/raid1/www/Hosts/bankrupt/TCRAP_Public/120809.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Thursday, August 9, 2012, Vol. 15, No. 158
Headlines
A U S T R A L I A
ABC LEARNING: Former Auditor Banned For Five Years
* AUSTRALIA: Moody's Says Mortgage Arrears Rise in May 2012
C H I N A
CHINA SOUTH: Moody's Affirms 'B1' Corp. Family Rating
LDK SOLAR: Director Rongqiang Cui Dies at 71
H O N G K O N G
ALLIANZ CORNHILL: Creditors' Proofs of Debt Due Aug. 17
COMEMON INT'L: Final Meetings Set for Sept. 28
CYCO LIMITED: Final Meetings Set for Sept. 28
EDEN TECHNOLOGY: Ho Mei Wah Steps Down as Liquidator
ELTA (H.K.): Members' Final Meeting Set for Sept. 4
GBL III: Placed Under Voluntary Wind-Up Proceedings
HYATT (HK): Final Meetings Set for Sept. 28
JIN-YUE TECHNOLOGY: Creditors' Proofs of Debt Due Sept. 12
MARTINAIR FAR: Creditors' Proofs of Debt Due Sept. 3
MIGHTYWAY INVESTMENT: Placed Under Voluntary Wind-Up Proceedings
NORSCAN-TECH LIMITED: Creditors' Proofs of Debt Due Sept. 3
ONE WORLD: Yeung Tak Chun Steps Down as Liquidator
SHUM FEI: Placed Under Voluntary Wind-Up Proceedings
SOUND GLOBAL: Moody's Rates US$150MM Senior Unsecured Notes 'B1'
TIN LOONG: Placed Under Voluntary Wind-Up Proceedings
WELL GUARD: Creditors' Proofs of Debt Due Aug. 17
WINSURE COMPANY: Members' Final Meeting Set for Sept. 3
I N D I A
AGRAWAL SPONGE: CRISIL Reaffirms 'D' Ratings on INR99MM Loans
ALLIED EXIM: CRISIL Rates INR10MM LT Loan at 'CRISIL B+'
ARUNACHALA GOUNDER: CRISIL Cuts Rating on INR296.2MM Loans to BB+
GALLOPS MOTORS: CARE Rates INR33cr LT Loan at 'CARE BB'
GOBIND SUGAR: Fitch Lowers National Longterm Rating to 'D'
HMA AGRO: CRISIL Assigns 'CRISIL B+' Rating to INR20MM Loans
MITTAL PIGMENTS: CRISIL Rates INR50MM Loan at 'CRISIL BB+'
PRIMA TELECOM: CRISIL Cuts Rating on INR120MM Loans to 'BB'
R.R.THULASI: CRISIL Upgrades Rating on INR34MM Loans to 'BB+'
SOBHAGIA SALES: Delay in Loan Payment Cues CRISIL Junk Ratings
SYRMA TECHNOLOGY: Inadequate Info Cues Fitch to Migrate Ratings
WEST HARYANA: CARE Cuts Rating on INR434.19cr Loans to 'CARE BB'
N E W Z E A L A N D
BIG THUMB: Chinese Restaurant Placed Into Liquidation
CRAFAR FARMS: Court Denies Sir Michael Fay Appeal on Farm Sale
SOUTH ISLAND: Shuts Five South Island Offices; Cuts 17 Jobs
S I N G A P O R E
GENPACT LIMITED: Moody's Assigns 'Ba2' Corp. Family Rating
GENPACT LIMITED: S&P Assigns 'BB+' LT Corp. Credit Rating
- - - - -
=================
A U S T R A L I A
=================
ABC LEARNING: Former Auditor Banned For Five Years
--------------------------------------------------
Australian Securities and Investments Commission has accepted an
enforceable undertaking (EU) from Brisbane auditor, Simon Andrew
Peter Green. This EU follows ASIC's investigation into
Mr. Green's conduct of the audit of the 2007 financial report of
ABC Learning Centres Limited. At the time, Mr. Green was a
partner with the former Brisbane firm of Pitcher Partners, which
was dissolved on Nov. 28, 2008.
Under the EU, Mr. Green is prevented from practicing as a
registered auditor for a period of five years (period of
suspension).
He is also required during the period of suspension to:
* notify any employer of the EU and if he is retained
directly by a client, then inform the client of the
EU regularly report to ASIC any other audit and/or
review work under the Corporations Act 2001 he
undertakes outside of what only a registered auditor
can perform; and
* participate, in each 12 month period, in an additional
15 hours of continuing professional development above
the mandatory requirements of the ICAA.
Following conclusion of the period of suspension, he is required
to submit his first five audits for review by a registered
company auditor approved by ASIC.
"Auditors are important gatekeepers who are relied upon to
provide assurance and market confidence in the quality of
financial reports," ASIC Chairman Greg Medcraft said.
"ASIC continues to focus auditors on the importance of applying
professional scepticism and obtaining sufficient audit evidence
to support their conclusions. It is vital that auditors apply
appropriate skills, experience and scepticism in identifying and
responding to risks, reviewing accounting treatments, gathering
audit evidence and in judgement areas such as going concern
assessments," added Mr. Medcraft.
ASIC is of the view that during the audit of ABC's 2007 financial
report, Mr. Green failed to perform adequately and properly his
duties as an auditor. In particular, ASIC is of the view that
Mr. Green failed to:
-- obtain sufficient appropriate audit evidence:
* in relation to the correct accounting treatment for
various fees which resulted in a significantly material
overstatement of ABC's revenue
* to support the classification of income items - the
consequence being that items not from the provision of
childcare services were incorrectly classified as revenue
which resulted in the overstatement of ABC's revenue
* to enable a reasonably competent auditor to conclude that
ABC was a going concern to support his conclusions with
regard to related party transactions, property plant and
equipment, wages and salaries, and
* to support his opinion that ABC's 2007 financial report
was free of material misstatement.
-- adequately document the testing undertaken in respect to
the risk of fraud
-- develop audit procedures to deal with assessed risks
-- perform sufficient and appropriate subsequent events
procedures, and
-- use professional judgement and scepticism when auditing
ABC's 2007 financial report.
Mr. Green acknowledges ASIC's views are reasonably held.
About ABC Learning
Based in Australia, ABC Learning Centres Limited provided
childcare services and education in more than 1,200 centers in
Australia, New Zealand, the United States and the United Kingdom.
In November 2008, ABC Learning Centres Limited appointed
Peter Walker and Greg Moloney of Ferrier Hodgson as voluntary
administrators of the company and a number of its subsidiaries.
Subsequent to the appointment of administrators, the company's
banking syndicate appointed Chris Honey, Murray Smith and John
Cronin of McGrathNicol as receivers.
The Administrators filed a Chapter 15 petition for the Company
(Bankr. D. Del. Case No. 10-11711) on May 26, 2010. Joel A.
Waite, Esq., at Young, Conaway, Stargatt & Taylor, represents the
Petitioners in the Chapter 15 case. ABC's debts and assets were
estimated to be between US$100 million and US$500 million.
A separate Chapter 15 petition was filed for affiliate A.B.C.
USA Holdings Pty Ltd., listing assets and debts of at least
US$100 million.
In June 2010, ABC Learning creditors in Australia voted to wind
up the failed childcare provider.
* AUSTRALIA: Moody's Says Mortgage Arrears Rise in May 2012
-----------------------------------------------------------
Moody's Investors Service says that Australian prime mortgage
arrears rose slightly in May from April, but have fallen since
May 2011.
As published in Moody's just released Global Collateral
Performance Report, arrears in excess of 30 days in the
Australian prime residential mortgage market were 1.70% in May,
up from 1.65% in April, but down from 1.76% in May 2011.
And 30-day plus arrears in the Australian non-conforming market
were unchanged at 11.69% -- when compared with April -- but down
from 13.71% in May 2011.
"Moody's expects arrears rates to hold steady in 2012 because of
recent interest rate cuts and Moody's expectation that GDP growth
will remain at a robust 3.3% in 2012," says Jennifer Wu, a
Moody's Vice President and Senior Credit Officer.
"Given that the benefits of this economic growth and low interest
rates will not be felt equally across all sectors of the economy,
certain regions, such as those dependent on tourism and retail,
which are suffering due to the high Australian Dollar, will see a
rise in arrears. But Moody's also expects this trend to be offset
by falls in arrears in other regions," adds Ms. Wu.
