/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/150527.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 27, 2015, Vol. 18, No. 103 Headlines A U S T R A L I A ALC GROUP: Alleged Ponzi Scheme Operator Faces Court QRXPHARMA LIMITED: First Creditors' Meeting Slated For June 3 TASTE GRILL: First Creditors' Meeting Slated For June 2 * Insolvent Businesses Could Be Saved With New Safe Harbour Laws H O N G K O N G HANERGY HOLDING: Listed Unit Fails to Repay Bank Loans I N D I A ACE KUDALE: CRISIL Reaffirms 'B' Rating on INR187MM Loan ALWAR ROLLER: CARE Assigns 'B' Rating to INR6.25cr LT Loan ANANT EDUCATIONAL: CRISIL Cuts Rating on INR77.5MM Loan to B- BHUSHAN AUTOMOBILES: CRISIL Reaffirms B+ Rating on INR74MM Loan BRAHMAPUTRA PAPER: CRISIL Ups Rating on INR84MM Loan to B+ BUTTA CONVENTION: CRISIL Assigns 'D' Rating to INR150MM Term Loan CYGNUS SPLENDID: ICRA Assigns 'B' Rating to INR9.50cr Term Loan DIVYADEEP SUGAR: ICRA Suspends 'B' Rating on INR20cr Term Loan EKTA TRUST: CRISIL Raises Rating on INR80MM Term Loan to B- G M COLD: CRISIL Reaffirms B+ Rating on INR69.5MM Cash Loan GANPATI ENTERPRISES: CRISIL Places B+ Rating on INR135MM Loan GAYATRI COTGIN: CRISIL Ups Rating on INR133MM LT Loan to B+ GIRIRAJ GINNING: CRISIL Assigns B+ Rating to INR640MM Cash Loan GRAND AUTO: CARE Assigns B+ Rating to INR9.30cr LT Bank Loan GULMOHAR PARK: ICRA Revises Rating on INR55cr Term Loan to 'D' GURU NANAK: ICRA Assigns B Rating to INR5.50cr Long Term Loan HARIHARAN SPINNERS: ICRA Reaffirms 'B+' Rating on INR15.27cr Loan HARYANA RICE: CRISIL Reaffirms B Rating on INR250MM Cash Loan HILLTOP CONCRETE: CARE Assigns 'B' Rating to INR13.50cr LT Loan HIMAGIRI HOSPITALS: CRISIL Ups Rating on INR60MM LT Loan to 'B' INDIABULLS REAL: Moody's Says Sales Weakness is Credit Negative JSM DEVCONS: ICRA Reaffirms 'B' Rating on INR37.75cr LT Loan JSW STEEL: Moody's Says FY2015 Results Below Expectations KHATUCO EXPORT: CRISIL Reaffirms B+ Rating on INR11MM Loan KSA EDUCATIONAL: CRISIL Assigns 'D' Rating to INR71MM LT Loan LADO CERAMIC: CRISIL Assigns B+ Rating to INR37.5MM Term Loan LAKSHMIGRAHA ENTERPRISES: CRISIL Reaffirms B+ INR150M Loan Rating LIGHTCITY CERAMIC: CRISIL Reaffirms 'B' Rating on INR52.7MM Loan MAHADEV GINNING: ICRA Reaffirms B Rating on INR7cr Cash Credit MAMTA TRANSFORMERS: CRISIL Assigns B Rating to INR40MM Cash Loan MANALTHEERAM AYURVEDIC: CRISIL Rates INR20MM LT Loan at 'B' MASCOT ENGITECH: CRISIL Assigns B+ Rating to INR70MM Cash Loan MIRRIKH MOTORS: CRISIL Assigns B+ Rating to INR150MM Cash Loan MSR INFRAA: ICRA Reaffirms 'B' Rating on INR20cr Term Loan NAVKAR WHEELS: CRISIL Assigns B+ Rating to INR49MM Term Loan NEW DIAMOND: ICRA Ups Rating on INR37.50cr Term Loan From 'B+' PARVATI COTTON: ICRA Suspends 'B' Rating on INR6cr LT Loan PAVAS POLYCHEM: CRISIL Reaffirms 'B' Rating on INR5MM Cash Loan PIONEER SPINNING: ICRA Assigns 'B+' Rating to INR6.0cr LT Loan PNP ENGINEERING: CRISIL Ups Rating on INR110MM Bank Loan to B- PRINT SOLUTIONS: ICRA Assigns 'D' Rating to INR11cr Term Loan PUREWAL STONE: ICRA Assigns 'B' Rating to INR8.60r LT Loan PURPLE ADVERTISING: ICRA Suspends 'D' Rating on INR24cr Term Loan RACHIT CREATION: CRISIL Reaffirms B+ Rating on INR60.3MM Loan RAJENDRA GEARS: ICRA Suspends B+ Rating on INR4cr Fund Based Loan RANCHI EXPRESSWAYS: ICRA Reaffirms D Rating on INR1,191.6cr Loan RANGER COTTON: CRISIL Reaffirms 'B' Rating on INR185MM Loan S.K.M COLD: CARE Assigns 'B' Rating to INR5.15cr LT Loan SADIK ENTERPRISE: CRISIL Reaffirms B- Rating on INR50MM Loan SANJOO PRINTS: ICRA Suspends 'D' Rating on INR6.77cr LT Loan SEMI EXPORTS: CRISIL Reaffirms B+ Rating on INR40MM Cash Loan SEVEN-11 INDUSTRIES: ICRA Reaffirms B+ Rating on INR5.50cr Loan SREE VIJAYALAKSHMI: ICRA Assigns 'IrB+' Issuer Rating SUMER SONS: CRISIL Reaffirms 'B-' Rating on INR165MM Cash Loan SUNHILL HOMES: CRISIL Assigns 'B' Rating to INR1.75BB Term Loan TRANS FAB: CRISIL Reaffirms B+ Rating on INR85MM Cash Credit UNIBIOS LABORATORIES: ICRA Suspends 'D' Rating on INR36cr Loan VIDYA POLYMER: ICRA Reaffirms 'B+' Rating on INR4.50cr Cash Loan VIJAYATEJ HOSPITALITY: CRISIL Ups Rating on INR62MM Loan to B+ YOGIRAJ SPINNING: ICRA Suspends B+ Rating on INR44.40cr Loan I N D O N E S I A STAR ENERGY: Fitch Affirms 'B+' Long-Term Issuer Default Rating J A P A N SHARP CORP: Face Dire Prospects of Turnaround TOSHIBA CORP: Expands Accounting Probe to TV, Chip, Comp. Units N E W Z E A L A N D TRUE GREEN: Placed In Liquidation; Couple Left Out of Pocket P H I L I P P I N E S PHILIPPINE NATIONAL: Moody's Ups Deposit Ratings From Ba2 S O U T H K O R E A HYUNDAI HEAVY: Restructures Financial Units as Part of Revamp POSCO PLANTEC: Applies For Debt-Restructuring Program T H A I L A N D THAI AIRWAYS: Posts THB9.1 Billon in First Nine Months This Year - - - - - ================= A U S T R A L I A ================= ALC GROUP: Alleged Ponzi Scheme Operator Faces Court --------------------------------------------------- Following an Australian Securities and Investments Commission investigation, an Adelaide man has faced court accused of deception totaling AUD12 million. Former mortgage broker Michael Samra faced Adelaide Magistrates Court on May 22, 2015, charged with 12 counts of deception. ASIC alleges Mr. Samra operated a Ponzi scheme with promises of high returns on the investment, some up to 30-48 per cent a year. ASIC alleges Mr. Samra induced investors to loan his company, ALC Group Pty Ltd, money on the basis that it would be on-lent to unnamed builders or property developers on a short term basis. Approximately AUD66 million came into the ALC bank account over a seven month period with the majority of funds paid out to investors. The charges follow the collapse of ALC Group in 2009 owing liabilities of approximately AUD40 million. Mr. Samra, who was not required to enter a plea, was bailed and the matter will return to court on July 28, 2015. The Commonwealth Director of Public Prosecutions is prosecuting the matter. ALC Group Pty Ltd is a Norwood-based finance company. QRXPHARMA LIMITED: First Creditors' Meeting Slated For June 3 ------------------------------------------------------------- Timothy Paul Heesh and Amanda Caroline Lott of TPH Insolvency were appointed as administrators of QRxPharma Limited on May 22, 2015. A first meeting of the creditors of the Company will be held at Auditorium Room, Ground Floor History House, 133 Macquarie Street, in Sydney, on June 3, 2015, at 11:00 a.m. TASTE GRILL: First Creditors' Meeting Slated For June 2 ------------------------------------------------------- Bradd William Morelli and Stewart William Free of Jirsch Sutherland were appointed as administrators of Taste Grill And Brassieres Pty Limited on May 22, 2015. A first meeting of the creditors of the Company will be held at Jirsch Sutherland (Newcastle), 47 Newcomen Street, in Newcastle, New South Wales, on June 2, 2015, at 10:30 a.m. * Insolvent Businesses Could Be Saved With New Safe Harbour Laws ---------------------------------------------------------------- Kirsten Robb at SmartCompany reports that around one-third of businesses liquidated could be saved and billions of dollars recovered for the Australian economy if the government adopts draft safe harbour recommendations from the Productivity Commission, according to registered liquidator Sean Wengel -- sean.wengel@williambuck.com Mr. Wengel, an insolvency principal at financial advisory firm William Buck, told SmartCompany the safe harbour provisions recommended in the Productivity Commission's draft report on the barriers of setting up and closing a business have the potential to save up to 3000 insolvent business from being liquidated. SmartCompany relates that the recommendations would see a provision for a 'safe harbour' to allow company directors to explore restructuring options without personal liability for insolvent trading, which is currently a significant disincentive for directors. "The current insolvency trading laws essentially incentivise terminating a struggling business rather than encouraging its resurrection," the report quotes Mr. Wengel as saying. According to the report, Mr. Wengel said when a company director realises a company is trading as insolvent they have two options - - appointing external administrators or shutting down. But he said an external administration rarely helps turnaround an insolvent business and typically triggers defaults on contracts and creates a stigma for the business and its directors, the report relays. "Lots of the company's value is lost when it enters external