/raid1/www/Hosts/bankrupt/TCRAP_Public/180208.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Thursday, February 8, 2018, Vol. 21, No. 028
Headlines
A U S T R A L I A
ALLMINE HOLDINGS: Second Creditors' Meeting Set for Feb. 15
CLEARPACK AUSTRALIA: First Creditors' Meeting Set for Feb. 16
EZETAX PTY: Second Creditors' Meeting Set for Feb. 20
OCEAN INFORMATICS: Second Creditors' Meeting Set for Feb. 14
SUPPS R US: Second Creditors' Meeting Set for Feb. 14
TOMCAR AUSTRALIA: Enters Voluntary Into Administration
C H I N A
BIOSTAR PHARMACEUTICALS: Taps Centurion ZD CPA as New Accountants
BIOSTAR PHARMACEUTICALS: Liao Huiping Fills Board Vacancy
CHINA HUISHAN: Liquidators Over Hong Kong Subsidiary Appointed
RONSHINE CHINA: Fitch Rates USD325MM Senior Notes Due 2021 B+
SUNRIVER HOLDING: Moody's Assigns B2 Corporate Family Rating
I N D I A
A.S. EMPORIUM: CRISIL Moves B+ Rating to Not Cooperating Category
ABRO CHIMIQUE: CARE Reaffirms B+ Rating on INR9.11cr LT Loan
ADITYA TRANSLINK: CRISIL Withdraws B Rating on INR8.5MM Cash Loan
ALBA ASIA: CARE Moves C Rating to Not Cooperating Category
ALTECH INFRASTRUCTURE: CRISIL Assigns B Rating to INR8.5MM Loan
ANDHRA BARYTE: CRISIL Withdraws D Rating on INR13.5MM LT Loan
ANNAPURNA SEEDS: CRISIL Assigns B+ Rating to INR6.5MM Cash Loan
ASIAN BEVERAGE: CRISIL Reaffirms D Rating on INR16.9MM Term Loan
AXWELL GRANITO: CRISIL Migrates INR20.5M Loan Rating to B+/Stable
BALAJI MOBITECH: CARE Lowers Rating on INR10cr LT Loan to D
BK THRESHERS: ICRA Reaffirms B Rating on INR120cr Cash Loan
BLUE STAR: CRISIL Moves D Rating to Not Cooperating Category
CARRYCON INDIA: ICRA Cuts Rating on INR6.5cr Cash Loan to B
CHANDRA ENGINEERS: CRISIL Moves B+ Rating to Not Cooperating Cat.
HEERA RICE: CRISIL Moves B+ Rating to Not Cooperating Category
INDIANA STEEL: CRISIL Assigns B Rating to INR2MM Cash Loan
J.M.D. CORPORATION: CRISIL Moves D Rating to Not Cooperating
JIWANSAAGAAR REALTY: CRISIL Reaffirms B+ Rating on INR14MM Loan
JJ PV SOLAR: CRISIL Moves B+ Rating to Not Cooperating Category
MUTNEJA RICE: CRISIL Moves B+ Rating to Not Cooperating Category
NOTTO GRANITO: ICRA Assigns B Rating to INR26cr Term Loan
PILANIA STEELS: CRISIL Assigns C Rating to INR7.5MM Cash Loan
PLY COM: CRISIL Lowers Rating on INR5MM Cash Loan to B-
PRIME CARGO: CRISIL Reaffirms B- Rating on INR7MM Cash Loan
S.L. GROUP: CRISIL Reaffirms B Rating on INR19.5MM Term Loan
SATYA SAI: CRISIL Assigns B+ Rating to INR22.5MM LT Loan
SUPER SEAL: CRISIL Reaffirms B+ Rating on INR9MM Cash Loan
TOUGH BAGS: CRISIL Moves B+ Rating to Not Cooperating Category
TUTICORIN COAL: CARE Moves D Rating to Not Cooperating Category
UNDAVALLI CONSTRUCTIONS: ICRA Assigns B+ Rating to INR15cr Loan
VIMAX CROP: CRISIL Lowers Rating on INR8.5MM Cash Loan to B+
I N D O N E S I A
LIPPO KARAWACI: Moody's Alters Outlook to Neg.; Affirms B1 CFR
N E W Z E A L A N D
APPENTURE MARKETING: Gets Large Fine for Misleading Consumers
S I N G A P O R E
PACIFIC RADIANCE: Noteholders Must Reject Revised Plan, OCB Says
* SINGAPORE: SMEs Debt Payment Behavior Worsened in 2017
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A U S T R A L I A
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ALLMINE HOLDINGS: Second Creditors' Meeting Set for Feb. 15
-----------------------------------------------------------
A second meeting of creditors in the proceedings of Allmine Holdings
(NT) Pty Ltd has been set for Feb. 15, 2018, at
10:00 a.m. at the offices of HLB Mann Judd (Insolvency WA)
Level 3, 35 Outram Street, in West Perth, WA.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the
Company be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by Feb. 14, 2018, at 5:00 p.m.
Kimberley Stuart Wallman of HLB Mann Judd was appointed as
administrator of Allmine Holdings on Jan. 12, 2018.
CLEARPACK AUSTRALIA: First Creditors' Meeting Set for Feb. 16
-------------------------------------------------------------
A first meeting of the creditors in the proceedings of Clearpack
Australia Pty Ltd will be held at 165 Camberwell Road, Hawthorn East
3123, on Feb. 16, 2018, at 11:00 a.m.
Nicholas Giasoumi and Shane Leslie Deane of Dye & Co. were appointed
as administrators of Clearpack Australia on Feb. 7, 2018.
EZETAX PTY: Second Creditors' Meeting Set for Feb. 20
-----------------------------------------------------
A second meeting of creditors in the proceedings of Ezetax Pty Ltd has
been set for Feb. 20, 2018, at 10:30 a.m. at the offices of DCS
Advisory, Level 1, 680 Murray Street, in West Perth, WA.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the
Company be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by Feb. 19, 2018, at 5:00 p.m.
Shaun William Boyle of DCS Advisory was appointed as administrator of
Ezetax Pty on Nov. 9, 2017.
OCEAN INFORMATICS: Second Creditors' Meeting Set for Feb. 14
------------------------------------------------------------
A second meeting of creditors in the proceedings of Ocean Informatics
Pty Ltd has been set for Feb. 14, 2018, at 4:00 p.m. at the offices of
BRI Ferrier (NSW), Level 30, Australia Square, 264 George Street, in
Sydney, New South Wales.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the
Company be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by Feb. 13, 2018, at 4:00 p.m.
Peter Paul Krejci of BRI Ferrier was appointed as administrator of
Ocean Informatics on Jan. 9, 2018.
SUPPS R US: Second Creditors' Meeting Set for Feb. 14
-----------------------------------------------------
A second meeting of creditors in the proceedings of Supps R Us
Australia Pty Ltd has been set for Feb. 14, 2018, at 11:30 a.m. at the
offices of Worrells Solvency & Forensic Accountants
Level 15, 114 William Street, in Melbourne, Victoria.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the
Company be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by Feb. 13, 2018, at 5:00 p.m.
Con Kokkinos and Matthew Jess of Worrells Solvency were appointed as
administrators of Supps R Us Australia on Nov. 14, 2017.
TOMCAR AUSTRALIA: Enters Voluntary Into Administration
------------------------------------------------------
StartupSmart reports that car manufacturing startup Tomcar Australia
has entered voluntary administration, citing high manufacturing costs
and "hostile investors" as the reason for shutting its doors.
Launched in 2005, the company was founded by brothers David and
Michael Brim, who spent seven years in development before releasing
their first product in 2012, StartupSmart discloses. The company made
100 of its premium off road, all-terrain cars in its first run, which
sold out almost immediately after first launch.
Since then the company had seemingly been going from strength to
strength, with Fairfax reporting in June last year business was "on
the up" and working on a AUD100,000 feasibility study with the CSIRO
to turn its cars electric, StartupSmart says. The CSIRO also invested
AUD50,000 in the startup in April last year as part of its Kick-Start
program.
According to StartupSmart, David Brim told Fairfax he and his brother
had funded the business to the tune of AUD15 million over its
lifetime, having given "very small" amounts of shares away, and back
in 2013, he told StartupSmart the business was "strong and
profitable".
However, the business was placed into voluntary administration on Feb.
6, with Christopher Baskerville and Malcolm Howell from Jirsch
Sutherland appointed as administrators of Tomcar Australia Pty Ltd.
The business has stopped trading and the first meeting of creditors is
scheduled to be held on February 15, the report notes.
The administrators told StartupSmart that high manufacturing costs,
low sales volumes, and a "situation with an investor that led to legal
proceedings, resulting in legal costs", have contributed to the
voluntary administration.
The administrators are currently determining whether the business can
be sold, and say there will be a creditors meeting in due course, the
report says.
According to StartupSmart, the administrators have confirmed the
turnover for Tomcar in the 2016-17 financial year was AUD4.65 million,
despite previous reports that the company's turnover was "just under
AUD10 million". Tomcar had five employees.
In a statement provided to StartupSmart, David Brim described what he
called a "devastating turn of events for Tomcar Australia".
"We had such high hopes for Australian niche vehicle manufacturing. We
have had to close our doors because of a group of hostile investors
tried to take over the company from us, while ever increasing
manufacturing costs have put untold strain on the cash flow of the
business."
"We recently had an overseas investor about to come on board but at
the last minute they backed out, leaving us with escalating legal fees
and product costs, which simply pushed us over the edge.
"We want to thank everyone who supported our dream over the years and
helped us along the way. It has been an incredible journey. We've
tried our very best, but we couldn't quite get there."
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C H I N A
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BIOSTAR PHARMACEUTICALS: Taps Centurion ZD CPA as New Accountants
-----------------------------------------------------------------
Mazars CPA Limited has tendered its resignation as Biostar
Pharmaceuticals, Inc.'s independent registered public accounting
firm, effective as of Jan. 31, 2018. Mazars' determination not to
seek re-appointment as the Company's independent auditors followed its
policy to withdraw from the market in auditing public companies in the
U.S.
Mazars reported on the Company's financial statements for the years
ended as of Dec. 31, 2016 and 2015, respectively. Its reports on the
Company's financial statements for the fiscal periods as of Dec. 31,
2016 and 2015, respectively, did not contain an adverse opinion or a
disclaimer of opinion, and were not qualified or modified as to
uncertainty, audit scope, or accounting principles except that the
Mazars report on the Company's financial statements for the fiscal
years ended
Dec. 31, 2016 and 2015 draw attention to (1) deposits paid for
intended acquisitions, (2) uncertainty whether the Company was able to
continue as a going concern as the Company had experienced a
substantial decrease in sales volume which resulting a net loss for
the years ended Dec. 31, 2016 and
2015 and part of the Company's buildings and land use rights were
subject to litigation between an independent third party and the
Company's chief executive officer, and the title of these buildings
and land use rights had been seized by the PRC Courts so that the
Company could not be sold without the Court's permission, and that the
Company previously violated its financial covenants included in
certain short-term bank loans.
The Company said that during its two most recent fiscal years ended
Dec. 31, 2016 and the interim period through the effective date of
Mazars' resignation, (i) there were no disagreements with Mazars on
any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which disagreements, if
not resolved to Mazars' satisfaction, would have caused it to make
reference to the subject matter of such disagreements in its reports
on the Company's consolidated financial statements for such year, and
(ii) there were no reportable events as defined in Item 304(a)(1)(v)
of Regulation S-K.
Engagement of Centurion ZD CPA Limited
On Jan. 31, 2018, the Company engaged Centurion ZD CPA Limited,
located at Unit 1304, 13/F, Two Harbourfront, 22 Tak Fung Street,
Hunghom, Hong Kong, as its new independent registered public
accounting firm to audit the Company's financial statements for the
year ended Dec. 31, 2017 and the related consolidated statement of
operations and comprehensive income, consolidated statement of equity
and consolidated statement of cash flows for the year then ended;
Centurion will also review the quarterly and year-to-date 2018
consolidated financial statements of the Company to be included in the
Company's quarterly filings on Form 10-Q for 2018. The engagement was
reviewed, recommended and approved by the Audit Committee, and will be
effective as of
Jan. 31, 2018.
During each of the Company's two most recent fiscal years and through
the date of this report, (a) the Company has not engaged Centurion as
either the principal accountant to audit the Company's financial
statements, or as an independent accountant to audit a significant
subsidiary of the Company and on whom the principal accountant is
expected to express reliance in its report; and (b) the Company or
someone on its behalf did not consult Centurion with respect to (i)
either: the application of accounting principles to a specified
transaction, either completed or proposed; or the type of audit
opinion that might be rendered on the Company's financial statements,
or (ii) any other matter that was either the subject of a disagreement
or a reportable event as set forth in Items 304(a)(1)(iv) and (v) of
Regulation S-K.
About Biostar Pharmaceuticals
Based in Xianyang, China, Biostar Pharmaceuticals, Inc., through
its wholly owned subsidiary and controlled affiliate in China --
http://www.biostarpharmaceuticals.com/-- develops, manufactures,
and markets pharmaceutical and health supplement products for a
variety of diseases and conditions.
Biostar incurred a net loss of $5.69 million in 2016 and a net loss of
$25.11 million in 2015. As of Sept. 30, 2017, the Company had $41.42
million in total assets, $5.27 million in total liabilities, all
current, and $36.14 million in total stockholders' equity.
Mazars CPA Limited, Certified Public Accountants, in Hong Kong,
issued a "going concern" qualification on the consolidated
financial statements for the year ended Dec. 31, 2016, stating that
the Company had experienced a substantial decrease in sales volume
which resulting a net loss for the year ended Dec. 31, 2016. Also,
part of the Company's buildings and land use rights are subject to
litigation between an independent third party and the Company's chief
executive officer, and the title of these buildings and land use
rights has been seized by the PRC Courts so that the Company cannot be
sold without the Court's permission. In addition, the Company already
violated its financial covenants included in its short-term bank
loans. These conditions raise substantial doubt about the Company's
ability to continue as a going concern.
BIOSTAR PHARMACEUTICALS: Liao Huiping Fills Board Vacancy
---------------------------------------------------------
Liu Qinghua, an independent director of the Board of Directors of
Biostar Pharmaceuticals, Inc. delivered to the Board her
resignation letter as a Board member at large effective as of Jan. 29,
2018, as disclosed in a Form 8-K filed by Biostar with the Securities
and Exchange Commission. She noted that her resignation from the
Board was to allow her to focus on other commitments unrelated to the
Company. The Company said Liu Qinghua's resignation was not for any
disagreements with the Company, its management or the Board. The
Company wishes to thank her for her service to the Company and the
Board.
Following the resignation, the Board appointed Liao Huiping to fill
the vacancy on the Board also as a Board member at large.
Currently, the Board consists of five members: Ronghua Wang
(Chairman), Melissa Fan Chen, Haipeng Wu, Zhanxiang Ma and Liao
Huiping, of which Melissa Fan Chen, Haipeng Wu and Zhanxiang Ma are
deemed "independent" Board members.
