/raid1/www/Hosts/bankrupt/TCRAP_Public/150506.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Wednesday, May 6, 2015, Vol. 18, No. 088
Headlines
A U S T R A L I A
ABOUT CONCRETE: First Creditors' Meeting Set For May 13
DOUGLAS AEROSPACE: First Creditors' Meeting Set For May 12
KEN HART: ASIC Cancels License For Failing to File Annual Reports
PLANET PLATINUM: Collapses Into Voluntary Administration
REED CONSTRUCTIONS: ASIC Disqualifies Former Directors
C H I N A
CHINA LESSO: Moody's Affirms Ba2 CFR; Outlook Revised to Positive
JINGRUI HOLDINGS: Fitch Gives Final 'B' Rating to 2018 Notes
SOUND GLOBAL: Faces Probe Over Possible Securities Laws Breaches
SOUND GLOBAL: Auditors Find Cash Shortfall
I N D I A
AAMODA BROADCASTING: CRISIL Ups Rating on INR86.7MM Loan to B-
AAMODA PUBLICATIONS: CRISIL Ups Rating on INR210MM Loan to B-
AMAR AGRO: ICRA Assigns 'B' Rating to INR2.97cr Term Loan
AMBITION MICA: CRISIL Suspends B+ Rating on INR46.7MM Term Loan
ANANGOOR TEXTILE: CRISIL Ups Rating on INR364.5MM LT Loan to B
AZIZ ENTERPRISES: ICRA Reaffirms 'B' Rating on INR5cr Cash Loan
BRITTO TIMBERS: CRISIL Assigns B Rating to INR10MM Cash Loan
BSCC INFRASTRUCTURE: CRISIL Reaffirms B+ Rating on INR76.9MM Loan
CENTRAL HOTELS: CRISIL Suspends 'C' Rating on INR52.5MM Term Loan
CHARIOT INTERNATIONAL: CRISIL Reaffirms B+ Rating on INR8MM Loan
CREATIVE TEXTURE: CRISIL Suspends B Rating on INR61.4MM Loan
DIVYA DISTRIBUTORS: CRISIL Suspends B+ Rating on INR60MM Loan
GEMINI STUDIOS: CRISIL Suspends D Rating on INR193.6MM Term Loan
GUPTA SYNTEX: CRISIL Assigns B+ Rating to INR88M Term Loan
JATIN & COMPANY: CRISIL Assigns B- Rating to INR1.6MM Loan
KILPEST INDIA: CRISIL Suspends B+ Rating on INR42.5MM Cash Loan
LANCO MANDAKINI: CRISIL Suspends 'D' Rating on INR4.16BB Loan
LANCO VIDARBHA: CRISIL Suspends D Rating on INR55.49BB Loan
LAXMI BUILDERS: CRISIL Reaffirms B Rating on INR30MM Cash Loan
LUSTRE ENGINEERING: CRISIL Suspends D Rating on INR50MM Loan
M R AGRO: ICRA Suspends B- Rating on INR2.40cr Fund Based Loan
MAGADH INDUSTRIES: ICRA Assigns B+ Rating to INR111cr Cash Loan
MAGADH IRON: ICRA Assigns B+ Rating to INR30cr Cash Loan
MAHESH EXTRUSIONS: CRISIL Reaffirms B- Rating on INR59MM Loan
MANGESH ENTERPRISES: CRISIL Suspends D Rating on INR75MM Loan
MEENAL ENTERPRISES: CRISIL Suspends 'D' Rating on INR80MM Loan
MEENAL TRADING: CRISIL Suspends 'D' Rating on INR70MM Loan
NIRMALA CONSTRUCTIONS: ICRA Ups Rating on INR4cr LT Loan to BB-
P.A.S. COTTON: ICRA Reaffirms D Rating on INR6.89cr Term Loan
PADMABHUSHAN KRANTIVEER: ICRA Reaffirms B Rating on INR220cr Loan
PELENA TRADING: CRISIL Suspends 'D' Rating on INR75MM Bank Loan
PLANTRICH AGRI: CRISIL Puts B+ Rating on INR10MM Cash Loan
RADHABALLABH SILK: ICRA Cuts Rating on INR4cr LT Loan to B-
S.B EQUIPMENTS: ICRA Suspends B+ Rating on INR6cr Fund Based Loan
S.R. EDUCATIONAL: CRISIL Rates INR58.5MM Term Loan at 'B'
SAGAR INDUSTRIES: ICRA Reaffirms B+ Rating on INR14.70cr Loan
SAHARA GROUP: Sebi Makes Fresh Bid to Find Investors For Refunds
SAKTHI STEEL: CRISIL Reaffirms B+ Rating on INR100MM Cash Loan
SATNAM PSYLLIUM: ICRA Suspends B+ Rating on INR3cr Cash Loan
SILIGURI BUILDERS: ICRA Withdraws B Rating on INR7cr Loan
STRESCON INDUSTRIES: CRISIL Ups Rating on INR72.4MM Loan to B+
SUN ENTERPRISE: ICRA Suspends B+ Rating on INR5cr Cash Loan
SUN PSYLLIUM: ICRA Suspends B+ Rating on INR5.0cr Cash Loan
SUPER PSYLLIUM: ICRA Suspends B+ Rating on INR3cr Cash Credit
TAURIAN INFRASTRUCTURE: CRISIL Suspends D Rating on INR180MM Loan
TRIVIKRAM TOBACCO: CRISIL Suspends B Rating on INR100MM Cash Loan
V.P.M. SANKAR: CRISIL Cuts Rating on INR65MM Cash Loan to B
VEL MURUGAN: CRISIL Cuts Rating on INR135MM Foreign LOC to D
VEL MURUGAN: CRISIL Cuts Rating on INR100MM Foreign LOC to 'D'
VIJAYASRI ORGANICS: CRISIL Ups Rating on INR230.1MM LT Loan to B+
I N D O N E S I A
KAWASAN INDUSTRI: Fitch Gives Final B+ Rating on 2019 Notes
J A P A N
TOKYO ELECTRIC: Moody's Affirms 'Ba3' CFR, Outlook Negative
P A K I S T A N
PAKISTAN: Moody's Says External Liquidity Position Strengthens
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A U S T R A L I A
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ABOUT CONCRETE: First Creditors' Meeting Set For May 13
-------------------------------------------------------
Blair Pleash & Anne-Marie Barley of Hall Chadwick were appointed
as administrators of About Concrete Constructions Pty Ltd on May
1, 2015.
A first meeting of the creditors of the Company will be held at
the Boardroom, Service Corp Intelligent Offices, Level 15,
Corporate Centre One, 2 Corporate Court, in Bundall, Queensland,
on May 13, 2015, at 10:00 a.m.
DOUGLAS AEROSPACE: First Creditors' Meeting Set For May 12
----------------------------------------------------------
A H J Wily of Armstrong Wily was appointed as administrator of
Douglas Aerospace Pty Ltd, formerly trading as Douglas Aviation
(Yarrrawonga) Pty Ltd, on May 4, 2015.
A first meeting of the creditors of the Company will be held at
Armstrong Wily, Chartered Accountants, Level 5, 75 Castlereagh
Street, in Sydney, on May 12, 2015, at 10:00 a.m.
KEN HART: ASIC Cancels License For Failing to File Annual Reports
-----------------------------------------------------------------
The Australian Securities and Investments Commission has cancelled
the Australian financial services (AFS) licences of four licensees
that failed to lodge audited annual statements.
These cancellations are the result of ASIC's most recent proactive
review of the conduct of 14 AFS licensees operating in the
financial advice industry that had failed to lodge their audited
annual statements.
ASIC first announced its review of AFS licences in July 2014.
As part of this most recent review, in addition to the
cancellations, ASIC has:
* suspended one AFS licence for failing to lodge audited
annual statements until the outstanding documents were
lodged
* achieved voluntary compliance by seven AFS licensees who
have lodged all outstanding documents, and
* prompted two entities to voluntarily cancel their AFS
licences because they are no longer operating a financial
services business.
The requirement to lodge annual audited accounts is an important
one. Through it, the licensee can demonstrate it has adequate
financial resources to provide the services covered by its AFS
licence and to conduct its business in compliance with the
Corporations Act.
Deputy Chairman Peter Kell said, 'In our experience, a licensee's
failure to comply with reporting obligations can indicate a poor
compliance culture.
'After our last review, ASIC warned licensees that their failure
to lodge audited annual statements may result in the cancellation
or suspension of their AFS licences and we are disappointed that
some licensees do not seem to be heeding this message.
'Be clear, ASIC will continue to contact AFS licensees who have
not lodged audited financial statements and take action where they
fail to lodge these statements,' Mr Kell said.
ASIC has cancelled four AFS licences and suspended one for failing
to comply with the financial services laws by:
* failing to lodge with ASIC its annual profit and loss
statement and balance sheet, together with an auditor's
report for each outstanding year, and
* failing to advise ASIC in writing, within 10 business days,
of becoming aware of this significant breach.
The cancelled and suspended licensees are:
-- Ken Hart Insurance Brokers Pty Ltd Pty Ltd
(AFS Licence 253565)
-- McDouall Stuart Corporate Finance Pty Limited
(AFS Licence 282131)
-- Marshall Lawrence Pty Ltd (AFS Licence 275471)
-- Green Stride Investment Management Pty Ltd
(AFS Licence 408153), and
-- Navigate Funds Management Pty Ltd (suspended Dec. 23, 2014
to Feb. 27, 2015) (AFS Licence 299940).
PLANET PLATINUM: Collapses Into Voluntary Administration
--------------------------------------------------------
Kirsten Robb at SmartCompany reports that Planet Platinum Limited,
owner of Melbourne strip club Showgirls Bar 20 located on the
city's infamous King Street, appointed Gideon Rathner from Lowe
Lippmann as administrator on May 4.
The company, which describes its business as providing "sexually
explicit entertainment", also owns and operates Elsternwick
brothel, The Daily Planet.
According to the report, the appointment of administrators follows
a move by the Australian Securities and Investment Commission to
apply in the Supreme Court of Victoria to wind up the business.
SmartCompany says ASIC had alleged Planet Platinum had been
involved in multiple contraventions of corporations' legislation
and said it was concerned that the company is not being properly
managed. The matter will be heard before the court on May 29.
Planet Platinum listed on the ASX in May 2003 but has been
suspended from trading since 2013. Since then, its reports to the
ASX have been few and far between, the report relays.
Its last financial reports from June 2013 show the business had
revenue of AUD4.2 million, the report discloses.
SmartCompany says Planet Platinum's chief executive officer John
Trimble, nephew of well-known organised crime boss Bob Trimbole,
is one of three directors of the company, the minimum number
required by an ASX-listed company.
The first meeting of creditors will be held in Melbourne on
May 13, the report notes.
Australia-based Planet Platinum Limited (ASX:PPN) --
http://www.planetplatinum.com.au/-- engages in hospitality and
entertainment business. The Company operates through two segments:
Hospitality and entertainment segment and the Rental segment. The
Hospitality and entertainment segment operates in the hospitality
and entertainment sector, principally through its Bar 20 operation
in Melbourne. Its principal revenues are from beverages,
admittance, entertainment and commissions. The Rental segment
collects rental proceeds from its property in Horne Street,
Elsternwick. The Company's operations are the day-to-day business
of Showgirls Bar 20 at 46 King Street, Melbourne; the maintaining
of rental property at Horne Street, Elsternwick, and the
evaluation of opportunities for the expansion of the company's
hospitality, property and adult entertainment activities.
REED CONSTRUCTIONS: ASIC Disqualifies Former Directors
------------------------------------------------------
The Australian Securities and Investments Commission has
disqualified Mr Geoffrey Vere Reed and Mr Derry Bernard Hill, both
of Sydney from managing corporations. Mr Reed is disqualified for
three years and two months and Mr Hill is disqualified for one
year. Mr Reed has already been disqualified for 14 months by
reason of entering into a personal insolvency agreement. The
disqualification follows an ASIC investigation which found Mr Reed
and Mr Hill had breached their duties as directors.
Mr Reed was a director of Reed Constructions Australia Pty Limited
(RCA), as well as a number of other entities, including RST
Nominees Pty Limited (RST). Mr Reed was a director of RCA from
August 21, 1987 to May 21, 2014. Mr Hill was a director of RCA
between July 16, 1998 to February 24, 2012. RCA went into
administration on June 15, 2012 and into liquidation on July 9,
2012.
ASIC's investigation found Messrs. Reed and Hill failed to
exercise their powers and discharge their duties as directors of
RCA with the degree of care and diligence required. ASIC found
that they:
* failed to ensure RCA held retention monies in a separate
trust account, as required by a NSW Government contract;
* permitted RCA to make false statutory declarations to the
NSW Department of Roads and Maritime Services representing
that RCA had complied with its contractual obligations in
relation to security of payment of employees and
subcontractors;
* permitted RCA to use cash for purposes other than paying
employee entitlements and tax.
In addition, ASIC found Mr Reed had also:
* failed to ensure RCA dealt with trust monies in accordance
with its contractual obligations;
* caused RCA funds to be paid to a related entity during a
period in which there was reason to suspect the company was
insolvent.
In relation to RST, ASIC's investigation found Mr Reed failed to
exercise his powers and discharge his duties as a director with
the degree of care and diligence required.
ASIC Commissioner John Price said, "Directors have a
responsibility to manage the financial affairs of their company in
accordance with the law. As this case shows, directors who cause
or permit their company to breach legal obligations can face
significant consequences."
Mr Reed and Mr Hill have the right to appeal to the Administrative
Appeals Tribunal for a review of ASIC's decision.
Background
In 2008 RCA secured major contracts with the NSW Government
including contracts to the value of approximately AUD380 million
with the NSW Government Department of Education and Communities.
These were for building projects across 335 NSW schools part of
the Federal Government's 'Building the Education revolution'
program and contracts with the NSW Government Department of Roads
and Maritime Services to the value of approximately
AUD230 million.
The contracts required RCA to use the NSW Government's GC21
subcontract for the purpose of engaging its subcontractors.
RCA was wound up with an estimated deficiency of AUD183 million.
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C H I N A
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CHINA LESSO: Moody's Affirms Ba2 CFR; Outlook Revised to Positive
-----------------------------------------------------------------
Moody's Investors Service has changed to positive from stable the
outlook on China Lesso Group Holdings Limited's Ba2 corporate
family rating.
At the same time, Moody's has affirmed the company's Ba2 corporate
family rating.
