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T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Monday, February 2, 2015, Vol. 18, No. 022
Headlines
A U S T R A L I A
ATLAS IRON: Moody's Downgrades CFR & Sr. Secured Rating to Caa1
ATLAS IRON: S&P Lowers CCR to 'B-'; Outlook Stable
BCI FINANCES: ATO Tries to Freeze Nudie Sale Proceeds
COMPTON VISTA: First Creditors Meeting Set For Feb. 9
MCO ELECTRICAL: First Creditors Meeting Slated For Feb. 9
C H I N A
KAISA GROUP: Shenzhen City Backs Sunac's Bid For stake
I N D I A
A S P PVT: CRISIL Reaffirms B+ Rating on INR115MM Cash Loan
ABAJ FOODS: CRISIL Assigns B Rating to INR85MM Cash Loan
ADVANCE CABLE: ICRA Reaffirms B+ Rating on INR5cr Cash Credit
AMIRA NATURE: S&P Assigns Preliminary 'B' CCR; Outlook Stable
CHAMPION GROUP: CRISIL Assigns B Rating to INR70MM Cash Loan
DADA MOTORS: CRISIL Cuts Rating on INR270MM Cash Loan to B
DUNAR FOODS: CRISIL Cuts Rating on INR2.15BB Cash Loan to D
GANPATI HIGHTECH: CRISIL Suspends D Rating on INR80MM Cash Loan
GARG RICE: ICRA Suspends B Rating on INR13cr ST Loan
GHAI CONSTRUCTIONS: CRISIL Suspends B+ Rating on INR100MM Loan
GLOBAL STEEL: CRISIL Assigns B- Rating to INR100MM Overdraft Loan
GOLCHHA ENTERPRISES: CRISIL Ups Rating on INR25MM Cash Loan to B+
GOODEARTH MINCHEM: CRISIL Puts B+ Rating on INR50MM Cash Loan
HANUMAN DAL: ICRA Suspends B+ Rating on INR10.30cr LT Loan
HANUMAN RICE: ICRA Suspends B+ Rating on INR9cr LT Loan
JAY PARVATI: ICRA Assigns B Rating to INR3.79cr Term Loan
KAILAS CERAMICS: CRISIL Reaffirms B Rating on INR20MM Cash Loan
LANCER LASER: CRISIL Reaffirms B- Rating on INR55MM Term Loan
LV ENTERPRISES: ICRA Reaffirms B+ Rating on INR6.46cr Term Loan
M N POLYTEX: CRISIL Reaffirms B Rating on INR75MM Cash Credit
MITTAL LUMBER: ICRA Reaffirms B Rating on INR2.25cr FB Loan
MUKTSAR COTTON: ICRA Reaffirms B Rating on INR10cr LT Loan
NANU RAM: ICRA Reaffirms B+ Rating on INR6cr Fund Based Loan
NARULA EXPORTS: ICRA Assigns B+ Rating to INR1.0cr FB Loan
NORTH WESTERN: ICRA Withdraws 'C' Rating on INR100cr Term Loan
OPS JEWELLS: CRISIL Reaffirms B+ Rating on INR150MM Cash Loan
P.T. SREENIVASAN: CRISIL Places B Rating on INR25MM Cash Credit
PAGRO FROZEN: ICRA Upgrades Rating on INR20cr Term Loan to B-
PATEL RAVJI: CRISIL Assigns B Rating to INR30MM Bank Loan
PERODY BUILDERS: ICRA Assigns B+ Rating to INR5cr LT Loan
R.K. BEHURIA: CRISIL Cuts Rating on INR95MM Packing Credit to D
RADHA MADHAV: CRISIL Rates INR500MM Term Loan at B+
RATTAN LAL: CRISIL Assigns D Rating to INR195MM Term Loan
SABITRI INDUSTRIES: CRISIL Reaffirms B Rating on INR345MM Loan
SANT RAM: ICRA Reaffirms B Rating on INR5cr LT Fund Based Loan
SARTHAK ISPAT: ICRA Suspends B Rating on INR12.50cr Term Loan
SHANKAR RICE: ICRA Upgrades Rating on INR9.5cr Loan to B+
SHIV COTTON: ICRA Reaffirms B Rating on INR5cr Cash Credit
SHREE AVADHBIHARI: CRISIL Assigns B Rating to INR65MM Term Loan
SHREE GOVARDHAN: CRISIL Reaffirms B+ Rating on INR475MM Loan
SHREE RAMESHWAR: CRISIL Reaffirms B Rating on INR40MM Cash Loan
SKYMAX CERAMIC: CRISIL Assigns B+ Rating to INR33.2MM Bank Loan
SPICEJET LTD: Sun Group Chief Maran Resigns From Board
SREE GOPAL: ICRA Suspends B+ Rating on INR5cr Cash Credit
TATA MOTORS: Fitch Affirms 'BB' IDR; Outlook Stable
TCL CABLES: ICRA Suspends B+ Rating on INR10cr Fund Based Loan
TURTLE LTD: CRISIL Suspends B+ Rating on INR400MM Cash Loan
UDASEE STAMPINGS: CRISIL Ups Rating on INR72.5MM Loan to B-
ULTIMATE FASHION: CRISIL Reaffirms B+ Rating on INR15MM Bank Loan
I N D O N E S I A
MEDCO ENERGI: Moody's Withdraws B2 Corporate Family Rating
J A P A N
COSMO OIL: Moody's Withdraws Ba2 Issuer Rating
S I N G A P O R E
MMI INTERNATIONAL: Fitch Affirms BB- IDR; Revises Outlook to Neg.
S O U T H K O R E A
HYUNDAI GROUP: Orix Picked as Preferred Buyer of Securities Unit
SK HYNIX: Strong 2014 Results in Line with Moody's Ba1 Rating
T A I W A N
JIH SUN: Fitch Publishes LT Rating on TWD2.5BB Bonds at BBB(twn)
- - - - -
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A U S T R A L I A
=================
ATLAS IRON: Moody's Downgrades CFR & Sr. Secured Rating to Caa1
---------------------------------------------------------------
Moody's Investors Service has downgraded Atlas Iron Limited's
(Atlas) corporate family and senior secured ratings to Caa1 from
B3. The outlook on the ratings is stable.
Ratings Rationale
"The ratings downgrade reflects Moody's expectation that iron ore
fundamentals will remain very weak this year, and possibly into
2016. Given the further deterioration in the iron ore price,
Moody's see negative pressure building on Atlas' cashflow
generating ability and a depletion in its solid liquidity
position", says Saranga Ranasinghe - Moody's Analyst.
With a slowing growth rate in global steel-production, coupled
with recent expansion in the global iron ore capacity, iron ore
prices remain vulnerable to the downside and Moody's expect
continued volatility. As a result, Moody's have revised Moody's
price sensitivity for iron ore for the period through 2016 to
USD65/t -- USD70/t (62% Fe).
Moody's acknowledges the amount of cash hand ( AUD 169 million of
cash on hand at 31 December 2014), and which is behind the stable
outlook on the rating. However, the current iron ore price level
is exerting significant pressure on the company's ability to
produce positive returns. Moody's expect the company to utilize
its cash on hand to fund its operations, thereby depleting its
solid liquidity position.
"Moody's acknowledges the cost rationalization initiatives taken
by Atlas as well as the benefit from the lower AUD compared to the
USD, lower freight rates and the benefit from lower fuel prices",
Ranasinghe says, adding "however, the weakness in the operating
environment means that it is more challenging for Atlas to
maintain a credit profile that is consistent with its previous B3
rating".
With the current weakness in the iron ore price and its impact on
cash flow and earnings, Moody's expect financial leverage as
measured by Debt/EBITDA to increase in FY15. If the weakness in
iron ore prices continues, Moody's expect Atlas to exceed the
tolerance level set for the previous rating, including Debt/
EBITDA exceeding 7.0x in fiscal year ending 30 June 2015 (FY15).
The rating and/or outlook could face further negative pressure if
fundamentals for iron ore continue to deteriorate and beyond
Moody's expectations. The rating and/or outlook could also face
negative pressure if the liquidity buffer diminishes at a pace
that is not consistent with Moody's expectations, hindering the
company's ability to cover debt service obligations. The rating
could also be downgraded if there is an inability to maintain
debt-to EBITDA below 7.0x on a consistent basis.
The rating could be upgraded if there is a marked and sustained
improvement in iron ore prices leading to an improvement in
margins. Specifically, Moody's would look to leverage improving to
around 5.0x-5.5x on an ongoing basis.
The principal methodology used in this rating was Global Mining
Industry published in August 2014.
Atlas Iron Limited (Atlas), headquartered in Perth, Australia, is
an iron ore producer and developer focused on the North Pilbara
region of Western Australia. In FY14, Atlas shipped 10.9Mt of iron
ore and generated revenues of around $1.1 billion.
ATLAS IRON: S&P Lowers CCR to 'B-'; Outlook Stable
--------------------------------------------------
Standard & Poor's Ratings Services said that it had lowered its
corporate credit rating on Australian iron ore miner Atlas Iron
Ltd. and the company's senior secured debt to 'B-', from 'B'. The
outlook is stable. The recovery rating on the senior secured debt
issued by its subsidiary Atlas America Finance Inc. is affirmed at
'3'.
"The downgrade reflects our concerns that a sustained period of
low iron ore prices could weaken Atlas Iron's liquidity position
as we expect the company to generate minimal earnings and negative
free operating cash flows," said Standard & Poor's credit analyst
May Zhong.
"Under our base-case price assumption for benchmark iron ore
prices (Platts 62% iron [Fe] content including cost and freight
[CFR] to China) of US$65 per dry metric ton for the rest of
calendar year 2015 and 2016, we estimate that the company's EBITDA
is likely to be break-even in the year ending June 30, 2015 and
slightly positive in fiscal 2016. As a result, the company would
have to draw down its cash holding (A$169 million at Dec. 31,
2014) to fund its interest payment, working capital, and capital
expenditure. However, we also recognize that Atlas Iron's
earnings and cash flows are very sensitive to movement in key cost
inputs like C1 costs, freight, and the Australian to U.S. dollar
exchange rate. If the above variables move in the company's
favor, Atlas Iron's earnings would exceed our base-case assumption
and shield the company to some extent from the impact of lower
iron ore prices," S&P added.
"Our assessment of Atlas Iron's "weak" business risk profile
reflects its relatively small scale globally, relatively high
production cost, and exposure to volatile iron ore prices.
Although Atlas Iron has made good progress in reducing its C1 cost
to A$43 (about US$37) per wet metric ton (wmt) in the December
quarter, from A$51 in fiscal 2014, in our opinion, it remains
relatively high compared to the top-three iron ore miners in
Australia, whose C1 costs are lower than US$30 per ton. This is
partly driven by the company's relatively small scale and the high
cost of using trucks to transport all of its iron ore to port,
which offsets its relatively low mining costs," S&P noted.
A structural improvement in Atlas Iron's cost profile is therefore
key to its long-term viability. S&P believes the company is
working on initiatives to reduce its costs. S&P estimates that
its all-in cash costs (including C1 cash cost, royalties, freight,
administrative expenses, sustaining capital expenditure, and
converting them to a CFR China 62% basis) is likely to be about
US$60-US$65 per ton (assuming an exchange rate of A$1 to US$0.80)
in fiscal 2016. This leaves the company with little buffer for a
further fall in iron ore prices.
Atlas Iron's "highly leveraged" financial risk profile reflects
its high sensitivity to iron ore price volatility and S&P's
expectation of weak cash flow protection metrics due to lower iron
ore prices. S&P forecasts its EBITDA interest coverage will
reduce substantially, to less than 1x in fiscal 2015, from 7.6x in
fiscal 2014, due to a material fall in EBITDA.
Ms. Zhong added: "The stable outlook reflects our expectation that
Atlas Iron will maintain adequate liquidity for its operations,
which is underpinned by the company's large cash holding, minimal
debt refinancing requirement in the near term, and reduction in
capital expenditure."
S&P could lower the ratings if Atlas Iron's cash holding were to
deteriorate rapidly should iron prices continue to fall or if
there is an unforeseen operational issue in its mines. If Atlas
Iron's earnings profile remains weak for a prolonged period, it
could make it more difficult for the company to refinance its Term
Loan B due in December 2017.
An upgrade is less likely unless there is a sustained improvement
in Atlas Iron's earnings and the company proactively manages its
refinancing risk in 2017.
BCI FINANCES: ATO Tries to Freeze Nudie Sale Proceeds
-----------------------------------------------------
Meredith Booth at The Australian reports that the Australian
Taxation Office has made a last-minute attempt to freeze more than
AUD80 million in proceeds expected from the sale of Nudie Juice to
Philippines-based company Monde Nissin.
The Australian relates that in an urgent Federal Court application
heard on Jan. 29, lawyers for the liquidator of BCI Finances,
funding vehicle for Nudie Juice owned by the Binetter family,
sought an immediate freeze on proceeds after the discovery that
the sale would be signed off Jan. 30.
According to the report, Andrew Tokley SC, for BCI Finances, which
has the ATO as a major creditor, said there was concern third
parties related to the Nudie group of companies had been selling
down assets.
"We're concerned that over the last eight months and particularly
over the last four months there's been a number of disposals of
properties in which the respondents have interests which exceed
AUD150 million," the report quotes Mr. Tokley as saying.
"We understand completion date of the sale of the Nudie Group is
tomorrow. We've only just become aware of this."
He said liquidators did not want to prevent the sale from going
ahead but needed to preserve proceeds so that "in some point in
time" they could take "further steps" to recoup money, The
Australian relays.
"The long and the short of it is the principal company is 96 per
cent-owned by one of the respondents and we can certainly track
the entitlements of the company by the sale of the Nudie
business," Mr. Tokley said. "What we don't know is the attitude of
the respondents to these orders."
However, judge Anthony Besanko, in Adelaide on Jan. 29, adjourned
the application for 24 hours to give him and lawyers for eight
respondents, some of whom had received orders only hours before
the hearing, time to consider documents, according to the report.
BCI Finances was targeted in the long-running Operation Wickenby
investigation in which the ATO has claims for more than AUD26
million from Binetter companies.
The ATO is asking to reverse a multi-million-dollar victory for
the Binetter family and has accused witnesses, including Nudie's
late founder Emil Binetter and his son Andrew, of giving false
evidence by denying that loans from an Israeli bank were backed by
any security other than a personal guarantee, The Australian
notes. Court documents point to the loans being backed by funds
held by the Binetter family in an account at Bank Hapoalim's Swiss
subsidiary.
The practice of disguising drawdowns on overseas funds by using
"back-to-back" loans is at the centre of a US investigation into
Israeli banks, the report says.
Hopes to freeze proceeds follow a Federal Court order this month
that places an international travel ban on Andrew Binetter by
seizing his passport, adds The Australian.
COMPTON VISTA: First Creditors Meeting Set For Feb. 9
-----------------------------------------------------
David John Kerr and Peter William Marsden of RSM Bird Cameron were
appointed as administrators of Compton Vista Business Park Pty Ltd
on Jan. 28, 2015.
