/raid1/www/Hosts/bankrupt/TCRAP_Public/190405.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, April 5, 2019, Vol. 22, No. 69
Headlines
A U S T R A L I A
ASTUTE CORP: First Creditors' Meeting Set for April 12
AUSCO PAK: Second Creditors' Meeting Set for April 12
AUZCORP GROUP: Commonwealth Bank a Big Loser Under AUD5MM Deal
EVELYN ST: First Creditors' Meeting Set for April 8
HUNTER WINE: First Creditors' Meeting Set for April 12
C H I N A
GF SECURITIES: Saddled With Offshore Hedge Fund Loss
GIONEE COMMUNICATION: Administrators Prepare for Liquidation
LANDSEA GREEN: Moody's Affirms B2 CFR & B3 Rating on Unsec. Notes
MEINIAN ONEHEALTH: Fitch Rates $200MM Senior Notes Due 2021 'BB+'
SUNAC CHINA: Moody's Hikes CFR to Ba3 & Unsec. Debt Rating to B1
H O N G K O N G
SEASPAN CORP: Egan-Jones Lowers Commercial Paper Ratings to B
I N D I A
A.M. VINYL: CARE Migrates D Ratings to Not Cooperating Category
AANCHAL COLLECTION: Ind-Ra Migrates 'B+' Rating to Non-Cooperating
ANAND MINE: Ind-Ra Migrates BB LT Issuer Rating to Non-Cooperating
BALAJI MOBITECH: CARE Migrates 'D' Ratings to Not Cooperating
BHARTIA YARNS: Ind-Ra Migrates 'BB+' LT Rating to Non-Cooperating
CAPITAL ENTERPRISE: CARE Migrates D Ratings to Not Cooperating
CHANDNA INFRAPROJECTS: CARE Reaffirms D Ratings on INR10cr Loans
DECCAN JEWELLERS: CARE Reaffirms B+ Rating on INR29cr LT Loan
DHRU MOTORS: Ind-Ra Affirms & Then Withdraws 'BB' LT Issuer Rating
DORMAN DOOR: CARE Assigns B+ Rating to INR6cr LT Loan
ELEGANT SALES: Ind-Ra Migrates BB- LT Rating to Non-Cooperating
FINE YARNS: Ind-Ra Migrates BB LT Issuer Rating to Non-Cooperating
FLEXPACK FIBC: CARE Keeps B on INR9cr Loans in Not Cooperating
GONDWANA ENGINEERS: CARE Migrates D Ratings to Not Cooperating
HAZARIBAGH RANCHI: CARE Lowers Ratings on INR601cr Loans to C
HERCULES HOSPITALITIES: Ind-Ra Affirms B LT Rating, Outlook Stable
HILTON INFRASTRUCTURE: CARE Reaffirms D Rating on INR13.91cr Loan
ITM INFRA: Ind-Ra Migrates BB LT Issuer Rating to Non-Cooperating
KAMAL TRADING: Ind-Ra Migrates 'BB+' LT Rating to Non-Cooperating
KHUSHI FOODS: CARE Keeps D on INR7.37cr Loans in Not Cooperating
KSP INC: Ind-Ra Affirms 'BB' Issuer Rating & Alters Outlook to Pos.
MILLENIUM MARBLE: Ind-Ra Moves BB- Debt Rating to Non-Cooperating
NIKITA JEWELLERS: Ind-Ra Lowers LT Rating to 'BB', Outlook Stable
NIMISH SYNTEX: Ind-Ra Moves BB on INR10MM Loans to Non-Cooperating
NIRVANA FASHION: Ind-Ra Migrates BB- LT Rating to Non-Cooperating
PALM HEIGHTS: CARE Migrates D Rating to Not Cooperating Category
PARKER VRC: CARE Migrates D Rating to Not Cooperating Category
PATE FUTURE: CARE Migrates D on INR45cr Loans to Non-Cooperating
RASILANT TECHNOLOGIES: CARE Lowers Rating on INR7.50cr Loan to D
RENUKA CONSTRUCTION: CARE Lowers Rating on INR20cr LT Loan to B+
S. S. FOOD: CARE Lowers Rating on INR6.24cr LT Loan to B+
SAA VISHNU: Ind-Ra Migrates 'BB+' Issuer Rating to Non-Cooperating
SAIKRUPA COTGIN: CARE Migrates 'D' Rating to Not Cooperating
SANGAM FORGINGS: Ind-Ra Migrates 'B' LT Rating to Non-Cooperating
SB EQUIPMENTS: Ind-Ra Migrates 'BB' LT Rating to Non-Cooperating
SHANTOL GREEN: CARE Assigns 'D' Rating to INR9.18cr Loans
SHREE DULICHAND: Ind-Ra Assigns 'B+' Issuer Rating, Outlook Stable
SHREE KAUSHALYA: CARE Migrates B+ Rating to Not Cooperating
SHRIVALLABH PITTIE: CARE Lowers Ratings on INR355cr Loans to C
SOND KNIT: Ind-Ra Migrates B+ LT Issuer Rating to Non-Cooperating
SPECIALITY SILICA: Ind-Ra Migrates BB LT Rating to Non-Cooperating
SUNAHRI MULTI: Ind-Ra Migrates 'BB-' LT Rating to Non-Cooperating
TRANFORMEX FERROUS: CARE Keeps D Rating in Non-Cooperating
VINIT FABRICS: Ind-Ra Migrates 'BB' LT Rating to Non-Cooperating
VISHVAS POWER: Ind-Ra Corrects March 29 Rating Release
I N D O N E S I A
BANK MANDIRI: S&P Alters Outlook to Positive & Affirms 'BB+' ICR
N E W Z E A L A N D
D&V WALDEN: Mad Butcher Glen Innes Store in Liquidation
S I N G A P O R E
HYFLUX LTD: Terminates Restructuring Plan with Indonesian Investor
S O U T H K O R E A
DONGBU STEEL: KDB Picks KG Group as Preferred Bidder
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A U S T R A L I A
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ASTUTE CORP: First Creditors' Meeting Set for April 12
------------------------------------------------------
A first meeting of the creditors in the proceedings of Astute
Corporation Pty Ltd will be held on April 12, 2019, at 10:30 a.m.
at the offices of Hall Chadwick, at Level 14, 440 Collins Street,
in Melbourne, Victoria.
David Anthony Ross, Richard Lawrence, and Richard Albarran of Hall
Chadwick were appointed as administrators of Astute Corporation on
April 4, 2019.
AUSCO PAK: Second Creditors' Meeting Set for April 12
-----------------------------------------------------
A second meeting of creditors in the proceedings of Ausco Pak Pty
Ltd has been set for April 12, 2019, at 10:30 a.m. at the offices
of Level 12, 460 Lonsdale Street, in Melbourne, Victoria.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the Company
be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by April 11, 2019, at 4:00 p.m.
Liam William Paul Bellamy and Sule Arnautovic of Jirsch Sutherland
were appointed as administrators of Ausco Pak on March 7, 2019.
AUZCORP GROUP: Commonwealth Bank a Big Loser Under AUD5MM Deal
--------------------------------------------------------------
Sean Smith at The West Australian reports that Commonwealth Bank
faces a hefty loss after creditors approved the recapitalisation of
a Pilbara accommodation and property group which went under last
year owing tens of millions of dollars to associated companies.
According to the West Australian, creditors of the Auzcorp group of
companies last week endorsed a AUD5 million deed of company
arrangement that will have founder and Pilbara entrepreneur Haniff
Kassim regain control of the company's remaining assets.
The DOCA, which was seen as providing a better return than a
liquidation, provides for Commonwealth to recover just AUD6.55
million of its AUD16.3 million debt, the report discloses.
Unsecured creditors owed AUD5.6 million will get back only 2.4¢ in
the dollar.
Auzcorp, which was put into the hands of Ferrier Hodgson in July,
drew most of its income from a 255-room airport accommodation camp
near the Port Hedland airport and the 91-room Mia Mia House in the
Desert hotel in Newman, according to the West Australian.
Both raked in revenue during the iron ore boom, but occupancy and
room rates dropped sharply from 2014 as mining spending in the
Pilbara fell, putting the group in a financial squeeze, the report
relates.
Its plight was exacerbated by the plunge in Pilbara property
prices, which left it underwater on loans over a portfolio of
houses and units in Port Hedland and Newman that have since been
sold by administrators, the West Australian adds.
Mr. Kassim will inject AUD4.8 million into the DOCA and refocus
Auzcorp on the Mia Mia House in the Desert, which will be reopened
under internal management or a new leaseholder, the report says.
Martin Bruce Jones and Andrew Michael Smith of Ferrier Hodgson were
appointed as administrators of Auzcorp Pty and related entities on
July 5, 2018.
On July 5, 2018, Martin Bruce Jones and Andrew Michael Smith of
Ferrier Hodgson were appointed as Administrators to nine (9)
entities within the Auzcorp Group. Auzcorp Pty Ltd was the holding
company. The related entities are:
* Auzcorp Accommodation Pty Ltd
* Auzcorp Australia Pty Ltd
* Auzcorp Developments Pty Ltd
* Mia Mia Port Hedland International Airport Pty Ltd
* Mia Mia House in the Desert Pty Ltd
* Mia Mia Executive Apartments Pty Ltd
* Modular Accommodation Pty Ltd
* Morgan Street Pty Ltd
Auzcorp Pty. Ltd. developed residential and commercial projects;
and operates accommodation and catering facilities in the Pilbara
region of Western Australia.
EVELYN ST: First Creditors' Meeting Set for April 8
---------------------------------------------------
A first meeting of the creditors in the proceedings of Evelyn St
Group Pty Ltd will be held on April 8, 2019, at 10:00 a.m. at Level
4, 88 Phillip Street, in Parramatta, NSW.
Michael John Morris Smith of Smith Hancock was appointed as
administrator of Evelyn St on March 27, 2019.
HUNTER WINE: First Creditors' Meeting Set for April 12
------------------------------------------------------
A first meeting of the creditors in the proceedings of Hunter Wine
Services (Australia) Pty Limited will be held on April 12, 2019, at
10:00 a.m. at the offices of KordaMentha, Level 5, Chifley Tower,
at 2 Chifley Square, in Sydney, NSW.
Rahul Goyal, Scott David and Harry Langdon of KordaMentha were
appointed as administrators of Hunter Wine on April 2, 2019.
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C H I N A
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GF SECURITIES: Saddled With Offshore Hedge Fund Loss
----------------------------------------------------
Liu Caiping and Han Wei at Caixin Global reports that
Shenzhen-listed GF Securities Co. became the second Chinese
brokerage house to be saddled with massive losses on foreign
investments, reflecting growing exposure to risk after years of
aggressive offshore expansion by Chinese financial institutions.
According to the report, GF Securities said on March 27 that its
subsidiary hedge fund, GTEC Pandion Multi-Strategy Fund SP, had a
loss of $139 million in 2018, mainly on foreign exchange trades,
leaving the fund with negative capital of $44 million.
Securities regulators in the company's home base of Guangdong
blasted GF Securities for failing to properly manage the unit's
risk. The ripple effects are putting pressure on Citigroup Inc. as
the U.S. investment bank faces as much as $180 million of losses on
a loan to the fund, Caixin relates citing Bloomberg.
The unit's red ink lowered GF Securities' 2018 net profit by CNY919
million (US$137 million) to CNY3.9 billion, a 53% drop from the
previous year, Caixin discloses citing GF Securities' annual
financial report released March 27.
Caixin says the GF Securities loss prompted the Guangdong
securities regulator to issue an administrative order requiring the
brokerage house to examine its internal operation and risk control
mechanism and rectify flaws. The securities regulator said GF
Securities failed to properly manage risk and business prudence in
its overseas subsidiaries.
The Pandion fund was registered in the Cayman Islands in 2016,
specializing in equity derivative trading. Its investment targets
later expanded into interest-rate products, foreign exchange
derivatives and foreign exchange volatility variance swaps,
according to GF Securities.
GF Securities said the hedge fund's investments struggled with
volatile foreign exchanges and shrinking market liquidity since
August 2018, Caixin relays.
Pandion's prime broker asked to increase its margin deposits to
$129 million as of Dec. 31, GF Securities said. The fund had
initially deposited $30 million. GF Securities' Hong Kong unit,
which holds a 99.9% interest in the fund as of the end of 2018, may
face potential litigation, GF Securities, as cited by Caixin,
said.
For 2018, GF Securities booked CNY15.3 billion of revenue, down
29.4% from the previous year, Caixin discloses.
GIONEE COMMUNICATION: Administrators Prepare for Liquidation
------------------------------------------------------------
Caixin Global reports that bankrupt smartphone-maker Gionee
Communication Equipment Co. Ltd.'s liabilities are more than double
its current assets, the administrator handling the case said, as
the former high-flyer prepares to be liquidated after falling
victim to intense competition.
Caixin relates that the administrator disclosed its estimates of
Gionee's assets and liabilities at the first meeting of the
company's creditors on April 2 in its hometown of Shenzhen, just
months after it was forced into bankruptcy. A planned liquidation
discussed at the meeting would make Gionee the first major victim
of a looming shakeout in China's fiercely competitive smartphone
sector, which is entering the end of a classic boom-bust cycle
after several years of explosive growth, the report says.
An initial examination of Gionee's books had shown it had net
assets of about CNY8.54 billion (US$1.27 billion) and liabilities
of CNY9.39 billion at the end of 2018, Caixin discloses citing
documents showed to the company's creditors at the meeting. But the
administrator's own review determined that Gionee's net assets were
much less, totaling just CNY3.84 billion, while its liabilities
totaled of CNY9.64 billion.
According to Caixin, the company's creditors, which include
everyone from its lenders to suppliers, were given until March to
report the size of the obligations owed to them by Gionee. Some 372
reported being owed total debts involving about CNY21.1 billion,
according to the documents cited by Caixin. Of that figure, some
CNY17.4 billion in obligations owed to 324 parties had been
confirmed as of the Tuesday [April 2] meeting.
More than 30 of the creditors were financial institutions, led by
Guangdong Nanyue Bank, which was owed CNY1.84 billion, and Ping An
Bank, which was owed CNY1.36 billion. Gionee was in debt to other
financial institutions such as Citic Bank, China Merchants Bank and
HSBC, as well as brokerages, trusts and other financial
organizations, Caixin discloses.
Founded in 2002, Gionee was one of China's earliest mobile phone
brands. It produced a record 40 million cellphones in 2016, making
it the country's fifth-largest manufacturer. But its finances began
to deteriorate as competition heated up in China's smartphone
market, and the company began failing to pay suppliers, paralyzing
its business.
Caixin says domestic media also reported that Gionee's woes may
have been compounded by the gambling habits of founder Liu Lirong,
which involved large amounts of company funds. In November, nearly
20 of the company's suppliers asked a Shenzhen court to step in
after making little progress in months of talks on restructuring
billions of yuan in debt.
Of the company's CNY3.84 billion in assets, currency only accounts
for CNY288 million. The rest is fixed assets and long-term
investments. One of the most valuable of those investments is
Gionee's 3% stake in WeBank, an online bank also backed by internet
giant Tencent, which the company purchased in 2014 for CNY90
million. Since then, the size of the investment has increased by a
factor of about 33, based on the bank's latest valuation.
Under the administrator's plan, Gionee's assets will now be put
under a single administration, Caixin says. The assets will then be
systematically liquidated through processes including auctions,
sales and transfers, Caixin notes.
Based in Shenzhen, China, Gionee Communication Equipment Company
Ltd. manufactured cellular telephones.
The Shenzhen Intermediate People's Court accepted the bankruptcy
liquidation application filed by Huaxing Bank against the company
on Dec. 10, 2018.
LANDSEA GREEN: Moody's Affirms B2 CFR & B3 Rating on Unsec. Notes
-----------------------------------------------------------------
Moody's Investors Service has affirmed Landsea Green Group Co.,
Ltd.'s B2 corporate family rating and the B3 senior unsecured
rating on its existing notes.