Moody's will publish its annual delinquency report later this
year, which will provide further insights on regional performance
differences and drivers.
Moody's Global Collateral Performance Report is updated monthly
and covers the collateral performance of 41 structured finance
sectors located globally. In the US, the performance metrics of
12 asset classes are covered, in Europe 19, in Japan 7, in
Australia 2 and in Canada 1.
The report features typical aggregate performance metrics such as
delinquencies and losses as well as sector-specific metrics that
include residential and commercial property prices, loans in
special servicing, refinancing profiles, average WARF levels,
senior OC levels, payment rates, and excess spread. The
underlying data is also included. The metrics are accompanied by
sector commentary and outlooks, and projected losses by vintage
where applicable.
Australian data focuses on Australian Prime RMBS, Australian Non-
conforming RMBS, and Australian Home Prices.
=========
C H I N A
=========
CHINA SOUTH: Moody's Affirms 'B1' Corp. Family Rating
-----------------------------------------------------
Moody's Investors Service has changed to stable from negative the
outlook of China South City Holdings Limited's B1 corporate
family and B2 senior unsecured debt ratings.
At the same time, Moody's has affirmed both ratings.
Ratings Rationale
"The stable outlook reflects improvements in CSC's contract sales
and the achievement of sales from new locations," says Jiming
Zou, a Moody's Analyst.
For the fiscal year ending March 2012, CSC increased its contract
sales to HKD7.1 billion mainly from four projects located in
Nanchang, Xian, Nanning and Shenzhen.
Specifically, contributions from the three new projects in
Nanchang, Xian and Nanning accounted for two thirds of total
contract sales, indicating that CSC has made initial success in
replicating in other locations the business model first
established in Shenzhen.
This model is based on developing and operating logistics and
trade centers with supporting residential properties and
commercial facilities.
The fast rise in CSC's contract sales was supported by an
improving business environment and the development of ancillary
services and infrastructure facilities around CSC's new trade
centers.
Moreover, the restrictive measures imposed by regional
authorities on the residential market have not affected the
performance of its commercial properties.
"The improvement in sales means that CSC is now less dependent on
debt to fund its construction, resulting in a credit profile that
matches its B1 rating. This profile includes Debt/Total
Capitalization of 31.6% and EBITDA/Interest expenses of 3.5x for
the fiscal year ending March 2012," says Zou.
Moody's expects CSC to keep Debt/ Total Capitalization at 30%-35%
and EBITDA/Interest at 3.0x--4.0x in the next 12 -- 18 months.
CSC's B1 corporate family rating reflects its unique business
model, which has involved the successful development and
operation of a single integrated trade center in Shenzhen.
It also takes into consideration CSC's ability to access large
suburban land plots at low cost, as well as the support it
receives from local governments on infrastructure improvement and
project terms. As a result, it has achieved a high gross margin
of above 50% and is able to recover costs within three to four
years.
But CSC's rating is constrained by its fast expansion into large-
scale developments in new locations that presents a degree of
execution risk.
The volatility in its sales will remain high, and it will need to
secure a critical mass of tenants and make further progress on
adjacent infrastructure development to ramp up its sales. It is
also very dependent on the strength of regional economies.
In addition, CSC has yet to achieve a stream of recurring rental
income from its logistics and trade centers that can
significantly contribute to debt servicing. The proportion of
rental income to consolidated revenues is low in the single
percents. This situation will continue for the next 2 years.
CSC has an adequate liquidity position and its unrestricted cash
balance -- around of HKD3.3 billion as of March 2012 -- can cover
its short-term debt of around HKD2.7 billion. Also, its business
model can flexibly adjust capital expenditures which are funded
substantially by sales proceeds.
The stable outlook reflects Moody's expectation that CSC will
largely achieve its contract sales target, while also maintaining
an adequate liquidity position in the next 12-18 months.
Upward rating pressure is unlikely to emerge in the near term.
However, over the medium term, upgrade pressure could emerge if
CSC (1) establishes a track record of selling trade center units
in locations outside Shenzhen, (2) achieves a meaningful level of
rental income, (3) demonstrates a healthy financial profile with
Debt/Book Capitalization below 40%-45% and EBITDA/Interest
expenses rising above 4.5x--5.0x, and (4) strengthens its
liquidity profile with broadened banking relationships.
On the other hand, the ratings could be downgraded, if (1) CSC
fails to execute its business plan, (2) a regional economy where
it operates experiences a significant downturn, which in turn
causes a material impairment to sales, or (3) CSC undertakes
further aggressive expansion into more new locations to the
detriment of its financial profile.
Moody's would considers downgrade triggers as EBITDA/Interest
expense coverage below 3.0x; cash balance below RMB2 billion; or
Debt/Book Capitalization above 50%-55%.
The principal methodology used in rating China South City
Holdings Limited was the Global Homebuilding Industry Methodology
published in March 2009.
China South City (CSC), listed on the Hong Kong Stock Exchange,
is one of the developers and operators of large scale integrated
logistics and trade centers in China. The company operates one
integrated logistics and trade center in Shenzhen and is
developing new trade centers in Nanning, Nanchang, Xian, Harbin
and Zhengzhou.
LDK SOLAR: Director Rongqiang Cui Dies at 71
--------------------------------------------
LDK Solar Co., Ltd., announced that Professor Rongqiang Cui,
Director of LDK Solar's Laboratory at Shanghai Jiaotong
University, passed away at the age of 71.
Professor Cui joined LDK Solar in September 2005 as the Director
of LDK Solar's Laboratory at Shanghai Jiaotong University.
Professor Cui began solar energy research in 1971 and became the
Head of the Solar Research Institute of Shanghai Jiaotong
University in 1997. Previously, he was an assistant tutor,
lecturer and professor in the Physics Department of Xian Jiaotong
University from 1964 to 1996. Professor Cui graduated from the
Xian Jiaotong University in 1964 with a diploma in Engineering
Physics.
Management of the LDK Solar Laboratory at Shanghai Jiaotong
University will be assumed by Dr. Yuepeng Wan, LDK Solar's Chief
Technical Officer, along with his research team.
Mr. Xiaofeng Peng, Chairman and CEO of LDK Solar, stated, "It is
with deep sadness that we announce the passing of Professor Cui.
He was a valued member of the LDK family and will be sorely
missed by his colleagues."
About LDK Solar
LDK Solar Co., Ltd. -- http://www.ldksolar.com-- based in Hi-
Tech Industrial Park, Xinyu City, Jiangxi Province, People's
Republic of China, is a vertically integrated manufacturer of
photovoltaic products, including high-quality and low-cost
polysilicon, solar wafers, cells, modules, systems, power
projects and solutions.
LDK Solar was incorporated in the Cayman Islands on May 1, 2006,
by LDK New Energy, a British Virgin Islands company wholly owned
by Xiaofeng Peng, LDK's founder, chairman and chief executive
officer, to acquire all of the equity interests in Jiangxi LDK
Solar from Suzhou Liouxin Industry Co., Ltd., and Liouxin
Industrial Limited.
KPMG in Hong Kong, China, said in a May 15, 2012, audit report,
there is substantial doubt on the ability of LDK Solar Co., Ltd.
to continue as a going concern. According to KPMG, LDK Solar has
a net working capital deficit and is restricted to incur
additional debt as it has not met a financial covenant ratio
under a long-term debt agreement as of Dec. 31, 2011. These
conditions raise substantial doubt about the Group's ability to
continue as a going concern.
The Company's balance sheet at March 31, 2012, showed US$6.63
billion in total assets, US$5.96 billion in total liabilities,
US$228.21 million in redeemable non-controlling interests and
US$447.32 million in total equity.
================
H O N G K O N G
================
ALLIANZ CORNHILL: Creditors' Proofs of Debt Due Aug. 17
-------------------------------------------------------
Creditors of Allianz Cornhill (Hong Kong) Limited, which is in
members' voluntary liquidation, are required to file their proofs
of debt by Aug. 17, 2012, to be included in the company's
dividend distribution.