A first meeting of the creditors of the Company will be held at
RSM Bird Cameron, Level 2, 370 Queen Street, in Brisbane, on
Feb. 9, 2015, at 11:00 a.m.
MCO ELECTRICAL: First Creditors Meeting Slated For Feb. 9
---------------------------------------------------------
Michael Joseph Brennan of Offermans Partners was appointed as
administrators of MCO Electrical Pty Ltd on Jan. 28, 2015.
A first meeting of the creditors of the Company will be held at
Offermans Partners, Level 9, 61-73 Sturt Street, in Townsville,
Queensland, on Feb. 9, 2015, at 11:00 a.m.
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C H I N A
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KAISA GROUP: Shenzhen City Backs Sunac's Bid For stake
------------------------------------------------------
The South China Morning Post reports that Shenzhen's city
government has backed Sunac China buying a stake in troubled
property developer Kaisa Group, a source said.
Officials had given initial support to Sunac to acquire the
founding Kwok family's stake, the source said, adding that city
officials had met former Kaisa chairman Kwok Ying-shing in
Hong Kong several times since he resigned on December 31, the
report relates.
According to SCMP, Caixin reported on Jan. 30 that Sunac had
signed an agreement to buy a 49.3 per cent stake in Kaisa from the
Kwok family. An acquisition of that size would imply a total
consideration of up to HK$5.2 billion, based on a premium of as
much as 30 per cent to Kaisa's last-quoted share price, the report
relates citing Citigroup estimates.
The Shenzhen government is seeking investors for Kaisa after it
missed a bond payment due on January 8, the report says. Kaisa
would become the first mainland developer to default on a US
dollar bond if it does not pay the missed US$23 million coupon
when a 30-day grace period expires, SCMP notes.
An acquisition by Sunac "will be absolutely good news for Kaisa's
creditors because that means the white knight has appeared", said
Johnson Hu, a Hong Kong-based property analyst at CIMB Securities
Research, according to SCMP.
"For Sunac, the market needs to see more specific details as there
are still many uncertainties" regarding apartments blocked from
being sold, the acquisition price and bank debts, Mr. Hu, as cited
by SCMP, said.
SCMP notes that Kaisa's troubles first surfaced in December when
local authorities restricted sales of some of its properties,
prompting concern among investors of political risks associated
with mainland developers. Kaisa is being investigated over
alleged links to a senior official in Shenzhen, sources said this
month, the report adds.
About Kaisa Group
China-based Kaisa Group Holdings Ltd. (HKG:1638) --
http://www.kaisagroup.com/english/-- is an investment holding
company, and its subsidiaries are engaged in property development,
property investment and property management.
As reported in the Troubled Company Reporter-Asia Pacific on
Jan. 7, 2015, Standard & Poor's Ratings Services said that it had
lowered its long-term corporate credit rating on China-based real
estate developer Kaisa Group Holdings Ltd. to 'SD' from 'BB-'. At
the same time, S&P lowered its long-term Greater China regional
scale rating on Kaisa to 'SD' from 'cnBB+'. S&P also lowered its
issue rating on the company's senior unsecured notes to 'CC' from
'BB-' and the Greater China regional scale rating to 'cnCC' from
'cnBB+'. S&P removed all the ratings from CreditWatch, where they
were placed with negative implications on Dec. 23, 2014.
"We downgraded Kaisa because the company has defaulted on a
Hong Kong dollar (HK$) 400 million offshore term loan," said
Standard & Poor's credit analyst Dennis Lee. "This is an event of
default and could cause an acceleration of debt repayment on all
its other debt. Kaisa's other debt instruments have cross-default
clauses."
The missed repayment on the loan puts Kaisa in "selective default"
as the company has not yet defaulted on its other debt
obligations. The company failed to repay its HK$400 million
offshore loan from HSBC on Dec. 31, 2014, when the resignation of
Kaisa's chairman, Mr. Kwok Ying Shing, triggered a mandatory
repayment.
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I N D I A
=========
A S P PVT: CRISIL Reaffirms B+ Rating on INR115MM Cash Loan
-----------------------------------------------------------
CRISIL's ratings on the bank facilities of A S P Pvt Ltd (ASPL)
continue to reflect the company's modest scale of operations in
the fragmented fasteners industry and its modest financial risk
profile, marked by weak interest coverage ratio and modest net
worth.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 40 CRISIL A4 (Reaffirmed)
Cash Credit 115 CRISIL B+/Stable (Reaffirmed)
Letter of Credit 35 CRISIL A4 (Reaffirmed)
Proposed Long Term
Bank Loan Facility 34.7 CRISIL B+/Stable (Reaffirmed)
Term Loan 15.3 CRISIL B+/Stable (Reaffirmed)
These rating weaknesses are partially offset by the extensive
experience of ASPL's promoters in the fasteners industry and their
established relationships with clients.
Outlook: Stable
CRISIL believes that ASPL will continue to benefit over the medium
term from its promoters' extensive industry experience and their
established relationships with clients. The outlook may be revised
to 'Positive' if ASPL's revenue and profitability increase
significantly, thus improving its financial risk profile,
particularly liquidity and interest coverage ratio. Conversely,
the outlook may be revised to 'Negative' if the company faces
significant decline in its revenue or profitability, or there is
stretch in realisation of receivables, or if it undertakes a large
debt-funded capital expenditure programme, resulting in
deterioration in its financial risk profile, particularly
liquidity.
ASPL was incorporated in 1961 as Associated Steel Products
Corporation Pvt Ltd; the name was changed in 1995, when the
company was acquired by its current promoters, Mr. Vinod Kumar
Sharma and Mr. Arun Kumar Sharma. ASPL has its facility in Howrah
(West Bengal). The company manufactures hot-dipped galvanised
fasteners used in transmission line towers. Its product profile
includes nuts, bolts, washers, screws, and rivets.
ABAJ FOODS: CRISIL Assigns B Rating to INR85MM Cash Loan
--------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable/CRISIL A4' ratings to the
bank facilities of Abaj Foods Pvt Ltd (AFPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Term Loan 82 CRISIL B/Stable
Bank Guarantee 14 CRISIL A4
Cash Credit 85 CRISIL B/Stable
The ratings reflect AFPL's start-up phase and expected modest
scale of operations in the highly competitive agricultural
commodities industry. The ratings also factor in the company's
large expected working capital requirements. These rating
weaknesses are partially offset by the extensive industry
experience of the company's promoters and their sound
relationships with suppliers.
Outlook: Stable
CRISIL believes that AFPL will continue to benefit over the medium
term from its promoters' extensive industry experience. The
outlook may be revised to 'Positive' in case of early
stabilisation of the company's operations, leading to substantial
cash accruals and hence to an improvement in its financial risk
profile. Conversely, the outlook may be revised to 'Negative' if
AFPL's financial risk profile weakens, driven most likely by
significantly low cash accruals, substantial working capital
requirements, or debt-funded capital expenditure.
AFPL was established in Sanand (Gujarat) in 2013 by Mr. Mahavir
Avaghela and family. The company is setting up a unit for
processing and milling rice and wheat; it is likely to begin
commercial operations in July 2015.
ADVANCE CABLE: ICRA Reaffirms B+ Rating on INR5cr Cash Credit
-------------------------------------------------------------
ICRA has reaffirmed the long-term rating of [ICRA]B+ to the fund
based facilities and short term rating of [ICRA]A4 to the non-fund
based facilities of Advance Cable Technologies Private Limited
(ACTPL) aggregating to INR21.0 crore.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based-Cash
Credit 5.00 [ICRA]B+ reaffirmed
Non-Fund Based-
Letter of Credit 12.00 [ICRA]A4 reaffirmed
Non-Fund Based-
Bank Guarantee 4.00 [ICRA]A4 reaffirmed
The reaffirmation of ratings derives comfort from more than four
decades of experience of management and reputed private and public
sector clientele lending stability to volumes. The ratings draw
comfort from strong growth expected by FY15 end, current sales and
pending orders gives visibility for ~50% of growth in OI. However
rating is constrained by moderate size of the company and presence
of the company in a very competitive segment, which is highly
fragmented and unorganized thereby resulting in stiff competition.
The rating is also constrained by stretched liquidity position on
account of elongated operating cycle as reflected by high working
capital intensity. The rating also considers the limited value
addition of the operations and the business is easy to replicate
and hence are exposed to competitive pressures which may lead to
erosion in margins. ICRA also notes high dependence on private
parties in capital goods & power business where market conditions
largely determine the order flow; demand risk may be considered
moderately high and financial risk profile characterized by low
profitability and weak coverage ratios.
Advance Cable Technologies Private Limited was incorporated on
16th October 2002 as a private limited company. The Company is
engaged in manufacturing of Special Cable & Sophisticated Cables
for Telecommunication, Power & Single Control. It manufactures
cables for applications like power and control, instrumentation,
signal transmission, telecommunication, fire alarm, fire-survival,
high temperature and custom designed cords and cables. The cables
produced by the Company meets National Standards such as like
IS:1554, IS:694, IS:7098, BSNL's TEC GRs, JSS and various
International standards like BS, ISO, DIN VDE, IEC, ANSI, UL, NES,
MIL, JASO, ASTM etc.
AMIRA NATURE: S&P Assigns Preliminary 'B' CCR; Outlook Stable
-------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary 'B'
long-term corporate credit rating to India-based specialty rice
producer Amira. The outlook is stable.
At the same time, S&P assigned a preliminary 'B-' issue rating to
the proposed $225 million senior secured second-lien notes to be
issued by Amira Nature Foods Ltd. (Mauritius) and Amira I Grand
Foods Inc.
The final ratings and credit metrics will be subject to the
successful closing of the transaction under terms similar to those
currently indicated, and will depend on S&P's receipt and
satisfactory review of all final transaction documentation.
Accordingly, the preliminary ratings should not be construed as
evidence of the final ratings. If the terms and conditions of the
final transaction depart from the material S&P has already
reviewed, including the terms under the company's shareholder
loans, or if the transaction does not close within what S&P
considers to be a reasonable timeframe, S&P reserves the right to
withdraw or revise its ratings.
Amira is a leading provider of branded packaged Indian specialty
rice with sales in over 60 countries, including both emerging and
developed markets. The company purchases basmati paddy from
farmers through government-regulated agricultural produce markets
or through licensed procurement agents and then processes it.
The preliminary rating on Amira reflects S&P's assessments of the
company's business risk profile as "weak" and financial risk
profile as "aggressive." The combination of these assessments
leads to an anchor of 'b+' on Amira. S&P's comparable ratings
analysis lowers the anchor by one notch due to the company's
relatively modest size, substantial concentration risk, and the
lack of positive free operating cash flow projected over the next
two years, due to working capital outflow.
S&P's business risk profile assessment is primarily constrained by
Amira's presence in the agribusiness industry, which S&P views in
general as volatile in nature, and exposed to both the risk of
restrictive trade policies and the unpredictability of weather
patterns. Amira focuses on basmati rice (accounting for 65% of
its revenue), which is grown only in certain regions of the Indian
subcontinent. The basmati rice industry is cyclical and is
dependent on the results of the paddy harvest, which occurs for
only seven months of the year (September to March). The wholesale
price of basmati rice is affected by factors including weather;
government policies, such as changes in minimum support and export
prices; prices of other staples; seasonal cycles; pest and disease
problems; and the balance of demand and supply.
The commodity nature of the product makes the rice industry highly
fragmented, marked by numerous organized as well as unorganized
players. With revenues of about $547.3 million in 2014, Amira
holds a relatively small market share in the global rice industry,
which is estimated to be worth about $275 billion. In Amira's
domestic market of India it also competes with other large
domestic players, while on the international markets it has a
leading position but other producers such as KRBL Ltd., Tilda, and
LT FOODS Ltd. are not far behind.
S&P's business risk assessment is also constrained by the
company's high sourcing and production concentration. As Amira
focuses on basmati rice, which is grown mainly in the Indian
subcontinent, it sources its entire paddy (the unfinished state of
rice) for processing from the northern part of India.
Furthermore, the company has only one processing facility, which
is located in India, signifying the high production concentration,
which will remain undiluted, as its newly built plant will also be
located in India.
S&P views the basmati rice processing industry as working capital-
intensive due to the unique feature of basmati rice--its quality
is perceived to improve with age. As such, basmati rice must be
aged for approximately 10-12 months before it reaches premium
quality. Accordingly, Amira needs to maintain a sufficient stock
of basmati paddy and rice at all times to meet processing
requirements, which leads to higher inventory holding costs and
increased working capital needs. Furthermore, Amira's business
has inherent seasonality wherein the revenue is typically higher
from October through March than from April through September.
Effective management of working capital remains crucial from a
credit perspective, due to the longer operating cycle caused by
the elongated collection and inventory holding period.
S&P views positively Amira's EBITDA margin, which S&P estimates
will remain at about 13%-14% for the next 12-18 months, and which
compares well with other agribusiness companies. Amira's above-
average margin for the agribusiness industry stems from its focus
on premium long-grain basmati rice, which generally commands a
higher price than other varieties.
Moreover, the outlook for demand for the industry remains healthy,
with increasing domestic consumption and export demand of basmati
rice, given India's dominant position in the global basmati rice
industry. The Indian government is unlikely to impose any export
restrictions in the near future with the forecast of near record
production and "more-than-sufficient" government-held rice stocks.
Further support stems from Amira's geographic diversity--with
segments in the U.S., Europe, and Asia Pacific--and market
positioning as key strengths for the company. In S&P's view, the
company's geographic diversity would enable it to withstand the
negative impact of a potential trading restriction in one country.
In addition, the logistics of its operations--including the recent
geographic expansion--is an additional strength. S&P's business
risk assessment also incorporates its view of the agribusiness
industry risk as "intermediate" and Amira's country risk as
"moderately high," given the company's focus on emerging
countries.
S&P's assessment of Amira's financial risk profile is underpinned
by S&P's expectation that the company's adjusted FFO to debt will
remain at about 13% on average over the next three years, while
FFO cash interest coverage will stay at about 2.5x enabling the
company to comfortably service its fixed-charge obligations.
These relatively robust debt protection metrics are partially
mitigated by high working capital requirements, driven by the need
to maintain high inventory levels that lead to projected negative
cash flow from operations over the next three years, under S&P's
base-case scenario.
Amira expects to use the bond proceeds to purchase land from Amira
Enterprises where it plans to build a new processing facility in
the next few quarters. Furthermore, the proceeds would also be
used to partially repay existing bank debt.
S&P's base case assumes:
-- Revenue growth of around 18%-20% driven by international
operations and domestic operations, mainly driven by a mix
of volume and price.
-- EBITDA margins are expected to be in the range of 13%-14%.
-- Negative working capital movement reflecting the company's
high working capital requirements and our forecast of high
topline growth.
-- No transformational acquisitions in the near future;
however, S&P has assumed small bolt-on acquisitions of
about $5 million per year.
-- Fairly stable capital expenditure at 0.5%-1.0% of revenue
apart from the $65 million to be spent on the new factory
in Haryana.
Based on these assumptions, S&P arrives at these credit measures:
-- Adjusted FFO to debt of about 13% and a FFO-cash-interest-
coverage ratio of well above 2.0x over the next 12- 18
months.