Liao Huiping holds an accounting degree from Xi'an University of
Technology (1990). She is currently the general manager of Shaanxi
Weinan Huaren Pharmaceutical Co., Ltd. Liao has acted as general
manager of Shaanxi Weinan Huaren Pharmaceutical Co., Ltd. since July
2017. From September 2015 to July 2017, Liao served as the sales
manager and deputy general manager of Shaanxi Weinan Huaren
Pharmaceutical Co., Ltd. From January 2007 to September 2015, Liao
took the position of general manager in Hong Kong Venture Yu Hong Co.,
Ltd. From July 1990 to January 2007, Liao worked in Shenzhen Yue Kai
Peng Industrial Development Co., Ltd as accountant, financial manager
and deputy general manager.
The Company said there is no arrangement or understanding between
Liao Huiping and any other persons pursuant to which she was
appointed as discussed above. Nor are there any family relationships
between Liao Huiping and any executive officers and
directors. Further, there are no transactions involving the
Company which transaction would be reportable pursuant to Item
404(a) of Regulation S-K promulgated under the Securities Act of
1933, as amended.
About Biostar Pharmaceuticals
Based in Xianyang, China, Biostar Pharmaceuticals, Inc., through
its wholly owned subsidiary and controlled affiliate in China --
http://www.biostarpharmaceuticals.com/-- develops, manufactures,
and markets pharmaceutical and health supplement products for a
variety of diseases and conditions.
Biostar incurred a net loss of $5.69 million in 2016 and a net loss of
$25.11 million in 2015. As of Sept. 30, 2017, the Company had $41.42
million in total assets, $5.27 million in total liabilities, all
current, and $36.14 million in total stockholders' equity.
Mazars CPA Limited, Certified Public Accountants, in Hong Kong,
issued a "going concern" qualification on the consolidated
financial statements for the year ended Dec. 31, 2016, stating that
the Company had experienced a substantial decrease in sales volume
which resulting a net loss for the year ended Dec. 31, 2016. Also,
part of the Company's buildings and land use rights are subject to
litigation between an independent third party and the Company's chief
executive officer, and the title of these buildings and land use
rights has been seized by the PRC Courts so that the Company cannot be
sold without the Court's permission. In addition, the Company already
violated its financial covenants included in its short-term bank
loans. These conditions raise substantial doubt about the Company's
ability to continue as a going concern.
CHINA HUISHAN: Liquidators Over Hong Kong Subsidiary Appointed
--------------------------------------------------------------
China Huishan Dairy Holdings Company Limited announced on Feb. 6,
2018, that a writ of summons has been issued in the Court of First
Instance of the High Court of The Hong Kong Special Administrative
Region by a creditor as the Plaintiff against China Huishan Dairy
Holdings (Hong Kong) Limited, incorporated in Hong Kong ("Huishan
HK"), as well as China Huishan Dairy Investments International
Limited, China Huishan Dairy Holdings International Limited and Upking
Holdings Limited, all incorporated in the British Virgin Islands
(collectively referred to as the "BVI Subsidiaries").
By a special resolution of the sole shareholder of Huishan HK, Huishan
HK was voluntarily wound up, and Messrs. Lai Kar Yan (Derek) and Yeung
Lui Ming (Edmund) -- edmyeung@deloitte.com.hk
-- both of Deloitte Touche Tohmatsu in Hong Kong were nominated as
Joint and Several Liquidators. Their appointment was subsequently
confirmed by a resolution duly passed at the creditors' meeting held
on Jan. 23, 2018.
By a special resolution of the respective sole shareholder of the BVI
Subsidiaries, the BVI Subsidiaries were wound up, and Messrs. Lai Kar
Yan and Yeung Lui Ming, both of Deloitte Touche Tohmatsu in Hong Kong,
and Mr. Darren Reeds -- dreeds@deloitte.com -- of Deloitte Ltd. in the
British Virgin Islands, were appointed as Joint Liquidators of the BVI
Subsidiaries. Their appointments were subsequently confirmed by a
resolution duly passed at the respective creditors' meetings of the
BVI Subsidiaries held on 1 February 2018.
Huishan HK and BVI Subsidiaries are investment holding companies and
their subsidiaries are principally engaged in dairy farming,
production and sales of liquid milk products and milk powder products
in PRC.
RONSHINE CHINA: Fitch Rates USD325MM Senior Notes Due 2021 B+
--------------------------------------------------------------
Fitch Ratings has assigned Ronshine China Holdings Limited's
(B+/Stable) USD325 million 8.25% senior notes due 2021 a final rating
of 'B+' with a Recovery Rating of 'RR4'.
The notes are rated at the same level as Ronshine's senior unsecured
rating because they are unconditionally and irrevocably guaranteed by
the company. The assignment of the final rating follows the receipt of
documents conforming to information already received. The final rating
is in line with the expected rating assigned on 24 January 2018.
Ronshine's ratings are supported by a geographically diversified land
bank, following expansion into new cities in 2017, and strong
contracted sales growth. However, the rating is constrained by
Ronshine's sustained high leverage from its aggressive land
acquisition strategy and uncertain government policy, which Fitch
believes may significantly affect the profitability of projects built
on the more expensive land bought in 2016.
KEY RATING DRIVERS
More Diversified Land Bank: Fitch believes Ronshine's expansion has
reduced the company's geographical concentration risk, which should
mitigate the slowing sales pace in high-tier cities that are severely
affected by tighter home-purchase restriction policies. In 1H17 the
company entered the cities of Chengdu, Tianjin, Guangzhou, Chongqing,
Ningbo and Zhengzhou as well as lower-tiered Longyan, Putian, Jinhua,
Shaoxing and Quzhou.
Increased exposure to lower-tier cities that are benefiting from
spill-over development in neighbouring high-tier cities was a key
driver for Ronshine's strong 2017 sales. Fitch expect this trend to
continue and for Ronshine's market repositioning to allow it to tap
into the new urban housing demand. Ronshine had attributable land bank
of 6.3 million square metres (sqm) across 18 cities in China as of
end-June 2017, up from 4.8 million sqm across seven cities at
end-2016.
Larger Scale, Strong Sales: Ronshine's contracted sales were up by
104% yoy to CNY50 billion in 2017, following a 70% yoy increase in
contracted floor space sold to 2.4 million sqm. Proactive land
acquisitions in 2016 have provided the company with abundant saleable
resources. Its contracted selling price was up by 20% yoy to CNY21,046
per sqm in 2017, with the sales contribution from the
high-average-selling-priced Shanghai region rising to 18% in 1H17,
from 9% in FY16.
Aggressive Land Acquisitions: Fitch expect Ronshine's leverage, as
defined by net debt/adjusted inventory, to remain at a higher 50%-55%
in the next three years, from 49% as at end-2016. Ronshine replenished
3.1 million sqm of attributable gross floor area in 10M17 for CNY24
billion, or 69% of its contracted sales. Fitch believes Ronshine will
need to use about 60% of its contracted sales proceeds each year to
acquire new land to deepen its geographical penetration and expand its
contracted sales scale, limiting its room to de-leverage in the short
term.
Limited Margin Improvement: Fitch expect Ronshine's EBITDA margin to
stay at around 20% in 2017-2018. Its margin, excluding capitalised
interest, fell to 19% in 2016, from 36% in 2015, when projects outside
high-margin Fujian province started to be recognised. The EBITDA
margin stabilised to 20% in 1H17, but the expansion in the company's
scale and geographical coverage may incur higher operating costs,
which could limit further margin improvement.
DERIVATION SUMMARY
Ronshine's contracted sales scale of CNY50 billion per year and
diversified land bank in China is equivalent to other 'BB-' rated
homebuilders, such as Yuzhou Properties Company Limited (BB-/Stable)
and China Aoyuan Property Group Limited (BB-/Stable). Its leverage, as
defined by net debt/adjusted inventory, of around 40%-50% is at the
mid-range level of 'B' category peers, including Times Property
Holdings Limited (B+/Positive) and Modern Land (China) Co., Limited
(B+/Negative), while most 'B+' peers have leverage below 40%. Fitch
believe Ronshine's more diversified land bank can support a 'B+'
rating despite its leverage being higher than 'B+' peers. Ronshine
needs to continuously replenish its land bank at market prices, which
limits its ability to de-leverage and pressures its margin. This
constrains its rating at 'B+'.
KEY ASSUMPTIONS
Fitch's key assumptions within Fitch rating case for the issuer include:
- Contracted sales gross floor area to increase by 3% in 2018
- Average selling price to increase by 5% in 2018
- EBITDA margin, excluding capitalised interest, at 20% for
2017-2018
- Land acquisition costs at 0.5x-0.6x of contracted sales for
2018, assuming Ronshine maintains about four to five years of
land bank (2017: 0.5x)
- Leverage, as measured by net debt/adjusted inventory, at about
50%-60% for 2017-2018
RATING SENSITIVITIES
Positive: Positive rating action is unlikely in the next 12 to 18
months, as leverage is likely to remain high, but developments that
may, individually or collectively, lead to positive rating action
include:
- attributable contracted sales sustained at CNY30 billion or
above;
- EBITDA margin, excluding capitalised interest, sustained at
25% or above; and
- leverage, as measured by net debt/adjusted inventory,
sustained below 40%.
Negative: Developments that may, individually or collectively, lead to
negative rating action include:
- Attributable contracted sales below CNY20 billion for a
sustained period;
- EBITDA margin, excluding capitalised interest, below 20% for a
sustained period; and
- leverage, as measured by net debt/adjusted inventory, at above
55% for a sustained period.
LIQUIDITY
Tight Liquidity: Ronshine had cash and deposits, including term
deposits and restricted cash, of CNY11 billion as of end-June 2017,
against debt maturing in one year of CNY19 billion. Fitch expect that
the liquidity position improved in 2H17 after the company's share
placement and strong 2H17 contracted sales. Ronshine completed a
top-up equity market placement in November 2017, raising HKD1 billion.
Contracted sales also accelerated in 2H17, reaching CNY26 billion in
the five months from July 2017 to November 2017, against CNY16 billion
in 1H17 and CNY25 billion for the full-year 2016.
Diversified Funding Channels: Apart from equity markets, Ronshine has
access to the private and public domestic bond market, offshore bond
market, asset-backed securities, bank borrowings and trust loans.
SUNRIVER HOLDING: Moody's Assigns B2 Corporate Family Rating
------------------------------------------------------------
Moody's Investors Service has assigned a first-time B2 corporate
family rating (CFR) to Sunriver Holding Group Company Limited
(Sunriver). The rating outlook is stable.
RATINGS RATIONALE
"Sunriver's B2 CFR reflects its track record of real estate
development in the province of Anhui, as well as its above
peer-average profitability," says Cedric Lai, a Moody's Assistant Vice
President and Analyst.
Property development is Sunriver's largest business segment,
contributing 60%-65% of its total gross profit of RMB1.4-2.1 billion
during 2015-16. Moody's forecasts gross profit from the property
development segment will contribute around 60% of its total gross
profit of RMB2.6-3.2 billion over the next 12-18 months.
Sunriver operated nine residential real estate projects at the end of
September 2017, with a focus in Anhui Province, mainly in the cities
of Hefei and Fuyang.
The company achieved high gross development margins of 32%-40% in the
last two years because of its low-cost land bank and strong average
selling price growth in Hefei and Fuyang. These gross profit margins
are high when compared with Moody's B-rated Chinese property
developers. Moody's forecasts Sunriver's gross profit margin will
remain around 33%-34% over the next 12-18 months, supported by
continued strong growth in average selling prices in both Hefei and
Fuyang during 2016 and 2017.
At the end of September 2017, the company had total saleable resources
with a gross floor area of around 10.6 million square meters from nine
residential projects, which will support the company's sales and cash
flow generation in the next two years. The company does not plan to
significantly expand its land bank beyond these resources, and plans
to instead use its property sales cash flow to fund the expansion of
its tourism segment. The company did not have any outstanding unpaid
land premium as of September 2017.
Sunriver's infrastructure construction segment provides modest
business diversification and does not negatively impact the company's
credit profile, as it does not have material debt funding needs.
Infrastructure construction is the company's second largest business
segment with an operating track record that dates back to 2002. The
segment contributed about 17%-24% of Sunriver's total gross profit
during 2015-16. Moody's expects the contribution will decline to
11%-13% in next 12-18 months given the expanding tourism segment.
The segment undertakes under engineering, procurement and construction
(EPC) projects such as toll roads, bridges and municipal roads,
primarily within Anhui Province. The company had 46 projects as of
September 2017 which will support the segment's revenue over the next
12 to 18 months.
"Sunriver's B2 CFR is constrained by its small scale, geographic
concentration, debt-funded expansion into relatively new tourism
businesses as well as limited financial flexibility because of its
high level of secured borrowings," adds Lai, also Moody's Lead Analyst
for Sunriver.
The company's scale is small when compared with its B-rated peers --
as measured by revenue of around RMB7.1 billion in 2016 -- although
Moody's forecasts revenue to increase to around RMB10 billion in the
next 12-18 months.
Sunriver's geographic concentration risk is high, with a high
proportion of revenue derived from its real estate development and
construction business in Anhui Province. While net population inflow
into Hefei and Fuyang will support the company's sales, regulatory
tightening could be stepped up if prices continue to rise rapidly in
these cities.
Sunriver is expanding its another core business by developing and
acquiring tourism attractions, raising both its debt funding needs and
execution risk. The company plans to develop three new tourist
attraction areas around Hefei and Fuyang as well as to acquire mature
tourist attraction areas, with total capital expenditure and
investments for the segment estimated at RMB2.5 billion per annum in
the next 2-3 years. The company completed a self-developed project at
Mount Qiyun Tourism Project in 2017 and is expected to complete the
Fuyang Yinghuai Ecological Tourism Project by 2018.
Sunriver also acquired three mature tourism attractions, namely
Fenghuang Ancient Town and Huanglong Dong and Danxia Mountain in
2016-17.
Sunriver's B2 CFR is also constrained by its private company status,
less diversified funding access and weaker corporate governance when
compared with listed companies.
Sunriver's liquidity is adequate, as shown by its cash/short-term debt
of 193% as of the end of June 2017. The company has raised corporate
onshore bonds, including private placements, of around RMB2.85 billion
since 2013.
The company's debt leverage ratio -- as measured by revenue to
adjusted debt -- was at 74% in 2016 and 117% in 2015. Moody's expects
the company's debt leverage will trend towards 65%-70% in the next
12-18 months, in the absence of aggressive land acquisition spending.
Such levels position it appropriately at the B2 rating level.
Moody's expects Sunriver's interest coverage -- as measured by
adjusted EBIT to interest -- will weaken to around 1.6x over the next
12-18 months, from 2.4x in 2016, as the company's gross profit margins
will partly offset an increase in interest expenses arising from its
increasing debt level.
The stable rating outlook reflects Moody's expectation that Sunriver
will maintain (1) its gross margins for its real estate development
and construction businesses; (2) an adequate liquidity position; and
(3) a prudent approach towards its investments in the tourist segment
without substantially escalating its debt level.