administration," SmartCompany quotes Mr. Wengel as saying. "It's fair to say a large majority would prefer to save their business." As a registered liquidator, Mr. Wengel said directors usually look for restructuring help "when it's all too late" because of fear of personal liability. "They've pushed it on for too long and they have no choice but to appoint me as liquidator. But if they'd come in 12 months prior to work on a solution to save the business, a lot would be much happier with the outcome," Mr. Wengel told SmartCompany. The new provisions are slated to provide directors with a limited period of time to seek restructuring advice to find a workable solution for a business and avoid any personal liability in doing so, the report adds. ================ H O N G K O N G ================ HANERGY HOLDING: Listed Unit Fails to Repay Bank Loans ------------------------------------------------------ Caixin Online reports that the solar-panel manufacturer whose listed subsidiary has suffered a sell-off of shares in Hong Kong failed to repay bank loans, sources close to the parent company said. The share price of Hong Kong-listed Hanergy Thin Film Power plunged from 7.37 Hong Kong dollars to 3.91 Hong Kong dollars (from 95 U.S. cents to 50 U.S. cents) -- a decline of nearly 47 percent -- in the first 70 minutes of trading on May 20. The steepest falls were seen in the last 25 minutes, before the company was forced to suspend trading at 10:40 a.m. Some 175 million shares had changed hands by then, the share's highest daily trading volume since April 24, the report says. Trading of stock in Hanergy Thin Film Power remained suspended on May 21, the report states. According to the report, the firm is the listed arm of Hanergy Holding Group Ltd., which is based in Beijing and has as its chairman Li Hejun, the country's richest man before the sell-off. Li's fortune, which includes 31.25 billion shares in Hanergy, was estimated by the monthly magazine Hurun Report at CNY165 billion (about $26 billion) in February, the report discloses. Caixin Online notes that the share's nose-dive prompted speculation the company is being investigated by Hong Kong's securities regulator, the Securities and Futures Commission, over market manipulation. Neither the regulator nor Hong Kong Exchanges and Clearing, which runs the former British colony's stock market, have commented, the report says. According to Caixin Online, several people close to Hanergy Holding Group said it used shares in its listed unit to take out bank loans, but has been unable to repay some of them. The share sales escalated after debtors made little progress in negotiations with the company over the defaults, those sources said, the report relays. Caixin Online reports that Hanergy secured loans from Jinzhou Bank, in the northeastern province of Liaoning, in the second half of last year after the bank gave it an 8-billion-yuan credit line, other people close to the firm said. In January last year, Hanergy reached a deal with China Minsheng Bank and a credit consortium the bank leads to provide the company with loans of no less than CNY20 billion, says Caixin Online. However, a senior executive at Minsheng said it had not extended any loans to Hanergy, the report notes. "We've studied the company carefully and found it relies too much on connected transactions between the parent company and its listed unit, so we have been vigilant over its operations," the report quotes the bank executive as saying. Shares in the solar panel manufacturer soared 249% over 12 months to a high of HK$9.07 on March 5, the report states. The stock has been popular among mainland investors using the so-called Shanghai-Hong Kong Stock Connect. Caixin Online relates that analysts had warned the shares came with risks because the company relied heavily on connected deals with its parent company, a practice that can lead to accusations of market manipulation. According to the report, Mr. Li, Hanergy Holding Group's chairman, said in an earlier interview that connected transactions accounted for 62% of its listed arm's business. He pledged that the company would make a breakthrough in reducing the number of such transactions this year, the report states. Hanergy has not commented on the dive in its share price. It began shortly after shareholders gathered in Hong Kong for an annual meeting that Mr. Li did not attend. Frank Dai Mingfang, the firm's vice chairman, abruptly left the meeting after receiving a phone call, the report notes. About Hanergy Holdings Hanergy Holdings Group Company Ltd., together with its subsidiaries, engages in hydropower, wind power, and solar energy power generation activities. It also engages in solar power research and development; thin film photovoltaic cells and modules production; photovoltaic power plant construction and operation; integration of solar modules into facades; and energy conservation and emission reduction. The company also provides solar panels engineering, procurement, construction, and installation services; and engages in power plant construction in China, the United States, and Europe. ========= I N D I A ========= ACE KUDALE: CRISIL Reaffirms 'B' Rating on INR187MM Loan -------------------------------------------------------- CRISIL's ratings on the bank facilities of Ace Kudale Car Pvt Ltd (AKCPL) continue to reflect AKCPL's weak financial risk profile, marked by accumulated losses and weak debt protection measures, and large working capital requirements. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 10 CRISIL A4 (Reaffirmed) Cash Credit 35 CRISIL B/Stable (Reaffirmed) Inventory Funding Facility 187 CRISIL B/Stable (Reaffirmed) Proposed Long Term Bank Loan Facility 162.7 CRISIL B/Stable (Reaffirmed) Term Loan 35.3 CRISIL B/Stable (Reaffirmed) The ratings also factor in the company's low bargaining power with its principal, Maruti Suzuki India Ltd (MSIL), and competitive pressures from other four-wheeler vehicle dealers. These rating weaknesses are partially offset by the funding support that AKCPL gets from its promoters. Outlook: Stable CRISIL believes that AKCPL will continue to benefit over the medium term from its established relationship with its principal and continued funding support from the promoters. The outlook may be revised to 'Positive' if AKCPL reports considerable increase in its revenue and profitability, and sustained improvement in its capital structure over the medium term. Conversely, the outlook may be revised to 'Negative' in case of deterioration in the company's financial risk profile, most likely because of large working capital requirements or low cash accruals. Incorporated in 2007 by the Kudale family, AKCPL began operations in 2010 with a dealership for MSIL's vehicles. AKCPL has one owned showroom-cum-workshop at Manjri on the Pune-Solapur highway (Maharashtra), and a workshop on rented premises at Bhosari, on the Pune-Nashik highway. ALWAR ROLLER: CARE Assigns 'B' Rating to INR6.25cr LT Loan ---------------------------------------------------------- CARE assigns 'CARE B' rating to the bank facilities of Alwar Roller Flour Mills Private Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 6.25 CARE B Assigned Rating Rationale The rating assigned to the bank facilities of Alwar Roller Flour Mills Private Limited (ARFM) is primarily constrained on account of stabilisation risk associated with its recently completed Greenfield project. The rating is, further, constrained on account of seasonality associated with agro commodities and its presence in highly fragmented and government regulated industry. The rating, however, favourably takes into account the experienced promoters in the agro processing industry with strong group support. The ability of the company to stabilise the operations in its recently completed greenfield project for processing of wheat and the ability to achieve envisaged sales and profit would be the key rating sensitivities. ARFM was incorporated in March 2014 with an objective to set up greenfield roller flour unit at Alwar (Rajasthan) having installed capacity of 150 tones for processing of wheat per day at Alwar, Rajasthan. The company manufactures flour (atta) and refined flour (maida). It completed its project and started commercial operations by end of April 2015. AFRM has envisaged total cost of the project of INR8 crore towards the project envisage to be funded through share capital of INR3 crore, INR2 crore through unsecured loans from promoters and remaining through term loan of INR3 crore. Till April 17, 2015, ARFM has incurred total cost of INR7.10 crore towards the project funded through share capital of INR2.50 crore, INR1.61 crore through unsecured loans, INR2.90 crore through term loan and remaining through creditors. ANANT EDUCATIONAL: CRISIL Cuts Rating on INR77.5MM Loan to B- ------------------------------------------------------------- CRISIL has downgraded its rating on the long-term bank facility of Anant Educational Trust (AET) to 'CRISIL B-/Stable' from 'CRISIL B/Stable', and has assigned its 'CRISIL A4' rating to the trust's short-term bank facility. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Overdraft Facility 12.5 CRISIL A4 (Reassigned) Term Loan 77.5 CRISIL B-/Stable (Downgraded from 'CRISIL B/Stable') The rating downgrade reflects low student intake in AET's school for academic years 2014-15 and 2015-16 leading to low fee income estimated for the said years, and consequently significantly low margin for 2014-15 (refers to financial year, from April 1 to March 31) despite the strong brand of its principal, Delhi Public School (DPS). The low income and operating margin led to weakening of AET's capital structure and interest coverage ratio. The trust's weak profitability will lead to just sufficient cash accruals to meets its debt obligations, however, trustees are expected to support the trust in timely repayment obligations, as seen in the past. The ratings reflect AET's below-average financial risk profile, marked by leveraged capital structure and muted debt protection metrics, constraining its financial flexibility. The ratings also factor in the trust's exposure to risks related to restrictions imposed by regulatory bodies and to intense competition in the education sector. These rating strengths are partially offset by the benefits that AET derives from the extensive experience of its trustees in the education sector. Outlook: Stable CRISIL believes that AET will continue to benefit over the medium term from its trustees' extensive experience in the education industry and its association with DPS. The outlook may be revised to 'Positive' in case of significant ramp-up in AET's scale of operations with increase in student intake while improving its profitability, leading to significant improvement in liquidity. Conversely, the outlook may be revised to 'Negative' in the event of further dip in occupancy and profitability or significant deterioration in the trust's liquidity because of large capital expenditure. AET was set up in 2011. The trust set up a school under the DPS brand in Patiala (Punjab) in 2012-13. Mr. Ramesh Talwar is the key promoter-trustee who looks after AET's operations. AET reported a net deficit of INR14.35 million on net sales of INR16.8 million for 2013-14. The trust is likely to report a fee income of INR28.2 million in 2014-15. BHUSHAN AUTOMOBILES: CRISIL Reaffirms B+ Rating on INR74MM Loan --------------------------------------------------------------- CRISIL's rating on the long-term bank facilities of Bhushan Automobiles Pvt Ltd (BAPL) continues to reflect BAPL's exposure to intense competition in the automotive dealership industry, and its below-average financial risk profile marked by weak debt protection metrics. These rating weaknesses are partially offset by the company's established relationship with its principal Escorts Ltd (Escorts) and its promoters' extensive industry experience. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 74 CRISIL B+/Stable (Reaffirmed) Proposed Long Term Bank Loan Facility 10 CRISIL B+/Stable (Reaffirmed) Outlook: Stable CRISIL believes that BAPL will continue to benefit over the medium term from its established relationship with its principal. The outlook may be revised to 'Positive' in case of improvement in BAPL's financial risk profile, supported by equity infusion by the promoters or increased operating margin leading to large cash accruals. Conversely, the outlook may be revised to 'Negative' if BAPL reports a significant slowdown in revenue or undertakes a large debt-funded capital expenditure programme, resulting in deterioration in its financial risk profile. Update BAPL's operating income is estimated in the range of INR1000 million to INR1050 million for 2014-15 (refers to financial year, April 1 to March 31), down by around 5 per cent year-on-year driven by lower demand for agricultural equipment during the year. The company is likely to record low operating margin of 0.50 to 0.60 per cent in 2014-15, in line with historical operating margin of 0.4 to 0.6 per cent. The low operating margin is on account low commission that the company receives from its principal and cash discount it offers to dealers. BAPL's operations are moderately working capital intensive as reflected in its moderate gross current assets of 50 to 60 days in the past. Because of low credit offered by the principal, BAPL's cash credit limit is utilised extensively, by 95 to 100 per cent, limiting the company's capability to meet exigencies. The company's liquidity is supported by absence of any term debt obligation. BAPL has weak financial risk profile because of low operating margin. The financial risk profile is marked by estimated high total outside liabilities to tangible net worth ratio of around 3.5 times as on March 31, 2015, and weak interest coverage ratio of 1.4 times for 2014-15. The financial risk profile is expected to remain weak over the medium term. BAPL was set up in 2005, promoted by Mr. Bhushan Kumar and his family members. The company is a distributor of Escorts Ltd's farm vehicles in Bihar. BAPL reported a net profit of INR26.40 million on net sales of INR1074 million for 2013-14, as against a net profit of INR23.55 million on net sales of INR950 million for 2012-13. BRAHMAPUTRA PAPER: CRISIL Ups Rating on INR84MM Loan to B+ ---------------------------------------------------------- CRISIL has upgraded its rating on the long-term bank facility of Brahmaputra Paper Private Limited (BPPL) to 'CRISIL B+/Stable' from 'CRISIL B/Stable' on account of improvement in BPPL's liquidity with moderate bank limit utilisation and adequate flexibility between net cash accruals and debt obligations, resulting in improved gearing. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 30 CRISIL B+/Stable (Upgraded from 'CRISIL B/Stable') Proposed Long Term 84 CRISIL B+/Stable (Upgraded Bank Loan Facility from 'CRISIL B/Stable') Term Loan 1 CRISIL B+/Stable (Upgraded from 'CRISIL B/Stable') The rating upgrade reflects improvement in BPPL's liquidity with net cash accruals of around INR15.9 million in 2013-14 (refers to financial year, April 1 to March 31). BPPL's net cash accruals are expected to improve over the near to medium term, and to be adequate to meet debt obligations of INR17.3 million. Further, the company's cash credit limits of INR35 million have been moderately utilised and provides adequate flexibility to meet any exigency. The absence of debt-funded capital expenditure (capex) plans is expected to result in improved gearing over the near to medium term. The rating also reflects BPPL's small scale of operations in the fragmented paper industry, and working-capital-intensive operations. These rating weaknesses are partially offset by the company's moderate financial risk profile marked by low gearing, and robust debt protection metrics, partially constrained by small net worth. Outlook: Stable CRISIL believes that BPPL will benefit from the favourable demand prospects for kraft paper in the packaging industry and the strategic location of its plant over the medium term. The outlook may be revised to 'Positive' if BPPL's sales and profitability improves substantially resulting in sizeable net cash accruals being generated. Conversely, the outlook may be revised to 'Negative' if BPPL's liquidity weakens because of an increase in its working capital requirements or if the company undertakes any large debt-funded capex programme, thereby weakening its debt- servicing ability. Incorporated in 2009, BPPL manufactures kraft paper. Its manufacturing facility is in Tezpur (Assam). BPPL manufactures varieties of kraft paper with grammage (GSM) of 70 to 250 and burst factor (bf) of 20. The company's product finds application primarily in the packaging industry for manufacturing of corrugated boxes. The company's day-to-day operations are managed by its managing director Mr. Dilip Kumar Singh. BUTTA CONVENTION: CRISIL Assigns 'D' Rating to INR150MM Term Loan ----------------------------------------------------------------- CRISIL has assigned its 'CRISIL D' rating to the long term bank facility of Butta Convention Services Private Limited (BCSPL). The rating reflects instances of delay by BSCPL in servicing its debt; the delays have been caused by the company's weak liquidity, driven by initial stage of operations and insufficient accruals to meet debt obligations. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Term Loan 150 CRISIL D BSCPL also has modest scale of operations in the highly competitive hospitality industry. However, it benefits from its promoters' extensive industry experience. Incorporated in May 2012, BCSPL is in the hospitality business and operates a convention center. Located in Madhapur (Hyderabad,) the company hosts social as well as corporate events. The Company is promoted by Mr. Butta S Neelakanta and his wife Mrs. Butta Renuka and is part of the BUTTA group of companies. The group has presence in the Hospitality, Education, Branded Retail and Automobile space in Hyderabad BCSPL has incurred a net loss of INR18.9 million on net sales of 10.1 million during 2013-14 (refers to financial year; April 1 to March 31). CYGNUS SPLENDID: ICRA Assigns 'B' Rating to INR9.50cr Term Loan --------------------------------------------------------------- ICRA has assigned its long term rating of [ICRA]B to the INR13.14 crore fund based bank facilities of Cygnus Splendid Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Fund Based Facility- Cash credit 3.64 [ICRA]B; Assigned Long-term Fund Based Facility- Term Loan 9.50 [ICRA]B; Assigned ICRA's rating takes into account CSL's modest scale and limited track record of operations in non-woven fabric manufacturing; the vulnerability of profitability to fluctuations in polymer prices and the financial profile of the company characterized by modest profitability (on account of higher dependence on trading business), leveraged capital structure and weak coverage indicators. This has also resulted in dependence on external funds to meet the debt obligations given the insufficient level of internal accruals generated from operations. However, the rating favourably factors in the support from the diversified Cygnus Group, which benefits the company in terms of client acquisition and reputed client base which includes established players like Indian Railway, Haldiram's, HLL lifecare, Daawat, etc. Going forward, the ability of the company to increase its scale of operations, improve its profitability while improving its debt protection metrics will be the key rating sensitivities. CSL initially started its business as a partnership firm under the name of Cygnus Splendid in the year 2011. It was later incorporated into CSL in August 2012 and is a part of the Cygnus Group. The company is promoted by Singhania family (Krishna Kumar Singhania, Vijay Kumar Singhania, etc.) and is engaged in manufacturing of non-woven fabric and trading of fabric. The manufacturing facility is located at KIE industrial area, New Delhi with an installed capacity of 7200 metrci tonnes per annum (MTPA). The plant started operations in April 2013. Recent Results CSL reported an operating income of INR48.04 crore and a loss of INR1.4 crore in 2013-14, as against an operating income of INR0.22 crore and a loss of INR2.52 crore in the previous year. DIVYADEEP SUGAR: ICRA Suspends 'B' Rating on INR20cr Term Loan -------------------------------------------------------------- ICRA has suspended [ICRA]B rating assigned to the INR20 crore term loan of Divyadeep Sugar & Agro Industries P Limited. The suspension follows ICRA's inability to carry out a rating surveillance in the absence of the requisite information from the company. EKTA TRUST: CRISIL Raises Rating on INR80MM Term Loan to B- ----------------------------------------------------------- CRISIL has upgraded its rating on the bank facilities of Ekta Trust (Ekta) to 'CRISIL B-/Stable' from 'CRISIL D'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Term Loan 80 CRISIL B-/Stable (Upgraded from 'CRISIL D') The rating upgrade reflects timely servicing of debt by Ekta over the past four months, driven by improved liquidity. CRISIL believes that Ekta's liquidity will improve further, with expected increase in student enrolments, and new students paying revised fees in most courses. Ekta is expected to generate sufficient cash accruals to service its maturing debt of INR16.4 million in 2015- 16 (refers to financial year, April 1 to March 31). CRISIL believes that Ekta will service its debt as scheduled, supported by improving liquidity. The rating continues to reflect Ekta's exposure to risks relating to intense competition, and to unfavourable regulations in the education services industry. These weaknesses are partially offset by Ekta's established track record in the education domain. Outlook: Stable CRISIL believes that Ekta will continue to benefit over the medium term from its trustees' experience in the education sector. The outlook may be revised to 'Positive' if Ekta further increases its scale of operations while strengthening its financial risk profile. Conversely, the outlook may be revised to 'Negative' if significant decline in cash accruals, low student admissions, or any large, debt-funded capital expenditure weakens its capital structure. Ekta, based out of Sabarkantha (Gujarat), offers undergraduate courses. The trust started operations in 1991, and currently offers degree and diploma courses in engineering and nursing. Ekta reported a provisional profit after tax (PAT) of INR9.4 million on net sales of INR88.6 million in 2014-15 (Rs.4.8 million and INR60.6 million in 2013-14). G M COLD: CRISIL Reaffirms B+ Rating on INR69.5MM Cash Loan ----------------------------------------------------------- CRISIL's rating on the long-term bank facilities of G M Cold Storage Pvt Ltd (GMCSPL) continues to reflect its exposure to risks related to the highly regulated and intensely competitive cold storage industry in West Bengal. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 69.5 CRISIL B+/Stable (Reaffirmed) Proposed Long Term 40.5 CRISIL B+/Stable (Reaffirmed) Bank Loan Facility The rating also reflects the company's weak financial risk profile, marked by a small net worth and low profitability. These rating weaknesses are partially offset by the extensive experience of GMCSPL's promoters in the cold storage and potato trading businesses. Outlook: Stable CRISIL believes that GMCSPL will continue to benefit over the medium term from its promoters' extensive industry experience. The outlook may be revised to 'Positive' in case of improved cash accruals or infusion of capital by promoters, leading to improvement in the financial risk profile and the company's risk absorption capacity. Conversely, the outlook may be revised to 'Negative' if GMCSPL registers deterioration in its liquidity on account of stretched receivables, or non-recovery of produce market loan extended to farmers, or lengthening of its working capital cycle, or a large debt-funded capital expenditure (capex) programme. Update GMCSPL's operating income has improved backed by an increase in potato trading. The company recorded estimated revenues at INR102.8 million for 2014-15 (refers to financial year, April 1 to March 31). Its operating profitability remained stable at 8 to 10 per cent over the two years ended 2014-15. The company's financial risk profile remains average, with a small net worth, and high gearing of 3.37 times as on March 31, 2015, against 4.01 times as on March 31, 2014. GMCSPL's debt protection metrics remained healthy, with interest coverage and net cash accruals to total debt ratios estimated at 3.52 times and 0.09 times, respectively, for 2014-15. GMCSPL's liquidity remains moderate, with its bank limits remaining fully utilised. The cash accruals of INR6.1 million remain sufficient in the absence of any fixed repayment obligation and any debt-funded capex plans. GMCSPL, incorporated in 1986, provides cold storage facilities to potato farmers and traders. It also trades in potato. The company is owned by the West Bengal-based Gorai family, which has been in the same line of business for 25 years. GMCSPL's cold storage is located in Bankura (West Bengal). GANPATI ENTERPRISES: CRISIL Places B+ Rating on INR135MM Loan ------------------------------------------------------------- CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-term bank facilities of Ganpati Enterprises - Muzaffarnagar (GE). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 20 CRISIL B+/Stable Cash Credit/Overdraft facility 135 CRISIL B+/Stable The rating reflects GE's susceptibility to risks related to changes in government policies and to license allocation through lottery in the liquor retailing business. The rating also factors in the modest profitability of operations. These rating weaknesses are partially offset by the extensive experience of GE's partners in liquor trading, and the firm's diversified revenue profile. Outlook: Stable CRISIL believes that GE will continue to benefit over the medium term from its partners' extensive experience in liquor trading and geographical diversification in its revenue. The outlook may be revised to 'Positive' if the firm reports significant increase in its scale of operations and profitability leading to substantially high cash accruals, while it improves its debt protection metrics. Conversely, the outlook may be revised to 'Negative' in case of a considerable increase in GE's working capital requirements or capital withdrawal by its partners, leading to pressure on the firm's financial risk profile. Formed in 2002, GE is a partnership firm engaged in retailing of Indian-made foreign liquor and country liquor through 23 retail shops across Rajasthan, Haryana, and Uttaranchal. For 2013-14, GE reported a profit before tax (PBT) of INR6.88 million on net sales of INR474 million, against a PBT of INR4.79 million on net sales of INR300 million for 2012-13. GAYATRI COTGIN: CRISIL Ups Rating on INR133MM LT Loan to B+ ----------------------------------------------------------- CRISIL has upgraded its rating on the long-term bank facility of Gayatri Cotgin Corporation (GCC) to 'CRISIL B+/Stable' from 'CRISIL B/Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 40 CRISIL B+/Stable (Upgraded from 'CRISIL B/Stable') Proposed Long Term 133 CRISIL B+/Stable (Upgraded Bank Loan Facility from 'CRISIL B/Stable') Standby Line of Credit 6 CRISIL B+/Stable (Upgraded from 'CRISIL B/Stable') Term Loan 21 CRISIL B+/Stable (Upgraded from 'CRISIL B/Stable') The rating upgrade reflects GCC's improved liquidity marked by sufficient cash accruals against term debt obligations, moderate bank line utilisation and support from promoters in the form of unsecured loans. The upgrade also factors in improvement in scale of operations, with the firm reporting net sales of INR85.4 million in 2013-14 (refers to financial year, April 1 to March 31) and INR271.4 million as estimated in 2014-15. The firm's liquidity has improved marked by cash accruals of INR4.8 million as estimated in 2014-15, as against annual debt obligation of INR3 million. The rating continues to reflect GCC's small scale of operations in the highly competitive cotton industry, moderately working- capital-intensive operations, and average financial risk profile. These rating weaknesses are partially offset by the promoters' extensive experience in the cotton industry, and the firm's proximity to the cotton-growing region in Gujarat. Outlook: Stable CRISIL believes that GCC will continue to benefit over the medium term from its promoters' extensive industry experience. The outlook may be revised to 'Positive' if the firm reports substantial revenue while improving its profitability and capital structure. Conversely, the outlook may be revised to 'Negative' in case of a decline in GCC's revenue or profitability, or a stretch in its working capital cycle, resulting in weakening in its financial risk profile or if the firm undertakes a large debt- funded capital expenditure programme. Incorporated in 2013, GCC is a partnership firm located near Bhavnagar (Gujarat). Its promoters have more than a decades' experience in the cotton ginning industry. GCC reported a profit after tax of INR0.6 million on net sales of INR85.4 million for 2013-14. GIRIRAJ GINNING: CRISIL Assigns B+ Rating to INR640MM Cash Loan --------------------------------------------------------------- CRISIL has revoked the suspension of its rating on the bank facilities of Giriraj Ginning and Pressing Private Limited (GGPPL) and has assigned its 'CRISIL B+/Stable' rating. CRISIL had suspended the rating on GGPPL's long-term bank facilities on February 29, 2012 as the company had not provided the necessary information required for a rating view. GGPPL has now shared the requisite information, enabling CRISIL to assign ratings to its bank facilities. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 640 CRISIL B+/Stable (Assigned; Suspension Revoked) Term Loan 17.8 CRISIL B+/Stable (Assigned; Suspension Revoked) Standby Letter 30.0 CRISIL B+/Stable (Assigned; of Credit Suspension Revoked) The rating reflects the experience of GGPPL's promoters in the cotton trading and ginning industry, and the favourable location of the company's facility, ensuring easy availability of raw cotton. These rating strengths are partially offset by GGPPL's large working capital requirements, and average financial risk profile, marked by high gearing and weak debt protection metrics. Outlook: Stable CRISIL believes that GGPPL will continue to benefit over the medium term from its promoters' experience, established relationships with customers and suppliers, and favourable location of the firm. The outlook may be revised to 'Positive' if the company reports strong accruals while also improving its working capital management. Conversely, the outlook may be revised to 'Negative' if decline in accruals, any large debt-funded capital expenditure, or increase in working capital requirements weakens its financial risk profile. Incorporated in September 1998 and promoted by Mr. Naresh Lotiya, GGPPL is based in Rajkot (Gujarat). The firm undertakes cotton ginning and pressing operations and has capacity to process 250 tonnes of raw cotton per day. GRAND AUTO: CARE Assigns B+ Rating to INR9.30cr LT Bank Loan ------------------------------------------------------------ CARE assigns 'CARE B+' and 'CARE A4' Ratings To The Bank Facilities Of Grand Auto Udyog Pvt. Ltd. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank Facilities 9.30 CARE B+ Assigned Short-term Bank Facilities 0.70 CARE A4 Assigned Rating Rationale The ratings assigned to the bank facilities of Grand Auto Udyog Pvt. Ltd. (GAUPL) are primarily constrained by its small scale of operations with thin profit margins marked by pricing constraints and margin pressure arising out of competition from other auto dealers in the market, risk of non-renewal of dealership agreement from principles, working capital intensive nature of its operation leading to leveraged capital structure and moderate debt protection metrics. The rating, however, derives strength from its experienced promoters with long track record of operations, authorised dealership of some automobile majors leading to diversified product profile and integrated nature of business. Going forward, the ability of the company to improve its scale of operation along with improvement in profit levels, margins and efficient management of working capital would be the key rating sensitivities. Grand Auto Udyog Pvt. Ltd. (GAUPL) was established as a partnership firm namely Grand Automobiles in 1986 by one Mr Nabin Kumar Mohanty of Cuttack along with other partners. Since inception, the firm has been in car dealership business. Later, in the year 2011, the firm converted into a company and rechristened as GAUPL. Presently, the company has authorised dealership of various companies like, India Yamaha Motor Pvt. Ltd., Piaggio Vehicles Private Limited, Swaraj Mazda tractors and Total Oil India Pvt. Ltd. (ELF) for the Cuttack district of Odisha. Apart from this, the company is a dealer and distributor for some tyre companies like Bridgestone, CEAT, JK Tyres, TVS Tyres etc. GAUPL has six showrooms at Cuttack for different products. This apart, the company has eight sales counters for automobile products spreading in nearby three districts of Odisha. During FY14 (refers to the period April 1 to March 31), the company reported a total operating income of INR50.35 crore (FY13: INR38.78 crore) and a PAT of INR0.23 crore (FY13: INR0.17 crore). The company has achieved a turnover of about INR57.9 crore in FY15 (provisional). GULMOHAR PARK: ICRA Revises Rating on INR55cr Term Loan to 'D' -------------------------------------------------------------- ICRA has revised the long term rating assigned to INR55 crore term loan facility of Gulmohar Park Mall Private Limited (GPMPL) to [ICRA]D from [ICRA]BB+ (Stable). Amount Facilities (INR crore) Ratings ---------- ----------- ------- Term Loan 55 [ICRA]D/ Revised The revision in rating takes into consideration the delay in term loan repayments by GPMPL. The rated loan being a Lease Rental Discounting (LRD) loan availed by securitizing lease rentals receivable from retailers occupying the property, any delays in timely remittance of monthly lease rentals from lessees adversely impacts GPMPL's ability to service its debt repayment obligations in a timely manner. GPMPL owns and operates the Gulmohar Park Mall at Sarkhej- Gandhinagar Highway, Ahmedabad. The name of the company has been changed to Gulmohar Park Mall Pvt. Ltd. from Navratna SG Highway Properties Pvt. Ltd. on 29th May 2012. The Gulmohar Park mall is located on the Sarkhej-Gandhinagar Highway at Satellite Road in Ahmedabad, ~17-19 km. from the airport and ~11-12 km. from the railway station. The total leasable area of the mall is 2,22,236 sqft. The property is a standalone mall which is being operated on a 100% lease model. Construction of the mall began in June 2006 and the mall commenced operations in October 2008. GURU NANAK: ICRA Assigns B Rating to INR5.50cr Long Term Loan ------------------------------------------------------------- ICRA has assigned its long term rating of [ICRA]B to the INR5.50 crore fund based bank facilities of Guru Nanak Stone Industries. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based Limits- Long Term 5.50 [ICRA]B; assigned ICRA's rating takes into account GSI's moderate scale of operations and high level of competitive intensity due to the presence of a large number of crushers in the vicinity, which has resulted in volatile profitability margins in the past. The rating also factors in regulatory restrictions on the river bed mining industry which might impact raw material availability. ICRA also takes into account the vulnerability of GSI's profitability to a slowdown in the real estate and construction sectors, which are its key off takers. Further, the rating is also constrained by the firm's elevated gearing on account of its reliance on debt for funding the working capital requirements; the firm has a high working capital intensity due to substantial inventory levels it is required to maintain round the year. The rating also takes into account the moderate coverage indicators of the firm due to low profitability and high debt levels. However, the rating derives comfort from the experience of the promoters in the industry, and favorable demand outlook for stone grits given the healthy level of construction activity in the surrounding areas. Going forward, the firm's ability to ramp up its operations and maintain an optimal working capital cycle will be the key rating sensitivities. GSI was established in 2006 as a partnership firm by Mr. Preet Pal Singh and Mr. Amarjeet Singh as partners. During November 2012, Mr. Preet Pal Singh voluntarily retired from the partnership firm and Mr. Gurpal Singh Gorava and Mrs. Paramjeet Kaur were admitted as partners on the same date. GSI is engaged in processing of stone grit into various sizes and sand from river bed material through screening and crushing process. The firm's processing plant is located at Village Ladpur, Uttar Pradesh over a total area of 4.10 acres. Recent Results GSI reported a net profit of INR0.09 crore on an operating income of INR20.83 crore for the year ended March 31, 2014 as compared to a net profit of INR0.06 crore on an operating income of INR18.87 crore for the previous year. The firm, on a provisional basis, reported an operating income of INR28.66 crore for FY15. HARIHARAN SPINNERS: ICRA Reaffirms 'B+' Rating on INR15.27cr Loan ----------------------------------------------------------------- ICRA has reaffirmed the long-term rating outstanding on the INR15.27 crore (revised from INR16.13 crore) term loan facilities and the INR6.00 crore fund based facilities of Hariharan Spinners Limitedat [ICRA]B+. ICRA has also reaffirmed the short-term rating of [ICRA]A4 to the INR0.37 crore (revised from INR2.70 crore) non- fund based facilities of the Company. ICRA has assigned a long term rating of [ICRA]B+ to the INR3.19 crore (revised from nil) unallocated limits of the Company. Amount Facilities (INR crore) Ratings ---------- ----------- ------- LT-Term loan facilities 15.27 [ICRA]B+ reaffirmed LT-Fund based facilities 6.00 [ICRA]B+ reaffirmed LT-Unallocated limits 3.19 [ICRA]B+ assigned ST-Non-fund based Facilities 0.37 [ICRA]A4 reaffirmed The ratings reaffirmation considers the strong growth of ~21.4% in operating income in 2013-14 supported by higher volumes on the back of favourable demand for yarn. However, the revenues witnessed muted growth for 11 months ending February 2015 due to lower realisation for yarn which coupled with inventory losses incurred during the year has also led to a moderation in operating margin for the same period. The ratings continue to draw comfort from the experience of the promoters in the industry and the Company's established relationship with its domestic customers which lend stability to the volumes to some extent. The ratings, however, remains constrained by the Company's modest scale of operations which limits benefits from economies of scale, the intense competition in the business which limits pricing flexibility to an extent and the high supplier concentration with Grasim Industries Limited exposing the Company to risk of supply constraints. Although the company does not have any significant capital expenditure plans in the medium term, with sizeable debt repayment obligations falling due in the near term, the ability of the company to improve its scale and margins while maintaining its working capital intensity remains critical. Hariharan Spinners Limited (HSL) was incorporated in the year 2005 and is engaged in the production of polyester and polyester- viscose blended yarn by six promoters. The Company started its commercial production on April 2008 with a spindle capacity of 12,096 spindles and currently has a capacity of 16,128 spindles. The Company has its manufacturing facilities at Tiruchengode, Tamil Nadu. The company also has windmills installed with a total generation capacity of 1.6 MW. Recent Results According to the unaudited financials, HSL reported profit before tax of INR0.4 crore on operating income of INR30.0 crore for the 11 months ending February 2015 as against a net profit of INR0.1 crore on operating income of INR32.3 crore during 2013-14. HARYANA RICE: CRISIL Reaffirms B Rating on INR250MM Cash Loan ------------------------------------------------------------- CRISIL's rating on the long-term bank facility of Haryana Rice Mills (HRM) continues to reflect HRM's large working capital requirements, leading to a weak financial risk profile, and its small scale of operations. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 250 CRISIL B/Stable (Reaffirmed) The rating also factors in the vulnerability of the firm's margin to volatility in raw material prices, its high dependence on monsoon, and its susceptibility to regulatory changes. These rating weaknesses are partially offset by HRM's strong track record in the basmati rice industry. Outlook: Stable CRISIL believes that HRM's financial risk profile will remain weak over the medium term because of substantial debt contracted to fund large working capital requirements. The outlook may be revised to 'Positive' if the firm generates considerable cash accruals or if its capital structure improves significantly driven by capital infusion by the partners. Conversely, the outlook may be revised to 'Negative' if HRM's capital structure deteriorates, or if there is a steep decline in the price of rice, adversely impacting the firm's profitability. Update HRM's sales of INR764 million (up 59 per cent year-on-year) for 2013-14 (refers to financial year, April 1 to March 31) were better than CRISIL's expectation, on account of higher demand from exporters. However, the increase in sales volume also resulted in decline in the firm's operating margin to 2.5 per cent in 2013-14 from 3.1 per cent in 2012-13. The firm's revenue is estimated to have declined INR650 million in 2014-15, due to reduced demand from customers and ban on imports by Iran. HRM's operations remain working capital intensive, driven by high debtor days and large inventory. HRM's financial risk profile is marked by high gearing of 11.72 times as on March 31, 2014, due to high dependence on short-term bank borrowings and modest net worth. The gearing is estimated to have remained high, at 11.7 times, as on March 31, 2015, as was no capital infusion in 2014-15. However, the firm's liquidity was supported by capital infusion