-- Negative free cash flow generation over the next 12-18
months.
S&P's preliminary 'B-' issue rating on the proposed $225 million
senior secured second-lien notes to be issued by Amira Nature
Foods Ltd. (Mauritius) and Amira I Grand Foods Inc is one notch
below the corporate credit rating, reflecting S&P's opinion that
debt issued by Amira's holding company and its financial
subsidiaries is structurally subordinated to the priority
obligations at the group's operating entities. S&P believes that
these operating subsidiaries generate a substantial proportion of
the group's cash flow and represent the majority of total assets.
S&P estimates that the ratio of priority obligations to net
tangible assets for Amira is significantly above S&P's acceptable
15% threshold for sub investment-grade companies. The methodology
behind S&P's analysis of structural subordination risks for
corporate debt issues can be found in S&P's "2008 Corporate
Criteria: Rating Each Issue," published on April 15, 2008.
The stable outlook reflects S&P's expectation that, over the next
12-18 months Amira will continue its positive operating
performance momentum, benefiting from favorable industry trends
and continuing expansion into higher-margin countries. This
should enable the company to maintain EBITDA margins above 13%,
offsetting any potential pricing pressure on the rice commodity
markets. S&P would also expect adjusted FFO cash interest
coverage to be well above 2x, and liquidity to be at least
"adequate."
S&P could lower the rating if Amira experiences adverse operating
developments that lead to significantly weaker EBITDA and credit
ratios than S&P anticipates. This could occur if Amira fails to
secure adequate levels of stock because of a poor harvest or
issues in its processing facility. Lower metrics may also be the
result of the company being unable to achieve an adequate price
for its products, either because of lower demand, regulatory
issues, or intensified competition. A downgrade could also stem
from deterioration in the company's liquidity position if it
mismanages its working capital, most likely due to lower-than-
expected demand for its finished product. S&P could therefore
lower the ratings if adjusted FFO cash interest coverage falls
below 2x or, in S&P's view, Amira's liquidity deteriorates to
below the level that S&P views as "adequate" under its criteria.
In S&P's opinion, a positive rating action is unlikely over the
next 12-18 months, due to projected negative operating cash flow.
However, S&P could raise the rating if Amira outperforms S&P's
base-case assumptions, such that it results in sustainable
positive free cash flows and is able to successfully manage its
working capital demands, especially when the new plant is rolled
out. If S&P sees sustained deleveraging and improving credit
metrics it could also consider a positive rating action.
CHAMPION GROUP: CRISIL Assigns B Rating to INR70MM Cash Loan
------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable' rating to the long-term
bank facilities of Champion Group of Company (Champion).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 70 CRISIL B/Stable
Working Capital
Demand Loan 30 CRISIL B/Stable
The rating reflects Champion's weak financial risk profile and
tender-based nature of business leading to volatility in revenue.
These rating weaknesses are partially offset by the extensive
experience of the promoters in the sand mining, transportation and
providing telecommunication services.
Outlook: Stable
CRISIL believes that Champion will maintain its credit risk
profile backed by the experience of the promoters. The outlook may
be revised to 'Positive' in case of improvement in the firm's
capital structure or better working capital management, leading to
improvement in its financial risk profile. The outlook may be
revised to 'Negative' in case of lengthening of the working
capital cycle, decline in cash accruals, or significant debt-
funded capital expenditure plans, leading to deterioration in
Champion's liquidity.
Formed in 1994, Champion mines sand in Bihar. Apart from this, the
firm also provides transportation and telecommunications tower
installation services. Its day-to-day operations are managed by
Mr. Amit Kumar Singh.
DADA MOTORS: CRISIL Cuts Rating on INR270MM Cash Loan to B
----------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facility of
Dada Motors Pvt Ltd (DMPL) to 'CRISIL B/Stable' from 'CRISIL
B+/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 270 CRISIL B/Stable (Downgraded
from 'CRISIL B+/Stable')
The rating downgrade reflects deterioration in DMPL's business
risk profile, with a decline in its sales in 2013-14 (refers to
financial year, April 1 to March 31) leading to stretched
financial flexibility. The company booked sales of around 4.15
billion in 2013-14 vis-a-vis INR5.27 billion in 2012-13 with a
year on year decline of 22 per cent. Further the company has
booked sales of around INR1.84 billion for the nine months ended
September 30, 2014, and is expected to book flat year on year
sales of around INR4.0 billion to INR4.2 billion for 2014-15. The
company's liquidity too is expected to stay under pressure with
accruals of INR24 million, against fixed repayment obligations of
around INR39 million, during 2013-14. The shortfall in accruals is
expected to be met by financial support from the promoters. The
liquidity was weak in 2013-14 as well, with net cash accruals of
23.7 million against repayment obligation of 39.5 million. The
company booked a net loss of 16.2 million for 2013-14.
The rating reflects DMPL's average financial risk profile, marked
by a modest net worth, high total outside liabilities to tangible
net worth ratio, and weak debt protection metrics. Furthermore,
the company has low profitability because of its low bargaining
power with its principals, given the intense competition in the
automobile dealership business. These rating weaknesses are
partially offset by the extensive experience of DMPL's promoters
in the automobile dealership industry, and the company's extensive
network of showrooms and service centres catering to its two
principals. The rating also factors in the company's efficient
working capital management.
Outlook: Stable
CRISIL believes that DMPL will continue to benefit over the medium
term from its promoters' extensive industry experience. However,
the company's business risk profile is expected to deteriorate
over this period, with a decline in its sales. The outlook may be
revised to 'Positive' in case of significant improvement in the
company's capital structure and profitability, leading to a better
financial risk profile. Conversely, the outlook may be revised to
'Negative' if DMPL's financial risk profile deteriorates, most
likely because of low profitability, a substantial increase in its
working capital requirements, or large debt-funded capital
expenditure.
DMPL, established by Mr. Suraj Dada in 1992, is an authorised
automobile dealer for the entire range of commercial and passenger
vehicles of Tata Motors Ltd (TML; rated CRISIL AA/Stable/CRISIL
A1+) Fiat India Automobiles Ltd (FIAL). The company has 11
showrooms (10 for TML and one for FIAL) under the 3S (sales,
service, and spares) format in Punjab.
DMPL reported a net loss of INR16.2 million on net sales of
INR4.15 billion for 2013-14, as against a PAT of INR14.9 million
on net sales of INR5.27 billion for 2012-13.
DUNAR FOODS: CRISIL Cuts Rating on INR2.15BB Cash Loan to D
-----------------------------------------------------------
CRISIL has downgraded its ratings on the bank facilities of Dunar
Foods Ltd (Dunar) to 'CRISIL D/CRISIL D' from 'CRISIL B-
/Negative/CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bill Discounting 50 CRISIL D (Downgraded from
'CRISIL A4')
Cash Credit 2155 CRISIL D (Downgraded from
'CRISIL B-/Negative')
Export Packing Credit 2065 CRISIL D (Downgraded from
'CRISIL B-/Negative')
Packing Credit 230 CRISIL D (Downgraded from
'CRISIL A4')
Standby Line of Credit 200 CRISIL D (Downgraded from
'CRISIL B-/Negative')
Term Loan 364.5 CRISIL D (Downgraded from
'CRISIL B-/Negative')
Warehouse Receipts 1000 CRISIL D (Downgraded from
'CRISIL B-/Negative')
The rating downgrade reflects instances of delay by Dunar in
servicing the instalments on its term loans, and its working
capital facilities being overdrawn for more than 30 consecutive
days; the delays have been caused by the company's stretched
liquidity. CRISIL believes that Dunar's liquidity will remain
constrained over the medium term.
Dunar also has a weak financial risk profile, working-capital-
intensive operations as a result of its large inventory. The
ratings also factor in the susceptibility of the company's
operating margin to volatility in raw material prices, and its
vulnerability to adverse regulatory changes. However, Dunar
benefits from its long-standing presence in the basmati rice
market.
Dunar was established as a partnership firm and reconstituted as a
private limited company in 1998, and then as a public limited
company in 2010-11 (refers to financial year, April 1 to
March 31). The company is managed by Mr. Surendar Gupta. Dunar
mills and processes basmati rice. In 2011-12, International
Finance Corporation and IL&FS Trust Company Ltd invested around
INR1.15 billion in Dunar for a 30.5 per cent equity stake in the
company.
GANPATI HIGHTECH: CRISIL Suspends D Rating on INR80MM Cash Loan
---------------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of Ganpati
Hightech Communication Pvt Ltd (GHCPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 80 CRISIL D
Letter of Credit 50 CRISIL D
The suspension of ratings is on account of non-cooperation by
GHCPL with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, GHCPL is yet to
provide adequate information to enable CRISIL to assess GHCPL's
ability to service its debt. The suspension reflects CRISIL's
inability to maintain a valid rating in the absence of adequate
information. CRISIL considers information availability risk as a
key credit factor in its rating process and non-sharing of
information as a first signal of possible credit distress, as
outlined in its criteria 'Information Availability Risk in Credit
Ratings'.
GHCPL, part of the Kolkata (West Bengal)-based Sav Steel group, is
managed by Mr. Sanjay Agarwal. Set up in 2008, the company trades
in a wide range of steel products including cold-rolled sheets,
strips, angles, and thermo-mechanically treated steel bars.
GARG RICE: ICRA Suspends B Rating on INR13cr ST Loan
----------------------------------------------------
ICRA has suspended the long term rating of [ICRA]B and short term
rating of [ICRA]A4 assigned to the INR14.00 crore fund based bank
facilities of Garg Rice Mills.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- Fund
Based Limits 1.00 [ICRA]B; Suspended
Short Term-Fund
Based Limits 13.00 [ICRA]A4; Suspended
The ratings were suspended due to lack of cooperation by the
client to provide any further information.
Business was established in the year 1980 as a partnership firm.
Currently company is being managed by Mr. Sugam Chand, Mr. Radhe
Shyam and Mr Nilesh Garg. All the partners are actively engaged in
the business of the company. Milling capacity of the plant is 2
tonnes/hr of paddy. Firm is engaged in the business of processing
and trading of rice in domestic market as well as exporting to
countries in Middle East and Europe. Raw material is purchased
from mandi in Haryana, Uttar Pradesh and Rajasthan. Company is
having its manufacturing unit at Link Road, Taraori, Karnal.
GHAI CONSTRUCTIONS: CRISIL Suspends B+ Rating on INR100MM Loan
--------------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of Ghai
Constructions (GS).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 40 CRISIL A4
Cash Credit 10 CRISIL B+/Stable
Term Loan 100 CRISIL B+/Stable
The suspension of ratings is on account of non-cooperation by GS
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, GS is yet to
provide adequate information to enable CRISIL to assess GS's
ability to service its debt. The suspension reflects CRISIL's
inability to maintain a valid rating in the absence of adequate
information. CRISIL considers information availability risk as a
key credit factor in its rating process and non-sharing of
information as a first signal of possible credit distress, as
outlined in its criteria 'Information Availability Risk in Credit
Ratings'.
GS was set up in the mid-1980s by Mr. Hardayal Singh Ghai, and is
currently managed by his son Mr. Jaspal Singh Ghai. The firm
collects toll at various state highways in Maharashtra.
GLOBAL STEEL: CRISIL Assigns B- Rating to INR100MM Overdraft Loan
-----------------------------------------------------------------
CRISIL has assigned its 'CRISIL B-/Stable/CRISIL A4' ratings to
the bank facilities of Global Steel Company (GSC).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Overdraft Facility 100 CRISIL B-/Stable
Long Term Loan 30 CRISIL B-/Stable
Bank Guarantee 10 CRISIL A4
Letter of Credit 20 CRISIL A4
The ratings reflect GSC's modest scale of operations, large
working capital requirements, and weak financial risk profile
marked by high gearing and low networth levels. These rating
weaknesses are partially offset by extensive industry experience
of its promoter and moderate operating capabilities.
Outlook: Stable
CRISIL believes that GSC will continue to benefit over the medium
term from the extensive industry experience of its promoter. The
outlook may be revised to 'Positive' if the firm reports a
substantial increase in its accruals, supported by a significant
improvement in its scale of operations, or in case of sizeable
capital infusion by its partners, leading to a better financial
risk profile. Conversely, the outlook may be revised to 'Negative'
if GSC's financial risk profile weakens, caused most likely by an
increase in its working capital requirements, a decline in its
cash accruals, large debt-funded capital expenditure, or sizeable
capital withdrawal by its promoter.
Set up in the year 2009, GSC is engaged in pre-engineering
structural for infrastructure industry. Promoted by Mr. Rishi
Agarwal, the firm has its manufacturing facility near Medchal in
Hyderabad.
GSC reported a profit after tax (PAT) of INR0.7 million on net
sales of INR252.5 million for 2013-14 (refers to financial year,
April 1 to March 31), as against a PAT of INR7.5 million on net
sales of INR412.8 for 2012-13.
GOLCHHA ENTERPRISES: CRISIL Ups Rating on INR25MM Cash Loan to B+
-----------------------------------------------------------------
CRISIL has upgraded its rating on the long-term bank facility of
Golchha Enterprises Pvt Ltd (GEPL) to 'CRISIL B+/Stable' from
'CRISIL B/Stable', while reaffirming its rating on the company's
short-term facilities at 'CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 25 CRISIL A4 (Reaffirmed)
Cash Credit 25 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
Foreign Letter of
Credit 90 CRISIL A4 (Reaffirmed)
The rating upgrade reflects CRISIL's belief that GEPL's business
risk profile will continue to improve over the medium term, driven
by an increase in its scale of operations due to the increase in
orders from its existing customers and the addition of new
customers in the chemical trading business. The company reported a
growth of 17 per cent in its operating income to INR782.6 million
in 2013-14 (refers to financial year, April 1 to March 31) from
INR668.8 million in 2012-13. Its operating income is expected to
grow at a comfortable 10 to 15 per cent per annum, with an
operating margin of 2.5 to 3 per cent, over the medium term.
The rating upgrade also factors in GEPL's prudent risk management
practices, leading to low inventory and debtor risk, though it is
still susceptible to currency fluctuation risk.
The ratings reflect GEPL's average financial risk profile, marked
by a weak interest coverage ratio and a small net worth. This
rating weakness is partially offset by the extensive experience of
the company's promoters in the industrial chemicals trading
business, and its well-diversified product portfolio and customer
base.
For arriving at the ratings, CRISIL has treated a portion of the
interest-bearing unsecured loans provided by GEPL's promoters,
family, and friends as neither debt nor equity, for the
calculation of its financial numbers. This is based on a specific
undertaking by the management to maintain these funds in the
business over the long term.
Outlook: Stable
CRISIL believes that GEPL will continue to benefit over the medium
term from its promoters' extensive industry experience and its
well-diversified revenue profile. The outlook may be revised to
'Positive' if the company significantly improves its financial
risk profile, driven by better working capital management.
Conversely, the outlook may be revised to 'Negative' if GEPL's
financial risk profile deteriorates, with a further weakening of
its capital structure, most likely due to lengthening of its
working capital cycle or debt-funded capital expenditure.
