/raid1/www/Hosts/bankrupt/TCRAP_Public/180119.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
Friday, January 19, 2018, Vol. 21, No. 014
Headlines
A U S T R A L I A
ACQUIRE LEARNING: Second Creditors' Meeting Set for Jan. 29
ASPEN UNITED: Second Creditors' Meeting Set for Jan. 24
E.B.M. MANAGEMENT: First Creditors' Meeting Set for Jan. 29
ISOBOARD PTY: Second Creditors' Meeting Set for Jan. 30
STHZ PTY: First Creditors' Meeting Set for Jan. 25
WESTERN CONSTRUCTION: First Creditors' Meeting Set for Jan. 29
C H I N A
CIFI HOLDINGS: Moody's Assigns B1 Rating to New Sr. Unsec. Notes
FOSUN INT'L: Moody's Ups CFR to Ba2 on Improved Business Profile
SI CHUAN: Fitch Assigns B Rating to Proposed USD Unsec. Notes
SI CHUAN: Moody's Assigns B3 Rating to New Sr. Unsecured Notes
H O N G K O N G
GCL NEW ENERGY: S&P Assigns BB- Corporate Credit Rating
I N D I A
ABC SITES: CRISIL Assigns B+ Rating to INR25MM Term Loan
BDA HEALTHCARE: ICRA Reaffirms B Rating on INR16.50cr Loan
BETA HEALTHCARE: CRISIL Assigns B Rating to INR3.85MM Demand Loan
CORE GREEN: ICRA Lowers Rating on INR284.71cr Loan to D
DEETYA PROJECTS: Ind-Ra Migrates 'BB-' Rating to Not Cooperating
ERODE AMARNATH: CRISIL Assigns B Rating to INR4.30MM LT Loan
ESSAR STEEL: Ruia Family May Have Found a Way to Bid
GADDALA FINANCIAL: CRISIL Assigns B Rating to INR6MM LT Loan
GAJANAN UTTAMRAO: CRISIL Withdraws C Rating on INR10MM LT Loan
GEETASHREE PULSES: Ind-Ra Upgrades Issuer Rating to 'B+'
JAIN IRRIGATION: Fitch Affirms B+ IDR; Outlook Positive
JALDHAKA COLD: CRISIL Reaffirms B Rating on INR7.14MM Loan
JOSHI COTEX: CRISIL Reaffirms B+ Rating on INR6MM Cash Loan
KITCHEN FOODS: CRISIL Reaffirms B+ Rating on INR9MM Cash Loan
KRIPTON GRANITO: CRISIL Reaffirms B+ Rating on INR20MM Term Loan
M G F MOTORS: CRISIL Raises Rating on INR31.5MM Loan to B
MAHASHAKTI POLYCOAT: ICRA Moves B Rating to Not Cooperating
NANIBALA COLD: CRISIL Reaffirms B+ Rating on INR10.5MM Loan
PASHUPATI COTTON: ICRA Withdraws B Rating on INR19.5cr Loan
PRABHU DAYAL: CRISIL Moves B Rating to Not Cooperating Category
PREMIER ALCOBEV: CRISIL Raises Rating on INR51.7MM Loan to B+
RNB INTERNATIONAL: ICRA Moves B Rating to Not Cooperating
S. M. TELEDIRECT: CRISIL Assigns B+ Rating to INR15MM Loan
SAJEESH K: CRISIL Lowers Rating on INR7MM Cash Loan to D
SHIMERA PROJECT: CRISIL Withdraws B- Rating on INR2.90MM Loan
SHRI LAKSHMI: Ind-Ra Upgrades Issuer Rating to 'B'/Stable'
SLC PROJECTS: CRISIL Moves B- Rating to Not Cooperating Category
SRI NOMULA: CRISIL Reaffirms B Rating on INR7MM Cash Loan
SRI SATHYA: CRISIL Reaffirms B Rating on INR3MM Cash Loan
SSPDL LIMITED: Ind-Ra Affirms 'BB' Issuer Rating, Outlook Stable
STAYWELL FORMULATION: CRISIL Assigns D Rating to INR7MM Loan
SWASHRYEE MAHILA: ICRA Withdraws B+ Rating on INR10cr Loan
SWIM CERAMIC: CRISIL Moves B+ Rating to Not Cooperating Category
VFIVE HOMES: CRISIL Moves B Rating to Not Cooperating Category
VGN HOMES: CRISIL Lowers Rating on INR146MM LT Loan to D
VINDHYA CEREALS: CRISIL Cuts Rating on INR32MM Cash Loan to D
VISION PARENTERAL: CRISIL Assigns B Rating to INR8MM LT Loan
I N D O N E S I A
SAWIT SUMBERMAS: Moody's Assigns B1 Rating to New Unsecured Bonds
J A P A N
TOSHIBA CORP: To Sell Westinghouse Assets to Boost Capital
M A L A Y S I A
AMTEK HOLDINGS: Triggers PN17 After Selling Core Business
MAA GROUP: Gets More Time to Submit Regularisation Plan
S I N G A P O R E
TECHNICS OIL: Judicial Management Extended Until July 15
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A U S T R A L I A
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ACQUIRE LEARNING: Second Creditors' Meeting Set for Jan. 29
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A second meeting of creditors in the proceedings of Acquire
Learning & Careers Pty Ltd has been set for Jan. 29, 2018, at
11:00 a.m. at the Institute of Chartered Accountants, Level 18,
600 Bourke Street, in Melbourne, Victoria.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the
Company be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by Jan. 25, 2018 at 5:00 p.m.
Barry Wight, Bruno Secatore & Sam Kaso of Cor Cordis Chartered
Accountants were appointed as administrators of Acquire Learning
on May 12, 2017.
ASPEN UNITED: Second Creditors' Meeting Set for Jan. 24
-------------------------------------------------------
A second meeting of creditors in the proceedings of Aspen United
Pty Ltd has been set for Jan. 24, 2018, at 11:30 a.m. at Level 5,
34 Queen Street, in Melbourne, Victoria.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the
Company be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by Jan. 23, 2018 at 3:00 p.m.
Trajan John Kukulovski of Chan & Naloy were appointed as
administrators of Aspen United on Dec. 8, 2017.
E.B.M. MANAGEMENT: First Creditors' Meeting Set for Jan. 29
-----------------------------------------------------------
A first meeting of the creditors in the proceedings of E.B.M.
Management Group Pty Ltd, trading as Belair National Park Golf
Course, will be held at the offices of Clifton Hall, Level 3,
431 King William Street, in Adelaide, South Australia, on
Jan. 29, 2018, at 12:00 p.m.
Daniel Lopresti and Timothy James Clifton of Clifton Hall were
appointed as administrators of E.B.M. Management on Jan. 16,
2018.
ISOBOARD PTY: Second Creditors' Meeting Set for Jan. 30
-------------------------------------------------------
A second meeting of creditors in the proceedings of Isoboard Pty
Ltd has been set for Jan. 30, 2018, at 10:30 a.m. at the offices
of BPS Reconstruction and Recovery, Level 5, Suite 6, 350 Collins
Street, in Melbourne.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the
Company be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by Jan. 25, 2018, at 4:30 p.m.
Simon Patrick Nelson of BPS Reconstruction was appointed as
administrator of Isoboard Pty on Dec. 13, 2017.
STHZ PTY: First Creditors' Meeting Set for Jan. 25
--------------------------------------------------
A first meeting of the creditors in the proceedings of STHZ Pty
Ltd will be held at Conference Room, Plaza Level, BGC Centre,
28 The Esplanade, in Perth, WA, on Jan. 25, 2018, at 11:00 a.m.
Dino Travaglini and Jeremy Joseph Nipps of Cor Cordis were
appointed as administrators of STHZ Pty on Jan. 15, 2018.
WESTERN CONSTRUCTION: First Creditors' Meeting Set for Jan. 29
---------------------------------------------------------------
A first meeting of the creditors in the proceedings of Western
Construction Group Pty Ltd will be held at the offices of
Auxilium Partners, Level 2, 949 Wellington Street, in West Perth,
WA, on Jan. 29, 2018, at 2:00 p.m.
Bob Jacobs of Auxilium Partners was appointed as administrator of
Western Construction on Jan. 16, 2018.
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C H I N A
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CIFI HOLDINGS: Moody's Assigns B1 Rating to New Sr. Unsec. Notes
----------------------------------------------------------------
Moody's Investors Service has assigned a B1 senior unsecured
rating to CIFI Holdings (Group) Co. Ltd.'s (Ba3 positive)
proposed USD senior unsecured notes.
The company plans to use the bond proceeds to refinance existing
debt and for general corporate purposes.
The rating outlook is positive.
RATINGS RATIONALE
"The proposed senior unsecured notes will extend CIFI's debt
maturity profile and will not have a material impact on its
credit metrics, as the proceeds will mainly be used to refinance
existing debt," says Stephanie Lau, a Moody's Vice President and
Senior Analyst.
Moody's expects CIFI's credit metrics will remain strong for its
Ba3 corporate family rating even if the proposed USD senior
unsecured notes are issued.
Furthermore, Moody's expects CIFI's credit metrics to improve on
the back of stronger revenue growth in the next 12-18 months,
supported by robust property contracted sales. Its total
contracted sales (including its share in joint ventures) in 2017
totaled RMB104 billion, exceeding its upward revised 2017 target
of around RMB80 billion and representing 96.2% year-on-year
growth.
Moody's expects CIFI's EBIT/interest -- including joint venture
contributions -- will improve to around 3.4x-3.6x in the next 12-
18 months from around 3.0x for the 12 months to June 2017. Its
debt leverage -- as measured by revenue/adjusted debt (including
joint venture contributions) -- should also improve to around
75%-80% from around 70%.
These projections reflect Moody's expectations that the company
will record stronger revenue growth, higher margins as a result
of a growing proportion of high-end products, while maintaining a
prudent expansion strategy.
CIFI's Ba3 corporate family rating reflects its property
development model focused on catering to housing demand from
upgraders in key tier 1 and tier 2 cities in China. Such a focus
helps the company achieve rapid turnover.
The rating also takes into account the company's good liquidity,
prudent land acquisition strategy, and growing diversification.
On the other hand, the rating also reflects its material exposure
to joint ventures, which lowers the transparency of its credit
metrics. However, such risk is mitigated by its strong liquidity
management and reputable joint venture partners.
CIFI's liquidity position is strong as it is managing well its
debt maturity profile. Its cash on hand of RMB25.8 billion covers
well its short-term debt of RMB 6.5 billion as of June 30, 2017.
The B1 rating of CIFI's senior unsecured debt is one notch lower
than its corporate family rating of Ba3, reflecting structural
subordination risks. This risk reflects the fact that the
majority of claims is at the operating subsidiaries, and has
priority over claims at the holding company in a bankruptcy
scenario. In addition, the holding company lacks significant
mitigating factors for structural subordination. As a result, the
expected recovery rate for claims at the holding company will be
lower.
The positive outlook on CIFI's Ba3 corporate family rating and B1
senior unsecured rating reflects Moody's expectation that CIFI's
credit metrics will improve over the next 12-18 months, owing to
its strong sales execution and prudent land acquisition strategy.
CIFI's ratings could be upgraded if the company: (1) sustains
growth in sales and scale and achieves better geographic
diversification; and (2) improves its credit metrics, with
adjusted EBIT/interest above 3.5x-4.0x and revenue/adjusted debt
above 85%-90% on a sustained basis.
On the other hand, the ratings outlook could return to stable if
CIFI's performance and credit metrics fall below Moody's
expectations; in particular, if its: (1) adjusted EBIT/interest
falls below 3.0x; and/or (2) revenue/adjusted debt remains below
80%; and/or (3) liquidity weakens, with its cash holdings
slipping below 1.5x of short-term debt.
The principal methodology used in this rating was Homebuilding
And Property Development Industry published in April 2015.
CIFI Holdings (Group) Co. Ltd. was incorporated in the Cayman
Islands in May 2011 and listed on the Hong Kong Stock Exchange in
November 2012.
CIFI develops residential and commercial properties mainly in the
Yangtze River Delta. It has also expanded to the Pan Bohai Rim,
the Central Western Region and South China Region. At the end of
June 2017, it maintained a presence in 29 key cities, with a
total and attributable land bank of 22.1 million and 12.4 million
square meters respectively. It also had 89 projects under
development.
FOSUN INT'L: Moody's Ups CFR to Ba2 on Improved Business Profile
----------------------------------------------------------------
Moody's Investors Service has upgraded to Ba2 from Ba3 the
corporate family rating of Fosun International Limited.
At the same time, Moody's has changed the outlook on the rating
to stable from positive.
RATINGS RATIONALE
"The upgrade of Fosun's corporate family rating to Ba2 reflects
its improved business profile, which should in turn reduce
volatility in its future performance," says Lina Choi, a Moody's
Vice President and Senior Credit Officer, and also the
International Lead Analyst for Fosun.
Fosun has provided better transparency over its investment
strategy. The company has shifted its focus to more stable and
asset-light businesses, thereby improving its capacity to
withstand cyclical risks. Specifically, the company has focused
on its health (healthcare & pharmaceuticals), happiness (tourism,
leisure & consumer), and insurance.
As of June 30, 2017, the happiness, health, and insurance
segments accounted for 7.2%, 12.9%, and 41.8% of the company's
total assets respectively. These core businesses will continue to
grow and support the company's investment needs.
Moody's notes that the company's portfolio diversification into
the health, happiness, and insurance segments has also increased
its geographic diversification, thereby somewhat reducing its
concentration risk in China (A1 stable).
The upgrade also considers the company's established track record
of managing well its acquired businesses. For example, Fosun
Insurance Portugal has maintained its leading market shares in
Portugal and expanded its international businesses as well as
reported profitable results since being acquired in 2014.
Furthermore, Fosun has demonstrated the ability to recycle its
investments. Moody's estimates that the company completed RMB26.8
billion of new onshore and offshore investments and disposed
RMB27.2 billion of onshore and offshore investments in 2017. This
execution ability is important in containing the company's debt
growth while pursuing business growth to improve its portfolio
quality.
"The upgrade also reflects Moody's expectation that the company
will continue to refinance its debt at the holding company
level," says Kai Hu, a Moody's Senior Vice President and the
Local Market Analyst for Fosun.
Specifically, Moody's expects the company will continue to (1)
raise funding by recycling investments; (2) increase dividend
income from the investment portfolio; (3) hold a fair amount of
marketable securities; (4) reduce its reliance on short term
funding; and (5) maintain debt leverage at the holding company,
measured by market value leverage, at around 30%-35% over the
next two years. Moody's estimates that Fosun held RMB16 billion
of cash and RMB45 billion of marketable securities (excluding its
stakes in core investments) compared with short-term debt of
RMB35 billion at the holding company level at the end of 2017.
Fosun's Ba2 corporate family rating reflects its (1) large and
diversified investment portfolio; (2) proven investment track
record; and (3) management's commitment to improve the company's
financial profile.
However, the rating is constrained by the company's (1) moderate
credit contagion risk from investees; (2) complicated
organizational structure; and (3) weak interest coverage at the
holding company level.
Fosun has weak (FFO + interest)/interest coverage at the holding
company level, as its recurring dividends and interest income are
insufficient to cover its recurring operating expenses and
interest payments. Such weakness is partially mitigated by its
holdings of large amounts of marketable securities, cash as well
as active asset disposals.
Moody's assesses credit contagion risk from Fosun's investees as
moderate because such risk is mitigated by its highly diversified
investment portfolio, its flexibility to dispose of
underperforming assets, and its internal policy to limit intra-
company guarantee and loans.
The stable outlook reflects Moody's expectation that Fosun will
(1) pursue its stated business strategies; (2) refrain from
aggressive debt-funded acquisitions; and (3) actively manage its
investments and asset disposals and access to capital so as to
keep refinancing risk under control.
Upward rating pressure could emerge if Fosun improves: (1) its
business profile with more stable quality core businesses; (2)
dividends and interest income/interest and operating expenses
coverage to above 1.5x at the holding company level; and (3) its
liquidity position.
On the other hand, downward rating pressure could arise if (1)
the company's financial profile deteriorates significantly as a
result of large debt-funded investments; (2) the quality of its
investment portfolio deteriorates and/or contagion risk from its
investees rises; or (3) there is an increased reliance on short
term funding, resulting in higher refinancing risk.
The principal methodology used in these ratings was Investment
Holding Companies and Conglomerates published in December 2015.
Fosun Group was founded in 1992. Fosun International Limited
(Fosun), the holding company (holdco) of Fosun Group, is
headquartered in Shanghai and was listed on the Hong Kong Stock
Exchange in 2007.
Fosun is an investment holding company. The company's principal
businesses are in integrated finance (wealth) and industrial
operations. The estimated market value of Fosun's investment
portfolio totaled around RMB200 billion as of year-end 2016. The
consolidated group's revenue totaled RMB74 billion in 2016. With
its roots in China, and through technology and innovation,
Fosun's mission is to create customer-to-maker (C2M) ecosystems
in health, happiness and wealth, providing high-quality products
and services for families around the world.
SI CHUAN: Fitch Assigns B Rating to Proposed USD Unsec. Notes
-------------------------------------------------------------
Fitch Ratings has assigned Si Chuan Province JuYang Group
Limited's (JuYang, B/Stable) proposed US dollar-denominated
senior unsecured notes an expected rating of 'B(EXP)', with a
Recovery Rating of 'RR4'.
