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T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Thursday, June 26, 2014, Vol. 17, No. 125
Headlines
A U S T R A L I A
CRS CORP: Restaurant Group Placed in Administration
FLEXI ABS 2014-1: Fitch Assigns 'BBsf' Rating to Class E Notes
FLEXI ABS 2014-1: Moody's Assigns Ba2 Rating on AUD3.82MM Notes
I.M.E. NOMINEES: In Administration; First Meeting Set July 2
R & A PAPILLO: High Court Appoints Clifton Hall as Liquidators
I N D I A
AIR INDIA: No Decision Taken to Privatise Carrier, Govt. Says
BHAGAWATI INDIA: CARE Assigns 'B' Rating to INR11.80cr Bank Loan
CORAL ASSOCIATES: ICRA Reaffirms 'B' Rating on INR28.88cr Loans
DAMODAR TIMBER: CRISIL Reaffirms 'B' Rating on INR5MM Loan
DHANTURI GROUP: CRISIL Ups Rating on INR200MM Loans to 'B+'
EKTA SHAKTI: CRISIL Reaffirms 'B' Rating on INR60MM Loans
FAHIM TANNING: CRISIL Cuts Rating on INR50MM Loans to 'D'
GOVARDHAN INDUSTRIES: CARE Cuts Rating on INR77.26cr Loan to 'D'
HINDOK EXPORTS: CRISIL Assigns 'B+' Rating to INR100MM Loans
JAYANT K FURNISHERS: CRISIL Reaffirms B+ Rating on INR10MM Loan
KAMA METAL: CRISIL Reaffirms 'B+' Rating on INR110MM Loans
KESAR IMPEX: CRISIL Reaffirms 'D' Rating on INR150MM Loans
KUN COMMERCIAL: CRISIL Cuts Rating on INR300MM Loans to 'D'
MEADOWZ MEDIA: CRISIL Cuts Rating on INR97.5MM Loans to 'D'
NUZEN HERBAL: ICRA Reaffirms 'B' Rating on INR38cr Bank Loan
ORITO POLYFAB: CRISIL Assigns 'B' Rating to INR170MM Loans
PRIMORDIAL SYSTEMS: CRISIL Reaffirms B- Rating on INR150MM Loans
QUERESHI INT'L: CRISIL Reaffirms 'B' Rating on INR280MM Loans
R KUKREJA: CARE Assigns 'B' Rating to INR13.88cr Loan
RAGHUVANSHI INDUSTRIES: CRISIL Keeps B+ Rating on INR200M Loan
RAJ COKE: ICRA Suspends 'D' Rating on INR6.93cr Bank Loan
RASIK VATIKA: CRISIL Upgrades Rating on INR140MM Loan to 'B+'
ROCKMAN INDUSTRIES: ICRA Ups Rating on INR45.99cr Loans From 'D'
ROSEWOOD LAMINATES: CRISIL Assigns 'B' Rating to INR90MM Loans
SETHI COKE: ICRA Suspends 'D' Rating on INR6.88cr Bank Loan
SHABARI FARMS: ICRA Assigns 'B' Rating to INR9cr Bank Loans
SHEEN INDIA: ICRA Reaffirms 'B' Rating on INR23.5cr Bank Loan
SHETKARI SAKHAR: CRISIL Lowers Rating on INR450MM Loan to 'D'
SHREE SITA: ICRA Suspends 'B+/A4' Rating on INR7cr Term Loan
SHRI SIDHDATA: CARE Cuts Rating on IN131.95cr Loans to 'D'
SPARK GREEN: ICRA Upgrades Rating on INR80cr Bank Loan to B-
SRI BALAJI: ICRA Suspends 'D' Rating on INR6.95cr Bank Loan
SWAGATH MARRIAGE: CRISIL Ups Rating on INR148MM Term Loan to 'B+'
U.C. JAIN: CARE Assigns 'B' Rating to INR9cr Bank Loan
VINOD COTFAB: CARE Assigns 'B' Rating to INR16.50cr Bank Loan
WITTY AUTO: ICRA Suspends 'B-' Rating on INR8cr Bank Loan
I N D O N E S I A
BERAU COAL: S&P Puts 'BB-' CCR on CreditWatch Negative
N E W Z E A L A N D
ROSS ASSET: David Ross Loses Appeal Against Jail Term
S R I L A N K A
SANASA DEVELOPMENT: Fitch Affirms BB+ Rating; Outlook Stable
T H A I L A N D
THANACHART BANK: Fitch Affirms 'BB+' Support Rating Floor
V I E T N A M
VIETNAM NATIONAL: Faces Uphill Task to Repay VND11 Trillion Debts
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A U S T R A L I A
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CRS CORP: Restaurant Group Placed in Administration
---------------------------------------------------
SmartCompany reports that a major Queensland-based restaurant
empire of gelato bars, Mexican and Sri Lankan cuisine has
collapsed, leaving creditors hungry for answers.
CRS Corp, along with its sister companies AUA Holdings and AUA
Group, were used to control the popular restaurant chains Ceylon
Inn and Rosa Mexicano, along with a standalone La Bonita gelato
bar in Graceville, SmartCompany relates.
The report says the companies owned a string of Sri Lankan
restaurants across South-East Queensland, with Ceylon Inn
locations in Kenmore, Toowong, Bulima and Graceville.
Meanwhile, its Rosa Mexicano chain owned stores in St Lucia,
Rosalie, Graceville and St Lucia, SmartCompany reports.
On May 27, the restaurant chains collapsed, with Ian Alexander
Currie from BRI Ferrier appointed as administrator of CRS Corp,
AUA Holdings and AUA Group, the report discloses. A meeting of
creditors took place on June 6.
A second meeting of creditors is scheduled to take place at midday
on July 2, where they will learn the fate of the chain, the report
notes.
SmartCompany, citing the Courier Mail, reports that the collapse
was caused by owner Asoka Alakahone racking up debts of over
AUD2.6 million. The businesses reportedly employ more than 80
workers, the report notes.
FLEXI ABS 2014-1: Fitch Assigns 'BBsf' Rating to Class E Notes
--------------------------------------------------------------
Fitch Ratings has assigned final ratings and Outlooks to Flexi ABS
Trust 2014-1, which is backed by small balance consumer loan
receivables, due October 2018. The ratings are as follows:
AUD89.3m Class A1 notes: 'F1+sf'
AUD108.4m Class A2 notes: 'AAAsf'; Outlook Stable
AUD23m Class B notes: 'AAsf'; Outlook Stable
AUD10.2m Class C notes: 'Asf'; Outlook Stable
AUD7.7m Class D notes: 'BBBsf'; Outlook Stable
AUD3.8m Class E notes: 'BBsf'; Outlook Stable
AUD12.8m Class F notes: not rated
The notes are issued by Perpetual Trustee Company Limited in its
capacity as trustee of Flexi ABS Trust 2014-1. The Flexi ABS
Trust 2014-1 is a legally distinct trust established pursuant to a
master trust and security trust deed.
At the cut-off date, the total collateral pool consisted of
120,075 consumer loan receivables totalling approximately
AUD250.1m, with an average size of AUD2,083 each. The loan
receivables, originated by Certegy Ezi-Pay Pty Ltd (Certegy) whose
ultimate parent is FlexiGroup Limited, are retail point-of-sale
interest-free consumer finance receivables that finance a wide
range of products including: jewellery (17.7%); home-related
products such as solar equipment (45.1%); fitness equipment
(3.9%); and a broad cross-section of other products.
KEY RATING DRIVERS
Experienced Originator: Certegy is a wholly owned subsidiary of
FlexiGroup Limited (FlexiGroup), a provider of retail point-of-
sale consumer finance. Certegy provides "no interest ever"
consumer loans, an interest-free product, and cheque guarantee
products in Australia. Certegy delivers its products through a
varied network of retailers and service providers.
Diverse and Granular Portfolio: The portfolio comprises retail
point-of-sale consumer finance receivables, originated by Certegy
to a geographically diversified pool of Australian retail
customers across many asset types. The contract size average is
AUD2,083 while the weighted average (WA) remaining term stands at
22.9 months. The pool contains 56.7% homeowners and buyers of
solar equipment (45.1%), with repeat customers making up 28.0%.
Strong Track Record: Delinquencies greater than 30 days on
Certegy's retail portfolio have historically tracked below 3.0%.
Support Features Support Rating: A liquidity reserve, funded by
proceeds from issuance, will ensure stable cash flows for all
rated notes and trust expenses. A derivative reserve account will
be established to set aside any voluntary prepayments made by
borrowers, to ensure sufficient income is available to cover
future swap payments.
No Residual Value Risk: All securitised loans are structured so
that there is no exposure to residual value risk, with the
borrower liable for such risks at all times.
RATING SENSITIVITY
Increases in the frequency of defaults could produce loss levels
higher than Fitch's base case, which could result in negative
rating actions on the notes. Fitch evaluated the sensitivity of
the ratings of Flexi ABS Trust 2014-1 to increased defaults over
the life of the transaction. Its analysis found that
collectively, the Class A1 notes' ratings remained stable under
all of Fitch's stress levels, while the class C notes were
impacted only after increases in defaults of at least 50%, and the
class A2 and B notes were impacted only after increases in
defaults of at least 75%. The class D and E notes were not
impacted under Fitch's sensitivity analysis.
Fitch's key rating drivers and rating sensitivity analysis is
discussed in the corresponding new issue report entitled "Flexi
ABS Trust 2014-1", published today. Included as an appendix to
the report are a description of the representations, warranties,
and enforcement mechanisms.
FLEXI ABS 2014-1: Moody's Assigns Ba2 Rating on AUD3.82MM Notes
---------------------------------------------------------------
Moody's Investors Service has assigned definitive ratings to notes
issued by Perpetual Corporate Trust Limited in its capacity as the
trustee of the Flexi ABS Trust 2014-1.
Issuer: Flexi ABS Trust 2014-1
AUD 89.25 million Class A1 Notes, Assigned P-1 (sf)
AUD 108.37 million Class A2 Notes, Assigned Aaa (sf)
AUD 22.95 million Class B Notes, Assigned Aa2 (sf)
AUD 10.20 million Class C Notes, Assigned A2 (sf)
AUD 7.65 million Class D Notes, Assigned Baa2 (sf)
AUD 3.82 million Class E Notes, Assigned Ba2 (sf)
The AUD 12.76 million Class F Notes are not rated by Moody's.
The ratings address the expected loss posed to investors by the
legal final maturity. The structure allows for the timely payment
of interest and the ultimate payment of the principal by the legal
final maturity.
The transaction is a cash securitisation of a portfolio of
Australian unsecured, retail, 'no interest ever' payment plans,
originated by Certegy Ezi-Pay Pty Ltd, a subsidiary of FlexiGroup
Ltd.
This is FlexiGroup's fourth term-securitisation of Certegy assets
and the fourth one rated by Moody's. The transaction features a
short term P-1 (sf) tranche, with a legal final maturity of 12
months from issuance. The tranche represents 35% of the total
issuance. Key factors supporting the P-1 (sf) rating include:
- Principal cashflows -- which will be allocated to the short-term
tranche in priority to other tranches until it is fully repaid --
will be sufficient to amortise the tranche within the 12-month
period. The amortisation is tested with no prepayment and assuming
an Aaa-commensurate level of defaults and delinquencies occurring
during the amortisation period.
- The corporate administration and insolvency regime in Australia
and the hot back-up servicing arrangements with Dun & Bradstreet
(Australia) Pty Limited mitigate the risk of a prolonged servicer
disruption. These two factors are relevant in the context of
assigning the P-1 (sf) rating because FlexiGroup and Certegy are
unrated.
Another notable feature of the transaction is the high proportion
of receivables relating to solar energy. While historical
performance data for solar energy receivables is limited to only a
few years, Moody's expect the performance of these receivables to
broadly track the performance of receivables relating to other
home-owner industries.
Home-owner industry obligors typically display lower default rates
than non-home-owner industry obligors in the Certegy portfolio.
