/raid1/www/Hosts/bankrupt/TCRAP_Public/180816.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Thursday, August 16, 2018, Vol. 21, No. 162
Headlines
A U S T R A L I A
CRO TRAVEL: Second Creditors' Meeting Set for August 21
CROWDSPARK LTD: Second Creditors' Meeting Set for Aug. 21
ONSLOW MINERALS: First Creditors' Meeting Set for August 22
PIEROTH WINES: First Creditors' Meeting Set for August 23
SHINSEN TAIJUTSU: First Creditors' Meeting Set for Aug. 22
SUMO GROUP: Second Creditors' Meeting Set for August 22
TERRIGAL DEVELOPMENTS: First Creditors' Meeting Set for Aug. 27
C H I N A
CHINA AOYUAN: Fitch Affirms BB- IDR & Alters Outlook to Positive
GANGTAI GROUP: Fitch Withdraws 'B-' LT IDR & Sr. Unsec. Rating
GOLDEN WHEEL: S&P Withdraws 'B' Issuer Credit Rating
WEST CHINA CEMENT: Fitch Affirms 'BB' LT IDR & Sr. Unsec. Rating
H O N G K O N G
CHINA SOUTH: Fitch Affirms 'B' LT IDR, Outlook Stable
NOBLE GROUP: Posts US$128.3MM Net Loss in Q2 Ended June 30
NOBLE GROUP: Iceberg Calls on Investor to Join Lawsuit Campaign
I N D I A
ABHISHEK MOTORS: CRISIL Maintains D Rating in Not Cooperating
AIRVISION INDIA: CRISIL Maintains B Rating in Non-Cooperating
ASVINI FOUNDATIONS: CRISIL Lowers Rating on INR15cr Loan to D
BARNALA STEEL: CRISIL Maintains B Rating in Not Cooperating
BELLA JEWELRY: CRISIL Maintains D Rating in Not Cooperating
BHUSHAN POWER: Tata Steel, Liberty House, JSW Submit Revised Bids
BLUE MOUNTAIN: CRISIL Maintains B- Rating in Not Cooperating
BURGUNDY LIFESTYLE: CRISIL Maintains D Rating in Non-Cooperating
CMJ BREWERIES: CRISIL Maintains D Rating in Non-Cooperating
CORAL COVE: CRISIL Maintains B Rating in Non-Cooperating Category
DANCO ENTERPRISES: CRISIL Lowers Rating on INR3.5cr Loan to D
DEESAN GINNING: CRISIL Maintains C Rating in Non-Cooperating
ELITE VEHICLES: CRISIL Maintains B Rating in Non-Cooperating
EXTOL INDUSTRIES: CRISIL Maintains C Rating in Not Cooperating
FALCON BUSINESS: CRISIL Withdraws B Rating on INR6.6cr Loan
GEORGE MAIJO: CRISIL Withdraws D Rating on INR25cr Cash Loan
GLOBSYN KNOWLEDGE: CRISIL Lowers Rating on INR12.7cr Loan to D
GOPISH PHARMA: CARE Moves D Rating to Not Cooperating Category
INDIAN ARMOUR: CARE Lowers Rating on INR3.0cr LT Loan to B+
JET AIRWAYS: Lenders Are Wary of Extending Additional Loans
K.K. ROLLER: CARE Assigns B+ Rating to INR11cr LT Loan
KRISHI NUTRITION: Ind-Ra Maintains BB+ Rating in Non-Cooperating
MANGE RAM: CARE Assigns B+ Rating to INR15cr LT Loan
MOONAK ISPAT: CRISIL Maintains B Rating in Not Cooperating
NARMADA CEREAL: CRISIL Lowers Rating on INR52cr Loan to D
NATA DEVICES: CARE Lowers Rating on INR5.0cr LT Loan to B
O.M.S. TAMARIND: CRISIL Maintains B Rating in Not Cooperating
PAC BIO: CRISIL Raises Rating on INR5cr Cash Loan to B+
PARASHAR COKE: CARE Lowers Rating on INR74cr LT Loan to D
RAJ ELECTRICALS: CARE Lowers Rating on INR2.25cr Loan to B+
RAM KUMAR: CRISIL Maintains B- Rating in Not Cooperating Category
RAMA POWER: Ind-Ra Migrates BB+ Issuer Rating to Non-Cooperating
RANASARIA POLY: Ind-Ra Corrects July 24 Rating Release
S N TRADELINK: Ind-Ra Lowers Long Term Issuer Rating to 'BB+'
SHIVSAHAJ ENGINEERING: CARE Assigns B+ Rating to INR10.43cr Loan
SREE VEERA: CRISIL Lowers Rating on INR6.5cr Cash Loan to D
UNITED BROTHERS: Ind-Ra Assigns BB+ Issuer Rating, Outlook Stable
UNITED CAPZ: CARE Assigns B+ Rating to INR23.88cr LT Loan
VASMO AGRO: CARE Lowers Rating on INR40cr LT Loan to D
VIDEOCON INDUSTRIES: Q2 Net Loss Widens to INR2,874.21cr
I N D O N E S I A
MODERNLAND REALTY: S&P Alters Outlook to Neg. & Affirms 'B' ICR
N E W Z E A L A N D
FELTEX CARPETS: High Court OKs 2nd Trial Over False IPO Forecast
S O U T H K O R E A
KUMHO TIRE: Q2 Net Losses Widen to KRW78.26BB on FX Losses
- - - - -
=================
A U S T R A L I A
=================
CRO TRAVEL: Second Creditors' Meeting Set for August 21
-------------------------------------------------------
A second meeting of creditors in the proceedings of CRO Travel Pty
Ltd has been set for Aug. 21, 2018, at 10:00 a.m. at Chartered
Accountants Australia and New Zealand, Level 18 Bourke Place, 600
Bourke Street, in Melbourne, Victoria.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the
Company be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by Aug. 20, 2018, at 4:00 p.m.
Mathew Terence Gollant of Courtney Jones & Associates was
appointed as administrator of CRO Travel on July 17, 2018.
CROWDSPARK LTD: Second Creditors' Meeting Set for Aug. 21
---------------------------------------------------------
A second meeting of creditors in the proceedings of CrowdSpark Ltd
and NewZulu Holdings Pty Ltd has been set for Aug. 21, 2018, at
9:00 a.m. at the offices of KordaMentha, Level 5 Chifley Tower, 2
Chifley Square, 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 Aug. 20, 2018, at 4:00 p.m.
Cassandra Mathews of KordaMentha were appointed as administrator
of CrowdSpark Ltd and NewZulu Holdings on July 17, 2018.
ONSLOW MINERALS: First Creditors' Meeting Set for August 22
------------------------------------------------------------
A first meeting of the creditors in the proceedings of Onslow
Minerals Pty Ltd and Onslow Metals Pty Ltd will be held at
Charlotte Boardroom, Australian Institute of Company Directors,
Level 1, Allendale Square, 77 St Georges Terrace, in Perth, WA, on
Aug. 22, 2018, at 10:00 a.m. and 11:00 a.m.
Carl Huxtable, Cameron Shaw & Richard Albarran of Hall Chadwick
were appointed as administrators of Onslow Minerals on Aug. 10,
2018.
PIEROTH WINES: First Creditors' Meeting Set for August 23
---------------------------------------------------------
A first meeting of the creditors in the proceedings of Pieroth
Wines Pty Limited will be held at the offices of Pitcher Partners,
Level 22 MLC Centre, 19 Martin Place, in Sydney, NSW, at Aug. 23,
2018, at 11:00 a.m.
Paul Gerard Weston of Pitcher Partners was appointed as
administrator of Pieroth Wines on Aug. 13, 2018.
SHINSEN TAIJUTSU: First Creditors' Meeting Set for Aug. 22
----------------------------------------------------------
A first meeting of the creditors in the proceedings of Shinsen
Taijutsu Pty Ltd will be held at the offices of Palisade Business
Consulting, 22 Lindsay Street, in Perth, WA, on Aug. 22, 2018, at
11:00 a.m.
Jack Robert James and Paula Smith of Palisade Business Consulting
were appointed as administrators of Shinsen Taijutsu on Aug. 10,
2018.
SUMO GROUP: Second Creditors' Meeting Set for August 22
-------------------------------------------------------
A second meeting of creditors in the proceedings of:
* Sumo IP Holdings Pty Ltd
* Sumo Group Australia Pty Limited
* Sumo Salad (Franchising) Pty Limited
* Sumo Marketing Fund Pty Ltd
* SumoSalad Store Development Pty Ltd
* Sumo Salad Group Services Pty Ltd
* SumoSalad (Corporate Stores) Pty Limited
* Sumo Salad Leasing 2 Pty Limited
* Sumo Salad Consolidated Leasing Pty Limited
* SumoSalad International Franchising Pty Ltd
* SumoSalad Singapore Franchising Pty Ltd
* SumoSalad NZ Franchising Pty Ltd
* Sab Closed 1 Pty Ltd
has been set for Aug. 22, 2018, at 11:00 a.m. at the offices of
Ferrier Hodgson, Level 25, One International Towers Sydney, 100
Barangaroo Avenue, 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 Aug. 21, 2018, at 4:00 p.m.
Morgan John Kelly and Peter James Gothard of Ferrier Hodgson were
appointed as administrators of Sumo Group on July 18, 2018.
TERRIGAL DEVELOPMENTS: First Creditors' Meeting Set for Aug. 27
---------------------------------------------------------------
A first meeting of the creditors in the proceedings of Terrigal
Developments Pty. Ltd. will be held at the offices of Amos
Insolvency, 25/ 185 Airds Road, in Leumeah, NSW, on Aug. 27, 2018,
at 11:00 a.m.
Peter Andrew Amos of Amos Insolvency was appointed as
administrator of Terrigal Developments on Aug. 15, 2018.
=========
C H I N A
=========
CHINA AOYUAN: Fitch Affirms BB- IDR & Alters Outlook to Positive
----------------------------------------------------------------
Fitch Ratings has revised the Outlook on China Aoyuan Property
Group Limited (Aoyuan) to Positive from Stable and has affirmed
its Long-Term Foreign-Currency Issuer Default Rating (IDR) and
senior unsecured rating at 'BB-'.
The Outlook revision reflects the increased likelihood that Aoyuan
can sustain attributable contracted sales of more than CNY60
billion a year from 2018, supported by strong housing demand in
its home markets, increasing geographic diversification and its
track record of fast-churn strategy execution. Aoyuan has shown
financial discipline during its business expansion by keeping
leverage below 40% and maintaining healthy profitability, with an
EBITDA margin of around 25%.
KEY RATING DRIVERS
Strong Sales Momentum: Fitch expects Aoyuan's attributable
contracted sales to exceed CNY60 billion in 2018 due to it fast-
churn strategy and strong execution, which is backed by adequate
total sellable resources of over CNY120 billion at end-2017 and
strong demand in its home markets of southern China's Guangdong-
Hong Kong-Macau Greater Bay Area. Aoyuan is on track to meet its
targeted total sales of CNY73 billion in 2018, with 7M18 total
sales rising by 143% yoy to CNY46 billion. Total contracted sales
have increased by more than 8.6x since 2012 - to CNY46 billion in
2017 - achieving a CAGR of 54%.
Accelerated but Controlled Land Acquisition: Aoyuan accelerated
land acquisitions in 2017 to accommodate its national expansion
and enlarged scale. It spent around 70% of collected sales on land
replenishment (based on cash land premium paid / contracted
sales), compared with around 30% in 2014-2016. Fitch expects land
premiums to account for 40%-45% of sales during the company's
expansion over the next year or two, but to remain controlled
under its fast-churn strategy. Aoyuan mainly acquires land via
project acquisitions, which allow it to control average land
acquisition costs. Its land bank enjoyed a low average cost of
CNY2,131 per square metre (sqm) in 2017, or 20% of Fitch's
estimated average selling price for 2018.
Sufficient and Diversified Land Bank: Aoyuan's land bank had a
total gross floor area (GFA) of 23.9 million sqm as at end-2017,
sufficient for three to four years of development; with 56% of the
land by GFA located in the Pearl River Delta, of which more than
half was in the Greater Bay Area. The remainder was spread around
central and western China, the Yangtze River Delta and the Bohai
Economic Rim around Beijing as well as offshore markets. The
company plans to continue implementing a balanced city layout
during land replenishment, with a focus on southern China's Big
Bay Area, which encompasses 11 cities.
Healthy Financial Profile: Aoyuan's leverage, after adjusting for
land premium receivables and payables in adjusted inventory, rose
to 35.4% in 2017, from 32.6% in the previous year, due to
accelerated land acquisition. Moody'sexpects Aoyuan to maintain
its fast-churn model and disciplined land acquisition strategy.
Cash outflow from construction costs is likely to rise to keep
pace with increasing contracted sales, leading to higher leverage,
but the company's financial profile should stay healthy for the
next 12-18 months, as reflected in its Positive Outlook.
Moody'salso estimates sales efficiency, as measured by
attributable contracted sales/gross debt, to improve to above 1.2x
in 2018, from 0.9x in 2017. Aoyuan's EBITDA margin remained at
around 25% (2017: 25%, 2016: 26%), underpinned by its low average
land cost, which should support a healthy margin of around 25% for
the next one to three years.
Higher Business Risk: Aoyuan is more exposed to industry downside
risk given its deeper penetration into lower-tier cities and
higher commercial property exposure than 'BB-' peers. Its
contracted average selling price of around CNY10,500 per sqm
compares with CNY13,500-19,500 per sqm of peers, including Yuzhou
Properties Company Limited (BB-/Stable) and Logan Property
Holdings Company Limited (BB-/Stable). Most of Aoyuan's lower-tier
cities are satellite cities, which benefit from spill-over from
tier-1 cities with home-purchase restrictions. However, Fitch sees
lower-tier city housing markets as more vulnerable than higher-
tier cities to tighter-than-expected policies and industry
downturn.
Fitch views that Aoyuan's large exposure to commercial property
sales, which have a lower sell-through rate than residential
products and are more susceptible to economic cycles, leaves the
company more vulnerable to operational risk than peers that sell
only residential projects. Less than 25% of Aoyuan's annual sales
came from commercial products in 2017 under its integrated
project-development strategy. Fitch expects the product mix to
remain stable in the short term, since commercial products
accounted for 20% of 2018 saleable resources and 19% of land bank
by GFA at end-2017.
DERIVATION SUMMARY
Aoyuan's sales scale is comparable with 'BB-' category peers, such
as Yuzhou Properties Company Limited (BB-/Stable) and Times China
Holdings Limited (BB-/Stable), which had a sales scale of around
CNY30 billion on an attributable basis in 2017. Aoyuan maintains
stronger sales momentum than peers, as evident from its stronger
1H18 sales and higher completion rate of its full-year sales
target, which is also the highest among peers. The company kept a
healthy financial profile during its expansion, with leverage of
around 35% - the lowest among 'BB-' peers, which ranges from 38%
to 48%. These factors support the Positive Outlook on Aoyuan.
Aoyuan's scale is smaller than that of 'BB' peers, such as CIFI
Holdings (Group) Co. Ltd. (BB/Stable) and Future Land Development
Holdings Limited (BB/Stable), whose attributable sales scale was
above CNY55 billion in 2017. Aoyuan's sales efficiency, of around
0.9x in 2017, was also lower than CIFI's 1.4x and Future Land's
1.9x.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
- Attributable sales to exceed CNY60 billion in 2018 and
CNY80 billion-90 billion in 2019-2020
- Land premium accounting for 50%-60% of contracted sales each
year on a cash flow basis during 2018-2020
- Land bank life maintained at three to four years
- Company to maintain its fast-churn business model
RATING SENSITIVITIES
Developments that May, Individually or Collectively, Lead to
Positive Rating Action
- Increasing scale and geographic diversification without
compromising financial metrics, including:
- net debt/adjusted inventory sustained below 40%
- contracted sales/gross debt sustained above 1.2x
- EBITDA margin sustained above 25%
Developments that May, Individually or Collectively, Lead to
Negative Rating Action
- Failure to reach the positive guidelines in the next 12-18
months would lead to the Outlook reverting to Stable
LIQUIDITY
Adequate Liquidity: Aoyuan had CNY26.4 billion in available cash
on hand and CNY16.9 in unutilised credit facilities at end-2017,
sufficient to cover short-term debt of CNY21.1 billion.
