/raid1/www/Hosts/bankrupt/TCRAP_Public/171120.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, November 20, 2017, Vol. 20, No. 230
Headlines
A U S T R A L I A
AUSINO WEST: First Creditors' Meeting Set for November 27
CRCG RIMFIRE: First Creditors' Meeting Set for November 27
DALSTONVILLE PTY: First Creditors' Meeting Set for Nov. 24
ECLIPX TURBO 2017-1: Moody's Rates AUD9.14MM Class F Notes B1
TCB FOX: First Creditors' Meeting Set for November 27
VINCI HOLDINGS: First Creditors' Meeting Set for November 27
* Australia Auto ABS Losses Remain Low in 3Q17, Fitch Says
C H I N A
OCEANWIDE HOLDINGS: Fitch Rates Proposed USD Sr. Notes B
SI CHUAN: Fitch Publishes B Long-Term IDR, Outlook Stable
SI CHUAN: Moody's Assigns First-Time B2 CFR; Outlook Stable
TAHOE GROUP: S&P Assigns B Corp Credit Rating With Stable Outlook
I N D I A
ARYA INDUSTRIES: CRISIL Reaffirms B+ Rating on INR10MM Cash Loan
BALAJI AGRITRADE: CRISIL Assigns B Rating to INR12MM Term Loan
BLUE PINK: CRISIL Lowers Rating on INR4MM Cash Loan to 'D'
BLUE WORLD: CRISIL Reaffirms 'B' Rating on INR18MM LT Loan
CUTTINGEDGE TRANSLATION: CRISIL Assigns B+ Rating to INR1MM Loan
GREEN LEAF: Ind-Ra Assigns 'BB-' LT Issuer Rating, Outlook Stable
IKF TECHNOLOGIES: CRISIL Keeps B+ Ratings on Watch Negative
JAI HANUMAN: CRISIL Reaffirms B+ Rating on INR7.37MM Term Loan
JOHNS UMBRELLA: CRISIL Withdraws B Rating on INR10MM Cash Loan
KALYAN GRAND: CRISIL Reaffirms B- Rating on INR25.5MM Term Loan
M S INFRAENGINEERS: Ind-Ra Affirms BB LT Issuer Rating
MHETRE FOODS: CRISIL Reaffirms D Rating on INR7.5MM LT Loan
NIKHIL FOOTWEAR: CRISIL Reaffirms D Rating on INR50MM Cash Loan
NUTEK INDIA: CRISIL Withdraws C Rating on INR13MM Cash Loan
PHOENIIX: Ind-Ra Affirms B+ LT Issuer Rating, Outlook Stable
PRASANTHI CASHEW: CRISIL Lowers Rating on INR45MM Pack Loan to D
R. R. ENERGY: CRISIL Withdraws D Rating on INR68.9MM Term Loan
RADHA KRISHNA: CRISIL Assigns B+ Rating to INR3MM Cash Loan
RAMVIJAY CLOTHING: Ind-Ra Migrates B+ Rating to Non-Cooperating
SHETRON LIMITED: Ind-Ra Ups Issuer Rating to BB, Outlook Stable
SHRISTHI LPG: CRISIL Assigns B Rating to INR5MM Term Loan
SILVER OAK: Ind-Ra Assigns 'BB+' Ratings to Bank Facilities
SKIPPING STONES: CRISIL Assigns B Rating to INR20MM LT Loan
SRI M.K.V.K. TIMBERS: CRISIL Reaffirms B Rating on INR8.5MM Loan
SRI SATYA: CRISIL Reaffirms B+ Rating on INR5.2MM Cash Loan
SRI SHANDAR: CRISIL Lowers Rating on INR8.75MM LT Loan to 'D'
SUNPOWER CEMENT: CRISIL Downgrades Rating on INR6MM Loan to D
SURYODAY COTEX: CRISIL Lowers Rating on INR4MM Cash Loan to D
SVM NONWOVENS: CRISIL Lowers Rating on INR8.6MM LT Loan to 'D'
SWAGAT ABHARAN: CRISIL Reaffirms B+ Rating on INR13MM Cash Loan
SWAROOP AGRO: CRISIL Reaffirms B+ Rating on INR6MM Term Loan
TOUCH TONE: Ind-Ra Migrates BB- Issuer Rating to Non-Cooperating
TOUCHSTONE PRIVATE: CRISIL Reaffirms B+ Rating on INR3.2MM Loan
VARUN INDUSTRIES: CRISIL Lowers Rating on INR6MM Cash Loan to B+
ZAMIN NATURAL: CRISIL Assigns D Rating to INR11.85MM Term Loan
J A P A N
TAKATA CORP: Ford, Mazda Bids to Delay Recall Decision Denied
M A L A Y S I A
NEXGRAM HOLDINGS: Unit Served With 10 Claims Totalling MYR2.83MM
N E W Z E A L A N D
RESIMAC VERSAILLES 2017-1: S&P Rates Class E Notes 'BB (sf)'
S I N G A P O R E
SWIBER HOLDINGS: Unit in Finland Placed Into Bankruptcy
SWIBER HOLDINGS: Granted Extension to Announce Statements and AGM
S O U T H K O R E A
DAEWOO ENGINEERING: 4 Bidders Shortlisted for Controlling Shares
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A U S T R A L I A
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AUSINO WEST: First Creditors' Meeting Set for November 27
--------------------------------------------------------
A first meeting of the creditors in the proceedings of Ausino
West Pty Ltd will be held at the offices of FTI Consulting, Level
6, 30 The Esplanade, in Perth, West Australia, on Nov. 27,2017,
at 11:00 a.m.
Ian Francis and Michael Ryan of FTI Consulting were appointed as
administrators of Ausino West on Nov. 15, 2017.
CRCG RIMFIRE: First Creditors' Meeting Set for November 27
----------------------------------------------------------
A first meeting of the creditors in the proceedings of CRCG -
Rimfire Pty Ltd will be held at the offices of Grant Thornton
Australia Ltd, Level 18, 145 Ann Street, in Brisbane, Queensland,
on Nov. 27, 2017, at 11:00 a.m.
Michael Gerard McCann and Said Jahani of Grant Thornton were
appointed as administrators of CRCG - Rimfire on Nov. 16, 2017.
DALSTONVILLE PTY: First Creditors' Meeting Set for Nov. 24
----------------------------------------------------------
A first meeting of the creditors in the proceedings of
Dalstonville Pty Ltd and Don Leunig Pty Ltd will be held at
The Conference Room, Plaza Level, BGC Centre, 28 The Esplande, in
Perth, West Australia, on Nov. 24, 2017, at 10:00 a.m.
Sam Kaso & Cliff Rocke of Cor Cordis Chartered Accountants were
appointed as administrators of Dalstonville Pty and Don Leunig on
Nov. 14, 2017.
ECLIPX TURBO 2017-1: Moody's Rates AUD9.14MM Class F Notes B1
-------------------------------------------------------------
Moody's Investors Service has assigned definitive ratings to
notes to be issued by Perpetual Trustee Company Limited in its
capacity as trustee of the Eclipx Turbo Series 2017-1 Trust.
Issuer: Eclipx Turbo Series 2017-1 Trust
AUD60.00 million Class A1 Notes, Assigned P-1 (sf);
AUD207.13 million Class A2 Notes, Assigned Aaa (sf);
AUD14.42 million Class B Notes, Assigned Aa2 (sf);
AUD18.62 million Class C Notes, Assigned A2 (sf);
AUD5.63 million Class D Notes, Assigned Baa1 (sf);
AUD14.42 million Class E Notes, Assigned Ba1 (sf);
AUD9.14 million Class F Notes, Assigned B1 (sf).
The AUD4.57 million G Notes and the AUD17.57 million Seller Notes
are not rated by Moody's.
The ratings address the expected loss posed to investors by the
legal final maturity.
The transaction is an Australian ABS.
It is the fifth Australian ABS transaction issued by Eclipx Group
since 2010.
It is a securitisation of operating, novated and finance leases
extended to Australian government and statutory corporations,
corporates, small and medium-sized businesses and their
employees. The leases are secured by passenger cars commercial
vehicles and equipment.
RATINGS RATIONALE
The definitive ratings take into account, among other factors:
- the evaluation of the underlying receivables and their
expected performance;
- the evaluation of the capital structure;
- the availability of excess spread over the life of the
transaction, the liquidity reserve in the amount of 2.00%
of the initial balance of all notes and funded from note
issuance;
- the interest rate swap provided by Australia and New Zealand
Banking Group Limited (Aa3/P-1/Aa2(cr)/P- 1(cr));
- and the credit strength and experience of Eclipx Commercial
Pty Limited as servicer.
The portfolio consists of vehicle and equipment lease contracts,
comprise of lease installment cash flows and residual value (RV)
cash flows. The present value of the outstanding lease
receivables cashflows is AUD 344.5 million and the nominal value
of estimated RV cash flows amounts to around AUD 107.2 million.
Due to the right of the lessees to return the vehicle at contract
maturity in order to cover the final lease balance outstanding
under an operating lease, the notes are exposed to both default
and market or residual value risk of the related vehicles.
At closing, the Class A Notes, Class B Notes, Class C Notes,
Class D Notes, Class E Notes and Class F Notes benefit from
24.0%, 19.9%, 14.6%, 13.0%, 8.9% and 6.3% of note subordination
respectively. The notes will be repaid on a sequential basis in
the initial stages (until the subordination percentage for the
Class A Notes increases from the initial 24.0% to 40.0% and once
the transaction reaches the 20% pool factor). At all other times,
the structure will follow a pro rata repayment profile.
MAIN MODEL ASSUMPTIONS
Moody's base case assumptions is a weighted average obligor
default rate of 2.94% and assumed a recovery rate of 40.50% in
the event of obligor default.
For the assessment of lessee default risk Moody's has determined
the lessee default distribution of the portfolio using CDOROM,
which simulates lessee defaults based on asset correlations and
default probabilities assumptions.
To account for RV risk in the portfolio Moody's assumes the
following haircuts to the expected lease RV cashflows: Aaa
haircut of 40.0%, a Aa2 haircut of 30.5%, a A2 haircut of 25.5%,
a Baa1 haircut of 23.0%, a Ba1 haircut of 18% and a B1 haircut of
11% on RV cash flows.
Methodology Underlying the Rating Action:
The principal methodology used in these ratings was "Moody's
Global Approach to Rating Auto Loan- and Lease-Backed ABS"
published in October 2016.
Factors that would lead to an upgrade or downgrade of the
ratings:
A factor that could lead to an upgrade of the notes is better-
than-expected collateral performance and a rapid build-up of
credit enhancement.
A factor that could lead to a downgrade of the notes is worse-
than-expected collateral performance. Other reasons that could
lead to a downgrade include poor servicing, error on the part of
transaction parties, a deterioration in the credit quality of
transaction counterparties, lack of transactional governance and
fraud.
Moody's Parameter Sensitivities:
If the default rate rises to 3.82% (30% higher than the Moody's
assumption of 2.94%) and then the model- indicated rating for the
Class A Notes to Class F Notes drop one notch from the assigned
definitive rating levels.
TCB FOX: First Creditors' Meeting Set for November 27
-----------------------------------------------------
A first meeting of the creditors in the proceedings of TCB Fox
Pty Ltd, trading as Houdini Lock Service will be held at the
offices of HLB Mann Judd (Insolvency WA), Level 3, 35 Outram
Street, in West Perth, West Australia, on Nov. 27, at 10:00 a.m.
Kimberley Stuart Wallman of HLB Mann was appointed as
administrator of TCB Fox on Nov. 16, 2017.
VINCI HOLDINGS: First Creditors' Meeting Set for November 27
------------------------------------------------------------
A first meeting of the creditors in the proceedings of Vinci
Holdings (WA) Pty Ltd, trading as Vinci Chrome, will be held at
the offices of Worrells Solvency & Forensic Accountants, Level 3,
15 Ogilvie Road, in Mount Pleasant, West Australia, on Nov. 27,
2017, at 10:30 a.m.
Mervyn Jonathan Kitay of Worrells Solvency was appointed as
administrator of Vinci Holdings on Nov. 15, 2017.
* Australia Auto ABS Losses Remain Low in 3Q17, Fitch Says
----------------------------------------------------------
Australian prime auto ABS losses rose in 3Q17 from a quarter
earlier, but they remained low, and Fitch Ratings expects losses
to improve in 4Q17 as arrears declined in 3Q17 from a quarter
ago. Fitch's ratings can withstand multiples of the current loss
level.
The annualised net loss (ANL) rate increased by 4bp from 2Q17 to
0.48% in 3Q17, but remained in line with the five-year average of
0.48%. In 3Q17, 30+ days arrears reduced to 1.37% from 1.61% a
quarter earlier. The arrears in the 60+ days bucket fell to 0.69%
from 0.79%.
However, the arrears in 3Q17 were at record high for the
quarterly period. The increase in arrears from a year earlier was
mostly in the 60+ days bucket, which rose to 0.69% from 0.59% in
3Q16, due to the inclusion of hardship loans in the reported
numbers.
Fitch believes low wage growth presents a threat to borrower
performance, but Fitch expects overall strong macroeconomic
conditions to continue to support borrowers' ability to service
debt.
The current and historical Dinkum ABS Index data is available in
Excel form through the full report entitled, 'Auto ABS Index -
Australia: The Dinkum ABS Index - 3Q17'.
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C H I N A
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OCEANWIDE HOLDINGS: Fitch Rates Proposed USD Sr. Notes B
--------------------------------------------------------
Fitch Ratings has assigned China-based property developer
Oceanwide Holdings Co. Ltd.'s (B/Negative) proposed US dollar
senior notes a 'B(EXP)' expected rating and a Recovery Rating of
'RR4'.
The proposed notes, to be issued by Oceanwide Holdings
International 2017 Co., Limited, Oceanwide's wholly owned
subsidiary, and be guaranteed by Oceanwide, are rated at the same
level as Oceanwide's senior unsecured rating as they will
represent its direct and senior unsecured obligations. The final
rating is subject to the receipt of final documentation
conforming to information already received.
Oceanwide's rating is supported by its high-quality landbank,
which is sufficient for more than 10 years of development. The
rating is constrained by a rapid increase in leverage, which is
likely to remain high for the next 18-24 months as the company
ramps up development expenditure to support sales growth and
continues to invest in its finance business.
KEY RATING DRIVERS
Leverage Higher but Manageable: Oceanwide's leverage, as measured
by net debt/adjusted inventory and after deconsolidating debt
from the financial business, reached 92% in 2016 (2015: 86%),
which is higher than that of 'B' rated peers. Fitch expects this
ratio to remain above 80% owing to Oceanwide's property-
development business model, which requires more time to generate
sales due to the lengthy primary-land development phase.
Oceanwide's consolidated net debt jumped to CNY74 billion at end-
2016, from CNY39 billion in 2014, following higher development
expenditure, the rapid expansion of its finance business,
additional investment in financial assets and overseas
acquisitions.
