/raid1/www/Hosts/bankrupt/TCRAP_Public/140129.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Wednesday, January 29, 2014, Vol. 17, No. 20
Headlines
A U S T R A L I A
FAIRBANE PTY: G S Andrews Appointed as Administrators
LGH HOLDINGS: Accountant Pleads Guilty to ASIC Charges
MACS ENGINEERING: Sci-Fleet Buys Firm Out of Administration
MINOTAUR EQUIPMENT: Hall Chadwick Appointed as Administrators
ROYAL TAXIS: Placed in Liquidation
C H I N A
AGILE PROPERTY: Moody's Affirms Ba2 CFR; Outlook Stable
CHINA: Default-Swap Bets at 14-Month High on Trust Flops
CHINA: Bond Risk Drops as Trust Rescue Offer Avoids Lehman Moment
CHINA OVERSEAS: Fitch Rates $400-Mil. Senior Notes at 'BBB'
CIFI HOLDING: Fitch Rates $200-Mil. Sr. Unsecured Notes at B+
EVERGRANDE REAL: Moody's Says Investment No Impact on 'B1' CFR
EVERGRANDE REAL: S&P Puts 'BB' CCR on CreditWatch Negative
FUTURE LAND: Fitch Affirms Issuer Default Ratings at 'B+'
LDK SOLAR: Noteholders Extend Forbearance Pact Until Feb. 13
XINYUAN REAL: Consent Solicitation Won't Affect Fitch's B+ Rating
I N D I A
AARON HELMETS: ICRA Reaffirms B- Rating on INR6.43cr Loans
AIR INDIA: Bombay HC Not to Interfere in Salary Cut Issues
AMRITMAYA FOODS: ICRA Assigns 'B-' Rating to INR7.5cr Loans
ANC ENTERPRISES: CRISIL Reaffirms 'B' Rating on INR84.8MM Loans
ANSHU'S CLOTHING: CARE Cuts Rating on INR9cr Long-Term Loan to D
BALMUKUND CEMENT: CRISIL Reaffirms 'B+' Rating on INR348.3M Loans
CHADHA INDUSTRIES: ICRA Assigns B- Rating to INR6cr Loan
CHALLANI JEWELLERY: CRISIL Rates INR80 Million Loan at 'B+'
DHARTI COTTON: CARE Reaffirms 'B' Rating on INR8cr LT Loans
ENN AAR: CRISIL Downgrades Rating on INR59 Million Loan to 'B-'
ESWARI EXPORTS: ICRA Assigns 'B' Rating to INR2.5cr Loans
GEETANJALI AGRO: ICRA Suspends 'B' Rating on INR13cr Loan
GORA MAL: ICRA Cuts Rating on INR3.35cr Loans to 'B+'
GREEN GOLD: CRISIL Assigns 'B-' Rating to INR17 Million Loan
GTL LIMITED: CARE Lowers Rating on INR5.40BB Loans to 'D'
JPM EXPORTS: ICRA Suspends B+ Rating on INR0.56cr Loans
MAA BHAGWATI: CRISIL Reaffirms 'B+' Ratings on INR114MM Loans
MAHATMA SUGAR: CRISIL Cuts Ratings on INR1.25BB Loans to 'D'
MARUDHAR POLYSACKS: CRISIL Cuts Ratings on INR55MM Loans to 'B-'
ORBIT AVIATION: CARE Assigns 'B+' Rating to INR43.57cr LT Loans
PARAMOUNT RICE: ICRA Reaffirms 'B+' Rating on INR12.58cr Loans
PURNAM: ICRA Assigns 'B' Ratings to INR13.55cr Loans
RADHESHYAM SPINNING: ICRA Ups Rating on INR35cr Loans to 'B+'
RAVI OFFSET: CRISIL Lowers Ratings on INR230MM Loans to 'D'
S.K. FABRICS: CRISIL Rates INR150MM Long Term Loan at 'B+'
SANGO AUTO: CRISIL Reaffirms 'B' Ratings on INR34.7MM Loans
SARVAHITHA EDUCATIONAL: CRISIL Ups Rating on INR130MM Loans to B+
SARVESH RICE: CRISIL Reaffirms 'B' Ratings on INR195MM Loans
SATYANARAYANA JEWELLERS: CRISIL Keeps B+ Rating on INR120M Loan
SERWEL ELECTRONICS: ICRA Lowers Rating on INR56cr Loans to 'D'
SHIV RICE: ICRA Suspends 'B+' Rating on INR8.41cr Loans
SHIVAMRUT DUDH: CRISIL Rates INR200 Million Loan at 'B+'
SHIVDHAN BOARDS: CRISIL Assigns 'B-' Ratings to INR88.6MM Loans
SHREE VENKATESHWARA: CRISIL Reaffirms D Ratings on INR353MM Loans
SHRI VAISHNAVI: ICRA Suspends 'B+' Rating on INR12cr Loan
SIDDHI SUGAR: CARE Assigns 'B+' Rating to INR26.71cr LT Loans
SLO AUTOMOBILES: CRISIL Reaffirms B+ Rating on INR55MM Loan
SRI KARIGIRI: CRISIL Reaffirms 'B' Rating on INR170MM Loans
SRIKARA PARENTERALS: CRISIL Places 'D' Ratings on INR100MM Loans
SUNNY DIAMONDS: CRISIL Assigns 'B+' Ratings to INR130MM Loans
SURAANA TEXTILE: ICRA Withdraws B+ Rating on INR10.98cr Loans
SURE CARGO: CRISIL Reassigns 'B' Ratings to INR40MM Loans
SURYALAXMI ENTERPRISES: CARE Ups Rating on INR9.54cr Loans to 'B'
TAPAL STEEL: CRISIL Reaffirms 'D' Ratings on INR193MM Loans
TECHTRANS CONSTRUCTION: ICRA Suspends D Rating on INR31.73cr Loan
TIKU RAM: CRISIL Reaffirms 'B+' Rating on INR625MM Loans
U.H. AGROTECH: CRISIL Reaffirms 'D' Ratings on INR230MM Loans
J A P A N
SONY CORP: Moody's Cuts Issuer Rating to Ba1; Outlook Stable
I N D O N E S I A
ALAM SUTERA: Fitch Puts Final Rating on $22-Mil. Notes at B+
S I N G A P O R E
OUE COMMERCIAL: Moody's Assigns Ba1 CFR; Outlook Stable
- - - - -
=================
A U S T R A L I A
=================
FAIRBANE PTY: G S Andrews Appointed as Administrators
-----------------------------------------------------
Gregory Stuart Andrews & Andrew Juzva of G S Andrews Advisory were
appointed as administrators of Fairbane Pty Ltd on Jan. 24, 2014.
LGH HOLDINGS: Accountant Pleads Guilty to ASIC Charges
------------------------------------------------------
South Yarra accountant Mark Ronald Letten on Jan. 28 pleaded
guilty to 27 criminal charges, including charges of operating 21
unregistered managed investment schemes, following an Australian
Securities and Investment Commission investigation.
Mr. Letten, 60, the former director of LGH Holdings Ltd (in
liquidation) and the principal of the accounting firm Lettens Pty
Ltd, formerly The Letten Group, has also admitted to dishonestly
using his position as a director (using investor funds totalling
almost AUD550,000) and of carrying on a financial services
business without an Australian financial services (AFS) licence.
Between 1998 and 2010 more than 1,000 investors placed more than
AUD100 million in investment property schemes in Australia and New
Zealand. Mr. Letten managed and promoted the projects through a
number of companies including LGH Holdings Ltd.
The companies and unregistered schemes were wound up following a
number of applications by ASIC in the Federal Court of Victoria
commencing in 2010.
Mr. Letten was charged in December 2011 and was to face a trial
following a committal hearing in December 2012.
Appearing in the Victorian County Court, Mr. Letten pleaded guilty
to 27 charges being:
* 21 charges of operating unregistered managed investment
Schemes
* 1 charge of carrying on a financial services business
without an AFS licence
* 5 charges of breaching directors' duties.
Mr. Letten is facing a maximum sentence of five years imprisonment
for each of the unregistered scheme charges and the directors'
duties charges. He also faces a maximum two years imprisonment for
the charge of carrying on an unlicensed financial services
business.
Mr. Letten's conditional bail was extended and he is to reappear
in the Victorian County Court on 12 May 2014.
The Commonwealth Director of Public Prosecutions is prosecuting
the matter.
MACS ENGINEERING: Sci-Fleet Buys Firm Out of Administration
-----------------------------------------------------------
Vanessa Chircop at The Morning Bulletin reports that MACS
Engineering has been given a new lease on life after being sold to
Sci-Fleet Group.
MACS will continue to operate from its Victoria Street base under
the new ownership deal which followed its placement into voluntary
administration late last year, according to The Morning Bulletin.
Sci-Fleet Group CEO Jarrod Marshall said that MACS will continue
to thrive in the local industry, the report notes.
The report recalls that administrators recommended that MACS
Engineering be put into liquidation at a second creditors meeting.
The purpose of the meeting was to update creditors about the sales
process of the company, which went into voluntary administration
late last year, the report notes.
A spokesperson for the administrators, Derrick Vickers and Darryl
Kirk, of PricewaterhouseCoopers, said because the company was
deemed to be insolvent, and with no Deed of Company Arrangement
proposed, they were recommending MACS Engineering be put into
liquidation, the report relates.
Just weeks before Christmas, the report notes, the company said it
would close its doors in both Mackay and Caboolture. The closure
resulted in 76 people losing their jobs, the report relates.
At the time of its closure, MACS Engineering director Ross
Fredrickson said the decision to appoint voluntary administrators
was made after all other options had been exhausted, the report
adds.
Sci-Fleet Group is a family-owned Queensland business which has
had a long association with Mackay.
MINOTAUR EQUIPMENT: Hall Chadwick Appointed as Administrators
-------------------------------------------------------------
David Anthony Ross -- dross@hallchadwick.com.au -- and
Shanon Thomson -- sthomson@hallchadwick.com.au -- of Hall Chadwick
were appointed administrators of Minotaur Equipment Pty Ltd on
Jan. 22, 2014.
A first meeting of the creditors of the Company will be held on
Feb. 4, 2014, at 11:00 a.m. at Quality Hotel Mildura Grand,
Seventh Street in Mildura, Victoria.
ROYAL TAXIS: Placed in Liquidation
----------------------------------
Cliff Sanderson at dissolve.com.au reports that Royal Taxis Pty
Ltd has closed its doors and entered liquidation. This latest
development left over 90 taxis idle, the report says.
RSM Bird Cameron's Andrew William Beck -- andrew.beck@rsmi.com.au
-- and Frank Lo Pilato -- frank.lopilato@rsmi.com.au -- were
appointed as liquidators on Jan. 17, 2014, dissolve.com.au
discloses.
Royal Taxis Pty Ltd was a Victorian taxi operator.
=========
C H I N A
=========
AGILE PROPERTY: Moody's Affirms Ba2 CFR; Outlook Stable
-------------------------------------------------------
Moody's Investors Service has affirmed Agile Property Holdings
Limited's Ba2 corporate family and senior unsecured ratings.
The outlook on all ratings is stable.
RATINGS RATIONALE
"The affirmation of Agile's Ba2 ratings reflects Moody's
expectation that the company will succeed in reducing its debt
leverage in the next 12 months to a level in line with its Ba2
ratings," says Kaven Tsang, a Moody's Vice President and Senior
Analyst.
Agile has a track record of maintaining credit metrics that are
consistent with the Ba range, though its current debt leverage is
high for its Ba2 ratings.
If Agile is unable to lower its debt leverage within the expected
time frame, its ratings could face downgrade pressure.
Agile's debt leverage increased in 2013 resulting from debt-funded
land acquisitions. Moody's estimates that Agile's adjusted
debt/capitalization rose to around 63% at end-2013 from 54% in
2012.
At the same time, its revenue/gross debt ratio (including reported
debt plus 100% of its perpetual securities) will fall below 0.8x
in 2013 from its historical level of above 1x.
However, Moody's expects the company will apply some proceeds from
its contracted sales to repay its debt. This will reduce its
adjusted debt/capitalization to around 60% and its revenue/gross
debt ratio will trend up to 0.8x-0.9x in the next 6-12 months.
Moody's also expects Agile's EBITDA/interest ratio to stay between
3.0x and 3.5x in the next 12-18 months, a level in line with its
Ba2 ratings.
Additionally, Agile's liquidity is adequate, supported by a 22%
year-on-year growth in contracted sales to RMB40.3 billion in
2013.
Moody's estimates that its cash holdings of around RMB13 billion
at end-2013 and projected operating cash flow of approximately
RMB10 billion can fully cover its committed land payments,
repayments of maturing debt, and dividend payments that total
around RMB14 billion in the next 12 months.
"Moody's also expects the company will manage down its current
level of secured and subsidiary debt in the next 6-12 months from
its sales proceeds and offshore borrowings, and as a result,
Agile's bond rating is not notched down for subordination," adds
Tsang, who also Moody's lead analyst for Agile.
Though its secured and subsidiary debt to total assets ratio would
exceed 15% in 2013, Agile has been able to keep the ratio below
the threshold in the past.
The bond rating could be downgraded if Agile's secured and
subsidiary debt fails to trend down to 15% of total assets in the
next 6-12 months.
Agile's Ba2 ratings continue to reflect the company's long
operating track record and established brand in the economically
strong Pearl River Delta, as well as its competitive land costs.
However, the company's ratings are constrained by its geographic
concentration in Guangdong Province and its fast expansion outside
the province.
The stable outlook reflects our expectation that Agile will
maintain discipline in its new land acquisitions and financial
management. This means the company will reduce its current debt
leverage in the next 6-12 months.
At the same time, it will maintain adequate liquidity to fund its
committed land premiums and other operating needs over the next 12
to 18 months.
The ratings could be upgraded if the company (1) successfully
implements its business plan and achieves good geographic and
product diversification; and (2) maintains good liquidity, with a
minimum cash balance consistently above 10%-15% of total assets,
and has access to the offshore bank and debt markets.
Credit metrics indicating such improvements include adjusted
debt/capitalization below 50%-55%, EBITDA/interest above 4x-4.5x,
and revenue/gross debt above 1.0x.
The ratings could experience downward rating pressure if Agile's
(1) operating cash flow weakens due to materially weaker-than-
expected sales, and/or over-expansion in terms of new projects;
(2) liquidity deteriorates because of aggressive land
acquisitions; or (3) debt increases substantially such that
adjusted debt/capitalization fails to trend down to 60%,
revenue/gross debt fails to trend up to 0.8x-0.9x in the next 6-12
months, or EBITDA/interest drops below 3x-3.5x.
The principal methodology used in this rating was the Global
Homebuilding Industry published in March 2009.
Agile Property Holdings Ltd is one of China's major property
developers, operating in the mid- to high-end segment. As of 15
August 2013, the company had 85 projects in 35 cities and
districts in China, and a land bank with a total gross floor area
of 41.2 million square meters. Guangdong Province is its largest
market, accounting for around 42% of the company's land bank.
CHINA: Default-Swap Bets at 14-Month High on Trust Flops
--------------------------------------------------------
David Yong at Bloomberg News reports that credit traders have
taken out the most protection on China's debt in 14 months just as
the world's second-biggest economy faces a default test in its
$1.7 trillion market for trust products.
The net notional amount of credit-default swaps outstanding on
Chinese sovereign bonds totaled $9.125 billion on Jan. 17, the
most since November 2012, Bloomberg relates citing weekly figures
published by Depository Trust & Clearing Corp. According to the
report, the figures indicate that December's 12 percent jump to
$9.066 billion was the biggest monthly gain since October 2011.
The cost of the contracts surged 25 basis points since Dec. 31,
poised for the largest monthly increase since a record cash crunch
in June, the report relays.
Bloomberg says credit risk is mounting amid speculation a
3 billion-yuan ($496 million) trust product distributed by the
nation's biggest lender will fail to repay holders this week.
Borrowing costs for debtors are also climbing as the government
eases interest-rate controls, Bloomberg notes. Local-government
financing vehicles set coupons of more than 9 percent in two debt
sales last week, levels not seen since at least 2012, according to
Nomura Holdings Inc., Bloomberg reports
"Any news related to China can have sentiment impact on global
risk assets and this is really the issue in the short term,"
Damien Buchet, head of emerging-market fixed income in Paris at
AXA Investment Managers, told Bloomberg by phone on Jan. 23. "This
is the reason why some people are buying China CDS."
AXA manages EUR550 billion ($750 billion) globally, according to
Bloomberg.