Smooth Refinancing; Lower Borrowing Cost: Aoyuan's short-term debt
accounted for half of its total CNY42.5 billion debt at end-2017.
The company has proven its ability to refinance through multiple
channels, including the offshore and onshore bond markets this
year. Moody'shas also seen its average borrowing cost drop to 7.2%
in 2017, from 11.4% in 2013, given its broad financing channels
and improved credit profile.
GANGTAI GROUP: Fitch Withdraws 'B-' LT IDR & Sr. Unsec. Rating
--------------------------------------------------------------
Fitch Ratings has withdrawn Gangtai Group Co., Ltd.'s Long-Term
Foreign-Currency Issuer Default Rating at 'B-'. Fitch has also
withdrawn the senior unsecured rating of 'B-' and the rating on
its USD100 million 9.75% senior notes due 2019 of 'B-' with
Recovery Rating of 'RR4'. All ratings were on Rating Watch
Negative at the time of withdrawal.
Fitch is withdrawing the ratings as Gangtai Group has chosen to
stop participating in the rating process. Therefore, Fitch will no
longer have sufficient information to maintain the ratings.
Accordingly, Fitch will no longer provide ratings or analytical
coverage for Gangtai Group.
KEY RATING DRIVERS
Deterioration in Liquidity: On July 3, 2018, Fitch downgraded the
ratings on Gangtai Group to 'B-' from 'B'. The downgraded
reflected a sharp deterioration in the liquidity position of Gansu
Gangtai Holdings (Group) Co., Ltd., in which China-based Gangtai
Group owns 39%, due to increased working capital requirements and
a high proportion of short-term debt. In Fitch's analysis, a
default by the Shanghai-listed Gansu Gangtai Holdings (Group) Co.,
Ltd. would not necessarily result in a default at Gangtai Group,
but could significantly affect the group's access to funding.
RATING SENSITIVITIES
No longer relevant as the ratings have been withdrawn.
GOLDEN WHEEL: S&P Withdraws 'B' Issuer Credit Rating
----------------------------------------------------
S&P Global Ratings withdrew its rating on Golden Wheel Tiandi
Holdings Co. Ltd. at the company's request. The issuer credit
rating was 'B' and outlook was stable at the time of the
withdrawal.
S&P said, "Our rating had reflected our view of GW Tiandi's high
project and geographic concentration from property development and
metro mall projects in a few cities in China's southern Jiangsu
province. We assessed that the company's competitive advantage was
limited, given its very small operating scale and small market
share in these markets.
"Nonetheless, we believed GW Tiandi's recurring rental income
would continue to grow and could temper the above weakness. We
estimated that rental income would cover more than 50% of the
company's gross interest expenses over the coming 12 months. Due
to capital needs for land reserve replenishment, we expected the
company's debt-to-EBITDA ratio to deteriorate to 6x-8x in 2018-
2019, from slightly less than 5x in 2017.
"The stable outlook at the time of the withdrawal reflected our
expectation that GW Tiandi would maintain financial discipline and
display a conservative growth appetite over the next two years. We
also expected a gradual increase in stable and recurring income
from the company's investment properties."
WEST CHINA CEMENT: Fitch Affirms 'BB' LT IDR & Sr. Unsec. Rating
----------------------------------------------------------------
Fitch Ratings has affirmed West China Cement Limited's (WCC) Long-
Term Issuer Default Rating (IDR) and senior unsecured rating at
'BB-'. The Outlook on the IDR is Stable.
The affirmation reflects WCC's stable business and financial
profiles, which are underpinned by its strong position in the
domestic market and reduced capex. The Stable Outlook reflects
Fitch's expectation that WCC's leverage will remain low over 2018-
2021 as Moody's expects the cement market's fundamentals to remain
solid.
KEY RATING DRIVERS
Strong Domestic Market Position: WCC has a total cement production
capacity of 29.2 million tonnes per annum, close to 80% of which
is in Shaanxi province, where it is a dominant player in the
southern region, with close to 75% market share by capacity. The
company is among the three largest producers in central Shaanxi.
The province's economic growth remains strong with yoy GDP growth
in 2Q18 at 8.6% (2017: 8.0%).
Improving Profitability on Higher ASP: WCC's operating EBITDA
margin has been increasing since 2015. The improvement in 2016 and
2017 was driven by a higher average selling price (ASP) due to
better market fundamentals as a result of supply-side reforms and
strong demand in the region. WCC's gross profit per tonne of its
cement products surged to CNY63 in 2017 from CNY38 in 2016 as the
ASP rose 19% to CNY248/tonne in 2017. Consequently, WCC's
consolidated operating EBITDA margin widened to 35.0% in 2017 from
31.3% in 2016.
Moody's expects WCC's operating EBITDA margin to continue to
increase in 2018 to around 36.5%, driven by a higher ASP, and it
should remain at 33%-37% in the next two to three years. The
strong increase in ASP in 5M18, pushed the company's revenue up by
around 20% yoy.
Limited Capex, Lower Leverage: Fitch expects WCC's annual capex
from 2018 to 2021 to be at the lower end of the CNY400 million-600
million during 2014-2017 as the company does not plan to expand
cement capacity in the medium term. Fitch expects WCC to spend
CNY500 million and CNY400 million on capex in 2018 and 2019,
respectively, mainly for maintenance and plant upgrades to meet
the government's environmental protection regulations, as well as
to expand capacity for aggregates, which is a raw material for
concrete, to 16 million tonnes by end-2019.
In addition, WCC does not plan to make any acquisitions, and said
it intends to maintain a moderate dividend payout ratio of around
25%. As a result, Fitch expects the company to maintain net
leverage below 2x in 2018-2019 (end-2017: 1.4x).
Conch Shareholding Beneficial: Fitch expects the continued
collaboration between WCC and Anhui Conch Cement Company Limited
(Conch, A/Stable) to help WCC to further improve its operating
efficiency and strengthen its market position in Shaanxi. Conch
has helped WCC to reduce raw material prices and boost
profitability. They have collaborated on creating more stable
market supply and higher pricing discipline in Shaanxi and nearby
regions. Conch is WCC's second-largest shareholder, with a 21.11%
stake, and has two non-executive directors on WCC's eight-member
board.
DERIVATION SUMMARY
WCC is smaller than China Oriental Group Company Limited (COG, BB-
/Positive) in terms of EBITDA generation, but WCC has a strong
domestic market position. COG has stronger product offerings,
including some niche products in the steel sector, while WCC sells
commoditised cement products. Both companies have strong EBITDA
generation and have similar in leverage ratios.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
- Capex of CNY500 million in 2018 and CNY400 million in 2019
- Dividend payout of 25% in 2019 and beyond
- No M&A factored in rating case
RATING SENSITIVITIES
Future Developments That May, Individually or Collectively, Lead
to Positive Rating Action
- FFO adjusted net leverage sustained below 1.0x
- Positive free cash flow on a sustained basis
Future Developments That May, Individually or Collectively, Lead
to Negative Rating Action
- FFO net leverage above 3.5x on a sustained basis
- Failure to generate positive FCF on a sustained basis
- Significant increase in shareholder friendly activities,
such as share repurchases and dividends.
LIQUIDITY
Comfortable Liquidity: As of end-2017, WCC had total available
cash of CNY1.38 billion, unused banking facilities of CNY100
million and positive FCF of CNY1.01 billion, against short-term
debt of CNY984 million.
FULL LIST OF RATING ACTIONS
West China Cement Limited
- Long-Term Foreign-Currency IDR affirmed at 'BB-'
- Senior unsecured rating affirmed at 'BB-'
- USD400 million 6.5% senior notes due September 2019 affirmed
at 'BB-'
================
H O N G K O N G
================
CHINA SOUTH: Fitch Affirms 'B' LT IDR, Outlook Stable
-----------------------------------------------------
Fitch Ratings has affirmed the Long-Term Issuer Default Rating
(IDR) of China South City Holdings Limited (CSC) at 'B'. The
Outlook is Stable. The company's senior unsecured rating and the
rating on its outstanding US dollar senior notes have also been
affirmed at 'B' with a Recovery Rating of 'RR4'.
CSC's ratings are supported by rising residential sales from its
well-located projects in high-tier cities, a long record in
integrated trade centre development and sufficient liquidity. The
ratings are constrained by CSC's limited project diversification,
rising leverage, higher land cost than expected and a weak
industry outlook. Fitch estimates that CSC's leverage will rise in
the next three years but remain below 50%. Moody's believes CSC's
development margin will drop due to recognition of more
residential sales, which have lower margins than trade center
sales.
KEY RATING DRIVERS
Residential Sales Support Performance: CSC's contracted sales
increased 39% yoy to HKD12 billion in the financial year ended
March 2018 (FY18). Ancillary residential sales from its projects
in Hefei, Nanchang, Chongqing and Zhengzhou accounted for 84% of
sales in FY18, compared with below 35% before FY16. Fitch expects
CSC to continue to rely on residential sales in the next three
years to provide the cash flow for its continued land banking and
construction needs. Fitch believes trade centre sales will
continue to underperform given weak industry demand from small-
and medium-sized enterprises. Fitch expects CSC's contracted sales
to reach its annual target of HKD16 billion in FY19.
Higher Leverage, Land Cost: CSC's leverage, measured by net
debt/adjusted inventory (including investment property at cost)
rose to 46.3% at FYE18 from 46% at FYE17 and 44% at FYE16. The
increase was mainly due to large cash outflows for land
acquisitions in the past two years to replenish the company's
residential land bank. Fitch estimates that CSC's total land
premium was equivalent to around 50% of sales proceeds in FY18,
from 35% in FY17. At the same time, CSC's average new land cost
increased significantly to CNY2,074/sqm in FY18 from CNY450/sqm in
FY17, mainly due to fiercer competition for land than management
expected in Zhengzhou, Hefei and Chongqing.
Fitch expects leverage to remain below 50% in the next two years
if CSC slows land acquisitions and maintains satisfactory sales as
management plans. In the meanwhile, Fitch expects CSC to continue
to replenish its residential land as it may be only sufficient for
two years of residential sales, with average land cost sustained
above CNY2,000/sqm. Any unexpected increase in land premium
outflow will exert pressure on CSC's leverage level.
Development Margin to Decline: CSC's gross profit margin,
including capitalised interest, for development of trade centers
was around 50% at FYE18 and that for residential units was around
40%. Trade centres and residential units accounted for 27% and 72%
of development revenue, respectively, in FY18. Fitch estimates
that the overall development margin will drop by 1pp-2pp a year in
the next three years due to the increase in revenue recognition
from lower-margin residential units and a retreat in trade centre
sales margins.
Low Non-Development EBITDA Interest Coverage: Income from CSC's
non-development business increased by 26% yoy to HKD2 billion in
FY18, driven mainly by growth in its outlet, property management
service, and e-commerce businesses. Fitch believes CSC's
diversification will enhance the company's cash flows. However,
Fitch thinks that CSC's non-development business is still small in
terms of EBITDA generation because its non-development EBITDA
interest coverage was only 0.21x at FYE18, up from 0.15x at FYE17.
Fitch expects the ratio to remain below 0.3x in the next three
years, which will provide only limited support to the rating in
the short term.
DERIVATION SUMMARY
CSC's eight projects are in Tier 1 and 2 cities in China, which
are better located than those of the other Fitch-rated trade
centre developer - Hydoo International Holding Limited (B-
/Stable), whose 10-12 projects are mainly in Tier 3 and 4 cities.
This translates into better sales and EBITDA margins compared with
Hydoo and other competitors in the industry. CSC generated HKD12
billion in contracted sales in FY18, with an average selling price
(ASP) of CNY7,300/sqm, compared with Hydoo's CNY2.7 billion of
sales in 2017 with an ASP of CNY5,833/sqm. CSC was also able to
generate HKD2 billion non-development income in FY18. The non-
development segment is still small in terms of EBITDA generation
but may be able to support debt interest service in the future.
CSC's leverage of 46.3%, measured by net debt/adjusted inventory
(including investment property at cost) at FY18 is comparable with
that of other 'B' rated peers.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
- Property development contracted sales reach HKD16 billion in
FY19 and HKD19 billion in FY20
- Property development EBITDA margin (excluding capitalised
interest and government grants) sustained above 25% in FY19-
FY21.
- Non-development income to increase by 10% each year in FY19-
FY21, with EBITDA margin around 20%.
- Construction and land acquisition cash outflow to account for
around 70% of sales proceeds in FY19-FY21.
Recovery Rating Assumptions:
- CSC would be liquidated in a bankruptcy because it is an
asset-trading company
- 10% administrative claims
- The liquidation estimate reflects Fitch's view of the value
of inventory and other assets that can be realised and
distributed to creditors
- Fitch's applied a haircut of 100% on its available cash, 25%
on its receivables, 30% on adjusted inventory (including
investment properties at cost), and 0% on its restricted
cash.
- Based on its calculation of the adjusted liquidation value
after administrative claims, Moody'sestimates the recovery
rate of the offshore senior unsecured debt to be 100%.
However, the Recovery Rating assigned to the senior unsecured
rating is 'RR4' as China falls into Group D of creditor
friendliness. Instrument ratings of issuers with assets in
this group are subject to a soft cap at the level of the
issuer's IDR under its Country-Specific Treatment of Recovery
Ratings Criteria.
RATING SENSITIVITIES
Developments that may, individually or collectively, lead to
negative rating action include:
- EBITDA margin sustained below 20%. (FY18: 25%)
- Net debt/adjusted inventory (including investment property at
cost) sustained above 50%.
- Deterioration in liquidity or difficulty in debt refinancing.
No positive rating action is expected in the next 12-18 months
given persistent weak demand for trade and logistic centres.
LIQUIDITY
Adequate Liquidity, Higher Cost: CSC had cash and cash
equivalents, including restricted cash, of around HKD10.6 billion
and unutilised banking facilities of HKD10 billion at end-March
2018, covering short-term debt of HKD15.8 billion. Fitch has
treated the onshore bond's puttable date as the effective maturity
date and has also included all redeemed offshore debt as maturing
in the next fiscal year. CSC's successful issuance in the offshore
bond market has also alleviated its refinancing pressure although
the coupon of its recently issued senior notes due 2020 rose to
10.875%, compared with CSC's average funding cost of 6.7% in FY18.
FULL LIST OF RATING ACTIONS
China South City Holdings Limited
Long-Term Foreign-Currency Issuer Default Rating affirmed at 'B';
Outlook Stable
Foreign-currency senior unsecured rating affirmed at 'B'; Recovery
Rating of 'RR4'
USD250 million 10.875% senior unsecured bond due 2020 affirmed at
'B'; Recovery Rating of 'RR4'
USD300 million 5.75% senior unsecured bond due 2020 affirmed at
'B'; Recovery Rating of 'RR4'
USD250 million 7.25% senior unsecured bond due 2021 affirmed at
'B'; Recovery Rating of 'RR4'
USD350 million 6.75% senior unsecured bond due 2021 affirmed at
'B'; Recovery Rating of 'RR4'
USD300 million 7.25% senior unsecured bond due 2022 affirmed at
'B'; Recovery Rating of 'RR4'
NOBLE GROUP: Posts US$128.3MM Net Loss in Q2 Ended June 30
-----------------------------------------------------------
The Business Times reports that Noble Group posted a net loss of
US$128.3 million for the second quarter ended June compared with a
loss of US$1.75 billion a year ago.
Revenue fell 29 per cent to US$1.12 billion from US$1.58 billion.
In the announcement, Noble said its results were impacted by
expenses associated with the proposed financial restructuring and
finance costs on existing senior debt, the report says.
