/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/140521.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, May 21, 2014, Vol. 17, No. 99 Headlines A U S T R A L I A CRAIG BOND: Fights to Revive Compromise Deal With Creditors SAPPHIRE PTY: Growers to File Legal Action to Recoup Funds UNIVERSAL ENERGY: Paul Cook Appointed as Administrator C H I N A GREENTOWN CHINA: Sunac Deal No Impact on Moody's B1 CFR SUNAC CHINA: Greentown Deal No Impact on Moody's Ba3 CFR TEXHONG TEXTILE: Production Suspension No Impact on Ba3 CFR I N D I A B. M. FOODS: CRISIL Assigns 'B+' Rating to INR72MM Loans CENTURY GLOBAL: ICRA Assigns 'B' Rating to INR27cr Loans ESSEL MARKETING: ICRA Reaffirms 'B+' Rating on INR9.7cr Loan GAJRAJ HOTELS: CARE Assigns 'C' Rating to INR22.30cr Bank Loan JANKI CORP: CARE Reaffirms 'B+' Rating on INR402.06cr Bank Loan KALIKA CONSTRUCTION: CRISIL Reaffirms 'D' Rating on INR60MM Loans KCS PVT: CRISIL Reaffirms 'B-' Rating on INR30MM Cash Credit M. J. INDUSTRIES: CRISIL Assigns 'B' Rating to INR92.5MM Loans PIONEER EMBROIDERIES: CARE Keeps 'D' Rating on INR127.74cr Loan REFEX REFRIGERANTS: ICRA Withdraws 'D' Rating on INR34.41cr Loans SJ INTERNATIONAL: ICRA Puts 'B/A4' Rating on INR11.9cr Loans SPICEJET LTD: Posts INR1,003.2cr Loss in FY2013-14 STERLING STONEX: ICRA Assigns 'B+' Rating to INR4.60cr Loans SURENDRA KUMAR: CARE Assigns 'B+' Rating to INR2.5cr Bank Loan TATA MOTORS: Moody's Affirms Ba3 Corporate Family Rating TECKBOND LABORATORIES: CRISIL Reaffirms D Rating on INR100M Loans TIRUPATI JUTE: CRISIL Reaffirms 'B+' Rating on INR165MM Loans UNITED WIRE: CRISIL Reaffirms B+ Rating on INR100MM Loans UNIVERSAL POLYMERS: CRISIL Assigns 'B' Rating to INR20MM Loan VIKRAM HOSPITAL: CRISIL Reaffirms 'D' Rating on INR546.8MM Loans YASHWANT PLACE: CARE Assigns 'B+' Rating to INR7.5cr Bank Loan M A L A Y S I A MALAYSIA AIRLINES: Massive Share Sale Amid Bankruptcy Fears N E W Z E A L A N D KIMBERLEY HILL: Model and Talent Agency Placed in Receivership S O U T H K O R E A CHONGHAEJIN MARINE: Banks May Face Sanctions For Loans KOOKMIN BANK: Faces FSS Probe Over Irregularities - - - - - ================= A U S T R A L I A ================= CRAIG BOND: Fights to Revive Compromise Deal With Creditors ----------------------------------------------------------- Neale Prior at The West Australian reports that businessman Craig Bond has launched a legal campaign to revive a Bankruptcy Act compromise deal with Bond family trust companies and other creditors. It is believed in excess of AUD3 million is locked in financial limbo with insolvency trustee Chris Williamson more than a year after Craig Bond put forward a compromise deal under Part X of the Bankruptcy Act, the report relates. According to the West Australian, Craig Bond's legal team went to the Federal Court to get an urgent hearing on appeal to overcome problems caused by a Federal judge deciding last year that his Bankruptcy Act proposal extensively overlapped with international property claims by a former partner. The report relates that it has been revealed in the Federal Court that the ex-partner, Dianne Beaman, wants to stop sale proceeds from a luxury home near Buckingham Palace being passed on to Craig Bond's creditors. The son of former corporate high flyer Alan Bond had hoped to use the proceeds of the sale for the Part X deal, the report notes. The West Australian says Craig Bond began his campaign in April last year to settle documented creditor claims of more than AUD5.4 million with a payout of about 60 cents in the dollar. The proposal raised the ire of Ms. Beaman because most of the proceeds would go back to the Bond family, the report states. More than AUD4.4 million of Craig Bond's alleged debts are to Bond companies, with the biggest a AUD2.85 million claim by a family trust company directed by Mr. Bond's brother John and sister Jody Fewster, The West Australian reports. The report notes that Ms. Beaman, who claimed to be owed at least AUD764,000, disputed the family trust's claims. The West Australian says Craig Bond was also the beneficiary of all the trusts to which he allegedly owes money, the Beaman camp has claimed. He also disclosed interests in two syndicates managed by Primewest, a AUD1.5 billion property syndication group run by John Bond and two business partners, the report adds. Supporters of the Bond camp claim the London property was unquestionably financed by a trust linked to John Bond, the report says. SAPPHIRE PTY: Growers to File Legal Action to Recoup Funds ---------------------------------------------------------- Stock Journal reports that the importance of knowing who you sell your grain to in a deregulated market has been highlighted by the recent Sapphire Pty Ltd insolvency case. Stock Journal says the company -- which traded as River City Grain Co and AG Commodity Trading and based at Murray Bridge -- was put into administration in March, through Anthony Matthews & Associates. After a creditors meeting in Adelaide last week, it was announced that unsecured creditors, including many growers in SA, Vic and NSW, would receive only 20 per cent of their money in two years, the report discloses. Many growers are believed to be owed between AUD50,000 and AUD100,000, with some debts running into the hundreds of thousands, Stock Journal notes. According to Stock Journal, creditors committee member and Vic grower Stuart Ellis, Burrumbeet, said they would now be looking to pursue legal action against the now-defunct company and its director Brenton Strauss, and seeking funding help from the National Farmers Federation. A report from the administrator Anthony Matthews & Associates showed Sapphire Pty Ltd's liabilities at the time of going into administration totalled AUD13 million, with unsecured creditors owed AUD6 million, Stock Journal discloses. Stock Journal relates that the company's records disclosed a trading loss of AUD1.5 million for the period from October 1, 2013 to September 30, 2013, and a trading loss of AUD5.9 million from October 1, 2012 to September 30, 2013. Sapphire was described as 'hopelessly insolvent' with company employees owed about AUD60,000, Stock Journal relays. At a creditors meeting in March, NAB's Brent Musgrove questioned Mr. Strauss' involvement in a new company. The NAB is listed as being owed AUD5.26 million in the report, Stock Journal adds. UNIVERSAL ENERGY: Paul Cook Appointed as Administrator ------------------------------------------------------ Paul Cook -- p_cook@pjc.com.au -- & Johnathan Murrell -- j_murrell@pjc.com.au -- of Paul Cook & Associates were appointed as administrators of Universal Energy Services Pty Ltd on May 16, 2014. A first meeting of the creditors of the Company will be held at 105 Macquarie St, in Hobart, on May 28, 2014, at 10:30 a.m. ========= C H I N A ========= GREENTOWN CHINA: Sunac Deal No Impact on Moody's B1 CFR ------------------------------------------------------- Moody's Investors Service says Sunac China Holdings Limited's (Ba3 stable) proposed acquisition of certain shareholdings in Greentown China Holdings Limited will not have any immediate impact on Greentown's B1 corporate family rating, B2 senior unsecured debt rating and positive ratings outlook. On May 15, 2014, Sunac announced that it was in discussion with the founding shareholders of Greentown - Mr. Song Weiping, Ms. Xia Yibo and Mr. Shou Bainian -- on the proposed acquisition of not more than a 30% interest in Greentown's issued share capital. "Moody's does not expect any near term material change in Greentown's business if Sunac purchases a share interest in Greentown," says Jiming Zou, a Moody's Assistant Vice President and Analyst. In addition, Moody's expects that if Sunac's proposed acquisition is successful, Greentown's founding shareholders as well as Wharf (Holdings) Limited (unrated) -- which currently owns a 24.3% ownership interest in Greentown -- will continue to hold stakes in the company and determine jointly with Sunac, Greentown's business and financial strategy. In addition, Sunac and Greentown have established a good working relationship through their joint property projects since 2012. Moreover, Sunac's demonstrated strong sales execution will support Greentown in achieving its sales budget. Moody's will monitor any change in Greentown's growth strategy, given Sunac's more aggressive expansion plans than Greentown's. Any aggressive land acquisitions by Greentown or rapid growth in scale will pressure its B1 corporate family rating. "Greentown's B1 corporate family rating would also come under pressure if Wharf Holdings' ownership share is significantly reduced, because Wharf Holdings is responsible for instilling financial discipline in Greentown's operations," says Zou, who is also the Lead Analyst for Greentown. "The acquisition of an ownership stake in Greentown by Sunac of not more than 30% will ensure that Greentown complies with the change of control clause in its bond agreements," adds Zou. The principal methodology used in this rating was the Global Homebuilding Industry published in March 2009. Sunac China Holdings Limited is an integrated residential and commercial property developer. It has projects in five main regions: Beijing, Tianjin, Shanghai, Chongqing and Hangzhou. The company was listed on the Hong Kong Exchange on 7 October 2010. It owned 46 projects and had a land bank of 16.5 million square meters at end-June 2013. Greentown China Holdings Limited is one of China's major property developers, with a primary