/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/180613.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, June 13, 2018, Vol. 21, No. 116 Headlines A U S T R A L I A AIRBORNE AVIATION: First Creditors' Meeting Set for June 21 ATLAS IRON: S&P Lowers ICR to 'CCC', On CreditWatch Developing KAMB INVESTMENTS: First Creditors' Meeting Set for June 20 KAZMOT PTY: First Creditors' Meeting Slated for June 21 S.G.M. HOTELS: Second Creditors' Meeting Set for June 20 STIRLING WEALTH: Second Creditors' Meeting Set for June 20 TOLSTON PTY: Second Creditors' Meeting Slated for June 20 C H I N A XIAOMI CORP: Says to Continue Bleeding Cash * CHINA: Overseas Investors Step Up Visits to Quell Default Fears I N D I A AKHANDALAMANI ELECTRICAL: Ind-Ra Assigns 'BB' Issuer Rating B. D. AGRO: CRISIL Reaffirms B- Rating on INR3MM Cash Loan BALLIUM EXPORTS: CRISIL Migrates B Rating to Not Cooperating CHHAPRA MUNICIPAL: Ind-Ra Assigns 'BB-' LT Rating, Outlook Stable DEV PRAYAG: CRISIL Migrates B Rating to Not Cooperating Category EDIMANNICKAL JEWELLERY: CRISIL Moves B+ Rating to Not Cooperating FRANSKO AGRO: CRISIL Migrates B+ Rating to Issuer Not Cooperating HAIL TEA: CRISIL Migrates Ratings to B Issuer Not Cooperating HANKHUL PACKWELL: CRISIL Reaffirms B+ Rating on INR7.7MM Loan HYQUIP SYSTEMS: CRISIL Assigns C Rating to INR8.66MM Cash Loan ISWARYA ENTERPRISES: CRISIL Migrates B Rating to Not Cooperating JMP MANUFACTURING: CRISIL Assigns B Rating to INR4.75MM Loan LUNI POWER: CRISIL Migrates D Rating to Not Cooperating Category MAKSON NUTRITION: Ind-Ra Affirms BB Issuer Rating, Outlook Stable MALHOTRA CONSTRUCTIONS: CRISIL Moves B+ Rating to Not Cooperating NEW AMRUTHA: CRISIL Migrates B Rating to Not Cooperating Category NUTAVE STONE: CRISIL Moves B Rating to Not Cooperating Category PV KNIT: CRISIL Migrates B+ Rating to Not Cooperating Category R. N. K. EDUCATIONAL: CRISIL Assigns B+ Rating to INR6.25MM Loan RADHAKRISHNA OIL: CRISIL Migrates B+ Rating to Not Cooperating RUBY MICA: CRISIL Reaffirms B+ Rating on INR2.5MM Cash Loan RUCHI SOYA: Patanjali, Adani Submit Revised Bids SATYA SRINIVASA: CRISIL Migrates B Rating to Not Cooperating SHALAK EATABLE: CRISIL Migrates Rating to B- Not Cooperating SHRI RAMSWAROOP: Ind-Ra Maintains D LT Rating in Non-Cooperating SHRI SENTHUR: Ind-Ra Moves BB- Issuer Rating to Non-Cooperating SOCIAL EDUCATIONAL: CRISIL Cuts Rating on INR15.5MM Loan to B+ SOMESWARA ENTERPRISES: CRISIL Moves B Rating to Not Cooperating SOUNDARYA DECORATORS: CRISIL Lowers Rating on INR5MM Loan to B- SRI LAXMI: CRISIL Lowers Rating on INR35MM Loan to D SRI VENKATA: CRISIL Migrates B Rating to Not Cooperating Category SRI VENKATESWARA: CRISIL Migrates B Rating to Not Cooperating SUYOG DEVELOPMENT: CRISIL Migrates B+ Rating to Not Cooperating SUPER OVERSEAS: Ind-Ra Migrates BB+ LT Rating to Non-Cooperating TAMILNADU STATE: CRISIL Migrates B- Rating to Not Cooperating V. M. STAR: CRISIL Migrates D Rating to Not Cooperating Category VNC INFRAPROJECTS: CRISIL Migrates Ratings to B Stable J A P A N SHARP CORP: S&P Hikes Corp Credit Rating to BB-; Outlook Positive M A L A Y S I A SUMATEC RESOURCES: Confident of Business Outlook Despite PN17 N E W Z E A L A N D CBL CORP: NZ Shareholders Association Wary of Restructure S I N G A P O R E CHINA FISHERY: Wants to Sell HK Golf Club Membership HYFLUX LTD: Receives Notice of Default From Perps Trustee S R I L A N K A SRI LANKA TELECOM: S&P Affirms 'B+' Long-Term ICR, Outlook Stable - - - - - ================= A U S T R A L I A ================= AIRBORNE AVIATION: First Creditors' Meeting Set for June 21 ----------------------------------------------------------- A first meeting of the creditors in the proceedings of Airborne Aviation Pty Ltd will be held at the offices of Amos Insolvency, 25/ 185 Airds Road, in Leumeah, NSW, on June 21, 2018, at 11:00 a.m. Peter Andrew Amos of Amos Insolvency was appointed as administrator of Airborne Aviation on June 8, 2018. ATLAS IRON: S&P Lowers ICR to 'CCC', On CreditWatch Developing -------------------------------------------------------------- S&P Global Ratings said it has lowered its long-term issuer credit rating on Australia-based iron ore miner Atlas Iron Ltd. to 'CCC' from 'B-'. At the same time, S&P lowered its issue-level rating on Atlas Iron's Term Loan B to 'CCC' and retained the recovery rating of '3'. S&P said, "We also placed the ratings on CreditWatch with developing implications. We had previously placed the ratings on CreditWatch with positive implications. "The downgrade reflects our view that Atlas could face a liquidity crisis or breach its Term Loan B covenant trigger within the next 12 months, in the absence of other cash generative options the company is investigating. Atlas Iron's underlying business and creditworthiness continues to weaken due to higher iron ore grade discounts and higher all-in-cash costs. As a result, Atlas Iron's cash flows from operations are negative, which is likely to deteriorate the company's cash position. We believe Atlas Iron would face a near-term liquidity event in the next 12 months without positive developments. Atlas Iron's Term Loan B has a minimum cash balance per month covenant, which we view as increasingly likely to be triggered, should the company continue to operate with negative cash flows from operations. "S&P Global Ratings views that the proposed merger with Mineral Resources Ltd. (unrated), if successful, would be positive to Atlas Iron's credit quality. However, Fortescue Metals Group's 19.9% material ownership stake presents a significant challenge to Mineral Resources' merger bid, which requires at least 75% shareholder approval. In the absence of a transaction, Atlas Iron is likely to default within the next 12 months without extraordinary support, in our view. "The 'CCC' rating reflects our view that Atlas Iron is vulnerable and dependent on favorable business, financial, and economic conditions to meet its financial commitments. The commitments appear to be unsustainable and the company might face a liquidity crisis or covenant breach in the next 12 months, in our opinion. "The CreditWatch developing means that we will likely raise or lower our ratings on the company in the coming months. We could be lower the rating if the continued cash-burn increases the likelihood of payment default or covenant breach. Conversely, we could raise the rating if Atlas Iron were to be acquired by a stronger-rated and supportive parent." KAMB INVESTMENTS: First Creditors' Meeting Set for June 20 ---------------------------------------------------------- A first meeting of the creditors in the proceedings of Kamb Investments Pty Ltd, trading as Kambo's Warehouse & Liebe + Haus, will be held at Duxton Hotel, 1 St Georges Terrace, in Perth, WA, on June 20, 2018, at 11:00 a.m. Cameron Shaw and Richard Albarran of Hall Chadwick were appointed as administrators of Kamb Investments on June 8, 2018. KAZMOT PTY: First Creditors' Meeting Slated for June 21 ------------------------------------------------------- A first meeting of the creditors in the proceedings of Kazmot Pty Limited, trading as 'Raine & Horne Belmont', will be held at the offices of PKF, 755 Hunter Street, in Newcastle, West NSW, on June 21, 2018, at 11:00 a.m. Simon Thorn of PKF was appointed as administrator of Kazmot Pty on June 8, 2018. S.G.M. HOTELS: Second Creditors' Meeting Set for June 20 -------------------------------------------------------- A second meeting of creditors in the proceedings of S.G.M. Hotels Pty Ltd has been set for June 20, 2018, at 11:00 a.m. at the offices of BRI Ferrier, Level 4, 12 Pirie Street, in Adelaide, SA. The purpose of the meeting is (1) to receive the report by the Administrator about the business, property, affairs and financial circumstances of the Company; and (2) for the creditors of the Company to resolve whether the Company will execute a deed of company arrangement, the administration should end, or the Company be wound up. Creditors wishing to attend are advised proofs and proxies should be submitted to the Administrator by June 19, 2018, at 5:00 p.m. Thomas Stuart Otway and Alan Geoffrey Scott of BRI Ferrier were appointed as administrators of S.G.M. Hotels on May 15, 2018. STIRLING WEALTH: Second Creditors' Meeting Set for June 20 ---------------------------------------------------------- A second meeting of creditors in the proceedings of Stirling Wealth Group Ltd has been set for June 20, 2018, at 10:30 a.m. at Level 29, 66 Goulburn 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 June 19, 2018, at 4:00 p.m. Robert William Whitton and Sean Wengel of William Buck were appointed as administrators of Stirling Wealth on May 15, 2018. TOLSTON PTY: Second Creditors' Meeting Slated for June 20 --------------------------------------------------------- A second meeting of creditors in the proceedings of Tolston Pty. Ltd. has been set for June 20, 2018, at 10:00 a.m. at Level 11, 127 Creek Street, in Brisbane, Queensland. 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 June 19, 2018, at 4:00 p.m. Christopher John Baskerville of Jirsch Sutherland was appointed as administrator of Tolston Pty. on May 16, 2018. ========= C H I N A ========= XIAOMI CORP: Says to Continue Bleeding Cash ------------------------------------------- Caixin reports that Xiaomi Corp. has acknowledged that it will continue to hemorrhage cash in the near term as it ramps up investment in technology, new products and services, as well as its global expansion. The world's No. 4 smartphone-maker posted a net loss of CNY7 billion ($1.1 billion) during the first quarter, Caixin relates citing Xiaomi's draft prospectus issued on June 11 to the regulator in what could be the first offering of Chinese depositary receipts (CDRs). Xiaomi had a net loss of CNY43.9 billion for the whole of 2017, Caixin discloses. Xiaomi Corporation manufactures communication equipment and parts. The Company production and sells mobile phones, android devices, smart phone software, smart set-top boxes, and related accessories. * CHINA: Overseas Investors Step Up Visits to Quell Default Fears ----------------------------------------------------------------- Bloomberg News reports that the surge in Chinese company bond defaults has overseas investors deciding they need to take a closer look. Bloomberg relates that Edmund Goh, an Asia fixed-income investment manager at Aberdeen Standard Investments, said he's planning to take more trips to China to get intelligence that's hard to gain from afar. Investors can get to see among others, people who work in risk departments at banks, who can tell them how they're classifying loans, he said. Or corporate treasury executives who may shed some light on their use of shadow banking financing, Bloomberg relays. "If you do field trips, you can meet people other than those investor relations staff," Bloomberg quotes Goh, who is based in Singapore, as saying. "Even though you can't get a full picture, at least you will have enough pieces of the puzzle to help you make a sound decision." Bloomberg notes that with foreign holdings in the world's third- biggest bond market at a record high, the stakes are rising. Investors have been rattled by a lack of corporate financial transparency as rising funding costs from a deleveraging campaign spur a surge in defaults. A total of 15 publicly-issued bonds onshore have defaulted in 2018, compared with 23 for all of last year, Bloomberg discloses. According to Bloomberg, Goh's not alone. Singapore-based Raymond Chia, head of credit research for Asia ex-Japan at Schroder Investment Management Ltd., believes the number of defaults in China will rise further in the second half. He says he's considering taking more trips to meet management and industry experts to get a clearer picture, Bloomberg relates. Of course, some travel occurs after the default rather than before, Bloomberg says. Earlier this month, holders of bonds sold by China Energy Reserve & Chemicals Group Co. in South Korea visited the company's headquarters in Beijing to discuss debt payment issues, following a default last month by the company on separate securities, according to Bloomberg. Bloomberg relates that Nikko Asset Management Asia Ltd. said Chinese bond issuance has grown to become a more important component in foreign asset managers' portfolios. Its Singapore- based credit analysts typically make eight trips per year and more if needed, said Ivy Thung, head of credit research at the asset manager. In the first half of 2018, they're on schedule, with four trips so far, the report states. "The field trips allow the analysts to have a better gauge of the overall macroeconomic situation as well as to gauge the real demand for each sector," Bloomberg quotes Ms. Thug as saying. "We prefer to meet the people who are working on the ground such as operations manager, sales manager, etc." For Aberdeen Standard Investments, Goh said the asset manager is going a step further with plans to set up its first onshore fixed-income research team in Shanghai in a couple of months, part of a drive to boost its