The company's liquidators are:
Patrick Cowley
Chan Mei Lan
8th Floor, Prince's Building
10 Chater Road
Central, Hong Kong
COMEMON INT'L: Final Meetings Set for Sept. 28
----------------------------------------------
Members and creditors of Comemon International Corporation
Limited will hold their final meetings on Sept. 28, 2012, at 2:30
p.m., and 2:45 p.m., respectively at Suite 2302, 23/F, Seaview
Commercial Building, at 21 Connaught Road West, Sheung Wan, in
Hong Kong.
At the meeting, Cheung Hok Hin Alan, the company's liquidator,
will give a report on the company's wind-up proceedings and
property disposal.
CYCO LIMITED: Final Meetings Set for Sept. 28
---------------------------------------------
Members and creditors of Cyco Limited will hold their final
meetings on Sept. 28, 2012, at 3:00 p.m., and 3:15 p.m.,
respectively at Suite 2302, 23/F, Seaview Commercial Building, at
21 Connaught Road West, Sheung Wan, in Hong Kong.
At the meeting, Cheung Hok Hin Alan, the company's liquidator,
will give a report on the company's wind-up proceedings and
property disposal.
EDEN TECHNOLOGY: Ho Mei Wah Steps Down as Liquidator
----------------------------------------------------
Ho Mei Wah stepped down as liquidator of Eden Technology (H.K.)
Limited on July 25, 2012.
ELTA (H.K.): Members' Final Meeting Set for Sept. 4
---------------------------------------------------
Members of Elta (H.K.) Limited will hold their final general
meeting on Sept. 4, 2012, at 10:00 a.m., at Room 1315, 13/F,
Asian House, at 1 Hennessy Road, Wanchai, in Hong Kong.
At the meeting, IP Kwun Ting, the company's liquidator, will give
a report on the company's wind-up proceedings and property
disposal.
GBL III: Placed Under Voluntary Wind-Up Proceedings
---------------------------------------------------
At an extraordinary general meeting held on July 27, 2012,
creditors of GBL III Limited resolved to voluntarily wind up the
company's operations.
The company's liquidators are:
Natalia K M Seng
Susan Y H Lo
Level 28, Three Pacific Place
Queen's Road
East, Hong Kong
HYATT (HK): Final Meetings Set for Sept. 28
-------------------------------------------
Members and creditors of Hyatt (HK) Limited will hold their final
meetings on Sept. 28, 2012, at 3:30 p.m., and 3:45 p.m.,
respectively at Suite 2302, 23/F, Seaview Commercial Building, at
21 Connaught Road West, Sheung Wan, in Hong Kong.
At the meeting, Cheung Hok Hin Alan, the company's liquidator,
will give a report on the company's wind-up proceedings and
property disposal.
JIN-YUE TECHNOLOGY: Creditors' Proofs of Debt Due Sept. 12
----------------------------------------------------------
Creditors of Jin-Yue Technology Limited, which is in members'
voluntary liquidation, are required to file their proofs of debt
by Sept. 12, 2012, to be included in the company's dividend
distribution.
The company commenced wind-up proceedings on July 26, 2012.
The company's liquidator is:
Chan Cho Wing
Room 602, Eastern Commercial Centre
397 Hennessy Road
Wanchai, Hong Kong
MARTINAIR FAR: Creditors' Proofs of Debt Due Sept. 3
----------------------------------------------------
Creditors of Martinair Far East Limited, which is in members'
voluntary liquidation, are required to file their proofs of debt
by Sept. 3, 2012, to be included in the company's dividend
distribution.
The company's liquidators are:
Natalia K M Seng
Susan Y H Lo
Level 28, Three Pacific Place
Queen's Road
East, Hong Kong
MIGHTYWAY INVESTMENT: Placed Under Voluntary Wind-Up Proceedings
----------------------------------------------------------------
At an extraordinary general meeting held on July 25, 2012,
creditors of Mightyway Investment Limited resolved to voluntarily
wind up the company's operations.
The company's liquidators are:
Li Chin Chung
Tang Yam Lun Alan
83 Des Voeux Road
Central, Hong Kong
NORSCAN-TECH LIMITED: Creditors' Proofs of Debt Due Sept. 3
-----------------------------------------------------------
Creditors of Norscan-Tech Limited, which is in members' voluntary
liquidation, are required to file their proofs of debt by
Sept. 3, 2012, to be included in the company's dividend
distribution.
The company commenced wind-up proceedings on Aug. 1, 2012.
The company's liquidator is:
Chung Ho Shing
Room 2203, Tung Wai Commercial Building
109-111 Gloucester Road
Wanchai, Hong Kong
ONE WORLD: Yeung Tak Chun Steps Down as Liquidator
--------------------------------------------------
Yeung Tak Chun stepped down as liquidator of One World Fragrance
Limited on July 27, 2012.
SHUM FEI: Placed Under Voluntary Wind-Up Proceedings
----------------------------------------------------
At an extraordinary general meeting held on July 20, 2012,
creditors of Shum Fei (International) Material Limited resolved
to voluntarily wind up the company's operations.
The company's liquidator is:
Sze Ching Po Tommy
Flat 2003, Wellborne Commercial Centre
8 Java Road, North Point
Hong Kong
SOUND GLOBAL: Moody's Rates US$150MM Senior Unsecured Notes 'B1'
----------------------------------------------------------------
Moody's Investors Service has assigned a definitive B1 senior
unsecured rating to the following USD notes issued by Sound
Global Limited.
- US$150 million, 11.875%, 5-year senior unsecured notes, due
2017
The ratings outlook is stable.
Ratings Rationale
Moody's has removed the provisional status of the bond rating on
this debt obligation that was assigned on July 20. The final
terms and conditions on the bond are consistent with Moody's
expectations.
The company will use the net proceeds from the bond issue to
finance its build, operate & transfer (BOT) projects, refinance
debt, and for other general corporate purposes.
The principal methodology used in this rating was Moody's Global
Construction Industry Methodology published in November 2010.
Established in 2005, Sound Global Ltd (formerly known as Epure
International Ltd) is one of the leading providers of turnkey
water and wastewater treatment solutions in China. The company
was founded by Mr. Wen Yibo, who has been in the wastewater
treatment industry since 1993.
The company focuses on the design, construction and installation
of water and wastewater treatment facilities. Since 2006, it has
diversified into the management of water treatment plants. It
also has started to invest in BOT projects to diversify its
portfolio.
It was one of the few privately owned companies in the industry,
before listing in Singapore in 2006 and in Hong Kong in 2010.
TIN LOONG: Placed Under Voluntary Wind-Up Proceedings
-----------------------------------------------------
At an extraordinary general meeting held on July 20, 2012,
creditors of Tin Loong (Holdings) Limited resolved to voluntarily
wind up the company's operations.
The company's liquidator is:
Sze Ching Po Tommy
Flat 2003, Wellborne Commercial Centre
8 Java Road, North Point
Hong Kong
WELL GUARD: Creditors' Proofs of Debt Due Aug. 17
-------------------------------------------------
Creditors of Well Guard Company Limited, which is in members'
voluntary liquidation, are required to file their proofs of debt
by Aug. 17, 2012, to be included in the company's dividend
distribution.
The company's liquidators are:
Patrick Cowley
Chan Mei Lan
8th Floor, Prince's Building
10 Chater Road
Central, Hong Kong
WINSURE COMPANY: Members' Final Meeting Set for Sept. 3
-------------------------------------------------------
Members of Winsure Company Limited will hold their final meeting
on Sept. 3, 2012, at 10:30 a.m., at 17/F, Kam Sang Building, at
255 Des Voeux Road Central, Sheung Wan, in Hong Kong.
At the meeting, Lui Wan Ho and To Chi Man, the company's
liquidators, will give a report on the company's wind-up
proceedings and property disposal.
=========
I N D I A
=========
AGRAWAL SPONGE: CRISIL Reaffirms 'D' Ratings on INR99MM Loans
-------------------------------------------------------------
CRISIL's rating on the long-term bank facilities of Agrawal
Sponge Ltd continues to reflect instances of delay by ASL in
servicing its debt; the delays have been caused by the company's
weak liquidity.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 15 CRISIL D (Reaffirmed)
Proposed Long-Term 31.9 CRISIL D (Reaffirmed)
Bank Loan Facility
Term Loan 9.1 CRISIL D (Reaffirmed)
Working Capital Term 43 CRISIL D (Reaffirmed)
Loan
ASL also has small scale of operations. The rating also factors
in the vulnerability of the company's margins to cyclicality in
the steel industry and increasing input costs, and its below-
average financial risk profile, marked by weak debt protection
metrics and liquidity. These rating weaknesses are partially
offset by the established track record of ASL in the steel
industry.