CHINA: Bond Risk Drops as Trust Rescue Offer Avoids Lehman Moment
-----------------------------------------------------------------
Bloomberg News reports that the cost of insuring China's bonds
against non-payment fell the most since September and debt linked
to municipalities gained after the bailout of a troubled trust
product averted a default that may have spooked markets.
According to Bloomberg, data provider CMA said credit-default
swaps protecting Chinese sovereign bonds for five years slid nine
basis points, or 0.09 percentage points, to 96 on Jan. 27 in
New York. ChinaBond figures showed the average yield on five-year
notes rated AA, the most common grade for so-called local-
government financing vehicles, dropped two basis points to 7.58
percent, the biggest decline in more than two weeks, Bloomberg
relays.
Bloomberg relates that the CDS jumped 14 basis points last week to
105, the highest since August, amid speculation a 3 billion yuan
($496 million) trust product would fail to repay investors
following the collapse of a coal miner. China is seeking to give
market forces a greater role in pricing risk in the world's
second-largest economy, while limiting increases in borrowing
costs to prevent a surge in defaults, Bloomberg says.
A failure would have caused "a re-pricing on all similar products
in the market and there could be a credit squeeze in which
borrowers would be affected," Qiang Liao, a senior director of
financial institutions ratings at Standard & Poor's in Beijing,
told Bloomberg. "This kind of concern has temporarily been
mitigated."
Bloomberg reports that billionaire investor George Soros wrote on
Jan. 2 in Project Syndicate that there were "eerie resemblances"
between China's debt market and the U.S. in the run-up to the
financial crisis, when the collapse of Lehman Brothers Holdings
Inc. led to a freeze in global credit. Bill Gross, chief
investment officer of Pacific Investment Management Co., the
world's biggest bond manager, said on Twitter: "Sounds familiar as
in 2008. Be very careful with your money," Bloomberg relays.
"This particular case can serve as a benchmark or test case for
how the Chinese government is going to approach any default or
fallout from the shadow-banking system," Bloomberg quotes Suan
Teck Kin, an economist at United Overseas Bank Ltd. in Singapore.
"In a way, it's to avoid some kind of Lehman moment for China."
Rights in the troubled trust product, which was issued by China
Credit Trust Co., can be sold to unidentified buyers at a price
equal to the value of the principal invested, according to one
investor who cited an offer presented by Industrial & Commercial
Bank of China Ltd. on Jan. 27, Bloomberg relays. ICBC, China's
biggest lender, distributed the trust, which matures Jan. 31, the
report notes.
CHINA OVERSEAS: Fitch Rates $400-Mil. Senior Notes at 'BBB'
-----------------------------------------------------------
Fitch Ratings has assigned China Overseas Grand Oceans Group Ltd's
USD400 million senior guaranteed 5.125% notes a final rating of
'BBB'.
The assignment of the final rating follows the receipt of
documents conforming to information already received and the final
rating is in line with the expected rating assigned on 18 November
2013.
The Chinese homebuilder's proposed bonds are rated at the same
level as COGO's senior unsecured rating as they represent direct,
unconditional, unsecured and unsubordinated obligations of the
company.
COGO's rating is based on a top-down approach; it is one notch
down from its parent China Overseas Land & Investment Limited
(COLI; BBB+). The standalone profile of COGO is in the 'BB'
rating category.
Benefits and Support from parent: COLI, one of the largest and
most profitable homebuilders in China, is the major shareholder of
COGO with a 38% stake. COLI focuses on Tier 1 and 2 cities
whereas COGO focuses on Tier 3 cities. COGO is of long-term
strategic importance to COLI as it is the only entity through
which the group is expanding in Tier 3 cities. The two companies
are integrated, sharing senior and operational management as well
as brand names, market intelligence and management systems.
Focus on Tier 3 Cities: Tier 3 cities are regional economic
centres or cities with strong growth potential. Continued
urbanisation will support COGO's growth in these cities. The GDP
of the Tier 3 cities that COGO operates in is expected to expand
by 12% in 2013, compared with the 7.5% growth for the whole of
China. COGO commanded the top position in sales in five Tier 3
cities in 1H13. Nevertheless, COGO's standalone 'BB' credit
profile is limited by its relatively small scale, short track
record of around three years in Tier 3 cities and weaker margins
reflecting the low average selling price (ASP) in Tier 3 cities.
Strong Execution Capabilities: Since 2010, COLI has transferred
more than 142 professionals to COGO to improve the operational and
execution capabilities of the subsidiary. COGO has demonstrated
strong execution and asset turnover, with the ratio of contracted
sales to total debt at 1.9x in 2011 and 2012. Fitch expects COGO
to continue this trend in the medium term. COGO's operational
model is to start construction in 100 days and start pre-sales in
200 days, and in the past three years, it has managed to sell
86.5% of its projects by the time they are completed.
Capital Structure Improvement: COGO's funding costs decreased from
5.66% in December 2010 to 4.70% in 1H13. With the help of its
parent, COGO has established strategic partnerships with major
commercial banks that ensure COGO will have access to sufficient
credit facilities. COGO also coordinates with COLI on its
treasury functions and shares both domestic and offshore banking
relationships with COLI.
Strong Brand Name: "China Overseas Property" has nearly 30 years
of history and has been a leading brand in the industry. In
cities where COGO operates, the brand premium gives it a 6%-20%
boost in its average selling prices compared with similar products
in the area. COGO can also use the China Overseas Property Club
of customers who have previously purchased its homes to broaden
its customer network, enhance current customer relationships, and
develop a mid- and high-end client base.
Positive rating action is unlikely without evidence of stronger
contractual linkage between COLI and COGO.
Negative: Future developments that may, individually or
collectively, lead to negative rating action include:
-- Weakening of strategic, operational or ownership linkages
between COLI and COGO
-- Lack of support from COLI in the event of sustained
weakening of COGO's operational, financial and liquidity
positions
-- Negative rating action on COLI
CIFI HOLDING: Fitch Rates $200-Mil. Sr. Unsecured Notes at B+
-------------------------------------------------------------
Fitch Ratings has assigned Chinese property developer CIFI
Holdings (Group) Co. Ltd's (CIFI, B+/Positive) USD200m 8.875%
senior unsecured notes due 2019 a final rating of 'B+' and a
recovery rating of 'RR4'.
The notes are rated at the same level as CIFI's senior unsecured
rating as they represent direct, unconditional, unsecured and
unsubordinated obligations of the company. The assignment of the
final rating follows the receipt of documents conforming to
information already received and the final rating is in line with
the expected rating assigned on 19 January 2014.
Positive Outlook: CIFI has improved its business scale and
achieved CNY15.3bn of contracted sales in 2013 compared with
CNY9.5bn in 2012. If it is able to maintain the leverage and
liquidity at healthy level, its overall credit profile will be
commensurate with a 'BB-' profile . Its enlarged size provides
advantages including more stable cash flow, cost benefits, and
more choices in land purchases.
High Sales Turnover: CIFI's credit profile has been improving
since it standardised its product types and shifted its focus to
mass-market housing in 2011. The agency expects this model to
result in a rapid rise in sales turnover and contracted sales.
CIFI's contracted sales/total debt was 1.1x in 2012, and Fitch
estimates the ratio improved to 1.3x in 2013.
National Presence: CIFI has a diversified presence in the Bohai
Economic Rim, Yangtze River Delta, and Central Western Region,
reducing its exposure to uncertainties inherent in local policies
and local economies while providing room to scale up. Fitch
expects local demand to continue to be strong and its mass-market
strategy to work well in first- and second-tier cities. CIFI had
around 86% of its land bank in first- and second-tier cities as of
June 2013.
Slower Deleveraging: Net debt/adjusted inventory increased to
around 36% at end-1H13 from 30% at end-2012, although this level
of leverage remains moderate compared with that of its peers.
Nonetheless, the company's high growth target, together with its
issue of offshore bonds in 2013, may limit its ability to
deleverage.
Limited EBITDA Margin: Given its high sales turnover business
model, Fitch expects the company to achieve EBITDA margins in the
high teens over the next two to three years, compared with 20%-25%
in 2009, 2010, and 2011.
RATING SENSITIVITIES
Positive: Future developments that may, individually or
collectively, lead to positive rating
action include:
-- Sustaining annual contracted sales above CNY15bn (2013
sales: CNY15.3bn)
-- Maintaining the current strategy of high cash flow turnover,
such that contracted sales/total debt is sustained at over
1.3x
-- EBITDA margin over 18% on a sustained basis (1H13: 19%)
-- Net debt/adjusted inventory falling below 35% on a sustained
basis
Negative: Future developments that may, individually or
collectively, lead to negative rating
action include:
-- Failure to meet the above guidelines over the next 12-18
months, which would lead to the Outlook being revised to
Stable
EVERGRANDE REAL: Moody's Says Investment No Impact on 'B1' CFR
--------------------------------------------------------------
Moody's Investors Service says that Evergrande Real Estate Group
Ltd's investment in Huaxia Bank (unrated) is credit negative, but
will have no immediate impact on its B1 corporate family rating
and B2 senior unsecured debt rating.
The ratings outlook remains stable.
Evergrande announced on 24 January 2014 that it had acquired an
aggregate of 402,695,498 Huaxia shares for a total consideration
of about RMB3.3 billion in the open market.
The purchase represents approximately 4.522% of the total issued
share capital of Huaxia Bank. Evergrande has become one of the top
five shareholders after the transaction.
"The investment will reduce Evergrande's liquidity buffer and
increase its investment risk, but the impact will be manageable
given the small size of the acquisition," says Franco Leung, a
Moody's Assistant Vice President and Analyst.
The scale of the investment is small, representing about 1.2% of
Evergrande's total assets of RMB275 billion as of end-June 2013.
The company achieved contracted sales of about RMB100.4 billion in
FY2013, an 8.8% increase year-on-year and marginally above its
full-year target of RMB100 billion.
Moody's estimates that Evergrande had more than RMB50 billion in
cash-on-hand at end-2013 -- compared with about RMB42 billion at
end-June 2013 - driven by its sales growth.
In Moody's view, the company has sufficient resources to fund this
investment. However, this transaction will reduce Evergrande's
liquidity buffer as its outstanding land and construction payment
requirements have materially increased as a result of its business
expansion.
"For now, we do not see much benefits of business synergies
resulting from such an acquisition," says Leung.
Moody's believes that the investment has little strategic value
given its small representation.
The company will not be involved in the operations of the bank.
Although Evergrande could form potential business alliances with
the bank to provide mortgage financing to its customers, the
benefits will be small.
However, any increase in shareholding to a material level could
attract more strategic benefits. Moody's will continue to monitor
the size of its shareholding and assess the impact on the
company's liquidity, investment risks and strategic value.
Evergrande has increased its investments in non-property
businesses in recent years, including bottled water, recreation
and sports businesses. However, these investments are small,
relative to its property operations.
The B1 corporate family rating reflects Evergrande's strong market
position as one of the top five property developers in China in
terms of contracted sales and the size of its land bank. Moreover,
the rating reflects the company's significant scale of coverage
across 140 cities in China.
The rating also takes into account Evergrande's ability to manage
its development operations through business cycles with low land
costs, economies of scale, and its adequate liquidity position.
On the other hand, its rating is constrained by the high business
and financial risks associated with Evergrande's strategy to
pursue rapid debt-funded growth as well as its lower profit
margins, when compared with its domestic peers, which are a result
of its focus on China's lower-tier cities.
The principal methodology used in this rating was the Global
Homebuilding Industry published in March 2009.
Evergrande Real Estate Group Limited is one of the major
residential developers in China, with a standardized operating
model. Founded in 1996 in Guangzhou, the company has rapidly
expanded its business across the country over the past few years.
At end-June 2013, it had a land bank of 145 million square meters
in gross floor area across 140 cities in China.
EVERGRANDE REAL: S&P Puts 'BB' CCR on CreditWatch Negative
----------------------------------------------------------
Standard & Poor's Ratings Services said that it had placed its
'BB' long-term corporate credit rating and 'cnBBB-' long-term
Greater China regional scale rating on Evergrande Real Estate
Group Ltd. on CreditWatch with negative implications. S&P also
placed its 'BB-' long-term issue rating and 'cnBB+' long-term
Greater China regional scale rating on the company's outstanding
senior unsecured notes on CreditWatch with negative implications.
Evergrande is a China-based property developer.
"We placed the ratings on CreditWatch because Evergrande's
financial strength will likely weaken more than we earlier
expected under our base-case scenario for the rating," said
Standard & Poor's credit analyst Matthew Kong. "The likely
deterioration follows the company's recent acquisition of shares
in China's Huaxia Bank and large land acquisitions in recent
months."
Evergrande will become the fifth-largest shareholder of Huaxia
after acquiring about 4.5% of the bank's total share capital
through the secondary market for Chinese renminbi
(RMB) 3.3 billion. The company used internal resources to settle
the share purchases of Huaxia. Huaxia is a commercial bank listed
on the Shanghai stock exchange.
Recent large acquisitions may push Evergrande's leverage beyond
S&P's threshold for a downgrade. S&P could lower the rating if
the debt-to-EBITDA ratio reaches more than 5x. The company's
EBITDA interest coverage is already lower than S&P's downgrade
trigger of no less than 3x.
S&P estimates Evergrande spent about RMB35 billion in cash on land
acquisitions in 2013, higher than our expectation of
RMB28 billion. The aggressive land acquisitions resulted from the
company's expansion appetite and strategic shift to much larger
cities. As of the end of June 30, 2013, total debt was
RMB82 billion (including RMB6 billion in perpetual bonds). S&P
believes total debt may have increased to more than RMB100 billion
by end of 2013.
In S&P's view, Evergrande's business diversification strategy has
yet to yield significant benefits and is still untested. The
acquisitions and businesses could either increase the company's
debt or reduce its liquidity buffer. Evergrande has made diverse
investments and acquisitions across industries, including sports,
mineral water, and banking.
S&P aims to resolve the CreditWatch within the next three months.
To resolve the CreditWatch, S&P will review the likely impact of
the acquisition of Huaxia and the recent large number of land
acquisitions on Evergrande's leverage and cash flows, particularly
its EBITDA interest coverage.
Moreover, S&P will continue to discuss with Evergrande's
management its business strategy, the company's long-term growth
appetite, and the financial policies relating to such growth.
FUTURE LAND: Fitch Affirms Issuer Default Ratings at 'B+'
---------------------------------------------------------
Fitch Ratings has affirmed China-based Future Land Development
Holdings Limited's (Future Land) Long-Term Foreign- and Local-
Currency Issuer Default Ratings (IDR) at 'B+'. The Outlook is
Stable. The agency has also affirmed the company's senior
unsecured rating at 'B+' and recovery rating at 'RR4'.
Future Land's overall performance in 2013 was consistent with
Fitch's estimates. While its leverage rose slightly, its
contracted sales remained solid. Structural subordination remains
the major constraint on its ratings. Fitch expects the company's
overall credit profile to be stable in the next 12 months.
Significant Structural Subordination: Future Land's cash flow is
significantly weakened by the fact that over 80% of its contracted
sales in 2013 were generated by its 54%-owned subsidiary Jiangsu
Future Land (JFL), and that 63% of Future Land's land bank at mid-
2013 was owned by JFL. The presence of the significant minority
interest in JFL restricts Future Land's access to the cash flow of
JFL.
Limited Geographical Diversification: Over 95% of its 13.7 million
square metre land bank at mid-2013 and over 85% of its CNY7.6bn of
contracted sales in 1H13 were in the Yangtze River Delta and
Jiangsu Province, exposing the company to uncertainties of local
policies and the local economy. Local demand also limits its
ability to expand its business scale to compete effectively with
rivals that tap broader, nationwide demand.
Substantial Land Acquisition: Future Land in1H13 added
substantially to its land bank (excluding land purchases by JFL),
but contracted sales weakened to CNY7.6bn because its project
launches were concentrated in 2H13. As a result, this raised its
net debt/adjusted inventory rose to 42% at mid-2013 from 22% at
end-2012. However, contracted sales in 2H13 improved
substantially to CNY13bn and Fitch expects its leverage to have
fallen back below 40% at end-2013.
Fast Sales Turnover: Future Land's business profile is supported
by its rapid sales turnover, which is reflected in the estimated
contracted sales/total debt ratio of 1.5x at end-2013. The
company standardizes its products and targets the mass market, in
particular first-time home buyers and homeowners looking to
upgrade.
Strong Market Position: Its strong market position in the Yangtze
River Delta gives the company insight into the local markets and
helps it build relationships with local governments, which serve
to facilitate its development activity in the region. This should
also provide more choices of land acquisition and a stronger brand
name in the local areas.
