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T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Thursday, January 9, 2014, Vol. 17, No. 6
Headlines
A U S T R A L I A
LAGULALYA ABORIGINAL: Placed into special administration
PEEPTOE SHOES: Kordamentha Appointed as Administrators
C H I N A
KWG PROPERTY: S&P Rates Proposed US$-Denominated Sr. Notes 'B+'
KWG PROPERTY: Moody's Affirms Ba3 CFR & Rates Sr. Unsec. Notes B1
WUZHOU INT'L: Fitch Puts 'B(EXP)' Rating on Proposed USD Notes
I N D I A
A ONE STEELS: CRISIL Reaffirms 'B' Ratings on INR204.3MM Loans
AMBICA CHEMICALS: CARE Cuts Rating on INR5cr LT Loans to 'D'
AMON-RA IMPEX: ICRA Assigns 'B+' Rating to INR5cr LT Loans
ATHARVA EDUCATIONAL: CRISIL Reaffirms D Ratings on INR150MM Loans
AVADH COTEX: ICRA Assigns 'B+' Rating to INR13cr Cash Credit
BHAWANI CONSTRUCTIONS: CRISIL Rates INR70MM Term Loan at 'D'
BHURJI SUPERTEK: CRISIL Cuts Ratings on INR130MM Loans to 'D'
CONSORTIUM AUTOMOBILES: CRISIL Reaffirms B+ Rating on INR78M Loan
FERTICHEM COTSPIN: ICRA Reaffirms 'B' Rating on INR96.8cr Loan
GAJRA GEARS: CARE Upgrades Rating on INR23.13cr LT Loans to 'B-'
GATI INFRASTRUCTURE: CARE Reaffirms D Rating on INR206.35cr Loans
GOVINDAM FOOD: CRISIL Reaffirms 'B' Ratings on INR55MM Loans
GOWTHAMI SPINTEX: ICRA Reaffirms 'B' Rating on INR28.28cr Loans
GURANDITTA MAL: ICRA Reaffirms 'B' Ratings on INR15cr Loans
HI-TECH FROZEN: ICRA Assigns 'D' Ratings to INR11.8cr Loans
HIGH END: ICRA Rates INR35cr Term Loan at 'B+'
HOTEL R.S.R.: CRISIL Assigns 'B' Ratings to INR50MM Loans
INDEX SUPPLIERS: CRISIL Reaffirms 'D' Ratings on INR85MM Loans
JAINAM CABLES: ICRA Reaffirms 'B+' Ratings on INR10.45cr Loans
JILL MILL: ICRA Reaffirms 'B+' Ratings on INR7.54cr Loan
KTECH ENGINEERS: CRISIL Reaffirms 'B+' Rating on INR30MM Loan
KVR INDUSTRIES: CARE Reaffirms 'B' Rating on INR38.6cr LT Loans
LOT MOBILES: ICRA Upgrades Rating on INR5cr Loan From 'B+'
MANMEET ISPAT: ICRA Suspends 'B' Rating on INR5.5cr Loans
MID INDIA: ICRA Assigns 'B+' Rating to INR80cr Loans
MURLIDHAR TEX: ICRA Assigns 'B+ Ratings to INR8.58cr Loans
MUSKAN MEDICAL: CRISIL Assigns 'B' Ratings to INR120MM Loans
NEEV METOLOGIES: ICRA Assigns 'B' Ratings to INR6.65cr Loans
NEEV TECHNOCAST: ICRA Assigns 'B-' Ratings to INR9.78cr Loans
NSR STEELS: CRISIL Reaffirms 'D' Ratings on INR360MM Loans
ORCHID EXIM: CARE Assigns 'B+' Rating to INR12cr LT Loans
ORNET INTERMEDIATES: CRISIL Places 'B+' Rating on INR60MM Loan
P.S. INDUSTRIES: CRISIL Reaffirms 'B+' Ratings on INR80MM Loans
PAGRO FROZEN: ICRA Upgrades Ratings on INR30cr Loans to 'C+'
PRAKASHINI HOLDING: CARE Reaffirms B+/A4 Rating on INR8cr Loans
RASHMI SPONGE: ICRA Suspends 'B' Rating on INR43cr Loans
RIDHI SIDHI: ICRA Reaffirms 'B' Rating on INR7.65cr Loans
ROYAL TYRES: CRISIL Assigns 'B' Ratings to INR69MM Loans
S K TRANSLINES: CRISIL Reaffirms 'B+' Ratings on INR80MM Loans
SAFE DEVELOPMENT: ICRA Raises Rating on INR49.76cr Loans to 'B+'
SAKHI FOOD: CRISIL Ups Rating on INR52.6MM Term Loan to 'B'
SHANKER INT'L: ICRA Reaffirms 'B' Ratings on INR45cr Loans
SHARDA TIMBER: ICRA Reaffirms 'B' Ratings on INR35cr Loans
SUNIL GARG: ICRA Suspends 'C' Rating on INR10cr Loans
SUNIL SPONGE: CRISIL Assigns 'B+' Rating to INR137.5MM Loan
SURAJ TUBES: CARE Reaffirms 'B+' Rating on INR10.81cr LT Loans
SVEC CONSTRUCTIONS: ICRA Suspends 'D' Rating on INR318.76cr Loan
SWASTIK TRADING: ICRA Reaffirms 'B+' Rating on INR9.75cr Loan
TIRUPATI BALAJI: CRISIL Assigns 'B' Ratings to INR109MM Loans
VITTHAL CORPORATION: CARE Rates INR300cr LT Loans at 'B'
WINSOME YARNS: ICRA Suspends 'D' Ratings on INR480MM Loans
I N D O N E S I A
ALAM SUTERA: Fitch Rates Proposed US Dollar Notes at 'B+'
ALAM SUTERA: S&P Raises CCR to 'B+'; Outlook Stable
INDONESIA: S&P Assigns 'BB+' Rating to U.S.$-Denominated Bonds
J A P A N
TOKYO ELECTRIC: Fumio Sudo Formally Named as Chairman
N E W Z E A L A N D
NZ DIRECTORIES: Yellow Directories Gains Waiver From Banks
OCEANAGOLD CORP: To Cut Up to 25% Jobs Amid Falling Gold Prices
S I N G A P O R E
PACNET LTD: Fitch Puts Rating on $350-Mil. Sr. Notes at 'BB/RR1'
V I E T N A M
* VIETNAM: Over 400 State-Owned Firms Declared Bankruptcy in 2013
- - - - -
=================
A U S T R A L I A
=================
LAGULALYA ABORIGINAL: Placed into special administration
--------------------------------------------------------
Alison Bevege at NT News reports that Lagulalya Aboriginal
Corporation has been put into special administration because its
accounts are a shambles and it is insolvent.
NT News says auditors have shed light on why Lagulalya Aborigina,
which runs the community store on remote Bickerton Island, was put
into special administration in a General Purpose Financial Report
posted on the website of the Office of the Registrar of Indigenous
Corporations.
According to the report, the company was due to hold its annual
general meeting by November last year but has been exempted until
April 21. The exemption is valid until changed.
NT News relates that Lowrys Accountants found the books were in
disarray and the corporation was technically insolvent.
The report says a series of troubles noted in the last financial
year included superannuation not being paid, cash-in-hand figures
out by AUD82,461 and stocktake figures out by more than
AUD330,000.
NT News notes that the auditors found there was no evidence of the
amount of stock that should have been on hand as of June 30, let
alone evidence to support the last-minute adjustments.
"We are not in a position to be able to identify whether these
adjustments were as a result of obsolete stock, damaged stock or
stolen goods," the report said, NT News relays.
The corporation's liabilities exceeded its cash assets as of
June 30 and the auditors had "great concern" it would not be able
to pay its bills, NT News adds.
Lagulalya is run at the settlement of Milyakburra, where 170
people rely on the store for essential goods.
PEEPTOE SHOES: Kordamentha Appointed as Administrators
------------------------------------------------------
Yolanda Redrup at SmartCompany reports that popular women's shoes
and accessories retailer Peeptoe Shoes has been placed in
administration, as high overheads and increased competition led to
financial pressures.
The business, first started in 2007 by Nikki Hager, was placed in
administration on Jan. 7, with Janna Robertson --
jrobertson@kordamentha.com -- and Rahul Goyal --
rgoyal@kordamentha.com -- appointed as administrators from
KordaMentha.
Mr. Goyal told SmartCompany a number of Peeptoe's stores have now
been closed.
"We've closed a couple of loss-making stores including Little
Collins St in Melbourne, Castle Towers in Sydney's Castle Hill,
and in Queensland we've closed the Queen's Plaza store in
Brisbane," SmartCompany quotes Mr. Goyal as saying.
"Staff wise, there were nine stores across the eastern seaboard,
each store had two to three staff and then the head office had
eight because it included the warehouse."
Currently, all of Peeptoe's Westfield stores have remained open,
as has its pop-up shop in Surfers Paradise, SmartCompany notes.
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C H I N A
=========
KWG PROPERTY: S&P Rates Proposed US$-Denominated Sr. Notes 'B+'
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' long-term
issue rating to a proposed issue of U.S.-dollar-denominated senior
unsecured notes by KWG Property Holding Ltd. (BB-/Negative/--;
cnBB/--). At the same time, S&P assigned its 'cnBB-' Greater
China regional scale rating to the proposed notes. KWG will use
the proceeds from the proposed notes to refinance existing debt
and to finance existing and new projects. The ratings are subject
to S&P's review of the final issuance documentation.
The issue rating is one notch lower than the corporate credit
rating on KWG to reflect S&P's opinion that offshore noteholders
would be materially disadvantaged, compared with onshore
creditors, in the event of default. S&P anticipates that the
company's ratio of priority borrowings to total assets will likely
remain above its notching threshold of 15% for speculative-grade
companies in the next 12 months.
The corporate credit rating on KWG reflects the company's fairly
aggressive debt-funded expansion and its large exposure to the
high-end residential property segment. The company's established
market position in Guangzhou and its improving recognition in new
markets temper these weaknesses. KWG's more diverse geographic
and product mix than that of peers with a similar rating are added
strengths.
The negative outlook on KWG reflects S&P's expectation that the
company's cash flow adequacy and leverage could remain weak for
the current rating level. S&P's view is based on its expectation
of the company's weaker sales execution compared with peers',
lower margins due to price-cutting, and increasing debt from high
growth appetite and low asset churn.
KWG PROPERTY: Moody's Affirms Ba3 CFR & Rates Sr. Unsec. Notes B1
-----------------------------------------------------------------
Moody's Investors Service has assigned a B1 rating to the USD
senior unsecured notes proposed by KWG Property Holding Limited.
At the same time, Moody's has affirmed the company's Ba3 corporate
family rating and B1 senior unsecured debt rating.
The ratings outlook is negative.
RATINGS RATIONALE
The proceeds of the notes will be used to refinance its existing
debt and to fund its property projects.
"The proposed notes will provide funding to facilitate KWG's sales
in 2014 and improve its debt maturity profile as the majority of
the bond proceeds will be used for refinancing its existing debt,"
says Franco Leung, a Moody's Assistant Vice President and Analyst.
KWG's contracted sales reached RMB14.9 billion for January-
November 2013, on track to meeting its full-year target of RMB16
billion. Moody's expects KWG plans for contracted sales growth in
2014 and the proposed notes will provide funding for more
development expenditures.
The proposed notes will improve KWG's debt maturity profile as the
proceeds will also refinance its debt of shorter maturities.
Furthermore, the notes will reinforce KWG's key rating driver of
strong liquidity. Moody's estimates that its cash holding and its
projected operating cash flow can fully support its committed land
payments, repayment of maturing debt, and dividend payments of
around RMB5-RMB6 billion in the next 12 months.
"On the other hand, KWG will need time to rectify its relatively
weak credit metrics," adds Leung who is also the lead analyst for
KWG.
The proposed notes issuance will keep KWG's debt leverage and
interest expenses at the weaker end of the Ba corporate family
rating range, unless the company delivers better-than-expected
sales and uses the cash collected from property presales to reduce
the need to draw on construction loans.
Moody's anticipates that its adjusted interest coverage --
including the prorated shares of its jointly controlled entities -
- will stay around 2.5x in the next 12-18 months which is weak for
a Ba credit.
Thus, any aggressive debt-funded land acquisitions or weakening in
revenue generation could pressure its ratings.
KWG is developing its investment property portfolio. Moody's
estimates that its gross rental and hotel revenue will increase to
a level around 30% of the company's gross interest expenses in the
next 12 - 18 months.
These revenue streams will offer KWG some stability in regard to
its interest coverage when compared to those developers which only
have development income.
KWG's Ba3 rating continues to reflect its strong brand name,
supported by its good quality products, and its diversified
products, which consist of office, retail and residential
properties that command premium pricing. It also recognizes the
firm's good operating track record in Guangzhou, Chengdu, Suzhou
and Shanghai.
The negative outlook reflects Moody's concern that KWG's financial
flexibility will remain constrained by its high debt leverage. In
addition, its interest coverage is weaker than that of its
similarly rated domestic peers.
Moody's would consider downgrading KWG's ratings if it: (1) does
not achieve strong sales growth; (2) materially increases its
investment in projects, such that its liquidity or leverage
position comes under pressure; (3) shows evidence of a material
weakening of its profitability, and/or (4) shows deterioration in
interest coverage with adjusted EBITDA/interest falling below
2x -- 2.5x, or debt leverage further rising.
Given its negative outlook, the rating is unlikely to be upgraded.
However, the outlook would return to stable if KWG (1) continues
its prudent approach in financial management, including the
maintenance of a good liquidity buffer and its cautious approach
to business expansion, or (2) improves its interest coverage and
manages down its current debt leverage, such that its financial
flexibility improves.
The principal methodology used in this rating was the Global
Homebuilding Industry published in March 2009.
KWG Property Holding Limited is a Chinese property developer
founded in 1995. It had a total attributable land bank of around
9.1 million sqm in gross floor area in Guangzhou, Chengdu, Suzhou,
Beijing, Shanghai, Tianjin and Hainan as of 1H 2013. KWG mainly
develops mid- to high-end residential properties, office
buildings, shopping malls and hotels.
WUZHOU INT'L: Fitch Puts 'B(EXP)' Rating on Proposed USD Notes
--------------------------------------------------------------
Fitch Ratings has assigned China-based commercial property
developer Wuzhou International Holdings Limited's (Wuzhou,
B/Stable) proposed USD senior unsecured notes an expected rating
of 'B(EXP)'.
The notes are to be issued as a tap to the USD100m 13.75% notes
due 2018 issued in September 2013, with the same terms and
conditions. The notes are rated at the same level as Wuzhou's
senior unsecured rating of 'B' as they represent direct,
unconditional, unsecured and unsubordinated obligations of the
company. The final rating is contingent on the receipt of final
documents conforming to information already received.
Small-scale property developer: Wuzhou's rating is constrained by
its small scale compared with Fitch-rated peers. With historical
contracted sales of CNY1.2bn, CNY2.1bn and CNY2.8bn in 2010, 2011,
and2012 respectively, Wuzhou is still a small property developer
in China. It faces concentration risk with 55% of its contracted
sales in H113 derived from Jiangsu province and seven out of 11 of
its completed projects in Wuxi. It remains to be seen whether
Wuzhou can successfully transfer its business model from Wuxi to
other cities in China. As the number of projects under management
increases across different provinces, it will be challenging for
the company to maintain a high-quality tenant mix in each project.
Volatile commercial property sales: As a commercial property
developer in China, Wuzhou is exposed to higher risk than
residential property developers. Commercial property sales mainly
target investment demand, which can be adversely affected during
economic downturns or in an environment of tighter liquidity.
Investment demand is also highly dependent on brand reputation,
which is susceptible to operating performance of existing
projects. In general, cash flow projection from property sales is
less predictable for commercial property developers, compared with
residential property developers.
Strong commercial sites limited: With a longer list of
requirements, including high foot traffic, easy accessibility and
high residents' income levels, commercial property sites with
strong development potential are harder to come by than
residential sites. Wuzhou's upcoming projects are mostly situated
in third-tier cities. While the company enjoyed low land cost
(typically a few hundred CNY/sqm), it faces the risk of whether
there will be enough consumption demand in third-tier cities to
support retail outlets in the projects.