The notes will be issued by JuYang's wholly owned subsidiary
Zhong Yi Holdings Limited and unconditionally and irrevocably
guaranteed by JuYang.
The proposed notes are rated at the same level as JuYang's senior
unsecured rating as they constitute its direct and senior
unsecured obligations. The final rating on the proposed US dollar
notes is contingent upon the receipt of final documentation
conforming to information already received.
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
- Gross margin of 48%-49% in 2017-2018, down from 57% in 2016,
due 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
- Based on the above, Fitch estimates a recovery of 'RR2' for
the proposed US dollar-denominated senior unsecured notes,
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 B3 Rating to New Sr. Unsecured Notes
--------------------------------------------------------------
Moody's Investors Service has assigned a B3 rating to the
proposed senior unsecured notes to be issued by Zhong Yi Holdings
Limited - a wholly owned subsidiary of Si Chuan Province JuYang
Group Limited (Juyang) and unconditionally and irrevocably
guaranteed by Juyang.
The ratings outlook is stable.
The bond rating reflects Moody's expectation that Juyang will
complete the bond issuance on satisfactory terms and conditions,
including proper registrations with the National Development and
Reform Commission and the State Administration of Foreign
Exchange in China (A1 stable).
The net proceeds from the notes issuance will be used for general
working capital purposes.
RATINGS RATIONALE
"The proposed senior unsecured notes will extend Juyang's debt
maturity and will not have a material impact on its credit
metrics, as Moody's expect it will use the proposed bond proceeds
to partially pay down its secured debt," says Stephanie Lau, a
Moody's Vice President and Senior Analyst.
Moody's expects Juyang's credit metrics will remain appropriate
for its B2 corporate family rating even if the proposed USD
senior unsecured notes are issued.
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 projected
level of debt leverage factors in Moody's assumption that
acquisition and capital expenditures for Juyang's new businesses
will be substantially funded by debt.
Juyang's B2 corporate family rating reflects the group's track
record in hotel management and property development in the south
of Sichuan Province. The rating also reflects Moody's expectation
that its total revenue will remain stable in the next 12-18
months, underpinning its good profitability and new hotel
contributions, which will gradually start growing from 2018.
On the other hand, the rating reflects Juyang's relatively small
scale, and its high revenue and geographic concentration risks.
The company derives the majority of its hotel earnings from three
hotels, all located in Sichuan Province.
The group's B2 corporate family rating is also constrained by its
private company status, with weaker funding access and corporate
governance compared with other listed companies.
The company's plans to expand into tourism and cinema operations
will also increase execution and financial risks.
The rating also reflects the company's limited financial
flexibility because of its high exposure to secured debt.
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.
Juyang's senior unsecured rating is one notch lower than it would
otherwise be because of the risk of structural subordination.
This risk reflects the fact that the majority of claims are at
the operating subsidiaries, and have priority over claims at the
holding company in a bankruptcy scenario. In addition, the
holding company lacks significant mitigating factors for
structural subordination. As a result, the expected recovery rate
for claims at the holding company is lower than it would be
without subordination.
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.
The rating could be upgraded 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.
Factors that could lead to a rating downgrade include (1) a
deteriorating liquidity position; (2) deteriorating profitability
or cash flow at the company's core hotel management business; (3)
a more aggressive expansion strategy in terms of size or level of
borrowings; or (4) adjusted debt/EBITDA exceeding 5.0x.
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.
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H O N G K O N G
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GCL NEW ENERGY: S&P Assigns BB- Corporate Credit Rating
-------------------------------------------------------
S&P Global Ratings said it has assigned its 'BB-' long-term
corporate credit rating to GCL New Energy Holdings Ltd. (GNE).
The outlook is stable. S&P also assigned its 'B+' long-term issue
rating to GNE's proposed senior unsecured bonds. The issue
ratings are subject to our review of the final issuance
documents.
GNE is the largest non-state-owned solar farm developer and
operator in China. It is listed on the Hong Kong stock exchange.
The rating on GNE reflects the company's exposure to the evolving
regulatory framework for solar power producers in China and its
high leverage from aggressive debt-funded expansion. GNE's large
and efficient asset portfolio across China tempers these
weaknesses. S&P views GNE as a strategically important subsidiary
of the Hong Kong-listed GCL-Poly Energy Holdings Ltd.
While GNE benefits from China's rapid growth and policy support
for renewable energy, it is also exposed to the evolving
regulations. The current system, with subsidized feed-in tariff
and favorable provisions such as tax rebate and priority grid
offtake, could support solid returns for GNE's existing projects.
However, the company's newly commissioned solar farms could be
entitled to decreasing amounts of tariff subsidy. In the backdrop
of a continuous decline in investment costs and increasing burden
of renewable energy subsidies, the government aims to achieve
grid parity for solar power by 2020, meaning the on-grid tariff
for solar power would gradually decrease to a level comparable
with that of coal power in the run up to 2020. However, S&P
expects GNE will continue to earn reasonable project returns on
new capacities, given its competitive construction costs relative
to peers'.
S&P said, "We believe delays in subsidy payment for renewable
energy by the government will continue to weaken GNE's cash
flows. As of end-June 2017, GNE has accrued and unpaid renewable
energy subsidies of around Chinese renminbi (RMB) 3.0 billion and
an average receivable period of around 250 days. We attribute the
delay in payments mainly to an increasing deficit in the
renewable energy fund under the central government."
Chinese solar power operators are also exposed to increasing
competition for new capacity quota, resulting in lower tariffs.
This includes the bidding under various solar power programs,
such as the frontrunner program and the poverty alleviation
program. While those programs could mitigate the grid connection
or curtailment problem and the long receivable delays for solar
farm operators such as GNE, but it could dent their
profitability.
GNE's large and geographically spread portfolio of generating
assets is a credit strength, in our view. GNE is the largest non-
state-owned solar farm developer and operator in China and its
installed capacity reached 6.0 gigawatt (GW) at the end of 2017,
from 3.5GW in 2016. The company's 170 grid-connected projects are
scattered across 26 Chinese provinces, plus the U.S. and Japan.
Besides utility-scale ground-mounted solar projects, the company
is also actively seeking other project types with growth
potential, such as rooftop distributed generation, photovoltaic
agriculture, etc.
S&P believes GNE has good operating efficiency. The company has
limited power curtailment risk because most of its projects are
in Chinese provinces with less severe oversupply of renewable
energy and with better transmission infrastructure. GNE's in-
house expertise in developing and managing solar projects is
reflected in its cost competitiveness. The company has a
technological edge owing to its co-operation with the parent
group, as well as economies of scale.
GNE's ambitious expansion plan and sizable debt-funded capital
spending underpin its highly leveraged financial risk profile. In
2017, the company added around 2.5GW of new capacity, up 71%
year-over-year. S&P expects the company will continue to
aggressively scale up its generation portfolio over 2017-2019 and
likely fund the growth with additional debt.
S&P said, "Nevertheless, we foresee an improvement in the
company's cash flow adequacy as its new capacity ramps up, and it
adds more diversified funding sources, including equity
financing. In November 2017, GNE entered into a framework
agreement with Taiping Financial Holdings under which the latter
will establish an investment fund of approximately Hong Kong
dollar (HK$) 8.0 billion to subscribe for a new issuance of GNE's
shares and convertible bonds.
"In our view, GNE's strategy to transition into an asset-light
business model can improve its financial leverage. The company is
transferring majority equity stakes in some operational projects
to third parties while continuing to manage the day-to-day
operations. It will then earn management fees in addition to
dividends. This approach should enable GNE to manage its debt and
maintain its leverage below its target of 85%. We anticipate that
the company will dispose of some capacity to achieve around 1GW
of net domestic capacity addition per year in the next two years.
However, we do not assume any disposal gains, given the lack of
visibility on the pricing of the transaction.
"We expect GNE to continue to ride on rapid business expansion
and a vertical integration strategy with its parent group to
achieve market leadership in China in terms of operating scale,
geographical diversity, and cost competitiveness. We anticipate
material improvement in GNE's financial strength over the coming
two to three years with additional cash flow contributions from
its newly installed capacity and the company's more prudent rein
on leverage. We assess GNE's stand-alone credit profile to 'bb-',
one-notch above its anchor, based on favorable comparisons with
peers with a similar rating.
"We view GNE as a strategically important subsidiary of GCL-Poly.
GCL-Poly's group credit profile constrains the rating on GNE
because there are limited constraints that prevent a negative
credit intervention by the parent. S&P's assessment of GNE's
group status is based on the following considerations:
-- GNE is the primary platform for the group's downstream solar
farm segment, accounting for nearly 50% of group assets and a
growing portion of the group's cash flow;
-- GCL-Poly will potentially dilute its interests in GNE to
around 44% from the 62% at present if the share placement to
Taiping Financial Holdings is completed. We believe the group
still has a commitment to maintain control over GNE, being
the dominant shareholder with majority presence on GNE's
board;
-- GNE has a close association with the group's brand name and
market reputation; and
-- The group has a record of supporting GNE in various forms,
including provision of financial guarantees and cross default
clauses, subscription to equity and convertible bond
issuances, and help in business expansion and operation.
S&P said, "Our assessment on GCL-Poly's credit quality reflects
our view of the group's solar manufacturing business as well as
its solar farm operations. We believe GCL-Poly's credit profile
is constrained by intense competition and price volatility amid
industry oversupply for upstream solar material. The group is
highly sensitive to government policy support (as is the solar
power industry in general) and has sizable near-term capital
spending needs for downstream business growth and for upstream
capacity expansion in Xinjiang province. We expect its FFO-to-
debt ratio to stay at 15%-20% in 2017-2019. GCL-Poly's liquidity
is less than adequate, mainly due to its significant short-term
financing. However, GCL-Poly's status as the world's largest
polysilicon and wafer producer, with technological advantage and
cost leadership, as well as its vertically integrated business
model temper these weaknesses.
"The stable outlook on GNE reflects our view that the company's
parent GCL-Poly will maintain its credit profile over the next
12-24 months. We expect GCL-Poly to maintain its leading position
in the solar manufacturing industry and continue to expand its
downstream solar farm business through GNE.
"We believe GNE's financial strength and liquidity could improve
if the framework agreement of share issuance to Taiping Financial
Holdings goes through. However, dilution of GCL-Poly's
shareholding in GNE could increase its business volatility, and
call for more stringent triggers for movement in the parent's
group credit profile compared to those listed below.
"We could lower our rating on GNE if the group credit profile
deteriorates with GCL-Poly's FFO-to-debt ratio approaching 12.0%.
This could happen from price volatility, unexpected and adverse
regulatory changes, or if GCL-Poly's efforts to upgrade
technology and optimize its cost structure do not materialize as
planned.
"In a less likely scenario, we could also downgrade GNE if its
stand-alone credit strength deteriorates with the FFO-to-debt
ratio consistently declining. This could possibly be due to
aggressive debt-funded growth, execution risk, or systemic reform
in solar power's feed-in-tariff structure in China.
"We could raise the rating on GNE if the group credit profile
improves, while GNE's strategic importance to the parent company
remains intact."
The group credit profile could improve if the group maintains a
leading market share through the industry oversupply cycle, shows
prudent risk management and widened alternative funding sources
to ensure sufficient liquidity buffers against potential
setbacks, and significantly grows its downstream business with a
proper rein on leverage. GCL Poly's FFO-to-debt ratio staying
consistently above 23% could indicate such scenario.
=========
I N D I A
=========
ABC SITES: CRISIL Assigns B+ Rating to INR25MM Term Loan
--------------------------------------------------------
CRISIL Ratings has revoked the suspension of its rating on the
bank facilities of ABC Sites Private Limited (ABC) and has
assigned its 'CRISIL B+/Stable' rating to the bank facilities.
CRISIL had suspended the ratings on April 21, 2016, as the
company had not provided the information required for a rating
review. ABC has now shared the requisite information enabling
CRISIL to assign its rating.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 25 CRISIL B+/Stable (Assigned,
Suspension revoked)
The ratings reflect exposure to risks related to funding and
implementation of the ongoing hotel project, high occupancy risks
for the commercial complex and risks related to cyclicality in
the hospitality sector. These weaknesses are mitigated by
extensive experience of the promoters in the hotel industry and
comfortable debt maturity profile.
Key Rating Drivers & Detailed Description
Weaknesses
* Exposure to funding and implementation risks associated with
the ongoing hotel project: ABC is setting up a hotel in Zirakpur,
which is in nascent stage with only 26% of construction completed
till December 2017, thus being exposed to high implementation
risk. The term debt of INR25 crores for the project is
sanctioned. However, high dependence on receipt of customer
advances from sale of commercial complex leads to high funding
risk. CRISIL believes timely implementation of project with no
major cost overruns will remain key sensitivity factor.
* High occupancy risk: The project is 21% sold, and remaining is
to be leased. The company is yet to sign any agreement for
leasing of the remaining space, leading to high occupancy risk.
* Exposure to risks and cyclicality inherent in real estate and
hospitality sectors in India: The hotel industry remains
vulnerable to trends in the domestic and international economies.
Cost, however, remains high for premium properties even during
downward shifts in demand; cash flows from these properties are,
therefore, more susceptible to downturns.
Strengths
* Extensive experience of promoters in the real estate sector:
The decade-long experience of the promoters in the real estate
industry, and the established track record of implementing
several residential and commercial projects in and around Mohali,
will continue to support the business risk profile.
* Long moratorium, and continuous funding support from promoters:
Term debt repayment is scheduled to begin from April 2020, more
than one year post scheduled commencement of operations of the
hotel. Promoters have offered continuous funding support via
equity and unsecured loans and will continue to offer need-based
support going forward.
Outlook: Stable
CRISIL believes ABC will continue to benefit from the extensive
experience of its promoters in the real estate industry. The
outlook may be revised to 'Positive' if timely completion of the
hotel project and subsequent revenue from the same, healthy
occupancy of the commercial complex, lead to higher cash
accruals. The outlook may be revised to 'Negative' if time and
cost overruns in the ongoing project, significant pressure on
liquidity, arising from delay in receiving customer advances,
exert pressure on revenue and profitability, and weaken the debt
servicing ability.
ABC, incorporated in 2003, and taken over by Mr. N.K Sharma and
family in 2007, is setting up a commercial complex and hotel in
Zirakpur, Mohali (Punjab). The construction of commercial project
has been completed and hotel is likely to be operational by
September 2018.
BDA HEALTHCARE: ICRA Reaffirms B Rating on INR16.50cr Loan
----------------------------------------------------------
ICRA has reaffirmed the long-term rating of [ICRA]B to the
INR16.50 crore term-loans (enhanced from INR9.50 crore) and
INR0.50 crore working capital facilities of BDA Healthcare
Private Limited. The outlook on the long-term rating is 'Stable'.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-based Term 16.50 [ICRA]B (Stable); Reaffirmed,
Loan removed from issuer not
cooperating category
Fund-based Working 0.50 [ICRA]B (Stable); Reaffirmed,
Capital Facilities removed from issuer not
cooperating category
Rationale
The rating favorably factors in the long-standing experience and
qualification of the promoters in the pharmaceutical industry;
and the support from group companies in terms of established
presence and easy excess to key export markets.
The rating is, however, constrained by the limited track record
of company's operations; time and cost overruns arising out of
increase in scope of the project; high reliance on debt funding
for the project which is likely to keep the capital structure
leveraged in the near term; and . ICRA notes that the company has
sizeable repayments falling due in the near to medium term and
hence its ability to scale up operations while maintaining
healthy profitability would remain crucial for timely debt
servicing.
Outlook: Stable
ICRA believes BDA Healthcare Private Limited will continue to
benefit from the extensive experience of its promoters and
support from its group companies. The outlook may be revised to
'Positive' if there is substantial growth in revenues and
profitability, and improvement in the capital structure. The
outlook may be revised to 'Negative' if cash accruals are lower
than expected, or if any major debt funded capital expenditure
undertaken by the company weakens its liquidity.
Key rating drivers
Credit strengths
* Extensive experience of promoters in the pharmaceutical
industry spanning over a decade: BHPL is promoted by Mr. Santosh
Deshpande, a graduate in pharmacy having an experience of working
with reputed pharmaceutical companies in plant administration,
green field projects, contract manufacturing etc. He has an
experience of managing pharmaceutical trading companies, ODY
Pharma Pvt Ltd and BDA Pharma Pvt Ltd. The company's other
promoter, Mr. Daniel Biakou, is a graduate in Orthopaedic and has
been into the field of research and development for more than 30
years.
* Well-established marketing network of group companies likely to
support revenues: BHPL will be initially manufacturing products
to fulfil the requirement of its group companies BDA Pharma Pvt.
Ltd. and Ody Pharma Pvt. Ltd. These two companies have two major
dealers in Congo region of Africa who further sell the products
to various distributors and retailers in Africa. The group
companies at an aggregate level have reported turnover of
INR12.67 crore in FY2017.