focus in Hangzhou city and Zhejiang province. As of June 2013, the company had 99 projects with a total gross floor area of 41.39 million square meters (sqm). Of this total, 21.96 million sqm were attributable to the company. SUNAC CHINA: Greentown Deal No Impact on Moody's Ba3 CFR -------------------------------------------------------- Moody's Investors Service says that Sunac China Holdings Limited's proposed acquisition of certain shares in Greentown China Holdings Limited (B1 positive) is credit negative for Sunac. Nevertheless, the proposed transaction has no near term impact on Sunac's Ba3 corporate family rating and B1 senior unsecured debt rating. The outlook for Sunac's ratings remains stable. On May 15, 2014, Sunac announced that it is in discussion with the founding shareholders of Greentown - Mr. Song Weiping, Ms. Xia Yibo and Mr. Shou Bainian -- to acquire no more than a 30% interest in the issued share capital of Greentown. Sunac has not disclosed details of the terms and conditions of the acquisition, or how it plans to fund the transaction. "We believe that the consideration will be within Sunac's financial capacity," says Franco Leung a Moody's Assistant Vice President and Analyst. Greentown's market capitalization amounted to about HKD16.9 billion at May 14, 2014, according to Bloomberg. Based on this amount, Moody's estimates that the consideration of around RMB5-- RMB6 billion can be accommodated by Sunac's cash holdings, as well as its available bank facilities. "However, Sunac's strong appetite for land acquisitions and now equity interest in a company of similar size could weaken its financial profile," says Leung, who is also the Lead Analyst for Sunac. Sunac's financial flexibility will weaken slightly, if it is successful in acquiring the 30% interest in Greentown, because its interest coverage will be close to 2x versus about 2.1x in FY2013, after adjusting for its jointly controlled entities exposure. Nonetheless, Moody's believes Sunac will reverse this situation and maintain an EBITDA/interest coverage in the range of 2.0x-- 2.5x through slower land acquisitions and an increase in recognition of more profitable projects. However, Sunac's investment in Greentown will result in Sunac facing additional financial pressures, including from a potential capital call if Greentown takes on large projects or grows in scale. "As a result, any further increase in Sunac's ownership interest in Greentown beyond the proposed 30% or a decrease in Wharf's interest in Greentown could be negative for Sunac," adds Leung. While Sunac's current financial position can support its proposed 30% stake in Greentown, if Sunac becomes a major Greentown shareholder -- thereby replacing Wharf (Holdings) Limited's (unrated) position as Greentown's major shareholder -- over the next 12--18 months, such a situation would be negative for Sunac's ratings. The principal methodology used in these ratings was the Global Homebuilding Industry published in March 2009. Sunac is an integrated residential and commercial property developer, with ongoing or completed projects in China's main regions of Beijing, Tianjin, Shanghai, Chongqing and Hangzhou. The company develops a wide range of property, including high-rise and mid-rise residences, detached villas, townhouses, retail properties, offices and car parks. Sunac was incorporated in the Cayman Islands on 27 April 2007 and listed on the Hong Kong Stock Exchange on 7 October 2010. At end- 2013, it owned 59 projects and had a land bank of 21.1 million square meters. TEXHONG TEXTILE: Production Suspension No Impact on Ba3 CFR ----------------------------------------------------------- Moody's Investors Service says anti-Chinese protests in Vietnam (B2 stable) have slightly damaged Texhong Textile Group Limited's factories in southern Vietnam, forcing the company to halt production, which is credit negative but has no immediate impact on its Ba3 corporate family and senior unsecured bond ratings. The ratings outlook remains stable. Texhong announced that its factories in southern Vietnam were slightly damaged during anti-Chinese protests at around midnight, 14 May 2014. Minor damages included panels of machinery with less than 20,000 spindles; certain windows and computers; and some scrapped cotton. The company has temporarily suspended production at its facilities in southern Vietnam to evaluate the situation and will commence production when it returns to normal. The facilities have about 0.49 million spindles producing yarn, which accounted for about 26% of its total production capacity of about 1.84 million spindles at end-2013 in Vietnam and China (Aa3 stable). In addition to its factories in southern Vietnam, the company has about 0.24 million spindles producing yarn in northern Vietnam where the production facilities remain unaffected. The protests have been prompted by China's positioning of an oil rig in waters claimed by both Vietnam and China. The company's cotton spinning capacity in China increased to 1.11 million spindles at end-2013 from about 0.60 million at end-2012, while its capacity in Vietnam grew to 0.73 million from about 0.40 million over the same period. "We expect the company to rebalance its production locations to meet its customer demand if the production suspension in southern Vietnam continues for a long period of time," says Chenyi Lu, a Moody's Vice President and Senior Analyst. In addition, Moody's estimates the company to have about one-month finished inventories to supply its customers while the facilities are closed. The company had finished inventories of RMB912 million at end- 2013, which is 0.11x of its 2013 revenue of RMB8.2 billion. Texhong continues to expand its capacity and expects to have a total capacity of approximately 2.16 million spindles by the end of 3Q 2014, including 1.17 million spindles in China and approximately 0.99 million spindles in Vietnam. The capacity expansion in northern Vietnam is for 258,000 spindles, and construction is still ongoing and is expected to be completed in July 2014. Given its solid finished inventory and expanded production bases, Moody's sees no immediate impact on its credit profile. However, Moody's will revisit the situation if the production suspension in southern Vietnam continues for a considerable period of time and/or the production is Northern Vietnam is impacted as well. The principal methodology used in this rating was the Global Manufacturing Industry published in December 2010. Established in 1997 and listed on the Hong Kong Stock Exchange since 2004, the Texhong Textile Group specializes in producing core-spun yarn and textile products. The company currently operates 15 yarn production bases; 12 in the Yangtze River Delta and Shandong Province in China and three in Vietnam. Its chairman, Tianzhu Hong, holds a about 52% stake and is the majority shareholder of the company. ========= I N D I A ========= B. M. FOODS: CRISIL Assigns 'B+' Rating to INR72MM Loans -------------------------------------------------------- CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to the bank facilities of B. M. Foods. Amount Facilities (INR Mln) Ratings ---------- -------- ------- Term Loan 14.5 CRISIL B+/Stable Proposed Long Term Bank Loan Facility 10 CRISIL B+/Stable Cash Credit 47.5 CRISIL B+/Stable Bank Guarantee 8 CRISIL A4 The ratings reflect BMF's modest scale of operations in the highly fragmented and competitive rice milling business and weak financial risk profile, marked by a modest net worth, high gearing and subdued debt protection metrics. The rating also factors in the susceptibility of the firm's operating performance to regulatory framework governing rice industry and raw material price volatility. These rating weaknesses are partially offset by extensive experience of BMF's partners in the rice milling business. Outlook: Stable CRISIL believes that BMF will continue to benefit over the medium term from its partners' extensive experience in rice milling business. The outlook may be revised to 'Positive' in case the firm is able to exhibit a significant and sustainable growth in revenues while improving its capital structure and debt protection metrics. Conversely, the outlook may be revised to 'Negative' in case of decline in the firm's revenues or profitability margins or a significant elongation in its working capital cycle, translating to further weakening in its liquidity and financial risk profile. BMF, set up in 2005, is a partnership firm of Mr. Anil Agarwal and his nephew, Mr. Ankur Agarwal and is engaged in rice milling business. The firm has its manufacturing facility at Ambikapur (Chattisgarh). BMF has reported a profit after tax (PAT) of INR0.63 million on net sales of INR 63.9 million for 2012-13 (refers to financial year, April 1 to March 31), as against a PAT of INR 0.57 million on net sales of INR65.6 million for 2011-12. CENTURY GLOBAL: ICRA Assigns 'B' Rating to INR27cr Loans -------------------------------------------------------- ICRA has assigned long term rating of [ICRA]B to INR27.0 crore bank facilities of Century Global Logistics Private Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Term Loan 22.00 [ICRA]B Cash Credit 4.87 [ICRA]B Unallocated 0.13 [ICRA]B The assigned rating derives strength from experienced promoters of the company whose long standing track record in transportation business and established relationships with customers coupled with pan-India presence facilitates client acquisition and repeat