/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/180622.mbx T R O U B L E D C O M P A N Y R E P O R T E R A S I A P A C I F I C Friday, June 22, 2018, Vol. 21, No. 123 Headlines A U S T R A L I A ALLANS BILLY: Placed Into Voluntary Administration CCS EQUIPMENT: First Creditors' Meeting Set for June 29 JD BUILDING: Second Creditors' Meeting Set for June 27 LITTLE SINGAPORE: Second Creditors' Meeting Set for June 25 MCLAREN KNIGHT: ASIC Cancels Cairns Liquidator's Registration NETEAST TECHNOLOGY: Second Creditors' Meeting Set for June 25 PACILLO LOGISTICS: First Creditors' Meeting Set for June 29 TELSTRA CORP: Plans to Slash 8,000 Jobs and Cut AUD1BB in Costs WARAPAR RESOURCES: First Creditors' Meeting Set for June 28 WOODHILL JOINERY: First Creditors' Meeting Set for June 29 B A N G L A D E S H BRAC BANK: Moody's Assigns Ba3 Long-Term Counterparty Risk Rating C H I N A JIANGSU NANTONG: S&P Withdraws B- Long-Term Issuer Credit Rating ZHENRO PROPERTIES: Moody's Rates Proposed Sr. Unsec. Notes 'B3' I N D I A ADDICA INDUSTRIES: ICRA Assigns B+ Rating to INR12cr Loan ALAMELUBALAJI SPINNING: CRISIL Ups Rating on INR14.45cr Loan to B AMBEY METALLIC: ICRA Withdraws B+ Rating on INR5.65cr Loan AMBIKA REALCON: Ind-Ra Assigns BB- Issuer Rating, Outlook Stable ANIL KUMAR: CRISIL Lowers Rating on INR8.5cr Cash Loan to D AVNI ENERGY: ICRA Moves D Rating to Not Cooperating Category BHOPAL MOTORS: CRISIL Reaffirms B+ Rating on INR13.85cr Loan DEBOGRAM AGRO: CRISIL Reaffirms B Rating on INR12cr LT Loan DHANRAJ JEWELLERS: Ind-Ra Maintains B+ Rating in Non-Cooperating DIASQUA INDIA: CRISIL Reaffirms B+ Rating on INR7.5cr Loan DUTTA AGRO: CRISIL Assigns 'D' Rating to INR5.50cr LT Loan F3 MARINE: CARE Assigns B+ Rating to INR20cr Long-Term Loan GOLDEN JUBILEE: Billionaire Seeks Waiver to Bid for Hotel GOVIND CABLE: ICRA Maintains B Rating in Not Cooperating Cat. GULATI METAL: CRISIL Assigns B+ Rating to INR10cr Cash Loan JOY GURU: CARE Assigns 'B' Rating to INR8.0cr Long-Term Loan KAVIT INDUSTRIES: CRISIL Lowers Rating on INR5cr Cash Loan to D KKRISHNA VAAHAN: CRISIL Hikes Rating on INR25.5cr Loan to B LEXUS MOTORS: ICRA Reaffirms B+ Rating on INR85cr Loan LICHCHHWI FOOD: Ind-Ra Lowers LongTerm Issuer Rating to 'D' LUTHFA FOUNDATION: CRISIL Migrates B- Rating to Not Cooperating MAHASHAKTI COLD: CARE Assigns B+ Rating to INR7.30cr LT Loan MB POWER: Ind-Ra Moves 'BB' Debt Facility Rating to Non-Coop. OSIA JEWELS: CRISIL Lowers Rating on INR12.5cr Proposed Loan to D PARAMOUNT CHEMPRO: CARE Assigns B+ Rating to INR7cr LT Loan PRATHISHTA BUSINESS: Ind-Ra Moves 'D' Rating to Non-Cooperating REGAAL RESOURCES: CRISIL Reaffirms B+ Rating on INR40cr Loan RUCHI SOYA: Patanjali Seeks More Info on Adani Wilmar's Bid SAI SWADHIN: CARE Assigns B Rating to INR7.64cr Long-Term Loan SANAA DISTRIBUTORS: CRISIL Withdraws B Rating on INR10cr Loan SAVANI INFRACON: CARE Assigns B+ Rating to INR25cr LT Loan SIDDHAM JEWELS: CRISIL Cuts Rating on INR5cr Cash Loan to D SIVAPARAMESH SPINNING: CRISIL Moves B+ Rating From Not Coop. STORK FERRO: CRISIL Assigns B+ Rating to INR28cr Cash Loan SUNREN INDUSTRIES: CRISIL Assigns B+ Rating to INR4.25cr Loan SUPER SHIV: CRISIL Withdraws D Rating on INR21.25cr Loan SUPER-TECH PLASTPACK: CRISIL Assigns B Rating to INR4.9cr Loan T LINE: CRISIL Reaffirms 'B' Rating on INR5.0cr Cash Loan N E W Z E A L A N D INMOTION GROUP: ManaBus and Naked Bus to Cease Operations P A K I S T A N PAKISTAN: Moody's Alters Outlook to Neg., Affirms B3 Ratings S I N G A P O R E CW GROUP: Unable to Redeem SGD Bonds; Faces Statutory Demands - - - - - ================= A U S T R A L I A ================= ALLANS BILLY: Placed Into Voluntary Administration -------------------------------------------------- Allans Billy Hyde Pty Ltd and Gallin's Musicians Pro Shop Pty Ltd, one of Australia's leading music retailers, was placed into Voluntary Administration on June 20. Ferrier Hodgson partners John Lindholm and George Georges were appointed Voluntary Administrators by the company's director. Administrator John Lindholm said it was too early to identify the primary causes of the company's current financial position, however cited the difficult conditions in the music industry as a contributing factor. Mr. Lindholm said the business was well stocked while the Administrators consider the restructuring and realisation opportunities. "Allans Billy Hyde and Gallin's are an iconic Australian music retailer, offering a wide range of musical instruments (including guitars, amplifiers, pianos, keyboards and drums)," Mr. Lindholm said. "We are immediately calling for expressions of interest for a sale of the business as a going concern." Mr. Lindholm said that employees will continue to be paid normally by the Administrators. Allans was established in the 1850's, Billy Hyde in 1918 and Gallin's in 1989. The Group currently has 2 stores in Victoria. CCS EQUIPMENT: First Creditors' Meeting Set for June 29 ------------------------------------------------------- A first meeting of the creditors in the proceedings of CCS Equipment Pty Ltd will be held at Australian Institute of Company Directors, Level 1, 77 St Georges Terrace (Allendale Square), in Perth, WA, on June 29, 2018, at 10:00 a.m. Cameron Shaw and Richard Albarran of Hall Chadwick were appointed as administrators of CCS Equipment on June 19, 2018. JD BUILDING: Second Creditors' Meeting Set for June 27 ------------------------------------------------------ A second meeting of creditors in the proceedings of JD Building Products Pty Ltd has been set for June 27, 2018, at 4:00 p.m. at the offices of BPS Recovery, Level 18, 201 Kent 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 26, 2018, at 4:00 p.m. Mitchell Warren Ball of BPS Recovery was appointed as administrator of JD Building on May 22, 2018. LITTLE SINGAPORE: Second Creditors' Meeting Set for June 25 ----------------------------------------------------------- A second meeting of creditors in the proceedings of Little Singapore Pty Ltd has been set for June 25, 2018, at 11:00 a.m. at the offices of SV Partners, 22 Market 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 22, 2018, at 4:00 p.m. Anne Meagher of SV Partners was appointed as administrator of on May 14, 2018. MCLAREN KNIGHT: ASIC Cancels Cairns Liquidator's Registration ------------------------------------------------------------- The registration of Mr. Justin James Cadman as a registered liquidator was cancelled on June 13, 2018, following orders made on June 8, 2018 in the Federal Circuit Court of Australia, which resulted in Mr. Cadman being declared bankrupt (an insolvent under administration). On June 19, 2018, ASIC appointed replacement liquidators to the fifteen (15) vacant external administrations previously administered by Mr. Cadman. ASIC Commissioner John Price said, 'ASIC has moved quickly to exercise the new powers under the insolvency regime to appoint a replacement liquidator and appreciates the assistance of the replacement liquidators Ms. Moira Carter -- mcarter@brifnq.com.au -- of BRI Ferrier NQ and Mr. Todd Kelly -- todd.kelly@bdo.com.au -- of BDO (Nth QLD).' Below is a list of the external administrations and replacement liquidator's contact details should creditors have any concerns. Ms. Moira Carter of BRI Ferrier NQ Phone (07) 4037 7000 Australian Vocational Learning Institute Pty Ltd ACN 097 453 828 Cairns Accident Repair Centre Pty Ltd ACN 077 729 367 Medisurg Pty Ltd ACN 113 077 982 MOJB Pty Ltd ACN 128 137 806 Phone Hospital Pty Limited ACN 112 320 386 Sinopoli Holdings Pty Limited ACN 107 341 499 Zanzoo Tiles Pty Ltd ACN 142 521 695 Mr. Todd Kelly of BDO (Nth QLD) Phone (07) 4046 0000 Aborigines and Islanders Alcohol Relief Service Ltd ACN 010 064 374 Margach Builders Pty Ltd ACN 078 363 729 Barrier Leasing Pty Ltd ACN 104 014 002 Barrier Air Charter Pty Ltd ACN 108 788 147 Barrier Air Services Pty Ltd ACN 104 014 011 Barrier Aviation Pty Ltd ACN 056 643 531 Davryl Holdings Pty Ltd ACN 108 502 165 Lip-Air Pty Limited ACN 068 117 537 Cairns-based Mr. Cadman operated an insolvency and accounting practice firstly through a company called Mclaren Knight Pty Ltd (in liquidation), then later through another company called Mclaren Knight International Pty Ltd. Mr. Cadman had been a registered liquidator since August 2005. Blair Pleash and Glenn Shannon of Hall Chadwick were appointed as administrators of Mclaren Knight on March 30, 2017. NETEAST TECHNOLOGY: Second Creditors' Meeting Set for June 25 ------------------------------------------------------------- A second meeting of creditors in the proceedings of Neteast Technology Australia Pty Ltd has been set for June 25, 2018, at 11:00 a.m. at the offices of SV Partners, 22 Market 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 22, 2018, at 4:00 p.m. David Michael Stimpson of SV Partners was appointed as administrator of Neteast Technology on May 15, 2018. PACILLO LOGISTICS: First Creditors' Meeting Set for June 29 ----------------------------------------------------------- A first meeting of the creditors in the proceedings of Pacillo Logistics Pty Ltd will be held at the offices of BRI Ferrier (SA) Level 4, 12 Pirie Street, in Adelaide, SA, on June 29, 2018, at 11:00 a.m. Stuart Otway and Alan Scott of BRI Ferrier were appointed as administrators of Pacillo Logistics on June 19, 2018. TELSTRA CORP: Plans to Slash 8,000 Jobs and Cut AUD1BB in Costs --------------------------------------------------------------- Dominic Powell at SmartCompany reports that Telstra on June 20 revealed it would be axing over 8,000 jobs and reducing its number of plans from 1,800 to just 20 as part of a widespread cost-cutting and simplification strategy called "Telstra2022". SmartCompany says the strategy will have four "key pillars", focused around simplifying product offerings, a stripping-down of Telstra's organisational structure, a AUD2 billion strengthening of its asset sheet, and a new wholly-owned standalone business to deal with its infrastructure services called Telstra InfraCo. The whopping 8,000 employees set to lose their jobs will be largely members of middle management, with the company saying one-in-four executive and middle management positions were set to be shelved, SmartCompany relates. "The rate and pace of change in our industry is increasingly driven by technological innovation and competition. In this environment traditional companies that do not respond are most at risk. We have worked hard preparing Telstra for this market dynamic while ensuring we did not act precipitously," the report quotes Telstra chief executive officer Andrew Penn as saying in a statement. "However, we are now at a tipping point where we must act more boldly if we are to continue to be the nation's leading telecommunications company." In news that will likely affect a large chunk of Australia's two million plus small business owners, a key tenet of the telco's new restructuring involves a hefty simplification of its mobile and internet plans, with the company retiring its 1,800-plus consumer and small business plans, according to SmartCompany. Instead, it will replace them with just 20 core plans "backed up by an effortless digital service that removes complexity and provides cost certainty". This will be kicked off in July with a new "peace of mind" data offering, giving customers additional data services capped at a speed of 1.5 megabits per second after their data runs out, the report relays. According to SmartCompany, the restructure will also aim to reduce the amount that small businesses have to contact Telstra with enquiries, something group executive of consumer and small business Vicki Brady said in a blog post Telstra knows "frustrates" customers. This will be done through a revamp of Telstra's legacy systems, removing "legacy systems, manual processes and numerous screens" with a set of new digital tools, the report relates. "We expect the number of customer service calls we receive will go down by around a third within two years," the report quotes Ms. Brady as saying. SmartCompany says Telstra is also launching a new bundle for small business customers called Connected Workplace, which will package up voice/video calling, collaboration, and messaging, on a private network with "embedded security". "It will bring enterprise-grade technology to small and medium- sized companies to allow them to focus on running their business and less time on their technology," she said. The deal was received poorly by the market, with Telstra shares dropping 7.4% to a seven-year low of AUD2.695 upon the announcement, SmartCompany adds. Telstra Corporation Limited -- https://www.telstra.com.au/ -- provides telecommunications and information services to businesses, governments, communities, and individuals in Australia and internationally. The company conducts its operations through Telstra Retail, Global Enterprise and Services, Telstra Wholesale, and Telstra Operations segments. It offers telecommunication products, services, and solutions across mobiles, fixed and mobile broadband, telephony and pay television/Internet protocol television, and digital content; online self-service capabilities, such as browsing, buying, billing, and service requests; and sales and contract management services. The company also operates inbound and outbound call centers, owned and licensed Telstra shops, and the Telstra dealership network; and develops industry vertical solutions. WARAPAR RESOURCES: First Creditors' Meeting Set for June 28 ----------------------------------------------------------- A first meeting of the creditors in the proceedings of Warapar Resources Pty Ltd will be held at REGUS, Level 23, 127 Creek Street, in Brisbane, Queensland, on June 28, 2018, at 10:00 a.m. Christopher John Baskerville of Jirsch Sutherland was appointed as administrator of Warapar Resources on June 18, 2018. WOODHILL JOINERY: First Creditors' Meeting Set for June 29 ---------------------------------------------------------- A first meeting of the creditors in the proceedings of Woodhill Joinery Pty Ltd will be held at Level 12, 200 Crown Street, in Wollongong, NSW, on June 29, 2018, at 12:00 p.m. Darren John Vardy of SVP was appointed as administrator of Woodhill Joinery on June 19, 2018. =================== B A N G L A D E S H =================== BRAC BANK: Moody's Assigns Ba3 Long-Term Counterparty Risk Rating ----------------------------------------------------------------- Moody's Investors Service has assigned Counterparty Risk Ratings (CRRs) to five banks in Bangladesh: BRAC Bank Limited (Brac Bank, LT Bank Deposits (Foreign), B1 stable), Dutch-Bangla Bank Limited (DBBL, LT Bank Deposits (Foreign) B1 stable), The City Bank Limited, (CBL, LT Bank Deposits (Foreign) B1 stable), Mercantile Bank Ltd. (MBL, LT Bank Deposits (Foreign) B1 stable), and Eastern Bank Limited (EBL, LT Bank Deposits (Foreign) B1 stable). Moody's Counterparty Risk Ratings are opinions of the ability of entities to honour the uncollateralized portion of non-debt counterparty financial liabilities (CRR liabilities) and also reflect the expected financial losses in the event such liabilities are not honoured. CRR liabilities typically relate to transactions with unrelated parties. Examples of CRR liabilities include the uncollateralized portion of payables arising from derivatives transactions and the uncollateralized portion of liabilities under sale and repurchase agreements. CRRs are not applicable to funding commitments or other obligations associated with covered bonds, letters of credit, guarantees, servicer and trustee obligations, and other similar obligations that arise from a bank performing its essential operating functions. RATINGS RATIONALE Moody's said that the CRRs assigned to the five banks in Bangladesh are in line with the Counterparty Risk Assessments (CR Assessments) already assigned to these banks. Because Moody's considers Bangladesh not to have an operational resolution regime, in assigning CRRs to the banks in Bangladesh subject to this rating action, the rating agency applies its basic Loss Given Failure (LGF) approach. Moody's basic LGF analysis positions CRRs in line with the banks' CRAs, one notch above their adjusted Baseline Credit Assessments (BCAs). The CRRs of BRAC Bank, DBBL, CBL, MBL and EBL do not incorporate any uplift from government support, in line with that applied to the CRAs, given Moody's expectation of a moderate probability of government support. This reflects the banks' moderate systemic importance to Bangladesh, given their modest size. OUTLOOK CRR do not carry outlooks. FACTORS THAT COULD LEAD TO AN UPGRADE/DOWNGRADE For BRAC Bank, its BCA and ratings could be upgraded with an improvement in the bank's asset quality - to levels better than Moody's expects - which in turn leads to higher profitability by way of lower credit costs. In addition the BCA and the ratings could be upgraded if Bangladesh's sovereign rating is upgraded, and/or if there is an upward change in the sovereign bank deposit and bond ceilings. The BCA and ratings could be downgraded if some of the large accounts turn into non-performing loans, which would result in BRAC Bank's non-performing loan ratios deteriorating materially. Moreover, a decline in its net interest margins to levels lower than Moody's expects will lead to a reduction in profitability and put downward pressure on the bank's ratings. For DBBL, Moody's will consider upgrading DBBL's BCA if its capital levels improve significantly and if the bank is able to reduce the concentration risk in its loan book. The BCA and the ratings could be lowered if the bank's asset quality deteriorates. For CBL, its BCA and ratings could be upgraded if there is a better-than-expected improvement in asset quality, which in turn would lead to higher profitability from lower credit costs. In addition the BCA and the ratings could be upgraded if Bangladesh's sovereign rating is upgraded, and/or if there is an upward change in the sovereign bank deposit and bond ceilings. The BCA and the ratings could be downgraded if the bank's large accounts turn into nonperforming loans, and if there is a sharper-than-expected decline in the net interest margin. For MBL, its BCA and the ratings could be upgraded if the bank materially improves its Tangible Common Equity / Risk Weighted Assets (TCE/ RWA) ratio and decreases the level of problem and rescheduled loans. In addition the BCA and the