Operational success in Wuxi: Wuzhou has completed two wholesale
markets and five mixed-use commercial complexes in Wuxi,
establishing a critical mass in its hometown. Wuzhou has been
successful in selling the majority (80%-90%) of its project space
on a strata-title basis and keeping the remainder for lease
income. The company actively manages the tenant mix for shop
buyers after the projects open and its properties enjoy an average
occupancy rate of above 90%. Capitalising on its success and
experience in Wuxi, Wuzhou is now expanding in the eastern,
central, south-western and north-eastern parts of China. With a
quick churn-out business model, Wuzhou targets to grow its
contracted sales to CNY5bn in 2013 from CNY2.8bn in 2012. Wuzhou
recorded contracted sales of CNY4.7bn in the year to November
2013, up 87% yoy.
After-sale tenant-mix management: Wuzhou differentiates itself
from other commercial property developers by providing after-sale
tenant-mix management and negotiating leases with prospective
tenants on behalf of shop owners. In return, Wuzhou charges shop
owners a commercial management service fee. The fee is equal to
100% of the rental value in the first three years of the lease and
then 8%-10% of the rental value in the fourth year onwards. If
Wuzhou can continue maintaining an optimal tenant mix and high
occupancy rates in its existing projects, it could enhance its
brand reputation and attract more buyers to its future projects.
Strong network of buyers: Wuzhou's founder, Mr. Shu Cecheng, was
in the trading and manufacturing business before turning to
property development in 2004. Mr. Shu has an extensive business
network, which offers Wuzhou a pool of potential tenants and shop
buyers, especially in wholesale markets. This is crucial to
Wuzhou as it relies heavily on project sales, which generate cash
and enable the company to replenish its land bank quickly.
Sufficient liquidity: Fitch expects Wuzhou to have sufficient
liquidity to cover its short-term debts. As at mid-2013, Wuzhou
had CNY1.8bn of cash (of which CNY377m was restricted cash and
pledged deposits) and CNY1.6bn in undrawn credit facilities. That
is more than enough to cover its CNY835m debt to be repaid in the
coming 12 months. However, Wuzhou's financial flexibility is
limited because all of its debt is secured debt. The company plans
to diversify its funding sources and reduce its reliance on
secured debt. Also, the company plans to reduce the proportion of
trust loans in its portfolio to less than 25% in the next one-two
years from 33% as of end-H113 to reduce its overall borrowing
costs.
Positive: Future developments that may collectively lead to
positive rating actions include:
-- Annual contracted sales being sustained above CNY8bn while
maintaining current margins and credit metrics, and
-- Increase in geographical diversification by establishing its
presence in a greater number of provinces, and
-- Satisfactory operating conditions for completed projects, in
particular for those that have been open for more than three
years
Negative: Future developments that may, individually or
collectively, lead to negative rating action include
-- A significant reduction in annual contracted sales
-- Deviation from the current fast churn-out business model
-- Net debt/adjusted inventory being sustained above 40% (2012:
31%)
-- EBITDA margin staying below 20% on a sustained basis (2012:
32%)
-- Contracted sales/ total debt staying below 1.0x on a
sustained basis (2012: 1.2x)
Headquartered in Wuxi in Jiangsu province, Wuzhou is a commercial
property developer focusing on specialised wholesale market and
multi-functional commercial complexes in the second- and third-
tier cities in China.
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I N D I A
=========
A ONE STEELS: CRISIL Reaffirms 'B' Ratings on INR204.3MM Loans
--------------------------------------------------------------
CRISIL's ratings on the bank facilities of A One Steels India Pvt
Ltd continue to reflect ASIPL's modest scale of operations,
susceptibility of operating margin to volatility in raw material
prices, risks related to cyclicality in the infrastructure and
real estate sectors, and below-average financial risk profile,
marked by moderate net worth, aggressive gearing, and inadequate
debt protection metrics. These rating weaknesses are partially
offset by the entrepreneurial experience of the promoters and
established relationships with customers and suppliers.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 120 CRISIL B/Stable (Reaffirmed)
Foreign Currency
Term Loan 54.3 CRISIL B/Stable (Reaffirmed)
Letter of Credit 50 CRISIL A4 (Reaffirmed)
Term Loan 30 CRISIL B/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that ASIPL will continue to benefit from the
extensive experience of its promoters and established
relationships with customers and suppliers. The outlook may be
revised to 'Positive' if the company scales up its operations
while improving its profitability and capital structure.
Conversely, the outlook may be revised to 'Negative' if ASIPL
faces a slowdown in offtake, thereby adversely affecting its
revenue and margins, or if it undertakes a large debt-funded
capital expenditure programme, thereby leading to weakening of its
financial risk profile.
Update
ASIPL recorded flat revenue of INR787 million in 2012-13 (refers
to financial year, April 1 to March 31). Revenue growth was
constrained due to low power availability in Andhra Pradesh in the
first half of 2012-13 and lower offtake from customers.
Additionally, the margins also reduced to 7 per cent from about
8.5 per cent due to higher power and fuel charges on back of
substantial increase in tariff by Andhra Pradesh Electricity
Regulatory Commission (APERC) effective April 1, 2012.
ASIPL's financial risk profile remains constrained by aggressive
gearing of 2.27 times on net worth of INR114 million as on March
31, 2013. The company had weak debt protection metrics with
interest coverage and net cash accruals to total debt (NCATD)
ratios of 2.09 and 0.10 times, respectively, for 2012-13. ASIPL's
liquidity continues to be weak with modest cash accruals of
INR26.4 million in 2012-13, tightly matched with its repayments of
INR25.8, and fully utilised bank limits driven by its working-
capital-intensive operations.
ASIPL reported provisional profit after tax (PAT) of INR5.4
million on net sales of INR787 million for 2012-13 as against PAT
of INR16.2 million on net sales of INR798 million for 2011-12.
ASIPL set up in 2008 by Mr. Sandeep Kumar Jalan and his brother
Mr. Sunil Kumar Jalan, manufactures long steel products such as
mild steel (MS) billets, MS channels, and MS angles, which find
application in the infrastructure and real estate industries.
ASIPL has its manufacturing facilities at Hindupur (Andhra
Pradesh) with installed capacity of 21,000 MTPA each for
manufacturing MS billets, MS channels, and MS angles.
AMBICA CHEMICALS: CARE Cuts Rating on INR5cr LT Loans to 'D'
------------------------------------------------------------
CARE revises the rating assigned to the bank facilities of Ambica
Chemicals And Synthetics Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 5 CARE D Revised from
Facilities CARE B-
Rating Rationale
The revision in the rating assigned to the bank facilities of
Ambica Chemicals and Synthetics Private Limited primarily factors
in the consistent overdrawing in the cash credit account resulting
in delays in debt servicing due to the stressed liquidity
position.
Establishing a clear debt servicing track record with an
improvement in the liquidity position through better working
capital management and managing fluctuation in the raw material
price fluctuation in light of the competitive nature of the
industry remain the key rating sensitivities.
ACSPL, incorporated in August 1989, is engaged in the trading of
yarn, grey fabrics and processed fabrics. The company is promoted
by Mr Pravin Tayal and Mr Sanjay Tayal who arepart of the Tayal
group, one of leading textile groups in India. The Tayal group has
a diversified presence in the field of cotton textiles, real
estate and power.
During FY13 (refers to the period April 1 to March 31), ACSPL
achieved Profit after Tax (PAT) of INR0.08 crore on a Total
Operating Income (TOI) of INR88.55 crore as against a net loss of
INR0.13 crore on a TOI of 84.35 crore in FY12. During H1FY14
(provisional), ACSPL reported TOI of INR 41.05 crore.
AMON-RA IMPEX: ICRA Assigns 'B+' Rating to INR5cr LT Loans
----------------------------------------------------------
A long-term rating of '[ICRA]B+' has been assigned to INR0.50
crore, long-term, fund based facilities and INR11.67 crore,
unallocated bank lines of Amon-Ra Impex Private Limited. A rating
of [ICRA]A4 has been assigned to INR7.83 crore, short-term, non-
fund based facilities and INR11.67 crore, unallocated bank lines
of the company.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term, fund 5.00 [ICRA]B+ assigned
based facilities
Long-term/Short- 11.67 [ICRA]B+/[ICRA]A4 assigned
term unallocated
Short-term, non- 7.83 [ICRA]A4 assigned
fund based
The rating assignment takes into account the comfortable capital
structure of the company with healthy coverage indicators as well
as low working capital intensive nature of operation ensuring low
dependence on external capital. The ratings, however, are
constrained by the small scale of trading operations, limited
bargaining power with the trade partners and slow-value add,
import-based trading operations with weak margins. Further, the
margins remain susceptible to raw material price movements during
shipping and forex volatility on unhedged payables. ICRA also
notes that the company's product offerings remain limited and
supplier concentration remains high leading to risks for top-line
stability.
Amon-Ra Impex Private Limited was incorporated in 1995 by Mr.
Ashok Rajgor and is a small scale importer of tiles, floorings,
PVC resins, PVC co-polymers and structural fabrics. The company is
an indenting agent for Hanhwa Group of Industries, Korea and is
recently associated with Hiraoka & Company Limited, Japan.
Recent Results
For the twelve months ending March 31, 2013, Amon-Ra reported
profit after tax (PAT) of INR0.2 crore on an operating income of
INR25.9 crore as compared to a PAT of INR0.7 crore on an operating
income of INR24.5 crore for the twelve months ending March 31,
2012.
ATHARVA EDUCATIONAL: CRISIL Reaffirms D Ratings on INR150MM Loans
-----------------------------------------------------------------
CRISIL's rating on the long-term bank facilities of Atharva
Educational Trust continues to reflect instances of delay by
Atharva in servicing its debt, despite having adequate liquidity.
The delays are on account of financial indiscipline on the part of
Atharva's management.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long-Term 120 CRISIL D (Reaffirmed)
Bank Loan Facility
Rupee Term Loan 30 CRISIL D (Reaffirmed)
Atharva's revenue profile is also susceptible to regulations and
intense competition in the higher education sector. These rating
weaknesses are partially offset by Atharva's above-average
financial risk profile marked by moderate net worth
Update
Atharva has been delaying its monthly interest payment of around
INR1 million by 10 to 15 days, despite its adequate cash flows.
The trust's revenues registered a 4 per cent year-on-year growth
to INR241million in 2012-13 (refers to financial year, April 1 to
March 31); the revenue growth has been mainly driven by increase
in Atharva's intake capacity for some of the courses. Atharva's
operating margin increased to 24 per cent in 2012-13 on account of
moderation of its operating costs. Over the medium term, the
operating margin is expected to remain moderate.
Atharva's net worth is moderate at around INR416 million and its
gearing was low at around 0.09 times as on March 31, 2013. Atharva
is constructing a building of 12 floors in which the trust will
offer management courses; other than engineering and hotel
management. The cost of constructing the building is around INR150
million. The construction of the building has been completed and
only civil works is pending.
Atharva, set up in 1998, runs educational institutes, such as
Atharva College of Engineering, Atharva Institute of Information
Technology, Atharva School of Business, Atharva Hotel Management
and Catering Technology, and Atharva College of Fashion & Arts in
Mumbai (Maharashtra). The institutes offer various professional
courses, such as engineering, information technology, management
education, hotel management, and fashion designing.
AVADH COTEX: ICRA Assigns 'B+' Rating to INR13cr Cash Credit
------------------------------------------------------------
ICRA has assigned a long term rating of '[ICRA]B+' to the INR4
crore enhanced fund based bank facility of Avadh Cotex Private
Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 13.00 [ICRA]B+ assigned
The assigned rating continues to be constrained by the company's
weak financial profile as reflected by stretched liquidity
entailing high reliance on external borrowings and an adverse
capital structure along with weak debt coverage indicators. The
rating also takes into account the low value additive nature of
operations and intense competition on account of fragmented
industry structure leading to thin profit margins. The rating is
further constrained by vulnerability of profitability to adverse
fluctuations in raw material prices which are subject to seasonal
availability of raw cotton and government regulations on MSP and
export quota.
The ratings however consider the long experience of the promoters
in the cotton ginning and pressing industry, favourable location
in Gujarat giving it easy access to raw cotton and a positive
demand outlook for cotton and cottonseed.
Established in 2006, Avadh Cotex Pvt Ltd. is engaged in the
ginning of raw cotton to produce cotton seeds and cotton bales.
The business is promoted and managed by Bharatbhai J. Bhalala. He
has an experience of over 20 years in this industry. The factory
is located at Shapar, Rajkot, Gujarat. The company is equipped
with 24 ginning machines and has an annual installed capacity to
produce 240 cotton bales per day.
Recent Results
For the year ended March 31, 2013, the company reported an
operating income of INR58.38 crore and profit after tax of INR0.06
crore.
BHAWANI CONSTRUCTIONS: CRISIL Rates INR70MM Term Loan at 'D'
------------------------------------------------------------
CRISIL has assigned its 'CRISIL D' rating to the long-term bank
facility of Bhawani Constructions Pvt Ltd. The rating reflects
instances of delays by BCPL in servicing of its debt; the delays
have been caused by mismatch in the company's cash flows.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Rupee Term Loan 70.0 CRISIL D
BCPL also has a below-average financial risk profile, marked by a
small net worth and high gearing, and a modest scale of
operations. Moreover it is susceptible to the downturns in the
Indian real estate sector. These rating weaknesses are partially
offset by the extensive experience of BCPL's promoters in the real
estate development industry.
BCPL, based in Kolkata (West Bengal) was set up in 1986 by Mr.
Ashok Kumar Lakhotia and his wife, Mrs. Punam Devi Lakhotia. The
company is involved in construction and development of residential
and commercial complexes in Kolkata and Odisha.
For 2012-13 (refers to financial year, April 1 to March 31), BCPL
registered a profit after tax (PAT) of INR6.6 million on net sales
of INR168.5 million, against a PAT of INR19.6 million on net sales
of INR289.3 million for 2011-12.
BHURJI SUPERTEK: CRISIL Cuts Ratings on INR130MM Loans to 'D'
-------------------------------------------------------------
CRISIL has downgraded its ratings on the bank facilities of Bhurji
Supertek Industries Ltd to 'CRISIL D/CRISIL D' from 'CRISIL
B/Stable/CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 5 CRISIL D (Downgraded from
'CRISIL A4')
Cash Credit 25 CRISIL D (Downgraded from
'CRISIL A4')
Letter of Credit 30 CRISIL D (Downgraded from
'CRISIL A4')
Proposed Long-Term
Bank Loan Facility 64 CRISIL D (Downgraded from
'CRISIL B/Stable')
Term Loan 6 CRISIL D (Downgraded from
'CRISIL B/Stable')
The downgrade in ratings reflects the continued delays by BSIL in
servicing its term debt, continued overdrawals for more than 30
days in the fund-based working capital bank limits. BSIL has weak
liquidity because of large working capital requirements and lack
of financial discipline. The same has led to frequent
invocation/devolvement of non-fund-based facilities.
CRISIL believes that BSIL's liquidity will continue to remain weak
over the medium term because of the company's working-capital-
intensive operations and debt-funded capital expenditure plans.
The ratings continue to reflect the deterioration in BSIL's
financial risk profile due to large debt-funded capex plans, and
working-capital-intensive and small scale of operations in the
consumer durable segment. These rating weaknesses are partially
offset by the extensive experience of the company's management in
the consumer durable segment and its established relationship with
key customers.
Incorporated in 1986, BSIL provides end-to-end solution for
manufacturing of electronic goods including coolers, water filters
and geysers. The company also manufactures moulded plastic
structures/body primarily for original equipment manufacturers,
catering mainly to the electronics industry. The company is
promoted by Mr. Kamaljeet Singh Bhurji along with is son Mr.
Amarjeet Singh Bhurji. Mr. Kamaljeet Singh Bhurji has experience
of more than three decades in the plastic moulding industry.
CONSORTIUM AUTOMOBILES: CRISIL Reaffirms B+ Rating on INR78M Loan
-----------------------------------------------------------------
CRISIL's ratings on the bank facilities of Consortium Automobiles
Pvt Ltd continue to reflect CAPL's weak financial risk profile,
constrained by a small net worth, high total outside liabilities
to tangible net worth (TOLTNW) ratio and weak interest coverage.