The outlook is positive.
RATINGS RATIONALE
"Landsea's B2 corporate family ratings reflect its asset-light
business model, allowing it to earn service income while requiring
limited capital and borrowed funds when compared to fully-owned
property development projects," says Cedric Lai, a Moody's Vice
President and Senior Analyst.
Moody's expects Landsea's service income will grow to around
RMB1.1-RMB1.3 billion per annum over the next 12-18 months,
equivalent to about 1.6x-1.8x of annual interest expenses, from
around RMB1.0 billion in 2018.
Under its asset-light business model, the company takes various
levels of ownership in property development projects in China (A1
stable) through entrusted development (ownership of less than 10%),
minority interest co-operations (30% or less), and joint
developments (50%).
At the end of 2018, Landsea had a weighted-average equity ownership
of around 28% in land reserves of its property projects, as
measured by attributable gross floor area (GFA) to total GFA under
management. The company aims to maintain its ownership at a similar
level in the longer term.
Under its asset-light business model, Landsea is reliant on
property development projects brought in by investors and does not
need to rely heavily on land purchases, thus reducing its funding
needs.
At the same time, Landsea uses its brand name for all projects and
exercises full operational control during the development phase. In
turn, it receives a share of the project profits, and collects
performance and management fees (i.e. service income).
Landsea's B2 corporate family rating is supported by its recognized
brand in the niche green property market. Landsea has attracted
buyers because its green products demonstrate sustained demand and
higher selling prices when compared to traditional property
offerings.
Landsea's B2 rating also considers the good quality investing
partners for its property projects, such as Ping An Real Estate
Company Ltd, China Orient Asset Management Co., Ltd. (A3 stable),
and China Cinda Asset Management Co., Ltd. (A3 stable). The
presence of these quality partners reflects Landsea's good brand
name and strong sales execution ability.
On the other hand, the B2 corporate family rating is constrained by
the company's developing track record for its asset-light business
model.
Landsea adopted an asset-light business model in 2015, and the
sustainability of this model will depend on the company's ability
to secure new projects from investors through the property cycles.
Another rating constraint is the company's narrow funding sources.
In 2018, Landsea's funding base had a high proportion of
shareholder loans, high-cost loans from non-bank financial
institutions and private notes which account for about 31% of total
debt.
Moody's notes that the company is exploring other funding channels
to expand its investors base.
The company's liquidity position is adequate. As of 31 December
2018, Landsea's total cash balance of RMB5.9 billion was sufficient
to cover its short-term debt of RMB684 million over the next 12
months.
The positive outlook reflects Moody's expectation that the company
will over the next 12-18 months maintain credit metrics that are
strong when compared with its B2-rated Chinese property peers.
Specifically, Moody's expects the company will maintain debt
leverage -- as measured by adjusted debt/EBITDA -- will trend
towards around 3.7x-3.9x from 3.4x in 2018 while EBIT/interest will
stabilize at 3.2x-3.4x from 3.7x over the same period.
The B3 senior unsecured debt rating is one notch lower than the
corporate family rating due to structural subordination risk.
This subordination risk refers to the fact that the majority of
Landsea'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
expected recovery rate for claims at the holding company will be
lower.
Upward rating pressure could emerge if Landsea successfully
executes its asset-light business model, grows in scale and
improves its credit metrics, with EBIT/interest coverage above 3.5x
and adjusted debt/EBITDA below 4.0x on a sustained basis.
On the other hand, the rating outlook could be revised to stable if
Landsea is unlikely to grow in scale, secure new projects from good
quality investment partners or achieve Moody's expected credit
metrics over the next 12-18 months.
The principal methodology used in these ratings was Homebuilding
And Property Development Industry published in January 2018.
Landsea Green Properties Co., Ltd. is a property developer, as well
as a property development and management services provider in China
and the US, specializing in green property projects. It listed in
Hong Kong through a reverse IPO in 2013, after acquiring Shenzhen
High-Tech Holding Limited.
MEINIAN ONEHEALTH: Fitch Rates $200MM Senior Notes Due 2021 'BB+'
-----------------------------------------------------------------
Fitch Ratings has assigned Meinian Onehealth Healthcare Holdings
Co., Ltd.'s (Meinian, BB+/Stable) USD200 million 7.75% senior notes
due 2021 a final rating of 'BB+'.
The notes will be issued by Meinian's indirectly wholly owned
subsidiary Mei Nian Investment Limited, and unconditionally and
irrevocably guaranteed by Meinian. The notes are rated at the same
level as Meinian's senior unsecured rating because they constitute
its direct and senior unsecured obligations. The final rating is
the same as the expected rating assigned on November 8, 2018 and
follows the receipt of final documentation conforming to
information already received.
Meinian's ratings are supported by the company's leadership in
China's private health check-up market, stable customer base,
visible expansion path and positive industry dynamics.
Meinian's ratings are constrained by its relatively low FFO
fixed-charge coverage and high FFO adjusted gross leverage, which
are mitigated by its flexible rental terms. Meinian's scale is
currently small; and while Fitch expects the company to benefit
from rapid industry growth, its post-investment free cash flow
(FCF) may remain persistently negative and the company faces
execution risks in the expansion.
KEY RATING DRIVERS
Market Leader in China: Fitch thinks Meinian's market-leading
position and strong portfolio of corporate customers will be
maintained in the coming years. Meinian has been the largest
medical examination service provider in China in recent years and
solidified its market position with last year's acquisition of
Ciming Health Checkup Management Group Co., Ltd. (Ciming), which
was previously the third-largest provider. Fitch estimates
Meinian's market share by revenue to be over 20%, and expects its
high brand recognition and comprehensive network of check-up
centres and service platforms to support its market leadership in
the short to medium term.
Improving Customer Mix: Meinian's corporate customers provide a
stable client base, but the company is expanding among individual
customers, who are typically less price sensitive than corporate
customers. Individuals accounted for 23% of Meinian's health
check-up revenue in 2017, up from 15% in 2016. Not only would a
higher proportion of individual customers increase revenue, but
profitability would also benefit with higher customer traffic and
lower seasonality of visits, resulting in better operating leverage
as fixed costs of the medical centres, like staff and rental costs,
should remain the same in general.
Increasing Health Consciousness: Fitch believes Meinian will
benefit from growth in the medical examination industry. The
overall industry is likely to grow rapidly with structural support
from rising health awareness, an ageing population and higher
disposable income. Fitch expects growth of private providers like
Meinian to outpace the overall industry's thanks to demand for
higher quality services than those from public providers,
increasing demand for early detection of diseases and enhanced
corporate employee benefits.
Expansion Strategy: Meinian plans to almost triple the number of
check-up centres in the next four years through acquisitions of
minority and controlling interests in these centres. Meinian has
also teamed up with third parties to jointly invest in check-up
centres through investment funds, which could reduce the company's
cash outlay per centre. Expansion through acquisitions of both
minority and controlling interests in centres and investment funds
allow Meinian to increase its network faster with more limited
financial commitments than its peers, which generally rely on
investment in centres that they own and operate.
Promising Growth Prospects: Fitch expects Meinian to continue to
see relatively high revenue growth and gradual improvements in
profitability as it expands its network, attracts more individual
customers and provides more customised services with higher
margins. Fitch believes Meinian has adequate internal and external
resources to support its expansion through acquisitions. However,
execution risks may arise during the active acquisitions and fast
expansion. Consistent service quality at individual check-up
centres will depend on effective implementation of Meinian's
operational standards and management system.
Moderating Growth in 2H18: Meinian's revenue growth slowed in 2018,
partly due to the company's efforts to reduce seasonality and
encourage users to get check-ups earlier in the year. The company
was also affected by media reports regarding certain instances of
doctors practicing without multi-site licences in Guangzhou
starting in 3Q18. Revenue growth was 24% yoy in 2H18, compared with
57% in 1H18. In response to the media reports, management has
placed more emphasis on quality control and the growth rate in 4Q18
was the same as 3Q18. Fitch expects Meinian to continue to expand
its service network but at a more controlled pace.
Moderately Weak Financial Profile: Meinian's financial profile is
likely to remain moderately weak in the short term, given its
expansion plan. Fitch expects capex and acquisitions to continue to
rise in 2018-2021 from 2017 levels. In addition, rental expenses
may increase in line with the expansion in its check-up service
centre network. As a result, Meinian's FFO adjusted net leverage
may rise in 2018-2019 to 3.4x-3.5x from 3.1x in 2017. Meinian's
total debt reached CNY5.2 billion by end-3Q18, up considerably from
CNY3.0 billion at end-2017. Fitch believes 4Q18 performance is
critical to Meinian's full-year 2018 financial metrics as
October-December is usually the peak season for sales and cash
collection.
DERIVATION SUMMARY
Meinian's clear market leadership in China's private health
check-up market and stable customer base generally compare
favourably against peers and balance its financial profile, which
is moderately weak for companies in the 'BB' range. Although there
are no other rated peers specifically in this market, Fitch
benchmarks against retail companies that also use leased operating
premises, but recognises the private health check-up market in
China is more stable and has higher growth visibility.
Meinian presents a stronger business profile relative to
China-based 361 Degrees International Limited (BB-/Stable) as
Meinian is the leader in its market while 361 Degrees ranks lower
in the sportswear market. Although the sportswear market is also
likely to grow in China, Fitch thinks the less fragmented health
check-up market and the strong base of corporate customers provides
Meinian with more stable traffic and growth prospects. Meinian's
stronger business profile justifies a rating above 361 Degrees
despite a moderately weak financial profile due to rental expenses
forming a big share of costs.
Meinian's financial profile is more comparable to global retail
issuers, such as Marks and Spencer Group Plc (BBB-/Stable) as
rental expenses are an important cost component. Meinian's
financial metrics are largely in line with those of Marks and
Spencer's except that Meinian generates stronger operating margins.
Meinian also enjoys more promising growth potential and more
positive industry dynamics relative to Mark and Spencer. However,
Meinian is rated below Mark and Spencer due to its much smaller
operating scale and consistent negative post-investment FCF, which
Fitch expects to continue in the next few years.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
- Average revenue growth of over 30% in 2018-2021.
- EBITDA margin of 22%-23% in 2018-2021.
- Rental expense to revenue ratio of 9%-10% in 2018-2021.
- Capex of CNY1.4 billion-1.9 billion in 2018-2021 (including
initial minority investments in new medical centres).
RATING SENSITIVITIES
Developments that May, Individually or Collectively, Lead to
Positive Rating Action
- Greater operating scale coupled with sustained neutral or
positive post-investment FCF.
Developments that May, Individually or Collectively, Lead to
Negative Rating Action
- Significant loss of market share in health check-up services.
- FFO adjusted gross leverage sustained above 4.5x (2017: 4.5x).
- FFO fixed-charge coverage sustained below 2.2x (2017: 2.6x).
LIQUIDITY
Adequate Liquidity: Meinian's debt maturity profile is dependent
upon short-term financing (representing around 60% of total debt)
but its liquidity is sufficient to meet its obligations. Short-term
debt of almost CNY3.0 billion at end-1H18 can be covered by CNY1.5
billion of available cash and around CNY2.7 billion of unutilised
credit facilities, but these facilities are uncommitted as
committed facilities are uncommon in the Chinese banking
environment.
SUNAC CHINA: Moody's Hikes CFR to Ba3 & Unsec. Debt Rating to B1
----------------------------------------------------------------
Moody's Investors Service has upgraded Sunac China Holdings
Limited's corporate family rating (CFR) to Ba3 from B1.
Moody's has also upgraded Sunac's senior unsecured debt ratings to
B1 from B2.
The outlook is stable.
RATINGS RATIONALE
"The ratings upgrade reflects our expectation that Sunac will
continue to improve its leverage in the next one to two years,
driven in part by its strong sales execution and cash collection
from property sales," says Danny Chan, a Moody's Assistant Vice
President and Analyst.
"The upgrade also reflects Sunac's strengthened financial
discipline, which will help control the company's capital spending
for business growth," says Chan who is also Moody's Lead Analyst
for Sunac.
Moody's expects that Sunac's debt leverage — as measured by
revenue/adjusted debt (including adjustments for its shares in
joint ventures and associates) — will improve to 75%-80% over the
next 12-18 months from around 60% in 2018 and around 36% in 2017,
supported by an expected increase in revenue recognition from
strong contracted sales and controlled spending on land purchases
and non-property investments.
Meanwhile, its interest coverage — as measured by adjusted
EBIT/interest — will likely improve to 3.0x-3.2x over the next
12-18 months from around 2.6x in 2018. These credit metrics support
its Ba3 corporate family rating.
Sunac continued to report solid contracted sales growth in 2018,
with a 27% year-on-year increase during the year, following 140%
and 121% growth in 2017 and 2016.
Moody's expects the company's contracted sales will remain solid
but slow down in the next 1-2 years from a high base. Moody's
believes its established brand name, quality products and sizable
saleable resources of approximately RMB783 billion for 2019 will
support its solid but moderating sales growth.
The company's overall profitability has improved, as evidenced by
an increase in its reported gross profit margins to 25.0% in 2018
from 20.7% in 2017. The improvement was the result of increased
property prices in its major markets and the delivery of more
profitable projects in the past two to three years.
In addition, the company has shown a more disciplined approach to
land acquisitions over the past 12 months. Moody's expects the
company will remain cautious in its land acquisitions, keeping its
attributable spending on land below 25%-30% of its attributable
contracted sales over the next 12-18 months compared to an
estimated annual average of 45%-70% during 2016-2017.
Sunac's Ba3 CFR reflects the company's strong sales execution, its
leading brand and market position in China's Tier 1 and Tier 2
cities, as well as the good quality of its land bank. The rating
also considers Sunac's good liquidity profile, driven by its rapid
asset turnover business model.
Sunac's strong liquidity profile is evidenced by its cash balance
of RMB120 billion at the end of 2018, which covered 131% of its
short-term debt.
However, the CFR is constrained by the modest credit metrics
associated with Sunac's business expansion. In addition, the
adoption of a rapid asset turnover business model has reduced the
stability of its profitability and interest coverage. Nevertheless,
Moody's expects that the company's credit metrics will improve over
the next 12-18 months.
The stable outlook on Sunac reflects Moody's expectation that the
company will further improve its profitability, remain prudent in
its financial management and control its investments in
non-property businesses.
Upward ratings pressure could emerge if Sunac: (1) demonstrates its
ability to exercise restraint in its non-core business investments;
(2) maintains its solid liquidity position; and (3) improves its
credit metrics, such that adjusted revenue/debt rises above
95%-100% and adjusted EBIT/interest rises above 3.5x-4.0x on a
sustained basis.
However, the ratings could be downgraded in case of: (1) a material
contracted sales decline; (2) a weakening liquidity position; (3)
substantial investments in its non-property development businesses;
or (4) weakening credit metrics, such that adjusted revenue/debt
falls below 60%-70% and adjusted EBIT/interest drops below
2.5x-3.0x on a sustained basis.
The principal methodology used in these ratings was Homebuilding
And Property Development Industry published in January 2018.
Listed on the Hong Kong Stock Exchange on October 7, 2010, Sunac
China Holdings Limited is an integrated residential and commercial
property developer with projects in China's main economic regions.
The company develops a diverse range of properties, including
high-rise and mid-rise residences, detached villas, town houses,
retail properties, offices and car parks.
=================
H O N G K O N G
=================
SEASPAN CORP: Egan-Jones Lowers Commercial Paper Ratings to B
-------------------------------------------------------------
Egan-Jones Ratings Company, on March 28, 2019, downgraded the
foreign commercial and local commercial paper ratings on debt
issued by Seaspan Corporation to B from A3.
Seaspan Corporation operates as an independent charter owner and
manager of containerships in Hong Kong. As of March 1, 2019, it
operated a fleet of 112 containerships. The company was
incorporated in 2005 and is based in Hong Kong, Hong Kong.