presence in the local bond market, Bloomberg adds. ========= I N D I A ========= AKHANDALAMANI ELECTRICAL: Ind-Ra Assigns 'BB' Issuer Rating ----------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned Akhandalamani Electricals & Construction (AEC) a Long-Term Issuer Rating of 'IND BB'. The Outlook is Stable. The instrument-wise rating actions are: -- INR55 mil. Fund-based working capital limits assigned with IND BB/Stable rating; and -- INR65 mil. Non-fund-based working capital limits assigned with IND A4+ rating. KEY RATING DRIVERS The ratings reflect AEC's medium scale of operations and modest credit metrics owing to limited order book. According to FY18 provisional financials, revenue fell to INR468.0 million (FY17: INR586.4 million), on account of a decline in the number of orders executed. Interest coverage (operating EBITDA/gross interest expense) increased slightly to 2.9x in FY18 (FY17: 2.6x) on account of a decline in interest cost. Net leverage (adjusted net debt/operating EBITDAR) deteriorated slightly to 2.6x in FY18 (FY17: 2.0x) due to a decline in absolute EBITDA. Operating margin declined to 7.3% in FY18 (FY17: 7.6%) on account of an increase in raw material cost. The ratings are supported by AEC proprietor's more than two decades experience in the electrical construction business and AEC's comfortable liquidity position as reflected by its around 85.8% use of the working capital limits on average during the 12 months ended April 2018. RATING SENSITIVITIES Negative: Any decline in the profitability leading to any deterioration in the overall credit metrics may lead to a negative rating action. Positive: Any substantial rise in the revenue and operating profitability along with improvement in the overall credit metrics will be positive for the ratings. COMPANY PROFILE AEC was established in 1997 was incorporated in 2009 in Cuttack, Odisha as a proprietorship firm. The entity is engaged in handling various electrical construction works and turnkey projects in Odisha and nearby states for several state government departments and public sector units. It also manufactures transformers at its facility in Cuttack, Odisha and is engaged in the trading of electrical equipment. B. D. AGRO: CRISIL Reaffirms B- Rating on INR3MM Cash Loan ---------------------------------------------------------- CRISIL has reaffirmed its 'CRISIL B-/Stable' rating on the long- term bank facilities of B. D. Agro Products Private Limited (BD Agro). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 3 CRISIL B-/Stable (Reaffirmed) Proposed Fund- Based Bank Limits 3 CRISIL B-/Stable (Reaffirmed) Long Term Loan 0.82 CRISIL B-/Stable (Reaffirmed) The rating continues to reflect BD Agro's modest scale of operations in the intensely competitive rice milling industry, vulnerability to volatile raw material prices, uncertainty of monsoon, and unfavourable changes in regulations, and weak financial risk profile. These weaknesses are partially offset by the experience of the promoters. Key Rating Drivers & Detailed Description Weakness * Modest scale of operations amid intense competition: Intense competition may continue to restrict scalability and limit pricing power, thereby constraining profitability. Revenue is estimated at around INR20 crore in fiscal 2018. * Vulnerability to fluctuations in raw material prices, uncertainty of monsoon, and unfavourable changes in regulations: Cultivation of paddy is highly dependent on monsoon and access to irrigation facilities. Hence, the firm remains susceptible to any shortage or price fluctuations, during unfavourable climatic conditions. * Weak financial risk profile: Gearing was moderate at 1.7 times as on March 31, 2018, with modest networth of INR4.55 crore. Interest coverage and net cash accrual to total debt ratios were average at 1.3 times and 0.06 time, respectively, in fiscal 2018. Financial risk profile should remain weak over the medium term due to large debt levels and low cash accrual. Strengths * Experience of promoters: The promoters have been in the rice milling business since 2004 through group company, BD Corporates Pvt Ltd. Benefits from their experience, strong understanding of the local market dynamics, and healthy relations with customers and suppliers should continue to support the business. Outlook: Stable CRISIL believes BD Agro will continue to benefit from the experience of the promoters. The outlook may be revised to 'Positive' if there is substantial increase in revenue, profitability, and cash accrual along with efficient working capital management. Conversely, the outlook may be revised to 'Negative' if decline in profitability, stretch in working capital cycle, or sizeable, debt-funded capital expenditure weakens financial risk profile and liquidity. BD Agro was incorporated in June 2009 at Kolkata; it began commercial operations in November 2009 and traded in only paddy and wheat until March 2011. However, in fiscal 2010, the company set up a rice mill, with processing capacity of 104 tonne per day in Howrah; this mill started commercial operations by end of March 2011. Mr Mahendra Agarwal and his brother, Mr Rajendra Agarwal, are the promoters. BALLIUM EXPORTS: CRISIL Migrates B Rating to Not Cooperating ------------------------------------------------------------ CRISIL has migrated the rating on bank facilities of Ballium Exports (BK) to 'CRISIL B/Stable Issuer not cooperating'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Proposed Long Term 20 CRISIL B/Stable (Issuer Not Bank Loan Facility Cooperating; Rating Migrated) CRISIL has been consistently following up with BK for obtaining information through letters and emails dated April 17, 2018, May 16, 2018 and May 21, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. 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 Ballium Exports. Which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on Ballium Exports 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 Ballium Exports to 'CRISIL B/Stable Issuer not cooperating'. In August 2009, BK Enchanting Enclave was formed as partnership towards developing residential apartments. The project is towards developing a gated community with 288 flats in Ongole District (Andhra Pradesh). Profit after tax (PAT) was INR0.67 crore and net sales were INR16.66 crore for fiscal 2016, vis-a-vis INR(2.19) crore and INR9.84 crore, respectively, for fiscal 2015. CHHAPRA MUNICIPAL: Ind-Ra Assigns 'BB-' LT Rating, Outlook Stable ----------------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned Chhapra Municipal Council (CMC) a Long-Term Issuer Rating of 'IND BB-'. The Outlook is Stable. KEY RATING DRIVERS The rating is constrained by CMC's declining financial performance. Revenue receipts decreased to INR111.27 million in FY16 (RE) from INR145.74 million in FY15, on the back of a significant decline in the share of grants in revenue income. Being a municipal council, its revenue sources comprise tax revenue and non-tax revenue. Its tax revenue comprises only holding tax and some small portion of other taxes. CMC reported a capital deficit of INR110.75 million in FY16 (RE) and Ind-Ra expects it to report a capital surplus over the forecast period FY17-FY21 on the back of expected grants from the state/central government for the investment planned under AMRUT mission. The rating is also constrained by Chhapra city's poor infrastructure. Although Chhapra is a well-connected city through roads and railways and has harnessed its agricultural base to develop industrial and tertiary sectors, it does not have an underground sewerage system and a sewage treatment plant. Also, the lack of an adequate water supply, drainage network, proper solid waste management and collection facilities hinders the growth potential of the city. This calls for immediate attention and affects CMC's credit profile. Under Atal Mission for Rejuvenation and Urban Transformation scheme, the total investment plan was estimated at INR1,552 million for the development of water supply, parks and urban transport over FY16- FY20. Of the estimated investment plan, INR980.20 million will be incurred towards improving the civic services in the city during FY17-FY20. The share of central government, state government and ULB stands at INR490.10 million, INR297.10 million and INR196 million, respectively. The rating reflects CMC's high revenue dependence on the state government. FY16 (RE) reflects reduced revenue grants (including compensation contribution) to INR79.34 million from INR113.72 million in FY15. However, this would not reduce dependence on the state government in lieu of capital grants to take care of its capital expenditure. CMC's own income to total revenue income ratio was below 20% over FY15-FY16 (RE). Also, CMC incurs high establishment expenditure Establishment expenditure in nature of salaries and wages comprised 76.8% of the total revenue expenditure in FY16 (RE) (FY15: 88.1%). High establishment expenditure constrains the headroom available to the council to spend on key areas such as operations and maintenance of civic facilities. An upside risk is likely to emerge in this expenditure head, when the state government revises and implements a new pay structure following the central government's Seventh Pay Commission recommendations. RATING SENSITIVITIES Positive: A sustained improvement in the delivery of civic services along with a significant improvement in the revenue account will lead to a positive rating action. Negative: Lowered state government support in form of grants leading to sustained deterioration in the revenue, will lead to a negative rating action. COMPANY PROFILE Chhapra is a largest city in Bihar. CMC was set up in 1857 and is the largest municipal council in the Saran district of the state of Bihar. It is mainly responsible for the administration of the city, providing and maintaining the various infrastructure facilities including roads, housing, water, solid waste management, education, health services etc. to its citizens. DEV PRAYAG: CRISIL Migrates B Rating to Not Cooperating Category ---------------------------------------------------------------- CRISIL has migrated the rating on bank facilities of Dev Prayag Paper Mill Private Limited (DPML) to 'CRISIL B/Stable Issuer not cooperating'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 2 CRISIL B/Stable (Issuer Not Cooperating; Rating Migrated) Term Loan 7 CRISIL B/Stable (Issuer Not Cooperating; Rating Migrated) CRISIL has been consistently following up with DPML for obtaining information through letters and emails dated March 28, 2018, April 19, 2018, May 16, 2018 and May 21, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. 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 Dev Prayag Paper Mill Private Limited. Which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on Dev Prayag Paper Mill 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 Dev Prayag Paper Mill Private Limited to 'CRISIL B/Stable Issuer not cooperating'. Established in 2013, promoted by Mr Bharat Agarwal, Mr Sandeep Agarwal, and Mr Mahesh Chand Agarwal, DPML manufactures kraft paper and light-weight coated duplex board. It commenced operations at its facility in Allahabad (Uttar Pradesh) in September 2015. EDIMANNICKAL JEWELLERY: CRISIL Moves B+ Rating to Not Cooperating ----------------------------------------------------------------- CRISIL has migrated the rating on bank facilities of Edimannickal Jewellery (EJ) to 'CRISIL B+/Stable Issuer not cooperating'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 5.6 CRISIL B+/Stable (Issuer Not Cooperating; Rating Migrated) Proposed Long Term 4.3 CRISIL B+/Stable (Issuer Not Bank Loan Facility Cooperating; Rating Migrated) CRISIL has been consistently following up with EJ for obtaining information through letters and emails dated April 23, 2018, May 14, 2018 and May 21, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. 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 Edimannickal Jewellery. Which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on Edimannickal Jewellery 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 Edimannickal Jewellery to 'CRISIL B+/Stable Issuer not cooperating'. EJ, set up as a partnership firm by Mr E T Jose and his brother Mr Thomas Mathew in 1989, retails gold jewellery. It owns a shop in Ranni, Kerala. Operations are managed by Mr Thomas Mathew. FRANSKO AGRO: CRISIL Migrates B+ Rating to Issuer Not Cooperating ----------------------------------------------------------------- CRISIL has migrated the rating on bank facilities of Fransko Agro Foods (FAF) to 'CRISIL B+/Stable/CRISIL A4 Issuer not cooperating'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 1.5 CRISIL A4 (Issuer Not Cooperating; Rating Migrated) Cash Credit 7.0 CRISIL B+/Stable (Issuer Not Cooperating; Rating Migrated) Long Term Loan .15 CRISIL B+/Stable (Issuer Not Cooperating; Rating Migrated) Proposed Long Term 1.35 CRISIL B+/Stable (Issuer Not Bank Loan Facility Cooperating; Rating Migrated) CRISIL has been consistently following up with FAF for obtaining information through letters and emails dated April 23, 2018, May 14, 2018 and May 21, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. 