/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/190128.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 Monday, January 28, 2019, Vol. 22, No. 019 Headlines A U S T R A L I A ABV CRAFT: First Creditors' Meeting Set for Feb. 6 AMJ TRANSPORT: Second Creditors' Meeting Set for Feb. 1 BERKELEY CONSTRUCTIONS: First Creditors' Meeting Set for Feb. 5 BESTJET TRAVEL: Equipment Removed Before Administration BIG FISH: Second Creditors' Meeting Set for Feb. 1 EASTERN GOLDFIELDS: May Have Been Trading While Insolvent LAGUNA GOLD: Second Creditors' Meeting Set for Feb. 5 PPR SYDNEY: Second Creditors' Meeting Set for Feb. 1 ROBAYNE PTY: First Creditors' Meeting Set for Feb. 5 WALFORD & SHAW: Second Creditors' Meeting Set for Feb. 1 C H I N A CHINA MINSHENG: Sees Bond Plunge on Liquidity Fears SHARING ECONOMY: Cancels Four Proposed Acquisitions SHARING ECONOMY: SEIL Cancels Agreement with Gagfare Shareholder WINTIME ENERGY: Misses CNY1.7BB Payment on Debt Due Jan. 22 I N D I A ADISHAKTI ALLOYS: ICRA Maintains D Rating in Not Cooperating AGASTI SSK: CRISIL Migrates B- Rating to Not Cooperating AISHWARYA FEEDS: Ind-Ra Rates INR4.3MM Loans Due August 2019 BB- AISHWARYA FEEDS: CRISIL Migrates B+ Rating to Not Cooperating ARUN MATHEW: CRISIL Withdraws B- Rating on INR6cr Loans BALAJI INFRAVENTURES: ICRA Moves D Rating to Not Cooperating BARAKA OVERSEAS: ICRA Reaffirms B+ Rating on INR18cr Loan BRAHMAPUTRA INFRA: ICRA Withdraws D Rating on INR893.80cr Loans CARAMIA GRANITO: ICRA Hikes Rating on INR19.50cr Loan to B+ DURGA AUTOMOTIVES: ICRA Keeps D Loan Rating in Not Cooperating G G EXPORT: Ind-Ra Assigns 'B-' LT Issuer Rating to INR100MM Loan HAZARIBAGH RANCHI: Ind-Ra Cuts Rating on NCDs to 'BB' JOMSONS ENTERPRISES: CRISIL Migrates B Rating to Not Cooperating JORBAT SHILLONG: Ind-Ra Lowers Rating on INR8.8BB NCDs to BB- LOVATO CERAMIC: ICRA Withdraws B+ Rating on INR5cr Cash Loan MOUNT VELOUR: CRISIL Lowers Rating on INR10cr Loans to B NAV VIDYA: ICRA Lowers Rating on INR54.35cr Loan to D PANALE INFRA: CRISIL Keeps B- on INR2.6cr Debt in Not Cooperating PARANKUSH FOOD: ICRA Maintains B+ Ratings in Not Cooperating PARASAKTI ORTHOCARE: CRISIL Migrates B+ Rating to Not Cooperating PUJA QUENCH: CRISIL Migrates 'B' Ratings to Not Cooperating R.K.R. GOLD: Ind-Ra Rates INR650MM Loan BB+, Outlook Stable RAIGARH FOODS: ICRA Gives D Ratings to INR14.50cr Loans RATNA COT: CRISIL Maintains B+ Rating in Not Cooperating Category RAVANI TIMBER: Ind-Ra Withdraws 'B+' LT Rating on INR15MM Loan RENUKA OIL: CRISIL Retains B+ Rating in Not Cooperating Category SAHARA ENGINEERING: Ind-Ra Moves 'BB' Rating to Non-Cooperating SHREE VAISHNAV: CRISIL Lowers Rating on INR35cr Loan to D SHRI NIRMLANAND: CRISIL Migrates B Rating to Not Cooperating SONATANI FOOD: CRISIL Maintains B Rating in Not Cooperating SRI VENKATESWARA: Ind-Ra Assigns BB Issuer Rating, Outlook Stable SSPDL LIMITED: Ind-Ra Affirms BB on INR61.15MM Loan I N D O N E S I A LIPPO KARAWACI: S&P Cuts LT ICR to 'CCC+', Outlook Negative STEEL PIPE: Fitch Withdraws B LT IDR for Commercial Reasons J A P A N TEPCO HOLDINGS: S&P Raises Long-Term ICR to 'BB+', Outlook Stable N E W Z E A L A N D FINEST FOOD: Placed Into Receivership P A K I S T A N PAKISTAN: Unveils Reforms Plan in Move for IMF Aid V I E T N A M NAM A BANK: Moody's Assigns B2 LongTerm Issuer Ratings - - - - - ================= A U S T R A L I A ================= ABV CRAFT: First Creditors' Meeting Set for Feb. 6 -------------------------------------------------- A first meeting of the creditors in the proceedings of ABV Craft Pty Ltd, trading as ABV Craft Merchants, will be held on Feb. 6, 2019, at 11:00 a.m. at the offices of BPS Reconstruction and Recovery, a Level 5, Suite 6, 350 Collins Street, in Melbourne, Victoria. Simon Patrick Nelson of BPS Reconstruction was appointed as administrator of ABV Craft on Jan. 24, 2019. AMJ TRANSPORT: Second Creditors' Meeting Set for Feb. 1 ------------------------------------------------------- A second meeting of creditors in the proceedings of AMJ Transport NSW Pty Ltd has been set for Feb. 1, 2019, at 10:30 a.m. at Level 27, 259 George Street, in Sydney, NSW. The purpose of the meeting is (1) to receive the report by the Administrator about the business, property, affairs and financial circumstances of the Company; and (2) for the creditors of the Company to resolve whether the Company will execute a deed of company arrangement, the administration should end, or the Company be wound up. Creditors wishing to attend are advised proofs and proxies should be submitted to the Administrator by Jan. 31, 2019, at 4:00 p.m. Trent Andrew Devine and Peter John Moore of Jirsch Sutherland were appointed as administrators of AMJ Transport on Jan. 7, 2018. BERKELEY CONSTRUCTIONS: First Creditors' Meeting Set for Feb. 5 --------------------------------------------------------------- A first meeting of the creditors in the proceedings of Berkeley Constructions Pty Ltd will be held on Feb. 5, 2019, at 10:00 a.m. at the offices of Hall Chadwick Chartered Accountants, at Level 40, 2 Park Street, in Sydney, NSW. Blair Pleash and Joanne Keating of Hall Chadwick were appointed as administrators of Berkeley Constructions on Jan. 23, 2019. BESTJET TRAVEL: Equipment Removed Before Administration ------------------------------------------------------- Jamie McKinnell and Kevin Nguyen at ABC News report that computers and security equipment were removed from Bestjet's offices before administrators swooped on the failed online booking portal, a creditors report has claimed. The explosive report by Bestjet's administrators Pilot Partners said former Air Australia boss Michael James may have been a "shadow director" at Bestjet, ABC News discloses. According to ABC News, Bestjet customers were left out of pocket when the company went into voluntary administration before Christmas. Mr. James helped run Air Australia before it folded in February 2012, leaving debts of nearly AUD100 million, ABC News notes. Bestjet was set up in his wife Rachel's name about two weeks later, ABC News relates. In 2013, ASIC banned Mr. James from managing corporations for three years. He has consistently denied being a de facto Bestjet director. According to ABC News, the Pilot Partners report said initial investigations into Bestjet's finances had proved "unnecessarily difficult". The report claimed security equipment had been removed from the company's Brisbane headquarters and that Queensland Police had been notified, ABC News relays. "It is currently unclear who removed this equipment from the company's premises," joint administrator Nigel Markey said in the report. ABC News says Pilot Partners' report also claimed some of Bestjet's records were "largely incomplete". The company changed hands in November and according to the report, Bestjet's new director, Robert McVicker, referred questions about the company's operation to Mr. James, who denied having any records, ABC News states. ABC News notes that company records indicate there are 4,684 ordinary unsecured creditors lining up with claims estimated to be worth almost AUD10.8 million. According to ABC News, the report said that Bestjet was liquidated by Mr. McVicker after an affiliated company - Bestjet Singapore - failed to stump up a AUD3.2 million payment. Pilot Partners said as that company was registered in Singapore, they had no control over it, ABC News says. Bestjet appeared to have been trading while insolvent from early December, the report, as cited by ABC News, said. The next creditors meeting will be held in Brisbane on January 31, adds ABC News. Bestjet Travel was an online travel agency. Nigel Robert Markey and Bradley Vincent Hellen of Pilot Partners were appointed as administrators of Bestjet Travel Pty Ltd, Wynyard Travel Pty Limited and Brooklyn Travel Pty Ltd on Dec. 18, 2018. BIG FISH: Second Creditors' Meeting Set for Feb. 1 -------------------------------------------------- A second meeting of creditors in the proceedings of Big Fish Golf Australia Pty Ltd has been set for Feb. 1, 2019, at 11:00 a.m. at the offices of Veritas Advisory, at Level 5, 123 Pitt Street, in Sydney, NSW. The purpose of the meeting is (1) to receive the report by the Administrator about the business, property, affairs and financial circumstances of the Company; and (2) for the creditors of the Company to resolve whether the Company will execute a deed of company arrangement, the administration should end, or the Company be wound up. Creditors wishing to attend are advised proofs and proxies should be submitted to the Administrator by Jan. 31, 2019, at 4:00 p.m. David Iannuzzi and Vincent Pirina of Veritas Advisory were appointed as administrators of Big Fish on Dec. 17, 2018. EASTERN GOLDFIELDS: May Have Been Trading While Insolvent --------------------------------------------------------- Josh Chiat at The West Australian reports that administrators of Eastern Goldfields said their preliminary investigations into the Michael Fotios-led company show it may have been trading while insolvent for as long as 15 months before its collapse in November. A report from Ferrier Hodgson's Martin Jones and Andrew Smith shows the company could have fallen into insolvency as early as August 2017, when operations began at the Davyhurst mine near Kalgoorlie, with cash flows failing to cover operating costs and trade payments, according to The West Australian. From that point - the same month the company spent one day in the hands of court-appointed administrators after falling foul of a wind-up application - its financial troubles deepened, The West Australian says. "Reputational damage" from the wind-up order led some suppliers to demand the company pay for services on delivery. It also faced difficulty raising capital and Davyhurst failed to live up to production forecasts, the report says. According to The West Australian, the report also revealed Eastern Goldfields' directors engaged accounting firm Ernst & Young in August, two weeks before then-executive chairman Mr. Fotios' resignation from the board, for advice on Safe Harbour protection - Corporations Act provisions that shield company directors from liability in insolvent trading claims. Ernst & Young's engagement was terminated before it could finalise its advice but a draft report suggested the company did not meet the criteria, The West Australian states. The West Australian says Ferrier Hodgson has recommended creditors vote up a proposal from US investors Hawke's Point to revive the fallen Davyhurst gold mine owner at a second meeting of creditors scheduled for Feb. 1. Hawke's Point, which emerged as a cornerstone investor in Eastern Goldfields in November 2017 and took on its main secured debt last year, has proposed a deed of company arrangement so it could raise AUD22 million to salvage the company and relist it on the ASX, The West Australian discloses. It is supported by eight creditors representing 52.9 per cent of the money owed to unsecured creditors, including GR Engineering, which would convert 40 per cent of their claims to equity and receive 22 cents in the dollar on the other 60 per cent, according to The West Australian. A AUD7.3 million trust would be established from the raising to pay creditors. Employees would have entitlements paid in full. Small unsecured creditors chasing debts of under AUD50,000 would be paid in full. Unsecured creditors with debts above that would get AUD50,000 plus a portion of the remaining funds in the trust. The administrators said creditors were unlikely to see a better return in a liquidation, The West Australian relays. If the DOCA fails and liquidators are called in, they could investigate claims of insolvent trading, with Ferrier Hodgson estimating as much as AUD8.4 million in possible unfair payments may have been made from the end of August 2017, The West Australian adds. About Eastern Goldfields Based in Balcatta, Australia, Eastern Goldfields Limited operates as a gold exploration and production company. It owns 100% interest in the Davyhurst and the Mt Ida gold projects, which are located to the north-west of Kalgoorlie. It also holds interests in Siberia, Riverina, Callion, Waihi, and LOI projects. The company was formerly known as Swan Gold Mining Limited and changed its name to Eastern Goldfields Limited in December 2015. Andrew Smith and Martin Jones of Ferrier Hodgson were appointed Administrators of the following Companies on Nov. 29, 2018, pursuant to Section 436A of the Corporations Act 2001: - Eastern Goldfields Limited - Monarch Nickel Pty Ltd - Monarch Gold Pty Ltd - Carnegie Gold Pty Ltd - Siberia Mining Corporation Pty Ltd - Mt Ida Gold Operations Pty Ltd - Ida Gold Operations Pty Ltd - Pilbara Metals Pty Ltd - Mt Ida Gold Pty Ltd - Eastern Goldfields Mining Services Pty Ltd - Siberia Gold Operations Pty Ltd LAGUNA GOLD: Second Creditors' Meeting Set for Feb. 5 ----------------------------------------------------- A second meeting of creditors in the proceedings of Laguna Gold Limited has been set for Feb. 5, 2019, at 4:30 a.m. at the offices of PricewaterhouseCoopers, Level 19, 2 Riverside Quay, in Southbank 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 Feb. 4, 2019, at 3:00 p.m. Craig Crosbie and Michael Fung of PricewaterhouseCoopers were appointed as administrators of Laguna Gold on Dec. 19, 2018. PPR SYDNEY: Second Creditors' Meeting Set for Feb. 1 ---------------------------------------------------- A second meeting of creditors in the proceedings of PPR Sydney NSW Pty Ltd has been set for Feb. 1, 2019, at 3:00 p.m. at the offices of Mackay Goodwin, at Level 2, 10 Bridge Street, in Sydney, NSW. The purpose of the meeting is (1) to receive the report by the Administrator about the business, property, affairs and financial circumstances of the Company; and (2) for the creditors of the Company to resolve whether the Company will execute a deed of company arrangement, the administration should end, or the Company be wound up. Creditors wishing to attend are advised proofs and proxies should be submitted to the Administrator by Jan. 31, 2019, at 4:00 p.m. Domenico Alessandro Calabretta and Grahame Robert Ward of Mackay Goodwin were appointed as administrators of PPR Sydney on Dec. 18, 2018. ROBAYNE PTY: First Creditors' Meeting Set for Feb. 5 ---------------------------------------------------- A first meeting of the creditors in the proceedings of Robayne Pty Ltd will be held on Feb. 5, 2019, at 11:00 a.m. at Theatrette, Central Park Business Centre, 152-158 St Georges Terrace, in Perth, WA. Ian Charles Francis and Daniel Hillston Woodhouse of FTI Consulting were appointed as administrators of Robayne Pty on Jan. 23, 2019. WALFORD & SHAW: Second Creditors' Meeting Set for Feb. 1 -------------------------------------------------------- A second meeting of creditors in the proceedings of Walford & Shaw Pty Ltd, trading as 'walford & Shaw' and 'Mayrah' has been set for Feb. 1, 2019, at 3:00 p.m. at the offices of Mackay Goodwin, Level 2, 10 Bridge Street, in Sydney, NSW. The purpose of the meeting is (1) to receive the report by the Administrator about the business, property, affairs and financial circumstances of the Company; and (2) for the creditors of the Company to resolve whether the Company will execute a deed of company arrangement, the administration should end, or the Company be