/raid1/www/Hosts/bankrupt/TCRAP_Public/140825.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Monday, August 25, 2014, Vol. 17, No. 167
Headlines
A U S T R A L I A
CHARTERHILL GROUP: Owes AUD11.5 Million to Creditors
CHILLED VISION: Clifton Hall Appointed as Liquidators
FORTESCUE METALS: S&P Raises CCR to 'BB+'; Outlook Stable
PATINACK FARM: Gerry Harvey Calls in AUD40-Mil. Debt From Tinkler
REMORA TECHNOLOGIES: Placed in Administration
SOANES INVESTMENTS: Abbott Welsh Appointed as Administrator
TRAVEL WORLD: In Administration; First Meeting Set For Sept. 1
C H I N A
FUTURE LAND: 1H 2014 Results Supports Moody's Ba3 CFR
GEMDALE CORPORATION: 1H 2014 Results No Impact on Moody's Ba1 CFR
HENGDELI HOLDINGS: 1H 2014 Results No Impact on Moody's Ba2 CFR
KAISA GROUP: 1H 2014 Results No Impact on Moody's Ba3 CFR
WEST CHINA: 1H 2014 Results No Impact on B1 CFR, Moody's Says
YINGDE GASES: Moody's Assigns Ba3 Rating to Proposed USD Notes
I N D I A
ALCHEMIST FOODS: CRISIL Reaffirms B+ Rating on INR177.9MM Loan
ALCHEMIST LTD: CRISIL Reaffirms B+ Rating on INR212.3MM Term Loan
BHARAT INDUSTRIES: CRISIL Assigns B+ Rating to INR18MM Term Loan
C P ISPAT: CRISIL Assigns 'D' Rating to INR120MM Cash Credit
DIPESH ENGINEERING: CRISIL Ups Rating on INR30M Cash Credit to B+
FITEX INDUSTRIES: CRISIL Reaffirms B INR160MM Cash Credit Rating
HYSON LOGISTICS: CRISIL Puts B Rating on INR90MM Cash Term Loan
JAI GIRIRAJ: ICRA Assigns B+ Rating to INR10cr Fund Based Limits
JET AIRWAYS: ICRA Cuts Rating on INR2,460cr Term Loan to 'D'
K. VENKATA: ICRA Reaffirms 'B+' Rating on INR5.5cr Cash Credit
MILAN INFRA: CRISIL Reaffirms 'B+' Rating on INR80MM Term Loan
NATIONAL SPOT: Bombay HC Grants Bail to Promoter in Exchange Scam
SAVANI EXPORTS: ICRA Revises Rating on INR7.0cr Cash Credit to B+
SHIKARPUR: ICRA Keeps B- INR5.06cr Tea Hypothecation Loan Rating
SHIRIDI SAINADH: ICRA Puts B+ Rating on INR8.80cr Fund Based Loan
SHREE BALAJI: ICRA Assigns B Rating to INR7.99cr Fund Based Loan
SHRIJEE SUGAR: ICRA Assigns 'B+' Rating to INR19.24cr Term Loan
SUPER PRIME: ICRA Assigns 'B+' Rating to INR8.0cr LT Limits
SURFACE TECH: CRISIL Cuts Rating on INR200MM Bank Guarantee to D
SWASTIKA STEEL: CRISIL Reaffirms B Rating on INR85MM Cash Credit
UNIQUE CHEMOPLANT: CRISIL Ups Rating on INR35M Cash Credit to B+
VYANKTESH CORRUGATORS: CRISIL Ups INR80M Cash Credit Rating to B
WESTERN INDUSTRIAL: CRISIL Assigns 'D' Rating to INR100MM Loan
YOGIRAJ GINNING: ICRA Reaffirms B+ Rating on INR12cr Cash Credit
- - - - -
=================
A U S T R A L I A
=================
CHARTERHILL GROUP: Owes AUD11.5 Million to Creditors
----------------------------------------------------
Jonathan Chancellor at Property Observer reports that three
Charterhill entities owe creditors a combined AUD11.5 million,
according to the latest presentation of accounts.
The Adelaide-based group offered a range of services including
SMSF advice, mortgage broking, real estate marketing, property
management along with contract negotiation, the report says.
Property Observer notes that Charterhill Group entered insolvency
in January, with many clients now caught in the wreckage of
chartered accountant George Nowak's empire.
Some related Charterhill entities are among the unsecured
creditors, with about 110 clients having been caught up in the
collapse having paid deposits for property purchases, previous
reports suggested, the report relates.
According to Property Observer, The Advisor said the three of the
Charterhill companies have collected just the AUD25,000 in
payments, according to their six-month presentation of accounts.
The companies are under the control of the receiver, Michael
Basedow of Pitcher Partners or under the control of the
liquidator, Andrew Heard of Heard Phillips.
As reported in Troubled Company Reporter-Asia Pacific on
Feb. 7, 2014, following an application by the Australian
Securities and Investment Commission, the Federal Court in
Adelaide on February 5 froze all assets owned or otherwise held by
the founder of the Charterhill group of companies,
George Nowak, and his wife, Betty Nowak.
The court also ordered the surrender of Mr. and Mrs. Nowak's
passports and restrained their travel out of Australia, as ASIC
investigates the collapse of the Charterhill group, which
specialises in assisting clients to invest in property through
self-managed superannuation funds (SMSFs).
ASIC's application was brought under section 1323 of the
Corporations Act 2001 and followed steps taken by ASIC to secure
Mr. Nowak's passport by agreement and to obtain an undertaking
from him that he would not dispose of or otherwise deal with any
assets.
The following companies in the Charterhill Group have been placed
under external control:
* Lending Solutions International Pty Ltd -- liquidators
appointed (Andrew Heard and Anthony Phillips of Heard
Phillips)
* Nova Real Estate Pty Ltd -- external administrators
appointed (Andrew Heard and Anthony Phillips of Heard
Phillips)
* EJ Property Developments Pty Ltd -- receivers and managers
appointed (Michael Basedow and Leigh Prior of Pitcher
Partners)
* Financial Wellness Pty Ltd -- receivers and managers
appointed (Michael Basedow and Leigh Prior of Pitcher
Partners).
CHILLED VISION: Clifton Hall Appointed as Liquidators
-----------------------------------------------------
Timothy Clifton and Simon Miller of Clifton Hall were appointed
Joint and Several Liquidators of Chilled Vision Pty Ltd on
Aug. 13, 2014.
A meeting of creditors will be held at 12:30 p.m. on Sept. 1,
2014, at Clifton Hall, Level 3, 431 King William Street, Adelaide.
A telephone link to the meeting will also be provided in the
offices of PPB Advisory, Level 27, 345 Queen Street, Brisbane,
Queensland at 1:00 p.m.
FORTESCUE METALS: S&P Raises CCR to 'BB+'; Outlook Stable
-----------------------------------------------------------
Standard & Poor's Ratings Services said that it had raised its
long-term corporate credit rating on Australia-based mining
company Fortescue Metals Group Ltd. to 'BB+', from 'BB'. The
outlook is stable.
At the same time, S&P raised the senior secured debt rating to
'BBB', from 'BBB-', and the senior unsecured debt rating to 'BB'
from 'BB-'. The recovery rating on the senior secured debt rating
is affirmed at '1' and on the senior unsecured debt at '5'.
"The upgrades reflect our view that Fortescue has substantially
improved its credit profile with its debt reduction, successful
production ramp-up to 155 million tons per annum (mtpa) in the
June 2014 quarter, and improving credit metrics," said Standard &
Poor's credit analyst May Zhong.
S&P believes Fortescue's sizable reduction in leverage improves
its ability to absorb earnings volatility from weaker commodity
prices. Since Nov. 2013, the company has prepaid US$3.1 billion
of its debt, cutting its gross debt to US$9.6 billion at June 30,
2014, from US$12.7 billion a year ago. On Aug. 20, 2014, the
company issued a voluntary redemption notice to repay an
additional US$500 million of unsecured notes.
Moreover, the debt reduction and the company's record earnings
have boosted Fortescue's credit metrics significantly in fiscal
2014. The company's funds from operations (FFO)-to-net debt ratio
rose to about 50% and its debt to EBITDA was at mid 1x in fiscal
2014. For fiscal 2015, S&P forecasts Fortescue's FFO to net debt
will be about 30% and adjusted debt to EBITDA will be in the low
2x, reflecting lower commodity prices.
S&P continues to assess Fortescue's business risk profile as
"satisfactory", based on its large-scale iron ore production,
competitive cost position, and long reserve life. Fortescue's
expansion has improved its asset diversity and operational
flexibility, with five mines from two hubs in the Pilbara region
in Western Australia. It has also solidified its position as the
fourth-largest iron ore producer globally. In addition, its
proximity to the Asian market gives it a geographic advantage over
its European, African, and South American competitors because of
lower shipping costs.
Tempering these strengths is the company's lack of product and
customer diversity. Almost all of Fortescue's production is sold
to the Chinese steel market, making it more vulnerable to a
decline in China's iron ore demand. Nonetheless, the completion
of growth capital expenditure and achievement of competitive cash
production costs should help Fortescue weather a further fallin
iron ore prices in the medium term. S&P estimates that
Fortescue's breakeven costs (including interest, royalties, and
minimal capital expenditure) are likely to be around US$60 per wet
metric ton (on a cost and freight (CFR) basis) in fiscal 2015,
based on its current C1 cash costs guidance and expected lower
interest expense following its debt prepayment.
"We assess Fortescue's financial risk profile as "significant".
Although the company's credit metrics in fiscal 2014 are stronger
for the rating, we expect its credit metrics to moderate to our
expectations for the "significant" levelin fiscal 2015 from the
record levels in fiscal 2014 due to the recent declinein iron ore
prices. Our base-case forecasts indicate that Fortescue's
adjusted EBITDA will be about US$4 billion to US$4.5 billion in
fiscal year 2015, under our price deck for iron ore. We forecast
Fortescue's adjusted FFO to net debt to be about 30% and adjusted
debt to EBITDA to be about 2x in fiscal 2015. We also expect the
company's free operating cash flow to be positive due to the
completion of its 155mtpa expansion," S&P said.
Ms. Zhong added: "The stable outlook reflects our expectation that
Fortescue will be able to maintain a positive free operating cash
flow, adjusted FFO to net debt in the high 20% in the near-to-
medium term, and debt to EBITDA at thelow 2x. We believe the
company's improved production costs and increasing production
volumes should partly offset the impact of weaker commodity
prices, enabling the company to maintain its metrics."