These rating weaknesses are partially offset by CAPL's established
relationship with Tata Motors Ltd (TML; rated 'CRISIL AA-
/Positive/CRISIL A1+') and its extensive tenure as an automobile
dealer in Odisha.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 65 CRISIL B+/Stable (Reaffirmed)
Channel Financing 75 CRISIL A4 (Reaffirmed)
Rupee Term Loan 13 CRISIL B+/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that CAPL will benefit over the medium term from
its stable relationship with TML. The outlook may be revised to
'Positive' if the company sustains the improvement in its
profitability; or receives a substantial equity infusion which
enhances its capital structure and liquidity. Conversely, the
outlook may be revised to 'Negative' if CAPL's scale of operations
and profitability decline, and its stock in inventory increases
due to persistent sluggishness in demand, thus restricting the
company's liquidity and financial risk profile.
Update
In 2012-13 (refers to the financial year, April 1 to March 31),
CAPL's sales were flat at INR1.3 billion, vis-…-vis INR1.2 billion
in 2011-12; the company's operating margin improved to 2.6 per
cent from 2.2 per cent in the previous year. The commercial
vehicles industry in India has faced persistent sluggishness in
demand in 2013-14, induced by a weak economic environment. CAPL
reported steady performance in the first half of 2013-14. However,
the company's consistent sales growth and profitability with
sustained stringent control on its working capital cycle amid a
prevalent weak economic environment, is a key rating sensitivity
factor.
CAPL had a small net worth of INR46.7 million and a high TOLTNW
ratio of 5.3 times as on March 31, 2013, which restrict the
company's financial flexibility. CAPL has largely relied on its
bank lines to fund its working capital requirements, with an
average bank limit utilisation of around 90 per cent over the 12
months through August 2013. The company's high reliance on debt
has resulted in a high TOLTNW and interest outgo, thus
constraining the interest coverage ratio at 1.7 times for 2012-13.
In the absence of any significant capex plans, CRISIL believes
that CAPL will maintain its weak financial risk profile. The
company has debt obligations of around INR8.5 million in 2013-14,
and has adequate cash accruals, to service its debt timely.
For 2012-13, CAPL reported a net profit of INR4.3 million on net
sales of INR1.3 billion, vis-…-vis a net profit of INR1.9 million
on net sales of INR1.2 billion for 2011-12.
CAPL was incorporated in Odisha in 2004. The company was founded
by Mr. Vishal Dhawan, and is an authorised dealer of TML's
commercial vehicles.
FERTICHEM COTSPIN: ICRA Reaffirms 'B' Rating on INR96.8cr Loan
--------------------------------------------------------------
ICRA has reaffirmed the long term rating for INR96.80 crore fund
based limits of Fertichem Cotspin Limited at '[ICRA]B'. ICRA has
also reaffirmed the short term rating of '[ICRA]A4' for INR4.20
crore non fund based limits of FCL.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based Limits 96.80 [ICRA]B, reaffirmed
Non Fund Based
Limits 4.20 [ICRA]A4, reaffirmed
The ratings continue to reflect expected improvement in its
operating profitability marked with improvement in margins and
accruals on the back of improved demand for cotton yarn. While
ICRA notes that profits and accruals will moderate in H2 FY2014
with the cotton purchases from new season, however they will still
remain healthy given the continued buoyancy in export demand. The
ratings continue to be supported with its established customer
base and promoters experience in the line of business along with
funding support through infusion of equity and unsecured loans.
The ratings are however constrained by weak financial risk profile
of the company marked with highly leveraged capital structure and
weak debt coverage indicators, high working capital intensity of
operations, vulnerability to raw material price and highly
competitive nature of business. The rating also factors in, the
vulnerability of FCL's earnings in near term to policy level
decision of China on release of cotton reserves at lower prices
and curbing yarn imports. Further, ICRA also notes, that cotton
yarn being a commoditised product and spinning business is highly
competitive owing to its fragmented nature will remain as key
deterrent for sustaining high levels of profitability in long
term.
Going forward, ICRA expects FCL's profitability and cash accruals
from operations will remain susceptible to policy level changes
related to cotton and yarn trade. Any sharp weakening in
profitability levels or immediate announcement of further debt
funded capital expenditure will remain as key rating
sensitivities.
Fertichem Cotspin Limited was established in Oct 1991. The company
which was initially engaged in the trading of chemicals,
diversified into manufacturing of cotton yarn of coarse count
ranging from 4 to 20 counts in 1999. FCL started with
manufacturing of 100% cotton yarn with open end technology. In
FY08, it added high margin ring spun yarn to its product
portfolio. The company's spinning plant is located at Derabassi,
District Mohali, in Punjab with an installed capacity of 15696
spindles.
GAJRA GEARS: CARE Upgrades Rating on INR23.13cr LT Loans to 'B-'
----------------------------------------------------------------
CARE revises/reaffirms the rating assigned to the bank facilities
of Gajra Gears Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 23.13 CARE B- Revised
from CARE C
Short-term Bank
Facilities 25.25 CARE A4 Reaffirmed
Rating Rationale
The revision in the ratings of the bank facilities of Gajra Gears
Private Limited takes into account the marginal improvement in its
capital structure and liquidity during the past one year.
The ratings, however, continue to be constrained on account of its
high leverage and weak debt coverage indicators apart from its
presence in a highly competitive and cyclical auto component
industry.
The ratings, however, favorably take into account the vast
experience of the promoters in the auto component industry and the
long-standing relation of GGPL with its customers.
GGPL's ability to increase its scale of operations, improve its
profitability and capital structure while efficiently managing its
working capital would be the key rating sensitivities.
GGPL, part of the Gajra Group, was established in 1962 at Dewas
(Madhya Pradesh) for undertaking the business of manufacturing and
selling transmission gears. GGPL has an installed capacity for
manufacturing 4,210 Metric Tonnes Per Annum (MTPA) of different
types of gears through its CNC machines. The gears manufactured by
GGPL primarily find use in tractors and Commercial Vehicles
(mainly LCVs). Apart from catering to exports, GGPL also meets the
demand of OEMs and replacement market in India.
The Gajra Group (comprising of GGPL, Gajra Differential Gears
Limited (GDGL), and Elve Corporation, a partnership firm) was
established in 1950 with the formation of Elve Corporation
primarily for trading in diesel engines and spares. Later on, in
1962, it moved on to manufacturing automobile transmission gears
by setting up GGPL. The group further added to its capabilities by
setting up GDGL in 1991.
As per the audited results for FY13 (refers to the period April 1
to March 31), GGPL earned a PAT of INR2.95 crore (FY12: INR5.47
crore) on a total operating income of INR140.34 crore (FY12:
INR158.18 crore). Furthermore, as per the provisional results for
H1FY14, GGPL earned a PAT of INR0.67 crore on a total operating
income of INR74.82 crore.
GATI INFRASTRUCTURE: CARE Reaffirms D Rating on INR206.35cr Loans
-----------------------------------------------------------------
CARE reaffirms the ratings assigned to the bank facilities of Gati
Infrastructure Private Ltd (Erstwhile Gati Infrastructure Ltd).
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 206.35 CARE D Reaffirmed
Facilities
Rating Rationale
The rating continues to remain constrained on account of a delay
in the servicing of debt obligations.
Gati Infrastructure Pvt Ltd is a special purpose vehicle (SPV)
promoted by Mr M K Agarwal & associates along with his group
company Amrit Jal Ventures P Ltd to set up a 110 MW
run-of-the-river, Chuzachen hydro electric project (HEP) in the
state of Sikkim. The project is located on the tributaries of
Teesta River - Rangpo and Rangli, in east Sikkim. The project was
awarded to GIPL under an implementation agreement entered into
between the Government of Sikkim (GoS), Sikkim Power Development
Company for a period of 35 years from the COD.
Total cost of the project as per earlier review was estimated at
INR1,045 crore to be funded with debt to equity ratio of 2x. Due
to a delay in the project execution, the project cost has been
revised to INR1,189 crore and was funded by a debt of INR770 crore
and equity of INR419 crore as on May, 2013.
The company has achieved COD in May 2013.
GOVINDAM FOOD: CRISIL Reaffirms 'B' Ratings on INR55MM Loans
------------------------------------------------------------
CRISIL's rating on the bank facilities of Govindam Food Products
Private Limited continue to reflect its below-average financial
risk profile, marked by modest networth, and modest scale of
operations in the intensely competitive wheat flour industry.
These rating weaknesses are partially offset by the extensive
industry experience of GFPPL's promoters.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 35 CRISIL B/Stable (Reaffirmed)
Term Loan 20 CRISIL B/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that GFPPL will continue to benefit over the
medium term from the extensive industry experience of its
promoters'. The outlook may be revised to 'Positive' if the
company significantly improves its revenues and profitability,
while maintaining a comfortable capital structure. Conversely, the
outlook may be revised to 'Negative' if GFPPL's financial risk
profile deteriorates, most likely due to large, debt-funded
capital expenditure or sharp decline in its revenues or
profitability, leading inadequate cash accruals for meeting
maturing term debt obligations.
Incorporated in 2010, GFPPL processes wheat to produce wheat flour
(atta), refined wheat flour (maida), cattle feed (cokar), and
wheat semolina (suji). The company is owned and managed by Mr.
Rajesh Ku Bansal, Mr. Vikram Ku Rajoria, and Mr. Pradeep Kemka. It
has its manufacturing facility at Dhanbad (Jharkhand) and
registered office in Kolkata (West Bengal).
GOWTHAMI SPINTEX: ICRA Reaffirms 'B' Rating on INR28.28cr Loans
---------------------------------------------------------------
ICRA has reaffirmed rating of '[ICRA]B' and a short term rating of
'[ICRA]A4' for INR30.00 crore fund based limits of Gowthami
Spintex (India) Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based limits 28.28 [ICRA]B reaffirmed
Non Fund Based
Limits 1.72 [ICRA]A4 reaffirmed
The rating reaffirmation factors in the low scale of operations of
GSL resulting in low economies of scale. Further, the fragmented
spinning industry with high competition limits GSL's ability to
pass on any hike in raw material prices, which are quite volatile.
GSL had net level losses in the first year of operations resulting
in a significant deterioration of the net worth which improved
marginally in FY13. GSL also has a poor capital structure with
gearing of 11.97x times as on March 31st 2013 resulting in weak
coverage indicators. The cash accruals from operations have been
insufficient to service debt repayments in FY13 (DSCR of 0.85 in
FY13) necessitating support through unsecured loans from the
promoters. Further, owing to 100% debt funded capex in the current
year, the capital structure is expected to remain weak. With
increasing debt servicing obligations going forward, improvement
in cash accruals will be critical for timely debt servicing.
ICRA however, draws comfort from the experience of promoters in
the industry; GSIL's promoters operate a 43200 spindle unit in a
group company - The Gowthami Solvent Oils Limited (Rated at ICRA
BB- stable /A4). Further, GIPL's manufacturing unit is favourably
placed with regard to raw material procurement owing to its
proximity to major cotton growing regions.
GSIL is engaged in the manufacturing of cotton yarn in counts
ranging from 30s to 40s. The spinning unit is located at Tanuku in
Andhra Pradesh; GSIL had set up an initial capacity of 14400
spindles. The company also has auto-coners. GSIL is a part of
Gowthami group, the main company being The Gowthami Solvent Oils
Limited which is into production of rice bran oil and also cotton
yarn manufacturing. GSIL commenced producing cotton yarn since
September 2011. For FY12, GSIL recorded operating income of
INR18.21 crore and PAT of -4.00 crore.
Recent Results
GSL has, for the year ended March 31, 2013, reported an operating
income of INR47.33 crore and a net profit of INR0.79 crore whereas
the financial statements prepared for the year ended March 31,
2012 reported an operating income of INR18.21 crore and net loss
of INR4.00 crore.
GURANDITTA MAL: ICRA Reaffirms 'B' Ratings on INR15cr Loans
-----------------------------------------------------------
ICRA has reaffirmed the rating of '[ICRA]B' for the INR15.00 crore
fund based and proposed limits of Guranditta Mal Mohan Lal.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based
Facilities 12.20 [ICRA]B (reaffirmed)
Proposed
(Unallocated
Limits) 2.80 [ICRA]B (reaffirmed)
The rating continues to be constrained by GMML's weak financial
profile, reflected by low profitability metrics, high gearing and
consequently weak debt coverage indicators. The rating also takes
into account high intensity of competition in the industry and
agro climatic risks, which can affect the availability of paddy in
adverse weather conditions. The rating however, favorably takes
into account proximity of the mill to major rice growing area
which results in easy availability of paddy and demand prospects
of rice that is expected to remain good as rice is a staple food
grain and the position of India is world's second largest producer
and consumer of rice.
Guranditta Mal Mohan Lal is a partnership firm, was set up in 1978
by Mr. Roshan Lal and Mr. Adarsh Kumar. GMML is engaged in
processing and export of basmati rice to countries in the Middle
East. The plant is located at Fazilka (Punjab) which has a milling
capacity of 4 tonnes per hour and a sortex machinery with a
capacity of 4 ton/hr.
Recent Results
During the financial year 2012-13, the firm reported a profit
after tax (PAT) of INR0.09 crore on an operating income of
INR23.90 crore as against PAT of INR0.05 on an operating income of
INR16.12 crore in FY12.
HI-TECH FROZEN: ICRA Assigns 'D' Ratings to INR11.8cr Loans
-----------------------------------------------------------
ICRA has assigned a long-term rating of '[ICRA]D' to the fund-
based facilities aggregating to INR11.80 crores of Hi-Tech Frozen
Facilities Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based Limits
(Term Loan) 5.31 [ICRA]D assigned
Fund Based Limits
(Cash Credit) 5.00 [ICRA]D assigned
Fund Based Limits
(Proposed Limits) 1.49 [ICRA]D assigned
The ratings assigned primarily reflect the regular delays in debt
servicing by HTFFPL arising on account of stretched liquidity
position which also has been due to its low profitability margins
and high working capital intensity of operations. The ratings are
further constrained by the company's small size of operations and
limited track record of the company's promoters in cold storage
business. ICRA further notes that the company's profitability is
exposed to agro-climatic risks and also to adverse fluctuations in
prices of traded items. While assigning the ratings, ICRA has
taken into account of the locational advantages by virtue of
proximity to consumption centers and favorable demand outlook for
cold storage facilities in India.
Hi-Tech Frozen Facilities Private Limited was incorporated by Mr.
Vijay Shah for setting up a Frozen & Cold Chain Facility in Surat,
Gujarat. The cold chain facility commenced operations in FY 2011
and has an installed cold storage capacity of 10,000 MT. The
company also has two refrigerated trucks of 7 MT and 9 MT
capacities for transporting the farm produce to cold storage
facility and then to the consumption centers.
The cold storage facility was set up under the aegis of the
"Integrated Cold chain Infrastructure Project Scheme" launched by
Ministry of Food Processing Industries, Govt. of India under which
financial assistance in the form of grant-in-aid @ 50% of the
total cost of plant and machinery and technical civil works is
given to the company (subject to a maximum grant of INR10.00
crore). HTFFPL received a total grant of INR7.20 Cr under the
scheme.
Recent Results
For FY 2013, the company reported profit after tax of INR0.02 Cr.
on an operating income of INR25.91 Cr. For FY 2012, the company
reported profit after tax of INR0.01 Cr. on an operating income of
INR24.10 Cr.
HIGH END: ICRA Rates INR35cr Term Loan at 'B+'
----------------------------------------------
ICRA has assigned the long-term rating of '[ICRA]B+' to the
INR35.00 crore proposed term loan of High End Infratech Pvt. Ltd.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-Based Limit- 35.00 [ICRA]B+ assigned
Proposed Term
Loan
The assigned rating takes into account the good track record of
the promoters in the real estate sector, favorable location of the
project (Raj Nagar Extension, Ghaziabad) and fully paid status of
the project land.