RATING SENSITIVITIES
Negative: Future developments that may, individually or
collectively, lead to negative rating action include:
-- A significant decrease in the company's contracted sales,
excluding JFL, in 2014 from the CNY3.5bn achieved in 2013
-- A significant decrease in the contracted sales/ total debt
ratio to below 1.0x at the holding company level on a
sustained basis
-- Consolidated net debt/ adjusted inventory rising above
45% on a sustained basis
Positive: No positive rating action is expected over the next 12
months. However, positive rating action may be considered upon
-- A substantial increase in the scale of the company's
business, excluding JFL, with annual contracted sales
exceeding CNY10bn
-- Unrestricted access to JFL's cash flows
LDK SOLAR: Noteholders Extend Forbearance Pact Until Feb. 13
------------------------------------------------------------
LDK Solar Co., Ltd., has entered into a new 21-day forbearance
arrangement with holders of a majority in aggregate principal
amount of its US$-Settled 10 percent Senior Notes due 2014. The
new forbearance arrangement, which expires on Feb. 13, 2014,
relates to the interest payment due under the Notes on Aug. 28,
2013. That interest payment is still unpaid. It is LDK Solar's
intention to find a consensual solution to its obligations under
the Notes as soon as possible and LDK Solar remains hopeful that
it will be able to achieve that goal.
As reported previously, LDK Solar has engaged Jefferies LLC as a
financial advisor for strategic advice in connection with the
Notes and LDK Solar's other offshore obligations. Holders of LDK
Solar's offshore debt obligations may contact Augusto King at
aking@Jefferies.com, or Steven Strom at sstrom@Jefferies.com,
Lyndon Norley at lyndon.norley@Jefferies.com, or Richard Klein at
rklein@Jefferies.com with any questions.
Sidley Austin is acting as counsel to LDK Solar, led by Thomas
Albrecht at talbrecht@sidley.com, and Timothy Li at
htli@sidley.com. LDK Solar understands that Ropes & Gray is
acting as counsel to a group of noteholders, led by Daniel
Anderson (daniel.anderson@ropesgray.com) and Paul Boltz
(paul.boltz@ropesgray.com). LDK Solar also understands that
Houlihan Lokey has been engaged as financial advisor to that same
group of noteholders; holders of the Notes may contact Brandon
Gale at bgale@hl.com with any questions.
About LDK Solar
LDK Solar Co., Ltd. -- http://www.ldksolar.com-- based in Hi-
Tech Industrial Park, Xinyu City, Jiangxi Province, People's
Republic of China, is a vertically integrated manufacturer of
photovoltaic products, including high-quality and low-cost
polysilicon, solar wafers, cells, modules, systems, power
projects and solutions.
LDK Solar was incorporated in the Cayman Islands on May 1, 2006,
by LDK New Energy, a British Virgin Islands company wholly owned
by Xiaofeng Peng, LDK's founder, chairman and chief executive
officer, to acquire all of the equity interests in Jiangxi LDK
Solar from Suzhou Liouxin Industry Co., Ltd., and Liouxin
Industrial Limited.
LDK Solar Co disclosed a net loss of $1.05 billion on $862.88
million of net sales for the year ended Dec. 31, 2012, as compared
with a net loss of $608.95 million on $2.15 billion of net sales
for the year ended Dec. 31, 2011.
KPMG, in Hong Kong, China, issued a "going concern" qualification
on the consolidated financial statements for the year ended
Dec. 31, 2012. The independent auditors noted that the Group has
a net working capital deficit and a deficit in total equity as of
Dec. 31, 2012, and is restricted from incurring additional
indebtedness as it has not met a financial covenant ratio as
defined in the indenture governing the RMB-denominated US$-settled
senior notes. These conditions raise substantial doubt about the
Group's ability to continue as a going concern.
XINYUAN REAL: Consent Solicitation Won't Affect Fitch's B+ Rating
-----------------------------------------------------------------
Fitch Ratings says ratings on Xinyuan Real Estate Co., Ltd
(Xinyuan; B+/Stable) and its bonds due 2018 will not be impacted
even if the proposed amendments in the consent solicitation
announced on Jan. 27, 2014, are adopted.
The purpose of the consent solicitation is to bring the indenture
of the bonds due 2018 into conformity with the terms of the bonds
due 2019. Major proposed amendments of the indenture include
raising the cap on the amount and adding categories of permitted
indebtedness and permitted subsidiary indebtedness; adding more
categories of permitted investments; and waiving the fairness
opinion requirement for transactions with significant shareholder
TPG Capital.
The proposed amendments will loosen the existing indentures on the
bonds due 2018, but the changes are not material, especially given
the fact that the bonds due 2019 already feature the looser
indentures. If the proposed indenture changes are adopted, Fitch
expects Xinyuan to have greater investment flexibility to increase
its leverage, which will improve its business scale and provide it
more opportunities to develop projects with other developers and
investors.
=========
I N D I A
=========
AARON HELMETS: ICRA Reaffirms B- Rating on INR6.43cr Loans
----------------------------------------------------------
ICRA has reaffirmed '[ICRA]B-' rating to the INR6.43 crore fund
based limits of Aaron Helmets Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based limits 6.43 [ICRA]B- reaffirmed
The rating reaffirmation takes into account the modest scale of
AHPL's operation in a highly fragmented and competitive industry
and the company's weak financial risk profile marked by net loss,
stretched liquidity position and weak debt coverage indicators.
The rating is further constrained by volatility associated with
raw material prices. The rating, however, favorably factors in the
vast experience of the promoters of AHPL, tax benefits available
to the company, comfort to cash flows arising from the moratorium
of one year provided on term loan repayment and interest and
higher growth potential of the helmet and two-wheeler accessories
industry. Going forward, AHPL's ability to increase its scale of
operation in a highly fragmented and competitive industry with an
improvement in the overall financial risk profile is the key
rating sensitivity.
AHPL, incorporated in January 2004 was promoted by Mr Shiv Narayan
Pattnaik and Ms Chitra Bhatnagar. However, in 2006, Mr Sushil
Kumar Agarwal, Mrs Tulika Agarwal and Mrs Manju Agarwal took over
entire shareholding of the company. AHPL is engaged in the
business of manufacturing of helmets and Motor Cycle (MC) side
boxes for two-wheelers. The plant of the company is located at
Uttarakhand and has an installed capacity to produce 6 lakh units
of helmets and accessories per annum. The company manufactures
open and full face helmets and offers more than 20 varieties under
both categories. The helmets of the company are ISO certified and
both helmets and MC boxes are sold under the brand name 'Aaron'.
Recent Results
The company reported a net loss of INR0.60 crores on an operating
income of INR13.61 crores in FY13 as against net profit of INR0.03
crores on an operating income of INR13.20 crores in FY12.
AIR INDIA: Bombay HC Not to Interfere in Salary Cut Issues
----------------------------------------------------------
Swati Deshpande, writing for the Times of India, said the Bombay
high court on January 27 came to the rescue of cash-strapped Air
India, but also dealt it a blow. The HC did not interfere with the
25% reduction in salaries of its pilots and other employees.
However, the judgment also brought to an end the 50 years'
exemption enjoyed by AI from a legal requirement to notify its
employees about any change in service condition, the report says.
According to the report, various employees' unions had dragged the
AI to court HC against its recent policy changes, including hiving
off of departments. The changes, said the pilots and engineers,
had caused "unwarranted and unilateral change in service
conditions". The Indian Commercial Pilot's Association had
challenged the airline's two notifications dated Jan. 22-23, 2013,
which provided for only 75% arrears payable to the pilots till
November 2012.
TOI relates that the pilots said 75% pay was "unacceptable" and
demanded full 100% payment. The notifications issued by the
airline were a move to change the service conditions, the pilots
said, the report relays.
Their lawyers argued that AI could not unilaterally transfer
employees to other departments in its sister concern once an
employment agreement already existed between the airline and
employee unions, according to the report.
A battery of lawyers for AI employees said any change in service
condition required a 'notice of change' to be given to the
employees under section 9-A of the Industrial Disputes Act, so
that the workmen could have their say too, the report notes.
TOI reports that Air India, represented by additional solicitor
general Kevic Setalvad, said the airline was exempted, by a 1960
circular, from issuing any such notice. Besides, AI argued that
the issue about the exemption was pending before the National
Industrial Tribunal. The HC bench of Chief Justice Mohit Shah and
Justice M S Sanklecha, however, held that any changes now would
require a notice to be given to employees and the issue would have
to go before the national industrial tribunal, adds TOI.
Air India Ltd -- http://www.airindia.com/-- transports
passengers throughout India and to more than 40 destinations
throughout the world. Affiliate Air India Express operates as a
low-fare carrier, mainly between India and destinations in the
Middle East, and Air India Cargo provides freight transportation.
The government of India has merged Air India with another state-
controlled carrier, Indian Airlines, which has focused on
domestic routes. The combined airline, part of a new holding
company called National Aviation Company of India, uses the Air
India brand. The new Air India and its affiliates have a fleet
of more than 110 aircraft altogether.
* * *
The Troubled Company Reporter-Asia Pacific, citing the Hindustan
Times, reported on June 19, 2009, that Air India has been
bleeding cash due to excess capacity, lower yield, a drop in
passenger numbers, an increase in fuel prices and the effects of
the global slowdown. Air India had debts of INR42,570 crore and
accumulated losses of INR22,000 crore as of March 31, 2011,
according to livemint.com.
In April 2012, the Union Cabinet approved an operational
turnaround plan through an equity infusion of INR30,000 crore
(US$5.8 billion) over the next eight years.
"The Cabinet Committee on Economic Affairs (CCEA) has approved
the turnaround plan (TAP) and financial restructuring plan (FRP)
of Air India, under which the government will infuse INR30,000
crore into the airline by 2020-21, subject to certain milestones
that AI will have to meet," civil aviation minister Ajit Singh
said.
AMRITMAYA FOODS: ICRA Assigns 'B-' Rating to INR7.5cr Loans
-----------------------------------------------------------
ICRA has assigned a long term rating of '[ICRA]B-' to the INR7.00
crore term loan and INR0.50 crore cash credit facilities of
Amritmaya Foods Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based Limit-
Cash Credit 0.50 [ICRA]B- assigned
Non Fund Based
Limit-Bank
Guarantee 7.00 [ICRA]B- assigned
The assigned rating is constrained by AFPL's small scale of
current operations with limited track record of the promoters in
the dairy business, and weak financial profile characterized by
net losses, highly leveraged capital structure given the high
reliance on external borrowings to fund the ongoing capex against
a small net worth, and stretched liquidity position emanating from
high cash credit utilization. ICRA also takes note of the
susceptibility of milk availability due to the external factors
like weather conditions and outbreak of cattle disease, and the
risk associated with the stabilisation of the plant as per
expected operating parameters. Moreover, establishing its own
brand and penetrating the regional retail market, given the strong
presence of other reputed dairy companies and intense competition
from other unorganised players would remain a challenge.
The rating, however, favorably incorporates the favorable location
of plant which supports easy availability of raw milk from in and
around the Raipur city in Chhattisgarh, favourable demand outlook
for milk products coupled with the planned expansion into value
added products in the near to medium term, which is likely to
result in revenue as well as profitability growth.
Incorporated in 2011, AFPL was promoted by Agarwal family of
Raipur. The company is currently engaged in the selling loose raw
milk and is in the process of setting up a milk processing unit
with an installed capacity of 25,000 liters per day (LPD). The
manufacturing facilities of the company are located at Raipur,
Chhattisgarh.
Recent Results
For 2012-13, AFPL has achieved the operating income of INR0.46
crore with the net loss of INR0.37 crore.
ANC ENTERPRISES: CRISIL Reaffirms 'B' Rating on INR84.8MM Loans
---------------------------------------------------------------
CRISIL's rating on the long-term bank facilities of ANC
Enterprises (ANCE; part of the ANC group) continues to reflect the
ANC group's weak financial risk profile, marked by a modest net
worth, a high gearing, and moderate debt protection metrics.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 75 CRISIL B/Stable (Reaffirmed)
Term Loan 9.8 CRISIL B/Stable (Reaffirmed)
The rating also reflects the group's large working capital
requirements, small scale of operations, high customer
concentration, and susceptibility to cyclicality in the commercial
vehicles industry. These rating weaknesses are partially offset by
the benefits that the ANC group derives from its promoters'
extensive industry experience and its improving operating
efficiencies.
For arriving at the rating, CRISIL has combined the business and
financial risk profiles of ANCE and Sango Auto Forge Pvt Ltd. This
is because these entities, together referred to as the ANC group
herein, are in similar lines of business, and have significant
operational and financial linkages with each other (SAFPL derives
most of its revenues from ANCE) and common promoters.
Outlook: Stable
CRISIL believes that the ANC group will continue to benefit over
the medium term from its promoters' extensive industry experience
and its integrated operations. The outlook may be revised to
'Positive' in case the group's liquidity improve significantly,
most likely driven by sizeable equity infusion or improvement in
its working capital management. Conversely, outlook may be revised
to 'Negative' in case the ANC group registers any decline in its
revenues and profitability or in case the group undertakes any
large, debt-funded capital expenditure (capex) programme, thereby
deteriorating its financial risk profile.
ANCE is involved in machining of components used in the automobile
industry. The firm operates two machining units at Bhosari in Pune
(Maharashtra) with installed monthly capacity of 600 tonnes per
month (tpm). SAFPL, incorporated in 2007, has forging capacity of
350 tpm and caters to 100 per cent of ANCE's forging requirements;
SAFPL generates about 25 per cent of its revenues from unrelated
parties.
ANSHU'S CLOTHING: CARE Cuts Rating on INR9cr Long-Term Loan to D
----------------------------------------------------------------
CARE revises the rating assigned to the bank facilities of Anshu's
Clothing Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 9 CARE D Revised from
Facilities CARE BB
Rating Rationale
The revision in the rating assigned to the bank facilities of
Anshu's Clothing Limited primarily factors in the irregularity in
servicing of its debt obligations.
Incorporated as a Private Limited company in 1995, Anshu's
Clothing Limited is engaged in retailing of garments especially
women ethnic/casual wear and kid wear segment. The current
promoters, Mr Ravi Bhandari & Mrs Rekha Bahndari took over the
management of the company in 2004 and started with readymade
garment retailing. Further, in October 2012, ACL got listed on BSE
SME Exchange. The company markets its women wear under its
boutique brand named "Anshu's Designer Studio" (having 14 stores
as on Dec. 31, 2012) and kid wear under brand "LOLIPOP" (having 86
stores as on December 31, 2012). ACL has applied for registered
trademark at Trade Marks Registry (Ahmedabad), however except for
"Anshu's Designer Studio", the company is yet to received
registered trademarks for "LOLIPOP" & "Kalamkari". During FY13,
ACL came up with its new brand named "Kalamkari" (having seven
stores as on Dec. 31, 2012) which are targeted to middle and
higher class women segment. ACL operates through exclusive brand
outlets (EBO) for the aforementioned segments, which are mainly
Franchisee Owned.
BALMUKUND CEMENT: CRISIL Reaffirms 'B+' Rating on INR348.3M Loans
-----------------------------------------------------------------
CRISIL's ratings on the bank facilities of Balmukund Cement and
Roofings Ltd continue to reflect the limited experience of BCRL's
promoter in the roofing segment of the construction industry,
susceptibility to any adverse regulatory changes in the asbestos
sheet industry because of the environmental implications of the
usage of the product, and susceptibility of operating margin to
competitive pressure. The ratings also factor in BCRL's leveraged
capital structure and weak debt protection measures. These rating
weaknesses are partially offset by BCRL's moderate net worth, and
improving business risk profile with its plant fully operational
and the funding support it receives from its group entities.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 95 CRISIL B+/Stable (Reaffirmed)
Letter of Credit 120 CRISIL A4 (Reaffirmed)
Proposed Long Term
Bank Loan Facility 9.7 CRISIL B+/Stable (Reaffirmed)
Term Loan 243.6 CRISIL B+/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that BCRL's credit risk profile will remain
constrained over the near term, because of leveraged capital
structure and weak debt protection measures. The outlook may be
revised to 'Positive' if the company's scale of operations and
profitability increase significantly, or if there is substantial
equity infusion, thereby improving its capital structure and
liquidity. Conversely, the outlook may be revised to 'Negative' if
increase in BCRL's accruals is lower than expected or its
liquidity is constrained by larger-than-expected working capital
requirements or it undertakes any unanticipated debt-funded
capital expenditure (capex) programme.