business for the company. The assigned rating also factors in the long association of the vehicle lessors with the company which provides assurance of vehicle availability on requirement. The rating is, however, constrained by high gearing, weak debt protection metrics and weak liquidity as evident from fully utilized working capital limits. While assessing the credit profile, ICRA also notes the high sector concentration as 60% of the revenues come from the tea industry thereby exposure to the cyclicality in the load volumes. The company's profitability indicators remain susceptible to increase in toll taxes/levies and unrecoverable costs besides the limited ability to pass on diesel price hikes and stringent delivery requirements of clients that are critical to maintain high operational utilization of the fleet and avoid transit delay charges. Going forward, given the intentions of the management to move up the value chain and become a complete supply chain service provider and add more warehouses, the scale of expansion and funding mix will remain key rating sensitivity besides CGLPL's ability to expand its client base while maintaining profitability of operations. Century Global Logistics Private Limited initially started as, Careway Transport of India, a partnership firm in the year 1975. The firm was renamed to Century Transport of India in 1997 and was converted to a private limited as Century Global Logistics Private Limited in 2010. Careway Transport of India initially started as transporters of Tea from the Tea Gardens to the tea manufacturers & blenders and wholesalers. Since then, transportation of various other products has also been started by the company. Currently tea transportation forms around 60% of the business and the balance from various other products like Pharma, Liqour and others. As tea transportation forms the major business of the company, CGLPL has two owned warehouses in the major tea producing regions Guwahati and Siliguri, from where CGLPL transports tea to customers situated all over the country. Recent Results As per provisional financials, the company has reported an operating income of INR82.6 crore in the nine month ending December 31, 2013. ESSEL MARKETING: ICRA Reaffirms 'B+' Rating on INR9.7cr Loan ------------------------------------------------------------ ICRA has reaffirmed the long-term rating of [ICRA]B+ on the INR9.70 crore long-term, fund based working capital facilities of Essel Marketing & Promotions Private Limited. ICRA has also reaffirmed the short-term rating of [ICRA]A4 to the INR2.50 crore short-term, non-fund based working capital facilities of EMPPL. The outlook on the long-term rating is stable. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term, fund based limits 9.70 [ICRA]B+ reaffirmed Short-term, non- fund based limits 2.50 [ICRA]A4 reaffirmed The rating re-affirmation takes into account the vast experience of the promoters in the trading of promotional products, the company's established relations with key suppliers and customers, a well reputed customer base, and moderate working capital intensity levels over the last two years. The company has been reporting strong growth in revenues over the last four fiscals, albeit on a low base, with healthy profitability indicators due to an asset light business model. The ratings are, however, constrained by the thin operating and net margins of the company on account of the trading nature of business; and the highly competitive operating environment marked by low entry barriers. The ratings are further constrained by the small scale of operations, high customer concentration, and a stretched financial risk profile marked by low accruals, leveraged capital structure and moderate debt coverage indicators. EMPPL, incorporated in 2006 by Mr. Rohit Lamba, is engaged in the supply of a wide range of promotional products typically required in the trade/retail promotional campaigns of FMCG and pharmaceutical companies. EMPPL supplies products such as toys, pencil boxes, plastic jars, stickers, pens, and other customized gift articles. Mr. Lamba is a first generation entrepreneur, supported by a team of professionals in the daily operations of the company. Recent Results EMPPL has reported a profit after tax of Rs.1.08 crore on an operating income of INR44.33 crore in FY2013, as against a profit after tax of INR0.76 crore on an operating income of INR27.74 crore in FY2012. GAJRAJ HOTELS: CARE Assigns 'C' Rating to INR22.30cr Bank Loan -------------------------------------------------------------- CARE assigns 'CARE C' rating to the bank facilities of Gajraj Hotels Private Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank Facilities 22.30 CARE C Assigned Rating Rationale The rating assigned to the bank facilities of Gajraj Hotels Private Limited are primarily constrained by its small scale of operations and weak financial risk profile characterized by operating losses, leveraged capital structure, stressed debt coverage indicators and liquidity position resulting in instances of delay in debt servicing in the past. The ratings are further constrained by stabilization risk associated with new hotel, cyclical nature of the hotel industry coupled with high competition and subdued industry outlook. The rating, however, do factor in the experience of the promoters and favorable location of the hotel property. Going forward, the ability of GHPL to improve the overall financial profile and debt servicing track record of the company. GHPL was incorporated on November 6, 1992, by Mr Chand Ram, his wife Ms Krishna Devi and his son, Mr Gajraj Singh. The company operates Hotel Gajraj (HG) in Bahadurgarh, Haryana, which was its first hotel established in the year 1992. GHPL has set up another hotel by the name of Gajraj Continental (GC) in Bahadurgarh, Haryana, which partly commenced its operations in October 2012 with full fledged operation from April 2013. The hotel consists of 72 rooms, bar (100 person capacity), coffee shop, restaurant (150 seating capacity), banquet hall (400 person capacity), function hall (500 person capacity) and other facilities (which includes health club and swimming pool). GHPL reported a net loss of INR2.39 crore on a total income of INR6.50 crore in FY14 (based on the provisional results) (refers to the period April 1 to March 31) as against the net loss of INR0.59 crore on a total income of INR3.53 crore in FY13. JANKI CORP: CARE Reaffirms 'B+' Rating on INR402.06cr Bank Loan --------------------------------------------------------------- CARE reaffirms the ratings assigned to the bank facilities of Janki Corp Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank Facilities 402.06 CARE B+ Reaffirmed Short term Bank Facilities 86.00 CARE A4 Reaffirmed Rating Rationale The ratings of the bank facilities of Janki Corp Limited continue to be constrained by the high working capital intensity of its operations, high leverage, losses incurred during H1FY14 (refers to the period April 1 to September 30) and its presence in an inherently cyclical steel and textile industry along with on-going regulatory hurdles faced by the Indian iron ore industry. The ratings take cognizance of the receipt of approval for restructuring of its debt under the Corporate Debt Restructuring (CDR) mechanism. The ratings, however, continue to derive comfort from JCL's experienced promoters and its established operations. JCL's ability to improve its profitability by managing the volatile raw material prices, efficiently manage its working capital requirements, complete its on-going projects within the envisaged time and cost parameters and generate the envisaged returns thereof along with an improvement in its capital structure are the key rating sensitivities. Promoted by Mr Raghu Nath Mittal, JCL is a closely-held public limited company. It commenced its operations with a fabric processing facility at Bhilwara in 1993. JCL entered into the steel business during 2005 by setting up a sponge iron manufacturing unit in Bellary (Karnataka) with a capacity of 180,000 Metric Tonnes Per Annum (MTPA). The company has also setup a Waste Heat Recovery Boiler (WHRB) based power plant of 15 MW (commissioned in March 2010) and pellet plant of 600,000 MTPA (commissioned in September 2011). Contribution of sponge iron, pellet, textile and sale of power constituted 51%, 34%, 12% and 3%, respectively in the total operating income of INR658.53 crore during FY13 (refers to the period April 1 to March 31). Based on the audited results for FY13, JCL reported a total operating income and Profit after Tax (PAT) of INR658.53 crore (PY: INR515.24 crore) and INR33.33 crore (PY: INR24.98 crore) respectively. However, as per the provisional results for H1FY14, JCL reported a total operating income of INR248.82 crore with a net loss of INR18.44 crore. KALIKA CONSTRUCTION: CRISIL Reaffirms 'D' Rating on INR60MM Loans ----------------------------------------------------------------- CRISIL's ratings on the bank facilities of Kalika Construction (KC; part of the Kalika group) continue to reflect instances of delay by the Kalika group in servicing its term debt and working capital demand loan; its cash credit account has also occasionally been overdrawn for more than 30 days. This is because of the group's weak liquidity, driven by delayed payments by Government of Maharashtra entities. Amount Facilities (INR Mln) Ratings ---------- -------- ------- Bank Guarantee 20 CRISIL D (Reaffirmed) Cash Credit 40 