=========
I N D I A
=========
A.M. VINYL: CARE Migrates D Ratings to Not Cooperating Category
---------------------------------------------------------------
CARE Ratings has migrated the rating on bank facilities of A.M
Vinyl Private Limited (AMVPL) to Issuer Not Cooperating category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 31.50 CARE D; Issuer not Cooperating,
Facilities Based on Best available
information
Short term Bank 13.50 CARE D; Issuer not Cooperating,
Facilities Based on Best available
information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from AMVPL to monitor the rating
vide e-mail communications dated Feb. 25, 2019 , Feb. 27, 2019 ,
Mar. 1, 2019 and numerous phone calls. However, despite CARE's
repeated requests, the company has not provided the requisite
information for monitoring the ratings. In line with the extant
SEBI guidelines, CARE has reviewed the rating on the basis of the
best available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating. The rating on A.M. Vinyl
Private Limited's bank facilities will now be denoted as CARE D;
ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The ratings take into account the delays in debt servicing.
Detailed description of the key rating drivers
At the time of last rating on Sept. 4, 2018, the following were the
rating weaknesses and strengths:
Key Rating Weaknesses
Ongoing Delays in Debt Servicing: Due to tight liquidity position,
there have been ongoing delays in the interest servicing and
regular overdrawal in the working capital limit utilization.
A.M Vinyl Private Limited (AMVPL) was incorporated in 2004 by Mr.
Ashok Chopra who has more than four decades of industry experience.
AMVPL is engaged in the manufacturing and trading of PVC products
and its product portfolio includes PVC floorings, PVC leather
cloth, PP non-woven spun bonded fabric and PVC sheeting. The
products manufactured by AMVPL find application in various
industries like automobiles and power generation. The primary
product manufactured by AMVPL is Coated Textile Fiber which is
majorly used in car mats, seat covers, insulated mats, shoe soles
and auto roof-tops amongst its other uses. The manufacturing
facility for AMVPL is located in Bhiwadi, Rajasthan.
AANCHAL COLLECTION: Ind-Ra Migrates 'B+' Rating to Non-Cooperating
------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Aanchal Collection
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 B+
(ISSUER NOT COOPERATING)' on the agency's website.
The instrument-wise rating actions are:
-- INR150 mil. Fund-based working capital limit (long-term)
migrated to non-cooperating category with IND B+ (ISSUER NOT
COOPERATING) rating; and
-- INR15 mil. Non-fund-based working capital limit (short-term)
migrated to non-cooperating category with IND A4 (ISSUER NOT
COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
April 5, 2018. Ind-Ra is unable to provide an update, as the agency
does not have adequate information to review the ratings.
COMPANY PROFILE
Aanchal Collection manufactures women's garments at its plant in
Kolkata, West Bengal, and it has its own showroom in the city.
ANAND MINE: Ind-Ra Migrates BB LT Issuer Rating to Non-Cooperating
------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Anand Mine Tools
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:
-- INR130 mil. Fund-based working capital limits migrated to non-
cooperating category with IND BB (ISSUER NOT COOPERATING)
rating;
-- INR40 mil. Proposed fund-based working capital limits*
migrated to non-cooperating category with Provisional IND BB
(ISSUER NOT COOPERATING) rating;
-- INR27.5 mil. Term loan due on July 2021 migrated to non-
cooperating category with IND BB (ISSUER NOT COOPERATING)
rating; and
-- INR16 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 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 2010, Anand Mine Tools is an authorized dealer of
Joseph Cyril Bamford for sales and services of the latter's
equipment and spare parts in Nagpur, Chandrapur, Wardha, Yavatmal,
Bhandara, Gondia, Gadchiroli, and Wani.
BALAJI MOBITECH: CARE Migrates 'D' Ratings to Not Cooperating
-------------------------------------------------------------
CARE Ratings has migrated the rating on bank facilities of Balaji
Mobitech Private Limited (BMPL) to Issuer Not Cooperating
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 10.00 CARE D; Issuer not cooperating;
Facilities Based on best available
Information
Short-term Bank 10.00 CARE D; Issuer not cooperating;
Facilities Based on best available
Information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from Balaji Mobitech Private
Limited to monitor the rating(s) vide e-mail communications dated
Feb. 26, 2019, Feb. 27, 2019, Feb. 28, 2019 and numerous phone
calls. However, despite CARE's repeated requests, the company has
not provided the requisite information for monitoring the ratings.
In line with the extant SEBI guidelines, CARE has reviewed the
rating on the basis of the best available information which
however, in CARE's opinion is not sufficient to arrive at a fair
rating. The rating on Balaji Mobitech Private Limited bank
facilities will now be denoted as CARE D; ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The ratings take in to account ongoing delays in the debt
servicing.
Detailed description of the key rating drivers
At the time of last rating on April 5, 2018, the following were the
rating strengths and weaknesses (updated for the information
available from Registrar of Companies):
Key Rating Weaknesses
Ongoing Delays in interest servicing: Due to ongoing tax &
regulatory issues there were ongoing delays in servicing of
interest by the company in the past. The same was confirmed by the
company's banker.
Key Rating Strengths
Experienced Promoters: BMPL has been in the mobile trading business
since last 8 years. The company has recently been
purchased by Mr. Amit Singhania & Mr. Amit Aggarwal, who have been
associated with BMPL since inception. The directors also have
previous experience in this field. Mr. Amit Singhania has been in
mobile trading line for past 13 years.
Balaji Mobitech Pvt. Ltd. (BMPL) was incorporated on April 25,
2007. BMPL is involved in trading of mobile phones, mobile
phone batteries & chargers and accessories such as hand free kit,
data cable, MMC card etc. As already communicated during last
review, in July'15, Mr. Sushil Kumar sold his entire share to the
current director's viz. Mr. Amit Singhania & Mr. Amit Aggarwal.
BHARTIA YARNS: Ind-Ra Migrates 'BB+' LT Rating to Non-Cooperating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Bhartia Yarns
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:
-- INR10 mil. Fund-based facilities migrated to non-cooperating
category with IND BB+ (ISSUER NOT COOPERATING) / IND A4+
(ISSUER NOT COOPERATING) rating; and
-- INR90 mil. Non-fund-based facilities migrated to non-
cooperating category with IND A4+ (ISSUER NOT COOPERATING)
rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
April 27, 2018. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Bhartia Yarns is engaged in importing and trading of textiles and
other related products including polyester yarns, polyester staple
fibers, viscose spun yarns, embroidery threads, and related
products.
CAPITAL ENTERPRISE: CARE Migrates D Ratings to Not Cooperating
--------------------------------------------------------------
CARE Ratings has migrated the rating on bank facilities of Capital
Enterprises (CE) to Issuer Not Cooperating category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 5.00 CARE D; Issuer Not Cooperating;
Facilities Based on no available
Information
Short term Bank 7.00 CARE D; Issuer Not Cooperating;
Facilities Based on no available
Information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from CE to monitor the rating
vide e-mail communications/letters dated February 4, 2019, February
6, 2019, February 11, 2019 and numerous phone calls. However,
despite CARE's repeated requests, the company has not provided the
requisite information for monitoring the ratings. In line with the
extant SEBI guidelines, CARE has reviewed the rating on the basis
of the publicly available information which however, in CARE's
opinion is not sufficient to arrive at a fair rating. The rating on
entity's bank facilities will now be denoted as CARE D; ISSUER NOT
COOPERATING. However, banker could not be contacted. However,
banker could not be contacted.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
Detailed description of the key rating drivers
At the time of last rating done on December 14, 2017 the following
were the rating strengths and weaknesses:
Key Rating Weaknesses:
The rating takes into account ongoing delay in the servicing of the
bank debt obligations on account of the stretch liquidity position
of the company.
Capital Enterprises (CE) was established in 2000 as a
proprietorship entity by Mrs. Senbom Taipodia under the guidance of
Mr. Dayanand Thakur (Husband of Mrs. Senbom Taipodia) of Arunachal
Pradesh. Since inception; the entity has been engaged in
electrical, mechanical, infrastructural works and civil
construction in the state of Arunachal Pradesh. The dayto- day
affairs of the entity are looked after by Mrs. Senbom Taipodia with
adequate support from her husband Mr. Dayanand Thakur. Both are
having more than one and a half decade of experience in the
relevant line of business.
CHANDNA INFRAPROJECTS: CARE Reaffirms D Ratings on INR10cr Loans
----------------------------------------------------------------
CARE Ratings reaffirmed ratings on certain bank facilities of
Chandna Infraprojects (India) Private Limited (CIIPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 9.50 CARE D Reaffirmed
Short-term Bank
Facilities 0.50 CARE D Reaffirmed
Detailed Rationale & Key Rating Drivers
The ratings of CIIPL continue to take into account ongoing delays
in debt servicing of interest and installment of its term loan
owing to stressed liquidity.
Detailed description of the key rating drivers
Key Rating Weaknesses
Irregularity in debt servicing due to stressed liquidity: The
company is engaged in the business of processing of granites which
is mainly used in the cyclical real estate sector. It maintains
inventory of 245-260 days and also collection period got stressed.
Due to it, the liquidity position of the company has deteriorated
and that led to delay in debt servicing. There are various
instances of delay in debt servicing of interest and installment of
term loan. The banker of the company has also verbally confirmed
the same. It has utilized fully its working capital limit in last
twelve month ended February, 2019.
Jaipur (Rajasthan) based Chandna Infraprojects (India) Private
Limited (CIIPL), incorporated in 2010, is a part of Chandna
Group which is engaged primarily in the mining of marbles and
granites as well as cutting and processing of marbles since 2000.
DECCAN JEWELLERS: CARE Reaffirms B+ Rating on INR29cr LT Loan
-------------------------------------------------------------
CARE Ratings reaffirmed ratings on certain bank facilities of
Deccan Jewellers Private Limited (DJPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 29.00 CARE B+; Stable Reaffirmed
Detailed Rationale
The rating assigned to the bank facility of DJPL continues to
remain constrained by the price risk associated with inventory on
account of volatility in gold prices, working capital intensive
nature of operations leading to stretched liquidity position and
presence in a highly competitive and fragmented gold and jewellery
industry. The ratings also factor in decline in revenues and
margins resulting in cash losses during FY18 (FY refers to the
period from April 1 to March 31) along with deterioration in
capital structure on account of erosion of net worth. The rating is
however, underpinned by the long-standing experience of the
promoters with established brand image, infusion of funds by
promoters to support the operations and debt servicing of the
company and favorable industry prospects.
The ability of the company to improve its operational and financial
risk profiles are the key rating sensitivities.
Detailed description of the key rating drivers
Key Rating Weaknesses
Decline in total income and margins resulting in cash losses for
FY18: The total operating income (TOI) of the company declined by
16.06% during FY18 on account of the decline in sales due to
shutting down of operations at Vizag outlet coupled with effect of
GST implementation in FY18. The company registered operating losses
(INR0.25 crore) and cash losses (INR4.04 crore) at the back of
increased raw material costs and interest burden.
During 9MFY19 (Provisional), the company recorded gross revenue of
INR50.14 Crore and operational profit (PBILDT) of INR3.38 Crore.
Deterioration in capital structure as on March 31, 2018: The
capital structure of the company witnessed deterioration as on
March 31, 2018 vis-a-vis March 31, 2017 at the back of erosion in
net worth due to loss incurred during FY18. As on March 31, 2018,
the overall gearing of the company was 5.26x as on March 31, 2018.
Price risk associated with inventory on account of volatile gold
prices: DJPL earns around 90-95% of its revenue from sale of gold
jewellery. With DJPL's high level of inventory in hand, it is
exposed to adverse price movements in gold, which can consequently
have a bearing on the margin and the overall financial risk profile
of the company.
Working capital intensive nature of business: Being a jewellery
retailer, DJPL has to maintain high level of inventory for the
display and sales to the customers at its showrooms. The working
capital cycle stands at 211 days in FY18 and average working
capital utilization levels continue to remain high at 99% for
12-month period ended December, 2018.
Stretched liquidity position: The liquidity position of the company
continues to remain weak at the back of high inventory
period. However, on absolute levels, the inventory level declined
as on March 31, 2018. The company is benefitted from the continuous
support from the promoter through infusion of funds for debt
servicing. The company has a stretched operating cycle of 211 days
and does not have any exposure to long-term debt obligation.
Further, the current ratio of the company is comfortable at 1.20x
with cash & bank balance of INR0.36 crore for year ended on
March 31, 2018.
Presence in highly competitive and fragmented gold jewellery
industry: The G&J industry in India is characterized by the
presence of a large number of organized and unorganized players
with the share of organized jewellery retail sector (comprising
national and regional retail chains) at a mere 20%.
Key Rating Strengths
Experienced promoters and established brand name: DJPL is closely
held and managed by the family members of the promoters, who belong
to Mohammed Khan & Sons Group, which has been in the jewellery
business since 1936 and has built a strong brand reputation in
Andhra Pradesh.
Infusion of funds by promoters in the form of unsecured loans: The
promoters continue to extended financial support to the company by
way of unsecured loans from the directors.
Geographically diversified revenue stream: DJPL continues to
diversify its revenue stream through its 4 retail outlets spread
across Vijayawada, Rajahmundry, Kakinada and Warangal. Vijayawada
and Rajahmundry continue to remain the highest sales contributors
during FY18.
Favourable industry prospects: Retail jewellery segment in the
country is expected to see double digit growth rates in revenue in
FY18 on back of regulatory headwinds fading out and continued
favorable demographics. Overall domestic gems & jewellery demand
would see a growth of 6%-7% in volume terms over a medium term.
Deccan Jewellers Private Ltd (DJPL) was incorporated in February
2005 by families of Mr. Azizul Rahaman Khan and Mr. Fazulul Rahaman
Khan, who belong to the Mohammed Khan & Sons family. DJPL is mainly
engaged into retailing of gold (BIS Hallmark) ornaments and also
deals with silver, diamond and branded jewelry. DJPL currently has
five retail outlets with a total area of 20,000 square feet (sft.)
spread across Vijayawada, Rajahmundry, Kakinada and Warangal. The
operations are being carried out under the brand name of 'Mohammed
Khan & Sons Jewellers'. Presently, Mr. Fazalul Rahaman Khan and his
son, Mr. Irfan Khan (Managing Director) run the company.
DHRU MOTORS: Ind-Ra Affirms & Then Withdraws 'BB' LT Issuer Rating
------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed and withdrawn M/s
Dhru Motors' (DM) Long-Term Issuer Rating of 'IND BB'. The Outlook
was Stable.
The instrument-wise rating action is:
-- The 'IND BB' rating on the INR345.0 mil. Fund-based working
capital facilities* affirmed and withdrawn.
* Affirmed at 'IND BB'/Stable/'IND A4+' before being withdrawn
KEY RATING DRIVERS
The affirmation reflects DM's continued medium scale of operations,
indicated by revenue of INR1,819.0 million in FY18 (FY17:
INR1,530.0 million). Revenue growth was driven by an increase in
orders. DM had booked INR748.0 million in revenue for 1HFY19.
The ratings reflect continued modest credit metrics, albeit
improved. DM's interest coverage (operating EBITDA/gross interest
expense) improved to 2.0x in FY18 from 1.5x in FY17. Its net
financial leverage (total adjusted net debt/operating EBITDA)
enhanced to 2.4x in FY18 from 4.0x in FY17. The improvement in the
credit metrics was primarily driven by a rise in operating EBITDA
to INR61 million in FY18 from INR49.0 million in FY17.
The ratings also reflect the intense competition in the automobile
dealership business.
The rating factors in the average operating margin of DM of 3.3% in
FY18 (FY17: 3.2%). In addition, its return on capital stood at
around 14% in FY18 (FY17: 15%).
The ratings, however, are supported by DM's comfortable liquidity.
The cash flow from operations of DM turned positive to INR62.0
million in FY18 (FY17: negative INR19.0 million) due to a change in
working capital. DM's free cash flow turned positive at INR35.0
million (FY17: negative INR 46.0 million). DM had cash of INR148.0
million in FY18 (FY17: INR25.0 million). Its net cash conversion
cycle improved to 25 days in FY18 from 38 days in FY17 due to a
decrease in debtor days.