S&P could lower the rating if Fortescue's credit metrics worsened,
including its adjusted FFO to net debt falling to the low 20% or
its debt to EBITDA remaining at a high 3x for a prolonged period.
This scenario could occur if iron ore prices declined
significantly from our base-case assumptions, to the extent that
it substantially reduces Fortescue's earnings and worsens its
credit metrics. If the benchmark 62% iron ore price approaches
the low US$80 per dry metric ton level (assuming an 85%
realization rate for Fortescue's production and all other things
being equal), the rating on the company could be under pressure.
An upgrade is less likely in the short term unless the company has
a demonstrably much more conservative financial policy and
financial risk profile. This could be supported if there is
further significant reduction in its absolute debt level and the
company proactively sustains its key credit metrics amid weakening
iron ore prices, such that its debt to EBITDA remains at a low 1x
through the commodity cycle.
PATINACK FARM: Gerry Harvey Calls in AUD40-Mil. Debt From Tinkler
-----------------------------------------------------------------
Kirsten Robb at SmartCompany reports that retail king Gerry Harvey
has called in an estimated AUD40 million debt from former mining
magnate Nathan Tinkler, by selling off Mr. Tinkler's beloved
thoroughbred horse farm.
In the latest twist in Mr. Tinkler's dramatic business career,
staff at his Patinack Farm told Fairfax they were told to look for
new work this week, as Mr. Harvey could not "hold on any longer"
to recall his debt, according to the report.
SmartCompany notes that Mr. Tinkler has been clinging onto control
of Patinack Farm since it was placed in liquidation in 2012.
SmartCompany relates that Mr. Tinkler confirmed in May he would
let go of the farm, announcing to the media he would sell the
asset to a consortium of local and overseas parties from the
Middle East on a "walk in, walk out" basis for an undisclosed sum.
However, in June, Harvey Norman's top boss revealed to Fairfax
Mr. Tinkler had borrowed money from him to establish his presence
in the racing industry, SmartCompany relates.
According to SmartCompany, Mr. Harvey said he had a caveat over
Mr. Tinkler's racing interests and any sale of horses or property
from Patinack Farm had to be approved by him.
"It has been like this for months and I have been involved with
Patinack for years," Mr. Harvey told Fairfax.
"I'm a big boy and I knew what I was doing when I got involved and
I'm just in the middle of it now. We just have to hope [Tinkler]
can get one of these deals over the line and get himself out of
it."
While not confirmed directly by Mr. Harvey, the Fairfax report
cited unnamed sources in the racing industry who claimed
Mr. Tinkler's debts to Mr. Harvey could be as high as
AUD40 million, SmartCompany relays.
Patinack Farm is made up of three major properties including a
3300 acre breeding facility at Sandy Hollow in the NSW Hunter
Valley, a 1000 acre training facility and stud at Canungra on the
Gold Coast, and 950 acres of undeveloped horse country at
Monegeetta, Victoria close to the racecourses of Melbourne.
It currently has bloodstock of 560 horses.
REMORA TECHNOLOGIES: Placed in Administration
---------------------------------------------
Timothy Heesh -- tim.heesh@tphinsolvency.com.au -- of TPH
Insolvency was appointed as administrator of Remora Technologies
Pty Limited on Aug. 21, 2014.
A first meeting of the creditors of the Company will be held at
The Institute of Chartered Accountants, Room 4, Level 3, Bourke
Place, 600 Bourke Street, in Melbourne, on Sept. 2, 2014, at 10:30
a.m.
SOANES INVESTMENTS: Abbott Welsh Appointed as Administrator
-----------------------------------------------------------
Andrew William Poulter -- apoulter@abbottwelsh.com.au -- of Abbott
Welsh was appointed as administrator of Soanes Investments Pty Ltd
on Aug. 20, 2014.
A first meeting of the creditors of the Company will be held at
Abbott Welsh, Level 1, 91 William Street, in Melbourne, on
Sept. 1, 2014, at 11:00 a.m.
TRAVEL WORLD: In Administration; First Meeting Set For Sept. 1
--------------------------------------------------------------
Michael Gregory Jones -- mjones@jonespartners.net.au -- of Jones
Partners Insolvency & Business Recovery was appointed as
administrator of Travel World (Australia) Pty Ltd and Kingstar
Tour Services Pty Ltd on Aug. 20, 2014.
A first meeting of the creditors of the Company will be held at
Jones Partners Insolvency & Business Recovery, Level 13, 189 Kent
Street, in Sydney, on Sept. 1, 2014, at 11:00 a.m.
=========
C H I N A
=========
FUTURE LAND: 1H 2014 Results Supports Moody's Ba3 CFR
-----------------------------------------------------
Moody's Investors Service says that while Future Land Development
Holdings Limited has posted weaker revenues for 1H 2014, its
results support its Ba3 corporate family rating.
Moody's also says that Future Land's proposed consent solicitation
will have no immediate impact on its corporate family rating and
B1 senior unsecured debt rating.
The outlook for the ratings remains stable.
"Future Land's moderate level of debt leverage offsets the impact
of its lower interest coverage and weakened liquidity position,"
says Gerwin Ho, a Moody's Vice President and Senior Analyst.
While Future Land's revenue fell 19% year-on-year to RMB4.1
billion due to slower project delivery, its gross margin expanded
to 23.2% in 1H 2014 from 22.5% in 1H 2013, reflecting an
improvement in its product mix.
However, the company's EBITDA/interest coverage fell to 2.8x for
the 12 months to 30 June 2014 from 3.1x for the financial year
ended 31 December 2013, reflecting slower revenue recognition and
higher selling and administrative expenses in 1H 2014.
Nevertheless, Moody's expects Future Land to recognize revenues of
about RMB20 - 22 billion in 2014, supported by the strong
contracted sales in 2013.
At 30 June 2014, the company's cash to short term debt fell to
1.3x; a result which is weak for its Ba3 rating. By contrast, the
same ratio was at 3.8x at end-2013.
Nonetheless, its debt leverage remained healthy, with adjusted
debt/capitalization at 59.6% at 30 June 2014 and revenue/reported
debt at 138.1% for the 12 months to 30 June 2014. The company's
total reported debt rose slightly to RMB14.3 billion at 30 June
2014 from RMB13.9 billion at end-2013.
Moody's expects Future Land will maintain its good financial
discipline in land acquisitions and keep its debt/capitalization
at the low end of the 60%-65% range in 2014.
"As for the proposed amendments to its indentures, they will allow
Future Land more flexibility to incur debt and make investments.
Such a situation will weaken the protection for bond investors,
but will not have an immediate impact on the company's ratings,"
says Ho, who is also the Lead Analyst for Future Land.
Future Land is seeking consent from 2016 and 2018 senior note
holders to amend the terms of its indentures, so that they align
with those of its 2019 senior notes.
The changes sought by the consent solicitation statement include
amendments in relation to its fixed charge coverage ratio, debt to
asset ratio, and investments and liens.
Moody's says that while the amended terms are looser, especially
with respect to borrowings and investments, Moody's does not
expect Future Land's financial profile to change significantly,
such as to pressure its ratings.
The principal methodology used in this rating was Global
Homebuilding Industry published in March 2009.
Future Land Development Holdings Limited was founded in 1996 by
its Chairman, Mr. Wang Zhenhua. Mr. Wang has been in the property
development business in China since 1993. The company was listed
on the Hong Kong Stock Exchange in November 2012.
Future Land's 58.86% owned subsidiary, Jiangsu Future Land Co Ltd
is a B-share company listed on the Shanghai Stock Exchange since
1997.
Future Land has more than 45 projects under development. Its land
bank totaled approximately 13.94 million sqm of gross floor area
at 30 June 2014.
GEMDALE CORPORATION: 1H 2014 Results No Impact on Moody's Ba1 CFR
-----------------------------------------------------------------
Moody's Investors Service says that while Gemdale Corporation's
weak 1H 2014 results are credit negative, the results have no
immediate impact on the company's Ba1 corporate family rating,
because Moody's had anticipated the weak performance, when
Gemdale's rating outlook was revised to negative from stable in
May 2014.
Moody's expects Gemdale's contracted sales, gross margin and
revenue recognition to improve in 2H 2014; partly offsetting the
weakness in the first half of the year.
The company's Ba1 rating is also supported by its disciplined
management and adequate liquidity position.
However, any weaker-than-expected improvement in contracted sales
performance or key financial metrics -- including its profit
margins and EBITDA/interest ratio -- would pressure the company's
rating.
"Gemdale's 1H 2014 contracted sales, gross margin on recognized
sales and interest coverage were weak for its Ba1 rating level,"
says Kaven Tsang, a Moody's Vice President and Senior Analyst.
Its EBITDA/interest fell to 2.1x for the 12 months to 30 June 2014
from 2.5x in 2013.
In addition, its gross margin fell to 18% for 1H 2014 compared to
22% for 1H 2013, and 21% for the full year of 2013.
The margin decline was an extension of the trend seen in 2013, and
was mainly due to the recognition of: 1) presales contracted in
2012, when China's property market was weak, and 2) discounted and
low-margin projects.
Moody's expects Gemdale's reported gross margin will remain under
pressure in the next 1-2 years, but will modestly improve to 23%-
25% in 2H 2014 because of the recognition of the higher margin
products presold.
At 30 June 2014, Gemdale's unrecognized contracted sales totaled
around RMB54.6 billion, and its average gross margin was in excess
of 25%. These resources will support its revenue growth in 2H
2014.
As a result, Moody's expects Gemdale's EBITDA/interest to improve
and range from 2.5x-3.0x by end-2014.
Gemdale reported RMB19.6 billion in contracted sales for the first
seven months of 2014, down 12.5% year-on-year from RMB22.4 billion
for the same period in 2013. The fall was slightly more severe
than the 10.5% decline in the national contracted sales in the
first seven months of 2014.
Moody's anticipates that Gemdale's contracted sales will improve
in 2H 2014, as the company will launch approximately RMB40 billion
of new projects in the coming months.
In addition, the company has slowed down its land acquisitions in
1H to contain its funding requirement. In 1H 2014, it invested
around RMB6.4 billion in new land acquisitions, representing
around 38% of contracted sales for the same period.
