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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
Monday, January 13, 2014, Vol. 17, No. 8
Headlines
A U S T R A L I A
AUSTRALIA: Prime Mortgage Arrears Stable in Oct, Moody's Says
LISA HO: Owner Set to Sue Financial Adviser Over Investment
NEW ENGLAND HOTEL: Operator Placed in Liquidation
QANTAS AIRWAYS: Moody's Cuts Senior Unsecured Rating to 'Ba2'
WAIKERIE ELECTRICAL: Clifton Hall Appointed as Liquidators
C H I N A
* CHINA: Consumer Products Exit in Favor of Growth, Fitch Says
I N D I A
ADHWRYOU HOTELS: ICRA Assigns 'D' Ratings to INR5cr Loans
AMBE AGRO: CRISIL Reaffirms 'BB+' Ratings on INR120MM Loans
APCO VEHICLES: CRISIL Upgrades Rating on INR105MM Loan to 'B+'
APEX FIBRE: CARE Assigns 'B+' Rating to INR2cr LT Bank Loans
AQUARIOUS MARKETING: CRISIL Reaffirms B+ Ratings on INR14M Loans
ASHWIN POLYCLINIC: ICRA Assigns 'C' Ratings to INR8.08cr Loans
AUTOMOTIVE COACHES: CRISIL Reaffirms D Ratings on INR515MM Loans
AZIZ ENTERPRISES: ICRA Assigns 'B' Rating to INR8cr Loans
BAJAJ HILL: ICRA Suspends 'D' Rating on INR9.95cr Loans
CALCUTTA SPRINGS: CRISIL Reaffirms 'B+' Rating on INR195MM Loans
COLORLINES CLOTHING: ICRA Reaffirms B+ Ratings on INR18.7cr Loans
DDR AND COMPANY: ICRA Assigns 'B+' Rating to INR0.5cr Loan
DEVANSH INDUSTRIES: ICRA Lowers Rating on INR9cr LT Loan to 'D'
DUNCANS INDUSTRIES: CARE Reaffirms 'B-' Rating on INR67.2cr Loans
EUROBOND INDUSTRIES: CARE Reaffirms 'B' Rating on INR27.68cr Loan
FRUITFUL BUILDCON: ICRA Cuts Rating on INR65cr Loan to 'B+'
GEETALAKSHMI MODERN: ICRA Ups Ratings on INR10cr Loans to 'B+'
GURUDEVA CHARITABLE: CRISIL Puts 'D' Ratings on INR270MM Loans
J J DEVELOPER: CRISIL Rates INR60MM Term Loan at 'B'
JANKI NEWSPRINT: ICRA Reaffirms 'D' Ratings on INR25cr Loans
KARTHIK INDUCTIONS: CARE Revises Rating on INR2.5cr Loan to 'B'
MADHUCON AGRA: ICRA Cuts Rating on INR230cr Term Loans to 'D'
MAHER COTTON: CRISIL Reaffirms 'B-' Rating on INR75MM Loan
MALWA PROJECTS: ICRA Assigns 'B' Rating to INR15cr LT Loans
MJR BUILDERS: CRISIL Reaffirms 'B+' Rating on INR450MM Loan
N.A. SHELAR: CRISIL Cuts Ratings on INR50MM Loans to 'D'
NIKKI STEELS: CRISIL Lowers Rating on INR100MM Loan to 'B'
OBEROI CARS: ICRA Reaffirms 'B' Ratings on INR28cr Loans
PCI PAPERS: ICRA Reaffirms 'D' Ratings on INR13.77cr Loans
RADHALAXMI SPINTEX: CARE Assigns 'B' Rating to INR36.3cr Loans
REAL AGRO: ICRA Assigns 'B+' Rating to INR11.47cr Loans
RICHI RICH: CARE Reaffirms 'B+' Rating on INR13.4cr LT Loans
S.S. INDUSTRIES: CARE Assigns 'B+' Rating to INR8.66cr Loans
SADVI POWER: CRISIL Cuts Ratings on INR70MM Loans to 'D'
SALASARHANUMANJI GRAINS: CARE Rates INR23.5cr Loans at 'B+'
SAS AUTOCOM: CRISIL Reaffirms 'D' Ratings on INR350MM Loans
SINEWAVE BIOMASS: ICRA Suspends 'D' Rating on INR38cr Term Loans
SONALE FABRICS: ICRA Suspends 'B-' Rating on INR11.33cr Loans
SREE GURUDEVA: ICRA Reaffirms 'B' Ratings on INR16cr Loans
STAR PAPER: CARE Assigns 'B+' Rating to INR19cr LT Bank Loan
SVR ELECTRICALS: ICRA Upgrades Ratings on INR6.85cr Loans to 'B'
TM TYRES: CRISIL Downgrades Ratings on INR520MM Loans to 'D'
VIMAL MICRONS: ICRA Reaffirms 'B+' Ratings on INR25.93cr Loans
I N D O N E S I A
ALAM SUTERA: Moody's Affirms B1 CFR & Rates Proposed Notes (P)B1
APEXINDO PRATAMA: Moody's Withdraws (P)'Ba3' CFR
MNC SKY VISION: Moody's Upgrades CFR to B1; Outlook Stable
J A P A N
AGURA BOKUJO: Execs Get Prison Term For Misleading Investors
TOKYO HY-POWER: Files for Bankruptcy
M O N G O L I A
TRADE AND DEVELOPMENT: Moody's Assigns B1 Rating to Sr. Notes
N E W Z E A L A N D
TOLL HOLDINGS: NZ Unit Widens 2013 Annual Loss to NZ$60MM
X X X X X X X X
* Moody's Asian Liquidity Stress Index Rise to 20% in December
- - - - -
=================
A U S T R A L I A
=================
AUSTRALIA: Prime Mortgage Arrears Stable in Oct, Moody's Says
-------------------------------------------------------------
Moody's Investors Service says that delinquencies in excess of 30
days in the Australian prime residential mortgage market measured
1.30% in October 2013, up marginally from 1.29% in September.
Meanwhile, the prime 60-day-plus arrears in October 2013 were
0.73%, the same as September 2013.
"Looking ahead, we expect the performance trends witnessed in 2013
for the Australian market to continue in 2014, with losses
remaining low, even though delinquencies will rise incrementally,"
says Noirit Zaman, a Moody's Associate Analyst.
"This view is underpinned by our expectation for modest GDP growth
of 2.0% to 3.0%, as well as the continuation of the current low
interest rate environment and broadly stable unemployment rates of
5% to 6%," adds Zaman.
LISA HO: Owner Set to Sue Financial Adviser Over Investment
-----------------------------------------------------------
Melinda Oliver at SmartCompany reports that fashion designer
Lisa Ho is set to sue former friend and financial adviser
Hamish McLaren for around AUD850,000.
The move follows the closure of the long-established Lisa Ho
fashion brand in late 2013, following administration, SmartCompany
says.
According to SmartCompany, The Australian Financial Review said
Ms. Ho has reportedly lodged documents in the Federal Court to sue
Mr. McLaren after he allegedly failed to deliver a return on a sum
of AUD850,000 that Ms. Ho invested via her super fund.
The paper reports that in 2013 Mr. McLaren returned AUD200,000 of
the money to Ms. Ho. It reported that Ms. Ho is suing for alleged
misleading and deceptive conduct in regard to his ability to make
a return on the investment.
The case for Lisa Ho is one of many challenges the designer has
faced in recent times, following the collapse of her business in
May 2013, SmartCompany notes. The ATO brought up the issue of a
possible "phoenix" situation after the designer bought the
intellectual property to the brand, according to SmartCompany.
At the time of administration, the business was reportedly in debt
of around AUD11 million, and around 100 staff were put out of
work, SmartCompany recalls.
All Lisa Ho retail stores closed on July 7 last year, followed by
a final warehouse sale of unsold apparel. However, the Lisa Ho
eyewear intellectual property was sold to luxury eyewear producer
and distributor Face Optics on June 28, the report adds.
The Lisa Ho chain comprises 10 flagship stores in Australia, two
clearance stores and an online store.
Administrators HLB Mann Judd were appointed as administrators to
iconic Australian fashion brand Lisa Ho earlier in May.
SmartCompany said Lisa Ho recorded AUD13.05 million in revenue in
2012 but made a loss of AUD2.3 million, which the business
attributed to "one-off issues". This led to the appointment of
administrators to Lisa Ho Designs and Lisa Ho Retail.
Lisa Ho Designs entered liquidation on July 10, 2013, as a result
of a creditors meeting.
NEW ENGLAND HOTEL: Operator Placed in Liquidation
-------------------------------------------------
The Armidale Express reports that the company operating the
New England Hotel was found to be in a state of liquidation,
leaving a string of unsatisfied creditors.
"The hotel's closure is a commercial issue and not related to its
liquor licence. In December 2013, the Authority was advised that a
liquidator had been appointed and that the hotel had stopped
trading," an Independent Liquor & Gaming Authority spokesman said
in a statement to The Armidale Express.
QANTAS AIRWAYS: Moody's Cuts Senior Unsecured Rating to 'Ba2'
-------------------------------------------------------------
Moody's Investors Service has downgraded to Ba2 from Baa3 Qantas
Airways Limited's senior unsecured rating. Qantas' short term
rating has also been downgraded to NP (Not Prime) from P-3. This
concludes the review initiated on Dec. 5, 2013, following Qantas'
announcement and market update that it was now expecting an
underlying loss before tax of AUD250 to AUD300 million for the six
months ended Dec. 31, 2013.
At the same time, Moody's has assigned a Corporate Family Rating
(CFR) of Ba1 to Qantas. The CFR, which is typically assigned to
non-investment grade corporates, reflects Moody's opinion on
Qantas' ability to honour its financial obligations as if it had a
single class of debt and a single consolidated legal entity
structure.
The outlook for the ratings is negative.
RATINGS RATIONALE
"The downgrade to Ba2 reflects a worse than expected impact on
Qantas' credit profile of a marked sharp deterioration in the
company's core domestic business, which has been a key supporting
factor of its previous investment grade rating", says Ian Lewis a
Moody's Senior Vice President, adding "As a consequence, we expect
these conditions to exacerbate an already high financial
leverage." "Furthermore, the downgrade of the rating to Ba2
incorporates notching, given the material secured debt in Qantas'
capital structure.", adds Lewis.
"The cause of the deterioration in the operating profile is
largely due to the aggressive competitive actions by Qantas' key
domestic competitor, Virgin Australia Holdings Limited ("VAH",
Virgin Australia Enhanced Equipment Notes A-tranche rated Baa2, B-
tranche rated Ba3, C-tranche rated B2, D-tranche rated B3). These
actions, which include capacity additions, have shifted the market
dynamic against Qantas in a structural way." "As such, we expect
that Qantas' business risk and financial leverage will remain at
elevated levels and inconsistent with an investment grade
rating.", Lewis adds.
"Qantas's domestic business will remain challenged as VAH's
actions, and Qantas' response to maintain market share, continue
to pressure yield.", Lewis says, adding "In the absence of any
additional material countermeasures, we expect Qantas' Debt/EBITDA
ratio to be at or above 5x Debt/EBITDA - well outside the range
for its previous investment grade rating".
"These challenges are incorporated in Qantas' Ba1 corporate family
rating. The Ba2 senior unsecured rating is notched down from the
corporate family rating reflecting the higher probability of
default in the speculative grade category and the presence of
material secured debt in Qantas' capital structure", adds Lewis.
The December announcement by Qantas highlights that the domestic
business has been impacted far more extensively and rapidly than
our previous expectations. "This is a major turnaround from
previous years and indeed its most recent full year 2013 results
announcement" Lewis says, adding "The material downturn in Qantas'
domestic business also comes at a time when the carrier is
grappling with a turnaround in its loss making international
mainline business. As such the business is exposed to execution
challenges on two fronts, simultaneously."
The negative outlook reflects these challenges and the risk of
further rating downgrade if Qantas is unable to address these
issues and arrest the decline in its credit profile. At the same
time we recognize that management has countermeasures available to
address its declining profitability, such as further cost
reduction, potential asset sales and reduction of capital
expenditure.
Moody's also notes that the Treasurer of the Australian
Commonwealth Government (Aaa stable) has recently commented on the
need for a debate on whether Australia requires a national
carrier, and that the government would also consider all the
options available to help Qantas should the public want it to
continue its role as the national carrier.
"Whilst the issue is currently a matter of discussion and the
government has not yet detailed how it plans to proceed, a form of
government support would, depending on form and structure, also
potentially provide support for Qantas' liquidity position and/or
credit profile. Moody's will observe any potential for positive
credit impact when and if such counter-measures are announced and
depending on the form of the support.", adds Lewis.
The rating outlook could be revised to stable if Qantas is able to
restore the profitability of both its international and domestic
operations to levels that are able to sustain appropriate levels
of debt. Financial metrics that Moody's would look for include
Debt/EBITDA remaining below 4.75x on a consistent basis.
On the other hand, further negative ratings pressure could evolve
if Qantas is unable to restore the core profitability of its
international and domestic businesses or reduce debt to
appropriate levels, commensurate with its sustainable earnings.
Financial metrics that Moody's would look for include Debt/EBITDA
remaining above 5.0 x on a sustained basis. In addition, a
material deterioration in liquidity could impact the carrier's
ratings.
Qantas is Australia's largest domestic carrier, and estimates its
total domestic market share at around 66% at June 30, 2013.
WAIKERIE ELECTRICAL: Clifton Hall Appointed as Liquidators
----------------------------------------------------------
Timothy Clifton and Mark Hall of Clifton Hall were appointed Joint
and Several Liquidators of Waikerie Electrical Sales & Service Pty
Ltd on Jan. 9, 2014.
A meeting of creditors will be held at Clifton Hall, Level 1, 12
Gilles Street, in Adelaide, South Australia on Jan. 20, 2014, at
10:00 a.m.
=========
C H I N A
=========
* CHINA: Consumer Products Exit in Favor of Growth, Fitch Says
--------------------------------------------------------------
The recent exit of Revlon Consumer Products and L'Oreal S.A's
Garnier brand from China is an affirmation of the sectors' focus
on profitable growth, according to Fitch Ratings. From Procter &
Gamble (P&G), with over $80 billion in revenues, to Revlon
Consumer Products, Inc., with pro forma revenues of $2 billion,
the pursuit of revenue growth at all costs has become less
fashionable in a slow-growth and volatile global markets
environment.
