/raid1/www/Hosts/bankrupt/TCRAP_Public/141106.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
Thursday, November 6, 2014, Vol. 17, No. 220
Headlines
A U S T R A L I A
ALUMINIUM BOATS: HMAS Bundaberg Fire Blamed For Collapse
AUSTRALIA: Needs Stimulus to Avoid Recession, Morgan Stanley Says
BAP NOMINEES: Printing Business Up for Sale
DSG HOLDINGS: Crazy Clark Brand Up For Sale
JMAK ENTERPRISES: First Creditors' Meeting Set For Nov. 7
MARION ENERGY: Struggling U.S. Unit Seeks Bankruptcy Protection
MCVEIGH HOTELS: Court Appoints Clifton Hall as Liquidator
RIDGE TOP: First Creditors' Meeting Slated For November 12
WHEATLEY & WILLIAMS: Creditors' Meeting Set For November 13
ZDR PTY: In Administration; First Meeting Set For Nov. 13
C H I N A
ANTON OILFIELD: Moody's Changes Outlook on Ba2 CFR to Negative
CHINA OIL: Moody's Assigns Ba1 Rating to $300MM Unsecured Bonds
I N D I A
APEX BUILDERS: CRISIL Assigns B+ Rating to INR120MM Term Loan
ARIHANT EDIBLE: ICRA Suspends D Rating on INR5.73cr LT Bank Loan
ARNEJA CARRIERS: ICRA Suspends 'D' Rating on INR5cr Bank Loan
ARR ESS: CRISIL Lowers Rating on INR190MM Cash Credit to 'B-'
BLUEBERRY AGRO: CRISIL Assigns B- Rating to INR70MM Term Loan
BOWRY MEMORIAL: CRISIL Assigns B Rating to INR58.4MM Bank Loan
FILTER MANUFACTURING: CRISIL Cuts INR35MM Cash Credit Rating to D
GARIB NAWAZ: CRISIL Reaffirms 'D' Rating on INR35MM Cash Credit
GOLDSTAR BATTERY: CRISIL Cuts Rating on INR90MM Bill Disc. to B-
GYANDHARA EDUCATION: ICRA Puts B- Rating on INR8cr Term Loan
IFMR CAPITAL: ICRA Assigns B(SO) Rating to INR4.07cr PTC A2 Issue
KAMDHENU COTTON: CRISIL Ups Rating on INR172MM Term Loan to B+
KISSAN AGRO: CRISIL Ups Rating on INR60MM Cash Credit to B+
KOCHAR OVERSEAS: CRISIL Reaffirms B Rating on INR250M Cash Credit
L N FIELDS: CRISIL Assigns B- Rating to INR150MM Overdraft Loan
LANCY CONSTRUCTIONS: CRISIL Rates INR130MM Overdraft Loan at B
LUXMI RICE: ICRA Reaffirms B Rating on INR15cr LT Fund Based Loan
PEKON ELECTRONICS: CRISIL Ups Rating on INR70MM Bank Loan to B+
REAL REALTY: CRISIL Lowers Rating on INR45MM Term Loan to 'D'
S.R.S. EXPORTS: ICRA Reaffirms 'B+' Rating on INR2cr Cash Loan
S THARTIUS: CRISIL Assigns B+ Rating to INR50MM Overdraft Loan
SAICON TILES: CRISIL Assigns B Rating to INR52.5MM Term Loan
SEINUMERO NIRMAN: CRISIL Reaffirms B Rating on INR70MM Cash Loan
SHIV INDUSTRIES: ICRA Suspends 'D' Rating on INR15cr LT Loan
SIMOLA VITRIFIED: ICRA Reaffirms B Rating on INR17.5cr Cash Loan
SRI KAMATCHI: CRISIL Assigns B+ Rating to INR57.5MM Cash Credit
TRANSONS OVERSEAS: CRISIL Assigns B Rating to INR10MM Cash Loan
VARUN FERTILIZERS: CRISIL Reaffirms B+ INR100MM Cash Loan Rating
VELAVAN HYPER: CRISIL Rates INR80MM Cash Credit at 'B'
M A L A Y S I A
MALAYSIA AIRLINES: Proposed Privatisation Critical For Survival
N E W Z E A L A N D
MERCY RENOVATORS: 30 Jobs Axed Following Liquidation
PENINSULA ROAD: Big Losses For Creditors After Sale of Land
SOLID ENERGY: Posts NZ$181.9MM Annual Loss For Year Ended June 30
P H I L I P P I N E S
COOPERATIVE BANK OF TARLAC: Placed Under PDIC Receivership
S R I L A N K A
BANK OF CEYLON: Moody's Affirms B1 Local Currency Deposit Rating
- - - - -
=================
A U S T R A L I A
=================
ALUMINIUM BOATS: HMAS Bundaberg Fire Blamed For Collapse
--------------------------------------------------------
Paige Carfrae at The Courier-Mail reports that a fire which gutted
a AUD54 million Australian Navy patrol boat has been blamed for
the demise of a Brisbane-based boat manufacturing and servicing
company.
Aluminium Boats Australia on November 4 announced it had been
placed into voluntary administration after the HMAS Bundaberg was
destroyed while undergoing maintenance at its Hemmant shipyard in
August, the report relates.
According to the report, the company lost its contract for
servicing and maintenance of Australian Navy vessels soon after,
forcing it to cut 90 jobs.
Another 70 staff were sacked on November 4 after the appointment
of administrators from FTI Consulting, who are expected to take
less than five weeks to assess the company's future, the report
says.
The Courier-Mail relates that Aluminium Boats Australia director
Roy Whitewood said he hoped the business could still recover
through the help of the administrators.
"It is my strong hope and desire to return the business to
financial health, and I will be working closely with the
administrators to try and achieve this," the report quotes
Mr. Whitewood as saying.
Aluminium Boats Australia specialises in the manufacturing and
maintenance of defence, commercial and luxury vessels and has had
contracts with the Royal Australian Navy, the Queensland Police
Service, Mooloolaba Coast Guard and Cruise Whitsundays.
In October last year, the company's general manager Tommy Ericson
told The Courier-Mail the company was expecting this year to go
"very well" and planned for a 25 per cent increase in staff
members.
AUSTRALIA: Needs Stimulus to Avoid Recession, Morgan Stanley Says
-----------------------------------------------------------------
Bloomberg News reports that Morgan Stanley said Australia could
face its first recession in almost 25 years unless authorities
further stimulate the economy.
The nation's economy will expand just 1.9 percent in 2015, with
1.5 percentage points of that coming from higher exports, and
unemployment will climb to 6.8 percent, Morgan Stanley economists
led by Daniel Blake said in a research report on November 5,
Bloomberg relates. They project the currency will fall to 76 U.S.
cents by the end of next year from 87.37 cents at 11:10 a.m. on
November 5 in Sydney.
"The economic transition in Australia from the resources boom to
east-coast recovery has stalled," they said, Bloomberg relays. "We
revise our key forecasts downward, which in turn make future
policy settings key to avoiding recession."
Bloomberg notes that policy makers are playing a waiting game for
low interest rates to gain traction beyond a surging housing
market in the country's eastern states. The Reserve Bank of
Australia has kept its benchmark interest rate at a record-low 2.5
percent for the past 15 months to boost growth and hiring, says
Bloomberg.
According to Bloomberg, the bureau of statistics reported on
November 4 that the nation's labor market had 24,400 fewer jobs in
September than previously reported and the unemployment rate was
6.2 percent, rather than 6.1 percent, following a review of its
methodology.
"The market is underestimating the degree of employment shock
ahead," Morgan Stanley, as cited by Bloomberg, said. Unemployment
at almost 7 percent combined "with a deteriorating income growth
profile, under 3 percent, and negative feedback on confidence and
discretionary spending is envisaged," the economists said.
Bloomberg relates that Morgan Stanley said the terms of trade, or
export prices relative to import prices, is under pressure due to
additional resource supply from new mines and signs China will
accelerate its economic rebalancing away from investment. The
Australian government's "alarmist budget narrative" has also
damaged "animal spirits" and consumers' willingness to dip into
their high savings, the bank said, Bloomberg relays.
RBA Governor Glenn Stevens has called for a revival of animal
spirits to spur companies to spend and take risks, Bloomberg
notes. Morgan Stanley sees a 45 percent chance Stevens and his
board will cut rates over the next year, though their base case
remains steady rates until an increase in the first quarter of
2016, the report says.
According to Bloomberg, Tony Abbott's government is trying to
narrow a budget surplus that swelled to almost AUD48.5 billion
($42.4 billion) last fiscal year. Mr. Abbott has said he wants to
be known as the infrastructure prime minister.
Bloomberg adds that Morgan Stanley said the public infrastructure
program "will not fill the gap" in 2015 and the budget deficit
will be "staying wide" in 2015-2016 as "automatic stabilizers are
utilized." It predicts the "political target of a surplus in four
years" will be pushed out.
BAP NOMINEES: Printing Business Up for Sale
-------------------------------------------
Cliff Sanderson at Dissolve.com.au reports that expressions of
interest are sought for the sale of assets and business of BAP
Nominees (VIC) Pty Ltd which trades as On Demand. The company is
in receivership under Ferrier Hodgson, the report says.
BAP Nominees (VIC) Pty Ltd is a digital print solutions provider
in Australia. The company offers full colour printing, security
printing for documents that are confidential and solutions for
large format prints and black and white. The business also
provides comprehensive finishing and ancillary services like
warehouse and inventory management and e-marketing. The company is
an International Printers Network member.
DSG HOLDINGS: Crazy Clark Brand Up For Sale
-------------------------------------------
Cliff Sanderson at Dissolve.com.au reports that expressions of
interest are sought for the sale of Crazy Clark, which is owned by
DSG Holdings Australia. The parent company is currently under the
administration of KordaMentha.
Dissolve.com.au says the buyer of the business will be able to
have the chance to own the customer base and brand name of the
company. The sale also includes the associated IP of the company,
the report relates.
DSG Holdings Australia Pty Limited operates retailers Crazy Clarks
and Sam's Warehouse. It employed approximately 2,500 people
across 143 retail outlets, has a distribution centre in Queensland
and a head office at North Ryde.
David Winterbottom and Rahul Goyal of KordaMentha Restructuring
have been appointed Receivers and Managers of DSG Holdings
Australia Pty Limited. This follows the appointment of Steve
Nicols of Nicols + Brien as Voluntary Administrator of DSG.
JMAK ENTERPRISES: First Creditors' Meeting Set For Nov. 7
---------------------------------------------------------
Cameron Shaw and Richard Albarran of Hall Chadwick were appointed
as administrator of Jmak Enterprises Pty Ltd, trading as Kimberley
Electrical Services, on Oct. 29, 2014.
A first meeting of the creditors of the Company will be held at
C-View Room - Mercure Broome, Weld Street, in Broome, on
Nov. 7, 2014, at 1:30 p.m.
MARION ENERGY: Struggling U.S. Unit Seeks Bankruptcy Protection
---------------------------------------------------------------
Marion Energy, Inc., the U.S. unit of Australian oil and gas
company Marion Energy Ltd., sought Chapter 11 bankruptcy
protection to thwart plans by its secured lender, Castlelake, to
appoint a receiver and a conduct a fire sale of its assets.
Marion is a Texas corporation engaged in exploration and
production of natural gas in the State of Utah. Marion's core
operation is a producing gas field located in Carbon and
Emery Counties, Utah (the "Clear Creek Field"). The Company also
holds smaller, currently unproductive acreage positions in the
Helper and Roan Cliffs area near Helper, Utah (the "Helper
Field").
