/raid1/www/Hosts/bankrupt/TCRAP_Public/180314.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Wednesday, March 14, 2018, Vol. 21, No. 052
Headlines
A U S T R A L I A
B. KEOGH: First Creditors' Meeting Slated for March 20
DOUGHNUT TIME: Goes Into Voluntary Administration
FOLIO FRANCHISING: Second Creditors' Meeting Set for March 22
GROUPED PROPERTY: Second Creditors' Meeting Set for March 21
KSR PROPERTIES: First Creditors' Meeting Set for March 22
LIMES HOTELS: Receivers Place Hotels Up for Sale
MAITLAND DISTRICT: First Creditors' Meeting Set for March 21
PRECISION TECHNOLOGIES: 2nd Creditors' Meeting Set for March 20
C H I N A
CEFC CHINA: Scrambling for Loans as Authorities Swooped
NANJING JINSHENG: Fitch Assigns First-Time 'B+' LT IDR
ZHENGZHOU ZHONGRUI: Moody's Assigns B2 Corporate Family Rating
I N D I A
AISHWARYA AGRIPROCESSORS: Ind-Ra Withdraws 'BB-' LT Issuer Rating
ALLIANCE FIBRES: CRISIL Moves D Rating to Not Cooperating Cat.
ANNANYA INTERFACE: CRISIL Hikes Rating on INR2.5MM Loan to C
APHRODITE INFRA: CRISIL Withdraws B+ Rating on INR40MM LT Loan
AROMA REALTIES: CRISIL Withdraws D Rating on INR20MM LT Loan
BABA NAGA: CRISIL Reaffirms B+ Rating on INR18.1MM Term Loan
BHARTIYA SAMRUDDHI: CRISIL Raises Rating on INR123.6MM Loan to B
CENTENARY ARCADES: CRISIL Assigns D Rating to INR25.55MM Loan
CHANDNA INFRAPROJECTS: CARE Reaffirms D Rating on INR12.81cr Loan
D S KULKARNI: CARE Moves D Rating to Not Cooperating Category
E-VILLAGE RESORTS: CRISIL Assigns 'B' Rating to INR17MM LT Loan
GOPI FABRICS: CRISIL Moves D Rating to Not Cooperating Category
GREEN INDIA: CRISIL Assigns D Rating to INR5MM Cash Loan
HOTHUR ISPAT: CRISIL Assigns B+ Rating to INR30MM Proposed Loan
JABALPUR HOSPITAL: CRISIL Moves B- Rating to Not Cooperating
JSW STEEL: Fitch Rates Proposed USD Sr. Unsec. Notes 'BB(EXP)'
JUPITER BUILDTECH: CRISIL Withdraws B Rating on INR9MM Term Loan
KALPAKA TRANSPORT: CRISIL Moves B+ Rating to Not Cooperating
KAMAKHYA TRADERS: CARE Assigns B+ Rating to INR10cr LT Loan
KATIYAR COLD: CRISIL Moves B/Not Cooperating Rating to CRISIL B-
KESAR ENTERPRISES: CARE Reaffirms D Rating on INR107.26cr Loan
LOVELY ENTERPRISES: CRISIL Moves D Rating to Not Cooperating
MAA BHAGWATI: Ind-Ra Assigns BB- LT Issuer Rating, Outlook Stable
MAINI CONSTRUCTIONS: CARE Moves D Rating to Not Cooperating Cat.
MANGLAM PAPER: Ind-Ra Migrates BB- LT Rating to Non-Cooperating
MITHRA SEEDS: CRISIL Assigns B Rating to INR4.55MM LT Loan
MOENUS TEXTILE: Ind-Ra Lowers Long Term Issuer Rating to 'D'
MONALISA ENGICONS: Ind-Ra Assigns 'BB-' Rating, Outlook Stable
MURUDESHWAR CERAMICS: CRISIL Ups Rating on INR72.58MM Loan to B+
ORIGIN FORMULATIONS: CARE Cuts Rating on INR27.40cr Loan to D
PARAMASHIVA MOTORS: CRISIL Reaffirms B+ Rating on INR10MM Loan
REFRATHERM INTERNATIONAL: CRISIL Reaffirms B+ Cash Credit Rating
SIMOCO TELECOM: CARE Removes D Ratings From Not Cooperating Cat.
SPARSH HOSPITALS: CARE Lowers Rating on INR7.97cr LT Loan to D
SRI KARUNAMAYE: CRISIL Assigns B- Rating to INR5MM LT Loan
SRI SPM WEAVING: CRISIL Moves B Rating to Not Cooperating Cat.
STONE INDIA: CARE Moves D Rating to Not Cooperating Category
SUJALA PIPES: CARE Lowers Rating on INR31.80cr Loan to D
SUN ARK: CRISIL Lowers Rating on INR9MM Loan to D
SUPREME INFRA: Ind-Ra Migrates 'D' LT Rating to Non-Cooperating
UNIVERSAL ASSOCIATES: CARE Moves D Rating to Not Cooperating
N E W Z E A L A N D
CBL INSURANCE: 'Not in a Position' to Pay Homeowners Claims
S I N G A P O R E
CLEARBRIDGE HEALTH: FY2017 Net Loss Widens to SGD7.47MM
S O U T H K O R E A
KUMHO TIRE: Urges Union to Engage in Talks
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A U S T R A L I A
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B. KEOGH: First Creditors' Meeting Slated for March 20
------------------------------------------------------
A first meeting of the creditors in the proceedings of B. Keogh &
Sons (Manufacturing) Pty. Limited will be held at the offices of
Institute of Public Accountants, Level 6, 555 Lonsdale Street, in
Melbourne Victoria, on March 20, 2018, at 11:00 a.m.
Craig Ivor Bolwell -- craig@bkadvisory.com.au -- and Karen Leanne
Kelson -- karen@bkadvisory.com.au -- of Bolwell Kelson Advisory
were appointed as administrators of B. Keogh on March 7, 2018.
DOUGHNUT TIME: Goes Into Voluntary Administration
-------------------------------------------------
ABC Radio Australia reports that Doughnut Time is getting
liquidated -- despite its new chief executive saying he would buy
the company and "turn it around".
Its workers, who are owed more than an estimated AUD200,000 in
unpaid wages, have also been kept in the dark, the report says.
The ABC relates that none of the workers were told that the
troubled dessert chain went into voluntary administration on
March 9, and had appointed Michael Caspaney, the principal of
Menzies Advisory, as its liquidator.
The ABC confirmed this by accessing ASIC's insolvency notices,
followed by a telephone call to Mr. Caspaney.
Instead, the workers found out about the company's liquidation by
an email from middle management just before the weekend, the ABC
relays.
"Today has been the last day of Doughnut Time," Victoria state
manager Vanessa Gaddi-Chmielewski wrote. "He will not sign the
Doughnut Time trademark to Dan. "As a result, the entire company
will go into liquidation -- including the stores that Dan was
supposed to take over. The sale has not been completed."
This prompted an outpouring of strong reactions from aggrieved
Doughnut Time staff, who have since been demanding answers from
unresponsive senior management, according to the ABC.
"The company has cashflow problems and couldn't pay its
employees. That seems to be the main reason for the collapse,"
the report quotes Mr. Caspaney as saying.
According to the report, Mr. Caspaney suggested one avenue for
workers "if their debt is less than three months old".
These workers can seek compensation from the Fair Entitlements
Guarantee (FEG), the Australian Government's fund for employees
who have lost their job as a result of their employer's
liquidation or bankruptcy, the report adds.
FOLIO FRANCHISING: Second Creditors' Meeting Set for March 22
-------------------------------------------------------------
A second meeting of creditors in the proceedings of Folio
Franchising Pty Ltd has been set for March 22, 2018, at
10:00 a.m. at the offices of Rodgers Reidy, Level 2 Trafalgar
Square, 230 Clarence Street, in Sydney, NSW.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the
Company be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by March 21, 2018, at 5:00 p.m.
Andrew James Barnden and Geoffrey Reidy of Rodgers Reidy were
appointed as administrators of Folio Franchising on Nov. 27,
2017.
GROUPED PROPERTY: Second Creditors' Meeting Set for March 21
------------------------------------------------------------
A second meeting of creditors in the proceedings of Grouped
Property Services Pty Limited has been set for March 21, 2018, at
12:00 p.m. at the offices of Condon Associates Group, Level 6, 87
Marsden Street, in Parramatta, NSW.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the
Company be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by March 20, 2018, at 4:00 p.m.
Schon Gregory Condon RFD of Condon Associates was appointed as
administrator of Grouped Property on Feb. 14, 2018.
KSR PROPERTIES: First Creditors' Meeting Set for March 22
---------------------------------------------------------
A first meeting of the creditors in the proceedings of KSR
Properties Pty Ltd as trustee for Karas BT Trust will be held at
the offices of McLeod & Partners, Hermes Building, Level 1, 215
Elizabeth Street, in Brisbane, Queensland, on March 22, 2018, at
10:00 a.m.
Jonathan P McLeod of McLeod & Partners was appointed as
administrator of KSR Properties on March 12, 2018.
LIMES HOTELS: Receivers Place Hotels Up for Sale
------------------------------------------------
Vanessa Cavasinni at The Shout reports that in another run of bad
luck, Damien Griffiths, previous owner of the Doughnut Time
business, has had his Alfred & Constance and Limes Hotels placed
on the market by receivers.
The two Fortitude Valley hotels were placed into receivership in
January, with the Alfred & Constance pub closing at that time,
reports The Shout.
Limes Hotel, an award-winning Alexander Lotersztain designed
four-star boutique hotel, opened a decade ago. It comprises 21
guest rooms and a rooftop bar featuring two plunge pools. Alfred
& Constance is a pub business that incorporates two adjacent
buildings, and includes a beer garden, restaurant, cafe and
nightclub.
As first reported by News Corp, receivership for both venues was
due to a court case brought against Griffiths by his aunt and
cousin, who are part owners in the Limes Hotel, notes The Shout.
Griffiths had been late in making a payment to the pair for
buying their stake in the hotel. While that instalment was later
paid, as it was not paid on time it triggered a clause in their
agreement that then required the total sum of the debt to be paid
immediately, The Shout relates.
This is the second stroke of bad fortune for Griffiths this year,
with businessman having to close two of 23 of his 30 Doughnut
Time venues across Australia and the UK, and selling the
remaining business to the former CEO of the company, Dan
Strachotta, notes the report. Griffiths admitted that he had
expanded the business too quickly, while also operating the two
hotels.
Receivers Anthony Connelly and Jamie Harris of McGrathNicol have
made both hotels available for sale, according to The Shout. They
will be sold individually via international expressions of
interest campaigns.
MAITLAND DISTRICT: First Creditors' Meeting Set for March 21
------------------------------------------------------------
A first meeting of the creditors in the proceedings of Maitland
District Leagues Club Limited will be held at Maitland District
Leagues Club, 24 Bulwer Street, in Maitland, NSW, on March 21,
2018, at 10:00 a.m.
Jeffrey Allan Shute and Paul William Gidley of Shaw Gidley were
appointed as administrators of Maitland District on March 11,
2018.
PRECISION TECHNOLOGIES: 2nd Creditors' Meeting Set for March 20
---------------------------------------------------------------
A second meeting of creditors in the proceedings of Precision
Technologies Australia Pty Ltd has been set for March 20, 2018,
at 11:00 a.m. at One Wharf Lane, Level 20, 161 Sussex Street, in
Sydney, NSW.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the
Company be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by March 19, 2018, at 4:00 p.m.
Ozem Kassem and Jason Tang of Cor Cordis were appointed as
administrators of Precision Technologies on Feb. 13, 2018.
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C H I N A
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CEFC CHINA: Scrambling for Loans as Authorities Swooped
-------------------------------------------------------
Reuters reports that CEFC China Energy, the once-acquisitive
conglomerate, was prepared to pay annual rates of as much as
36 percent for short-term funding in a sign of the cash crunch
faced by the company as authorities were closing in on its
chairman, according to multiple people with knowledge of the
matter.
Earlier this month it was revealed that Ye Jianming, the
company's chairman, had been investigated for suspected economic
crimes, Reuters recalls. Guosheng Group, an investment firm owned
by the Shanghai government, was tasked with evaluating CEFC's
financial position as part of a restructuring and takeover
process, Reuters relates citing two sources with knowledge of the
moves.
But from at least the second half of last year CEFC was
approaching shadow bankers -- non-traditional lenders -- for
costly short-term loans, said six sources with direct knowledge,
in a sign of the strained liquidity the company was facing,
Reuters relates.
In early January, CEFC borrowed CNY1 billion ($158.00 million)
from the Shanghai-based Bida Holding Group, also known as U.Trust
Holding Group, for a 15-day loan with a daily interest rate of
0.1 percent, equivalent to an annual interest rate of 36 percent,
said one person with direct knowledge of the matter, Reuters
relays.
The company also approached Shenzhen Qianhai Everbright Financial
Holding Investment Management, Zhejiang-based Wanxiang Trust and
Hebei-based Bohai International Trust, a unit of HNA Capital, for
expensive loans, said people with direct knowledge of each
respective company, according to Reuters.
Reuters relates that Qianhai Everbright and Bohai International
Trust were tapped for M&A funds to finance deals, while Wanxiang
was approached for money for corporate financing.
None of the companies lent to CEFC for reasons ranging from
concerns over liquidity and opaque ownership to difficulties
appraising asset value and timing issues, trust sources said,
Reuters relays. The rates of interest discussed was unclear.
However, annual rates on short-term trust loans can be as high as
around 12 percent, the sources said.
According to Reuters, CEFC said the information of its expensive
loans mentioned in the story is "not correct", without giving
further comment. Guosheng, the Shanghai government, Bida, Qianhai
Everbright and Bohai International Trust did not respond to
requests for comment. Wanxiang Trust declined to comment.
"CEFC has no cash and is solely relying on outside money" to keep
the company running, said one of the people who has knowledge of
CEFC's debt situation, Reuters relays. "It remains a question how
it's going to repay all the debt coming due."
The Shanghai-based conglomerate has around CNY44 billion ($6.94
billion) of short term borrowing due by the first half of 2018,
Reuters discloses citing CEFC's 2017 half-year financial report
disclosed to onshore bondholders.
Its total debt amounted to CNY117 billion at the end of June,
compared to total assets of CNY169 billion. It reported a 2016
net profit of CNY4.5 billion, Reuters adds.
Trust lending in China is not as tightly regulated as bank
activity, allowing trusts to charge higher rates of interest to
borrowers who may struggle to access more traditional forms of
finance, Reuters notes.
"Paying ultra-high interest rates is a sign of intense demand for
cash," the report quotes Andrew Collier, managing director of
Orient Capital Research, as saying. "Clearly, the leadership in
Beijing is putting pressure on CEFC to raise funds quickly to
reduce its debt load or pay off specific creditors, such as
state-owned banks."
CEFC's single largest source of financing has been China
Development Bank (CDB) which was also expected to play a large
role in funding CEFC's $9.1 billion purchase of a 14.16 percent
stake in Rosneft, the Russian oil major, announced last year,
Reuters recalls.
