/raid1/www/Hosts/bankrupt/TCRAP_Public/190308.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Friday, March 8, 2019, Vol. 22, No. 49
Headlines
A U S T R A L I A
BUILD GROUP: First Creditors' Meeting Set for March 15
CROCKETS PTY: First Creditors' Meeting Set for March 15
GRAND PRIX: First Creditors' Meeting Set for March 15
MALPHUS PTY: First Creditors' Meeting Set for March 19
MIIGROUP ADMIN: First Creditors' Meeting Set for March 15
NU TECH: First Creditors' Meeting Set for March 15
PERTH RESTAURANT: Second Creditors' Meeting Set for March 13
PLUTUS PAYROLL: Workers Chasing AUD1MM Not 'Priority Creditors'
SAM'S CARPENTRY: First Creditors' Meeting Set for March 15
C H I N A
FANTASIA HOLDINGS: Moody's Rates Proposed CNH Unsec. Notes 'B3'
GREENLAND GLOBAL: Moody's Rates New USD Sr. Notes 'Ba2'
PANDA TV: May File for Bankruptcy Within This Month
XINHU ZHONGBAO: Moody's Rates Proposed USD Sr. Unsec. Notes 'B3'
XINHU ZHONGBAO: S&P Rates USD Senior Unsecured Notes 'B-'
YESTAR HEALTHCARE: S&P Withdraws BB- LT Issuer Credit Rating
[*] CHINA: Default Risks Rising for SOEs as State Support Weakens
I N D I A
4S SPINTEX: Ind-Ra Migrates 'BB-' Issuer Rating to Non-Cooperating
AGRON LOGISTICS: ICRA Keeps D on INR10cr Debt in Not Cooperating
ARUNODAYA PRINT: Ind-Ra Migrates 'BB' LT Ratings to Non-Cooperating
ARVIND EXPORT: ICRA Withdraws B+ Rating on INR12cr Loan
BALAJI ENTERPRISE: ICRA Hikes Rating on INR6.5cr Loan to B+
DWARKADHISH COTSPIN: ICRA Keeps B+ Ratings on Non-Cooperating
GAJANAN MANTE: ICRA Assigns B+ Rating to INR5.90cr Term Loan
GIRIRAJ INDUSTRIES: ICRA Maintains D Ratings in Not Cooperating
GOKAK SUGAR: ICRA Reaffirms B Rating on INR5.90cr Term Loan
IMPERIAL TUBES: ICRA Keeps D on INR60cr Loans in Non-Cooperating
JAYESH INDUSTRIES: Ind-Ra Affirms 'BB-' Rating on INR87.5MM Loans
JET AIRWAYS: Etihad Hits Pause Button on Rescue Deal
JORBAT SHILLONG: Ind-Ra Lowers Rating on INR6.41BB Senior NCDs to D
JP MOTOR: Ind-Ra Affirms 'BB' LT Issuer Rating, Outlook Stable
KAPSONS ENGINEERS: ICRA Keeps D on INRcr Debt in Not Cooperating
LANCO INFRATECH: IDBI Bank Seeks Bid for Lanco Solar
LEITWIND SHRIRAM: Ind-Ra Maintains 'D' Ratings in Non-Cooperating
M R DIAMOND: Ind-Ra Affirms 'BB' Rating on INR40MM LongTerm Loans
MAHARAJA SATHYAM: ICRA Keeps B on INR5.9cr Debt in Non-Cooperating
MAIL ORDER: ICRA Moves D on INR27.5cr Loans to Not Cooperating
MANI EXPORT: Ind-Ra Hikes Rating on INR300MM Working Capital to BB
NANDINI FITNESS: ICRA Keeps D on INR7cr Debt on Non-Cooperating
NIYATI ENGINEERING: Ind-Ra Moves BB+ Rating to Non-Cooperating
PANCHSHEEL SOLVENT: ICRA Keeps D on INR24cr Debt in Not Cooperating
PIK STUDIOS: ICRA Lowers Rating on INR12cr Cash Loan to D
REAL GROWTH: ICRA Lowers Ratings on INR25cr Loans to D
SARDAR COTTON: ICRA Lowers Rating on INR11.30cr Loan to D
SAROJA RICE: ICRA Withdraws B Ratings on INR10cr Loans
SHARMA CARS: ICRA Reaffirms B+ Rating on INR14cr Term Loan
SILVERLINE INVESTMENTS: ICRA Cuts Ratings on INR12.65cr Loans to D
SOLAPUR BIO-ENERGY: ICRA Reaffirms D Ratings on INR10.30cr Loans
SRI RAMAKRISHNAA: ICRA Keeps B on INR10cr Loans in Not Cooperating
SUNSHOT TECHNOLOGIES: ICRA Assigns B+ Issuer Rating, Outlook Stable
TRIDENT FABRICATORS: Ind-Ra Moves BB- on INR51MM to Non-Cooperating
WOMEN'S NEXT: ICRA Moves D on INR12.5cr Debt to Not Cooperating
J A P A N
DTC TWO: Moody's Hikes JPY850MM Class E Notes Rating to Ba1
M A L A Y S I A
MALAYSIA AIRLINES: Fails to Meet 3-Year Target to be Profitable
N E W Z E A L A N D
RCR ENERGY: Dannevirke Plant to Close, Workers to Lose Jobs
S R I L A N K A
SRI LANKA: Fitch Assigns 'B(EXP)' Rating to USD Bonds
SRI LANKA: S&P Gives B Foreign Currency Rating to USD Unsec. Notes
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A U S T R A L I A
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BUILD GROUP: First Creditors' Meeting Set for March 15
------------------------------------------------------
A first meeting of the creditors in the proceedings of Build Group
NSW Pty Ltd will be held on March 15, 2019, at 11:30 a.m. at Suite
1, Level 15, 9 Castlereagh Street, in Sydney, NSW.
Christopher Damien Darin of Worrells Solvency was appointed as
administrator of Build Group on March 5, 2019.
CROCKETS PTY: First Creditors' Meeting Set for March 15
-------------------------------------------------------
A first meeting of the creditors in the proceedings of Crockets
Pty. Ltd., trading as Camooweal Driveway, will be held on March 15,
2019, at 11:00 a.m. at the offices of Deloitte Financial Advisory
Pty Ltd, at Riverside Centre, Level 23, 123 Eagle Street, in
Brisbane, Queensland.
David Ian Mansfield and Timothy Joseph Heenan of Deloitte Financial
were appointed as administrators of Crockets Pty on March 5, 2019.
GRAND PRIX: First Creditors' Meeting Set for March 15
-----------------------------------------------------
A first meeting of the creditors in the proceedings of Grand Prix
Sailing Pty Ltd will be held on March 15, 2019, at 10:30 a.m. at
the offices of Worrells Solvency & Forensic Accountants, Suite 1,
at Level 15, 9 Castlereagh Street, in Sydney, NSW.
Simon Cathro of Worrells Solvency were appointed as administrators
of Grand Prix on
March 5, 2019.
MALPHUS PTY: First Creditors' Meeting Set for March 19
------------------------------------------------------
A first meeting of the creditors in the proceedings of Malphus Pty
Ltd (As Trustee For The GSD Business Investment Trust) will be held
on March 19, 2019, at 3:30 p.m. at Level 17, 200 Queen Street, in
Melbourne, Victoria.
Timothy James Brace and Peter Gountzos of SV Partners were
appointed as administrators of Malphus Pty on March 6, 2019.
MIIGROUP ADMIN: First Creditors' Meeting Set for March 15
---------------------------------------------------------
A first meeting of the creditors in the proceedings of Miigroup
Admin Pty Ltd will be held on March 15, 2019, at 10:00 a.m. at
Level 11, 127 Creek Street, in Brisbane, Queensland.
Marcus Watters of Jirsch Sutherland was appointed as administrator
of Miigroup Admin on March 5, 2019.
NU TECH: First Creditors' Meeting Set for March 15
--------------------------------------------------
A first meeting of the creditors in the proceedings of Nu Tech
Tiling Pty Ltd will be held on March 15, 2019, at the offices of
Chartered Accountants Australia New Zealand, at Level 18, 600
Bourke Place, in Melbourne, Victoria.
James Koutsoukos and David Coyne of BRI Ferrier were appointed as
administrators of Nu Tech Tiling on March 5, 2019.
PERTH RESTAURANT: Second Creditors' Meeting Set for March 13
------------------------------------------------------------
A second meeting of creditors in the proceedings of Perth
Restaurant Pty Limited, trading as Hurricane's Grill Hillarys Boat
Harbour, has been set for March 13, 2019, at 10:30 a.m. at the
offices of Worrells Solvency & Forensic Accountants, Level 4, at 15
Ogilvie Road, in Mount Pleasant, WA.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the Company
be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by March 12, 2019, at 5:00 p.m.
Mervyn Jonathan Kitay of Worrells Solvency was appointed as
administrator of Perth Restaurant on Feb. 5, 2019.
PLUTUS PAYROLL: Workers Chasing AUD1MM Not 'Priority Creditors'
---------------------------------------------------------------
Doug Dingwall at The Sydney Morning Herald reports that liquidators
of Plutus Payroll said workers chasing almost AUD1 million in
unpaid income are not entitled to payment before others owed
money.
More than 300 workers paid through Plutus Payroll have told
liquidators the company owed them before federal police swooped on
it and charged 10 people, SMH says.
According to SMH, Deloitte Financial Advisory has asked the Supreme
Court of NSW to clear the way for it to deny workers payment before
other creditors, saying many claimants were not Plutus employees
and evidence was lacking to identify others as staff employed by
the company.
Claimants could be out of pocket thousands of dollars once Plutus
is wound up, if the Supreme Court of NSW agrees with liquidators,
SMH notes.
SMH says workers have reported missing payments after the
Australian Federal Police closed the business in May 2017 and
arrested alleged parties to a scheme prosecutors said involved
signing contracts with employers to process gross wages and
entitlements for their contractors, and then skimming taxes.
Of AUD997,000 in claims, workers are chasing AUD557,000 in
superannuation, AUD196,000 in wages and AUD132,000 in salary
sacrifice deductions claimed among other missing payments. An
earlier Deloitte estimate given to the court in September 2017 put
the total claims figure at AUD740,000, saying workers were claiming
an average of AUD3,277, SMH discloses.
SMH relates that the claims are a small fraction of the AUD142
million tallied by liquidators in total, including AUD138 million
from the ATO, as Deloitte winds up Plutus Payroll and a pool of
companies operating underneath it.
Liquidators said before the arrests, Plutus was making payments to
more than 4,500 workers, many using the company as a paymaster and
working at Australian Public Service agencies in Canberra through
labour hire firms.
Investigating whether they were Plutus employees entitled to
payment before other creditors, liquidators found the company
appeared to have treated the workers who directly subscribed to its
services as employees for taxation and superannuation purposes, and
paid their remuneration, SMH relays.
SMH relates that despite searches of the company's records and
statements from workers, liquidator Tim Norman said in an affidavit
sworn in November he could not determine that workers were directly
employed by Plutus, and in other cases found they were not
employees.
Many claimants had signed documents identifying them as both Plutus
employees and contractors without employee status. Further
questioning revealed they were not employed by the company but
labour hire firms or businesses using contractors, Mr. Norman
said.
SMH says Plutus' books and records indicated workers appeared to
have only been paid their wages and entitlements by the payroll
service, and liquidators had found no documents that showed those
workers performed any services for the company or its affiliates.
"None of the workers who supplied information to the liquidators
were directed in the performance of their work by an employee of
the worker companies," SMH quotes Mr. Norman as saying. "None of
the workers who supplied information to the liquidators had ever
attended the worker companies' premises.
"There are missing or incomplete records maintained by the
companies. The directors, former directors and employees have not
adequately explained the relationship between workers and the
companies."
For contractors claiming unpaid income but who didn't respond to
questions from liquidators, Mr. Norman said his team found
documents in the companies' records that did not identify their
employer, SMH relays.
"My team could not locate any documents in respect of some of the
workers and there appears to be a lack of information in the
companies' books and records evidencing their employment by one of
the companies."
The report adds that Deloitte had not gained access to all of
Plutus' books and records, and were told those in the control of
the AFP may be subject to multiple warrants and legal professional
privilege claims.
"There is a lack of information and an apparent inability on the
part of the directors and the former directors of the companies to
explain the companies' affairs including the existence, nature and
amount of any employee claims," Mr. Norman, as cited by SMH, said.
The Supreme Court adjourned the matter until July 9, adds SMH.
About Plutus Payroll
The Plutus Payroll Group of Companies provided payroll services to
various companies.
David Iannuzzi and Vincent Pirina of Veritas Advisory were
appointed as administrators of Plutus Payroll on June 6, 2017.
Tim Norman, Sal Algeri and Eddie Senatore were appointed Joint and
Several Provisional Liquidators of the 10 companies within the
Plutus Group on June 9, 2017 by the Supreme Court of New South
Walesfollowing an application made by the Deputy Commissioner of
Taxation.
On Oct. 9, 2017, the Court ordered that 10 entities be wound up.
They also ordered the winding up of BRW Services Pty Ltd on the
same day.
SAM'S CARPENTRY: First Creditors' Meeting Set for March 15
----------------------------------------------------------
A first meeting of the creditors in the proceedings of Sam's
Carpentry Pty Ltd will be held on March 15, 2019, at 11:00 a.m. at
the offices of Cor Cordis, One Wharf Lane, Level 20, 171 Sussex
Street, in Sydney, NSW.
Andre Lakomy and Ahmed Sowaid of Cor Cordis were appointed as
administrators of Sam's Carpentry on March 6, 2019.
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C H I N A
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FANTASIA HOLDINGS: Moody's Rates Proposed CNH Unsec. Notes 'B3'
---------------------------------------------------------------
Moody's Investors Service has assigned a B3 senior unsecured debt
rating to the proposed CNH senior notes to be issued by Fantasia
Holdings Group Co., Limited (B2 negative).
The company plans to use the proceeds to refinance its existing
indebtedness.
RATINGS RATIONALE
"The proposed notes will not have an immediate impact on Fantasia's
credit metrics, because the proceeds will mainly be used for
refinancing, specifically for the CNH1.6 billion offshore notes
maturing in May 2019," says Celine Yang, a Moody's Assistant Vice
President and Analyst.
In addition, the proposed issuance can address part of Fantasia's
refinancing needs.
Fantasia's B2 corporate family rating (CFR) reflects the company's:
(1) track record in property development in the Chengdu-Chongqing
Economic Zone and the Pearl River Delta; and (2) stable recurring
income from its property management, rental and hotel management
business.
At the same time, Fantasia's CFR is constrained by its: (1) small
scale and high geographic concentration, which will result in a
higher volatility in its performance; and (2) weak financial
management, as shown by its higher reliance on short-term funding.
Moody's expects that Fantasia's revenue/adjusted debt will remain
weak at around 35%-38% in 2019. The slight improvement from 30% for
the 12 months to June 30, 2018 is supported by the company's likely
revenue increase against the contracted sales growth in the past
2-3 years.
Moody's expects that Fantasia's homebuilding EBIT/interest expense
will continue to stay weak at 1.1x-1.2x in 2019, considering the
growth in its debt levels and rising borrowing costs.
These leverage and interest coverage levels position Fantasia at
the weaker end of its B2 CFR, as reflected by the negative outlook
on its CFR.