In the short term, focusing investments that have higher margin
and cash flow potential is positive. Due to insufficient scale or
pricing power, operating in China is not always profitable for
global fast-moving consumer goods companies. However, there could
be longer term negative implications with a complete exit from a
large market such as China, which has significant potential.
Geographic exits are not unique to China. Kimberly-Clark Corp. is
exiting $500 million in tissue businesses in Western Europe, which
is considered a highly competitive and slow growth market.
However, there is concern when companies exit markets such as
China where sheer demographics support long-term growth. Further,
many companies find it more difficult to re-enter a market after
incumbents have had time to invest and capture large market
shares. Re-entering large markets at a later stage may require
heavier investments, including merger and acquisitions (M&As).
Fitch regards these exits on a case-by-case basis. L'Oreal, with
significant rating headroom, is merely putting its muscle behind
other brands in China and will still retain access to China's
potential. Complete exits such as Revlon are understandable from
a short-term perspective, as the company does not appear to have
the scale and financial flexibility to compete and invest in
China's vast and fragmented retail market, and its margins and
profitability will benefit in the near term. However, Revlon's
presence in other emerging markets is relatively small, and given
the Colomer acquisition, its exposure to the U.S. and Western
European markets increases. The benefit in the near term might
hamper its longer term growth.
Avon Products, Inc. also has issues in China, and given the sector
focus on profitable growth, exiting could make financial sense in
the short term. Avon has some flexibility to invest further,
though less than several years ago. The long-term potential of
the world's largest population and the difficulty of re-entering
and building a sales force are likely behind the company's
decision to continue trying to stabilize operations in China.
Nonetheless, Fitch notes that management is pragmatic in balancing
financial flexibility versus revenue growth and exited both South
Korea and Vietnam in 2012.
=========
I N D I A
=========
ADHWRYOU HOTELS: ICRA Assigns 'D' Ratings to INR5cr Loans
---------------------------------------------------------
ICRA has assigned the '[ICRA]D' rating to the INR5.0 crore long
term fund based facilities of Adhwryou Hotels Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term, fund 4.75 ICRA]D Assigned
based limits-
Term Loans
Long term, fund 0.25 [ICRA]D Assigned
based limits-
Cash credit
The assigned ratings reflect delays in debt servicing by the
company owing to tight liquidity condition. Financial profile of
the AHPL is characterized by marginal accruals, adverse
capitalization and weak coverage indicators. Company's scale of
operations is small with dependence upon single hotel property and
it faces pressure on occupancy rates and average room rates (ARR)
on account of competition from relatively more reputed brands in
the vicinity. ICRA has however taken note of longstanding
experience of the promoter in real estate development and
hospitality sector, healthy net worth position of the promoters
and favorable location of the hotel with proximity to Pune
International airport and other commercial areas. Going forward,
timely servicing of debt obligations, scaling up operations with
improvements in profitability will remain key rating sensitivity.
Established in 2005, AHPL is promoted by Malke and Machre family
and operate 'Mapple Adhwryou' hotel in Wagholi, Pune. Company has
tie up with 'Mapple' for looking after the marketing and
management of the hotel which is located ~8 kms from the Pune
International Airport. Hotel has a total of 52 rooms, one
restaurant with bar and two banquet halls.
AMBE AGRO: CRISIL Reaffirms 'BB+' Ratings on INR120MM Loans
-----------------------------------------------------------
CRISIL's rating on the bank facilities of Ambe Agro Industries
Limited continue to reflect the benefits that Ambe group derives
from its promoters' experience in the wheat processing business,
its established relationships with institutional customers, and
its above-average financial risk profile, marked by low gearing
and healthy debt protection metrics. These rating strengths are
partially offset by the Ambe group's exposure to risks related to
fragmentation in the industry and susceptibility to volatility in
raw material prices.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 110 CRISIL BB+/Stable (Reaffirmed)
Standby Line 10 CRISIL BB+/Stable (Reaffirmed)
of Credit
For arriving at its ratings, CRISIL has combined the financial
risk profiles of AAIL with Shree Ambe Food Products Pvt Limited.
This is because both the companies, collectively referred to as
the Ambe group, are in the same line of business and have
financial linkages in the form of corporate guarantees issued for
each other.
Outlook: Stable
CRISIL believes that the Ambe group will continue to benefit from
its established market position in the flour business and healthy
relationships with institutional customers, over the medium term.
The outlook may be revised to 'Positive' in case of any
significant and sustainable improvement in the group's revenue and
profitability margins while at the same time maintaining the
capital structure. Conversely, the outlook may be revised to
'Negative' if the group's operating margin declines, or if stretch
in its working capital cycle leads to weaker liquidity, or if it
undertakes large, debt-funded capital expenditure.
About the Company
Incorporated in 1997 by Mr. Bimal Kant Gupta, AAIL is in the
business of converting wheat into flour products such as maida,
atta, and sooji.
APCO VEHICLES: CRISIL Upgrades Rating on INR105MM Loan to 'B+'
--------------------------------------------------------------
CRISIL has upgraded its long-term rating on the bank facilities of
Apco Vehicles India Pvt Ltd to 'CRISIL B+/Stable' from 'CRISIL
B/Stable', while reaffirming its short-term rating at 'CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 105 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
Inventory Funding 45 CRISIL A4 (Upgraded from
Facility 'CRISIL B/Stable')
The upgrade in the long-term rating reflects CRISIL's belief that
AVIPL will maintain its improved liquidity over the medium term.
The company is likely to generate net cash accruals of around
INR18 million in 2013-14 (refers to financial year, April 1 to
March 31). AVIPL will entirely utilise these cash accruals to meet
its working capital requirements, given its term debt-free status.
The company's financial risk profile has improved along with its
enhanced operating performance, which was driven by healthy growth
in its operating income and an improvement in its operating
profitability in 2012-13. Consequently, the company's total
outside liabilities to tangible net worth (TOLTNW) and interest
coverage ratios improved. CRISIL believes that AVIPL will sustain
its improved financial risk profile over the medium term, on the
back of its moderate cash accruals.
CRISIL's ratings continue to reflect AVIPL's revenue
concentration, and exposure to intense competition in the
automobile dealership segment. The ratings also factor in the
company's below-average financial risk profile, marked by a small
net worth and a high TOLTNW ratio. These rating weaknesses are
partially offset by AVIPL's established position in the automobile
dealership segment for Hyundai Motor India Ltd (Hyundai; rated
'CRISIL A1+') in North Kerala.
Outlook: Stable
CRISIL believes that AVIPL will continue to benefit over the
medium term from the promoters' extensive experience in the
automobile dealership segment. The outlook may be revised to
'Positive' if the company significantly improves its financial
risk profile, marked by an improvement in its net worth and TOLTNW
ratio, resulting from an improvement in its cash accruals and
working capital management. Conversely, the outlook may be revised
to 'Negative' if AVIPL registers a decline in its market share,
thereby impacting its revenues and profitability; or undertakes
any large, debt-funded capital expenditure (capex) programme, thus
weakening its capital structure and cash accruals.
AVIPL was incorporated in Calicut (Kerala) in 2008. The company is
an authorised dealer for Hyundai's passenger vehicles in Kasargod,
Kozhikode, and Wayanad (all in Kerala). AVIPL is promoted by Mr. A
P Abdul Kareem and his five brothers.
APEX FIBRE: CARE Assigns 'B+' Rating to INR2cr LT Bank Loans
------------------------------------------------------------
CARE assigns 'CARE B+' and 'CARE A4' ratings to the bank
facilities of Apex Fibre India Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 2 CARE B+ Assigned
Short-term Bank
Facilities 8 CARE A4 Assigned
Rating Rationale
The ratings assigned to the bank facilities of Apex Fibre India
Limited are primarily constrained by its short track record and
small scale of operations, low profitability margins and
leveraged capital structure. The ratings are further constrained
by the company's exposure to raw material price fluctuations and
the foreign exchange fluctuation risk.
The above constraints are partially offset by the strengths
derived from the experienced promoters of AFI, its association
with the Homeland group, and favorable outlook of the edible oil
industry.
The ability of AFI to increase its scale of operations while
managing its foreign exchange fluctuation risk and improvement in
the capital structure shall be the key rating sensitivities.
Apex Fibre India Limited was incorporated in 2003 as LYS
Industries Limited and its name was changed to the present one in
2010. The current management comprises of Mr Rahul Goyal, Mr
Samita Goyal and Mr Aman Garg. AFI is mainly engaged in the
trading of edible oil such as crude palm oil (CPO), soyabean oil,
etc on high seas basis. The company imports products from
countries like Singapore, Indonesia, Malaysia, Argentina, Brazil,
etc. The company sells in the domestic market (all over India) to
oil refining companies through agents/brokers.
During FY13 (refers to the period April 1 to March 31), AFI
reported a net profit of INR0.04 crore on a total operating income
of INR12.88 crore. The company has achieved sales of around
INR5.10 crore for 4MFY14.
AQUARIOUS MARKETING: CRISIL Reaffirms B+ Ratings on INR14M Loans
----------------------------------------------------------------
CRISIL's ratings on the bank facilities of Aquarious Marketing Pvt
Ltd continue to reflect AMPL's below average financial risk
profile, marked by a small net worth and weak interest coverage
ratio.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 8 CRISIL B+/Stable (Reaffirmed)
Export Packing Credit 12 CRISIL A4 (Reaffirmed)
Foreign Bill
Discounting 24 CRISIL A4 (Reaffirmed)
Proposed Long Term
Bank Loan Facility 6 CRISIL B+/Stable (Reaffirmed)
Proposed Short Term
Bank Loan Facility 30 CRISIL A4 (Reaffirmed)
Standby Letter of
Credit 10 CRISIL A4 (Reaffirmed)
The ratings also reflect the company's modest scale of operations
in a fragmented tea trading industry and the working capital
intensive nature of its operations. These rating weaknesses are
partially offset by the extensive experience of AMPL's promoters
in the business and moderate risk management policies followed by
the company.
Outlook: Stable
CRISIL believes that AMPL's moderate risk management policies will
protect its financial profile from sharp variations in tea prices
but expects the liquidity will remain stretched due to working
capital intensity of operations. The outlook may be revised to
'Positive' if the company's scale of operations and profitability
increases substantially while ensuring tight control on the
working capital cycle. Conversely, the outlook may be revised to
'Negative' if AMPL's financial risk profile, especially its
liquidity, weakens most likely due to stretch in working capital
cycle.
About the Company
AMPL, incorporated in 1991, exports and trades in orthodox and
crush, tear, curl (CTC) tea. Around 90 per cent of the company's
revenue comes from exports to four to five customers and the rest
comes from sales to wholesalers and dealers based in Indore
(Madhya Pradesh) and Kolkata (West Bengal). AMPL's managing
director is Mr. Dikshit Arya, who has experience of around three
decades in the tea industry.
ASHWIN POLYCLINIC: ICRA Assigns 'C' Ratings to INR8.08cr Loans
--------------------------------------------------------------
ICRA has assigned the long-term rating of '[ICRA]C' to the INR3.72
crore term loan facilities and INR4.36 crore fund based facilities
of Ashwin Polyclinic Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term-Term
loan facilities 3.72 [ICRA]C assigned
Long-term-Fund
based facilities 4.36 [ICRA]C assigned
The assigned rating consider the long-standing experience of the
promoters in the healthcare industry for more than two decades and
healthy demand outlook for healthcare services in India supported
by increasing population and per capita income. The rating is,
however, constrained by sharp deterioration in debt protection
metrics of the Company in the recent past on account of the
financial support extended to the group entity, P. Perichi Gounder
Memorial Charitable Trust (PPG Trust), which has weak financial
risk profile. The rating also factors in operational risk inherent
to a single location hospital, likely increase in competition from
other major hospitals in the state though the same is mitigated to
an extent by being a tertiary care unit offering specialized
services. Going forward, the ability of the Company to enhance its
scale and improve its leveraged capital structure will remain the
key rating sensitivities.
APPL was promoted in 1988 by Dr. L.P. Thangavelu and his wife Mrs.
Shanthi Thangavelu. The Company operates a multi-speciality
hospital with 120 bed facility and commenced its operations from
1992. The hospital offers specialized treatment in Oncology apart
from other specialized services like Cardiology, Gynaecology,
Neurosurgery, Plastic surgery, treatment for severe burns,
Obstetrics, Neonatology, General medicine etc. The hospital is
currently in the process of installing latest equipment (Linear
Accelerator) for cancer treatment. The Company has tie-ups with
Corporate, major Insurance Companies, Third Party Administrators
(TPAs) and State and Central government agencies to offer cashless
treatment.
APPL's group entity, P. Perichi Gounder Memorial Charitable Trust
(PPG Trust), was established in 1992 by Dr. L.P. Thangavelu and
his wife Mrs. Shanthi Thangavelu in Coimbatore. PPG trust runs
engineering, nursing and management colleges, a charitable
hospital, and a public school, all in Coimbatore.
Recent Results
APPL has reported net profit of INR0.13 crore on an operating
income of INR3.7 crore in 2012-13 as against net profit of INR0.02
crore on an operating income of INR2.6 crore during 2011-12.
AUTOMOTIVE COACHES: CRISIL Reaffirms D Ratings on INR515MM Loans
----------------------------------------------------------------
CRISIL has assigned its 'CRISIL D' rating to the long term bank
loan facilities of Automotive Coaches and Components Ltd (ACCL).
The rating reflects delays by ACCL in servicing its debt due to
weak liquidity, driven by its loss-making operations.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 155 CRISIL D (Reaffirmed)
Long Term Loan 360 CRISIL D (Reaffirmed)
ACCL also has a weak financial risk profile, constrained by its
loss-making operations and susceptibility to downturns in the end-
user industry. However, the company benefits from its established
customer relations, and the promoters' experience in the
manufacturing industry.
About the Company
ACCL was established in the early 80s. The company manufactures
tippers and trailers at each of its plants in Chennai (Tamil Nadu)
and Puducherry. Until 2013, ACCL was an affiliate of Ashok Leyland
Ltd (ALL), which was the majority stake holder and sole customer.