GEPL was incorporated in 2007, promoted by the Golchha family. The
Jamshedpur (Jharkhand)-based company trades in various chemicals,
minerals, ferroalloys, and metals in the domestic market.
GOODEARTH MINCHEM: CRISIL Puts B+ Rating on INR50MM Cash Loan
-------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-term
bank facilities of Goodearth Minchem Pvt Ltd (GMPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 50 CRISIL B+/Stable
Term Loan 40 CRISIL B+/Stable
The rating reflects GMPL's exposure to risks arising from on-going
project implementation and subsequent start-up phase of operation.
The rating also factors in the company's expected below-average
financial risk profile on account of debt-funded capital
expenditure and large working capital requirements. These rating
weaknesses are partially offset by the extensive experience of
GMPL's promoters in the chemicals industry through its associate
entities, and their funding support.
Outlook: Stable
CRISIL believes that GMPL will continue to benefit over the medium
term from its promoters' extensive industry experience. The
outlook may be revised to 'Positive' in case of timely
commissioning of the project within the budgeted cost and
subsequent ramp up in operations leading to large cash accruals.
Conversely, the outlook may be revised to 'Negative' in case of
time or cost overrun in project implementation or low ramp up in
operations, adversely impacting the company's financial risk
profile, particularly liquidity.
GMPL was incorporated in 2008 with the objective of setting up a
unit to produce manganese sulphate (MnSO4) having a capacity of
48,000 tonnes per annum. The company is promoted by Mr. Pramod
Budhraja, Mr. Rishi Budhraja, and Mr. Rahul Budhraja. The Bharuch
(Gujarat)-based company is expected to commence its operations in
April 2015.
HANUMAN DAL: ICRA Suspends B+ Rating on INR10.30cr LT Loan
----------------------------------------------------------
ICRA has suspended the [ICRA]B+ rating assigned to the INR10.30
crore, long term loans & working capital facilities of Hanuman Dal
Industries. The suspension follows ICRA's inability to carry out a
rating surveillance in the absence of the requisite information
from the company.
Hanuman Dal Industries was established in 2010. Mr. Ramanarao
Musalaiha Bolla and Mr. Tirupatirao Musalaiha Bolla are the
partners actively involved in the business. The firm has its
factory and registered office located in Nagpur, Maharashtra. The
firm is a part of the Bolla group.The other entities being-
Hanuman Rice Industries, Shree Laxmi Tirupati Amma Murmura
Industries, M/s. Balaji Industries, M/s. Tirumala Dal Udyog and
Adinath Cold Storage Private Limited.
HANUMAN RICE: ICRA Suspends B+ Rating on INR9cr LT Loan
-------------------------------------------------------
ICRA has suspended the [ICRA]B+ rating assigned to the INR9.00
crore, long term loans & working capital facilities of Hanuman
Rice Industries. The suspension follows ICRA's inability to carry
out a rating surveillance in the absence of the requisite
information from the company.
Hanuman Rice Industries was established in 2010. Mr. Ramanarao
Musalaiha Bolla and Mrs. Vijaylaxmi R. Bolla are the partners
actively involved in the business of the firm. The firm has its
factory and registered office located in Nagpur, Maharashtra. The
firm is a part of the Bolla group. The other entities being-
Hanuman Dal Industries, Shree Laxmi Tirupati Amma Murmura
Industries, M/s. Balaji Industries, M/s. Tirumala Dal Udyog and
Adinath Cold Storage Private Limited.
JAY PARVATI: ICRA Assigns B Rating to INR3.79cr Term Loan
---------------------------------------------------------
ICRA has assigned the rating of [ICRA]B to INR6.72 crore long term
fund based facilities of Jay Parvati Cold Storage.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 2.93 [ICRA]B assigned
Term Loan 3.79 [ICRA]B assigned
The assigned rating is constrained by JPCS's small envisaged scale
and limited track record of operations as well as the residual
execution and implementation risks associated with the Greenfield
project. The rating also takes into account the possibility of
inventory losses in case the fall in market price of potato is
more than the value of collateral at the time of clearance of
goods; further, the debt servicing indicators remain highly
sensitive to capacity utilization and margins and there could be
possible stress on debt servicing ability in case the ramp up of
cash flows is slower than anticipated. ICRA also takes note that
JPCS is a partnership concern and the risks inherent in
partnership firm with respect to capital withdrawals and its
potential impact on credit profile as well as on continuity of
organization.
The rating however, favourably factors in the operational
synergies enjoyed by the firm by virtue of its partners being
engaged in potato farming and the favourable location of the
firm's facility at Deesa, Gujarat an area with large output of
potato.
Established in June 2014, Jay Parvati Cold Storage (JPCS) is in
the process of setting up a plant for providing cold storage
facility to potato farmers and traders on a rental basis. JPCS is
expected to commence commercial operations from mid of February
2015. The facility of the firm is located at Deesa, Gujarat with a
storage capacity of 1,53,000 bags (each weighing 50 Kg) cumulating
to around 7,650 MT of potatoes. The firm has been promoted by the
Mali and Parmar families, who have long standing experience in
potato farming and trading businesses.
KAILAS CERAMICS: CRISIL Reaffirms B Rating on INR20MM Cash Loan
---------------------------------------------------------------
CRISIL's ratings on the bank facilities of Kailas Ceramics Pvt Ltd
(KCPL) continue to reflect its small scale of operations and
below-average financial risk profile, marked by a small net worth
and a high total outside liabilities to tangible net worth ratio.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 20 CRISIL B/Stable (Reaffirmed)
Letter of Credit 50 CRISIL A4 (Reaffirmed)
Proposed Letter of
Credit 30 CRISIL A4 (Reaffirmed)
These rating weaknesses are partially offset by the extensive
experience of KCPL's promoters in trading in tiles and granites.
Outlook: Stable
CRISIL believes that KCPL will benefit over the medium from its
promoters' extensive experience in the ceramic tiles industry. The
outlook may be revised to 'Positive' if the company substantially
increases its scale of operations and profitability on a sustained
basis, leading to improved cash accruals and capital structure.
Conversely, the outlook may be revised to 'Negative' if KCPL
undertakes a large debt-funded capital expenditure programme, or
there is a considerable decline in its revenue or profitability
impacting its financial risk profile.
Set up as a private limited company in 2012 by Mr. Dharamshi L
Patel and his family members in Tiruppur (Tamil Nadu), KCPL trades
in imported ceramic tiles.
LANCER LASER: CRISIL Reaffirms B- Rating on INR55MM Term Loan
-------------------------------------------------------------
CRISIL's ratings on the bank facilities of Lancer Laser Tech Ltd
(LLTL) continue to reflect LLTL's below-average financial risk
profile, marked by small net worth and weak debt protection
metrics and liquidity. This rating weakness is partially offset by
the extensive experience of LTTL's promoters in the engineering
industry.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bill Discounting 3 CRISIL B-/Stable (Reaffirmed)
Cash Credit 50 CRISIL B-/Stable (Reaffirmed)
Letter of credit &
Bank Guarantee 10 CRISIL A4 (Reaffirmed)
Term Loan 55 CRISIL B-/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility 33.9 CRISIL B-/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that LLTL will continue to benefit over the medium
term from its promoters' extensive industry experience. The
outlook may be revised to 'Positive' if the company achieves
substantial revenue and operating margin, leading to significant
improvement in its cash accruals and liquidity. Conversely, the
outlook may be revised to 'Negative' if LLTL's liquidity
deteriorates, most likely because of a stretch in its working
capital cycle or low cash accruals or large debt-funded capital
expenditure.
LLTL, established in 1999, manufactures agricultural rotovators
and undertakes customised sheet metal fabrication works such as
metal cutting, bending, and wielding. The company also undertakes
jobwork based on customers' requirements. It is managed by Mr.
Harshadbhai Patel, Mr. Dhirajbhai N Patel, Mr. Dahyabhai B Patel,
and Mr. Narsinhbhai Patel. LLTL is based at Rajpur in Mehsana
(Gujarat).
LV ENTERPRISES: ICRA Reaffirms B+ Rating on INR6.46cr Term Loan
---------------------------------------------------------------
ICRA has reaffirmed the long term rating of [ICRA]B+ to the
INR6.46 crore (revised from INR7.60 crore) term loan, INR6.30
crore (revised from INR4.50 crore) working capital limits and
INR4.24 crore (revised from INR4.19 crore) unallocated limits of
LV Enterprises Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based Limit-
Term Loan 6.46 [ICRA]B+ reaffirmed
Fund Based Limit-
Working Capital 6.30 [ICRA]B+ reaffirmed/ assigned
Non Fund Based Limit-
Bank Guarantee 3.00 [ICRA]A4 reaffirmed
Long term/short term
unallocated 4.24 [ICRA]B+/[ICRA]A4 reaffirmed
ICRA has also reaffirmed the short term rating of [ICRA]A4
assigned to INR3.00 crore non fund based limits of LVEPL. The
above unallocated limits of INR4.24 crore (revised from INR4.19
crore) had also been rated on a short term scale for which the
rating has been reaffirmed at [ICRA]A4.
ICRA has also withdrawn the [ICRA]B+ rating assigned earlier to
FCNR (B) limits of LVEPL, as the company has not utilized the
same. There is no amount outstanding against the rated instrument.
The reaffirmation of ratings take into account the small scale of
company's operations with moderate utilization of available
capacity, at around 55%; its weak financial profile as reflected
by a high gearing, nominal profits and low cash accruals from
operations, during FY14. The reaffirmation of ratings also take
into consideration the highly competitive nature of wheat
processing business on account of low barriers to entry, and
limited value addition, thereby exerting pressure on
profitability. ICRA also notes LVEPL's exposure to agro-climatic
risks, associated with the availability of wheat and vulnerability
of its operations to government regulations on pricing and
distribution of agricultural commodities. Although the
profitability of the company remains vulnerable to the volatility
in the raw material price, short conversion cycle and the fast
moving nature of wheat products mitigates the same to some extent.
The ratings, however, derives support from the long experience of
the promoters in the wheat milling industry with presence of a
group company in similar line of business and favorable location
of the plant in Hajipur, Bihar, which is in close proximity to
wheat growing regions, leading to low transportation costs. The
ratings further incorporate LVEPL's stable target market, given
that wheat flour forms an essential constituent of Indian diet.
Going forward, LVEPL's ability to scale up production by
effectively utilizing its installed capacity would be a key rating
sensitivity.
LVEPL was incorporated in September, 2011 by the Sha and Kumar
family, to develop a flour mill. The manufacturing facility of the
company is located in Hajipur, Bihar with an installed flour
roller mill capacity of 45000 metric ton per annum (MTPA) and an
atta chakki plant with a capacity of 15000 MTPA. The company
commenced commercial operations from May, 2013.
Recent Results
LVEPL reported a profit after tax of INR0.07 crore on an operating
income of INR48.71 crores, during the financial year 2013-14.
M N POLYTEX: CRISIL Reaffirms B Rating on INR75MM Cash Credit
-------------------------------------------------------------
CRISIL's ratings on the bank facility of M N Polytex Pvt Ltd
(MNPPL) continue to reflect MNPPL's modest scale of operations in
an intensely competitive industry, susceptibility of operating
margins to fluctuations in raw material prices and moderate
financial risk profile marked by low net worth and high gearing.
These rating weaknesses are partially offset by the extensive
experience of promoters in the textile industry.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 75 CRISIL B/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that MNPPL will continue to benefit over the
medium term from its promoters extensive experience in textile
industry. The outlook may be revised to 'Positive' in case the
company scales up its operations, while improving its
profitability and capital structure. Conversely, the outlook may
be revised to 'Negative' in case of a sharp decline in the
company's revenues or operating margins or an elongation of its
working capital cycle, resulting in weakening in its financial
risk profile.
MNPPL, promoted in 2004, is engaged in buying yarn and getting it
converted into grey fabric on contract basis from outside
manufacturers. Mr. Ramesh Shah, Mr. Pravin Shah, Mr. Manish Shah
and Mr. Mukesh Shah are the promoters of MNPPL. MNPPL's office is
at Mumbai.
MITTAL LUMBER: ICRA Reaffirms B Rating on INR2.25cr FB Loan
-----------------------------------------------------------
ICRA has reaffirmed its long term rating of [ICRA]B on the INR2.25
crore (enhanced from INR1.50 crore) fund based limits of Mittal
Lumber Pvt. Ltd. ICRA has also reaffirmed its short term rating
of [ICRA]A4 on the INR4.40 crore (enhanced from INR4.00 crore) non
fund based limits of MLPL.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based limits 2.25 [ICRA]B; Reaffirmed
Letter of Credit 4.40 [ICRA]A4; Reaffirmed
The reaffirmation of the ratings continues to take into account
the long experience of the promoters in the timber trading
business and consistent growth in revenues of the company in the
last few years. However the ratings continues to be constrained by
the weak financial profile of the company as reflected in its
elevated gearing on account of large working capital requirements,
which have been substantially debt funded, and have translated
into weak coverage indicators., as reflected in low interest
coverage of 1.04 times during FY 2014. The ratings are further
constrained by the highly competitive nature of the industry
characterized by the presence of numerous players which have
resulted in modest profitability of the company in the past.
Moreover, the margins remains exposed to any variation in the
timber prices as well as exchange rate risk on import payables
(Although, forward contract limit is availed by the company in
order to hedge the foreign exchange risk).
Going forward, the ability of the company to maintain revenue
growth while improving its margins, and a sustained improvement in
its capital structure and coverage indicators will be the key
rating sensitivities.
MLPL was incorporated in 1991 by Mr. Pradeep Kumar Jain & his
wife. Mr. Kumar is actively engaged in the business and has long
experience in timber trading industry. MLPL is engaged in cleaning
and sawing of logs to make clean squared timber blocks. The
company imports timber from mainly Europe and America. All the
sawn timber produced at its Gandhidham (Gujarat) factory is sold
from its office in Nangloi in New Delhi, and Gandhidham in
Gujarat.
Recent Results
MLPL reported a profit after tax (PAT) of INR0.04 crore on an
operating income of INR12.65 crore in FY 2013-14 as compared to a
PAT of INR0.03 crore on an operating income of INR10.39 crore in
the previous year.
MUKTSAR COTTON: ICRA Reaffirms B Rating on INR10cr LT Loan
----------------------------------------------------------
ICRA has reaffirmed its [ICRA]B rating on the INR10.00 crore long
term fund based bank limits of Muktsar Cotton (P) Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term: Fund 10.00 [ICRA]B; reaffirmed
Based Limits
ICRA's rating continues to take into account MCPL's stretched
financial profile as reflected in its low profitability and high
leverage. Limited value addition in ginning results in low
profitability and accruals, given the commoditized nature of the
product. The working capital requirements of MCPL remain high due
to stocking requirements on account of seasonal availability of
cotton as MCPL typically stocks cotton for its group company
engaged in cotton spinning, which accounts for MSPL's entire
cotton sales. However, ICRA's rating continues to favorably take
into account the extensive experience of MCPL's promoters in the
cotton ginning industry and the favorable location of the ginning
unit in the cotton belt and in close vicinity to the textile hub
in Punjab, which provides easy access to both raw materials and
customers.