The negative rating outlook also reflects Moody's concern that
Fantasia's refinancing risk will remain elevated over the next
12-18 months, against the backdrop of its high refinancing needs
and financing costs both onshore and offshore in the same period.
Specifically, the company will have the following onshore and
offshore bonds maturing in 2019 and 1H 2020: USD490 million
offshore senior notes, CNH1.6 billion offshore notes and RMB1.7
billion onshore corporate bonds.
The B3 senior unsecured debt rating is one notch lower than the CFR
due to structural subordination risk.
This risk reflects the fact that the majority of claims are at the
operating subsidiaries. These claims have priority over Fantasia's
senior unsecured claims in a bankruptcy scenario. In addition, the
holding company lacks significant mitigating factors for structural
subordination. As a result, the expected recovery rate for claims
at the holding company will be lower.
Upward ratings pressure is unlikely in the near term, given the
negative ratings outlook.
Nevertheless, Moody's could change Fantasia's negative ratings
outlook to stable if the company: (1) improves its debt maturity
profile and reduces its refinancing risk; and (2) improves its
credit metrics, such that revenue to adjusted debt rises above 40%
and EBIT/interest improves to 1.5x or higher on a sustained basis.
Downward ratings pressure could emerge if Fantasia: (1) fails to
improve its liquidity or refinancing risk heightens; or (2)
contracted sales falls and the company's credit metrics weaken,
with EBIT/interest failing to recover to above 1.5x.
The principal methodology used in this rating was Homebuilding And
Property Development Industry published in January 2018.
Fantasia Holdings Group Co., Limited is a property developer in
China (A1 stable). The company mainly develops three types of
properties: (1) urban commercial complexes; (2) boutique upscale
residences; and (3) mid- to high-end residences.
At June 30, 2018, the company's land bank totaled 11.6 million
square meters in planned gross floor area — excluding a land bank
of about 6.6 million square meters under a framework agreement —
located mainly in the Chengdu-Chongqing Economic Zone and the Pearl
River Delta.
GREENLAND GLOBAL: Moody's Rates New USD Sr. Notes 'Ba2'
-------------------------------------------------------
Moody's Investors Service has assigned a Ba2 rating to the proposed
senior unsecured USD-denominated notes to be issued by Greenland
Global Investment Limited.
The notes will be issued under Greenland Global's medium-term note
(MTN) program ((P)Ba2), which is unconditionally and irrevocably
guaranteed by Greenland Holding Group Company Limited (Ba1
stable).
The rating outlook is stable.
The proceeds from the proposed issuance will be used to refinance
Greenland Holding's existing debt and for general corporate
purposes.
RATINGS RATIONALE
"The new issuance will not have a material impact on its credit
metrics and will slightly extend Greenland Holding's debt maturity
profile, because the proceeds will mainly be used to refinance
existing debt," says Danny Chan, a Moody's Analyst.
Moody's expects Greenland Holding's revenue/adjusted debt will
trend toward 130%-140% over the next 12-18 months from 120% for the
12 months ended 30 June 2018. Its EBIT/interest should improve to
around 3.0x from 2.8x over the same period.
These improvements will be driven by the company's steady
contracted sales growth and slower debt growth in the past 1-2
years, its prudent land acquisition strategy, and its continued
focus on improving its cash collection.
Greenland Holding's contracted sales increased 26% to RMB387
billion in 2018, after growing 20% year-on-year to RMB307 billion
in 2017. However, Moody's expects the company's contracted sales
growth to slow to single digit percentage rates in the next 12
months, given the slowing residential property market in China, in
particular in lower-tier cities.
Greenland Holding's Ba1 corporate family rating (CFR) reflects its:
(1) large scale, nationwide coverage and diversified range of
products in China (A1 stable); (2) growing construction business,
which reduces cyclicality in the property development segment; and
(3) good access to funding due to its state-owned background.
On the other hand, Greenland Holding's rating is constrained by its
weak interest coverage and by the execution risks associated with
its fast growing non-property businesses. However, these concerns
are partly mitigated by the company's improving debt management
over the past 12-18 months.
The Ba2 rating on the proposed notes reflects the risk of
structural subordination, given the fact that the majority of
claims are at the operating subsidiaries and have priority over
claims at the holding company in a bankruptcy scenario. In
addition, the holding company lacks significant mitigating factors
for structural subordination, reducing the likely recovery rate for
claims at the holding company level.
Greenland Holding's rating outlook is stable, reflecting Moody's
expectation that the company will continue to control its debt
growth and pace of land acquisitions, while growing its scale over
the next 12-18 months.
Moody's could upgrade the rating if the company: (1) sustains its
leading position in China's residential market; (2) remains prudent
in its land acquisitions and financial management; and (3) improves
its credit metrics, such that revenue/debt rises above 140% and
EBIT/interest rises above 3.5x on a sustained basis.
On the other hand, the rating will face downward rating pressure if
the company shows: (1) weak sales performance or weak collections
on its sales proceeds; (2) declining profit margins; (3) a sizeable
increase in debt due to aggressive expansion or land acquisitions;
and/or (4) an increase in the risk profile of its non-property
businesses.
Moody's would consider downgrading the rating if the company's
credit metrics weaken, with revenue/adjusted debt below 100%, and
consolidated EBIT/interest coverage below 2.0x-2.5x on a sustained
basis.
A material reduction in the Shanghai government's ownership in
Greenland Holding, which would hurt the company's access to
funding, would also be negative for the rating.
The principal methodology used in this rating was Homebuilding And
Property Development Industry published in January 2018.
Greenland Holding Group Company Limited is a China-based company
and state-controlled enterprise group. The Shanghai State-owned
Assets Supervision and Administration Commission is effectively the
largest shareholder of Greenland Holding. Headquartered in
Shanghai, the company is focused primarily on the real estate
sector, and is also engaged in other businesses, including
construction, finance and auto dealerships.
PANDA TV: May File for Bankruptcy Within This Month
---------------------------------------------------
According to TechNode, The Beijing News, quoting a celebrity
livestreamer's Weibo post, reported livestreaming platform Panda TV
will reportedly shut down its server on March 18 and file for
bankruptcy within the month.
TechNode relates that another widely circulated screenshot showed
that a Panda TV human resource staff member was helping employees
find positions at other companies such as Jinri Toutiao and
Kuaishou.
TechNode says livestreamers on Panda TV lamented the alleged
impending shutdown with a number of them renaming their streams to
"accompany Panda TV for its last days."
Panda TV's potential bankruptcy filing highlights the intense
competition in the Chinese livestreaming market.
Co-founded in 2015 by Wang Sicong, the son of Wanda Group chairman
Wang Jianlin, Panda TV ranked third among game livestreaming
platforms in China by number of daily active users in December
2018, trailing Huya and Douyu, TechNode discloses citing Jiguang, a
data analytics company.
TechNode adds that media outlet Jiemian said the platform was
reportedly in talks with Huya, Douyu, and NetEase in mid-2018 about
a potential acquisition, which never materialized because of Panda
TV's debt of more than CNY700 million.
XINHU ZHONGBAO: Moody's Rates Proposed USD Sr. Unsec. Notes 'B3'
----------------------------------------------------------------
Moody's Investors Service has assigned a B3 senior unsecured rating
to the proposed USD senior notes to be issued by Xinhu (BVI) 2018
Holding Company Limited and unconditionally and irrevocably
guaranteed by Xinhu Zhongbao Co., Ltd. (Xinhu Zhongbao, B2
stable).
The rating outlook is stable.
Xinhu Zhongbao plans to use the proceeds from the proposed notes
mainly to refinance certain of its existing indebtedness and
replenish its working capital.
RATINGS RATIONALE
"The proposed bond issuance will not materially affect its credit
metrics, because the company will mainly use the proceeds to
refinance existing debt," says Celine Yang, a Moody's Assistant
Vice President and Analyst.
Xinhu Zhongbao's B2 corporate family rating reflects the company's
quality and abundant land reserve, acquired at low cost, and the
good gross profit margin for its property development business, as
well as its good access to funding.
On the other hand, the rating is constrained by weak financial
metrics because of its debt-funded investments in various financial
institutions and other businesses, as well as its continued large
upfront capital requirements for its redevelopment projects, which
typically have long development periods of five to eight years
before it collects sales proceeds.
Moody's forecasts that Xinhu Zhongbao's debt leverage — as
measured by revenue/adjusted debt — will remain weak at 24%-25%
in 2019, compared with 23.9% for the 12 months ended June 2018.
Its EBIT/interest, will weaken further to 1.6-1.7x in the coming
12-18 months from around 1.96x for the 12 months ending June 2018
due to its elevated level of debt and increased cost of funding in
a generally tightened funding environment.
Xinhu Zhongbao's liquidity is weak. Its cash balance of RMB 15.5
billion as of June 30, 2018 and cash from property sales will be
insufficient to cover its committed land payment as well as the
RMB14.5 billion in short-term debt due over the 12 months ending
June 30, 2019, its RMB 6.6 billion onshore bond maturing in 2H
2019, and RMB3.5 billion of onshore bonds becoming puttable for the
full year of 2019.
However, Moody's expects that the company will be able to liquidate
its investments to address any maturing debt that are not
refinanced and that its shareholders will be able to address its
own debt payments without any material change in ownership in the
company.
The B3 senior unsecured debt rating is one notch lower than the
corporate family rating due to structural subordination risk. This
risk reflects the fact that the majority of Xinhu Zhongbao's claims
are at its operating subsidiaries and have priority over claims at
the holding company in a bankruptcy scenario. In addition, the
holding company lacks significant mitigating factors for structural
subordination. Consequently, the likely recovery rate for claims at
the holding company will be lower.
The stable ratings outlook reflects Moody's expectation that over
the next 12-18 months, Xinhu Zhongbao will meet its contracted
sales target, successfully refinance its short-term debt, and adopt
a disciplined approach to land acquisitions and financial
investments.
Upward ratings pressure could emerge, if Xinhu Zhongbao improves
its credit metrics and strengthens its financial and debt
management by improving its leverage and lengthening its debt
maturity profile.
Credit metrics that would indicate upgrade pressure include 1)
EBIT/interest coverage above 2.0x-2.5x; and/or 2) revenue/adjusted
debt above 60%-65% on a sustained basis.
The ratings could be downgraded if there is any deterioration in
Xinhu Zhongbao's credit metrics, contracted sales and revenue
growth. The ratings could also be under pressure if the company's
liquidity or access to funding weakens materially as a result of a
deterioration in the financial conditions of the company's largest
shareholder.
Credit metrics that could trigger a downgrade include 1) adjusted
EBIT/gross interest below 1.25x-1.50x; and/or 2) cash/short-term
debt below 1.0x on a sustained basis.
The principal methodology used in this rating was Homebuilding And
Property Development Industry published in January 2018.
Xinhu Zhongbao Co., Ltd. listed on the Shanghai Stock Exchange in
1999. The company is headquartered in Hangzhou and commenced its
first residential property project in Wenzhou, Zhejiang Province,
in early 1990.
Its operations are mainly focused on residential property
development. In addition, the company invests in financial
services, internet and information-related companies, and is also
engaged in commodities trading.
XINHU ZHONGBAO: S&P Rates USD Senior Unsecured Notes 'B-'
---------------------------------------------------------
S&P Global Ratings assigned its 'B-' long-term issue rating to a
proposed issue of U.S.-dollar-denominated senior unsecured notes by
Xinhu (BVI) 2018 Holding Co. Ltd., a subsidiary of Xinhu Zhongbao
Co. Ltd. (B/Stable/--).
Xinhu Zhongbao unconditionally and irrevocably guarantees the
notes. The parent plans to use the proceeds to refinance existing
debt and replenish working capital. The issue rating is subject to
our review of the final issuance documentation.
S&P said, "We rate the notes one notch lower than the issuer credit
rating on Xinhu Zhongbao because the debt is significantly
subordinated to other debt in the company's capital structure. As
of June 30, 2018, Xinhu Zhongbao's capital structure consists of
Chinese renminbi (RMB) 42.5 billion of secured debt and RMB22.6
billion of unsecured debt issued or guaranteed by the company at
the parent level. As such, the secured debt ratio is about 65%,
above our notching-down threshold of 50%.
"We believe the long project cycle and slow execution of urban
development projects in Shanghai will continue to pressure Xinhu
Zhongbao's debt leverage. We forecast the company's debt leverage
will remain high at 13x-15x over the next 12-24 months. The
leverage could gradually improve beyond 2021 after redevelopment
projects in Shanghai are launched and complete. Nonetheless, we
believe Xinhu Zhongbao will control land acquisitions, given its
sufficient land bank to support development for at least the next
three to four years. We also expect the company will remain prudent
in expanding its financial investments."
YESTAR HEALTHCARE: S&P Withdraws BB- LT Issuer Credit Rating
------------------------------------------------------------
S&P Global Ratings withdrew its 'BB-' long-term issuer credit
rating on Yestar Healthcare Holdings Co. Ltd. at the issuer's
request. The outlook was stable at the time of the withdrawal.
[*] CHINA: Default Risks Rising for SOEs as State Support Weakens
-----------------------------------------------------------------
Nikkei Asian Review reports that investors can no longer count on
China's local governments to bail out state-owned companies that
have trouble paying their debts, as a nationwide deleveraging
campaign and tax reforms start to bear fruit.
Nikkei says alarm bells rang late last month when Qinghai
Provincial Investment Group, an aluminum company owned by the
Qinghai government, missed a coupon payment on a $300 million
bond.
While the payment was eventually made with the help of the
company's controlling shareholder -- the Qinghai provincial
government -- the slow rescue indicates that state support is no
longer guaranteed in such cases, analysts said, Nikkei relates.
According to Nikkei, the risk of default in China's state sector --
long considered a safe haven by bond investors -- has increased at
a time when the country is grappling with slowing growth and a
protracted trade war with the U.S.
"Not all Chinese government-related entities can rely on state
support for timely payment of their obligations," analysts at Fitch
Ratings wrote in a recent research note, Nikkei relays. The abrupt
turn of events, they said, could be prompted by Beijing's push to
reduce implicit and explicit guarantees of state companies and
improve market discipline.
According to Nikkei, the government reiterated its determination to
address the pressing issue of debt at China's state-owned companies
during the National People's Congess in Beijing this week.
"We will press ahead the system reform to limit debts of
state-owned companies," Nikkei quotes Lian Weiliang, deputy
director of China's National Development and Reform Commission, as
saying on March 6.
Nikkei, citing latest figures, discloses debt levels of CNY115.65
trillion as of last December, up 8.1% from a year ago. This
represents 64.7% of the CNY178.75 trillion in assets, up by 8.4%,
recorded for the same month.
Only about 20% of onshore corporate defaults last year were made by
state-owned enterprises, even though many of these companies have
higher production costs, weaker competitive positions and are more
leveraged than their private counterparts, Nikkei states.
According to Nikkei, China's economy has long been plagued with
"zombie" companies that can only survive with government support
but which local officials consider vital for local employment and
strategic development. Now, however, officials appear to be
reconsidering whether they should keep such companies alive when
they themselves are facing growing financial pressure, Nikkei
says.