The rating could be upgraded if Sunriver improves its debt leverage
while achieving healthy contracted sales growth, and demonstrates
prudence in expanding its tourism segment. Credit metrics indicative
of a possible upgrade include (1) revenue/adjusted debt above 80%; and
(2) adjusted EBIT/interest cover above 2.0x-2.5x on a sustained basis.
The rating could be downgraded if there is a deterioration in
Sunriver's debt leverage or liquidity position, such as increased
refinancing risk. Deteriorating credit metrics that could trigger a
ratings downgrade include (1) revenue/adjusted debt below 55%-60%; or
(2) adjusted EBIT/interest cover below 1x on a sustained basis.
The principal methodology used in this rating was Homebuilding And
Property Development Industry published in January 2018.
Founded in 2002, Sunriver Holding Group Company Limited is a privately
owned company with its headquarters in Hefei, Anhui Province in China.
It engages in real estate, construction, tourism and cultural
businesses in China. As of June 2017, it had nine property development
projects with an aggregate gross floor area of 8,435,522 square
meters. The company was 82.4% owned by its chairman, Mr. Yu Faxiang
and his brother Mr. Yu Shuixiang as of October 1, 2017.
=========
I N D I A
=========
A.S. EMPORIUM: CRISIL Moves B+ Rating to Not Cooperating Category
-----------------------------------------------------------------
CRISIL has been consistently following up with A.S. Emporium (ASE) for
obtaining information through letters and emails dated
October 16, 2017 and January 12, 2018 among others, apart from
telephonic communication. However, the issuer has remained non
cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 5.5 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 A.S. Emporium which restricts CRISIL's ability to
take a forward looking view on the entity's credit quality. CRISIL
believes information available on A.S. Emporium 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 A.S.
Emporium to ' CRISIL B+/Stable Issuer not cooperating'.
Set up in 2001 as a partnership firm by Mr Selvaraj and his wife Mrs
Subhadra, ASE trades in knitted fabric. The firm is based in Tirupur,
Tamil Nadu.
ABRO CHIMIQUE: CARE Reaffirms B+ Rating on INR9.11cr LT Loan
------------------------------------------------------------
CARE Ratings reaffirmed ratings on certain bank facilities of
Abro Chimique Private Limited (ACPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 9.11 CARE B+; Stable Reaffirmed
Detailed Rationale and key rating drivers
The rating assigned to the bank facilities of ACPL continues to remain
constrained by its short track record with small scale of operations,
moderate capital structure with weak debt coverage indicators,
susceptibility of profitability margin to volatility in raw material
prices and working capital intensive nature of operations.
The aforesaid constraints are partially offset by its experienced
promoters, niche product segment with diversified industry application
and locational advantage of its plant.
Going forward, the ability of the company to increase its scale of
operations with improvement in profit margins and ability to manage
its working capital effectively will be the key rating sensitivities.
Detailed description of the key rating drivers
Key Rating Weaknesses
Short track record with small scale of operations: ACPL has commenced
its operations from August 2016 and thus has very short track record
of operations. Furthermore, the scale of operations of the company
also remained small with a GCA of INR0.46 crore on the total operating
income of INR1.40 crore in FY17. Apart from this, the total capital
employed also remained low at INR16.58 crore as on March 31, 2017. The
small size restricts financial flexibility in times of stress.
However, the company has reported turnover of INR4.00 crore in 9MFY18.
Moderate capital structure and weak debt coverage indicators: The
capital structure of ACPL remained moderate marked by debt equity and
overall gearing ratio at 1.16x and 1.20x as on March 31, 2017.
However, the debt protection metrics of the company remained weak
marked by interest coverage of 0.84x and total debt to GCA of 19.39x
in FY17. The interest coverage was below unity in FY17, however, the
company has been regular in servicing its debt obligations.
Susceptibility of profitability margin to volatility in raw materials
prices: The major raw materials of ACPL include fly ash, molasses, red
earth oxide, strong alkali, strong acid and miscellaneous salts, the
prices of which are volatile. Fly ash is
available from the thermal power plants and its price is directly
linked with power production process resulting in price volatility and
further the other chemicals are also price volatile. Thus the company
is exposed to risk associated with the volatility in raw material
prices.
Working capital intensive nature of operations: The operations of the
company remained working capital intensive as reflected from its
relatively higher urtilisation of its working capital limit. The
average fund based working capital utilization remained high side at
about 80% during last 12 month ending on December 31, 2017.
Key Rating Strengths
Experienced promoters: The promoters of ACPL are Mr Sanjay Kumar
Agrawal, Mr Anil Kumar Kedia and Mr Pati Bhasker Naidu. Mr Agarwal
(B.Com) is having a total experience of around 29 years in diversified
business sectors like thermal based power plant, manufacturing of
re-rolling and induction furnace, tobacco based products and real
estate sector. Shri Kedia (B.Com) is having a total experience of
around 20 years in diversified sectors like coal mining and trading,
rice milling & processing, manufacturing of sponge iron and real
estate business. Mr Naidu (B.Tech) is having total experience of
around 35 years as advisory consultant for business houses. Albeit,
the promoters have diversified business experience, they have short
business experience in similar line of business and ACPL is their
first venture in this segment.
Niche product segment with diversified industry application: ACPL has
set up a fly ash processing unit whereby it is engaged in
manufacturing of different chemical based products like carbon, water
glass, white carbon black, sulphate salts from chemical treatment of
fly ash. These products are extensively used in paints & ink
manufacturing unit, glass manufacturing, paper mills, soaps &
detergent units, rubber processing, plastic products manufacturing,
manufacturing of medicines, manufacturing of cement concrete and
packaging units etc. The manufacturing process of these chemical based
products is at a nascent stage in India and China has been a leading
player in the manufacturing process of these products till date and
India has been a net importer of these products. Accordingly ACPL has
a strong market potential in
this segment to take advantage of the current scenario in the domestic
market and enhance its footfalls across the markets in India having a
strong demand of these products. Further, the products proposed to be
manufactured by ACPL find applications in diversified industries thus
mitigating end user concentration risk.
Locational advantage of its plant: ACPL's plant is strategically
located at Bilaspur, Chhattisgarh, one of the major industrial hubs of
India. The major raw materials of ACPL are fly ash, molasses, red
earth oxide, strong alkali, strong acid and miscellaneous salts. Fly
ash is a by-product in the thermal power production process and is
available from the power plants. The unit is strategically located in
the vicinity of power plants in Chhattisgarh and this ensures ready
availability of fly ash. Besides fly ash, the other raw materials are
also available in the nearby area of the unit. This provides
competitive advantage for ACPL in minimizing transportation & logistic
cost.
ACPL was incorporated in July, 1995 as Abro Ferrum Private Limited
(AFPL). However, ACPL remained dormant since incorporation as the
earlier promoters did not undertake any activity in that unit. In
March, 2014, the current promoters Mr. Sanjay Kumar Agrawal, Mr. Anil
Kumar Kedia and Mr. Pati Bhasker Naidu took over the company and
changed the name of the company to ACPL. ACPL has set up a
manufacturing plant at Bilaspur, Chhattisgarh with an installed
capacity of 1683.07 metric ton per annum. The company has started
commercial operations from August 2016 and it is engaged in
manufacturing of chemical based products like carbon, water glass,
white carbon black, sulphate salts from chemical treatment of fly ash.
ADITYA TRANSLINK: CRISIL Withdraws B Rating on INR8.5MM Cash Loan
-----------------------------------------------------------------
Due to inadequate information, CRISIL, in line with SEBI guidelines,
had migrated the rating of Aditya Translink Private Limited (ATPL) to
'CRISIL B/Stable/CRISIL A4/Issuer Not Coperating'. However, the
management has subsequently started sharing requisite information,
necessary for carrying out comprehensive review of the rating.
Consequently, CRISIL is migrating the ratings on bank facilities of
ATPL from 'CRISIL B/Stable/CRISIL A4/Issuer not cooperating to 'CRISIL
B/Stable/CRISIL A4' and has withdrawn the same at the company's
request and based on the no objection certificate received from the
banker. The rating action is in-line with CRISIL's policy on
withdrawal of bank loan ratings.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 6.5 CRISIL A4 (Migrated from
'CRISIL A4' Issuer Not
Cooperating and Rating
Withdrawal)
Cash Credit 8.5 CRISIL B/Stable (Migrated
from 'CRISIL B/Stable'
Issuer Not Cooperating
and Rating Withdrawal)
Letter of Credit 7.5 CRISIL A4 (Migrated from
'CRISIL A4' Issuer Not
Cooperating and Rating
Withdrawal)
Term Loan 3.0 CRISIL B/Stable (Migrated
from 'CRISIL B/Stable'
Issuer Not Cooperating
and Rating Withdrawal)
ATPL, promoted by Mr Radhey Shyam Poddar and Mr Sunil Chand Ostwal,
was set up in January 1995. It manufactures jute yarn, jute fabrics,
jute bags, dyed and bleached hessian, and other products as per
customer specifications. Sale of sacking products contributes 75-80%
to revenue, while sale of hessian contributes the remainder.
ALBA ASIA: CARE Moves C Rating to Not Cooperating Category
----------------------------------------------------------
CARE Ratings has been seeking information from ALBA Asia Pvt Ltd to
monitor the rating vide e-mail communications dated
November 17, 2017, December 15, 2017, December 20, 2017 and numerous
phone calls. However, despite CARE's repeated requests, the company
has not provided the requisite information for monitoring the ratings.
In the absence of minimum information required for the purpose of
rating, CARE is unable to express opinion on the rating. In line with
the extant SEBI guidelines CARE's rating on ALBA Asia Pvt Ltd's bank
facilities will now be denoted as CARE BB/CARE A4; ISSUER NOT
COOPERATING.
CARE gave these ratings:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank
Facilities-
Term Loan 20.00 CARE C; ISSUER NOT COOPERATING
Users of this rating (including investors, lenders and the public at
large) are hence requested to exercise caution while using the above
rating(s).
The ratings take into account the weak financial health and reliance
on promoter for funds and the risk associated with
greenfield projects.
Detailed description of the key rating drivers
At the time of last rating on January 31, 2017 the following were
the rating strengths and weaknesses:
Key Rating Strengths
Experience of the promoter group in handling port operations: AAPL is
a Joint Venture between ABG Infralogistics Limited (ABG infra)
(through its wholly-owned subsidiary, ABG Ports Pvt. Ltd.) and Louis
Dreyfus Armateurs (LDA), France, holding 51% and 49% stake
respectively. ABG Infra has been in infrastructure space, primarily
crane renting, since 1983. LDA is a France-based conglomerate with its
presence in international maritime transport for more than a century.
Key Rating Weaknesses
Weak financial health, reliance on promoter funds for debt servicing:
During FY16, AAPL's income from operations significantly declined from
around INR34 crore in FY15 to around INR20 crore in FY16, mainly on
account of an overall decline in the cargo handled at the
Vishakhapatnam and the New Mangalore
port.
Risks associated with the green-field projects: The company has
undertaken execution of two green-field port terminal projects - at
Visakhapatanam (INR207.7 crore) and Tuticorin (INR592.9 crore),
through WQMPL and TCTPL wherein ABG-LDA has 49% and 74% equity holding
respectively. Though ABG Group has substantial experience in port
operations, it has not yet developed any port terminal.
The total capital expenditure has been revised upwards to around INR800 crore.
Issuance of substantial amount of the corporate guarantee on behalf of
its Group companies: The company has extended large corporate
guarantees on behalf of its subsidiaries/associate companies.
Alba Asia Private Limited (erstwhile ABG LDA Bulk Handling Private
Limited ) (AAPL) is a Joint Venture between ABG Infralogistics Limited
(ABG Infra) through its wholly owned subsidiary, ABG Ports Pvt. Ltd.
and Louis Dreyfus Armateurs (LDA), France, holding 51% and 49% stake
respectively. AAPL owns, operates, maintains and rents cranes of
various types and capacity, which are used for different applications,
mainly by the companies from the ports sector. The company at present
has operations in the following ports:
* Visakhapatnam - Contributes to major cargo volumes handled by the
company (contributed to around75% of the total cargo handled)
* New Mangalore-The Company continues to operate at the port and the
contract is renewed each year. (Contributed to 25% of the cargo
volume).
ALTECH INFRASTRUCTURE: CRISIL Assigns B Rating to INR8.5MM Loan
---------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable/CRISIL A4' rating on the bank
facilities of Altech Infrastructure Private Limited (AIPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan .23 CRISIL B/Stable
Proposed Long Term
Bank Loan Facility .37 CRISIL B/Stable
Letter of Credit 1.5 CRISIL A4
Bank Guarantee 8.4 CRISIL A4
Cash Credit 8.5 CRISIL B/Stable
The rating reflects the modest scale of operations, weak financial
risk profile and large working capital requirement in the heavy
fabrication industry. These weaknesses are partially offset by
extensive experience of promoters in the engineering products
business.
Key Rating Drivers & Detailed Description
Weaknesses
* Modest scale of operations amidst intense competition: Intense
competition from several small players executing mid-sized projects,
has kept scale of operations modest, with revenue of INR27.93 crore
for fiscal 2017, and limits the bargaining power with suppliers and
customers.
* Weak financial risk profile: Financial risk profile is marked by
high gearing of 1.77 times as on March 31, 2017, and moderate debt
protection metrics, with interest coverage and net cash accrual to
total debt ratios of 1.33 times and 0.05 time, respectively, for
fiscal 2017.
* Working capital intensity in operations: Operations are highly
working capital intensive, with gross current assets of 432 days as on
March 31, 2017, led by receivables and inventory of 60-90 days and
300-330 days, respectively. Working capital management is however,
partly aided by trade credit and advances from customers.
Strengths
* Extensive experience of the promoters: The two decade-long
experience of promoters, in manufacturing and supply of de-aerators,
feed water heaters, pressure vessels, and heat exchangers to prominent
players across industries such as paper, tyres, and steel, and their
sound understanding of market dynamics, will continue to support the
business risk profile.
Outlook: Stable
CRISIL expects AIPL will continue to benefit from the extensive
experience of its promoters, and established clientele. The outlook
may be revised to 'Positive' in case of sustained growth in
profitability and revenue, and if an equity infusion by the promoters,
strengthens the capital structure. The outlook may be revised to
'Negative' if lower-than-expected profitability, substantial working
capital requirement, or a large debt-funded capital expenditure,
weakens the financial risk profile.
AIPL was incorporated in 2006, by the promoters, Mr Anil Kumra, and
his sons, Mr Rohit Kumra and Mr Amit Kumra, who manage the daily
operations. Manufacturing facilities are located at Bhiwadi in
Rajasthan, and have a fabrication capacity of 2600 MT per month.
