/raid1/www/Hosts/bankrupt/TCRAP_Public/141203.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Wednesday, December 3, 2014, Vol. 17, No. 239
Headlines
A U S T R A L I A
APEX GROUP: In Administration; First Meeting Set For Dec. 11
EXPRESS INDUSTRIAL: First Creditors' Meeting Set For Dec. 10
HIP BRIMBANK: First Creditors' Meeting Slated For Dec. 9
MMG PHOTOGRAPHY: First Creditors' Meeting Slated For Dec. 11
MPD PRINTING: In Voluntary Liquidation; Up For Sale
NEXUS ENERGY: AUD165-Mln Debt Facility Extended to Dec. 22
PRIME TRUST: 5 Former APCHL Directors Disqualified and Fined
C H I N A
LOGAN PROPERTY: Moody's Rates Prop. USD Sr. Unsec. Notes 'B1'
SUNAC CHINA: S&P Puts 'B+' Rating on US$-Denom. Sr. Unsec. Notes
SUNAC CHINA: Fitch Rates Prop. USD Sr. Unsec. Notes at 'BB-(EXP)'
SUNAC CHINA: Moody's Rates Prop. Senior Unsecured Notes 'B1'
SUNAC CHINA: Greentown Deal Changes No Effect on Moody's Ba3 CFR
YUZHOU PROPERTIES: Moody's Rates Prop. Sr. Unsec. Bonds 'B1'
YUZHOU PROPERTIES: S&P Rates New US$-Denom. Sr. Unsec. Notes 'B'
I N D I A
ACCENT INDUSTRIES: CRISIL Ups Rating on INR47MM Cash Loan to B
ADI ISPAT: ICRA Suspends 'D' Rating on INR77.33cr LT Loan
ALAM TANNERY: CRISIL Reaffirms B+ Rating on INR152MM Packing Loan
AMAR COTTEX: CARE Revises Rating on INR7cr Long Term Loan to B+
BADARPUR FARIDABAD: CARE Revises Rating on INR393cr LT Loan to D
CALICA RESOURCES: CRISIL Reaffirms B Rating on INR10MM Loan
DEKSON CASTINGS: CARE Reaffirms B+ Rating on INR4.50cr Bank Loan
DIAMOND POWER: CARE Revises Rating on INR1,125.68cr Loan to 'C'
GOVINDA COMMODITIES: CRISIL Cuts Rating on INR140MM Loan to 'D'
GURUKRUPA DEVELOPERS: ICRA Reaffirms B+ Rating on INR125cr Loan
HARSH MACRO: CARE Assigns B+ Rating to INR15cr Long Term Loan
INDIABULLS REAL: Moody's Assigns B1 Corporate Family Rating
JANHIT KARI: CRISIL Assigns 'B' Rating to INR10MM Bank Loan
KALYANI ASSOCIATES: CRISIL Cuts Rating on INR70MM Loan to 'D'
KG FABRIKS: ICRA Lowers Rating on INR43.54cr Term Loan to 'C+'
KINGFISHER AIRLINES: India Junks Mallya's Reappointment as Head
MEHTA INTERTRADE: CRISIL Reaffirms B+ Rating on INR384MM LOC
MILLENNIUM STARCH: CARE Cuts Rating on INR20.27cr LT Loan to D
MONARCH APPARELS: ICRA Suspends 'B' Rating on INR26.67cr LT Loan
NEENA GIRDHAR: CRISIL Assigns 'B' Rating to INR61MM Term Loan
PLATINUM ALLOYS: ICRA Assigns 'D' Rating to INR23.70cr Term Loan
PONDICHERRY TINDIVANAM: ICRA Suspends INR199.18cr Loan 'D' Rating
PROGRESSIVE MOTORS: CRISIL Assigns B+ Rating to INR50MM Cash Loan
R. B. MEHTA: CRISIL Reaffirms B+ Rating on INR58MM Secured Loan
RADHE SHAM: CARE Assigns B+ Rating to INR6.28cr LT Bank Loan
RENU CHANANA: CRISIL Assigns B Rating to INR61MM Term Loan
REWA PATHWAYS: CARE Upgrades Rating on INR22.44cr LT Loan to B+
SMIT DEVELOPERS: ICRA Assigns B+ Rating to INR9.18cr Term Loan
SONEC SANITARY: CARE Reaffirms B Rating on INR6.09cr LT Bank Loan
SREE VAAGESWARI: CRISIL Reaffirms B- Rating on INR25MM Term Loan
SRI NANGALI: CRISIL Assigns 'B' Rating to INR220MM Cash Credit
SUCCESS LAYER: CARE Assigns B+ Rating to INR7.59cr LT Bank Loan
SUNDARAM STEELS: CARE Reaffirms B+ Rating on INR10.51cr LT Loan
SUNLEX CERAMIC: ICRA Reaffirms B+ Rating on INR4.40cr Term Loan
SURYA AGRO: CARE Revises Rating on INR7.52cr LT Bank Loan to B+
THANE STEELS: CRISIL Cuts Rating on INR110MM Cash Credit to B+
UTTORAYON TEA: CRISIL Assigns 'B' Rating to INR32.5MM Term Loan
VAMA CONSTRUCTION: ICRA Rates INR3cr Overdraft Loan at 'B+'
VIRAJ POLYPLAST: CRISIL Cuts Rating on INR76.3MM Bank Loan to D
I N D O N E S I A
BUMI INVESTMENT: Chapter 15 Case Summary
M A L A Y S I A
MALAYSIA AIRLINES: Jentayu Danaraksa Interested in Eng'g Division
T H A I L A N D
TRUE MOVE: Moody's Withdraws B2 Corporate Family Rating
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A U S T R A L I A
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APEX GROUP: In Administration; First Meeting Set For Dec. 11
------------------------------------------------------------
Murray Godfrey -- mgodfrey @veritasadvisory.com.au and David
Iannuzzi -- diannuzzi@veritasadvisory.com.au -- of Veritas
Advisory were appointed as administrators of Apex Group
Enterprises Pty Ltd on Dec. 1, 2014.
A first meeting of the creditors of the Company will be held at
Level 12, 88 Pitt Street, in Sydney, on Dec. 11, 2014, at
10:00 a.m.
EXPRESS INDUSTRIAL: First Creditors' Meeting Set For Dec. 10
------------------------------------------------------------
Eloise Keating at SmartCompany reports that Express Industrial
Supplies has collapsed into voluntary administration. Joseph
Hayes and Shaun Fraser of McGrathNicol were appointed as the
company's administrators on November 28.
The first meeting of creditors is scheduled to take place in
Sydney on December 10, SmartCompany says.
Mr. Hayes told SmartCompany he and Mr. Fraser are currently
reviewing a sale agreement, which Express Industrial Supplies
entered into with Atom Supply Group prior to their appointment.
"It is our intention to review the merits of the sale and should a
Deed of Company Arrangement (DOCA) we proposed, which is likely, a
resolution regarding the sale will be put to creditors," the
report quotes Mr. Hayes as saying.
Express Industrial Supplies, which sells power tools and other
industrial supplies from branches in Padstow, Tuggerah and West
Gosford in New South Wales and Thomastown in Victoria, is
currently trading under a license agreement with Atom, which
Mr. Hayes said is responsible for "day to day trading,"
SmartCompany relates. According to the Express Industrial
Supplies website, the company employs 68 people, the report says.
HIP BRIMBANK: First Creditors' Meeting Slated For Dec. 9
--------------------------------------------------------
Ross Andrew Blakeley and Stefan Dopking of FTI Consulting were
appointed as administrators of HIP Brimbank, trading as Brimbank
Health Information Pharmacy, on Nov. 28, 2014.
A first meeting of the creditors of the Company will be held at
The Offices of FTI Consulting, Level 16, 600 Bourke Street, in
Melbourne, Victoria, on Dec. 9, 2014, at 10:00 a.m.
MMG PHOTOGRAPHY: First Creditors' Meeting Slated For Dec. 11
------------------------------------------------------------
David Iannuzzi and Murray Godfrey of Veritas Advisory were
appointed as administrators of MMG Photography Pty Ltd on Dec. 1,
2014.
A first meeting of the creditors of the Company will be held at
Level 12, 88 Pitt Street, in Sydney, on Dec. 11, 2014, at
11:00 a.m.
MPD PRINTING: In Voluntary Liquidation; Up For Sale
--------------------------------------------------
Kayleen Chen at InsolvencyNews reports that Sydney's MPD Printing
have decided to place the business into voluntary liquidation to
enable a structured sale of the business.
MPD, a highly regarded cold-set newspaper printshop now in its
33rd year, currently turns over AUD9 million per annum. Capital
equipment of approximately AUD3 million has tied the cash flow of
the business, InsolvencyNews says.
During 2014, the business achieved significant efficiencies and
turned to the creation of a new market for newsprint, becoming
printer of choice for designers, design students, artists, theatre
groups, writers, poets and other creative seeking to use the edgy,
tactile qualities of newsprint in new and interesting ways,
according to InsolvencyNews.
InsolvencyNews relates that MPD managing director Linda Tenenbaum
said "the pressures on pricing in the core ethnic and expat
newspaper markets, along with increases in key costs, had
continued unabated."
"The printing industry as a whole is experiencing a difficult and
increasingly volatile economic environment. Both frequency and
page counts of press runs have been adversely impacted by cost
cutting efforts in consumer industries and imports,"
Ms. Tenenbaum, as cited by InsolvencyNews, said.
InsolvencyNews adds that Jamieson Louttit of Insolvency and
Advisory firm Jamieson Louttit & Associates said that "the
printing industry has been impacted by the new alternative
printing techniques but there are many instances where cold-set
printing can achieve better results than the new technologies."
NEXUS ENERGY: AUD165-Mln Debt Facility Extended to Dec. 22
----------------------------------------------------------
Matt Chambers at The Australian reports that Seven Group Holdings
appears to be preparing to enforce its rights over a AUD165
million loan to embattled takeover target Nexus Energy if a coming
court hearing goes against it.
The Australian relates that in a stock exchange notice, Nexus
administrator McGrath Nicol said the debt facility, designed to
tide over Nexus until Seven acquired it through administrators,
would be extended to December 22. But it was not a clear-cut
extension, as it had been previously, The Australian notes.
"The term of the AUD165 million facility has been extended by way
of forbearance letter whereby, in the absence of an event of
default, the parties agreed to extend the term to the earlier of
Monday 22 December 2014 or, at the lender's discretion, 24 hours'
notice from the lender," it said, The Australian relays.
Not mentioned is that a court hearing on whether to approve a deed
of company arrangement has been set for December 16, the report
says. The Australian note that the language of the extension
indicates Seven is readying to enforce its rights under the loan
if a court ruling does not approve the takeover.
About Nexus Energy
Nexus Energy Limited (ASX:NXS) is a Melbourne-based, Australian
Stock Exchange listed oil and gas company. In 2009, Nexus
transitioned from explorer to producer with the start up of the
Longtom gas project. The company holds interests in eight permits
located offshore Australia. Operations are focused on the
Gippsland Basin, offshore Victoria and the Browse Basin, offshore
Western Australia.
McGrathNicol announced on June 12, 2014, that partners
Matthew Caddy, Tony McGrath, and Jason Preston have been appointed
joint and several Voluntary Administrators to Nexus Energy
Limited.
PRIME TRUST: 5 Former APCHL Directors Disqualified and Fined
------------------------------------------------------------
The Federal Court on December 2 delivered its penalty judgment
against 5 former directors of Australian Property Custodian
Holdings Ltd (APCHL) who breached their directors' duties by
making an illegal related party payment of more than
AUD30 million.
The judgment follows an Australian Securities and Investment
Commission investigation into the directors' role in amending
Prime Trust's constitution so a AUD33 million fee could be paid to
the trust's founder and one of its directors, Bill Lewski. ASIC
launched its civil penalty proceedings in 2012 and the Federal
Court found in December 2013 the directors breached their
corporate duties by failing to act in members' best interest.
The judgment in the Federal Court in Melbourne saw Justice Murphy
deliver the following disqualifications and penalties:
William Lionel Lewski - disqualified for managing a company for 15
years and fined AUD230,000
Mark Frederick Butler - disqualified for managing a company for 4
years and fined AUD20,000
Kim Jaques - disqualified for managing a company for 4 years and
fined AUD20,000
Dr Michael Wooldridge - disqualified for managing a company for 2
years, 3 months and fined AUD20,000
Peter Clarke - was not disqualified from managing a company but
fined AUD20,000
The Court also ordered that the defendant directors pay the costs
of ASIC's proceeding.
ASIC Commissioner Greg Tanzer said, "These individuals, through
their actions, showed a complete disregard for the unit holders of
Prime Trust to which they owed important obligations."
In delivering his judgment, Justice Murphy stated that Mr Lewski's
conduct was 'central in Prime Trust's suffering a substantial
loss' and that he had failed to demonstrate any real understanding
of the seriousness of the breaches. He also found that there was a
risk of re-offending by Mr Lewski and that 'the lengthy
disqualification and significant pecuniary penalty attempt to put
a price on his contraventions that will show him that the game is
not worth the candle'.
In regards to the other defendant directors, Justice Murphy found
that 'rather than acting in the best interests of the Members' Mr
Wooldridge, Mr Butler and Mr Jaques had 'capitulated to the
interests of Mr Lewski'.
In relation to Mr Clarke, Justice Murphy said, 'he sat passively'
and 'merely waved through a resolution which allowed a
AUD33 million breach of trust'.
Declarations of contravention were also made against APCHL, the
first defendant. APCHL did not participate in the proceeding and
the only relief sought by ASIC against it was declaratory relief.
A stay of the orders in respect of Mr Lewski and Dr Wooldridge was
granted until Dec. 23, 2014.
The defendants have 21 days within which to lodge an appeal to the
Full Court of the Federal Court.
One of APCHL's receivers and managers is conducting separate civil
proceedings in relation to the fee in the Supreme Court of
Victoria. The Supreme Court proceedings were adjourned pending the
conclusion of the exoneration and penalty phase of the ASIC
proceedings.
About Prime Trust
Prime Retirement and Aged Care Property Trust is an Australia-
based investment company. The principal activity of the Trust is
to invest funds in property, primarily retirement and aged care
facilities. Its subsidiaries include APCH Aged Care Services Pty
Ltd, Hibiscus RV Properties Pty Ltd, APCH Investments Pty Ltd,
Carlyle Villages Pty Ltd and Lindfield RV Properties Pty Ltd.