Update
ASL registered revenues of INR468.8 million in 2010-11 (refers to
the financial year, April 1 to March 31), a decline of 4 per cent
vis-…-vis 2009-10. Also, in 2011-12, the company's revenues are
estimated to register a year-on-year decline of about 45 per cent
because of high cost of iron ore and coal. Because of ban on
mining of iron ore in Karnataka in 2011-12, there has been a
shortage of iron ore, leading to low capacity utilisation of
sponge iron players. Furthermore, the profitability is also under
pressure because of increase in prices of iron ore and fuel
costs. ASL is also estimated to register a low operating margin
of less than 3 per cent in 2011-12 as against 10.60 per cent in
2010-11. CRISIL believes that ASL's revenue growth and
sustainability of profitability will remain under pressure
because of high input costs.
ASL's working capital cycle has remained in line with historical
trend; the company's debtor and inventory levels in 2011-12 are
estimated at 14 days and 70 days, respectively, as against 13
days and 99 days, respectively, in 2010-11.
ASL's financial risk profile continues to remain below-average,
marked by weak debt protection metrics and liquidity as reflected
in near full utilisation of cash credit limit. The cash credit
limit was fully utilised for the 12 months through June 2012.
However, the estimated gearing is low, at about 0.30 times, as on
March 31, 2012, because of no incremental working capital
requirements. The company's estimated cash accruals are negative
and are expected to remain low given the weak industry outlook
for sponge iron manufacturers. CRISIL believes that ASL's
financial risk profile will remain weak over the medium term,
marked by weak debt protection metrics and liquidity.
About Agrawal Sponge
ASL, incorporated in 2003, was acquired by its current promoter,
Mr. R D Gupta, in 2006-07. The company manufactures steel ingots
and sponge iron. Currently, the company has capacity to
manufacture about 18,000 tonnes per annum (tpa) of steel ingots
and 60,000 tpa of sponge iron. Its manufacturing facility is
based in Raipur (Chhattisgarh).
For 2010-11, ASL reported a profit after tax (PAT) of INR17.9
million on net sales of INR468.8 million, against a PAT of INR4
million on net sales of INR484 million for 2009-10.
ALLIED EXIM: CRISIL Rates INR10MM LT Loan at 'CRISIL B+'
---------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to
the bank facilities of Allied Exim Foods.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Packing Credit 40 CRISIL A4 (Assigned)
Foreign Documentary 50 CRISIL A4 (Assigned)
Bills Purchase
Long-Term Loan 10 CRISIL B+/Stable
(Assigned)
The ratings reflect AEF's below-average financial risk profile,
marked by weak debt protection metrics, susceptibility of its
operating margin to volatility in raw material prices, and
exposure to risks inherent in the seafood industry. These rating
weaknesses are partially offset by the extensive experience of
AEF's partners in the seafood industry and their moderate risk
coverage measures.
Outlook: Stable
CRISIL believes that AEF will continue to benefit over the medium
term from its partners' extensive experience in the seafood
industry. The outlook may be revised to 'Positive' if the firm
scales up its operations significantly, while improving its
margins, resulting in a sustained improvement in financial risk
profile. Conversely, the outlook may be revised to 'Negative' if
the firm records considerable decline in revenues, resulting in
weakening in its financial risk profile, or in case of
deterioration in working capital management resulting in
stretched liquidity, or if the partners withdraw greater-than-
expected capital, thereby impacting its capital structure.
About Allied Exim
Set up in 2005, AEF processes and exports marine products, which
mainly include the cephalopods category comprising cuttle fish,
squid, octopus, and tuna. The firm makes most of its sales
through agents and derives majority of its revenues from supply
of seafood to Europe and the Middle East. AEF's partners have
been in the seafood business for over three decades through their
group entity, St. Peter and Paul, which has been supplying
seafood primarily to the domestic market. AEF's operations are
managed by Mr. Moraise along with his three son's: Mr. Joseph
Jagan, Mr. Bhaiju, and Mr. Joseph Mohan.
For 2011-12 (refers to financial year, April 1 to March 31), AEF
reported, on a provisional basis, a profit after tax of INR0.4
million on net sales of INR441 million; the firm reported a loss
of INR6.6 million on net sales of INR165 million for 2010-11.
ARUNACHALA GOUNDER: CRISIL Cuts Rating on INR296.2MM Loans to BB+
-----------------------------------------------------------------
CRISIL has downgraded its ratings on the bank facilities of
Arunachala Gounder Textile Mills Pvt Ltd to 'CRISIL
BB+/Stable/CRISIL A4+' from 'CRISIL BBB-/Stable/CRISIL A3'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 6.0 CRISIL A4+ (Downgraded from
CRISIL A3)
Letter of Credit 95.0 CRISIL A4+ (Downgraded from
CRISIL A3)
Cash Credit 150.0 CRISIL BB+/Stable (Downgraded
from CRISIL BBB-/Stable)
Long-Term Loan 116.2 CRISIL BB+/Stable (Downgraded
from CRISIL BBB-/Stable)
Standby Line of Credit 30.0 CRISIL BB+/Stable (Downgraded
from CRISIL BBB-/Stable)
The downgrade reflects CRISIL's belief that AGT's financial risk
profile over the medium term, particularly its debt protection
metrics and capital structure, will be weaker than previously
expected, because of the company's large, debt-funded capital
expenditure (capex) in the recent past and the pressure on its
profitability margins. Though AGT's incremental cash accruals
from the capex programme are expected to result in an improvement
in the company's capital structure, AGT's gearing is expected to
remain above 1.5 times over the next two years; the company had a
gearing of 1.8 times as on March 31, 2012. CRISIL believes that
though AGT's operating margin and debt protection metrics will
witness an improvement over the medium term from the 2011-12
levels, the same will be lower than CRISIL's expectations. AGT
has weak liquidity. Its term debt obligations of INR40 million
per annum over the medium term are expected to be tightly matched
with the corresponding cash accruals generated. Its bank lines
have also been extensively utilised over the 12 months through
March 2012, thereby leaving it with little financial cushion in
times of exigencies.
The ratings continue to reflect the benefits that AGT derives
from its established market position in the viscose yarn
industry, and its diversified product and customer profiles.
These rating strengths are partially offset by the company's
below-average financial risk profile, dependence on a single
supplier for viscose staple fibre (VSF), and susceptibility to
volatility in foreign exchange rates and in VSF prices.
Outlook: Stable
CRISIL believes that AGT will continue to benefit over the medium
term from its established market position in the viscose filament
yarn industry. The outlook may be revised to 'Positive' if the
company reports significant increase in its scale of operations,
and a sustained improvement in its profitability and cash
accruals. Conversely, the outlook may be revised to 'Negative' if
AGT faces shortage of raw material, reports further decline in
its profitability, or undertakes a larger-than-expected, debt-
funded capex programme, thereby further weakening its capital
structure.
About Arunachala Gounder
AGT was set up by Mr. P K Jayagopal, Mr. A Sairam, and Mr. P
Nutrajan in 1996. The company is managed by Mr. P Nutrajan and
his family. Based in Erode (Tamil Nadu), AGT manufactures viscose
fibre yarn, cotton lycra blended yarn, and cotton yarn. As on
March 31, 2012, AGT had 24,192 spindles and 1264 rotors at its
plant.
AGT, reported on a provisional basis, a net loss of INR16.5
million on an operating income of INR855 million for 2011-12. The
company reported a PAT of INR19.5 million on an operating income
of INR899 million for 2010-11, against a PAT of INR19.7 million
on an operating income of INR816 million for 2009-10.
GALLOPS MOTORS: CARE Rates INR33cr LT Loan at 'CARE BB'
-------------------------------------------------------
CARE assigns 'CARE BB' rating to the bank facilities of
Gallops Motors Pvt Ltd.
Amount
Facilities (INR crore) Ratings
----------- ----------- -------
Long-term Bank Facilities 33 CARE BB Assigned
Rating Rationale
The rating of Gallops Motors Private Limited is primarily
constrained by its low and declining operating profitability
margin, low capitalization and highly leveraged capital
structure.