Ratings Rationale
Flexi ABS Trust 2014-1 is the securitisation of retail, unsecured,
'no interest ever' receivables extended to obligors located in
Australia. Notable features of the transaction include the unique
nature of the collateral, the strong back-up servicing
arrangements, and short-weighted average lives of notes.
The receivables are unsecured payment plans, originated by Certegy
through various retailers at the point of sale. Rather than
relying on interest payable by the underlying obligors, the
product is instead reliant on a retailer fee component to meet
financing costs and for profit margin generation.
During the life of the receivables, the customer will make monthly
or fortnightly payments to Certegy, with the difference between
the balance payable by the obligor and the balance funded by
Certegy (equal to the merchant fee) representing implicit
interest. The loans are made on a full recourse, unsecured basis.
The expected default rate of 2.50% is broadly in line with
consumer auto-loan ABS transactions in the Australian market.
The minimum 22.5% subordination commensurate with an Aaa rating of
the senior notes is, on the other hand, materially higher that of
a typical auto-loan ABS transaction. This is attributed to the
unsecured nature of the receivables leading to zero recovery
values.
Certegy and FlexiGroup are unrated. Consequently, the transaction
structure includes back-up servicing arrangements provided by Dun
& Bradstreet (Australia) Pty Limited. Dun & Bradstreet carries out
servicing in parallel with Certegy, providing near 'hot' levels of
support and mitigating risks of a prolonged servicing disruption.
In order to fund the purchase price of the portfolio, the Trust
issued seven classes of notes. The notes will be repaid on a
sequential basis until the later of: (1) repayment of the Class A1
short-term tranche, and (2) increase in the subordination to Class
A notes to 30% from 22.5%.
The notes will also be repaid on a sequential basis if there are
any unreimbursed charge-offs or the pool amortises to below 10% of
the original balance. At all other times, the structure will
follow a pro-rata repayment profile (assuming pro-rata conditions
are still satisfied). This principal pay down structure is similar
to other structures in the Australian ABS market.
Methodology Underlying the Rating Action:
The principal methodology used in this rating was "Moody's
Approach to Rating Consumer Loan ABS Transactions" 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. The Australian job market is a
primary driver 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. The Australian job market is a
primary driver 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 5.0% (double Moody's assumption of
2.5%) then the model-indicated rating for the Class A2 Notes drops
three notches to Aa3. Similarly, the model-indicated rating for
the Class B Notes, Class C Notes and Class D Notes drop five, four
and three notches to Baa1, Baa3 and Ba2 respectively under this
scenario.
I.M.E. NOMINEES: In Administration; First Meeting Set July 2
------------------------------------------------------------
Domenic Calabretta of Mackay Goodwin was appointed as
administrator of I.M.E. Nominees Pty Ltd on June 23, 2014.
A first meeting of the creditors of the Company will be held at
Level 2, 99 - 101 Francis Street, in Northbridge, West Australia
on July 2, 2014, at 11:30 a.m.
R & A PAPILLO: High Court Appoints Clifton Hall as Liquidators
--------------------------------------------------------------
Timothy Clifton of Clifton Hall was appointed Official Liquidator
of R & A Papillo Earthmovers Pty Ltd on June 24, 2014, by Order of
the Supreme Court of South Australia.
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I N D I A
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AIR INDIA: No Decision Taken to Privatise Carrier, Govt. Says
-------------------------------------------------------------
The Times of India reports that no decision has been taken to
privatise Air India, with the government saying it was close to
finalising a short-term strategy to strengthen the burgeoning
civil aviation sector, including slashing taxes on jet fuel.
"By and large, there is a general feeling that the aviation sector
in India is no way near its potential. So we are working on that
and trying to achieve that potential . . . We are working out a
short-term strategy, setting some goals for ourselves within the
ministry," the report quotes Civil aviation minister Ashok
Gajapathi Raju as saying.
He was responding to a question whether the ministry had
formulated a 100-day plan for the aviation sector after he
recently met Prime Minister Narendra Modi, the report says.
Asked whether Air India's privatization was discussed at this
meeting, he said the national carrier formed "a substantive part
of our discussion. All issues relating to Air India was discussed.
No decision has been taken and I would not like to stir the
hornet's nest," the report relays.
According to the report, Mr. Raju said the entire gamut of issues
concerning aviation was discussed at the meeting on infrastructure
taken by the Prime Minister, "but we took no decision".
TOI notes that civil aviation secretary Ashok Lavasa said "A few
specific citizen-centric initiatives have been identified. We are
working on them and will make them known in a few days."
Asked about high sales tax levied by states on aviation turbine
fuel, Raju said the issue of state taxes was also discussed and
"we are trying to take various states into confidence on the
matter" so that some relief can be granted to the aviation sector,
TOI relays.
"The taxes vary from state to state. On the aviation side, they
want the taxes down. We have to talk to the states as we are in a
federal structure," the minister, as cited as TOI, said.
Air India Ltd -- http://www.airindia.com/-- is the flag carrier
airline of India owned by Air India Limited (AIL), a Government of
India enterprise. The airline operates a fleet of Airbus and
Boeing aircraft serving various domestic and international
airports. It is headquartered at the Indian Airlines House in
New Delhi.
As reported in the Troubled Company Reporter-Asia Pacific on
March 28, 2014, The Times of India said Air India Lt got a
breather in the form of INR1,000-crore equity infusion from the
government on March 26. According to the report, the airline's
unending financial stress had got worse as the Centre had so far
given INR6,000 crore instead of the promised INR8,500 crore for
the fiscal. As a result, AI had to bridge this gap by borrowing
money from banks at 11%-12%, which increased its debt servicing
burden, the report said. Before the infusion, the government had
injected INR12,200 crore into AI and there was a shortfall in
equity to the tune of INR3,574 crore -- despite the airline
meeting most of the milestone-linked equity targets -- leading to
a liquidity crunch, the report related. TOI said the airline's
aircraft and working capital debt was INR26,033 crore and
INR21,125 crore respectively on December 31, 2013. The airline is
expected to lose INR3,990 crore this fiscal.
Air India has posted continuous losses since 2007, according to
The Economic Times.
BHAGAWATI INDIA: CARE Assigns 'B' Rating to INR11.80cr Bank Loan
----------------------------------------------------------------
CARE assigns 'CARE B' ratings to the bank facilities of Bhagawati
India Motorizer Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 11.80 CARE B Assigned
Rating Rationale
The rating assigned to the bank facilities of Bhagawati India
Motorizer Private Limited (BIMPL) is primarily constrained on
account of the high stabilization risk pertaining to the ongoing
debt-funded capex, competition from other dealers in the region
and subdued performance of Mahindra & Mahindra (M&M) in the
passenger vehicle segment during FY14 (refers to the period
April 1 to March 31).
However, the rating derives strength from the wide experience of
the promoters and established presence of the group in various
business segments within Madhya Pradesh (MP).
The ability of BIMPL to successfully complete its debt-funded
capex within the envisaged time and cost and stabilize its
operations is the key rating sensitivity.
BIMPL was incorporated in October 2013 to take up the dealership
of M&M vehicles and servicing of auto parts in four districts of
MP, namely, Shahdol, Mandla, Dindori and Anuppur. BIMPL is a part
of the Gwalior-based Bhagawati group which has earned quite a good
hold in the state of MP in different business segments. The group
is engaged in dealership of M&M and Indo farm tractors through
Bhagawati Cools Private Limited (BCPL; rated CARE BB-/CARE A4) and
Bhagawati Development Services Private Limited (BDSPL: rated CARE
B+/CARE A4). The group also extends warehousing facilities through
Bhagawati Estate Warehouse, Kolaras (BEWK: rated CARE B+/CARE A4),
BCPL and BDSPL. BCPL and BDSPL are also engaged in trading of
agro-commodities like wheat, potato, soya, etc.
Currently, BIMPL is constructing a new showroom at Shahdol.
However, the company plans to open retail counters in Dindori and
Anuppur and start construction of a new showroom at Mandla soon.
CORAL ASSOCIATES: ICRA Reaffirms 'B' Rating on INR28.88cr Loans
---------------------------------------------------------------
ICRA has reaffirmed the long-term rating of [ICRA]B for the
INR10.00 crore fund-based and INR18.88 crore non-fund based bank
facilities of Coral Associates.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term fund-based 10.00 [ICRA]B; Reaffirmed
bank facilities
Long-term non fund- 18.88 [ICRA]B; Reaffirmed
based bank facilities
The rating reaffirmation continues to favorably factor in the long
track record of the firm's promoters with significant experience
as royalty contractors. The rating, however, continues to be
constrained by the high operating leverage of the firm's business
given the fixed nature of royalty payments required to be made to
Directorate of Mines and Geology, Government of Rajasthan. While
the firm achieved adequate volumes during the period April to
December 2013 to recover the royalty payments, the ability of the
firm to maintain volumes for the remaining duration of the
contract period will continue to remain crucial to meet royalty
payments and operational expenses. Further, the revenue visibility
for the firm remains uncertain given the short duration of the
contract in hand and the unpredictability in securing new
contracts. The risk is higher given the fragmented nature of the
royalty contracting business, low entry barriers and high
competition in the sector, which shall continue to pose pressure
on the firm's profitability margins. While assigning the rating,
ICRA has also taken note of CA's constitution as a partnership
firm, which exposes it to capital withdrawal risks.
Going forward, the ability of the firm to maintain adequate
monthly collections to meet the royalty payment obligations would
remain key to maintain adequate liquidity. This apart from
securing new contracts to attain revenue visibility going forward,
would be the key rating sensitivities.
Promoted by Mr. Mahendra Kumar Tak, his family members and
business associates in 2013, Coral Associates is a Udaipur
(Rajasthan) based partnership firm. The firm undertakes contracts
for royalty collection for marble mining in Rajasthan. The
promoters have a track record, through other group entities, of
undertaking similar contracts of royalty collection, toll
collection, etc for government departments.
The firm reported an Operating Income (OI) of INR101.26 crore and
Profit before Tax (PBT) of INR1.18 crore in during FY14 up to 15th
December 2013 (provisional estimates).
DAMODAR TIMBER: CRISIL Reaffirms 'B' Rating on INR5MM Loan
----------------------------------------------------------
CRISIL's ratings on the long-term bank facilities of Damodar
Timber Depot continues to reflect its below-average financial risk
profile marked by its small net worth, high total outside
liabilities to tangible net worth ratio, and below-average debt
protection metrics. The ratings also factor in the firm's large
working capital requirements, its exposure to intense competition
in timber trading and cashew trading business resulting in low
profitability margins, and the susceptibility of its profitability
margins to fluctuations in foreign exchange rates. These rating
weaknesses are partially offset by the extensive industry
experience of DTD's partners.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bill Discounting 1.5 CRISIL A4 (Reaffirmed)
Letter of Credit 180 CRISIL A4 (Reaffirmed)
Overdraft Facility 5 CRISIL B/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that DTD will continue to benefit over the medium
term from its partners' extensive industry experience and its
established relations with customers. The outlook may be revised
to 'Positive' if there is a sustained improvement in the firm's
working capital cycle, or there is a substantial improvement in
its capital structure on the back of sizeable capital infusion by
its partners. Conversely, the outlook may be revised to 'Negative'
in case of a steep decline in DTD's profitability margins, or
significant deterioration in its capital structure caused most
likely because of a stretch in its working capital cycle.
Established in 1977 by Mr. Devshi Patel, DTD trades in and saws
timber. The firm mainly imports teakwood and hardwood from
Myanmar, Latin and Africa. The firm also trades in cashews and
derives around 45 per cent of its revenues from the same.