"The positive outlook reflects China Lesso's sound track record of
execution and our expectation that its financial profile will
likely remain strong over the next few years," says Franco Leung,
a Moody's Vice President and Senior Analyst.
Despite a weak property market in China, China Lesso delivered
robust revenue growth to RMB14.8 billion in 2014 -- an approximate
13.4% year-on-year increase.
In addition to the high sales growth, the company improved its
geographic diversification, with Southern region contributing only
58% of revenue in 2014, down from about 70% in 2009.
Moody's expects the company to achieve moderate sales growth in
2015 against the backdrop of China's slowing economy, but its
adjusted operating margin should remain robust at about 13%,
underpinned by its leading market position.
At the same time, the company has prudently managed its debt
leverage. China Lesso has primarily been using internally
generated operating cash flows to fund its ongoing capital
expenditure requirement over the past 3-4 years.
As a result, its debt leverage -- as measured by adjusted
debt/EBITDA -- remained low at 1.0x-1.3x in 2011-2014, and is
expected to stay at a similar level over the next 1-2 years.
The company has also proactively managed its capital structure and
costs of capital. The redemption of its senior notes in 2014 will
help it lower its average interest cost. At the same time, it
strengthened its offshore bank financing by raising syndicated
bank loans in 2014.
"The change in outlook also considers China Lesso's improved
liquidity position, which provides significant buffers against the
persistent weakness in the property market, one of its key end-
markets," adds Leung, who is also the Lead Analyst for China
Lesso.
China Lesso's liquidity profile has improved, as reflected by its
cash and marketable securities at around 2.2x its short-term debt
ratio at end-2014, compared with about 1.4x at end-2013. This
indicates the company's conservative liquidity management and good
controls over working capital requirements.
The rating would be upgraded if China Lesso (1) maintains its
overall utilization rates; (2) achieves stable sales growth while
maintaining its profitability levels, with its operating margin
exceeding 12%; and (3) maintains its strong credit metrics, such
that adjusted debt/EBITDA remains below 1.5x.
On the other hand, the rating outlook could return to stable if
China Lesso's financial position weakens, such that adjusted
debt/EBITDA exceeds 1.5x and its operating margin falls below 12%,
resulting from; (1) a material weakening in demand or its market
position; or (2) more aggressive debt-funded expansions or
dividend payout.
The principal methodology used in this rating was Global
Manufacturing Companies published in July 2014.
Founded in 1996 and listed on the Hong Kong Stock Exchange in June
2010, China Lesso Group Holdings Limited is one of the largest
plastic pipe and pipe fitting manufacturers in China. At end-2014,
it had 20 production facilities in 14 regions. The company's
products are widely used in fields including water supply,
drainage, power supply and telecommunications, gas supply,
agriculture, floor heating, fire prevention and interior
decoration.
JINGRUI HOLDINGS: Fitch Gives Final 'B' Rating to 2018 Notes
------------------------------------------------------------
Fitch Ratings has assigned Chinese homebuilder Jingrui Holdings
Limited's (Jingrui; B/Stable) USD150 m 13.25% senior notes due
2018 a final rating of 'B' and Recovery Rating of 'RR4'.
The notes are rated at the same level as Jingrui's senior
unsecured rating because they constitute direct and senior
unsecured obligations of the company. The assignment of the final
rating follows the receipt of documents conforming to information
already received and the final rating is in line with the expected
rating assigned on 23 Apr 2015.
KEY RATING DRIVERS
Margin to Remain Under Pressure: Fitch expects Jingrui's EBITDA
margin to remain under pressure in 2015. Jingrui's adjusted EBITDA
margin was unchanged at 17% in 2014 from 2013. However, the
average selling price (ASP) of contracted sales, a large part of
which are pre-sales of uncompleted properties, dropped about 7% in
2014 to CNY9,210 per sqm, due to a bigger proportion of lower-
priced projects as well as the market downturn in 2014. The pre-
sales price drop due to the market downturn will likely affect the
profit margin of properties to be delivered in 2015, but we expect
the margin to recover from 2016 as the sector sentiment improves.
High Leverage to Persist: Jingrui's leverage, measured by net debt
over adjusted inventory, dropped slightly to 43% at end-2014 from
45% at end-2013, mainly because the company halted land purchases
from the second quarter of 2014. However, the company restarted
its land acquisitions in 2015 and estimated its land premium in
2015 to be CNY4.5bn, which is about 45% of its full-year
contracted sales target. While Jingrui plans for its project level
equity partner to shoulder around CNY1.0bn of the land premium,
Fitch believes its expansion will drive leverage higher but
expects it to remain below 60% in the next 12 months.
Refocus on Higher-tier Cities: Jingrui plans to focus its business
on first- and second-tier cities within its current markets, and
sell down inventory in third-tier cities. The more resilient
demand in higher-tier cities could improve the ASP of contracted
sales and the profit margin. However, we expect the margin
improvements to be mild given the fierce competition in its target
cities such as Shanghai, Hangzhou and Chongqing.
Tight but Sustainable Liquidity: Jingrui's liquidity position is
tight as its short-term debt increased 64% to CNY5.1bn at end-
2014. It completed a HKD128m (CNY102m) rights issue in the fourth
quarter of 2014, which improved the company's cash position. Fitch
believes Jingrui's total cash of CNY4.4bn and undrawn credit
facilities of CNY5.1bn at end-2014 are sufficient to cover its
short-term debt maturing in 2015.
KEY ASSUMPTIONS
Fitch's key assumptions within our rating case for the issuer
include:
-- Land premium of CNY4.5bn in 2015 with higher per sqm land
costs due to the higher-tier city focus
-- Contracted sales are estimated based on properties
available for sale in 2015, and the sell-through ratio
-- The company's ASP of contracted sales to recover from 2014
levels and rise slightly in 2015 for comparable projects
-- Jingrui to maintain its fast-churn and high cash-flow
turnover business model
RATING SENSITIVITIES
Negative: Future developments that may, individually or
collectively, lead to negative rating action include:
-- Net debt/ adjusted inventory sustained above 60% (end 2014:
43%)
-- EBITDA margin sustained below 15% (2014: 17%)
-- Contracted sales/total debt sustained below 1.0x (2014: 0.9x)
Positive: Future developments that may collectively lead to
positive rating actions include:
-- Net debt/adjusted inventory sustained below 40%
-- EBITDA margin sustained above 18%
-- Maintaining its fast churn-out model, and contracted
sales/total debt is sustained at over 1.3x
SOUND GLOBAL: Faces Probe Over Possible Securities Laws Breaches
----------------------------------------------------------------
An investigation on behalf of investors of Sound Global shares
over potential securities laws violations by Sound Global and
certain of its directors and officers in connection certain
financial statements was announced.
The investigation by a law firm focuses on possible claims on
behalf of purchasers of the securities of Sound Global concerning
whether a series of statements by Sound Global regarding its
business, its prospects and its operations were materially false
and misleading at the time they were made.
Sound Global reported that its annual Total Revenue rose from
approximately $427 million in 2012 to approximately $505 million
in 2013 while its respective Net Income declined from $68.78
million in 2012 to $68.1 million in 2013.
On March 16, 2014, an article was published stating that Sound
Global disclosed in a regulatory filing that the Company "may fail
to file its 2014 annual report by the end of April, potentially
contravening listing rules," and that Sound Global stated it
"needs more time to prepare information required for auditors."
Shares of Sound Global closed on April 1, 2015 at $0.95 per share.
Those who purchased shares of Sound Global have certain options
and should contact the Shareholders Foundation:
Shareholders Foundation, Inc.
Michael Daniels
3111 Camino Del Rio North - Suite 423
92108 San Diego
Phone: +1-(858)-779-1554
Fax: +1-(858)-605-5739
mail@shareholdersfoundation.com
About Sound Global
Sound Global Limited provides turnkey water and wastewater
treatment solutions in China. The company was listed on the
Hong Kong Stock Exchange in 2010 and was founded by Mr. Wen Yibo.
As reported in the Troubled Company Reporter-Asia Pacific on
May 4, 2015, Moody's Investors Service downgraded Sound Global
Limited's corporate family rating to Caa2 from Caa1 and senior
unsecured bond rating to Caa3 from Caa2. The ratings outlook is
negative.
The downgrade actions follow the company's announcement that (1)
its external auditor has identified potential audit issues, which
are holding up the completion of the company's audited 2014 annual
results; (2) its board of directors has resolved to set up an
independent review committee and considers engaging independent
forensic accountants to conduct an investigation; and (3) an
independent non-executive director -- who was the chairman of
audit committee and nomination committee and a member of
remuneration committee of the company -- has resigned.
"The downgrade reflects Moody's concern that the company's default
risk on its offshore bonds will increase in the near term," says
Chenyi Lu, a Moody's Vice President and Senior Analyst.
Given the potential audit issues, Moody's believes that there is
high probability that the company may not publish audited 2014
financial statements in the next 30 days. This places the company
at high risk of not complying with the senior unsecured notes'
requirement of providing audited financial statements within 120
days from fiscal year end. Such non-compliance could trigger an
event of default and an acceleration of repayment of the $150
million senior unsecured notes due August 2017.
The TCR-AP also reported on May 4, 2015, that Standard & Poor's
Ratings Services said that it had lowered its long-term corporate
credit rating on Sound Global Ltd. to 'CCC' from 'B'. At the same
time, S&P lowered the issue rating on the company's senior
unsecured notes to 'CCC-' from 'B-'. S&P also lowered its long-
term Greater China regional scale ratings on the company to
'cnCCC' from 'cnBB-' and on the notes to 'cnCCC-' from 'cnB'. In
addition, S&P placed all the ratings on CreditWatchwith negative
implications.
SOUND GLOBAL: Auditors Find Cash Shortfall
------------------------------------------
Lianting Tu at Bloomberg News reports that Sound Global Ltd.
slumped in the bond market after saying auditors had identified a
cash shortfall and that it would miss a promised filing deadline.
Its $150 million of 11.875 percent 2017 securities plunged 13.6
cents on the dollar to 72 cents as of 5:57 p.m., on April 30, in
Hong Kong, according to prices compiled by Bloomberg. The notes
have slid from this year's high of 107.8 cents in February.
Auditors found a discrepancy of about CNY2 billion ($323 million)
between Sound Global's bank and book cash balances as of Dec. 31
while working on its 2014 earnings, Bloomberg relates citing
company statement on April 29.
Sound Global was accused of accounting irregularities by Emerson
Analytics Co., an independent research group, in February, the
report recalls.
"We have been very negative on the company after the alleged
accounting irregularities, compounded by the resignation of the
chairman of the audit committee post the audit issue," wrote Trung
Nguyen, a credit analyst at Lucror Analytics, a Singapore-based
independent credit researcher, Bloomberg relays.
According to Bloomberg, Sound Global said on March 31 that
independent non-executive director Wong See Meng, who was also the
chairman of the audit committee, had resigned on March 26. The
auditors reported their findings to Singapore's Ministry of
Finance, Sound Global said in the statement on April 29.
Assuming the auditors will resume work after the final report is
issued, Sound Global expects to publish 2014 earnings in late
June, according to the statement obtained by Bloomberg.
Wen Haifei, an investor relations official at the company, said
Sound Global will have violated the "provision of financial
statements and reports" covenant on its 2017 notes if it doesn't
file the annual results by April 30, Bloomberg reports.
If bondholders with over 25 percent of the securities issue a
written notice to the bond trustee after April 30, the company
will have 30 days from that point to cure the covenant breach to
avoid a technical default. At present, less than 25 percent of
bondholders want to issue a notice, Wen, as cited by Bloomberg,
said.
Sound Global said the company's independent review committee will
hire a professional corporate-investigation firm early this week
to look into the matter, probably returning a final report by late
May.
The company's shares, which were suspended in March, will remain
so until further notice, it said, Bloomberg adds.
About Sound Global
Sound Global Limited provides turnkey water and wastewater
treatment solutions in China. The company was listed on the
Hong Kong Stock Exchange in 2010 and was founded by Mr. Wen Yibo.
As reported in the Troubled Company Reporter-Asia Pacific on
May 4, 2015, Moody's Investors Service downgraded Sound Global
Limited's corporate family rating to Caa2 from Caa1 and senior
unsecured bond rating to Caa3 from Caa2. The ratings outlook is
negative.
The downgrade actions follow the company's announcement that (1)
its external auditor has identified potential audit issues, which
are holding up the completion of the company's audited 2014 annual
results; (2) its board of directors has resolved to set up an
independent review committee and considers engaging independent
forensic accountants to conduct an investigation; and (3) an
independent non-executive director -- who was the chairman of
audit committee and nomination committee and a member of
remuneration committee of the company -- has resigned.
"The downgrade reflects Moody's concern that the company's default
risk on its offshore bonds will increase in the near term," says
Chenyi Lu, a Moody's Vice President and Senior Analyst.
Given the potential audit issues, Moody's believes that there is
high probability that the company may not publish audited 2014
financial statements in the next 30 days. This places the company
at high risk of not complying with the senior unsecured notes'
requirement of providing audited financial statements within 120
days from fiscal year end. Such non-compliance could trigger an
event of default and an acceleration of repayment of the $150
million senior unsecured notes due August 2017.
The TCR-AP also reported on May 4, 2015, that Standard & Poor's
Ratings Services said that it had lowered its long-term corporate
credit rating on Sound Global Ltd. to 'CCC' from 'B'. At the same
time, S&P lowered the issue rating on the company's senior
unsecured notes to 'CCC-' from 'B-'. S&P also lowered its long-
term Greater China regional scale ratings on the company to
'cnCCC' from 'cnBB-' and on the notes to 'cnCCC-' from 'cnB'. In
addition, S&P placed all the ratings on CreditWatchwith negative
implications.
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I N D I A
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AAMODA BROADCASTING: CRISIL Ups Rating on INR86.7MM Loan to B-
---------------------------------------------------------------
CRISIL has upgraded its rating on the bank facilities of Aamoda
Broadcasting Company Private Limited (ABCPL; part of the Aamoda
group) to 'CRISIL B-/Stable' from 'CRISIL D'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 20 CRISIL B-/Stable (Upgraded
from 'CRISIL D')
Proposed Long Term 43.3 CRISIL B-/Stable (Upgraded
Bank Loan Facility from 'CRISIL D')
Term Loan 86.7 CRISIL B-/Stable (Upgraded
from 'CRISIL D')
The rating upgrade reflects Aamoda group's timely payment of its
debt obligations over the three months through March 2015.