Going forward, the ability of the company to effect a sustained
improvement in its working capital cycle and a reduced dependence
on debt for meeting the incremental working capital requirements
would be the key rating sensitivities.
MCPL was incorporated in September 1996 and is primarily engaged
in cotton ginning to produce cotton lint and cotton seeds. The
entire cotton sales are to a group company which is engaged in
cotton yarn spinning. The company also undertakes crushing of
cotton seeds to produce cotton seed oil and cotton seed cake,
however their proportion in the total sales is low. The company
has a ginning unit in Muktsar (Punjab) with 32 ginning machines
and 7 expellers and an installed capacity of ginning ~750 quintals
of kapas and crushing ~600 quintals of cotton seeds per day.
NANU RAM: ICRA Reaffirms B+ Rating on INR6cr Fund Based Loan
------------------------------------------------------------
ICRA has reaffirmed the long term rating of [ICRA]B+ on the INR6.0
crore bank facilities of Nanu Ram Jindal Gum & Chemicals Private
Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term: Fund
Based Limits 6.0 [ICRA]B+; reaffirmed
The rating continues to be constrained by limited experience of
the promoters in guar gum industry; relatively low market share of
the company in relation to the overall guar gum processing
industry in the country, exposure to agro-climatic risks related
to guar seed production and modest financial risk profile
characterised by low profitability and weak debt coverage
indicators.
The rating, however, favourably factors in the varied application
of guar gum across oil exploration, textile printing, mining and
food products as well as the favourable location of the company's
manufacturing facility with proximity to the main guar growing
belt.
NPL was incorporated in April 2012 and is promoted by Mrs.
Shankuntla Devi & Mr. Neeraj Jindal. The company is a manufacturer
and trader of guar gum and associated products. Its manufacturing
plant is located in Siwani Mandi Haryana with capacity of 5400
metric ton per annum guar splits. Company supplies guar gum split
to the manufacturers of guar gum powder.
Recent Results
NPL reported turnover of INR51.71 crore and net profit of INR0.07
crore in FY14 against INR8.63 crore and net profit of 0.04 crore
in FY13.
NARULA EXPORTS: ICRA Assigns B+ Rating to INR1.0cr FB Loan
----------------------------------------------------------
ICRA has assigned its long term rating of [ICRA]B+ to the INR2.00
crore fund based bank facilities of Narula Exports. ICRA has also
assigned its short term rating of [ICRA]A4 to the INR6.00 crore
non fund based bank facilities of the firm.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based Limit-PCL 1.00 [ICRA]B+; assigned
Fund Based Limit- 1.00 [ICRA]B+; assigned
FDBP/FUBP
Non Fund Based Limit- 0.90 [ICRA]A4; assigned
FLC
Non Fund Based Limit- 1.50 [ICRA]A4; assigned
Bank Guarantee
Unallocated non fund 3.60 [ICRA]A4; assigned
based facilities
ICRA's ratings are constrained by the firm's small scale of
operations in the highly competitive healthcare industry. The
ratings also consider the fragmented nature of the industry,
coupled with a tender based contract awarding system, which
results in pressure on margins for the players including Narula
Exports. The ratings also consider the firm's exposure to foreign
exchange fluctuation risk, as also the risks associated with the
firm's constitution as a partnership firm, including the risk of
capital withdrawal by the partners, risk of dissolution etc. The
rating however derives comfort from the experience of the
promoters in the business of trading in hospital equipment, the
firm's status as an approved vendor for various health departments
in Africa, countries in Latin America and the Gulf, and favourable
growth prospects considering the growth in the health care
industry. Moreover, the firm's healthy order book position
provides revenue visibility over the medium term. ICRA's ratings
also derive support from the firm's lightly leveraged capital
structure.
Going forward, the ability of the firm to scale up its operations
in a profitable manner while maintaining optimal working capital
intensity will be the key rating sensitivity.
Incorporated in 1990, Narula Exports is primarily involved in
trading of products like hospital furniture, hospital equipment,
hospital consumables, medicines, laboratory equipment,
sterilization equipment and first aid kits. The firm is an
approved vendor for supply of these products with various health
departments in countries in Africa, Latin America and the Gulf.
The firm also trades in PVC polymers which are procured from
manufacturers in Korea and supplied in the domestic market.
Recent Results
The firm reported a net profit of INR0.97 crore on an operating
income of INR21.42 crore in 2013-14; as compared to a net profit
of INR0.31 crore on an operating income of INR15.36 crore in the
previous year.
NORTH WESTERN: ICRA Withdraws 'C' Rating on INR100cr Term Loan
--------------------------------------------------------------
ICRA has withdrawn the suspended rating of [ICRA]C assigned to the
INR100.00 crore term loan of North Western Karnataka Road
Transport Corporation (NWKRTC). As per ICRA's policy of withdrawal
and suspension of credit rating, ICRA can withdraw the rating in
case it remains under suspension for a period of three years.
OPS JEWELLS: CRISIL Reaffirms B+ Rating on INR150MM Cash Loan
-------------------------------------------------------------
CRISIL's rating on the long-term bank facility of OPS Jewells Pvt
Ltd (OPSJPL) continues to reflect OPSJPL's small scale of
operations in the highly competitive gems and jewellery industry;
and the company's weak financial risk profile, marked by high
gearing and large working capital requirements. These rating
weaknesses are partially offset by the extensive industry
experience of the company's promoters and geographic
diversification in its revenue profile.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 150 CRISIL B+/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that OPSJPL will benefit over the medium term from
the extensive industry experience of its promoters. The outlook
may be revised to 'Positive' if OPSJPL generates significantly
large cash accruals, most likely due to a significant improvement
in its scale of operations, thereby enhancing its financial risk
profile. Conversely, the outlook may be revised to 'Negative' if
the company's financial risk profile deteriorates due to
deterioration in its capital structure, with significant
incremental working capital requirements; or if the company
undertakes any debt-funded capital expenditure programmes.
OPSJPL was founded in 2011 by Mr. Kailash Chand Gupta and his
sons, Mr. Amit Bansal and Mr. Vikas Bansal, in Karnal (Haryana).
The company retails diamond, gold, and silver jewellery and
ornaments through its two showrooms in Karnal and Panipat
(Haryana). Mr. Vikas Bansal manages the day-to-day operations of
OPSJPL's Karnal showroom, while Mr. Amit Bansal manages the
operations of the Panipat showroom.
P.T. SREENIVASAN: CRISIL Places B Rating on INR25MM Cash Credit
---------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable/CRISIL A4' ratings to the
bank facilities of P.T. Sreenivasan (PTS).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 3 CRISIL B/Stable
Proposed Long Term
Bank Loan Facility 9 CRISIL B/Stable
Bank Guarantee 33 CRISIL A4
Cash Credit 25 CRISIL B/Stable
The ratings reflect PTS's modest scale of operations in the
fragmented civil construction industry and its small net worth.
These rating weaknesses are partially offset by the extensive
industry experience of the firm's promoters.
Outlook: Stable
CRISIL believes that PTS will continue to benefit over the medium
term from its promoters' extensive industry experience. The
outlook may be revised to 'Positive' if the firm scales up its
operations significantly while maintaining its moderate operating
profitability, or improves its working capital management.
Conversely, the outlook may be revised to 'Negative' if PTS
registers low revenue or profitability, or if its working capital
management deteriorates, resulting in weakening of its liquidity.
PTS, set up in 1984 as a proprietorship firm is based in Kozhikode
(Kerala). It executes civil contracts for the Kerala Public Works
Department. The firm's day-to-day operations are managed by Mr. P.
T. Sreenivasan.
PTS reported a net profit of INR7.4 million on an operating income
of INR46 million for 2013-14 (refers to financial year, April 1 to
March 31), against a net profit of INR3.4 million on operating
income of INR106 million for 2012-13.
PAGRO FROZEN: ICRA Upgrades Rating on INR20cr Term Loan to B-
-------------------------------------------------------------
ICRA has revised its long term rating on the INR20 crore term
loans and INR10 crore cash credit limits of Pagro Frozen Foods
Private Limited to [ICRA]B- from [ICRA]C+. ICRA has reaffirmed its
short term ratings on the company's INR0.75 crore facilities at
[ICRA]A4.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term Loans 20.00 [ICRA]B-; Upgraded
Cash Credit 10.00 [ICRA]B-; Upgraded
Crop Loan 0.75 [ICRA]A4; reaffirmed
The revision in PFFL's ratings is primarily driven by an
improvement in the company's liquidity position which has
benefitted from the receipt of grants from the Ministry of Food
Processing Industries; the grant is available under the
Government's capital investment subsidy scheme for food processing
units. The rating revision also takes into account the healthy
year-on- year growth in the company's operating income in 2013-14,
though this was offset somewhat by a decline in the company's
operating margins. ICRA has also takes note of the increasing
proportion of exports to the overall revenues, exports accounted
for nearly one third of the total sales in 2013-14, with the
company developing a strong clientele in the Middle East. Further,
the ratings continue to take into account the extensive experience
of the promoters in the food processing industry, the company's
established ties with domestic clients and regular flow of lease
income from Vista Processed Food Private Limited, which has set up
a plant in PFFL's campus. ICRA also notes that the company's
future revenue growth is expected to come from PFFL's own brand
(Pagro), which would necessitate investments by the company in
brand building and in its distribution network, for penetrating a
competitive market dominated by bigger brands. Further, an
elongated working capital cycle on account of high inventory acts
as a liquidity stressor.
Going forward, the company's continued ability to profitably ramp
up its production, optimally manage its working capital cycle and
improve its liquidity, will remain the key rating sensitivities.
PFFL was incorporated in 2007 for setting up an integrated
vegetables processing plant in Punjab. PFFL is promoted by Mr.
N.S. Brar and Mr. Pawaninder Singh Dhillon, who have over two
decades of experience in food processing and contract farming. The
promoters are also managing a company in the same line of
business, namely PFL, for the past eight years. They have been
joined by Mr. Satpal Khattar, who has invested in the company
through his investment arm, Khattar Holdings Private Limited. The
project, at full capacity, involves contract farming of vegetables
across 10,000 acres of land and processing around 15,000 metric
tonnes (MT) of vegetables annually, to produce 12,000 MT of frozen
vegetables and 3000 MT of French fries. The commercial operations
of the company started in March 2012. In 2013-14, PFFL processed
8,159 MT of vegetables.
Recent Results
In 2013-14, PFFL reported a Profit after Tax (PAT) of INR0.5 Crore
on an Operating Income (OI) of INR32.3 crore, as compared to a PAT
of INR0.1 crore on an OI of INR11.7 crore for the previous year.
PATEL RAVJI: CRISIL Assigns B Rating to INR30MM Bank Loan
----------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable/CRISIL A4' ratings to the
long-term bank facilities of Patel Ravji Mavji & Co - Keshod
(PRMC).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term
Bank Loan Facility 30 CRISIL B/Stable
Cash Credit 10 CRISIL B/Stable
Export Packing Credit 50 CRISIL A4
& Export Bills
Negotiation/Foreign
Bill discounting
The ratings reflect the firm's modest scale of operations, low
profitability due to trading nature of its operations and firm's
vulnerability to volatility in raw material prices. These rating
weaknesses are partially offset by the extensive experience of the
partners in the agro commodity trading industry, and established
customer and supplier relations.
Outlook: Stable
CRISIL believes that PRMC will continue to benefit over the medium
term from its promoters' extensive experience in agro commodity
trading business. The outlook may be revised to 'Positive' if the
firm improves its financial risk profile with a sustained and
substantial increase in its scale of operations and profitability.
Conversely, the outlook may be revised to 'Negative' if PRMC's
liquidity weakens with considerably low cash accruals because of a
decline in its revenue or profitability, or sizeable debt funded
capital expenditure or stretch in its working capital cycle.
PRMC was established in the year 1996 by Junagadh (Gujarat)-based
Mr Rameshkumar M. Savalia and Mr Hareshkumar M. Savalia. The firmi
s involved in trading and processing of agro commodities mainly
groundnut seeds
PRMC reported profit after tax of INR0.5 million on net sales of
INR501.4 million for 2013-14 (refers to financial year, April 1 to
March 31).
PERODY BUILDERS: ICRA Assigns B+ Rating to INR5cr LT Loan
---------------------------------------------------------
ICRA has assigned a long term rating of [ICRA]B+ to the INR5.0
crore fund based facilities of Perody Builders Private Ltd.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Fund based 5.0 [ICRA]B+ Assigned
The assigned rating takes into account the long track record of
the promoter, with more than a decade's experience and completion
of 15 projects, in Bangalore's real estate industry. The rating
draws comfort from the advanced stages of construction of the
ongoing project, Perody Guru, with more than 60% development
completion (in terms of cost), and also from the expected positive
cash accruals from recently completed project, Perody MVB County,
which is a partnership project of the company with 50% share. The
rating assigned also factors in the financial strength of the
promoter, as reflected through regular infusion of equity for the
projects executed in past which is expected to continue going
forward as well.
The rating is, however, constrained by the company's modest scale
of operations and thin profitability. ICRA takes note of the
recently availed term loan, towards construction of Perody Guru
project, which has resulted in a stretched capital structure and
sizable repayment obligations in FY16 vis-…-vis cash accruals
witnessed by the company. The rating assigned also factors in the
competition from upcoming supplies in the vicinity of the project
location which might put pressure on pricing as well as sales
velocity of the project.
Going forward, ability of the company to achieve healthy booking
levels, maintain high collection efficiency and execute its
ongoing project in a timely manner would be the key rating
sensitivities.
Perody Builders Private Ltd. (PBPL), incorporated on 20th
September, 2011, is a closely held private limited company,
promoted by Mr. Ramankanth Shetty and his family. The company is
into real estate development activity, involving construction of
multi-unit residential apartments and commercial complexes in
Bangalore. Till date the company has executed 15 projects with a
saleable area of ~ 0.5 msft. The PBPL team comprises of 2
engineers, 1 architect, 3 engineering diplomas, construction
supervisors, 3 marketing professionals, 2 accounts managers, 3
administrative staff and construction workers. The group companies
include Namana Enterprizes (restraunt business) and MV Builders
and Developers (JV company between PBPL and partners, 50:50
ownership towards development of the project, 'MVB County').
Recent results
In FY14, the company reported a net profit of INR0.33 crore on an
operating income (OI) of INR2.12 crore as against a net profit
(PAT) of INR0.68 crore on an OI of INR8.27 crore in FY13.
R.K. BEHURIA: CRISIL Cuts Rating on INR95MM Packing Credit to D
---------------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facilities
of M/s R.K. Behuria (RKB) to 'CRISIL D' from 'CRISIL B+/Stable'.
The downgrade reflects RKB's overdrawn cash credit limits for more
than 30 consecutive days; the limits have been overdrawn because
of the firm's weak liquidity.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 25 CRISIL D (Downgraded from
'CRISIL B+/Stable')
Export Packing Credit 95 CRISIL D (Downgraded from
'CRISIL B+/Stable')
RKB has a modest scale of operations and is vulnerable to changes
in government policies and to cyclicality in its end-user
industry. Also, the firm is exposed to revenue concentration risks
and has a modest financial risk profile, marked by small net worth
and weak liquidity. However, the firm benefits from its promoters'
extensive experience in the iron-ore fines export business.