CRISIL D (Reaffirmed) The Kalika group has a small scale of operations, sticky receivables outstanding, geographical concentration in its revenue profile, and a small order book. It is also susceptible to risks related to the tender-based nature of its operations. The group, however, benefits from the extensive experience of its promoters in the construction industry. For arriving at the ratings, CRISIL has combined the business and financial risk profiles of KC and Shinde and Sons (SS). This is because the two firms, together referred to as the Kalika group, are in the same line of business and under a common management. KC undertakes civil construction projects for earthwork, paver lining, structures, and stretches for bridges across rivers in Maharashtra. Set up by Mr. Ramesh Shinde and his family members, KC mainly executes projects for the Public Works Department of Jalna (Maharashtra), and other state government authorities such as Majalgaon Canal Division and Godavari Irrigation Development Corporation. The partners also operate SS, which is in the same line of business. KCS PVT: CRISIL Reaffirms 'B-' Rating on INR30MM Cash Credit ------------------------------------------------------------ CRISIL's ratings on the bank facilities of KCS Pvt Ltd continues to reflect KCS's modest scale of operations, customer concentration in its revenue profile, and exposure to risks related to the tender-based nature of its business. The ratings also factor in the company's weak financial risk profile, marked by a small net worth, high gearing, and inadequate debt protection metrics. These rating weaknesses are partially offset by the extensive experience of the company's promoters in the civil construction industry. Amount Facilities (INR Mln) Ratings ---------- -------- ------- Bank Guarantee 40 CRISIL A4 (Reaffirmed) Cash Credit 30 CRISIL B-/Stable (Reaffirmed) Outlook: Stable CRISIL believes that KCS will continue to benefit over the medium term from its promoter's extensive industry experience. The outlook may be revised to 'Positive' if there is a significant and sustainable improvement in KCS's revenue and profitability, along with improvement in its working capital cycle, resulting in better-than-expected cash accruals. Conversely, the outlook may be revised to 'Negative' in case of any delay by the company in meeting its financial obligations, most likely due to continued pressure on cash generation from business and lack of timely funding support from its promoters. KCS was originally established in 1971 by Mr. Kishore Chandra Sahu as a proprietorship firm; the firm was reconstituted as a private limited company in 1991. Based in Rourkela (Odisha), KCS undertakes turnkey projects involving supplying, fabricating, and erecting electrical and mechanical components, and also civil construction. For 2012-13 (refers to financial year, April 1 to March 31), KCS reported a net loss of INR22.8 million on net sales of INR74 million, against a net loss of INR9.1 million on net sales of INR91 million for 2011-12. M. J. INDUSTRIES: CRISIL Assigns 'B' Rating to INR92.5MM Loans -------------------------------------------------------------- CRISIL has assigned its 'CRISIL B/Stable' rating to the long-term bank facilities of M. J. Industries. Amount Facilities (INR Mln) Ratings ---------- -------- ------- Term Loan 12.5 CRISIL B/Stable Cash Credit 45 CRISIL B/Stable Proposed Long Term Bank Loan Facility 35 CRISIL B/Stable The rating reflects MJI's weak financial risk profile, marked by high gearing and weak debt protection metrics, and small scale of operations in the fragmented rice industry. These rating weaknesses are partially offset by the industry experience of the firm's partners, and the financial support it receives from them. Outlook: Stable CRISIL believes that MJI will maintain its business risk profile over the medium term, backed by the extensive industry experience of its promoters. Its financial risk profile is, however, expected to remain constrained over this period, with high gearing and weak debt protection metrics. The outlook may be revised to 'Positive' in case of significant improvement in the firm's financial risk profile, most likely driven by capital infusion or increase in its scale of operations. Conversely, the outlook may be revised to 'Negative' if MJI's financial risk profile deteriorates, most likely due to significant increase in inventory, leading to large incremental bank borrowings, or debt-funded capital expenditure. MJI is a partnership firm set up in 1998 by Mr. Kewal Krishna, Mr. Pawan Kumar, and Mr. Rakesh Kumar. The firm is engaged in the milling and processing of paddy into basmati rice. It has an installed paddy milling capacity of 70 tonnes per day in Jalalabad district (Punjab). PIONEER EMBROIDERIES: CARE Keeps 'D' Rating on INR127.74cr Loan --------------------------------------------------------------- CARE reaffirms ratings assigned to bank facilities of Pioneer Embroideries Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term Bank Facilities 39.70 CARE D Suspension (Fund Based) Revoked/Rating Reaffirmed Long Term Bank Facilities 82.18 CARE D Suspension (Term Loan) Revoked/Rating Reaffirmed Short Term Bank Facilities 5.86 CARE D Suspension (Non Fund Based) Revoked/Rating Reaffirmed Rating Rationale The rating is constrained by delay in debt servicing owing to strained liquidity position. Pioneer Embroideries Limited was incorporated in 1991 and is in the business of manufacturing embroidered fabrics, laces and dope dyed yarn. The company has eight plants at different locations. As on March 31, 2013, the company had an installed capacity of Embroidery (4248 million stitches), Bobbin Lace (25,200,000 mtrs), spun yarn (1,788 MT) and dope dyed yarn (10,500 MT). The company also has a presence in the retail segment through its subsidiary by the name Hakoba Lifestyle Limited and PEL operates the outlets under the brand name 'Hakoba'. PEL was referred to Corporate Debt Restructuring (CDR) cell for debt restructuring in FY12 (refers to the period April 01 to March 31). REFEX REFRIGERANTS: ICRA Withdraws 'D' Rating on INR34.41cr Loans ----------------------------------------------------------------- ICRA has withdrawn the suspended long term rating of '[ICRA]D' assigned to the INR16.0 crore cash credit limits and the INR6.41 crore term loans of Refex Refrigerants Limited. ICRA has also withdrawn the suspended short term rating of [ICRA]D assigned to the INR12.0 crore short term non fund based facilities of RRL, as the company has fully repaid the loans and there is no amount outstanding against the rated instruments. SJ INTERNATIONAL: ICRA Puts 'B/A4' Rating on INR11.9cr Loans ------------------------------------------------------------ ICRA has assigned a long term rating of [ICRA]B and a short term rating of [ICRA]A4 to the INR7.00 Crore fund based facilities. ICRA has also assigned a short term rating of [ICRA]A4 to the INR0.25 crore non fund based facility of SJ International. The combined fund based and non fund based utilisation should not exceed INR7.00 Crore at any point of usage. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based Limits- EPC/PSC 7.00 [ICRA]B/[ICRA]A4; Assigned Fund Based-Bullion Loan 4.90 [ICRA]B/[ICRA]A4; Assigned Non Fund Based Inland Guarantee 0.25 [ICRA]A4; Assigned The rating is constrained by SJI's modest scale of operations and weak financial profile characterised by low profitability, high working capital intensity and a highly leveraged capital structure. Further SJI has witnessed stagnancy in revenues for last two fiscals, given its susceptibility to economic activities in the key consuming markets primarily USA. ICRA also notes the intense competition prevalent in the industry in which SJI operates, which in turn is expected to keep margins under pressure. The rating however favourable factor in the promoters experience and operating track record in the gems and jewellery business and fiscal benefits arising out of its location in a tax free zone. SJ International was incorporated in 2006 by family members of Revashankar Pandya group. The company is engaged in manufacturing and export of high end diamond and colour stone studded gold and silver jewellery. The company has a manufacturing facility at SEEPZ, Mumbai. The companies in Revashankar Pandya Group include Shangold India Ltd., Revashankar Gems Ltd., Shankar Jewels Limited, Shankar Packaging Ltd., Shankar Realty Ltd. Shankar Securities Pvt. Ltd., Naqsh Collection, Diamond India Corporation and S.J International. Recent Results: For the financial year ended 2012-13 (audited), SJI registered a net profit of INR0.18 crore on an operating income of INR20.42 crore. SPICEJET LTD: Posts INR1,003.2cr Loss in FY2013-14 -------------------------------------------------- The Times of India reports that SpiceJet has posted its highest ever annual loss of INR1,003.2 crore in the financial year 2013-14 up five times from INR191 crore in the previous fiscal. TOI relates that the company's auditor has said this loss along with SpiceJet's total liabilities exceeding its assets by INR1,019.5 crore on March 31, 2014, "indicate the existence of a material uncertainty regarding the company's ability to continue as a going concern". According to the report, the auditor, S R Batliboi and Associates said the FY 2013-14 loss figure would have been up by another INR7.5 crore had SpiceJet made provision for interest of a like amount on outstanding inter-corporate deposits