As a result, its debt leverage and liquidity profile remained
healthy. Its adjusted debt/capitalization was at 53% at 30 June
2014, and its revenue/gross debt was at 84% in the same period.
These ratios are comparable to its peer, like Longfor Properties
Co., Ltd., which is rated at Ba1 with a stable outlook.
As for its cash holdings totaling RMB17.3 billion as of 30 June
2014, the amount was sufficient to fully cover its short-term debt
of RMB16.5 billion. The company's investments in short-term asset
management products -- with a maturity of no longer than three
months -- and totaling around RMB3.4 billion can be used as back-
up liquidity.
The principal methodology used in this rating was Global
Homebuilding Industry published in March 2009.
Incorporated in China, Gemdale Corporation is one of the leading
developers in China's residential property sector.
At 30 June 2014, its land bank totaled around 26 million sqm in
gross floor area.
The company was founded in 1988. At that time, it was 100%
indirectly owned by the government of Futian district, in
Shenzhen. The ownership stake has since fallen to 7.87% at 30 June
2014. Sino Life Insurance Co Ltd (unrated) is currently Gemdale's
largest shareholder, with a 27.6% stake at 30 June 2014.
HENGDELI HOLDINGS: 1H 2014 Results No Impact on Moody's Ba2 CFR
---------------------------------------------------------------
Moody's Investors Service says that Hengdeli Holdings Limited's
flat year-on-year operating profit for 1H 2014 has no immediate
impact on its Ba2 corporate family and senior unsecured bond
ratings.
The outlook on the ratings remains stable.
"Hengdeli 's stagnant earnings for 1H 2014 continued to reflect
the sluggish consumer sentiment in China's retail market, muted
spending on high-end luxury goods, and the need for the company to
offer more discounts on certain products. But, such unfavorable
operating environment had been largely factored into its Ba2
ratings," says Lina Choi, a Moody's Vice President and Senior
Analyst.
China's fine-watch market has continued to exhibit weakness, as
the government reins in lavish spending, and as the economy slows.
In response, Hengdeli has gradually adjusted its product mix in
favor of mid-end products. It has also expanded its presence in
Tier 2 and Tier 3 cities, where consumption of mid-end watches
remains resilient.
While the company's total retail revenue grew 12.4% year-on-year,
revenues from its China operations grew, as revenues in Hong Kong
contracted. Its China segment posted a 13.0% year-on-year increase
in revenue in 1H 2014, while its Hong Kong segment recorded an
11.7% fall in sales.
Similarly, Hengdeli's 19% sales growth in its mid-end products
offset the flat sales growth for its high-end offerings.
"While profitability remains subdued relative to levels seen in 1H
2013, we note that the company's margins are starting to
stabilize," adds Choi, who is also the Lead Analyst for Hengdeli.
While Hengdeli's reported EBITDA margin of 8.6% in 1H 2014 was
lower than the 10.1% in 1H 2013, the result was an improvement
from the 6.5% in 2H 2013. Moody's believes this improvement is
attributable to better operating efficiency, as well as the
company's offering of a higher proportion of wholesale and mid-end
products; segments where Hengdeli controls a larger portion of the
value chain than compared to its high-end retail products.
Moody's expects that the company will show moderate revenue growth
over the next 12-18 months, driven primarily by sales of mid-end
products in lower tier cities. Its EBITDA margin, on the other
hand, may take more time to recover to the 12%-13% levels seen in
2012.
Moody's notes that the pace of Hengdeli's store expansions has
picked up from 2013, due to the company's strategy to increase its
presence in Tier 2 and Tier 3 cities. A total of 26 new stores
were added in 1H 2014, compared to 10 for mainland China of 2013.
Most of its new stores are in China and form part of its mid-range
chain known as Prime Time.
The acceleration in Hengdeli's store expansions and its stocking
requirements have put pressure on its operating cash flow, which
was negative for the first six months of 2014. Nonetheless,
management has indicated that a characteristic of the industry is
its cash flow seasonality, as most working capital is invested in
the earlier part of the year.
Moody's expects that as Hengdeli books sales for the full year,
operating cash flow will become positive.
Moody's points out that Hengdeli has kept its leverage level
unchanged over the last 12 months, and has maintained a solid
liquidity position. Both factors support its Ba2 ratings.
Its adjusted debt/EBITDA fell to 5.0-5.2x at end-June 2014 from
5.6x at end-2013.
Given Moody's expectation that Hengdeli's adjusted EBITDA will
range from RMB1.8-RMB2.0 billion over the next 12-18 months, and
its debt will total around RMB10.6 billion over the same period,
Hengdeli's debt/EBITDA should stay around 5.0x-5.5x and its
EBITDA/interest should stay around 3.5-4x over the next 12-18
months. Such results would support its Ba2 ratings.
The company's cash position of RMB1.5 billion at end-June 2014 was
solid, as it fully covered its short-term bank loans of RMB1.3
billion. Moreover, Hengdeli maintains a good funding structure, as
more than half of its RMB4.0 billion in gross debt at 30 June 2014
-- excluding lease capitalization -- comprised long-term senior
secured notes due in 2018.
The principal methodology used in this rating was Global Retail
Industry published in June 2011.
Founded in 1997 and listed on the Hong Kong Stock Exchange in
2005, Hengdeli Holdings Limited is China's largest retailer and
distributor of luxury watches. It had 494 retail outlets across
Mainland China, Hong Kong, Macau and Taiwan at end-June 2014.
KAISA GROUP: 1H 2014 Results No Impact on Moody's Ba3 CFR
---------------------------------------------------------
Moody's Investors Service says that Kaisa Group Holdings Ltd's
moderate 1H 2014 results are largely in line with Moody's
expectations and will have no immediate impact on its Ba3
corporate family rating and senior unsecured ratings.
"Kaisa reported higher leverage in 1H14 as it continued to
replenish land bank partly funded by debt. But such increase is
largely in line with Moody's expectations." says Franco Leung, a
Moody's Vice President and Senior Analyst.
Kaisa acquired 1.7 million GFA land bank at a total cost of RMB9.0
billion in 1H 2014, compared to RMB14.1 billion for the full year
of 2013.
Moody's expects it will slow down its land acquisition in 2H
compared with 1H.
At the same time, its gross debt rose 34% to RMB29.8 billion at
end-June 2014 from RMB22.2 billion at end 2013. Its adjusted debt
to capitalization increased to 55.4% from 53.6% and its revenue to
gross debt decreased to 65% from 89% over the same period. Moody's
expects Kaisa's adjusted debt to capitalization will remain at the
current high levels over the next 6-12 months.
Nevertheless, Kaisa's operating performance remains on an
improving trend. It reported a moderate 1% year-on-year increase
in contracted sales for the first seven months of 2014. Moody's
expects Kaisa will achieve good contracted sales growth in FY2014
based on the company's project roll-out plan in 2H 2014. Also,
Kaisa is expected to achieve a modest revenue growth in FY2014
driven by its strong sales performance in 2013.
"We believe Kaisa is on track to improve its interest coverage to
at least 2.5x over the next 12 months, despite its high leverage."
adds Leung, also the Lead Analyst for Kaisa. The improvement will
be supported by the expected revenue growth, low average funding
costs and the stabilization of its gross profit margins.
Kaisa's gross profit margin rose to 35.1% on a twelve months
rolling basis from 33.8% in FY2013. Moody's expects Kaisa to
sustain its margins above 30% over the next 12-18 months, as a
portion of its sales will continue to be from its redevelopment
projects in higher tier cities, which command higher profit
margins.
Kaisa's interest coverage -- as measured by adjusted
EBITDA/interest -- was 2.4x for the twelve-month period ended June
2014 from 2.3x in FY2013.
Kaisa continued to maintain a good liquidity profile. Its
cash/short-term debt was at 1.8x at end-June 2014, versus 2.2x at
end-2013, positioning it appropriately at its Ba3 ratings level.
The company has been proactive in liquidity management. In January
and June 2014, it issued senior notes totaling USD650 million for
the purpose of refinancing and liquidity management.
Kaisa's Ba3 corporate family rating continues to reflect its track
record of developing property projects in major Chinese cities
such as Shenzhen. The rating also takes into account Kaisa's
ability to purchase land at a competitive cost for redevelopment
projects in its home base of Guangdong Province. In addition, its
presence in cities beyond its home market is developing.
The principal methodology used in this rating was Global
Homebuilding Industry published in March 2009.
Kaisa Group Holdings Ltd is a Shenzhen-based property developer
established in 1999 and listed on the Hong Kong Stock Exchange in
December 2009.
At end-June 2014, the company was 61.2% owned by Mr. Kwok Ying
Shing and his family members.
Kaisa's land bank totaled around 23.6 million square meters in
gross floor area at end-June 2014. Its land holdings were located
in the Pearl River and Yangtze River deltas, Pan-Bohai Rim, and
central and western China.
WEST CHINA: 1H 2014 Results No Impact on B1 CFR, Moody's Says
-------------------------------------------------------------
Moody's Investors Service says that West China Cement Limited's
(WCC) 1H 2014 results are in line with Moody's expectations. As a
result, WCC's B1 corporate family and senior unsecured ratings
remain unchanged.
"WCC improved its profitability and financial leverage in 1H 2014,
despite a moderation in revenue growth, due to slowing cement
demand," says Jiming Zou, a Moody's Assistant Vice President and
Analyst.
During 1H 2014, WCC achieved a 1.5% year-on-year growth in sales,
which was down from the 18.3% growth recorded in 2013. Its 2.6%
year-on-year sales price increase -- which was supported by WCC's
strong market position in southern Shaanxi -- offset a 0.2%
contraction in sales volume.
Despite the company's lower revenue growth, its reported EBITDA
margin improved to 31.8% in 1H 2014 from 28.9% a year ago, owing
to sales price increase, lower coal prices and electricity costs.
Its higher earnings and lower debt levels in 1H 2014, resulted in
an adjusted debt/EBITDA of about 3.2x for the 12 months to 30 June
2014 down from 3.4x in 2013. This level of leverage solidly
positions the company in the B1 rating category.
"We expect WCC's financial leverage to continue improving over the
next 12-18 months, given its ability to generate free cash flow
and lower capital expenditure requirements," adds Zou.
As seen by its results for 1H 2014, WCC has entered into a slow
growth period, after more than doubling its capacity over the last
3-4 years, as cement demand has slowed. In addition, the
government has suspended approvals for new cement plants, and the
company management has adopted a more prudent approach towards
business expansion, against the backdrop of slowing demand.