The rating is however constrained by high approval and execution
risk given that construction work has not yet begin and pending
financial closure of the project. The rating is further
constrained by the exposure to single project and high competition
posed by other completed and upcoming projects which increases the
market risk in the project being developed. Nonetheless,
satisfactory execution and strong bookings demonstrated by the
Paradise-1 project being developed under the associate concern
'High End Infratech' shall the company in marketing this project.
Going forward, ability of the company to obtain required statutory
approvals, achieve financial closure in a timely manner and
satisfactory project execution would constitute key rating
sensitivities.
Incorporated in February 2008, High End Infratech Private Limited
is developing its first project 'Paradise-2' in Raj Nagar
Extension, Ghaziabad (Uttar Pradesh). It is a residential project
to be developed on the land area of ~239,000 sq. ft. with 560
flats. The project cost is estimated at INR148.57 crore (including
land cost of INR22.94 crore). The project is to be funded by
promoter's contribution of INR40.0 crore, proposed bank term loan
of INR38.0 crore and remaining is to be funded through costumer
advances. As on Dec. 5, 2013, company has spent INR25.79 crore on
the project.
HIPL is promoted by Mr. Pramod Chand Gupta, Mr. Rajesh Kr. Jodhani
and Naresh Pal Singh who have executed various residential
projects in the Delhi-NCR region through different entities.
HOTEL R.S.R.: CRISIL Assigns 'B' Ratings to INR50MM Loans
---------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable' rating to the long-term
bank facilities of Hotel R.S.R. Apple tree.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Long-Term Loan 42.5 CRISIL B/Stable
Proposed Long-Term
Bank Loan Facility 7.5 CRISIL B/Stable
The rating reflects Hotel RSR's exposure to risks associated with
the timely completion and stabilisation of its ongoing hotel
project. These rating weaknesses are partially offset by the
firm's healthy growth prospects on account of its advantageous
location.
Outlook: Stable
CRISIL believes that Hotel RSR will benefit from the established
brand of the RSR group and the location advantage of the hotel.
The outlook may be revised to 'Positive' upon timely and
successful completion and stabilisation of operations of the hotel
or higher-than-expected occupancy rates resulting in greater-than-
expected cash accruals. Conversely, the outlook may be revised to
'Negative' in case the project faces time or cost overruns, or it
generates less-than-expected cash accruals due to lower revenues
and profitability, affecting its financial risk profile.
Established in 2013 as a partnership firm, Hotel RSR is
constructing a three-star hotel at Sivakasi in Tamil Nadu. The
firm is promoted by Mr. R Shanmugaiah, his wife Mrs. S Dhanalaxmi
and his son Mr. R S Mahindaran.
INDEX SUPPLIERS: CRISIL Reaffirms 'D' Ratings on INR85MM Loans
--------------------------------------------------------------
CRISIL's rating on the long-term bank facilities of Index
Suppliers Pvt Ltd continues to reflect delays by ISPL in servicing
its debt; the delays have been caused by the company's weak
liquidity.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 59.5 CRISIL D (Reaffirmed)
Rupee Term Loan 25.5 CRISIL D (Reaffirmed)
ISPL also has a weak financial risk profile and working-capital-
intensive operations. However, the company benefits from the
extensive experience of its promoters in the steel trading
business and its established customer relationships.
ISPL, based in Kolkata (West Bengal) and promoted by Mr. Devendra
Kumar Singhania, trades in various steel products. The company
procures the products from in and around Kolkata, where it also
sells them. ISPL began its operations in steel in 1995; it started
a coke manufacturing unit in Dhanbad (Jharkhand) in 2011.
JAINAM CABLES: ICRA Reaffirms 'B+' Ratings on INR10.45cr Loans
-------------------------------------------------------------
The long term rating of '[ICRA]B+' has been reaffirmed for
INR10.45 crore (increased from INR10.00 crore) fund based
facilities of Jainam Cables (India) Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit
Facility 10.00 [ICRA]B+ reaffirmed
Term Loan 0.45 [ICRA]B+ reaffirmed
The rating reaffirmation takes into account JCPL's small scale of
operations; its thin profit margins due to low value additive
nature of operations coupled with intense competition on account
of the fragmented industry structure; the company's high gearing
levels, weak coverage indicators and the vulnerability of its
profitability to adverse fluctuations in the raw material prices.
The rating, however, favourably considers the longstanding
experience of the promoters in the copper wires and cables
manufacturing business; and the company's established and
diversified customer base.
Incorporated in 2001, Jainam Cables (India) Private Limited is
engaged in manufacturing copper wires and cables. The sole
manufacturing unit of the company is located at Kathwada GIDC,
Ahmedabad and has an annual production capacity of 1200 MT of
0.3mm copper wires. The company was founded by Mr. Harisingh
Rajput, who started the business under a proprietorship concern
M/S Jainam Cable Industries. The entity was converted in to a
private limited company, Jainam Cables (India) Private Limited
w.e.f. 1st April 2012. The company's product profile consists of
copper wires, PVC flexible cable, house wiring, submersible flat
cables, welding cables and power & control cables which are ISI
marked. The company is "ISO 9001:2000" certified.
In FY13, JCPL reported an operating income of INR39.31 crore and
profit after tax of INR0.15 crore as against an operating income
of INR40.82 crore and profit after tax of INR0.24 crore during
FY12.
JILL MILL: ICRA Reaffirms 'B+' Ratings on INR7.54cr Loan
--------------------------------------------------------
ICRA has reaffirmed the long-term rating of '[ICRA]B+' assigned to
the INR3.54 crore term loan facilities and INR4.00 crore fund
based limits of Jill Mill Non Woven Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based Limits- 3.54 [ICRA]B+ reaffirmed
Term Loan
Fund Based Limits- 4.00 [ICRA]B+ reaffirmed
Cash Credit
The reaffirmation of rating takes into account the company's small
size of operations, its limited track record in manufacturing of
non-woven fabric, and weak financial profile characterized by thin
profit margins and stretched capital structure. The rating further
takes into account the intense competitive pressures from both
organized and unorganized players, the company's low bargaining
power with suppliers and vulnerability of its profitability to
adverse fluctuations in raw material costs.
The rating, however, draws comfort from the longstanding
experience of the promoters in the textile business, the healthy
plant utilization levels and the diverse customer profile of the
company. ICRA notes that the ability of the company to effectively
manage receivable and inventory position remains critical to
maintain a comfortable liquidity position, going forward.
Incorporated in the year 2011 by Mr. Mahavirchand Daga, Mr.
Nishant Daga and Mr. Dharmesh Jain, Jill Mill Non Woven Private
Limited is engaged in the manufacturing and marketing of
Polypropylene (PP) non-woven fabric. JMNWPL commissioned a
manufacturing facility in Surat, Gujarat with an installed
capacity to produce 3,000 MTPA of non-woven fabric which commenced
commercial production in November 2012. JMNWPL has the capability
to manufacture non-woven fabric rolls ranging from 10 gram per
square meter (GSM) to 200 GSM depending upon the customer
requirement. The promoters have a longstanding experience in the
textile business through their group companies.
For FY 2013, the company has reported net loss of INR0.04 crore on
an operating income of INR9.77 crore.
KTECH ENGINEERS: CRISIL Reaffirms 'B+' Rating on INR30MM Loan
-------------------------------------------------------------
CRISIL's ratings on the bank facilities of Ktech Engineers
Builders Co Pvt Ltd continue to reflect the company's small scale
of operations, and the geographic concentration in its revenue
profile. These rating weaknesses are partially offset by the
extensive industry experience of Ktech's promoters, and the
company's healthy financial risk profile, marked by its
comfortable gearing and adequate debt protection metrics.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 50 CRISIL A4 (Reaffirmed)
Cash Credit 30 CRISIL B+/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that Ktech will continue to benefit over the
medium term from the promoters' extensive industry experience. The
outlook may be revised to 'Positive' if the company significantly
scales up its operations, diversifies its revenue profile, and
improves its profitability, thereby enhancing its business risk
profile. Conversely, the outlook may be revised to 'Negative' if
Ktech's financial risk profile weakens, because of a debt-funded
capital expenditure (capex) programme, or a decline in its
profitability margins, or a significant increase in its working
capital requirements.
Update
During 2012-13 (refers to financial year, April 1 to March 31),
Ktech reported an operating income of INR179 million, vis-…-vis
INR172 million in 2011-12. The stagnancy in the company's scale of
operations is driven by high geographic and customer concentration
in a small order book of around INR110 million as on November 30,
2013. CRISIL believes that Ktech's operating income will continue
to range between INR170 million and INR180 million over the medium
term, because of its small order book. Ktech reported an operating
margin of 7.8 per cent in 2012-13; CRISIL believes that the
company will maintain its operating margin between 7.0 and 8.0 per
cent over the medium term.
Ktech has a healthy financial risk profile, marked by gearing of
0.59 times, interest coverage ratio of 3.5 times and a net cash
accruals to total debt (NCATD) ratio of 0.4 times as on March 31,
2013. In the absence of any debt-funded capex and supported by a
moderate operating margin, CRISIL believes that Ktech will sustain
its healthy financial risk profile over the medium term.
Ktech has adequate liquidity, marked by average utilisation of its
overdraft facility of INR30 million at 72 per cent, and the
absence of significant debt obligations. Ktech raises monthly
bills with its customers and receives payments within two days.
Hence, the company has maintained nil debtors over the past 5
years. Between two subsequent bills, the company funds its working
capital requirement from its overdraft limit.
Ktech was set up as a sole proprietorship firm by Mr. Krishan
Kakar in 1952. The firm was reconstituted as a partnership firm in
1998, when the founder's son, Mr. Praveen Kakar, was appointed as
a partner. In 2003, Ktech was appointed as a private limited
company, and provides civil construction services.
Ktech reported a net profit of INR5.6 million on net sales of
INR178 million for 2012-13, vis-…-vis a net profit and revenues of
INR5.2 million and INR150 million, respectively, in 2011-12.
KVR INDUSTRIES: CARE Reaffirms 'B' Rating on INR38.6cr LT Loans
---------------------------------------------------------------
CARE reaffirms the ratings assigned to the bank facilities of KVR
Industries Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 38.60 CARE B Re-affirmed
Short-term Bank
Facilities 1.00 CARE A4 Re-affirmed
Rating Rationale
The ratings continue to remain constrained by the limited track
record of the company in the paper industry, volatility in raw
material and finished goods prices, power shortage in the State of
Andhra Pradesh, moderate gearing ratios and stretched liquidity
position with persistent high utilization of the bank borrowings.
The ratings also take into account adverse impact on the
operations of the company for a limited time period during Q2FY14
(refers to the period July 1, 2013 to September 30, 2013) due to
political disturbance in the State leading to strain on cash
flows.
The ratings, however, are underpinned by the experienced
promoters, moderate client base and improvement in revenue during
FY13 (refers to the period April 1 to March 31). The ability of
the company to improve the profitability and liquidity position is
the key rating sensitivity.
Incorporated in October 1999, KVR Industries Limited is promoted
by Dr Kotha Venkata Rao. The company is engaged into manufacturing
of paper with a prime focus on Newsprint and Cremwove varieties.
KVRIL has a manufacturing unit of 30,000 metric ton (MT) capacity
in Srikakulum district of Andhra Pradesh.
During FY13, KVRIL posted a PBILDT of INR15.42 crore (FY12 -
INR14.35 crore) and PAT (after deferred tax) of INR3.07 crore
(FY12 - INR 3.04) crore on a total operating income of INR93.95
crore (FY12 - INR82.62 crore). As per the provisional financials
for 7MFY14, KVRIL has achieved sales of INR56.69 crore, PBILDT of
INR8.46 crore and PAT of INR2.14 crore.
LOT MOBILES: ICRA Upgrades Rating on INR5cr Loan From 'B+'
----------------------------------------------------------
ICRA has upgraded the long-term rating assigned to INR5.00 crore
fund based limits of Lot Mobiles Private Limited from '[ICRA]B+'
to '[ICRA]BB'. The long term rating carries a Stable outlook.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based- 5.00 Upgraded from [ICRA]B+
Cash Credit to [ICRA]BB (Stable)
The rating upgrade primarily takes into account healthy increase
in operating income of the company from INR48.95 crore in FY13 to
INR137.08 crore in first eight months of FY14 driven by both
volumetric growth upon increase in number of stores to 73 (as on
November 2013) from 33 (as on March 2013) and increase in average
selling price of mobile phones with LMPL's focus on smart phones
whose average selling price is higher than feature phones. The
rating is also aided by comfortable coverage indicators and
capital structure with gearing of 0.24 times as on 30th November
2013, though debt funded capital expenditure to expand stores from
73 to 100 by March 2014 is likely to have an adverse impact on the
capital structure in the near term. The rating continues to factor
in more than two decades of promoters' experience in mobile
retailing business and operational support from associate
companies, Big C Mobiles Private Limited having more than 100
mobile retail outlets in Andhra Pradesh under the brand 'Big C'
and Celikon Impex Private Limited, manufacturer of mobile phones
under the brand name 'Celkon'.
The ratings, however, continues to the constrained by LMPL's low
operating margins owing to trading nature of the business and high
geographic concentration of the operations with all the stores
located in Andhra Pradesh, which is accentuated by the fact that
44% of the stores are in Hyderabad region. The rating is also
constrained by high competition in the industry from other retail
chains, unorganized players and e-tailers.
Going forward, LMPL's ability to expand its operations while
withstanding the dynamics and competitive forces of the industry
and to maintain its margins and capital structure are the key
rating sensitivities from credit perspective.
Incorporated in 2012, Lot Mobiles Private Limited (LMPL) is into
retailing of telecommunication devices, particularly mobile
phones, tablets and telecommunication services through a chain of
multi-brand and multi service outlets under the brand name of
'LOT'. At present, LMPL has a total 73 retail outlets in various
cities of Andhra Pradesh selling mobile communication devices of
brands such as Apple, Blackberry, Celkon, HTC, Karbonn, LG,
Micromax, Nokia, Samsung, Sony, etc.
Recent Results
The company has reported an operating income of INR137.05 crore
and profit before tax of INR2.37 crore in 8MFY2014. The company
had reported an operating income of INR48.95 crore and profit
after tax of INR0.54 crore in FY2013.
MANMEET ISPAT: ICRA Suspends 'B' Rating on INR5.5cr Loans
---------------------------------------------------------
ICRA has suspended the '[ICRA]B' rating assigned to the INR5.50
crore fund-based facilities of Manmeet Ispat Pvt. Ltd. The
suspension follows ICRA's inability to carry out a rating
surveillance in the absence of the requisite information from the
company.
According to its suspension policy, ICRA may suspend any rating
outstanding if in its opinion there is insufficient information to
assess such rating during the surveillance exercise.
MID INDIA: ICRA Assigns 'B+' Rating to INR80cr Loans
----------------------------------------------------
ICRA has assigned long term rating of '[ICRA]B+' to INR80 crore
long term bank facilities of Mid India Creations.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term fund
based limits 80.00 [ICRA]B+/Assigned
The rating takes into account the favorable project location on
Indore bypass road, which has many upcoming residential and
commercial projects nearby. Further, the rating also takes into
account well experienced promoters in construction and real estate
industry. In addition, the project is supported by low funding
risks with sanction of term loans having favorable debt profile
with a maturity of eight years and ballooning repayments. ICRA
also draws comfort from the low approval risks given that
construction approvals are in place and firm has right to develop
the land for project being executed. The rating is however
constrained due to execution risks with regard to timely
completion within planned costs, given that the project is still
in nascent stage. Given the early stages of construction and
initial delays in construction progress, commencement of hotel
operations by October 2014 remains challenging. Subsequently,
ability to achieve planned occupancies and realisation and thus
generate adequate cash accruals to meet the repayments starting
from December 2014 will be critical. Further, the rating factors
in the concentration risk of the revenue stream by virtue of
single hotel property and risks inherent in a partnership firm.
Going forward, timely completion of the project within estimated
costs and subsequently, achieve targeted realisations and
occupancies will be crucial for its timely debt servicing and
hence will remain the key rating sensitivities.
Mid India Creations is partnership firm incorporated on October 4,
2011 under Limited Liability Partnership Act 2008. MIC has three
partners belonging to BCM Group and Naidunia Group of Madhya
Pradesh and Surana Group of Jaipur. BCM Group is known name in
Madhya Pradesh and has undertaken many real estate projects in the
past. Naidunia Group is engaged in print media business in Madhya
Pradesh and also has presence in information technology services.