As reported in the Troubled Company Reporter-Asia Pacific on
Oct. 19, 2010, SmartCompany said 10 retirement villages that are
owned by Prime Retirement and Aged Care Property Trust have been
placed in the hands of receivers after banks including National
Australia Bank and Suncorp Metway lost patience with the group.
Suncorp appointed receivers from Ernst & Young to Prime Trust's
retirement villages in Bundaberg, Mackay and Townsville. This
triggered a swag of further appointments, with Craig Shepard and
Mark Korda of KordaMentha appointed to seven further villages,
including properties in Buderim, Nambour, Noosa and Linfield.
SmartCompany recalled shares in Prime Trust have been suspended
since early August 2010, as the company tried to convince its
financiers it could restructure its operations and deal with
debts of about AUD275 million. Receiver Craig Sheppard said the
properties, which are currently managed by Lend Lease Primelife,
would continue to operate as normal.
Stirling Horne and Petr Vrsecky of Lawler Draper Dillon were
appointed joint liquidators of Australian Property Custodian
Holdings Ltd., as Responsible Entity for The Prime Retirement &
Aged Care Property Trust following the second creditors meeting
on Nov. 23, 2011. Messrs. Horned and Vrsecky previously were
appointed joint administrators of the Trust on Oct. 18, 2010.
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C H I N A
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LOGAN PROPERTY: Moody's Rates Prop. USD Sr. Unsec. Notes 'B1'
-------------------------------------------------------------
Moody's Investors Service has assigned a B1 rating to Logan
Property Holdings Company Limited's proposed USD senior unsecured
notes.
Moody's has also affirmed the company's Ba3 corporate family and
B1 senior unsecured debt ratings.
The ratings outlook is stable.
Logan plans to use the proceeds of the issuance to refinance debt
and fund its existing projects, as well as for general corporate
purposes.
Ratings Rationale
"The proposed notes issuance will improve Logan's debt maturity
profile and lower its average funding cost," says Franco Leung, a
Moody's Vice President and Senior Analyst.
Moody's expects that Logan will use part of the notes proceeds to
prepay its domestic trust loans, which are charged at a higher
level of interest relative to the proposed notes.
"On the other hand, the company's weak sales growth indicates it
has been affected by slower property sales in the market. But its
credit metrics remain supportive of a low Ba rating when compared
to its peers," adds Leung, who is also Moody's Lead Analyst for
the company.
Moody's believes Logan's contracted sales have slowed down so far
this year, and expects Logan to deliver marginal contracted sales
growth for the full year 2014 compared with 2013.
The company's EBITDA interest coverage fell to 4.5x for the 12-
month period ended 30 June 2014 from 5.2x in 2013 as a result of
higher interest expenses, due in turn to a higher level of debt.
The company has spent more on land acquisitions, which Moody's
expects to slow down in the next 12 months, given its weaker sales
performance.
Its debt leverage deteriorated in 1H 2014 as reflected by revenue
to gross debt declining to 92.7% from 123.8% in 2013.
Moody's expects Logan's EBITDA interest coverage to trend towards
3x over the next 12-18 months, and its revenue to gross debt ratio
towards around 85%-90%. These credit metrics still position the
company in the Ba3 level when compared with its rated Chinese
property peers.
Moreover, Logan's Ba3 rating continues to be supported by its
solid liquidity position. Its cash to short-term debt reached 143%
at end-June 2014. The company's cash holdings of around RMB6.5
billion at end-June 2014 and operating cash flow will be
sufficient to cover its short-term debt of RMB4.6 billion, as well
as committed land payments over the next 12 months. Such strong
liquidity will provide a strong buffer against any adverse change
in the market in the next 12 months.
The stable outlook reflects Moody's expectation that Logan will
continue to cautiously manage its expansion plans and maintain
adequate liquidity -- in terms of cash holdings, operating cash
flows, and borrowings -- to fund its current and future projects.
Upward rating pressure could emerge if the company: (1)
consistently meets its sales targets and continues to implement
its disciplined approach to acquiring land and managing its
financials; (2) maintains stable profitability through the
business cycles; (3) grows in scale and diversifies its funding
sources; and (4) maintains good liquidity, with a minimum cash
balance of more than 150% of its short-term debt; or (4) can
maintain EBITDA/interest coverage consistently above 4.5x-5x and
revenue/debt above 100%.
Downward rating pressure could emerge if (1) Logan's liquidity and
operating cash flow generation weaken, due to lower-than-expected
contracted sales growth, aggressive land acquisitions, or the
emergence of more severe conditions in China's property sector;
(2) its profit margins come under pressure, which would in turn
negatively affect interest coverage and financial flexibility; or
(3) the company engages in material debt-funded acquisitions.
Credit metrics that Moody's would consider for a downgrade include
the company's: (1) cash balance dropping below 100% of short-term
debt; (2) EBITDA interest coverage falling below 3.0x-3.5x; and
(3) revenue/debt dropping below 80% on a sustained basis.
The principal methodology used in this rating was the Global
Homebuilding Industry, published in March 2009.
Established in 1996, Logan Property Holdings Company Limited is a
property developer based in Shenzhen and principally focused on
residential projects in Shantou, Nanning and Huizhou. It was
listed on the Hong Kong Stock Exchange in December 2013. At end-
June 2014, it had a land bank of 12.8 million sqm in gross floor
area across 13 cities in China, including Shantou, Nanning, and
cities in the Pearl River Delta.
SUNAC CHINA: S&P Puts 'B+' Rating on US$-Denom. Sr. Unsec. Notes
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' long-term
issue rating and 'cnBB' long-term Greater China regional scale
rating to a proposed issue of U.S. dollar-denominated senior
unsecured notes by Sunac China Holdings Ltd. (BB-/Stable/--;
cnBB+/--). Sunac intends to use the proceeds from the proposed
notes to refinance some of its debt. The ratings on the notes are
subject to S&P's review of the final issuance documentation.
The issue rating is one notch lower than the long-term corporate
credit rating on Sunac because of structural subordination risk.
The rating on Sunac reflects the company's concentration in the
high-end residential sector, aggressive business expansion, and
higher funding costs compared with its peers'. Sunac's
satisfactory execution record, increased operating scale, and the
business synergy achieved with large developers temper the above
weaknesses. S&P assess Sunac's business risk profile as
"satisfactory" and its financial risk profile as "aggressive."
The stable outlook reflects S&P's expectation that Sunac will
maintain its satisfactory sales execution and stabilize its
profitability over the next 12 months. In S&P's view, the
aggressive debt-funded expansion of the company's business will
put pressure on its cash flows, such that its leverage ratios will
stay in the aggressive financial risk profile category.
SUNAC CHINA: Fitch Rates Prop. USD Sr. Unsec. Notes at 'BB-(EXP)'
-----------------------------------------------------------------
Fitch Ratings has assigned Chinese homebuilder Sunac China
Holdings Limited's (Sunac, BB-/Positive) proposed USD senior
unsecured notes an expected rating of 'BB-(EXP)'.
The proceeds will be used for refinancing existing debt.
Key Rating Drivers
Sales Growth Reflects Sustainability: Fitch estimates Sunac to
have achieved around CNY16bn of contracted sales on an
attributable basis in 1H14. While the year-on-year growth is
limited, it reflects the sustainability of the company's business
scale in the difficult conditions in China's homebuilding sector.
Sunac's operating scale also demonstrates superior management, a
more stable operating cash flow, and more cost benefits compared
with peers rated at 'BB-'. Fitch uses attributable sales, the
share of sales contributions from a company's ownership in joint
ventures (JVs), as one of the criteria to assess the business
scale of companies with substantial JVs.
High Turnover & Healthy Margin: Sunac's EBITDA margin was
estimated to be around 24% in 1H14 after excluding the impact of
re-assessment of fair value, which is still at a healthy level
compared with peers. Furthermore, its asset turnover is still at a
higher end, as reflected by over 1.2x of contracted sales/total
debt and 0.7x of contracted sales/adjusted inventory in 2013. Both
sales turnover and margins demonstrate the generation of
sufficient cash inflows to support its operations and expansion.
Limited Structural Subordination Risk: Sunac is one of the most
prolific users of JVs among Chinese developers, as reflected by
its minority interests of CNY4.5bn and equity investments of
CNY9.3bn at mid-2014. However, most of its JVs distribute cash
flows regularly, which limits cash retained in the JVs and
structural subordination. The major exception is the projects
under Shanghai Sunac Greentown Investment Holdings Limited (SSG),
but Fitch estimates SSG to have contributed only less than 20% of
attributable sales, making it insignificant.
Land Banking & Shares Acquisition: Fitch estimates Sunac paid
CNY6.6bn for attributable land acquisitions in 1H14 compared with
our estimate of CNY16 billion in attributable sales for the same
period. While there is uncertainty in the transaction, the company
has paid over CNY4 billion to acquire shares of Greentown in 2H14,
which will generate limited cash dividends for Sunac in the short
term. Key considerations for a rating upgrade will depend partly
on how the Greentown share acquisition evolves and how the company
manages its land bank to maintain healthy leverage. Leverage, as
measured by net debt/adjusted inventory, stood at 26% at mid-2014.
Rating Sensitivities
Positive: Future developments that may, individually or
collectively, lead to positive rating action include:
-- EBITDA margin excluding the impact of revaluation of
acquisitions sustained above 22%
-- Contracted sales/total debt sustained above 1.2x
-- Conservative land acquisitions leading to net debt /adjusted
inventory sustained below 40%
-- Limited growth in SSG relative to Sunac's own growth
Negative: Future developments that may, individually or
collectively, lead to negative rating action include:
-- Failure to meet the above guidelines over the next 12-18
months, which would lead to the Outlook being revised to
Stable
SUNAC CHINA: Moody's Rates Prop. Senior Unsecured Notes 'B1'
------------------------------------------------------------
Moody's Investors Service has assigned a B1 rating to Sunac China
Holdings Limited's proposed senior unsecured notes.
At the same time, Moody's has affirmed Sunac's Ba3 corporate
family rating and B1 senior unsecured debt rating.
The outlook on all ratings is stable.
The company will use the new funding to refinance its existing
debt.
Ratings Rationale
"The proposed USD notes will improve Sunac's liquidity position,
lengthen the average tenure of its debt portfolio and add
stability to its offshore funding," says Franco Leung, a Moody's
Vice President and Senior Analyst.
Sunac's short-term debt surged to RMB13.8 billion at end-June 2014
from RMB7.8 billion at end-2013. As a result, the company's
liquidity profile weakened slightly -- its cash to short-term debt
declined to 1.7x from 2.0x over the same period -- despite its
increased cash balance. The proposed issuance will help reduce its
level of short-term debt.
"The proposed issuance will not have a material impact on Sunac's
debt leverage," adds Leung, also the Lead Analyst for Sunac.
Moody's expects Sunac will use part of the proceeds from the
issuance to refinance its existing debt. Thus the proposed notes
will not materially raise Sunac's debt leverage.
Sunac's operating performance remains strong, as evidenced by its
robust level of contracted sales. Such a strong performance
provides the company with the necessary liquidity to fund its
rapid pace of expansion.
Sunac reported contracted sales of RMB52.4 billion for the first
10 months of 2014. Moody's believes Sunac is on track to meet its
full-year contracted sales target based on the projects available
on sale in the rest of the year.
However, the rating is constrained by the high business and
financial risks associated with Sunac's strategy to pursue rapid
debt-funded growth. In recent years Sunac has been using debt to
fund its business growth, including land and other acquisitions.
The stable outlook reflects Moody's expectation that Sunac will
maintain its strong sales execution, stay regionally focused,
preserve its adequate liquidity position, and improve its debt
maturity profile over time.
Upward rating pressure could emerge in the medium term if the
company (1) demonstrates stable sales growth and substantially
achieves its presales target; (2) adopts a prudent strategy for
its land and company acquisitions; (3) improves its credit metrics
such that EBITDA/interest coverage exceeds 3.0x-3.5x and
revenue/debt is above 100%-110%, on a sustained basis; and (4)
improves its debt maturity profile, such that debt maturing in 12
months does not exceed 35% of total debt.
Downward rating pressure could arise if Sunac (1) fails to
generate positive sales growth; (2) shows increased liquidity risk
due to aggressive land or other acquisitions; (3) increases its
debt leverage, such that revenue-to-debt falls below 70%; or (4)
shows deterioration in profitability or interest coverage, with
adjusted EBITDA/interest under 1.5x-2.0x for a sustained period.
The principal methodology used in this rating was Global
Homebuilding Industry published in March 2009.
Sunac is an integrated residential and commercial property
developer, with ongoing or completed projects in China's main
regions of Beijing, Tianjin, Shanghai, Chongqing and Hangzhou. The
company develops a wide range of properties, including high-rise
and mid-rise residences, detached villas, townhouses, retail
properties, offices and car parks.
Sunac was incorporated in the Cayman Islands on 27 April 2007 and
listed on the Hong Kong Stock Exchange on 7 October 2010. At end-
June 2014, it owned 67 projects and had a land bank of 21.9
million square meters.
SUNAC CHINA: Greentown Deal Changes No Effect on Moody's Ba3 CFR
----------------------------------------------------------------
Moody's Investors Service says that the possible change in Sunac
China Holdings Limited's (Ba3 stable) planned acquisition of
Greentown China Holdings Limited's (B1 stable) shares, including
the possible termination of the transaction, is credit negative
for Greentown.
However, there is no immediate impact on Greentown's B1 Corporate
family rating and B2 senior unsecured debt rating, or on Sunac's
Ba3 corporate family rating and B1 senior unsecured debt rating.
On December 1, 2014, Sunac announced that it is considering to
adjust its proposed acquisition of a 24.3% equity stake in
Greentown, which may involve termination of the transaction.
Sunac's announcement followed that of Greentown on 27 November
2014 that its Chairman Mr. Song, his spouse and CEO Mr. Shou are
considering possible changes to the sale of their 24.3% equity
stake to Sunac. Under any circumstances, the parties cannot
proceed with the share sale and purchase until they address
concerns raised by the Securities and Future Commission's (SFC)
over the possible implications of the acquisition. Both companies
indicate that they have not yet received approval from the SFC to
complete the transaction.
Sunac first announced its acquisition of the 24.3% stake in May
2014.
"The possible termination of the previously agreed transaction
could adversely impact Greentown's business operations and
financial management going forward," says Franco Leung, a Moody's
Vice President and Senior Analyst.
While Greentown's board composition remains unchanged, Moody's
understands that Sunac had already been involved in Greentown's
daily operations prior to the completion of the transaction.
Moody's views the final outcome of the transaction as highly
uncertain. An adjustment or termination of the transaction would
involve a partial or full refund from Greentown for the HKD6.3
billion consideration already paid by Sunac, even though the
transaction has not yet been completed.