The rating reflects Aamoda group's weak financial risk profile
marked by high gearing, weak debt protection metrics, and is
exposed to risks related to intense competition the media and
publishing industry. These weaknesses are partially offset by the
industry experience of its promoters and its in-house production
capabilities.
For arriving at its rating, CRISIL has combined the business and
financial risk profiles of ABCPL and its parent, Aamoda
Publications Pvt Ltd (APPL), together referred to as the Aamoda
group. The combined approach is because of significant financial
fungibility between the entities.
Outlook: Stable
CRISIL believes that Aamoda group will continue to benefit over
the medium term from the extensive industry experience of its
promoters. The outlook may be revised to 'Positive' if the group
significantly improves its revenues and profitability, or if there
is significant equity infusion resulting in improvement in its
financial risk profile, particularly its capital structure.
Conversely, the outlook may be revised to 'Negative' in case of
lengthening of Aamoda group's working capital cycle, or a decline
in its operating margin or scale of operations, further weakening
its financial risk profile.
APPL, incorporated in August 2002 and promoted by Mr. V
Radhakrishna and his wife, Mrs. K Kanaka Durga, publishes and
prints the Telugu daily newspaper, Andhra Jyothy, and Telugu
weekly, Navya.
ABCPL was established in 2008 by Mr. V Radhakrishna and his wife,
Mrs. K Kanaka Durga. The company is operating a 24-hour free-to-
air satellite Telugu news channel, ABN Andhra Jyothy. The channel
commenced commercial operation on October 15, 2009, and its target
market is Andhra Pradesh.
AAMODA PUBLICATIONS: CRISIL Ups Rating on INR210MM Loan to B-
-------------------------------------------------------------
CRISIL has upgraded its rating on the bank facilities of Aamoda
Publications Pvt Ltd (APPL; part of the Aamoda group) to 'CRISIL
B-/Stable/CRISIL A4' from 'CRISIL D/CRISIL D'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 210 CRISIL B-/Stable (Upgraded
from 'CRISIL D')
Inland/Import 90 CRISIL A4 (Upgraded from
Letter of Credit 'CRISIL D')
Proposed Long Term 120 CRISIL B-/Stable (Upgraded
Bank Loan Facility from 'CRISIL D')
The rating upgrade reflects Aamoda group's timely payment of its
debt obligations over the three months through March 2015.
The rating reflects Aamoda group's weak financial risk profile
marked by high gearing, weak debt protection metrics, and is
exposed to risks related to intense competition the media and
publishing industry. These weaknesses are partially offset by the
industry experience of its promoters and its in-house production
capabilities.
For arriving at its rating, CRISIL has combined the business and
financial risk profiles of APPL and its parent, Aamoda
Broadcasting Company Private Limited (ABCPL), together referred to
as the Aamoda group. The combined approach is because of
significant financial fungibility between the entities.
Outlook: Stable
CRISIL believes that Aamoda group will continue to benefit over
the medium term from the extensive industry experience of its
promoters. The outlook may be revised to 'Positive' if the group
significantly improves its revenues and profitability, or if there
is significant equity infusion resulting in improvement in its
financial risk profile, particularly its capital structure.
Conversely, the outlook may be revised to 'Negative' in case of
lengthening of Aamoda group's working capital cycle, or a decline
in its operating margin or scale of operations, further weakening
its financial risk profile.
APPL, incorporated in August 2002 and promoted by Mr. V
Radhakrishna and his wife, Mrs. K Kanaka Durga, publishes and
prints the Telugu daily newspaper, Andhra Jyothy, and Telugu
weekly, Navya.
ABCPL was established in 2008 by Mr. V Radhakrishna and his wife,
Mrs. K Kanaka Durga. The company is operating a 24-hour free-to-
air satellite Telugu news channel, ABN Andhra Jyothy. The channel
commenced commercial operation on October 15, 2009, and its target
market is Andhra Pradesh.
AMAR AGRO: ICRA Assigns 'B' Rating to INR2.97cr Term Loan
----------------------------------------------------------
The long-term rating of [ICRA]B has been assigned to the INR2.70
crore cash credit facility and the INR2.97 crore term loan
facility of Amar Agro Industries.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 2.70 [ICRA]B assigned
Term Loan 2.97 [ICRA]B assigned
The assigned rating is constrained by implementation risks
associated with the project as well as uncertainty related to the
level of product off take and commercial success. The rating is
further constrained by highly competitive industry structure owing
to the presence of several organised as well as unorganised
players in the region which is expected to keep margins under
pressure and vulnerability of the firm's profitability to the
adverse fluctuations in input prices, which are subject to agro
climatic and regulatory risks with regards to Minimum Support
Price (MSP) imposed by the Government on moong. Further, the
possible stress on the financial risk profile given the debt
funded nature of the project along with high impending debt
repayments and the risks associated with partnership form of
business in terms of continuity, capital infusions and withdrawals
also constrain the rating.
The rating, however, favourably takes into account long standing
experience of the promoters in the agro commodity industry and the
expected marketing support from the group concerns engaged in the
similar industry.
Established in December 2013, Amar Agro Industries (AAI) has set
up a plant at Deesa in Banaskantha district of Gujarat for
processing of moong bean (green gram) with a total processing
capacity of 10,000 metric tonnes per annum (MTPA). The promoters
of the firm have longstanding experience in the agro commodity
industry by the virtue of being associated with M/s Amar Dal Mill,
a proprietary firm engaged in manufacturing and trading of moong
lentils and M/s Shri Amar Kirana Stores, a partnership firm
engaged in wholesale trading of grocery items.
AMBITION MICA: CRISIL Suspends B+ Rating on INR46.7MM Term Loan
---------------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of
Ambition Mica Pvt Ltd (AMPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 35 CRISIL B+/Stable
Letter of Credit 5 CRISIL A4
Term Loan 46.7 CRISIL B+/Stable
The suspension of ratings is on account of non-cooperation by AMPL
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, AMPL is yet to
provide adequate information to enable CRISIL to assess AMPL'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'.
AMPL, incorporated in 2011, is promoted by Ahmedabad (Gujarat)-
based Mr. Valji Patel and his sons Mr. Ramesh Patel, Mr. Govind
Patel, and Mr. Prahlad Patel. The company manufactures decorative
laminates that are used for furnishing.
ANANGOOR TEXTILE: CRISIL Ups Rating on INR364.5MM LT Loan to B
--------------------------------------------------------------
CRISIL has upgraded its ratings on the bank loan facilities of
Anangoor Textile Mills Pvt Ltd (Anangoor) to 'CRISIL
B/Stable/CRISIL A4' from 'CRISIL D/CRISIL D'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 25.4 CRISIL A4 (Upgraded from
'CRISIL D')
Cash Credit 200.0 CRISIL B/Stable (Upgraded
from 'CRISIL D')
Letter of Credit 100.0 CRISIL A4 (Upgraded from
'CRISIL D')
Long Term Loan 364.5 CRISIL B/Stable (Upgraded
from 'CRISIL D')
The rating upgrade reflects Anangoor's timely servicing of the
term debt obligations driven by improved liquidity. The company is
expected to generate adequate cash accruals of around INR95
million as compared to repayment obligations of INR42 million over
the medium term.
The rating continues to reflect Anangoor's below-average financial
risk profile, marked by high gearing and average debt protection
metrics. Its margins remain susceptible to volatility in raw
material prices. However, the company continues to benefit from
its established position in the textile industry.
Outlook: Stable
CRISIL believes that Anangoor will maintain its established market
position in the textile industry over the medium term. The outlook
may be revised to 'Positive' if the company reports significant
improvement in revenues and profitability leading to improved cash
accruals and liquidity. Conversely, the outlook may be revised to
'Negative' if Anangoor's cash flows and margins deteriorate, or if
the company undertakes a large debt-funded capital expenditure
programme, adversely impacting its capital structure.
Anangoor was established as a partnership firm in 1995 by Mr. K
Ramasamy and Mr. C Palanisamy. The company manufactures cotton
yarn at its manufacturing units located in Kangeyam and Anangoor
(both in Tamil Nadu).
AZIZ ENTERPRISES: ICRA Reaffirms 'B' Rating on INR5cr Cash Loan
---------------------------------------------------------------
ICRA has reaffirmed its long-term rating of [ICRA]B on the Rs 8
crore fund based bank facilities of Aziz Enterprises.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 5.00 [ICRA]B; Reaffirmed
Packing Credit 1.50 [ICRA]B; Reaffirmed
FDBN/FDBP/FDBD 1.50 [ICRA]B; Reaffirmed
ICRA's rating continues to take into account Aziz Enterprises'
modest profitability, given the low value additive nature of work,
as well as the highly competitive and fragmented nature of the
gems and jewellery industry. This apart, the rating is also
constrained by the firm's elongated working capital cycle, which
in light of the firm's limited accruals and funds infusion has
kept it dependent on debt funding, resulting in modest debt
coverage indicators. Moreover, as Aziz Enterprises procures gems
through limited period auctions, without firm orders in hand and
without a forex hedging mechanism in place, it remains exposed to
the risk of price and exchange rate fluctuations, given its
substantial inventory levels. This apart, the partnership nature
of the firm exposes it to associated risks like withdrawal of
capital, as has also been witnessed in the past, risk of
dissolution etc. The rating reaffirmation also takes into the
account the decline in the firm's scale of operations in FY14
owing to a weak demand scenario. The rating however derives
comfort from the long track record of the promoters, who have been
engaged in the gems and jewellery industry for more than three
decades.
Going forward, the ability of the firm to improve its scale of
operations and profitability while optimally managing its working
capital cycle, will remain the key rating sensitivities.
Incorporated in 1972 as a partnership firm, Aziz Enterprises is
engaged in cutting, polishing and trading of precious gems, with
its product profile dominated by emerald stones. Prior to FY13,
the firm undertook only cutting and polishing of precious stones,
however, since then it has started trading in rough emerald stones
as well. The firm is managed by Mr. Ikramullah and Mr. Samiullah,
who have been engaged in this line of business since 1975.
Recent Results
In FY14, the firm had an operating income of INR9.65 crore on
which it earned a Profit after Tax (PAT) of INR0.29 crore, as
compared to an operating income of INR14.36 crore on which it
earned a PAT of INR0.25 crore in the previous year. The firm
reported, on a provisional basis, an operating income of INR13.93
crore for FY15.
BRITTO TIMBERS: CRISIL Assigns B Rating to INR10MM Cash Loan
------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable/CRISIL A4' ratings to the
bank facilities of Britto Timbers Pvt Ltd (BTPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 10 CRISIL B/Stable
Letter of Credit 80 CRISIL A4
The ratings reflect BTPL's small scale of operations in the highly
fragmented timber industry, its below-average financial risk
profile marked by weak interest coverage ratio, and its working
capital intensive operations. These rating weaknesses are
partially offset by the extensive industry experience of BTPL's
promoters and its established regional presence in the timber
trading and saw mill business.
Outlook: Stable
CRISIL believes that BTPL will benefit over the medium term from
its promoters' extensive industry experience. The outlook may be
revised to 'Positive' if the company significantly scales up
operations while maintaining operating profitability, and improves
its working capital management, resulting in improvement in its
financial risk profile. Conversely, the outlook may be revised to
'Negative' if BTPL's cash accruals decline or its working capital
management weakens, or if the company undertakes a large debt-
funded capital expenditure programme, weakening its financial risk
profile.
Set up in 2012, and based in Kanyakumari district (Tamil Nadu),
BTPL trades in and processes timber. BTPL is promoted and managed
by Mr. G.Arul Shoban and his family.
BTPL reported profit after tax (PAT) of INR0.17 million on
turnover of INR87.3 million for 2013-14 (refers to financial year,
April 1 to March 31), against PAT of INR0.03 million on turnover
of INR66.6 million for 2012-13.
BSCC INFRASTRUCTURE: CRISIL Reaffirms B+ Rating on INR76.9MM Loan
-----------------------------------------------------------------
CRISIL's ratings on the bank facilities of BSCC Infrastructure Pvt
Ltd (BSCC) continue to reflect BSCC's modest scale of operations
and its exposure to off take-related risks for its Gujarat State
Road Transport Corporation (GSRTC) commercial project.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 60 CRISIL A4 (Reaffirmed)
Cash Credit 15 CRISIL B+/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility 76.9 CRISIL B+/Stable (Reaffirmed)
Term Loan 58.1 CRISIL B+/Stable (Reaffirmed)
These rating weaknesses are partially offset by the company's
above-average financial risk profile, marked by low gearing and
strong debt protection metrics. The ratings also factor in BSCC's
established relationships with customers.
Outlook: Stable
CRISIL believes that BSCC will continue to benefit over the medium
term from its established customer relationships. The outlook may
be revised to 'Positive' if the company significantly increases
its scale of operations, supported by timely execution of its
current order book and healthy off take for its GSRTC project,
while efficiently managing its working capital requirements and
maintaining its financial risk profile. Conversely, the outlook
may be revised to 'Negative' in case of low cash accruals or a
substantial increase in working capital requirements, resulting in
significant weakening of BSCC's financial risk profile,
particularly its liquidity.
Based in Mehsana (Gujarat), BSCC is promoted by Mr. Bharat S
Chaudhary; the company is a construction contractor, and has
primarily executed projects for the Dudhsagar Dairy in Gujarat and
GSRTC in the past. It is also a distributor for Bharat Sanchar
Nigam Ltd recharge coupons and SIM cards in the Mehsana and
Palanpur districts of Gujarat.
BSCC reported a profit after tax (PAT) of INR4.3 million on net
sales of INR69.5 million for 2013-14 (refers to financial year,
April 1 to March 31), as against a PAT of INR1.7 million on net
sales of INR210.6 million for 2012-13.
CENTRAL HOTELS: CRISIL Suspends 'C' Rating on INR52.5MM Term Loan
-----------------------------------------------------------------
CRISIL has suspended its rating on the bank facilities of
Central Hotels Pvt Ltd (CHPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term
Bank Loan Facility 7.5 CRISIL C
Term Loan 52.5 CRISIL C
The suspension of rating is on account of non-cooperation by CHPL
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, CHPL is yet to
provide adequate information to enable CRISIL to assess CHPL'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'.