Surana Group has presence in jewellery and construction business
and also operates multiplex, hotel and convention centre.
MURLIDHAR TEX: ICRA Assigns 'B+ Ratings to INR8.58cr Loans
----------------------------------------------------------
ICRA has assigned '[ICRA]B' rating to the INR8.58 crore fund based
facilities of Murlidhar Tex Prints Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based
Term Loan I 0.91 [ICRA]B assigned
Fund Based
Term Loan II 5.17 [ICRA]B assigned
Fund Based-
Cash Credit 2.50 [ICRA]B assigned
The rating assignment takes into account the company's weak
financial position as reflected in the small size of operations,
low profitability and high working capital intensity of
operations. Further the ratings incorporate the vulnerability of
operations to the cyclicality observed in the textile industry and
intensely competitive business environment owing to the highly
fragmented nature of the industry. ICRA further notes Murlidhar
Tex Prints Private Limited's high level of gearing and weak
coverage indicators which may further stretch on account of
ongoing capital expenditure.
The rating, however, draws comfort from the long track record of
the company's promoters in the fabric processing industry and
locational advantage on account of proximity to sources of key raw
materials and end customers.
Murlidhar Tex Prints Private Limited was incorporated in October
2007 and is co-promoted by Mr. Kailash Chaudhary and his son Mr.
Abhishek Chaudhary. The company is engaged in the processing of
synthetic and cotton fabrics on job work basis and started
commercial operations in March 2008. The fabrics processed by the
company are used to make saris, dress materials and other
garments. MTPPL's manufacturing unit is located in Surat, Gujarat
and has the capacity to process 35000 meters of fabric a day.
Recent Results
MTPPL recorded a net profit of INR0.06 crore on an operating
income of INR10.55 crore for the year ending March 31, 2013.
MUSKAN MEDICAL: CRISIL Assigns 'B' Ratings to INR120MM Loans
------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable' rating to the long-term
bank facilities of Muskan Medical Centre Private Limited.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 105 CRISIL B/Stable
Term Loan 15 CRISIL B/Stable
The ratings reflect MMCPL's exposure to execution and offtake
related risks in respect to its upcoming multi-speciality hospital
project. These rating weaknesses are partially offset by the
extensive experience of MMCPL's promoters in the medical industry.
Outlook: Stable
CRISIL believes that MMCPL will continue to benefit from the
extensive experience of its promoters in the hospital industry.
The outlook may be revised to 'Positive' in case the firm
implements its ongoing project without any delay and exhibits
higher than expected occupancy levels, leading to significantly
higher cash accruals. Conversely, the outlook may be revised to
'Negative' if there is increased pressure on MMCPL's liquidity,
caused most likely by any significant time or cost overrun in the
ongoing hospital project and delay in commencement of operations.
MMCPL, incorporated in 2012 by Dr. Rakesh Malhotra, Dr. Sandeep
Gulati, Dr. Rajeev Motiani and Dr. Gulab Gupta is in the process
of setting up a 120 bed super specialty hospital in Noida. Dr.
Malhotra also operates a nursing home 'Muskan Medical Centre'
whereas the other promoters are well reputed medical practitioners
in the Noida region. The registered office of the company is in
Noida, Uttar Pradesh. The hospital is expected to commence
operations in the third quarter of 2014-15 (refer to financial
year, April 1 to March 31).
NEEV METOLOGIES: ICRA Assigns 'B' Ratings to INR6.65cr Loans
------------------------------------------------------------
The rating of '[ICRA]B' has been assigned to the INR6.65 crore
long term fund based facilities of Neev Metologies Private
Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 3.00 [ICRA]B assigned
Term Loan 3.65 [ICRA]B assigned
The assigned ratings are constrained by NMPL's limited track
record of operations and its high gearing levels. The ratings
further take into account of the company's limited bargaining
power with raw material suppliers; vulnerability of its margins to
raw material price fluctuations and the high competitive intensity
in the industry. The ratings also factor in the sensitivity of
project metrics to the stabilisation and scaling up of operations
coupled with product acceptance and pricing in the domestic
market.
The ratings however favorably factor in the absence of any delays
in project execution, the moderate experience of the promoters in
the aluminium foil industry and the stable demand prospects for
the products from end user industries.
Incorporated in August 2012, Neev Metologies Pvt Ltd is engaged in
manufacturing of aluminium foil and its variants at Rajkot,
Gujarat with an installed capacity of 2500 MTPA. The company is
promoted by Mr. Sagar Parsana and Mrs. Nisha Parsana who have over
5 years of experience in aluminium foil manufacturing. NMPL
commenced its commercial operations in November 2013 and its
current product portfolio consists of aluminium bottle caps, food
grade aluminium foils and commercial grade aluminium foils.
NEEV TECHNOCAST: ICRA Assigns 'B-' Ratings to INR9.78cr Loans
-------------------------------------------------------------
The rating of '[ICRA]B-' has been assigned to the INR5.85 crore
long term fund and non fund based facilities of Neev Technocast
Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Project LC 5.25 [ICRA]B- assigned
Cash Credit 0.60 [ICRA]B- assigned
Term Loan 3.93 [ICRA]B- assigned
The assigned rating is constrained by NTPL's limited track record
given that the company has recently started its operations and its
high gearing levels on account of the predominantly debt funded
nature of project. The rating further takes into account the
company's limited bargaining power with its key raw material
supplier and the high level of competitive intensity in the
industry. The rating also factors in the sensitivity of the
project metrics to the smooth scaling up of the operations,
coupled with the product establishment and pricing in the domestic
market.
The rating however favorably factors in the fact that the project
has been executed without any cost overruns, the technical ability
to manufacture complex patterns with detailed specifications and a
short lead time and the stable demand for moulds and aluminium
casting from end user industries.
Incorporated in August 2012, Neev Technocast Pvt Ltd is engaged in
manufacturing of sand moulds and aluminium castings at Rajkot,
Gujarat. The company is promoted by Mr. Sagar Parsana and Mrs.
Nisha Parsana who have over 5 years of experience in aluminium
foil manufacturing. The company has installed German machinery
which employs 3D printing of sand moulds and has an installed
capacity of 720 patterns annually with maximum build volume of
1800mm x 1000mm x 700mm (W x D x H).
NSR STEELS: CRISIL Reaffirms 'D' Ratings on INR360MM Loans
----------------------------------------------------------
CRISIL ratings on the bank facilities of NSR Steels Pvt. Ltd.
continue to reflect the instances of delay by NSR in servicing its
term loan; the delays have been caused by delays in implementation
of the company's ongoing project and its weakened liquidity as a
result of stretch in its working capital cycle.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 80 CRISIL D (Reaffirmed)
Letter of Credit 70 CRISIL D (Reaffirmed)
Proposed Long-Term
Bank Loan Facility 110 CRISIL D (Reaffirmed)
Term Loan 100 CRISIL D (Reaffirmed)
NSR also has a weak financial risk profile, marked by its small
net worth, weak capital structure and weak debt protection
metrics; along with a modest scale of operations. However, the
company benefits from its moderately integrated operations and the
promoters' experience in the steel industry.
Update
NSR's operating income remained stagnant in 2012-13 (refers to
financial year, April 1 to March 31) at around INR279 million,
vis-…-vis INR285 million a year ago. The company incurred cash
losses of INR30 million as on March 31, 2013, as compared to its
cash accruals of INR15 million in the previous year. The losses
mainly resulted from an increase in fixed overheads, mainly power
costs. The company's overall production was affected by shortage
of power supply at its plant in Tamil Nadu. Consequently, NSR has
been facing cashflow mismatches, leading to weak liquidity. As a
result, NSR has continued to delay servicing its term loan, and
its instalments due in November 2013 and December 2013.
NSR Steels Private Limited (NSR Steels) was incorporated in 2008
to manufacture MS Ingots and thermo mechanically treated (TMT)
bars. The company commenced its ingot manufacturing facility in
Thirunelveli, Tamil Nadu in February 2010 with an installed
capacity of 36,000 tonnes per annum (tpa).
NSR reported a net loss of INR66 million on an operating income of
INR279 million for 2012-13 (refers to financial year, April 1 to
March 31), vis-…-vis a profit after tax (PAT) of INR3 million on
an operating income of INR285 million for 2011-12.
ORCHID EXIM: CARE Assigns 'B+' Rating to INR12cr LT Loans
---------------------------------------------------------
CARE assigns the long-term rating and reaffirms the short-term the
ratings assigned to bank facilities of Orchid Exim (India) Private
Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term/Short- 12 CARE B+/CARE A4
term Bank Facilities Assigned/ Reaffirmed
Short-term Bank
Facilities 1.40 CARE A4 Reaffirmed
Rating Rationale
The ratings assigned to the bank facilities of Orchid Exim (India)
Private Limited is constrained on account of its modest scale of
operations with low profitability, leveraged capital structure,
weak debt coverage indicators and working capital intensive nature
of operations. The ratings further remained constrain on account
of its presence in a highly fragmented & competitive industry and
dependence on the government incentives coupled with seasonality
associated with the availability of raw material exposing
profitability to fluctuation in the raw material prices and
foreign exchange rates.
The ratings, however, favorably take into account the experience
of the promoters and proximity to raw material procurement area
and government incentives. The ability of OEPL to improve its
capital structure and to increase the scale of operations with
improvement in profitability through efficient working capital
management is the key rating sensitivities. Furthermore, its
ability to sustain and gradually improve its overall financial
risk profile in the wake of any adverse changes in the government
policy would also remain crucial.
OEPL, incorporated in 2009, is presently owned and managed by Mr
Ketan B Patel, Mr Vijay K Patel and Dr Dilip M Padhya. Presently,
it is engaged in the exports of sesame seeds as well as ground
nuts sesame seeds to China, Germany, Vietnam, Jordan and Russia.
During FY13 (refers to the period April 1 to March 31), OEPL
achieved Profit after Tax (PAT) of INR0.35 crore on a Total
Operating Income (TOI) of INR50.22 crore as against PAT of INR0.26
crore on a TOI of INR32.85 crore in FY12. OEPL reported TOI of
INR30.15 crore during H1FY14 (provisional).
ORNET INTERMEDIATES: CRISIL Places 'B+' Rating on INR60MM Loan
--------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to
the bank loan facilities of Ornet Intermediates Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bill Purchase- 100 CRISIL A4
Discounting
Facility
Proposed Long- 60 CRISIL B+/Stable
Term Bank Loan
Facility
The ratings reflect ONTIML's modest scale and high working-
capital-intensity of operations, and its weak financial risk
profile, marked by weak liquidity, due to substantial non-core
investment. These rating weaknesses are partially offset by the
extensive experience of the company's promoters in the chemicals
industry.
Outlook: Stable
CRISIL believes that ONTIML will continue to benefit over the
medium term from the extensive industry experience of its
promoters and their long-standing relationships with customers.
The outlook may be revised to 'Positive' if the company generates
higher-than-expected cash accruals while improving its working
capital cycle, or if it releases funds from non-core activities,
leading to improvement in its liquidity. Conversely, the outlook
may be revised to 'Negative' in case of deterioration in ONTIML's
profitability or capital structure, or more-than-expected
investment in non-core businesses, constraining its liquidity.
Established in 1992, ONTIML manufactures dyes, pigments, and
intermediates that are used mainly by the textile and leather
industries. The company's facility is near Ahmedabad (Gujarat);
its operations are managed by Mr. Dinesh Jain.
For 2012-13 (refers to financial year, April 1 to March 31),
ONTIML reported a net profit of INR35.7 million on net sales of
INR59.3 million, as against a net profit of INR53.6 million on net
sales of INR368.8 million for the previous year.
P.S. INDUSTRIES: CRISIL Reaffirms 'B+' Ratings on INR80MM Loans
---------------------------------------------------------------
CRISIL's rating on the bank facilities of P.S. Industries (Regd)
continues to reflect PSI's weak financial risk profile, marked by
modest gearing and debt protection metrics, with constrained
financial flexibility as a result of large working capital
requirements. The rating also reflects the firm's high customer
concentration, and exposure to intense industry competition. These
rating weaknesses are partially offset by the extensive industry
experience of PSI's promoter and the financial support that the
firm receives from him.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 50 CRISIL B+/Stable (Reaffirmed)
Term Loan 30 CRISIL B+/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that PSI will continue to benefit over the medium
term from its promoter's extensive experience in manufacturing
nuts and bolts for the automobile industry. The outlook may be
revised to 'Positive' if the firm scales up its operations
significantly, resulting in better-than-expected cash accruals,
thereby improving its financial risk profile. Conversely, the
outlook may be revised to 'Negative' if PSI registers weakening in
its financial risk profile, most likely because of increased
working capital requirements, or if it undertakes a major debt-
funded capital expenditure programme.
Update
PSI continues to have a small scale of operations with a marginal
decline in net sales to INR162 million in 2012-13 (refers to
financial year, April 1 to March 31) from INR174 million in 2011-
12. The firm registered a low profit after tax of about INR2
million in 2012-13; the profitability has been low due to the
fragmented nature of the industry with intense competition leading
to low bargaining power with customers and suppliers. However, PSI
has started manufacturing tow ball for tractors in 2013-14 and the
same is expected to support its operating revenues over the medium
term. It registered revenues of INR139 million over the eight
months through Nov 2013. Its financial risk profile remains weak
marked by a gearing of 1.90 times as on March 31, 2013, an
increase from that of 1.53 times a year earlier. This is on
account of its small net worth of
INR40 million and the additional debt contracted to fund its capex
(about INR20 million towards setting up machinery for tow ball) in
2012-13. PSI's liquidity remains weak marked by fully utilised
bank lines. PSI's operations are working capital intensive with
large inventory requirements, as the firm deals in various types
of nuts and bolts customised for its clients. The firm had
inventory of 165 days as on March 31, 2013. The firm is expected
to generate cash accruals of INR12.3 million in 2013-14 as against
debt obligations of INR6.5 million. Also, the liquidity of the
firm is supported by interest-free unsecured loans of INR6.2
million (as on March 31, 2013) from its promoters.
PSI's book profit is estimated at INR2.0 million on net sales of
INR162 million for 2012-13, against a book profit of INR2.5
million on net sales of INR174 million for 2011-12.
PSI was set up in 1987 as a proprietorship firm by Mr. Parminder
Singh. It manufactures nuts, bolts, and fasteners used in the
automobile industry. PSI's plant is located in Ludhiana (Punjab).
PAGRO FROZEN: ICRA Upgrades Ratings on INR30cr Loans to 'C+'
------------------------------------------------------------
ICRA has upgraded the long term rating for the INR30.00 crore bank
facilities of Pagro Frozen Foods Private Limited to '[ICRA]C+'
from '[ICRA]D'. ICRA has also upgraded short term rating for
INR0.75 crore of bank facilities of PFFL to '[ICRA]A4' from
'[ICRA]D'. The total rated limits are INR30.75 crore.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term Loans 20.00 Upgraded to [ICRA]C+
from [ICRA]D
Cash Credit 10.00 Upgraded to [ICRA]C+
from [ICRA]D
Crop Loan 0.75 Upgraded to [ICRA]A4
from [ICRA]D
The rating revision takes into account regularization of debt
servicing by PFFL during the last three months as per details
provided by management.
PFFL started operations in March 2012 with 2012-13 was the first
full year of operations for the company. The company has ramped up
its production of processed vegetables but the utilization of its
plant remains low. ICRA observed that PFFL's profit margins remain
susceptible to seasonality of agro products. Further, an elongated
working capital cycle on account of high inventory results in
stretched liquidity position of the company. ICRA also notes that
the growth in revenues is expected to come from PFFL's own brand
(Pagro), which would necessitate investments by the company in its
distribution network besides promotion for penetration in a
competitive market dominated by bigger brands. ICRA, however,
positively notes the long experience of promoters including their
past experience in running Pagro Foods Limited and the established
relationships with key consumers while assigning the rating. ICRA
also noted that PFFL will receive regular lease income from VPFPL
for its processing line located in the PFFL's campus, easing the
pressure on cash flows of the company. Going forward, the
company's ability to profitably ramp up its production, and manage
its working capital cycle and improve its liquidity will remain
the key rating sensitivities.