DHANTURI GROUP: CRISIL Ups Rating on INR200MM Loans to 'B+'
-----------------------------------------------------------
CRISIL has upgraded its ratings on the long-term bank loan
facilities of the Dhanturi Group of Hotels Pvt Ltd (DGHPL; part of
the Dhanturi group) to 'CRISIL B+/Stable' from 'CRISIL B-/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Long Term Loan 132 CRISIL B+/Stable (Upgraded
from 'CRISIL B-/Stable')
Proposed Long Term 68 CRISIL B+/Stable (Upgraded
Bank Loan Facility from 'CRISIL B-/Stable')
The rating upgrade reflects the improvement in the Dhanturi
group's business risk profile driven by a substantial and
sustained increase in its scale of operations, while maintaining
its profitability margins. The upgrade also factors in the
increase in the group's net-worth, which enhances its financial
flexibility, and the subsequent improvement in its capital
structure. CRISIL believes that the Dhanturi group will sustain
the improvement in its financial risk profile over the medium term
supported by consistent growth in its net-worth and the absence of
any large debt-funded capital expenditure (capex) plan.
The Dhanturi group's revenues registered a compound annual growth
rate of around 50 per cent from 2011-12 (refers to financial year,
April 1 to March 31) to 2013-14; the operating profit margins of
the group remained stable at around 20 per cent to 22 per cent
over this period. The group's revenue growth has been driven by
the commencement of four new hotels over the last two years ended
2013-14, and a sustained increase in the group's occupancy levels.
CRISIL believes that the group would register an annual revenue
growth of around 10 per cent over the medium term with the room
demand in Hyderabad expected to improve moderately as the
resolution of the Telengana row is likely to be ensure some
political stability.
The Dhanturi froup's net worth is estimated to have increased to
around INR200 million as on March 31, 2014, from INR129 million as
on March 31, 2012, on the back of moderate accretion to reserves.
Subsequently, the group's gearing is estimated to have declined to
1.4 time as on March 31, 2014 from 2.0 times as on March 31, 2012.
The gearing of the group is expected to further decline to 1.2
times as on March 31, 2015 supported by consistent growth in its
net-worth and absence of any large debt-funded capex plan.
CRISIL's rating on the long-term bank facilities of Dhanturi group
continues to reflect the high degree of geographic concentration
in the group's revenue profile, and its exposure to intense
competition and cyclicality in the hotel industry. The ratings of
the group are also constrained on account of its average financial
risk profile marked by its modest net-worth, moderate gearing, and
average debt protection metrics. These rating weaknesses are
partially offset by the extensive experience of the Dhanturi
group's promoters in the hotel industry.
For arriving at its ratings, CRISIL has combined the business and
financial risk profiles of DGHPL and Swagath Marriage and Function
Hall (SMFH). This is because both these entities, together
referred to as the Dhanturi group, have common promoters, are in
the same line of business, and have significant operational
linkages and fungible cashflows.
Outlook: Stable
CRISIL believes that the Dhanturi group will continue to benefit
over the medium term from its established regional presence and
its promoters' extensive experience in the hotel industry. The
outlook may be revised to 'Positive' if there is a substantial and
sustained improvement in the group's profitability margins, while
registering a moderate revenue growth, or there is substantial
improvement in its capital structure on the back of sizeable
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 significant deterioration in its capital
structure caused most likely because of a large debt-funded capex
programme.
The Dhanturi group operates a chain of hotels and restaurants in
Hyderabad and Secunderabad. The group is promoted and managed by
Mr. D Ravinder and Mr. D Hari Shankar. DGHPL operates six hotels
and two restaurants, and SMFH operates five hotels.
EKTA SHAKTI: CRISIL Reaffirms 'B' Rating on INR60MM Loans
---------------------------------------------------------
CRISIL's rating on the bank facilities of Ekta Shakti Foundation
continues to reflect the firm's weak financial risk profile marked
by weak capital structure and debt protection metrics, small scale
of operations with revenue dependent on the number of students in
the school, vulnerability to government policies, and large
working capital requirements. These rating weaknesses are
partially offset by the benefits that ESF derives from its
promoters' extensive industry experience and its moderate revenue
visibility over the medium term.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 59 CRISIL B/Stable (Reaffirmed)
Term Loan 1 CRISIL B/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that ESF will continue to benefit over the medium
term from its promoters' extensive industry experience and its
moderate revenue visibility. CRISIL, however, also believes that
the firm's financial risk profile will remain constrained by large
working capital requirements and weak capital structure. The
outlook may be revised to 'Positive' if ESF significantly
increases its scale of operations and profitability, or improves
its capital structure. Conversely, the outlook may be revised to
'Negative' if ESF's profitability and working capital management
weaken, leading to pressure on its already weak liquidity.
ESF was set up in 2003 by Mr. Anil Aggarwal. The trust provides
mid-day meals to government-run schools and supplies to parts of
New Delhi, Bihar and Maharashtra. It also runs a school for
children deprived of hearing and speech abilities and vocational
courses for women.
FAHIM TANNING: CRISIL Cuts Rating on INR50MM Loans to 'D'
---------------------------------------------------------
CRISIL has downgraded its ratings on the bank facilities of Fahim
Tanning Company to 'CRISIL D/CRISIL D' from 'CRISIL
B/Stable/CRISIL A4'. The rating downgrade reflects FTC's delays in
servicing its term loan obligations owing to its weak liquidity.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 30 CRISIL D (Downgraded from
'CRISIL B/Stable')
Letter of Credit 12.5 CRISIL D (Downgraded from
'CRISIL A4')
Term Loan 7.5 CRISIL D (Downgraded from
'CRISIL B/Stable')
The ratings also reflect FTC's small scale of, and working-
capital-intensive, operations and the firm's below-average
financial risk profile, constrained by its small net worth. These
rating weaknesses are partially offset by the benefits that FTC
derives from the extensive experience of its proprietor in the
leather industry.
Set up in 1982, FTC is engaged in the processing of raw hides into
semi-finished and finished leather.
GOVARDHAN INDUSTRIES: CARE Cuts Rating on INR77.26cr Loan to 'D'
----------------------------------------------------------------
CARE revises ratings assigned to bank facilities of Govardhan
Industries Pvt Ltd.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 77.26 CARE D Revised from
CARE B+
Rating Rationale
The revision in rating of Bank facilities of Govardhan Industries
Pvt Ltd takes into account the on-going delays in debt servicing
obligations.
Govardhan Industries Pvt. Ltd was incorporated on March 2, 2010
has implemented a project for manufacturing of Electric Resistance
Welded (ERW) pipes and Galvanized Iron (GI) pipes with an
installed capacity of 90,000 MTPA for MS/ERW pipes and 18,000 MTPA
respectively. The company's manufacturing facilities are situated
at Hapur, Uttar Pradesh. GIPL is promoted by the Gupta family
which has also promoted other steel mills viz. Shri Sidhdata Ispat
Pvt Ltd, Shri Sidhdata Steel Tubes and Shri Sudershan Tubes. GIPL
is promoted by Mr. Suresh Kumar Gupta, Mr. Rajesh Kumar Gupta and
Mr. Pradeep Gupta.
Key updates
The work on the company's project commenced in June 2012 and one
of the manufacturing lines was completed in April 2013. However,
the entire project was completed in April 2014, as against the
scheduled commissioning date of April 2013. The delay in project
implementation and low capacity utilizations, due to subdued
demand scenario, has adversely impacted the company's liquidity
profile resulting in ongoing delays in debt servicing.
HINDOK EXPORTS: CRISIL Assigns 'B+' Rating to INR100MM Loans
------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-term
bank facilities of Hindok Exports Ltd (HEL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 10 CRISIL B+/Stable
Cash Credit 47.5 CRISIL B+/Stable
Proposed Long Term
Bank Loan Facility 42.5 CRISIL B+/Stable -
The rating reflects HEL's weak financial risk profile, marked by a
high total outside liabilities to tangible net worth (TOLTNW)
ratio and modest debt protection metrics, and modest scale of
operations in a highly fragmented textile industry. These rating
weaknesses are partially offset by the extensive experience of the
company's promoters in the textile industry.
Outlook: Stable
CRISIL believes that HEL will continue to benefit over the medium
term from its promoters' extensive experience in the textile
industry. The outlook may be revised to 'Positive' if the company
reports significantly higher-than-expected cash accruals or
considerably improves its working capital management or capital
structure. Conversely, the outlook may be revised to 'Negative' if
HEL reports substantially lower-than-anticipated cash accruals or
significantly higher-than-expected working capital requirements,
or if it undertakes a large debt-funded capital expenditure
programme, leading to deterioration in its liquidity.
HEL was incorporated in 2002, promoted by Mr Aditya Kapoor. The
company manufactures yarn and trades in yarn, knitted cloth and
steel machinery. It is based in Ludhiana (Punjab).
HEL reported a profit after tax (PAT) of INR0.60 million on net
sales of INR220 million for 2012-13 (refers to financial year,
April 1 to March 31) against a PAT of INR1.6 million on net sales
of INR183.8 million for 2011-12.
JAYANT K FURNISHERS: CRISIL Reaffirms B+ Rating on INR10MM Loan
---------------------------------------------------------------
CRISIL's rating on the bank facilities of Jayant K Furnishers
continues to reflect JKF's modest scale of operations in the
intensely competitive interior decoration market, and risks
associated with its order-driven operations. These rating
weaknesses are partially offset by the promoters' extensive
industry experience.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 120 CRISIL A4 (Reaffirmed)
Cash Credit 10 CRISIL B+/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that JKF will benefit over the medium term from
the promoters' extensive experience in the interior decoration
industry. The outlook may be revised to 'Positive' if the firm
records a significant and sustainable improvement in its scale of
operations and profitability resulting in sizeable cash accruals.
Conversely, the outlook may be revised to 'Negative' if JKF's
financial risk profile weakens with a steep decline in its revenue
and profitability or an increase in its operating cycle or
substantial debt-funded capital expansion.
Update
JKF registered operating revenue of INR476 million in 2013-14
(refers to financial year, April 1 to March 31) as against
INR145.2 million in 2012-13, because of a large order from L&T
Ltd. The company's operating margin was estimated at 5.8 per cent
in 2013-14, vis-a-vis 17.25 per cent in 2012-13, supported by a
high operating margin yielding order from one customer. The firm
has orders of INR240 million to be executed over the next one
year.
JKF's operations remain working-capital-intensive, with gross
current assets (GCAs) of 254 days as on March 31, 2014, mainly
driven by large inventory holding of 81 days as on March 31, 2014.
To avail of discount, the firm procures material in bulk, based on
customer specifications. In contrast, the company receives
payments within 60 to 70 days. JKF's working capital requirements
are supported by credit from its suppliers, with creditors of 85
days as on March 31, 2014.
JKF has an above-average financial risk profile, with a gearing of
around 0.8 times as on March 31, 2014. Furthermore, the firm has
comfortable debt protection metrics, as indicated by its net cash
accruals to total debt (NCATD) and interest coverage ratio of 0.12
times and 3.00 times, respectively in 2013-14. The firm's modest
scale of operations, moderate profitability and capital
withdrawals has restricted any significant addition to reserves.
JKF has cash accruals of INR11.9 million vis-a-vis low debt
obligations of INR4 million in 2013-14.
Established in 1981 by Mr. Khimji Ramji Soni and his family
members, JKF is a partnership firm providing interior solutions
and related fit-out solutions. The firm offers a wide range of
services including interior contracts, civil and electrical works,
plumbing and sanitation, painting, project management and other
related solutions.
KAMA METAL: CRISIL Reaffirms 'B+' Rating on INR110MM Loans
----------------------------------------------------------
CRISIL's ratings on the bank loan facilities of Kama Metal and
Alloys Pvt Ltd (KMPL) continue to reflect KMPL's small scale of
operations, susceptibility to volatility in raw material prices,
and large working capital requirements. These rating weaknesses
are partially offset by the extensive experience of the company's
promoters in the steel industry, the partly integrated nature of
its operations, and its moderate financial risk profile, marked by
comfortable gearing and above-average debt protection metrics.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 62.5 CRISIL B+/Stable (Reaffirmed)
Term Loan 47.5 CRISIL B+/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that KMPL will continue to benefit over the medium
term from the extensive industry experience of its promoters. The
outlook may be revised to 'Positive' if the company generates
significantly better-than-expected net cash accruals driven by a
scale up in production due to its enhanced capacity, while it
manages its working capital efficiently. Conversely, the outlook
may be revised to 'Negative' if KMPL faces pressure on its
liquidity, resulting from a decline in profitability or
substantial incremental working capital requirements.