WCC's Xinjiang Yili and Guiyang Huaxi cement plants are scheduled
to be completed in 2H 2014. The company currently has no other new
construction projects. Its committed capital expenditure fell to
about RMB322 million at end-June 2014 from RMB586 million at end-
2013.
On the other hand, the company's revenues and earnings will grow
modestly, as newly commissioned plants start contributing to its
overall performance. The two new facilities in Xinjiang Yili and
Guiyang Huaxi will have annual production capacities of 1.5
million tonnes and 1.8 million tonnes respectively, and will
increase WCC's production capacity to 27 million tonnes by end-
2014.
Given the additional capacity, Moody's expects the company to
generate RMB200-RMB300 million in free cash flow annually for 2014
and 2015. In 1H 2014, its net debt fell by about RMB100 million to
RMB3.3 billion.
The company's liquidity profile is adequate. Moody's expects its
free cash flow and unrestricted cash of RMB615 million at end-June
2014 to be sufficient to cover its short term debt of RMB740
million.
YINGDE GASES: Moody's Assigns Ba3 Rating to Proposed USD Notes
--------------------------------------------------------------
Moody's Investors Service, has assigned a Ba3 senior unsecured
rating to the proposed USD notes to be issued by Yingde Gases
Investment Limited and guaranteed by Yingde Gases Group Company
Limited.
The ratings outlook is stable.
The proceeds from the notes issuance will be used for refinancing
the company's onshore debt, funding its capital expenditure
(capex) and working capital needs, as well as for general
corporate purposes.
Ratings Rationale
"Yingde Gases Group Company Limited' Ba2 corporate family rating
mainly reflects its leading position in the independent on-site
industrial gas market in China, good prospects for demand growth,
and its stable operations stemming from the predominance of long-
term take-or-pay contracts with its on-site customers," says
Gerwin Ho, a Moody's Vice President and Senior Analyst.
"Furthermore, the proposed debt issuance will have a limited
impact on Yingde Gases' credit metrics as an increase in earnings
will mitigate the increase in debt. This transaction will also
enhance Yingde Gases' liquidity," says Zou.
"On the other hand, the Ba2 corporate family rating is constrained
by its moderate financial profile, its large exposure to the steel
industry and its high customer concentration."
According to the company's announcement, Yingde Gases' operating
performance in 1H 2014 remained robust and was in line with
Moody's expectation.
Its reported EBITDA grew 21% year-on-year on the back of a 16%
year-on-year growth in revenue and a reduction in selling, general
and administrative expenses.
Moody's expects Yingde Gases to maintain solid performance over
the next 1-2 years on the back of a production ramp up at its
newly commissioned facilities.
Yingde Gases' USD notes are rated one-notch below its corporate
family rating. Moody's believes the notes are structural
subordinated to the company's onshore debt, which accounted for
about 30% of total consolidated assets at end-2013 and is expected
to remain significant to fund the construction of its gas supply
facilities. This situation lowers the expected recovery level for
such bondholders in the event of a default.
The stable ratings outlook reflects the sustainable character of
the company's gross cash flow through the cycle and an expectation
that its debt leverage will remain stable over the next 12 months.
Upward rating pressure is limited at this stage, given the
company's moderately high debt leverage and continued large capex
against the backdrop of its relatively small and concentrated
business profile.
Yingde Gases' ratings could be upgraded in the longer term if the
company: (1) improves its business scale and customer
diversification, (2) enhances debt/EBITDA below 3.0x; and (3)
maintains retained cash flow (RCF)/net debt above 30% on a
sustained basis.
On the other hand, Yingde Gases could experience downward rating
pressure if it: (1) further increases debt leverage through
aggressive expansion, such that debt/EBITDA is above 4.5x, or; (2)
experiences an unexpected deterioration in its cash flow
generation, such that RCF/net debt is below 12%-15%.
The principal methodology used in this rating was Global Chemical
Industry Rating Methodology published in December 2013.
Yingde Gases Group Company Limited is one of the largest players
in the independent on-site industrial gas market in China. The
company reported revenue of RMB6.87 billion in 2013. It had a
total of 57 production facilities in operation and another 31
under development at end-2013. On-site gas production accounted
for about 80%-90% of Yingde Gases' revenues, with the rest coming
from merchant sales.
=========
I N D I A
=========
ALCHEMIST FOODS: CRISIL Reaffirms B+ Rating on INR177.9MM Loan
--------------------------------------------------------------
CRISIL's ratings on the bank facilities of Alchemist Foods Ltd
(AFL; part of the Alchemist group) continue to reflect the
continuous decline in the Alchemist group's operating
profitability, its large working capital requirements, and its
high gearing.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 50 CRISIL B+/Stable (Reaffirmed)
Letter of Credit 2.5 CRISIL A4 (Reaffirmed)
Proposed Long Term 92.1 CRISIL B+/Stable(Reaffirmed)
Bank Loan Facility
Term Loan 177.9 CRISIL B+/Stable (Reaffirmed)
These rating weaknesses are partially offset by the group's long
track record in the food-processing and pharmaceutical industries
with an established clientele, and its healthy debt protection
metrics.
For arriving at the ratings, CRISIL has combined the business and
financial risk profiles of Alchemist Ltd (AL) with its
subsidiaries AFL, Alchemist Enterprise (S) Pte Ltd, Alchemist
Hospitality Group Ltd, and Alchemist Infrastructures Pvt Ltd,
together referred to as the Alchemist group. This is because these
subsidiaries are wholly owned by AL, and all the companies are
under a common management.
Outlook: Stable
CRISIL believes that the Alchemist group will continue to benefit
over the medium term from its long track record in the
pharmaceutical and food-processing industries and its well-
diversified operations. The outlook may be revised to 'Positive'
if the group generates higher-than-expected cash accruals, backed
by a significant improvement in its operating margin while
sustaining its revenue growth and improving its working capital
management. Conversely, the outlook may be revised to 'Negative'
in case of lower-than-expected revenue, a further decline in the
group's operating margin, or further weakening of its capital
structure, most likely on account of large debt-funded capital
expenditure. The ratings are also sensitive to the continued
financial support to the Alchemist group from the promoters' other
group entities.
AL was initially established as a private limited company in 1988
by Dr. K D Singh under the name, Turbo Industries Pvt Ltd (TIPL).
TIPL was reconstituted as a public limited company with the
current name when it came out with its initial public offering in
1994. AL has grown into a diversified corporation with operations
in chemical trading, pharmaceuticals, food-processing,
floriculture, and steel.
AFL, a wholly owned subsidiary of AL, was hived off from AL in
2009. AFL is a farm-to-fork company engaged in poultry breeding
and hatching, and sale of raw and value-added meat products
through its retail chain, Republic of Chicken. AFL's portfolio
includes whole birds, eggs, chicken cuts, boneless breasts,
boneless leg meat, sausages and other cold cuts, and ready-to-eat
poultry products.
ALCHEMIST LTD: CRISIL Reaffirms B+ Rating on INR212.3MM Term Loan
-----------------------------------------------------------------
CRISIL's ratings on the bank facilities of Alchemist Ltd (AL; part
of the Alchemist group) continue to reflect the continuous decline
in the Alchemist group's operating profitability, its large
working capital requirements, and its high gearing. These rating
weaknesses are partially offset by the group's long track record
in the food-processing and pharmaceutical industries with an
established clientele, and its healthy debt protection metrics.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 59 CRISIL B+/Stable (Reaffirmed)
Letter of Credit 20 CRISIL A4 (Reaffirmed)
Proposed Long Term
Bank Loan Facility 33.7 CRISIL B+/Stable (Reaffirmed)
Term Loan 212.3 CRISIL B+/Stable (Reaffirmed)
For arriving at the ratings, CRISIL has combined the business and
financial risk profiles of AL and its subsidiaries, Alchemist
Foods Ltd (AFL), Alchemist Enterprise (S) Pte Ltd (AESPL),
Alchemist Hospitality Group Ltd (AHGL), and Alchemist
Infrastructures Pvt Ltd (AIPL), together referred to as the
Alchemist group. This is because these subsidiaries are wholly
owned by AL, and all the companies are under a common management.
Outlook: Stable
CRISIL believes that the Alchemist group will continue to benefit
over the medium term from its long track record in the
pharmaceutical and food-processing industries and its well-
diversified operations. The outlook may be revised to 'Positive'
if the group generates higher-than-expected cash accruals, backed
by a significant improvement in its operating margin while
sustaining its revenue growth and improving its working capital
management. Conversely, the outlook may be revised to 'Negative'
in case of lower-than-expected revenue, a further decline in the
group's operating margin, or further weakening of its capital
structure, most likely on account of large debt-funded capital
expenditure. The ratings are also sensitive to the continued
financial support to the Alchemist group from the promoters' other
group entities.
AL was initially established as a private limited company in 1988
by Dr. K D Singh under the name, Turbo Industries Pvt Ltd (TIPL).
TIPL was reconstituted as a public limited company with the
current name when it came out with its initial public offering in
1994. AL has grown into a diversified corporation with operations
in chemical trading, pharmaceuticals, food-processing,
floriculture, and steel.
AFL, a wholly owned subsidiary of AL, was hived off from AL in
2009. AFL is a farm-to-fork company engaged in poultry breeding
and hatching, and sale of raw and value-added meat products
through its retail chain, Republic of Chicken. AFL's portfolio
includes whole birds, eggs, chicken cuts, boneless breasts,
boneless leg meat, sausages and other cold cuts, and ready-to-eat
poultry products.
BHARAT INDUSTRIES: CRISIL Assigns B+ Rating to INR18MM Term Loan
----------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to
the bank facilities of BHARAT Industries (BI). The ratings reflect
BI's below average financial risk profile, and small and working
capital intensive nature of operations. These rating weaknesses
are partially offset by BI's partner's extensive experience in the
industry.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 18 CRISIL B+/Stable
Cash Credit 15 CRISIL B+/Stable
Packing Credit in
Foreign Currency 44.5 CRISIL A4
Outlook: Stable
CRISIL believes that BI will benefit from its partners' extensive
industry experience, over the medium term. The outlook may be
revised to 'Positive' in case the firm significantly improves its
scale of operations and profitability resulting in improvement in
its financial risk profile. Conversely, the outlook may be revised
to 'Negative' if its liquidity deteriorates due to larger-than-
expected working capital requirements or if the firm generates
significantly lower-than-expected cash accruals.