wound up. Creditors wishing to attend are advised proofs and proxies should be submitted to the Administrator by Jan. 31, 2019, at 4:00 p.m. Grahame Robert Ward and Domenico Alessandro Calabretta of Mackay Goodwin were appointed as administrators of Walford & Shaw on Dec. 17, 2018. ========= C H I N A ========= CHINA MINSHENG: Sees Bond Plunge on Liquidity Fears --------------------------------------------------- Peng Qinqin and Leng Cheng at Caixin Global report that a plunge in the bonds of China Minsheng Investment Group Corp. Ltd. (CMIG) on Jan. 23 sparked by default fears is the latest scare to hit the world's second-largest debt market, as the government's campaign to curb leverage exposes companies that overextended themselves in the good times. CMIG, an investment group owned by 59 private Chinese companies, saw the price of a three-year CNY4.48 billion (US$659.4 million) bond traded on the Shanghai Stock Exchange plummet as much as 28.4% to CNY50.1, Caixin discloses. Although the bond, which matures in December 2020, recovered to CNY64 on Jan. 24, that's still significantly below the average trading price of CNY85 to CNY90 over the past few months, Caixin discloses. Caixin relates that trading in the bonds, which pay an interest rate of 7%, is usually thin - just a few hundred change hands each day. But volumes started to surge on Jan. 22 and continued into Jan. 23, with more than 130,000 traded. The issue was underwritten by Huarong Securities Co. Ltd., the brokerage arm of state-owned bad-assets bank China Huarong Asset Management Co. Ltd. which is embroiled in scandal. Caixin says the sudden sell-off reflects mounting concerns that the company is facing a liquidity crisis. CMIG has been heavily dependent on short-term loans from banks and on bond issuance to grow its investment business. But that funding model has come under increasing pressure after regulators put the squeeze on the financial sector to control leverage and rein in risks, and CMIG is struggling to roll over its old debts. According to Caixin, the company received a quota of CNY10 billion in outstanding super-short-term commercial paper, or those with maturities of under 270 days, in 2018, expressly to repay debt. CMIG noted in the prospectus of a CNY1.5 billion short-term bond issued in July that two-thirds of the funds would be used to pay down a maturing bond, with the remainder repaying loans from financial institutions. Increased Risks The slump in the exchange-traded bond on Jan. 23 could have been triggered by sales ordered by the risk management departments of some institutional holders, such as private-fund managers, an executive with the fixed-income department of a brokerage firm in a eastern region of China told Caixin. A private-fund manager in northern China attributed the slump to a delayed response by investors trading CMIG bonds on the Shanghai Stock Exchange to the increased risks surrounding the company. Other CMIG bonds traded on the interbank market didn't see a large decline, Caixin relays. In a statement to Caixin late Jan. 24, CMIG said that the trading volume of the bond on Jan. 23, amounting to CNY7.67 million, only represented some 0.15% of the total principal. That suggests sales did not come from institutional investors, whose holdings usually amount to at least CNY50 million, but from retail investors, who tend to trade on mood swings, the company said. Established in May 2014 with registered capital of CNY50 billion, CMIG is owned by 59 private Chinese companies including Beijing- based Tianan Life Insurance Co. Ltd. of China, Shanghai-based Zhongtai Trust Co. Ltd., and Shandong Dongyue Chemical Co. Ltd. According to its website, CMIG focuses on emerging sectors linked to people's livelihoods and actively promotes industrial upgrading and economic transformation. It invests in solar energy, manufacturing, sustainable energy, renewable energy, real estate, and business-jet services. CMIG had total assets of more than CNY300 billion and interest- bearing debts surpassing CNY170 billion at the end of 2017, but its debts had surged to CNY232 billion by the end of September 2018. Sources have told Caixin that the company's troubles have been compounded by a complicated web of internal investment departments, and large exposure to deals involving the private placement of shares in listed companies that have incurred heavy losses. To raise cash, CMIG tried to sell two high-quality land parcels in Shanghai, Caixin has learned. The jury is still out on whether CMIG will default on the exchange-traded bond, Caixin says. "Although the bond price has dropped a lot, it's still hard to say whether it will default or not at the end of the day," a bond market source told Caixin. He said CMIG has some solid assets on its books such as financial assets, property, aircraft and solar power stations, and that its main problem is high costs - in management, manpower and fundraising. CMIG has 16 outstanding bond issues - five listed on the Shanghai Stock Exchange, and 11 on the interbank market. Of the total, 12 are due to mature in 2019, according to data compiled by Caixin. One three-year bond has matured and been repaid, and CMIG will need to find CNY12.33 billion to pay back the other 11. About China Minsheng China Minsheng Investment Group is a private equity firm. The firm seeks to invest in solar energy industry, manufacturing, sustainable energy, renewable energy, real estate, and business jet services. The firm seeks to invest in Europe and the United States. SHARING ECONOMY: Cancels Four Proposed Acquisitions --------------------------------------------------- Sharing Economy International Inc. said that these previously announced proposed acquisitions have been terminated for the following reasons: 1) Target: Pandoodle Contract: Entered into an Exclusivity Agreement dated February 8, 2018 Reason for Terminating Contract: The parties have decided to discontinue negotiations. 2) Target: Icon Property Limited Contract: Entered into MOU on March 14, 2018 Reason for Terminating Contract: The period allowed for the parties to enter into a definitive agreement has expired. 3) Target: Oob Media HK Contract: Entered into Exclusivity Agreements on May 10, 2018 and June 26, 2018 Reason for Terminating Contract: The parties have decided to discontinue negotiations 4) Target: Jidam Contract: Entered into an Exclusivity Agreement dated June 29, 2018 Reason for Terminating Contract: The parties have decided to discontinue negotiations. About Sharing Economy Headquartered in Jiangsu Province, China, Sharing Economy International Inc. -- http://www.seii.com/-- through its affiliated companies, designs, manufactures and distributes a line of proprietary high and low temperature dyeing and finishing machinery to the textile industry. The Company's latest business initiatives are focused on targeting the technology and global sharing economy markets, by developing online platforms and rental business partnerships that will drive the global development of sharing through economical rental business models. Throughout 2017, the Company made significant changes in the overall direction of the Company. Given the headwinds affecting its manufacturing business, the Company is targeting high growth opportunities and has established new business divisions to focus on the development of sharing economy platforms and related rental businesses within the company. These initiatives are still in an early stage. The Company did not generate significant revenues from its sharing economy business initiatives in 2017. RBSM LLP's audit opinion included in the company's Annual Report on Form 10-K for the year ended Dec. 31, 2017 contains a going concern explanatory paragraph stating that the Company had a loss from continuing operations for the year ended Dec. 31, 2017 and expects continuing future losses, and has stated that substantial doubt exists about the Company's ability to continue as a going concern. RBSM has served as the Company's auditor since 2012. Sharing Economy incurred a net loss of $12.92 million in 2017 and a net loss of $11.67 million in 2016. As of Sept. 30, 2018, the Company had $59.80 million in total assets, $9.46 million in total liabilities and $50.33 million in total equity. SHARING ECONOMY: SEIL Cancels Agreement with Gagfare Shareholder ---------------------------------------------------------------- Sharing Economy International, Inc.'s wholly-owned subsidiary, Sharing Economy Investment Limited, has cancelled the Sale and Purchase Agreement entered into on Aug. 17, 2018 with the shareholder of Gagfare Limited, according to a Form 8-K filed with the Securities and Exchange Commission. About Sharing Economy Headquartered in Jiangsu Province, China, Sharing Economy International Inc. -- http://www.seii.com/-- through its affiliated companies, designs, manufactures and distributes a line of proprietary high and low temperature dyeing and finishing machinery to the textile industry. The Company's latest business initiatives are focused on targeting the technology and global sharing economy markets, by developing online platforms and rental business partnerships that will drive the global development of sharing through economical rental business models. Throughout 2017, the Company made significant changes in the overall direction of the Company. Given the headwinds affecting its manufacturing business, the Company is targeting high growth opportunities and has established new business divisions to focus on the development of sharing economy platforms and related rental businesses within the company. These initiatives are still in an early stage. The Company did not generate significant revenues from its sharing economy business initiatives in 2017. RBSM LLP's audit opinion included in the company's Annual Report on Form 10-K for the year ended Dec. 31, 2017 contains a going concern explanatory paragraph stating that the Company had a loss from continuing operations for the year ended Dec. 31, 2017 and expects continuing future losses, and has stated that substantial doubt exists about the Company's ability to continue as a going concern. RBSM has served as the Company's auditor since 2012. Sharing Economy incurred a net loss of $12.92 million in 2017 and a net loss of $11.67 million in 2016. As of Sept. 30, 2018, the Company had $59.80 million in total assets, $9.46 million in total liabilities and $50.33 million in total equity. WINTIME ENERGY: Misses CNY1.7BB Payment on Debt Due Jan. 22 ----------------------------------------------------------- Caixin Global reports that Wintime Energy Co. Ltd., one of China's biggest debt defaulters, has once again failed to repay some of its debt because its controlling shareholders could not get their hands on enough cash. Following waves of defaults last year, the debt-ridden Shanghai- listed company announced Jan. 23 that it was incapable of repaying CNY1.07 billion (US$158 million) in one-year commercial paper due Jan. 22, Caixin discloses citing a statement (link in Chinese) on the company's website. The guarantors of the commercial paper, including the company's controlling shareholder Wintime Group Co. Ltd. and its actual controller Wang Guangxi, were unable to meet their obligations to repay the debt due to "liquidity constraints," according to the statement. In a letter to its creditors last year, Wintime Energy acknowledged that it still had about CNY70 billion of unpaid debt plus interest on its books, Caixin recounts. The company's financial difficulties come as a number of Chinese firms have also defaulted on debts following the government's increased scrutiny on corporate debt amid a national deleveraging campaign. Wintime Energy, however, doesn't have much control over its capital, one of its senior executives said in a conference call to creditors earlier this month, adding that banks hold a large amount of its assets as collateral, Caixin relates. Caixin says the company's core assets include power generation and coal production facilities - with the former now controlled by policy bank China Development Bank, a member of the creditor committee. China Citic Bank, another member of the committee, has applied to regulators for control over the company's coal assets. Last year, Wintime Energy rolled out a plan to deal with its enormous debt, Caixin says. Pei Yuyi, head of the company's financing department, said the creditor committee may announce the newest debt restructuring plan after the Lunar New Year holiday, which falls in early February this year. At the end of September, Wintime Energy had CNY79 billion in total liabilities, nearly 73% of its total assets, Caixin discloses citing Wintime's third quarter financial report. About Wintime Energy China-based Wintime Energy Co., Ltd., engages in the power, mining, petrochemical, logistics and investment, and other businesses in China. The company generates power; mines and produces coking coal; and processes shale gas. It has an electric power installed capacity of 10.94 million kilowatts; a total of 14 producing mines; and shale gas exploration rights. The company is also involved in the new energy business; and distribution of petrochemicals. In addition, it invests in strategic emerging industry projects, financial sector, coking coal and thermal coal projects, and power and new energy projects. As reported in the Troubled Company Reporter-Asia Pacific on Oct. 24, 2018, Reuters said Wintime Energy Co. had defaulted on principal and interest payments on a puttable medium-term note after investors exercised their options to sell bonds back to the company. The payments, worth a total of CNY1.49 billion ($214.74 million), were due Oct. 22, the company said in a statement on the website of the Shanghai Clearing House, Reuters relates. In a separate statement, the company said the default had triggered cross-protection clauses in six of its other outstanding debt instruments. ========= I N D I A ========= ADISHAKTI ALLOYS: ICRA Maintains D Rating in Not Cooperating ------------------------------------------------------------ ICRA said the ratings for the bank facilities of Adishakti Alloys Private Limited (AAPL) continue to remain under 'Issuer Not Cooperating' category. The ratings are denoted as "[ICRA]D/ [ICRA]D; ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term-Fund 7.25 [ICRA]D ISSUER NOT COOPERATING; based Limit- Rating continues to remain under Cash Credit 'Issuer Not Cooperating' category Short-term-Non- 14.45 [ICRA]D ISSUER NOT COOPERATING; fund-based limit Ratings continue to remain under 'Issuer Not Cooperating' category ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. Adishakti Alloys Pvt Ltd, incorporated in 1995, is involved in manufacturing of aluminium alloy ingots and billets from recycled aluminium scrap. AAPL's manufacturing facility is in West Bengal and its products are used in power transmission, auto components and other engineering units. AGASTI SSK: CRISIL Migrates B- Rating to Not Cooperating -------------------------------------------------------- CRISIL has migrated the rating on bank facilities of Agasti S.S.K. Limited (ASSKL) to 'CRISIL B-/Stable Issuer not cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Proposed Working 17 CRISIL B-/Stable (ISSUER NOT Capital Facility COOPERATING; Rating Migrated) CRISIL