Update
KMPL is estimated to report an operating income of INR563.7
million for 2013-14 (refers to financial year, April 1 to
March 31), mainly from its pipe and sheet business. The company is
projecting a healthy revenue growth in 2014-15 supported by
capital expenditure in 2013-14, which increased its capacity by 50
per cent. KMPL has maintained its operating profitability margin
at 5.5 to 7.0 per cent, while its profit after tax (PAT) margin
has also remained healthy at 1.7 to 3.0 per cent, over the past
five years; this was primarily due to fiscal benefits and the
semi-integrated nature of its operations. CRISIL believes that the
company will maintain its operating profitability margin at 6 to 7
per cent over the medium term as it will continue to enjoy the
fiscal benefits for the next four years.
KMPL has an above-average financial risk profile, marked by
comfortable gearing of around 0.90 times as on March 31, 2014,
above-average debt protection metrics, and a moderate net worth.
CRISIL expects the company's gearing to remain moderate at 0.80 to
1.00 times over the medium term due to no major debt-funded
capital expenditure plans.
KMPL's liquidity has improved in 2013-14 following the infusion of
unsecured loans by promoters to support its working capital. This
has brought down its average bank limit utilisation to 70 per cent
from almost 100 per cent earlier. Its liquidity is likely to
improve with the expected increase in its cash accruals vis-a-vis
its fixed debt obligations in 2014-15. The expected improvement in
cash accruals will be primarily driven by KMPL's ramp up of
production following its increased capacity.
KMPL's PAT is estimated at INR10.1 million on net sales of
INR563.7 million for 2013-14; it had reported a PAT of INR9.0
million on net sales of INR511.7 million for 2012-13.
KMPL, incorporated in 2008, operates an ingot manufacturing unit
as well as a rolling division (key products include mild steel
ingots, flats, and pipes). The company has an ingot manufacturing
capacity of 37,000 tonnes per annum (tpa) and a rolling capacity
of 30,000 tpa.
KESAR IMPEX: CRISIL Reaffirms 'D' Rating on INR150MM Loans
----------------------------------------------------------
CRISIL's ratings on the bank facilities of Kesar Impex continue to
reflect instances of delay by KI in servicing its debt; the delays
have been caused by the firm's weak liquidity, driven by its large
working capital requirements.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 2.5 CRISIL D (Reaffirmed)
Cash Credit 90.0 CRISIL D (Reaffirmed)
Proposed Long Term
Bank Loan Facility 14.4 CRISIL D (Reaffirmed)
Rupee Term Loan 43.1 CRISIL D (Reaffirmed)
KI also has a weak financial risk profile, marked by a high
gearing and average debt protection metrics, and a modest scale of
operations. However, the firm benefits from the extensive
experience of its promoters in the plastic packaging industry.
Update
KI's sales in 2013-14 (refers to financial year, April 1 to
March 31) increased to INR408 million from INR255 million in the
previous year. This was primarily due to increase in quantity
sold, as the minimum limit was increased to 40 micron plastics
from 20 micron plastics, per sheet. The firm's operating
profitability margin, however, reduced to 8.7 per cent in 2013-14
from 10.9 per cent in 2012-13 due to its inability to pass on
increases in raw material costs.
KI's gross current assets remained high at 195 days, due to high
inventory and debtors of 98 and 92 days, respectively, as on
March 31, 2014, leading to stretched liquidity. The firm's
financial risk profile remains constrained, marked by high gearing
of around 5 times as on March 31, 2014, because of debt contracted
for increasing its capacity to 6000 tonnes per annum (tpa) from
4400 tpa.
KI reported, on a provisional basis, a net profit of INR8.4
million on net sales of INR408.6 million for 2013-14; the firm had
reported a net profit of INR10.4 million on net sales of INR255.1
million for 2012-13.
KI was established in 2002 in Silvassa (Union Territory of Dadra
and Nagar Haveli) by Mr. Kishor Bhanushali and his mother, Mrs.
Shantaben Bhanushali. The firm manufactures high-density
polyethylene bags, low-density polyethylene bags, linear low-
density polyethylene bags, and carry bags of different varieties.
KUN COMMERCIAL: CRISIL Cuts Rating on INR300MM Loans to 'D'
-----------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facilities
of Kun Commercial Vehicles Pvt Ltd to 'CRISIL D' from 'CRISIL
B+/Stable'. The rating downgrade reflects KCVPL's delays in
servicing its term loan obligations owing to its weak liquidity.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Inventory Funding 50 CRISIL D (Downgraded from
Facility 'CRISIL B+/Stable')
Term Loan 220 CRISIL D (Downgraded from
'CRISIL B+/Stable')
Proposed Long Term 30 CRISIL D (Downgraded from
Bank Loan Facility 'CRISIL B+/Stable')
The rating also reflects KCVPL's early stage of operations,
geographical concentration in its revenue profile, and the
susceptibility of its operations to intense competition in the
automotive dealership industry. These rating weaknesses are
partially offset by the extensive experience of KCVPL's promoters
in the automotive industry.
Set up in 2011, KCVPL is an authorised dealer of commercial
vehicles of Daimler India Commercial Vehicles Pvt Ltd (rated
'CRISIL AA/Stable/CRISIL A1+').
MEADOWZ MEDIA: CRISIL Cuts Rating on INR97.5MM Loans to 'D'
-----------------------------------------------------------
CRISIL has downgraded its ratings on the bank facilities of
Meadowz Media Brandcom Pvt Ltd to 'CRISIL D/CRISIL D' from 'CRISIL
B/Stable/CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 22.5 CRISIL D (Downgraded from
'CRISIL A4')
Cash Credit 25 CRISIL D (Downgraded from
'CRISIL B/Stable')
Term Loan 50 CRISIL D (Downgraded from
'CRISIL B/Stable')
The rating downgrade reflects delay by MMBL in servicing its term
loans; the delays have been caused by the company's weak financial
risk profile and liquidity.
MMBPL has a weak financial risk profile, marked by low net worth,
and high gearing and below-average debt protection metrics.
However, MMBL benefits from the extensive experience of its
promoters in out-of-home (OOH) advertising solutions.
MMBL, promoted by Mr. Bhavesh Bhinde, his mother, Mrs. Jayaben
Bhinde and his wife, Mrs. Jigna Bhinde, was incorporated in 2010-
11. It began operations in 2012-13. MMBL provides OOH advertising
solutions.
NUZEN HERBAL: ICRA Reaffirms 'B' Rating on INR38cr Bank Loan
------------------------------------------------------------
ICRA has reaffirmed the long-term rating of [ICRA]B assigned to
the INR38.00 crore fund based facilities of Nuzen Herbal Private
Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based limits 38.00 [ICRA]B reaffirmed
While reaffirming the rating ICRA has drawn comfort from the track
record of promoter group in providing funding support to NHPL by
infusing unsecured loans and equity. The rating is also supported
by relatively better financial profile of NHPL's group company --
Shreya Broadcasting Private Limited (SBPL, rated at [ICRA]BB/A4+),
good relationship enjoyed with media and advertising agencies
through SBPL's presence in the broadcasting industry and the
cultivation of required herbs at the promoters' farms resulting in
easy availability of raw material at competitive prices. The
rating is however, constrained by 58% decline in operating income
of NHPL in FY14 on the back of earlier 51%decline in FY13. ICRA
had noted that though NHPL registered healthy growth in revenues
during FY12, the primary sales were not backed by similarly level
of tertiary sales, resulting in piling of inventory at the
distributors' level. As a result, NHPL announced a discount scheme
during FY13 to clear accumulated stock with the distributors
resulting into lower revenues for the period. Further, NHPL
decided to call back the stock lying with the distributors for
improved product launch in FY14 resulting into further decline in
sales during the period. However, NHPL has written back credit
balances of INR22.34 crore during FY14 backed by sales linked
agreements with the media and advertising agencies. The rating is
further constrained by stretched cash flows and weak coverage
indicators of NHPL as reflected by interest coverage of 1.07 times
and NCA/Total debt of 9% as on March 31, 2014 on account of debt
funded capex of about INR28 crore undertaken by the company during
FY12-FY13 towards the construction of administrative building.
Nuzen Herbal Private Limited (NHPL) was incorporated in December
2009 by Mr.B.R.Naidu. The company was incorporated to manufacture
and market herbal products. It launched its first product called
Nuzen herbal gold oil in the personal care segment in the year
2010. The company later during November -2010 launched another
line of hair care products which Nuzen Herbal Shampoo. In April-
2013 with the launch of Orthozen, a herbal pain relief syrup, NHPL
entered into the health care segment. The company has a
manufacturing facility at Bollaram in Hyderabad.
Recent Results
In FY2014, NHPL reported an operating income of INR17.84 crore
with a net profit of INR0.86 crore as against an operating income
of INR42.79 crore with net losses of INR0.44 crore in FY2013.
ORITO POLYFAB: CRISIL Assigns 'B' Rating to INR170MM Loans
----------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable' rating to the bank
facilities of Orito Polyfab Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 3.5 CRISIL B/Stable
Term Loan 166.5 CRISIL B/Stable
The rating reflects OPPL's risks attached to timely completion of
the project, small scale of operations in the highly competitive
industry, weak financial risk profile marked by small net worth,
and susceptibility of operating profitability to fluctuations in
raw material prices. These rating weaknesses are partially offset
by its established relationship with its customers and suppliers,
coupled with moderate working capital management.
Outlook: Stable
CRISIL believes OPPL will continue to benefit from its promoters'
established relationship in the industry. The outlook may be
revised to 'Positive' if the company completes its project in a
timely manner and improves its scale of operations substantially
while maintaining its operating profitability, leading to better
financial risk profile. Conversely, the outlook may be revised to
'Negative' if there is deterioration in its financial risk profile
either on account of lower than expected profitability and
revenues, coupled with larger than expected working capital
requirements or a large debt-funded capital expenditure.
Established in 2013, OPPL is promoted by the Patel family. It
manufactures cotton yarn ranging from 28's counts to 40's counts
with 12,000 spindles. The plant is located in Sabarkanth
(Gujarat). Operations are expected to start from August 2014.
PRIMORDIAL SYSTEMS: CRISIL Reaffirms B- Rating on INR150MM Loans
----------------------------------------------------------------
CRISIL's rating on the long-term bank facilities of Primordial
Systems Pvt Ltd continues to reflect PSPL's weak financial risk
profile, marked by high gearing, weak debt protection metrics, and
a small net worth. The rating also factors in the company's
limited track record and modest scale of operations. These rating
weaknesses are partially offset by PSPL's academic partnerships
with institutions such as India Tourism Development Corporation
Ltd (ITDC), Mewar University and Indian Medical Association (IMA),
and the benefits expected from the healthy growth prospects for
the education sector.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Funded Interest 13.6 CRISIL B-/Stable (Reaffirmed)
Term Loan
Overdraft Facility 55.0 CRISIL B-/Stable (Reaffirmed)
Working Capital
Term Loan 15.0 CRISIL B-/Stable (Reaffirmed)
Term Loan 61.0 CRISIL B-/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility 5.4 CRISIL B-/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that PSPL will continue to benefit from its
academic partnerships with institutions such as ITDC and IMA and
the healthy demand prospects of the education sector, over the
medium term. However, its financial risk profile is expected to
remain weak over this period, marked by high gearing and weak debt
protection metrics. The outlook may be revised to 'Positive' in
case of a significant increase in the intake of students, leading
to improvement in the company's cash accruals and hence in its
liquidity, capital structure, and debt protection metrics.
Conversely, the outlook may be revised to 'Negative' in case of
low occupancy levels, resulting in further deterioration in PSPL's
liquidity or capital structure.
Update
PSPL's revenue registered a 62 per cent year-on-year growth to
INR99.7 million in 2013-14 (refers to financial year, April 1 to
March 31); the growth was mainly driven by increased student
intake during the year. The company's operating margin increased
by around 80 basis points to 33.8 per cent in 2013-14 as the
increased intake of students led to better coverage of fixed
overheads.