taken by it in the past. In the quarter ended March 31, 2014, SpiceJet lost INR321.5 crore. "The year ended March 31, 2014, was perhaps the most challenging period in Indian aviation history. The sharp depreciation of the Rupee during the quarter ended September 30, 2013, was unprecedented. Given the fact that over 75% of any Indian airline's cost is influenced by $, the effects of the exchange rates on a broad spectrum of cost heads were crippling," the airline said in a statement, TOI relays. The airline's revenue increased 12% to INR6,350.6 crore from the last fiscal. But its expenses rose 24% to INR7,303.7 crore in this fiscal. As a result, the loss widened despite a 5% increase in average air fare to INR4,253 from INR4,052 in the same period, TOI discloses. "Market stimulation (read discounts) also resulted in SpiceJet gaining market share in March 2014 relative to previous month, despite 2% capacity reduction. SpiceJet expects the macroeconomic environment to significantly improve and demand to grow in FY 2014-15. SpiceJet is well into the process of executing on a re- structuring and transformation plan to position it well as market conditions improve, and to take on the challenge of new entrants that are expected to enter the market," the statement added. About Spicejet Ltd SpiceJet Limited -- http://www.spicejet.com/-- is an India-based low-budget air carrier. The Company operates daily flights between major cities in India. SpiceJet posted INR1.91 billion and INR6.05 billion annual net losses for the year ended March 31, 2013 and 2012, respectively. STERLING STONEX: ICRA Assigns 'B+' Rating to INR4.60cr Loans ------------------------------------------------------------ ICRA has assigned a long term rating of '[ICRA] B+' and a short term rating of 'ICRA A4' to INR10.00 crore bank facilities of Sterling Stonex Private Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Term Loan 1.60 [ICRA]B+ assigned Cash Credit 3.00 [ICRA]B+ assigned LC 0.20 [ICRA]A4 assigned BG 0.10 [ICRA]A4 assigned Unallocated 5.10 [ICRA]B+/A4 assigned The rating takes into account SSPL's modest scale of operations despite its long presence in the granite quarrying and processing business. The Indian granite export industry is highly fragmented with large number of players; in addition to the intense domestic competition, Indian exporters face competition from China, South Korea and Brazil in the export market. The competition is worsened by the low value addition of the finished product with no product differentiation between players. Moreover SSPL is exposed to currency fluctuation risks as 80% of the sales of the company are in export market and high counter party credit risks with majority of the sales being made on credit basis. Further the company has high client concentration and geographic risks as more than 50% of the sales are made to a single customer in Germany. Further the need to stock large inventory and extend credit to the customers also results in high working capital intensity and dependence on debt funding. With increase in capacity by 100% from Jan 2014, the scale of operations is expected to increase which could result in liquidity pressures as the available working capital limits are fully utilized. The financial profile of the company is moderate with debt servicing metrics being comfortable but these remain highly sensitive to profitability owing to the low scale of operations of SSPL. The rating however favourably factors in the experience of promoters in the granite mining and processing business, integrated operations in quarrying and granite processing that results in relatively higher profitability and close proximity of the unit to quarries that results in savings in transportation costs. SSPL was incorporated in 1995 and has been engaged in quarrying granite and processing them to form granite monuments. The granite monuments are exported majorly to US and Europe. The total processing capacity of the unit is 206000 cubic meters. The company has 2 quarry blocks at Tekkali and Nizamabad spread over an area of 23 hectares. SURENDRA KUMAR: CARE Assigns 'B+' Rating to INR2.5cr Bank Loan --------------------------------------------------------------- CARE assign 'CARE B+/CARE A4' ratings to bank facilities of Surendra Kumar. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank Facilities 2.50 CARE B+ Assigned Long-term/Short-term 3.50 CARE B+/CARE A4 Bank Facilities Assigned The ratings assigned by CARE are based on the capital deployed by the partners and the financial strength of the firm at present. The ratings may undergo a change in case of the withdrawal of capital or the unsecured loans brought in by the partners in addition to the financial performance and other relevant factors. Rating Rationale The ratings assigned to the bank facilities of Surendra Kumar are primarily constrained by its small and fluctuating scale of operations, low PBIDLT margin, moderate capital structure and working capital intensive nature of operations. The ratings are further constrained by low and concentrated order book position and its presence in the highly fragmented and tender-driven construction industry. The ratings, however, draw comfort from the experience of the partners in the construction business. The firm's ability to receive steady flow of orders & timely execution of the same, increase its scale of operations while managing its working capital requirement efficiently shall be the key rating sensitivities. Surendra Kumar was established as a partnership firm on July 11, 2011, by two partners, namely, Mr. Surender Kumar Singhal and Mr Nitin Kumar Singhal sharing profit and loss equally. SUK is primarily engaged in the construction of residential flats and commercial complex for Delhi Development Authority (DDA), Rail India Technical and Economic Services (RITES), Haryana Housing Board, etc. SUK is registered as a "Class I" civil contractor with Delhi Development Authority Contractor's Registration Board. It secures all the contracts through competitive bidding process and has completed projects for DDA and Housing Board Haryana. During FY13 (refers to the period April 1 to March 31), SUK reported a total operating income of INR11.55 crore and a net profit of INR0.43 crore. During FY14 (provisional), SUK has achieved a total operating income of INR12.53 crore. TATA MOTORS: Moody's Affirms Ba3 Corporate Family Rating -------------------------------------------------------- Moody's Investors Service has affirmed the Ba3 corporate family rating of Tata Motors Limited and maintained the stable outlook. Ratings Rationale Moody's expects the group's consolidated results for the financial year ended 31st March 2014 (FY2014), to be announced on 29th May, to show a marked improvement on last year, due solely to a record performance from Jaguar Land Rover Automotive plc (JLR, Ba2 stable) which sold 434,311 cars in FY2014, an increase of 15.9% over FY2013. By contrast the Indian operations have had a torrid time with total unit sales of passenger and commercial vehicles declining by 29% year on year in FY2014 and with market share declines in both segments. "The current year, FY2015, is critical for the group with both JLR and the Indian businesses facing challenges," says Alan Greene, a Moody's VP - Senior Credit Officer. "JLR will see slower sales growth, primarily due to capacity constraints, although it is likely to retain its strong liquidity profile even as it ramps up investment in new products and starts overseas manufacturing operations," continues Greene who is Lead Analyst for Tata Motors. "By contrast, Tata in India must find a way to recover lost market share in its commercial vehicle business and to develop its range of cars to compete with those produced by the global industry titans," adds Greene. Moody's notes that JLR's future model roll outs together with the need for additional manufacturing capacity has led JLR to increase its investment from around GBP2.7 billion in FY2014 to between GBP3.5 billion and GBP3.7 billion in FY2015. Until the investment bears fruit, JLR is potentially capacity constrained even though the first vehicles from its joint venture in China with Chery Automobile Co. (unrated), which has an annual capacity of 130,000 vehicles, could appear by the end of FY2015. Rolling three monthly retail sales growth for JLR slowed to 8% year on year in the last quarter of FY2014 but recovered to 12.7% in April 2014. Moody's expectation is for JLR to increase unit sales in FY2015 by a low single digit percentage, achievable from its available capacity. "The recovery in Tata's Indian operations hinges on some improvement in the economy following the election which will support commercial vehicle sales, and the enthusiasm of car buyers for Tata's new vehicles the Zest and Bolt, which will arrive in the showrooms in the second half of 2014," continues Greene. "However, until there is some relief in sight for Indian vehicle buyers in the form of lower interest rates, a material recovery in FY2015 is not assured, " he adds. Despite the poor operating performance of the parent or standalone company in India, it is likely to report profits in FY2014. This is the result of disposals to its wholly-owned subsidiary, TML Holdings Pte. Ltd. (TMLH, unrated) in Singapore and from the dividend received from TMLH, in essence, passed through from JLR. On a standalone basis TML would have a weaker rating, which can be viewed as balanced by JLR's strength to arrive