Nomura, one of the banks initially tapped for finance, was later
told to step down as CEFC was set to raise $5.1 billion in short-
term loans from Russia's second-biggest lender, VTB, according to
a separate source with direct knowledge of those discussions.
CEFC was in separate talks with CDB to later refinance the short-
term bridge loan being offered by VTB, Reuters reported at the
time.
NANJING JINSHENG: Fitch Assigns First-Time 'B+' LT IDR
------------------------------------------------------
Fitch Ratings has assigned China-based Nanjing Jinsheng
International Household Market Operating and Management Co., Ltd.
a first-time Long-Term Foreign-Currency Issuer Default Rating
(IDR) of 'B+' with Stable Outlook. Fitch has also assigned the
company a 'B+' senior unsecured rating and a 'B+(EXP)' expected
rating to its proposed US dollar-denominated senior notes, with a
Recovery Rating of 'RR4'.
The proposed notes are rated at the same level as Jinsheng's
senior unsecured rating, as they represent the company's
unconditional and irrevocable obligations. Jinsheng intends to
use the net proceeds from the proposed US dollar senior notes to
refinance its existing indebtedness. The final rating is subject
to the receipt of final documentation conforming to information
already received.
Jinsheng's ratings are supported by its long record and proven
management ability as an established home improvement and
furnishings mall operator, its quality investment property
portfolio located in the cities of Nanjing and Shanghai, rising
recurring income and satisfactory interest coverage. The ratings
are constrained by the company's high leverage, limited
diversification and substantial exposure to related parties.
KEY RATING DRIVERS
Experienced HI&F Mall Operator: Jinsheng has more than 20 years
of experience in China's chain home-improvement and furnishing
(HI&F) retail mall sector. It has established its brand name and
ranks among the top-five domestic HF&I operators. Its market
share of 2.4% in 2016 is small, as the industry is highly
fragmented. The company owns and operates seven HI&F shopping
malls, targeting mid- to high-end customers in four tier 1 and 2
Chinese cities, namely Nanjing, Shanghai, Wuhan and Hohhot, as of
end-2017. It has a total leasable area at 663,000 square meters
located in in hubs with convenient access and sufficient
population density.
Rising Recurring Income: Fitch expects Jinsheng's recurring
income from its investment properties to increase at 6%-13% yoy
during 2018-2019, supported by mature existing malls and the
company's plan to expand by one new mall each year. Jinsheng's
malls maintained moderate rental rates and high occupancy rates
of above 90% through the cycle. Its investment property portfolio
generated rental income of CNY698 million in 2016, with a healthy
rental yield on market value at 6%, compared with around 5% for
Chinese property investment companies. However, the yield is
slightly lower than the 6.9% yield for the self-owned malls of
its nation-wide peer, Red Star Macalline Group Corporation Ltd.
(RSM, BBB/Stable).
Moreover, Jinsheng receives annual cash interest income from its
related party, Jinsheng Real Estate Investment (Jinsheng RE),
after providing the latter with funding for undertaking HI&F mall
development on Jinsheng's behalf.
Substantial Related-Party Exposure: Jinsheng's high exposure to
related parties constrains its ratings at current levels. It has
significant receivables due from related parties, amounting to
CNY2.9 billion as at end-2016 (end-2015: CNY4.4 billion). The
internal funding, to be repaid on demand, was mainly borrowed by
Jinsheng RE to invest exclusively in new HF&I malls, which are
managed by Jinsheng and would be injected or sold back to
Jinsheng.
This arrangement is a legacy issue. Jinsheng plans to expand any
further malls itself, with no new borrowing lent to Jinsheng RE.
All four existing malls under Jinsheng RE have completed
construction. Therefore, Fitch treats Jinsheng's receivables as
the cost of investing in new malls and part of its investment
property assets, while treating its cash interest income from
Jinsheng RE as recurring income.
Moderate Financial Profile: Jinsheng's interest coverage, as
measured by recurring EBITDA plus cash interest income over cash
interest, is satisfactorily, at around 1.2x, and in line with
high 'B' rated peers. However, Jinsheng's leverage is high,
staying at around 50% since 2015, due to the construction of
phase II for its flagship mall in Nanjing and investment in new
malls through borrowing to Jinsheng RE. Fitch expects Jinsheng's
leverage, as measured by net debt/investment property market
value and receivables from related parties, to trend towards 40%
in the medium-term, driven by large cash recycling from property
sales starting in 2019 and more malls maturing.
Limited Rating Headroom: Jinsheng has limited rating headroom,
with pressure from its business and financial profile. It has
small scale with high geographic and asset concentration. Its
Nanjing malls accounted for 60% of total leasable area and 64% of
rental income in 2017, while its flagship mall in Nanjing alone
contributed around 38% of rental income and more than 50% of the
market value of its investment property portfolio as of end-2016.
Jinsheng's high leverage limits its flexibility for additional
investment, such as acquiring more equity stakes in malls under
Jinsheng RE as it did in 2016 and 2017. Its interest coverage is
near 1.1x, the threshold for negative rating action.
DERIVATION SUMMARY
Jinsheng's ratings reflect its resilient business profile, as
evident from its strong investment property portfolio and proven
management ability, which exceeds that of most 'B' rated peers,
such as China Logistics Property Holdings Co., Ltd (CNLP,
B/Stable) and Golden Wheel Tiandi Holdings Company Limited
(B/Stable). Its higher coverage justifies its higher rating
against these two peers, whose coverage remains at 0.5x-0.6x.
Jinsheng's high leverage constrains its ratings at the 'B'
category. Leverage, as measured by net debt/(investment
properties plus receivables), is 50%, higher than 'BB' rating
category peers, such as Lai Fung Holdings Limited (BB-/Stable),
whose leverage average between 30% and 40%.
KEY ASSUMPTIONS
Fitch's Key Assumptions within Fitch Rating Case for the Issuer
- Existing seven malls maintain high average occupancy rates at
above 96% during 2018-2020 and average effective rent remains
above CNY100 per square metre per month.
- New malls open as per company's plan during 2018-2019 and
achieve an 80% occupancy rate in the first year and 90% in the
second year.
- Property sales begin in 2018, contributing sales of CNY400
million in 2018, CNY800 million in 2019 and CNY1.2 billion in
2020.
Recovery analysis assumptions:
- Jinsheng will be liquidated during bankruptcy because it is
primarily an asset-trading company
- 10% administrative claims
- A 30% haircut on trade receivables
- A 20% haircut on adjusted inventory, considering the high-
margin property development project to be sold in 2018
- A 20% haircut on the market value of investment properties,
reflecting the solid quality of Jinsheng's HI&F malls, which
have a rental yield of above 6%
- Jinsheng will refinance its onshore secured borrowing with
proceeds from offshore bond issuance
Based on Fitch calculation of the adjusted liquidation value
after administrative claims, Fitch estimate the recovery rate of
senior unsecured bonds to be 100%. However, Fitch have rated the
senior unsecured ratings at 'B+'/'RR4' because China falls into
Group D of creditor friendliness under Fitch Country Specific
Treatment of Recovery Ratings Criteria and the instrument ratings
of issuers with assets in this group are subject to a soft cap at
the issuer's IDR.
RATING SENSITIVITIES
Developments that May, Individually or Collectively, Lead to
Positive Rating Action
- Recurring EBITDA/cash interest sustained above 1.5x, in which
recurring EBITDA refers to investment property EBITDA, plus
cash interest income
- Net debt/(investment properties plus receivables) sustained
below 40%
- Substantially reduced related-party exposure
Developments that May, Individually or Collectively, Lead to
Negative Rating Action
- Recurring EBITDA/cash interest below 1.1x for a sustained
period
- Net debt/(investment properties plus receivables) above 55%
for a sustained period
LIQUIDITY
Adequate Liquidity: Jinsheng has CNY721 million in cash on hand,
along with unused bank facilities of CNY1.6 billion as of end-
September 2017, well serving short-term debt of CNY1.8 billion.
Jinsheng's rising recurring EBITDA will also provide steady cash
flow to support its debt servicing. Its large unencumbered asset
pool, valued at CNY5 billion as of end-2016, also provides
additional financing headroom.
ZHENGZHOU ZHONGRUI: Moody's Assigns B2 Corporate Family Rating
--------------------------------------------------------------
Moody's Investors Service has assigned a first-time B2 corporate
family rating (CFR) to Zhengzhou Zhongrui Industrial Group Co.,
Ltd.
At the same time, Moody's has assigned a B3 senior unsecured
rating to the proposed bonds to be issued by Zhongrui Industrial
Group Limited and guaranteed by Zhongrui, China Coal Solution
Co., Ltd and Hechang Real Estate Group Co., Ltd.
The ratings outlook is stable.
Zhongrui will use the proceeds from the proposed bonds to fund
its coal solution business, refinance existing debt, and for
general corporate purposes.
The ratings reflect Moody's expectation that Zhongrui will
complete the proposed bond issuance upon satisfactory terms and
conditions, including proper registrations with the National
Development and Reform Commission and the State Administration of
Foreign Exchange in China (A1 stable).
RATINGS RATIONALE
"Zhongrui's B2 CFR reflects the company's established track
record in property development and Moody's expectation that this
business will grow faster than its coal solution business," says
Kaven Tsang, a Moody's Vice President and Senior Credit Officer.
"At the same time, the B2 CFR considers the risk diversification
offered by the coal solution business," adds Tsang, who is also
Moody's Lead Analyst for Zhongrui.
Zhongrui has more than 10 years of property development
experience in China, focused on major second-tier cities and the
Yangtze River Delta, one of the country's most affluent regions.
The company operates its property development segment through its
42%-owned Hechang Real Estate Group Co., Ltd. It has established
its brand in Zhengzhou, Henan Province, where it has a land bank
with a gross floor area of 3.86 million sqm, representing around
43% of its total land bank, at the end of 2017.
Moody's expects that the property development business will enjoy
fast growth over the next 2-3 years, supported by good demand in
its home base and by its geographic expansion.
Zhengzhou, the capital city of China's most populous province,
Henan, is a fast-growing economy, recording 8.4% GDP growth in
2016. Such strong economic growth underpins demand for
residential properties.
The company's acquisition in 2017 of 8 property projects from Top
Spring International Holdings Limited, which include property
projects in Shenzhen, also helps support sales growth and partly
reduces geographic concentration risk.
Supported by these factors, Moody's expects Zhongrui to achieve
annual revenue growth of around 20% in 2018 and around 12% in
2019.
Zhongrui's property development business demonstrates better
profit margins than its coal solution business. Moody's expects
that Zhongrui's property development business will contribute
more than 60% of total EBITDA over the next 1-2 years.
Given the relative importance of the property development
business to Zhongrui's overall operations, Moody's has applied
the Homebuilding And Property Development Industry rating
methodology in its assessment of Zhongrui's ratings.
The B2 CFR factors in Zhongrui's better industry risk
diversification when compared with pure property developers. In
particular, its property development and coal solution businesses
are exposed to different business dynamics and risk factors.
Zhongrui's coal solution business benefits from steady demand and
revenues from its thermal coal business. Its customers are mainly
state-owned coal-fired power generating companies, which
accounted for around 67% of the company's total coal sales by
value in the first nine months of 2017.
Moreover, Zhongrui's B2 CFR considers the strengths of its wholly
owned subsidiary, China Coal Solution Co Ltd, in terms of scale,
its track record in coal trading, strength in providing
integrated management services and quality clients.
Established in 2005, China Coal Solution is a large private coal
trading company in China by coal volume. It transported 42.75
million tons of coal in 2016 and achieved revenues of RMB33.7
billion in 2016.
Moody's expects that China Coal Solution's business growth will
continue to be supported by: (1) its ability to offer value-added
services, including the design and arrangement of logistics, and
processing of coal; and (2) low operating costs through economies
of scale and strong cost management.
Zhongrui's B2 rating is constrained by its moderately high debt
leverage owing to its debt-funded growth.
The company's debt will continue to increase, as it expands its
coal solution and property development businesses.
Despite Zhongrui's large cash holdings of RMB9.4 billion at
September 30, 2017, Moody's expects that over the next 1-2 years,
net debt/EBITDA will increase to 5.0x-5.5x and EBITDA/interest
coverage will register 1.8x-2.0x. Such levels position the
company at the mid-B rating level.
The B2 rating is also constrained by the fact that the company's
businesses are operated by private companies, which are subject
to fewer requirements on corporate governance and transparency
than listed companies.
Zhongrui's liquidity profile is weak, due to its high level of
short-term debt totaling RMB12.8 billion (including notes payable
of RMB1.4 billion) as of September 2017, mainly for its coal
trading business, and its weak access to the equity and debt
markets when compared with listed companies.
Zhongrui's B3 senior unsecured debt rating is one notch lower
than its CFR, due to structural subordination risk. The majority
of claims are at the operating subsidiaries and have priority
over unsecured claims at the holding company in a bankruptcy
scenario. In addition, the holding company lacks significant
mitigating factors to reduce structural subordination risk for
its unsecured debt holders. As a result of these factors, the
likely recovery rate for claims at the holding company will be
lower.
The ratings outlook is stable, reflecting Moody's expectation
that the company will continue to progressively grow its property
development and coal solution businesses, and maintain access to
bank funding to refinance its short-term debt and support its
business expansion.
Upward ratings pressure could emerge, if Zhongrui reduces its
debt leverage, improves its liquidity position, and broadens its
funding access.
Credit metrics that would indicate upward ratings pressure
include: (1) net debt/EBITDA below 4.0x-4.5x; (2) EBITDA/interest
above 2.5x; and (3) cash/short-term debt above 100% on a
sustained basis.
Downward ratings pressure could emerge if the company's
contracted sales, cash flow, credit metrics or liquidity position
deteriorate.
Credit metrics indicative of downward ratings pressure include:
(1) net debt/EBITDA above 5.5x; (2) EBITDA/interest below 1.5x;
or (3) cash/short term debt below 50% on a sustained basis.
The principal methodology used in these ratings was Homebuilding
And Property Development Industry published in January 2018.
Zhengzhou Zhongrui Industrial Group Co., Ltd is a privately owned
enterprise engaged in two major businesses: coal solution and
property development. The company is 70% owned by Mr. Wan
Yongxing, the founder and chairman, and 30% by Mr. Liu Yi.
=========
I N D I A
=========
AISHWARYA AGRIPROCESSORS: Ind-Ra Withdraws 'BB-' LT Issuer Rating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has withdrawn Aishwarya
Agriprocessors Pvt. Ltd.'s Long-Term Issuer Rating of 'IND BB-'.
The Outlook was Stable. The instrument-wise rating action is as
follows:
-- INR100 mil.Fund-based limits' withdrawn and the rating is
withdrawn.
KEY RATING DRIVERS
Ind-Ra is no longer required to maintain the ratings as the bank
loans have been repaid in full.
COMPANY PROFILE
Aishwarya Agriprocessors has a 12 tonnes/hour rice mill (raw and
parboiled) in Andhra Pradesh.