Valuable Landbank: A majority of Oceanwide's large land bank was
acquired many years ago and is sufficient for more than 10 years
of development. Sites in tier 1 cities, like Beijing and
Shanghai, affluent tier 2 cities, like Wuhan, and major cities in
the US make up more than 80% of the company's land bank. Many of
Oceanwide's projects in Beijing and Shanghai are in prime
locations. The low land cost, together with the high quality of
Oceanwide's landbank, will be the key driver supporting a solid
EBITDA margin and growth for the next two to three years.
Contracted Sales to Pick Up: Fitch expects Oceanwide's contracted
sales to increase by 15%-20% in 2018, driven by project launches
in Wuhan and sales from new projects in Beijing and Shanghai.
This will drive the company's contracted sales to over CNY20
billion and allow it to generate positive operating cash flow
from its property business to fund its financial-sector
expansion.
Continuing Finance Expansion: Oceanwide has been aggressively
diversifying its business from pure property development to
financial institutions since 2014. It has spent more than CNY20
billion on building its finance business, which includes
securities, trusts, insurance and internet finance. Fitch expect
Oceanwide to continue investing heavily in the finance sector
with an aim to secure licenses for a full range of finance
businesses, which may continue pressuring its leverage. Oceanwide
is also involved in long-term equity investments and short-term
trading on the secondary market.
DERIVATION SUMMARY
Oceanwide has a larger scale in terms of contracted sales and
EBITDA than other China-based property companies rated in the 'B'
category, such as Redco Properties Group Ltd (B/Stable) and
Guorui Properties Limited (B/Stable). However, its leverage is
comparatively higher due to its active investments in financial
institutions and larger exposure to commercial development
properties, which have a longer cash-collection cycle than
industry average. This also drives Oceanwide's lower project
churn compared with peers, but means its landbank, which was
acquired years ago, is undervaluing its inventory compared with
high-churn homebuilders.
KEY ASSUMPTIONS
Fitch's key assumptions within Fitch rating case for the issuer
include:
- Limited new land acquisitions at 0.5x of contracted sales
gross floor area
- Contracted sales growth driven by higher average selling
prices of CNY35,000 per square metre (sq m) in 2017-2018
(2015: CNY32,000/sq m)
- Property development EBITDA margin of 35%-40% in 2017-2019
(2016: 34%)
Recovery rating assumptions
- Oceanwide would be liquidated in a bankruptcy because it is an
asset-trading company
- 10% administrative claims
- The value of inventory and other assets can be realised in a
reorganisation and distributed to creditors
- A haircut of 25% on adjusted inventory, which is in-line with
domestic peers despite its higher-than-industry profit margin,
as Oceanwide is also involved in overseas properties that have
lower margins than domestic projects
- A 20% haircut to investment properties and the net tangible
assets of its financial subsidiaries
- A 50% haircut to available-for-sale financial securities
and land and buildings
- Based on Fitch calculation of the adjusted liquidation value
after administrative claims, Fitch estimate the recovery rate
of offshore senior unsecured debt to be 42%, which corresponds
to a Recovery Rating of 'RR4'
RATING SENSITIVITIES
Negative: Developments that may, individually or collectively,
lead to negative rating action include:
- Contracted sales/net debt excluding financial institutions
below 0.25x for a sustained period or the ratio deteriorating
for a sustained period (2016: 0.16x)
- EBITDA margin below 35% for a sustained period
- Substantial weakening of the credit profile of its key
financial institutions
Positive: Positive rating action is not expected in the next 12-
18 months due to Oceanwide's high leverage
LIQUIDITY
Oceanwide had roughly CNY35 billion in cash and equivalents as of
end-September 2017, sufficient to cover short-term debt of the
same amount. The company was in a tight liquidity position in
2014 and has diversified its funding sources over the past two
years and improved its liquidity position through issuing
offshore bonds, tapping the onshore bond market, replacing short-
term expensive trust loans with long-term debt and equity
placements. Hence, Fitch have seen the company's borrowing costs
gradually trend lower.
SI CHUAN: Fitch Publishes B Long-Term IDR, Outlook Stable
---------------------------------------------------------
Fitch Ratings has published China-based hotel operator Si Chuan
Province JuYang Group Limited a Long-Term Issuer Default Rating
(IDR) of 'B' with a Stable Outlook. Fitch has also assigned the
company a senior unsecured rating of 'B' with a Recovery Rating
of 'RR4'.
JuYang's ratings are supported by the company's stable occupancy,
high proportion of non-room hotel services and healthy financial
profile. The ratings are constrained by JuYang's small business
scale, limited geographical diversification and execution risks
related to its expanding culture and tourism businesses.
KEY RATING DRIVERS
Stable Hotel Operations: JuYang benefits from consistent profit
contributions from its hotel segment, which generated 59% of 2016
group gross profit, excluding property development. A large
portion of business contracts and hotel memberships are likely to
have helped the company achieve a high average occupancy rate of
79% or higher in 2014-2016. The hotel business is also
complemented by non-room services, including food and beverages,
entertainment and conference facilities, which represented
approximately 60% of hotel-segment sales. JuYang intends to add
three new hotels in 2017-2018, with over 1,000 rooms combined; an
increase of 60% compared with end-2016.
Small Scale: JuYang's ratings are constrained by its small
business scale. The company generated EBITDA of less than USD70
million in 2016, excluding the contribution from property sales.
In addition, JuYang's hotel portfolio is geographically
concentrated, with five out of seven hotels located in Luzhou
city and almost all of its operations, including non-hotel
segments, located within Sichuan province at end-2016.
Execution Risks from Expansion: JuYang has started operating a
new culture and tourism segment in 2017, which will include the
operation of movie theatres and the development of the Weiyuan
Shiban River tourist area in Sichuan. Fitch sees the expansion as
positive, since the new businesses are aligned with China's
structural trends of increased domestic travel and experiential
retail shopping. Fitch expects JuYang to benefit from a larger
scale, more diverse revenue streams and quick deleveraging if the
new segment performs well, but execution risks are high due to
JuYang's lack of experience in this area.
Solid Financial Profile: JuYang generates high profitability,
with an EBITDA margin of over 40%, excluding property
development, and has a healthy leverage position. Fitch expects
negative free cash flow in the next two to three years due to
higher expansionary capex, but cash inflow from property sales
should be supportive. The company had a book value of
approximately CNY1.3 billion of developed properties as of end-
2016. Management intends to sell down its inventory over the next
few years.
DERIVATION SUMMARY
JuYang's credit profile is generally weaker than that of global
hotel operators, such as Marriott International, Inc.
(BBB/Positive) and Wyndham Worldwide Corporation (BBB-/Rating
Watch Negative), due to a significantly smaller operating scale,
lack of geographical diversification and limited brand awareness.
JuYang has a smaller hotel portfolio and operating scale compared
with 'B' category NH Hotel Group S.A. (B/Positive), but is
supported by a stronger financial profile with better
profitability and lower leverage.
KEY ASSUMPTIONS
Fitch's key assumptions within Fitch rating case for the issuer
include:
- Three new hotels to be opened in 2017-2018, with the total
number of rooms increasing to 2,744 at end-2017 and 2,924
at end-2018, from 1,831 at end-2016
- Hotel average revenue per available room increasing by 31%
to CNY277 in 2018 and by mid-single-digits thereafter due
to contributions from new five-star hotels with higher average
daily rates and stable room rates and occupancy at 75% for
existing hotels
- Hotel non-room revenue increasing by 23% yoy to CNY476 million
in 2018 following the opening of two new hotels, then
moderating to single-digit growth thereafter
- Revenue contribution from the culture and tourism segment
increasing to CNY293 million in 2020, from CNY12 million in
2017, with the company operating 52 movie theatres by 2020
and developing the Weiyuan Shiban River tourist area
to the ramp-up period for new hotels, improving to 49%-50%
in 2019-2020 as the hotel operations mature and from a higher
contribution from the culture and tourism segment
- Selling, general and administrative expenses at 16% of sales
in 2017-2020 from 14% in 2016
- Capex of CNY700 million in 2017-2018 and CNY600 million in
2019-2020
Key Recovery Rating assumptions:
- JuYang would be liquidated in a bankruptcy rather than
continue as a going-concern
- A haircut of 25% for CNY45 million of receivables, 50% for
CNY163 million of inventory, 50% for all property, plant and
equipment and 30% for other assets, including developed
properties totalling CNY1.1 billion
- 10% administrative claims applied on the liquidation value
- Offshore secured debt of Chinese operating entities moving
ahead of offshore unsecured debt in the distribution waterfall
- JuYang does not have offshore unsecured debt, but the Recovery
Rating is capped at 'RR4', reflecting average recoverability
for offshore creditors in China
RATING SENSITIVITIES
Developments that May, Individually or Collectively, Lead to
Positive Rating Action
- Hotel segment gross profit margin at 55% or higher for a
sustained period (2016: 56%)
- Significantly increased operating scale or diversified earning
sources
- Total adjusted net debt/operating EBITDAR ratio below 1.0x on
a sustained basis (2016: 2.4x)
- Increased transparency of company disclosure
Developments that May, Individually or Collectively, Lead to
Negative Rating Action
- Decline in revenue per available room for existing hotel
portfolio for a sustained period
- EBITDA margin, excluding property development, below 30% for a
sustained period (2016: 52%)
- Failure to generate planned cash flow from property sales
- EBITDAR/(gross interest + rent) below 2.0x (2016: 4.9x)
- Total adjusted net debt/operating EBITDAR above 3.5x for a
sustained period
LIQUIDITY
Adequate Liquidity: JuYang had CNY566 million in cash, including
bank deposits, and over CNY300 million in unutilised banking
facilities as of end-2016, which is more than adequate to cover
its short-term debt of CNY336 million. Liquidity could see some
pressure from negative free cash flow in the next two to three
years due to higher capex, but cash inflow from property sales
should be supportive. The company had an unencumbered asset pool
with a book value of CNY2.3 billion, excluding developed
properties, as of end-2016, which can be a source of contingent
liquidity.
SI CHUAN: Moody's Assigns First-Time B2 CFR; Outlook Stable
-----------------------------------------------------------
Moody's Investors Service has assigned a first-time B2 corporate
family rating (CFR) to Si Chuan Province JuYang Group Limited
(Juyang).
The rating outlook is stable.
RATINGS RATIONALE
"Juyang's B2 CFR reflects its track record of operating hotels
and real estate development profitably in the provinces of
Sichuan and Guizhou, in China," says Stephanie Lau, a Moody's
Vice President and Senior Analyst.
Hotel ownership and management is Juyang's largest business
segment, contributing 43%-50% of its total revenue of RMB1.0-1.5
billion during 2014-16.
Juyang currently operates seven hotels as of June 2017, which are
all in Sichuan. It will have two new hotels opening by the end of
2017, with one located in Sichuan and one in Guizhou.
All hotels benefit from strong visitor demand because of nearby
tourist attractions, including wine manufacturing facilities in
Luzhou, Sichuan.
As a result, Juyang maintained high average hotel occupancy rates
of around 75% and solid consolidated adjusted EBITDA margins of
around 50%-60% during 2014-16.
In addition, Juyang has taken on property development in the
cities of Luzhou, Chishui, Sichuan and Lezhi county, which are
locations near its hotels.
Its property development business, which is the second largest
business segment, contributed about 30%-42% of its total revenue
during 2014-16.
The company achieved high gross development margins of around
45%-50% in the last two years because of its access to low-cost
land. These levels are high compared with Moody's B-rated Chinese
developers, which have average gross margins of around 25-30%.
As of December 2016, the company had saleable property
development resources of around RMB1.5-2.0 billion from four
residential projects, which will offer net cash inflow in the
next two years. The company has no plan to significantly expand
its real estate portfolio beyond these resources, thereby
limiting development risk.
On the other hand, the B2 CFR is constrained by Juyang's scale --
as measured by revenue of around RMB1.5 billion in 2016 -- which
is small when compared to its rated global peers.
Furthermore, the B2 CFR considers Juyang's high geographic
concentration risk, with a high proportion of revenue derived
from hotel management and real estate development in Sichuan. As
a result, it is exposed to the risks of regional economic
downturns or unfavorable local trends.
Juyang's B2 CFR is also constrained by its private company
status, with weaker funding access and corporate governance when
compared with listed companies.
In addition, Juyang's plans to diversify into new businesses,
namely tourism and cinema operations. In particular, it targets
to develop a new tourist attraction area around the Shiban River
in Sichuan, as well as a nationwide cinema chain in the next 2-3
years.
These new businesses will increase the company's execution and
financial risks, and could pressure its B2 rating.
However, the company has flexibility to adjust the pace of new
business investments to demand. Moody's expects Juyang's debt
leverage -- as measured by adjusted debt/EBITDA -- will rise to
around 4.0x-4.5x in the next 12-18 months, compared with 2.3x at
the end of 2016. This level of projected debt leverage is based
on the assumption that its acquisition and capital expenditures
for the new businesses will be substantially funded by debt.
The B2 CFR also reflects Juyang's limited financial flexibility
because of its high level of secured borrowings. The company
reported secured debt of RMB692 million at the end of 2015 and of
RMB1.2 billion at the end of 2016.
Juyang's liquidity is adequate, as shown by its cash/short-term
debt of 213% as of June 2017.
The company raised around RMB600 million through a private
corporate onshore bond issuance in December 2016, which improved
its liquidity and diversified its funding access.
The stable rating outlook reflects Moody's expectation that
Juyang will maintain (1) the profitability of its hotel
management and real estate development businesses; (2) an
adequate liquidity position; and (3) a measured approach in its
investments in the tourist and cinema businesses without
substantially escalating its debt.
Upward rating pressure could develop if Juyang (1) increases its
scale; (2) maintains an adequate liquidity position while its
hotel management and real estate development businesses remain
profitable and cash generating; and (3) improves its debt
leverage, with adjusted debt/EBITDA below 3.5x--4.0x
Downward rating pressure could develop if (1) its liquidity
position deteriorates; (2) the profitability or cash flow of its
core hotel management business deteriorates; (3) expansion
becomes more aggressive in terms of size or level of borrowings;
or (4) adjusted debt/EBITDA exceeds 5x.
The principal methodology used in this rating was Business and
Consumer Service Industry published in October 2016.
Founded in 2003, Si Chuan Province JuYang Group Limited (Juyang)
is a privately owned company with its headquarters in Luzhou,
Sichuan Province. It engages in real estate, finance, and hotel &
tourism businesses in China. As of June 2017, it had seven hotels
in operation, two hotels under development and five completed
commercial and residential properties with an aggregate gross
floor area of 691,100 square meters. The company's chairman, Mr.
XianChun Yu, his wife Mrs. WanXing Huang, and brother Mr. PengFei
Yu collectively owned 100% of Juyang as of the end of 2016.