Credit challenges
* Lack track record of operations: BHPL has set up a green field
project to manufacture formulations catering to therapeutic
segments such as generic drugs. The project was initially
expected to commercialise in November, 2016; however the same got
delayed due to increase in scope of the project. The commercial
production has started from June, 2017. Given the limited track
record of operations, the stabilization of production processes
and successful ramp up of operations at the earliest remains to
be seen.
* Sharp increase in project cost due to increased scope; sizeable
debt funding likely to keep the gearing levels high: The total
cost of project was initially estimated at INR13.72 crore,
proposed to be funded by term loans of INR9.50 crore and
promoter's funds of INR4.22 crore. The commercial operations were
expected to commence from September 2016. However, the scope of
the project was increased and additional machinery was purchased
which led to increase in project cost from INR13.50 crore to
INR31.50 crore. The same was funded by term loans of INR16.50
crore and promoter's funds of INR15.00 crore comprising of equity
of INR5.50 crore, unsecured loan of INR1.17 crore and advances of
INR7.94 crore. The unsecured loans and advances are non-interest
bearing in nature. Given the sizeable debt funding availed for
the project, the capital structure is likely to remain leveraged.
* Term loan repayments to commence shortly; successful ramp-up of
operations with adequate profitability remains critical: The
company has sizeable repayments in the near to medium term
(INR0.48 crore in FY2018, INR2.89 crore in FY2019 and INR2.89
crore in FY2020) which are scheduled to commence from February
2018. The ability of the company to scale up operations while
ensuring healthy profitability would remain critical in order to
generate sufficient accruals and ensure timely debt servicing.
* Sale in unregulated market increases the competitive intensity
and pressure to constantly introduce improved products: In
unregulated pharma market, every player has to constantly invest
in R&D to compete with the competitor products. BHPL already has
the lease license for manufacturing 150 medicines from its group
companies to thrive in such a competitive environment. Also the
demographics of African markets in terms of income level and low
healthcare insurance restricts the expenditure on healthcare
sector and hence impacts revenue of various pharma companies. Due
to low affordability there is high demand for generic products.
BDA Health Care Private Limited (BHPL) is setting up a greenfield
project at Nagpur for manufacturing formulations catering to
therapeutic segments such as generic drugs. The company is a part
of Nagpur based BDA group which comprises of two more companies
namely BDA Pharma Private Limited and ODY Pharma Private Limited.
At present the firm is managed by three partners, namely Mr.
Santosh Deshpande, Mr. Daniel Biakou and CA Ali Hatim.
BETA HEALTHCARE: CRISIL Assigns B Rating to INR3.85MM Demand Loan
-----------------------------------------------------------------
CRISIL Ratings has assigned its ratings on the bank facilities of
Beta Healthcare Products Private Limited (BHCPPL) to 'CRISIL
B/Stable/CRISIL A4'. The rating reflects the extensive experience
of the company's promoters in the healthcare equipment
distribution industry, and strong relationship with principals
and customers. The rating also factors weak financial risk
profile. These rating weakness are partially offset low net worth
and high gearing.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Cash
Credit Limit 3.45 CRISIL B/Stable
Packing Credit 1.70 CRISIL A4
Letter of credit
& Bank Guarantee .50 CRISIL A4
Cash Credit &
Working Capital
demand loan 3.85 CRISIL B/Stable
Export Bill Purchase
Discounting .50 CRISIL A4
Key Rating Drivers & Detailed Description
Weaknesses:
* Modest scale of operations: BHCPPL's scale of operations is
modest, as indicated by its revenue of INR20 cr during 2016-17
(refers to financial year, April 1 to March 31). Moreover,
disposable industry is highly fragmented, marked by the presence
of numerous small players. CRISIL believes that BHCPPL modest
scale of operations will continue to impinge on its business risk
profile over the medium term.
* Below-average financial risk profile: BHCPPL reported a small
net worth of around INR3 cr, and consequently high gearing at
around 4 times as on March 31, 2017. Due to working capital
intensive nature of operations .The firm is expected to infuse
capital in FY 18, So going forward netwoth and gearing is
expected to improve in FY 18. CRISIL believes that the financial
risk profile of the company will gradually improve over the
medium term.
* Working Capital-intensive operations: The operations of the
company are working capital-intensive marked by Gross Current
Assets of 147 days as at March 31, 2017. This is primarily owing
to Receivables of 54 days and Inventories of 96 days. CRISIL
believes that the operations shall continue to remain working
capital-intensive in the medium term.
Strength:
* Extensive experience of promoters in healthcare disposable
segment: The promoters, over the years, have developed
understanding of the dynamics of not only domestic market but of
overseas market also. As a result of which, they established good
relationship with its dealers and suppliers. CRISIL believes that
BHCPPL's will continue to benefit from the promoters extensive
experience along with established distribution network over the
medium term.
Outlook: Stable
BHCPPL will benefit over the medium term from its promoters'
considerable experience in healthcare disposable segment. The
outlook may be revised to 'Positive' if BHCPPL improves its
capital structure either by equity infusion or higher-than-
expected cash accruals, backed by improvement in scale of
operations or improvement in its working capital management.
Conversely, the outlook may be revised to 'Negative' if BHCPPL's
financial risk profile deteriorates on account of further decline
in its revenues and profitability or in case of a larger-than-
expected, debt-funded capital expenditure, or if the firm's
liquidity weakens significantly on account of increase in its
working capital requirements.
BHCPPL was incorporated in 2005 as a private limited company by
Mr. Xavier Moolayil with other 2 partners Miss.Rani Xavier,Mr
Boney Moolayil.BHCPPL is engaged in manufacturing of surgical and
examinationgloves with manufacturing facilities located at
Kakannad,Kerala.
CORE GREEN: ICRA Lowers Rating on INR284.71cr Loan to D
-------------------------------------------------------
ICRA has downgraded the long-term rating to [ICRA]D from [ICRA]C
to the INR284.71-crore (reduced from INR293.53-crore) term loans
and INR117.11-crore cash credit facilities of Core Green Sugar &
Fuels Private Limited. ICRA also revised the short-term rating to
[ICRA]D from [ICRA]A4 to the INR21.00-crore (reduced from
INR25.00-crore) non-fund based facilities of CGSFPL. ICRA has
also revised the ratings to [ICRA]D for the INR15.82-crore
unallocated limits of CGSFPL. ICRA has also removed the ratings
from the 'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based-Term 284.71 [ICRA]D; downgraded from
Loan [ICRA]C and removed from
Issuer Not Cooperating
Category
Fund Based-Cash 117.11 [ICRA]D; downgraded from
Credit [ICRA]C and removed from
Issuer Not Cooperating
Category
Non-fund Based- 21.00 [ICRA]D; downgraded from
Working Capital [ICRA]A4 and removed from
Facilities Issuer Not Cooperating
Category
Unallocated Limits 15.82 [ICRA]D; downgraded from
[ICRA]C/[ICRA]A4 and removed
from Issuer Not Cooperating
Rationale:
The revision in the ratings factor in the delays in debt
servicing owing to the company's stretched liquidity position.
CGSFPL's financial position continues to be weak as reflected by
losses at net level, high gearing and weak debt-coverage metrics
in FY2017. This is mainly because of a 54% decline in cane
crushing to the low levels of 1.55 lakh MT, lower recovery rates
and higher cane costs in SY2017 than the previous year. As a
result, the company opted for flexible restructuring in August
2017, with an effective date from April 1, 2017. ICRA notes that
the promoters brought in around INR20.00 crore of unsecured loans
in 9M FY2018. CGSFPL's ratings remain constrained by the risks
associated with the inherent cyclicality in the sugar business,
agro-climactic risks related to cane production, and Government
policies on import duties, cogeneration power and ethanol
pricing, and offtake.
ICRA, however, notes that cane crushing is expected to increase
in SY2018 to around 5.50 lakh MT supported by good monsoons.
This, along with the expected healthy sugar realisations is
likely to support the performance of the company in the near
term. Further, higher cane crushing is likely to result in
improved performance of the forward-integrated units-cogeneration
and distillery. ICRA also notes that the offtake risk for the
cogeneration unit is low in the medium term given that there is a
five-year PPA in place with the Karnataka state discom at a
remunerative tariff. The ratings also take into consideration the
company's forward integration into cogeneration and distillery
businesses, which provide alternate revenue streams and reduce
the impact of the cyclicality of the sugar business to an extent.
Key rating drivers:
Credit strengths
* Forward-integrated nature of operations: Fully integrated
profile of sugar operations (with cogeneration unit of 24 MW and
distillery unit of 50 KLPD) provides cushion to profitability in
cases of sugar downturn.
* Stable outlook for core sugar business due to favourable
supply-demand dynamics for SY2018: The closing stock at the end
of SY2017 is ~4.5 million tonne, which is equivalent to
approximately 2.3 months of consumption. Despite an increase in
sugar production by 23% in SY2018, the same is likely to be close
to the consumption level, resulting in a closing stock position
of around 4.5-5.0 million MT. Therefore, the sugar prices are
anticipated to remain range bound at the current levels, which
augurs well for the industry.
* Cane crushing is likely to increase in SY2018: Cane crushing is
expected to increase in SY2018 to around 5.50 lakh MT from around
1.55 lakh MT in SY2017 supported by good monsoons. Also, the
forward integrated units - cogeneration and distillery - are
likely to benefit from this increase in cane crushing.
* Low offtake risk for power exports: Low offtake risk for the
cogeneration unit in the medium term with a five-year PPA in
place with the Karnataka state discom at a remunerative tariff of
around INR5/unit.
* Under this scheme, the principal repayments for term loans and
working capital term loan during March 2017-September, 2017 are
exempted and are to be continued from December, 2017 quarter. The
interest payments are to be paid during this period. However, the
soft loans and SEFASU loans are to be paid as per the schedule.
Credit challenges
* Delays in debt servicing: Delays in debt servicing owing to
CGSFPL's stretched liquidity position. This is due to a
significant decline in the cane crushing to an all-time low of
1.55 lakh MT in SY2017 which has adversely impacted the
performance of the company despite healthy sugar realisations in
FY2017. As a result, the company opted for flexible restructuring
in August 2017 with an effective date from April 1, 2017.
* Weak financial profile: Decline in cane crushing, low recovery
rate and higher cane costs adversely impacted the company's
performance in FY2017. Further, lower crushing also resulted in a
decline in the power exports and distillery volumes in FY2017.
These factors resulted in a decline in the operating income (OI),
operating profitability, losses at net level, high gearing and
weak debt-coverage metrics in FY2017.
* Vulnerability of profitability to agro-climatic risk and
regulatory risk: Profitability of sugar mills remain exposed to
the cyclical nature of the sugar industry, agro-climatic risks
related to cane production, Government policies related to sugar
trade.
CGSFPL operates an integrated sugar plant at the Yadgir district
of Karnataka, which was commissioned in April 2011. The plant has
a 5000 TCD crushing unit, 24-MW cogeneration unit and a 50-KLPD
distillery unit. The company is promoted by the Sreeramaneni
family of Andhra Pradesh that holds the entire equity stake in
the company.
In FY2017, CGSFPL reported a net loss of INR9.84 crore on an OI
of INR181.27 crore compared with a net loss of INR22.29 crore on
an OI of INR238.77 crore in the previous year.
DEETYA PROJECTS: Ind-Ra Migrates 'BB-' Rating to Not Cooperating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Deetya Projects'
(DP) Long-Term Issuer Rating to the non-cooperating category. The
issuer did not participate in the rating exercise despite
continuous requests and follow-ups by the agency. Therefore,
investors and other users are advised to take appropriate caution
while using these ratings. The rating will now appear as 'IND BB-
(ISSUER NOT COOPERATING)' on the agency's website. The
instrument-wise rating actions are:
-- INR30 mil. Fund-based facilities migrated to non-cooperating
category with IND BB-(ISSUER NOT COOPERATING)/IND A4+(ISSUER
NOT COOPERATING) rating; and
-- INR20 mil. Non-fund-based facilities migrated to non-
cooperating category with IND A4+(ISSUER NOT COOPERATING)
rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
Dec. 15, 2016. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Incorporated in 2012, DP is an engineering, procurement, and
construction contractor, engaged in government projects. The firm
undertakes civil construction of roads, buildings and bridges
besides irrigation work and transmission line & water pipelines
work contracts. DP operates in Andhra Pradesh and Telangana.
ERODE AMARNATH: CRISIL Assigns B Rating to INR4.30MM LT Loan
------------------------------------------------------------
CRISIL Ratings has assigned its 'CRISIL B/Stable' rating to the
long-term bank facility of Erode Amarnath Mills Private Limited
(EAMPL). The rating reflects the company's modest scale of
operations and expected working capital intensity in operations.
These weaknesses are partially offset by the extensive experience
of the promoters in the textile industry.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Cash
Credit Limit 1.25 CRISIL B/Stable
Cash Credit 1.25 CRISIL B/Stable
Long Term Loan 4.30 CRISIL B/Stable
Key Rating Drivers & Detailed Description
Weakness:
* Modest scale of operations: EAMPL operates in a highly
fragmented textile processing industry, with the presence of
several small unorganized players. Moreover, EAMPL being a modest
player with 36 looms is expected to have limited bargaining power
with its customers and lacks pricing flexibility.
* Large working capital requirement: Operations are expected to
be working capital intensive due to inventory of 45-60 days.
Strengths:
* Extensive experience of the promoters: The promoter family has
experience of over 20 years in textile processing. The promoters
have established a clientele in Rajasthan and Tamil Nadu,
ensuring a regular flow of repeat orders.
Outlook: Stable
CRISIL believes EAMPL will continue to benefit from the extensive
experience of its promoters and its established relationships
with customers. The outlook may be revised to 'Positive' if
substantial revenue growth and stable profitability and capital
structure result in sizeable cash accrual. The outlook may be
revised to 'Negative' if lower-than-expected cash accrual,
stretch in working capital cycle, or large, unanticipated, debt-
funded capital expenditure weakens the financial risk profile,
especially liquidity.
EAMPL, set up as in 2013 in Erode, manufactures grey fabric,
primarily in the count of 30s. The company started commercial
production in fiscal 2017 with 20 looms, and now has 36 looms
with production capacity of 1500 metre of fabric per day. Mr. C.
Vishaak oversees its daily operations.
ESSAR STEEL: Ruia Family May Have Found a Way to Bid
----------------------------------------------------
Vishwanath Nair at BloombergQuint reports that the Ruia family,
which owns the Essar Group, may have found a way to bid for Essar
Steel Ltd's assets without facing any resistance from lenders or
invoking a clause that requires them to first clear pending dues.
The bid is likely to come from a special purpose vehicle
registered in Mauritius, two people close to the development told
BloombergQuint. Russia's VTB Bank will own 40% stake in this SPV
while Hong Kong-based SSG Capital will own 30%, BloombergQuint
discloses. The remaining 30% will be held by a trusteeship based
in Singapore, where Rewant Ruia - son of Essar co-Founder Ravi
Ruia - will be the beneficiary, according to BloombergQuint.
Since Rewant Ruia doesn't control the trusteeship, the bid would
not be connected to any related parties, ensuring that it doesn't
violate the conditions set under the Insolvency and Bankruptcy
Code, one of the two people quoted above said, BloombergQuint
relays. Besides, since the current promoters will not actually
end up owning the company, the requirement that promoters must
clear pending dues to be eligible to bid for the asset may not
apply, said the second person quoted above.
If the Ruias manage to place a bid for the company through a
complex financial structure, it would become an important
precedent for defaulting promoters finding ways to stay in the
game even after insolvency proceedings are initiated, according
to BloombergQuint. "It may be possible to create complex
financial structures. After all, water finds its own level,"
BloombergQuint quotes Jayesh H, founding partner at law firm
Juris Corp, as saying.
"We had submitted an Expression of Interest as part of the
Corporate Insolvency Resolution Process. In the EOI, we had
indicated that we intend to work together with VTB. Since then,
the Govt. of India has come out with a new ordinance which
necessitates a re-look at the bid itself. We are currently in
discussion with our lawyers & VTB to decide on the way forward.
No decision has been taken as yet," an Essar Steel spokesperson
said in an emailed response, BloombergQuint relays.
The spokesperson declined comment when asked to clarify whether
the proposed structure would require the promoters to clear any
pending dues or not, BloombergQuint notes.
The Economic Times had first reported that the Ruias are planning
to bid for Essar Steel through an SPV with VTB Bank and SSG
Capital, BloombergQuint relays.
About Essar Steel
Incorporated in 1976, Essar Steel India Ltd. is a part of the
Essar Group and is having 10 MTPA integrated steel manufacturing
facilities at Hazira, Gujarat and iron ore beneficiation and
pelletisation facilities in Paradeep, Odisha (12 mtpa) and Vizag,
Andhra Pradesh (8 mtpa). The company also owns and operates two
iron ore slurry pipelines -- one each in Odisha (Dabuna to
Paradip) and Andhra Pradesh (Kirandul-Vizag), which transport the
iron ore slurry from the beneficiation plant (located near the
iron ore mines in Dabuna and Kirandul) to the pellet plant
(located near the Paradip and Vizag ports). A large portion of
the iron ore pellets produced are intended for captive
consumption by ESIL's steel plant at Hazira for cost
optimization.
The National Company Law Tribunal (NCLT), Ahmedabad, admitted
Essar Steel's insolvency case on Aug. 2, 2017. State Bank of
India's suggested interim resolution professional (IRP) Satish
Kumar Gupta, of Alvarez and Marsal India, has been appointed as
IRP.