has been consistently following up with ASSKL for obtaining information through letters and emails dated December 19, 2018 and December 24, 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 ASSKL, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on ASSKL is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' category or lower. Therefore, on account of inadequate information and lack of management cooperation, CRISIL has migrated the rating on bank facilities of ASSKL to 'CRISIL B-/Stable Issuer not cooperating'. ASSKL, set up in 1989, is a co-operative society manufacturing sugar. It is based in Akole (Maharashtra) and has sugar cane crushing capacity of 2500 tonnes per day. AISHWARYA FEEDS: Ind-Ra Rates INR4.3MM Loans Due August 2019 BB- ---------------------------------------------------------------- India Rating and Research (Ind-Ra) has assigned Aishwarya Feeds (AFS) a Long-Term Issuer Rating of 'IND BB-'. The Outlook is Stable. The instrument-wise rating actions are: -- INR4.3 mil. Long-term loans due on August 2019 assigned with IND BB-/Stable rating; and -- INR290 mil. Fund-based facilities assigned with IND BB- /Stable/IND A4+ rating. KEY RATING DRIVERS The ratings reflect liquidity pressures on AFS, despite sharp revenue growth in FY18. The company's use of the fund-based facilities was 100% over the 12 months ended November 2018. The cash flow from operations turned negative in FY18, due to incremental working capital requirements, which were funded by through debt. The working capital cycle remains long, despite reducing to 59 days in FY18 (FY17: 63 days), primarily on account of high debtor days of 77 days (77 days). As on November 2018, the firm had an outstanding term loan of INR4.3 million that will be repaid fully by August 2019. Also, although the revenue increased 18.4% yoy in FY18 to INR2,807 million on account of an increase in the number of orders executed, the scale of operations is medium. AFS has achieved revenue of INR1,968.8 million during 8MFY19. The management expects the increasing trend in revenue to continue in FY19 on account of continues orders from existing customers. The ratings also reflect AFS's stretched credit metrics due to modest EBITDA margins and high debt levels, with interest coverage (operating EBITDA/gross interest expense) of 1.2x in FY18 (FY17: 1.3x) and net leverage (adjusted net debt/operating EBITDAR) of 7.5x (6.3x). The credit metrics deteriorated in FY18 due to an additional short-term debt availed as adhoc limit during March 2018. The modest margins are a result of the fragmented nature of the poultry industry which results in high competition. Also, the industry is susceptible to potential disease outbreaks. EBITDA margins fell to 2.0% in FY18 (FY17: 2.3%), on account of an increase in raw material price. The return on capital employed was 10% in FY18. However, the ratings are supported by the company's promoter's experience of more than four decades in the production of poultry feeds and egg sales, leading to longstanding relationships with customers and suppliers. RATING SENSITIVITIES Positive: An improvement in the liquidity position while maintaining the scale of operations and profitability leading to an improvement in the credit metrics, all on a sustained basis, could be positive for the ratings. Negative: Any further stress on the liquidity position /substantial decline in the profitability leading to deterioration in the credit metrics could be negative for the ratings. COMPANY PROFILE AFS is a Namakkal (Tamil Nadu) based partnership concern incorporated in 1975. It is involved in the production of poultry feeds and egg sales. AISHWARYA FEEDS: CRISIL Migrates B+ Rating to Not Cooperating ------------------------------------------------------------- CRISIL has migrated the rating on the bank facilities of Aishwarya Feeds (AF) to 'CRISIL B+/Stable/CRISIL A4 Issuer not cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 25 CRISIL B+/Stable (ISSUER NOT COOPERATING; Rating Migrated) Long Term Loan 0.73 CRISIL B+/Stable (ISSUER NOT COOPERATING; Rating Migrated) Packing Credit 4.00 CRISIL A4 (ISSUER NOT COOPERATING; Rating Migrated) CRISIL has been consistently following up with AF for obtaining information through letters and emails dated December 18, 2018 and December 24, 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 AF. 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 AF is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Information Adequacy Risk with CRISIL BB' rating category or lower. Based on the last available information, CRISIL has migrated the rating on the bank facilities of AF to 'CRISIL B+/Stable/CRISIL A4 Issuer not cooperating'. CRISIL has withdrawn its rating on the Rs.25 crore Cash Credit facility of AF on the request of the company and after receiving no objection certificate from the bank. The rating action is in- line with CRISIL's policy on withdrawal of its rating on bank loan facilities. Set up in 1996 and based in Namakkal (Tamil Nadu), AF manufactures poultry and cattle feed. It is also engaged in the trading of eggs. Its operations are managed by the managing partners, Mr. R Gunasekaran and his family members. ARUN MATHEW: CRISIL Withdraws B- Rating on INR6cr Loans ------------------------------------------------------- CRISIL has withdrawn its rating on the bank facilities of Arun Mathew (AM) on the request of the company and after receiving no objection certificate from the bank. The rating action is in-line with CRISIL's policy on withdrawal of its rating on bank loan facilities. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 5 CRISIL B-/Stable (ISSUER NOT COOPERATING; Migrated from 'CRISIL B-/Stable'; Rating Withdrawn) Long Term Loan 1 CRISIL B-/Stable (ISSUER NOT COOPERATING; Migrated from 'CRISIL B-/Stable'; Rating Withdrawn) CRISIL has been consistently following up with Arun Mathew (AM) for obtaining information through letters and emails dated December 18, 2018 and December 24, 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 AM. 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 AM is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower. Based on the last available information, CRISIL has migrated the ratings on the bank facilities of AM to 'CRISIL B-/Stable Issuer not cooperating'. CRISIL has withdrawn its rating on the bank facilities of AM on the request of the company and after receiving no objection certificate from the bank. The rating action is in-line with CRISIL's policy on withdrawal of its rating on bank loan facilities. AM was set up in 1960 by the proprietor, Mr K T Mathew; it was taken over by his son, Mr Arun Mathew, in 1980. The firm runs a nursery, Kinattukara Nutmeg Plantation and Nursery, which supplies nutmeg budded plants to farmers and government agencies. The firm has over nine acres of farm in Kerala and eight acres of farm in Karnataka. AM is certified ISO: 2001, National Seed Corporation, National horticulture board and directors of horticulture Tamil Nadu, Karnataka, and Kerala. BALAJI INFRAVENTURES: ICRA Moves D Rating to Not Cooperating ------------------------------------------------------------ ICRA has moved the long-term rating for the bank facilities of Balaji Infraventures Private Limited (BIPL) to the 'Issuer Not Cooperating' category. The rating is now denoted as "[ICRA]D ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund-based- 5.00 [ICRA]D ISSUER NOT COOPERATING; Limit-cash Rating moved to the 'Issuer Not Credit Cooperating' category Fund-based- 7.00 [ICRA]D ISSUER NOT COOPERATING; Limit-term Rating moved to the 'Issuer Not loan Cooperating' category ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. Incorporated in 2009, Balaji Infraventures Private Limited is promoted by Mr. Nitish Agarwal, Mr. Naresh Agarwal and Mr. Shiv Kumar Agarwal. BIPL has built a commercial complex containing mall, multiplex, restaurant, food court and gaming zone under the name of "Grand Mall" at Gouri Shanker Mandir, Raigarh. BARAKA OVERSEAS: ICRA Reaffirms B+ Rating on INR18cr Loan --------------------------------------------------------- ICRA has reaffirmed the ratings on the bank facilities of Baraka Overseas Traders at [ICRA]B+ (Stable). Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term- Fund-based 18.00 [ICRA]B+ (Stable); reaffirmed Rationale The rating remains constrained by the firm's leveraged capital structure owing to relatively high reliance on external borrowings coupled with moderation in the firm's net worth position over the recent past on account of withdrawals by the partners. The rating considers the highly fragmented nature of the Indian sea-food industry, which results in intense competition among players and restricts the firm's pricing flexibility. The rating also factors in the inherent risks prevailing in the seafood industry such as susceptibility of seafood availability to diseases, climate changes and government regulations. The rating also considers the vulnerability of the firm's profit margins to fluctuations in foreign exchange rates, to the extent of the unhedged exposure. The rating, nevertheless, derives comfort from the long track record of the promoters in the sea-food processing business for more than three decades. The rating positively factors in the firm's long-term association with its key customers, which has ensured repeat orders and aided in revenue stability. The rating continues to favourably factor in the proximity of the firm's processing plant to the West coast, ensuring adequate supply of sea food with lower delivery time and transportation cost. The rating also positively factors in the healthy growth in operating income in the past two years, supported by improved customer demand. Outlook: Stable The Stable outlook reflects ICRA's expectation that BOT will continue to benefit from the extensive experience of the promoters in the seafood industry and the firm's long-term association with its key customers. The outlook may be revised to Positive if the firm's liquidity position and capital structure improve, aided by better working capital management and limited withdrawals by the partners, respectively. The outlook may be revised to Negative if cash accruals are lower than expected or if any substantial cash withdrawals by the partners or deterioration in the working capital cycle, weakens the liquidity position of the firm. Key rating drivers Credit strengths Significant experience of promoters in the seafood industry: The promoters of the firm have extensive experience of more than three decades in the seafood industry. Long experience of the promoters, coupled with proven track record of the firm, has enabled it in establishing strong ties with its customers and suppliers. Strategic location of the processing facility in the West coast: The firm's processing facility is strategically located in Mangalore and the same ensures adequate fish supply of desired quality, with low delivery time and transportation cost. Healthy growth in operating income: The firm's operating income grew by 22.1% in FY2018, primarily aided by healthy flow of export orders from its existing customers as well as newly acquired customers. Besides, the long-term association with key customers has ensured repeat orders and aided in revenue stability over the years. Credit challenges Exposed to risks inherent to the seafood industry: The firm's operations are exposed to certain risks inherent to the seafood industry such as susceptibility to disease outbreaks and adverse agro-climatic conditions, among others. Intense competition owing to highly fragmented nature of the seafood industry: The seafood industry is highly fragmented in nature, characterised by the presence of many players. This has resulted in intense competition among the players, thereby restricting the pricing flexibility of the firm. Besides, low value-additive nature of operations also results in thin profit margins. Vulnerability of profit margins to fluctuation in foreign exchange: With the firm deriving more than 95% of its revenues from exports, its profit margins are susceptible to fluctuations in foreign exchange to the extent of its unhedged foreign exchange exposure. Risk of cash withdrawal associated with the partnership nature of the firm: Given the partnership nature of the firm, any substantial cash withdrawals by the partners is likely to have an adverse impact on the capital structure, as witnessed in the past. Liquidity position BOT's liquidity position remained moderate as characterised by the limited availability of unutilised working capital borrowings, high working capital intensity of operations and low cash balances as of March-end. Baraka Overseas Traders was established as a partnership firm in 1979. The firm is involved in exports of frozen seafood with the United States, Mauritius, France and the UK as key export destinations. Major varieties of seafood exported by the firm include Cuttle Fish, Ribbon Fish, Mackerel, Sardine and Squid, among others. The firm's processing facility is in Ullal, Mangalore district of Karnataka. The firm reported an operating income of INR62.25 crore and a net profit of INR0.76 crore in FY2018 as against an operating income of INR50.98 crore and a net profit of INR0.94 crore in FY2017. BRAHMAPUTRA INFRA: ICRA Withdraws D Rating on INR893.80cr Loans --------------------------------------------------------------- ICRA has withdrawn the ratings on the bank facilities of Brahmaputra Infrastructure Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term-Fund 145.98 [ICRA]D; ISSUER NOT COOPERATING; Based/CC Withdrawn Long Term- Fund 269.74 [ICRA]D; ISSUER NOT COOPERATING; Based TL Withdrawn Short Term-Non 478.08 [ICRA]D; ISSUER NOT COOPERATING; Fund Based Withdrawn Rationale The rating withdrawal is in accordance with ICRA policy on Withdrawal and Suspension of Credit Ratings, request from the client for withdrawal of rating and NOCs and No Overdues provided by the client. Key rating drivers Key Rating drivers have not been captured as the rated instrument(s) are being withdrawn. Liquidity Position: In the absence of requisite information/cooperation from the client, liquidity position has not be analysed Originally established as a proprietorship firm in 1987 and incorporated in September 1998, Brahmaputra Infrastructure Limited (earlier Brahamputra Consortium Limited) is a construction company executing mining, civil construction, roads & highway projects. Over the years, BIL has executed several contracts in various segments like building construction, roads, mining, tunnels, other civil construction works etc. mainly for public sector undertakings (PSUs) and Government departments. CARAMIA GRANITO: ICRA Hikes Rating on INR19.50cr Loan to B+ ----------------------------------------------------------- ICRA has revised the rating on the bank facility of Caramia Granito LLP to [ICRA]B+(Stable). Amount Facilities (INR crore) Ratings ---------- ----------- ------- Term Loan 19.50 [ICRA]B+(Stable); upgraded from [ICRA]B(Stable) Cash Credit 9.00 [ICRA]B+(Stable); upgraded from [ICRA]B(Stable) Bank Guarantee 1.50 [ICRA]A4; reaffirmed Rationale The rating upgrade factors in the sales ramp up in 6MFY2019 (June 2018 to November 2018) post stabilisation of operations, though the firm's overall scale of operation remains small. Further, the