Established in 1995, Chennai (Tamil Nadu)-based CHPL was promoted
by the Mohammed Sathak group, which has presence in the
educational segment. CHPL has a commercial property with a built-
up area of 53,701 square feet in Chennai. Since inception till
2005, CHPL had leased out the property to Apollo Sindhuri Hotels
Ltd, post which the property has been leased out to The Royal
Regency Hotel.
CHARIOT INTERNATIONAL: CRISIL Reaffirms B+ Rating on INR8MM Loan
----------------------------------------------------------------
CRISIL's ratings on the bank facilities of Chariot International
Pvt Ltd (CIPL) continue to reflect CIPL's modest scale of
operations in the intensely competitive granite processing
industry, and the company's large working capital requirements.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Letter of Credit 5 CRISIL A4 (Reaffirmed)
Packing Credit in
Foreign Currency 85 CRISIL A4 (Reaffirmed)
Proposed Long Term
Bank Loan Facility 8 CRISIL B+/Stable (Reaffirmed)
These rating weaknesses are partially offset by the extensive
experience of the company's promoter in the granite processing
industry, and its moderate financial risk profile, marked by
conservative gearing and moderate debt protection metrics.
Outlook: Stable
CRISIL believes that CIPL will continue to benefit over the medium
term from its promoter's extensive industry experience. The
outlook may be revised to 'Positive' if the company significantly
increases its revenues and profitability on a sustainable basis
and improves its working capital management, resulting in better
liquidity. Conversely, the outlook may be revised to 'Negative' if
CIPL's liquidity weakens, most likely due to stretched receivables
or a considerable decline in its revenues, or if the company
undertakes a large debt-funded capital expenditure, weakening its
financial risk profile.
CIPL, set up in 1992, is engaged in granite processing. The
company's day-to-day operations are managed by Mr. Sandeep K
Wadhwa.
CIPL reported a profit after tax (PAT) of INR9.8 million on net
sales of INR228.8 million for 2013-14 (refers to financial year,
April 1 to March 31), as against a PAT of INR10.9 million on total
revenue of INR227.4 million for 2012-13.
CREATIVE TEXTURE: CRISIL Suspends B Rating on INR61.4MM Loan
------------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of The
Creative Texture (CT).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 42.5 CRISIL B/Stable
Proposed Long Term
Bank Loan Facility 61.4 CRISIL B/Stable
Term Loan 46.1 CRISIL B/Stable
The suspension of ratings is on account of non-cooperation by CT
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, CT is yet to
provide adequate information to enable CRISIL to assess CT'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'.
CT, set up in 2005 as a partnership firm, is currently promoted by
Mr. R Balaji, his father Mr. A Ramasamy, his mother Mrs. R Kamala,
and his sister Ms. R Kavitha as the partners. The firm
manufactures various types of fabrics such as grey fabrics, dyed
and printed fabrics, and dyed made ups, which are primarily used
in manufacturing bed sheets, blankets, and bath products. CT has
its manufacturing facility located at Sivakasi (Tamil Nadu).
DIVYA DISTRIBUTORS: CRISIL Suspends B+ Rating on INR60MM Loan
-------------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of Divya
Distributors (DD).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 60 CRISIL B+/Stable Suspended
The suspension of ratings is on account of non-cooperation by DD
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, DD is yet to
provide adequate information to enable CRISIL to assess DD'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'.
DD was established as a partnership firm in 2008. It is currently
managed by Mr. Anurag Dokania and Mr. Surendra Kumar Sharma. DD is
the master distributor of ayurvedic products of DYMT and PAL for
four districts in West Bengal.
GEMINI STUDIOS: CRISIL Suspends D Rating on INR193.6MM Term Loan
----------------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of
Gemini Studios and Innovations Pvt Ltd (GSIPL's).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 54 CRISIL D
Term Loan 193.6 CRISIL D
The suspension of ratings is on account of non-cooperation by
GSIPL's with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, GSIPL's is yet
to provide adequate information to enable CRISIL to assess GSIPL'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'.
GSIPL was established in 1979 and started its media and
entertainment activities in 1998. It has its independent premises
of 40,000 square feet, spread over seven floors, in Andheri
(East), Mumbai (Maharashtra). The company is involved in
production of television serials, feature films, telefilms and
documentaries for the Indian and the global markets. Apart from
production activities, the studio offers centrally air-conditioned
ready-to-shoot locations for ad-films, television and film
shooting. It has its own sound recording, dubbing, and pre- and
post-production facilities. GSIPL, in collaboration with Mumbai
University, offers postgraduate diploma course in film and
television through its institution, Digital Academy. GSIPL
ventured into trading in software and security solutions in 2006-
07. The company's chairman is Mr. Basant Talreja; his son, Mr.
Kartikeya Talreja, is the director of the company.
GUPTA SYNTEX: CRISIL Assigns B+ Rating to INR88M Term Loan
----------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-term
bank facilities of Gupta Syntex Pvt Ltd (GSPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 25 CRISIL B+/Stable
Term Loan 88 CRISIL B+/Stable
The rating reflects GSPL's modest scale of operations in the
intensely competitive dyeing and processing industry, and the
company's subdued financial risk profile marked by small net worth
and modest debt protection metrics. These rating weaknesses are
partially offset by the extensive experience of GSPL's promoter in
the textile industry.
Outlook: Stable
CRISIL believes that GSPL will continue to benefit over the medium
term from its promoter's extensive industry experience and its
moderate capital structure. The outlook may be revised to
'Positive' if GSPL achieves healthy revenue growth with
improvement in operating margin, while prudently managing its
working capital requirements. Conversely, the outlook may be
revised to 'Negative' if GSPL's cash accruals decline, its working
capital requirements increase, or if the company undertakes any
large debt-funded capital expenditure programme, weakening its
financial risk profile, particularly liquidity.
Based in Ahmedabad (Gujarat), GSPL dyes and processes cotton
suiting and shirting fabrics. The company commenced commercial
operations in December 2011 and caters majorly to the textile
players in and around Ahmedabad. Mr. Nanak Gupta is the company's
founder and promoter.
JATIN & COMPANY: CRISIL Assigns B- Rating to INR1.6MM Loan
----------------------------------------------------------
CRISIL has assigned its 'CRISIL B-/Stable/CRISIL A4' ratings to
the bank facilities of Jatin & Company (JAC).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term
Bank Loan Facility 1.6 CRISIL B-/Stable
Packing Credit 30.0 CRISIL A4
Bank Guarantee 2.5 CRISIL A4
Letter of Credit 60.0 CRISIL A4
The ratings reflect JAC's large working capital requirements and
its susceptibility to intense competition and to changes in
regulations governing the export of agricultural commodities.
These rating weaknesses are partially offset by the extensive
experience of JAC's partners in the trading of agricultural
commodities business and the firm's average financial risk
profile, backed by comfortable capital structure.
Outlook: Stable
CRISIL believes that JAC will continue to benefit over the medium
term from its partners' extensive industry experience. The outlook
may be revised to 'Positive' if the firm achieves significant and
sustained improvement in its accruals while managing its
incremental working capital requirements prudently. Conversely,
the outlook may be revised to 'Negative' if JAC registers low cash
accruals, or if there is a further stretch in its working capital
cycle.
JAC was established in 1979 as a partnership concern by brothers
Mr. Jatin J Bhuta and Mr. Tushar J Bhuta. The firm exports
agricultural commodities such as basmati rice, black pepper,
cardamom, and cumin seeds.
KILPEST INDIA: CRISIL Suspends B+ Rating on INR42.5MM Cash Loan
---------------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of Kilpest
India Ltd (KIL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 5 CRISIL A4
Cash Credit 42.5 CRISIL B+/Stable
Letter of Credit 5.0 CRISIL A4
Proposed Long Term
Bank Loan Facility 2.1 CRISIL B+/Stable
The suspension of ratings is on account of non-cooperation by KIL
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, KIL is yet to
provide adequate information to enable CRISIL to assess KIL'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 1972, KIL is promoted by Mr. R K Dubey and family
in Bhopal (Madhya Pradesh). The company formulates various kinds
of pesticides and manufactures about 50 pesticide products, micro
fertilisers, bio-fertilisers and bio-pesticides.
LANCO MANDAKINI: CRISIL Suspends 'D' Rating on INR4.16BB Loan
-------------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of
Lanco Mandakini Hydro Energy Private Limited (Lanco Mandakini).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Long Term Loan 4,160 CRISIL D
The suspension of ratings is on account of non-cooperation by
Lanco Mandakini with CRISIL's efforts to undertake a review of the
ratings outstanding. Despite repeated requests by CRISIL, Lanco
Mandakini is yet to provide adequate information to enable CRISIL
to assess Lanco Mandakini'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'
Lanco Mandakini was incorporated in 2006 for the implementation of
two run-of-the-river hydroelectric projects of 76 megawatts (MW)
each; on the River Mandakini in the Rudraprayag district
(Uttarakhand). Currently, the company is implementing the Phata
Byung Hydro Electric Power Project of 76 MW. The plant is expected
to commence operations in September 2014. The other project,
Rambara Hydro Electric Power Project, will be undertaken on
receipt of all statutory clearances and approvals. The projects
were allotted to the Lanco group by the Government of Uttarakhand
in February 2006. Lanco Mandakini has entered into a 25-year PPA
with NETS for complete offtake of the power that it generates.
LANCO VIDARBHA: CRISIL Suspends D Rating on INR55.49BB Loan
-----------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of
Lanco Vidarbha Thermal Power Ltd (Lanco Vidarbha).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Long Term Loan 55,490 CRISIL D
Proposed Long Term
Bank Loan Facility 10 CRISIL D
The suspension of ratings is on account of non-cooperation by
Lanco Vidarbha with CRISIL's efforts to undertake a review of the
ratings outstanding. Despite repeated requests by CRISIL, Lanco
Vidarbha is yet to provide adequate information to enable CRISIL
to assess Lanco Vidarbha'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'.
Lanco Vidarbha, owned by LITL and its subsidiaries and associates,
is implementing a 1320-MW coal-based power project in Wardha
District (Maharashtra). The project will have two supercritical
units of 660 MW each. The project cost, estimated at around
INR69.4 billion, is being funded in a debt-to-equity ratio of
80:20. In addition to the PPA with MSEDCL for offtake of 55 per
cent of its capacity, Lanco Vidarbha has also signed a PPA with
National Energy and Trading Services Ltd (rated 'CRISIL
BBB/Negative/CRISIL A3+) for offtake of 25 per cent of capacity,
on a best-effort basis. Lanco Vidarbha has awarded the
engineering-procurement-and-construction (EPC) contract to LITL.
The boiler package for the project will be supplied by Dongfang
Electric Company, China, and the turbine package by Harbin Turbine
Company, China. Lanco Vidarbha's annual coal requirement is
estimated at around 6.61 million tonnes. The company has a letter
of assurance from South Eastern Coalfields Ltd for around 5.5
million tonnes per annum (mtpa) of coal; sourcing of the remainder
amount of coal is yet to be tied up. The first unit (660 MW) of
the project is scheduled to be commissioned by April 2014, and the
second unit by August 2014.
LAXMI BUILDERS: CRISIL Reaffirms B Rating on INR30MM Cash Loan
--------------------------------------------------------------
CRISIL's ratings on the bank facilities of M/S. Laxmi Builders
(Laxmi) continue to reflect Laxmi's modest scale of operations in
a competitive industry and its working-capital-intensive
operations.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 50 CRISIL A4 (Reaffirmed)
Cash Credit 30 CRISIL B/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility 20 CRISIL B/Stable (Reaffirmed)
These rating weaknesses are partially offset by the extensive
experience of Laxmi's promoters in the construction industry, and
the firm's improved financial risk profile led by an increase in
its operating margin because of change in its business activity to
direct contracts from sub-contracting.
Outlook: Stable
CRISIL believes that Laxmi will maintain its business risk profile
over the medium term, supported by its promoters' industry
experience. CRISIL also believes that the firm will sustain the
improvement in its financial risk profile over this period, driven
by an increase in its operating margin, no major term debt
obligations, and moderate cash accruals. The outlook may be
revised to 'Positive' in case of a substantial increase in Laxmi's
scale of operations along with stable profitability and
improvement in its working capital requirements. Conversely, the
outlook may be revised to 'Negative' if the firm's financial risk
profile weakens, most likely because of low cash accruals or
pressure on its liquidity because of a considerable stretch in its
working capital cycle or substantial withdrawal of funds by its
promoters.
Update
Laxmi reported moderate sales of INR110 million for 2013-14
(refers to financial year, April 1 to March 31), on account of
change in its business activity to direct contracts from sub-
contracting. The sales are estimated to have remained at a similar
level in 2014-15. The firm's operating margin improved to 16.0 per
cent in 2013-14 from 10.2 per cent in 2012-13 because of the
change in its business activity.
Laxmi's financial risk profile is expected to remain moderate over
the medium term with gearing at 2.0 to 2.5 times and net cash
accruals to total debt ratio at 0.8 times to 0.10 times. The
firm's working capital requirements increased, with gross current
assets (GCAs) at 209 days as on March 31, 2014, against 100 days a
year earlier because of deposits kept with customers. The GCAs are
estimated to have remained at a similar level as on March 31,
2015. Laxmi's liquidity remains average with high dependence on
bank limits for keeping deposits with customers.
Laxmi reported a profit after tax (PAT) of INR5.2 million on net
sales of INR110 million for 2013-14, against a PAT of INR5.6
million on net sales of INR150 million for 2012-13. The firm has
reported, on a provisional basis, net sales of INR75 million for
the 10 months ended January 31, 2015.
Laxmi is a 'Class AA' civil contractor, engaged in construction of
roads, buildings, and irrigation projects. The firm is a
partnership concern of Ahmedabad (Gujarat)-based Mr. M K Patel and
Mr. R K Patel.
LUSTRE ENGINEERING: CRISIL Suspends D Rating on INR50MM Loan
------------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of Lustre
Engineering Corporation (LEC).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 50 CRISIL D Suspended
Cash Credit 9.2 CRISIL D Suspended
The suspension of ratings is on account of non-cooperation by LEC
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, LEC is yet to
provide adequate information to enable CRISIL to assess LEC'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'.
LEC was established as a proprietorship concern by Mr. B L
Patharkar in 1951. In 2002, it was reconstituted as a partnership
firm in which Mr. B L Patharkar's son Mr. Vikas Patharkar and
daughter-in-law Mrs. Himangi Patharkar are partners. The firm is
an electrical contractor engaged in maintenance and repair of
power lines and transformers; the firm overhauls and washes high-
voltage and EHV live wire transformers.
