/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/190429.mbx T R O U B L E D C O M P A N Y R E P O R T E R A S I A P A C I F I C Monday, April 29, 2019, Vol. 22, No. 85 Headlines A U S T R A L I A BERNDALE CAPITAL: Court Appoints Cor Cordis as Receivers BROOM TIME: First Creditors' Meeting Set for May 7 CHEMICAL SYSTEMS: Second Creditors' Meeting Set for May 2 FACILITY MANAGEMENT: First Creditors' Meeting Set for May 6 MAZ TECHNOLOGY: Second Creditors' Meeting Set for May 3 OZZY STATES: First Creditors' Meeting Set for May 6 RVZTY PTY: First Creditors' Meeting Set for May 7 WILLIAMS DAVIS: Second Creditors' Meeting Set for May 3 YANYARRIE PTY: First Creditors' Meeting Set for May 7 C H I N A CONCORD NEW: Fitch Affirms 'BB-' LT IDR, Alters Outlook to Stable MIE HOLDINGS: S&P Ups ICR to CCC- Ff. Completion of Exchange Offer REDCO PROPERTIES: Fitch Rates $180MM Senior Notes Final 'B' I N D I A AFFIL VITRIFIED: Ind-Ra Migrates BB+ LT Rating to Non-Cooperating ALAPATT FASHION: ICRA Reaffirms B- Rating on INR5.50cr Loan ALAPATT JEWELS: ICRA Reaffirms B Rating on INR5.50cr LT Loan ANANTNATH SILK: Ind-Ra Migrates BB+ LT Rating to Non-Cooperating APEX MRI: Insolvency Resolution Process Case Summary AXIS OVERSEAS: Ind-Ra Migrates BB- LT Rating to Non-Cooperating BHUWALKA STEEL: Insolvency Resolution Process Case Summary BRG IRON: Insolvency Resolution Process Case Summary EDWARD FOOD: ICRA Reaffirms B+ Rating on INR36cr Loan ELYSIUM PHARMACEUTICALS: Ind-Ra Lowers LT Issuer Rating to 'D' EMI TRANSMISSION: Insolvency Resolution Process Case Summary FT OWNERS: Insolvency Resolution Process Case Summary GEFAB FACADE: Ind-Ra Migrates B+ Issuer Rating to Non-Cooperating GOKUL COTTON: ICRA Hikes Rating on INR20cr Loans to B+ GWASF QUALITY: ICRA Hikes Rating on INR6.40cr Loan to B+ HARAN CHANDRA: ICRA Reaffirms D Rating on INR11.80cr Loan HMR STEELS: Ind-Ra Migrates B+ LT Issuer Rating to Non-Cooperating INNOVATIVE STUDIOS: Insolvency Resolution Process Case Summary JMT AUTO: ICRA Lowers Rating on INR87cr Fund Based Loan to D JONNA STEELS: ICRA Reaffirms B+ Rating on INR14.50cr LT Loan MAS PROJECT: Insolvency Resolution Process Case Summary MIL STEEL: ICRA Raises Rating on INR6.10cr Cash Credit to B- NAGARJUNA FERTILIZERS: Ind-Ra Affirms 'D' Long Term Issuer Rating NAINITAL MOTORS: Ind-Ra Migrates BB+ LT Rating to Non-Cooperating NARMADA AGROBASE: Ind-Ra Migrates BB- LT Rating to Non-Cooperating NAVDURGA ISPAT: Ind-Ra Migrates 'BB+' LT Rating to Non-Cooperating NEHANI TILES: ICRA Reaffirms B+ Rating on INR8.0cr Cash Loan NILADREE BUILD-TECH: Ind-Ra Migrates BB Rating to Non-Cooperating PRACHI PRIVATE: Ind-Ra Raises Long Term Issuer Rating to 'BB' PRECISE SEAMLESS: ICRA Reaffirms B+ Rating on INR15cr Loan RA-NI PRECAST: Insolvency Resolution Process Case Summary RAMAN CASTING: Insolvency Resolution Process Case Summary S3 ELECTRICAL: Insolvency Resolution Process Case Summary SARASWATI MEDICAL: Ind-Ra Migrates 'BB+' Rating to Non-Cooperating SHREE CHHATRAPATI: ICRA Reaffirms B Rating on INR4.72cr Loan SITARGANJ FIBERS: Insolvency Resolution Process Case Summary SSV SPINNERS: Ind-Ra Migrates BB- Issuer Rating to Non-Cooperating SUMANGLAM IMPEX: Insolvency Resolution Process Case Summary SUNAHRI MULTI: Ind-Ra Withdraws 'BB-', Non-Cooperating Rating TAKSHEEL SOLUTIONS: Insolvency Resolution Process Case Summary TIRUPATI COTTON-DWARKA: ICRA Reaffirms B Rating on INR6.0cr Loans VICTORY ELECTRALS: Insolvency Resolution Process Case Summary VISHRAMBHAI GORASIA: Ind-Ra Migrates BB- Rating to Non-Cooperating M A L A Y S I A SEACERA GROUP: Rejected Resolutions Risk Company to Liquidation M O N G O L I A TAVAN BOGD: Fitch Gives 'B-' LT FCR, Outlook Stable N E W Z E A L A N D SONCAM LIMITED: Mad Butcher Albany Placed Into Liquidation S I N G A P O R E HYFLUX LTD: Chang Cheow Teck Steps Down as EVP of Operations HYFLUX LTD: Unit Hit with Demand from Maybank for Payment PLACE HOLDINGS: Narrows Net Loss in Q1 to SGD334,000 - - - - - ================= A U S T R A L I A ================= BERNDALE CAPITAL: Court Appoints Cor Cordis as Receivers -------------------------------------------------------- The Australian Securities and Investments Commission has successfully applied to the Federal Court of Australia for orders to appoint receivers and managers of former OTC derivatives issuer, Berndale Capital Securities Pty Ltd and related companies, Berndale Capital Securities Management Pty Ltd and Algoplus Pty Ltd. Ms. Rachel Burdett-Baker and Mr Bruno Secatore, of Cor Cordis, Melbourne, have been appointed to act as joint and several receivers. ASIC sought the appointment of receivers due to concerns about Berndale's financial records, its handling of client monies, the adequacy of its client money reconciliation reports and Berndale's client monies purportedly being held outside of Australian authorised deposit-taking institutions, in breach of legal requirements. Berndale, its related parties, and ASIC appeared in the Federal Court, Melbourne on April 18, 2019. The interim application follows ASIC's initial application and orders made on December 5, December 13 and December 19, 2018. ASIC's investigation is continuing. The proceeding before the Court is ongoing. The receivers are required to report back to the Court concerning the affairs of Berndale by May 31, 2019. Berndale Capital Securities Pty Ltd was an OTC derivatives Australian financial services licence holder until Nov. 22, 2018 when its licence was cancelled. Berndale Capital Securities Management Pty Ltd and Algoplus Pty Ltd were each former authorised representatives of Berndale. ASIC alleges that the financial affairs of each company are extensively intermingled with the financial affairs of Berndale. BROOM TIME: First Creditors' Meeting Set for May 7 -------------------------------------------------- A first meeting of the creditors in the proceedings of Broom Time Cleaning Pty Ltd will be held on May 7, 2019, at 10:00 a.m. at the offices of Hamilton Murphy, at Unit 18, 28 Belmont Avenue, in Rivervale, WA. Stephen Robert Dixon and Richard Rohrt of Hamilton Murphy were appointed as administrators of Broom Time on April 24, 2019. CHEMICAL SYSTEMS: Second Creditors' Meeting Set for May 2 --------------------------------------------------------- A second meeting of creditors in the proceedings of Chemical Systems Australia Pty Ltd, trading as Bulk Cleaning & Pool Supplies, has been set for May 2, 2019, at 10:00 a.m. at the offices of O'Brien Palmer, at Level 9, 66 Clarence Street, in Sydney, NSW. The purpose of the meeting is (1) to receive the report by the Administrator about the business, property, affairs and financial circumstances of the Company; and (2) for the creditors of the Company to resolve whether the Company will execute a deed of company arrangement, the administration should end, or the Company be wound up. Creditors wishing to attend are advised proofs and proxies should be submitted to the Administrator by May 1, 2019, at 4:00 p.m. Liam Bailey of O'Brien Palmer was appointed as administrator of Chemical Systems on March 18, 2019. FACILITY MANAGEMENT: First Creditors' Meeting Set for May 6 ----------------------------------------------------------- A first meeting of the creditors in the proceedings of Facility Management Essentials Pty Ltd will be held on May 6, 2019, at 10:00 a.m. at the offices of Cor Cordis, at Level 29, 360 Collins Street, in Melbourne, Victoria. Daniel Peter Juratowitch of Cor Cordis was appointed as administrator of Facility Management on April 23, 2019. MAZ TECHNOLOGY: Second Creditors' Meeting Set for May 3 ------------------------------------------------------- A second meeting of creditors in the proceedings of Maz Technology Australia Pty Ltd has been set for May 3, 2019, at 10:00 a.m. at the offices of Regus Brisbane, at Level 23, 127 Creek Street, in Brisbane, Queensland. 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 May 2, 2019, at 4:00 p.m. Marcus Watters of Jirsch Sutherland was appointed as administrator of Maz Technology on March 25, 2019. OZZY STATES: First Creditors' Meeting Set for May 6 --------------------------------------------------- A first meeting of the creditors in the proceedings of Ozzy States Pty Ltd will be held on May 6, 2019, at 10:00 a.m. at the offices of Cor Cordis, at One Wharf Lane, Level 20, 171 Sussex Street, in Sydney, NSW. Andre Lakomy & Alan Walker of Cor Cordis were appointed as administrators of Ozzy States on April 23, 2019. RVZTY PTY: First Creditors' Meeting Set for May 7 ------------------------------------------------- A first meeting of the creditors in the proceedings of RVZTY Pty Ltd (formerly known as Lul Technology Pty Ltd) will be held on May 7, 2019, at 11:00 a.m. at the offices of Farnsworth Shepard Level 5, 2 Barrack Street, in Sydney, NSW. Adam Shepard of Farnsworth Shepard was appointed as administrator of RVZTY Pty on April 24, 2019. WILLIAMS DAVIS: Second Creditors' Meeting Set for May 3 ------------------------------------------------------- A second meeting of creditors in the proceedings of Williams Davis Pty Ltd has been set for May 3, 2019, at 10:30 a.m. at the offices of PricewaterhouseCoopers, at Level 17, Tower One, International Towers Sydney, in Barangaroo, NSW. The purpose of the meeting is (1) to receive the report by the Administrator about the business, property, affairs and financial circumstances of the Company; and (2) for the creditors of the Company to resolve whether the Company will execute a deed of company arrangement, the administration should end, or the Company be wound up. Creditors wishing to attend are advised proofs and proxies should be submitted to the Administrator by May 2, 2019, at 4:00 p.m. Andrew Scott and Sam Marsden of PricewaterhouseCoopers were appointed as administrators of Williams Davis on March 25, 2019. YANYARRIE PTY: First Creditors' Meeting Set for May 7 ----------------------------------------------------- A first meeting of the creditors in the proceedings of Yanyarrie Pty Limited will be held on May 7, 2019, at 10:00 a.m. at the offices of Bernardi Martin, at 195 Victoria Square, in Adelaide, SA. Hugh Sutcliffe Martin of Bernardi Martin was appointed as administrator of Yanyarrie Pty on April 24, 2019. ========= C H I N A ========= CONCORD NEW: Fitch Affirms 'BB-' LT IDR, Alters Outlook to Stable ----------------------------------------------------------------- Fitch Ratings has revised the rating Outlook on China-based Concord New Energy Group Limited's to Stable from Negative and affirmed the Long-Term Foreign-Currency Issuer Default Rating at 'BB-'. Fitch has also affirmed CNE's senior unsecured rating and the rating on its USD200 million 7.9% bonds due 2021 at 'BB-'. The Outlook revision to Stable reflects Fitch's expectation of CNE's continued deleveraging. CNE's FFO adjusted net leverage improved to 6.8x in 2018 from 9.1x a year ago, supported by strong power generation from rising utilisation hours, stable effective tariff and the fading impact from the time lag between capital expenditure and cash flow contribution from new capacities. CNE plans for steady capacity expansion each year and aims to divest more assets in the coming years, which should further help deleverage. Fitch expects FFO adjusted net leverage to improve to below 6.0x over the next two years, commensurate with its 'BB-' rating. KEY RATING DRIVERS Deleveraging to be Sustained: CNE's FFO adjusted net leverage fell to 6.8x in 2018 after surging to 9.1x a year ago. The sudden leverage rise in 2017 was largely a result of a time lag between capex and cash flow contribution from new capacities. CNE is likely to reduce FFO adjusted net leverage to below 6.0x in the next two years, commensurate with its rating, as more of its wind farms are connected to the grid. Fitch expects more visible capex, strong capacity utilisation, stable tariff, healthy operating cash flow and potential asset sales to also help with the deleveraging. Capacity Expansion: CNE's expanded its wholly owned wind power capacity by 470MW in 2018, increasing its total attributable installed capacity by 26.1% to 2,277MW. Capex slightly decreased to CNY3.3 billion in 2018 (including CNY854 million paid with bills instead of cash) from the peak of CNY3.5 billion in 2017. Management targets annual capacity installation of 400MW-500MW in 2019 and 2020. Fitch expects CNE's capex to be around CNY2.8 billion to CNY3.3 billion per year in 2019-2022 and follow a downward trend in the next few years. Projects Disposed at Premium: CNE recently said it will sell 75% of the equity in two wind farms that have combined capacity of 96MW for CNY226 million. The price translates into a price/book ratio of 1.4x and unit capacity economic value of around CNY9.0/watt, which is above the construction cost. The two projects are in the catalogue of renewable plants that will receive government subsidies. The pricing premium reflects the high quality and strong cash flow of CNE's projects, in its view. After the transaction CNE will continue to guarantee CNY481 million of loans of the two projects, which Fitch does not consider risky because the loans are secured by cash flow from the projects. Fitch has consequently treated only 50% of these guarantees as off-balance sheet debt. CNE will also charge fees for the guarantee and maintenance of the assets after the transaction. Further asset sales will help CNE to deleverage, although Fitch has currently not factored more divestments in its analysis. Improving Capacity Utilisation: Utilisation of both wind and solar power plants in China recovered in 2018 as efforts to reduce wastage of renewable power, like supply control and guaranteed utilisation, gained traction. Utilisation of wind power capacity rose by 147 hours to a national average of 2,095 hours in 2018 and overall curtailment dropped 5pp to 7%. Utilisation at CNE's wholly owned wind farms rose by 216 hours to 2,288 hours, beating the national average in absolute utilisation and improvement. Management said utilisation improved as a result of higher turbine efficiency and better wind resources. Tariff Stable in Near Term: The average realised tariff of CNE's consolidated wind farms increased 2.0% to CNY0.5948/KWh in 2018 after falling 4.0% in 2017. The recovery was likely due to a lower proportion of power traded at market prices. The Chinese government is introducing a bidding mechanism to encourage construction of new wind and solar farms that receive lower or zero subsidies. Fitch expects more than half of CNE's 1.4GW of wind projects in the pipeline to still be entitled to charge fixed tariffs of CNY0.5-0.6/KWh. Fitch expects CNE's average tariff to be stable in the near term, although new projects beyond 2020 may have much lower tariffs than existing ones due to the new bidding mechanism. Delay in Renewable Subsidy Payment: CNE was entitled to renewable subsidies of CNY529 million, or 42% of its power revenue of CNY1,246 million, in 2018. The proportion was lower than 2017's 52% and 2016's 61% due to the increasing share of wind power, which receives lower subsidies, in CNE's total power generation. CNE's renewable subsidy receivables increased 91% to CNY857 million by end-2018 due to a delay in payment. Fitch expects CNE's subsidy collection to have increased by around 30% in 2018 as projects listed in renewable subsidy catalogue started to receive their subsidies, but it forecasts only 5% growth in subsidy collection in 2019 and 2020 as a quick fix for the shortfall in the renewable fund that provides the subsidies is unlikely. Nevertheless, CNE's operating cash flow is much healthier than that of solar power peers. VAT Deduction: Wind and solar farms enjoy a 50% VAT rebate as an incentive for supplying renewable energy. Wind farms' revenue is net of VAT and only the 50% rebate is reflected in the income statement and included as EBITDA. Wind farms are exempt from VAT in the first five operating years, during which they do not pay VAT or receive rebates. The amount of VAT that has been exempted, although 100% retained by wind farms, is not reflected in the income statement. Fitch has adjusted CNE's EBITDA by adding 50% of the VAT that has been exempted to it. DERIVATION SUMMARY CNE's 'BB-' rating reflects its healthy project portfolio and lower reliance on subsidies as a revenue source as it focuses on wind power. Its leverage and coverage metrics are broadly commensurate with peers rated in the lower 'BB' category. CNE's credit profile is comparable to its Indian peer Greenko Energy Holdings (Greenko, BB-/Stable). CNE's FFO adjusted net leverage of 6.8x at end-2018 is higher than the forecast 5.8x for Greenko at end-March 2019. However, CNE has much stronger FFO fixed-charge coverage of around 3.0x compared with the forecast 1.7x for Greenko due to CNE's lower funding cost. CNE's smaller scale than Greenko is somewhat balanced by its lower counterparty risk. The majority of Greenko's key customers are non-federal government owned utilities that have weak credit profiles, while CNE collects revenue from strong state-owned power grids and receives government subsidies. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer: - Stable capacity utilisation for existing capacities; - Tariffs of existing wind farms to remain stable; - New capacities to be installed in 2019 and 2020 will be entitled to tariffs of CNY0.5-0.6/KWh; new capacities installed from 2021 to have lower tariffs close to benchmark tariffs of coal-fired power; - Capacity installation of 400MW-500MW each year in 2019 and 2020; unit capex at around CNY7,000/kilowatt - Fitch deducts 50% of CNE's VAT bill on equipment investment from EBITDA and funds from operations RATING SENSITIVITIES Developments that May, Individually or Collectively, Lead to Positive Rating Action - FFO adjusted net leverage lower than 5.0x on a sustained basis Developments that May, Individually or Collectively, Lead to Negative Rating Action - FFO adjusted net leverage higher than 6.0x on a sustained basis - FFO fixed charge coverage lower than 2.5x on a sustained basis LIQUIDITY Sufficient Liquidity in Short Term: CNE had CNY1.35 billion readily available cash at end-2018, enough to cover short-term debt of CNY923 million. Fitch forecasts CFO of CNY690 million in 2019, which together with its existing cash, should be sufficient to cover the cash component of its capex in 2019. Fitch forecasts negative FCF of CNY2.7 billion in 2019. Fitch expects that 70% of the CNY3.2 billion capex for 2019 can be easily financed by project loans or financial leasing. CNE has CNY2.9 billion of project-finance banking facilities and more uncommitted facilities as of end-2018. CNE also secured a USD30 million convertible loan from Goldman Sachs and announced the disposal of two wind farms for CNY226 million, which will help its liquidity position. MIE HOLDINGS: S&P Ups ICR to CCC- Ff. Completion of Exchange Offer ------------------------------------------------------------------ S&P Global Ratings raised its long-term issuer credit rating on China-based oil and gas producer MIE Holdings Corp. to 'CCC-' from 'SD'. S&P's rating on MIE reflects its view that the company's non-repayment risk in the next six months remains high due to the material liquidity deficit. MIE's capital structure is still unsustainable, despite the recent completion of its exchange offer. MIE's overall debt level remains high. Yet, the company's debt maturity profile has slightly improved with the issuance of new three-year US$248 million notes to replace the 84% tendered 2019 notes. The completion of the exchange offer has allowed MIE to avoid a hard default on principal payment of its 2019 notes and buy time for further optimization on its capital structure. MIE used a secured facility granted by private lenders and its internal cash to make the exchange offer payment. Some noteholders did not consent to the exchange, leaving US$50.7 million outstanding for the 2019 notes. The company has repaid the outstanding principal with the same loan from private lenders on its maturity today, April 25, 2019. S&P said, "We believe MIE would continue to face a material liquidity deficit over the next six months. The company has depleted the majority of its cash on hand for the exchange offer payment. Based on our oil price assumption of US$60/barrel in 2019-2020, we estimate MIE's EBITDA generated in the next six months (mainly from its China Daan oilfield) may not be able to cover its interest payment of nearly US$50 million over the same period." The company also has about US$265 million debt due in the next six months, of which US$103 million is payment-on-demand loan. MIE's disposal of its Canadian asset Canlin Energy is still in progress. The company could partly alleviate its liquidity pressure, with the estimated net cash proceeds of US$150 million received after completion of the asset sale. S&P believes MIE would repay the high-interest loans with the proceeds, which could improve its capital structure. However, it is still uncertain whether the disposal would be successful. The negative outlook reflects the strong uncertainty on MIE's timely debt payment within the next six months and unsustainable debt leverage under a volatile oil price environment. S&P said, "We may lower our rating on MIE if we believe a default on the company's debt is virtually certain. "We may upgrade MIE if its liquidity improves such that we do not see non-repayment risk on a six-month horizon. This could happen if the company receives financing resources through asset sales or secures long-term facilities to replace its existing high-interest loans." MIE Holdings Corp., together with its subsidiaries, primarily explores, develops, produces, and sells crude oil, gas, and other petroleum products under production-sharing contracts in China, North America, and Kazakhstan. REDCO PROPERTIES: Fitch Rates $180MM Senior Notes Final 'B' ----------------------------------------------------------- Fitch Ratings has assigned China-based Redco Properties Group Ltd's (B/Stable) USD180 million 9.875% senior notes due 2021 a final rating of 'B', with a Recovery Rating of 'RR4'. The notes are rated at the same level as Redco's senior unsecured rating as they constitute its direct and senior unsecured obligations. The final rating is the same as the expected rating assigned on 23 April 2019 and follows the receipt of final documentation conforming to information already received. KEY RATING DRIVERS Transition to Fast-Churn Model: Fitch believes Redco is transitioning to a fast-churn model that will lead to swifter sales turnover. Redco's full-year contracted sales, including joint ventures (JVs), rose by 67% to CNY22 billion in 2018, but the average selling price (ASP) dropped by 17% to CNY8,837 per sq m due to investment in more lower-tier cities. Redco has expanded quickly by adopting more JV structures and making minority investments in lower-tier cities. Fitch estimates that Redco's attributable contracted sales accounted for only 55% of the total, at around CNY12 billion, compared with attributable sales of around 60% in 2017 and 70% in 2016. The company expects attributable sales to stabilise at around 50% in the next few years. Expansion Sees Fluctuating Leverage: Fitch estimates that Redco's net debt/adjusted inventory, including JV adjustments, may have dropped to around 30% in 2018 from 43% in 2017 and 7.4% in 2016. The leverage decrease was helped by the large increase in non-controlling interest and payables to various parties, which Fitch believes will not be sustainable in controlling leverage in the long term. Fitch believes Redco's leverage will keep fluctuating due to a changing company structure - an increase in JV and lower attributable sales, as well as its land acquisitions. Redco spent around 40% of its sales proceeds to sustain its attributable sales growth in 2017-2018, which was the main reason for a sharp increase in leverage in 2017. The investment pace may have to continue to develop a sustainable market presence. It remains unclear if Redco can contain its leverage below 40%; however, Fitch expects the company's leverage to improve after it has stabilised its structure and has achieved a sufficient land bank size of over three years of development to maintain its expanding contracted sales. Larger Land Bank Supports Growth: Redco significantly increased its total land bank to 10 million sqm by end 2018, from 4.9 million sqm at end-2017, with the four Tier 2-3 cities of Nanchang, Tianjin, Jinan and Fuyang accounting for 62% of gross floor area. Redco also entered four cities in the Yangtze River Delta region in 2018. The company estimates that the total saleable resources will be around CNY90 billion, which is sufficient for three years of contracted sales. Redco needs to continuously secure low-cost land to maintain a healthy land bank life due to the significant increase in the company's forecast for contracted sales. Low-Cost Land Improves Margin: Redco's EBITDA margin rose to 26.6% in 2018, from 17.9% in 2017, due to lower average land acquisition costs of CNY1,114/sqm in 2018 against CNY2,173/sqm in 2017. Redco mainly acquires its land bank through M&A, allowing it to keep the average cost of its new land at around CNY2,000/sqm, compared with an ASP of above CNY7,000/sqm. DERIVATION SUMMARY Redco's attributable contracted sales of CNY12 billion in 2018 are similar to those of 'B' rated peers, such as Modern Land (China) Co., Limited's (B/Stable) CNY19 billion in 2018 and Beijing Hongkun Weiye Real Estate Development Co., Ltd.'s (B/Stable) CNY11 billion in 2017. They all have relatively small land banks compared with larger operators, but Redco is gradually increasing its land bank to maintain its growth. Redco's leverage is lower than both peers' whose leverages are around 50%, but the company is subject to more uncertainty due to its transition to a fast-churn model and its use of more JV structures to expand. Companies rated at 'B+', one notch above Redco, generally have sustainable business models with larger sales, larger land banks of more than three years of development and stable leverage at around 40%. KEY ASSUMPTIONS Fitch's Key Assumptions within Its Rating Case for the Issuer - Contracted sales, including JVs, reaching CNY22 billion in 2019 and CNY30 billion in 2020 - Gross profit margin from property development maintained at between 28%-32% during 2019-2020 - Land premium accounting for 55% of annual sales receipts in 2019-2020 - Construction cost accounting for around 40% of annual sales receipts in 2019-2020 RATING SENSITIVITIES Developments that May, Individually or Collectively, Lead to Positive Rating Action - Annual attributable contracted sales sustained above CNY10 billion while maintaining available-for-sale land bank at 2.5 years of development - Net debt/adjusted inventory sustained below 40% - EBITDA margin sustained above 20% Developments that May, Individually or Collectively, Lead to Negative Rating Action - Net debt/adjusted inventory above 50% for a sustained period - EBITDA margin below 15% for a sustained period LIQUIDITY Sufficient Liquidity: Redco had total cash of CNY7.9 billion, including restricted cash of CNY2.2 billion, as of end 2018 - sufficient to cover short-term debt of CNY6.1 billion. Average funding cost has remained stable at 7.13% in 2018, compared with 7.49% in 2017. ========= I N D I A ========= AFFIL VITRIFIED: Ind-Ra Migrates BB+ LT Rating to Non-Cooperating ----------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated Affil Vitrified 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 appear as 'IND BB+ (ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating actions are: -- INR180 mil. Fund-based limits migrated to non-cooperating category with IND BB+ (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 17, 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, AVPL is a Gujarat-based manufacturer of double-charged vitrified tiles, with an installed capacity of 2.59 million square meters per annum. ALAPATT FASHION: ICRA Reaffirms B- Rating on INR5.50cr Loan ----------------------------------------------------------- ICRA reaffirmed ratings on certain bank facilities of Alapatt Fashion Jewellery, as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term- 5.50 [ICRA]B- (Stable); reaffirmed; Fund-based removed from 'Issuer not- cooperating' category Rationale The rating remains constrained by Alapatt Fashion Jewellery's modest scale of operations, which restricts the benefits arising out of economies of scale. The rating considers the geographical concentration risk faced by the firm due to its single showroom presence and increasing competition from other renowned jewellery retailers in the Trivandrum region. The rating remains constrained by its stretched financial profile as characterised by a leveraged capital structure, modest coverage indicators and high working capital intensity driven by high inventory levels. The rating also factors in the exposure of the firm's profit margins to fluctuations in gold prices in absence of any formal hedging mechanism. The rating, nonetheless, positively factors in the extensive experience of the promoters in the jewellery retail business for over two decades, the favourable location of the firm's retail showroom in a prominent location in Trivandrum (Kerala) and strong reputation enjoyed by the Alapatt brand in the region, which supports footfalls. The rating also considers the favourable demand scenario for the gold jewellery industry supported by structural economic reforms towards formalisation of the industry, evolving lifestyle, growing disposable income, favourable demographic dividend and increasing penetration of the organised sector. Outlook: Stable The Stable outlook reflects ICRA's expectation that Alapatt Fashion Jewellery will continue to benefit from its established track record in the locality supported by sustained demand underpinned by the cultural affinity for gold. The outlook may be revised to Positive, if substantial and sustainable improvement in revenue and profitability and better working capital management, strengthens its financial risk profile. The outlook may be revised to Negative, if cash accruals are lower than expected, or if any stretch in working capital cycle, weakens the firm's liquidity. Key rating drivers Credit strengths Established brand and prominent store location drives footfalls – Alapatt Fashion Jewellery operates a ~2,000-square feet showroom in Trivandrum. The extensive presence of the promoter, Mr. John Alapatt, for nearly three decades in the jewellery retail business in the Trivandrum market has enabled the firm in enhancing the brand loyalty as it enjoys the continued patronage of its customers. Healthy growth in revenues in the recent past –The firm's operating income (OI) grew to INR29.7 crore in FY2018 from INR8.5 crore in FY2017, registering a healthy YoY growth during the corresponding period. The revenue growth was supported by revival in rural demand, improved liquidity during the corresponding period with fading demonetisation effect and strong wedding demand, among others. Credit challenges Small scale of operations with high geographical concentration – With an OI of INR29.7 crore in FY2018, the firm's scale of operations remains small and the same restricts flexibility benefits with respect to product pricing and negotiating favourable terms with suppliers. With a single showroom presence in Trivandrum and no expansion plans in the near term, it also faces high risk of geographical concentration. Intense competition restricts pricing flexibility – The gold jewellery retailing industry is highly fragmented and is characterised by stiff competition with major store expansions by the larger retailers in the recent years limiting the pricing flexibility among the players. Stretched financial profile – Alapatt Fashion Jewellery's financial profile remains stretched, as characterised by a leveraged capital structure with a weak gearing of 5.4 times as on March 31, 2018 owing to its modest net-worth position, coupled with relatively higher reliance on external borrowings. Besides, the working capital intensity remained high with a net working capital/operating income (NWC/OI) of 64.2% as on March 31, 2018, due to the high stock of gold held by the firm. Liquidity position Alapatt Fashion Jewellery's liquidity position remains stretched as characterised by limited availability of unutilised bank facilities and moderate cash balances. The average utilisation of the firm's working capital facilities remained high and stood at nearly 99.5% of the sanctioned limits for the period November 2017 to February 2019. Alapatt Fashion Jewellery is a partnership firm set up by Mr. John Alapatt in Trivandrum in 1992, which is involved in the business of gold and diamond jewellery retailing and operates with single retail showroom (~2,000 square feet area) in a leased premise located in Trivandrum. Most of the its gold requirements are met through melted gold obtained from exchange of old jewellery from customers. Besides, the firm also sources gold and diamond jewellery from merchants based out of Mumbai and Bangalore. In FY2018, the firm reported a net profit of Rs.1.58 crore on an OI of INR29.65 crore, as compared to a net loss of INR3.58 crore on an OI of INR8.50 crore in the previous year. ALAPATT JEWELS: ICRA Reaffirms B Rating on INR5.50cr LT Loan ------------------------------------------------------------ ICRA reaffirmed ratings on certain bank facilities of Alapatt Jewels, as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term-Fund- Based 5.50 [ICRA]B (Stable); reaffirmed Rationale The rating remains constrained by the Alapatt Jewels' modest scale of operations, which restricts benefits arising out of economies of scale. The rating considers the geographical concentration risk faced by Alapatt Jewels due to its single showroom presence, increasing competition from other renowned jewellery retailers in the Cochin region and possible cannibalisation of its sales among other family-owned Group entities sharing the 'Alapatt' brand name. The rating remains constrained by the firm's stretched financial profile as characterised by a leveraged capital structure, modest coverage indicators and high working capital intensity driven by high inventory levels. The rating also factors in the exposure of its profit margins to fluctuations in gold prices in absence of any formal hedging mechanism. The rating, nonetheless, positively factors in the extensive experience of the promoters in the jewellery retail business for nearly two decades, the favourable location of the firm's retail showroom in a prominent location in Cochin (Kerala) and strong reputation enjoyed by the Alapatt brand in the region, which supports footfalls. The rating also considers the favourable demand scenario for the gold jewellery industry supported by structural economic reforms towards formalisation of the industry, evolving lifestyle, growing disposable income, favourable demographic dividend and increasing penetration of the organised sector. Outlook: Stable The Stable outlook reflects ICRA's expectation that Alapatt Jewels will continue to benefit from its established track record in the locality supported by sustained demand underpinned by the cultural affinity for gold. The outlook may be revised to Positive, if substantial and sustainable improvement in revenue and profitability and better working capital management, strengthens its financial risk profile. The outlook may be revised to Negative, if cash accruals are lower than expected, or if any stretch in working capital cycle, weakens the firm's liquidity. Key rating drivers Credit strengths Established brand and prominent store location drives footfalls - Alapatt Jewels operates a ~10,000-square feet showroom in Cochin's MG Road. The extensive presence of the promoter, Mr. Manuel Alapatt, for nearly two decades in the jewellery retail business (and that of the brand Alapatt for over six decades) in the Cochin market has enabled the firm in enhancing the brand loyalty as it enjoys continued patronage of its customers. Healthy growth in revenues in the recent past - The firm's operating income (OI) grew to INR19.8 crore in FY2018 from INR9.8 crore in FY2017, registering a healthy YoY growth of nearly 100%. The revenue growth was supported by revival in