TAHOE GROUP: S&P Assigns B Corp Credit Rating With Stable Outlook
-----------------------------------------------------------------
S&P Global Ratings assigned its 'B' corporate credit rating to
Tahoe Group Co. Ltd. (Tahoe). The outlook is stable.
S&P said, "At the same time, we assigned a 'B-' issue rating to a
proposed issue of U.S.-dollar-denominated senior unsecured notes
by Tahoe's subsidiary, Tahoe Group Global (Co.) Ltd. The parent
unconditionally guarantees the notes. The issue rating is subject
to our review of the final issuance documentation. We expect the
China-based developer to use the proceeds for onshore project
development and other general corporate purposes.
"The rating on Tahoe reflects our view of the developer's high
financial leverage, weak interest coverage, limited land bank and
sellable resources, and average profitability. In addition, we
expect the company could face significant liquidity pressure due
to its need to refinance debt and acquire new land."
These weaknesses are tempered by Tahoe's sizable and fast growing
sales, strong brand name and product quality, and the good
geographical diversity of its land bank. The company's balanced
product mix between residential and commercial properties is also
a supportive factor. S&P assesses Tahoe's stand-alone credit
profile (SACP) at 'b'.
The credit profile of Tahoe's parent--Tahoe Investment Group Co.
Ltd. (Tahoe Investment)--is a neutral factor for the rating. S&P
said, "We assess Tahoe to be a core subsidiary of Tahoe
Investment and expect the company to remain the primary driver of
the group credit profile (GCP), which we assess at 'b'. In our
view, Tahoe's property development business will continue to
account for over 80% of Tahoe Investment's consolidated revenue
and assets over the next two to three years. The group's other
businesses, including healthcare, financial investments, and life
insurance, are still in nascent stages and unable to generate
significant cash flow.
"We rate the senior unsecured notes one notch lower than the
corporate credit rating because of subordination risk.
"In our view, Tahoe's high leverage is the result of aggressive
debt-fueled expansion in recent years. The company's total
contracted sales grew to more than Chinese renminbi (RMB) 37
billion in 2016, from just over RMB10 billion in 2013. Such
growth placed significant pressure on Tahoe to acquire new land
to sustain the required level of sellable resources. In 2016,
Tahoe spent around RMB27 billion on replenishing its land bank,
equivalent to nearly 80% of the company's attributable sales in
the year. In addition, Tahoe's construction costs are higher than
peers', which in our view is attributable to the developer's high
standards of product quality and longer-than-average
construction. This further weighs on its operating cash flow.
"Tahoe will likely remain heavily reliant on debt financing to
continue to grow. Nonetheless, with revenue and EBITDA tracking
sales growth, we expect the company's leverage to decline from
over 18x in 2016. Under our base case, we forecast the debt-to-
EBITDA ratio will improve to 12x-13x in 2017-2018 while EBITDA
interest coverage modestly improves toward 1.3x.
"We view Tahoe's 2017 total contracted sales target of RMB100
billion to be ambitious. The company achieved about RMB58 billion
of sales in the first ten months of 2017 and planned project
launches will deliver more than RMB100 billion of sellable
resources to the market within the current fiscal year. However,
administrative tightening of China's property market in the
second half of 2017 and going into 2018 is making it harder to
sell high-end courtyard residences and mixed-use apartments.
Nonetheless, we believe Tahoe's strong brand reputation, high
product quality, diversification in strong tier-two cities with
robust price growth momentum, and balanced product mix will
support the company's continuing high growth.
"We forecast Tahoe's attributable contracted sales at around RMB
80 billion in 2017, more than double that in 2016. We also expect
Tahoe to materially improve concentration risk, given its
national expansion. The contribution from the company's home
market of Fujian province will decline to roughly 40% in 2017,
from 60% in 2016."
Tahoe's land bank is smaller than that of peers with similar
level of sales. This puts significant pressure on the company to
acquire new land, and aggressive land acquisitions may make it
harder for Tahoe to control land costs.
As of June 2017, the developer has around 11.7 million square
meters (sqm) of attributable land bank. This is sufficient to
sustain sales at the current level for about three years. Despite
its limited size, Tahoe's land bank is evenly distributed, with
70 projects across 24 cities covering four major regions; 40% of
the land bank by value is located in tier-one cities. In S&P's
view, such an even distribution across regions and tier-one and
tier-two cities can help the company maintain its gross margins.
In new land acquisitions, the company remains inclined to acquire
majority stakes in small target companies with desirable land
banks. In Tahoe's existing land bank, only 11 out of 70 projects
are joint venture (JV) projects and account for about 10% of
total sellable value. S&P expects the proportion of JV projects
to be 10%-15% of attributable sales in the next two to three
years.
S&P said, "We anticipate that Tahoe's reported total debt will
increase to RMB130 billion in 2017 and around RMB170 billion in
2018 to fund its expansion, including land acquisitions, and
maintain a higher cash balance. We expect the company's average
funding cost to increase to over 8%, from about 7.5% currently,
due to a tightening of domestic credit conditions and continued
heavy reliance on funding from trusts and asset management
companies.
"The stable outlook reflects our view that Tahoe will achieve
high contracted sales and revenue growth over the next 12 months.
We expect the company's financial leverage to improve from the
2016 level but stay high. The stable outlook also reflects our
expectation that Tahoe's margins will improve due to higher-
margin projects and a balanced geographical distribution of
sellable resources.
"The rating upside is limited in the coming 12 months because we
expect the company's leverage to remain high, despite improving.
Nevertheless, we could raise the rating if Tahoe's sales growth
and revenue recognition exceeds our expectation while the company
maintains good control on debt growth and funding costs. An
indication for an upgrade could be EBITDA interest coverage
exceeding 2x and the debt-to-EBITDA ratio significantly
improving.
"We may lower the rating if Tahoe's leverage remains high at the
current level with no material improvement. We could also lower
the rating if the company's EBITDA interest coverage is unable to
sustain above 1x or liquidity weakens such that cash generation
is insufficient to cover debt maturities. These scenarios could
happen if the company's sales are weaker or it undertakes more
aggressive land acquisition than we expect."
=========
I N D I A
=========
ARYA INDUSTRIES: CRISIL Reaffirms B+ Rating on INR10MM Cash Loan
----------------------------------------------------------------
CRISIL's rating on Arya Industries (AI) continue to reflect its
exposure to the risks related to the moderate scale of operations
in the highly competitive cotton-ginning industry and below
average financial risk profile. These rating weaknesses are
partially offset by its promoters' extensive experience in the
cotton ginning industry, leading to its established relationships
with customers and suppliers, and location advantages of its
plant.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 10 CRISIL B+/Stable (Reaffirmed)
Term Loan 2.5 CRISIL B+/Stable (Reaffirmed)
Key Rating Drivers & Detailed Description
Weaknesses
* Moderate scale of operations in the highly competitive cotton-
ginning industry: The scale of operations of AI is moderate as
reflected in sales of around INR100 Cr. in 2016-17. The scale of
operations has been constrained due to intense competition in the
industry. CRISIL believes that the scale of operations will
remain moderate over the medium term due to increasing
competition from other players in the sector.
Below average financial risk profile Its financial risk profile
supported by average networth and gearing (estimated to be around
INR7.7 Cr. and around 1.3 times, respectively, as on March 31,
2017). Its debt protection metrics are expected to be strong with
interest coverage of 2.5-3.0 times and net cash accrual to total
debt of 0.1-0.15 times in 2016-17. The financial risk profile is
expected to continue to be below average over the medium term.
Strengths
* Promoters' experience in cotton ginning industry and
established customer and supplier relationships: The key promoter
of the firm, Mr.Kishor Vadiya, Mr. Lakhamshi Patel and Vasant
Vadiya has been engaged with the cotton industry for close to a
decade. Moreover, the promoters have deep understanding of the
dynamics of the local market, and established relationships with
farmer leading to uninterrupted supply of raw material. CRISIL
believes that AI will continue to benefit from the strong
industry experience of its partners thus resulting in sustained
revenue growth over the near to medium term.
Proximity to cotton-growing belts: AI is based in Rajkot, which
is a part of the cotton-growing belt in Gujarat. Gujarat accounts
for nearly 33 per cent of India's total cotton production. The
company will mainly be procuring raw cotton from local markets
(mandis) or farmers, which will reduce the logistics cost and the
raw material requirement for continuous business operations, thus
making its operations more cost-effective. CRISIL believes that
AI's operations will benefit from the proximity of its
manufacturing facilities to the cotton-growing belt.
Outlook: Stable
CRISIL believes AI will continue to benefit over the medium term
from its promoters' extensive industry experience. The outlook
may be revised to 'Positive' if the company stabilises its
operations earlier than expected, leading to substantial increase
in scale of operations and large cash accruals, thus improving
its financial risk profile. Conversely, the outlook may be
revised to 'Negative', if the company achieves lower than
expected cash accruals or its financial risk profile weakens,
caused most likely by stretch in working capital borrowings or,
large debt-funded capital expenditure.
Established in 2014, AI is promoted by Gandhidham (Gujarat) based
Vadiya and Patel family. Majority of the partners have more than
a decade experience of working in the cotton industry. The
promoters are setting up a cotton ginning and pressing plant at
Sattapar, Anjar (Dist. Kutch, Gujarat). Commercial operations for
the firm started from December 2014.
BALAJI AGRITRADE: CRISIL Assigns B Rating to INR12MM Term Loan
--------------------------------------------------------------
CRISIL Ratings has assigned its 'CRISIL B/Stable' rating to the
bank facility of Balaji Agritrade Private Limited (BAPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Rupee Term Loan 12 CRISIL B/Stable (Assigned)
The rating reflects BAPL's weak liquidity and risks related to
initial stage of operations. These weaknesses are partially
offset by experience of promoters.
Key Rating Drivers & Detailed Description
Weaknesses
* Weak liquidity: The promoters have infused around INR6 crore of
funds in project till date while it has availed of INR18.24 crore
against sanctioned term loan of around INR22 crore leading to
debt to equity ratio for project funding mix of around 3 times,
which was earlier proposed to be 1.4 times. Any delay in sale of
shops may severely impact the credit risk profile in absence of
equity infusion by promoters.
* Risks related to initial stage of operations: The project was
initiated in early fiscal 2017. Till date 52% of the proposed 250
shops have been fully constructed and 38% of total proposed shops
have been sold till date. Further, construction is temporarily on
halt and will be resumed after sufficient availability of funds
through sale of further shops or promoters' funding.
Strength
* Experience of promoters: The customers of BAPL are commission
agents. The promoters' have experience in agro-commodity trading
and hence, has established relationship with commission agents in
the district over the years, which will help BAPL in selling the
shops.
Outlook: Stable
CRISIL believes BAPL will continue to benefit from promoters'
healthy relationship with customers. The outlook may be revised
to 'Positive' if more-than-expected shop sales or promoters'
equity infusion lead to sufficient cash buffer available.
Conversely, the outlook may be revised to 'Negative' if
significant delay in promoters' funding required for project
coupled with lower shop lead to modest cash buffer against debt
repayment obligation.
BAPL's primary business is trading of agro commodities. It deals
in the SriGanga Nagar, Rajasthan. However, in fiscal 2017, BAPL
undertook a project to build a private mandi, Balaji Agritrade.
The purpose of establishing mandi is to support the farmers to
sell their crop.
BLUE PINK: CRISIL Lowers Rating on INR4MM Cash Loan to 'D'
----------------------------------------------------------
CRISIL Ratings has downgraded its rating on the long-term bank
facility of Blue Pink Apparels Private Limited (BPAPL) to 'CRISIL
D' from 'CRISIL B/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 4 CRISIL D (Downgraded from
'CRISIL B/Stable')
Long Term Loan 1.67 CRISIL D (Downgraded from
'CRISIL B/Stable')
Th rating downgrade reflects delays in servicing of debt
obligations by the firm. The delays have been on account of weak
operational performance.
The rating also reflects BPAPL's small scale of operations and
below average financial risk profile marked by leveraged capital
structure and modest debt protection metrics. These weaknesses
are partially offset by the promoters' extensive entrepreneurial
experience.
Key Rating Drivers & Detailed Description
Weakness
* Below average financial risk profile: The capital structure is
expected to remain highly leveraged and debt protection metrics
is expected to be subdued over the medium term
* Modest scale of operations in highly fragmented RMG exports:
The scale of operation was small with revenue of around INR10
crore in fiscal 16. The operations are exposed to intense
competition in the fragmented RMG exports industry.
Strength
* Extensive experience of proprietor in the textile industry: The
proprietor Mr. Fakhrudeen's family has been in the RMG exports
for the last two decades. The proprietor's extensive experience
in the industry has helped the firm in establishing strong
relationships with its suppliers and customers.
Based out of Chennai and established in 2012 by Mr.Fakhrudeen Ali
Ahmed, BPAPL is engaged into manufacturing and export of RMG
primarily men shirts, trousers and kids wear.
BLUE WORLD: CRISIL Reaffirms 'B' Rating on INR18MM LT Loan
----------------------------------------------------------
CRISIL Ratings has reaffirmed its rating on the long-term bank
facilities of Blue World Corporation Private Limited (BWCPL) at
'CRISIL B/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Long Term Bank
Facility 18 CRISIL B/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility 7 CRISIL B/Stable (Reaffirmed)
The rating continues to reflect the company's average financial
risk profile and geographic concentration in operations. These
weaknesses are partially offset by the funding support extended
by its promoters.
Analytical Approach
Unsecured loans (INR36.68 crore as on March 31, 2017) extended to
BWCPL by its promoters and affiliates have been treated as
neither debt nor equity as these are subordinated to bank debt
and are likely to remain in business.
Key Rating Drivers & Detailed Description
Weaknesses
* Average financial risk profile: Continuous profit after tax
(PAT) losses over the years, have lowered networth, which was
INR22.1 crore as on March 31, 2017, resulting in an average
financial risk profile. Gearing remained less than 1 time. Debt
protection metrics are weak, with interest coverage and net cash
accrual to total debt ratios of 0.6 time and 0.02 time,
respectively, in fiscal 2017, however expected to improve in the
current fiscal with increase in scale of operation.
* Geographically concentrated business operations: BWCPL has
developed an amusement park at Kanpur and is thus expected to
face geographical concentration in its revenue profile as the
company will be looking for major foot fall from Uttar Pradesh,
which limits the revenue profile to demand within the catered
region only.
Strength
* High financial flexibility of the promoters: Promoters
financial flexibility is high as they have extended sizeable
unsecured loans to the company at INR36.68 crore as on March 31,
2017.
Outlook: Stable
CRISIL believes BWCPL will benefit from the extensive experience
of its promoters and their funding support. The outlook may be
revised to 'Positive', if increase in scale of operation improves
cash accrual and strengthens credit profile. The outlook may be
revised to 'Negative' if low cash accrual or larger-than-expected
debt-funded capital expenditure weakens liquidity.