RKB trades in iron-ore lumps and fines and is the flagship entity
of the RKB group. Set up in 1996, the proprietorship concern,
owned by Mr. R K Behuria, is based in Odisha.
RADHA MADHAV: CRISIL Rates INR500MM Term Loan at B+
---------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-term
bank facility of Radha Madhav Developers (RMD). The rating
reflects the extensive experience of RMD's promoters in the real
estate industry and the firm's comfortable capital structure.
These rating strengths are partially offset by RMD's exposure to
offtake risk.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 500 CRISIL B+/Stable
Outlook: Stable
CRISIL believes RMD will continue to benefit over the medium term
from its promoters' extensive industry experience and its
project's strategic location in Nagpur (Maharashtra). The outlook
may be revised to 'Positive' if the firm manages to complete its
ongoing project within the expected time frame, with higher than
expected bookings leading to improvement in the financial risk
profile marked by liquidity. Conversely, the outlook may be
revised to 'Negative' in case of delay in the project or low
bookings, weakening the firm's financial risk profile,
particularly liquidity.
Established in 2013, RDM is engaged in residential real estate
development in Nagpur. The firm is constructing a single project,
Vrindavan, which is spread across 111 acres of land. RMD is
managed by Mr. Rajesh Agarwal and Mr. Sanjay Agarwal.
RATTAN LAL: CRISIL Assigns D Rating to INR195MM Term Loan
---------------------------------------------------------
CRISIL has revoked the suspension of its rating on the long-term
bank facilities of Rattan Lal Jindal Educational Trust (RJET), and
has assigned its 'CRISIL D' rating to the trust's facilities.
CRISIL had earlier, on November 23, 2014, suspended the ratings as
RJET had not provided the necessary information required for a
rating review. The trust has now shared the requisite information,
enabling CRISIL to assign a rating to the trust's bank facilities.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 195 CRISIL D (Assigned; Suspension
revoked)
The rating reflects RJET's delays in repayment of its term debt;
the delays were due to insufficient cash accruals because of the
start-up nature of the trust's operations.
RJET also has a weak financial risk profile, marked by high
gearing and weak debt protection metrics, and a short track record
of operations. Moreover, the trust is vulnerable to regulatory
risks associated with educational institutions. However, the trust
benefits from the established GD Goenka brand under which it
operates its educational institution, and the healthy prospects
for the education sector.
RJET was founded in 2009 by members of the Jindal family
comprising Mr. Hariram Gupta, his wife, Mrs. Santosh Gupta, son,
Mr. Yogesh Gupta, daughter-in-law, Mrs. Sonal Gupta, and daughter,
Ms. Usha Gupta. The trust operates the GD Goenka International
School under the GD Goenka School franchise; the school, based in
Sonepat (Haryana), is affiliated to the Central Board of Secondary
Education. RJET is also operating two play schools under the La
Petite brand of the GD Goenka School franchise, one in Kundli
(Himachal Pradesh) and the other in Preet Vihar (Delhi). RJET
started operations with its first batch of students in April 2012.
RJET reported a net surplus of INR0.8 million on net fee income of
INR39.9 million for 2013-14 (refers to financial year, April 1 to
March 31), against a net surplus of INR1.6 million on net fee
income of INR29.2 million for 2012-13.
SABITRI INDUSTRIES: CRISIL Reaffirms B Rating on INR345MM Loan
--------------------------------------------------------------
CRISIL rating on the long-term bank facilities of Sabitri
Industries Pvt Ltd (SIPL) continues to reflect SIPL's weak
financial risk profile, marked by high gearing and weak debt
protection metrics. This rating weakness is partially offset by
the extensive experience of SIPL's promoter in the rice milling
business.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 285 CRISIL B/Stable (Reaffirmed)
Proposed Cash
Credit Limit 80 CRISIL B/Stable (Reaffirmed)
Term Loan 345 CRISIL B/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that SIPL will continue to benefit over the medium
term from its promoter's extensive industry experience. The
outlook may be revised to 'Positive' in case of successful
stabilisation of operations leading to a significant increase in
the company's cash accruals along with gradual improvement in its
financial risk profile. Conversely, the outlook may be revised to
'Negative' in case of low offtake and profitability, resulting in
deterioration in SIPL's financial risk profile, particularly its
liquidity.
SIPL, incorporated in November 2009, commissioned a 37-tonne-per-
hour raw and par-boiled rice processing unit in Jajpur (Odisha) in
June 2014 and commenced commercial operations in October 2014. The
company is promoted by Mr. Dillip Kumar Agarwalla.
SANT RAM: ICRA Reaffirms B Rating on INR5cr LT Fund Based Loan
--------------------------------------------------------------
ICRA has reaffirmed its long term rating of [ICRA]B on the INR5.00
crore long term fund based limits of Sant Ram Rice & General
Mills.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Fund
Based Limits 5.00 [ICRA]B; (reaffirmed)
The rating reaffirmation takes into account the elevated gearing
of the firm due to large working capital requirements, which have
been primarily funded by working capital borrowings. Also, the low
value added nature of operations and the intensely competitive
nature of the rice milling industry have led to low profitability
margins. The low margins coupled with the high gearing have
resulted in weak coverage indicators as reflected in low interest
coverage of 1.24 times during FY 2013-14. However, the ratings
favourably take into account the extensive experience of the
promoters and their strong relationships with several customers
and suppliers, coupled with proximity of the mill to major rice
growing areas, which results in easy availability of paddy.
SRRGM was set up in 1988 by Mr. Shri Krishan and his family as a
partnership firm. The firm is engaged in the milling and trading
of rice (which includes both basmati and non basmati rice). It has
a plant at Cheeka (Haryana) with a milling capacity of 3 tonnes
per hour.
Recent Results
SRRGM has reported a net profit of INR0.02 crore on an operating
income of INR18.37 crore in FY 2013-14 as compared to a net profit
of INR0.00 crore on an operating income of INR20.75 crore in the
previous year.
SARTHAK ISPAT: ICRA Suspends B Rating on INR12.50cr Term Loan
-------------------------------------------------------------
ICRA has suspended the [ICRA]B rating assigned to the INR12.50
crore term loans and INR17.00 crore fund-based bank facilities of
Sarthak Ispat Private Limited. Also, ICRA has suspended the
[ICRA]A4 rating assigned to the INR0.50 crore non-fund based bank
facilities of SIPL. The suspension follows ICRA's inability to
carry out a rating surveillance in the absence of the requisite
information from the company.
SHANKAR RICE: ICRA Upgrades Rating on INR9.5cr Loan to B+
---------------------------------------------------------
ICRA has upgraded its long term rating on the INR9.50 crore
(enhanced from INR7.15 crore) fund based bank limits of Shankar
Rice Mill to [ICRA]B+ from [ICRA]B.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based Limits 9.50 [ICRA]B+; Upgraded
The rating upgrade is driven by an improvement in the firm's
working capital cycle, which has translated into improved credit
metrics. The firm's inventory levels have seen an improvement, to
22 days as on March 31, 2014 from 94 days, an year ago, this has
resulted in the firm's working capital intensity reducing to 22%
for FY2014 from 38% for the year ago period. Lower utilization of
working capital limits has led to improved gearing which improved
to 3.74x as on March 31, 2014 from 5.88x, an year ago; similarly
the firm's NCA/TD improved to 6.30% for FY2014 from 4.76%, an year
ago. The rating continues to derive support from the firm's long
track record of operations, extensive experience of the promoters
in the rice industry, proximity of the mill to major rice growing
area which results in easy availability of paddy, and stable
demand outlook, with rice being an important part of the staple
Indian diet. However, the rating concerns emanate from the small
scale of operations of the firm, which coupled with the low value
added nature of business and high competition in the industry, has
resulted in low profitability and weak debt coverage indicators.
The rating also takes into account the working capital intensive
nature of the rice milling business and agro climatic risks which
can affect the availability of paddy in adverse conditions.
Incorporated in 2008, SRM is a partnership firm engaged in milling
and processing of basmati and non basmati rice. The firm's plant
at Karnal, Haryana has a milling capacity of 3 metric tonnes/hour.
The firm has been promoted by Mr. Ashok Kumar, Mr. Shishan Kumar,
Mr. Shiv Charan Dass and Mr. Mangal Sain.
Recent Results
The firm reported a profit after tax (PAT) of INR0.11 crore on an
operating income of INR30.97 crore in FY2014 as against a PAT of
INR0.08 crore on an operating income of INR22.50 crore in the
previous year.
SHIV COTTON: ICRA Reaffirms B Rating on INR5cr Cash Credit
----------------------------------------------------------
ICRA has reaffirmed the long term rating of [ICRA]B to the INR5.00
crore cash credit facility and INR1.50 crore term loan facility of
Shiv Cotton Industries Tankara.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based-Cash Credit 5.00 [ICRA]B reaffirmed
Fund Based-Term Loan 1.50 [ICRA]B reaffirmed
The reaffirmation of the rating continues to factor in Shiv Cotton
Industries' (SCI) modest scale of operations and weak financial
position characterised by low profitability, leveraged capital
structure and debt coverage indicators. ICRA also takes note of
the highly competitive and fragmented industry structure with the
limited value additive nature of operations which leads to
pressure on profitability. The rating further incorporates the
vulnerability of margins to adverse movements in agricultural
produce prices as well as recent low cotton prices. This is also
due to reduced imports by China and sluggish demand from spinning
mills against anticipated high production. Also, being a
partnership firm, any substantial withdrawal by the partners can
have an adverse impact on the capital structure of the firm.
The rating, however, continues to factor in the favorable location
of the firm giving it easy access to high quality raw cotton. The
rating also considers the successful commissioning of ginning
operation in January 2014.
Incorporated in May 2013, Shiv Cotton Industries (SCI) is engaged
in the ginning and pressing of raw cotton. Four partners, namely,
Mr. Hiteshbhai Bhorania, Mr. Rameshbhai Aghera, Mr. Dilipbhai
Kalola and Mr. Virjibhai Ghetiya, manage the firm. Its
manufacturing unit is located in Tankara, Rajkot, Gujarat. It has
24 ginning machines and one pressing machine with an installed
capacity to produce 250 cotton bales per day (24 hours operation).
Recent Results
In FY14, the firm reported an operating income of INR20.64 crore
and a net profit of INR0.06 crore.
SHREE AVADHBIHARI: CRISIL Assigns B Rating to INR65MM Term Loan
---------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable/CRISIL A4' ratings to the
long-term bank facility of Shree Avadhbihari Agro Product Private
Limited (SAPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Rupee Term Loan 65 CRISIL B/Stable
Proposed Short Term
Bank Loan Facility 3 CRISIL A4
Bank Guarantee 1 CRISIL A4
Cash Credit 30 CRISIL B/Stable
The ratings reflect SAPL's weak financial risk profile marked by
high gearing and modest debt protection metrics, and small scale
of operations in a highly fragmented rice industry. These rating
weaknesses are partially offset by the extensive industry
experience of, and financial support from, SAPL's promoters.
Outlook: Stable
CRISIL believes that SAPL will continue to benefit over the medium
term from its promoters' extensive experience in the rice
industry. Its financial risk profile is, however, expected to
remain constrained due to high gearing and modest debt protection
metrics. The outlook may be revised to 'Positive' in case of
significant improvement in the company's financial risk profile,
due to capital infusion or improvement in the scale of operations.
Conversely, the outlook may be revised to 'Negative' in case of
deterioration in the SAPL's financial risk profile due to
significant increase in inventory, leading to large incremental
bank borrowings or in case of a debt-funded capital expenditure
programme.
SAPL, incorporated in 2014 by Mr. Nanda Kishore Agarwala and Mr.
Paban Kumar Agarwala, is engaged in business of rice milling and
rice shelling at its plant located in West Bengal. SAPL has an
installed capacity of producing 8 tonnes of rice per hour. SAPL
processes non-basmati rice and by products like bran, phuk,
bardana which are sold to both merchant exporters and domestic
traders.
SHREE GOVARDHAN: CRISIL Reaffirms B+ Rating on INR475MM Loan
------------------------------------------------------------
CRISIL's rating on the long-term bank facilities of Shree
Govardhan Cotgin Pvt Ltd (SGCPL) continues to reflect SGCPL's weak
financial risk profile, marked by a high gearing, a small net
worth, and weak debt protection metrics, small scale of operations
in the intensely competitive cotton industry, and vulnerability to
unfavorable changes in government policy. These rating weaknesses
are partially offset by its promoter's extensive industry
experience and financial support.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 475 CRISIL B+/Stable (Reaffirmed)
Term Loan 20 CRISIL B+/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that SGCPL will continue to benefit over the
medium term from the proximity of its operations to the cotton-
growing belt. CRISIL, however, also believes that the company's
financial risk profile will remain below average during the same
period because of low accruals and a highly leveraged capital
structure. The outlook may be revised to 'Positive' if SGCPL
significantly improves its capital structure either by equity
infusion or higher cash accruals. Conversely, the outlook may be
revised to 'Negative' if the firm's financial risk profile
deteriorates further because of increased working capital-related
debt or in case of change in government policy negatively
impacting its operations.
Update
For the year 2013-14 (refers to April 1st to march 31st), SGCPL's
turnover growth was flattish y-o-y at INR2020 million. as the
working capital finance was not tied up for funding the
incremental sales growth. Till June 2014, the company posted
turnover of INR550 million. reflecting the uptick in its overall
growth with the funds required for working capital tied up. Going
forward, the team expects the firm to maintain its the turnover
growth in the range of 15 to 20 per cent, although the turnover
growth continues to be is susceptible to the economic scenario and
govt. policies.
In the year 2013-14, SGCPL's profitability at operating level was
in line with our estimates at 2.5 per cent. Going forward the team
believes that the fragmented nature of industry will restrict the
company's bargaining power thus leading to similar low operating
margins range bound at 2.5 +/- 0.5 per cent. In the year 2013-14,
the company's working capital requirements were in lines with our
expectation with GCA days at 88 days vs. expected 84 days. The
company's inventory is in the range of 77 to 85 days over the past
3 years ended as on March 2014 and going forward the inventory
holdings are expected to stay close to 2013-14 levels over the
near to medium term.
Against this, the company gets almost low credit from its
suppliers which are mainly cotton farmers thereby increasing the
dependence on bank debt. However, due to its better working
capital management aided by better receivable management the
company was able to constrain its cash conversion cycle to 84 to
85 days thereby supporting the company's liquidity. As on March
31, 2014 the gearing of the company marginally reduced y-o-y to
~3.9 times on account of modest increase in its working capital
debt to the tune of INR4.5 million. with sales moderation coupled
with modest accruals. Over the medium term, the gearing is
expected to be close to 4.0 times on account of incremental debt
to service its working capital requirements vs. modest accruals.
Going forward, the financial risk profile is expected to be
constrained by its high gearing, weak debt protection metrics and
stretched liquidity.
Incorporated in 2006, SGCPL commenced manufacturing from April
2008. The company manufactures cotton bales, crude cottonseed oil,
and oil cakes at its facilities in Rajkot (Gujarat). It also
undertakes trading in cotton.