Essar Steel owes more than INR45,000 crore to lenders, of which
INR31,671 crore had already been declared as non-performing as of
March 31, 2016, The Economic Times disclosed. The SBI-led
consortium of 22 creditors accounts for 93% of this amount. Essar
Steel owes $ 450.67 million to SCB in debt.
Both petitions filed by State Bank of India (SBI) and Standard
Chartered Bank (SCB) for initiating insolvency proceeding under
Insolvency & Bankruptcy Code (IBC) against the steel major Essar
Steel Ltd have been admitted by NCLT on Aug. 2, according to ET.
GADDALA FINANCIAL: CRISIL Assigns B Rating to INR6MM LT Loan
------------------------------------------------------------
CRISIL Ratings has assigned its 'CRISIL B/Stable' rating to the
proposed long-term bank loan facility of Gaddala Financial
Services (GFS).The rating reflects a small scale of operations
with geographic concentration, and exposure to risks inherent in
the microfinance industry. These rating weaknesses are partially
offset by adequate capitalisation.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term
Bank Loan Facility 6 CRISIL B/Stable
Analytical Approach
For arriving at the rating the team has considered business and
financial risk profile of GFS.
Key Rating Drivers & Detailed Description
Weakness
* Small scale of operations with geographic concentration: The
scale is small as compared with other microfinance institutions
(MFIs); assets under management were INR3.5 crore as on
September 30, 2017. Moreover, operations are confined to only
five districts in Telangana and are thus susceptible to local
social and political issues.
* Exposure to risks inherent in the microfinance segment: The
microfinance sector is susceptible to regulatory and legislative
risks. The promulgation of the ordinance on MFIs by the
Government of Andhra Pradesh had triggered a chain of events that
adversely impacted the MFI business model by impairing growth,
asset quality, operating surplus, and solvency. Such institutions
lend to the poor and downtrodden sections of society, and will
therefore remain exposed to socially sensitive factors, including
high interest rates, and, consequently, to tighter regulations
and legislation
Strength
* Adequate capitalization: The networth was INR2.3 crore and the
gearing 0.6 time, as on September 30, 2017, as against INR1.3
crore and nil, respectively, as on March 31, 2016.The gearing is
expected to remain comfortable at below 2 times over the medium
term factoring the planned scale of operations.
Outlook: Stable
Capitalisation is likely to remain adequate over the medium term.
However, the scale of operations is expected to remain modest and
geographically concentrated over this period. The outlook may be
revised to 'Positive' in case of a significant improvement in
market position and resource without compromising on asset
quality. The outlook may be revised to 'Negative' if asset
quality and profitability deteriorate, thereby impacting
capitalisation.
GFS is promoted by Mr. John Gaddala, who acquired this firm from
Mr. Poorna Chandra Rao in 2009. The firm was earlier called Vanki
Neni, which operated as a hire purchase firm. After the
acquisition and renaming, the firm started operations as an MFI
in 2010.
The firm offers unsecured loans to individuals and cooperatives.
However, unlike other MFIs, it does not operate in the self-help
or joint-liability group business models. It operates only in a
few districts of Telangana such as Warangal, Mahubudabad,
Jangaon, and Hyderabad.
GAJANAN UTTAMRAO: CRISIL Withdraws C Rating on INR10MM LT Loan
--------------------------------------------------------------
CRISIL Ratings has withdrawn its rating on the bank facility of
Gajanan Uttamrao Mante (GUM). GUM requested CRISIL to withdraw
the ratings and have provided withdrawal request. The rating
action is in line with CRISIL's policy on withdrawal of its bank
loan facilities.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term
Bank Loan Facility 10 CRISIL C (Withdrawal)
GUM was established in 2007 by Pune (Maharashtra)-based
entrepreneurs Mr. Gajanan Uttamrao Mante, who have been in the
real estate business for about 10 years.
GEETASHREE PULSES: Ind-Ra Upgrades Issuer Rating to 'B+'
--------------------------------------------------------
India Ratings and Research (Ind-Ra) has upgraded Geetashree
Pulses' (GP) Long-Term Issuer Rating to 'IND B+' from 'IND
B(ISSUER NOT COOPERATING)'. The Outlook is Stable. The
instrument-wise rating action is:
-- INR100 mil. Fund-based working capital limit upgraded with
IND B+/Stable rating.
KEY RATING DRIVERS
The upgrade reflects an improvement in GP's credit metrics and
scale of operations to moderate in FY17 from weak in FY16.
Revenue increased to INR681 million in FY17 from INR393 million
in FY16, driven by a rise in order execution. EBITDA margin
expanded to 3.0% in FY17 (FY16: 2.7%) due to the trading of new
spices, which have high margins. In FY17, interest coverage
improved to 1.6x (FY16: 1.2x) and net leverage to 3.7x (12.3x),
driven by an increase in absolute EBITDA to INR20 million (INR11
million).
The ratings are supported by the firm's comfortable liquidity
position, indicated by an average utilisation of 38% for the 12
months ended December 2017, and GP's partners more than two
decades of experience in the trading of coriander seeds.
The ratings, however, continue to be constrained by the
partnership nature of business.
RATING SENSITIVITIES
Negative: Any deterioration in the credit metrics could be
negative for the ratings.
Positive: Any further improvement in the scale of operations and
the credit metrics could be positive for the ratings.
COMPANY PROFILE
Incorporated in 2013, GP is a partnership firm primarily engaged
in the trading of coriander seeds. The firm's registered office
is in Kumbhraj, Madhya Pradesh. It is managed by Mr. Ram Kasat
and his family.
JAIN IRRIGATION: Fitch Affirms B+ IDR; Outlook Positive
-------------------------------------------------------
Fitch Ratings has affirmed India-based micro-irrigation company
Jain Irrigation Systems Limited's (JISL) Long-Term Issuer Default
Rating (IDR) at 'B+'. The Outlook remains Positive. The agency
has also affirmed JISL's USD200 million 7.125% senior unsecured
notes due in 2022 at 'B+' with Recovery Rating of 'RR4'. The
notes are issued by JISL's wholly owned subsidiary Jain
International Trading B.V. and guaranteed by JISL.
The affirmation with Positive Outlook reflects JISL's
satisfactory deleveraging in the last 12 months, which is in line
with Fitch expectations. Fitch expect JISL to be able to reduce
leverage (defined as lease adjusted debt net of cash adjusted for
seasonality/EBITDAR) further to around 3.5x by the financial year
to March 31, 2019 (FY19) from 4.3x at FYE18 and 4.7x at FYE17,
underpinned by robust growth in EBITDA. However, the bulk of the
company's micro-irrigation business, which accounts for around
60% of its EBIT, is susceptible to unpredictable weather patterns
and India's vulnerable agricultural sector, which may yet pose
risks to the company's deleveraging.
JISL's ratings reflect its high, albeit improving leverage, and
its strong business risk profile as a globally diversified
producer of micro irrigation systems (MIS), a leading
manufacturer and distributor of polyvinyl chloride and
polyethylene pipes in India for industrial and residential uses,
as well its leading position in supplying processed fruits and
vegetables to leading multinational fast-moving consumer goods
companies across several geographies.
KEY RATING DRIVERS
Deleveraging On-Track Despite Challenges: Fitch expect JISL's
leverage to reduce to 4.3x by FY18 supported by a boost in
revenue and EBITDA from the acquisition of two US dealers of MIS
products in April 2017, as well as strong growth in contracts won
for projects in MIS and plastic pipes in India and overseas.
Fitch expect the rise in project revenue in total revenue to
improve EBITDA margins. The demand for retail-MIS sales in India
is likely to remain muted in 2HFY18 due to a gradual turnaround
in domestic crop prices after a weak start to the fiscal year, as
well as farmers possibly delaying spending until after the
government processes their farm loan waivers.
Long-Term Structural Growth: India's low irrigation coverage and
high dependence on erratic rainfall underpin the demand for
JISL's micro-irrigation products. Policies such as the Indian
government's Pradhan Mantri Krishi Sinchai Yojana (PMKSY) Scheme,
which aims to improve country-wide irrigation access, are likely
to drive the long-term growth of JISL's cash flows. In FY17 the
government spent around INR20 billion to bring an estimated
840,000 hectares (ha) under irrigation, up from INR16 billion and
570,000 ha in FY16. The government estimates the PMKSY scheme
will invest INR500 billion over FY16-FY20 to irrigate 7.6 million
ha.
Furthermore, JISL's pipes business stands to benefit from
initiatives, such as India's Atal Mission for Rejuvenation and
Urban Transformation to develop urban infrastructure such as
roads, water supply and sewage services, solid waste management
and storm water drains. The government of India aims to spend a
total of INR500 billion as part of this scheme from FY16 to FY20.
In the last 12 months JISL won orders worth INR13.3 billion in
its MIS and pipes divisions in India, and at end-1HFY18, had a
global project order book of INR27 billion for these divisions.
The orders are typically executed over one to two years.
Cash-Flow Seasonality: JISL's sales are slower during the first
half of the fiscal year than the second half, which results in a
higher cash balance at the fiscal year-end of around INR1 billion
on average, compared with the preceding three fiscal quarters.
This is primarily because sales of MIS in India depend on the
performance of the monsoon rains, which usually occur between
June and September. Fitch therefore deducts INR1 billion from
JISL's year-end cash balance when calculating the year-end
leverage ratio to account for this seasonal variance.
Diversified Cash Flows: JISL's revenue is diversified across
products and geographies, with sales outside India accounting for
45% of revenue in FY17. High-tech agricultural inputs (MIS and
tissue culture), plastic pipes and food processing accounted for
62%, 15%, and 19% of operating profits, respectively.
DERIVATION SUMMARY
Fitch does not rate any of JISL's direct competitors. However
JISL may be compared with companies in the diversified
manufacturing segment, such as JSC HMS Group (HMS, B+/Stable) and
Yingde Gases Group Company Limited (B+/Stable).
HMS is a major pump, compressor and equipment manufacturer to the
oil and gas industry in Russia and CIS. Its ratings reflect the
lack of diversification by customer and geography, and a low
share of after-market services. The ratings factor in the group's
leading market position and stable fundamentals of the oil
industry. JISL has a stronger business risk profile than HMS,
supported by its larger operating scale and more diversified cash
flows across geographies and end-markets. As a result, JISL can
support more leverage than HMS at the same rating.
Yingde provides industrial gases to customers in the Chinese
steel and chemical manufacturing sectors, with a high 70%
exposure to the steel sector. Risks to Yingde's credit profile
from its industry concentration were evident during the
industry's downturn in the last few years, although this
situation has now improved. Therefore, despite Yingde's larger
operating scale compared to JISL, Fitch assess both companies as
having a similar credit risk because JISL's cash flows are
diversified by end-market and geography, which mitigate the risks
stemming from a smaller scale. Unlike Yingde, JISL's rating is on
Positive Outlook because Fitch expect its leverage to improve in
the next 12-18 months. Yingde's rating is on a Stable Outlook
because there is more uncertainty around its ability to achieve
the requirements for an upgrade at this point.
No country-ceiling, parent/subsidiary linkage or operating
environment aspects impacts the rating.
KEY ASSUMPTIONS
Fitch's Key Assumptions within Fitch Rating Case for the Issuer
- Revenue of INR79 billion in FY18 and INR87 billion in FY19
- EBITDA of INR11 billion in FY18 and INR12 billion in FY19
- EBITDA margin to remain around 14% in the next two years
- Capex of INR3.5 billion and INR3 billion respectively in FY18
and FY19
Recovery Rating Assumptions
- The recovery analysis assumes that JISL would be considered a
going-concern in bankruptcy and that the company would be
reorganised rather than liquidated. Fitch have assumed a 10%
administrative claim.
- Fitch have assumed that JISL's going-concern EBITDA is equal to
JISL's EBITDA in the last 12 months to September 2017 with no
further discount applied. This is conservative because it does
not include most of the EBITDA from JISL's April 2017
acquisitions in the US, and it does not factor in the robust
EBITDA growth Fitch expect JISL to post over the medium term. It
reflects Fitch's view of a sustainable, post-reorganisation
EBITDA level, upon which Fitch based the valuation of the
company.
- An enterprise value (EV) / EBITDA multiple of 6x is used to
calculate the post-reorganisation valuation and Fitch believe
this is closer to a distressed multiple, considering that as of
Sept. 30, 2017, JISL was trading at a EV/EBITDA multiple of
11.3x.
- Fitch used secured and unsecured debt (including vendor
financing reclassified from trade payables as unsecured debt) as
of March 31, 2017.
- Fitch have assumed that JISL's sanctioned but undrawn lines of
INR12.8 billion will be fully drawn at the point of distress, and
that these lenders would have a prior ranking claim on JISL's
assets ahead of bond investors.
- The recovery waterfall results in a 100% recovery estimate
corresponding to a 'RR1' Recovery Rating for the USD200 million
unsecured notes. Nevertheless, Fitch has rated the senior notes
at 'B+' with a Recovery Rating of 'RR4' because under Fitch's
Country-Specific Treatment of Recovery Ratings criteria, India
falls into 'Group D' of creditor friendliness. Instrument ratings
of issuers with assets in this group are subject to a soft cap at
the issuer's IDR.
RATING SENSITIVITIES
Developments That May, Individually or Collectively, Lead to
Positive Rating Action
- Lease adjusted debt net of cash adjusted for seasonality
/operating EBITDAR sustained below 3.5x
- Ability to generate sustained neutral free cash flow
Developments That May, Individually or Collectively, Lead to
Negative Rating Action
- Not meeting the positive rating sensitivities for an extended
period will result in the Outlook being revised to Stable
LIQUIDITY
Comfortable Liquidity: At FYE17, JISL had readily available cash
(net of cash adjustment for seasonal variations) of INR1.4
billion and approved but undrawn credit facilities of INR12.8
billion available to fund debt maturing in FY18 of INR5.8 billion
and vendor financing of INR2.4 billion, plus Fitch's estimate of
free cash outflow (after capex and dividends) for FY18 of around
INR700 million. The group had a further INR12.3 billion of
working capital debt repayable on demand, which Fitch expect
lenders to roll over during the normal course of business given
the group's satisfactory credit profile.
JALDHAKA COLD: CRISIL Reaffirms B Rating on INR7.14MM Loan
----------------------------------------------------------
CRISIL Ratings has reaffirmed its 'CRISIL B/Stable/CRISIL A4'
ratings on the bank facilities of Jaldhaka Cold Storage Private
Limited.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 0.3 CRISIL A4 (Reaffirmed)
Cash Credit 7.14 CRISIL B/Stable (Reaffirmed)
Term Loan 6.56 CRISIL B/Stable (Reaffirmed)
The rating continues to reflect the company's small scale of
operations and below-average financial risk profile. The rating
also factors in susceptibility to regulatory changes and to
intense competition in the cold storage industry in West Bengal
(WB). These weaknesses are partially offset by the extensive
experience of its promoters.
Key Rating Drivers & Detailed Description
Weakness
* Weak financial risk profile: Muted accretion to reserves will
keep networth small, which in turn will constrain financial risk
profile over the medium term net worth and gearing were INR2.9
crore and 3.9 times as on March 31, 2017.
* Highly regulated and competitive industry: The potato cold
storage industry in WB is regulated by the West Bengal Cold
Storage Association. Rental rates are fixed by the state's
department of agricultural marketing, thereby limiting the
ability of players to make profit based on their strengths and
geographical advantages. Furthermore, intense competition limits
pricing power with suppliers and customers, and forces players to
offer discounts to ensure healthy utilisation of capacity.
Strengths
* Extensive experience of the promoters: Benefits from the
promoters' 15 years of experience in the industry and healthy
relationships with traders and farmers, should support business.
Outlook: Stable
CRISIL believes JCSPL will continue to benefit from the extensive
experience of its promoters. The outlook may be revised to
'Positive' if increase in cash accrual, or equity infusion, and
efficient working capital management strengthens financial risk
profile. The outlook may be revised to 'Negative' if delays in
repayment of loans by farmers, low cash accrual, or significant
capital expenditure undertaken exerts pressure on liquidity.
Incorporated in 1997, JCSPL provides cold storage facilities to
potato farmers and traders. It also trades in potatoes. Its
current owners-directors, Mr. Gobinda Das Pal and Mr. Pradyut
Kumar Pal, purchased JCSPL on January 1, 2010. The cold storage
at Jalpaiguri has a capacity of 21,900 tonne.
JOSHI COTEX: CRISIL Reaffirms B+ Rating on INR6MM Cash Loan
-----------------------------------------------------------
CRISIL Ratings has reaffirmed its 'CRISIL B+/Stable' rating on
the long-term bank facilities of Joshi Cotex (JC).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 6 CRISIL B+/Stable (Reaffirmed)
Term Loan 2 CRISIL B+/Stable (Reaffirmed)
The rating continues to reflect modest scale of operations in
highly fragmented industry and below average financial risk
profile. These rating weakness are partially offset by partners'
extensive experience in cotton industry.