Pagro Frozen Foods Private Limited was incorporated in 2007 for
setting up an integrated vegetables processing plant in Punjab.
The proposed project, at full capacity, involves contract growing
of vegetables across 10,000 acres of land and processing around
15,000 MT of vegetables to annually produce 12,000 MT of frozen
vegetables and 3000 MT of French fries. The commercial operations
of the company started in March 2012. In 2012-13, PFFL processed
3375 metric tons of vegetables including peas. These processed
food products are supplied by the company to clients in domestic
and export markets. PFFL is promoted by Mr. N.S. Brar and Mr.
Pawaninder Singh Dhillon, who have over two decades of experience
in food processing and contract farming. The promoters are also
managing a company in same business namely Pagro Foods Limited
(PFL) for the past eight years. They are joined by Mr. Satpal
Khattar, who is investing in the new company through his
investment arm, Khattar Holdings Pte Limited.
Recent Results
In 2012-13, PFFL reported Net Sales of INR11.6 Crore, Profit
before Depreciation Interest and Tax (PBDIT) of INR6.2 Crore and
Profit after Tax (PAT) of INR0.1 Crore.
PRAKASHINI HOLDING: CARE Reaffirms B+/A4 Rating on INR8cr Loans
---------------------------------------------------------------
CARE reaffirms the rating assigned to the bank facilities of
Prakashini Holding Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term/Short- 8 CARE B+/CARE A4 Reaffirmed
term Ban Facilities
Rating Rationale
The ratings assigned to the bank facilities of Praskashini Holding
Private Limited continue to be constrained by the relatively small
scale of operations, trading nature of operations resulting in low
profitability, working capital intensive nature of operations
resulting in a leveraged capital structure and weak debt coverage
indicators. The ratings further continue to be constrained by its
presence in the fragmented and cyclical steel industry.
The ratings, however, continue to derive strength from the
experience of the promoters along with financial support in the
past and established relationship with the suppliers and
customers. The ability of PHPL to improve its overall scale of
operations while maintaining its profitability margins along with
efficient working capital cycle are the key rating sensitivities.
Incorporated in 1992 by Mr Deependra Singh and Mr Tapendra Singh,
Praskashini Holding Private Limited is engaged in the business of
trading of metal scrap and generally trades in silicon steel
scrap, cold rolled close annealed (CRCA) scrap & heavy melting
scrap. PHPL directly procures steel scrap from original equipment
manufacturers (OEMs), namely, Crompton Greaves, Siemens, Larsen &
Toubro Komatsu, Kirloskar Electric Co Ltd, Hindustan Motor, BEML
and Usha fans. PHPL has leased warehouses at Bangalore and
Hyderabad.
During FY13 (refers to the period April 1 to March 31), PHPL
reported a total operating income (TOI) of INR23.85 crore (down by
8% vis-…-vis FY12) and PAT of INR0.15 crore (down by 53%
vis-a-vis FY12). Furthermore during 8MFY14 provisional, the
company posted revenue of INR15.33 crore.
RASHMI SPONGE: ICRA Suspends 'B' Rating on INR43cr Loans
--------------------------------------------------------
ICRA has suspended the '[ICRA]B' rating assigned to the INR43.00
crore fund-based facilities of Rashmi Sponge Iron & Power
Industries Ltd. ICRA has also suspended the [ICRA]A4 rating
assigned to the INR22.00 crore non-fund based facilities of
RSIPIL. The suspension follows ICRA's inability to carry out a
rating surveillance in the absence of the requisite information
from the company.
According to its suspension policy, ICRA may suspend any rating
outstanding if in its opinion there is insufficient information to
assess such rating during the surveillance exercise.
RIDHI SIDHI: ICRA Reaffirms 'B' Rating on INR7.65cr Loans
---------------------------------------------------------
ICRA has reaffirmed the long term rating of '[ICRA]B' to the
INR7.65 crore fund based facilities of Ridhi Sidhi Overseas.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based facilities 7.65 [ICRA]B (reaffirmed)
The rating is constrained by firm's weak financial profile,
reflected by low profitability metrics, high gearing and
consequently weak debt coverage indicators. The rating also takes
into account high intensity of competition in the industry and
agro climatic risks, which can affect the availability of paddy in
adverse weather conditions. The rating however, favorably takes
into account proximity of the mill to major rice growing area
which results in easy availability of paddy and demand prospects
of rice that is expected to remain good as rice is a staple food
grain and the position of India is world's second largest producer
and consumer of rice.
Ridhi Sidhi Overseas is a partnership firm, was set up in August
2010. RSO is engaged in processing and export of basmati rice to
countries in the Middle East, It has a plant at Kaithal (Haryana)
which has a milling capacity of 5 tonnes per hour and a sortex
machinery with a capacity of 5 ton/hr. The by-products of basmati
rice viz husk, rice bran and 'phak' are sold in the domestic
market.
Recent Results
During the financial year 2012-13, the firm reported a profit
after tax (PAT) of INR0.05 crore on an operating income of
INR68.14 crore as against PAT of INR0.05 on an operating income of
INR31.13 crore in FY12.
ROYAL TYRES: CRISIL Assigns 'B' Ratings to INR69MM Loans
--------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable/CRISIL A4' ratings to the
bank loan facilities of Royal Tyres Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 65 CRISIL B/Stable
Packing Credit 8 CRISIL A4
Letter of Credit 2 CRISIL A4
Bank Guarantee 1 CRISIL A4
Cash Credit 4 CRISIL B/Stable
The ratings reflect RTPL's exposure to risks related to large
project execution, its modest scale of operations and below-
average financial risk profile, marked by an expected
deterioration in its gearing. These rating weaknesses are
partially offset by the extensive experience of RTPL's promoters
in the solid industrial tyre segment.
Outlook: Stable
CRISIL believes that RTPL will continue to benefit over the medium
term from the promoters' extensive industry experience. The
outlook may be revised to 'Positive' if the company generates
more-than-expected accruals, backed by earlier-than-expected
completion of its upcoming project, or registers higher-than-
expected profitability. Conversely, the outlook may be revised to
'Negative' if demand declines, resulting in reduced offtake for
RTPL's industrial tyres, thereby leading to lower-than-expected
growth in its revenues, or if significant volatility in raw
material prices adversely impacts the company's operating margin.
Any larger-than-expected debt-funded capital expenditure (capex)
programme, weakening RTPL's financial risk profile, could also
result in a 'Negative' outlook revision.
RTPL was incorporated in 1991 in Chennai (Tamil Nadu). The company
manufactures solid industrial tyres. The executive director, Mr.
Sendil Kumaran, manages the company's day-to-day operations.
On a provisional basis, RTPL reported a profit after tax (PAT) of
INR2.4 million on net sales of INR61 million for 2012-13 (refers
to financial year, April 1 to March 31), vis-…-vis a PAT of INR3.8
million on net sales of INR83 million for 2011-12.
S K TRANSLINES: CRISIL Reaffirms 'B+' Ratings on INR80MM Loans
--------------------------------------------------------------
CRISIL's ratings on the bank facilities of S K Translines Pvt Ltd
continue to reflect SKTPL's average financial risk profile, marked
by a small net worth, high gearing, and moderate debt protection
metrics. The ratings also factor in the company's modest scale of
operations in the highly fragmented and competitive freight
transport segment. These rating weaknesses are partially offset by
the extensive experience of SKTPL's promoters in the freight
transport segment, and the company's established customer
relations.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 30 CRISIL A4 (Reaffirmed)
Cash Credit 60 CRISIL B+/Stable (Reaffirmed)
Long-Term Loan 20 CRISIL B+/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that SKTPL will continue to benefit over the
medium term from the promoters' extensive industry experience in
the freight transportation segment. The outlook may be revised to
'Positive' if the company reports a significant and sustained
growth in its revenue and profitability, thereby improving its
financial risk profile, particularly its liquidity. Conversely,
the outlook may be revised to 'Negative' if there is a significant
decline in SKTPL's cash accruals or deterioration in its working
capital management, or if the company undertakes a large, debt-
funded, capital expenditure programme, resulting in deterioration
in its financial risk profile.
Update
In 2012-13 (refers to financial year, April 1 to March 31),
SKTPL's sales grew by 22 per cent, in line with CRISIL's
expectations. The company is estimated to report sales of INR300.0
million for the eight months ended November 30, 2013, and is
likely to report modest revenue growth of 10 per cent for 2013-14.
Despite a sluggish market, SKTPL's revenue grew on the back of its
enhanced revenue profile, and orders for material handling
services. The company's operating profitability improved to 5.4
per cent in 2012-13, supported by better realisations from its
core activities of road and rail freight services. SKTPL's
operating profitability will improve with an increase in the
contribution of material handling services to total revenues; the
company is expected maintain an operating profitability between
5.4 and 6.0 per cent over the medium term.
SKTPL's working capital requirements continue to be moderate, as
indicated by its gross current assets (GCAs) of around 74 days as
on March 31, 2013, mainly driven by debtors. The company's working
capital requirements could increase along with its scale of
operations over the medium term.
SKTPL's financial risk profile remains average, marked by its high
gearing of 2.01 times as on March 31, 2013, and moderate debt
protection metrics, with a net cash accruals to total debt (NCATD)
ratio of 0.17 times and an interest coverage ratio of 2.13 times
for 2012-13. In the absence of any significant debt-funded capital
expenditure (capex) plans, the company could improve its gearing,
supported by modest accretion to reserves, while maintaining its
moderate debt protection metrics. SKTPL's liquidity remains weak,
marked by high bank line utilisation at around 98 per cent over
the twelve months through November 2013.
SKTPL reported a net profit of INR5.5 million on net sales of
INR500.0 million for 2012-13, vis-…-vis a profit of INR0.3 million
on net sales of INR410.0 million for 2011-12.
SKTPL was established as a proprietorship firm, S K Transport
Company, by Mr. Kantilal Kothari in 1988. The firm was
reconstituted as a private limited company in 2004. SKTPL provides
freight transportation services to Indian companies in various
industries, such as pharmaceuticals, fast-moving consumer goods,
lubricants, and white goods. Mr. Kantilal Kothari is the chairman
and his sons, Mr. Hemant Kothari and Mr. Ujwal Kothari are the
directors.
SAFE DEVELOPMENT: ICRA Raises Rating on INR49.76cr Loans to 'B+'
----------------------------------------------------------------
ICRA has upgraded the long-term rating assigned to the INR49.76
crore term loan facilities of Safe Development Alms Trust to
'[ICRA]B+' from '[ICRA]B'.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term-Term 49.76 upgraded to [ICRA]B+
loan facilities from [ICRA]B
The rating upgrade factor in steady increase in revenues and
healthy operating margins witnessed by the Trust in the last
fiscal driven by fee hike carried out in the medical college and
increase in number of inpatient and outpatient admissions in its
hospitals. The rating also takes note of the healthy demand growth
for healthcare services and favorable outlook for medical
education in the country, significant experience of the promoters
in the educational sector, healthy occupancy levels in the
colleges, and the technical capabilities in the hospitals backed
by state-of-the-art equipment and experienced and reputed medical
practitioners. The rating is, however, constrained by the weak
financial profile of the Trust characterized by high gearing
(albeit moderating on the back of healthy accruals over the years)
and stretched coverage indicators consequent to aggressive debt
funded capital expenditure and large debt repayment obligations
over the medium term. The rating also considers the intense
competition in the education sector which is expected to exert
pressure on its ability to attract and retain experienced faculty.
The scale of operations of the Trust is currently modest and its
presence in the highly regulated education sector exposes the
revenues and margins of colleges to adverse government regulations
with regard to tuition fees and seat sharing. Going forward, the
ability of the Trust to enhance its scale of operation by
diversifying its revenue base, sustain profitability and improve
its capital structure would remain the key rating sensitivities.
Safe Development Alms Trust, established in the year 1993 by Mr.
P.V. Hassan with the objective of providing general healthcare
services to the public and promote medical and paramedical
education, has its headquarters at Palakkad, Kerala. The Trust
currently manages Karuna Hospital (a super-specialty hospital with
175 bed facility), Karuna Medical College Hospital (600 bed
facility), Karuna Medical College (100 seats) and Karuna College
of Nursing (50 seats). The Karuna Medical College has 100%
occupancy since inception owing to healthy demand for medical
education in the country.
Recent Results
The Trust reported net profit of INR7.1 crore on an operating
income of INR31.5 crore during 2012-13 as against net profit of
INR7.1 crore on an operating income of INR28.4 crore during 2011-
12.
SAKHI FOOD: CRISIL Ups Rating on INR52.6MM Term Loan to 'B'
-----------------------------------------------------------
CRISIL has upgraded its rating on the long-term bank facility of
Sakhi Food Products to 'CRISIL B/Stable' from 'CRISIL B-/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 52.6 CRISIL B/Stable (Upgraded
from 'CRISIL B-/Stable')
The rating upgrade reflects stabilisation of SFP's newly set up
rice mill in Birbhum (West Bengal) in October 2013. The firm's
liquidity has also improved as reflected in bank limit utilisation
of 60 per cent for the nine months through November 2013 and
sufficient expected cash accruals of INR11 to 13 million in 2013-
14 against term debt repayment of Rs 7.2 million. SFP also
reported operating margin of 6.4 per cent in 2012-13 (refers to
financial year, April 1 to March 31) and working capital
management was also efficient as reflected in GCA's of 42 days.
The ratings also reflect SFP's small scale of operations in a
fragmented industry and its below-average financial risk profile.
These rating weaknesses are partially offset by the benefits that
SFP derives from its management's entrepreneurial experience and
the benefits it derives from being located in West Bengal, where
there is low demand-related risks for par-boiled rice.
Outlook: Stable
CRISIL believes that SFP will continue to benefit from its
partners' extensive experience in the rice industry. The outlook
may be revised to 'Positive' if the firm significantly scales up
its operations while maintaining its profitability and working
capital cycle leading to higher-than-expected cash accruals, or if
its capital structure improves, driven most likely by sizeable
capital infusion. Conversely, the outlook may be revised to
'Negative' if the company's financial risk profile weakens, caused
most likely by a stretch in working capital cycle or larger-than-
expected debt-funded capital expenditure.
SFP is a partnership firm set up by Mr. Sanjay Kumar and his wife,
Mrs. Disha Ahlani, in 2010. It operates a rice mill with capacity
of 38,400 tonnes per annum based in Birbhum.
SHANKER INT'L: ICRA Reaffirms 'B' Ratings on INR45cr Loans
----------------------------------------------------------
ICRA has reaffirmed the long term rating at '[ICRA]B' to the
INR45.00 crore fund based, non fund based and proposed limits of
Shanker International Private Limited (erstwhile Shanker Timber
Store).
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based
Facilities 5.00 [ICRA]B (reaffirmed)
Non-fund based
Facilities 29.50 [ICRA]B (reaffirmed)
Proposed 10.50 [ICRA]B (reaffirmed)
(Unallocated Limits)
The ratings reaffirmation takes into account the highly
competitive nature of the timber trading industry characterized by
the presence of numerous organized and unorganized players due to
which the revenues and profit margins of the company have remained
modest. The ratings are also constrained by moderate financial
profile of the company characterized by high total outside
liabilities to tangible net worth (TOL/TNW) ratio and moderate
debt protection metrics with OPBDITA/Interest of 1.95 times and
NCA/Debt of 20%. However, the rating derive comfort from the long
track record of promoters in the timber trading business and
favorable logistics of the firm on account of presence of office
near Kandla port.
Shanker International Pvt. Ltd. took over Shanker Timber Store in
April 2013, along with all its assets and liabilities as on
March 31, 2013. The promoters have more than 3 decades of
experience in the trading of timber with mainly trading of Sagwan
and Kapur wood which is imported from Switzerland, Malaysia etc.
SIPL has been promoted by Mr. KK Goel, given his long experience
in this business. The company has 1 branch and 1 head office.
Branch is at Gandhinagar (Gujarat) and head office is situated at
Karnal.
Recent Results
During the financial year 2012-13, the company reported a profit
after tax (PAT) of INR2.43 crore on an operating income of
INR104.52 crore as against PAT of INR1.98 crore on an operating
income of INR71.24 crore in 2011-12.