ratings continue to positively factor in the adequate experience of the promoters in the ceramic industry, the benefits derived from its associate concern's marketing and distribution network and the proximity of CGL's plant to raw material sources by virtue of its presence in Morbi (Gujarat). The ratings, however, continue to be constrained by the firm's weak financial risk profile, marked by losses at the net level, leveraged capital structure and below-average debt coverage indicators in FY2019. The ratings also factor in the highly fragmented ceramic tile industry, which results in intense competition. Moreover, the firm's profitability is vulnerable to volatility in raw material and fuel prices and cyclicality in the real estate industry, which remains its main end-user sector. Outlook: Stable ICRA expects CGL to continue to benefit from the extensive experience of its promoters in the ceramic industry. The outlook may be revised to Positive if substantial growth in revenue and profitability and better working capital management strengthen the financial risk profile. The outlook may be revised to Negative if lower-than-expected cash accrual delays the debt servicing obligations or any major debt-funded capex or lower infusion of capital by partners or a stretch in working capital cycle weakens liquidity. Key rating drivers Credit strengths Extensive experience of promoters in ceramic industry: The promoters have decade-long experience vide their association with other companies in the ceramic industry. CGL benefits from the established marketing channels of Group entities. Location-specific advantage: The location of the firm's manufacturing facility in the ceramic tiles manufacturing hub of Morbi enables it to procure quality raw materials at a competitive price and save on transportation cost. Successful commissioning and stabilisation of operations: The firm completed the project within the estimated cost and commenced commercial production in June 2018. CGL has successfully stabilised its operations, mirrored from its revenue of INR9.64 crore in 6MFY2019 (June 2018 to November 2018- Provisional figure). Credit challenges Small-scale operation: CGL commenced production of soluble salt vitrified tiles from June 2018 and reported an operating revenue of INR9.64 crore till November 30, 2018. The firm's scale of operation is expected to remain that of a small ceramic player, with an estimated revenue of INR~25 crore by the end of fiscal FY2019. Weak financial risk profile: The firm's financial risk profile is expected to remain weak in the near to medium term because of the debt-funded capex and the impending debt repayments. The gearing of the firm is estimated to remain ~2.10 times, DSCR of ~1.10 times and Total debt/OPBIDTA of 7.64 times in FY2019. Profitability susceptible to pressure from intense competition and cyclicality in real-estate industry: The ceramic tile manufacturing industry is fragmented, which results in intense competition and exerts pressure on the profit margins. Further, the real estate industry is the major consumer of ceramic tiles, and hence CGL's profitability and cash flows are likely to remain vulnerable to the cyclicality in the real-estate industry. Vulnerability of profitability to fluctuations in raw material prices: Raw material and fuel are the two major manufacturing cost components determining the cost competitiveness of a player in the ceramic industry. CGL has limited control over the prices of its key input such as coal and raw material. Hence, the firm's margin is vulnerable to movement in raw material and gas/coal prices and relies on the firm's ability to pass on any adverse movement to customers. Liquidity position The firm has been sanctioned fund-based limits of INR9.00 core to support its working capital requirements. Going forward, CGL's liquidity will depend on the successful ramp-up of operations, coupled with its ability to generate adequate cash accruals to meet its high debt repayment obligations. Established in April 2017, CGL manufactures soluble salt vitrified tiles at its facility in Morbi (Gujarat). The unit has an estimated installed capacity of producing ~56,700 MT of tiles annually. The unit became fully operational in June 2018. DURGA AUTOMOTIVES: ICRA Keeps D Loan Rating in Not Cooperating -------------------------------------------------------------- ICRA said the ratings for the bank facilities of Durga Automotives Pvt Ltd (DAPL) continue to remain under 'Issuer Not Cooperating' category. The ratings are denoted as "[ICRA]D; ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund based 12.00 [ICRA]D ISSUER NOT Limit-Cash COOPERATING; Rating continues Credit to remain under 'Issuer Not Cooperating' category ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. Durga Automotives Pvt Ltd was incorporated in 1998. It is an authorised dealer of HMIL for sales of passenger cars and an authorised dealer of Piaggio for sales of commercial vehicles in Siliguri, West Bengal. Apart from vehicle sales, DAPL is also involved in sales of spare parts and accessories and providing after sales services. DAPL started its operations with a single showroom in Siliguri and has gradually expanded its operations. G G EXPORT: Ind-Ra Assigns 'B-' LT Issuer Rating to INR100MM Loan ----------------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned G G Export (GGE) a Long-Term Issuer Rating of 'IND B-'. The Outlook is Stable. The instrument-wise rating action is: -- INR100 mil. Fund-based working capital limits assigned with IND B-/Stable/ IND A4 rating. KEY RATING DRIVERS The ratings reflect GGE's stressed liquidity position as indicated by several instances of overutilization of the fund- based working capital limits for up to three weeks during the 12 months ended November 2018. At FYE18, the firm had a cash balance of INR0.6 million (FYE17: INR2.6 million). The ratings are also constrained by GGE's small scale of operations. Revenue plunged to INR110 million in FY18 (FY17: INR319 million) due to the government's ban on sale of cattle meat. GGE recorded revenue of INR120 million during 8MFY19. EBITDA margin was modest and ranged between 3.0% and 10.4% during FY16-FY18 (FY18: 10.4%, FY17: 3%). The firm's return on capital employed was 7% in FY18. GGE's credit metrics were weak as reflected by a low interest coverage (operating EBITDA/gross interest expense) of 1.3x in FY18 (FY17: 1.2x) and a high net leverage (total adjusted net debt/operating EBITDAR) of 8.7x (10.1x). The improvement in the credit metrics was attributed to an increase in absolute EBITDA to INR11 million in FY18 (FY17: INR10 million). The ratings are also constrained by GGE's elongated working capital cycle of 533 days in FY18 (FY17: 104 days). The elongation was due to a long inventory holding period of 376 days in FY18 (FY17: 48 days), resulting from lack of orders. However, the rating also benefits from GGE's partners' experience of more than two decades in the trading of cattle meat. RATING SENSITIVITIES Positive: An improvement in the liquidity position or an improvement in the credit profile, all on a sustained basis, could be positive for the ratings. Negative: Any further stress on the liquidity position or stretch in the credit profile will be negative for the ratings. COMPANY PROFILE Incorporated in 2015, GGE exports buffalo meat and basmati rice. V.R.Gunasekaran, S.Gopalakrishnan, K.Sugumar and T.Arulselvi are the partners. HAZARIBAGH RANCHI: Ind-Ra Cuts Rating on NCDs to 'BB' ----------------------------------------------------------------- India Ratings and Research (Ind-Ra) has downgraded the ratings on Hazaribagh Ranchi Expressway Limited's (HREL) non-convertible debentures (NCDs) to 'IND BB (SO)' from 'IND AAA (SO)' while revising the Rating Watch status to Rating Watch Evolving (RWE) from Rating Watch Negative (RWN) as follows: -- INR5.380 bil. (outstanding INR4.580 bil. as on date) Senior NCDs* downgraded; Rating Watch Revised to Evolving from Negative with IND BB (SO)/RWE; and -- INR1.770 bil. (outstanding INR1.430 bil. as on date) Subordinate NCDs* with downgraded; Rating Watch Revised to Evolving from Negative with IND BB (SO)/RWE. * Details in annexure KEY RATING DRIVERS The rating action reflects the IL&FS group's management's indication that pursuant to the National Company Law Appellate Tribunal's (NCLAT) interim stay order dated October 15, 2018, they are testing each special purpose vehicle (SPV) for a solvency test. The solvency test undertaken considers the subordinated loans provided by the sponsor, IL&FS Transportation Networks Limited's (ITNL; 'IND D'), for its computation. While in Ind-Ra's initial analysis these loans from the sponsors were considered fully subordinated, the new stance of the management to consider the sponsor loans for testing solvency reduces the repayment capability of the project. While this is against the spirit of the financial agreements, including the ring fencing mechanism, it indicates inability of the project to pay off both senior NCDs and subordinated loans from the sponsor that could ultimately lead to a default. Some ITNL's SPVs, including Jharkhand Road Projects Implementation Company Limited (JRPICL, debt rated 'IND D (SO)'), have taken a stance, through their letters to the trustees to desist from making further debits from the SPVs' accounts for servicing any debt obligations in light of the NCLAT order. The debenture holders of JRPICL have written to JRPICL, stating that the letter is untenable as the NCLAT order has been misread in light of the legal opinion being received, which quoted that the regular principal and interest payments of the existing debentures are not to be affected. Although Ind-Ra has not received any such letter for HREL yet, there is heightened uncertainty of future debt servicing by HREL as well. This follows the precedence from JRPICL, where despite the availability of funds to pay the senior bondholders the bonds defaulted. The ratings assess the ability to pay, and although there are adequate cash flows to meet the debt service obligations, the demonstration of a default in the instance of JRPICL (despite availability of funds to process the debt service payment) poses the risk related to HREL's debt payment issues, and hence, the ratings are severely impacted. Failure to honor payments on the due date of April 12, 2019 will lead to a further rating downgrade to 'IND D' in line with The Securities and Exchange Board of India's regulations that direct credit rating agencies to recognize defaults on the 'one day one rupee' principle. HREL has so far received 12 annuity payments. The 12th annuity of INR634 million was received on September 28, 2018 against the scheduled date of September 15, 2018. HREL had an INR563.9 million debt service reserve and INR263.2 million worth of investments in liquid mutual funds as on December 26, 2018, of which INR33.9 million is for a major maintenance reserve. The cash and bank balance of INR6.83 million is also being maintained. RATING SENSITIVITIES The RWE indicates that the rating may be upgraded, downgraded or affirmed. Ind-Ra will resolve the RWE once there is greater visibility about NCLAT's judgment on the legal position of the ring fencing of the SPVs, tenability of the stance on the consolidation of the subordinated loan from the sponsor and the actions undertaken by the trustees and the escrow bank towards timely debt payment. COMPANY PROFILE HREL is an SPV created by ITNL for the purpose of designing, constructing and maintaining the four-lane Hazaribagh-Ranchi section of NH33 to 114km from 40.5km in Jharkhand on a build- operate-transfer-annuity basis. National Highways Authority of India ('IND AAA'/Stable) awarded the project to HREL under a competitive bidding process and has agreed to pay a semi-annual annuity of INR640.80 million over the concession period of 18 years. The company has also received the final completion certificate effective April 1, 2015. HREL achieved provisional completion on September 15, 2012 and received the first annuity in July 2013. The project was completed 134 days ahead of the scheduled project completion date, which entitled HREL to receive an early completion bonus of INR470 million. JOMSONS ENTERPRISES: CRISIL Migrates B Rating to Not Cooperating ---------------------------------------------------------------- CRISIL has migrated the rating on bank facilities of Jomsons Enterprises (India) Private Limited (JE; part of the Jomsons group) to 'CRISIL B/Stable Issuer not cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 11 CRISIL B/Stable (ISSUER NOT COOPERATING; Rating Migrated) Long Term Loan 9.5 CRISIL B/Stable (ISSUER NOT COOPERATING; Rating Migrated) CRISIL has been consistently following up with JE for obtaining information through letters and emails dated December 18, 2018 and December 24, 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 JE, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on JE is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' category or lower. Therefore, on account of inadequate information and lack of management cooperation, CRISIL has migrated the rating on bank facilities of JE to 'CRISIL B/Stable Issuer not cooperating'. For arriving at its rating, CRISIL has combined the business and financial risk profiles of JE and Bestin Plast (BP). This is because both the entities, together referred to as the Jomsons group, are in the same line of business, have operational and financial linkages, and are managed by the same promoter. Furthermore, the company has not paid the fee for conducting rating surveillance as agreed to in the rating agreement. The Jomsons group trades in PVC panel profiles and is venturing into customised printing in 3D texture on doors, ceilings, floors, and other surfaces. JE, formerly known as Jomsons Plastics, was established in 2011 and BP in 1993. Both entities, based in Thrissur (Kerala), are managed by Mr Bestin Joy. JORBAT SHILLONG: Ind-Ra Lowers Rating on INR8.8BB NCDs to BB- ------------------------------------------------------------- India Ratings and Research (Ind-Ra) has downgraded Jorbat Shillong Expressway Limited's (JSEL) senior and subordinated non- convertible debentures' (NCDs) ratings to 'IND BB- (SO)' from 'IND AAA(SO)' while revising the Rating Watch Status to Rating Watch Evolving (RWE) from Rating Watch Negative as follows: -- INR6.412 bil. Senior NCDs* downgraded; Rating Watch Revised to Evolving from Negative with IND BB (SO)/RWE; and -- INR2,421.6 bil. Subordinate NCDs* downgraded; Rating Watch Revised to Evolving from Negative with IND BB (SO)/RWE. * Details in annexure KEY RATING DRIVERS The rating action reflects the IL&FS group's management's indication that pursuant to the National Company Law Appellate Tribunal's (NCLAT) interim stay order dated October 15, 2018, they are testing each special purpose vehicle (SPV) for a solvency test. The solvency test undertaken considers the subordinated loans provided by the sponsor, IL&FS Transportation Networks Limited's (ITNL; 'IND D'), for its computation. While in Ind-Ra's initial analysis these loans from the sponsors were considered fully subordinated, the new stance of the management to consider the sponsor loans for testing solvency reduces the repayment capability of the project. While this is against