M R AGRO: ICRA Suspends B- Rating on INR2.40cr Fund Based Loan
---------------------------------------------------------------
ICRA has suspended the [ICRA]B- rating assigned to the INR3.29
crore long term fund based limits and [ICRA]A4 rating assigned to
the INR12.00 crore short term fund based limits of M R Agro
Industries. The suspension follows ICRA's inability to carry out a
rating surveillance in the absence of the requisite information
from the company.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term Loan 0.89 [ICRA]B- suspended
Fund based limits 2.40 [ICRA]B- suspended
Export Packing Credit1 2.00 [ICRA]A4 suspended
M R Agro Industries (MRAI) was established in 1999 and is
primarily engaged in processing of natural sesame seeds to produce
hulled sesame seeds which are then sold to the export market. The
firm is also engaged in trading of natural sesame seeds, cumin
seeds, fennel seeds, peanuts etc. The firm is currently managed by
Mr. Mitesh Patel, Mr. Ramji Patel, Mr. Bhagwan Patel and Mr.
Ranchodas Patel.
MAGADH INDUSTRIES: ICRA Assigns B+ Rating to INR111cr Cash Loan
---------------------------------------------------------------
ICRA has assigned a long term rating of [ICRA]B+ to the INR111
crore cash credit facility and INR36 crore term loans of Magadh
Industries Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term Loan 36 [ICRA]B+ assigned
Cash Credit 111 [ICRA]B+ assigned
The ratings factor in the weak financial profile, characterized by
the low profitability, high gearing and depressed coverage
indicators and the cyclicality inherent in the steel business,
which is passing through a difficult phase at present. In addition
the non-integrated operation, with limited value addition, exposes
the company's profitability and cash flows to variations in input
and output prices. The ratings, however, favourably factor in the
experience of the promoters in the steel industry and the
strategic location of the manufacturing unit that is in close
proximity to raw material sources and key customers thus reducing
freight costs.
Incorporated in 1998, Magadh Industries Pvt. Ltd. (MIND) is
involved in the manufacturing of TMT bars and coil bars. The plant
is located in Patna and has an installed capacity of 2,00,000 MT
per annum.
Recent Results
During the period April to September, 2014, as per provisional
results, MIND registered a profit after tax of INR2.03 crore on
the back of OI of INR228.02 crore. In 2013-14, the company
registered a profit after tax of INR1.30 crore on the back of OI
of INR328.23 crore.
MAGADH IRON: ICRA Assigns B+ Rating to INR30cr Cash Loan
--------------------------------------------------------
ICRA has assigned a long term rating of [ICRA]B+ to the INR30
crore cash credit facility of Magadh Iron Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 30 [ICRA]B+ assigned
The rating factor in the limited value addition, given the trading
nature of MIPL's business, which results in low profitability, and
the increasing working capital debt required to support huge
supplier advances, which has, in turn, led to high gearing levels
as well. High working capital debt on one hand and low
profitability on the other has resulted in depressed debt coverage
indicators for the company. ICRA notes that the turnover of the
company has witnessed a decline in FY14 as well as in the current
year, given the intensely competitive nature of the steel trading
industry. The ratings, however, favourably factor in the
experience of the promoters in the steel industry and the moderate
customer concentration risk, with the top 10 customers
contributing to 37% of the sales in FY14.
Incorporated in 1996, Magadh Iron Pvt. Ltd. (MIPL) is engaged in
the trading of iron and steel products and cement. The company is
an authorized stockist for Jaypee Cement.
Recent Results
During the period April to September, 2014, as per provisional
results, MIPL registered a profit before tax of INR0.65 crore on
the back of OI of INR47.03 crore. In 2013-14, the company
registered a profit after tax of INR0.47 crore on the back of OI
of INR126.56 crore.
MAHESH EXTRUSIONS: CRISIL Reaffirms B- Rating on INR59MM Loan
-------------------------------------------------------------
CRISIL's ratings on the bank facilities of Mahesh Extrusions
Limited (MEL) reflect its below-average financial risk profile,
marked by a weak capital structure and average debt protection
metrics, and its modest scale of operations in the competitive
pipes and fittings industry. These rating weaknesses are partially
offset by the extensive industry experience of the company's
promoters.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 5 CRISIL A4 (Reaffirmed)
Cash Credit 59 CRISIL B-/Stable (Reaffirmed)
Letter of Credit 55 CRISIL A4 (Reaffirmed)
Long Term Loan 10.7 CRISIL B-/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility 5.4 CRISIL B-/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that MEL will continue to benefit over the medium
term from its promoters' extensive industry experience. The
outlook may be revised to 'Positive' in case of a substantial
increase in the company's scale of operations and profitability,
leading to significant and sustained improvement in its cash
accruals and capital structure. Conversely, the outlook may be
revised to 'Negative' if MEL's financial risk profile,
particularly its liquidity, deteriorates, most likely due to a
decline in profitability or a stretch in its working capital
cycle.
MEL, based in Karnataka, was established in 1991 by Mr. A Prasad
Shetty and Mr. S P Y Reddy. The company manufactures polyvinyl
chloride and high-density polyethylene pipes, which are used in
the construction and agriculture industries.
MANGESH ENTERPRISES: CRISIL Suspends D Rating on INR75MM Loan
-------------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of
Mangesh Enterprises Pvt Ltd (MEL; part of the Pelena group).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 15 CRISIL D
Proposed Long Term
Bank Loan Facility 75 CRISIL D
The suspension of ratings is on account of non-cooperation by MEL
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, MEL is yet to
provide adequate information to enable CRISIL to assess MEL'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'.
For arriving at its rating, CRISIL has combined the business and
financial risk profiles of MEL, Pelena Trading Pvt Ltd (Pelena),
and Meenal Enterprises Pvt Ltd (MEPL). This is because these
entities, collectively referred to as the Pelena group, are in the
same line of business, under a common management, and have common
suppliers.
The Pelena group commenced business operations through its
flagship firm Oriental Trading Corporation, a proprietorship
concern based in Mumbai (Maharashtra); this firm was set up in
1994 by Mr. Mohanlal Patel. Subsequently, two more firms, Vatsa
Enterprises and Bhagwati Enterprises, were set up in 1995.
However, the business of all three firms was acquired in 2010 by
Pelena, MEL, and MEPL, respectively, which were incorporated in
2008. The group currently comprises these three companies. The
Pelena group trades in carbide metal cutting tools (of different
sizes), measurement instruments, and fasteners such as screws,
nuts, bolts, and ball bearings.
MEENAL ENTERPRISES: CRISIL Suspends 'D' Rating on INR80MM Loan
--------------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of
Meenal Enterprises Pvt Ltd (MEPL); part of the Pelena group).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 80 CRISIL D
Proposed Long Term
Bank Loan Facility 10 CRISIL D
The suspension of ratings is on account of non-cooperation by MEPL
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, MEPL is yet to
provide adequate information to enable CRISIL to assess MEPL'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'.
For arriving at its rating, CRISIL has combined the business and
financial risk profiles of MEPL, Pelena Trading Pvt Ltd (Pelena),
and Mangesh Enterprises Pvt Ltd (MEL). This is because these
entities, collectively referred to as the Pelena group, are in the
same line of business, under a common management, and have common
suppliers.
The Pelena group commenced business operations through its
flagship firm Oriental Trading Corporation, a proprietorship
concern based in Mumbai (Maharashtra); this firm was set up in
1994 by Mr. Mohanlal Patel. Subsequently, two more firms, Vatsa
Enterprises and Bhagwati Enterprises, were set up in 1995.
However, the business of all three firms was acquired in 2010 by
Pelena, MEL, and MEPL, respectively, which were incorporated in
2008. The group currently comprises these three companies. The
Pelena group trades in carbide metal cutting tools (of different
sizes), measurement instruments, and fasteners such as screws,
nuts, bolts, and ball bearings.
MEENAL TRADING: CRISIL Suspends 'D' Rating on INR70MM Loan
----------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of
Meenal Trading Private Limited (Meenal; part of the Mocha group).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 30 CRISIL D
Packing Credit 70 CRISIL D
The suspension of ratings is on account of non-cooperation by
Meenal with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, Meenal is yet to
provide adequate information to enable CRISIL to assess Meenal'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'
For arriving at its ratings, CRISIL has combined the business and
financial risk profiles of Meenal and Mocha Trading Pvt Ltd
(Mocha). This is because these entities, together referred to as
the Mocha group, are in the same line of business, under a common
management, and have common suppliers.
The Mocha group commenced business operations through its flagship
firm Mocha Trading Corporation, a partnership concern based in
Mumbai (Maharashtra) and set up in 1996 by Mr. Mohanlal Patel and
his son, Mr. Romen Patel. The firm was reconstituted as a private
limited company in 2008. The Mocha group trades in carbide metal
cutting tools, measurement instruments, and fasteners such as
screws, nuts, bolts, and ball bearings. It also trades in iron ore
fines in the domestic market.
NIRMALA CONSTRUCTIONS: ICRA Ups Rating on INR4cr LT Loan to BB-
----------------------------------------------------------------
ICRA has upgraded the long term rating from [ICRA]B+ to [ICRA]BB-
to the Rs 9.63 crore (enhanced from 5.85) bank facilities of
Nirmala Constructions (NC). ICRA has also assigned a short term
rating of [ICRA]A4 to the INR0.35 crore non fund based facility of
NC. The outlook on the long term rating is stable.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term scale- 4.00 [ICRA]BB- (Stable) upgraded
Cash Credit from [ICRA]B+
Long-term scale- 2.70 [ICRA]BB- (Stable) upgraded
Bank Guarantees from [ICRA]B+
Long term scale- 2.93 [ICRA]BB- (Stable) upgraded
Term loan from [ICRA]B+
Short term scale-
Non fund based 0.35 [ICRA]A4 assigned
The rating revision takes into account the growth in the revenue
supported by the healthy order inflow from the telecom companies
in the past two years. Further, the ratings factor in the modest
unexecuted order book of ~INR12 crore providing revenue visibility
in the short term and the comfortable financial profile of the
firm characterised by low gearing of 0.67x as on 31st March, 2014
and modest coverage indicators. Moreover, the firm has been able
to maintain operating margins of ~17% in the past few years and is
protected from the raw material price fluctuation risk as the
fibers are supplied by the customers. ICRA also takes into account
the extensive experience of the proprietor and the core team in
the field of external plant telecom projects.
The ratings are, however, constrained by the modest scale of
operations and the high working capital intensity as indicated by
a NWC/OI of 64% in FY2013-14 owing to stretched receivables. The
ratings also take into account the high customer concentration
with ~89% of the pending order book originating from Vodafone and
Idea; however, the risk is mitigated by the established
relationship with the reputed clients in telecom industry. ICRA
has also taken a note of the risks associated with NC being
constituted as a proprietorship which increases the risk of
capital drawdown.
M/s Nirmala Constructions (NC) is an external plant telecom
projects contractor based out of Bangalore. Established in 1989,
the proprietorship concern is involved in construction activities
such as laying of fiber optic network cables and Polythene
Insulated Jelly Filled Cables (PIJF) cables for setting up route
network or backbone for various telecom companies such as
Vodafone, Idea, Tyco Telecommunications, BSNL, VSNL, and Himachal
Futuristic Communications Limited. The firm has undertaken
projects for underground as well as sub-marine installations. Work
on underground projects typically involves performing route
surveys, getting right of way permits, excavation, duct
installation, construction of man holes, GI pipe installation,
testing of fiber, splicing, termination, testing links,
installation of route markers, restoration, getting NOC from road
authorities and performing required documentation. Sub-marine
projects typically involve sub-marine cable installation using
divers and equipment in sea bed coupled with on-shore installation
work.
P.A.S. COTTON: ICRA Reaffirms D Rating on INR6.89cr Term Loan
-------------------------------------------------------------
ICRA has reaffirmed the long term rating of [ICRA]D outstanding on
the INR6.89 crore (revised from INR11.93 crore) term loans,
INR5.00 crore fund based facilities and INR5.04 crore (revised
from nil) proposed facilities of P.A.S. Cotton Mills Private
Limited. ICRA has also reaffirmed the short term rating of [ICRA]D
outstanding on the INR1.75 crore non-fund based facilities of the
Company.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term-Term loans 6.89 [ICRA]D/reaffirmed
Long Term-Fund based
facilities 5.00 [ICRA]D/reaffirmed
Long Term-Proposed
facilities 5.04 [ICRA]D/reaffirmed
Short Term-Non-fund
based facilities 1.75 [ICRA]D/reaffirmed
The reaffirmation of the ratings takes into account the continuing
delays in servicing of the debt obligations by the Company owing
to high repayment obligations and stressed liquidity position. The
high interest expense coupled with increase in the credit period
offered to its customers to sustain the order flows amid sluggish
demand scenario continues to stress the free cash flows of the
company resulting in insufficient funds for debt repayments. The
ratings are further constrained by the small scale of operations
which limits its scale economies and financial flexibility. Going
forward, the Company's ability to improve its revenues and profit
margins while efficiently managing its working capital cycle will
be critical to improve the cash flows and thereby, meet the debt
repayment obligations in a timely manner.
P.A.S. Cotton Mills Private Limited (PASPL) was incorporated in
2005 to manufacture cotton yarn. The Company started commercial
production in April 2007 with a capacity spindlage of 18,000 which
has been gradually increased over the years to 24,048 spindles.
The product profile of the Company includes carded and combed
varieties of yarn in cone and hank forms which are entirely sold
in domestic as well as overseas markets. The Company manufactures
finer counts of yarn ranging from 40s to 100s.
Recent Results
The Company reported net profit of INR0.6 crore on an operating
income of INR40.1 crore during 2013-14 as against a net loss of
INR1.6 crore on an operating income of INR21.1 crore during 2012-
13.
PADMABHUSHAN KRANTIVEER: ICRA Reaffirms B Rating on INR220cr Loan
-----------------------------------------------------------------
ICRA has reaffirmed the rating of [ICRA]B to the INR220.00 crore
enhanced long term bank facilities (enhanced from INR150.00 crore)
of Padmabhushan Krantiveer Doctor Nagnathanna Naykawdi Hutatma
Kisan Ahir Sahakari Sakhar Karkhana Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term, Fund
Based 220.00 [ICRA]B; reaffirmed
The rating reaffirmation continues to factor in the long
operational history of the society along with location advantage
on account of presence in the high cane yield region. The rating
also factors in the robust growth in operating income during FY14
due to liquidation of sugar stock. ICRA also notes the improvement
in capital structure on account of reduced debt levels consequent
to lower working capital requirements; nevertheless gearing levels
remain high with weak coverage indicators. The mill also benefits
from high recovery of sugar due to better quality of cane in the
area as well as cane development initiatives resulting in improved
cane quality. The rating also factors in abolishment of levy sugar
quota and monthly release mechanism along with recent sugar export
subsidy and interest free loans to repay cane arrears granted by
the government which provides support to the liquidity profile of
the society.