For the half year period, the Hong-Kong based trader's losses
narrowed to US$199.8 million from US$1.88 billion on the back of a
35 per cent drop in revenue to US$2.33 billion, according to BT.
No dividend was recommended for the period under review - the same
as the previous period, the report notes.
About Noble Group
Hong Kong-based Noble Group Limited (SGX:N21) --
http://www.thisisnoble.com/-- engages in supply of agricultural,
industrial and energy products. The Company supplies agricultural
and energy products, metals, minerals and ores. Agriculture
products include grains, oilseeds and sugar to palm oil, coffee,
and cocoa. Energy business includes coal, gas and liquid energy
products. In metals, minerals and ores (MMO), it supplies iron
ore, aluminum, special ores and alloys. The Company operates
nearly in 140 locations. It supplies growth demand markets in
Asia and Middle East. Alcoa World Alumina and Chemicals is the
subsidiary of this company.
As reported in the Troubled Company Reporter-Asia Pacific on
March 23, 2018, S&P Global Ratings lowered its long-term issuer
credit rating on Noble Group to 'D' from 'CC'. S&P lowered the
ratings because Noble has missed the principal and coupon payment
for its 2018 notes due March 20, 2018. Noble also missed the
coupon payment on its 2022 notes due March 9, 2018. In addition,
the company said it would not make the payments despite being
given 30-day grace periods to meet both obligations. The failure
to make these payments will trigger cross-defaults on the
company's other obligations. S&P does not expect Noble to meet
any outstanding obligations as the company preserves its assets
during the restructuring process. Noble is undergoing a debt
restructuring and S&P will conduct another review the company's
credit profile after the restructuring is complete.
NOBLE GROUP: Iceberg Calls on Investor to Join Lawsuit Campaign
----------------------------------------------------------------
The Business Times reports that the onslaught from Iceberg
Research, Noble Group's harshest and tireless critic, took another
twist with the research outfit this time calling on Noble's
present and past investors and former employees to join a legal
action against the commodity trader to challenge its scheme of
arrangement and start litigation against the parties responsible
for what it alleged was "fraud".
According to the report, Iceberg Research said "many" of Noble's
investors, be it of shares, perpetuals or bondholders who have
suffered massive losses have approached the firm on how they could
sue Noble and its managers. "These investors are naturally
exasperated," it said.
"We have talked to experienced law firms. They are ready to
represent the interests of these investors. Some securities
holders already want to join this action. We encourage other
investors to contact us," Iceberg said, adding that litigation
funders are also interested in financing the lawsuits, which would
considerably lower litigation costs, BT relays.
BT notes that shareholders of Noble are due to vote on Noble's
proposed restructuring scheme - this plan has already received the
support from several key stakeholders including major shareholders
and creditors - at a special general meeting set for Aug. 27. If
the company gets its way, it will mark the final stage of its
long-awaited debt revamp that will also result in a "New Noble,"
BT says.
About Noble Group
Hong Kong-based Noble Group Limited (SGX:N21) --
http://www.thisisnoble.com/-- engages in supply of agricultural,
industrial and energy products. The Company supplies agricultural
and energy products, metals, minerals and ores. Agriculture
products include grains, oilseeds and sugar to palm oil, coffee,
and cocoa. Energy business includes coal, gas and liquid energy
products. In metals, minerals and ores (MMO), it supplies iron
ore, aluminum, special ores and alloys. The Company operates
nearly in 140 locations. It supplies growth demand markets in
Asia and Middle East. Alcoa World Alumina and Chemicals is the
subsidiary of this company.
As reported in the Troubled Company Reporter-Asia Pacific on
March 23, 2018, S&P Global Ratings lowered its long-term issuer
credit rating on Noble Group to 'D' from 'CC'. S&P lowered the
ratings because Noble has missed the principal and coupon payment
for its 2018 notes due March 20, 2018. Noble also missed the
coupon payment on its 2022 notes due March 9, 2018. In addition,
the company said it would not make the payments despite being
given 30-day grace periods to meet both obligations. The failure
to make these payments will trigger cross-defaults on the
company's other obligations. S&P does not expect Noble to meet
any outstanding obligations as the company preserves its assets
during the restructuring process. Noble is undergoing a debt
restructuring and S&P will conduct another review the company's
credit profile after the restructuring is complete.
=========
I N D I A
=========
ABHISHEK MOTORS: CRISIL Maintains D Rating in Not Cooperating
-------------------------------------------------------------
CRISIL said the ratings on bank facilities of Abhishek Motors
Private Limited (AMPL) continues to be 'CRISIL D Issuer not
cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 7.5 CRISIL D (ISSUER NOT
COOPERATING)
Proposed Long Term 1.6 CRISIL D (ISSUER NOT
Bank Loan Facility COOPERATING)
Term Loan 5.9 CRISIL D (ISSUER NOT
COOPERATING)
CRISIL has been consistently following up with AMPL for obtaining
information through letters and emails dated February 28, 2018 and
July 31, 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 AMPL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on AMPL is
consistent with 'Scenario 1' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BB Rating
category or lower'.
Based on the last available information, the ratings on bank
facilities of AMPL continues to be 'CRISIL D Issuer not
cooperating'.
AMPL, incorporated in 1998 by Guwahati (Assam)-based Mr. Pulak
Goswami, is an authorised dealer of Tata Motor Ltd's passenger
cars in several districts of Assam. The company is also in the
transportation business.
AIRVISION INDIA: CRISIL Maintains B Rating in Non-Cooperating
-------------------------------------------------------------
CRISIL said the rating on bank facilities of Airvision India
Private Limited (AIPL) continues to be 'CRISIL B/Stable/CRISIL A4
Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Letter of Credit 7 CRISIL A4 (ISSUER NOT
COOPERATING)
Long Term Bank 1 CRISIL B/Stable (ISSUER NOT
Facility COOPERATING)
Open Cash Credit 6.5 CRISIL B/Stable (ISSUER NOT
COOPERATING)
Proposed Term Loan 5.95 CRISIL B/Stable (ISSUER NOT
COOPERATING)
CRISIL has been consistently following up with AIPL for obtaining
information through letters and emails dated February 28, 2018 and
July 31, 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 AIPL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on AIPL is
consistent with 'Scenario 1' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BB Rating
category or lower'.
Based on the last available information, the rating on bank
facilities of AIPL continues to be 'CRISIL B/Stable/CRISIL A4
Issuer not cooperating'.
AIPL, set up in 1995, manufactures TV chassis, assembles TV sets,
coolers and washing machines at its facilities in Noida (Uttar
Pradesh) and Bahadurgarh (Haryana).
ASVINI FOUNDATIONS: CRISIL Lowers Rating on INR15cr Loan to D
-------------------------------------------------------------
CRISIL has downgraded the rating on bank facility of Asvini
Foundations Private Limited (Asvini) to 'CRISIL D Issuer Not
Cooperating' from 'CRISIL B/Stable Issuer Not Cooperating' as the
company had been delaying its loan repayment.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Long Term Loan 15 CRISIL D (ISSUER NOT
COOPERATING; Downgraded from
'CRISIL B/Stable ISSUER NOT
COOPERATING')
CRISIL has been consistently following up with Asvini for
obtaining information through letters and emails dated
January 31, 2017, and February 24, 2017, among others, apart from
telephonic communication. However, the issuer has remained non
cooperative.
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed with
the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward
looking component as 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 Asvini. 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
Asvini is consistent with 'Scenario 3' outlined in the 'Framework
for Assessing Consistency of Information with CRISIL BBB rating
category or lower.' Based on the last available information,
CRISIL has downgraded the rating to 'CRISIL D Issuer Not
Cooperating' from 'CRISIL B/Stable Issuer Not Cooperating' as the
company had been delaying its loan repayment.
Set up as a private limited company in 2006, Asvini is involved in
the construction and sale of residential apartments in Tamil Nadu.
The firm is promoted by Mr. Sivagurunathan along with his friends
and family.
BARNALA STEEL: CRISIL Maintains B Rating in Not Cooperating
-----------------------------------------------------------
CRISIL said the rating on bank facilities of Barnala Steel
Industries Limited (BSIL) continues to be 'CRISIL B/Stable/CRISIL
A4 Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bill Discounting 5 CRISIL A4 (ISSUER NOT
under Letter of COOPERATING)
Cash Credit 60 CRISIL B/Stable (ISSUER NOT
COOPERATING)
Term Loan 6 CRISIL B/Stable (ISSUER NOT
COOPERATING)
CRISIL has been consistently following up with BSIL for obtaining
information through letters and emails dated February 28, 2018 and
July 31, 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 BSIL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on BSIL is
consistent with 'Scenario 1' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BB Rating
category or lower'.
Based on the last available information, the rating on bank
facilities of BSIL continues to be 'CRISIL B/Stable/CRISIL A4
Issuer not cooperating'.
BSIL, incorporated in 1994, manufactures thermo-mechanically
treated bars, mild-steel tor bars, coils, wire rods, and other
steel-rolled products. The company has a manufacturing plant in
Muzaffarnagar (Uttar Pradesh), with installed capacity of 150,000
tonnes per annum. BSIL is promoted by two brothers, Mr. Sajid Mian
Nasir and Mr. Hamid Mustafa, along with a family friend, Mr. Ameed
Ahmed Khan.
BELLA JEWELRY: CRISIL Maintains D Rating in Not Cooperating
-----------------------------------------------------------
CRISIL said the rating on bank facilities of Bella Jewelry Private
Limited (BJPL) continues to be 'CRISIL D Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Foreign Bill 7.5 CRISIL D (ISSUER NOT
Discounting COOPERATING)
Proposed Short Term 2.49 CRISIL D (ISSUER NOT
Bank Loan Facility COOPERATING)
CRISIL has been consistently following up with Bella Jewelry
Private Limited (BJPL) for obtaining information through letters
and emails dated February 28, 2018 and July 31, 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 BJPL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on BJPL is
consistent with 'Scenario 1' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BB Rating
category or lower'.
Based on the last available information, the rating on bank
facilities of BJPL continues to be 'CRISIL D Issuer not
cooperating'.
Set up in 2004 as a partnership firm between Mr. Dauji Johari, Mr.
Sharad Johari, and Ms. Prabha Johari, the firm was reconstituted
as a private limited company with the current name in 2007. The
company manufactures and exports diamondstudded gold jewellery.
Its manufacturing unit is in Santacruz Electronics Export
Processing Zone, Mumbai.
The company is part of the Johari group, which also comprises
Dauji & Co (rated 'CRISIL D'), Dow Gems, and Kuber Manufacturing
Inc.
BHUSHAN POWER: Tata Steel, Liberty House, JSW Submit Revised Bids
-----------------------------------------------------------------
Livemint.com reports that Tata Steel, Liberty House and JSW have
submitted bids for the second time to acquire Bhushan Power and
Steel Ltd, sources in the know of the matter said.
The bids were submitted to committee of creditors (CoC) on
Aug. 13 by the three parties, a source said.
On August 6, the National Company Law Appellate Tribunal (NCLAT)
had extended the deadline for submission of revised bids for BPSL
by one week on the plea of Tata Steel, a resolution applicant in
this, Livemint.com relays.
"The CoC is at present evaluating the three bids and will inform
its decision to the NCLAT on August 17," the source, as cited by
Livemint.com, said. "Liberty House has addressed certain issues
raised by the CoC," a Liberty House official said but refused to
comment on submission of bids.
Livemint says JSW is the only one who has submitted revised bid of
INR19,700 crore. While Tata Steel did not comment, an email query
sent to JSW Steel remained unanswered, Livemint notes.
Sajjan Jindal-led JSW Steel, Tata Group firm Tata Steel and UK-
based Liberty House are competing with each other to acquire BPSL
through an insolvency process.
About Bhushan Power
Bhushan Power and Steel Limited manufactures and markets steel
products. It offers flat products, such as coated products,
galvanized/galvalume, color coated products, cable tapes, and
cold rolled products; and long products, including iron making
and sponge iron products. The company also provides steel pipes,
hollow steel sections, grooved pipes, and carbon steel tubes.
Mahendra Kumar Khandelwal was appointed as the IRP in the case
under an order passed by the National Company Law Tribunal (NCLT)
on July 26, 2017.
Bhushan Power, which owes over INR37,000 crore to a consortium of
lenders led by Punjab National Bank, was among 12 large companies
identified by the Reserve Bank of India against which banks were
directed to initiate insolvency proceedings, according to
LiveMint.com. Barring Era Infra Engineering Ltd, petitions have
been admitted in all other cases, LiveMint.com notes.
BLUE MOUNTAIN: CRISIL Maintains B- Rating in Not Cooperating
------------------------------------------------------------
CRISIL said the rating on bank facility of Blue Mountain Estates
(BME) continues to be 'CRISIL B-/Stable Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Long Term Loan 16 CRISIL B-/Stable (ISSUER NOT
COOPERATING)
CRISIL has been consistently following up with BME for obtaining
information through letters and emails dated February 28, 2018 and
July 31, 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 BME, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on BME is
consistent with 'Scenario 1' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BB Rating
category or lower'.
Based on the last available information, the rating on bank
facility of BME continues to be 'CRISIL B-/Stable Issuer not
cooperating'.
BME was acquired by the current promoters in 2001 and operates a
coffee plantation in Chikmagalur district, Karnataka.
BURGUNDY LIFESTYLE: CRISIL Maintains D Rating in Non-Cooperating
----------------------------------------------------------------
CRISIL said the ratings on bank facilities of Burgundy Lifestyle
Private Limited (Burgundy) continues to be 'CRISIL D/CRISIL D
Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 5.2 CRISIL D (ISSUER NOT COOPERATING)
Letter of Credit 6.25 CRISIL D (ISSUER NOT COOPERATING)
Packing Credit 3.45 CRISIL D (ISSUER NOT COOPERATING)
CRISIL has been consistently following up with Burgundy for
obtaining information through letters and emails dated
February 28, 2018 and July 31, 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 Burgundy, which restricts
CRISIL's ability to take a forward looking view on the entity's
credit quality. CRISIL believes information available on Burgundy
is consistent with 'Scenario 1' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BB Rating
category or lower'.
Based on the last available information, the ratings on bank
facilities of Burgundy continues to be 'CRISIL D/CRISIL D Issuer
not cooperating'.
Burgundy's production facilities were initially set up by Prime
Textiles Ltd in Tiruppur (Tamil Nadu). In 2008, the entire
production facility was acquired by the Kolkata-based Jhawar
group. Burgundy manufactures high-end T-shirts and innerwear under
various brands, including Burgundy.
CMJ BREWERIES: CRISIL Maintains D Rating in Non-Cooperating
-----------------------------------------------------------
CRISIL said the rating on bank facilities of CMJ Breweries Private
Limited (CMJ) continues to be 'CRISIL D Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 54.4 CRISIL D (ISSUER NOT
COOPERATING)
Proposed Long Term 11.4 CRISIL D (ISSUER NOT
Bank Loan Facility COOPERATING)
Term Loan 164.3 CRISIL D (ISSUER NOT
COOPERATING)
CRISIL has been consistently following up with CMJ for obtaining
information through letters and emails dated February 28,2018 and
July 31,2018 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 CMJ, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on CMJ is
consistent with 'Scenario 1' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BB' rating
category or lower'.
Based on the last available information, the rating on bank
facilities of CMJ continues to be 'CRISIL D Issuer not
cooperating'.
CMJ, incorporated in November 2007, is promoted by the Meghalaya-
based Jain family, which is engaged in businesses such as
structural steel, cement, household implements, stone products,
and food processing. The company began setting up a greenfield
brewery in 2009, which commenced operations in November 2011 with
installed capacity of 100,000 HL per annum (hlpa). It expanded
capacity to 200,000 hlpa by April 2013, and to 300,000 hlpa by
December 2014. It completed its canning line in December 2014 at
New Industrial Area in Byrnihat, Meghalaya. It has also set up a
100-kilolitres-per-day grain-based distillery for extra-neutral
alcohol, a 200,000-cases-per-month bottling unit for Indian-made
foreign liquor, a 4.2-megawatt captive power plant, a 6000-litre-
per-day malt spirit manufacturing unit, and a carbon dioxide
recovery plant. The distillery commenced operations in October
2014.