the spirit of the financial agreements, including the ring fencing mechanism, it indicates the inability of the project to pay off both senior NCDs and subordinated loans from the sponsor that could ultimately lead to a default. Some ITNL's SPVs, including Jharkhand Road Projects Implementation Company Limited (JRPICL), whose debt is rated 'IND D (SO)'), have taken a stance, through their letters to the trustees to desist from making further debits from the SPVs' accounts for servicing any debt obligations in light of the NCLAT order. The debenture holders of JRPICL have written to JRPICL, stating that the letter is untenable as the NCLAT order has been misread in light of the legal opinion being received, which was quoted that the regular principal and interest payments of the existing debentures are not to be affected. Although Ind-Ra has not received any such letter for JSEL yet, there is heightened uncertainty of future debt servicing by JSEL as well. This follows the precedence from JRPICL, where despite the availability of funds to pay the senior bondholders, the bonds defaulted. The ratings assess the ability to pay, and although there are adequate cash flows to meet the debt service obligations, the demonstration of a default in the instance of JRPICL (despite availability of funds to process the debt service payment) poses the risk related to JSEL's debt payment issues, and hence, the ratings are severely impacted. Failure to honor payments on the due date of 1 March 2019 will lead to a further rating downgrade to 'IND D' in line with The Securities and Exchange Board of India's regulations that direct credit rating agencies to recognize defaults on the 'one day one rupee' principle. JSEL has received five annuities until date. The next annuity is due on January 28, 2019. However, there are deficiencies pointed out in maintenance activities in the independent engineer's report for November 2018. The report has indicated imposing penalties for the non-completion of balance works, poor maintenance and non-compliance with operation and maintenance obligations, reflecting on high operation and maintenance risks due to the weakened credit profile of the operation and maintenance contractor, ITNL. According to the company, the project had a cash of INR595 million in the debt service reserve account and a cash of INR90 million as on December 31, 2018. RATING SENSITIVITIES The RWE indicates that the rating may be upgraded, downgraded or affirmed. Ind-Ra will resolve the RWE once there is greater visibility about the NCLAT's judgment on the legal position of the ring fencing of the SPVs, the tenability of the stance on the consolidation of the subordinated loan from the sponsor and the actions undertaken by the trustees and the escrow bank towards timely debt payment. COMPANY PROFILE JSEL is a SPV that was incorporated to implement a lane expansion project under the build-operate-transfer annuity model. JSEL has a 20-year concession (expiring in January 2031) from National Highways Authority of India ('IND AAA'/Stable) to design, construct, develop, finance, operate and maintain a 61.8km stretch between Jorbat (Assam) and Barapani (Meghalaya) on NH 40. LOVATO CERAMIC: ICRA Withdraws B+ Rating on INR5cr Cash Loan ------------------------------------------------------------ ICRA has withdrawn the long term rating of [ICRA]B+ with a Stable outlook and the short term rating of [ICRA]A4 assigned to the INR9.31 crore bank facilities of Lovato Ceramic Private Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund based limits- 5.00 [ICRA]B+ (Stable); Withdrawn Cash Credit Fund based limits- 2.71 [ICRA]B+ (Stable); Withdrawn Term Loan Non fund based Limits 1.60 [ICRA]A4; Withdrawn Rationale The ratings assigned to Lovato Ceramic Private Limited have been withdrawn at its request based on the no due certificate provided by its bankers. Outlook: Not applicable Key rating drivers: Key Rating drivers has not been captured as the rated instrument(s) are being withdrawn. Liquidity position: Liquidity position has not been captured as the rated instrument(s) are being withdrawn. Incorporated in June 2009, Lovato Ceramic Private Limited (LCPL) commenced commercial production of ceramic wall tiles in February 2010. Its plant is located at Morbi in Rajkot district of Gujarat. LCPL is managed by Mr. Jaydeep Patel. The company currently manufactures wall tiles of sizes 12"x12", 12"x18" and 12"x24" and has established 'Lovato' brand for selling its product. MOUNT VELOUR: CRISIL Lowers Rating on INR10cr Loans to B -------------------------------------------------------- CRISIL has downgraded its rating on the bank loan facilities of Mount Velour Rubber Works Private Limited (MVRWL) to 'CRISIL B/Stable' from 'CRISIL B+/Stable'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 8 CRISIL B/Stable (Downgraded from 'CRISIL B+/Stable') Proposed Long Term 2 CRISIL B/Stable (Downgraded Bank Loan Facility from 'CRISIL B+/Stable') The downgrade reflects continued pressure in MVRWL's liquidity position reflected in high bank limits utilization of 99% for twelve months trailing September 2018. The working capital cycle has seen increase in terms of the debtor days increasing to 22 days from the historical 7-11 days resulting in overall increase in GCA days. CRISIL believes that MVRWL's liquidity will remain under pressure over the medium term. The rating continues to reflect its modest scale of operations, exposure to intense competition in the rubber and tyre industry, and below-average financial risk profile because of a small net worth. These weaknesses are partially offset by the extensive experience of its promoters and established customer relationship. Key Rating Drivers & Detailed Description Weakness * Modest scale of operations in competitive segment: With revenue of INR75.72 crore in fiscals 2018, scale remains small due to intense competition in the rubber and tyre industry. * Below-average financial risk profile: Net worth and gearing were weak at INR3.11 crore and 2.69 times, respectively, as on March 31, 2018. Strengths * Extensive experience of promoters and reputed clientele: Industry presence of around four decades has enabled the promoters to build a strong network of reputed customers. Outlook: Stable CRISIL believes MVRWL will continue to benefit over the medium term from the extensive experience of its promoters in the rubber industry. The outlook may be revised to 'Positive' if improvement in scale of operations and operating profitability leads to a better financial risk profile. The outlook may be revised to 'Negative' if financial risk profile deteriorates on account of lower sales and profitability or large debt-funded capital expenditure. Liquidity MVRWL has sufficient liquidity as seen in the cash accruals against no debt obligations. Bank Limit Utilization is high marked by fully utilized bank lines as seen in the average bank limit utilization of 99% for the last 12 months ended Sep 2018.Current ratio are moderate as on March 31,2018. Set up in 1977 as a partnership firm by Mr M Usman and his associates and reconstituted as a private limited company in 2005, MVRWL manufactures block rubber. The company is based in Nilambur, Kerala. NAV VIDYA: ICRA Lowers Rating on INR54.35cr Loan to D ----------------------------------------------------- ICRA has revised the ratings on the bank facilities of Nav Vidya Society for Education Research & Training to [ICRA]D. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund based/ 54.35 [ICRA]D; Downgraded from Term Loan [ICRA]BB (Stable) Rationale The rating downgrade takes into account the delays in debt servicing by Nav Vidya Society for Education Research & Training, due to cash flow mismatches and lack of timely financial support from the promoters coupled with sizeable repayment obligations. The rating continues to be constrained by the society's exposure to competitive pressures and regulatory risks. Going forward, a track record of the timely debt servicing will be the key rating sensitivity. Key rating drivers Credit challenges Delays in debt servicing: The society delayed its term loan repayments by approximately 15 days for the month of December 2018. Liquidity Position: NVSERT's liquidity profile remains weak given high debt repayments. The society has been facing a sizeable cash flow shortfall resulting in debt servicing delays. NVSERT runs the GD Goenka Public School in Gurgaon. The school commenced operations in April 2013. The promoter group has significant experience in the education sector, as it already operates the Rohini branch and Sarita Vihar branch of GD Goenka Public School since 2007 and 2015, respectively. In FY2017, the society reported a net surplus of INR0.02 crore on revenue receipts of INR37.57 crore compared with net losses of INR3.78 crore on revenue receipts of INR24.64 crore in the previous year. PANALE INFRA: CRISIL Keeps B- on INR2.6cr Debt in Not Cooperating ---------------------------------------------------------------- CRISIL has been consistently following up with Panale Infrastructures Private Limited (PIPL) for obtaining information through letters and emails dated June 28, 2018 and December 10, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Bank Guarantee 3 CRISIL A4 (ISSUER NOT COOPERATING) Cash Credit 2.6 CRISIL B-/Stable (ISSUER NOT COOPERATING) 'The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of PIPL, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on PIPL 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 PIPL continues to be 'CRISIL B-/Stable/CRISIL A4 Issuer not cooperating'. PIPL was incorporated in 2009 by Mr. Pundik Vitthalrao Panale. It undertakes construction of roads, bridges and buildings for government and private players in Maharashtra. PIPL is registered with the Public Works Department, Maharashtra, and the Maharashtra Irrigation Department. PARANKUSH FOOD: ICRA Maintains B+ Ratings in Not Cooperating ------------------------------------------------------------ ICRA said the ratings for the bank facilities of Parankush Food Processing & Rice Mill (P) Limited (PFPRM) continue to remain under 'Issuer Not Cooperating' category. The ratings are denoted as "[ICRA]B+ (Stable)/ [ICRA]A4; ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund based 1.75 [ICRA]B+ (Stable) ISSUER NOT Limit-Cash COOPERATING; Rating continues Credit to remain under 'Issuer Not Cooperating' category Fund based 3.68 [ICRA]B+ (Stable) ISSUER NOT Limit-term COOPERATING; Rating continues loan to remain under 'Issuer Not Cooperating' category Non-fund- 0.18 [ICRA]A4 ISSUER NOT based-limit COOPERATING; Rating continues to remain under 'Issuer Not Cooperating' category ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. Incorporated in August 2008, Parankush Food Processing & Rice Mill (P) Limited started commercial operations in August 2012 as a rice milling unit in the district of Hooghly, West Bengal. The company has a milling capacity of 120 MT per day; translating into an annual milling capacity of 36000 MT. The promoters have significant experience in rice trading over the years. PARASAKTI ORTHOCARE: CRISIL Migrates B+ Rating to Not Cooperating ----------------------------------------------------------------- CRISIL has migrated the rating on bank facilities of Parasakti Orthocare (PO) to 'CRISIL B+/Stable Issuer not cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 5 CRISIL B+/Stable (ISSUER NOT COOPERATING; Rating Migrated) Proposed Cash 1 CRISIL B+/Stable (ISSUER NOT Credit Limit COOPERATING; Rating Migrated) CRISIL has been consistently following up with PO for obtaining information through letters and emails dated October 22, 2018, November 28, 2018 and December 24, 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 PO, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on PO is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' category or lower. Therefore, on account of inadequate information and lack of management cooperation, CRISIL has migrated the rating on bank facilities of PO to 'CRISIL B+/Stable Issuer not cooperating'. Furthermore, the company has not paid the fee for conducting rating surveillance as agreed to in the rating agreement. Set up in 2008, PO is a partnership firm of Mr V Yuvarajan and his brothers. The firm distributes orthopaedic implants of J&J in the Chennai and Vellore districts. PUJA QUENCH: CRISIL Migrates 'B' Ratings to Not Cooperating ----------------------------------------------------------- CRISIL has been consistently following up with Puja Quench Distributors India Private Limited (PQPL) for obtaining information through letters and emails dated June 28, 2018 and December 10, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 3 CRISIL B/Stable (ISSUER NOT COOPERATING; Rating Migrated) Proposed Long Term 4 CRISIL B/Stable (ISSUER NOT Bank Loan Facility COOPERATING; Rating Migrated) 'The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of PQPL, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on PQPL 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 PQPL continues to be 'CRISIL B/Stable Issuer not cooperating'. Furthermore, the company has not paid the fee for conducting rating surveillance as agreed to in the rating agreement. The Delhi-based PQPL was set up as a proprietorship concern in 2003 and reconstituted as a private limited company in 2010. The company is primarily engaged in trading bulk milk and soft- drinks. It is a carrying and forwarding agent for Coca Cola India Pvt Ltd, for soft-drinks, and supplies milk in bulk quantities to co-packers, milk traders and dairies. R.K.R. GOLD: Ind-Ra Rates INR650MM Loan BB+, Outlook Stable ----------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned R.K.R. Gold Private Limited (RKRGPL) a Long-Term Issuer Rating of 'IND BB+'. The Outlook is Stable. The instrument-wise rating actions are: -- INR250 mil. Non-fund-based working capital limits assigned with IND A4+ rating; and -- INR650 mil. Fund-based working capital limits assigned with IND BB+/Stable/IND A4+ rating. KEY RATING DRIVERS The ratings reflect RKRGPL's moderate credit metrics owing to high working capital requirements. As per unaudited financials for FY18, RKRGPL's interest coverage (operating EBITDA/gross interest expense) was stable at 1.3x (FY17: 1.3x), while its net financial leverage (adjusted net debt/operating EBITDAR) deteriorated marginally to 5.8x (4.8x) due to an increase in short-term debt utilization at end-March 2018, which pushed up the total debt to INR789.9 million (INR734.2 million). The ratings also take into consideration RKRGPL's modest and volatile operating margins due to the commoditized nature of raw material. The margins hovered between 3.6% and 4.6% in the four years ended FY18. The company's return on capital employed was 13.3% in FY18 (FY17:14.4%) and its EBITDA margin was average at 4.2% (4.6%). The ratings also factor in RKRGPL's tight liquidity position, as indicated by the almost full utilization of its fund-based working capital facilities and 53% utilization of its non-fund- based facilities during the 12 months ended December 2018. Its cash flow from operations turned to a negative INR110.2 million in FY18 (FY17:INR80.4 million) owing to high working capital requirements and lower EBITDA. As of March 2018, the company had a cash balance of INR24 million. Net cash conversion cycle improved to 47 days in FY18 (FY17: 48 days). The ratings are supported by the company's large scale of operations, with revenue of INR3,107.1 million in FY18 (FY17: INR2,987.5 million). Revenue increased in FY18 because the company expanded its customer base and increased its product offerings by introducing new designs during FY18-FY19. The revenue is estimated to increase further in FY19, as RKRGPL is expanding its manufacturing capacity by adding Unit III , which is expected to commence operations from 4QFY19. Revenue declined 15.6% yoy in FY17 due to the strike against the imposition of excise duty during April-June 2016, which affected the operations at the company's manufacturing facilities, and the impact of demonetization during November 2016-January 2017. RKRGPL generated revenue of INR2,671.3 million in the first seven months of FY19. The ratings also benefit from the company's established market position, with an operational track record of over 30 years, and the promoter's experience of more than two decades in the jewelry manufacturing business. Additionally, the company has strong relationships with its clients and also has a robust base of suppliers. RATING SENSITIVITIES 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. 