/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/140319.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, March 19, 2014, Vol. 17, No. 55 Headlines A U S T R A L I A ABC LEARNING: RCS Opposition to U.S. Recognition Denied AMERIND PTY: Placed on Market Following Receivership AUSSIE LIVING: Goes Into Voluntary Administration CUSTOM GROUP: First Creditors' Meeting Set For March 26 EMECO PTY: Fitch Assigns 'BB-' Rating to USD335MM Sr. Sec. Notes JKD CANVAS: Cor Cordis Appointed as Administrators KORAY BONDI: Placed Into Administration NEWCASTLE KNIGHTS: Deadline for AUD10MM Bank Guarantee Looms OCEAN ABALONE: Bought Out of Receivership SMART ABS 2014-1US: Moody's Rates AUD15.809MM Class E Notes 'Ba2' C H I N A YANLORD LAND: Moody's Assigns Ba3 Rating to Sr. Unsec. SGD Bonds YANLORD LAND: S&P Assigns 'BB-' Rating to Proposed SGD Sr. Notes ZHEJIANG XINGRUN: Facing Bankruptcy With More than $500MM Debt I N D I A ABG SHIPYARD: Corporate Debt Restructuring Fails to Take Off ALFA VITRIFIED: CRISIL Ups Rating on INR287.3MM Loans to 'B+' BEEPEE ENTERPRISE: CRISIL Reaffirms 'B+' Rating on INR45MM Loans BISHANDAYAL INDERCHAND: CRISIL Cuts Rating on INR250MM Loan to D CHINTAMANI JEWELS: ICRA Assigns 'B+' Rating to INR8cr Loan CLC TEXTILE: ICRA Suspends 'B' Rating on INR17.5cr LT Loan DAYAL LUMBERS: ICRA Reaffirms 'B+' Rating on INR1.5cr Loan DHIR GLOBAL: CRISIL Assigns 'D' Rating to INR350MM Loans ENSOL MULTICLEAN: CRISIL Ups Rating on INR22.1MM Loans to 'B' GAURAVHWINES PRIVATE: ICRA Suspends B Rating on INR10cr Loan GOKUL GINNING: ICRA Reaffirms 'B+' Rating on INR6cr Loan GURUKRUPA DEVELOPERS: ICRA Assigns B+ Rating to INR125cr Loans JAMPESWAR AGRO: CRISIL Puts 'B' Rating on INR60.3MM Loans MEGAMILES BEARINGS: ICRA Revises Rating on INR5.3cr Loan to B- METRO CITY: ICRA Assigns 'D' Rating to INR18.62cr Loans NAVKAR TEX: ICRA Suspends 'B' Rating on INR5.5cr Loan P. G. TIMBER: CRISIL Cuts Rating on INR70MM Loans to 'B' RAGHUVIR BUILDCON: CRISIL Reaffirms B+ Rating on INR100MM Loan RAM BUILDERS: ICRA Reaffirms 'B' Rating on INR7.5cr Loans SANGINI COMMERCE: CRISIL Assigns 'B-' Rating to INR380MM Loans SANKAGIRI SPINTEX: CRISIL Reaffirms 'BB' Rating on INR134MM Loans SATYA INFRA: CRISIL Lowers Rating on INR112.5MM Loan to 'B+' SHREE SAIBABA: CRISIL Reaffirms 'B' Rating on INR70.4MM Loans SRI SEETHARAMA: CRISIL Raises Rating on INR40MM Loans to 'B+' V.L. RAKA: ICRA Suspends 'B+' Rating on INR12cr Loans VIDYASAGAR HIMGHAR: CRISIL Raises Rating on INR90MM Loans to 'B' I N D O N E S I A TOWER BERSAMA: Fitch Affirms 'BB' IDR; Outlook Stable N E W Z E A L A N D SOUTH CANTERBURY: Former Director Stuart Nattrass Gives Evidence P H I L I P P I N E S RURAL BANK OF MONTEVISTA: Placed Under PDIC Receivership - - - - - ================= A U S T R A L I A ================= ABC LEARNING: RCS Opposition to U.S. Recognition Denied ------------------------------------------------------- Law360 reported that the U.S. Supreme Court let stand the bankruptcy protections granted to Australia-based ABC Developmental Learning Centres Ltd., declining to hear arguments from creditor RCS Capital Development LLC that the child care company's foreign insolvency proceedings didn't merit Chapter 15 recognition. According to the report, RCS had sought to challenge a Third Circuit finding that ABC was entitled to Chapter 15 recognition and an automatic stay protecting its U.S. assets from creditor actions, but the high court denied the company's petition for writ of certiorari without comment. About ABC Learning Based in Australia, ABC Learning Centres Limited (ASX: ABS) -- http://www.childcare.com.au/-- provides childcare services and education in more than 1,200 centers in Australia, New Zealand, the United States and the United Kingdom. The Company's subsidiaries include A.B.C. Developmental Learning Centers Pty Ltd., A.B.C. Early Childhood Training College Pty Ltd., Premier Early Learning Centers Pty Ltd., A.B.C. Developmental Learning Centers (NZ) Ltd., A.B.C. New Ideas Pty Ltd., A.B.C. Land Holdings (NZ) Limited and Child Care Centers Australia Ltd. On Jan. 26, 2007, it acquired La Petite Holdings Inc. On Feb. 2, 2007, it acquired Forward Steps Holdings Ltd. On March 23, 2007, it acquired Children's Gardens LLP. In September 2007, the Company purchased the Nursery division (Leapfrog Nurseries) from Nord Anglia Education PLC. In June 2008, the Company completed the sale of a 60% stake in its United States business to Morgan Stanley Private Equity. In November 2008, ABC Learning Centres Limited appointed Peter Walker and Greg Moloney of Ferrier Hodgson as voluntary administrators of the company and a number of its subsidiaries. Subsequent to the appointment of administrators, the company's banking syndicate appointed Chris Honey, Murray Smith and John Cronin of McGrathNicol as receivers. The Administrators filed a Chapter 15 petition for the Company (Bankr. D. Del. Case No. 10-11711) on May 26, 2010. Joel A. Waite, Esq., at Young, Conaway, Stargatt & Taylor, represents the Petitioners in the Chapter 15 case. ABC's debts and assets were estimated to be between US$100 million and US$500 million. A separate Chapter 15 petition was filed for affiliate A.B.C. USA Holdings Pty Ltd., listing assets and debts of at least US$100 million. AMERIND PTY: Placed on Market Following Receivership ---------------------------------------------------- Cara Waters at SmartCompany reports that timber manufacturer and distributor Amerind Pty Ltd is up for sale after collapsing into receivership after the Christmas trading period. Matt Byrnes -- matt.byrnes@au.gt.com -- and Andrew Hewitt -- andrew.hewitt@au.gt.com -- of Grant Thornton were appointed as receivers and managers of the company after following cash flow problems after the Christmas period, SmartCompany relates. Mr. Byrnes told SmartCompany that Amerind is continuing to operate in receivership and the receiver's plan is to stabilise the business and market the business and assets for sale. "The key issue that led to us being appointed was cash flow throughout the Christmas period," the report quotes Mr. Byrnes as saying. "The business underperformed against its forecast and that put a real squeeze on cash and so it got to the point where the business struggled to pay some of its suppliers." SmartCompany relates that Mr. Byrnes said creditors and the banks are owed AUD30 million to AUD40 million. He didn't want to identify the major creditors, but said they were the "standard trade players," the report relays. Amerind Pty Ltd manufacturers veneer products and distributes timber, veneer panels and other decorative and architectural finishes. It turned over in excess of AUD100 million last financial year, employs 174 staff and manufactures in Victoria, New South Wales, Queensland and Western Australia. AUSSIE LIVING: Goes Into Voluntary Administration ------------------------------------------------- NewsMail reports that Aussie Living has gone into voluntary administration, taking with it the lay-by dollars of Bundaberg woman Debra Gilbert and many others. Ms. Gilbert called the NewsMail, upset after making a AUD250 down payment on a lounge only to find her money was lost when the company collapsed. According to the report, Brisbane-based administrator Anne Meagher -- anne.meagher@svp.com.au -- of SV Partners said Ms. Gilbert was not alone. "We've got two people who are actually taking calls from lay-by customers around the clock," NewsMail quotes Ms. Meagher as saying. "We've been trying to sort through those on a case-by- basis." NewsMail relates that Ms. Meagher said she had not been able to keep the businesses trading. "We had a number of landlords that were (issuing) or had already issued notices to the company to either vacate the premises or to remedy the breach of their lease, so I didn't have the ability," NewsMail quotes Ms. Meagher as saying. She said unpaid wages were also "quite high," the report relays. NewsMail adds that Ms. Meagher said she then looked to sell the business and stock. "We did have three or four interested parties; one provided an offer for the stock, no-one provided an offer for the business . . . and hence why we closed," Ms. Meagher, as cited by NewsMail, said. Ms. Meagher believed the employee entitlements, including redundancies, was in the vicinity of late AUD600,000 to AUD700,000. Money owed to the bank was in excess of AUD4 million, the report discloses. Aussie Living had a store on Johanna Blvd in Bundaberg and 12 others in Queensland and NSW. CUSTOM GROUP: First Creditors' Meeting Set For March 26 ------------------------------------------------------- Gayle Dickerson -- gayle.dickerson@au.gt.com -- and Trevor Pogroske -- trevor.pogroske@au.gt.com -- at Grant Thornton Australia were appointed administrators of Custom Group Pty Ltd on March 14, 2014. A first meeting of the creditors of the Company will be held at Level 17, 383 Kent Street, in Sydney, on March 26, 2014, at 12:00 p.m. EMECO PTY: Fitch Assigns 'BB-' Rating to USD335MM Sr. Sec. Notes ---------------------------------------------------------------- Fitch Ratings has assigned Emeco Pty Ltd's USD335m senior secured notes due 2019 a final rating of 'BB-' with a Recovery Rating of 'RR3'. The final rating is in line with the expected rating assigned on Feb. 27, 2014 and follows a review of the final documentation, which materially conformed to the draft documentation previously received. Emeco Pty Ltd is a wholly-owned subsidiary of Emeco Holdings Limited (Emeco, B+/Stable). The notes are secured by the assets of the Emeco Group, and guaranteed by Emeco and some of its subsidiaries. Proceeds from the notes will largely be used to refinance existing debt of about AUD350m. The 'RR3' recovery rating assigned to the notes reflects our expectation of at least a 51% value recovery for the note holders in the event of default, based on the agency's assessment of the liquidation value of Emeco's rental fleet and other assets under a stressed situation. As a result, under Fitch's recovery rating methodology, the bond is rated a notch above Emeco's Issuer Default Rating (IDR). Emeco's ratings reflect the high sensitivity of its earnings to commodity cycles, due to its position as a rented equipment supplier to mining companies. The ratings also take into account Emeco's low operating leverage, Fitch's expectation of an improvement in Emeco's financial profile, and Emeco's flexibility in managing capex, which allows it to preserve operating cash flows during industry downturns. KEY RATING DRIVERS High Cyclicality: Emeco's focus on mine production provides more stable revenues compared to exploration and new mine development, although the ability of mining counterparties to cancel contracts, typically between 30 to 180 days, brings with it volatility and asset underutilization. This explains Emeco's 30% drop in EBITDA in the financial year ended June 2013 (FY13) and Fitch's expectation of a further 50% drop in EBITDA in FY14. Rental Fleet Utilization to Improve: Emeco's overall utilization has trended downwards since early 2012, driven by weak volumes in its Australian coal business. Coal miners have been reducing overburden removal volumes in response to weak global coal prices. Fitch does not expect this trend to continue and expects the utilization rates of Emeco's assets to improve - Emeco's Australian business is already showing signs of picking up. It has secured new contracts which should help increase its utilisation rates in Australia to about 50% in June 2014, up from 40% in the six months to 31 December 2013. Diversification: In FY13, 61% of revenue was generated in Australia, with coal (both thermal and metallurgical) making up 42% of revenue. Earnings derived from Australia are volatile due to the generally high cost of Australian thermal coal on a global scale. Coal production has remained buoyant, although coal producers' response to weak commodity prices has been to optimize productivity and reduce costs by lowering strip ratios, by mining in areas that require less removal of overburden. However, Emeco's geographical diversification has helped it redeploy its fleet of 700-odd vehicles among different industries and regions, which underpins its ability to optimize rental fleet utilization. High Quality Fleet: Emeco's strategy of disposing most of its equipment about halfway through expected lifespans ensures it maintains a relatively young fleet with low operating hours, which is attractive to mining companies. This, coupled with the generic nature of most of its assets, aids in the resale of these assets. Over the past seven years, the company has disposed of between AUD20m to AUD50m of assets at generally above-depreciated value. The recurring nature of these cash inflows helps to mitigate the volatility in operating cash flows. Improving Financial Profile: Fitch expects Emeco to deleverage