/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/131125.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, November 25, 2013, Vol. 16, No. 233 Headlines A U S T R A L I A BETTINA LIANO: Fashion Firm Placed Into Liquidation WALTON GROUP: State Probe into Firm's AU$49 Million Failure C H I N A CHINA NATURAL: Plan Filing Exclusivity Extended Until February TIANNENG POWER: Fitch Cuts Long-term Issuer Default Rating to BB- I N D I A AMIT IRON: ICRA Reaffirms 'BB+' Rating on INR10cr Cash Credit ARTEFACT INFRA: CRISIL Reaffirms 'B' Rating on INR5MM Loan ASHRULY ENGINEERING: CRISIL Puts 'B+' Ratings to INR70MM Loans BASHIR OIL: CRISIL Reaffirms 'B-' Rating on INR50MM Cash Credit BHARAT INDUSTRIAL: CRISIL Suspends 'D' Ratings on INR125MM Loans CAPITAL VENTURES: ICRA Assigns 'B' Ratings to INR22cr Loans ELECTRONIC RELAYS: CRISIL Puts 'B+' Ratings on INR30MM Loans G.G. TRONICS: ICRA Lowers Ratings on INR15cr Loans to 'D' GANGA DIAGNOSTIC: ICRA Assigns 'B' Rating to INR20.61cr Loan GOLDEN INDIA: ICRA Assigns 'BB' Rating to INR15cr Loans INDO RAMA: ICRA Cuts Ratings on INR737.5cr Loans to 'D' INFO SERVICES: CRISIL Suspends 'BB-' Ratings on INR52MM Loans INTERCONTINENTAL POLYMERS: ICRA Puts BB- Rating on INR7.5cr Loans J.S.S. STEELITALIA: CRISIL Cuts Ratings on INR200MM Loans to 'B+' JAI SHANKER: ICRA Reaffirms/Assigns 'B+' Rating on INR7cr Loans JANKI RICE: ICRA Reaffirms 'B' Ratings on INR12.87cr Loans LEXUS MOTORS: ICRA Assigns 'BB-' Rating to INR69.5cr Loan LOHR INDIA: CRISIL Assigns 'D' Ratings to INR130MM Loans LOK-BETA PHARMA: CRISIL Reaffirms B+ Rating on INR57.5MM Loan MAHALAXMI DYES: ICRA Upgrades Ratings on INR11cr Loans to 'BB' MEHRAB N IRANI: CRISIL Reaffirms 'B' Rating on INR60MM Loan MFAR CONSTRUCTIONS: CRISIL Cuts Ratings on INR800MM Loans to BB+ MICROPARK LOGISTICS: CRISIL Suspends B Ratings on INR215MM Loans MRIDUL ENTERPRISES: ICRA Reaffirm BB/A4 Rating on INR34.28cr Loan PINAX STEEL: CRISIL Cuts Ratings on INR199.5MM Loans to 'BB' PRET STUDY: ICRA Suspends 'BB/A4' Rating on INR20cr LT Loan PROGRESSIVE SHARE: ICRA Reaffirms 'BB+' Rating on INR2.4cr Loans ROHIL FOODS: ICRA Reaffirms/Assigns 'B' Rating to INR20cr Loans S.S.S. RICE: CRISIL Suspends 'B+' Ratings on INR98.5MM Loans SAI BHASKAR: CRISIL Suspends 'D' Ratings on INR270MM Loans SAMARTH AGRO: ICRA Rates INR5.5cr Long-Term Loan at 'B+' SESA MINERALS: CRISIL Reaffirms 'BB' Ratings on INR400MM Loans SHANKAR MAHADEV: ICRA Revises Rating on INR3cr Loan to 'BB-' SHANTI GOPAL: ICRA Rates INR40cr LT Loans at 'BB' SRI GITA: ICRA Assigns 'B+' Ratings to INR9.7cr Loans SRI MAHALAXMI: CRISIL Suspends 'B' Ratings on INR84MM Loans SRI MAHAVIR: ICRA Assigns 'BB-' Ratings to INR8.95cr Loans SWAGAT DEVELOPERS: ICRA Assigns 'BB' Rating to INR20cr Loans V.K. GUPTA: CRISIL Reaffirms 'C' Rating on INR40MM Cash Credit VAIBHAV JEWELLERS: ICRA Reaffirms 'BB' Rating on INR14cr Loan VEDANTA RESOURCES: 1stHalf Loss Belies Improvements to Business J A P A N KK ATAMI: Moody's Withdraws 'C' Ratings on Class B & C Notes TOKYO ELECTRIC: To Cut More Than 1,000 Jobs in 2014 TOKYO ELECTRIC: Plans to Sell Hospital to Tokyo Tatemono M O N G O L I A MONGOLIAN MINING: Moody's Lowers CFR & Bond Ratings to Caa2 S I N G A P O R E PACNET LTD: Moody's Says 3Q Operating Results Support B2 CFR S O U T H K O R E A HANJIN GROUP: Urged to Prepare Survival Plan KOOKMIN BANK: Faces FSS Special Inspections Over Irregularities - - - - - ================= A U S T R A L I A ================= BETTINA LIANO: Fashion Firm Placed Into Liquidation --------------------------------------------------- Rachel Wells at The Sydney Morning Herald reports that Melbourne designer Bettina Liano has become Australia's latest fashion victim. The renowned designer confirmed to Fairfax Media on November 22 that her 24-year-old business had been placed into liquidation, the report says. SMH relates that the announcement comes just days after reports high-profile Australian designer Kit Willow had been sacked from the brand that bears her name and in the wake of a string of other famous fashion departures including Collette Dinnigan, Lisa Ho, Alannah Hill and Kirrily Johnston. The exodus of some of Australia's biggest names has left the fate of the nation's fashion industry under a cloud as international labels continue to steal market share. According to the report, Ms. Liano, whose business went into administration in September for the second time in two years, said overseas competition and "local manufacturing issues" had made doing business in Australia harder than ever. Creditors voted to wind up Bettina Liano Pty Ltd in late October after rejecting a paltry offer by the Apparel Group to buy the brand, SMH notes. The Apparel Group -- which also owns a majority share of the Willow label -- threw the designer a lifeline in 2011 when it signed an agreement to produce her range under a licensing arrangement. Ms. Liano said her relationship with the group had ended, but she was in negotiations and "working towards a future for the Bettina Liano brand," the report adds. Richard Albarran -- ralbarran@hallchadwick.com.au -- Brent Kijurina -- bkijurina@hallchadwick.com.au -- and David Ross -- dross@hallchadwick.com.au -- of Hall Chadwick were appointed Administrators of Bettina Liano Pty Limited on Sept. 24, 2013. WALTON GROUP: State Probe into Firm's AU$49 Million Failure ------------------------------------------------------------ Gympie Times reports that the Queensland Government will fund a public examination in the courts of the Walton Group and directors of the company that secured its key projects after it collapsed owing creditors AU$49 million. Walton (Qld) and Walton Construction are in liquidation after going into administration on October 3 owing Sunshine Coast sub- contractors AU$3.9 million for work done on and material supplied to the Nambour Coles project, according to Gympie Times. The report notes that Queensland Housing Minister Tim Mander said funding would be provided through the Building Services Authority to allow a full examination of events leading up to the collapse. Minister Mander was responding to claims by Nicklin Independent Peter Wellington that the Newman government was quick to enact bikie laws but slow to protect Queensland sub-contractors owed AU$27 million by Walton, the report notes. "I am deeply concerned about the effect of this collapse on industry participants and am working with the building regulator and the Commonwealth Government to ensure we leave no stone unturned," the report quoted Mr. Mander as saying. Allegations against Walton are currently being investigated by the BSA, the liquidator and the Australian Securities and Investment Commission, the report relays. "To assist in this process the Queensland Government, through the BSA, will commit the necessary funds to enable the liquidator to undertake a public examination of Walton and the key executives of Peloton in the Supreme Court," Mr. Mander said, the report discloses. The report relates that Peloton Builders Pty Ltd, set up by executives of Melbourne-based Mawson Group business advisors, has changed its name to Tantallon Construction Pty Ltd after complaints from the Sydney-based developer and project management company, the Peloton Group. Peloton Group director Rob Welborn said his company had received more than 100 calls from sub-contractors demanding payment as well as calls from credit rating agencies and bankers, the report notes. The report adds that Walton Sub-Contractors Alliance spokesman Les Williams of Coast firm WK Civil said Mr Mander's announcement was a positive. ========= C H I N A ========= CHINA NATURAL: Plan Filing Exclusivity Extended Until February -------------------------------------------------------------- BankruptcyData reported that the U.S. Bankruptcy Court approved China Natural Gas' motion to extend the exclusive period during which the Company can file a Chapter 11 plan and solicit acceptances thereof through and including Feb. 4, 2014 and April 7, 2014, respectively. As previously reported, the Debtor said an extension of the Exclusive Periods is necessary and appropriate to allow it to complete its efforts to negotiate with key constituents and develop and seek confirmation of a Chapter 11 Plan. About China Natural Headquartered in Xi'an, Shaanxi Province, P.R.C., China Natural Gas, Inc., was incorporated in the State of Delaware on March 31, 1999. The Company through its wholly owned subsidiaries and variable interest entity, Xi'an Xilan Natural Gas Co., Ltd., and subsidiaries of its VIE, which are located in Hong Kong, Shaanxi Province, Henan Province and Hubei Province in the People's Republic of China ("PRC"), engages in sales and distribution of natural gas and gasoline to commercial, industrial and residential customers through fueling stations and pipelines, construction of pipeline networks, installation of natural gas fittings and parts for end-users, and conversions of gasoline-fueled vehicles to hybrid (natural gas/gasoline) powered vehicles at 0ptmobile conversion sites. On Feb. 8, 2013, an involuntary petition for bankruptcy was filed against the Company by three of the Company's creditors, Abax Lotus Ltd., Abax Nai Xin A Ltd., and Lake Street Fund LP (Bankr. S.D.N.Y. Case No. 13-10419). The Petitioners claimed that they have debts totaling $42,218,956.88 as a result of the Company's failure to make payments on the 5% Guaranteed Senior Notes issued in 2008. Adam P. Strochak, Esq., at Weil, Gotshal & Manges, LLP, in Washington, D.C., represents the Petitioners as counsel. China Natural Gas, Inc., sought dismissal of the involuntary petition but in July 2013, it consented to the entry of an order for relief under Chapter 11 of the U.S. Code. The last regulatory filing listed assets as of June 30 of $29.5 million and liabilities totaling $82.5 million. TIANNENG POWER: Fitch Cuts Long-term Issuer Default Rating to BB- ----------------------------------------------------------------- Fitch Ratings has downgraded China-based Tianneng Power International's Long-Term Issuer Default Rating (IDR) and senior unsecured rating to 'BB-' from 'BB'. The Outlook is Stable. The downgrade reflects Tianneng's higher-than-expected financial leverage level resulting from deteriorating profit margin and substantial capex, and the lack of long-term funding for expansion. Meanwhile Fitch has withdrawn the 'BB(EXP)' rating for the battery manufacturer's proposed offshore US-dollar bond because the company has not decided whether to proceed with the issuance. Key Rating Drivers: Worse Profitability, Higher Leverage: Tianneng at the end of 2012 initiated price cuts to gain more market share amid an industry consolidation. But this initiative is more extensive and is taking longer than Fitch expected. The average sales price (ASP) for the first half of 2013 was CNY97.7/unit, a 12.6% drop from a year earlier. Fitch expects Tianneng's EBITDAR margin for 2013 to drop to around 5% (2012: 12%; 2011: 18%), and financial leverage (measured by FFO adjusted net leverage) to rise to over 4x (2012: 2x; 2011: 0.5x). Fitch expects Tianneng's 2014 leverage ratio to stay above 2x and EBITDAR margin below 10%, because it is likely to continue the price war through 2014, which will squeeze ASPs of its main products, lead-acid batteries used on electric bicycles. Profitability has also been hurt by the lower margin in the original equipment manufacturing (OEM) portion of Tianneng's production. The company has outsourced 35% of its 2013 output because of its limited capacity. Substantial Capex: Tianneng plans to continue with substantial capex in 2014 to add more production capacity, which would add to its leverage. Fitch estimates capex for 2014 will reach CNY600mn- 900mn from around CNY700mn-800mn in 2013. Lack of Long-Term Funding: Tianneng did not issue the proposed US dollar bond, and as a result, only CNY395m out of its CNY3bn total borrowings as of June 2013, was long-term debt. Fitch does not view liquidity as a risk for Tianneng because its significant fixed assets may be used as collateral and its inventory may be easily liquidated for cash. The company has not had problems rolling over short-term debt in the past. However, Fitch views Tianneng's lack of long-term funding as a constraint for its credit profile, especially in the current relatively tight liquidity conditions in China. Market-Leading Position Intact: Tianneng remains one of the two largest players (the other being Chaowei Power Holdings, which has similar market share) in the Chinese lead-acid battery market. The two leaders together account for around 60% of total domestic sales volume. Tianneng has maintained this market-leading position through its established nationwide distribution and service network with 1,650 distributors as of June 2013. In addition, the Chinese government's policy to phase out smaller, less advanced lead-acid battery production facilities to reduce lead pollution generated during the manufacturing process has accelerated industry consolidation, which benefits industry leaders such as Tianneng. Rating Sensitivities: Negative: Future developments that may, individually or collectively, lead to negative rating action include: -- worsening position in core markets -- EBITDAR margin below 8% on a sustained basis -- FFO adjusted net leverage above 3x on a sustained basis Positive: Future developments that may, individually or collectively, lead to positive rating action include: -- EBITDAR margin above 15% on a sustained basis -- securing long-term funding for development -- FFO adjusted net leverage below 2x on a sustained basis ========= I N D I A ========= AMIT IRON: ICRA Reaffirms 'BB+' Rating on INR10cr Cash Credit ------------------------------------------------------------- ICRA has reaffirmed the long term rating of '[ICRA]BB+' to the INR10.00 crore cash credit facility of Amit Iron Private Limited. ICRA has also reaffirmed the short term rating of '[ICRA]A4+' to the INR37.00 crore channel finance facility of AIPL. The outlook on the long term rating is Stable. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based Limits- 10.00 [ICRA]BB+/Stable Cash Credit re-affirmed Fund Based Limits- Channel Finance 37.00 [ICRA]A4+ re-affirmed The ratings take into account the experience of the promoters in the trading business and the company's established relationship with Tata Steel Ltd, the company being the primary distributor of "Tata Steelium" and "Tata Astrum" in West Bengal and one of the largest distributors for TSL in Eastern India. The ratings are also supported by the consistent growth in turnover and profits of the company in the last three years. The ratings are, however, constrained by the limited value addition, given the trading nature of AIPL's business, which results in low profitability and the high working capital requirement of AIPL, with the company undertaking cash purchases from TSL and in turn extending credit period to its customers. The increased working capital intensity of the business in FY13 owing to stretched receivables adversely impacts the liquidity profile of the company. High working capital debt to support the growth in business on one hand and low profitability on the other, has led to increased gearing levels and depressed debt coverage indicators for the company. ICRA however notes that the principal repayment obligation of the company is low since almost the entire debt on the books is on account of working capital loans. Based out of Kolkata, West Bengal, AIPL is an exclusive distributor of TSL and is engaged in the distribution of steel coils and sheets. It also has a captive centre for the cutting and processing of steel coils and sheets, which enables it to meet specific requirements of its customers. AIPL is one of the largest distributor of TSL in Eastern India and the primary distributor of "Tata Steelium" products in West Bengal, accounting for the majority of TSL's sales. TSL has come up with a new brand, "Tata Astrum", for its HR products in November 2012 and AIPL is also the largest distributor of Tata Astrum in the East. Recent Results The company reported an operating income (OI) of INR348.41 crore and a PAT of INR1.22 crore during FY13 as compared to an OI of INR277.04 crore and a PAT of INR0.97 crore during FY12. ARTEFACT INFRA: CRISIL Reaffirms 'B' Rating on INR5MM Loan ----------------------------------------------------------- CRISIL's ratings on the bank loan facilities of Artefact Infrastructure Ltd continue to reflect AIL's limited track record of operations in the execution of road construction projects and in mining activity, and stretched working capital cycle. The ratings also reflect the company's below-average financial risk profile marked by a small net worth and a high gearing. These rating weaknesses are partially offset by the commencement of AIL's part-toll/part-annuity road project in July 2012, which provides moderate revenue visibility; and benefits derived from diversification of revenues from different businesses. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 100 CRISIL A4 (Reaffirmed) Cash Credit 5 CRISIL B/Stable (Reaffirmed) Outlook: Stable CRISIL believes that AIL will continue to benefit over the medium term from its promoters' extensive experience in the infrastructure business. The outlook may be revised to 'Positive' if the company registers healthy and sustained growth in its revenues along with steady operating profitability, while it retains its cash accruals for funding incremental working capital requirements. The outlook may be revised to 'Negative' if AIL registers deterioration in its financial risk profile on account of significantly larger-than-expected debt-funded capital expenditure or in case of significant cost overruns in its on- going projects, resulting in deterioration in its operating profitability, and higher dependence on bank facilities for managing its working capital requirements. AIL, based in Nagpur (Maharashtra), is a wholly owned subsidiary of Artefact Projects Ltd (APL; rated 'CRISIL D/CRISIL D'). AIL was formed in 2006. The company is primarily involved in the engineering, procurement, and construction segment for road development projects, and in mining activities. It is currently operating a build, operate and transfer project in Madhya Pradesh. AIL reported a profit after tax (PAT) of INR13.2 million on net sales of INR253.8 million for 2012-13, against a PAT of INR0.7 million on net sales of INR126 million for 2011-12. ASHRULY ENGINEERING: CRISIL Puts 'B+' Ratings to INR70MM Loans -------------------------------------------------------------- CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to the long-term bank facilities of Ashruly Engineering Pvt Ltd. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Proposed Long-Term 4.5 CRISIL B+/Stable (Assigned) Bank Loan Facility Long-Term Loan 28.0 CRISIL B+/Stable (Assigned) Letter of Credit 25.0 CRISIL A4 (Assigned) Bank Guarantee 5.0 CRISIL A4 (Assigned) Cash Credit 37.5 CRISIL B+/Stable (Assigned) The rating reflects AEPL's average capital structure, marked by a modest net worth and high gearing, and its small scale of and working capital intensive operations. These rating weaknesses are partially offset by the extensive industry experience of the AEPL's promoters, and the funding support that it receives from them. For arriving at its rating, CRISIL has treated the interest- bearing unsecured loans of INR20.4 million, as on March 31, 2013, extended to AEPL by its promoters and their associates as neither debt nor equity, as these loans would be retained in the business until the bank loans are repaid. Outlook: Stable CRISIL believes that AEPL will continue to benefit over the medium term from its promoters' extensive industry experience and their funding support. The outlook may be revised to 'Positive' in case of significant improvement in the company's scale of operations and profitability, along with efficient working capital management. Conversely, the outlook may be revised to Negative' if AEPL's financial risk profile weakens, most likely because of lower-than-expected cash accruals, larger-than-expected working capital requirements, or any unanticipated debt-funded capital expenditure. Incorporated in 2007, AEPL manufactures fabricated steel and alloy components. Headquartered in Pune (Maharashtra), AEPL is promoted by Mr. Nandkumar Gaikwad and his wife Mrs. Nandini Gaikwad. BASHIR OIL: CRISIL Reaffirms 'B-' Rating on INR50MM Cash Credit --------------------------------------------------------------- CRISIL's rating to the bank facility of Bashir Oil Mills. The rating reflects BOM's weak financial risk profile marked by a small net worth, high gearing and weak debt protection metrics. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 50 CRISIL B-/Stable (Reaffirmed) The rating is also constrained by the modest scale of operations and the susceptibility of the margins to the volatility in input prices. These rating weaknesses are partially offset by the benefits that the firm derives from its promoters' extensive industry experience. Outlook: Stable CRISIL believes that BOM will continue to benefit over the medium term from its promoters' extensive industry experience. The outlook may be revised to 'Positive' if the firm significantly increases its scale of operations, while it improves or maintains its profitability margins and capital structure. Conversely, the outlook may be revised to 'Negative' in case the company's financial risk profile deteriorates, owing to decline in revenues, margins, or deterioration in its working capital cycle, or in case the company undertakes any larger-than-expected debt-funded capex programme. BOM was set up in 1937 as a proprietorship concern of Mr. Ishak Chini. It was later converted to partnership firm with other family members in the mid- 1960s. It manufactures and trades in cotton seed, cotton seed oil, and cotton seed cake; it also trades in pulses and grain. The firm procures cotton seeds from ginners. It has a crushing capacity of 100 tons per day. BOM currently has six partners (all members of the same family). Mr. Jabbar Chini (son of Mr. Ishak Chini) and his son, Mr. Irfan Chini, look after the day-to-day operations of the firm. BOM's crushing unit and registered office are in Warora (Maharashtra). BOM reported a profit after tax (PAT) of INR2 million on net sales of INR215 million for 2012-13 (refers to financial year, April 1 to March 31), against a PAT of INR1 million on net sales of INR158 million for 2011-12. BHARAT INDUSTRIAL: CRISIL Suspends 'D' Ratings on INR125MM Loans ----------------------------------------------------------------- CRISIL has suspended its ratings on the bank facilities of Bharat Industrial Works (Bhilai) Pvt Ltd. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 45 CRISIL D Suspended Cash Credit 60 CRISIL D Suspended Letter of Credit 5 CRISIL D Suspended Term Loan 15 CRISIL D Suspended The suspension of ratings is on account of non-cooperation by BIW with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, BIW is yet to provide adequate information to enable CRISIL to assess BIW's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key credit factor in its rating process and non-sharing of information as a first signal of possible credit distress, as outlined in its criteria 'Information Availability Risk in Credit Ratings' BIW is engaged in steel structural and equipment fabrication primarily for the steel and power sector. The company does not undertake any turnkey projects and mainly carries out fabrication work for engineering, procurement, and construction contractors. BIW's clientele includes Thermax Ltd, SMS India Pvt Ltd, Siemens Ltd, and MECON Ltd. However, BIW faces customer concentration in its revenue profile, as almost 90 per cent of its revenues are contributed by its top four customers. BIW procures steel products, its key raw material, from SAIL, the Jindal group, as well as from local traders and manufacturers. CAPITAL VENTURES: ICRA Assigns 'B' Ratings to INR22cr Loans ----------------------------------------------------------- ICRA has assigned rating of '[ICRA]B' to the INR22.00 crore fund based bank facilities (including proposed limits of INR15.50 crore) of Capital Ventures Private Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based Limit- 1.00 [ICRA]B assigned Cash Credit Fund Based Limits- 5.50 [ICRA]B assigned Foreign Documentary Bill Purchase/Foreign Usance Documentary Bill Discounted Unallocated-Untied 15.50 [ICRA]B assigned Limit The rating action takes into account the high competitive intensity in the company's business of trading of fast moving consumer goods (FMCG) primarily in export markets. Presence of a number of players in the industry limits the operating profitability of CVPL and also other players in the industry. In addition, rating concerns emanate from the weak financial profile of the company marked by a levered capital structure and also inadequate coverage indicators. Debt levels of the company have increased consistently to fund the working capital requirements of a growing scale of operations. Low margins coupled with relatively low scale of operations have resulted in inadequate coverage indicators for the company. In addition, the utilization of sanctioned working limits is high with overutilization in a few months indicating limited cushion available for operations. Cash flows from operations for the company have remained weak and in fact worsened consistently in the last four fiscal years. The rating however, takes into consideration the long experience of the promoters in this business, low operating risk on account of diversified product profile comprising of branded products and company's established relationship with suppliers which ensures timely availability of products and scheduled completion of orders. ICRA notes that favorable demand outlook for FMCG products in India provide growth opportunities for players including CVPL. Going forward, the ability to improve its profitability and scale of operations and also choice of funding for incremental working capital requirements will remain key rating drivers for the company. Incorporated in 1999, CVPL is involved in trading of fast moving consumer goods (FMCG) products like personal care products, detergent and fabric care products, home care products, grocery, beverages, snacks, candy, dietary supplements, pharma and tobacco. The company procures the products from various manufactures, dealers, wholesaler and distributors in the domestic market and exports to countries like Australia, Singapore, Dubai, Pakistan, Netherland, USA, UK and others. Recent Results The company has reported a net profit of INR0.33 crore on an operating income of INR81.22 crore during 2012-13; as compared to a net profit of INR0.18 crore on an operating income of INR51.39 crore during 2011-12. ELECTRONIC RELAYS: CRISIL Puts 'B+' Ratings on INR30MM Loans ------------------------------------------------------------ CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to the bank loan facilities of Electronic Relays (India) Pvt Ltd. The rating reflects ERI's below-average financial risk profile, marked by weak capital structure. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Letter of Credit 12.8 CRISIL A4 (Assigned) Cash Credit 20.0 CRISIL B+/Stable (Assigned) Bank Guarantee 5.0 CRISIL A4 (Assigned) Bill Discounting 10.0 CRISIL B+/Stable (Assigned) The rating also factors susceptibility of its operating margin to volatility in input prices. These rating weaknesses are partially offset by the experience of the promoters in manufacturing of relays and its established customer base. Outlook: Stable CRISIL believes that ERI will continue to benefit over the medium term from its promoters' extensive experience in manufacturing of relays. The outlook may be revised to 'Positive' if the company scales up its operations significantly, while it maintains profitability, or in case of improvement in its capital structure. The outlook may be revised to 'Negative' if ERI's working capital cycle is stretched, or if the company generates low accruals or undertakes large debt-funded capital expenditure programmes leading to further weakening of its financial risk profile. Incorporated in 1979, ERI manufactures solid state relays, input/output modules, and other automotive electronic products. ERI's day-to-day operations are managed by Mr. G B Umesh. G.G. TRONICS: ICRA Lowers Ratings on INR15cr Loans to 'D' --------------------------------------------------------- ICRA has revised the long-term rating assigned to INR10.50 crore term loan and INR4.50 crore cash credit limits of G.G. Tronics India Private Limited from '[ICRA]B+' to '[ICRA]D'. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Term Loan 10.50 [ICRA]D revised Cash Credit 4.50 [ICRA]D revised The revision in ratings reflects recent delays in debt servicing by the company due to stretched liquidity position resulting from high receivables. The rating continues to be constrained by leveraged capital structure and high client concentration with top 3 clients accounting for 65.35% of revenue in FY13. Nevertheless, the rating favourably factors in the long track record of the company of over 2 decades in the railway signalling products business and reputed client profile with Indian Railways & Invensys Rail Systems as its customers. G.G. Tronics India Private Limited was established in 1991 and is involved in the business of designing, manufacturing and supplying of real time embedded systems for transport and industrial domain and other electrical and electronic equipments. The company is mainly supplying its products to Indian railways. The company has its manufacturing facilities and R&D expand center located in Peenya Industrial Area in Bangalore spread over 58,000 sq. ft. GIPL was certified for ISO 9001:2000 in 2002 and was later certified with ISO 9001:2008 standard in 2009. Recent Results As per the audited results for FY 2013, the firm reported a net profit of INR0.89 crore on turnover of INR40.72 crore as against net profit of INR4.51 crore on turnover of INR40.74 crore during FY 2012(audited results). GANGA DIAGNOSTIC: ICRA Assigns 'B' Rating to INR20.61cr Loan ------------------------------------------------------------ ICRA has assigned a long term rating of '[ICRA]B' to the INR20.61 crore fund based bank facilities of Ganga Diagnostic and Medical Research Center Private Limited. ICRA has also assigned a short term rating of '[ICRA]A4' to the INR12.00 crore non fund based bank facility of GDMRL. The non fund based facility is a sublimit of the fund based facility of the company. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based Limit- 20.61 [ICRA]B assigned Term Loan Non Fund Based (12.00) [ICRA]A4 assigned Limits The ratings are constrained by the small scale of operations of the company at present coupled with losses incurred due to a low turnover and high operational and financial expenses, the loss making operations coupled with a high gearing also result in weak debt protection indicators of the business. The ratings are however supported by the demonstrated equity support from the promoters, who are part of the Vandana group of Raipur, Chhattisgarh. The ratings also derive comfort from the collaborations made by the company with reputed hospitals in the near vicinity for referral cases. Incorporated in 2010, GDMRL is engaged in providing radiology and pathology diagnostic services. The commercial operations of the company started in 2012 and as such 2012-13 was the first year of operations of the company. The promoters of the company are part of the Vandana Group of companies based in Raipur, Chhattisgarh, the operations of the Vandana group are looked after by Mr Subhash Agarwal and Mr Ashok Agarwal, who are also the directors of GDMRL. The principal area of operations of the Vandana group includes steel manufacturing. Recent Results GDMRL reported a profit after tax (PAT) of (Rs 4.49) crore in 2012-13 on the back of an operating income (OI) of INR2.79 crore. 2012-13 was the first year of commercial operations of the company. GOLDEN INDIA: ICRA Assigns 'BB' Rating to INR15cr Loans ------------------------------------------------------- ICRA has assigned a long term rating of '[ICRA]BB' to INR15.00 crore fund based facilities of Golden India Expotrade Private Limited. The Outlook on the long term rating has been assigned a stable outlook. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund based Limits 15.00 [ICRA]BB (stable) The rating is constrained by high competitive pressures and low profitability inherent to trading business which has led to weak debt protection metrics. The ratings also take into account agro climatic risks, which can affect the availability of agro products in adverse weather conditions. Further ICRA takes note of the regulatory risks arising out of government policy restrictions on export of non-basmati rice, which can affect the turnover and profitability of the company. The rating however, favorably takes in account significant growth in the turnover during FY12 and FY13 (ytd) post lifting of ban on exports of non basmati rice by GoI, the resultant improvement in financial risk profile of the company as evident by improvement in the profitability and return indicators. Further the expansion in the retail segment is expected to augur well for company's revenue as well as profitability in future. The rating also draw strength from the benefits arising out of established customer relationship of its group company (BSRK) which is into trading of agro based commodities since last two decades and strong pending order book of INR~330 crore, which provides revenue visibility in the near term. Further, ICRA also notes the proximity of the processing and packing unit to Kandla Port which results in low transportation costs. Going forward, GIEPL's ability to achieve adequate growth in the turnover and improve its profitability indicators (both in Trading and Retail segment) while maintaining a prudent capital structure will be the key rating sensitivities. Golden India Expotrade Private Limited (formerly known as BSRK Overseas Private Limited) was established in 2007, is engaged in trading of agro based commodities and runs 3 retail stores in Delhi selling FMCG products, footwear, apparels and daily need products. For the trading business the company is a member of Agricultural and Processed Food Export Development Authority of India (APEDA), Federation of Indian Export Organisations (FIEO), having registered under Micro, Small or Medium Enterprises (SME). Recent Results During the financial year 2012-13, the Company reported a profit after tax (PAT) of INR1.39 crore on an operating income of INR247.04 crore as against PAT of INR0.54 crore on an operating income of 87.56 crore in FY12. INDO RAMA: ICRA Cuts Ratings on INR737.5cr Loans to 'D' ------------------------------------------------------- The ratings assigned to the INR737.5 crore (reduced from INR840 crore) bank facilities of Indo Rama Synthetics (India) Limited have been downgraded to '[ICRA]D' both on long-term (LT) and short-term (ST) scale from '[ICRA]BB' and '[ICRA]A4'. The [ICRA]BB (Stable)/[ICRA]A4 ratings for the INR97.1 crore unallocated limits of IRSL have been withdrawn at the company's request. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Term Loans 20.5 Downgraded to [ICRA]D from [ICRA]BB(Stable) Fund-based and 717.0 Downgraded to [ICRA]D Non-fund based (both on LT and ST Scale) Limits from [ICRA]BB(Stable)/ [ICRA]A4 Unallocated 0.0 [ICRA]BB(Stable)/[ICRA]A4 Limits (reduced from 97.1) (on LT and ST scale) Withdrawn The revision in the ratings reflects the stretched liquidity position of the company as reflected by devolvement of IRSL's LC's, which have remained overdue for more than a month, in the recent past due to high foreign exchange (forex) loss, sustained pressure on margins and low capacity utilisation resulting from constrained raw material supply from a leading supplier over the last few months. ICRA notes that the margins of the company may remain low in the near term due to low capacity utilisation resulting from oversupply for polyester yarns in the domestic market. However, the company is taking several steps like to improve capacity utilisation from the current low levels, liquidation of part of investments etc to improve its liquidity position and debt servicing. The ratings continue to factor in vulnerability of IRSL's profits to cyclicality of the global polyester industry; location disadvantage being away from ports and key domestic customer markets; limited presence in the value added products; sensitivity of profitability to changes in custom duty rates; and moderately high financial risk profile of IRSL with high volatility in the profits, moderate debt protection metrics and reliance on non-operating income to meet debt servicing requirement in the past. ICRA has also considered the established track record of more than two decades and long experience of the promoters in the polyester segment; economies of scale driven being the second largest polyester producer in India; initiatives taken by IRSL to improve its cost structure and fiscal benefits available to the company. Indo Rama Synthetics (India) Ltd. has been in the polyester business since 1989. The company expanded its capacities of partially oriented yarn (POY) and polyester staple fibre (PSF) in late 1990's and FY 2007 to support the growth in volumes, and is currently the second largest polyester producer with aggregate capacity of 6,10,050 MTPA of POY, PSF, fully drawn yarn (FDY) and polyester (PET) textile grade chips and 96,544 MMTPA capacity of drawn texturised yarn (DTY). IRSL has one of the largest single location domestic polyester plants, situated at Nagpur, Maharashtra. IRSL's shareholding pattern as on September 30, 2013 constituted 64.25% with promoters (primarily OP Lohia family and group companies), 14.16% with Banks & Financial Institutions and remaining with others. During 2012-13, IRSL reported operating income and profit after tax (PAT) of INR2910.1 crore and INR41.3 crore respectively; while the company had reported INR2968.8 crore and INR32.0 crore respectively in 2011-12. During Q1 2013-14, IRSL reported operating income and loss after tax of INR716.3 crore and INR30.0 crore respectively. INFO SERVICES: CRISIL Suspends 'BB-' Ratings on INR52MM Loans ------------------------------------------------------------- CRISIL has suspended its ratings on the bank facilities of Info Services (IS). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 42 CRISIL BB-/Stable Suspended Long-Term Loan 6.5 CRISIL BB-/Stable Suspended Proposed Long-Term Bank Loan Facility 3.5 CRISIL BB-/Stable Suspended The suspension of ratings is on account of non-cooperation by IS with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, IS is yet to provide adequate information to enable CRISIL to assess IS's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key credit factor in its rating process and non-sharing of information as a first signal of possible credit distress, as outlined in its criteria 'Information Availability Risk in Credit Ratings'. Set up as a proprietorship concern in 1999 and reconstituted as a partnership firm in 2008, IS is an exclusive service provider for IBM Global Services India Pvt Ltd. IS's key corporate clients include Bharti Airtel Ltd (rated CRISIL AA+/Stable/CRISIL A1+), Vodafone India Ltd (rated CRISIL AA/Stable/CRISIL A1+), Indian Bank (rated CRISIL AAA/Stable) and Tata Consultancy Services who accounted for around 50 per cent of its revenues during 2010-11. The firm was promoted by Mr. Shivadas who manages the day to day operations. INTERCONTINENTAL POLYMERS: ICRA Puts BB- Rating on INR7.5cr Loans ----------------------------------------------------------------- ICRA has assigned a long-term rating of '[ICRA]BB-' and a short- term rating of '[ICRA]A4' to the fund-based, proposed and non-fund based limits of Intercontinental Polymers Pvt. Ltd. aggregating to INR9.00 Cr. The long-term rating has a stable outlook. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based Limit- 0.96 [ICRA]BB- (stable) assigned Term Loan Fund based limit- Cash credit 3.00 [ICRA]BB- (stable) assigned Proposed limit- Term Loan 3.54 [ICRA]BB- (stable) assigned Non-fund based limit-Letter of Credit 1.50 [ICRA]A4 assigned The ratings are constrained by the company's small scale of operations in the engineering thermoplastics compounding business and weak financial risk profile as characterized by its low profitability margins and high working capital intensity of operations. The ratings are also constrained by the intense competitive pressures from other established players in the plastics industry and exposure of the company's profitability margins to adverse fluctuations in raw material prices owing to high inventory levels maintained by the company. Further, the project implementation risk remains high on account of the large scale of debt-funded expansion. The ratings, however, consider favorably the long and established track record of the company's promoters in the engineering thermoplastics industry, diversified product profile and established relationship with its suppliers and customers. Incorporated in 1997, Intercontinental Polymer Private Limited is a Mumbai-based company engaged in manufacturing of engineering thermoplastic compounds like Polypropylene (PP) compounds, Polyphenylene Oxide (PPO) compounds, Acrylonitrile Butadiene Styrene (ABS) Compounds, HIPS compounds and alloys. The company is an Indo-US joint venture between India based Mr. Raju Desai and NGI, USA promoted by Mr. Saurabh Naik, an industrialist in the USA engaged in similar line of business. The company procures raw materials like Nylon, polypropylene and polystrol from the market, and then manufactures the plastic compounds through extrusion process by adding additives like pigments and colors. The goods produced by the company form an input for the injection moulders and are used in Automobile industry, Electrical and Electronics Industry, Industrial engineering components & furniture, IT & Telecom, White goods. IPPL has a manufacturing plant located in Daman with a production capacity of 4000 MT per annum. It is also setting up a new plant at Dahej, Gujarat with a production capacity of 20,000 MT per annum which would be commissioned in phases with the first phase expected to be commissioned by March 2015. For FY 2013, the company reported Profit after Tax (PAT) of INR0.11 Cr. on an operating income of INR7.36 Cr. For 6M FY 2014, the company has reported Profit before tax of INR0.11 Cr. on an operating income of INR5.78 Cr. (unaudited provisional numbers). J.S.S. STEELITALIA: CRISIL Cuts Ratings on INR200MM Loans to 'B+' ----------------------------------------------------------------- CRISIL has downgraded its ratings on the bank facilities of J.S.S. Steelitalia Ltd to 'CRISIL B+/Stable/CRISIL A4' from 'CRISIL BB- /Stable/CRISIL A4+'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 130 CRISIL B+/Stable (Downgraded from 'CRISIL BB-/Stable') Letter of credit & 50 CRISIL A4 (Downgraded from Bank Guarantee 'CRISIL A4+') Proposed Long-Term 70 CRISIL B+/Stable (Downgraded Bank Loan Facility from 'CRISIL BB-/Stable') The rating downgrade reflects CRISIL believes that JSS Steelitalia Limited's business risk profile will come under pressure over the medium term. This is because of the lower-than-expected increase in its order book for Ferratic and Austenitic tubes, leading to weak revenue visibility in 2013-14 (refers to financial year, April 1 to March 31). Slowdown in the end user industry coupled with rejection of its new Ferratic grades tubes by original equipment manufacturers (OEM) because of some technical glitches led to profit after tax (PAT) losses of around INR15.3 million in 2012-13. This is in contrast to CRISIL's projection of the company's profitability for the said financial year. In 2012-13, the company's revenues witnessed a year-on-year (y-o-y) decline of around 10 per cent, to around INR633 million from INR715 million in 2011-12. Also, CRISIL believes that JSS's revenues will decline further in 2013-14, given the small order book, and remain around INR560 million. Declining scale of operations and inability of the company to realign its fixed cost overheads in line with its topline have led to y-o-y PAT losses of around INR108.6 million for the five years ended 2008-09. CRSIL believes that JSS's business risk profile will remain constrained over the medium term, till the company significantly scales up its operations, backed by regular large orders from OEMs. CRISIL's ratings on the bank facilities of JSS continue to reflect the experience of JSS's promoters in the steel industry, and the operational and financial support that the company receives from its JV partners. The ratings also reflect the company's moderate net worth and low gearing. These rating strengths are partially offset by its average scale of operations, susceptibility to volatility in raw material prices, and exposure to intense industry competition. Furthermore, JSS's cash accruals have been depressed, because of low operating profitability, resulting in weak debt protection metrics and liquidity. Outlook: Stable CRISIL believes that JSS's liquidity will remain weak over the medium term, mainly because of its depressed cash accruals, driven by a low operating margin. CRISIL, however, believes that the company will benefit from the financial support that it receives from its JV partners. The outlook may be revised to 'Positive' if JSS significantly improves its liquidity, supported by higher- than-expected cash accruals. Conversely, the outlook may be revised to 'Negative' if the liquidity weakens further because of lower-than-expected sales or operating profitability. The outlook may also be revised to 'Negative' in case of discontinuation of financial, technological, and operational support that JSS receives from its JV partners. JSS, set up in 2007, is a 51:33:16 JV between Inox; Jindal Stainless Steelway Ltd; and Jensita Holding Ltd, Cyprus. JSS commenced operations in October 2008; it manufactures stainless steel tubes and pipes. Its facility at Gurgaon (Haryana) has capacity to manufacture around 35,000 tonnes of stainless steel tubes and pipes per annum. JAI SHANKER: ICRA Reaffirms/Assigns 'B+' Rating on INR7cr Loans --------------------------------------------------------------- ICRA has reaffirmed '[ICRA]B+' rating to the INR7.00 crore (enhanced from INR6 crore) fund based limits of Jai Shanker Rice and General Mills. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund based limits 7.00 [ICRA]B+ reaffirmed/assigned The rating reaffirmation takes into account the highly competitive and low value additive nature of the rice milling industry which results in limited pricing power vis-a-vis consumers and suppliers (paddy farmers). These factors, coupled with the small size of the firm's rice milling unit have resulted in relatively weak profitability indicators and given the fundamental industry dynamics, ICRA does not expect any change in the near future. Further, the firm's working capital intensive operations have been largely debt funded resulting in high gearing and weak debt coverage indicators. ICRA also factors in the vulnerability of firm's operations to agro climatic risks, which can affect the pricing and availability of paddy. ICRA however draws comfort from the proximity of the mill to a major rice growing area which results in easy availability of paddy and stable demand outlook given that India is a major consumer (rice being an important staple of the Indian diet) and exporter of rice. Jai Shanker Rice and General Mills was established in 1996 as a partnership firm by Mr. Ram Swaroop Jindal, Mr. Ramesh Kumar , Mr Hind Sarover, Mr Prince Pal and Mrs. Vidhya Devi. The firm is engaged in milling of basmati rice. The firm's milling unit is based out of Cheeka. The firm has an installed capacity of 2 ton/hour for milling of rice. The key raw material for the firm is basmati paddy. Paddy is mostly procured from the "mandi" of Karnal and Cheeka (Haryana) during the paddy buying season i.e. September to December every year. However, if required firm also buys paddy from the market in off season period. Recent Results The firm reported a profit after tax of INR0.0072 crores on an operating income of INR23.14 crores in 2012-13 as against a profit after tax of INR0.0049 crores on an operating income of INR22.79 crores in 2011-12. JANKI RICE: ICRA Reaffirms 'B' Ratings on INR12.87cr Loans ---------------------------------------------------------- ICRA has reaffirmed '[ICRA]B' rating assigned to the INR1.87 crore term loans and INR11.00 crore long term fund based facilities of Janki Rice & Solvent Industries Private Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Term Loans 1.87 [ICRA]B reaffirmed Cash Credit 11.00 [ICRA]B reaffirmed The reaffirmation of the rating takes into account the modest scale of operations and the low profit margins and weak return indicators of the company due to the inherently low value addition in the business and stretched capital structure. The rating further takes into account the highly competitive and fragmented nature of the industry and vulnerability of profit margins to volatility in paddy prices which are exposed to seasonality, variations in crop harvest and regulatory risks. The rating, however, continues to positively consider the longstanding experience of the promoters in the rice milling and trading business; the strategic location of the plant which provides easy access to raw material and the favourable demand outlook for rice and rice bran in the domestic and export markets. Janki Rice & Solvent Industries Private Limited was incorporated in 2008 by Ramwani and Vaghela families and is engaged in the business of milling par boiled rice. The promoters have around two decades of experience in the rice milling industry and operate other associate concerns engaged in similar business. The company operates from its plant located at Sanand (near Ahmedabad, Gujarat) and started commercial production in FY10. The company's production capacity stands at 192 TPD (Tonne per Day). Recent Results For the financial year 2012-13, the company reported an operating income of INR67.64 crore and profit after tax of INR0.29 crore as against an operating income of INR55.63 crore and profit after tax of INR0.19 crore for the financial year 2011-12. LEXUS MOTORS: ICRA Assigns 'BB-' Rating to INR69.5cr Loan --------------------------------------------------------- ICRA has reaffirmed the '[ICRA]BB-' rating to the INR99.50 crore (enhanced from INR30 crore) fund based facilities of Lexus Motors Limited. The outlook on the long term rating is stable. ICRA has also assigned an '[ICRA]A4' rating to the INR0.50 crore non-fund based bank facility of LML. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based Limits- 30.00 [ICRA]BB- (Stable) Cash Credit reaffirmed Fund Based Limits- 69.50 [ICRA]BB- (Stable) Cash Credit (e-DFS) assigned Non Fund Based 0.50 [ICRA]A4 assigned Limits-Bank Guarantee The ratings factor in the promoters' experience in the auto dealership business, with a track record of over two decades and the established market position of LML in Kolkata as an authorized dealer of Tata Motors Limited for commercial vehicles (CV) and passenger cars (PC). The ratings are, however, constrained by LML's weak financial profile characterized by an aggressive capital structure and depressed level of coverage indicators which may be further impacted in coming years on account of the on-going debt funded capital expenditure. The ratings also take into consideration the intense competition and inherently low margins in the auto dealership business, on account of the industry dynamics and the commission structure decided by the principal; though some improvement in the operating margin were witnessed in the last two years. ICRA also notes the de-growth in operating income witnessed during 2012-13 over the preceding year owing to the weak macro-economic environment; and the demand conditions are expected to remain subdued in the near-term due to factors including, among others, weak investment sentiment, slowing industrial activity and increasing fuel prices. LML, incorporated in 1991, is TML's authorized dealer for the sale of its entire range of commercial vehicles and passenger cars, as well as for services of passenger cars and sale of spares in and around Kolkata, West Bengal. LML has five showrooms, four workshops and six customers connect points spread across Kolkata for TML's vehicles. LML also has two showrooms for JLR vehicles at Kolkata and Cuttack. The company also trades in pre-owned cars. Recent Results The company has reported a net profit of INR0.84 crore on an operating income of INR655.43 crore during 2012-13; as compared to a net profit of INR0.66 crore on an operating income of INR775.28 crore during 2011-12. LOHR INDIA: CRISIL Assigns 'D' Ratings to INR130MM Loans -------------------------------------------------------- CRISIL has assigned its 'CRISIL D' rating to the bank loan facilities of Lohr India Automotive Pvt Ltd (LIAPL; part of Transport Solutions group). The rating reflects delays by LIAPL in servicing its debt on account of its weak liquidity driven by working capital intensive operations. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 95 CRISIL D (Assigned) Working Capital Demand Loan 35 CRISIL D (Assigned) The rating also reflects LIAPL's average financial risk profile, constrained by leveraged capital structure, working capital intensive operations and susceptibility to downturns in end-user industry. These rating weaknesses are partially offset by the promoters' experience in the manufacturing industry and international collaboration coupled with established customer relationships. For arriving at the rating, CRISIL has combined business and financial risk profiles of LIAPL, Transport Solutions India Pvt Ltd and HLM India Pvt Ltd, together referred to as the Transport Solutions group. This is because all these entities are engaged in similar line of business and have significant intercompany transactions; also, TSIPL has extended corporate guarantees towards the bank loan facilities of LIAPL and HIPL. The Transport Solutions group, established in 2006, manufactures carriers used in logistic services. The group manufactures tippers and trailers under TSIPL, car and truck carries under LIAPL and refrigerated carriers under HIPL. The promoters of the group have over four decades of experience in manufacturing industry. LOK-BETA PHARMA: CRISIL Reaffirms B+ Rating on INR57.5MM Loan ------------------------------------------------------------- CRISIL's ratings on the bank facilities of Lok-Beta Pharmaceuticals (I) Pvt Ltd continue to reflect LPIPL's small scale of operations, and its large working capital requirements. These rating weaknesses are partially offset by the extensive experience of LPIPL's promoters in the pharmaceutical industry, and its above-average financial risk profile marked by modest net- worth, moderate total outside liabilities to tangible net-worth ratio and above-average debt protection metrics. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Packing Credit 57.5 CRISIL B+/Stable (Reaffirmed) Letter of Credit 30.0 CRISIL A4 (Reaffirmed) Bank Guarantee 2.5 CRISIL A4 (Reaffirmed) Outlook: Stable CRISIL believes that LPIPL will maintain its established market position in the pharmaceutical industry over the medium term, supported by its promoters' extensive industry experience and its established relationships with customers. The outlook may be revised to 'Positive' if there is a substantial and sustained improvement in the company's revenues and profitability margins, or there is a sustained improvement in its working capital management. Conversely, the outlook may be revised to 'Negative' in case of a steep decline in LPIPL's profitability margins, or there is a significant deterioration in its capital structure most likely on account of larger-than-expected working capital requirements or large debt-funded capital expenditure. LPIPL was incorporated in 2002, promoted by Mr. Alok Kumar. The company manufactures injectables and generic drugs for export to Russia, Ukraine, and other Commonwealth of Independent States countries. MAHALAXMI DYES: ICRA Upgrades Ratings on INR11cr Loans to 'BB' -------------------------------------------------------------- ICRA has upgraded the long-term rating from '[ICRA]BB-' to '[ICRA]BB' and reaffirmed the short-term rating at '[ICRA]A4' for the INR7.00 crore fund-based limits, INR9.00 crore non-fund-based limits, INR0.50 crore proposed limits and INR3.50 crore interchangeable limits of Mahalaxmi Dyes & Chemicals Limited. The long-term rating has a stable outlook. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based Limits 7.00 [ICRA]BB (Stable); upgraded from [ICRA]BB- (Stable) Non-Fund Based 9.00 [ICRA]A4 reaffirmed Limits Interchangeable 3.50 [ICRA]BB (stable)upgraded/ Limits [ICRA]A4 reaffirmed Proposed Limits 0.50 [ICRA]BB (stable)upgraded/ [ICRA]A4 reaffirmed The upgrade in the long-term rating takes into account the improvement in the capital structure of the company following the infusion of INR3.56 crore of equity by the promoters in March 2013, coupled with the repayment of INR4.30 crore of term loans in the current fiscal along with healthy growth in operating income. The ratings also positively factor in the long experience of the promoters and established presence of the company in trading and distribution of chemicals and building materials; and low revenue concentration risk on account of the diversified product portfolio and diversified customer base. The ratings, however, continue to remain constrained by the thin profit margins, and weak coverage indicators of the company. Further, the high working capital intensity has resulted in a tight liquidity position of the company as reflected in the high utilisation of its working capital bank limits. The ratings also take into account the exposure of the company's profitability to movement in raw material prices and foreign exchange fluctuations. Mahalaxmi Dyes & Chemicals Ltd. is engaged in the business of import and distribution of various chemicals, plastics and building materials (primarily float glass). The company, incorporated in the year 1974, started the business of domestic trading of chemicals. Later in early 1990s, the company expanded its business to trading of imported chemicals. The company also obtained agency for Formic Acid distribution from Rashtriya Chemicals & Fertilisers Ltd. and for Sodium Nitrite with BASF of Germany. MDCL is a closely-held company with entire shareholding held by Mr. C. V. Shah and family. Mr. C. V. Shah, presently Chairman of MDCL, has an experience of three decades in the business of trading of chemicals. For FY 2012, the company reported Profit after Tax (PAT) of INR0.33 crore on an operating income of INR50.16 crore. In FY 2013, the company has reported PAT of INR0.56 crore on an operating income of INR74.50 crore. MEHRAB N IRANI: CRISIL Reaffirms 'B' Rating on INR60MM Loan ----------------------------------------------------------- CRISIL's rating continue to reflect Mehrab N Irani & Company weak financial risk profile, marked by a small net worth, a high gearing, and inadequate debt protection metrics, modest scale of operations, and susceptibility to adverse regulatory changes. These rating weaknesses are partially offset by MNIC's longstanding presence in the liquor distribution business and its established relations with its principals. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 60 CRISIL B/Stable (Reaffirmed) Outlook: Stable CRISIL believes that MNIC will continue to benefit from its long standing experience in the liquor distributing business, over the medium term. The outlook may be revised to 'Positive' in case of a sustained improvement in the firm's profitability resulting into better liquidity profile. Conversely, the outlook may be revised to 'Negative' in case of any significant deterioration in profitability resulting into lower accruals and stress in liquidity profile. Update MNIC's revenue for 2012-13 of INR502 million were largely in line with expectations and witnessed moderate growth of about 10 per cent from the previous year. The growth in sales comes on the back of expansion of its product portfolio with addition of Red Bull in the year. MNIC continues to generate operating level margins in its usual range of 3 to 4% (3.7% in 2012-13). Going forward, MNIC's revenues are expected to continue to witness moderate growth with increasing consumption of Alcohol in India and the profit margins are expected to be around the current levels. The total outside liability to total net worth ratio (TOL/TNW) as on March 31, 2013 continues to be aggressive at 10 times due to working capital intensive operations of MNIC. MNIC has about 2 months of debtors and inventory as against only a month's credit offered by the suppliers. The liquidity profile of the firm continues to be constrained with fully utilised bank limits and modest cash accruals. MNIC is expected to generate insufficient cash accruals of INR4 million as against repayment of INR12 million for the year 2012-13, the repayments are expected to be supported by capital infusion by the partners (in line with the first 3 quarters of 2013-14). MNIC reported a profit after tax (PAT) of INR3 million on net sales of INR502 million for 2012-13 (refers to financial year, April 1 to March 31), against a PAT of INR3 million on net sales of INR446 million for 2011-12. MNIC is a proprietorship firm, which was set up by Mr. Mehrab Irani in 1981 as a wholesaler distributor for Mohan Meakin Ltd (main brands include Old Monk rum and Golden Eagle beer) in Pune (Maharashtra). Subsequently, the firm surrendered the licence and is now the exclusive dealer of Diaggeo India, Carlsberg India, Sula Vineyards and Red Bull India in Pune. MNIC is also one of the dealers for Allied Blenders and Distilleries in Pune. MFAR CONSTRUCTIONS: CRISIL Cuts Ratings on INR800MM Loans to BB+ ---------------------------------------------------------------- CRISIL has downgraded its ratings on the bank loan facilities of Mfar Constructions Pvt Ltd to 'CRISIL BB+/Negative/CRISIL A4+' from 'CRISIL BBB-/Negative/CRISIL A3'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 737.80 CRISIL BB+/Negative (Downgraded from 'CRISIL BBB-/Negative') Letter of Credit 1,100.00 CRISIL A4+ (Downgraded from 'CRISIL A3') Proposed Short- 500.00 CRISIL A4+ (Downgraded from Term Bank Loan 'CRISIL A3') Facility Proposed Long-Term 62.20 CRISIL BB+/Negative (Downgraded Bank Loan Facility from 'CRISIL BBB-/Negative') The ratings downgrade reflect CRISIL's belief that Mfar's liquidity profile will be constrained by the continuing stretch in its working capital position, marked by high debtors and inventory. This is indicated by an increasing trend in Mfar's gross current assets (GCAs) over the past 5 years; the company's GCAs increased to 337 days of sales in 2012-13 (refers to financial year, April 1 to March 31) from 224 days of sales in 2009-10. Consequently, despite regular fund infusions by the promoters, Mfar's bank limits continue to be highly utilised, thereby relatively stretching the company's liquidity profile, as compared to CRISIL's expectations. The ratings on the bank loan facilities of Mfar continue to reflect the company's moderate capital structure and revenue visibility, supported by a healthy order book. These rating strengths are partially offset by Mfar's working-capital-intensive operations, and the geographical concentration in its revenue profile. Outlook: Negative CRISIL believes that Mfar's liquidity will remain constrained, by its substantial working capital requirements over the medium term. The ratings may be downgraded if the company's liquidity is restricted by lower-than-expected cash accruals, or sizeable working capital requirements. Conversely, the outlook may be revised to 'Stable' if the pressure on Mfar's liquidity eases, driven by larger-than-expected cash accruals, along with a significant equity infusion and efficient working capital management. Mfar was established in Bengaluru (Karnataka) in April 1996. The company undertakes residential and commercial real estate construction. Mfar operates predominantly in South India. Mfar reported a profit after tax (PAT) of INR35.2 million on net sales of INR3.50 billion for 2012-13, against a PAT of INR27.9 million on net sales of INR3.10 billion for 2011-12. MICROPARK LOGISTICS: CRISIL Suspends B Ratings on INR215MM Loans ---------------------------------------------------------------- CRISIL has suspended its ratings on the bank facilities of Micropark Logistics Private Limited. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 35 CRISIL A4 Suspended Cash Credit 167.5 CRISIL B/Stable Suspended Rupee Term Loan 47.5 CRISIL B/Stable Suspended The suspension of ratings is on account of non-cooperation by MLPL with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, MLPL is yet to provide adequate information to enable CRISIL to assess MLPL's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key credit factor in its rating process and non-sharing of information as a first signal of possible credit distress, as outlined in its criteria 'Information Availability Risk in Credit Ratings' Incorporated in 2004, MLPL was promoted by Mr. Hemang Parikh, Mr. Hitesh Parikh, Mr. Dilip Parikh, and Mr. Ramshankar Mehadia. It is in the automotive dealership as well as the distribution and C&F businesses. The company is an authorised dealer of Mahindra & Mahindra Ltd (rated 'CRISIL AA+/Stable/CRISIL A1+') and has four showrooms in Vidarbha (Maharashtra) under the Unnati Motors brand. MLPL is a distributor for the products of Alembic Pharmaceuticals Limited ('CRISIL AA/Stable/CRISIL A1+'), Orchid Chemicals & Pharmaceuticals Ltd, and Sony Ericsson. MLPL is also a C&F agent for companies such as Merck & Co Inc, and Ranbaxy Fine Chemicals Ltd. MRIDUL ENTERPRISES: ICRA Reaffirm BB/A4 Rating on INR34.28cr Loan ----------------------------------------------------------------- The ratings of '[ICRA]BB' and '[ICRA]A4' have been reaffirmed for the INR34.28 Crore (enhanced from INR29.40 Crore) bank lines of Mridul Enterprises. The outlook on the long term rating is stable. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund-Based limits- 26.58 [ICRA]BB (Stable)/ Long Term/Short [ICRA]A4 reaffirmed term scale Non-Fund based 7.70 [ICRA]BB (Stable)/ Limits-Long Term/ [ICRA]A4 reaffirmed Short term scale The rating reaffirmation factors in the modest size of operations of the firm and its financial profile characterized by moderate profitability and return indicators and the high working capital intensity of business. The ratings are also constrained by the high competitive intensity in the home furnishings (and related products) business; vulnerability of profitability to foreign exchange rate fluctuation risks; the Firm's high geographical and customer concentration and risks inherent in partnership form of business. That apart, ICRA has favourably considered the established track record and experience of the promoters in the home furnishing business; the Firm's long standing relations with the customer base and track-record of repeat business and improving export as well as domestic market scenario. Mridul Enterprises is engaged in the manufacture of home textiles and other furnishing products primarily oriented for the export market. Incorporated as a partnership firm, Mridul commenced operations in 1986. The Firm's manufacturing facilities are located in Noida and its product portfolio primarily includes quilts, table linen, bed linen besides other ancillary home textile items like cushions, cushion covers, bedspreads etc. Recent Results For the year ended 31st March 2013, Mridul reported an operating income of INR59.90 crore and profit after tax of INR0.88 crore as against an operating income of INR67.05 crore and profit after tax of INR0.58 crore for FY12. PINAX STEEL: CRISIL Cuts Ratings on INR199.5MM Loans to 'BB' ------------------------------------------------------------- CRISIL has downgraded its rating on the long-term bank facilities of Pinax Steel Industries Pvt Ltd to 'CRISIL BB/Stable' from 'CRISIL BB+/Stable' while reaffirming the short-term rating at 'CRISIL A4+'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 20.0 CRISIL A4+ (Reaffirmed) Cash Credit 150.0 CRISIL BB/Stable (Downgraded from 'CRISIL BB+/Stable') Standby Line of 22.5 CRISIL A4+ (Reaffirmed) Credit Term Loan 49.5 CRISIL BB/Stable (Downgraded from 'CRISIL BB+/Stable') The rating downgrade reflects weakening in Pinax's business and financial risk profiles due to a substantial increase in the working capital cycle, marked by gross current asset (GCA) of 332 days as on March 31, 2013, vis-�-vis around 196 days as on March 31, 2012. The company's GCAs increased with the rise in the company's tender-based business, and a sizeable improvement in revenue contribution from the electro-forged gratings segment. Although the increase in working capital requirements was supported by an infusion of INR100 million in equity and INR10 million through interest-free unsecured loans in 2012-13 (refers to financial year, April 1 to March 31), the company's working capital cycle is expected to remain stretched, with GCAs in excess of 300 days over the medium term. CRISIL believes that the expected increase in Pinax's working capital requirement will increase its reliance on bank's facilities, leading to higher bank limit utilisation over the medium term than that at present. Consequently, the company's overall financial risk profile is expected to weaken over the period. Pinax's revenues declined to INR530.6 million in 2012-13 from INR553.2 million in 2011-12. The decline resulted from a challenging domestic environment in the steel industry, which is expected to continue in 2013-14. Consequently, Pinax will report marginal growth in revenues to around INR555 million in 2013-14. While the company's operating profitability could increase to around 9.0 per cent during 2013-14, CRISIL believes that Pinax's business risk profile will remain constrained by flat revenues in the near term. CRISIL's ratings on the bank facilities of Pinax Steel Industries Pvt Ltd (Pinax) continue to reflect Pinax's integrated operations, which are expected lead to improved profitability over the medium term; and its moderate financial profile, marked by average net worth and low gearing. These rating strengths are partially offset by its large working capital requirements, coupled with its small scale of operations and cyclical demand in the steel industry. CRISIL has treated unsecured loans of INR63.2 million as on March 31, 2013, from the promoters, as neither debt nor equity. These interest-free loans are likely to be retained in the business over the medium term. Outlook: Stable CRISIL believes that Pinax will maintain its operating efficiency over the medium term. The outlook may be revised to 'Positive' if Pinax maintains its liquidity profile with lower dependence on bank facilities to fund incremental working capital requirements; and reports higher-than-expected cash accruals, while maintaining its operating profitability. Conversely, the outlook may be revised to 'Negative' if the working capital cycle lengthens further; or the company undertakes sizeable debt-funded capital expenditure (capex) programmes, thereby weakening its financial risk profile; or if the company's operating profitability declines, resulting in lower-than-expected cash accruals, and stretched liquidity. Pinax was established in Patna (Bihar) as Pinax Steels Pvt Ltd in 1995. The company was founded by Mr. Sanjay Kumar Khemka and his family, and was renamed in 1996. Pinax manufactures TMT bars, and mild-steel rounds, flats, rods, angles and electro-forged gratings. PRET STUDY: ICRA Suspends 'BB/A4' Rating on INR20cr LT Loan ----------------------------------------------------------- ICRA has suspended the '[ICRA]BB' and '[ICRA]A4' rating assigned to INR20.0 crore long term fund based, short term fund based and short term non-fund based bank facilities of Pret Study by Janak Fashions Private Limited. The suspension follows ICRA's inability to carry out a rating surveillance in the absence of the requisite information from the company. PSJF was originally incorporated as ARK Capleafin (P) Ltd. in March 1997 and was earlier engaged in garment related business. It was acquired by the present promoters in April 2005 and subsequently the name was changed to PSJF in May 2005. PSJF is engaged in manufacturing and retailing of western and ethnic wear for men and women under its brand Study by Janak through its 6 exclusive showrooms in NCR and Punjab. The company is also engaged in trading of fabric and manufacturing of garments for other brands in the domestic market. The promoters have been engaged in the manufacturing and retailing of ethnic wear for men for over three decades and started with a showroom (Mehra Stores) in Karol Bagh (Delhi) in 1980-81. PROGRESSIVE SHARE: ICRA Reaffirms 'BB+' Rating on INR2.4cr Loans ---------------------------------------------------------------- ICRA has reaffirmed the rating of '[ICRA]BB+' for INR2.40 crore long term fund based bank facilities and the rating of [ICRA]A4+ for INR30.00 crore short term non fund based bank facilities of Progressive Share Brokers Private Limited. The outlook on the rating is stable. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term fund 2.40 [ICRA]BB+ reaffirmed based bank facilities Short term non- 30.00 [ICRA]A4+ reaffirmed fund based bank facilities The ratings are constrained by PSBPL's declining profitability and retail broking market share over the last few years on the back of challenging capital market environment. The ratings take note of the small presence and continued low diversification of business revenue with high dependence on retail broking despite the presence in commodity and currency broking space. The ratings also factor in the inherent volatility in the equity broking business and limited retail participation and a weak business outlook for the capital markets sector over the short term. However, the ratings takes into account PSBPL's long experience in the equity broking business, variable cost structure with primarily franchisee based retail network, and adequate capitalization level for the current scale of operations, comfortable liquidity profile and adequate risk management system deployed by the company. Further PSBPL's ratings at the current level reflect its relative positioning with other ICRA rated brokerage houses. PSBPL is a retail broking player with no presence in the institutional broking segment. On account of its limited presence coupled with increased competition from larger players in the market, PSBPL's equity broking market share has remained low over the years and has reduced from 0.05% in FY11-12 to 0.04% in FY12- 13. The company's net brokerage income continued to remain low at INR3.1 crores despite an increase of 13% from INR2.7 crores in FY11-12 supported by higher yields. Overall profitability of the company in FY12-13 was supported by Delay Payment Charges of INR1.24 crores vis-a-vis INR0.74 crores in FY11-12. This was offset by a loss of INR0.25 crores in sale of investments. The company reported PAT of INR0.84 crore in FY12-13 as compared to INR0.93 crore in FY11-12 and INR2.06 crores in FY10-11. On the commodity broking side, Progressive Comtrade (subsidiary of PSBPL) reported an increase of ~55% in turnover resulting into a rise in the market share of the company increased from 0.02% to 0.04%. The commodity broking income increased to INR1.18 crores from INR0.86 crores. Overall, the company reported a PAT of INR0.12 crores (0.13 crores in FY12). However, due to the introduction of Commodities Transaction Tax and the impact of the NSEL event, ICRA does not expect much traction in the commodities broking space going ahead which may adversely affect the revenues and profitability of the company. PSBPL has seen some initial traction in the currency broking segment, which, however, remains very small currently. Also, apart from commodities and currency broking, the group company had started margin funding under Progressive Global Finance. However, the company did not grow the book size which stood at INR2.50 crores as on Mar-13. PSBPL has taken adequate steps to mitigate the credit risks, market risks and operational risks associated with the retail broking. PSBPL has deployed centralized risk management system for its current scale of operations with limits assigned to the individual franchisees and constant monitoring on the franchisees overall position. ROHIL FOODS: ICRA Reaffirms/Assigns 'B' Rating to INR20cr Loans --------------------------------------------------------------- ICRA has reaffirmed '[ICRA]B' rating to the INR20.00 crore (enhanced from 13 crore) fund based limits of Rohil Foods Private Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund based limits 20.00 [ICRA]B reaffirmed/assigned The rating reaffirmation takes into account the highly competitive and low value additive nature of the rice milling industry which results in limited pricing power vis-a-vis consumers and suppliers (paddy farmers). These factors, coupled with the small size of the company's rice milling unit have resulted in relatively weak profitability indicators and given the fundamental industry dynamics, ICRA does not expect any change in the near future. Further, the company's working capital intensive operations have been largely debt funded resulting in high gearing and weak debt coverage indicators. ICRA also factors in the vulnerability of company's operations to agro climatic risks, which can affect the pricing and availability of paddy. ICRA however draws comfort from the proximity of the mill to a major rice growing area which results in easy availability of paddy and stable demand outlook given that India is a major consumer (rice being an important staple of the Indian diet) and exporter of rice. Incorporated in the year 2009, Rohil Foods Private Limited is a private limited company engaged in milling of rice with an installed capacity of 10 tons/hour. The firm has been promoted by Mr. Vinod Khurania and Mrs Sonia Khurania. The company's milling unit is based out of Kaithal. The key raw material for the company is basmati paddy. Paddy is mostly procured from the "mandi" of Karnal and Cheeka (Haryana) during the paddy buying season i.e. September to December every year. However, if required company also buys paddy from the market in off season period. Recent Results The company reported a profit after tax of INR0.03 crores on an operating income of INR85.31 crores in 2012-13 as against a profit after tax of INR0.03 crores on an operating income of INR86.39 crores in 2011-12. S.S.S. RICE: CRISIL Suspends 'B+' Ratings on INR98.5MM Loans ------------------------------------------------------------ CRISIL has suspended its ratings on the bank facilities of S.S.S. Rice Mill Private Limited. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 1.5 CRISIL A4 Suspended Cash Credit 85.0 CRISIL B+/Stable Suspended Term Loan 13.5 CRISIL B+/Stable Suspended The suspension of ratings is on account of non-cooperation by SSSRM with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, SSSRM is yet to provide adequate information to enable CRISIL to assess SSSRMO's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key credit factor in its rating process and non-sharing of information as a first signal of possible credit distress, as outlined in its criteria 'Information Availability Risk in Credit Ratings' Incorporated in 2009, SSSRM is engaged in milling and processing of non-basmati rice and supplies to Central and state governments as well as sells in the open market through distributors. The company's plant in Raidighi (West Bengal) has an installed capacity of processing 45,000 tonnes per annum of paddy, with current utilisation of around 65 per cent. SAI BHASKAR: CRISIL Suspends 'D' Ratings on INR270MM Loans ---------------------------------------------------------- CRISIL has suspended its ratings on the bank facilities of Sai Bhaskar Irons Pvt Ltd. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 60 CRISIL D Suspended Proposed Long-Term Bank Loan Facility 10 CRISIL D Suspended Term Loan 200 CRISIL D Suspended The suspension of ratings is on account of non-cooperation by SBIPL with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, SBIPL is yet to provide adequate information to enable CRISIL to assess SBIPL's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key credit factor in its rating process and non-sharing of information as a first signal of possible credit distress, as outlined in its criteria 'Information Availability Risk in Credit Ratings' SBIPL, based in Guntur (Andhra Pradesh), was incorporated in 2009 and promoted by Mr. Ratnagiri Babu. It started commercial operations in March 2010. The company has one induction furnace with a capacity of 36,000 tonnes per annum (tpa). The company is also setting up a 120,000-tpa TMT bars facility, which is expected to start operations in October 2011. The billets facility is currently operating at an average capacity utilisation of 70 to 75 per cent. SAMARTH AGRO: ICRA Rates INR5.5cr Long-Term Loan at 'B+' -------------------------------------------------------- ICRA has assigned the '[ICRA]B+' to the INR5.50 crore long term facilities of Samarth Agro Industries. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term, Fund 5.50 [ICRA]B+ (assigned) based limits- Cash Credit The assigned rating takes into account the location advantage to the firm by virtue of its presence in the cotton rich belt of Parbhani as also the low working capital intensity. The rating also favorably factors in the long experience of promoters in agro processing business as also the favorable demand for lint. The rating however is constrained by the modest scale of operations of the firm as also the stretched liquidity indicated by high gearing and limited cash accruals. Further; the margins of the firm also remain vulnerable to adverse movements in raw cotton and lint. Low value add nature of the business as also the intense competition due to fragmented nature of the industry also limits the margins of the firm. Incorporated in 2007 by Mr. Harikishan Sharma, Mrs..Kiran Rathi and Mrs.Vasudha Kharkar, SAI is a Sailu, Dist.Parbhani (Maharashtra) based partnership firm involved in ginning and pressing of cotton.The current processing capacity of the firm is 14000 bales per annum. Recent Results SAI recorded an operating profit of INR0.73 crore on an operating income of INR22.59 crore in FY 13. SESA MINERALS: CRISIL Reaffirms 'BB' Ratings on INR400MM Loans --------------------------------------------------------------- CRISIL's rating on the bank loan facilities of Sesa Minerals Ltd continues to reflect SML's above-average financial risk profile, marked by a healthy capital structure, and the extensive experience of its promoters in the steel trading business. These strengths are partially offset by SML's large working capital requirements, and its modest scale of operations in the fragmented and competitive steel industry. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 150 CRISIL BB/Stable (Reaffirmed) Proposed Long-Term 50 CRISIL BB/Stable (Reaffirmed) Bank Loan Facility Letter of Credit 200 CRISIL BB/Stable (Reaffirmed) Outlook: Stable CRISIL believes that SML will continue to benefit over the medium term from the extensive experience of its promoters in the steel trading business. The outlook may be revised to 'Positive' if SML's cash accruals are substantially larger than expected, or if its working capital management improves. Conversely, the outlook may be revised to 'Negative' if the company's financial risk profile deteriorates, caused most likely by less-than-expected cash accruals, debt-funded capital expenditure, or larger-than- expected working capital requirements. Update SML's operating income has increased by 30 per cent to INR939 million in 2012-13 (refers to financial year, April 1 to March 31), compared with INR722 million in 2011-12. For the six months ended September 30, 2013, SML is estimated to have registered revenues of around INR600 million. On account of trading nature of operations, SML's operating margin remained low at 2.2 per cent in 2012-13 compared to 2.0 in 2011-12. SML's financial risk profile remained above-average, marked by a moderate net worth of INR244 million, and a low total outside liabilities to tangible net worth ratio of 1.8 times, as on March 31, 2013. On account of low margins, SML's interest coverage ratio was low at 1.6 times in 2012-13. CRISIL believes that the SML's financial risk profile will remain above-average over the medium term on the back of moderate net worth and healthy capital structure. The company's liquidity is stretched, driven by high working capital requirements and low cash accruals. Its gross current assets were high at 268 days as on March 31, 2013, mainly because of high inventory and receivables days. On account of its large working capital requirements, SML's bank limit utilisation has also remained high at 89 per cent over the 13 months through September 2013. Incorporated in 2007, SML is promoted by Mr. Shankar Lal Bagri. The company trades in steel products, such as billets, scrap, iron-ore pellets, wire, and thermo-mechanically-treated bars, in the domestic market. SHANKAR MAHADEV: ICRA Revises Rating on INR3cr Loan to 'BB-' ------------------------------------------------------------ ICRA has revised the long-term rating outstanding on the INR3.00 crore fund based bank facilities of M/s Shankar Mahadev & Co. from '[ICRA]BB' to '[ICRA]BB-'. ICRA has also revised the short-term rating outstanding on the INR5.00 crore non-fund based bank facilities of SMC from '[ICRA]A4+' to '[ICRA]A4'. The outlook on the long-term rating is stable. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based, Rated 3.0 Revised to [ICRA]BB- on Long-Term Scale (stable) from Cash Credit [ICRA]BB (stable) Non-Fund Based, 5.0 Revised to [ICRA]A4 Rated on Short- [ICRA]A4+ Term Scale Bank Guarantee from The ratings revision takes into account the marked year-on-year revenue de-growth of 24% witnessed in FY13 due to delays in the execution of projects, because of issues relating to land acquisition, encroachments, and design and scope changes by clients. Moreover, there has also been a reduction in the number of new projects undertaken by municipal corporations in FY13 due to uncertainty associated with quantum of collections following implementation of local body tax. Furthermore, the largest project, accounting for 45% of the outstanding order-book, as of August 2013, is slow-moving with pending issues relating to land acquisition and change of scope - which could impact the pace of execution, and in turn the firm's revenue growth in FY14. The ratings revision also considers the firm's exposure to geographic, client and project concentration risks, as projects are undertaken in the Thane and suburban areas of Mumbai and Navi Mumbai alone. While 53% of the unexecuted order book can be accounted for by projects from the Kaliyan Dombivali Municipal Corporation (KDMC), the remaining 47% may be accounted for by projects from the Thane Municipal Corporation (TMC). The three largest projects contribute to almost 76% of the unexecuted order book. The capital structure is exposed to risks of capital withdrawals inherent in partnership firms, as can be seen in FY13. However, the ratings continue to favorably factor in the long standing experience of over 60 years of the partners; and the firm's established relationship with its clients in the construction sector, which has enabled it to garner repeat orders. The ratings also take into consideration the comfort derived from the presence of escalation clauses in all on-going projects. Shankar Mahadev and Company was set up in 1950 as a partnership firm by the Late Seth Vensimal Dayaramani. The firm is registered as a Class-I contractor with the Public Works Department (PWD), Government of Maharashtra. The firm has executed numerous road and building projects since its inception for government and semi- government entities. More than six decades of experience in the civil construction business and a good market reputation have enabled it to garner repeat orders. Recent Results In FY13, SMC reported an operating income of INR22.97 crore and a profit after tax of INR0.39 crore, as compared to the operating income of INR30.37 crore and a profit after tax of INR0.61 crore in the financial year-ended March 2012. SHANTI GOPAL: ICRA Rates INR40cr LT Loans at 'BB' ------------------------------------------------- ICRA has assigned a long-term rating of '[ICRA]BB' to INR40.00 crore fund-based facilities and a short term rating of '[ICRA]A4' to INR2.00 crore non-fund based facilities of Shanti Gopal Concast Limited. The outlook on the long-term rating is 'Stable'. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Fund 40.00 [ICRA]BB (Stable) Based Facilities Assigned Short-term Non 2.00 [ICRA]A4 Assigned Fund Based Facilities The assigned rating is constrained by the company's weak profitability indicators as reflected in below-average return on capital indicators due to low capacity utilisation levels. This coupled with steady revenue growth and working capital intensive nature of operations, has led to increase reliance on borrowings to fund the working capital requirements. Owing to high working capital requirements, the working capital limits typically remains highly utilised thereby resulted in stretched liquidity. The rating is supported by satisfactory capitalisation levels, however weak profitability results in weak debt coverage indicators as reflected in Total Debt/ OPBDITA of 6.34x and NCA/TD of 10% as on Mar-13 while the interest coverage ratio (OPBDITA / Interest) is satisfactory at 2.74x mainly on account of high proportion of non- interest bearing loans (~39% of total borrowings on Mar-13). Given the debt-funded capex plans for setting up of 12 MW power plant for captive consumption, the ability to improve profit margins will be critical for improvement in debt coverage indicators. Weak profitability not only results in weak debt coverage, but also results in modest accruals, due to which the company will continue to remain dependent on promoters to fund margin requirement for incremental borrowings. Notwithstanding the above weaknesses, the rating favourably factors in the promoters' established track record in managing various companies under Ganga group with the group also consistently provides management and funding support to the company. The rating also positively factors in the established relationship of the company with its customers as evident in regular repeat orders and benefits to accrue with partial forward integration of sponge iron manufacturing facility by company's setting up of induction furnace unit in FY-2013. Going forward, the ability of the company to continue access support from Ganga group, scale up its operations while improving the profitability, timely funding support from promoters for funding margin requirements on incremental borrowings and improve its liquidity position will remain the key rating sensitivities. Shanti Gopal Concast Limited was incorporated in the year 2005 and is engaged in the manufacturing of sponge iron and steel billets. The company was initially promoted by Agarwal family and later sold their entire stake in the company to Chaudhary family in October-2011. SGCL has its manufacturing facility located at Mirzapur (Uttar Pradesh) having installed capacity of 90,000 TPA (tonnes per annum) for manufacturing sponge iron and 28,800 TPA for manufacturing of steel billets. During FY2013, SGCL reported a PAT of INR0.93 crore with an Operating Income (OI) of INR131.5 crore as compared to PAT of INR0.41 crore with OI of INR82.8 crore for the previous financial year. Ganga Group is a collaboration of the Chaudhary and Tulsyan families. The group is engaged in various businesses: polywoven sacks through the entities Quality Woven Sacks Private Limited (rated at [ICRA]BB(stable)/A4), Ganga Bag Udyog Private Limited (rated at [ICRA]BB-(stable)/ A4), Neel Kamal Polytex Industries Pvt. Ltd. (rated at [ICRA]BB(stable)) and RAS Polytex Pvt. Ltd. (rated at [ICRA]BB(stable)/A4); paper through the entities Ganga Papers India Ltd. (rated at [ICRA]BB (stable)/A4) and Ganga Pulp & Papers Pvt. Ltd. and sponge iron and billet manufacturing through SGCL. SRI GITA: ICRA Assigns 'B+' Ratings to INR9.7cr Loans ----------------------------------------------------- ICRA has assigned a long term rating of '[ICRA]B+' to the INR9.70 crore fund based bank facilities of Sri Gita Texturisers. ICRA has also assigned a long term rating of [ICRA]B+ and/or short term rating of '[ICRA]A4' to the INR0.13 crore unallocated limits of the company. Amount Facilities (INR crore) Ratings ---------- ----------- ------- LT Scale-Fund 4.80 [ICRA]B+ Assigned Based Limits- Term Loan LT Scale-Fund 4.90 [ICRA]B+ Assigned Based Limits- Cash Credit Unallocated 0.13 [ICRA]B+/[ICRA]A4 Assigned Limit The rating takes into account Sri Gita Texturiser's modest scale of operations due to its limited track record along with its weak financial profile characterized by low profitability from operations, modest debt coverage metrics and tight liquidity position because of high working capital requirements. While the capital structure is moderately leveraged at present, the envisaged debt funded capital expenditure is likely to keep the debt coverage indicators under check. The rating also takes into account SGT's limited bargaining power with suppliers, intensely competitive business environment and vulnerability to raw material price fluctuations. Nevertheless, the rating draws comfort from the long track record of the promoters in the field of manufacturing and marketing of texturised yarn and the successful stabilization of commercial operations. Established in 2009, Sri Gita Texturisers is involved in the business of manufacturing polyester texturised yarn and roto yarn in various deniers. The firm started its operations in January 2012 and the entire manufacturing unit is spread across 20,000 square feet with an installed capacity of 4320 MT per annum. The registered office is in Surat and the production facility is located in Bharuch. The firm's associate concern, Sri Mahavir Crimpers is into the manufacturing of polyester texturised yarn. Recent results: SGT earned a net profit of INR0.53 crore on an operating income of INR31.53 crore for the period ending March 31, 2013. SRI MAHALAXMI: CRISIL Suspends 'B' Ratings on INR84MM Loans ----------------------------------------------------------- CRISIL has suspended its ratings on the bank facilities of Sri Mahalaxmi Cotton Mills. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 47.5 CRISIL B/Stable Suspended Proposed Long-Term Bank Loan Facility 12.5 CRISIL B/Stable Suspended Term Loan 24.0 CRISIL B/Stable Suspended The suspension of ratings is on account of non-cooperation by SMCM with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, SMCM is yet to provide adequate information to enable CRISIL to assess SMCM's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key credit factor in its rating process and non-sharing of information as a first signal of possible credit distress, as outlined in its criteria 'Information Availability Risk in Credit Ratings' Established in 2008 in Adialabad (Andhra Pradesh), SMCM is engaged in the ginning and pressing of raw cotton (kapas) to make cotton bales. It sells the cotton bales to various traders and the cotton seed to various oil mills in the vicinity of the plant. SMCM has a production capacity of about 500 bales per day. The firm is promoted by Mr. G Vilas Kumar, who has nearly two decades of experience in the ginning business. The firm has two fully automated ginning units with each unit having 24 ginning machines. The plant is spread over an area of 5 acres. SRI MAHAVIR: ICRA Assigns 'BB-' Ratings to INR8.95cr Loans ---------------------------------------------------------- ICRA has assigned a long term rating of '[ICRA]BB-' to the INR8.95 crore fund based bank facilities of Sri Mahavir Crimpers. ICRA has also assigned a long term rating of '[ICRA]BB- (Stable)' and/or short term rating of [ICRA]A4 to the INR0.27 crore unallocated limits of the company. The outlook assigned to the long term rating is Stable. Amount Facilities (INR crore) Ratings ---------- ----------- ------- LT Scale-Fund Based 0.95 [ICRA]BB-(Stable) Assigned Limits-Term Loan LT Scale-Fund Based 8.00 [ICRA]BB-(Stable) Assigned Limits-Cash Credit Unallocated Limit 0.27 [ICRA]BB-(Stable)/[ICRA]A4 Assigned The ratings are constrained by Sri Mahavir Crimpers modest financial profile characterized by low profitability from operations, high gearing levels, modest debt coverage metrics and tight liquidity position because of high working capital requirements. The rating also takes into account SMC's limited bargaining power with suppliers, intensely competitive business environment and vulnerability to raw material price fluctuations. Nevertheless, the ratings draw comfort from the long track record of the promoters in the field of manufacturing and marketing of texturised yarn, steady improvement in the revenues in the recent fiscals and its long associations with various customers, which has strengthened its market position. Incorporated in the year 1987, Sri Mahavir Crimpers is involved in the business of manufacturing of polyester texturised yarn in various deniers. The entire manufacturing unit is spread across an area of 20,000 square feet with an installed capacity of 7200 MT per annum. It has its registered office in Surat and production facility located in Bharuch. The firm's associate concern, Sri Gita Texturisers is into the manufacturing of polyester texturised yarn and roto yarn. Recent results: SMC earned a net profit of INR0.58 crore on an operating income of INR90.88 crore for the period ending March 31, 2013. SWAGAT DEVELOPERS: ICRA Assigns 'BB' Rating to INR20cr Loans ------------------------------------------------------------ ICRA has reaffirmed the long term rating of '[ICRA]BB' to the fund-based limits and term loans aggregating to INR27.50 Crore (enhanced from INR07.50 crore) of Swagat Developers (SD or the firm). The outlook on the long term rating is 'Stable'. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term Fund 07.50 [ICRA]BB(Stable) Based-Cash Credit reaffirmed Long Term Fund Based-Term Loans 20.00 [ICRA]BB(Stable) assigned The reaffirmation of the rating continues to factor in the long experience of the promoters in the real estate development sector, particularly in the residential segment; the favorable location of ongoing projects and the relatively limited execution risks associated with these projects since the projects are at an advanced stage of construction. The rating, however, is constrained by the firm's exposure to high level of market risk associated with the completed and ongoing projects alike, given the low level of bookings till date, and the associated funding risk owing to the customer-advances funded nature of capex for the ongoing projects. The rating also takes into account the firm's exposure to intense competition in the Surat real estate segment; cyclicality of real estate sector; the sectoral and regional concentration risks arising from focus on residential projects in Surat, and vulnerability of profitability to variations in material and labour costs. ICRA also notes that Swagat Developers is a partnership concern and any significant withdrawals from the capital account would impact the net worth and thereby the capital structure. Swagat Developers was established in 2006 as a partnership firm and is engaged in real estate development, primarily residential developments. The partners in the firm are Mr. Tushar B. Asodaria, Mr. Pravin M. Asodaria, Mr. Arun R. Korat, Mr. Upesh P. Korat, Mr. Kanti Jodhani and Mr. Mukesh Asodaria. The firm is based out of Surat, Gujarat and is currently focusing on execution of residential projects in Surat. Recent Results SD reported a profit after tax (PAT) of INR0.21 crore on an operating income of INR09.72 crore for the year-ending March 31, 2012; and a profit after tax of INR0.26 crore on an operating income of INR13.12 crore for the year-ending March 31, 2013. V.K. GUPTA: CRISIL Reaffirms 'C' Rating on INR40MM Cash Credit -------------------------------------------------------------- CRISIL's ratings on the bank facilities of VK Gupta & Associates continue to reflect VKG's modest scale of operations in the highly competitive civil construction industry, and its large working capital requirements. These rating weaknesses are partially offset by its above-average debt protection metrics and the extensive industry experience of VKG's promoters. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 160 CRISIL A4 (Reaffirmed) Cash Credit 40 CRISIL C (Reaffirmed) Update In 2012-13 (refers to financial year, April 1 to March 31), VKG's operating income decreased to INR328.5 million, from INR395.4 million in 2011-12. The decrease in the firm's operating income, was driven by its delay in execution of work contracted. VKG's operating margin was 12.7 per cent in 2012-13, and has remained in line with the firm's operating margin of 12.8 per cent in 2011-12. VKG's liquidity is stretched by its small net worth of INR21.5 million, as on March 31, 2013, and loans of INR25.2 million advanced to a company wherein the founding partner serves as a director. The firm's stretched liquidity is also driven by large total capital withdrawals of INR45.1 million in 2012-13 and 2011- 12, of total book profits of INR52.7 million during the two years. The firm's liquidity could remain stretched over the medium term, driven by its small net worth, large loans, and substantial capital withdrawals by the promoters. VKG has healthy debt protection metrics, marked by interest coverage and net cash accrual to total debt ratios of 3.6 times and 0.26 times, respectively, as on March 31, 2013. The firm's debt protection metrics could remain healthy over the medium term, driven by its healthy operating margin. However, the firm's financial risk profile is constrained by high gearing of 2.5 times, as on March 31, 2013, and its small net worth. VKG was set up as a partnership in 2000 by Mr. V K Gupta, his wife Ms. Dimple Gupta, and their son Mr. Saksham Gupta. The firm undertakes civil construction works, such as construction of bridges in Punjab, Haryana, Himachal Pradesh (HP), and Uttarakhand. VKG reported a profit after tax of (PAT) of INR15.9 million on net sales of INR327.5 million for 2012-13, and a PAT of INR20.12 million on net sales of INR393.6 million for 2011-12. VAIBHAV JEWELLERS: ICRA Reaffirms 'BB' Rating on INR14cr Loan ------------------------------------------------------------- ICRA has reaffirmed the '[ICRA]BB' rating assigned to INR14.00 crore bank facilities (INR12.00 crore earlier) of Vaibhav Jewellers. ICRA has assigned [ICRA]BB rating to the INR2.10 crore term loans and INR8.90 unallocated limits of VJ. The outlook assigned to the long term rating is Stable. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Overdraft 14.00 [ICRA]BB (Stable) Reaffirmed Term Loans 2.10 [ICRA]BB (Stable) Assigned Unallocated 8.90 [ICRA]BB (Stable) Assigned The rating reaffirmation by ICRA factors in VJ's limited financial flexibility as reflected by low profitability, highly leveraged capital structure, poor coverage indicators and high working capital intensity as a result of high gold jewellery inventory maintained by the entity which also exposes its margins to the risk of volatility in gold prices. The rating continues to factor in VJ's modest scale of operations, concentration risks as the entity operates through a single showroom and the highly competitive nature of the jewellery market characterized by the presence of a large number players and low entry barriers for new entrants. ICRA has also taken note of expected increase in gearing and the project risks associated with the construction of new showroom. The rating is further constrained by the risks associated with proprietorship nature of business like capital withdrawal as witnessed in the past and limited ability to raise capital. The rating however favourably factors in the long- standing experience of the promoter and management in the jewellery business, which has enabled the entity to establish leadership position in jewellery retailing in Eluru market. Vaibhav Jewellers is a partnership firm which was constituted in 1991 in Eluru as a manufacturer and retailer of gold Jewellery by Mr GSV Amarandra, Mr G Narendra and Mr G Manoj Kumar. In 1997 Vaibhav Jewellers was converted as a proprietary concern with Mr GSV Amarendra as a sole proprietor. VJ's showroom size is about 120 sq yards and it employs about 30 people. Recent Results VJ recorded INR71.99 crore of operating income and a profit before tax of INR1.60 crore in FY13 as against an operating income of INR69.13 crore and profit before tax of INR1.11 crore in FY12. VEDANTA RESOURCES: 1stHalf Loss Belies Improvements to Business --------------------------------------------------------------- Moody's Investors Service says that Vedanta Resources Plc (Vedanta, Ba1 negative) first half attributable loss belies improvements to the underlying business, noting that some of the concerns behind the negative outlook, assigned on 16 May 2013, have been addressed. Over the six months ended 30 September, Vedanta has simplified its group structure and lengthened its debt maturity profile. "However, Vedanta's current weak profitability and cash flow generation maintain negative pressure on the rating," says Alan Greene, a Moody's Senior Credit Officer and Lead Analyst for Vedanta. In H1 FY2014, group revenue and EBITDA fell 17% to $6.2 billion and 14% to $2.2 billion, respectively, as increases in output and efficiency gains were outweighed by lower commodity prices and a higher Government take from Cairn India. In August, Vedanta completed the formation of Sesa Sterlite Limited, a 58.3%-owned subsidiary of Vedanta. The new entity consolidates Vedanta's main operating assets and brings its cash rich and debt laden entities closer together. It will reduce interest cost at the Vedanta plc level, as the debt issued to acquire Cairn India Limited, has been transferred to the new entity. However, the $1.7 billion of bonds issued in May suggest that Vedanta, and not SSL, will remain the chief funding vehicle, although the choice of vehicle will ultimately depend on the end use of funds. "Vedanta's credit profile continues to hinge on the performance of CIL and HZL which contributed 51% and 25% of reported EBITDA, respectively", says Greene. In H1 FY2014, CIL, now a 58.8%-owned subsidiary of SSL, reported EBITDA down 13% to $1,123 million, as higher oil production of 212,873 barrels of oil equivalent per day (boepd), up 3% year on year, could not compensate for the lower average realized prices, down 4% to $94.3/boe from $98.0/boe. The Zinc India segment, operated by HZL, a 64.9%-owned subsidiary of SSL, also reported a year on year rise in production of refined zinc (14 %), refined lead (11 %), silver (18 %) in H1FY2014 and booked an EBITDA increase of 10% to $559 million, despite a 3% drop in the LME Zinc price. The outlook for Vedanta's idle assets, another rating concern, shows signs of improvement with partial resumption of some activities. In H1 FY2014, Vedanta's iron ore segment had a negative EBITDA of $18 million down from positive EBITDA of $117 million a year ago, owing to mining and selling restrictions in Goa and Karnataka. This segment should benefit from the long- awaited resumption of the mining operations in Karnataka and its authorization from the Supreme Court to sell the iron ore stocks of around 4 million tonnes held in Goa. The Lanjigarh alumina refinery, restarted operations in July, and the Tuticorin copper smelter restarted in June after a two months' stoppage. The start- up of the 1.25 million tonnes per annum (mtpa) smelter at Jharsuguda remains uncertain and hinges on the security and cost of supply of coal and alumina. Progress has been made with respect to liquidity management. Vedanta has refinanced $3.5 billion of debt and has extended its debt maturity profile to 4 years from 3.3 years at the end of fiscal year ended 31 March, excluding working capital loans in the operating subsidiaries. The refinancing of the $500 million bond held at Vedanta Resources plc, maturing in January, through syndicated loans, has already been agreed. The loans, with an average tenure of 4 years, are expected to reduce financing cost by $25-30 million per annum. The parent company also maintains a revolving credit facility of $100 million. On balance, Moody's believes that the negative outlook remains appropriate, with Vedanta's cash flow generation and profitability yet to decisively improve. Cash flow improvements in H1 FY2014 stemmed largely from working capital releases of $512 million and could swing back when activity picks up. "Furthermore, uncertainties remain about the dividend flows through the group and the fate of the potential $3.5 billion bid for the Government of India's stakes in HZL and BALCO," adds Greene. ========= J A P A N ========= KK ATAMI: Moody's Withdraws 'C' Ratings on Class B & C Notes ------------------------------------------------------------ Moody's Japan K.K. has withdrawn -- for its own business reasons -- its ratings on the notes issued by KK Atami Beach Line Funding 2 and Atami Beach Line Mezzanine Funding Limited. The affected ratings are as follows: Deal Name: KK Atami Beach Line Funding 2 Class B notes, Withdrawn (sf); previously on August 12, 2013 downgraded to C (sf) Class C notes, Withdrawn (sf); previously on August 12, 2013 downgraded to C (sf) Deal Name: Atami Beach Line Mezzanine Funding Limited Mezzanine notes, Withdrawn (sf); previously on August 12, 2013 downgraded to C (sf) Deal Name: KK Atami Beach Line Funding 2 Class: Class B Notes, Class C Notes Issue Amount: JPY1.2 billion, JPY1.2 billion Coupon: Fixed, Fixed Final Maturity Date: October 23, 2018 Deal Name: Atami Beach Line Mezzanine Funding Limited Class: Mezzanine Notes Issue Amount: JPY3.5 billion Coupon: Fixed Final Maturity Date: May 31, 2030 Underlying Asset: Atami Beach Line (toll road) Seller, Lessee, and Toll Road Operator: GRANVISTA Hotels & Resorts Co., Ltd. (formerly known as Mitsui Kanko Development Co., Ltd.) Underwriter/Refinance Agent: Citigroup Global Markets Japan Inc. (as of issue date) Ratings Rationale; Moody's has withdrawn the ratings for its own business reasons. TOKYO ELECTRIC: To Cut More Than 1,000 Jobs in 2014 --------------------------------------------------- Stanley White at Thomson Reuters reports that Tokyo Electric Power Co plans to shed more than 1,000 jobs via voluntary retirements by the second half of 2014, as it seeks to win more financial aid to clean up its crippled Fukushima nuclear plant. Tepco is working on a reorganization plan to fend off more drastic proposals, including possibly dragging the company through bankruptcy in return for a publicly funded clean-up and shutdown of its Fukushima reactors, the report relays. Reuters notes that the government has already agreed to spend JPY47 billion ($468.7 million) on dealing with some 1,000 tanks of radiated water at Tepco's crippled Fukushima nuclear power plant, which was wrecked by an earthquake and tsunami two years ago. Japan's government is also considering paying part of the cost to decommission Fukushima's damaged nuclear reactors, and restructuring could help Tepco secure more government aid, the report relays. According to the report, the utility hopes to secure JPY500 billion in funding from banks by the end of the year and hopes staff cuts will encourage banks to agree to the funding. About Tokyo Electric Tokyo Electric Power Company is the largest electric power company in Japan and the largest privately owned electric utility in the world. TEPCO supplies electricity to meet the increasingly diversified and sophisticated demands of its over 28.09 million customers in the metropolitan Tokyo, which is the political, economic, and cultural center of Japan, and eight surrounding prefectures. Bloomberg News said the utility is battling radiation leaks at the Fukushima Dai-Ichi power plant north of Tokyo after a March 11 earthquake and tsunami knocked out its cooling systems, causing the biggest atomic accident in 25 years. More than 50,000 households were forced to evacuate and Bank of America Corp.'s Merrill Lynch estimates TEPCO may face compensation claims of as much as JPY11 trillion (US$135 billion). As reported in the Troubled Company Reporter-Asia Pacific on May 11, 2012, Bloomberg News said Japan's government took control of Tepco and agreed to provide JPY1 trillion (US$12.5 billion) as part of the nation's largest bailout since the rescue of the banking industry in the 1990s. Bloomberg related that the government will obtain more than 50% of the voting rights in the utility under a 10-year plan approved on May 8 by Trade and Industry Minister Yukio Edano. The government stake may rise to two-thirds if TEPCO fails to meet goals that include cost cuts and compensation payments, said Bloomberg. Under the plan, Bloomberg disclosed, the utility aims for an unconsolidated profit of JPY106.7 billion in the year ending March 2014, based on an electricity rate increase and the restart of the Kashiwazaki Kariwa nuclear station. Bloomberg says nationalization of TEPCO paves the way for the government to restructure the electricity industry monopolized by regional utilities and possibly break up power generation and transmission networks to allow more competition. TOKYO ELECTRIC: Plans to Sell Hospital to Tokyo Tatemono -------------------------------------------------------- The Japan Times Online reports that Tokyo Electric Power Co. plans to sell its affiliated hospital to major real estate developer Tokyo Tatemono Co., according to informed sources. According to the report, the sources said Tokyo Denryoku Hospital will likely fetch a price of about JPY10 billion. Only Tepco employees are eligible to use the facility in the Shinanomachi district of Shinjuku Ward, the report says. Japan Times relates that the step will be part of asset sales included in Tepco's special business reconstruction program. Tokyo Tatemono and Keio University Hospital have bid to buy the facility, which was believed to be worth more than JPY12 billion. At the firm's general shareholders' meeting in 2012, then-Vice Tokyo Gov. Naoki Inose, who now serves as governor, harshly criticized Tepco because the hospital was not on the list of assets subject to sale, the report relays. The Tokyo Metropolitan Government is a major shareholder of the utility. Tokyo Denryoku Hospital, built in 1979, occupies a 5,600-sq.