Update
BCRL's plant commenced operations in February 2013 later than
CRISIL's expectations, as a result of which the turnover was low
at around INR107 million and net losses on account of high
interest and depreciation expenses. The sales have picked up in
2013-14 (refers to financial year, April 1 to March 31) and the
company is expected to register a topline in excess of INR500
million and positive cash accruals. Due to working capital
intensive operations, BCRL's liquidity has been stretched with
average bank limit utilisation at 96 per cent for the 12 months
ended November 2013. While the company is expected to generate
moderate cash accruals in 2013-14 and 2014-15, the large term debt
repayment obligation of INR37 million during the period and
incremental working capital requirements, shall restrain sharp
improvement in liquidity.
BCRL has moderate net worth of INR170 million as on March 31, 2013
primarily due to infusion of equity by promoters to install the
plant. However BCRL's financial risk profile constrained by high
gearing of close to 3 times as on March 31, 2013 which is expected
to remain weak over the near term. BCRL does not have any capex
plans and financial support from group entities is expected to
sustain its financial risk profile.
For 2012-13, BCFL reported a net loss of INR44.4 million on net
sales of INR106.9 million.
BCRL is promoted by Mr. Nawal Kumar Kanodia. The company has set
up a fibre cement sheet (also known as asbestos sheet) plant at
Purulia, West Bengal, with capacity of 118,000 tonnes.
CHADHA INDUSTRIES: ICRA Assigns B- Rating to INR6cr Loan
--------------------------------------------------------
ICRA has assigned a long term rating of '[ICRA]B-' to the INR6.00
crore bank facilities of Chadha Industries.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit Facility 6.00 [ICRA]B-
The rating assigned takes into account the stretched liquidity
position and weak capital structure of the firm due to highly
working capital intensive nature of operations. The rating is
constrained by the moderate scale of operations of the firm with
thin operating margins due to low value added nature of the
business which is marked by presence of large number of
unorganized players and increasing competition from cost effective
Chinese products. However, ICRA takes into account the long
standing experience of the proprietor spanning over two decades in
the bicycle component manufacturing business. Also, it derives
geographical advantage from being present in the bicycle cluster
of Ludhiana that ensures availability of raw materials at
competitive prices and ascertains logistical proximity to
customers. Going forward, the ability of the firm to increase its
scale of operations while keeping its working capital borrowings
lower, in order to improve its liquidity position would remain key
rating sensitivities.
Incorporated in 1990 as a proprietorship concern, CI is promoted
by Mr. Sanjeev Chadha. The firm started its operations with the
manufacture of bicycle components that were supplied primarily to
Hero Cycles Limited. It gradually expanded its capacity and
forayed into supplying components to export houses that in turn
supplied these components to the bicycle manufacturing clusters in
East Africa and South America. Presently CI majorly deals in
supplying bicycle components to foreign manufacturers located in
Africa and Europe through export houses, besides doing job work to
improve utilization levels for its forging machines. CI uses the
manufacturing facility spread over 300 sq yards at Shimlapuri,
Ludhaina for forging and other machining processes.
Recent Results
During 2012-13, the operating income of CI grew by 40.3% to reach
INR18.7 Crore as compared to INR13. 3 Crore during 2011-12.
CHALLANI JEWELLERY: CRISIL Rates INR80 Million Loan at 'B+'
----------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long term
bank facility of Challani Jewellery Mart.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 80 CRISIL B+/Stable
The rating reflects CJM's limited track record and modest scale of
operations. The ratings also factors in CJM's exposure to risks
arising from intense competition in the retail jewellery industry.
These rating weaknesses are partially offset by extensive
experience of CJM's partners in the retail jewellery industry.
Outlook: Stable
CRISIL believes that CJM will maintain its business risk profile
over the medium term, supported by its partners' extensive
experience in the retail jewellery industry. The outlook may be
revised to 'Positive' in case of significant and sustainable
growth in revenues and margins while maintaining its capital
structure. Conversely, the outlook may be revised to 'Negative' in
case the growth in accruals is significantly below expectations,
or if it faces a significant lengthening of its working capital
cycle.
CJM, set up in 2012 as a partnership firm of Mr. R J Jayanthi Lal
Challani, Mr. J J Goutham Chand and Mr. J J Sripal, is engaged in
the business of retail jewellery of gold and diamond ornaments.
The firm operates a single showroom in Raghaviah road, Chennai.
The operations of the firm began in October 2012.
For 2012-13 (refers to financial year, April 1 to March 31), CJM
reported a profit after tax (PAT) of INR0.3 million on net sales
of INR11.8 million.
DHARTI COTTON: CARE Reaffirms 'B' Rating on INR8cr LT Loans
-----------------------------------------------------------
CARE reaffirms the rating assigned to the bank facilities of
Dharti Cotton Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 8 CARE B Reaffirmed
Facilities
Rating Rationale
The rating assigned to the bank facilities of Dharti Cotton
Private Limited continues to be constrained on account of the weak
financial risk profile marked by thin profit margins, leveraged
capital structure and weak debt coverage indicators. The rating is
further constrained by the volatility associated with raw material
(cotton) prices, impact of regulatory changes in the government
policy for cotton and presence in the highly competitive and
fragmented cotton ginning business with limited value addition.
The rating also remained constrained due to decline in cash
accruals and elongation of working capital cycle during FY13
(refers to the period April 1 to March 31).
The rating, however, continues to draw strength from the long
track of the promoters in the cotton ginning industry and
proximity to the cotton producing region of Gujarat.
DCPL's ability to improve its overall financial risk profile by
moving up in the value chain and thereby improving profit margins,
capital structure along with better working capital management
remain the key rating sensitivities.
DCPL was incorporated in 2009 at Jasdan near Rajkot, Gujarat. The
company was promoted by Mr Mansukhbhai Boghara with three other
directors. Later in October 2010, the company was sold off to the
Kakadiya family, who is involved in the same line of business
through their other business entity named Madhav Ginning &
Pressing Pvt Ltd. DCPL is engaged in the business of cotton
ginning & pressing to produce cotton bales and cotton seeds. The
company also trades in commodities such as raw cottonseed and
cotton bales which constitute a minor portion of their total
revenue. The product is mainly used in the manufacturing of cotton
yarn in the textile industry. DCPL has an installed capacity to
produce 42,000 cotton bales and 12,870 Metric Tonnes Per Annum
(MTPA) for cotton seeds as on March 31, 2013. The finished product
is either sold directly or through intermediaries like brokers,
agents and distributors in the domestic market.
During FY13, DCPL reported a total operating income of INR53.13
crore (FY12: INR53.99 crore) and a PAT of INR0.06 crore (FY12:
INR0.07 crore).
As per the provisional results of 8MFY14, DCPL achieved a turnover
of INR48.92 crore and a PBDT of INR0.21 crore.
ENN AAR: CRISIL Downgrades Rating on INR59 Million Loan to 'B-'
---------------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facilities
of Enn Aar Modern Rice Mill to 'CRISIL B-/Stable' from 'CRISIL
B/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 30 CRISIL B-/Stable (Downgraded
from 'CRISIL B/Stable')
Term Loan 29 CRISIL B-/Stable (Downgraded
from 'CRISIL B/Stable')
The rating downgrade reflects sharp deterioration in EAMRM's
financial risk profile stemming from large losses in 2012-13.
Owing to prolonged riots in Assam in 2012-13, the commencement of
production at the company's maiden plant was delayed leading to a
large loss of INR18 million in 2012-13. Consequently, its
company's net worth reduced to about INR13 million while gearing
deteriorated to 2.3 times as on March 31, 2013 from 0.8 times in
the preceding year. Though the company's performance in 2013-14
has improved, CRISIL believes its financial risk profile will take
time to recover, given the large losses in the past.
The rating continues to reflect EAMRM's weak financial risk
profile and susceptibility to adverse regulatory changes,
volatility in raw material prices, and vagaries of monsoon and
exposure to risks arising out of geographical concentration in
revenues. These rating weaknesses are partially offset by the
stable demand for rice and its steady offtake by the government.
Outlook: Stable
CRISIL believes that EAMRM will benefit from the healthy prospects
of the rice processing industry over the medium term; however, its
financial risk profile will remain constrained, given the reduced
net worth. The outlook may be revised to 'Positive' if company
reports higher than expected accretion to reserves, or substantial
equity infusion, leading to an improvement in its capital
structure. Conversely, the outlook may be revised to 'Negative'
because of lower-than-expected capacity utilisation, stretch in
working capital management, or significant debt-funded capital
expenditure plan resulting in deterioration in overall financial
risk profile.
EAMRM is a partnership firm set up in 2011 by Guwahati (Assam)-
based Mr. Sumit Sovasaria and his wife Mrs. Shilpa Sovasaria. The
firm processes non-basmati raw and parboiled rice. Its
manufacturing facility has commenced commercial operations in July
2012. The daily operations of the firm are looked after by the
managing partner Mr. Sumit Sovasaria.
EAMRM reported a net loss of INR18 million on net sales of INR10
million for 2012-13 (refers to financial year, April 1 to
March 31).
ESWARI EXPORTS: ICRA Assigns 'B' Rating to INR2.5cr Loans
---------------------------------------------------------
ICRA has assigned a long-term rating of '[ICRA]B' to INR2.50 crore
fund based limits and a short-term rating of '[ICRA]A4' to INR4.00
crore non-fund based limits of Eswari Exports Private Limited.
ICRA has also assigned ratings of [ICRA]B/[ICRA]A4 to INR3.50
crore unallocated limits of EEPL.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based Limits 2.50 [ICRA]B assigned
Non Fund Based Limits 4.00 [ICRA]A4 assigned
Unallocated Limits 3.50 [ICRA]B/[ICRA]A4 assigned
ICRA's assigned ratings are constrained by weak financial profile
of the company characterized by low profitability with OPBDITA/OI
at 0.60% in FY2013 and weak debt coverage indicators with interest
coverage ratio at 0.25 times, NCA/TD at 7% and TD/OPBDITA at 21.41
times in FY2013. The ratings are also constrained by the large
receivables position with debtor days at 193 days as on 31st
March, 2013 and 157 days as on Dec. 31, 2013, resulting in
stretched liquidity position for the company. ICRA's ratings also
factor in the high customer concentration risk for EEPL with all
the revenues contributed by a single customer and small scale of
operations of the company resulting in limited bargaining power
with suppliers. Further, the ratings are also tempered by
vulnerability of revenues and profits to exchange rate
fluctuations, as the entire revenues of the company are dollar
denominated. The ratings however take comfort from the long
experience of the promoters in trading of porcelain tiles. ICRA
also takes note of EEPL's entry into granite quarry business,
where the company has entered into an agreement with BHP Granites
Private Limited, for operating a granite quarry in Karimnagar
district of Andhra Pradesh for a period of ten years.
Incorporated in the year 2005, EEPL is engaged in trading of
Porcelain tiles. The shareholding of the company is held by Mr. K.
Ravi Kumar, Managing Director and his close relatives. The company
has a single customer based out of United State of America (USA)
namely "Graniti Vicentia LLC," which is promoted by Mr. Srinivasa
Rao, younger brother of Mr. K Ravi Kumar. The traded goods are
sourced from countries such as Italy, China and USA among others.
The company procures the traded goods either through letter of
credit or upfront cash payment.
Recent Results
In FY2013, EEPL reported an operating income of INR15.68 crore
with OPBDITA of INR0.09 crore and PAT of INR0.13 crores.
GEETANJALI AGRO: ICRA Suspends 'B' Rating on INR13cr Loan
---------------------------------------------------------
ICRA has suspended '[ICRA]B' rating assigned to the INR13.00 crore
line of credit of Geetanjali Agro Industries. 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.
GORA MAL: ICRA Cuts Rating on INR3.35cr Loans to 'B+'
-----------------------------------------------------
ICRA has downgraded the rating assigned to the INR3.35 crore long-
term fund-based limits of Gora Mal Hari Ram Limited to '[ICRA]B+'
from '[ICRA]BB+'. ICRA has also downgraded the rating assigned to
the INR5 crore short-term non-fund based bank facilities (reduced
from INR7.5 crore) of the company to '[ICRA]A4' from '[ICRA]A4+'.
The ratings for INR5 crore unallocated limits (enhanced from
INR2.5 crore) have also been revised to [ICRA]B+/[ICRA]A4 from
[ICRA]BB+ (Stable)/[ICRA]A4+.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-Based, Long- 3.35 Revised to [ICRA]B+ from
Term Limits [ICRA]BB+ (Stable)
Non Fund-Based 5.00 Revised to [ICRA]A4 from
Limits [ICRA]A4+
Unallocated Limits 5.00 Revised to [ICRA]B+/[ICRA]A4
from [ICRA]BB+
(Stable)/[ICRA]A4+
The revision in the ratings reflects the weak performance of the
company in FY13 and YTD FY14 on account of the competitive
environment leading to fall in sales volumes and losses at
operational and net levels. The revision in the ratings also
factors in the significant deterioration in return and debt
protection indicators of the company. The ratings are also
constrained by the small size of operations; continued downward
pressure on the profitability of the company (as reflected in net
losses during past three years) due to inability to pass on high
raw material prices and increasing other costs, in a scenario of
falling volumes. The ratings, however, continue to factor in the
long track record of the company in the domestic detergents and
washing soaps business and its moderately strong brand name
("555").Going forward, the ability of the company to increase its
sales volumes leading to material improvement in profitability and
debt protection metrics will be the key rating sensitivity.
GMHR was set-up as a sole proprietorship concern in Lahore (now in
Pakistan) in 1914 by Late Shri Hari Ram to manufacture and sell
washing soap, detergent powder and detergent cake. The sole
proprietorship concern was converted to partnership firm and then
private limited company (in 1985) and public limited company (in
1988). Meanwhile, the company diversified into producing cleaning
powder, dish wash bar and toilet soap. The company has operating
units in Delhi, Neemrana (Rajasthan), and Haridwar (Uttaranchal).
The company has closed its Devla (Uttar Pradesh) based unit in
2011-12.
In 2012-13, GMHR reported a net loss of INR1.72 crore on an
operating income of INR40.68 crore against net loss of INR0.19
crore on an operating income of INR44.15 crore in 2011-12.
GREEN GOLD: CRISIL Assigns 'B-' Rating to INR17 Million Loan
------------------------------------------------------------
CRISIL has assigned its 'CRISIL B-/Stable/CRISIL A4' ratings to
the bank facilities of Green Gold Tree Farmers Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 17 CRISIL B-/Stable (Assigned)
Letter of Credit 40 CRISIL A4 (Assigned)
The ratings reflect GGTFPL's weak financial risk profile, marked
by high gearing and weak debt protection metrics, and its small
scale of operations in the highly fragmented timber industry.
These rating weaknesses are partially offset by the extensive
industry experience of the company's promoters.
Outlook: Stable
CRISIL believes GGTFPL will continue to benefit over the medium
term from its promoters' extensive industry experience. The
outlook may be revised to 'Positive' if the company's liquidity
improves, either by capital infusion or higher-than-expected cash
accruals. A significant increase in its scale of operations along
with a sustained improvement in its profitability may also result
in a 'Positive' outlook. Conversely, the outlook may be revised to
'Negative' if GGTFPL's liquidity deteriorates further, most likely
due to increased working capital requirements or large debt-funded
capital expenditure.
GGTFPL was incorporated in 1986 in Dehradun (Uttarakhand),
promoted by the Manglik family. The company manufactures wooden
articles such as doors, windows, furniture, packaging pallets etc.
GTL LIMITED: CARE Lowers Rating on INR5.40BB Loans to 'D'
---------------------------------------------------------
CARE revises the ratings assigned to the bank facilities and
instrument of GTL Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 100 CARE D Revised
from CARE C
Short-term Bank
Facilities 3,900 CARE D Revised
from CARE A4
Non-Convertible
Debentures (NCD) 1,400 CARE D Revised
from CARE C
Ratings Rationale
The revision in the rating assigned to the bank facilities &
instruments of GTL Limited is on account of the delay in servicing
of rated debt obligations due to the liquidity pressure faced by
the company as a result of high receivables. The rating also
account for the company's admittance to Corporate Debt
Restructuring (CDR).
Incorporated in 1985, GTL Limited is engaged in providing network-
related solutions to various telecom service providers and
technology providers (OEMs), globally. The company provides
network-related solutions to the telecom carriers through its
Network Services Division (NSD) covering the entire network life
cycle, i.e. from network planning and designing, rollout of
network and application management and operations & maintenance.
The company has also diversified into power management and its
services in the segment include rollout of Transmission and
Distribution networks, power distribution franchise and smart
grids.
GTL reported a total income of 2,673.82 crore and a Net Loss of
INR554.47 crore in FY13 (refers to the period April 1 to
March 31) as compared to a total income of INR1,904.96 crore and a
Net Loss of INR458.84 crore in FY12 (refers to the period
July 1, 2011 to March 31, 2012) on a consolidated basis.