CORAL COVE: CRISIL Maintains B Rating in Non-Cooperating Category
-----------------------------------------------------------------
CRISIL said the rating on bank facilities of Coral Cove Hotels and
Resorts Private Limited (CCHRPL) continues to be 'CRISIL B/Stable
Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Proposed Term Loan 2.4 CRISIL B/Stable (ISSUER NOT
COOPERATING)
Term Loan 4.1 CRISIL B/Stable (ISSUER NOT
COOPERATING)
CRISIL has been consistently following up with CCHRPL for
obtaining information through letters and emails dated
February 28, 2018 and July 31, 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 CCHRPL, which restricts
CRISIL's ability to take a forward looking view on the entity's
credit quality. CRISIL believes information available on CCHRPL is
consistent with 'Scenario 1' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BB Rating
category or lower'.
Based on the last available information, the rating on bank
facilities of CCHRPL continues to be 'CRISIL B/Stable Issuer not
cooperating'.
CCHRPL, incorporated in 2014, is engaged in the hospitality
business. The company is promoted by Andaman and Nicobar Islands-
based Mr. Ameet J Arora and Mrs. Nupur Arora, who are setting up a
3-star resort at Mini Bay, Port Blair.
DANCO ENTERPRISES: CRISIL Lowers Rating on INR3.5cr Loan to D
-------------------------------------------------------------
CRISIL has downgraded the rating on bank facilities of Danco
Enterprises India Private Limited (DEIPL) to 'CRISIL D/CRISIL D
Issuer Not Cooperating' from 'CRISIL B/Stable/CRISIL A4 Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 3 CRISIL D (ISSUER NOT
COOPERATING; Downgraded from
'CRISIL A4 ISSUER NOT
COOPERATING')
Cash Credit 3.5 CRISIL D (ISSUER NOT
COOPERATING; Downgraded from
'CRISIL B/Stable ISSUER NOT
COOPERATING')
Corporate Loan 0.72 CRISIL D (ISSUER NOT
COOPERATING; Downgraded from
'CRISIL B/Stable ISSUER NOT
COOPERATING')
Letter of Credit 1.50 CRISIL D (ISSUER NOT
COOPERATING; Downgraded from
'CRISIL A4 ISSUER NOT
COOPERATING')
CRISIL has been consistently following up with DEIPL for obtaining
information through letters and emails dated April 18, 2017, May
9, 2017 and Apr 30, 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 DEIPL. 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 the
company is consistent with 'Scenario 1' outlined in the 'Framework
for Assessing Consistency of Information' corresponding to CRISIL
B rating category or lower.
Based on banker feedback on account, CRISIL has downgraded the
rating on bank facilities of DEIPL to 'CRISIL D/CRISIL D Issuer
Not Cooperating' from 'CRISIL B/Stable/CRISIL A4 Issuer Not
Cooperating'.
DEIPL was incorporated in 2012 to takeover the business of Danco
Enterprises, which was setup in 1975. The company is engaged in
undertaking turnkey project for electrical work. The company is
based out of Mumbai and is promoted by Mr. Kuulin Danani and Mr.
Niraj Danani.
DEESAN GINNING: CRISIL Maintains C Rating in Non-Cooperating
------------------------------------------------------------
CRISIL said the rating on bank facilities of Deesan Ginning and
Pressing Private Limited (DGPPL) continues to be 'CRISIL C Issuer
not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 15 CRISIL C (ISSUER NOT COOPERATING)
Term Loan 1.8 CRISIL C (ISSUER NOT COOPERATING)
CRISIL has been consistently following up with DGPPL for obtaining
information through letters and emails dated February 28,2018 and
July 31,2018 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 DGPPL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on DGPPL is
consistent with 'Scenario 1' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BB' rating
category or lower'.
Based on the last available information, the rating on bank
facilities of DGPPL continues to be 'CRISIL C Issuer not
cooperating'.
DGPPL was incorporated in 1995 by Mr. Bhupesh Rasiklal Patel, Mr.
Chintan Amarish Patel, and Mr. Tapan Mukesh Patel. The company
processes raw cotton into lint at its manufacturing facility at
Dhule, Maharashtra.
ELITE VEHICLES: CRISIL Maintains B Rating in Non-Cooperating
------------------------------------------------------------
CRISIL said the rating on bank facilities of Elite Vehicles
Private Limited (EVPL) continues to be 'CRISIL B/Stable Issuer not
cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 9 CRISIL B/Stable (ISSUER NOT
COOPERATING)
Term Loan 2.5 CRISIL B/Stable (ISSUER NOT
COOPERATING)
CRISIL has been consistently following up with EVPL for obtaining
information through letters and emails dated February 28,2018 and
July 31,2018 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 EVPL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on EVPL is
consistent with 'Scenario 1' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BB' rating
category or lower'.
Based on the last available information, the rating on bank
facilities of EVPL continues to be 'CRISIL B/Stable Issuer not
cooperating'.
Incorporated in 2011, EVPL is an authorised dealer of passenger
vehicles and spare parts of Ford. The company, promoted and
managed by Mr. Gurjit Singh, operates a showroom-cum-workshop in
Bengaluru (Karnataka).
EXTOL INDUSTRIES: CRISIL Maintains C Rating in Not Cooperating
--------------------------------------------------------------
CRISIL said the rating on bank facility of Extol Industries
Limited (EIL) continues to be 'CRISIL C Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Working Capital 12.5 CRISIL C (ISSUER NOT
Facility COOPERATING)
CRISIL has been consistently following up with Extol Industries
Limited (EIL) for obtaining information through letters and emails
dated February 28, 2018 and July 31, 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 EIL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on EIL is
consistent with 'Scenario 1' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BB' rating
category or lower'.
Based on the last available information, the rating on bank
facility of EIL continues to be 'CRISIL C Issuer not cooperating'.
Incorporated in 1997, EIL is owned and managed by Mr. Gyanendra
Bhatnagar and his family members. EIL operates wind turbine
generator facility in Raisen (Madhya Pradesh). The facility
started operations in September 2014.
FALCON BUSINESS: CRISIL Withdraws B Rating on INR6.6cr Loan
-----------------------------------------------------------
CRISIL has withdrawn its ratings on the bank facilities of Falcon
Business Resources Private Limited (FBRPL) on the request of the
company and receipt of a no objection from its bank. The rating
action is in line with CRISIL's policy on withdrawal of its
ratings on bank loans.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Letter of credit 1.5 CRISIL A4 (ISSUER NOT
& Bank Guarantee COOPERATING; Rating Withdrawn)
Secured Overdraft 6.6 CRISIL B/Stable (ISSUER NOT
Facility COOPERATING; Rating Withdrawn)
Secured Overdraft 3.9 CRISIL B/Stable (ISSUER NOT
against term COOPERATING; Rating Withdrawn)
deposits
CRISIL has been consistently following up with FBRPL for obtaining
information through letters and emails dated May 8, 2017, June 12,
2017 and May 31, 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 FBRPL. This restricts CRISIL's
ability to take a forward FBRPL is consistent with 'Scenario 1'
outlined in the 'Framework for assessing consistency of
Information with CRISIL BB rating category or lower. Based on the
last available information, the rating on bank facilities of FBRPL
continues to be 'CRISIL B/Stable/CRISIL A4 Issuer Not
Cooperating'.
FBRPL, a Delhi-based company was incorporated in 1983 under the
name of Delhi Su-per Trade Pvt Ltd and was renamed in 2003. It
operates under the brand name of Clay Telecom and is currently
being managed by Mr. Devendra Dhawan and his son Mr. Gaurav
Dhawan. It provides international prepaid and postpaid airtime. It
offers a diverse range of rental packages for SIM cards, wireless
gadgets, cell phones and data cards.
GEORGE MAIJO: CRISIL Withdraws D Rating on INR25cr Cash Loan
------------------------------------------------------------
CRISIL has reaffirmed its rating on the bank facilities of George
Maijo Automobiles Private Limited (GMAPL) and subsequently
withdrawn the rating at the company's request and on receipt of
no-objection certificate from bankers. The rating action is in
line with CRISIL's policy on withdrawal of its rating on bank loan
facilities.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 25 CRISIL D (Rating reaffirmed
and Withdrawn)
Line of Credit 6 CRISIL D (Rating reaffirmed
and Withdrawn)
Long Term Loan 13.51 CRISIL D (Rating reaffirmed
and Withdrawn)
GMAPL was incorporated in 2016 and runs a Maruti showroom in
Kalamasserry, Kerala. The company is promoted by Mr. Maijo Joseph
and his family.
GLOBSYN KNOWLEDGE: CRISIL Lowers Rating on INR12.7cr Loan to D
--------------------------------------------------------------
CRISIL said the rating on bank facilities of Globsyn Knowledge
Foundation (GKF) continues to be 'CRISIL D Issuer not
cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 1 CRISIL D (ISSUER NOT
COOPERATING; Downgraded from
'CRISIL B/Stable ISSUER NOT
COOPERATING')
Proposed Long Term 3.55 CRISIL D (ISSUER NOT
Bank Loan Facility COOPERATING; Downgraded from
'CRISIL B/Stable ISSUER NOT
COOPERATING')
Term Loan 12.70 CRISIL D (ISSUER NOT
COOPERATING; Downgraded from
'CRISIL B/Stable ISSUER NOT
COOPERATING')
CRISIL has been consistently following up with GKF for obtaining
information through letters and emails dated February 28,2018 and
July 31,2018 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 GKF, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on GKF is
consistent with 'Scenario 1' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BB' rating
category or lower'.
Based on the last available information, the rating on bank
facilities of GKF continues to be 'CRISIL D Issuer not
cooperating'.
GKF was founded in December 2004 in Kolkata by Mr. Bikram
Dasgupta. The trust is managed by parent Globsyn Technologies Ltd
(incorporated in 1997; engaged in the software and education
industries). GKF offers Post Graduate Diploma in Management (PGDM)
and Bachelor of Business Administration (BBA) courses through its
institute, Globsyn Business School, in Bishnupur (West Bengal).
GOPISH PHARMA: CARE Moves D Rating to Not Cooperating Category
--------------------------------------------------------------
CARE Ratings has migrated the rating on bank facility of Gopish
Pharma Limited to Issuer Not Cooperating category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 9.00 CARE D; Issuer not cooperating;
Facilities Based on best available
Information
Short-term Bank 2.50 CARE D; Issuer not cooperating;
Facilities Based on best available
Information
Long-term/Short- 0.50 CARE D; Issuer not cooperating;
Term Bank Based on best available
Facilities Information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from GPL to monitor the
rating(s) vide e-mail communications/letters dated July 24, 2018,
July 16, 2018, July 12, 2018, May 10, 2018, etc. 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 Gopish Pharma Limited's
bank facilities will now be denoted as CARE D; ISSUER NOT
COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The ratings take into account the ongoing delays in debt servicing
due to stressed liquidity position.
Detailed description of the key rating drivers
At the time of last rating on July 12, 2017, the following was the
rating weakness: There have been ongoing delays by GPL in
servicing of its debt obligations. This is on account of delays in
the realization of debtors. The same led to stressed liquidity
issues which resulted into delays in debt servicing.
GPL is a closely held public limited company incorporated in 1995.
The company was originally incorporated as a private limited
company and its constitution was changed in 1996. The present
directors of the company include Mr. Ravi Prakash Goyal, Mr.
Ratish Goyal and Ms. Santosh Goyal. GPL is engaged in
manufacturing of generic drugs at its manufacturing facility
located in Solan, Himachal Pradesh. The main raw material of the
company includes chemicals and packing material which are procured
from various domestic manufacturers and traders. The group
companies of GPL include Gopish Foils and Gopish Pharma which are
engaged into the business of specialised packaging products and
manufacturing of injections respectively.
INDIAN ARMOUR: CARE Lowers Rating on INR3.0cr LT Loan to B+
-----------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Indian Armour Systems Private Limited (IASL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 3.00 CARE B+; ISSUER NOT COOPERATING;
Facilities Revised from CARE BB-; Issuer
Not Cooperating On the basis of
best Available information.
Short-term Bank 3.80 CARE A4; ISSUER NOT COOPERATING;
Facilities Reaffirmed at CARE A4; Based on
best available information.
Detailed rationale and key rating drivers
CARE has been seeking information from IASL to monitor the
rating(s) vide e-mail communications/letters dated June 27, 2018,
June 22, 2018, June 19, 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.
CARE's rating on Indian Armour Systems Private Limited bank
facilities will now be denoted as CARE B+ ISSUER NOT COOPERATING/
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).
The rating has been revised by taking into account decline in
scale of operations, cash losses, decline in profitability margins
and moderation in operating cycle. Further, the ratings take into
account small scale of operations, low profitability margins and
coverage indicators, elongated operating cycle and susceptibility
to fluctuations in raw material prices. However the risk is
mitigated by experienced management and comfortable capital
structure.
Detailed description of the key rating drivers
At the time of last ratings on April 18, 2017 the following were
the rating strengths and weaknesses (Updated for the information
available from the registrar of companies).
Key Rating Weaknesses
Small scale of operations: The scale of the operations of the
company continues to be small for last three financial years FY15-
FY17 (refers to the period April 1 to March 31) which limits the
company's financial flexibility in times of stress and deprives it
from scale benefits.
Low profitability margin and coverage indicators: The
profitability margin of the company stood low and the coverage
indicators characterized by interest coverage ratio and total debt
to GCA drastically declined.
Elongated operating cycle: Operations of the company continues to
remain working capital intensive and the operating cycle stood at
590 days in FY17 as against 321 days in FY16 (refers to period
April 1-March 31) on account of high inventory period.
Susceptibility to fluctuation in raw material prices: The main raw
materials consumed for manufacturing ballistic protection products
are aramid yarn, phenolic and UV resins, fabrics and ceramic
plates, etc., which is purchased from the international and
domestic markets. The company is exposed to raw material price
volatility due to volatility experienced in the prices of yarn and
plates. Furthermore, phenolic and UV resins are crude oil
derivatives whose prices are highly volatile leading to raw
material fluctuation risk. The prices are driven primarily by the
existing demand and supply conditions with strong linkage to the
global market. This results into risk of price fluctuations on the
inventory of raw materials.
Key Rating Strengths
Experienced management: The company is currently being managed by
Ms. Prerna Abrol who looks after the general management and
operations of the company. She has an experience of more than a
decade in the manufacturing of ballistic protection products
through the company and association with Universal Security
Instruments. Furthermore, she is supported by Mr. Praveen Arora
and Mr. Hari Singh for the management of operations. Mr. Praveen
Arora is heading the operation department and has experience of
nearly three decades in the research and development (R&D) through
his association with Escorts Limited. Mr. Hari Singh is looking
after the finance department and has experience of close to three
decade in finance.
Comfortable capital structure: The capital structure continues to
remain comfortable on the balance sheet dates of last three
financial years FY15-FY17 (refers to the period April 1-March 31).
Indian Armour Systems Private Limited (IASL) was incorporated in
June 2006 and took over the existing business of Universal
Security Instruments (a proprietorship concern established in
1998) in March 2007. The company is currently being managed by Ms
Kusum Malhotra and her daughter Ms Prerna Abrol with the support
of second tier of management. The company is engaged in the
manufacturing of ballistic protection products such as bullet
proof helmets and jackets, bomb suppression blanket, armoured
plates (bullet proofing of vehicles) and aramid fabrics (bomb
disposal suits). IASL has its manufacturing unit located in
Palwal, Haryana, and the processes of the company are ISO
9001:2008 certified. IASL procures raw materials, viz, aramid
yarn, phenolic and ultra violet (UV) resins, fabrics and ceramic
plates directly from the manufacturers across India as well as
imports from the international market as per the requirements of
orders. IASL either receives majority of the orders from
distributors and suppliers of various domestic and international
government departments or through tendering and bidding process.