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 Fransko Agro Foods. Which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on Fransko Agro Foods 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 Fransko Agro Foods to 'CRISIL B+/Stable/CRISIL A4 Issuer not cooperating'. Set up in 2013 in Ernakulam, Kerala, as a partnership firm by Mr. Felvin Francis and his family members, FAF mills and processes paddy into boiled rice, rice bran, broken rice, and husk. HAIL TEA: CRISIL Migrates Ratings to B Issuer Not Cooperating ------------------------------------------------------------- CRISIL has migrated the ratings on the bank facilities of Hail Tea Limited (HTL) to 'CRISIL B/Stable/CRISIL A4/Issuer not cooperating'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee .35 CRISIL A4 (Issuer Not Cooperating; Migrated from 'CRISIL A4+') Cash Credit 9.5 CRISIL B/Stable (Issuer Not Cooperating; Migrated from 'CRISIL BB-/Stable') Proposed Long Term .65 CRISIL B/Stable (Issuer Not Bank Loan Facility Cooperating; Migrated from 'CRISIL BB-/Stable') Term Loan 1.5 CRISIL B/Stable (Issuer Not Cooperating; Migrated from 'CRISIL BB-/Stable') CRISIL has been consistently following up with HTL for obtaining information through letters and emails dated May 18, 2018 and May 23, 2018, apart from telephonic communication. However, the issuer remains non-cooperative. 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 has not received any information on either the financial performance or strategic intent of HTL. This restricts CRISIL's ability to take a forward-looking view on the credit quality of the entity. CRISIL believes the information available for HTL is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information'. Therefore, on account of inadequate information and lack of management cooperation, CRISIL has migrated the ratings on the bank facilities of HTL to 'CRISIL B/Stable/CRISIL A4/Issuer not cooperating'. HTL (formerly known as Hanuman Texnit and Industries Ltd), incorporated in 1997 at Hattikhira (Assam), manufactures black crush, tear and curl tea. Mr Anil Kanoria and Mr Anjan Kanoria are the promoters. HANKHUL PACKWELL: CRISIL Reaffirms B+ Rating on INR7.7MM Loan ------------------------------------------------------------- CRISIL has reaffirmed its rating on the bank facilities of Hankhul Packwell Private Limited (HPPL) at 'CRISIL B+/Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 4.9 CRISIL B+/Stable (Reaffirmed) Proposed Long Term Bank Loan Facility 0.4 CRISIL B+/Stable (Reaffirmed) Term Loan 7.7 CRISIL B+/Stable (Reaffirmed) The rating reflects small scale of operations in the polypropylene cement bags industry and modest financial risk profile. The above weaknesses are partially offset by extensive experience of the promoter. Key Rating Drivers & Detailed Description Weakness * Small scale of operations in the polypropylene cement bags industry: Operating income was INR17.6 crore in fiscal 2017 which is estimated to improve to INR30 crore in fiscal 2018. However, the company will continue to be a small player in the industry. * Modest financial risk profile: The financial risk profile is constrained by estimated adjusted networth of INR2.3 crore and estimated total outside liabilities to adjusted networth (TOLANW) ratio of 5.9 times, as on March 31, 2018. However, the interest coverage ratio was at 3.3 times. The financial profile is expected to improve in the medium term due to healthy accretion to reserves Strengths * Extensive experience of the promoters: The promoters of the company have more than 30 years of experience in the industry which helps in maintaining good relationship with customers and suppliers along the supply chain. Outlook: Stable CRISIL believes HPPL will continue to benefit from the extensive industry experience of its promoter. However, its financial risk profile is likely to remain constrained by a low networth and high leverage. The outlook may be revised to 'Positive' if high cash accrual or equity infusion strengthens the financial risk profile. The outlook may be revised to 'Negative' if delays in completion and stabilisation of the capacity enhancement project weakens liquidity. The outlook may also be revised to 'Negative' if a decline in operating income or profitability leads to low net cash accrual. HPPL was established on August 20, 1983, in Jhansi, Uttar Pradesh. Mr Khullar, the managing director, and his family manage operations. Commercial operations commenced from May 10, 1986, to manufacture polypropylene based cement bags. The company has installed capacity of 540 lakh bags per year. HYQUIP SYSTEMS: CRISIL Assigns C Rating to INR8.66MM Cash Loan -------------------------------------------------------------- CRISIL has assigned its 'CRISIL C/CRISIL A4' ratings to the bank facilities of Hyquip Systems Limited (HSL). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 10.2 CRISIL A4 (Assigned) Cash Credit 8.66 CRISIL C (Assigned) The ratings reflect instances of over utilisation in cash credit limit and devolvement of letter of credit by HSL in last three months, which are corrected within 30 days. The ratings also factor in modest scale of operations in the intensely competitive material handling industry, large working capital requirement, and weak financial risk profile. These weaknesses are partially offset by the experience of the promoter. Analytical Approach Out of total unsecured loans (outstanding at INR2.36 crore as on March 31, 2018) extended to HSL by the promoter, INR2 crore has been treated as neither debt nor equity since it is non-interest bearing and should remain in the business over the medium term. The remaining has been treated as debt. Key Rating Drivers & Detailed Description Weaknesses * Modest scale of operations amid intense competition: Intense competition may continue to restrict the scalability of operations and limit pricing power with, thereby constraining profitability. Revenue was around INR15 crore in fiscal 2018. * Large working capital requirement: Gross current assets were over 400 days as on March 31, 2018, driven by high receivables of over 300 days. * Weak financial risk profile: Total outside liabilities to adjusted networth ratio is estimated at around 2 times as on March 31, 2018, with networth of about INR12 crore. Interest coverage ratio is estimated to be average at 1.5 times in fiscal 2018. Strength * Experience of promoter: Benefits from the promoter's experience of over four decades, his strong understanding of the local market dynamics, and healthy relations with customers and suppliers should continue to support the business. Further, orders worth around INR35 crore were reported as of March 2018, to be executed by August 2018, ensuring steady cash flow. HSL, incorporated in 1987 at Hyderabad, is a closely held public- limited company that manufactures solutions for material handling, including designing, installation and commissioning, and operation and maintenance solutions, mainly for steel, coal, power, cement, paper, food, sugar, pharmaceuticals and chemical industries. The company, a part of the Hyquip group, has diversified into Municipal solid waste processing machinery. Mr K Balakrishna Reddy is the promoter. ISWARYA ENTERPRISES: CRISIL Migrates B Rating to Not Cooperating ---------------------------------------------------------------- CRISIL has migrated the rating on bank facilities of Iswarya Enterprises (IE) to 'CRISIL B/Stable Issuer not cooperating'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Overdraft 9 CRISIL B/Stable (Issuer Not Cooperating; Rating Migrated) CRISIL has been consistently following up with IE for obtaining information through letters and emails dated April 24, 2018, May 16, 2018 and May 21, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. 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 Iswarya Enterprises. Which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on Iswarya Enterprises 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 Iswarya Enterprises to 'CRISIL B/Stable Issuer not cooperating'. Formed in 2004 as a partnership firm, Iswarya Enterprises (IE) is engaged in processing of groundnut kernels. The firm is based out of Nallacheruvu, Andhra Pradesh and is promoted by Mr. Ramanath. JMP MANUFACTURING: CRISIL Assigns B Rating to INR4.75MM Loan ------------------------------------------------------------ CRISIL has assigned its 'CRISIL B/Stable/CRISIL A4' ratings on the bank facilities of JMP Manufacturing Company (JMP). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 4.75 CRISIL B/Stable (Assigned) Packing Credit 1.50 CRISIL A4 (Assigned) The rating reflects JMP's modest scale of operations and its large working capital requirements. These weaknesses are partially offset by the extensive experience of the promoters in the automotive components industry. Key Rating Drivers & Detailed Description Weaknesses: * Modest scale of operations: With estimated revenue of INR25 crore in fiscal 2018, scale remains small in the intensely competitive automotive ancillary industry. Business risk profile remains susceptible to risks inherent in this segment. * Large working capital requirement: Operations are likely to remain working capital intensive owing to sizeable gross current assets (450 days as on March 31, 2017), driven by large debtors (150-180 days) provided to customers and inventory (200-250 days). Strength: * Promoters' experience and established relationship with customers: The promoters have been in the auto ancillary business for nearly 20 years. Over the years, they established strong business relationship with customers. Benefits from their expertise and established business relations should continue to support the business. Outlook: Stable CRISIL believes JMP will continue to benefit from its promoters' strong track record and experience in the automotive components industry. The outlook may be revised to 'Positive' if cash accrual and liquidity improve significantly with increase in revenue and profitability. The outlook may be revised to 'Negative' if decline in revenue or operating profitability, or large, debt-funded capital expenditure constrains the financial risk profile and causes further stretch in its working capital requirements. Incorporated in 1957 and promoted by Mr. Manek Kapoor and Mr. Manoj Kapoor, JMP is into manufacturing of automobile spare parts for trucks and trailers. Its manufacturing facility is in Punjab. LUNI POWER: CRISIL Migrates D Rating to Not Cooperating Category ---------------------------------------------------------------- CRISIL has migrated the rating on bank facilities of Luni Power Company Private Limited (LPCL) to 'CRISIL D Issuer not cooperating'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Term Loan 15 CRISIL D (Issuer Not Cooperating; Rating Migrated) CRISIL has been consistently following up with LPCL for obtaining information through letters and emails dated April 25, 2018, May 11, 2018 and May 16, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. 