Key Rating Drivers & Detailed Description
Weaknesses
* Modest scale of operations in highly fragmented industry: The
cotton ginning and spinning industry is largely unorganised with
various players having small capacity. In addition, the entry
barriers are low on account of low capital and technology
intensity and low differentiation in end product. This has led to
a highly fragmented industry structure with intense competition
among players. Furthermore, due to fragmentation and intense
competition in the industry, the players have limited pricing and
bargaining power. JC is a small player in the industry with
revenue of INR34.9 crore for 2016-17 (refers to financial year,
April 1 to March 31).
* Below average financial risk profile: Financial risk profile is
below average marked by modest net worth of INR3.56 cr., moderate
gearing of 2.0 times as on March 31, 2017. The company has
moderate debt protection metrics with interest coverage ratios of
2.4 times, respectively, for 2016-17. Financial risk profile may
remain below average over the medium term.
Strength
* Partners' extensive experience in cotton industry: The partners
of JC have been in the cotton industry for close to 25 years via
other group entities. The partners have a group company, Ratna
Cotton Industries, which has been in cotton ginning and pressing
industry for the past 15 years. The firm benefits from the
extensive experience of the directors, their understanding of the
dynamics of the local market, and established relationships with
farmers and customers.
Outlook: Stable
CRISIL believes that JC will continue to benefit over the medium
term from its promoters' industry experience. The outlook may be
revised to 'Positive' if the firm increases its scale of
operations significantly while also improving its debt protection
metrics and/or in case of equity infusion substantially improving
its capital structure. Conversely, the outlook may be revised to
'Negative' if the firm's working capital borrowings are more than
expected or if it undertakes larger-than-expected debt-funded
capital expenditure programme, leading to material deterioration
of its financial risk profile.
JC was incorporated in 2007 by Mr. Vikas Joshi and family
members. The firm is engaged in the ginning and pressing of raw
cotton (kapas) to make cotton bales. The firm sells the cotton
bales to various traders and the cotton seed is sold to various
oil mills in the vicinity of the plant. The firm has its
manufacturing facility located at Aurangabad, Maharastra with a
capacity of 20,000 cotton bales per annum. The firm is in process
of setting up a seed crushing plant with an expected crushing
capacity of 1 lakh quintal per annum.
For fiscal 2017, JC profit after tax (PAT) was INR0.26 crore on
net sales of INR34.91 crore, against a PAT of INR0.19 crore on
net sales of INR24.62 crore for fiscal 2016.
KITCHEN FOODS: CRISIL Reaffirms B+ Rating on INR9MM Cash Loan
-------------------------------------------------------------
CRISIL Ratings has reaffirmed its 'CRISIL B+/Stable' rating on
the long-term bank facilities of Kitchen Foods (KF).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 9 CRISIL B+/Stable
(Reaffirmed)
Rupee Term Loan 3 CRISIL B+/Stable
(Reaffirmed)
The rating continues to reflect modest scale of operation and
below average financial risk profile. These rating weakness are
partially offset by extensive experience of promoters in
agricultural commodities industry.
Key Rating Drivers & Detailed Description
Weakness
* Modest scale of operations: KF is a modest player in the
fragmented wheat processing industry, which is reflected by its
modest capacity of 200 tons per day. The wheat-processing
industry is highly fragmented, with numerous small-scale
unorganised players catering to local demand as the entry barrier
is low due to low value addition. The modest scale restricts KF's
ability to benefit from economies of scale, which players with
larger volumes are able to leverage. The fragmented nature of the
business and modest scale of operations also limit KF's ability
to bargain with its suppliers and customers leading to limited
pricing flexibility.
* Below average financial risk profile: The financial risk
profile of the company is marked by a weak capital structure. The
net worth of the company is modest at around INR3.24 crores as on
31st March 2017. The gearing of the company is high at around 4.3
times as on 31st March 2017 given the dependence of the firm on
external debt to meet its term debt obligations. The gearing is
expected to remain at similar levels given the continued
dependence on external debt to fund the incremental working
capital requirements. The debt protection metrics of the firm was
moderate marked by interest coverage ratio at 1.65 times
respectively in 2016-17 on account of low profitability resulting
in low accretion to reserves. The debt protection metrics are
expected to remain at similar levels over the medium term.
Strength
* Extensive experience of promoters in agricultural commodities
industry: The promoters of KF have around 50 years of experience
in the agro commodities industry. CRISIL believes that the
extensive experience of KF's promoters in the agro commodities
industry and established relationships with its suppliers will
help the firm ramp up its operations and maintain its business
risk profile over the medium term.
Outlook: Stable
CRISIL believes that KF will, over the medium term, benefit from
its promoters' extensive industry experience. The outlook may be
revised to 'Positive' if the firm significantly increases its
scale of operations and registers improved cash accruals.
Conversely, the outlook may be revised to 'Negative' in case of
deterioration in KF's overall financial risk profile and
liquidity mostly likely because of low cash accruals or sizable
working capital requirements.
KF, set up in 2013, processes wheat into products such as refined
flour (maida), semolina (suji), and whole wheat flour (atta). It
sells its products under the Kitchen Foods brand. The firm has a
flour mill at Khargone (Madhya Pradesh), with a milling capacity
of 200 tonnes per day. It commenced commercial operations in
November 2013.
For fiscal 2017, KF profit after tax (PAT) was INR0.19 crore on
net sales of INR65.67 crore, against a PAT of INR0.04 crore on
net sales of INR41.13 crore for fiscal 2016.
KRIPTON GRANITO: CRISIL Reaffirms B+ Rating on INR20MM Term Loan
----------------------------------------------------------------
CRISIL Ratings has reaffirmed its rating on the bank facilities
of Kripton Granito Private Limited (KGPL) at 'CRISIL
B+/Stable/CRISIL A4.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 3.5 CRISIL A4 (Reaffirmed)
Cash Credit 6 CRISIL B+/Stable (Reaffirmed)
Term Loan 20 CRISIL B+/Stable (Reaffirmed)
The ratings reflect the initial stages of operations amidst
intense competition, moderate working capital requirement and the
weak financial risk profile. These weaknesses are partially
offset by the extensive experience of KGPL's promoters in the
ceramic industry.
Analytical Approach
For arriving at the ratings, CRISIL has treated unsecured loans
(outstanding at INR3.96 crore as on March 31, 2017) extended to
KGPL by its promoters, as neither debt nor equity. That's because
these loans are likely to remain in the business over the medium
term, and bear an interest rate that is lower than the market
rate.
Key Rating Drivers & Detailed Description
Weakness
* Initial phase of operations amidst intense competition:
Commerical operations commenced in April 2017, and revenue of
around INR26 crore was reported until November 2017. Intense
competition from several unorganised players will continue to
limit the pricing power and benefits from economies of scale.
Hence, ramp up in scale and sustainability will remain key
monitorables.
* Moderate working capital requirement: Operations are moderately
working capital intensive, with receivables and inventory
expected to be sizeable. However, working capital management
would be partly aided by payables because of healthy relationship
between promoters and the suppliers.
* Weak financial risk profile: Financial risk profile is likely
to be constrained by high gearing and average debt protection
metrics, considering the nascent stage of operations, and the
large debt-funded capital expenditure.
Strength
* Extensive experience of the partners: Benefits from the
partners' two decade-long experience in the industry and their
healthy relationships with customers and suppliers, will continue
to support the business risk profile.
Outlook: Stable
CRISIL believes KGPL will continue to benefit from the extensive
experience of its partners. The outlook may be revised to
'Positive' in case of a significant improvement in net cash
accrual or liquidity, led by ramp up in scale of operations and
better profitability. The outlook may be revised to 'Negative' if
low cash accrual, or stretch in theworking capital cycle, weakens
financial risk profile.
KGPL was set up in 2016, at Morbi (Gujarat). The company
manufactures ceramic vitrified tiles, and began operations in
April 2017.
M G F MOTORS: CRISIL Raises Rating on INR31.5MM Loan to B
---------------------------------------------------------
CRISIL Ratings has upgraded its rating on the long-term bank
facilities of M G F Motors Ltd to 'CRISIL B/Stable' from 'CRISIL
B-/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 14 CRISIL B/Stable (Upgraded
from 'CRISIL B-/Stable')
Inventory Funding
Facility 31.5 CRISIL B/Stable (Upgraded
from 'CRISIL B-/Stable')
Term Loan 6.75 CRISIL B/Stable (Upgraded
from 'CRISIL B-/Stable')
The upgrade reflects sustained improvement in MML's business risk
profile, driven by significant increase in revenue and operating
margin. Revenue is expected at INR262 crore and operating margin
at 3% for the eight months through November 2017. Revenue was
INR404 crore and operating margin was 3.1% in fiscal 2017 against
INR398 crore and 2.8%, respectively, in fiscal 2016. Cash accrual
rose to INR2.3 crore from a negative INR1.8 crore. The improved
operating performance led to better interest coverage of 1.30
times for fiscal 2017 against 0.97 time in the previous fiscal.
The rating reflects MML's weak financial risk profile because of
highly leveraged capital structure, and susceptibility of
profitability to economic slowdown. These weaknesses are
partially offset by its established position as a dealer of
Hyundai Motors India Ltd (HMIL) in Kerala, and healthy revenue.
Key Rating Drivers & Detailed Description
Weakness
* Weak financial risk profile: The financial risk profile is
constrained by highly leveraged capital structure and weak debt
protection metrics. The company reported high total outside
liabilities to tangible networth (TOLTNW) ratio of over 70 times
in the two years ended March 31, 2017. On account of high
interest cost and pressure on profitability because of intense
competition, interest coverage ratio was subdued at 1.30 times in
fiscal 2017.
* Susceptibility to economic cyclicality and intense competition
in the automotive dealership segment: The automotive dealership
business is highly vulnerable to economic cycles. Any uncertainty
in the economy or monetary tightening measures such as an
increase in interest rates and fuel price can substantially
impact demand for vehicles, thus adversely impacting the business
of automotive dealers. The company faces intense competition from
dealers of other major car brands such as Maruti, Toyota, Ford,
and from other dealers of Hyundai in Kerala.
Strengths
* Established position in the auto dealership market for HMIL
cars in Kerala, and healthy revenue: MML has an established
market position among HMIL dealers in Kerala. The company has 20
showrooms, 12 workshops, and 3 warehouses across five districts
in Kerala. It operates its dealerships under the MGF Hyundai
brand. MML is the sole dealer for HMIL spare parts and
accessories in Kerala. Its revenue was over INR300 crore in the
two fiscals ended March 31, 2017.
Outlook: Stable
CRISIL believes MML will continue to benefit from its established
position and its promoters' extensive experience in the
automotive dealership market in Kerala. The outlook may be
revised to 'Positive' if higher cash accrual, driven by growth in
revenue and profitability, and efficient working capital
management, strengthens financial risk profile, particularly
liquidity. The outlook may be revised to 'Negative' if liquidity
deteriorates because of large working capital requirement, or
debt-funded capital expenditure.
MML, set up in 1998, is an authorised dealer for HMIL in Kerala.
The company operates its showrooms under the MGF Hyundai brand.
MAHASHAKTI POLYCOAT: ICRA Moves B Rating to Not Cooperating
-----------------------------------------------------------
ICRA has moved the long-term/short-term ratings for the bank
facilities of Mahashakti Polycoat (MP) to the 'Issuer Not
Cooperating' category. The rating is now denoted as "[ICRA]B
(Stable)/[ICRA]A4 ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based-Term 2.86 [ICRA]B (Stable) ISSUER NOT
Loan COOPERATING; Rating moved
to the 'Issuer Not
Cooperating' category
Fund based-Cash 3.00 [ICRA]B (Stable) ISSUER NOT
Credit COOPERATING; Rating moved
to the 'Issuer Not
Cooperating' category
Unallocated 0.14 [ICRA]B (Stable)/[ICRA]A4
ISSUER NOT COOPERATING;
Rating moved to the 'Issuer
Not Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA,
the entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best
available/dated/limited information on the issuers' performance.
Accordingly the lenders, investors and other market participants
are advised to exercise appropriate caution while using this
rating as the rating may not adequately reflect the credit risk
profile of the entity.
Established in 2015, Mahashakti Polycoat (MP) is engaged in the
business of HDPE & PP1 woven fabric (laminated and non-laminated)
and tarpaulin in the range of 68 GSM (gram per square meter) to
250 GSM. The firm started commercial operations from April, 2015
at its manufacturing facility located in Mehsana, Gujarat having
an installed capacity of processing 1800 MT of HDPE/PP laminated
fabric per annum. The promoters of the firm have an experience of
about 10 years in HDPE/PP woven fabric industry.
NANIBALA COLD: CRISIL Reaffirms B+ Rating on INR10.5MM Loan
-----------------------------------------------------------
CRISIL Ratings has reaffirmed its 'CRISIL B+/Stable' rating on
the long-term bank facilities of Nanibala Cold Storage Private
Limited (NCSPL). The rating continues to reflect the company's
below-average financial risk profile, small scale of operations,
and susceptibility to regulatory changes regarding the cold
storage industry. These weaknesses are partially offset by the
extensive experience of the promoters in the cold storage
business.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Cash
Credit Limit 10.5 CRISIL B+/Stable (Reaffirmed)
Working Capital
Facility 1 CRISIL B+/Stable (Reaffirmed)
Key Rating Drivers & Detailed Description
Weakness
* Below-average financial risk profile: Muted accretion to
reserves will keep the networth small (INR2.2 crore as on
March 31, 2017), which will continue to constrain financial risk
profile over the medium term. However, comfortable operating
profit margin resulted in healthy debt protection metrics, with
interest coverage ratio and net cash accrual to total debt at
2.34 times and 0.64 time, respectively, for fiscal 2017.
* Susceptibility to regulatory changes and competition: The
potato cold storage industry in West Bengal is regulated by the
West Bengal Cold Storage Association. Rental rates are fixed by
the state's department of agricultural marketing, limiting
ability of players to make profit based on their strengths and
geographical advantages. Furthermore, intense competition limits
pricing power with suppliers and customers, and forces players to
offer discounts to ensure healthy utilisation of capacity.
Strengths
* Experience of the promoters: The promoters have been in the
cold storage business since 2006, and have experience of two
decades in potato trading. Over the years, they have developed
healthy relationships with traders and farmers, and strong market
understanding.
Outlook: Stable
CRISIL believes NCSPL will continue to benefit from the extensive
experience of its promoters in the cold storage business. The
outlook may be revised to 'Positive' if there is efficient
management of farmer financing and significant ramp-up in revenue
and profitability. The outlook may be revised to 'Negative' if
liquidity is constrained by delays in repayment by farmers,
lower-than-expected cash accrual, or sizeable, debt-funded
capital expenditure.
Incorporated in 1997 by Mr. Chittranjan Pal and his four sons,
NCSPL has a cold storage in Bankura (West Bengal) with three
chambers and capacity of 218,000 quintals. The company also
trades in potatoes.
PASHUPATI COTTON: ICRA Withdraws B Rating on INR19.5cr Loan
-----------------------------------------------------------
ICRA has withdrawn the long-term rating of [ICRA]B on the
INR19.50-crore cash credit facility and the INR0.28-crore term
loan facility of Pashupati Cotton Industries. ICRA has also
withdrawn the short-term rating of [ICRA]A4 on the INR0.50 crore,
non-fund based bank guarantee facility of PCI.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based-Cash
Credit 19.50 [ICRA]B (Stable); Withdrawn
Fund based-Term
Loan 0.28 [ICRA]B (Stable); Withdrawn
Non-fund Based-
Bank Guarantee 0.50 [ICRA]A4; Withdrawn
Rationale
The ratings assigned to PCI have been withdrawn at its request
based on the no-objection certificate provided by its banker.
Key rating drivers
Not applicable
Established in 1999 as a partnership firm, Pashupati Cotton
Industries ('PCI' or 'The firm') is in the business of ginning
and pressing of raw cotton and crushing of cottonseed, which is
carried out through its group concern - Madhav Oil Industries.
Its manufacturing facility is at Kundal in Kadi (Gujarat). It is
equipped with 48 ginning machines and a pressing machine with a
processing capacity of 90,000 cotton bales and 27,000 metric
tonnes (MT) of cottonseeds per annum. The firm is owned and
managed by three partners -- Mr. Saurinbhai Parikh, Mr.
Daksheshbhai Patel and Mr. Bhaveshbhai Patel -- with extensive
experience in the cotton industry.
PRABHU DAYAL: CRISIL Moves B Rating to Not Cooperating Category
---------------------------------------------------------------
Due to inadequate information, CRISIL Ratings, in line with
guidelines of Securities and Exchange Board of India (SEBI), had
migrated the rating of Prabhu Dayal Kanojiya (PDK) to 'CRISIL BB-
/Stable/CRISIL A4+/Issuer not cooperating'. However, the
management subsequently started sharing the requisite
information, necessary for carrying out a comprehensive review of
the rating. Consequently, CRISIL is migrating the ratings on the
bank facilities of PDK from 'CRISIL BB-/Stable/CRISIL A4+/Issuer
Not Cooperating' to 'CRISIL B/Stable/CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 6 CRISIL A4 (Migrated from
'CRISIL A4+' Issuer Not
Cooperating)
Cash Credit 1 CRISIL B/Stable (Migrated
from 'CRISIL BB-/Stable'
Issuer Not Cooperating)
Proposed Long Term 2 CRISIL B/Stable (Migrated
Bank Loan Facility from 'CRISIL BB-/Stable'
Issuer Not Cooperating)
The downgrade in rating reflects deterioration in business risk
profile because of slow ramp up of revenues resulting in modest
scale of operations. The downgrade also factors weak financial
risk profile and intense working capital requirements.