PSPL's net worth remained low at around INR26 million as on
March 31, 2014, thereby limiting its financial flexibility to meet
any exigency. The company has sizeable debt because of its term
loan for capital expenditure and reliance on bank borrowing for
meeting its daily expenses; this, coupled with a small net worth,
has resulted in high gearing of around 5.9 times as on March 31,
2014. The large debt has also resulted in weak debt protection
metrics, with interest coverage and net cash accruals to total
debt ratios of 1.7 times and 0.09 times, respectively, for 2013-
14.
For 2013-14, PSPL reported a profit after tax (PAT) of INR8.4
million on net revenue of INR99.7 million, against a PAT INR0.4
million on net revenue of INR62.1 million for 2012-13.
Incorporated in 1999, PSPL runs the Indian Institute of Learning
and Advanced Development (INLEAD) in Gurgaon; the institute offers
postgraduate programmes. INLEAD started its programmes in February
2010 and has a capacity of 1200 students with current occupancy of
around 380 students.
QUERESHI INT'L: CRISIL Reaffirms 'B' Rating on INR280MM Loans
-------------------------------------------------------------
CRISIL's rating on the bank facilities of Quereshi International
Pvt Ltd continues to reflect QIPL's below-average financial risk
profile marked by its small net worth, high gearing, and average
debt protection metrics. The ratings of the company are also
constrained on account of its exposure to regulatory changes in
processed meat industry, and the company's large working capital
requirements. These rating weaknesses are partially offset by the
extensive experience of QIPL's promoters in the processed meat
industry.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 50 CRISIL B/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility 230 CRISIL B/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that QIPL will continue to benefit over the medium
term from its promoters' extensive experience. The outlook may be
revised to 'Positive' if there is a sustained improvement in the
company's working capital management, or there is a substantial
improvement in its capital structure on the back of sizeable
equity infusion from its promoters. Conversely, the outlook may be
revised to 'Negative' in case of a steep decline in SKS's
profitability margins, or significant deterioration in its capital
structure caused most likely because of large debt-funded capital
expenditure programme or a stretch in its working capital cycle.
QIPL was promoted in 1974 as a proprietorship firm by Mr. Mohammed
Yaqoob Quereshi, and reconstituted as a private limited company in
2012. The company exports frozen buffalo meat and mutton.
R KUKREJA: CARE Assigns 'B' Rating to INR13.88cr Loan
-----------------------------------------------------
CARE assigns 'CARE B' rating to bank facilities of R Kukreja
Infrastructure Pvt Ltd.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 13.88 CARE B Assigned
Rating Rationale
The rating assigned to the bank facilities of R Kukreja
Infrastructure Pvt Ltd is primarily constrained by its short track
record, small scale of operations with limited geographical reach
in a cyclical and seasonal hotel industry, negative net
profitability margin and leveraged capital structure. The rating
is further underpinned by the project implementation risk
associated with the ongoing project along with low booking status
of the same and intense competition in the real estate sector.
The rating, however, derives strength from the experience of the
promoter, favourable location of the real estate project
and the requisite approvals obtained for the execution of the
projects.
The ability of the company to increase its scale of operation and
maintain the capital structure effectively with successful
completion of the project as per the schedule and timely sale of
units at the envisaged price is the key rating sensitivity.
R. Kukreja Infrastructure Pvt Ltd, incorporated in May 2010, was
promoted by Mr Rajesh Kukreja and his wife Mrs Rakhi Kukreja. It
is engaged in running the hotel business with a hotel named 'Hotel
Lalbaag Inn' situated at Vijay Path, Telibandha Four Lane, Raipur
492006, Chhattisgarh spread over 30,000 sq. ft. and comprises of
24 guest rooms, a banquet hall and a conference room. The said
hotel provides boarding, lodging, restaurant, bar, banquet and
conference hall services in Telibandha, Raipur.
Besides hotel business, RKIPL is currently executing a residential
housing project with NFC Leasing & Fin. Co. Pvt. Ltd.
(NFC) named as 'Metro Heights', near hotel Lal Bagh, Vijay Path,
Telibandha Four Lane, Raipur, Chhattisgarh. NFC has
provided land for the said project and will share 40% of the total
sale value of the project, while the remaining will be
kept by RKIPL. The project is being set up on a land measuring
93,860 sq. ft. and would consist of two G+4 residential
buildings comprising 48 flats. The total cost of the project has
been estimated to be INR26.3 crore and is proposed to be
funded out of the promoter's contribution (INR12.4 crore), advance
booking money (INR2.4 crore) and debt (INR11.5
crore). The company's financial closure for the debt has been
achieved. About 37% of the construction work has been
completed till Jan. 5, 2014 and the balance is expected to be
completed on schedule by January 2016.
During FY13 (refers to the period April 1 to March 31), RKIPL
reported a total operating income of INR1.44 crore against
INR1.47 crore in FY12 and a net loss of INR0.04 crore against a
net loss of INR0.06 crore in FY12.
RAGHUVANSHI INDUSTRIES: CRISIL Keeps B+ Rating on INR200M Loan
--------------------------------------------------------------
CRISIL's rating on the bank facilities of Raghuvanshi Industries
Pvt Ltd (RIPL) continues to reflect RIPL's weak financial risk
profile, marked by high gearing and weak debt protection metrics.
The rating also reflects the vulnerability of RIPL's profitability
and revenue to volatility in cotton prices and government
policies. These rating weaknesses are partially offset by the
extensive experience of RIPL's promoters in the cotton industry.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 200 CRISIL B+/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that RIPL will continue to benefit over the medium
term from its promoters' extensive industry experience. The
outlook may be revised to 'Positive' if the company improves its
capital structure either by equity infusion or higher-than-
expected cash accruals generated in business and its profitability
increases significantly. Conversely, the outlook may be revised to
'Negative' if its financial risk profile deteriorates on account
of further decline in revenue and profitability or higher-than-
expected, debt-funded capital expenditure programme or its
liquidity weakens significantly on account of stretch in working
capital requirements.
Update
RIPL registered, on a provisional basis, net sales of INR2.3
billion in 2013-14 (refers to financial year, April 1 to
March 31) as compared to INR2.07 billion in 2012-13; witnessing
year-on-year growth of 11 per cent. CRISIL believes that RIPL will
maintain modest sales growth over medium term backed by increased
trading sales. Its operating margin remained low at 0.9 per cent
in 2013-14 (same as year ago) and is expected to remain at similar
level over medium term. RIPL's gross current assets (GCAs)
increased and remained around 122 days as on March 31, 2014, as
compared with 39 days a year ago on account of higher trading
sales towards the year end. This led to a higher level of debtors
towards the year end and RIPL building up inventory considering
the seasonal nature of the raw material used. CRISIL believes that
with moderation of debtors over the medium term, the GCAs will
remain around 50 days over the medium term. RIPL funded its
incremental working capital requirements through a pledge loan of
INR200 million due to which gearing increased to 6.92 times from
2.08 times a year ago. CRISIL believes that with moderation of
debtors and inventory level, gearing will remain around 3 times
over the medium term. RIPL has weak debt protection metrics with
interest coverage ratio of 1.4 times and net cash accruals to
total debt (NCATD) ratio of 0.01 times in 2013-14 and is expected
to remain weak over the medium term. RIPL has weak liquidity,
marked by high average bank limit utilisation of 79 per cent with
occasional instance of ad hoc limits availed. However, RIPL's
liquidity finds support from no major term debt availed, unsecured
loan of INR22.7 million infused in the company that is interest
free and is expected to remain in business, and no major
incremental working capital requirements over the medium term.
RIPL reported, on a provisional basis, profit after tax (PAT) of
INR3.4 million on net sales of INR2.3 billion in 2013-14 vis-a-vis
PAT of INR2.4 million on net sales of INR2.1 billion for 2012-13.
RIPL (formerly known as Raghuvanshi Industries) was set up as a
partnership firm in 1998 by Rajkot (Gujarat)-based Mr. Dhirajlal V
Shelani and his son, Mr. Dineshkumar D Shelani. However, post
January 2014, the company was converted into private limited. The
company is engaged in ginning and pressing of cotton into bales
and extraction of cotton seed.
RAJ COKE: ICRA Suspends 'D' Rating on INR6.93cr Bank Loan
---------------------------------------------------------
ICRA has suspended the [ICRA]D rating assigned to the INR6.93
crore bank lines of Raj Coke Industries. The suspension follows
ICRA's inability to carry out a rating surveillance in the absence
of the requisite information from the entity
RASIK VATIKA: CRISIL Upgrades Rating on INR140MM Loan to 'B+'
-------------------------------------------------------------
CRISIL has upgraded its rating on the long-term bank loan facility
of Rasik Vatika Silk Mills Pvt Ltd to 'CRISIL B+/Stable' from
'CRISIL B/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 140 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
The rating upgrade reflects CRISIL's belief that RVSPL's financial
risk profile will continue to improve over the medium term backed
by sustained increase in accruals generated in the business. The
company's liquidity has improved backed by increase in cash credit
limits availed, accruals generated in business of INR5.6 million
against no term debt coupled with infusion of unsecured loan of
INR5.5 million in 2013-14 (refers to financial year, April 1 to
March 31). CRISIL believes that RVSPL's business risk profile will
continue to improve backed by diversification of business
operations from dyeing and printing of gray fabric to garment
trading over medium term.
The rating continue to reflect RVSPL's weak financial risk
profile, marked by small net worth, high total outside liabilities
to tangible net worth ratio, weak debt protection metrics, and its
working-capital-intensive operations. These rating weaknesses are
partially offset by the promoters' extensive experience in the
textiles industry.
Outlook: Stable
CRISIL believes that RVSPL will continue to benefit over the
medium term from its promoters' extensive industry experience. The
outlook may be revised to 'Positive' if the company's net worth
improves significantly backed by equity infusion and its scale of
operations increases significantly with sustained profitability,
leading to higher-than-expected cash accruals generated in
business. Conversely, the outlook may be revised to 'Negative' if
its capital structure further deteriorates on account of
incremental working capital requirements or if RVSPL undertakes
any large debt-funded capital expenditure programme.
RVSPL was set up in 1993 as a proprietorship firm named Rasik
Vatika Silk Mills; it was reconstituted as a private limited
company in 2010. It is promoted by Mr. Harbans Lal Arora and Mr.
Kapil Arora. RVSPL dyes and processes grey fabric on a job-work
basis and has also started trading in garments.
RVSPL reported, on a provisional basis, profit after tax (PAT) of
INR5.4 million on net sales of INR724.8 million for 2013-14 as
against PAT of INR3.8 million on net sales of INR542.4 million for
2012-13.
ROCKMAN INDUSTRIES: ICRA Ups Rating on INR45.99cr Loans From 'D'
----------------------------------------------------------------
ICRA has revised the ratings for the INR45.99 Crore Lines of
Credit (LOC) facilities of Rockman Industries Chennai Private
Limited from [ICRA]D/[ICRA]D to [ICRA]BBB/ [ICRA]A2. The Outlook
on the long-term rating is "Stable".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term Loans 22.99 Rating revised from
[ICRA]D to [ICRA]BBB (Stable)
Cash Credit 15.00 Rating revised from [ICRA]D
to [ICRA]BBB (Stable)
Capex Letter of 7.00 Rating revised from [ICRA]D
Credit to [ICRA]A2
Bank Guarantee 1.00 Rating revised from [ICRA]D
to [ICRA]A2
The revision in ratings takes into account the timely servicing of
debt obligations by RICPL over the past three months supported by
equity infusion from new promoters i.e. Rockman Industries Limited
(RIL), who acquired 81.0% equity stake in RICPL in January 2014
while infusing equity/preference capital of INR40.6 Crore into the
company. ICRA considers this recent change in ownership and
management control to be a significant credit positive for RICPL
providing it access to funding support in case its own
profitability metrics take a longer than expected time to improve.