Marion Energy filed its Chapter 11 bankruptcy petition (Bankr. D.
Utah Case No. 14-31632) in Salt Lake City, Utah on Oct. 31, 2014.
The Debtor estimated assets and debt of $100 million to $500
million.
Jeffrey Clarke, a director of the Debtor, explains that the value
of Marion's gas production assets, and the Clear Creek Field in
particular, likely exceeds $100 million based solely on proven
reserves, and is very likely much higher. While Marion's
operations are nearing the point where significant production can
start, they are currently resulting in only small, sporadic
production of gas for sale into the Questar pipeline, and thus
Marion is currently generating insufficient revenue to fund its
day-to-day operations.
To pay pre-existing debt and fund its operations in the Clear
Creek Field, Marion entered into a secured credit agreement with
TCS II Funding Solutions, LLC ("TCS") (the lender is commonly
referred to by the parties as "Castlelake") dated as of June 24,
2013, pursuant to which Marion borrowed $25 million on a secured
basis. In addition, Marion has borrowed $134,024,408 from its
parent company, Marion Energy Limited, and has borrowed from other
sources to funds its operations.
Mr. Clarke narrates that due to heavy snowfall and severe cold in
the winter of 2013/2014, unexpected equipment problems, third-
party operational delays, and other operational issues, Marion was
unable to meet its production-related covenants and is currently
in default under the terms of the Credit Agreement. Beginning in
June 2014, Marion began negotiating a forbearance period with
Castlelake to give Marion time to obtain new financing from which
it could pay Castlelake. As a condition of entering into the
latest forbearance agreement dated September 8, 2014, Castlelake
required Marion to sign a verified statement for judgment by
confession, a stipulated judgment, a joint motion stipulating to
the appointment of a receiver, an authorization for the receiver
to conduct a 60-day sale of Marion's assets, and an assignment of
Marion's right of redemption.
During negotiations, Castlelake, according to the Debtor, demanded
payment of $17.6 million for early repayment under a so-called
"make-whole" provision of the Credit Agreement. Marion disputes
the amount and its liability under the make-whole provision. The
parties agreed to submit the make-whole issue to arbitration and
agreed on a briefing schedule during November and December 2014.
The forbearance period agreed to by Castlelake, however, only runs
through October 31, 2014. Castle Lake has refused to grant Marion
further forbearance and, on Nov. 3, would have the right to seek
appointment of a receiver under the Receivership Documents,
forcing Marion to file this chapter 11 case to prevent appointment
of a receiver and an uneconomic liquidation of its assets.
Concurrent with the negotiations with Castlelake, Marion began
searching for alternative financing through its financial
consultants, 333 Capital Pty Ltd, and, at a later stage, Houston
Merchant Energy Partners. As a result, Marion signed an exclusive
engagement letter with a proposed lender, Anchorage Capital Group,
LLC and entered into a financial and technical due diligence
process with this proposed lender. The proposed replacement
credit facility was subject to a satisfactory technical due
diligence report by Ryder Scott, one of the largest gas and
petroleum consultancies in the world. The initial report was due
in mid-September. For reasons that are not apparent to Marion or
to the proposed financier, Ryder Scott failed to produce its final
report in a timely fashion. Ryder Scott has thus far only
produced a draft email report to the proposed lender, but the
draft report is inadequate and could not be relied upon by the
lender. The proposed lender is at this point in time unable to
perform the necessary technical due diligence in time to prevent
appointment of the receiver.
Castlelake refused to provide further forbearance, instead,
insisting on exercising its right to appoint a receiver and fire
sale Marion's assets. Marion filed this chapter 11 case to
prevent Castlelake from appointing a receiver and forcing an
uneconomic liquidation of Marion's assets using a 60-day sale
process. Marion requires sufficient "breathing space" to complete
a refinancing with a new lender, to preserve its going-concern
value. After Marion obtains new financing, it will confirm a
chapter 11 plan that will enable it to pay its secured prepetition
lender, Castlelake, in full, and to continue the process of
bringing its gas production on line until it achieves
profitability.
First Day Motions
The Debtor on the Petition Date filed motions or applications to:
-- employ Parsons Behle & Latimer as attorneys;
-- pay prepetition claims of utility providers;
-- pay prepetition wages and benefits of employees; and
-- obtain postpetition financing.
About Marion Energy
Marion Energy Inc. is a Texas corporation engaged in exploration
and production of natural gas in the State of Utah. Its parent is
Australia-based Marion Energy Limited (ASX:MAE). Marion Energy
Limited -- http://www.marionenergy.com.au/--is principally
engaged in investment in oil and gas projects and the
identification and assessment of new opportunities in the oil and
gas industry in Texas, Utah and Oklahoma in the United States of
America.
The Clear Creek Unit, which comprises approximately 17,090 acres,
is located in Carbon and Emery counties. It has produced 137
billion cubic feet (Bcf) of natural gas from conventional
reservoirs. The Helper Project is located within a gas producing
area, with approximately 55 Bcf of gas being produced as of
June 30, 2008.
MCVEIGH HOTELS: Court Appoints Clifton Hall as Liquidator
---------------------------------------------------------
Timothy Clifton was appointed Official Liquidator of McVeigh
Hotels (NT) Pty Ltd on Oct. 30, 2014, by the Federal Court of
Australia.
RIDGE TOP: First Creditors' Meeting Slated For November 12
----------------------------------------------------------
Paul Gerard Weston of Pitcher Partners was appointed as
administrator of Ridge Top Frames & Truss Pty Limited on Nov. 3,
2014.
A first meeting of the creditors of the Company will be held at
Pitcher Partners, Level 22, MLC Centre, 19 Martin Place, in
Sydney, on Nov. 12, 2014, at 12:00 p.m.
WHEATLEY & WILLIAMS: Creditors' Meeting Set For November 13
-----------------------------------------------------------
Mark Hall and Timothy Clifton were appointed Joint and Several
Administrators of Wheatley & Williams Pty Ltd on November 3, 2014.
A meeting of creditors will be held at 11:00 a.m. on Nov. 13, 2014
at Clifton Hall, Level 3, 431 King William Street, in Adelaide.
ZDR PTY: In Administration; First Meeting Set For Nov. 13
---------------------------------------------------------
Jonathan Paul McLeod of McLeod & Partners was appointed as
administrator of ZDR Pty Ltd on Nov. 3, 2014.
A first meeting of the creditors of the Company will be held at
McLeod & Partners, Hermes Building, Level 1, 215 Elizabeth Street,
in Brisbane, on Nov. 13, 2014, at 10:00 a.m.
=========
C H I N A
=========
ANTON OILFIELD: Moody's Changes Outlook on Ba2 CFR to Negative
--------------------------------------------------------------
Moody's Investors Service has changed to negative from stable the
outlook for Anton Oilfield Services Group's Ba2 corporate family
and senior unsecured bond ratings.
Moody's has also affirmed the ratings.
Ratings Rationale
"The negative outlook primarily reflects Anton's flat revenue
growth and weakened level of profit margins, which have so far
resulted in higher debt leverage in 2014," says Chenyi Lu, a
Moody's Vice President and Senior Analyst.
On October 27, 2014, Anton issued a profit warning for its full-
year results for 2014.
It does not expect revenue to grow significantly and estimates
that profits attributable to shareholders will drop by more than
80%.
Moody's has also lowered its forecast for Anton's revenue growth
in 2014 to flat year-on-year mainly because of the continued weak
spending for exploration and production by the major oil and gas
companies in China.
At the same time, Moody's expects Anton's adjusted EBITDA margin
to fall to around 22% in 2014 from 28% in 2013, given lower
operating efficiency and pricing pressures.
Accordingly, debt leverage, measured by adjusted debt/EBITDA, is
likely to reach 4.5x by end-2014 which is high for its Ba2 rating.
"The negative outlook also considers Moody's view that the company
will be negatively affected by the ongoing weakness in oil prices
over the next 12-18 months," says Lu, who is also Moody's Lead
Analyst for Anton.
The decline in prices could impact Anton's revenue growth in 2015.
As of 30 October 2014, the benchmark Brent crude price had dropped
by 23% since the beginning of July 2014, a decline which is
negatively impacting on revenue growth at oil-servicing companies
-- such as Anton -- as upstream companies cut spending on
exploration and drilling.
Anton's Ba2 issuer rating reflects its (1) leading position in the
domestic oil services sector in China, where the growth in natural
gas production is strong; (2) diversified revenue base, supported
by its integrated business model; (3) competitive technical edge
in providing key signature services; and (4) its strategic
alliance with, and technical support from, Schlumberger Ltd (Aa3
stable).
On the other hand, Anton's Ba2 ratings are constrained by (1) its
small scale and customer concentration; (2) its weak operating
cash flow due to its high working capital needs; and (3)
increasing competition and execution risk from fast expansion.
The ratings outlook could return to stable if Anton improves its
revenue growth and profitability, such that adjusted debt/EBITDA
stays at 3.5x or below on a sustained basis.
On the other hand, downward rating pressure could emerge if (1)
Anton's order book declines materially; or (2) its financial
position weakens, such that adjusted debt/EBITDA exceeds 4x on a
sustained basis, resulting from (A) an inability to pass on cost
increases to its customers, as evidenced by its EBITDA margin
declining below 20% on a sustained basis; (B) greater pressure on
its working capital, and which prompts it to raise a substantial
amount of debt; or (C) a more aggressive debt-funded expansion
plan or a dividend payout ratio that weakens its leverage and/or
liquidity.
The principal methodology used in this rating was Global Oilfield
Services Rating Methodology published in December 2009.
Listed on the Hong Kong Stock Exchange in December 2007, Anton
Oilfield Services Group was founded by its chairman, Mr. Luo Lin,
in 1999. It is a leading Chinese oil-services company focusing
mainly on the country's fast growing natural gas sector. The
company offers integrated oil/gas field services solutions,
covering various phases of field development, including down-hole
operation services, well-completion technologies, drilling
technologies, and tubular services.
CHINA OIL: Moody's Assigns Ba1 Rating to $300MM Unsecured Bonds
---------------------------------------------------------------
Moody's Investors Service has assigned a definitive Ba1 rating to
the $300 million, 5%, 5.5-year, senior unsecured bonds, due
May 7, 2020, and issued by China Oil and Gas Group Limited (COG).
The rating outlook is stable.
Ratings Rationale
Moody's definitive rating on this debt obligation follows COG's
successful completion of its USD bond issuance, the final terms
and conditions of which are consistent with Moody's expectations.
The provisional rating was assigned on 3 November 2014, and
Moody's ratings rationale was set out in a press release published
on the same day.
The company will use the proceeds from the issuance COG for debt
refinancing and general corporate purposes.
The principal methodology used in this rating was Regulated
Electric and Gas Utilities published in December 2013.
China Oil and Gas Group Limited engages in the piped city gas
business in China, as well as the transportation and distribution
of compressed natural gas, and liquefied natural gas.
The company is listed on the Hong Kong Exchange. Mr. Xu Tieliang,
the company's chairman, is the largest shareholder, with a 21.81%
stake.