ratings could be upgraded if Bangladesh's sovereign rating is upgraded, and/or if there is an upward change in the sovereign bank deposit and bond ceilings. The BCA and the ratings could be downgraded if solvency and liquidity metrics significantly deteriorate. For EBL, its BCA and ratings could be upgraded if there is a better-than-expected improvement in the bank's asset quality, which would lead to higher profitability by way of lower credit costs. In addition the BCA and the ratings could be upgraded if Bangladesh's sovereign rating is upgraded, and/or if there is an upward change in the sovereign bank deposit and bond ceilings. The BCA and the ratings could be downgraded if a few of the bank's large accounts turn into nonperforming loans which would lead to a considerable deterioration in its asset quality, and/or if there is sharper-than-expected decline in net interest margin. LIST OF ASSIGNED RATINGS BRAC Bank -- Local and foreign currency long-term Counterparty Risk Ratings of Ba3 Local and foreign currency short-term Counterparty Risk Ratings of NP DBBL -- Local and foreign currency long-term Counterparty Risk Ratings of Ba3 Local and foreign currency short-term Counterparty Risk Ratings of NP CBL -- Local and foreign currency long-term Counterparty Risk Ratings of Ba3 Local and foreign currency short-term Counterparty Risk Ratings of NP MBL -- Local and foreign currency long-term Counterparty Risk Ratings of B1 Local and foreign currency short-term Counterparty Risk Ratings of NP EBL -- Local and foreign currency long-term Counterparty Risk Ratings of Ba3 Local and foreign currency short-term Counterparty Risk Ratings of NP The principal methodology used in these ratings was Banks published in June 2018. ========= C H I N A ========= JIANGSU NANTONG: S&P Withdraws B- Long-Term Issuer Credit Rating ---------------------------------------------------------------- S&P Global Ratings withdrew its 'B-' long-term issuer credit rating on Jiangsu Nantong Sanjian Construction Group Co. Ltd. at the company's request. The outlook was stable at the time of the withdrawal. ZHENRO PROPERTIES: Moody's Rates Proposed Sr. Unsec. Notes 'B3' --------------------------------------------------------------- Moody's Investors Service has assigned a B3 rating to Zhenro Properties Group Limited's proposed senior unsecured USD notes. The rating outlook is stable. Zhenro plans to use the proceeds from the proposed notes mainly to refinance existing debt and for general corporate purposes. RATINGS RATIONALE "The proposed bond issuance will support Zhenro's liquidity profile and not materially affect its credit metrics, as it will use the proceeds mainly to refinance existing debt," says Cedric Lai, a Moody's Assistant Vice President and Analyst. Zhenro has a strong level of refinancing needs in 2018, as reflected in its reported short-term debt of RMB23 million at the end of 2017, including RMB2 billion in puttable bonds. The proposed bond issuance will help lengthen Zhenro's debt maturity profile. The B3 senior unsecured debt rating is one notch lower than the corporate family rating due to structural subordination risk. This risk reflects the fact that the majority of claims are at the operating subsidiaries and have priority over Zhenro's senior unsecured claims in a bankruptcy scenario. In addition, the holding company lacks significant mitigating factors for structural subordination. As a result, the likely recovery rate for claims at the holding company will be lower. Zhenro's B2 corporate family rating reflects the company's quality and geographically diversified land reserve, large scale, and strong sales execution. On the other hand, the rating is constrained by its weak financial metrics, as a result of its debt-funded rapid growth, weak liquidity position, and limited access to funding. Moody's expects that Zhenro's total contracted sales will continue to grow at an annual rate of 15%-20% for 2018 to around RMB80-RMB85 billion. Such a scale is larger than for most single B-rated Chinese property developers. Moody's also expects Zhenro's debt leverage - as measured by revenue/adjusted debt - to improve slightly to 50% in the next 12-18 months from 44% in 2017. Its adjusted EBIT/interest should register 2.0x from 1.8x over the same period. The stable rating outlook reflects Moody's expectation that over the next 12-18 months, Zhenro can execute its sales plan and maintain healthy profit margins and sufficient liquidity. Upward rating pressure could emerge, if Zhenro improves its contracted sales cash collection rate, liquidity position, debt leverage and interest coverage, while maintaining strong contracted sales growth. Credit metrics indicative of upward rating pressure include: (1) adjusted revenue/debt exceeding 60%-65%; (2) EBIT/interest above 2.5x; and (3) cash/short-term debt above 1.25x on a sustained basis. The rating could be downgraded if: (1) Zhenro fails to deleverage or its EBIT/interest coverage falls below 1.25x-1.50x, due to aggressive land acquisitions; (2) its contracted sales or revenues fall short of Moody's expectations; or (3) its liquidity position weakens or its cash/short-term debt falls below 0.8x on a sustained basis. The principal methodology used in this rating was Homebuilding And Property Development Industry published in January 2018. Zhenro Properties Group Limited was incorporated in the Cayman Islands in 2014 and listed on the Hong Kong Stock Exchange in January 2018. At the end of 2017, Zhenro had 91 projects in 18 cities. Its key operating cities include Shanghai, Nanjing, Fuzhou, Suzhou, Tianjin and Nanchang. The company was founded by Mr. Ou Zongrong, who indirectly owns 58.58% of Zhenro Properties. His sons, Mr. Ou Guowei and Mr. Ou Guoqiang - the sons of Mr. Ou Zongrong - together own 10.55% of the company. ========= I N D I A ========= ADDICA INDUSTRIES: ICRA Assigns B+ Rating to INR12cr Loan --------------------------------------------------------- ICRA has assigned the long-term rating of [ICRA]B+ to the INR10.20-crore term loan facility and the INR12.00-crore cash credit facility of Addica Industries LLP. ICRA has also assigned the short-term rating of [ICRA]A4 to the INR0.55-crore non-fund based bank facilities of Addica Industries. The outlook on the long-term rating is Stable. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund-based Term Loan 10.20 [ICRA]B+ (Stable); Assigned Fund-based Working Capital Facilities 12.00 [ICRA]B+ (Stable); Assigned Non-fund based Bank Guarantee 0.55 [ICRA]A4; Assigned Rationale The ratings remain constrained by the risks associated with the stabilisation of the plant as per the expected operating parameters. The assigned ratings also take into account the firm's financial risk profile, which is expected to remain moderate in the near term, given the debt-funded nature of the project and the impending debt repayments. The ratings are also constrained by the high industry competition and the vulnerability of the firm's profitability to adverse movements of key raw material prices. The assigned ratings, however, favorably factor in the experience of the key promoters in the plastic industry and the favorable demand outlook for the domestic flex banner sector owing to the extension of the anti-dumping duty on the import of Poly Vinyl Chloride (PVC) flex from China (till July 2021) by the Government of India. Outlook: Stable ICRA believes that Addica Industries will benefit from the experience of its promoters in the plastic industry. The outlook may be revised to Positive if timely implementation and stabilisation of operations lead to higher cash accrual during the initial phase. The outlook may be revised to Negative if delayed project implementation, and/or slower ramp-up in sales and accrual, or sizeable working capital requirement, weakens the financial risk profile, especially liquidity. Key rating drivers Credit strengths Experience of promoters in plastic industry: The key promoters, Mr. Pareshbhai Moradiya, Mr. Mehulbhai Bhoraniya, Mr. Dushyantbhai Aghara and Mr. Jitendra Kavar, have experience in the plastic industry through their association with other entities in the same industry. This experience will be helpful for the firm as it starts manufacturing PVC flex banner. Regulatory support through anti-dumping duty on imports: The extension of the anti-dumping duty by the Government of India on the import of PVC flex from China in August 2016 for another five years is likely to support the firm's business prospects in the near term. Credit challenges Risks associated with stabilisation and successful scale up of operations: Being in a nascent stage, with the unit yet to become fully operational (expected from April 2019), the firm remains exposed to risks associated with stabilisation and successful scale up of the plant's operations as per the expected parameters. The timely commissioning of operations without any significant cost over-runs would remain a key rating sensitivity. Moderate financial risk profile: The firm's financial profile is expected to remain moderate in the near term given the debt- funded nature of the project and the impending debt repayments, with an estimated gearing of 2.08 times and Total Debt/OPBDITA of 5.32 times for FY2020. High competition: The industry competition remains high because of low capital intensity and limited entry barriers. The firm faces competition from the already established players and also relatively newer players in both organised and unorganised segment of the domestic market. Profitability to remain susceptible to volatility in raw material prices and change in anti-dumping duty structure: The key raw materials used in the manufacturing of PVC flex are PVC resin, plasticisers and pigments among others. Most of these are crude- based derivatives and hence the firm's profitability remains exposed to adverse fluctuations in crude oil prices. Further, its profitability also remains susceptible to any changes in the anti-dumping duty structure on the import of flex banner from China. Incorporated in January 2018, Addica Industries LLP is a limited liability partnership firm promoted by Mr. Pareshbhai P. Moradiya, Mr. Mehulbhai M. Bhoraniya, Mr. Dushyantbhai B. Aghara and Mr. Jitendra R. Kavar along with 47 other partners. The firm plans to manufacture flex banner, which is used for indoor/outdoor advertisement. The firm will manufacture both front lit (lights pointing at the front of the banner) and back lit (translucent material; lights pointing at the back) banners. ALAMELUBALAJI SPINNING: CRISIL Ups Rating on INR14.45cr Loan to B ----------------------------------------------------------------- CRISIL is migrating the ratings of Alamelubalaji Spinning Mills Private Limited (ABSMPL) from 'CRISIL D Issuer Not Cooperating' to 'CRISIL B/Stable'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 14.45 CRISIL B/Stable (Migrated from 'CRISIL D Issuer Not Cooperating') Long Term Loan 3.00 CRISIL B/Stable (Migrated from 'CRISIL D Issuer Not Cooperating') Proposed Long Term 1.68 CRISIL B/Stable (Migrated from Bank Loan Facility 'CRISIL D Issuer Not Cooperating') Due to inadequate information and in line with the guidelines of Securities and Exchange Board of India, CRISIL had migrated the ratings on the bank facilities of ABSMPL to 'CRISIL D Issuer Not Cooperating' on January 30, 2018. However, the company's management has now shared information necessary for a comprehensive review of the ratings. Consequently, CRISIL is migrating the ratings from 'CRISIL D Issuer Not Cooperating' to 'CRISIL B/Stable'. The rating reflects timely servicing of instalments on term loans since the last six months supported by improved liquidity. The company's accruals was at Rs.2.5 crore in fiscal 2018 against repayment obligation of Rs.2 crore and the accruals are expected to be in the range of Rs.2.6 crore to Rs.2.8 crore against which it has a repayment obligation of Rs.1.2 crore. The rating also reflects ABSMPL's weak financial risk profile because of a highly leveraged capital structure, and modest scale of operations amid intense competition. These weaknesses are partially offset by the experience of its promoters in the textiles industry. Key Rating Drivers & Detailed Description Weaknesses * Small scale of operations in fragmented segment: With revenue of INR63 crore in fiscal 2018, scale remains modest in the intensely competitive textiles industry in Coimbatore. * Below-average financial risk profile: Networth was small at INR3.55 crore as on March 31, 2018, which, along with large working capital debt, led to a high gearing of 4.91 times. Large debt and low profitability resulted in subdued debt protection metrics, with net cash accrual to total debt and interest coverage ratios of 14% and 1.93 times, respectively, for fiscal 2018. Strength * Extensive experience of promoters: Presence of around three decades in the textiles industry has enabled the promoters to establish healthy relationship with key customers and suppliers. Outlook: Stable CRISIL believes ABSMPL will continue to benefit from promoters' extensive experience. The outlook may be revised to 'Positive' if significant improvement in scale of operations and profitability strengthens financial risk profile. The outlook may be revised to 'Negative' if revenue and profitability decline, capital structure or debt protection metrics weakens further, or there is stretch in working capital cycle. ABSMPL was set up in 1993 and the company manufactures cotton yarn. Operations are managed by Mr K Venkataswamy. AMBEY METALLIC: ICRA Withdraws B+ Rating on INR5.65cr Loan ---------------------------------------------------------- ICRA has withdrawn the long-term rating of [ICRA]B+ with Stable outlook and short-term rating of [ICRA]A4, assigned to INR30.00 crore bank facilities of Ambey Metallic Private Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund based 5.65 [ICRA]B+ (Stable); Withdrawn Non-fund based 24.35 [ICRA]A4; Withdrawn Rationale The ratings are withdrawn in accordance with ICRA's policy on withdrawal and suspension, and as desired by the firm, no- objection certificate provided by its lenders, as well as based on the undertaking from the company that it has ratings outstanding from other CRA for both long-term fund based and short-term non-fund based instruments. Incorporated in 2001, Ambey Metallic Private Limited (erstwhile Ambey Metallic Limited), manufactures sponge iron using iron ore and coal as the key raw materials. Mr. Sunil Garg, Mr. Vinod Agarwal and Mr. Pawan Bansal are the promoters and the key management personnel of the company having an experience of more than two decades in the iron and steel industry. AMPL has an installed capacity of 36,000 Metric Tonnes Per Annum (MTPA) at its manufacturing facility in Pissurlem, Goa. The promoters have an experience of more than two decades in the iron and steel industry. AMBIKA REALCON: Ind-Ra Assigns BB- Issuer Rating, Outlook Stable ---------------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned Ambika Realcon Private Limited (ARPL) a Long-Term Issuer Rating of 'IND BB-'. The Outlook is Stable. The instrument-wise rating action is: -- INR400 mil. Term loan due on March 2023 assigned with IND BB- /Stable rating. KEY RATING DRIVERS The ratings are constrained by the time and cost overrun risks associated with ARPL's ongoing residential project. As of December 2017, the project was in early stages of completion with only 19.26% of the construction completed and around 388,605 sf of the build-up area (46% of the total project of 841,325 sf) sold. The possession will begin from March 2020. The ratings also factor in the lack of a relevant track record and brand name. The ratings are supported by ARPL's promoter's experience of executing more than 40 successful real estate projects. RATING SENSITIVITIES Negative: Time and cost overruns or cancellations of the sold units, leading to stressed cash flows, could lead to a negative rating action. Positive: An improvement in sales and timely receipt of advances from customers, leading to strong visibility of cash flows, could lead to a positive rating action. COMPANY PROFILE ARPL was incorporated in 2006 and is engaged in real estate development. The company is constructing a residential project Florance Park in Mullanpur (New Chandigarh). The estimated project cost is INR2,185.46 million and the project consists of 482 units. ANIL KUMAR: CRISIL Lowers Rating on INR8.5cr Cash Loan to D ----------------------------------------------------------- CRISIL has downgraded its ratings on the bank facilities of Anil Kumar Biswal (AKB) to 'CRISIL D/CRISIL D' from 'CRISIL BB- /Stable/CRISIL A4+'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Bank Guarantee 0.9 CRISIL D (Downgraded from 'CRISIL A4+') Cash Credit 8.5 CRISIL D (Downgraded from 'CRISIL BB-/Stable') The downgrade reflects instance of devolvement in letter of credit, which remained unpaid for more than 30 days; and there has been instances when cash credit limit was overdrawn for more than 30 days. These delays were on account of stretched working capital cycle leading to liquidity mismatch. The firm had earlier misrepresented facts about timely payment of its dues. AKB also has a modest scale of operations, geographical concentration in revenue, and large working capital requirement. However, it benefits from the experience of its proprietor in the civil construction industry, healthy profitability, and adequate return on capital employed (RoCE). Key Rating Drivers & Detailed Description Weaknesses * Modest scale of operations and geographical concentration in revenue: Small scale (estimated revenue of INR28.49 crore in fiscal 2018) amid intense competition limits pricing power with suppliers and customers, thereby constraining profitability. Furthermore, AKB undertakes civil construction works mainly in Odisha and is hence exposed to risks related to geographical concentration. * Large working capital requirement: Gross current assets were 299 days as on March 31, 2017 (estimated around 200 days as on March 31, 2018), driven by sizeable inventory of 239 days due to work-in-progress as on last day of the year. This trend may continue over the medium term due to the nature of business. Receivables were 50-60 days (estimated around 80 days as on March 31, 2018) due to increased billing towards year end. Hence, bank limit remained fully