Incorporated in 2010, BWCPL is owned and managed by M. P K
Mishra. It has developed an amusement-cum-water park in Kanpur
(Uttar Pradesh) named 'Blue World Theme Park'. The same became
operational in September, 2015.
CUTTINGEDGE TRANSLATION: CRISIL Assigns B+ Rating to INR1MM Loan
----------------------------------------------------------------
CRISIL Ratings has assigned its 'CRISIL B+/Stable' rating to the
long-term bank facility of Cuttingedge Translation Services
Private Limited (CTSPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Long Term Bank Facility 1 CRISIL B+/Stable (Assigned)
The rating reflects small scale of operations and large working
capital requirement. These weaknesses are partially offset by
above-average financial risk profile.
Key Rating Drivers & Detailed Description
Weaknesses
* Small scale of operations: Modest scale of operations, with
operating income of INR2.16 crore in fiscal 2017, amid intense
competition limits pricing power with suppliers and customers,
thereby constraining profitability.
* Large working capital requirement: Debtors were sizeable at 90
days as on March 31, 2017, driven by limited pricing power with
suppliers and customers.
Strength
* Above-average financial risk profile: Total outside liabilities
to tangible networth ratio was healthy at 0.97 time as on
March 31 2017, while adjusted interest coverage ratio was
adequate at 5.30 times in fiscal 2017. However, networth is small
at INR0.96 crore as on March 31, 2017.
Outlook: Stable
CRISIL believes CTSPL will continue to benefit from the above-
average financial risk profile. The outlook may be revised to
'Positive' if significant increase in scale of operations and
prudent working capital management strengthen financial risk
profile and liquidity. Conversely, the outlook may be revised to
'Negative' if stretch in working capital cycle, lower-than-
expected cash accrual, or any major capital expenditure weakens
liquidity.
Noida-based CTSPL, incorporated in 2008 by Mr. Devanshu Kalra and
his father Mr. Yash Kumar Kalra, translates content (brochures,
user manuals and legal documents) for clients from industries
such as insurance, ecommerce, information technology,
advertising, and engineering.
GREEN LEAF: Ind-Ra Assigns 'BB-' LT Issuer Rating, Outlook Stable
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Green Leaf
Plasto Private Limited (GLPPL) a Long-Term Issuer Rating of 'IND
BB-'. The Outlook is Stable. The instrument-wise rating actions
are:
-- INR6.9 mil. Term loans due on May 2020 assigned with IND BB-
/Stable rating; and
-- INR99 mil. Fund-based facilities assigned with IND BB-
/Stable/IND A4+ rating.
KEY RATING DRIVERS
The ratings reflect GLPPL's moderate scale of operations, thin
EBITDA margins and weak credit metrics due to its presence in a
competitive foodgrain processing industry. Revenue increased to
INR860 million in FY17 (FY16: INR732 million) on account of an
increase in orders from existing customers. The company booked
revenue of INR495 million in 1HFY18. As of October 2017, it had
an order book of around INR300 million, to be executed in the
next three to four months. Ind-Ra expects revenue to witness a
stable growth in FY18 on account of regular order inflow.
The EBITDA margins remained volatile in the range of 1.7%-2.2%
over FY15-FY17 (FY17: 1.9%, FY16: 1.7%, FY15: 2.2%) owing to
commodity price fluctuations. EBITDA interest coverage (operating
EBITDA/gross interest expense) deteriorated to 1.5x in FY17
(FY16: 1.9x) and net financial leverage (total adjusted net
debt/operating EBITDAR) to 6.9x (5.4x) due to high debt and thin
EBITDA margins.
The ratings are also constrained by GLPPL's tight liquidity
position as reflected by full utilisation of working capital
limits over the 12 months ended October 2017. Net cash conversion
cycle increased to 81 days in FY17 (FY16: 53 days) on account of
an increase in debtor period to 18 days (1 days).
The ratings, however, are supported by the company's promoters'
more than five years of experience in the wheat processing
industry.
RATING SENSITIVITIES
Positive: A substantial improvement in revenue and EBITDA margins
leading to a sustained improvement in the overall credit metrics
will be positive for the ratings.
Negative: A substantial deterioration in the EBITDA margins along
with deterioration in the overall credit metrics or a further
stress on the liquidity position could be negative for the
ratings.
COMPANY PROFILE
Established in 2011, GLPPL is engaged in the processing of raw
wheat grains to produce whole wheat flour and refined flour. The
company began commercial operations in February 2014. Its
manufacturing facility is located in Aurangabad, Maharashtra.
IKF TECHNOLOGIES: CRISIL Keeps B+ Ratings on Watch Negative
-----------------------------------------------------------
CRISIL's ratings on the bank facilities of IKF Technologies
Limited (IKF) continue to be at 'Rating Watch with Negative
Implications'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 2 CRISIL A4/Watch Negative
(Continues on 'Rating Watch
with Negative Implications')
Cash Credit 7 CRISIL B+/Watch Negative
(Continues on 'Rating Watch
with Negative Implications')
Term Loan 2 CRISIL B+/Watch Negative
(Continues on 'Rating Watch
with Negative Implications')
The ratings were placed on watch on August 16, 2017, following
IKF being listed among the 331 suspected shell companies in
Securities and Exchange Board of India's (SEBI's) notification
dated August 7, 2017, to Bombay Stock Exchange (BSE), National
Stock Exchange of India Ltd and Metropolitan Stock Exchange of
India Ltd. SEBI's notification directed the exchanges to put
significant restrictions on the trading of shares for the listed
entities and initiate measures for verification of the
credentials and fundamentals of the companies. Though the
management has written and appealed against the above to BSE, the
eventual impact on operations from the SEBI order is not yet
ascertainable. Currently the operations are continuing normally
as per the management.
CRISIL is closely monitoring the announcements from SEBI
pertaining to the above and will remove the ratings from watch
after the outcome of the proposed due diligence to be conducted
by the exchanges is released and CRISIL is able to ascertain the
impact of the same on the credit profile of the company.
CRISIL's ratings continue to reflect IKF's working capital-
intensive, significant advances to, and investments in,
subsidiaries and sister concerns, and exposure to intense
competition. These weaknesses are partially offset by experience
of the management and comfortable financial risk profile.
Key Rating Drivers & Detailed Description
Weaknesses
* Working capital intensive operations: The operations of the
company have been working capital intensive as reflected in its
high gross current assets (GCAs) of around 703 days as on
March 31, 2017 and 417 days as on March 31, 2016. The GCA days
are high mainly driven by stretched debtors of the company which
stood at 537 days as on March 31, 2017 and 388 days as on March
31, 2016. Efficiency in working capital management amidst
increase in scale shall continue to be key rating driver over the
medium term.
* Significant advances to, and investments in, subsidiaries and
sister concerns: The financial risk profile and liquidity
continues to be significantly constrained by the advances and
investments (adding to around INR85 crore as on March 31, 2017)
made in the wholly owned subsidiaries and sister concerns.
Further such sizeable advances or investments can adversely
impact the business.
* Exposure to intense competition: The business risk profile is
constrained by intense competition from several large and medium
sized players operating from various locations in India. Other
key factors affecting the business include acquiring and
retaining new customers, maintaining an efficient cost structure,
and ensuring effective labour retention and utilisation.
Protectionist measures adopted by the US remain yet another
business challenge for Indian IT companies.
Strengths
* Experience of management: Mr. Sunil Kumar Goyal is the Director
and CEO of IKF. Mr. Goyal have more than a decade of experience
in the BPO and IT industry through IKF. He has over 15 years of
experience in business management, strategic alliance, business
development and strategic planning; he is currently assisted by a
professional team as well. The current management developed good
relationship with customers over the years including telecom
companies such as Aircel Ltd, MTS and Idea Cellular Ltd amongst
others. Due to their strong networking in the business process
outsourcing and IT/ITES sector, IKF has been able to attract new
customers such as Dish TV. Benefits from the management's should
continue to support the business.
* Comfortable financial risk profile: The financial profile
remains comfortable with healthy networth at around INR140 crore
as on March 31, 2017 against INR144 crore a year earlier. The
capital structure too was comfortable supported by the healthy
networth and absence of any significant debt on the books. The
financial profile is expected to improve further over the medium
term supported by gradual accretion to reserve.
IKF, based in Kolkata, was incorporated in 2000 as IKF
Software.com Ltd to carry on the software development business
and provide IT-enabled services. The company got its present name
in 2001 following the initial public offering in 2001. In 2008,
it got Internet Service Provider Category 'A' license from the
Department of Telecom, Government of India to provide internet
services across India.
JAI HANUMAN: CRISIL Reaffirms B+ Rating on INR7.37MM Term Loan
--------------------------------------------------------------
CRISIL Ratings has been consistently following up with Jai
Hanuman Rice & General Mills (JHRGM) for obtaining information
through letters and emails dated July 10, 2017 and August 8, 2017
among others, apart from telephonic communication. However, the
issuer has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 4 CRISIL B+/Stable (Issuer Not
Cooperating; Rating
Reaffirmed)
Term Loan 7.37 CRISIL B+/Stable (Issuer Not
Cooperating; Rating
Reaffirmed)
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of Jai Hanuman Rice & General
Mills. This restricts CRISIL's ability to take a forward Jai
Hanuman Rice & General Mills is consistent with 'Scenario 1'
outlined in the 'Framework for Assessing Consistency of
Information with CRISIL BB rating category or lower. Based on the
last available information, CRISIL has reaffirmed the rating at
'CRISIL B+/Stable'.
JHRGM was established as a partnership firm in 2008 by Mr.
Surinder Kumar and Mr. Hari Krishan. The firm mills and processes
basmati and non-basmati rice. Its facilities are at Gharaunda in
Karnal, Haryana.
JOHNS UMBRELLA: CRISIL Withdraws B Rating on INR10MM Cash Loan
--------------------------------------------------------------
CRISIL Ratings has been consistently following up with Johns
Umbrella Mart (JUM) for obtaining information through letters and
emails dated April 6, 2017 and May 4, 2017 among others, apart
from telephonic communication. However, the issuer has remained
non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 10 CRISIL B (Issuer Not
Cooperating; Rating
Withdrawal)
Long Term Loan 0.8 CRISIL B (Issuer Not
Cooperating; Rating
Withdrawal)
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
CRISIL has withdrawn its rating on the bank facilities of JUM at
the company's request and receipt of no-objection certificate
from banker. The rating action is in line with CRISIL's policy on
withdrawal of its ratings on bank loan facilities.
Set up in 1995, Kerala-based JUM manufactures umbrellas under the
brand, Johns. The proprietor, Mr. Joseph A Thayyil, manages the
firm's daily operations.
KALYAN GRAND: CRISIL Reaffirms B- Rating on INR25.5MM Term Loan
---------------------------------------------------------------
CRISIL Ratings has been consistently following up with Kalyan
Grand Stay Private Limited (KGSPL) for obtaining information
through letters and emails dated July 14, 2017 and August 14,2017
among others, apart from telephonic communication. However, the
issuer has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Term Loan 25.5 CRISIL B-/Stable (Issuer Not
Cooperating; Rating
Reaffirmed)
Proposed Long Term 1.5 CRISIL B-/Stable (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 Kalyan Grand Stay Private
Limited. This restricts CRISIL's ability to take a forward Kalyan
Grand Stay Private Limited is consistent with 'Scenario 1'
outlined in the 'Framework for Assessing Consistency of
Information with CRISIL BB rating category or lower. Based on the
last available information, CRISIL has reaffirmed the rating at
'CRISIL B-/Stable'.
KGSPL was incorporated by Mr. Saravana Prakash K and his family
members in 2011, and is based in Chennai. The company has a 3-
star business hotel, Kalyan Hometel, in Chennai, for which, it
has an operational and managerial tie-up with Sarovar.
M S INFRAENGINEERS: Ind-Ra Affirms BB LT Issuer Rating
------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed M S
Infraengineers Private Limited's (SRMPL) Long-Term Issuer Rating
at 'IND BB'. The Outlook is Stable. The instrument-wise rating
actions are:
-- INR150 mil. Fund-based limits affirmed with IND BB/Stable
rating; and
-- INR40 mil. Non-fund-based limits affirmed with IND A4+
rating.
KEY RATING DRIVERS
The affirmation reflects MSIPL's subdued operational performance
during FY17 due to the slow execution of work orders. Revenue
growth was muted at 0.4% yoy to INR813 million. The ratings
continue to reflect the company's tight liquidity position. Its
maximum working capital utilisation was 98.29% on average for the
12 months ended October 2017.
The ratings, however, are supported by MSIPL's strong and stable
EBITDA margin of 13.9% in FY17 (FY16: 13.9%) and moderate
improved net financial leverage (adjusted net debt/operating
EBITDAR) of 2.6x in FY17 (FY16: 3.3x) and gross interest coverage
(operating EBITDA/gross interest expense) of 2.6x (2.6x). The
leverage improved in FY17 because of term loan repayments.
The ratings are also supported by the promoter's experience of
four decades in the construction business, MSIPL's net cash cycle
of negative 11 days in FY17 and a moderate order book of
INR4,149.82 million (5.1x of FY17 revenue).
RATING SENSITIVITIES
Negative: An increase in the scale of operations along with
maintenance of the credit metrics could lead to a positive rating
action.
Positive: Deterioration in the profitability leading to
deterioration in the credit metrics could lead to a negative
rating action.
COMPANY PROFILE
Incorporated in 1976 as a proprietorship firm, the company was
converted into a private limited firm in June 2011. MSIPL
operates a civil construction business.
MHETRE FOODS: CRISIL Reaffirms D Rating on INR7.5MM LT Loan
-----------------------------------------------------------
CRISIL Ratings has reaffirmed its rating on the long-term bank
facilities of Mhetre Foods Private Limited (FPTPL) at 'CRISIL D'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 4 CRISIL D (Reaffirmed)
Long Term Loan 7.5 CRISIL D (Reaffirmed)
The ratings reflect delays in servicing term debt due to weak
liquidity, on account of lower than expected ramp up in scale of
operations leading to lower cash accrual generation.
Key Rating Drivers & Detailed Description
Weakness
* Small scale of operations: Due to lower-than-expected ramp-up
in operations leading to small revenue at INR6.16 crore in fiscal
2017.
* Delays in debt servicing: The company has delayed servicing
term debt obligation on account of lower ramp up in scale of
operations leading to lower cash accrual which were insufficient
against repayment obligations.
Strength
* Extensive experience of the promoters: Benefits from the
promoters' two-decade long experience in the industry should
support business.
Incorporated in 2011, MFPL processes vegetables and commenced
operations in September 2015. The company, promoted by Mr. Dilip
Mhetre, Mr. Prakash Mhetre and Mr. Vikas Mhetre, is based in
Daund (Maharashtra).