BI is a partnership firm set up in 2010-11 (refers to financial
year, April 1 to March 31) by Mr. Abhishek Jain and Misses Richa
Jain. The firm manufactures diesel engines, pump sets, and
generator sets. The firm is based out of Agra, Uttar Pradesh.
C P ISPAT: CRISIL Assigns 'D' Rating to INR120MM Cash Credit
------------------------------------------------------------
CRISIL has assigned its 'CRISIL D/CRISIL D' ratings to the bank
facilities of C P Ispat Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 78 CRISIL D
Bank Guarantee 2 CRISIL D
Cash Credit 120 CRISIL D
The ratings reflect delays by CPIPL in servicing its term debt and
continuous over-utilisation of its cash credit limit for more than
30 days. These delays have been caused by the company's weak
liquidity.
CPIPL has a small scale of operations in the fragmented iron and
steel industry, and its profitability is vulnerable to
fluctuations in raw material prices. However, the company benefits
from the extensive experience of its current management in the
iron and steel industry.
CPIPL, incorporated in 2006, manufactures sponge iron. The company
commenced commercial production in July 2009 at its manufacturing
facility in Durgapur (West Bengal). CPIPL was promoted by the
Kolkata (West Bengal)-based Chawla family and was earlier managed
by Mr. Amarjeet Chawla. However, in September 2013, the Chawla
family leased out the plant to the Durgapur-based Jayshree group
owned by Mr. Amit Agarwal and his family. Since September 15,
2013, the day to day operations of the plant have been looked
after by the Jayshree group. In February 2014, the Jayshree group
entered into an agreement with the Chawla family to purchase CPIPL
with effect from April 2014.
DIPESH ENGINEERING: CRISIL Ups Rating on INR30M Cash Credit to B+
-----------------------------------------------------------------
CRISIL has upgraded its rating on the long-term bank facilities of
Dipesh Engineering Works (DEW; part of the Dipesh group) to
'CRISIL B+/Stable' from 'CRISIL B-/Stable', and has reaffirmed its
rating on the firm's short-term bank facilities at 'CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 90 CRISIL A4 (Reaffirmed)
Cash Credit 30 CRISIL B+/Stable (Upgraded
from 'CRISIL B-/Stable')
Rupee Term Loan 5 CRISIL B+/Stable (Upgraded
from 'CRISIL B-/Stable')
The rating upgrade reflects improvement in the Dipesh group's
business risk profile with significant improvement in revenue and
moderate profitability, which led to improvement in cash accruals
from operations. As a result, the group's financial risk profile
improved, especially its liquidity, as indicated by moderate
utilisation of working capital limits.
The ratings continue to reflect the Dipesh group's average
financial risk profile marked by small net worth and weak debt
protection metrics, its working-capital-intensive operations, and
susceptibility to volatility in raw material prices. These rating
weaknesses are partially offset by the extensive industry
experience of the Dipesh group's promoter and its established
clientele.
For arriving at the ratings, CRISIL has combined the business and
financial risk profiles of DEW and Unique Chemoplant Equipments
(UCE), together referred to as the Dipesh group. Both the entities
are engaged in the same line of business, have significant
operational and financial linkages, and are under common
management.
Outlook: Stable
CRISIL believes that the Dipesh group will benefit over the medium
term from its promoter's extensive industry experience and its
established relationship with customers. The outlook may be
revised to 'Positive' if the group scales up operations while
improving its margins significantly, leading to substantial cash
accruals and improvement in capital structure, or in case of a
significant improvement in the group's working capital management.
Conversely, the outlook may be revised to 'Negative' in case of
slowdown in inflow of orders, or decline in profitability margins,
or large debt-funded capital expenditure, or large capital
withdrawals by the promoter, weakening the group's capital
structure.
DEW was set up in 1979 by Mr. Jayantibhai Patel and another
partner as a partnership firm and was reconstituted as a
proprietorship firm with Mrs. Savitaben J. Patel, wife of Shri
Jayantibhai B. Patel as proprietor. DEW manufactures machinery
and equipment used in the chemical, petrochemical, pharmaceutical,
pesticide, refinery, dye, and dye intermediates industries.
UCE was set up in 1995 as a proprietorship firm by Mr. Ketan
Patel. It also manufactures machinery and equipment used in
chemical, petrochemical, pharmaceutical, pesticide, refineries,
dye, and dye intermediates industries. UCE's manufacturing unit is
in Ambarnath (Maharashtra).
FITEX INDUSTRIES: CRISIL Reaffirms B INR160MM Cash Credit Rating
----------------------------------------------------------------
CRISIL's ratings on the bank facilities of Fitex Industries Ltd
(FIL) continues to reflect FIL's weak debt protection metrics,
large working capital requirements, and small and stagnant scale
of operations in the fragmented automotive (auto) components
industry. These rating weaknesses are partially offset by the
extensive industry experience of the company's promoters.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 160 CRISIL B/Stable (Reaffirmed)
Letter of Credit 70 CRISIL A4 (Reaffirmed)
Proposed Long Term
Bank Loan Facility 10 CRISIL B/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that FIL will maintain its business risk profile
over the medium term, supported by its established market position
and its promoters' extensive industry experience. The outlook may
be revised to 'Positive' if the company's liquidity improves, most
likely because of more-than-expected increase in its operating
income and profitability leading to higher net cash accruals.
Conversely, the outlook may be revised to 'Negative' if FIL's
scale of operations and profitability decline, resulting in lower
cash accruals and hence to weakening of its already strained
liquidity.
FIL (formerly, Fitex Manufacturing Engineers Pvt Ltd) was
incorporated in 1981, promotedby Mr. Sital Prakash Gupta. The
company manufactures and exports auto components, stamping
(suspension) components, fence decorative parts (sheet metal
components), hand tools, industrial fasteners, auto parts,
scaffolding, and hardware items.
FIL reported a profit after tax (PAT) of INR6.6 million on net
sales of INR711 million for 2012-13 (refers to financial year,
April 1 to March 31), as against a PAT of INR6.6 million on net
sales of INR655.6 million for 2011-12.
HYSON LOGISTICS: CRISIL Puts B Rating on INR90MM Cash Term Loan
---------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable/CRISIL A4' ratings to the
bank facilities of Hyson Logistics & Marine Exports Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term
Bank Loan Facility 4.3 CRISIL B/Stable
Export Packing Credit 30 CRISIL B/Stable
Bank Guarantee 5.7 CRISIL A4
Cash Term Loan 90 CRISIL B/Stable
The ratings reflect HMEPL's nascent stage of operations in the
intensely competitive and cyclical seafood exports industry, and
its weak capital structure. These rating weaknesses are partially
offset by the extensive entrepreneurial experience of the
company's promoter.
Outlook: Stable
CRISIL believes that HMEPL will continue to benefit over the
medium term from the extensive entrepreneurial experience of its
promoter. The outlook may be revised to 'Positive' if the company
substantially improves its scale of operations and operating
profitability on a sustained basis, leading to a better financial
risk profile. Conversely, the outlook may be revised to 'Negative'
if HMEPL's operations are adversely impacted by disease outbreak
in shrimps or changes in government regulations on shrimp exports,
or if it undertakes a substantial debt-funded capital expenditure
programme, leading to deterioration in its financial risk profile.
HMEPL, established in 2010, is engaged in the processing and
export of shrimps. Its day-to-day operations are managed by Mr.
P.K. Johnson.
JAI GIRIRAJ: ICRA Assigns B+ Rating to INR10cr Fund Based Limits
----------------------------------------------------------------
ICRA has assigned the rating of [ICRA]B+ on the long term scale to
the INR8.67 crore term loan and INR10.00 crore fund based bank
facilities of Jai Giriraj Rice and Agro Mills Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based Limits 10.00 [ICRA]B+ assigned
Term Loan 8.67 [ICRA]B+ assigned
The assigned rating takes into consideration JGRAMPL's limited
track record of operations with commercial operation of its
facility commencing in March 2014,its working capital intensive
nature of operations, and its stretched capital structure owing to
debt-funded capex to set up its 8 tons per hour rice milling unit.
The rating also factors in the intensely competitive nature of
industry which exerts pressure on operating margins and
vulnerability of profitability to any adverse change in Government
policies towards agro based commodities like rice. The rating,
however, derives comfort from the favourable long term demand
prospects of the rice industry with India being the second largest
producer and consumer of rice in the world, JGRAMPL's presence in
a rice cultivation area which results in easy access to paddy and
track record of promoters in the rice trading business.
JGRAMPL is based out of Bankhedi, Madhya Prades and is engaged in
the milling and processing of rice with an installed capacity of 8
tons per hour. The commercial operation of the facility stated in
March, 2014. In January 2013, the constitution of the company was
changed to private limited, and its name was changed from
'Shrinath Agrotech' to 'Jai Giriraj Rice And Agro Mills Private
Limited'. JRAMPL is a part of the Maheshwari group of companies,
which was incorporated in 1977 and includes Shri Nath Traders and
Shri Ji Traders, which are engaged in trading of wheat and other
agricultural commodities, and four sugar mills viz. Shakti Sugar
Mill, Narmada Sugars, Ramdev Sugars and Shrijee Sugar & Power with
a combined crushing capacity of 8000 tcd.
JET AIRWAYS: ICRA Cuts Rating on INR2,460cr Term Loan to 'D'
------------------------------------------------------------
ICRA has revised the rating assigned to the INR3,210.0 crore,
long-term, fund-based bank facilities of Jet Airways (India)
Limited to [ICRA]D from [ICRA]BB. ICRA has also revised the rating
assigned to the INR4,250.0 crore, short-term, fund-based/ non-fund
based bank facilities of Jet Airways to [ICRA]D from [ICRA]A4.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term, term 2,460.0 Revised to [ICRA]D
loans from [ICRA]BB (stable)
Long-term, fund- 750.0 Revised to [ICRA]D
based limits from [ICRA]BB (stable)
Short-term, fund- 1,920.0 Revised to [ICRA]D
based limits from [ICRA]A4
Short-term, non- 2,330.0 Revised to [ICRA]D
fund based limits from [ICRA]A4
The ratings revision reflects delays in debt servicing by the
company.