The former promoters sold its entire stake to the Singh and Baid
Family in 2013-14
AZIZ ENTERPRISES: ICRA Assigns 'B' Rating to INR8cr Loans
---------------------------------------------------------
ICRA has assigned the long term rating of '[ICRA]B' to the INR8.00
crore fund based bank facilities of Aziz Enterprises.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based Bank 8.00 [ICRA]B assigned
Facilities
The assigned rating takes into the account the modest scale of
operations of the firm as well as its moderate profitability owing
to concentration towards low value-add trading activities and
highly competitive and fragmented nature of the gems and jewellery
industry. Profitability margins additionally remain susceptible to
price and currency fluctuations since the inventory procurement by
the firm is not order-backed and the firm does not follow any
hedging mechanism for its import payments. The rating also remains
constrained by the working capital intensive nature of operations
of the firm owing to high inventory and debtor turnover period
which coupled with moderate profitability and regular withdrawals
of capital by the partners have led to a weak financial profile
characterized by low level of accruals vis-a-vis debt levels and
high utilisation of working capital limits reflecting stretched
liquidity position for the firm. ICRA also notes that the entity
remains exposed to other risks associated with its constitution as
a partnership firm such as limited sources of raising capital.
The rating however draws comfort from the long track record of the
promoters, who have been engaged in the gems and jewellery
industry for more than three decades.
While the revenue mix for the firm is expected to remain dominated
by low value add trading activities, ability of the firm to
improve its scale of operations and maintain its profitability
margins while reducing its working capital cycle will remain
critical for its financial profile and hence would be the key
rating sensitivities going forward.
Incorporated in 1972 as a partnership firm, Aziz Enterprises is
engaged in cutting, polishing and trading of precious gems, with
product profile dominated by emerald stones. Prior to FY2013, the
firm undertook only cutting and polishing of these precious
stones. However since FY2013, the firm has started trading of
rough emerald stones as well. At present, the firm is primarily
focussing on trading of rough emerald stones.
The firm is managed by Mr. Ikramullah and Mr. Samiullah, who have
been engaged in this line of business since 1975. The firm is also
a member of Gems & Jewellery Export Promotion Corporation.
Recent Results
The firm reported a net profit of INR0.25 crore on an operating
income of INR14.36 crore in FY2013 as against a net profit of
INR0.10 crore on an operating income of INR1.97 crore in FY2012.
Till November 30, 2013, the firm had achieved sales of INR3.00
crore, with INR2.40 crore accruing in the form of export sales of
cut and polished emeralds and balance INR0.60 crore in the form of
sales of rough emerald stones in the domestic market. The firm
currently holds inventory worth INR9.53 crore (largely in the form
of rough emerald stones), which is expected to be liquidated in
the coming months.
BAJAJ HILL: ICRA Suspends 'D' Rating on INR9.95cr Loans
-------------------------------------------------------
ICRA has suspended '[ICRA]D' rating assigned to the INR9.95 crore,
long term loans and unallocated facilities of Bajaj Hill Resorts
Pvt. Ltd. The suspension follows ICRA's inability to carry out a
rating surveillance due to lack of cooperation from the company.
CALCUTTA SPRINGS: CRISIL Reaffirms 'B+' Rating on INR195MM Loans
----------------------------------------------------------------
CRISIL's ratings on the bank facilities of Calcutta Springs
Limited, continues to reflect the benefits that the group derives
from the promoter's industry experience. The ratings also factor
in Calspring group's established market position in railway track
material manufacturing, and its wide product portfolio. These
rating strengths are partially offset by high customer
concentration in the Calspring group's revenues, its large working
capital requirements, and susceptibility to intense industry
competition.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 100 CRISIL A4 (Reaffirmed)
Cash Credit 50 CRISIL B+/Stable (Reaffirmed)
Foreign Bill Purchase 35 CRISIL A4 (Reaffirmed)
Letter Of Guarantee 100 CRISIL A4 (Reaffirmed)
Term Loan 145 CRISIL B+/Stable (Reaffirmed)
For arriving at its ratings, CRISIL has combined the business and
financial risk profiles of Calcast Ferrous Limited, CSL, and
Calstar Steel Ltd (Cal Steel). This is because these companies
together referred to as the Calspring group, have a common
management team, cross shareholdings, operate in a similar line of
operations, and have operational and financial linkages.
CRISIL has treated the preference capital of INR74.9 million,
infused by CSL as on March 31, 2013, as a part of equity capital,
as it is interest free, and extended by the promoters and their
group company. Moreover, the promoters are likely to retain the
preference capital in the business in the long term.
Outlook: Stable
CRISIL believes that the Calspring group will continue to benefit
over the medium term from its established market position in the
railway track components segment and the promoters' extensive
industry experience. The outlook may be revised to 'Positive' if
the group records sizeable operating income and profitability, or
a lower-than-expected working capital cycle, thus improving its
financial risk profile. Conversely, the outlook may be revised to
'Negative' if the Calspring group generates a lower-than-expected
operating margin or reports an increase in its working capital
cycle or undertakes a large, debt-funded capital expenditure
(capex) programme over the medium term, thereby weakening its
financial risk profile.
Update
The Calspring group's operating revenues improved to around INR1.5
billion in 2012-13 (refers to financial year, April 1 to March
31), from around INR1.38 billion in 2011-12, at a growth of 8.3
per cent. The growth resulted from the group's sales through its
new manufacturing facility for CMS crossing unit. The group's
operating margin improved from 6.1 per cent in 2011-12 to 7.1 per
cent in 2012-13, driven by high-margin export sales, which grew by
80 per cent in 2012-13 to INR274 million, and its increasing scale
of operations leading to better fixed cost absorption.
The Calspring group's operations remain working-capital-intensive,
with gross current assets (GCAs) of around 249 days as on March
31, 2013, compared to 265 days as on March 31, 2012. The group's
GCAs resulted from inventory of around 76 days and a receivables
cycle of 76 days as on March 31, 2013. The Calspring group
stretched its suppliers, with payables of 197 days as on March 31,
2013.
The Calspring group has a moderate financial risk profile, marked
by low gearing of 0.91 times as on March 31 2013, lower than 1.22
times a year ago. The group has moderate debt protection metrics
with net cash accruals to total debt and interest coverage ratios
of 17 per cent and 1.89 times, respectively in 2012-13. The
Calspring group also maintained moderate net worth of INR469
million as on March 31, 2013.
The Calspring group has adequate liquidity with bank limit
utilisation of around 71 per cent over the 12 months through
September 2013. Furthermore, the group's cash accruals of INR72.5
million, were adequate to meet its maturing debt obligations of
INR42.1 million. The group had a low unencumbered cash balance of
INR4.7 million as on March 31, 2013.
CSL reported standalone net cash accruals of INR32.8 million for
2012-13 were inadequate to meet the term debt repayments of
INR42.1 million in the same year which was however supported by
funds from the promoters in the form of unsecured loans of Rs 41
million.
Incorporated in 1989, CSL is the flagship company of the Calspring
group promoted by Mr. Tulsiram Agarwal. Subsequently, the promoter
founded CFL and Cal Steel in the 1990s. Through its affiliates,
the group has been manufacturing railway track material for the
Indian Railways (IR) for the past 25 years. The group has
manufacturing facilities in Alampur, Uluberia, Bighati, Sandhipur,
Howrah (all in West Bengal), Girisola (Odisha), and Kanpur (Uttar
Pradesh).
The Calspring group's day-to-day operations are managed by Mr.
Tulsi Ram Agarwal and his three sons.
The Calspring group reported a profit after tax (PAT) of INR35.7
million on operating income of INR1.5 billion for 2012-13, vis-a -
vis a PAT of INR19.5 million on operating income of INR1.38
billion for 2011-12.
COLORLINES CLOTHING: ICRA Reaffirms B+ Ratings on INR18.7cr Loans
-----------------------------------------------------------------
ICRA has reaffirmed '[ICRA]B+' rating to the INR2.70 crore term
loan facilities and the INR16.00 crore fund based facilities of
Colorlines Clothing (India) Private Limited. ICRA has also
reaffirmed the short-term rating of '[ICRA]A4' for the INR0.70
crore non-fund based facilities of CCIPL.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term Loan facilities 2.7 [ICRA]B+/Reaffirmed
Long-Term Fund
Based Limits 16.0 [ICRA]B+/Reaffirmed
Short-Term Non
Fund Based Limits 0.7 [ICRA]A4/Reaffirmed
The reaffirmation of the ratings continues to factor the long-
standing experience of the promoters in the textile industry, the
Company's reputed customer base and presence of in-house
professional designing team supporting the business prospects. The
Company enjoys established relationships with renowned
international brands such as C&A, Mexx, Mothercare, Matlan Retail
Limited and Levis International among others. Further, new
customer acquisition (Tesco Corporation) is also expected to
support the revenue expansion going forward. While the Company's
performance has remained impacted over the past two years, ICRA
notes that the various cost optimization initiatives such as
consolidation of manufacturing facilities head count
rationalization measures taken by the Company have helped the
Company in reducing the operating costs thereby improving the
operating performance during H1 2013-14.
The ratings also take into account the Company's financial profile
characterized by weak operating accruals, stretched coverage
indicators and strained working capital position. The ratings
continue to factor high competitive intensity witnessed both from
domestic garment manufacturers and from cost competitive countries
such as Sri Lanka, China and Bangladesh, exposure of the Company's
margins to foreign currency risks and high revenue dependence of
CCIPL on the US, Germany and UK. Going forward, the Company's
ability to scale up, improve its operating performance and ease
its working capital position would remain key rating
sensitivities.
Initially started as a partnership firm by Mrs. Bela Katrak and
Mr. Gev Khargemwala, Colorlines Clothing (India) Private Limited
was converted to a private limited Company in 2008-09 after Mrs.
Bela Katrak bought the entire stake from her partner, Mr. Gev
Khargemwala during 2006-07. The Company is engaged in
manufacturing and export of ready-made garments for kids
(primarily for the age group of 0-12). The Company presently has
five manufacturing units located in and around Bangalore (to be
reduced to three units; two units are to be merged with the
existing other units by Q4 2013-14). The Company mainly caters to
export customers (over 95% of its total sales) like C&A,
Mothercare, Mexx, Matlan Retail and Mini Boden in the markets of
Europe and UK.
Recent Results
For 2012-13, the company reported an operating income of INR78.4
crore with a net loss of INR4.6 crore as against an operating
income of INR77.4 crore and a net loss of INR3.8 crore in 2011-12.
As per provisional results for H1 2013-14, the company's operating
income stands at INR33.6 crore with PAT of INR0.0 crore.
DDR AND COMPANY: ICRA Assigns 'B+' Rating to INR0.5cr Loan
----------------------------------------------------------
ICRA has assigned a long-term rating of '[ICRA]B+' to INR0.50
crore fund based limits of DDR and Company. ICRA has also assigned
a short-term rating of [ICRA] A4 to its INR5.00 crore non-fund
based limits.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash credit 0.50 [ICRA]B+
Bank Guarantee 5.00 [ICRA]A4
The assigned ratings derive comfort from vast experience of the
promoters in the road construction industry, their established
client base consisting primarily of government departments in
Andhra Pradesh and the company's status as a special class
contractor which enables them to bid for large contracts floated
by government departments. The ratings also take comfort from the
financial profile of the firm characterized by favorable capital
structure and coverage indicators.
The assigned ratings are, however, constrained by small scale of
operations of the firm and presence of high sector concentration
risk owing to the firm's sole focus on road construction. The
ratings are also limited by high geographic concentration risk as
the operations of the firm are limited only to Andhra Pradesh and
highly fragmented nature of the industry, attributable to low
entry barriers, that leads to intense competition among various
players.
DDR and Company was established in the year 1997 with its head
office at Tirupati in Andhra Pradesh. The partnership firm is
primarily involved in laying, strengthening, improving and
maintaining roads in various districts in Andhra Pradesh. It is
managed by Mr. Shahul Hameed who has vast experience in Finance
and Business Management. He is assisted by Mr.Srinivasa Reddy, a
Civil Engineer and is supported by a technical team. The promoters
were formerly involved in Auto Finance business.
Recent Results
In FY2013, DDR reported an operating income of INR19.77 crore and
an operating profit of INR1.63 crore as against an operating
income of INR30.05 crore and an operating profit of INR2.27 crore
in FY2012.
DEVANSH INDUSTRIES: ICRA Lowers Rating on INR9cr LT Loan to 'D'
---------------------------------------------------------------
ICRA has revised the long term rating assigned to the INR9.00
crore fund based bank facilities of Devansh Industries from
'[ICRA]B+' to '[ICRA]D'.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Fund 9.00 [ICRA]D Revised from
Based Limit- [ICRA]B+
Cash Credit
The ratings revision takes into account the firm's stressed
liquidity position as reflected in consistent overutilization of
working capital limits by the bank. The ratings also continue to
remain constrained by the firm's limited scale of operations
concentrated to trading of TMT bars. The ratings also continue to
take into account the low profitability owing to trading nature of
the business and strong competition from various unorganized and
organized players. The ratings are further constrained by the
partnership nature of the firm whereby any substantial capital
withdrawals from the capital account can adversely affect the
capital structure.
However, the ratings continue to take comfort from the promoter in
the trading business and healthy revenue growth.
Devansh Industries was established in 2003 as a proprietorship
concern with Mr. Virendra Ganatra as the proprietor, later on in
FY2011 it was re-established as partnership firm with Mr. Virendra
Banatra and Mr. Bharat Ganatra as partners. The firm is engaged in
trading of flat steel products namely TMT bars (thermo-mechanical
treatment), mild steel angel, mild steel bending wire, GI bending
wire etc. The product line remains concentrated with TMT bars
accounting for 90% of the total revenue while the remaining sales
is through others products.
Recent Results
During 2012-13, the firm has reported a profit after tax (PAT) of
INR 0.54 crore on an operating income of INR44.63 crore. As of
November 2013, the firm has achieved revenue of INR30.00 crore and
has order book of INR1.50 crore to be executed by December end
2013.