ANDHRA BARYTE: CRISIL Withdraws D Rating on INR13.5MM LT Loan
-------------------------------------------------------------
CRISIL has withdrawn its rating on the bank facilities of Andhra
Baryte Corporation Private Limited (ABCPL) at the company's request
and receipt of no due certificate from the bank. The rating action is
in-line with CRISIL's policy on withdrawal of its rating on bank
loans.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 5 CRISIL D (Withdrawn)
Proposed Long Term
Bank Loan Facility 13.5 CRISIL D (Withdrawn)
Term Loan 1.5 CRISIL D (Withdrawn)
ABCPL, incorporated in 2008, is involved in the beneficiation of
barytes. The company is a joint venture between IBC Ltd and Andhra
Pradesh Mineral Development Corporation Ltd. Its operations are
managed by Mr. Rajamohan Reddy.
ANNAPURNA SEEDS: CRISIL Assigns B+ Rating to INR6.5MM Cash Loan
---------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating on the long term
bank facilities of Annapurna Seeds and Farms (ASF)
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 6.5 CRISIL B+/Stable
The rating reflects modest scale of operations and operating margins.
Rating also reflects seasonality in business and high dependence upon
monsoon. These rating weaknesses are partially offset by proprietor's
extensive experience and established relationship with suppliers and
customers and moderate financial risk profile constrained by modest
net worth.
Key Rating Drivers & Detailed Description
Weaknesses
* Modest scale of operations and operating margins: With a turnover of
INR26 crore in fiscal 2017, scale of operations continues to remain
modest. This limits bargaining power with suppliers and distributors
and same along with low value addition has resulted in modest
operating margin (in the range of around 1.5% to 2.3% over the past
three years, through Fiscal 2017).
* Seasonal nature of operations and high dependence on monsoon and
crop health: ASF processes and conditions paddy seeds. As farming is a
seasonal activity, ASF's operations are seasonal. The seeds it
processes are sold to farmers mainly during sowing season of 'Kharif'
and 'Rabi' crop (May to November). As a result, cash flows are highly
skewed towards these months. Furthermore, requirement of seeds is
dependent on the monsoon and health of crops. This exposes the company
to the risk of limited availability of raw material resulting from a
weak monsoon or diseasae, which may result in lower operating income
and depressed profitability
Strengths
* Proprietor's extensive experience and established relationship with
suppliers and customers: Past 25 years of experience in the seed
industry and agricultural activities has led the proprietor to
establish strong relationship with farmers, who grow seeds for the
firm under the contract farming model. Customers comprise distributers
and traders in Andhra Pradesh, Telangana, Orrisa, Tamil Nadu and Uttar
Pradesh. Over the years the proprietor has been able to establish
strong distribution network with around 200 small and large
distributors supporting the business risk profile of the company
* Moderate financial risk profile constrained by modest net worth
Modest net worth: Net worth was INR2.7 crore as on March 31, 2017,
because of low accretion to reserves and is expected to remain modest
over the medium term in the absence of equity infusion.
* Moderate interest coverage ratio: Interest coverage ratio was
moderate at around 2.5 times for the Fiscal 2017.
Outlook: Stable
CRISIL believes that ASF will continue to benefit over the medium term
from the extensive experience of the proprietor. The outlook maybe
revised to 'Positive' if ramp-up in scale of operations and improved
profitability substantially strengthen financial risk profile.
Conversely, the outlook maybe revised to 'Negative' if low cash
accrual, or large working capital requirements or capital expenditure
weakens the financial risk profile.
Based out of Warangal (Andhra Pradesh), Annapurna seeds and farms
(ASF) is a sole proprietorship firm established in 1991 by Mr.
Venugopal Reddy. The firm is engaged in the grading, processing and
packaging of paddy seeds and has a processing plant in Warangal.
ASIAN BEVERAGE: CRISIL Reaffirms D Rating on INR16.9MM Term Loan
----------------------------------------------------------------
CRISIL has reaffirmed its rating on the long-term bank facilities of
Asian Beverage Private Limited (ABPL) at 'CRISIL D'. The rating
continues to reflect instances of delay in servicing term debt; the
delays were on account of nascent stage of operations and low cash
accrual.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 4 CRISIL D (Reaffirmed)
Cash Term Loan 16.9 CRISIL D (Reaffirmed)
Working Capital
Facility 0.1 CRISIL D (Reaffirmed)
The rating also reflects a weak financial risk profile and working
capital-intensive operations. These rating strengths are partially
offset by the extensive entrepreneurial experience of the promoters.
Key Rating Drivers & Detailed Description
Weakness
* Weak financial risk profile: The networth was low and the gearing
high at INR2.1 crore and 13.3 times, respectively, as on March 31,
2017. Debt protection metrics were weak. Net cash accrual was only
INR4 lakh in fiscal 2017 against total debt of around INR28 crore as
on March 31, 2017. The interest coverage ratio was also low at 1.01
times in fiscal 2017.
* Working capital-intensive operations: Gross current assets were high
at 211 days driven by large inventory of 185 days and moderate
receivables of 26 days, as on March 31, 2017.
Strength
* Extensive experience of the promoters: The promoters have extensive
experience in different fields such as manufacturing of preforms and
retailing. Benefits from the entrepreneurial experience of the
promoters should continue.
ABPL, set up in 2013, is based in Chennai; its operations are managed
by Mr C Vijaya Kumar and Mr S Arihanth. The company manufactures
fruit-based and carbonated soft drinks.
AXWELL GRANITO: CRISIL Migrates INR20.5M Loan Rating to B+/Stable
-----------------------------------------------------------------
Due to inadequate information, CRISIL, in line with Securities and
Exchange Board of India guidelines, had migrated the rating on the
long-term bank facilities of Axwell Granito Pvt Ltd (AGPL) to 'CRISIL
B+/Stable' Issuer Not Cooperating'. However, management subsequently
started sharing information necessary for carrying out a comprehensive
rating review. Consequently, CRISIL is migrating the rating on the
long-term facilities from 'CRISIL B+/Stable/Issuer Not Cooperating to
'CRISIL B+/Stable'. CRISIL has assigned its 'CRISIL A4' rating to the
short-term facility.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 3 CRISIL A4 (Reassigned)
Cash Credit 10 CRISIL B+/Stable (Migrated from
'CRISIL B+/Stable' Issuer Not
Cooperating)
Long Term Loan 20.5 CRISIL B+/Stable (Migrated from
'CRISIL B+/Stable' Issuer Not
Cooperating)
Proposed Term Loan 20 CRISIL B+/Stable (Migrated from
'CRISIL B+/Stable' Issuer Not
Cooperating)
The ratings reflect the nascent stage of AGPL's business, expected
modest scale of operations in the intensely competitive ceramic tiles
industry, and large working capital requirement. These weaknesses are
partially offset by the extensive experience of its promoters, and
benefits derived from favourable location.
Key Rating Drivers & Detailed Description
Weaknesses
* Small scale of operations: Intense competition will likely continue
to constrain scale of operations, reflected in expected revenue of
INR35-40 crore in fiscal 2018. Competition also constrains operating
profitability and ability to pass on increases in raw material prices
to customers.
* Average financial risk profile: Gearing was 2.10 times as on March
31, 2017, because of long-term debt obligation, sizeable working
capital borrowing, and modest networth (Rs 10.56 crore). Gearing may,
however, improve over the medium term with gradual repayment of term
debt and absence of large capital expenditure (capex).
* Working capital-intensive operations: Gross current assets are
expected to remain over 200 days over the medium term, backed by
stretched receivables and moderate inventory. This will lead to higher
dependence on bank limit.
Strengths
* Extensive experience of promoters: Benefits from promoters'
experience of over a decade in the ceramic tiles segment and their
healthy relationship with dealers and suppliers should continue to
support business risk profile.
* Strategic location: Presence in Morbi, the country's ceramics hub,
should facilitate easy access to clay (key input) and ensure
availability of contractors and skilled labourers, strong customer
base, and community support.
Outlook: Stable
CRISIL believes AGPL will continue to benefit over the medium term
from promoters' extensive experience and established relationship with
customers and suppliers. The outlook may be revised to 'Positive' in
case of sizeable cash accrual backed by increase in topline or
higher-than-expected operating margin. The outlook may be revised to
'Negative' if steep decline in cash accrual, deterioration in working
capital management, or any large capex further weakens financial risk
profile particularly liquidity.
Established in Morbi in 2016 by Mr Balkrishna Ambani, Mr Krushnakan
Ambani, Mr Rajendrakumar Manvar, and Mr Jagdish Ambani, AGPL
manufactures double charge and soluble salt vitrified tiles and
commenced operations from January 2017.
BALAJI MOBITECH: CARE Lowers Rating on INR10cr LT Loan to D
-----------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Balaji Mobitech Pvt Ltd (BMPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 10.00 CARE D Revised from
Facilities CARE BB- (Stable)
Short Term Bank 10.00 CARE D Revised from
Facilities CARE A4
Detailed Rationale & Key Rating Drivers
The revision in the ratings assigned to the bank facilities of BMPL
takes into account, ongoing delays in interest servicing by the
company due to ongoing liquidity mismatches.
Detailed description of the key rating drivers
Key Rating Weaknesses
Ongoing Delays in interest servicing: Due to ongoing tax & regulatory
issues there have been liquidity mismatches, leading to ongoing delays
in servicing of interest by the company. The same has been confirmed
with the company's banker.
Key Rating Strengths
Experienced Promoters: BMPL has been in the mobile trading business
since last 8 years. The company has recently been
purchased by Mr. Amit Singhania & Mr. Amit Aggarwal, who have been
associated with BMPL since inception. The directors also have previous
experience in this field. Mr. Amit Singhania has been in mobile
trading line for past 13 years.
Balaji Mobitech Pvt. Ltd. (BMPL) was incorporated on April 25, 2007.
BMPL is involved in trading of mobile phones, mobile
phone batteries & chargers and accessories such as hand free kit, data
cable, MMC card etc. As already communicated during last review, in
July'15, Mr. Sushil Kumar sold his entire share to the current
director's viz. Mr. Amit Singhania & Mr. Amit Aggarwal. The company
buys 'MAXX' brand mobile handsets, batteries and other accessories
from Maxx Mobile Communications Ltd, Maxx Moblink Pvt.Ltd, and other
distributors of MMCL & MMPL. The company also sells mobile phones &
accessories imported from China.
BK THRESHERS: ICRA Reaffirms B Rating on INR120cr Cash Loan
-----------------------------------------------------------
ICRA Ratings has reaffirmed the long-term rating of [ICRA]B to the
INR110.00 crore term loan, INR120 crore cash credit facilities and
INR4 crore long-term non-fund based facilities and the short-term
rating of [ICRA]A4 to the INR1 crore short-term non-fund based
facilities of BK Threshers Private Limited. ICRA has also reaffirmed
the long-term rating of [ICRA]B and the short-term rating of [ICRA]A4
to the INR5 crore unallocated limits of BKTPL. The outlook on the
long-term rating is 'Negative'.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term Loan 110.00 [ICRA]B(Negative) Reaffirmed
Cash Credit 120.00 [ICRA]B(negative) Reaffirmed
Letter of Credit 1.00 [ICRA]A4 Reaffirmed
Bank Guarantee 4.00 [ICRA]B(Negative); Reaffirmed
Unallocated 5.00 [ICRA]B(Negative)/[ICRA]A4
Reaffirmed
Rationale
The revision in rating outlook factors in the steep de-growth in
revenue of BKTPL of 35% year-on-year(YoY) in FY2017(provisional) owing
to weak order in-flow from export and domestic segments. In addition,
the company's financial risk profile continues to remain weak
characterised by a stretched capital structure and modest debt
protection metrics. Furthermore, the capacity utilization of the
tobacco threshing unit continued to remain moderate in FY2017 and H1
FY2018 owing to lower than expected order in-flow leading to
suppressed return indicators. ICRA also takes note of the stretched
liquidity position of the company due to high working capital
intensity owing to high inventory holding requirements.
Moreover, the ratings continue to be constrained by the high customer
concentration risk with the top five customers accounting for over 80%
of the total sales in FY2017. The ratings also continue to remain
tempered by the regulatory risks such as regulation of quantity of
tobacco production by tobacco board and India's need to reduce tobacco
production over the long term with India being signatory of WHO's
Framework Convention on Tobacco Control. The ratings, however,
favourably factor the established relationship of the company with
international tobacco purchasing agents & domestic cigarette
manufacturers as reflected by receipt of repeat orders.
Outlook: Negative
The 'Negative' outlook reflects ICRA's expectation that the financial
risk profile is likely to continue to remain weak owing to stretched
liquidity position and modest debt protection metrics. The outlook
will be revised to 'Stable' in case of healthy revenue growth and
profitability levels coupled with effective working capital
management, which, in turn, would lead to generation of adequate
cashflows for meeting the company's funding requirements.
Key rating drivers
Credit strengths
Experience of promoters in the tobacco industry: The promoters of
BKTPL have over three decades of experience in the Indian Tobacco
Industry. The company was founded by Mr. Bellam Kottiah who served as
the vice chairman of the Tobacco Board (constituted by Parliament for
regulating tobacco cultivation and business) and as the President of
Indian Tobacco Association (apex body of Tobacco Exports and Dealers
in India) in the past.
Long-term relationship with key customers: The company has long-term
relationships with reputed buyers such as Universal Leaf Company Ltd
(ULC) for supply of tobacco in the export market and with large
players such as Godrej Philips, ITC etc for job works.
Credit challenges
High working capital intensity resulting from high inventory levels
which impacts liquidity: BKTPL's working capital intensity remains
high due to high inventory holding requirements. This is due to the
seasonality associated with cultivation of tobacco owing to which the
company needs to maintain stocks to ensure sales throughout the year.
Financial profile characterised by leveraged capital structure and
weak debt coverage indicators: The total debt of the company primarily
constitutes of working capital borrowings and term loans (availed
initially for setting up the threshing unit). The debt protection
metrics remain weak with interest coverage ratio of 1.36 times and
NCA/Total Debt of 5% for FY2017(provisional).
High customer concentration risk: Revenues from the top five customers
stood remained high at 83% in FY2017 and 63% H1 FY2018 indicating high
dependence of the company on a few customers for its revenues.
Vulnerable to regulatory risks pertaining to tobacco cultivation: The
company's performance remains exposed to regulatory risks as the
tobacco Board dictates the price and quantities to be produced in a
given year. Furthermore, given that India is a signatory of WHO's
Framework Convention on Tobacco Control (FCTC), it needs to reduce
production of tobacco over the long term. This could impact BKTPL's
performance going forward.
Incorporated in 2009, BKTPL is promoted by Mr. Bellam Kotaiah and is
involved in threshing and re-drying of tobacco in addition to carrying
tobacco exports. The Company setup a 12 TPH (tons per hour) threshing
plant at Kalikivai, near Tangutur, Andhra Pradesh and the plant
commenced operations from April 2012. The company purchases various
types of tobacco (Flue Cured Virginia (FCV) and non-Virginia tobacco)
from Andhra Pradesh and Karnataka tobacco auction platforms (conducted
by Government of India), processes and sells it to domestic / overseas
clients.
In FY2017, on a provisional basis, the company reported a net profit
of INR4.18 crore on an operating income of INR124.95 crore, as
compared to a net loss of INR23.21 crore on an operating income of
INR344.05 crore in the previous year.