Incorporated in 1992 as a private limited company, Jet Airways
commenced operations as an Air Taxi Operator in 1993 with a fleet
of four leased Boeing 737 aircraft. The company was granted
scheduled airline status in January 1995. Jet Airways was founded
by Mr. Naresh Goyal and is presently 50% owned by him, with 24%
stake held by Etihad Airways post infusion of INR2,058 crore in
November 2013.
Jet Airways (along with Jet Lite India Limited - its wholly-owned
subsidiary) currently provides scheduled services to around 56
destinations in India and 20 international destinations. The
company's fleet stands at 113 aircraft as on March 2014.
Recent Results
For the twelve months ended March 31, 2014, Jet Airways
(standalone) reported a net loss of INR3,667.97 crore on an
operating income of INR17,214.63 crore as against a net loss of
INR485.50 crore on an operating income of INR16,789.92 crore for
the twelve months ended March 31, 2013.
K. VENKATA: ICRA Reaffirms 'B+' Rating on INR5.5cr Cash Credit
--------------------------------------------------------------
ICRA has reaffirmed the long term rating of [ICRA]B+ assigned to
INR5.50 crore fund based limits and short term rating of [ICRA]A4
assigned to INR0.25 crore fund based limits of K. Venkata Ramana
Murthy & Others.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 5.50 [ICRA]B+ reaffirmed
SME Credit 0.25 [ICRA]A4 reaffirmed
The reaffirmation of ratings factors in the intensely competitive
nature of rice industry in Andhra Pradesh with presence of several
small-scale players which increases pressure on the operating
margins. Further, the ratings continue to be constrained by the
financial profile of the firm characterized by high gearing and
low profitability levels; and risks inherent to a partnership
firm. This apart, the ratings are also constrained by the
susceptibility of profitability & revenues to agro-climatic risks
which impact the availability of paddy in adverse weather
conditions. The ratings, however, take comfort from the long track
record of the promoters in the rice mill business, healthy growth
in revenues in FY2014 on account of increase in volume of sales
coupled with improved price realizations, presence of the rice
mill unit in a major rice producing area which eases procurement
of paddy and favorable demand prospects for rice with India being
the second largest producer and consumer of rice internationally.
Going forward, the ability of the firm to strengthen its financial
profile by improving its profitability and efficiently managing
its working capital requirements remains the key rating
sensitivity.
Founded in the year 1985 as a partnership firm, K.Venkata Ramana
Murthy & Others (KVRMO) is engaged in the milling of paddy and
produces raw rice. KVRMO has taken "Sri Ratna Rice Mill" on lease
in the year 1985 and pays a lease rental of INR3.00 lakh per annum
(revised from INR1.50 lakh per annum in April 2013). The lease
term is renewed for every 5 years. The rice mill is located at
Pithapuram village of East Godavari district, Andhra Pradesh. The
installed production capacity of the rice mill is 8 tons per hour
which was increased from 3.5 tons per hour in February 2013.
Recent Results
For FY2014, the firm reported profit after tax of INR0.06 crore on
operating income of INR27.29 crore as against profit after tax of
INR0.05 crore on operating income of INR21.92 crore in FY2013.
MILAN INFRA: CRISIL Reaffirms 'B+' Rating on INR80MM Term Loan
--------------------------------------------------------------
CRISIL's rating on the long-term bank facilities of Milan
Infrastructures and Developers Pvt Ltd (MIDPL) continues to
reflect MIDPL's exposure to project implementation and offtake
risks, and to the risks and cyclicality inherent in the Indian
real estate industry. These rating weaknesses are partially offset
by the extensive industry experience of the company's promoters.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 80 CRISIL B+/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that MIDPL will continue to benefit over the
medium term from the extensive industry experience of its
promoters. The outlook may be revised to 'Positive' in case of
better-than-expected booking and receipt of customer advances,
leading to a substantial increase in the company's cash inflows.
Conversely, the outlook may be revised to 'Negative' in case of
significant deterioration in MIDPL's liquidity, most likely due to
delays in project completion or in receipt of customer advances,
or due to simultaneous work on several projects.
MIDPL, set up in 2006, is engaged in development of various
residential and commercial projects, mainly in and around
Ghaziabad (Uttar Pradesh). The company, based in Uttar Pradesh, is
promoted by Mr. Navin Tyagi and Mr. Amit Mahajan. At present, it
is undertaking a residential-cum-commercial project at Rajnagar
extension, Ghaziabad.
NATIONAL SPOT: Bombay HC Grants Bail to Promoter in Exchange Scam
-----------------------------------------------------------------
The Times of India reports that the Bombay high court on
August 22 granted bail of INR5 lakh to MCX promoter Jignesh Shah
arrested on May 7 in the INR5,000 crore National Spot Exchange
Ltd, a commodities exchange scam. Justice Abhay Thipsay who
released Shah on bail held that his custody was not essential for
further investigation now, the report says.
TOI relates that Shah has been charged with criminal
misappropriation, forgery, criminal conspiracy and under the MPID
Act for "duping investors." According to the report, the judge
who had reserved the matter for order after hearing Shah's lawyers
Mahesh Jethmalani and Amit Naik had waited for the 9,300-page
chargesheet to be filed by the EOW as it was nearly 90 days when
the bail plea was heard.
On August 22, his other lawyer Aniket Nikam said Shah's health had
deteriorated in jail as he developed a spinal problem. He sought
cash bail to secure an immediate release. The judge however said
he should within two weeks furnish two sureities of INR5 lakh
each. The HC did not accept Shah's claim that he was unaware of
the fraudulent transactions at NSEL, the report notes.
However, Justice Thipsay also did not spare the investors who he
said are "now crying foul, were not aware of the fact that their
transactions were not genuine," TOI relays. "The persons whose
money was lost are apparently not genuine traders for whom NSEL
was supposed to provide a platform," the HC said and added, that
the "so-called buyers who now choose to describe themselves as
investors" knew that the transactions were not genuine." ". . . it
was only an investment yielding high returns for their money.
These investors are not middle class or lower class people, but
are themselves businessmen. Transactions were through brokers who
know the commercial market," Justice Thipsay, as cited by TOI,
said.
The HC said the EOW's case earlier was that co-accused Anjani
Sinha, the CEO of NSEL had taken entire responsibility of the
wrongs upon him. The agency didn't find it "necessary" to arrest
Shah then and in fact went ahead and filed a chargesheet against
those already arrested and attached Shah's property, the judge
said, the report adds.
SAVANI EXPORTS: ICRA Revises Rating on INR7.0cr Cash Credit to B+
-----------------------------------------------------------------
ICRA has upgraded the long term rating assigned to the INR7.00
crore cash credit facility of Savani Exports from [ICRA]B to
[ICRA]B+. ICRA has reaffirmed the rating of [ICRA]A4 assigned to
the INR3.00 crore short term fund based facility of SE.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit facility 7.00 Revised to [ICRA]B+
from [ICRA]B Short
Term Fund Based
Facility-Warehouse
receipt financing 3.00 [ICRA]A4 reaffirmed
The rating upgrade factors in the growth in operating income
during FY14 due to higher sales volumes supported by increase in
output of cotton in the region. The rating also draws comfort from
the longstanding experience of the partners in the cotton industry
and the favourable location of the firm giving it easy access to
high quality raw cotton. However, rating concerns emanate from
SE's small scale of operations; its low profitability due to the
limited value addition nature of operations and intense
competition on account of fragmented industry structure; and the
firm's weak coverage indicators. The ratings further take into
account the firm's exposure to commodity price volatility, agro-
climatic conditions and relevant import/export-related government
regulations. ICRA also notes that SE is a partnership firm and any
significant withdrawals from the capital account could adversely
impact its net worth and thereby its credit profile.
Savani Exports (SE) was set up in the year 2004 as a partnership
firm by the Savani family. The firm is engaged in cotton ginning
and cottonseed crushing from its facility located at Manavadar, in
the Junagadh district in Gujarat. The firm has 36 ginning machines
and 5 crushing machines with a production capacity of ~18 MT of
cotton bales per day. The partners of the firm have more than two
decades of experience in the cotton industry.
SHIKARPUR: ICRA Keeps B- INR5.06cr Tea Hypothecation Loan Rating
----------------------------------------------------------------
ICRA has reaffirmed the long term rating of [ICRA]B- to the
INR5.06 crore tea hypothecation limit (enhanced from INR4.20
crore), the INR2.52 crore term loan (enhanced from INR1.80 crore)
and the INR0.25 crore bank guarantee of Shikarpur & Bhandapur Tea
Estates Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Tea Hypothecation Limits 5.06 [ICRA]B- reaffirmed
Term Loan 2.52 [ICRA]B- reaffirmed
Bank Guarantee 0.25 [ICRA]B- reaffirmed
The reaffirmation of rating factors in the small scale of current
operations, notwithstanding the marginal increase in turnover in
FY14, and the negative tangible net worth of the company. While
reaffirming the rating, ICRA has drawn some comfort from the fact
that the interest free unsecured loans from the promoters of
INR6.50 crores, which as per agreement with banks cannot be
withdrawn without their prior consent. The rating continues to
take into account the concentration of both the gardens of the
company in the Dooars region that accentuates the agro climatic
risks associated with tea and the inherent cyclicality in the tea
industry that leads to variability in profitability and cash flows
of players including SBTEPL. While reaffirming the rating, ICRA
has also taken note of the experience of the promoters in the tea
industry, the favourable outlook of the domestic bulk tea industry
at least over the short to medium term, and the likely firming of
tea prices due to the expected shortfall in domestic tea
production during CY14.
SBTEPL was acquired by the present management in 2011 from the
erstwhile promoters. SBTEPL has two tea gardens in the Dooars
region of North-East India, with a total area of around 755
hectares, of which currently around 550 hecatres is under
plantation. The total production capacity of SBTEPL is around 20
lakh kg of tea.
Recent Results
As per provisional results, in FY14 the company registered a
profit after tax of INR0.08 crore on the back of OI of INR13.00
crore. In FY13, SBTEPL registered a profit after tax of INR0.04
crore on the back of OI of INR10.08 crore.