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 Luni Power Company Private Limited. Which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on Luni Power Company 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 Luni Power Company Private Limited to 'CRISIL D Issuer not cooperating'. Furthermore, the company has not paid the fee for conducting rating surveillance as agreed to in the rating agreement. LPCL, incorporated in 2001, is setting up a small hydro-power plant under a 40-year concession contract with the Government of Himachal Pradesh on a build-own-operate-and-transfer basis. MAKSON NUTRITION: Ind-Ra Affirms BB Issuer Rating, Outlook Stable ----------------------------------------------------------------- India Ratings and Research (Ind-Ra) has affirmed Makson Nutrition Food (India) Private Limited's (MFINPL) Long-Term Issuer Rating at 'IND BB'. The Outlook is Stable. The ratings have been migrated to the non-cooperating category. The issuer did not participate in the surveillance exercise, despite continuous requests and follow-ups by the agency. Thus, the rating is on the basis of best available information. The rating will now appear as 'IND BB (ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating action is: -- INR7.5 mil. Fund-based limits affirmed and migrated to non- cooperating category with IND BB (ISSUER NOT COOPERATING) /Stable rating; and -- INR237.42 mil. (reduced from INR365.66 mil.) Term loans due on January 2019 to December 2021 affirmed and migrated to non-cooperating category with IND BB (ISSUER NOT COOPERATING) /Stable rating. Note: ISSUER NOT COOPERATING: Issuer did not cooperate; based on the best available information KEY RATING DRIVERS The affirmation reflects MFINPL's continued small scale of operations as indicated by revenue of INR295 million in FY17 (FY16: INR412 million, FY15: INR235 million). Interest coverage (operating EBITDA/gross interest expense) was 3.6x in FY17 (FY16: 7.0x, FY15: 2.1x) and net financial leverage (total adjusted debt/operating EBITDAR) was 2.5x (1.5x, 5.9x). Ind-Ra expects the company's overall credit profile to remain at similar levels over the next few years backed by schedule repayment of term loans, leading to a reduction in debt level and financial cost. FY16 was an exceptional year as the company received large amount of pending bills, which led to a surge in EBITDA, and the consequent improvement in the credit metrics. However, the ratings are supported by the company's strong EBITDA margin of 53% in FY17 (FY16: 72.9%, FY15: 42.8%). The ratings also benefit from the company's comfortable liquidity position as indicated by 78% average utilisation of the fund- based limits during the 12 months ended April 2018. The ratings remain supported by MFINPL's strong association with Mondelez India Foods Pvt Ltd (formerly Cadbury India Limited). The ratings have been migrated to the non-cooperating category as the company did not provide Ind-Ra with the latest financials and information, despite continuous requests and follow-ups. RATING SENSITIVITIES Positive: A substantial improvement in revenue along with an improvement in the credit metrics will lead to a positive rating action. Negative: Any deterioration in the liquidity profile would be negative for the ratings. COMPANY PROFILE MNFIPL is a closely-held company, promoted by Mr Rajendra Patel and Smt Parul Patel, set up in 2000. It manufactures Choclairs for Mondelez India Foods. MALHOTRA CONSTRUCTIONS: CRISIL Moves B+ Rating to Not Cooperating ----------------------------------------------------------------- CRISIL has migrated the ratings on bank facilities of Malhotra Constructions Pvt. Ltd. (MCPL) to 'CRISIL B+/Stable/CRISIL A4 Issuer not cooperating'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 11 CRISIL A4 (Issuer Not Cooperating; Rating Migrated) Cash Credit 3 CRISIL B+/Stable (Issuer Not Cooperating; Rating Migrated) CRISIL has been consistently following up with MCPL for obtaining information through letters and emails dated April 25, 2018, May 16, 2018 and May 21, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. 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 Malhotra Constructions Pvt. Ltd.. Which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on Malhotra Constructions Pvt. Ltd. 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 ratings on bank facilities of Malhotra Constructions Pvt. Ltd. to 'CRISIL B+/Stable/CRISIL A4 Issuer not cooperating'. Incorporated in 1989 and promoted by Mr. Rajesh Malhotra MCPL is engaged in civil construction. MCPL reported a net profit of INR0.33 crore on net sales of INR13.38 crore for Fiscal 2016, as against a net profit of INR0.19 crore on net sales of INR7.90 crore for fiscal 2015. NEW AMRUTHA: CRISIL Migrates B Rating to Not Cooperating Category ----------------------------------------------------------------- CRISIL has migrated the rating on bank facilities of New Amrutha Medical and Research Centre (Raichur) Private Limited (KVSL) to CRISIL B/Stable Issuer not cooperating'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Term Loan 7 CRISIL B/Stable (Issuer Not Cooperating; Rating Migrated) Proposed Long Term 3 CRISIL B/Stable (Issuer Not Bank Loan Facility Cooperating; Rating Migrated) CRISIL has been consistently following up with KVSL for obtaining information through letters and emails dated April 25, 2018, May 14, 2018 and May 21, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. 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 New Amrutha Medical and Research Centre (Raichur) Private Limited, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on New Amrutha Medical and Research Centre (Raichur) Private Limited is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' category or lower'. Therefore, on account of inadequate information and lack of management cooperation, CRISIL has migrated the rating on bank facilities of New Amrutha Medical and Research Centre (Raichur) Private Limited to CRISIL B/Stable Issuer not cooperating'. NAMRC, set up in 2010, operates a 100-bed children's hospital in Raichur. The hospital has intensive care and operating theatre facilities. It is managed by Dr Ravi P and his close friends. NUTAVE STONE: CRISIL Moves B Rating to Not Cooperating Category --------------------------------------------------------------- CRISIL has migrated the rating on bank facilities of Nutave Stone Crushers (NSC) to CRISIL B/Stable Issuer not cooperating'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit .75 CRISIL B/Stable (Issuer Not Cooperating; Rating Migrated) Proposed Long Term .29 CRISIL B/Stable (Issuer Not Bank Loan Facility Cooperating; Rating Migrated) Term Loan 4.96 CRISIL B/Stable (Issuer Not Cooperating; Rating Migrated) CRISIL has been consistently following up with NSC for obtaining information through letters and emails dated April 26, 2018, May 18, 2018 and May 23, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. '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 Nutave Stone Crushers, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on Nutave Stone Crushers 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 Nutave Stone Crushers to CRISIL B/Stable Issuer not cooperating'. NSC, incorporated as a partnership concern in 2015, has set up a plant for crushing of stones, at Nutave village, Karnataka. The plant, with a capacity of 300 tonnes per hour, has become operational from October 2016. PV KNIT: CRISIL Migrates B+ Rating to Not Cooperating Category -------------------------------------------------------------- CRISIL has migrated the rating on bank facilities of PV Knit Fashions (PVKF) to 'CRISIL B+/Stable/CRISIL A4 Issuer not cooperating'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee .15 CRISIL A4 (Issuer Not Cooperating; Rating Migrated) Bill Discounting 3.0 CRISIL A4 (Issuer Not Cooperating; Rating Migrated) Long Term Loan 1.5 CRISIL B+/Stable (Issuer Not Cooperating; Rating Migrated) Packing Credit 4.5 CRISIL A4 (Issuer Not Cooperating; Rating Migrated) Proposed Long Term .85 CRISIL B+/Stable (Issuer Not Bank Loan Facility Cooperating; Rating Migrated) CRISIL has been consistently following up with PVKF for obtaining information through letters and emails dated April 26, 2018, May 14, 2018 and May 21, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. 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 PV Knit Fashions. Which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on PV Knit Fashions 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 PV Knit Fashions to 'CRISIL B+/Stable/CRISIL A4 Issuer not cooperating'. Established in 1989 by Mr. Raamasamy as a partnership firm in Tiruppur, Tamil Nadu, PVKF manufactures and exports knitted garments. It undertakes knitting, printing, cutting, sticking, and packaging in-house. R. N. K. EDUCATIONAL: CRISIL Assigns B+ Rating to INR6.25MM Loan ---------------------------------------------------------------- CRISIL has assigned its 'CRISIL B+/Stable' ratings to the bank facility of R. N. K. Educational Society (RNKES). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Secured Overdraft Facility 1.5 CRISIL B+/Stable (Assigned) Term Loan 6.25 CRISIL B+/Stable (Assigned) The rating reflects Society's average and flattish scale of operation, modest cash accruals and return on capital employed (RoCE), elongated receivables and vulnerability to regulatory risks associated with educational institutions. These weaknesses are partly offset by society's established presence operating engineering, industrial Training Institute and School, college in (Jabalpur) Madhya Pradesh duly supported by extensive experience of its management. Key Rating Drivers & Detailed Description Weaknesses * Average and flattish scale of operation: Society's revenue had remained average and flattish in between INR11-12 crore over the past three years through 2018. The operating margin had also been volatile between 6.5% and 13% in the past. Average scale and profitability had led to low cash accruals for the society as well. * Modest return on capital employed (RoCE) and elongated receivables: RoCE has remained low at less than 6% in the past three years. Low RoCE reflects challenges in ramping up the enrollments for developed infrastructure. Also, the society has large receivables pending from the government which is on account of offering scholarship in all courses except school. * Vulnerability to competition and regulatory risks associated with educational institutions: Society faces competition from other institutions offering similar courses for student enrollments. Increased number of engineering colleges in recent past and changing student preferences exposes the society to competition primarily for its engineering courses which has seen only 70% occupancy. Also, RNKES has to comply with operational and infrastructure norms set by regulatory bodies ' Rajiv Gandhi Proudyogiki Vishwavidhyalaya, Bhopal (M.P). Thus, the society needs to regularly invest in its workforce and infrastructure. Also, setting up of new institutes and increment in seats require approvals. Strengths * Established presence in (Jabalpur) Madhya Pradesh duly supported by extensive experience of its management: RNKES offers education predominantly in the engineering, business management, polytechnic, industrial training institute and school (Nursery to 9th standard) in Jabalpur, Madhya Pradesh. RNKES is promoted by Mr S. C. Masuraha and Mr Mukesh Indurakhya. Management's over 15 years of industry experience has helped the society to establish a regional position for its institutions. * Diversified revenue profile with variety of course offerings: RNKES derives its revenues from its engineering, business management, polytechnic, industrial training institute and school in Jabalpur which has attracted a large student base, and has also enabled revenue diversification. Outlook: Stable CRISIL believes that RNKES will benefit over the medium term from the extensive management experience and steady demand for its industrial training institute and polytechnic courses as well as for its school. The outlook may be revised to 'Positive' if the society increases its scale of operations substantially, while it maintains its profitability leading to higher cash flows. Conversely, the outlook may be revised to 'Negative' if RNKES undertakes any large, debt-funded capital expenditure programme or records a significant decline in its cash accruals resulting in deterioration in its financial risk profile and liquidity. RNKES, founded in 2003, runs an education group under the brand 'Takshshila' which is based out of Jabalpur (Madhya Pradesh) providing education from engineering to professional courses. RNK has established 3 institutes - Takshshila Private Industrial Training Institute, Takshshila Institute of Engineering & Technology and Mount Litera Zee School, located in nearby area offering courses across engineering, business management, polytechnic, industrial training institute and school. RADHAKRISHNA OIL: CRISIL Migrates B+ Rating to Not Cooperating -------------------------------------------------------------- CRISIL has migrated the rating on bank facility of Radhakrishna Oil Industries (ROI) to CRISIL B+/Stable Issuer not cooperating'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 7.2 CRISIL B+/Stable (Issuer Not Cooperating; Rating Migrated) CRISIL has been consistently following up with ROI for obtaining information through letters and emails dated April 26, 2018, May 18, 2018 and May 23, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. 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 Radhakrishna Oil Industries, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on Radhakrishna Oil Industries 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 facility of Radhakrishna Oil Industries to CRISIL B+/Stable Issuer not cooperating'. ROI was established as a partnership firm in 1999. Its operations are managed by Jaiswal family, which has experience in cotton ginning and farming in Bhikangaon, Madhya Pradesh. ROI gins cotton and extracts oil, and has installed capacity of 250 bales per day. RUBY MICA: CRISIL Reaffirms B+ Rating on INR2.5MM Cash Loan ----------------------------------------------------------- CRISIL has reaffirmed its 'CRISIL B+/Stable/CRISIL A4' ratings on the bank facilities of Ruby Mica Company Limited (RMCL). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 2.5 CRISIL B+/Stable (Reaffirmed) Export Packing Credit 1.9 CRISIL B+/Stable (Reaffirmed) Post Shipment Credit .6 CRISIL A4 (Reaffirmed) Proposed Long Term Bank Loan Facility 2.41 CRISIL B+/Stable (Reaffirmed) Standby Line of Credit .37 CRISIL B+/Stable (Reaffirmed) Term Loan .68 CRISIL B+/Stable (Reaffirmed) The ratings continue to reflect the company's modest scale of operations in the intensely competitive mica industry, and its large working capital requirement. These weaknesses are partially offset by the extensive experience of the promoters and comfortable financial risk profile. Key Rating Drivers & Detailed Description Weakness * Modest scale of operations in intensely competitive industry: Despite presence of more than four decades, the company's scale of operations has remained modest, reflected in revenue of around INR25 crore for fiscal 2018. The business risk profile will remain constrained over the medium term because of modest scale of operations, given low entry barrier in the intensely competitive mica industry. * Large working capital requirement: RMCL's large working capital requirement is reflected in gross current assets of 190 days as on March 31, 2018, because of large inventory given the long processing time, and sizeable receivables. Strengths * Promoters' extensive industry experience: The promoters' experience of more than four decades in the mica industry has helped the company establish a strong market position. * Comfortable financial risk profile: Networth is estimated to be comfortable, at INR11 crore as on March 31, 2018, backed by moderate profitability. Gearing will remain around 0.50 time over the medium term as RMCL does not plan any capital expenditure. Debt protection metrics have remained comfortable, reflected in interest coverage and net cash accrual to total debt ratios of 3.4 times and 0.15 time, respectively, for fiscal 2018. Outlook: Stable CRISIL believes RMCL will continue to benefit from the extensive experience of its promoters. The outlook may be revised to 'Positive' if cash accrual is higher than expected because of revenue growth, or if liquidity improves driven by better working capital cycle. The outlook may be revised to 'Negative' if financial risk profile and liquidity weaken because of decline in profitability, stretched working capital cycle, or debt-funded capital expenditure. Set up as a partnership firm in 1968 by Jharkhand-based Bagaria family and reconstituted as a closely held public limited company in fiscal 2010, RMCL manufactures and exports synthetic mica paper and other products. RUCHI SOYA: Patanjali, Adani Submit Revised Bids ------------------------------------------------ BloombergQuint reports that Baba Ramdev-promoted Patanjali Ayurved and Adani group on June 11 submitted their revised bids to acquire bankruptcy-hit firm Ruchi Soya Ltd. as lenders of the edible oil firm have decided to hold a fresh round of resolution process to maximise asset value, said sources. BloombergQuint relates that the committee of creditors of Ruchi Soya, which has decided to conduct the Swiss challenge method to maximise the asset value of the bankruptcy-hit firm, is expected to open the bids on June 12, they added. When asked about the development in the bidding process, Patanjali spokesperson SK Tijarawala said: "We have submitted our revised bids," BloombergQuint relays. According to BloombergQuint, lenders in the meeting held on May 30 had set the stage for an aggressive bidding between the two suitors for Ruchi Soya to maximise the value of the assets, sources said, adding that the CoC in consultation with the independent evaluator has decided to adopt a Swiss challenge method. Under the Swiss challenge system, which is now used by various government wings for tenders, lower bidders are given chance to match the highest bidder and if matched then the highest bidder is asked to improve its bid, the report says. Earlier, Patanjali had emerged as the highest bidder with an offer of around Rs 4,300 crore and has a commitment of Rs 1,800 crore capital infusion into the company, sources said, adding that Adani Wilmar, which sells edible oils under Fortune brand, has made a bid of around Rs 3,300 crore, BloombergQuint notes. BloombergQuint adds that an Executive Committee comprising of representatives from IDBI, SBI, Stanchart and Corporation Bank will conduct the Swiss challenge and conclude the process by mid- June. Apart from Patanjali and Adani, companies that had shown interest in acquiring Ruchi Soya were Wilmar, Emami Agrotech and Godrej Agrovet, the report discloses. BloombergQuint says Patanjali Ayurveda already has a tie-up with the Indore-based Ruchi Soya for edible oil refining and packaging and it wants to further expand into cooking oil business. About Ruchi Soya Ruchi Soya Industries Ltd. engages in crushing of oil seeds and extraction/refining of edible oil along with manufacturing of related products like vanaspati and textured proteins. It is also engaged in import/export as well as domestic trading of various agri-commodities. It is the flagship entity of the Indore, Madhya Pradesh based Ruchi Group, which has business interests spread across various sectors including edible oil, agri-commodity trading, liquid and dry storage warehousing for agri-products and real estate. RSIL has manufacturing presence at 20 locations across India. In December 2017, Ruchi Soya Industries Ltd entered into the Corporate Insolvency Resolution Process (CIRP) and Shailendra Ajmera was appointed to act as Interim resolution Professional (IRP), according to PTI. The appointment was made by the National Company Law Tribunal (NCLT) on the application of the creditors Standard Chartered Bank and DBS Bank Ltd, under the Insolvency and Bankruptcy Code. Ruchi Soya has a total debt of about INR120 billion. SATYA SRINIVASA: CRISIL Migrates B Rating to Not Cooperating ------------------------------------------------------------ CRISIL has migrated the rating on bank facility of Satya Srinivasa Enterprises (SSE) to CRISIL B/Stable Issuer not cooperating'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 8 CRISIL B/Stable (Issuer Not Cooperating; Rating Migrated) CRISIL has been consistently following up with SSE for obtaining information through letters and emails dated April 26, 2018, May 16, 2018 and May 21, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. 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 Satya Srinivasa Enterprises, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on Satya Srinivasa Enterprises is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' category or lower'. Therefore, on account of inadequate information and lack of management cooperation, CRISIL has migrated the rating on bank facility of Satya Srinivasa Enterprises to CRISIL B/Stable Issuer not cooperating'. Established in 2002, SSE is engaged in ginning and pressing of raw cotton and sells cotton lint and trading of cotton. The firm is promoted by Mr. Srinivas Bhima. The firm operates with installed capacity of 300 bales per day at Guntur in Andhra Pradesh. SHALAK EATABLE: CRISIL Migrates Rating to B- Not Cooperating ------------------------------------------------------------ Due to inadequate information, CRISIL, in line with Securities and Exchange Board of India guidelines, had migrated its ratings on the bank facilities of Shalak Eatable Products Pvt. Ltd. (SEPPL) to 'CRISIL B-/Stable/CRISIL A4 Issuer not cooperating'. However, management has subsequently started sharing information necessary for carrying out a comprehensive review of the ratings. Consequently, CRISIL has migrated its ratings to 'CRISIL B- /Stable/CRISIL A4'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Standby Overdraft 1.5 CRISIL A4 (Migrated from Facility 'CRISIL A4 Issuer Not Cooperating') Term Loan 14.66 CRISIL B-/Stable (Migrated from 'CRISIL B-/Stable Issuer Not Cooperating') The ratings reflect SEPPL's weak financial risk profile, modest scale of operations with limited track record and delay in commencement of operations. These weaknesses are partially offset by promoters' extensive experience and their funding support. Analytical Approach Unsecured loan of INR4.32 crore as on March 31, 2017, from promoters has been treated as neither debt nor equity as it is subordinate to bank debt and is interest-free, and will remain in business over the medium term. Key Rating Drivers & Detailed Description Weakness * Limited track record due to start-up phase: Trial operations started from December 2017 and, till March 2018, the company booked estimated revenue of INR9.25 lakh. With ramp up in operations, operating income is expected to increase. * Weak financial risk profile: Over the medium term, networth is expected to be small and cash accrual low against high debt levels. * Delay in commencement of operations: Operations were expected to start from June 2017, but got delayed due delay in installation of machines. SEPPL has accordingly revised terms of its loan with the bank. Strengths * Promoters' extensive experience and funding support: The company's promoters and their relatives have longstanding presence in the food processing business. Also, promoters have already infused INR4.32 crore till date to meet funding requirements, and will continue to extend need-based support. Outlook: Stable CRISIL believes SEPPL will benefit from its promoters' prior experience. The outlook may be revised to 'Positive' if ramp up in operations leads to healthy profitability and better-than- expected cash accrual during initial phase of operations. The outlook may be revised to 'Negative' if any delay in ramping up operations results in lower-than-expected cash accrual during start-up phase, or if additional debt-funded capital expenditure puts pressure on liquidity. Incorporated in 2008 and promoted by Mr Rajesh Bansal and Mr Yogesh Bansal, SEPPL is setting up a unit in Mohammadpur, Lucknow, to manufacture 2D and 3D pellet snacks. SHRI RAMSWAROOP: Ind-Ra Maintains D LT Rating in Non-Cooperating ---------------------------------------------------------------- India Ratings and Research (Ind-Ra) has maintained Shri Ramswaroop Memorial Institute of Management and Computer Application's bank loan ratings in 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 the ratings. The ratings will continue to appear as 'IND D (ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating actions are: -- INR190 mil. Term loans (long-term) due on September 2019 maintained in Non-Cooperating Category with IND D (ISSUER NOT COOPERATING) rating; and -- INR50 mil. Fund-based working capital facility (long-term) maintained in Non-Cooperating Category with IND D (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on June 9, 2016. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. COMPANY PROFILE Shri Ramswaroop Memorial Institute of Management and Computer Application manages the Shri Ramswaroop Memorial Group of Professional Colleges - which offer a range of undergraduate and postgraduate programmes in engineering, computer applications and management - and Shri Ramswaroop Memorial Public School - which is a kindergarten to 12th standard school. SHRI SENTHUR: Ind-Ra Moves BB- Issuer Rating to Non-Cooperating --------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated Shri Senthur Velan Infras' 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: -- INR100 mil. Fund-based facilities migrated to non-cooperating category with IND BB- (ISSUER NOT COOPERATING) / IND A4+ (ISSUER NOT COOPERATING) rating; and -- INR25 mil. Non-fund-based facilities migrated to non- cooperating category IND A4+ (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on May 23, 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 2012, Shri Senthur Velan Infras is a partnership firm engaged in construction and maintenance of roads (national highways, state highways and private roads) and bridges. SOCIAL EDUCATIONAL: CRISIL Cuts Rating on INR15.5MM Loan to B+ -------------------------------------------------------------- CRISIL has downgraded its rating on the long-term facilities of Social Educational Trust (SET) to 'CRISIL B+/Stable' from 'CRISIL BB-/Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit/ 5 CRISIL B+/Stable (Downgraded Overdraft facility from 'CRISIL BB-/Stable') Long Term Loan 15.5 CRISIL B+/Stable (Downgraded from 'CRISIL BB-/Stable') The downgrade reflects deterioration in SET's financial risk profile especially liquidity because of substantial increase in debt resulting in weakening of capital structure and debt protection metrics. Large debt-funded capital expenditure undertaken in fiscals 2016 and 2017 led gearing to increase to an estimated 3.67 times as on March 31, 2018 from below 2 times as on March 31, 2015. Liquidity is also weak because of tightly matched net cash accrual against maturing debt. The ability to sustain operating margin at higher levels of 18-20%, while maintaining healthy revenue growth is a key monitorable. The rating also reflects the trust's modest scale of operations with high risk related to geographical concentration in revenue, weak financial risk profile and exposure to risks related to unfavourable regulatory changes and to intense competition in the education sector. These weaknesses are mitigated by the trust's established position in its area of operations and the extensive experience of its trustees. Key Rating Drivers & Detailed Description Weaknesses: * Modest scale with high geographical concentration in revenue: Scale of operation is modest with estimated revenue of INR42 crore in fiscal 2018. Moreover majority of the revenue comes from a single campus in Nambur (Andhra Pradesh) indicating high geographical concentration. * Susceptibility to regulatory changes and to intense competition: SET remains susceptible to adverse changes in the education sector as it is highly regulated by various governmental and quasi-governmental agencies. Further, SET faces intense competition from numerous colleges located in Guntur, Andhra Pradesh. * Weak financial risk profile: Networth and gearing were estimated at INR10.78 crore and 3.67 times, respectively, as on March 31, 2018. Debt protection metrics are weak as reflected in estimated interest coverage and net cash accrual to total debt ratios of 1.7 times and 0.07 time, respectively, in fiscal 2018. Strength: * Extensive experience of the trustees: The two decades of experience of the trustees has led to SET's established market position in the region. Outlook: Stable CRISIL believes SET will benefit from the extensive experience of the trustees in the education segment. The outlook may be revised to 'Positive' if increase in revenue and profitability strengthens key credit metrics. The outlook may be revised to 'Negative' if high debt-funded capex, lower-than-expected revenue and profitability or any adverse regulatory change weakens financial risk profile. Established by Mr Vasireddy Vidya Sagar and his family in 2006, SET runs Vasireddy Venkatadri Institute of Technology in Guntur. SOMESWARA ENTERPRISES: CRISIL Moves B Rating to Not Cooperating --------------------------------------------------------------- CRISIL has migrated the rating on bank facility of Someswara Enterprises (SE) to CRISIL B/Stable Issuer not cooperating. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Warehouse Receipts 10 CRISIL B/Stable (Issuer Not Cooperating; Rating Migrated) CRISIL has been consistently following up with SE for obtaining information through letters and emails dated April 26, 2018, May 16, 2018 and May 21, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. 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 Someswara Enterprises, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on Someswara Enterprises is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' category or lower'. Therefore, on account of inadequate information and lack of management cooperation, CRISIL has migrated the rating on bank facility of Someswara Enterprises to CRISIL B/Stable Issuer not cooperating'. Established in 2015 as a proprietorship firm by Mr. K Someswara Rao, SE trades in several products such as jute bags, wastepaper, and pulses. SOUNDARYA DECORATORS: CRISIL Lowers Rating on INR5MM Loan to B- --------------------------------------------------------------- CRISIL has downgraded its rating on the long-term bank facility of Soundarya Decorators Private Limited (SDPL) to 'CRISIL B- /Stable' from 'CRISIL B/Stable' and reaffirmed its rating on the short-term bank facility at 'CRISIL A4'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 20 CRISIL A4 (Reaffirmed) Cash Credit 5 CRISIL B-/Stable (Downgraded from 'CRISIL B/Stable') The rating downgrade reflects weakness in SDPL's financial risk profile as the company is expected to report weak net worth, as at March 31, 2018. This is due to the fact that the company is estimated to report net losses in excess of INR2.5 crores during fiscal 2018 on account of constrained operating performance. Consequent to constrained operating performance and moderate debt level in balance sheet, company's debt protection metrics during fiscal 2018 are estimated to be weak. The ratings continue to reflect SDPL's weak financial risk profile, and working capital intensive nature of its operations. These weaknesses are partially offset by the company's promoter's extensive industry experience and funding support. Key Rating Drivers & Detailed Description Weaknesses * Weak financial risk profile: SDPL has reported net losses during two of the last three financial years. As a result its net worth base has eroded resulting in weakness in its financial risk profile. Consequently, significant part of its funding requirement is being met vide external debt and loans and advances from directors. * Working capital intensive operations: SDPL has reported Gross Current Asset (GCA) days in excess of 200 days during each of the last three financial years. Company's receivables have been higher than 100 days during the end of each of the last three financial years. Company's operations is expected to remain working capital intensive over the medium term. Strengths: * Extensive industry experience of promoter and funding support: The business profile of the company benefits from the extensive industry experience of its promoters, who have been in this business for over 2 decades. Company's focus on quality has ensured repeat orders from its customers. Further, SDPL also benefits from funding support from its directors. Outlook: Stable CRISIL believes SDPL will continue to benefit over the medium term from its promoters' extensive industry experience. The outlook may be revised to 'Positive' in the event of the company reporting significantly better than expected operating performance resulting in substantial improvement in capital structure. Conversely, the outlook may be revised to 'Negative' in the event of the company reporting lower than expected cash accruals or larger than expected working capital requirement or debt funded capex. SDPL, set up in 1992, is promoted by Mr. Balaji Rajaraman and Mr. Sathyamurthy Durai. The company designs interiors and manufactures doors and custom furniture. SRI LAXMI: CRISIL Lowers Rating on INR35MM Loan to D ---------------------------------------------------- CRISIL has downgraded its ratings on bank facilities of Sri Laxmi Timbers Private Limited (SLTPL) to 'CRISIL D/CRISIL D' from CRISIL BB-/Stable/CRISIL A4+. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Letter of Credit 35 CRISIL D (Downgraded from 'CRISIL A4+') Overdraft 2.7 CRISIL D (Downgraded from 'CRISIL A4+') Proposed Long Term .3 CRISIL D (Downgraded from Bank Loan Facility 'CRISIL BB-/Stable') The downgrade reflects delays by the company in servicing of interest and devolvement of letter of credit because of stretched debtors. The rating also reflects below-average financial risk profile and working capital intensive operations. These weaknesses are partially offset by extensive experience of promoters. Key Rating Drivers & Detailed Description Weakness * Working capital intensive operations: SLTPL's operations have been working capital intensive with high GCA days around 300 days owing to high receivables. *Below-average financial risk profile: Capital structure is weak with TOL/ANW of around 3 times and subdued debt protection metrics with interest coverage ratio of around 1.5 times. Further, stretched debtors has led to LC devolvement. Strengths *Extensive promoters Experience: Presence of over three decades in trading of teak wood has enabled promoter to establish strong relationship with customers and suppliers. SLTPL was incorporated in 2010 by Mr. Dinesh Patel and his wife Mrs. Kalpana Patel. The company is engaged in trading of timber, majorly teak wood. The company is based of Pondicherry. SRI VENKATA: CRISIL Migrates B Rating to Not Cooperating Category ----------------------------------------------------------------- CRISIL has migrated the rating on bank facility of Sri Venkata Sai Agencies (SVSA) to CRISIL B/Stable Issuer not cooperating'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Key Cash Credit 10 CRISIL B/Stable (Issuer Not Cooperating; Rating Migrated) CRISIL has been consistently following up with SVSA for obtaining information through letters and emails dated April 26, 2018, May 16, 2018 and May 21, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. '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 Venkata Sai Agencies, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on Sri Venkata Sai Agencies is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' category or lower'. Therefore, on account of inadequate information and lack of management cooperation, CRISIL has migrated the rating on bank facility of Sri Venkata Sai Agencies to CRISIL B/Stable Issuer not cooperating'. Rajam Srikakulam, Andhra Pradesh-based SVSA is a proprietorship firm set up in 2015 by Mr Surya Prasad. It trades in pulses, jute and waste paper. SRI VENKATESWARA: CRISIL Migrates B Rating to Not Cooperating ------------------------------------------------------------- CRISIL has migrated the rating on bank facilities of Sri Venkateswara & Company - Tenkasi (SVC) to 'CRISIL B/Stable/CRISIL A4 Issuer not cooperating'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 0.2 CRISIL B/Stable (Issuer Not Cooperating; Rating Migrated) Foreign Letter 21.0 CRISIL A4 (Issuer Not of Credit Cooperating; Rating Migrated) Proposed Long Term 3.8 CRISIL B/Stable (Issuer Not Bank Loan Facility Cooperating; Rating Migrated) CRISIL has been consistently following up with SVC for obtaining information through letters and emails dated April 12, 2018, May 14, 2018, May 14, 2018 and May 21, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. 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 Venkateswara & Company - Tenkasi. Which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on Sri Venkateswara & Company - Tenkasi 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 Venkateswara & Company - Tenkasi to 'CRISIL B/Stable/CRISIL A4 Issuer not cooperating'. SVC processes (cuts and saws) and trades in wood logs. The firm processes a variety of wood, including teak. SUYOG DEVELOPMENT: CRISIL Migrates B+ Rating to Not Cooperating --------------------------------------------------------------- CRISIL has migrated the rating on bank facilities of Suyog Development Corporation Limited (SDCL) to 'CRISIL B+/Stable Issuer not cooperating'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Proposed Long Term 24.75 CRISIL B+/Stable (Issuer Not Bank Loan Facility Cooperating; Rating Migrated) Term Loan 17.25 CRISIL B+/Stable (Issuer Not Cooperating; Rating Migrated) CRISIL has been consistently following up with SDCL for obtaining information through letters and emails dated February 28, 2018, May 11, 2018 and May 16, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. 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 Suyog Development Corporation Limited. Which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on Suyog Development Corporation 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 Suyog Development Corporation Limited to 'CRISIL B+/Stable Issuer not cooperating'. SDCL, established in 2004, is a part of the Pune, Maharashtra- based Suyog group, promoted by Mr Bharat Shah. The company undertakes residential and commercial real estate development, primarily in Pune. It is presently executing two projects, Suyog Center (commercial complex) and Suyog Nisarg (residential-cum- commercial complex). SUPER OVERSEAS: Ind-Ra Migrates BB+ LT Rating to Non-Cooperating ---------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated Super Overseas Private Limited's Long-Term Issuer Rating to the non-cooperating category. The issuer did not participate in the rating exercise, despite continuous requests and follow-ups by the agency. Therefore, investors and other users are advised to take appropriate caution while using these ratings. The rating will now appear as 'IND BB+ (ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating actions are: -- INR15.68 mil. Term loan due on June 2019 migrated to non- cooperating category with IND BB+ (ISSUER NOT COOPERATING) rating; and -- INR80 mil. Fund-based working capital limit Migrated to non- cooperating category IND BB+ (ISSUER NOT COOPERATING)/ IND A4+ (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on June 1, 2017. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. COMPANY PROFILE Super Overseas manufactures readymade garments in Noida and exports 100% of its products to the US, the UK and Europe. TAMILNADU STATE: CRISIL Migrates B- Rating to Not Cooperating ------------------------------------------------------------- CRISIL has migrated the rating on bank facilities of Tamilnadu State Transport Corporation (kumbakonam) Limited (TNSTC) to 'CRISIL B-/Stable Issuer not cooperating'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 13 CRISIL B-/Stable (Issuer Not Cooperating; Rating Migrated) CRISIL has been consistently following up with TNSTC for obtaining information through letters and emails dated April 12, 2018, May 14, 2018 and May 21, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. 