from FY14 onwards, due to both improving utilization and a substantially curtailed expansionary capex spend. However, Emeco's leverage, as measured by net debt/EBITDA, is likely to deteriorate in FY14, compared to 2.4x in FY13, mainly due weak average utilization. RATING SENSITIVITIES Positive rating action is not envisaged in the medium term. A meaningful reduction in Emeco's portfolio risk profile, so that there is greater geographical and commodity diversification, would be necessary before any positive rating action were possible. Negative: Future developments that may, individually or collectively lead to negative rating action include: - A failure to reduce leverage as measured by net debt/EBITDA to below 3.0x by FY16. JKD CANVAS: Cor Cordis Appointed as Administrators -------------------------------------------------- Ozem Azzam Kassem -- okassem@corcordis.com.au -- and Jason Tang -- jtang@corcordis.com.au -- at Cor Cordis were appointed as administrators of JKD Canvas Pty Limited ATF JKD Canvas Trust, trading as B & J PVC & Canvas, on March 13, 2014. A first meeting of the creditors of the Company will be held at Boardroom, Level 19, 10 Eagle Street, in Brisbane on March 25, 2014, at 11:00 a.m. KORAY BONDI: Placed Into Administration --------------------------------------- Danny Vrkic at DV Recovery Management was appointed as administrator of Koray Bondi Pty Limited on March 14, 2014. A first meeting of the creditors of the Company will be held at the office of DV Recovery Management, Level 1, 76 Market Street, in Wollongong, New South Wales, on March 26, 2014, at 11:00 a.m. NEWCASTLE KNIGHTS: Deadline for AUD10MM Bank Guarantee Looms ------------------------------------------------------------ Melinda Oliver at SmartCompany reports that a deadline is looming for former billionaire Nathan Tinkler to pay a reported AUD10.52 million sum to his NRL club, Newcastle Knights. SmartCompany, citing a report in The Australian Financial Review, says if Mr. Tinkler fails to hand over the bank guarantee, he could lose control of the club. The fee is due on March 31, a two month extension on the original deadline, the report notes. According to the report, Mr. Tinkler's company Hunter Sports Group is the principal owner of the rugby league club. The bank guarantee was part of a deal Mr. Tinkler signed when he took over the club in 2011. SmartCompany says the Newcastle Knights released a statement on March 18 declaring the payment will be met. "The bank guarantee is due for renewal on March 31, 2014, and will be in place by the due date," the club said. "This is an annual agreement, as part of the audit, between the Hunter Sports Group and the Members Club." The statement follows comments in the AFR by Knights Members chairman Nick Dan, who told the paper he wanted the bank guarantee details finalised ahead of the deadline, and that a backup strategy was in place to take over the team if the guarantee was not met, according to SmartCompany. "I would not think the Members Club would agree to another extension," Mr. Dan told the AFR. The AFR reported if Mr. Tinkler's business cannot meet the deadline, Knights members could commence legal action to secure the money, adds SmartCompany. SmartCompany notes that the news follows the collapse of Mr. Tinkler's minerals asset Aston Metals in November last year, with voluntary administrators appointed. The minerals company was previously placed in receivership in September last year as secured creditors aggressively pursued unpaid debts. Mr. Tinkler was formerly listed on the 2012 BRW Rich List at a value of around AUD915 million but failed to make the list in 2013. His fortune took a dive when he was forced to sell around AUD300 million of shares in Whitehaven Coal, SmartCompany discloses. OCEAN ABALONE: Bought Out of Receivership ----------------------------------------- Port Lincoln Times reports that Ocean Abalone Australia has been bought out of receivership, and its management is hopeful the operation will have a fruitful future. Formerly known as Australian Bight Abalone, the farm was placed into receivership twice, but has now been bought out of receivership for the second time, according to Port Lincoln Times. The report notes that General Manager Verne Lindsay would only say that a Queensland-based company had bought Ocean Abalone Australia, located in Elliston, but also purchased a "little land farm formerly known as Streaky Bay Aquaculture". The report relates that Mr. Lindsay said the Elliston farm had not stopped operating, even during the times it was in receivership, and had continued to employ local people in Elliston. Mr. Lindsay also said the Streaky Bay land farm had been operating after being closed in 2011, although it was looking for more stock, the report discloses. The Streaky Bay land farm will eventually supply the Elliston sea farm with stock to grow in the sea, Mr. Lindsay said, the report relays. SMART ABS 2014-1US: Moody's Rates AUD15.809MM Class E Notes 'Ba2' ---------------------------------------------------------------- Moody's Investors Service has assigned definitive ratings to notes issued by Perpetual Trustee Company Limited in its capacity as trustee of the SMART ABS Series 2014-1US Trust. Issuer: SMART ABS Series 2014-1US Trust USD 90.00 million Class A-1 Notes, Assigned P-1 (sf); USD 94.00 million Class A-2a Notes, Assigned Aaa (sf); USD 40.00 million Class A-2b Notes, Assigned Aaa (sf); USD 70.00 million Class A-3a Notes, Assigned Aaa (sf); USD 96.00 million Class A-3b Notes, Assigned Aaa (sf); USD 50.00 million Class A-4a Notes, Assigned Aaa (sf); USD 60.00 million Class A-4b Notes, Assigned Aaa (sf); AUD 9.486 million Class B Notes, Assigned Aa3 (sf); AUD 17.390 million Class C Notes, Assigned A2 (sf); AUD 17.390 million Class D Notes, Assigned Baa3 (sf); AUD 15.809 million Class E Notes, Assigned Ba2 (sf). The AUD 15.810 million Seller Notes are not rated by Moody's. The Class A-1, Class A-2a, Class A-3a and Class A-4a Notes are fixed rate Notes while the Class A-2b, Class A-3b and Class A-4b Notes are floating rate Notes. The transaction is a securitisation of a portfolio of Australian novated leases, commercial hire purchase agreements, chattel mortgages and finance leases secured by motor vehicles, originated by Macquarie Leasing Pty Limited ("Macquarie"). This is Macquarie's first ABS transaction issued in 2014. Ratings Rationale SMART ABS Series 2014-1US Trust replicates structures seen in previous SMART transactions sponsored by Macquarie, and closely follows the structure seen in other SMART ABS Series offered in the US. Notable features of the transaction include the conservative composition of the receivables pool backing the transaction, the USD-denominated senior notes and the sequential to pro-rata principal repayment profile. The pool includes a high percentage of novated leases (63%), which exhibit a lower level of risk than other contract types. At the same time, the deal is exclusively backed by motor vehicles, predominantly cars. Past non-US SMART transactions and other Australian ABS transactions typically include 10-15% of other equipment types. Motor vehicles exhibit less pro-cyclical default patterns and, on average, higher recovery rates. As a result, Moody's views the SMART ABS Series 2014-1US Trust pool as having more positive collateral characteristics than peer portfolios. In order to fund the purchase price of the portfolio, the Trust is issuing six classes of Notes across twelve tranches. The Notes will be repaid on a sequential basis in the initial stages (until the subordination percentage increases from the initial 12.0% to 18.9%, and from 13.0% to 19.9% including the liquidity reserve) and once the transaction reaches the 10% pool factor. At all other times, the structure will follow a pro rata repayment profile. This principal paydown structure is comparable to other structures in the Australian ABS market in recent years. The deal includes seven senior, USD-denominated tranches. The Class A-1 Notes are fast-pay money-market notes, rated P-1. The Class A Notes will be repaid sequentially within the Class A Note allocation. The ratings are based on the credit enhancement provided by the subordinated notes and the liquidity reserve, in total equal to 13% for the Class A Notes. An unusual feature of this and previous USD-denominated SMART transactions is that the maturity dates of the Class A Notes were set not with reference to the maturity of the longest dated receivable but rather with reference to the scheduled principal amortisation profile (with a certain buffer to allow for defaults and delinquencies). Moody's has accounted for the possibility of losses and delinquencies during the term of the Class A Notes in its assessment of the likelihood of their repayment and believes scheduled principal amortisation to be sufficient to repay the Class A Notes by the maturity dates in full. Moody's base case assumptions are a default rate of 1.90% and a recovery rate of 40.00%. These rates imply an expected (net) loss of 1.14%. Both the default rate and the recovery rate have been stressed relative to extrapolated historical levels of 1.50% (extrapolated) and 54.13% respectively. The ratings address the expected loss posed to investors by the legal final maturity. The structure allows for timely payment of interest and ultimate payment of principal by the legal final maturity. Methodology Underlying the Rating Action: The principal methodology used in this rating was "Moody's Approach to Rating Auto Loan-Backed ABS" published in May 2013. Factors That Would Lead to an Upgrade or Downgrade of the Rating: Levels of credit protection that are greater than necessary to protect investors against current expectations of loss could lead to an upgrade of the rating. Moody's current expectations of loss could be better than its original expectations because of fewer defaults by underlying obligors or higher recoveries on defaulted loans. The Australian job market and the market for used vehicles are primary drivers of performance. Levels of credit protection that are insufficient to protect investors against current expectations of loss could lead to a downgrade of the ratings. Moody's current expectations of loss could be worse than its original expectations because of more defaults by underlying obligors or lower recoveries on defaulted loans. The Australian job market and the market for used vehicles are primary drivers of performance. Other reasons for worse performance than Moody's expects include poor servicing, error on the part of transaction parties, a deterioration in credit quality of transaction counterparties, lack of transactional governance and fraud. Moody's Parameter Sensitivities: If the default rate rises to 3.80% (double Moody's assumption of 1.90%) and recovery rates are reduced to 20% (half Moody's assumption of 40%) then the model-indicated rating for the Class A4 Notes and Class B Notes both drop seven notches to Baa1 and Ba1 respectively. ========= C H I N A ========= YANLORD LAND: Moody's Assigns Ba3 Rating to Sr. Unsec. SGD Bonds ---------------------------------------------------------------- Moody's Investors Service has assigned a Ba3 rating to Yanlord Land Group Ltd's proposed senior unsecured SGD bonds. Moody's has also affirmed the company's Ba3 corporate family rating, Ba3 senior unsecured debt rating, and the Ba3 rating to the RMB bond issued by Yanlord Land (HK) Co., unconditionally guaranteed by Yanlord Land Group Limited. The ratings outlook is stable. The proceeds of the proposed notes will be used for debt refinancing. Ratings Rationale "The proposed bonds will improve Yanlord's liquidity position, help fund future growth and improve the company's debt maturity profile," says Lina Choi, a Moody's Vice President and Senior Analyst. "As part of the proceeds will be used for debt refinancing, the proposed bonds will not result in any material increase in the company's debt leverage," adds Choi, who is also the Lead Analyst for Yanlord. Yanlord's book debt increased to RMB17.5 billion at end-2013 from RMB13.6 billion at end-2012, as the company used debt to fund existing and new projects. Its debt leverage at end-2013 -- as measured by revenue to debt -- of 0.7x is weak for a Ba rating category. Moody's expects Yanlord's debt leverage to stay at this level over the next two years. On the other hand, Yanlord's operating performance improved materially in 2013, as it adjusted its business model and sold a higher proportion of mass market products. It recorded growth in contracted sales of RMB3 billion, taking the total to approximately RMB15 billion in 2013. Moody's expects that the company will post a 10%-15% growth in contracted sales in 2014, resulting in revenue growth in 2014 and 2015. Its revenue to debt ratio should therefore stay at current levels, as