The ratings continue to be supported by the promoters' experience
of over two decades in the automobile dealership business, 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 March 31, 2017, for credit rating agencies.
COMPANY PROFILE
DM is a family-owned partnership firm started in 1996. It is the
authorized dealer of vehicles manufactured by Maruti Suzuki India
Limited in Surat, Gujarat. The firm is managed and run by Mr. Nayan
Intwala.
DORMAN DOOR: CARE Assigns B+ Rating to INR6cr LT Loan
-----------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of Dorman
Door Private Limited (DDPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 6.00 CARE B+; Stable Assigned
Detailed Rationale and key rating drivers
The rating assigned to the bank facilities of DDPL is primarily
constrained by small and fluctuating scale of operation, weak
profitability margin and leveraged capital structure. The rating is
further constrained by elongated operating cycle and presence of
company in highly competitive industry. The rating, however, draws
comfort from experienced management.
Going forward; ability of the company to profitably increase its
scale of operations while improving its capital structure shall be
the key rating sensitivity.
Detailed description of the key rating drivers
Key Rating Weaknesses
Small and fluctuating Scale of Operations: The scale of operations
of firm is small and fluctuating as marked by total operating
income and gross cash accruals of INR19.81 crores and INR0.05
crores respectively during FY18 (FY refers to the period April 01
to March 31). Furthermore, the company's net worth base stood small
at INR1.15 crores as on March 31, 2018. The small scale limits the
firm's financial flexibility in times of stress and deprives it of
scale benefits. The decline in scale of operation from INR30.91
crore in FY17 is on account of increased competition resulting in
reduced turnover. Further the company recorded TOI of INR~22 crore
in 10MFY19 (April 1 to January 31) ending February 28, 2019 on
provisional basis.
Weak Profitability margin and leveraged capital structure: The
financial risk profile of the company remained weak for the past
three financial years i.e. FY16-FY18 characterized by low
profitability margins and leveraged capital structure The firm's
profitability margins have been historically on the lower side
owing to the low value addition and intense market competition
given the highly fragmented nature of the industry. PBILDT margin
of the company stood at 3.75% in FY18 as against 2.46% in FY17. The
improvement in PBILDT margin was mainly on account of lower cost of
traded products and sale of higher margin products. However, PAT
margin of the company stood below 0.50% in last three financial
years on account of high interest cost.
The capital structure of the company stood leveraged for the past
two financial years (FY17-FY18) on account of low net worth base.
The overall gearing ratio stood at 5.72x as on March 31, 2018 as
against 4.58x as on March 31, 2017. The deterioration in overall
gearing was mainly on account of increased working capital
borrowings.
Elongated operating cycle: The operations of the firm are working
capital intensive in nature as marked by operating cycle of 123
days in FY18. The company maintains sufficient inventory or raw
material and finished goods for smooth production process and sales
requirement respectively. The same resulted in average inventory
holding of 48 days in FY18. The firm normally extends
credit period of 4-5 months to its customers in order to cater
increased competition in the market resulting in average collection
period of 160 days in FY18, while receives payable period of 85
days. Further, the average working capital utilization remained 90%
utilised for past 12 months period ending January 31, 2019. Though
the liquidity indicators of the company appears to be moderate;
however, almost full utilisation of working capital borrowings
indicates the stretched liquidity position of the company.
Competition from organized and unorganized players: There is stiff
competition in the plywood industry due to presence of many
organized and unorganized players manufacturing plywood. The firm
faces competition from established players manufacturing plywood's,
laminates door skin etc like Green Ply Industries Limited and
Century Ply Board India. Moreover the firm faces competition from
traders in this industry.
Key Rating Strengths
Experienced management: Dormann Doors Private Limited was
incorporated in 2013. The company is currently being managed by Mr.
Kuldeep Mann, Mr. Sudhir Mann and Ms. Madhu Mann who are all
graduate by qualification and have been associated with this
entity since inception thereby holding an experience of around half
a decade. They jointly look after the overall affairs of
business. The company is equally supported by Tier-II management
consisting of well qualified engineers, along with supervisory
staff. The long standing presence in the industry has enabled the
company to establish a healthy relationship with their customers
and suppliers.
Delhi based, Dormann Doors Private Limited (DDPL) was incorporated
in July 2013 as a private limited company. The company is engaged
in trading of PVC products, plywood's and laminates, doors skins
(i.e. furniture related products used for manufacturing of
furniture).
ELEGANT SALES: Ind-Ra Migrates BB- LT Rating to Non-Cooperating
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Elegant Sales and
Marketing'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:
-- INR45 mil. Fund-based working capital limits migrated to non-
cooperating category with IND BB- (ISSUER NOT COOPERATING) /
IND A4+ (ISSUER NOT COOPERTING) rating; and
-- INR35 mil. Non-fund-based working capital limits migrated to
non-cooperating category with IND A4+ (ISSUER NOT COOPERTING)
rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
April 26, 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 2014 and based out in Hyderabad, Elegant Sales, and
Marketing supplies and installs interior products such as glass
partitions, moveable walls, aluminum skirting's and trims, carpets
and architectural concrete.
FINE YARNS: Ind-Ra Migrates BB LT Issuer Rating to Non-Cooperating
------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Fine Yarns' 'IND
BB' Long-Term Issuer Rating to the non-cooperating category. The
Outlook was Stable. 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 as follows:
-- INR10 mil. Fund-based facilities Migrated to Non-Cooperating
Category with IND BB (ISSUER NOT COOPERATING) / IND A4+
(ISSUER NOT COOPERATING) rating; and
-- INR130 mil. Non-fund-based facilities migrated to Non-
Cooperating Category with IND A4+ (ISSUER NOT COOPERATING)
rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
April 27, 2018. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Fine Yarns imports and trades textiles and other related products
It is a part of Bhartia Yarns Group.
FLEXPACK FIBC: CARE Keeps B on INR9cr Loans in Not Cooperating
--------------------------------------------------------------
CARE Ratings had, vide its press release dated January 5, 2018,
placed the rating(s) of Flexpack FIBC (FPF) under the 'issuer
non-cooperating' category as FPF had failed to provide information
for monitoring of the rating for the rating exercise as agreed to
in its Rating Agreement. FPF continues to be non-cooperative
despite repeated requests for submission of information through
e-mails, phone calls and an email dated January 7, 2019, January
16, 2019, January 22, 2019, January 24, 2019, February 2, 2019 In
line with the extant SEBI guidelines, CARE has reviewed the rating
on the basis of the best available information which however, in
CARE's opinion is not sufficient to arrive at a fair rating.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 9.00 CARE B; Issuer not cooperating;
Facilities Based on best available
information
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Detailed description of the key rating drivers
At the time of last rating on January 5, 2018, the following were
the rating strengths and weaknesses:
Key Rating Weaknesses
Proprietorship nature of constitution: The constitution as a
proprietorship firm restricts FPF's overall financial flexibility
as there is inherent risk of withdrawal of capital by proprietor in
times of personal contingency.
Project implementation and stabilization risk: FPF is setting up a
project to manufacture plastic packaging products and
water-proofing sheets with proposed installed capacity of 1800 MT
per annum. The total capital cost of is INR12.98 crore, the firm
had incurred cost of only INR2.50 crore (19.26% of total project
cost) till July 31, 2016 while balance is proposed to be incurred
till February 2017. The financial closure is yet to be achieved.
With the given funding mix, project gearing stands at 2.20 times.
Further, post project implementation risk towards quick
stabilization of the manufacturing facilities to achieve the
envisaged scale of business persists.
Presence in highly competitive and fragmented industry: The Indian
FIBC industry is dominated by players operating in the small and
medium scale sector, resulting in high fragmentation and intense
competition. Furthermore, due to low product differentiation and
value addition, the industry is highly competitive with price being
the key differentiating factor. Furthermore, majority of PP
products find application in cement, agro commodities and
fertilizer industries; thereby its future growth prospects are
directly linked to the growth of end user industries.
Raw material price volatility risk and high bargaining power of
suppliers coupled with foreign exchange fluctuation risk: The
prices of inputs like PP/HDPE polypropylene granules and chips,
polyethylene resin, polyester, adhesives, chemicals are derivatives
of crude oil. Hence, any adverse fluctuation in the crude oil
prices is likely to impact the profitability margins of FPF.
Furthermore, the market is seller dominated as there are limited
producers of HDPE, PP or LDPE which restricts the bargaining power
of the buyers. Also, as the firm is going to import some of the raw
materials and export majority of its products, it is subject to
foreign exchange fluctuation risk.
Key Rating Strengths
Experienced proprietor: The proprietor of FPF, Mr. Vinayak Sheshrao
Sanap is a Bachelor of Engineering (Instrumentation) and has an
experience of more than 15 years in the FIBC industry through
companies such as Flexituff International Limited. Overall, the
promoter of the firm has vast experience in the plastic packaging
industry, which will assist FPF in establishing customer base.
Silvassa-based FPF is a proprietorship firm, established in 2016 by
the proprietor Mr Vinayak Sheshrao Sanap. The entity is currently
undertaking a greenfield project with proposed installed capacity
of 1,800 MT of plastic tapes per annum to manufacture Polypropylene
(PP)/ High-density polyethylene (HDPE) yarn, container liners,
tarpaulin sheets, plastic woven sacks, Flexible Intermediate Bulk
Containers (FIBC's) like bulk bags and jumbo bags which are used as
plastic packaging products for transportation and storage of goods
as well as utilized for water-proofing purposes. The products
manufactured by FPF would find application primarily in industries
like construction, agriculture and food-packaging. The total
project cost was estimated at INR12.98 crore which is to be funded
through proposed debt-equity mix of 2.20 times. While, FPF would
purchase PP/HDPE granules from local players or import them, it
will export majority of the finished goods to U.S.A and various
European and Latin American countries via dealers or direct sales
agents under the brand name of "Flexpack". Also, its group entity
Flexpack, established in October 2015 is into similar line of
business.
GONDWANA ENGINEERS: CARE Migrates D Ratings to Not Cooperating
--------------------------------------------------------------
CARE Ratings has migrated the rating on bank facilities of Gondwana
Engineers Limited (GEL) to Issuer Not Cooperating category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 42.00 CARE D; Issuer not cooperating;
Facilities Based on best available
Information
Short-term Bank 54.00 CARE D; Issuer not cooperating;
Facilities Based on best available
Information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from GEL to monitor the rating(s)
vide e-mail communications dated Dec. 27, 2018, Feb. 26, 2019, Feb.
27, 2019, Feb. 28, 2019 and numerous phone calls. However, despite
CARE's repeated requests, the company has not provided the
requisite information for monitoring the ratings. In line with the
extant SEBI guidelines, CARE has reviewed the rating on the basis
of the best available information which however, in CARE's opinion
is not sufficient to arrive at a fair rating. The rating on
Gondwana Engineers Limited bank facilities will now be denoted as
CARE D; ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The ratings take into account ongoing delays in the debt
servicing.
Detailed description of the key rating drivers
At the time of last rating on January 12, 2018, the following were
the rating strengths and weaknesses
Key Rating Weaknesses
Ongoing delays in debt servicing: Due to delays in realization of
outstanding receivables, GEL has been unable to service its
financial obligations in a timely manner in the past. The same was
confirmed by the company's banker.
Key Rating Strengths
Significant experience of promoters and long track record of
operations: GEL has over three decades of track record in
undertaking engineering, procurement, and construction (EPC)
contracts for water, sewage, and effluent-treatment
plants. The company has implemented over 120 water treatment plants
(WTP) and 20 sewage treatment plants (STP). The main promoter, Mr.
Ashit Doshi has 30 years of experience in the field of development
of infrastructure projects in areas
such as water treatment. He is guided and assisted by other
promoters and experienced team of professionals with considerable
experience in the industry.
Gondwana Engineers Limited (GEL), incorporated in May, 1982, is
engaged in building and development of infrastructure projects in
areas such as water treatment and supply system, sewage treatment
system and effluent treatment projects on turnkey basis from design
stage to operations and maintenance stage. Its clientele includes
state government bodies, municipal corporations/councils and public
undertakings. The company is a wholly owned subsidiary of Doshion
Veolia Water Solutions Pvt Ltd (DVWS) which provides water and
waste management solutions to industry and public. GEL was acquired
by DVWS from Kirloskar Brothers Limited in the year 2010.
HAZARIBAGH RANCHI: CARE Lowers Ratings on INR601cr Loans to C
-------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Hazaribagh Ranchi Expressway Limited (HREL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Senior Non- 458.00 CARE C Revised from
Convertible CARE BB (SO); [Credit
Debenture Watch with Negative
issue (NCD)- Implications]
Series A
Subordinate 143.00 CARE C Revised from
Non-Convertible CARE BB (SO); [Credit
Debenture issue Watch with Negative
(NCD)-Series B Implications]
Detailed Rationale & Key Rating Drivers
The revision in ratings assigned to the non-convertible debentures
of HREL factors in the group's stated stance in recent National
Company Law Appellate Tribunal's (NCLAT) order, that entities in
'Amber' would make payments to only the operational creditors for
being going concern. Owing to this, CARE believes there is high
probability that HREL may not make payment towards the repayment
obligation that would be due on April 12, 2019.
HREL has INR53 crore in Debt Service Reserve Account which are
sufficient to cover the half yearly repayment obligation of senior
secured lenders. However, HREL may desist upcoming repayments
citing the NCLAT order as done by other group companies in past.
As per the recent NCLAT order dated Feb. 11, 2019, entities
classified into the 'Amber' category, indicate that the entities do
not have ability to meet all the obligations (financial and
operational). The 'Amber' classified entities can make payment to
operational creditors and senior secured financial creditors.
However, the appeal was made that entities in 'Amber' make payment
only to be going concern (i.e. operational creditors).
The ratings continue to remain on 'Credit Watch with Negative
Implications' for following reasons
* Based on uncertainty that the HREL's management could
possibly cease and desist upcoming further repayments
citing the NCLAT order as done by other group companies.
* Due to increased Operations & Maintenance (O&M) risks
based on the weakening of the credit profile of the
sponsor & contractor, i.e. IL&FS Transportation Networks
Limited (ITNL).
Structured Obligation (SO) ratings assigned to NCD's in past
factored in various credit enhancement measures, presence of a
structured payment mechanism for servicing of the Senior (Series A)
issue and Subordinate (Series B) issue. However, in CARE's view
given thee management's stance of non adhreance to the SPM as seen
in other group companies, existence of the above mentioned measures
do not provide any credit enhancement.
Detailed description of the key rating drivers
Key Rating Weaknesses
High probability of default in debt servicing obligation: Group's
stance of making payments only to operational creditors to remain a
going concern and not making payments to senior secured financial
creditors sighting the NCLAT order has led to high probability of
default which is due on April 12, 2019 despite the availability of
sufficient liquidity to service the obligation.
Weakened Credit profile of the sponsor and O&M contractor: HREL is
promoted by ITNL (CARE D) and PLL (CARE D). ITNL has entered into a
sponsor support agreement with HREL in regards to management
control, cover any shortfall between the termination payments and
total debt outstanding in respect of the debentures in case of a
termination event, fund any increase in the O&M costs (for both
regular and major maintenance works including admin) over and above
the base case business plan and funding any shortfall in annuity
due to non-availability of lane as stipulated in the concession. As
ITNL overall credit profile has significantly deteriorated, it
leads to higher risk in meeting any of these obligations arising
from the project on account of sponsor undertaking. Any impairment
with regards to performing O&M contract may lead to a deduction in
annuity.
Analytical Approach: Standalone. Previously the assigned ratings
factored in the standalone approach and the credit enhancement
derived from the Structured Payment Mechanism (SPM) adopted for the
NCD's repayments. However, given the stance taken by group in past
for non-adherence to the SPM and recent appeal made to NCLAT dated
Feb. 11, 2019 for payment to only operational creditors (in Amber
category; to keep entities going concern) indicates that there is
no credit enhancement left to be derived from the SPM, hence, the
approach is shifted to standalone only.