ALLIANCE FIBRES: CRISIL Moves D Rating to Not Cooperating Cat.
--------------------------------------------------------------
CRISIL Ratings has been consistently following up with Alliance
Fibres Limited (AFL) for obtaining information through letters
and emails dated November 9, 2017, January 17, 2018, February 14,
2018 and February 19, 2018 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee .72 CRISIL D (Issuer Not
Cooperating; Rating Migrated)
Cash Credit 45.73 CRISIL D (Issuer Not
Cooperating; Rating Migrated)
Proposed Long Term 19.47 CRISIL D (Issuer Not
Bank Loan Facility Cooperating; Rating Migrated)
Term Loan 15.08 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 Alliance Fibres Limited which
restricts CRISIL's ability to take a forward looking view on the
entity's credit quality. CRISIL believes information available on
Alliance Fibres 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 Alliance Fibres Limited to 'CRISIL D/CRISIL D
Issuer not cooperating'.
Incorporated in 2006, AFL manufactures polyester staple fibre
(PSF) and partially-oriented yarn (POY) from waste PET bottles.
The company also manufactures regenerated PET flakes. The Surat-
based company is promoted by Mr. Ashwin Patel and his family
members, and is a part of the Gujarat-based Khodiyar group.
ANNANYA INTERFACE: CRISIL Hikes Rating on INR2.5MM Loan to C
------------------------------------------------------------
CRISIL Ratings has upgraded its rating on the long-term
facilities of Annanya Interface and Controls Private Limited
(AICPL) to 'CRISIL C/CRISIL A4' from 'CRISIL D/CRISIL D'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 2 CRISIL A4 (Upgraded from
'CRISIL D')
Cash Credit 2.5 CRISIL C (Upgraded from
'CRISIL D')
Letter of Credit 1.5 CRISIL A4 (Upgraded from
'CRISIL D')
Proposed Long Term 1.06 CRISIL C (Upgraded from
Bank Loan Facility 'CRISIL D')
The rating reflects sufficient track record of timely repayment
of term loans.
The ratings continue to reflect the company's tight liquidity
because of large working capital requirement, weak financial risk
profile and exposure to intense competition. These weaknesses are
partially offset by the extensive experience of its promoters in
the automation industry, and its healthy order book providing
near-term revenue visibility.
Analytical Approach
CRISIL has treated the unsecured loan of INR1.19 crore as neither
debt nor equity (NDNE). This is on account of the fund has
infused by promoters, its low interest bearing and expected to be
remain in the business to support liquidity of the company.
Key Rating Drivers & Detailed Description
Weakness
* Weak liquidity due to large working capital requirements: The
bank limits remains fully utilized due to large working capital
requirements due to stretched debtor days of 255 days for Fiscal
2017
* Small scale of operations: The operations of the company have
remained modest marked by total operating income of INR11.3 crore
in Fiscal 2017 (expected at INR14.7 crore in Fiscal 2018). The
scale is also restricted due to competition from local and
organized competitors in the intensely competitive automation
industry.
* Weak financial risk profile: The firm has a weak financial risk
profile, marked by high gearing and low networth of 1.80 times
and INR2.6 crore respectively as on March 31, 2017. Also, the
debt protection metric remained moderate marked by interest
coverage of 1.5 times and NCATD of 0.06 times as on March 31,
2017
Strengths
* Extensive experience of promoters and healthy order book:
Presence of more than a decade in EPC business will continue to
support operations. The same has helped the company to procure
healthy order book position.
AICPL was set up by Mr P S Pendharkar and Mr S P Pendharkar as a
partnership firm in 1989, and was reconstituted as a private
limited company in 2004. The company primarily provides real time
monitoring and control systems, and automation solutions for
water supply schemes and electrical sub-stations. It installs,
tests, erects, and commissions control systems for water
treatment plants, water pumping stations, power stations, and
sub-stations/switching stations.
APHRODITE INFRA: CRISIL Withdraws B+ Rating on INR40MM LT Loan
--------------------------------------------------------------
CRISIL Ratings has been consistently following up with Aphrodite
Infra Private Limited (AIPL) for obtaining information through
letters and emails dated November 30, 2016 and January 17, 2017,
among others, apart from telephonic communication. However, the
issuer has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Long Term Loan 40 CRISIL B+/Stable (Issuer Not
Cooperating; Rating Withdrawal)
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of AIPL. This restricts CRISIL's
ability to take a forward looking view on the credit quality of
the entity. CRISIL believes that the information available for
AIPL is consistent with 'Scenario 1' outlined in the 'Framework
for Assessing Consistency of Information with Crisil B Rating
category or Lower. Based on the last available information, the
rating on bank facilities of AIPL continues to be at 'CRISIL
B+/Stable Issuer Not Cooperating'.
CRISIL has withdrawn its rating on the long-term bank facility of
AIPL at the company's request and after receiving a no-objection
certificate from Central Bank of India. The rating action is in
line with CRISIL's policy on withdrawal of its ratings on bank
facilities.
AIPL is promoted by the Patel and Ramani families, based in
Surat. The company is currently developing 69 residential
apartments in Vesu, Surat, at a total project cost of around
INR107 crore, to be funded through bank debt of around INR40
crore, promoters' contribution of INR49.51 crore; the rest will
be funded through customer advances.
AROMA REALTIES: CRISIL Withdraws D Rating on INR20MM LT Loan
------------------------------------------------------------
CRISIL Ratings has been consistently following up with Aroma
Realties Limited (ARL) for obtaining information through letters
and emails dated April 18, 2017, and May 9, 2017, among others,
apart from telephonic communication. However, the issuer has
remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term 20 CRISIL D (Issuer Not
Bank Loan Facility Cooperating; Rating
Withdrawal)
Term Loan 15 CRISIL D (Issuer Not
Cooperating; Rating
Withdrawal)
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as they are arrived at without any
management interaction and are 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 ARL. This restricts CRISIL's
ability to take a forward ARL is consistent with 'Scenario 1'
outlined in the 'Framework for Assessing Consistency of
Information with CRISIL BB rating category or lower. Based on the
last available information, the rating on bank facilities of ARL
continues to be 'CRISIL D/Issuer Not Cooperating'.
CRISIL has withdrawn its rating on the bank facilities of ARL on
the request of the company and receipt of a no objection
certificate from its bank. The rating action is in line with
CRISIL's policy on withdrawal of its ratings on bank loans.
ARL, incorporated in 2008 and based in Ahmedabad, constructs
residential and commercial projects. It is owned and managed by
Mr. Mavjibhai Desai and his family.
BABA NAGA: CRISIL Reaffirms B+ Rating on INR18.1MM Term Loan
------------------------------------------------------------
CRISIL Ratings has reaffirmed its 'CRISIL B+/Stable' rating on
the long-term bank facility of Baba Naga Overseas (BNO).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 18.1 CRISIL B+/Stable (Reaffirmed)
The rating continues to reflect BNO's long-term lease contract
with Punjab State Grains Procurement Corporation (PUNGRAIN),
leading to stable revenue visibility, and proprietor's experience
in the agricultural industry. These strengths are partially
offset by customer concentration in revenue, and average
financial risk profile.
Key Rating Drivers & Detailed Description
Weaknesses
* Customer concentration in revenue: Customer concentration risks
persist, because the warehouse is leased to a sole customer,
PUNGRAIN. This makes revenue susceptible to risks such as
premature termination of contract. In the absence of plans to add
new customers, the risks may continue to constrain business risk
profile over the medium term.
* Average financial risk profile: The comfortable interest
coverage ratio of 3.69 times and moderate total outside
liabilities to tangible networth of 2.53 times in fiscal 2017 are
partially offset by low networth of INR5 crore as on March 31,
2017. Moderate accretion to reserve may continue to keep networth
modest.
Strengths
* Assured revenue backed by long-term lease contract and reputed
lessees: BNO entered into a 10-year lease agreement with PUNGRAIN
with a price escalation clause i.e. after two years every year
rental will increase by an amount equivalent to 33% per cent of
increase in consumer price index. The consequent assured revenue
stream supports liquidity and thereby debt servicing capacity.
* Partner's experience: Benefits derived from the partner's
experience of over 33 years helped bag the long-term lease
contract with PUNGRAIN, thus supporting business growth over the
medium term.
Outlook: Stable
CRISIL believes BNO will continue to benefit from the long-term
lease agreement with PUNGRAIN and the experience of its partners.
The outlook may be revised to 'Positive' in case of improvement
in liquidity, backed by large cash accrual and increased funding
support of the partners. The outlook may be revised to 'Negative'
in case of delays in debtor realisation, capital withdrawal by
partners, or repayment of unsecured loans availed of from related
parties, further constraining liquidity.
BNO, a partnership concern, was set up in 2008 by the Chadha
family in Amritsar. The firm leases warehouses. It has warehouse
capacity of 60,000 tonne, currently leased to PUNGRAIN for
storing rice and wheat.
BHARTIYA SAMRUDDHI: CRISIL Raises Rating on INR123.6MM Loan to B
----------------------------------------------------------------
CRISIL Ratings has upgraded its rating on the long-term bank
facility of Bhartiya Samruddhi Finance Limited (BSFL) to 'CRISIL
B/Stable' from 'CRISIL D'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term 123.6 CRISIL B (Upgraded from
Bank Loan Facility 'CRISIL D')
The upgrade reflects improvement in BSFL's credit risk profile
following settlement of its entire outstanding liabilities and
sustainable increase in its managed portfolio as a banking
correspondent. The company had INR211 crore of debt outstanding
as on September 2014 the company repaid INR67 crore to the
lenders as part of one-time settlement. The balance amount was
waived off by the lenders. The company had a networth of INR2.8
crore and nil gearing as on December 31, 2017. BSFL acts as a
banking correspondent for RBL Bank Ltd in select districts of
Uttarakhand, Uttar Pradesh, and Madhya Pradesh, and managed a
portfolio of INR44 crore as on December 31, 2017. The
delinquencies, measured in terms of 30 days past due (dpd), stood
at INR1.2 crore.
The rating reflects BSFL's modest capitalisation, weak
profitability, and susceptibility to regulatory and legislative
risks associated with the microfinance sector. These weaknesses
are partially offset by the extensive experience of the
management.
Analytical Approach
For arriving at the rating, CRISIL has considered the standalone
business and financial risk profiles of BSFL.
Key Rating Drivers & Detailed Description
Weaknesses
* Modest capitalization: Though the company had no debt, it had
net non-performing assets of INR6.9 crore, nearly 2.5 times its
networth of INR2.8 crore, as on December 31, 2017. The networth
has increased as waiver of a large part of debt resulted in a
one-time gain on account of settlement. However, the networth
remains small.
* Weak profitability: BSFL's operating losses continue. The
company generated total income of INR3 crore during the nine
months through December 2017, which was lower than its operating
expenditure of INR5.5 crore, resulting in an operating loss of
INR2.6 crore. BSFL has started its BC business in May 2017 and
incurred its major costs in the first half of fiscal 2018 and has
currently achieved operational breakeven. Profitability will
improve gradually as the company scales up its business.
* Susceptibility to regulatory and legislative risks associated
with the microfinance sector: BSFL's business involves
facilitating loans to the poor and downtrodden sections of
society. It will remain exposed to socially sensitive factors,
including charging of high interest rate, and consequently, to
tighter regulations and legislation.
Strength
* Extensive experience of the management: BSFL's management has
extensive experience in financial services including
microfinance. The company has over two decades of experience in
the microfinance business and has been a pioneer in extending
organised microfinance and innovative solutions to those without
access to banking and financial services. BSFL's longstanding
presence and the experience of its management team have helped
the company scale up its banking correspondent portfolio for RBL
Bank Ltd.
Outlook: Stable
CRISIL believes BSFL will continue to benefit from the experience
of its management team and increase its banking correspondent
portfolio over the medium term. However, financial risk profile
is expected to remain modest. The outlook may be revised to
'Positive' if BSFL improves capitalisation and profitability. The
outlook may be revised to 'Negative' if there is a sustained
weakness in profitability, resulting in deterioration in
capitalisation.
BSFL, a non-banking financial company promoted by Bhartiya
Samruddhi Investments and Consulting Services Ltd, began
operations in 1997. It provides microfinance (credit and
insurance) services and knowledge-based technical assistance. Its
services are organised under two major heads: livelihood
financial services and common service centres. Its customers
include small and marginal farmers, rural artisans,
microenterprises, and federations and co-operatives owned by
self-help groups.
CENTENARY ARCADES: CRISIL Assigns D Rating to INR25.55MM Loan
-------------------------------------------------------------
CRISIL Ratings has assigned 'CRISIL D' ratings to the bank
facilities of Centenary Arcades Private Limited (CAPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Lease Rental
Discounting Loan 25.55 CRISIL D (Assigned)
The rating reflects delay by CAPL in repaying equated monthly
installment (EMI) obligation of the lease rental discounting
(LRD) loan. The delays are due to cash flow mismatches arising
from late receipt of payment from Big Bazaar (a part of Future
Retail Ltd) over past 3-4 months.
The rating also reflects a weak financial risk profile. This
weakness is partially offset by long-term contract with Big
Bazaar, which it the sole tenant of the company.
Key Rating Drivers & Detailed Description
Weakness
* Delays in debt servicing and weak liquidity: There has been
delays in repaying EMI obligations of the LRD loan. EMI of
INR0.26 cr for December 2017 is still unpaid. The deferrals are
due to cash flow mismatches arising from late receipt of payment
from Big Bazaar over past 3-4 months.
* Below-average financial risk profile: CAPL's financial risk
profile is below average marked by a modest networth of INR3.87
crore, and high gearing of 6.53 times as on March 31, 2017.
Interest coverage ratio was 1.23 times in fiscal 2017.
Strengths
* Long-term contract with Big Bazaar: The company has a long-term
contract of 15 years with Big Bazaar, thus ensuring steady
revenue visibility over the medium term.
CAPL is promoted by Mr N L Nagendra. It has commercial space in
Mysore which has been occupied by Big Bazaar since 2008; CAPL has
signed a 15-year agreement with Big Bazaar.
CHANDNA INFRAPROJECTS: CARE Reaffirms D Rating on INR12.81cr Loan
-----------------------------------------------------------------
CARE Ratings reaffirmed ratings on certain bank facilities of
Chandna Infraprojects (India) Private Limited (CIIPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 12.81 CARE D Reaffirmed
Short-term Bank
Facilities 0.50 CARE D Reaffirmed
Detailed Rationale & Key rating Drivers
The ratings of CIIPL continue to take into account ongoing delays
in servicing of interest and instalment of its term loan owing to
stressed liquidity.
Detailed description of the key rating drivers
Key Rating Weaknesses
Irregularity in debt servicing due to stressed liquidity: The
company is engaged in the business of processing of granites
which is mainly used in the cyclical real estate sector. It
maintains inventory of 260-300 days and also collection period
got stressed. Due to it, the liquidity position of the company
has deteriorated and that led to delay in debt servicing. There
are various instances of delay in debt servicing of interest and
instalment of term loan. The banker of the company has also
verbally confirmed the same.