the expected higher revenues will offset the increased levels of debt used to fund growth. However, its increased focus on the sale of mass market products has resulted in a narrower adjusted EBITDA margin of 32% in 2013 from 36% in 2012. As a result, its adjusted EBITDA/interest was 3.2x in 2013, and which may be weakened to 2.7x-3.0x over the next two years. Nonetheless, such levels would support its Ba3 rating. "Despite Yanlord's weakening interest coverage over the next 24 months, it will likely maintain its contracted sales growth levels and engage in disciplined land acquisitions, which should ensure a sound liquidity position to buffer against market volatility," says Choi. Yanlord's liquidity strength is reflected by its cash on hand of RMB7.1 billion at end-2013, which is equivalent to 2x its short- term debt. Given its estimated operating cash flow of RMB2.5- RMB3.0 billion over the next 12 months, the company has sufficient resources to fully cover its short-term maturing debt of RMB3.6 billion and committed land payment premiums of around RMB1.4 billion over the same period. Moody's believes that Yanlord will not undertake aggressive land acquisitions that would lead to a weakening of its liquidity position, because the company has a track record of spending less than 20% of its annual contracted sales on such acquisitions. In 2013, Yanlord spent RMB2.9 billion on land purchases, and which represented 19.5% of its contracted sales, versus 16% in 2012. The stable ratings outlook reflects Moody's expectation that Yanlord will continue to achieve contracted sales growth and maintain prudent financial management to maintain adequate liquidity. Upgrade factors would emerge if the company: (1) substantially achieves its presales target over the next 12 months and improves its balance sheet liquidity, and (2) achieves an EBITDA/interest coverage of over 3.5x-4.0x on a sustained basis. The ratings could be downgraded if Yanlord: (1) fails to execute its sales plan such that liquidity weakens, as reflected in cash/short term debt coverage falling below 1.0x-1.5x, or (2) engages in other material land acquisitions that strain its liquidity, and/or (3) exhibits weakening credit metrics, with EBITDA/interest under 2.5x for a sustained period. The principal methodology used in these ratings was the Global Homebuilding Industry published in March 2009. Yanlord Land Group Limited is one of the major property developers in China. It operates in the major cities of Shanghai, Nanjing, Suzhou, Shenzhen, Tianjin, Tangshan, Zhu Hai, Sanya, and Chengdu. It was established in 1993 and was listed on the Singapore Stock Exchange in 2006. YANLORD LAND: S&P Assigns 'BB-' Rating to Proposed SGD Sr. Notes ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' long-term issue rating and 'cnBB+' long-term Greater China regional scale rating to a proposed issue of Singaporean dollar-denominated senior unsecured notes by Yanlord Land Group Ltd. (Yanlord: BB- /Stable/--; cnBB+/--). The China-based real estate developer will use the proceeds to refinance its existing debts. The ratings on the notes are subject to S&P's review of the final issuance documentation. "We have equalized the issue rating to the corporate credit rating because we believe Yanlord's ratio of priority debt to total assets will likely remain below our notching threshold of 15% for speculative-grade issuers. Yanlord's ratio was below the threshold in 2013. We expect Yanlord's sound relationship with banks and its experience in tapping the offshore borrowing market would facilitate the company to continue obtaining offshore borrowings," S&P said. Yanlord achieved total contract sales of about 15 billion Chinese renminbi in 2013, which is higher than S&P's previous forecast. S&P expects the company will increase expenditures on land acquisition and construction as it plans to accelerate its sales turnover. S&P estimates its sales growth will offset its higher expenditure, resulting in credit metrics remaining stable in the next 12 months. In S&P's base-case scenario, it forecasts Yanlord's debt-to-EBITDA ratio at 4.0x-4.5x in 2014 and its EBITDA interest coverage will stay above 3x. The ratings on Yanlord reflect S&P's view of the company's concentration risk in the mid- to high-end residential market, project concentration risk, and declining profitability as S&P expects Yanlord will adopt an accommodative pricing strategy to accelerate sales. Yanlord's established market position and brand recognition in the mid- to high-end residential market, improving financial flexibility with extensive financing channels in the onshore and offshore markets, and proven execution record temper these weaknesses. ZHEJIANG XINGRUN: Facing Bankruptcy With More than $500MM Debt -------------------------------------------------------------- Reuters reports that a Chinese property developer owing CNY3.5 billion ($566.52 million) to banks and individuals is teetering at the edge of insolvency, and its owner has been detained for illegal fund-raising, domestic media reported, citing local officials. Zhejiang Xingrun Real Estate Co, based in Fenghua in eastern Zhejiang province, owes 15 domestic banks 2.4 billion yuan, Reuters relates citing state-owned China News Services. Reuters says the company illegally raised most of the remaining funds from 98 individual investors. Private fundraising is common but illegal in China, Reuters notes. "As far as we know, this is the largest property developer in recent years that is at risk of bankruptcy," wrote Zhang Zhiwei of Nomura Securities in a research note, Reuters relays. "We believe more property developers will face similar pressures as transaction volumes slow and cash flow conditions tighten." According to the news agency, bankruptcies and bank loan defaults in China are common, but the size of Zhejiang Xingrun's outstanding loans, and the fact that the near-bankruptcy troubles follow shortly after China's first public bond default on March 7, is likely to rattle investors. ========= I N D I A ========= ABG SHIPYARD: Corporate Debt Restructuring Fails to Take Off ------------------------------------------------------------ The Economic Times reports that a 22-member lenders' consortium led by ICICI Bank has failed to agree on a proposal from ABG Shipyard to recast its INR11,500-crore loan, a majority of which turned into dud assets on their books, sources said March 15. "There was no consensus on the terms of the loan restructuring proposal from ABG Shipyard at the corporate debt restructuring cell meeting held last Friday [March 16]," a senior official of a state-run bank told PTI, adding that banks are not sure about the promoter's ability to bring in fresh equity contribution of around INR300 crore, the report relays. According to the report, sources said the consortium has around INR2,600 crore exposure to the troubled company, while SBI's (rpt) SBI exposure is around INR1,600 crore. The other main lenders include IDBI Bank with a stuck loan of INR1,400 crore, while Punjab National Bank and Bank of Baroda have around INR700 crore each and the Exim Bank has INR700 crore. The report relates that another public sector banker said that promoters have already brought in INR80 crore as fresh equity, but they are not sure about their ability to bring in INR220 crore more. "If the promoters can bring in this amount before the end of the month, then it could still be worked out," the source, as cited by ET, said. ET notes that the company has been looking to recast its INR11,500 crore loan since last November. In late January, lenders had agreed to throw a lifeline to the Surat-based shipyard, which is the largest private sector ship builder in India, the report adds. ABG Shipyard Limited belongs to the Agarwal Business Group (controlled by Mr Rishi Agarwal) and is the largest private shipyard in the country, in terms of the order book. ASL is engaged in the construction and repair of various types of vessels as well as rigs. ASL has constructed and delivered 156 vessels over the last 23 years. ASL has capacity to build vessels up to 1,20,000 Dead Weight Tonnage (DWT) at Dahej and upto 20,000 DWT at Surat, Gujarat. As on October 30, 2012, the unexecuted orderbook of ASL stood at around INR9,000 crore. ALFA VITRIFIED: CRISIL Ups Rating on INR287.3MM Loans to 'B+' ------------------------------------------------------------- CRISIL has upgraded its long-term rating on the bank facilities of Alfa Vitrified Pvt Ltd to 'CRISIL B+/Stable' from 'CRISIL B/Stable' and reaffirmed its rating on AVPL's short-term bank facilities at 'CRISIL A4'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 27 CRISIL A4 (Reaffirmed) Cash Credit 80 CRISIL B+/Stable (Upgraded from 'CRISIL B/Stable') Term Loan 207.3 CRISIL B+/Stable (Upgraded from 'CRISIL B/Stable') The upgrade reflects CRISIL's expectation of improvement in AVPL's liquidity on account of anticipated increase in cash accruals, following healthy growth in revenue. The healthy offtake of the company's products after commencement of operations in August 2012 has been supported by its promoters' industry experience. The promoters have also extended unsecured loans to the company to support its liquidity and are likely to continue to do so if required. The ratings reflect AVPL's below-average financial risk profile marked by high gearing, and the company's large working capital requirements. These rating weaknesses are partially offset by the extensive industry experience of AVPL's promoters and the strategic location of its manufacturing facility. Outlook: Stable CRISIL believes that AVPL will continue to benefit over the medium term from its strategic location in Morbi (Gujarat) and its promoters' extensive experience in the ceramic tiles industry. The outlook may be revised to 'Positive' if the company records more- than-expected revenue growth and profitability and improves its working capital management. Conversely, the outlook may be revised to 'Negative' if AVPL's revenue and profitability are less than expected or if the company takes up a major debt-funded capital expenditure programme or witnesses stretch in working capital cycle. AVPL, incorporated in 2011, was promoted by Mr. Lalitbhai Sanghai. The company manufactures ceramic vitrified tiles and has capacity of 6500 boxes per day at its Morbi plant. It commenced production in August 2012. BEEPEE ENTERPRISE: CRISIL Reaffirms 'B+' Rating on INR45MM Loans ---------------------------------------------------------------- CRISIL ratings on the bank facilities of Beepee Enterprise Private Limited continue to reflect BEPL's below-average financial risk profile marked by modest net worth, and weak debt protection metrics, large working capital requirements, and modest scale of operations. These rating weaknesses are partially offset by the benefits that BEPL derives from the extensive experience of its promoters in the textile industry, and established relationship with its customers. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 35 CRISIL B+/Stable (Reaffirmed) Foreign Demand Bill Purchase 20 CRISIL A4 (Reaffirmed) Letter Of Guarantee 3 CRISIL A4 (Reaffirmed) Proposed Long Term Bank Loan Facility 10 CRISIL B+/Stable (Reaffirmed) Outlook: Stable CRISIL believes that BEPL will maintain its stable business risk profile over the medium term, backed by its promoter's extensive industry experience and established customer relationship. The outlook may be revised to 'Positive' in case of substantial improvement in BEPL's scale of operations and profitability, leading to better-than-expected cash accruals, or if there is improvement in the company's capital structure or working capital cycle. Conversely, the outlook may be revised to 'Negative' in case of deterioration in the company's financial risk profile due to further lengthening of working capital cycle or due to decline in revenues and profitability. Update For 2012-13 (refers to financial year, April 1 to March 31), BEPL registered revenues of INR261 million as against INR252 million a year ago. The modest revenue growth was mainly on account of improved demand from its end customers. The company is further expected to register modest revenues in the current year of 2013- 14. The operating profitability of the company improved to 7 per cent in 2012-13 as against 5.5 per cent in the previous year on the back of improved realization. Over the medium term, the operating profitability is expected to be sustained under similar levels. The operations of the company are working capital intensive reflected by gross current assets (GCA) days of 215 as on March 31, 2013. Higher GCA days are on account of higher inventory days of 145 days maintained by the company during the same period. This has resulted in high working capital requirements thereby constraining its financial risk profile. BEPL had a high gearing of 2.5 times as on Mar 31, 2013 on account of its modest accretion to reserves and small net worth base of INR44 million as on Mar 31, 2013. The company is also expected to incur capital expenditure of about INR60 million over the medium term which is expected to constrain its financial risk profile. BEPL has stretched liquidity. For 2013-14, its cash accruals are expected to be modest at around INR4 million against zero debt obligations. Furthermore, the company has highly utilised its bank limits of INR55 million at an average of 98 per cent over the ten months through September 2013. CRISIL believes that BEPL's liquidity profile will remain constrained over the medium term on account of its modest cash accruals and large capex plans. BEPL reported a profit after tax (PAT) of INR1.8 million on operating income of INR261 million for 2012-13, against a PAT of INR1.7 million on operating income of INR252 million for 2011-12. BEPL was incorporated in 2003, by Mr. Chandrakishor Poddar along with his sons, Mr. Anup Poddar and Mr. Anil Poddar. The company manufactures of bed sheets, table cloths, serviettes, chair covers, moulton, table linens, duvets, and mats. BEPL's customers include various reputed players such as Air India Ltd, Taj Hotels Resorts and Palaces, and Hotel Leela Ventures Ltd. BISHANDAYAL INDERCHAND: CRISIL Cuts Rating on INR250MM Loan to D ---------------------------------------------------------------- CRISIL has downgraded its rating on the long-term bank facilities of Bishandayal Inderchand Jewellers (BIJ) to 'CRISIL D' from 'CRISIL BB-/Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 150 CRISIL D (Downgraded from 'CRISIL BB-/Stable') Proposed Cash Credit Limit 50 CRISIL D (Downgraded from 'CRISIL BB-/Stable') Proposed Long Term Bank Loan Facility 50 CRISIL D (Downgraded from 'CRISIL BB-/Stable') The rating downgrade reflects continuous over-utilisation of BIJ's cash credit account for a period of more than 30 days owing to weak liquidity, mainly because of restrictions on import of gold. BIJ's financial risk profile is below-average, marked by high gearing and weak debt protection metrics. Also, the firm's business is subject to geographical concentration, and exposure to intense industry competition. These weaknesses are partially offset by the extensive experience of BIJ's promoters in the jewellery industry as well as efficient inventory risk management supported by back-to-back inventory booking with suppliers. BIJ was set up as a partnership concern in 2005 by the Tibarewal family of Cuttack (Orissa). The firm has a retail showroom (800 square feet) in Cuttack; it is a retailer of silverware. In 2011, BIJ changed its business model and entered into wholesaling and retailing of 24-carat gold jewellery with a small proportion of silverware work. The firm's day-to-day operations are being managed by two brothers, Mr. Rohit Tibarewal and Mr. Anurag Tibarewal. CHINTAMANI JEWELS: ICRA Assigns 'B+' Rating to INR8cr Loan ---------------------------------------------------------- ICRA has assigned a long term rating of '[ICRA]B+' to the INR8.00 crore long term fund based facilities (Cash Credit) of Chintamani Jewels. ICRA has also assigned a short term rating of '[ICRA]A4' to the INR8.00 crore short term non-fund based sub limits of the entity. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term, fund- 8.00 [ICRA]B+ based facilities (Cash Credit) Short-term, non (8.00) [ICRA]A4 fund-based facilities The ratings take into account the promoter's long experience and operating track record of almost three decades in the gems and jewellery industry, along with strong revenue growth in FY13 aided by higher share of gold ornaments trading. The ratings are however constrained by CJ's stretched financial profile given the high gearing levels and stretched liquidity position on account of elongated receivable cycle. ICRA also notes the regulatory risk and capital withdrawal risk due to business constitution as partnership firm, and exposure to currency fluctuation risk on dollar receivables. The margins also remain thin given the trading nature of business and exposure to intense competition in jewellery trading. Chintamani Jewels (CJ) is a partnership concern established in 2011 for trading of bullion and gold jewellery in the domestic markets. It purchases gold from the local market and outsources the manufacturing to job workers in Zaveri Bazaar, Mumbai. It has a jewellery manufacturing unit in Surat SEZ which will commence operations from March 2014. Recent results: As per its audited results for FY 2012-13, CJ reported profit after tax (PAT) of INR0.34 crore on operating income of INR76.76 crore. As per its unaudited results for the nine months ended December 2013, CJ reported profit before tax of INR0.53 crore on operating income of INR70.40 crore. CLC TEXTILE: ICRA Suspends 'B' Rating on INR17.5cr LT Loan ---------------------------------------------------------- ICRA has suspended '[ICRA]B' rating assigned to the INR17.5 crore, long term loans of CLC Textile Park 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 ICRA's suspension policy, ICRA may suspend any rating outstanding if in its opinion there is insufficient information to assess such rating during the surveillance exercise. DAYAL LUMBERS: ICRA Reaffirms 'B+' Rating on INR1.5cr Loan ---------------------------------------------------------- ICRA has reaffirmed the long-term rating of [ICRA]B+ assigned to the INR1.5 crore (revised from INR1.2 crore) cash credit facilities of Dayal Lumbers (P) Limited. ICRA has also reaffirmed the short-term rating of [ICRA]A4 assigned to the INR8.5 crore (revised from INR7.0 crore) letter of credit facilities of DLPL. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Cash Credit 1.5 [ICRA]B+ Reaffirmed Letter of Credit 8.5 [ICRA]A4 Reaffirmed The rating reaffirmation takes into consideration scale-up of DLPL's operations backed by continued demand for imported timber in the Indian market and comfortable liquidity profile supported by adequate fund-based credit facilities. The ratings also continue to incorporate management's extensive experience in the wholesale timber trading business and a well established client- base. The above strengths are however mitigated by the low profitability which is reflective of the highly fragmented nature of the timber trading industry as well as the negligible value addition in the business involving only processing of timber logs into desired sizes. With majority of timber being sourced from international markets, the company's profit margins are vulnerable to fluctuations in foreign exchange rate. Also, expansion plans of the company to set up around 20 self-owned sawing machines may increase the reliance on external borrowings and exert pressure on the credit profile of the company. Dayal Lumbers Private Limited was incorporated in 2010 and is into trading of imported timber. The company was promoted by Mr. Rajesh Mittal and his family, which is into timber trading for the past 30 years. Until 2010, the timber business was carried out under a partnership firm, named 'Dayal Timber Store' which was dissolved prior to incorporation of DLPL. The company purchases timber (imported from Malaysia) which is processed at its facility in Gandhidham (Gujarat) and is supplied to wholesalers across the country. DHIR GLOBAL: CRISIL Assigns 'D' Rating to INR350MM Loans -------------------------------------------------------- CRISIL has revoked the suspension of its ratings on the bank facilities of Dhir Global Industria Pvt Ltd and has assigned its 'CRISIL D/CRISIL D' ratings to these facilities. The ratings had been suspended by CRISIL as per its rating rationale dated November 19, 2013, as DGIPL had not provided the necessary information required for reviewing the ratings. The company has now shared the requisite information, thereby enabling CRISIL to assign ratings to the bank facilities. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 5 CRISIL D (Assigned; Suspension revoked) Cash Credit 85 CRISIL D (Assigned; Suspension revoked) Foreign Bill Purchase 60 CRISIL D (Assigned; Suspension revoked) Letter of Credit 95 CRISIL D (Assigned; Suspension revoked) Packing Credit 90 CRISIL D (Assigned; Suspension revoked) Rupee Term Loan 15 CRISIL D (Assigned; Suspension revoked) The ratings reflect instances of delays by DGIPL in servicing its term debt obligations; the delays have been caused by the company's weak liquidity, driven by stretched receivables. DGIPL also has a modest scale of operations in the competitive ready-made garments industry with high working-capital-intensity, and a below-average financial risk profile, marked by depressed accruals. However, the company benefits from the extensive experience of its promoters in the ready-made garment industry. DGIPL, based in Gurgaon (Haryana) was promoted by Mr. M K Dhir and his family members in 1999. The company manufactures ready-made garments, which it sells in the domestic and export markets. Its manufacturing facility is based in Gurgaon. ENSOL MULTICLEAN: CRISIL Ups Rating on INR22.1MM Loans to 'B' ------------------------------------------------------------- CRISIL has upgraded its rating on the long-term bank facilities of Ensol Multiclean Equipments Pvt Ltd to 'CRISIL B/Stable' from 'CRISIL B-/Stable' and has reaffirmed the rating on its short-term facilities at 'CRISIL A4'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 55 CRISIL A4 (Reaffirmed) Cash Credit 20 CRISIL B/Stable (Upgraded from CRISIL B-/Stable) Term Loan 2.1 CRISIL B/Stable (Upgraded from CRISIL B-/Stable) The rating upgrade reflects CRISIL's belief that EMPL's liquidity will continue to be supported by funding support from promoters in the form of equity and unsecured loans and its sufficient cash accruals against low term debt obligations. The company's accruals are expected to increase in 2013-14 (refers to financial year, April 1 to March 31) on account of expected ramp-up in operations in the period. The company is expected to generate cash accruals of around INR2.0 million against its minimal term debt obligations of around 0.6 million in the period. CRISIL expects EMPL's liquidity to be supported by the funding support from promoters and absence of any major term debt obligations. The ratings continue to reflect EMPL's below-average financial risk profile, marked by a small net worth, high gearing, and below-average debt protection metrics. The ratings also reflect company's modest scale of operations along with average operating margin and working-capital-intensive operations. These ratings weaknesses are partially offset by the benefits that EMPL derives from its promoters' extensive industry experience and funding support it receives from them. Outlook: Stable CRISIL believes that EMPL will benefit over the medium term from the extensive industry experience of its promoters; however, EMPL's financial risk profile shall remain constrained by its small net worth. The outlook may be revised to 'Positive' in case of substantial improvement in EMPL's scale of operations with improvement in profitability, working capital management, and capital structure. Conversely, the outlook may be revised to 'Negative' in case of larger-than-expected incremental working capital requirements due to delays in project execution or realisation of payments, thus weakening its financial risk profile. EMPL was set up in 1999 in Jaipur (Rajasthan) by Mr. Arun Sharma and Mr. Ajay Sharma. The company manufactures and assembles customised waste handling mobile equipment such as garbage compactors and tippers, mainly for state government projects. GAURAVHWINES PRIVATE: ICRA Suspends B Rating on INR10cr Loan ------------------------------------------------------------ ICRA has suspended [ICRA]B rating assigned to the INR10.0 crore fund based limits of GauravhWines 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. GOKUL GINNING: ICRA Reaffirms 'B+' Rating on INR6cr Loan -------------------------------------------------------- ICRA has reaffirmed the '[ICRA]B+' rating for the INR6.00 crore (enhanced from INR5.45 crore) fund based facilities of Gokul Ginning and Oil Industries. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term fund based-Cash Credit 6.00 [ICRA]B+ reaffirmed The ratings continue to be constrained by the firm's weak financial profile as reflected by low profitability, leveraged capital structure and weak debt coverage indicators. The ratings also take into account the low value additive nature of operations and intense competition on account of fragmented industry structure leading to thin profit margins. The ratings are further constrained by vulnerability of profitability to adverse fluctuations in raw material prices which are subject to seasonal availability of raw cotton and government regulations on MSP and export quota. Further, GGOI being a partnership firm, any significant withdrawals from the capital account would affect its net worth and thereby the gearing levels. The ratings, however, positively factors in the long experience of the promoters in the cotton ginning and pressing business and the advantages arising from the firm's proximity to the raw material sources which ensures regular and easy availability of raw cotton as well as favorable demand outlook for cotton and cottonseed oil. Established in 2007, Gokul Ginning & Oil Industries (GGOI) is engaged in ginning and pressing of raw cotton to produce cotton bales and crushing of cotton seeds to produce cotton seed oil and cotton seed oil cake. The firm is owned by Mr. Amin Gangani and his relatives. The firm's plant is located at Babra (Gujarat) and is equipped with twenty four ginning machines and one manual pressing machine with a capacity to process 44 MT of raw cotton per day and five expellers with crushing capacity of 840 MT of cotton seeds per day. GURUKRUPA DEVELOPERS: ICRA Assigns B+ Rating to INR125cr Loans -------------------------------------------------------------- ICRA has assigned a rating of [ICRA]B+ to the INR62.50 crore long- term bank facilities and the INR62.50 crore proposed long-term bank facilities of Gurukrupa Developers D N Nagar Project. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-Term Fund 62.50 [ICRA]B+ Assigned Based Limits (TL) Proposed Long-Term Fund Based Limits (TL) 62.50 [ICRA]B+ Assigned The rating is constrained by significant market risks for the firm, as bookings for the Malwani project are yet to commence, together with significant project execution risks as construction is currently at a nascent stage and financial closure for funding the project also remains to be achieved. However, the firm has a clear land title and has paid full consideration for land for the project. Furthermore, the rating draws comfort from the long track record and experience of the promoters in executing real estate projects in Mumbai. Incorporated in 2004, Gurukrupa Developers DN Nagar Project (GD) is a partnership firm involved in real estate development in Mumbai, Maharashtra. The firm is a part of the Gurukrupa Group involved in real estate development mainly in Mumbai, with ~12.86 lakh sq. ft. of real estate properties developed till date. The Group was promoted in 1994 by Mr. Mansukhbhai Kothari, Mr. Mansukhbhai Sureja and Mr. Chetan Patel. The firm is currently executing a residential-cum-commercial redevelopment project -- Shubh Residency -- at Andheri (W), and a residential Malwani Project at Malad (W), Mumbai. JAMPESWAR AGRO: CRISIL Puts 'B' Rating on INR60.3MM Loans --------------------------------------------------------- CRISIL has assigned its 'CRISIL B/Stable/CRISIL A4' ratings to the bank loan facilities of Jampeswar Agro Udyog Pvt Ltd. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Term Loan 37.5 CRISIL B/Stable (Assigned) Proposed Long Term Bank Loan Facility 2.8 CRISIL B/Stable (Assigned) Cash Credit 20 CRISIL B/Stable (Assigned) Letter of Credit 2.7 CRISIL A4 (Assigned) The ratings reflect JAUPL's modest scale of operations in the intensely competitive rice milling industry, and its below-average financial risk profile. These rating weaknesses are partially offset by the extensive industry experience of JAUPL's promoters. Outlook: Stable CRISIL believes that JAUPL will continue to benefit over the medium term from the extensive experience of its promoters in the rice milling industry. The outlook may be revised to 'Positive' in case of increase its scale of operations or better than expected profitability leading to an improvement in its financial risk profile. Conversely, the outlook may be revised to 'Negative' if JAUPL's profitability is lower than expectations, large working capital requirements, or if it undertakes a significant debt- funded capital expenditure programme, leading to weakening of its liquidity. Incorporated in 2012, JAUPL has recently set up a par-boiled rice mill in Birbhum (West Bengal). The rice mill commenced operations in December 2013. The company's day-to-day operations are managed by Mr. Siddhartha Mondal and Mr. Rabindra Nath Chowdhury. MEGAMILES BEARINGS: ICRA Revises Rating on INR5.3cr Loan to B- -------------------------------------------------------------- ICRA has revised the rating outstanding on the INR5.30 crore (revised from INR3.80 crore) long term fund based facilities of Megamiles Bearings Cups Private Limited to [ICRA]B- from [ICRA]C+. ICRA has reaffirmed [ICRA]A4 rating to the INR1.50 crore (revised from INR2.00 crore) short-term non fund based limits of the Company. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term Fund Based Limit 5.30 [ICRA]B-Revised from [ICRA]C+ Short Term Non- fund Based Limit 1.50 [ICRA]A4 / Re-affirmed The revision in long term rating take into account MBCPL's sustained revenue growth and improved margins during 2012-13. Despite sluggish domestic automotive industry, the Company's performance during 2012-13 and H1 2013-14 was supported by increased exports during the period. ICRA notes that the Company has secured healthy export orders which enhances near term revenue visibility. Going forward, the Company's increasing thrust on export market and introduction of new product range is likely to support its business prospects. The ratings also take into account the strong technical background and industry experience of the promoters. However, the ratings remain constrained on account of small scale of the Company's operations thereby restricting the operational and financial flexibility; its exposure to the cyclicality of the domestic automotive industry (largely Commercial Vehicle segment) and high customer concentration with over 90% of the revenues derived from top three customers. Also, the Company's financial profile remains weak as reflected by high gearing of 2.0x times as on March 31, 2013, inadequate coverage indicators and high working capital intensity. Going forward, the Company's ability to scale up its operations, improve its capital structure and reduce its working capital cycle would be the key rating sensitivities. Incorporated in 1990, Megamiles Bearing Cups Private Limited is engaged in manufacturing of cold forged & CNC machined components for automotive applications. The Company's promoters -Mr. Y.S Mahadev, Mr. S. Rudra Prasad, and Mr. B.S. Divakar are technocrats with more than two decades of experience in the automotive components industry. The Company's product portfolio primarily comprises of a wide range of bearing cups which find application in transmission system parts (such as gear box, drive shaft components and propeller shaft components), starter motor components (like solenoid housings) and engine components. With its manufacturing facility located at Jigani Industrial Area (Bangalore), the Company is a tier-1 supplier of gear box and engine components for the commercial vehicle manufacturer, Ashok Leyland Limited. Apart from MBCPL, the promoters also own another company, Megatech Cold Forgings Private Limited (MCFPL) which is engaged in manufacturing of cold forged steel, copper and aluminum components for the automotive and engineering industry. MCFPL also undertakes forging operations for MBCPL. Recent Results For 2012-13, the Company's operating income stood at INR14.8 crore with a profit after tax of INR0.1 crore against profit after tax of INR0.0 crore on operating income of INR14.0 crore in 2011-12. METRO CITY: ICRA Assigns 'D' Rating to INR18.62cr Loans ------------------------------------------------------- The long term rating of [ICRA]D has been assigned to the INR7.75 crore cash credit facility, INR5.00 crore term loans limits and INR3.37 crore unallocated limits of Metro City Tiles Private Limited. The short term rating of [ICRA]D has also been assigned to INR2.50 crore non-fund based facilities of MCTPL. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Cash Credit Limits 7.75 [ICRA]D assigned Term Loans 5.00 [ICRA]D assigned Unallocated Limits 3.37 [ICRA]D assigned Bank Guarantee 2.50 [ICRA]D assigned The assigned ratings are constrained by the stretched liquidity position of the company which has resulted in recent delays in debt servicing. The lower than anticipated profitability on its sales coupled with high working capital intensity and high repayment obligations towards the debt funded capital expenditure have resulted in a stress on the company's cash flows. Further the ratings are constrained by MCTPL's weak financial profile characterized by high gearing levels and poor coverage indicators, small size of current operations and the highly competitive nature of the ceramic tile industry. The ratings also takes into account the vulnerability of MCTPL's profitability to the cyclicality associated with the real estate industry and to the increasing prices of gas, as gas is the major source of fuel. ICRA takes note of the extensive experience of promoters in the ceramic industry and locational advantage due to presence of the company's plant in Morbi (Gujarat), India's ceramic hub giving it easy access to raw material. The group companies are also present in other tile segments, which supports the marketing and sales of the company's products to dealers / builders. Incorporated in the year 2007, Metro City Tiles Private Limited (MCTPL) is involved in manufacturing of vitrified and digital glazed vitrified tiles with its plant situated at Morbi, Gujarat. The plant has an installed capacity of 45000 Metric Tonnes Per Annum (MTPA). MCTPL currently manufactures vitrified tiles of size 2 X 2 sq. ft. and 2 x 4 sq. ft with the current set of machineries at its production facility. MCTPL is promoted by Mr. Dilip R. Patel and his family members. The company is a part of Metro Group of industries having presence across floor tiles (Metro Ceramics), glazed vitrified tiles (MCTPL), polished vitrified tiles and porcelain tiles (Metro World Tiles Pvt. Ltd.). In FY 13, MCTPL reported an operating income of INR18.35 crore and net loss of INR0.60 crore as against an operating income of INR34.00 crore and profit after tax of INR0.33 crore during FY 12. During 9M FY14 (provisional financials), MCTPL reported an operating income of INR21.03 crore. NAVKAR TEX: ICRA Suspends 'B' Rating on INR5.5cr Loan ----------------------------------------------------- ICRA has suspended [ICRA]B rating assigned to the INR5.5 crore bank lines of Navkar Tex Creations. The suspension follows ICRA's inability to carry out a rating due to lack of cooperation from the company. Navkar Tex Creations is a proprietorship firm based in Pali, Rajasthan which is engaged in trading of 'rubia' fabric that is mainly used in ladies saree blouses. The firm procures grey fabric from 'mandis' in Rajasthan and Maharashtra and gets it processed on an outsourced basis in Pali. Pali is home to various fabric processors owing to its conducive water and environment for such processing. The firm sells its fabric to wholesalers across the country through agents on a commission basis. Incorporated in 2008, the firm is managed by second generation entrepreneur Mr. Kalpesh Bhandari. The firm is part of the Pali based ISON group which has interests in real estate development apart from textile trading. P. G. TIMBER: CRISIL Cuts Rating on INR70MM Loans to 'B' -------------------------------------------------------- CRISIL has downgraded its long term rating on bank facilities of P. G. Timber Private Limited to 'CRISIL B/Stable' from 'CRISIL B+/Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 24 CRISIL B/Stable (Downgraded from 'CRISIL B+/Stable') Working Capital 46 CRISIL B/Stable (Downgraded Demand Loan from 'CRISIL B+/Stable') The downgrade reflects deterioration in PGTPL's liquidity profile as reflected by fully drawn bank lines on account of working capital intensive nature of operations. Further, company's profitability has also come under pressure on account of currency fluctuations, as major part of company's raw materials are imported. The rating reflects PGTPL's small and working capital intensive nature of operations. These rating strengths are partially offset by company's moderate financial risk profile. Outlook: Stable CRISIL believes that PGTPL will continue to benefit over the medium term from the extensive industry experience of its promoters. The outlook may be revised to 'Positive' in case of significant increase in volumes, resulting in higher-than-expected net cash accruals or lower-than-expected working capital requirements, which, in turn, will result in improvement in PGTPL's liquidity. Conversely, the outlook may be revised to 'Negative' in case of weakening in the company's operating margin or debt protection metrics or stretch in its working capital cycle. PGTPL was incorporated in December 2007 as a closely held company. It is promoted by Mr. Ajay Gupta and Mr. Ganga Prasad Gupta, who have more than two decades of experience in this line of business. PGTPL manufactures wooden doors and frames and uses scrap timber to produce mouldings. The company's current manufacturing facility is located in Baidyabati, Hooghly (West Bengal). RAGHUVIR BUILDCON: CRISIL Reaffirms B+ Rating on INR100MM Loan -------------------------------------------------------------- CRISIL's rating on the long-term bank facilities of Raghuvir Buildcon Private Limited continues to reflect RBPL's exposure to intense competition in the fragmented civil construction segment and geographic concentration in the RBPL's revenue profile and its, large working capital requirements. These rating weaknesses are partially offset by the extensive experience of the RBPL's promoters in the civil construction business, and average financial risk. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 60 CRISIL A4 (Reaffirmed) Overdraft Facility 100 CRISIL B+/Stable (Reaffirmed) Outlook: Stables CRISIL believes that the RBPL will benefit over the medium term from its promoters' industry experience and comfortable capital structure. The outlook may be revised to 'Positive' if the RBPL's working capital cycle improves, or in case of higher-than-expected revenue growth while maintaining its profitability and capital structure. Conversely, the outlook may be revised to 'Negative', if the RBPL records lower-than-expected profitability; or if its capital structure and debt protection metrics weaken, most likely due to stretch its working capital cycle management or higher than expected debt funded capex. Update RBPL recorded a year-on-year growth of 29 per cent in its turnover to INR546.8 million in 2012-13 (refers to financial year, April 1 to March 31). Until 2012-13, RBPL was catering mainly to Hindustan Construction Company (HCC), However, beginning 2013-14, the company has diversified its customer base and has started undertaking projects for the Government of Gujarat. The company is expected to book a 10% growth in topline during 2013-14. CRISIL believes, that over the medium term, RBPL is expected to sustain its growth momentum, on the back of its moderate order book position of around INR600 million to be executed over the next six to twelve months. RBPL's operating margins are also expected to marginally improve but remain moderate around 8 per cent during 2013-14 supported by better realizations from executed as well as current ongoing projects. CRISIL expects, the group's operating margin to remain stable at around 8 per cent over the medium term. RBPL's gearing has remained comfortable at 1.16 times as on March 2013. With the receivables realization faster from the Government of Gujarat, RBPL's incremental working capital requirements are expected to be funded through a judicious mix of internal accruals and debt. Consequently, RBPL's capital structure is expected to remain comfortable at around 1 times over the medium term. RBPL's debt protection metrics are also expected to remain comfortable over the medium term. RBPL's liquidity remained stretched in line with the past. While its estimated cash accruals of INR 25 million for the year 2014-15 is comfortable to meet its debt repayment obligations of less than INR 5 million, the working capital intensive nature of operations, has resulted in high bank limit utilization levels, which averaged at 95 per cent for the twelve months period ended January 2014. CRISIL expects RBPL's liquidity to remain stretched over the medium term. Incorporated in 1990, RBPL is engaged in undertaking civil construction works such as construction of canals, cement concrete roads, dams, and bridges for state governments. The company is engaged in civil construction activity mainly in Gujarat and Andhra Pradesh. RBPL reported a profit after tax (PAT) of INR 9.6 million on net revenues of INR 546.8 million for 2012-13 (refers to financial year, April 1 to March 31), against a PAT of INR 5.3 million on net sales of INR 425.1 million for 2011-12. RAM BUILDERS: ICRA Reaffirms 'B' Rating on INR7.5cr Loans --------------------------------------------------------- ICRA has re-affirmed the long-term rating of [ICRA]B assigned to the long-term fund based limits of INR2.50 crore and the non-fund based limits of INR5.00 crore of Ram Builders. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based Limit 2.50 [ICRA]B Re-affirmed Non-Fund Based Limit 5.00 [ICRA]B Re-affirmed The rating re-affirmation factors in the firm's small scale of operations, limiting its bidding capacity; its significant 48% de- growth in revenues during FY13 due to execution-related delays; and its moderate order book position with order book/OI ratio of 1.48x times as of December 2013, which provides a moderate revenue visibility going forward. The rating also remains constrained by the firm's high client and geographic concentration risks, with MCGM being its largest customer and all outstanding orders based out of Mumbai. ICRA further notes the intensely competitive environment, with the presence of a large number of civil construction contractors in Mumbai, resulting in high pressure on margins. However, the rating favorably factors in the long track record of the firm and its favorable capital structure with a gearing of 0.12x as of March 31, 2013. Ram Builders is a partnership firm operating for more than six decades as a civil contractor. The firm is registered as Class I-A contractors with PWD Maharashtra, and as Class AA with MCGM, which entitles it to quote for works without limit. The firm has successfully executed several prestigious works for other organizations like CIDCO, Hiranandani, MTNL, UPL Environmental Engineers Ltd., Somaiya Trust, Buildtech, Reliance Industries Limited, Willingdon Sports Club, and the Thane Municipal Corporation. It has also executed several infrastructure works such as cement concrete roads/asphalt roads/mastic roads, RCC work, earth works, laying of sewers/storm water drains/water mains/ducts/rising mains, construction of RCC structures like buildings and underground box drains, construction of bridges and such allied works. SANGINI COMMERCE: CRISIL Assigns 'B-' Rating to INR380MM Loans -------------------------------------------------------------- CRISIL has assigned its 'CRISIL B-/Stable' rating to the long-term bank facilities of Sangini Commerce Pvt Ltd. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Term Loan 350 CRISIL B-/Stable (Assigned) Working Capital Demand Loan 30 CRISIL B-/Stable (Assigned) The rating reflects SCPL's exposure to implementation and funding risks on its ongoing project. SCPL faces high funding risk, since the additional funding for the revised cost of the project has not yet been tied-up. However, the company benefits from the extensive experience of its promoters in the hotel industry and the tie-up with Hyatt group for managing the proposed hotel. Outlook: Stable CRISIL believes that SCPL will continue to benefit over the medium term from its promoter's extensive experience and its association with Hyatt Group. The outlook may be revised to 'Positive' in case of timely execution of SCPL's hotel within the projected cost or in case of higher-than-expected average room rent (ARR) and occupancy levels; resulting in higher-than-expected accruals and better financial risk profile. Conversely, the outlook may be revised to 'Negative' in case of any time or cost overruns, which would adversely impact the company's financial risk profile, and thus its debt-servicing ability. SCPL was incorporated in March 2007 by Mr. Pun Pun Agrawal and Mr. Pawan Agrawal to carry out trading operations. However, in September 2009, SCPL was acquired by Ms. Rani Maurya and Mr. Madhukar Maurya to carry out hotel business. The company is constructing a 150-room premium (five-star category) hotel at Havelia Crossing, Sarnath, Varanasi, and has recently entered into an agreement with the Hyatt group for the management of the proposed hotel. SANKAGIRI SPINTEX: CRISIL Reaffirms 'BB' Rating on INR134MM Loans ----------------------------------------------------------------- CRISIL's ratings on the bank loan facilities of Sankagiri Spintex Ltd reflect its promoters' extensive experience in the textile industry, and its established customer base. These rating strengths are partially offset by SSL's modest scale of operations in the highly fragmented textile yarn industry, below-average financial risk profile marked by high gearing, and the susceptibility of its operating margin to volatility in raw material prices. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 16 CRISIL A4+ (Reaffirmed) Cash Credit 40 CRISIL BB/Stable (Reaffirmed) Letter of Credit 10 CRISIL A4+ (Reaffirmed) Term Loan 94 CRISIL BB/Stable (Reaffirmed) Outlook: Stable CRISIL believes that SSL will continue to benefit over the medium term from its promoters' extensive industry experience. The outlook may be revised to 'Positive' if SSL enhances its scale of operations, and significantly improves its profitability and capital structure. Conversely, the outlook may be revised to 'Negative' if SSL undertakes a large debt-funded capital expenditure (capex) programme, or if its profitability declines significantly, resulting in weakening in its financial risk profile. Update SSL reported operating revenue of INR304 million for 2012-13 (refers to financial year, April 1 to March 31), against INR220 million for 2011-12. Healthy growth in revenue in 2012-13 was on account of pickup in demand for cotton yarn during the year. Consequently, the company's operating margin improved to 10.6 per cent in 2012-13 from 9.2 per cent a year ago. The company reported revenue of INR270 million for the period from April to December 2013 and is likely to report revenue growth of around 15 per cent over the medium term. CRISIL believes that SSL will report stable revenue growth and profitability over the medium term with steady off take from its customers. SSL's financial risk profile remained below average, marked by high gearing of 2.52 times as on March 31, 2013, against 2.86 times as on March 31, 2012. The company did not undertake any significant debt-funded capex programme during 2012-13, and does not plan capex over the medium term. SSL's gearing is expected to improve over the medium term, supported by steady accretion to reserves and absence of capex plans. SSL's liquidity remains moderate, marked by moderate bank limit utilisation and adequate cash accruals to meet debt obligations. The company's bank limit utilisation averaged around 85 per cent over the 10 months through January 2014. SSL is likely to generate cash accruals of INR23 million to INR27 million against term debt obligations of INR17 million per annum over the medium term. CRISIL believes that SSL will maintain its moderate liquidity over the medium term, in the absence of debt-funded capex plans. Set up in 2005, SSL is engaged in cotton yarn spinning, primarily carded yarn in count of 40s. The company is managed by Mr. P Shanmugam. SATYA INFRA: CRISIL Lowers Rating on INR112.5MM Loan to 'B+' ------------------------------------------------------------ CRISIL has downgraded its rating on the long-term bank facilities of Satya Infrastructures Ltd to 'CRISIL B+/Stable' from 'CRISIL BB-/Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Term Loan 112.5 CRISIL B+/Stable (Downgraded from 'CRISIL BB-/Stable') The rating downgrade reflects deterioration in SIL's business risk profile, marked by a lower than expected revenues and operating margin in 2012-13, primarily on account of delay in implementation of its township, Malwa Country in Indore (Madhya Pradesh). The revenues of the company are expected to remain low and had declined to INR 74.8 in 2012-13 from INR 140.9 in 2010-11. The company has only booked about 30 per cent of its total expected revenues of ~INR2.5 billion from this project over the last four years through 2012-13 due to delay in implementation of the project and lower demand, driven by the economic slowdown. Moreover, the operating margins of the company had decline to 2.5 per cent in 2012-13 vis-a-vis an average of 25 per cent over the four years through 2011-12, due to increase in project cost. The rating reflects SIL's high dependence on customer advances for timely completion of its project, and its exposure to the cyclicality inherent in the Indian real estate industry. These rating weaknesses are partially offset by the established track record of SIL's promoters in the construction industry. Outlook: Stable CRISIL believes that SIL will remain susceptible to risks related to project implementation and cyclicality inherent in the Indian real estate industry, over the medium term. The outlook may be revised to 'Positive' in case of timely implementation of the company's ongoing project, leading to healthy and sustainable cash accruals. Conversely, the outlook may be revised to 'Negative' if there are time and cost overruns in SIL's ongoing project, or delays in receiving customer advances, leading to pressure on its revenues and profitability, thus impacting its liquidity. Incorporated in 2005, SIL is part of the Satya group, promoted by Mr. Nawal Kishore Agarwal and his son, Mr. Manish Agarwal. The company develops real estate in northern India. SIL is currently developing Malwa County, a 110-acre township. The project involves the development of plots, group housing, villas, low-rise floors, a commercial complex, a school, and a hospital. The total developed area of the project will be over 3,620,967 square feet (sq ft), comprising residential plots of 2,021,411 sq ft, amenities of 89,099 sq ft, apartments of 471,788 sq ft, and commercial area of 1,038,669 sq ft. SIL reported a profit after tax (PAT) of INR0.8 million on net sales of INR74.8 million for 2012-13, against a PAT of INR7.5 million on net sales of INR51.2 million for 2011-12. SHREE SAIBABA: CRISIL Reaffirms 'B' Rating on INR70.4MM Loans ------------------------------------------------------------- CRISIL's rating on the bank facilities of Shree Saibaba Plasto Products Pvt Ltd continues to reflect SSPPPL's small scale of operations and below-average financial risk profile marked by modest net worth, moderate gearing and inadequate debt protection metrics. These rating weaknesses are partially offset by the extensive experience of SSPPPL's promoters in the plastic goods industry. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 15.5 CRISIL B/Stable (Reaffirmed) Proposed Long Term Bank Loan Facility 9.9 CRISIL B/Stable (Reaffirmed) Term Loan 45 CRISIL B/Stable (Reaffirmed) Outlook: Stable CRISIL believes that SSPPPL will continue to benefit over the medium term from its promoters' extensive industry experience. The outlook may be revised to 'Positive' if there is an improvement in the company's scale of operations and profitability, while it maintains its capital structure. Conversely, the outlook may be revised to 'Negative' if SSPPPL's financial risk profile, especially liquidity, deteriorates, most likely because of lower- than-expected profitability, stretch in its working capital cycle, or large, debt-funded, capital expenditure. Update Largely in line with expectations, SSPPPL recorded revenues of INR102 million at an operating margin of 15 per cent in 2012-13 (refers to financial year, April 1 to March 31) as compared to INR20 million in the previous year. SSPPPL is estimated to register moderate growth in revenues to about INR130 million, but at lower operating margin of 11 per cent, on account of intense competition in the industry. SSPPPL's financial risk profile remains below-average, marked by modest net worth of INR44 million and gearing of around 1.5 times as on March 31, 2013 constrained due to initial phase of operations. Its debt protection metrics were inadequate with interest coverage and net cash accruals to total debt ratios of 1.7 times and 0.06 times, respectively, for 2012-13 (refers to financial year, April 1 to March 31). SSPPPL's financial risk profile is expected to remain constrained over the medium term on account of nominal accretions to reserves. SSPPPL's liquidity is constrained by insufficient cash accruals as against maturing debt obligations albeit supported by unsecured loans extended by promoters. SSPPPL is expected to generate cash accruals of INR5.5 million in 2013-14 which is insufficient to meet its debt obligations of INR9 million maturing during the year. The liquidity of SSPPPL is, however, supported by timely support from promoters in the form of unsecured loans (Rs.6 million as on March 31, 2013) and moderate bank limit utilisation of about 57 per cent for the trailing 12 months through December 2013. SSPPPL was incorporated in February 2010 and began commercial operations in December 2011. The company, based in Kolkata (West Bengal), primarily manufactures moulded plastic furniture. SSPPPL is promoted by Mr. Dharm Vir Sharma, Mr. Ajit Kumar Sharma, and Mr. Santosh Kumar Sharma who have an experience of over a decade in the plastic industry. SSPPPL reported a net loss of INR0.5 million on net sales of INR101 million for 2012-13, as against a net loss and net sales of INR1 million and INR20 million, respectively, for 2011-12. SRI SEETHARAMA: CRISIL Raises Rating on INR40MM Loans to 'B+' ------------------------------------------------------------- CRISIL has upgraded its rating on the long-term bank facilities of Sri Seetharama Constructions (SSC; part of Seetharama group) to 'CRISIL B+/Stable' from 'CRISIL B/Stable', while reaffirming its rating on the firm's short term facilities at 'CRISIL A4'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 110 CRISIL A4 (Reaffirmed) Cash Credit 30 CRISIL B+/Stable (Upgraded from 'CRISIL B/Stable') Proposed Long Term 10 CRISIL B+/Stable (Upgraded from Bank Loan Facility 'CRISIL B/Stable') The rating upgrade reflects the improvement in the Seetharama group's business risk profile driven by a sustained increase in its scale of operations, while maintaining its profitability margins. The upgrade also reflects the increase in the group's net worth, and CRISIL's belief that the group will sustain its healthy capital structure on account of continued improvement in its networth and absence of any debt-funded capital expenditure (capex) programme. The group is expected to register a compound annual growth rate of 50 per cent in its revenues from 2011-12 (refers to financial year, April 1 to March 31) to 2013-14. CRISIL believes that the group would register an annual revenue growth of around 20 per cent over the medium term, given its order book of INR420 million as on December 31, 2013 (around 1.5 times its expected revenues in 2013-14). The group's operating profit margin is also expected to remain stable at around 15 per cent over the medium term as the group will continue to prudently bid for new projects. The group's net worth is expected to increase to around INR74 million as on March 31, 2014 from INR49 million as on March 31, 2012 on the back of moderate accretion to reserves over this period. The gearing, which is expected to remain low at 0.6 times as on March 31, 2014, is expected to be below 0.7 times over the medium term on account of continued growth in its net-worth and absence of any debt-funded capex plan. The ratings continue to reflect the Seetharama group's modest scale of operations in the intensely competitive civil construction industry, high degree of geographic and customer concentration in its revenue profile, and its small net worth limiting its financial flexibility. These rating weaknesses are partially offset by the extensive experience of the Seetharama group's promoters in the civil construction industry, and the firm's above-average financial risk profile marked by low gearing and robust debt protection metrics. For arriving at the rating, CRISIL has combined the business and financial risk profiles of SSC and Sri Seetharama Constructions- Srinivasa Reddy Constructions (SSRC). This is because these two entities, together referred to as the Seetharama group, have common promoters, are in the same line of business, and have fungible cash flows. Outlook: Stable CRISIL believes that the Seetharama group will continue to benefit over the medium term from its promoters' extensive industry experience. The outlook may be revised to 'Positive' if there is a sustained diversity in the group's revenue profile, while it maintains its profitability margins, or there is a substantial increase in its net worth on the back of equity infusion from its promoters. Conversely, the outlook may be revised to 'Negative' in case of a steep decline in the group's profitability margins, or substantial deterioration in its financial risk profile on account of larger-than-expected working capital requirements or large debt-funded capex. SSC was incorporated as a partnership firm in 1999. The firm carries out construction and repairing of roads, building and irrigation systems. The firm is also registered as a Special Class Contractor with the Public Works Department, Andhra Pradesh. The firm is based in Rajam (Andhra Pradesh). SSRC is a 75:25 joint venture between Seetharama and Srinivasa Reddy Constructions to execute road construction and maintenance order for the Andhra Pradesh Road Development Corporation. V.L. RAKA: ICRA Suspends 'B+' Rating on INR12cr Loans ----------------------------------------------------- ICRA has suspended the long term rating of [ICRA]B+ assigned to the INR12 crore fund based facilities of V.L. Raka Jewellers 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. V.L. Raka Jewellers Private Limited is a manufacturer and retailer of gold and silver jewellery, operating a single showroom owned by the company at Bhiwandi. The company was established in 2008. The promoters have been associated with the jewellery business since 1931, when Mr. Valchand Raka established a small store for selling jewellery procured from Mumbai. The company at present is managed by his son, Mr. Pradeep Raka. Besides selling jewellery manufactured in house, the company also acts as dealer for major branded jewellery players such as Gitanjali, Agni, Utsav and Ishta. VIDYASAGAR HIMGHAR: CRISIL Raises Rating on INR90MM Loans to 'B' --------------------------------------------------------------- CRISIL has upgraded its rating on the long term bank facilities of Vidyasagar Himghar Pvt Ltd to 'CRISIL B/Stable' from 'CRISIL B- /Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 14.5 CRISIL B/Stable (Upgraded from 'CRISIL B-/Stable') Proposed Long Term 12.0 CRISIL B/Stable (Upgraded Bank Loan Facility from 'CRISIL B-/Stable') Term Loan 63.5 CRISIL B/Stable (Upgraded from 'CRISIL B-/Stable') The rating upgrade reflects higher than expected improvement in VHPL's cash accruals to INR15.8 million in 2012-13 (refers to financial year, April 1 to March 31), from INR6.6 million in 2011- 12. The improvement followed the commencement of commercial operations at its second cold storage and the better-than-expected utilisation rate of its facilities. The increase in cash accruals has resulted in an improvement in the company's debt protection metrics. Its accruals are likely to be at a similar level over the medium term. However, CRISIL believes that VHPL's debt servicing ability will remain dependent upon timely realisation of advances/loans extended to farmers against cold storage receipts. The rating reflects VHPL's exposure to risks related to the highly regulated and intensely competitive nature of the cold storage industry in West Bengal, and its weak financial risk profile, marked by a small net worth and high gearing. These rating weaknesses are partly offset by the extensive experience the company's promoters in the cold storage business. Outlook: Stable CRISIL believes that VHPL will continue to benefit over the medium term from the extensive experience of its promoters in the cold storage business. The outlook may be revised to 'Positive' in case of further increase the company's cash accruals or infusion of capital by its promoters, leading to an improvement in its overall financial risk profile, particularly its liquidity, and in its risk-absorption capacity. Conversely, the outlook may be revised to 'Negative' in case of pressure on VHPL's liquidity on account of delays in repayments by farmers, less-than-expected cash accruals, or significant debt-funded capital expenditure. Incorporated in 1997, VHPL provides cold storage facilities to potato farmers and traders. The company is owned by the West Bengal-based Ghosh family. It currently has two cold storages, one each at Paschim Medinipur and Hooghly (both in West Bengal). ================= I N D O N E S I A ================= TOWER BERSAMA: Fitch Affirms 'BB' IDR; Outlook Stable ----------------------------------------------------- Fitch Ratings has affirmed PT Tower Bersama Infrastructure Tbk's Long-Term Issuer Default Ratings at 'BB'. At the same time, the agency affirmed the National Long-Term Rating at 'AA-(idn)'. The Outlooks for the ratings are Stable. Fitch affirmed the ratings notwithstanding Tower Bersama's FFO- adjusted net leverage remaining above 4.0x, the threshold at which a negative rating action may be considered. Tower Bersama's FFO- adjusted net leverage was 5.4x at end December 2013, following higher debt to fund telecommunications tower building activity during 2013. However, the agency expects leverage to return below its negative guideline in the medium-term thanks to rising cash flows from long-term contracts with EBITDA margins above 80%. The risk of higher leverage is also offset by a stronger customer portfolio, with a higher proportion of revenue from investment- grade operators. 