NIKHIL FOOTWEAR: CRISIL Reaffirms D Rating on INR50MM Cash Loan
---------------------------------------------------------------
CRISIL Ratings has been consistently following up with Nikhil
Footwear Pvt Ltd (NFPL) for obtaining information through letters
and emails dated July 17, 2017 and August 08,2017 among others,
apart from telephonic communication. However, the issuer has
remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 50 CRISIL D (Issuer Not
Cooperating; Rating
Reaffirmed)
Letter of Credit 20 CRISIL D (Issuer Not
Cooperating; Rating
Reaffirmed)
Standby Letter of 3 CRISIL D (Issuer Not
Credit Cooperating; Rating
Reaffirmed)
Term Loan 7.64 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 Nikhil Footwear Pvt Ltd. This
restricts CRISIL's ability to take a forward Nikhil Footwear Pvt
Ltd is consistent with 'Scenario 1' outlined in the 'Framework
for Assessing Consistency of Information with CRISIL BB rating
category or lower. Based on the last available information,
CRISIL has reaffirmed the rating at 'CRISIL D/CRISIL D'.
NFPL, established in 1987, is promoted and managed by Mr. Naresh
Agarwal. The company manufactures footwear at its facilities in
Kundli and Bahadurgarh, both in Haryana.
NUTEK INDIA: CRISIL Withdraws C Rating on INR13MM Cash Loan
-----------------------------------------------------------
CRISIL Ratings has withdrawn its rating on the bank facility of
Nutek India Limited (Nutek). The rating has been withdrawn after
receipt of the no-objection certificate from State Bank of India.
The rating action is in line with CRISIL's policy on withdrawal
of its bank loan ratings.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 1.25 CRISIL A4/Watch Negative
(Withdrawal)
Cash Credit 13.0 CRISIL C/Watch Negative
(Withdrawal)
Letter of Credit 1.25 CRISIL A4/Watch Negative
(Withdrawal)
Proposed Long Term 34.50 CRISIL A4/Watch Negative
Bank Loan Facility (Withdrawal)
Nutek was set up in 1993, by Mr. Inder Sharma. The company is a
telecom infrastructure services provider, offering infrastructure
rollout solutions for both mobile and fixed telecom networks. It
also offers services for installation and maintenance of telecom
network equipment and infrastructure.
PHOENIIX: Ind-Ra Affirms B+ LT Issuer Rating, Outlook Stable
------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed Phoeniix's Long-
Term Issuer Rating at 'IND B+'. The Outlook is Stable. The
instrument-wise rating actions are:
-- INR3.4 mil. Long-term loans withdrawn (instrument was repaid
in full) with WD rating;
-- INR160 mil. Fund-based facilities affirmed with IND
B+/Stable/IND A4 rating; and
-- INR3 mil. Non-fund-based facilities affirmed with IND A4
rating.
KEY RATING DRIVERS
The affirmation reflects Phoneiix's continued moderate credit
profile and high customer concentration risk.
Revenue declined to INR353.8 million in FY17 (FY16: INR397.5
million) on account of a lesser number of orders from its two key
customers, which contributed 90% to the firm's revenue during
FY17. The firm has indicated INR173 million in revenue during
7MFY18 and has orders worth INR150 million which will be executed
by January 2018. EBITDA margin was stable at 10.8% in FY17 (FY16:
10.6%). Net leverage (Ind-Ra adjusted net debt/operating EBITDA)
was 3.5x in FY17 (FY16: 2.6x) and interest coverage (operating
EBITDA/gross interest expense) was 5.1x (5.6x). The deterioration
in the credit metrics was on account of a decline in the absolute
EBITDA to INR38.3 million in FY17 (FY16: INR42.1 million) along
with an increase in working capital requirements due to a
stretched net working capital cycle of 218 days (104 days).
The ratings factor in the sole proprietorship form of
organisation.
The ratings, however, are continued to be supported by the
promoters' two decades of experience in the textile industry and
the company's longstanding association with the two key
customers. Moreover, the firm's liquidity remains comfortable
however; its average maximum utilisation of the fund-based
facilities increased to around 66% over the 12 months ended
October 2017 from 45% during the 12 months ended October 2016.
RATING SENSITIVITIES
Negative: A substantial decline in the revenue and profitability
resulting in a sustained deterioration in the credit profile
could lead to a negative rating action.
Positive: A sustained improvement in the profitability leading
to a sustained improvement in the credit profile could lead to a
positive rating action.
COMPANY PROFILE
Incorporated in 1994, Phoeniix is a Tamil Nadu-based
proprietorship concern set up by Mr. T.M. Muthukumar. It
manufactures and exports knitted garments for men, women and
children. It supplies predominantly to reputed customers such as
Primark Stores Limited and Mother Care UK Limited.
PRASANTHI CASHEW: CRISIL Lowers Rating on INR45MM Pack Loan to D
----------------------------------------------------------------
CRISIL Ratings has downgraded its ratings on the bank facilities
of Prasanthi Cashew Company (PCC) to 'CRISIL D/CRISIL D' from
'CRISIL B/Stable/CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Foreign Bill
Purchase 5 CRISIL D (Downgraded from
'CRISIL A4')
Packing Credit 45 CRISIL D (Downgraded from
'CRISIL A4')
Packing Credit 30 CRISIL D (Downgraded from
'CRISIL B/Stable')
The downgrade reflects delays in servicing of debt obligation by
PCC due to stretched working capital cycle, driven by large
inventory and receivables.
Key Rating Drivers & Detailed Description
Weakness
* Below average financial risk profile: The firm's financial risk
profile continues to remain below average, marked by modest net
worth and high gearing of INR11 crores and 18 times respectively
estimated as on March 31 2017.
Strength
* Extensive experience of the promoters: Benefits from the
promoters' extensive experience in the industry and established
relationships with suppliers and customers should support
business.
Kerala-based PCC, founded in 1984 as a proprietorship firm by Mr.
Mohan Chandra Nair, processes and exports cashew kernels.
R. R. ENERGY: CRISIL Withdraws D Rating on INR68.9MM Term Loan
--------------------------------------------------------------
CRISIL Ratings has been consistently following up with R. R.
Energy Limited (RREL) for obtaining information through letters
and emails dated April 4, 2016, and December 9, 2016, among
others, apart from telephonic communication. However, the issuer
has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 2.1 CRISIL D (Issuer Not
Cooperating; Rating
Withdrawal)
Cash Credit 24.0 CRISIL D (Issuer Not
Cooperating; Rating
Withdrawal)
Letter of Credit 1.0 CRISIL D (Issuer Not
Cooperating; Rating
Withdrawal)
Term Loan 68.9 CRISIL D (Issuer Not
Cooperating; Rating
Withdrawal)
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
CRISIL has withdrawn its rating on the bank facilities of RREL.
The rating has been withdrawn after receipt of request from the
company and no objection certificate from bank. The rating action
is in line with CRISIL's policy on withdrawal of its bank loan
ratings.
RREL (formerly RR Energy Pvt Ltd) was founded by the
Chhattisgarh-based Agrawal family in 2004. The company operates a
15 megawatt (MW) rice husk power plant and a 30,000 MTPA ferro
alloy plant in Raigarh (Chhattisgarh).
RADHA KRISHNA: CRISIL Assigns B+ Rating to INR3MM Cash Loan
-----------------------------------------------------------
CRISIL Ratings has assigned its 'CRISIL B+/Stable' rating to the
long term bank facilities of Radha Krishna Rice Mill - Raipur
(RKRM). The ratings reflect modest scale in the intensely
competitive rice industry, subdued financial risk profile,
exposure to risks related to fluctuations in raw material prices
and uneven monsoon. These rating weaknesses are offset by
extensive experience of proprietor in rice industry.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Warehouse Receipts 3 CRISIL B+/Stable (Assigned)
Term Loan 0.73 CRISIL B+/Stable (Assigned)
Proposed Fund-Based
Bank Limits 0.27 CRISIL B+/Stable (Assigned)
Bank Guarantee 1 CRISIL B+/Stable (Assigned)
Cash Credit 3 CRISIL B+/Stable (Assigned)
Key Rating Drivers & Detailed Description
Weaknesses
* Modest scale in the intensely competitive rice industry:
Limited capacity and intense competition in the rice industry
have led to a modest scale, as reflected in revenue of INR13.98
crore in fiscal 2017. Modest scale also restricts benefits of
economies of scale and limits pricing flexibility, thereby
constraining profitability.
* Subdued financial risk profile: As on March 31, 2017, networth
was small at INR1.48 crore, and total outside liabilities to
tangible networth ratio and gearing were high at over 3.69 times
and 3.26 times, respectively. With continued large working
capital debt, gearing is expected to remain high over the medium
term. Interest coverage ratio was muted at 1.6 times during
fiscal 2017 due to low profitability and high debt level.
* Exposure to risks related to volatility in raw material prices
and uneven monsoon: Vulnerability of the crop to the vagaries of
the rainfall can lead to fluctuations in availability and prices
of paddy, and consequently, impact the business risk profiles of
rice processors such as RKRM.
Strength
* Proprietor's extensive industry experience: The proprietor has
extensive experience and understanding of the dynamics of the
local market, which helps in anticipating price trends and
calibrating purchasing and stocking decisions.
Outlook: Stable
CRISIL believes RKRM will benefit over the medium term from the
proprietor's extensive experience. The outlook may be revised to
'Positive' if substantial and sustained revenue growth while
maintaining profitability leads to high cash accrual and
improvement in financial risk profile. The outlook may be revised
to 'Negative' if revenue or profitability are lower-than-
expected, or stretch in working capital cycle leads to
deterioration in financial risk profile and liquidity.
Established by Mr. Mohan Lal Aggarwal, RKRM processes rice and
started its commercial operations in 1989. It has an installed
paddy milling capacity of 8 tonne per hour. Its rice mill is
located in Raipur, Chhattisgarh.
RAMVIJAY CLOTHING: Ind-Ra Migrates B+ Rating to Non-Cooperating
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Ramvijay
Clothing Company 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 B+(ISSUER NOT COOPERATING)' on the
agency's website. The instrument-wise rating actions are:
-- INR10.8 mil. Long-term loan migrated to non-cooperating
category with IND B+(ISSUER NOT COOPERATING) rating; and
-- INR55 mil. Fund-based limit migrated to non-cooperating
category with IND B+(ISSUER NOT COOPERATING)/IND A4(ISSUER
NOT COOPERATING) rating; and
-- INR5 mil. Non-fund-based limits migrated to non-cooperating
category with IND A4(ISSUER NOT COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
Nov. 18, 2016. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Mumbai-based Ramvijay Clothing Company, incorporated in 1998,
manufactures trouser fabrics.
SHETRON LIMITED: Ind-Ra Ups Issuer Rating to BB, Outlook Stable
---------------------------------------------------------------
India Ratings has upgraded Shetron Limited's (Shetron) Long-Term
Issuer Rating to 'IND BB' from 'IND D'. The Outlook is Stable.
The instrument-wise rating actions are:
-- INR343.1 mil. (reduced from INR438.31 mil.) Long-term loan
due September 2019 upgraded with IND BB/Stable rating; and
-- INR362.5 mil. (increased from INR287.5 mil.) Fund-based
facilities upgraded with IND BB/Stable/IND A4+ rating; and
-- INR390.0 mil. (increased from INR370.0 mil.) Non-fund-based
facilities upgraded IND BB/Stable/IND A4+ rating.
KEY RATING DRIVERS
The upgrade reflects timely debt servicing by Shetron during the
three quarters ended October 2017.
The ratings remain supported by the company's established track
record of over 30 years in the metal packaging industry.
The ratings are constrained by weak credit metrics, albeit
marginally improved. In FY17, EBITDA interest coverage (operating
EBITDA/gross interest expense) was 1.7x (FY16: 1.6x) and net
financial leverage (total adjusted net debt/operating EBITDA) was
3.5x (FY16: 3.6x). The improvement in credit metrics was mainly
due to a reduction in debt.
The ratings are also constrained by Shetron's moderate scale of
operations and volatile EBITDA margin. Revenue declined to
INR1,487 million in FY17 from INR1,578 million in FY16 due to a
fall in orders for its battery division and the demonetisation
impact in 3QFY17 and 4QFY17. Shetron booked INR547.2 million in
revenue for 1QFY18. As of October 2017, it had an order book of
INR370.8 million, which will be executed in the next three
months, providing moderate near-term revenue visibility. EBITDA
margin was 15.5%-17.5% during FY14-FY17, with the FY17 level
standing at 15.50%. The volatility in EBITDA margin was due to
fluctuating raw material prices and a decline in the battery
division sales (higher margins).
The ratings continue to be constrained by a tight liquidity,
indicated by an average utilisation of about 94.2% and about 94%
of fund-based and non-fund based limits during the 12 months
ended October 2017.
RATING SENSITIVITIES
Negative: Any decline in revenue and EBITDA margin leading to
stressed liquidity will be negative for the ratings.
Positive: Maintaining the scale of operations, EBITDA margin and
credit metrics while improving the liquidity will be positive for
the ratings.
COMPANY PROFILE
Shetron is a Bengaluru-based company listed on the Bombay Stock
Exchange. It was established in 1980 by Mr Diwakar S Shetty and
his associates, jointly with Karnataka State Industrial &
Investment Development Corporation. The company manufactures
metal packaging, printed metal sheets, metal cans and lug caps
for foods and dry-cell battery jackets and components.
SHRISTHI LPG: CRISIL Assigns B Rating to INR5MM Term Loan
---------------------------------------------------------
CRISIL Ratings has assigned its 'CRISIL B/Stable' rating to the
long-term bank facility of Shristhi Lpg Botling Plant Private
Limited.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Term Loan 5 CRISIL B/Stable (Assigned)
The rating reflects exposure to risks related to implementation
of the ongoing project, stabilisation of operations thereafter,
and commensurate ramp-up in sales. The rating also factors in the
average financial risk profile, likely to be driven by debt-
funded capital expenditure (capex). These weaknesses are
partially offset by healthy demand prospects for LPG cylinders.
Key Rating Drivers & Detailed Description
Weaknesses
* Exposure to risks related to implementation of ongoing project,
stabilisation of operations, and ramp-up in sales: The project is
at a nascent stage of implementation, and the term loan has not
been sanctioned as on date. Hence, the company could face funding
risk along with implementation risks over the medium term.
Operations are expected to start from April 2018.
* Financial risk profile to be average: The capital structure is
expected to be leveraged, due to the small networth and debt-
funded project. Gearing is expected to be around 1.7 times as on
March 31, 2019.
Strength
* Healthy demand prospects for LPG: As the company is setting up
a plant for bottling of LPG cylinders at Guwahati, it is likely
to benefit from the demand-supply gap in the North-eastern
states.