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. COMPANY PROFILE Incorporated in 2006 in Coimbatore, Tamil Nadu, RKRGPL manufactures and distributes gold jewelry. RAIGARH FOODS: ICRA Gives D Ratings to INR14.50cr Loans ------------------------------------------------------- ICRA has reassigned the long-term rating to [ICRA]D ISSUER NOT COOPERATING from [ICRA]B+ ISSUER NOT COOPERATING for the bank facilities of Raigarh Foods & Hotel Business Private Limited (RFHBPL). ICRA has also reassigned the short-term rating to [ICRA]D ISSUER NOT COOPERATING from [ICRA]A4 ISSUER NOT COOPERATING for the non-fund based bank facility of RFHBPL. The ratings continue to be in the 'Issuer Not Cooperating' category. The ratings are now denoted as "[ICRA]D/[ICRA]D ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund based- 7.50 [ICRA]D ISSUER NOT COOPERATING; Cash Credit Reassigned from [ICRA]B+ (Stable) ISSUER NOT COOPERATING Unallocated 1.00 [ICRA]D ISSUER NOT COOPERATING; Limit Reassigned from [ICRA]B+ (Stable) ISSUER NOT COOPERATING Non-fund based 6.00 [ICRA]D ISSUER NOT COOPERATING; Limit-Bank Reassigned from [ICRA]A4 Guarantee ISSUER NOT COOPERATING ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. Rationale The ratings take into consideration the irregularity in debt servicing by RFHBPL, as confirmed by its lender to ICRA. RFHBPL was incorporated as a private limited company in 1996 by Mr. Subhash Agarwal based in Raigarh, Chhattisgarh. The company is primarily engaged in the milling of raw and par-boiled rice. RATNA COT: CRISIL Maintains B+ Rating in Not Cooperating Category ----------------------------------------------------------------- CRISIL has been consistently following up with Ratna Cot Fibers (RCF) for obtaining information through letters and emails dated June 28, 2018, and December 10, 2018, among others, apart from telephonic communication. However, the issuer has remained non cooperative. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 4 CRISIL B+/Stable (ISSUER NOT COOPERATING) Long Term Loan 1.8 CRISIL B+/Stable (ISSUER NOT COOPERATING) 'The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of RCF, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on RCF 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 RCF continues to be 'CRISIL B+/Stable Issuer not cooperating'. RCF was set up as a partnership firm in June 2014 by Mr. Om Prakash Agarwal, Mr. Shivam Shyam Sunder Agarwal, and Mr. Ajay Agarwal. It gins and presses raw cotton. Its unit at Sendhwa, Madhya Pradesh, has capacity of 200 bales per day and commenced operations from February 2015. RAVANI TIMBER: Ind-Ra Withdraws 'B+' LT Rating on INR15MM Loan -------------------------------------------------------------- India Ratings and Research (Ind-Ra) has maintained M/s Ravani Timber Traders' Long-Term Issuer Rating in the non-cooperating category and simultaneously withdrawn it as follows: -- The IND B+ rating on the INR15 mil. Fund-based working capital limits* maintained in non-cooperating category and withdrawn; and -- The IND A4 rating on the INR50 mil. Non-fund-based working capital limits# maintained in non-cooperating category and withdrawn. * Maintained in 'IND B+ (ISSUER NOT COOPERATING) / IND A4 (ISSUER NOT COOPERATING)' before being withdrawn # Maintained in 'IND A4 (ISSUER NOT COOPERATING)' before being withdrawn KEY RATING DRIVERS The company did not participate in the rating exercise despite continuous requests and follow-ups by the agency. Ind-Ra is no longer required to maintain the ratings, as the agency has received a no objection certificate from the rated facilities' lenders. COMPANY PROFILE Established in 1985, M/s Ravani Timber Traders is a proprietorship firm engaged in the trading of processed and raw timber. RENUKA OIL: CRISIL Retains B+ Rating in Not Cooperating Category ---------------------------------------------------------------- CRISIL has been consistently following up with Renuka Oil Industries (ROI) for obtaining information through letters and emails dated June 28, 2018 and December 10, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Bank Guarantee 0.25 CRISIL A4 (ISSUER NOT COOPERATING) Cash Credit 3.50 CRISIL B+/Stable (ISSUER NOT COOPERATING) Proposed Long Term 1.50 CRISIL B+/Stable (ISSUER NOT Bank Loan Facility COOPERATING) Standby Line of 0.50 CRISIL B+/Stable (ISSUER NOT Credit COOPERATING) Term Loan 6.50 CRISIL B+/Stable (ISSUER NOT COOPERATING) 'The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of ROI, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on ROI 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 ROI continues to be 'CRISIL B+/Stable/CRISIL A4 Issuer not cooperating'. ROI, a partnership firm set up by Mr. Sundersingh Juneja and Ms. Harbanskaur Juneja in 2005, extracts cotton seed oil, manufactures cotton seed oil cakes, and processes cotton bales. The firm's manufacturing facility and warehouse with a storage capacity of 250,000 quintal is located in Khamgaon and Badnera, respectively, both in Maharashtra. The warehouse has been leased to Food Corporation of India Ltd since October 2012. SAHARA ENGINEERING: Ind-Ra Moves 'BB' Rating to Non-Cooperating --------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated Sahara Engineering Private Limited's Long-Term Issuer Rating to the non- cooperating category. The issuer did not participate in the rating exercise despite continuous requests and follow-ups by the agency. Therefore, investors and other users are advised to take appropriate caution while using these ratings. The rating will now appear as 'IND BB (ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating actions are: -- INR120 mil. Fund-based working capital limits migrated to non-cooperating category with IND BB (ISSUER NOT COOPERATING) rating; and -- INR2.5 mil. Non-fund-based limits migrated to non-cooperating category with IND A4+ (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on January 25, 2018. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. COMPANY PROFILE Incorporated in 2000, Sahara Engineering provides comprehensive shipping services of clearing and forwarding, cargo handling and transportation services at various ports on the east coast of India. SHREE VAISHNAV: CRISIL Lowers Rating on INR35cr Loan to D --------------------------------------------------------- CRISIL has downgraded its ratings on bank facilities of Shree Vaishnav Ispat Private Limited (SVIPL) to 'CRISIL D Issuer Not Cooperating' from 'CRISIL BB/Stable Issuer Not Cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 35 CRISIL D (Downgraded from 'CRISIL BB/Stable ISSUER NOT COOPERATING') CRISIL has been consistently following up with SVIPL for obtaining information, through letters and emails dated December 14, 2018 and December 19, 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 ratings assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward-looking component as they have been arrived at without any management interaction, and are based on best available, limited or dated information on the company'. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL did not receive any information, indicating either the financial performance or strategic intent of SVIPL. This restricts CRISIL's ability to take a forward-looking view on the entity's credit quality. CRISIL believes information available on SVIPL is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower'. Based on the latest publically available information, CRISIL has downgraded its ratings to 'CRISIL D Issuer Not Cooperating' from 'CRISIL BB/Stable Issuer Not Cooperating'. The rating downgrade takes into account the instance of irregularity in servicing of working capital debt, of over 30 days during last 3 months. Furthermore, the company has not paid the fee for conducting rating surveillance as agreed to in the rating agreement. Incorporated in 1995, SVIPL is promoted by Mr. Pravin Khade, Mr. Rajesh Grover and Mr. Narendra Sharma. Company is engaged in trading of MS structural steels (angles, plates, channels TMT bars etc.) and has started manufacturing of TMT bars. SHRI NIRMLANAND: CRISIL Migrates B Rating to Not Cooperating ------------------------------------------------------------ CRISIL has migrated the rating on bank facilities of Shri Nirmlanand Steels Casting Private Limited (SNSCPL) to 'CRISIL B/Stable Issuer not cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 4 CRISIL B/Stable (ISSUER NOT COOPERATING; Rating Migrated) Term Loan 2 CRISIL B/Stable (ISSUER NOT COOPERATING; Rating Migrated) CRISIL has been consistently following up with SNSCPL for obtaining information through letters and emails dated December 18, 2018 and December 24, 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 SNSCPL. Which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on SNSCPL is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower'. Therefore, on account of inadequate information and lack of management cooperation, SNSCPL, incorporated in 2007 and based in Raigarh, Chhattisgarh, is promoted by Mr Kamal Jindal and his brother Mr Raman Kumar Agarwal. The company manufactures mild steel ingots and thermo- mechanically treated (TMT) bars. Its daily operations are managed by Mr Kamal Jindal's son, Mr Ashish Jindal. SONATANI FOOD: CRISIL Maintains B Rating in Not Cooperating ----------------------------------------------------------- CRISIL has been consistently following up with Sonatani Food Industries Private Limited (SFIL) for obtaining information through letters and emails dated June 28, 2018 and December 10, 2018, among others, apart from telephonic communication. However, the issuer has remained non cooperative. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Bank Guarantee 0.17 CRISIL A4 (ISSUER NOT COOPERATING) Cash Credit 3.00 CRISIL B/Stable (ISSUER NOT COOPERATING) Proposed Long Term 2.23 CRISIL B/Stable (ISSUER NOT Bank Loan Facility COOPERATING) Term Loan 3.6 CRISIL B/Stable (ISSUER NOT COOPERATING) 'The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of SFIL, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on SFIL 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 SFIL continues to be 'CRISIL B/Stable/CRISIL A4 Issuer not cooperating'. SFIL, incorporated in 2013, mills and processes paddy into par boiled rice. Its rice mill is near Bolpur in West Bengal. Its daily operations are managed by Mr. Manas Chandra. SRI VENKATESWARA: Ind-Ra Assigns BB Issuer Rating, Outlook Stable ----------------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned Sri Venkateswara Spintex Private Limited (SVSPL) a Long-Term Issuer Rating of 'IND BB'. The Outlook is Stable. The instrument-wise rating actions are: -- INR180 mil. Fund-based working capital limit assigned with IND BB/Stable/IND A4+ rating; -- INR115.9 mil. Term loan due on June 2022 assigned with IND BB/Stable rating; and -- INR7.5 mil. Non-fund-based working capital limit assigned with IND A4+ rating. KEY RATING DRIVERS The ratings reflect SVSPL's small scale of operations, and modest operating margins and credit metrics. Its revenue increased to INR735.1 million in FY18 (FY17: INR639.5 million), driven by an increase in sales along with increased realization. Its EBITDA margin was volatile at 7.7%-11.3% over FY15-FY18 due to raw material price fluctuations. Its net leverage (adjusted net debt/operating EBITDA) improved to 6.3x in FY18 (FY17: 10.0x), driven by an increase in absolute EBITDA, and interest coverage (operating EBITDA/gross interest expenses) slightly deteriorated to 2.0x (2.1x), due to an increase in the interest expenses In FY17, interest expenses decreased to INR23.61 million (FY16: INR48.46 million), because of a one-time interest subsidy received by the government of Andhra Pradesh. The return on capital employed of SVSPL was 10% in FY18 (FY17: 6%). SVSPL is present in the highly fragmented cotton yarn manufacturing industry, and faces intense competition from both organized and unorganized players. It also faces forex risk, given export sales accounted for over 70% of its revenue from FY16-FY18. The ratings also reflect SVSPL's moderate liquidity, indicated by a 93% fund-based limit utilization during the 12 months ended December 2018. Its cash and cash equivalent stood at INR0.3 million in FY18 (FY17: INR0.4 million). The ratings, however, are supported by SVSPL's locational advantage. The firm procures raw materials at a competitive price because its facility is located in Guntur, Andhra Pradesh. The ratings are also supported by the promoter's experience of over three decades in the yarn business. RATING SENSITIVITIES Negative: Any decline in the revenue and/or the operating profitability, leading to deterioration in the credit metrics and liquidity, all on a sustained basis, will be negative for the ratings. Positive: Any rise in the revenue, along with an increase in the profitability, leading to an improvement in the credit metrics, will lead to a positive rating action. COMPANY PROFILE SVSPL was incorporated in 2010 and commenced its operations in December 2011, and has an installed spindle capacity of 17,280 spindles. The company produces cotton yarn in the count range of 21s-40s. SSPDL LIMITED: Ind-Ra Affirms BB on INR61.15MM Loan --------------------------------------------------- India Ratings and Research (Ind-Ra) has affirmed SSPDL Limited's Long-Term Issuer Rating at 'IND BB'. The Outlook is Stable. The instrument-wise rating action is: -- INR61.15 mil. Term loan due on July 2027 assigned with IND BB/Stable rating. KEY RATING DRIVERS The affirmation reflects delayed construction of SSPDL's phase one of BHEL Retreat Project in Hyderabad, along with an increase in project cost to INR2,118.64 million from INR1,898.64 million due to changes in engineering work. The first phase of the project, which was scheduled to complete in March 2018, was completed in January 2019. SSPDL completed construction work for 1,155 houses under the first phase. About 88.12% of the construction work is completed for the ongoing phases (Phase II: construction