Jaipur (Rajasthan) based Chandna Infraprojects (India) Private
Limited (CIIPL), incorporated in 2010, is a part of Chandna
Group which is engaged primarily in the mining of marbles and
granites as well as cutting and processing of marbles since
2000.
D S KULKARNI: CARE Moves D Rating to Not Cooperating Category
-------------------------------------------------------------
CARE has been seeking information from D S Kulkarni Developers
Limited (DSK) to monitor the rating vide e-mail communications
dated January 23, 2018, January 29, 2018, January 31, 2018,
February 20, 2018, 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, DSK has not paid the surveillance fees for the rating
exercise as agreed to in its Rating Agreement. The rating on
DSK's facilities will now be denoted as CARE D; ISSUER NOT
COOPERATING.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 715.79 CARE D; ISSUER NOT COOPERATING;
Facilities Based on best available
information
Non-convertible 111.59 CARE D; ISSUER NOT COOPERATING;
Debentures Based on best available
information
Fixed Deposits 33.86 CARE D; ISSUER NOT COOPERATING;
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.
The rating continues to take into account inability of the
company to service its debt obligation on the bank borrowings,
NCD's and FD's.
Detailed description of the key rating drivers
Key Rating Weaknesses
There are on-going delays in debt servicing on account of weak
financial position of the company.
The company reported a decline of 34.22% (Y-o-Y) in Total
Operating Income (TOI) from INR175.01 crore in FY16 to INR115.12
crore in FY17 and a drop in Profit After Tax (PAT) to INR0.89
crore in FY17 from INR12.39 crore in FY16.
DSK was incorporated in 1991 by Mr D S Kulkarni. The equity
shares of the company are listed on stock exchanges. DSK is the
flagship company of the DSK Group, formed for the purpose of real
estate development.
E-VILLAGE RESORTS: CRISIL Assigns 'B' Rating to INR17MM LT Loan
---------------------------------------------------------------
CRISIL Ratings has assigned its 'CRISIL B/Stable' to the long
term bank facility of E-village Resorts & Ayurvedha Private
Limited.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term
Bank Loan Facility 17 CRISIL B/Stable (Assigned)
The ratings reflect the exposure to demand and implementation
risk, and to intense competition and cyclicality inherent in the
hospitality industry. These rating weaknesses are partially
offset by extensive experience of promoter.
Key Rating Drivers & Detailed Description
Weakness:
* Exposure to implementation and demand risks for the ongoing
projects: The company is constructing a new ayurvedic resort at a
total cost of INR32.5 crore. Liquidity will be susceptible to
their timely completion and occupancy rates.
* Vulnerability to intense competition and cyclicality inherent
in the hospitality industry: The hotel industry is vulnerable to
changes in the domestic and international economies. During weak
periods the revenue per available room for premium hotels is
expected to be affected more significantly than for midscale or
economy hotels.
Strengths:
* Extensive industry experience of the promoters: The promoters
have close to a decade of experience in real estate development
in the Thrissur region. The past projects have seen healthy
offtake.
Outlook: Stable
CRISIL believes EVRAPL would benefit over the medium term from
the extensive industry experience of the promoters. The outlook
may be revised to 'Positive' if the company completes its project
as expected in stipulated timelines and ramps up its operations
earlier than expected. The outlook may be revised to negative in
case there is a cost or time over run in the project or if the
ramp up in operations is not as expected. Further the timely
servicing of term debt obligations will remain a key sensitivity
factor.
Set up in September 2016, EVRAPL is currently constructing a new
5 ' star category Ayurvedic resort on the banks of Karuvannur
River in Thrissur District.
GOPI FABRICS: CRISIL Moves D Rating to Not Cooperating Category
---------------------------------------------------------------
CRISIL Ratings has been consistently following up with Gopi
Fabrics (P) Ltd. (GFPL) for obtaining information through letters
and emails dated November 23, 2017, February 12, 2018 and
February 16, 2018 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 1 CRISIL D (Issuer Not Cooperating;
Rating Migrated)
Long Term Loan 4.5 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 Gopi Fabrics (P) Ltd. which
restricts CRISIL's ability to take a forward looking view on the
entity's credit quality. CRISIL believes information available on
Gopi Fabrics (P) Ltd. 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 Gopi Fabrics (P) Ltd. 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.
GFPL was incorporated in 1992, promoted by the Amritsar, Punjab-
based Mr Naresh Aggarwal and his family. The company manufactures
knitted fabric.
GREEN INDIA: CRISIL Assigns D Rating to INR5MM Cash Loan
--------------------------------------------------------
CRISIL Ratings has assigned its 'CRISIL D' rating to the long-
term bank facilities of Green India Irrigation Limited (GIIL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 5 CRISIL D (Assigned)
Rupee Term Loan 5 CRISIL D (Assigned)
The rating reflects delays in debt servicing by the company due
to weak liquidity. The rating also factors in GIIL's small scale
and working capital intensity in operations, and weak financial
risk profile. These weaknesses are partially offset by promoters'
extensive experience and funding support.
Analytical Approach
Unsecured loans of INR0.72 crore, received from the promoters as
on March 31, 2017, have been treated as neither debt nor equity
as the loans are expected to be retained in the business over the
medium term and are interest-free.
Key Rating Drivers & Detailed Description
Weaknesses
* Delays in debt servicing: There have been delays in servicing
the term loan and cash credit account on account of weak
liquidity.
* Small scale of operations: Operating income was modest at
INR2.5 crore in fiscal 2017 (INR5.6 crore in fiscal 2016). The
revenue has declined as focus has shifted to manufacturing from
trading. Also, demonetisation and GST have delayed the start of
production.
* Working capital-intensive operations: Operations are working
capital intensive with gross current assets of 682 days as on
March 31, 2017, driven by debtors of 159 days and sizeable
inventory of 370 days.
* Weak financial risk profile: The gearing was high with low
networth, following losses in fiscal 2017. The gearing was 7.42
times while networth was INR1.3 crore as on March 31, 2017. This
led to weak debt protection metrics: interest coverage ratio was
1.0 time, and net cash accrual to total debt ratio was 0.001 time
in fiscal 2017.
Strength
* The promoters' experience and funding support: Benefits from
the promoters' experience of more than a decade in the irrigation
industry, and need-based funding support should continue to
support the business.
Incorporated in August 2008, GIIL manufactures drip and sprinkler
irrigation systems. Mr. Diliprao Autade Patil, and Mr Mahesh Aher
are the promoters. The manufacturing unit is in Shrirampur MIDC,
Ahmednagar District, Maharashtra.
HOTHUR ISPAT: CRISIL Assigns B+ Rating to INR30MM Proposed Loan
---------------------------------------------------------------
CRISIL Ratings has revoked the suspension of its rating on the
bank facility of Hothur Ispat Private Limited (HIPL) and has
assigned its 'CRISIL B+/Stable' rating to the bank facilities.
CRISIL had suspended the ratings on September 23, 2016, as the
company had not provided the information required for a rating
review. It has now shared the requisite information, enabling
CRISIL to assign a rating to the facilities.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Fund- 30 CRISIL B+/Stable (Assigned;
Based Bank Limits Suspension Revoked)
Proposed Term Loan 10 CRISIL B+/Stable (Assigned;
Suspension Revoked)
The rating reflects small scale of operations in a highly
competitive and fragmented industry, susceptibility of the
operating margin to volatility in raw material prices, and
vulnerability to cyclicality in the infrastructure and real
estate sectors. These weaknesses are partially offset by the
extensive experience of its promoters in the sponge iron industry
and funding support from its promoter in form of unsecured loan.
Analytical Approach
The promoters also own other group entities namely Hothur Traders
100% E.O.U. (Rated CRISIL A4;Issuer Not Cooperating), Hothur
Traders (HT), and Sharmeen Transport Company (Sharmeen). CRISIL
has not consolidated its group entities with HIPL on account of
the following:
* There are no operational and financial synergies
* The management stated posture to keep the entities separately
* Management has not shared financials of the non rated entities
CRISIL has treated unsecured loan from promoters as 75% equity as
they are expected to remain in business going ahead.
Key Rating Drivers & Detailed Description
Weaknesses
* Small scale of operations in a highly competitive industry:
Revenues were modest at INR78 crore up to December 2017, limiting
any benefit from economies of scale that are available to players
with larger volumes. The small scale also restricts bargaining
power with suppliers and customers. Competition is stiff because
of the presence of numerous large organised and unorganised
players across the country given the limited entry barriers. This
has resulted in low profitability. The scale of operations is
likely to remain small over the medium term because of the highly
competitive and fragmented nature of the industry.
* Susceptibility of the operating margin to volatility in raw
material prices and to cyclicality in the infrastructure and real
estate sectors: The cost of production and profit margins of
players in this industry are heavily dependent on raw material
prices. Furthermore, profitability is linked to the overall
fortunes of the inherently cyclical steel industry, which has
strong correlation with overall gross domestic product growth.
The operating performance will remain susceptible to volatility
in raw material prices and offtake by key user sectors, over the
medium term.
Strengths
* Extensive experience of promoters and funding support from
promoters: The promoters have been in this industry for the past
more than three decades. Longstanding presence of promoters and
revival in demand are expected to support overall business risk
profile over the medium term. Promoter also have infused
unsecured loan to repay its debt and to fund working capital
requirement. As on December 2017, unsecured loan from promoter
were at INR89.3 crore, these loan are expected to remain in
business going ahead.
Outlook: Stable
CRISIL believes HIPL will continue to benefit from the extensive
industry experience of its promoters and their established
relationship with customers and suppliers. The outlook may be
revised to 'Positive' in case of further improvement in the scale
of operations and profitability while the capital structure is
maintained. The outlook may be revised to 'Negative' in case of
lower-than-expected revenue or profitability, a stretched working
capital cycle, or any large, debt-funded capex, weakening the
financial risk profile, especially liquidity.
Set up in 2004 in Bellary, Karnataka, HIPL is as a closely held
family business, promoted by Mr Hothur Mohammed Iqbal. HIPL
manufactures sponge iron.
JABALPUR HOSPITAL: CRISIL Moves B- Rating to Not Cooperating
------------------------------------------------------------
CRISIL Ratings has been consistently following up with Jabalpur
Hospital and Research Centre Private Limited (JHRC) for obtaining
information through letters and emails dated January 31, 2018,
February 12, 2018 and February 16, 2018 among others, apart from
telephonic communication. However, the issuer has remained non
cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 2 CRISIL B-/Stable (Issuer Not
Cooperating; Rating Migrated)
Term Loan 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 Jabalpur Hospital and Research
Centre Private Limited which restricts CRISIL's ability to take a
forward looking view on the entity's credit quality. CRISIL
believes information available on Jabalpur Hospital and Research
Centre 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 Jabalpur Hospital and Research Centre Private
Limited to 'CRISIL B-/Stable Issuer not cooperating'.
JHRC, incorporated in 1989, is managed by Mr R S Dhirawani, his
wife Mrs Pragya Dhirawani, and his two younger brothers, Mr
Dinesh Dhirawani and Mr Prakash Dhirawani. The company operates a
250-bed multi-speciality hospital in Jabalpur, Madhya Pradesh,
with a focus on providing cardiac and pulmonary health services.
The hospital is accredited and approved by the National
Accreditation Board for Hospitals and Healthcare Providers, and
the National Accreditation Board for Testing and Calibration
Laboratories.
JSW STEEL: Fitch Rates Proposed USD Sr. Unsec. Notes 'BB(EXP)'
--------------------------------------------------------------
Fitch Ratings has assigned a 'BB(EXP)' expected rating to India-
based JSW Steel Limited's (JSWS, BB/Stable) proposed US dollar
senior unsecured notes, which the company states will be used for
repaying debt, capex or any other purpose in accordance with
regulations. The final rating is subject to the receipt of final
documentation conforming to information already received.
Around 60% of JSWS's consolidated debt, including acceptances,
was secured as of the first nine months of the financial year
ending March 2018 (FY18), resulting in a secured debt/annualised
EBITDA ratio of around 2.5x. This indicates the possibility of
subordination and lower recoveries for unsecured debt, but
further bespoke recovery analysis suggests above-average recovery
prospects for senior unsecured creditors. Therefore, Fitch have
rated the proposed notes at the same level as the company's
Issuer Default Rating (IDR).
KEY RATING DRIVERS
Sustained Profitability: JSWS's standalone operations contribute
over 90% of its consolidated EBITDA. Standalone steel sales
volume was up by 5% yoy in 9MFY18 and EBITDA per tonne (t)
remained healthy at around INR7,630/t (USD120/t). Domestic steel
prices followed the rise in international prices with a lag,
improving EBITDA/t to INR9,000/t in 3QFY18, from approximately
INR6,300/t in 1QFY18. The company has sustained its healthy
profitability since FY17, when average EBITDA/t on a standalone
basis jumped by around 50% from the FY16 low, as pressure from
imports was reduced and fundamentals for the broader industry
improved.
Improved Industry Fundamentals: China's hot-rolled steel-sheet
spot prices have increased to USD650/t, from around USD450/t in
April 2017, due to the improved demand-supply balance in the
world's largest market and higher raw-material costs. Chinese
steel exports fell by around 30% in 2017, despite record steel
output. China stated in February 2018 that it aims to meet its
target of cutting steel capacity by 150 million t in 2018, two
years earlier than planned. Fitch expects producers' margins to
be largely sustained in 2018, although prices may moderate over
the year.
India's steel demand growth is steady, at around 5% in 9MFY18,
and the rate should be sustained in the near term due to
government infrastructure spending, improved agriculture-sector
income and an overall acceleration in economic activity. Robust
international steel prices have rendered India's anti-dumping
duties ineffective. However, risks to Indian steelmakers' margins
are relatively lower due to regulatory protection should global
steel prices trend downward.
Steady Execution, Spending Discipline: JSWS plans to invest
around INR270 billion over FY18-FY21 on several projects,
including increasing steelmaking capacity expansion at its Dolvi
plant by five million t per year by 2020 at a cost of INR150
billion. In addition, JSWS intends to expand downstream
facilities and revamp existing capacity. Projects that were
announced in FY16 are proceeding as planned and are scheduled for
completion in FY19. These include a pipe conveyor system for
JSWS's key Vijayanagar plant to cut iron-ore transportation
costs, a tin plate mill and a 1.5 million t per year coke-oven
plant. Successful completion should boost the company's sales
volume and profitability.
JSWS is considering acquiring assets, including those under
insolvency proceedings in India. The company has shown interest
in three Indian assets with the intention of keeping a minority
stake and ring-fencing itself from their liabilities. JSWS has a
record of disciplined investment, which has at times meant it was
not the highest bidder in competitive bids. Fitch believe this
alleviates the risk to its leverage profile from its growth
ambitions.