Outlook: Stable
CRISIL believes SLPG will continue to benefit from the healthy
demand prospects of LPG cylinders in the North-east region. The
outlook may be revised to 'Positive' in case of substantial ramp-
up in scale, completion of project within the budgeted cost, and
commencement of commercial operations as scheduled. Any
significant time and cost overrun in implementation, or delay in
stabilising operations, weakening the debt servicing ability, may
result in a revision in the outlook to 'Negative'.
Incorporated in April 2017, SLPG has been promoted by Mr. Anurag
Kumar Chaudhary and his wife, Ms Divya Singh. The company
proposes to set up an LPG bottling plant and market the same
under its own brand in Assam. Operations are expected to start in
April 2018.
SILVER OAK: Ind-Ra Assigns 'BB+' Ratings to Bank Facilities
-----------------------------------------------------------
India Ratings and Research (Ind-Ra) has undertaken the following
rating actions on Silver Oak Shops Offices Co. Op. Housing
Society Limited's (Silver Oak) bank facilities:
-- INR199.57 mil. Term loans* assigned with IND BB+/Stable
rating; and
-- INR100.00 mil. Overdraft assigned IND BB+/Stable rating.
*The details of the term loans are provided in Annexure.
KEY RATING DRIVERS
The ratings are constrained by Silver Oak's current tight
liquidity. In FY17, available funds to total long-term debt ratio
was 3.72% (FY16: 16.66%) and available funds to operating
expenditure ratio was 7.18% (30.20%). The decline in the ratios
was due to the utilisation of funds towards an ongoing capex,
which is likely to be completed by FYE19.
The ratings are also constrained by a high debt burden, reflected
by debt/current balance before interest and depreciation (CBBID)
of 3.42x in FY17 (FY16: 4.00x). Ind-Ra expects an improvement in
CBBID on account growing headcount and market stability.
However, the ratings are supported by an increasing headcount,
which expanded at a CAGR of 31.78% to 5,859 over FY13-FY17 and
further increased to 6,482 students in academic year 2017-18, and
comfortable coverage ratios. In FY17, debt service coverage ratio
was 1.28x in FY17 (FY16: 1.19x) and interest coverage ratio was
3.88x (2.67x). The improvement in both ratios was driven by an
increase in CBBID.
Silver Oak maintained a healthy operating margin above 35% over
FY13-FY17. Operating margin peaked at 51.84% in FY13 and
thereafter declined to 36.79% in FY16. It marginally improved to
39.25% in FY17. Current balance margin stood at 6.97% in FY17
(FY16: 5.44%).
Tuition fee, the major component of the total income, expanded at
a CAGR of 35.98% to INR360.83 million over FY13-FY17, driven by
an increasing headcount. It represented an average 98.75% of the
total income over FY13-FY17. During the period, total expenditure
largely included staff costs (average 44.04%), followed by
depreciation (average 23.95%). Ind-Ra expects fee income to
steadily grow on account of increasing headcount and fee
revisions.
RATING SENSITIVITIES
Negative: Any unexpected fall in student demand, along with a
further increase in debt in relation to total income, could
negatively affect the ratings.
Positive: An improvement in liquidity, a reduction in debt burden
and an improvement in operating margin driven by strong headcount
growth on a sustained basis could positively affect the ratings.
COMPANY PROFILE
Incorporated in 2006, Silver Oak manages two engineering colleges
in Ahmedabad, Gujarat: Silver Oak College of Engineering and
Technology (SOCET; set up in 2009) and Aditya Silver Oak
Institute of Technology (ASOIT; established in 2012).
SOCET offers graduate and postgraduate programmes in engineering
and technology in six specialisations (IT, civil, mechanical,
electrical, aeronautical and computer engineering). ASOIT offers
the same undergraduate courses as offered by SOCET, with chemical
engineering as an additional course. All courses are approved by
the All India Council of Technical Education and affiliated to
Gujarat Technological University.
SKIPPING STONES: CRISIL Assigns B Rating to INR20MM LT Loan
--------------------------------------------------------------
CRISIL Ratings has assigned its 'CRISIL B/Stable' rating to the
bank facilities of Skipping Stones Private Limited (SSPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Long Term Loan 20 CRISIL B/Stable (Assigned)
The rating reflects exposure to risk associated with timely
completion and stabilization of the company's ongoing hotel
project, geographical concentration in its revenue and
susceptibility to cyclicality in the hospitality industry. These
rating weaknesses are partially offset by the extensive industry
experience of the company's promoters.
Key Rating Drivers & Detailed Description
Weaknesses
* Risk associated with timely completion and stabilization of the
company's ongoing hotel project: The business risk profile of
SSPL is significantly constrained by the fact that the project is
in initial stages. The completion of the project on time would
significantly depend on the timely infusion of funds by the
promoters and disbursal of bank lines. Further any delay in
commissioning the project could result in lower-than-expected
accrual and consequently impact its liquidity.
* Geographical concentration in revenue and susceptibility to
cyclicality in the hospitality industry: Since the entire revenue
will be derived from the hotel in Sikkim, any slowdown in demand
or any force majeure event can adversely impact the business risk
profile of SSPL. Moreover, this limits access to a wider customer
base, and makes it more vulnerable to competition from bigger
players in the hospitality industry which have the advantage of
geographical diversity and larger scale of operations.
Strength
* Extensive Industry Experience of the company's promoters: Mr.
Govind Prasad Sharma, project head, has served government of
Sikkim from 1976 to 2010 and retired as the secretary cum
principal chief engineer of roads and bridges, Government of
Sikkim. He has been managing and implementing huge public works
projects in the past and gained experience over the years. Mr.
Lokesh Sharma has worked with companies such as Zee Entertainment
(Delhi), B4U Entertainment (Mumbai) and IN TV (Dubai) and won a
Silver Medal in Promax International Awards for his promos in
B4U. He has also marketed campaigns for well-known resorts in
state. Mr. Ritesh Sharma currently spear heads the Green
Development initiatives at Skipping Stones and has been
instrumental in bringing about a lot of eco sensitive development
ideas to the team. Moreover SSPL has successfully developed a
holiday resort, The Retreat at Baiguney, with 31 guest rooms, in
2010.
Outlook: Stable
CRISIL believes SSPL will continue to benefit over the medium
term from the promoters' experience. The outlook may be revised
to 'Positive' if hotel project is implemented on time, without
any significant cost overrun, and is able to demonstrate higher
than expected occupancy levels, thus strengthening liquidity.
Conversely, the outlook may be revised to 'Negative' if
significant time or cost overruns in commissioning of project,
low cash accrual, or substantial debt-funded capital expenditure
programme weakens financial risk profile.
SSPL, incorporated on April 02, 2008, has developed a flagship
project, The Retreat at Baiguney, in Baiguney, West Sikkim in
2010, a holiday resort with 31 guest rooms spread over six acre;
it is being operated by Mahindra Hotels and Resorts India Ltd
under the banner, Club Mahindra Baiguney Sikkim. The company is
owned and managed by Gangtok-based Mr. Lokesh Sharma, Mr. Ritesh
Sharma, Mrs. Shradha Sharma and Mrs. Lalita Sharma.
SRI M.K.V.K. TIMBERS: CRISIL Reaffirms B Rating on INR8.5MM Loan
----------------------------------------------------------------
CRISIL Ratings has reaffirmed its 'CRISIL B/Stable/CRISIL A4'
ratings on the bank facilities of Sri M.K.V.K. Timbers and Saw
Mills (MKVKTSM; part of the MKVK group).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 1.25 CRISIL B/Stable (Reaffirmed)
Foreign Letter of
Credit 8.50 CRISIL B/Stable (Reaffirmed)
Proposed Short Term
Bank Loan Facility 1.25 CRISIL A4 (Reaffirmed)
The ratings continue to reflect the MKVK group's modest scale of
operations and large working capital requirement. These
weaknesses are partly offset by its promoters' experience in the
timber industry.
Analytical Approach
For arriving at its ratings, CRISIL has combined the business and
financial risk profiles of MKVKNF (Sri MKV Kandasamy Nadar Firm)
and its sister concern MKVKTSM, as the two firms, together
referred to as the MKVK group, have common promoters, are in the
same business, and have fungible cash flow.
Key Rating Drivers & Detailed Description
Weakness
* Modest scale of operations in a highly fragmented industry: The
MKVK group's modest scale, reflected in revenue of INR20 crores
in fiscal 2017, in the highly fragmented timber industry will
continue to constrain its profitability.
* Large working capital requirement: Gross current assets were at
290 days as on March 31, 2017, due to large inventory and
receivables. Inventory remains high due to high lead time in
procurement and seasonal availability of raw material.
Strength
* Promoters' extensive experience in the timber trading business:
The promoters' experience of over 30 years in the timber trading
business will continue to support the firm's business risk
profile.
Outlook: Stable
CRISIL believes the MKVK group will maintain its business risk
profile over the medium term backed by established relationships
with customers. The outlook may be revised to 'Positive' if
increase in revenue and profitability leads to significantly
better liquidity. Conversely, the outlook may be revised to
'Negative' if stretch in the working capital cycle or
deterioration in margins weakens liquidity.
Established in 1987 in Pavoorchatram, Tamil Nadu, MKVKNF is
promoted by Mr. K P Arunachalarajan and Mr. J Thilagam, and
processes and trades in timber. MKVKTSM trades in timber, cement,
asbestos, bamboo, and thermo-mechanically treated bars.
SRI SATYA: CRISIL Reaffirms B+ Rating on INR5.2MM Cash Loan
-----------------------------------------------------------
CRISIL Ratings has been consistently following up with Sri Satya
Bhaskara Poultry Farm (SSBPF) for obtaining information through
letters and emails dated July 11, 2017 and August 17,2017 among
others, apart from telephonic communication. However, the issuer
has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Open Cash Credit 5.2 CRISIL B+/Stable (Issuer Not
Cooperating; Rating
Reaffirmed)
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of Sri Satya Bhaskara Poultry
Farm. This restricts CRISIL's ability to take a forward Sri Satya
Bhaskara Poultry Farm is consistent with 'Scenario 1' outlined in
the 'Framework for Assessing Consistency of Information with
CRISIL BB rating category or lower. Based on the last available
information, CRISIL has reaffirmed the rating at 'CRISIL
B+/Stable'.
Established in 2011 as a partnership firm, Sri Satya Bhaskara
Poultry Farm (SSBPF) is involved in the production of commercial
eggs. The firm has its manufacturing unit in Hyderabad
(Telangana). The firm is promoted by Mr. Sesha Reddy and his wife
Mrs. Snehalatha.
SRI SHANDAR: CRISIL Lowers Rating on INR8.75MM LT Loan to 'D'
-------------------------------------------------------------
CRISIL Ratings has downgraded its ratings on the bank facilities
of Sri Shandar Snacks Private Limited (SSSPL) to 'CRISIL D/CRISIL
D' from 'CRISIL B/Stable/CRISIL A4/Issuer Not Cooperating'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 1.75 CRISIL D (Downgraded from
'CRISIL B/Stable/Issuer Not
Cooperating')
Letter of Credit 1.50 CRISIL D (Downgraded from
'CRISIL B/Stable/Issuer Not
Cooperating')
Long Term Loan 8.75 CRISIL D (Downgraded from
'CRISIL B/Stable/Issuer Not
Cooperating')
The downgrade reflects a recent instance of delay in repayment of
term loan.
The ratings also factor in exposure to intense industry
competition and weak financial risk profile. However, SSSPL
benefits from the extensive experience of its promoters.
Key Rating Drivers & Detailed Description
Weaknesses
* Exposure to intense competition: The ready-to-eat food and
snack industry is highly fragmented because of low entry barriers
on account of low capital requirement. Further, industry is
dominated by large organised players like Green Dot Health Foods
Ltd, Haldiram Manufacturing Co Pvt Ltd, TTK Healthcare Ltd, ITC
Ltd, PepsiCo India Ltd, and Balaji Wafers Pvt Ltd having pan-
India presence. This has resulted in modest operating income of
INR7.9 crores in fiscal 2017. SSSPL is expected to remain exposed
to intense competition over the medium term.
* Weak financial risk profile: Financial risk profile is driven
by modest net worth (INR0.12 cores as on March 31, 2017), high
leverage (total outside liabilities to adjusted net worth ratio
of 131.76 times as on March 31, 2017) and modest debt protection
metrics (interest coverage and net cash accrual to total debt
ratios of 1.2 times and 0.02 time, respectively, for fiscal
2017).
Strength
* Promoters' extensive experience in the processed foods
industry: SSSPL's key promoters, Mr. Kamal Agarwal and Mr.
Banwarilal Agarwal, have over a decade of industry experience in
the processed foods industry which has helped the promoters to
establish a strong relationship with customers and suppliers.
Incorporated in May 2013, SSSPL manufactures ready-to-eat nachos
in six different flavours and sells 100 percent of its produce,
under the brand name 'Tastilo'. SSSPL has set-up a manufacturing
facility at Kashipur, Uttarakhand.
SUNPOWER CEMENT: CRISIL Downgrades Rating on INR6MM Loan to D
-------------------------------------------------------------
CRISIL Ratings has downgraded its ratings on bank facilities of
Sunpower Cement Company Pvt Ltd (SCCPL) to 'CRISIL D/CRISIL D'
from 'CRISIL B/Stable/CRISIL A4.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 5 CRISIL D (Downgraded from
'CRISIL B/Stable')
Cash Term Loan 6 CRISIL D (Downgraded from
'CRISIL B/Stable')
Letter of credit & 1 CRISIL D (Downgraded from
Bank Guarantee 'CRISIL B/Stable')
The downgrade ratings reflect the delay in servicing of debt,
caused by weak liquidity. SCCPL has a modest scale and working
capital intensive operations. The company continues to derive
benefits from the extensive experience of its promoter.
Key Rating Drivers & Detailed Description
Weakness
* Over-utilisation of working capital limit: Operations are
working capital intensive, due to stretch in receivables, which
led to stretch in liquidity. As a result, the working capital
limit was over-utilised consistently for more than 30 days.
* Modest scale of operations: Turnover of INR41 crore in fiscal
2017, indicates the modest scale of operations, amidst stiff
competition from several players in the Portland Pozzolana Cement
(PPC) segment.
Strengths
* Extensive experience of the promoter- The extensive experience
of the promoter, Mr. Shameer Dawood, his strong understanding of
the cement industry, through past association with several large
companies, and established supplier network, (ensuring
uninterrupted supply of ordinary Portland cement clinker, a key
raw material), will continue to support the business risk
profile.
SCCPL was set up by the promoter, Mr. Shameer Dawood in 2005. The
Kerala-based company manufactures PPC in its own and leased
facilities.