=========
I N D I A
=========
APEX BUILDERS: CRISIL Assigns B+ Rating to INR120MM Term Loan
-------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-term
bank facilities of Apex Builders (AB).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 80 CRISIL B+/Stable
Term Loan 120 CRISIL B+/Stable
The rating reflects AB's exposure to risks related to
implementation and saleability of its ongoing project, accentuated
by the initial stage of project implementation. The rating also
factors in the firm's exposure to cyclicality inherent in the
Indian real estate sector. These rating weaknesses are partially
offset by the extensive experience of AB's promoters in the real
estate market in Pune, and moderately low funding risk for its
project due to sanctioned project loan.
Outlook: Stable
CRISIL believes that AB will continue to benefit over the medium
term from its promoters' extensive experience in the real estate
sector in Pune. The outlook may be revised to 'Positive' if the
firm records sizeable bookings of units and receives timely
customer advances, leading to substantial cash inflows.
Conversely, the outlook may be revised to 'Negative' if slow
bookings of units and delay in receipt of customer advances result
in delayed implementation of project and pressure on the firm's
liquidity.
AB was established as a partnership firm in 2013 in Pune by
members of the Kasturi group. The firm was established to execute
a residential property at Borhadwadi, near Moshi, in Pune.
The Kasturi group, established by Mr. Bharat Agarwal, has been
engaged in real estate development in Pune since 1998. So far, the
group has implemented more than ten projects aggregating over 1.5
million square feet of saleable area.
ARIHANT EDIBLE: ICRA Suspends D Rating on INR5.73cr LT Bank Loan
----------------------------------------------------------------
ICRA has suspended [ICRA]D rating assigned to the INR5.73 crore
long term fund based bank limits of Arihant Edible Oils Private
Limited. The suspension follows ICRA's inability to carry out a
rating surveillance in the absence of the requisite information
from the company.
ARNEJA CARRIERS: ICRA Suspends 'D' Rating on INR5cr Bank Loan
-------------------------------------------------------------
ICRA has suspended [ICRA]D rating assigned to the INR5.0 crore
bank facilities of Arneja Carriers Private Limited. The suspension
follows ICRA's inability to carry out a rating surveillance in the
absence of the requisite information from the company.
ARR ESS: CRISIL Lowers Rating on INR190MM Cash Credit to 'B-'
-------------------------------------------------------------
CRISIL has downgraded its long-term rating on the bank facilities
of Arr Ess Industries Pvt Ltd to 'CRISIL B-/Stable' from 'CRISIL
B/Stable' and has reaffirmed its rating on the company's short-
term bank facilities at 'CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 190 CRISIL B-/Stable (Downgraded
from 'CRISIL B/Stable')
Letter of Credit 10 CRISIL A4 (Reaffirmed)
The rating downgrade reflects AEIPL's stretched liquidity marked
by low cash accruals vis-a-vis term debt obligations, and high
bank limit utilisation because of increased working capital
requirements. The company's bank limits were almost fully utilised
over the 12 months through September 2014. Furthermore, in 2014-15
(refers to financial year, April 1 to March 31), AEIPL is likely
to generate cash accruals of around INR8 million which will be
inadequate for funding incremental working capital requirements
and for meeting estimated term debt obligations of about INR8
million during the year. The rating downgrade also factors in
AEIPL's weakened business risk profile marked by decline in
revenue to INR1.44 billion in 2013-14 from INR1.87 billion a year
ago. CRISIL believes that AEIPL's liquidity will remain
constrained over the medium term because of low profitability.
The ratings reflect AEIPL's weak financial risk profile marked by
a small net worth, high total outside liabilities to tangible net
worth ratio, and weak debt protection metrics; and its small scale
of operations. These rating strengths are partially offset by the
company's established relationship with its suppliers and
customers.
Outlook: Stable
CRISIL believes that AEIPL will continue to benefit over the
medium term from its established relationship with suppliers and
customers. However, the company's financial risk profile,
especially its liquidity, will remain constrained, marked by low
operating margin, over the period. The outlook may be revised to
'Positive' if the company's scale of operations increases
significantly along with improvement in its financial risk profile
on account of increase in cash accruals or a better capital
structure. Conversely, the outlook may be revised to 'Negative' if
AEIPL's financial risk profile weakens because of increase in
working capital requirements or lower profitability, leading to
lower cash accruals.
AEIPL was originally promoted by Mr. Rajeev Bhalla as a
proprietorship firm, Arr Ess Brothers, in 2007. The firm was
reconstituted as a private limited company with the current name
in 2010-11. AEIPL, based in Ludhiana (Punjab), trades in steel,
cement, fabric, cotton, and yarn.
BLUEBERRY AGRO: CRISIL Assigns B- Rating to INR70MM Term Loan
-------------------------------------------------------------
CRISIL has assigned its 'CRISIL B-/Stable' rating to the long-term
bank facilities of Blueberry Agro Products Pvt Ltd (BAPPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 15 CRISIL B-/Stable
Term Loan 70 CRISIL B-/Stable
The ratings reflect BAPPL's nascent stage of operations and below-
average financial risk profile driven by its expected low
profitability. These rating weaknesses are partially offset by the
extensive experience of the promoters in the tea industry.
Outlook: Stable
CRISIL believes that BAPPL will benefit from its promoters'
extensive industry experience, over the medium term. The outlook
may be revised to 'Positive' if BAPPL improves its liquidity by
stabilising its operations in a timely manner, and generates
higher-than'expected cash accruals. Conversely, the outlook may be
revised to 'Negative' if the company's liquidity is constrained by
delays in stabilisation of operations, resulting in significantly
lower-than-expected cash accruals during the initial phase of its
operations.
BAPPL was incorporated in November 2011 by the Mumbai
(Maharashtra)-based Daga family. The company set up a tea extract
processing unit in Wada (Maharashtra); the unit is operational as
on date. BAPPL previously traded in tea. Mr. Suraj Kumar Daga, and
his son, Mr. Gaurav Daga, manage BAPPL's daily operations.
BAPPL reported a profit before tax (PBT) of INR2.4 million on an
operating income of INR75 million for 2013-14 (refers to financial
year, April 01 to March 31), as against a profit after tax (PAT)
of INR0.1 million on an operating income, of INR4.4 million for
2012-13.
BOWRY MEMORIAL: CRISIL Assigns B Rating to INR58.4MM Bank Loan
--------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable' rating to the bank
facilities of Bowry Memorial Educational & Medical Trust.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 31.6 CRISIL B/Stable
Overdraft Facility 30 CRISIL B/Stable
Proposed Long Term 58.4 CRISIL B/Stable
Bank Loan Facility
The rating reflects the trust's modest scale of operations,
vulnerability to regulatory risks associated with educational
institutions, and cash flow mismatches constraining its liquidity.
These rating weaknesses are partially offset by the trust's
established market presence in the education sector in Jalandhar
(Punjab) and comfortable capital structure and debt protection
indicators.
Outlook: Stable
CRISIL believes that BMMT will continue to benefit over the medium
term from the established market presence in the education sector
in Jalandhar and track record of its management. The outlook may
be revised to 'Positive' if the trust is able to increase the
intake in its schools and colleges resulting in improvement in fee
income and operating profitability while maintaining its
comfortable capital structure and is also able to correct the cash
flow mismatches occurring in the collection of fees and repayment
of debt. Conversely, the outlook may be revised to 'Negative' if
BMMT undertakes any larger-than-expected debt-funded capital
expenditure programme leading to deterioration in liquidity due to
cash flow mismatches, or faces any adverse regulatory changes.
Set up in 1992, BMMT operates two Central Board of Secondary
Education (CBSE)-affiliated schools and three colleges that offer
various undergraduate and postgraduate courses in Jalandhar. The
schools under the trust include Innocent Hearts School, Green
Model Town, and Innocent Hearts School, Lohara, while the colleges
include Innocent Hearts Group of Institutions, Innocent Hearts
College of Education, and Innocent Heart International Institute
of Distance Education, all in Jalandhar.
BMMT's net shortfall and fee income were estimated at INR0.5
million and INR134 million, respectively, for 2013-14 (refers to
financial year, April 1 to March 31); the trust reported net
shortfall of INR0.4 million on fee income of INR110 million for
2012-13.
FILTER MANUFACTURING: CRISIL Cuts INR35MM Cash Credit Rating to D
-----------------------------------------------------------------
CRISIL has downgraded its rating on the bank facilities of Filter
Manufacturing Industries Private Limited (FMIPL) to 'CRISIL
D/CRISIL D' from 'CRISIL B+/Stable/CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 30 CRISIL D (Downgraded from
'CRISIL A4')
Cash Credit 35 CRISIL D (Downgraded from
'CRISIL B+/Stable')
Letter of Credit 10 CRISIL D (Downgraded from
'CRISIL A4')
Proposed Long Term 18 CRISIL D (Downgraded from
Bank Loan Facility 'CRISIL B+/Stable')
Proposed Long Term 3 CRISIL D (Downgraded from
Bank Standby Line 'CRISIL B+/Stable')
of Credit
The rating downgrade reflects delays in FMPL's bank loan
repayments. The company's liquidity has been severely impaired,
following stretched debtor cycle in the recent months.
The rating continues to reflect FMIPL's modest scale and working
capital intensity of operations. These rating weaknesses are
partly offset by its promoters' extensive experience in the
industrial filter and air pollution control (APC) segments and its
healthy customer profile.
FMIPL, incorporated in 1990, designs and erects industrial filters
and APC systems, catering to railways, steel, fertilizers, and
power industries. The company is also into fabrication of sheet
metal and manufacturing and trading of medical disposables. The
company is managed by Mr. Pritish Basu.
For 2012-13 (refers to financial year, April 1 to March 31), the
company reported a profit after tax (PAT) of INR3.9 million on net
sales of INR115.8 million, as against a PAT of INR4.0 million on
net sales of INR117.1 million in 2011-12.
GARIB NAWAZ: CRISIL Reaffirms 'D' Rating on INR35MM Cash Credit
---------------------------------------------------------------
CRISIL's rating on the long-term bank facilities of Garib Nawaz
Polymers Private Limited (GNPPL; part of the GN group) continue to
reflect instances of delay by the GN group in meeting its term
debt obligations on account of its weak liquidity.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 35 CRISIL D (Reaffirmed)
Funded Interest
Term Loan 11.4 CRISIL D (Reaffirmed)
Working Capital
Term Loan 27 CRISIL D (Reaffirmed)
Term Loan 24.2 CRISIL D (Reaffirmed)
The group has delayed paying the instalments on its term loan by
more than a day. The GN group's topline declined whereas the
interest burden of the group has remained large. The group has
also incurred losses for the past two years along with muted net
cash accruals. The group paid the instalment on Funded Interest
Term-Loan (FITL) due on September 30, 2014, after October 10,
2014. CRISIL believes that the GN group's liquidity will remain
weak over the medium term on account of yet-to-stabilise
operations.
The GN group also has a weak financial profile marked by muted
debt-protection measures and high gearing, small scale of
operations in the intensely competitive packaging industry, and
working-capital-intensive operations. However, the group has a
moderate operating efficiency supported by fiscal benefits and
diverse applications of its product.
For arriving at its rating, CRISIL has combined the business and
financial risk profiles of GNPPL and G.N. Pet (GNP). This is
because the two entities, together referred to as the GN group,
are in the same line of business, have close operational and
financial linkages, and are under a common management.
GNPPL, incorporated in 2007 and promoted by Mr. Sunil Bansal,
manufactures polyethylene terephthalate bottles for consumers in
the pharmaceuticals industry. It commenced commercial operations
in 2008.
In 2009, Mr. Sunil Bansal established the proprietorship concern,
GNP, which is also in the same line of business. GNP commenced
commercial operations in 2011. Both the group entities'
manufacturing facilities are located in Baddi (Himachal Pradesh).
