/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/180629.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 29, 2018, Vol. 21, No. 128 Headlines A U S T R A L I A AMPETUS ENERGY: Rodgers Reidy Appointed as Liquidator FRANK D' URBANO: Second Creditors' Meeting Set for July 5 MCCOMBIE CONSTRUCTION: Second Creditors' Meeting Set for July 4 MICROVATUM PTY: First Creditors' Meeting Set for July 5 NRG PIPING: First Creditors' Meeting Scheduled for July 5 QUARTER BENEFITS: Second Creditors' Meeting Set for July 5 SIMON MASONRY: First Creditors' Meeting Set for July 5 WIRE NETWORKS: First Creditors' Meeting Set for July 5 C H I N A SHANDONG YUHUANG: S&P Alters Outlook to Neg., Affirms 'B+' ICR I N D I A AMAZON TECHNOCAST: CRISIL Migrates B+ Rating to Not Cooperating ARTHI TEXTILES: CRISIL Migrates B+ Rating to Not Cooperating AZAMGARH NAGAR: Ind-Ra Withdraws 'BB' Long Term Issuer Rating BALAJI RICE: CRISIL Migrates B Rating to Not Cooperating Category BHARAT AGRO: CRISIL Migrates B+ Rating to Not Cooperating BPL TECHNO: CRISIL Lowers Rating on INR5cr Cash Loan to D CADCHEM LABORATORIES: CARE Migrates B+ Rating to Not Cooperating CHANDAN REALITIES: CRISIL Migrates B- Rating to Not Cooperating DAMASHA STAMPING: CARE Migrates Rating to B+/Not Cooperating ELAN AGROCHEM: CRISIL Assigns 'B' Rating to INR7cr Term Loan ESS EMM: CRISIL Migrates B Rating to Not Cooperating Category GOURMET EMPIRE: CARE Migrates Rating to B/Not Cooperating HAREKRISHNA RICE: Ind-Ra Assigns B- Issuer Rating, Outlook Stable HAYATH FOODS: CARE Migrates B Rating to Not Cooperating Category HONEST MARKETING: CRISIL Migrates B Rating to Not Cooperating JAI BHARAT: CRISIL Migrates B Rating to Not Cooperating Category KARUPPASWAMY BUILDERS: CRISIL Moves B+ Rating From Not Coop. Cat. KHANDELWAL GINNING: CRISIL Migrates B+ Rating to Not Cooperating KUSHALAVA SPINNERS: CRISIL Migrates B- Rating to Not Cooperating MANDHANA INDUSTRIES: Gets Extension for Completion of CIRP MAUNATHBHANJAN NAGAR: Ind-Ra Withdraws BB Long Term Issuer Rating MOUNICA EDUCATIONAL: CRISIL Assigns B+ Rating to INR10cr Loan PATWA AUTOMOTIVE: CRISIL Migrates D Rating to Not Cooperating PREMIER SEAFOODS: Ind-Ra Affirms BB+ Issuer Rating PRINT-TECH OFFSET: CRISIL Migrates B Rating to Not Cooperating PUNJAB RICE: CRISIL Moves B+ Rating to Not Cooperating Category RAJ ISPAT: CARE Migrates B+ Rating to Not Cooperating Category RAJ STEEL: CARE Migrates B+ Rating to Not Cooperating Category RATHI STEELS: Ind-Ra Affirms BB LT Issuer Rating, Outlook Stable SECO WARWICK: CRISIL Migrates B+ Rating to Not Cooperating SHREE RAJENDRA: CRISIL Migrates B+ Rating to Not Cooperating SHREEJI FIBRE: CARE Moves B- Rating to Not Cooperating Category SPECIALITY SILICA: CRISIL Migrates B+ Rating to Not Cooperating SPECIALITY SILICA: CRISIL Migrates B+ Rating to Not Cooperating STARK RIDGE: CRISIL Moves B- Rating to Not Cooperating Category STERLING CAST: CARE Moves B+ Rating to Not Cooperating Category SUD PINES: CARE Migrates B+ Rating to Not Cooperating Category SURAJ TRADELINK: CRISIL Migrates B+ Rating to Not Cooperating SVARRNIM INFRASTRUCTURES: Ind-Ra Hikes LT Issuer Rating to 'BB-' TIRUPUR PANDIT: CRISIL Migrates B Rating to Not Cooperating J A P A N MT. GOX: Begins Civil Rehabilitation Proceedings M A L A Y S I A 1MDB: SSM Wants KPMG to Clarify Status of Audit Reports APFT BHD: Auditor Raises Going Concern Doubt BERJAYA MEDIA: Narrows Net Loss to MYR6.03 Million in 4Q M O N G O L I A BANK OF MONGOLIA: S&P Affirms 'B-/B' ICR, Outlook Stable GOLOMT BANK OF MONGOLIA: S&P Affirms 'B-/B' ICRs, Outlook Stable S I N G A P O R E IBC CAPITAL: Moody's Alters Outlook to Stable, Affirms B2 CFR - - - - - ================= A U S T R A L I A ================= AMPETUS ENERGY: Rodgers Reidy Appointed as Liquidator ----------------------------------------------------- Sophie Vorrath at RenewEconomy reports that Ampetus Energy, a small Victorian energy storage business that had been gathering attention in the market for claiming "the most affordable battery in Australia" - and offering the longest warranty - has gone into liquidation. In a notice published on May 31, insolvency firm Rodgers Reidy said it had been appointed as liquidator of Melbourne-based Ampetus Energy, to wind up the battery company's affairs and to act for its creditors, RenewEconomy relates. The case involves claims from a number of Ampetus Energy customers "who have been or will be seeking refunds from the Company in respect to faulty batteries . . . purchased from the Company," according to the notice cited by RenewEconomy. Ampetus Energy, which is headed up by Melbourne businessman Avrohom Jacks, is cooperating fully with the liquidators, the report says citing One Step. Creditors or customers with inquiries or concerns are urged to contact Rodgers Reidy for more information, adds RenewEconomy. FRANK D' URBANO: Second Creditors' Meeting Set for July 5 --------------------------------------------------------- A second meeting of creditors in the proceedings of Frank D' Urbano Management Services Pty Ltd has been set for July 5, 2018, at 11:00 a.m. at 51 Robinson Street, in Dandenong, Victoria. The purpose of the meeting is (1) to receive the report by the Administrator about the business, property, affairs and financial circumstances of the Company; and (2) for the creditors of the Company to resolve whether the Company will execute a deed of company arrangement, the administration should end, or the Company be wound up. Creditors wishing to attend are advised proofs and proxies should be submitted to the Administrator by July 4, 2018, at 4:00 p.m. Peter Robert Vince and Paul William Langdon of Vince & Associates were appointed as administrators of Frank D' Urbano on May 30, 2018. MCCOMBIE CONSTRUCTION: Second Creditors' Meeting Set for July 4 --------------------------------------------------------------- A second meeting of creditors in the proceedings of McCombie Construction Pty Ltd has been set for July 4, 2018, at 11:00 a.m. at the offices of Chartered Accountants Australia and New Zealand, Level 11, 2 Mill Street, in Perth, WA. The purpose of the meeting is (1) to receive the report by the Administrator about the business, property, affairs and financial circumstances of the Company; and (2) for the creditors of the Company to resolve whether the Company will execute a deed of company arrangement, the administration should end, or the Company be wound up. Creditors wishing to attend are advised proofs and proxies should be submitted to the Administrator by July 3, 2018, at 4:00 p.m. Jimmy Trpcevski of WA Insolvency Solutions was appointed as administrator of McCombie Construction on May 29, 2018. MICROVATUM PTY: First Creditors' Meeting Set for July 5 ------------------------------------------------------- A first meeting of the creditors in the proceedings of Microvatum Pty Ltd will be held at the offices of Jamieson Louttit & Associates, Penfold House, Suite 72, Level 15, 88 Pitt Street, in Sydney, NSW, on July 5, 2018, at 10:00 a.m. Jamieson Louttit of Jamieson Louttit & Associates was appointed as administrator of Microvatum Pty on June 27, 2018. NRG PIPING: First Creditors' Meeting Scheduled for July 5 --------------------------------------------------------- A first meeting of the creditors in the proceedings of NRG Piping Pty Ltd will be held at the offices of Robson Cotter Insolvency Group, Unit 1, 78 Logan Road, in Woolloongabba, Queensland, on July 5, 2018, at 11:00 a.m. William Roland Robson of Robson Cotter Insolvency Group was appointed as administrator of NRG Piping on June 25, 2018. QUARTER BENEFITS: Second Creditors' Meeting Set for July 5 ---------------------------------------------------------- A second meeting of creditors in the proceedings of Quarter Benefits Pty Ltd has been set for July 5, 2018, at 11:00 a.m. at the offices of 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 July 4, 2018, at 4:00 p.m. Daniel Frisken and Mitchell Ball of BPS Recovery was appointed as administrator of Quarter Benefits on March 16, 2018. SIMON MASONRY: First Creditors' Meeting Set for July 5 ------------------------------------------------------ A first meeting of the creditors in the proceedings of: -- Simon Masonry Pty Limited; -- Simon Masonry (NSW) Pty Ltd; -- Simon Masonry Supply Pty Ltd; -- S Masonry Group Pty Ltd; and -- SM Group V2 Pty Ltd will be held at Level 27, 259 George Street, in Sydney, NSW, on July 5, 2018, at 11:00 a.m. Sule Arnautovic & Amanda Young of Jirsch Sutherland were appointed as administrators of Simon Masonry on June 25, 2018. WIRE NETWORKS: First Creditors' Meeting Set for July 5 ------------------------------------------------------ A first meeting of the creditors in the proceedings of Wire Networks Pty Ltd will be held at the offices of Cor Cordis, One Wharf Lane, Level 20, 171 Sussex Street, in Sydney, NSW, on July 5, 2018, at 10:00 a.m. Ozem Kassem and Alan Walker of Cor Cordis were appointed as administrators of Wire Networks on June 25, 2018. ========= C H I N A ========= SHANDONG YUHUANG: S&P Alters Outlook to Neg., Affirms 'B+' ICR -------------------------------------------------------------- S&P Global Ratings revised its outlook on Shandong Yuhuang Chemical Co. Ltd. to negative from stable. S&P said, "At the same time, we affirmed our 'B+' long-term issuer credit rating on the China-based commodity chemical producer and oil refiner. We also affirmed our 'B+' long-term issue ratings on the senior unsecured notes that Yuhuang guarantees. "We revised the outlook to negative to reflect Yuhuang's diminishing liquidity buffer amid tightened liquidity conditions in China. The company's access to long-term debt funding has reduced while it has a material amount of debt maturing in the next 12 months. Yuhuang may need to rely on short-term financing to repay these maturities, which would negatively affect its capital structure, in our view. Creditors' concern that Yuhuang may have to repay debt at bankrupt Hongye Chemical Group Co. Ltd., to which it provided an external guarantee, also contributes to the reduced financing flexibility. "Given Yuhuang's current limited access to the bond market, we believe the company may rely on short-term bank loans or self- generated cash to repay its notes due in the next 12 months. Yuhuang aimed to tap the domestic bond market to refinance its borrowings in 2017 but was not successful. The company repaid its Chinese renminbi (RMB) 500 million notes due in January 2018 using self-generated cash. It has onshore bonds of RMB1.68 billion due in the second half of 2018 and RMB2.0 billion due in 2019, assuming all bondholders exercise their put options. "We expect Yuhuang's liquidity buffer to remain constrained even if we consider that the liquidation of Hongye, which is currently underway, is unlikely to cause imminent cash outflow for the company. So far, Yuhuang has not repaid any of Hongye's loans that it guaranteed. As of end-2017, Yuhuang has provided total external guarantees of RMB2.56 billion, of which RMB1.51 billion is related to Hongye. The Shandong Heze government is leading the liquidation negotiations with creditors, and all creditors have agreed to not accelerate repayment of Hongye's loans or ask Yuhuang to repay the guaranteed debt on behalf of Hongye. Hongye is a chemical manufacturer based in Heze city. "In our view, Yuhuang will be able to roll over its short-term bank loans, given its well-established relationships with banks. However, we see some uncertainty on whether the company can refinance its maturing bonds through more bank borrowings, even though it still has significant unused uncommitted short-term banking facilities. Yuhuang's liquidity position may deteriorate sharply if its relationships with banks weaken or its access to the capital markets remains restricted. "Assuming generally stable refining and chemical margins, we expect Yuhuang to continue to generate mid-to-peak cycle profitability. The company's 2017 performance is in line with our expectation and the first quarter 2018 results are in line with our full year forecasts. "The negative outlook for the next 12 months reflects our view that Yuhuang's capacity to refinance its short-term maturities, particularly through long-term funding, may have weakened. The weakening is due to recent tightened domestic funding conditions and the payment risk on the external guarantee to Hongye. Yuhuang's capital structure may weaken materially if the company relies on short-term refinancing to repay its bonds due. "We could lower the rating by more than one notch if Yuhuang's liquidity deteriorates sharply. This could happen if the company's banking relationships weaken or its access to the bond market remains restricted over a prolonged period. "We could also lower the rating if: (1) Yuhuang's capital structure weakens as indicated by a weighted average debt maturity profile of less than two years; or (2) the company's operating performance deteriorates or capital spending exceeds our base case such that its ratio of FFO to debt falls below 12%. "We may revise the outlook to stable if Yuhuang's liquidity position improves. This could happen if the company is able to refinance its upcoming notes maturities with long-term funding." ========= I N D I A ========= AMAZON TECHNOCAST: CRISIL Migrates B+ Rating to Not Cooperating --------------------------------------------------------------- CRISIL is migrating the rating of Amazon Technocast Private Limited (ATPL) from 'CRISIL B+/Stable Issuer Not Cooperating' to 'CRISIL B+/Stable'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 2 CRISIL B+/Stable (Migrated from 'CRISIL B+/Stable ISSUER NOT COOPERATING') Term Loan 4.12 CRISIL B+/Stable (Migrated from 'CRISIL B+/Stable ISSUER NOT COOPERATING') Due to inadequate information and in line with SEBI guidelines, CRISIL had migrated its rating on the long-term bank facilities of ATPL to 'CRISIL B+/Stable Issuer Not Cooperating'. However, the company's management has 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 continues to reflect modest yet growing scale of operation, working capital requirement, below-average financial risk profile. These rating weaknesses are partly offset by extensive experience of the partners, and their funding support. Analytical Approach CRISIL has treated unsecured loans of INR3.00 crore, extended by the promoter as on March 31, 2018, as neither debt nor equity as the funds are expected to be retained in business over the medium term. Key Rating Drivers & Detailed Description Weaknesses * Modest yet growing scale of operations: The scale of operations, is although modest yet growing. ATPL recorded topline of INR7.95 crore in fiscal 2017 (its first year of operations) and is has clocked revenue of about INR11.69 crore in fiscal 2018. Although the revenue is expected to increase with stabilisation of operations and on account of setting up of new machining facility the scale of operation is expected to be modest over the medium term. * Below-average financial risk profile: Financial risk profile remains constrained by small networth of INR3.00 cr, and relatively high gearing of 3.56 times as on March 31, 2018. * Large working capital requirement: ATPL is expected to have large working capital requirement because of its increasing scale, longer receivables cycle, and moderate inventory. Strength * Promoter's extensive experience in the castings industry and their fund support: The promoters have an experience of 21 years in the casting industry. Their industry association has helped add customers and ramp up operations. The promoters have also extended unsecured loans, and will continue to offer need-based support in the medium term. Outlook: Stable CRISIL believes ATPL will continue to benefit over the medium term from its promoters' extensive experience. The outlook may be revised to 'Positive' in case of a significant and sustained improvement in the scale of operations and profitability, leading to higher cash accrual. Conversely, the outlook may be revised to 'Negative' if lower cash accrual, stretch in the working capital cycle or unanticipated large capital expenditure weakens the financial risk profile, especially liquidity. Incorporated in 2014, ATPL has setup an investment castings unit at Rajkot (Gujarat). The company is promoted by Mr Rajesh Senjaliya and his family who oversee its overall operations. It has also recently set up a windmill for in-house use. ARTHI TEXTILES: CRISIL Migrates B+ Rating to Not Cooperating ------------------------------------------------------------ CRISIL has migrated the rating on bank facilities of Arthi Textiles (AT) to 'CRISIL B+/Stable Issuer not cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 7.5 CRISIL B+/Stable (ISSUER NOT COOPERATING; Rating