The rating is further constrained by the high working capital
intensity of its operations, revenue concentration from the
principal General Motors (GM), which has modest market share in
the intensely competitive Indian passenger car market.
The rating, however, takes into account GMPL's established
operations and its longstanding association with the principal
(GM) along with the experienced promoter group having diversified
business interest.
GMPL's ability to increase the sales volume in the highly
competitive four-wheeler industry along with improvement in
profitability and capital structure are the key rating
sensitivities.
Incorporated in the year 2004, GMPL, a part of NG Group, is
promoted by Mr Narsinh G. Patel, Mr. Nagin G. Patel and Mr Tanuja
R. Pugalia, based out of Ahmedabad. GMPL is an authorized dealer
of GM, Chevrolet cars, for the state of Gujarat and trades in all
the brands of 'Chevrolet', which is the flagship brand of General
Motors in India. GMPL presently has five 3'S (Sales, Service and
Spare Parts) facilities located at Ahmedabad, Rajkot, Mehsana,
Himmatnagar and Jamnagar and four showrooms-cum-workshop
facilities located at Ahmedabad, Maninagar, Gandhinagar and
Surendranagar.
As per the audited results for FY11 (refers to the period April 1
to March 31), GMPL reported a total operating income of INR299.56
crore (FY10: INR178.79 crore) with a PAT of INR1.87 crore (FY10:
INR1.10 crore). As per the provisional results for FY12, GMPL
reported a total operating income of INR297.21 crore and a PBILDT
of INR10.51 crore.
GOBIND SUGAR: Fitch Lowers National Longterm Rating to 'D'
----------------------------------------------------------
Fitch Ratings has downgraded India-based Gobind Sugar Mills
Limited's National Long-Term Rating to 'Fitch D(ind)' from 'Fitch
B-(ind)' and removed the rating from Rating Watch Negative (RWN).
The downgrade reflects the erosion of GSML's net worth due to
continued losses and its consequent referral to the Board for
Industrial and Financial Reconstruction (BIFR). However, there
have been no irregularities in its bank facilities so far.
Positive rating guidelines include GSML's deregistration from the
BIFR.
GSML has a sugar mill in Aira, Uttar Pradesh, with a crushing
capacity of 7,500 tonnes per day. In H1FY12, revenue was INR914m
(FY11: INR2,363m) and EBITDA was negative INR36.6m (FY11:
positive INR47.2m).
Rating actions on GSML's bank facilities:
-- INR210.4m long-term loans: downgraded to National Long-term
'Fitch C(ind)' from 'Fitch B-(ind)'; off RWN; rating
withdrawn as the loans have been fully repaid
-- INR748m fund-based limits: downgraded to National Long-term
'Fitch C(ind)' from 'Fitch B-(ind)'; off RWN
-- INR3m fund-based limits: affirmed at National Short-Term
'Fitch A4(ind)'; off RWN
-- INR27m non-fund-based limits: affirmed at National Short-
Term 'Fitch A4(ind)'; off RWN
HMA AGRO: CRISIL Assigns 'CRISIL B+' Rating to INR20MM Loans
------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to
the bank facilities of HMA Agro Industries Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 150 CRISIL B+/Stable (Assigned)
Cash Credit 50 CRISIL B+/Stable (Assigned)
Export Packing Credit 250 CRISIL A4 (Assigned)
The ratings reflect the HMAL's exposure to risks inherent in the
meat industry, concentration in revenue profile and its exposure
to risks relating to adverse changes in government regulations.
These rating weaknesses are partially offset by the established
presence of HMAL's promoters in the processed meat industry, and
sound operational efficiencies derived from its fully integrated
plant, with abattoir and meat processing facilities. The ratings
also reflect its comfortable financial risk profile, marked by a
moderate networth, comfortable gearing and adequate debt
protection metrics.
Outlook: Stable
CRISIL believes that HMAL will continue to benefit over the
medium term from its promoter's extensive experience in the meat
industry. The outlook may be revised to 'Positive' in case the
company reports higher-than-expected turnover, while it maintains
its profitability and capital structure or in case it
successfully diversifies its customer's profile. Conversely, the
outlook may be revised to 'Negative' if HMAL reports lower-than-
expected profitability or undertakes a larger-than-expected,
debt-funded capital expenditure programme, leading to
deterioration in its financial risk profile.
About HMA Agro
HMAL was set up by Mr. Haji Mohammed Ashiq Qureshi in 2010. It
processes and exports frozen buffalo meat. The Qureshi family has
been in the meat processing industry for more than two decades
but entered the organised segment in 2001-02 (refers to financial
year, April 1 to March 31) through a group company, HMA Food
Export Pvt Ltd (rated 'CRISIL B/Stable/CRISIL A4'). Other group
concerns include Gulzar Traders and HMA Trading Company.
For 2011-12 (refers to financial year, April 1 to March 31), HMAL
provisionally reported a profit after tax (PAT) of INR 150
million on net sales of INR 3,580 million.
MITTAL PIGMENTS: CRISIL Rates INR50MM Loan at 'CRISIL BB+'
----------------------------------------------------------
CRISIL has assigned its 'CRISIL BB+/Stable/CRISIL A4+' ratings to
the bank facilities of Mittal Pigments Pvt Ltd (MPPL; part of the
Mittal group).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 50 CRISIL BB+/Stable (Assigned)
Letter of Credit 100 CRISIL A4+ (Assigned)
The ratings reflect the Mittal group's above-average financial
risk profile, marked by moderate net worth, low gearing, and
above-average debt protection metrics, and promoters' extensive
industry experience. These rating strengths are partially offset
by the Mittal group's large working capital requirements and
vulnerability to cyclical nature of industry and to volatility in
raw material prices.
For arriving at the ratings, CRISIL has combined the business and
financial risk profiles of MPPL and Jammu Pigments Pvt Ltd
(JPPL), together referred to as the Mittal group. This is because
both the entities are in the same line of business and have a
common management and strong fungible cash flows between them.
Outlook: Stable
CRISIL believes that the Mittal group will continue to benefit
from the extensive experience of its promoters in the lead and
zinc industry, in the medium term. The outlook may be revised to
'Positive' in case the group reports higher-than-expected
increase in its scale of operations, while it sustains its
profitability. Conversely, the outlook may be revised to
'Negative' in case of lower-than-expected cash accruals, or if
there is a stretch in its working capital cycle, leading to
stretch in its liquidity, or in case the group undertakes any
significant debt-funded capital expenditure programme.
The Mittal group is promoted by Mr. Ramesh Kumar Agarwal and his
wife. The promoters have been engaged in the same line of
business for over two decades through other group entities.
MPPL was incorporated in 1991 and manufactures refined lead
ingots, alloys, oxides, (accounts for about 60 per cent of its
total revenues), and zinc oxides and alloys (accounts for the
remaining 40 per cent). The company's manufacturing facility is
located in Kota (Rajasthan) with a total manufacturing capacity
of about 30,000 tonnes per annum (tpa). MPPL derives around 45
per cent of its total revenues from exports to several countries,
such as the Middle East, Korea, Hong Kong, and China.
JPPL was incorporated in 2003. It also manufactures lead (70 per
cent) and zinc products (30 per cent). The company's
manufacturing facility is located in Kathua (Jammu & Kashmir),
which is an excise-free zone. JPPL has a total manufacturing
capacity of 32,700 tpa of lead ingots, allows, and oxides; 7440
tpa of zinc oxides; and 618 tpa of zinc alloys. JPPL does not
export its products.
The Mittal group reported an estimated profit after tax (PAT) of
INR63 million on estimated net sales of INR255 million for 2011-
12 (refers to financial year, April 1 to March 31), as against an
estimated PAT of INR26 million on estimated net sales of INR206
million for 2010-11.