"Extended mediation or escalation between the parties could
squander management resources and divert the company from its
ordinary course of business, which could in turn pressure
Greentown's ratings," says Jiming Zou, a Moody's Assistant Vice
President and Analyst.
Sunac's potential departure could also adversely affect
Greentown's property sales. Greentown has improved its sales
execution since August, when Sunac became involved in Greentown's
operations.
For the first 10 months of 2014 Greentown achieved contracted
sales of RMB58.4 billion, a 14.3% year-over-year rise. Greentown,
in the past, has put more emphasis on product quality and brand
reputation, and as a result asset turnover had been slow.
"Moreover, we are concerned that potential disputes between
Greentown and Sunac could disrupt the operating performance of
their existing jointly-owned property projects," adds Leung, who
is also the Lead Analyst for Sunac.
Moody's notes that the two companies manage a number of jointly-
owned property projects in places including Shanghai and Hangzhou.
These projects contribute to a substantial part of both Sunac's
and Greentown's contracted sales. Although the near-term impact on
these projects is limited, Moody's will monitor their operating
performance and determine whether there is any material
deterioration in the project cash flows.
The principal methodology used in these ratings was Global
Homebuilding Industry published in March 2009.
Sunac China Holdings Limited is an integrated residential and
commercial property developer, with ongoing or completed projects
in China's main regions of Beijing, Tianjin, Shanghai, Chongqing
and Hangzhou. The company was incorporated in the Cayman Islands
on 27 April 2007 and listed on the Hong Kong Stock Exchange on 7
October 2010. At end-June 2014, it owned 67 projects and had a
land bank of 21.9 million square meters.
Greentown China Holdings Limited is one of China's major property
developers, with a primary focus in Hangzhou city and Zhejiang
province. As of June 2014, the company had 102 projects with a
total gross floor area of 37.82 million square meters. Of this
total, 20.48 million square meters were attributable to the
company.
YUZHOU PROPERTIES: Moody's Rates Prop. Sr. Unsec. Bonds 'B1'
------------------------------------------------------------
Moody's Investors Service has assigned a B1 rating to Yuzhou
Properties Company Limited's (B1 stable) proposed senior unsecured
bonds.
The rating outlook is stable.
The company will use the bond proceeds to fund debt repayments and
land acquisitions, and for general working capital purposes.
Ratings Rationale
"The proposed bonds will further strengthen Yuzhou's liquidity
position and improve its debt maturity profile," says Fiona Kwok,
a Moody's Analyst.
At end-June 2014, Yuzhou had a large cash balance of RMB7.7
billion. This cash balance adequately covered its short-term
maturing debt of RMB2.2 billion and committed unpaid land premiums
of RMB900 million over the next 12 months. In addition, its cash
to short-term debt ratio of 3.2x was very strong when compared to
its Ba and B-rated peers.
"Yuzhou's credit metrics are appropriately positioned at the B1
rating level, after considering the temporary debt increase to
prefund its debt repayment needs in 1H 2015," adds Kwok, who is
also the Lead Analyst for Yuzhou.
Although Yuzhou will use a portion of the proceeds to repay its
existing debt, it will likely do so only in 1H 2015. As such,
Moody's expects Yuzhou's gross debt will increase to RMB14.5-
RMB15.0 billion by end-2014, before it will start to go down upon
repayment.
As such, Moody's expects Yuzhou's credit metrics -- reported
revenue/ debt of around 65%-70% and adjusted EBITDA/interest
coverage of 2.5x-3.0x over the next 12-18 months -- to remain
commensurate with its B1 rating.
Moreover, the company will also repay its onshore borrowings. As a
result, its subsidiary debt to total consolidated assets will
trend closer to around 15% over the next 6-12 months from 16.7% as
of 30 June 2014.
In the first 10 months of 2014, Yuzhou achieved contracted sales
of RMB8.9 billion, a 7% year-over-year decline. This amount
represents 67% of its 2014 contracted sales target of RMB13.2
billion. Although the company is unlikely to achieve its full-year
contracted sales target, its year-to-date performance is still in
line with Moody's full-year expectation of around RMB11-RMB12
billion.
Yuzhou's gross profit margin remained high at 36.1% in H1 2014,
owing to its low land costs. In H1 2014, the unit cost of its land
bank was only 17.6% of its contracted average selling price.
The high profit margin and robust revenue growth will continue to
support Yuhou's financial flexibility.
However, the B1 corporate family rating also incorporates its
sales volatility. In addition, the rating takes into account the
concentration of its cash flow from projects in Xiamen, and its
moderate debt leverage.
Partly mitigating these challenges are Yuzhou's growing operating
scale, leading market position and good-quality land bank in
Xiamen. The company also benefits from its low-cost and gradual
diversification of land bank outside of Xiamen.
The stable outlook reflects Moody's expectation that Yuzhou will
continue to generate sales and maintain stable profit margins, and
that it will maintain adequate liquidity levels and retain access
to onshore banks to fund its construction projects.
Moody's would consider upgrading Yuzhou's ratings if it: (1)
consistently achieves its planned sales growth with stable profit
margins; (2) generates sales from a well-balanced portfolio
without high concentration risk; (3) maintains its stable
financial profile without aggressive land acquisitions; and (4)
preserves its strong liquidity profile, with broadened banking
relationships.
Credit metrics that could point to an upgrade include revenue to
gross debt exceeding 75%-80% and EBITDA/interest coverage
exceeding 3.0x-3.5x on a sustained basis.
Downward ratings pressure could emerge if Yuzhou's financial
position deteriorates, owing to: (1) a weaker-than-expected sales
performance; (2) an aggressive pace of property development or
aggressive land acquisitions; or (3) a weakened liquidity level.
The credit metrics that Moody's would consider for a rating
downgrade include EBITDA/interest coverage below 2.5x, or revenue
to gross debt below 65%-70% on a sustained basis.
The principal methodology used in this rating was Global
Homebuilding Industry published in March 2009.
Yuzhou Properties Company Limited is a Fujian-based developer,
focusing on residential housing in Xiamen. Its land bank (with
legal titles) was small, at around 8.58 million square meters in
gross floor area at 30 June 2014. Of this land bank, 24% was in
Xiamen, 28% in Hefei, and 15% in Quanzhou. The rest of its land
bank was in Bengbu, Shanghai, Tianjin, Fuzhou, Longyan and
Zhangzhou.
YUZHOU PROPERTIES: S&P Rates New US$-Denom. Sr. Unsec. Notes 'B'
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' long-term
issue rating and 'cnBB-' Greater China regional scale rating to a
proposed issue of U.S.-dollar-denominated senior unsecured notes
by Yuzhou Properties Co. Ltd. (B+/Stable/--; cnBB/--). The
ratings are subject to S&P's review of the final issuance
documentation.
Yuzhou intends to use the proceeds from the proposed issuance to
repay some of its debts, fund potential land acquisitions, and for
general working capital purposes. The issue rating is one notch
below the long-term corporate credit rating due to structural
subordination risk.
S&P expects Yuzhou's increasing property sales to largely offset
the company's capital expenditure stemming from its expansion plan
outside of Xiamen. Therefore, S&P forecasts Yuzhou's debt-to-
EBITDA ratio to be 4.0x-4.5x over the next 12 months--commensurate
with the corporate credit rating.
Yuzhou's small operating scale and high geographic concentration
in Xiamen continue to constrain S&P's rating, in its view. The
company's leading market position in Xiamen, sizable low-cost land
bank, and above-average profitability compared with those of
similar-rated peers temper the above weaknesses. S&P also expects
Yuzhou to be able to smoothly execute its expansion plan outside
of Xiamen, given its good operating track record.
The stable outlook on Yuzhou Properties Co. Ltd. reflects S&P's
expectation that the company will continue to improve property
sales, keep margin at above industry average, and maintain
disciplined financial management.
=========
I N D I A
=========
ACCENT INDUSTRIES: CRISIL Ups Rating on INR47MM Cash Loan to B
--------------------------------------------------------------
CRISIL has upgraded its rating on the long-term bank facilities of
Accent Industries Ltd (AIL) to 'CRISIL B/Stable' from 'CRISIL B-
/Stable' while reaffirming its rating on the company's short-term
bank facilities at 'CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 47 CRISIL B/Stable (Upgraded from
'CRISIL B-/Stable')
Letter of Credit 15 CRISIL A4 (Reaffirmed)
Proposed Long Term 1.5 CRISIL B/Stable (Upgraded from
Bank Loan Facility 'CRISIL B-/Stable')
Term Loan 36.5 CRISIL B/Stable (Upgraded from
'CRISIL B-/Stable')
The rating upgrade reflects improvement in AIL's business risk
profile marked by increase in its manufacturing revenue leading to
a better operating margin. Moreover, AIL's liquidity has improved
driven by support from its promoters and increasing net cash
accruals.
AIL reported revenue of INR403 million for 2013-14 (refers to
financial year, April 1 to March 31), compared with INR318.2
million for the preceding year, driven by increase in
manufacturing revenue to INR162.6 million in 2013-14 from INR90.5
million in 2012-13. The company's scale of operations is expected
to increase over the medium term on account of sustained demand
for gloves. Its operating margin improved to 5 per cent in 2013-14
from 3.1 per cent in 2012-13 because of the combined effect of
increase in manufacturing revenue, which led to better fixed-cost
absorption, better realisation driven by increased value addition
because of new machinery, and use of recycled cotton yarn to
manufacture low-end gloves, which helped reduce raw material
costs. The company's increased scale of operations and operating
margin resulted in positive net cash accruals in 2013-14 as
against negative net cash accruals in 2012-13, resulting in
improved liquidity.
The ratings reflect AIL's weak financial risk profile, marked by
small net worth, high gearing, and weak debt protection metrics.
The ratings also reflect the company's small scale of operations,
its large working capital requirements, and the susceptibility of
its operating profit margin to volatility in raw material prices.
These rating weaknesses are partially offset by the extensive
experience of AIL's promoters in the glove manufacturing segment
and their expected funding support to the company.
Outlook: Stable
CRISIL believes that AIL will continue to benefit over the medium
term from its promoters' extensive industry experience. The
outlook may be revised to 'Positive' if the company's financial
risk profile improves on account of substantial cash accruals and
improved working capital management. Conversely, the outlook may
be revised to 'Negative' in case of deterioration in AIL's
financial risk profile, particularly its liquidity, because of low
cash accruals, or large working capital requirements or debt-
funded capital expenditure.
AIL was set up in Thane (Maharashtra) in 1992 by Mr. Anup Jatia,
Mrs. Shruti Jatia, and Mr. Basant Kumar Goenka. The company
manufactures and trades in industrial gloves. AIL has
manufacturing facilities in Tarapur (Maharashtra).
ADI ISPAT: ICRA Suspends 'D' Rating on INR77.33cr LT Loan
---------------------------------------------------------
ICRA has suspended [ICRA]D rating assigned to the INR77.33 crore
long term fund based and non-fund based bank limits and [ICRA]D
rating to the INR10.00 crore short term non-fund based bank
facilities of Adi Ispat Private Limited. The suspension follows
ICRA's inability to carry out a rating surveillance in the absence
of the requisite information from the company.
ALAM TANNERY: CRISIL Reaffirms B+ Rating on INR152MM Packing Loan
-----------------------------------------------------------------
CRISIL's ratings on the bank loan facilities of Alam Tannery Pvt
Ltd (ATPL) continue to reflect ATPL's working-capital-intensive
operations, and exposure to risks related to fluctuations in
foreign exchange rates and to unfavourable regulatory changes
especially in Europe, where most of its end customers are located.
These rating weaknesses are partially offset by the extensive
experience of ATPL's promoters in the leather industry along with
the financial support extended by them to the company. The ratings
also factor in the company's moderate financial risk profile,
marked by moderate net worth and low gearing, though constrained
by weak liquidity and debt protection metrics.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 28 CRISIL B+/Stable (Reaffirmed)
Foreign Bill Purchase 130 CRISIL B+/Stable (Reaffirmed)
Letter of Credit 25 CRISIL A4 (Reaffirmed)
Packing Credit 152 CRISIL B+/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility 85 CRISIL B+/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that ATPL will continue to benefit over the medium
term from its promoters' extensive industry experience. CRISIL,
however, also believes that the company's liquidity will remain
constrained over the same period by the company's long working
capital cycle, in spite of financial support received from its
promoters. The outlook may be revised to 'Positive' in case of
substantial growth in ATPL's turnover with stable profitability
and controlled working capital cycle. Conversely, the outlook may
be revised to 'Negative' if the company's liquidity deteriorates,
most likely because of large working capital requirements and
significantly low accruals.
Incorporated by Mr.Maqbul Alam, ATPL is engaged in export of hides
and stitched leather and manufactures leather furniture. The
business was started in the early 1920s, when Mr. Mohammed Hanif,
father of Mr. Maqbul Alam, set up a raw hide and skin trading
centre in North Bihar. In 1962, the promoter family set up a
partnership firm, Maqbul Alam & Co, which began operations by
exporting dry salted skin and wet blue leather to Europe. In 1970,
the promoter family shifted to Kolkata where ATPL was
incorporated. ATPL has two tannery units, and currently
manufactures leather sofa and chair covers. It exports its
products to the UK, Germany, Poland, Hungary, China, South Africa,
and Australia.
ATPL reported a profit after tax of INR2.7 million on net sales of
INR337 million for 2013-14 (refers to financial year, April 1 to
March 31), against a net loss of INR44 million on net sales of
INR248 million for 2012-13.
AMAR COTTEX: CARE Revises Rating on INR7cr Long Term Loan to B+
---------------------------------------------------------------
CARE revises the rating assigned to the bank facilities of
Amar Cottex Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 7 CARE B+ Revised from
CARE B
Rating Rationale
The revision in the rating assigned to the bank facility of Amar
Cottex Private Limited (ACPL) was primarily on account of
increase in the total operating income (TOI) and improvement in
profitability, capital structure and debt coverage indicators.
The rating continues to remain constrained on account of its
moderate liquidity indicators coupled with susceptibility of
its thin operating margins to cotton prices fluctuations and
seasonality associated with cotton availability. The rating is
further constrained on account of prices and supply for cotton
being regulated by the government.
The rating, however, continues to derive strength from the
experience of the promoters in the cotton ginning industry
coupled with strategically located within the cotton-producing
area of Gujarat.
The ability of ACPL to increase its scale of operations while
managing volatility associated with the cotton prices and
improvement in its overall financial risk profile through
improvement in the profitability and capital structure are the key
rating sensitivities.