Migrated) Long Term Loan 2.84 CRISIL B+/Stable (ISSUER NOT COOPERATING; Rating Migrated) Proposed Long Term Bank Loan Facility .66 CRISIL B+/Stable (ISSUER NOT COOPERATING; Rating Migrated) CRISIL has been consistently following up with AT for obtaining information through letters and emails dated May 22, 2018, June 6, 2018 and June 11, 2018, among others, apart from telephonic communication. However, the issuer has remained non cooperative. The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of Arthi Textiles. Which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on Arthi Textiles is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower'. Therefore, on account of inadequate information and lack of management cooperation, CRISIL has migrated the rating on bank facilities of Arthi Textiles to 'CRISIL B+/Stable Issuer not cooperating'. AT, set up in 1995 and based in Coimbatore, Tamil Nadu, manufactures cotton yarn. Its operations are managed by Mr P Ramaswamy. Net Profit was INR2.41 lakh on net sales of INR29.64 crore in fiscal 2016 against net profit of INR2.37 lakh on net sales of INR29.22 crore in fiscal 2015. AZAMGARH NAGAR: Ind-Ra Withdraws 'BB' Long Term Issuer Rating ------------------------------------------------------------- India Ratings and Research (Ind-Ra) has withdrawn Azamgarh Nagar Palika Parishad's Long-Term Issuer Rating of 'IND BB'. The Outlook was Stable. KEY RATING DRIVERS Ind-Ra is no longer required to maintain the rating, as the issuer rating was assigned under the Atal Mission for Rejuvenation and Urban Transformation programme and no specific debt was issued against the rating. COMPANY PROFILE Azamgarh is one of the easternmost districts of Uttar Pradesh and is situated on the banks of the Tamsa river. It is the headquarters of the Azamgarh division. Azamgarh Nagar Palika Parishad is responsible for the provisioning and governance of civic services in the city. BALAJI RICE: CRISIL Migrates B Rating to Not Cooperating Category ----------------------------------------------------------------- CRISIL has migrated the rating on bank facilities of Balaji Rice Industries - Nellore (Balaji) to 'CRISIL B/Stable Issuer not cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 2.5 CRISIL B/Stable (ISSUER NOT COOPERATING; Rating Migrated) Long Term Loan 4.0 CRISIL B/Stable (ISSUER NOT COOPERATING; Rating Migrated) Proposed Long Term 0.5 CRISIL B/Stable (ISSUER NOT Bank Loan Facility COOPERATING; Rating Migrated) CRISIL has been consistently following up with Balaji) for obtaining information through letters and emails dated April 20, 2018, June 7, 2018 and June 11, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of Balaji Rice Industries - Nellore. Which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on Balaji Rice Industries - Nellore is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower'. Therefore, on account of inadequate information and lack of management cooperation, CRISIL has migrated the rating on bank facilities of Balaji Rice Industries - Nellore to 'CRISIL B/Stable Issuer not cooperating'. Set up in 2011 as a partnership between Mr Lokesh and his family members, Balaji is setting up a rice mill in Nellore (Andhra Pradesh), with processing capacity of 8 tonne per hour. BHARAT AGRO: CRISIL Migrates B+ Rating to Not Cooperating --------------------------------------------------------- CRISIL has migrated the rating on bank facilities of Bharat Agro Molecules Limited (BAML) to 'CRISIL B+/Stable Issuer not cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 8 CRISIL B+/Stable (ISSUER NOT COOPERATING; Rating Migrated) Proposed Long Term 6 CRISIL B+/Stable (ISSUER NOT Bank Loan Facility COOPERATING; Rating Migrated) CRISIL has been consistently following up with BAML for obtaining information through letters and emails dated April 20, 2018, May 18, 2018, June 6, 2018 and June 11, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of Bharat Agro Molecules Limited. Which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on Bharat Agro Molecules Limited is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower'. Therefore, on account of inadequate information and lack of management cooperation, CRISIL has migrated the rating on bank facilities of Bharat Agro Molecules Limited to 'CRISIL B+/Stable Issuer not cooperating'. Incorporated in 2010, BAML is promoted by Mr. Deepak Rathi & Ms. Seema Rathi. The company manufactures manures, multi micro nutrient mixture and zinc sulphate. The aggregate capacity of the company is around 28000 MTPA. BPL TECHNO: CRISIL Lowers Rating on INR5cr Cash Loan to D --------------------------------------------------------- CRISIL has downgraded the rating of BPL Techno Vision Private Limited (BTVPL) to 'CRISIL D 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. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 5 CRISIL D (ISSUER NOT COOPERATING; Downgraded from 'CRISIL B-/Stable ISSUER NOT COOPERATING') CRISIL has been consistently following up with BTVPL for obtaining information through letters and emails dated February 7, 2017 and March 22, 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 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 BTVPL. 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 BTVPL is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB Rating category or Lower'. Based on the last available information, CRISIL has downgraded the rating to 'CRISIL D 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. BTVPL, established in 1983 in Bengaluru (Karnataka), manufactures lanterns and home automation equipment. CADCHEM LABORATORIES: CARE Migrates B+ Rating to Not Cooperating ---------------------------------------------------------------- CARE Ratings has migrated the rating on bank facility of Cadchem Laboratories Limited (CLL) to Issuer Not Cooperating category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 9.48 CARE B+; Issuer not cooperating; Facilities Based on best available Information Short term Bank 2.50 CARE A4: Issuer not cooperating; Facilities Based on best available Information Detailed Rationale & Key Rating Drivers CARE has been seeking information from CLL to monitor the rating(s) vide e-mail communications/letters dated June 1, 2018 and numerous phone calls. However, despite CARE's repeated requests, the company has not provided the requisite information for monitoring the ratings. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the publicly available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. The rating on CLL's bank facilities will now be denoted as CARE B+/CARE A4; ISSUER NOT COOPERATING. Detailed description of the key rating drivers At the time of last rating in March 28, 2017 the following were the strength and weakness (updated for information available). Key rating weakness Small scale of operations: Despite being operational for nearly three decades, the scale of operations has remained low marked by a total operating income and gross cash accruals of INR25.75 crore and INR1.25 crore respectively during FY17. Though total operating income increased from INR23.60 crore in FY16 still same remains to be small. The small scale limits the company's financial flexibility in times of stress and deprives it from scale benefits. Moreover, the company also suffers on account of lack of economies of scale. Weak financial risk profile: The profitability margins of the company have increased in FY16-FY17 peirod. PBILDT margin of CLL increased from 10.45% in FY16 to 11.37% in FY17 on account of decline in power and fuel and selling expense. Consequntially and also due decline in interest and depcreciation CLL's PAT margin increased from 0.84% in FY16 to 1.73% in FY17. The capital structure the company marked by with debt equity ratio and overall gearing (including creditors on LC) deteriorated and stood at 0.85x and 2.29x as on March 31, 2017 against 0.70x and 2.23x as on March 31, 2016 mainly on account of Increase in total debt. Company has moderate interest coverage ratio of 1.87x in FY17 , however company has weak Total debt to GCA of 9.31x for FY17 as against interest coverage ratio of 1.66x in FY16 and total debt to gross cash accrual of 11.80x for FY16. Working capital intensive nature of operations: The company maintains stock of various APII's and other raw materials for smooth production process. Moreover, the process of manufacturing of API's involves several steps such as mixing, blending, extraction and resolutions etc. All this resulted in average inventory days of around 117 days during FY17. The credit period extended by CLL to its customers is around 4 month owing to high competition and the payable period received by the company stood at around 83 days for FY17 on account of long standing relationship with its suppliers. Stringent regulations and high competition: The Indian pharma formulation industry has very high entry barriers in highly regulated markets in terms of intellectual property rights and regulatory requirements. Furthermore, Indian Pharmaceuticals Industry is highly fragmented and competitive in nature with large number of small and medium sized players having established brands and marketing set ups. Intense competition in manufacturing of APIs limits pricing flexibility, which constrains their ability of product development and geographical diversification in regulated market. Key rating strengths Experienced management and long track record of operations: CLL has been operating in pharmaceutical industry for nearly three decades, which aid in establishing relationships with both suppliers and customers. Current management viz. Mr. Navneet Gupta, Mrs. Neeru Gupta and Mr. Kishor Deshmukh have accumulated vast experience of around three decades in the pharmaceutical industry through their association with CLL. They collectively look after the operations of the company. Positive outlook of Indian pharmaceutical industry The Indian Pharmaceutical industry (IPI) valued at around US$26 billion (approximately INR1, 117, 860crore), is ranked 14th in value terms and 3rd in volume terms. It manufactures about 60,000 generic brands across 60 different therapeutic categories, about 500 bulk drugs and almost the entire range of formulations. The industry constitutes about 2.5% of the global pharmaceutical production in value terms. The industry has been growing at a healthy rate of 11-13% annually over the last few years with the growth in exports outstripping steady growth in the domestic market. Moreover, the Indian pharmaceutical formulation industry is set to benefit from the impending patent expiry in the regulated markets. Patent expiry of branded drugs will boost the demand for Indian generic products. On the domestic front, the demand will be driven by increasing per capita income, shift in disease profile from acute to chronic diseases and huge potential for expanding lower health insurance penetration in the country. This is expected to aid the companies like CLL which are suppliers of API's to pharmaceutical manufacturers. Cadchem Laboratories Limited (CLL), was originally incorporated September 9, 1985, under the name of Chandigarh Drugs Private Limited by Mr. J. J.Sharma and Ms Meena Singla. Subsequently in 1995, the name changed to CLL. The company is currently being managed by Mr. Navneet Gupta, Mrs Neeru Gupta, Mr. Kishor Deshmukh. CLL is engaged in manufacturing of active pharmaceutical ingredients (API's) at its manufacturing facility located in Mohali, Punjab. The company started commercial production in 1988 with ISONIAZID (anti-tuberculosis), NIACINAMIDE (vitamin) drug as main products, whereas currently the company is supplying API's for formulations present across therapy areas including pain killer and blood thinning agent. The company directly caters to pharmaceuticals manufacturing entities in domestic market like Accent Pharma, BDR Pharmaceuticals International Private Limited and Manglam Drugs and Organics Limited. The company imports its main raw material i.e. numerous Active Pharmaceutical Ingredients Intermediates (APII's) from China and sources its other requirements like chemicals and solvents from domestic suppliers. CHANDAN REALITIES: CRISIL Migrates B- Rating to Not Cooperating --------------------------------------------------------------- CRISIL has migrated the rating on bank facilities of Chandan Realities (CR) to 'CRISIL B-/Stable Issuer not cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Drop Line 7 CRISIL B-/Stable (ISSUER Overdraft NOT COOPERATING; Rating Migrated) Facility CRISIL has been consistently following up with CR for obtaining information through letters and emails dated April 23, 2018, May 8, 2018, June 6, 2018 and June 11, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of Chandan Realities. Which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on Chandan Realities is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower'. Therefore, on account of inadequate information and lack of management cooperation, CRISIL has migrated the rating on bank facilities of Chandan Realities to 'CRISIL B-/Stable Issuer not cooperating'. Furthermore, the company has not paid the fee for conducting rating surveillance as agreed to in the rating agreement. CR was set up in fiscal 2012 by Mr Sushil Bahirat, Mr Nitin Bame, and Mr Girish Jalegaonkar. The firm develops real estate largely in and around Pune. It has one ongoing project -- Chandan Colozium -- a commercial and residential project in Wakad, in a joint development agreement with the land owners. DAMASHA STAMPING: CARE Migrates Rating to B+/Not Cooperating ------------------------------------------------------------ CARE Ratings has migrated the rating on bank facility of Damasha Stamping (DAS) to Issuer Not Cooperating category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 4.22 CARE B+; ISSUER NOT COOPERATING; Facilities Revised from CARE BB; ISSUER NOT COOPERATING Long term/Short 1.50 CARE B+/CARE A4; ISSUER NOT Term Bank COOPERATING; Revised from Facilities CARE BB/CARE A4; ISSUER NOT COOPERATING Detailed Rationale & Key Rating Drivers CARE has been seeking information from DAS to monitor the rating(s) vide e-mail communications/ letters dated April 3, 2018, April 4, 2018, April 6, 2018, April 11, 2018, numerous phone calls and final reminder letter dated April 20, 2018. However, despite CARE's repeated requests, the firm has not provided the requisite information for monitoring the ratings. In the absence of minimum information required for the purpose of rating, CARE is unable to express opinion on the rating. In line with the extent SEBI guidelines CARE's rating on Damasha Stamping's bank facilities and instruments will now be denoted as CARE B+/CARE A4; ISSUER NOT COOPERATING. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above ratings. Detailed description of the key rating drivers At the time of last rating on May 05, 2017 the following were the rating strengths and weaknesses. Key Rating Weaknesses Dip in profit margins: PBILDT margin dipped by 147 bps on account of increase in cost of material consumed and stood at 6.85% during FY15 (FY14:8.32%). Consequently, the PAT margin has also dipped due to higher depreciation expense and stood at 1.48% during FY16 as compared to 1.75% during FY15. Limited financial flexibility due to partnership constitution of the concern: DAS being a partnership firm is exposed to inherent risk of partner's capital being withdrawn at time of personal contingency and firm being dissolved upon the death/retirement/insolvency of the partners. Vulnerable to fluctuation in the raw material prices and currency fluctuation: The major raw material required for the manufacturing of stampings are steel cold-rolled non oriented (CRNO) sheets and cold rolled coils (CRC) that constitute a major part of the total raw material cost. The prices of steel are volatile in nature and are linked to inputs cost like coal prices, iron ore, exchange rate along with the demand-supply in the economy. Key Rating Strengths Increase in turnover in FY15: During FY15, the Total Operating Income (TOI) of DS grew by 25.05% over last year mainly on account of increase in production levels and marginal increase in sales price of the end products. Comfortable capital structure, moderate debt coverage and liquidity indicators: Capital structure of DAS remained comfortable marked by an overall gearing of 0.59 times as on March 31, 2015 which has improved from 0.86 times as on March 31, 2014 on account of decrease in the total debt and increase in the net worth base. Interest coverage ratio improved marginally and remained at moderate level of 1.90 times during FY15 as compared to 1.84 times during FY14, improvement was mainly on account of marginal increase in the PBILDT. Further, total debt to GCA improved and stood at 5.31 times as on March 31, 2015 as compared to 6.98 times as on March, 2014 due to reduction in total debt coupled with marginal improvement in GCA level. Current ratio stood at stagnant level at 1.71 times as on March 31, 15 compared to previous year While operating cycle remained elongated at 112 days during FY15. M/s Damasha Stampings (DAS) is a partnership concern, established in the year 2002. The firm is spearheaded by a group of five partners namely Mr. Jigar Patel, Mr. Mahesh Patel, Mr. Prakash Suthar, Mr. Naresh Suthar and Mr. Aniruddha Patel with an average experience of more than a decade in similar line of operations. DAS is engaged in the manufacturing of electrical and submersible stamping and die cast rotors. The stampings find wide application in automobiles, electric motors, electrical appliances like fans, Direct Current (DC) motors and generators. While the die cast rotors are used in many electronic machineries that assist in reducing energy consumption and increase the life of the motor. ELAN AGROCHEM: CRISIL Assigns 'B' Rating to INR7cr Term Loan ------------------------------------------------------------ CRISIL has assigned its 'CRISIL B/Stable' rating to the long term bank loan facilities of Elan Agrochem Private Limited (EAPL). Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Proposed Term Loan 7 CRISIL B/Stable (Assigned) Cash Credit 5 CRISIL B/Stable (Assigned) Proposed Cash Credit Limit 6 CRISIL B/Stable (Assigned) The rating reflects modest scale of operations and high working capital intensity, weak financial risk profile marked by high gearing and weak debt protection metrics and risks related to its expansion project. These weaknesses are partially offset by longstanding industry experience of promoters. Key Rating Drivers & Detailed Description Weaknesses * Modest scale of operations and high working capital intensity: Scale of operations is modest with revenues of INR23.5 cr in fiscal 2018. Though the company is currently in plans of expanding its capacities, ramp up of operations and quantum of revenue increase is to be seen. * Weak financial risk profile: Financial risk profile is marked by high gearing and weak debt protection metrics. The gearing stood at 1.97 times as on March 31, 2017 and the ratio is estimated at similar levels as on March 31, 2018. * Project Risk: EAPL has a capex plan of INR11 crore to be funded by bank debt of INR7 crore. The rest would be met through promoter's contribution. It is exposed to risks related to offtake, funding and implementation until successful completion and commencement of operations. Strength * Longstanding industry experience of promoters: The promoters are in the agro chemical business for more than 15 years and the promoter's extensive experience has enabled the company to increase its product profile along with diversification and continuous customer addition. Outlook: Stable CRISIL believes that EAPL will benefit from its promoters' extensive industry experience. The outlook may be revised to positive in case of substantial increase in revenues and profitability aided by timely commencement and ramp up of operations in its newly added capacities coupled with an improvement in its capital structure. Conversely, the outlook may be revised to 'Negative' if its new capacities face delays in commence of operations resulting in low cash accrual insufficient to meet debt obligations on time, or if the company faces significant cost or time overrun in its expansion project adversely impacting the financial risk profile. EAPL was incorporated in 2005. The company is promoted by Mr. Bala Koteswara Rao and his family. The company is in the business of manufacturing of pesticides, micronutrients and organics. ESS EMM: CRISIL Migrates B Rating to Not Cooperating Category ------------------------------------------------------------- CRISIL has migrated the rating on bank facilities of Ess Emm Enterprises (Ess Emm) to 'CRISIL B/Stable Issuer not cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 7 CRISIL B/Stable (ISSUER NOT COOPERATING; Rating Migrated) Proposed Term Loan 18 CRISIL B/Stable (ISSUER NOT COOPERATING; Rating Migrated) CRISIL has been consistently following up with Ess Emm for obtaining information through letters and emails dated May 8, 2018, June 6, 2018 and June 11, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of Ess Emm Enterprises. Which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on Ess Emm Enterprises is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower'. Therefore, on account of inadequate information and lack of management cooperation, CRISIL has migrated the rating on bank facilities of Ess Emm Enterprises to 'CRISIL B/Stable Issuer not cooperating'. Established as a proprietorship in 1999 and reconstituted as a partnership firm in November 2015, Ess Emm has five partners and is the authorised dealer for electrical goods (cables, wires, and switches) manufactured by Polycab Wires Pvt Ltd and Havells India Pvt Ltd. Based in Bengaluru, the firm has branches in Secunderabad and Chennai. GOURMET EMPIRE: CARE Migrates Rating to B/Not Cooperating --------------------------------------------------------- CARE Ratings has migrated the rating on bank facility of Gourmet Empire Private Limited (GEPL) to Issuer Not Cooperating category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 6.76 CARE B; Issuer not cooperating; Facilities Revised from CARE B+ Detailed Rationale & Key Rating Drivers CARE has been seeking information from GEPL to monitor the rating(s) vide e-mail communications/letters dated June 1, 2018 and numerous phone calls. However, despite CARE's repeated requests, the company has not provided the requisite information for monitoring the ratings. In the absence of minimum information required for the purpose of rating, CARE is unable to express opinion on the rating. In line with the extant SEBI guidelines CARE's rating on Gourmet Empire Private Limited's bank facilities will now be denoted as CARE B; ISSUER NOT COOPERATING. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating(s). Detailed description of the key rating drivers The revision in the rating takes into consideration the following weakness: High level of competition: The company faces tough competition from well organised players like: Britania, Bakers and Harvest Gold etc. which have better brand presence in the breads & buns segment. Apart from the organized players, the company faces challenge from various smaller players in the market. Gourmet Empire Private Limited (GEPL) was incorporated in August 2013 by Mrs Manjeet Kaur, Mrs Harvinder Kaur and Mr. Surinder Singh. Initially, the company was engaged in restaurant business and later on in December, 2014 they also ventured in to manufacturing of bakery products such as breads, pastries, cakes, chocolates, sandwiches, etc. The company markets its bakery products under brand name "South Ampton Bakes". Besides this GEPL is also running two restaurants under the name 'Garlic and Green' in mall located in Chandigarh and nearby area and two coffee kiosks in Apollo hospital and Fortis Hospital located in Ludhiana. The manufacturing unit is located in Mohali and the company sells its products to reputed wholesalers as Wal-mart India, Metro- Zirakpur and West Side in Chandigarh, Punjab and Haryana. HAREKRISHNA RICE: Ind-Ra Assigns B- Issuer Rating, Outlook Stable ----------------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned Harekrishna Rice Processing & Exports (HRPE) a Long-Term Issuer Rating of 'IND B-'. The Outlook is Stable. The instrument-wise rating actions are: -- INR10 mil. Fund-based limits assigned with IND B-/Stable rating; -- INR89.5 mil. Term loan due on September 2024 assigned with IND B-/Stable rating; and -- INR20 mil. Non-fund-based limits assigned with IND A4 rating. KEY RATING DRIVERS The ratings reflect HRPE's short operational track record, considering the company commenced commercial operations in January 2018. It booked INR68.6 million in revenue for January- March 2018. The ratings are constrained by HRPE's tight liquidity, indicated by an average utilization of 97% of the fund-based limits over the three months ended May 2018. The ratings, however, are supported by the promoters' more than 10 years of experience in the rice processing mill business. RATING SENSITIVITIES Positive: Stabilization of operations leading to the stabilization of the overall credit metrics will be positive for the ratings. COMPANY PROFILE Incorporated in January 2015, HRPE operates a 12 ton/hour automated rice processing facility in Jajpur, Odisha. It has customers across Odisha, West Bengal and parts of Kerala and Karnataka. HAYATH FOODS: CARE Migrates B Rating to Not Cooperating Category ---------------------------------------------------------------- CARE Ratings has migrated the rating on bank facility of Hayath Foods (HYF) to Issuer Not Cooperating category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank 10.41 CARE B; Issuer not cooperating; Facilities Based on best available Information Short-term Bank 24.00 CARE A4; Issuer not cooperating; Facilities Based on best available Information Detailed Rationale & Key Rating Drivers CARE has been seeking information from HYF to monitor the rating vide e-mail communications/letters dated April 25, 2018, May 10, 2018, May 11, 2018 and numerous phone calls. However, despite CARE's repeated requests, the firm has not provided the requisite information for monitoring the rating. In the absence of minimum information required for the purpose of rating, CARE is unable to express opinion on the rating. In line with the extant SEBI guidelines, the rating on Hayath Foods' bank facilities will now be denoted as CARE B; Issuer not Cooperating*/ CARE A4 Issuer not cooperating. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating. Detailed description of the key rating drivers At the time of last rating on May 5, 2015 the following were the rating strengths and weaknesses: Key Rating Weakness Fluctuating profitability for the last 2 years ended FY15 (Provisional): The profitability of the firm declined from 29.09% in FY13 to 13.97% in FY14 on account of increase in processing charges, production expenses coupled with increase in raw material consumption. However, PBILDT margin improved to 14.27% in FY15 (Provisional), mainly on account of the increase in sales realization. Furthermore, the PAT margin of the firm improved from 0.81% in FY14 to 2.45% in FY15 on account of increase in PBILDT. Highly leveraged capital structure and weak debt coverage indicators: Debt equity and overall gearing ratio of the firm stood weak at 23.90x and 90.16x as on March 31, 2014, on account of high term loan, working capital facilities coupled with low net worth base. Furthermore, there is a capital withdrawal of INR0.74 crore for the personal purpose for the said period. However, the firm has infused capital of INR9.39 crore and unsecured loans of INR4.85 crore (considered as quasi-equity as they are subordinated to bank facilities) as on March 31, 2015, which resulted in improvement in debt equity and overall gearing ratio to 0.39x and 1.96x as on March 31, 2015, respectively. The debt protection metrics of the firm are weak marked by total debt/GCA at 10.66x in FY15 on account of high dependency on external borrowings. However, interest coverage ratio stood moderate at 1.89x in FY15 with high PBILDT and current ratio stood moderate at 1.23x as on March 31, 2015, on account of high inventory holding. Presence in the highly fragmented industry characterized by intense competition: The company is engaged in processing of fruit pulps which involves moderate value addition. Moreover, on account of number of units operating in similar business along with presence of large sized renowned entities, the competition among the players remains very high resulting in high fragmentation and restricts the profitability to an extent. Seasonal availability of raw material (Mango) resulting into working capital-intensive nature of business: Prices of mango are highly volatile in nature and depend upon factors like, area under production, yield for the year (4-5 months). The firm has to procure significantly higher volume of mango to avail bulk discount from suppliers. Furthermore, mango being seasonal crop, it is available mainly from April-July, which results in a higher inventory holding period for the business. The firm receives the payment from its customers within 60-120 days and makes the payment to its suppliers within 30-40 days which further resulted in working capital intensive nature of business. The average fund-based working capital limits were utilized at 95% during the past 12 months period ended March 31, 2015. Constitution of the entity as a partnership firm: HYF, being a partnership firm, is exposed to inherent risk of the partners' capital being withdrawn at time of personal contingency and firm being dissolved upon the death/retirement/insolvency of the partners. Moreover, partnership business has restricted avenues to raise capital which could prove a hindrance to its growth. Furthermore, there is instances of capital withdrawal INR 0.74 crore during FY14. Susceptibility of margin to fluctuation in exchange rates HYF is exporting processed products which constituted 25% to total sales. Due to export there is possibility of susceptible to fluctuation in currency and which in turn also affects the profitability margins and the firm does not have any hedging mechanism to safeguard the same. Key Rating Strengths Experienced promoter for more than four decades in the industry: The promoters have been engaged in the food processing industry for more than four decades. Mr. Syed Mateen Aga (Managing Partner), has more than four decades of experience in this industry through other associate companies and is actively involved in the day-to-day operations of the firm. Mr. Syed Tanzeem Aga, Mr. Syed Taheem Aga and Mr. Syed Tanzil Aga, other three partners has more than 10 years of experience in the same line of business, and looks after production and other operational activities. All of them belong to the same family. HYF established in 2007 and has gained reasonable track record of the firm in term of business operations. Growth in total operating income during last two year ended FY15: The total operating income of the firm has registered a compounded annual growth rate (CAGR) of 67% during FY13-FY15 and registered a total operating income of INR48.04 crore in FY15 (Provisional) as against INR39.92 crore in FY14 representing growth of 20%. The increase in the total operating income was backed by higher demand for the products in the domestic and export market coupled with the increase in capacity utilization from 93% in FY14 to 98% in FY15 (Provisional). Location advantage with presence in major mango cultivation area: (Chittor) resulting in easy procurement of mangoes HYF is well connected to prominent mango growing belts. The firm enjoys proximity to the mango growing areas of Chittoor. Hence, it derives benefits from lower logistics expenditure (both on transportation and storage), easy availability of labour and procurement of mangoes at competitive prices, and consistent demand for finished goods resulting in sustained revenue visibility. HYF established in 2007 as a partnership firm and plant located at Tirupathi By-pass road, Cherlapalli village post, Chitoor, Andhra Pradesh. HYF was promoted by Mr. Syed Mateen Aga, Mr. Syed Tanzeem Aga, Mr. Syed Taheem Aga and Mr. Syed Tanzil Aga. The firm is engaged in the processing of various Mango pulp (totapuri & alphonso) and tomato pulp, and papaya pulp. HYF is an ISO 9001:2000 certified firm. HYF procures its entire raw material (fruits and vegetables) from the local market, ie, from local farmers and dealers. HYF sells its products in the domestic market across India like Andhra Pradesh, Maharashtra, Tamil Nadu, Kerala, Uttar Pradesh, Gujarat and Karnataka which constituted to about 75% of the revenue during FY15 (Provisional) and rest of 25% is exported to UAE, Saudi Arabia and Yemen Arab Republic. About 90% of the revenue was generated through mango pulp during FY15. HONEST MARKETING: CRISIL Migrates B Rating to Not Cooperating ------------------------------------------------------------- CRISIL has migrated the rating on bank facilities of Honest Marketing Private Limited (HMPL) to 'CRISIL B/Stable Issuer not cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 4 CRISIL B/Stable (ISSUER NOT COOPERATING; Rating Migrated) Proposed Cash 4 CRISIL B/Stable (ISSUER NOT Credit Limit COOPERATING; Rating Migrated) CRISIL has been consistently following up with HMPL for obtaining