JET AIRWAYS: Lenders Are Wary of Extending Additional Loans
-----------------------------------------------------------
Bloomberg News reports that Jet Airways India Ltd. s lenders are
reluctant to extend additional loans to the cash-strapped airline
ahead of a key report by the company's financial auditor,
according to people with direct knowledge of the matter.
India's biggest full-service carrier, part-owned by Etihad Airways
PJSC, had approached banks for emergency funding but the lenders
prefer that the company raises money from a share sale before they
would commit to any fresh credit, said one of the people, who
asked not to be identified as the matter is confidential,
Bloomberg relays. Lenders are waiting for auditors' endorsement of
financial accounts after the airline delayed its earnings
announcement last week, the people said.
Bloomberg relates that in a separate statement late on Aug. 13,
the airline said it's been evaluating funding options to meet
liquidity requirements "on priority" and proactively working on
multiple revenue enhancement and cost-cutting measures.
According to Bloomberg, Jet Airways is seeking to bolster its
finances after reporting a loss in the year ended March 31. Rising
jet fuel prices have eroded cash and inflated its total debt to
55.4 times earnings before interest and tax as of March. The
carrier said Aug. 9 that the audit committee didn't recommend
financial results for the board's approval, "pending closure of
certain matters."
Bloomberg meanwhile reports that the National Stock Exchange of
India on Aug. 13 sought clarification from the company on why the
results have been delayed and told Jet Airways to disclose the
fresh date for its earnings.
State Bank of India, HSBC Holdings Plc and Axis Bank Ltd. are
among lenders to the Mumbai-based carrier, which owes a total
INR94.3 billion ($1.4 billion), Bloomberg discloses. It had cash
and equivalents of INR3.2 billion at the end of March.
Jet Airways has INR31.2 billion worth of loan repayments due in
the year through March 2019, ICRA Ltd. said in May, Bloomberg
relays. The local unit of Moody's Investors Service also lowered
the airline's rating a notch to BB+ with a negative outlook, a
level that signals moderate risk of default regarding timely
servicing of obligations, citing its inability to pass on
increasing fuel costs to consumers.
Loans to Jet Airways are part of the INR246 billion in debt owed
by companies that might struggle to repay, SBI Chairman Rajnish
Kumar, told reporters on Aug. 10, Bloomberg recalls. He didn't
disclose further details citing client confidentiality agreement.
On Aug. 13, Jet Airways said there's been no delay in meeting any
of its loan obligations and no loan amount overdue, adds
Bloomberg.
Based in Mumbai, India, Jet Airways (India) Limited --
https://www.jetairways.com/EN/PH/Home.aspx -- provides passenger
and cargo air transportation services. It operates through two
segments, Air Transportation and Leasing of Aircraft. The company
also leases aircrafts. It operates flights to 64 destinations in
India and international countries, including Abu Dhabi, Amsterdam,
Bahrain, Bangkok, Colombo, Dammam, Dhaka, Doha, Dubai, Hong Kong,
Jeddah, Kathmandu, Kuwait, London Heathrow, Muscat, Paris, Riyadh,
Sharjah, Singapore, and Toronto. As of August 31, 2017, the
company had a fleet of 113 aircraft, which includes a mix of
Boeing 777-300 ERs, Airbus A330-200/300 aircraft, Next Generation
Boeing 737s, and ATR 72-500/600s. Jet Airways (India) Limited was
founded in 1992 and is based in Mumbai, India.
K.K. ROLLER: CARE Assigns B+ Rating to INR11cr LT Loan
------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of K.K.
Roller Flour Mills (KKR), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 11.00 CARE B+; Stable Assigned
Detailed Rationale & Key Rating Drivers
The rating assigned to the bank facilities of KKR is constrained
by small though growing scale of operations with low profitability
margins, weak solvency position and working capital intensive
nature of operations. The rating is further constrained by
volatility in raw material prices influenced by government
policies, firm's presence in fragmented and competitive nature of
industry and proprietorship nature of constitution. The rating,
however, takes comfort from the experienced proprietor and
positive outlook for the industry.
Going forward, the ability of KKR to increase its scale of
operations while improving its overall solvency position would
remain the key rating sensitivities.
Detailed description of the key rating drivers
Key Rating Weaknesses
Small though growing scale of operations with low net-worth base
and profitability margins: The firm's scale of operations has
remained small marked by Total Operating Income (TOI) of INR46.73
crore in FY17 and net-worth base of INR1.28 crore as on March 31,
2017. Further, KKR's GCA was relatively small at INR0.61 crore for
FY17. The small scale limits the firm's financial flexibility in
times of stress and deprives it from scale benefits. The total
operating income of the firm has increased from INR41.19 crore in
FY15 to INR46.73 crore in FY17 at compounded annual growth rate
(CAGR) of ~7% owing to increased sales volume, however, the same
continues to remain small. Furthermore, the firm has achieved
total operating income of INR52.32 crore in FY18 (Provisional).
Additionally, the profitability margins of the firm marked by
PBILDT margin and PAT margin stood low at 4.04% and 0.44%,
respectively, in FY17.
Leveraged capital structure and weak debt coverage indicators: KKR
has a leveraged capital structure marked by overall gearing ratio
of 9.72x as on March 31, 2017 on account of high dependence upon
borrowings to meet various requirements of business. Further, low
net-worth base also resulted in leveraged capital structure.
Furthermore, the debt coverage indicators also remained weak with
the total debt to GCA at 20.41x for FY17 and interest coverage
ratio at 1.48x in FY17 {PY: 20.01x and 1.47x respectively}.
Working capital intensive nature of operations: The operating
cycle of the firm stood elongated at 77 days for FY17 (PY:
71 days). The firm is required to maintain adequate inventory of
raw material and finished goods in order to ensure smooth
production process and to meet demand of customers. Further, the
firm offers a credit period of around 2 months to its customers
owing to the highly fragmented and competitive nature of industry,
however, receives a credit period of upto 10 days only from its
suppliers. As per the banker, the average utilization of the
working capital limit remained ~90% for the last 12 months period
ended May 2018.
Volatility in raw material prices influenced by government
policies: The main raw material for production of white flour,
wheat flour, semolina, bran etc. is wheat. Prices of wheat are
subject to government intervention since it is an agricultural
produce and staple food. Various regulations including minimum
support price, control on exports, wheat procurement policies for
maintenance of buffer stocks etc. are imposed to regulate the
price of wheat in the market.
Fragmented and competitive nature of industry: The commodity
nature of the product makes the industry highly fragmented with
numerous players operating in the unorganized sector with very
less product differentiation. In addition, launch of innovative
strategy (such as competitive pricing, aggressive advertisement
campaign, celebrity endorsements, etc.) by large multinationals to
gain market share has increased the competition intensity as well.
This results in limited flexibility over product pricing for the
players in the industry.
Constitution of the entity being a proprietorship firm: KKR's
constitution as a proprietorship firm has the inherent risk of
possibility of withdrawal of the proprietor's capital at the time
of personal contingency and firm being dissolved upon the
death/retirement/insolvency of proprietor.
Key rating strengths
Experienced proprietor in the manufacturing industry: KKR is being
managed by Mrs. Rita Gupta who has reasonable work experience of
around six years in the agro processing industry gained through
her association with KKR Prior to this, the proprietor has around
two decades of experience in steel industry through two group
concerns namely Jammu Casting Private Limited (JCP) and Samrat
Ferro Alloys Private Limited (SFA).
Positive outlook of the industry: The flour milling industry has
witnessed consistent growth in the past few years, largely driven
by FMCG companies and dictated by the lifestyle changes in the
urban and semi-urban regions of the country, people are being
exposed to the wheat-based western cuisines, in place of rice-
based local cuisines. This is expected to act as a steady and
sustained growth driver for the wheat flour milling industry. Also
since the industry mainly caters to the basic needs of the
consumer, the industry is relatively insulated from the economic
cycles.
K.K. Roller Flour Mills (KKR), an ISO 9001:2005 certified firm,
was established in July, 2012 as a proprietorship firm and is
currently being managed by Mrs. Rita Gupta. The firm is engaged in
processing of wheat at its manufacturing facility located in
Jammu, Jammu & Kashmir with an installed capacity of processing
48,000 metric tonnes of wheat per annum as on March 31, 2018.
KRISHI NUTRITION: Ind-Ra Maintains BB+ Rating in Non-Cooperating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained Krishi
Nutrition Company Private Limited's Long-Term Issuer Rating in the
non-cooperating category. The issuer did not participate in the
rating exercise despite continuous requests and follow-ups by the
agency. Therefore, investors and other users are advised to take
appropriate caution while using the rating. The rating will
continue to appear as 'IND BB+ (ISSUER NOT COOPERATING)' on the
agency's website.
The instrument-wise rating actions are:
-- INR129.36 mil. Term loans maintained in Non-Cooperating
Category with IND BB+ (ISSUER NOT COOPERATING) rating;
-- INR65 mil. Fund-based working capital limit maintained in
Non-Cooperating Category with IND BB+ (ISSUER NOT
COOPERATING) rating; and
-- INR17 mil. Non-fund-based working capital limit maintained in
Non-Cooperating Category with IND A4+ (ISSUER NOT
COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
July 28, 2016. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Incorporated in 2013, Krishi Nutrition manufactures animal feed
through an outsourcing arrangement.
MANGE RAM: CARE Assigns B+ Rating to INR15cr LT Loan
----------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of Mange
Ram Enterprises Private Limited (MREPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 15.00 CARE B+; Stable Assigned
Detailed Rationale & Key Rating Drivers
The rating assigned to the bank facilities of MREPL is primarily
constrained by its modest scale of operations, low PAT margin,
leveraged capital structure and weak debt coverage indicators.
Further, the rating is also constrained by working capital
intensive nature of operations, fortunes of the company linked
with growth plans of the manufacturer and competitive nature of
the auto industry. The rating, however, draws comfort from
experienced promoters coupled with long track record of operations
in the automobile industry and association with reputed brand
name.
Going forward; ability of MREPL to profitably increase its scale
of operations while improvement in its capital structure
shall be the key rating sensitivities. Further, efficient
management of its working capital requirements shall be another
key rating sensitivity.
Detailed description of the key rating drivers
Key Rating Weaknesses
Modest scale of operations: MREPL's scale of operations stood
modest as evident from total operating income (TOI) and gross cash
accruals of INR57.61 crore and INR1.00 crore respectively for FY18
(refers to the period April 1 to March 31; based on provisional
results). Further, the TOI has been declining for past three years
(FY16-FY18) from INR66.64 crore in FY16 to INR57.61 crore in FY18
owing to lower vehicles sold. Moreover, the net worth base also
stood small at INR5.46 crore as on March 31, 2018. The modest
scale of operations limits the company's financial flexibility in
times of stress and deprives it of scale benefits.
Low PAT margin, leveraged capital structure and weak debt coverage
indicators: An automotive dealer's revenues are primarily driven
by volumes, while the profits are driven by the sale of spares and
service income, as the latter fetches higher profit margins. The
company has limited negotiating power with manufacturers and has
no control over the selling price as the same is fixed by the
manufacturers. Further, high interest expense restricts the net
profitability of the company. PAT margin stood below 0.60% for the
past three financial years (FY16-FY18). The capital structure of
the company marked by overall gearing stood leveraged at ~4.75x as
on past three balance sheet dates ending March 31, '16-'18, owing
to high reliance of external borrowings to meet working capital
requirement coupled with low net worth base. Moreover, the debt
coverage indicators of the company as marked by interest coverage
ratio and total debt to GCA stood weak at around ~1.45x and ~26x
respectively for past three financial years i.e. (FY16- FY18)
owing to high debt levels.
Working capital intensive nature of operations: MREPL has
elongated operating cycle marked by operating cycle of 133 days in
FY18 mainly on account of high inventory days. The company needs
to stock different models of vehicles and spares in the showrooms
in orders to ensure ample availability and visibility, which leads
to inventory holding days of around 4 months. Though, the sales to
customers are made on "Cash and Carry" basis however, around 70%-
80% of the vehicles are bought on vehicle financing basis through
banks and NBFCs, thereby resulting in average collection period of
around 26 days in FY18. The company procures passenger cars from
Hyundai Motor India Limited (HMIL) by making full advance payment
and for spare parts it gets a credit period of around a month. The
average working capital borrowings of the company remained almost
fully utilized for the past 12 months period ending June, 2018.
Fortunes of the company linked with growth plans of the
manufacturer: The company procures its product directly from
its principal; Hyundai Motor India Limited (HMIL). Thus, the
fortunes of the company are directly linked to its supplier
which exposes the company's revenue growth and profitability to
its supplier's future growth prospects. Any impact on business and
financial profile of the manufacturer will also have an impact on
the growth prospects of the company.
Competitive nature of the auto industry: MREPL is exposed to
competition from the products of other OEM's and dealers operating
in the same region. Accordingly, MREPL has to resort to offering
better buying terms like allowing discounts to capture the market
share which, in turn, creates margin pressure and negatively
impact the earning capacity of the company. Furthermore, the auto
industry is inherently vulnerable to the economic cycles and is
highly sensitive to the interest rates and fuel prices. The
company thus faces significant risks associated with such cyclical
nature of the auto industry.
Key Rating Strengths
Experienced promoters coupled with long track record of operations
in the automobile industry: Mr. Pushpendra Rawat and Mrs. Renuka
Rawat are the directors of the company and they collectively look
after the overall operations of the company. Mr. Pushpendra Rawat
has accumulated experience of around a decade in dealership
business through his association with this entity.
Association with reputed brand name: MREPL is an authorized dealer
of Hyundai Motor India Limited (HMIL) which is one of the largest
automobile manufacturers in passenger cars. In the domestic
passenger car market, HMIL has established market position
underpinned by the strong position of its healthy presence in the
Hatch back, Sedan, SUV and MUV segment in domestic market.
Delhi based Mange Ram Enterprises Private Limited (MREPL) (CIN No.
U51909DL2007PTC167336) was incorporated in August, 2007 and
started its commercial operations from August, 2008. The company
is currently managed by Mr. Pushpendra Rawat & Mrs. Renuka Rawat.
MREPL is an authorized distributor of Hyundai Motor India Limited
(HMIL) vehicles. The company operates through its 3S (Sales,
Spares and Services) facility and is engaged in the sale of
passenger cars, servicing of vehicles and sale of its spare parts.
The company has three showrooms located in Ghaziabad, Vaishali &
Baraut. The company has two associate concerns namely; "M.R.
Preview" and "M.R. Homes" engaged in real estate business.
MOONAK ISPAT: CRISIL Maintains B Rating in Not Cooperating
----------------------------------------------------------
CRISIL said the rating on bank facilities of Moonak Ispat Udyog
(MIU) continues to be 'CRISIL B/Stable Issuer not cooperating'
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 5 CRISIL B/Stable (ISSUER NOT
COOPERATING)
Proposed Long Term 1 CRISIL B/Stable (ISSUER NOT
Bank Loan Facility COOPERATING)
CRISIL has been consistently following up with MIU for obtaining
information through letters and emails dated February 28, 2018 and
July 31, 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 MIU, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on MIU is
consistent with 'Scenario 1' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BB Rating
category or lower'.
Based on the last available information, the rating on bank
facilities of MIU continues to be 'CRISIL B/Stable Issuer not
cooperating'
For arriving at its ratings, CRISIL has combined the business and
financial risk profiles of MIU, Pratul Enterprises Pvt Ltd (PEPL)
and Vardhman Ispat Udyog (VIU), together referred to as the Pratul
group. This is because all these entities are under a common
management, and in the same line of business with moderate
business inter-linkages and fungible finances.
MIU, established in 2009, is a proprietorship firm promoted by Mr.