Rajkot-based ACPL was incorporated in March 2011, by Mr Nilesh
Devjibhai Sakhiya and Mr Naranbhai Karsanbhai Ramani as a private
limited company. ACPL is engaged in the cotton ginning and
pressing activity and started commercial production from November
2011. Mr Jayraj Vekariya is managing the overall business
operation of ACPL. ACPL has installed capacity of 6,800 metric
tonnes per annum (MTPA) as on March 31, 2014, for cotton bales at
its sole manufacturing facility located at Rajkot (Gujarat).
As per the audited results of FY14, ACPL reported PAT of INR0.11
crore on a TOI of INR46.11 crore as against the TOI of INR43.93
crore and PAT of INR0.09 crore. As per the provisional results for
H1FY15, ACPL registered the turnover of INR23.22 crore.
BADARPUR FARIDABAD: CARE Revises Rating on INR393cr LT Loan to D
----------------------------------------------------------------
CARE revises the rating assigned to the bank facilities of
Badarpur Faridabad Tollway Ltd.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 393 CARE D Revised from
CARE B
Rating Rationale
The rating assigned to the bank facilities of Badarpur Faridabad
Tollway Ltd (BFTL) has been revised owing to delays in servicing
of interest on term loan. The liquidity position of the company is
constrained due to significant traffic leakage occurring on
account of the non-tolling operating road traversing below the
project highway, which adversely affected toll revenue of BFTL.
Any significant change in toll revenues and/or O&M expenses
impacting the cash-flows remain the rating sensitivities.
BFTL is a Special Purpose Vehicle (SPV) incorporated by Hindustan
Construction Company Limited (HCC) to undertake the construction
of an Elevated Six Lane Highway of 4.4 km [from 16.10 km to 20.50
km (including its approaches)] on the Delhi-Agra stretch on
National Highway (NH-2) on Design Build Finance Operate and
Transfer (DBFOT) pattern under National Highway Development
Programme (NHDP). The Concession Agreement was signed between
National Highways Authority of India (NHAI) and BFTL on Sept. 4,
2008 for a concession period of 20 years including construction
period of two years. The highway has become operational from
November 2010 onwards vis-…-vis the scheduled commercial operation
date (COD) of December, 2010.
Credit Risk Assessment
Delays in servicing of debt obligations
The liquidity position of the company is constrained on account of
significant traffic leakage occurring on account of the non-
tolling operating road traversing below the project highway. There
is delay in servicing of interest on term loan since May 2014
owing to subdued growth in toll collection on account of continued
traffic leakage.
Strategic location of the stretch, however affected due to traffic
leakage
The project stretch, an elevated carriageway, is centrally located
on the existing Delhi-Agra section of NH-2, a highly congested
route which passes through Delhi, Haryana, Uttar Pradesh, Bihar,
Jharkhand, and West Bengal. The project stretch has five important
junctions namely Badarpur Thermal Power Station, Mehrauli,
Jaitpur, Sarai Bypass and Sector 37 Road Junction. However, the
project is affected by an existing road traversing from below the
highway resulting in revenue leakage and impacting the revenue
generation capacity of the project. The toll revenue has increased
by 11.6% yo-y to INR36.92 crore in FY14 (albeit lower than
envisaged; refers to the period April 01 to March 31).
Interest rate risk
The interest rates have been revised under the restructuring
agreement and have been brought down as a part of
restructuring.
CALICA RESOURCES: CRISIL Reaffirms B Rating on INR10MM Loan
-----------------------------------------------------------
CRISIL's ratings on the bank facilities of Calica Resources Pvt
Ltd (CRPL) continue to reflect its small scale of operations in
the highly fragmented agri-commodity industry and susceptibility
of its profitability to volatility in guar gum prices and foreign
exchange rate. These rating weaknesses are partially offset by its
promoters' extensive experience in the agri-commodity industry.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Export Packing Credit 90 CRISIL A4 (Reaffirmed)
Export Packing Credit 10 CRISIL B/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility 2 CRISIL B/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that CRPL will benefit over the medium term from
its promoters' extensive industry experience. The outlook may be
revised to 'Positive' if CRPL significantly scales up its scale of
operation while it maintains its profitability leading to healthy
cash accruals. Conversely, the outlook may be revised to
'Negative' in case its financial risk profile deteriorates on
account of increase in its working capital requirements or the
company continues to face pressure on revenue growth and
profitability.
Update
CRPL, on a provisional basis, reported net sales of INR210 million
for 2013-14 (refers to financial year, April 1 to
March 31) as compared to INR368.7 million a year ago, registering
a year-on-year decline of 43 per cent. This was majorly on account
of sharp decline in guar gum prices leading to lower realisation
as compared to 2012-13. With sales of around INR50 million till
August 2014 and guar gum prices showing correction in the past few
months, CRISIL believes the sales will remain at around similar
levels. With depreciation in rupee, CRPL witnessed foreign
exchange gain of INR7.8 million in 2013-14. Its operating margin
has been at around 5.3 per cent in 2013-14 as compared to 2.9 per
cent in 2012-13. Its moderate working capital requirement is
reflected in gross current assets (GCA) of 112 days as on March
31, 2014. Though majority of CRPL's inventory is backed by orders,
the debtors increase towards closing of the financial year leading
to increase in GCA. The financial risk profile was moderate with
gearing remaining comfortable at 0.35 times as on March 31, 2014.
CRPL's promoters infused unsecured loan of around INR37.7 million
to support its working capital requirements on which no interest
is paid (CRISIL has treated the same as neither debt nor equity).
With majority of the working capital requirements being met
internally, its reliance on external debt has been low with
average bank limit utilisation at 12 per cent for the 12 months
ended March 2014. CRISIL believes the management of working
capital requirements can affect CRPL's financial risk profile and
hence will remain a rating sensitivity factor over medium term.
CRPL, on a provisional basis, reported a net loss of INR1.3
million on net sales of INR210 million for 2013-14 as compared to
a net loss of INR0.07 million on net sales of INR368.7 million in
2012-13.
Incorporated in 2011, CRPL is promoted by Ahmedabad-based Mr.
Ankit Patel and Mr. Sandeep Patel. It is part of the Calica Export
group, that manufactures and trades in textile grade, food grade
and industrial grade powder made from guar seeds, tamarind and
maize starch.
DEKSON CASTINGS: CARE Reaffirms B+ Rating on INR4.50cr Bank Loan
----------------------------------------------------------------
CARE revises ratings assigned to bank facilities of Dekson
Castings Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 4.50 CARE B+ Reaffirmed
Short term Bank Facilities 1.75 CARE A4 Reaffirmed
Rating Rationale
The ratings assigned to the bank facilities of Dekson Castings
Limited (DCL) continue to remain constrained by the company's
relatively small scale of operations and high customer
concentration risk. The ratings are further constrained
by the working capital-intensive nature of operations with
stretched liquidity position, weak debt coverage indicators and
elongated operating cycle along with presence in a cyclical
industry.
The above constraints are partially offset by the long track
record of operations and experience of the promoters in the
casting industry with locational advantage derived from proximity
to key customers and moderately leveraged capital structure.
The ability of the company to improve its profitability margins
and scale of operations without any further deterioration in its
capital structure remains the key rating sensitivity.
Established in the year 1993 as a proprietorship concern, DCL was
later reconstituted as a private limited company in the year 2005.
In the year 2014, the company was converted to a public limited
and was listed on the SME Institutional Trading Platform of the
Bombay Stock Exchange (BSE). DPL is promoted by Mr Vikram Dekate
and his brother Mr Chetan Dekate and is engaged in the
manufacturing of aluminium sand castings and gravity die castings
components. The company was engaged in the manufacturing of
aluminium alloys until FY11 (refers to the period April 1 to
March 31); however, the company exited the business segment given
the commodity nature of the product and limited margins. The
manufacturing unit of the company is located in Aurangabad and has
an installed capacity of 1,180 metric tonnes per annum as on March
31, 2014. In FY14, the company reported a total operating income
of INR18.93 crore and net profit of INR0.21 crore as against a
total income and PAT of INR14.02 crore and INR0.15 crore,
respectively, in FY13.
DIAMOND POWER: CARE Revises Rating on INR1,125.68cr Loan to 'C'
---------------------------------------------------------------
CARE revises the ratings assigned to the ncd issue and various
bank facilities of Diamond Power Infrastructure Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 1,125.68 CARE C Revised from
Facilities CARE BBB+
Long Term/Short Term 830.08 CARE C/CARE A4 Revised
Bank Facilities From CARE BBB+/CARE A3+
Non-Convertible 100.00 CARE D Revised from
Debenture Issue - I CARE BBB+
Rating Rationale
The revision in the rating takes into account reported delays in
debt servicing of rated NCD issue. The revision also factors in
the stressed liquidity position arising out of heightened working
capital intensity of its operations.
Promoted by Mr S. N. Bhatnagar, Diamond Power Infrastructure Ltd
(DPIL) is a major player in domestic power conductors and cables
industry. It has also diversified organically into engineering,
procurement and construction (EPC) of transmission lines through
establishment of tower manufacturing capacity and into
manufacturing of transformers with acquisition of Western
Transformers Ltd [renamed as Diamond Power Transformers Ltd.
(DPTL)]. The company is presently engaged in the manufacturing of
power cables (which contributed 51% to the company's consolidated
total operating income in FY14, refers to period from April 1 to
March 31), power conductors (21%), transmission tower structures
(12%) and transformers (11%) along with execution of power
transmission EPC contracts (5%), making it a major player in the
domestic TDI (transmission and distribution infrastructure) sector
with vertically integrated operations. In FY13, it also entered
into the home wires and electrical accessories segment under its
own brand 'Diatron'.
Based on the audited financials, on a standalone level, DPIL
registered a total operating income of INR2,680 crore with a
PAT of INR104 crore in FY14 compared with a total operating income
of INR2,133 crore with a PAT of INR92 crore in FY13.
Furthermore, as per provisional result of Q1FY15, DPIL earned a
PAT of INR32 crore on a total operating income of INR687
crore.
GOVINDA COMMODITIES: CRISIL Cuts Rating on INR140MM Loan to 'D'
---------------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facilities
of Govinda Commodities Pvt Ltd (GCPL) to 'CRISIL D/CRISIL D' from
'CRISIL B+/Stable/CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 140 CRISIL D (Downgraded from
'CRISIL B+/Stable')
Letter of Credit 30 CRISIL D (Downgraded from
'CRISIL A4')
Proposed Long Term 1.7 CRISIL D (Downgraded from
Bank Loan Facility 'CRISIL B+/Stable')
The rating downgrade reflects GCPL's continuously overdrawn cash
credit account, and invocation of bank guarantee; both facilities
remained outstanding for more than 30 days. The irregularities
have been on account of the weakened liquidity position, due to
stretch in working capital, which has impacted GCPL's financial
risk profile significantly.
Incorporated in 2009-10 (refers to financial year, April 1 to
March 31), GCPL is promoted by Mr. Rajesh Singhi and Mr. G R
Binani. The company manufactures bright bars. In February 2014,
GCPL was acquired by Mr. Samir Kar and Mr. Trayambakeshwar
Samadder; the company manufactures wagons for the railways, as on
date.
GURUKRUPA DEVELOPERS: ICRA Reaffirms B+ Rating on INR125cr Loan
---------------------------------------------------------------
ICRA has re-affirmed the long-term rating of [ICRA]B+ assigned to
the INR125.00 crore long-term bank facilities of Gurukrupa
Developers DN Nagar Project.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-Term Fund
Based Limits (TL) 125.00 [ICRA]B+ Reaffirmed
The re-affirmation of the rating factors in the significant market
risks for the firm with only 6% of the total saleable area under
the Malwani project booked currently, despite having incurred ~52%
of the total project cost. The risk is further accentuated by the
fact that 33% of the project cost is budgeted to be financed by
customer advances that are contingent upon timely bookings and
collections from customers. Although with the entire debt funding
tied-up, this risk is mitigated to a certain extent.
The rating, however, positively takes into account the long
standing experience of the promoters in the real estate business.
Further, the rating draws comfort from the healthy profitability
from sale of units at Shubh Residency, the clear land title for
the Malwani project, along with receipt of key approvals, and the
advanced stage of project construction.
Incorporated in 2004, Gurukrupa Developers DN Nagar Project (GD)
is a partnership firm involved in real estate development in
Mumbai, Maharashtra. The firm is a part of the Gurukrupa Group
involved in real estate development mainly in Mumbai, with ~12.86
lakh sq. ft. of real estate properties developed till date. The
Group was promoted in 1994 by Mr. Mansukhbhai Kothari, Mr.
Mansukhbhai Sureja and Mr. Chetan Patel. The firm is currently
executing a residential real estate project in Mumbai -- the
Malwani Project at Malad (West). The firm has completed another
residential-cum-commercial re-development project, the Shubh
Residency, at Andheri (West).
HARSH MACRO: CARE Assigns B+ Rating to INR15cr Long Term Loan
-------------------------------------------------------------
CARE assigns 'CARE B+' rating to the long-term bank facilities of
Harsh Macro Buildhome Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 15 CARE B+ Assigned
Rating Rationale
The rating assigned to the bank facilities of Harsh Macro
Buildhome Private Limited (HMBPL) is primarily constrained on
account of its nascent stage of project implementation and
saleability risk associated with un-booked units. The rating is,
further, constrained on account of inherent risks associated with
the real estate sector.
The rating, however, favourably takes into account the experienced
management with diversified business operations of Harsh Macro
Group (HMG) and good booking status of the project.
The ability of HMBPL to successfully complete its on-going project
within the envisaged time and cost parameters, sale of units at
envisaged price and timely receipt of the booking advances are the
key rating sensitivities.
New World Buildhome Private Limited (NWBPL) was incorporated in
December 2012, by Mr Harsh Agarwal and Mr Nawal Singh Ratnawat
with an objective to develop real estate projects. Subsequently,
the name of the company was changed to Harsh Macro Buildhome
Private Limited (HMBPL) in March 2013. HMBPL is a part of the
Harsh Macro Group (HMG), which was formed by the Harsh group and
the Macro group having interest in diversified businesses
including real estate, jewellery, commodity and stock trading.
HMBPL is presently working on one residential project named 'The
Coronation' in Jaipur.
INDIABULLS REAL: Moody's Assigns B1 Corporate Family Rating
-----------------------------------------------------------
Moody's Investors Service has assigned a definitive B1 corporate
family rating (CFR) to Indiabulls Real Estate Limited
(Indiabulls).
At the same time, Moody's has also assigned a definitive B1 rating
to the USD175 million 10.25% Senior Notes due 2019 issued by
Century Limited, a wholly owned subsidiary of Indiabulls. The
outlook on the ratings remains stable.