DUNCANS INDUSTRIES: CARE Reaffirms 'B-' Rating on INR67.2cr Loans
-----------------------------------------------------------------
CARE reaffirms the ratings assigned to the bank facilities of
Duncans Industries Ltd.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 67.2 CARE B- Reaffirmed
Short-term Bank
Facilities 15.0 CARE A4 Reaffirmed
Rating Rationale
The aforesaid ratings continue to remain constrained by Duncans
Industries Ltd being registered as a sick industrial company with
the Board for Industrial and Financial Reconstruction (BIFR) under
The Sick Industrial Companies (Special Provisions) Act, 1985
(SICA). The ratings are further constrained by DIL's negative net-
worth, weak financial risk profile, stretched liquidity position,
highly labour-intensive nature of the tea industry,
underperforming investments in the past and susceptibility to the
vagaries of nature. The ratings continue to factor in the vast
experience of the promoter, satisfactory yield & recovery rate and
stable outlook for the tea industry with favourable price trend.
The ability to turnaround the tea business and timely exit from
BIFR are the key rating sensitivities.
Duncans Industries Limited, belonging to the Kolkata-based Duncan
Goenka group, was formed by merging the tea business of Duncans
Agro Industries Ltd (over 150 years old) with the urea business of
Chand Chhap Fertilizers & Chemicals Ltd.
DIL is currently engaged in tea cultivation and processing. Its 14
tea gardens are spread across the Dooars, Terai and Darjeeling
regions of north Bengal, with an annual processing capacity of
around 170 lakh kg. DIL produces both crush-tear-curl (CTC) and
orthodox varieties of tea. The aggregate area available for
cultivation is 9,000 hectares; of which the area under cultivation
is 7,400 hectares.
The rehabilitation scheme was approved by BIFR in January 2012;
and is currently under implementation. As per the scheme, the
fertilizer division has been demerged with effect from October 1,
2010 and transferred to Kanpur Fertilizer & Cement Ltd (KFCL;
joint venture between the Duncan Goenka group and the Jaypee
group).
The Duncan Goenka group, which has interest in sectors like tea,
paper, chemical and engineering, is spearheaded by Mr GP Goenka
(73 years) duly supported by his son, Mr SV Goenka (38 years).
Mr GP Goenka is an ex-President of FICCI. Other major companies of
the group are Duncans Tea Ltd (rated CARE BB), Star Paper Mills
Ltd, Stone India Ltd, Unimers India Ltd, etc.
Due to higher yield and realisation, DIL earned a PBILDT of
INR2.85 crore in FY13 (18 months period ending September 30, 2013)
vis-a-vis operational loss of INR15.2 crore in FY12. However, the
high interest expenses (on account of high utilisation of bank
limits) resulted in a net loss of INR26.2 crore and cash loss of
INR21.7 crore (cash loss of INR32.6 crore in FY12).
EUROBOND INDUSTRIES: CARE Reaffirms 'B' Rating on INR27.68cr Loan
-----------------------------------------------------------------
CARE reaffirms the rating assigned to the bank facilities of
Eurobond Industries Pvt Ltd.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 27.68 CARE B Reaffirmed
Rating Rationale
The reaffirmation of ratings assigned to the bank facilities of
Eurobond Industries Pvt Ltd reflect the constrains arising out of
the delay in the commissioning of iron ore beneficiation and
pelletisation project and restructuring of its debt obligations
under Corporate Debt Restructuring (CDR). The ratings are also
constrained by the substantial decline in net-worth on account of
losses leading to a highly leveraged capital structure and risks
associated with the raw material price and foreign currency
fluctuations.
However, the rating considers the various subsidies and tax
incentives available to EIPL on account of the location of its
existing manufacturing facility in the state of Jammu and Kashmir.
The ability of the company to commence commercial production of
pellet plant on time and generate adequate cash accruals for debt
servicing obligations are the key rating sensitivities.
Incorporated in August 2004, Eurobond Industries Pvt Ltd is a part
of the Euro group. EIPL manufactures Aluminium Composite Panel
(ACP) sheets, which find application in the real estate
industry (interior and external designs used in high rise
buildings, shopping malls, etc). The ACP manufacturing facility in
Jammu has an installed capacity of 18.90 lakh square mt. per
annum. The ACP sheets are marketed under the brand name
"Eurobond". The company has a network of distributors and
fabricators through which it markets its products for real estate
projects as well as for the retail market. The various subsidies
and tax incentives are available to the company on account of the
location of the ACP plant in the state of Jammu and Kashmir.
In order to diversify its operations,EIPL is implementing an iron
ore beneficiation and Pelletisation project at Hargarh Industrial
Area, village - Hargarh, district Jabalpur, Madhya Pradesh with an
installed capacity of 500,000 TPA.
EIPL reported a loss of INR59.28 crore on the total income of
INR140.46 crore in FY13 (refers to the period April 1 to
March 31) as against a profit after tax of INR5.07 crore on the
total income of INR102.64 crore in FY12.
FRUITFUL BUILDCON: ICRA Cuts Rating on INR65cr Loan to 'B+'
-----------------------------------------------------------
ICRA has revised the long-term rating for the INR 65 crore fund-
based bank facilities of Fruitful Buildcon Private Limited to
'[ICRA]B+' from '[ICRA]BB-' earlier.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-based bank 65 [ICRA]B+; downgraded
facilities: Term
Loan Programme
The rating revision factors in the significant time and cost over-
runs in FBPL's project owing to execution-related delays and
changes in project specifications. As expected by ICRA, delays in
project execution have resulted in the moratorium period on
company's debt getting lapsed making the company completely
reliant on timely funding support from promoters for debt-
servicing besides completion of the project. Further, the rating
continues to be constrained by the continued pressure in the
hospitality industry owing to economic slowdown which coupled with
pressures resulting from fresh room supply in Jaipur will continue
to pose challenge during the property's initial stabilisation
phase. Apart from above, the regulatory risk associated with
FBPL's project continue to remain as the company needs to secure
additional approvals required for commercial launch of operations;
single-property concentration risk resulting in complete
dependence of FBPL on the demand-supply scenario in the Jaipur
hospitality market which is intensely competitive and seasonal in
nature. The rating, however, continues to derive comfort from the
advantageous location of the project, with proximity to key
commercial and upscale areas of the city of Jaipur; and FBPL's
association with the Hilton group, which provides access to their
global reservation systems besides imparting strong brand
recognition.
In light of the moratorium period getting lapsed, timely infusion
of funds by promoters will be critical for project completion as
well as to ensure debt servicing as per the stipulated terms, till
the project becomes cash positive. Further, the company's ability
to minimise the time involved in completing the finishing work and
obtaining approvals required for commercial launch of operations;
and achieve healthy average room revenues (ARRs) and occupancies
post-launch of operations to achieve comfortable debt-coverage
indicators, will be the key rating sensitivities.
Incorporated in March 2001, FBPL is a closely-held company
constructing a 190-room upscale hotel property at Hawa Sadak in
Jaipur. The company has entered into management agreement with
Hilton International Manage LLC (Hilton) and will be using its
full-service upscale brand "Doubletree by Hilton" for the
property. While the project was initially scheduled to commence
operations in April 2012, the same has got delayed and is now
being targeted to be completed by March 2014.
GEETALAKSHMI MODERN: ICRA Ups Ratings on INR10cr Loans to 'B+'
--------------------------------------------------------------
ICRA has upgraded the long term rating assigned to INR10.00 crore
fund based bank limits of Geetalakshmi Modern Rice Mill Private
Limited from 'ICRA B' to 'ICRA B+'.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 7.00 [ICRA] B+ Upgraded
Term Loan 1.70 [ICRA] B+ Upgraded
Unallocated 1.30 [ICRA] B+ Upgraded
The assigned rating positively factors in the strong growth in
revenues of the company in the last financial year owing to
increase in capacity utilization, and improvement in its
capitalization structure and coverage indicators. The rating
continues to derive support from the long-standing experience of
the promoter in rice milling industry and the favorable outlook
for rice milling industry in Chhattisgarh owing to shortage of
milling capacities. Its presence in Chhattisgarh, which is also
known as the Rice Bowl of India reduces the risk of operations
being affected for want of Paddy.
The assigned rating, however, continues to be constrained by the
small scale of operations of the company, its limited track record
of operations and its moderate capacity utilization (given the
company is in the initial years of its operations). It is also
constrained by susceptibility of the rice industry to agro-
climactic conditions and the highly competitive nature of the
industry.
The ability of the company to increase its scale of operations
while maintaining its profitability and its ability to improve its
capitalization structure will be the key rating sensitivities
going forward.
Geetalakshmi Modern Rice Mill Private Limited was incorporated in
2007 by Mr. K Subbi Reddy. The company is engaged in the milling
of paddy and produces raw and boiled rice. The rice mill is in
Sonpur which is about 45 Kilometers from Raipur, the capital of
Chhattisgarh. Its installed production capacity is 67,500 metric
tons per annum.
Recent Results:
In FY2013, the company reported an operating income of INR18.31
crore and an operating profit of INR 2.71 crore as against an
operating income of INR12.51 crore and an operating profit of INR
2.15 crore in FY2012.
GURUDEVA CHARITABLE: CRISIL Puts 'D' Ratings on INR270MM Loans
--------------------------------------------------------------
CRISIL has assigned its 'CRISIL D' rating to the long-term bank
facilities of Gurudeva Charitable Trust (GCT).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Term Loan 50.7 CRISIL D
Long Term Loan 159.3 CRISIL D
Proposed Overdraft
Facility 60.0 CRISIL D
The rating reflects instances of delay by GCT in servicing its
debt; the delays have been caused by GCT's weak liquidity as a
result of its ongoing capital expenditure (capex) and cash flow
mismatches.
GCT also has a below-average financial risk profile, marked by
high gearing and weak debt-protection metrics, and is susceptible
to adverse regulatory changes and intense competition in the
educational sector. The trust, however, benefits from the healthy
demand prospects for education offerings in India.
About the Company
GCT, located in Ernakulam (Kerala), was set up in 2003, and
operates a medical college and hospital called Sree Narayana
Institute of Medical Sciences. The college offers a five-year
undergraduate course in medicine. The day-to-day operations of the
trust are managed by its executive director, Colonel Ramesh.
In 2012-13 (refers to financial year, April 1 to March 31), GCT
reported, on a provisional basis, a deficit (excess of expenditure
over income) of INR92 million on income of INR230 million, as
against a deficit of INR128 million on income of INR168 million in
2011-12.
J J DEVELOPER: CRISIL Rates INR60MM Term Loan at 'B'
----------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable' rating to the bank
facilities of J J Developer.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Term Loan 60 CRISIL B/Stable
The rating reflects JJD's exposure to risks related to
implementation and saleability regarding its ongoing project and
its susceptibility to inherent risks and cyclicality in the real
estate sector in India. These rating weaknesses are partially
offset by the extensive experience of JJD's promoters in the real
estate sector.
Outlook: Stable
CRISIL believes that JJD will maintain its business risk profile
over the medium term, supported by its promoters' extensive
experience in the real estate sector. The outlook may be revised
to 'Positive' if timely implementation and high sales of JJD's
ongoing project lead to healthy cash accruals on a sustained
basis. Conversely, the outlook may be revised to 'Negative' if the
firm faces time or cost overrun in its ongoing project, or
significant pressure on its liquidity, or delays in receiving
customer advances, leading to pressure on its revenue and
profitability, thereby weakening its debt servicing ability.
About the Firm
Formed in 2013, JJD is a partnership firm and is promoted by the
Uttamchandani family. The firm is developing Empire Residency, a
project that involves both residential and commercial units.
JANKI NEWSPRINT: ICRA Reaffirms 'D' Ratings on INR25cr Loans
------------------------------------------------------------
ICRA has reaffirmed the long term rating of '[ICRA]D' and a short
term rating of '[ICRA]D' assigned to the INR25.0 Crore bank
facilities of Janki Newsprint Ltd.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-Based limits-
Long Term scale 14.0 [ICRA]D reaffirmed
Term Loan-Long
Term scale 9.75 [ICRA]D reaffirmed
Non-Fund based
Limits-Short term
Scale 1.25 [ICRA]D reaffirmed
The reaffirmation of ratings factor in the liquidity pressures in
the business as evidenced by the continuing delays in the debt
servicing. The ratings are also constrained by highly fragmented
and competitive industry structure; industry-wide challenges
including increasing input costs, raw material shortages, stricter
regulations and capacity additions in the domestic industry;
inability to pass on increase in input costs to customers
rendering the profitability vulnerable and weak financial risk
profile characterised by high gearing levels, modest coverage
indicators and high working capital intensity.
Nevertheless, while reaffirming the ratings, ICRA takes note of
the long track record and experience of the promoters' in the
paper business; diversified product profile comprising of
newsprint and kraft paper and favourable demand prospects for
paper industry in the domestic market.
Janki Newsprint Limited (earlier known as Sumit Agro Products
Limited) was incorporated in 2000 as Private limited company. The
company was later on changed to a Limited company in March 2003
and its name was changed to Janki Newsprint Limited in March 2010.
The company has Kraft paper manufacturing capacity of 24750 MTPA
and newsprint manufacturing capacity of 16500 MTPA at its
manufacturing facility located at Meerut in the state of Uttar
Pradesh. The Company has cogeneration plant of 3 MW for its
captive use.
Recent Results
JNL reported a turnover of INR46.96 Crore and a net profit of
INR1.42 Crore during financial year 2012-13. The company had
reported a turnover of INR43.56 Crore and a net loss of INR4.61
Crore during financial year 2011-12.
KARTHIK INDUCTIONS: CARE Revises Rating on INR2.5cr Loan to 'B'
---------------------------------------------------------------
CARE revises/reaffirms rating assigned to the bank facilities of
Karthik Inductions Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 2.50 CARE B Revised from
Facilities CARE B-
Short-term Bank
Facilities 12.75 CARE A4 Reaffirmed
Rating Rationale
The revision in the long-term rating factors in the growth in the
scale of operations during FY13 (refers to the period April 1 to
March 31) along with marginal improvement in the solvency
indicators of Karthik Inductions Limited. The ratings continue to
be constrained by the susceptibility of margins of KIL to
volatility in the raw material prices, stretched liquidity
position and customer concentration risk with a majority of
sales to the group companies. The ratings continue to factor in
the experience of the promoters and KIL's established track record
in the iron and steel segment.
The ability of the company to increase the scale of operations,
effectively manage its working capital and liquidity and
improvement in the capital structure remain the key rating
sensitivities.