Liquidity Analysis:
HREL has maintained INR53 Crore in DSRA which is in line with the
stipulated requirement to repay its senior secured
lenders
Hazaribagh-Ranchi Expressway Limited was incorporated on March 19,
2009, as a Special Purpose Vehicle promoted by ITNL; holding 99.99%
and Punj Lloyd Limited holding the balance. The company entered
into a Concession Agreement (CA) with National Highway Authority of
India - NHAI (rated 'CARE AAA Stable') on October 8, 2009 for the
purpose of designing, constructing and maintaining the 4-laning of
the Hazaribagh - Ranchi section of NH-33 from 40.50 km to 114.00 km
in Jharkhand on a Build Operate Transfer (BOT) - Annuity basis. The
concession period is for 18 years commencing from the appointed
date, including construction period of 910 days. HREL achieved
provisional completion on September 15, 2012 and received first
annuity of INR64.08 crore (semi-annual) in July 2013. The project
was completed ahead of time and Commercial Operation Date (COD) was
achieved 134 days ahead of scheduled project completion which
entitled HREL to receive the early completion bonus of INR47.00
crore which was received in FY14. HREL completed the construction
of project stretch in August 2014 and received the project
completion certificate in April 2015.
HERCULES HOSPITALITIES: Ind-Ra Affirms B LT Rating, Outlook Stable
------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed Hercules
Hospitalities Private Limited's (HHPL) Long-Term Issuer Rating at
'IND B '. The Outlook is Stable.
The instrument-wise rating actions are:
-- INR10.29 mil. (reduced from INR15 mil.) Long-term loans due on
March 2022 affirmed with IND B/Stable rating; and
-- INR110 mil. Fund-based limits affirmed with IND B/Stable/IND
A4 rating.
KEY RATING DRIVERS
The affirmation reflects HHPL's nascent stage of operations as it
commenced operations in October 2017. There was a six-month delay
in commencement of operations from the scheduled date, due to
delays in receiving the MoU from Maruti Suzuki India Limited and
natural calamities (floods) in Kerala. HHPL achieved revenue of
INR468 million during 11MFY19 (FY18: INR224 million). The company
reported EBITDA losses of INR9.6 million in FY18, but recorded a
net profit of INR9.2 million in FY18 on account of profit from sale
of land. Ind-Ra expects HHPL's revenue and operating EBITDA to
improve in FY19 - the first full year of operations.
The ratings are also constrained by the company's modest liquidity
position. It had unutilized credit lines of INR30.1 million and a
cash balance of INR2.02 million at FYE18.
However, the ratings continue to be supported by HHPL's promoters
more than decade-long experience in the trading of an automobile
through group companies.
RATING SENSITIVITIES
Positive: Any substantial improvement in the top line and operating
profitability, leading to an improvement in the credit metrics,
could be positive for the ratings.
Negative: Any decline in the revenue and operating profitability
leading to deterioration in the credit metrics could be negative
for the ratings.
COMPANY PROFILE
Incorporated in 2003, HHPL is part of the Hercules Group. The
company had set up an automobile dealership showroom of NEXA in the
Alleppey district of Kerala.
HILTON INFRASTRUCTURE: CARE Reaffirms D Rating on INR13.91cr Loan
-----------------------------------------------------------------
CARE Ratings reaffirmed ratings on certain bank facilities of
Hilton Infrastructure (HI), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 13.91 CARE D Reaffirmed
Detailed Rationale & Key Rating Drivers
The reaffirmation of the ratings to the bank facilities of HI takes
into consideration the delay in debt servicing.
HI's ability to establish clear track of servicing of its debt
obligations with timely completion of the project and thereby
receipt of customer advances as per schedule without any major cost
run is the key rating sensitivity.
Key updates
Delay in debt servicing: As per banker interaction, there have been
ongoing delays in debt servicing and the account has been
classified as NPA.
Established in 2009, Hilton Infrastructure (HI) is engaged into
development of residential and commercial projects in Mumbai. HI is
currently developing a redevelopment residential (13 storey) and
commercial (8 storey) project in Grant Road East, Mumbai. Further
in the same locality the entity is developing a single tower (21
storeys) under the name of 'Fuego' solely for the purpose of sale.
The entire project is spread across 55,518 square meters.
ITM INFRA: Ind-Ra Migrates BB LT Issuer Rating to Non-Cooperating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated ITM Infra's 'IND
BB' Long-Term Issuer Rating to the non-cooperating category. The
Outlook was Stable. The issuer did not participate in the rating
exercise despite continuous requests and follow-ups by the agency.
Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will now
appear as 'IND BB (ISSUER NOT COOPERATING)' on the agency's
website.
The instrument-wise rating action is:
-- INR1.20 bil. Long-term loans due on December 2021 migrated to
non-cooperating category with IND BB (ISSUER NOT COOPERATING)
rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
March 27, 2018. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
ITM Infra is a partnership firm registered in July 2015 to execute
a commercial-cum-residential project – ITM Infra – in Surat,
Gujarat.
KAMAL TRADING: Ind-Ra Migrates 'BB+' LT Rating to Non-Cooperating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Kamal Trading
Corporation's 'IND BB+' Long-Term Issuer Rating to the
non-cooperating category. The Outlook was Stable. 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 action is:
-- INR299.3 mil. Fund-based working capital limits migrated to
Non-Cooperating Category with IND BB+ (ISSUER NOT
COOPERATING) / 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 2012 as a partnership concern, mal Trading Corp is
primarily involved in trading steel products.
KHUSHI FOODS: CARE Keeps D on INR7.37cr Loans in Not Cooperating
----------------------------------------------------------------
CARE had, vide its press release dated January 4, 2018 placed the
ratings of Khushi Foods Limited (KFL) under the 'issuer
non-cooperating' category as KFL had failed to provide information
for monitoring of the rating as agreed to in its Rating Agreement.
KFL continues to be non-cooperative despite repeated requests for
submission of information through phone calls and emails dated
February 19, 2019, February 20, 2019, February 21, 2019, February
28, 2019, March 4, 2019 and numerous phone calls. In line with the
extant SEBI guidelines, CARE has reviewed the rating on the basis
of the best available information which however, in CARE's opinion
is not sufficient to arrive at a fair rating.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank
Facilities 7.37 CARE D; Issuer not cooperating
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Detailed description of the key rating drivers
At the time of last rating on November 20, 2017, the following were
the rating weaknesses:
Key Rating Weaknesses
Delay in Debt Servicing: There are several instances of overdrawing
in the cash credit account coupled with delays in term loan
repayment. The overall conduct of the account is not satisfactory.
Khushi Foods Ltd. (KFL) earlier known as Khushi Foods Pvt. Ltd.
(changed from December 23, 2011) was incorporated on March 5, 2008
by Mr. Rajendra Sharma and Mr. Jagdish Sharma. KFL's processing
unit is located at Mahua, Bhavnagar spread over 464.51 sq.mtrs with
an installed capacity of 3,200 metric tonne per annum (MTPA). KFL
is engaged in the business of dehydrated of vegetables and
processes instant ready to cook products. KFL has developed ready
to cook products such as garlic magic and pizza magic which face
less competition in the market. Such products have heavy demand
outside Gujarat and pan India at large for which KFL is looking
forward aggressively to promote its products and secure business.
KFL also exports its products to various countries such as Nepal,
Russia, Bulgaria and Poland.
KSP INC: Ind-Ra Affirms 'BB' Issuer Rating & Alters Outlook to Pos.
-------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has revised KSP Inc.'s Outlook
to Positive from Stable while affirming its Long-Term Issuer Rating
at 'IND BB'.
The instrument-wise rating actions are:
-- INR103.00 mil. (increased from INR100.00 mil.) Fund-based
export-related limits affirmed; Outlook revised to Positive
from Stable with IND BB/Positive/INDA4+ rating; and
-- The 'IND BB' rating on the INR3.00 mil. Non-fund-based bank
guarantee was withdrawn (limit has been surrendered).
KEY RATING DRIVERS
The Positive Outlook reflects consistent growth in KSP's revenue
over FY16-FY19 owing to a continuous increase in orders, driven by
high customer demand. KSP's revenue was INR457.39 million in FY18
(FY17: INR429.66 million; FY16: INR337.23 million). Its revenue was
INR700 million in 11MFY19, thereby indicating a rise in the scale
of operations to medium from small. As of mid-March, KSP had a
total outstanding order book of INR130 million, INR60 million of
which is likely to have been completed by FYE19.
The Positive Outlook also reflects the continued strong credit
metrics of KSP, albeit interest coverage marginally deteriorated,
in FY18. Its interest coverage marginally deteriorated to 8.47x in
FY18 from 8.51x in FY17 due to a proportionately higher rise in
interest expenses (owing to an increase in debt utilization) than
that in EBITDA. Its net leverage improved to 1.57x in FY18 from
1.65x in FY17, driven by the rise in the profitability and an
increase in cash and cash equivalents.
The ratings are constrained by KSP's modest liquidity, indicated by
an average maximum fund-based limit use of 91.39% for the 12 months
ended March 2019. However, its net working capital cycle remained
comfortable at 40 days in FY18 (FY17:45 days) on account of an
improvement in inventory days to 14 (22). The firm's cash flow from
operations remains positive for the third consecutive year in FY18
at INR7.15 million (FY17: INR27.79 million).
The ratings continue to be constrained by the partnership nature of
the firm.
The ratings, however, are supported by KSP's healthy EBITDA margin
of 10.27% in FY18 (FY17: 7.96%) on account of low operating
expenses. The firm's return on capital employed was 28.0% in FY18
(FY17: 24.0%). With the firm venturing into the manufacturing
business partially, the margin is likely to improve in the near
term.
The rating continues to benefit from the promoters' experience of
more than four decades in the trading of lawn and garden decorative
items.
RATING SENSITIVITIES
Positive: An increase in the scale of operations, along with an
improvement in the credit metrics, both on a sustained basis, will
be positive for the ratings.
Negative: Any decline in the revenue or the EBITDA margin, leading
to any deterioration in the credit metrics, along with stress in
the liquidity, will be negative for the ratings.
COMPANY PROFILE
Founded in 1977, KSP is engaged in trading of lawn and garden
decorative items such as garden products, wrought iron furniture,
garden arches, garden fences, bird feeders, furniture, among
others. The firm has recently ventured partially into manufacturing
too. The firm exports these items to Europe, the UK, and North
America. The company is promoted by Mr. Puneet Berry and his
family.
MILLENIUM MARBLE: Ind-Ra Moves BB- Debt Rating to Non-Cooperating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Millenium Marble
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:
-- INR80 mil. Fund-based facilities migrated to non-cooperating
category with IND BB- (ISSUER NOT COOPERTAING)/ IND A4+
(ISSUER NOT COOPERATING) rating; and
-- INR20 mil. Non-fund-based facilities migrated to non-
cooperating category with IND A4+ (ISSUER NOT COOPERATING)
rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
April 4, 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 1999, Millenium Marble imports polished marble from
Europe and the Middle East and sells it in the domestic market.
NIKITA JEWELLERS: Ind-Ra Lowers LT Rating to 'BB', Outlook Stable
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has downgraded Nikita Jewellers
Pvt. Ltd.'s (NJPL) Long-Term Issuer Rating to 'IND BB' from 'IND
BB+ (ISSUER NOT COOPERATING)'. The Outlook is Stable.
The instrument-wise rating action is:
-- INR156 mil. Fund-based limits downgraded with IND BB/Stable
rating.
KEY RATING DRIVERS
The downgrade reflects a sharp deterioration in NJPL's credit
metrics with net financial leverage (total adjusted net
debt/operating EBITDA) of 7.9x in FY18 (FY17: 3.7x) and interest
coverage (operating EBITDAR/gross interest expense) of 1.5x (2.9x).
Absolute EBITDA almost halved to INR41 million in FY18 (FY17: INR74
million), due to a fall in revenue to INR899 million (INR1,122
million) on the lower sales volume of gold and diamond jewelry.
EBITDA margins were modest at 4.5% in FY18 (FY17: 6.6%), due to
fluctuations in gold prices. NJPL's return on capital employed was
7.0% in FY18 (FY17: 14.0%).
However, despite this deterioration, the company's scale of
operations remained modest. Liquidity was modest too, indicated by
an average fund-based limit use of under 95% for the 12 months
ended February 2019. Cash flow from operations turned negative at
INR31 million in FY18 from INR33 million in FY17 due to the fall in
EBITDA and an increase in working capital. Moreover, cash and cash
equivalent stood at INR2 million at FYE18 (FYE17: INR44 million).
The ratings continue to draw support from the promoters'
decade–long experience in the jewelry retail business.
RATING SENSITIVITIES
Negative: Sustained deterioration in the credit metrics or
liquidity profile will be negative for the ratings.
Positive: A sustained improvement in the scale of operation and
credit metrics will be positive for the ratings.
COMPANY PROFILE
Incorporated in 1998, NJPL retails jewelry through its two
showrooms in Mumbai.
NIMISH SYNTEX: Ind-Ra Moves BB on INR10MM Loans to Non-Cooperating
------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Nimish Syntex'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:
-- INR10 mil. Fund-based facilities migrated to non-cooperating
category with IND BB (ISSUER NOT COOPERATING) / IND A4+
(ISSUER NOT COOPERATING) rating; and
-- INR140 mil. Non-fund-based facilities migrated to non-
cooperating category with IND A4+ (ISSUER NOT COOPERATING)
rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
April 27, 2018. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Nimish Syntex imports and trades textiles and other related
products. It is a part of Bhartia Yarns Group, which also includes
Bhartia Yarns and Fine Yarns. All the entities trade yarn.
NIRVANA FASHION: Ind-Ra Migrates BB- LT Rating to Non-Cooperating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Nirvana Fashion
Clothing'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:
-- INR90 mil. Fund-based working capital limit migrated to non-
cooperating category with IND BB- (ISSUER NOT COOPERATING)
rating; and
-- INR30 mil. Non-fund-based working capital limit migrated to
non-cooperating category with IND A4+ (ISSUER NOT
COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
April 9, 2018. Ind-Ra is unable to provide an update, as the agency
does not have adequate information to review the ratings.
COMPANY PROFILE
Mumbai-based Nirvana Fashion Clothing was established as a
partnership firm by Biyani family in 1996. The firm manufactures
readymade garments on a contract basis for reputed retail chains
such as Future Group, Pantaloons, among others.
PALM HEIGHTS: CARE Migrates D Rating to Not Cooperating Category
----------------------------------------------------------------
CARE Ratings has migrated the rating on bank facilities of Palm
Heights Private Limited (PHP) to Issuer Not Cooperating category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 15.00 CARE D; Issuer not cooperating;
Facilities Based on the best available
Information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from PHP to monitor the ratings
vide e-letter dated February 21, 2019, email communications dated
February 19, 2019, February 16, 2019, February 12, 2019, January
31, 2019, January 15, 2019 and numerous phone calls. The last 3
email communications However, despite CARE's repeated requests, the
company has not provided the requisite information for monitoring
the ratings. In line with the extant SEBI guidelines, CARE has
reviewed the rating on the basis of the best available information
which however, in CARE's opinion is not sufficient to arrive at a
fair rating. The rating on Palm Heights Private Limited's bank
facilities will now be denoted as CARE D; ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The rating takes into account the ongoing delays in servicing of
the term debt obligations.
Detailed description of the key rating drivers
At the time of last rating on March 26, 2018, the following factors
were considered:
Ongoing delays in debt servicing: There are ongoing delays in the
servicing of the debt obligations. The delays are on account of
weak liquidity position as the company is unable to generate
sufficient funds in a timely manner.
Palm Heights Private Limited (PHP) was incorporated in 2013 and is
currently being managed by Mr. Daljit Dogra Singh, Mr. Harjinder
Singh Rangi and Mr. Ankit Sidana. The company is currently
developing its residential project named 'Palm Heights' at
Derabassi, Punjab, on 2.94 acres of land. The project is being
developed in the form of seven towers with a total of 164 flats.