rural demand, improved liquidity during the corresponding period with fading demonetisation effect and strong wedding demand, among others. Credit challenges Small scale of operations with high geographical concentration – With an OI of INR19.8 crore in FY2018, the firm's scale of operations is small, which restricts flexibility benefits with respect to product pricing and negotiating favourable terms with suppliers. With a single showroom presence in Cochin and no expansion plans in the near term, it also faces a high risk of geographical concentration. Intense competition restricts pricing flexibility - The gold jewellery retailing industry is highly fragmented and is characterised by stiff competition, with major store expansions by the larger retailers in the recent years limiting the pricing flexibility among the players. While the firm enjoys strong brand equity, similar names of other family-owned Group entities, operating under the name of Alapatt, poses the risk of cannibalisation of sales among different showrooms in Cochin region. Stretched financial profile – Alapatt Jewels' financial profile remains stretched, as characterised by a leveraged capital structure with a weak gearing of 3.0 times as on March 31, 2018 owing to its modest net-worth position, coupled with relatively higher reliance on external borrowings. Besides, the working capital intensity remained high with net working capital/operating income (NWC/OI) of 76.1% as on March 31, 2018, due to high stock of gold held by the firm. Liquidity position Alapatt Jewels' liquidity position remains stretched as characterised by limited availability of unutilised bank facilities and modest cash balances. The average utilisation of the firm's working capital facilities remained high and stood at nearly 98.5% of the sanctioned limits for the period November 2017 to January 2019. Alapatt Jewels is a Cochin-based partnership firm established by Mr. Manuel Alapatt in 2000, which is involved in manufacturing and selling of gold and diamond jewellery through its 10,000-square feet retail showroom in Ernakulam, Cochin. It sources gold in the form of old gold from customers and outsources the same to goldsmiths in the region for converting them into ornaments. Besides, the firm also deals in traded jewellery procured from merchants based out of Mumbai and Bangalore. In FY2018, the firm reported a net profit of INR0.23 crore on an OI of INR19.76 crore, as compared to a net loss of INR1.60 crore on an OI of INR9.84 crore in the previous year. ANANTNATH SILK: Ind-Ra Migrates BB+ LT Rating to Non-Cooperating ---------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated Anantnath Silk Mills 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: -- INR241.5 mil. Fund-based limits migrated to non-cooperating category with IND BB+ (ISSUER NOT COOPERATING) / IND A4+ (ISSUER NOT COOPERATING) rating; and -- INR27.5 mil. Term loan due on July 2021 migrated to non- cooperating category with IND BB+ (ISSUER NOT COOPERATING) 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 1982, ASMPL manufactures suiting fabric and linen product. The company is equipped with in-house fabric weaving facilities. ASMPL operates with a capacity of 114 looms. APEX MRI: Insolvency Resolution Process Case Summary ---------------------------------------------------- Debtor: Apex MRI Centre Private Limited 5-2-246/2A Shanthi Nagar Khammam, Prakasam Telangana 507001 Insolvency Commencement Date: April 12, 2019 Court: National Company Law Tribunal, Hyderabad Bench Estimated date of closure of insolvency resolution process: October 9, 2019 Insolvency professional: Sridhar Venkatraya Sundararaja Interim Resolution Professional: Sridhar Venkatraya Sundararaja Regus, 1st Floor, Phoenix Tech Tower Plot No. 14/46, Survey No. 1(part) IDA-Uppal Village and Mandal Uppal Notified Industrial Area Service Society, Hyderabad Telangana 500039 E-mail: sridharema@gmail.com rp.sridharvs@gmail.com Last date for submission of claims: April 26, 2019 AXIS OVERSEAS: Ind-Ra Migrates BB- LT Rating to Non-Cooperating --------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated Axis Overseas 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: -- INR220 mil. Fund-based working capital limits migrated to non- cooperating category with IND BB- (ISSUER NOT COOPERATING) rating; and -- INR30 mil. Non-fund-based working capital limits migrated to non-cooperating category with IND A4+ (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on April 20, 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 2005, Kolkata-based Axis Overseas is primarily engaged in the trading of raw jutes and finished jute products. BHUWALKA STEEL: Insolvency Resolution Process Case Summary ---------------------------------------------------------- Debtor: M/s. Bhuwalka Steel Industries Limited Registered office address: 10th Mile Old Madras Road Bandapura Village Bangalore 560049 Insolvency Commencement Date: April 8, 2019 Court: National Company Law Tribunal, Bangalore Bench Estimated date of closure of insolvency resolution process: October 4, 2019 (180 days from commencement) Insolvency professional: Mr. Shivadutt Bannanje Interim Resolution Professional: Mr. Shivadutt Bannanje Manipal Centre, S-709 South Block, 47, Dickenson Road Bangalore 560042 Mobile: 919845286251 E-mail: ip.shivaduttb@gmail.com Last date for submission of claims: April 29, 2019 BRG IRON: Insolvency Resolution Process Case Summary ---------------------------------------------------- Debtor: BRG Iron & Steel Co. Private Limited Registered office: Godrej Waterside Suit No. 402-403-404 Plot No. 5, Sector 5 Salt Lake City West Bengal 700091, India Insolvency Commencement Date: March 5, 2019 Court: National Company Law Tribunal, Kolkata Bench Estimated date of closure of insolvency resolution process: September 1, 2019 (180 days from commencement) Insolvency professional: Kannan Tiruvengadam Interim Resolution Professional: Kannan Tiruvengadam Netaji Subhas Villa Flat No. 3 C 18, Karunamoyee Ghat Road Near Dharapara Tollygunge Kolkata, West Bengal 700082 E-mail: calkannan@gmail.com cirp.brg@gmail.com Last date for submission of claims: March 19, 2019 EDWARD FOOD: ICRA Reaffirms B+ Rating on INR36cr Loan ----------------------------------------------------- ICRA reaffirmed ratings on certain bank facilities of Edward Food Research and Analysis Centre Limited's (EFRAC), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Non-Convertible 36.00 [ICRA]B+ (Stable); Debenture Programme Reaffirmed Rationale The reaffirmation of the rating considers EFRAC's relatively small scale of current operations and a weak financial profile, characterised by an aggressive capital structure, subdued coverage indicators and significant cash losses incurred in FY2018 and H1 FY2019 (unaudited). ICRA notes that EFRAC has a high working capital intensity of business because of a stretched receivable position that exerts pressure on its liquidity. The rating also considers the high coupon rate on non-convertible debentures (NCDs), which results in high interest outgo. However, scheduled principal repayment at the end of five years (FY2022) eases liquidity pressure to some extent. The rating, however, derives comfort from the established track record of the Keventer Group, which supports EFRAC's market position to an extent, and a reputed client base, which mitigates the counterparty credit risk to a large extent. The rating positively considers the receipt of accreditation/ certification from most of the approving agencies in the food, drug and environment division, which is likely to support the operations, going ahead. In ICRA's opinion, EFRAC's ability to set up and commence the USFDA-approved laboratory within the estimated cost and timeframe and scaling up of operations while improving its capital structure, coverage indicators and cash accruals, would remain the key rating sensitivities, going forward. Outlook: Stable ICRA believes that EFRAC will continue to benefit from the extensive experience of the promoters. The outlook may be revised to Positive if the company is able to scale up its operations while improving its capital structure, coverage indicators and cash accruals. The outlook may be revised to Negative if there is any further delay in setting up the USFDA-approved laboratory, which could adversely impact the company's profitability. Key rating drivers Credit strengths Established track record of the Keventer Group - EFRAC is a part of the Keventer Group, which comprises various entities involved in diversified businesses like fast moving consumer goods (FMCG), real estate, food products and agro-related businesses. The Group has supported the business of the company in operational aspect as well as by extending financial assistance through infusing equity/ unsecured loans, as and when required. Accreditation/ certification in place from most of the approving agencies - The company operates a testing and research laboratory for food and food products, drugs and cosmetics, and environment. It has received accreditation/ certification from most of the approving agencies for all the divisions that the company caters to, which is likely to support the operations, going ahead. Reputed customer profile reduces counterparty risk to an extent - The company has established relationships with reputed clients and have availed repeat orders from them. The reputed client base reduces the counterparty risk to a large extent. Credit challenges Weak financial profile characterised by an aggressive capital structure, subdued coverage indicators and significant cash losses - The capital structure remained aggressive, as depicted by a gearing of 5.99 times as on March 31, 2018, which increased further to 18.22 times in H1 FY2019 (unaudited) on account of an erosion of net worth due to losses witnessed by the company during the said fiscal. High debt levels and low profits kept the debt coverage indicators depressed. The company recorded an operating profit of INR2.08 crore and INR0.31 crore in FY2018 and H1 FY2019 (unaudited), respectively, however, high interest and finance costs led to losses at the net level, which subsequently led to cash losses. Relatively small scale of operations - The company's scale of operations continues to remain small. The operating income (OI) stood at INR14.84 crore in FY2018, depicting a growth of around 1% over FY2017. It registered an OI of INR6.13 crore in H1 FY2019 (unaudited) and the top line is expected to be similar in FY2019 to that of the previous fiscal. High working capital intensity of business exerts pressure on the company's liquidity - The company's working capital intensity of operations has remained high, as reflected by the net working capital relative to operating income (NWC/OI) of 80% and 78% in FY2018 and H1 FY2019 (unaudited), respectively. This in turn, has stretched the company's liquidity position, which also restricts its financial flexibility. High coupon rate on NCDs - The coupon rate on the NCDs is high at 18%, which results in high interest outgo. However, scheduled principal repayment at the end of five years eases liquidity pressure to some extent. Liquidity position EFRAC's fund flow from operations (FFO) continues to remain negative primarily on account of cash losses registered by the company. With EFRAC's business expected to record a modest growth in the medium term, its FFO is estimated to remain negative in the near term, at least. Moreover, high receivables of the company increase the working capital requirements and stretch the company's liquidity position further, which restricts its financial flexibility to a large extent. In the absence of adequate cash flows from operations, the liquidity position of the company is likely to remain under pressure in the near term at least. Edward Food Research and Analysis Centre Limited (EFRAC), a part of the Keventer Group, was established in August 1921 by Mr. Edward Keventer as Edward Keventer Private Limited. In 1986, the company was acquired by Mr. M. K. Jalan, Promoter and Chairman of the Keventer Group. Subsequently, the company's name was changed to Edward Keventer Life Science Limited before being further changed to Edward Food Research and Analysis Centre Limited. Mandala Food Co-Investments II Ltd. and Mandala Litmus SPV, based out of Mauritius, made an equity investment of INR18.42 crore in FY2017. After the investment, Mandala Group holds an equity stake of 51% in EFRAC. The company operates a testing and research laboratory for food and food products, drugs and cosmetics, and environment at Subhash Nagar in North 24 Parganas district, West Bengal. ELYSIUM PHARMACEUTICALS: Ind-Ra Lowers LT Issuer Rating to 'D' -------------------------------------------------------------- India Ratings and Research (Ind-Ra) has downgraded Elysium Pharmaceuticals Limited's (EPL) Long-Term Issuer Rating to 'IND D' from 'IND BB'. The Outlook was Stable. The instrument-wise rating actions are: -- INR267.36 mil. Term loan (long-term) due on June 2023 downgraded with IND D rating; -- INR150 mil. Fund-based limits (long-term) downgraded with IND D rating; and -- INR62 mil. (reduced from INR65 mil.) Non-fund-based limit (short-term) downgraded with IND D rating. KEY RATING DRIVERS The downgrade reflects delays in debt servicing by EPL during the three months ended March 2019 owing to a stressed liquidity position. RATING SENSITIVITIES Positive: Timely debt servicing for at least three consecutive months could result in a positive rating action. COMPANY PROFILE Incorporated in 1995 by Mr. Yashwant Patel, EPL is a formulation company based in Dabhasa, 19km from Vadodara, Gujarat. The company commenced commercial operations in 1997, manufacturing sterile formulations such as liquid and dry parenteral and non-sterile formulations such as tablets, capsules, liquid orals, ointment, and dry syrups under third-party and contract manufacturing agreements for established pharmaceutical firms. It produces own drugs under the ethical segment. EMI TRANSMISSION: Insolvency Resolution Process Case Summary ------------------------------------------------------------ Debtor: EMI Transmission Limited Registered office: 101, 1st Floor, Centre Point Dr. Babasaheb Ambedkar Road, Parel Mumbai 400012, Maharashtra Factory address: 157/2/1, Village-Brahmanwada, Sinnar Nashik 422102, Maharashtra Insolvency Commencement Date: April 11, 2019 Court: National Company Law Tribunal, Mumbai Bench Estimated date of closure of insolvency resolution process: October 8, 2019 (180 days from commencement) Insolvency professional: Shailesh Bhalchandra Desai Interim Resolution Professional: Shailesh Bhalchandra Desai Headway Resolution and Insolvency Services Pvt. Ltd. 1006, Raheja Centre, Nariman Point Mumbai 400021, Maharashtra E-mail: ip10362.desai@gmail.com cirpemit@gmail.com Last date for submission of claims: April 27, 2019 FT OWNERS: Insolvency Resolution Process Case Summary ----------------------------------------------------- Debtor: FT Owners Car N Care Ltd Door No. 46, Kundrathur Main Road Moondramkattalai, Chennai Chennai TN 600128 IN Insolvency Commencement Date: April 8, 2019 Court: National Company Law Tribunal, Chennai Bench Estimated date of closure of insolvency resolution process: October 4, 2019 Insolvency professional: Kannan Sambasivam Interim Resolution Professional: Kannan Sambasivam "Skyline Castle" 27, Abdul Razack Street Saidapet, Chennai 600015 E-mail: charitarthkannan@gmail.com Last date for submission of claims: April 26, 2019 GEFAB FACADE: Ind-Ra Migrates B+ Issuer Rating to Non-Cooperating ----------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated Gefab Facade Solutions 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 B+ (ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating actions are: -- INR115 mil. Fund-based working capital limit migrated to non- cooperating category with IND B+ (ISSUER NOT COOPERATING) / IND A4 (ISSUER NOT COOPERATING) rating; and -- INR50 mil. Non-fund-based working capital limits migrated to non-cooperating category with IND A4 (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on April 17, 2018. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. COMPANY PROFILE Established in 2011, Gefab Facade Solutions offers glass facade solutions, structural glazing work, aluminum composite panel cladding, curtain walling, bolted glazing, patch fitting glass assemblies, partitions, doors, windows, unplasticised polyvinyl chloride fittings, aluminum joints, handrails, shower cubicles, sensor operated doors, acoustic movable walls, revolving doors, skylights, etc. GOKUL COTTON: ICRA Hikes Rating on INR20cr Loans to B+ ------------------------------------------------------ ICRA has revised the ratings on certain bank facilities of Gokul Cotton Industries (GCI), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Cash Credit 9.00 Upgraded to [ICRA]B+ (Stable) from [ICRA]B (Stable) Unallocated Limits 11.00 Upgraded to [ICRA]B+ (Stable) from [ICRA]B (Stable) Rationale The rating upgrade factors in the significant growth in GCI operating income and improvement in the capital structure in FY2018, along with the full repayment of the outstanding bank term loan in the current fiscal i.e., FY2019. The rating also reflects the extensive experience of the partners in the cotton ginning industry and the locational advantages due to the unit's proximity to raw material sources. The rating, however, continues to remain constrained by the firm's below average financial risk profile, characterised by low profit margins, modest return indicators and small net worth base. The rating is also restricted by the vulnerability of the firm's profitability to fluctuations in raw material prices (raw cotton), the low value-added nature of the cotton ginning business, the intense competitive intensity and the exposure to regulatory risks with regard to the minimum support price (MSP) set by the Government. ICRA notes the partnership constitution of GCI, wherein any significant withdrawal from the capital account could adversely impact its net worth and thereby its credit profile. Outlook: Stable ICRA expects GCI to continue to benefit from the extensive experience of its partners and the stable outlook on cotton output. The outlook may be revised to Positive if substantial growth in revenue and profitability, reduction in debt levels, and infusion of equity strengthen the financial risk profile. The outlook may be revised to Negative if cash accrual is lower than expected, or if any major debt-funded capital expenditure, or a stretch in the working capital cycle, weakens liquidity. Key rating drivers Credit strengths Extensive experience of partners in cotton ginning industry - The key partners, Mr. Dinesh R. Bhoraniya and Mr. Mulji G. Ghodasara have extensive experience in the cotton ginning business. Favourable location of plant - The firm benefits from its proximity to the cotton producing belt of India i.e. Gujarat, which helps to lower transportation cost and ensures easy access to quality raw material. Healthy revenue growth in FY2018 along with improvement in capital structure - The firm's revenue grew to INR37.22 crore in FY2018 from INR23.57 crore in FY2017. The capital structure of the firm also improved—the gearing was 1.52 times as on March 31, 2018 versus 2.15 times as on March 31, 2017. Further, the maturity of term loan and full repayment of the same in current fiscal i.e., FY2019, are likely to reduce debt repayment obligation burden and improve the DSCR going forward. Credit challenges Below average financial risk profile - The firm's profit margin was thin—the operating margin was 1.98% and the net margin was 0.56% in FY2018, due to limited value addition to the products sold. The debt coverage indicators also stood modest with interest coverage of 2.52 times, Total Debt/OPBDITA of 5.56 times and NCA/Total Debt of 8% in FY2018. Also, the net worth base was small at INR2.71 crore as on March 31, 2018. Vulnerability of profitability to fluctuations in raw cotton prices - The profit margins are exposed to fluctuations in the raw material (raw cotton) prices, which depend upon various factors such as seasonality, climatic conditions, international demand and supply situation, and export policy. Further, it is exposed to regulatory risks with regard to the MSP set up by the Government. Intense competition and fragmented industry - The intense competition from other small and unorganised players in the industry limits the firm's bargaining power with customers and suppliers, thereby exerting pressure on its margins. Liquidity position The firm's fund flow from operations stood positive in FY2018. The gross cash flows turned positive in FY2018 due to lower YoY incremental working capital requirements. Correspondingly, the free cash flows of the firm also turned positive in FY2018. Overall, the firm's liquidity position remains average, as reflected by low working capital limit utilisation (~50 utilisation in the last 15 months from December 2017 to February 2019) and free cash of INR0.06 crore as on March 31, 2018. GCI was established as a partnership firm in September 2013 and started the business of ginning and pressing of cotton from April 2014. GCI's manufacturing facility is located at Tankara, in the Rajkot district of Gujarat. The unit is equipped with 32 ginning machines and one pressing machine and has a processing capacity of approximately 16000 MTPA of raw cotton. The key promoters of the firm Mr. Dinesh R. Bhoraniya and Mr. Mulji G. Ghodasara, have extensive experience in the cotton ginning business. GWASF QUALITY: ICRA Hikes Rating on INR6.40cr Loan to B+ -------------------------------------------------------- ICRA has revised the ratings on certain bank facilities of GWASF Quality Castings Private Limited, as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund based- Working Capital 6.40 [ICRA]B+ (Stable); upgraded from [ICRA]B(Stable) Fund-based- Term Loan 1.10 [ICRA]B+ (Stable); upgraded from [ICRA]B(Stable) Unallocated Limits 2.00 [ICRA]B+ (Stable); upgraded from [ICRA]B(Stable) Rationale The rating upgrade favourably factors in the improvement in the operating income and the profitability of the company in the current fiscal because of higher offtake from its customers. The rating continues to consider the extensive experience of the management of over three decades and the established track record of the company in the steel-casting industry. The rating also factors in the company's established relationship with reputed customers and the preferred supplier agreement with Flowserve Corporation with annual off-take arrangement, which support its business prospects. The rating, however, continues to remain constrained by the company's modest scale of operations, restricting operational and financial flexibility to an extent. High working capital requirement due to elongated debtor levels result in dependency on external borrowings, leading to a gearing level of 1.2 times as on March 31, 2018 and moderate coverage indicators. Further, the rating factors in the company's high customer concentration and intensely competitive nature of the industry, which limit bargaining power as well as its pricing flexibility. The rating also notes the vulnerability of the company's profitability to raw material price fluctuations. Outlook: Stable The 'Stable' outlook reflects ICRA's expectation that the company would continue to benefit from the extensive experience of its promoters in the steel-casting industry. The outlook may be revised to 'Positive' if the company is able to demonstrate substantial growth in revenues and profitability, and improvement in its working capital intensity. The outlook may be revised to 'Negative' if the company reports lower-than-expected cash accruals, or if any major capital expenditure or any stretch in working-capital cycle weakens the liquidity. Key rating drivers Credit strengths Extensive experience of the promoters in the casting industry - Established in 1988, GWASF's promoters have over three decades of experience in the steel-casting industry and has received various certifications over the years. It has developed its expertise mainly to cater to the requirements of valve and pump manufacturers. Established relationship with key customers - Over the years, the company has established healthy relationship with reputed international customers such as Flowserve Corporation, ITT Inc. etc., and domestic customers such Weir Minerals (India) Private Limited, Pacmac Engineers Private Limited etc., resulting in repeat orders. However, the customer concentration continues to remain high with the top-five customers accounting for ~90% of the total revenues in FY2019. Preferred vendor status and yearly off-take arrangement with Flowserve Corporation - GWASF is the preferred vendor for Flowserve Corporation, US, one of the leading manufacturers and suppliers of pumps, valves and components to process industries (power, oil, gas, chemical etc.). The company has a three-year preferred supplier agreement with Flowserve Corporation that provides yearly- off-take arrangement. As per the terms, the agreement is automatically extended for a three-year period, provided both parties meet the obligations under the agreement. Credit challenges Modest scale of operations - While the company's scale of operations has witnessed an improvement in FY2019, it continues to remain modest. The company's top line was impacted over the past three fiscals due to reduced order inflow from its US and European customers following weak demand from the end-user industries. The modest scale of operations restricts its operational and financial flexibility to a major extent. Moderate financial risk profile and high working capital intensity - Although the coverage indicators of the company remained moderate in FY2018, they are expected to improve in FY2019 supported by improvement in profitability. The working capital intensity of the company has remained high historically primarily due to high inventory holding and stretched receivables. Margins exposed to raw-material price fluctuations and forex risks - With high inventory holding requirements due to long execution period, the company's profitability remains vulnerable to fluctuation in raw-material prices. However, procurement being largely order-backed coupled with the ability to pass on the price fluctuations, mitigate the risk to some extent. With around 60-70% of its revenues derived from exports, the profitability is also exposed to foreign exchange fluctuation risks. Given that the bank borrowings are foreign currency denominated, there is partial natural hedge available for the receivables. Highly fragmented nature of the industry limits pricing flexibility - Intense competition and fragmented nature of the industry, with presence of many small and medium-sized players, limit the overall pricing flexibility of the company and in turn, keep the margins under check. Liquidity Position: The liquidity position remains moderate with high working capital intensity of operations owing to high debtors and inventory levels. While the cash balances were low as on March 31, 2018, comfort could be derived from the cushion available in the form of undrawn working capital limits, with average utilization being around 71% over the 12-month period ending December 2018. Established in 1988, GWASF Quality Castings Private Limited manufactures steel and ferrous alloy castings for valves, pumps etc. It was started by Mr. Gautham Krishnan, who has over three decades of experience in the castings industry. The company's manufacturing facility is in Mangalore with an installed capacity of 720 MT per annum. The company started exporting its products to the US and Europe in 1995. During FY2019, the company has reported a revenue of INR18.3 crore (on provisional basis) till February 2019. HARAN CHANDRA: ICRA Reaffirms D Rating on INR11.80cr Loan --------------------------------------------------------- ICRA reaffirmed ratings on certain bank facilities of Haran Chandra Cold Storage Pvt Ltd's (HCCSPL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based-Working capital facilities 5.39 [ICRA]D; Reaffirmed Fund Based-Term Loans 11.80 [ICRA]D; Reaffirmed Non Fund Based- Bank Guarantee 0.25 [ICRA]D; Reaffirmed Unallocated Limits 0.06 [ICRA]D/[ICRA]D; Reaffirmed Rationale The reaffirmation of the rating primarily takes into account the company's consistent delay in timely servicing of debt-obligations due to stretched liquidity position. The rating also remains constrained by HCCSPL's small scale of current operations, its weak financial risk profile as reflected by nominal profits, high gearing and depressed coverage indicators. The rating is also impacted by the high working capital intensive nature of operations due to the practice of extending up-front advances to the farmers at the time of loading of potatoes, which exerts pressure on the liquidity position. The ratings are further constrained by the regulated nature of the industry, making it difficult to pass on the increase in operating costs, which exerts pressure on the profitability. HCCSPL is exposed to the agro-climatic risks as its business performance entirely depends upon a single agro commodity — potato. ICRA notes that the company remains exposed to the counterparty risk due to loans extended to farmers, given the chances of delinquencies, if potato prices fall to a low level. The rating, however, derives support from the established track record of the company in the cold-storage business and the promoters' extensive experience in the industry. Besides, HCCSPL enjoys location-specific advantage as its cold storage unit is situated in West Bengal, a state well known for large-scale potato production. Key rating drivers Credit strengths Long track record of promoters in the management of cold storages – The promoters are involved in the business of cold storage through other Group entities for a long time, and their experience supports the operations of HCCSPL. Location-specific advantage due to presence in West Bengal - HCCSPL enjoys location-specific advantage due to its presence in West Bengal, a state well known for large-scale potato production. Credit challenges Delays in servicing of debt obligations— The company continues to delay in timely servicing of debt obligations due to its stretched liquidity position. Regulated nature of the industry exerts pressure on profitability— The West Bengal State Marketing Board determines the maximum rental to be charged by the cold storage and revises it periodically. Income from rental charged is the major source of the company's revenue, but expenses incurred to run the cold storage like maintenance, human resource, and finance cost etc. are variable in nature. This exerts pressure on the company's profitability. Recovery of rental and advances given to farmers, contingent upon movement in potato price— As per the industry practice, HCCSPL provides advances against storage of potato to farmers/ traders, which it recovers along with interest and rent at the time of inventory release. This practice exposes the company to counterparty risk, given the chances of default if potato prices fall significantly. Weak financial profile indicated by nominal profits, high gearing, and depressed coverage indicators— The regulated nature of the industry and the practice of providing advances to farmers keep the company's profitability under check and requirement of working-capital facilities high. The company has also availed term loan facility to increase its storage capacity. The financial risk profile of the company has remained weak as reflected by nominal profits, high gearing and depressed level of coverage indicators. High working capital intensity of business exerts pressure on liquidity position and restricts financial flexibility— The industry practice of providing advances to farmers and its recovery along with rental charges at the time of off-loading exert pressure on its liquidity. ICRA notes that the company has sizeable long-term debt-service obligations and high working capital intensity for business, which are likely to keep its cash flows stretched over the medium term at least. Liquidity position The liquidity position of HCCSPL would continue to remain stretched in view of sizeable long-term debt service obligations compared to estimated cash accruals from the business. Incorporated in 2014, Haran Chandra Cold Storage Pvt Ltd (HCCSPL) provides cold storage facilities to farmers and traders. The warehouse is located in the Cooch Behar district of West Bengal with an installed capacity of 317,275 quintal and is mainly used for storage of potatoes by farmers/ traders in that area. Apart from HCCSPL, the promoters are involved in the business of cold storage through other Group companies and have an existing network, which is expected to support the revenue generation of HCCSPL. HMR STEELS: Ind-Ra Migrates B+ LT Issuer Rating to Non-Cooperating ------------------------------------------------------------------ India Ratings and Research (Ind-Ra) has migrated HMR Steels 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 B+ (ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating action is: -- INR380 mil. Fund-based limits migrated to Non-Cooperating Category with IND B+ (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on May 2, 2018. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. COMPANY PROFILE HMR Steels is engaged in the trading of mild steel plates and heavy plates. INNOVATIVE STUDIOS: Insolvency Resolution Process Case Summary -------------------------------------------------------------- Debtor: M/s Innovative Studios Pvt. Ltd. #135, Outer Ring Road Varthur Hobli, Marathahalli Bangalore South, Bangalore-KA Insolvency Commencement Date: April 11, 2019 Court: National Company Law Tribunal, Bengaluru Bench Estimated date of closure of insolvency resolution process: October 8, 2019 Insolvency professional: Mr. Balady Shekar Shetty Interim Resolution Professional: Mr. Balady Shekar Shetty E-98, 7A Cross, Manyata Residency Nagavara, Bengaluru 560045 E-mail: bss.balady@gmail.com Last date for submission of claims: April 25, 2019 JMT AUTO: ICRA Lowers Rating on INR87cr Fund Based Loan to D ------------------------------------------------------------ ICRA has revised the ratings on certain bank facilities of JMT Auto Limited, as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Term Loans 52.35 [ICRA]D downgraded from [ICRA]B(Stable) Fund-based Limits 87.00 [ICRA]D downgraded from [ICRA]B(Stable) Non-fund Based Facilities 48.60 [ICRA]D downgraded from [ICRA]A4 Bill Discounting Facility 1.00 [ICRA]D downgraded from [ICRA]A4 Unallocated Limits 11.05 [ICRA]D downgraded from [ICRA]B(Stable) Rationale The revision in ratings considers JMT Auto Limited's recent devolvement of letter of credit (LC) which has remained unpaid for more than 30 days on account of continued tightness in JMT's liquidity position. While revising the ratings ICRA has also taken note of the restart of the resolution process under the Corporate Insolvency Resolution Proceedings (CIRP) for its parent company, Amtek Auto Limited. In July 2018, Liberty House had made the winning bid at INR4200 crore, but subsequently failed to make the payment and hence, the National Company Law Tribunal (NCLT) has now allowed the creditors to restart the process. The ratings are also constrained by high sales concentration risk in the automobile sector and client concentration risk with with a major portion of sales made to Tata Motors Ltd and its subsidiaries. Nonetheless, ICRA continues to take note of the company's integrated nature of operations with in-house casting and forging facilities along with its established relationships with reputed clients Key rating drivers. Credit strengths Established relationships with reputed clients both in the domestic and export markets - JMT's established relationships with reputed clientele has helped it in establishing its credentials as a machined component manufacturer, helping it to secure orders in both the domestic and the export markets. Vertically integrated nature of operations with in-house casting and forging facilities provide better control on quality and costs - - JMT commenced operations in 1987 primarily as an ancillary to