Ratings Rationale
Moody's definitive rating affirms the provisional rating assigned
on 30 October 2014. Moody's rating rationale was set out in a
press release issued on that date.
The company will use part of the bond proceeds to repay part of
the acquisition loan for its London property -- GBP77.5 million
-- and repatriate the balance amount, after payment of issue
expenses, to India.
The repatriation of funds to India will increase Indiabulls'cash
balance by about INR2.7 billion. The company reported cash balance
of INR 4.9 billion and INR0.6 billion of mutual fund investments,
compared to debt maturing over next 12 months of INR11.5 billion
as of 30 September 2014.
"We expect Indiabulls to rely on external funding to meet its debt
repayment obligations over the next 12 months. The company has
demonstrated a successful track record of borrowing in the Indian
rupee market and we expect them to continue to have uninterrupted
access," says Vikas Halan, a Moody's Vice President and Senior
Credit Officer.
The company reported sales of 0.9 million square feet (INR9.6
billion) in six months ended September 2014 against 3.4 million
(INR30.7 billion) for fiscal year ended March 2014.
"The real estate sector in India has some seasonality where the
sales in October to March are generally 30-40% higher than the
sales in April to September. Moody's expect the company to sell
about 2.9 million square feet (INR24.7 billion) for the fiscal
year ending March 2015 because of this seasonality and based on
future project launch schedules,' adds Halan, who is the lead
analyst of Indiabulls.
Indiabulls reported an increase in revenues to INR13.8 billion in
six months ended September 2014 as compared to INR10 billion in
the corresponding period last year. The company, however, reported
largely flat EBITDA of INR3.5 billion over the same period,
implying a decline in EBITDA margin to 25% from 35%. The decline
in EBITDA margin was largely due to recognition of revenue from
lower margin projects like Blu, which has higher land costs.
'We expect the company's credit metrics to remain weakly
positioned for its ratings in fiscal year ending March 2015 with
EBITDA/Interest likely falling below 2.0x in FY15 from 3.1x in
FY14, but will improve to above 2.5x in FY16. Revenue to debt will
stand around 60% in FY15, but surpass 70% in FY16,' says Halan.
The stable outlook reflects Moody's expectation that the company
will substantially achieve its sales targets, execute its
construction plans without material delays, and will stay
disciplined in acquisitions for its land bank in India over the
next 2-3 years.
An upgrade over the medium term is unlikely as Moody's expects the
company's credit metrics to remain weakly positioned for its
rating over this period. Upward rating pressure could emerge
beyond FY17, if it establishes a track record of (1) achieving
planned sales and increasing revenue recognition; (2) maintaining
a reasonable cash balance above 150% of debt maturing for the next
12 months; and (3) maintaining strong financial discipline, such
that revenue/debt is above 100% and EBTIDA/interest is above 3x on
a sustained basis.
Downward rating pressure could emerge if (1) the company's
liquidity and operating cash flow generation deteriorate because
of weak contracted sales or aggressive land acquisitions; (2)
there is a decline in prices for its products, slower-than-
expected revenue recognition, or a fall in profit margins,
negatively affecting interest coverage and/or financial
flexibility; or (3) the company engages in material debt-funded
acquisitions.
In such a situation, cash and cash equivalents could fall below
100% of debt maturing over the next 12 months, and/or its credit
metrics could deteriorate, such that EBITDA/interest stays under
2.0x.
The principal methodology used in this rating was Global
Homebuilding Industry published in March 2009.
Indiabulls Real Estate Limited is one of the large real estate
developers in India with a focus on the Mumbai Metropolitan Region
(MMR) and National Capital Region (NCR or Delhi).
Its portfolio consists of: a) 12 (3 completed and 9 ongoing)
projects with a saleable area of 29.5 msf of which 14.0 msf have
already been sold; b) 4 projects to be launched for sale in
FY15/16 with a saleable area of 8.5msf; c) planned future launches
with a saleable area of 13.2 msf for launch over next 2-4 years;
d) a developable land bank of 1,010 acres, excluding 2,588 acres
in the Nashik SEZ; e) a 47.5% stake in Indiabulls Property
Investment Trust, a business trust listed in Singapore with a
market capitalization of USD357 million; and f) recently acquired
investment properties in London with a purchase price of GBP160
million.
JANHIT KARI: CRISIL Assigns 'B' Rating to INR10MM Bank Loan
-----------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable' rating to the bank
facilities of Janhit Kari Sewa Samiti (JHSS).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term 10 CRISIL B/Stable
Bank Loan Facility
The rating reflects the society's below-average financial risk
profile marked by low networth. The rating also reflects the small
scale of, and not-for-profit nature of operations. These rating
weaknesses are partially offset by the society's track record of
developed relations with government authorities for free-meal
assignments.
Outlook: Stable
CRISIL believes that JHSS's business risk profile will remain
constrained on account of its small scale of operations. The
outlook may be revised to 'Positive' in case the firm registers
significant improvement in its scale of operations,
diversification of revenue profile and/or timely collection of
receivables leading to improvement in its financial risk profile.
Conversely, the outlook may be revised to 'Negative' in case the
firm registers a decline in its sales or profitability or if its
working capital requirements are larger than expected, leading to
pressure on its financial risk profile.
JHSS is organized as a not-for-profit society and is located at
Charra town-ship of district Aligarh of Uttar Pradesh. The society
provides free meals under mid-day meal scheme and various other
government mandated schemes.
JHSS reported a net surplus of INR0.25 million on an operating
income of INR13.6 million for 2013-14, against a net surplus of
INR0.08 million on an operating income of INR6.3 million for 2012-
13.
KALYANI ASSOCIATES: CRISIL Cuts Rating on INR70MM Loan to 'D'
-------------------------------------------------------------
CRISIL has downgraded its ratings on the bank facilities of
Kalyani Associates Private Limited (KAPL) to 'CRISIL D/CRISIL D'
from 'CRISIL B+/Stable/CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 1.3 CRISIL D (Downgraded from
'CRISIL A4')
Cash Credit 70 CRISIL D (Downgraded from
'CRISIL B+/Stable')
Long Term Loan 20 CRISIL D (Downgraded from
'CRISIL B+/Stable')
Overdraft Facility 25 CRISIL D (Downgraded from
'CRISIL B+/Stable')
The rating downgrade reflects instances of delays in term loan
repayment on account of weak liquidity.
The rating also reflects KAPL's below average financial risk
profile marked by low net worth and high total outside liability
to total networth ratio. Furthermore the company also has limited
bargaining power with principals and exposure to intense
competition in the automobile dealership market. However the KAPL
will continue to benefit from its established relationships with
the key principals and promoters' extensive entrepreneurial
experience.
Incorporated in 2004, Madurai-based KAPL is primarily engaged in
dealership of Honda 2-wheelers and trading of power products, as
well as apparels and footwear. The company is managed by Mr. L.
Nandakumar.
KG FABRIKS: ICRA Lowers Rating on INR43.54cr Term Loan to 'C+'
--------------------------------------------------------------
ICRA has revised the long-term rating outstanding on the INR43.54
crore (revised from INR52.02 crore) term loan facilities and
INR29.12 crore (revised from INR26.89 crore) fund based facilities
of KG Fabriks Limited from [ICRA]B- to [ICRA]C+. ICRA has re-
affirmed the short-term rating outstanding on the INR11.12 crore
(revised from INR10.08 crore) non fund based facilities of KGFL at
[ICRA]A4.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term loan facilities 43.54 [ICRA]C+/downgraded from
[ICRA]B-
Long term fund based
facilities 29.12 [ICRA]C+/downgraded from
[ICRA]B-
Short term non fund 11.12 Reaffirmed at [ICRA]A4
based facilities
The revision of long term rating takes into account the
deterioration in KGFL's financial profile during FY 2013-14, owing
to cash losses incurred, resulting in stretched liquidity position
and weak capitalisation and coverage indicators (company's gearing
stood at 4.3 times as on March 14). During FY 2013-14, the
company's operating margin contracted sharply to 4.3% from 13.8%
in 2012-13 owing to significant increase in input costs and
inability to pass on the same to its customers. Further, the
ratings continue to be constrained by susceptibility of earnings
to fluctuations in raw material prices, intense competition and
strong cyclicality inherent in the denim industry, severely
restricting pricing power during periods of oversupply and
downturns. The ratings however take into account the long-standing
experience of the promoters in the denim industry and the
company's strong operational linkages with group entity, Sri
Kannapiran Mills Limited ([ICRA]BB- (Stable)/ [ICRA]A4) which lend
synergies in the form of efficient yarn procurement, reduced lead
time and optimal inventory holding. Going forward, ability of the
company to improve its liquidity position substantially, either
through fund support from promoters in the form of unsecured loans
or healthy generation of cash accruals, would be critical to
service annual repayment obligation to the tune of ~INR10.6 crore
- INR11.2 crore over the medium term and would remain a key rating
sensitivity.
K G Fabriks Limited (KGFL) was originally incorporated as a Non
Banking Finance Company in 1994 in the name K G Denim Finance
Limited, engaged in the business of hire purchase and leasing. In
1999, the company changed its line of business activity, wherein
it focused on trading activities and was subsequently renamed as
"Southern Technologies Limited (STL)". In 2004, the company
ventured into textile business, backed by its group's established
presence in the textile value chain and the name was changed to K
G Fabriks Limited. Presently, the company is engaged in yarn
processing and manufacturing grey fabric.
Recent Results
During the financial year 2013-14, the company reported net loss
of INR5.0 crore on an operating income of INR150.8 crore as
against a net loss of INR3.8 crore on an operating income of
INR130.1 crore for the year 2012-13. For six months ended
September 30, 2014, the company has reported an operating income
of INR83.8 crore.
KINGFISHER AIRLINES: India Junks Mallya's Reappointment as Head
---------------------------------------------------------------
Adi Narayan and Anurag Kotoky at Bloomberg News report that
India's government rejected Vijay Mallya's reappointment as chief
of the grounded Kingfisher Airlines Ltd. in a rare veto of a
company decision as the liquor tycoon battles creditors and
shareholders.
The Ministry of Corporate Affairs rejected the company's
application to ratify Mallya's reappointment to the position for
five years starting Oct. 16, 2013, according to an exchange filing
on December 1, Bloomberg relates. The carrier stopped flights in
2012 after losses widened amid mounting debt, leading to defaults
on payments to lessors, lenders and airports.
According to Bloomberg, the government's action is the latest blow
to Mr. Mallya after a bank named the airline and some directors
including him as defaulters, a tag that may prevent him and the
companies on whose boards he is a member from seeking futures
loans. Separately, another filing on December 1 announced that he
resigned from the board of Mangalore Chemicals & Fertilizers Ltd.
(MCF), a company owned by his UB Group, Bloomberg reports.
"This is fantastic, and a great victory for shareholders,"
Bloomberg quotes J.N. Gupta, founder of the Mumbai-based proxy
advisory firm Stakeholders Empowerment Services, as saying. Such
intervention by the government occurs in the "rarest of rare"
circumstances, he said.
Bloomberg says Mr. Mallya is still the chairman of United Spirits
Ltd. (UNSP), now controlled by Diageo Plc. He is also the chairman
of United Breweries Ltd., the producer of India's best-selling
beer brand, Kingfisher, Bloomberg discloses.
Kingfisher Airlines had debt of INR91.4 billion ($1.5 billion) as
of Dec. 31, according to data compiled by Bloomberg. The company
based in Bengaluru, formerly known as Bangalore, hasn't filed
financial reports since, says Bloomberg. Efforts are underway to
try and publish the results, the company said in an August
statement.
The carrier lost its flying permit after it ceased operations in
2012. The company said in January it aimed to restart operations,
though its license will expire at the end of this year if flights
don't resume by then, Bloomberg notes.
India's Companies Act requires companies faced with exceptional
circumstances, such as a precipitous drop in market value as in
the case of Kingfisher, to seek government approval for appointing
senior executives, said Shriram Subramanian, founder of Bengaluru-
based proxy advisory firm InGovern Research Services Pvt.,
Bloomberg relays.
Headquartered in Mumbai, India, Kingfisher Airlines --
http://www.flykingfisher.com/-- formerly known as Deccan
Aviation Ltd., served about 35 domestic destinations with a fleet
of more than 40 aircraft, including Airbus jets and ATR 72
turboprops.
As reported in the Troubled Company Reporter-Asia Pacific on
Jan. 15, 2014, Bloomberg News said Kingfisher has grounded planes
since October 2012. The airline lost its operating license in
January last year after failing to convince authorities it
has enough funds to restart flights.
The airline defaulted on payments to lessors, creditors and
airports as losses widened amid rising fuel costs and competition.
According to Bloomberg News, Mr. Mirpuri said in an e-mail on
January 13 the airline continues its efforts to recapitalize and
restart services.
As reported in the TCR-AP on Jan. 27, 2014, CRISIL's ratings on
bank loan facilities of Kingfisher Airlines Ltd continue to
reflect delays by KFAL in servicing its debt; the delays have been
caused by the company's weak liquidity and continued losses at the
operating level. Losses in the past six years have resulted in a
complete erosion of KFAL's net worth, leading to its weak
financial risk profile.
For 2012-13 (refers to financial year, April 1 to March 31),
KFAL reported a net loss of INR83.5 billion (INR23.3 billion for
2011-12) on net sales of INR5 billion (INR54.85 billion). For the
six months ended September 30, 2013, it reported a net loss of
INR18.72 billion (INR14.04 billion for the corresponding period
of 2012-13) on net revenues of INR0.0 (INR5.01 billion).
MEHTA INTERTRADE: CRISIL Reaffirms B+ Rating on INR384MM LOC
------------------------------------------------------------
CRISIL's ratings on Mehta Intertrade Steels Private Limited (MISL;
part of the Mehta group) continue to reflect the Mehta group's
below-average financial risk profile, marked by its modest net
worth and high total outside liabilities to tangible net worth
ratio, and its exposure to risks related to operating in a highly
fragmented industry, marked by intense competition. These rating
weaknesses are partially offset by the extensive experience of the
group's promoters in the steel trading business.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 60 CRISIL B+/Stable (Reaffirmed)
Letter of Credit 384 CRISIL A4 (Reaffirmed)
Long Term Loan 56 CRISIL B+/Stable (Reaffirmed)
For arriving at its ratings, CRISIL has combined the business and
financial risk profiles of RBM and Mehta Intertrade Steels Pvt Ltd
(MISL), together referred to as the Mehta group. This is because
both these entities are managed by the same promoters, are in
similar line of business, have strong operational linkages, and
have fungible funds.