The rating continues to reflect slow ramp up in revenue amid
intense competition, below-average financial risk profile and
large working capital requirements. These weaknesses are
partially offset by the experience of promoters in the civil
construction industry, their funding support, and healthy order
flow.
Key Rating Drivers & Detailed Description
Weaknesses
* Slow ramp up in revenue amid intense competition: The firm
reported revenue of INR1.40 crore for fiscal 2017 due to low
conversion of tenders and delay in pending certification from
customer. Although, the firm is expected to report revenue of
INR27.57 crores in fiscal 2018, the scale continues to remain
modest. Moreover, the firm is exposed to intense competition in
the construction industry.
* Below-average financial risk profile: Networth stood at
INR10.58 crore as on March 31, 2017, due to low scale of
operations resulting in lower accretion to reserve. Total outside
liabilities to tangible networth and gearing ratios were moderate
at 2.27 times and 2.11 times, respectively, as on March 31, 2017.
Interest coverage and net cash accrual to total debt ratios were
weak at 1.1 times and 0.01 time, respectively, in fiscal 2017.
The financial profile is expected to remain below-average due to
high working capital requirements.
* Intense working capital cycle: The company has extended working
capital cycle due to high inventory. The company did not receive
payments for the tenders executed, resulting in high capital work
in progress. The gross current asset days are expected to
stabilise with ramp up in scale but will continue to remain high.
Strengths
* Extensive experience of promoters, their fund support and
healthy order book: Promoters' experience of over four decades
has helped establish healthy relations with customers and
suppliers. The firm has been able to build healthy order flow
reflected in outstanding order book of INR84 crore as on
October 31, 2017, that are to be executed over the next two
years. Besides these promoters have provided continuous support
in form of unsecured loans.
Outlook: Stable
CRISIL believes PDK will continue to benefit over the medium term
from the experience of the promoters. The outlook may be revised
to 'Positive' if substantial increase in revenue, profitability,
cash accrual, or capital infusion strengthens financial risk
profile and liquidity. Conversely, the outlook may be revised to
'Negative' if lower-than-expected revenue or profitability, or
stretch in working capital cycle weakens financial risk profile
and liquidity.
PDK, set up in 1972 as a proprietorship concern of Mr. Prabhu
Dayal Kanojiya, executes construction of buildings, sewage
treatment plants and drainage systems for Public Works Department
of Rajasthan and Rajasthan Housing Board and sub-contracting for
other private players.
PREMIER ALCOBEV: CRISIL Raises Rating on INR51.7MM Loan to B+
-------------------------------------------------------------
CRISIL Ratings has upgraded its rating on the long-term bank
facilities of Premier Alcobev Private Limited (PAPL) to 'CRISIL
B+/Stable' from 'CRISIL D' and assigned the rating on short term
facilities at 'CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 3 CRISIL A4 (Assigned)
Cash Credit 19 CRISIL B+/Stable (Upgraded
from 'CRISIL D')
Term Loan 51.7 CRISIL B+/Stable (Upgraded
from 'CRISIL D')
The upgrade factors in confirmation that CRISIL has obtained from
lenders that the company's account has been regular since August
2017 with regular servicing of debt.
The rating reflects PAPL's modest liquidity, vulnerability to
changes in government policy and the regulated nature of prices
of end product and key raw materials. These rating weaknesses are
partially offset by strong market position in supplying extra-
neutral alcohol (ENA) in Himachal Pradesh due to low competition.
The distillery has been running at nearly full capacity, with
around 50-60% utilization of bottling capacity in the first half
of fiscal 2018 leading to revenue growth of 50% over the
corresponding period in the previous year. Operating profit
before depreciation interest and taxes (OPBDIT) margins have been
stable around 15% in the first half of fiscal 2018. Doubling of
bottling capacity to 200,000 cases per month at its existing
location and greenfield expansion of 100,000 cases per month at
Ajmer, Rajasthan should also strengthen business risk profile.
The capex of INR26 crores also includes setting up of crude
protein manufacturing plant, in Kangra, Himachal Pradesh.
Analytical Approach
For arriving at the rating, CRISIL has considered the standalone
business and financial risk profile of PAPL. Unsecured loans of
INR12 crores have been treated as 75% equity and 25% as debt.
This is because, the loans will remain in the business over the
next five years, are subordinated to bank debt, and the interest
charged at rates lower than the market rate is to be ploughed
back into the business.
Key Rating Drivers & Detailed Description
Weakness
* Modest liquidity: Liquidity is constrained by almost full
utilization of bank lines, and limited headroom in cash accruals
to service debt and capex. However, enhancement sanctioned on
working capital limit to INR19 crores should ease some pressure
on liquidity. The capex is to be funded by capital support from
the promoters and by additional term loans.
* Vulnerability to changes in government policy, and to the
regulated nature of prices of end-products and key raw materials:
Regulations for liquor vary from state to state with respect to
distribution, registration, taxation, and pricing. Key markets
for the company are Delhi, Punjab, Haryana, Uttaranchal, Himachal
Pradesh, and Rajasthan. While Delhi and Rajasthan are hybrid
markets with government having partial control, Punjab and
Haryana are auction markets.
Strengths
* Strong market position in the ENA segment: Competition in the
grain-based spirits and ENA segments in Himachal Pradesh is low,
and PAPL is the largest distilleries in the state. Despite
absence of a long-term contract with customers, demand is will
likely, remain strong and steady. Himachal Pradesh is a net
importer of spirits from other states, which displays a high
demand and supply gap in ENA.
Outlook: Stable
CRISIL believes that ramp up in capacities should help further
improve PAPL's operating performance.
Upside scenario
* Better than estimated operational performance, leading to
higher head room towards servicing of debt
* Further growth in market position in the IMFL segment.
Downside scenario
* Weak operational performance, leading to deterioration in debt
protection metrics
* Significant debt-funded capex
* Any regulatory shift that can impact operations
PAPL, promoted equally and jointly by Mr. Vikas Gupta and the
Almondz group (represented by Mr. Navjeet Singh Sobti), has set
up a distillery complex, comprising a 45 kilolitre per day grain-
based distillery and a modern bottling plant, with a capacity of
100,000 cases per month (additional 100,000 cases to be
commissioned soon) for IMFL and country liquor in Himachal
Pradesh. It has a co-generation unit of 1.5 megawatt to meet its
power requirement.
The company has set up a bottling plant for IMFL to be packaged
in Aseptic Brick Pack of 1,00,000 cases per month in Ajmer,
Rajasthan for IMFL (cheap category liquor)
RNB INTERNATIONAL: ICRA Moves B Rating to Not Cooperating
---------------------------------------------------------
ICRA has moved the rating for the bank facilities of RNB
International Private Limited (RNB) to the 'Issuer Not
Cooperating' category. The rating is now denoted as "[ICRA]B
(Stable) ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Fund 11.00 [ICRA]B (Stable) ISSUER NOT
based-Cash Credit COOPERATING; Rating moved
to the 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA,
the entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best available/dated/
limited information on the issuers' performance. Accordingly the
lenders, investors and other market participants are advised to
exercise appropriate caution while using this rating as the
rating may not adequately reflect the credit risk profile of the
entity.
RNB was incorporated in 2003 and is engaged in market research
services, wool trading and publication business. While the
company is engaged in market research services since inception,
it entered into wool trading business in FY 2012. The wool
trading business was earlier carried out in other group companies
- RNB Overseas Private Limited and RNB Mercantile Pvt. Ltd.
Within market research, the company assists its client in
research design and engaged in data collection & tabulation
across various countries, industries and domains. The company
undertakes both single and multiple country research and its
major clientele are based out of USA, UAE and Europe. RNB
International is also engaged in publication and marketing of
books authored by Mr. Ram Narayan Bajaj (father of Mr. Vikram
Kumar Bajaj), mainly motivational books; however this activity is
carried out on a small scale.
S. M. TELEDIRECT: CRISIL Assigns B+ Rating to INR15MM Loan
----------------------------------------------------------
CRISIL Ratings has assigned its 'CRISIL B+/Stable' rating to the
long-term facilities of S. M. Teledirect Private Limited (SMTPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 10 CRISIL B+/Stable
Electronic Dealer
Financing Scheme(e-DFS) 15 CRISIL B+/Stable
The rating reflects the company's low operating profitability,
average financial risk profile and exposure to principal
concentration risk. These weaknesses are partially offset by the
extensive experience of its promoters.
Key Rating Drivers & Detailed Description
Weaknesses
* High principal concentration risk: As 100% of revenue accrues
from trading of Samsung mobiles and accessories procured from
Shree Sant Kripa Appliances Pvt Ltd, supplier concentration risk
is high.
* Low operating margin: Operating margin has remained at 1.5-1.7%
in the three years through fiscal 2017 on account of limited
value-addition in the trading business.
* Average financial risk profile: Total outside liabilities to
adjusted networth ratio was moderate at 3.0 times as on March 31,
2017, with modest networth of INR8.9 crore and average interest
coverage ratio of 1.32 times in fiscal 2017.
Strength
* Extensive experience of the promoters: Benefits derived from
the promoters' experience of more than a decade and healthy
relations with suppliers and customers should continue to
strengthen business.
Outlook: Stable
CRISIL believes SMTPL will continue to benefit from the extensive
experience of its promoters. The outlook may be revised to
'Positive' if capital infusion and better-than-expected revenues
and profitability strengthen financial risk profile. The outlook
may be revised to 'Negative' if low profitability or revenues or
stretch in working capital cycle, resulting in lower-than-
expected cash accrual weaken financial risk profile.
Set up in fiscal 2008, as a proprietorship concern by Mr. Kunal
Agarwal, SMTPL, was reconstituted into a private limited company
in fiscal 2010. The company trades Samsung mobile and
accessories. Ms Gunjan Goel, Mr. Prashant Goel, Mr. Kunal
Agarwal, Mr. Arvind Kumar manage operations.
SAJEESH K: CRISIL Lowers Rating on INR7MM Cash Loan to D
--------------------------------------------------------
CRISIL Ratings has downgraded its ratings on the bank facilities
of Sajeesh k Lukose (SKL) to 'CRISIL D/CRISIL D' from 'CRISIL
B/Stable/CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee .6 CRISIL D (Downgraded from
'CRISIL A4')
Cash Credit 7.0 CRISIL D (Downgraded from
'CRISIL B/Stable')
Proposed Long Term
Bank Loan Facility .8 CRISIL D (Downgraded from
'CRISIL B/Stable')
Term Loan .6 CRISIL D (Downgraded from
'CRISIL B/Stable')
The downgrade reflects instances of delay by SKL in servicing its
debt, on account of weak liquidity.
SKL also has large working capital requirement. However, it
benefits from the extensive experience of its promoter in the
civil construction business.
Key Rating Drivers & Detailed Description
Weakness
* Large working capital requirement: The firm had gross current
assets of 418 days as on March 31, 2016. It takes 5-6 months to
realise receivables from the Kerala Public Works Department
(PWD), on account of the government department's stretched
liquidity.
Strength
* Extensive experience of the promoter: The promoter Mr. Sajeesh
K Lukose has been executing civil contracts in the building
construction segment for 10 years. The firm is an A-Class
contractor for Kerala PWD, and has secured repeat orders from the
state government.
Set up as a proprietary concern in 2006, SKL is a Kerala-based
civil contractor, and undertakes building construction projects
for the Kerala PWD.
SHIMERA PROJECT: CRISIL Withdraws B- Rating on INR2.90MM Loan
-------------------------------------------------------------
CRISIL Ratings has reaffirmed its ratings on the bank facilities
of Shimera Project Lighting Private Limited (SPLPL) and
subsequently withdrawn the ratings at the company's request and
on receipt of no-objection certificate from the bankers. The
withdrawal is in line with CRISIL's policy on withdrawal of bank
loan ratings.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 0.75 CRISIL B-/Stable (Rating
reaffirmed and Withdrawal)
Loan Against Property 2.90 CRISIL B-/Stable (Rating
reaffirmed and Withdrawal)
Overdraft .38 CRISIL A4 (Rating reaffirmed
and Withdrawal)
Proposed Long Term 2.47 CRISIL B-/Stable (Rating
Bank Loan Facility reaffirmed and Withdrawal)
SPLPL, based in Mumbai, was incorporated in 2007 and is promoted
by Mr. Prakash Chhabria and his wife Ms. Sonia Chhabria. It
trades in lights and light fittings, and has showrooms in Mumbai
and Delhi.
SHRI LAKSHMI: Ind-Ra Upgrades Issuer Rating to 'B'/Stable'
----------------------------------------------------------
India Ratings and Research (Ind-Ra) has upgraded Shri Lakshmi
Ganapathy Industries Pvt Ltd's (SLGIPL) Long-Term Issuer Rating
to 'IND B' from 'IND B-(ISSUER NOT COOPERATING)'. The Outlook is
Stable. The instrument-wise rating action is:
-- INR215 mil. (increased from INR165 mil.) Fund-based working
capital limit upgraded with IND B/Stable rating.
KEY RATING DRIVERS
The upgrade reflects an improvement in SLGIPL's liquidity to a
comfortable level, indicated by an average fund-based working
capital limit utilisation of 88% for the 12 months ended December
2017 as against the full utilisation during 12 months ended
February 2015.
The ratings continue to benefit from over two decades of
experience of SLGIPL's promoters in the trading business.
The ratings, however, remain constrained by the company's
moderate scale of operations, weak EBITDA margin and moderate
credit metrics owing to the trading nature of business. In FY17,
revenue was INR2,270 million (FY16: INR2,744 million), EBITDA
margin was 1.6% (1.5%), interest coverage (operating EBITDA/gross
interest expense) was 1.2x (1.7x) and net leverage (total
adjusted net debt/operating EBITDAR) was 11.6x (10.5x). The
decline in revenue was due to the completion of an agreement with
ITC Limited for the FMCG distribution wing of the business. The
deterioration in interest coverage and net financial leverage was
due to a rise in gross interest expense and a decline in
operating EBITDA, respectively.
RATING SENSITIVITIES
Negative: Any further deterioration in the scale of operations
and credit metrics could lead to a negative rating action.
Positive: Any improvement in the scale of operations and credit
metrics could lead to a positive rating action.
COMPANY PROFILE
Incorporated in 1995, SLGIPL is engaged in trading of paper
products and has solar power plants in Andhra Pradesh. Until
December 2016, the company was involved in the trading of FMCG
goods for ITC Limited. It is managed by Mr. K Goutham and his
wife Mrs Kodali Sajni. Its registered office is in Hyderabad.
SLC PROJECTS: CRISIL Moves B- Rating to Not Cooperating Category
---------------------------------------------------------------
Due to inadequate information, CRISIL Ratings, in line with
Securities and Exchange Board of India guidelines, had migrated
the rating on bank facilities of SLC Projects Private Limited
(SLCPL) to 'CRISIL BB-/Stable/CRISIL A4+/Issuer Not Cooperating'.
However, the management subsequently started sharing the
information necessary for carrying out a comprehensive review of
the rating. Consequently, CRISIL is migrating the rating from
'CRISIL BB-/Stable/CRISIL A4+/Issuer Not Cooperating' to 'CRISIL
B-/Stable/CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 12 CRISIL A4 (Migrated from
'CRISIL A4+' Issuer Not
Cooperating)
Cash Credit 18 CRISIL B-/Stable (Migrated
from 'CRISIL BB-/Stable'
Issuer Not Cooperating)
The downgrade reflects tight liquidity, marked by fully utilised
bank limit, low cash accrual and weak financial risk profile.
CRISIL's ratings continue to reflect the working capital
intensity in operations, intense competition and tender-based
sales in the construction industry. These weaknesses are
partially offset by extensive experience of the partners in the
civil construction industry.
Key Rating Drivers & Detailed Description
Weaknesses
* Weak financial risk profile: Networth of INR8.24 crore, against
total debt of INR43.26 crore, led to gearing of around 5.25 times
as on March 31, 2017. Debt protection metrics were below-average,
with interest coverage and net cash accrual to adjusted debt
ratios of 1.69 times and 0.02 time, respectively, in fiscal 2017.
* Working capital intensity in operations: Operations should
remain working capital intensive, as reflected in gross current
assets of 133 days as on March 31, 2017, and 133-190 days for the
past three years, driven by high work-in-progress inventory of 94
days and receivables of 39 days. Working capital intensity is
accentuated by requirement of earnest money deposits and bank
guarantees (margin money to the bank) to the client and retention
money withheld by the client for a contract awarded. Although
earnest money deposits are refunded once orders are allotted, the
ongoing bidding activity leads to continuous requirement of
funds.
* Intense competition and tender-based sales in the construction
industry: As sales are almost entirely tender-based, revenue
depends on the ability to bid successfully. Profitability is also
subject to pricing, availability of labour, machinery
mobilisation, weather conditions, and geological conditions.