BLUE STAR: CRISIL Moves D Rating to Not Cooperating Category
------------------------------------------------------------
CRISIL has been consistently following up with Blue Star Building
Materials Private Limited (BSBMPL; part of the Blue Star group) for
obtaining information through letters and emails dated
October 16, 2017 and January 12, 2018 among others, apart from
telephonic communication. However, the issuer has remained non
cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 12.5 CRISIL D (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 Blue Star Building Materials Private Limited which
restricts CRISIL's ability to take a forward looking view on the
entity's credit quality. CRISIL believes information available on Blue
Star Building Materials Private Limited 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 Blue
Star Building Materials Private Limited to ' CRISIL D Issuer not
cooperating'.
For arriving at its rating, CRISIL has combined the business and
financial risk profiles of Blue Star Construction Co (BSCC) and
BSBMPL. This is because the two entities, together referred to as the
Blue Star group, have strong financial and operational linkages and a
common management.
The Blue star group is promoted by Navi Mumbai-based Thakur family.
Established as a partnership firm in 1978, BSCC constructs and
maintains roads. BSBMPL, incorporated in 1996, manufactures and lays
paver blocks
CARRYCON INDIA: ICRA Cuts Rating on INR6.5cr Cash Loan to B
-----------------------------------------------------------
ICRA Ratings has revised the long-term rating assigned to the
INR10.10-crore bank facilities of Carrycon India Limited from [ICRA]B+
to [ICRA]B. The outlook on the long-term rating is Stable.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 6.50 [ICRA]B(Stable); revised from
[ICRA]B+(Stable)
Bank Guarantee 3.30 [ICRA]B(Stable); revised from
[ICRA]B+(Stable)
Unallocated 0.30 [ICRA]B(Stable); revised from
[ICRA]B+(Stable)
Rationale:
ICRA's rating revision considers the continued deterioration in CIL's
receivable realisation, resulting in a stretched liquidity position.
This apart, the rating factors in CIL's lower cash accruals due to its
stagnant and small scale of operations, high interest expenses, and
modest margins due to execution delays in some projects, absence of
price-escalation clause and high competition. However, the rating
positively factors in CIL's long track record in the telecom
infrastructure support business, experienced promoters, and its
association with reputed clients such as Delhi Metro Rail Corporation
(DMRC), and Bharat Sanchar Nigam Ltd. (BSNL) which assists in getting
repeat orders.
The company's ability to improve its liquidity position and execute
its order book profitably will be the key rating sensitivities. Its
ability to manage funding for bidding and executing orders will also
be a determinant of its ability to scale up operations.
Outlook: Stable
ICRA believes that the company will continue to benefit from the
extensive experience of its promoters and its association with
existing clients. The outlook may be revised to Positive if
substantial growth in revenue and profitability and improvement in
working-capital cycle strengthens the financial risk profile. The
outlook may be revised to Negative if the cash accruals are lower than
expected or if more stretch in the working capital cycle further
weakens liquidity profile.
Key rating drivers:
Credit strengths
More than 20 years of experience of promoters in telecom
infrastructure and support business: The promoters of the company Mr.
G. D. Rao and Mr. Prakash Bhanu have extensive experience in the field
of telecom infrastructure and support business. Incorporated in 1996,
the company started its operations with laying of all types of
underground telephone cables such as Polythene Insulated Jelly Filled
(PIJF) and optical fibre cable etc. It has also started offering total
telecom solution to telecom-providing companies and diversified into
the field of trenchless technology for installation all kind of
underground laying and sewerage, water line construction. CIL has
completed turnkey project for DMRC Delhi Phase-I (consisting of 96
stations) and is undertaking telecom projects for DMRC in Jaipur and
New Delhi for Phase-III expansion. Apart from DMRC, CIL has completed
several projects for reputed clients like Mahanagar Telephone Nigam
Limited, Bharat Sanchar Nigam Limited, Telecommunication Consultant
India Ltd., Bharti Airtel Limited, Vodafone and Reliance Infocom Ltd.
Over the years, it has developed relationship with its clients that,
along with the satisfactory work executed by it in the past, has
resulted in repeat orders including annual maintenance orders for the
company.
Diversified order book, good demand potential for telecom networking
in rural India: CIL serves three end markets namely telecom, civil
construction and public health engineering. Laying out OFCs, erecting
telecom towers and providing maintenance work is the traditional
business of CIL. The revenue visibility remains moderate with Order
Book/Operating Income (OB/OI) of 1.17 times as of November 2017. In
fact, 97% of the current order book is from telecom networking, OFC
laying and maintenance work. The biggest order (in collaboration with
ABS India Pvt. Ltd.) is from DMRC, which comprises around 30% of the
existing order book and is being executed in the NCR. The company
recently received the second-largest order of INR3.90 crore from MTNL,
New Delhi. It is also executing OFC laying work for BSNL in Bihar,
Madhya Pradesh, Rajasthan and Haryana. Overall, the order book of the
company remains moderately diversified across geographies and clients.
Moderate coverage indicators: CIL's tangible net worth increased from
INR8.77 crore as on March 31, 2016 to INR8.98 crore only as on March
31, 2017 because of the weak accruals generated. The company's debt
mainly comprises working capital limits, and unsecured loans with no
long-term loans from banks. In the backdrop of modest debt levels of
INR9.55 crore, CIL's capitalisation ratios remained comfortable with
gearing at 1.06 times and TOL/TNW at 1.50 times as of March 31, 2017.
The debt-coverage indicators of the company deteriorated further in
FY2017, with increase in interest costs and total debt. CIL's interest
and debt-coverage metrics remained moderate with interest coverage
ratio of 1.32 times and DSCR of 1.34 times, in the absence of any
major long-term repayments. However, Debt/OPBDIT remained weak at 5.86
times.
Credit challenges
Modest scale of operations, high interest costs and absence of price
escalation impacts profitability: CIL is a small-sized contractor with
OI of ~INR16-17 crore. The OI remains range bound, partly because of
funding constraints in the backdrop of weak accruals, low fund-based
limits and less available bank guarantees for further bidding. The
operating margin of CIL has remains moderately healthy at around 9.5%
because of the technical nature of the work. However, the company
faces raw material price risk due to the absence of price-escalation
clause in the contracts. Though the company did not undertake any
material-related orders/trading component, the margins were impacted
in FY2017 by higher technical requirements and associated delays in
some of the orders. Interest expenses increased due to higher
utilisation of limits because of stretched receivables. Higher
interest expenses resulted in lower net profit margin of 1.17% in
FY2017 compared with 1.55% in FY2016. Return indicators also remained
low with ROCE of 8.35% and RONW of 2.25% as most of the funds were
used to service high working-capital requirements.
High and increasing working-capital intensity; delayed payments from
clients keeps liquidity position under pressure: The working-capital
intensity of the company has increased from 80.53% in FY2015 to 92.41%
in FY2016 to 95.77% in FY2017 due to rise in debtors. Also, delayed
and stuck payments from clients have increased the company's
working-capital intensity. Due to high working-capital requirement and
low cash credit limit, the company's limit utilisation has been high.
This in turn indicates its stretched liquidity position. The debtor
days have consistently increased from 229 days in FY2015 to 242 days
in FY2016 to 303 days in FY2017 due to delayed payments from
Government clients.
Incorporated in 1995, CIL is promoted by Mr. G. D. Rao, Mr. Prakash
Bhanu, and Mrs. Sadhana Rao. It provides civil contractor/engineering
services including telecom infrastructure support services, telecom
network maintenance services, and installation of telecom towers,
water supply, sewerage, de-silting, trunk sewer lines and civil
construction work. CIL has offices in two locations - Delhi and
Chennai. In the northern region (Delhi) CIL is involved in laying
cables and water pipelines, whereas in the southern region (Chennai)
it is engaged in erecting telecom towers and civil construction work.
In FY2017, the company reported a net profit of INR0.20 crore on an OI
of INR17.12 crore compared with a net profit of INR0.26 crore on an OI
of INR16.84 crore in the previous year.
CHANDRA ENGINEERS: CRISIL Moves B+ Rating to Not Cooperating Cat.
-----------------------------------------------------------------
CRISIL has been consistently following up with Chandra Engineers (CE)
for obtaining information through letters and emails dated November 6,
2017 and January 5, 2018 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit/ 4.45 CRISIL B+/Stable (Issuer Not
Overdraft facility Cooperating; Rating
Migrated)
Rupee Term Loan 7.55 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 Chandra Engineers which restricts CRISIL's ability
to take a forward looking view on the entity's credit quality. CRISIL
believes information available on Chandra Engineers 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
Chandra Engineers to 'CRISIL B+/Stable Issuer not cooperating'.
Set up as a proprietorship firm in 1967, CE is promoted by Mr Satish
Chandra. The firm manufactures various electrical and metal sheet
stamping components, which majorly find application in the automotive,
engineering and electronics industries. CE has manufacturing
facilities at Manesar, Haryana and Alwar, Rajasthan.
HEERA RICE: CRISIL Moves B+ Rating to Not Cooperating Category
--------------------------------------------------------------
CRISIL has been consistently following up with Heera Rice Mills (HRM)
for obtaining information through letters and emails dated December 6,
2017 and January 5, 2018 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 17.5 CRISIL B+/Stable (Issuer Not
Cooperating; Rating Migrated)
Proposed Fund-
Based Bank Limits .22 CRISIL B+/Stable (Issuer Not
Cooperating; Rating Migrated)
Term Loan 1.28 CRISIL B+/Stable (Issuer Not
Cooperating; Rating Migrated)
Warehouse Receipts 7.5 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 Heera Rice Mills which restricts CRISIL's ability
to take a forward looking view on the entity's credit quality. CRISIL
believes information available on Heera Rice Mills is consistent with
'Scenario 2' outlined in the 'Framework for Assessing Consistency of
Information with CRISIL BBB' rating category or lower'.
Therefore, on account of inadequate information and lack of management
cooperation, CRISIL has migrated the rating on bank facilities of
Heera Rice Mills to 'CRISIL B+/Stable Issuer not cooperating'.
HRM, set up in 2008, mills and sorts rice. It produces polished and
unpolished rice, and sells to exporters. The firm has milling capacity
of 12 tonne per hour (tph) and sorting capacity of 20 tph in Assand,
Haryana. It is managed by Mr Satish Goel and his family members.
INDIANA STEEL: CRISIL Assigns B Rating to INR2MM Cash Loan
----------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable/CRISIL A4' ratings on the
bank facilities of Indiana Steel Corporation (INSTCO).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 2 CRISIL B/Stable
Letter of Credit 5 CRISIL A4
The rating reflects promoter's extensive experience in the metal and
cement trading business. This strength is partially offset by presence
in the highly fragmented and competitive metal trading industry.
Key Rating Drivers & Detailed Description
Weakness
* Presence in the highly fragmented and competitive metal and cements
trading industry: INSTCO trades in TMT bars and Cements products. The
metal and cement trading industry in India is fragmented with several
players. Hence, individual players have limited pricing power and
usually are price takers in the market. INSTCO primarily trades in TMT
bars, and cement products and sheets which is a highly fragmented
business, intensifying competition. Besides, the resilience of a
player with a larger scale to external shocks is significantly higher
than a player with smaller scale.
* Below average Financial Risk profile: Net worth were modest at INR1
crore as on March 31, 2017 constrained by gearing of 1.01 times as on
March 31,2017.Debt protection metrics were also week, as reflected in
interest coverage and net cash accrual to total debt ratios of 1.01
times and 0.03 time, respectively, in fiscal 2017.
Strength
* Promoter's extensive experience in the metal and cement trading
business: Mr Shameer Dawood has over 1 decade of experience in the
metal trading industry. He initially started dealing in cement and
steel in 2005 through proprietorship firm 'Indiana Sales Corporation'
(INSTCO), which procures from domestic market. INSTCO was eventually
reconstituted in 2008. Over the years, he has developed sound
understanding of the metal trading industry which has helped
anticipate price trends and make timely purchases and stocking
decisions.
Promoter's extensive experience, understanding of the dynamics of the
market and established relations with suppliers and customers should
continue to support the business risk profile.
Outlook: Stable
CRISIL believes INSTCO will continue to benefit over the medium term
from the promoter's extensive experience. The outlook may be revised
to 'Positive' if better operating margin leads to higher accrual and a
stronger capital structure. The outlook may be revised to 'Negative'
in case of a significant decline in revenue or profitability, or
stretch in working capital cycle, weakening the financial risk
profile.
Indiana Steel Corporation (INSTCO) was incorporated in 2008 and is
promoted by Mr. Shameer dawood. It was formed in 1998 the firm is
engaged trading cement,TMT bars. Mr. Dawood looks after the day to day
business operations of the company. The registered office of the
company is located in Kerala.
J.M.D. CORPORATION: CRISIL Moves D Rating to Not Cooperating
------------------------------------------------------------
CRISIL has been consistently following up with J.M.D. Corporation of
India Limited (JMD) for obtaining information through letters and
emails dated October 23, 2017 and January 12, 2018 among others, apart
from telephonic communication. However, the issuer has remained non
cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 18.5 CRISIL D (Issuer Not
Cooperating; Rating Migrated)
Proposed Long Term 11.5 CRISIL D (Issuer Not
Bank Loan Facility 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 J.M.D. Corporation of India Limited, which
restricts CRISIL's ability to take a forward looking view on the
entity's credit quality. CRISIL believes information available on
J.M.D. Corporation of India Limited 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
J.M.D. Corporation of India Limited to CRISIL D Issuer not
cooperating'.
Furthermore, the company has not paid the fee for conducting rating
surveillance as agreed to in the rating agreement.
JMD, set up in 2012, is a proprietorship concern of Mr. Ashwini
Agarwal. The firm trades in iron and steel products including
cold-rolled and hot-rolled coils, steel sheets, steel beams, steel
plates, thermo-mechanically treated bars, ingots, and billets. With
over a decade's experience, Mr. Agarwal oversees the firm's
operations.
JIWANSAAGAAR REALTY: CRISIL Reaffirms B+ Rating on INR14MM Loan
---------------------------------------------------------------
CRISIL has reaffirmed its rating on the long-term bank facility of
Jiwansaagaar Realty Private Limited (JRPL) at 'CRISIL B+/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 14 CRISIL B+/Stable (Reaffirmed)
The rating continues to reflect exposure to risks related to
implementation of the ongoing project and vulnerability to cyclicality
in demand inherent in the real estate sector. These weaknesses are
partially offset by the extensive entrepreneurial experience of the
promoters.
Key Rating Drivers & Detailed Description
Weaknesses
* Exposure to inherent cyclicality in the real estate industry: The
real estate industry is cyclical, has volatile prices, opaque
transactions, and is intensely competitive with many regional players.
Demand in the residential real estate segment is directly linked to
overall economic conditions, interest rates and customer sentiments.
In the recent past, high interest rates and cautious consumer
sentiments have affected demand and increased construction cost. Any
sluggishness in demand can adversely affect realisations and hence
profitability, and delay projects.
* Exposure to implementation risk in the ongoing project: The company
has completed more than 85% of phase 1 of Garden Heights. However,
phase II is in a very initial stage of construction with less than 10%
of the work undertaken, leading to high implementation risk.