Karthik Inductions Limited was incorporated in the year 1994 by Mr
B Raghvendra. The company was established in order to support
group operations by way of backward integration through
manufacturing of mild steel ingots and by products viz runners and
risers. The company procures (sponge iron, pig iron and MS scarp)
required raw material from the domestic market and has a
manufacturing plant (leased) in Kundaim, Goa. The company has an
installed capacity of 37,200 MTPA (metric ton per annum) with
average utilization of around 64% from the last three years ending
FY13. KIL supplies approximately 90% of its production to the
group company Rukminirma Steel Rollings Private Limited which is
engaged in the manufacturing of TMT bars, structured steel and
steel rolled bars.
In FY13 KIL reported a PAT of INR0.36 crore against a turnover of
INR73 crore in as against a PAT of INR0.39 crore against a
turnover of INR72.69 crore in FY12.
MADHUCON AGRA: ICRA Cuts Rating on INR230cr Term Loans to 'D'
-------------------------------------------------------------
ICRA has revised the long-term rating assigned to INR 230.00 crore
fund based facilities of Madhucon Agra Jaipur Expressways Limited
to '[ICRA]D' from '[ICRA]BB'.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term loans 230.00 [ICRA]D Downgraded
The revision in rating takes into account the recent delays in
servicing its term loan obligations. The delayed receipt of
operations grant from NHAI by more than four quarters (Rs. 13.67
crore receivable as on Mar 31, 2013) which coupled with ongoing
major maintenance works on the project stretch has resulted in
stretched liquidity. The inability of the promoter-Madhucon
Projects Limited to support timely debt servicing given its own
deteriorated financial risk profile has resulted in delays in debt
servicing. The rating is further constrained by increased leverage
of the project post refinancing of debt, which has led to increase
in project's interest expenses as well as the company's exposure
to interest rate risk, given that the interest on the loans would
be reset every year. The project is also exposed to the inherent
risks in Build-Operate-Transfer (BOT) toll road projects,
including political acceptability of rate hikes linked to WPI year
after year over the concession period and likelihood of toll
leakages. Nevertheless, some comfort can be drawn from the fact
that the SPV had been able to revise the toll rates over the four
years successfully. ICRA notes that due to its high dependence on
commercial traffic, the toll revenues on this project stretch is
highly co-related with general economic conditions. Although no
signs of slowdown in traffic volumes have been witnessed during
(8M) FY 14, the current economic slowdown could have an adverse
impact on the traffic volumes going forward. Nevertheless, ICRA
notes that the project stretch remains an important route
providing connectivity between NH-8 and NH-2, which are part of
the Golden Quadrilateral road network.
Going forward, MAJEL's ability to service its debt obligations in
a timely manner will be the key rating sensitivity.
MAJEL is a special purpose vehicle (SPV) promoted by Madhucon
Projects Limited (MPL along with associates) and SREI
Infrastructure Finance Limited. MAJEL has been formed to
strengthen and widen the existing 57 km stretch between Bhartapur
and Mahwa (both in Rajasthan) on NH-11. The project has been
awarded by National Highway Authority of India (NHAI) on a Build-
Operate-Toll (BOT) basis, and has a concession period of 25 years
starting October 31, 2005. The scheduled commercial operation date
(COD) of the project was October 2008, but tolling commenced in
May 2009. The project highway along with the other sections of NH-
11 provides connectivity between NH-8 (connecting Mumbai-Delhi)
and NH-2 (connecting Kolkata-Delhi), which are a part of Golden
Quadrilateral.
Recent Results
The company has reported 15% growth in toll collections to
INR45.32 crore during FY 13. The operating income stood at
INR53.55 crore including the operations grant of INR8.23. The
company reported a net loss of INR4.19 crore during this period
when compared to a net loss of INR36.93 crore in FY 12.
MAHER COTTON: CRISIL Reaffirms 'B-' Rating on INR75MM Loan
----------------------------------------------------------
CRISIL's rating on the long-term bank facilities of Maher Cotton
Industries continues to reflect MCI's weak financial risk profile
marked by high gearing and weak debt protection metrics, and its
small scale of operations in the intensely competitive textile
industry. These rating weaknesses are partially offset by MCI's
promoters' extensive experience in the textile industry and its
location advantage because of its proximity to raw material
sources.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 75 CRISIL B-/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that MCI will continue to benefit over the medium
term from its promoters' extensive experience in the textiles
industry. The outlook may be revised to 'Positive' if the firm
significantly improves its net cash accruals and capital
structure. Conversely, the outlook may be revised to 'Negative' if
MCI reports significant deterioration in its working capital
management, or undertakes any large, debt-funded capital
expenditure programme.
Update
MCI's net sales were below CRISIL's expectations at INR317.1
million in 2012-13 (refers to financial year, April 1 to March 31)
compared with INR400.6 million in 2011-12. The operating margin
declined significantly to 0.7 per cent in 2012-13, from 2.9 per
cent in 2011-12, on account of increase in raw material prices.
MCI's working capital requirements remain moderate, reflected in
gross current assets of 100 days as on March 31, 2013, which
primarily represents inventory. The company's business is seasonal
in nature and its bank limit utilisation has been high at over 90
per cent in the peak season. MCI's financial risk profile remains
weak on account of high gearing of 4.6 times as on March 31, 2013,
and weak debt protection metrics with net cash accruals to total
debt and interest coverage ratios at -0.02 times and 1.5 times,
respectively, in 2012-13. CRISIL believes that MCI's financial
risk profile will remain weak over the medium term.
MCI reported a book profit of INR0.2 million on net sales of
INR317.1 million in 2012-13 as against a book profit of INR0.2
million on net sales of INR400.6 million in 2011-12.
About the Firm
MCI was set up in March 2009 by Mr. Hasanali Momin, Mr. Zahirabbas
Momin, Mr. Nijamuddin Bhurawal, and Mr. Ibhrahim Kadiwal. It is
engaged in cotton ginning. MCI is based in Ahmedabad (Gujarat).
MALWA PROJECTS: ICRA Assigns 'B' Rating to INR15cr LT Loans
-----------------------------------------------------------
ICRA has assigned the long term rating of '[ICRA]B' to INR15.00
crore fund based bank facilities of Malwa Projects Private
Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term: Fund 15.00 [ICRA]B/ assigned
Based Limits
The assigned rating is constrained by the high market and project
execution risk of the residential project being developed by the
company which is on account of current levels of low booking and
initial stage of construction. The project was launched in second
half of FY 2012-13 and despite the favorable location of the
project in Zirakpur (Punjab) which is an upcoming residential area
on the outskirts of Chandigarh, the level of booking remains low
at 36% of the residential apartments launched and 18% of the total
apartments in the project as on November 30, 2013; most of these
bookings have been after March 2013. The low bookings can be
attributed partially to moderation in demand and partially to lack
of prior track record of the promoters in the real estate
business. Moreover, the construction is in the initial stage with
only 6% of the total estimated construction cost incurred till
November 30, 2013 which also increases the project execution risk;
however given the receipt of most of the requisite regulatory
approvals; regulatory risk are reduced to an extent. The assigned
rating is also constrained by the high project concentration due
to dependence on a single project for the entire cash flows.
As the project is proposed to be funded primarily through customer
advances, improvement in the pace of incremental booking & level
of customer advances received and the ability to timely fund the
shortfall by promoters, if any, would be crucial for avoiding cash
flow mismatches and maintain adequate liquidity as the debt
repayment will commence before the scheduled date of project
completion, and hence would be the key rating sensitivities.
MPPL was incorporated in December 2002 and is developing a
residential project near Chandigarh in Zirakpur (Punjab) under the
name Escon Arena which comprises of 352 multi-storey apartments (8
towers each having G+11 floors) with a total built up area of 6.57
lac sq. ft. The project is being developed on an area of 7 acres
and the company has presently launched 4 residential towers which
comprises of 176 apartments. MPPL had undertaken some construction
activities during the initial 3~4 years of incorporation; however
subsequently they were stopped and in FY 2012-13 the residential
project was launched in the company.
MJR BUILDERS: CRISIL Reaffirms 'B+' Rating on INR450MM Loan
-----------------------------------------------------------
CRISIL has reaffirmed its 'CRISIL B+/Stable' rating to the long-
term bank facility of MJR Builders Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 450 CRISIL B+/Stable (Reaffirmed)
The rating continues to reflect MJRBPL's exposure to
implementation-related risks associated with its ongoing real
estate projects and susceptibility of its revenues and earnings to
cyclicality inherent in real estate industry. These rating
strengths are partially offset by the extensive experience of
MJRBPL's promoters in the real estate industry.
Outlook: Stable
CRISIL believes that MJRBPL will maintain its business risk
profile over the medium term, supported by its promoters-
established track record in the real estate sector. The outlook
may be revised to 'Positive' if MJRBPL generates more-than-
expected cash flows from operations, driven most likely by
accelerated execution of its projects and increased customer
advances. Conversely, the outlook may be revised to 'Negative' if
the company's financial risk profile deteriorates, caused most
likely by substantially less-than-expected cash flows from
operations because of subdued response to the project or less-
than-expected customer advances.
MJRBPL was established in February 2011 by Mr. S Jayram Reddy and
Mr. Madhusudhan Talamarla. Mr. S Jayram Reddy has been in the
business of infrastructure real estate development for close to
three decades through his family-run SJR group. The SJR group has
built around 5 million square feet of saleable commercial,
residential and retail real estate properties. MJRBPL is currently
developing two projects in Bengaluru, a residential-cum-commercial
property, MJR Platina, and a fully residential property, MJR
Pearl.
N.A. SHELAR: CRISIL Cuts Ratings on INR50MM Loans to 'D'
--------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facilities
of N.A. Shelar & Company to 'CRISIL D' from 'CRISIL B-/Stable'.
The rating downgrade reflects delays by NAS in servicing its term
debt; the delays were driven by the company's weak liquidity due
to delays in realisations from its customers.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Overdraft Facility 40 CRISIL D (Downgraded from
'CRISIL B-/Stable')
Proposed Long Term 10 CRISIL D (Downgraded from
Bank Loan Facility 'CRISIL B-/Stable')
NAS also has a modest scale of operations in the highly fragmented
civil construction industry, a weak financial risk profile, marked
by a modest net worth and subdued debt protection metrics, and
working-capital-intensive operations. However, the firm benefits
from the extensive experience of its promoter in the civil
construction industry.
Established in 1983, as a proprietorship concern of Mr. Narayan
Shelar, NAS is a civil contractor primarily engaged in
construction of buildings (residential and commercial) in the
Mumbai region of Maharashtra.
NAS reported a profit after tax (PAT) of INR12 million on net
Sales of INR172.7 million for 2012-13 (refers to financial year,
April 1 to March 31), as against a net loss of INR16.7 million on
net sales of INR145.1 million for 2011-12.
NIKKI STEELS: CRISIL Lowers Rating on INR100MM Loan to 'B'
----------------------------------------------------------
CRISIL has downgraded its ratings on the bank facilities of Nikki
Steels Pvt Ltd to 'CRISIL B/Stable' from 'CRISIL BB-/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 100 CRISIL B/Stable (Downgraded
from 'CRISIL BB-/Stable')
The downgrade in ratings reflects NSPL's weak working capital
management as well as deterioration in financial risk profile
marked by aggressive capital structure due to high reliance on
external sources to fund the operations, weak interest coverage
ratio, and strained liquidity. CRISIL believes that NSPL's
liquidity will remain weak over the medium term owing to its
working-capital-intensive operations.
The rating continues to reflect NSPL's small scale of operations
in the intensely competitive steel trading industry, leading to
low profitability, and weak financial risk profile due to large
working capital requirements. These rating weaknesses are
partially offset by the extensive experience of its promoters in
the steel trading industry.
Outlook: Stable
CRISIL believes that NSPL will continue to benefit over the medium
term from its promoters' extensive experience in the steel
industry. The outlook may be revised to 'Positive' if the company
registers more-than-expected growth in its revenues and
profitability, leading to improvement in its financial risk
profile. Conversely, the outlook may be revised to 'Negative' if
NSPL's financial risk profile weakens because of stretch in its
working capital cycle or if the company registers lower-than-
expected profitability margins.
NSPL, set up in 2006, is promoted by Mr. Neeraj Gupta, Mr. Sharad
Gupta, and Mr. Dilip Gupta. The Ghaziabad (UP)-based company
trades in iron and steel products.
NSPL reported a profit after tax (PAT) of INR1.5 million on net
sales of INR980 million for 2012-13 (refers to financial year,
April 1 to March 31), against a PAT of INR1.2 million on net sales
of INR444 million for 2011-12.
OBEROI CARS: ICRA Reaffirms 'B' Ratings on INR28cr Loans
--------------------------------------------------------
ICRA has reaffirmed the long-term rating of '[ICRA]B' to the
INR14.0 crore cash credit and INR14.0 crore inventory funding
facilities of Oberoi Cars Private Ltd.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 14.0 [ICRA]B Reaffirmed
Inventory Funding 14.0 [ICRA]B Reaffirmed
The rating reaffirmation takes into consideration the OCPL's
geographical advantage on account of being the sole authorized TML
car dealer in the Noida region of Uttar Pradesh. The rating also
favorably factors in the company's healthy revenue growth over the
last three years. The rating is, however, constrained by a weak
credit profile, with a gearing of 11.7 times (as on March 31,
2013) and weak debt protection metrics. Further, the company's
liquidity position is also stretched on account of high working
capital intensity. Also, the exposure to cyclicality of domestic
passenger vehicle industry that is witnessing weaker demand
coupled with the falling market share of TML cars constrains the
revenue growth of the company. Going forward, the company's
ability to increase the scale of operations and improve its credit
profile would be the key rating sensitivities.
OCPL (incorporated in 2009) was established as an authorised
dealer for passenger vehicles of Tata Motors Limited and Fiat
India Automobiles Limited in Noida (Uttar Pradesh). Post the split
of TML and Fiat, the Fiat dealership was transferred to a new
company called Oberoi Moto Tech w.e.f. May, 2013. Since then, OCPL
has been operating as the dealer for TML cars only. Currently, it
has two 3S facilities in Noida.