at TML's consolidated rating of Ba3. Moody's notes that TMLH has raised $1.2 billion equivalent of debt in the last 13 months and is expected to raise more funds in order to support TML, given the latter's weak cash generation. However, the international businesses recently acquired from TML by TMLH are barely profitable, which leaves TMLH's ability to service debt primarily dependent on the annual dividend received from JLR, currently GBP150 million. Under the terms of its bonds, JLR has headroom to upstream significantly more funds to TMLH. Overall, TMLH's position as an intermediate holding company with no direct operating assets points to a credit profile somewhat weaker than that of JLR. Moody's has also taken the opportunity to bring the treatment of certain financial adjustments it makes in arriving at Tata Motors's credit metrics into line with those applied to other global auto manufacturers. The main change arises from the treatment of Tata Motors Finance Ltd. (TMF, unrated), TML's wholly-owned vehicle finance business and the charging of all capitalized product development to the current period. TMF's relationship with TML has been close and continues to be so with the business supporting around 30% of Tata vehicles sold on credit. In order to sustain its expansion, TML regularly injects equity into TMF and also pays monies to TMF through delinquency support and interest rate subsidy agreements. Nevertheless to bring TML group credit metrics into line with its peers, Moody's now present TML group credit metrics as the consolidated performance excluding the debt and interest expense arising in TMF. Similarly, Moody's has not adjusted TML's credit metrics in the past for capitalized engineering and development costs. Indeed, TML standalone's investment in new products has been small which is one of the factors behind its loss of market share. By contrast, JLR has been investing heavily in development and Moody's has been adjusting JLR's credit metrics for capitalized costs. Moody's credit metrics for the group now adjust for capitalized development costs throughout. The stable outlook reflects JLR's relative strength which continues to buy time for the core Indian business to recover and, despite the negative free cash flow overall, continues to support group credit metrics at an appropriate level for the Ba3 rating. However, FY2015 is a critical year as JLR's sales growth rate slows and execution risk rises both in terms of increased product development expenditure and the starting up of overseas manufacturing operations. At the same time, Tata's Indian operations need to regain some of their lost market share, with success of new launches key to the passenger car business's long- term prospects. Upward pressure on the rating could emerge if JLR's credit metrics improve further while releasing more funds to the Indian operations and/or TML's standalone vehicle business in India improves its existing margins due to improving economic conditions and successful product launches. Solid execution of the companies' internationalization plans -- JLR's overseas manufacturing and TML's plans to increase sales to regional markets - would also support a positive rating action. Group credit metrics that might indicate an upgrade include Adjusted debt/EBITDA below 4.0x and EBITA margins maintained at 6% or higher, on a sustained basis. Furthermore, an FCF/debt ratio greater than 6% to 8%, is appropriate for the mid-Ba range. Downward pressure on the rating could emerge if JLR's sales performance declines more than anticipated and/or TML in India is unable to sustain its performance due to input cost pressures, weak markets, disappointing new products and further loss of market share, all potentially resulting in lower revenues and reduced margins. Depending on the remedy, a breach of financial covenants could also lead to a downgrade. This could be reflected in various credit metrics when viewed on a sustained basis such as i) Adjusted debt/EBITDA increasing to over 5x and ii) EBITA margins falling below 4%. FCF/debt falling below 5% would also potentially lead to a downgrade. Tata Motors Ltd is the largest manufacturer of commercial vehicles and one of the top four manufacturers of passenger vehicles in India. Globally, the company is the fourth-largest truck and bus manufacturer. Since the acquisition of Jaguar Land Rover in June 2008, the group enjoys a genuine global profile in cars through JLR's presence in its key markets such as UK, Europe, US, China, Russia, and Brazil, and the group's range broadened with the addition of JLR's luxury cars and 4x4 Vehicles. The principal methodology used in this rating was the Global Automobile Manufacturer Industry published in June 2011 and the Rating Relationship Between Industrial Companies And Their Captive Finance Subsidiaries published in May 2012. Other methodology used includes Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. TECKBOND LABORATORIES: CRISIL Reaffirms D Rating on INR100M Loans ----------------------------------------------------------------- CRISIL's ratings on the bank facilities of Teckbond Laboratories Private Limited continue to reflect instances of delay by TLPL in servicing its debt; the delays have been caused by the company's weak liquidity, resulting from its large working capital requirements. Amount Facilities (INR Mln) Ratings ---------- -------- ------- Bank Guarantee 5 CRISIL D (Reaffirmed) Cash Credit 50 CRISIL D (Reaffirmed) Letter of Credit 20 CRISIL D (Reaffirmed) Proposed Long Term Bank Loan Facility 19 CRISIL D (Reaffirmed) Term Loan 6 CRISIL D (Reaffirmed) TLPL scale of operations remains small. These rating weaknesses are partially offset by the benefits that TLPL derives from the extensive industry experience of its promoters. Update For 2013-14 (refers to financial year, April 1 to March 31), TLPL registered operating income of INR32 million as compared to INR454 million in the previous year (refers to financial year, April 1 to September 31). The company's operating profitability improved to about 16 per cent as against 8 per cent in the previous year. The improvement is mainly on account of higher proportion of job-work income derived through 2013-14. The company's working capital requirements continue to remain large with gross current asset of over 150 days as on Mar 31, 2014. Incorporated in 2004 by Mr T Bose Babu, TLPL manufactures intermediates used in manufacturing bulk drugs. TIRUPATI JUTE: CRISIL Reaffirms 'B+' Rating on INR165MM Loans ------------------------------------------------------------- CRISIL's ratings on the bank facilities of Tirupati Jute Industries Ltd continue to reflect TJIL's below-average financial risk profile marked by modest net worth, high gearing, and weak debt protection metrics, its large working capital requirements, and susceptibility to uncertainties in a regulated industry and to vagaries of nature. These rating weaknesses are partially offset by the extensive experience of TJIL's promoters in the jute industry. Amount Facilities (INR Mln) Ratings ---------- -------- ------- Bank Guarantee 10 CRISIL A4 (Reaffirmed) Cash Credit 113 CRISIL B+/Stable (Reaffirmed) Letter of Credit 50 CRISIL A4 (Reaffirmed) Proposed Long Term Bank Loan Facility 24.5 CRISIL B+/Stable (Reaffirmed) Term Loan 27.5 CRISIL B+/Stable (Reaffirmed) Outlook: Stable CRISIL believes that TJIL will continue to benefit over the medium term from its promoters' extensive industry experience. The outlook may be revised to 'Positive' if the company significantly improves its financial risk profile, most likely driven by equity infusion or substantially large accruals. Conversely, the outlook may be revised to 'Negative' if TJIL undertakes any large debt- funded capital expenditure (capex) programme or if its working capital cycle lengthens, weakening its financial risk profile, especially its liquidity. TJIL, incorporated in 1981, is promoted by the Mall family of West Bengal. The company manufactures jute products such as jute bags and hessian cloth. Its facilities in Howrah (West Bengal) have capacity of 17,000 tonnes per annum. For 2012-13 (refers to financial year, April 1 to March 31), TJIL reported a profit after tax (PAT) of INR1.4 million on net sales of INR602 million, against a PAT of INR3.5 million on net sales of INR607 million for 2011-12. UNITED WIRE: CRISIL Reaffirms B+ Rating on INR100MM Loans --------------------------------------------------------- CRISIL's rating on the long-term bank facilities of United Wire Products continues to reflect UWP's weak financial risk profile, marked by a small net worth, high gearing, and weak debt protection metrics. The rating also factors in the firm's small scale of operations with constrained profitability in the intensely competitive wire manufacturing industry, and its working-capital-intensive operations. These rating weaknesses are partially offset by the extensive industry experience of UWP's partners and its diversified customer profile. Amount Facilities (INR Mln) Ratings ---------- -------- ------- Cash Credit 90 CRISIL B+/Stable (Reaffirmed) Proposed Long Term Bank Loan Facility 3.5 CRISIL B+/Stable (Reaffirmed) Term Loan 6.5 CRISIL B+/Stable (Reaffirmed) Outlook: Stable CRISIL believes that UWP will continue to benefit over the medium term from its partners' extensive industry experience. The outlook may be revised to 'Positive' if the firm significantly scales up its operations and improves its profitability, leading