SURYODAY COTEX: CRISIL Lowers Rating on INR4MM Cash Loan to D
-------------------------------------------------------------
CRISIL Ratings has downgraded its ratings on the long-term bank
facility of Suryoday Cotex Pvt Ltd (SCPL) to 'CRISIL D' from
'CRISIL B+/Stable'. The ratings reflect the firm's weak liquidity
profile and continuous delay in servicing of debt.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 4 CRISIL D (Downgraded from
'CRISIL B+/Stable')
Proposed Long Term 3.12 CRISIL D (Downgraded from
Bank Loan Facility 'CRISIL B+/Stable')
Term Loan .88 CRISIL D (Downgraded from
'CRISIL B+/Stable')
Key Rating Drivers & Detailed Description
Weakness
* Susceptibility to volatility in raw material prices:
Fluctuation in cotton prices led to losses post March 2017. The
resultant widening of gap between the cash accrual and maturing
debt, led to a delay in fulfilling the obligation.
* Weak financial risk profile: Financial risk profile remains
constrained by the low networth vis-a-vis the scale of
operations, and weak debt protection metrics.
Strength
* Extensive experience of the promoters: The decade-long
experience of the promoter, in the textile industry, and
established relationships with customers and suppliers, will
continue to support the business risk profile.
SCPL, which was set up in 2013, trades in raw cotton in Rajkot
(Gujarat). The key promoter, Mr. Jaideep Gida has been engaged in
the cotton business for close to a decade, through the group
company, Suryoday Enterprise.
SVM NONWOVENS: CRISIL Lowers Rating on INR8.6MM LT Loan to 'D'
--------------------------------------------------------------
CRISIL Ratings has downgraded its ratings on the bank facilities
of SVM Nonwovens Private Limited (SVM) to 'CRISIL D/CRISIL D'
from 'CRISIL B-/Stable/CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 0.5 CRISIL D (Downgraded from
'CRISIL A4')
Cash Credit 1.5 CRISIL D (Downgraded from
'CRISIL B-/Stable')
Letter of Credit 1 CRISIL D (Downgraded from
'CRISIL A4')
Long Term Loan 8.6 CRISIL D (Downgraded from
'CRISIL B-/Stable')
Proposed Fund-Based 3.4 CRISIL D (Downgraded from
Bank Limits 'CRISIL B-/Stable')
The downgrade in the ratings reflect instances of delay in
servicing debt; the delays were owing to weak liquidity.
The rating also reflects weak financial risk profile with high
gearing, low net worth and weak debt protection metrics. Rating
also factors in modest scale of operations and Operating margin
susceptible to raw material price fluctuations. Above mentioned
weaknesses are partially offset by extensive industry experience
of its promoters and its established customer relationships.
Key Rating Drivers & Detailed Description
Weakness
* Delay in debt servicing: SVM has been delaying in the repayment
of the term loan owing to stretched liquidity.
* Weak Financial Risk Profile: Financial risk profile is weak
marked by high gearing, low net worth and weak debt protection
metrics.
Net worth was negative owing to accumulated losses as on March 31
2017 resulting in high gearing. Debt protection metrics was weak
as reflected in interest coverage ratio and net cash accruals to
adjusted debt of around 0.94 times and 3% for the Fiscal 2017.
* Modest scale of operations: SVM had modest scale of operations,
reflected in its limited production capacity, which has
restricted its top line. It achieved revenue of around INR6.7
crore in 2016-17. The company's small scale of operations limits
company's ability to take advantages associated with the
economies of scales that other big players in the industry are
able to leverage upon.
* Operating margin susceptible to raw material price
fluctuations: SVM's operating margin is susceptible to volatility
in the prices of its key raw material, polypropylene (PP), which
contributes to over 90 per cent of its raw material cost.
Moreover PP's prices are highly volatile since it is a derivative
of crude oil. Further, the company maintains raw material
inventory of around three months which increases inventory risk
for the company.
CRISIL believes that SVM's operating margin will be impacted,
over the medium term by any sharp fluctuations in PP's prices.
Strengths
* Promoter's extensive industry experience: SVM benefits from its
promoters' extensive industry experience. The promoters have
nearly three decades of experience in the nonwoven industry. Mr.
P V Rao, SVMPL's managing director, has strong industry
experience. Over the years, the company has focused strongly on
research and development, and has continuously evolved its
products to meet increasing customer requirements. Further, over
the years, they have developed healthy relationships with various
customers and suppliers supporting the business risk profile of
the company.
Established in 1998, SVM is engaged in manufacturing of nonwoven
fabric. The company manufactures nonwoven filter cloths and
geotextiles. The company is promoted by Mr. P.V.Rao and Mrs. P.
Maruti. The day to operations of the company are managed by Mr.
Shiva Kumar.
SVM reported a profit after tax of INR(0.63) crore on revenue of
INR6.74 crore in fiscal 2017, against INR0.13 crore on revenue of
INR9.91 crore in fiscal 2016.
SWAGAT ABHARAN: CRISIL Reaffirms B+ Rating on INR13MM Cash Loan
---------------------------------------------------------------
CRISIL Ratings has been consistently following up with Swagat
Abharan Private Limited (SAPL) for obtaining information through
letters and emails dated July 13, 2017 and August 8, 2017 among
others, apart from telephonic communication. However, the issuer
has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 13 CRISIL B+/Stable (Issuer Not
Cooperating; Rating
Reaffirmed)
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of Swagat Abharan Private
Limited. This restricts CRISIL's ability to take a forward Swagat
Abharan Private Limited is consistent with 'Scenario 1' outlined
in the 'Framework for Assessing Consistency of Information with
CRISIL BB rating category or lower. Based on the last available
information, CRISIL has reaffirmed the rating at 'CRISIL
B+/Stable'.
SAPL was incorporated in 2008 in Bengaluru. The company
manufactures and trades in gold, silver and diamond jewellery.
SAPL is promoted by Mr. Santosh Vernekar, Mr. Dileep Vernekar,
Mr.Vinod Vernekar and Mr.Rajesh Vernekar and their family
members. The promoters have been engaged in the sale of gold and
silver jewellery for the past 65 years, through their firm,
Swagat Jewellers. SAPL began selling silk sarees in 2013-14.
SWAROOP AGRO: CRISIL Reaffirms B+ Rating on INR6MM Term Loan
------------------------------------------------------------
CRISIL Ratings has reaffirmed its rating on the bank facilities
of Swaroop Agro Products Private Limited (SAPPL) at 'CRISIL
B+/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 5 CRISIL B+/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility 1.3 CRISIL B+/Stable (Reaffirmed)
Term Loan 6 CRISIL B+/Stable (Reaffirmed)
The rating continues to reflect modest scale of operations and
susceptibility to fluctuations in raw material prices and adverse
government regulations. These weaknesses are partially offset by
the extensive experience of the promoters in the industry.
Key Rating Drivers & Detailed Description
Weaknesses
* Modest scale of operations: Commercial production started only
in September 2017 and revenue of INR13 crore is expected in
fiscal 2018. Due to the start-up nature of operations and intense
competition, revenue is likely to remain modest over the medium
term.
* Exposure to adverse government regulations and volatility in
raw material prices: Business is exposed to various risks related
to the availability of raw materials, regulatory changes and
pricing pressures. The availability of inputs such as rice bran
flakes is ultimately linked to paddy production, which, in turn,
is exposed to various factors such as the monsoon, climatic
conditions, acreage and yield level. Furthermore, the selling
price of edible oil is governed by international price trends and
various government regulations such as import duties. Business
profile and profitability will continue to be constrained because
of presence in agro-based activities and volatility in raw
material prices.
Strength
* Extensive experience of the promoters: Benefits from the
promoters' experience not only in other oil extraction firms, but
also as a carrying and forwarding (C&F) agent should support
business. Promoters operated as a C&F agent for Kanpur-based
Swarnima Oil Industries (in 1992) and Mantora Oil Products Pvt
Ltd (1995). They also set up Vaibhav Edibles to extract edible
oil in 2003 and acquired SNG Solvents (P) Ltd, a solvent
extraction plant in 2012.
Outlook: Stable
CRISIL believes SAPPL will continue to benefit from the industry
experience of its promoters. The outlook may be revised to
'Positive' if early stabilisation of operations lead to healthy
cash accrual and strengthen financial risk profile. The outlook
may be revised to 'Negative' if low operating margin or sizeable
debt-funded capital expenditure or stretch in working capital
cycle weakens financial risk profile.
SAPPL, incorporated in 2015, has recently set up an edible oil
extraction plant with capacity of 350 tonne per day. The company
is promoted by Mr. Satyendra Gupta and Ms Indra Gupta and the
plant is set up in village Umran (Akbarpur), Uttar Pradesh. The
commercial operations of the company started in February, 2017.
TOUCH TONE: Ind-Ra Migrates BB- Issuer Rating to Non-Cooperating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Touch Tone
Teleservices' 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:
-- INR60 mil. Fund-based working capital facilities migrated to
non-cooperating category with IND BB-(ISSUER NOT COOPERATING)
rating; and
-- INR60 mil. Non-fund-based working capital facilities migrated
to non-cooperating category with IND A4+(ISSUER NOT
COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
Sept. 30, 2016. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Set up in 2002, Touch Tone Teleservices is engaged in the laying
and maintenance of telecommunication lines. It also undertakes
civil construction work in relation to the telecom lines that it
lays down.
TOUCHSTONE PRIVATE: CRISIL Reaffirms B+ Rating on INR3.2MM Loan
---------------------------------------------------------------
CRISIL Ratings has been consistently following up with Touchstone
Private Limited (TPL) for obtaining information through letters
and emails dated July 11, 2017 and August 10, 2017 among others,
apart from telephonic communication. However, the issuer has
remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 3.2 CRISIL B+/Stable (Issuer Not
Cooperating; Rating
Reaffirmed)
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of Touchstone Private Limited.
This restricts CRISIL's ability to take a forward Touchstone
Private Limited is consistent with 'Scenario 1' outlined in the
'Framework for Assessing Consistency of Information with CRISIL
BB rating category or lower. Based on the last available
information, CRISIL has reaffirmed the rating at 'CRISIL
B+/Stable'.
Set up as a proprietorship firm in 2006 by Mr. Sanjeev Kumar, TPL
was reconstituted as a partnership firm in 2009, and incorporated
as a private limited company in July 2014. In fiscal 2015, TPL
took over the operations of Touchstone (partnership firm). TPL is
headquartered in Patna and undertakes construction activities,
such as setting up of telecom towers, water pumping systems,
canal works, and water harvesting systems; the company also
supplies construction material.
VARUN INDUSTRIES: CRISIL Lowers Rating on INR6MM Cash Loan to B+
----------------------------------------------------------------
CRISIL Ratings has downgraded its rating on the long-term bank
facilities of Varun Industries - Bikaner (VI) to 'CRISIL
B+/Stable' from 'CRISIL BB-/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 6 CRISIL B+/Stable (Downgraded
from 'CRISIL BB-/Stable')
Proposed Long Term
Bank Loan Facility .67 CRISIL B+/Stable (Downgraded
from 'CRISIL BB-/Stable')
Term Loan .33 CRISIL B+/Stable (Downgraded
from 'CRISIL BB-/Stable')
The downgrade reflects deterioration in the firm's business and
financial risk profiles in fiscal 2017. Although revenue doubled
in fiscal 2017, operating margin declined to 4.4% from 6.5% in
fiscal 2016, mainly due to increase in raw wool prices and higher
trading sales. Moreover, gross current assets increased to 200
days as on March 31, 2017, from 135 days a year earlier.
Consequently, financial risk profile deteriorated because of
increase in gearing to 6.91 times as on March 31, 2017, from 2.85
times a year ago. Liquidity is stretched driven by lower-than-
expected cash accrual due to decline in operating margin and
higher interest costs.
The rating reflects the firm's modest scale of operations and
large working capital requirement, weak financial risk profile,
and susceptibility of profitability to raw material price
volatility. These weaknesses are partially offset by the
extensive experience of the partners in the agricultural
commodity trading business.
Key Rating Drivers & Detailed Description
Weakness
* Modest scale of operations and large working capital
requirement: The modest scale is reflected in revenue of INR79.06
crore in fiscal 2017. Gross current assets were at 200 days, due
to sizeable receivables of 95 days, as on March 31, 2017.
* Weak financial risk profile: Networth was small at INR5.15
crore and gearing high at 6.91 times as on March 31, 2017. Debt
protection metrics were subdued, with interest coverage and net
cash accrual to total debt ratios of 1.65 times and 0.04 time,
respectively, in fiscal 2017. Because of working capital debt,
the financial risk profile will remain weak over the medium term.
* Susceptibility of operating margin to raw material price
volatility: The key raw material for woollen yarn is raw wool,
the price of which is volatile. To execute orders in time, the
firm maintains raw material inventory of around two months at any
given point of time. Any decline in wool prices, and hence in the
price of the firm's products, can impact profitability.
Strength
* Extensive industry experience of the partners: The partners,
Mr. Varun Mundra and Mr. Navneet Mundhra, had been trading
commodities, including woollen yarn and peanuts, for about two
decades, before setting up VI. Over the years, the partners have
established strong relationships with customers and suppliers,
which helped in steady increase in revenue to INR79 crore in
fiscal 2017 from INR22 crore in fiscal 2014.
Outlook: Stable
CRISIL believes VI will continue to benefit from the extensive
industry experience of its partners. The outlook may be revised
to 'Positive' if significant and sustained increase in revenue
and cash accrual leads to a better financial risk profile. The
outlook may be revised to 'Negative' if lower-than-expected cash
accrual; unanticipated, aggressive debt-funded capital
expenditure; or a stretched working capital cycle leads to
deterioration in the financial risk profile.
VI, which started operations in 2004, is a partnership firm of
Mr. Varun Mundhra and Mr. Navneet Mundhra. The firm, based in
Bikaner, manufactures woollen yarn and processes peanuts.
Operations are managed by the partners. It has installed capacity
of about 80 tonne per day for processing peanuts and about 1200
tonne per annum for manufacturing woollen yarn.
In fiscal 2017, profit after tax (PAT) was INR37 lakh on total
sales of INR79.06 crore, as against PAT of INR35 lakh on total
sales of INR33.26 crore in fiscal 2016.
ZAMIN NATURAL: CRISIL Assigns D Rating to INR11.85MM Term Loan
--------------------------------------------------------------
CRISIL Ratings has assigned its 'CRISIL D' rating to the long-
term facilities of Zamin Natural Resources Private Limited
(ZNRPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 11.85 CRISIL D (Assigned)
Cash Credit 6.90 CRISIL D (Assigned)
Proposed Long Term
Bank Loan Facility .15 CRISIL D (Assigned)
The rating reflects the delays in servicing interest on term
loans by ZNRPL on account of late commencement of operations
resulting in no cash flows to service interest obligations.
The rating also factors in the company's expected weak financial
risk profile because of debt-funded project. This weakness is
partially offset by the extensive experience of its promoters in
the ceramic industry.
Analytical Approach
Unsecured loans from promoters of INR6 crore as on March 31, 2017
have been treated as neither debt nor equity as they are
subordinated to bank debt and are likely to remain in business.