erstwhile Telco, supplying various machined components for its Medium and Heavy Commercial Vehicle (M&HCV) segment. The company has eight manufacturing plants located in Jamshedpur, Dharwad and Lucknow. JMT's existing operations are vertically integrated with in-house casting and forging facilities, which provide better control on quality and costs. Credit challenges Recent devolvements in LC for over 30 days- There have been recent devolvements in LC, which has remained unpaid for more than 30 days on account of continued tightness in JMT's liquidity position. High sales concentration in the cyclical automobile sector, notwithstanding some diversification achieved in recent years- The business prospects of the company remain closely linked with the performance of the domestic automobile industry as major part of the sales are made to the automobile segment. While JMT has taken measures to de-risk its high dependence on the automobile industry by increasing its focus on other industries like tractors and farm equipment, oil and natural gas, railways and capital goods, the overall concentration towards the automotive sector remains high. Significant client-concentration risks with Tata Motors Ltd. (TML) and its subsidiaries accounting for a large share of the turnover - The company faces significant client-concentration risks, with TML and its subsidiaries accounting for 37% of its turnover in FY2018. However, ICRA notes that while this high client concentration limits JMT's bargaining power, it also helps in eliminating counterparty risks. Liquidity position The liquidity position of the company remains tight as indicated by continuous LC devolvements during the last two months. In addition, the cash credit lines remain largely utilised and hence the available buffer from bank lines in the event of a cash flow mismatch remains low at present. JMT Auto Limited (JMT) is a 66.77% subsidiary of Amtek Auto Ltd. (AAL) and is involved in manufacturing of machined components for the automobile, tractor and farm equipment, oil and natural gas and construction equipment sectors. The company was incorporated in 1987 as Jamshedpur Metal Treat Private Limited and operated as a dedicated ancillary to the erstwhile Tata Engineering and Locomotive Company Limited (Telco), supplying various machined components. The company's shares were listed in 1994 and are traded on both the Bombay Stock Exchange and the National Stock Exchange. Over the years, JMT has enhanced its manufacturing capabilities by backward integrating into forging and casting components. JMT has its manufacturing plants located in Jamshedpur, Dharwad and Lucknow through eight production units. In FY2016, JMT, through its subsidiary, AMSPL, has acquired two automotive component manufacturing companies, REGE and ACS. REGE manufactures auto components, primarily for the passenger cars segment, through its three manufacturing plants — two in Germany and one in Romania. ACS manufactures components for passenger and commercial vehicles through its facility in Floby, Sweden. Both the companies are, however, being sold, given the liquidity pressure in the Group. Continuous net losses reported by AAL over the period FY2015-FY2017 led to a tight liquidity position of the Group and resulted in the CIRP being initiated with respect to AAL in July 2017. In FY2018, JMT reported a net profit of INR1.2 crore on an operating income of INR347.8 crore compared to a net profit of INR5.1 crore on an operating income of INR315.4 crore in the previous year. JONNA STEELS: ICRA Reaffirms B+ Rating on INR14.50cr LT Loan ------------------------------------------------------------ ICRA reaffirmed ratings on certain bank facilities of Jonna Steels (JS), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term-Fund based limits 14.50 [ICRA]B+ (Stable); Reaffirmed Unallocated limits 0.50 [ICRA]B+ (Stable); Reaffirmed Rationale The rating is constrained by JS's small scale of operations in a highly fragmented iron and steel trading industry characterised by intense competition leading to thin profitability. The rating considers the firm's week financial profile with high gearing and stretched coverage indicators for FY2018. The rating is also constrained by its high working capital intensity due to high receivables and stretched liquidity position as reflected by moderately high average utilisation of working capital limits. The rating, however, positively factors in the extensive experience of the promoters in the iron and steel trading business, established relationship with suppliers ensuring regular supply of traded goods, and strong relationship with customers resulting in repeat orders. Outlook: Stable ICRA believes that JS will continue to benefit from extensive experience of its promoters in the iron and steel trading business. The outlook may be revised to 'Positive' if the scale of operations and profitability improve and there is sustained improvement in the capital structure. The outlook might be revised 'Negative' if any significant debt-funded capital expenditure, lower-than expected cash accruals, or stretched working capital cycle weakens the firm's capital structure and liquidity position. Key rating drivers Credit strengths Significant experience of the promoter in the steel trading business: The promoters have significant experience spanning over four decades in the iron and steel trading business, resulting in established relationship with suppliers ensuring regular supply of traded goods and strong relationship with customers resulting in repeat orders. Credit challenges Small scale of operations: The firm's scale of operations has been small, despite ~18% growth in operating income (OI) in FY2018 on the back of improved volumes and realizations, limiting its financial flexibility. Weak financial profile: The firm's financial profile is weak characterised by thin margins, high gearing of 1.6 times as on March 31, 2018 and stretched coverage indicators with an interest coverage ratio of 1.1 times and NCA/total debt at 2% for FY2018 Trading nature of business coupled with intense competition leads to thin margins - JS faces intense competition from the domestic players and from cheaper Chinese, Japanese and South Korean imports. Given the low entry barriers in the industry, the stiff competition in the industry would continue to limit the firm's pricing flexibility, exposing its margins to volatility in raw material prices. High working capital intensity - Despite improvement, JS's working capital intensity remained high at 25.7% in FY2018 due to stretched receivables. Risk related to partnership nature of the firm - The firm is exposed to the risk inherent to the partnership nature of firm including the capital withdrawal risk. Liquidity position JS's liquidity position remained constrained due to its working capital-intensive nature of operations. The constrained liquidity position is reflected in the moderately high average utilisation of ~69% of its working capital limits during the period from January 2019 to December 2019. JS was founded in year 1998 by Mr. Veeranjaneyulu. It is involved in the trading of iron and steel products. JS deals in the complete range of iron and steel products including structural, mild structure (MS) range (beams, flats, rounds, etc.), and thermo mechanically tested (TMT) bars. The firm procures traded products from steel rolling mills located in and around Hyderabad. JS has reported an OI of INR77.6 crore and net profit of INR.0.2 crore in FY2018 as against an OI of INR65.9 crore and a net profit of INR0.1 crore in FY2017. MAS PROJECT: Insolvency Resolution Process Case Summary ------------------------------------------------------- Debtor: MAS Project Engineers Private Limited 1st Floor, Neelkanth Chambers-IV Plot No. 6 Local Shopping Complex Rishabh Vihar, Delhi East Delhi Pin 110092 Insolvency Commencement Date: April 16, 2019 Court: National Company Law Tribunal, New Delhi Bench Estimated date of closure of insolvency resolution process: October 13, 2019 Insolvency professional: Jugal Kishore Budhiraja Interim Resolution Professional: Jugal Kishore Budhiraja Budhiraja & Co., Cost Accountants F-1084, First Floor Chittaranjan Park, New Delhi National Capital Territory of Delhi 110019 E-mail: budhiraja52@gmail.com - and - KG Somani & Company Delite Cinema Building, 3rd Floor Asaf Ali Road New Delhi 110002 E-mail: ip.masproject@gmail.com Last date for submission of claims: May 2, 2019 MIL STEEL: ICRA Raises Rating on INR6.10cr Cash Credit to B- ------------------------------------------------------------ ICRA has revised the ratings on certain bank facilities of MIL Steel and Power Limited (MSPL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term- 6.10 Upgraded to [ICRA]B-(Stable) Cash Credit from [ICRA]D Long Term- 2.42 Upgraded to [ICRA]B-(Stable) Term Loan from [ICRA]D Short Term- 4.00 Upgraded to [ICRA]A4 from Non-Fund Based [ICRA]D Long Term/Short 6.21 Upgraded to [ICRA]B- Term-Unallocated (Stable)/[ICRA]A4 from [ICRA]D/[ICRA]D Rationale The ratings upgrade considers the curing of past delays in the term loan repayments supported by increase unsecured loans from the promoters. The ratings also consider extensive experience of the promoters in the steel manufacturing business resulting in established relationships with customers and suppliers. The ratings draw comfort from healthy revenue growth of 44.7% in FY2018. The ratings, however, are constrained by company's weak financial profile characterised by high gearing and weak coverage indictors in FY2018. The ratings are further constrained by stretched liquidity position as reflected in high working capital utilisation of 89.4% of the sanctioned limits for the period January-2018 to Februray-2019. Further, the ratings consider high geographic concentration risk with sales majorly confined to Tamil Nadu and near-by states. Besides, the ratings are constrained by the cyclicity inherent in the steel manufacturing business and the intense competition in the industry. Outlook: Stable ICRA believes that MSPL will continue to benefit from extensive experience of its promoters in the steel manufacturing business. The outlook may be revised to 'Positive' if substantial growth in revenues and profitability improves its financial risk profile. The outlook might be revised to 'Negative' if or lower-than-expected cash accruals or stretched working capital cycle weakens its capital structure and liquidity position. Key rating drivers Credit strengths Experience of promoters in the steel industry - The company was promoted by Mr. Shyam Sunder Goenka who has extensive experience in steel industry. Over the years, the company has developed strong relationship with domestic customers and suppliers which has supported the operations to a large extent. Curing of past delays in debt servicing - The company's liquidity has been constrained in the past two years which lead to delays in the term loan repayments. However, in FY2019, the company's promoters infused INR7.40 crore unsecured loans to support its high repayments of INR6.33 crore during the year and the company's debt servicing has been regular since September 2018. Credit challenges Weak financial risk profile - The company's financial profile remained weak characterised by net losses, high gearing of 2.1 times as on March 31, 2018 on account of high working capital borrowings and term loans, constrained liquidity and weak coverage indicators with NCA/total debt of -1.5%, interest coverage of 1.3 times, DSCR of 0.3 times and Total debt/OPBDITA of 6.3 times for FY2018. Stretched liquidity position - The company's liquidity position remained stretched given the high repayment obligations and high utilisation of working capital limits that averaged at 89.4% of the sanctioned limits for the period January-2018 to Februray-2019. However, the liquidity is expected to improve post enhancement of the cash credit limit to INR8.5 crore from INR6.1 crore. High geographic concentration risk - The geographic concentration risk remains high with sales majorly confined to Tamil Nadu and near-by states. Exposed to cyclicality in steel prices - The company's profitability and cash flows will remain vulnerable to cyclicality inherent in the steel manufacturing business. Moreover, the steel manufacturing industry is fragmented and is characterised by competition from several organized and unorganized players limiting its pricing flexibility. Liquidity Position: The company's liquidity has been constrained in the past two years which lead to delays in the term loan repayments. However, in FY2019, the company's promoters infused INR7.40 crore unsecured loans to support its high repayments of Rs. 6.33 crore during the year and the company's debt servicing has been regular since September 2018. The company's liquidity is expected to improve going forward as the it has moderate repayment obligation of INR1.27 crore in FY2020 and INR1.15 crore in FY2021. Further, the working capital utilisation remained high, averaging at 89.4% of the sanctioned limit for the period January 2018 to February 2019. Nevertheless, the company has requested for enhancement in working capital limits and, if sanctioned, would improve its liquidity. MIL Steel and Power Limited (MSPL), the erstwhile Kanishk Ferrous and Energy Limited, is engaged in the manufacturing of MS Billets with an installed capacity of 36,000 MTPA, largely catering to localised demand from TMT and structural products players in the region. MSPL was acquired by Meenakshi (India) Limited (MIL) Group from OPG group on April 1, 2013 and derives its revenue from manufacturing and scrap trading businesses. In FY2018, the company reported a net loss of INR1.2 crore on an operating income of INR81.1 crore, as compared to a net profit of INR0.4 crore on an operating income of INR56.0 crore in FY2017. NAGARJUNA FERTILIZERS: Ind-Ra Affirms 'D' Long Term Issuer Rating ----------------------------------------------------------------- India Ratings and Research (Ind-Ra) has affirmed Nagarjuna Fertilizers and Chemicals Limited's (NFCL) Long-Term Issuer Rating at 'IND D'. The instrument-wise rating actions are: -- INR8.030 bil. Fund-based limit (Long-term) affirmed with IND D rating; -- INR11,796.7 bil. (reduced from INR11,811.1 bil.) Non-fund- based limit (Short-term) affirmed with IND D rating; and -- INR4,731.4 bil. (reduced from INR5,454.9 bil.) Long-term loans due on FY20-FY24 affirmed with IND D rating. KEY RATING DRIVERS The affirmation reflects NFCL's continued delays in debt servicing during the 12 months ended March 2019, due to its tight liquidity position. RATING SENSITIVITIES Positive: Timely debt servicing for three consecutive months could result in a positive rating action. COMPANY PROFILE Established in 1987, NFCL manufactures and supplies plant nutrients. The company has two urea plants in Andhra Pradesh, with a total capacity of 1.19mmtpa. It also trades in other fertilizers such as di-ammonium phosphate, mono-ammonium phosphate, muriate of potash, water-soluble fertilizers, micronutrients, bio-products, customized fertilizers, and seeds. NAINITAL MOTORS: Ind-Ra Migrates BB+ LT Rating to Non-Cooperating ----------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated Nainital Motors 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: -- INR180 mil. Fund-based working capital migrated to non- cooperating category with IND BB+ (ISSUER NOT COOPERATING)/ IND A4+ (ISSUER NOT COOPERATING) rating; and -- INR10 mil. Term loan due on March 2020 migrated to non- cooperating category with IND BB+ (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on April 23, 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 2008, Nainital Motors is an authorized dealer of Maruti Suzuki India in Uttarakhand. In addition, it provides car repair, auto finance, and car insurance services. NARMADA AGROBASE: Ind-Ra Migrates BB- LT Rating to Non-Cooperating ------------------------------------------------------------------ India Ratings and Research (Ind-Ra) has migrated Narmada Agrobase 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: -- INR2.32 mil. Long-term loan due on March 2019 migrated to Non- Cooperating Category with IND BB- (ISSUER NOT COOPERATING) rating; and -- INR60 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 Narmada Agrobase manufactures de-lined cotton seed and cattle feed. Linters are byproducts. The company is promoted by Mr. Suresh Chandra Gupta and Mr. Neeraj Agrawal. The company has an annual installed production capacity of 36,000 metric tons. It utilizes 75% of the capacity. NAVDURGA ISPAT: Ind-Ra Migrates 'BB+' LT Rating to Non-Cooperating ------------------------------------------------------------------ India Ratings and Research (Ind-Ra) has migrated Navdurga Ispat (P) Ltd.'s Long-Term Issuer Rating to the non-cooperating category. The issuer did not participate in the rating exercise despite continuous requests and follow-ups by the agency. Therefore, investors and other users are advised to take appropriate caution while using these ratings. The rating will now appear as 'IND BB+ (ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating action is: -- INR160 mil. Fund-based working capital limit migrated to non- cooperating category with IND BB+ (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on 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 Navdurga Ispat (P) manufactures a wide range of steel-rolled structures, including beams, joists, channels, angles, round bars, and flats. It has an annual structural steel item production capacity of 30,000 tons. NEHANI TILES: ICRA Reaffirms B+ Rating on INR8.0cr Cash Loan ------------------------------------------------------------ ICRA reaffirmed ratings on certain bank facilities of Nehani Tiles Pvt. Ltd. (NTPL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Cash credit 8.00 [ICRA]B+ (Stable); Reaffirmed Term loan 3.50 [ICRA]B+ (Stable); Reaffirmed Bank Guarantee 1.50 [ICRA]A4; Reaffirmed Rationale The reaffirmation of ratings continues to remain constrained by the average financial risk profile of NTPL, marked by moderate scale of operation, stagnant operating profitability, leveraged