SHIRIDI SAINADH: ICRA Puts B+ Rating on INR8.80cr Fund Based Loan
-----------------------------------------------------------------
ICRA has assigned the long term rating of [ICRA]B+ to INR8.80
crore fund based limits and INR0.20 crore unallocated limits of
Shiridi Sainadh Industries.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based Limits 8.80 [ICRA]B+ assigned
Unallocated 0.20 [ICRA]B+ assigned
The assigned rating is constrained by the intensely competitive
nature of rice industry in Andhra Pradesh with presence of several
small-scale players which increases pressure on the operating
margins; and government policy restrictions in the segment which
limit sales in the open market. Further, the rating is constrained
by the weak financial profile of the firm characterized by high
gearing levels and low profitability; and risks arising out of
partnership nature of the firm. This apart, the rating is also
constrained by the susceptibility of profitability & revenues to
agro-climatic risks which impact the availability of paddy in
adverse weather conditions. The rating, however, takes comfort
from the long track record of the promoters in the rice mill
business, presence of the firm in major rice growing area which
eases raw material procurement and favourable demand prospects for
rice with India being the second largest producer and consumer of
rice internationally.
Going forward, the ability of the firm to improve its
profitability levels and efficiently manage its working capital
requirements remains the key rating sensitivity.
Founded in the year 2007 as a partnership firm, Shiridi Sainadh
Industries (SSI) is engaged in milling of paddy and produces raw
rice and boiled rice. The rice mill is located at Varadarajapuram
village of West Godavari district, Andhra Pradesh. The installed
production capacity of the rice mill is 8 tons per hour.
Recent Results
For FY2014 (Unaudited & Provisional), the firm reported profit
after tax of INR0.02 crore on an operating income of INR27.21
crore as against profit after tax of INR0.02 crore on an operating
income of INR27.35 crore in FY2013 (audited).
SHREE BALAJI: ICRA Assigns B Rating to INR7.99cr Fund Based Loan
----------------------------------------------------------------
ICRA has assigned [ICRA]B rating to the INR7.99 crores long term
fund based limits and INR2.49 crores unallocated fund based limits
of Shree Balaji Ice and Cold Storage.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based limits 7.99 [ICRA]B; assigned
Unallocated fund 2.49 [ICRA]B; assigned
based limits
The rating is constrained by highly competitive nature of the cold
storage industry with numerous unorganized players and the weak
financial profile of SBICS characterised by modest scale of
operations, low cash accruals, high gearing and average debt
coverage indicators. The rating also factors in the vulnerability
of company's profitability to significant fall in potato prices
and possible inventory loss in case the market prices of potatoes
are lower than the collateral value. The rating also takes into
account the risks associated with partnership form of business in
terms of continuity and capital withdrawals. However, the rating
takes comfort from the long track record of promoters in cold
storage business and location advantage as the firm's storage
facility is located in proximity to potato growers. Going forward,
ability of the firm to increase its scale of operations in a
profitable manner while maintaining working capital intensity will
be key rating sensitivities.
Incorporated in 2008, Shree Balaji Ice and Cold Storage(SBICS) is
engaged in providing cold storage facility to potato manufacturers
on a rental basis. The firm has a cold storage facility located at
Sasni, Uttar Pradesh and has a capacity to store about 19601 MT of
potatoes.
The firm reported a net profit of INR0.08 crores on an operating
income of INR3.28 crores in FY14 (provisional results) as against
net profit of INR0.02 crores on an operating income of INR2.41
crores in FY13.
SHRIJEE SUGAR: ICRA Assigns 'B+' Rating to INR19.24cr Term Loan
---------------------------------------------------------------
ICRA has assigned the rating of [ICRA]B+ on the long term scale to
the INR19.24 crore term loan and INR10.00 crore fund based bank
facilities of Shrijee Sugar and Power Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based Limits 10.00 [ICRA]B+ assigned
Term Loan 19.24 [ICRA]B+ assigned
The assigned rating is constrained by the modest operating profile
of the company characterized by relatively small crushing capacity
and lack of forward integration into distilleries and cogeneration
which makes the company's performance more vulnerable to vagaries
of the sugar cycle. The rating also factors in the vulnerability
of the company's sugar business to agro-climatic risks affecting
availability of sugarcane, inherent cyclicality in the sugar
business and government/regulatory policies governing cane
pricing, sugar release and pricing and off-take of by-products.
The assigned rating also factors in the relatively short track
record of operations of the company with its 1500 tcd crushing
capacity commissioned in November 2012. Further, ICRA takes into
consideration the company's substantial interest cost and debt
repayment obligations going forward (on account of significant
term loan undertaken to fund the sugar mill), and its leveraged
capital structure as reflected in a high gearing of 3.40 times as
on March 31st, 2013. Nevertheless, the assigned rating derives
comfort from the long standing presence of SSPPL's promoters in
the sugar industry in Madhya Pradesh and linkage between sugar
price and cane cost by virtue of being located in an FRP state.
ICRA also derives comfort from the substantial increase in cane
crushing volumes in SY 2014, and the (excise duty) loans of
INR1.40 crore sanctioned to the company with interest rate
subvention of 12%, which were announced by the central government.
Shrijee Sugar and Power Private Limited (SSPPL) was incorporated
in 2011 and commenced operations of its 1500 tcd sugar mill in
November 2012. The sugar mill also has a 2.5 MW captive power
generation capacity which is fuelled using bagasse generated in
the sugar production. The company is one of the four sugar mills
belonging to the Maheshwari Group of companies based in Madhya
Pradesh, namely Ramdev Sugars Pvt. Ltd, Narmada Sugars Pvt. Ltd,
Shakti Sugar Mill Pvt. Ltd and Shriji Sugar and Power with a total
crushing capacity of 8000 tcd. The sugar mills are located in the
fertile areas of Narsinghpur and Hoshangabad districts of central
MP where the climatic conditions are fairly viable and irrigation
is primarily through tube wells. The group was incorporated in
1977 and also includes the entities Shri Nath Traders and Shri Ji
Traders, which are engaged in trading of wheat and other
agricultural commodities, and Jai Giriraj Rice and Agro Mills
Private Limited, a rice mill.
In FY 2012-13, SSPPL reported an operating income of INR15.76
crore and a profit after tax of INR0.78 crore.
SUPER PRIME: ICRA Assigns 'B+' Rating to INR8.0cr LT Limits
-----------------------------------------------------------
ICRA has assigned a long-term rating of [ICRA] B+ to the INR8.00
crore fund-based facilities of Super Prime Construction Private
Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Limits 8.00 [ICRA] B+ assigned
The assigned rating is constrained by the company's modest scale
of operations and low profitability which along with increasing
working capital requirement has kept the debt coverage and
liquidity modest. The assigned rating is also constrained by the
company's high customer concentration with the company having only
a single customer, which results in revenues and collections being
dependent on the progress of the customer's projects. This is also
evident in elongation of the receivables in FY 14 due to delayed
payments from the sole customer, which had stretched the liquidity
position of the company. This along with loans & advances extended
to the group companies and modest accruals have further weakened
the liquidity as also reflected in consistent high utilization of
the working capital limits.
Moreover, as the funding requirements have been mostly met though
debt and creditors, it has kept the debt coverage modest. The
assigned rating also takes into account the fragmented nature of
the industry with presence of a large number of small and large
players, which is likely to keep the profitability of the company
under pressure.
The rating however takes into account the company's satisfactory
order book position of ~Rs. 65 crore as on 31 March 2014 which is
around 2.5x times FY 14 revenues and provides revenue visibility
over the medium term. The rating also takes into account the
experience of the management in the construction business and the
association with Manglam Build Developers Limited (a Jaipur based
real estate company) which has resulted in regular orders and
steady revenue growth of the company over the last few years.
Going forward, SPCPL's ability to diversify the customer base
while maintaining revenue growth by securing new orders and
improvement in the liquidity and debt coverage would be key rating
sensitivities.
Recent Results
As per the company SPCPL would report an operating income of
around INR27 crore for the year ending 31st March, 2014.
SPCPL is a Jaipur based construction company engaged in the
construction of residential buildings, township, and commercial
spaces. Presently, the company is spearheaded by Mr. Nitesh
Agarwal and Col. Deo Karan Singh, both having significant
experience in the construction and real estate business. The
company is a associate company of Jaipur based Manglam Build
Developers Limited (MBDL), which is engaged in development of
residential and commercial projects and all the orders currently
been executed by SPCPL are for MBDL.
SURFACE TECH: CRISIL Cuts Rating on INR200MM Bank Guarantee to D
----------------------------------------------------------------
CRISIL has downgraded its ratings on the bank facilities of
Surface Tech (India) Pvt Ltd to 'CRISIL D/CRISIL D' from 'CRISIL
B/Stable/CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 200 CRISIL D (Downgraded
from 'CRISIL A4')
Cash Credit 33 CRISIL D (Downgraded
from 'CRISIL B/Stable')
Proposed Long Term 17 CRISIL D (Downgraded
Bank Loan Facility from 'CRISIL B/Stable')
The rating downgrade reflects instances of delay by STIPL in
servicing its debt and invocation of its non-fund based facility;
the same have been caused by the company's weak liquidity.
Incorporated in 2001, STIPL undertakes civil construction. The
company is managed by Mr. A K Thakur. The company's key customer
is Military Engineer Services. STIPL specialises in construction
of hangar, aviation facilities, magazines, runway construction
works, and buildings. The company is based in Guwahati (Assam).
For 2013-14 (refers to financial year, April 1 to March 31), STIPL
reported a profit after tax (PAT) of INR3.3 million on estimated
net sales of INR71 million; the company reported a PAT of INR6.6
million on net sales of INR298.3 million for 2012-13.
SWASTIKA STEEL: CRISIL Reaffirms B Rating on INR85MM Cash Credit
----------------------------------------------------------------
CRISIL's ratings on the bank facilities of Swastika Steel & Allied
Products Pvt Ltd continue to reflect SSAPPL's below-average
financial risk profile, marked by an aggressive capital structure
and average debt protection metrics, and its working-capital-
intensive operations. These rating weaknesses are partially offset
by the extensive experience of the company's promoters in the
structured steel products industry.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 41 CRISIL A4 (Reaffirmed)
Bill Discounting 120 CRISIL A4 (Reaffirmed)
Cash Credit 85 CRISIL B/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility 1 CRISIL B/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that SSAPPL will continue to benefit over the
medium term from the extensive industry experience of its
promoters in the structured steel products industry as well as
their funding support. The outlook may be revised to 'Positive' if
there is significant capital infusion by its promoters, leading to
improvement in its capital structure and liquidity. Conversely,
the outlook may be revised to 'Negative' in case the company's
working capital cycle stretches, leading to weakening in its
liquidity.