to a better financial risk profile. Conversely, the outlook may be revised to 'Negative' if UWP's financial risk profile deteriorates, most likely on account of larger-than-expected debt-funded working capital requirements or decline in its profitability. Update UWP's operating income is estimated to have declined to INR303 million in 2013-14 (refers to financial year, April 1 to March 31) from INR369 million in the previous year; the decline was driven by lower sales to government agencies such as electricity boards, public health systems, and irrigation departments. The firm's operating margin has remained stable at around 5.4 per cent over the past two years. UWP's working capital requirements have remained high, mainly on account of high inventory and debtor requirements, over the four years ended March 31, 2014. The firm maintains inventory of raw materials and finished goods of around two months. The raw material is procured from Steel Authority of India Limited (SAIL), Jindal Steel and Power and Vishakhapatnam Steel Plant wherein it has to make cash payments, leading to high inventory holding of 53 to 70 days over the four years ended March 31, 2014. The firm offers credit of 60 to 90 days, leading to estimated debtors of 80 days as on March 31, 2014, and hence to high average bank limits utilisation of 97 per cent over the 12 months through December 2013. UWP's financial risk profile has been below average, as reflected in its high gearing estimated at 2.39 times as on March 31, 2014, mainly because of high reliance on bank borrowings for meeting its incremental working capital requirements. It had a net worth of INR44 million as on March 31, 2014. UWP's debt protection metrics have remained below average, with interest coverage and net cash accruals to total debt ratios of around 1.4 times and 0.04 times, respectively, in 2013-14. The firm has weak liquidity. Its cash accruals for 2013-14 are estimated at around INR4.6 million against debt obligations of INR1.3 million during the year. UWP, set up in 1994, manufactures several types of mild steel wires such as galvanized wires, earth wires, barbed wires, binding wires, chain-link fencing, stitch wires and black annealed wires. These products are used by the automobile, construction, and agricultural-based industries, and electricity boards, among others. UNIVERSAL POLYMERS: CRISIL Assigns 'B' Rating to INR20MM Loan ------------------------------------------------------------- CRISIL has assigned its 'CRISIL B/Stable/CRISIL A4' ratings to the bank facilities of Universal Polymers Pvt Ltd. Amount Facilities (INR Mln) Ratings ---------- -------- ------- Cash Credit 20 CRISIL B/Stable Letter of Credit 60 CRISIL A4 The rating reflects UPPL's below-average financial risk profile marked by small net worth and weak debt protection metrics, modest scale of operations, and large working capital requirements. These rating weaknesses are partially offset by the extensive experience of UPPL's promoters in the Poly Vinyl Chloride (PVC) industry. Outlook: Stable CRISIL believes UPPL will benefit from its promoters' extensive experience and its established relationships with major suppliers. The outlook may be revised to 'Positive' in case of significant improvement in its scale of operations and profitability resulting in higher than expected cash accruals along with improvement in the working capital cycle. Conversely, the outlook may be revised to 'Negative' in case of larger than expected working capital requirements, lower than expected cash accruals, or more than expected debt-funded capital expenditure, constraining its liquidity. Established in 2010 and based in Kanpur (Uttar Pradesh), UPPL trades in PVC resins, panels and calcite powder. The company started operations in January 2012. Its day-to-day operations are being managed by Mr. Sandeep Agarwal. The management is setting up Unplasticised Poly Vinyl Chloride (UPVC) windows and door manufacturing unit and is expected to start full production from May 2014. VIKRAM HOSPITAL: CRISIL Reaffirms 'D' Rating on INR546.8MM Loans ---------------------------------------------------------------- CRISIL's rating on the long-term bank facilities of Vikram Hospital Pvt Ltd (part of the Vikram group) continues to reflect instances of delay by VHPL in servicing its debt; the delays have been caused by the company's weak liquidity. Amount Facilities (INR Mln) Ratings ---------- -------- ------- Cash Credit 36.6 CRISIL D (Reaffirmed) Long Term Loan 455.1 CRISIL D (Reaffirmed) Proposed Long Term Bank Loan Facility 55.1 CRISIL D (Reaffirmed) The Vikram group is exposed to risks related to small scale of operations with geographical concentration in revenue profile. Moreover, the group has a below-average financial risk profile marked by high gearing and weak debt protection metrics. The group, however, benefits from its established position in the tertiary health care segment in Karnataka. For arriving at the rating, CRISIL has combined the business and financial risk profiles of VHPL and its subsidiary Vikram Hospitals (Bengaluru) Pvt Ltd (VHBPL). This is because VHPL and VHBPL, together referred to as the Vikram group, have common promoters, operational synergies, and fungible funds, and are in the same line of business. Update The Vikram group continue to delay its interest and term loan obligations because of weak liquidity. CRISIL believes that the Vikram group's liquidity will remain weak over the medium term because of inadequate cash accruals for meeting its debt obligations. Established in 2002 by Dr. S B Vikram in Mysore (Karnataka), the Vikram group provides tertiary healthcare and other healthcare- related services. YASHWANT PLACE: CARE Assigns 'B+' Rating to INR7.5cr Bank Loan -------------------------------------------------------------- CARE assigns 'CARE B+' rating to the bank facilities of Yashwant Place Service Station. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 7.50 CARE B+ Assigned The rating assigned by CARE is based on the capital deployed by the partners and the financial strength of the firm at present. The rating may undergo a change in case of withdrawal of the capital or the unsecured loans brought by the partners in addition to the financial performance and other relevant factors. Rating Rationale The rating assigned to the bank facilities of Yashwant Place Service Station (YPSS) are primarily constrained by its weak financial risk profile characterized by its modest scale of operations, thin profitability margins, leveraged capital structure, weak debt protection metrics and working capital intensive nature of its operations. The rating is also constrained by its presence in a highly competitive & fragmented industry and its constitution as a partnership firm. The rating, however, favourably takes into account the experience of the partners coupled with the growing scale of YPSS operations and its association with Bharat Petroleum Corporation Limited (BPCL) as an authorized dealer for its petroleum products. YPSS's ability to scale up its operations with continuation of BPCL's dealership, improvement in capital structure along with effective working-capital management shall be the key rating sensitivities. Delhi-based Yashwant Place Service Station was established in 2002 as a partnership firm by Mr Raj Kumar Goel and Mr Pradeep Mehra sharing profit and loss in the ratio of 65% and 35% respectively. The firm is operating a dealer-owned and dealer-operated filling station of Bharat Petroleum Corporation Limited (BPCL) for the retail sale of petroleum products, lubricants and engine oils. The main products are petrol, diesel and various types of motor oils. The firm is also running an "In & Out" convenience store to sell groceries and various household items. For FY13 (refers to the period April 01 to March 31), YPSS has reported a net profit of INR0.03 crore on a total operating income of INR44.50 crore. The firm had achieved total sales of INR64.66 crore during FY14 (based on unaudited results). =============== M A L A Y S I A =============== MALAYSIA AIRLINES: Massive Share Sale Amid Bankruptcy Fears ----------------------------------------------------------- The Malaysian Reserve reports that the looming bankruptcy fear for loss-making Malaysian Airline System Bhd (MAS) caused a selling streak on Monday, May 19, that saw its shares falling 18.42% or 3.5 sen to end at 15.5 sen. Trading volume for MAS was heavy with 412.25 million shares changing hands, the report says. The Malaysian Reserve relates that the shares of MAS -- which is currently burdened by heavy financial losses and the MH370 saga -- opened at 17.5 sen on May 19 and were sold down to 15 sen, a record low. The report notes that the airline's shares have dropped 60% over the last one year, despite an increase of 6.7% in its weightage on the FTSE Bursa Malaysia KLCI Index. The shares closed at 19 sen on May 16, Malaysian Reserve relays. According to the report, Maybank Investment Bank Bhd aviation analyst Mohshin Aziz said the selling momentum is "too strong" and the share price downtrend is expected to continue for a day or two more. "I am not surprised at the selling momentum. I expect the share price downtrend to continue for another one or two days, before it stabilises," he told The Malaysian Reserve. The Malaysian Reserve states that Prime Minister Datuk Seri Mohd Najib Razak had stressed that it might be too late to save MAS in its current form as the national flag carrier struggles