capital structure and high working capital intensity of operations arising from stretched receivables. The ratings are further constrained by the exposure of its profitability to volatility in raw material and gas/coal prices and the company's limited ability to pass on the same to its customers. The ratings also factor in NTPL's limited product portfolio in a highly fragmented and competitive tiles industry and susceptibility of operations and cash flows to the performance of the real estate industry, which is the main end-user sector. The ratings, however, continue to favourably consider the extensive experience of the promoters in the ceramic industry and marketing support from the existing network of the Group company - Neha Ceramic Industries involved in a similar business sector. The ratings also note NTPL's locational advantage with its unit in the ceramic hub of Morbi (Gujarat), which benefits in terms of timely availability of key raw materials, fuel and labour. ICRA also notes the competitive edge of NTPL over other ceramic tile units running over coal-based gasifiers, which are currently facing punitive regulatory actions. Nevertheless, profitability is exposed to the risk of vulnerability to availability and fluctuating prices of gas, as that is NTPL's main source of fuel. Outlook: Stable ICRA expects NTPL to continue to benefit from the extensive experience of its promoters in the ceramic industry. The outlook may be revised to Positive if substantial growth in revenue and profit and better working capital management strengthen the financial risk profile. The outlook may be revised to Negative if cash accrual is lower than expected, which might delay the debt servicing obligations; or if an adverse capital structure; or major debt-funded capex, or a stretch in working capital cycle weakens liquidity. Key rating drivers Credit strengths Extensive experience of promoters in the ceramic industry; operational synergies from Group company - The promoters have an extensive experience in the ceramic tiles industry through the Group concern, Neha Ceramic Industries, which is also involved in tiles manufacturing. NTPL benefits from the established brand and distribution network of the Group concern, which supports its existing dealer network of more than 30 distributors across India. Location advantage from being situated in the Morbi region of Gujarat - NTPL's manufacturing facility is located in the ceramic tiles manufacturing hub of Morbi (Gujarat), which provides it an easy access to quality raw materials like body clay, feldspar and glazed frit, fuel and labour, along with proximity to major ports. Credit challenges Limited track record with small sized scale in relation to other large, organised ceramic tile manufacturers - NTPL's operations continue to remain small due to its limited track record of operations. Moreover, an overall slowdown in the ceramic industry post GST implementation resulted in a sluggish growth in the operating income to INR44.4 crore in FY2018 against INR43.6 crore in FY2017. However, the recent closure of operations of ceramic units running on coal-based gasifiers in Morbi is expected to increased opportunities for NTPL, who has been using LNG since its inception. Nevertheless, profitability is exposed to the risk of vulnerability to availability and fluctuating prices of gas, as it is NTPL's main fuel source. Financial profile characterised by a leveraged capital structure, modest coverage indicators and stretched liquidity profile - The capital structure continues to remain leveraged with gearing at 2.4 times as on March 31, 2018 due to high reliance on outside debt to support the working capital requirements. Coupled with reliance on creditor funding, this has led to an adverse TOL/TNW ratio, which stood at 3.5 times as on March 31, 2018. An increase in the interest expenses due to addition of business loans deteriorated the interest coverage ratio as indicated by a moderate OPBDITA/Interest at 1.7 times in FY2018 from 2.7 times in FY2017. The same has also pressurised the DSCR to 1.3 times in FY2018. Further, the working capital intensity increased to 30.9% in FY2018 from 27.1% in FY2017 due to stretched receivables, which has entailed the near-to-full utilisation of working capital limits. Vulnerability of profitability and cash flows to cyclicality inherent in the real estate industry, the main consuming sector - Raw material and fuel are the two major cost components in the ceramic tiles business determining the cost competitiveness of operations. NTPL being a marginal player in the ceramic tiles industry, its ability to pass on any increase in the raw material and fuel expenses, remains limited. Further, the cash flows are also susceptible to the cyclicality in the real estate industry, which is the main consuming sector. Competitive business environment with large, established organised tile manufacturers as well as unorganised players to limit significant improvement in realisations - The company faces stiff competition from other established as well as unorganised players in the ceramic business due to the fragmented industry structure and low entry barriers. This limits NTPL's pricing flexibility and bargaining power with its customers, putting pressure on its revenues and margins. Liquidity position The company has heavy repayment obligations for the next two to three years as a result of the addition of business loans to support the working capital requirements, which has led to a tight liquidity position. Further, high working capital intensity of operations has entailed near-to-full utilisation of its working capital limits for the last 14 months ended February 2019. Incorporated in August 2013, Nehani Tiles Private Limited is involved in manufacturing digitally printed ceramic wall tiles along with body clay. The company's manufacturing facility is at Morbi, Gujarat, with an installed production capacity of 27,000 MTPA of wall tiles and 1,20,000 MTPA of body clay. NTPL manufactures wall tiles in sizes of 12”x12”, 12x18”, 12”x24” and 10 x30”. The company is promoted by the Soriya family, which has extensive experience in the ceramic industry, owing to its association with the Group concern, Neha Ceramic Industries. In FY2018, the company reported a net profit after tax of INR1.1 crore on an operating income (OI) of INR44.4 crore, compared to a net profit after tax of INR0.7 crore on an OI of INR43.6 crore in the previous year. NILADREE BUILD-TECH: Ind-Ra Migrates BB Rating to Non-Cooperating ----------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated Niladree Build-Tech 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: -- INR107.6 mil. Term loan due on March 2024 migrated to non- cooperating category with IND BB (ISSUER NOT COOPERATING) rating; and -- INR6 mil. Fund-based working capital limits migrated to non- cooperating category with IND BB (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 Incorporated on August 25, 1999, Niladree Build-Tech operates three-star hotels namely Hotel East-West and Blue Lily Beach Resort in Baliapanda, Puri. PRACHI PRIVATE: Ind-Ra Raises Long Term Issuer Rating to 'BB' ------------------------------------------------------------- India Ratings and Research (Ind-Ra) has upgraded Prachi (India) Private Limited's (PIPL) Long-Term Issuer Rating to 'IND BB' from 'IND BB-'. The Outlook is Stable. The instrument-wise rating actions are: -- INR150 mil. Fund-based working capital limits Long-term rating upgraded; Short-term rating affirmed with IND BB/Stable/IND A4+ rating; -- INR30 mil. Non-fund-based working capital limits affirmed with IND A4+ rating; -- INR110 mil. Term loan+ due on January 2028 upgraded and assigned with IND BB/Stable rating; -- INR60 mil. Proposed term loan* upgraded with Provisional IND BB/Stable rating; and -- INR10.78 mil. (reduced from INR30.96 mil.) Term loan due on October 28, 2023 upgraded with IND BB/Stable rating. * The rating is provisional and shall be confirmed upon the sanction and execution of loan documents for the above facilities by PIPL to the satisfaction of Ind-Ra. + The final rating has been assigned upon receipt of executed loan documents for the above facilities by PIPL to the satisfaction of Ind-Ra. KEY RATING DRIVERS The upgrade reflects a rise in the operating profitability that led to an improvement in the credit metrics in FY18. PIPL's operating profitability rose to 6.00% in FY18 from 4.27% in FY17, driven by a decline in manufacturing cost. The margin was modest, considering its return on capital employed was 10% in FY18 (FY17: 8%). In FY18, the credit metrics improved but stayed at a weak level. Its interest coverage (operating EBITDA/gross interest expense) improved to 1.78x in FY18 from 1.32x in FY17, with its net leverage (total adjusted debt/operating EBITDAR) enhancing to 6.48x (8.53x). The ratings are supported by an increase in revenue to an estimated INR840 million in FY19, though the scale of operations remains medium, driven by new customer acquisition. Revenue was down 7.00% yoy to INR723 million in FY18 due to the implementation of the goods and services tax. The ratings continue to be constrained by the tight liquidity of PIPL, indicated by an average cash credit use of 98% for the 12 months ended March 2019, because of the working capital-intensive operations. Over FY16-FY18, PIPL's debtor days were high at 200-320 days, leading to an elongated working capital cycle of 70-150 days. Moreover, in FY18, its cash flow from operations was INR51.02 million (FY17: INR34.26 million) and cash and cash equivalents were about INR10.51 million (INR7.38 million). The ratings continue to be supported by the experience of the promoters of more than two decades in the publishing business and PIPL's strong dealer and distributor network. RATING SENSITIVITIES Negative: Any decline in the scale of operations, leading to any deterioration in the credit metrics, and any elongation in the working capital cycle would be negative for the ratings. Positive: Any rise in the scale of operations, leading to an improvement in the credit metrics, and the working capital cycle staying at the existing level would be positive for ratings. COMPANY PROFILE Delhi-based PIPL was established in 1999 by Mr. Mukesh Tyagi, Mr. Rakesh Tyagi, and Mrs. Savitri Tyagi. The company is primarily engaged in the distribution of textbooks and study material for classes from nursery to class 12. The company has outsourced activities related to the printing, publishing, and binding of books. The company supplies its products to public schools across India. PRECISE SEAMLESS: ICRA Reaffirms B+ Rating on INR15cr Loan ---------------------------------------------------------- ICRA reaffirmed ratings on certain bank facilities of Precise Seamless Apparels Private Limited's (PSAPL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Fund- based Term Loan 11.00 [ICRA]B+ (Stable); reaffirmed Long-term Fund- based Cash Credit 15.00 [ICRA]B+ (Stable); reaffirmed Short Term-Non- fund Based 8.00 [ICRA]A4; reaffirmed Rationale The ratings reaffirmation takes into account the extensive experience of the promoters in the seamless garment export business and its established relationship with overseas clients. The ratings, however, remain constrained by PSAPL's moderated financial performance in FY2018 and high client-concentration risk which exposes it to revenue fluctuations and makes it susceptible to volatility in foreign exchange rates. Further, the ratings take into account the vulnerability of the company's profitability to adverse fluctuation in prices of key raw materials as large part of the same is imported. Outlook: Stable ICRA believes that PSAPL will continue to benefit from the extensive experience of its promoters in the textile industry. The outlook may be revised to Positive if substantial growth in revenues and profitability and better working capital management strengthen the company's financial risk profile. Conversely, the outlook may be revised to Negative if the cash accrual is lower than expected, or if any major capital expenditure leads to further deterioration in capital structure of the company, or a stretched working capital cycle weakens liquidity. Key rating drivers Credit strengths Established track record of promoters in garment export business - PSAPL is a promoter-driven company led by Mr. Vinod Kumar Jindal, who has over two decades of experience and is actively involved in all its operations. Reputed clientele with track record of repeat orders from large customers - The company has track record of supplying seamless garments to overseas customers and has built healthy business relationships over the years. The past trend of getting repeat orders provides revenue visibility. Credit challenges Moderation in financial risk profile in FY2018 –The company's performance moderated in FY2018 with the operating income declining ~30% to INR60.40 crore in FY2018 owing to subdued demand in export market, resulting in lower volume offtake and decrease in sales realisation. With the moderation in profitability and increased debt level, the gearing and debt coverage ratios too moderated in FY2018. However, the sales orders have again picked up in FY2019. High client and geographic-concentration risk; established relationship with clients a mitigant - The top three customers contribute around 99% to the company's total sales, reflecting high customer-concentration risk. However, PSAPL has well-established relations with these customers. It supplies to well-known international players such as Kohl's and Gap, both USA-based Groups, which heightens geographical risk. Profit margins remain exposed to volatility in raw material prices - The majority of the raw materials such as nylon and lycra are sourced internationally. This exposes the company to raw material price fluctuations. Any adverse movement in the price of raw materials could have a negative impact on the company's margins. Vulnerability of profitability to adverse foreign exchange fluctuations –The company continues to focus on overseas markets as almost 99% of its products are exported to USA, China, etc. As a result, it remains exposed to the risk of adverse foreign exchange fluctuations. Liquidity position The company's fund flow from operations remained positive in FY2018. The utilisation of working capital limit remained moderate with the average utilisation of ~44% during March 2018–February 2019. ICRA expects the company's liquidity to remain moderate, given the absence of capacity expansion plans and scheduled term debt repayments. Incorporated in 2004 by Mr. Jindal, PSAPL is a seamless garment manufacturer and exporter, particularly of women's seamless garments. It is a five-star export house situated in Gurugram, Haryana with a work area of 50,000 sq. feet. and an installed capacity to manufacture ~48 lakh garment pieces in a year. Mr. Jindal has over two decades of experience in the textile industry. RA-NI PRECAST: Insolvency Resolution Process Case Summary --------------------------------------------------------- Debtor: Ra-ni Precast Pvt. Ltd. No. 6, Neelakanda Mehtha Street Choolaimedu, Chennai 600094 Insolvency Commencement Date: April 5, 2019 Court: National Company Law Tribunal, Chennai Bench Estimated date of closure of insolvency resolution process: October 1, 2019 Insolvency professional: Mr. Pathukasahasram Raghunathan Raman Interim Resolution Professional: Mr. Pathukasahasram Raghunathan Raman Flat 'C' Ground Floor Srishas Kamalam Apartment 93, Sivan Koil South Street Vadapalani, Chennai 600026 E-mail: ramann_pr@yahoo.co.in prramancirp@gmail.com Last date for submission of claims: April 18, 2019 RAMAN CASTING: Insolvency Resolution Process Case Summary --------------------------------------------------------- Debtor: Raman Casting Pvt. Ltd. House No. 275 Village Dera Delhi South West Delhi DL 110074 IN Insolvency Commencement Date: April 10, 2019 Court: National Company Law Tribunal, New Delhi Bench Estimated date of closure of insolvency resolution process: October 7, 2019 (180 days from commencement) Insolvency professional: Brijesh Kumar Tamber Interim Resolution Professional: Brijesh Kumar Tamber C-10, Basement, Nizamuddin (West) New Delhi 110013 E-mail: officeofbrijeshktamber@gmail.com irpofamancasting@gmail.com Last date for submission of claims: May 7, 2019 S3 ELECTRICAL: Insolvency Resolution Process Case Summary --------------------------------------------------------- Debtor: S3 Electrical & Electronics Private Limited 101, Jagdamba Apartment Sector 13 Rohini Delhi, North Delhi 110085 India Insolvency Commencement Date: April 3, 2019 Court: National Company Law Tribunal, Delhi Bench Estimated date of closure of insolvency resolution process: September 30, 2019 (180 days from commencement) Insolvency professional: Pooja Garg Interim Resolution Professional: Pooja Garg 25/4, East Patel Nagar New Delhi 110008 E-mail: cagargpooja@gmail.com - and - 605, Vikrant Tower Rajendra Place New Delhi 110008 E-mail: irpgapg@gmail.com Last date for submission of claims: April 24, 2019 SARASWATI MEDICAL: Ind-Ra Migrates 'BB+' Rating to Non-Cooperating ------------------------------------------------------------------ India Ratings and Research (Ind-Ra) has migrated Saraswati Medical & Dental College's bank facility 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 action is: -- INR40 mil. Overdraft migrated to Non-Cooperating Category with IND BB+ (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The rating was last reviewed on April 10, 2018. Ind-Ra is unable to provide an update as the agency does not have adequate information to review the rating. COMPANY PROFILE Saraswati Medical & Dental College was incorporated under the Societies Registration Act, 1860, and was founded by Late Colonel (Dr) TS Mathur in May 1995. The society set up Saraswati Dental College in 1998-99, Saraswati Hospital and Research Centre in 2009-10 and Birendra Shankar Mathur School of Nursing in 2013-14. The three entities are spread over 6.4 acres in Lucknow. The dental college offers a bachelor of dental surgery and master of dental surgery, while the nursing institute offers courses in general