"We have seen a shift in attitudes towards defaults, as the
authorities are keen to expedite the reckoning of bad debt," Nikkei
quotes Carlos Casanova, Asia Pacific economist at credit insurer
Coface, as saying. A major reason for this is Beijing's call for
local governments to tackle zombie enterprises and clean up
nonperforming balance sheets by 2020, he said.
"This means that there will be less support for local SOEs going
forward," Mr. Casanova said. "Investors with exposure to bad debt
owned by local SOEs or local government financing vehicles would be
more exposed to default risks than they have imagined."
Funding an SOE rescue is also becoming costlier as the state sector
faces a wave of debt coming due in 2019, Nikkei says. S&P Global
Ratings data showed that close to CNY1.6 trillion ($238 billion)
worth of debt on the books of so-called local government finance
vehicles will mature by the end of this year, according to Nikkei.
Nikkei notes that the agency downgraded the Qinghai aluminum
producer's credit rating to CCC- with a negative outlook, noting
that the missed payment reflects a potentially weakened commitment
on the part of the government to support the company.
"QPIG's credit quality deteriorated sharply, and it may not be an
exception among ailing SOEs," Nikkei quotes S&P analyst Claire Yuan
as saying.
At the same time, an abrupt end of government support is unlikely,
said Gloria Lu, another S&P analyst, as a large number of SOE
defaults would threaten China's financial stability, Nikkei adds.
Instead, state support will be more selective, according to Wang
Dan, a Beijing-based analyst for the Economist Intelligence Unit.
Ms. Wang expects a polarization in SEOs' credit profiles as
governments become more likely to let smaller zombies die while
keeping the bigger ones afloat, Nikkei relates.
=========
I N D I A
=========
4S SPINTEX: Ind-Ra Migrates 'BB-' Issuer Rating to Non-Cooperating
------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated 4S Spintex India
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 the rating. The rating will now
appear as 'IND BB- (ISSUER NOT COOPERATING)' on the agency's
website.
The instrument-wise rating actions are:
-- INR60.0 mil. Fund-based working capital limit migrated to Non-
Cooperating Category with IND BB- (ISSUER NOT COOPERATING) /
IND A4+ (ISSUER NOT COOPERATING) rating; and
-- INR121.62 mil. Term loan due on February 2026 migrated to Non-
Cooperating Category with IND BB- (ISSUER NOT COOPERATING)
rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
February 27, 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 August 2012, Andhra Pradesh-based 4S Spintex India
is engaged in the manufacturing of carded cotton yarn.
AGRON LOGISTICS: ICRA Keeps D on INR10cr Debt in Not Cooperating
----------------------------------------------------------------
ICRA said the long term rating for INR10.00 crore fund based bank
facilities of Agron Logistics India Private Limited continues to
remain under 'Issuer Not Cooperating' category. The rating is
denoted as "[ICRA]D; ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-based- 10.00 [ICRA]D; ISSUER NOT COOPERATING;
Cash Credit Rating continues to remain in
the 'Issuer Not Cooperating'
category
ICRA has been trying to seek information from the company so as to
monitor its performance, but despite repeated requests by ICRA, the
company's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best available/dated/
limited information on the issuers' performance. Accordingly, the
lenders, investors and other market participants are advised to
exercise appropriate caution while using this rating as the rating
may not adequately reflect the credit risk profile of the company.
In the absence of requisite information, and in line with SEBI's
Circular No. SEBI/HO/MIRSD4/CIR/2016/119, dated November 1, 2016,
ICRA's Rating Committee has taken a rating view based on the best
available information.
Incorporated in 2006, Agron Logistics India Private Limited is
promoted by Mr. Sadanand Pandey. ALIPL is a logistic service
provider primarily engaged in providing full truck load bulk cargo
transportation services on an annual contract basis. The company
operates a fleet of around 500 trucks, out of which 63 trucks are
owned and the remaining are leased by the company. The company also
provides value added services like couriering, freight forwarding
and warehousing to its customers as per their requirements with its
warehouses located across the country.
ARUNODAYA PRINT: Ind-Ra Migrates 'BB' LT Ratings to Non-Cooperating
-------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Arunodaya Print
Pack 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 the rating. The rating will now
appear as 'IND BB (ISSUER NOT COOPERATING)' on the agency's
website.
The instrument-wise rating actions are:
-- INR38.95 mil. Long-term loans due on May 2021 migrated to Non-
Cooperating Category with IND BB (ISSUER NOT COOPERATING)
rating;
-- INR29.50 mil. Fund-based limits migrated to Non-Cooperating
Category with IND BB (ISSUER NOT COOPERARTING) / IND A4+
(ISSUER NOT COOPERATING) rating;
-- INR2.80 mil. Non-fund-based limits migrated to Non-Cooperating
Category with IND A4+ (ISSUER NOT COOPERATING) rating;
-- INR20.00 mil. Proposed term loan migrated to Non-Cooperating
Category with Provisional IND BB (ISSUER NOT COOPERATING)
rating;
-- INR15.00 mil. Proposed fund-based limits migrated to Non-
Cooperating Category with Provisional IND BB (ISSUER NOT
COOPERATING) / Provisional IND A4+ (ISSUER NOT COOPERATING)
rating; and
-- INR1.20 mil. Proposed non-fund-based limits migrated to Non-
Cooperating Category with Provisional IND A4+ (ISSUER NOT
COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
March 19, 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 2004, Arunodaya Print Pack is involved in
multicolor printing and packaging. The company caters to the FMCG,
distillery and pharma industries. The company's registered office
is in Delhi.
ARVIND EXPORT: ICRA Withdraws B+ Rating on INR12cr Loan
-------------------------------------------------------
ICRA has withdrawn the long-term rating of [ICRA]B+ ISSUER NOT
COOPERATING with a Stable outlook assigned to the INR12.00 crore
bank facilities of Arvind Export Solvent Oil Industries (AESOI).
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based 12.00 [ICRA]B+(Stable) ISSUER NOT
Limits COOPERATING; Withdrawn
Rationale
The ratings assigned to Arvind Export Solvent Oil Industries have
been withdrawn at its request based on the no objection certificate
provided by its banker.
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.
Established in 2005, as a partnership firm, Arvind Exports Solvent
Oil Industries is in the business of crushing groundnut seeds to
produce groundnut oil and groundnut oil cake. The firm is also
engaged in solvent extraction of groundnut oil from groundnut oil
cake and refining of raw groundnut oil. The firm's manufacturing
facility is in Rajkot district, Gujarat, which is equipped with 11
expellers with a crushing capacity of 25,000 metric tonnes per
annum (MTPA) of groundnut.
BALAJI ENTERPRISE: ICRA Hikes Rating on INR6.5cr Loan to B+
-----------------------------------------------------------
ICRA has revised the ratings on certain bank facilities of
Balaji Enterprise, as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 6.50 [ICRA]B+(Stable); upgraded
from [ICRA]B(Stable)
Rationale
The rating upgrade factors in the sales ramp up in FY2018 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 coal trading industry, the benefits derived from the
established relationship of promoters with customers and the
proximity of Balaji Enterprise (BE) to raw material sources and
customers by virtue of its presence in Wakaner, Morbi (Gujarat).
The ratings, however, continue to be constrained by the firm's
below-average financial risk profile, marked by thin profit margins
due to low value-adding trading business, leveraged capital
structure and below-average debt coverage indicators in FY2018. The
ratings also factor in the highly fragmented coal trading industry,
which results in intense competition. Moreover, the firm's
profitability is vulnerable to volatility in coal prices.
Nevertheless, the pricing risk is significantly mitigated by the
order-backed procurement.
Outlook: Stable
ICRA expects BE to continue to benefit from the extensive
experience of its promoters in the coal trading 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-then-expected cash accruals delays the debt servicing
obligations; or any major debt-funded capex or lower capital
infusion by the partners or a stretch in working capital cycle
weakens the company's liquidity.
Key rating drivers
Credit strengths
Experience of promoters in coal trading industry: The key promoter,
Mr. Kalyanji Panchotiya, has an experience of more than five years
in the coal trading industry vide his association with an associate
concern in the similar industry. The established relation of
promoters with customers ensures revenue stability to the firm.
Location-specific advantage: The firm benefits in terms of lower
transportation costs and easy access to customers (tile
manufacturers) and suppliers.
Credit challenges
Small-scale operation: In its first full year of operation, BE
achieved revenue of INR34.81 crore in FY2018, though the scale of
operation remained small. In 9MFY2019, the firm reported revenue of
INR38.77 crore and is estimated to achieve revenue of INR~49-50
crore by the end of FY2019.
Below-average financial risk profile: The firm's financial risk
profile is expected to remain below-average in the near to medium
term as the low net-worth base and the high debt incurred to fund
the high working capital requirement resulted in a leveraged
capital structure. The gearing of the firm is estimated to remain
~2.70 times, DSCR of ~1.40 times and Total debt/OPBIDTA of ~6.80
times in FY2019.
Intense competition in coal trading business: The firm trades in
imported Indonesian coal. The coal trading industry is highly
fragmented with presence of many organised and unorganised players
due to low entry barriers. Limited value addition in trading
activities restricts pricing flexibility and hence exerts pressure
on the firm's profit margins.
Vulnerability of profitability to fluctuations in coal prices: The
firm's sales realisation is primarily affected by the prevailing
price of coal in the international market. Although, BE maintains
an inventory of ~30 days, a significant number of procurement is
order backed, which mitigates risk associated with adverse
fluctuations in coal price to some extent.
Liquidity position
The firm's liquidity position has remained average as reflected in
the negative free cash flow in FY2018 and almost full utilisation
of working capital requirements. This is mainly on account of thin
profit margins and incremental working capital requirements due to
elongated receivables. Going forward, BE's liquidity will depend on
the firm's ability to generate adequate cash accruals and enhance
its working capital limit. Moreover, the ability of partners to
bring in sufficient unsecured loans will also be closely
monitored.
Established in September 2016 as a partnership firm, Balaji
Enterprise is into coal trading and grading business. BE's
warehouse is situated at Wankaner (Gujarat). It procures coal of
0-50-millimetre (mm) dimension, which is then graded into three
different dimensions - 0-6 mm, 6-20 mm and 20-50 mm - and supplied
to customers based on their requirements.
DWARKADHISH COTSPIN: ICRA Keeps B+ Ratings on Non-Cooperating
-------------------------------------------------------------
ICRA said the ratings for the INR67.14 crore bank facilities of
Dwarkadhish Cotspin Private Limited continues to remain under
'Issuer Not Cooperating' category. The ratings are denoted as
"[ICRA]B+(Stable)/A4 ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term loan 49.70 [ICRA]B+ (Stable); ISSUER NOT
COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Working capital 14.00 [ICRA]B+ (Stable); ISSUER NOT
limits COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Short term Non 3.44 [ICRA]A4; ISSUER NOT
fund based COOPERATING; Rating continues
limits to remain under 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best available and
limited information on the issuers' performance. Accordingly, the
lenders, investors and other market participants are advised to
exercise appropriate caution while using this rating as the rating
may not adequately reflect the credit risk profile of the entity.
Dwarkadhish Cotspin Private Limited (DCPL) was incorporated in May
2011 by Mr. Deepak Patel along with other directors. The company is
engaged in spinning of cotton yarn and is based at Surendranagar,
Gujarat. Before setting up of cotton spinning plant,the promoters
were involved in ginning and pressing of raw cotton as well as
crushing of cottonseeds to produce cottonseed oil through another
concern by the name of Shree Jaydeep Ginning Factory. Looking to
the future demand and availability of raw material the promoters
had planned for forward integration by setting up spinning unit to
manufacture 30s, 32s and 40s combed hosiery yarn. Dwarkadhish
Cotspin Private limited had installed 14688 spindles and expanded
further by installing 10,000 additional spindles capable of
manufacturing 30s, 32s and 40s compact combed hosiery yarn. The
commercial production from newly installed spindles commenced from
October 12, 2015. DCPL has generated revenue mainly through sale in
domestic market. The major customers of DCPL are based out of
Gujarat. DCPL is not directly involved in exports but sells through
merchant exporters.
GAJANAN MANTE: ICRA Assigns B+ Rating to INR5.90cr Term Loan
------------------------------------------------------------
ICRA has assigned rating to the bank facilities of Gajanan Mante
And Sadanand Patil, as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-based-
Term Loan 5.90 [ICRA]B+ (Stable); Assigned
Rationale
While assigning the rating, ICRA has taken a consolidated view of
the three entities - Gajanan Mante And Sadanand Patil (AOP) and the
two proprietary firms, Sadanand Laxmanrao Patil (SLP) and Gajanan
Uttamrao Mante (GUM), (referred together as the Apratim Group). All
three entities together are executing a single project, Lake City
Pali (Phase 1), and share a common management.
The assigned rating is constrained by the exposure to selling risk
for the unsold portion of the project and its vulnerability to
lower than anticipated sales realisations. The same may impact the
profitability and cash flows, especially in view of significant
repayments due in the near term. The rating also factors in the
funding risk, given that the balance project cost is to be met from
customer advances, which are ultimately contingent upon the timing
of bookings and collections from customers. The rating also factors
in the exposure to competition from other ongoing projects in the
vicinity.
Nonetheless, the rating favourably takes into account the extensive
experience of the Apratim Group in executing real estate projects
across varied locations. ICRA also notes the favourable location of
the project, in proximity to key metros.
Outlook: Stable
ICRA expects the Group to continue to benefit from the extensive
experience of its promoters in the real estate industry and
favourable location of the ongoing project. The outlook may be
revised to Positive if substantial growth in bookings and sales
realisations, coupled with faster collections of customer advances,
improves the profitability and cash flows for the project. The
outlook may be revised to Negative if a slower pace of bookings and
weak collection of customer advances lead to cash flow mismatches
and weaken the liquidity profile, given the high impending
repayments.
Key rating drivers
Credit strengths
Extensive experience of the promoters in the real estate industry:
The AOP is a part of the Pune-based Apratim Group, which has
executed several residential projects in and around the city. The
promoters, Mr. Sadanand Patil and Mr.Gajanan Mante, have a vast
experience of around 30 years in the real estate sector. Since
FY2005, the Apratim Group has developed ~6,00,000 square feet of
area.
Favourable project location: The Lake City Pali project is located
near Khopoli in Raigad District of Maharashtra. It comprises a mix
of 1 BHK (Bedroom, Hall Kitchen), 2 BHK and 3 BHK housing units
totaling to 215 units, along with 42 commercial units, to be
executed in three phases at a project cost of around INR68.00
crore. The first phase involves the construction of 92, 1BHK units,
at total project cost of INR20.17 crore. The project is located in
proximity to the leading cities of Mumbai, Pune and Navi Mumbai, at
the foothills of the Sahaydri range, improving its acceptability as
a second home/weekend home. Lake City Pali Phase I is RERA
registered and has the necessary approvals in place entailing low
regulatory risks.
Credit challenges
Exposure to selling risk for the unsold area: As of November 30,
2018, the Group had sold ~65% of the total saleable area of the
Lake City Pali: Phase 1 project. The project remains exposed to
selling risks for the remaining 35% of the unsold area, amid
competition from similar projects in the vicinity. The average
sales realisations for the area sold till November 30, 2018 stood
at INR2,800/sq. ft. as against the expected sales realisation of
INR3,275/sq. ft. Thus, improvement in sales realisation for the
unsold area would be crucial for achieving the desired sales and
profitability levels.