SHARDA TIMBER: ICRA Reaffirms 'B' Ratings on INR35cr Loans
----------------------------------------------------------
ICRA has reaffirmed the long term rating at '[ICRA]B' to the
INR35.00 crore fund based, non fund based and proposed limits of
Sharda Timber Private Limited (erstwhile Shanker Timber Store).
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based
Facilities 4.00 [ICRA]B (reaffirmed)
Non-fund based
Facilities 25.00 [ICRA]B (reaffirmed)
Proposed
(Unallocated
Limits) 6.00 [ICRA]B (reaffirmed)
The ratings reaffirmation takes into account the highly
competitive nature of the timber trading industry characterized by
the presence of numerous organized and unorganized players due to
which the revenues and profit margins of the company have remained
modest. The ratings are also constrained by moderate financial
profile of the company characterized by high total outside
liabilities to tangible net worth (TOL/TNW) ratio and Interest
cover of of 2.97 times. However, the rating derive comfort from
the long track record of promoters in the timber trading business
and favorable logistics of the firm on account of presence of
office near Kandla port.
Sharda Timber Private Limited took over Sharda Timber Store in
April 2013, along with all its assets and liabilities as on March
31st 2013. The promoters have more than 3 decades of experience in
the trading of timber with mainly trading of Sagwan and Kapur wood
which is imported from Switzerland, Malaysia etc. SIPL has been
promoted by Mr. KK Goel, given his long experience in this
business. The company has 1 branch and 1 head office. Branch is at
Gandhinagar (Gujarat) and head office is situated at Karnal.
Recent Results
During the financial year 2012-13, the company reported a profit
after tax (PAT) of INR3.75 crore on an operating income of
INR86.81 crore as against PAT of INR0.11 crore on an operating
income of INR48.33 crore in 2011-12.
SUNIL GARG: ICRA Suspends 'C' Rating on INR10cr Loans
-----------------------------------------------------
ICRA has suspended the '[ICRA]C' rating assigned to the INR10.00
crore bank limits of M/S Sunil Garg & Co. The suspension follows
ICRA's inability to carry out a rating surveillance in the absence
of the requisite information from the company.
According to its suspension policy, ICRA may suspend any rating
outstanding if in its opinion there is insufficient information to
assess such rating during the surveillance exercise
SUNIL SPONGE: CRISIL Assigns 'B+' Rating to INR137.5MM Loan
-----------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to
the bank facilities of Sunil Sponge Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Inland/Import
Letter of Credit 47.5 CRISIL A4
Bank Guarantee 15 CRISIL A4
Cash Credit 137.5 CRISIL B+/Stable
The ratings reflect SSPL's weak debt protection metric, modest
scale of operations with a low operating margin, and vulnerability
to fluctuations in steel prices. These rating weaknesses are
partially offset by the extensive experience of SSPL's promoters
in the steel industry, its established customer base, and its
comfortable capital structure.
Outlook: Stable
CRISIL believes that SSPL will continue to benefit over the medium
term from its promoters' extensive industry experience and its
established relationships with customers. The outlook may be
revised to 'Positive' in case of a significant increase in the
company's revenues and profitability, leading to more-than-
expected cash accruals and hence to an improvement in its
financial risk profile. Conversely, the outlook may be revised to
'Negative' if SSPL's profitability is lower than expected,
resulting in substantially low cash accruals, or it undertakes a
significant debt-funded capital expenditure programme, or its
working capital management deteriorates.
SSPL was established in 2003 by the Nachrani family at Raipur
(Chhattisgarh). The company manufactures steel products, and has
integrated facilities with a captive power plant. Its product
portfolio includes sponge iron and mild-steel billets and flats.
The promoter family has been engaged in the steel manufacturing
industry for over three decades.
SURAJ TUBES: CARE Reaffirms 'B+' Rating on INR10.81cr LT Loans
--------------------------------------------------------------
CARE reaffirms the rating assigned to the bank facilities of Suraj
Tubes India Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 10.81 CARE B+ Reaffirmed
Facilities
Rating Rationale
The rating assigned to the bank facilities of Suraj Tubes India
Private Limited continues to factor in the lack of experience of
the promoters in the manufacturing of steel tubes. The rating
further continues to be constrained by the presence of STIPL in
the competitive, fragmented and cyclical Indian steel industry and
delay in the commencement of commercial operations.
The rating, however, continues to derive strength from the
promoters' experience in steel tubes trading business with already
established customer and supplier base. The ability of the company
to achieve the estimated levels of operating performance remains
the key rating sensitivity.
Suraj Tubes India Private Limited is part of the Nanded-based
(Maharashtra)Suraj Group. The group has a presence in various
business segments such as steel trading, manufacturing and
trading of fertilizers and polymers etc.
STIPL was incorporated in the year 2011 to undertake manufacturing
of various types of steel tubes like Hot-Rolled (HR), round tubes,
galvanized- plain (GP) tubes, HR square tubes, Cold- Rolled (CR)
tubes, CR round tubes, C shape purling, Z shape purling. The
company has an installed capacity of 42,000 metric tones per annum
(MTPA) and started commercial operations in
April 2013. The products manufactured by STIPL find application in
the construction segment, railways and other retail market. Steel
coil is the major raw material required for the production of
steel pipes, which is procured from the local market and from
companies like Essar Steel India Limited, Lloyds Steel Industries
Limited, and JSW Steels Limited.
The project was scheduled to be operational from November 2012.
Due to the late installation of the machinery by the supplier, the
project was delayed. The plant started its commercial operations
from April 2013 successfully.
SVEC CONSTRUCTIONS: ICRA Suspends 'D' Rating on INR318.76cr Loan
----------------------------------------------------------------
ICRA has suspended the long term rating of '[ICRA]D' assigned to
INR318.76 crore bank facilities of SVEC Constructions Limited. The
suspension follows ICRA's inability to carry out a rating
surveillance in the absence of the requisite information from the
company.
According to its suspension policy, ICRA may suspend any rating
outstanding if in its opinion there is insufficient information to
assess such rating during the surveillance exercise.
SWASTIK TRADING: ICRA Reaffirms 'B+' Rating on INR9.75cr Loan
-------------------------------------------------------------
ICRA has reaffirmed the long term rating of '[ICRA]B+' assigned to
the INR9.75 crore cash credit limits of Swastik Trading Co.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 9.75 [ICRA]B+ reaffirmed
facility
The rating continues to take into account STC's modest scale of
operations, though on an improving trend; its low profit margins
due to inherent low value added nature of trading operations
coupled with intense competition and weak financial profile
characterized by low profitability, moderate gearing and weak
coverage indicators. Further the rating factors in the
vulnerability of the firm's profitability to adverse fluctuations
in traded products' prices which are subject to seasonality, agro
climatic risks and government regulations; and the risks inherent
in partnership form of business. The rating, however, favourably
considers the longstanding experience of the promoters in the
cotton industry and locational advantage of the firm in the cotton
growing belt of Gujarat.
Incorporated in 1979, Swastik Trading Co. has been promoted by Mr.
Naresh Lotiya who has more than three decades of experience in the
cotton industry. The firm is engaged in trading of cotton bales,
cotton seeds and raw cotton. STC operates from Gondal, Dist.
Rajkot in Gujarat.
In FY13, STC reported an operating income of INR156.11 crore and
profit after tax of INR0.45 crore as against an operating income
of INR99.65 crore and profit after tax of INR0.28 crore during
FY12.
TIRUPATI BALAJI: CRISIL Assigns 'B' Ratings to INR109MM Loans
-------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable/CRISIL A4' ratings to the
bank facilities of Tirupati Balaji Cotfab Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 70 CRISIL B/Stable
Bank Guarantee 20 CRISIL A4
Cash Credit 39 CRISIL B/Stable
The ratings reflect the start-up nature of TBCPL's operations, and
its susceptibility to risks associated with implementation of its
project and stabilisation of its operations. These rating
weaknesses are partially offset by the extensive experience of
TBCPL's promoters in the textile industry.
Outlook: Stable
CRISIL believes that TBCPL will benefit from its promoters'
extensive industry experience over the medium term. The outlook
may be revised to 'Positive' if TBCPL stabilises operations at its
proposed plant in a timely manner and generates higher-than
expected revenues and profitability. Conversely, the outlook may
be revised to 'Negative' if the company faces significant delays
in the commencement of its operations, or generates lower-than-
expected cash accruals during the initial phase of its operations,
resulting in pressure on its liquidity.
Incorporated in 2012, TBCPL is setting up a cotton fabric
manufacturing unit with a capacity of 1.8 million meters per annum
in Kalol district (Gujarat). The company is promoted by Gujarat-
based Mr. Babubhai Patel, Mr. Mahendra Patel, and Mr. Prashant
Patel. It expects to fully commence operations by the end of
January 2014.
VITTHAL CORPORATION: CARE Rates INR300cr LT Loans at 'B'
--------------------------------------------------------
CARE assigns 'CARE B' rating to the bank facilities of Vitthal
Corporation Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 300 CARE B Assigned
Facilities
Rating Rationale
The rating assigned to the bank facilities of Vitthal Corporation
Limited is constrained by the limited experience of the promoters
in cotton spinning and Indian made foreign liquor (IMFL) business
segments, working capital intensive nature of operations and the
financial risk profile marked by highly leveraged capital
structure. The rating also factors in the risk pertaining to the
brand establishment in the IMFL segment and cyclicality and agro-
climatic risks associated with the sugar industry.
The rating, however, derives strength from the promoters'
experience in the sugar industry, qualified and experienced
second-tier management, fully integrated nature of the sugar
production unit and strategic location of the VCL's unit. The
ability of VCL to stabilize operations of the cotton spinning
unit, procurement of the envisaged volume of sugarcane at
envisaged prices and improvement in its operating cycle are the
key rating sensitivities.
Vitthal Corporation Limited was incorporated in the year 1998 as
Vitthal Sugars Manufacturing Limited by Mr Babandada Vitthalrao
Shinde to undertake manufacturing of sugar at Taluka Madha,
Solapur, Maharashtra. The company changed its name from VSML to
VCL in July, 2010. VCL has setup a fully integrated cane
processing plant comprising of sugar plant with a crushing
capacity of 2,500 tonnes of cane crushed per day (TCD), 30 kilo
liters per day (KLPD) distillery unit and 12 mega-watt (MW)
bagasse fired co-generation power plant.
VCL undertook erection of cotton spinning mill (with a capacity of
40,320 spindles) in March 2012 and the same commenced commercial
operations in April 2013. Furthermore, VCL set up a bottling
division plant for the production of IMFL (with a capacity of
3,000 cases per day (CPD)) over March 2013-September 2013 period.
VCL is promoted by Mr Sanjay Vitthalrao Shinde, Chairman and Mr
Haridas Bhanudas Dange in the strength of Managing Director (MD).
During FY13 (provisional - refers to the period April 1 to
March 31), VCL achieved a PBILDT of INR 50.61crore (Rs. 50.78crore
in FY12) and a net profit of INR15.60 crore (Rs.11.48 crore in
FY12), on a total income of INR177.98 crore (Rs.288.03 crore in
FY12.)
WINSOME YARNS: ICRA Suspends 'D' Ratings on INR480MM Loans
----------------------------------------------------------
ICRA has reaffirmed '[ICRA]D' for INR314.00 crore term loans and
INR166.00 crore short term fund based limits of Winsome Yarns
Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term Loans 314.00 [ICRA]D Reaffirmed
Short Term Fund
based limits 166.00 [ICRA]D Reaffirmed
The rating reaffirmation takes into account continued irregularity
in repayment of debt obligations by the company due to tight
liquidity and significant repayments in relation to cash accruals.
The ratings are constrained by loss making knitting unit,
vulnerability of profitability to raw material prices, highly
competitive nature of business and high working capital intensity
requiring large funding. Further, the company has significant
repayments falling due in short to medium term which accompanied
with cotton procurement season is likely to exert pressure on cash
flows. While the operating profit margins improved for FY13 as a
whole, however given the tight liquidity position, the company
witnessed decline in its sales and witnessed operating losses
during the quarter ending September 2013. The ratings continue to
be factor in company's track record in spinning business with
focus on value added yarns. Going forward, ability to improve
sales and profitability, regularity in debt repayments, revival in
knitwear division and improvement in debt coverage indicators
would be the key rating sensitivities.
Winsome Yarns Limited was incorporated in 1990 by Winsome Textile
Industries Limited of Winsome Group in collaboration with Punjab
State Industrial Development Corporation Limited (PSIDC) for
setting up 100% export oriented unit for spinning cotton yarn with
counts ranging from 16-40s. WYL has presence in spinning as well
as knitting where in it is manufactures and sells cotton yarn,
melange dyed yarn, sweaters and knitwear. The company's spinning
plant is located at Derabassi, District Patiala, in Punjab with an
installed capacity of 109,824 spindles and knitting plant is
located in Mohali, Punjab.
=================
I N D O N E S I A
=================
ALAM SUTERA: Fitch Rates Proposed US Dollar Notes at 'B+'
---------------------------------------------------------
Fitch Ratings has assigned PT Alam Sutera Realty Tbk's (ASRI,
'B+'/Stable) proposed senior unsecured US dollar-denominated notes
an expected 'B+(EXP)' rating, with a Recovery Rating of 'RR4'.
The proposed notes are to be issued by Alam Synergy Pte Ltd and
guaranteed by ASRI and certain subsidiaries. The final rating is
contingent upon receipt of documents conforming to information
already received.
ASRI, a property developer based in Indonesia, plans to use part
of the bond proceeds to repurchase bonds due in 2017 and the rest
for project development and general corporate purposes.
Small Scale, Improved Diversification: The ratings reflect ASRI's
small scale, project concentration and inherent volatility in the
property developments. Historically, more than 50% of marketing
sales derived from ASRI's matured township in Serpong, a satellite
city in the western part of Greater Jakarta. Fitch expects the
company to gradually achieve a more diversified project mix as
ASRI's second township project at Pasar Kemis develops. Management
estimates Pasar Kemis will account for about 43% of total
marketing sales in 2013 (2012: 18%).
Stability Amid Challenges: 2014 will be particularly challenging
for property developments aimed at middle- and high-income buyers,
such as ASRI's Serpong project, with stricter mortgage regulation
and the upcoming general election dampening investors' buying
sentiment. Fitch expects the higher presales at ASRI's Pasar
Kemis and steady recurring income from shopping malls and cultural
parks to make up for the lower presales at Serpong.
Pasar Kemis is strategically positioned to capture the more
resilient demand from middle- to low-income buyers, with more
affordable pricing and first-time home buyers being exempted from
the authorities' stricter mortgage regulation. Fitch expects
sales at Pasar Kemis, which is located about 15 km from Serpong to
provide more stability to ASRI's earnings.
Rupiah Weakness Exacerbates Currency Mismatch: Property developers
with US dollar-denominated borrowings have been hurt by the
rupiah's weakening, which has increased their debt burden in terms
of the currency that they sell in. The rupiah's significant
depreciation and lower-than-expected presales have negatively
impacted ASRI's leverage as measured by its presales/gross debt
ratio (2013F: 0.95x). Nevertheless, Fitch expects ASRI to
maintain a leverage profile appropriate for its rating, with
presales/gross debt at above 0.75x over the next 12 months, which
underpins the Stable Outlook. ASRI's well-distributed maturity
profile is an additional comfort, with no significant debt
maturing until 2017.
Established Track Record: The ratings also recognize ASRI's low-
cost, large land bank inventory, strategic development locations,
and track record of successful project executions. ASRI is one of
the pioneers in developing large-scale townships in Serpong, which
is now a popular alternative to other areas in Greater Jakarta.
Fitch believes ASRI will be able to leverage on its success story
at Serpong for future project launches, as it recently
demonstrated with the higher-than-expected sales for project
launches in Pasar Kemis.
Negative: Future developments that may, individually or
collectively, lead to negative rating action include:
-- A sustained increase in leverage such that the ratio of
presales to gross debt falls below 0.75x on a sustained
basis (2014F: 0.80x)
-- An increase in its exposure to non-core businesses
Positive rating action is not expected due to the cyclical nature
of ASRI's property development business, the company's small scale
and a lack of project diversification.