PCI PAPERS: ICRA Reaffirms 'D' Ratings on INR13.77cr Loans
----------------------------------------------------------
ICRA has reaffirmed the '[ICRA]D' rating to INR1.27 crore
(enhanced from INR1.00 crore) term loan facility and INR7.70 crore
(reduced from INR8.60 crore) cash credit facility of PCI Papers
Limited. ICRA has also reaffirmed the '[ICRA]D' rating to INR2.00
crore short term fund based facility and INR2.80 crore (reduced
from INR3.50 crore) short term non fund based facility of PCI.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term, Fund 1.27 [ICRA]D reaffirmed
based limits-
Term Loan
Long Term, Fund 7.70 [ICRA]D reaffirmed
based limits-
Cash Credit
Short Term, Fund 2.00 [ICRA]D reaffirmed
based limits
Short Term, Non 2.80 [ICRA]D reaffirmed
fund based limits
The ratings reaffirmations take into account irregularities in
debt servicing by the company on account of tight liquidity
condition with high working capital intensity. PCI has leveraged
capital structure and weak coverage indicators owing to high
working capital intensity with high inventory and debtor days.
PCI's liquidity profile is also stretched on account of losses in
first half of FY14 due to increase in raw material prices and
company's inability to pass on the same to its customers. As per
the information available with ICRA, the account of the company
has been classified as a non-performing asset by the bank. ICRA
has taken note of long standing experience of promoters in
packaging industry and company's established relationship with its
clients.
Incorporated in 1984, PCI is listed on Calcutta Stock Exchange.
The company has two manufacturing facilities - one each at Kolkata
and Nasik. The Nasik Facility was set up in 1996 with equity
contribution from IDBI. PCI manufactures polycoated, Silicon
Release paper, label stocks (film, foil and paper etc.) which are
used in the Healthcare, Automobiles, Tea, Rubber, Security Press,
Packaging and other industries.
RADHALAXMI SPINTEX: CARE Assigns 'B' Rating to INR36.3cr Loans
--------------------------------------------------------------
CARE assigns 'CARE B' and 'CARE A4' ratings to the bank facilities
of Radhalaxmi Spintex Pvt Ltd.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 36.30 CARE B Assigned
Short term Bank
Facilities 1.70 CARE A4 Assigned
Rating Rationale
The ratings assigned to the bank facilities of Radhalaxmi Spintex
Pvt Ltd are primarily constrained on account of the implementation
and stabilization risk associated with the ongoing capex.
Furthermore, the ratings are also constrained by its presence in
the highly fragmented cotton yarn industry and susceptibility of
profitability to raw material price fluctuations.
The ratings, however, derive strength from the experience of the
promoters in cotton ginning activity; albeit RSPL being their
first venture in spinning activity, assured raw material
procurement arrangement with its associate concern and government
incentives to the textile industry.
The ability of RSPL to complete the capex in time without any
major cost overrun and achieve the envisaged scale of operations
will be the key rating sensitivities.
RSPL is a private limited company incorporated on March 11, 2013,
and belongs to the Kakasaniya & Kotadiya group. The group is
engaged in cotton ginning & pressing and crushing with the
product mix of cotton bales, cottonseed wash oil and oil cakes
through Shree Ramkrushna Ginning and Oil Industries (SRGOI),
ceramics tiles manufacturing through Fea Ceramic and manufacturing
of acid proof bricks for kiln machinery through Arya Refractories.
RSPL proposes to set-up a spinning mill with 17,280 spindles for
manufacturing approximately 3,353 metric tonnes (MT) of different
counts cotton yarn per annum at Lakhdhirgadh village, Tankara,
Morbi.
REAL AGRO: ICRA Assigns 'B+' Rating to INR11.47cr Loans
-------------------------------------------------------
ICRA has assigned an '[ICRA]B+' rating to INR11.47 crore long term
fund based and a short term rating of '[ICRA]A4' to the INR2.03
crore non fund based bank facilities of Real Agro Industries
Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Funds Based
Facilities 11.47 [ICRA]B+(assigned)
Non fund based
Facility 0.50 [ICRA]A4 (assigned)
Unallocated 1.53 [ICRA]A4 (assigned)
The ratings favourably factor in the experience of the promoters
in the biscuit manufacturing industry, the association of the
promoters with reputed players in the industry through other group
companies, the long term agreement of RAIPL with Britannia
Industries Limited with a commitment on the volumes that ensures
revenue visibility for RAIPL and the recent stabilisation of
operations. The ratings are however constrained as the company has
a high dependence on BIL for off-take which restricts its
bargaining power. Further, since the conversion charges factor in
fixed costs at 95% capacity utilization, maintaining capacity
utilization is critical to profitability. Owing to high overheads
and low capacity utilization in FY13, it being the first year of
operations, RAIPL incurred net losses. RAIPL also has weak capital
structure characterized by high gearing of 3.68 times as on March
31st 2013 resulting in weak coverage indicators. Cash accruals
from operations in FY13 were insufficient to service the debt
obligations which had been supported by unsecured loans from the
promoters. With improved capacity utilisation levels, RAIPL is
expected to generate sufficient cash accruals to meet its debt
servicing obligations and this will remain a key rating
sensitivity.
Real Agro Industries Private Limited was incorporated in October
2009 and has a biscuit manufacturing unit with current installed
capacity of ~29000 tons per annum, operational since March 2012,
at Medchal in Hyderabad. RAIPL currently undertakes contract
manufacturing exclusively for Britannia Industries Limited since
the commencement of its operations. It produces 'Good Day', '50-
50' and 'Time pass Chaska Salty' (TPCS) variety of biscuits for
BIL.
Recent Results
As per the provisional results in FY13 the company recorded
revenues of INR15.61 crore and negative PAT of INR0.21 crore.
RICHI RICH: CARE Reaffirms 'B+' Rating on INR13.4cr LT Loans
------------------------------------------------------------
CARE reaffirms the ratings assigned to the bank facilities of
Richi Rich Agro Foods Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 13.40 CARE B+ Reaffirmed
Short-term Bank
Facilities 29.00 CARE A4 Reaffirmed
Rating Rationale
The ratings continue to remain constrained by the weak financial
risk profile of Richi Rich Agro Foods Private Limited with low
profitability margins and high working capital intensity of
operations resulting in high overall gearing. The ratings also
take into account the inherent risks in an agricultural commodity
business, foreign exchange fluctuation risks and vulnerability of
the international trade to changes in the government policies.
The constraints are partially offset due to the established track
record, experienced management and stable growth prospects of the
rice industry.
Going forward, the ability of RFPL to manage the working-capital
requirements efficiently and profitably scale up the operations
shall be the key rating sensitivities.
RFPL was incorporated in 1997 as a partnership firm under the name
M/s Aggarwal Agro Industries and later converted into a private
limited company on May 25, 2009. RFPL is engaged in the milling,
processing and selling of basmati rice of various types in the
export and domestic markets. The company has a rice mill located
at Barara, district Ambala (Haryana) with the milling and sorting
capacity of 70,000 tons per annum (TPA) as on March 31, 2013. The
company sells its products in the domestic and export market under
three brand names, ie, Richi Rich, Shalimar and Merigold, however,
the branded sales are very minimal.
During FY13 (refers to the period April 1 to March 31), RFPL
earned a PAT of INR0.60 crore on a total operating income of
INR136.91 crore.
S.S. INDUSTRIES: CARE Assigns 'B+' Rating to INR8.66cr Loans
------------------------------------------------------------
CARE assigns 'CARE B+' rating to the bank facilities of S.S.
Industries.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 8.66 CARE B+ Assigned
The rating assigned by CARE is based on the capital deployed by
the proprietor and the financial strength of the firm at present.
The rating may undergo any change in case of the withdrawal of the
capital or the unsecured loan brought in by the proprietor in
addition to the financial performance and other relevant factors.
Rating Rationale
The rating assigned to the bank facilities of S.S. Industries is
constrained by its presence in a highly fragmented cotton ginning
segment leading to intense competition along with short track
record of the entity, susceptibility to the seasonality associated
with the raw material availability along with volatility in the
raw material prices. The rating is further constrained by the
execution risk associated with the ongoing project of setting up
an oil mill unit, financial risk profile marked by the modest
scale of operations and weak capital structure, proprietorship
constitution.
The rating, however, derives strength from the experienced
proprietor in the cotton ginning segment and location advantage
being located in the highest cotton producing region of
Maharashtra.
Ability of the firm to increase its scale of operation along with
the overall improvement in the financial risk profile would be the
key rating sensitivity.
S.S. Industries was established in the year 2012 as a
proprietorship firm by Mr Shantilal Kochar. Located at Wardha,
Maharashtra SSIN is engaged in cotton ginning and pressing with an
installed capacity of manufacturing 1.84 lakhs bales (1 bale = 170
kg) per annum. The firm procures its raw material from the local
farmers and sells its final product i e cotton bales to the
customers located in and around Wardha.
Currently the firm is undertaking a project of setting up an oil
mill in the vicinity of its existing unit. The total cost of the
project is estimated to INR2.55 crore and it is expected to be
completed by the end of February 2014.
In FY13 (refers to the period April 1 to March 31), the firm was
operational for four months and registered a Profit after Tax
(PAT) of INR 0.25 crore as against the total operating income of
INR39.50 crore.
SADVI POWER: CRISIL Cuts Ratings on INR70MM Loans to 'D'
--------------------------------------------------------
CRISIL has downgraded its rating on the bank facilities of Sadvi
Power & Infratech Pvt Ltd to 'CRISIL D' from 'CRISIL B/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 50.0 CRISIL D (Downgraded from
'CRISIL B/Stable')
Proposed Long-Term
Bank Loan Facility 20.0 CRISIL D (Downgraded from
'CRISIL B/Stable')
The rating downgrade reflects SDPITL's overdrawn cash credit
facility for more than 30 days owing to the company's weak
liquidity.
SDPITL also has a weak financial risk profile marked by small net-
worth, high gearing and weak debt protection metrics, and has
large working capital requirements. However, the company benefits
from its promoters' extensive industry experience.
Set up in 2008 as a private limited company, Sri Rudra Avenues Pvt
Ltd, its name was changed to SDITPL in October 2009. The company
undertakes construction of residential complexes, power projects
and other civil works. It is based in Andhra Pradesh. Mr. Vinod
Reddy is the managing director of the company.
SALASARHANUMANJI GRAINS: CARE Rates INR23.5cr Loans at 'B+'
-----------------------------------------------------------
CARE assigns 'CARE B+' and 'CARE A4' ratings to the bank
facilities of Salasarhanumanji Grains Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 23.50 CARE B+ Assigned
Short-term Bank
Facilities 1.25 CARE A4 Assigned
Rating Rationale
The ratings assigned to the bank facilities of Salasarhanumanji
Grains Private Limited are primarily constrained by implementation
and stabilization risk associated with its green-field project,
susceptibility of margins to raw material prices and highly
fragmented nature of the industry coupled with low entry barriers.
The ratings however draw strength from the promoter's long
experience in the agro processing industry.
Going forward, the ability of the company to successfully
implement its ongoing project within the envisaged cost and time
would be the key rating sensitivity.
Salasarhanumanji Grains Private Limited was incorporated in
February 2013 and is promoted by Mr Surendra Kumar Agrawal and Mr
Sneh Jain. The company is setting up a wheat processing unit in
Varanasi, Uttar Pradesh with capacity of 1,06,500 metric tonnes
per annum (MTPA). The main raw material is wheat and the same
shall be procured from farmers and local grain market. The
processed products of the company would be maida, wheat flour,
suji and other by-products which find their use as cattle feeds.
The total cost of the project is INR28.35 crore which is to be
funded in the debt/equity mix of 1.12:1, and the unit is expected
to be commissioned by September 2014.
SAS AUTOCOM: CRISIL Reaffirms 'D' Ratings on INR350MM Loans
-----------------------------------------------------------
CRISIL's rating on the bank facilities of SAS Autocom Engineers
India Pvt Ltd continues to reflect instances of delay by SASAPL in
servicing its term debt; the delays have been caused by the
company's weak liquidity due to its working-capital-intensive
operations.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Long-Term Loan 61.5 CRISIL D
Letter of Credit 100.0 CRISIL D
Cash Credit 118.5 CRISIL D
Bank Guarantee 50.0 CRISIL D
Bill Discounting 20.0 CRISIL D
SASAPL also has a weak financial risk profile, marked by its high
gearing and weak debt protection metrics, and the susceptibility
of its operating margin to volatility in raw material prices.
However, the company benefits from the promoters' extensive
experience in the auto-ancillary segment, and their established
relations with key customers.
Update
SASAPL recorded total revenues of INR369.8 million during 2012-13
(refers to financial year, April 1 to March 31) vis-…-vis INR557.1
million in 2010-11. The company largely caters to the automobile
sector, which was adversely affected by the economic slowdown;
hence, SASAPL's revenues declined over the past two years through
2012-13. The company's revenues were estimated at around INR146
million for the half year ended September 30, 2013. Its operations
remain working-capital-intensive marked by high gross current
assets (GCAs) of 306 days as on March 31, 2013, because of large
inventory and stretched receivables. Consequently, SASAPL fully
utilised its bank lines over the 12 months through November 2013,
and there were instances of the limits being overdrawn. SASAPL's
liquidity could remain weak over the medium term; with cash
accruals likely to be insufficient vis-…-vis the maturing term
debt obligations.
Established in 1986, SASAPL manufactures pipes and pipe-related
products for the automobile, farm and construction equipment
industries. The company has manufacturing units in Tamil Nadu.
Some of SASAPL's reputed customers include Ashok Leyland Ltd,
Tractors and Farm Equipment Ltd (CRISIL AA+/FAAA/Stable/CRISIL
A1+), Same Deutz Fahr India Pvt Ltd and Volvo India Pvt Ltd. The
promoter, Mr. Sankaran Nambiar and his son, Mr. Shyam Raj, manage
the company's daily operations.
SASAPL reported a profit after tax (PAT) of INR3.1 million on net
sales of INR369.8 million for 2012-13 (refers to financial year,
April 1 to March 31), vis-…-vis a PAT of INR11.4 million on net
sales of INR477.1 million for 2011-12.
SINEWAVE BIOMASS: ICRA Suspends 'D' Rating on INR38cr Term Loans
----------------------------------------------------------------
ICRA has suspended the '[ICRA]D' rating assigned to the INR38.00
crore term loans of Sinewave Biomass Power (P) Limited. The
suspension follows ICRA's inability to carry out a rating
surveillance in the absence of the requisite information from the
company.