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 Tamilnadu State Transport Corporation (kumbakonam) Limited. Which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on Tamilnadu State Transport Corporation (kumbakonam) 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 Tamilnadu State Transport Corporation (kumbakonam) Limited to 'CRISIL B-/Stable Issuer not cooperating'. TNSTC is a corporation, fully-owned by GoTN, providing inter-city and intra-city bus transport facilities. TNSTC operates bus transport services in and around Kumbakonam and to other districts of Tamil Nadu. V. M. STAR: CRISIL Migrates D Rating to Not Cooperating Category ---------------------------------------------------------------- CRISIL has migrated the rating on bank facilities of V. M. Star (VM) to 'CRISIL D Issuer not cooperating'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bill Purchase- 15 CRISIL D (Issuer Not Discounting Cooperating; Rating Migrated) Facility CRISIL has been consistently following up with V. M. Star (VM) for obtaining information through letters and emails dated February 9, 2018, April 19, 2018, May 11, 2018 and May 16, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. 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 V. M. Star. Which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on V. M. Star 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 V. M. Star 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. Set up as a partnership firm in 1993 in Mumbai by Mr. Mahesh Adani and Mr. Vasant Doshi, VM trades in diamonds. VNC INFRAPROJECTS: CRISIL Migrates Ratings to B Stable ------------------------------------------------------ Due to inadequate information, CRISIL in line with SEBI guidelines had migrated the rating of VNC Infraprojects (VNC; a part of the Mahavir VNC group) to 'CRISIL B+/Stable/CRISIL A4/Issuer Not Cooperating'. However, the management has subsequently started sharing requisite information, necessary for carrying out comprehensive review of rating. Consequently CRISIL is migrating the ratings on the bank facilities of VNC from 'CRISIL B+/Stable/CRISIL A4/Issuer Not Cooperating' to 'CRISIL B/Stable/CRISIL A4' Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 3 CRISIL A4 (Migrated from 'CRISIL A4' Issuer Not Cooperating) Cash Credit 1.5 CRISIL B/Stable (Migrated from 'CRISIL B+/Stable' Issuer Not Cooperating) Proposed Long Term 18.0 CRISIL B/Stable (Migrated from Bank Loan Facility 'CRISIL B+/Stable' Issuer Not Cooperating) The ratings continue to reflect the group's weak financial risk profile because of modest networth and high gearing. The ratings also factor in susceptibility of the revenue profile to high customer concentration in the order book. These weaknesses are partially offset by extensive experience of the proprietors in the road construction industry. Analytical Approach For arriving at the ratings, CRISIL has consolidated the business and financial risk profiles of VNC with its group entity - Mahavir Construction Company (MCC). This is because both these entities - together referred to as the Mahavir VNC group -- execute the same line of business. Key Rating Drivers & Detailed Description Weaknesses * Weak financial risk profile because of modest networth and high gearing: The group had a modest net worth of INR7.5 crores as on March 31, 2018. The gearing levels also were high estimated at 4.08 times as on March 31st 2018. * Susceptibility of the revenue profile to high customer concentration in the order book: Group currently has a healthy order book out of which maximum is contributed by orders from MCGM and MMRDA. This not only makes group's revenues vulnerable to progress on these projects but also exposes the business to higher counterparty risks. Delays in these projects may significantly alter group's credit risk profile. Strengths * Extensive experience of the proprietor in the civil construction industry: The business risk profile of group benefits from the extensive experience of the proprietors in the civil construction industry. Group is promoted by Shah and Jain Family and has experience of 3 decades. Outlook: Stable CRISIL believes the group will continue to benefit over the medium term from the proprietors' extensive experience. The outlook may be revised to 'Positive' if sharp growth in revenue and profitability along with stable working capital management or capital infusion strengthen the capital structure. Conversely, the outlook may be revised to 'Negative' if lower-than-expected revenue or profitability, large debt-funded capital expenditure or stretched working capital cycle weakens financial risk profile, particularly liquidity. VNC is a Mumbai-based proprietorship firm formed by Mr Chirag Jain in 2008. VNC undertakes civil construction activities on contract or sub contract basis for MCGM, MMRDA, and MHADA. MCC is a Mumbai-based proprietorship firm formed by Mr Kishore Shah in 1983. It undertakes civil construction activities on contract or sub contract basis for Municipal Corporation of Greater Mumbai (MCGM), Mumbai Metropolitan Region Development Authority (MMRDA) and Maharashtra Housing and Area Development Authority (MHADA). ========= J A P A N ========= SHARP CORP: S&P Hikes Corp Credit Rating to BB-; Outlook Positive ----------------------------------------------------------------- S&P Global Ratings said it has raised one notch to 'BB-' from 'B+' its long-term corporate credit and senior unsecured debt ratings on Japan-based electronics maker Sharp Corp. S&P said, "We have affirmed our 'B' short-term corporate credit and commercial paper program ratings on the company. At the same time, we have also raised to 'BB-' from 'B+' the long-term corporate credit rating on Sharp International Finance (U.K.) PLC and affirmed the 'B' short-term corporate credit and commercial paper program ratings on the overseas subsidiary. The outlook on the long-term corporate credit ratings on both entities is positive." S&P said, "The upgrade reflects our view that Sharp's earnings and cash flows are likely to continue to recover gradually in the next year or two thanks to the company's steps to stabilize earnings in its main liquid crystal display (LCD) business. In addition, key financial ratios for the company have improved far beyond our assumptions and are likely to keep improving, supported by Sharp's efforts to strengthen its ability to generate cash flows, in our view." Sharp's main LCD business benefits from a strategic shift in product mix to medium-size LCD panels, which have relatively wider applications, and away from small panels, which rely heavily on the smartphone market. Sharp is likely to somewhat stabilize the business' ability to generate earnings, in contrast to peers struggling with flagging earnings in their respective LCD businesses. Nevertheless, the LCD business continues to face a potentially high risk of fluctuations in earnings because it is susceptible to short-term cycles of demand and supply in the market, competition with well-funded South Korean manufacturers and expanding Chinese makers is fierce, and organic electroluminescent displays might displace small LCD panels. Sharp can take full advantage of Taiwan-based parent Hon Hai Precision Industry Co. Ltd.'s (A-/Positive/--) supply chain, and it engages in relatively stable businesses, such as office equipment and home appliances. Still, it would be difficult for Sharp to absorb earnings fluctuations in its LCD business. In addition, its camera module and electronic device businesses, other areas of focus for Sharp, are also highly susceptible to market cycles. Accordingly, S&P continues to assess Sharp's business risk profile as weak. S&P said, "Key financial ratios for Sharp improved far beyond our assumptions in fiscal 2017 (ended March 31, 2018) as its main LCD business recovered. We think the ratios are likely to continue improving, supported by its efforts to bolster its cash flows. The company's degree of capital intensity is likely to decline because use of Hon Hai's production sites has lessened the need for capital expenditures, in our view. As a result, we expect Sharp to divert funds toward small-lot business investments in the coming year or two, such as to enhance its brand and expand its marketing network. Even so, we believe Sharp can strengthen its financial standing while maintaining ample cash and deposits. We estimate its ratio of debt to EBITDA was about mid-5x as of March 31, 2018, a drastic recovery from 7.1x a year earlier. The ratio is likely to improve further to 4x-5x in fiscals 2018 and 2019. Accordingly, we assess Sharp's financial risk profile as aggressive. "We assess Sharp's liquidity as adequate. The assessment reflects our view that its financing has become less reliant on support from financial institutions as its operating performance has stabilized and its financial standing has improved. "The positive outlook reflects our view that key financial ratios for Sharp are highly likely to improve materially within a year if its ability to generate earnings stays on track to recovery and it buys back preferred shares with funds raised in a public offering of new common shares. "We might upgrade Sharp if its ability to generate earnings stays on track to recovery and we determine it can sustain debt to EBITDA of below 4x having pushed the ratio under that threshold using funds raised in a public offering of new common shares to buy back preferred shares, all of which we regard as debt. Conversely, we might revise the outlook to stable if we see a heightened likelihood Sharp's debt to EBITDA would remain at 4x or above. This could occur in the event it is unable to buy back preferred shares using a public offering or if its EBITDA plunges as a result of a steep decline in the market for LCDs. "We equalize our senior unsecured debt rating on Sharp with our long-term corporate credit rating on Sharp. We estimate the company's secured debt, which has higher priority than its senior unsecured debt, continues to account for a large proportion of more than 50% of Sharp's total debt. Accordingly, we notch down the senior unsecured debt rating one notch from the long-term corporate credit rating. Meanwhile, we believe the company is likely to receive a waiver for borrowings from major creditor banks while continuing to pay other debt in a timely manner. Consequently, we incorporate one notch of uplift in the senior unsecured debt rating." RATINGS LIST Upgraded; Outlook Action; Ratings Affirmed To From Sharp Corp. Sharp International Finance (U.K.) PLC Corporate Credit Rating BB-/Positive/B B+/Stable/B Upgraded To From Sharp Corp. Senior Unsecured BB- B+ Ratings Affirmed Sharp Corp. Commercial Paper B Sharp International Finance (U.K.) PLC Commercial Paper B =============== M A L A Y S I A =============== SUMATEC RESOURCES: Confident of Business Outlook Despite PN17 ------------------------------------------------------------- The Sun Daily reports that Sumatec Resources Bhd is confident of its business operations despite falling into Practice Note 17 (PN17) status, said its vice chairman Tan Sri Halim Saad. "We are very confident of Sumatec's future based on our share price, oil price and the product that we have," he told reporters at its AGM on June 12, the Sun Daily relays. The Sun Daily relates Tan said the group is working on a regularisation plan that would address its PN17 status, legacy debt and its future business operations, and expects to submit it to Bursa Malaysia "very soon". He said the plan is being drafted based on the assumption of oil price at US$64 per barrel, the report relates. Earlier in March, Sumatec had received an offer from Markmore Energy (Labuan) Ltd (MELL) for the development of a condensate extraction plant, as well as an offer from a contractor for the development and financing of the oil field for up to US$20 million, the Sun Daily notes. Sumatec Resources Berhad offers services to the oil and natural gas industry. The Company offers engineering and construction services, offers marine transport services of oil, provides onshore drilling rigs and related equipment, stores oil, and explores and develops marginal oil fields. Sumatec also builds biomass fueled power plants, and explores and mines for metals. Sumatec Resources Bhd has been admitted into the Practice Note 17 (PN17) category after its external auditors Grant Thornton Malaysia's disclaimer opinion on its financial statements ended December 31, 2017. The auditors said Sumatec's ability to continue as going concern is dependent on a series of corporate exercises including a proposed acquisition of Markmore Energy (Labuan) Ltd (MELL) from its controlling stakeholder Tan Sri Halim Saad. ==================== N E W Z E A L A N D ==================== CBL CORP: NZ Shareholders Association Wary of Restructure --------------------------------------------------------- Paul McBeth at BusinessDesk reports that the New Zealand Shareholders Association wants to see the fine print of a restructuring plan put forward by CBL Corp directors Peter Harris and Alistair Hutchison, and is wary such a proposal could jeopardise legal remedies available in a liquidation. According to BusinessDesk, NZSA chief executive Michael Midgley said in a statement it was hard to establish whether the plan was achievable and appeared to relate only to the New Zealand unit of a much larger corporate entity. A High Court liquidation hearing was rescheduled from last week to let CBL stakeholders consider the available options for the insurer. "We need to see