The rating is however constrained by pressure on profitability due
to higher cane costs. The mill experienced delay in start of cane
crushing during SY14 owing to prolonged negotiation between farmer
association and mills in Maharashtra for finalising cane prices
which in turn impacted the sugar production. The rating also takes
into account high working capital intensity prevalent in the sugar
industry owing to high inventory levels; though the same has
moderated during FY14. Further, the rating continues to factor in
regulatory risks in the industry regarding cane pricing, export
regulations and agro climatic risks inherent in the industry.
Established in 1983, Padmabhushan Krantiveer Doctor Nagnathanna
Naykawdi Hutatma Kisan Ahir Sahakari Sakhar Karkhana Limited is
located in Walwa Taluka of Sangli district of Maharashtra. Founded
by veteran freedom fighter, Dr, Nagnathanna Nayakawdi, the society
has an installed capacity of 3,500 Tons Crushed per Day (TCD). It
currently does not have cogeneration and distillery activities.
The society procures cane from its command area comprising of
close to 15 villages of Walwa Taluka of Sangli District of
Maharashtra.
Recent results
As per its audited results for FY 2014, Hutatma reported profit
after tax (PAT) of INR0.09 crore on an operating income of
INR319.71 crore.
PELENA TRADING: CRISIL Suspends 'D' Rating on INR75MM Bank Loan
---------------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of Pelena
Trading Pvt Ltd (Pelena; part of the Pelena group).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 15 CRISIL D
Proposed Long Term
Bank Loan Facility 75 CRISIL D
The suspension of ratings is on account of non-cooperation by
Pelena with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, Pelena is yet to
provide adequate information to enable CRISIL to assess Pelena'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'.
For arriving at its rating, CRISIL has combined the business and
financial risk profiles of Pelena, Mangesh Enterprises Ltd (MEL),
and Meenal Enterprises Pvt Ltd (MEPL). This is because these
entities, collectively referred to as the Pelena group, are in the
same line of business, under a common management, and have common
suppliers.
The Pelena group commenced business operations through its
flagship firm Oriental Trading Corporation, a proprietorship
concern based in Mumbai (Maharashtra); this firm was set up in
1994 by Mr. Mohanlal Patel. Subsequently, two more firms, Vatsa
Enterprises and Bhagwati Enterprises, were set up in 1995.
However, the business of all three firms was acquired in 2010 by
Pelena, MEL, and MEPL, respectively, which were incorporated in
2008. The group currently comprises these three companies. The
Pelena group trades in carbide metal cutting tools (of different
sizes), measurement instruments, and fasteners such as screws,
nuts, bolts, and ball bearings.
PLANTRICH AGRI: CRISIL Puts B+ Rating on INR10MM Cash Loan
----------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to
the bank facilities of Plantrich Agri Tech Private Limited
(PATPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term
Bank Loan Facility 2.9 CRISIL B+/Stable
Packing Credit 50.0 CRISIL A4
Long Term Loan 1.6 CRISIL B+/Stable
Bank Guarantee 0.5 CRISIL A4
Cash Credit 10.0 CRISIL B+/Stable
The ratings reflect PATPL's modest scale and working capital
intensive nature of operations, and its weak financial risk
profile marked by high gearing and weak debt protection metrics.
These rating weaknesses are partially offset by the benefits
derived from the extensive industry experience of its promoters
and its established raw material linkages.
Outlook: Stable
CRISIL believes that PATPL will continue to benefit from its
promoters' extensive industry experience over the medium term. The
outlook may be revised to 'Positive' if the company significantly
improves its scale of operations and operating margins leading to
an improvement in its business risk profile. Conversely, the
outlook may be revised to 'Negative' if PATPL witnesses a fall in
its revenues and operating margins, or if the company undertakes a
larger than expected debt-funded capital expenditure (capex)
programme, or if there is a stretch in the working capital cycle
of the company, leading to deterioration its financial risk
profile.
Established in 1998 and based in Kottayam (Kerala), PATPL is
engaged in organic farming. The company is promoted by Mr.Bijumon
Kurien.
For 2013-14 (refers to the financial year April 1 to March 31),
PATPL reported a profit after tax (PAT) of INR2 million on a net
sales of INR188 million against a PAT of INR0.8 million on a net
sales of INR123 million for 2012-13.
RADHABALLABH SILK: ICRA Cuts Rating on INR4cr LT Loan to B-
-----------------------------------------------------------
ICRA has downgraded the long term rating on the INR3.00 crore cash
credit facilities and the INR4.00 crore term loans of Radhaballabh
Silk Mills Private Limited to [ICRA]B-.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term, Fund
Based-Cash Credit 3.00 [ICRA]B-; downgraded from
[ICRA]B
Long Term, Fund 4.00 [ICRA]B-; downgraded from
Based-Term Loans [ICRA]B
The rating downgrade takes into account the significant
deterioration in financial profile during FY14 due to significant
losses owing to higher overheads on account of significant
capacity expansion, although the utilisation remains low due to
weak demand. ICRA also notes the high supplier concentration and
limited bargaining power of the company. The scale of operations
continues to be small in an industry characterised by presence of
a large number of small players. Further, the profitability is
constrained due to the high input costs as a result of the
company's plant being within Mumbai's city limits. The rating
however favourably factors in the long standing experience of the
promoters in textile industry, specifically in air jet texturing
of polyester yarn. This has enabled the company to forge strong
relations with its customers, resulting in regular order flows.
Radhaballabh Silk Mills Private Limited (RSMPL), promoted by Mr.
Radhaballabh Kejriwal, was incorporated in the year 1987, and was
primarily engaged in trading of yarn and fabrics. In 1988, the
company acquired machinery for "Air Jet Texturing", which was a
relatively new technology back then, to process polyester yarn.
The air textured yarn finds application in various segments
including apparel, upholstery, car seat covers, luggage etc. In
2001, the company further expanded its operations to include
weaving of yarn to manufacture grey fabric, by using the in-house
processed yarn.
RSMPL is headquartered in Mumbai, and also has its manufacturing
setup in the same premises, which comprises of 175 spindles for
yarn texturing and 27 weaving machines. The company has a
production capacity of 75,000 kgs/ month for yarn processing and
75,000 meter per month for fabric weaving. RSMPL manufactures yarn
under various deniers, ranging from 200 to 1,200 and specialises
in tailor-made products.
Recent results
As per its audited results for FY 2014, RSMPL reported net loss of
INR1.44 crore on operating income of INR15.77 crore.
S.B EQUIPMENTS: ICRA Suspends B+ Rating on INR6cr Fund Based Loan
-----------------------------------------------------------------
ICRA has suspended [ICRA]B+ rating assigned to the INR6 crore fund
based limits of S.B Equipments. ICRA has also suspended [ICRA]A4
rating assigned to the INR2.5 crore non fund based limits of S.B
Equipments. The suspension follows ICRA's inability to carry out a
rating surveillance in the absence of the requisite information
from the company.
Incorporated in the year 2000, S.B Equipments is a partnership
firm engaged in the business of manufacturing of various products
such as Mosquito Repellents, First Aid Kits, Casualty Bags, Haver
Sack etc. mainly for Army and other departments of Government of
India. The firm has two manufacturing facilities located in
Bahadurgarh, Haryana.
S.R. EDUCATIONAL: CRISIL Rates INR58.5MM Term Loan at 'B'
---------------------------------------------------------
CRISIL has revoked the suspension of its rating on the long-term
bank facility of S.R. Educational and Welfare Trust (SRET), and
has assigned its 'CRISIL B/Stable' rating to the facility. CRISIL
had, on December 8, 2014, suspended the rating as SRET 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 its bank facility.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Overdraft Facility 6.4 CRISIL B/Stable (Assigned;
Suspension revoked)
Term Loan 58.5 CRISIL B/Stable (Assigned;
Suspension revoked)
Proposed Long Term 45.1 CRISIL B/Stable (Assigned;
Bank Loan Facility Suspension revoked)
The rating reflects low occupancy at SRET's institutes on account
of intense competition in the education sector and susceptibility
of the trust's operating performance to the stringent regulatory
environment in the sector. These rating weaknesses are partially
offset by SRET's moderate financial risk profile and its
promoters' extensive experience in the education sector.
Outlook: Stable
CRISIL believes that SRET will continue to benefit over the medium
term from its promoters' extensive experience in the education
sector. The outlook may be revised to 'Positive' if the trust
reports substantial revenue and profitability, driven by increase
in intake of students for its new courses, resulting in improved
liquidity. Conversely, the outlook may be revised to 'Negative' in
case of a substantial decline in student intake or any further
large debt-funded capital expenditure, resulting in deterioration
in the trust's financial risk profile.
SRET, promoted by Dr. Sanjay Nijhawan, was incorporated in 2006 as
an educational charitable trust. SRET has been operating an
engineering and management college since 2007 under the name of
Delhi Institute of Technology and Management (DITM) at Ganaur in
Sonepat (Haryana) and recently added diploma courses. Its courses
are approved by All India Council for Technical Education (AICTE).
DITM is affiliated to Deen Bandhu Chhotu Ram University of Science
and Technology (DBCUT), Murthal (Haryana).
SRET reported a net surplus of INR13.1 million on net fee income
of INR121 million for 2013-14 (refers to financial year, April 1
to March 31), against a net surplus of INR9.8 million on net fee
income of INR121 million for 2012-13.
SAGAR INDUSTRIES: ICRA Reaffirms B+ Rating on INR14.70cr Loan
-------------------------------------------------------------
ICRA has reaffirmed the [ICRA]B+ has been reaffirmed to the
INR14.70 crore fund-based cash credit facility and INR0.27 crore
fund-based term loan facility of Sagar Industries.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit Limits 14.70 [ICRA]B+; reaffirmed
Term Loan Facility 0.27 [ICRA]B+; reaffirmed
The rating continues to be constrained by Sagar Industries' (SI)
weak financial profile characterized by weak coverage indicators
and thin profitability margins on account of limited value
addition in the business operations. The rating is further
constrained by the susceptibility of cotton prices to seasonality
and government regulations on MSP and export quota which together
with high competitive industry environment further exerts pressure
on margins. Further, being a partnership firm, any substantial
withdrawal from the capital account can have an adverse impact on
the capital structure of the firm.
The rating, however, favorably factors in the long experience of
partners in the cotton ginning industry and the advantages arising
from the firm's proximity to raw material sources which ensures
easy availability of raw cotton.
Incorporated in 2012, Sagar Industries. is engaged in ginning and
pressing operations. The firm is promoted and managed by Mr.
Piyush Shah, Mr Sevanti Shah along with other family members with
experience in the cotton ginning industry. The firm's
manufacturing facility is located at Bhavnagar in Gujarat and has
thirty eight ginning machine.
Recent Results
For the year ended 31st March, 2014, the firm reported an
operating income of INR85.57 crore and profit after tax (PAT) of
INR0.30 crore.
SAHARA GROUP: Sebi Makes Fresh Bid to Find Investors For Refunds
----------------------------------------------------------------
The Times of India reports that making a fresh bid to locate
Sahara investors eligible for refunds, capital markets regulator
Sebi has asked the bondholders of two Sahara firms to submit their
claims along with the proof of investments.
The latest exercise follows two similar attempts made by the
Securities and Exchange Board of India (Sebi) in the past, the
report says.
The report relates that the first exercise began in August last
year, when the investors were asked to submit their refund claims
by September 30, followed by a similar exercise in December when
the bondholders were required to approach Sebi with their
applications by January 2015.
According to the report, there is no specific deadline as yet in
the latest attempt by Sebi, which has been asked by the Supreme
Court to refund money collected from the bondholders of Sahara
India Real Estate Corp Ltd (SIRECL) and Sahara Housing Investment
Corp Ltd (SHICL), after verifying the credentials of the
investors.
While the details of the second exercise to locate eligible
investors could not be ascertained, Sebi had received 4,900 refund
claims in its first attempt last year from the bondholders of two
Sahara firms, which had raised INR25,780 crore from about three
crore investors, TOI relates.
While Sahara firms were asked to deposit the money with Sebi for
further repayment to the investors, the group claims to have
already refunded about 95 per cent investors directly. The group
has, however, already deposited over INR12,000 crore in the Sebi-
Sahara Refund Account, although the regulator has been able to
repay only a small amount to investors as yet, according to the
report.
Sahara chairman Subrata Roy, as also two top executives, have been
in Tihar Jail for more than a year and the group was asked by the
apex court to deposit INR5,000 in cash and bank guarantee for a
similar amount for their release, the report discloses. While a
portion of this amount has been deposited, the group is exploring
sale of further assets to arrange funds, notes TOI.
TOI reports that Sahara also recently backed Sebi's claim before a
US court to bring back nearly USD13 million from sale proceeds of
a business jet of the crisis-hit group.
In fresh public notices, Sebi has again asked the investors
holding Real Estate, Abode and Nirmaan Bonds of SIRECL, as also
those holding Multiple, Income and Housing Bonds of SHICL to
submit their applications along with the necessary documentary
proofs for the refund.
According to the report, a Sahara spokesperson said the group has
repaid around INR23,000 crore to the bondholders directly, still
it has already deposited more than INR12,000 crore to Sebi's
refund account.
The group further said Sebi could repay only about INR2 crore
after three rounds of media advertisements across 50-60
publications that resulted in total demand worth about
INR20 crore, as most of the investors have already got back their
money, adds TOI.
As reported in the Troubled Company Reporter-Asia Pacific on
Feb. 15, 2013, The Economic Times said the Securities & Exchange
Board of India (Sebi) on Feb. 13, 2013, seized bank accounts and
properties of two Sahara Group companies and its promoter, Subrata
Roy. The move comes following the group's failure to refund
INR24,000 crore to investors as directed by the Supreme Court.
Sahara Group operates businesses ranging from finance, housing,
manufacturing and the media. Sahara also sponsors the Indian
hockey team and owns a stake in Formula One racing team, Force
India.