-meter site and has a total floor space of 16,100 sq. meters across nine levels, the report discloses. About Tokyo Electric Tokyo Electric Power Company is the largest electric power company in Japan and the largest privately owned electric utility in the world. TEPCO supplies electricity to meet the increasingly diversified and sophisticated demands of its over 28.09 million customers in the metropolitan Tokyo, which is the political, economic, and cultural center of Japan, and eight surrounding prefectures. Bloomberg News said the utility is battling radiation leaks at the Fukushima Dai-Ichi power plant north of Tokyo after a March 11 earthquake and tsunami knocked out its cooling systems, causing the biggest atomic accident in 25 years. More than 50,000 households were forced to evacuate and Bank of America Corp.'s Merrill Lynch estimates TEPCO may face compensation claims of as much as JPY11 trillion (US$135 billion). As reported in the Troubled Company Reporter-Asia Pacific on May 11, 2012, Bloomberg News said Japan's government took control of Tepco and agreed to provide JPY1 trillion (US$12.5 billion) as part of the nation's largest bailout since the rescue of the banking industry in the 1990s. Bloomberg related that the government will obtain more than 50% of the voting rights in the utility under a 10-year plan approved on May 8 by Trade and Industry Minister Yukio Edano. The government stake may rise to two-thirds if TEPCO fails to meet goals that include cost cuts and compensation payments, said Bloomberg. Under the plan, Bloomberg disclosed, the utility aims for an unconsolidated profit of JPY106.7 billion in the year ending March 2014, based on an electricity rate increase and the restart of the Kashiwazaki Kariwa nuclear station. Bloomberg says nationalization of TEPCO paves the way for the government to restructure the electricity industry monopolized by regional utilities and possibly break up power generation and transmission networks to allow more competition. =============== M O N G O L I A =============== MONGOLIAN MINING: Moody's Lowers CFR & Bond Ratings to Caa2 ----------------------------------------------------------- Moody's Investors Service has downgraded the corporate family and senior unsecured bond ratings of Mongolian Mining Corporation (MMC) to Caa2 from Caa1. The ratings outlook is negative. The rating action concludes the review initiated on 15 August 2013. Ratings Rationale: "The downgrade reflects MMC's inadequate liquidity profile against the backdrop of a difficult operating environment. Without a significant recovery in coking coal prices or a significant restructuring exercise, MMC's debt structure is unsustainable in view of large debt servicing requirements in the next 12-18 months," says Simon Wong, a Moody's Vice President and Senior Credit Officer. MMC's operations is projected to run at a near break-even level in terms of cash flow over the next 12-18 months, based on Moody's assumption of a Queensland benchmark coking coal price of $150- $155 per tonne. The company had cash on hand of $129 million at end-June 2013, and is expected to finalize the sale of its paved road to the Mongolian government shortly. MMC has been focused on preserving liquidity since the downturn in coking coal prices. Asset divestments, such as the sale of its paved road, in addition to measures to conserve capital -- including deferments of debt payments, as well as the adoption of a careful approach to working capital management and production cost controls -- has prolonged the life of its liquidity buffer over the last 12 months. However, its cash balance will be insufficient to address debt- servicing requirements in 2H 2013 and FY2014 of around $50 million and $277 million respectively. And in FY2014, MMC faces the maturation of $105 million in promissory notes, with installments due in March and December; the amortization of $102 million in bank loans; and interest payments of approximately $70 million. MMC is understood to be progressing its plans to defer portions of its near-term debt maturities. It will be in breach of its bank maintenance covenants as of 31 December 2013 and is negotiating for waivers and a relaxation of the covenants. "There are some other possible avenues for MMC to enhance its liquidity position in the next 12 months, such as a significant asset divestment, or equity injection, particularly after the relaxation of foreign investment laws in Mongolia. However, these options may be limited by its low share price and weakened asset valuation," adds Simon Wong, also the lead analyst for MMC. The negative outlook reflects ongoing pressure on MMC's financials and liquidity position from the restrained price outlook for coking coal. A rating upgrade is unlikely in the near term, given the negative outlook. However, positive rating momentum could emerge if the benchmark coking coal price improves to $160-$170 per tonne on a sustained basis, and the company improves its liquidity profile through asset sales or equity injections. Downgrade pressure could emerge if: (1) its liquidity risk rises due to an inability to raise funding or roll forward maturing debt on a timely basis, (2) restructure its debt in a manner that is deemed to be a distressed exchange, and (3) prices fall beyond Moody's Queensland benchmark coking coal price assumption of $150 per tonne on a sustained basis. Mongolian Mining Corporation (MMC) is the largest privately owned coal mining company in Mongolia. Established in 2005, it listed on the Hong Kong Stock Exchange in October 2010. It has two producing mines located in the Gobi Desert. The Ukhaa Khudag mine, which produced 8.6 million tonnes of coking coal in 2012 and the Baruu Naran mine, which was acquired in 2011 and commenced production in February 2012. ================= S I N G A P O R E ================= PACNET LTD: Moody's Says 3Q Operating Results Support B2 CFR ------------------------------------------------------------ Moody's Investors Service says Pacnet Limited's 3Q2013 operating results support its B2 corporate family rating and senior secured rating. The rating outlook is negative. Total reported revenue in 3Q2013 was USD114.2 million, a modest decline from 2Q2013's USD115.8 million. However, its gross profit margin continued to show improvement reflecting the lower cost of maintenance and fewer cable repairs. Gross margin was 57% in 3Q2013 compared to 55% in 2Q2013. "Reported EBITDA of around USD29 million is an improvement over 2Q2013 and 41% higher than the same period last year. While the quarter benefited from lower maintenance costs due to some currency movements, higher profitability is also resulting from Pacnet's restructuring last year, which included the exiting of lower margin businesses and lowering of staff related costs," says Annalisa Di Chiara, a Moody's Vice President and Senior Analyst. In July, Pacnet terminated the tender and consent solicitation for its outstanding 9.25% Senior Secured Guaranteed Notes due 2015. However, Moody's expects that management is continuing to monitor the markets and may look to re-launch the transaction. With the good performance in 3Q2013, Moody's now expects EBITDA to be modestly above Moody's original level of USD100million for the full year. As a result adjusted debt to EBITDA should be around 4.0x or lower at year-end. The negative outlook continues to reflect the company's small size in a highly competitive environment. While the company reported positive free cash flow in 3Q2013, capex was below Moody's expectations for the quarter. Still, positive FCF help bolster cash into the USD70 million range from USD50 million at 2Q2013. Moody's expects the company will maintain an appropriate level of liquidity with cash on balance sheet of at least USD40 million. Moody's also expects the company will be in compliance with its bank covenants for 3Q2013 and beyond. Upwards rating pressure is unlikely, given the negative outlook. But, the outlook could return to stable if quarterly EBITDA is sustained above USD30 million and its liquidity position improves, as the company does not maintain any working capital facilities. Further negative pressure will arise if EBITDA keeps below USD20- 25 million on a quarterly basis, or debt/EBITDA exceeds 5.0x, or the company's cash position falls below USD40 million. Pacnet, incorporated in Bermuda in June 2006, owns and operates Asia's largest privately owned submarine cable network. Pacnet provides data connectivity solutions to major telecommunications carriers, large multinational enterprises, and small- to medium- sized enterprises in Asia Pacific that require multi-national internet protocol-based (IP-based) solutions and connectivity. ==================== S O U T H K O R E A ==================== HANJIN GROUP: Urged to Prepare Survival Plan -------------------------------------------- Choi Kyong-ae at The Korea Times reports that financial regulators and the main creditor bank of Hanjin Group have urged the conglomerate to come up with a self-rescue plan as drastic as that put forward by the Dongbu Group to regain investor confidence. "Dongbu's aggressive restructuring measures have set a good precedent to follow for Hanjin Group and other debt-ridden conglomerates," Lee Sung-jae, head of the Financial Supervisory Service's corporate credit coordination team, told The Korea Times by telephone. Mr. Lee said he called on Hanjin Shipping, a flagship unit of the shipping and airline conglomerate, to come up with a "concrete" plan to sell some of its terminals, ships and other assets to reduce its debt, The Korea Times relates. In a steeper-than-expected restructuring plan, Dongbu Group has said it will raise KRW3 trillion ($2.8 billion) by selling its semiconductor business and other core assets to stay afloat. The move was hailed by the market, pushing up the share prices of Dongbu affiliates, the report notes. Pressured by growing concerns that companies with heavy debt may become another Tong Yang Group or STX Group, the main creditor, the Korea Development Bank (KDB) has asked Hanjin Shipping three times since 2003 to meet its requirements for financial health, according to The Korea Times. "There seems to be no immediate liquidity crisis this year for Hanjin, but a prolonged downturn in the shipping industry makes extending a financial helping hand to the company riskier than ever," a KDB official told The Korea Times. That's why the state-run bank wants an aggressive self-rescue program from Hanjin as well, the official said, asking not to be named, the report notes. Bloomberg News recalled that Korean Air said last month it will provide KRW150 billion ($141 million) to Hanjin to help ease the company's liquidity shortage. The shipping line has KRW736.4 billion of debt and loans maturing next year, compared with KRW58 billion in 2013, according to data compiled by Bloomberg. Its cash and cash equivalent was KRW506.6 billion at the end of June, Bloomberg disclosed. Korea-based Hanjin Shipping Co., Ltd. engages in the provision of marine transportation services. The Company mainly provides four categories of services: container service, bulk service, terminal service and third party logistics (3PL) service. Its container service provides transportation of reefer cargoes, dangerous cargoes, over-sized cargoes, industrial equipment and others. Its bulk service provides transportation of iron ores, coals, general merchandise, liquefied natural gas (LNG) and oil products. Its terminal service provides logistics services with a global network of 14 dedicated container terminals. Its 3PL service includes freight forwarding services, contract logistics and others. The Company also involves in the provision of ship repair yard services. KOOKMIN BANK: Faces FSS Special Inspections Over Irregularities --------------------------------------------------------------- Yonhap News Agency reports that the Financial Supervisory Service (FSS) on November 23 demanded that Kookmin Bank, one of South Korea's largest lenders, rectify its internal control system, saying special inspections will be under way over three allegations of irregularities involving Kookmin Bank executives and employees. The news agency relates that the FSS said it will launch two more special investigations this week into allegations of Kookmin Bank's illegal interest earnings from guaranteed loans and a suspected embezzlement of KRW9 billion (US$8.48 million) by Kookmin employees in charge of housing bonds. Yonhap notes that Kookmin has already been under an investigation since early this month on suspicion that its Tokyo branch was involved in running slush funds for the bank's management. It is unprecedented in the nation's banking industry that a major lender has been under three separate special probes at one time, the report says. Yonhap states that besides the allegations of irregularities, the bank's management drew fire for a massive investment loss in Kazakhstan and a controversial reshuffle of branch managers in Beijing. Kookmin purchased a 41.9 percent stake in a Kazakh bank for KRW940 billion in 2008, which has since inflicted losses worth KRW400 billion on the South Korean lender. According to the report, the watchdog body has decided to embark on multiple special inspections into Kookmin and issued the demand for its managerial overhaul, probably fearing that managerial problems at a major local bank, if neglected, will have negative ripple effects across the banking sector. FSS officials said the special inspections into allegations of Kookmin's illegal interest earnings and employee embezzlement began November 24 at the earliest, the report adds. South Korea-based Kookmin Bank Co. Ltd. provides various banking and other financial services to individuals, small- and medium- sized enterprises, and large corporations. ********* Tuesday's edition of the TCR-AP delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR-AP editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Tuesday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR-AP constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR-AP editor holds some position in the issuers' public debt and equity securities about which we report. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR-AP. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com Friday's edition of the TCR-AP features a list of companies with insolvent balance sheets obtained by our editors based on the latest balance sheets publicly available a day prior to publication. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Asia Pacific is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Valerie U. Pascual, Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Julie Anne L. Toledo, Frauline S. Abangan, and Peter A. Chapman, Editors. Copyright 2013. 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 or Nina Novak at 202-241-8200. *** End of Transmission ***