The project is expected to be completed by October 2020. As on
August 10, 2017, 62 flats have been sold out of 164 flats. The
group entities of PHP include DM Associates and Dogra Property
Consultants which are engaged in the real estate industry and civil
construction, respectively.
PARKER VRC: CARE Migrates D Rating to Not Cooperating Category
--------------------------------------------------------------
CARE Ratings has migrated the rating on bank facilities of Parker
VRC Infrastructure Private Limited (PVIPL) to Issuer Not
Cooperating category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 45.00 CARE D; Issuer not cooperating;
Facilities Based on best available
information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from PVIPL to monitor the rating
vide e-mail communications dated Feb. 25, 2019; Feb. 27, 2019 &
Mar. 1, 2019 and numerous phone calls. However, despite CARE's
repeated requests, the company has not provided the requisite
information for monitoring the ratings. In line with the extant
SEBI guidelines, CARE has reviewed the rating on the basis of the
best available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating. The rating on Parker VRC
Infrastructure's bank facilities will now be denoted as CARE D;
ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The rating takes into account the delays in debt servicing.
Detailed description of the key rating drivers
At the time of last rating on Oct. 27, 2017, the following were the
rating weaknesses and strengths:
Key Rating Weaknesses
Delays in Interest Servicing: PVIPL has delayed in servicing the
interest due on the outstanding debt of the company for the months
of August and September, 2017 due to stretch in its liquidity
position. The default accrues to the slowdown in the collections of
customer advances and tight fresh sales momentum in the projects
under execution by PVIPL. Furthermore, the stress on
the liquidity is aggravated by the refunds paid to the customers on
account of cancellations of the booked units.
Subdued Industry Scenario: The real estate sector is moving towards
a more rational regime with the implementation of the
transformational reforms viz. demonetization, introduction of the
REIT's, Real Estate Regulator Bill and FDI relaxations. Residential
sales were positively impacted by flexibility in pricing and
payment schedules, especially for projects with quality
construction, appropriate sizes and prime locations. The
introduction of the RERA Act, will also move the sector towards
transparent and credible measures with sustenance for organized
players. Moreover, the expected renewed interest by the banks in
funding the developers is likely to result in the timely completion
of the projects. As per market sentiments the India Real Estate
Market may not witness a sharp reversal in the year 2017, but its
long term the growth prospects remain strong. Currently, the sector
continues to remain troubled with issues of high unsold inventory,
delayed delivery of projects causing financial stress on
developers. The only segment that showed some signs of a rebound
was the affordable housing category in the peripheries of the major
markets. Thus, the broader market opinion is that while the long
term story for residential market remains strong; the short term is
expected to be sluggish.
Parker VRC Infrastructure Private Limited (PVIPL), incorporated in
2012, is a joint venture between Parker Estate Developers Private
Limited and VRC Constructions India Private Limited. PVIPL is
currently developing two projects by the name of "White Lily" and
"White Lilly Residence" located in Sector-8, Kamaspur, Sonipat,
Haryana and Sector-27, Ahmedpur, Sonepat, Haryana respectively with
total salable are of 10.43lsf and 12.76 lsf respectively.
VRC Group has more than two decades of experience in the
construction of civil, structural and infrastructural project.
The group is promoted by Mr. Narinder Kumar Bansal and Mr. Dinesh
Kumar Gupta.
Parker Group has more than a decade experience in the real estate
development in Sonepat. The group has already completed a number of
projects such as Parker Residency and Parker Mall with total area
of 11.34 acres. The group is also developing Parker Suits in
Sector-62, Kundli (Sonepat). The group include two major entities
viz Parker Estate Developers Private Limited and Parker Builder
Private Limited.
PATE FUTURE: CARE Migrates D on INR45cr Loans to Non-Cooperating
----------------------------------------------------------------
CARE Ratings has migrated the rating on bank facilities of Pate
Future Constructions LLP (PFLP) to Issuer Not Cooperating
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 45.00 CARE D, Issuer Not Cooperating;
Facilities Based on best available
Information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from PFLP to monitor the rating
vide e-mail communications/letters dated January 19, 2019, February
8, 2019, February 11, 2019, February 25, 2019, February 26, 2019
and numerous phone calls. However, despite CARE's repeated
requests, the firm has not provided the requisite information for
monitoring the rating. In line with the extant SEBI guidelines,
CARE has reviewed the rating on the basis of the best available
information which however, in CARE's opinion is not sufficient to
arrive at a fair rating. The rating on PFLP's bank facility and
will now be denoted as CARE D, ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
The ratings take into account the continuous delays in debt
servicing obligations.
Detailed description of the key rating drivers
At the time of last rating on March 30, 2018, the following were
the rating strengths and weaknesses.
Key Rating Weaknesses
Delay in debt servicing obligations: There have been continuous
delays in debt servicing obligations. The delays were on account of
stretched liquidity position for the firm.
Pate Future Constructions LLP (PFLP) is a limited liability
partnership firm formed on January, 2015 and belongs to Pune based
Pate Developers .PFCL is formed for developing a budget residential
development under the name "LIFE MAXIMA" at Kirkatwadi, Pune.
RASILANT TECHNOLOGIES: CARE Lowers Rating on INR7.50cr Loan to D
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CARE Ratings revised the ratings on certain bank facilities of
Rasilant Technologies Private Limited (RTPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 7.50 CARE D Revised from CARE B+;
Facilities/ Stable/CARE A4
Short term Bank
Facilities
Detailed Rationale & Key Rating Drivers
The rating assigned to the bank facilities of RTPL factors in the
default in debt servicing obligations, since the cash credit
facility of has been continuously overdrawn from July 1, 2018 till
February 28, 2019 owing to weak liquidity position. In view of
this, the account has been classified as SMA-2 by the bank.
The ability of RTPL to timely service its debt obligations with
improvement in liquidity position is the key rating sensitivity.
Detailed description of the key rating drivers
Key Rating Weaknesses
On-going delay in debt servicing: As per the bank statements the
cash credit facility of has been continuously overdrawn from
July 1, 2018 till February 28, 2019 owing to weak liquidity
position. In view of this, the account has been classified as SMA-2
by the bank.
Weak financial risk profile: The overall financial risk profile of
the company remained weak and the same has deteriorated in FY18
over FY17 due to decrease in total operating income (TOI) by 23.03%
in FY18 over FY17. The PAT margin has also declined to 0.41% in
FY18 from 0.97% in FY17. Moreover, the gearing level continuous to
remain leveraged with significant deterioration in operating cycle
from 164 days in FY17 to 233 days in FY18 on account of stretched
collection period.
Rasilant Technologies Private Limited (RTPL) was incorporated in
2005 by Mr. Sahil Anand and Mr. Shiladitya Mukhopadhyaya. The
company is ISO 9001-2008 certified company and is engaged in
providing software platforms and hardware implementation for auto
ID technologies such as RFID, access control, building automation
and CCTV surveillance. The company caters to automation
requirements of the industrial, government, healthcare and
hospitality sectors. The company is based out of Mumbai with
branches in New Delhi and Bangalore with operations spreads across
the country. Further during FY18, RTPL's exports contributed 31.77%
to total sales (vis-a-vis 6.69% in FY17) of its total services to
USA.
RENUKA CONSTRUCTION: CARE Lowers Rating on INR20cr LT Loan to B+
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CARE Ratings revised the ratings on certain bank facilities of
Renuka Construction (RC), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 20.00 CARE B+; Stable; Revised from
Facilities CARE BB-; Stable on the basis
of best available information
CARE has been seeking information from RC to monitor the rating
vide e-mail communications dated February 26, 2019, February 15,
2019, February 11, 2019, January 29, 2019, January 17, 2019,
January 10, 2019 and December 11, 2018; and numerous phone calls.
However, despite CARE's repeated requests, RC has not provided the
requisite information for monitoring the ratings. In line with the
extant SEBI guidelines, CARE has reviewed the rating on the basis
of the best available information which however, in CARE's opinion
is not sufficient to arrive at a fair rating. The rating on RC's
bank facilities will now be denoted as CARE B+; Outlook: Stable
ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The ratings have been revised on account of expected continuation
of key rating weaknesses. However, experience of proprietor in real
estate industry offset the rating constraints.
Detailed description of the key rating drivers
At the time of last rating on March 29, 2018 the following were the
rating weaknesses and strengths.
Key Rating Weaknesses
Execution risk due to nascent stage of the project: The project
"Renuka Gloriya" is in nascent stage with excavation being
commenced in March 2018. The project is expected to be completed by
December 2020. Therefore risk exists pertaining to timely execution
of the project in light of volatility in input prices. The
commencement certificate has been received, however RERA
registration is pending.
Dependence on customer advances to fund the project: The total
project cost of "Renuka Gloriya" is INR59.22 crore which is
expected to be funded by promoter's contribution of INR17.77 crore,
term loan of INR20 crore from bank and the balance INR21.45 crore
from customer advances. Since substantial portion promoter's
proposed contribution for the project has been made there is
reliance on customer advances and bank debt to fund the project
cost. Delay in getting registered with RERA India would result in
delay in launch of the project and subsequently affect the revenue
generating ability of the firm. Presently, in light of no customer
advances in place confirmed inflow in the form of bank debt and
promoter's balance contribution only covers 41% of total outflow
comprising of balance project cost and debt repayment.
Competition from other developers: The real estate industry in
India is highly fragmented with most of the real estate developers
having a region-specific presence. Since Ravet location is
gradually upcoming, many developers who envisage the future
potential of the area have also come up with similar projects in
the vicinity. However, RC's good understanding of the region and
its dynamics and earlier track record partly mitigates the risk
from competitors.
Cyclicality in the real estate industry: The capital-intensive real
estate industry is highly cyclical in nature. The industry that
seemed to have bounced back from the downturn during 2008 is
currently facing liquidity crunch due to subdued demand as well as
due to slow rate of approvals. Further, demonetization,
implementation of RERA and GST has impacted the real estate sector
in the medium term. However, with the improvement in macro-economic
conditions in the country, the real estate sector is expected to
attain a gradual recovery.
Key Rating Strengths
Experience and track record of the promoters: Mr. Babu Mhetre who
is the sole proprietor of Renuka Construction has more than 20
years of experience in the real estate industry. Since
establishment, Renuka Construction has developed more than 20
projects comprising saleable area of 15 lakh ft2. The group has a
good reputation and track record in the local market especially in
the Pimpri-Chinchwad area of Pune as most of their past projects
were developed in the same region. Thus it is expected to derive
benefits when launching its new project i.e. "Renuka Gloriya" in
terms of marketing support and brand recall.
Upcoming location of the project Renuka Gloriya; albeit witnessing
gradual development: Renuka Construction is developing a
residential project named "Gloriya" in Ravet area which is on the
outskirts of Pune city and falls under the jurisdiction of Pimpri
Chinchwad Municipal Corporation (PCMC). Ravet is one of the
developing suburban areas of Pune, which is located close to the
industrial zones and the IT hubs of Pune. The area has gradually
developed civic amenities and is well-connected to the other parts
of the greater city. The location is advantageous to people working
in IT hubs in and around the area who can cut down commute time to
their offices. Development of adequate social and physical
infrastructure in the vicinity remains to be seen.
Renuka Construction (RC) is a proprietorship firm set up by Mr.
Babu Mhetre in 1998 in Pune. The firm has been carrying out
development of residential and commercial projects in Pune majorly
focused in the Pimpri Chinchwad area. The firm has now undertaken
development of a residential project "Renuka Gloriya" in Ravet
which is on the outskirts of Pune.
S. S. FOOD: CARE Lowers Rating on INR6.24cr LT Loan to B+
---------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
S. S. Food Products Private Limited (SSFPPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 6.24 CARE B+: Stable; Issuer not
Facilities cooperating; Revised from
CARE BB-; Stable on the
basis of best available
information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from SSFPPL to monitor the rating
vide e-mail communications/letters January 14, 2019, February 12,
2019, February 28, 2019 and numerous phone calls.. However, despite
CARE's repeated requests, the company has not provided the
requisite information for monitoring the rating. In line with the
extant SEBI guidelines, CARE has reviewed the rating on the basis
of the best available information which however, in CARE's opinion
is not sufficient to arrive at a fair rating. The rating on
SSFPPL's bank facilities will now be denoted as CARE B+; Stable;
ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution whileusing the
above rating.
The rating has been revised by taking into account non-availability
of information due to non-cooperation by SSFPPL with
CARE'S efforts to undertake a review of the rating outstanding.
CARE views information availability risk as a key factor in its
assessment of credit risk.
Detailed description of the key rating drivers
At the time of last rating on February 28, 2018, the following were
the rating strengths and weaknesses.
Key Rating Weaknesses
Modest scale of operations with thin profit margins: The scale of
operations of the company remained small with total operating
income (TOI) of INR85.86 crore in FY17 and total capital employed
of INR18.17 crore as on March 31, 2017 thus limiting financial
flexibility of the company in times of stress. Moreover, by being
in the business of processing of wheat, entailing low value
additions, the company's profit margin stood low.
Leveraged capital structure with weak debt service coverage
indicators: The relatively low net worth base of the company led to
increased reliance on working capital borrowings and unsecured
loans to support its business operations, hence resulting in
leveraged capital structure. Moreover, with low profitability and
high debt profile, the debt coverage indicators of the company
remained weak.
Moderate Liquidity position: Operations of the company remained
working capital intensive with gross current assets of 33 days in
FY17 owing to moderate inventory period. The working capital
requirements are met by the cash credit facility availed by the
company utilization of which remained high.
Presence in highly fragmented and highly regulated industry: The
competitive nature of agro-product processing industry due to low
entry barriers, high fragmentation and the presence of a large
number of players in the organized and unorganized sector translate
in inherent thin profitability margins. Further, the raw material
prices are regulated by government to safeguard the interest of
farmers, which in turn limits the bargaining power of the millers.
Vulnerability to fluctuation in raw material prices: Wheat is the
major raw material which constitutes about 90% of the total cost of
production of the company. The peak procurement season is during
April till July during which the company builds up raw material
inventory to cater to the milling and processing of wheat
throughout the year.
Key Rating Strengths
Experienced partners: The partners have an average experience of
three decades in the agro based industry. Extensive experience of
partners has supported the business risk profile of the company to
a large extent.
Locational advantage emanating from proximity to raw material:
SSFPPL unit has proximity to local grain markets of Madhya Pradesh;
major raw material procurement destinations for the company.
Accordingly, the company has location advantage in terms of
proximity to raw material and connectivity.
Long association with reputed albeit concentrated clientele:
SSFPPL's major customers include Parle Biscuit Private Limited,
Britannia Industries Limited, ITC Limited, Patanjali Biscuits
Private Limited and Haldiram foods International Private Limited to
name a few. The company has long-standing relationship with these
clients who possess respectable position in their respective
industries. Because of the reputed clientele, the credit risk
remains low. In FY17, top five customers contributed approximately
60% to the revenues of the company.
SSFPPL is a Nagpur (Maharashtra) based private limited company,
incorporated in the year 2003 and is promoted by Mr. Pawankumar
Poddar and Mr. Ramkrishna Poddar. SSFPPL is engaged in the
manufacturing of Rawa, Maida, Atta and Chokar. The company operates
through its manufacturing facility located at Nagpur; having an
installed capacity to process approximately 6 lakh quintals of
wheat per year.
SAA VISHNU: Ind-Ra Migrates 'BB+' Issuer Rating to Non-Cooperating
------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Saa Vishnu Bakers
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:
-- INR77.5 mil. Fund-based working capital limit migrated to non-
cooperating category with IND BB+ (ISSUER NOT COOPERATING)
rating; and
-- INR346.2 mil. Term loan due on March 2026 migrated to non-
cooperating category with IND BB+ (ISSUER NOT COOPERATING)
rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
March 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 2009, Saa Vishnu Bakers manufactures biscuits at
its 46,500 metric tons per annum facility in Ranchi.