ICRA believes that RICPL would benefit from operational support
from RIL given the latter's established track record in aluminium
die casting business, synergies that could possibly result from
aggregation of business development efforts, raw material sourcing
and tools and dies development. While ICRA notes the significant
dependence of RICPL's revenues on the automobile industry, this
risk is somewhat mitigated in the near term considering the strong
order book position from several tier-1 suppliers for end-
application of such parts in passenger vehicles which imparts
strong revenue growth visibility. RICPL's ratings are, however,
constrained by its currently weak financial profile reflected in
large net loss of INR18.3 Crore recorded in 2013-14 and high
working capital intensity due to high inventory and relatively
longer receivable cycle (being present at tier-2 level in the
automotive value chain). ICRA, however, draws comfort from the
access to financial support from parent company for servicing the
debt obligations in the event of any shortfall in cash generation.
The ability of RICPL to significantly scale up its operations over
the medium term is likely to be a critical determinant of its
profitability and would govern the extent of external financing
requirement.
Recent Results
As per the provisional financials, RICPL recorded an operating
income of INR35.0 Crore with an OPBIDTA of INR0.5 Crore and net
losses of INR18.3 Crore during 2013-14 as compared to operating
income of INR42.7 Crore, OPBIDTA of INR6.9 and net losses of
INR1.9 Crore during 2012-13.
Rockman Industries Chennai Private Limited was started as M/s
Srivatsa Die Casting, an ancillary unit of Royal Enfield, promoted
by Mr. Srivatsan for more than three decades. The company was
predominantly acting as a jobbing foundry. In 2003, Srivatsa Die
Casting merged with Sargam Metals Private Limited (rated
[ICRA]B/[ICRA]A4), an aluminium alloy manufacturer. In 2008, the
die casting division was hived off separately and Sargam Die
Castings Private Limited (SDPL) was formed. SDPL acquired a CNC
machining company, M/s Marvel Mactech in 2010 to augment machining
capabilities. Later in January 2014, Rockman Industries Limited
(RIL) (rated [ICRA]AA/Stable/[ICRA]A1+) acquired 81% stake in SDPL
and the name of the company was changed to Rockman Industries
Chennai Private Limited.
ROSEWOOD LAMINATES: CRISIL Assigns 'B' Rating to INR90MM Loans
--------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable' rating to the bank
facilities of Rosewood Laminates Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 59.1 CRISIL B/Stable
Cash Credit 30 CRISIL B/Stable
Proposed Long Term
Bank Loan Facility 0.9 CRISIL B/Stable
The rating reflects RLPL's initial phase and modest scale of
operations in the highly competitive laminates industry and its
working capital intensive operations. These rating weaknesses are
partially offset by the extensive experience of the company's
promoters in the laminates industry.
Outlook: Stable
CRISIL believes that RLPL will continue to benefit over the medium
term from its promoters' experience in the laminates industry. The
outlook may be revised to 'Positive' if the company stabilises its
operations earlier than expected, leading to healthy accruals and
improvement in its financial risk profile. Conversely, the outlook
may be revised to 'Negative' if RLPL's operating margin is lower
than expected, or it undertakes a substantial debt-funded
expansion programme, or its working capital management
deteriorates, resulting in significant weakening of its financial
risk profile.
Incorporated in 2013, RLPL is promoted by Morbi (Gujarat) based
Mr. Rajeshbhai C Garala, Mr. Digvijaysinh Padheriya and others.
RLPL is engaged into manufacturing of laminates.
SETHI COKE: ICRA Suspends 'D' Rating on INR6.88cr Bank Loan
-----------------------------------------------------------
ICRA has suspended the [ICRA]D rating assigned to the INR6.88
crore bank lines of Sethi Coke Industries. The suspension follows
ICRA's inability to carry out a rating surveillance in the absence
of the requisite information from the entity
SHABARI FARMS: ICRA Assigns 'B' Rating to INR9cr Bank Loans
-----------------------------------------------------------
ICRA has assigned long-term rating of [ICRA]B to the INR5.24 Crore
term loans and INR3.76 Crore proposed fund based facilities of
Shabari Farms.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term loans 5.24 [ICRA]B/Assigned
Proposed long-term
fund based facilities 3.76 [ICRA]B/Assigned
The assigned rating considers the favourable long term prospects
for domestic poultry industry, and the expected improvement in the
revenues of the firm in 2014-15, when the firm becomes fully
operational. The ratings are however, constrained by the
relatively small scale of operations in the highly competitive
industry, and lack of pricing flexibility for the firm (where the
prices are fixed by industry coordination committee).
The ratings are also constrained by the inherent vulnerability of
poultry industry to disease outbreaks and the firm's margins are
susceptible to raw material price fluctuations. Nascent stage of
operations and debt funded capital expenditure had resulted in
stretched capitalization and weak coverage indicators; although
the same is expected to improve post infusion of capital of
INR~0.70 crore and expected higher accruals in the 2014-15. Going
forward, the firm's ability to quickly ramp up the operations and
stable operating environment will be critical for improving the
credit profile.
Established in 2013, Shabari Farms (SF) is a partnership firm
based in Paramathy Velur, near Karur, Tamilnadu is engaged in
poultry farming with a capacity of 1,25,000 birds. The firm is
managed by Mr. Kalaimani and his family members. The Firm also has
a feed unit with a capacity to process 10 tonne per hour, at
present, the feed manufactured in the unit are used only for
captive consumption. SF has started operational in November 2013
with a capacity to 1,00,000 birds. The firm purchases Day Old
Chicken's (DOC's) from Venkateshwara Hatcheries Private Limited
(rated at [ICRA]BBB (stable)/[ICRA]A2) and sells eggs to the
traders in Namakkal and Erode region.
Recent Results
As per unaudited results, the firm has reported an operating
income of INR1.2 Crore for 2013-14 with a net profit of INR0.01
Crore.
SHEEN INDIA: ICRA Reaffirms 'B' Rating on INR23.5cr Bank Loan
-------------------------------------------------------------
ICRA has reaffirmed the long-term rating of [ICRA]B assigned
earlier to the INR23.50 crore fund-based bank facilities of Sheen
India Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term fund-based 23.50 [ICRA]B; Reaffirmed
bank facilities
The rating reaffirmation continues to favorably factor in the
promoters' experience of around two decades in the garment
manufacturing and export business, and long established relations
with its key customers which have resulted in repeat orders over
the past few years thereby partly mitigating the risk associated
with concentration of revenues on a few customers located in
Spain. Further, comfort can be derived from the fact that export
orders to these customers are backed by LC or are under ECGC cover
thereby limiting the credit risk. However, the rating remains
constrained by the weak financial profile which is on account of
low operating profit margins and high working capital intensity of
operations. Low profitability margins expose the earnings to the
fluctuations in exchange rate and volatility in raw material
costs, which is also reflected in the volatility observed in
profit margins over the years. The working capital cycle of the
company is characterized by high inventories and long receivable
collection period which has further deteriorated in the past two
years, resulting in steep rise in working capital intensity.
Further, growing revenue base of the company have necessitated
incremental working capital requirements, which due to the low
levels of internal accruals has necessitated incremental
borrowings, thereby resulting in elevated borrowing levels in
relation to the profitability as well as scale of operations.
While assigning the rating ICRA has taken a note of the capital
expenditure undertaken by the company and the investments in other
entities which were not adequately funded through long-term funds,
thereby stretching the liquidity.
Going forward, the company's ability to improve profitability
margins, reduce its working capital cycle, and the scale of
capital expenditure/ investments, funding mix thereof will remain
the key rating sensitivities.
Incorporated in 2005 by Mrs. Geetica Kweera, Sheen India Private
Limited (SIPL) is engaged in the manufacturing and export of
garments for ladies and children to Spain, Switzerland, Hongkong,
etc. The company largely manufactures products in-house while some
portion is outsourced primarily during peak demand season. SIPL
currently has two manufacturing facilities in Noida (Uttar
Pradesh) which are equipped with a total of 300 sewing machines.
Recent Results
The company reported an Operating Income (OI) of INR46.33 crore
and Profit after Tax (PAT) of INR0.30 crore in FY14 (provisional
estimates) as compared to an OI of INR41.99 crore and PAT of
INR0.54 crore in FY13.
SHETKARI SAKHAR: CRISIL Lowers Rating on INR450MM Loan to 'D'
-------------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facilities
of Shetkari Sakhar Karkhana (Chandapuri) Ltd to 'CRISIL D' from
'CRISIL B/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 450 CRISIL D (Downgraded from
'CRISIL B/Stable')
The downgrade reflects delays in servicing of term debt by SSKL.
The delays are because of weak liquidity on account of the
company's initial stage of operations.
SSKL also has a weak financial risk profile driven by large debt-
funded capital expenditure (capex), and is exposed to risks
related to timely execution of its ongoing capex and scaling up of
operations, and regulatory changes in the sugar industry. The
company, however, benefits from its proximity to sugarcane
producing region and tie-ups with the farmers for procurement of
sugarcane.
SSKL was incorporated in 2011 by Mr. M. Waghmode and his family
along with other directors. SSKL manufactures sugar at its factory
at Chandapuri in Solapur (Maharashtra).
SHREE SITA: ICRA Suspends 'B+/A4' Rating on INR7cr Term Loan
------------------------------------------------------------
ICRA has suspended the [ICRA]B+ and [ICRA]A4 ratings assigned to
the INR7 crore term loan and working capital limits of Shree Sita
Rice Impex Private Limited. The suspension follows ICRA's
inability to carry out a rating surveillance in the absence of the
requisite information from the company.
SHRI SIDHDATA: CARE Cuts Rating on IN131.95cr Loans to 'D'
----------------------------------------------------------
CARE revises ratings assigned to bank facilities of Shri Sidhdata
Ispat Pvt Ltd.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 121.95 CARE D Revised from
CARE BB-
Short term Bank Facilities 10.00 CARE D Revised from
CARE A4
Rating Rationale
The revision in rating of Bank facilities of Shri Sidhdata Ispat
Pvt Ltd takes into account the on-going delays in debt servicing
obligations.
Shri Sidhdata Ispat Pvt Ltd, incorporated in October 2002,
commenced its commercial operations in August 2005. The company is
engaged in the manufacturing of Cold Rolled (CR) steel
sheets/coils at its manufacturing facility located at Ghaziabad,
Uttar Pradesh with an installed capacity of 96,000 Metric Tonnes
per Annum (MTPA) as on March 31, 2013.
The products manufactured by the company find application in
various industries such as automobile, consumer
electronics/durables, home appliances/furnishing etc. SSIPL is
promoted by Mr. Suresh Kumar Gupta, Mr. Rajesh Kumar Gupta and Mr.
Pradeep Gupta.
Key updates
A disruption in the company's operations has been reported on
account of break-down of one of its rolling mills at its
Ghaziabad plant. The same has adversely impacted the company's
income, profitability, cash accruals and liquidity position
thereby resulting in on-going delays in debt servicing
obligations.
SPARK GREEN: ICRA Upgrades Rating on INR80cr Bank Loan to B-
------------------------------------------------------------
ICRA has upgraded the long-term rating from [ICRA]D to [ICRA]B-
assigned to the INR80.00 crore1 term loans of Spark Green Energy
(Ahmednagar) Private Limited. The rating was earlier suspended in
January 2014, and the suspension has been revoked.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term Loans 80.00 [ICRA]B- upgraded
The revision in rating takes into account the deferment of the
long-term loan repayments by the company's lenders to August 2014,
given the delays in project commissioning, and the timely interest
payments by the company in the recent months.
The rating however remains constrained by the project execution
risks involved in the on-going construction of the project with
significant delays already seen in commissioning which has
resulted in sizeable cost overruns, exposure of profitability to
movement in fuel costs in absence of firm fuel supply agreement
and lack of past experience of the promoters in setting up of
biomass-based power plants, though the company has put an
experienced management team in place. Post-commissioning, the
company would also be exposed to counterparty credit risk
pertaining to BEST Undertaking (procurer), though the same would
be mitigated to some extent by the payment security mechanism in
the form of Letter of Credit to be opened by BEST, that has been
laid down in the terms of the Energy Purchase Agreement (EPA).