Robust Operational Profile: JSWS is India's largest steelmaker by
sales volume with a dominant market share in southern and western
India, where its plants are located, supported by a rising share
of value-added products. Its highly efficient operations are
characterised by robust yields and low labour costs, which partly
offset its lack of meaningful vertical integration. The company
won mining rights for five iron ore mines in Karnataka in 2016.
It has started production from one mine in February 2018 and aims
to produce 4.7 million t of iron ore, or about 20% of the amount
needed by its Vijayanagar plant, by FYE19. Captive iron-ore
production would improve supply certainty for JSWS and cut costs
to some extent.
Lower Leverage, Improved FCF: Fitch expect FFO adjusted gross
leverage to moderate below 4.5x by FYE19 (FYE17: 4.9x, FYE16:
8.0x) due to sustained EBITDA strength from higher sales volume
and better performance by subsidiaries. Free cash flow (FCF) is
likely to be modestly positive over the next two years, despite a
capex pick-up in line with management guidance. Fitch have
assumed acquisition spending in FY19 and use the equity method
accounting for minority stakes in assets with debt that does not
have recourse to JSWS. A more aggressive inorganic growth
strategy is a risk to Fitch forecasts.
DERIVATION SUMMARY
JSWS can be compared with domestic peer, Tata Steel Limited (TSL,
BB/Rating Watch Evolving), which is rated 'BB-' when excluding a
one-notch uplift for potential parental support. TSL's standalone
rating is based on a combination of robust operations in India
and a much weaker operating profile in Europe. TSL plans to cut
its European exposure with a proposed joint venture with
thyssenkrupp AG (BB+/Rating Watch Positive) to which it will
transfer its European flat steel assets. However, to resolve the
Rating Watch, Fitch is awaiting details on the joint venture
after the signing of definitive agreements. Both TSL and JSWS
have business-profile strengths in India, with vertical
integration a key advantage for TSL and JSWS's key assets being a
position as the market leader in steel sales and cost-efficient
operations. The two companies also have a similar leverage
outlook.
ArcelorMittal S.A. (BB+/Positive) is rated higher than JSWS as it
is larger and more diversified than JSWS and has lower leverage.
However, notching differential is limited by ArcelorMittal's
lower margin due to its global manufacturing facilities,
including in locations with structurally high costs, such as
Europe and the US.
KEY ASSUMPTIONS
Fitch's Key Assumptions within Fitch Rating Case for the Issuer
- Standalone sales volume CAGR of 6% over FY18-FY21 (FY17: 22%)
- Standalone EBITDA per t of around INR8,100 on average over
FY18-FY21
- Cumulative capex, including acquisition spending, of around
INR280 billion over FY18-FY21
- Average dividend payout of INR8 billion over FY18-21
RATING SENSITIVITIES
Developments that May, Individually or Collectively, Lead to
Positive Rating Action
- FFO gross leverage below 3.5x on a sustained basis
- Sustained neutral or positive FCF
Developments that May, Individually or Collectively, Lead to
Negative Rating Action
- FFO gross leverage above 4.5x for a sustained period
- Negative FCF for a sustained period
- Evidence of a shift in focus on maintaining investment
discipline
LIQUIDITY
Manageable Liquidity: JSWS reported cash and cash equivalents of
around INR15 billion and debt of INR435 billion at end-2017. It
also had available undrawn credit facilities (fund and non-fund
based) of around INR115 billion and revenue and capital
acceptances totalling around INR100 billion. Fitch estimate
short- and long-term debt due over the next 12 months at over
INR100 billion, in addition to the acceptances. Fitch expect JSWS
to rely on refinancing, given its inadequate FCF generation, cash
balance and undrawn credit facilities. JSWS's proposed bond
should enable it to refinance a part of its debt due over the
next three years. In addition, the company's banking
relationships and access to diverse funding sources, supported by
improved industry fundamentals, should allow it to manage its
liquidity needs.
JUPITER BUILDTECH: CRISIL Withdraws B Rating on INR9MM Term Loan
----------------------------------------------------------------
CRISIL Ratings has been consistently following up with Jupiter
Buildtech Private Limited (JBPL) for obtaining information
through letters and emails dated July 10, 2017, and August 7,
2017 among others, apart from telephonic communication. However,
the issuer has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Rupee Term Loan 9 CRISIL B/Stable (Issuer Not
Cooperating; Rating Withdrawal)
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as they are arrived at without any
management interaction and are 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 JBPL. This restricts CRISIL's
ability to take a forward JBPL is consistent with 'Scenario 1'
outlined in the 'Framework for Assessing Consistency of
Information with CRISIL BB rating category or lower. Based on the
last available information, the rating on bank facilities of JBPL
continues to be 'CRISIL B/Stable Issuer Not Cooperating'.
CRISIL has withdrawn its ratings on the bank facilities of JBPL
on the request of the company and receipt of a no objection
certificate from its bank. The rating action is in line with
CRISIL's policy on withdrawal of its ratings on bank loans.
Incorporated in 2009, Jupiter Buildtech Private Limited (JBPL) is
engaged into real estate development in Agra and is a part of
Maruti Builders group. The group was founded by Mr. Brijesh
Vashistha, Mr. Rakesh Kumar Mangal, Mr. Arun Kumar Agarwal and
Mr. Bharat Bhushan Goyal. JBPL is undertaking a residential
project-Maruti Forest in Agra.
KALPAKA TRANSPORT: CRISIL Moves B+ Rating to Not Cooperating
------------------------------------------------------------
CRISIL Ratings has been consistently following up with Kalpaka
Transport Co Private Limited for obtaining information through
letters and emails dated January 30, 2018, February 15, 2018 and
February 21, 2018 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Overdraft 9 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 Kalpaka Transport Co Private
Limited which restricts CRISIL's ability to take a forward
looking view on the entity's credit quality. CRISIL believes
information available on Kalpaka Transport Co 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 Kalpaka Transport Co Private Limited to 'CRISIL
B+/Stable Issuer not cooperating'.
For arriving at its ratings, CRISIL has combined the business and
financial risk profiles of KTCPL and Kerala Transport Company
(KTC). This is because the two entities, together referred to as
the KTC group, are in the same line of business, under a common
management, and have significant operational linkages and
fungible cash flows between them.
Set up in 1958, KTC and KTCPL provide freight transportation
services to players in the fast-moving consumer goods,
automobiles, paints, and tyres industries all over India. The
firms also own and operate Indian Oil Corporation's fuel bunks in
Kozhikkode, Kerala and provide clearing and shipping services at
the airport and seaport in Kochi.
KAMAKHYA TRADERS: CARE Assigns B+ Rating to INR10cr LT Loan
-----------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of
Kamakhya Traders (KT), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 10.00 CARE B+; Stable Assigned
Detailed description of the key rating drivers
The rating assigned to the bank facilities of KT is primarily
constrained on account of its financial risk profile marked by
modest scale of operation with thin profitability margins, weak
solvency position and stressed liquidity position. The rating is,
further, constrained on account of its constitution as a
partnership concern, its presence in highly fragmented and
competitive industry and vulnerability of margins to fluctuations
in traded goods prices and foreign exchange rate. The rating,
however, derives strength from the experienced management with
long track record of operations.
The ability of the firm to increase in the scale of operations
with improvement in profitability and efficient management of
working capital are the key rating sensitivities.
Key Rating Weakness
Financial risk profile marked by modest scale of operation, thin
profitability margins, weak solvency position and stressed
liquidity position
The scale of operations of the company stood modest and remained
stagnant with Total Operating Income: (TOI) of INR30.60 crore in
FY17 as against TOI of INR30.62 crore in FY16. Further, being
trading nature of the business with its presence in the highly
fragmented and competitive industry, profitability margins of the
firm stood thin marked by PBILDT and PAT margin of 3.18 % and
0.25% respectively during FY17.
The capital structure of the firm stood moderately leveraged with
an overall gearing of 1.60 times as on March 31, 2017. Further,
the debt service coverage indicators stood weak with high total
debt to GCA and low interest coverage ratio.
The liquidity position of the firm stood stressed with average
full utilization working capital bank borrowings during last 12
months ended December 2017. The liquidity ratios of the firm
stood moderate marked by current and quick ratio of 1.36 times
and 1.23 times respectively as on March 31, 2017.
Constitution as a partnership concern: Constitution of the firm
as a proprietorship concern with moderate net worth base of
INR5.52crore restricts its overall financial flexibility in terms
of limited access to external fund for any future expansion
plans. Furthermore, there is an inherent risk of possibility of
withdrawal of capital and dissolution of the firm in case of
death/insolvency of proprietor.
Highly fragmented and competitive building material industry with
vulnerability of margins to fluctuations in raw material prices
and foreign exchange rate: KT is primarily engaged in trading of
coal, steel and cement which is characterized by high
fragmentation mainly due to presence of a large number of
unorganized players. Further, the profitability margins of the
firm is envisaged to stood lower due to trading nature of
operations along with margins being susceptible to any
adverse movement in raw material prices as the firm will not be
immediately able to pass on the increased price to its customer
and its raw material inventory holding period. Further, the
profitability margins of the firm is exposed to fluctuation in
foreign exchange rates as the firm imports from international
market and it does not follow any active hedging policy.
Key Rating Strengths
Experienced management with long track record of operations: The
firm was formed in 2001 and hence, has a track record of more
than a decade in the industry. Mr. Rajesh Kumar Singh, partner,
graduate by qualification, has around two decade of experience in
the coal industry and looks after overall affairs of the firm.
Further, he is assisted by the second tier management who has
long-standing presence in the industry and has established
relations with customers and suppliers.
KATIYAR COLD: CRISIL Moves B/Not Cooperating Rating to CRISIL B-
----------------------------------------------------------------
Due to inadequate information, and in-line with the Securities
and Exchange Board of India guidelines, CRISIL Ratings had
migrated the ratings on the bank facilities of Katiyar Cold
Storage Private Limited (KCL) to 'CRISIL B/Stable Issuer Not
Cooperating'. However, the management has started sharing
information necessary for a comprehensive review of the rating.
Consequently, CRISIL is migrating the ratings from 'CRISIL
B/Stable Issuer Not Cooperating' to 'CRISIL B-/Stable.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 3.6 CRISIL B-/Stable (Rating
migrated from 'CRISIL B/Stable
Issuer Not Cooperating')
Long Term Loan 2.2 CRISIL B-/Stable (Rating
migrated from 'CRISIL B/Stable
Issuer Not Cooperating')
Proposed Working 3.2 CRISIL B-/Stable (Rating
Capital Facility migrated from 'CRISIL B/Stable
Issuer Not Cooperating')
The ratings reflect the modest scale of operation along with weak
financial risk profile. These weaknesses are partially offset by
the extensive experience of the promoters in the warehouse and
cold storage service industry along with their timely funding
support.
Analytical Approach
To arrive at the ratings, CRISIL has treated unsecured loans of
INR0.97 crores (as on March 31, 2017) from promoters as debt.
Key Rating Drivers & Detailed Description
Weaknesses
* Weak financial risk profile: Net worth declined to negative
INR1.77 crore as on March 31, 2017 from INR1.64 crore as on
March 31, 2016 on account of loss incurred due to a blast in its
plant, which was insured by The New India Assurance Co. Ltd and
the company is expected to receive claim. A compensation of
INR3.60 crore has to be paid to farmers. This led to weakening of
leverage and debt protection metrics. Interest cover and net cash
accrual to adjusted debt declined to 1.8 times and negative 0.51
times, respectively, in fiscal 2017 from 2.3 times and 0.04
times, respectively, in fiscal 2016, due to the loss incurred.
* Modest scale of operations: Despite a 26% increase from fiscal
2016, operating income was modest at INR1.88 crore in fiscal 2017
and is expected at around INR2 crore in fiscal 2018. Competition
is intense in the cold storage industry in India due to the
presence of a large number of small players with marginal
capacities.
Strengths:
* Extensive experience of the promoters: Benefits from the
promoters' two decades of experience should support the business
risk profile over the medium term.
* Funding support by the promoters: Need-based funding support
from the promoters is expected to continue over the medium term.
Outlook: Stable
CRISIL believes that KCL will continue to benefit from the
extensive experience of its promoters. The outlook may be revised
to 'Positive' if increase in scale of operations and operating
margin leading to high cash accrual strengthens capital
structure. The outlook may be revised to 'Negative' if low cash
accrual or any large debt-funded capex weakens capital structure
or if increase in working capital requirement exerts pressure on
liquidity.
KCL, incorporated in 1998, provides cold storage and warehouse
services to farmers for potatoes near Kanpur mandi. Mr Shambu
Singh Katiyar, Mr Harshit Singh Katiyar, and Mr Garvit Katiyar
manage operations.
KESAR ENTERPRISES: CARE Reaffirms D Rating on INR107.26cr Loan
--------------------------------------------------------------
CARE Ratings reaffirmed ratings on certain bank facilities of
Kesar Enterprises Limited (KEL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank
Facilities
(Term Loan) 107.26 CARE D Reaffirmed
Long Term Bank
Facilities
(Fund Based) 63.30 CARE D Reaffirmed
Short Term Bank
Facilities
(Non Fund Based) 0.20 CARE D Reaffirmed
Detailed Rationale & Key Rating Drivers
The ratings assigned to the bank facilities of KEL continues to
reflect the ongoing delays in the servicing of debt obligations.
KEL incurred heavy losses in past and has a negative net worth.
Detailed description of the key rating drivers
Key Rating Weaknesses
Delays in Debt Servicing: There are on-going delays in servicing
of interest and principal. The account has already been
classified as an NPA by the bankers.
Negative Net Worth: The Net worth of the company eroded over the
years due to losses made by the company in past. The company made
net profit of Rs 8.21 crores in FY17 on the wake of improving
scenario of agro products especially sugar. Though the company
made profits, the net worth still stays negative and the company
has further reported loss in 9MFY18 (UA).
Kesar Enterprises Ltd (KEL), formerly known as Kesar Sugar Works
Ltd was originally promoted by Kilachand Group in October 1933.
In 1985, the promoters renamed it to its present name. The
company is part of the Kilachand Group, one of the old and well
established Industrial Houses in India having diversified
interest in sugar, distillery, renewable energy, storage and
other agro products.
KEL is a fully-integrated sugar company operating it's sugar unit
with a capacity of 7,200 TCD (Tonnes Crushed per Day), co-
generation power plant of 44 MW, and a distillery unit producing
industrial alcohol with capacity of 50,000 KLPD (Kilo Litres per
Day). The company's integrated sugar plant is located at Baheri,
Uttar Pradesh. The power plant is a fully automated bagasse fired
co-generation power plant. The plant can operate at high pressure
of 115 kg/cm2. The company has entered into a PPA (Power Purchase
Agreement) with Uttar Pradesh Power Corporation Limited (UPPCL)
for sale of power for 20 years. Besides, the company produces
open pollinated and hybrid seeds under its brand name "Kesar
seeds". The company has an in-house research division at
Hyderabad where the seeds are developed.