information through letters and emails dated April 24, 2018, May 9, 2018, June 6, 2018 and June 11, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of Honest Marketing Private Limited. Which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on Honest Marketing Private Limited is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower'. Therefore, on account of inadequate information and lack of management cooperation, CRISIL has migrated the rating on bank facilities of Honest Marketing Private Limited to 'CRISIL B/Stable Issuer not cooperating'. Furthermore, the company has not paid the fee for conducting rating surveillance as agreed to in the rating agreement. Incorporated in 1990, HMPL distributes alcoholic beverages in Nasik, Maharashtra, for Diageo India Pvt Ltd ('CRISIL AA- /Stable'), Allied Blenders and Distillers Pvt Ltd ('CRISIL BBB+/Stable/CRISIL A3'), Carlsberg India Pvt Ltd, and Nashik Vinters Pvt Ltd. The company's operations are managed by Mr Sumeet Gupta, Mr Manish Patel, Mr Bhupinder Singh, and Mr Yohan Rubthe. JAI BHARAT: CRISIL Migrates B Rating to Not Cooperating Category ---------------------------------------------------------------- CRISIL has migrated the rating on bank facilities of Jai Bharat Rice Mills (Partnership) (JBRM) to 'CRISIL B/Stable Issuer not cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 25 CRISIL B/Stable (ISSUER NOT COOPERATING; Rating Migrated) Proposed Long Term 5 CRISIL B/Stable (ISSUER NOT Bank Loan Facility COOPERATING; Rating Migrated) CRISIL has been consistently following up with JBRM for obtaining information through letters and emails dated May 22, 2018, June 6, 2018 and June 11, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of Jai Bharat Rice Mills (Partnership). Which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on Jai Bharat Rice Mills (Partnership) is consistent with 'Scenario 2' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BBB' rating category or lower'. Therefore, on account of inadequate information and lack of management cooperation, CRISIL has migrated the rating on bank facilities of Jai Bharat Rice Mills (Partnership) to 'CRISIL B/Stable Issuer not cooperating'. JBRM is currently managed by Mr Surinder Pal and Mr Sukhwinder Singh. The firm processes basmati rice at its facility in Fazilka. KARUPPASWAMY BUILDERS: CRISIL Moves B+ Rating From Not Coop. Cat. ----------------------------------------------------------------- CRISIL is migrating the ratings of Karuppaswamy Builders Private Limited (KBPL) from 'CRISIL B+/Stable/Issuer Not Cooperating to 'CRISIL B+/Stable'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Term Loan 5 CRISIL B+/Stable (Migrated from 'CRISIL B+/Stable 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 KBPL to 'CRISIL B+/Stable Issuer Not Cooperating' on May 24, 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 B+/Stable/Issuer Not Cooperating to 'CRISIL B+/Stable'. The rating continues to reflect exposure to risks related to completion and geographical concentration in revenue, and susceptibility to risks inherent in the real estate industry. These weaknesses are mitigated by an established track record and the extensive experience of the promoter in the real estate construction segment in Chennai. Key Rating Drivers & Detailed Description Weakness: * Exposure to risks related to timely completion of projects and geographical concentration in revenue: The company is currently completing one project, and has announced another to be launched in September 2018. The upcoming project is exposed to risks related to implementation and offtake. Moreover, projects are executed only in Chennai. * Vulnerability to inherent risks in the real estate industry and intense competition: The real estate sector in India is cyclical and marked by volatile prices, opaque transactions, and a highly fragmented market structure. The execution of real estate projects in India is affected by multiple property laws and non- standardized government regulations across states. Strengths: * Extensive industry experience of the promoter: The promoters have been operating in the real estate industry for over two decades. Over the years, the promoter has completed 15 projects in Chennai and the extensive experience of the promoter is expected to benefit the company over the medium term. Outlook: Stable CRISIL believes KBPL will continue to benefit from the extensive industry experience of the promoter. The outlook may be revised to 'Positive' in case of healthy cash flow from ongoing projects and a significant increase in the scale of operations, while the capital structure improves. The outlook may be revised to 'Negative' if large, debt-funded capital expenditure, or delay in payment by customers resulting in significant time or cost overrun in ongoing projects, weakens liquidity. KBPL was set up in 2000 as a proprietary concern by Mr Sivasaravanan and reconstituted as a private-limited company in 2016. The company develops residential real estate in Chennai. KHANDELWAL GINNING: CRISIL Migrates B+ Rating to Not Cooperating ---------------------------------------------------------------- CRISIL has migrated the rating on bank facilities of Khandelwal Ginning and Pressing - Amarawati (KGP) to 'CRISIL B+/Stable Issuer not cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 3 CRISIL B+/Stable (ISSUER NOT COOPERATING; Rating Migrated) Rupee Term Loan 3 CRISIL B+/Stable (ISSUER NOT COOPERATING; Rating Migrated) CRISIL has been consistently following up with KGP for obtaining information through letters and emails dated April 25, 2018, May 9, 2018, June 06, 2018 and June 11, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of Khandelwal Ginning and Pressing - Amarawati. Which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on Khandelwal Ginning and Pressing - Amarawati is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower'. Therefore, on account of inadequate information and lack of management cooperation, CRISIL has migrated the rating on bank facilities of Khandelwal Ginning and Pressing - Amarawati to 'CRISIL B+/Stable Issuer not cooperating'. KGP, established in January 2016, is owned and managed by Mr Murlimanohar Khandelwal and his family. The firm gins and presses cotton at its facility in Amarawati, Maharashtra, with an installed capacity of around 15,000 bales per season. KUSHALAVA SPINNERS: CRISIL Migrates B- Rating to Not Cooperating ---------------------------------------------------------------- CRISIL has migrated the rating on bank facilities of Kushalava Spinners & Ginners Private Limited (KSGPL) to 'CRISIL B-/Stable Issuer not cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 2.85 CRISIL B-/Stable (ISSUER NOT COOPERATING; Rating Migrated) Long Term Loan 6.00 CRISIL B-/Stable (ISSUER NOT COOPERATING; Rating Migrated) Proposed Fund- Based Bank Limits 1.15 CRISIL B-/Stable (ISSUER NOT COOPERATING; Rating Migrated) CRISIL has been consistently following up with KSGPL for obtaining information through letters and emails dated April 17, 2018, June 7, 2018 and June 11, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of Kushalava Spinners & Ginners Private limited. Which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on Kushalava Spinners & Ginners Private limited is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower'. Therefore, on account of inadequate information and lack of management cooperation, CRISIL has migrated the rating on bank facilities of Kushalava Spinners & Ginners Private limited to 'CRISIL B-/Stable Issuer not cooperating'. KSGPL, incorporated in June 2014, gins and presses cotton. Based in Guntur, Andhra Pradesh, the company is promoted and managed by Mr V Srinivasa Rao, Mr Sadhu Siva Sankara Rao, and Mr Majeti Sri Vasavi. The company started operations in January 2016. MANDHANA INDUSTRIES: Gets Extension for Completion of CIRP ---------------------------------------------------------- Business Standard reports that Mandhana Industries announced that the National Company Law Tribunal (NCLT), Mumbai Bench has approved the extension of Corporate Insolvency Resolution Process (CIRP) in respect of the Company for a further period of 13 days on account of the time elapsed between the date of passing the initial Order approving initiation of CIRP in respect of the Company i.e. Sept. 29, 2017 and the date when the certified copy of the said order was uploaded/received by the Resolution Professional i.e. on Oct. 11,, 2017, on which date the Resolution Professional had assumed office. Therefore, the last date of completion of CIRP stand extended till July 8, 2018, the report says. Bank of Baroda and Bank of India last year approached the tribunal under insolvency code to recover its dues. At the time of admission of the insolvency petition, the company owed INR1,062 crore to the consortium of lenders, Livemint discloses. Mandhana Industries ltd (MIL) engages in manufacturing of textile fabric (grey and finished fabric). MIL had a yarn dyeing capacity of 4.3 mn kg per annum, weaving capacity of 36 mn mtrs of grey fabric per annum, fabric processing capacity of 72.60 mn mtrs per annum and garmenting capacity of 6.60 mn pieces per annum. The garmenting facility is located at Bangalore while all other facilities are located at facility at Baramati. MAUNATHBHANJAN NAGAR: Ind-Ra Withdraws BB Long Term Issuer Rating ----------------------------------------------------------------- India Ratings and Research (Ind-Ra) has withdrawn Maunathbhanjan Nagar Palika Parishad's Long-Term Issuer Rating of 'IND BB'. The Outlook was Stable. KEY RATING DRIVERS Ind-Ra is no longer required to maintain the rating, as the issuer rating was assigned under the Atal Mission for Rejuvenation and Urban Transformation programme and no specific debt was issued against the rating. COMPANY PROFILE Maunathbhanjan is a city in the Mau district of Uttar Pradesh. It is spread over an area of about 39 square kilometers and is well connected to most major Indian cities through railways. MOUNICA EDUCATIONAL: CRISIL Assigns B+ Rating to INR10cr Loan ------------------------------------------------------------- CRISIL has assigned its 'CRISIL B+/Stable' rating to the long- term bank facilities of Mounica Educational Society (MES). Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Proposed Long Term Bank Loan Facility 10 CRISIL B+/Stable (Assigned) Term Loan 4.5 CRISIL B+/Stable (Assigned) The rating reflects MES's small scale of operations, high degree of geographical concentration, high working capital requirements and exposure to regulatory risks and intense competition from other educational trusts. These rating weaknesses are partially offset by the society's above-average financial risk profile and the benefits expected from the healthy demand prospects for the education sector. Key Rating Drivers & Detailed Description Weakness * Small scale of operations & high degree of geographical concentration in revenue profile: Despite MES's revenue registering a stable CAGR of 10 per cent over the three years ended March 31, 2018; its revenue remained modest at about INR12.2 Crore in 2017-18. Moreover, geographical concentration makes the society susceptible to competition and can affect its revenue profile. * Working Capital Intensive Operations: Out of the total intake in the engineering college, around 60 to 70 per cent is through fee reimbursement. In the past, there have been significant delays in clearing of dues by the government resulting in stretched liquidity profile of the engineering colleges. The team believes that the society is exposed to risks related to timely receipt of fee reimbursement. * Exposure to regulatory risks and intense competition from other educational trusts: MES has to secure approvals from AICTE and JNTU, for offering new courses and increasing the number of seats for each course. Furthermore, the society has to comply with the regulations relating to infrastructure and faculty members. In addition to this, Telangana has oversupply of engineering colleges which results in increased competition. Strengths * Above-average financial risk profile: MES has above-average financial risk profile, marked by moderate net worth and low gearing. The society had a moderate net worth estimated at of INR13 Crores along with low gearing of 0.4 times as on March 31, 2018. * Healthy demand prospects for the education sector: Because of diverse course offering the society is expected to have healthy demand prospects with increasing student base in Telangana. Outlook: Stable CRISIL believes that MES will continue to benefit from its healthy profitability over the medium term. The outlook may be revised to 'Positive' in case the society achieves significantly higher-than-expected occupancy levels, leading to substantial accruals and improved financial risk profile. Conversely, the outlook may be revised to 'Negative' if the society registers significantly lower-than-expected occupancy levels or if it faces further stretch in receivables which adversely impacts its debt- servicing ability. MES runs by TUDI RAM REDDY INSTITUTE OF TECHNOLOGY and TUDI NARSIMHA REDDY INSTITUTE OF TECHNOLOGY which are located at Nalgonda (Telangana) .The campuses are spread in 10 acres and is affiliated to JNTU Hyderabad. PATWA AUTOMOTIVE: CRISIL Migrates D Rating to Not Cooperating ------------------------------------------------------------- CRISIL has migrated the rating on bank facilities of Patwa Automotive Private Limited to 'CRISIL D Issuer not cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 36 CRISIL D (ISSUER NOT COOPERATING; Rating Migrated) Inventory Funding Facility 9 CRISIL D (ISSUER NOT COOPERATING; Rating Migrated) CRISIL has been consistently following up with Patwa Automotive for obtaining information through letters and emails dated June 13, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of Patwa Automotive Private Limited. Which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on Patwa Automotive Private Limited is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower'. Therefore, on account of inadequate information and lack of management cooperation, CRISIL has migrated the rating on bank facilities of Patwa Automotive Private Limited to 'CRISIL D Issuer not cooperating'. For arriving at the rating, CRISIL has combined the business and financial risk profiles of PAPL and Patwa Abhikaran Ratlam Pvt Ltd (PARPL). The two companies, together referred to as the Patwa Marketing group, have common promoters, management team, and business. PARPL and PAPL were set up in 1989 and 2007, respectively, by Mr Surendra Patwa, a Madhya Pradesh-based businessman. The group is an authorised dealer of passenger vehicles and light commercial vehicles of M&M in Madhya Pradesh. The companies are managed by Mr Anil Sharma (CEO) with support from professionals. The group also distributes polymer products. PREMIER SEAFOODS: Ind-Ra Affirms BB+ Issuer Rating -------------------------------------------------- India Ratings and Research (Ind-Ra) has affirmed Premier Seafoods Exim Private Limited's (PSEPL) Long-Term Issuer Rating at 'IND BB+'. The Outlook is Stable. The instrument-wise rating actions are: -- INR102 mil. Fund-based facilities affirmed with IND BB+/ Stable/IND A4+ rating; and -- INR83.85 mil. Long-term loan due on June 2024 assigned with IND BB+/Stable rating. KEY RATING DRIVERS The affirmation reflects PSEPL's continued moderate revenue and credit profile due to its presence in a highly competitive industry and fluctuating currency. Susceptibility to diseases, climatic changes, and changes in government policies are the primary risks associated with the seafood processing industry. Moreover, the company faces customer concentration risk with its top 10 customers accounting for 52% of the total revenue. The company's revenue increased to INR1,238 million in FY18 (unaudited financials) from INR1,125 million in FY17, driven by an increase in work orders from existing clients. The company has INR79 million worth of orders in hand, to be executed by end-July 2018. Its interest coverage (operating EBITDA/gross interest expense) improved to 5.7x in FY17 from 1.9x in FY16, driven by an increase in EBITDA margin to 4.9% from 1.9% due to a rise in the sale of high-margin ready-to-cook shrimp and better inventory management. However, its net leverage (adjusted net debt/operating EBITDAR) deteriorated to 1.6x in FY17 from 0.6x in FY16, on account of an increase in the debt during the period. The credit metrics deteriorated in FY18 with interest coverage at 5.0x and leverage at 3.5x, primarily due to a further increase in the debt during the period for a capex. PSEPL incurred a capex of INR130 million in FY17 for constructing a new unit, which has