Construction and electrical works industry is fragmented, with
large companies such as Larsen & Toubro Ltd operating in several
sectors, including roads, hydel projects, thermal plants, and
urban infrastructure, and smaller players specialising in one or
two business segments. Similarly, specialisation only in civil,
electrical, and mechanical works related to defence projects and
focus on small projects render SLCPL susceptible to competition
from large, and small, unorganised players, affecting
profitability.
Strengths
* Extensive experience of the promoter: Longstanding presence of
the promoter, strong execution capabilities, and established
relationships with raw material suppliers for defence-related
projects and labour contractors will continue to support the
business risk profile. These factors have helped the company seek
favourable terms of credit and post revenue of INR90.12 crore in
fiscal 2017, further aided by new orders, from Director General
Naval Projects.
Outlook: Stable
CRISIL believes SLCPL will continue to benefit from the extensive
experience of its promoter. The outlook may be revised to
'Positive' in case of a substantial and sustained improvement in
revenue and profitability, or considerable increase in networth
on the back of sizeable equity infusion. The outlook may be
revised to 'Negative' in case of a steep decline in
profitability, or if a large capital expenditure or a stretched
working capital cycle, weakens the capital structure.
SLCPL, set up as a partnership firm by Mr. P Subbaraju in 1974,
was reconstituted as a private limited company in 2004. The
company undertakes construction, electrical, and mechanical works
for government defence-related projects. It is based in
Visakhapatnam.
SLCPL reported a profit after tax of INR0.58 crore on revenue of
INR90.12 crore in fiscal 2017, against INR2.34 crore and INR95.57
crore, respectively, in fiscal 2016.
SRI NOMULA: CRISIL Reaffirms B Rating on INR7MM Cash Loan
---------------------------------------------------------
CRISIL Ratings has reaffirmed its rating on the long term bank
facilities of Sri Nomula Brothers (SNB) at 'CRISIL B/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 7 CRISIL B/Stable (Reaffirmed)
The rating continues to reflect its modest scale of operations in
a highly fragmented industry and vulnerability to changes in
government policies. Rating also factors in weak financial risk
profile because of modest net worth, high TOL/ANW and modest
interest coverage ratio. These rating weaknesses are partially
offset by the extensive experience of its promoter in the cotton
trading and ginning industry.
Key Rating Drivers & Detailed Description
Weakness
* Modest scale of operations in fragmented industry: The cotton
ginning and trading industry is largely unorganised with various
players having small capacity. This has led to a highly
fragmented industry structure with intense competition among the
players. Further, modest scale of operations as reflected in
modest revenues of INR51.8 crore in Fiscal 2017 in fragmented
industry has led to limited pricing and bargaining power with the
firm.
* Susceptibility to unfavourable government policies: The
Government of India (GoI) fixes a Minimum Support Price (MSP) for
every crop year. This helps the cotton farmers sell their produce
at the MSP and avoid distress sales. Further, government's
restriction and limits on exports also affect the cotton and yarn
price. Any abrupt changes in regulations can lead to distortion
of market prices and affect the profitability of various players
in the cotton value chain, including SNB.
* Weak Financial risk profile: Financial risk profile is marked
by modest net worth, high TOL/ANW and modest interest coverage
ratio. Interest coverage and net cash accruals to total debt
(NCATD) ratios were at around at 1.35 times and 2 per cent, for
2016-17. The debt protection metrics are expected to remain
modest over the medium term on account of high dependence on bank
borrowings for working capital and small accretions.
Furthermore TOL/ANW ratio was high at around 7.6 times as on
March 31, 2017, which is expected to remain so over the medium
term
Strength
* Extensive experience of the promoters: The company was promoted
by Mr. Subba Rao, who has experience of three decades in the
cotton ginning and trading business. With his extensive
experience and customer contacts gained over this period, he has
been able to ramp up operations in SNB over the year. He has
built healthy relationship with farmers and agents and has been
instrumental in the steady growth of the firm since inception.
CRISIL believes that SNB would continue to benefit from the
extensive experience of its promoter.
Outlook: Stable
CRISIL believes that SNB will continue to benefit over the medium
term from its promoter's extensive experience. The outlook may be
revised to 'Positive' if the company's revenues and profitability
increase substantially leading to an improvement in its financial
risk profile or in case of significant infusion of capital
resulting in an improvement in SNB's capital structure.
Conversely, the outlook may be revised to 'Negative' if the
company undertakes aggressive, debt-funded expansions, or if its
revenues and profitability decline substantially leading to
deterioration in its financial risk profile.
Established in 2008, SNB is engaged in ginning and trading of raw
cotton and cotton lints respectively. The firm is promoted by Mr.
Subba Rao who is currently managing the day-to-day operations.
The firm is based out of Guntur.
SRI SATHYA: CRISIL Reaffirms B Rating on INR3MM Cash Loan
---------------------------------------------------------
CRISIL Ratings has reaffirmed its 'CRISIL B/Stable/CRISIL A4'
ratings on the bank facilities of Sri Sathya Exim (SSE).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 3 CRISIL B/Stable (Reaffirmed)
Letter of Credit 5 CRISIL A4 (Reaffirmed)
The ratings continue to reflect the firm's small scale of
operations in the intense competitive metallurgical industry and
its below-average financial risk profile. These weaknesses are
partially offset by the extensive experience of the proprietor in
the metallurgical industry.
Key Rating Drivers & Detailed Description
Weaknesses
* Small scale of operations in the intensely competitive
metallurgical industry: The firm's scale of operations reflected
in revenue of INR19.3 crore in fiscal 2017, is constrained by
intense competition in the metallurgical industry. The industry
has low entry barriers due to minimal capital requirement,
resulting in presence of several unorganised players.
* Below-average financial risk profile: The financial risk
profile is constrained by small net worth of INR3.8 crore as on
March 31, 2017. Debt protection metrics remains weak, with
interest coverage and net cash accrual to total debt ratio of
1.55 times and 0.18 time respectively in fiscal 2017.
Strength
* Extensive industry experience of the proprietor: SSE proprietor
Mr. Sathya Seelan has experience over a decade in the industry
and has built healthy relationships with clients, which helps the
firm win orders.
Outlook: Stable
CRISIL believes SSE will continue to benefit from its
proprietor's extensive industry experience. The outlook may be
revised to 'Positive' if revenue and profitability increase
substantially, thus strengthening financial risk profile. The
outlook may be revised to 'Negative' if financial risk profile
weakens due to low cash accrual or if large debt-funded capital
expenditure constrains liquidity.
Setup in 2007 by Mr. Sathya Seelan, SSE processes and trades in
iron and steel scrap. Its unit is in Gumidipoondi (Tamil Nadu).
SSPDL LIMITED: Ind-Ra Affirms 'BB' Issuer Rating, Outlook Stable
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed SSPDL Limited's
(SSPDLL) Long-Term Issuer Rating at 'IND BB'. The Outlook is
Stable.
KEY RATING DRIVERS
The affirmation reflects continued delays in the construction of
SSPDLL's major ongoing phase (first; construction of 1,155
houses) of BHEL Retreat Project in Hyderabad. The first phase was
initially scheduled to be completed in August 2016.
Under the first phase of the project, 84.6% of the total
construction work was completed as of November 2017. The phase is
likely to be completed in March 2018. Under the second phase,
75.9% of the work has been completed. This phase is likely to be
completed by end-September 2018. Under the third and fourth
phases of the project, 40% of the work has been completed. The
phases are also likely to be completed in December 2018.
The rating is constrained by the low cash flow generated from
other two almost completed projects in Chennai (Lakewood Project
and Mayfair Project), where it generated 46.3% and 66.4%
respectively till November 2017.
However, the rating continues to be supported by the promoters'
experience of more than two decades in the real estate industry.
Also, the company states that 92.7% of the total saleable area of
113,410 square feet under the second phase of BHEL Retreat
Project was booked as of November 2017.
RATING SENSITIVITIES
Negative: Any slowdown in bookings below Ind-Ra's projections
leading to any cash flow shortfall could be negative for ratings.
Positive: Timely completion of the ongoing projects within the
projected cost outlay could be positive for the ratings.
COMPANY PROFILE
Incorporated in 1994, SSPDLL is a real estate developer. It is
listed on the Bombay Stock Exchange.
SSPDL is executing three residential projects BHEL Retreat in
Hyderabad and Lakewood and Mayfair in Chennai.
STAYWELL FORMULATION: CRISIL Assigns D Rating to INR7MM Loan
------------------------------------------------------------
CRISIL Ratings has assigned its 'CRISIL D' rating to the long-
term bank facilities of Staywell Formulation Private Limited
(SFPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 3 CRISIL D
Cash Credit 7 CRISIL D
Proposed Long Term
Bank Loan Facility 2 CRISIL D
The rating reflects instances of delay in servicing term debt;
the delays were caused by stretched liquidity, following low
production and renovation phase in operations. Financial risk
profile is weak, constrained by small networth, high gearing and
below-average debt protection metrics. However, SFPL benefits
from its promoters' considerable experience in the pharmaceutical
industry.
Key Rating Drivers & Detailed Description
Weakness
* Instances of delay in term debt repayment: Insufficient cash
accrual, due to technology upgrade being undertaken by the new
promoters, and low capacity utilisation have led to delay in
servicing of debt.
* Weak financial risk profile: Financial risk profile is weak,
with small networth of INR3.6 crore and sizeable debt of INR9.56
crore, with high gearing of around 2.65 times as on March 31,
2017.
Strength
* Promoters experience in the industry: The promoters' family has
been in the line of business since 1991 through their other
concern. Benefits from their long presence and the group's
established presence in the region should continue to support
SFPL's business risk profile.
SFPL was incorporated in 2009 and acquired in 2015 by Mr. Suresh
Lal Santuka and his family.The company undertakes contract
manufacturing of pharmaceuticals like tablets, injections,
capsules and syrups. The unit is in Roorkee (Uttrakhand).
SWASHRYEE MAHILA: ICRA Withdraws B+ Rating on INR10cr Loan
----------------------------------------------------------
ICRA has withdrawn the rating of [ICRA]B+ outstanding on the
INR10.00 crore proposed bank lines of Swashryee Mahila Sakh
Sahkari Sanstha Maryadit (SMSSSM).
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Proposed bank lines 10.00 [ICRA]B+(Stable); rating
withdrawn
Rationale
The rating is withdrawn at the request of the company as it has
not raised debt against the proposed bank lines. The rating
withdrawal is in line with ICRA's policy on withdrawal of
ratings.
Swashryee Mahila Sakh Sahkari Sanstha Maryadit (SMSSM) is a
credit co-operative society registered under the M.P. Co-
operative Society (Amendment) Act, 2012 and the M.P. Co-operative
Society Rules, 1962. The society was set up by Mrs. Manorama
Joshi in 1989 with the objective of empowering women engaged in
unorganised sectors to be self-sufficient and independent.
The society encourages its members to save through its various
schemes, and also provides loans for various income generating
activities. It had a loan portfolio of nearly INR10 crore as on
March 31, 2017, including loans for small businesses (52% of the
portfolio), seasonal loan (11%), education loan (7%), housing
loan (12%), and agriculture & cattle loan (11%).
SWIM CERAMIC: CRISIL Moves B+ Rating to Not Cooperating Category
---------------------------------------------------------------
CRISIL Ratings has been consistently following up with Swim
Ceramic for obtaining information through letters and emails
dated December 22, 2017 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 1 CRISIL A4 (Issuer Not
Cooperating; Rating Migrated)
Cash Credit 3 CRISIL B+/Stable (Issuer Not
Cooperating; Rating Migrated)
Proposed Long Term
Bank Loan Facility 1.11 CRISIL B+/Stable (Issuer Not
Cooperating; Rating Migrated)
Term Loan 4.89 CRISIL B+/Stable (Issuer Not
Cooperating; Rating Migrated)
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 Swim Ceramic, which restricts
CRISIL's ability to take a forward looking view on the entity's
credit quality. CRISIL believes information available on Swim
Ceramic is consistent with 'Scenario 1' outlined in the
'Framework for Assessing Consistency of Information with CRISIL
BB' rating category or lower'.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL has migrated the rating on bank
facilities of Swim Ceramic to 'CRISIL B+/Stable/CRISIL A4 Issuer
not cooperating'.
Setup in 2013, Swim Ceramic was founded by the Morbi, Gujarat-
based Viramgama family. It manufactures ceramic wall tiles at its
facilities in Morbi.
VFIVE HOMES: CRISIL Moves B Rating to Not Cooperating Category
--------------------------------------------------------------
CRISIL Ratings has been consistently following up with VFive
Homes Private Limited (V Five) for obtaining information through
letters and emails dated November 22, 2017 and December 11, 2017
among others, apart from telephonic communication. However, the
issuer has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 10 CRISIL B/Stable (Issuer Not
Cooperating; Rating Migrated)
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 VFive Homes Private Limited.,
which restricts CRISIL's ability to take a forward looking view
on the entity's credit quality. CRISIL believes information
available on VFive Homes Private Limitedis consistent with
'Scenario 2' outlined in the 'Framework for Assessing Consistency
of Information with 'CRISIL BBB category or lower'.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL has migrated the rating on bank
facilities of VFive Homes Private Limited. to CRISIL B/Stable
Issuer not cooperating'.
V Five was originally established as a partnership firm, V Five
Builders and Developers, on July 16, 2014; the firm was
reconstituted as a private limited company with the current name
on April 1, 2016. The company is promoted by Mr. Karthikeyan Unni
(managing director), Mr. Ravikumar, Mr. Ani Kareem, Mr. Bala
Chandran, and Mrs Jaleela Maheen; all five are directors in the
company. V Five, located in Trivandrum, has completed three
projects, is currently undertaking four residential real estate
projects, and is expected to launch three new residential real
estate development projects.
VGN HOMES: CRISIL Lowers Rating on INR146MM LT Loan to D
--------------------------------------------------------
CRISIL Ratings has downgraded its ratings on the bank facilities
of VGN Homes Private Limited (VHPL) to 'CRISIL D/CRISIL D' from
'CRISIL B+/Stable/CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bill Purchase 1 CRISIL D (Downgraded from
'CRISIL A4/Issuer Not
Cooperating')
Long Term Loan 146 CRISIL D (Downgraded from
'CRISIL B+/Stable/Issuer
Not Cooperating')
Overdraft 14 CRISIL D (Downgraded from
'CRISIL B+/Stable/Issuer
Not Cooperating')
Proposed Long Term 14 CRISIL D (Downgraded from
Bank Loan Facility 'CRISIL B+/Stable/Issuer
Not Cooperating')
The downgrade reflects the company's delays in servicing loan
because of stretched liquidity.
VHPL has an average financial risk profile, and faces geographic
concentration risk and intense competition. However, it benefits
from its established brand in Chennai and its promoters'
extensive industry experience.
Key Rating Drivers & Detailed Description
* Delays in servicing debt because of weak liquidity: The
downgrade reflects the company's delays in servicing loan because
of stretched liquidity. The stretch in liquidity is due to
sluggish demand for its projects because of weak market scenario
and delay in collection of payments from customers.
Weaknesses
* Average financial risk profile: VHPL's financial risk profile
is constrained by weak debt protection measures, because of large
debt contracted for projects. Interest coverage and net cash
accrual to total debt ratios were at 1.27 times and 3%,
respectively, for fiscal 2017. Networth was adequate at INR200
crore and gearing was moderate at 1.2 times, as on March 31,
2017.
* Exposure to geographic concentration risk and intense
competition: VHPL's projects are concentrated in and around
Chennai. The company has large land banks in areas such as
Mahalakshmi Nagar, Perumalagaram, Ambattur, and Nolambur, which
are fast growing suburban areas in Chennai. Over the past three
years, most real estate developers have focused on affordable
housing because of the slowdown in the real estate segment,
intensifying competition for VHPL. Furthermore, there has been a
correction in suburban real estate rates, putting pressure on the
margins of all players.
Strength
* Established brand in Chennai and promoters' extensive industry
experience: VHPL is among the largest and oldest real estate
players in Chennai, with presence of more than two decades. The
company, along with its sister concerns (entities where the
promoters are partners/shareholders), has a large land bank in
and around Chennai for property development. It has been
targeting the affordable housing segment and plot development in
suburban areas, enhancing the saleability of its projects. The
promoters have an established track record, having developed more
than 1450 housing units. The company enjoys healthy brand recall
in the Chennai realty segment.
VHPL, incorporated in 2004, develops residential apartments and
houses in Chennai and its suburbs. The company is part of the VGN
group set up by Mr. V Guruswamy Naidu in 1942. VHPL is currently
managed by Mr. Devadoss, grandson of Mr. V Guruswamy Naidu.
VINDHYA CEREALS: CRISIL Cuts Rating on INR32MM Cash Loan to D
-------------------------------------------------------------
CRISIL Ratings has downgraded its rating on the bank loan
facilities of Vindhya Cereals Private Limited (VCPL) to 'CRISIL
D' from 'CRISIL B/Stable'. The downgrade reflects delays in
servicing term debt owing to weak liquidity caused by stretch
working capital cycle.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 32 CRISIL D (Downgraded from
'CRISIL B/Stable')
Proposed Long Term
Bank Loan Facility 1.62 CRISIL D (Downgraded from
'CRISIL B/Stable')
Term Loan 4.38 CRISIL D (Downgraded from
'CRISIL B/Stable')
Key Rating Drivers & Detailed Description
Weakness
* Delay in debt servicing: The company has delayed on the
installments of its term loans due to its weak liquidity. The
downgrade reflects delays in servicing term debt owing to weak
liquidity caused by stretch working capital cycle
Strengths
* Diversified customer base and established network of
distributors: Despite commencing operations only in June 2013,
the company has managed to establish a diversified customer base.