whether this is a viable proposition which would produce a meaningful outcome for the hundreds of investors affected," BusinessDesk quotes Mr. Midgley as saying. "We are concerned that any proposal may impact on the legal remedies available via liquidation, which, in the absence of any concrete proposals, remains our preferred outcome." Harris and Hutchison have proposed an initial restructuring plan that has been circulated to voluntary administrators KordaMentha with the objective that all CBL Corp creditors get paid in full, NZ insurance policyholders all get paid, and shareholders retain shares in the future business to give them some future value to their shares, according to the report. The end result would mean the two New Zealand entities would avoid liquidation, the report states. BusinessDesk relates that Mr. Midgely said the global scale of the business and apparently narrow terms for restructuring made it unclear how much value could be recovered. "That broader business is spread across the world where various countries have different regulators involved," Mr. Midgely, as cited by BusinessDesk, said. "This places formidable obstacles and costs in the way of recovery." BusinessDesk notes that the Auckland-based insurer had its stock suspended from the NZX on Feb. 8 amid concerns from NZX Regulation about the information it had given the market, following engagement between it, CBL, the Financial Markets Authority, the Reserve Bank, and a number of overseas regulators with prudential oversight of CBL's international insurance business. On Feb. 20, CBL Insurance told the Reserve Bank it was continuing to operate despite being below the minimum regulatory solvency level. About CBL Corp. Founded in 1973, CBL Corporation Limited (NZE: CBL), together with its subsidiaries, provides insurance and reinsurance products and services primarily in New Zealand. It offers financial risk products, builders' risks, sureties, guarantees, and contractor bonds primarily in Europe and Scandinavia; deposit guarantees in Australia; and bonding and fiduciary services to the Mexican commercial sector. The company also provides a range of specialty products, such as credit enhancement, surety bonds, specialized property insurance, aviation, and rural risk in Australia, as well as distributes construction-sector insurance products in France through a network of brokers. CBL Corp. went into voluntary administration in late February 2018, in a move to prevent other regulators from taking action after the Reserve Bank moved to have its subsidiary CBL Insurance placed in interim liquidation. On February 23, 2018, KordaMentha New Zealand partners Brendon Gibson and Neale Jackson were appointed Voluntary Administrators by the Board of CBL Corporation Ltd and certain of its subsidiaries. The administration relates to New Zealand-domiciled companies. Messrs. Gibson and Jackson are administrators to these CBL entities -- CBL Corporation Limited; LBC Holdings New Zealand Ltd; LBC Holdings Americas Ltd; LBC Holdings UK Ltd; LBC Holdings Europe Ltd; LBC Holdings Australasia Ltd; LBC Treasury Company Ltd; Deposit Power Ltd; South British Funding Ltd; and CBL Corporate Services Ltd. ================= S I N G A P O R E ================= CHINA FISHERY: Wants to Sell HK Golf Club Membership ---------------------------------------------------- BankruptcyData.com reported that China Fishery Group filed with the U.S. Bankruptcy Court a motion to sell property free and clear of liens and for an order establishing procedures to sell golf club memberships. The sale motion explains, "The Debtors are in the process of marketing a corporate membership at the Hong Kong Golf Club, memorialized by Certificate No. 1024 (the '1024 Membership'), and may market for sale another corporate membership at the Hong Kong Golf Club, memorialized by Certificate No. 1031 (the '1031 Membership' and, together with the 1024 Membership, the 'Golf Club Memberships,' and the proceeds arising from the sale of either Golf Club Membership, the 'Golf Club Proceeds'). There are no liens, mortgages, or encumbrances on the Golf Club Memberships. The Debtors intend to use the Golf Club Proceeds for payment of administrative expenses for the PAIH estate. There is a monthly subscription fee of approximately US$400 (HK$3,150) associated with each of the Golf Club Memberships. As is customary in Hong Kong, the Debtors do not retain a broker until the Debtors identify a buyer through the broker, at which time the Debtors officially retain the broker pursuant to a sale confirmation agreement between the Debtors and the broker (the 'Confirmation Agreement'). With the broker's assistance, the Debtors will then execute a sale and purchase agreement with the buyer (the 'Purchase Agreement'). Together, the Purchase Agreement and Confirmation Agreement would lay out the terms of a proposed Sale Transaction and the retention terms for the broker, including the commission fee, which typically constitutes 1% of the gross sale price for the Sale Transaction (the 'Purchase Price'). In addition, the Hong Kong Golf Club's approval is required to sell a membership at that club, and the Hong Kong Golf Club charges a transfer fee equal to the greater of 20% of the Purchase Price and the transfer fee for the last consummated transaction of a golf club membership at the Hong Kong Golf Club. Together with market information provided by the Hong Kong Golf Club, the Debtors have determined that an amount of not less than approximately US$2 million (HK$17 million) is a fair and reasonable Purchase Price for the 1024 Membership." The Court scheduled a June 19, 2018 hearing to consider the sale motion with objections due by June 12, 2018. About China Fishery Group Limited (Cayman) China Fishery Group Limited (Cayman) and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 16-11895) on June 30, 2016. In the petition signed by CEO Ng Puay Yee, China Fishery Group estimated its assets at $500 million to $1 billion and debt at $10 million to $50 million. The cases are assigned to Judge James L. Garrity Jr. Weil, Gotshal & Manges LLP has been tapped to serve as lead bankruptcy counsel for China Fishery and its affiliates other than CFG Peru Investments Pte. Limited (Singapore). Weil Gotshal replaces Meyer, Suozzi, English & Klein, P.C., the law firm initially hired by the Debtors. The Debtors have also tapped Klestadt Winters Jureller Southard & Stevens, LLP, as conflict counsel; Goldin Associates, LLC, as financial advisor; RSR Consulting LLC as restructuring consultant; and Epiq Bankruptcy Solutions, LLC, as administrative agent. Kwok Yih & Chan serves as special counsel. On Nov. 10, 2016, William Brandt, Jr., was appointed as Chapter 11 trustee for CFG Peru Investments Pte. Limited (Singapore), one of the Debtors. Skadden, Arps, Slate, Meagher & Flom LLP serves as the trustee's bankruptcy counsel; Hogan Lovells US LLP serves as special counsel; and Quinn Emanuel Urquhart & Sullivan, LLP, serves as special litigation counsel. HYFLUX LTD: Receives Notice of Default From Perps Trustee --------------------------------------------------------- Marissa Lee at The Business Times reports that Hyflux Ltd said on June 11 that it has been notified by the trustee for its SGD500 million 6 per cent perpetual securities that its failure to pay last month's coupon has resulted in an event of default. This tranche of perps has a first call date on May 27, 2020, the report says. A default has occurred since Hyflux did not pay perp holders a coupon last month, choosing instead to start a debt restructuring process, BT relates. Since a default has occurred, the trustee can institute proceedings for Hyflux to be wound up if it gets the mandate of perp holders to do so, the report states. The trustee has informed Hyflux that it reserves this right and the rights of perp holders in this regard. BT relates that the trustee also said it has taken note that in the view of Hyflux, the company has been protected by a 30-day moratorium on creditors' claims since May 22. Hyflux said it will continue to engage with the perpetual trustee, adds BT. About Hyflux Singapore-based Hyflux Ltd -- https://www.hyflux.com/ -- provides various solutions in water and energy areas worldwide. The company operates through two segments, Municipal and Industrial. The Municipal segment supplies a range of infrastructure solutions, including water, power, and waste-to-energy to municipalities and governments. The Industrial segment supplies infrastructure solutions for water to industrial customers. As reported in the Troubled Company Reporter-Asia Pacific on May 24, 2018, Hyflux Ltd. said that the Company and five of its subsidiaries, namely Hydrochem (S) Pte Ltd, Hyflux Engineering Pte Ltd, Hyflux Membrane Manufacturing (S) Pte. Ltd., Hyflux Innovation Centre Pte. Ltd. and Tuaspring Pte. Ltd. have applied to the High Court of the Republic of Singapore pursuant to Section 211B(1) of the Singapore Companies Act to commence a court supervised process to reorganize their liabilities and businesses. The Company said it is taking this step in order to protect the value of its businesses while it reorganises its liabilities. The Company has engaged WongPartnership LLP as legal advisors and Ernst & Young Solutions LLP as financial advisors in this process. ================ S R I L A N K A ================ SRI LANKA TELECOM: S&P Affirms 'B+' Long-Term ICR, Outlook Stable ----------------------------------------------------------------- S&P Global Ratings affirmed its 'B+' long-term issuer credit rating on Sri Lanka Telecom PLC (SLT). The outlook is stable. SLT is Sri Lanka's second-largest integrated telecom service provider. S&P said, "We affirmed the ratings on SLT because we believe the sovereign credit rating on Sri Lanka (B+/Stable/B) continues to constrain the rating on the company. "We expect SLT's stable operating cash flows to offset a deterioration in the company's leverage. We therefore continue to assess the company's stand-alone credit profile (SACP) at 'bb+'. "SLT's growth in the broadband data business and good market position should support its operating cash flows over the next two years. We view SLT's established brand presence, leadership in the fixed-line telephony business, and network coverage as favorable factors for its operations. The company should therefore be able to defend its good market position in Sri Lanka's highly competitive telecom market ahead of the proposed merger of Etisalat Lanka (Pvt.) Ltd. and Hutchison Telecommunications Lanka (Private) Ltd. Moreover, we expect industry consolidation to somewhat ease competitive pressures and favor growth prospects of larger incumbents such as SLT." SLT's capital expenditure is likely to remain high in 2018 before gradually declining in 2019. Many of the company's projects to strengthen the country's data infrastructure are likely to near completion in 2018, resulting in lower spending from 2019. S&P said, "We expect SLT to continue to partly debt-finance its capital expenditure. The company debt should therefore stay elevated at Sri Lankan rupee (LKR) 48 billion-LKR50 billion in 2018 before gradually declining to LKR45 billion-LKR47 billion in 2019. The debt is higher than our earlier expectations of LKR40 billion-LKR45 billion over this period. "In our view, high domestic interest rates will weigh on SLT's cash flows over the next three years. Given SLT's declining international revenues and a depreciating rupee, we expect the company to primarily rely on higher-cost local currency debt to meet its funding requirements, as witnessed in 2017. SLT raised about LKR14 billion in local currency debt during 2017 to fund its capital expenditure and part-refinance foreign currency borrowings. The higher cost of such borrowings weighed on the company ratio of funds from operations (FFO) to debt, which declined to 41% in 2017, from 51% a year ago. "We expect SLT's earnings to remain resilient to changes in technology and Sri Lanka's shift to a data-driven telecom market at the expense of voice. We estimate that the company's FFO-to- debt ratio would improve to 40%-45% over 2019-2020. This ratio is lower than our earlier expectation of more than 45%. We have therefore revised our assessment of SLT's financial risk profile to intermediate from modest. "The stable outlook on SLT over the next 12-24 months reflects our outlook on the sovereign credit rating on Sri Lanka. "We could lower our rating on SLT if we lower the sovereign credit rating on Sri Lanka. "We are unlikely to lower the rating on SLT even if the company's operating and financial performance deteriorates. That's because the SACP is three notches above the issuer credit rating. However, we may lower the SACP by one notch if SLT's ratio of FFO to debt approaches 35% sustainably. This could happen if the company continues to incur high capital expenditure or if its operating performance weakens considerably. "We could upgrade SLT if we raise the sovereign credit rating on Sri Lanka." ********* 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 ***