to stay afloat following the disappearance of flight MH370. The premier also pointed out that bankruptcy might be among several options as a way to restructure the ailing airline, after years of losses and bitter conflicts with its labour unions, the report relays. According to The Malaysian Reserve, Mr. Mohshin said such statement coming from the prime minister might be a huge letdown to investors who were expecting a proper restructuring plan to be put in place. "The prime minister did not rule out bankruptcy and it is too late to save the airline. That statement, coming from a statesman, would definitely scare investors," Mr. Mohshin, as cited by The Malaysian Reserve, added. About Malaysia Airlines Headquartered in Selangor, Malaysia, Malaysia Airlines -- http://www.malaysiaairlines.com/-- services domestic and international flights. Its global network comprised 32 domestic and 86 international destinations. Of the 86 international destinations, 17 were operated in collaboration with airlines partners. ==================== N E W Z E A L A N D ==================== KIMBERLEY HILL: Model and Talent Agency Placed in Receivership -------------------------------------------------------------- Hamish Fletcher at the New Zealand Herald reports that an Auckland model and talent agency that was struggling to pay its young actors has gone into receivership. NZ Herald says Kimberley Hill Management -- which last week changed its name to NZMT -- was put into receivership on May 19, according to Companies Office records. Neither receiver John Gilbert nor the company's director Kimberley Hill was immediately available for comment, the report relates. The Companies' Office does not say who appointed Gilbert as a receiver, the Herald notes. Two extras -- Mandy Madden and Justin Shand -- who acted on the TV series Power Rangers told the Herald on Sunday last week that they still owed money for work they did on the show last year. After the Herald on Sunday contacted the agency last week, Ms. Hill called the pair and promised to pay them. Ms. Hill said a decline in offshore productions visiting New Zealand and the strong Kiwi dollar had made business difficult but she would "personally guarantee" to pay her clients, the Herald adds. ==================== S O U T H K O R E A ==================== CHONGHAEJIN MARINE: Banks May Face Sanctions For Loans ------------------------------------------------------ Chung Ah-young at The Korea Times reports that Woori Bank and other banks may face sanctions for the lax management of their loans to Chonghaejin Marine, the operator of the sunken Sewol ferry, and its affiliates, according to the Financial Supervisory Service (FSS). Local banks were found to have been heavily engaged with the affiliates. About 90 percent of the loans procured by the Chonghaejin affiliates came from banks, the financial watchdog said, the report relates. According to the report, the financial regulator said Chonghaejin and its business partners have obtained a combined KRW374.7 billion in loans from 42 financial firms. It breaks down to KRW336.5 billion for Chonghaejin and its affiliates and KRW38.2 billion for individuals including Yoo Byeong-eun, the de facto owner of Chonghaejin Marine, his children and business partners, The Korea Times discloses. Among them, the banks offered KRW303.3 billion or 90 percent or of the total loans. Woori Bank was the largest creditor bank, with loans of more than KRW90 billion, the report relates. The report says the FSS has been inspecting the financial firms to find out whether there have been illegal transactions in the process. The investigation has so far found no illegal transactions, the report notes. But the FSS said that some financial firms appear to have extended loans to Chonghaejin Marine and affiliates after overestimating the value of its collateral and failed to track whether the loans were used for their cited purposes, the Korea Times reports. "We will take disciplinary actions on the banks for any irregularities or negligence on the follow-up screening of the cited purposes for the loans," the report quotes an FSS official as saying. The report relates that the FSS said banks played a crucial role in granting massive loans, which enabled the affiliates to use the money for other purposes. Woori Bank lent the largest amount of KRW92.6 billion, among other banks, followed by the Korea Development Bank (KDB) with KRW61.1 billion, and the Industrial Bank of Korea and Kyongnam Bank with KRW54.4 billion, the report discloses. Also, other banks such as Kookmin Bank offered loans of KRW6.4 billion, Nonghyup Bank KRW7.7 billion, Hana Bank KRW8.7 billion and Shinhan Bank KRW5.4 billion, the report adds. The Korea Times relates that the financial regulator said the loans were granted against collateral but the banks are responsible for neglecting the supervision of whether the loans were used for their original purposes. "Yoo, his family members and affiliates took out the loans from the banks but they didn't follow up on their usages after the loans were granted," the FSS official, as cited by The Korea Times, said. Also, the report relates, the banks provided KRW21.1 billion or two thirds of the KRW38.2 billion in loans to relevant individuals such as Yoo, his children and other business partners, raising the suspicion that the loans could have been used illegally for running their affiliates and spent for other purposes. Concerning the possible misuses of the loans, the FSS has been probing the Korea Development Bank, IBK, Woori Bank, Kyongnam Bank, the National Federation of Fisheries Cooperatives (NFFC) and the Korea Eximbank, the report adds. KOOKMIN BANK: Faces FSS Probe Over Irregularities ------------------------------------------------- Yonhap News Agency reports that the South Korean financial watchdog will conduct a full-scale inspection on the country's biggest lender Kookmin Bank next month, officials said on May 19, an unprecedented move that aims to get to the bottom of a spate of irregularities and internal troubles plaguing it. The news agency says the microscopic scrutiny would be the first such action by the Financial Supervisory Service (FSS) on a bank, although the watchdog has carried out inspections on specific cases when it detects problems at a financial institution. "We've pointed out the problems at Kookmin Bank in separate cases so far, but now the situation has reached a point where we have to conduct a pre-emptive all-out inspection," Yonhap quotes an official at the FSS as saying. Yonhap notes that the move follows an internal static within the bank's board of directors over the introduction of a new computation system. According to the report, an auditor of Kookmin Bank last month raised issue with the board's earlier decision to adopt a new system as having serious procedural problem. But the board on May 19 refused to accept the auditor's opinion and decided to push ahead with its original plan. The auditor reported the case to the FSS, Yonhap says. Yonhap relates that the FSS sees Kookmin Bank as having failed in its internal control system due to slack discipline. "This is not a simple inspection. The FSS will check every system and process including decision-making procedure to discover why Kookmin Bank continues to make noise," the official, as cited by Yonhap, said. FSS Gov. Choi Soo-hyun has instructed the watchdog to take strict action against the lender with zero tolerance, he added. Kookmin Bank, the flagship unit of South Korea's No. 3 banking group KB Financial, has been embroiled in a series of scandals since last year. As reported in the Troubled Company Reporter-Asia Pacific on Dec. 2, 2013, Yonhap News Agency said a consumer advocacy group had planned to request the financial watchdog to probe top lender Kookmin Bank on concerns over losses inflicted on bank customers. According to the report, KB Financial Group and its banking unit Kookmin Bank have been under fire as the Tokyo office of Kookmin Bank is suspected of raking in KRW2 billion (US$1.89 million) from illegal lending and sending the hefty commissions back home. Yonhap related that the Financial Consumer Agency said it plans to accept complaints from loss-hit customers due to Kookmin Bank's alleged wrongdoings and will request the Financial Supervisory Service (FSS) to probe them within this year. South Korea-based Kookmin Bank Co. Ltd. provides various banking and other financial services to individuals, small- and medium- sized enterprises, and large corporations. ********* Tuesday's edition of the TCR-AP delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR-AP editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Tuesday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR-AP constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR-AP editor holds some position in the issuers' public debt and equity securities about which we report. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR-AP. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com Friday's edition of the TCR-AP features a list of companies with insolvent balance sheets obtained by our editors based on the latest balance sheets publicly available a day prior to publication. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Asia Pacific is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Valerie U. Pascual, Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Julie Anne L. Toledo, 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 ***