ALAM SUTERA: S&P Raises CCR to 'B+'; Outlook Stable
---------------------------------------------------
Standard & Poor's Ratings Services said that it had raised its
long-term corporate credit rating on PT Alam Sutera Realty Tbk. to
'B+' from 'B'. The outlook is stable. At the same time, S&P
raised the long-term issue rating on the existing senior unsecured
notes that the Indonesia-based property developer guarantees to
'B+' from 'B'. S&P also raised the long-term ASEAN regional scale
rating on Alam Sutera to 'axBB' from 'axBB-'.
S&P assigned its 'B+' long-term issue rating to Alam Sutera's
proposed guaranteed senior unsecured notes of up to
US$225 million. The company's special-purpose vehicle Alam
Synergy Pte. Ltd. will issue the notes.
"We raised the rating because we believe that Alam Sutera can
sustain its improved business risk profile over the next two
years," said Standard & Poor's credit analyst Kah Ling Chan. "The
company's property sales have been increasing, and its reliance on
its single project, Alam Sutera township, has reduced as it
launches new projects, such as its second township Suvarna
Sutera."
S&P assess Alam Sutera's profitability to be above average. S&P
expects Alam Sutera's EBITDA margins to remain higher than that of
peers, at about 50%-55% over the next two years, primarily because
of the company's relatively low land costs.
S&P revised its assessment of Alam Sutera's business risk profile
to "weak" from "vulnerable." S&P assess Alam Sutera's financial
risk profile as "aggressive."
Alam Sutera's contracted sales increased 2.9x from 2010 to an
estimated Indonesian rupiah (IDR) 4.3 trillion in 2013. The
company's revenue base expanded with the launch of its Suvarna
Sutera township, which had an estimated IDR1.8 trillion in sales
in 2013. With Suvarna Sutera, Alam Sutera's reliance on sales
from the Alam Sutera township has reduced. S&P anticipates that
Suvarna Sutera will continue to account for 35%-40% of the
company's total sales over the next 24 months.
The upgrade also reflects S&P's view that Alam Sutera has
sufficient headroom in its credit metrics to accommodate the
US$100 million incremental debt as a result of the proposed notes
of up to US$225 million. The company's exposure to "high" country
risk of operating entirely in Indonesia and susceptibility to
volatile cash flows from its cyclical property development
business constrain the rating.
Alam Sutera intends to use US$125 million from the proposed notes
to fund a tender offer for the company's existing 2017 bonds. The
company is likely to use the balance to fund property construction
and land acquisitions. The proposed notes will lengthen Alam
Sutera's debt maturity profile.
"The stable outlook reflects our expectation that Alam Sutera will
maintain its good sales execution in its two key projects and
prudently manage capital expenditure for its new projects over the
next two years," said Ms. Chan. S&P anticipates that the
company's timely delivery of projects and sales will generate
steady cash flows. However, its profit margin is likely to weaken
because of higher contribution from Suvarna Sutera, a newer
project. Alam Sutera's financial performance could be weak if the
improvement in EBITDA is not sufficient to compensate for the
increase in borrowings.
S&P may lower the rating if Alam Sutera makes larger debt-funded
acquisitions than it expects or deviates from its strategy and
core business of property development. S&P may also downgrade the
company if the decline in its revenues and profitability over the
next 12 months is greater than S&P anticipated. A significant
slowdown in Indonesia's economy or a sharp increase in interest
expense due to further devaluation of the rupiah could heighten
downside risks for Alam Sutera. A downgrade trigger could be
EBITDA interest coverage falling below 3.0x on a sustainable
basis.
Potential upside to the rating is limited, in S&P's view. S&P may
upgrade Alam Sutera if the company increases its operating scale
and diversifies its cash flow sources to include a larger number
of projects and property leasing.
INDONESIA: S&P Assigns 'BB+' Rating to U.S.$-Denominated Bonds
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB+' long-term
foreign currency issue rating to the U.S. dollar-denominated
global senior unsecured bonds that the Republic of Indonesia
(BB+/Stable/B; axBBB+/axA-2) issued. The issue consists of one
bond with 10-year maturity and another with 30-year maturity.
These bonds are part of the country's global medium-term notes
program, which has been increased to US$25 billion.
The bonds will constitute the direct, unconditional, and unsecured
obligations of the sovereign, and will rank equal with Indonesia's
other unsecured and unsubordinated external debt. All bonds under
the global medium-term note program are backed by the full faith
and credit of the Republic of Indonesia.
The sovereign credit ratings on Indonesia reflect the economy's
low per capita income, developing structural and institutional
foundations, weak policy environment, and high and rising external
leverage. These rating constraints are weighed against the
country's well-entrenched cautious fiscal management and resultant
modest general government debt and interest burden, which make for
a favorable debt profile.
=========
J A P A N
=========
TOKYO ELECTRIC: Fumio Sudo Formally Named as Chairman
-----------------------------------------------------
Kyodo News reports that Tokyo Electric Power Co. formally
announced on Jan. 7 that Fumio Sudo, a former president of steel
maker JFE Holdings Inc., will become chairman of the struggling
utility April 1.
Kyodo relates that Kazuhiko Shimokobe, a 66-year-old lawyer who
was brought in from the outside to serve as chairman in June 2012,
will step down at the end of March.
Mr. Sudo, 72, is considered a suitable successor because of his
wealth of experience in corporate management and his contribution
to Tepco's reconstruction as an outside director, notes the
report.
Tepco is close to getting government approval of a new business
turnaround plan that is expected to feature greater public
financial support, Kyodo added.
Even so, notes the report, it remains unclear whether Tepco can
put its business back on track, given the uncertainty over when
the seven-reactor Kashiwazaki-Kariwa plant in Niigata Prefecture
will be able to resume partial operations.
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.
====================
N E W Z E A L A N D
====================
NZ DIRECTORIES: Yellow Directories Gains Waiver From Banks
------------------------------------------------------------
BusinessDesk reports that Yellow, the directories business seized
by its bankers in 2011, is confident it will continue to comply
with its debt covenants after gaining waivers for 2014 and will be
able to refinance some NZ$414 million of debt due next year.
BusinessDesk says NZ Directories Holdings, which owns the Yellow
business, narrowed its net loss of NZ$12.5 million in the year
ended June 30, 2013, from a loss of NZ$78 million a year earlier
when it took impairments totalling NZ$112.9 million against
goodwill, brands and customer relationships, according to its
annual report. Impairments in the latest year were NZ$41 million.
Sales fell to NZ$180.6 million from NZ$209.7 million in 2012,
BusinessDesk relays.
According to BusinessDesk, bankers to the company formerly known
as Yellow Pages Group wrote off $1.05 billion of debt when they
took control of the business in 2011. They were issued 250 million
shares held via Yellow Pages Equity Trust and $500 million of
senior notes, of which $86 million has since been repaid, in the
restructuring in January 2011.
The equity of the original owners, Hong Kong-based Unitas Capital
and Canada's Ontario Teachers' Pension Plan, who bought Yellow
Pages from Telecom for NZ$2.24 billion in 2007 in a leveraged buy-
out, was wiped out, BusinessDesk notes.
BusinessDesk reports that the floating rate notes mature in August
2015 and NZ Directories began talks with its banker owners late
last year over refinancing its facilities. According to the
report, Chief financial officer Michael Boerson, who saw the
company through its restructuring, said he is confident the banks
will agree to refinance the business.
"They own the business anyway," he told BusinessDesk. "While we're
producing good cash there's no logical reason why they would ask
for the debt back. But we still need to make sure we have the
right capital structure."
BusinessDesk says the company's gearing still looks horrendous. It
had negative equity of NZ$193 million last year, a deterioration
from NZ$180.9 million in 2012. Net debt was
NZ$382 million, more than twice the company's capital of
NZ$188.7 million. The gearing ratio worsened to -202 per cent from
-175 per cent, BusinessDesk discloses.
NZ Directories Holdings, formerly known as Yellow Pages Group was
formed in 1988 and publishes the print, online and mobile
directories for Yellow, as well as the White pages(R) and the
Local directoryTM. Yellow Pages owns the 018(R) directory
assistance service, a majority stake in 50s-plus website
grownups.co.nz, and publishes the Retirement guideTM and New
Zealand tourism guideTM, an award-winning online tourism
directory.
OCEANAGOLD CORP: To Cut Up to 25% Jobs Amid Falling Gold Prices
---------------------------------------------------------------
Stuff.co.nz reports that OceanaGold Corporation is proposing to
slash up to 25 per cent of the workforce at New Zealand's biggest
goldmine because of plummeting gold prices.
Stuff.co.nz relates that the casualties will be direct employees
and contractors' staff at the Macraes goldfield in Central Otago.
According to the report, the main union on the site acknowledged
it could be 200 jobs lost at the goldfield, although numbers have
not been finalised.
The company delivered the "devastating" news to some employees and
subcontracted staff on Jan. 7. Others were being told
Jan. 8, the report says.
"In general terms it is 25 per cent of the workforce onsite
including contractors and subcontractors," the report quotes
Secretary of the Amalgamated Workers union Calvin Fisher as
saying. About 400 positions would remain, he said.
The report notes that the NZ$100 million Macraes mine wage bill
would drop by a quarter.
According to the report, the impact on the region and small towns
like Palmerston and Waikouaiti where many workers lived was huge.
"It's devastating for those people," Mr. Fisher, as cited by
Stuff.co.nz, said.
The report says between January 8 and January 20 consultation
between the company, the workers and the union would determine who
would be affected.
Stuff.co.nz relates that Otago Chamber of Commerce chief executive
John Christie said the job losses were substantial.
The news was hard to take as it added to a string of job losses
throughout Otago in recent years because of closures or
downsizing, Mr. Christie said.
Based in Melbourne, Australia, OceanaGold Corporation (ASX:OGC)
-- http://www.oceanagold.com.au/-- is engaged in exploration and
the development and operation of gold and other mineral mining
activities. OceanaGold is a gold producer and is operating two
open cut mines and an underground mine at Macraes and Reefton in
New Zealand. The Company also has the Didipio Gold- Copper
Project in the Philippines as part of its portfolio. The
Company's projects are Macraes Gold Project, Reefton Gold Project
and Didipio Gold Copper Project.
=================
S I N G A P O R E
=================
PACNET LTD: Fitch Puts Rating on $350-Mil. Sr. Notes at 'BB/RR1'
----------------------------------------------------------------
Fitch Ratings has assigned Pacnet Limited's (Pacnet; B/Stable)
USD350m senior secured guaranteed notes due 2018 a final rating of
'BB/RR1'.
The assignment of the final rating follows the completion of the
bond issuance and receipt of documents conforming to the
information previously received. The final rating is in line with
the expected rating initially assigned on 10 June 2013 and
restated on 25 November 2013 prior to re-marketing of the bonds.
The 'RR1' Recovery Rating on the notes reflects Fitch's recovery
calculation for the notes of at least 90%, and therefore, under
our recovery rating methodology, the bonds are rated three notches
higher than the Issuer Default Rating (IDR). The notes are
subordinated to any future debt raised at non-guarantor
subsidiaries. However, Fitch understands that the company has no
plans to raise such funds.
The notes are jointly and severally guaranteed by all of Pacnet's
main income-generating subsidiaries. Non-guaranteeing
subsidiaries comprised 8% of the company's assets as of September
2013 and generated negative EBITDA in 2012.
Smaller Scale, Intense Competition: Low profitability, strong
competition from better capitalised market participants, weak
financial position and high execution risk of its data centre
strategy will continue to constrain Pacnet's ratings. Pacnet
competes with large telecoms incumbents in its primary service
offerings, such as managed data connectivity solutions. The scale
of Pacnet's data centre operations is also smaller than rivals' in
its key markets.
Substantial Execution Risk: Fitch expects further improvement in
Pacnet's EBITDA to be slow in the next few quarters and there is
considerable execution risk associated with the newly completed
and currently planned data centres in Singapore, China, Hong Kong
and Korea. Contribution from its internet data centres, which it
builds, owns and operates, has been limited so far. Successful
execution and rapid take-up of new internet data centre capacity
are critical to the company's long-term strategy.
Negative FCF Persists: Fitch expects Pacnet's free cash flow (FCF)
to remain negative for at least the next two years, due to
investment in data centres, and funds flow from operations (FFO)-
adjusted net leverage to remain over 4x for the next 18 months
(2012: 4.5x). However, both maintenance capex and committed capex
are low and therefore Pacnet has flexibility to manage its cash
requirements should internal funds need to be retained, as the
company has demonstrated in the past.
Restructuring Showing Results: Fitch acknowledges that the
restructuring in late 2012 has enabled Pacnet to refocus on core
businesses and streamlined its cost structure. In the first nine
months of 2013, Pacnet's reported EBITDA, adjusted for share
option compensation, restructuring costs, early payment discount
from a vendor, foreign exchange gains and other gains, rose 28%
yoy to USD82m, which was in line with our expectation.
Negative: Future developments that may, individually or
collectively, lead to negative rating action include:
-- FFO-adjusted net leverage rising to over 5x and FFO fixed
charge coverage falling below 2x (2012: 2.0x), both on a
sustained basis
Positive: Future developments that may, individually or
collectively, lead to positive rating action include:
-- FFO-adjusted net leverage falling below 4x, and FFO fixed
charge coverage rising above 2.5x, both on a sustained basis
=============
V I E T N A M
=============
* VIETNAM: Over 400 State-Owned Firms Declared Bankruptcy in 2013
-----------------------------------------------------------------
Biz Hub reports that more than 400 State-owned enterprises (SOEs)
declared bankruptcy or were dissolved last year, according to the
Ministry of Finance.
Biz Hub relates that a report from the ministry said that around
6,400 units last year across Vietnam were restructured, of which
3,659 businesses were recapitalised, while 1,022 companies were
restructured into one-member limited companies. Another 380
companies put themselves up for sale.
The ministry was quoted as saying by the Viet Nam Education
newspaper that 83 out of 91 groups and corporations, excluding 18
corporations under the Ministry of Defence, had prepared
restructuring plans, Biz Hub relays.
According to the report, Prime Minister Nguyen Tan Dung has
approved the restructuring plans of 17 businesses, including eight
business groups (the Electricity of Viet Nam group, the Viet Nam
National Textile and Garment group, the Viet Nam National Coal and
Mineral Industries group, the Viet Nam National Oil and Gas group,
Viet Nam National Chemical group, the Viet Nam Rubber group, the
Viet Nam Shipbuilding Industry group and the military-run telecom
group).
Another nine corporations, including the Viet Nam Paper
Corporation, the Viet Nam National Tobacco Corporation, the Viet
Nam Northern Food Corporation, the Viet Nam Southern Food
Corporation, the Viet Nam National Coffee Corporation, the Viet
Nam Maritime Corporation, the Viet Nam Aviation Corporation, the
Viet Nam Railway Corporation and the Viet Nam Cement Corporation,
also received approval for their restructuring plans, Biz Hub
discloses.
Eight of the 91 units have not yet submitted their restructuring
plans to the Prime Minister, Biz Hub notes.
According to Biz Hub, the ministry noted that the financial
situation of several restructured companies had improved. About 85
per cent of the 3,576 businesses that implemented re-
capitalisation programmes reported higher revenues, while 90 per
cent posted profits. About 86 per cent of these companies also
contributed more towards the State budget.
However, the ministry said the preparation and implementation of
restructuring plans in term of sectors had fallen below the
target. The number of businesses that are more than 51 per cent
owned by the State still account for a high proportion of the
companies requiring restructuring, Biz Hub reports.
It added that the slow implementation was because the ministries,
localities and groups had not paid adequate attention to the
restructuring process. Moreover, they had failed to provide
reports on their progress, as a result of which they did not
benefit from timely solutions, relays Biz Hub.
A subdued stock market and real estate sector also contributed to
the difficulties in the restructuring and the capital divestment
(privatisation) process of some companies. The ministry said it
would accelerate the re-capitalisation of companies in
collaboration with the related ministries to ensure that the
process is completed by 2015, Biz Hub adds.
*********
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, and Peter A. Chapman,
Editors.
Copyright 2014. 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 ***