SAKTHI STEEL: CRISIL Reaffirms B+ Rating on INR100MM Cash Loan
--------------------------------------------------------------
CRISIL's ratings on the bank facilities of Sakthi Steel Industries
Ltd (SSIL) continue to reflect SSIL's below-average financial risk
profile, marked by high gearing and weak debt protection metrics,
and its susceptibility to intense competition in the secondary
steel industry. These rating weaknesses are partially offset by
the extensive experience of the company's promoters in the steel
industry.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 100 CRISIL B+/Stable (Reaffirmed)
Letter of Credit 160 CRISIL A4 (Reaffirmed)
Long Term Loan 80 CRISIL B+/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that SSIL will continue to benefit over the medium
term from the extensive industry experience of its promoters and
its established market position in Tamil Nadu. The outlook may be
revised to 'Positive' if the company improves its profitability
while sustaining the growth in its revenue, leading to a
substantial increase in its cash accruals and to improvement in
its capital structure and debt protection metrics. Conversely, the
outlook may be revised to 'Negative' if SSIL's revenue and
profitability decline sharply due to any downturn in the
construction sector, or if it undertakes a large debt-funded
capital expenditure programme, resulting in further weakening of
its financial risk profile.
Established in 2010, SSIL manufactures and trades in steel
billets. The company is promoted by Mr. K A Anandh.
SSIL reported a profit after tax (PAT) of INR4.4 million on net
sales of INR1.23 billion for 2013-14 (refers to financial year,
April 1 to March 31), as against a PAT of INR4.7 million on net
sales of INR971.4 million for the previous year.
SATNAM PSYLLIUM: ICRA Suspends B+ Rating on INR3cr Cash Loan
------------------------------------------------------------
ICRA has suspended the [ICRA]B+ rating assigned to the INR4.60
crore long term fund based limits and [ICRA]A4 rating assigned to
the INR8.00 crore short term fund based limits of Satnam Psyllium
Industries. The suspension follows ICRA's inability to carry out a
rating surveillance in the absence of the requisite information
from the company.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 3.00 [ICRA]B+ suspended
Stand by Limit 1.60 [ICRA]B+ suspended
Export Packing Credit 8.00 [ICRA]A4 suspended
Satnam Psyllium Industries (SPI) was established in 2001 and the
firm is primarily engaged in the processing of psyllium husk
(Isabgol husks) powder from agriculture product called psyllium
seeds or isabgol seeds. The firm is currently managed by Mr.
Chirag Patel and Mr. P. R. Patel. The processing plant is located
at Unjha, Gujarat and has a capacity to process 11,040 metric
tonnes per annum (TPA) of seeds.
SILIGURI BUILDERS: ICRA Withdraws B Rating on INR7cr Loan
---------------------------------------------------------
ICRA has withdrawn the suspended rating of [ICRA]B assigned to the
INR7.00 crore fund based bank facility of Siliguri Builders
Private Limited. As per ICRA's policy on withdrawals, ICRA can
withdraw the rating in case the rating remains suspended for more
than three years.
STRESCON INDUSTRIES: CRISIL Ups Rating on INR72.4MM Loan to B+
--------------------------------------------------------------
CRISIL has upgraded its rating on the long-term bank facilities of
Strescon Industries Ltd (SIL) 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 20 CRISIL A4 (Reaffirmed)
Cash Credit 45 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
Letter of Credit 20 CRISIL A4 (Reaffirmed)
Term Loan 72.4 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
The rating upgrade reflects improvement in SIL's operating margin.
The margin improved to 16.9 per cent in 2013-14 (refers to
financial year, April 1 to March 31) from 5.3 per cent in 2012-13.
The company has also maintained its comfortable financial risk
profile, marked by a moderate net worth, low gearing, and moderate
debt protection metrics; its gearing is expected to improve over
the medium term as it has no debt-funded capital expenditure
(capex) plans.
The ratings reflect SIL's small scale, and working-capital-
intensive nature, of operations and customer concentration in its
revenue profile. These rating weaknesses are partially offset by
the extensive experience of SIL's promoters in the concrete
sleeper industry, and the company's comfortable financial risk
profile, marked by low gearing and moderate debt protection
metrics.
Outlook: Stable
CRISIL believes that SIL will continue to benefit over the medium
term from its promoters' extensive industry experience. The
outlook may be revised to 'Positive' if the company reports a
significant increase in its scale of operations while sustaining
its profitability and improving its working capital management,
leading to better liquidity. Conversely, a significant stretch in
SIL's working capital cycle, low accruals, or large debt-funded
capex, leading to weakening of the company's financial risk
profile, especially its liquidity, may result in the outlook being
revised to 'Negative'.
Incorporated in 1978 in Kolkata, SIL manufactures railway
sleepers. The company ventured into manufacturing of sleepers from
1991. SIL primarily caters to the Indian Railways, which
contributed around 90 per cent of the company's revenue in 2013-
14. Its day-to-day operations are managed by its promoter-
director, Mr. Sabyasachi Munshi.
SUN ENTERPRISE: ICRA Suspends B+ Rating on INR5cr Cash Loan
-----------------------------------------------------------
ICRA has suspended the [ICRA]B+ rating assigned to the INR7.00
crore long term fund based limits and [ICRA]A4 rating assigned to
the INR10.00 crore short term fund based limits of Sun Enterprise.
The suspension follows ICRA's inability to carry out a rating
surveillance in the absence of the requisite information from the
company.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 5.00 [ICRA]B+ suspended
Stand by Limit 2.00 [ICRA]B+ suspended
Export Packing Credit 10.00 [ICRA]A4 suspended
Sun Enterprise (SE) was established in 1995 and the firm is
primarily engaged in the processing of psyllium husk (Isabgol
husks) powder from agriculture product called psyllium seeds or
isabgol seeds. The firm is currently managed by Mr. Praveen Patel,
Mr. Bharat Patel and Mr. Vishnu Patel. The processing plant is
located at Unjha, Gujarat and has a capacity to process 8400
metric tonnes per annum (MTPA) of seeds.
SUN PSYLLIUM: ICRA Suspends B+ Rating on INR5.0cr Cash Loan
-----------------------------------------------------------
ICRA has suspended the [ICRA]B+ rating assigned to the INR7.00
crore long term fund based limits and [ICRA]A4 rating assigned to
the INR10.00 crore short term fund based limits of Sun Psyllium
Industries. The suspension follows ICRA's inability to carry out a
rating surveillance in the absence of the requisite information
from the company.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 5.00 [ICRA]B+ suspended
Stand by Limit 2.00 [ICRA]B+ suspended
Export Packing Credit 10.00 [ICRA]A4 suspended
Sun Psyllium Industries (SPI) was established in 1989 and the firm
is primarily engaged in the processing of psyllium husk (Isabgol
husks) powder from agriculture product called psyllium seeds or
isabgol seeds. The firm is currently managed by Mr. Praveen Patel,
Mr. Bharat Patel and Mr. Vishnu Patel. The processing plant is
located at Unjha, Gujarat and has a capacity to process 8400
metric tonnes per annum (TPA) of seeds.
SUPER PSYLLIUM: ICRA Suspends B+ Rating on INR3cr Cash Credit
-------------------------------------------------------------
ICRA has suspended the [ICRA]B+ rating assigned to the INR4.60
crore long term fund based limits and [ICRA]A4 rating assigned to
the INR8.00 crore short term fund based limits of Super Psyllium.
The suspension follows ICRA's inability to carry out a rating
surveillance in the absence of the requisite information from the
company.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 3.00 [ICRA]B+ suspended
Stand by Limit 1.60 [ICRA]B+ suspended
Export Packing Credit 8.00 [ICRA]A4 suspended
Super Psyllium (SP) was established in 2005 and the firm is
primarily engaged in the processing of psyllium husk (Isabgol
husks) powder from agriculture product called psyllium seeds or
isabgol seeds.
The firm is currently managed by Mr. Chirag Patel and Mr. P. R.
Patel. The processing plant is located at Unjha, Gujarat and has a
capacity to process 11,040 metric tonnes per annum (TPA) of seeds.
TAURIAN INFRASTRUCTURE: CRISIL Suspends D Rating on INR180MM Loan
-----------------------------------------------------------------
CRISIL has suspended its rating on the bank facilities of Taurian
Infrastructure Pvt Ltd (TIPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Rupee Term Loan 180 CRISIL D
The suspension of rating is on account of non-cooperation by TIPL
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, TIPL is yet to
provide adequate information to enable CRISIL to assess TIPL'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'.
TIPL, set up by Mr. Amith Bajla, operates a residential-cum-day-
boarding co-educational school, Taurian World School. The school,
based in Jharkhand, offers both Indian and UK curriculum to
students.
TRIVIKRAM TOBACCO: CRISIL Suspends B Rating on INR100MM Cash Loan
-----------------------------------------------------------------
CRISIL has suspended its rating on the bank facilities of
Trivikram Tobacco Private Limited (TTPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 100 CRISIL B/Stable
Inventory Funding
Facility 50 CRISIL B/Stable
The suspension of rating is on account of non-cooperation by TTPL
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, TTPL is yet to
provide adequate information to enable CRISIL to assess TTPL'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'.
TTPL was set up in September 2009 as a proprietorship firm by Mr.
Narasimha Rao. It trades in, and processes tobacco, in Guntur
(Andhra Pradesh), for VST Industries Limited (rated CRISIL
AA+/FAAA/Stable/CRISIL A1+) and for local export agents. The
company deals mainly in non-smoking tobacco varieties like Flue
Cured Virginia. TTPL commenced commercial operations in July 2010.
V.P.M. SANKAR: CRISIL Cuts Rating on INR65MM Cash Loan to B
-----------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank loan
facilities of V.P.M. Sankar and Son (VPMS) to 'CRISIL B/Stable'
from 'CRISIL B+/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 65 CRISIL B/Stable (Downgraded
from 'CRISIL B+/Stable')
Long Term Loan 10 CRISIL B/Stable (Downgraded
from 'CRISIL B+/Stable')
The rating downgrade reflects CRISIL's belief that VPMS's
operating performance will remain weak over the medium term due to
intense competition in the gold jewellery retailing industry. The
firm's revenue declined by 22 per cent year-on-year in 2013-14
(refers to financial year, April 1 to March 31) owing to intense
competition; the revenue is expected to remain flat over the
medium term. Weakening of the firm's operating performance has
resulted in a weaker interest coverage ratio, estimated at around
1.3 times for 2014-15.
The rating reflects VPMS's below-average financial risk profile,
marked by a small net worth, high gearing, and weak debt
protection metrics. The rating also factors in the firm's small
scale of operations in the intensely competitive gold jewellery
retailing market. These rating weaknesses are partially offset by
the extensive industry experience of the firm's proprietor.
Outlook: Stable
CRISIL believes that VPMS will continue to benefit over the medium
term from the extensive industry experience of its proprietor. The
outlook may be revised to 'Positive' if the firm reports a healthy
increase in its scale of operations and profitability, leading to
significant and sustained improvement in its cash accruals and
capital structure. Conversely, the outlook may be revised to
'Negative' in case of low accruals, large debt-funded capital
expenditure, or substantial capital withdrawals, resulting in
weakening of VPMS credit risk profile.
Set up in 2008 as a proprietorship firm, VPMS retails gold and
silver jewellery. The firm has one showroom each in Srivilliputur
and Rajapalayam (Tamil Nadu). VPMS is managed by Mr. V.P.M.S
Thangaprabhu.
VEL MURUGAN: CRISIL Cuts Rating on INR135MM Foreign LOC to D
------------------------------------------------------------
CRISIL has downgraded its ratings to the bank facilities of
Vel Murugan Timber Industries (VTI, part of Velmurugan group) to
'CRISIL D/CRISIL D' from 'CRISIL B/Stable/CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Foreign Letter 135 CRISIL D (Downgraded from
of Credit 'CRISIL A4')
Proposed Long Term 41 CRISIL D (Downgraded from
Bank Loan Facility 'CRISIL B/Stable')
Secured Overdraft 24 CRISIL D (Downgraded from
Facility 'CRISIL B/Stable')
The rating downgrade reflects instances of devolvement of the
Velmurugan group's foreign letters of credit (FLCs) which were not
regularised for over 30 days.
The group also has below-average financial risk profile, marked by
weak capital structure, its modest scale of operations in an
intensely competitive timber trading and processing industry.
However the group beneifts from the extensive experience of
Velmurugan group's partners in the timber trading & processing
industry
For arriving at the ratings, CRISIL has combined the business and
financial risk profiles of Vel Murugan Timber Industries (VTI) and
Vel Murugan Timber Traders (VTT). This is because both these
firms, together referred to as the Velmurugan group, are in a
similar line of business, and have the same promoters and
significant business synergies.
The Velmurugan group is based in Chennai (Tamil Nadu). It trades
in and processes timber. While VTT is involved only in timber
trading, VTI is involved in both trading and processing of timber.
The group's day-to-day operations are managed by Mr. Paneer Selvam
and Mr. S Sridhar.
VEL MURUGAN: CRISIL Cuts Rating on INR100MM Foreign LOC to 'D'
--------------------------------------------------------------
CRISIL has downgraded its ratings to the bank facilities of Vel
Murugan Timber Traders (VTT, part of Velmurugan group) to 'CRISIL
D/CRISIL D' from 'CRISIL B/Stable/CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Foreign Letter
of Credit 100 CRISIL D (Downgraded from
'CRISIL A4')
Proposed Long Term
Bank Loan Facility 76 CRISIL D (Downgraded from
'CRISIL B/Stable')
Secured Overdraft
Facility 24 CRISIL D (Downgraded from
'CRISIL B/Stable')
The rating downgrade reflects instances of devolvement of the
Velmurugan group's foreign letters of credit (FLCs) which were not
regularised for over 30 days.
The group also has below-average financial risk profile, marked by
weak capital structure, its modest scale of operations in an
intensely competitive timber trading and processing industry.
However the group beneifts from the extensive experience of
Velmurugan group's partners in the timber trading & processing
industry
For arriving at the ratings, CRISIL has combined the business and
financial risk profiles of Vel Murugan Timber Industries (VTI) and
Vel Murugan Timber Traders (VTT). This is because both these
firms, together referred to as the Velmurugan group, are in a
similar line of business, and have the same promoters and
significant business synergies.
The Velmurugan group is based in Chennai (Tamil Nadu). It trades
in and processes timber. While VTT is involved only in timber
trading, VTI is involved in both trading and processing of timber.