JPM EXPORTS: ICRA Suspends B+ Rating on INR0.56cr Loans
-------------------------------------------------------
ICRA has suspended '[ICRA]B+' rating assigned to the INR0.3647
crore term loan and INR0.20 crore, non-fund based, working capital
facility, and '[ICRA]A4' rating to the INR12.00 crore, short term,
fund based, working capital facility of JPM Exports 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.
MAA BHAGWATI: CRISIL Reaffirms 'B+' Ratings on INR114MM Loans
-------------------------------------------------------------
CRISIL's rating on the bank facilities of Maa Bhagwati Rice Mill
continues to reflect MBRM's financial risk profile constrained by
high gearing, weak debt protection metrics and low networth and
risk related to volatility in raw material prices with dependence
on the monsoons. These rating weaknesses are partially offset by
MBRM's moderately efficient working capital management.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 105 CRISIL B+/Stable (Reaffirmed)
Rupee Term Loan 9 CRISIL B+/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that MBRM's business risk profile will remain
constrained by its small scale of operations over the medium term.
The outlook may be revised to 'Positive' if MBRM reports sizeable
growth in its scale of operations and cash accruals, or a
significant improvement in its capital structure and liquidity
driven by an equity infusion. Conversely, the outlook may be
revised to 'Negative' if the firm undertakes any large, debt-
funded capital expenditure (capex) programme leading to
deterioration in its capital structure, or reports lower-than-
expected revenue and profitability resulting in low cash accruals,
thereby constraining its liquidity.
MBRM was set up as a partnership firm by Mr. Pawan Kumar Goyal and
Mr. Joginder Pal in 2006. The firm mills and processes basmati
rice. MBRM has a manufacturing facility in Cheeka (Haryana).
MBRM reported profit before tax (PBT) of INR2.4 million on net
sales of INR400 million for 2012-13 (refers to financial year,
April 1 to March 31), vis-a-vis PBT of INR2.2 million on net sales
of INR245.3 million in 2011-12.
MAHATMA SUGAR: CRISIL Cuts Ratings on INR1.25BB Loans to 'D'
------------------------------------------------------------
CRISIL has downgraded its ratings on the bank facilities of
Mahatma Sugar & Power Ltd to 'CRISIL D/CRISIL D' from 'CRISIL
B+/Stable/CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 10 CRISIL D (Downgraded from
'CRISIL A4')
Cash Credit 401.6 CRISIL D (Downgraded
from 'CRISIL B+/Stable')
Proposed Long Term 158.9 CRISIL D (Downgraded
Bank Loan Facility from 'CRISIL B+/Stable')
Term Loan 682.2 CRISIL D (Downgraded from
'CRISIL B+/Stable')
The rating downgrade is driven by MSPL's weak liquidity, causing
delays in meeting its term debt obligations over the past three
months.
MSPL's net cash accruals were lower-than-expected at INR10 million
in 2012-13 (refers to financial year, April 1 to
March 31) because of delays in setting up its power plant
following project cost overruns. With the commencement of its
power plant, the company's cash accruals could improve in 2013-14.
However, MSPL's net cash accruals could be closely matched with
its debt obligations of INR75 million, thereby constraining the
company's overall liquidity.
MSPL's liquidity has been adversely impacted by cost overruns of
the power plant project vis-a-vis lower-than-expected operating
profitability. The company delayed setting up the power plant
because of cost overruns. The project cost of INR1134 million
(both for the expansion and the power plant) has escalated to
INR1330 million as of November 2013.
MSPL also has a below-average financial risk profile, marked by a
leveraged capital structure and below-average debt protection
metrics. Moreover, the company operates in the highly regulated
sugar industry and has limited integration of operations. However,
MSPL benefits from the extensive industry experience of its
promoters.
MSPL was incorporated in Nagpur (Maharashtra) in 2004. The company
manufactures sugar and operates a power plant. MSPL is controlled
by the Purti group.
MARUDHAR POLYSACKS: CRISIL Cuts Ratings on INR55MM Loans to 'B-'
----------------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facilities
of Marudhar Polysacks Pvt Ltd to 'CRISIL B-/Stable' from 'CRISIL
B/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 20 CRISIL B-/Stable (Downgraded
from 'CRISIL B/Stable')
Term Loan 35 CRISIL B-/Stable (Downgraded
from 'CRISIL B/Stable')
The rating downgrade reflects CRISIL's belief that MPPL's
liquidity will be weak driven by sizeable working capital
requirements, due to the higher-than-expected increase in its
scale of operations and large debt-funded capital expenditure
(capex) planned over the medium term. The incremental working
capital requirements will increase MPPL's reliance on its bank
lines, which are highly utilised at 95 per cent presently.
Additionally, the flexibility between the company's net cash
accruals and debt obligations could decline over the medium term,
driven by increased debt due to a planned capital expenditure
(capex) programme, to increase its capacity.
The rating reflects MPPL's weak financial risk profile, especially
liquidity, marked by small net worth and high gearing. The rating
also factors in the company's small scale of and limited track
record of operations. These rating weaknesses are partially offset
by the benefits that MPPL derives from the proximity of its
manufacturing unit to key customers.
Outlook: Stable
CRISIL believes that MPPL's liquidity will remain stretched over
the medium term due to incremental working capital requirements
and a large debt-funded capex programme. The outlook may be
revised to 'Positive' if the company increases the scale of its
operations or its profitability, leading to significant cash
accruals along with an improvement in its capital structure. Any
improvement in MPPL's liquidity due to efficient working capital
management could also result in a 'Positive' outlook revision.
Conversely, the outlook may be revised to 'Negative' if MPPL's
financial risk profile, and liquidity, deteriorates, because of
sizeable working capital requirements, or if the company's revenue
or profitability decline resulting in lower-than-expected net cash
accruals.
MPPL was founded in 2011-12 by the Lodha family and is currently
managed by Mr. Sandeep Lodha. The company manufactures woven
sacks, including poly propylene (PP) bags and fabric, used for
packaging in various industries such as cement, food grain, and
sugar. MPPL's manufacturing unit in Jaipur (Rajasthan) began
commercial operations in May 2012.
MPPL reported a loss of INR1.9 million on net sales of INR132.8
million for 2012-13 (refers to financial year, April 1 to
March 31).
ORBIT AVIATION: CARE Assigns 'B+' Rating to INR43.57cr LT Loans
---------------------------------------------------------------
CARE assigns 'CARE B+' rating to the bank facilities of Orbit
Aviation Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 43.57 CARE B+ Assigned
Facilities
Rating Rationale
The ratings assigned to the bank facilities of Orbit Aviation
Private Limited are primarily constrained by its small scale of
operations, leveraged capital structure and large debt-funded
capex. The rating also factors in the exposure to fluctuation in
Aviation Turbine Fuel (ATF) and diesel prices.
The ratings, however, draw comfort from the experienced
management, minimum guarantee revenue agreement for its helicopter
and healthy operating profitability.
Going forward, continuity of minimum guarantee agreement,
improvement in the capital structure and effective management of
ATF and diesel price volatility shall be the key rating
sensitivities.
Orbit Aviation Private Limited incorporated in June 2007 is
engaged in providing chartered flight and public road transport
services. The management of the company comprises Mr Satyajit
Singh Majithia & Mr Gurmehar Singh who looks after the affairs of
chartered flights segment coupled with Mr Mohd Jameel and Mr Mohd
Rafiq who looks after the public road transport segment.
The company is a Non-Scheduled Operator for India and abroad and
it owns two aircrafts (Cessna CJ2+ and Beechcraft Super King Air
B-200) and one helicopter (Bell 429) which are let out on a
charter basis. Additionally, the company also provides passenger
bus services through a fleet of 60 buses (including both standard
and luxury) buses in Punjab.
OAP is a part of Orbit group which includes, Orbit Resorts Private
Limited (ORP) and G Next Media Private Limited (GNM, CARE BB+/ A4+
in December, 2013). ORP owns two 5-star hotels i e Trident and The
Oberoi in Gurgaon (Haryana) and runs the same under operations
management agreement with EIH Limited. GNM is engaged in
television programming & broadcasting and operates three free to
air TV channels in regional language ie 'Punjabi' viz. PTC
Punjabi, PTC Chak De and PTC News.
For FY13 (refers to the period April 1 to March 31), BLL achieved
a total operating income of INR48.06 crore with PBILDT and net
loss of INR19.11 crore and INR0.10 crore respectively. In 8MFY14
(refers to the period April 01 to November 30), the company
achieved a total operating income of INR41.06 crore.
PARAMOUNT RICE: ICRA Reaffirms 'B+' Rating on INR12.58cr Loans
--------------------------------------------------------------
ICRA has reaffirmed a long term rating of '[ICRA]B+' to the
INR12.58 crores (enhanced from INR9.70 crores) fund based bank
facilities of Paramount Rice Private Limited. ICRA has also
assigned a short term rating of '[ICRA]A4' to the INR5.00 crores
fund based facilities of PRPL.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based Limits-
Cash Credit 12.25 [ICRA]B+ reaffirmed
Fund Based Limits-
Term Loan 0.33 [ICRA]B+ reaffirmed
Fund Based Limits-
Packing Credit 5.00 [ICRA]A4 reaffirmed
The assigned rating is constrained high gearing arising out of
substantial debt funding of large working capital requirements.
The rating also takes into account high intensity of competition
in the rice milling industry and agro climatic risks, which can
affect the availability of paddy in adverse weather conditions.
The rating however, favorably takes into account long standing
experience of promoters, good demand supply dynamics in basmati
rice industry and proximity of the mill to major rice growing area
which results in easy availability of paddy.
Recent Results:
PRPL reported a net profit of INR0.53 crores on an operating
income of INR44.92 crores for the year ended March 31, 2013 and a
net profit of INR0.23 crores on an operating income of INR28.14
crores for the year ended March 31, 2012.
Business was established by Jhanwar & Nyati family as a
partnership firm, in the name of Rameshwar Industry. However in
the year 2000 partnership firm was converted into a private
limited company with all the partners as shareholders. PRPL is
engaged in processing and trading of rice. Head office of the
company is located at Chittor road, Bundi Rajasthan. Manufacturing
plant of PRPL is located at Chittor Road Bundi (Rajasthan).
PURNAM: ICRA Assigns 'B' Ratings to INR13.55cr Loans
----------------------------------------------------
ICRA has assigned an '[ICRA]B' rating to the INR12.75 crore term
loan and INR0.80 crore cash credit facilities of Purnam.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based Limit- 12.75 [ICRA]B assigned
Term Loan
Non Fund Based
Limit-Cash Credit 0.80 [ICRA]B assigned
The rating takes into account PM's limited operational track
record with promoters having no prior experience in the healthcare
industry and small scale of current operations due to low level of
occupancy. ICRA notes PM's dependence on external financing from
partners to meet debt obligations due to insufficient internal
cash accruals, as it is in its initial year of operations. The
rating are also constrained by PM's weak financial profile
characterized by cash losses suffered in 2012-13 and in the first
six months of the current fiscal resulting in depressed coverage
indicators and risks pertaining to the withdrawal of capital by
the partners due to its legal status of being a partnership firm.
ICRA further notes that the firm faces high competition from
existing well established hospitals and nursing homes located in
close vicinity which may exert pressure on the growth prospect and
margins of the firm. Moreover, recruiting and retaining good
doctors in light of heightened competition in Kolkata will remain
a challenge going ahead. The rating, however, favourably factors
in the favourable location of the nursing home, which is located
at a prominent place in south Kolkata and PM's status as a part of
the Aparna Group, which has diversified business interests with a
strong presence in Kolkata.
Incorporated in August 2011, Purnam (PM), a part of the Kolkata-
based "Aparna" group, acquired an existing nursing home and after
significant renovation commenced operations in January, 2013. PM
was promoted by four partners - Mr. K.D. Paul, Mr Arpan Paul, Mrs
Manjusri Paul and Mrs Devika Paul. PM currently runs a 57 bedded
multi-specialty nursing home, located at a prominent place in
south Kolkata. The nursing home provides treatment in various
departments viz. general medicine, orthopaedic, paediatric,
neurology, gastroenterology, gynaecology, oncology, cosmetic
surgery, cardiology, nephrology among others. ICRA has also rated
one of the entities of the Aparna group, viz. Saj Food Products
Private Limited (rated at [ICRA]BBB+/Stable/ [ICRA]A2), engaged in
confectionery business under the brand name of Bisk Farm.
Recent Results
During the first six months of 2013-14, the firm posted net loss
of INR2.43 crore (provisional) on an operating income of INR1.87
crore (provisional). The firm reported a net loss of INR2.18 crore
on an operating income of INR0.09 crore during 2012-13.
RADHESHYAM SPINNING: ICRA Ups Rating on INR35cr Loans to 'B+'
-------------------------------------------------------------
ICRA has upgraded the long term rating assigned to the INR22.50
crore term loan facility and to the INR12.50 crore (enhanced from
INR6.00 crore) cash credit facility of Radheshyam Spinning Mill
Private Limited from '[ICRA]B' to '[ICRA]B+'. ICRA has also
reaffirmed the '[ICRA]A4' rating to the INR2.05 crore short term
non-fund based limits of RSMPL.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term Loan 22.50 Upgraded to [ICRA]B+
from [ICRA]B
Cash Credit 12.50 Upgraded to [ICRA]B+
from [ICRA]B
Bank Guarantee 1.65 [ICRA]A4 reaffirmed
Credit Exposure
Limit 0.40 [ICRA]A4 reaffirmed
The rating upgrade takes into account the stabilization of
spinning operation of Radheshyam Spinning Mill Private Limited.
The ratings, also, favorably take into account the long experience
of promoters in the cotton industry; close proximity to raw
material sources as the company is located in the major cotton
growing belt of India; operational support from group concern
ensuring steady supply of raw material (cotton bales) and fiscal
benefits in terms of interest subsidy, subsidized power tariffs
and refund of VAT.
Further, the assigned ratings continue to be constrained by the
highly competitive business environment given the fragmented
nature of cotton industry thus, limiting the company's ability to
fully pass on the increase in raw material prices and
vulnerability of profitability to unexpected movements in cotton
prices which are in turn subject to seasonality and crop harvest.
ICRA also takes notes of the debt funded projects undertaken by
the company leading to stretched capital structure and high
working capital intensity of its operations.
Radheshyam Spinning Mill Private Limited was incorporated in March
2011 by Mr. Ramnik Bhalala, Mr. Dhansukh Nandaniya, Mr. Rahul
Patel and other 3 promoters. The company has installed 1440 rotors
having an installed capacity of producing 5520 MTPA of denim yarn.
The commercial production of spinning unit has commenced from 05th
June 2013 against the estimate of April 2013 due to delay in
getting power connection from GEB. Mr. Ramnik is also director in
Shree Ram Cottex Industries Private Limited which is engaged in
cotton ginning and pressing as well as cottonseed crushing
activities.
Recent Results
As per the provisional results for the eight months operation
ended 30th, November, 2013, RSMPL reported an operating income of
INR38.81 crore and profit before depreciation and taxes of INR2.72
crore as against an operating income of INR0.18 crore and a net
loss of INR0.04 crore during FY 2013.
RAVI OFFSET: CRISIL Lowers Ratings on INR230MM Loans to 'D'
-----------------------------------------------------------
CRISIL has downgraded its ratings on the bank facilities of Ravi
Offset Printers and Publishers Pvt Ltd to 'CRISIL D/CRISIL D' from
'CRISIL B-/Stable/CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 25 CRISIL D (Downgraded from
'CRISIL A4')
Cash Credit 108 CRISIL D (Downgraded from
'CRISIL B-/Stable')
Proposed Long Term 91 CRISIL D (Downgraded from
Bank Loan Facility 'CRISIL B-/Stable')
Term Loan 6 CRISIL D (Downgraded from
'CRISIL B-/Stable')
The rating downgrade reflects instances overdrawals in CC account
where account remained overdrawn more than 30 days along with
delays in servicing its term debt obligations. The delays resulted
from the company's weak liquidity, driven by higher than expected
debt funded working capital requirements leading to bank lines
being fully utilized.
Ravi Offset continues to have a weak financial risk profile,
marked by a small net worth, high gearing and below-average debt
protection metrics. Moreover, the company has a moderate scale of
operations in the highly fragmented domestic publication and
printing industry, and working-capital-intensive operations.
However, Ravi Offset benefits from the promoters' extensive
industry experience and their funding support.
Ravi Offset was established by the Jain family in Agra (Uttar
Pradesh) as a private limited company in 1994. The company
operates in the printing and publishing industry, and has over
3000 publications. The promoter family has been active in the
publications business for over five decades. Ravi Offset uses the
Ravi brand for all of its publications.