GOLDSTAR BATTERY: CRISIL Cuts Rating on INR90MM Bill Disc. to B-
-----------------------------------------------------------------
CRISIL has downgraded its long term rating on the bank facilities
of Goldstar Battery Private Limited (GBPL) to CRISIL B-/Stable
from CRISIL B/Stable while reaffirming the short term rating at
'CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bill Discounting 90 CRISIL B-/Stable (Downgraded
from 'CRISIL B/Stable')
Cash Credit 60 CRISIL B-/Stable (Downgraded
from 'CRISIL B/Stable')
Corporate Loan 20 CRISIL B-/Stable (Downgraded
from 'CRISIL B/Stable')
Letter of Credit 50 CRISIL A4 (Reaffirmed)
Proposed Long Term 19 CRISIL B-/Stable (Downgraded
Bank Loan Facility from 'CRISIL B/Stable')
Term Loan 41 CRISIL B-/Stable (Downgraded
from 'CRISIL B/Stable')
The rating downgrade reflects a deterioration in the liquidity
profile of the company in 2013-14 (refers to financial year
starting April 1), marked by its accruals inadequate to meet its
debt obligations, driven by a substantial decline in its revenues
on the back of decline in orders from its top 2 customers. Revenue
of the company declined year-on-year by around 21% in 2013-14
resulting in it generating cash accruals of INR10.6 million in
2013-14 as against its repayment obligations of INR28.8 million in
2013-14. CRISIL expects the accruals of the company to be
inadequate to meet its debt obligations over the medium term and
the liquidity profile of the company would have to be supported
through infusion of funds from promoters.
CRISIL's ratings on the bank facilities of GBPL also reflect
GBPL's below-average financial risk profile, marked by high
gearing and weak debt protection metrics, and its large working
capital requirements. These rating weaknesses are partially offset
by the extensive experience of GBPL's promoters in the automobile
battery industry.
Outlook: Stable
CRISIL believes that GBPL 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 significantly
improves its working capital management or generates higher-than-
expected cash accruals, or if its promoters infuse substantial
equity, resulting in improvement in its liquidity profile.
Conversely, the outlook may be revised to 'Negative' if GBPL's
financial risk profile deteriorates, most likely because of
unexpected pressure on its revenues and profitability, leading to
less-than-anticipated cash accruals, or larger-than-expected,
debt-funded capex, or substantial increase in working capital
requirements.
GBPL, established in 1991, manufactures batteries ranging from 35
ampere hour (AH; for small cars) to 200 AH (for large trucks and
inverters). The company's manufacturing unit is in Jamnagar
(Gujarat). GBPL is currently managed by Mr. Muljibhai Pansara
along with his brother, Mr. Amrutlal Pansara, and his two sons,
Mr. Navneet Pansara and Mr. Vishal Pansara.
The company reported a profit after tax (PAT) of INR0.85 million
on net sales of INR488.2 million in 2013-14 as against a PAT of
INR1.73 million on net sales of INR618.9 million in 2012-13.
GYANDHARA EDUCATION: ICRA Puts B- Rating on INR8cr Term Loan
------------------------------------------------------------
ICRA has assigned a long term rating of [ICRA]B- to the INR8.00
crore term loan of Gyandhara Education Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based-Term 8.00 [ICRA]B- assigned
Loans
Rating Rationale The rating takes into account GEPL's aggressive
capital structure and depressed debt coverage indicators resulting
from the debt funded capex undertaken by the company in the past,
along with the small scale of its current operations leading to
low profits and nominal cash accruals. The assigned rating also
takes into account the company's exposure to significant asset
concentration risk with revenues being generated only from a
school and a pre-school; and the inherent cash flow mismatches,
given the nature of business of education institutes which makes
appropriate/proper treasury operations critical in meeting debt
service obligations in a timely manner. The rating, however, draws
comfort from the established franchise partner Delhi Public School
under which the school has been set up.
GEPL was incorporated as a private limited company in September
2009. The company owns the infrastructure being used by the school
which is managed by a Society, Gyandhara Shiksha Samiti (GSS). GSS
has set up a school as a franchisee of Delhi Public School (DPS)
at Raigarh, Chhattisgarh. During the year 2013-14, GEPL also
started DPS Kids, a Kindergarten running from nursery to class 1.
Recent Results
During FY14, the consolidated entity recorded a profit after tax
(PAT) of INR0.11 crore on operating income of INR3.86 crore as
against a PAT of INR0.08 crore on operating income of INR3.26
crore in the previous year.
IFMR CAPITAL: ICRA Assigns B(SO) Rating to INR4.07cr PTC A2 Issue
-----------------------------------------------------------------
ICRA had assigned conditional [ICRA]BBB(SO) rating and conditional
[ICRA]B(SO) rating to proposed PTC A1 and PTC A2 issuance by IFMR
Capital MOSEC Eucleia 2014 [SPV for the ABS transaction] backed by
micro loan receivables originated by Asirvad Microfinance Private
Limited (Asirvad), Disha Microfin Private Limited (Disha), Future
Financial Servicess Limited (FFSL), Fusion Microfinance Private
Limited (Fusion) and S V Creditline Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Collateral IFMR 41.15 [ICRA]BBB(SO)
Capital Mosec
Eucleia 2014
PTC Series A1
Collateral IFMR 4.07 [ICRA]B(SO)
Capital Mosec
Eucleia 2014
PTC Series A2
Since the executed transaction documents are in line with the
rating conditions and the legal opinion and due diligence audit
certificate have been provided to ICRA, the said ratings have now
been confirmed as final.
KAMDHENU COTTON: CRISIL Ups Rating on INR172MM Term Loan to B+
--------------------------------------------------------------
CRISIL has upgraded its rating on the long-term bank facilities of
Kamdhenu Cotton & Spinning Mills Pvt Ltd to 'CRISIL B+/Stable'
from 'CRISIL B/Stable' and has reaffirmed its rating on the
company's short-term bank facilities at 'CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 5 CRISIL A4 (Reaffirmed)
Cash Credit 58 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
Letter of Credit 10 CRISIL A4 (Reaffirmed)
Proposed Long Term 27.5 CRISIL B+/Stable (Upgraded
Bank Loan Facility from 'CRISIL B/Stable')
Standby Line of Credit 7.5 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
Term Loan 172 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
The rating upgrade reflects improvement in KCSM's business risk
profile, driven by stabilisation of its operations and its
operating profitability. The upgrade also reflects improvement in
KCSM's financial risk profile, marked by improvement in its debt
protection measures and gearing. CRISIL believes that KCSM will
sustain the improvement in its business and financial risk
profiles over the medium term, supported by its promoters'
extensive experience in the textile industry and its healthy
accretion to reserves.
The ratings reflect KCSM's small scale of operations in the
intensely competitive textile industry and the susceptibility of
its operating margin to fluctuations in raw material prices. The
ratings also reflect the company's large working capital
requirements. These rating weaknesses are partially offset by the
extensive experience of KCSM's promoters in the textile industry
and its above-average financial risk profile marked by comfortable
debt protection measures.
Outlook: Stable
CRISIL believes that KCSM 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 through equity infusion or substantial
cash accruals, backed by increase in its scale of operations and
sustained profitability. Conversely, the outlook may be revised to
'Negative' if its financial risk profile weakens most likely
because of decline in its revenue and profitability, large debt-
funded capital expenditure, or weakening of its liquidity on
account of increase in working capital requirements.
KCSM, incorporated in 2008, is promoted by Ludhiana (Punjab)-based
Dhir and Johar families. It commenced operations in January 2013.
The company is actively managed by Mr. Puneet Dhir and his
brother-in-law, Mr. Manav Johar. KCSM manufactures synthetic yarn
(polyester, polyester-blended, and acrylic yarn).
KCSM reported net profit of INR0.24 million on net revenue of
INR407.98 million for 2013-14 (refers to financial year, April 1
to March 31) vis-a-vis net loss of INR3.96 million on net revenue
of INR32.73 million for 2012-13.
KISSAN AGRO: CRISIL Ups Rating on INR60MM Cash Credit to B+
-----------------------------------------------------------
CRISIL has upgraded its long-term rating on the bank facilities of
Kissan Agro Industries (KAI) to 'CRISIL B+/Stable' from 'CRISIL
B/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 60 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
Term Loan 37.5 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
The rating upgrade reflects the improvement in KAI's business and
financial risk profiles, driven by significant increase in its
scale of operations over 2013-14 (refers to financial year, April
1 to March 31) and the first half of 2014-15, after it commenced
operations in November 2012. The firm has achieved sales of INR942
million in 2013-14 against INR420 million in 2012-13
The higher sales have resulted in an improvement in KAI's accruals
and net worth. Hence, its gearing has improved to 2.7 times as on
March 31, 2014, from 3.2 times as on March 31, 2013, though the
gearing still remains high. The firm's debt protection metrics
were average because of its large debt; its interest coverage and
net cash accruals to total debt ratios are estimated at 1.9 times
and 0.12 times, respectively, for 2013-14, and are expected to
remain at similar levels over the medium term. CRISIL believes
that KAI's financial risk profile will improve over the medium
term with increase in scale of operations and higher cash
accruals.
The rating reflects KAI's weak financial risk profile, marked by
high gearing and weak debt protection metrics, and its modest
scale operations. These rating weaknesses are partially offset by
the extensive experience of the firm's partners in the industry,
and its diversified product portfolio and end-user industries.
Outlook: Stable
CRISIL believes that KAI will continue to benefit over the medium
term from the extensive industry experience of its partners. The
outlook may be revised to 'Positive' if the firm increases its
scale of operations, and improves its profitability, leading to a
better financial risk profile. Conversely, the outlook may be
revised to 'Negative' in case of a its financial risk profile
weakens, most likely because of lengthening of its working capital
cycle or large debt-funded capital expenditure.
KAI was set up as a partnership firm in 2012 by Mr. Tarsem Chand,
his son, Mr. Pawan Kumar, and their relative, Smt. Promila. The
firm is located in Mandi Adampur (Haryana). It is involved in
cotton ginning, cotton oil extracting, and guar gum splits
manufacturing. The firm commenced commercial operations in
November 2012.
KOCHAR OVERSEAS: CRISIL Reaffirms B Rating on INR250M Cash Credit
-----------------------------------------------------------------
CRISIL's ratings on the bank facilities of Kochar Overseas Pvt Ltd
(KOPL) continue to reflect KOPL's weak financial risk profile
marked by high gearing and weak debt protection metrics, its large
working capital requirements, and small scale of operations.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 250 CRISIL B/Negative (Reaffirmed)
Foreign Bill Purchase 60 CRISIL A4 (Reaffirmed)
Packing Credit 120 CRISIL A4 (Reaffirmed)
Proposed Long Term
Bank Loan Facility 120 CRISIL B/Negative (Reaffirmed)
Proposed Short Term
Bank Loan Facility 100 CRISIL A4 (Reaffirmed)
Term Loan 35 CRISIL B/Negative (Reaffirmed)
The ratings also reflect the company's susceptibility to changes
in regulations governing the rice industry, to volatility in raw
material prices, and to fluctuations in rainfall. These rating
weaknesses are partially offset by the extensive experience of
KOPL's promoters in the rice industry, and the benefits expected
from the healthy growth prospects for the industry.
Outlook: Negative
CRISIL believes that KOPL's financial flexibility will remain
constrained over the medium term because of its sizeable doubtful
and stretched receivables. The ratings may be downgraded in case
of deterioration of KOPL's liquidity because of continued
stretched receivables without equity infusion, or decline in its
cash accruals on account of lower revenue or profitability.