Exposure to execution and funding risk for the remaining project
work: As of November 30, 2018, around 77% of the total project
cost, i.e., INR15.48 crore, was incurred by the Group. This was
largely met through customer advances of INR10.80 crore and the
rest through a term loan. The remaining cost of INR4.69 crore is to
be met mainly through customer advances, which are ultimately
contingent upon the timing of bookings and collections from
customers. Healthy collections as well as remunerative realisations
for the balance 35% of the saleable area as on November 30, 2018,
will remain crucial for the progress of the project.
High ongoing debt repayments: The repayment of term loan of Rs 9.00
crore availed for the project has already commenced from January
2018 and is quite sizeable at Rs 0.38 crore per month. Given the
high impending debt repayments, healthy improvement in sales
booking and faster collection of customer advances will remain the
critical to avoid cash flow mismatches and ensure timely debt
servicing.
Liquidity Position:
The balance project cost of INR4.69 crore as on November 30, 2018
as well as the debt outstanding of INR4.68 crore are to be met
through pending receivables from the sold area and unsold
inventory, which cumulatively stood at INR9.09 crore, indicating a
tight liquidity position. Thus, adequate sales bookings and timely
realisation of customer advances will be crucial for timely
servicing of debt obligations. Any funding gap is expected to be
met through infusion of funds by promoters.
Group Companies: Gajanan Mante, Sadanand Patil
The rating assigned factors in the reasonable likelihood of the
Group firms supporting the AOP, given their close financial
linkages and common management Consolidation / Standalone
Consolidation: ICRA has taken a consolidated view of the three
firms, Gajanan Mante and Sadanand Patil (AOP), Sadanand Laxmanrao
Patil (proprietorship firm) and Gajanan Uttamrao Mante
(proprietorship firm)
Incorporated in 2016, Gajanan Mante and Sadanand Patil is an
association of person (AOP), which was formed to carry out the
construction of the residential real estate project, Lake City at
Pali, in Raigad district of Maharashtra. The sales activity for the
project is being undertaken by two proprietorship firms of the
promoters, Mr. Gajanan Uttamrao Mante and Mr. Sadanand Laxmanrao
Patil. The AOP and the two proprietorship firms are part of the
Pune-based Apratim Group, which has developed over ~6,00,000 square
feet of area since FY2005. The Lake City Pali project is located
near Khopoli in Raigad District of Maharashtra. It comprises a mix
of 1 BHK (Bedroom, Hall Kitchen), 2 BHK and 3 BHK housing units
totaling to 215 units, along with 42 commercial units, to be
executed in three phases at a project cost of around INR68.00
crore. The first phase involves the construction of 92, 1BHK units,
at total project cost of INR20.17 crore.
In FY2018, the AOP on standalone basis, reported a net profit of
INR0.29 crore on an operating income of INR3.72 crore, as compared
to a net profit of INR0.23 crore on an operating income of INR2.80
crore in the previous year.
GIRIRAJ INDUSTRIES: ICRA Maintains D Ratings in Not Cooperating
---------------------------------------------------------------
ICRA said the ratings for the INR17.00-crore bank facilities of
Giriraj Industries continue to remain under 'Issuer Not
Cooperating' category. The rating is now denoted as "[ICRA]D;
ISSUER NOT COOPERATING" for the bank facilities of the company.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based- 1.20 [ICRA]D; ISSUER NOT COOPERATING;
Term Loan Rating continues to remain under
'Issuer Not Cooperating' category
Fund based- 13.80 [ICRA]D; ISSUER NOT COOPERATING;
Cash Credit Rating continues to remain under
'Issuer Not Cooperating' category
Fund based- 2.00 [ICRA]D; ISSUER NOT COOPERATING;
Demand Loan Rating continues to remain under
Against 'Issuer Not Cooperating' category
Warehouse
Receipt
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best available/dated/
limited information on the issuers' performance. Accordingly the
lenders, investors and other market participants are advised to
exercise appropriate caution while using this rating as the rating
may not adequately reflect the credit risk profile of the entity.
Established in 1996, Giriraj Industries (GI) is engaged in
processing of raw cotton to produce cotton bales and cotton seeds
as well as trading of related commodities like cotton seed oil and
cotton seed oil cakes. The firm has a manufacturing unit in
Manavadar, Gujarat and is equipped with thirty ginning machines and
one manual pressing machine with a capacity to process 36 MT of raw
cotton per day.
GOKAK SUGAR: ICRA Reaffirms B Rating on INR5.90cr Term Loan
-----------------------------------------------------------
ICRA reaffirmed ratings on certain bank facilities of
Gokak Sugar Limited's (GSL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-based
Term Loan 5.90 [ICRA]B (Stable); reaffirmed
Rationale:
The ratings reaffirmation takes into account GSL weak financial
risk profile due to high sugarcane cost, which coupled with subdued
sugar prices resulted in modest profitability and weak liquidity
position for the company. The rating is further constrained by the
weak capital structure and modest expected debt coverage indicators
for the company. While the recent support measure taken by the
Government of India (GoI) related to fixing of minimum sugar price
(MSP) at INR31,000/MT (which has been recently increased from
earlier announced level of INR29,000/MT in June 2018) may result in
some recovery in sugar prices, the overall debt protection
indicators for the company are expected to remain subdued owing to
high cane procurement cost. The ratings are further constrained by
risks associated with the inherent cyclicality in the sugar
business; the agro-climactic conditions related to cane production;
the pricing and offtake of cogeneration power; and counterparty
credit risk associated with the sale of power to the utility in
Karnataka.
The rating positively takes into account the parentage of Shree
Renuka Sugars Limited (SRSL) which has a 93% equity stake in the
company. The rating also favourably considers the forward
integration of the company's sugar business into co-generation
operations which negates the sugar cyclicality to some extent.
Outlook: Stable
The stable outlook reflects ICRA's expectation that sugar prices
will remain stable in the near term supported by the recent
government initiatives. The outlook may be revised to Positive if
the sugar production estimates for SY2019 are lowered and if
support measures are implemented successfully, resulting in
favourable supply-demand dynamics, which in turn would result in
higher sugar prices. The outlook may be revised to Negative in case
of any significant increase in the cane procurement cost impacting
the sugar contribution margins or in case of any significant
increase in leveraging levels of the company.
Key rating drivers
Credit strengths
Subsidiary of SRSL, which is one of the largest sugar manufacturers
in the country: The company is a subsidiary of SRSL
([ICRA]BBB+(Stable) /A2), which is one of the largest private
sector sugar manufacturers in the country, with a combined crushing
capacity of about 42,000 TCD located in the states of Maharashtra
and Karnataka. SRSL has been one of the first mills to be fully
forward integrated into distillery and co-generation operations.
The distillery capacity for the company stands at 930 KLPD (630
KLPD from molasses to ethanol and 300 KLPD from rectified spirit to
ethanol). The company has a total co-generation capacity of 584 MW
with a total exportable surplus of 356 MW. The company also carries
out refining activity, i.e. conversion of raw sugar to white sugar,
from its 2,500 TPD unit at Haldia (West Bengal) and 3,000 TPD unit
at Kandla (Gujarat).
Forward integration negates sugar cyclicality to some extent: The
company operates a 14-MW co-generation unit through which it sells
power to Hubli Electricity Supply Company Limited (HESCOM) through
a PPA signed between the two entities. The company's co-generation
unit utilises bagasse as fuel, which is generated as a by-product
during the sugar manufacturing process. As the fuel is available
in-house, the profitability levels of the co-generation unit are
healthy, and this protects the company's overall profitability from
the sugar cyclicality to some extent.
Government's measure to support sugar prices and sugar mills'
liquidity: In June 2018, GoI announced support measures for the
sugar industry, which included creation of 3 million MT of buffer
stock, fixation of MSP at INR29,000/MT (increased further to
INR31,000/MT in February 2019) and incentives for setting up of
distillery capacities. This helped in recovery of sugar prices from
lows of INR26,500/MT in May 2018.
Credit challenges
Weak financial risk profile owing to high cane procurement cost and
subdued sugar realisations: In SY2018, the contribution margins
have become negative resulting in net cash losses for the company
even after increase in scale of operations. This is mainly due to
low sugar realizations faced by the sugar industry in SY2018
coupled with high sugarcane prices including a hike of INR200/MT in
FRP1 of sugarcane taking its price to INR2750/MT in July 2018.
High working capital intensity characterised by high inventory
holdings: As inherent in the sugar business, the company's working
capital intensity remains high because of high inventory holdings.
High leveraging levels owing to reliance on working capital
borrowings: The company's leveraging levels remain high owing to
high reliance on working capital borrowings that are closer to the
peak levels as on March owing to the seasonal nature of the
business. Any significant increase in the working capital
borrowings owing to higher than expected sugar inventory levels
remains a key monitorable.
Exposure to counterparty credit risk of HESCOM: Cogeneration
operations of the company are exposed to counterparty credit risks
pertaining to the HESCOM, being the sole offtaker.
Exposure to agro-climatic risks and cyclical trends in sugar
business; vulnerability to Government/regulatory policies:
Profitability of sugar mills remain vulnerable to the cyclical
nature of the sugar industry, agro-climatic risks related to cane
production, geographical-concentration risks arising out of
single-mill operations of GSL and Government policies on import and
export of sugar.
Liquidity position
The liquidity profile of the company remains stretched as evident
from pending cane farm dues and subdued free cash balances.
GSL, incorporated in 2000, is a Belgaum (Karnataka) based sugar
manufacturing company with a 4200 TCD cane crushing plant. The
plant is forward integrated with a 14 MW co-generation unit. The
company was initially setup by local promoters; subsequently SRSL
acquired 87% stake in the company in October 2008 for INR69.3 crore
funded largely through external debt. SRSL has gradually increased
its equity holding in GSL to about 93.64% as on date with the
remaining equity held by one of the original promoters.
IMPERIAL TUBES: ICRA Keeps D on INR60cr Loans in Non-Cooperating
----------------------------------------------------------------
ICRA said the ratings for the bank facilities of Imperial Tubes
Private Limited (ITPL) continue to remain in the 'Issuer Not
Cooperating' category. The ratings are denoted as "[ICRA]D; ISSUER
NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based- 50.00 [ICRA]D ISSUER NOT COOPERATING;
Open Cash Rating continues to remain
Credit under 'Issuer Not Cooperating'
category
Non Fund Based- 5.00 [ICRA]D ISSUER NOT COOPERATING;
Bank Guarantee Rating continues to remain
under 'Issuer Not Cooperating'
category
Non Fund Based- 5.00 [ICRA]D ISSUER NOT COOPERATING;
Inland Letter Rating continues to remain
of Credit 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 1978, ITPL is currently engaged in the
manufacturing of electric resistance welded (ERW) black pipes with
an installed capacity of 120,000 metric tonnes per annum (MTPA).
The manufacturing facility of the company is located in Howrah,
West Bengal. The company is being managed by the two directors Mr.
Pratik Sharma and Mr. Manish Sharma, who had taken over the
business from the original promoters in December 2013. The pipes
manufactured by the company have varied applications like
irrigation, water supply, sewerage system, fabrication,
construction activity, idlers/ conveyors, water wells (casing
pipes) etc. and are sold under the brand name of 'Imperial'.
JAYESH INDUSTRIES: Ind-Ra Affirms 'BB-' Rating on INR87.5MM Loans
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed and withdrawn
Jayesh Industries Limited's (JIL) Long-Term Issuer Rating of 'IND
BB-'. The Outlook was Stable.
The instrument-wise rating actions are:
-- The 'IND BB-' rating on the INR87.5 mil. Fund-based
facilities* affirmed and withdrawn;
-- The 'IND A4+' rating on the INR10.0 mil. Standby line of
credit# affirmed and withdrawn;
-- The 'IND A4+' rating on the INR52.0 mil. Non-fund-based
working capital facilities# affirmed and withdrawn; and
-- INR30.0 mil. Proposed long-term loans were withdrawn (the
company
did not proceed with the instrument as envisaged).
*Affirmed at 'IND BB-'/Stable/'IND A4+' before being withdrawn
#Affirmed at 'IND A4+' before being withdrawn
KEY RATING DRIVERS
The affirmation reflects JIL's continued small scale of operations,
as indicated by revenue of INR551.0 million in FY18 (FY17: INR464.0
million). The revenue improved on a yoy basis because of an
increase in orders. Also, the company had booked sales of only
INR314.08 million until December 2018.
Further, the ratings reflect the continued weak credit metrics due
to modest EBITDA margins. JIL's interest coverage (operating
EBITDA/gross interest expense) improved to 1.5x in FY18 (FY17:
1.4x) due to a decline in interest expenses. However, its net
financial leverage (total adjusted net debt/operating EBITDA)
remained high at 10.6x (9.5x) on account of the increase in debt.
The return on capital employed stood at 5% in FY18 (FY17: 7%) and
the EBITDA margin was modest at 4.5% (5.4%).
The ratings are also constrained by the intense competition in the
welding electrode industry
The rating factor in the cash flow from operations of INR45 million
in FY18 (FY17: INR32 million) and the free cash flow of negative
INR31 million (negative INR49 million).
The ratings are supported by the promoters' experience of over five
decades in the welding electrode manufacturing industry, which has
led to longstanding relationships with customers and suppliers.
Ind-Ra is no longer required to maintain the ratings, as the agency
has received a no objection certificate from the lender. This is
consistent with the Securities and Exchange Board of India's
circular dated 31 March 2017 for credit rating agencies.
COMPANY PROFILE
JIL was incorporated in 1992. The company is engaged in the
manufacturing, imports, and exports of ferroalloys, metals,
minerals, and chemicals, and steel strips. These products are used
in the welding electrode industry, wear plate manufacturing,
railways, automotive companies, flux-cored wires, and glass and
allied industries. The day-to-day operations of the company are
managed by Mr. Jayesh Shah.
JET AIRWAYS: Etihad Hits Pause Button on Rescue Deal
----------------------------------------------------
LiveMint reports that seen as the white knight for ailing Jet
Airways (India) Ltd, Etihad Airways PJSC seems to have hit the
pause button on equity infusion talks and has sought clarity on
several contentious issues, two people familiar with the matter
said, requesting anonymity.
LiveMint relates that the recent developments are part of the
ongoing negotiations between the two companies and, if the talks
fall through, it is expected to cast a shadow on the prospects of
Jet Airways' revival. The airline continues to fight concerns and
allay fears of its employees, pilots and investors.
According to LiveMint, citing people familiar with the matter,
Etihad has not been able to find a local partner to replace Jet's
founder-chairman Naresh Goyal, who will have to step down if Etihad
invests in the airline.
Foreign direct investment (FDI) rules allow a foreign carrier to
own up to a 49% stake in a domestic airline but mandate that it
must have a local partner to service passengers in India, the
report says.
LiveMint relates that Etihad also wants an exemption from the open
offer that may be triggered if the ownership structure of the
company changes after Goyal's exit. Most importantly, it wants a
commitment from banks on additional loans, once it infuses equity
into the company, as the Abu Dhabi-based airline expects that Jet
Airways will require more funds to sustain its operations.
Etihad's board is expected to meet next week to discuss the
potential investments, including the likely exit of Indian lenders
who are expected to convert a large part of their debt into equity,
making them the largest shareholder, people familiar with the
matter said, LiveMint relays.