SSAPPL was originally established as a partnership firm in 1959 by
the Mota and Sharda families with manufacturing facilities in
Liluah (West Bengal). Since 1992, Mr. Shiv Kumar Sharda and Mr.
Sushil Kumar Sharda have been managing the business. The entity
was reconstituted as a private limited company with the current
name on April 1, 2011. SSAPPL manufactures, and trades in,
structured steel products such as mild steel angles, channels, and
flats.
SSAPPL reported a profit after tax (PAT) of INR2 million on net
sales of INR827 million for 2012-13, against a PAT of INR4 million
on net sales of INR930 million for 2011-12.
UNIQUE CHEMOPLANT: CRISIL Ups Rating on INR35M Cash Credit to B+
----------------------------------------------------------------
CRISIL has upgraded its ratings on the bank facilities of Unique
Chemoplant Equipments (UCE; part of the Dipesh group) to 'CRISIL
B+/Stable/CRISIL A4' from 'CRISIL D/ CRISIL D'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 78.9 CRISIL A4 (Upgraded
from 'CRISIL D')
Cash Credit 35 CRISIL B+/Stable (Upgraded
from 'CRISIL D')
Letter of Credit 15 CRISIL A4 (Upgraded
from 'CRISIL D')
Rupee Term Loan 6.1 CRISIL B+/Stable (Upgraded
from 'CRISIL D')
The ratings upgrade reflect improvement in the Dipesh group's
business risk profile with significant improvement in revenue and
moderate profitability, which led to improvement in cash accruals
from operations. As a result, the group's financial risk profile
improved, especially its liquidity, as indicated by moderate
utilisation of working capital limits.
The ratings continue to reflect the Dipesh group's average
financial risk profile marked by small net worth and weak debt
protection metrics, its working-capital-intensive operations, and
susceptibility to volatility in raw material prices. These rating
weaknesses are partially offset by the extensive industry
experience of the Dipesh group's promoter and its established
clientele.
For arriving at the ratings, CRISIL has combined the business and
financial risk profiles of UCE and Dipesh Engineering Works (DEW),
together referred to as the Dipesh group. Both the entities are
engaged in the same line of business, have significant operational
and financial linkages, and are under common management.
Outlook: Stable
CRISIL believes that the Dipesh group will benefit over the medium
term from its promoter's extensive industry experience and its
established relationship with customers. The outlook may be
revised to 'Positive' if the group scales up operations while
improving its margins significantly, leading to substantial cash
accruals and improvement in capital structure, or in case of a
significant improvement in the group's working capital management.
Conversely, the outlook may be revised to 'Negative' in case of
slowdown in inflow of orders, or decline in profitability margins,
or large debt-funded capital expenditure, or large capital
withdrawals by the promoter, weakening the group's capital
structure.
UCE was set up in 1995 as a proprietorship firm by Mr. Ketan
Patel. It also manufactures machinery and equipment used in
chemical, petrochemical, pharmaceutical, pesticide, refineries,
dye, and dye intermediates industries. UCE's manufacturing unit is
in Ambarnath (Maharashtra).
DEW was set up in 1979 by Mr. Jayantibhai Patel and another
partner as a partnership firm and was reconstituted as a
proprietorship firm with Mrs. Savitaben J. Patel, wife of Shri
Jayantibhai B. Patel as proprietor. DEW manufactures machinery
and equipment used in the chemical, petrochemical, pharmaceutical,
pesticide, refinery, dye, and dye intermediates industries.
VYANKTESH CORRUGATORS: CRISIL Ups INR80M Cash Credit Rating to B
----------------------------------------------------------------
CRISIL has upgraded its rating on long-term bank facilities of
Vyanktesh Corrugators Pvt Ltd to 'CRISIL B/Stable' from 'CRISIL B-
/Stable', and assigned its 'CRISIL A4' rating to the company's
short-term facilities.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 80 CRISIL B/Stable (Upgraded
from 'CRISIL B-/Stable')
Letter of Credit 32.5 CRISIL A4 (Assigned)
The rating upgrade reflects the sustainable improvement in VCPL's
credit risk profile, particularly its liquidity, driven by the
enhancement in available bank lines, significant increase in cash
accruals from business, and a controlled working capital cycle.
The company is expected to generate cash accruals of over INR23
million in 2014-15 (refers to financial year, April 1 to March 31)
as against less than INR13 million in the previous year. Moreover,
its sanctioned fund- and non-fund-based bank lines have been
enhanced by INR50 million in 2014-15, providing it with additional
working capital funds. The availability of additional funds
coupled with a tighter control on the working capital cycle,
reflected in an improvement in gross current assets to less than
150 days currently from over 300 days two years ago, has aided
VCPL in increasing its turnover without straining its liquidity.
Sustaining the improvement in its working capital cycle will
remain a key rating sensitivity factor over the medium term.
The ratings reflect VCPL's below-average financial risk profile,
marked by moderate capital structure owing to debt-funding of its
large working capital requirements. The ratings also factor in the
company's modest scale of operations in the fragmented packaging
industry, and significant customer concentration in its revenue
profile. These rating weaknesses are partially offset by the
extensive industry experience of VCPL's promoters, and the
benefits it derives from the assured availability of raw materials
from its associate concern.
Outlook: Stable
CRISIL believes that VCPL will continue to benefit over the medium
term from its promoters' extensive industry experience. The
outlook may be revised to 'Positive' in case of a considerable
increase in the company's scale of operations and profitability
while it tightens its working capital cycle, leading to
significant improvement in its liquidity. Conversely, the outlook
may be revised to 'Negative' if there is a decline in VCPL's
margins or a substantial increase in its working capital
requirements, resulting in deterioration in its financial risk
profile, particularly its liquidity.
Incorporated in 1996 as a part of the Packing People group, VCPL
manufactures corrugated boxes using kraft paper; it is based in
Ujjain (Madhya Pradesh). The company is promoted by Mrs. Mangla
Bangur and her son, Mr. Anand Bangur.
WESTERN INDUSTRIAL: CRISIL Assigns 'D' Rating to INR100MM Loan
---------------------------------------------------------------
CRISIL has assigned its 'CRISIL D' rating to the long-term bank
facilities of Western Industrial Co-op Estate Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Lease Rental Discounting 100 CRISIL D
Loan
The ratings reflect instances of delay in debt servicing; these
delays are on account of the society's weak liquidity primarily
caused due to lower cash accruals driven by a low occupancy rate
for its premises vis-a-vis maturing debt obligations.
The rating also factors in WICEL's exposure to single site
concentration risks in its revenue profile and a below-average
financial risk profile, marked by its small net worth and weak
capital structure. However, the society benefits from its
promoters' extensive experience in the property-leasing business
and the advantageous location of its property.
WICEL was registered in 1981 as an industrial co-operative
society. The society leased land from Maharashtra Industrial
Development Corporation in 1981 for a period of 95 years beginning
1981. The society has built a commercial property on one of plots
of this land and has sub-leased the same. The remaining portion of
the land is occupied by the members of the society for which the
society does not earn lease income.
YOGIRAJ GINNING: ICRA Reaffirms B+ Rating on INR12cr Cash Credit
----------------------------------------------------------------
ICRA has reaffirmed the [ICRA]B+ rating to INR12.00 crore cash
credit facility and INR1.45 crore2 term loan facility of Yogiraj
Ginning & Oil Industries.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit Limit 12.00 [ICRA]B+ reaffirmed
Term Loan 1.45 [ICRA]B+ reaffirmed
The rating continues to be constrained by YGOI's weak financial
profile as reflected by low profitability indicators, stretched
capital structure and weak debt coverage indicators. The rating
also considers the low profit margin on account of limited value
addition and highly competitive and fragmented industry structure
due to low entry barriers. The rating are further constrained by
vulnerability of profitability to raw material prices, which are
subject to seasonality and crop harvest and regulatory risks with
regard to minimum support price (MSP) of raw cotton and export of
cotton bales. ICRA further notes that the firm is exposed to risk
of capital withdrawal inherent in the partnership nature of the
business.
The rating, however, favorably considers the long experience of
the promoters in the cotton industry as well as favorable location
of the company giving it easy access to high quality raw cotton.
Yogiraj Ginning and Oil Industries was incorporated in 2011, to
engage in ginning of raw cotton to produce cotton bales. The firm
is promoted jointly by Mr Praful Chaniyara, Mr Anupsinh Sarvaiya
and other family members. The firm's work is located in Gondal
(Gujarat) with a processing capacity of 150 MTPD of raw cotton.
The promoters of the firm are associated with other concerns
namely Chanaria Enterprise, Yogikrupa Trading and Yogi Cotex
engaged in similar line of businesses.
Recent Results
During FY14 (unaudited provisional financials), the firm reported
an operating income of INR119.05 crore and profit after tax (PAT)
of INR0.84 crore as against operating income of INR81.79 crore and
profit after tax (PAT) of INR0.67 crore in FY13.
*********
Tuesday's edition of the TCR-AP delivers a list of indicative
prices for bond issues that reportedly trade well below par.
Prices are obtained by TCR-AP editors from a variety of outside
sources during the prior week we think are reliable. Those
sources may not, however, be complete or accurate. The Tuesday
Bond Pricing table is compiled on the Friday prior to
publication. Prices reported are not intended to reflect actual
trades. Prices for actual trades are probably different. Our
objective is to share information, not make markets in publicly
traded securities. Nothing in the TCR-AP constitutes an offer
or solicitation to buy or sell any security of any kind. It is
likely that some entity affiliated with a TCR-AP editor holds
some position in the issuers' public debt and equity securities
about which we report.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR-AP. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com
Friday's edition of the TCR-AP features a list of companies with
insolvent balance sheets obtained by our editors based on the
latest balance sheets publicly available a day prior to
publication. At first glance, this list may look like the
definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical
cost net of depreciation may understate the true value of a
firm's assets. A company may establish reserves on its balance
sheet for liabilities that may never materialize. The prices at
which equity securities trade in public market are determined by
more than a balance sheet solvency test.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Asia Pacific is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Valerie U. Pascual, Marites O. Claro, Joy A. Agravante, Rousel
Elaine T. Fernandez, Julie Anne L. Toledo, and Peter A. Chapman,
Editors.
Copyright 2014. All rights reserved. ISSN: 1520-9482.
This material is copyrighted and any commercial use, resale or
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*** End of Transmission ***