Conversely, the outlook may be revised to 'Stable' if KOPL
realises its doubtful receivables without any further delays, or
if its promoters infuse sizeable equity capital, leading to
improvement in its financial flexibility and capital structure.
KOPL was established in 2006, promoted by Mr. Ajit Singh Kochar.
The company mills and processes basmati and non-basmati rice and
processes parboiled rice. It sells its products in the overseas
and domestic markets. KOPL's facilities, in Amritsar (Punjab),
have milling capacity of 8 tonnes per hour; the company also has
two sorting plants.
L N FIELDS: CRISIL Assigns B- Rating to INR150MM Overdraft Loan
---------------------------------------------------------------
CRISIL has assigned its 'CRISIL B-/Stable' rating to the long-term
bank facilities of L N Fields Pvt Ltd (LNFPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Overdraft Facility 150 CRISIL B-/Stable
The rating reflects the company's weak financial risk profile, and
small and working-capital-intensive nature of operations. These
rating weaknesses are partially offset by LNFPL's promoters'
extensive experience in the agro chemicals industry and
established relationship with customers.
Outlook: Stable
CRISIL believes that LNFPL will maintain its business risk profile
backed by its promoters' extensive experience in the agro
chemicals industry. The outlook may be revised to 'Positive' in
case the company generates higher-than-expected sales along with
healthy profitability leading to improvement in its financial risk
profile. Conversely, the outlook may be revised to 'Negative' in
case LNFPL's working capital management deteriorates further or
the company undertakes any debt-funded capital expenditure
programme leading to further deterioration in its financial risk
profile.
LNFPL was founded in 1998 by Mr. Arvind Karnani and his family, as
a trader of agro chemicals used in tea plantation industry. The
company is based in Kolkata (West Bengal).
LANCY CONSTRUCTIONS: CRISIL Rates INR130MM Overdraft Loan at B
--------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable' rating to the long term
bank facility of Lancy Constructions (LC).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Overdraft Facility 130 CRISIL B/Stable
The rating reflects LC's weak financial risk profile marked by
moderate gearing, low net worth and weak debt protection metrics,
modest scale of operations in the intensely competitive and highly
fragmented ready mix concrete (RMC) and civil construction
segment, and working capital intensive nature of operations.
These rating weaknesses are partially offset by promoter's
extensive industry experience in the construction industry.
Outlook: Stable
CRISIL believes that LC will continue to benefit from its
promoter's experience in the construction industry over the medium
term. The outlook may be revised to 'Positive' if the company's
revenue and profitability increase significantly on a sustainable
basis while improving its working capital management. The outlook
may be revised to 'Negative' if LC's revenues and profitability
are lower-than-expected, or if the liquidity deteriorates most
likely due to further stretch in receivables or if the company
undertakes large debt-funded capital expenditure leading to
deterioration in the financial risk profile.
Incorporated in 1973, LC is engaged in manufacture of RMC used in
the construction industry. The company is also engaged in civil
construction works for the real estate sector. Based out of
Mangalore, the company is promoted by Mr.Lancy Mascarenhas.
For 2013-14 (refers to financial year, April 1 to March 31), LC
reported, on a provisional basis, a net loss of of INR5.8 million
on net sales of INR95 million, as against a net loss of INR3.4
million on net sales of INR135.7 million for 2012-13.
LUXMI RICE: ICRA Reaffirms B Rating on INR15cr LT Fund Based Loan
-----------------------------------------------------------------
ICRA has assigned its long term rating of [ICRA]B to the INR3.00
crore long term fund based bank facilities of Luxmi Rice Mill.
ICRA also has reaffirmed its long term rating of [ICRA]B on the
INR15.00 crore long term fund based limits of LRM.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based-Long 18.00 [ICRA]B; reaffirmed/assigned
Term
The ratings continue to be constrained by substantial increase in
LRM's gearing levels due to debt funding of its large working
capital requirements and the debt funded capital expenditure
undertaken by the firm in 2013 and 2014. The rating is further
constrained by the firm's low net profitability and moderate
coverage indicators in the past. The rating also takes into
account the high intensity of competition in the rice milling
industry and agro climatic risks, which can affect the
availability of paddy in adverse weather conditions. However, the
proximity of the mill to major rice growing areas results in easy
availability of paddy and mitigates this risk to a certain extent.
The ratings also derive comfort from the extensive experience of
the partners in the rice industry and their strong relationships
with several customers and suppliers.
LRM was established in 1985 as a partnership firm with Mr. Ishwar
Chand, Mr. Rohtash Kumar, Mr. Ram Pal Goyal, Mr. Motiram, Mr.
Dharampal and Mr Ashok Kumar as partners. In the year 1986 the
partnership firm was reconstituted as Mr. Dharampal retired from
the firm. Further, in 1997, the partnership firm was again
reconstituted after the retirement of Mr. Motiram, and the
remaining partners decided to share profits in equal ratio. LRM is
engaged in the business of processing and trading of rice in the
domestic market. The firm has its manufacturing unit at Sirsal
Road, Assandh in Karnal. The milling capacity of the plant has
been increased to 8 tonnes/hr in February 2014 from 2 tonnes/hr.
Recent Results
LRM reported a net profit of INR0.02 crore on an operating income
of INR22.04 crore for 2013-14 against a net profit of INR0.02
crore on an operating income of INR16.40 crore for the previous
year.
PEKON ELECTRONICS: CRISIL Ups Rating on INR70MM Bank Loan to B+
----------------------------------------------------------------
CRISIL has upgraded its ratings on the long term bank facilities
of Pekon Electronics Limited (PEL) to 'CRISIL B+/Stable' from
'CRISIL B/Stable' while reaffirming the short term bank facility
at 'CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 10 CRISIL A4 (Reaffirmed)
Cash Credit 40 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
Letter of Credit 100 CRISIL A4 (Reaffirmed)
Proposed Long Term 70 CRISIL B+/Stable (Upgraded
Bank Loan Facility from 'CRISIL B/Stable')
The rating upgrade reflects significant improvement in PEL's
business risk profile driven by diversification in the business
segment. PEL's revenues have increased significantly to around
Rs505 million in 2013-14 from INR189.9 million in 2012-13 backed
by increase in trading from plastic granules and import licenses.
The company has recorded revenues around INR540 million till
August 2014 and is likely to generate revenues around INR1000
million in 2014-15. CRISIL believes that the company will benefit
from the diversification in its product portfolio over the medium
term.
Outlook: Stable
CRISIL believes that Pekon Electronics Limited will continue to
benefit from the promoters' industry experience over the medium
term. The outlook may be revised to 'Positive' if PEL's financial
risk profile improves, most likely with a sustained improvement in
its operating profitability, an equity infusion, or an increase in
its accretion to reserves. Conversely, the outlook may be revised
to 'Negative' if PEL undertakes a large, debt-funded capital
expenditure (capex) programme, thus weakening its debt protection
metrics, or due to competitive pressure resulting in a decline in
its profitability.
PEL was incorporated in 1985 as a public limited company (closely
held). The company is promoted by Mr. Purshottam Bhagchandka, Mr.
Dhiraj Bhagchandka, and Mr. Suresh Kumar Jalani. PEL trades
plastic granules and import licenses, cotton fabrics and
manufactures jute bags. In 2013-14, entire revenues were from
trading; however, in 2011-12, about 50 per cent of the revenues
were from manufacturing of jute. PEL has discontinued
manufacturing of jute because of operating losses in the segment.
On a provisional basis, PEL reported a profit after tax (PAT) of
INR2 million on net sales of INR505 million for 2013-14 (refers to
financial year, April 1 to March 31) vis-a-vis a PAT of INR0.9
million on net sales of INR190 million for 2012-13.
REAL REALTY: CRISIL Lowers Rating on INR45MM Term Loan to 'D'
-------------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facilities
of Real Realty Management Company Limited (RRMCL) to 'CRISIL D'
from 'CRISIL B/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term 15 CRISIL D (Downgraded from
Bank Loan Facility 'CRISIL B/Stable')
Term Loan 45 CRISIL D (Downgraded from
'CRISIL B/Stable')
The rating downgrade reflects the delays by RRMCL in servicing its
term loan repayments. The irregularities have been on account of
the weakened liquidity position, on the back of slow offtake of
projects in hand; which impacted RRMCL's business and financial
risk profiles significantly.
RRMCL continues to be exposed to cyclicality in the Indian real
estate industry and geographical concentration, as it generates
majority of its revenues from the state of Gujarat. These rating
weaknesses are partially offset by the partners' extensive
industry experience.
RRMCL was incorporated in 2005 at Rajkot (Gujarat) and is engaged
in real estate development for residential units. It is currently
promoted by Mr. Rajesh Rajyaguru and Mr. Paresh Joshi.
For 2013-14 (refers to financial year April 1 to March 31), RRMCL
has reported a net loss of INR3.4 million on net sales of INR45.3
million as against a net profit of INR0.48 million on net sales of
INR11.3 million for 2012-13.
S.R.S. EXPORTS: ICRA Reaffirms 'B+' Rating on INR2cr Cash Loan
--------------------------------------------------------------
ICRA has reaffirmed the [ICRA]A4 rating to the INR30.00 crore
short-term non-fund based bank facility of S.R.S. Exports Private
Limited. ICRA has also reaffirmed the [ICRA]B+ rating to the
INR2.00 crore long-term fund based bank facility (Sub-limit of
short-term non-fund based bank facility) of SEPL.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Short Term Non Fund 30.00 [ICRA]A4 Reaffirmed
Based Limit- Inland/
Foreign Letter of
Credit
Long Term Fund Based 2.00 [ICRA]B+ Reaffirmed
Limit- Cash Credit
The reaffirmation of ratings continues to reflect the low profit
margins inherent in the trading nature of the company's business
and its vulnerability to commodity price fluctuation and adverse
foreign exchange volatility. ICRA notes that the company's
business is susceptible to regulatory risks with the change in
government's policy regarding participation in import and the duty
structures and high competitive intensity due to the presence of
numerous players. However, the ratings favorably consider the
established experience of the promoters in the trading of agro
commodities and the company's financial profile characterized by
moderate growth in revenues, conservative capital structure and
comfortable coverage indicators.
S.R.S. Exports Private Limited (SEPL) commenced operations in
1995, and is engaged in the business of trading of pulses, wheat,
sugar, and other food items. The company has its head office in
Jalandhar and an administrative office in Navi Mumbai.
Recent Results
During the financial year 2014, SS registered a profit after tax
of INR0.43 crore on an operating income of INR128.59 crore.
S THARTIUS: CRISIL Assigns B+ Rating to INR50MM Overdraft Loan
--------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to
the long-term bank facilities of S Thartius Engineering
Contractors (STEC).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 70 CRISIL A4
Overdraft Facility 50 CRISIL B+/Stable
The rating reflects STEC's exposure to risks related to its
tender-based business, its modest scale of operations, and its
large working capital requirements. These rating weaknesses are
partially offset by the extensive experience of STEC's promoters
in the engineering construction business, its established
relationship with its key clients, and its moderate order book.
Outlook: Stable
CRISIL believes that STEC will continue to benefit over the medium
term from its promoters' extensive experience in the engineering
construction business. The outlook may be revised to 'Positive' if
the firm significantly scales up operations while sustaining its
profitability, or improves its working capital management leading
to improvement in its financial risk profile. Conversely, the
outlook may be revised to 'Negative' if the firm's financial risk
profile weakens because of lengthening of its working capital
cycle, or if the firm undertakes a large debt-funded capital
expenditure programme.