SAIKRUPA COTGIN: CARE Migrates 'D' Rating to Not Cooperating
------------------------------------------------------------
CARE Ratings has migrated the rating on bank facilities of Saikrupa
Cotgin Private Limited (SCPL) to Issuer Not Cooperating category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 18.37 CARE D; ISSUER NOT COOPERATING;
Facilities Based on best available
(Fund Based) information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from SCPL to monitor the
rating(s) vide e-mail communications dated February 8, 2019,
February 12, 2019, February 13, 2019 and numerous phone calls.
However, despite CARE's repeated requests, the company has not
provided the requisite information for monitoring the ratings. In
line with the extant SEBI guidelines, CARE has reviewed the rating
on the basis of the best available information which however, in
CARE's opinion is not sufficient to arrive at a fair rating. The
rating on Saikrupa Cotgin Private Limited bank facilities will now
be denoted as CARE D; ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while
using the above rating(s).
Key Rating Weaknesses
Overdrawals in working capital: There are instance of continues
overdrawals in the cash credit account for more than 30 days during
Q3FY19 on account of stressed liquidity. Further during FY18 the
scale of operations deteriorated by 37.93% and stood at INR79.61
crore as against INR128.27 crore in FY17. Also the company has
registered losses and stood at (3.36) in FY18 as against (0.31) in
FY17.
Saikrupa Cotgin Private Limited (SCPL) was incorporated in 2009 as
a public company and was converted to private limited company in
2015 and its name was changed to Saikrupa Cotgin Private Limited.
SCPL is in the process of conversion of raw cotton into bales,
processing of cotton seeds into oil and seed cake. Also the company
is engaged in trading activity of cotton seeds and bales. The
company's manufacturing facility is located in Wani Taluka
(Yavatmal District). SCPL's product portfolio includes cotton
bales, cotton seeds, cotton seed oil and cotton seed cake. Saikrupa
Fibres Private Limited (SFPL)) is in Wani (Maharashtra) based
company engaged in cotton ginning and pressing. SFPL is promoted by
Mr. Satish Bhatgare who has an experience of 6 years with SFPL in
the cotton ginning industry. SCPL & SFPL both deal in same line of
business.
SANGAM FORGINGS: Ind-Ra Migrates 'B' LT Rating to Non-Cooperating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Sangam Forgings
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 B (ISSUER NOT COOPERATING)' on the agency's website.
The instrument-wise rating actions are:
-- INR30 mil. Fund-based limits migrated to Non-Cooperating with
IND B (ISSUER NOT COOPERATING) rating; and
-- INR15 mil. Non-fund-based limits migrated to Non-Cooperating
with IND A4 (ISSUER NOT COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
March 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 1976, Sangam Forgings manufactures forging
products.
SB EQUIPMENTS: Ind-Ra Migrates 'BB' LT Rating to Non-Cooperating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated SB Equipments
LLP'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:
-- INR110 mil. Fund-based limits migrated to non-cooperating
category with IND BB (ISSUER NOT COOPERATING) / IND A4+
(ISSUER NOT COOPERATING) rating; and
-- INR40 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
April 6, 2018. Ind-Ra is unable to provide an update, as the agency
does not have adequate information to review the ratings.
COMPANY PROFILE
SB Equipments develops and supplies sensitive technological
products to the armed forces and all allied services.
SHANTOL GREEN: CARE Assigns 'D' Rating to INR9.18cr Loans
---------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of Shantol
Green (India) Private Limited (SGPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank
Facilities 9.10 CARE D Assigned
Short Term Bank
Facilities 0.08 CARE D Assigned
Detailed Rationale & Key Rating Drivers
The ratings assigned to the bank facilities of SGPL continue to
remain constraint on account of ongoing delays in its debt
repayment.
Detailed description of the key rating drivers
Key Rating Weaknesses
On-going delays in debt servicing: There are on-going delays in
repayment of principle and interest amount of term loan due to weak
liquidity position.
Rajkot (Gujarat)-based, SGPL was incorporated in October 9, 2011 as
a private limited company by well-known 'Radhe Group' of Rajkot.
SGPL is engaged in manufacturing of fuel oil which is used in
heating furnace in substitution of diesel oil and carbon black
which finds its application in industries such as tyre, rubber
products, plastic, pipe, auto parts etc. as well in manufacturing
of conveyer belts, rubber sheet etc. SGPL has established its
manufacturing unit at Bhilwada, Rajasthan with installed capacity
of 90 tonne per day for fuel oil and 66 tonne per day for carbon
black as on March 31, 2018.
SHREE DULICHAND: Ind-Ra Assigns 'B+' Issuer Rating, Outlook Stable
------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Shree Dulichand
Chemicals Private Limited (SDCPL) a Long-term Issuer Rating of 'IND
B+'. The Outlook is Stable.
The instrument-wise rating actions are:
-- INR60 mil. Fund-based working capital limits assigned with IND
B+/Stable/IND A4 rating;
-- INR15 mil. Non-fund-based working capital limits assigned with
IND A4 rating;
-- INR40 mil. Proposed fund-based working capital limits*
assigned with Provisional IND B+/Stable/ Provisional IND A4
rating; and
-- INR35 mil. Proposed non-fund-based working capital limits*
assigned with Provisional IND A4 rating.
* The ratings are provisional and shall be confirmed upon the
sanction and execution of loan documents for the above facilities
by SDCPL to the satisfaction of Ind-Ra.
KEY RATING DRIVERS
The ratings reflect SDCPL's small scale of operations, as indicated
by the revenue of INR386.2 million in FY18 (FY17: INR298.8
million). The revenue increased on a YoY basis on account of an
increase in orders coupled growth in the product portfolio. SDCPL
achieved revenue of INR552.7 million during 11MFY19.
Additionally, the company's EBITDA margins are modest due to the
trading nature of the business. The margin was stable at 2.6% in
FY18 and the return on capital employed was 7% (8%).
The ratings also reflect SDCPL's weak credit metrics, primarily due
to high debt levels. The company's interest coverage (operating
EBITDA/gross interest expenses) improved to 1.6x in FY18
(FY17:1.3x) as the absolute EBIDTA rose to INR10.1 million in FY18
(FY17: INR7.9 million) due to the revenue growth. Meanwhile, its
net leverage (adjusted net debt/operating EBITDA) deteriorated to
11.1x (10.6x) owing to an increase in the total debt to INR112.6
million (FY17: INR83.6 million).
The rating factor in SDCPL's moderate liquidity position, with 86%
average utilization of fund-based facilities for the 12 months
ended February 2019. SDCPL had cash and cash equivalent of INR0.6
million at FYE18 (FYE17: INR0.2 million). Furthermore, its cash
flow from operations remained negative at INR27.3 million in FY18
(FY17: INR20.5 million) on account of higher working capital
requirements.
The ratings, however, benefit from the promoter's experience of
three decades in the supply of solvent chemicals to different
industries such as agrochemicals, petrochemicals, and
pharmaceuticals.
RATING SENSITIVITIES
Negative: A decline in the scale of operations and/or absolute
EBITDA, leading to deterioration in the credit metrics, on a
sustained basis, will be negative for the ratings.
Positive: A substantial increase in the scale of operations with an
increase in the absolute EBITDA, leading to an improvement in the
credit metrics, on a sustained basis, will lead to a positive
rating action.
COMPANY PROFILE
SDCPL was incorporated on August 13, 1986, in Secunderabad,
Telangana. The company is promoted by Mr. Mrutynjai Agarwal. It
trades in chemicals and supplies the same to industries such as
oil, metal, agrochemicals, fertilizers, petrochemicals,
pharmaceutical, and polymers.
SHREE KAUSHALYA: CARE Migrates B+ Rating to Not Cooperating
-----------------------------------------------------------
CARE Ratings has migrated the rating on bank facilities of Shree
Kaushalya Fibres (SKF) to Issuer Not Cooperating category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 5.14 CARE B+; Stable; Issuer not
Facilities cooperating; Based on basis
of best available information
Detailed Rationale& Key Rating Drivers
SKF has not paid the surveillance fees for the rating exercise
agreed to in its Rating Agreement. In line with the extant SEBI
guidelines, CARE's rating on SKF's bank facilities will now be
denoted as CARE B+; Stable; ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The rating assigned to the bank facilities of SKF is primarily
constrained on account of its Modest scale of operations with
constitution as a partnership concern, thin profitability margins,
leveraged capital structure and weak debt coverage indicators. The
rating is, further, constrained on account of its operating margins
susceptible to cotton price fluctuation and presence in the lowest
segment of the textile value chain and in a highly fragmented
cotton ginning industry.
The rating, however, derives strength from the experienced partners
in the cotton ginning industry, strategically located in the cotton
growing region and moderate liquidity position.
Detailed description of the key rating drivers
At the time of last rating on March 31, 2018, the following were
the rating strengths and weaknesses (Updated from FY18).
Key Rating Weakness
Modest scale of operations with constitution as a partnership
concern, thin profitability margins, leveraged capital structure
and weak debt coverage indicators: The scale of operations of the
firm has shown a growing trend in past three financial years ended
on March 31, 2018 and grew at a CAGR of 17.29% owing to decrease in
sale of agro commodities. Total operating income (TOI) of the
company has decreased by 13.34% over FY17 and registered INR13.32
crore in FY18. However, the scale of operation of the firm stood
modest. The profitability margins of the firm stood thin on account
of limited value addition and presence in the lowest segment of the
textile value chain. During FY18, the firm registered PBILDT and
PAT margin of 3.23% and 0.18% respectively. During FY18, PBILDT
margin of the firm has improved by 12 bps against FY17 mainly on
account of lower material cost and employee cost. However, PAT
margin of the firm remained stagnant in FY18 against FY17.
The capital structure of the firm stood leveraged marked with an
overall gearing of 3.15 times as on March 31, 2018, deteriorated
from 2.16 times as on March 31, 2017 mainly on account of higher
utilization of working capital bank borrowings. The debt service
coverage indicators of the firm stood weak with total debt to GCA
at 25.37 times as on March 31 2018 and interest coverage indicators
stood at 1.99 times in FY18. Further, its constitution as a
partnership concern restricts its overall financial flexibility in
terms of limited access to external funds for any future expansion
plans. Further, there is inherent risk of possibility of withdrawal
of capital and dissolution of the firm in case of death/insolvency
of partner.
Operating margins susceptible to cotton price fluctuation and
seasonality associated with the cotton industry: Operations of
cotton business are seasonal in nature, as sowing season is done
during November to February and harvesting cycle (peak season) is
spread from March to July every year. Prices of raw material i.e.
raw cotton are highly volatile in nature and depend upon factors
like monsoon condition, area under production, yield for the year,
international demand supply scenario, export policy decided by
government and inventory carried forward of the last year.
Furthermore, cotton being a seasonal crop, the inventory levels of
the entity generally remains high at the end of the financial year.
Thus, aggregate effect of both the above factors results
in exposure of ginners to price volatility risk.
Presence in the lowest segment of the textile value chain and in a
highly fragmented cotton ginning industry: High proportion of small
scale units operating in cotton ginning and pressing industry has
resulted in fragmented nature of industry leading to intense
competition amongst the players. As SGF operates in this highly
fragmented industry wherein large numbers of un-organised players
are also present, it has very low bargaining power against both its
customers as well as its suppliers. This coupled with limited value
addition in cotton ginning process results in the firm operating at
very thin profitability (PAT) margins.
Key Rating Strengths
Experienced proprietor in the cotton ginning industry: Mr. Dinesh
M. Tayal, has more than three decades of experience in the cotton
ginning industry and looks after overall affairs of the firm.
Further, Mr. Rajesh M. Tayal, has more than three decades of
experience and looks after purchase and sales function of the
firm.
Strategically located in the cotton growing region: Gujarat,
Maharashtra, Andhra Pradesh, Haryana, Madhya Pradesh and Tamil Nadu
are the major cotton producers states in India. The plant of SKAI
is located in one of the cotton producing belt of Sendhwa (Madhya
Pradesh) in India. The presence of SKAI in cotton producing region
results in benefit derived from lower logistics expenditure (both
on transportation and storage), easy availability and procurement
of raw materials at effective price.
Moderate liquidity position: The current ratio stood comfortable at
1.36 times as on March 31, 2018 however, quick ratio stood below
unity at 0.98 times as on March 31, 2016 mainly due to maintenance
of higher inventory of finished goods to meet the customer
demands.
Sendhwa (Madhya Pradesh) based Shree Kaushalya Fibers (SKF) was
formed in 2015 as a partnership concern by Mr. Ashok Tayal, Mr.
Dinesh Tayal, Mr. Nilesh Tayal, Mr. Rajesh Tayal and Mr. Shyam
Sunder Tayal with equal profit and loss ratio. The firm is engaged
in the business of cotton ginning and pressing along with the
production of cotton seed and cake. The manufacturing unit of the
firm has installed capacity to manufacture cotton bales of 100
Bales per day (BPD) as on March 31, 2017. SKAI procures raw cotton
directly from farmers and local mandis and sells its finished
products mainly in Madhya Pradesh, Rajasthan, Gujarat and South
India. The promoters are also associated with two other companies
named as 'Laxminarayan Fiber Private Limited', 'Shree Kalka Agro
Industries' (CARE B+; Stable) and 'Shree Kalka Fibers Private
Limited (CARE B+; Stable). The entities are associated in same line
of business and collectively, these three companies fall under
'Kalka' group.
SHRIVALLABH PITTIE: CARE Lowers Ratings on INR355cr Loans to C
--------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
ShriVallabh Pittie Industries Ltd (SVPIL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 185.00 CARE C; Stable; ISSUER NOT
Facilities COOPERATING Revised from
(Term Loan) CARE BBB-; Issuer Not
Cooperating; Based on best
available information
Long-term Bank 90.00 CARE C; Stable; ISSUER NOT
Facilities COOPERATING Revised from
(Term Loan) – CARE BBB-; Issuer Not
Bank of Baroda Cooperating; Based on best
available information
Long-term Bank 80.00 CARE C; Stable; ISSUER NOT
Facilities COOPERATING Revised from
(Cash Credit) CARE BBB-; Issuer Not
Cooperating; Based on best
available information
Detailed Rationale & Key Rating Drivers
SVPIL has not paid the surveillance fees for the rating exercise as
agreed to in its Rating Agreement. The rating on ShriVallabh Pittie
Industries Limited's bank facilities will now be denoted as CARE D;
ISSUER NOT COOPERATING, CARE C; Stable; ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The recent ratings revision take into account instances of delay in
the Instalment/interest servicing on term loan in one of
the banks till September 2018. However since October 2018 the
company has been regular in servicing of the term loan.
There are no delays in bank facilities of other banks.
Detailed description of the key rating drivers
At the time of last rating on October 31 2018, the following were
the rating strengths and weaknesses.
Key Rating Weaknesses
Delay in Debt Servicing: There have been account instances of delay
in the Instalment/interest servicing on term loan in one of the
banks till September 2018. However since October 2018 the company
has been regular in servicing of the term loan. There are no delays
in bank facilities of other banks.
Fragmented & Competitive Nature of Industry: The yarn manufacturing
industry in India is highly fragmented and dominated by a large
number of small scale units leading to high competition in the
industry and limited pricing flexibility, which constrains their
profitability. Due to the fragmented nature of the industry, the
ability to pass on the increase in raw material prices to the end
customers is limited and is usually accompanied by a time lag.
Profitability margins exposed to volatility in prices of key raw
material: Cotton is the key raw material for SVIPIL and have
exhibited considerable volatility in the recent past due to
government policies, demand-supply scenario, etc. Profitability
margins of textile manufacturers are exposed to adverse movement in
cotton prices, thus may impact the profitability margins of SVIPL.