SONALE FABRICS: ICRA Suspends 'B-' Rating on INR11.33cr Loans
-------------------------------------------------------------
ICRA has suspended the '[ICRA]B-' rating outstanding on the
INR5.33 crore long term loans and INR6.00 crore long-term, fund-
based working capital facilities of Sonale Fabrics Private
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.
SREE GURUDEVA: ICRA Reaffirms 'B' Ratings on INR16cr Loans
----------------------------------------------------------
ICRA has reaffirmed long-term rating assigned to the INR11.81
crore term loan facilities, INR2.50 crore long-term fund based
facilities, and INR1.69 crore proposed long-term limits of Sree
Gurudeva Charitable and Educational Trust at '[ICRA]B'.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term loan facilities 11.81 [ICRA]B Reaffirmed
Long term facilities 2.50 [ICRA]B Reaffirmed
Proposed Limits 1.69 [ICRA]B Reaffirmed
The rating reaffirmation factors in relatively high enrolment
levels (~90%) in the nascent stage of operations. and the proposed
increase in number of seats, which is likely to increase fees
receipts. Enrolments for the increase in number of seats are
likely to be sustained due to ongoing investments in classroom and
lab infrastructure. The ratings are, however, constrained by high
gearing level due to debt funded initial infrastructure
investment. The high debt-funded infrastructure (with last part of
the proposed initial investment currently being undertaken) has
kept the gearing stretched and continues to keep the coverage
indictors weak. Going forward, ability of the trust to sustain the
enrolment levels will be for improving the operating accruals and
for strengthening the coverage indicators.
Sree Gurudeva Charitable and Educational Trust established in the
year 2008 by Mr. Thushar Vellappally and seven other trustees have
its registered office in Kayamkulam, Kerala. The Trust manages
"Sri Vellappally Natesan College of Engineering" established in
the year 2009. SVNCE offers undergraduate courses in five
specializations namely Mechanical Engineering, Electronics &
Communication Engineering, Civil Engineering, Computer Science,
and Electrical and Electronics Engineering with sanctioned
strength of 60 students each. Going forward, the College plans to
increase the number of seats in Mechanical Engineering and Civil
Engineering courses to 120 each and plans to add undergraduate
course in Architecture and Post Graduate courses. SVNCE has 76
faculty members.
Trust Result
The Trust had reported net profit of INR0.5 crore on an operating
income of INR9.2 crore during 2012-13.
STAR PAPER: CARE Assigns 'B+' Rating to INR19cr LT Bank Loan
------------------------------------------------------------
CARE assigns 'CARE B+' and 'CARE A4' rating to bank facilities of
Star Paper Mills Ltd.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank
Facility
(Fund based) 19.00 'CARE B+' Assigned
Short Term Bank
Facility (Non
Fund based) 10.00 'CARE A4' Assigned
Rating Rationale
The ratings are constrained by volatile raw material prices,
dependence on the grid for power leading to higher cost, operating
losses & eroding networth over the last three years and working
capital intensive nature of operations. The rating however, draws
strength from experience of the promoters having long track record
and moderate capital structure. Ability of the company to improve
its operational performance & profitability would be the key
rating sensitivities.
Incorporated in 1936, Star Paper Mills Limited is an integrated
Pulp and Paper Mill, the management and control of which was taken
over by Duncan Goenka Group in the year 1986. The company has an
installed production capacity on 75000 MT of wood pulp and paper -
bleach and un-bleach located in Saharanpur, Uttar Pradesh. The
company produces a wide range of Industrial, Packaging and
Cultural Papers catering to almost all segments of the market.
SPML reported a net loss of INR29.5 crore on a total operating
income of INR273.1 crore in FY13 (refers to the period April 1 to
March 31).
In H1FY14, SPML reported a net loss of INR13.9 crore on a total
operating income of INR128.9 crore.
SVR ELECTRICALS: ICRA Upgrades Ratings on INR6.85cr Loans to 'B'
---------------------------------------------------------------
ICRA has upgraded the long-term rating assigned to INR6.85 crore
fund based limits of SVR Electricals Private Limited from
'[ICRA]D' to '[ICRA]B'. ICRA has also upgraded the short-term
rating assigned to its INR6.00 crore non-fund based limits from
'[ICRA]D' to '[ICRA]A4'.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash credit 4.75 [ICRA]B Upgraded
Term Loan 2.10 [ICRA]B Upgraded
LC 2.00 [ICRA]A4 Upgraded
BG 4.00 [ICRA]A4 Upgraded
The assigned ratings primarily factor in the timely servicing of
bank loan obligations by the company over the last eight months.
The assigned ratings also derive comfort from long experience of
the promoters in the transformer industry, stable growth in its
revenues over the last three years and its favorable capital
structure with a gearing of 0.78 times as on March 31,2013.
The assigned ratings, however, are constrained by the moderate
financial profile of the company with moderate profitability and
coverage indicators, high customer and geographical concentration
risks as majority of sales are made to Andhra Pradesh state power
distribution companies and low pricing as a result of high
competition from other players in the industry.
SVR Electricals Private Limited was established in 1978 by Mr
Venkateshwara Rao. The company is involved in manufacturing of
various ranges of distribution transformers. Majority of its
clients are Andhra Pradesh government power distribution
companies.SVR has a sister concern called Vijay Transformers which
is also into the same line of business.
Recent Results
In FY2013, the company reported an operating income of INR36.38
crore and an operating profit of INR2.01 crore as against an
operating income of INR30.36 crore and an operating profit of
INR2.05 crore in FY2012.
TM TYRES: CRISIL Downgrades Ratings on INR520MM Loans to 'D'
------------------------------------------------------------
CRISIL has downgraded its ratings on the bank facilities of TM
Tyres Ltd to 'CRISIL D/CRISIL D' from 'CRISIL B+/Negative/CRISIL
A4'
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 165 CRISIL D (Downgraded from
'CRISIL B+/Negative')
Cash Credit 60 CRISIL D (Downgraded from
'CRISIL B+/Negative')
Letter of credit 150 CRISIL D (Downgraded from
& Bank Guarantee 'CRISIL A4')
Long Term Loan 145 CRISIL D (Downgraded from
'CRISIL B+/Negative')
The rating downgrade reflects instances of delays by TMTL in
servicing its debt; the delays have been caused by the company's
weak liquidity.
TMTL has large working capital requirements and its profitability
margins are susceptible to volatility in raw material prices.
However, the company benefits from its promoters extensive
experience in the rubber tubes business.
TMTL (formerly, TM Tyres Pvt Ltd) was promoted by Mr. Ashok Kumar
Agarwal in 1996. It was reconstituted as a closely held public
company from a private limited company in 2005. TMTL mainly
manufactures inner rubber tubes (butyl tubes) of weights ranging
from 350 grams (gm) to 18 kilograms (kg) for vehicle tyres. TMTL's
other products include butyl curing bags, envelopes, flaps and
rubber compounds. The company is based in Hyderabad, Andhra
Pradesh.
VIMAL MICRONS: ICRA Reaffirms 'B+' Ratings on INR25.93cr Loans
--------------------------------------------------------------
ICRA has reaffirmed an '[ICRA]B+' rating to the INR3.43 crore
(reduced from INR6.90 crore) term loans and the INR22.50 crore
(enhanced from INR12.50 crore) cash credit facility of Vimal
Microns Limited. ICRA has also reaffirmed an '[ICRA]A4' rating to
the INR 1.25 crore (enhanced from INR1.00 crore) short term non
fund based facility of VML.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term Loans 3.43 [ICRA]B+ reaffirmed
Cash Credit
Facility 22.50 [ICRA]B+ reaffirmed
Non Fund Based
Limits 1.25 [ICRA]A4 reaffirmed
The reaffirmation of ratings takes into account the relatively
modest size of operations of the company, fragmented nature of the
industry with large number of unorganised as well as organised
players and weak financial profile characterised by low net
margins and a stretched capital structure resulting from regular
debt funded capex in the past. Moreover, absence of captive
mineral resources exposes the company to uncertainty in its raw
material supply arrangements and results in high working capital
intensity of operations. The ratings further remain constrained
owing to financial support provided by the company towards the
group's new projects which has constrained the financial position
of the company.
The ratings, however, favourably factor in the long experience of
the promoters in the business, healthy plant utilisation levels,
established relationship with reputed clientele and positive
demand outlook from the paints and plastics industry. With
logistics being a major part of total cost, the ratings factor in
the strong position of the company in western region with only one
other major supplier in the region.
Vimal Microns Limited, established in 1993 by Shri. Ganpatbhai K.
Patel and associates, is engaged in manufacturing of micronised
mineral powder used as fillers in various paint and polymer
industries. The different products consist of Calcium Carbonate,
Dolomite, China Clay, Talc, Baryte and Quartz. The company's
manufacturing setup is located at Mehsana district, Gujarat and
the production capacity of the plant is 88,800 TPA.
VML is part of the Vimal group of industries based out of Mehsana
whose flagship company - Vimal Oils & Foods Ltd. is engaged in the
production, refining and marketing of edible oils. Vimal Group of
Industries is one of the leading groups of North Gujarat engaged
in diversified businesses like electrical products, cable wires,
winding wires, submersible pumps, dairy industry, edible oil
industry, paint industry and micronized mineral powder.
Recent Results
VML reported an operating income of INR60.82 crore and profit
after tax of INR 0.41 crore for year ended March 31, 2013, as
against operating income of INR 58.30 crore and profit after tax
of INR0.29 crore for year ended 31st March 2012.
=================
I N D O N E S I A
=================
ALAM SUTERA: Moody's Affirms B1 CFR & Rates Proposed Notes (P)B1
----------------------------------------------------------------
Moody's Investors Service has affirmed the B1 corporate family and
senior unsecured bond ratings of PT Alam Sutera Realty Tbk (Alam
Sutera). The senior unsecured bonds were issued by Alam Sutera
International Pte Ltd and Alam Synergy Pte Ltd, both wholly owned
subsidiaries of Alam Sutera. At the same time, Moody's has
assigned a provisional (P)B1 senior unsecured rating to the
proposed senior unsecured notes to be issued by Alam Synergy Pte
Ltd and guaranteed by Alam Sutera and some of its subsidiaries.
The outlook for the ratings is stable.
The provisional status of the senior unsecured bond rating will be
removed upon completion of the bond issuance with all satisfactory
terms and conditions met.
RATINGS RATIONALE
On Jan. 7, 2014, Alam Sutera announced a tender offer to
repurchase any and all of the USD150 million 2017 senior unsecured
notes issued by Alam Sutera International Pte Ltd. The purchase
will be funded by proceeds from the proposed USD senior unsecured
notes to be issued by Alam Synergy Pte Ltd.
"Successful completion of the tender offer and bond issuance will
further extend Alam Sutera's debt maturity profile and bolster its
strong liquidity position," says Jacintha Poh, a Moody's Analyst.
"However, total debt and interest expense will rise in the near
term, negatively affecting Alam Sutera's credit metrics in FY2014.
Nonetheless, we expect the credit metrics to remain within our
rating parameters," adds Poh, who is also the Lead Analyst for
Alam Sutera.
As of Sept. 30, 2013, the company had an adjusted EBITDA/interest
of 4.8x and debt/EBITDA of 2.5x. It has cash and cash equivalents
of IDR1.3 trillion and no short-term debt maturing over the next
12 months.
Alam Sutera continues to deliver sound operational performance.
For the eleven months ended November 2013, the company achieved
marketing sales of IDR4.7 trillion. Additionally, it successfully
added over 100 hectares (ha) of land on a net basis, bringing its
total land bank to 2,184 ha as at Sept. 30, 2013. Approximately
90% or 1,949 ha of its land bank is located in Tangerang, a region
in Greater Jakarta.
The stable outlook on Alam Sutera's ratings reflects Moody's
expectation that they will continue to be supported by the
company's low-cost land bank in Greater Jakarta, as well as its
financial discipline even as it pursues growth.
Further upward rating pressure is unlikely over the medium term,
but could emerge if Alam Sutera is able to successfully execute
its expansion strategy and produce sustained improvement in its
credit metrics. Credit metrics that will support an upgrade
include adjusted EBITDA/interest coverage above 5.0x, adjusted
debt/EBITDA below 2.5x and consistent positive free cash flows on
a sustained basis.
On the other hand, downward pressure could emerge if Alam Sutera's
financial and liquidity profile weaken owing to (1) the company
failing to execute its business plans, (2) a deterioration in the
property market, leading to protracted weakness in its operations
and credit profile, and (3) a material depreciation in the rupiah,
which could increase the company's debt-servicing obligations.
Moody's considers adjusted EBITDA/interest coverage of less than
3.0x, adjusted debt/EBITDA above 3.5x to 4.0x and insufficient
cash to cover short-term debt obligations, as indications that a
downgrade may be necessary.
The principal methodology used in this rating was the Global
Homebuilding Industry published in March 2009. Please see the
Credit Policy page on http://www.moodys.comfor a copy of this
methodology.
Established on Nov. 3, 1993, Alam Sutera is an integrated property
developer in Indonesia with a sizeable land bank of 2,184 ha
(gross area) as of Sept. 2013. The company focuses on the sale of
land lots in accordance with township planning requirements, as
well as property development in residential and commercial
segments in Indonesia. Alam Sutera -- which was formerly known as
PT Adhihutama Manunggal -- was founded by the family of The Ning
King. The company listed on the Indonesian Stock Exchange on 18
December 2007.
APEXINDO PRATAMA: Moody's Withdraws (P)'Ba3' CFR
------------------------------------------------
Moody's Investors Service has withdrawn the provisional (P)Ba3
corporate family rating of PT Apexindo Pratama Duta Tbk and the
provisional (P)Ba3 rating of the company's proposed USD-
denominated secured bonds, to be issued by Apexindo Netherlands
B.V.
RATINGS RATIONALE
The corporate family rating assigned on Sept. 19, 2013, was
provisional, pending completion of the proposed bonds which were
never issued.
Moody's has withdrawn the rating for its own business reasons.