SHREE RAMESHWAR: CRISIL Reaffirms B Rating on INR40MM Cash Loan
---------------------------------------------------------------
CRISIL rating continues to reflect M/s. Shree Rameshwar Cotex
Industries (MSRCI's) modest scale of operations in a highly
fragmented industry and firm's exposure to intense competition and
susceptibility to change in government policies.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 40 CRISIL B/Stable (Reaffirmed)
Proposed Cash
Credit Limit 20 CRISIL B/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility 0.5 CRISIL B/Stable (Reaffirmed)
Term Loan 24.5 CRISIL B/Stable (Reaffirmed)
The rating also factor in the weak financial risk profile of the
firm, marked by high gearing and weak debt protection metrics.
These rating weaknesses are partially offset by the extensive
experience of the partners in the cotton industry and proximity of
the firm to the cotton-growing belt in Gujarat.
Outlook: Stable
CRISIL believes that MSRCI will benefit over the medium term on
the back of extensive industry experience of its partners. The
outlook maybe revised to 'Positive' if the firm reports
substantially higher than expected accruals, on the back of a
significant increase in its scale of operations, or if its
financial risk profile improves on the back of sizeable capital
infusion by partners. Conversely, the outlook maybe revised to
'Negative' if the firm's financial risk profile weakens, caused
most likely by an increase in its working capital requirements, or
a decline in cash accruals, or large debt-funded capital
expenditure, or sizeable capital withdrawal by its partners.
Update
MSRCI revenues were lower at INR60 million in 2013-14 on account
of late commencement of operations in February 2014 as against an
initial expectation of November 2013. The firm has recorded
revenues of around INR100 million in 2014-15 (till November 2014)
and CRISIL expects the firm to generate revenues around INR300
million in 2014-15. Operating profitability of the firm was low at
1.4% in 2013-14 owing to initial year of its operations; it
generated negligible accruals in 2013-14. CRISIL, however, expects
the firm to improve its operating profitability over the medium
term.
Gearing of the firm was high at 2.21 times as on 31st March 2014
owing to it having low net worth of INR29.3 million at the end of
2013-14. Debt protection metrics of the firm were weak with
interest coverage at 1 time and NCATD at 0.01 times in 2013-14
owing to low operating profitability. CRISIL expects the firm to
have high gearing over the medium term on the back of low
accretion to reserves and moderately working capital intensive
operations.
The firm has moderate working capital requirements, marked by a
GCA of around 75 days as on 31st March 2014. The firm's liquidity
is, however, partially supported by partners bringing-in unsecured
loans of INR11.3 million in 2013-14 resulting in moderate average
utilization of bank lines at around 84 per cent over the 12 months
ending October 2014. CRISIL expects the firm to generate accruals
of Rs31million in 2014-15 against a repayment obligation of
INR4.9-million in 2014-15.
MSRCI was set up as a partnership firm in 2013 and is currently
engaged in cotton ginning, pressing and oil milling. The firm
started its commercial operations from February 2014.The firm is
owned and managed by Mr. Anand Dharmashibhai Gadara and his family
members.
MSRCI on a provisional basis reported net loss of INR2.3 million
as against net sales of INR59.7 million in 2013-14.
SKYMAX CERAMIC: CRISIL Assigns B+ Rating to INR33.2MM Bank Loan
---------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to
the long-term bank facilities of Skymax Ceramic (SC).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 29.8 CRISIL B+/Stable
Proposed Long Term
Bank Loan Facility 33.2 CRISIL B+/Stable
Bank Guarantee 12.0 CRISIL A4
Cash Credit 25.0 CRISIL B+/Stable
The ratings reflect SC's modest scale of operationss in the highly
competitive ceramics industry, and its large working capital
requirements. These rating weaknesses are partially offset by the
extensive experience of SC's promoters in the ceramics industry
and the proximity of its manufacturing facilities to raw material
and labour sources.
Outlook: Stable
CRISIL believes that SC will continue to benefit over the medium
term from its promoters' extensive experience in the ceramic
industry. The outlook may be revised to 'Positive' if SC
significantly increases its scale of operations and profitability,
leading to larger-than-expected cash accruals and hence
improvement in its net worth. Conversely, the outlook maybe
revised to 'Negative' if the firm's accruals are lower than
expectations due to reduced profitability, or if it's financial
risk profile deteriorates, most likely because of a stretch in its
working capital cycle or substantial debt-funded capital
expenditure.
SC, incorporated in 2011, is promoted by the Morbi (Gujarat)-based
Mr. Ashokkumar Patel, Mr. Sunilkumar Patel, and Mr. Kantilal
Patel. The company is engaged in the manufacturing of ceramic
porcelain floor tiles with a production capacity of 5500 boxes per
day.
SPICEJET LTD: Sun Group Chief Maran Resigns From Board
------------------------------------------------------
The Times of India reports that Sun Group chief Kalanithi Maran,
his wife Kavery Kalanithi and confidante S Natrajhen have resigned
from the board of SpiceJet.
The low-cost carrier's board met on Jan. 30 and decided that Maran
and his Kal Airways will sell and transfer their entire 58.46%
stake to new owner Ajay Singh, TOI says.
According to the report, SpiceJet's registered office will be
shifted back to Gurgaon -- where Ajay Singh started the airline
-- from Chennai. The LCC's board also decided to issue equity
shares or any instrument convertible into equity shares for an
amount not exceeding INR1,500 crore, TOI relates.
About SpiceJet
SpiceJet Limited -- http://www.spicejet.com/-- is an India-based
low-budget air carrier. The Company operates daily flights
between major cities in India. The carrier is India's second-
biggest budget airline, after IndiGo.
As reported in the Troubled Company Reporter-Asia Pacific on
May 21, 2014, The Times of India said SpiceJet has posted its
highest ever annual loss of INR1,003.2 crore in the financial year
2013-14 up five times from INR191 crore in the previous fiscal.
As reported in the TCR-AP on Nov. 17, 2014, The Times of India
said auditors of financially struggling SpiceJet airlines have
cast 'significant' doubts on the ailing company's future. The
low-cost carrier incurred a loss of INR310 crore in the quarter
ended Sept. 30, 2014, down 45% from the loss of INR560 crore in
same period last fiscal.
"As of that date (Sept. 30, 2014) the company's total liabilities
exceed its total assets by INR1,459.7 crore. These conditions
. . . indicate the existence of a material uncertainty that may
cast significant doubt about the company's ability to continue as
auditors point out that SpiceJet had made no provision for
interest of INR7.5 crore. "Had the same been accounted for, the
net loss for the quarter ended Sept.30, 2014, would have been
higher by INR7.5 crore," the auditor said.
SREE GOPAL: ICRA Suspends B+ Rating on INR5cr Cash Credit
---------------------------------------------------------
ICRA has suspended [ICRA]B+ rating assigned to the INR5.00 crore,
cash credit facility of Sree Gopal Rice Mill. The suspension
follows ICRA's inability to carry out a rating surveillance in the
absence of the requisite information from the company.
TATA MOTORS: Fitch Affirms 'BB' IDR; Outlook Stable
---------------------------------------------------
Fitch Ratings has affirmed India-based Tata Motor Limited's (TML)
Long-Term foreign currency Issuer Default Rating (IDR) at 'BB'.
The Outlook is Stable.
KEY RATING DRIVERS
Strong Financial Profile: TML's consolidated financial profile
remains strong with consolidated leverage (net debt/ operating
EBITDA) of 0.6x in in the financial year ending March 31, 2014,
(FY14) (FY13: 1.09x). The company's net leverage excluding its
financing subsidiary - Tata Motors Finance Ltd (TMFL) - was at
0.2x (FY13: 0.4x). The strong financial profile is driven mainly
by the robust performance of TML's key subsidiary, Jaguar Land
Rover PLC (JLR, BB-/ Positive). The financial profile also
benefits from TML's good financial flexibility and JLR's liquidity
with a cash balance (GBP3.75bn as of 1HFY15) and undrawn committed
facilities (GBP1.3bn).
Fitch expects TML's consolidated profile to remain strong over the
medium term despite its large capex plans (FY14 Capex: INR 269bn).
The agency expects the capex to be funded largely from TML's
operational cash flows supported by the continuing sound
operations of JLR and improvement in its Indian business.
Furthermore, the company announced its rights issue plan, which if
successful will further strengthen the financial profile.
Robust Performance of JLR: Fitch expects JLR's sales and
profitability to continue to be robust over the medium term,
supported by a strong product pipeline and healthy global demand
for premium vehicles. This is in spite of a likely increase in
costs associated with the company's large capex and increasing
competition. JLR's EBITDA margin strengthened to 19.9% during
1HFY15 (1HFY14: 16.7%) supported by growth in volumes (13.8%) and
a richer product and geographic mix.
Indian Operations to Improve: Fitch expects TML's new product
launches, both in passenger car and commercial vehicles, to drive
volume growth in its Indian operations. In addition, lower fuel
prices, improving consumer sentiment and a likely reduction in
borrowing costs are likely to support improvement in demand growth
in passenger cars from FY16. Fitch also expects medium and heavy
commercial vehicles (M&HCV) volumes to grow in FY16 - supported
mainly by replacement demand.
TML's operations turned around in 3QFY15 as a result of positive
volume growth in its passenger car and M&HCV segments. The
company's volumes fell until 1HFY15, resulting in negative EBITDA
in FY14 and 1HFY15.
Linkages with Tata Group: The FC IDR of TML continues to benefit
from a one notch uplift on account of the potential support from
the Tata group. Fitch has also reviewed the ability of the Tata
group to provide support to TML and in the context of potential
group support, TML continues to benefit from the strategic
importance of TML to the group. Any weakening of linkages between
the group and TML, and/or the group's inability to provide support
is likely to affect the ratings negatively.
RATING SENSITIVITIES
Negative: Future developments that may collectively or
individually lead to negative rating actions include:
-- a weakening of linkages between the Tata Group and TML
-- consolidated financial leverage (excluding TML's auto
financing subsidiary Tata Motors Finance Limited) exceeding
2.0x on a sustained basis due to reduced sales or
profitability (at TML, JLR or both), or due to higher than
expected debt levels
Positive: Future developments that may collectively or
individually result in positive rating actions include:
-- strong growth in sales volume for TML (standalone) and JLR
through increased geographic and product diversification,
while maintaining strong profitability
TCL CABLES: ICRA Suspends B+ Rating on INR10cr Fund Based Loan
--------------------------------------------------------------
ICRA has suspended the long term rating of [ICRA] B+ assigned to
the INR15.00 crore bank facilities of TCL Cables Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based Limits 10.00 [ICRA]B+; Suspended
Non Fund Based Limits 5.00 [ICRA]B+; Suspended
The ratings were suspended due to lack of cooperation by the
client to provide any further information.
TCL Cables Limited was incorporated in the year 1979 and is
engaged in the manufacturing of LT (Low Tension) cable upto 1.1 KV
Grade, PVC/XLPE, which are used in the power, control and
instrumentation cable. The company deals mainly with various
private players. The company has its manufacturing plant located
at Rithala, New Delhi and is ISO 9001:2008 certified.
TURTLE LTD: CRISIL Suspends B+ Rating on INR400MM Cash Loan
-----------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of Turtle
Ltd (TL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 400 CRISIL B+/Stable
Letter of Credit 30 CRISIL A4
Proposed Cash Credit Limit 120 CRISIL B+/Stable
Rupee Term Loan 10 CRISIL B+/Stable
Standby Letter of Credit 40 CRISIL A4
The suspension of ratings is on account of non-cooperation by TL
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, TL is yet to
provide adequate information to enable CRISIL to assess TL's
ability to service its debt. The suspension reflects CRISIL's
inability to maintain a valid rating in the absence of adequate
information. CRISIL considers information availability risk as a
key credit factor in its rating process and non-sharing of
information as a first signal of possible credit distress, as
outlined in its criteria 'Information Availability Risk in Credit
Ratings'
Incorporated in 1992 as a public limited company, TL is promoted
by Mr. Sanjay Jhunjhunwala and Mr. Amit Ladsaria (nephew of Mr.
Jhunjhunwala). Future Venture India Ltd, a Future group company,
owns 26 per cent stake in TL. The companydesigns and manufactures
ready-made cotton menswear in India, Nepal, and the Middle East.
The company has two brands ' Turtle and LondonBridge.
UDASEE STAMPINGS: CRISIL Ups Rating on INR72.5MM Loan to B-
-----------------------------------------------------------
CRISIL has upgraded the ratings on the bank facilities of Udasee
Stampings Private Limited (USSPL; part of the Udasee group) to
'CRISIL B-/Stable/CRISIL A4' from 'CRISIL D/CRISIL D'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bill Discounting 20 CRISIL A4 (Upgraded from
'CRISIL D')
Cash Credit 72.5 CRISIL B-/Stable (Upgraded
from 'CRISIL D')
Letter of Credit 90 CRISIL A4 (Upgraded from
'CRISIL D')
Proposed Long Term 20 CRISIL B-/Stable (Upgraded
Bank Loan Facility from 'CRISIL D')
The rating upgrade is driven by Udasee group's improved liquidity
position marked by timely payment of letter of credit over the
past three months and expected improvement in cash accruals. The
improvement is driven by expected improvement in business risk
profile marked by expected improvement in operating income and
margin leading to sufficient cash accruals against debt
obligations over the medium term. However, CRISIL believes that
Udasee group's liquidity, though improved, will remain constrained
over the medium term because of modest profitability and high
working capital requirements.
CRISIL's ratings on the bank facilities of Udasee group continue
to reflect its weak financial risk profile, marked by high
gearing, weak debt protection metrics, and a modest net worth, and
is exposed to intense competition in the electrical laminations
segment for power transformers. However, the group continues to
benefit from the extensive industry experience of its promoters.
For arriving at its ratings, CRISIL has combined the business and
financial risk profiles of USSPL and its associate company, Regal
Transcore Laminations Pvt Ltd (RGTLPL). This is because the two
entities, together referred to as the Udasee group, have common
promoters and management, are in the same line of business, and
have strong operational linkages with each other.
Outlook: Stable
CRISIL believes that the Udasee group will continue to benefit
over the medium term from its established relationships with its
suppliers and customers. However, the group's financial risk
profile is expected to remain under pressure over the medium term
because of its high gearing and low margins resulting from its
large working capital requirements. The outlook may be revised to
'Positive' if the Udasee group's financial risk profile improves,
most likely driven by sizeable equity infusion or larger-than-
expected cash accruals. Conversely, the outlook may be revised to
'Negative' if the group's liquidity weakens further, most likely
because of increase in working capital requirements.
RGTLPL was established as a proprietary firm (Regal Laminator) in
1988 and was incorporated as a private limited company with its
current name in 1998. USSPL was incorporated in 1993. The two
companies are promoted and owned by the Udasi family of Jaipur.
The companies' plants are in Jaipur (Rajasthan).
The Udasee group manufactures electrical laminations for
transformers. The group primarily sells laminations to transformer
manufacturers, who are suppliers to state electricity boards.