utilised. Strengths * Experience of proprietor: Benefits from proprietor's experience of over two decades, his strong understanding of local market dynamics, and healthy relationship with customers and suppliers should continue to support business risk profile. * Healthy profitability and RoCE: Operating margin has been in the 16.3-19.7% range over the three fiscals through 2017. However, it is estimated to have dropped to 14-14.5% in fiscal 2018, when few low-margin orders were executed. The RoCE was strong at 20.2% in fiscal 2017 (estimated at 21.8% in fiscal 2018) and is projected at 23-25% over the medium term. AKB was set up in 1995 in Balugaon, Odisha, as a proprietorship firm by Mr Anil Kumar Biswal. It constructs and develops roads and buildings; and also undertakes other civil and electrical repair works. The firm is classified as a Class 1A contractor under the Government of Odisha. AVNI ENERGY: ICRA Moves D Rating to Not Cooperating Category ------------------------------------------------------------ ICRA has moved the long-term and short-term ratings for INR10.25- crore bank facilities of Avni Energy Solutions Private Limited (AEPL) to the 'Issuer Not Cooperating' category. The rating is now denoted as "[ICRA]D ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term-Cash 7.00 [ICRA]D ISSUER NOT COOPERATING; Credit Rating moved to the 'Issuer Not Cooperating' category Long Term- 1.75 [ICRA]D ISSUER NOT COOPERATING; Unallocated Rating moved to the 'Issuer Not Cooperating' category Short Term- 0.50 [ICRA]D ISSUER NOT COOPERATING; Fund Based Rating moved to the 'Issuer Not Cooperating' category Short term-Non- 1.00 [ICRA]D ISSUER NOT COOPERATING; Fund based Rating moved to the 'Issuer Not Cooperating' category ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available/dated/ limited information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. AESPL is incorporated in 2009 and is engaged in providing LED based lighting solutions for street lighting, rural lighting and home/ office lighting requirements. It is promoted by Mr. Brij Mohan Rathi and Mr. Gururaj Ganesh. Its manufacturing facility is located in Bangalore. Its customers include CREDA (Chhattisgarh State Renewable Energy Development Agency), EESL (Energy Efficiency Service Limited), Havells India Limited etc. BHOPAL MOTORS: CRISIL Reaffirms B+ Rating on INR13.85cr Loan ------------------------------------------------------------ CRISIL has reaffirmed its rating on the bank facilities of Bhopal Motors Private Limited (BMPL) to 'CRISIL B+/Stable'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Inventory Funding Facility 13.85 CRISIL B+/Stable (Reaffirmed) The rating continues to reflect the extensive experience of promoter and healthy relationship with J.C. Bamford Excavators Limited (JCB) and diversified sources of revenue. These strengths have been partially offset by exposure to intense competition and below average financial risk profile. Key Rating Drivers & Detailed Description Weakness * Exposure to intense competition: Intense competition from dealers of other automobile manufacturers such as Volvo, Caterpillar, among others, tends to constrain profitability of players like BPML. Further, absence of an exclusive agreement with JCB gives rise to risk of potential competition from any new dealer in the vicinity. While automobile manufacturers normally encourage multiple dealerships in the same area to improve market penetration, they themselves face intense competition from peers, as a result of which there is also a tendency to squeeze dealer margins to reduce cost. * Below average financial risk profile: Below-average financial risk profile is marked by modest net worth of INR12.45 cr., high total outside liability to tangible networth of 4.86 and gearing of 4.3 times as on March 31, 2017. The company has below average debt protection metrics with net cash accrual to Total debt (NCATD) and interest coverage ratios of over 0.08 and 1.45 times, respectively, for 2016-17. Financial risk profile may remain average over the medium term. Strength * Extensive experience of promoters and healthy relationships with JCB: Longstanding association of 25 years with JCB, the promoter's keen grasp over industry dynamics and strong infrastructure, in the form of one 3S showroom, two workshops and multiple sales outlets, have helped the company become one of the largest dealers in Madhya Pradesh. Most of these facilities are owned by promoters or group companies, except for certain small sales outlets * Diversified sources of revenue: In addition to sale of spares, machinery and vehicles, the business risk profile is supported by diversified revenue streams, including property rentals, interest income from loans and advances to sister concerns, income from lease of JCB machines, and dealership for lubricants, coolants, grease oil of Castrol and HP. Outlook: Stable CRISIL believes BPML will continue to benefit over the medium term from the experience of its promoters. The outlook may be revised to 'Positive' if substantial and sustained improvement in scale of operations and accrual, or substantial equity infusion by promoters, along with improved working capital management strengthens the financial risk profile. Conversely, the outlook may be revised to 'Negative' if low operating income or cash accrual, stretch in working capital cycle, or any large capital expenditure or further advance to sister concerns weakens financial risk profile, particularly liquidity. BMPL, incorporated in 1951, is an authorised dealer for heavy earth-moving equipment and heavy commercial vehicles including backhoe loaders, excavators and car mounted machines for JCB India Ltd (JCB). The company is headquartered in Indore with multiple sales offices. The company is also an authorised dealer for oil and lubricants of Castrol and HP. It also derives income from leasing JCB Machines and property, and from interest. The company is promoted by Indore-based Sanghi group. Mr. Rohit Sanghi and Mrs. Swati Tokkar are the directors of the company. DEBOGRAM AGRO: CRISIL Reaffirms B Rating on INR12cr LT Loan ----------------------------------------------------------- CRISIL has reaffirmed its 'CRISIL B/Stable' rating to the long- term bank facility of Debogram Agro Industries LLP (DAI). Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Long Term Loan 12 CRISIL B/Stable (Reaffirmed) The rating reflects susceptibility to regulatory changes and intense competition in the cold-storage business in West Bengal, stretched receivables, and modest networth and high gearing. These rating weaknesses are partially offset by extensive experience of the promoters and comfortable debt protection metrics. Key Rating Drivers & Detailed Description Weakness * Susceptible to regulatory changes and intense competition in the West Bengal cold-storage industry: The West Bengal Cold Storage Association regulates the business within the state, and fixes the storage rent and the marketing, drying, and insurance changes. Fixed rentals limit DAI's ability to generate profit based on strengths and geographic advantages. Intense competition in the cold storage segment further limits the bargaining power of players, who are forced to offer discounts to ensure healthy capacity utilisation. * Vulnerability to delays in payments from farmers, due to adverse market conditions: DAI offers loans to farmers against the stored products. If market trends turn unfavourable, farmers may not find it profitable to pay the rental and interest charges along with loan obligations, and hence, do not retrieve potatoes from cold storages. Thus, the company remains vulnerable to delay in payments from farmers. * Modest networth and high gearing: Financial risk profile is marked by a modest networth and high gearing of around INR3 crore and 5.5 times, respectively, as on March 31, 2018. Gearing is expected to improve, aided by gradual repayment of term debt in the medium term. Strength * Extensive experience of the promoters: The decade-long association of the promoters, the West Bengal-based Mondal family, and their longstanding association with farmers and traders, have enabled the company to ensure healthy utilisation of its storage capacity for potatoes. Outlook: Stable CRISIL believes DAI will benefit over the medium term, from the extensive experience of its promoters in the cold storage business. The outlook may be revised to 'Positive' if the firm reports an improvement in cash accrual and working capital management, and maintains a stable capital structure. The outlook may be revised to 'Negative' in case of pressure on liquidity due to delay in repayments by farmers, considerably low cash accrual, or any sizeable capital expenditure (capex), weakening the overall financial risk profile, particularly liquidity. Set up in 2017, DAI provides cold storage facility to potato farmers and traders in Burdwan (West Bengal). Mr Sushil Mondol, Mr Sisir Kumar Mondal, Mr Nirmal Kumar Mondal and Ms. Pradipta Mondal are the directors of the company. Cold storage with total capacity of 30,000 mtpa, is operational from March 2017. DHANRAJ JEWELLERS: Ind-Ra Maintains B+ Rating in Non-Cooperating ---------------------------------------------------------------- India Ratings and Research (Ind-Ra) has maintained Dhanraj Jewellers' Long-Term Issuer Rating 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 these ratings. The rating will now continue to appear as 'IND B+ (ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating action is: -- INR150 mil. Fund-based working capital limit maintained in non-cooperating category with IND B+ (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on May 17, 2016. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. COMPANY PROFILE Incorporated in 1995 by Deepak Murpana, Dhanraj Jewellers is a jewelry retail shop in Mumbai. DIASQUA INDIA: CRISIL Reaffirms B+ Rating on INR7.5cr Loan ---------------------------------------------------------- CRISIL has reassigned its rating on the long term bank facilities of Diasqua India Private Limited (Diasqua) to 'CRISIL B+/Stable' while reaffirming its rating on short-term bank facility at 'CRISIL A4'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Loan Against Property 7.5 CRISIL B+/Stable (Reaffirmed) Proposed Long Term Bank Loan Facility 2.0 CRISIL B+/Stable (Reassigned) Post Shipment Credit 22.5 CRISIL A4 (Reaffirmed) The rating continues to reflect the company's below-average financial risk profile, large working capital requirement, and exposure to intense competition in the diamond trading industry resulting in low profitability. These weaknesses are partially offset by promoters' experience and established client relationship. Analytical Approach For arriving at the rating, estimated unsecured loans of INR25 crore as on March 31, 2018, from promoters have been treated as neither debt nor equity as these are not interest bearing, are expected to remain in business in the long term, and are subordinated to bank debt. Key Rating Drivers & Detailed Description Weaknesses * Below-average financial risk profile: Networth is estimated to be small at INR15.0-15.5 crore and total outside liabilities to adjusted networth ratio high at 8-9 times, as on March 31, 2018. Debt protection metrics are also likely to have been weak, with interest coverage and net cash accrual to adjusted debt ratios of 2.1-2.3 times and 0.06-0.08 time, respectively, for fiscal 2018. * Large working capital requirement: Gross current assets are estimated at 205-210 days as on March 31, 2018, due to stretched receivables of 150-155 days. * Exposure to intense competition: The diamond trading industry is highly fragmented, leading to low pricing flexibility and hence constrained profitability (1.7-2.6% in the five fiscals through 2018). In the absence of a fixed hedging policy, margin also remains susceptible to fluctuations in foreign exchange rates. Strengths * Experience of promoters and established relationship with customers: Presence of more than three decades in the diamond industry has enabled the promoters to successfully navigate business cycles and establish strong relationship with a diversified customer base across the USA, Australia, Hong Kong, Singapore, Belgium, Thailand, and Dubai. Outlook: Stable CRISIL believes Diasqua will continue to benefit from the experience of its promoters and established customer relationship. The outlook may be revised to 'Positive' if there is a substantial and sustained increase in revenue, along with stable profitability, or steady improvement in working capital management. The outlook may be revised to 'Negative' in case of a steep decline in profitability, or significant deterioration in the capital structure because of a stretch in working capital cycle or considerably higher withdrawals. Diasqua was set up in 2006 in Mumbai by Mr Nimesh Mehta and his family members. The company trades in polished diamonds. DUTTA AGRO: CRISIL Assigns 'D' Rating to INR5.50cr LT Loan ---------------------------------------------------------- CRISIL has assigned its 'CRISIL D' rating on the long term bank facilities of Dutta Agro Plantations Private Limited (DAPPL). Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Proposed Long Term Bank Loan Facility 0.35 CRISIL D (Assigned) Cash Credit 3.65 CRISIL D (Assigned) Long Term Loan 5.50 CRISIL D (Assigned) The rating reflects DAPPL's below-average liquidity, modest financial risk profile and high gearing. These weaknesses are offset by the extensive experience of its promoters. Key Rating Drivers & Detailed Description Weakness: * Below-average liquidity: Modest net cash accrual resulting in cash flow mismatch has resulted in delayed term loan repayments. Further, bank limit remains fully utilised. * Average financial risk profile: Small networth - INR2.99 crore as on March 31, 2018 - high gearing and moderate debt protection metrics have resulted in weak financial risk profile. Strength * Extensive experience of the promoters: Backed by the promoters' experience of three decades, operations at the newly established tea manufacturing unit were stabilised quickly. Incorporated in October 1988, DAPPL is engaged in tea manufacturing business. The company, till October 2015 was engaged in the trading of tea leaves through its owned three estates covering in Jalpaiguri, West Bengal. F3 MARINE: CARE Assigns B+ Rating to INR20cr Long-Term Loan ----------------------------------------------------------- CARE Ratings has assigned rating to the bank facilities of F3 Marine Foods Worldwide, as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 20.00 CARE B+; Stable Assigned Detailed Rationale & Key Rating Drivers The ratings assigned to the bank facilities of F3 Marine Foods Worldwide are tempered by initial stage of project with financial closure yet to be achieved, partnership nature of its operations, fragmented and competitive nature of industry including foreign exchange fluctuation risk and seasonal nature of business operations and availability of raw materials. However, the ratings derive comfort from experienced promoters and well established associate companies and location advantage. Going forward the ability of the company to stabilize operations and achieve envisaged income from operations and profitability along with enhancing its geographical influence will be key rating sensitivities. Detailed description of the key rating drivers Key Rating Weaknesses Financial closure not yet achieved: The firm has not yet achieved its financial closure for setting up of the unit. Currently, land measuring 1.96 acres of Industrial Converted Land has been contributed by the partner of the firm as his capital contribution which has been marked in the partnership deed. As on May 22, 2018 the firm has spent incurred INR 11 crore towards procurement of machinery and development of infrastructure. The commercial operations are expected to begin by August 2018 being the paek season for procurement of raw materials ie; mackerel, squid, cuttle fish, reef cod, ribbon fish, sardine fish and king fish. Further, completion of the project without any cost overrun and stabilization of business operations shall remain critical from credit perspective. Partnership nature of its constitution: Being a partnership firm, it is exposed to the risk of withdrawal of capital by partners due to personal exigencies, dissolution of firm due to retirement or death of any partner and restricted financial flexibility due to inability to explore cheaper sources of finance leading to limited growth potential. Fragmented and competitive nature of industry including foreign exchange fluctuation risk: Indian exporters suffer from several handicaps in the matter of export related infrastructure, cost of finance and transaction cost. The transaction cost for Indian exporters in quite high when compared to neighboring countries. Fierce competition, high transaction cost and volatility of rupee dollar rate combination are some of the factors that pose a threat to the players in the industry. Seasonal nature of business operations and availability of raw materials: The firm will be fully operational in months, running three shifts, during August to October being the peak season of operations. There will be normal operations from November to May. However, there will be a shutdown period for operations during the monsoons in June-July for maintenance of hygiene at the unit. Key Rating Strengths Experience of promoters in the field and well established group companies: Mr. Mushtaq Ahmed and Mr. Mohseen Mohammed both have more than 2 decades of business experience in similar business including seafood industry and operation of cold storage. Mr. Sarvotham Poojary, also a partner, engaged in fish trading business since last 20 years has contributed land as part of his capital contribution. They are both partners at the group company Ms/ Indotech Ice and Cold Storage, located in Goa, that has been in operation for 7 years and engaged in similar line of business and M/s BAM Seafoods, located in Malpe, Udupi, Karnataka. Location Advantage: The plant is being set up at the industrial area in Udupi, Karnataka. This is in close proximity to fisheries jetties like Malpe, Gangolli, Mangalor, Tadadi, Gokarna and Bailkere. It is located at 60kms from Mangalore Port for shipment which enables in easy procurement and transportation