'AA' National Ratings denote expectations of very low default risk relative to other issuers or obligations in the same country. The default risk inherently differs only slightly from that of the country's highest rated issuers or obligations. KEY RATING DRIVERS Growth Keeps Leverage High: Tower Bersama's leverage in 2013 remained high, mainly driven by higher borrowings to fund new base station sites for orders from telecommunication operators, especially PT Telekomunikasi Selular (Telkomsel, BBB/Stable). Tower Bersama's base station tower building activity reached its peak in 2013 with 1,800 towers built (2012: 1,144). Fitch expects leverage to remain above our negative guideline of 4.0x in 2014 and 2015. However, Fitch believes that this will not be sustainable and FFO-adjusted net leverage will fall below 4.0x in 2016. Acquisitions May Slow Deleveraging: As the second-largest telecommunications tower provider in Indonesia in terms of the number of towers, Tower Bersama has limited opportunity to acquire smaller tower portfolios from other tower companies. However significant tower acquisitions might materialise if operators such as PT Telekomunikasi Indonesia Tbk (BBB-/Stable), PT Indosat Tbk (BBB/Stable) and PT XL Axiata Tbk (XL, BBB/Stable) decide to divest their tower portfolios. In Fitch's view, any opportunistic acquisitions would result in slower deleveraging than the agency currently expects and put further pressure on the rating. Better Tenant Mix: Tower Bersama's customer portfolio has improved, with revenue contribution from investment-grade telcos increasing to 75% in 2013 from 70% in 2012. The better quality of Tower Bersama's tenant mix offsets its higher leverage. It is rated at a similar level as the largest telecommunications tower provider in Indonesia, PT Profesional Telekomunikasi Indonesia (Protelindo, BB/Stable), which has FFO-adjusted net leverage of below 4.0x but derives less than 50% of its revenue from investment-grade telcos. Although Tower Bersama continues to face risk from its exposure to struggling CDMA players, Fitch expects that tenant composition will further skew towards investment-grade operators as they continue their investments in network expansion. Fitch also expects revenue contribution from investment-grade telcos to further rise to above 75% after XL completes its acquisition of PT Axis Telekom Indonesia in March 2014. Solid Margin, Predictable Cash Flows: Tower Bersama's ratings benefit from its solid profitability and revenues that are backed with long-term non-cancellable contracts. Tower Bersama posted EBITDA margin of 81.9% in 2013, up from 81.5%in 2012. The company's cash flows are also highly predictable with locked-in revenue of USD1.9bn at end September 2013, with average contract period of its portfolio at 7.3 years. Strong Access to Funding: Tower Bersama's liquidity is further supported by its strong access to bank borrowings with USD262m in unutilised working capital facilities. The company also has a track record in bond markets with both local currency and foreign currency issuances. The company plans to gradually replace secured debt at the operating company level with unsecured debt at the holding company level. In addition, the company plans to minimise its currency exposure by having more rupiah-denominated borrowings. Currency Exposure Is Manageable: Tower Bersama has about USD887m in foreign-currency debt, forming 81% of its overall debt. More than 90% of its debt is protected through a combination of hedging contracts and a natural hedge from USD40m in annual revenue (18% of total revenue). The company recorded IDR854bn (USD75m) of cash (including restricted cash) at the end of December 2013 in which USD56m was denominated in US dollars. RATING SENSITIVITIES Fitch expects no positive rating action as the company's leverage will remain high in the medium-term. Negative: Future developments that could individually or collectively lead to negative rating actions include: - A debt-funded acquisition of another tower portfolio or lease defaults by weaker telcos leading to FFO-adjusted net leverage remaining above 4.0x on a sustained basis. - A fall in revenue contribution from investment-grade telcos to below 50%. - Any event that causes Fitch to revise its projections, such that Fitch no longer forecasts the company's FCF to turn positive in 2015. Full list of rating actions: Long-Term Foreign Currency Issuer Default Rating affirmed at 'BB'; Outlook Stable Long-Term Local Currency Issuer Default Rating affirmed at 'BB'; Outlook Stable National Long-Term Rating affirmed at 'AA-(idn)'; Outlook Stable Foreign currency senior unsecured rating affirmed at 'BB' USD300m guaranteed senior unsecured notes issued by TBG Global Pte Ltd affirmed at 'BB' National senior unsecured rating affirmed at 'AA-(idn)' IDR4trn bond programme affirmed at 'AA-(idn)' IDR740bn tranche I under the IDR4trn bond programme affirmed at 'AA-(idn)' ==================== N E W Z E A L A N D ==================== SOUTH CANTERBURY: Former Director Stuart Nattrass Gives Evidence ---------------------------------------------------------------- Chris Hutching at NBR Online reports that former South Canterbury Finance director Stuart Nattrass was on March 18 grilled by Crown prosecutor Colin Carruthers QC as the first witness called in the fraud trial. NBR says former directors Bob White and Edward Sullivan and former chief executive Lachie McLeod are defending fraud charges in relation to the collapse of the finance company at the Timaru High Court. NBR relates that the three men stand accused of 18 charges brought by the Serious Fraud Office for a variety of alleged offences, including theft by a person in a special relationship, false statements and false accounting. Several of the charges involve correspondence with the Treasury upon SCF's application to join the Crown Retail Deposit Guarantee Scheme and its extended version, the report says. According to NBR, Mr. Caruthers asked Mr Nattrass, who was a director of SCF from 2002 to 2009; about the general way that business was done around the board table at the company founded by the late Allan Hubbard. NBR relates that Mr. Nattrass said that proposals would be brought to the board. He was aware, however, that discussions had often been going on in other forums, not at the board table, between other members of SCF's leadership, including Mr. White and Mr. Sullivan and former chairman Mr. Hubbard, NBR relays. NBR relates that a number of issues were then raised by Mr. Carruthers, including South Canterbury's dealings involving Auckland's Hyatt Regency Hotel and Peter Symes -- Mr. Sullivan's brother-in-law. According to NBR, Mr. Carruthers questioned Mr. Nattrass for details about who was directly responsible for putting together prospectus material. Mr Nattrass replied that it was generally the chief executive, the chief financial officer and usually one or other of the directors. Mr. Carruthers then took him through several prospectuses from 2004 to 2009 and asked him to state for the court who were the signatories, which were in each case Mr. Hubbard, Mr. Sullivan, Mr. White and Mr. Nattrass, NBR states. NBR says there was also further discussion toward the end of the mid-day session about the deposit guarantee scheme and how signing up to the trust deed had affected the business. Mr. Nattrass said he had expected it had diminished the role of Mr. Hubbard, NBR adds. The trial before Justice Paul Heath is set down for four months, the report notes. Based in New Zealand, South Canterbury Finance Limited (NZE:SCFHA) -- http://www.scf.co.nz/-- was engaged in the provision of financial services. The Company's principal activities were borrowing funds from public and institutional investors and on lending those funds to the business, plant and equipment, property, rural and consumer sectors. It typically advanced funds by means of hire purchase, floor plans, leasing of plant, vehicles and equipment, personal loans, business term loans and revolving credit facilities, mortgages against property, and other financial instruments, including consumer loan insurance. On Aug. 31, 2010, Trustees Executors Limited, as trustee for South Canterbury Finance charging group, appointed Kerryn Downey and William Black of McGrathNicol as receivers of the charging group's secured assets. "As Trustee, we have had South Canterbury Finance under heightened surveillance since 2008. As part of that, SCF was granted a Trustee waiver in February 2010 to allow it time to recapitalize. Unfortunately, the Company's Directors have advised us that they have not been successful with respect to a recapitalization and requested us to appoint a receiver. At this point we, as Trustee, agree that it is the best interests of debenture, deposit and bond holders to do that," said Yogesh Mody, Southern Regional Manager for Trustees Executors Limited. The New Zealand government repaid South Canterbury's 35,000 depositors and stockholders NZ$1.6 billion under the Crown retail deposit guarantee scheme. ===================== P H I L I P P I N E S ===================== RURAL BANK OF MONTEVISTA: Placed Under PDIC Receivership -------------------------------------------------------- The Monetary Board (MB) placed the Rural Bank of Montevista (Davao del Norte), Inc. under the receivership of the Philippine Deposit Insurance Corporation (PDIC) by virtue of MB Resolution No. 407 dated March 6, 2014. As Receiver, PDIC took over the bank on March 7, 2014. Rural Bank of Montevista is an eleven-unit rural bank with Head Office located in Sobrecary, City of Tagum, Davao del Norte. Its 10 branches are located in Laak, Mawab, Monkayo, Montevista, New Bataan and Pantukan in Compostela Valley; Bayugan, San Francisco and Trento in Agusan del Sur; and in Mati, Davao Oriental. Latest available records show that as of December 31, 2013, Rural Bank of Montevista had 35,293 accounts with total deposit liabilities of PHP230.35 million. A total of 35,248 deposit accounts or 99.87% of the accounts have balances of PHP500,000 or less and are fully covered by deposit insurance. Total insured deposits amounted to PHP209.83 million or 91.09% of total deposits. PDIC said that upon takeover, all bank records shall be gathered, verified and validated. The state deposit insurer assured depositors that all valid deposits shall be paid up to the maximum deposit insurance coverage of PHP500,000.00. The PDIC also announced that it will conduct Depositors-Borrowers Forums on March 12 to 14, 2014 to inform depositors of the requirements and procedures for filing deposit insurance claims. Claim forms will be distributed during the Forum. The schedule and venue of the Forum will be posted on the bank premises and in the PDIC website, www.pdic.gov.ph. The claim forms and the requirements and procedures for filing are likewise available for downloading from the PDIC website. Depositors may update their addresses with the PDIC representatives at the bank premises or during the Forum using the Mailing Address Update Forms to be furnished by PDIC representatives. Duly accomplished Mailing Address Update Forms should be submitted to PDIC representatives accompanied by a photo-bearing ID with signature of the depositor. Depositors may update their addresses until March 17, 2014. Depositors with valid deposit accounts with balances of PHP50,000.00 and below do not need to file deposit insurance claims. But depositors who have outstanding obligations with the Rural Bank of Montevista including co-makers of the obligations, and have incomplete and/or have not updated their addresses with the bank, regardless of amount, should file deposit insurance claims. For depositors who do not need to file deposit insurance claims, PDIC will start sending payments by mail to their addresses based on bank records by March 21, 2014. For depositors that are required to file deposit insurance claims, the PDIC will start claims settlement operations for these accounts also by the first week of April. The schedule of the claims settlement operations will be announced through notices to be posted at the bank premises and other public places as well as through the PDIC website, www.pdic.gov.ph. According to the latest Bank Information Sheet (BIS) as of December 31, 2013 filed by the Rural Bank of Montevista with the PDIC, the bank is owned by Get Holdings, Inc. (35.23%), University of Mindanao (Retirement Fund) (20.76%), RBM Employees Provident Fund (15.43%), Guillermo P. Torres, Jr. (9.9%), Edwin P. Torres (4.33%), Antonio M. Pilpil (4.08%), Victor Nicasio P. Torres (3.03%), and University of Mindanao (2.17%). Its President and Chairman is Felix A. Maceda. ********* 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 ***