Strength
* Entrepreneurial experience of promoters: The promoters have diverse
business interests (manufacturing and trading, publishing, real
estate, and hospitality) and hence a strong market position. They have
undertaken various residential and commercial real estate projects
through group companies, Jiwansaagaar Towers Pvt Ltd and Marigold
Heights Pvt Ltd, resulting in significant industry insight.
Outlook: Stable
CRISIL believes JRPL will continue to benefit from the extensive
entrepreneurial experience of its promoters. The outlook may be
revised to 'Positive' if on-time completion of the project and
better-than-expected customer bookings improve liquidity. The outlook
may be revised to 'Negative' if a time or cost overrun in the project
or low customer bookings adversely impacts liquidity.
Incorporated in 2013, JRPL is currently executing a residential real
estate project, Garden Heights, in Bhagalpur, Bihar. Mr Anil
Kishorepuria manages operations.
JJ PV SOLAR: CRISIL Moves B+ Rating to Not Cooperating Category
---------------------------------------------------------------
CRISIL has been consistently following up with JJ PV Solar Private
Limited (JJPV) for obtaining information through letters and emails
dated November 29, 2017 and January 12, 2018 among others, apart from
telephonic communication. However, the issuer has remained non
cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 9.5 CRISIL B+/Stable (Issuer Not
Cooperating; Rating Migrated)
Proposed Long Term
Bank Loan Facility .5 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 JJ PV Solar Private Limited, which restricts
CRISIL's ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on JJ PV Solar Private
Limited 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 JJ
PV Solar Private Limited to CRISIL B+/Stable Issuer not cooperating'.
Incorporated in 2011, JJPV manufactures solar PV panels. The company's
product portfolio comprises of solar crystalline modules (panels),
solar power plant (wherein the company offers end-to end services
ranging from concept to commissioning of rooftop solar power plants),
solar lighting systems, and solar water pumping systems The company
has its manufacturing facility in Rajkot (Gujarat). JPSPL is promoted
by Mr. Dhamjibhai Patel, Mr. Prashantbhai Patel, Mr. Rajendra Rawal
and Mr Pushkarbhai Rawal.
MUTNEJA RICE: CRISIL Moves B+ Rating to Not Cooperating Category
----------------------------------------------------------------
CRISIL has been consistently following up with Mutneja Rice Mills
(MRM) for obtaining information through letters and emails dated
November 23, 2017 and January 5, 2018 among others, apart from
telephonic communication. However, the issuer has remained non
cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 18 CRISIL B+/Stable (Issuer Not
Cooperating; Rating Migrated)
Proposed Long Term 2 CRISIL B+/Stable (Issuer Not
Bank Loan Facility 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 Mutneja Rice Mills which restricts CRISIL's
ability to take a forward looking view on the entity's credit quality.
CRISIL believes information available on Mutneja Rice Mills 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
Mutneja Rice Mills to 'CRISIL B+/Stable Issuer not cooperating'.
MRM processes basmati rice. Its facility in Jalalabad, Punjab, has
milling and sorting capacity of 5 tonne per hour.
NOTTO GRANITO: ICRA Assigns B Rating to INR26cr Term Loan
---------------------------------------------------------
ICRA Ratings has assigned the long-term rating of [ICRA]B for the
INR26.00-crore term loan and the INR8.00-crore cash credit facility of
Notto Granito LLP. ICRA has also assigned the short-term rating of
[ICRA]A4 for the INR2.50-crore non-fund based bank guarantee of NGL.
The outlook on the long-term rating is Stable.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-based-Term
Loan 26.00 [ICRA]B (Stable); Assigned
Fund-based-Cash
Credit 8.00 [ICRA]B (Stable) ; Assigned
Non-fund Based-
Bank Guarantee 2.50 [ICRA]A4; Assigned
Rationale
The assigned ratings favorably factor in the experience of NGL's
promoters in the ceramic industry, the benefits derived from its
associate concern's marketing and distribution network and the
location-specific advantage, which ensures an easy availability of raw
materials.
However, the assigned ratings are constrained by the nascent stage of
the firm's operations, as it is still in the project stage and the
risks associated with the stablisation of the plant, as per the
expected operating parameters. The ratings also remain constrained by
the highly fragmented nature of the ceramic tiles industry resulting
in intense competition. Furthermore, the ratings also take note of the
cyclical nature of the real estate industry which is the main
consuming sector and the exposure of the firm's profitability to
volatility in raw material and gas prices. The assigned ratings also
take into account NGL's financial profile, which is likely to remain
weak in the near term, given the debt-funded nature of the project
(debt to equity ratio of 1.91 times) and impending debt repayment
obligations.
Outlook: Stable
ICRA believes that NGL will continue to benefit from the vast
experience of its promoters and the distribution network of its
associate concerns. The outlook may revised to Positive with the
timely commissioning of operations within the estimated cost and if
the firm is able to establish a market for its products, scale up
operations in a profitable manner and maintain a healthy financial
risk profile. The outlook may be revised to Negative if cash accruals
are lower than expected, or a delay in debt repayments or a stretch in
working capital cycle, weakens the liquidity position of the firm.
Key rating drivers
Credit strengths
Experience of promoters in the ceramic industry: The key promoters of
the firm have an experience of more than seven years in the ceramic
industry vide their association with other ceramic entities that
operate in the same business sector. NGL also derives support from the
marketing and distribution network of its associate concerns.
Favorable location for raw material: The manufacturing facility of the
firm is located in the ceramic tiles manufacturing hub of Morbi
(Gujarat), which provides easy access to quality raw materials and
allows savings on the transportation cost.
Credit challenges
Risks associated with stabilisation and successful scale up of
operations: Being in a nascent stage, with the operations yet to be
commissioned (expected from April, 2018), the firm remains exposed to
the risks associated with stabilisation and successful scale up of
operations of the plant, as per the expected parameters. Moreover, the
debt repayments, coupled with the long gestation period are likely to
keep the credit profile constrained over the near term. The timely
commissioning of operations without any significant cost overruns
would remain a key rating sensitivity.
Intense competition in the ceramic industry: The firm faces stiff
competition from established tile manufacturers as well as unorganised
players which limits its pricing flexibility.
Vulnerability of profitability and cash flows to cyclicality inherent
in the real estate industry: The real estate industry is the key
end-user for vitrified tiles. Hence, the profitability and cash flows
are likely to remain vulnerable to the inherent cyclicality of the
real estate industry.
Vulnerability of profitability to any adverse fluctuations in raw
material and fuel prices: The margins of the firm are primarily
affected by the raw material price and piped natural gas/coal price
fluctuation. Any adverse movement in the prices of raw materials and
fuel could have an adverse impact on NGL's margins, considering the
limited ability to pass on the price hike owing to intense competition
in the ceramic industry. The price fluctuations also impact the
realisations of the firm.
NGL was incorporated in July, 2017, as a limited liability partnership
firm promoted by Mr. Vishal Ghodasara and 12 other partners. The firm
is setting up a greenfield project at Morbi in Gujarat to manufacture
glazed vitrified tiles. The unit has an estimated installed capacity
of producing 72000 metric tonne of vitrified tiles per annum. The firm
proposes to commence operations at its new plant from April, 2018.
PILANIA STEELS: CRISIL Assigns C Rating to INR7.5MM Cash Loan
-------------------------------------------------------------
CRISIL has revoked the suspension of its ratings on the long-term bank
facility of Pilania Steels Private Limited (PSPL) and assigned 'CRISIL
C' rating. CRISIL had suspended the ratings on October 4, 2016, as the
company had not provided the necessary information required for a
rating review. PSPL has now shared the requisite information, enabling
CRISIL to assign its ratings. .
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 7.5 CRISIL C (Assigned, Suspension
revoked)
The rating reflects a weak financial risk profile, subdued business
risk profile driven by continuous losses and sharp decline in revenue
and exposure to risks related to the highly competitive and fragmented
steel industry. These rating weaknesses are partially offset by the
extensive industry experience of the promoters.
Key Rating Drivers & Detailed Description
Weaknesses:
* Weak financial risk profile: Financial risk profile is weak marked
by a negative networth and high gearing and weal debt protection
metrics. The company had incurred losses in last two fiscals which led
to erosion of networth and weakening of financial risk profile.
* Sharp decline in business and exposure to risks related to the
highly competitive and fragmented steel industry: The revenue declined
sharply to less than INR 4 crore in fiscal 2017 from INR55 crore in
previous year due to shut down of facility for major part of the year.
Although the facility restarted the operations, the revival in
performance remains critical. Further steel industry in India is
dominated by a large number of unorganised players catering to local
demand. Due to the highly fragmented nature of the industry and
limited differentiation in products, the operations will remain
susceptible to competitive and fragmented nature of industry.
Strength:
* Industry experience of the promoters: The promoters have around two
decades of experience in the secondary steel industry. This has
resulted in a strong relationship with suppliers and customers and
will help the company to revive its business operations.
PSPL was incorporated on August 28, 1995, in Bhilai, Chhattisgarh,
promoted by Mr Kailash Agarwal and Mr Ram Bhagat Agarwal. The company
is engaged in steel wire drawing.
PLY COM: CRISIL Lowers Rating on INR5MM Cash Loan to B-
-------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facility of Ply
Com Private Limited (PCPL) to 'CRISIL B-/Stable' from 'CRISIL
B/Stable'; short-term rating has been reaffirmed at 'CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 5 CRISIL B-/Stable (Downgraded
from 'CRISIL B/Stable')
Letter of Credit 5 CRISIL A4 (Reaffirmed)
The downgrade reflects weak financial risk profile because of muted
debt protection metrics, modest networth, and tight liquidity. The
ratings continue to reflect PCPL's modest scale of operations, large
working capital requirement, and exposure to intense competition in
the iron and steel trading business. These weaknesses are partially
offset by promoters' extensive experience.
Key Rating Drivers & Detailed Description
Weaknesses
* Weak financial risk profile: Networth was small at INR5.22 crore as
on March 31, 2017, and total outside liabilities to adjusted networth
ratio moderate at 2.7 times. Both are expected to remain at similar
levels over the medium term. Debt protection metrics were average,
with interest coverage and net cash accrual to total debt ratios of
1.19 times and 0.04 time, respectively, in fiscal 2017. Metrics are
likely to remain subdued over the medium term. However, gearing was
healthy at 0.95 time as on March 31, 2017, and will remain steady over
the medium term in the absence of any further debt-funded capital
expenditure (capex).
* Modest scale of operations amid intense competition: Though revenue
increased 23% in fiscal 2017, it remains small at INR51.5 crore, which
limits bargaining power with customers and suppliers. Also, the iron
and steel trading business is intensely competitive due to low entry
barrier. This, along with non-exclusivity of contracts and
commoditised products, limits scope to increase scale. Trading nature
of business with limited value addition led to low operating
profitability of 1.7% for fiscal 2017. Profitability will remain weak
over the medium term
* Large working capital requirement: Gross current assets were 128
days (remained higher in the past) as on March 31, 2017, due to
stretched receivables of 59 days and inventory of 25 days. Also, the
company provides credit of around 40 days on sale of
thermo-mechanically treated bars, and of 40-60 days on sale of timber
and plywood. Bank limit utilisation averaged 99% over the 12 months
ended December 2017. Working capital requirement will remain large
over the medium term.
Strengths
* Extensive experience of promoters: Presence of more than a decade in
the iron and steel trading industry has enabled the promoters to
establish strong relationship with suppliers and customers. Products
are sold in Vishakhapatnam, Vijayanagram, and Srikakulam districts of
Andhra Pradesh through a strong dealership network. Promoters also
have over 25 years of experience in the plywood and timber industry.
Outlook: Stable
CRISIL believes PCPL will continue to benefit over the medium term
from promoters' extensive experience. The outlook may be revised to
'Positive' if revenue and profitability margins improve substantially,
or networth increases considerably with sizeable equity infusion from
promoters. The outlook may be revised to 'Negative' if profitability
margins decline, or capital structure weakens further because of
large, debt-funded capex or stretched working capital cycle.
Incorporated in 2004 and promoted by Ms Buji Devi Agarwal and family,
PCPL trades in iron and steel products, and timber. Head office is in
Visakhapatnam and branch office in Bengaluru.
Profit after tax was INR0.17 crore on revenue of INR51.52 crore in
fiscal 2017, against INR0.17 crore on revenue of INR41.83 crore in
fiscal 2016.
PRIME CARGO: CRISIL Reaffirms B- Rating on INR7MM Cash Loan
-----------------------------------------------------------
CRISIL has reaffirmed its rating on the long-term bank facility of
Prime Cargo Movers & Logistics Private Limited (PCMLPL; a part of the
Prime group) at 'CRISIL B-/Stable'
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 7 CRISIL B-/Stable (Reaffirmed)
The rating continues to reflect the group's constrained financial risk
profile because of high gearing and stretched liquidity driven by
modest cash accrual against high scheduled debt repayments. The rating
also factors in the group's modest scale and working-capital-intensive
operations in the competitive logistics industry. These weaknesses are
partially offset by the extensive experience of the Prime group's
promoters in the logistics industry and the group's established
relationship with key customers.
Analytical Approach
For arriving at the rating, CRISIL has consolidated the business and
financial risk profiles of PCMLPL and Prime Cargo Movers (PCM). This
is because both entities, together referred to as the Prime group,
have a common management, are in the same line of business, and have
shared resources.
Key Rating Drivers & Detailed Description
Weaknesses
* Below average financial risk profile: The Prime group has
constrained financial flexibility with low networth of INR 7 cr and
high gearing of 2.5 times as on March 31, 2017.Weak debt protection
with interest coverage and NCATD of 1.2 and 0.07 ratio. CRISIL
believes that the financial risk profile of the firm is expected to
remain below average going ahead as well.
* Modest scale along with working capital intensive operations
The Prime group operates on a small scale as indicated by its
operating income of around INR44 cr in 2016-17. The Prime group
operates in the highly fragmented logistics industry, marked by the
presence of numerous small players, leading to intense competition.
CRISIL believes that the Prime group's scale of operations will remain
small; the group will continue to face intense competition from
organised as well as unorganised players.
Strengths
* Promoters' extensive industry experience along with established
relationship with key customers: The promoters have been engaged in
the logistics business for over 2 decades. Over the years, they have
developed insights into the road transport services segment. The group
has also established relationships with large and small fleet owners,
which enable smooth sourcing of vehicles. CRISIL believes the group
would continue to benefit from the promoters experience and
established relationship with customers and fleet owners.
Outlook: Stable
CRISIL believes the Prime group will continue to benefit over the
medium term from the extensive industry experience of its promoters
and its reputed clientele. The outlook may be revised to 'Positive' in
case of significant increase in its scale of operations and
profitability leading to sizeable cash accrual. Conversely, the
outlook may be revised to 'Negative' in case of further deterioration
in the Prime group's financial risk profile, particularly liquidity,
due to lower cash accrual, stretch in the working capital cycle, or
large unanticipated debt-funded capital expenditure (capex). Timely
fund support from promoters in order to meet term debt obligations
will remain a key rating sensitivity factor over the medium term.
