc. (PHP348.66 million), Himlayang Pilipino
Plans Inc. (PHP8.05 million), Mercantile Care Plans Inc.
(PHP330,000), Provident Plans International Corp. (PHP4.64
million), Transnational Plans Inc. (PHP4.42 million), and Eternal
Plans Inc. (PHP1.24 million).
The Inquirer adds that the pre-need industry's total assets
during the first quarter grew 1.32 percent year-on-year to
PHP120.637 billion, as investment in trust funds inched up 0.48
percent to PHP101.855 billion.
Total liabilities in the first three months, meanwhile, rose 4.49
percent to PHP104.779 billion, of which PHP97.591 billion were
pre-need reserves, up 4.01 percent from last year, the Inquirer
relays.
The sector's total net worth as of end-March declined 15.62
percent to PHP15.858 billion, even as capital stock increased
0.32 percent to PHP4.061 billion, the Inquirer relays.
*********
Tuesday's edition of the TCR-AP delivers a list of indicative
prices for bond issues that reportedly trade well below par.
Prices are obtained by TCR-AP editors from a variety of outside
sources during the prior week we think are reliable. Those
sources may not, however, be complete or accurate. The Tuesday
Bond Pricing table is compiled on the Friday prior to
publication. Prices reported are not intended to reflect actual
trades. Prices for actual trades are probably different. Our
objective is to share information, not make markets in publicly
traded securities. Nothing in the TCR-AP constitutes an offer
or solicitation to buy or sell any security of any kind. It is
likely that some entity affiliated with a TCR-AP editor holds
some position in the issuers' public debt and equity securities
about which we report.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR-AP. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com
Friday's edition of the TCR-AP features a list of companies with
insolvent balance sheets obtained by our editors based on the
latest balance sheets publicly available a day prior to
publication. At first glance, this list may look like the
definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical
cost net of depreciation may understate the true value of a
firm's assets. A company may establish reserves on its balance
sheet for liabilities that may never materialize. The prices at
which equity securities trade in public market are determined by
more than a balance sheet solvency test.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Asia Pacific is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Valerie U. Pascual, Marites O. Claro, Joy A. Agravante, Rousel
Elaine T. Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro and
Peter A. Chapman, Editors.
Copyright 2017. All rights reserved. ISSN: 1520-9482.
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