"The banks cannot remain invested in Jet Airways infinitely and
they will need to find a buyer for their stake. So far all efforts
to find an Indian partner who can replace current promoter Naresh
Goyal have come to naught," LiveMint quotes one of its sources as
saying. Etihad and the Indian banks have reached out to several
large business groups in India, but none were willing to commit, he
said.
NRI billionaire and founder of UAE's Lulu Group, M.A. Yusuf Ali,
who had initially evinced interest in Jet Airways, has decided
against it. India's Adani Group, which was also approached by
Etihad for an investment, also declined the offer, LiveMint notes.
About Jet Airways
Based in Mumbai, India, Jet Airways (India) Limited --
https://www.jetairways.com/ -- provides passenger and cargo air
transportation services. It also provides aircraft leasing
services. It operates flights to 66 destinations in India and
international countries. As of November 22, 2018, the company had a
fleet of 124 aircraft, comprising Boeing 777-300 ERs, Airbus
A330-200/300, the latest Boeing 737 Max 8, Next Generation Boeing
737s, and ATR 72-500/600s.
As reported in the Troubled Company Reporter-Asia Pacific on Dec.
28, 2018, ICRA revised the ratings on certain bank facilities of
Jet Airways (India) Limited to [ICRA]C from [ICRA]B. The rating
downgrade considers delays in the implementation of the proposed
liquidity initiatives by the management, further aggravating its
liquidity, as reflected in the delays in employee salary payments
and lease rental payments to the aircraft lessors. Moreover, the
company has large debt repayments due over the next four months
(December-March) of FY2019 (INR1,700 crore), FY2020 (INR2,444.5
crore) and FY2021 (INR2,167.9 crore). The company is undertaking
various liquidity initiatives, which includes, among others, equity
infusion and a stake sale in Jet Privilege Private Limited (JPPL),
and the timely implementation of these initiatives is a key rating
sensitivity. Moreover, the company continues to witness a stress
in its operating and financial performance.
JORBAT SHILLONG: Ind-Ra Lowers Rating on INR6.41BB Senior NCDs to D
-------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has downgraded the rating on
Jorbat Shillong Expressway Limited's (JSEL) senior and subordinated
non-convertible debentures (NCDs) to 'IND D (SO)' from 'IND B (SO)'
while resolving the Rating Watch Negative (RWN) as follows:
-- INR6.412 bil. Senior NCDs* rating downgraded; Off RWN with IND
D (SO) rating; and
-- INR2,421.6 bil. Subordinate NCDs* rating downgraded; Off RWN
with IND D (SO) rating.
* Details in Annexure
KEY RATING DRIVERS
The rating downgrade is on account of the non-payment of debt
service obligations due on March 1, 2019, to the debenture holders.
As on February 13, 2019, the company had liquidity of INR1,247
million in mutual funds and INR51 million in cash and bank balance.
These amounts include a debt service reserve of INR595 million and
a major maintenance reserve of INR58 million, as required by the
agreements, and a construction reserve of INR150 million. According
to the company, the pending project work would require additional
funding of about INR50 million.
JSEL has been classified under the 'Amber' category according to
the National Company Law Appellate Tribunal order dated 12 February
2019, which defines 'Amber Entities as Domestic Group Entities
which are not able to meet all their obligations (financial and
operational), but can meet only operational payment obligations and
payment obligations to senior secured financial creditors.'
RATING SENSITIVITIES
Positive: Timely debt servicing for consecutive three months will
result in an upgrade.
COMPANY PROFILE
JSEL is an 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.
JP MOTOR: Ind-Ra Affirms 'BB' LT Issuer Rating, Outlook Stable
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed JP Motor Private
Limited's (JPML) Long-Term Issuer Rating at 'IND BB'. The Outlook
is Stable.
The instrument-wise rating actions are:
-- INR114.53 mil. (increased from INR91 mil.) Fund-based limit
affirmed with IND BB/Stable rating; and
-- INR5.47 mil. (reduced from INR9 mil.) Term loan due on August
2022 affirmed with IND BB/Stable rating.
KEY RATING DRIVERS
The affirmation reflects JPMPL's continued small scale of
operations, as indicated by revenue of INR494 million in FY18
(FY17: INR450 million). The revenue rose due to an increase in
two-wheeler sales in Lucknow.
Additionally, the company continues to have a moderate credit
profile. The interest coverage (operating EBITDA/gross interest
expense) improved to 1.5x in FY18 (FY17:1.2x) and net leverage
improved to 8.2x (8.6x) as the operating EBITDA increased to
INR17.5 million (INR13.3 million), while the interest expenses
remained the same. The RoCE remained flat at 9% in FY18, and the
EBITDA margin stood at a modest 3.6% (FY17: 3.0%) due to JPMPL's
limited geographical reach. The margin increased because of
favorable implications of the goods and services tax.
The ratings are constrained by the company's tight liquidity
position, with 93.66% average use of fund-based limits during the
12 months ended November 2018. JPMPL's cash flow from operations
turned negative at INR5.51 million in FY18 (FY17: INR7.98 million),
and its cash and cash equivalent stood at INR6.04 million (INR3.87
million). Also, the company's net working capital cycle lengthened
to 49 days in FY18 (FY17: 33 days) due to an increase in inventory
days.
The ratings, however, benefit from the founder's experience of more
than a decade in the automobile industry.
RATING SENSITIVITIES
Negative: A decline in the operating EBITDA margin, leading to
deterioration in the net financial leverage and interest coverage,
all on a sustained basis, will be negative for the ratings.
Positive: A substantial rise in revenue, along with an improvement
in the overall credit profile, all on a sustained basis, will be
positive for the ratings.
COMPANY PROFILE
Incorporated in 2006, JPMPL is an authorized dealer of Honda
two-wheelers in Lucknow. It was incorporated by Mr. Manoj Agarwal.
JPMPL has a network of six sub-dealers.
KAPSONS ENGINEERS: ICRA Keeps D on INRcr Debt in Not Cooperating
----------------------------------------------------------------
ICRA said the rating for the INR20-crore bank facilities of Kapsons
Engineers Private Limited (KEPL) continues to remain under 'Issuer
Not Cooperating' category. The ratings are denoted as [ICRA]D;
ISSUER NOT COOPERATING.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 20.00 [ICRA]D; ISSUER NOT COOPERATING;
Fund Based Continues to remain under the
'Issuer Not Cooperating'
Category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best available and
limited information on the issuers' performance. Accordingly the
lenders, investors and other market participants are advised to
exercise appropriate caution while using this rating as the rating
may not adequately reflect the credit risk profile of the entity.
Incorporated in 2007, Kapsons Engineers Private Limited (KEPL) is
an authorised dealer for passenger vehicles of Honda Cars India
Ltd. The company is promoted by the Kapoor family, with Mr. Jawahar
Lal Kapoor and Mr. Atul Kapoor (son of Mr. Jawahar Lal Kapoor)
serving as the directors of the company. KEPL's customers are
majorly based of Gurgaon and Noida.
LANCO INFRATECH: IDBI Bank Seeks Bid for Lanco Solar
----------------------------------------------------
Financial Express reports that Deloitte Touche Tohmatsu India, on
behalf of IDBI Bank, has invited expressions of interest (EoIs) for
the sale of a 30-megawatt (MW) solar power project in Patan,
Gujarat, owned and operated by Lanco Solar (Gujarat) (LSGPL),
according to a public notice. The plant's total debt outstanding as
on October 8, 2018, stood at INR346 crore. IDBI is the only lender
to the project, the report says.
"IDBI Bank (IDBI or the lender), being the sole lender of the
company has been authorised on behalf of the company to supervise
the process of divestment of business undertaking on its own or
through the authorised agent and it has appointed Deloitte Touche
Tohmatsu India (DTTILLP), to act as the process advisor in relation
to the aforesaid process," Deloitte, as cited by FE, said in the
notice. The last date for submission of EoIs is March 15.
LSGPL is a fully-owned subsidiary of Lanco Infratech, which is
being liquidated under the corporate insolvency resolution process
(CIRP), FE discloses. Lanco Infratech had been referred to the
insolvency tribunal by IDBI Bank after the Reserve Bank of India
(RBI) in 2017 named it among the 12 largest non-performing assets
(NPAs) that banks were to resolve through the insolvency route.
As reported in the Troubled Company Reporter-Asia Pacific on Oct.
29, 2018, CARE Ratings revised ratings on INR346.06 crore long term
bank facilities of Lanco Solar to CARE D from CARE B, Stable.
About Lanco Infratech
Lanco Infratech Ltd was originally incorporated in 1993 as Lanco
Constructions Ltd in Secunderabad, Telengana; its name was changed
in 2000. The company provides Engineering, Procurement and
Construction (EPC) services, largely to its own subsidiaries
and affiliate entities. The Lanco group includes subsidiaries and
affiliates operating across the infrastructure sector, including
construction, power, EPC, infrastructure, and property development.
LITL is the Lanco group's flagship company.
NCLT had initiated insolvency resolution for Lanco on August 7,
2017, based on a petition filed by the company's lead lender IDBI
Bank, Business Standard disclosed. Lanco has a debt of over
INR10,000 crore at the holding company level while the
consolidated debt was more than INR40,000 crore, according to
Business Standard.
LEITWIND SHRIRAM: Ind-Ra Maintains 'D' Ratings in Non-Cooperating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained Leitwind Shriram
Manufacturing Limited's Long-Term Issuer Rating in the
non-cooperating category. The issuer did not participate in the
rating exercise despite continuous requests and follow-ups by the
agency. Therefore, investors and other users are advised to take
appropriate caution while using the rating. The rating will
continue to appear as 'IND D (ISSUER NOT COOPERATING)' on the
agency's website.
The instrument-wise rating actions are:
-- INR2,465.9 bil. Term loans (long-term) due on March 31, 2024
maintained in Non-Cooperating Category with IND D (ISSUER NOT
COOPERATING) rating;
-- INR1,900.0 bil. Fund-based working capital facilities (long-
and short-term) maintained in Non-Cooperating Category with
IND D (ISSUER NOT COOPERATING) rating; and
-- INR1,620.1 bil. Non-fund-based working capital facilities
(long- and short-term) maintained in Non-Cooperating Category
with IND D (ISSUER NOT COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
January 4, 2017. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Leitwind Shriram Manufacturing, a joint venture between
Chennai-based Shriram Industrial Holdings Limited and Italy-based
WindFin BV, manufactures wind turbine generators.
M R DIAMOND: Ind-Ra Affirms 'BB' Rating on INR40MM LongTerm Loans
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed M R Diamond's
(MRD) Long-Term Issuer Rating at 'IND BB'. The Outlook is Stable.
The instrument-wise rating actions are:
-- INR140.0 mil. (increased from INR120.0 mil.) Fund-based limits
affirmed with IND BB/Stable/IND A4+ rating; and
-- INR40.0 mil. Long-term loans due on November 2023 assigned
with IND BB/Stable rating.
KEY RATING DRIVERS
The affirmation reflects MRD's tight liquidity, with cash flow from
operations deteriorating to negative INR61 million in FY18 (FY17:
negative INR19 million), on account of longer receivable and
inventory periods. However, an increase in the payable period at
year-end kept the net cash conversion cycle at 22 days in FY18
(FY17: 23 days). The company's average maximum utilization of the
fund-based limits was 99.27% for the 12 months ended December 2018.
The rating factor in MRD's limited track record and medium scale of
operations, with revenue rising to INR1,740 million in FY18 from
INR882 million in FY17, on account of a high number of customer
orders. MRD booked revenue of INR2,100 million during April to
mid-February 2019 and it has an order book of INR206 million for
execution INR100 million till March 2019.
The ratings, however, are supported by MRD's strong credit metrics
backed by healthy operating margins, with gross interest coverage
(operating EBITDA/gross interest expense) at 10.4x in FY18 (FY17:
44.4x) and net leverage (adjusted net debt/operating EBITDA) at
2.7x (0.5x). The metrics deteriorated in FY18 owing to a new cash
credit facility of INR120 million and other term loans availed by
the firm to fund a capex of INR85 million in FY18. However, it
continues to be strong on account of increase in absolute EBITDA to
INR50 million in FY18 (FY17: INR21 million). Ind-Ra expects the
firm's credit metrics to deteriorate in the medium term on account
of an enhancement in the cash credit facility and additional term
loan availed in FY19 to fund a capex.
EBITDA margins improved to 2.9% in FY18 (FY17: 2.4%) due to a
decrease in raw material expenses and variable expenses. RoCE was
18% during FY18 (FY17: 14%). The company expects profit margins to
remain below 3% due to high direct expenses.
The ratings are further supported by MRD's partners' experience of
more than a decade in the diamond industry.
RATING SENSITIVITIES
Negative: A substantial decline in the top line along with a
decline in EBITDA margin and/or deterioration in the working
capital cycle and liquidity position, on a sustained basis would be
negative for the ratings.
Positive: A sustained improvement in the revenue and EBITDA
margins, while maintaining the credit metrics and improvement in
the liquidity position could be positive for the ratings.
COMPANY PROFILE
Established in 2015 as a partnership firm in Surat, MRD
manufactures cut and polished diamonds. Mr. Rajeshbhai Chetta, Mrs.
Sheetalben Chetta, Mr. Hiteshbhai Navadiya, and Mrs. Ashaben
Kevadiya are the partners. The installed capacity is 75,000 carats
per annum.
MAHARAJA SATHYAM: ICRA Keeps B on INR5.9cr Debt in Non-Cooperating
------------------------------------------------------------------
ICRA said the rating for the INR5.90-crore bank facilities of
Maharaja Sathyam Industries Private Limited continue to remain in
the 'Issuer Not Cooperating' category. The rating is denoted as
"[ICRA]B+ (Stable); ISSUER NOT COOPERATING". ICRA had earlier moved
the ratings of Maharaja Sathyam Industries Private Limited to the
'ISSUER NOT COOPERATING' category due to non-cooperation by the
entity in sharing required information for carrying out the
surveillance of the rating.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term- 5.90 [ICRA]B+ (Stable); ISSUER NOT
Fund-based/CC COOPERATING; Rating continues
to remain in the 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best available
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.
Maharaja Sathyam Industries Private Limited (MSIPL), incorporated
in 1981, is a small scale yarn manufacturer with a spindle capacity
of 22,944 spindles. The company predominantly produces
polyester-cotton blended yarn (65:35) and manufactures
polyester-viscose blended yarn and cotton yarn in minor quantities.
The company caters to traders in the domestic market mostly to
weavers around Erode, Ichalkaranji, Surat and Kolkata. MSIPL
largely produces cotton and blended yarn in the coarse-to-medium
count range with average count being 40.
MAIL ORDER: ICRA Moves D on INR27.5cr Loans to Not Cooperating
--------------------------------------------------------------
ICRA has moved the long-term and short-term ratings for the bank
facilities of Mail Order Solutions (India)Private Limited (MOS) to
the 'Issuer Not Cooperating' category. The rating is now denoted as
"[ICRA]D ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term- 22.00 [ICRA]D ISSUER NOT COOPERATING;
Fund-based Rating moved to the 'Issuer Not
Cash Credit Cooperating' category
Long-term- 5.50 [ICRA]D ISSUER NOT COOPERATING;
Fund-based Rating moved to the 'Issuer Not
Term Loans Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best available/dated/
limited information on the issuers' performance. Accordingly, the
lenders, investors and other market participants are advised to
exercise appropriate caution while using this rating as the rating
may not adequately reflect the credit risk profile of the entity.