Pradeep Garg. PEPL, incorporated in 2012, is promoted by Mr
Pradeep Garg and Mr Subodh Kumar. VIU, established in 2005, is a
partnership firm promoted by Mr. Pradeep Garg and Mr Subodh Kumar.
All these entities trade in thermo mechanically treated (TMT) bars
and structural steel products, and are authorised distributors of
KIL's steel products in Punjab.
NARMADA CEREAL: CRISIL Lowers Rating on INR52cr Loan to D
---------------------------------------------------------
CRISIL has downgraded its ratings on bank facilities of Narmada
Cereal Private Limited (NCPL) to 'CRISIL D/CRISIL D' from 'CRISIL
B+/Stable/CRISIL A4'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 52 CRISIL D (Downgraded from
'CRISIL B+/Stable')
Pre Shipment Credit 3.8 CRISIL D (Downgraded from
'CRISIL A4')
Rupee Term Loan 4.2 CRISIL D (Downgraded from
'CRISIL B+/Stable')
The rating reflects continuous delays in payment of installments
for the last two months, due to the company's weakened liquidity
because of high working capital requirements of the company and
low profitability resulting in lower cash accruals.
The ratings continue to reflect NCPL's weak financial risk
profile, marked by a high gearing, and average debt protection
metrics. The ratings also factor in the company's susceptibility
to regulatory changes, volatility in raw material prices, and
changes in rainfall pattern. These rating weaknesses are partially
offset by the experience of NCPL's promoters in the rice industry,
the company's established relationships with customers and
suppliers, and its moderate brand image.
Key Rating Drivers & Detailed Description
Weakness
* Stretched liquidity leading to delay in repayments: The company
has been delaying its repayments since the past two months.
* Weak financial risk profile: NCPL has an average financial risk
profile, with networth of INR23 crore and high gearing of above 4
times as on March 31, 2018. The company has weak debt protection
metrics, reflected in interest coverage and net cash accrual to
total debt ratios of 1.6 times and 0.05 time, respectively, in
fiscal 2018.
* Vulnerability to regulatory changes, volatility in raw material
prices, and fluctuations in rainfall patterns: Though NCPL
procures paddy throughout the year, it procures the raw material
in bulk during the crop season (October to December) for its
requirement in the subsequent year. Large inventory exposes NCPL
to the risk of sharp decline in paddy prices after procurement.
Basmati rice is grown only in four states in India. Furthermore,
as a kharif crop, basmati is harvested between September and
December. The water requirement for basmati is high. Therefore,
despite robust irrigation systems, these states also depend on the
monsoon for water supply. NCPL is susceptible to the risk of
limited availability of raw material in case of a weak monsoon.
* Large working capital requirement: Operations are working
capital intensive because of sizeable gross current assets of more
than 200 days and inventory of minimum 230 days over the three
years through fiscal 2018.
Strengths
* Improving brand image, promoters' experience in various
industry, and established relationships with customers and
suppliers: NCPL was established by Mr Arun Mittal. The promoters
have been able to achieve compound annual growth rate of about 15%
in sales over the five years ended March 31, 2018. Strong growth
is a reflection of the promoters established relations with
customers and suppliers.
NCPL was established in February 2007 by Mr Arun Mittal and Mr
Surendra Gupta. The company commenced commercial production on
April 1, 2008. NCPL mills Pusa 1121 basmati rice, mainly sold in
bulk; a part of the produce is also sold domestically under the
in-house brand, Narmada Rice.
NATA DEVICES: CARE Lowers Rating on INR5.0cr LT Loan to B
---------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Nata Devices India Private Limited, as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 5.00 CARE B; Issuer Not Cooperating
Facilities Revised from CARE B+;
Issuer Not cooperating on the
basis of best available
information.
Short-term Bank 0.65 CARE A4 Issuer Not Cooperating
Facilities Reaffirmed at CARE A4; Issuer
Not cooperating Based on best
available information.
Detailed rationale and key rating drivers
CARE has been seeking information from Nata Devices India Private
Limited to monitor the rating(s) vide e-mail communications/
letters dated June 27, 2018, June 22, 2018, June 19, 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. CARE's rating on Nata
Devices India Private Limited 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(s).
The rating has been revised by taking into account moderation in
profitability margins and no due-diligence conducted
due to non-cooperation by Nata Devices India Private Limited.
Further, the ratings take into account small scale of
operations, low profitability margins, leveraged capital
structure, weak coverage indicators and working capital intensive
nature of operations. However the risk is mitigated by experienced
management.
Detailed description of the key rating drivers
At the time of last ratings on April 18, 2017, the following were
the rating strengths and weaknesses (Updated for the
information available from the registrar of companies).
Key Rating Weakness
Small scale of operations: Despite being operational for more than
two decades the scale of operations of the company continues to be
small for the last three financial years FY15-FY17 (refers to the
period April 1 to March 31). The small scale limits the company's
financial flexibility in times of stress and deprives it from
scale benefits.
Low profitability margins, leveraged capital structure and weak
coverage indicators: The PBILDT margins continue to remain low for
last three financial years FY15-FY17 (refers to the period April 1
to March 31). The capital structure of the company continues to
remain leveraged as on the balance sheet date of the last three
financial years FY15-FY17 (refers to the period
April 1 to March 31) on account of high dependence on external
debt coupled with low net worth base. Furthermore, the coverage
indicators continue to remain weak on account of high debt levels
and lower profitability margins.
Working capital intensive nature of operations: The operations of
the company continue to be working capital intensive on account of
high collection period and high inventory holding days. High
inventory holding is due to large product portfolio maintained to
cater to the immediate demand of the customers. Furthermore, the
company extends a liberal credit period to its customers due to
the highly competitive nature of the industry.
Key Rating Strengths
Experienced Management: The promoters of the company have an
experience of around two decades in the trading of batteries
through their association with NDPL. They collectively look after
the overall management of the company.
NATA Devices India Private Limited (NDIL) was incorporated in 1991
by Mr Rajesh Nakra, and is engaged in the trading of batteries and
solar lighting systems, viz, uninterruptible power supply (UPS),
sealed maintenance free (SMF) batteries, solar batteries, solar
lighting systems and battery chargers. The company is an
authorized dealer of Exide batteries and sells its products
through a marketing network of agents and distributors in National
Capital Region (NCR) and Punjab. NDIL has sales offices in Delhi
and Mohali (Chandigarh). The company is ISO 9001:2008 certified
for its quality management.
O.M.S. TAMARIND: CRISIL Maintains B Rating in Not Cooperating
-------------------------------------------------------------
CRISIL said the ratings on bank facilities of O. M. S. Tamarind
Merchants Private Limited (OMS) continues to be 'CRISIL
B/Stable/CRISIL A4 Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Overdraft 6.5 CRISIL A4 (ISSUER NOT
COOPERATING)
Proposed Long Term 1.5 CRISIL B/Stable (ISSUER NOT
Bank Loan Facility COOPERATING)
CRISIL has been consistently following up with OMS for obtaining
information through letters and emails dated February 28, 2018 and
July 31, 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 OMS, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on OMS is
consistent with 'Scenario 1' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BB Rating
category or lower'.
Based on the last available information, the ratings on bank
facilities of OMS continues to be 'CRISIL B/Stable/CRISIL A4
Issuer not cooperating'.
Set up in 1950, and based in Chennai, OMS trades in tamarind,
pulses, edible oil, sugar, and chilly. Mr. C Raja Sankaralingam
manages the company's daily operations.
PAC BIO: CRISIL Raises Rating on INR5cr Cash Loan to B+
-------------------------------------------------------
CRISIL has upgraded its rating on the long-term bank facilities of
Pac Bio Fungbact Private Limited (PBFPL) to 'CRISIL B+/Stable'
from 'CRISIL D'. Upgrade in the rating is factored by full
repayment of the term loan and timely repayment of interest
towards existing bank facilities for more than 6 months.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 5 CRISIL B+/Stable (Upgraded
from 'CRISIL D')
Proposed Long Term 4.33 CRISIL B+/Stable (Upgraded
Bank Loan Facility from 'CRISIL D')
The rating reflects large working capital requirement, modest
scale of operations and dependency on monsoon season. These
weaknesses are partially offset by a well-spread network and
experience of the promoter in the field of agriculture products.
Analytical Approach
Unsecure loans (outstanding at INR2.63 crore as on March 31, 2018)
extended by the promoter have been treated as debt. This is
because there has been withdrawal and regular interest payment
towards these loans.
Key Rating Drivers & Detailed Description
Weakness
* Modest scale of operations: Modest scale as reflected in revenue
of INR15.36 crore in fiscal 2018. These revenues are highly
dependent on monsoon season as the end user towards thThis limits
the company's ability to negotiate with customers and suppliers.
* Working capital intensive operation: Operations should remain
working capital intensive over the medium term on account of high
inventory days at level of 190 days as on March 2018 resulting
high GCA of around 250 days.
Strengths
* Extensive industry experience of its promoter: Benefits from the
extensive experience of the promoter for over a decade has helped
the company foster strong relationships with customers and
suppliers and is expected to generate a healthy revenue, thereby
further strengthening its market position.
Outlook: Stable
CRISIL believes PBFPL will continue to benefit from the extensive
industry experience of its promoter. The outlook may be revised to
'Positive' if there is higher-than-expected growth in revenue,
while profitability is sustained and working capital cycle is
improved. The outlook may be revised to 'Negative' if the
financial risk profile weakens, most likely due to low cash
accrual, increase in working capital requirement, and decrease in
networth.
Gujarat based PBFPL was incorporated in fiscal 2010. It
manufactures and sells bio-fertilisers. PBFPL started its
commercial operation in fiscal 2013 and is promoted by Mr Babubhai
Patel. The company has also started manufacturing of enzymes used
in detergents.
PARASHAR COKE: CARE Lowers Rating on INR74cr LT Loan to D
---------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Parashar Coke Private Limited (PCPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank
Facilities 74.00 CARE D Revised from CARE BB;
Stable
Detailed Rationale & Key Rating Drivers
The revision in the rating assigned to the bank facilities of PCPL
takes into account ongoing delays in debt servicing.
Detailed description of the key rating drivers
Key Rating Weaknesses
Delays in Debt servicing: There are ongoing delays in debt
servicing, on account of non-commencement of the plant operations
from January-2018 onwards as envisaged earlier.
Parashar Coke Private Limited was incorporated in 2006 by Mr.
Mithilesh Pandey, Mr. Sanjay Kumar Shah and Mr. Shiv Nandan Prasad
Singh. PCPL has set up a Low Ash Metallurgical Coke (LAMC)
facility in Saraikela, Jharkhand, having an installed capacity of
224,065 MTPA for coke and 4,573 MTPA for coke fines at a cost of
INR115.47 crore. The project is funded at a debt-equity ratio of
1.78:1.
RAJ ELECTRICALS: CARE Lowers Rating on INR2.25cr Loan to B+
-----------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Raj Electricals (Raj), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 2.25 CARE B+; Stable Revised from
CARE BB-;Stable
Long-term Bank
Facilities/Short-
term Bank
Facilities 6.50 CARE B+; Stable/CARE A4
Revised from CARE BB-;
Stable/CARE A4
Detailed Rationale & Key rating Drivers
The revision in the ratings take into account significant decline
in Total Operating Income (TOI) in last two financial years ended
FY18 (FY refers to the period from April 1 to March31) and
deterioration in solvency position of the firm. The ratings,
however, continue to remain constrained on account of its moderate
profitability margins and stressed liquidity position. The ratings
are, further, continued to remain constrained on account of
vulnerability of margins to volatile raw material prices and its
constitution as a proprietorship concern. The ratings, however,
continue to remain favorable on account of experienced proprietor
with long track record of operations and moderate order book
position.
The ability of the firm to increase its scale of operations by
securing more contracts along with speedy execution of same and
better management of working capital would be the key rating
sensitivities.
Detailed description of the key rating drivers
Key Rating Weaknesses
Significant decline in Total Operating Income (TOI) in FY17 &
FY18: During FY17, TOI declined by 55.44% over FY16 and further
dipped by 25.74% in FY18 and stood thin at INR5.93 crore. Further
till June 30, 2018, the firm registered a TOI of INR2.00 crore.
Moderate profitability margins: The profitability margins remained
moderate with PBILDT and PAT margin of 8.48% and 3.44%
respectively in FY18 as against 7.46% and 3.06% respectively in
FY17.
Weak solvency position: The capital structure of the firm stood
leveraged with an overall gearing of 2.39 times as on March 31,
2018, deteriorated from 1.17 times as on March 31, 2017 mainly on
account of higher utilization of its working capital bank
borrowings along with infusion of unsecured loans during the year.
Further, the debt coverage stood weak with total debt to GCA of
15.34 times as on March 31, 2018 and interest coverage remained
moderate at 1.79 times in FY18.
Stressed liquidity position: Due to delayed payment from
government, it made delayed payment to its suppliers and hence,
operating cycle of the firm stood at 85 days in FY18 owing to
significant increase in debtors which is offset to an extent by
increase in creditors during FY18. It has fully utilized its
working capital bank borrowings in last twelve month ended June
2018.
Constitution as a proprietorship concern with vulnerability of
margins to volatile raw material prices: Constitution as a
proprietorship concern with moderate net worth base restricts its
overall financial flexibility in terms of limited access to
external fund for any future expansion plans. Furthermore, there
is an inherent risk of possibility of withdrawal of capital and
dissolution of the firm in case of death/insolvency of proprietor
Further, the profitability of the company is exposed to volatile
raw material prices as in all the contracts; the firm does
not have any price escalation clause.
Key Rating Strengths
Experienced proprietor with long track record of operations:
Mr. Anurag Sharma has diploma in mechanical engineering and looks
after the overall affairs of the firm. He has more than a decade
of experience in the electric and civil construction industry. He
is supported by a team of experts for execution of contracts and
other work. Being present in the industry since a long period of
time, he has established relationship with its customers and
suppliers of raw materials as well as equipment suppliers as Raj
mainly take equipments on hire/rent for erection.
Moderate Order book position: As on July 31, 2018, Raj has an
outstanding order book position of about INR40.89 crore with 9
projects in hand reflecting moderate order book position. The most
of the orders are to be executed in next 9-12 month, thereby
translating into moderate revenue visibility in the medium-term.
Further, there is a price escalation clause in its biggest order
of Rs 41.21 crore from AVVNL, Ajmer to be executed in next two
years mitigating the risk arising out of adverse movement in the
raw material prices. However, the clause is not available in all
other contracts.
Jaipur-based (Rajasthan) Raj Electricals (Raj) was formed in 2011
by Mr. Anurag Sharma as a proprietorship concern. Raj is
registered as an 'A' class (second highest in the scale of AA to
E) contractor with Rajasthan State Electricity Boards. It executes
electrical contracts for Jaipur Vidyut Vitran Nigam Limited
(JVVNL), Jodhpur Vidyut Vitran Nigam Limited (JdVVNL), Ajmer
Vidyut Vitran Nigam Limited (AVVNL) and contract work includes
erection of power line with material and without material. It also
undertakes the turnkey projects given by the power department
where work includes survey, erection of power lines, supply of
material (transformer, power pole, power lines).
RAM KUMAR: CRISIL Maintains B- Rating in Not Cooperating Category
-----------------------------------------------------------------
CRISIL said the ratings on bank facilities of Ram Kumar Ramesh
Kumar (RKRK) continues to be 'CRISIL B-/Stable/CRISIL A4 Issuer
not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 6 CRISIL B-/Stable (ISSUER NOT
COOPERATING)
Overdraft 2 CRISIL A4 (ISSUER NOT
COOPERATING)
CRISIL has been consistently following up with RKRK for obtaining
information through letters and emails dated February 28, 2018 and
July 31, 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 RKRK, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on RKRK is
consistent with 'Scenario 1' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BB Rating
category or lower'.
Based on the last available information, the ratings on bank
facilities of RKRK continues to be 'CRISIL B-/Stable/CRISIL A4
Issuer not cooperating'.