Key Rating Drivers & Detailed Description
Weaknesses
* Delays in servicing interest obligation: The company has
delayed interest payments on its term debt by 15- 30 days, on
account of no cash flows from business due to delayed
commencement of operations. The operations, expected to start in
May 2017, commenced in September 2017.
* Expected weak financial risk profile: The project is being
funded through a term loan of INR11.85 crore and promoters'
contribution of INR10 crore (including unsecured loans of INR6
crore). Since operations have started in September 2017 financial
risk profile may be below-average.
Strength
* Extensive experience of the promoters: Benefits from the
promoters' two decade-long experience in the industry and their
understanding of sourcing and demand patterns of feldspar (a key
raw material used in the ceramic industry) should support
business.
Incorporated in 2015, ZNRPL has set up facilities to manufacture
100% pure floated feldspar powder. It is promoted by Mr. Shailesh
Ajmera and Mr. Vipul Patel. Operations have started in September
2017.
=========
J A P A N
=========
TAKATA CORP: Ford, Mazda Bids to Delay Recall Decision Denied
-------------------------------------------------------------
The Associated Press reports that the U.S. government has denied
requests from Ford and Mazda for more time to test potentially
dangerous Takata air bag inflators as the companies try to avoid
massive recalls.
Both automakers petitioned safety regulators to escape recalls,
which involve about 3 million vehicles made by Ford and 6,000 by
Mazda, the AP says.
Last year, the National Highway Traffic Safety Administration
delayed a recall of 2.5 million General Motors trucks and SUVs to
give the company time for long-term tests of Takata inflators,
the AP recalls. GM contends its inflators are of a different
design and don't have the problems of other inflators. If
successful, the company could fend off several recalls totaling
6.8 million trucks and SUVS that ultimately could cost $870
million, the AP discloses citing a GM filing with securities
regulators.
According to the AP, Takata determined that the Ford and Mazda
driver's front inflators were defective on July 10.
That finding forced Ford and Mazda to file defect reports
covering the 2007-2011 Ford Ranger; the 2006-2012 Ford Fusion,
Lincoln Zephyr and MKZ; the 2006-2011 Mercury Milan; and the
2007-2010 Ford Edge and Lincoln MKX, the AP relates. Also covered
were Mazda B-Series pickups from 2007 through 2009.
The AP relates that Ford and Mazda contend that testing by Takata
didn't show problems with their inflators. They also asked
regulators not to rule on their petitions until March 31 so Ford
can do more tests, the report says.
NHTSA said in documents posted November 16 that the request for a
delay isn't reasonable or supported by current testing. That
means it will rule on the recalls without the additional tests,
according to the AP.
The agency will accept public comment on the Ford and Mazda
petitions for another month, the AP notes.
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
Chapter 11 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.
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. The
Committee has also tapped Chuo Sogo Law Office PC as Japan
counsel.
The Official Committee of Tort Claimants selected Pachulski Stang
Ziehl & Jones LLP as counsel. Gilbert LLP will evaluate of the
insurance policies. Sakura Kyodo Law Offices will serve as
special counsel.
Roger Frankel, the legal representative for future personal
injury claimants of TK Holdings Inc., et al., tapped Frankel
Wyron LLP and Ashby & Geddes PA to serve as co-counsel.
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.
===============
M A L A Y S I A
===============
NEXGRAM HOLDINGS: Unit Served With 10 Claims Totalling MYR2.83MM
----------------------------------------------------------------
The Sun Daily reports that Nexgram Holdings Bhd's 70%-owned
subsidiary Blue Hill Development Sdn Bhd (BHD) has been served
with 10 writ of summons and statement of claims for a total of
MYR2.83 million.
In a filing with Bursa Malaysia, Nexgram said all the plaintiffs
are claiming for the long outstanding debts in respect of the
cause of action including non-payment of building/construction
materials sold and delivered, non-payment for leasing of
plastering machinery and breach of credit guarantee, the Sun
Daily relates.
The 10 plaintiffs are AYS Marketing Sdn Bhd, San Lee Engineering
Trading Sdn Bhd, Steel Park Malaysia Sdn Bhd, Sadagene Steel Sdn
Bhd, Hume Marketing Co Sdn Bhd, Posim Marketing Sdn Bhd, CMCM
Perniagaan Sdn Bhd, KT Potential Sdn Bhd, Jakar Jaya Hardware Sdn
Bhd and BRC Prefab Holdings Sdn Bhd, the report discloses.
The writs date as far back as Nov. 1, 2016, the report notes.
According to the report, Nexgram said it did not make any
announcement before because individually, the writ of summons and
statement of claim is below the materiality threshold of Nexgram
in respect of its obligation to make immediate disclosure.
The Sun Daily notes that BHD had obtained a restraining order
from the Court of Appeal dated Aug. 29, 2017 for a meeting of the
creditors of BHD to be convened within three months from the date
of the order, with liberty to apply to the High Court to seek
further extension of time).
The meeting is to consider and if thought fit, approve a scheme
of arrangement to be proposed between BHD and its creditors, the
report relates.
In addition, its wholly-owned subsidiary Nexgram Land Sdn Bhd
(NLand) had on Aug. 21, 2017 filed counter-claims against
Spacious Glory Sdn Bhd, the vendor of the shares in BHD purchased
by NLand, the report adds.
According to the Sun Daily, NLand is claiming that the writs
clearly prove a fundamental breach on the part of the vendor
against the due diligence confirmation provided by the vendor at
the conclusion of the due diligence exercise conducted by NLand
prior to the acquisition of the shares.
The proceeding of the counter-claim is currently an on-going
matter in court, the report states. The estimated potential
liability to the Nexgram Group arising from the abovementioned
litigation would be MYR2.83 million, the report discloses.
Nexgram said BHD is not a major subsidiary, and the writs and
statement of claims are not expected to have any material
financial and operational impact on Nexgram Group as BHD has
recorded and accounted for the judgement sum in their balance
sheet, adds the Sun Daily.
====================
N E W Z E A L A N D
====================
RESIMAC VERSAILLES 2017-1: S&P Rates Class E Notes 'BB (sf)'
------------------------------------------------------------
S&P Global Ratings assigned ratings to six classes of prime and
nonconforming residential mortgage-backed securities (RMBS)
issued by The New Zealand Guardian Trust Co. Ltd. as trustee of
the RESIMAC Versailles Trust - RESIMAC Versailles Trust Series
2017-1 (see list).
The ratings reflect:
-- S&P's view of the credit risk of the underlying collateral
portfolio, including the fact that this is a closed
portfolio, which means no further loans will be assigned to
the trust after the closing date.
-- S&P' view that the credit support is sufficient to withstand
the stresses we apply. This credit support comprises note
subordination, lenders' mortgage insurance on 6.6% of the
portfolio and excess spread (if any).
-- S&P's expectation that the various mechanisms to support
liquidity within the transaction, including an amortizing
liquidity facility equal to 0.75% of the initial aggregate
amount of the notes, principal draws and a excess spread
reserve are sufficient under our stress assumptions to ensure
timely payment of interest on the rated notes.
-- The extraordinary expense reserve of NZ$150,000, funded at
transaction close and available to meet extraordinary
expenses. The reserve will be topped up via excess spread if
drawn.
-- The benefit of a fixed-to-floating interest-rate swap to be
provided by Westpac Banking Corp. and Bank of New Zealand to
hedge the mismatch between receipts from fixed-rate mortgage
loans and the variable-rate RMBS.
A copy of S&P Global Ratings' complete report for RESIMAC
Versailles Trust - RESIMAC Versailles Trust Series 2017-1 can be
found on RatingsDirect, S&P Global Ratings ' Web-based credit
analysis system, at http://www.capitaliq.com.
RATINGS ASSIGNED
Class Rating Amount (mil. NZ$)
A1 AAA (sf) 175.000
A2 AAA (sf) 46.875
B AA (sf) 8.250
C A (sf) 7.500
D BBB (sf) 5.250
E BB (sf) 3.250
F NR 3.875
NR--Not rated.
=================
S I N G A P O R E
=================
SWIBER HOLDINGS: Unit in Finland Placed Into Bankruptcy
-------------------------------------------------------
Reuters reports that Swiber Holdings Ltd Bitachon Offshore
Contractor Oy has been placed into bankruptcy on November 16 by
District Court of Helsinki. Robert Peldan has been appointed as
administrator, Reuters discloses.
Swiber Holdings Limited (SGX:BGK) -- http://www.swiber.com/-- is
a Singapore-based investment holding company. The Company,
through its subsidiaries, is engaged in offshore marine
engineering; vessel owning and chartering, and provision of
corporate services. The Company is an integrated offshore
construction and support services provider for shallow water oil
and gas field development. It offers a range of engineering,
procurement, installation and construction (EPIC) services,
complemented by its in-house marine support and engineering
capabilities, to support the offshore field development and
production activities of its clientele base across the Asia
Pacific, Middle East, Latin America and West Africa regions. It
operates approximately 10 construction vessels. The Company's
subsidiaries include Swiber Offshore Construction Pte. Ltd.,
Swiber Offshore Marine Pte. Ltd., Swiber Corporate Pte. Ltd.,
Resolute Offshore Pte. Ltd. and Swiber Capital Pte. Ltd.
As reported in the Troubled Company Reporter-Asia Pacific on
Aug. 2, 2016, Reuters said Swiber Holdings Ltd has applied to
place itself under judicial management instead of liquidation.
According to Reuters, Swiber shocked markets in July 2016 by
filing for liquidation, as it faced hundreds of millions of
dollars in debt and a decline in orders, becoming the largest
local company to fall victim to the slump in oil prices.
Bob Yap Cheng Ghee, Tay Puay Cheng and Ong Pang Thye of KPMG
Services Pte Ltd. have been appointed as the joint and several
interim judicial managers of Swiber Holdings Limited and Swiber
Offshore Construction.
Swiber had $1.43 billion of liabilities and $1.99 billion of
assets on March 31, 2016, before it sought court protection in
late July, Bloomberg News reported citing the company's last
published accounts.
SWIBER HOLDINGS: Granted Extension to Announce Statements and AGM
-----------------------------------------------------------------
Stephanie Luo at The Business Times reports that Swiber Holdings
announced on Nov. 7 that it has been granted approval by the
Singapore Exchange for a later release of its financial
statements and the holding of its annual general meeting.
According to the report, the beleaguered offshore and marine
group first announced in October that it had applied to the local
bourse, among other things, for a further extension of time of 13
months, up to Nov. 30, 2018 (being one month after the judicial
management order or JMO expiry date), to announce the Q2 2016, Q3
2016, FY 2016, Q1 2017 and Q2 2017 financial results.
It also asked for a further extension of time of 13 months, up to
Dec. 31, 2018 (being two months after the JMO expiry date), to
hold the 2017 AGM, and an extension of time of eight months, up
to Dec. 31, 2018, to hold the annual general meeting of the
company for FY 2017, BT relates.
Swiber's shares have been suspended from trading since July 27
last year, the report notes.
About Swiber Holdings
Swiber Holdings Limited (SGX:BGK) -- http://www.swiber.com/-- is
a Singapore-based investment holding company. The Company,
through its subsidiaries, is engaged in offshore marine
engineering; vessel owning and chartering, and provision of
corporate services. The Company is an integrated offshore
construction and support services provider for shallow water oil
and gas field development. It offers a range of engineering,
procurement, installation and construction (EPIC) services,
complemented by its in-house marine support and engineering
capabilities, to support the offshore field development and
production activities of its clientele base across the Asia
Pacific, Middle East, Latin America and West Africa regions. It
operates approximately 10 construction vessels. The Company's
subsidiaries include Swiber Offshore Construction Pte. Ltd.,
Swiber Offshore Marine Pte. Ltd., Swiber Corporate Pte. Ltd.,
Resolute Offshore Pte. Ltd. and Swiber Capital Pte. Ltd.
As reported in the Troubled Company Reporter-Asia Pacific on
Aug. 2, 2016, Reuters said Swiber Holdings Ltd has applied to
place itself under judicial management instead of liquidation.
According to Reuters, Swiber shocked markets in July 2016 by
filing for liquidation, as it faced hundreds of millions of
dollars in debt and a decline in orders, becoming the largest
local company to fall victim to the slump in oil prices.
Bob Yap Cheng Ghee, Tay Puay Cheng and Ong Pang Thye of KPMG
Services Pte Ltd. have been appointed as the joint and several
interim judicial managers of Swiber Holdings Limited and Swiber
Offshore Construction.
Swiber had $1.43 billion of liabilities and $1.99 billion of
assets on March 31, 2016, before it sought court protection in
late July, Bloomberg News reported citing the company's last
published accounts.
====================
S O U T H K O R E A
====================
DAEWOO ENGINEERING: 4 Bidders Shortlisted for Controlling Shares
----------------------------------------------------------------
Yonhap News Agency reports that about four bidders have been
shortlisted to buy the controlling stake in Daewoo Engineering &
Construction Co. from the state-run Korea Development Bank (KDB),
an industry source said on November 17.
Among the shortlisted bidders is Hoban Construction Co., a local
construction firm, the source said on condition of anonymity,
Yonhap discloses.
The shortlisted bidders will begin due diligence on Daewoo
Engineering starting this week week, according to the source.
The 50.75 percent stake in Daewoo Engineering is valued at
KRW1.5 trillion (US$1.34 billion) and is held by a private equity
fund controlled by KDB, Yonhap notes.
KDB plans to pick a preferred bidder early next year and complete
the deal by July, according to Yonhap.
The state lender, a key creditor of Kumho Asiana Group, purchased
the stake in Daewoo Engineering in 2010 to help its debt-ridden
parent group restructure its finances, Yonhap notes.
Kumho Asiana's two subsidiaries -- Kumho Tire and Kumho
Industrial -- have been under a debt restructuring program since
early 2010 due to a severe cash crunch sparked by the group's
purchase of Daewoo Engineering in 2006, the report adds.
Headquartered in Seoul, South Korea, Daewoo Engineering &
Construction Co. -- http://www.daewooenc.com/-- has become a
world leader in civil engineering, housing construction, power
and industrial plant development, architectural services, and
construction of liquid natural gas facilities. In addition to
large-scale domestic projects, Daewoo has more recently built
gas plants in Nigeria, a hospital in Libya, and the Trump World
Tower in New York, to name a few.
*********
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.
Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez,
Julie Anne L. Toledo, Ivy B. Magdadaro and Peter A. Chapman,
Editors.
Copyright 2017. All rights reserved. ISSN: 1520-9482.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding,
electronic re-mailing and photocopying) is strictly prohibited
without prior written permission of the publishers.
Information contained herein is obtained from sources believed
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TCR-AP subscription rate is US$775 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance
thereof are US$25 each. For subscription information, contact
Peter Chapman at 215-945-7000 or Joseph Cardillo at 856-381-8268.
*** End of Transmission ***