The group's day-to-day operations are managed by Mr. Paneer Selvam
and Mr. S Sridhar.
VIJAYASRI ORGANICS: CRISIL Ups Rating on INR230.1MM LT Loan to B+
-----------------------------------------------------------------
CRISIL has upgraded its rating on the long-term bank facilities of
Vijayasri Organics Ltd (VOL) to 'CRISIL B+/Stable' from 'CRISIL
B/Stable' and has reaffirmed its rating on the company's short-
term bank facilities at 'CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 5 CRISIL A4 (Reaffirmed)
Cash Credit 130 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
Letter of Credit 150 CRISIL A4 (Reaffirmed)
Long Term Loan 230.1 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
Proposed Cash
Credit Limit 84.9 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
The rating upgrade reflects the improvement in VOL's credit risk
profile with a sustained increase in its profitability margins
resulting in an improvement in its debt protection metrics. The
company's operating profit margin is estimated to have increased
by around 450 basis points year-on-year to 19.0 per cent in 2014-
15 (refers to financial year, April 1 to March 31). The increase
in the operating margin is driven by increased revenue from
contract manufacturing, where the company registers higher
margins. Consequently, the company's interest coverage ratio is
estimated to have increased to 2.9 times in 2014-15 from 2.3 times
in 2013-14. CRISIL believes that VOL will sustain the improvement
in its profit margins and debt protection metrics over the medium
term, supported by its continued focus on contract manufacturing
and cost-reduction initiatives.
The ratings reflect VOL's large working capital requirements, high
degree of customer concentration in its revenue profile, and its
exposure to intense competition in the bulk drugs manufacturing
industry. These rating weaknesses are partially offset by the
extensive experience of VOL's promoters in the pharmaceutical
industry, and the company's above-average financial risk profile
marked by its low gearing and above-average debt protection
metrics.
Outlook: Stable
CRISIL believes that VOL will continue to benefit over the medium
term from its promoters' extensive industry experience and its
established relationships with customers. The outlook may be
revised to 'Positive' in case of a substantial and sustained
increase in the company's scale of operations, while it maintains
its profitability margins, or sustained improvement in its working
capital management. Conversely, the outlook may be revised to
'Negative' in case of a steep decline in VOL's profitability
margins, or significant deterioration in its capital structure
caused most likely by large debt-funded capital expenditure or a
stretch in its working capital cycle.
VOL was set up in 2005 by Mr. S V J Raju, Mr. K V Rama Rao, and
Mr. Prakash Reddy. The company manufactures bulk drugs and drug
intermediates. Its manufacturing unit is in Visakhapatnam (Andhra
Pradesh).
=================
I N D O N E S I A
=================
KAWASAN INDUSTRI: Fitch Gives Final B+ Rating on 2019 Notes
-----------------------------------------------------------
Fitch Ratings has assigned Indonesia-based industrial estate
developer PT Kawasan Industri Jababeka Tbk's (Jababeka; B+/Stable)
USD70m 7.5% senior unsecured notes due in 2019 a final rating of
'B+' with a Recovery Rating of 'RR4'. The final rating follows the
receipt of documents conforming to information already received,
and is in line with the expected rating assigned on 28 April 2015.
The notes are issued by wholly owned subsidiary Jababeka
International B.V., and guaranteed by Jababeka and certain
subsidiaries. The new notes will be consolidated and form a single
series with the USD190m 7.5% Notes due in 2019.
The notes are rated at the same level as Jababeka's senior
unsecured debt rating as they represent direct, unconditional,
unsecured and unsubordinated obligations of the company.
KEY RATING DRIVERS
Solid Interest Coverage: Jababeka's rating reflects strong
interest coverage from the recurring income that comes from its
130MW power plant. The plant is critical to Jababeka's overall
profile because its long-term power purchase agreement (PPA) with
state electricity company PT Perusahaan Listrik Negara (PLN; BBB-
/Stable) provides good earnings visibility and the U.S. dollar-
denominated cash flows are a natural hedge for its U.S. dollar
borrowings. As of end-2014, the recurring coverage ratio
(recurring EBITDA/ interest expense) stood at about 1.2x. Fitch
expects the recurring coverage ratio to improve slightly towards
end-2015 in line with more efficient funding costs and a
proportionate increase in recurring income in Jababeka's other
infrastructure services.
Limited Capex, Manageable Liquidity: Jababeka plans to develop a
second power plant, but will proceed only when it obtains a PPA
with PLN. Excluding capex for the second power plant, Jababeka's
maintenance capex is relatively low at about USD10m each in 2015
and 2016. This is mainly for dry port equipment, which is scalable
depending on the dry port's productivity. The discretionary nature
of the company's land acquisitions and its well-distributed debt
maturity will allow Jababeka to accumulate cash and strengthen its
liquidity profile.
Presales Target Challenging: Fitch expects 2015 to continue to be
challenging for property developers because of modest economic
growth, and, particularly for industrial estate developers, lower
foreign direct investment (FDI) flows than previous years. In
Fitch's view, Jababeka's large, low-cost land bank supports its
healthy margins, which will moderate the impact from lower
presales and help the company to maintain sufficient liquidity.
Longer Working Capital Cycle: Fitch expects Jababeka's working
capital cycle to lengthen as the proportion of residential
property sales increases - a result of weaker demand for
industrial land. The cash collection cycle for residential sales
is longer than that for industrial sales because developers
usually offer payment plans with longer repayment terms to attract
buyers. However, Fitch believes risk is mitigated by the fact that
Jababeka already owns land inventory to continue presales in its
flagship Cikarang estate over the medium term, and because the
typical 30% down payment should suffice to fund construction.
Long-Term Diversification Benefits: Jababeka and Singapore's
Sembcorp are developing a new industrial complex in Kendal,
Central Java, which is modelled after the Cikarang estate. Tenants
relocating labour-intensive production out of Cikarang will be
able to take advantage of the much lower minimum wage in Central
Java. Upon successful execution, Kendal will provide Jababeka with
diversification benefits and a new base for future growth. Fitch
believes execution risk for this project is manageable because
Jababeka typically will use proceeds from presales to develop a
new estate in stages. Jababeka is aiming to launch presales in
Kendal in in 2015 and is targeting around IDR250bn in presales in
the same year.
Project Concentration and Cyclicality: Jababeka's rating is
primarily constrained by concentration risk and high exposure to
the industrial estate development business. Cikarang will continue
to contribute over 80% in marketing sales in the next 24 months,
with industrial space in the estate accounting for more than 60%
of marketing sales. The remainder of marketing sales will stem
from its Kendal estate, as well as residential and commercial
sales in Cikarang.
KEY ASSUMPTIONS
Fitch's key assumptions within our rating case for the issuer
include:
-- Cikarang industrial sales volume of 250,000 sqm in 2015 and
2016
-- Kendal industrial sales volume of 125,000 sqm in 2015 and
250,000 sqm in 2016
-- Its power plant operates at around 90% utilisation rate
RATING SENSITIVITIES
Negative: Future developments that may, individually or
collectively, lead to negative rating action include:
-- Decline in recurring EBITDA/ interest expense to below
1x on a sustained basis (2014: 1.2x)
-- Decline in presales/ gross debt to below 40% on a sustained
basis (2014: 38%). This trigger provides Fitch with a way
to monitor Jababeka's development sales, which are an
important support for its 'B+' rating.
No positive rating action is expected in the next 24 months due to
project concentration and high dependence on sales of industrial
space.
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J A P A N
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TOKYO ELECTRIC: Moody's Affirms 'Ba3' CFR, Outlook Negative
-----------------------------------------------------------
Moody's Japan K.K. affirmed all of Tokyo Electric Power Company,
Incorporated's (TEPCO) ratings, including the Ba3 corporate family
rating, Ba2 senior secured bond rating, B1 issuer rating, and the
Not Prime commercial paper rating following its announcement of
corporate restructuring. The outlook remains negative.
The following were affirmed:
-- Corporate family rating at Ba3
-- Long-term issuer rating at B1
-- Senior secured debt rating at Ba2
-- Commercial paper program at NP
"TEPCO's ratings are not impacted by the company's announcement
that it will reorganize its corporate structure," said Moody's
Vice President -- Senior Analyst Mariko Semetko. The affirmation
reflects steps included in the overhaul to protect existing
bondholders. "In short, the existing public bond holders will not
be materially worse off as a result of the reorganization," added
Semetko.
On 1 May 2015 TEPCO announced a restructuring that will divide the
company into four entities: the holding company and three
subsidiaries focused respectively on fuel and thermal power
generation, transmission and distribution, and retail and customer
service. The overhaul takes effect on 1 April 2016.
TEPCO expects to have total outstanding debt of JPY6.6 trillion
when the restructuring takes place. It is Moody's understanding
that TEPCO will put in place intercompany bonds that will mirror
the terms of and back up these external debt.
Moody's believes that the credit enhancements will likely allow
the company to maintain a similar level of probabilities of
default and recovery for the existing senior secured bonds. Even
though the restructuring will split up the assets that underpin
its senior secured public bonds among the four newly established
entities, the transfer of the assets to the subsidiaries will be
counterbalanced by new senior secured intercompany bonds issued to
the holding company by the transmission and distribution unit.
The affirmation principally contemplates the impact of the
corporate restructuring and the debt protection measures as
announced by the company.
As a government-related issuer (GRI), TEPCO's Ba3 corporate family
rating reflects a baseline credit assessment (BCA) of caa2, the
very high dependence between the government and TEPCO, and high
support probability from the Government of Japan (A1, stable)
under Moody's joint default analysis (JDA) approach.
TEPCO's very weak standalone financial profile is reflected in its
caa2 BCA, and as such ongoing government support is critical to
the rating. Without the direct and indirect support of the
national government and the Nuclear Damage Compensation and
Decommissioning Facilitation Corporation (the Fund), TEPCO would
not be able to meet its extensive compensation and decontamination
obligations. The government's strong commitment to TEPCO's
management - as indicated by the government's past approvals of
the company's Comprehensive Special Business Plans and capital
injections from tax payers through the Fund -- supports its credit
quality.
All of the nuclear power related liabilities will reside at the
holding company after the corporate split, and will continue to
pressure the holding company's credit quality over the long term.
TEPCO's negative rating outlook reflects our view that significant
uncertainties and impediments remain in regards to TEPCO's ability
to recover stable and sustainable financial metrics. Given
significant public opposition, restarting its reactors at
Kashiwazaki-Kariwa remains uncertain. In our view, without the
restart, TEPCO may need to apply for additional rate increases to
achieve stable and sustainable profitability in the future despite
continuous cost reductions. An additional rate increase could face
considerable public opposition.
While the Comprehensive Plan incorporates the costs for
decommissioning the Fukushima reactors, the costs are likely to
climb. The scale and nature of the accident are unprecedented and
the eventual costs are highly uncertain. Furthermore, Moody's
notes that the government will at some point withdraw from owning
TEPCO. The industry also faces continuous deregulation, and
heightened competition.
Given the negative rating outlook, an upgrade of TEPCO's rating is
unlikely in the near term without significant new credit
supportive developments. The rating outlook could return to stable
if Moody's comes to believe the company can achieve a sustainable
level of profitability and appropriate financial metrics, while
the government and creditors continue to demonstrate their
commitment and support for the financial and operational viability
of the company.
The ratings could face further downward pressure if the
government's intention to support TEPCO changes or becomes less
certain, if liquidity erodes for any reason including a reduction
in creditor support, if delays or substantial uncertainties emerge
over the approval and the implementation of the revised
Comprehensive Plan, or if nuclear restart is protracted without
countermeasures. Depending upon our assessment at the time, the
ratings of the company could also be impacted by a change in the
rating or outlook of the Government of Japan, or our assessment of
any negative changes in the GRI factors.
The methodologies used in these ratings were Government-Related
Issuers (Japanese) published in November 2014, and Regulated
Electric and Gas Utilities (Japanese) published in February 2014.
Tokyo Electric Power Company, Incorporated, headquartered in
Tokyo, is the largest electric utility in Japan in terms of power
generation and sales.
===============
P A K I S T A N
===============
PAKISTAN: Moody's Says External Liquidity Position Strengthens
--------------------------------------------------------------
Moody's Investors Service said in its new report that Pakistan's
(Caa1 positive) external liquidity position is strengthening and
the likelihood of default is receding, as evidenced by a recovery
in foreign reserves over the last year.
Moody's notes that the authorities' efforts toward fiscal
consolidation have resulted in a shrinking budget deficit. While
gross borrowing requirements are high, the government has moved to
lengthen the maturity of its debt burden and diversify borrowing
away from the banking system.
The report constitutes an annual update to investors and is not a
rating action.
Pakistan is also moving forward on structural reforms under its
program with the International Monetary Fund (IMF). These reforms
focus primarily on fiscal consolidation, debt management, and
addressing structural constraints in the energy sector.
These factors were taken into account in Moody's change in the
outlook on Pakistan's government bond ratings to positive from
stable on 25 March 2015, pointing towards a declining probability
of default.
Moody's conclusions were contained in its just-released credit
analysis, titled "Pakistan" and which examines the sovereign in
four categories: economic strength, which is assessed as "moderate
(-)"; institutional strength "very low (+)"; fiscal strength "very
low (-)"; and susceptibility to event risk "high".
The new report notes that Pakistan's Caa1 rating reflects
constraints in Moody's methodological assessment that mainly lie
in the government's very low fiscal strength and high
susceptibility to event risks.
Moody's report further points out that China's recent pledge to
invest $46 billion in the China-Pakistan Economic Corridor --
which aims to connect the two countries via rail, road, and an oil
and gas pipeline -- is credit positive, and will spur investment
activity, boost bilateral trade flows and help ease Pakistan's
energy deficit over time.
Upward rating pressure would arise from (1) continued progress
under the government's IMF program; (2) further fundamental
strengthening in Pakistan's external liquidity position; and (3)
progress on structural reforms that would remove infrastructure
impediments and supply-side bottlenecks, and bolster growth.
Conversely, a downward rating pressure could stem from: (1) a
stalling of the IMF program; (2) a deterioration in the external
payments position; or (3) heightened political instability.
*********
Tuesday's edition of the TCR-AP delivers a list of indicative
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*********
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-
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Valerie U. Pascual, Marites O. Claro, Joy A. Agravante, Rousel
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Copyright 2015. All rights reserved. ISSN: 1520-9482.
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