of raw material directly from landing centres and economic transport of finished goods to the port. F3 Marine Foods Worldwide is a registered partnership firm having 8 partners and having experience of more than 2 decades in similar industry and business. It is established with the objective of setting up fish processing unit along with ice plant and cold chain infrastructure in Gujjarbettu, Udupi, Karnataka. The main objective of the firms is to export marine products after freezing. Raw materials will be procured from home and neighboring districts. The firm plans to set up integrated cold chain and value addition infrastructure project for marine products at Padu Thonse Village, Gujjarbettu, Udupi Taluka and district. Further, to set up Farm Level Infrastructure (FLI) including processing center situated at the catchment area of coastal district of Karnataka. This would include Cold storage unit, frozen storage/deep freezers, IQF line, blast freezers and plate freezers. Furthermore, to set up Distribution hub which includes modern technology for temperature controlled storage, processing, value addition and preservation infrastructure for freezing the marine products. Also to procure Reefer/insulated vehicle of 10MT capacity each aggregating to 70MT for transportation of marine products from catchment are to the unit. GOLDEN JUBILEE: Billionaire Seeks Waiver to Bid for Hotel --------------------------------------------------------- Bloomberg News reports that billionaire banker Uday Kotak's stressed asset investment unit is asking India's bankruptcy regulator to ensure that potential buyers of insolvent companies aren't made to provide non-refundable deposits in exchange for financial information during the sale process. A court-appointed insolvency professional asked bidders for Golden Jubilee Hotels Ltd., which operates a property that in November hosted Ivanka Trump, to pay an upfront deposit of INR1 million ($15,000) while submitting an expression of interest, according to S. Sriniwasan, managing director of Kotak Investment Advisors, Bloomberg relays. This practice wasn't followed in other bankruptcy processes he has participated in. "We found it a violation of the process defined under the Insolvency and Bankruptcy Code and have requested the board to make clear to all resolution professionals that this cannot be done arbitrarily," Bloomberg quotes Sriniwasan as saying. Such instances, numerous court battles and recurring changes to the new code show that clarity is yet to emerge on India's 18- month-old law, the cornerstone of its efforts to clean-up $210 billion of bad loans, the report says. Of the 12 largest defaulting companies referred to the nation's insolvency courts last June, only two have been sold, with nine having missed the deadline for resolution mandated by law, Bloomberg notes. According to Bloomberg, Sriniwasan said the bankruptcy board was receptive and is expected to come out with a public clarification on non-refundable deposits. About Golden Jubilee Golden Jubilee Hotels Limited builds hotel properties. The company was formerly known as Golden Jubilee Estates Limited and changed its name to Golden Jubilee Hotels Limited in December 2006. The company was incorporated in 1996 and is based in Hyderabad, India. Golden Jubilee Hotels Limited operates as a subsidiary of Core Hotels Ventures Pvt Ltd. Golden Jubilee Hotels was pushed into insolvency proceedings earlier this year after it defaulted on repayments to creditors. The company has claims of about INR1,085 crore which includes operational creditors, according to The Economic Times. GOVIND CABLE: ICRA Maintains B Rating in Not Cooperating Cat. ------------------------------------------------------------- ICRA said the ratings for the INR13 crore bank facilities of Govind Cable Industries continues to remain under the 'Issuer Not Cooperating' category. The ratings are now denoted as "[ICRA]B(Stable)/[ICRA]A4 ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term-Fund 6.00 [ICRA]B(Stable) ISSUER NOT Based/CC COOPERATING; Rating continues to remain under 'Issuer Not Cooperating' category Short Term-Non 7.00 [ICRA]A4 ISSUER NOT Fund Based COOPERATING; Rating continues to remain under 'Issuer Not Cooperating' category ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available and limited information on the issuers' performance. Accordingly the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. Govind Cable Industries (GCI) was established in 1978 to manufacture power, control and instrumentation cables mainly for steel and power sectors. The firm caters to Government entities or private dealers who supply to Government entities. The manufacturing facility is located at the industrial area of Sahibabad in Ghaziabad, Uttar Pradesh. GULATI METAL: CRISIL Assigns B+ Rating to INR10cr Cash Loan ----------------------------------------------------------- CRISIL has assigned its 'CRISIL B+/Stable' rating to the long- term bank facility of Gulati Metal and Alloys (GMA). Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 10 CRISIL B+/Stable (Assigned) The rating reflects GMA's modest scale of operations in the highly fragmented cable manufacturing business,large working capital requirement and average financial risk profile. These weaknesses are partly offset by the experience of the proprietor in the industry. Analytical Approach Unsecured loans (outstanding at INR1.37 crore as on March 31, 2018) extended to GMA by the proprietor have been treated as neither debt nor equity. That's because these loans do not bear any interest and should remain in the business over the medium term. Key Rating Drivers & Detailed Description Weakness * Modest scale of operations: Intense competition may continue to restrict the scalability of operations and limit the pricing power with suppliers and customers, thereby constraining profitability. Revenue is estimated at around INR10 crore in fiscal 2018. * Large working capital requirement: Gross current assets were sizeable at 467 days as on March 31, 2018, driven by large debtors of 205 days and substantial inventory of 200 days. * Average financial risk profile: Estimated interest coverage and net cash accrual to total debt ratios were 1.6 times and 0.1 time, respectively, in fiscal 2018 with moderate networth of INR4.83 crore as of March, 2018. Strengths * Experience of proprietor: Benefits from the proprietor's experience of a decade, his strong understanding of the local market dynamics, and healthy relations with customers and suppliers should continue to support the business. Outlook: Stable CRISIL believes GMA will continue to benefit from the experience of the proprietor. The outlook may be revised to 'Positive' if substantial increase in revenue and profitability strengthens financial risk profile. Conversely, the outlook may be revised to 'Negative' if lower-than-expected revenue or profitability, stretched working capital cycle, or any large, debt-funded capital expenditure weakens financial risk profile and liquidity. GMA was set up in 2008 at Jammu by the proprietor, Mr Sandeep Gulati. The firm manufactures aluminum cables and conductors. Net profit was INR1.25 crore in fiscal 2017 on total sales of INR15.16 crore, against net loss of INR0.44 crore on total sales of INR2.72 crore for the previous fiscal. JOY GURU: CARE Assigns 'B' Rating to INR8.0cr Long-Term Loan ------------------------------------------------------------ CARE Ratings has assigned rating to the bank facilities of Joy Guru Cold Storage Private Limited (JGCSPL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 8.00 CARE B; Stable Assigned Short-term Bank Facilities 0.07 CARE A4 Assigned Detailed Rationale & Key Rating Drivers The ratings assigned to the bank facilities of JGCSPL are constrained by its small size of operations, regulated nature of business, seasonality of business and susceptibility to vagaries of nature, risk of delinquency in loans extended to farmers, competition from local players, and working capital intensive nature of business and moderate leverage ratios with moderate debt protection metrics. However, the aforesaid constraints are partially offset by its experienced management and long track record of operations and proximity to potato growing area. Going forward, ability to increase its scale of operation and profitability margins and ability to manage working capital effectively are the key rating sensitivities. Detailed description of the key rating drivers Key Rating Strengths Experienced management and long track record of operations: As JGCSPL started its commencement from 1990 and thus has long track record of operations. Mr. RajatSubhra Nandi (aged 68 years) and Mr. SanjibKundu (aged 45 years) looks after overall management of the company. Mr. RajatSubhra Nandi has more than three decades of experience in cold storage business and is supported by other directors and a team of experienced professionals who have rich experience in the same line of business. Proximity to potato growing area: JGCSPL's storing facility is situated in the Bankura district of West Bengal which is one of the major potato growing regions of the state. The favourable location of the storage unit, in close proximity to the leading potato growing areas provides it with a wide catchment and making it suitable for the farmers in terms of transportation and connectivity. Moderate leverage ratios with moderate debt protection metrics: The leverage ratios of the company were moderate with satisfactory debt equity ratio and moderate overall gearing ratio being 0.35x and 1.71x, respectively, as on March 31, 2017. Total debt to GCA also remained high at 10.19x in FY17. The interest coverage ratio has shown erratic trend over the last three years with the same being adequate at 1.53xin FY17. Key Rating Weaknesses Small size of operations: JGCSPL is a relatively small player in the cold storage business having total operating income and PAT of INR2.37 crore and 0.06 crore in FY17. The total capital employed was also low at around INR3.98 crore as on March 31, 2017. During 9MFY18, the company has achieved total operating income of INR1.87crore. Small scale of operations with low net worth base limits the credit risk profile of the company in an adverse scenario. Regulated nature of business: In West Bengal, the basic rental rate for cold storage operations is regulated by the state government through West Bengal State Marketing Board. The rent of these cold storages is decided by taking into account political considerations, not economic viability. Due to severe government intervention, the cold storage facility providers cannot enhance rental charge commensurate with increased power tariff and labour charge. Seasonality of business with susceptibility to vagaries of nature: JGCSPL's operation is seasonal in nature as potato is a winter season crop with its harvesting period commencing in March. The loading of potatoes in cold storages begins by the end of February and lasts till March. Additionally, with potatoes having a preservable life of around eight months in the cold storage, farmers liquidate their stock from the cold storage by end of season i.e., generally in the month of November. The unit remains non-operational during the period between December to February. Furthermore, lower agricultural output may have an adverse impact on the rental collections as the cold storage units collect rent on the basis of quantity stored and the production of potato is highly dependent on vagaries of nature. Risk of delinquency in loans extended to farmers: Against the pledge of cold storage receipts, JGCSPL provides interest bearing advances to the farmers & traders. Before the closure of the season in November, the farmers & traders are required to clear their outstanding dues with the interest. In view of this, there exists a risk of delinquency in loans extended, in case of downward correction in potato or other stored goods prices, as all such goods are agro commodities. Competition from other local players: In spite of being capital intensive, the entry barrier for new cold storage is low, backed by capital subsidy schemes of the government. As a result, the potato storage business in the region has become competitive, forcing cold storage owners to lure farmers by providing them interest bearing advances against stored potatoes which augments the business risk profile of the companies involved in the trade. Working capital intensive nature of business: As JGCSPL is engaged in the cold storage business, its operation is working capital intensive by nature. The same is reflected by the higher working capital requirement for the company and the average utilization for the same remained at about 90% during the last 12 months ended January 2018. Joy Guru Cold Storage Private Limited. (JGCSPL), incorporated in the year 1989, is a Bankura (West Bengal) based company, promoted by the Nandi and Kundu family. It is engaged in the business of providing cold storage services to potato growing farmers and potato traders, having an installed storage capacity of 200,000 quintals in Bankura district of West Bengal. Mr. Rajat Subhra Nandi (Director) and Mr. Sanjib Kundu (Director) looks after overall management of the company. Mr. Rajat Subhra Nandi has more than three decades of experience in cold storage business and is supported by a team of experienced professionals who have rich experience in the same line of business. KAVIT INDUSTRIES: CRISIL Lowers Rating on INR5cr Cash Loan to D --------------------------------------------------------------- CRISIL has downgraded the rating of Kavit Industries (KI) to 'CRISIL D/CRISIL D Issuer Not Cooperating' from 'CRISIL B- /Stable/CRISIL A4' as the firm has delayed the servicing of its debt obligations. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 5 CRISIL D (ISSUER NOT COOPERATING; Downgraded from 'CRISIL B-/Stable') Letter of Credit 2.34 CRISIL D (ISSUER NOT COOPERATING; Downgraded from 'CRISIL A4') Term Loan 0.66 CRISIL D (ISSUER NOT COOPERATING; Downgraded from 'CRISIL B-/Stable') CRISIL has been consistently following up with KI for obtaining information through letters and emails dated April 25, 2018, May 9, 2018, and June 6, 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. '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 KI. This restricts CRISIL's ability to take a forward looking view on the credit quality of the entity. CRISIL believes that the information available for KI is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL B-' rating category or lower. Based on the last available information, CRISIL has downgraded the rating to 'CRISIL D/CRISIL D Issuer Not Cooperating' from 'CRISIL B-/Stable/CRISIL A4' as the firm has delayed the servicing of its debt obligations. Based in Noida, Uttar Pradesh, KI was established as a proprietorship firm in 2000 by Mr. Vijay Manchanda. The firm manufactures PU foams and matrices and also trades in industrial chemicals and fabrics. KKRISHNA VAAHAN: CRISIL Hikes Rating on INR25.5cr Loan to B ----------------------------------------------------------- CRISIL has revised its rating on the long-term bank facilities of KKrishna Vaahan Private Limited (KVPL) from 'CRISIL BB-/Stable' to 'CRISIL D', and simultaneously upgraded the rating to 'CRISIL B/Stable'. The rating revision to 'CRISIL D' reflects delay in regularisation in temporary overdraft limit during July-November 2017; mainly due to liquidity mismatch. However, since December 2017, there has been no instance of overdrawn limit. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 4.5 CRISIL B/Stable (Revised from 'CRISIL BB-/Stable' to 'CRISIL D' and Simultaneously Upgraded to 'CRISIL B/Stable') Inventory Funding 25.5 CRISIL B/Stable (Revised from Facility 'CRISIL BB-/Stable' to 'CRISIL D' and Simultaneously Upgraded to 'CRISIL B/Stable') The rating reflects KVPL's weak financial risk profile because of modest networth, high total outside liabilities to tangible networth (TOLTNW) ratio, and average debt protection metrics; exposure to intense competition; low operating margin; and stretch in working capital cycle leading to liquidity mismatch. These weaknesses are partially offset by promoters' extensive entrepreneurial experience. Key Rating Drivers & Detailed Description Weaknesses * Below-average financial risk profile: Networth is estimated to be small at INR5.64 crore and TOLTNW ratio high at 14.71 times, as on March 31, 2018. However, these should improve gradually with accretion to reserves. Debt protection metrics were muted, with estimated interest coverage and net cash accrual to total debt ratios of 1.2 times and 0.03 time, respectively, in fiscal 2018. * Low operating margin and exposure to intense competition in the commercial vehicle (CV) dealership business: Margin was 2.7% in fiscal 2018 because of limited value addition and intense competition. The CV industry is also exposed to changes in overall economic conditions. Consequently, business may remain restricted over the medium term by these industry-specific risks. * Stretch in working capital cycle: Gross current assets increased to 166 days as on March 31, 2018, from 91 days in the previous fiscal because of stretched receivables. This led to liquidity mismatch. Strengths * Promoters' extensive entrepreneurial experience: Benefits of the five-decade-long experience of Khaitan family in the automobile dealership and other businesses, and strong market reputation in Odisha through dealerships of Bajaj Auto Ltd and India Kawasaki Motors Pvt Ltd should continue to support business risk profile. Outlook: Stable CRISIL believes KVPL will continue to benefit over the medium term from its association with Tata Motors Ltd (TML; rated 'CRISIL AA/Positive/CRISIL A1+'). The outlook may be revised to 'Positive' if more-than-expected revenue or cash accrual, along with improved capital structure, substantially strengthens financial risk profile. The outlook may be revised to 'Negative' in case of low accrual, stretch in working capital cycle, or any large capital expenditure. KVPL was set up in September 2013 by Mr Sajjan Khaitan and his son, Mr Rahul Khaitan. The company deals in CVs (including medium and heavy CVs and buses) for TML in the Deogarh, Sundergarh, and Rourkela districts of Odisha. LEXUS MOTORS: ICRA Reaffirms B+ Rating on INR85cr Loan ------------------------------------------------------ ICRA has reaffirmed the long-term rating of [ICRA]B+ assigned to the INR85.00-crore (reduced from INR99.50 crore) fund-based facilities of Lexus Motors Limited. ICRA has also reaffirmed short-term rating of [ICRA]A4 assigned to the INR2.00-crore (revised from INR0.50 crore) non-fund based bank facility of LML. ICRA has further reaffirmed the long-term rating of [ICRA]B+ and the short-term rating of [ICRA]A4 to the INR13.00-crore (revised from Nil) untied limits of LML. The outlook on the long-term rating is Stable. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based Limits 85.00 [ICRA]B+ (Stable); reaffirmed Non-fund Based Limits 2.00 [ICRA]A4; reaffirmed Untied Limits 13.00 [ICRA]B+(Stable)/ [ICRA]A4; Reaffirmed Rationale The reaffirmation of the ratings considers the cyclicality and the inherently low margins in the automobile dealership business due to the industry dynamics and the commission structure decided by the principal. LML has a weak financial profile, characterised by an aggressive capital structure and depressed level of coverage indicators. The ratings continue to be impacted by the vulnerability of the project off-take risk, given the current slack in demand in the commercial real-estate segment in Kolkata, and lack of bookings for the property till date. The ratings, however, derive comfort from the promoters' experience in the automobile dealership business, with a track record of over two decades and the established market position of LML in Kolkata as an authorised dealer of Tata Motors Limited (TML) for both commercial vehicles (CV) and passenger vehicles (PV) segments, and as the sole dealer of Jaguar Land Rover (JLR) in eastern India. In ICRA's opinion, the ability of the firm to scale up its operations and improve profitability, while efficiently managing its working capital requirements will remain key rating sensitivities. Outlook: Stable ICRA believes that the company will continue to benefit from the long experience of the promoters. The outlook may be revised to Positive if the company is able to scale up its operations while improving profitability, capital structure, and coverage indicators. The outlook may be revised to Negative if there is any increase in the working capital requirement, which could adversely impact the liquidity position of the company. Key rating drivers Credit strengths Experience of the promoters: The promoters have experience of over two decades in the automobile dealership business. The promoters' track record in the business mitigates the operational risk, to an extent. Established position as an authorised dealer of TML in Kolkata: The company is among the leading dealers of TML in eastern India, dealing in the entire range of commercial/ passenger vehicles along with JLR vehicles. LML is also the sole dealer for the JLR segment in eastern India and operates through two showrooms and one workshop in Kolkata and Cuttack. In addition, the company has 12 showrooms (seven PV and five CV), six workshops (three PV and three CV) and three customer service points for CVs spread across Kolkata. TML has also authorised LML to supply vehicles to the government organisations in the eastern region. Credit challenges Weak financial profile characterised by a highly leveraged capital structure and depressed coverage indicators: The capital structure of the company continued to remain leveraged, as depicted by a gearing of 8.04 times as on March 31, 2018 (provisional) compared to 7 times as on March 31, 2017. High debt levels coupled with low profitability kept the coverage indicators depressed as reflected by an interest coverage of 1.27 times, NCA/total debt of 2% and TD/OPBDITA of 8.57 during FY2018 (provisional). Muted demand for the showroom-cum-real-estate project at Rajarhat: Ongoing slowdown in the commercial real-estate market in Kolkata and the lack of bookings till date expose the project to off-take risk and expected realisations. ICRA further notes that LML has significant debt repayment obligations, which are likely to keep its cash flows under pressure in the near to the medium term. Inherently low margins due to industry dynamics and commission structure regulated by the principal: The operating profit margin of auto dealers, including LML, is inherently low due to the high-volume, low-margin business nature of the industry and intense competition among dealers. Besides, auto dealers are regulated by the OEM to a large extent, where the commission structure is decided by the principal, which also restricts the margin. Exposed to the cyclicality of the industry: The company remains exposed to the inherent cyclicality of the Indian passenger as well as commercial vehicle industry. Incorporated in 1991, Lexus Motors Limited (LML) is involved in the business of automobile dealership and is an authorised dealer of Tata Motors Limited (TML). LML started its operations with light commercial vehicle and subsequently was given the franchise of multi-utility vehicles, medium and heavy commercial vehicles and passenger cars of TML. Since FY2011, LML also started dealing in models of Jaguar Land Rover (JLR) in arrangement with TML. LML is the sole dealer for the JLR segment in eastern India. The company is in the process of developing a showroom cum real estate project in Auto Hub, Rajarhat, Kolkata. LICHCHHWI FOOD: Ind-Ra Lowers LongTerm Issuer Rating to 'D' ----------------------------------------------------------- India Ratings and Research (Ind-Ra) has downgraded Lichchhwi Food India Pvt. Ltd.'s (LFIPL) Long-Term Issuer Rating to 'IND D' from 'IND BB-'. The Outlook was Stable. The instrument-wise rating actions are: -- INR80.00 mil. Fund-based working capital limit (long-term) Downgraded with IND D rating; and -- INR28.84 mil. (reduced from INR31.4 mil.) Long-term loans (long-term) due on March 2023 downgraded with IND D rating. KEY RATING DRIVERS The downgrade reflects delays in debt servicing by JFIPL during February-April 2018 owing to a tight liquidity position, indicated by the overutilization of its working capital limits during the 12 months ended April 2018. RATING SENSITIVITIES Positive: Timely debt servicing for at least three consecutive months would be positive for the ratings. COMPANY PROFILE LFIPL operates two multipurpose cold storages with a total capacity of 13,000 metric tons, a flour mill and a 500 metric ton frozen unit since 1999 at Industrial Area, Hazipur. It stores agricultural and horticultural products, mainly potato, maize, pea, spices apples, butter and other seasonal fruits. It is also engaged in the trading of potato. Its promoters are Mr. Avinash Kumar, Mr. Arun Kumar Singh and Mr. Alok Kumar. LUTHFA FOUNDATION: CRISIL Migrates B- Rating to Not Cooperating --------------------------------------------------------------- CRISIL is migrating the rating of Luthfa Foundation (LF) from 'CRISIL B-/Stable/Issuer Not Cooperating to 'CRISIL B-/Stable' Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit/ 0.2 CRISIL B-/Stable (Migrated Overdraft facility from 'CRISIL B-/Stable ISSUER NOT COOPERATING') Long Term Bank 2.95 CRISIL B-/Stable (Migrated Facility from 'CRISIL B-/Stable ISSUER NOT COOPERATING') Proposed Long Term 6 CRISIL B-/Stable (Migrated Bank Loan Facility from 'CRISIL B-/Stable ISSUER NOT COOPERATING') Proposed Term Loan 3 CRISIL B-/Stable (Migrated from 'CRISIL B-/Stable ISSUER NOT COOPERATING') Due to inadequate information and in line with Securities and Exchange Board of India guidelines, CRISIL had migrated its rating on the long-term bank facilities of LF to 'CRISIL B- /Stable/Issuer Not Cooperating'. However, the firm's management has subsequently started sharing information necessary for a comprehensive review of the rating. Consequently, CRISIL is migrating the rating from 'CRISIL B-/Stable/Issuer Not Cooperating to 'CRISIL B-/Stable' The rating reflects LF's small scale of operations, geographical concentration in revenue profile, and exposure to restrictions imposed by regulatory bodies and to intense competition in the education sector. These weaknesses are partially offset by the extensive experience of its trustees. Key Rating Drivers & Detailed Description Weakness * Small scale of operations and geographical concentration in revenue: With revenue of around INR2.57 crore in fiscal 2018, scale remains modest. The trust operates two one institutes although the occupancy rate is high. The low capacity restricts the trust's cash accruals, and in turn, its financial risk profile. * Vulnerability to regulatory risks associated with educational institutions: Courses offered by the trust have to comply with specific operational and infrastructure norms laid down by regulatory bodies such as All India Council for Technical Education (AICTE), National Council for Vocational Training (NCVT), to which the trust is affiliated. Thus, the trust has to regularly invest in workforce and infrastructural requirements as per the prescribed norms. There has been minimal rise in course fees over the past three years, while operational expenses have been increasing. Furthermore, enhancements in seats/courses offered in any discipline require prior approvals from AICTE and NCVT. The setting up of a new institute also requires approval from AICTE, the state government, and the governor of the state in which the institute is being set up. Strengths * Extensive experience of promoters: The trust's promoters have been in the education segment for more than a decade, which has led to steady ramp up in operations. Outlook: Stable CRISIL believes LF will continue to benefit from its trustees' extensive experience. The outlook may be revised to 'Positive' in case of a substantial scaling up of operations through increase in the number of courses and intake capacity. The outlook may be revised to 'Negative' if financial risk profile is affected by sizeable, debt-funded capital expenditure, or lower-than-expected ramp up in occupancy levels. LF is a charitable trust set up in 2010 in Kolkata. It presently runs Luthfa Private Industrial Training Institute an NCVT- affiliated industrial training institute (ITI); and Luthfa Polytechnic Institute , an AICTE-affiliated college offering diploma degrees in four engineering streams. The trust's chairman is Dr Bazlul Haque. MAHASHAKTI COLD: CARE Assigns B+ Rating to INR7.30cr LT Loan ------------------------------------------------------------ CARE Ratings has assigned rating to the bank facilities of Mahashakti Cold Storage Private Limited (MCSPL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facility 7.30 CARE B+; Stable Assigned Detailed Rationale & Key Rating Drivers The rating assigned to the bank facilities of MCSPL is constrained by its small size of operations with moderate profitability margins, regulated nature of business, seasonality of business and susceptibility to vagaries of nature, risk of delinquency in loans extended to farmers, competition from local players, working capital intensive nature of business and leveraged capital structure with moderate debt protection metrics. However, the aforesaid constraints are partially offset by its experienced management and long track record of operations, proximity to potato growing area. Going forward, ability to increase its scale of operation and profitability margins and ability to manage working capital effectively are the key rating sensitivities. Detailed description of the key rating drivers Key Rating Strengths Experienced management and long track record of operations: MCSPL started its commencement from 1987 and thus has long track record of operations. Mr. Naba Kumar Kundu (aged 58 years) looks after overall management of the company. Mr. Naba Kumar Kundu has more than two decades of experience in cold storage business and is supported by other directors and a team of experienced professionals who have rich experience in the same line of business. Proximity to potato growing area: MCSPL's storing facility is situated in the Burdwan district of West Bengal which is one of the major potato growing regions of the state. The favorable location of the storage unit, in close proximity to the leading potato growing areas provides it with a wide catchment and making it suitable for the farmers in terms of transportation and connectivity. Key Rating Weaknesses Small size of operations with moderate profitability margins: MCSPL is a relatively small player in the cold storage business having total operating income and PAT of INR2.36 crore and INR0.12crore in FY17 respectively. The total capital employed was also low at around INR7.83 crore as on March 31, 2017. The PBILDT margin of the company improved during the last three financials on account of better management of cost of operations and the same remained satisfactory at 30.39 % in FY17. Further, the PAT margin also remained moderate at 5.03% in FY17. However, the cash accrual declined marginally in FY17 to INR0.14 crore as against INR0.19 crore in FY16. During FY18, the company has achieved total operating income of INR2.21 crore. Small scale of operations with low net worth base limits the credit risk profile of the company in an adverse scenario. Regulated nature of business: In West Bengal, the basic rental rate for cold storage operations is regulated by the state government through West Bengal State Marketing Board. The rent of these cold storages is decided by taking into account political considerations, not economic viability. Due to severe government intervention, the cold storage facility providers cannot enhance rental charge commensurate with increased power tariff and labour charge. Seasonality of business with susceptibility to vagaries of nature: MCSPL's operation is seasonal in nature as potato is a winter season crop with its harvesting period commencing in March. The loading of potatoes in cold storages begins by the end of February and lasts till March. Additionally, with potatoes having a preservable life of around eight months in the cold storage, farmers liquidate their stock from the cold storage by end of season i.e., generally in the month of November. The unit remains non-operational during the period between December to February. Furthermore, lower agricultural output may have an adverse impact on the rental collections as the cold storage units collect rent on the basis of quantity stored and the production of potato is highly dependent on vagaries of nature. Risk of delinquency in loans extended to farmers: Against the pledge of cold storage receipts, MCSPL provides interest bearing advances to the farmers & traders. Before the closure of the season in November, the farmers & traders are required to clear their outstanding dues with the interest. In view of this, there exists a risk of delinquency in loans extended, in case of downward correction in potato or other stored goods prices, as all such goods are agro commodities. Competition from other local players: In spite of being capital intensive, the entry barrier for new cold storage is low, backed by capital subsidy schemes of the government. As a result, the potato storage business in the region has become competitive, forcing cold storage owners to lure farmers by providing them interest bearing advances against stored potatoes which augments the business risk profile of the companies involved in the trade. Working capital intensive nature of business: As MCSPL is engaged in the cold storage business, its operation is working capital intensive by nature. The same is reflected by the higher working capital requirement for the company and the average utilization for the same remained at about 90% during the last 12 months ended April 2018. Leveraged capital structure with moderate debt protection metrics: Overall gearing ratios of the company were high as on last three account closing dates with the same being 4.49x as on March 31, 2017. Total debt to GCA also remained high at46.97x in FY17. However, the Interest coverage ratios were adequate during past financial years, with the same being at 1.36x in FY17. Mahashakti Cold Storage Private Limited. (MCSPL), incorporated in the year 1984, is a Burdwan (West Bengal) based company, promoted by the Kundu family. It is engaged in the business of providing cold storage services to potato growing farmers and potato traders, having an installed storage capacity of 179,696 quintals in Burdwan district of West Bengal. Mr. Naba Kumar Kundu (Director) looks after overall management of the company. Mr. Naba Kumar Kundu has more than two decades of experience in cold storage business and is supported by a team of experienced professionals who have rich experience in the same line of business. MB POWER: Ind-Ra Moves 'BB' Debt Facility Rating to Non-Coop. ------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated MB Power (Madhya Pradesh) Limited's (MBPL) proposed debt facilities to the non- cooperating category. The issuer did not participate in the final 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 'Provisional IND BB (ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating actions are: -- INR51.96 bil. Proposed rupee term loan due on April 2034 migrated to non-cooperating category with Provisional IND BB (ISSUER NOT COOPERATING) rating; and -- INR2.5 bil. Proposed short-term loan under working capital Facility migrated to non-cooperating category with Provisional IND A4+ (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on March 20, 2017. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. COMPANY PROFILE MBPL is a 100% subsidiary of Hindustan Thermal Projects Limited, which in turn is a 100% subsidiary of Hindustan Power Projects Private Limited (HPPPL). Hindustan Power Projects is the energy holding company of the group and has 100% step-down subsidiaries for thermal, hydro and solar verticals. MBPL has set up a 2x600MW coal-based sub-critical thermal power plant in district Anuppur of Madhya Pradesh. OSIA JEWELS: CRISIL Lowers Rating on INR12.5cr Proposed Loan to D ----------------------------------------------------------------- CRISIL has downgraded its long-term rating on bank facility availed by Osia Jewels Private Limited (OJPL) to 'CRISIL D Issuer Not Cooperating' from 'CRISIL C Issuer Not Cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 7.5 CRISIL D (ISSUER NOT COOPERATING: Downgraded from 'CRISIL C ISSUER NOT COOPERATING') Proposed Long 12.5 CRISIL D (ISSUER NOT COOPERATING: Term Bank Loan Downgraded from 'CRISIL C ISSUER Facility NOT COOPERATING') CRISIL has been consistently following up with OJPL, seeking the information required for ratings review, through letters dated December 18, 2017 and January 17, 2018, 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 OJPL, which restricts CRISIL's ability to take a forward-looking view on the entity's credit quality. CRISIL believes information available on OJPL is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower'. CRISIL has downgraded its long-term rating on bank facility availed by OJPL to 'CRISIL D Issuer Not Cooperating' from 'CRISIL C Issuer Not Cooperating'. The downgrade reflects the confirmation of the fact that account has been classified as an NPA (Non-Performing Asset), as per the latest information available. Analytical Approach CRISIL consolidates the business and financial profile of SOPL, Siddham Jewels Pvt Ltd (SJPL) and OJPL as all the entities are in similar line of business and are managed by the same management. Sancheti Group is promoted by Mr Ashok Sancheti and his family. The three group companies, SOPL, SJPL and OJPL were setup in 2011 in Mumbai to manufacture and wholesale gold jewellery. The promoters have been in business since 1988. PARAMOUNT CHEMPRO: CARE Assigns B+ Rating to INR7cr LT Loan ----------------------------------------------------------- CARE Ratings has assigned rating to the bank facilities of Paramount Chempro (PC), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 7 CARE B+; Stable Assigned Detailed Rationale The rating assigned to the bank facilities of PC factors in the project stabilization risk from the debt funded cap-ex undertaken, susceptibility of margins to fluctuation in raw material prices, its presence in highly fragmented and competitive industry and partnership nature of constitution. The rating however derives strength from the satisfactory experience of the promoters of more than one and a half decade in diversified business. The ability of the firm to stabilize its operations and achieve envisaged sales and profitability is a key rating sensitivity. Detailed description of the key rating drivers Key Rating Weaknesses Project Stabilization risk from the debt funded cap-ex undertaken: The entity has recently completed its project to set up a Formaldehyde unit at Butibori, Nagpur (Maharashtra). The entity has commenced its production from April, 2018 and has achieved a turnover of INR1.50 crore during 2MFY19. The stabilization of the said cap-ex will be critical from credit perspective. Vulnerability to fluctuation in raw material prices: The major raw material used for manufacturing industrial chemicals is Methanol, which are sourced from Mumbai based importers. Any change in the prices of these materials has a direct bearing on the profitability of PC. Raw materials are procured at market determined rates and there is no long term contract with suppliers due to the fluctuating nature of prices. Hence, volatility in raw material prices is one of the major concerns for the entity, as high level of competition refrains for a complete pass through of rising cost. Presence of company in highly fragmented industry: PC operates in an industry characterized by high competition due to low entry barriers, high fragmentation and the presence of a large number of players in the organized and unorganized sector. Thus, the entities present in the segment generally have a very low bargaining power vis-a-vis their customers. Partnership nature of constitution: Being partnership nature of constitution, the firm is exposed to the risk of withdrawal of capital due to personal exigencies, dissolution of firm due to retirement or death of promoter and restricted financial flexibility due to inability to explore cheaper sources of finance leading to limited growth potential. Key Rating Strengths Experienced partners: PC is managed by Mr. Kishor D Patel, Mr. Vijay J Patel, Mr. Paresh R Patel and Mr. Naresh J Patel. The partners have an average experience of more than one and a half decade in diversified business viz. timber and plywood trading, industrial hardware trading and laminate industry. All the partners are involved in the day to day affairs of the business with adequate support from a team of experienced professionals. Long experience of the partners will support the business risk profile of the entity to a large extent. PC was established in the year 2015 by Patel family of Nagpur. The entity has recently (April 2018) completed its project to set up a Formaldehyde unit at Butibori, Nagpur, Maharashtra with an installed capacity of 24000 metric tonnes per annum. The product i.e. Formaldehyde mainly finds application in furniture industry. PRATHISHTA BUSINESS: Ind-Ra Moves 'D' Rating to Non-Cooperating --------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated Prathishta Business Solutions Private Limited's (PBSPL) 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 D (ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating actions are: -- INR448.45 mil. Term loans (Long-term) due on October 2021 to February 2023 migrated to non-cooperating category with IND D (ISSUER NOT COOPERATING) rating; -- INR10 mil. Fund-based facilities (Long-term/Short-term) migrated to non-cooperating category with IND D (ISSUER NOT COOPERATING) rating; and -- INR120 mil. Non-fund-based facilities (Short-term) migrated to non-cooperating category with IND D (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on May 30, 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 2013 as a private limited company, PBSPL is a co- packer/contract manufacturer for PepsiCo Holdings India Private Limited's 500ml and 1,000ml packaged drinking water under the Aquafina brand. REGAAL RESOURCES: CRISIL Reaffirms B+ Rating on INR40cr Loan ------------------------------------------------------------ CRISIL has reaffirmed its rating on the long-term bank facility of Regaal Resources Private Limited (RRPL) at 'CRISIL B+/Stable'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Term Loan 40 CRISIL B+/Stable (Reaffirmed) The rating continues to reflect the company's exposure to risks related to start-up phase, implementation of project, and stabilisation of operations. This weakness is partially offset by promoters' extensive entrepreneurial experience. Key Rating Drivers & Detailed Description Weakness * Exposure to risks related to start-up phase, project implementation, and stabilization of operations: The company is setting up a starch extraction plant at a cost of INR88.76 crore, and is exposed to risks related to timely completion of project. Implementation risk is moderate as any delay in commissioning of project can have a negative impact on financial risk profile. Strength * Extensive entrepreneurial experience of promoters: The company's promoters have diversified businesses such as manufacturing and trading, publishing, real estate, and hospitality. Hence, RRPL is likely to benefit from their longstanding entrepreneurial experience. Outlook: Stable CRISIL believes RRPL will benefit from the extensive entrepreneurial experience of its promoters. The outlook may be revised to 'Positive' if the project is implemented and operations are stabilised as scheduled. The outlook may be revised to 'Negative' if time and cost overruns in project put significant pressure on liquidity. Incorporated in 2012 and promoted by Mr Bijay Kumar Kishorepuria, Mr Raj Kumar Kishorepuria, Mr Anil Kishorepuria, and Mr Manoj Panwar, RRPL is setting up a starch extraction plant in Thakurganj, Bihar. RUCHI SOYA: Patanjali Seeks More Info on Adani Wilmar's Bid ----------------------------------------------------------- BloombergQuint reports that Yoga guru Baba Ramdev's Patanjali Group, which is in the race to acquire bankruptcy-bound Ruchi Soya Industries Ltd., has sought more information related to the bid submitted by its rival Adani Group and also on the appointment of a legal advisor of the resolution professional. Patanjali, which has been declared as the second highest bidder, has not yet submitted a revised bid to match or better the highest offer of INR6,000 crore by Adani Wilmar, sources said, BloombergQuint relates. According to BloombergQuint, the company was to submit its revised bid under the Swiss Challenge system by June 16. The CoC would have to decide on whether to give a fresh deadline to Patanjali to submit a revised bid or declare Adani Wilmar as the winning bidder. However, sources said that Patanjali Ayurveda has sought more information from the lenders of Ruchi Soya. The company wants to know the parameters based on which Adani group has been declared as the highest bidder, they said, BloombergQuint relays. BloombergQuint says Patanjali, which had bid for around INR5,700 crore under the Swiss Challenge System, has also sought details related to appointment of Cyril Amarchand Mangaldas as legal advisor of resolution professional, which was already advising Adani Group. When contacted, Patanjali spokesperson SK Tijarawala said: "We have replied to them within the stipulated time frame." He did not reply to a query whether the Haridwar-based firm has submitted its revised bid or not. BloombergQuint notes that Tijarawala had earlier raised question over the neutrality of the process citing media reports of resignation of law firm Cyril Amarchand Mangaldas as advisor of Adani Wilmar. The law firm is also advising the Ruchi Soya's resolution professional. According to the report, Ruchi Soya in a regulatory filing last week confirmed that the Commitee of Creditors declared Adani Wilmar as highest bidder and Patanjali stood as second highest. Under the Swiss Challenge system, Patanjali has a right to match or better the offer made by Adani, the report states. The CoC has decided to conduct Swiss challenge method to maximise the asset value of Ruchi Soya. Sources had earlier said lenders who have to recover about INR12,000 crore in outstanding loans from Ruchi Soya, were not happy with the initial bids, wherein Patanjali was the top bidder with an offer of around INR4,300 crore followed by Adani at INR3,300 crore, according to BloombergQuint. Under the Swiss Challenge method, Adani will get another chance to make an offer if Patanjali were to match or better its offer of about INR6,000 crore, the report notes. 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. SAI SWADHIN: CARE Assigns B Rating to INR7.64cr Long-Term Loan -------------------------------------------------------------- CARE Ratings has assigned rating to the bank facilities of Sai Swadhin Commercials Private Limited (SSCPL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 7.64 CARE B; Stable Assigned Detailed Rationale & Key Rating Drivers The rating assigned to the bank facilities of SSCPL are constrained by its small scale of operations with low profitability margins, volatility in raw material prices, high leverage ratios with adequate debt coverage indicators, working capital intensive nature of industry and intensely competitive nature of the industry with presence of many unorganized players. However, the aforesaid constraints are partially offset by its experienced promoters and strategic location of the plant. The ability of the company to grow its scale of operations, improve profitability margins and to manage working capital effectively would be the key rating sensitivities. Detailed description of the key rating drivers Key Rating Strengths Experienced management: Mr. Jami Ramesh and Mr. Jami Sivasai looks after the day to day activities of the company and has more than two decades of experience in the same line of business through other similar group companies they are equally supported by other directors and a team of experienced professionals who are having adequate experience in the similar line of business. Strategic location of the plant: SSCPL's plant is located in Koraput district of Orissa which is one of the hubs for cashew cultivation region of Orissa. The firm sources its raw materials in plenty with cashew processing units operating in areas in proximity to SSCPL's plant. As there are number of companies operating in this region producing cashew nut, availability of raw material is not an issue. Key Rating Weaknesses Small scale of operation and low profitability margin: SSCPL is a relatively small player in the agro industry with total operating income and net loss of INR11.89 crore and INR0.44 crore, respectively, in FY17. The total capital employed was at INR12.40 crore as on March 31, 2017. This apart, the PAT margin was negative during FY17 due to huge fixed and capital charges. The company has achieved total operating income of INR11.60 crore during FY18. The small size restricts the financial flexibility of the company in times of stress and it suffers on account of economies of scale. Volatility in raw material prices: The profitability of the company is exposed to volatility in raw cashew nut shell prices owing to its significant dependence on agro-climatic conditions and local players. Furthermore, cashew nut prices are also largely affected by global demand-supply scenario. High leverage ratios with adequate debt coverage indicators: The overall gearing ratio of the company deteriorated as on March 31, 2018 to 6.60x from 6.49x as on March 31, 2017, was high as on last three account closing dates. Long term debt equity ratio was also high during the same period with the same being 3.51x as on March 31, 2018. Total debt to GCA has improved over the last three financial years however remained high at 17.47x in FY18. However, the Interest coverage ratios have improved over the years, with the same being at 1.88x in FY18. Working capital intensive nature of business: As SSCPL is engaged in the cashew nut shell liquid extraction business, its operation is working capital intensive by nature. The same is reflected by the higher working capital requirement for the company marked by high operating cycle days at 206 days which is mainly on account of prolonged debtors collection period and long inventory days. The average utilization for the same remained at about 95% during the last 12 months ended May 2018. Intensely competitive nature of the industry with presence of many unorganised players: Cashew nut shell liquid and cashew de- oiled cake processing is highly fragmented and competitive due to presence of large number of small players operating in this sector owing to its low entry barriers, low capital and technological requirements. High competition restricts the pricing flexibility of the industry participants and has a negative bearing on the profitability. Sai Swadhin Commercials Private Limited (SSCPL) was incorporated in August, 2008, however after remaining dormant for seven years the company started commercial operation from April 2015. The company was promoted by Mr. Jami Ramesh, Mr. Jami Sivasai , Mrs. Jami Kavita and Mrs. Jami Nirmala based out of Koraput, Odisha. Since its inception, the company has been engaged in extraction of cashew nut shell liquid and cashew de-oiled cake at its plant located at Ganjam, Odisha. The plant has a processing capacity of 252,000 quintals for cashew de-oiled cake and 108,000 quintals for cashew nut shell liquid. The company procures its raw materials from domestic markets and sales through dealers across all over India. Presently, the company has around 25 dealers. SANAA DISTRIBUTORS: CRISIL Withdraws B Rating on INR10cr Loan ------------------------------------------------------------- CRISIL has reaffirmed its ratings on the bank facilities of Sanaa Distributors India Private Limited (SDIPL) and subsequently withdrawn the ratings at the company's request and on receipt of a no-objection certificate from the bankers. The withdrawal is in line with CRISIL's policy on withdrawal of bank loan ratings. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Channel Financing 10 CRISIL B/Stable (Ratings reaffirmed and Withdrawn) Drop Line Overdraft 2 CRISIL B/Stable (Ratings Facility reaffirmed and Withdrawn) SDIPL was set up as a proprietorship concern named Sanaa Associates by Mr Abdul Salam C M, and was reconstituted as a private limited company with the present name in October 2013. The company is an authorised distributor of Samsung smartphones and accessories in Ernakulam (Kerala). It has a network of 72 dealers. SAVANI INFRACON: CARE Assigns B+ Rating to INR25cr LT Loan ---------------------------------------------------------- CARE Ratings has assigned rating to the bank facilities of Savani Infracon LLP (SIL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 25 CARE B+; Stable Assigned Detailed Rationale & Key Rating Drivers The rating assigned to the bank facilities of SIL is constrained on account of high project implementation risk associated with ongoing project, risk related to timely receipt of advances coupled with presence in a cyclical and highly fragmented real estate industry. The rating, however, derives comfort from experienced promoters and established track record of the group in executing various projects. The ability of SIL to complete its on-going project and sale of its units at envisaged prices along with timely realization of sales proceeds is the key rating sensitivity. Detailed description of the key rating drivers Key Rating Weaknesses High project implementation risk: SIL started construction activities of 'World Centre 3' from June 2017 and it is expected to be completed by end of September 2019. Till February 04, 2018, the firm has incurred cost to the extent of 29.02% out of total project cost of INR116.25 crore. With balance major costs yet to be incurred, SIL is exposed to project implementation risk. Risk related to timely receipt of advances: Till February 04, 2018, SIL has not received any booking advance towards the project and the costs incurred towards the project are primarily funded through partners' contribution. With booking advances yet to be received, SIL is exposed to timely receipt of overall advances towards the project. Presence in a cyclical and highly fragmented real estate industry: The life cycle of a real estate project is long and the state of the economy at every point in time, right from land acquisition to construction to actual delivery, has an impact on the project. This capital intensive sector is extremely vulnerable to the economic cycles. Currently, slowdown in sales of units and volatile input costs has increased liquidity concerns for highly leveraged players. Further, the real estate sector in India is highly fragmented with presence of many regional players, who have significant presence in their respective local markets which in turn leads to intense competition within the industry. Key Rating Strengths Experienced promoters supported by a professional team: SIL is managed by Mr. Vishal Sheth, Mr. Madhavray Savani and Mrs. Narmadaben Savani. Mr. Vishal Sheth is holding total experience of more than a decade into real estate business. Further, the entity has been supported a professional team. Mr. Arun Savani, who is an engineer by profession, involved in the proposed project i.e. World Centre 3 as a key technical person. He holds total experience of more than two decades into same line of business. Further, Savani group has a strong presence in Ahmedabad's market by completing various Residential and Commercial projects. Location Advantage: SIL is constructing 'World Centre 3' at Sabarmati Riverfrtont, which is very near to the already established business hub at Ashram Road, Ahmedabad. Further, its close proximity to Airport, Railway Station and Bus Station is giving an add-on benefit to the project. Ahmedabad (Gujarat) based, SIL was established as a limited liability partnership firm in March 2017. Mr. Madhavray K. Savani, Mrs. Narmadaben M. Savani and Mr. Vishal S. Sheth are the key partners of the firm. The firm is engaged into Real Estate Development. Currently the firm is constructing a commercial project known as 'World Centre 3' at Ahmedabad with the total cost of INR116.25 crore and till February 04, 2018 the firm has incurred cost of INR33.74 crore towards the project. The project consists of 11 storey building for 5 shops and 42 offices (aggregate 47 units) on Sabarmati Riverfront, Ashram Road, Ahmedabad Gujarat. The firm has commenced project from June, 2017 and it is expected to be completed by September, 2019. The firm belongs to Savani group which is into same line of business for more than a decade and successfully completed five projects. SIDDHAM JEWELS: CRISIL Cuts Rating on INR5cr Cash Loan to D ----------------------------------------------------------- CRISIL has downgraded its long-term rating on bank facility availed by Siddham Jewels Private Limited (SJPL) to 'CRISIL D Issuer not cooperating' from 'CRISIL C; issuer not cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 5 CRISIL D (ISSUER NOT COOPERATING; Downgraded from 'CRISIL C ISSUER NOT COOPERATING') Proposed Long Term 5 CRISIL D (ISSUER NOT COOPERATING; Bank Loan Facility Downgraded from 'CRISIL C ISSUER NOT COOPERATING') CRISIL has been consistently following up with SJPL, seeking the information required for ratings review, through letters dated December 18, 2017 and January 17, 2018, 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'. This rating lacks a forward-looking component, as it has been arrived at, without any management interaction, and is based on best available, 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 SJPL, which restricts CRISIL's ability to take a forward-looking view on the entity's credit quality. CRISIL believes information available on SJPLis consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower'. CRISIL has downgraded its long-term rating on bank facility availed by SJPL to 'CRISIL D Issuer not cooperating' from 'CRISIL C; issuer not cooperating'. The downgrade reflects the confirmation of the fact that account has been classified as an NPA (Non-Performing Asset), as per the latest information available. Analytical Approach CRISIL consolidates the business and financial profile of Sancheti Ornaments Pvt Ltd (SOPL), Siddham SJPL and Osia Jewels Private Limited (OJPL) as all the entities are in similar line of business and are managed by the same management. Sancheti Group is promoted by Mr Ashok Sancheti and his family. The three group companies, SOPL, SJPL and OJPL were setup in 2011 in Mumbai to manufacture and wholesale gold jewellery. The promoters have been in business since 1988. SIVAPARAMESH SPINNING: CRISIL Moves B+ Rating From Not Coop. ------------------------------------------------------------ CRISIL is migrating the ratings of Sivaparamesh Spinning Mill Pvt Ltd (SSMPL) from CRISIL B+/Stable/CRISIL A4 Issuer Not Cooperating to 'CRISIL B+/Stable/CRISIL A4'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Bank Guarantee 0.18 CRISIL A4 (Migrated from 'CRISIL A4 ISSUER NOT COOPERATING') Cash Credit 4.00 CRISIL B+/Stable (Migrated from 'CRISIL B+/Stable ISSUER NOT COOPERATING') Proposed Long Term .22 CRISIL B+/Stable (Migrated Bank Loan Facility from 'CRISIL B+/Stable ISSUER NOT COOPERATING') Rupee Term Loan 5.60 CRISIL B+/Stable (Migrated from 'CRISIL B+/Stable ISSUER NOT COOPERATING') Due to inadequate information and in line with Securities and Exchange Board of India guidelines, CRISIL had migrated the ratings on the bank facilities of SSMPL to 'CRISIL B+/Stable/CRISIL A4; Issuer not cooperating'. However, the company's management has started sharing the requisite information for a comprehensive review of the ratings. Hence, CRISIL is migrating the ratings from CRISIL B+/Stable/CRISIL A4 Issuer Not Cooperating to 'CRISIL B+/Stable/CRISIL A4'. The ratings continue to reflect the company's weak financial risk profile and small scale of operations. These weaknesses are offset by established relationships maintained by promoters, with various suppliers and customers. Key Rating Drivers & Detailed Description Weaknesses * Weak financial risk profile: Financial risk profile is marked by a small networth and high gearing of about 2.34 crore and 3.86 times, respectively, estimated as on March 31, 2018, mainly constrained by high reliance on bank debt. Debt protection metrics were moderate, marked by estimated interest coverage of 2.5 times estimated for fiscal 2018. * Small scale of operations and customer concentration risk: Intense competition in the spinning industry may continue to constrain the scale of operations and bargaining power with customers and suppliers. This is also reflected in operating income of INR26 crore estimated for fiscal 2018. Further, as over 70% of revenue is received from a single client, the business risk profile remains vulnerable to continued offtake and policies of this player. Strength * Extensive experience of the promoters: The decade long experience of the promoters and their established relationship with clients and suppliers, should continue to support the business risk profile over the medium term. Outlook: Stable CRISIL believes SSMPL will continue to benefit from the extensive experience of its promoter and their established relationships with clients. The outlook may be revised to 'Positive' if growth in revenue and profitability and better working capital management, strengthen the financial risk profile. The outlook may be revised to 'Negative' if any major capital expenditure, or higher reliance on bank debt, weakens the financial risk profile. SSMPL was set up in 2014 at Salem, Tamil Nadu. The company manufactures cotton yarn, and its operations are managed by Mr Shiva Kumar. STORK FERRO: CRISIL Assigns B+ Rating to INR28cr Cash Loan ---------------------------------------------------------- CRISIL has revoked the suspension of its ratings on the long-term bank facilities of Stork Ferro and Mineral Industries Private Limited (Stork), and assigned its 'CRISIL B+/Stable/CRISIL A4' rating to the facilities. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 28 CRISIL B+/Stable (Assigned; Suspension Revoked) Foreign Exchange 0.5 CRISIL A4 (Assigned; Forward Suspension Revoked) Letter of Credit 21.0 CRISIL A4 (Assigned; Suspension Revoked) CRISIL had suspended the ratings on November 23, 2014, on account of non-cooperation by Stork with CRISIL's efforts to undertake a review of the ratings. The company has now shared the requisite information, enabling CRISIL to assign its ratings. The ratings reflect the nascent stages of operations and project related risk. These rating weakness are partially offset by promoter extensive experience in the industry, funding support from promoters and expected above average financial risk profile. Key Rating Drivers & Detailed Description Weaknesses: * Nascent stages of operations: The commercial unit of the company is under construction and operations are expected to commence from second quarter of fiscal 2019. Nascent stages of operation will impinge the business risk profile over the medium term. * Project related risks: As the project is under construction with funding from parent company (the major source of funding), the company is exposed to risks related to funding, if there is a shortage of funds for the timely completion of the project. Moreover, owing to nascent stage of operations, the company will also be exposed to demand risk, however, it is likely to get mitigated with promoters' experience and established relations in the industry. Strengths: * Experience of promoters: Promoters have been in the business for over two decades and have established their name in the industry. Over the years, the promoters have successfully established a procurement and distribution network that has been led to ready set of distributors and suppliers of the company. Backed by established procurement & distribution network, company is expected to witness significant revenue in 1st year of its operations post the commencement of operations. * Funding support from promoters: The Company draws comfort from the funding support of its promoters. The promoters have regularly infused equity over the years to fund the capex requirements. Funding support from the promoters is likely to provide a cushion to company's liquidity. * Expected above average financial risk profile: The Company is expected to have an above average financial risk profile, as the company is long term debt free company with high expected net worth. Outlook: Stable CRISIL believes that Stork Ferro and Minerals Industries Private Limited (Stork) will continue to benefit from the extensive track record of promoters. The outlook may be revised to 'Positive' if Stork stabilizes operations of its manufacturing unit in a timely manner and generates higher 'than 'expected revenue and profitability leading to higher cash accruals. Conversely, the outlook may be revised to 'Negative' in case the company faces delays in the commencement of its operations, or generates lower- than expected cash accruals during the initial phase of its operations, resulting in a pressure on its liquidity. Stork, incorporated in 2006, is a wholly owned subsidiary of Stork Holding Gmbh (SH). It is engaged in manufacturing of Ferrochrome Stainless Steel (previously it was engaged in manufacturing of silico manganese and shut down its operations in October 2012 due to recession and lower global demand). The company is likely to commence its operations in June 2018. SUNREN INDUSTRIES: CRISIL Assigns B+ Rating to INR4.25cr Loan ------------------------------------------------------------- CRISIL has assigned its 'CRISIL B+/Stable' rating to the long- term bank facilities of Sunren Industries Private Limited (SIPL). Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 2.00 CRISIL B+/Stable (Assigned) Term Loan 4.25 CRISIL B+/Stable (Assigned) The rating reflects working capital-intensive operations, weak financial risk profile and exposure to intense competition in the home appliances segment. These rating weaknesses are partially offset by the extensive industry experience of the promoters. Analytical Approach An unsecured loan of INR3.90 crore as on March 31, 2018, is treated as neither debt nor equity as the loan is expected to remain in business over the medium term. Key Rating Drivers & Detailed Description Weakness * Working capital-intensive operations: Gross current assets (GCAs) were high at 252 days, driven by receivables of around 130 days, as on March 31, 2018. This was mainly on account of a large order from Big Bazaar in the last quarter of the fiscal. Though operations are likely to remain working capital intensive, this may improve over the medium term with stricter policies on debtors and inventory in place. * Weak Financial Risk Profile: Financial risk profile of the company is marked by negative networth which is expected to improve gradually with stable accretion to reserves over the medium term. The gearing of the company has also remained negative on account of negative. The debt protection metrics also remained moderate with interest coverage ratio (ICR) and NCATD of around 3 times and 0.07 times respectively as on 31st March 2018. * Exposure to intense competition in the home appliances segment The Indian home appliances market is intensely competitive. With the entry of several large players over the past few years, there has been significant price competition, which has adversely affected the operating profitability of most players. Raw material price fluctuations accentuate the pressure on profitability because of the inability of players to pass on any cost increase to customers. Profitability will remain exposed to intense competition and to the consolidation witnessed across large consumer goods players in the domestic market. Strengths * Extensive industry experience of the promoters: Mr Subhash Saini, one of the promoters, has an experience of around 30 years in the automotive ancillaries industry. The extensive experience of the promoter has helped SIPL bag repeated orders for wheel cylinders from Bosch Ltd. The company also has established a good reputation among other original equipment manufacturers (OEMs) such as like Singer Corporation, Sunflame Enterprises Private Limited, and Kelvinator. Benefits from the established relationship with customers should continue over the medium term. Outlook: Stable CRISIL believes SIPL will continue to benefit from the extensive industry experience of its promoters. The outlook may be revised to 'Positive' if revenue and cash accrual improve significantly, while the customer profile is diversified further. The outlook may be revised to 'Negative' in case of significant, debt-funded capital expenditure, or a sharp decline in profitability, adversely affecting the financial and liquidity risk profile. SIPL was incorporated in 2013, promoted by Ms Renuka Singh, Ms Minakshi Saini, Mr Yudhveer Singh, and Mr Subhash Saini. The company manufactures home appliances mainly juicers and mixer- grinders for OEMs such as Singer Corporation, Sunflame Enterprises Private Limited, and Kelvinator. It also manufactures car brake parts (wheel cylinders) for Bosch Ltd. SUPER SHIV: CRISIL Withdraws D Rating on INR21.25cr Loan -------------------------------------------------------- CRISIL has withdrawn its ratings on the bank facilities of Super Shiv Shakti Chemicals Private Limited (SSCPL) on the request of the company and receipt of a no objection / due certificate from its bank. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 21.25 CRISIL D (Issuer Not Cooperating; Rating Withdrawn) Term Loan 12.75 CRISIL D (Issuer Not Cooperating; Rating Withdrawn) CRISIL has been consistently following up with SSCPL for obtaining information through letters and emails dated April 20, 2017, and April 24, 2017, 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 they are arrived at without any management interaction and are based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of SSCPL. This restricts CRISIL's ability to take a forward looking view on the credit quality of the entity. As SSCPL's management has not been cooperative, the rating action is based on best available information. CRISIL has obtained information, from sources it believes to be reliable, that SSCPL's liquidity is under pressure and the company has not been regular in servicing its debt. CRISIL has withdrawn its ratings on the bank facilities of SSCPL on the request of the company and receipt of a no objection / due certificate from its bank. The rating action is in line with CRISIL's policy on withdrawal of its ratings on bank loans. SSCPL is engaged into manufacturing of industrial explosives, detonating fuse and detonators. It has its manufacturing facility based in Bhilwara and was incorporated in 2005. SUPER-TECH PLASTPACK: CRISIL Assigns B Rating to INR4.9cr Loan -------------------------------------------------------------- CRISIL has assigned its 'CRISIL B/Stable' rating to the bank facilities of Super-Tech Plastpack Private Limited (SPPL). Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 0.8 CRISIL B/Stable (Assigned) Term Loan 4.9 CRISIL B/Stable (Assigned) The ratings reflect the company's exposure to project implementation risk and expected modest scale of operations. These weaknesses are partially offset by the extensive experience of the promoters in the packaging industry. Key Rating Drivers & Detailed Description Weakness * Exposure to project implementation risk: SPPL's project for setting up a manufacturing unit for plastics caps is in the nascent stage of implementation, and the company faces project implementation risk. Timely completion of the project and stabilization of operations without any cost overrun will remain key rating sensitivity factors. * Modest scale of operations: Given the fixed asset base, scale of operations are expected to remain modest in the medium term. Therefore, scale of operations and intensive competition remain a key monitor able factor in the medium term. Strength * Extensive experience of the promoters: Promoters of SPPL have experience of more than decade through group concern Super-Tech Crown Caps. The promoters' long track record in the industry has enabled them to build established relationships with customers like Amul cool. CRISIL believes that SPPL will benefit from the extensive experience of its promoters and its established relationships with clients, over the medium term. Outlook: Stable CRISIL believes SPPL will benefit from the extensive experience of its promoters. The outlook may be revised to 'Positive' if there is timely stabilization of operations and healthy ramp-up in sales. The outlook may be revised to 'Negative' if commencement of operations is delayed, or if revenue and profitability are lower than expected. Incorporated in 2017 and based in Gujarat, SPPL is setting up a plant to manufacture plastic caps at Veraval in Rajkot. The company is promoted by Mr Jignesh Barasiya, Mr Sandeep Barasiya, and Mr Amitbhai Vagadiya. It is likely to commence operations in August 2018. T LINE: CRISIL Reaffirms 'B' Rating on INR5.0cr Cash Loan --------------------------------------------------------- CRISIL has reaffirmed its 'CRISIL B/Stable/CRISIL A4' ratings on the bank facilities of T Line Infra Private Limited (TIPL). Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Bank Guarantee 0.5 CRISIL A4 (Reaffirmed) Cash Credit/ Overdraft facility 5.0 CRISIL B/Stable (Reaffirmed) Long Term Bank Facility 0.5 CRISIL B/Stable (Reaffirmed) The ratings continue to reflect modest scale of TIPL's operations in the intensely competitive civil construction industry, exposure to risk of geographical concentration, and below-average financial risk profile. These weaknesses are partially offset by the experience of the promoters. Key Rating Drivers & Detailed Description Weaknesses * Modest scale of operations amid intense competition and exposure to geographical concentration: Revenue has been modest, estimated at around INR10 crore in fiscal 2018 (against INR9 crore in fiscal 2017). Intense competition may continue to restrict scalability and limit pricing power, thereby constraining profitability. * Below-average financial risk profile: Networth is estimated to remain negative around INR(1.9) crore as on March 31, 2018, with high gearing of (2.45) times. Net cash accrual to total debt (NCATD) and interest coverage ratios were weak estimated at 3% and 1.3 times in fiscal 2018. Financial risk profile may remain below average due to operational losses incurred in fiscals 2015 to 2017. Strength * Experience of promoters: Benefits from the promoters' experience of over two decades, their strong understanding of the local market dynamics, and healthy relations with customers and suppliers should continue to support the business. Outlook: Stable CRISIL believes TIPL will continue to benefit from the experience of the promoters. The outlook may be revised to 'Positive' if significant improvement in scale of operations, efficient working capital management, and better capital structure strengthen financial risk profile. Conversely, the outlook may be revised to 'Negative' if lower-than-expected revenue or profitability, stretched working capital cycle, or any large, debt-funded capital expenditure weakens financial risk profile further. TIPL, incorporated in 2012 at Kochi, undertakes civil construction work mainly related to foundation engineering and piling work. Mr K V Abraham and Mr Antony Thomas manage the business. ==================== N E W Z E A L A N D ==================== INMOTION GROUP: ManaBus and Naked Bus to Cease Operations --------------------------------------------------------- Damien Venuto at The New Zealand Herald reports that 50 jobs are on the line after budget coach services ManaBus and Naked Bus confirmed that they will cease operations in July. A spokesperson wouldn't comment further about what would happen to the ManaBus and Naked Bus staff but said that they were working closely with the 50 staff members to support them through this transition, the report says. The companies are part of InMotion Group, which also operates Fullers, 360 Discovery, Roam Experiences and Waiheke Bus Company, the NZ Herald discloses. The NZ Herald relates that a spokeswoman for Mana said that the decision to end the budget bus operations was in order to focus more exclusively on the company's Ferry services. "Fullers Group is consolidating its business to focus on its ferry operation and on servicing Auckland's popular Hauraki Gulf, which has considerable potential due to rising visitor numbers," the report quotes a spokeswoman as saying. The spokesperson said the ManaBus and Naked Bus fleets had been sold to Ritchies Transport Holdings as part of the decision to exit the space. "As of July 15, ManaBus.com and nakedbus.com bus services will cease operation and tickets will no longer be available to purchase," the spokeswoman said. Customers who bought tickets in advance have already been offered full refunds via email, the report notes. "Fullers is working closely with its staff, partners and customers throughout this process to support them through this transition," she said. ManaBus was first launched as a budget travel option in 2014 by Scottish transport entrepreneur Brian Souter, adding to a portfolio that included Auckland urban bus companies Howick and Eastern Buses, the Wellington-based bus service Mana Coach Services and Waiheke Bus Company, as well as the Auckland Fullers Group ferries and the 360 Discovery cruises, according to the NZ Herald. In May 2015, Souter's company acquired rival Naked Bus in a bid to expand the company's footprint across the South Island. At the time of the acquisition of NakedBus, Manabus said the combined entities across the entire portfolio transported more than 13 million customers a year and employed 670 people, the report discloses. =============== P A K I S T A N =============== PAKISTAN: Moody's Alters Outlook to Neg., Affirms B3 Ratings ------------------------------------------------------------ Moody's Investors Service changed the outlook on Pakistan's rating to negative from stable and affirmed the B3 local and foreign currency long-term issuer and senior unsecured debt ratings. The decision to change the outlook to negative is driven by heightened external vulnerability risk. Foreign exchange reserves have fallen to low levels and, absent significant capital inflows, will not be replenished over the next 12-18 months. Low reserve adequacy threatens continued access to external financing at moderate costs, in turn potentially raising government liquidity risks. The decision to affirm the B3 rating reflects Pakistan's robust growth potential, supported by ongoing improvements in energy supply and physical infrastructure, which are likely to raise economic competitiveness over time. These credit strengths balance Pakistan's fragile external payments position and very weak government debt affordability owing to low revenue generation capacity. Concurrently, Moody's has affirmed the B3 foreign currency senior unsecured ratings for The Second Pakistan Int'l Sukuk Co. Ltd. and The Third Pakistan International Sukuk Co Ltd. The associated payment obligations are, in Moody's view, direct obligations of the government of Pakistan. Pakistan's Ba3 local currency bond and deposit ceilings remain unchanged. The B2 foreign currency bond ceiling and the Caa1 foreign currency deposit ceiling are also unchanged. The short- term foreign currency bond and deposit ceilings remain unchanged at Not-Prime. These ceilings act as a cap on the ratings that can be assigned to the obligations of other entities domiciled in the country. RATINGS RATIONALE RATIONALE FOR THE NEGATIVE OUTLOOK HEIGHTENED EXTERNAL VULNERABILITY RISKS AS ONGOING BALANCE OF PAYMENT PRESSURES ERODE FOREIGN EXCHANGE BUFFERS Moody's expects Pakistan's external account to remain under significant pressure. The coverage by foreign exchange reserves of imports will likely fall further from already low levels, while coverage of external debt payments due will weaken from currently adequate levels. In turn, higher foreign currency borrowing needs, in combination with the low levels of foreign exchange buffers, risks weighing on the ability of the government to access external financing at moderate costs. First, external vulnerability risks are related to Pakistan's sizeable current account deficit, which Moody's expect will only narrow slightly to around 4-4.3% of GDP over the next few years, after an expected 4.6% in fiscal 2018 (FY2018, fiscal year ending June 2018) and compared to an average deficit of around 1.5% between FY2014 and FY2016. Further, continued growth in imports of goods -- driven by demand for capital goods under the China-Pakistan Economic Corridor (CPEC) project, higher fuel prices and robust household consumption -- will prevent a significant narrowing of the current account deficit. Although goods exports have picked up since the start of 2018, growing around 10-15% year-on-year in US dollar terms, they only amount to half the level of goods imports. While Moody's assumes continued strong growth in exports, this will not be enough to narrow the trade gap. As a result, unless capital inflows increase significantly, Moody's does not expect official foreign exchange reserves to replenish from their current low levels. Stable foreign direct investment (FDI) inflows, in particular, have not kept pace with the increased outflows driven by trade. As of end-May 2018, official foreign exchange reserves were around $10 billion, down more than 40% from their October 2016 peak and sufficient to cover just two months of imports. Under Moody's baseline projection, the import cover of reserves will likely fall to around 1.7-1.8 months over the next fiscal year, below the adequacy level of three months generally recommended by the International Monetary Fund. Moody's expects the government's tax amnesty scheme, which expires in June 2018, to have a modest impact of around $2-3 billion in foreign exchange inflows. Second, the coverage by foreign exchange reserves of external debt payments due is weakening, pointing to further external vulnerability risks. With a significant rise in equity inflows unlikely, Moody's expects Pakistan's external financing gap to be met by increased foreign currency borrowing, mainly by the government. Pakistan's External Vulnerability Indicator, the ratio of external debt payments due over the next year plus total nonresident deposits over one year to foreign exchange reserves, will rise to over 120% in FY2019 and further in FY2020, from around 80-85% at the start of FY2018. While policymakers have started to respond to the external pressures, the policy tools available are politically challenging and would likely have a negative economic impact. The authorities have so far allowed the Pakistani rupee to depreciate by a total of 15% against the US dollar since December 2017, raised policy rates by a total of 75 basis points, and imposed regulatory duties on imports of nonessential goods. Moody's expects these measures to contribute to somewhat lower growth, at 5.2% on average over the next two fiscal years, from an expected 5.8% in FY2018, and higher inflation at 7.0% in FY2019, from around 4% in FY2018. Further currency depreciation, higher policy rates, fiscal tightening, and/or higher regulatory duties would likely weigh further on growth and raise inflation above Moody's current projections. RATIONALE FOR THE RATING AFFIRMATION ROBUST GROWTH POTENTIAL, SUPPORTED BY INFRASTRUCTURE PROJECTS Pakistan's relatively strong growth potential, enhanced by investment that strengthens and stabilizes power supply, provides the economy with some capacity to absorb external or domestic shocks. Notwithstanding a moderate slowdown in near-term economic activity induced by policy tightening, Moody's expects GDP growth in Pakistan to remain robust, above 5%. Pakistan's growth potential has risen in part with the gradual elimination of the country's chronic energy shortage, which encourage investment in other sectors. Moody's expects the ongoing implementation of CPEC-related infrastructure projects to raise the country's growth potential further, by improving road and rail connectivity within Pakistan, and allowing it to function as a transport and logistics hub under China's Belt and Road Initiative. CPEC-related investments over FY2019 and FY2020 include the ongoing implementation of further energy projects, infrastructure projects such as the Karachi Circular Railway, the Karachi- Lahore-Peshawar Railway, and a highway connecting Gwadar and Quetta, which will shorten travel times in the western route of CPEC, and the establishment of special economic zones aimed at boosting Pakistan's export sector. That said, Pakistan's very low economic competitiveness remains a significant credit constraint. The country's global competitiveness ranking is low compared to peers, at 115th out of 138 countries according to the World Economic Forum's 2017-2018 Global Competitiveness Report, due mainly to poor infrastructure (including the chronic power supply shortage that is gradually being addressed), weak institutions, and deficiencies in health and primary education. Like many of its South Asian neighbors, Pakistan is also vulnerable to climate change risk. The magnitude and dispersion of seasonal monsoon rainfall continues to influence agricultural sector growth and rural household consumption. As a result, both droughts and floods can create economic and social costs for the sovereign. LOW REVENUE GENERATION CAPACITY, HIGH GROSS BORROWING WEIGH ON DEBT AFFORDABILITY In addition to the fragile external payments position, Pakistan's weak revenue generation capacity is a main credit constraint for the sovereign. Moody's expects government revenue to remain around 16% of GDP over the next two fiscal years -- one of the lowest globally -- albeit gradually increasing given the authorities' focus on expanding the tax base and raising tax compliance. As a result, debt affordability will remain among the weakest across Moody's rated sovereigns and constrain the government's fiscal space, particularly in light of ongoing infrastructure and social spending needs. Moody's expects the government's fiscal deficit to remain around 5% of GDP in FY2019 and FY2020, after a projected deficit of 5.8% in FY2018. Unless nominal GDP growth deteriorates substantially, Moody's does not anticipate that the government's debt burden will rise significantly. However, the debt burden will not fall from the current, relatively high levels, hovering around 70-73% of GDP. As a result of persistent deficits and a significant share of overall debt being financed through short-term securities, the government's gross borrowing requirement is one of the highest across Moody's rated sovereigns, and expected to remain around 27-30% of GDP over the next two fiscal years. With Treasury bills estimated at around 12% of FY2018 GDP, and an average maturity of government debt of less than four years, a sudden rise in the cost of debt beyond Moody's assumptions would have a rapid and significant negative effect on debt affordability. WHAT COULD CHANGE THE RATING UP The negative outlook signals that a rating upgrade is unlikely. The outlook would likely be changed to stable if external vulnerability risks decreased materially and durably, including through policy adjustments that strengthen the external payments position. A resumption of fiscal consolidation pointing to a meaningful reduction in the debt burden would also be credit positive. WHAT COULD CHANGE THE RATING DOWN A further deterioration in Pakistan's external position, including a more pronounced erosion of foreign reserve buffers, which would threaten the government's external repayment capacity and heighten liquidity risks further, would likely result in a downgrade of the rating. Expectations that government debt would continue to rise markedly, with a related deterioration in debt affordability from already weak levels, would also put downward pressure on the rating. GDP per capita (PPP basis, US$): 5,095 (2017 Actual) (also known as Per Capita Income) Real GDP growth (% change): 5.4% (2017 Actual) (also known as GDP Growth) Inflation Rate (CPI, % change Dec/Dec): 3.9% (2017 Actual) Gen. Gov. Financial Balance/GDP: -5.6% (2017 Actual) (also known as Fiscal Balance) Current Account Balance/GDP: -4.1% (2017 Actual) (also known as External Balance) External debt/GDP: 27.3% (2017 Actual) Level of economic development: Very Low level of economic resilience Default history: At least one default event (on bonds and/or loans) has been recorded since 1983. SUMMARY OF MINUTES FROM RATING COMMITTEE On June 18, 2018, a rating committee was called to discuss the rating of the Pakistan, Government of. The main points raised during the discussion were: The issuer's economic fundamentals, including its economic strength, have not materially changed. The issuer's institutional strength/ framework, have not materially changed. The issuer's fiscal or financial strength, including its debt profile, has not materially changed. The issuer's susceptibility to event risks has not materially changed. The principal methodology used in these ratings was Sovereign Bond Ratings published in December 2016. ================= S I N G A P O R E ================= CW GROUP: Unable to Redeem SGD Bonds; Faces Statutory Demands ------------------------------------------------------------- The Strait Times reports that CW Group expects it will not be able to repay Singapore dollar-denominated (SGD) notes and pay a final dividend to shareholders due to its inability to raise new money from investors. In a Singapore Exchange filing on June 21, it also disclosed the receipt of statutory demands from its lender, Bank of China (Hong Kong), on June 4 and June 7 for the immediate repayment of HK$157.5 million and US$14.5 million in banking and trade financing facilities from the group, its two executive directors and its subsidiary, CW Advanced Technologies Limited, the report relates. According to the report, CW Group said that it was unable to sell Series 2 notes under a SGD500 million multi-currency debt issuance programme due to unfavorable market conditions since April. The Strait Times relates that the proceeds from the issuance of Series 2 notes were meant to redeem some SGD55.25 million outstanding from its Series 1 notes due on June 27, pay a final dividend of 2.36 HK cents per share by July 27 and settle the bank loans. The company has hired Singapore-based RSM Corporate Advisory, Morgan Lewis Stamford, Rajah & Tann and Hong Kong-based Akin Gump Strauss Hauer & Feld to work on a refinancing plan, the report discloses. Headquartered in Singapore, CW Group Holdings Ltd. -- http://www.cwgroup-int.com/-- manufactures machine tools. The Company also conducts feasibility studies, designs, sources assemblies, components and parts, manufactures, installs and tests its products and offers after-sales support. CW Group serves customers in the precision machine tool engineering, construction materials, solar energy, electronics, and other industries. ********* 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 ***