Outlook: Stable
CRISIL believes that the Mehta group will maintain its credit risk
profile, primarily led by its promoters' vast experience in the
steel business. The outlook may be revised to 'Positive' in case
of significant improvement in the group's financial risk profile,
backed by higher than expected profitability or any large equity
infusion, resulting in a decline in gearing. Conversely, the
outlook may be revised to 'Negative' if the group's profitability
deteriorates significantly or if its working capital requirements
increase significantly, or if undertakes larger-than-expected
debt-funded capital expenditure, leading to pressure on its
financial risk profile.
RBM was established in 1984 as a proprietorship firm by Mr.
Rajendra B Mehta in Mumbai. RBM primarily trades in steel
products, which constitutes 90 per cent of total sales, which
include cold-rolled and hot'rolled coils, and mild steel plates.
The firm also trades in import licenses, which account for the
remaining 10 per cent of sales.
MISL was established in 2005 as a partnership firm by Mr. Rajendra
Mehta, his brothers, Mr. Bhupendra Mehta and Mr. Hasmukhrai Mehta,
and Mr. Bhupendra Mehta's son, Mr. Harsh Mehta, and Mr. Hasmukhrai
Mehta's sons, Mr. Nilesh Mehta and Mr. Amit Mehta. . The firm was
reconstituted as a private limited company in 2007. It
manufactures electric resistance welded (ERW) pipes and precision
tubes and also trades in hot rolled coils. The company's
manufacturing sales are expected to increase over the medium term.
MILLENNIUM STARCH: CARE Cuts Rating on INR20.27cr LT Loan to D
--------------------------------------------------------------
CARE revises ratings assigned to bank facilities of Millennium
Starch India Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 20.27 CARE D Revised from
CARE B
Rating Rationale
The revision in the rating factors in the continuous delay in debt
servicing by Millennium Starch India Private Limited
(MSIPL).
Promoted by the Patil family, MSIPL is a starch manufacturer based
out of Sangli in Maharashtra. Established in the year 2008, MSIPL
manufactures starch from maize at its factory located in Belgaum
district, Karnataka. The company has production capacity of 52,880
MTPA of maize starch. Maize starch and its derivatives have
applications across multiple sectors like Food, Paper & Adhesives,
Pharmaceuticals, Textile, and Cattle & Poultry Feed, etc,
providing a diversified customer base. The promoters are involved
in various businesses through proprietorship firms with average
experience of 10 years.
In FY14 (refers to the period April 01 to March 31), MSIPL has
registered a profit after tax (PAT) of INR0.57 crore as against
the total operating income of INR45.60 crore as compared with the
net loss of INR1.43 crore as against the total operating
income of INR1.61 crore in FY13.
MONARCH APPARELS: ICRA Suspends 'B' Rating on INR26.67cr LT Loan
----------------------------------------------------------------
ICRA has suspended the rating of [ICRA]B outstanding on the
INR26.67 crore long term fund based limits of Monarch Apparels
(India) Limited. The suspension follows ICRA's inability to carry
out a rating surveillance in the absence of the requisite
information from the company.
Monarch Apparels (India) Limited is a family-owned company
incorporated in April 2005. The company designs, manufactures and
sells branded men's bottom-wear like Jeans, cotton and TR
(Terelyne Rayon fabric) suiting trousers, club-wear apparels and
cargos under the owned brand 'Monarch'.
NEENA GIRDHAR: CRISIL Assigns 'B' Rating to INR61MM Term Loan
-------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable' rating to the bank
facilities of Neena Girdhar & Wanti Devi (part of Agreement
Members).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 61 CRISIL B/Stable
The rating reflects low demand risk on account of long term lease
agreement, and low counterparty risk. These rating strengths are
partially offset by geographical and customer concentration in
revenue profile.
For arriving at the ratings, CRISIL has consolidated the business
and financial risk profiles of 'Neena Girdhar & Wanti Devi',
'Poonam Leekha & Anju Leekha' and 'Renu Chanana, Ranjana Chanana
Pallavi Chanana & Anita Gupta'; together referred to as the
'Agreement Members', as the term loans are jointly and severally
guaranteed by all Agreement Members and the Agreement Members are
jointly responsible for honoring the debt obligations.
Outlook: Stable
CRISIL believes that Agreement Members will benefit from the long
term lease contract leading to stable cash accruals over the
medium term. The outlook may be revised to 'Positive' in case
Agreement Members generate significantly higher-than-expected cash
accruals, leading to improvement in financial risk profile.
Conversely the outlook may be revised to 'Negative' in case of
delays in receipt of rent or in case of unexpected termination of
lease contract adversely affecting cash flows which impairs its
debt-servicing ability.
Agreement Members have signed a joint agreement with Haryana State
Cooperative Supply and Marketing Federation Ltd (HAFED, rated
CRISIL A-/Stable) for leasing 70,000 metric tonnes (MT) of
warehouse capacity to facilitate storage of agro based products
storage in Sadalpur Village, Adampur District, Hisar (Haryana).
The tenure of the agreement is of 10 years till May 2024.
PLATINUM ALLOYS: ICRA Assigns 'D' Rating to INR23.70cr Term Loan
----------------------------------------------------------------
ICRA has assigned an [ICRA]D rating to the INR23.70 crore term
loan and INR14.50 crore cash credit facilities of Platinum Alloys
Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based Limit- 23.70 [ICRA]D assigned
Term Loan
Fund Based Limit- 14.50 [ICRA]D assigned
Cash Credit
The assigned rating primarily takes into account PAPL's
unsatisfactory track record in timely servicing of debt
obligations on account of its stretched liquidity position. The
rating also takes into account the weak financial profile of PAPL
characterized by a leveraged capital structure and depressed level
of coverage indicators, the ongoing weakness and cyclicality
inherent in the steel industry to which PAPL primarily caters to
and the vulnerability of the company's profitability to volatility
in raw material as well as finished goods prices. The rating is
also constrained by the lack of captive source of power, adversely
affecting the cost of production given the power intensive nature
of operations, and high working capital intensity of its
operations, given its high inventory holding, which along with
substantial debt servicing obligation in the near term, is likely
to keep the cash flows under pressure, going forward. The rating,
however, favourably considers the experience of the promoters in
the ferro alloy business and entitlement to various fiscal
incentives under North Eastern Industrial and Investment Promotion
Policy (NEIIPP) 2007, which supports the company's profitability
to an extent.
Incorporated in 2006, PAPL is engaged in the manufacturing of
ferro silicon with an installed capacity of 14,256 tonne per annum
(TPA). The manufacturing facility of the company is located at
Naharlagun, Arunachal Pradesh. The company commenced its
commercial production with two 9 MVA submerged electric arc
furnace (EAF) in June, 2011.
Recent Results
The company reported a net profit of INR1.47 crore (provisional)
on an operating income of INR46.20 crore (provisional) in 2013-14;
as compared to a net profit of INR1.49 crore on an operating
income of INR79.41 crore in 2012-13.
PONDICHERRY TINDIVANAM: ICRA Suspends INR199.18cr Loan 'D' Rating
-----------------------------------------------------------------
ICRA has suspended [ICRA]D rating assigned to the INR199.18 crore
bank facilities of Pondicherry Tindivanam Tollways Limited. The
suspension follows ICRA's inability to carry out a rating
surveillance in the absence of the requisite information from the
company.
PROGRESSIVE MOTORS: CRISIL Assigns B+ Rating to INR50MM Cash Loan
-----------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to
the bank facilities of Progressive Motors (PM).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term 8.7 CRISIL B+/Stable
Bank Loan Facility
Bank Guarantee 41.3 CRISIL A4
Cash Credit 50 CRISIL B+/Stable
The rating reflects modest scale and working capital intensive
operations and below average financial risk profile marked by
small networth and high external indebtedness. These rating
weaknesses are partially offset by extensive industry experience
of promoters and established relationships with principals.
Outlook: Stable
CRISIL expects PM will continue to benefit from the promoters
extensive experience in the industry. The outlook may be revised
to 'Positive' if the company's financial risk profile improves on
account of better profitability margins and higher-than-expected
revenues, or capital infusion by promoters. Conversely, the
outlook may be revised to 'Negative' in case of decline in
revenues or profitability, or on account of higher than expected
debt due to stretch in working capital cycle.
PM, setup in 2007, is a partnership firm between Mr. Biplab Kr
Saha, his wife Mrs. Suparna Saha and his brother Mr. Dilip Kr
Saha. The firm is an authorized dealer of construction equipment,
tractors, and farm equipment of Terex Equipment Pvt Ltd, Terex
India Pvt Ltd, Kobelco Construction Equipment Pvt Ltd, Greaves
Cotton Ltd and Mahindra & Mahindra Ltd. The firm has 4 showrooms
in 3 states - 1 in Tripura (Agartala), 1 in Meghalaya (Shillong)
and 2 in Assam (Guwahati and Silchar).
R. B. MEHTA: CRISIL Reaffirms B+ Rating on INR58MM Secured Loan
---------------------------------------------------------------
CRISIL's ratings on R. B. Mehta and Company (RBM; part of the
Mehta group) continue to reflect the Mehta group's below-average
financial risk profile, marked by its modest net worth and high
total outside liabilities to tangible net worth ratio, and its
exposure to risks related to operating in a highly fragmented
industry, marked by intense competition. These rating weaknesses
are partially offset by the extensive experience of the group's
promoters in the steel trading business.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Letter of Credit 150 CRISIL A4 (Reaffirmed)
Proposed Long Term
Bank Loan Facility 42 CRISIL B+/Stable (Reaffirmed)
Secured Overdraft
Facility 58 CRISIL B+/Stable (Reaffirmed)
For arriving at its ratings, CRISIL has combined the business and
financial risk profiles of RBM and Mehta Intertrade Steels Pvt Ltd
(MISL), together referred to as the Mehta group. This is because
both these entities are managed by the same promoters, are in
similar line of business, have strong operational linkages, and
have fungible funds.
Outlook: Stable
CRISIL believes that the Mehta group will maintain its credit risk
profile, primarily led by its promoters' vast experience in the
steel business. The outlook may be revised to 'Positive' in case
of significant improvement in the group's financial risk profile,
backed by higher than expected profitability or any large equity
infusion, resulting in a decline in gearing. Conversely, the
outlook may be revised to 'Negative' if the group's profitability
deteriorates significantly or if its working capital requirements
increase significantly, or if undertakes larger-than-expected
debt-funded capital expenditure, leading to pressure on its
financial risk profile.
RBM was established in 1984 as a proprietorship firm by Mr.
Rajendra B Mehta in Mumbai. RBM primarily trades in steel
products, which constitutes 90 per cent of total sales, which
include cold-rolled and hot'rolled coils, and mild steel plates.
The firm also trades in import licenses, which account for the
remaining 10 per cent of sales.
MISL was established in 2005 as a partnership firm by Mr. Rajendra
Mehta, his brothers, Mr. Bhupendra Mehta and Mr. Hasmukhrai Mehta,
and Mr. Bhupendra Mehta's son, Mr. Harsh Mehta, and Mr. Hasmukhrai
Mehta's sons, Mr. Nilesh Mehta and Mr. Amit Mehta. . The firm was
reconstituted as a private limited company in 2007. It
manufactures electric resistance welded (ERW) pipes and precision
tubes and also trades in hot rolled coils. The company's
manufacturing sales are expected to increase over the medium term.
RADHE SHAM: CARE Assigns B+ Rating to INR6.28cr LT Bank Loan
------------------------------------------------------------
CARE assigns 'CARE B+' and 'CARE A4' ratings to bank facilities of
Radhe Sham & Sons.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 6.28 CARE B+ Assigned
Short term Bank Facilities 0.54 CARE A4 Assigned
Rating Rationale
The ratings assigned to the bank facilities of Radhe Sham & Sons
are constrained by RSS's relatively small scale of operations with
low net worth base, weak financial risk profile marked by low
profitability margins, leveraged capital structure, weak coverage
indicators and working capital-intensive nature of operations. The
ratings are further constrained by high degree of competition due
to the fragmented nature of the industry, susceptibility of
margins to fluctuation in raw material prices with monsoon-
dependent operations and constitution of the entity as a
partnership firm.
The ratings, however, favourably take into account the reasonable
experience of the partners.
The ability of the firm to increase the scale of operations while
improving profitability margin, improve its capital structure
while managing the working capital requirements efficiently would
be the key rating sensitivities.
Radhe Sham & Sons (RSS) has initially established as
proprietorship firm in 1979 and later constitution has changed to
partnership firm w.e.f. April 2014. The firm is currently having
three partners, viz, Mr Suresh Kumar, Mr Parveen Kumar
and Mr Nikhil Garg having 2:1:1 share in profit and loss. The firm
is engaged in the processing of paddy and also does the
same on job work basis for other rice millers at its manufacturing
facility located in Ferozpur City, Punjab, with total installed
capacity of 18,000 metric ton per annum (MTPA) as on March 31,
2014. The main raw material is paddy, which is
procured from dealers and agents from the states of Haryana and
Punjab. The firm sells its products, ie, basmati and nonbasmati
rice in the states of Delhi, Haryana and Punjab through a network
of commission agents and traders.
For FY14 9 refers to the period April 01 to March 31), RSS
reported a total income of INR 14.07 crore with PBILDT and PAT
of INR1.17 crore and INR0.10 crore, respectively, as against a
total income of INR7.13 crore with PBILDT and PAT of INR 0.67
crore and INR0.06 crore in FY13.
RENU CHANANA: CRISIL Assigns B Rating to INR61MM Term Loan
----------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable' rating to the bank
facilities of Renu Chanana, Ranjana Chanana Pallavi Chanana, &
Anita Gupta (part of Agreement Members).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 61 CRISIL B/Stable
The rating reflects low demand risk on account of long term lease
agreement, and low counterparty risk. These rating strengths are
partially offset by geographical and customer concentration in
revenue profile.
For arriving at the ratings, CRISIL has consolidated the business
and financial risk profiles of 'Neena Girdhar & Wanti Devi',
'Poonam Leekha & Anju Leekha' and 'Renu Chanana, Ranjana Chanana
Pallavi Chanana, & Anita Gupta'; together referred to as the
'Agreement Members', as the term loans are jointly and severally
guaranteed by all Agreement Members and the Agreement Members are
jointly responsible for honouring the debt obligations.
Outlook: Stable
CRISIL believes that Agreement Members will benefit from the long
term lease contract leading to stable cash accruals over the
medium term. The outlook may be revised to 'Positive' in case
Agreement Members generate significantly higher-than-expected cash
accruals, leading to improvement in financial risk profile.