of 110 houses, Phase III: construction of 180 flats for economically weaker section and Phase IV: construction of 100 flats for lower income group) and 86% of the customer advances have been received until December 2018 and 100% of the saleable area of all the ongoing phases is booked The company expects the construction work of the ongoing phases to complete by September 2019. However, the ratings benefit from SSPDL's promoters' more than two decades of experience in the real estate industry. RATING SENSITIVITIES Positive: Timely completion of the ongoing projects within the projected cost outlay could be positive for the ratings. Negative: Any slowdown in customer advances leading to cash flow shortfall could be negative for the ratings. COMPANY PROFILE Incorporated in 1994, SSPDL is a real estate developer listed on BSE Limited. ================= I N D O N E S I A ================= LIPPO KARAWACI: S&P Cuts LT ICR to 'CCC+', Outlook Negative ----------------------------------------------------------- S&P Global Ratings lowered its long-term issuer credit rating on the Indonesian property company to 'CCC+' from 'B-'. S&P also lowered its long-term issue ratings on the company's outstanding guaranteed U.S. dollar notes to 'CCC+' from 'B-'. S&P said, "The downgrade reflects our view of the increasing liquidity pressure on PT Lippo Karawaci Tbk. (Lippo). We expect the company to face modest operating cash flows, high financial charges, maturing debt, and a depleting cash balance. This would keep the company highly dependent on external fundraising that can be challenging and susceptible to external market conditions. "At the holding company level, besides daily operational costs, we forecast Lippo has two key expense items a year: Indonesian rupiah (IDR) 1 trillion for the payment of rental to First REIT, the company's hospital REIT; and about IDR1.2 trillion in interest expenses. The debt burden is escalating with the impending maturities of its US$50 million syndicated loan due April 2019 and a US$75 million bond due in June 2020. Nevertheless, we believe that Lippo will likely extend its US$50 million syndicated loan by another 12 months to April 2020. "We estimate liquidity at the holding company will be insufficient to cover Lippo's needs, barring substantial and timely asset sales. This is even if we assume the rollover of the syndicated loan. As of Sept. 30, 2018, cash and cash equivalents were about IDR800 billion at the holding company level (which bears most of its consolidated debt, including the company's US$910 million notes). Lippo has since sold two assets: a partial stake in First REIT; and a hospital in Myanmar. "We note that Lippo has been contemplating selling its Puri Mall (a large retail mall in the Jakarta area) to its listed retail REIT, Lippo Malls Indonesia Retail Trust (LMIRT). This asset, which we estimate to be worth about IDR3.5 trillion to IDR4 trillion, is large for LMIRT to absorb. The mall would represent nearly 30% of the trust's book value and nearly 60% of its current market capitalization. Debt financing will also depend on funding availability and funding costs, coupled with an equity raising exercise. Hence, the completion timeline may take longer to materialize. "We believe that the sale of Puri Mall, even if successful would be insufficient to bolster Lippo's liquidity beyond 12 months and would not be enough to cover its US$75 million bond maturing in June 2020. In our view, equity raising will be challenging given the decline in equity prices of the company's group wide listed entities. We also note that there is no other asset in Lippo's stable that is as large as Puri Mall. "Lippo may continue to dispose of its existing property inventory in the broader market, but we believe Indonesia's property market will be subdued in the first half of 2019 due to the presidential elections. The company may also consider selling other assets including stakes in listed REITs or landbanks. But sizable divestments would deplete Lippo's liquid assets and dividend stream. Furthermore, meaningful land sales could deplete the company's long-term income stream. Finally, we believe Lippo is yet to demonstrate a willingness to rapidly dispose of assets at discounted levels, even to bolster liquidity." Lippo does not have multiyear committed credit facilities it can draw upon and is unable to raise additional debt under the covenants on its bonds. Against this backdrop of tightening liquidity and reduced financial flexibility, S&P views it as increasingly difficult for Lippo to execute a credible asset- monetization plan to substantially and sustainably bolster its liquidity position. S&P said, "Given the current scenario, we believe that assessing Lippo at the holding company level best reflects its true economic substance. We believe that its current listed subsidiaries are on an expansionary path, and will not be contributing any dividends in the near term. Deconsolidating also gives us a better understanding of the true liquidity situation at Lippo's holding company level, where all the U.S. dollar debt is issued. We have deconsolidated the listed entities, a change in approach that has resulted in lower coverage ratios on debt. "Under this new scope of deconsolidation, we project Lippo's EBITDA interest coverage will be below 1.0x unless it is bolstered by material actions including asset sales amid broadly stable consolidated debt levels. "The negative outlook reflects Lippo's persisting refinancing risk, and interest servicing burden, and the prospect of a further downgrade in the next nine months in the absence of a timely execution of material measures such as asset sales." S&P could lower the rating by one notch or more if: -- Lippo does not raise about IDR1 trillion in three months. -- Lippo does not raise another IDR4 trillion in the subsequent six months thereafter, via substantive measures such as asset sales. S&P will also likely lower the rating if the company undertakes any capital market transactions related to its existing notes that we assess as constituting a distressed exchange, including capital market purchases below par. A revision to stable outlook would be contingent on Lippo significantly improving its cash flow and liquidity position at the holding company to meet its ongoing funding requirements for the next 24 months. STEEL PIPE: Fitch Withdraws B LT IDR for Commercial Reasons ----------------------------------------------------------- Fitch Ratings has affirmed Indonesia-based PT Steel Pipe Industry of Indonesia Tbk's Long-Term Foreign-Currency Issuer Default Rating at 'B'. Fitch Ratings Indonesia has also affirmed Spindo's National Long-Term Rating at 'BBB+(idn)'. The Outlook on the ratings is Negative. The agency has simultaneously chosen to withdraw the ratings of Spindo for commercial reasons. Spindo's ratings are supported by its position as Indonesia's leading steel-pipe manufacturer. However, the ratings are constrained by the company's small scale relative to global steel-product manufacturers and lack of vertical integration. Spindo's performance in 2018 was also weaker than Fitch's expectations, which was evident from its high leverage and lower profitability due to a delay in some infrastructure projects and the rupiah's depreciation against the US dollar. Fitch expects Spindo to reduce its leverage to below 4.0x within the next two years on the back of a sales volume recovery after the 2019 Indonesian election, improving inventory levels and the finalisation of the company's significant capex programme. The Negative Outlook reflects the margin pressure Spindo continues to face from raw-material price volatility, which would slow the pace of deleveraging. 'BBB' National Ratings denote a moderate default risk relative to other issuers or obligations in the same country. However, changes in circumstances or economic conditions are more likely to affect the capacity for timely repayment than is the case for financial commitments denoted by a higher rated category. KEY RATING DRIVERS Weaker-Than-Expected Performance: Spindo's revenue rose 24.9% yoy by end-September 2018, slower than Fitch's expectation of around 30%. Its EBITDA margin fell to around 11% by end-September 2018 (2017: 11.9%), causing Spindo's net debt/annualised EBITDA to increase slightly to 5.7x (2017: 5.5x). The slower-than-expected performance was driven by pressure on demand due to increasing raw-material costs and the rupiah's sharp depreciation against the US dollar in 3Q18, hampering Spindo's sales volume and profitability. Strong Domestic Position; Small Globally: Spindo's domestic scale allows it to manufacture a wide range of products with better cost efficiency than local competitors. However, the company is small compared with global peers. Spindo's economies of scale in manufacturing expenses partly offset its lack of vertical integration and control over prices of its raw materials, mainly steel coils. Indonesian regulations also provide some protection against pressure from imports. Domestic manufacturers receive priority for government projects and there are minimum local- content requirements for sectors such as oil and gas, which support demand for locally produced steel pipes. Strong Revenue Growth, Risks Remain: Fitch expects mid-single- digit sales volume growth and steady margin improvement over the next 18-24 months. Its demand outlook is supported by its expectation for steady GDP growth and the government's focus on infrastructure projects ahead of the 2019 elections. Fitch also forecasts Spindo's EBITDA margin will improve to around 12% over the next 18-24 months on the back of its effort to improve production efficiency. However, Fitch believes continuously high raw-material prices and the US dollar appreciation that will eventually undermine demand growth remain the key risk factors that may hold back a sustained recovery in Spindo's sales volume and profitability. Improving Inventory Levels: Fitch expects Spindo's inventory days to continue improving at a gradual pace over the next 18-24 months. Fitch estimates Spindo reduced its inventory to below 250 days in 2018, from 284 days in 2017, and shortened its working- capital cycle by almost 50 days. This was achieved by a focus on selling inventory and reducing the share of imports in raw- material purchases to around 62% in 2018, from around 70% in 2017. Local purchases benefit Spindo as they can be made with smaller order sizes and shorter delivery times than imports. The company aims to further decrease its inventory levels by increasing the sales of fast-moving products in 2019. Capex Moderation; Cash Flow Improvement: Spindo has significant unutilised capacity and therefore its capex requirements over the next two to three years will be maintenance related. The company's capex fell by 41% yoy by end-September 2018, reducing its capital intensity to 1.1% from 5.8% in 2017. Fitch expects Spindo's low capex to help return its free cash flow to positive over the next 18-24 months. Deleveraging Likely, Price Risks Remain: Fitch expects Spindo's leverage, measured by net debt/EBITDA, to moderate to around 4.0x by 2019 (2018 estimate: 5.4x) and around 3.0x thereafter and the company to start generating positive free cash flow in 2019. This is based on faster EBITDA growth, driven by higher sales volume and better margins, a sustained shortening of Spindo's working- capital cycle and the absence of additional large capacity expansion investments. However, steel-price volatility, which could dampen demand and impede further improvement in inventory levels, is a key risk to its forecasts. DERIVATION SUMMARY Integrated steel producers under Fitch's coverage enjoy a better business profile than Spindo on account of their larger scale, greater product diversity and a higher degree of vertical integration. As a result, they are rated higher in general, with most of them in the 'BB' category. Fitch rates two Brazilian steel companies in the 'B' category: Companhia Siderurgica Nacional (CSN) (B-/Rating Watch Negative) and Usinas Siderurgicas de Minas Gerais S.A. (Usiminas) (B+/Positive). CSN's lower rating reflects a stressed financial profile, despite a significantly larger scale and integrated steelmaking operations (2017 revenue; CSN: USD5.8 billion vs Spindo: USD0.3 billion). Its forecast net debt/EBITDA of above 5.0x is slightly higher than Spindo's 3.0x-4.0x. CSN also faces elevated refinancing risk from a high share of debt due in the short-to-medium term. Meanwhile, Usiminas's better rating reflects its larger scale and lower leverage with revenue of USD3.4 billion and net debt/EBITDA of 3.0x in 2017. Usiminas is Brazil's leading flat-steel producer and Fitch expects its leverage to remain below 2.0x over the next two years. Spindo can be compared with national peers such as PT Sulfindo Adiusaha (Sulfindo, BBB-(idn)/Stable) and PT Aneka Gas Industri Tbk (Aneka Gas, A-(idn)/Positive). Fitch expects Sulfindo to deleverage to a similar leverage level as Spindo in the medium term. However, Spindo's stronger market position in its industry and considerably lower refinancing risk warrant the two-notch differential with Sulfindo. Aneka Gas is a leading industrial-gas supplier that has a strong position in the industry with more than 30% market share. Aneka Gas has stronger profitability with EBITDA margin of above 30% relative to that of Spindo of around 11%-12%. Its leverage, measured by net debt/EBITDA, stood at 3.8x in 2017 (Spindo: 5.5x). Its business profile also benefits from long-term contracts with customers that stipulate a cost-pass- through mechanism. These factors justify the one-notch rating differential with Spindo. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer - Total sales volume to grow by 4%-6% annually from 2019. - EBITDA/tonne of sales margin of IDR1.5 million in 2019, IDR1.6 million in 2020 and IDR1.7 million in 2021 (2017: IDR1.4 million). - Annual capex of around IDR80 billion over 2019-2021. - Net working capital days of 235 from 2019. - No dividend payment throughout 2019-2021. RATING SENSITIVITIES No longer relevant as the ratings have been withdrawn. LIQUIDITY Manageable Liquidity, Risks Remain: Spindo had cash of IDR204 billion and total debt of IDR3.1 trillion as of 9M18. Its debt comprised IDR2.2 trillion of working-capital loans and IDR0.9 trillion of long-term debt. All of its debt was secured and as of 9M18, the company had around IDR3.2 trillion in unused working- capital facilities. Spindo's tight liquidity is counterbalanced by its expectations of the improvement in cash flow on the back of the declining inventory days, recovering profitability, lower capex and the availability of unused bank loan facilities. Spindo's weaker operating performance may have led to a breach of its financial covenant in its bank loan agreements for the reporting period ended December 2018, which would have tested its debt service cover. Fitch notes that its banks previously provided waivers for the June 2018 test date, and further waivers and an extension of the expiry date may be forthcoming given the company's good banking relationships and its potentially stronger cash flow. However, Fitch thinks the company would face liquidity pressure if it is unable to extend the bank-loan facilities. ========= J A P A N ========= TEPCO HOLDINGS: S&P Raises Long-Term ICR to 'BB+', Outlook Stable ----------------------------------------------------------------- S&P Global Ratings said it has raised to 'BB+' from 'BB' its long-term issuer credit rating on Japan-based regulated electric utility company Tokyo Electric Power Company Holdings Inc. (TEPCO Holdings). S&P said, "At the same time, we affirmed our 'B' short-term issuer credit and commercial paper (CP) program ratings on TEPCO Holdings. We also affirmed our 'BB+' issue rating on senior secured bonds issued by the former Tokyo Electric Power Co. Inc. The outlook on the long-term issuer credit rating is stable." S&P said, "The upgrade reflects our view that the TEPCO group has materially improved its funding stability given its accumulated record of sizable public bond offerings in the past two years on the back of stabilized financial performance. The upgrade also reflects our view of good progress toward the transfer of the group's thermal power generation businesses to affiliated electric power company JERA Co. Inc. as planned. "We believe TEPCO group has significantly improved its funding stability over the past two years through public bond issuances. Following the Fukushima nuclear disaster, the TEPCO group relied on bank loans for virtually all its funding for several years before regaining access to public bond markets in 2017 through electric power transmission and distribution subsidiary TEPCO Power Grid Inc. TEPCO has successfully raised nearly JPY1 trillion since March 2017, mainly through five- to 10-year public bond issuances at relatively low cost. We also believe TEPCO Holdings' main creditor banks remain just as supportive as before. Large short-term debt makes TEPCO's weighted average maturity of debt currently shorter than usual ahead of the scheduled transfer of thermal power generation business to JERA in April 2019. However, we presume TEPCO will be able to refinance them gradually with long-term debt. "Moreover, we believe TEPCO Holdings is likely to continue to generate solid recurring profit of about JPY200 billion a year in the next year or two, although it is unlikely to swiftly resume operations at its cost-competitive Kashiwazaki-Kariwa nuclear reactors. This is because we think TEPCO Holdings can cut costs further; we assume oil prices are unlikely to soar and push up fuel costs materially for the next year or two; and we see ongoing strong support from the government that enables TEPCO to take a long-term approach to payments for compensation, cleanup, and decommissioning costs related to the Fukushima nuclear disaster. "We see little immediate risk on our ratings on TEPCO Holdings' from the transfer of the thermal power generation business to JERA. We view JERA as an insulated subsidiary of the TEPCO group and treat it as an equity affiliate in our analysis of TEPCO Holdings (see "TEPCO Holdings' Business Will Stay Stable Even After It Spins Off Its Thermal Power Generation Business," published Dec. 10, 2018) Still, TEPCO Holdings' ownership and operational integration with JERA lead us to believe the TEPCO group is likely to benefit from quasi-vertical integration for the next two to three years. "We have affirmed our 'BB+' issue rating on senior secured bonds issued by the former TEPCO and which we now equalize with the long-term issuer rating on TEPCO Holdings. We used to notch up the issue rating from the long-term issuer rating, reflecting a lower likelihood of a default on senior secured general mortgage bonds than on unsecured bank borrowings, in our opinion. However, having raised our issuer credit rating to 'BB+', we no longer view the possibility of bank loan waivers as necessary to consider. The stable outlook reflects our expectation that TEPCO Holdings will continue to generate relatively stable profits over the next year or two. "For us to consider upgrading TEPCO Holdings, it needs to further improve stability of its cash flow by making itself less sensitive to external factors such as fluctuations in crude oil prices. We believe a restart of the TEPCO group's Kashiwazaki- Kariwa nuclear reactors could produce such a scenario, and we think an upgrade is unlikely in a year or two. "Conversely, we may lower the long-term issuer rating if TEPCO Holdings' recurring profit significantly deteriorates to markedly below JPY200 billion and remains weak for a protracted time. We think a surge in crude oil prices or intensifying competition owing to full liberalization of retail electricity sales could trigger this scenario. We could also consider a downgrade if support from the government or TEPCO Holdings' main creditor banks materially weakens." ==================== N E W Z E A L A N D ==================== FINEST FOOD: Placed Into Receivership ------------------------------------- Debrin Foxcroft at Stuff.co.nz reports that Finest Food Product Limited has been placed into receivership after a significant trans-Tasman deal failed to live up to expectations. The company produced milkshake syrups, essences and coffee syrups for supermarkets and hospitality companies under several brands, including Supreme, The Goodness and Kapiti Kitchen, the report says. Stuff relates that Tony Maginness, one of the two receivers involved in the receivership said significant cash flow issues had developed over the last six months. "They had a major customer in Australia that they signed a contract with. The company had been placing orders but not as fast or as large as expected," Stuff quotes Mr. Maginness as saying. "[Finest Foods] had geared up a new plant, with new machinery and unfortunately they have experienced some cash flow issues and run out of cash." According to Stuff, Mr. Maginness said the company was continuing to trade as a buyer was sought. "The time of the year is quite bad for trading the business so we have kept minimal staff to continue filling orders but we are not manufacturing anything at the moment," Mr. Maginness, as cited by Stuff, said. "It's got some really good customers and some really good products, we are confident we will get a good price for it." Of the 16 employees, four had been retained until a new buyer could be found, Stuff notes. Based in Mangere Bridge, Finest Food Products manufactured a range of syrup and essence products distributed both in New Zealand and in Australia. Entrepreneur Andrew Brodie, who sold Roasted Addiction Coffee in 2011, held a majority stake in the 35-year-old syrup company after purchasing it in 2013. =============== P A K I S T A N =============== PAKISTAN: Unveils Reforms Plan in Move for IMF Aid -------------------------------------------------- Farhan Bokhari at The Financial Times reports that Pakistan's finance minister announced a range of measures on Jan. 23 to narrow fiscal and trade deficits as prime minister Imran Khan prepares to present the government's case to the IMF for a loan to rebuild confidence in the country's economy. The FT relates that in a speech in the lower house of parliament, Asad Umar unveiled a cut in import duty on industrial raw materials to raise industrial productivity and help ease a chronic energy crisis that has caused repeated power outages and gas supply interruptions. He also proposed a series of tax measures for investors in the stock market, as well as proposals to cut red tape and lower taxes for small and medium-sized businesses, the FT relays. "We need to bring a balance in revenue and expenditure as it is vital for growth," the report quotes Mr. Umar as saying. "Our imports are touching a dangerous point. We have to increase exports and bring reforms in agriculture and other sectors". Since he was elected in August, Mr. Khan has focused on staving off a balance of payments crisis. In the year before Mr. Khan's election, liquid foreign currency reserves fell to the equivalent of about eight to nine weeks of imports, down from more than 12 weeks, mainly due to a widening current account deficit. Under Mr. Khan's leadership, the country has secured at least $11 billion in combined loans from Saudi Arabi a, the United Arab Emirates and China to meet its foreign payments in the financial year to June this year. But it has also drawn up plans to seek a bailout from the IMF. Economists said an IMF loan was the only way for Pakistan to rebuild confidence and persuade multilateral lenders such as the World Bank and the Asian Development Bank to extend loans to the country. With overall economic growth during this financial year set to fall to 4 per cent of GDP down, from 5.8 per cent in the last financial year, Mr Khan was risking popular anger, they said. "Across Pakistan, there is a lot of bitterness among businesses and generally people feel that there is a definite slowdown," one senior western economist said, the FT relays. "As Pakistan heads into an IMF programme, the slowdown will continue." According to the FT, Mr. Umar announced cuts in import duty for five years on imported equipment for renewable energy generation as well as machinery for manufacturing in special economic zones. He also said taxes on imported luxury cars would be raised. But analysts warned that the outlook for the economy depended on how far Mr Khan's government could successfully tackle areas in need of reform, the FT relays. "As we go forward, much depends on how far the government can deal with long-term issues central to the economy," the FT quotes Abid Sulehri, member of a government economic advisory council, as saying. Pakistan has one of the world's worst systems of tax collection where less than 1 per cent of the population pays an income tax, the FT states. ============= V I E T N A M ============= NAM A BANK: Moody's Assigns B2 LongTerm Issuer Ratings ------------------------------------------------------ Moody's Investors Service has assigned the following first-time ratings and assessments to Vietnam-based, Nam A Commercial Joint Stock Bank: 1. Long-term local and foreign currency deposit ratings of B2; stable outlook 2. Long-term local and foreign currency issuer ratings of B2; stable outlook 3. Short-term local and foreign currency deposit and issuer ratings of Not Prime 4. Baseline Credit Assessment (BCA) and adjusted BCA of b3 5. Counterparty Risk Assessments of B1(cr)/NP(cr) 6. Long-term local and foreign currency Counterparty Risk Ratings of B1 7. Short-term local and foreign currency Counterparty Risk Ratings of Not Prime The outlook on the bank is stable. RATINGS RATIONALE The B2 long-term ratings assigned to Nam A Bank reflect its BCA of b3, and a one-notch uplift based on Moody's expectation of a moderate probability of support from the Government of Vietnam (Ba3 stable) to the bank in times of need. The b3 BCA assigned to Nam A Bank is based on the good progress the bank made in recovering legacy problem assets, and the improvement in profitability. At the same time, Nam A Bank pursues an aggressive loan growth, which could weaken its asset quality and capitalization over time. The bank's funding quality is moderate due to its small deposit franchise in Vietnam. Nam A Bank's asset quality has improved markedly since 2016, because of healthy cash recoveries on legacy problem assets. As a result, its problem loan ratio fell to 4.4% at June 30, 2018 from 11.3% in 2017 and 25.5% in 2016. Moody's definition of problem loans for Vietnam banks includes loans classified as special mention and non-performing under Vietnamese accounting standards, and gross Vietnam Asset Management Company (VAMC) securities. Moody's expects that Nam A Bank's asset risk will remain elevated over the next 12-18 months, because of its rapid loan growth of 33% (annualized) in the first nine months of 2018 and 51% in 2017; rates which were much higher than that of other Moody's- rated banks in Vietnam. Nam A Bank has a corporate-centric loan portfolio, with corporate loans making up 70% of the bank's gross loans at June 30, 2018, and retail loans the remaining 30%. The bank's corporate loan portfolio has concentrations in the real estate and construction sectors, which Moody's views as credit negative. That said, the bank is gradually reducing its exposure to the real estate and construction sectors, and diversifying into other sectors namely green energy and manufacturing. As a result of its rapid loan growth and still weak internal capital generation, Nam A Bank's capitalization has been on a declining trend. Tangible common equity to risk-weighted assets fell to 6.3% at June 30, 2018 from 6.8% in December 2017 and 8.7% in December 2016. While Moody's expects profitability to improve as the burden of high credit costs reduces, rapid loan growth will outpace internal capital generation and continue to strain the bank's capitalization. Nam A Bank's funding is moderate. Customer deposits funded 75% of the bank's tangible banking assets, while market funds, predominantly interbank borrowings, funded 15% of tangible banking assets at June 30, 2018. Although the bank's deposit base is centered on individual depositors, its small market share in system deposits and limited branch network put it at a disadvantage in terms of cost of deposits when competing with other larger banks in the system. Nam A Bank's deposit base also has concentration to large retail deposits -- deposit size of more than VND1 billion made up 63% of the bank's retail deposit base. The bank's liquidity is comfortable, with liquid resources representing 27% of tangible banking assets at June 30, 2018 (24% at the end of 2017). Of the total tangible banking assets, the higher-quality liquid assets, such as cash, balances with the central bank and government securities, constituted 11% at June 30, 2018. However, the composition of the liquid resources is somewhat weakened by the VND2 trillion of government securities (12% of total liquid resources) that the bank pledged for borrowings at June 30, 2018. In terms of government support for Nam A Bank, Moody's applies the same moderate support assumption as for other private-sector banks in Vietnam. As a result, Nam A Bank's B2 long-term ratings incorporate one notch of uplift from its BCA of b3. The moderate support assumption is mainly underpinned by the bank's market share of around 0.6% of system assets at the end of 2017. WHAT COULD CHANGE THE RATING UP Moody's could upgrade Nam A Bank's long-term bank deposit and issuer ratings if Vietnam's sovereign rating is upgraded, and the bank posts improved standalone credit metrics that lead to a higher BCA. Moody's could upgrade the bank's BCA if: (1) the bank shows material improvements in its asset quality and capitalization, and (2) the bank diversifies its loan portfolio away from real estate and construction loans, which Moody's considers of higher- risk than other loans in Vietnam. WHAT COULD CHANGE THE RATING DOWN Moody's could downgrade the long-term ratings of Nam A Bank if the bank's BCA is downgraded, due to a significant deterioration in its financial fundamentals. If all other rating factors are constant, the BCA would come under pressure if the bank reports a significantly increased problem loan ratio or significantly reduced capitalization. A material deterioration in funding and liquidity could also be negative for the ratings. ********* 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 2019. 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 ***