Ram Kumar Ramesh Kumar (RKRK), based in Hisar (Haryana), is a
proprietorship firm established in 1981 by Mr. Mukesh Kumar Goyal.
The firm trades in agricultural products such as grains, pulses,
and cotton, which it sells to local customers.
RAMA POWER: Ind-Ra Migrates BB+ Issuer Rating to Non-Cooperating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Rama Power and
Steel Private Limited's Long-Term Issuer Rating to the non-
cooperating category. The issuer did not participate in the rating
exercise despite continuous requests and follow-ups by the agency.
Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will now
appear as 'IND BB+ (ISSUER NOT COOPERATING)' on the agency's
website.
The instrument-wise rating action is:
-- INR200 mil. Fund-based working capital limit migrated to non-
cooperating category with IND BB+ (ISSUER NOT COOPERATING)
rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
July 12, 2017. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Incorporated in 2008 in Raipur, Chhattisgarh by Mr. Sanjay Goyal
and Mr. Naresh Goyal, Rama Power and Steel manufactures thermo-
mechanically treated bars.
RANASARIA POLY: Ind-Ra Corrects July 24 Rating Release
------------------------------------------------------
India Ratings and Research (Ind-Ra) corrects a ratings release on
Ranasaria Poly Pack Private Limited published on July 24, 2018
that incorrectly stated contingent liabilities as claims against
the group company Shri Geeta Sacks Private Limited.
The amended press release is as follows:
India Ratings and Research (Ind-Ra) has affirmed Ranasaria Poly
Pack Private Limited's (RPPL) Long-Term Issuer Rating at 'ND BB+'.
The Outlook is Stable.
The instrument-wise rating actions are:
-- INR200 mil. Fund-based facilities* affirmed with
IND BB+/Stable/IND A4+ rating; and
-- INR50 mil. Non-fund-based facilities* affirmed with IND A4+
rating.
* There is 100% interchangeability between fund-based and non-
fund-based working capital.
KEY RATING DRIVERS
The affirmation reflects RPPL's continued medium scale of
operations, as indicated by revenue of INR1,407.52 million in FY18
(FY17: INR1,243.38 million). The growth in revenue was driven by
continues orders from existing customers.
The ratings continue to factor in the company's average operating
profitability with EBITDA margins of 5.4% in FY18 (FY17: 4.0%),
owing to its presence in a highly fragmented and intensely
competitive business. Return on capital employed improved to 13%
in FY18 (FY17: 7.3%). The margins improved in FY18 because of
lower cost of raw materials. Ind-Ra expects the margins to be in
the same range as FY18 over the medium term.
The ratings are constrained by RPPL's moderate credit metrics.
Interest coverage (operating EBITDA/gross interest expense)
improved to 3.86x in FY18 (FY17: 1.98x) owing to lower outstanding
debt and financial expenses, driven by a low working limit capital
utilization and an improvement in absolute EBITDA. Net leverage
(adjusted net debt/operating EBITDAR) also reduced to 4.10x in
FY18 (FY17: 7.53x); however, the ratio remained high on account of
contingent liabilities of INR100.0 million arising as corporate
guarantee against the group company Shri Geeta Sacks Private
Limited.
The ratings also factor in RPPL's comfortable liquidity position
as indicated by about 62% peak combined average utilization of the
fund-based and non-fund-based limits during the 12 months ended
June 2018.
However, the ratings continue to be supported by the company's
promoter's experience of more than three decades in manufacturing
polypropylene sacks and woven.
RATING SENSITIVITIES
Positive: Substantial growth in revenue and/or EBITDA margin
leading to an improvement in the credit metrics, all on a
sustained basis, could lead to a positive rating action.
Negative: A decline in the revenue and/or EBITDA margin leading to
deterioration in the credit metrics, all on a sustained basis,
could lead to a negative rating action.
COMPANY PROFILE
Incorporated in July 2002, RPPPL manufactures high density
polyethylene/polypropylene sacks, woven fabric, and liner
packaging bags for fertilizers, chemical sugar, rice, spices, food
grains, cement and salt, at its 600 metric tons/month unit in
Gandhinagar, Gujarat.
S N TRADELINK: Ind-Ra Lowers Long Term Issuer Rating to 'BB+'
-------------------------------------------------------------
India Ratings and Research (Ind-Ra) has downgraded S N Tradelink
Private Limited's (SNT) Long-Term Issuer Rating to 'IND BB+' from
'IND BBB-'. The Outlook is Stable.
The instrument-wise rating actions are:
-- INR155 mil. Fund-based working capital facilities downgraded
with IND BB+/Stable rating; and
-- INR430 mil. Non-fund-based working capital facilities
downgraded with IND A4+ rating.
KEY RATING DRIVERS
The downgrade reflects sharp deterioration in SNT's net leverage
(net debt/operating EBITDA) to 7.0x in FY18 (FY17: 4.8x), on
account of an increase in its short-term borrowings, availed to
fund its working capital requirements. Also, the interest coverage
(operating EBITDA/gross interest expenses) remained weak but
stable at 2.6x in FY18 (FY17: 2.6x), as more limits were borrowed
in foreign currency which had a lower interest cost, leading to no
impact on financial expenses irrespective of the increase in the
total borrowings. Moreover, the return on capital employed
deteriorated to 10.1% in FY18 (FY17: 13.4%) and the operating
EBITDA margins were modest at 3.0% (3.8%). The operating margins
declined due to an increase in the raw material expenses. FY18
financial are provisional.
The ratings continue to factor in SNT's exposure to forex risk, as
the company avails letters of credit in foreign currency and high
competition from the other coal traders in the region.
The ratings are supported by SNT's comfortable liquidity position
with its use of the working capital limits being 90% on average
for the 12 months ended June 2018.
The ratings are further supported by SNT's moderate scale of
operations and low customer concentration risk. During FY18, its
revenue improved to INR4,302 million (FY17: INR3,756 million) due
to an increase in the demand of coal. The top 10 customers
contributed around 14.5% to the FY18 revenue.
RATING SENSITIVITIES
Negative: Deterioration in the overall credit metrics on a
sustained basis will be negative for the ratings.
Positive: An improvement in the profitability leading to an
improvement in the overall credit metrics on a sustained basis
will be positive for the ratings.
COMPANY PROFILE
Established in 2006, SNT is promoted by Mr. Sajjan Kumar Agarwal
and Mr. Navin Suratwala. The company is a major supplier of
imported coal across South Gujarat and Maharashtra.
SHIVSAHAJ ENGINEERING: CARE Assigns B+ Rating to INR10.43cr Loan
----------------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of
Shivsahaj Engineering & Plastics Private Limited (SEP), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank
Facilities 10.43 CARE B+; Stable Assigned
Detailed Rationale & Key Rating Drivers
The ratings assigned to the bank facilities of SEP are constrained
on account of nascent stage of operation along with stabilization
risk associated with recently completed project. Ratings are
further constrained on account of presence in the highly
competitive and fragmented plastic industry along with
Susceptibility of operating margins to volatility in raw material
costs. The ratings, however, derive strength from experienced
promoters. SEP's Ability to stabilize recently commissioned
manufacturing operations along with increase in the scale of its
operations and achieving envisaged level of sales and
profitability are the key rating sensitivity.
Detailed description of the key rating drivers
Key Rating Weaknesses
Nascent stage of operation along with stabilization risk
associated with recently completed project: SEP completed its
project having total cost (includes cost of acquiring existing
unit of Atmiya Engineering & Plastics and purchase and
installation cost of few new machineries) of INR9.98 crore, funded
through debt/equity mix of 2.99 times and commenced its commercial
operations from April 2018 onwards. However, SEP remains exposed
to post implementation risk in the form of stabilization of
operations in terms of achieving envisaged level of sales and
profitability. SEP has achieved total operating income (TOI) of
INR1.90 crore till July 16, 2018 in current year.
Presence in the highly competitive and fragmented plastic
industry: SEP operates in a highly competitive industry marked by
low entry barriers, presence of large number of organized and
unorganized players. This situation increases the level of
competition which is expected to put pressure on profitability of
the manufacturers. This fragmented and highly competitive industry
results into price competition thereby affecting the profit
margins of the companies operating in this industry.
Susceptibility of operating margins to volatility in raw material
costs: Prices of raw material i.e. Plastics granules and Mild
steel etc. are market driven and expected to put pressure on the
margins of the manufacturers. The profitability of SEP remains
exposed to volatile raw material prices.
Key Rating Strengths
Experienced promoters: The key promoter, Mr. Sumit Agrawal has
vide experience of 20 years in Real estate industry through
associate company. Another key promoter Mr. Mukesh Agrawal also
holds more than 15 years of experience in real estate and broking
industry though their associate firms. However promoter does not
hold any relevant experience in plastic industry. Further
promoters manages overall operation of SEP under guidance of Mr.
Yogesh B Patel (who is father of Proprietor of M/s Atmiya
Engineering & Plastics and holds more than two decades of
experience in plastic moulding business) for managing the
business.
Vadodara (Gujarat) based Shivsahaj Engineering & Plastics Private
Limited (SEP) was incorporated in September, 2017. Mr. Mukesh
Agrawal and Mr. Sumit Agrawal are the key directors of SEP.
However in initial stage of operations promoters manages operation
of SEP in guidance of Mr.Yogesh B Patel (who is father of
proprietor of Atmiya Engineering & Plastics(AEP). SEP has
purchased existing manufacturing unit from an existing unit M/s
Atmiya Engineering & Plastics (Engaged into the business of
various types of moulds since 1989). SEP has recently completed
project for manufacturing of Moulds, plastic moulded articles,
Multiplex chairs and Air Coolers, having total cost((includes cost
of acquiring existing unit of AEP and purchase and installation
cost of few new machineries) of INR9.98 crore, which was funded
through debt equity mix of 2.99 times. SEP has commenced its
commercial operations from April 2018 onwards. Darshanam Life
Space Private Limited, SMS Broking & Trading private, Darshanam
Sphere and Darshanam Heights LLP are associate entities of SEP.
SEP has achieved total operating income (TOI) of INR1.90 crore
till July 16, 2018 in current year.
SREE VEERA: CRISIL Lowers Rating on INR6.5cr Cash Loan to D
-----------------------------------------------------------
CRISIL has downgraded its rating on the long term bank loan
facilities of Sree Veera Brahmendra Swamy Spinning Mills Private
Limited (SVPL) to 'CRISIL D' from 'CRISIL B-/Stable'. The
downgrade reflect delays in servicing its debt obligations owing
to weak liquidity.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 6.5 CRISIL D (Downgraded from
'CRISIL B-/Stable')
Proposed Long Term 2.11 CRISIL D (Downgraded from
Bank Loan Facility 'CRISIL B-/Stable')
The rating continues to reflect a below-average financial risk
profile because of a small net worth, high gearing, and weak debt
protection metrics. The rating also factors in working capital-
intensive operations, and susceptibility of profitability margins
to volatile cotton prices and intense competition. These
weaknesses are partially offset by the extensive experience of the
promoters in the cotton-trading industry.
Key Rating Drivers & Detailed Description
Weakness
* Delay in debt servicing: The company has been repaying its debt
obligations with delays. The same is on account of temporarily
liquidity stretch.
* Below-average financial risk profile: The networth was modest at
INR4 crore, and gearing high, at 4.6 times, as on March 31, 2017.
The debt protection metrics in Fiscal 2017 was characterized by
interest coverage ratio and net cash accruals to total debt of
around 1.5 times and 5.6% respectively. Financial risk profile is
estimate to have remained below average in Fiscal 2018.
* Working capital-intensive operations: Gross current assets were
high at around 336 days, with inventory of 171 days, as on
March 31, 2017. Operations remain working capital intensive.
* Susceptibility of profitability margins to volatile cotton
prices and intense competition: Raw cotton constitutes 55-60% of
total production cost, in line with other industry players. Cotton
prices are volatile as the crop continues to be vulnerable to
monsoon or even a pest attack. Also, cotton prices are largely
affected by international demand. Volatility in the availability
and prices of cotton affect margins of spinning companies.
Strengths
* Extensive industry experience of the promoters: The promoters
have an experience of over three decades in cotton trading, and
have developed a healthy relationship with customers. The same has
helped the company in getting repetitive work orders and
uninterrupted raw material supply.
Set up in 2006 by Mr. G Sundararamaiah and his family, SVPL
manufactures cotton yarn at its plant in Guntur, Andhra Pradesh.
UNITED BROTHERS: Ind-Ra Assigns BB+ Issuer Rating, Outlook Stable
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned United Brothers
Multiplast LLP (UBML) a Long-Term Issuer Rating of 'IND BB+'. The
Outlook is Stable.
The instrument-wise rating actions are:
-- INR620 mil. Fund-based limits assigned with IND BB+/Stable
rating; and
-- INR100 mil. Non-fund-based limits assigned with
IND BB+/Stable/IND A4+ rating.
KEY RATING DRIVERS
The ratings reflect UBML's medium scale of operations as indicated
by revenue of INR51 million in FY18 (FY17: INR41 million), which
comprised the commission earned on the sale of polymer products
for GAIL (India) Limited (GAIL; 'IND AAA'/Stable/'IND A1+') and
interest income on the credit extended to customers. FY18
financials are provisional in nature. As per management, the firm
achieved revenue of around INR10 million until June 2018.
The ratings are also constrained by UBML's weak credit metrics
owing to high debt levels to fund its working capital
requirements. Interest coverage (operating EBITDA/gross interest
expense) was almost stable at 1.9x in FY18 (FY17: 1.8x) while net
leverage (total adjusted net debt/operating EBITDAR) deteriorated
to 4.3x (0.2x) owing to an increase in debt.
The firm does not have any inventory on its books and makes
payments to GAIL on behalf of its customers and charges interest
for the extended credit. This results in a high counterparty risk,
with debtors being INR231 million, against net worth of INR91.42
million in FY18.
However, the ratings are supported by UBML's healthy operating
margin of 63.8% in FY18 (FY17: 61.4%) and return on capital
employed of 14% (16%), as the firm only books commission and
interest as revenue. The firm has been a del credere agent for
GAIL since 1997 and has established strong relations with its
customers. The liquidity is moderate with the fund-based limits
being utilized at 72% over the 12 months ended June 2018.
RATING SENSITIVITIES
Positive: A significant increase in the revenue and profitability
margin leading to an improvement in credit metrics on a sustained
basis could be positive for the ratings.
Negative: A significant decline in the revenue and profitability
margin leading to a sustained deterioration in credit metrics
could be negative for the ratings.
COMPANY PROFILE
Incorporated in February 2015, UBML is an agent and a consignment
stockist for the distribution of GAIL's high-density polyethylene
and low-density polyethylene in Maharashtra, Daman and Silvassa.
The company was set up as a partnership firm, United Brothers in
August 1997 with the objective of distribution and marketing of
polypropylene products.
UNITED CAPZ: CARE Assigns B+ Rating to INR23.88cr LT Loan
---------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of United
Capz Private Limited (UCPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank
Facilities 23.88 CARE B+; Stable Assigned
Detailed Rationale & Key Rating Drivers
The rating assigned to the bank facilities of UCPL is primarily
constrained on account of implementation and stabilization risk
associated with on-going debt-funded capex for manufacturing of
Empty Hard Gelatin Capsules (EHGC). The rating is further
constrained on account of susceptibility of profit margins to
volatility in raw material prices along with exposure to
government regulations. The rating, however, derives strength from
experienced promoters in diversified industries and strategic
location of its proposed manufacturing unit.
UCPL's ability to complete the project within envisaged time and
cost parameters and achieve envisaged level of sales and
profitability while managing its working capital efficiently post
completion of project would be key rating sensitivities. Further,
need based support from promoters would also remain crucial.