Conversely the outlook may be revised to 'Negative' in case of
delays in receipt of rent or in case of unexpected termination of
lease contract adversely affecting cash flows which impairs its
debt-servicing ability.
Agreement Members have signed a joint agreement with Haryana State
Cooperative Supply and Marketing Federation Ltd (HAFED, rated
CRISIL A-/Stable) for leasing 70,000 metric tonnes (MT) of
warehouse capacity to facilitate storage of agro based products
storage in Sadalpur Village, Adampur District, Hisar (Haryana).
The tenure of the agreement is of 10 years till May 2024.
REWA PATHWAYS: CARE Upgrades Rating on INR22.44cr LT Loan to B+
---------------------------------------------------------------
CARE revises rating assigned to bank facilities of Rewa Pathways
Pvt Ltd.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 22.44 CARE B+ Revised from
CARE D
Rating Rationale
The revision in the rating of Rewa Pathways Pvt Ltd (RPPL) takes
into account the regularization of its debt servicing on
account of commencement of annuity receipts, also supported by a
moderate toll collection.
The rating, however, is constrained on account of dependence of
the project debt servicing on sponsors' support, till the
establishment of adequate reserves. The rating continues to be
constrained by the inherent uncertainty associated with future
operations and maintenance expenditure and interest rate risk.
The rating continues to take into account the experience of its
principal sponsor, Prakash Asphaltings and Toll Highways
(India) Ltd. (PATH), in road construction, its annuity-based
revenue model and moderate counterparty risk of the annuity
provider, Madhya Pradesh Road Development Corporation Ltd (MPRDC;
rated CARE A (Is)).
Establishment of track record of timely receipt of annuities from
MPRDC, along with collection of envisaged toll and company's
ability to absorb any significant variations in the operations and
maintenance expenditure and interest costs
would be the key rating sensitivities.
Incorporated in March 2011, RPPL is a Special purpose vehicle
(SPV) sponsored jointly by Prakash Asphaltings and Toll Highways
(India) Ltd (PATH; 51% stake) and Udit Infraworld Pvt Ltd (UIPL;
49% stake) to undertake widening and strengthening (two-lane) of
Semariya-Manikpur section of state highway 9 under concession from
MPRDC; a Government of Madhya Pradesh (GoMP) undertaking;, on
design, build, finance, operate and transfer (DBFOT) toll +
annuity basis. The principal sponsor, PATH, has an experience of
over two decades in road construction.
The Concession Agreement (CA) between RPPL (concessionaire) and
MPRDC (concessioning authority) was executed on March 22, 2011 for
a period of 15 years, including two years of construction period.
RPPL achieved provisional COD and started toll collections from
Jan. 3, 2014. The final completion certificate for the
project was received on April 4, 2014. It also received its first
annuity on July 28, 2014.
The total project cost of INR35.64 crore, including a cost overrun
of INR1.14 crore has been financed through debt of INR23
crore and the balance through equity and unsecured loans from the
sponsors.
SMIT DEVELOPERS: ICRA Assigns B+ Rating to INR9.18cr Term Loan
--------------------------------------------------------------
ICRA has assigned a long term rating of [ICRA]B+ to the INR9.18
crore term loan facilities of Smit Developers.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term Loans 9.18 [ICRA]B+ assigned
The assigned rating is constrained by residual project
implementation risks for Tankar Residency-III project and the
sales risk for both the projects given the low level of bookings
achieved till September 2014 coupled with the intense competitive
pressures from other upcoming real estate projects in Ahmedabad.
The assigned rating also factors the exposure to the cyclicality
of demand in the real estate business and vulnerability of its
profitability to steel and cement price variations. ICRA further
notes the significant debt repayments in the medium term wherein
the firm's ability to secure further bookings and collection from
customers would remain crucial from debt servicing perspective.
ICRA also notes that Smit Developers is a partnership firm and any
significant withdrawals from the capital account would affect its
net worth and thereby the gearing levels.
The rating however favorably factors in the established track
record of its partners in real estate segment and the favorable
locations of the projects in developed industrial area giving its
appropriate visibility.
Smit Developers (SD) was incorporated in 2008 to engage in
construction of residential cum commercial buildings and is
currently managed by Shri Susmit S. Rokad and his wife Smt. Varsha
S. Rokad (both sharing 42.25% profitability in the firm), along
with six other partners. The partners of SD have an established
track record of constructing around 596 flats, 207 bungalows and
18 shops in the Ahmedabad city through different associate
entities.The firm is currently working on two residential project
based in Vatva, Ahmedabad having saleable area of over 3.07 lakh
square feet at a cost of ~Rs. 29.50 Cr.
Recent Results
During FY 2014, the firm reported a profit after tax of INR0.46
crore on an operating income of INR8.91 crore.
SONEC SANITARY: CARE Reaffirms B Rating on INR6.09cr LT Bank Loan
-----------------------------------------------------------------
CARE reaffirms the ratings assigned to the bank facilities of
Sonec Sanitary Ware Pvt Ltd.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 6.09 CARE B Reaffirmed
Short term Bank Facilities 0.25 CARE A4 Reaffirmed
Rating Rationale
The ratings assigned to the bank facilities of Sonec Sanitary Ware
Private Limited (SSPL) continue to remain constrained due its
nascent stage of operations and highly leveraged capital
structure. The ratings are further constrained on account
of volatility associated with raw material and fuel prices and its
presence in the highly competitive ceramic industry with fortunes
linked to demand from the cyclical real estate industry. The
ratings take into account change in ownership and management and
operating losses and stressed liquidity position during FY14
(refers to the period April 1 to March 31).
These constraints outweigh the benefits derived from the wide
experience of the management in the ceramic industry and its
strategic location by way of being situated in the ceramic tile
manufacturing hub of Morbi in Gujarat.
Stabilization of operations with achievement of the envisaged
sales level, profitability and rationalization of debt level as
well as efficient working capital management amidst the
competitive industry are the key rating sensitivities.
Sonec Sanitary Ware Private Limited (SSPL) incorporated in April
2012 was originally promoted by Mr Balvant Khimji Dalsaniya and Mr
Mahavir Shantilal Jain. SSPL had set up its green field project
for manufacturing sanitary wares with an installed capacity
200,000 pieces per annum at Morbi in Gujarat. The total cost of
the project was INR8.25 crore financed through equity capital of
INR2 crore, term loan of INR5.60 crore and balance of INR0.65
crore through unsecured loan.
After a delay of three months on account of delay in the
disbursement of term loan, the project commenced in June,
2013. However, after incurring losses and mismanagement of
operations during FY14, the promoters sold their stakes to
Mr Hitesh Vasiyani, Mr Jaswant Patel, Mr Kantilal Serasiya and
their relatives in March 2014. The new promoters have extensive
experience in the ceramic industry through their firm Atlas
Industries. The new management has stabilised the operations
during Q1FY15 and the plant was operating at 90% capacity
utilization during Q2FY15.
As per the audited results for FY14, SSPL reported a TOI of
INR0.84 crore and net loss of INR1.33 crore. During 7MFY15,
SSPL achieved a turnover of INR3.20 crore and PAT of INR0.07
crore.
SREE VAAGESWARI: CRISIL Reaffirms B- Rating on INR25MM Term Loan
----------------------------------------------------------------
CRISIL's ratings on the bank facilities of Sree Vaageswari
Educational Society (SVES) continue to reflect SVES's weak
liquidity because of the mismatch in the cash flows, resulting
from lumpiness in fee collection.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Overdraft Facility 30 CRISIL A4 (Reaffirmed)
Proposed Long Term
Bank Loan Facility 5 CRISIL B-/Stable (Reaffirmed)
Term Loan 25 CRISIL B-/Stable (Reaffirmed)
The ratings also factor in SVES's susceptibility to intense
competition and regulatory risks, constraining its revenue growth.
These rating weaknesses are partially offset by extensive industry
experience of the promoters and the favourable demand prospects
for education sector in India.
Outlook: Stable
CRISIL believes that SVES will benefit over the medium term from
the extensive industry experience of its promoters. The outlook
may be revised to 'Positive' in case of improvement in the trust's
cash accruals, driven by improvement in its fee receipts and
profitability, while maintaining its debt protection metrics.
Conversely, the outlook may be revised to 'Negative' in case of
deterioration in SVES's financial risk profile, particularly
liquidity, most-likely because lower-than-expected cash accruals,
or if it is adversely impacted by any regulatory change, resulting
in decline in student intake.
Founded by Mr. G Samba Reddy in 2003, and based in Karimnagar,
near Hyderabad, SVES provides courses in engineering and offers
other professional courses through its institutes. The society has
set-up seven institutes offering courses across the engineering,
pharmacy, business management, computer applications, and
ayurvedic streams. SVES is actively managed by Mr. G Samba Reddy
and his son, Dr. G Srinivasa Reddy. The Reddy family also has
interests in the hotel business and petrol-
filling stations.
SRI NANGALI: CRISIL Assigns 'B' Rating to INR220MM Cash Credit
--------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable' rating to the long-term
bank facilities of Sri Nangali Agro Tech Pvt Ltd (SNA).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 220 CRISIL B/Stable
The rating reflects SNA's below-average financial risk profile,
marked by high gearing and weak debt protection metrics, along
with stretched liquidity due to its working-capital-intensive
operations. These rating weaknesses are partially offset by the
long track record of the company's promoters in the wheat-
processing business, and its established relationships with
wholesalers and suppliers.
Outlook: Stable
CRISIL believes that SNA will continue to benefit over the medium
term from its promoters' extensive industry experience and its
established relationships with wholesalers and suppliers. The
company's financial risk profile, though, will remain below
average over this period due to its working-capital-intensive
operations. The outlook may be revised to 'Positive' if SNA's
financial risk profile, particularly its liquidity, improves, most
likely through better working capital management, higher
profitability, or equity infusion. Conversely, the outlook may be
revised to 'Negative' if the company's profitability declines or
its working capital requirements increase significantly, resulting
in deterioration in its financial risk profile.
SNA was incorporated in 1996, promoted by Mr. Vijay Kumar, Mr.
Satish Kumar, and Mr. Anil Kumar. The company manufactures wheat-
based products including flour, maida, and sooji, with a
processing capacity of 120 tonnes per day each. Its head office
and manufacturing facility are in Gurdaspur (Punjab).
SNA reported a profit after tax (PAT) of INR6.12 million on net
sales of INR380.24 million for 2013-14 (refers to financial year,
April 1 to March 31), as against a PAT of INR14.57 million on net
sales of INR593.91 million for 2012-13.
SUCCESS LAYER: CARE Assigns B+ Rating to INR7.59cr LT Bank Loan
---------------------------------------------------------------
CARE assigns 'CARE B+' rating to the bank facilities of Success
Layer Farm.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 7.59 CARE B+ Assigned
Rating Rationale
The rating assigned to the bank facilities of Success Layer Farm
(SLF) is primarily constrained by lack of partners' experience in
the poultry farming business, stabilization risk associated with
its debt-funded green field project, inherent risk associated with
the poultry industry as well as competitive nature of the
industry. The rating is further constrained by susceptibility of
margins to fluctuations in raw material prices and the
constitution of the entity as a partnership firm.
The rating, however, favorably takes into account the satisfactory
demand outlook for the firm's products. Going forward, the
ability of the firm to achieve the envisaged sales and
profitability levels would be the key rating sensitivities.
Success Layer Farm (SLF) is a partnership firm established in
February 2012 by Mr Parmod Kumar and Mrs Reeta Rani having equal
share in profit and loss. SLF is established with an aim to set up
and run a poultry farm at Jattal, Panipat at a total cost of
INR9.07 crore to be funded through a term loan and promoter
contribution of INR6.59 crore and INR2.48 crore (Rs.1.73 crore in
the form of capital and INR0.75 crore in the form of unsecured
loans) respectively. The farm has a proposed breeding capacity of
about 93,312 chickens per annum. The commercial operations of the
firm commenced in November 2014 with partial completion of the
farm and FY16 (refers to the period April 1 to March 31) will be
the first full year of operations for the whole farm. SLF sells
the eggs and culls to wholesalers and retailers located in Delhi
through a marketing channel of various brokers and agents.
Furthermore, the firm is procuring day old chicks domestically and
other food products for feeding the chicken viz maize, soyabean
and defatted rice bran are being procured from local markets.
SUNDARAM STEELS: CARE Reaffirms B+ Rating on INR10.51cr LT Loan
---------------------------------------------------------------
CARE reaffirms the ratings assigned to the bank facilities of
Sundaram Steels Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 10.51 CARE B+ Reaffirmed
Rating Rationale
The rating assigned to the bank facilities of Sundaram Steels
Private Limited (SSPL) continues to remain constrained by the
small scale and short track record of operations, exposure to raw
material price volatility, working capital-intensive nature of
operations and cyclicality associated with the steel industry.
The rating, however, continues to draw comfort from the
experienced promoters and moderate capital structure.
Going forward, the ability of the company to increase its scale of
operations while efficiently managing its working capital
requirements shall be the key rating sensitivities.
SSPL was incorporated in 2008 by Mr Yogesh Manek, Mr Anurag
Singhaia, Mr Shriyans Kumar Jain along with other family
members of Mr Shriyans Kumar Jain. The company is engaged in the
manufacturing of sponge iron, since April 2012. The manufacturing
facility of SSPL is located at Bokarao in Jharkhand with an
installed capacity of 27,000 tonne per annum (TPA) as on March 31,
2014. The company's products find application in the induction
furnace and the company sells its products directly to companies
in Uttar Pradesh and Jharkhand. The major raw materials for the
company are iron ore, coal and limestone.
For FY14, SSPL achieved a total operating income of INR47.74 crore
with a PAT of INR0.26 crore as against total operating income of
INR31.55 crore and PAT of INR0.16 crore for FY13. Till September
30, 2014, the company has achieved total operating income of INR23
crore.
SUNLEX CERAMIC: ICRA Reaffirms B+ Rating on INR4.40cr Term Loan
---------------------------------------------------------------
The rating of [ICRA]B+ has been reaffirmed to INR4.40 crore term
loans and Rs.2.50 crore fund based cash credit facility of Sunlex
Ceramic Private Limited. The rating of [ICRA]A4 has also been
reaffirmed to INR1.52 crore letter of credit facility (sublimit of
term loan) and Rs.0.50 crore bank guarantee facility of SCPL.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit Limit 2.50 [ICRA]B+;Reaffirmed
Term Loan 4.40 [ICRA]B+; Reaffirmed
Letter of Credit (1.52) [ICRA]A4; Reaffirmed
Bank Guarantee 0.50 [ICRA]A4; Reaffirmed
The ratings continue to remain constrained by Sunlex Ceramic
Private Limited's (SCPL) moderate scale of operations as well as
single product portfolio (wall 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 are also constrained by SCPL's weak financial profile
characterized by thin profitability, stretched liquidity,
leveraged capital structure and weak coverage indicators. The
ratings further takes into account the vulnerability of SCPL's
profitability and cash flows to the cyclicality inherent in the
real estate industry, which is the main consuming sector and
increasing prices of gas with gas being the major fuel. The
ratings take note of the highly competitive business environment
on account of presence of a large number of organized as well as
unorganized players in the region.