Ravi Offset reported a profit after tax (PAT) of INR3.2 million on
net sales of INR499.2 million for 2012-13 (refers to financial
year, April 1 to March 31), vis-a-vis a PAT of INR2.8 million on
net sales of INR460.3 million for 2011-12.
S.K. FABRICS: CRISIL Rates INR150MM Long Term Loan at 'B+'
----------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-term
bank facilities of S.K. Fabrics.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term
Bank Loan Facility 150 CRISIL B+/Stable
The rating reflects SKF's below-average financial risk profile,
marked by a small net worth and weak interest coverage ratio, and
the susceptibility of its operating margin to volatility in raw
material prices and to intense competition. These rating
weaknesses are partially offset by the extensive experience SKF's
promoter in the fabric-trading business.
Outlook: Stable
CRISIL believes that SKF will continue to benefit over the medium
term from its promoter's extensive experience in the fabric-
trading business. The outlook may be revised to 'Positive' if the
firm significantly expands its scale of operations while improving
its operating profitability, resulting in higher-than-expected
cash accruals, and effectively manages its working capital needs,
thus improving its liquidity and financial risk profile.
Conversely, the outlook may be revised to 'Negative' if SKF's
financial risk profile deteriorates further, most likely because
of lengthening of its working capital cycle or lower-than-expected
cash accruals.
SKF is a proprietorship firm established in 2007 by Mr. Krishna
Kumar Murarka and based in Ranchi (Jharkhand). The firm trades in
cotton, synthetic, and grey fabrics. Mr. Murarka has an experience
of over three decades in the fabric-trading business.
SANGO AUTO: CRISIL Reaffirms 'B' Ratings on INR34.7MM Loans
-----------------------------------------------------------
CRISIL's ratings on the bank facilities of Sango Auto Forge Pvt
Ltd (a part of the ANC group) continues to reflect the ANC group's
weak financial risk profile, marked by modest net worth, high
gearing, and moderate debt protection metrics. The rating also
reflects the group's large working capital requirements, small
scale of operations, high customer concentration, and
susceptibility to cyclicality in the commercial vehicles industry.
These rating weaknesses are partially offset by the benefits that
the ANC group derives from its promoters' extensive industry
experience and its improving operating efficiencies.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 10 CRISIL B/Stable (Reaffirmed)
Letter of Credit 40 CRISIL A4 (Reaffirmed)
Proposed Long Term
Bank Loan Facility 9.7 CRISIL B/Stable (Reaffirmed)
Term Loan 15 CRISIL B/Stable (Reaffirmed)
For arriving at the rating, CRISIL has combined the business and
financial risk profiles of SAFPL and ANC Enterprises (ANCE). This
is because these entities, collectively referred to as the ANC
group, are in similar lines of business, have significant
operational and financial linkages with each other (SAFPL derives
most of its revenue from ANCE), and common promoters.
Outlook: Stable
CRISIL believes that the ANC group will continue to benefit over
the medium term from its promoters' extensive industry experience
and its integrated operations. The outlook may be revised to
'Positive' if the group's liquidity improves significantly, most
likely driven by sizeable equity infusion or improvement in its
working capital management. Conversely, outlook may be revised to
'Negative' if the ANC group registers any decline in its revenue
and profitability or if it undertakes any large, debt-funded
capital expenditure programme, thereby deteriorating its financial
risk profile.
ANCE is involved in machining of components used in the automobile
industry. The firm operates two machining units at Bhosari in Pune
(Maharashtra) with installed monthly capacity of 600 tonnes per
month (tpm). SAFPL, incorporated in 2007, has forging capacity of
350 tpm and caters to 100 per cent of ANCE's forging requirements;
SAFPL generates about 25 per cent of its revenue from unrelated
parties.
SARVAHITHA EDUCATIONAL: CRISIL Ups Rating on INR130MM Loans to B+
-----------------------------------------------------------------
CRISIL has upgraded its rating on the long-term bank facilities of
Sarvahitha Educational Society to 'CRISIL B+/Stable' from 'CRISIL
D'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Long Term Bank 41 CRISIL B+/Stable (Upgraded
Facility from 'CRISIL D')
Overdraft Facility 89 CRISIL B+/Stable (Upgraded
from 'CRISIL D')
The rating upgrade reflects timely servicing of debt by SES on
account of improvement in its liquidity. The society's liquidity
has improved on the back of substantial increase in its accruals,
moderation in its capital expenditure (capex) plans, and judicious
structuring of debt obligations. SES's accruals of close to INR150
million expected in 2013-14 (refers to financial year, April 1 to
March 31) are sufficient to repay its term debt obligations of
INR90 million in the same period. Moreover, the repayments are
structured to match the monthly cash inflows from schools and
annual realisations from the colleges, thus avoiding cash flow
mismatches. The society's improved liquidity is expected to
sustain over the medium term with no major capex programme being
undertaken and steady cash flow from its schools.
The rating reflects SES's below-average financial risk profile,
marked by small net worth, aggressive gearing, and moderate debt
protection metrics; the rating also factors in the susceptibility
of the society to adverse regulatory changes in the education
sector and changing educational preferences of students. These
rating weaknesses are partially offset by SES's well-diversified
revenue profile supported by the extensive experience of its
promoter in the education sector.
Outlook: Stable
CRISIL believes that SES will continue to benefit from its well-
diversified revenue profile over the medium term. The outlook may
be revised to 'Positive' if SES's financial risk profile,
particularly gearing, improves with sizeable infusion of long-term
funds. Conversely, the outlook may be revised to 'Negative' if any
sizeable debt-funded capex programme adversely impacts its
financial risk profile; or if any regulatory changes materially
affect its operations.
Established in 1995, SES is managed by its promoter-director, Mr.
Madhukar Reddy, who took over the society in 2002. The society
runs 75 institutes, including those offering postgraduate courses
in business management and computer applications; and graduate
courses in engineering. It also runs a junior college for commerce
and science streams, and schools (from nursery to tenth standard).
The society has more than 52,000 students.
For 2012-13, SES reported a surplus (excess of income over
expenditure) of INR2.8 million on net revenue of INR700.9 million,
against a surplus of INR3.7 million on net revenue of INR574.3
million for 2011-12.
SARVESH RICE: CRISIL Reaffirms 'B' Ratings on INR195MM Loans
------------------------------------------------------------
CRISIL's ratings on the bank loan facilities of Sarvesh Rice Mill
Pvt Ltd continue to reflect SRMPL's modest scale of operations in
the fragmented rice milling industry and its modest financial risk
profile. These rating weaknesses are partially offset by the
extensive experience of SRMPL's promoters in the agro-based
industry.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 5 CRISIL A4 (Reaffirmed)
Cash Credit 52.5 CRISIL B/Stable (Reaffirmed)
Proposed Term Loan 35.5 CRISIL B/Stable (Reaffirmed)
Term Loan 107 CRISIL B/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that SRMPL will continue to benefit from its
promoters' extensive experience in the agro-based industry over
the medium term. The outlook may be revised to 'Positive' if SRMPL
increases its scale of operations and reports better profitability
or improves its capital structure. Conversely, the outlook may be
revised to 'Negative' if SRMPL undertakes larger-than-expected,
debt-funded expansions, or its revenues and profitability decline
substantially.
Update
SRMPL generated revenues of INR171 million 2012-13 (refers to
financial year, April 1 to March 31), its first full year of
operations. Majority of the sales were generated from the open
market with marginal contribution from the Food Corporation of
India (FCI). It had lower than expected operating margin at 6 per
cent in 2012-13 because of its inability to pass on the increase
in paddy price to consumers. Backed by healthy demand for rice in
the domestic market, the company is expected to report sales of
over INR170 million in 2013-14, though the operating margin is
expected to remain at 6 to 7 per cent. The increase in
manufacturing capacity to 62,400 tonnes per annum (tpa) from
14,400 tpa is expected to substantially increase its sales in
2014-15.
The company's liquidity is, however, expected to remain
constrained owing to tightly matched cash accruals vis-a-vis its
term debt obligations of about INR8 million in 2014-15. Its bank
limit of INR22.5 million has been highly utilised at an average 98
per cent during the 16 months ended October 2013. It has applied
for an enhancement in bank limits to INR52.5 million; however,
these will be utilised for meeting the increase in working capital
requirements; therefore SRMPL's liquidity is expected to remain
stretched over the medium term.
On the other hand, the company's gearing is expected to remain at
modest levels of 2.0 to 2.5 times over the medium term even after
factoring in the debt of INR81 million raised for funding the new
capex and incremental short-term funding required for working
capital. The debt protection metrics are expected to remain
moderate with interest coverage and net cash accruals to total
debt (NCATD) ratios at 1.6 to 1.7 times and 0.01 to0.02 times over
the medium term.
For 2012-13, SRMPL reported a profit after tax (PAT) of INR0.6
million on net sales of INR171 million, against a PAT of INR0.3
million on net sales of INR112 million for 2011-12.
Incorporated in 2009, SRMPL processes par-boiled rice at its
facility in Bardhaman (West Bengal). The day-to-day operations of
the company are managed by Mr. Ritesh Agarwal and Mrs. Vasudha
Agarwal.
SATYANARAYANA JEWELLERS: CRISIL Keeps B+ Rating on INR120M Loan
---------------------------------------------------------------
CRISIL's ratings on the bank facilities of Satyanarayana Jewellers
continue to reflect SJ's below-average financial risk profile,
marked by subdued weak debt protection metrics, and its modest
scale of operations in the intensely competitive gold jewellery
retailing market. These rating weaknesses are partially offset by
the extensive experience of SJ's partners in gold jewellery
retailing in Rajahmundry (Andhra Pradesh).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 45 CRISIL B+/Stable (Reaffirmed)
Long Term Loan 5 CRISIL B+/Stable(Reaffirmed)
Proposed Long Term
Bank Loan Facility 70 CRISIL B+/Stable(Reaffirmed)
Outlook: Stable
CRISIL believes that SJ will continue to benefit over the medium
term from the extensive experience of its partners in the gold
retailing business. The outlook may be revised to 'Positive' if SJ
reports a significant increase in its scale of operations while
improving its operating margin. Conversely, the outlook may be
revised to 'Negative' if the firm records lower-than-expected
accruals or undertakes any large debt-funded capital expenditure
(capex) programme, thereby weakening its financial risk profile,
or in case of significant capital withdrawals by its partners.
SJ, established in 2010, is engaged in gold jewellery retailing.
The firm's day-to-day operations are managed by Mr. B V R
Srinivas.
SJ reported a provisional profit after tax (PAT) of INR2.4 million
on net sales of INR288 million for 2012-13, as against a PAT of
INR0.4 million on net sales of INR223 million for 2011-12.
SERWEL ELECTRONICS: ICRA Lowers Rating on INR56cr Loans to 'D'
--------------------------------------------------------------
ICRA has revised the long term rating of Serwel Electronics
Limited to '[ICRA]D' from '[ICRA]BB' for INR36.00 crore fund based
facilities. ICRA has also revised the short term rating of SEL to
'[ICRA]D' from '[ICRA]A4' for INR20.00 crore non-fund based
facilities.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based-Cash
Credit 36.00 Revised to [ICRA]D
Non Fund Based-
Letter of Credit 18.00 Revised to [ICRA]D
Non Fund Based-
Bank Guarantee 2.00 Revised to [ICRA]D
The ratings revision is on account of delays in servicing of debt
obligations by SEL resulting from stretched liquidity profile as
reflected by the high working capital utilization following
significant build up of inventory levels and receivables. The
ratings are also constrained by SEL's weak financial profile
characterized by decline in profitability, leveraged capital
structure and weak debt coverage indicators in FY 2013. The
ratings also factor in the highly competitive nature of the
transformer industry and the vulnerability of margins to the
fluctuations in raw material prices, though mitigated to an extent
by price escalation clauses in some contracts. However, comfort is
drawn from the long and established track record of the company in
manufacturing of transformers, growth in the operating income over
the last three years mainly on account of increased order
execution for existing products and addition of new products and
acquisition of new customers. Going forward, improvement in the
liquidity position and timely servicing of debt obligations by the
company are the key rating sensitivities.
Serwel Electronics Limited, incorporated in 1997, is engaged in
design and manufacturing of auto transformers, distribution
transformers and power transformers. Auto transformers and
distribution transformers are manufactured up to a capacity of
5000 KVA. The manufacturing facilities are located at Hyderabad,
Pashamylaram (Andhra Pradesh) and Bangalore. The plant is equipped
with machinery and test equipments to conduct test as per IS: 5142
with an installed capacity of 50,000 units per annum.
Recent Results
The company has reported a net profit of INR3.63 crore on an
operating income of INR150.37 crore during FY 2013; as compared to
a net profit of INR5.76 crore on an operating income of INR123.03
crore during FY2012.
SHIV RICE: ICRA Suspends 'B+' Rating on INR8.41cr Loans
-------------------------------------------------------
ICRA has suspended '[ICRA]B+' rating assigned to the INR4.41 crore
term loan and INR4.00 crore, fund based, working capital facility,
and '[ICRA]A4' rating to the INR0.47 crore, short term, non-fund
based, working capital facility of Shiv Rice Mill. 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.
SHIVAMRUT DUDH: CRISIL Rates INR200 Million Loan at 'B+'
--------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-term
bank facilities of Shivamrut Dudh Utpadak Sahakari Sangh Maryadit.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 200 CRISIL B+/Stable
The rating reflects SDUSSM's exposure to intense competition and
to the fluctuations in the skimmed milk powder prices. These
rating weaknesses are partially offset by the established track
record of the society in the dairy industry.
Outlook: Stable
CRISIL believes that SDUSSM will continue to benefit over the
medium term from its established position in the industry. The
outlook may be revised to 'Positive' if there is significant and
sustainable improvement in the society's profitability margins,
while it maintains its revenue levels and capital structure.
Conversely, the outlook may be revised to 'Negative' if SDUSSM
registers a sharp decline in its revenues or operating margin, or
if there is elongation of its working capital cycle or if it
undertakes a larger-than-expected debt-funded capital expenditure
programme, resulting in weakening of its financial risk profile.
SDUSSM is a co-operative society established in 1976. The society
manufactures dairy products such as pasteurised milk, butter, and
ghee, as well as cattle feed. Its day-to-day operations are
managed by its managing director, Mr. Deepak Relan, and its
operations head, Mr. Pandit Deshmukh. SDUSSM's manufacturing
facility is in Malshiras, Solapur district (Maharashtra).
SDUSSM reported a net loss of INR32.4 million on net sales of
INR2.1 billion for 2012-13 (refers to financial year, April 1 to
March 31), against a profit after tax of INR2.9 million on net
sales of INR1.9 billion for 2011-12.
SHIVDHAN BOARDS: CRISIL Assigns 'B-' Ratings to INR88.6MM Loans
---------------------------------------------------------------
CRISIL has assigned its 'CRISIL B-/Stable' rating to the long-term
bank facilities of Shivdhan Boards Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 77.5 CRISIL B-/Stable (Assigned)
Term Loan 11.1 CRISIL B-/Stable (Assigned)
The rating reflects SBPL's modest scale of operations in a highly
fragmented particle board industry and below-average financial
risk profile constrained by its modest networth and leveraged
capital structure. These rating weaknesses are partially offset by
the extensive experience of the promoters in the industry with
established network.
Outlook: Stable
CRISIL believes that SBPL's business risk profile will continue to
benefit from its promoters' extensive industry experience. The
outlook may be revised to 'Positive' in case of significant
improvement in the company's operating margin, along with
improvement in the scale of operations, leading to improvement in
cash accruals and net worth supporting its liquidity. Conversely,
the outlook may be revised to 'Negative' if the company's lower-
than-expected cash accruals or larger-than-expected working
capital requirements or capital withdrawal lead to pressure on
liquidity.
SBPL was set up by Mr. Narendra Patel in 2003-04 (refers to
financial year, April 1 to March 31). The company manufactures
bagasse boards and pre-laminated particle boards, which are used
in the furniture and construction industry. The manufacturing unit
of the company is located at Nagpur (Maharashtra). The boards of
the company are sold under the Shivdhan brand. The promoters of
the company have over 15 years of experience in the industry.