been funded by term loans of INR80 million and internal accruals. The ratings, however, are supported by PSEPL's moderate liquidity, indicated by its average 88.7% use of the fund-based working capital limits for the 12 months ended May 2018. The ratings are also supported by the company's promoter's experience of more than four decades in the seafood export business, its business profile which comprises 100% export sales and its recent venture into the consumer market with value-added products. RATING SENSITIVITIES Positive: Substantial growth in the top line along with an improvement in the operating profitability, leading to an improvement in the credit metrics, on a sustained basis, will be positive for the ratings. Negative: A decline in the revenue and operating profitability resulting in significant deterioration in the credit metrics, on a sustained basis, will be negative for the ratings. COMPANY PROFILE Established in 2000, PSEPL processes marine food at its facilities in Cochin (Kerala), Chennai (Tamil Nadu) and Paradip (Odisha). The company primarily caters to customers in Japan, Europe and other Asian countries. PRINT-TECH OFFSET: CRISIL Migrates B Rating to Not Cooperating --------------------------------------------------------------- CRISIL has migrated the rating on bank facilities of Print-Tech Offset Private Limited (PTOPL) to 'CRISIL B/Stable/CRISIL A4 Issuer not cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Capex Letter of Credit 5.25 CRISIL A4 (ISSUER NOT COOPERATING; Rating Migrated) Cash Credit 2.50 CRISIL B/Stable (ISSUER NOT COOPERATING; Rating Migrated) Proposed Long Term 1.00 CRISIL B/Stable (ISSUER NOT Bank Loan Facility COOPERATING; Rating Migrated) Term Loan 3.75 CRISIL B/Stable (ISSUER NOT COOPERATING; Rating Migrated) CRISIL has been consistently following up with PTOPL for obtaining information through letters and emails dated April 26, 2018, May 11, 2018, June 6, 2018 and June 11, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of Print-Tech Offset Private Limited. Which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on Print-Tech Offset Private Limited is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower'. Therefore, on account of inadequate information and lack of management cooperation, CRISIL has migrated the rating on bank facilities of Print-Tech Offset Private Limited to 'CRISIL B/Stable/CRISIL A4 Issuer not cooperating'. PTOPL, set up in 2004, is engaged in the offset printing business. The product portfolio includes brochures, magazines, and books. The printing facility is at Bhubaneswar. Operations are managed by the promoter-directors, Mr Brundaban Behera and Mr Biswa Ranjan Nayak. PUNJAB RICE: CRISIL Moves B+ Rating to Not Cooperating Category --------------------------------------------------------------- CRISIL has migrated the ratings on the bank facilities of Punjab Rice and General Mills (PRGM) to 'CRISIL B+/Stable' Issuer not cooperating' from 'CRISIL B+/Stable'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 6 CRISIL B+/Stable (ISSUER NOT COOPERATING; Migrated from 'CRISIL B+/stable'; Rating Withdrawn) Proposed Fund- 2 CRISIL B+/Stable (ISSUER NOT Based Bank Limits COOPERATING; Migrated from 'CRISIL B+/stable'; Rating Withdrawn) CRISIL has been consistently following up with PRGM for obtaining information through letters and emails dated June 6, 2018 and June 11, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of PRGM. 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 PRGM is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower. Based on the last available information, CRISIL has migrated the ratings on the bank facilities of PRGM to 'CRISIL B+/Stable' Issuer not cooperating' from 'CRISIL B+/Stable'. CRISIL has withdrawn its rating on the bank facilities of PRGM on the request of the company and after receiving no objection certificate from the bank. The rating action is in-line with CRISIL's policy on withdrawal of its rating on bank loan facilities. PRGM is a partnership firm, set up by Mr Amrik Singh and Mr Harpal Singh in 1986. The firm mills and processes paddy into rice, and has an installed capacity of 7 tonne per hour for paddy and 15 tonne per hour (Sortex) at Ferozepur (Punjab). RAJ ISPAT: CARE Migrates B+ Rating to Not Cooperating Category -------------------------------------------------------------- CARE Ratings has migrated the rating on bank facility of Raj Ispat Udyog to Issuer Not Cooperating category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 7.00 CARE B+; Issuer not cooperating; Facilities Based on best available Information Detailed Rationale & Key Rating Drivers CARE has been seeking information from Raj Ispat Udyog to monitor the rating(s) vide e-mail communications/letters dated May 28, 2018 and numerous phone calls. However, despite CARE's repeated requests, the firm has not provided the requisite information for monitoring the ratings. In the absence of minimum information required for the purpose of rating, CARE is unable to express opinion on the rating. In line with the extant SEBI guidelines CARE's rating on Raj Ispat Udyog's bank facilities will now be denoted as CARE B+/ CARE A4; ISSUER NOT COOPERATING. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating(s). Detailed description of the key rating drivers At the time of rating in February, 2016 the following were the rating strengths and weaknesses: Key rating Weaknesses Declining scale of operations with low net worth base: The firm's scale of operations declined from INR37.14 crore in FY13 to INR26.84 crore in FY15 (Prov.) (refers to the period April 01 to March 31). Furthermore, the firm's GCA was relatively small at INR0.14 crore for FY15 (Prov.) and tangible net worth stood at INR1.29 crore as on March 31, 2015. Leveraged capital structure: The firm has a leveraged capital structure marked by long term debt equity and overall gearing ratio of 0.86x and 7.36x, respectively, as on March 31, 2015. Weak debt coverage indicators: The debt coverage indicators of the firm remained weak as reflected by interest coverage ratio and total debt to GCA of 1.11x and 67.20x respectively for FY15. Working capital intensive nature of operations: The operations of the firm are working capital intensive in nature as reflected by average operating cycle of 126 days, as on March 31, 2015 The average utilization of the working capital limits stood around 95% for 12 months period ended September, 2015. Partnership nature of its constitution: RIU's constitution as a partnership firm has the inherent risk of possibility of withdrawal of the partner's capital at the time of personal contingency and firm being dissolved upon the death/retirement/insolvency of partners. Key Rating Strengths Experienced partners: Mr. Raj Kumar and Mr. Anil Kumar have gained experience of around three decades and two decades respectively in steel industry through their association as partner with Raj Ispat Udyog (established in 1988) and Raj Steel Industries (associate concern, established in 1984) which is engaged in trading and manufacturing of iron and steel products. Mr. Sunny Kumar has gained experience of more than half decade in steel industry through his association as partner with RIU and RSI. Moderate Profitability margins: The profitability margins of the firm stood moderate marked by PBILDT margin and PAT margin of 4.95% and 0.11%, respectively, in FY15 (Prov., FY refers to April 1 to March 31). Raj Ispat Udyog (RIU) was established in 1988 as a partnership firm by Raj Kumar (aged 55 years), Mr. Anil Kumar (aged 47 years) and Mr. Sunny Kapoor (aged 32 years) with profit/loss sharing ratio of 4:4:2 respectively. The firm is engaged in trading of steel products and the servicing facility is located at Ludhiana, Punjab. The traded items include C.R Coils, HR Sheet, plate, straight angles, channel and joint etc. which find their application in steel and allied products industry. The traded goods are procured from associate concern, RSI and sold to dealers and wholesalers in Punjab, Chandigarh and J&K. RIU has other group concern viz. Raj Steel Industries (RSI), established in 1884 and engaged in manufacturing and trading of steel items. RAJ STEEL: CARE Migrates B+ Rating to Not Cooperating Category -------------------------------------------------------------- CARE Ratings has migrated the rating on bank facility of Raj Steel Industries to Issuer Not Cooperating category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 5.00 CARE B+; Issuer not cooperating; Facilities Based on best available Information Detailed Rationale & Key Rating Drivers CARE has been seeking information from Raj Steel Industries to monitor the rating(s) vide e-mail communications/letters dated May 28, 2018 and numerous phone calls. However, despite CARE's repeated requests, the firm has not provided the requiste information for monitoring the ratings. In the absence of minimum information required for the purpose of rating, CARE is unable to express opinion on the rating. In line with the extant SEBI guidelines CARE's rating on Raj Steel Industries' bank facilities will now be denoted as CARE B+/ CARE A4; ISSUER NOT COOPERATING. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating(s). Detailed description of the key rating drivers At the time of rating in February, 2016 the following were the rating strengths and weaknesses: Key rating Weaknesses Fluctuating scale of operations: The operating income declined from INR42.18 crores in FY13 (refers to the perid April 1 to March 31) to INR26.47 crores FY14 and further increased to INR29.82 crores during FY15 (Prov.) Leveraged capital structure: The firm has a leveraged capital structure marked by long-term debt equity ratio and overall gearing ratio of 1.23x and 4.00x respectively as on March 31, 2015 (Prov.) Weak debt coverage indicators: The debt coverage indicators of the firm remained weak as reflected by interest coverage ratio of 1.25x in FY15. Working capital intensive nature of operations: The operating cycle of firm stood elongated at ~93 days as on March 31, 2015 (Prov.).The average utilization of the working capital limits stood around 95% for 12 months period ended September, 2015. Susceptible to volatility in raw material prices: The main raw materials of the firm is steel. The prices of steel are driven by the international prices which have remained volatile in past. Partnership nature of its constitution: RIU's constitution as a partnership firm has the inherent risk of possibility of withdrawal of the partner's capital at the time of personal contingency and firm being dissolved upon the death/retirement/insolvency of partners. Key Rating Strengths Experienced partners and long track record of operations: Mr. Raj Kumar and Mr. Anil Kumar have gained experience of around three decades and two decades respectively in steel industry through their association as partner with RIU (associate concern, established in 1988) and RSI. Mr. Sunny Kumar (son of Mr. Raj Kumar) has gained experience of more than half decade in steel industry through his association as a partner with RIU and RSI. Raj Steel Industries (RSI) was established in 1984 as a partnership firm by Mr. Raj Kumar (aged 55 years), Mr. Anil Kumar (aged 47 years) and Mr. Sunny Kapoor (aged 32 years) with equal profit sharing ratio. The firm is engaged in the manufacturing and trading of steel products with its manufacturing facilities located at Ludhiana, Punjab. The finished products include H.R Shuttering, H.R pipe, steel box, almirah etc. The raw material, mainly steel is procured from reputed suppliers as Steel Authority of India Limited (SAIL), Punjab State Small Industries and Export Corporation (PPSIEC), Rourkela Steel and Bokaro Steel Plant whereby the firm signs MOU with same on yearly basis which is later on renewed as per the need. The finished goods are sold to dealers and wholesalers in Punjab, Chandigarh and J&K. RSI has another group concern viz. Raj Ispat Udyog (RIU), established in 1988 and engaged in trading of steel items. RATHI STEELS: Ind-Ra Affirms BB LT Issuer Rating, Outlook Stable ---------------------------------------------------------------- India Ratings and Research (Ind-Ra) has affirmed K. L. Rathi Steels Limited's (KLR) Long-Term Issuer Rating at 'IND BB'. The Outlook is Stable. The instrument-wise rating actions are: -- INR395.30 mil. (reduced from INR400 mil.) Fund-based working capital limit affirmed with IND BB/Stable/IND A4+rating; and -- INR10 mil. Non-fund-based working capital limit withdrawn (repaid in full) and the rating is withdrawn. KEY RATING DRIVERS The affirmation reflects a marginal fall in EBITDA margin to 1.53% in FY18 (FY17: 1.94%), primarily due to a rise in raw material cost. The margin continues to be thin, averaging 1.33% over FY14-FY18. FY18 financials are provisional. The ratings continue to reflect KLR's modest credit metrics. In FY18, KLR's gross interest coverage (operating EBITDA/gross interest expense) and net leverage (total adjusted net debt/operating EBITDAR) were 1.78x (FY17: 2.02x) and 5.69x (5.46x), respectively. The deterioration in the metrics was largely due to the fall in EBITDA margin. The ratings factor in KLR's modest liquidity. It registered positive cash flow from operations over FY14-FY17. Its average peak utilization of the fund-based working capital limits was nearly 81.97% for the 12 months ended May 2018. The ratings, however, are supported by revenue growth of 31.36% yoy to INR4,501.80 million in FY18 (FY17: negative 20.45% yoy), primarily driven by an increase in steel prices and sales volume. Over FY14-FY17, revenue declined at a CAGR of 18.44% owing to continued slowdown in the real estate industry, a major end user, and the steel industry. The ratings continue to benefit from the promoters' experience of over three decades in the thermo-mechanically treated bar business. Moreover, the company has a reasonable brand recall (Rathi) in Delhi NCR. RATING SENSITIVITIES Negative: A substantial decline in the revenue or EBITDA margin, leading to deterioration in the credit metrics, on a sustained basis, will be negative for the ratings. Positive: An improvement in the EBITDA margin, leading to an improvement in the credit metrics, on a sustained basis, will be positive for the ratings. COMPANY PROFILE KLR manufactures thermo-mechanically treated bars at its 200,000 metric ton facility in Greater Noida. It sells such bars under the brand Rathi Thermoquench. KLR also operates four 1.5MW windmills: three in Jaisalmer, Rajasthan, and one in Kutch, Gujarat. SECO WARWICK: CRISIL Migrates B+ Rating to Not Cooperating ---------------------------------------------------------- CRISIL has migrated the rating on bank facilities of Seco Warwick Allied Private Limited (SWAPL) to 'CRISIL B+/Negative/CRISIL A4 Issuer not cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Bank Guarantee 12 CRISIL A4 (ISSUER NOT COOPERATING; Rating Migrated) Cash Credit 6.5 CRISIL B+/Negative (ISSUER NOT COOPERATING; Rating Migrated) Letter of Credit .75 CRISIL A4 (ISSUER NOT COOPERATING; Rating Migrated) Proposed Long Term 4.88 CRISIL B+/Negative (ISSUER NOT Bank Loan Facility COOPERATING; Rating Migrated) Term Loan 2.50 CRISIL B+/Negative (ISSUER NOT COOPERATING; Rating Migrated) CRISIL has been consistently following up with SWAPL for obtaining information through letters and emails dated April 26, 2018, May 11, 2018, June 6, 2018 and June 11, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of Seco Warwick Allied Private Limited. Which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on Seco Warwick Allied Private Limited is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower'. Therefore, on account of inadequate information and lack of management cooperation, CRISIL has migrated the rating on bank facilities of Seco Warwick Allied Private Limited to 'CRISIL B+/Negative/CRISIL A4 Issuer not cooperating'. SWAPL was set up in 1973 by Mr. V N Nasta, Mr. U V Rao, and Mr. N Rajgopal as Allied Consulting Engineering Pvt Ltd. The company got its current name when promoters entered into an equal joint venture with SWS in 2008. In May 2013, SWS acquired additional stake in SWAPL to become the major shareholder. SWAPL manufactures industrial furnaces and spare parts, primarily for steel mills. Units are in Thane and Shahapur in Maharashtra. SHREE RAJENDRA: CRISIL Migrates B+ Rating to Not Cooperating ------------------------------------------------------------ CRISIL has migrated the rating on bank facilities of Shree Rajendra Agro Industries (SRAI) to 'CRISIL B+/Stable Issuer not cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 9 CRISIL B+/Stable (ISSUER NOT COOPERATING; Rating Migrated) CRISIL has been consistently following up with SRAI for obtaining information through letters and emails dated April 26, 2018, May 11, 2018, June 6, 2018 and June 11, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of Shree Rajendra Agro Industries. Which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on Shree Rajendra Agro Industries is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower'. Therefore, on account of inadequate information and lack of management cooperation, CRISIL has migrated the rating on bank facilities of Shree Rajendra Agro Industries to 'CRISIL B+/Stable Issuer not cooperating'. SRAI was set up in 2012 in Yadgiri, Karnataka, as a partnership firm by Mr Rahul Kishore Jain and three other partners. It gins and presses cotton. The firm has installed capacity of 230 bales per day. SHREEJI FIBRE: CARE Moves B- Rating to Not Cooperating Category --------------------------------------------------------------- CARE Ratings has migrated the rating on bank facility of Shreeji Fibre Private Limited (SFPL) to Issuer Not Cooperating category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank 5.85 CARE B-; Issuer not cooperating; Facilities Based on best available Information Detailed Rationale & Key Rating Drivers CARE has been seeking information from SFPL to monitor the ratings vide e-mail communications/letters dated May 30, 2018 and May 31, 2018 and numerous phone calls. However, despite CARE's repeated requests, the entity has not provided the requisite information for monitoring the ratings. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the publicly available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. The rating on Shreeji Fibre Private Limited's bank facilities will now be denoted as CARE B-; ISSUER NOT COOPERATING. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above ratings. The rating takes into account its modest scale of operations, low profitability, leveraged capital structure, moderate debt coverage indicators and moderate liquidity position in FY17 (refers to the period April 1 to March 31). The ratings further remain constrained due to its presence in highly fragmented and seasonal industry with limited value addition and susceptibility of operating margins to volatile raw material prices. The rating, however, derives strength from experience of the promoters. SFPL's ability to increase its sales of operations along with improvement in profitability, capital structure and debt coverage indicators along with efficient working capital management would be the key rating sensitivities. Detailed description of the key rating drivers At the time of last rating done on March 28, 2017, the following were the rating strengths and weaknesses: Key Rating Weaknesses Modest scale of operations along with low profitability: During FY17, TOI of SFPL has increased to INR14.26 crore from INR5.34 crore in FY16. However, the company made a net profit of INR0.53 crore during FY17 as against net loss of INR0.58 crore during FY16. Leveraged capital structure and moderate debt coverage indicators: The capital structure of the company as marked by overall gearing ratio stood leveraged as marked by negative net worth base at INR0.41 crore as on March 31, 2017. The debt coverage indicators stood moderate marked by total debt to gross cash accrual of 10.09 times as on March 31, 2017 while interest coverage stood at 3.69 times during FY17. Moderate liquidity position: Liquidity position has also remained moderate marked by current ratio of 1.09 times as on March 31, 2017 as against 0.86 times as on March 31, 2016. Operating cycle remained at 117 days in FY17 as compared to 141 days in FY16. Susceptibility of profit margins to cotton price fluctuation and presence in a fragmented and seasonal cotton industry with limited value addition along with exposure to government regulations: The profitability of SFPL is exposed to fluctuations in raw cotton, which being an agricultural commodity is subject to the vagaries of monsoon. SFPL operates in an industry characterized by high fragmentation and intense competition on account of presence of a large number of small and medium-scale units due to minimal technological and financial investment requirement. Furthermore, due to limited value addition, players present in this segment operate at a very low bargaining power against its customers as well as suppliers. Furthermore, the cotton supply and prices in India are highly regulated by the government through Minimum Support Price (MSP) and export regulations. Key Rating Strength Experienced promoters: Mr. Balkrishna Patel Mr. Sahjanand Patel and Mr. Suresh Patel are the executive directors of the company and have experience of more than one decade in cotton industry. Dabhoi-based (Gujarat), SFPL was incorporated in March 2005 by Mr. Balkrishna Patel and Mrs. Bhagwati Khatwani. It is engaged in the business of cotton ginning and trading of cotton. The company procures raw cotton from local traders and farmers in Dabhoi region which is put through process of ginning where cotton seeds are separated from cotton lint. Cotton lint is packed in bales and sold to spinning mills and traders located in Gujarat. SFPL also have an oil mill where oil is extracted from cotton seeds which is known as kapasiya wash while the remaining part is known as kapasiya khod and is used as cattle food. At present, 8 employees are working under the company. The installed capacity of ginning machineries is 203,700 quintals per annum or 43,200 bales per annum for cotton bales as on March 31, 2016. SPECIALITY SILICA: CRISIL Migrates B+ Rating to Not Cooperating --------------------------------------------------------------- CRISIL has migrated the rating on bank facilities of Speciality Silica Private Limited (SSPL) to 'CRISIL B+/Stable Issuer not cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 4.75 CRISIL B+/Stable (ISSUER NOT COOPERATING; Rating Migrated) Proposed Long Term 3.00 CRISIL B+/Stable (ISSUER NOT Bank Loan Facility COOPERATING; Rating Migrated) Term Loan 9.50 CRISIL B+/Stable (ISSUER NOT COOPERATING; Rating Migrated) CRISIL has been consistently following up with SSPL for obtaining information through letters and emails dated April 26, 2018, May 11, 2018, June 6, 2018 and June 11, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of Speciality Silica Private Limited. Which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on Speciality Silica Private Limited is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower'. Therefore, on account of inadequate information and lack of management cooperation, CRISIL has migrated the rating on bank facilities of Speciality Silica Private Limited to 'CRISIL B+/Stable Issuer not cooperating'. Set up in 2004, SSPL is promoted by Mr Ravi Soni, who has been associated with the chemicals industry for around three decades. The company produces precipitated silica with capacity of 6000 tpa. Currently, it primarily manufactures rubber-grade silica and silica for dental care. The company commenced production in fiscal 2009. SPECIALITY SILICA: CRISIL Migrates B+ Rating to Not Cooperating --------------------------------------------------------------- CRISIL has migrated the rating on bank facilities of Speciality Silica Private Limited (SSPL) to 'CRISIL B+/Stable Issuer not cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 4.75 CRISIL B+/Stable (ISSUER NOT COOPERATING; Rating Migrated) Proposed Long Term 3.00 CRISIL B+/Stable (ISSUER NOT Bank Loan Facility COOPERATING; Rating Migrated) Term Loan 9.50 CRISIL B+/Stable (ISSUER NOT COOPERATING; Rating Migrated) CRISIL has been consistently following up with SSPL for obtaining information through letters and emails dated April 26, 2018, May 11, 2018, June 6, 2018 and June 11, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of Speciality Silica Private Limited. Which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on Speciality Silica Private Limited is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower'. Therefore, on account of inadequate information and lack of management cooperation, CRISIL has migrated the rating on bank facilities of Speciality Silica Private Limited to 'CRISIL B+/Stable Issuer not cooperating'. Set up in 2004, SSPL is promoted by Mr Ravi Soni, who has been associated with the chemicals industry for around three decades. The company produces precipitated silica with capacity of 6000 tpa. Currently, it primarily manufactures rubber-grade silica and silica for dental care. The company commenced production in fiscal 2009. STARK RIDGE: CRISIL Moves B- Rating to Not Cooperating Category --------------------------------------------------------------- CRISIL has migrated the rating on bank facilities of Stark Ridge Paper Private Limited (SRPPL) to 'CRISIL B-/Stable/CRISIL A4 Issuer not cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Bank Guarantee 1.17 CRISIL A4 (ISSUER NOT COOPERATING; Rating Migrated) Long Term Loan 23.50 CRISIL B-/Stable (ISSUER NOT COOPERATING; Rating Migrated) Proposed Cash 10.00 CRISIL B-/Stable (ISSUER NOT Credit Limit COOPERATING; Rating Migrated) Proposed Long Term 16.50 CRISIL B-/Stable (ISSUER NOT Bank Loan Facility COOPERATING; Rating Migrated) CRISIL has been consistently following up with SRPPL for obtaining information through letters and emails dated April 26, 2018, May 11, 2018, June 6, 2018 and June 11, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of Stark Ridge Paper Private Limited. Which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on Stark Ridge Paper Private Limited is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower'. Therefore, on account of inadequate information and lack of management cooperation, CRISIL has migrated the rating on bank facilities of Stark Ridge Paper Private Limited to 'CRISIL B- /Stable/CRISIL A4 Issuer not cooperating'. SRPPL was incorporated on July 1, 2005, promoted by Mr Manoj Kasera, Mr Gyan Chandra Jaiswal, and Mr Deepak Tulsyan. The company was initially named as Vanachal Metals Private Limited, which was changed in July 2014. SRPPL has set up a plant for manufacturing kraft paper. The plant, at East Singhbhum near Jamshedpur, Jharkhand, has a processing capacity of about 48,000 tonne per annum. STERLING CAST: CARE Moves B+ Rating to Not Cooperating Category --------------------------------------------------------------- CARE Ratings has migrated the rating on bank facility of Sterling Cast and Forge (SCF) to Issuer Not Cooperating category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank Facilities 3.35 CARE B+; Issuer not cooperating Short term Bank Facilities 2.00 CARE A4; Issuer not cooperating Detailed Rationale and key rating drivers CARE has been seeking information from SCF to monitor the rating(s) vide e-mail communications/letters dated May 28, 2018 and numerous phone calls. However, despite CARE's repeated requests, the firm has not provided the requisite information for monitoring the ratings. In the absence of minimum information required for the purpose of rating, CARE is unable to express opinion on the rating. In line with the extant SEBI guidelines CARE's rating on Sterling Cast and Forge's bank facilities will now be denoted as CARE B+/CARE A4; ISSUER NOT COOPERATING. Detailed description of the key rating drivers At the time of last rating in June 2015 the following were the rating strengths and weaknesses: Key Rating Strengths Experienced promoters: Mr. Subhash Chander and Mrs. Anjana Shoor have total work experience of around four decades and three & a half decades respectively in the manufacturing of hand tools. Both the partners have accumulated this experience though their association with SCF and other regional entities engaged in similar business. Moderate Profitability margins: The profitability margins of the firm are moderate as reflected by PBILDT margin and PAT margin of 7.98% and 1.92% respectively in FY14(refers to the period April 1 to march 31). Key rating Weaknesses Small scale of operations with low net worth base: The firm's scale of operations has remained low marked by Total Operating Income (TOI) of INR12.32 crore for FY14 and tangible net worth of INR2.37 crore as on March 31, 2014. Leveraged capital structure: The firm has a leveraged capital structure marked by overall gearing ratio of 2.00x as on March 31, 2014. Weak debt coverage indicators: The debt coverage indicators of the firm are weak as reflected by interest coverage ratio and total debt to GCA of 1.88x and 10.82x respectively for FY14. Working capital intensive nature of operations: The operations of the firm are working capital intensive as reflected by average operating cycle of 151 days as on March 31, 2014. The working capital limits stood fully utilized for 12 months period ended May, 2015. Susceptible to volatility in raw material prices: The main raw materials of the firm are steel and iron alloys. The prices of steel are driven by the international prices which had been volatile in past. Foreign exchange fluctuation risk: With cash outlay for procurement in Indian currency and sales realization in foreign currency, the firm is exposed to the fluctuation in exchange rates. Highly fragmented and competitive nature of the industry: SCF is also exposed to high fragmentation in the hand tools industry, which has numerous players at the bottom of the value chain due to low entry barriers, low capital and technology requirements. Partnership nature of its constitution: SCF's constitution as a partnership firm has the inherent risk of possibility of withdrawal of the partner's capital at the time of personal contingency and firm being dissolved upon the death/retirement/insolvency of partners. Sterling Cast and Forge (SCF) was established in April, 2010 as a partnership firm with Mr. Subash Chander (aged 62 years) and Mrs. Anjana Shoor (aged 57 years) as its partners sharing profits and losses equally. The firm is engaged in manufacturing of hand tools such as spanners, hammers, pliers, wrenches etc at its manufacturing facility located in Jalandhar, Punjab with installed capacity of manufacturing 1400 tonne of hand tools per annum. The raw materials required for manufacturing of tools are steel and iron alloys which are procured from Punjab. The firm exports its hand tools under the brand name of "Metaque" and covers the market of Egypt, UAE, USA, South Africa etc. (exports constituted ~75% of the total sales in FY14). The remaining portion of the finished products are sold to various wholesalers and retailers located in Punjab, Delhi and Maharashtra under the brand name of 'Sterling'. SUD PINES: CARE Migrates B+ Rating to Not Cooperating Category -------------------------------------------------------------- CARE Ratings has migrated the rating on bank facility of Sud Pines Private Limited (SPP) to Issuer Not Cooperating category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank Facilities 4.50 CARE B+; Issuer not cooperating; Based on best available Information Short term Bank Facilities 1.38 CARE A4; Issuer not cooperating; Based on best available Information Detailed Rationale and key rating drivers CARE has been seeking information from SPP to monitor the rating(s) vide e-mail communications/letters dated May 28, 2018 and numerous phone calls. However, despite CARE's repeated requests, the company has not provided the requiste information for monitoring the ratings. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the publicly available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. The rating on Sud Pines Private Limited's bank facilities will now be denoted as CARE B+/ CARE A4; ISSUER NOT COOPERATING. Detailed description of the key rating drivers At the time of last rating in May 2015 the following were the rating strengths and weaknessess: (updated for information available) Key Rating Strengths Experienced management: The directors, Mr. Satish Chandra Sood and Mrs. Neena Sood have total work experience of around three and a half decades in chemical and oil industry. The directors have accumulated this experience through their association with SPP and another group concern namely 'Jammu Pine and Synthetic Products (JPS)', a partnership firm established in 1981 by Mr.Satish Chandra Sood and his father (operations got discontinued in 2010). Moderate Operating Cycle: The average operating cycle of the company stood moderate at 62 days for FY17 (refers to the period April 1 to March 31). Association with reputed customer base: The company is supplying to various reputed players like Reckitt Benckiser group, Kelkar group (Keva Fragrances Private Limited, S.H Kelkar and Company Limited and K.V Arochem Private Limited). Key rating Weaknesses Small scale of operations with low networth base: The company's scale of operations has remained low marked by Total Operating Income(TOI) of INR36.85 crore for FY17 and tangible net worth of INR1.97crore as on March 31, 2017. Low profitability margins: The profitability margins of the company are low as indicated by PBILDT margin and PAT margin of 4.62% and 0.81% respectively in FY17. Leveraged capital structure: The company has a leveraged capital structure marked by overall gearing ratio of 3.31x as on March 31, 2017. Weak debt coverage indicators: The debt service coverage indicators stood weak marked by interest coverage ratio of 1.39x and total debt to GCA ratio of 12.80x for FY17. Highly competitive industry along with susceptibility to volatility in prices of raw materials: SSP operates in highly fragmented industry which has large number of organized and unorganized players leading to intense competition. Moreover, alpha pinene and turpentine oil are derived from pine trees which make them forest based products. This exposes the raw materials to various policies of the government and fluctuations in prices. Dependence on imports for raw material and exposure to foreign fluctuations: The company mainly imports its raw materials from China and Indonesia while the finished goods are sold in domestic markets. With cash outlay for procurement in foreign currency and sales realization in Indian currency, the company is exposed to the fluctuation in exchange rates. Sud Pines Private Limited (SPP) was incorporated in June, 1988 and is currently being managed by Mr. Satish Chandra Sood and Mrs Neena Sood. SPP is engaged in the manufacturing of oil and chemicals like Pine oil, Terpineol, and Terpinolene. The company has its manufacturing facility located at Jammu, Jammu & Kashmir with total installed capacity of manufacturing 20 lakh litre of chemicals and oils per annum as on March 31, 2015. The company sells its products to numerous manufacturers in industries like perfumes, disinfectants, soaps and paints and also to various wholesalers located in Maharashtra, Gujarat, Uttaranchal, Tamil Nadu and Karnataka. The main raw materials for SPP are Alpha Pinene and Turpentine oil which are imported from China and Indonesia and the rest are procured directly from manufacturers based in Jammu & Kashmir and Himachal Pradesh. SURAJ TRADELINK: CRISIL Migrates B+ Rating to Not Cooperating ------------------------------------------------------------- CRISIL has migrated the rating on bank facilities of Suraj Tradelink Private Limited (STPL) to 'CRISIL B+/Stable Issuer not cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Bill Discounting 1.75 CRISIL B+/Stable (ISSUER NOT COOPERATING; Rating Migrated) Cash Credit 3.00 CRISIL B+/Stable (ISSUER NOT COOPERATING; Rating Migrated) Proposed Cash Credit Limit 1.25 CRISIL B+/Stable (ISSUER NOT COOPERATING; Rating Migrated) Proposed Long Term Bank Loan Facility 1.00 CRISIL B+/Stable (ISSUER NOT COOPERATING; Rating Migrated) CRISIL has been consistently following up with STPL for obtaining information through letters and emails dated May 22, 2018, June 6, 2018 and June 11, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of Suraj Tradelink Private Limited. Which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on Suraj Tradelink Private Limited is consistent with 'Scenario 2' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BBB' rating category or lower'. Therefore, on account of inadequate information and lack of management cooperation, CRISIL has migrated the rating on bank facilities of Suraj Tradelink Private Limited to 'CRISIL B+/Stable Issuer not cooperating'. Incorporated in 2001 by Mr. Anjani Agarwal and Mr. Madhur Todi, STPL is part of the Anjani group. The company manufactures and exports home textiles such as bed sheets, curtains, towels, table linen, cotton fabrics, pillow cover, and cushion covers. The manufacturing cum warehouse facility is located in Piplaj (Gujarat). The day-to-day operations of the company are managed by the directors, Mr. Premchand Gupta and Mr. Khetaram Purohit. SVARRNIM INFRASTRUCTURES: Ind-Ra Hikes LT Issuer Rating to 'BB-' ---------------------------------------------------------------- India Ratings and Research (Ind-Ra) has upgraded Svarrnim Infrastructures Private Limited's (SIPL) Long-Term Issuer Rating to 'IND BB-' from 'IND B+'. The Outlook is Stable. The instrument-wise rating actions are: -- INR50.0 mil. Fund-based limits upgraded with IND BB-/ Stable/IND A4+ rating; and -- INR247.5 mil. (increased from INR147.5 mil.) Non-fund-based limits upgraded with IND A4+ rating. KEY RATING DRIVERS The upgrade reflects the year-on-year improvement in SIPL's revenue to a medium level of INR903.07 million in FY18 from a small level of INR844.81 million in FY17 (FY16: INR374.58 million). FY18 financials are provisional. Revenue grew at a CAGR of 87.22% over FY15-FY18. The improvement in revenue over FY16- FY18 was driven by a healthy order book position and timely realization of the work orders. However, the top line growth was muted during FY17-FY18, despite having ample work orders, due to the lack of clarity during the implementation phase of the goods and services tax regime, which led to an increase in unbilled revenue during 2QFY18 and 3QFY18. EBITDA margins, remained modest, despite improving to 9.47% in FY18 from 7.69% in FY17 (FY16: 10.01%) due to a reduction in raw material cost. The ratings, however, are constrained by SIPL's stressed liquidity as indicated by its full utilization of the fund-based working capital limit during the 12 months ended May 2018. The ratings also factor in SIPL's comfortable credit metrics, supported by positive cash flows that have led to an overall net cash position. The credit metrics of the company improved significantly in FY18 on account of an improvement in absolute EBITDA and a decrease in total debt of the company, with interest coverage (operating EBITDA/gross interest expense) of 4.25x (FY17: 3.29x; FY16: 2.22x) and net leverage (Ind-Ra adjusted net debt/operating EBITDAR) of 0.74x (1.45x; 2.69x). Also, SIPL's promoters have almost a decade-long experience in the government contracting business. RATING SENSITIVITIES Negative: A significant decline in the EBITDA margin leading to deterioration in credit metrics and/or further stretch in liquidity profile, on a sustained basis, would be negative for the ratings. Positive: A significant improvement in the revenue, driven by a stronger order book position, an improvement in the liquidity position and sustained comfortable credit metrics, on a sustained basis, would be positive for the ratings. COMPANY PROFILE Established in February 2010, SIPL is engaged in the business of civil construction work (building construction only) mainly for government organizations. The unit has its registered office in Delhi. TIRUPUR PANDIT: CRISIL Migrates B Rating to Not Cooperating ----------------------------------------------------------- CRISIL has migrated the rating on bank facilities of Tirupur Pandit Hosiery Millss Private Limited (TPHMPL) to 'CRISIL B/Stable/CRISIL A4 Issuer not cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Foreign Bill Discounting 6 CRISIL A4 (ISSUER NOT COOPERATING; Rating Migrated) Foreign Bill Discounting 1.5 CRISIL B/Stable (ISSUER NOT COOPERATING; Rating Migrated) Foreign Letter of Credit 1.5 CRISIL B/Stable (ISSUER NOT COOPERATING; Rating Migrated) Overdraft 1.0 CRISIL B/Stable (ISSUER NOT COOPERATING; Rating Migrated) Packing Credit 24.8 CRISIL A4 (ISSUER NOT COOPERATING; Rating Migrated) Proposed Long Term 17.2 CRISIL B/Stable (ISSUER NOT Bank Loan Facility COOPERATING; Rating Migrated) CRISIL has been consistently following up with TPHMPL for obtaining information through letters and emails dated May 14, 2018, June 6, 2018 and June 11, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of Tirupur Pandit Hosiery Millss Private Limited. Which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on Tirupur Pandit Hosiery Millss Private Limited is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower'. Therefore, on account of inadequate information and lack of management cooperation, CRISIL has migrated the rating on bank facilities of Tirupur Pandit Hosiery Millss Private Limited to 'CRISIL B/Stable/CRISIL A4 Issuer not cooperating'. TPHMPL, incorporated in 1974, manufactures ready-made garments. Its operations are managed by Ms S Latha and Mr S Jothimanikandan ========= J A P A N ========= MT. GOX: Begins Civil Rehabilitation Proceedings ------------------------------------------------ Cointelegraph reports that MtGox Co., Ltd. has formally entered civil rehabilitation proceedings, officials announced on June 22. A statement and accompanying documentation confirm the move, which will see attorney Nobuaki Kobayashi act as civil rehabilitation trustee, the report says. According to Cointelegraph, Mr. Kobayashi was responsible for selling vast tranches of Bitcoin reserves beginning Q4 last year to reimburse Mt. Gox users who lost money in the exchange's mass hack in late 2013. The sell-offs appeared to have a conspicuous effect on markets, Bitcoin prices tumbling immediately following each transaction, which Mr. Kobayashi performed on major exchanges. "The power and authority to administer and dispose of MTGOX's assets is still vested exclusively in me, and I will implement the civil rehabilitation proceedings, including the administration of MTGOX's assets and the investigation of claims, subject to the Tokyo District Court's supervision," Kobayashi wrote in the new documentation, Cointelegraph relays. However, due to the bankruptcy proceedings now being halted as part of the civil rehabilitation, Mr. Kobayashi will not sell any further bitcoins, with users set to receive compensation in BTC instead of fiat currency as originally intended, notes the report. " . . . In the civil 2 rehabilitation proceedings in this matter, claims seeking a refund of Bitcoins ("Bitcoin Claims") will also not be converted into monetary claims after the commencement of the civil rehabilitation proceedings," Mr. Kobayashi, as cited by Cointelegraph, continued. About Mt. Gox Bitcoin exchange MtGox Co., Ltd., filed a petition under Chapter 15 of the U.S. Bankruptcy Code on March 9, 2014, days after the company sought bankruptcy protection in Japan. The bankruptcy in Japan came after the bitcoin exchange lost 850,000 bitcoins valued at about $475 million "disappeared." The Japanese bitcoin exchange halted trading in February 2014. It filed for bankruptcy protection in the U.S. to prevent customers from targeting the cash it holds in U.S. bank accounts. The Chapter 15 case is In re MtGox Co., Ltd., Case No. 14-31229 (Bankr. N.D. Tex.). The Chapter 15 Petitioner is Robert Marie Mark Karpeles, the company's chief executive officer. Mr. Karpeles is represented by John E. Mitchell, Esq., and David William Parham, Esq., at Baker & Mcckenzie LLP, in Dallas, Texas. The bankruptcy trustee and foreign representative of MtGox Co. Ltd. with respect to the Japan Bankruptcy Proceedings: MtGox Co., Ltd. Office of Bankruptcy Trustee Kojimachi 3 chome building #202 Kojimachi 3-4-1 Chiyoda-ku, Tokyo Tel: +81-3-4588-3922 Attn: Nobuaki Kobayashi The Ontario Superior Court of Justice (Commercial List) on Oct. 3, 2014, ordered, pursuant to Section 272 of the Bankruptcy and Insolvency Act, that the bankruptcy proceedings commenced with respect to MtGox Co., Ltd. -- aka Mt. Gox KK and dba MtGox -- be recognized as a "foreign main proceeding." The Canadian legal counsel to the bankruptcy trustee and foreign representative of MtGox Co., Ltd, are Jeffrey Carhart and Margaret Sims, at Miller Thomson LLP. The company said it has estimated assets of $10 million to $50 million and debts of $50 million to $100 million. =============== M A L A Y S I A =============== 1MDB: SSM Wants KPMG to Clarify Status of Audit Reports ------------------------------------------------------- The Sun Daily reports that the Companies Commission Malaysia (SSM) will be seeking further clarification from KPMG on the status of audit reports of 1Malaysia Development Bhd's (1MDB) financial statements, following news reports that said the statements between 2010 and 2012 were inaccurate. According to the report, SSM said in a statement issued an hour before midnight that it would seek an explanation from KPMG on the issue of reliability of the financial statements filed with them. The Sun Daily relates that SSM said as the corporate regulator tasked with the enforcement of the Companies Act 2016, it views the media reports with concern. It went on to say that it will ensure that necessary and immediate action is taken to comply with the Companies Act 2016. This action may include having the relevant parties rectify the financial information filed with the companies registrar, the report adds. Kuala Lumpur-based 1Malaysia Development Bhd (1MDB) operates as a government agency. The Company offers financial assistance, analysis, and advice through investors, corporations, and consultants to startups and growth companies. 1MDB focuses on investments with strategic value and high multiplier effects on the economy, particularly in energy, real estate, tourism, and agribusiness. As reported in the Troubled Company Reporter-Asia Pacific on July 23, 2015, Reuters said Singapore Police Force has frozen two bank accounts to help with an investigation in to Malaysia's troubled state-owned investment fund 1Malaysia Development Bhd (1MDB), which is being probed by authorities in Malaysia for financial mismanagement and graft. Reuters said the freezing of the Singapore bank accounts follows a similar move in Malaysia where a task force investigating 1MDB said earlier in July that it had frozen half a dozen bank accounts following a media report that nearly $700 million had been transferred to an account of Malaysia's Prime Minister Najib Razak. The Wall Street Journal reported on July 3, 2015, that investigators looking into 1MDB had traced close to US$700 million of deposits moving through Falcon Bank in Singapore into personal bank accounts in Malaysia belonging to Najib. The TCR-AP, citing Bloomberg News, reported on Nov. 26, 2015, that 1MDB agreed to sell its power assets to China General Nuclear Power Corp. for MYR9.83 billion ($2.3 billion) as the state investment company moved one step closer to winding down operations after its mounting debt raised investor concern. Bloomberg related that the company faced cash-flow problems after a planned initial public offering of Edra faced delays amid unfavorable market conditions, President Arul Kanda said Oct. 31, 2015. The listing plan was later canceled as the company opted for a sale of the assets, Bloomberg noted. The TCR-AP, citing The Wall Street Journal, reported on April 27, 2016, that the company defaulted on a $1.75 billion bond issue, triggering cross defaults on two other Islamic notes totaling MYR7.4 billion ($1.9 billion). Asian Nikkei Review reported in June 2016 that Malaysia has replaced the board of 1Malaysia Development Berhad with treasury officials, paving the way for the dissolution of the troubled state investment fund. APFT BHD: Auditor Raises Going Concern Doubt -------------------------------------------- The Sun Daily reports that APFT Bhd's external auditor Messrs Adam & Co has highlighted a material uncertainty that may cast doubt on its ability to continue as a going concern. For the period from Aug. 1, 2016 to Jan. 31, 2018, the aviation training provider reported a net loss of MYR67.57 million and MYR14.51 million at the group and company level, respectively, Sun Daily discloses. It also had a negative operating cash flow of MYR8.39 million and MYR14.29 million respectively, with total current liabilities exceeding total current assets by MYR31.92 million, the report says. In addition, the auditor highlighted that one of APFT's subsidiaries was unable to meet its borrowings obligations during the financial period, leading to letters of demand and statement of claim from a few principal bankers, according to Sun Daily. Nonetheless, APFT said management has taken relevant steps to restart the flight training business and air charter services, in line with its restructuring plan, the report relays. An application has been submitted for the flight training licence. "On the hand other, the management is submitting its application for air charter licence. The board is in the opinion that these measures would improve the financial performance of the group. The exercise will be completed upon receiving the relevant licenses from the licensing authorities," APFT said. APFT Berhad owns and operates flight education and training academy, the Asia Pacific Flight Training Academy (APFTA), located at Sultan Ismail Petra Airport, Pengkalan Chepa, Kota Bharu Kelantan. APFTA is a flight education and training