ICRA notes that the ability of the company to achieve the designed
plant operating parameters, subsequent to project commissioning,
would be important for healthy profitability and debt coverage
metrics.
The rating however favourably takes into account the low demand
risks for the project with a long-term EPA tied-up with BEST, low
fuel supply risks owing to adequate availability of cane trash
(main fuel) in the adjoining area, in-place clearances and
approvals for the project and in-place EPC contract on a fixed
price basis.
Spark Green Energy (Ahmednagar) Private Limited was incorporated
as a Special Purpose Vehicle by the Chawla Group in December 2003
with the objective of developing, financing and operating a bio-
mass based power project in Ahmednagar district of Maharashtra.
The project involves setting up a 25 MW biomass-based power
project. The project cost was initially estimated at INR141 crore
to be funded through term loans of INR91 crore and equity
contribution of INR50 crore. BEST Undertaking has contributed
INR30 crore as interest free deposits to partially meet the equity
requirements of the project. The project has however witnessed
significant delays in commissioning resulting in sizeable cost
overruns of about INR40 crore which is being largely met by the
promoter group through unsecured loans. The COD of the project is
currently estimated in July 2014. The company has tied-up the
Energy Purchase Agreement (EPA) for the project with BEST at
discounted tariff rates in lieu of the interest free deposits
provided by the latter. The power plant would be utilizing mainly
cane trash from its adjoining area as fuel.
SRI BALAJI: ICRA Suspends 'D' Rating on INR6.95cr Bank Loan
-----------------------------------------------------------
ICRA has suspended the [ICRA]D rating assigned to the INR6.95
crore bank lines of Sri Balaji Coke Industries. The suspension
follows ICRA's inability to carry out a rating surveillance in the
absence of the requisite information from the entity
SWAGATH MARRIAGE: CRISIL Ups Rating on INR148MM Term Loan to 'B+'
-----------------------------------------------------------------
CRISIL has upgraded its rating on the long-term bank facility of
Swagath Marriage & Function Hall (SMFH; part of the Dhanturi
group) to 'CRISIL B+/Stable' from 'CRISIL B-/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Long Term Loan 148 CRISIL B+/Stable (Upgraded
from 'CRISIL B-/Stable')
The rating upgrade reflects the improvement in the Dhanturi
group's business risk profile driven by a substantial and
sustained increase in its scale of operations, while maintaining
its profitability margins. The upgrade also factors in the
increase in the group's net-worth, which enhances its financial
flexibility, and the subsequent improvement in its capital
structure. CRISIL believes that the Dhanturi group will sustain
the improvement in its financial risk profile over the medium term
supported by consistent growth in its net-worth and the absence of
any large debt-funded capital expenditure (capex) plan.
The Dhanturi group's revenues registered a compound annual growth
rate of around 50 per cent from 2011-12 (refers to financial year,
April 1 to March 31) to 2013-14; the operating profit margins of
the group remained stable at around 20 per cent to 22 per cent
over this period. The group's revenue growth has been driven by
the commencement of four new hotels over the last two years ended
2013-14, and a sustained increase in the group's occupancy levels.
CRISIL believes that the group would register an annual revenue
growth of around 10 per cent over the medium term with the room
demand in Hyderabad expected to improve moderately as the
resolution of the Telengana row is likely to be ensure some
political stability.
The Dhanturi froup's net worth is estimated to have increased to
around INR200 million as on March 31, 2014 from INR129 million as
on March 31, 2012 on the back of moderate accretion to reserves.
Subsequently, the group's gearing is estimated to have declined to
1.4 time as on March 31, 2014 from 2.0 times as on March 31, 2012.
The gearing of the group is expected to further decline to 1.2
times as on March 31, 2015 supported by consistent growth in its
net-worth and absence of any large debt-funded capex plan.
CRISIL's rating on the long-term bank facilities of Dhanturi group
continues to reflect the high degree of geographic concentration
in the group's revenue profile, and its exposure to intense
competition and cyclicality in the hotel industry. The ratings of
the group are also constrained on account of its average financial
risk profile marked by its modest net-worth, moderate gearing, and
average debt protection metrics. These rating weaknesses are
partially offset by the extensive experience of the Dhanturi
group's promoters in the hotel industry.
For arriving at its ratings, CRISIL has combined the business and
financial risk profiles of SMFH and Dhanturi Group of Hotels Pvt
Ltd (DGHPL). This is because both these entities, together
referred to as the Dhanturi group, have common promoters, are in
the same line of business, and have significant operational
linkages and fungible cashflows.
Outlook: Stable
CRISIL believes that the Dhanturi group will continue to benefit
over the medium term from its established regional presence and
its promoters' extensive experience in the hotel industry. The
outlook may be revised to 'Positive' if there is a substantial and
sustained improvement in the group's profitability margins, while
registering a moderate revenue growth, or there is substantial
improvement in its capital structure on the back of sizeable
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 significant deterioration in its capital
structure caused most likely because of a large debt-funded capex
programme.
The Dhanturi group operates a chain of hotels and restaurants in
Hyderabad and Secunderabad. The group is promoted and managed by
Mr. D Ravinder and Mr. D Hari Shankar. DGHPL operates six hotels
and two restaurants, and SMFH operates five hotels.
U.C. JAIN: CARE Assigns 'B' Rating to INR9cr Bank Loan
------------------------------------------------------
CARE assigns 'CARE B' rating to the bank facilities of U.C. Jain
Foundation Trust.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 9 CARE B Assigned
Rating Rationale
The rating assigned to the bank facilities of UC Jain Foundation
Trust (UCJ) is primarily constrained by the initial year of
operations, leveraged capital structure, competition within the
education industry from the existing as well as new schools and
the regulatory risks associated with the educational sector.
The rating, however, favourably takes into account the experience
of the trustees in the educational sector and buoyant prospects of
K-12 segment.
Going forward, the ability to attract and enroll students as
envisaged and improvement in the capital structure would be the
key rating sensitivities.
UCJ is an educational trust and was formed in July 2012 by Mr UC
Jain and his sons; Mr Rishab Jain and Mr Nikhil Jain with
the objective to provide education services. The trust started a
school under the name of 'Wisdom Global School' in June 2012,
located at Haridwar and affiliated from Central Board of Secondary
Education (CBSE). The first academic session started in April
2014. The school has started with classes up to 5th standard and
the total strength for academic year 2014-2015 is 250 students.
UCJ has undertaken capital expenditure for building academic,
blocks, etc with a project cost of INR13.38 crore and the same is
funded through a debt equity ratio of 2.07x. UCJ is a part of the
"Velveleen Group" which has interests in the manufacturing of
velvet and fabric, real estate infrastructure development,
manufacturing of concrete bricks and education.
VINOD COTFAB: CARE Assigns 'B' Rating to INR16.50cr Bank Loan
-------------------------------------------------------------
CARE assigns 'CARE B' and 'CARE A4' ratings to bank facilities of
Vinod Cotfab Pvt Ltd.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 16.50 CARE B Assigned
Short-term Bank Facilities 1.05 CARE A4 Assigned
Rating Rationale
The ratings assigned to the bank facilities of Vinod Cotfab Pvt
Ltd are primarily constrained on account of the risk associated
with the ongoing debt funded capex and its presence in the working
capital intensive, competitive and fragmented textile industry.
However, the ratings derive strength from the wide experience of
the promoters in the textile industry, support derived from the
already established market presence of group companies and
availability of benefits under Technological Upgradation Fund
(TUF) Scheme.
The ability of VCPL to successfully complete the ongoing capex
within the stipulated time period without any cost overrun
and achieve envisaged level of sales and profitability are the key
rating sensitivities.
VCPL is a part of Ahmedabad-based Vinod group and was originally
incorporated in September 2008 in the name of Noble Vincom Pvt.
Ltd (NVPL) in West Bengal. However, subsequently the registered
office of NVPL was transferred to Gujarat in October 2012 and
resumed its current name in January 2013. VCPL is managed by its
key promoters Mr Vinod Mittal, Mr Harsh Mittal and Mr Yash Mittal
and is presently engaged in the trading of grey fabric. VSPL is
setting up a green field project costing INR21.20 crore for
manufacturing of grey fabric with a capacity of 63 lakh meters per
annum (LMPA) at its manufacturing facility located at Ahmedabad
which is proposed to be funded through a term loan of INR15 crore
and the remaining through the promoters' contribution in the form
of equity of INR5.01 crore, and unsecured loan of INR1.19 crore.
As a part of capex project, it would install imported machinery
costing INR10.93 crore with an installed capacity of 63 lakh meter
per annum (LMPA) consisting 30 air jet looms and indigenous
ancillary machineries costing INR2.80 crore at its manufacturing
facility located at Ahmedabad.
During FY14 (provisional refers to the period April 1 to
March 31), VCPL reported TOI of INR2.18 crore with PBT of INR0.01
crore as against a TOI of INR1.45 crore with PBT of INR0.05 crore
in FY13.
WITTY AUTO: ICRA Suspends 'B-' Rating on INR8cr Bank Loan
---------------------------------------------------------
ICRA has suspended the [ICRA]B- rating assigned to the INR8.00
crore bank facilities of Witty Auto Engineering Private Limited.
The suspension follows ICRA's inability to carry out a rating
surveillance in the absence of the requisite information from the
company.
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I N D O N E S I A
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BERAU COAL: S&P Puts 'BB-' CCR on CreditWatch Negative
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Standard & Poor's Ratings Services placed its 'BB-' long-term
corporate credit rating and 'axBB' long-term ASEAN regional scale
rating on Indonesia-based coal miner PT Berau Coal Energy Tbk.
(Berau Energy) on CreditWatch with negative implications. At the
same time, S&P placed its 'BB-' issue ratings on the company's
outstanding guaranteed senior secured notes due 2015 and 2017 on
CreditWatch with negative implications.
S&P placed the ratings on CreditWatch to reflect (1) the prospect
for lowering S&P's liquidity assessment on the company until Berau
Energy refinances US$450 million of senior secured notes maturing
in July 2015; and (2) the current lack of clarity on the financial
policies of the new major shareholder of Berau Energy's parent
company, Asia Resources Minerals PLC (ARMS).
Unless the company refinances within the next three months, S&P
expects its liquidity sources, including cash balance and funds
from operations (FFO), to be below liquidity needs, which will now
include the US$450 million maturing within the next 12 months.
"A timely refinancing of Berau Energy's senior notes within the
next three months should provide the company with ample liquidity
under our expectations of marginally negative free operating cash
flows," said Standard & Poor's credit analyst Xavier Jean. "But
post refinancing, we believe the financial policies of Mr. Samin
Tan, the new major shareholder of ARMS, could influence the
liquidity situation and creditworthiness of Berau Energy and
ARMS."
"We have yet to obtain better clarity on Mr. Tan's strategy on the
ownership of Berau Energy, the operating focus of the company, and
dividend and capital spending policies. We understand that, in
May 2014, large shareholders in ARMS, including Mr. Tan, called
for ARMS to pay an exceptional dividend, potentially in excess of
US$500 million. A payment of more than US$500 million would
exceed the proceeds ARMS received from its sale of shares in
Indonesian coal producer PT Bumi Resources Tbk. in the first
quarter of 2014. We forecast Berau Energy's ratio of FFO to debt
at 5%-7% over the next 24 months, which we view as weak for the
current rating. And in our opinion, a greater risk tolerance and
shareholder-friendly initiatives could pressure the
creditworthiness and liquidity of Berau Energy further," S&P
noted.
S&P intends to resolve the CreditWatch placement within three
months, after getting better clarity on the financial policies and
intentions of the major shareholder and assessing the progress in
refinancing the US$450 million in notes.
S&P may downgrade Berau Energy by up to two notches, despite a
successful refinancing and the maintenance of ample liquidity, if:
(1) it believes that the future financial policies of the company
or its parent could weaken its liquidity or its credit profile
because of higher capital spending or other related party
transactions; or (2) S&P assess the group credit profile has
deteriorated. S&P may also lower the rating on the company if its
refinancing is materially delayed.