SHREE VENKATESHWARA: CRISIL Reaffirms D Ratings on INR353MM Loans
-----------------------------------------------------------------
CRISIL's ratings on the bank facilities of Shree Venkateshwara
Sponge & Power Pvt Ltd (part of the Venkateshwara group) continue
to reflect the Venkateshwara group's continuous delay in term loan
repayments and its continuously overdrawn cash credit account for
over 30 days. This is driven by the group's weak liquidity, marked
by inadequate cash accruals to meet its debt obligations.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bill Discounting 50 CRISIL D (Reaffirmed)
Cash Credit 100 CRISIL D (Reaffirmed)
Letter of Credit 50 CRISIL D (Reaffirmed)
Proposed Long Term
Bank Loan Facility 68 CRISIL D (Reaffirmed)
Term Loan 85 CRISIL D (Reaffirmed)
The Venkateshwara group has a below-average financial risk
profile, marked by high gearing and weak debt protection metrics.
This rating weakness is partially offset by the extensive industry
experience of its management.
For arriving at the ratings, CRISIL has combined the business and
financial risk profiles of SVSPPL and Tapal Steel Pvt Ltd (TSPL).
This is because the two companies, together referred to as the
Venkateshwara group, have operational and financial linkages (fund
transactions) with each other.
Promoted by Mr. Bhavani Prasad in 2005, the Venkateshwara group
manufactures sponge iron and steel ingots. TSPL manufactures steel
ingots and thermo-mechanically treated (TMT) bars whereas SVSPPL
manufactures sponge iron.
For 2012-13, the Venkateshwara group reported a net loss of
INR79.9 million on net sales of INR1240 million, as against a net
loss of INR87.5 million on net sales of INR1350 million for 2011-
12.
SHRI VAISHNAVI: ICRA Suspends 'B+' Rating on INR12cr Loan
---------------------------------------------------------
ICRA has suspended '[ICRA]B+' rating assigned to the INR12.00
crore line of credit of Shri Vaishnavi Paraboiled Industries. 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.
SIDDHI SUGAR: CARE Assigns 'B+' Rating to INR26.71cr LT Loans
-------------------------------------------------------------
CARE assigns 'CARE B+' rating to the bank facilities of Siddhi
Sugar And Allied Industries Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 26.71 CARE B+ Assigned
Facilities
(Term Loan)
Rating Rationale
The rating assigned to the bank facilities of Siddhi Sugar and
Allied Industries Limited is constrained by the limited experience
of the promoters in the sugar industry, relative small scale of
non-integrated sugar mill, working capital intensive nature of
operations and financial risk profile marked by highly leveraged
capital structure. The rating also factors in the cyclical and
seasonal nature of the sugar industry and associated agro-climatic
risks.
The rating, however, derives strength from the resourceful
promoters, qualified and experienced second-tier management and
strategic location of SSAIL's sugar plant.
The ability of SSAIL to procure the envisaged volume of sugar cane
at the envisaged prices and effective management of the working
capital are the key rating sensitivities.
Siddhi Sugar and Allied Industries Limited was incorporated in
January 2011 by Mr Babasaheb Mohanrao Patil, Chairman and Mr
Avinash Balasaheb Jadhav to undertake the manufacturing of sugar.
The company acquired the closed sugar mill of Balaghat Shetkari
Sahakari Sakhar Karkhana Ltd (2,500 tonnes of cane crushed per day
(TCD)) in an auction from Maharashtra State Co-operative Bank
Limited, Mumbai. SSAIL got the possession of sugar plant in August
2011 and commenced commercial operations from December 2011 post
refurbishing & maintenance work. The sugar plant is located in
Gram Ujana, Taluka Ahmedpur, District Latur, Maharashtra. Mr
Babasaheb Mohanrao Patil, is the member of the legislative
assembly (MLA) from Ahmedpur (Latur) constituency since the past
10 years and has been into agricultural business since the last
three decades. Mr Avinash Jadhav, executive director of SSAIL
holds a master degree in finance, looks after the finance and
production function in the company.
FY13 (refers to the period April 1 to March 31) was the first full
year of operations of the sugar plant and the company achieved
sugar sales of INR110.33 crore on the back of crushing of 3.70
lakh metric tonnes (MT) of sugarcane. During FY13, SSAIL achieved
a PBILDT of INR14.05 crore (INR1.74 crore in 4MFY12 (refers to the
period December 1 to March 31) and a net profit of INR1.32 crore
(INR(1.25) crore in 3MFY12), on a total income of INR110.33 crore
(INR7.67 crore in FY12.)
SLO AUTOMOBILES: CRISIL Reaffirms B+ Rating on INR55MM Loan
-----------------------------------------------------------
CRISIL's ratings on the bank facilities of SLO Automobiles Pvt Ltd
continue to reflect SLO's weak financial risk profile, marked by a
small net worth, high gearing and weak debt protection metrics,
and exposure to geographical concentration risks. These rating
weaknesses are partially offset by SLO's moderate business risk
profile, backed by its promoter's extensive experience in the
automobile dealership industry.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 13 CRISIL A4 (Reaffirmed)
Cash Credit 55 CRISIL B+/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that SLO will continue to benefit from its
promoters' experience in the auto dealership industry and
established presence in Dehradun region. The outlook may be
revised to 'Positive' if the company scales up its operations by
increasing the number of showrooms with a diversified supplier
base, leading to higher-than-expected cash accruals. Conversely,
the outlook may be revised to 'Negative' in case of lower-than-
expected profitability and deterioration in financial risk
profile, particularly liquidity, owing to larger-than-expected
debt-funded capital expenditure or a further stretch in working
capital management.
SLO was formed in 2009 and deals in vehicles of Volkswagen Group
Sales India Pvt Ltd (Volkswagen; rated 'CRISIL AA-/Stable/CRISIL
A1+'). SLO has a showroom and a workshop covering 5000 square feet
(sq ft) and 14,000 sq ft, respectively, in Dehradun (Uttarakhand).
For 2012-13 (refers to financial year, April 1 to March 31), SLO
reported a profit after tax (PAT) of INR4 million on net sales of
INR380 million; the company reported a PAT of INR4 million on net
sales of INR353 million for 2011-12.
SRI KARIGIRI: CRISIL Reaffirms 'B' Rating on INR170MM Loans
-----------------------------------------------------------
CRISIL's rating on the long-term bank facilities of Sri Karigiri
Food Industries continues to reflect SKFI's below-average
financial risk profile, marked by a leveraged capital structure
and below-average debt protection metrics, and its modest scale of
operations in the highly fragmented rice-milling industry. The
rating also factors in the susceptibility of the firm's operating
margin to changes in government regulations and to volatility in
raw material prices. These rating weaknesses are partially offset
by the extensive industry experience of SKFI's partners.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 150 CRISIL B/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility 20 CRISIL B/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that SKFI will continue to benefit over the medium
term from the extensive experience of its partners in the rice-
milling industry. The outlook may be revised to 'Positive' if the
firm's revenues and profitability increase substantially, leading
to an improvement in its financial risk profile, or in case of
significant infusion of capital into the firm by the partners,
resulting in an improved capital structure. Conversely, the
outlook may be revised to 'Negative' if SKFI undertakes aggressive
debt-funded expansions, or if its revenues and profitability
decline significantly, or if the partners withdraw capital from
the firm, leading to weakening of its financial risk profile.
CRISIL believes that SKFI will continue to benefit over the medium
term from the extensive experience of its partners in the rice-
milling industry. The outlook may be revised to 'Positive' if the
firm's revenues and profitability increase substantially, leading
to an improvement in its financial risk profile, or in case of
significant infusion of capital into the firm by the partners,
resulting in an improved capital structure. Conversely, the
outlook may be revised to 'Negative' if SKFI undertakes aggressive
debt-funded expansions, or if its revenues and profitability
decline significantly, or if the partners withdraw capital from
the firm, leading to weakening of its financial risk profile.
SRIKARA PARENTERALS: CRISIL Places 'D' Ratings on INR100MM Loans
----------------------------------------------------------------
CRISIL has revoked the suspension of its ratings on the long term
bank facilities of Srikara Parenterals Private Limited, and has
assigned its 'CRISIL D' ratings to these facilities. The ratings
had been suspended by CRISIL as per its rating rationale dated
Nov. 14, 2013, as SPPL had not provided the necessary information
required for reviewing the ratings. SPPL has now shared the
requisite information, thereby enabling CRISIL to assign ratings
to the bank facilities.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 20 CRISIL D (Assigned;
Suspension revoked)
Funded Interest 25.8 CRISIL D (Assigned;
Term Loan Suspension revoked)
Long Term Loan 25.2 CRISIL D (Assigned;
Suspension revoked)
Working Capital 21.8 CRISIL D(Assigned;
Term Loan Suspension revoked)
Proposed Long Term 7.2 CRISIL D(Assigned;
Bank Loan Facility Suspension revoked)
The rating reflects instances of delay by SPPL in servicing its
debt; the delays have been caused by the company's weak liquidity.
SPPL also has a below average financial risk profile marked by a
weak capital structure and has large working capital requirements.
These rating weaknesses are partially offset by SPPL's established
regional presence aided by the extensive industry experience of
its promoters in the healthcare industry.
Incorporated in 2006, SPPL is involved in the manufacturing of
intravenous fluids used in the healthcare industry. The company is
promoted by Mr.Gorla Naga Manikyala Rao and the day-to-day
operations are managed by Mr.Prem Raj Rayepudi.
During 2012-13 (refers to financial year April 1 to March 31),
SPPL reported a net loss of INR15.3 million on net sales of
INR82.2 million as against a net loss of INR47.8 million on net
sales of INR36.9 million during 2011-12.
SUNNY DIAMONDS: CRISIL Assigns 'B+' Ratings to INR130MM Loans
-------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-term
bank facilities of Sunny Diamonds (SD; part of the Sunny group).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Standby Line of Credit 10 CRISIL B+/Stable
Cash Credit 70 CRISIL B+/Stable
Long Term Loan 50 CRISIL B+/Stable
The rating reflects the Sunny group's modest scale of operations,
weak debt protection metrics, and exposure to intense competition
in the fragmented jewellery retailing industry and to volatility
in gold and diamond prices. These rating weaknesses are partially
offset by the extensive experience of the Sunny group's promoters
in the diamond jewellery industry and its established
relationships with customers and suppliers.
For arriving at its rating, CRISIL has combined the business and
financial risk profiles of SD and Sunny Diamonds Pvt Ltd. This is
because the two entities, together referred to as the Sunny group,
operate in the same line of business and have significant
operational and financial linkages between them.
Outlook: Stable
CRISIL believes that the Sunny group will continue to benefit over
the medium term from its promoters' extensive experience in the
diamond jewellery industry. The outlook may be revised to
'Positive' if the group records higher-than-expected revenue and
profitability, resulting in improved cash accruals, while
improving its capital structure. Conversely, the outlook may be
revised to 'Negative' in case of a decline in the Sunny group's
revenue or profitability or deterioration in its working capital
management, or if it undertakes a large debt-funded capital
expenditure programme, resulting in weakening in its financial
risk profile.
The Sunny group derives its revenue from retailing in diamond
jewellery in Kerala. SDPL, incorporated in 2008, operates two
showrooms in Trivandrum and Calicut (both in Kerala).
SD, set up in 2005, operates one showroom in Ernakulam (Kerala).
The Sunny group is promoted by Mr. P P Sunny and his family
members.
For 2012-13 (refers to financial year, April 1 to March 31), the
Sunny group reported a profit after tax (PAT) of INR12.6 million
on net sales of INR319.0 million, against a PAT of INR18.9 million
on net sales of INR404.5 million for 2011-12.
SURAANA TEXTILE: ICRA Withdraws B+ Rating on INR10.98cr Loans
-------------------------------------------------------------
ICRA has withdrawn the long term rating of [ICRA]B+ and short term
rating of [ICRA]A4 assigned to the INR10.98 Crore Bank facilities
of Suraana Textile Mills Private Limited, as the company has
completely repaid the debt and there are no amount outstanding
against the rated instrument.
SURE CARGO: CRISIL Reassigns 'B' Ratings to INR40MM Loans
---------------------------------------------------------
CRISIL's ratings on the bank facilities of Sure Cargo Control Pvt.
Ltd continue to reflect SCCPL's small scale of operations in a
highly fragmented industry and weak financial risk profile, marked
by high gearing. These rating weaknesses are partially offset by
the extensive experience of SCCPL's promoters in the cargo
securing business as well as synergy benefits arising from its
diversified product portfolio.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Overdraft Facility 10 CRISIL A4 (Reassigned)
Proposed Long Term
Bank Loan Facility 25.3 CRISIL B/Stable (Reassigned)
Term Loan 14.7 CRISIL B/Stable (Reassigned)
Outlook: Stable
CRISIL believes that SCCPL will maintain a stable credit risk
profile over the medium term on the back of its promoters'
experience in the industry. The outlook may be revised to
'Positive' if SCCPL is able to scale up its operations
significantly while sustaining its profitability and working
capital managementor if it improves its capital structure by
infusion of capital. Conversely, the outlook may be revised to
'Negative' if its financial risk profile deteriorates due to
lower-than-expected accruals or in case the company undertakes
substantial debt-funded capital expenditure programme, or if there
is further stretch in its working capital requirements.
Update
SCCPL reported topline of INR134 million for 2012-13 (refers to
financial year, April 1 to March 31); registering a growth of 22
per cent on a year-on-year basis and commensurate with CRISIL's
estimates. The company reported a decline of 200 basis points in
its operating profitability to 4.4 per cent for 2012-13 on account
of rise in raw material costs. SCCPL diversified its service
offerings in 2012-13 by venturing into fleet services. The company
has added a fleet of 14 trucks to serve as a cargo transporter.
The company has been able to leverage on its existing clientele
for cargo securing products to generate revenue from the fleet
service domain. CRISIL believes that significant scale up of
operations will remain a challenge for SCCPL in the near term on
account of sluggishness in demand for cargo transport.
SCCPL's operations continue to be working-capital-intensive, in
line with past trends, as reflected in its gross current assets of
162 days as on March 31, 2013. The company has funded the fleet
addition largely via debt, resulting in deterioration in capital
structure to more than 3.5 times. CRISIL believes that over the
medium term, SCCPL will continue to operate at a high gearing.
CRISIL also believes that SCCPL will generate sufficient accruals
to meet its debt obligations due in 2013-14 and 2014-15.
SCCPL reported profit after tax (PAT) of Rs 2.0 million operating
income of Rs 135 million for 2012-13, as against PAT of Rs 3.8
million on operating income of Rs 109 million for 2011-12.
Incorporated in 2008 and promoted by Mr. Ram Ratan Singhi, SCCPL
provides cargo packaging solutions. The company is based in
Gurgaon (Haryana).
SURYALAXMI ENTERPRISES: CARE Ups Rating on INR9.54cr Loans to 'B'
-----------------------------------------------------------------
CARE revises the rating assigned to the bank facilities of
Suryalaxmi Enterprises Private Limited (erstwhile Varuna Spinning
Mills Private Limited).
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 9.54 CARE B Revised from
Facilities CARE C
Rating Rationale
The revision in the long-term rating factors in the improvement in
its debt servicing track record of Suryalaxmi Enterprises Private
Limited coupled with an improvement in the profitability margins
and capital structure. The rating continues to remain constrained
by the small and declining scale of operations, susceptibility of
its margins to volatility in raw material prices and highly
fragmented nature of the industry.
The rating, however, draws comfort from the experienced promoters
and assured revenue visibility in the short to medium term coupled
with reputed client base.
Going forward the ability of the company to profitably increase
its scale of operation and effective management of its working
capital requirement shall be the key rating sensitivities. The
ability to manage lease agreement rollover risk shall also be a
key rating sensitivity.
SLPL was incorporated in August 1994, by the late Mr B R Gupta and
Mr Rajendra Kumar Aggarwal. The company was earlier engaged in the
manufacturing of polyester yarn however during FY13 (refers to the
period April 1 to March 31), the management decided to discontinue
manufacturing polyester yarn. Subsequently, in December 2012, the
plant and machinery of the spinning unit was disposed off. The
premises has been renovated and converted into a warehouse. The
company availed a term loan of INR2.25 crore in FY14 for the
renovation of the spinning premises and the same was leased out to
Pidilite Industries Limited. The company expects its first rental
income from January 2014. The company has four warehouses which
are leased out to LG Electronics India Private Limited, Whirlpool
of India Limited, Proficient Logistics Services and Pidilite
Industries Limited. Furthermore, the company also started the
trading of rice (Basmati and Non- Basmati Rice) in January
2014.The group concern Ayodhya Roller Flour Mills is engaged in
the processing and trading of Basmati and Non- Basmati Rice.
During FY13, SLPL achieved a total operating income (TOI) of
INR14.17 crore with profit after tax (PAT) of INR0.37 crore. In 9M
FY14 (refers to period April 1 to December 31, 2013) SLPL achieved
a TOI of INR1.20 crore as rental income.