service provider in Malaysia. The Company operates through two segments: flight education and training, and mechanical works and services. It has a fleet strength of over 30 aircrafts, and over 40 flight and ground instructors operating out of three commercial airports in Malaysia. APFT was admitted into Practice Note 17 (PN17) category in January this year as its shareholders' equity fell below the 50% threshold. BERJAYA MEDIA: Narrows Net Loss to MYR6.03 Million in 4Q -------------------------------------------------------- Sulhi Azman at theedgemarkets.com reports that Berjaya Media Bhd (BMedia), which publishes the Sun newspaper, narrowed its net loss to MYR6.03 million in the fourth financial quarter ended April 30, 2018 (4QFY18) from MYR14.01 million a year ago, as it no longer has to incur impairment loss on publishing rights. In 4QFY17, the group incurred MYR12 million in impairment loss. This resulted in a lower loss per share of 2.56 sen for 4QFY18 from 5.96 sen for 4QFY17, the report says. According to theedgemarkets.com, quarterly revenue fell 28.4% to MYR6.5 million from MYR9.07 million a year ago, mainly due to lower advertising income reported by Sun Media Corp Sdn Bhd. For the full FY18, however, BMedia saw its net loss narrow to MYR12.5 million from MYR21.13 million as its revenue fell 22.2% to MYR33.27 million from MYR42.75 million in FY17, the report discloses. theedgemarkets.com relates that on prospects, BMedia said the group is operating in a difficult business environment and is of the view that its business for the next financial year will remain challenging due to the prevailing economic conditions that will impact the advertising and promotion budgets of most corporate clients and advertisers. "In view of the group's current financial condition, more marketing efforts are being initiated to improve the group's financial position and to preserve the shareholders' equity funds," the group, as cited by theedgemarkets.com, said in a filing with Bursa Malaysia on June 26. It pointed out that the board has been exploring other options including diversifying into new businesses outside the media sector, to strengthen the financial position of the group with the primary objective of regularising its Practice Note 17 (PN17) condition, according to theedgemarkets.com. "At this juncture, the group is looking at proposals and seeking for an extension of time from Bursa to submit its regularisation plan," it added, theedgemarkets.com relays. About Berjaya Media Berjaya Media Berhad is an investment holding company. The Company, through its subsidiaries, is engaged in publication, printing and distribution of daily newspaper. The Company's segments include investment holding, publishing and others. The Company's publication, theSun, is read in the market centers of the Klang Valley, Penang and Johor Bharu, as well as in cities and towns of Peninsular Malaysia. The Company's publication publishes news on politics and business, human interest and governance, entertainment and lifestyle, and sports. theSun also has an online presence at www.thesundaily.my, where top news of the day is updated and presented to its readers. The Company offers theSun through approximately 3,200 sunspots or pick-up points along morning routes to the workplace, gym, college or breakfast. The Company's subsidiaries include Sun Media Corporation Sdn. Bhd. and Gemtech (M) Sdn. Bhd. Berjaya Media slipped into PN17 (Practice Note 17) status in June 2017 as its shareholders' equity fell short of listing requirements. =============== M O N G O L I A =============== BANK OF MONGOLIA: S&P Affirms 'B-/B' ICR, Outlook Stable -------------------------------------------------------- S&P Global Ratings affirmed its 'B-' long-term and 'B' short-term issuer credit rating on Trade and Development Bank of Mongolia LLC (TDB). The outlook remains stable. At the same time, S&P affirmed its 'B-' long-term issue rating and 'B' short-term issue rating on TDB's debt. The rating reflects the bank's strong market share in domestic loans and deposits. TDB's low risk-adjusted capitalization and sector loan concentrations temper these strengths. Its asset quality metrics are broadly in line with industry average. S&P said, "In our view, credit risk in Mongolia's economy is improving. At the same time, governance and transparency in the banking industry is increasing. If this continues, we may lift the anchor rating, the starting point in assigning an issuer credit rating for banks in Mongolia. That in turn lifts the stand-alone credit profile of TDB, which is currently on a positive trend. "We expect TDB to maintain its strong market position in Mongolia, especially in corporate banking. The bank is rebalancing its portfolio toward more retail lending. We have factored in loan growth of 15%-20% over the next two years. This is in line with an expansionary monetary policy and increased lending opportunities with the economic recovery. "We expect TDB's asset quality to remain stable and credit provisions to be manageable. This considers the recent asset quality review and upcoming IFRS9 implementation. Based on these assumptions, we estimate the bank's risk-adjusted capital (RAC) ratio will be slightly below 3% over the next 18-24 months, from about 3.1% at the end of 2017. We could apply a lower risk weight to credit exposures if the economic risk in Mongolia categorically improves, potentially improving the RAC ratio. "In our view, TDB faces inherent credit risks due to its portfolio concentration in a narrow-based economy. TDB has a larger corporate loan portfolio than major local peers', and the bank's business remains somewhat concentrated in some riskier industries, including mining, construction, and real estate. "We expect TDB to maintain its funding profile. The bank's stable funding ratio improved to about 120% by the end of 2017, from 105% in 2015, because of rising long-term borrowings from other financial institutions. We expect the ratio to remain largely in line with the industry average in the coming few years. If TDB's strategy increases deposit-taking outside of Ulaanbaatar, that would strengthen its funding profile. We believe the bank's liquidity profile will remain adequate, backed by a sufficient level of liquid assets. TDB's ratio of liquid assets to short- term wholesale funding was about 1.9x at the end of 2017. "The stable outlook on TDB reflects our outlook on the sovereign credit rating on Mongolia and our view that the bank is unlikely to be rated above the sovereign over the next one year. "We could upgrade TDB if we raise the sovereign rating on Mongolia and the bank's SACP improves at the same time. The SACP could improve if: We view credit risk in the economy and governance and transparency in the banking industry continue to improve, such that we lift the anchor rating for Mongolian banks to 'b+' from 'b'; The bank sustains its RAC ratio above 3% in the coming two years; or TDB demonstrates significantly better asset quality, risk diversification, and lower credit costs compared to its peers. "We could downgrade TDB if we lower the sovereign rating on Mongolia." GOLOMT BANK OF MONGOLIA: S&P Affirms 'B-/B' ICRs, Outlook Stable ---------------------------------------------------------------- S&P Global Ratings affirmed its 'B-' long-term and 'B' short-term issuer credit rating on Golomt Bank of Mongolia. The outlook on the long-term rating is stable. S&P said, "Our ratings affirmation reflects the bank's solid franchise in Mongolia. Its very weak risk-adjusted capitalization (RAC) and weaker-than-average asset quality metrics temper these strengths. "In our view, credit risk in the Mongolian economy is improving and governance and transparency in the country's banking industry is increasing. Should this continue, building a longer track record, we could lift the anchor rating, the starting point of our rating construction for banks in Mongolia. A higher anchor could in turn potentially lift the stand-alone credit profile (SACP) of Golomt. "We expect Golomt to maintain its solid franchise in Mongolia, particularly in card services, international trade finance, treasury services, and deposit services. "We factor in loan growth of about 20% in 2018 considering the bank's growth expectations, increased lending opportunities with the economic recovery, and asset mix changes that increase the proportion of loans relative to securities holdings. This pace of asset growth assumes a timely near-term capital infusion from existing shareholders to expand the narrow headroom above the regulatory capital threshold. We factor in a significantly lower growth in subsequent years because of increased uncertainty around timely capital infusions." Golomt made a loss in 2017, owing to an adverse revaluation of fixed property assets. This added to pressure on its capital base. The bank's profitability faces constraints, similar to other banks in Mongolia, partly due to a lower policy rate narrowing net interest margins (NIMs). Other constraints include potential provisions arising from collateral valuations under the country's recent asset quality review, and implementation of International Financial Reporting Standard (IFRS) 9. Mongolian banks will implement IFRS 9 in 2020. S&P said, "In light of the above, we estimate that Golomt's RAC ratio will remain slightly above our downgrade review trigger of 2% over the next one to two years, compared with around 2.1% as of end-2017. We could apply a lower risk weighting to credit exposures should economic risk in Mongolia categorically improve. Such an adjustment could boost the banks' RAC ratio on a one-off basis but up to 3%--our threshold for a more favorable assessment. "In our view, Golomt faces inherent credit risks due to its portfolio concentration in a narrow-based economy. The bank also has a significant amount of loans that are either overdue but not impaired, or restructured and not impaired. A tightened asset classification protocol closer to international best practice would add credit cost pressures. We note that Golomt's slower- than-peers' loan growth in recent years and proactive write-offs could soften any potential adverse impact. "We expect Golomt to maintain an average funding profile in the next one to two years, backed by its strong retail franchise in the domestic banking industry. The bank's loan-to-deposit ratio decreased to around 65% as of Dec. 31, 2017 from 101% on Dec. 31, 2014 as capital constraints deter loan growth while retail deposits continue to grow. This ratio is lower than that of both major peers' and the industry average. The bank's stable funding ratio was about 130% at the end of 2017, and has been consistently above 100% and largely in line with the industry average. Golomt is less reliant on wholesale funding and foreign currency needs than some of its domestic peers. "We expect the bank's liquidity profile to remain stable, backed by an adequate level of liquid assets. Golomt's ratio of liquid assets to short-term wholesale funding was about 2.0x at the end of 2017. "The stable outlook on Golomt reflects our rating and outlook on Mongolia (B-/Stable/B) and our view that the bank is unlikely to be rated above the sovereign in the next year. "We believe our assessment of the bank's SACP could improve over the next 12-24 months if it sustainably maintains its asset quality and credit costs in line with domestic peers. However the bank's credit profile is likely to be influenced by the sovereign, given the bank is highly susceptible to domestic economic conditions. "We could downgrade Golomt if the bank's RAC ratio falls and sustains below 2%. We could also downgrade Golomt if we downgrade the sovereign. "We could upgrade Golomt if we raise the sovereign rating on Mongolia and our assessment of the bank's SACP improves. The latter could happen if: (1) we view credit risk in the economy and governance and transparency in the banking industry as continuously improving, such that we lift the bank anchor rating for Mongolia to 'b+' from 'b'; or (2) Golomt sustains its capitalization with a RAC ratio above 3% in the coming two years; or (3) the bank demonstrates ongoing and significantly better asset quality, risk diversification, and lower credit costs than peers. The last two scenarios are less likely, in our view." ================= S I N G A P O R E ================= IBC CAPITAL: Moody's Alters Outlook to Stable, Affirms B2 CFR ------------------------------------------------------------- Moody's Investors Service has changed the rating outlook for IBC Capital Limited (Goodpack) to stable from negative. Moody's has also affirmed Goodpack's B2 corporate family rating (CFR). Additionally, Moody's has assigned a B2 rating on the $610 million first lien term loan due 2023 and B3 rating on the $155 million second lien term loan due 2024. The loans are issued by Goodpack and IBC Capital US LLC as co-borrowers, and guaranteed by substantially all subsidiaries. Moody's has withdrawn the B2 rating on the existing $550 million first lien term loan due 2021 and B3 rating on the existing $170 million second lien term loan due 2022, following their repayment with proceeds from the amended loans. RATINGS RATIONALE "The change in the rating outlook to stable reflects our expectation of continued improvement in Goodpack's operating performance and leverage profile over the next 12-18 months, as well as the improvement in its liquidity and maturity profile," says Brian Grieser, a Moody's Vice President and Senior Credit officer. Goodpack's operating performance will likely remain robust for the fiscal year ending June 30, 2019, largely due to the stronger revenue performance in the synthetic and natural rubber markets, recent new contract wins, better container utilization rates - which improved to 62.4% at 31 March 2018 from 58.6% at June 30, 2017 - and the ongoing rationalization of its logistic costs. Moody's expects Goodpack's leverage - as measured by adjusted debt/EBITDA - to improve to around 5.5x in the year ending June 30, 2019 from 6.0x at March 31, 2018 and 6.8x at June 30, 2017. Moody's says the deleveraging will be driven by a combination of EBITDA growth in the mid- to high-single-digit range and stable debt levels. On June 18, 2018, Goodpack executed an amendment to its credit agreement, which raised first lien loans by $76.5 million to $610 million. The proceeds were used to reduce its second lien term loan to $155 million from $170 million and repay $55 million of revolver borrowings. The maturity of first and second lien loans were extended by two years to 2023 and 2024, respectively. Moody's expects Goodpack to maintain very good liquidity over the next 12 months, supported by cash balances of $34 million at March 31, 2018 and access to its $75 million revolving credit facility, of which, $69 million is estimated to be available. Moody's expects that Goodpack's operating cash flow will prove sufficient to cover its committed capital spending and service its debt amortization of $6.1 million over the next 12 months. The B2 CFR continues to reflect Goodpack's: (1) high financial leverage; (2) aggressive financial policies, following its acquisition by Kohlberg Kravis Roberts & Co L.P.; (3) small scale when compared to rated peers; and (4) high customer, channel and supplier concentration. These factors are balanced against Goodpack's leading position in the niche logistics market for rubber and synthetic rubber and high EBITDA margins, which are typically at or above 45%. Moody's could upgrade the CFR if Goodpack's financial leverage improves, such that adjusted debt-to-EBITDA falls below 5.0x and EBIT to interest expense exceeds 2.5x over a sustained period, while maintaining its very good liquidity profile and earnings momentum. On the other hand, the rating could be downgraded, if Goodpack's earnings decline, margins weaken or the company executes any debt financed dividends or acquisitions. A negative rating action will likely occur if: (1) debt-to-EBITDA increases to over 6.0x on a sustained basis, and EBIT to interest falls below 1.25x; or (2) available liquidity - defined as cash plus committed revolving facilities available - falls below $40 million. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. IBC Capital Limited, operating as Goodpack, acquired Goodpack in September 2014 for $1.4 billion. IBC Capital Limited is an indirect wholly owned subsidiary of a fund affiliated and advised by Kohlberg Kravis Roberts & Co L.P. Goodpack, headquartered in Singapore, owns a fleet of 3.8 million intermediate bulk containers used for the packaging, transportation and storage of cargo; primarily natural rubber and synthetic rubber. ********* 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 ***