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N E W Z E A L A N D
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ROSS ASSET: David Ross Loses Appeal Against Jail Term
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Hamish Fletcher at The New Zealand Herald reports that jailed
fraudster David Ross must serve at least 5 years 5 months in
prison after he lost an appeal against his minimum non-parole term
on June 25.
Mr. Ross, Wellington financier and former head of the Ross Asset
Management (RAM), was sentenced at the Wellington District Court
last year to 10 years 10 months' jail, the report relates.
The Herald relates that the 63-year-old's elaborate fraud,
spanning 12 years, cost hundreds of investors their life savings
and retirement funds.
In total, NZ$115.5 million of investments is estimated to have
been lost in the group, which folded last November. Prior to its
collapse, Mr. Ross had led investors to believe they had NZ$351.5
million in client portfolios, the report notes.
A minimum non-parole sentence of five years and five months was
imposed by the sentencing judge.
The Herald recalls that Mr. Ross earlier this month appealed
against that minimum non-parole sentence in Wellington and his
lawyer argued that it should go down to 4 years.
But Justices Christine French, Jillian Mallon and Geoffrey Venning
have dismissed that appeal on Wednesday, a spokeswoman for the
Serious Fraud Office said, notes the Herald.
The Financial Markets Authority and SFO -- who took the case
against Ross -- said they welcomed the decision:
"We believe that the decision to uphold the original sentence
reflects the seriousness of Mr Ross's criminal offending and the
significant harm that his behaviour has caused to investors," they
said in a statement.
When the appeal took place, a spokesman for Ross Asset Management
Investors Group, Bruce Tichbon, said he had received emails
expressing anger that victims could not counter appeal for a
longer sentence.
The investor group has received messages from those angry at Ross'
lawyer "having the cheek to appeal".
There was frustration that "Ross in many ways seems to get better
treatment than his victims."
"Cruelly the victims cannot be a party to this appeal," Tichbon
said earlier this month.
Mr. Ross' original sentence was the longest given out in a Serious
Fraud Office case, the report adds.
As reported in the Troubled Company Reporter-Asia Pacific on
Nov. 8, 2012, the High Court appointed PricewaterhouseCoopers
partners John Fisk and David Bridgman as Receivers and Managers
to Ross Asset Management Limited and nine other associated
entities following application by the Financial Markets
Authority. The associated entities are:
* Bevis Marks Corporation Limited;
* Dagger Nominees Limited;
* McIntosh Asset Management Limited;
* Mercury Asset Management Limited;
* Ross Investment Management Limited;
* Ross Unit Trusts Management Limited;
* United Asset Management Limited;
* Chapman Ross Trust;
* Woburn Ross Trust;
* Ace Investments Limited or Ace Investment Trust Limited or
Ace Investment Trust;
* Vivian Investments Limited; and
* Ross Units Trusts Limited.
The Receivers and Managers have also been appointed to Wellington
investment adviser David Robert Gilmore Ross personally.
Mr. Fisk said they have identified investments of nearly
NZ$450 million held on behalf of more than 900 investors across
1,720 individual accounts.
The High Court in mid-December ordered John Fisk and David
Bridgman be appointed liquidators of these companies:
-- Ross Asset Management Limited (In Receivership);
-- Bevis Marks Corporation Limited (In Receivership);
-- McIntosh Asset Management Limited (In Receivership); and
-- Mercury Asset Management Limited (In Receivership).
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S R I L A N K A
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SANASA DEVELOPMENT: Fitch Affirms BB+ Rating; Outlook Stable
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Fitch Ratings Lanka has affirmed Sanasa Development Bank PLC's
(SDB) National Long-Term Rating at 'BB+(lka)'. The Outlook is
Stable.
KEY RATING DRIVERS
SDB's rating continues to reflect its weak asset quality and high
net-interest margins (NIM) due to its focus on the higher-risk
microfinance business, in which the bank has expertise to manage
reasonably well. The rating also captures the bank's moderate
capitalisation and high operating and credit costs, which
constrain its profitability.
SDB's capitalisation has been pressured by weak earnings and high
dividend payouts. Its Fitch core capital ratio declined to 13.4%
as at end-March 2014 from 14.3% at end-2013. However, its
capitalisation remains comparable to some of its higher rated
peers.
SDB's asset quality reflects the susceptibility of its clientele
to economic cycles. SDB's reported NPL ratio increased to 6% as
at end-March 2014 from 5% at end-2013.
SDB's loan book grew by 4.7% in 1Q14 (2013:13.5%) driven by loans
to the housing construction segment, which has historically been
the bank's largest exposure. Fitch believes that SDB's risk
profile could deteriorate as it strives to meet the target asset
base of LKR100bn, compared with LKR29bn as at end-2013.
Deposits will likely continue to be SDB's main source of funding
with over 31% of deposits being sourced through cooperative
societies. This reflects its linkages with the Sanasa
microfinance cooperative movement and Fitch expects this is likely
to continue to be a stable source of funding for the bank.
RATING SENSITIVITIES
The rating could be downgraded if there is a significant deviation
in lending practices from SDB's core expertise of microfinance
lending and if the bank fails to sustain its capitalization at a
level commensurate with its risk profile. There may be positive
rating action if the bank achieves stronger capitalization and
asset quality while expanding its asset base.
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T H A I L A N D
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THANACHART BANK: Fitch Affirms 'BB+' Support Rating Floor
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Fitch Ratings has affirmed Thanachart Bank Public Company
Limited's (TBANK) Long-Term Issuer Default Rating (IDR) at 'BBB-'
and its majority shareholder Thanachart Capital Public Company
Limited's (TCAP) National Long-Term Rating at 'A(tha)'. The
Outlook is Negative.
A full list of rating actions is included at the end of this
commentary.
KEY RATING DRIVERS - TBANK
TBANK's IDRs, VR, and National Ratings take into account its
domestic franchise as the sixth largest commercial bank in
Thailand, and its leading market position in auto hire purchase.
Fitch expects continued ordinary support from its 49%-shareholder
the Bank of Nova Scotia (BNS; AA-/Stable), particularly in
operations and risk management. The bank benefited from a one-off
gain from the sale of its subsidiary Thanachart Life Assurance in
2Q 2013. TBANK has shown improvements in capitalization, funding
and reserve coverage over the past three years.
The bank's recent sound performance has reduced the risk of a
downgrade. However the ratings Outlook remains negative; this is
driven by Thailand's challenging operating environment and
economic outlook, which may have further uncertain impact on
TBANK's performance. The operating environment contributed to an
uptick in TBANK's NPL ratio, which already is relatively high
(4.6% in 1Q 2014) compared with sector averages. However, the
overall financial profile of the bank remains comparable to 'bbb-'
local and regional peers.
The Support Rating and Support Rating Floor of TBANK reflect
Fitch's view that there is a moderate probability of support from
the government, in case of need. This is due to the bank's
systemic importance to the domestic financial sector, as a medium-
sized commercial bank with a market share for loans of around 7%.
RATING SENSITIVITIES - TBANK
An ability to sustain recent improvements in its credit profile,
particularly in the face of the uncertain operating environment,
would lead to a revision of the Outlook to Stable
Meanwhile, a material reversal of recent gains in key financial
measures such as leverage and liquidity, along with a decline in
TBANK's performance relative to its peers, could lead to a
downgrade. Nevertheless, Fitch expects the bank's buffers to be
sufficient for weathering a normal economic downturn without any
negative ratings action.
An increase in the shareholding of BNS, and in its level of
control of the bank, could be a positive ratings driver.
KEY RATING DRIVERS - TCAP
TCAP's National Ratings are notched down from its core operating
subsidiary TBANK, to reflect its structural subordination, a
reliance on dividend payments from TBANK, and the presence of
large minority interests. The Outlook matches that of TBANK.
TCAP's Support Rating reflects Fitch's expectation that there can
be no reliance on sovereign support, due to the holding company
structure and the likelihood that any support would be applied at
TBANK rather than TCAP.
RATING SENSITIVITIES - TCAP
Any change in TBANK's ratings could have a corresponding impact on
TCAP.
A significant deterioration in TCAP's liquidity or leverage
profile could result in a wider notching from TBANK.
The list of rating actions is as follows:
TBANK
Long-Term IDR affirmed at 'BBB-'; Outlook Negative
Short-Term IDR affirmed at 'F3'
Support Rating Floor affirmed at 'BB+'
National Long-Term Rating affirmed at 'A+(tha)'; Outlook Negative
National Short-Term Rating affirmed at 'F1+(tha)'
Support Rating affirmed at '3'
Viability Rating affirmed at 'bbb-'
TCAP
National Long-Term Rating affirmed at 'A(tha)' ; Outlook Negative
National Short-Term Rating affirmed at 'F1(tha)'
Support Rating affirmed at '5'
Support Rating Floor affirmed at 'No Floor'
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V I E T N A M
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VIETNAM NATIONAL: Faces Uphill Task to Repay VND11 Trillion Debts
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Biz Hub reports that Vietnam National Shipping Lines (Vinalines)
is faced with the task of repaying VND11 trillion, or US$523.8
million, to 24 credit institutions, nearly half of whom are
foreign agencies.
According to Biz Hub, an official from Vinalines told Viet Nam
News on June 24 that VietinBank led the list of creditors with
VND2,230 billion, or $106.19 million (including principal and
interest), followed by VDB, Asian Commercial Bank, OceanBank and
Vietcombank. Natixix, a French corporate and investment bank, is
the biggest foreign creditor of Vinalines with a loan of VND1
trillion ($47.6 million).
Biz Hub says Vinalines has been focusing on three areas including
shipping, port management and maritime services and logistics.
Shipping services contributed the largest share of revenue for the
group earlier.
However, this sector has been suffering from the after-effects of
the global recession in recent years, says Biz Hub. The recession
has stopped operations of many giant shipping firms in the world,
with some even going bankrupt. This shows that the Vinalines'
difficulties were caused by both subjective and objective factors,
the report notes.
Apart from that, Biz Hub relates, the group is unable to repay its
debts because it is dealing with a difficult trade and production
situation, coupled with a drastic reduction in shipping freight
that has led to a serious decline in revenue.
"In 2013 the losses were over VND3.1 trillion or $147.6 million,
more than triple as compared to 2012. It will continue to bleed
heavily this year as well," said the official.
Biz Hub notes that the group's business situation is unlikely to
improve in the near future because the predictions for the
shipping market itself are not too bright. This means that with
the task of paying such a huge debt, Vinalines will also be
dealing with a large number of difficulties in payment.
In addition, almost all the funds borrowed from credit
institutions were invested in ships, which have been mortgaged as
security, and are being assessed at a price much lower than the
book value, the report relays.
Biz Hub reports that the Government has approved the debt
restructuring plan for Vinalines in an effort to rescue the
shipping fleet from bankruptcy. However, the firm is still very
much in need of financial support from credit institutions to
solve its problems and salvage its operations.
Under the approval signed early this month, Biz Hub says, the
Government has agreed to wipe clean the Vinalines' debt of loan
interest worth VND416 billion or $19.8 million from Vietnam
Development Bank (VDB) and reschedule the principal debt worth
VND2 trillion or $95.2 million for two years, from December 31
2013 to December 31, 2015.
However, the Government's support has been only for the group's
debt from the VDB, the report notes. As for other commercial
banks, Vinalines has been trying incessantly to seek a solution to
resolve the problem. Although the debt reschedule will ease
financial pressure on Vinalines, in the long term it will still be
difficult because the shipping market is not sure of recovery any
time soon, according to Biz Hub.
Vietnam National Shipping Lines engages in port and marine
businesses. Vinalines was founded in 1995 and is based in Ha Noi,
Vietnam with branches in Hai Phong City, Ho Chi Minh City, HaNoi,
CanTho city, and Nha Trang City, Vietnam; and Southpoint,
Singapore.
*********
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
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about which we report.
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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.
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thereof are US$25 each. For subscription information, contact
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*** End of Transmission ***