Around 70% of its produce is sold in the domestic market, while
the balance is sold to export houses, based in Delhi and Mumbai.
VCPL, established in 2009 by Mr. Kamlesh Kumar Argal, mills and
processes basmati rice. The manufacturing facility is at
Obedullaganj in Raisen, Madhya Pradesh.
VISION PARENTERAL: CRISIL Assigns B Rating to INR8MM LT Loan
------------------------------------------------------------
CRISIL Ratings has assigned its 'CRISIL B/Stable' rating to the
long-term bank facility of Vision Parenteral Private Limited.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 0.8 CRISIL B/Stable
Long Term Bank Facility 8 CRISIL B/Stable
CRISIL's rating reflects modest scale and working capital
intensity in operations, intense competition leading to low
operating margin, and weak financial risk profile. These rating
strengths are partially offset the extensive experience of VPPL's
promoters in the pharmaceutical industry.
Key Rating Drivers & Detailed Description
Weaknesses:
* Weak financial risk profile: Financial risk profile is marked
by small networth of around INR2.79 crore as on March 31, 2017.
Debt protection metrics were weak, with interest coverage ratio
of 0.12 time for fiscal 2017, and may remain constrained by small
scale of operations and low operating margin.
* Modest scale of operations: As operations are still at a
nascent stage, the scale remains modest, as reflected in revenue
of around INR3 crore in fiscal 2017. Moreover, the company only
caters to demand from West Bengal, Bihar and Uttar Pradesh, and
thus, has limited geographic reach.
* Working capital intensity in operations: Operations are highly
working capital intensive, with gross current assets of around
221 days as on March 31, 2017, driven by sizeable inventory of
123 days.
* Intense competition leading to low operating margin: The Indian
bulk drugs/formulations industry has several standalone
manufacturers, with most formulators also backward integrated
into bulk drug production. Larger players, with the ability to
develop complex products, have been able to insulate their margin
from pricing pressures. However, stiff competition may continue
to constrain profitability of players like VPPL.
Strength:
* Extensive experience of the promoter in the bulk
drugs/formulations industry: The promoter, Mr. Sandeep Kumar
Agarwal, has over two decades of experience in the pharmaceutical
industry, through another proprietorship concern, M/s Sumit
Pharmaceutical, which has been engaged in the pharma trading
business since 1994. Backed by his longstanding presence, VEPL
has also started manufacturing intravenous fluids recently.
Outlook: Stable
CRISIL believes VPPL will continue to benefit from the extensive
experience of its promoters, and established relationships with
key suppliers. The outlook may be revised to 'Positive' if an
improvement in profitability and cash accrual, strengthens the
financial risk profile. The outlook may be revised to 'Negative'
if decline in revenue, because of low cash accrual or any large
capital expenditure, weakens the financial risk profile.
VPPL was set up in June 2011, and began commercial operations
only 2016. The company manufactures high-quality healthcare
products at Gorakhpur, Uttar Pradesh. The plant is equipped with
modern facilities, as per WHO-GMP norms, for manufacturing
sterile parenteral preparations, life-saving medicines and
hospital products. The company has a production capacity of 50000
units of IV, per day.
Intravenous fluids are manufactured in polyethylene containers
under aseptic conditions using the latest, state-of-the-art FFS
technology from Weiler Engineering Inc, USA and glass bottles
from the fully automatic line from Pharmalab India Pvt Ltd.
=================
I N D O N E S I A
=================
SAWIT SUMBERMAS: Moody's Assigns B1 Rating to New Unsecured Bonds
-----------------------------------------------------------------
Moody's Investors Service has assigned a backed senior unsecured
bond rating of B1 to the proposed senior unsecured bonds to be
issued by SSMS Plantation Holdings Pte. Ltd., a wholly owned
subsidiary of Sawit Sumbermas Sarana Tbk (P.T.) (SSMS, B1
stable).
The proposed bonds will be unconditionally and irrevocably
guaranteed by SSMS and certain subsidiaries, as well as by Citra
Borneo Indah (P.T.) (CBI), the controlling shareholder of SSMS.
The rating outlook is stable.
SSMS will use the majority of the net proceeds from the bond
issuance to repay its existing secured borrowings and invest $10
million in forest conservation in Indonesia (Baa3 positive).
RATINGS RATIONALE
The proposed senior notes are rated in line with SSMS's B1
corporate family rating.
"Upon successful issuance of the bonds and after the majority of
the proceeds are used to repay SSMS' existing secured borrowings,
the company's secured debt/total debt will improve to around 20%
hence legal subordination risk will be minimal," says Jacintha
Poh, a Moody's Vice President and Senior Analyst.
"In addition, the presence of upstream guarantees from major
operating subsidiaries eliminates structural subordination risk
for bondholders," adds Poh.
SSMS' B1 corporate family rating reflects the credit quality of
CBI, which consolidates SSMS, and more specifically the benefits
from SSMS' upstream oil palm plantation business and CBI's
downstream businesses.
The B1 rating is supported by SSMS' efficient upstream
operations, with a track record of profitable and cash generative
operations through the crude palm oil (CPO) cycle. Historically,
SSMS has maintained an adjusted EBITDA margin of around 50%,
owing to its above-average fresh fruit bunch yield of around 20
metric tons per mature hectare, compared to the Indonesian
industry average of 15-16 metric tons.
The rating also takes into account the expectation of increased
diversification and scale in CBI's downstream operations once its
refinery commences operations in 2018. While this will mean that
EBITDA margins are likely to decline to around 30%-35% on a
consolidated basis, it will allow the company to benefit from a
fully integrated plantation-to-refinery business model.
Despite the continued capital spending required for its
downstream businesses, Moody's expects CBI's leverage, as
measured by adjusted debt/EBITDA, to be around 3.5x over the 12-
18 months. Liquidity will also remain adequate over the next 12
months, with minimal refinancing risk. However, banking
relationships across the group are limited.
The rating is constrained by (1) CBI's small scale relative to
its regional peers; (2) the company's exposure to inherent CPO
price volatility; (3) execution risk of its new downstream
operations; (4) aggressive capital spending on land acquisition
to grow its plantation business; and (5) limited banking
relationships.
The ratings outlook is stable, reflecting Moody's expectation
that CBI on a consolidated basis will maintain a prudent and
conservative approach towards further investments as it pursues
growth.
A rating upgrade is unlikely over the near to medium term, but
positive momentum could build if CBI successfully executes its
business plans and grows its scale, generates positive free cash
flow, and demonstrates sustained improvement in its financial
profile, such that adjusted debt/EBITDA is below 3.0x and
EBITA/interest expense is above 4.0x. In particular, Moody's
expects both CBI and SSMS will improve their access to funding
with more diversified banking relationships.
SSMS' ratings could face downward pressure if: (1) CBI fails to
implement its business plan, in particular for its downstream
business, such that earnings growth is adversely affected; (2)
the company undertakes large debt-funded acquisitions that
materially weaken its credit profile; or (3) there is evidence of
cash leakage outside of CBI.
Credit metrics indicative of downward rating pressure include
adjusted debt/ EBITDA above 4.0x and adjusted EBITA/interest
expense below 2.5x, all on sustained basis.
The principal methodology used in this rating was Global Protein
and Agriculture Industry published in June 2017.
Listed on the Indonesian Stock Exchange since December 2013,
Sawit Sumbermas Sarana Tbk (P.T.) (SSMS) is an upstream palm oil
producer. Following the completion of a corporate reorganization
at Citra Borneo Indah (P.T.) (CBI) on October 16, 2017, SSMS is
now controlled and owned by Pak Abdul Rasyid and his family
through a 58.5%-stake, as held by CBI; 8.1%, as held by Putra
Borneo Agro Lestari; and 2.3%, as held by Jimmy Adriyanor, as of
October 31, 2017.
=========
J A P A N
=========
TOSHIBA CORP: To Sell Westinghouse Assets to Boost Capital
----------------------------------------------------------
Pavel Alpeyev at Bloomberg News reports that Toshiba Corp. has
agreed to sell claims in its Westinghouse U.S. nuclear unit to
bolster its capital by JPY410 billion ($3.68 billion) by March,
helping it to erase negative shareholder equity and avoid being
delisted.
Bloomberg relates that the Tokyo-based company said it plans to
complete the sale of the claims to an entity controlled by the
Baupost Group LLC this month. The deal will generate after-tax
profit of JPY170 billion.
According to Bloomberg, the sale will end the Japanese
conglomerate's troubled foray into overseas nuclear power, which
started with the $5.4 billion acquisition of Westinghouse in
2006. Two power projects went billions of dollars over budget and
years behind schedule, forcing the U.S. entity to seek bankruptcy
protection in March. The resulting multibillion-dollar losses
pushed Toshiba's liabilities beyond its level of assets,
threatening its listing on the Tokyo Stock Exchange. Toshiba was
forced to put its crown-jewel semiconductor business up for sale
to plug the hole in its balance sheet.
The nuclear asset sale and 600 billion yen raised in December
through new share issuance together will resolve its capital
shortage by the end of its fiscal year, Toshiba said in the
statement, Bloomberg relays. Under TSE's requirements, two
straight years of negative shareholders equity are grounds for
delisting.
Over the past two months, Toshiba paid its guarantees on nuclear
projects in South Carolina and Georgia, entitling it to a total
of about $8.1 billion in claims against Westinghouse. The company
is selling the claims for $2.16 billion.
About Toshiba Corp
Toshiba Corporation (TYO:6502) -- http://www.toshiba.co.jp/-- is
a Japan-based manufacturer involved in five business segments.
The Digital Products segment offers cellular phones, hard disc
devices, optical disc devices, liquid crystal televisions, camera
systems, digital versatile disc (DVD) players and recorders,
personal computers (PCs) and business phones, among others. The
Electronic Device segment provides general logic integrated
circuits (ICs), optical semiconductors, power devices, large-
scale integrated (LSI) circuits for image information systems and
liquid crystal displays (LCDs), among others. The Social
Infrastructure segment offers various generators, power
distribution systems, water and sewer systems, transportation
systems and station automation systems, among others. The Home
Appliance segment offers refrigerators, drying machines, washing
machines, cooking utensils, cleaners and lighting equipment. The
Others segment leases and sells real estate.
As reported in the Troubled Company Reporter-Asia Pacific on
Dec. 15, 2017, Moody's Japan K.K. affirmed Toshiba Corporation's
Caa1 corporate family rating and senior unsecured debt ratings,
and its Ca subordinated debt rating. Moody's has also changed the
ratings outlook to stable from negative. At the same time,
Moody's has affirmed Toshiba's commercial paper rating of Not
Prime.
On Oct. 6, 2017, S&P Global Ratings affirmed its 'CCC-' long-term
corporate credit and 'C' short-term corporate credit and
commercial paper program ratings on Japan-based capital goods and
diversified electronics company Toshiba Corp. S&P also removed
the ratings from CreditWatch. The outlook is negative. At the
same time, S&P raised the senior unsecured rating one notch to
'CCC-' from 'CC' following completion of its review of the
rating. S&P also removed the senior unsecured rating from
CreditWatch with negative implications following its affirmation
of the long-term corporate credit rating and resolution of the
CreditWatch.
===============
M A L A Y S I A
===============
AMTEK HOLDINGS: Triggers PN17 After Selling Core Business
---------------------------------------------------------
The Edge Financial Daily reports that Amtek Holdings Bhd, which
has sold off its core business, has fallen into Practice Note 17
(PN17) status, after its shareholders' equity on a consolidated
basis fell to below MYR40 million and not more than 25% of its
issued and paid-up capital, based on its latest unaudited
financial statements for the financial period ended Nov. 30,
2017.
Under the regulations, shareholders' equity of a listed entity
must be above 25% of the issued and paid-up capital of the
issuer, and equal to MYR40 million or more, the report says.
As at Nov. 30, its share capital stood at MYR69.13 million, while
total shareholders' equity was at MYR13.07 million, the report
discloses.
It has also become an affected listed issuer under Chapter 8,
Paragraph 8.03A(2)(a) of Bursa Malaysia's Main Market Listing
Requirements, after it sold off its major business by terminating
licence agreements with Crocodile International Sdn Bhd and
ceased the distribution and retail sale of men's apparel and
small leather goods businesses in Malaysia, according to Edge
Financial Daily.
On Jan. 11, Amtek announced its indirect wholly-owned subsidiary,
Apparel International Sdn Bhd, had inked a conditional sale and
purchase agreement to sell off its entire inventory, accessories
and retail and fixed assets under the Crocodile brand, the report
discloses.
According to the report, the company said it is required to
regularise its condition within 12 months of the announcement,
and announce within three months from Jan. 15, on whether its
regularisation plan will result in a significant change in its
business direction or policy.
If it fails to do so, it will be suspended from trading six days
after a notice is issued by Bursa, and delisting procedures would
be taken against the company, the report notes.
About Amtek Holdings Berhad
Headquartered in Kuala Lumpur, Malaysia, Amtek Holdings Berhad
markets and distributes garments and electrical goods. It also
manufactures shoes, garments and food products, trades fabrics
and related accessories, markets and distributes jeans wear,
property investment, provides management services and is also an
investment holding. Operations are carried out in Malaysia,
Europe, Australia, Singapore, United States and other Asian
countries. The Company is currently undergoing a business
reorganization program to curb losses. For the quarter ended
March 31, 2006, the Company booked a net loss of MYR1.9 million
due to the poor performances in its apparels and electrical
divisions. The prospects for the remaining quarters are not
expected to improve as the apparels and electrical divisions are
undergoing business reviews and revamp exercises.
MAA GROUP: Gets More Time to Submit Regularisation Plan
-------------------------------------------------------
The Sun Daily reports that MAA Group Bhd has been granted by
Bursa Malaysia Securities Bhd an extension of time up to June 30,
2018 to submit its regularisation plan.
However, its shares will be suspended and delisted in the event
it fails to submit its regularisation plan by June 30, 2018, the
report says.
MAA Group Berhad is an investment holding company. The Company is
engaged in providing management services. The Company's segments
include General insurance, Family takaful business, General
takaful business, Shareholders' fund of the insurance and takaful
businesses, Card business and Investment holdings. The General
insurance segment includes underwriting all classes of general
insurance business. The Family takaful business segment includes
underwriting family takaful business. The General takaful
business segment includes underwriting general takaful business.
The Card business segment includes the business of prepaid cards
and other related cards and services. Its Other segments consist
of hire purchase, leasing and other credit activities, property
management, consultancy services and education services. Its
subsidiaries include MAA Takaful Berhad, MAA Corporation Sdn
Bhd., MAA Credit Berhad, MAA-Medicare Sdn Bhd and MAA Corporate
Advisory Sdn Bhd, among others.
MAA Group slipped into Practice Note 17 (PN17) status in 2011
after the sale of the company's conventional insurance arm
Malaysian Assurance Alliance Bhd to Switzerland-based Zurich
Insurance Co Ltd.
=================
S I N G A P O R E
=================
TECHNICS OIL: Judicial Management Extended Until July 15
--------------------------------------------------------
Nisha Ramchandani at The Strait Times reports that the Singapore
High Court has extended the Judicial Management Order for
Technics Oil and Gas until July 15 this year, the company said in
an update.
Tam Chee Chong and Andrew Grimmett, both of Deloitte & Touche,
were first announced as the joint judicial managers (JMs) on
July 25, 2016, the Strait Times discloses.
However, Mr. Tam has now been released as judicial manager with
effect from Jan. 15 due to his retirement from Deloitte, the
report relays.
The Strait Times says Mr. Grimmett will continue to act as the
sole judicial manager.
Among other things, he will manage the role, business and
property of the company to achieve its survival as well as "a
more advantageous realisation of the company's assets than would
be effected on a winding up", Technics said in a filing to the
Singapore Exchange on Jan. 18, the report adds.
Technics Oil and Gas Ltd is engaged in the provision of
management services. The Company's segments include Engineering,
procurement, construction and commissioning (EPCC); Contract
engineering (CE), and Procurement services (PS). The Company's
EPCC segment is engaged in designing, procurement, fabrication,
installation and commissioning of process modules and equipment
for oil and gas production on a turnkey projects basis. The
Company's CE segment includes designing, procurement and
fabrication of modules, systems or equipment for the oil and gas
industry. The Company's PS segment provides sales services,
supply spare parts, and equipment for oil and gas exploration and
production. The Company's PS Segment also provides repair and
maintenance services to oil and gas industry in the equipment
leasing business. The Company's services include flash gas
compressor package, glycol dehydration unit and test separator.
*********
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 2018. All rights reserved. ISSN: 1520-9482.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding,
electronic re-mailing and photocopying) is strictly prohibited
without prior written permission of the publishers.
Information contained herein is obtained from sources believed
to be reliable, but is not guaranteed.
TCR-AP subscription rate is US$775 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance
thereof are US$25 each. For subscription information, contact
Peter Chapman at 215-945-7000.
*** End of Transmission ***