LOVELY ENTERPRISES: CRISIL Moves D Rating to Not Cooperating
------------------------------------------------------------
CRISIL Ratings has been consistently following up with Lovely
Enterprises Private Limited (LEPL; part of the Lovely group) for
obtaining information through letters and emails dated
November 13, 2017, January 17, 2018, February 14, 2018 and
February 19, 2018 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 25 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 Lovely Enterprises Private
Limited which restricts CRISIL's ability to take a forward
looking view on the entity's credit quality. CRISIL believes
information available on Lovely Enterprises 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 Lovely Enterprises Private Limited to 'CRISIL D
Issuer not cooperating'.
The Kolkata-based Lovely group was promoted by Mr Kishan Gopal
Biyani and his son, Mr Samir Biyani. Lovely International Pvt Ltd
(LIPL), incorporated in 1999, trades in sawn timber and timber
logs. LEPL, which was set up in 2003, also trades in other
commodities such as marble, and iron and steel products; however,
timber remains the group's main product.
MAA BHAGWATI: Ind-Ra Assigns BB- LT Issuer Rating, Outlook Stable
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Maa Bhagwati Re-
Rolling Mills Private Limited (MBRMPL) a Long-Term Issuer Rating
of 'IND BB-'. The Outlook is Stable. The instrument-wise rating
actions are as follows:
-- INR48.5 mil. Fund-based limits assigned with IND BB-/Stable
rating;
-- INR25.6 mil. Long-term loan due on March 2023 assigned with
IND BB-/Stable rating; and
-- INR75.9 mil. Proposed-fund-based limits* assigned with
Provisional IND BB-/Stable rating.
*The rating is provisional and shall be confirmed upon the
sanction and execution of loan documents for the above facilities
by MBRMPL to the satisfaction of Ind-Ra.
KEY RATING DRIVERS
The ratings reflect MBRMPL's low revenue base due to a small
scale of operations, and weak credit metrics because of weak
profitability owing to volatility in the prices of raw materials
and finished goods. During FY17, the revenue increased 26.6% yoy
to INR355 million on account of an increase in the quantity of
structured steel sold during the year (FY17: 13,754MT; FY16:
10,579MT). The company booked revenue of INR380 million till
3QFY18. The interest coverage improved to 2.8x in FY17 (FY16:
2.6x) due to an increase in EBITDA to INR18 million (INR8
million), resulting from a decline in raw material cost. However,
the net leverage deteriorated to 3.5x in FY17 (FY16: 1.7x) due to
a higher short-term debt balance at the year-end of INR47 million
(INR20 million).
The ratings are constrained by the company's tight liquidity
position as reflected from its average maximum 99.55% utilization
of the fund-based limits during the 12 months ended January 2018.
However, the ratings are supported by promoter's experience of
seven years in the iron and steel industry.
RATING SENSITIVITIES
Negative: A decline in the overall credit profile will be
negative for the ratings.
Positive: A decline in the revenue leading to an overall
deterioration in credit profile will be negative for the ratings.
COMPANY PROFILE
MBRMPL was incorporated in November 2009 in Rourkela, Odisha. The
company started its commercial operation from June 2011 and
manufactures structured steel products such as angles, channels,
rounds and squares.
MAINI CONSTRUCTIONS: CARE Moves D Rating to Not Cooperating Cat.
----------------------------------------------------------------
CARE has been seeking information from Maini Constructions
Equipments Private Limited (MCEPL) to monitor the ratings
vide e-mail communications dated February 15, 2018, February 19,
2018, February 15, 2018 and letter dated February 21,
2018 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,
MCEPL has not paid the surveillance fees for the rating exercise
as agreed to in its Rating Agreement. The rating on
MCEPL's bank facilities will now be denoted as CARE D; ISSUER NOT
COOPERATING.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 9.00 CARE D; Issuer not cooperating;
Facilities Based on best available
Information
Short-term Bank 1.90 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 ratings continue to take into account on-going delays in debt
servicing.
Detailed description of the key rating drivers
At the time of last rating on August 16, 2017 the following were
the rating strengths and weaknesses
Key Rating Weaknesses
Delays in debt servicing: The account of the company is declared
NPA, further one of the creditors of the company has gone to NCTL
for recovery of his dues.
Delhi-based MCEPL was incorporated in 1996 by Ajay Maini and
Pramod Maini. MCEPL is engaged in the business of manufacturing
of aluminum and steel framework, cuplock, scaffolding and wall
framework. The company also provides consultancy services such as
supervision for designing and installation of structure. It has a
manufacturing facility situated at Bawal, Rewari having an
installed capacity of 100 Tonnes Per Day (TPD) for iron
scaffolding and 5 Tonnes Per Day (TPD) for aluminum scaffolding
as on March 31, 2016.
MANGLAM PAPER: Ind-Ra Migrates BB- LT Rating to Non-Cooperating
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Manglam Paper
Private Limited's (MPPL) Long-Term Issuer Rating to the non-
cooperating category. The issuer did not participate in the
rating exercise despite continuous requests and follow-ups by the
agency. Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will
now appear as 'IND BB-(ISSUER NOT COOPERATING)' on the agency's
website. The instrument-wise rating actions are as follows:
-- INR185 mil.Long-term loans due on February 2023 migrated to
Non-Cooperating Category with IND BB-(ISSUER NOT COOPERATING)
rating; and
-- INR110 mil. Fund-based working capital loans migrated to Non-
Cooperating Category with IND BB-(ISSUER NOT COOPERATING)/
IND A4+ (ISSUER NOT COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
February 7, 2017. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Incorporated in 1982, MMPL is engaged in trading of kraft paper.
Among the promoters, Mr. Lalit Kumar Patel has 35 years of
experience in the paper manufacturing industry. The company's
day-to-day operations are carried out by Mr. Lalit Kumar Patel
and his son Mr. Dharma Patel.
MPPL is planning to start a manufacturing unit in Ahmedabad, with
an installed capacity of 110 tonnes per day and capacity
utilization of 90% to manufacture kraft paper in the range of 80-
250 grams per square meter. As of December 2016, around 80% of
the machinery was installed and the manufacturing unit is in the
completion stage.
MPPL imports 50% of its raw material (old corrugated cartoons,
and uncoated paper and paper board) from the US, the UK, Belgium
and other Arabian countries, while the remaining 50% is
domestically sourced from Ahmedabad, Surat and Rajkot.
MITHRA SEEDS: CRISIL Assigns B Rating to INR4.55MM LT Loan
----------------------------------------------------------
CRISIL Ratings has assigned its 'CRISIL B/Stable' rating to the
bank facilities of Mithra Seeds (MS).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term
Bank Loan Facility 4.55 CRISIL B/Stable (Assigned)
Secured Overdraft
Facility 4.45 CRISIL B/Stable (Assigned)
The ratings reflect MS's modest scale of operations in a
fragmented industry, its exposure to intense competition in the
seed trading segment and weak financial risk profile marked by
high gearing and weak debt protection metrics. These rating
weaknesses are partially offset by extensive experience of the
promoter in the seed trading business.
Key Rating Drivers & Detailed Description
Weakness:
* Modest scale of operations: MS reported modest revenue of
INR20.20 Cr in fiscal 2017. Modest scale of operations prevents
the company from achieving economies of scale and limits its
bargaining power with supplier and customers.
* Exposure to intense competition in the seed trading segment: MS
is exposed to high degree of competition from large number of
unorganized players in an intensely competitive seed trading
segment.
* Weak financial risk profile: Net worth was modest at INR1.3 Cr
with gearing 3.41 times as on March 31, 2017. Interest coverage
was modest at 1.27 times in fiscal 2017. TOL/TNW has been high at
around 7.07 times as on March 31, 2017.
Strengths:
* Extensive industry experience of the promoter: MS is promoted
by Mr. Narasimha Rao who has around three decades of experience
in the business. Over the years, promoter has built strong
relationship with customers and suppliers, which will continue to
benefit the firm over the medium term.
Outlook: Stable
CRISIL believes MS will continue to benefit over the medium term
from its promoters' extensive experience. The outlook may be
revised to 'Positive' in case of a substantial improvement in
revenue and profitability margins, and a sustained improvement in
working capital management resulting in improved business and
financial risk profile. Conversely, the outlook may be revised to
'Negative' in case of a steep decline in profitability margins,
or significant deterioration in its capital structure caused most
likely by a large, debt-funded capital expenditure or a stretch
in its working capital cycle.
Set up in 2012 as a sole proprietorship entity, Mithra Seeds (MS)
is involved in the trading of sowing seeds such as groundnuts,
Bengal gram, black gram, Green gram, paddy, Jute and soybean.
Based in Guntur, Andhra Pradesh, the firm is promoted and managed
by Narasimha Rao.
MOENUS TEXTILE: Ind-Ra Lowers Long Term Issuer Rating to 'D'
------------------------------------------------------------
India Ratings and Research (Ind-Ra) has downgraded Moenus Textile
Private Limited's (MTPL) Long-Term Issuer Rating to 'IND D' from
'IND BB-'. The instruments-wise rating actions are as follows:
-- INR121 mil. Fund-based working capital limit (Long-term)
downgraded with IND D rating;
-- INR120 mil.Term loans (Long-term) due on March 31, 2025
downgraded with IND D rating; and
-- INR21 mil. Non-fund-based working capital limit (Short-term)
downgraded with IND D rating.
KEY RATING DRIVERS
The downgrade reflects MTPL's delays in debt servicing during
February 2018 due to a tight liquidity position.
RATING SENSITIVITIES
Positive: Timely servicing of debt for three consecutive months
would be positive for the ratings.
COMPANY PROFILE
Incorporated in 2005, MTPL manufactures cotton yarn at its
facility in Mandideep, Madhya Pradesh, using the rotor spinning
technology. In addition, it has a waste recycling plant in
Mandideep to produce low-value cotton yarn.
MONALISA ENGICONS: Ind-Ra Assigns 'BB-' Rating, Outlook Stable
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Monalisa
Engicons (ME) a Long-Term Issuer Rating of 'IND BB-'. The Outlook
is Stable. The instrument-wise rating actions are as follows:
-- INR15 mil.Fund-based limits assigned with IND BB-/Stable
rating; and
-- INR80 mil.Non-fund-based limits assigned with IND A4+ rating.
KEY RATING DRIVERS
The ratings reflect ME's small scale of operations as it operates
in a highly competitive civil construction industry. In FY17,
revenue was INR317 million (FY16: INR347 million), the decline in
revenue was because of a slowdown in construction work in 3QFY17
due to demonetization. ME booked INR206 million revenue for
9MFY18.
The ratings are constrained by the low revenue visibility and
partnership nature of the concern. As of February 2018, ME had a
work order book position of INR344 million (1.09x of FY17
revenue).
The ratings, however, are supported by strong credit metrics and
partners' experience of more than a decade in construction
business. In FY17 the interest coverage (operating EBITDA/net
interest expense) was 9.63x (FY16: 6.8x) financial leverage
(total adjusted net debt/operating EBITDAR) was 0.95x (2.02x),
with operating margin standing comfortable at 10.0% (8.25%). The
improvement in interest coverage was primarily driven by an
increase in interest income. The enhancement in financial
leverage was driven by the repayment of long-term borrowings and
a rise in EBITDA.
RATING SENSITIVITIES
Negative: Any decline in revenue or EBITDA margin leading to
deterioration in the credit metrics will be negative for the
ratings.
Positive: Substantial improvement in scale of operations, while
maintaining the current credit metrics, will be positive for the
ratings.
COMPANY PROFILE
Incorporated in December 2005, ME is a partnership firm that
undertakes government construction projects such as irrigation,
road work and bridge. Moreover, it has a 20-ton-per-hour crusher
plant.
MURUDESHWAR CERAMICS: CRISIL Ups Rating on INR72.58MM Loan to B+
----------------------------------------------------------------
CRISIL Ratings has upgraded its ratings on the bank facilities of
Murudeshwar Ceramics Limited (MCL) to 'CRISIL B+/Stable/CRISIL
A4' from 'CRISIL D/CRISIL D'. This follows MCL's sharing of
documentation indicating that the particular instance of delay in
debt servicing that led to the earlier rating action was an
operational issue on the lender's part. CRISIL has also
independently confirmed the same with the lender.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 4.95 CRISIL A4 (Upgraded from
'CRISIL D')
Cash Credit 72.58 CRISIL B+/Stable (Upgraded
from 'CRISIL D')
Letter of Credit 37.70 CRISIL A4 (Upgraded from
'CRISIL D')
Term Loan 2.62 CRISIL B+/Stable (Upgraded
from 'CRISIL D')
MCL's business performance is expected to be steady marked by an
annual revenue growth of 5-7% and margins of about 25% over the
medium term supported by uptick in demand from real estate sector
and continued brand presence in parts of Southern India. However,
the company continues to maintain high working capital cycle
resulting in stretch in liquidity management. The gross current
asset days continued to remain high as on 30 September, 2017,
with high inventory holding.
CRISIL's ratings on the bank facilities reflect large working
capital requirements resulting in tight liquidity management and
exposure to intense competition in the ceramics & vitrified tiles
industry. These weaknesses are partially mitigated by established
market position in the industry and revenue diversity.
Key Rating Drivers & Detailed Description
Weakness:
* Large working capital requirement: The company had reported
gross current asset of 457 days as on March 31, 2017, on account
of large receivables and significant inventory holding days.
CRISIL believes MCL's liquidity management will remain
constrained due to its large working capital requirement.
* Exposure to intense competition in the ceramics and vitrified
tiles industry: MCL faces intense competition from other
organised players in the ceramics and vitrified tiles industry,
such as H&R Johnson (India) Ltd, Somany Ceramics Ltd, and Nitco
Tiles Ltd; as well as from unorganised and Chinese manufacturers.
Strengths:
* Established market position in the industry and product
diversity: MCL manufactures glazed ceramic floor tiles, vitrified
porcelain, and natural granite slabs and is one of the leading
players in South India. The company markets its products under
the Naveen brand with sales directly to real estate entities and
through its retail sales channel.
Outlook: Stable
CRISIL believes MCL will benefit from its established market
position in South India and support from its promoters. The
outlook may be revised to 'Positive' if revenue grows while
profitability remains healthy, and if working capital cycle
moderates. The outlook may be revised to 'Negative' if there is a
stretch in working capital cycle, or if debt-funded capital
expenditure weakens the financial risk profile.
Incorporated in 1983, MCL is a publicly listed company. It
manufactures glazed ceramic floor tiles, vitrified porcelain, and
natural granite slabs. The company is promoted by Mr R N Shetty
and his family. It markets its products under the Naveen brand.
In the first nine months of the current fiscal, the company
reported net profit after tax of INR1.38 crore on a net sales of
INR78.5 crore, as compared to INR1.3 crore and INR75.91 crore,
respectively, during the corresponding period of fiscal 2017.