The Prime group primarily provides logistics and transportation
services to FMCG players. The promoters commenced its business as a
carry and forward agent in 1988 through another firm. PCM and PCMLPL
were set up in 2003 and 2013, respectively, to provide transportation
services to its clients.
For fiscal 2017, loss was INR1.8 crore on net sales of INR44 crore,
against a PAT of INR2.1 crore on net sales of INR37 crore for fiscal
2016.
S.L. GROUP: CRISIL Reaffirms B Rating on INR19.5MM Term Loan
------------------------------------------------------------
CRISIL has reaffirmed its 'CRISIL B/Stable' rating on the long-term
bank facility of S.L. Group and Associates (SLGA).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 19.5 CRISIL B/Stable (Reaffirmed)
The rating continues to reflect SLGA's exposure to demand, funding,
and completion risks associated with the ongoing project and
susceptibility to cyclicality inherent in the real estate industry.
These rating weaknesses are partially offset by extensive experience
of partners in the real estate business and moderate bookings and
realization.
Key Rating Drivers & Detailed Description
Weaknesses
* Exposure to demand, funding, and completion risks associated with
the ongoing project: Till December 2017, 40% units were booked. Also,
total 5 towers (122 units) have to be constructed. The structure work
has been completed for all the units; however, entire finishing work
is pending. Entire project is expected to get completed by December
2018. Hence, exposure to demand, funding, and completion risk is
expected to continue over the medium term.
* Susceptibility to cyclicality inherent in the real estate industry:
The firm is susceptible to risks pertaining to inherent cyclicality in
the real estate sector. The residential real estate industry is
characterized by the presence of a large number of regional players
due to lower entry barriers. Despite stiff competition, past track
record, quality and goodwill help large players to command premium
pricing for their projects. However, there is severe competition among
the small regional players. Moreover, the industry is inherently
cyclical in nature as evidenced during the 2008 economic slowdown.
Strengths
* Extensive experience of partners in the real estate business: SLGA's
partners have over a decade of industry experience and have executed
various projects in the past in Delhi and Uttar Pradesh.
* Moderate bookings and realization: Bookings and advances received
will remain rating sensitivity factors over the medium term. Till
December 2017, 40% of the units had been booked for which INR13.5
crores of booking advance was received.
Outlook: Stable
CRISIL believes that SLGA will benefit over the medium term from its
partners' extensive experience in the real estate industry. The
outlook may be revised to 'Positive' if the firm exhibits significant
progress in bookings and flow of advances for the project. Conversely,
the outlook may be revised to 'Negative' in case of time or cost
overrun or in case of lower than anticipated advances from customers.
About the Firm
SLGA is currently executing a residential project 'Green Orchid' of a
3,99,456.6 sq. ft at Plot 1 Sector 13, New Moradabad, Uttar Pradesh
(UP) on land of 1,02,537.3 sq. ft. SLGA is a joint venture between
Sunil Gupta, Mr Anil Tomar, and Mr. Chandra Bhan Singh.
SATYA SAI: CRISIL Assigns B+ Rating to INR22.5MM LT Loan
--------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-term
bank loan facility of Satya Sai Hydel Projects Private Limited.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Long Term Loan 22.5 CRISIL B+/Stable (Assigned)
The rating reflects the company's subdued financial risk profile
because of small networth and high gearing, and exposure to hydrology
risks. These weaknesses are partially offset by extensive
entrepreneurial experience of its promoters.
Key Rating Drivers & Detailed Description
Weakness:
* Subdued financial risk profile: Networth was INR8 crore as on March
31, 2017, because of nascent stage of operation and is expected to
increase over the medium term. Gearing was high at 3.63 times as on
March 31, 2017.
* Exposure to hydrology risks: The project is on river Beas. Any event
beyond the company's control, such as significantly low water flow
because of natural disaster, can adversely affect business.
Strength
* Extensive entrepreneurial experience of promoters: SSHPPL is a
special purpose vehicle promoted by Mr S Sankaran to set up and
operate hydropower projects in Kangra, Himachal Pradesh. The promoters
have entrepreneurial experience of over 20 years. They have
successfully commissioned a 3-megawatt hydropower project in
Dalhousie, Himachal Pradesh. The promoters' technical expertise has
helped SSHPPL establish healthy business relationships.
Outlook: Stable
CRISIL believes SSHPPL will benefit over the medium term from the
favourable industry prospects and steady demand for power. The outlook
may be revised to 'Positive' if revenue and profitability increase
more than expected. The outlook may be revised to 'Negative' if
unprecedented delays in realisation of receivables or low plant load
factor (PLF) leads to tightly matched liquidity, or if large,
debt-funded capital expenditure weakens liquidity.
Established in 2010, SSHPPL is a special purpose vehicle, which
operates a 3.8-MW hydel power project in Kangra. The project is a
run-of-the river project on a tributary of River Beas (Perennial
River) and has both snow-fed and rain-fed catchment. The project
commenced commercial operations in October 2017. The company is
promoted by Mr S Sankaran.
SUPER SEAL: CRISIL Reaffirms B+ Rating on INR9MM Cash Loan
----------------------------------------------------------
CRISIL has reaffirmed its ratings on the bank facilities of Super Seal
Flexible Hose Limited at 'CRISIL B+/Stable/CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 9 CRISIL B+/Stable (Reaffirmed)
Inland/Import
Letter of Credit 1 CRISIL A4 (Reaffirmed)
The ratings continue to reflect the company's low operating margin in
the intensely competitive hose manufacturing industry, and its large
working capital requirement. These weaknesses are partially offset by
the extensive experience of its promoters.
Key Rating Drivers & Detailed Description
Weaknesses
* Low operating profitability: Operating margin declined to 4.8% in
fiscal 2017 from 8.7% in fiscal 2016 due to fluctuations in raw
material prices. The prices of nitrile rubber and wire - the key raw
materials - are highly volatile as they are linked to crude oil prices
and dollar rate.
* Large working capital requirement: Operations are working capital
intensive, as reflected in gross current assets of 208 days as on
March 31, 2017 driven by high debtors and inventory of 111 days and 95
days, respectively. Further, of the total inventory, 70% were in the
form of raw material and work in progress.
Strength
* Extensive experience of the promoters: Benefits from the promoters'
two decades of experience and established relationship with customers
and suppliers should support the business. Some of the leading
customers include Action Construction Equipment, Bharat Earthmovers,
Caterpillar, Escorts Group, Indian Tractors, Indian Railways and
others.
Outlook: Stable
CRISIL believes SSFHL will continue to benefit from the extensive
experience of its promoters and its established customer
relationships. The outlook may be revised to 'Positive' if cash
accrual increases and working capital cycle is efficient and operating
profitability is stable. The outlook may be revised to 'Negative' if
decline in revenue or operating profitability, or stretch in working
capital cycle exerts pressure on liquidity.
Established in 1995, Noida-based SSFHL manufactures hydraulic and
industrial hoses with an inner diameter of 2 inches and also
undertakes assembling of hoses. It is promoted by Mr Sanjay Kumar Das
and family. The company has a manufacturing capacity of 30 lakh metres
per annum.
TOUGH BAGS: CRISIL Moves B+ Rating to Not Cooperating Category
--------------------------------------------------------------
CRISIL has been consistently following up with Tough Bags (TB) for
obtaining information through letters and emails dated October 30,
2017 and January 12, 2018 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 7 CRISIL B+/Stable (Issuer Not
Cooperating; Rating Migrated)
Proposed Cash 1 CRISIL B+/Stable (Issuer Not
Credit Limit 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 Tough Bags which restricts CRISIL's ability to
take a forward looking view on the entity's credit quality. CRISIL
believes information available on Tough Bags 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
Tough Bags to 'CRISIL B+/Stable Issuer not cooperating'.
Set-up in 1992 as a proprietorship firm, TB manufactures complementary
gifts items such as bags, pouches, shaving kits in rexene. The firm is
based in Pykara, Tamil Nadu and promoted by Mrs Lalitha Ramalingam.
Her son Mr Palanniappan manages operations.
TUTICORIN COAL: CARE Moves D Rating to Not Cooperating Category
---------------------------------------------------------------
CARE Ratings has been seeking information from Tuticorin Coal Terminal
Private Limited (TCTPL) to monitor the rating(s) vide e-mail
communications/letters December 14, 2017, December 4, 2017, November
30, 2017 and numerous phone calls.. However, despite CARE's repeated
requests, the company has not provided the requisite information for
monitoring the ratings. In line with the extant SEBI guidelines, CARE
has reviewed the rating on the basis of the publicly available
information which however, in CARE's opinion is not sufficient to
arrive at a fair rating. Further, Tuticorin Coal Terminal Private
Limited has not paid the surveillance fees for the rating exercise as
agreed to in its Rating Agreement. The rating on Tuticorin Coal
Terminal Private Limited will now be denoted as CARE D/CARE D; ISSUER
NOT COOPERATING.
CARE gave these ratings:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 281.00 CARE D; Issuer Not cooperating;
Facilities Based on best available
(Fund based) information
Short Term Bank 47.00 CARE D; Issuer Not cooperating;
Facilities Based on best available
Information
Users of this rating (including investors, lenders and the public at
large) are hence requested to exercise caution while using the above
rating(s).
The reaffirmation of rating assigned to the bank facilities of TCTPL
takes into account the delay in debt servicing obligation by the
company.
Detailed description of the key rating drivers
At the time of last rating on January 31, 2017, the following factors
were considered:
Delays in debt servicing: The revision in the rating assigned to the
bank facilities Tuticorin Coal terminal Private Limited (TCTPL)
considers the delay in debt servicing obligation by the company due to
its weak liquidity position.
Tuticorin Coal Terminal Private Limited (TCTPL), a Special Purpose
Vehicle (SPV), is promoted by ABG Group (holding 51% stake through
ALBA Asia) and Louis Dreyfus Armateurs SAS (LDA, holding 49 % equity
stake), a French conglomerate with its presence in international
maritime transport for more than a century. In 2010, ALBA Asia Pvt Ltd
won the contract in a public tender to build and operate a
coal-loading facility at VO Chidambaranar Port Trust (VOCPT) for 30
years by placing the highest revenue share price bid of 52.17%.
Tuticorin Coal Terminal Pvt Ltd (TCTPL), the special purpose vehicle
(SPV) set up to implement the project, invested INR640 crore to
construct the facility. TCTPL was awarded the project on the tariff
setting norms finalised by the Shipping Ministry in 2008. The total
project cost overshot the original estimates of INR465 crore mainly
due to a two-year delay in dredging the berth by VOCPT to accommodate
Panamax-size ships at the facility.
UNDAVALLI CONSTRUCTIONS: ICRA Assigns B+ Rating to INR15cr Loan
---------------------------------------------------------------
ICRA Ratings has assigned a long-term rating of [ICRA]B+ to the
INR15.00 crore unallocated limits of Undavalli Constructions. The
outlook on the long-term rating is 'Stable'.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Unallocated Limits 15.00 [ICRA]B+ (Stable); Assigned
Rationale
The assigned rating is constrained by small scale of operations in the
real estate industry; weak financial risk profile characterised by
operating losses, modest coverage indicators and risks arising from
partnership nature of the firm such as capital withdrawals as observed
in FY2017. The rating is also constrained by high competition
prevailing in the real estate industry and company's operations being
vulnerable to slowdown in the real estate and construction industry.
Further, the future revenues are contingent on company receiving
construction services order from group company, Undavalli Construction
Private Ltd which is developing a 13,00,000 sft residential apartment
at an estimated project cost of INR320.25 crore. The rating, however,
derives comfort from the experience of promoters in the real estate
and construction business and successful completion and handover of
the real estate project, Sri Valli Palace which was launched in
FY2015.
Outlook: Stable
The stable outlook reflects ICRA belief that Undavalli Construction
will continue to benefit from the extensive experience of its
partners. The outlook may be revised to 'Positive' if substantial
growth in revenue and profitability, and better working capital
management, strengthens the financial risk profile. The outlook may be
revised to 'Negative' if cash accrual is lower than expected, or
stretch in the working capital cycle, weakens liquidity.
Key rating drivers
Credit strengths
Significant experience of promoters in the real estate industry: The
promoters have more than two decades of experience in the real estate
industry. The firm had previously undertaken a residential project,
Sri Valli Palace, in Eluru, Andhra Pradesh. The project was started in
FY2015 and was successfully handed over to the customers in FY2017.
The promoters have completed more than 4 lakh sq.ft. in Bangalore and
Eluru markets over the years.
Successful completion of residential project in FY2017: The
residential apartment project in Eluru - Sri Valli Palace - was
developed with a total of 89 apartments and a total saleable area of
1.22 lakh sq.ft at a total project cost of INR32.66 crore. The firm
successfully completed the residential project during FY2017 within
the scheduled completion date. As on date, 85 units have been sold
with a total billed revenue of INR30.90 crore and the remaining units
are expected to be sold by Q4 FY2018.
Credit weaknesses
Small scale of operations: The firm has a small scale of operations
with an operating income of INR10.61 crore in FY2017 mainly comprising
of revenues from the residential project in Eluru, Andhra Pradesh.
Modest financial risk profile: The firm reported operating losses
during the last three years during the development phase of the
project. However, the firm reported net profits in FY2017 owing to
profit on sale of commercial land. The coverage indicators remained
modest owing to operating losses.
Limited order book and high customer concentration: The firm has
discontinued the real estate development and would be providing
construction services to real estate developers. The firm is expecting
an order for providing construction services to group concern,
Undavalli Constructions Private Limited (UCPL), which is developing
Sri Valli Pravas, a 13,00,000 sft residential project with an
estimated project cost of INR320.25 crore.
High competition in the industry and dependence on real estate
industry: The operations of the company remain vulnerable to intense
competition emanating from the presence of several other players in
the region thereby pressurizing margins of the company. Also, the
company's operations are vulnerable to downturns in the construction
and real estate industry.
Risks arising from partnership nature of the firm: Given UC's
constitution as a partnership firm, it is exposed to risks including
the possibility of withdrawal of capital by the partners as witnessed
in FY2017. The partners have withdrawn INR6.38 crore of capital in
FY2017.
Undavalli Constructions was started in the year 2010 to undertake real
estate development and construction works in Eluru, Andhra Pradesh. It
has previously developed a residential project, Sri Valli Palace in
Eluru with a total saleable area of 1.21 lakh sft. The firm is
currently engaged in providing construction services including
supplying of raw materials to real estate customers in the Andhra
Pradesh capital region. The promoters have more than two decades of
experience in real estate industry.
In FY2017, the company reported a net profit of INR7.32 crore on an
operating income of INR10.61 crore, as compared to a net loss of
INR0.38 crore on an operating income of INR8.46 crore in the previous
year.