nursing and midwifery. SHREE CHHATRAPATI: ICRA Reaffirms B Rating on INR4.72cr Loan ------------------------------------------------------------ ICRA reaffirmed ratings on certain bank facilities of Shree Chhatrapati Shahu Milk and Agro Producer Company Limited (Shahu Milk), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund-based- Working Capital Loans 3.00 [ICRA]B(Stable); reaffirmed Term Loans 2.12 [ICRA]B(Stable); reaffirmed Unallocated 4.72 [ICRA]B(Stable); reaffirmed Rationale The rating remains constrained by the stretched financial profile of Shahu Milk as reflected by its thin operating profit margins (OPM), continued net losses, leveraged capital structure and weak debt coverage indicators. The rating also factors in the company's modest scale of operations, and its exposure to intense competition from organised co-operatives, private players and unorganised players. The rating further remains constrained by the company's vulnerability of milk production to external factors (such as climatic conditions, cattle diseases etc) and its exposure to any unfavourable Government regulations on the pricing of milk and milk products. The rating, however, takes into account the location-specific benefit enjoyed by the company by virtue of its presence in the predominantly sugarcane-rich Kolhapur district of Maharashtra. The company also continues to benefit from being a part of the Shahu Group, which is present in the region for over four decades chiefly through the co-operative sugar company, Shree Chhatrapati Shahu Sahakari Sakhar Karkhana Limited. Outlook: Stable ICRA expects Shahu Milk to continue to benefit from the extensive experience of its promoter Group, and its established relationships with farmers. The outlook may be revised to Positive if substantial growth in revenue and profitability, and better working capital management strengthen the financial risk profile. The outlook may be revised to Negative if cash accrual is lower than expected, or if any major capital expenditure, or a stretch in the working capital cycle, weakens liquidity. Key rating drivers Credit strengths Location-specific advantage; extensive presence of Shahu Group - Shahu Milk is present in Kolhapur, which is a high milk-producing region in Maharashtra, given the conducive agro-climatic conditions required to sustain dairy animal productivity. It markets various products under the Shahu brand in and around Kolhapur. The company is a part of the Shahu Group, which has an established presence in Kolhapur spanning over four decades. The Group is mainly in the sugar business through the co-operative sugar company, Shree Chhatrapati Shahu Sahakari Sakhar Karkhana Limited. The Group has established relationships with farmers in the area, which benefit the company in milk procurement. Credit challenges Stretched financial profile marked by net losses, leveraged capital structure and weak debt coverage indicators - The company's OPM remained low on account of limited value addition and commoditised nature of milk products, along with intense competition in the industry, which limits the pricing power. The OPM declined sharply to 0.36% in FY2018 from 2.04% in FY2017 due to an increase in milk procurement. Given the high interest and depreciation charges, it continued to report net losses in FY2018. The accumulated losses in the past eroded the net worth, resulting in a stretched capital structure. The gearing deteriorated further to 9.13 times as on March 31, 2018 from 2.97 times as on March 31, 2017. Given the thin accruals, Shahu Milk's coverage indicators remained stretched, with interest coverage of 0.16 times, total debt/OPBDIT of 78.63 times and NCA/total debt of -6% in FY2018. Small scale of operations; decline in revenues due to drop in milk realisations - Shahu Milk is a small-sized player in the competitive milk and milk product industry. Its operating income (OI) declined by 11% to INR29.14 crore in FY2018 from INR32.87 crore in FY2017. This was primarily due to a decline in milk realisations consequent to its entry in the cow milk business, which fetches lower realisations compared to the buffalo milk business. The company, till December 31, 2018, recorded gross sales of INR25.00 crore. Exposure of milk production to external factors - Milk availability is influenced to a great extent by agro-climatic conditions, especially in the tropics. The industry is vulnerable to risks associated with failure in milk production due to external factors (like cattle diseases and extension of lean seasons due to drought-like conditions), which ultimately affect milk availability and hence, prices. Exposure to Government regulations on pricing of milk and milk products - The price of milk, the dairy industry's raw material, is sensitive to Government policies, environmental conditions and epidemic-related factors. The Milk and Milk Products Order (MMPO) regulates the production of milk and milk products in the country. The milk purchase price in Maharashtra is controlled by the state government, which issues GR (minimum rate for milk procurement) at the inception of each lean and flush season. Intense competition from organised co-operatives, private players and unorganised sector - The milk and milk product industry is characterised by intense competition from organised co-operatives, large private players and unorganised players. Shahu Milk is present in the fiercely competitive Kolhapur district, a high milk-producing zone due to its conducive agro-climatic conditions. Kolhapur has numerous co-operative dairies and small private players, who pose stiff competition to Shahu Milk. Liquidity position The company's liquidity position remained weak, impacted by its weak operating profitability and sizeable interest costs. The same is reflected in its weak cash flows, which consistently remained negative during the last four fiscals. The average working capital utilisation remained moderate at 59% of the sanctioned limits during the 13-month period ended December 2018, while the peak utilisation remained at 91%. The company has sizeable scheduled repayments of INR1.23 crore in FY2020. Incorporated in September 2009, Shahu Milk is a co-operative unit involved in the procurement and processing of milk as well as the selling of milk and milk products. The company's plant has an installed milk processing capacity of 1,00,000 litre per day. The company procures milk from co-operative societies located primarily at Kagal and Karvir talukas in the Kolhapur district. It has also set up two chilling centres in Kolhapur, which improve the shelf life of the collected milk. In FY2018, the company reported a net loss of INR1.22 crore on an OI of INR29.14 crore, compared to a net loss of INR0.66 crore on an OI of INR32.87 crore in the previous year. SITARGANJ FIBERS: Insolvency Resolution Process Case Summary ------------------------------------------------------------ Debtor: Sitarganj Fibers Limited C-69, Sector-58 Noida 201307 Noida Gautam Buddha Nagar UP 201307 IN Insolvency Commencement Date: April 9, 2019 Court: National Company Law Tribunal, Allahabad Bench Estimated date of closure of insolvency resolution process: October 6, 2019 Insolvency professional: Sumit Shukla Interim Resolution Professional: Sumit Shukla B-4/702, Krishna Apra Gardens Plot No. 7, Vaibhav Khand Indirapuram, Ghaziabad Uttar Pradesh E-mail: sumit_shukla@rediffmail.com - and - 83, National Media Centre Shanker Chowk Nr. Ambiance Mall/DLF Cyber City Gurugram 122022 Last date for submission of claims: April 24, 2019 SSV SPINNERS: Ind-Ra Migrates BB- Issuer Rating to Non-Cooperating ------------------------------------------------------------------ India Ratings and Research (Ind-Ra) has migrated SSV Spinners 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: -- INR145 mil. Fund-based working capital limits migrated to non- cooperating category with IND BB- (ISSUER NOT COOPERATING) / IND A4+ (ISSUER NOT COOPERATING) rating; -- INR162 mil. Term loan due on May 2019 - August 2021 migrated to non-cooperating category with IND BB- (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 February 2011, Telangana-based SSV Spinners is engaged in the spinning mill business. It has an installed capacity of 19,584 spindles. SUMANGLAM IMPEX: Insolvency Resolution Process Case Summary ----------------------------------------------------------- Debtor: Sumanglam Impex Private Limited Khasra No. 545, Village & PO Tikrikalam New Delhi 110041 Insolvency Commencement Date: April 12, 2019 Court: National Company Law Tribunal, Gurgaon Bench Estimated date of closure of insolvency resolution process: October 9, 2019 Insolvency professional: Sanyam Goel Interim Resolution Professional: Sanyam Goel No. 938, Basement Office Sector-40, Gurugram Haryana 122002 E-mail: goelsanyam@gmail.com sumanglamcirp@gmail.com Last date for submission of claims: April 28, 2019 SUNAHRI MULTI: Ind-Ra Withdraws 'BB-', Non-Cooperating Rating ------------------------------------------------------------- India Ratings and Research (Ind-Ra) has maintained Sunahri Multi Grain Private Limited's (SMGPL) Long-Term Issuer Rating of 'IND BB- (ISSUER NOT COOPERATING)' in the non-cooperating category and has simultaneously withdrawn it. The instrument-wise rating actions are: -- INR65 mil. Fund-based working capital limit* maintained in the non-cooperating category and withdrawn; and -- INR39.18 mil. Term loan* due on September 2019 maintained in the non-cooperating category and withdrawn. * Maintained in 'IND BB- (ISSUER NOT COOPERATING)' before being withdrawn KEY RATING DRIVERS SMGPL did not participate in the rating exercise despite continuous requests and follow-ups by the agency. Ind-Ra is no longer required to maintain the ratings, as the agency has received a no objection certificate from the rated facilities' lenders. This is consistent with the Securities and Exchange Board of India's circular dated March 31, 2017, for credit rating agencies. COMPANY PROFILE Incorporated in 2009 as RLJ Multi Grain Private Limited, SMGPL produces rice. TAKSHEEL SOLUTIONS: Insolvency Resolution Process Case Summary -------------------------------------------------------------- Debtor: Taksheel Solutions Limited 8-3-833/22 (Plot No. 22) Phase I Kamalapuri Colony, Hyderabad Hyderabad Telangana 500073, India Insolvency Commencement Date: April 8, 2019 Court: National Company Law Tribunal, Hyderabad Bench Estimated date of closure of insolvency resolution process: October 4, 2019 (180 days from commencement) Insolvency professional: Sudhir Gonugunta Interim Resolution Professional: Sudhir Gonugunta H.No. 12-06-23/4/1 Flat No. 202, Sri Hari Nagar Moosapet Y Junction Balanagar, Rangareddy Telangana 500018 E-mail: sudhirca123@gmail.com taksheelip@gmail.com Last date for submission of claims: April 22, 2019 TIRUPATI COTTON-DWARKA: ICRA Reaffirms B Rating on INR6.0cr Loans ----------------------------------------------------------------- ICRA reaffirmed ratings on certain bank facilities of Tirupati Cotton-Dwarka (TC), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Cash Credit 4.50 [ICRA]B (Stable); Reaffirmed Term Loan 1.50 [ICRA]B (Stable); Reaffirmed Rationale The rating reaffirmation continues to factor in the weak financial risk profile of TC, characterised by thin profitability margins, leveraged capital structure and weak debt coverage indicators. The rating also continues to factor in the intense competition, the commoditisation of the firm's products, the regulatory risks with regard to minimum support price (MSP) and the vulnerability of the company's profitability to adverse movements in cotton prices, which are subject to seasonality and crop harvest. The rating is also impacted by the risks associated with the firm's constitution as a partnership firm; for example, capital withdrawal had weakened the net worth base in FY2017 and FY2018. The rating, however, continues to derive comfort from the long experience of its partners in the cotton ginning industry and the proximity of the firm's manufacturing unit to raw materials. Outlook: Stable ICRA expects TC to continue to benefit from the extensive experience of its partners. The outlook may be revised to Positive if substantial growth in revenue and profitability, infusion of capital and better working capital management strengthen the financial risk profile. The outlook may be revised to Negative if the cash accrual is lower than expected, or if any major debt-funded capital expenditure, or capital withdrawals by the partners or a stretch in the working capital cycle, weakens the liquidity. Key rating drivers Credit strengths Extensive experience of partners in cotton ginning industry - The key partner, Mr. Pankaj Fefar, who manages the operations of the firm, has extensive experience in the cotton ginning business by virtue of his association with other entities engaged in the similar line of business. Favourable location of firm's plant - The firm's unit has a location advantage by virtue of its presence in the cotton producing belt of India i.e. Gujarat, which helps to lower transportation cost and enables easy access to quality raw material. Credit challenges Weak financial risk profile - The firm's profit margins remain thin—the operating margin was 3.21% and the net margin was 0.52% in FY2018—because of the limited value addition to the products sold. The capital structure stood leveraged, with gearing of 1.86 times as on March 31, 2018 and small net worth base of INR2.22 crore. The debt coverage indicators continue to remain weak, with interest coverage of 1.86 times, Total Debt/OPBDITA of 4.25 times and DSCR of 1.31 times in FY2018. Further, the NCA/Total Debt stood at 1% in FY2018 due to high capital withdrawals by the partners during the fiscal year. Vulnerability of profitability to fluctuations in raw cotton prices - The profit margins are exposed to fluctuations in raw material (raw cotton) prices, which depend on various factors such as seasonality, climatic conditions, international demand and supply situation, and export policy. Further, it is also exposed to regulatory risks with regards to the MSP set up by the Government. Intensely competitive and fragmented industry - The stiff competition from other small and unorganised players in the industry limits the company's bargaining power with customers and suppliers, and hence, exerts pressure on its margins. Liquidity position Fund flow from the firm's operations remained positive in FY2018. The gross cash flows turned positive in FY2018 due to the release in working capital requirements. Correspondingly, the free cash flows also turned positive in FY2018. Overall, the firm's liquidity position is average as reflected by the moderate working capital limit utilisation (~71% utilisation of sanctioned limits in the last 18 months from September 2017 to February 2019) and free cash of INR0.15 crore as on March 31, 2018. Established in May 2015, TC is engaged in cotton ginning and pressing. Its manufacturing facility is located at Verad in the Jamnagar district of Gujarat. The facility is equipped with 36 ginning machines and 1 pressing machine and has a total installed capacity of processing ~24,192 MT of raw cotton per annum. TC started commercial operations from February 2016. VICTORY ELECTRALS: Insolvency Resolution Process Case Summary ------------------------------------------------------------- Debtor: Victory Electricals Ltd. No. 850/64B, TH Road Near Royal Enfield Thiruvottiyur Chennai 600019 Insolvency Commencement Date: April 10, 2019 Court: National Company Law Tribunal, Chennai Bench Estimated date of closure of insolvency resolution process: October 7, 2019 (180 days from commencement) Insolvency professional: S. Sivaramana Krishnan Interim Resolution Professional: S. Sivaramana Krishnan F142/5, 8th Street Anna Nagar East Chennai 600102 Mobile: 9884273151 E-mail: csdrsiva@gmail.com irp.victory@gmail.com Last date for submission of claims: April 25, 2019 VISHRAMBHAI GORASIA: Ind-Ra Migrates BB- Rating to Non-Cooperating ------------------------------------------------------------------ India Ratings and Research (Ind-Ra) has migrated Vishrambhai Gorasia Construction Private Limited's Long-Term Issuer Rating to the non-cooperating category. The issuer did not participate in the rating exercise despite continuous requests and follow-ups by the agency. Therefore, investors and other users are advised to take appropriate caution while using these ratings. The rating will now appear as 'IND BB- (ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating action is: -- INR79.8 mil. Fund-based working capital limit 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 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 2008, Vishrambhai Gorasia Construction supplies readymade concrete and undertakes civil project works such as roads, buildings, dams, railways, and drainage and water supply lines. It has readymade concrete production facilities at four locations in Gujarat. The facilities have a combined capacity of 190.0 cubic meters per hour. It is a closely held private limited company founded by Mr. Vishram Karsan Gorasia. =============== M A L A Y S I A =============== SEACERA GROUP: Rejected Resolutions Risk Company to Liquidation --------------------------------------------------------------- Shaheera Aznam Shah at The Malaysian Reserve reports that Seacera Group Bhd said the two rejected resolutions in its recent EGM are imminent for the firm to address its financial position and liquidity concern. According to the report, the group said the firm's debt obligations to the settlement creditors, financial institutions and working capital requirement are among the urgent motions in the resolutions, the report relays. "The board of directors (BoDs) of the company is of the view that the proposals are imminent for it to immediately address the current cashflow position, including the repayment of debt obligations towards the settlement creditors, financial institutions, other creditors and the ongoing working capital requirements. "Without the proposals, Seacera will be in a grave financial condition, in view of the group's dire need for funds to address its critical