STEC, is a Tuticorin (Tamil Nadu)-based partnership firm, engaged
in engineering, procurement, and construction work for
construction of pipelines for oil, gas, and water. Its day-to-day
operations are managed by the Thartius family.
STEC reported a net profit of INR7.25 million on net sales of
INR173 million for 2013-14 (refers to financial year, April 1 to
March 31), vis-a-vis a net profit of INR3.30 million on net sales
of INR118 million for 2012-13.
SAICON TILES: CRISIL Assigns B Rating to INR52.5MM Term Loan
------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable/CRISIL A4 ratings to the
bank facilities of Saicon Tiles Pvt Ltd (STPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 52.5 CRISIL B/Stable
Proposed Long Term
Bank Loan Facility 37.5 CRISIL B/Stable
Bank Guarantee 5 CRISIL A4
Cash Credit 30 CRISIL B/Stable
The ratings reflect STPL's start-up phase and modest scale of
operations in the highly competitive ceramics industry, and its
large working capital requirements. These rating weaknesses are
partially offset by the extensive industry experience of STPL's
promoters and proximity of its manufacturing facilities to raw
material and labour sources.
Outlook: Stable
CRISIL believes that STPL will continue to benefit over the medium
term from its promoters' extensive industry experience. The
outlook may be revised to 'Positive' if the company stabilises its
operations on time, leading to large cash accruals. Conversely,
the outlook may be revised to 'Negative' in case of low accruals
because of reduced order flow or profitability, or if its
financial risk profile weakens most likely because of stretch in
working capital cycle or substantial debt-funded capital
expenditure.
STPL, incorporated in 2013, is promoted by the Morbi (Gujarat)-
based Mr. Kamlesh Patel, Mr. Prakashkumar Dalsaniya, Mr. Jagdish
Dadhaniya, Mr. Pravinbhai Dalsaniya, and Mr. Hareshbhai Sershiya.
The company manufactures wall tiles at its facilities in Morbi. It
commenced commercial operations in July 2014.
SEINUMERO NIRMAN: CRISIL Reaffirms B Rating on INR70MM Cash Loan
----------------------------------------------------------------
CRISIL's rating on the bank facilities of Seinumero Nirman Pvt Ltd
(SNPL) continues to reflect the company's modest scale of
operations in the competitive metal components manufacturing
industry.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 70 CRISIL B/Stable (Reaffirmed)
Proposed Long Term 44.6 CRISIL B/Stable (Reaffirmed)
Bank Loan Facility
Term Loan 35.4 CRISIL B/Stable (Reaffirmed)
The ratings also reflect the working capital intensive nature of
the company's operations and its levered capital structure. These
rating weaknesses are mitigated by the extensive experience of
SNPL's promoters in the industry, coupled with long relationships
with customers and comfortable order position.
Outlook: Stable
CRISIL believes that SNPL will benefit over the medium term from
extensive industry experience of its promoters and established
customer relationships. The outlook may be revised to 'Positive'
in of substantial improvement in the company's capital structure
most likely through infusion of equity while maintaining steady
growth in scale of operations and cash generation from business.
Conversely, the outlook may be revised to 'Negative' if
unprecedented delay in realization of receivables leads to
deterioration of liquidity or a higher than anticipated debt-
funded capital expenditure (capex) strains the financial profile.
Update
Due to continued subdued demand from the domestic auto-component
industry, the company increased its focus on exports to overseas
auto-component and hydraulic component manufacturers like Magna
Power Crane and Eton Technologies. Consequently, the company
maintained its turnover at about INR242 million and operating
margin at 19 per cent in 2013-14 (refers to the financial year,
April 1 to March 31). The turnover is expected to improve to over
INR320 million in 2014-15, while maintaining the operating margin
on the back of a comfortable order book from the overseas clients.
SNPL's financial risk profile continues to remain constrained by a
levered capital structure. The company has a modest networth of
about INR24 million and a gearing of about 5.5 times as on
March 31, 2014. The promoters have extended about INR46 million of
funds to the company, which is expected to be converted into
equity upon receipt of appropriate regulatory approvals. Such a
conversion alongwith additional need-based financial support from
promoters to fund incremental working capital requirements arising
from growth will be crucial for improvement in the capital
structure and liquidity of the company and hence will remain a key
rating sensitivity factor over the medium term. The company's
liquidity is constrained by the working capital intensity of its
operations. Due to ramp-up in scale of operations and longer
credit provided to export clients, working capital cycle has
increased to gross current assets of about 250 days as on March
31, 2014 from about 180 days a year earlier. Stabilization of the
working capital cycle over the near term alongwith availability of
sufficient bank lines will aid the company in maintaining its
liquidity over the medium term.
SNPL was incorporated in 1997 by Mr. C L Mengale. The company is
engaged in manufacturing of axle auto components, engine
components and hydraulic components. SNPL has two manufacturing
units in Pune district (Maharashtra). Mr. Parag Mengale and Mr.
Tushar Mengale, sons of Mr. C L Mengale, are actively involved in
managing the company's operations.
SHIV INDUSTRIES: ICRA Suspends 'D' Rating on INR15cr LT Loan
------------------------------------------------------------
ICRA has suspended [ICRA]D rating assigned to the INR15.00 crore
long term fund based bank limits of Shiv Industries (Food) Private
Limited. The suspension follows ICRA's inability to carry out a
rating surveillance in the absence of the requisite information
from the company.
SIMOLA VITRIFIED: ICRA Reaffirms B Rating on INR17.5cr Cash Loan
----------------------------------------------------------------
ICRA has reaffirmed the long term rating of [ICRA]B to INR15.28
crore (reduced from INR18.03 crore) term loans and INR17.50 crore
fund based cash credit facility of Simola Vitrified Private
Limited. ICRA has also reaffirmed the short term rating of
[ICRA]A4 to INR3.23 crore (reduced from INR5.25 crore) foreign
letter of credit facility (sublimit of term loan/cash credit) and
INR3.50 crore bank guarantee facility of Simola Vitrified Private
Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term Loan 15.28 [ICRA]B; Reaffirmed
Cash Credit 17.50 [ICRA]B; Reaffirmed
Foreign Letter
of Credit (2.23) [ICRA]A4; Reaffirmed
Foreign Letter
of Credit (1.00) [ICRA]A4; Reaffirmed
Bank Guarantee 3.50 [ICRA]A4; Reaffirmed
The ratings however, constrained by SVPL's moderate scale of
operations with the financial profile characterized by low
profitability, leveraged capital structure and weak coverage
indicators. The ratings also factor in the vulnerability of
profitability and cash flows to cyclicality inherent in the real
estate industry, which is the main consuming sector and
susceptibility of SVPL's margins to raw material price volatility
and increasing prices of gas, as it is the major source of fuel.
The ratings also take into consideration the susceptibility of
operations to the intense competition, with the presence of large
established organized tile manufacturers and unorganized players.
ICRA also takes notes that the single product portfolio (vitrified
tiles) restricts sales prospects to large distributors and
institutional players as they prefer to deal with producers having
entire ceramic tile product range.
The ratings, however, favourably consider the extensive experience
of promoters in the ceramic industry, favourable location of the
company's plant resulting in easy access to raw material sources
as well as diversification in product profile as well as presence
in digital printed segment which is expected to result in better
realization.
Simola Vitrified Private Limited was incorporated in March 2010
and is promoted by Mr. Vishal H. Adroja and Mr. Rajesh N. Shirvi.
The promoters are also involved in the manufacturing of wall tiles
and floor tiles through other group companies. The manufacturing
plant of the company has an installed capacity to produce 50,000
MTPA of vitrified tiles. The company currently manufactures
vitrified tiles and glazed vitrified tiles.
Recent Results
During FY14, SVPL reported an operating income of INR65.23 crore
and profit after tax of INR0.63 crore as against an operating
income of INR75.25 crore and a profit after tax of INR1.25 crore
during FY13.
SRI KAMATCHI: CRISIL Assigns B+ Rating to INR57.5MM Cash Credit
---------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to
the bank facilities of Sri Kamatchi Traders (SKT).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Short Term Bank Facility 3 CRISIL A4
Cash Credit 57.5 CRISIL B+/Stable
Proposed Long Term 9.5 CRISIL B+/Stable
Bank Loan Facility
The ratings reflect SKT's below-average financial risk profile
marked by its highly leveraged capital structure and subdued debt
protection metrics. The ratings also factor in the firm's modest
scale of operations and the susceptibility of its operating margin
to volatility in raw material prices. These rating weaknesses are
partially offset by its partners' extensive experience in the food
processing industry, and their financial support to the firm.
Outlook: Stable
CRISIL believes that SKT will continue to benefit over the medium
term from its partners' extensive industry experience. The outlook
may be revised to 'Positive' in case of significant improvement in
the firm's financial risk profile on account of substantial cash
accruals led by improvement in scale and operating profitability
or because of capital infusion by partners. Conversely, the
outlook may be revised to 'Negative' if SKT undertakes large debt-
funded expansion programme, reports a substantial decline in
revenue or profitability, or in case of a stretch in its working
capital cycle, constraining its financial risk profile.
Set up in 1985 as a partnership firm in Chennai, SKT processes
pulses, mainly urad and toor dal, to produce flour used by food
processing players. The firm's daily operations are managed by
managing partner Mr. S C Mohan.
SKT reported profit after tax (PAT) of INR1.8 million on net sales
of INR357.6 million for 2013-14 (refers to financial year, April 1
to March 31), against PAT of INR1.5 million on net sales of INR340
million in 2012-13.
TRANSONS OVERSEAS: CRISIL Assigns B Rating to INR10MM Cash Loan
---------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable/CRISIL A4' ratings to the
bank facilities of Transons Overseas India (P) Ltd. (TOPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 2.5 CRISIL B/Stable
Cash Credit 10 CRISIL B/Stable
Letter of Credit 90 CRISIL A4
The ratings reflect TOPL's start-up phase of operations resulting
in small scale, and the high customer concentration in its revenue
profile. These ratings weaknesses are partially offset by the
extensive experience of TOPL's promoters in the transformer
manufacturing industry.
Outlook: Stable
CRSIL believes that TOPL's business risk profile will be supported
over the medium term by its promoters' extensive industry
experience. The outlook may be revised to 'Positive' if the
company scales up operations while maintaining its operating
margin, and significantly diversifies its customer base thereby
reducing dependence on its group company for revenue. On the other
hand, the outlook may be revised to 'Negative' if TOPL undertakes
a large debt-funded capital expenditure programme, weakening its
financial risk profile, or if its working capital management
weakens, constraining its liquidity.
Established in 2011 and based in Alwar (Rajasthan), TOPL
manufactures copper wires, corrugated wall panels, and circuit
breakers used in transformers. The company was originally set up
as P & M Electricals and Transformers Pvt Ltd (PMEL) and got its
present name in 2012. The company has its manufacturing facility
in Alwar and is managed by Mr. Pawan Kumar Jain and his son Mr.
Mohnish Jain.
TOPL reported a profit after tax (PAT) and net sales of INR3.1
million and INR99.2 million, respectively, for 2013-14 (refers to
financial year, April 1 to March 31).