Key Rating Strengths
Experienced promoters and group's established presence in spinning
sector: ShriVallabh Pittie group is presently headed by Mr Chirag
Pittie, who is closely involved in the management of business
and in defining & monitoring the business strategy. The group has a
long presence in textile sector though its flagship company
Platinum Textile Ltd. Shrivallabh Pittie Industries Limited (SVPIL)
is professionally managed with eminent professionals having wide
experience and business acumen and well supported by experienced
key management personnel.
ShriVallabh Pittie Industries Ltd (SVPIL) is a Special Purpose
Vehicle (SPV) formed by ShriVallabh Pittie Group for setting up a
100,000 spindle yarn manufacturing unit at Jhalawar, Rajasthan. The
Group is presently spearheaded by Mr Chirag Pittie. ShriVallabh
Pittie Group has a presence in the industry with manufacturing
capacity of 101000 spindles in sister concerns Platinum Textiles
Ltd [(Rated CARE BBB; Stable; Issuer not Cooperating as on March
2018), Brickwork BBB; Negative/A3; Issuer not Cooperating; as on
July 2018)] and is engaged in the business of manufacturing of
cotton, polyester and polyester & cotton blended yarn. Besides, PTL
also uses another 112,000 spindles on job-work/lease basis mainly
in the state of Tamil Nadu. Also, Helios Mercantile Pvt Ltd (Rated
CARE BBB (SO); Issuer not Cooperating), another group entity is
engaged in the business of trading in textile products such as
Polyester Staple Fibre (PSF), Cotton, Yarns, etc. For SVPIL, the
total cost estimated for the project with 1,00,000 spindle facility
was INR444.77 crores. The promoter's contribution is INR169.77
crore and term loan from the bank is INR275 crore. The project is
for the manufacture of combed compact cotton yarn, in the range of
40-60 counts and is fully constructed as on date.
SOND KNIT: Ind-Ra Migrates B+ LT Issuer Rating to Non-Cooperating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Sond Knit
Garments' 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 B+
(ISSUER NOT COOPERATING)' on the agency's website.
The instrument-wise rating action is:
-- INR100 mil. Fund-based working capital limit migrated to non-
cooperating category with IND B+ (ISSUER NOT COOPERATING)
rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
March 27, 2018. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
SKG is a partnership firm formed in 2006; it manufactures hosiery
and readymade garments and exports them to the US, the Middle East,
Canada, and Europe.
SPECIALITY SILICA: Ind-Ra Migrates BB LT Rating to Non-Cooperating
------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Speciality Silica
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:
-- INR48.90 mil. Term loan due on January 2026 migrated to non-
cooperating category with IND BB (ISSUER NOT COOPERATING)
rating; and
-- INR77.5 mil. Fund-based working capital limits migrated to
non-cooperating category with IND BB (ISSSUER NOT
COOPERATING) / IND A4+ (ISSUER NOT COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
April 5, 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, Speciality Silica manufactures silica at its
6,000MTPA plant in Rajasthan.
SUNAHRI MULTI: Ind-Ra Migrates 'BB-' LT Rating to Non-Cooperating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Sunahri Multi
Grain 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:
-- INR65 mil. Fund-based working capital limit migrated to Non-
Cooperating Category with IND BB- (ISSUER NOT COOPERATING)
rating; and
-- INR39.18 mil. Term loan due on September 2019 migrated to
Non-Cooperating Category with IND BB- (ISSUER NOT
COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
March 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 2009 as RLJ Multi Grain Private Limited, Sunahri
Multi Grain produces rice.
TRANFORMEX FERROUS: CARE Keeps D Rating in Non-Cooperating
----------------------------------------------------------
CARE had, vide its press release dated December 11, 2017, placed
the rating(s) of Tranformex Ferrous Private Limited (TFPL) under
the 'issuer non-cooperating' category as had failed to provide
information for monitoring of the rating for the rating exercise as
agreed to in its Rating Agreement. TFPL continues to be
non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and an email dated January
7, 2019, January 16, 2019, January 22, 2019, January 24, 2019,
February 6, 2019, February 21, 2019. In line with the extant SEBI
guidelines, CARE has reviewed the rating on the basis of the best
available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 4.64 CARE D; Issuer not cooperating;
Facilities Based on best available
Information
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Detailed description of the key rating drivers
At the time of last rating on December 11, 2017, the following were
the rating strengths and weaknesses:
Key Rating Weaknesses
Ongoing delays in Debt servicing: There are ongoing irregularity in
debt servicing due to weak liquidity position.
Vadodara (Gujarat) based TFPL incorporated in 2013 is engaged into
the business of recycling of Steel Scrap, TFPL imports Light metal
scraps (LMS) from Istambul, Dubai. LMS comprised of rubber and
steel. TFPL removes the rubber and process the remaining steel it
in order to convert it into Mild Steel Scrap. TFPL is operating
from its sole manufacturing plant located in GIDC Estate,
Ramanamdi(Baroda) with an installed capacity of 12000 metric tonnes
per annum (MTPA) for MS Steel Scrap.
VINIT FABRICS: Ind-Ra Migrates 'BB' LT Rating to Non-Cooperating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Vinit Fabrics
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:
-- INR45 mil. Fund-based limits migrated to non-cooperating
category with IND BB (ISSUER NOT COOPERATING) rating; and
-- INR14.61 mil. Term loan due December 2020 migrated to non-
cooperating category with IND BB (ISSUER NOT COOPERATING)
rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
April 2, 2018. Ind-Ra is unable to provide an update, as the agency
does not have adequate information to review the ratings.
COMPANY PROFILE
Vinit Fabrics, established by Vishwanath Munigilal Agarwal in 2010
as a closely held public limited entity, was converted into a
private limited company in May 2016. The company has been
operational since November 2013 and is engaged in the dyeing and
printing of fabrics.
VISHVAS POWER: Ind-Ra Corrects March 29 Rating Release
------------------------------------------------------
India Ratings and Research (Ind-Ra) rectified a press release on
Vishvas Power Engineering Services published on March 29, 2019, to
correctly state the rating action on the additional bank
facilities.
The amended version is as follows:
India Ratings and Research (Ind-Ra) has rated Vishvas Power
Engineering Services Private Limited's (VPESPL) additional bank
loans as follows:
-- INR13.89 mil. Long-term loans due on March 2026 assigned with
IND B/Stable rating;
-- INR10 mil. Fund-based Limit assigned with IND B/Stable/IND A4
rating;
-- INR10 mil. Non-fund-based limit assigned with IND A4 rating;
and
-- INR4 mil. Long-term loans due on April 28, 2020, Withdrawn
(repaid in full)
RATING SENSITIVITIES
Positive: An improvement in the liquidity position along with
revenue growth, and stable EBITDA margin, leading to an improvement
in the credit metrics, all on a sustained basis, could be positive
for the ratings.
Negative: A decline in the revenue and profitability, leading to
deterioration in the credit metrics, all on a sustained basis, will
be negative for the ratings.
COMPANY PROFILE
Incorporated in 1995, Nagpur-based VPESPL is engaged in the
manufacturing, repair, remanufacturing, refurbishment and servicing
of power transformers up to 220kV at its factory. Moreover, it is
engaged in the complete overhauling, testing-commissioning, and
erection-commissioning of power transformers up to 765kV at a
customer site.
=================
I N D O N E S I A
=================
BANK MANDIRI: S&P Alters Outlook to Positive & Affirms 'BB+' ICR
----------------------------------------------------------------
S&P Global Ratings revised its outlook on PT Bank Mandiri (Persero)
to positive from stable. At the same time, S&P affirmed its 'BB+'
long-term and 'B' short-term issuer credit ratings on the
Indonesian bank.
S&P revised the outlook because it expects Mandiri's asset quality
to improve over the next 12-18 months, and come closer to that of
the industry and peers. The bank's portfolio rebalancing strategy
and tighter underwriting in the midsized corporate segment will
underpin the improvement.
Mandiri's nonperforming loans (NPLs) and credit costs have declined
consistently over the past two years as the bank has recognized and
provided for most of its problem loans. The bank's NPL ratio
improved to 2.8% as of Dec. 31, 2018 (3.5% as of Dec. 31, 2017),
moving closer to the industry average of 2.4%. The absolute quantum
of NPLs also reduced to Indonesian rupiah (IDR) 20 trillion, from
IDR22 trillion in the same period. The decline is due to lower
slippages and higher write-offs. Credit costs also declined to 1.1%
from 1.6% during this period. S&P notes that credit costs could
climb upon the implementation of International Financial Reporting
Standard 9 in 2020, though it believes it will be lower than the
peak of 3.3% in 2016.
S&P believes Mandiri's tighter underwriting practices in the
mid-corporate segment will support its asset quality going forward.
Midsize enterprises, especially those linked to commodities-related
sectors such as transportation, steel, etc., were the major
contributors to the rise in the bank's NPLs when commodity prices
fell in 2015.
Mandiri carried out a comprehensive review of its midsize
enterprises portfolio to recognize and make provisions against
stressed loans. Since the review, the bank has tightened its
underwriting practices in this segment and reduced its exposure to
20% as of Dec. 31, 2018, from 30% as of Dec. 31, 2015. The bank's
strategy is to increase the proportion of consumer loans to 13%
(from 12% as of Dec. 31, 2018) and micro loans to 16% (from 14%)
while reducing loans to the midsized corporate segment to 18% (from
20%) and large corporate segment to 45% (46%). S&P expects
Mandiri's asset quality to benefit from the increase in the
proportion of granular consumer loans and reduction in the exposure
to small and midsize enterprises over the next few years.
S&P said, "Our ratings also take into account Mandiri's dominant
market position, majority deposit-funded liabilities profile, and
strong liquidity position to meet short-term obligations. The
bank's capitalization, as reflected in a high Tier 1 ratio of 19.8%
as of Dec. 31, 2018, will provide sufficient buffer against
asset-side risks.
"The positive outlook reflects our expectation that Mandiri's asset
quality will continue to improve over the next 12-18 months. We
also believe the bank will maintain its strong market position as
well as funding and liquidity profile.
"We will raise the rating if Mandiri's NPLs and credit costs are
commensurate with that of the industry and the peer average.
"We will revise the outlook back to stable if the improvement in
asset quality stalls, keeping Mandiri's asset quality metrics
inferior to that of the industry and peers."
=====================
N E W Z E A L A N D
=====================
D&V WALDEN: Mad Butcher Glen Innes Store in Liquidation
-------------------------------------------------------
Aimee Shaw at NZ Herald reports that Mad Butcher Glen Innes is the
latest store in the butcher chain to be liquidated, joining a now
ever-growing list of fallen franchisees.
D&V Walden Limited, trading as Mad Butcher Glen Innes in Auckland,
was placed into liquidation on April 1 with Peter Jollands of
Jollands Callander appointed liquidator, the Herald discloses.
The company is owned and directed by Damian Walden, according to
Companies Office records.
The Herald says the liquidator's first report, outlining what
creditors are owed, will be released to the Companies Office in six
months' time.
The Herald understands Mr. Jollands is also the liquidator for a
number of other Mad Butcher franchisees.
The Mad Butcher franchise, which was previously owned by NZX-listed
Veritas, is joint-owned by Michael Morton and partner Julie Leitch,
the daughter of original founder Sir Peter Leitch.
The pair bought back the business from Veritas for NZ$8 million in
July last year for a quarter of the NZ$40 million the company
purchased it for in 2013.
Mad Butcher store numbers have dramatically decreased, with around
16 store closures in the past few years. About 23 stores make up
the Mad Butcher chain today. In its heyday, the butcher chain had
40 stores throughout the country, the Herald notes.
=================
S I N G A P O R E
=================
HYFLUX LTD: Terminates Restructuring Plan with Indonesian Investor
------------------------------------------------------------------
Channel News Asia reports that Hyflux Ltd on April 4 cancelled a
restructuring agreement with the Salim-Medco consortium SM
Investments (SMI), saying it has "no confidence" the Indonesian
investor will complete the deal.
CNA relates that Hyflux said it "attempted on multiple occasions to
meaningfully engage with SMI on its assertions on the restructuring
agreement" to no avail.
It added: "In light of (SMI's) responses and conduct, Hyflux has no
confidence that the investor is prepared to continue to complete
the proposed SMI Investment, even if all outstanding conditions
precedent under the Restructuring Agreement are fulfilled," CNA
relays.
This follows developments from last week, when SMI said it was
reviewing the sums that should be set aside for Hyflux's working
capital needs and to settle creditors' claims, in light of "new
material information" on the embattled water treatment firm,
according to the report.
CNA says the Indonesian consortium did not specify what the new
information is, but said that it “significantly increases” the
working capital requirements of Hyflux group.
In light of the latest events, Hyflux has cancelled scheme meetings
scheduled for April 5 and April 8, as well as the Extraordinary
General meeting set for April 15, CNA notes.
According to the report, SMI released a statement on April 4 saying
it was "surprised" by Hyflux's move to terminate the agreement.
"(SMI) is surprised by the action taken by Hyflux," the consortium
said. "SMI has been waiting for Hyflux to disclose further material
information following multiple requests for such disclosure.
"The delay in disclosing this material information has prevented
SMI from determining a workable allocation between working capital
and the settlement amount to creditors under the Restructuring
Agreement."
It added: "As noted previously, SMI has already issued Hyflux two
notices to remedy threats to the Tuaspring and Magtaa projects on
Mar 18 and 25, 2019 respectively. These threats have not been
remedied. (On Wednesday), SMI was informed of a threat to a third
major project."
SMI also said it abided by the Restructuring Agreement at all
times, and is taking legal advice on the matter, CNA adds.
In October last year, Hyflux announced that SMI would take a 60 per
cent stake in the company, investing a sum of around SGD530
million, CNA recalls.
The company's total liabilities stood at SGD2.6 billion at the end
of March, CNA discloses.
About Hyflux
Singapore-based Hyflux Ltd -- https://www.hyflux.com/ -- provides
various solutions in water and energy areas worldwide. The company
operates through two segments, Municipal and Industrial. The
Municipal segment supplies a range of infrastructure solutions,
including water, power, and waste-to-energy to municipalities and
governments. The Industrial segment supplies infrastructure
solutions for water to industrial customers. It employs 2,300
people worldwide and has business operations across Asia, Middle
East and Africa.
As reported in the Troubled Company Reporter-Asia Pacific on May
24, 2018, Hyflux Ltd. said that the Company and five of its
subsidiaries, namely Hydrochem (S) Pte Ltd, Hyflux Engineering Pte
Ltd, Hyflux Membrane Manufacturing (S) Pte. Ltd., Hyflux Innovation
Centre Pte. Ltd. and Tuaspring Pte. Ltd. have applied to the High
Court of the Republic of Singapore pursuant to Section 211B(1) of
the Singapore Companies Act to commence a court supervised process
to reorganize their liabilities and businesses.
The Company said it is taking this step in order to protect the
value of its businesses while it reorganises its liabilities.
The Company has engaged WongPartnership LLP as legal advisors and
Ernst & Young Solutions LLP as financial advisors in this process.
=====================
S O U T H K O R E A
=====================
DONGBU STEEL: KDB Picks KG Group as Preferred Bidder
----------------------------------------------------
Yonhap News Agency reports that the state-run Korea Development
Bank (KDB) said on April 4 that it has selected a consortium led by
KG Group, a local logistics and chemical business group, to buy
Dongbu Steel Co.
Dongbu Steel, one of South Korea's largest electric arc furnace
operators, has been suffering massive losses, Yonhap notes.
Yonhap relates that the policy lender said the steelmaker will sell
new shares to the consortium to hand over the firm's majority
stake.
Dongbu Steel is a South Korean conglomerate corporation which
operates through seven business segments with 42 subsidiaries and
35,000 employees. The Group produces industry, chemical, shipping,
insurance and financial products.
Dongbu Steel was put under a debt workout scheme in 2015 with its
annual sales hovering around KRW2.5 trillion (US$2.2 billion),
according to Yonhap. Its creditors, led by KDB, Nonghyup and KEB
Hana Bank, own some 85 percent of Dongbu Steel.
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