liquidity concerns," it said in a Bursa filing on April 18, The Malaysian Reserve relays. "As a result of the default in payment and the company's inability to provide the solvency declaration, Seacera will trigger the prescribed criteria pursuant to Paragraph 8.04 and Paragraph 2.1(f) of PN17 (Practice Note 17) in the listing requirements. "Thereafter, as an affected listed issuer, Seacera will be required to, among others, regularise its condition within the timeframes permitted by Bursa Securities (Malaysia Bhd)," it said. It added that by triggering the PN17 criteria, it will result in a potential trading suspension, as well as delisting of the company. "Failing on the conditions, Bursa Securities may suspend the trading of the company's listed securities on the sixth market day after the date of notification of suspension. "It may also delist the company, subject to its right to appeal against the delisting, of which the appeal must be submitted to Bursa Securities within five market days from the date of notification," it said. On April 18, Seacera's BoDs had adjourned the firm's EGM which was supposed to seek shareholders' approval for the company to undertake a proposed capitalisation and private placement to raise some RM24.6 million, based on share issuance and placement price of 21 sen, The Malaysian Reserve relays. The group said the proceeds will be utilised in settling RM31.38 million of the MYR68.04 million debt that the group owes to its creditors. Also stated in the rejected resolutions, the group plans to issue 149.09 million new shares, as well as 126.34 million shares of its existing issued share capital to third-party investors, of whom have not been identified. Separately, The Malaysian Reserve reports that the group's single-largest shareholder Datuk William Tan Wei Lian, who holds 16%, had called the EGM to reconvene on May 15 and proposed to remove eight of the 10 existing directors. "The shareholders have voiced up. We are not pleased with the way the management is running the company. "We have grounds to believe that they are not following proper corporate governance. Hence, we would like to ensure the company is back on track to tap on the company's full potential," he said. Tan is proposing to remove eight of Seacera's current directors and adding in six new directors. The six new directors who are being proposed are Shirley Tan Lee Chin, Rizvi Abdul Halim, Datin Ida Suzaini Abdullah, Clarence Yeow, Chua Eng Chin and Marzuki Hussain, The Malaysian Reserve discloses. Seacera Group Bhd engages in manufacturing and trading of ceramic tiles. The company operates in mainly two divisions namely, Tiles division involving the manufacturing, trading, and marketing of all kinds of ceramic tiles and related products which contributes a major part of revenue and Property development and construction division which comprises of Investing and development of properties located in Malaysia. The company operates in multiple states across Malaysia, while it has a presence in ASEAN and other countries. =============== M O N G O L I A =============== TAVAN BOGD: Fitch Gives 'B-' LT FCR, Outlook Stable --------------------------------------------------- Fitch Ratings has assigned Tavan Bogd Trade LLC, a leading Mongolian conglomerate focused on consumer products, a Long-Term Foreign-Currency Rating of 'B-'. The Outlook is Stable. The IDR reflects TBG's solid domestic business profile, supported by a strong market position, recognizable brands and a record of expanding revenue and earnings through a combination of organic growth and acquisitions. These factors mitigate its modest size relative to global peers. The IDR is constrained mainly by TBG's consistently negative free cash flow, due primarily to high cash outflows for inventory at its cashmere business. KEY RATING DRIVERS Market Position Mitigates Scale: Fitch does not view TBG's modest scale as a rating constraint at the current level, being the clear leader in its key segments. TBG dominates the Mongolian cashmere market with an 85% share through its Gobi and Goyo brands, and benefits from vertically integrated operations that create a wider range of product categories and exert greater control over the quality and margin of its products than competitors without such capability. Fitch expects growth for the cashmere business to be driven by increased tourism traffic to Mongolia for domestic revenue, and for channel expansion and increased brand awareness to support export sales. Robust Barriers to Entry: High brand recognition across TBG's key segments in the domestic market, close relationships with its suppliers, and an ability to generate synergies across different segments ensure that TBG's leadership is well entrenched, and throws up significant barriers to entry. TBG's automobile dealership commands a market share of 75% of new Toyota vehicle sales, the most popular brand in Mongolia, and sold 52% of total new vehicle sales in the financial year 2018 (FY18, to December 2018), well ahead of the closest competitor's 15% share. High Inventory, Volatile Cash Flows: TBG's weak cash generation is a key constraint on its IDR. FCF at the group level has been negative over FY16-FY18, with rising cash outflows driven primarily by high inventory levels in the cashmere business and also heavy investment in capacity expansion. At Gobi, the main entity in this segment, average inventory days had risen to 436 by FYE18 from 366 at FYE16, and operating cash flow has been negative over the last few years as a result. Fitch believes that TBG's efforts at optimizing working-capital management could speed up inventory turnover and reduce related cash outflows. However, it sees a risk that cash flow at Gobi and at the Group level could remain volatile on account of working-capital swings. Any improvement of TBG's cash flow profile hinges on TBG's ability to strengthen its inventory management. Proportional Deconsolidation of Gobi Minorities: Fitch considers TBG's business profile on a fully consolidated business due to the strong operational ties with Gobi. Gobi accounted for 22% of consolidated revenue and 38% of consolidated EBITDA in FY18. Its analysis of the credit profile, however, focuses on TBG's adjusted financial profile after deconsolidation of significant minorities of 49% at Gobi because TBG controls only part of Gobi's cash flows as a listed company. Credit metrics on a proportionally deconsolidated basis are weaker, with FFO adjusted gross leverage at FYE19 half a turn higher at 4.4x in its rating case. Its analysis emphasizes gross debt, due to its expectation of volatility in working-capital outflows. Fitch may focus on net debt leverage if TBG generates FCF on a sustained basis. Benefits from Diversification: Fitch views TBG's revenue and earnings as reasonably well diversified, providing downside protection; 34% of FY18 revenue came from food production and services, including international franchisee restaurants like KFC and Pizza Hut, as well as distribution of high-quality food and non-food articles from well-known international brands. TBG is well entrenched in these relatively stable businesses, providing earnings visibility. Tourism, hospitality and restaurants is small in terms of revenue contribution (4% of FY18), but likely to produce a relatively stable performance in light of Mongolia's growing popularity and growth potential for tourism. DERIVATION SUMMARY The closest peers to TBG are consumer-focused companies like PT Pan Brothers Tbk (B/Stable). Both have limited operating scale, but the one-notch difference is due to TBG's lack of track record to generate consistent positive free cash flow. The closest domestic peer is Mongolian Mining Corporation (MMC, B/Stable). Both are constrained by geographical concentration. However, it expect MMC's leverage to be stable due to sustained profit generation and stable capex spending, which supports the differential of one notch. KEY ASSUMPTIONS - Double-digit revenue growth declining from the low 20s to mid-teens, driven by continued growth in the cashmere segment, supported by robust performance in the car dealership and consumer-oriented business lines - EBITDA margin in the mid-teens, driven by lower profitability in the car dealership and costs for the expansion of the cashmere business and other consumer-oriented business lines - Maintenance capex at 3% of annual revenue, with a temporary rise to 5% in FY20 for the planned new Toyota showroom - Continued negative FCF to reflect the risk of further inventory-related outflows, but significant improvement reflecting its expectation of a focus on inventory management - Dividends in line with management guidance RATING SENSITIVITIES Developments that May, Individually or Collectively, Lead to Positive Rating Action - FFO adjusted gross leverage after adjusting for minorities at Gobi below 3.0x - Significant improvement in inventory turnover leading to sustained positive CFO at Gobi JSC and sustained positive FCF at the consolidated TBG level Developments that May, Individually or Collectively, Lead to Negative Rating Action - Failure to improve inventory turnover leading to worsening CFO at Gobi JSC and accelerating cash burn at the consolidated TBG level - FFO adjusted gross leverage after adjusting for minorities at Gobi, sustained at above 4.5x - Evidence of material weakening in market position, as reflected in declining revenue and EBITDA - Failure to lengthen the debt maturity profile significantly LIQUIDITY Adequate Liquidity: Liquidity at TBG excluding Gobi will be adequate because TBG has some flexibility to reduce dividends to preserve cash. However, TBG's current reliance on short-term debt is a weakness in its liquidity profile. Moreover, there is a risk that its own liquidity could worsen as a result if Gobi's working capital does not improve and TBG provides support to Gobi. ===================== N E W Z E A L A N D ===================== SONCAM LIMITED: Mad Butcher Albany Placed Into Liquidation ---------------------------------------------------------- Aimee Shaw at The New Zealand Herald reports that Mad Butcher Albany in Auckland has closed its doors for good. The Herald relates that the butcher business, operated by Soncam Limited, closed on April 24 and was placed into liquidation. Notices have since been put up on the doors of the store. Peter Jollands of Jollands Callander, who is also the liquidator for other dissolved companies formerly trading under the Mad Butcher brand, has been appointed liquidator, the Herald discloses. According to the Herald, Mad Butcher Albany joins a long list of failed Mad Butcher businesses across the country, including the Glenn Innes branch which was placed into liquidation at the beginning of the month. The Herald says the liquidator's first report for both the companies, outlining what creditors are owed, will be released to the Companies Office in six months. The Mad Butcher franchise, which was previously owned by NZX-listed Veritas, is co-owned by Michael Morton and partner Julie Leitch, the daughter of founder Sir Peter Leitch. The pair bought back the business from Veritas for $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. In its heyday, the butcher chain had 40 stores throughout the country. Today, about 20 stores make up the Mad Butcher chain, the report notes. The only Mad Butcher store in Whangeri closed its doors in January and last month the former owner was in the Auckland High Court defending an injunction order by Mad Butcher Holdings following the end of his franchise agreement, the Herald adds. ================= S I N G A P O R E ================= HYFLUX LTD: Chang Cheow Teck Steps Down as EVP of Operations ------------------------------------------------------------ The Strait Times reports that Hyflux Ltd announced the departure Chang Cheow Teck, its group executive vice president of operations, who left "to pursue personal interests". According to the report, Mr. Chang took on the role in November 2017, with a remit to assist the the group CEO in designated areas or issues. During his tenure, he oversaw the execution of Hyflux's TuasOne project from November 2017 to April 2018. From May 2018, in addition to the TuasOne project, he started overseeing the execution of the Oman Qurayyat project, Algeria project and Hyflux's Saudi Arabian projects. On April 25, a group of seven unsecured banks were granted leave by the High Court to file applications for Hyflux and its unit Hydrochem to be placed under judicial management and/or interim judicial management, the Strait Times discloses. A hearing on the JM application is scheduled for May 13, the report notes. As reported in the Troubled Company Reporter-Asia Pacific on April 25, 2019, The Strait Times said Hyflux Ltd and three of its subsidiaries have applied to the Singapore High Court for an additional three-month reprieve from its creditors as it works on another plan to avoid liquidation. 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. HYFLUX LTD: Unit Hit with Demand from Maybank for Payment --------------------------------------------------------- The Strait Times reports that Hyflux Ltd said late on April 25 that subsidiary Tuaspring has received a letter of demand from Maybank dated April 23 over payments the bank said was "immediately due and payable". They comprise SGD509.1 million drawn down under term loan facilities, a US$44.5 million cash cover for contingent liabilities, along with further interest and legal costs on a full indemnity basis, the beleaguered water treatment firm said in a regulatory filing, the Strait Times relays. According to the report, Hyflux said that the term loan and letter of credit facilities provided by Maybank, its biggest secured creditor, under Tuaspring's financing arrangements are "non-recourse to and not guaranteed by the company". An estimate of SGD28.0 million in payments is also due to Maybank from hedging agreements. Hyflux added that it is currently unable to precisely determine the exact amount due to currency exchange fluctuations and interest rate movements, the report relates. Maybank had reserved its rights under the hedging agreements entered as part of Tuaspring's financing arrangements, it said. "The demand from Maybank, like the termination of the collaboration agreement, is expected to have a material impact on the financial performance of the group," Hyflux, as cited by the Strait Times, said. The Strait Times adds that Maybank has also issued a notice telling Tuaspring not to sell, remove, transfer or dispose its property charged to a debenture, as the floating charge over said property has crystallised. This excludes the sale of Tuaspring's desalination plant and shared infrastructure to the Public Utilities Boar as per the water purchase agreement, the report says. 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. PLACE HOLDINGS: Narrows Net Loss in Q1 to SGD334,000 ---------------------------------------------------- The Strait Times reports that the Place Holdings has narrowed its first quarter net loss to SGD334,000 for the three months ended March 31, from SGD750,000 a year ago. This was bolstered by revenue from the management of cultural events, the investment holding company said in a regulatory filing on April 24, the Strait Times relays. Loss per share was at 0.01 cent, unchanged from the year before. There is no dividend declared for the quarter, unchanged from the same period a year ago, notes the report. Net asset value for the group stood at 1.58 cents, also unchanged from a year ago. Revenue for the group grew 37 per cent to SGD404,000, from SGD295,000 a year ago. This comprised revenue of SGD101,500 from the management of cultural events and activities and SGD302,500 for providing management services to BJ Aozhong Real Estate, the Strait Times discloses. For the same period last year, revenue consisted of only providing management services to BJ Aozhong Real Estate. The group added that revenue from these events and activities are mainly from non-recurring event management contracts secured. The Strait Times relates that following its successful acquisition of Realty Centre for $148 million, the group is looking to embark on tourism-related business activities in Singapore. This allows it to have a physical presence locally despite all its businesses being located overseas, with the aim of bringing more relevance to shareholders. Having a physical presence will also provide a springboard for its enlarged tourism-related endeavours locally and globally, the group said. Realty Centre is also expected to generate recurring rental income and development profit from asset classes to be developed by New Vision Investment. It will also house the headquarters of the group to help in the company's positioning for future business partnerships and investments as it reaches out globally. The Place Holdings also disclosed that it is pending approvals from relevant regulatory authorities in China for the proposed acquisition of Tianjie Yuntai Wanrun (Xiuwu) Property Development, adds The Strait Times. The Place Holdings Limited, an investment holding company, invests in, develops, and manages media, integrated tourism, and tourism-related "new retail" businesses in the People's Republic of China. It engages in the management of various cultural events and activities; and provision of branding strategy, planning, and organizing services for corporate events, exhibitions, and other events, as well as advertising services. The company also development and operating of integrated tourism business, including development of tourist townships near renowned tourist destinations; and the development of commercial malls, hotels, entertainment and recreation facilities, resorts, and corporate clubhouses. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Asia Pacific is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro and Peter A. Chapman, Editors. Copyright 2019. All rights reserved. ISSN: 1520-9482. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. TCR-AP subscription rate is US$775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter Chapman at 215-945-7000. *** End of Transmission ***