VARUN FERTILIZERS: CRISIL Reaffirms B+ INR100MM Cash Loan Rating
----------------------------------------------------------------
CRISIL's rating on the long-term bank loan facilities of Varun
Fertilizers Pvt Ltd (VFPL) continues to reflect VFPL's large
working capital requirements, and its susceptibility to government
regulations and monsoon.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 100 CRISIL B+/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility 1.6 CRISIL B+/Stable (Reaffirmed)
Term Loan 15.9 CRISIL B+/Stable (Reaffirmed)
These rating weaknesses are partially offset by the expected
improvement in the company's financial and business risk profiles,
driven by the commencement of single super phosphate (SSP)
manufacturing in 2013-14 (refers to financial year, April 1
toMarch 31) and the extensive experience of its management in the
fertiliser industry.
Outlook: Stable
CRISIL believes that VFPL will continue to benefit over the medium
term from the extensive industry experience of its management, and
commencement of production at its SSP plant. The outlook may be
revised to 'Positive' if the company increases its scale of its
operations and profitability, leading to increase in net cash
accruals; without negatively impacting working capital cycle.
Conversely, the outlook may be revised to 'Negative' if VFPL's
working capital cycle deteriorates, resulting in weakened
financial risk profile, or if it is unable to scale-up its
operations to expected levels. Any adverse impact of regulatory
changes, leading to a weakening of the company's business risk
profile may also result in a 'Negative' outlook.
VFPL was incorporated in 2005 in Indore (Madhya Pradesh). The
company manufactures fertilisers such as Nitrogen-Phosphorous-
Potassium (NPK) and SSP. It has manufacturing capacities of
150,000 tonnes per annum (tpa) of NPK and 120,000 tpa of SSP, at
its plant in Indore. The company is managed by Mr. Ashish Tiwari
and Mr. Abhishek Tiwari.
VFPL reported a profit after tax (PAT) of INR3.9 million on net
sales of INR443 million for 2013-14, as against a PAT of INR2.5
million on net sales of INR217 million for 2012-13.
VELAVAN HYPER: CRISIL Rates INR80MM Cash Credit at 'B'
------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable' rating to the bank
facilities of Velavan Hyper Market (VH; part of the Velavan
group).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 80 CRISIL B/Stable
The rating reflects the Velavan group's below-average financial
risk profile marked by high gearing, and its exposure to intense
competition in the retail industry. These rating weaknesses are
partially offset by the extensive experience of the Velavan
group's promoters and its established regional presence in the
retail segment.
For arriving at the rating, CRISIL has combined the business and
financial risk profiles of VH, Velavan Stores Jewellers (VSJ), and
Velavan Stores (VS). This is because the three entities,
collectively referred to as the Velavan group, are in similar
lines of business and under the same management, and have
significant financial fungibility.
Outlook: Stable
CRISIL believes that the Velavan group will continue to benefit
over the medium term from its promoters' extensive experience in
the retail industry. The outlook may be revised to 'Positive' in
case of improvement in the group's financial risk profile through
greater than expected cash accruals or fund infusion by its
promoters. Conversely, the outlook may be revised to 'Negative' in
case of lower than expected cash accruals or stretch in working
capital requirements, resulting in deterioration in the group's
financial risk profile.
VS, established in 1998, is engaged in apparel retail. VSJ was
established in 2007 and is engaged in jewellery retail. VH was
established in 2014 and operates a supermarket in Tuticorin (Tamil
Nadu). The group's day-to-day operations are managed by Mr. T
Maharajan.
===============
M A L A Y S I A
===============
MALAYSIA AIRLINES: Proposed Privatisation Critical For Survival
---------------------------------------------------------------
New Sabah Times reports that the proposed privatisation of ailing
Malaysia Airlines (MAS) is critical for its survival and minority
shareholders must accept the 27 sen per share offer to them at the
forthcoming extraordinary general meeting (EGM), a research house
analyst said on November 2.
"Basically, MAS is right now going underwater, and shareholders
unable to recoup their investment. So, for the minority
shareholders, it is better to take the 27 sen offer than being
left empty handed," New Sabah Times quotes Ahmad Maghfur Usman,
Regional Transportation Analyst at RHB Research Institute, as
saying. "The saving grace for MAS at this point is privatisation
and without it, the other option is to declare bankruptcy."
He was painting the scenario for minority shareholders ahead of
the crucial November 6 EGM, the report notes.
According to New Sabah Times, Ahmad Maghfur said if the EGM voted
against privatisation, Khazanah Nasional Bhd which owns the
majority stake in MAS, would not want to inject funds into it,
making it tough for the airline then to restructure.
New Sabah Times recalls that Khazanah had in August unveiled a
radical 12-point restructuring plan costing MYR6 billion to save
MAS and MYR1.4 billion would be paid out to minority shareholders,
if they voted for the 27 sen offer.
It would also pave the way for the delisting of MAS from Bursa
Malaysia, says New Sabah Times.
"Going for bankruptcy is very challenging. This will also be the
worst case scenario for the minority shareholders and will put
pressure on the share price as such. MAS won't be trading at the
same level.
"I would urge the minority shareholders therefore, to get their
priorities right at the EGM," Mr. Ahmad Maghfur, as cited by New
Sabah Times, said.
He told Bernama that the 27-sen offer was an "attractive price",
with all things considered, and the dire circumstances MAS has
plunged into, New Sabah Times relates.
"It is an attractive offer. While not really much from where the
share price is currently trading at, for the minority
shareholders, it is an attractive exit offer," he said.
He said the privatisation of MAS would actually ensure a smooth
transition for the restructuring, as well as insulate investors
from being exposed to deeper losses," the report quotes Ahmad
Maghfur as saying. "This is good reason why the minority
shareholders need to take up the offer at hand," he added.
Delisting, Ahmad Maghfur said, was a necessary first step to
restructuring, unlike the previous case of Petronas privatising
the Malaysian International Shipping Corporation (MISC), the
report adds.
"MISC was a different landscape back then as it had successfully
disposed of its container vessels division which was bleeding
losses. The shipping industry was then at the bottom of its cycle
and could only go up," he added, in recalling the 1990's move, the
report relays.
New Sabah Times relates that Ahmad Maghfur said in the case of
MAS, the situation was also totally the opposite as the airline is
facing very aggressive competition.
He also contended that there is no basis for minority shareholders
to demand more than the 27 sen offered, says New Sabah Times.
"The outlook for MAS is still very challenging. Since the
announcement on the restructuring, I haven't seen any meaningful
change in terms of the game plan," Mr. Ahmad Maghfur, as cited by
New Sabah Times, said.
* * *
As reported by the Troubled Company Reporter - Asia Pacific on
September 1 2014, The Associated Press said Malaysia Airlines will
cut 6,000 workers as part of a $1.9 billion overhaul announced on
August 29 to revive its damaged brand after being hit by double
passenger jet disasters.
Investigators continue to scour the southern Indian Ocean for
Malaysia Airlines Flight 370, which veered far off course while en
route from Kuala Lumpur to Beijing on March 8 with 239 people on
board, said the report. In July, 298 people were killed
when Flight 17 was blasted out of the sky as it flew over an area
of eastern Ukraine controlled by pro-Russian separatists.
These tragedies have scarred the airline's brand, once associated
with high-quality service, AP added.
Headquartered in Selangor, Malaysia, state-owned Malaysia Airlines
-- http://www.malaysiaairlines.com/-- engages in the business of
air transportation and the provision of related services.
Last year, Malaysia Airlines reported a net loss of MYR1.17
billion ($359 million), its third consecutive year of
net losses, according to The Wall Street Journal. In the three
months that ended June 30, its net loss widened to MYR307 million
from MYR176 million in the year-earlier period, the Journal
disclosed.
====================
N E W Z E A L A N D
====================
MERCY RENOVATORS: 30 Jobs Axed Following Liquidation
----------------------------------------------------
Patrick O'Sullivan at Hawkes Bay Today reports that 30 jobs have
been lost and about NZ$3 million left owing following the
voluntary liquidation of Mercy Renovators, its liquidator said.
The Hastings company, which boasted more than 20,000 house
renovations over more than 20 years, went into voluntary
liquidation last week with many people having paid deposits for
work left undone in their homes, according to Hawkes Bay Today.
So far there are 201, unsecured creditor claims totalling
NZ$1.2 million, the report says.
According to the report, liquidator David Ruscoe --
david.ruscoe@nz.gt.com -- of accountancy firm Grant Thornton New
Zealand, said he was actively pursuing the sale of assets "and
potentially some people may pick up work".
"We are trying to get someone to purchase the assets and hopefully
continue with a business," the report quotes Mr. Ruscoe as saying.
The company had left work incomplete "which is very unfortunate"
but some were being completed to allow recovery of outstanding
amounts owed, the report relays.
Hawkes Bay Today relates that the liquidator's first report said
the likelihood of any distribution to creditors was "unknown at
the date of this report".
Valuations on fixed assets, with a book value of NZ$2.3 million,
were being sought. Kiwibank was owed NZ$1.5 million, Hawkes Bay
Today discloses.
Mercy Renovators was a one-stop-shop for home renovations, from
painting and decorating to new kitchens, bathrooms and building
extensions.
PENINSULA ROAD: Big Losses For Creditors After Sale of Land
-----------------------------------------------------------
Tim of Stuff.co.nz reports that receivers have revealed the sale
price of a slice of prime Queenstown land -- NZ$10.1 million --
confirming huge losses for creditors of property developer Nigel
McKenna.
The property at Peninsula Rd, where Lake Wakatipu flows into the
Kawarau River, was sold in July, reportedly to interests
associated with developers Chris and Michaela Meehan, the report
says.
Its sale was the last act in the receivership of McKenna's company
Peninsula Road, which was involved in a grandiose scheme at
Kawarau Falls, says Stuff.co.nz. Secured creditors -- financier
Fortress and Allied Farmers, which took over the assets of Hanover
Finance -- have been repaid just NZ$13 million out of the NZ$127
million they were owed, the report relates.
Unsecured creditors owed about NZ$5 million will receive nothing
from the receivership, Stuff.co.nz discloses.
The report notes that with receivership formally ending on
November 4, handling of the defunct company moves to liquidator
Chris Horton, who said it was too early to say whether anything
further could be done to get money back.
"The files only arrived in the office yesterday [November 4] and
we haven't had a chance to go through them yet," the report quotes
Mr. Horton as saying.
The new owner of the property is Lakes Edge Developments, whose
director is Auckland lawyer Michael Tinkler and whose shares are
held by a nominee of law firm TGT Legal, which specialises in
trusts and personal asset planning, Stuff.co.nz discloses.
Peninsula Road Ltd owned land earmarked for stages two and three
of the NZ$1 billion Kawarau Falls development. It was placed in
receivership on March 2, 2010. Tim Downes and Richard Simpson of
Grant Thornton New Zealand Ltd were appointed receivers and
managers of Peninsula Road. Stages two and three were mortgaged
to Fortress Credit Corporation (Australia) Pty Limited.
Kawarau Falls was owned by Auckland developer Nigel McKenna, who
recently had several other companies placed into liquidation by
creditors seeking payment.
Two McKenna companies behind stage one of Kawarau Falls Station
-- Melview (Kawarau Falls Station) Investments Ltd and Melview
(Kawarau Falls Investments) Development Ltd, were also placed in
receivership by Bank of Scotland International in May 2009.
SOLID ENERGY: Posts NZ$181.9MM Annual Loss For Year Ended June 30
-----------------------------------------------------------------
Paul McBeth at BusinessDesk reports that Solid Energy posted its
third annual loss in a row as the financially distressed state-
owned coal miner wrote down the value of its export operations
amid lower coal price assumptions, and warned of more red ink to
come.