Incorporated in 2004, MOS is engaged in providing integrated
marketing communication services to clients, largely direct
marketing companies, for the purpose of sending direct mails to a
targeted group of customers. MOS' services include printing and
distribution of mail packs (promotional inserts, corporate
communications, etc) for direct marketing, which requires concept
development, creative designing, pre-press activities, print
production personalization, mailing, distribution and fulfillment.
MOS manages all aspects of print projects from concept creation to
delivery in one place. It has presence across all product
categories – bills, catalogues, periodicals, promotional inserts,
and corporate communications for printing, personalization and
distribution. Besides integrated service portfolio, MOS also
benefits from the significant investment undertaken by it for
building the in-house capacities and software purchase/
development, in addition to network building. It also has license
arrangements with logistics service providers like La Poste, Royal
Mail and Swiss Post International for mail delivery.
MANI EXPORT: Ind-Ra Hikes Rating on INR300MM Working Capital to BB
------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has upgraded Mani Export
Private Limited's (MEPL) Long-Term Issuer Rating to 'IND BB' from
'IND BB-'. The Outlook is Stable.
The instrument-wise rating actions are:
-- INR300 mil. (reduced from INR350 mil.) Fund-based working
capital limits upgraded with IND BB/Stable rating; and
-- INR4 mil. Non-fund-based limits affirmed with IND A4+ rating.
KEY RATING DRIVERS
The upgrade reflects an improvement in MEPL's operating margins and
credit metrics during FY18-9MFY19. EBITDA margins were modest, and
rose to 2.59% in FY18 (FY17: 1.47%) and further to around 3.87% in
9MFY19, due to a decline in the procurement cost of the goods sold.
Return on capital employed was 2.90% in FY18 (FY17:1.37%).
Operating EBITDA/gross interest expense improved to 1.23x in FY18
(FY17: 0.7x) with a slight improvement in absolute EBITDA to INR33
million (INR21 million) and a decrease in interest costs to INR27
million (INR30 million). Adjusted net debt/operating EBITDAR
improved to 13.9x in FY18 (FY17: 21.5x) with lower debt utilized.
About 25% of the total debt of the company pertains to
interest-free unsecured loans from promoters and remaining 75%
pertains to working capital limits. The company does not have major
debt-led capex plan for the near term. Net leverage excluding
unsecured loans comes to about 5.57x in 9MFY19 (FY18: 10.3x; FY17:
15.5x).
However, the margins and metrics remain modest, due to volatile
diamond prices and forex rates, as its revenue is derived mainly
from exports. Also, the scale of operations is medium with revenue
declining to INR1,283 million in FY18 (FY17: INR1,457 million) due
to lower realization as a result of overall sluggish demand in the
diamond industry. During 9MFY19, it achieved a turnover of INR1,036
million, as there is an improvement in realization and in orders
received.
Moreover, MEPL's liquidity position is tight and working capital
cycle remained long at 214 days in FY18 (FY17: 175 days), driven by
high inventory and creditor days. The company used 97% of the
fund-based facilities over the 12 months ended in January 2019.
Also, the cash and cash equivalents reduced to INR6.79 in FY18
(FY17: INR11.86 million) and cash flow from operations reduced to
INR2.93 million (INR71.47 million) due to the stretch in working
capital cycle.
The ratings, however, continue to be supported by over four decades
of experience of MEPL's promoters in diamond trading and processing
and its diversified client base. Also, the debt of the company
comprises only working capital facilities hence there are no
repayment obligations.
RATING SENSITIVITIES
Negative: Any decline in the revenues, operating EBITDA margin
and/or any deterioration in the net working capital cycle leading
to any deterioration in the credit metrics would be negative for
the ratings.
Positive: An increase in the scale of operations and operating
EBITDA margin leading to an improvement in the overall credit
metrics, on a sustained basis, would be positive for the ratings.
COMPANY PROFILE
MEPL was converted into a private limited company form a
partnership firm in 2014. It was set up by Mr. Nagjibhai B. Sojitra
and other family members in 1987. The company engaged in the
cutting and processing of rough diamonds and exporting of polished
diamonds of various sizes and shapes. MEPL has a registered office
in Mumbai and a processing unit in Surat. The company also has two
windmills of 0.6MW capacity each in Kutch.
NANDINI FITNESS: ICRA Keeps D on INR7cr Debt on Non-Cooperating
---------------------------------------------------------------
ICRA said the rating for the INR7-crore bank facility of Nandini
Fitness Pvt. Ltd. (NFPL) continues to remain under 'Issuer Not
Cooperating' category. The ratings are denoted as [ICRA]D; ISSUER
NOT COOPERATING.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 7.00 [ICRA]D ISSUER NOT COOPERATING;
Term Loan Continues to remain under the
'Issuer Not Cooperating'
Category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best available and
limited information on the issuers' performance. Accordingly the
lenders, investors and other market participants are advised to
exercise appropriate caution while using this rating as the rating
may not adequately reflect the credit risk profile of the entity.
NFPL was promoted by Mr. Sumit Goel and Mr. Hemant Kumar Singh in
2009, to set up a health and fitness business in Lucknow, Uttar
Pradesh under a franchisee agreement with Gold's Gym.
NIYATI ENGINEERING: Ind-Ra Moves BB+ Rating to Non-Cooperating
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Niyati 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:
-- INR62.5 mil. Fund-based limits migrated to non-cooperating
category with IND BB+ (ISSUER NOT COOPERATING) rating; and
-- INR35 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
March 7, 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 2002, Niyati Engineering undertakes civil
engineering projects for various types of manufacturing plants
especially chemicals.
PANCHSHEEL SOLVENT: ICRA Keeps D on INR24cr Debt in Not Cooperating
-------------------------------------------------------------------
ICRA said the ratings for the bank facilities of Panchsheel Solvent
Private Limited (PSPL) continue to remain in the 'Issuer Not
Cooperating' category. The ratings are denoted as "[ICRA]D; ISSUER
NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based- 12.25 [ICRA]D ISSUER NOT COOPERATING;
Term Loan Rating continues to remain under
'Issuer Not Cooperating' category
Fund Based- 12.50 [ICRA]D ISSUER NOT COOPERATING;
Cash Credit 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 2008, PSPL was promoted by the Lalani family. Prior
to this, the management was engaged in the manufacturing of poultry
feed and PET bottles through its group entities. PSPL is currently
engaged in extracting edible refined rice bran oil with an
installed capacity of 1,50,000 tonnes per annum (TPA) and 30,000
TPA of refining unit. Besides, PSPL has flexibility to refine other
crude oils in the same plant and therefore, started refining
cottonseed crude oil since February 2015. The manufacturing
facility of the company is located at Rajnandgaon, Chhattisgarh.
PIK STUDIOS: ICRA Lowers Rating on INR12cr Cash Loan to D
---------------------------------------------------------
ICRA has downgraded the rating of bank facilities of Pik Studios
Private Limited (PIK) to [ICRA]D from [ICRA]C+ (Stable). The rating
continues to be in the 'Issuer Not Cooperating' category. The
rating is now denoted as "[ICRA]D ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based- 12.00 [ICRA]D ISSUER NOT COOPERATING;
Cash Credit downgraded from [ICRA]C+; rating
continues to be in '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.
Rationale
The rating downgrade follows the delays in debt servicing by PIK to
the lenders, as confirmed by them to ICRA.
Established in 1965 as a partnership firm, V K Industries was
majorly into manufacturing various components used in writing
instruments like plastic body, nibs, ink and ink reservoir. The
firm was converted into a private limited company in 1998 and
renamed to 'PIK Pens Private Limited'. The company manufactures
wide range of writing instruments like fibre tip pens, permanent
markers, white board markers, highlighters, ball point pens, etc.
and sells it under the brand name 'PikPens'. In 2016, the company
ventured into cosmetics (eye liner, perfumers and kajal) and
thereafter the name was changed to PIK Studios Private Limited.
Further, PIK also undertakes job work for other writing instrument
manufacturers. PIK has its factory unit spread over three acres in
Umbergaon, with approximately 250,000 square feet of built up area,
and an installed capacity of manufacturing 69.6 million pen sets
per annum.
REAL GROWTH: ICRA Lowers Ratings on INR25cr Loans to D
------------------------------------------------------
ICRA has revised the rating to [ICRA]D ISSUER NOT COOPERATING;
continues to remain in Issuer non cooperation for bank facilities
of Real Growth Commercial Enterprises Limited (RGCEL) on account of
instances of default in debt servicing by the company due to
stretched liquidity position of the company.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based 21.00 [ICRA]D ISSUER NOT COOPERATING;
Limits Rating downgraded from
[ICRA]B-(Stable) and continues
to remain in Issuer non
cooperation
Non-Fund 4.00 [ICRA]D ISSUER NOT COOPERATING;
Based limits COOPERATING; Rating downgraded
from [ICRA]B-(Stable) and
continues to remain in Issuer
non cooperation
Key rating drivers
Credit strengths
Experienced management provides a competitive edge: The promoters
have been involved in the steel-trading business for around a
decade and have a thorough knowledge of the market.
Credit challenges
Stretched liquidity position leads to delays in debt servicing:
There have been recent instances of delays in debt servicing by the
company owing to the company's stretched liquidity position.
Intense competition puts pressure on profitability: The
steel-trading business is highly competitive and fragmented in
nature because of the presence of a large number of organised and
unorganised players. Given the low investment required, the entry
barriers have remained low, resulting in the entry of a large
number of small-to-medium scale enterprises. This in turn has put
pressure on profitability.
Liquidity
Liquidity profile of the company stood weak during FY2018
represented by current ratio of 1.33x (FY2017: 1.25x). The cash and
bank balance as on March 31, 2018 stood at INR1.97 crores and
further the working capital utilization has remained overdrawn
beyond the sanctioned limits.
RGCEL was incorporated in 1995 under the name KRS Financials Pvt.
Ltd. In 2001, it was taken over by the RG Group and its name was
changed to Rajesh Projects & Finance Limited, which was
subsequently renamed to Real Growth Commercial Enterprises Ltd. in
January 2011. The company was involved in the development of
commercial offices-cum-shopping complexes till 2007. It commenced
trading in stainless steel sheets of various dimensions in January
2010 in Bhiwadi (Rajasthan).
SARDAR COTTON: ICRA Lowers Rating on INR11.30cr Loan to D
---------------------------------------------------------
ICRA has reassigned the long-term rating for the bank facilities of
Sardar Cotton (SC) to [ICRA]D ISSUER NOT COOPERATING from [ICRA]B
ISSUER NOT COOPERATING. The rating continues to remain in the
'Issuer Not Cooperating' category. The rating is now denoted as
"[ICRA]D; ISSUER NOT COOPERATING" for the bank facilities of the
company.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-based 11.30 [ICRA]D; ISSUER NOT
COOPERATING; Reassigned
from [ICRA]B (Stable);
Rating continues to remain
in the 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best available/dated/
limited information on the issuers' performance. Accordingly, the
lenders, investors and other market participants are advised to
exercise appropriate caution while using this rating as the rating
may not adequately reflect the credit risk profile of the entity,
despite the downgrade.
Rationale
The ratings take into consideration the irregularity in debt
servicing by SC, as confirmed by its lender to ICRA.
Established as a partnership firm in 2012, Sardar Cotton (SC) is
engaged in cotton ginning and pressing operations. The firm is
managed by Mr. Pravin Patel along with 2 other partners with
manufacturing facility located near Rajkot, Gujarat. The firm has
24 ginning machines and 1 pressing machine having a cumulative
processing capacity to manufacture 100 bales per day with 12 hours
of operations. The major raw material of the firm is Shankar-6
which is procured directly from the farmers located in Rajkot, and
close by areas at market prices on cash payment basis.
SAROJA RICE: ICRA Withdraws B Ratings on INR10cr Loans
------------------------------------------------------
ICRA has withdrawn the ratings of [ICRA]B(Stable); ISSUER NOT
COOPERATING to the INR10.00 crore bank facilities of Saroja Rice
Industries.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term-Fund 7.00 [ICRA]B(Stable); ISSUER NOT
Based limits COOPERATING; Withdrawn
Long term- 3.00 [ICRA]B(Stable); ISSUER NOT
Unallocated COOPERATING; Withdrawn
Rationale
The ratings are withdrawn in accordance with ICRA's policy on
withdrawal and suspension at the request from the entity based on
no objection certificate provided by its lenders.
Saroja Rice Industries (SRI), located at Venkatadripalem in
Nalgonda district of Telangana, has been registered as a
partnership firm in 2015 and started operations in August 2015. The
firm is primarily engaged in milling of paddy. The current milling
capacity is 4 tons of paddy per hour.
SHARMA CARS: ICRA Reaffirms B+ Rating on INR14cr Term Loan
----------------------------------------------------------
ICRA reaffirmed ratings on certain bank facilities of
Sharma Cars Private Limited (SCPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-based-
Cash credit 7.00 [ICRA]B+ (Stable); reaffirmed
Fund-based-
Term Loan 14.00 [ICRA]B+ (Stable); reaffirmed
Fund/Non-Fund 14.69 [ICRA]B+ (Stable)/A4;
Based-Unallocated reaffirmed
Rationale
The ratings reaffirmation continues to remain constrained by SCPL's
leveraged capital structure and below average coverage indicators
because of high reliance on working capital borrowings to fund the
vehicle inventories. The company's liquidity position remains
tight, marked by full utilisation of the working capital limits.
The ratings are further constrained by stiff competition from other
dealers of HMIL in the Ahmedabad region and other OEM
manufacturers, resulting in pressure to pass on the price discounts
to customers, thereby limiting the profitability. The ratings also
take into account the commission structure decided by the
principal, which keeps the company's margins under check.
The ratings, however, continues to favourably take into account the
promoters' extensive experience in the automobile dealership
business and SCPL's established market position in Ahmedabad as an
authorised dealer of Hyundai Motors India Limited (HMIL).
Outlook: Stable
ICRA expects SCPL to continue to benefit from the experience of its
promoters in the auto dealership industry. The company will also
benefit from HMIL's established market position in the passenger
vehicle industry. The outlook may be revised to Positive if
substantial improvement in the operating income (OI) and
profitability leads to higher-than-expected cash accruals; or if
substantial capital infusion or reduction in debt through better
working capital management improves its currently leveraged capital
structure and liquidity profile. Conversely, the outlook may be
revised to Negative if substantial reduction in revenue or profit
margin leads to inadequate cash accruals or if an increase in
external debt or capital withdrawal further stresses the capital
structure and liquidity.
Key rating drivers
Credit strengths
Extensive experience of promoters in auto-dealership business: SCPL
is promoted by members of Sharma family who have over two
decade-long experience in the automobile dealership business.
Established position as authorised dealer of HMIL in Ahmedabad- The
company is among the leading and one of the oldest dealers of
Hyundai Motors India Limited in Ahmedabad and deals in the entire
range of passenger vehicles. It operates two showrooms with 3S
(sales, service and spares) facilities, one showroom with only
sales facility and one showroom with second hand car selling
facility.