PRIMA TELECOM: CRISIL Cuts Rating on INR120MM Loans to 'BB'
-----------------------------------------------------------
CRISIL has downgraded its ratings on the bank facilities of
Prima Telecom Ltd to 'CRISIL BB/Stable/CRISIL A4+' from 'CRISIL
BBB-/Stable/CRISIL A3'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 100 CRISIL A4+ (Downgraded from
'CRISIL A3')
Bill Purchase- 30 CRISIL A4+ (Downgraded from
Discounting Facility 'CRISIL A3')
Letter of Credit 260 CRISIL A4+ (Downgraded from
'CRISIL A3')
Cash Credit 110 CRISIL BB/Stable (Downgraded
from 'CRISIL BBB-/Stable')
Proposed Long-Term 10 CRISIL BB/Stable (Downgraded
Bank Loan Facility from 'CRISIL BBB-/Stable')
Rupee Term Loan 90 CRISIL BB/Stable
The downgrade reflects pressure on PTL's business risk profile
because of lower-than-expected growth in its sales in 2011-12
(refers to financial year, April 1 to March 31) and its
continuing customer concentration. Sales in 2011-12 declined
significantly to INR374 million from INR522 million in 2010-11.
This is primarily on account of slowdown in the telecom sector
resulting in significant decline in demand for PTL's products.
CRISIL believes that PTL's overall business risk profile will
continue to remain constrained unless improvement in orders and
diversity in customer profile. The company's overall performance
is expected to remain subdued over the near to medium term. The
overall decline in revenues is likely to impact the overall cash
accruals of the company which would be tightly matching against
the repayment obligations. However, PTL's financial risk profile
is supported by a comfortable gearing (0.79 times estimated for
March 31, 2012) and moderate debt protection metrics. Currently,
the company relies heavily on its promoter, the Lalit Suri group,
to service its debt in a timely manner. The promoter group has
made equity infusion of INR16 million in PTL in 2011-12 -- the
extent and timing of such infusion of funds will remain a key
rating sensitivity factor over the medium term.
The ratings reflect PTL's moderate financial risk profile marked
by above average gearing and moderate debt protection metrics,
and the extensive experience of its promoters in the telecom
equipment industry. These rating strengths are partially offset
by the subdued demand prospects for the telecom equipment
industry, PTL's customer and supplier concentration, and its
large working capital requirements, leading to its high bank
limit utilization, and tightly matching accruals against
repayment obligations
Outlook: Stable
CRISIL believes that PTL's business risk profile will remain
under pressure over the medium term because of subdued demand
from the telecom industry. However, the company's weak liquidity
is expected to be supported by regular funding from promoters
through equity infusion and unsecured loans will help the company
to service its debt in a timely manner as happened in past. The
outlook may be revised to 'Positive' if PTL achieves more-than-
expected topline growth and profitability, leading to large cash
accruals and improvement in liquidity. Conversely, the outlook
may be revised to 'Negative' if the company does not receive
unsecured loans from its promoters in a timely manner, or if it
undertakes any large, debt-funded capital expenditure programme
or investment.
About Prima Telecom
Incorporated in 1995, PTL is a Lalit Suri group company that
assembles and markets telecom access products manufactured by
multinational corporations. The primary products that the company
imports, assembles, localises and sells are routers,
multiplexers, converters, modems and wireless radio. The company
also provides installation and support services to its customers.
PTL tied up with Loop Telecommunication International, Inc (Loop
Telecom) in 2000 and was a value-added reseller from 2000 to
2005. Thereafter, PTL signed a technology and development
agreement with Loop Telecom and established a small assembling
unit in 2005. It has been engaged in limited assembly operations
along with marketing and maintenance support for Loop Telecom
products to various Indian fixed-line and mobile telecom
operators.
PTL's largest customers include Tata Teleservices Ltd, Tata
Teleservices Maharashtra Ltd and Reliance Communication Ltd. PTL
also markets specific products of companies such as Easy
Broadband Technology Ltd, T&W. PTL has also tied up with other
equipment manufacturers, such as Veraz Networks Incorporated and
Celtro Ltd, over the past three years to supply telecom equipment
for upcoming new generation networks. PTL has entered the passive
telecom infrastructure domain by tying up with Omnishelter Srl,
which designs and manufactures shelters. PTL is part of the Lalit
Suri group, which is engaged in various businesses, including
hospitality (Bharat Hotels), auto components (Subros Ltd),
telecomm equipment (Fibcom India Ltd, rated 'CRISIL BB-
/Stable/CRISIL A4+'), automobile retailing (Rohan Motors and
Godawri Motors), and education.
PTL's profit after tax (PAT) and net sales are estimated at INR7
million and INR374 million respectively for 2011-12 (refers to
financial year, April 1 to March 31); the company reported a PAT
of INR8 million on net sales of INR522 million for 2010-11.
R.R.THULASI: CRISIL Upgrades Rating on INR34MM Loans to 'BB+'
-------------------------------------------------------------
CRISIL has upgraded its rating on the long-term bank loan
facilities of R.R.Thulasi Builders India Pvt Ltd to 'CRISIL
BB+/Stable' from 'CRISIL BB-/Stable'; the rating on the company's
short-term bank facilities has been reaffirmed at 'CRISIL A4+'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 55 CRISIL A4+ (Reaffirmed)
Cash Credit 20 CRISIL BB+/Stable (Upgraded
from CRISIL BB-/Stable)
Long-Term Loan 14 CRISIL BB+/Stable (Upgraded
from CRISIL BB-/Stable)
The upgrade reflects CRISIL's belief that RR Thulasi will sustain
its improved financial risk profile over the medium term marked
by healthy gearing and debt protection metrics. The company's
debt protection metrics have improved in 2011-12 (refers to
financial year, April 1 to March 31) driven by a healthy
operating profitability of 12 per cent and low reliance on bank
debt to fund its working capital requirements. RR Thulasi's
interest coverage ratio and net cash accruals to total debt ratio
are estimated at 9.81 times and 1.54 times, respectively, for
2011-12. The upgrade also reflects CRISIL's belief that RR
Thulasi's revenues and cash accruals will grow at a steady rate,
given the company's healthy order book and established
relationships with its key customers.
Outlook: Stable
CRISIL believes that RR Thulasi will continue to benefit over the
medium term from its promoters' experience in the construction
industry and its healthy order book. The outlook may be revised
to 'Positive' if the company reports significant and sustained
growth in its revenues, supported by diversification in its
revenue profile. Conversely, the outlook may be revised to
'Negative' if RR Thulasi faces time or cost overruns in the
implementation of its on-going projects, reports sharp decline in
its order book or profitability, or if large borrowings for
capital expenditure weaken its financial risk profile.
About RR Thulasi
RR Thulasi was set up in 1972 as a partnership firm named R
Rangaswamy and Company; it was reconstituted as a private limited
company in February 2006. The company is owned by Mr. V S
Selvaraaj and his family. RR Thulasi undertakes civil
construction activities in Tamil Nadu. The company undertakes
construction of buildings for engineering and medical colleges,
industries, and for government departments such as Public Works
Department, Tamil Nadu, and Airport Authority of India.
RR Thulasi reported, on a provisional basis, a profit after tax
(PAT) of INR58 million on an operating income of INR1125 million
for 2011-12 (refers to financial year, April 1 to March 31),
against a PAT of INR39 million on an operating income of
INR919 million for 2010-11.
SOBHAGIA SALES: Delay in Loan Payment Cues CRISIL Junk Ratings
--------------------------------------------------------------
CRISIL has downgraded its ratings on the bank facilities of
Sobhagia Sales Pvt Ltd to 'CRISIL D/CRISIL D' from 'CRISIL
B/Stable/CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 78 CRISIL D (Downgraded from
CRISIL B/Stable)
Letter of Credit 20 CRISIL D (Downgraded from
CRISIL A4)
Term Loan 56.4 CRISIL D (Downgraded from
CRISIL B/Stable)
The downgrade reflects instances of delay by SSPL in servicing
its term loans; the delays have been caused by weakening in
liquidity because of its large, debt-funded capital expenditure
(capex) and large working capital requirements.
SSPL has very small scale of operations in the highly fragmented
and competitive ready-made garments industry. It has a average
financial risk profile, marked by average debt protection
metrics, and is susceptible to volatility in raw material prices.
However, the company benefits from its established track record
and diversified end-user profile.
About Sobhagia Sales
SSPL was established in 1993 by Mr. Raj Awasthy. The company
manufactures ready-made garments for men, women, and kids at its
unit in Ludhiana (Punjab). It sells its products through its 52
exclusive showrooms, and its associate company, Classic Wears
Pvt. Ltd. (CWPL's) seven showrooms and franchisees in Punjab and
Delhi. Its products are sold under its brands, Sportking and
Mentor.