BusinessDesk relates that the Christchurch-based state-owned
enterprise reported a loss of NZ$181.9 million in the 12 months
ended June 30, compared to a loss of NZ$335.4 million a year
earlier, it said in its annual report tabled in Parliament on
October 31. The company's board doesn't anticipate it will return
to profitability until the 2017 financial year, based on its
current projections, the report relays.
According to BusinessDesk, the SOE had a gross loss of NZ$25.6
million as revenue sank 29 percent to NZ$449.1 million, outpacing
a 20 percent drop in the cost of sales to NZ$474.8 million. Solid
Energy took a NZ$110.6 million impairment charge, largely due to
the write down in the value of its export operations.
"The priority of reshaping the company to withstand a challenging
economic environment resulted in substantial cost reductions and
simplification in the company's operations," chief executive Dan
Clifford said in his report, BusinessDesk relays. "A successful
operational performance against plan has assisted us to maintain
market relevance and a long-term ability to supply current and
expected customer demand."
A restructuring of Solid Energy was announced last October,
coinciding with the publication of the annual reports, after
collapsing coking coal prices on world markets exposed the
company's over-commitment to a range of development initiatives,
including development of options to turn lignite coal into diesel
and urea, and renewable energy products such as pellets for wood
burners, BusinessDesk recalls.
Last month, Solid Energy received an extension of its
NZ$103 million remediation indemnity with the Crown to reimburse
the cost of rehabilitation expenses of the company, Pike River
(2012) and Spring Creek Mining Co., recounts BusinessDesk.
According to BusinessDesk, Chair Pip Dunphy said the company had a
tough year "compounded by continued weakness in coal prices and
strength in the NZ dollar exchange rate," and is forecasting a
gradual improvement in coal prices, with a budget of NZ$153/tonne
for 2015.
BusinessDesk says the board signed off on the financial statements
as a going concern, while noting that's based on a recovery in
coking coal prices and that there's a near-term risk that doesn't
happen or the kiwi dollar remains stronger than anticipated.
The accounts were tagged by auditor KPMG, which said there is
"material uncertainty relating to the level of future coal prices,
exchange rates and operating costs that will determine the group's
ability to generate sufficient cash flows to operate within the
group financing arrangements or for any repayment or refinancing
requirements at the maturity of the group financing arrangements,"
according to BusinessDesk.
The auditor also noted the assumptions used in projections for
export operations were sensitive to the same issues, BusinessDesk
adds.
BusinessDesk notes that Solid Energy cut permanent and fixed-term
staff numbers to 862 by the end of the 2014 year from 1,029 a year
earlier, having already stripped out more than 600 jobs in 2013.
The company generated an operational cash inflow of NZ$7.5 million
in the 2014 year compared to an outflow of NZ$49.8 million in
2013, and had cash and equivalents of NZ$71.7 million as at June
30, BusinessDesk relays.
As reported in the Troubled Company Reporter-Asia Pacific on
May 22, 2013, The New Zealand Herald said stricken state owned
coal miner Solid Energy's future appears bleak according to a
recently completed report on the company, Prime Minister John Key
had indicated. According to the Herald, Mr. Key said corporate
advisers KordaMentha had completed their report on the company
which is on the brink of collapse after being crippled by
low coal prices and almost NZ$400 million in debts.
Solid Energy New Zealand Ltd is New Zealand's largest coal mining
company and an investor in research and commercialisation of
sustainable forms of energy that use coal, coal seam gas, biomass,
biodiesel and solar. Solid Energy's core mining business
includes hard coking coal, primarily for export to steel mills
throughout Asia, and thermal coal for the Huntly power station
and other domestic customers in the steel, dairy and cement
industries.
=====================
P H I L I P P I N E S
=====================
COOPERATIVE BANK OF TARLAC: Placed Under PDIC Receivership
----------------------------------------------------------
The Monetary Board (MB) placed the Cooperative Bank of Tarlac,
Inc. under the receivership of the Philippine Deposit Insurance
Corporation (PDIC) by virtue of MB Resolution No. 1685 dated
October 24, 2014. As Receiver, PDIC took over the bank on
October 27, 2014.
Cooperative Bank of Tarlac is a two-unit rural bank with three
info offices. Its Head Office is located at 193 Macabulos Drive,
San Roque, Tarlac City, Tarlac. It has a branch located in
Camiling and its info offices are located in Capas, Concepcion and
Paniqui, all in Tarlac. Latest available records show that as of
June 30, 2014, Cooperative Bank of Tarlac had 3,831 accounts with
total deposit liabilities of PHP225.76 million. A total of 3,806
deposit accounts or 99.35% of the accounts have balances of
PHP500,000 or less and are fully covered by deposit insurance.
Estimated total insured deposits amounted to PHP215.8 million or
95.59% of the total deposits.
PDIC said that upon takeover, all bank records shall be gathered,
verified and validated. The state deposit insurer assured
depositors that all valid deposits shall be paid up to the maximum
deposit insurance coverage of PHP500,000.00.
According to the latest Bank Information Sheet (BIS) as of
June 30, 2014 filed by the Cooperative Bank of Tarlac with the
PDIC, the bank is owned by the Cooperative Banks Federation of the
Philippines (15.25%), Land Bank of the Philippines (12.15%),
Kabutil Mega Credit Coop. (9.75%), Cooperative Development
Authority (7.16%) and CBTI Employees Mpc (2.89%). Its Chairman is
Ricardo P. Ramos and its President is Wilfredo A. Antimano.
================
S R I L A N K A
================
BANK OF CEYLON: Moody's Affirms B1 Local Currency Deposit Rating
----------------------------------------------------------------
Moody's Investors Service has affirmed the B1 local currency
deposit, foreign currency issuer and senior unsecured bond ratings
of Bank of Ceylon (BoC).
At the same time, Moody's has raised the bank's baseline credit
assessment (BCA) to b1 from b2.
The BCA of b1 maps to a bank financial strength rating (BFSR) of
E+.
The outlook on all ratings is stable.
Ratings Rationale
Moody's has raised BoC's BCA to b1 from b2 following: (1) the
government's provision in its 2015 budget of a capital injection
for the bank, and Moody's expectation that the government will
follow through on this decision; (2) clear signs that recent asset
quality deterioration has reached bottom and Moody's expectation
that non-performing loans (NPLs) will gradually diminish going
forward; and (3) the bank's stabilized liquidity position,
including a significant improvement in its loan-deposit ratio
(LDR).
First, low capital levels have been a key credit weakness for BoC.
In this context, Moody's notes that the government's budget
announcement on 24 October of a cumulative capital injection of
LKR10 billion over the next two years will address this weakness.
The budget passed second reading on November 1, 2014, and Moody's
expects parliament -- wherein the government holds a majority --
to pass the budget on its third and final reading on November 24.
Moody's expect a significant portion of this capital commitment to
be disbursed by the end of the first quarter of 2015.
The government's decision to inject capital into BoC -- and other
state-owned enterprises -- is part of its broader policy of
strengthening the state-owned sector. The proposed injection will
represent an increase in current Tier 1 capital of around 20%, and
lead to an increase in the Tier 1 capital ratio by around 180bps.
Second, NPLs, after sharply rising in 2013, are stabilizing, with
the gross NPL ratio at end-Q2 2014 standing at 4.28%, down from
5.42% at end-Q1 2014 and 4.32% at end-2013.
The bank's asset quality problems have been largely concentrated
in the pawning loan segment, which were originated when gold
prices were high and underwriting standards were lax. Moody's
observes that most of these loans have either run off or have
already been recognized as NPLs.
Meanwhile, BoC's high loan loss reserves -- 108% of NPLs at end-Q2
2014 -- are an additional buffer against any unexpected
deterioration in asset quality.
Third, Moody's notes a significant improvement in the bank's LDR,
with the ratio measuring 81% at end-Q2 2014 compared to 101% at
end-2012.
This improvement has been due primarily to cyclical factors --
including a slowdown in loan growth -- and the LDR is expected to
increase again in the future as loan growth picks up. However,
Moody's expects a rather gradual multi-year increase given the
extent of the improvement and the healthy deposit growth that the
rating agency expects will continue in parallel.
What Could Change The Ratings Up/Down
BOC's standalone credit profile and final supported ratings are
already at the same level as the Government of Sri Lanka (B1
stable). Hence, there will not be any upward pressure on the
rating unless there is an upgrade to the sovereign rating.
Downward pressure on BoC's standalone ratings could emerge if: 1)
If the proposed capital injection does not occur or is
substantially lower than announced; (2) its LDR ratio rises above
100%; (3) risk-adjusted profitability -- measured by net income,
as a percentage of average risk-weighted assets (RWA) -- falls
below 2% and subsequently weighs on internal capital generation;
and/or (4) its gross NPL ratio exceeds 5%.
List Of Affected Ratings
Bank of Ceylon
- BFSR maintained at E+ with a stable outlook, equivalent to a
change in the BCA to b1 from b2
- Long-term issuer ratings of B1 are affirmed with a stable
outlook
- Long-term local currency bank deposit ratings of B1 are affirmed
with a stable outlook
- Long-term foreign currency bank deposit ratings of B2 are
affirmed with a stable outlook
- Long-term foreign currency senior unsecured bond ratings of B1
are affirmed with a stable outlook
- Short-term local currency and foreign current bank deposit
ratings of NP are affirmed
- Outlook, remains stable
The principal methodology used in this rating was Global Banks
published in July 2014.
Bank of Ceylon is the largest Sri Lankan bank, 100% owned by the
government of Sri Lanka, with market shares of 20.8% in terms of
assets, 22.7% in terms of net loans and 20.0% in terms of deposits
as of March 31, 2014.
*********
Tuesday's edition of the TCR-AP delivers a list of indicative
prices for bond issues that reportedly trade well below par.
Prices are obtained by TCR-AP editors from a variety of outside
sources during the prior week we think are reliable. Those
sources may not, however, be complete or accurate. The Tuesday
Bond Pricing table is compiled on the Friday prior to
publication. Prices reported are not intended to reflect actual
trades. Prices for actual trades are probably different. Our
objective is to share information, not make markets in publicly
traded securities. Nothing in the TCR-AP constitutes an offer
or solicitation to buy or sell any security of any kind. It is
likely that some entity affiliated with a TCR-AP editor holds
some position in the issuers' public debt and equity securities
about which we report.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR-AP. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com
Friday's edition of the TCR-AP features a list of companies with
insolvent balance sheets obtained by our editors based on the
latest balance sheets publicly available a day prior to
publication. At first glance, this list may look like the
definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical
cost net of depreciation may understate the true value of a
firm's assets. A company may establish reserves on its balance
sheet for liabilities that may never materialize. The prices at
which equity securities trade in public market are determined by
more than a balance sheet solvency test.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Asia Pacific is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Valerie U. Pascual, Marites O. Claro, Joy A. Agravante, Rousel
Elaine T. Fernandez, Julie Anne L. Toledo, and Peter A. Chapman,
Editors.
Copyright 2014. All rights reserved. ISSN: 1520-9482.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding,
electronic re-mailing and photocopying) is strictly prohibited
without prior written permission of the publishers.
Information contained herein is obtained from sources believed
to be reliable, but is not guaranteed.
TCR-AP subscription rate is US$775 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance
thereof are US$25 each. For subscription information, contact
Peter Chapman at 215-945-7000 or Nina Novak at 202-362-8552.
*** End of Transmission ***