Detailed description of the key rating drivers
Key Rating Weaknesses
Implementation and stabilization risk associated with on-going
debt-funded capex: UCPL is implementing a green-field project for
manufacturing of Empty Hard Gelatin Capsules (EHGC) with an
envisaged cost of INR33.47 crore to be funded through term loan of
INR19.88 crore and balance INR13.59 crore by way of mix of share
capital and unsecured loan. Project implementation is at an
advanced stage of completion with 90% of the total project cost
incurred till June 28, 2018. With balance costs yet to incur,
timely completion and stabilization of operations shall be
critical. Commercial production is expected to be commenced from
August, 2018.
Susceptibility of profit margins to volatility in raw material
prices: The key raw materials required for manufacturing primarily
include Gelatin, water, food colors and additive, the prices of
which are market-driven and remain fluctuating in nature. Hence,
the company's margins are susceptible to raw material price
variation risks.
Exposure to government regulations: All the products and companies
of pharmaceutical industry are regulated by several policies and
bodies in terms of pricing, quality control, safety and health
standards and several other certifications and control standards.
UCPL being present in the highly regulated industry is susceptible
to any adverse change in the Government policy regarding the same.
Key Rating Strengths
Experienced promoters in diversified industries: Mr. Mahesh
Panchal is a FDA (Food and Drug Administration) approved chemist.
He has an experience of over 12 years in solution preparation of
Gelatin as well as HMPC (Hydroxypropylmethyl cellulose) capsules.
Rest all the directors have experience of more than a decade in
different industries.
Location advantage due to cluster presence: The manufacturing
facility of GLPL is located in Valsad (Gujarat) which is one of
the largest pharmaceutical clusters in India, which results in
easy availability of labour as well as accessibility of water and
power.
Thane-based (Maharashtra) UCPL was incorporated on October 08,
2015 as a private limited company by Mr. Dahyabhai Patel and Mr.
Rakesh Dahanuwala to undertake a green field project for
manufacturing of Empty Hard Gelatin Capsule (EHGC) shells. UCPL is
setting-up a new plant in Valsad (Gujarat) with a proposed
installed capacity of manufacturing 32,659 lakh Capsule shells per
annum. The total project cost is envisaged at INR33.47 crore,
which is to be funded through term loan of INR19.88 crore and
balance INR13.59 crore by way of share capital and unsecured
loans. The company has incurred INR30.12 crore till June 28, 2018
which was funded through term loan of INR18.00 crore and rest was
funded through a mix of share capital and unsecured loans. The
company is expected to start its pre-production trial runs by the
end of July, 2018 end, while the full-fledged commercial
operations are expected to commence from August, 2018.
VASMO AGRO: CARE Lowers Rating on INR40cr LT Loan to D
------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Vasmo Agro Nutri Product Private Limited (Vasmo), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 40.00 CARE D; Issuer not cooperating;
Facilities Revised from CARE BB+; Stable
on the basis of best available
information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from Vasmo to monitor the rating
vide email communications dated June 29, 2018; July 2, 2018; July
4, 2018; July 18, 2018; July 18, 2018; July 31, 2018;
August 1, 2018 and August 3, 2018. 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 Vasmo's
bank facilities will now be denoted as CARE D; ISSUER NOT
COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while
using the above rating.
The ratings have been revised on account of delays in debt
servicing by the company ascertained by CARE as part of its
due diligence exercise.
Detailed description of the key rating drivers
Key Rating Weaknesses
Delays in debt servicing: CARE as part of its due diligence
exercise interacts with various stakeholders of the company
including lenders to the company and as part of this exercise has
ascertained that there are delays in debt servicing by the
company.
Small scale of operations: Pulses, the key raw material consumed
by Vasmo, has exhibited high volatility in its prices in
the past, mainly due to inadequate rainfall over the past two
years. The profitability of pulse processing mills largely
depend on the prices of pulses, which are governed by various
factors such as area under cultivation, monsoon, export
quota fixed by the government, international demand-supply
situation, etc.
Key Rating Strengths
Vast experience of promoters and long standing track record of
operations: The promoter Mr A Mohan started VASMO in 1969 which
involves trading of pulses and has 4 decades of experience in
pulses processing and trading. He takes care of purchase and
production. He is assisted by his son Mr M V Kumarresan who looks
after marketing and planning. Operations team is guided by Dr
Srenivasan who has 38 years of experience in food technology.
Vasmo was initially started in 1969 as a trading firm by Mr A
Mohan who has long standing experience in pulses grading,
processing and marketing. The company is now managed by Mr Mohan's
son Mr M V Kumarresan. Vasmo has a processing facility for Urad
and Tur pulses at Thiruvotriyur with a capacity of 25,000 MTPA.
VIDEOCON INDUSTRIES: Q2 Net Loss Widens to INR2,874.21cr
--------------------------------------------------------
Livemint.com reports that Videocon Industries' standalone net loss
widened to INR2,874.21 crore for April-June 2018-19 as against a
loss of INR885.82 crore in the year-ago period due to write off of
certain loans and advances of INR1,413.35 crore.
Total income in the reported quarter stood at INR272.25 crore. It
was INR1,642.11 crore in the year-ago quarter, Videocon Industries
said in a BSE filing, Livemint relays.
It said revenue from operations, part of total income, for April-
June 2017 is inclusive of excise duty.
Consequent to applicability of GST with effect from July 1, 2017,
revenue from operations are shown net of GST.
According to Livemint, the company said it has written off certain
loans and advances aggregating to INR1,413.35 crore and the same
is shown as exceptional items during the quarter. The said
exercise for other current assets is continuing, it added.
Videocon Industries sells consumer products like color
televisions, washing machines, air conditioners, refrigerators,
microwave ovens and many other home appliances in India.
On June 6, 2018, National Company Law Tribunal (NCLT), Mumbai
bench, admitted a petition for initiating insolvency resolution
process against the company under the Insolvency and Bankruptcy
Code, 2016.
=================
I N D O N E S I A
=================
MODERNLAND REALTY: S&P Alters Outlook to Neg. & Affirms 'B' ICR
----------------------------------------------------------------
S&P Global Ratings revised its outlook on PT Modernland Realty
Tbk. (Modernland) to negative from stable. S&P said, "At the same
time, we affirmed our 'B' long-term issuer credit rating on the
Indonesia-based property developer and the 'B' long-term issue
rating on the company's guaranteed U.S. dollar-denominated senior
unsecured notes."
S&P said, "We revised the outlook to negative to reflect
Modernland's diminishing liquidity buffer due to its refinancing
requirement. Modernland has a Indonesian rupiah (IDR) 450 billion
bridging loan due in June 2019 and US$58 million (about IDR840
billion) in notes due in August 2019.
"We do not expect Modernland to have enough internally generated
cash flows to pay off its maturities in mid-2019. This is even if
the company significantly scales back its capital spending, which
is mostly discretionary. Modernland is therefore dependent on
financial markets and banking relationships to meet the
refinancing needs.
"We understand that Modernland is working on various options to
refinance its debt. The company's liquidity would improve if it
refinances the debt within the next few months and replaces it
with longer-tenor debt. However, the success and timing remain
uncertain.
"We believe Modernland's fundamental property development business
is on track. The company achieved IDR1.9 trillion in attributable
property sales in the first half of 2018, which is 58% of our
expectation for the full year. The two projects launched in
Jakarta Garden City had a take-up rate of more than 90% in the
first half of 2018. We forecast the company to have IDR3.4
trillion of property sales in 2018 and IDR3.9 trillion in 2019,
mostly supported by land sales.
"In our view, Modernland will continue to have aggressive debt-
funded growth over the next 12 months. We estimate that the
company's adjusted debt will remain high at IDR6.0 trillion in
2018-2019 to support IDR805 billion-IDR1,595 billion of annual
capital expenditure, mostly for land acquisitions at Cikande and
Bekasi. This will result in thin interest servicing capacity, with
EBITDA interest coverage of 2.0x-2.1x."
Modernland's market position in Jakarta remains good, in S&P's
view. The company has built a brand name in Jakarta through
projects such as Kota Modern, Modern Hill, and Jakarta Garden
City. As of June 30, 2018, Modernland has a sizable low cost land
bank of more than 1,600 hectares, which should be sufficient for
development for at least 10 years.
The negative outlook reflects Modernland's growing short-term debt
and rising refinancing requirements over the next 12 months.
S&P said, "We could lower the rating, most likely by one notch, if
Modernland's liquidity weakens. This will most likely happen if
the company fails to at least partially refinance debt due in 2019
in the next three to six months with long-dated debt, while
maintaining sizable capital spending and depleting cash.
"We could also lower the rating if Modernland's capital spending
stays elevated and requires additional debt, or if its property
sales slow significantly. The EBITDA interest coverage falling
materially below 2.0x with no prospect of improvement would
indicate such deterioration.
"We would revise the outlook to stable if refinancing risk for
Modernland reduces. This would materialize if the company
refinances at least half of its 2019 maturities with long-dated
debt in the next three to six months. The outlook revision would
also be contingent upon Modernland demonstrating prudent spending
management, maintaining a sound liquidity buffer, and keeping its
EBITDA interest coverage above 2.0x."
====================
N E W Z E A L A N D
====================
FELTEX CARPETS: High Court OKs 2nd Trial Over False IPO Forecast
----------------------------------------------------------------
Paul McBeth at BusinessDesk reports that the Supreme Court has
cleared the way for former Feltex Carpets shareholders to pursue
the directors of the failed carpet maker over whether a false
forecast in the prospectus left them out of pocket.
According to BusinessDesk, Chief Justice Sian Elias and Justices
Susan Glazebrook, Mark O'Regan, Terrence Arnold and Stephen Kos on
Aug. 15 ruled the 2004 Feltex prospectus contained an untrue
statement over forecasts for that year and was enough to warrant
the second stage of a trial as to whether that caused loss to
investors. The decision veered from the Court of Appeal, which in
2016 deemed the misstatement to be immaterial information for
investors, the report says.
BusinessDesk relates that the decision means the 3,639 former
Feltex shareholders seeking NZ$185 million from the failed carpet
maker's directors and IPO promoters will get another day in the
High Court to prove they suffered a loss as a result of the offer
documents. Lead complainant Eric Houghton, who was effectively a
test case in the first stage of the trial, will have to persuade a
judge to let him be included in any further action, says
BusinessDesk.
"We conclude that the FY04 forecast was an untrue statement,"
Justices Glazebrook, O'Regan and Kos said in the written judgment,
BusinessDesk relays. "We stress that this stage of the inquiry is
to determine if the prospectus contained an untrue statement. We
have not considered the materiality of the shortfall. This is
because materiality is, contrary to the approach of the High
Court, not relevant when considering if a statement is untrue."
According to BusinessDesk, the judges set aside the Appeal Court
findings that the untrue statement did not trigger liability under
securities law and wasn't in breach of the Fair Trading Act, both
of which were questions for the second stage of the trial.
BusinessDesk says the High Court will have to work out whether the
untrue statement caused a loss for investors. The Supreme Court
noted Justice Robert Dobson's observation that it will be
necessary to determine a date for that assessment to be made.
"The respondents' arguments that the value of the Feltex shares,
as reflected in its market price after the IPO, was at least equal
to the IPO price will need to be assessed, as will their arguments
that the reasons for the fall in the market price of the shares in
Feltex in 2005-2006 were unrelated to the untrue statement in the
prospectus," the judgment, as cited by BusinessDesk, said. "The
argument made by Mr Houghton that the shares were worthless from
inception will also need to be assessed."
The judges dismissed the appeal against First NZ Capital and
Forsyth Barr as joint lead managers, saying the investment firms
were not promoters under the act, BusinessDesk adds.
That leaves former directors Timothy Saunders, Samuel Magill, John
Feeney, Craig Horrocks, Peter Hunter, Peter Thomas and Joan
Withers, sale promoter Credit Suisse Private Equity and vendor
Credit Suisse First Boston Asian Merchant Partners to face the
second tranche of the trial, BusinessDesk relates.
About Feltex Carpets
Headquartered in Auckland, New Zealand, and established more than
50 years ago, Feltex Carpets Limited -- http://www.feltex.com/--
is a manufacturer of superior-quality carpet. The Feltex
operation included a wool scouring plant, six spinning mills,
three tufted carpet mills, a woven carpet mill and offices in New
Zealand, Australia and the United States.
ANZ Bank placed the company in receivership on Sept. 22, 2006,
and named Colin Nicol, Peter Anderson and Kerryn Downey, of
McGrathNicol+Partners, as receivers and managers.
The TCR-AP reported on Oct. 4, 2006, that Godfrey Hirst acquired
Feltex as a going concern, including its assets and undertakings
in New Zealand, Australia, and the United States. Proceeds of
the sale will be used to ease the company's NZ$128-million debt
to ANZ Bank.
On Dec. 13, 2006, the High Court in Auckland ruled in favor of an
Application by the Shareholders Association against Feltex
Carpets putting the carpet maker into liquidation. John Vague
was appointed as liquidator.
====================
S O U T H K O R E A
====================
KUMHO TIRE: Q2 Net Losses Widen to KRW78.26BB on FX Losses
----------------------------------------------------------
Yonhap News Agency reports that Kumho Tire Co., South Korea's
second-biggest tiremaker by sales, said on Aug. 14 its second-
quarter net losses widened compared to a year earlier due to
currency losses and weak sales.
Net losses deepened to KRW78.26 billion (US$69 million) in the
three months that ended in June from KRW47.49 billion a year
earlier, Kumho Tire said, Yonhap relays.
"The sale of tires remained weak globally in the second quarter as
the company was up for sale. Moreover, unfavorable foreign
exchange rates cut into the quarterly bottom line," Yonhap quotes
a company spokesman as saying.
Operating losses narrowed to KRW12.68 billion in the second
quarter from KRW22.49 billion a year ago. Sales rose 6.7 percent
to KRW664.72 billion from KRW712.18 billion during the same
period, the filing said, Yonhap discloses.
In July, Qingdao Doublestar Co. wrapped up a deal to acquire a 45
percent stake in Kumho Tire for KRW646.3 billion from the state-
run Korea Development Bank, Yonhap notes.
By acquiring Kumho Tire, Doublestar said it will focus on mid and
low-end tires for trucks and buses, and Kumho Tire will focus on
mid and high-end tires for passenger vehicles, according to
Yonhap.
Kumho Tire Co. Ltd. manufactures tire. The company's offerings
include tires for sports utility vehicles, passenger cars,
various sizes of trucks and buses and racing cars. In addition,
the company provides batteries for automobiles. The company is
part of the Kumho Asiana Group.
*********
Tuesday's edition of the TCR-AP delivers a list of indicative
prices for bond issues that reportedly trade well below par.
Prices are obtained by TCR-AP editors from a variety of outside
sources during the prior week we think are reliable. Those
sources may not, however, be complete or accurate. The Tuesday
Bond Pricing table is compiled on the Friday prior to
publication. Prices reported are not intended to reflect actual
trades. Prices for actual trades are probably different. Our
objective is to share information, not make markets in publicly
traded securities. Nothing in the TCR-AP constitutes an offer
or solicitation to buy or sell any security of any kind. It is
likely that some entity affiliated with a TCR-AP editor holds
some position in the issuers' public debt and equity securities
about which we report.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR-AP. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com
Friday's edition of the TCR-AP features a list of companies with
insolvent balance sheets obtained by our editors based on the
latest balance sheets publicly available a day prior to
publication. At first glance, this list may look like the
definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical
cost net of depreciation may understate the true value of a
firm's assets. A company may establish reserves on its balance
sheet for liabilities that may never materialize. The prices at
which equity securities trade in public market are determined by
more than a balance sheet solvency test.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Asia Pacific is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez,
Julie Anne L. Toledo, Ivy B. Magdadaro and Peter A. Chapman,
Editors.
Copyright 2018. All rights reserved. ISSN: 1520-9482.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding,
electronic re-mailing and photocopying) is strictly prohibited
without prior written permission of the publishers.
Information contained herein is obtained from sources believed
to be reliable, but is not guaranteed.
TCR-AP subscription rate is US$775 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance
thereof are US$25 each. For subscription information, contact
Peter Chapman at 215-945-7000.
*** End of Transmission ***