Credit challenges
Weak financial risk profile: The company's operating income
declined by 6.3% in FY2018, to INR230.52 crore from INR246.00 crore
in FY2017, primarily on account of decrease in number of units sold
coupled with change in classification of the duties post GST. The
operating margin, as typical in any dealership business, continued
to remain low, at 4.07% in FY2018 and 4.15% in 6MFY2019.
Consequently, the net profit also remained low and stood at 0.15%
in FY2018. As on March 31, 2018, the company's total debt stood at
INR81.19 crore, an increase from INR75.38 crore as on March 31,
2017,and comprised of working capital facilities of INR50.04 crore
(62% of total debt), 12% interest-bearing unsecured loan from
promoters and relatives of INR2.34 crore (33% of total debt), loan
from financial institutions of INR28.59 crore (35% of total debt).
Increase in debt coupled with low net worth of INR9.18 crore as on
March 31, 2018, deteriorated the gearing to 8.84 times in FY2018
from 8.55 times in FY2017. With high interest and finance cost and
low profitability, the coverage indicators have remained weak as
reflected by interest coverage ratio of 1.13 times (vis-à-vis 1.13
times in FY2017), TOL/TNW of 9.56 times (vis-à-vis 10.13 times in
FY2017), NCA/TD of 2% (vis-à-vis 2% times in FY2017) and total
debt/OPBITA of 8.65 times (vis-à-vis 8.12 times in FY2017).
Inherently low margins in auto dealership business due to regulated
commission structure: The operating profit margin of auto dealers,
including SCPL, remains inherently low because of the high-volume
and low-margin business. Moreover, as the OEMs decide the
commission structure, the margins of the auto dealers are
restricted to a significant extent.
Intense competition in automobile dealership industry: SCPL is one
among six Hyundai dealers in Ahmedabad. Besides this, it faces
stiff competition from dealers of other four-wheeler OEMs. The
rising competition forces the dealers to pass on higher discounts,
thereby further impacting the profitability.
Liquidity position
Fund flow from operations continues to remain positive in FY2018
and 6MFY2019. However, with high repayment obligations and interest
and finance cost, the free cash flows have turned negative in
FY2018 and 6MFY2019. The liquidity profile of the entity remains
tight with almost fully utilised cash credit limits to fund the
inventories. Against the backdrop of significant repayments,
promoter funding to support the cashflow mismatches remains
critical.
Incorporated in 1998, Sharma Cars Private Limited (SCPL) is the
automobile dealer of Hyundai Motors India Limited's (HMIL)
passenger vehicles. The company is promoted by Mr. Narendra Sharma,
Mr. Surendra Sharma and Mr. Subashchandra Sharma, who have around
two decades of experiences in the automobile dealership. SCPL has
presence in Ahmedabad (Gujarat), through two 3S (sales, service and
spares) showrooms, one 1S (sales) showroom and one used cars
outlet.
In FY2018, the company reported a net profit of INR0.37 crore on an
OI of INR230.52 crore, compared to a net profit of INR0.36 crore on
an OI of INR246.00 crore in FY2017.
SILVERLINE INVESTMENTS: ICRA Cuts Ratings on INR12.65cr Loans to D
------------------------------------------------------------------
ICRA has downgraded the long-term rating to [ICRA]D ISSUER
NOT-COOPERATING from [ICRA]C+ ISSUER NOT-COOPERATING for the
INR12.65-crore limits of Silverline Investments. The rating
continues to remain in the 'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Fund 5.25 [ICRA]D ISSUER NOT
based Term Loans COOPERATING; Revised
from [ICRA]C+, continues
to remain in the 'Issuer
Not Cooperating' category
Long-term 7.40 [ICRA]D ISSUER NOT
Unallocated COOPERATING; Revised
from [ICRA]C+, continues
to remain in the 'Issuer
Not Cooperating' category
The rating downgrade follows the delays in debt servicing by
Silverline Investments to the lender, as confirmed by them to ICRA.
ICRA has limited information on the entity's performance since the
time it was last rated in February 2016 and the ratings were moved
to the ISSUER NOT COOPERATING category in August 2017.
As part of its process and in accordance with its rating agreement
with Silverline Investments, 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. In the absence of requisite information
and in line with SEBI's Circular No. SEBI/HO/MIRSD4/CIR/2016/119,
dated November 01, 2016, ICRA's Rating Committee has taken a rating
view based on the best available information.
Key rating drivers
Credit challenges
Delay in debt servicing: The entity has delayed in meeting its
repayment obligations on its term loan owing to delay in receipt of
rentals from its tenant. The entity has high tenant concentration
risk with a single tenant occupying the entire property, the
rentals from which is used for servicing the debt. In the absence
of a Debt Service Reserve Account, any delays from this single
customer leads to defaults in debt repayment.
Formed in January 2004, Silverline Investments (the firm) is a
partnership firm engaged in development of residential and
commercial properties. The firm has completed 6 residential
projects and two commercial projects till date. Currently the firm
focuses only on commercial projects. The same promoters have a
different entity names Srivastav Builders, which undertakes
residential projects.
SOLAPUR BIO-ENERGY: ICRA Reaffirms D Ratings on INR10.30cr Loans
----------------------------------------------------------------
ICRA reaffirmed ratings on certain bank facilities of
Solapur Bio-Energy Systems Private Limited's (SBES), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
LT-Term Loans 7.10 [ICRA]D; Reaffirmed
LT-Fund-based
Limits 2.00 [ICRA]D; Reaffirmed
ST-Non-fund
based limits 1.20 [ICRA]D; Reaffirmed
Rationale
The rating reaffirmation reflects the irregularity in SBES debt
servicing on account of the significant delay in project
commissioning, and also in the sale of power that has led to cash
flow mismatches. While the company commissioned a capacity of 3 MW
in January 2013 and planned to commission the remaining capacity of
1 MW by Q2 FY2017, significant deviations in the design parameters
and the quality of waste supplied by the Solapur Municipal
Corporation (SMC) led to a need for changes in the digesters and
segregators.
As a result, the plant was unable to achieve the optimum
utilisation level, which has resulted in muted cash accruals and a
stretched liquidity position. SBES made changes in the design of
the plant equipment and the entire capacity of 4 MW became
operational in January 2018. However, utilisation levels continue
to remain low because of the limited supply of waste by the SMC in
the current fiscal.
Further, the sizeable cost overrun has impacted the project metrics
and the company is seeking an increase in the tariff rates. The
rating also takes into account the overall modest size of
operations (planned plant capacity of 4 MW) and the limited
experience of its parent company, Organic Recycling Systems Private
Limited (ORS), in setting up power plants based on municipal solid
waste (MSW) as fuel. ICRA also notes the company's plan to
transition from power sales to bio- compressed natural gas (CNG)
sales. SBES plans to sell a mix of bio-CNG and power for the next
2-3 years and will gradually transition to 100% bio-CNG sales. The
company's ability to complete the modification work for the CNG
plant in a timely manner and achieve the envisaged operating
parameters would be critical for overall profitability and debt
coverage, going forward.
ICRA, however, positively notes the low demand risk, with a
long-term power purchase agreement (PPA) in place with Maharashtra
State Electricity Distribution Company Limited (MSEDCL), as well as
the additional revenues to be generated from the sale of
compost/bio-fertilizers.
Key rating drivers
Credit strengths
Low demand risk: The company has a long-term PPA with MSEDCL at a
levelised tariff of INR4.88/unit, which limits the demand risk to
some extent.
Technology for the project developed in consultation with Waste
Works, an experienced player in anaerobic digestion systems: ORS
has a technical consultancy agreement with Waste Works of Ireland.
Accordingly, ORS has developed the technology in-house, considering
the Indian MSW characterisation for the project. Waste Works had
extended its support and knowledge for the project. ORS is
utilising the same technology for other similar projects that have
been awarded.
Credit challenges
Irregularity in debt servicing due to subdued PLF levels: SBES
continues to delay its debt servicing requirements owing to poor
plant performance. The plant load factor (PLF) for the period
between FY2016 and H1 FY2019 remained substantially low compared to
the design PLF.
Ability to modify plant equipment for bio-CNG generation in a
timely manner and achieve optimum utilisation remains critical:
Given that the company has planned to transition to bio-CNG sales
from power sales, its ability to complete the modification work for
the CNG plant in a timely manner and achieve the envisaged
operating parameters would be critical for overall profitability
and debt coverage, going forward.
Liquidity position
The company's cash flows remained negative in FY2018 due to
increased operating costs. It had a modest unencumbered/free cash
and bank balance of INR0.03 crore as on March 31, 2018.
SBES, promoted by ORS, is a special purpose vehicle (SPV) set up to
convert MSW into energy and compost. The company set up a plant in
Solapur (Maharashtra) and had commissioned 3-MW capacity by January
2013. The remaining 1-MW capacity was expected to be commissioned
by Q2 FY2017. However, because of significant deviations in the
design parameters and the quality of waste supplied by the SMC,
SBES had to carry out design changes in the equipment. As a result,
the entire capacity of 4 MW became operational in January 2018. The
company has a long-term PPA with MSEDCL for the sale of power at a
tariff of INR4.88/unit for the 2.83-MW capacity and has also signed
an in-principle PPA with MSEDCL for the remaining 1-MW capacity.
The operations of the plant are based on the bio-methanation
process, based on anaerobic digestion, designed by the company in
collaboration with Waste Works (Ireland).
SRI RAMAKRISHNAA: ICRA Keeps B on INR10cr Loans in Not Cooperating
------------------------------------------------------------------
ICRA said the rating for the INR10.00-crore bank facilities of Sri
Ramakrishnaa Textiles continue to remain in the 'Issuer Not
Cooperating' category. The rating is denoted as "[ICRA]B (Stable);
ISSUER NOT COOPERATING". ICRA had earlier moved the ratings of Sri
Ramakrishnaa Textiles to the 'ISSUER NOT COOPERATING' category due
to non-submission of monthly 'No Default Statement' ("NDS") by the
entity.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term- 7.36 [ICRA]B (Stable); ISSUER NOT
Fund-based COOPERATING; Rating continues
to remain in the 'Issuer Not
Cooperating' category
Long-term- 2.64 [ICRA]B (Stable); ISSUER NOT
Unallocated COOPERATING; Rating continues
to remain in the 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best available
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.
Sri Ramakrishnaa Textiles was established as a proprietorship
concern in 2006 by Mr. R Loganathan and was converted to a
partnership firm in 2017 with Mr. R Loganathan and Mrs. Thulasimani
as partners. Mr. Loganathan has extensive experience of nearly two
decades in the weaving industry. The firm is involved in the
production of grey cotton fabric at its manufacturing facility in
Coimbatore, Tamil Nadu. The current installed capacity of the firm
is 92 looms, which includes 56 conventional power looms and 36 auto
power looms. The firm outsources most of its production to around
600 looms located nearby, by virtue of which it has an overall
annual production capacity of around 12 million metres of grey
fabric. The firm procures cotton yarn from various spinning mills
in Tamil Nadu and Andhra Pradesh, weaves it into grey fabric and
markets it to garment manufacturers across India.
SUNSHOT TECHNOLOGIES: ICRA Assigns B+ Issuer Rating, Outlook Stable
-------------------------------------------------------------------
ICRA has assigned [ICRA]B+ issuer rating to Technologies Pvt. Ltd.
Outlook is stable.
Rationale
The rating is constrained by the company's small scale of
operations in roof-top solar project EPC business with a limited
track record.
The rating also factors the company's weak net-worth position and
subdued profitability levels. While the company has a moderate
order book position, ability of the company to identify the
off-takers in Commercial and Industrial (C&I) segment as well as
the investors for entering into power purchase agreement (PPAs)
with the off-takers in a timely manner remains important. ICRA
further notes that with growing scale of operations, ability of the
company to execute the roof-top solar projects in a timely manner
without any cost over-run as well as secure adequate working
capital limits at competitive rates remains crucial from credit
perspective.
Also, company's profitability remains exposed to pricing pressures
in the business, given the high competitive intensity in the
roof-top solar EPC industry. Further, the ability of the company to
ensure operating performance (such as contracted performance ratio
(PR)) of roof-top projects in line with the contracted parameters
in Operation and Maintenance (O&M) agreement remains critical.
The rating however favourably factors in the growth in company's
scale of operations in development of rooftop solar power plants
for C&I consumers in last three-year period, which is supported by
favourable policy thrust and improved tariff competitiveness of
solar PV based energy with the decline in prices of solar modules
as well as availability of fiscal benefit such as accelerated
depreciation (AD) for the investors. The rating also takes into
account the company's highly qualified and professional management
team, reputed customer profile, relatively lower project execution
risk in the rooftop segment and moderate order book position which
provides revenue visibility in the near term.
Outlook: Stable
The outlook may be revised to Positive if STPL is able to increase
its scale of operations at healthy contribution margins resulting
in improvement of the company's profitability and liquidity. The
outlook may be revised to Negative in case of any significant
decline in the order book position of the company. Any significant
delay in project commissioning which may result in levy of late
delivery charges, any material increase in the competitive
intensity and/or any performance shortfall in the O&M activities as
against the contracted may also result in Negative outlook.
Key rating drivers
Credit strengths
Tariff competitiveness of solar power projects remains a key
long-term growth driver: Tariffs under the PPAs signed for the
rooftop solar PV installations executed by the company are usually
in the range of INR4 - 5/unit for a tenure of 20 to 25 years. This
is at a discount of 25-30% from the prevailing grid tariff in the
range of INR6.5-7.5/unit (energy charge)
charged by the state-owned distribution utilities. This in turn
makes solar energy highly attractive and a cost competitive source
of power for the commercial and industrial segment for meeting
their own requirements.
Reputed customer profile and modest order book position: The
company has installed projects at reputed clientele sites like
Mumbai International Airport, Bangalore International Airport, etc.
Further, the company has been able to procure repeat orders from
many of its customers. As on December 2018, order book size of the
company is around ~13.5 MW (Rs. 52 crore) which provides revenue
visibility in the near term. The ability of the company to execute
the entire order book within the timelines remains critical from
credit perspective.
Highly qualified and professional management team: The company was
cofounded in 2010 by Mr. Anshumaan Bhatnagar, Mr. Rahul Dasari and
Mr. Indrajeet Dudile. All the co-founders have engineering
background and have completed their MBA from IIM Ahmedabad in 2007.
Prior to starting the company, Mr. Rahul was working with Nokia
Corporation, Mr. Indrajeet was working in supply chain department
of Spencer's Retail and Mr. Anshumaan was employed in Tata group,
working with the Managing Director (MD) of Tata Chemicals.
Credit challenges
Limited track record of operations & weak net-worth position: The
company has installed ~30MW (as on December 2018) rooftop solar
power capacity with the majority portion (~38%) being installed in
FY2018 thus providing a limited track record. The high operating
cost incurred by the company has kept its operating margin low at
~0.78% in FY2018. The net profitability margin has further remained
subdued. In addition, the company's net worth position remains low
(INR4.73 crore as on March 31, 2018).
Ability to secure adequate working capital limits at competitive
rates remains highly critical: Given the working capital intensive
nature of the business, the ability of the company to achieve
envisaged growth in a timely manner remains contingent on its
ability to secure adequate working capital limits.