TAPAL STEEL: CRISIL Reaffirms 'D' Ratings on INR193MM Loans
-----------------------------------------------------------
CRISIL's ratings on the bank facilities of Tapal Steel Private
Limited (TSPL; part of the Venkateshwara group) continue to
reflect the Venkateshwara group's continuous delay in term loan
repayments and its continuously overdrawn cash credit account for
over 30 days. This is driven by the group's weak liquidity, marked
by inadequate cash accruals to meet its debt obligations.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 100 CRISIL D (Reaffirmed)
Letter of Credit 50 CRISIL D (Reaffirmed)
Term Loan 43 CRISIL D (Reaffirmed)
The Venkateshwara group has a below-average financial risk
profile, marked by high gearing and weak debt protection metrics.
This rating weakness is partially offset by the extensive industry
experience of its management.
For arriving at the ratings, CRISIL has combined the business and
financial risk profiles of TSPL and Shree Venkateshwara Sponge and
Power Pvt Ltd (SVSPPL). This is because the two companies,
together referred to as the Venkateshwara group, have operational
and financial linkages (fund transactions) with each other.
Promoted by Mr. Bhavani Prasad in 2005, the Venkateshwara group
manufactures sponge iron and steel ingots. TSPL manufactures steel
ingots and thermo-mechanically treated (TMT) bars whereas SVSPPL
manufactures sponge iron.
For 2012-13, the Venkateshwara group reported a net loss of
INR79.9 million on net sales of INR1240 million, as against a net
loss of INR87.5 million on net sales of INR1350 million for 2011-
12.
TECHTRANS CONSTRUCTION: ICRA Suspends D Rating on INR31.73cr Loan
-----------------------------------------------------------------
ICRA has suspended '[ICRA]D' rating assigned to the INR31.73 crore
bank facilities of Techtrans Construction India 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.
TIKU RAM: CRISIL Reaffirms 'B+' Rating on INR625MM Loans
--------------------------------------------------------
CRISIL's rating on the bank facilities of Tiku Ram Gum and
Chemicals Pvt Ltd continue to reflect TRGCL's exposure to risks
related to volatility of guar gum prices, and weak liquidity
marked by high bank limit utilisation and high gearing. These
rating weaknesses are partially offset by the benefits that the
company derives from its promoters' extensive experience in the
guar gum industry and its established relationships with its large
global customers.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 560 CRISIL B+/Stable (Reaffirmed)
Cash Term Loan 65 CRISIL B+/Stable (Reaffirmed)
Export Packing Credit 80 CRISIL A4 (Reaffirmed)
Foreign Bill Purchase 120 CRISIL A4 (Reaffirmed)
Foreign Exchange
Forward 100 CRISIL A4 (Reaffirmed)
Outlook: Stable
CRISIL believes that TRGCL will continue to benefit over the
medium term from its promoters' extensive industry experience and
its established relationships with its customers and suppliers.
The outlook may be revised to 'Positive' in case of higher-than-
expected ramp up in its scale of operations and profitability, and
improvement in company's capital structure. Conversely, the
outlook may be revised to 'Negative' in case TRGCL's liquidity is
constrained by larger-than-expected working capital requirement,
lower-than-expected cash accruals, or further debt-funded capital
expenditure.
Update
For 2012-13 (refer to financial year, April 1 to March 31), TRGCL
reported operating income of Rs 5.09 billion, higher than
operating income of Rs 2.7 billion reported in 2011-12.
Substantial improvement in company's scale of operation is driven
by higher sales realization in first quarter of 2012-13. The
company books order for 3-4 months in advance, hence despite fall
in price in 2012-13, the company recorded sale at average price of
around Rs 10 million per quintal. During April-December, 2013, the
company has booked revenue of around Rs 3 billion on account of
high volume sales. CRISIL expects the company's operating income
to remain in the range of 5.5-6 billion over the medium term.
TRGCL reported operating margin of 1.6 percent in line with
operating margin generated in the past. CRISIL expects that
TRGCL's operating will continue to remain vulnerable to volatility
in price of guar gum seed.
TRGCL has weak financial risk profile marked by gearing of 2.75
times, interest coverage of 1.9 times and net cash accrual to
total debt (NCATD) ratio of 0.04 times as on March 31, 2013. Weak
financial risk profile of the company is because of high
dependence of the company on external debt to fund its working
capital requirement. TRGCL had incremental working capital
requirement of Rs 819 million during three year period ended 2012-
13 vis-a-vis cash accrual generated of Rs 180 million and equity
infusion of Rs 68 million thereby increasing company's reliance on
short term to fund its working capital requirement. High working
capital requirement has resulted in high average utilization of
around 85-90 percent in company's working capital limits during
ten months ended October, 2013. CRISIL believes that TRGCL will
continue to rely heavily on external debt for its working capital
requirements.
TRGCPL was set up by Mr. Pawan Agarwal in 2006. The company is
currently managed by its founder and his son, Mr. Vipin Agarwal.
The company is involved in manufacturing of guar gum splits.
TRGCL reported a net profit of INR25.4 million on operating income
of INR5.09 billion for 2012-13, vis-a-vis a net profit and
operating income of INR147.3 million and INR2.72 billion,
respectively, in 2011-12.
U.H. AGROTECH: CRISIL Reaffirms 'D' Ratings on INR230MM Loans
-------------------------------------------------------------
CRISIL's ratings on the bank facilities of U.H. Agrotech Pvt Ltd
continue to reflect instances of delay by UHAPL in servicing its
debt. The delays have been caused by the company's weak liquidity,
marked by its higher dependence on working capital limits to fund
its increasing working capital requirements, due to low negative
cash accruals from operations.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 42 CRISIL D (Reaffirmed)
Proposed Long Term
Bank Loan Facility 126 CRISIL D (Reaffirmed)
Rupee Term Loan 62 CRISIL D (Reaffirmed)
UHAPL also has a below average financial risk profile, marked by
small net worth, high gearing and weak debt protection metrics.
Furthermore, the company has a modest scale of operations in the
highly fragmented poultry farming industry; its operating
performance is vulnerable to intense competition and to risks
inherent in the poultry industry. However, UHAPL benefits from the
promoters' experience and established presence in the poultry
industry, and its diversified revenue profile.
UHAPL was set up in 2009 by the Singh family. The company operates
in the poultry industry, mainly the broiler chick breeding
segment. UHAPL was incorporated to acquire the existing business
of two partnership firms, namely, Uchani Hatchery and Uchani
Research and Breeding Farm, which were set up in 1995 and 2005,
respectively, by the Singh family. UHAPL's facilities are
vertically integrated with four breeder farms and hatcheries
across 20 acres of land in Karnal (Haryana). The company
undertakes breeding of parent birds and hatching of eggs into day-
old chicks (DOC) in these locations. The company's operations are
jointly managed by Mr. Rajbir Singh along with his brothers, Mr.
Raghuvir Singh, Mr. Randhir Kumar, and Mr. Rajinder Kumar.
UHAPL reported a profit after tax (PAT) of INR0.2 million on net
sales of INR185.2 million for 2012-13 (refers to financial year,
April 1 to March 31), vis-a-vis a PAT of INR0.2 million on net
sales of INR181.5 million for 2011-12.
=========
J A P A N
=========
SONY CORP: Moody's Cuts Issuer Rating to Ba1; Outlook Stable
------------------------------------------------------------
Moody's Japan K.K. has downgraded the Issuer Rating and the long-
term senior unsecured bond rating of Sony Corporation to Ba1 from
Baa3. The ratings outlook is stable.
At the same time, Moody's has downgraded the short-term rating of
its supported subsidiary, Sony Global Treasury Services Plc, to
Not Prime from Prime-3.
This concludes the review for downgrade initiated by Moody's on
Nov. 1, 2013.
RATINGS RATIONALE
The rating actions reflect Moody's view that while Sony has made
progress in its restructuring and benefits from continued
profitability in several of its business segments, it still faces
challenges to improve and stabilize its overall profitability and,
in the near term, to achieve a profile that Moody's views as
consistent with an investment grade rating.
Of primary concern are the challenges facing the company's TV and
PC businesses, both of which face intense global competition,
rapid changes in technology, and product obsolescence.
Sony's profitability is likely to remain weak and volatile, as we
expect the majority of its core consumer electronics businesses --
such as TVs, mobile, digital cameras and personal computers -- to
continue to face significant downward earnings pressure.
The primary reason is intense competition and the shrinkage in
demand, the result in turn of cannibalization caused by the rapid
penetration of smartphones.
To improve profitability, Sony has implemented extensive
restructuring measures that include -- among others -- the
reduction of fixed costs for its TV business, and the
consolidation of its manufacturing plants.
These efforts have helped reduce losses in its Home Entertainment
& Sound and Mobile Products & Communications segments, but Moody's
remains concerned that the benefits are only slowly emerging and
that these two large segments seem unlikely to soon regain the
robust profit levels seen historically.
At the same time, the four segments of Devices, Imaging Products &
Solutions, Music, and Pictures are expected to remain profitable,
but not at levels, which in aggregate can support an investment
grade rating for the overall corporation.
Moody's is particularly concerned about weak earnings in the
Devices and the Imaging Products & Solutions segments as the rapid
decline in demand for compact digital cameras continues to alter
the markets for such products and associated imaging sensors.
Both of these two segments are expected to remain profitable, but
at levels lower than those seen historically.
Profitability in the Games segment is expected to improve with the
successful launch of PlayStation IV, but not to the extent seen
with the profitability level in 2010.
The Music and Pictures segments are expected to remain profitable
-- after an expected one quarter seasonal loss in Pictures -- and
supportive of the company's cash flow and profitability.
Moody's considers that the continued solid operating performance
of Devices, Music, and Pictures are particularly important in the
midst of the restructuring of Sony's Home Entertainment & Sound,
and Mobile Products and Communications segments.
However, a lack of stability in some of these segments will
increase the risk of further delaying the recovery of Sony's
overall profitability.
The stable outlook is based on our expectations that the company's
overall credit profile will slowly improve. Operating margins are
expected to remain in the 0.5% -1.0% range for the next 12 months.
Adjusted Debt to EBITDA will decline over time but remain above
4.5x.
The ratings could experience upgrade pressure if Sony improves
profitability and cash flow by: 1) turning around its TV and PC
businesses; 2) reversing declines in earnings from its games and
digital imaging products; and 3) reducing debt.
Also necessary for an upgrade would be an overall demonstration by
its non-financial services businesses of 1) adjusted debt/EBITDA
of 4x-4.5x, and 2) adjusted debt/capitalization below 55%.
The ratings could experience downgrade pressure if profitability,
cash flow, and leverage deteriorate further, and if Sony's non-
financial services overall fail to improve operating profit
(excluding non-recurring gains and losses, and equity income), or
maintain adjusted debt/EBITDA in the 6-7x range, or keep adjusted
debt/capitalization below 65%.
Sony Corporation, headquartered in Tokyo, is one of the world's
leading manufacturers of consumer electronics products. Its key
segments are: Imaging Products & Solutions; Game; Mobile Products
& Communications; Home Entertainment & Sound; Devices; Pictures;
Music; Financial Services.
=================
I N D O N E S I A
=================
ALAM SUTERA: Fitch Puts Final Rating on $22-Mil. Notes at B+
------------------------------------------------------------
Fitch Ratings has assigned Indonesia-based property developer PT
Alam Sutera Realty Tbk's (ASRI, B+/Stable) USD225m 9% notes due
2019 a final 'B+' rating, with a Recovery Rating of 'RR4'. The
notes are issued by Alam Synergy Pte Ltd and guaranteed by ASRI
and certain subsidiaries.
The notes are rated at the same level as ASRI's senior unsecured
debt rating as they represent direct, unconditional, unsecured and
unsubordinated obligations of the company. The rating action
follows the receipt of documents conforming to information already
received. The final rating is in line with the expected rating
assigned on 7 January 2014.
Proceeds from the notes will be used to finance the tender offer
for its 2017 USD150m notes, project development and construction,
redemption of any remaining 2017 notes in 2015 and for general
corporate purposes.
Small Scale, Improved Diversification: The ratings reflect ASRI's
small scale, project concentration and inherent volatility in the
property developments. Historically, more than 50% of marketing
sales derived from ASRI's mature township in Serpong, a satellite
city in the western part of Greater Jakarta. Fitch expects the
company to gradually achieve a more diversified project mix as
ASRI's second township project at Pasar Kemis develops. Management
estimates Pasar Kemis will account for about 43% of total
marketing sales in 2013 (2012: 18%).
Stability Amid Challenges: 2014 will be particularly challenging
for property developments aimed at middle- and high-income buyers,
such as ASRI's Serpong project, with stricter mortgage regulation
and the upcoming general election dampening investors' buying
sentiment. Fitch expects the higher presales at ASRI's Pasar
Kemis and steady recurring income from shopping malls and cultural
parks to make up for the lower presales at Serpong.
Pasar Kemis is strategically positioned to capture the more
resilient demand from middle- to low-income buyers, with more
affordable pricing and first-time home buyers being exempted from
the authorities' stricter mortgage regulation. Fitch expects
sales at Pasar Kemis, which is located about 15 km from Serpong,
to provide more stability to ASRI's earnings.
Rupiah Weakness Exacerbates Currency Mismatch: Property developers
with US dollar-denominated borrowings have been hurt by the
rupiah's weakening, which has increased their debt burden in terms
of the currency that they sell in. The rupiah's significant
depreciation and lower-than-expected presales have negatively
impacted ASRI's leverage as measured by presales to gross debt
(2013F: 0.95x). Nevertheless, Fitch expects ASRI to maintain a
leverage profile appropriate for its rating, with presales/gross
debt at above 0.75x over the next 12 months, which underpins the
Stable Outlook. ASRI's well-distributed maturity profile is an
additional comfort, in particular with the new issue pushing out
debt maturity until 2019 and after.
Established Track Record: The ratings also recognize ASRI's low-
cost, large land bank inventory, strategic development locations,
and track record of successful project executions. ASRI is one of
the pioneers in developing large-scale townships in Serpong, which
is now a popular alternative to other areas in Greater Jakarta.
Fitch believes ASRI will be able to leverage on its success story
at Serpong for future project launches, as it recently
demonstrated with the higher-than-expected sales for project
launches in Pasar Kemis.
Negative: Future developments that may, individually or
collectively, lead to negative rating action include:
-- A sustained increase in leverage such that the ratio of
presales to gross debt falls below 0.75x on a sustained
basis (2014F: 0.80x)
-- An increase in its exposure to non-core businesses
Positive rating action is not expected due to the cyclical nature
of ASRI's property development business, the company's small scale
and a lack of project diversification.
=================
S I N G A P O R E
=================
OUE COMMERCIAL: Moody's Assigns Ba1 CFR; Outlook Stable
-------------------------------------------------------
Moody's Investors Service has assigned a definitive corporate
family rating of Ba1 to OUE Commercial Real Estate Investment
Trust (OUE C-REIT) following the trust's successful listing on the
Singapore Exchange Securities Trading Limited. This removes the
provisional status assigned on 10 January 2014.
The rating outlook is stable.
RATINGS RATIONALE
The initial public offering process concluded with the start of
trading in the Units on the Singapore stock exchange.
The sale of assets to OUE C-REIT, the drawdown of the term loan
facility and receipt of subscriptions for Units have occurred such
that OUE C-REIT starts with a total debt of approximately SGD682
million (RMB loans are converted based on the exchange rate of
SGD1: RMB4.783).
"OUE C-REIT's Ba1 rating takes into account the favourable
industry dynamics underpinned by its portfolio of high-quality and
strategically located assets in Singapore and China," says
Jacintha Poh, a Moody's Analyst.
"However, OUE C-REIT's small asset size, relative to its rated
peers, limited operating track record and high concentration risk
constrains its rating," adds Poh, who is also Moody's lead analyst
for OUE C-REIT.
At listing date, OUE C-REIT has no near-term refinancing risk.
Nonetheless, its debt profile is lumpy and concentrated, with
almost 59% of its debt to mature in 2017.
We expect the trust to pro-actively spread out and lengthen its
debt maturity profile over the next 12 months.
Moody's detailed rating rationale was set out in a press release
and new issuer report issued on 10 January 2014.
The principal methodology used in this rating was Global Rating
Methodology for REITs and Other Commercial Property Firms
published in July 2010.
OUE C-REIT is listed on the Singapore Stock Exchange in January
2014. Its property portfolio comprises the OUE Bayfront in
Singapore and Lippo Plaza in Shanghai, with a combined appraised
value of approximately SGD1.62 billion (including income support
for OUE Bayfront) as of 30 September 2013.
*********
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 ***