SSPL's profit after tax (PAT) and net sales are estimated at
INR25.7 million and INR1040.5 million for 2011-12 (refer to
financial year, April 1 to March 31); the company reported a PAT
of INR16.4 million on net sales of INR805.1million for 2010-11.
SYRMA TECHNOLOGY: Inadequate Info Cues Fitch to Migrate Ratings
---------------------------------------------------------------
Fitch Ratings has migrated India-based electronics manufacturer
Syrma Technology Private Limited's 'Fitch BB+(ind)' National
Long-Term rating with Stable Outlook to the non-monitored
category.
The ratings have been migrated to the non-monitored category due
to lack of adequate information, and Fitch will no longer provide
ratings or analytical coverage of Syrma. The ratings will remain
in the non-monitored category for a period of six months and be
withdrawn at the end of that period. However, in the event the
issuer starts furnishing information during this six-month
period, the ratings could be reinstated and will be communicated
through a rating action commentary.
Fitch has also migrated Syrma's bank loan ratings to the non-
monitored category as follows:
-- INR270m fund-based working capital limits: migrated to
National Long-Term 'Fitch BB+(ind)nm' from 'Fitch BB+(ind)'
and National Short-Term 'Fitch A4+(ind)nm' from 'Fitch A4+
(ind)'
-- INR249.1m non-fund-based working capital limits: migrated to
National Long-Term 'Fitch BB+(ind)nm' from 'Fitch BB+(ind)'
and National Short-Term 'Fitch A4+(ind)nm' from 'Fitch A4+
(ind)'
-- INR20m term loans: migrated to National Long-Term 'Fitch BB+
(ind)nm ' from 'Fitch BB+(ind)'
WEST HARYANA: CARE Cuts Rating on INR434.19cr Loans to 'CARE BB'
----------------------------------------------------------------
CARE revises the rating assigned to the bank facilities of
West Haryana Highways Projects (Private) Ltd.
Amount
Facilities (INR crore) Ratings
----------- ----------- -------
Long-term Bank Facilities 407.66 CARE BB Revised
(Senior Debt) from CARE BBB-
Long-term Bank Facilities 26.53 CARE BB Revised
(Subordinate debt) from CARE BBB-
Rating Rationale
The revision in rating takes into account the delay in project
implementation and weakened credit profile of the promoter. The
rating also factors in inherent revenue risks associated with
toll-based road project. The rating is however, supported by
project implementation skills of the promoter, fixed-price
Engineering, Procurement and Construction (EPC) contract and
significant physical and financial progress achieved on the
project.
Completion of project without further time and cost overrun and
growth in toll rates and traffic as envisaged constitute the key
rating sensitivities.
WHHP was incorporated as a Special Purpose Vehicle (SPV) by Era
Infra Engineering Ltd. (EIEL - rated "CARE BBB/CARE A3") and
Karam Chand Thapar & Bros (Coal Sales) Ltd. (KCT(CS)) for
implementation of toll based road project on Build, Operate and
Transfer (Toll) basis from Delhi- Haryana Border to Rohtak
Section of NH-10 in Haryana. KCT(CS) holds 51% stake in WHHP
while EIEL holds the remaining 49%.
The concession period for the project is 25 years (inclusive of a
24 month construction period) from the appointed date, which is
May 03, 2008. WHHP has entered into a fixed time fixed price EPC
contract with EIEL for INR 500.1 crore. The original project
cost is estimated at INR 586.0 crore being funded by equity
aggregating INR 146.5 crore, senior debt aggregating INR 410.2
crore and balance by subordinated debt aggregating INR29.3 crore.
The Concessionaire shall pay, after 13 yrs from the COD, a
premium in the form of additional concession fee equal to 2% of
the total toll collected during that year and increasing by 1%
for each
subsequent year of the concession period.
As on May 31, 2012, WHHP has achieved cumulative physical and
financial progress of 96.1% and 93.8% respectively. As on May 31,
2012, WHHP has spent INR642 cr on the project (as against
original total project cost of INR586.05 cr) funded by senior
term debt of INR406.3 cr, subordinate debt of INR29.1 cr, equity
aggregating INR146.5 cr and unsecured loans from promoters
aggregating INR60 cr.
====================
N E W Z E A L A N D
====================
BIG THUMB: Chinese Restaurant Placed Into Liquidation
-----------------------------------------------------
The Dominion Post reports that Wellington Chinese restaurant Big
Thumb is up for sale after it was put into liquidation for Inland
Revenue Department debts on August 1.
The Allen Street restaurant is a favorite among local diners in
the CBD for its yum cha, dim sum, Sichuan and Cantonese dishes.
Owner Laurence Chan told The Dominion Post he and the chefs would
keep the restaurant running until a new owner was found.
"The restaurant is keeping going until someone takes over. We are
still working here until it is sold," the report quotes Mr. Chan
as saying.
Profitco liquidator Murray Allen will be managing the sale, The
Dominion Post adds.
CRAFAR FARMS: Court Denies Sir Michael Fay Appeal on Farm Sale
--------------------------------------------------------------
Adam Bennett at nzherald.co.nz reports that the Court of Appeal
has dismissed the Sir Michael Fay led group appeal to block the
sale of the 16 Crafar dairy farms to China's Shanghai Pengxin
group.
In last month's hearing, nzherald.co.nz recalls, lawyers for
Sir Michael's Independent Crafar Farms Purchase Group argued the
focus of the Overseas Investment Office's (OIO) appraisal of
Shanghai Pengxin's relevant experience and acumen should be on
the man in ultimate control of the corporation, billionaire Jiang
Zhaobai.
nzherald.co.nz relates that they said the OIO had not analysed
whether Mr Jiang's investments in sheep and soybean farms gave
him the relevant experience to invest in the 16 Crafar dairy
farms.
But in its decision, the Court of Appeal observed that the
business experience and acumen requirement under the Overseas
Investment Act was "broadly worded and flexible," nzherald.co.nz
relays.
And while Mr. Jiang and other leading figures in Shanghai Pengxin
had no experience in dairy farming, they ensured their local
subsidiary Milk NZ "entered into appropriate arrangements with
others (such as Landcorp) to access industry specific
experience," nzherald.co.nz recalls adds.
The report notes that the court considered that Land Information
Maurice Williamson and Associate Finance Minister Jonathan
Coleman - who signed off on the OIO's decision earlier this year
- "were entitled to conclude that the controlling individuals had
business experience relevant to the proposed investment".
According to the report, the Court also noted that even if it had
found the ministers' decision was deficient due Shanghai
Pengxin's lack of relevant experience, the Court was "unlikely to
have exercised its discretion to grant a remedy."
"In light of the ministers unchallenged conclusion that the
investment would bring substantial and identifiable benefit to
New Zealand, the ministers would undoubtedly decide to grant
consent again if the matter was referred back to them," the
court, as cited by nzherald.co.nz, said.
The Fay group's appeal was its second legal attempt to block the
purchase of the farms by the Chinese company.
SOUTH ISLAND: Shuts Five South Island Offices; Cuts 17 Jobs
-----------------------------------------------------------
Michael Berry, writing for stuff.co.nz, reports that the South
Island Credit Union (NZCU South) is closing five South Island
offices and shedding up to 17 jobs due to sluggish loan activity
and slow membership growth.
The New Zealand-owned financial co-operative will lay off up to
17 employees in the restructure, the report says.
In Christchurch, the Palms branch will close and the staff will
be merged with the Hornby office, which was opened about a year
ago, reports stuff.co.nz .
The two Invercargill offices will merge, while the Lawrence,
Hokitika and Westport branches will close.
The changes will happen September 7.
According to the report, Chief executive Andrew Leys said the co-
operative could not support such a large number of branches with
so few customers. The West Coast and Lawrence offices serviced
fewer than 700 customers, Mr. Ley said.
stuff.co.nz relates that the decline in loan activity, coupled
with fewer new customers and a drop in visits to branches, meant
keeping smaller offices open was "extremely difficult."
The restructure does not affect NZCU organisations in the North
Island, the report adds.