Competitive pressures in roof-top solar EPC segment, given the
fragmented nature of the market: STPL's market share is higher than
that of an average market player but given the fragmented nature of
the industry, the company faces tough competition from established
players which have a healthy track record and access to funds
required during the normal course of their business. The ability of
the company to identify new off-takers in C&I segment as well as
investors who are willing to enter into PPAs will act as a
determinant in the company's future competitive positioning. This
will also determine the client concentration risk of the company
with top four clients contributing to ~44% of the company's revenue
in FY2018.
Reduction in the accelerated depreciation benefit may impact the
returns available to the investors: For an investor the provision
of accelerated depreciation benefits allows them to depreciate the
assets built as Solar Power Plant at a much higher rate than
general capital assets. This allows the user to then claim tax
benefit on the value depreciated in each year, thereby, giving them
higher monetary returns. With effect from FY2018, the earlier
prescribed rate of 80% for depreciation was halved to 40% by the
government - thus reducing the returns expected by the investor.
This exposes the company to regulatory risk arising from further
reduction in accelerated depreciation rate by the government.
Liquidity position
As on March 31, 2018, the company has cash and cash equivalents of
INR6.74 crore. The company has access to INR10 crore fund based and
INR7 crore non-fund based facilities for its working capital
requirements.
Incorporated in September 2010, STPL is a rooftop solar power
solutions provider for commercial and industrial entities. As on
December 2018, the company has completed ~30 MW rooftop solar
installations across ~150 locations, including railway stations,
resorts, shopping malls, IT offices, automobile firms, warehouses,
cold storage warehouses and milk processing units among others. The
company started as a consultancy firm advising various companies on
methods to reduce their carbon emissions and in 2014 forayed in its
current business.
TRIDENT FABRICATORS: Ind-Ra Moves BB- on INR51MM to Non-Cooperating
-------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Trident
Fabricators 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:
-- INR51 mil. Fund-based limits migrated to non-cooperating
category with IND BB- (ISSUER NOT COOPERATING) rating; and
-- INR48.5 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
February 28, 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 2004, Odisha-based TFPL manufactures building and
technological structures, and fabricated equipment. The company
also undertakes civil construction job works.
WOMEN'S NEXT: ICRA Moves D on INR12.5cr Debt to Not Cooperating
---------------------------------------------------------------
ICRA has moved the ratings for the bank facilities of Women's Next
Loungeries Limited (WNLL) to the 'Issuer Not Cooperating' category.
The rating is now denoted as "[ICRA]D ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based- 12.50 [ICRA]D ISSUER NOT COOPERATING;
Cash Credit rating moved to 'Issuer not
cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best available/dated/
limited information on the issuers' performance. Accordingly, the
lenders, investors and other market participants are advised to
exercise appropriate caution while using this rating as the rating
may not adequately reflect the credit risk profile of the entity.
Rationale
The rating downgrade follows the delays in debt servicing by WNLL
to the lenders, as confirmed by them to ICRA.
Outlook: NA
WNLL was incorporated in December 2010 as Shiv Lingeries Private
Limited (SSPL). The Company was founded by Mr. Bhavesh Bhanushali
who has over 15 years of expertise in textile industry. The company
is engaged in the business of manufacturing and trading in fancy
ladies lingerie sold under brand names 'Valentine Pink'‖ and
'Women's Next'. The manufacturing facility of WNLL with an annual
installed capacity of 6,000,000 pieces is located at Bhiwandi,
Maharasthra.
The entity earns its revenues mainly from the domestic market and
goods are sold primarily to Ashapura Intimates Fashion Limited.
Apart from manufacturing of ladies' innerwear, the company is also
engaged in trading of fabric.
=========
J A P A N
=========
DTC TWO: Moody's Hikes JPY850MM Class E Notes Rating to Ba1
-----------------------------------------------------------
Moody's Japan K.K. has upgraded the ratings on three classes of
notes from DTC Two Funding Limited.
The affected ratings are as follows:
DTC Two Funding Limited
- JPY380MM Class D Notes, Upgraded to Aa1 (sf); previously on
June 18, 2018 Upgraded to Aa2 (sf)
- JPY850MM Class E Notes, Upgraded to Ba1 (sf); previously on
July 23, 2003, assigned a definitive rating of Ba2 (sf)
- JPY8,690MM Class J Notes, Upgraded to Aa1 (sf); previously on
June 18, 2018 Upgraded to Aa2 (sf)
RATINGS RATIONALE
The ratings upgrade reflects the increased credit enhancement from
the redemption of the notes and the good performance of the
apartment loan pool.
The upgrade also reflects an input change to the model where
available principal collections are used ahead of the interest
reserve fund to cover interest shortfalls. Previously, Moody's
followed the application of funds in the Note Trust Deed and
modeled the interest reserve fund to be used first. However,
Moody's now understands the trustee to interpret the transaction
documents differently, and principal collections are used ahead of
the interest reserve fund to cover interest shortfalls.
The input change reduces the benefit of the interest reserve fund
and has an approximate one notch negative rating impact on the
Class E Notes and limited impact on all other notes.
Currently, the transaction has the Class C, D, E, J and
Subordinated Notes outstanding. The Class C, D and E Notes pay in
sequential order. The Class J Notes rank pari-passu with Class C
and Class D Notes.
In addition to the scheduled principal redemptions from the loan
pool, prepayments have contributed to the increased credit
enhancement.
The loans have exhibited low delinquency and default rates so far,
with high recovery rates obtained on most defaulted loans.
While rental income is on a declining trend, vacancy rates have
improved over the last few years. As a result of both factors,
income streams from the mortgaged properties have exhibited a
steady performance to date.
Moody's expects the cash flows from the properties to deteriorate
as they age, particularly with the high proportion of properties
located in rural areas. Moody's expects that rents will continue to
trend downwards and vacancy rates will increase from current levels
over time, thereby leading to negative net cashflows and potential
defaults.
In addition, the number of loans in the pool has decreased
significantly following full prepayments, mainly due to refinancing
to other lenders.
The lower diversification with chunky exposures makes the rated
notes, and in particular Class E Notes, more sensitive to the
default of larger loans in the pool.
Moody's has also taken into account the negative carry risk, which
has materialized. The risk will increase as the burden of fixed
costs increases while the loan pools continue to amortize. Negative
carry result in principal being used to pay interest, hence
reducing the credit enhancement of the rated notes.
Moody's has conducted cash flow analyses under various performance
parameter scenarios. Moody's has also captured the significant
asset concentration present in the simulated portfolio default
distribution.
The rating actions reflect the positive effects from increased
credit enhancement after taking into account the risks and Moody's
expectation of loan performance.
The principal methodology used in these ratings was "Moody's Global
Approach to Rating SME Balance Sheet Securitizations" (Japanese)
published in September 2017.
Please note that on November 14, 2018, Moody's released a Request
for Comment, in which it has requested market feedback on potential
revisions to its Methodology for rating SME Balance Sheet
Securitizations. If the revised Methodology is implemented as
proposed, the Credit Rating on DTC Two Funding Limited may be
neutrally affected.
Factors that would lead to an upgrade or downgrade of the ratings:
Factors that could lead to a ratings upgrade include an improvement
in the credit quality of the collateral pool, and the buildup of
credit enhancement available for each class of notes.
Factors that could lead to a ratings downgrade include a
deterioration in the credit quality of the collateral pool, a
further lack of diversification in the collateral pool, and a
decrease in credit enhancement available for each class of notes.
===============
M A L A Y S I A
===============
MALAYSIA AIRLINES: Fails to Meet 3-Year Target to be Profitable
---------------------------------------------------------------
Bilqis Bahari at New Straits Times reports that Malaysia Airlines
Bhd's (MAS) days as a national carrier may be numbered as it has
failed to meet its three-year target to be profitable, but is
instead bleeding since it was taken private in 2014, aviation
analysts said.
They said that the best deal for the airline is to completely shut
down its operations or sell it to interested parties or spin off
its business divisions, NST relates.
According to NST, Shukor Yusof, the founder of Malaysian-based
aviation consultancy firm Endau Analytics, said there would be no
capacity issue if MAS were to close shop as its void would be
filled by other airlines.
"MAS ought to shut down. There is no economic or financial
rationale in maintaining it in its current condition. A loss-making
business can't continue indefinitely," he told the New Straits
Times.
If the national airline was shut down, its assets, such as aircraft
and properties, could be used to repay debts while some of its
workers could be redirected to other airlines, such as Malindo
Airways or AirAsia, the report says.
"What's more important, in my view, is to take to task the people
who have been responsible for ruining MAS. There must be
accountability."
NST relates that Shukor said the question that remains to be
answered is does MAS really bring a multiplier effect to Malaysia's
economy via tourism revenue.
In a recent interview, Khazanah Nasional Bhd managing director
Datuk Shahril Ridza Ridzuan said MAS brings a multiplier effect of
eight to 10 times from tourists for each dollar that the airline
brings to Malaysia, NST relays.
Khazanah is the sole shareholder of MAS after taking the airline
private in 2014. The sovereign wealth fund injected RM6 billion
into the airline to keep it afloat, NST notes.
NST adds that Maybank Investment Bank Bhd aviation analyst Mohshin
Aziz agreed that the best way was for MAS to discontinue operations
given that its turnaround plans over the years have failed.
"Should Malaysia have a national airline? That argument is becoming
weaker because we have been bailing it out many times.
"Nowadays, the attachment and sentiment to the national airline is
not as strong as before.
"Previously, there was a sense of pride attached to the brand. But
today, the emotional attachment is not as strong, particularly
among the younger generation," NST quotes Moshin as saying.
However, Mohshin said, MAS could be sold to an interested party or
enter into a joint venture with other airlines, or its parent
company Malaysia Aviation Group Bhd could sell off one of its
subsidiaries, such as MAB Engineering, NST relays.
The volume for MAS' maintenance, repair and overhaul (MRO) was low,
he said, and it was facing intense competition from other MRO
service providers in the region, such as Singapore, Thailand,
Indonesia and the Philippines, NST relays.
"I think they should test the market to sell their MRO. It makes
financial sense because it's too expensive to maintain that
business. The saving grace is to sell the MRO to a world-recognised
MRO facility.
"MAS' idea for an MRO unit in the past was because they had many
aircraft, so they might as well maintain the planes themselves and
with the spare capacity, offer third-party service to other
airlines," he said, adding that MAS' current fleet size was
smaller, adds NST.
MAG's other subsidiaries include Firefly, MASwings, MAB Kargo,
AeroDarat Services, MAB Leasing, MAB Pesawat and MAB Academy.
From its delisting from Bursa Malaysia from 2015 to 2017, MAS had
registered a loss of MYR2.3 billion due to the ringgit's weakness
and higher jet fuel costs, NST discloses.
According to NST, Khazanah on March 5 announced that half of its
total impairment cost of MYR7.3 billion in 2018 was due to the
carrier.
The sovereign wealth fund has asked MAB to produce a new strategic
plan, says NST.
Headquartered in Selangor, Malaysia, state-owned Malaysia Airlines
-- http://www.malaysiaairlines.com/-- engages in the business of
air transportation and the provision of related services.
=====================
N E W Z E A L A N D
=====================
RCR ENERGY: Dannevirke Plant to Close, Workers to Lose Jobs
-----------------------------------------------------------
Paul Mitchell at Stuff.co.nz reports that workers at a Dannevirke
manufacturing plant are shocked and furious at being made redundant
less than a week after their bosses told them their jobs were
safe.
Stuff relates that E tu union organiser Laurel Reid said it's a
devastating blow for the remaining 30 staff at RCR Energy's
Dannevirke boiler plant, who've been whipped back and forth between
despair and hope for months. It's one of the largest employers in
the southern Hawke's Bay town, the report says.
Almost half the plant's workers got the axe at Christmas in a
desperate attempt to keep RCR Energy afloat during its parent
company's administration, according to Stuff.
Stuff says remaining workers felt more secure after being told on
Feb. 27 the company was to be sold as a going concern to Windsor
Engineering. But on March 5, their new-found sense of security
burned away as management announced the Dannevirke plant was not
included in the sale and would close in four weeks, Stuff relates.
According to Stuff, the union organiser said many workers faced
having to uproot their families and leave Dannevirke to get jobs
that fitted their specific skill set after working at the plant for
decades.
"Some of these guys have basically only ever worked at the plant.
Heavy fabrication is a very useful skill set, but there's not a lot
of options left for them in Dannevirke.
"We're reaching out to companies in Palmerston North and Hawke's
Bay the union deals with, trying to find if anyone's got any jobs
for them, so they don't have to move, or find a way to make do on
much lower pay."
Stuff adds that Tararua mayor Tracey Collis said it was a
devastating blow to lose any job in the district and RCR Energy was
one of the larger employers in Dannevirke.
According to Stuff, RCR's parent company is the Australian
engineering group RCR Tomlinson, which was placed in a trading halt
on November 12 and entered voluntary administration nine days
later. This came after it was hit with a shareholder class action
lawsuit, filed in the New South Wales Supreme Court.
Then just before Christmas, RCR Energy told the 51 staff at its
Dannevirke boiler manufacturing plant that 20 jobs would need to be
cut to keep the plant afloat amid the fallout, Stuff relays.
RCR's New Zealand subsidiaries tried to continue as normal, but
struggled to secure new projects and clients, who were skittish
about the parent company's administration, RCR New Zealand's
executive general manager Andrew Stevens said, Stuff relays.
Stuff relates that Mr. Stevens said RCR Energy was the hardest hit,
since it mainly dealt with clients order by order and everything
had dried up after the Australian trading halt.
Stuff says the Dannevirke plant bore the brunt of the resulting job
losses. And although Windsor buying RCR Energy saved 300 jobs
across the company, the Dannevirke workers once again got the short
end of the stick.
McGrathNicol administrator Conor McElhinney, who handled RCR
Tomlinson's administration, said none of the bidders wanted the
Dannevirke plant, Stuff reports.
RCR Energy was down to just one project and it was unclear when
more work was coming for the plant. So, nobody could justify buying
it and the plant had to be shut down, the report says.
=================
S R I L A N K A
=================
SRI LANKA: Fitch Assigns 'B(EXP)' Rating to USD Bonds
-----------------------------------------------------
Fitch Ratings has assigned Sri Lanka's upcoming US
dollar-denominated bonds an expected rating of 'B (EXP)'.
KEY RATING DRIVERS
The expected rating is in line with Sri Lanka's Long-Term
Foreign-Currency Issuer Default Rating (IDR) of 'B' with a Stable
Outlook.
RATING SENSITIVITIES
The rating would be sensitive to any changes in Sri Lanka's
Long-Term Foreign-Currency IDR. Fitch downgraded Sri Lanka's
Long-Term Foreign- and Local-Currency IDRs to 'B' from 'B+', with a
Stable Outlook, on December 3, 2018.
SRI LANKA: S&P Gives B Foreign Currency Rating to USD Unsec. Notes
------------------------------------------------------------------
S&P Global Ratings assigned its 'B' long-term foreign currency
rating to the proposed benchmark size U.S. dollar-denominated
senior unsecured notes to be issued by Sri Lanka (B/Stable/B).
The notes represent direct, general, unconditional, unsecured, and
unsubordinated obligations of the sovereign, and rank equally with
the sovereign's other unsecured and unsubordinated debt
obligations.
*********
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,
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Information contained herein is obtained from sources believed
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thereof are US$25 each. For subscription information, contact
Peter Chapman at 215-945-7000.
*** End of Transmission ***