ORIGIN FORMULATIONS: CARE Cuts Rating on INR27.40cr Loan to D
-------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Origin Formulations Private Limited (OFPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 27.40 CARE D; Issuer not cooperating;
Facilities Revised from CARE B; Stable; on
the basis of best available
information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from OFPL to monitor the
ratings vide e-mail communications dated November 24, 2017,
December 29, 2017, January 3, 2018, January 8, 2018, January 12,
2018, February 8, 2018, February 16, 2018, February 19, 2018, and
February 22, 2018 along with numerous phone calls. However,
despite CARE's repeated requests, the company has not provided
requisite information for reviewing the outstanding ratings. In
line with the extant SEBI guidelines CARE's rating on OFPL's bank
facilities will now be denoted as CARE D; 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 ratings.
The revision in rating assigned to the bank facilities of OFPL
takes into account ongoing delays in debt servicing of its debt
obligations as a result of its stressed liquidity arising from
weak profitability and elongated working capital cycle.
Detailed description of the key rating drivers
Key Rating Weaknesses
Ongoing Delay in debt servicing: Debt servicing of OFPL is
irregular as reflected by delays in servicing of its debt
obligation. Liquidity of the company is stressed due to continue
weak profitability and substantial elongation in working capital
cycle.
Weak financial risk profile marked by negative networth and high
debt level: The financial risk profile of OFPL is weak marked by
continued weak profitability and cash accruals due to high
interest cost. Further, due to past accumulated losses, the
company had negative networth as on March 31, 2017. Furthermore,
the company has very high reliance on outside borrowings leading
to full utilization of working capital limits with instances of
frequent over drawl.
Key Ratings Strength
Experienced promoters: The promoters of OFPL have vast industrial
experience. Also, Promoters have periodically infused unsecured
loans for the uninterrupted operations of the company.
Incorporated in 2010, OFPL is engaged in trading of formulation
and in FY14 it had started manufacturing of pharmaceutical
formulation in various dosage forms i.e. Tablets, Capsules,
Ointments, Injections, and Syrups at its facility at Kotdwar,
Uttrakhand. For exports, the company has received the
certification from WHO-GMP for Betalactum section of
manufacturing.
PARAMASHIVA MOTORS: CRISIL Reaffirms B+ Rating on INR10MM Loan
--------------------------------------------------------------
CRISIL Ratings has reaffirmed its 'CRISIL B+/Stable' rating on
the long term bank facilities of Paramashiva Motors Private
Limited (PMPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 1 CRISIL B+/Stable (Reaffirmed)
Inventory Funding
Facility 10 CRISIL B+/Stable (Reaffirmed)
Long Term Loan 3 CRISIL B+/Stable (Reaffirmed)
Long Term Bank
Facility 2 CRISIL B+/Stable (Reaffirmed)
The rating continues to reflect its below-average financial risk
profile marked by high Total outside liabilities to adjusted net
worth (TOL/ANW) ratio and modest interest coverage ratio, and
exposure to intense competition in the automobile dealership
industry. The rating also reflects its limited bargaining power
with its key principal Maruti Suzuki India Limited (MSIL; rated
'CRISIL AAA/Stable/CRISIL A1+'). These rating weaknesses are
partially offset by the benefits derived from the extensive
experience of the promoters in automobile dealership business and
its established relationship with its key principal.
Key Rating Drivers & Detailed Description
Weakness:
* Below average financial risk profile: PMPL has below average
financial risk profile marked by its estimated net worth of
INR0.99 crores and estimated high total outside liabilities to
tangible net worth ratio (TOL/TNW) of around 9.6 times as on
March 31, 2017. The company has estimated modest interest
coverage ratio of 1.16 times as on March, 2017.
* Exposure to intense competition in automobile dealership
industry: The automotive sector is intensely competitive with a
large number of players in the mini, compact, mid-size,
executive, premium, and luxury passenger car segments.
* Exposure to risks relating to low bargaining power with
principal, MSIL: PMPL is exposed to risks relating to low
bargaining power with principal, MSIL. MSIL faces intense
competition from other four-wheeler manufacturers. PMPL also
faces competition from other MSIL dealers in Andhra Pradesh.
Stiff competition has compelled automobile companies to cut
costs, including reducing their commissions to dealers. All this
demands continual expenditure, which is significant given the
scale of operations of dealers such as PMPL
Strengths
* Extensive industry experience of the promoters and its
established relationship with its key principal: PMPL benefits
from extensive industry experience of the promoters in the
automobile dealership business and its established relationship
with MSIL through its associate entities dealing with MSIL. The
promoters of PMPL have an extensive experience of over two
decades in the automotive dealership industry and have aided PMPL
to establish a comfortable presence in Vijayawada, Andhra Pradesh
automobile dealership market.
Outlook: Stable
CRISIL believes PMPL will continue to benefit over the medium
term from its promoters' extensive experience. The outlook may be
revised to 'Positive' in case of substantial and sustainable
increase in the company's revenues and profitability, coupled
with a better than expected improvement in its capital structure
on the back of sizeable equity infusion by the promoters.
Conversely, the outlook may be revised to 'Negative' in case of a
steep decline in the company's profitability margins, or
significant deterioration in its capital structure caused most
likely by a stretch in its working capital cycle.
Established in April, 2016 as a private limited company, PMPL is
an authorized dealer for MSIL for Nexa range. Based in Vijayawada
(Andhra Pradesh), the company is promoted and managed by Mr.
Cheruvu Sreenivas.
REFRATHERM INTERNATIONAL: CRISIL Reaffirms B+ Cash Credit Rating
----------------------------------------------------------------
CRISIL Ratings has reaffirmed its rating on the long-term bank
facilities of Refratherm International Private Limited (RIPL) at
'CRISIL B+/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 10.96 CRISIL B+/Stable (Reaffirmed)
Term Loan 14.04 CRISIL B+/Stable (Reaffirmed)
The rating reflects the company's small scale of operations, its
working capital intensive nature of operations and weak financial
risk profile marked by a small net worth, a high gearing and weak
debt protection metrics with liquidity insufficient to meet term
debt repayment obligation and inventory risk due to volatility in
international crude oil prices. These rating weaknesses are
partially offset by the benefits that RIPL derives from its
promoters' extensive experience in the Calcined Pet Coke
manufacturing industry and its established relationships with its
customers and suppliers.
Key Rating Drivers & Detailed Description
Weakness
* Elongated working capital: RIPL's gross current assets
increased to 228 days as on March 31, 2017, from 155 days as on
March 31, 2016, because of rise in inventory days to 244 days in
March 2017 from 103 days in March 2016. There is inventory risk
due to volatility in international crude oil prices.
* Stretched liquidity and weak debt protection metrics: Operating
margin have fluctuated between 3-5% over the last 5 fiscals
through March 2017. This has led to weak debt protection metrics,
with high total out liabilities to adjusted networth (TOL/ANW)
ratio of 2.82 times and moderate interest coverage at 1.45 times
for fiscal 2017. The company's net cash accruals was insufficient
to meet term debt repayment obligation for fiscal 2017. Need
based fund support from the promoters remain a key rating
sensitivity.
Strengths
* Established customer relationships: Company derives significant
support from promoters who have been in the industry for more
than a decade which has enabled the company to diversify its
product portfolio and establish a long standing relationship with
its customers.
Outlook: Stable
CRISIL believes that RIPL will continue to benefit from its
promoters extensive experience in Calcined Pet Coke (CPC)
manufacturing industry. The outlook may be revised to 'Positive'
in case RIPL reports higher than expected accruals or in case of
improvement in working capital management or infusion of
substantial capital by promoters leading to improvement in
liquidity as well as financial risk profile. The outlook may be
revised to negative if there is significant stretch in working
capital, lower than expected accruals or debt funded capex
leading to deterioration in overall financial risk profile
specially liquidity.
RIPL was incorporated in February 2007 and is engaged in
manufacturing of high quality Calcined Pet Coke (CPC) in
different specifications. The day-to-day operations of the
company are looked after by Mr. Krishnendu Shaw and his wife Mrs.
Meeta Shaw, who are the promoter-director of the company.
SIMOCO TELECOM: CARE Removes D Ratings From Not Cooperating Cat.
----------------------------------------------------------------
In the absence of minimum information required for the purpose of
rating, CARE Ratings was unable to express an opinion on the
ratings of Simoco Telecommunications (South Asia) Limited (STL)
and in line with the extant SEBI guidelines, CARE revised the
ratings of bank facilities of the company to 'CARE D; ISSUER NOT
COOPERATING'. However, the company has now submitted the
requisite information to CARE. CARE has carried out a full review
of the ratings and the ratings stand at 'CARE D '.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 18.00 CARE D Revised from CARE D;
Facilities ISSUER NOT COOPERATING
Detailed Rationale & Key Rating Drivers
The rating assigned to the bank facilities of Simoco
Telecommunications (South Asia) Limited (STL) factors in the on-
going delays in debt servicing on account of the stressed
liquidity condition leading to continuous overdrawal in the cash
credit account.
Going forward, the ability of the company to improve its
liquidity position and service its debt on a timely manner would
be the key rating sensitivities.
Detailed description of the key rating drivers
Key Rating Weaknesses
Stressed liquidity condition leading to continuous over drawl in
the cash credit account: Low cash accruals on account of low
profit levels during FY17 on the back of lack of operational
efficiency in the manufacturing process and high working capital
cycle on the back of high inventory period and high average
collection period lead to continuous high working capital
requirement (avg. utilisation stood at more than 100% during
February 2017-January 2018) which has resulted in stressed
liquidity for the company leading to continuous over drawl in the
cash credit account for more than 30 days.
Simoco Telecommunication (South Asia) Limited (STL) incorporated
in the year April 1979, was initially engaged in manufacturing of
wireless equipment, mobile phones, computer parts and
accessories, software solutions, surveillance system and solar
products. The company was taken over by Mr. Sanjoy Kumar Ghosh,
Managing Director, from Simoco International Limited, U.K., in
the year 2001. STL is currently engaged in manufacturing of LED
products, solar lantern and two way radio communication equipment
and is currently running with an installed capacity of 1,28,300
numbers per annum.
Mr. Sanjoy Kumar Ghosh, aged about 54 years, having around three
decades of experience in electric equipment industry, looks after
the overall management of the company. He is also assisted by
other director and a team of experienced personnel.
SPARSH HOSPITALS: CARE Lowers Rating on INR7.97cr LT Loan to D
--------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Sparsh Hospitals Private Limited (SHPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 7.97 CARE D Revised from CARE BB;
Facilities Stable
Detailed Rationale and key rating drivers
The revision in the rating assigned to the bank facilities of
SHPL takes into account the on-going delay in its debt servicing.
Going forward, the company's ability to serve its debt obligation
on a regular basis will be the key rating sensitivities.
Detailed description of the key rating drivers
Key Rating Weaknesses
On-going delay in debt servicing: There is on-going delay in
servicing of term loan installments and interest due to mismatch
of cash flow. Furthermore, there were various instances of
overdrawing in overdraft facility during last 12 months ended in
January 2018.
SHCPL was incorporated in May 2007 by Dr. Priyabrata Dhir based
out of Bhubaneswar, Odisha. Realising the demand for a multi
super specialty hospital in Bhubaneswar (Odisha), Dr. Priyabrata
Dhir started with a 40 bed hospital in May, 2007. Subsequently in
2014, the company expanded the capacity to 100 beds in 2014. The
hospital is equipped with state of the art technology and well
qualified & experienced doctors/surgeons. The hospital also has
tie-ups with various government organisations and corporates who
have a presence in and around Bhubaneswar in addition to TPAs
with most of the private insurance companies. The facilities of
the company are ISO 9001:2008 certified.
SRI KARUNAMAYE: CRISIL Assigns B- Rating to INR5MM LT Loan
----------------------------------------------------------
CRISIL Ratings has assigned its 'CRISIL B-/Stable' ratings to the
long term bank facilities of Sri Karunamaye Beverages Private
Limited.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Long Term Loan 2 CRISIL B-/Stable (Assigned)
Proposed Long Term
Bank Loan Facility 5 CRISIL B-/Stable (Assigned)
The ratings reflect a modest scale of operations, exposure to
project funding risk, and a below-average financial risk profile.
There rating weaknesses are partially offset by the extensive
experience of the promoter in the plastic components industry.
Key Rating Drivers & Detailed Description
Weaknesses
* Exposure to project funding risk: The demand risk for packaged
drinks and packaging bottles is low but the external funding has
not yet been completely tied up.
* Below-average financial risk profile: The networth is modest
and liquidity stretched. Cash accrual is expected to be
inadequate to meet repayment obligations over medium term. The
shortfall is expected to be met through promoter funding.
Strengths
* Extensive industry experience of the promoter: The promoter has
been engaged in plastic components manufacture for over five
years through other businesses and has established a strong
relationship with customers.
Outlook: Stable
CRISIL believes SKBPL will continue to benefit from the extensive
industry experience of the promoter. The outlook may be revised
to 'Positive' in case of improvement in the scale of operations
and profitability, leading to a better financial risk profile.
The outlook may be revised to 'Negative' in case of lower cash
accrual or a stretched working capital, leading to deterioration
in the financial risk profile.
SKBPL was set up in 2013 by Mr Manas Chakraborty. The company
manufactures polyethylene terephthalate (PET) bottles and
polypropylene (PP) caps. It started commercial operations in July
2017. The company is currently setting up a facility for
manufacturing packaged drinking water, soda, and soft drinks
under own brands.
SRI SPM WEAVING: CRISIL Moves B Rating to Not Cooperating Cat.
--------------------------------------------------------------
CRISIL Ratings has been consistently following up with Sri SPM
Weaving Mills (SSWM) for obtaining information through letters
and emails dated January 31, 2018, February 12, 2018 and February
16, 2018 among others, apart from telephonic communication.
However, the issuer has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 2 CRISIL B/Stable (Issuer Not
Cooperating; Rating Migrated)
Long Term Loan 10 CRISIL B/Stable (Issuer Not
Cooperating; Rating Migrated)
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of Sri SPM Weaving Mills which
restricts CRISIL's ability to take a forward looking view on the
entity's credit quality. CRISIL believes information available on
Sri SPM Weaving 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 Sri SPM Weaving Mills to 'CRISIL B/Stable Issuer
not cooperating'.
Established in 2015, SSWM is setting up a weaving mill with 36
looms in Erode, Tamil Nadu. The firm is promoted by Mr
Palanisamy, and the commercial operations are expected to
commence in January 2017.
STONE INDIA: CARE Moves D Rating to Not Cooperating Category
------------------------------------------------------------
CARE Ratings has been seeking information from Stone India
Limited (SIL) to monitor the rating(s) vide e-mail communications
dated January 30, 2018, January 31, 2018, February 6, 2018,
February 9, 2018 and numerous phone calls. However,
despite our 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, SIL has not paid the surveillance fees for the
rating exercise as agreed to in its Rating Agreement. The rating
on SIL's bank facilities will now be denoted as CARE D/CARE D;
ISSUER NOT COOPERATING.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 34.48 CARE D; Issuer not cooperating;
Facilities Based on best available
Information
Short term Bank 19.30 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 ratings take into account the
instances of the delays in servicing of its debt obligations.
Detailed description of the key rating drivers
At the time of last rating on July 14, 2017 the following were
the rating strengths and weaknesses (updated for the
information available from banker's feedback):
Key Rating Weaknesses
Delays in debt servicing: The liquidity position of the company
has been severely impacted leading to delays in servicing of its
debt obligations, instances of LC devolvement & BG invocation.