MNC SKY VISION: Moody's Upgrades CFR to B1; Outlook Stable
----------------------------------------------------------
Moody's Investor's Service has upgraded the corporate family
rating of P.T. MNC Sky Vision to B1 from B2.
The outlook on the rating is stable.
RATINGS RATIONALE
The rating action follows the redemption of Sky Vision's
USD165 million 12.75%, 2015 senior secured bonds on Dec. 12, 2013.
The redemption was funded with a US$250 million, three-year
syndicated loan which was signed in November 2013.
"The refinancing exercise not only extended Sky Vision's debt
maturity profile by one year, but the incremental increase in debt
also provides additional capital to support the capex and working
capital needs associated with Sky Vision's organic growth over the
next few years," says Annalisa Di Chiara, a Moody's Vice President
and Senior Analyst.
"In addition, interest on the term loan of LIBOR +425bp will
reduce Sky Vision's funding costs considerably, helping to bolster
cash flows. The decline in interest costs will also help offset
some of the effect of the currency mismatch between its Rupiah-
based revenues and USD-denominated interest costs," adds Di
Chiara, also Moody's Lead Analyst for Sky Vision.
"The upgrade also reflects Sky Vision's continued strong operating
performance, as demonstrated by its year-on-year subscriber growth
of 37% in the first nine months of 2013 and its leading position
in the domestic pay-TV market with its market share remaining
above 70%. Given the significant level of under-penetration in
its domestic market, S&P believes Sky Vision is well-positioned
for robust organic growth over the medium to long term, and expect
EBITDA margins to remain in the 40% range," adds Di Chiara.
In addition, Sky Vision's credit metrics are well positioned for
its B1 rating, and even with its increased debt burden, the
company should maintain adjusted debt/EBITDA below 2.5x.
Furthermore, the decrease in interest costs will provide
significant cash flow benefits and improve its interest coverage
ratio from the current 5.5x range.
The rating also continues to reflect the company's small revenue
base, the competitive headwinds it will face as other operators
increase investment in pay-tv services, satellite operation risks
and exposure to foreign currency volatility.
While the company's revenues are denominated in Rupiah, a
significant portion of its programming costs and capex is is US$
denominated as are its interest costs. However, with the
reduction in interest costs combined with the company's solid
operating performance and liquidity, there is still some cushion
to absorb currency fluctuations. For example, with a further 10%
depreciation in the Rupiah, Sky Vision's debt/EBITDA should remain
below 3.0x, which is strong for the B1 rating level.
The stable outlook reflects S&P's expectation that Sky Vision's
leading market share and product offering will continue to support
significant organic growth over the next 12-18 months, and support
EBITDA margins in the 40% range.
Given the upgrade, further positive rating action is unlikely over
the medium term. However positive momentum could build should Sky
Vision maintain its market share and adjusted EBITDA margins above
40% whilst growing the revenue base. Moody's would also like to
see an improvement in ARPU and the company achieve consistent
positive free cash flow such that adjusted free cash flow/debt is
above 10%.
On the other hand, downward pressure could develop should
competition intensify and result in a decline in the company's
market share and operating profit margins. Specifically, the
outlook or ratings could come under pressure if operating margins
deteriorate below the 35% range, or the company's cash cushion
deteriorates materially, such that it would need to rely on
additional external funds to support its growth. Sustained
negative free cash flow generation over the longer term or more
aggressive shareholder initiatives, including sizeable dividends,
would also be negative for the rating.
In addition, any reduction in Global Mediacom's shareholding in
Sky Vision, which would change the parent company's undertakings
and ability to support Sky Vision, will also have a negative
impact on Sky Vision's rating.
The principal methodology used in this rating was the Global Pay
Television - Cable and Direct-to-Home Satellite Operators
published in April 2013. Please see the Credit Policy page on
http://www.moodys.comfor a copy of this methodology.
Headquartered in Jakarta, MNC Sky Vision is a provider of direct-
to-home, pay-TV services. The company is 66% owned by PT Global
Mediacom Tbk, a diversified media company, and in which PT MNC
Investama Tbk owns a 53.4% stake. Both Global Mediacom and MNC
Investama are publicly listed in Indonesia.
=========
J A P A N
=========
AGURA BOKUJO: Execs Get Prison Term For Misleading Investors
------------------------------------------------------------
The Japan Times reports that the Tokyo District Court on
January 9 sentenced the president of failed cattle operation Agura
Bokujo to 34 months in prison for soliciting investors based on
misleading information before the outfit went under in 2011.
Under a cattle breeding scheme, investors purportedly purchased
cows from Agura Bokujo, which would continue to raise the animals
and buy them back several years later, the report relates. Calves
born during the investment period would be sold and investors
would receive the profits, the report states.
But the defendant, Kumiko Mikajiri, 69, provided false information
to around 190 investors from September 2010 to
July 2011, according to The Japan Times. She sent pamphlets that
made it appear the operation had more cows than it did and sent
contracts bearing identification numbers for nonexistent cattle,
according to the court, The Japan Times relays.
Another former executive, Katsuya Oishi, 74, was sentenced to 28
months in prison, the report adds.
"It is a deliberate crime that caused huge nationwide damage," the
report quotes presiding Judge Masaharu Ashizawa as saying.
"Although the defendants were aware that their farm was always
short of cattle, they selfishly tried to solicit investors to
maintain the farm."
The judge said even though the two admitted their guilt and
expressed contrition, they should receive prison terms, the report
adds.
Agura Bokujo, based in Tochigi Prefecture, went bankrupt in 2011
with about JPY433 billion in total liabilities, owing roughly
JPY420.7 billion of that to the 73,000 investors, Kyodo News
disclosed. Under the scheme, Kyodo related, investors purchased
female cows from Agura Bokujo, which would continue to raise the
animals and buy them back several years later, for about JPY3
million to JPY5 million per head.
TOKYO HY-POWER: Files for Bankruptcy
-----------------------------------
The ARRL Letter reports that Tokyo Hy-Power, a manufacturer of
Amateur Radio amplifiers, antenna tuners, and other equipment, is
in bankruptcy, and its plant, in Saitama Prefecture near Tokyo,
has been shuttered.
Telephones at the company no longer are being answered, and its
Japanese website has been taken down, although the company's US
website remains working, the ARRL relates.
The ARRL says company CEO and President Nobuki Wakabayashi blamed
"the recent depression in the industrial RF power products area
[which] has led to the very difficult financial position."
Mr. Wakabayashi founded Tokyo Hy-Power Labs in 1975.
===============
M O N G O L I A
===============
TRADE AND DEVELOPMENT: Moody's Assigns B1 Rating to Sr. Notes
-------------------------------------------------------------
Moody's Investors Service has assigned a B1 rating to Trade and
Development Bank of Mongolia LLC's (TDBM) proposed fixed rate CNY
senior unsecured notes. The notes will be drawn from TDBM's
$700 million Euro medium-term note (MTN) program, which in turn is
rated (P)B1.
The rating outlook for the notes is negative.
The rating assigned to the notes is subject to the receipt of
final documentation, the terms and conditions of which are not
expected to change in any material way from the draft documents
reviewed by Moody's.
RATINGS RATIONALE
TDBM's B1 rating incorporates a one-notch uplift to its foreign
currency and local currency debt rating, from its standalone
credit profile of b2, based on Moody's assessment of systemic
support. The high probability of support from the Government of
Mongolia (B1 stable) to TDBM is underpinned by the bank's
systemically important position, as the largest bank in the
country by assets.
TDBM's baseline credit assessment (bca) of b2 reflects its:
(1) solid market position as a leading corporate lender in foreign
exchange and trade-related businesses; (2) sound profitability and
good operating efficiency; and (3) diversified funding sources
from both domestic depositors and foreign financial institutions.
However, the ratings are constrained by the bank's: (1) high
concentration risk, against the backdrop of the limited diversity
of Mongolia's economy, and which renders the economy vulnerable to
external factors; (2) substantial capital needs assuming that the
Mongolian economy and credit continues to grow at a rapid pace;
and (3) potential challenges related to corporate governance that
could arise from its narrow shareholding structure.
Moody's recent change in the rating outlooks of all rated Mongolia
banks to negative reflects the banks' vulnerability to
intensifying adverse developments in the operating environment.
In addition, TDBM's is vulnerable to a deterioration in asset
quality given its high loan concentration and the bank's portfolio
of corporate loans.
Moody's notes that TDBM's top 20 group borrower exposures were
equivalent to 42% of its total loans at end-Sept. 2013. More than
50% of these borrowers were also in risky sectors such as mining
and construction. The latter accounted for 17.2% and 16.2% of the
bank's total loans at end-September 2013.
An upgrade of the bank's ratings is unlikely, given that the B1
ratings assigned to TDBM are at the same rating level as the
sovereign rating.
Nonetheless, the bca could be raised if the bank substantially
reduces its borrower concentration and exposure to risky sectors.
On the other hand, the following factors could exert negative
pressure on TDBM's ratings: (1) corporate governance-related
problems that cause a loss of depositor confidence, therefore
increasing the threat of deposit flight; (2) a significant
deterioration in asset quality; for example new NPLs to gross
loans exceed 4.0%; (3) a rise in concentration, or a rise in
exposures to risky sectors, in particular construction; (4) Tier 1
falls below 9%; or (5) a significant deterioration in
profitability, such that their net income is less than 1.4% of
their average risk weighted assets.
The bank's other ratings are:
-- Bank financial strength of E+; local currency bank deposit
rating of B1; foreign currency bank deposit rating of B2;
issuer rating of B1; foreign currency long-term senior
unsecured debt/subordinate debt of B1/B2; and foreign
currency long-term senior unsecured MTN/subordinate MTN of
(P)B1/(P)B2.
-- Local currency/foreign currency short-term deposit rating
of NP; local currency/foreign currency short-term issuer
rating of NP; and other short-term rating of (P)NP.
The principal methodology used in this rating was Global Banks
published in May 2013. Please see the Credit Policy page on
http://www.moodys.comfor a copy of this methodology.
Trade and Development Bank of Mongolia LLC is based in
Ulaanbaatar. It is the largest banks in Mongolia by assets at
Sept. 30, 2013, the bank's consolidated assets totaled
MNT4.2 trillion ($2.6 billion).
====================
N E W Z E A L A N D
====================
TOLL HOLDINGS: NZ Unit Widens 2013 Annual Loss to NZ$60MM
---------------------------------------------------------
Paul McBeth at BusinessDesk reports that Toll Holdings'
New Zealand unit recognized a provision of almost $22.9 million in
its dispute with the Inland Revenue Department over its use of
convertible notes in 2013, a year that saw its annual loss widen
by 69 percent as it wrote down the value of its Express Logistics
acquisition.
According to the report, the Australian logistics group, which
competes locally with NZX-listed Mainfreight [NZX: MFT], is one of
a group of companies being chased by the New Zealand tax
department for claiming deductions on interest on convertible
notes. BusinessDesk relates that IRD claims the securities, which
let companies juggle debt and equity to provide a tax advantage,
were used simply as a means to minimise tax.
BusinessDesk says local subsidiary Toll Group (NZ) flagged the
dispute as a NZ$19 million contingent liability in its 2012
accounts, only recognising it as a provision in its latest
accounts. Provisions are recognised when the group has a legal or
constructive obligation as a result of past events; it is more
likely that an outflow of resources will be needed to settle the
obligation; and the amount can be reliably estimated, the
statements say, BusinessDesk relays.
The report relates that the statements said the notes were used to
fund local investments between 2002 and 2005, with the disputed
deductions on interest ranging from 2002 and 2012. The NZ$242.8
million of notes were converted to shares in 2012, meaning the
Toll unit didn't have any finance expenses in the latest period,
compared to interest costs of NZ$25.5 million a year earlier, the
report relays.
According to BusinessDesl, Toll's New Zealand unit widened its
loss to NZ$60.8 million in the 12 months ended June 30, from
NZ$35.9 million a year earlier, writing down the value of goodwill
by NZ$42.6 million. Revenue edged down to
NZ$379.5 million from NZ$383 million a year earlier, and excluding
the charge on goodwill, operating earnings dropped by a quarter to
NZ$5.3 million, the report relates.
The impairment charge was on its Express Logistics freight
forwarding unit, which Toll bought in 2009 for some
AUD50 million, the report adds.
Toll Holdings Limited is a transport company based in Australia.
===============
X X X X X X X X
===============
* Moody's Asian Liquidity Stress Index Rise to 20% in December
--------------------------------------------------------------
Moody's Investors Service says that its Asian Liquidity Stress
Index (Asian LSI) rose to 20% in December from 19% in November.
"The index, which decreases when speculative-grade liquidity
appears to increase, has held in a tight 19.0%-21.1% range since
July, having declined gradually from its recent high of 29.1%,
established 14 months ago in October 2012," says Laura Acres, a
Moody's Senior Vice President.
"The month-on-month increase reflects a decrease of one company,
to 115, in the high yield space and the addition of one company to
a total of 23 with Moody's lowest or weakest speculative-grade
liquidity score of SGL-4," says Ms. Acres.
Ms. Acres was speaking on the release of Moody's latest report on
the index, entitled "Asian Liquidity Stress Index."
"The reading for December is well below the record high of 37%
reached during fourth quarter of 2008 amid the global financial
crisis and is now in line with the long-term rolling average for
the Asian LSI," says Ms. Acres.
The liquidity sub-index for Chinese speculative-grade companies
increased for a second consecutive month, to 22.2% from 20.3% in
November, according to the report.
The number of high-yield Chinese companies decreased to 63 from 64
in November. Meanwhile, the number with an SGL-4 score increased
to 14 in December from 13 in November.
China's high-yield property sub-index also rose to 21.1% from
18.4% in November with eight of 38 companies in the sub-sector
having SGL-4 scores.
The Indonesian sub-index was flat for a third month as the
composition remained static: one company out of 26 has a SGL-4
score.
The Australian index, which does not factor into the Asian LSI,
declined to 28.6% in December from 33.3% in November as the number
of high-yield Australian companies decreased to 14 from 15. The
number of Australian high-yield companies with a score of SGL-4
also declined to four from five in November.
Moody's had assigned speculative-grade ratings to 115 issuers in
Asia (excluding Japan and Australia) covering $61.7 billion of
rated debt by the end of December, versus 116 issuers and $61.5
billion of rated debt in November.
*********
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 ***