ULTIMATE FASHION: CRISIL Reaffirms B+ Rating on INR15MM Bank Loan
-----------------------------------------------------------------
CRISIL's ratings on the bank facilities of Ultimate Fashion Maker
Ltd (UFML) continue to reflect its average financial risk profile,
marked by weak debt protection metrics and moderate net worth, on
account of regular withdrawals of capital by the promoters.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bill Purchase-
Discounting Facility 50 CRISIL A4 (Reaffirmed)
Letter of credit &
Bank Guarantee 30 CRISIL A4 (Reaffirmed)
Overdraft Facility 5 CRISIL A4 (Reaffirmed)
Packing Credit in
Foreign Currency 115 CRISIL A4 (Reaffirmed)
Proposed Long Term
Bank Loan Facility 15 CRISIL B+/Stable (Reaffirmed)
The ratings also factor in UFML's financial support to affiliates,
and large working capital requirements. These rating weaknesses
are partially offset by the company's moderate business risk
profile, supported by its established clientele and the extensive
experience of the promoters in the leather industry.
Outlook: Stable
CRISIL believes that UFML will continue to benefit over the medium
term from its established customer base and the extensive industry
experience of its promoters. The outlook may be revised to
'Positive' if significant improvement in revenue, profitability,
or working capital cycle leads to a stronger financial risk
profile, particularly liquidity, for UFML. Conversely, the outlook
may be revised to 'Negative' if slowdown in economy or intense
competition in the leather goods industry constrains UFML's cash
accruals substantially; if any large, debt-funded capex weakens
its capital structure; or if sizeable dividends weaken the
liquidity.
Incorporated in 1997, UFML is a closely held public company
founded by Mr. Gajinder Singh (managing director) and Mr. Nirmohan
Singh (director). UFML exports leather jackets and purses, and has
a manufacturing capacity of 130,000 pieces per annum. The company
exports to Europe and the United States.
=================
I N D O N E S I A
=================
MEDCO ENERGI: Moody's Withdraws B2 Corporate Family Rating
----------------------------------------------------------
Moody's Investors Service has withdrawn the B2 corporate family
rating of Medco Energi Internasional Tbk (P.T.) (Medco). The
rating outlook is stable at the time of its withdrawal.
Ratings Rationale
Moody's has withdrawn the rating for its own business reasons.
Established in 1980 and headquartered in Jakarta, Medco is
predominantly an oil and gas exploration and production (E&P)
company with additional operations in downstream oil and gas
activities, power generation and coal mining.
=========
J A P A N
=========
COSMO OIL: Moody's Withdraws Ba2 Issuer Rating
----------------------------------------------
Moody's Japan K.K. has withdrawn the Ba2 issuer rating (with
negative outlook) of Cosmo Oil Company, Ltd. for its business
reasons.
Ratings Rationale
Moody's has withdrawn the rating for its own business reasons.
=================
S I N G A P O R E
=================
MMI INTERNATIONAL: Fitch Affirms BB- IDR; Revises Outlook to Neg.
-----------------------------------------------------------------
Fitch has affirmed MMI International Ltd's (MMI) and its parent
Precision Capital Private Limited's (PCPL) Long-Term Foreign-
Currency Issuer Default Ratings (IDR) at 'BB-'. The Outlook has
been revised to Negative from Stable. Simultaneously, Fitch has
affirmed the Singapore-based company's senior secured debt class
rating at 'BB-'.
The change in the Outlook to Negative reflects our expectation
that EBITDA growth will be slower than previously thought due to
the modest recovery in the hard disk drive (HDD) market.
Consequently, MMI might breach our FFO-adjusted leverage level of
4.0x or the FFO interest coverage level of 3.0x, which may lead to
negative rating action.
KEY RATING DRIVERS
Flat FY15 Revenue: We expect MMI's revenue for the financial year
ending 30 June 2015 (FY15) to remain flat at USD700m and EBITDA to
decline to USD110m-115m (FY14: USD117m) because the loss of
premium pricing will offset the modest recovery in HDD quarterly
shipments. Although MMI reported seasonally stronger revenue in
1QFY15 of USD185m (+7.2% yoy), adjusted EBITDA was flat at USD30m,
which we believe indicates the onset of a slow earnings recovery.
Seagate Dependence: MMI faces high customer concentration risk due
to its heavy reliance on Seagate Technology Public Limited Company
(BBB-/Stable), which contributed 80% of its revenue in 1QFY15.
However, we believe the high interdependence between MMI and
Seagate, with MMI being Seagate's largest supplier for three key
HDD components, mitigates this risk. MMI's ratings factor in
moderate-to-high barriers to entry into the HDD component
manufacturing industry.
Stable HDD Competition: Fitch continues to expect the consolidated
HDD industry structure and a tightly managed supply chain to drive
demand-supply equilibrium and better pricing stability, with
Seagate and Western Digital controlling about 85% of the global
HDD market. An imminent HDD suppliers' consolidation could reduce
competition and drive market share gains for MMI as smaller
financially distressed suppliers seek M&A.
Risk From SSDs: Solid state drives (SSDs) represent a significant
long-term threat to MMI's business if they become the standard
medium for data storage. However, in the medium term, we expect
that HDD sales volumes to be protected by the growth in the
overall data storage market and a continuing substantial per-
gigabyte price differential between SSDs and HDDs.
Acquisition Risk: We believe MMI may have opportunities for
acquisitions as the component suppliers' market consolidates; in
2011 it acquired three small component makers. However, Fitch do
not expect large debt-funded acquisitions in light of its net
debt/EBITDA target of below 3.0x.
RATING SENSITIVITIES
Negative: Future developments that may, individually or
collectively, lead to a negative rating action include:
-- FFO-adjusted leverage of above 4.0x (FY14: 3.8x) on a
sustained basis
-- FFO interest coverage below 3.0x (FY14: 2.6x) on a
sustained basis
-- Demand for HDDs falling below our expectations due to
weaker global IT spending, a significant fall in cost per
gigabyte differential between SSDs and HDDs, or if Seagate
moves its production capacity towards SSDs
Positive: The rating Outlook could return to Stable, if EBITDA
expansion is better than expected resulting in:
-- FFO-adjusted leverage of below 4.0x on a sustained basis
-- FFO interest coverage above 3.0x on a sustained basis
FULL LIST OF RATING ACTIONS
MMI International Limited
Long-Term Foreign-Currency IDR affirmed at 'BB-'; Outlook revised
to Negative from Stable
Senior secured debt class rating affirmed at 'BB-'
8% senior secured USD300m notes due 2017 affirmed at 'BB-'
USD180m secured bank loan affirmed at 'BB-'
Precision Capital Private Limited
Long-Term Foreign-Currency IDR affirmed at 'BB-'; Outlook revised
to Negative from Stable
====================
S O U T H K O R E A
====================
HYUNDAI GROUP: Orix Picked as Preferred Buyer of Securities Unit
----------------------------------------------------------------
Yonhap News Agency reports that Japan's Orix Corp. has been picked
as the preferred bidder for a controlling stake in Hyundai
Securities Co., the fourth-largest brokerage firm by market cap,
financial sources said Jan. 30.
Earlier last week, Orix Corp. and South Korean private equity firm
Pinestreet had submitted their bids for a 36 percent stake in
Hyundai Securities, Yonhap relates.
According to the report, sources said the Korea Development Bank
(KDB), the lead manager for the deal, will allow Orix to conduct
due diligence on the brokerage for one month and complete the deal
before June.
Hit by a liquidity crisis, Hyundai Group had put up for sale a
25.9 percent stake in its brokerage arm, owned by its shipping
unit, Hyundai Merchant Marine Co., as part of its restructuring
program, the report discloses. The remaining 10 percent, held by
the Middle East-based investor Javez Partners, has also been on
the selling block.
The price tag for the deal is estimated at KRW600 billion (US$548
million), but Orix reportedly offered about KRW1 trillion,
according to Yonhap.
Hyundai Group twice postponed the sale, in July and October, in an
apparent bid to jack up the price, the report says.
The Japanese investor purchased a stake in Hyundai Logistics Co.,
a distribution affiliate of Hyundai Group, last year, the report
recalls.
As reported in the Troubled Company Reporter-Asia Pacific on
Jan. 8, 2014, The Korea Times said Hyundai Group's plan to
sell its core assets to secure cash is raising concerns due to
uncertainties in the sales process and economic situation.
According to the report, analysts said the plan may help address
the group's liquidity shortage to some extent, but may create
other problems by making key businesses unstable. The Korea Times
said such concerns were raised after Hyundai announced in December
2013 that it would secure over KRW3.3 trillion by selling all
three of its financial units -- Hyundai Securities, Hyundai
Savings Bank and Hyundai Asset Management -- in a bid to avoid a
liquidity crisis and lower its high debt ratio.
Hyundai, once South Korea's largest conglomerate, has shrunk to
become a minor player since the Asian financial crisis of 1997
prompted the spin-off of key auto and shipbuilding units.
SK HYNIX: Strong 2014 Results in Line with Moody's Ba1 Rating
-------------------------------------------------------------
Moody's Investors Service says that SK Hynix Inc.'s strong
operating results for 2014 are in line with the memory chip
maker's Ba1 rating and stable outlook.
"SK Hynix's strong operating results for 2014 were supported by
stable DRAM demand growth and a favorable pricing environment,"
says Annalisa DiChiara, a Moody's Vice President - Senior Analyst.
"Moreover, the company's balance sheet strengthened further in Q4
2014, turning into a near-net cash position with cash and cash
equivalents of KRW4.1 trillion against total debt of KRW4.2
trillion at the end of 2014," adds DiChiara.
Based on the company's announcement, SK Hynix's reported operating
margin improved to 30% in 2014 from 24% in 2013, evidencing the
continued benefits of the industry's oligopolistic nature, which
include stable supply and demand dynamics, and in turn, moderate
price declines.
The company reported year-on-year revenue growth of 21% in 2014,
supported by bit shipment growth of 34%. Furthermore, the cost
savings achieved from technological migration and efficient
product mix increased SK Hynix's profitability by 6% in 2014 as
measured by reported operating margin.
In terms of quarterly results, the company's reported operating
margin improved to 32% in Q4 2014 from 23% in Q4 2013 and 30% in
Q3 2014. Q4 2014 revenues grew by 53% year-on-year and 19%
quarter-on-quarter.
Although Moody's expects SK Hynix's revenue growth to slow in
2015, in line with industry forecasts, its operating margin should
remain strong in the mid-to-high 20% range in 2015.
Moody's also expects leading DRAM players to maintain a
disciplined approach to capacity additions which will continue to
support stable DRAM supply growth over the next 12 months.
Given SK Hynix's strong financial profile and Moody's expectation
of a stable operating performance going forward, the impact of the
company's newly announced dividend payout policy of KRW300 per
share, which translates to approximately 5% of its FYE2014 net
income can be absorbed within its current rating.
The industry will remain capital intensive and Moody's expect that
SK Hynix will incur capital expenditure of approximately KRW5-5.5
trillion in 2015 and 2016 which is likely to be funded out of cash
flow.
Still, we expect SK Hynix to maintain a prudent capital management
policy and strong liquidity profile. Specifically, Moody's expects
the company to maintain a cash balance in the KRW3.5-4.0 trillion
range, which will provide a financial buffer in the event of an
industry downturn.
While SK Hynix's financial metrics are strong for the rating
level, the rating also considers the inherent cyclicality of the
memory chip industry and the high level of capex required to
maintain its competitive edge and cost advantages.
Upward rating pressure over the near-term is unlikley, given the
recent upgrade in December 2014, but could arise over the longer -
term if SK Hynix significantly improves its position in the memory
market- in particular, in the NAND segment, diversifies its
customer base and products, and maintains stability of earnings
through cycles.
Credit metrics that would further support upgrade pressure include
sustained operating margins above 10% through the cycle, positive
free cash flow, and adjusted debt/EBITDA remaining below 1.0x,
over the course of a cycle.
Downward rating pressure could arise if SK Hynix's financial
metrics deteriorate owing to (1) a significant industry downturn;
(2) rapid commoditization of mobile DRAM; (3) significant erosion
of its market positions or delays in technological migrations; or
(4) changes in its investment and shareholder distribution
policies, such that its cash balance declines or results in
negative free cash flow.
Other specific financial metrics for a downgrade include operating
margin deteriorating to below 15%, adjusted FCF/debt turning
negative, cash balance deteriorating to below KRW2.5 trillion, or
adjusted debt/EBITDA increasing above 2x.
In addition, an adverse change in the relationship between SK
Hynix and SKT could result in a negative rating action.
The principal methodology used in this rating was Global
Semiconductor Industry Methodology published in December 2012.
SK Hynix Inc, a Korea-based company, is engaged in the design,
manufacture, and sale of memory chips, such as DRAM and NAND flash
memory. It is 20.07%-owned by SK Telecom Co Ltd.
===========
T A I W A N
===========
JIH SUN: Fitch Publishes LT Rating on TWD2.5BB Bonds at BBB(twn)
----------------------------------------------------------------
Fitch Ratings has published the National Long-Term Rating on
Taiwan-based Jih Sun International Bank's (JSIB; BB+/A-
(twn)/Stable) TWD2.5bn subordinated unsecured bonds of 'BBB(twn)'.
The bond carries a fixed coupon rate of 2.2% and matures on 30
January 2022. The proceeds, which qualify as Taiwanese Basel III
Tier 2 (B3T2) capital, will be used to increase its
capitalisation.
KEY RATING DRIVERS - Debt Rating
Fitch typically rates Taiwan's B3T2 debt two notches below the
issuer's anchor rating, comprising zero notching for non-
performance risk and two notches for loss severity. Wider
notching than Fitch's base case of one notch reflects the poor
recovery prospects for Taiwanese B3T2 debt at the point of non-
viability or government receivership. Taiwan's authorities would
only move a bank into insolvency administration when it reaches a
very low capital level or a 2% capital adequacy ratio, reducing
the recovery prospects for B3T2 debt.
In JSIB's case, Fitch notches its B3T2 note from its National
Long-Term Rating, which is aligned with the Issuer Default Rating
(IDR) of its parent Jih Sun Financial Holding (JSFH; BB+/A-
(twn)/Stable). This reflects JSIB's status as core subsidiary of
the group, as well as the obligatory support from JSFH under
Taiwan's Financial Holding Company Act. Such parental support can
and will effectively neutralise the non-performance risk of a
subsidiary bank's subordinated debts.
RATING SENSITIVITIES - Debt Rating
Any change to the National Long-Term Rating of JSIB is likely to
trigger a similar move in its debt ratings. Any rating action on
JFHC could trigger a similar rating action on JSIB's IDRs and
National Ratings.
The other ratings on JSIB are unchanged and are:
Long-Term IDR of 'BB+'; Stable Outlook
Short-Term IDR of 'B'
National Long-Term Rating of 'A-(twn)'; Stable Outlook
National Short-Term Rating of 'F2(twn)'
Viability Rating of 'bb'
Subordinated debt National Long-Term Rating of 'BBB+(twn)'
*********
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.
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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 2015. 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
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TCR-AP subscription rate is US$775 for 6 months delivered via e-
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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 ***