Stone India Limited (SIL), currently belonging to the Kolkata-
based Duncan Goenka group, was incorporated in 1931. Before
coming under the aegis of the Duncan Goenka group in early 90s,
SIL was a part of Stone-Platt, a UK based group. SIL has been
engaged in the manufacturing of electrical and mechanical
equipment like brake systems, alternators, pantographs, slack
adjusters, etc. for rail road industry, since eight decades.
SUJALA PIPES: CARE Lowers Rating on INR31.80cr Loan to D
--------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Sujala Pipes Private Limited (SPPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 31.80 CARE D; Issuer not cooperating;
Facilities Revised from CARE B+, on the
basis of best available
information
Short-term Bank 15.07 CARE D; Issuer not cooperating;
Facilities Revised from CARE A4, on the
basis of best available
information
Detailed Rationale & Key Rating Drivers:
CARE has been seeking for information from SPPL to monitor the
ratings vide-mail communications dated from July, 2017 to
February, 2018 (July 24, 2017, September 11, 2017, December 6,
2017, January 2, 2018, February 1, 2018 & February 6, 2018) 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. The rating on Sujala Pipes
Private Limited bank facilities will now be denoted as CARE D;
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 revision in the rating assigned to the bank facilities of
SPPL factor in stretched liquidity profile resulting in delays in
debt servicing.
Detailed description of the key rating drivers:
Key rating weakness:
Delays in debt servicing: The company has been facing liquidity
constraint and there are delays in debt servicing, as confirmed
by the lenders.
Working capital intensive nature of business: The Company
operates in a working capital intensive industry wherein the
requirement of working capital is high due to supplier
concentration and intense competition leading to low bargaining
power. PVC resin is the main raw material used for manufacturing
of PVC pipes and the company procures it through Del Credere
Agents like Ayushman Merchant Pvt. Ltd. as it is manufactured by
very few players in India.
Key Rating Strengths:
Experienced Promoters: SPPL belongs to Nandi group of Kurnool
(A.P.), a South India based industrial house, promoted by Mr.
S.P.Y Reddy. The promoter has vast experience in managing
business for over three decades. Nandi group has diversified
business interest and apart from manufacturing of pipes (carried
out through SPPL and several other companies); it has presence in
the cement, steel, construction, dairy and distillery business,
carried out through several group companies.
Sujala Pipes Private Limited (SPPL), belonging to Nandi group of
Kurnool, Andhra Pradesh (A.P.), was incorporated in 1982 as a
partnership concern and was reconstituted as a Private Limited
Company in February, 1988. SPPL is engaged in manufacturing of
Polyvinyl Chloride (PVC) pipes & fittings used in irrigation
projects, water management, sewerage, & drainage industry, etc.
Nandi group, promoted by Mr. S.P.Y Reddy, is a South India based
industrial house having diversified business interest. Apart from
manufacturing of PVC pipes, the group has presence in cement,
steel, dairy and construction segment.
SUN ARK: CRISIL Lowers Rating on INR9MM Loan to D
-------------------------------------------------
CRISIL Ratings has been consistently following up with Sun Ark
Aluminium Industries Private Limited (SAIPL) for obtaining
information through letters and emails dated July 14, 2017, and
August 14, 2017, among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 3 CRISIL D (Issuer Not
Cooperating; Downgraded
from 'CRISIL B+/Stable
Issuer Not Cooperating')
Letter of Credit 9 CRISIL D (Issuer Not
Cooperating; Downgraded
from 'CRISIL A4 Issuer
Not Cooperating')
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
CRISIL has downgraded its ratings on the bank loan facilities of
SAIPL to 'CRISIL D/CRISIL D/Issuer Not Cooperating' due to delay
in servicing debt.
The downgrade reflects continuous overdrawal of its working
capital limit for more than 30 days due to weak liquidity.
Established in 2007, SAIPL manufactures aluminium powder, which
find its application in manufacturing refractory moulds and
explosives. The operations are currently being managed by Mr.
Sivakumar.
SUPREME INFRA: Ind-Ra Migrates 'D' LT Rating to Non-Cooperating
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Supreme
Infrastructure India Ltd.'s (SIIL) Long-Term Issuer Rating to the
non-cooperating category. The issuer did not participate in the
surveillance exercise despite continuous requests and follow-ups
by the agency. Therefore, investors and other users are advised
to take appropriate caution while using the rating. The rating
will now appear as 'IND D(ISSUER NOT COOPERATING)'on the agency's
website. The instrument-wise rating actions are as follows:
-- INR4,689 bil.Term loans (long-term)migrated to Non-
Cooperating Category with IND D(ISSUER NOT COOPERATING)
rating;
-- INR6,250 bil.Cash credit facilities (long-/short-term)
migrated to Non-Cooperating Category with IND D(ISSUER NOT
COOPERATING) rating; and
-- INR8,000 bil. Non-fund-based working capital facilities
(long-/short-term) migrated to Non-Cooperating Category with
IND D (ISSUER NOT COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
December 20, 2016. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Incorporated in 1983, SIIL is engaged in the construction of
roads, building, bridges and flyovers, railway platforms,
sewerage systems and pipelines.
UNIVERSAL ASSOCIATES: CARE Moves D Rating to Not Cooperating
------------------------------------------------------------
CARE Ratings has been seeking information from Universal
Associates to monitor the ratings vide e-mail communications/
letters dated July 5, 2017, July 21, 2017, August 1, 2017,
August 16, 2017, August 30, 2017, October 3, 2017, October 17,
2017, December 11, 2017, January 2, 2018 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
Universal Associates' bank facilities and instruments will now be
denoted as CARE D; ISSUER NOT COOPERATING.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank
Facilities 13.00 CARE D; Issuer not cooperating
Long term/Short
term Bank
Facilities 8.50 CARE D; 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 ratings.
Detailed description of the key rating drivers
At the time of last rating on December 23, 2016 the following was
the rating rationale.
Detailed Rationale & Key Rating Drivers
The rating assigned to the bank facilities of Universal
Associates (Universal) takes into account on-going overdrawal in
cash credit limits due to acute liquidity stress faced by the
firm.
Bhavnagar (Gujarat) based Universal Associates (Universal) is
promoted by Mr Rajnikant Patel along with his family members as
partnership firm in 1987. The firm is engaged in civil
construction work having major focus in road construction
activities. Universal has a status of 'AA' class (highest in the
scale of AA to E) contractor with the Government of Gujarat (GoG)
indicating its eligibility to bid for contracts of any amount.
The firm is managed by Mr Rajnikant Patel and his son Mr. Bhavik
Kalthia.
====================
N E W Z E A L A N D
====================
CBL INSURANCE: 'Not in a Position' to Pay Homeowners Claims
-----------------------------------------------------------
Rob Stock at Stuff.co.nz reports that the interim liquidator of
CBL Insurance has warned policyholders that it's not in a
position to pay any claims.
Stuff says the insurer was put into interim liquidation on
Feb. 23, creating uncertainty for the owners of thousands of
recently built homes covered for shoddy building work under 10-
year guarantees backed by CBL Insurance. These include many
issued on homes built by the New Zealand Certified Builders trade
association.
Stuff relates that interim liquidator Kare Johnstone from
McGrathNicol warned: "CBL Insurance is not currently in a
position to make any claim payments to any beneficiaries with a
claim made under their insurance policy or bond. Insureds and
beneficiaries should take appropriate measures to minimise their
losses."
According to Stuff, Ms. Johnstone said any policyholder making a
claim will rank as an unsecured creditor claim should CBL
Insurance not be able to pay its debts in full and enter
liquidation.
She urged people relying on CBL Insurance policies to obtain
advice from their insurance brokers to determine whether they
need to purchase new insurance cover, Stuff relays.
"The Interim Liquidators are currently investigating the business
and financial affairs of the company with the purpose of ensuring
the best outcome for policyholders and creditors," the report
quotes Ms. Johnstone as saying.
As reported in the Troubled Company Reporter-Asia Pacific on
Feb. 26, 2018, The New Zealand Herald said the High Court has
ordered CBL Insurance be placed into interim liquidation on an
application by the Reserve Bank as the insurer's prudential
supervisor.
In the High Court in Auckland on Feb. 23, Justice Patricia
Courtney ordered the appointment of McGrathNicol's Kare Johnstone
and Andrew Grenfell as interim liquidators of CBL Insurance, the
Herald discloses. The application was made without notice and
determined on Feb. 23, the judgment said.
CBL Insurance Limited provides building and construction related
credit and financial surety insurance, bonding, and reinsurance
products. CBL Insurance is a subsidiary of NZX-listed CBL
Corporation.
=================
S I N G A P O R E
=================
CLEARBRIDGE HEALTH: FY2017 Net Loss Widens to SGD7.47MM
-------------------------------------------------------
Navin Sregantan at The Strait Times reports that Clearbridge
Health Limited's fiscal 2017 net loss widened almost four times
to SGD7.47 million for fiscal 2017 from SGD1.95 million the year
before, mainly due to a fair value loss arising from a change in
the valuation of an associated company and non-recurring
expenses.
Loss per share worsened to 2.33 Singapore cents, from a loss per
share of 0.94 Singapore cent in the previous year.
However, full-year revenue for Clearbridge -- which listed on the
Singapore Exchange's Catalist board in December 2017 following an
initial public offering (IPO) -- more than doubled to SGD288,000
from SGD123,000 for fiscal 2016, the report says.
This was driven by contribution from its medical clinics/centres
as well as the laboratory testing services businesses of its two
newly acquired subsidiaries - Clearbridge Medical Group and its
subsidiaries, and SAM Laboratory, it said.
Net asset value per share stood at 12.67 Singapore cents, based
on the group's post-IPO share capital of 481 million shares, the
Strait Times discloses.
With the proceeds from its recent IPO and the acquisition of
Clearbridge Medical and SAM Lab, Clearbridge is on a strong
financial footing with cash and cash equivalents of SGD27.74
million as at Dec 31, the medical services provider said.
"FY2017 was a very busy year for the group given the
restructuring and preparatory work leading to our IPO in December
2017. Going forward, I expect to see cost savings in rental when
we move SAM Lab from its current location in Lucky Plaza to Mapex
by the second quarter of 2018," the report quotes Jeremy Yee,
executive director and chief executive officer of Clearbridge, as
saying. "We are focused on making the benefits of precision
medicine available and affordable for more people throughout the
region."
Clearbridge Health Limited provides health care services. The
Company offers general medical, consumer wellness, laboratory,
and medical technology solutions. Clearbridge Health develops
precision medicines for disease treatment. Clearbridge Health
serves customers in Asia and North America.
====================
S O U T H K O R E A
====================
KUMHO TIRE: Urges Union to Engage in Talks
------------------------------------------
Yonhap News Agency reports that the chief of Kumho Tire Co. on
March 13 urged its unyielding union to come to the negotiating
table for earnest dialogue so all sides can find a way to keep
the company afloat.
The appeal was made as the March 31 dateline set by creditors
that have demanded a viable self-help plan is fast approaching,
the report says.
Yonhap relates that Kumho Tire's main creditor Korea Development
Bank (KDB) and the company's management have said the only
possible option at this stage is to sell the financially troubled
tiremaker to Qingdao Doublestar Co. as the Chinese company has a
concrete investment plan to turn Kumho Tire around.
According to Yonhap, creditors asked the union to decide on
whether to accept Doublestar's investment proposals by the end of
this month. If the union refuses, the tiremaker will have to be
placed under a court receivership.
But two union leaders representing some 4,000 workers have been
holding a demonstration atop a utility pole near Kumho Tire's
plant in Gwangju, 330 kilometers south of Seoul, to protest
against creditors' plan to sell the tiremaker to Qingdao
Doublestar, Yonhap says.
During his visit to the utility pole, Kumho Tire CEO Kim Jong-ho
told the union representatives that the company and the state-run
KDB met Doublestar officials in China last week and double-
checked what the Chinese tiremaker is seeking through its control
of Kumho and what measures it will implement for the debt-ridden
company, the company said in a statement, Yonhap relays.
"The company and the KDB asked for a guarantee on Kumho Tire's
independent management without an intervention of Doublestar and
job security for existing workers from the Chinese company. And
Doublestar responded positively to the demands," Mr. Kim
explained to the union leaders, notes the report.
In its proposal, Doublestar said it will invest KRW646.3 billion
(US$599 million) in Kumho Tire's new shares, which would allow
the Chinese tiremaker to become the biggest shareholder with a
stake of 45 percent, according to Yonhap.
If the rights issue is successful, KDB-led creditors will
collectively own a 23.1 percent stake in Kumho Tire, Yonhap says.
Yonhap adds that on top of the capital injection into Kumho
Tire's new shares, Doublestar said it will invest KRW200 billion
in the tiremaker's production facilities while guaranteeing job
security for existing union workers for three years.
Under the potential deal, which requires the government's
approval, Doublestar and creditors are prohibited from selling
their stakes in Kumho Tire for three and five years,
respectively, after the management transfer, the report states.
Kumho Tire Co. Ltd. manufactures tire. The company's offerings
include tires for sports utility vehicles, passenger cars,
various sizes of trucks and buses and racing cars. In addition,
the company provides batteries for automobiles. The company is
part of the Kumho Asiana Group.
*********
Tuesday's edition of the TCR-AP delivers a list of indicative
prices for bond issues that reportedly trade well below par.
Prices are obtained by TCR-AP editors from a variety of outside
sources during the prior week we think are reliable. Those
sources may not, however, be complete or accurate. The Tuesday
Bond Pricing table is compiled on the Friday prior to
publication. Prices reported are not intended to reflect actual
trades. Prices for actual trades are probably different. Our
objective is to share information, not make markets in publicly
traded securities. Nothing in the TCR-AP constitutes an offer
or solicitation to buy or sell any security of any kind. It is
likely that some entity affiliated with a TCR-AP editor holds
some position in the issuers' public debt and equity securities
about which we report.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR-AP. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com
Friday's edition of the TCR-AP features a list of companies with
insolvent balance sheets obtained by our editors based on the
latest balance sheets publicly available a day prior to
publication. At first glance, this list may look like the
definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical
cost net of depreciation may understate the true value of a
firm's assets. A company may establish reserves on its balance
sheet for liabilities that may never materialize. The prices at
which equity securities trade in public market are determined by
more than a balance sheet solvency test.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Asia Pacific is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez,
Julie Anne L. Toledo, Ivy B. Magdadaro and Peter A. Chapman,
Editors.
Copyright 2018. All rights reserved. ISSN: 1520-9482.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding,
electronic re-mailing and photocopying) is strictly prohibited
without prior written permission of the publishers.
Information contained herein is obtained from sources believed
to be reliable, but is not guaranteed.
TCR-AP subscription rate is US$775 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance
thereof are US$25 each. For subscription information, contact
Peter Chapman at 215-945-7000.
*** End of Transmission ***