The ratings, however, favorably factor in the long experience of
the promoters in the ceramic industry, the location advantage
enjoyed by SCPL giving it easy access to raw material as well as
the presence in digital printed segment which is expected to
result in better sale realizations.
Sunlex Ceramic Pvt. Ltd. was originally incorporated as Lexso
Ceramic Pvt. Ltd. in the year 2009. It was then taken over by Mr.
Hitesh Detroja, Mr. Bharat Detroja and other family members in the
year 2011 and its name changed to Sunlex Ceramic Pvt Ltd. The
commercial operations were commenced in April 2010. The plant has
an installed capacity to produce 16,500 MTPA of wall tiles. SCPL
currently manufactures wall tiles of three different sizes 12' x
12', 12' x 18' and 12' x 24' with the current set of machineries
at its production facilities.
Recent Results
For the year ended 31st March, 2014, the company reported an
operating income of INR14.51 crore with profit after tax of
INR0.19 crore.
SURYA AGRO: CARE Revises Rating on INR7.52cr LT Bank Loan to B+
---------------------------------------------------------------
CARE revises and reaffirms rating assigned to the bank facilities
of Surya Agro Products Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 7.52 CARE B+ Revised from
CARE B
Short-term Bank Facility 1.50 CARE A4 Reaffirmed
Rating Rationale
The revision in the long term rating of Surya Agro Products
Private Limited (SAPPL) takes into cognizance improvement in
the scale of operation, moderate operating margin and operating
cycle. However, the ratings continue to be constrained by its
short track record of manufacturing operations, susceptibility of
profitability to government regulations, seasonal nature of
availability of wheat resulting in high working capital intensity
and exposure to the vagaries of nature and its presence in the
highly fragmented and competitive business.
The ratings, however, continues to draw comfort from the wide
experience of the promoters and satisfactory demand outlook.
Going forward, SAPPL's ability to further grow its scale of
operations with simultaneous improvement in profitability
margins and effective working capital management would be the key
rating sensitivities.
Surya Agro Products Private Limited (SAPPL), incorporated in July,
2009 by the Agarwal family based out of Birbhum, West Bengal for
setting up a wheat processing unit. It initially commenced with an
opportunity based trading in agro products like Rice bran, coconut
& rice bran de oiled cake, mustard cake, maize etc. Subsequently
in the year 2012, the company started setting up a 44,400 Metric
Tonne Per Annum (MTPA) wheat processing unit at Gopal Nagar in the
Birbhum district of West Bengal. The plant commenced commercial
production from June, 2013. The company sells its products through
the wholesalers and distributors under the brand name of 'Tulsi'
in the state of West Bengal.
In FY14 (refers to the period April 01 to March 31), the company
has reported a total operating income of INR31.77 crore and PAT
INR0.07 crore. Furthermore, as per the provisional H1FY15, the
company has maintained to have achieved a total operating income
of INR21.21 crore.
THANE STEELS: CRISIL Cuts Rating on INR110MM Cash Credit to B+
--------------------------------------------------------------
CRISIL has downgraded its ratings on the bank loan facilities of
Thane Steels Pvt Ltd (TSPL) to 'CRISIL B+/Stable/CRISIL A4' from
'CRISIL BB-/Stable/CRISIL A4+'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 11.1 CRISIL A4 (Downgraded from
'CRISIL A4+')
Cash Credit 110 CRISIL B+/Stable (Downgraded
from 'CRISIL BB-/Stable')
Letter of Credit 20 CRISIL A4 (Downgraded from
'CRISIL A4+')
Proposed Long Term 10.4 CRISIL B+/Stable (Downgraded
Bank Loan Facility from 'CRISIL BB-/Stable')
Term Loan 78.5 CRISIL B+/Stable (Downgraded
from 'CRISIL BB-/Stable')
The rating downgrade reflects CRISIL's belief that weakening of
financial risk profile over the medium term because of lower than
expected accruals leading to stretch in liquidity of the company.
TSPL's cash accruals of INR29 million for 2013-14 (refers to
financial year, April 1 to March 31) were lower than CRISIL's
expectations because of slow ramp-up of the company's ingot
capacity. Furthermore, because of moderation in demand from
customers, TSPL's revenue declined to INR1296 million for 2013-14
from INR1412 million a year earlier. TSPL's has moderate net
worth of INR48.6 million as on March 31, 2014 and high gearing of
more than 6.72 times as on that date (with unsecured loans of
INR85.3 million from promoters treated as neither debt nor
equity). CRISIL believes that TSPL's capital structure will remain
weak over the medium term and material equity infusion will remain
a rating sensitivity factor. TSPL's liquidity is stretched, marked
by high bank limit utilisation and accruals expected to be just
sufficient to meet debt obligations of INR25.5 million for 2014-
15. The promoters have supported the company's liquidity in the
past through unsecured loans; the extent and timeliness of funding
support from promoters will remain a rating sensitivity factor.
The ratings reflects TSPL's Weak financial risk profile,
constrained by modest net worth and a high gearing and Company's
susceptibility of operating margin to volatility in raw material
prices and to cyclicality in the construction activity. However,
these rating weaknesses are partially offset by promoter's
extensive experience in the steel manufacturing industry &
infusion of funds to ensure timely debt repayments and Improving
operating efficiencies supported by backward integration.
Outlook: Stable
CRISIL believes that TSPL will continue to benefit over the medium
term from its promoters' experience in the steel industry and its
semi-integrated operations marked by backward integration into
manufacturing of ingots. The outlook may be revised to 'Positive'
if the company's financial risk profile improves, led by material
equity infusion or large accretion to reserves. Conversely, the
outlook may be revised to 'Negative' in case of decline in cash
accruals or low promoter funding materially impacting the
company's liquidity.
TSPL was incorporated in 1996 by the Rajput and Garg families, who
are business associates. The company manufactures thermo-
mechanically treated (TMT) bars and has installed capacity of
60,000 tonnes per annum in Thane (Maharashtra). TSPL manufactures
TMT bars of various grades (Fe-415, Fe-500, Fe-550) and sizes (8
to 32 millimetre diameter) and integrated its operations backward
by commencing production of ingots in September 2013.
TSPL reported a profit after tax (PAT) of INR6.8 million on net
sales of INR1281.4 million for 2013-14, against a net loss of
INR0.10 million on net sales of INR1399.3 million for 2012-13.
UTTORAYON TEA: CRISIL Assigns 'B' Rating to INR32.5MM Term Loan
---------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable/CRISIL A4' ratings to the
bank facilities of Uttorayon Tea Industries Pvt Ltd (UTIPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Rupee Term Loan 32.5 CRISIL B/Stable
Proposed Term Loan 26.5 CRISIL B/Stable
Proposed Cash Credit
Limit 12.5 CRISIL B/Stable
Bank Guarantee 2 CRISIL A4
Cash Credit 12.5 CRISIL B/Stable
The ratings reflect UTIPL's modest scale of operations and
financial risk profile marked by modest net worth, high gearing
and average debt protection metrics. These rating weakness are
partially offset by UTIPL's promoter's extensive industry
experience in the tea industry.
Outlook: Stable
CRISIL believes that UTIPL will continue to benefit from its
promoters' extensive experience in the tea industry. The outlook
may be revised to 'Positive' if UTIPL stabilises its operations
post completion of phase two of the project without any time or
cost overrun. Conversely, the outlook may be revised to 'Negative'
in case it faces time and cost overrun in the ongoing capital
expenditure or its working capital management deteriorates leading
to weak financial risk profile.
UTIPL was incorporated in July 2012 in Siliguri. It manufactures
black CTC tea.
UTIPL reported a loss of INR1.4 million on net sales of INR5.5
million for 2013-14 (refers to financial year, April 1 to
March 31).
VAMA CONSTRUCTION: ICRA Rates INR3cr Overdraft Loan at 'B+'
-----------------------------------------------------------
ICRA has assigned a long-term rating of [ICRA]B+ to the INR4.50
crore fund based bank facilities of Vama Construction Co. ICRA has
also assigned a short-term rating of [ICRA]A4 to the INR2.00 crore
non fund based bank facility of the firm.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Fund Based 1.50 [ICRA]B+ Assigned
Limit-Term Loan
Long Term Fund Based
Limit-Overdraft 3.00 [ICRA]B+ Assigned
Short Term Fund Based 2.00 [ICRA]A4 Assigned
Limit-Bank Guarantee
The assigned ratings are constrained by the small scale of
operations of the firm with exposure to sectoral and geographical
concentration risks, since majority of its turnover is contributed
by construction of protection walls and its activities are
restricted in Gujarat, particularly in Valsad district. The
ratings also factor in the firm's exposure to project
concentration risks, given that ~50% of its unexecuted order book
as on September 30, 2014, was attributable to a single order. ICRA
also notes the weak financial profile of the firm as evident from
stretched liquidity which has resulted in extended payables and a
high gearing of 2.66 times as on March 31, 2014. Further, Vama
Construction Co. is a proprietorship firm; any substantial
withdrawals from the capital account could impact the net worth
and thereby the gearing levels of the firm.
The ratings, however, favourably factor in the healthy unexecuted
order book position of INR61.82 crore (Almost 5 times the
operating income in 2013-14) as on September 30, 2014, which
provides revenue visibility in the near term. The ratings also
positively consider the experience of the management in the
construction industry and the firm's adequate asset base, with
wholly owned equipment and machinery, and owned quarries, which
ensures good control over operations and healthy operating margins
over the years due to reduced hire charges for machinery.
Vama Construction Co. (VCC) is a proprietorship firm based in
Valsad (Gujarat) and is engaged in the construction of protection
walls (sea walls), check dam, road and other civil work. The firm
is a 'Class A' contractor with the Government of Gujarat and is
also involved in sub-contractor work for other companies.
Recent results
VCC recorded a net profit of INR0.62 crore on an operating income
of INR12.53 crore for the year ending March 31, 2014.
VIRAJ POLYPLAST: CRISIL Cuts Rating on INR76.3MM Bank Loan to D
---------------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facilities
of Viraj Polyplast Technologies Pvt Ltd (VPTPL) to 'CRISIL D' from
'CRISIL B/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 30 CRISIL D (Downgraded from
'CRISIL B/Stable')
Proposed Long Term 76.3 CRISIL D (Downgraded from
Bank Loan Facility 'CRISIL B/Stable')
Term Loan 43.7 CRISIL D (Downgraded from
'CRISIL B/Stable')
The rating downgrade reflects instances of delay by VPTPL in
meeting its term debt obligations, along with continuously
overdrawn working capital bank limits, because of delays in the
realisation of receivables.
VPTPL also has a modest scale of operations in the highly
fragmented plastic moulding industry along with large working
capital requirements. The company, however, benefits from the
promoter's extensive experience in manufacturing polyvinyl
chloride (PVC) moulds and pipe fittings and established
relationships with customers and suppliers.
Set up in Goregaon (Mumbai) in 2004, VPTPL manufactures precast
PVC moulds to produce concrete tiles and pavers. The company also
manufactures gaskets rings used in PVC pipe fittings, and plastic
mats, primarily used in cars and other light motor vehicles. Mr.
Darpan Shah, the promoter, manages the company's daily operations.
VPTPL reported profit after tax (PAT) of INR13.1 million on net
sales of INR163 million for 2012-13 (refers to financial year,
April 1 to March 31) as against PAT of INR11.9 million on net
sales of INR152 million for 2011-12.
=================
I N D O N E S I A
=================
BUMI INVESTMENT: Chapter 15 Case Summary
----------------------------------------
Chapter 15 Petitioner: Andrew Christopher Beckham
Debtor affiliates that filed for Chapter 15 bankruptcy petitions:
Debtor Case No.
------ --------
Bumi Investment Pte Ltd 14-13296
10 Anson Road, #03-05
International Plaza 079903
Singapore
Bumi Capital Pte Ltd 14-13297
Enercoal Resources Pte Ltd 14-13298
Type of Business: Bumi Resources is in the business of mining
and export of thermal coal.
Chapter 15 Petition Date: December 1, 2014
Court: United States Bankruptcy Court
Southern District of New York (Manhattan)
Judge: Hon. Robert E. Gerber
Chapter 15 Petitioner's Kenneth R. Puhala, Esq.
Counsel: SCHNADER HARRISON SEGAL & LEWIS LLP
140 Broadway, Suite 3100
New York, NY 10005
Tel: (212) 973-8140
Fax: (212) 972-8798
Email: kpuhala@schnader.com
Estimated Assets: $500 million to $1 billion
Estimated Debts: $500 million to $1 billion
===============
M A L A Y S I A
===============
MALAYSIA AIRLINES: Jentayu Danaraksa Interested in Eng'g Division
-----------------------------------------------------------------
Bernama reports that Jentayu Danaraksa Sdn Bhd was interested to
take over the airline's engineering division and Firefly and
flight leasing company Penerbangan Malaysia Bhd which is owned by
the Ministry of Finance.
Bernama relates that the company, linked to MAS former managing
director and chief executive officer, Tan Sri Abdul Aziz Abdul
Rahman, proposed to establish a flight leasing company and budget
airline while at the same time enlarging the maintenance, repair
and overhaul business significantly.
The company said it has the financial backup from private
investors and the backing of the airline employees unions and was
capable of salvaging the 6,000 jobs that would be reduced under
the new plan, Bernama reports.
* * *
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.
In March, Malaysia Airlines Flight 370 veered far off course while
en route from Kuala Lumpur to Beijing, and went missing 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.
===============
T H A I L A N D
===============
TRUE MOVE: Moody's Withdraws B2 Corporate Family Rating
-------------------------------------------------------
Moody's Investors Service has withdrawn True Move Company
Limited's B2 corporate family rating with a stable outlook.
Ratings Rationale
Moody's has withdrawn the rating for its own business reasons.
Headquartered in Bangkok, True Move is a consolidated subsidiary
of True Corporation Public Company Limited (B2 stable). True Corp
holds a 99.4% share in True Move. True Move provides 2G services
in True Corp's mobile group.
*********
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 ***