VIMAX CROP: CRISIL Lowers Rating on INR8.5MM Cash Loan to B+
------------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facilities of
Vimax Crop Science Ltd (VCSL) to 'CRISIL B+/Stable' from 'CRISIL
BB-/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 8.5 CRISIL B+/Stable (Downgraded
from 'CRISIL BB-/Stable')
Proposed Long Term 6.5 CRISIL B+/Stable (Downgraded
Bank Loan Facility from 'CRISIL BB-/Stable')
The downgrade reflects expected pressure on liquidity due to decline
in operating efficiencies. Operating margin fell to 5.60% in fiscal
2017 from 9.39% in the previous fiscal because of discontinuation of
higher-margin products following change in the requirement of farmers;
and increase in trading of goods that fetch lower margin. This led to
lower cash accrual amid working capital-intensive operations. Muted
accrual also led to stretched liquidity. Hence, debt obligation had to
be met through unsecured loans from promoters. Large working capital
requirement led to high bank limit utilization of 98% for the 12
months ended November 2017.
The rating reflects VCSL's modest scale of and working
capital-intensive operations, volatility in operating margin, and
average financial risk profile. These weakness are partially offset by
extensive experience of promoters in the agrochemical industry and
established relationship with dealers and suppliers.
Analytical Approach
Unsecured loans from promoters have been treated as neither debt nor
equity as these are interest-free and are expected to remain in
business over the medium term. Also, there have been fewer withdrawals
in the past three years.
Key Rating Drivers & Detailed Description
Weakness
* Working capital-intensive operations: Gross current assets were 280
days as on March 31, 2017, due to sizeable inventory and high credit
given to customers.
* Modest scale of operations: Topline has remained volatile as
agriculture depends on rainfall and change in the crop pattern of
farmers. Operating margin has also fluctuated on account of change in
product mix. Margin was 5.60% in fiscal 2017, 9.39% in fiscal 2016,
and 6.95% in fiscal 2015.
* Average financial risk profile: Total outside liabilities to
tangible networth ratio has remained high at 3-4 times and is expected
to be at a similar level over the medium term. Debt protection metrics
were also muted, with interest coverage and net cash accrual to total
debt ratios of 1.4 times and 0.07 time for fiscal 2017.
Strengths
* Extensive experience of promoters and established relationship with
customers and suppliers: Presence of around a decade in the
agrochemical industry has enabled the promoters to innovate products
as per customer requirement and set up a distribution network of over
1700 dealers across eight states.
Outlook: Stable
CRISIL believes VCSL will continue to benefit over the medium term
from promoters' extensive experience. The outlook may be revised to
'Positive' if higher-than-expected sales or improving profitability
leads to better accrual, or if working capital management gets better.
The outlook may be revised to 'Negative' if further decline in
profitability margins or significant deterioration in capital
structure on account of sizeable working capital requirement affects
liquidity.
Incorporated in 2010, VCSL manufactures insecticides, fungicides,
herbicides, and organic products at its facility in Rajkot, Gujarat.
=================
I N D O N E S I A
=================
LIPPO KARAWACI: Moody's Alters Outlook to Neg.; Affirms B1 CFR
--------------------------------------------------------------
Moody's Investors Service has changed the outlook on Lippo Karawaci
Tbk (P.T.)'s ratings to negative from stable.
Moody's has also affirmed the B1 corporate family rating of Lippo
Karawaci and affirmed the B1 senior unsecured rating of the bonds
issued by Theta Capital Pte. Ltd. and guaranteed by Lippo Karawaci and
some of its subsidiaries. Theta Capital is a wholly-owned subsidiary
of Lippo Karawaci.
At the same time, Moody's changed the outlook on the ratings to
negative from stable.
RATINGS RATIONALE
"The negative outlook on Lippo Karawaci's rating reflects an increase
in its execution and financing risk, which will likely weaken its debt
leverage and interest coverage ratios," says Jacintha Poh, a Moody's
Vice President and Senior Analyst.
Lippo Karawaci's increased execution and financing risk is underpinned
by a shift in its strategy where it concurrently sells and constructs
Meikarta -- a residential property project targeting lower-middle
income consumer -- instead of pre-selling the project prior to
construction. This leads to a mismatch in cash flows and funding
requirements for construction.
Furthermore, the low-margin product offerings of Meikarta reduce
headroom for a slowdown in sales. Over the next 12-18 months, Moody's
expects Lippo Karawaci's gross margins to decline to around 35% from
52% for the 12 months ended September 30, 2017.
Lippo Karawaci's execution risk is exacerbated by its reliance on cash
flows from asset sales. Moody's views the completion of the
developer's targeted sale of Puri Mall over the next two years to the
Singapore-listed Lippo Malls Indonesia Retail Trust (LMIRT, Baa3 under
review for downgrade) as uncertain, as LMIRT will require substantial
equity funding to complete the acquisition.
Lippo Karawaci generates more than half of its reported EBITDA from
Siloam International Hospitals Tbk (P.T.) and Lippo Cikarang Tbk
(P.T.), in which it held stakes of only 51% and 54% respectively as of
September 30, 2017. This partial ownership limits its ability to
access funds in their entirety.
Cash flows at the holding company level -- that is, total consolidated
cash flows excluding the cash flows of the listed companies, but
including any intercompany cash flows (dividends and proceeds from
asset sales) -- are used to service all the borrowings of the group,
as the listed subsidiaries remain debt free.
Furthermore, Lippo Cikarang will sell 49.99% stake in its Meikarta
project for IDR4.0 trillion, further reducing Lippo Karawaci's access
to cash flows generated by the project.
"The negative outlook also reflects the increasing mismatch between
holding company cash flows and its debt service obligations, largely
driven by the lack of new development projects at the holding company
level. However, Moody's expect cash holdings and cash flow from
operations at the holding company level will be sufficient to cover
around 1.4x of reported interest expenses over the next two years,"
adds Poh, who is also the lead analyst for Lippo Karawaci and the
Indonesian real estate sector.
Moody's base case expectation is for Lippo Karawaci to achieve
marketing sales of around IDR8 trillion in 2018, with IDR7 trillion of
that amount derived from Meikarta, and for the company to not complete
any asset sales.
Consequently, Moody's expects the developer's leverage -- as measured
by adjusted debt/homebuilding EBITDA -- to weaken to around 5.0x in
2018 and 5.5x in 2019, and for its interest coverage ratio - as
measured by adjusted homebuilding EBIT/interest expense - to weaken to
below 2.0x in 2018 and 2019.
For the nine months ended September 30, 2017, Lippo Karawaci achieved
IDR5.4 trillion of marketing sales, of which IDR4.9 trillion was from
Meikarta. And for the 12 months ended September 30, 2017, the
developer's adjusted debt/homebuilding EBITDA was 3.9x and adjusted
homebuilding EBIT/interest expense was 2.3x.
Lippo Karawaci's B1 rating does not incorporate structural
subordination as the majority of its liabilities are at the holding
company level. The developer also maintains a financial policy for all
its material operating subsidiaries to remain close to debt-free.
Lippo Karawaci's B1 rating is supported by its diversified business
profile - which allows it to generate a well-balanced stream of
recurring revenue from multiple business segments - and non-recurring
revenue from real estate development.
In addition, Lippo Karawaci has no near-term refinancing risk. Its
next major debt maturity is in 2022, after the call redemption of its
USD403 million notes due 2020 in November 2016.
Given the negative outlook, Lippo Karawaci's ratings are unlikely to
be upgraded over the next 12-18 months. However, the outlook could
return to stable if Lippo Karawaci (1) demonstrates its ability to
improve cash flows at the holding company level; (2) reduces business
risk through project diversification; and (3) improves its financial
metrics, such that adjusted debt/EBITDA is maintained at around 5.0x
and adjusted homebuilding EBIT/interest expense is well above 2.0x.
On the other hand, the ratings could be downgraded if Lippo Karawaci's
financial and liquidity profile weaken owing to (1) a failure to
execute its business plans; (2) a deterioration in the property
market, leading to protracted weakness in its operations and credit
profile; and (3) a material depreciation in the rupiah, which may
increase the company's debt-servicing obligations.
Metrics indicative of downward rating pressure include (1)
insufficient cash flows to cover interest obligations at the holding
company; (2) adjusted debt/EBITDA exceeding 5.5x; or (3) adjusted
homebuilding EBIT/interest expense falling below 2.0x. Lippo
Karawaci's senior unsecured bond rating could also be lowered if debt
is incurred at the subsidiaries' level.
The principal methodology used in these ratings was Homebuilding And
Property Development Industry published in January 2018.
Lippo Karawaci Tbk (P.T.) is one of the largest property developers in
Indonesia, with a sizable land bank of around 1,364 hectares as of
September 30, 2017. It owns and/or manages - either directly or via
its real estate investment trusts - 47 malls, 31 hospitals and nine
hotels. Lippo Karawaci owns a 33% stake in First REIT and a 29% stake
in Lippo Malls Indonesia Retail Trust (Baa3 under review for
downgrade).
====================
N E W Z E A L A N D
====================
APPENTURE MARKETING: Gets Large Fine for Misleading Consumers
-------------------------------------------------------------
Anuja Nadkarni at Stuff.co.nz reports that a mobile trader, that has
been in liquidation for nearly a year, has been fined more than
NZ$100,000 for misleading consumers.
According to Stuff, Auckland-based Appenture Marketing was fined
NZ$114,000 in the Auckland District Court on February 2, for
misleading consumers about their rights and for failing to provide
customers with key contract information.
In the sentencing, Judge Mary-Beth Sharp said while the mobile trader
was "most unlikely" to pay these fines, the penalty was placed to act
as a deterrent, the report relates.
Stuff says Appenture sold consumer goods, such as electronic goods,
door-to-door on credit at prices significantly higher than what was
charged at mainstream stores.
In March 2016, it offered an Apple iPhone 6S for NZ$4440 when the same
model was then available from a major retailer for NZ$1399.
The charges, brought by the Commerce Commission, related to conduct
between June 2015 and April 2016, Stuff notes.
According to the report, Commissioner Anna Rawlings said Appenture
misled consumers about their rights under the Consumer Guarantees Act
(CCCFA) by stating it was not liable for delivery delays and customers
would not be able to cancel due to delays, when it should have been.
Appenture also misled customers by promising customers that if
purchased goods were unavailable it could substitute other goods for
them, and that it could charge default interest on the unpaid balance
of a contract after the goods had been repossessed and sold, the
report adds.
"The CCCFA is clear that creditors cannot charge interest on the
outstanding balance after goods have been repossessed and sold," Stuff
quotes Ms. Rawlings as saying.
Appenture's contracts failed to disclose key information to consumers,
such as the correct initial unpaid balance, the amount of the final
payment and the number of payments to be made.
"By failing to include a NZ$40 application fee in the calculations,
Appenture did not provide accurate key information to its customers,"
Ms. Rawlings, as cited by Stuff, said. "It also failed to tell
customers when fees and charges would be payable."
Appenture was sentenced on 18 charges under the Fair Trading Act, and
six charges under the Credit Contracts and Consumer Finance Act in
December 2016 and went into liquidation in April 2017, Stuff
discloses.
Stuff relates that the commission then sought consent from the High
Court to continue the prosecution in the District Court.
This sentencing brings to just over NZ$1.23 million in fines laid
against 12 prosecuted mobile traders, the report notes.
=================
S I N G A P O R E
=================
PACIFIC RADIANCE: Noteholders Must Reject Revised Plan, OCB Says
----------------------------------------------------------------
Andrea Soh at The Strait Times reports that Pacific Radiance Ltd.
noteholders should reject the company's plan to redeem its bonds by
issuing new shares, said OCBC.
"Noteholders deserve better information about the overall
restructuring plan as well as how other stakeholders are committing to
the reorganisation before taking both sizable haircuts and structural
subordination," the report quotes credit analyst Nick Wong.
He said that the trade-offs look "unbalanced" for noteholders, noting
that noteholders will be taking a large implied haircut of over 50 per
cent based on current market prices, as well as give up their
seniority protection by becoming equity holders, the Strait Times
relates.
In contrast to the huge haircut on the bonds, existing shareholders
are only diluted by about 35 per cent, he added, the report says.
Furthermore, capital raising via rights issues or warrants would
likely be part of the restructuring process, further diluting the
equity stake the noteholders receive.
"Noteholders are effectively flying blind without knowing the other
aspects of the restructuring," he wrote, the report relays.
"Comparatively, for the other recent restructurings in the offshore
and marine space, the restructuring plans are either more holistic (if
haircuts are required on noteholders) or noteholders benefit from
remaining (at least in part) senior unsecured creditors."
According to the report, Pacific Radiance announced on Feb. 2 a
consent solicitation exercise for a revised restructuring plan with
better terms for holders of its SGD100 million 4.3 per cent
medium-term notes.
In its preliminary proposal, Pacific Radiance offered full conversion
of the notes to new equity, at a rate of three new shares for every
SGD1 held, the report says.
Under the revised proposal, also for full conversion, noteholders will
receive 19 new shares for every SGD5 held, which equates to 3.8 shares
for every SGD1, or 26.3 Singapore cents per share, according to the
Strait Times.
Still, OCBC recommends noteholders accept the second resolution of the
consent solicitation exercise which seeks to waive events of defaults
and financial covenants, saying Pacific Radiance might tip into
technical default otherwise, the reportnotes.
Singapore-based Pacific Radiance Ltd., an investment holding company,
owns, manages, and operates offshore vessels in Asia, Africa,
Australia, and South America.
* SINGAPORE: SMEs Debt Payment Behavior Worsened in 2017
--------------------------------------------------------
sgsme.sg reports that debt payment behavior of Singapore's small and
medium-sized enterprises (SMEs) took a turn for the worse last year,
with the proportion of severely delinquent debts at 14 per cent in
2017, up from 12 per cent in 2016.
Severely delinquent debts are those which remain unpaid more than 90
days after falling due. However, this is still an improvement from
2014, when almost a quarter of firms (24 per cent) had debt unpaid,
sgsme.sg discloses.
The construction sector fared the worst among the industries
last year, with the proportion of severely delinquent debts at
24 per cent. This was up from 18 per cent in 2016, sgsme.sg says.
According to the report, the Information & Communications sector came
in a close second at 23 per cent, but it was an improvement from 27
per cent in 2016. Other industries which saw severely delinquent
debts climb include Commerce-Retail at 5 per cent, up from 3 per cent
previously; and Transport Storage at 9 per cent, up from 8 per cent a
year ago.
But despite the slight uptick in 2017, Dev Dhiman, managing director,
Southeast Asia & Emerging Markets for Experian, pointed out a downward
trend in severely delinquent debts since 2014, the report notes.
Reasons for this include better trading conditions in the local and
global economies, an improved economy, as well as better exports and
tourist numbers, he said, sgsme.sg relays.
The US and the eurozone are both showing stronger than expected growth
while Chinese growth remains strong.
"During the last three years, SMEs have adjusted to the restrictions
on foreign manpower and the need to invest in technology and
innovation. As these adjustments have been made, the cash flow
position of most SMEs has improved, freeing up funds for the prompt
settlement of debts," the report quotes
Mr. Dhiman as saying.
*********
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
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TCR-AP subscription rate is US$775 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance
thereof are US$25 each. For subscription information, contact Peter
Chapman at 215-945-7000.
*** End of Transmission ***