=================
S I N G A P O R E
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GENPACT LIMITED: Moody's Assigns 'Ba2' Corp. Family Rating
----------------------------------------------------------
Moody's Investors Service has assigned a Ba2 corporate family
rating to Genpact Limited.
At the same time, Moody's has assigned a provisional (P)Ba2
foreign currency rating to the proposed senior secured credit
facility to be drawn by three of Genpact's indirectly, wholly-
owned subsidiaries under its guarantee and that of other material
subsidiaries.
The outlook for both ratings is stable.
This is the first time Moody's has assigned ratings to Genpact.
The assignment of a definitive debt rating is subject to a review
of the final documentation, and to successful issuance of the
proposed debt.
Ratings Rationale
"Genpact's Ba2 Corporate Family Rating reflects its favourable
market position in the upper, mid-sized tier of BPO service
providers. Originally a captive unit of General Electric, Genpact
has grown its Global Client business through strong organic
growth and with small bolt-on acquisitions. This has resulted in
a broad spread of customers both by industry and geography, while
the locations of Genpact's delivery centres are similarly
diverse," says Alan Greene, a Moody's Vice President -- Senior
Credit Officer.
"However, the US$550 million purchase of Headstrong in mid-2011
heralded the company's ambitions to grow revenue at a faster rate
than the 15% growth seen in recent years, resulting in the
conversion of a traditional cash surplus into net debt, and
leading to expectations of a permanently leveraged balance sheet,
albeit at modest levels," adds Mr. Greene, who is Moody's Lead
Analyst for Genpact.
The Ba2 rating recognizes the relatively high margins achieved by
Genpact resulting from its relatively more complex work and its
primary focus on business process analysis and improvement rather
than IT. The ability to deepen existing relationships coupled
with the close control of costs have been supportive of margins
so far, but competitive pressure both for client business and for
staff remains intense. Currently accounting for 27% of turnover,
the amount of work from GE is guaranteed until 2016, although
present activity is well above the contractual minimum.
"Multi-year contracts and the gradual deepening of involvement in
clients' activities together with a manageable staff attrition
rate, offer some protection to cash flows, in what is a highly
competitive and fragmented market. The acquisition strategy aims
not only to expedite revenue growth but also to introduce new
clients and new domains, while moving into more analytical work
and IT involvement. However, this strategy, in the short to
medium term, may lead to negative free cash flow and weakening
credit metrics, and management will need to guard against
excessive slippage," adds Greene.
The rating of the senior secured credit facility is solely based
on, and reflects Genpact's, as Parent guarantor, Ba2 corporate
family rating. The guarantor group comprises companies
substantially wholly-owned by Genpact which together account for
more than 75% of consolidated revenue, assets and cash flow.
The loan proceeds will be used to pay down existing facilities
and to fund a one time, special USD500m dividend to all
shareholders, to be paid by the end of September. The original
private equity shareholders have agreed to sell a 30% bloc of
shares to Bain Capital Partners, the transaction completing after
the dividend is paid. Bain Capital will become the single largest
shareholder and assume the board representation of the sellers.
The stable outlook reflects Moody's expectations that Genpact's
business model remains consistent despite the change of
substantial shareholders, and the company is able to grow its
business without over-depending on acquisitions. Under this
scenario, margins should be maintained or improved and the
company can maintain its market share in a highly competitive
market.
The rating could be upgraded in the near to medium term if the
company maintains overall EBITDA margins around 20% while not
overpaying for acquired business, as it holds or modestly
improves its relative market share in BPO, and revenues grow
beyond US$2 billion. Credit metrics that could support this would
include i) total debt/EBITDA around 2.5x to 3.0x; or ii)
FCF/total debt of around 15% or better, on a sustained basis.
On the other hand, the rating could face downward pressure if
free cash flow is adversely impacted by a decline in revenues and
rising costs, or by an over-aggressive acquisition policy or by
further large shareholder payments. This could be accompanied by
i) a total debt/EBITDA ratio in excess of 3.5x; or ii) FCF/total
debt falls below 10%, on a sustained basis.
The principal methodology used in rating Genpact was the Global
Business & Consumer Service Industry Rating Methodology published
in October 2010.
Genpact Limited is a Bermuda incorporated company providing
business process management, analytics and technology services
for businesses in banking, insurance, manufacturing, telecom and
technology sectors. With some 58,000 employees worldwide, the
majority of whom are based in India, and around 600 clients, it
is a leading player in the BPO sector and increasingly extending
into other areas such as technology services. Listed on NYSE
since 2007, Genpact achieved revenue of US$1.6 billion and pre-
tax income of US$232 million in the year to December 2011.
GENPACT LIMITED: S&P Assigns 'BB+' LT Corp. Credit Rating
---------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB+' long-term
corporate credit rating to business process outsourcing (BPO)
service provider Genpact Ltd. The outlook is stable.
"At the same time, we assigned our 'BB+' issue rating to the
company's proposed $925 million senior secured bank loan facility
including $675 million seven-year term loan and $250 million
five-year revolver credit facility. We also assigned our recovery
rating of '3' to the loan to indicate our expectation of
meaningful (50%-70%) recovery in the event of default," S&P said.
"The rating on the bank loan depends on our review of the final
issuance documentation," S&P said.
"The rating on Genpact reflects the highly fragmented and
increasingly competitive BPO industry. It also reflects the
company's significant segment concentration and high exposure to
U.S.-based clients, whose outsourcing budgets and spending remain
uncertain," said Standard & Poor's credit analyst Abhishek
Dangra. "We also view the change in Genpact's financial policies
to increase its leverage in an asset-light industry as a rating
weakness. The company announced a large one-time special
dividend. Genpact's good market position in finance and
accounting services, higher value-added offerings, and stronger
EBITDA margins compared with most peers' moderate these
weaknesses."
"The intensifying competition in an already fragmented market
characterizes the BPO industry. Competition comes from both
domestic and international BPO service providers and larger
integrated information technology (IT) players with growing BPO
operations. Uncertainty surrounds outsourcing budgets and
spending, particularly in the key markets of the U.S. and Europe,
due to an economic slowdown and indirect effects of fiscal
tightening. Genpact derives over 70% of its revenues from the
U.S.," S&P said.
"Genpact is exposed to high concentration in the banking,
financial services, and insurance (BFSI) vertical, which accounts
for about 48% of the company's revenues. We view Genpact's client
concentration risk as moderate despite the company's top 10
clients (including General Electric Co.: GE; AA+/Stable/A-1+)
contributing more than 50% of its revenues. This is based on
diversified offerings to different entities of GE, which together
account for 30% of revenues," S&P said.
"In our view, Genpact has an 'intermediate' financial risk
profile. We expect the company to strictly adhere to its
financial policies (of a net debt-to-EBITDA ratio of 2x) and
proposed financial covenants under the oversight of an
independent board. We also expect Genpact to restrict its special
dividend to 2012 as planned. We view Genpact's liquidity is
"adequate", as defined in our criteria," S&P said.
"Genpact benefits from it market position as one of the leading
players providing financial and accounting outsourcing services.
We believe the company's higher-value added offerings across
segments compared with peers is a competitive advantage," S&P
said.
"The stable outlook reflects our expectation that Genpact will
sustain its operating performance; generating about 20% EBITDA
margins," said Mr. Dangra. "We also expect the company to
maintain financial discipline, despite a one-time large dividend
payout and potential mid-sized acquisitions."
"We may lower the rating if the company's FFO-to-debt ratio falls
below 30% and the ratio of adjusted debt to EBITDA increases to
more than 2.75x. This may happen because of: (1) Genpact
following a more shareholder friendly financial policy leading to
further dividend payments or share buybacks; or (2) the company's
adjusted EBITDA margin dropping sharply to below 15%."
"We believe an upgrade is unlikely over the next 12-18 months.
Nevertheless, we may raise the rating if Genpact significantly
improves its scale of operations, increasing the business
diversity by reducing dependence on the BFSI vertical. The
company should sustain its margins and maintain its financial
ratios and financial policy in line with our current
expectations," S&P said.
*********
Tuesday's edition of the TCR-AP delivers a list of indicative
prices for bond issues that reportedly trade well below par.
Prices are obtained by TCR-AP editors from a variety of outside
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latest balance sheets publicly available a day prior to
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*********
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-
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Copyright 2012. All rights reserved. ISSN: 1520-9482.
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*** End of Transmission ***