of INR10 million by the partners in 2013-14 and additional support in the form of unsecured loans of INR7.5 million during the same year. Set up in 1985 as a partnership firm by the Lal family of Haryana, HRM mills and sorts basmati rice in Karnal (Haryana). HRM reported a book profit of INR0.8 million on net sales of INR764 million for 2013-14, against a book profit of INR0.6 million on net sales of INR481 million for 2012-13. The firm is estimated to report a turnover of INR650 million for 2014-15. HILLTOP CONCRETE: CARE Assigns 'B' Rating to INR13.50cr LT Loan --------------------------------------------------------------- CARE assigns 'CARE B' rating to the bank facilities of Hilltop Concrete Private Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 13.50 CARE B Assigned Rating Rationale The rating assigned to the bank facilities of Hilltop Concrete Private Limited (HCPL) is primarily constrained on account of project implementation and stabilization risk arising out of ongoing debt funded capital expenditure. The rating is also constrained on account of presence of HCPL in the highly competitive industry and exposure to the risk and cyclicality associated with the real estate industry. The rating, however, takes comfort from the experience of the promoters, location advantage arising out of proximity to the key raw material and positive demand outlook for AAC blocks on account of increasing acceptance of the product in the Indian market. HCPL's ability to timely complete its project within envisaged cost and stabilize its business operations with establishment of its customer base is the key rating sensitivity. Furthermore, achieving envisaged level of sales and profitability would also remain crucial. Incorporated during 2012, Surat-based (Gujarat), HCPL is promoted by Mr Vinay Chaudary, Mr Kirtee Chaudary, Mr Priyank Chaudary and Mr Gaurav Chaudary. At present, HCPL is implementing debt funded capital expenditure to set up plant for manufacturing of AAC Block at Kapadvanj (Dist: Kheda, Gujarat) with proposed installed capacity of 285,000 cubic meters per annum. The total cost of the project is envisaged to be INR22.02 crore (including margin money for working capital of INR1.21 crore) which is to be funded through equity share capital of INR7 crore, term loan of INR13.50 crore and balance by way of unsecured loans. HCPL expects to commence the commercial production from November 2015 with delay of around ten months from earlier envisaged date. HIMAGIRI HOSPITALS: CRISIL Ups Rating on INR60MM LT Loan to 'B' --------------------------------------------------------------- CRISIL has upgraded its rating on the long-term bank facilities of Himagiri Hospitals Pvt Ltd (HHPL) to 'CRISIL B/Stable' from 'CRISIL B-/Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Long Term Loan 60 CRISIL B/Stable (Upgraded from 'CRISIL B-/Stable') Overdraft Facility 22.5 CRISIL B/Stable (Upgraded from 'CRISIL B-/Stable') Proposed Long Term 7.5 CRISIL B/Stable (Upgraded Bank Loan Facility from 'CRISIL B-/Stable') The rating upgrade reflects CRISIL's belief that HHPL will maintain its improved business risk profile over the medium term, supported by its successful commercialization of operations at its hospital and thereafter, a healthy ramp-up in operations resulting in improved cash accruals vis-a-vis its debt obligations. CRISIL also believes that with the stabilisation of operations at its hospital, the company's revenue will improve, resulting in a healthy cash accruals. In the absence of any capital expenditure plan, the cash accruals will support working capital management, thus improving HHPL's financial risk profile, over the medium term. The rating continues to reflect HHPL's modest scale of operations in the highly fragmented healthcare segment and it's below average financial risk profile. These weaknesses are partially offset by benefits derived from the extensive experience of its promoters and its strategic location. Outlook: Stable CRISIL believes that HHPL will benefit over the medium term from its promoters' extensive industry experience. The outlook may be revised to 'Positive' in case of sustainable increase in the company's revenue and profitability along with efficient working capital management, resulting in improvement in its financial risk profile. Conversely, the outlook may be revised to 'Negative' if HHPL's financial risk profile weakens because of low cash accruals or deterioration in the working capital management or large debt- funded capital expenditure. Set up in 2011, HHPL operates a multi-specialty tertiary care hospital in Hyderabad. The company is promoted by Mr. P. Shankar Reddy and his family. For 2013-14, (refers to the financial year April 1 to March 31) HHPL reported a net loss (NL) of INR11 million on net sales of INR43 million. INDIABULLS REAL: Moody's Says Sales Weakness is Credit Negative --------------------------------------------------------------- Moody's Investors Service says that Indiabulls Real Estate Limited's (Indiabulls, B1 stable) weak operating sales in the fourth quarter of fiscal year 2015 is credit negative. Indiabulls reported operating sales of 0.66 million square feet for INR5.5 billion for the quarter ending 31 March 2015 (QE3/2015) and 1.77 million square feet, for INR20.4 billion for fiscal year 2015 against Moody's expectation of 3-4 million square feet, for INR25-30 billion. Moody's analysis is contained in its just-published report "Indiabulls Real Estate Limited: Continued Weakness in Operating Sales in Q4 is Credit Negative," by Vikas Halan, a Moody's Vice President and Senior Credit Officer and Sweta Patodia, a Moody's Associate Analyst. Revenue recognition also declined with the company recording revenues of only INR5.9 billion during the fourth quarter of fiscal year 2015 compared to INR6.5 billion in the last quarter. The company, however, recorded revenues of INR25.9 billion during fiscal year 2015, an increase of 50% compared to the previous year. Indiabulls' high exposure to the oversupplied residential property market in Gurgaon means that sales will remain weak if demand does not pick up in the region in the coming months. Indiabulls' two projects at Gurgaon, One Indiabulls and Indiabulls Imperial, account for over 56% of the company's total unsold area of 23.35 million square feet. In addition, operating sales at One Indiabulls have also remained extremely low with the company managing to sell only 0.04 million square feet out of the total saleable area of 6.15 million square feet as of 31 March 2015. Sales in Gurgaon have been impacted due to delay in approval of building plans and infrastructure developments. In a recent positive development, however, infrastructure development could get a boost following a ruling by the High Court of Punjab and Haryana. On May 21 2015, the court vacated its stay on construction along a 2.5 km stretch of the 18km-long Northern Peripheral Road or Dwarka Expressway, connecting Dwarka with National Highway 8, which was stuck in litigation. Any progress on actual construction of the Expressway will provide positive momentum for sales in the region. Easing monetary policy along with improving economic growth will stimulate residential property demand in India but the time frame for such an improvement remains uncertain. If Indiabulls' sales performance continues to remain weak, credit metrics may weaken -- and negatively pressure the company's ratings -- such that EBITDA/ interest will fall below 1.5x by fiscal year ending March 2016. Further, Moody's notes that lower margins have weakened he credit metrics for the quarter. EBITDA for the quarter almost halved, which resulted in credit metrics deteriorating despite marginal reduction in borrowings. Leverage levels will remain high until the projects reach revenue recognition thresholds. Progress on sales and execution of the projects will help to improve free cash flow generation required to service the debt obligations. Finally, Indiabulls' liquidity is adequate; as of March 31, 2015, the company had cash and cash equivalents of INR6.7 billion along with current investments of INR3.3 billion. Over the next 12 months, Indiabulls has INR9.7 billion in debt maturities. JSM DEVCONS: ICRA Reaffirms 'B' Rating on INR37.75cr LT Loan ------------------------------------------------------------ ICRA has reaffirmed its long term rating of [ICRA]B to the INR37.75 crore fund based facilities of JSM Devcons Private Limited (JDPL). Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term Fund Based Facilities 37.75 [ICRA]B; Reaffirmed The rating remain constrained on account of the weak collection efficiency in the company's ongoing project which along with cost over runs has resulted in modest cash flow position and increased reliance on funding support from promoters. Further, despite the final stages of construction for the initial phase of the project, the company remains exposed to market risks with only 75% of the launched area having being sold till date. The company's ability to sell additional units and improve collections is critical given that majority of the debt has to be repaid over the next twelve months. However the rating derives comfort from the nearing completion stage of the company's project which mitigates execution risks to an extent, its attractive location of the project with proximity to prominent commercial centers of Indore, Madhya Pradesh and the low regulatory risk as all the necessary approvals are in place. Going forward, the ability of the company to improve its cash flow position by increasing collection efficiency and successfully market the existing inventory will remain the key rating sensitivities. JDPL, incorporated in December 2007, is developing its maiden residential real estate project by the name 'Pinnacle D Dreams' at Indore, Madhya Pradesh. 'Pinnacle D Dreams' is being developed in phased manner whereby JDPL plans to complete the project in three phases. In October 2009, the first phase constituting saleable area of 0.6 million square feet (msf) across three high rise buildings was launched. Subsequently, the second phase covering an incremental 0.6 msf area was launched in November 2011. Recent Results In the financial year ending March 31, 2014 (FY14), JDPL had an operating income of INR33.30 crore on which it earned a Profit after Tax (PAT) of INR0.33 crore compared to operating income of INR29.16 crore on which it earned a Profit after Tax (PAT) of INR0.18 crore in FY13. JSW STEEL: Moody's Says FY2015 Results Below Expectations --------------------------------------------------------- Moody's Investors Service said that JSW Steel Limited's audited consolidated results for the fiscal year ended March 31, 2015 (FY2015) were below Moody's expectations but should improve in FY2016. "JSW's sales volumes for FY2015 were 3% lower than we had expected. Lower steel realizations year-over-year and a muted correction in domestic iron ore prices led to an annual consolidated EBITDA of INR95.1 billion, which was 14% short of our estimates," says Kaustubh Chaubal, a Moody's Vice President and Senior Analyst. Chaubal explained that subdued domestic demand and a surge in imports from China, Russia and Korea exerted pressure on steel realizations, and steel prices in India fell 26% between April 2014 and March 2015. By contrast, JSW's steel realizations fell by only 9% over the same period. "Looking ahead, domestic sales will drive growth at JSW in FY2016," adds Chaubal. Moody's analysis is contained in its just-released report titled "JSW Steel Limited: Full Year Operating Results Below Expectations, But Expected Recovery Ahead," and is co-authored by Chaubal, and Vincent Tordo, an Associate Analyst. Moody's report says that in FY2016, demand for steel in India will be supported by the pick-up in sales for commercial vehicles. The report also says that JSW expects a 7% increase in sales to 12.9 million tons for FY2016. In addition, cost pressures will likely ease during FY2016. Moody's report says that while steel prices will remain under pressure, the cut in domestic iron ore and coking coal prices will help ease pressure on margins. JSW also remains focused on easing margin pressure through cost reduction initiatives such as yield improvement, fuel efficiency, logistics and procurement, and shifts in the road/rail mix. Moody's expects JSW's leverage metrics to stay within the parameters of its Ba1 corporate family rating over the next 12 months. In particular, Moody's says JSW's leverage should stay just under 4.0x in FY2016. KHATUCO EXPORT: CRISIL Reaffirms B+ Rating on INR11MM Loan ---------------------------------------------------------- CRISIL's ratings on the bank loan facilities of Khatuco Export India Pvt Ltd (KEIPL) continue to reflect KEIPL's customer concentration in its revenue, highly working-capital-intensive operations, and below-average financial risk profile, marked by small net worth and muted debt protection metrics. These rating weaknesses are partially offset by the benefits that KEIPL derives from its promoters' extensive experience in the carpets industry. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Export Packing 11 CRISIL B+/Stable (Reaffirmed) Credit Foreign Bill Discounting 60 CRISIL A4 (Reaffirmed) Standby Letter of Credit 7.5 CRISIL A4 (Reaffirmed) Outlook: Stable CRISIL believes that KEIPL will continue to benefit over the medium term from its promoters' extensive industry experience. The outlook may be revised to 'Positive' if KEIPL's scale of operations and working capital cycle improves substantially, leading to sizeable cash accruals. Conversely, the outlook may be revised to 'Negative' if KEIPL faces a decline in offtake from its key customer, thereby adversely affecting its revenue and margins or if it undertakes any large debt-funded capital expenditure programme, leading to weakening in its capital structure and debt protection metrics. Update KEIPL, on a provisional basis, reported healthy year-on-year revenue growth of 30 per cent for 2014-15 (refers to financial year, April 1 to March 31), better than CRISIL's estimated topline. KEIPL's operating margin is estimated at 5.3 per cent in 2014-15. CRISIL believes that KEIPL's scale of operations will continue to grow at a moderate pace of 15 to 20 per cent while sustaining its healthy operating margin over the medium term, supported by its promoters' extensive industry experience. KEIPL remains susceptible to growth prospects of its sole customer Al Marzaan International (USA). KEIPL has high gross current assets of around 184 days as estimated on March 31, 2015 on account of high credit of 150 to 170 days extended to its sole customer Al Marzaan International. KEIPL maintains an inventory of 30 to 35 days and receives a credit of 10 to 15 days from its suppliers. Hence, KEIPL's operations remain working capital intensive. High working capital requirements have led to its bank limits being utilised at more than 75 per cent over the 12 months through March 2015. CRISIL believes that KEIPL's operations will remain working capital intensive over the medium term. KEIPL's financial risk profile remains moderate, marked by low net worth of around INR55 million to INR58 million and a moderate total outside liabilities to tangible net worth ratio of around 1.50 times as estimated on March 31, 2015. The company's debt protection metrics remains weak, with interest coverage ratio and risk coverage ratio of around 2.0 times and 1.5 times as estimated on March 2015. CRISIL believes that KEIPL's financial risk profile will remain weak, marked by its low net worth and weak debt protection metrics. Incorporated in 1976 and based in Varanasi (Uttar Pradesh), KEIPL procures and exports various hand-knotted carpets. It was previously a partnership firm, Khatuco Enterprises, founded by Mr. B M Agrawal. The company is currently being managed by Mr. Vinod Agrawal and his son, Mr. Veeraj Agrawal. For 2014-15, KEIPL reported an estimated profit after tax (PAT) of INR3.4 million on net sales of INR184.2 million, as against a PAT of INR2.4 million on net sales of INR141.6 million for 2013-14. KSA EDUCATIONAL: CRISIL Assigns 'D' Rating to INR71MM LT Loan ------------------------------------------------------------- CRISIL has assigned its 'CRISIL D' rating to the long-term bank facilities of KSA Educational and Charitable Trust (KSA). The rating reflects instances of delay by KSA in servicing its term debt obligations; the delays have been caused by the Trust's weak liquidity. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 20 CRISIL D Long Term Loan 71 CRISIL D The rating also reflects KSA Trust's modest scale of operations, geographical concentration in revenue profile and weak financial risk profile. These rating weaknesses are partially offset by its promoters' experience in the educational sector. KSA was founded in 2008 by Mr.K.S.Alagiri. In 2010 the trust started a Maritime college in Chidambaram, Tamil Nadu which offers Diploma in Nautical Science and Marine Engineering degree. The college is affiliated to Indian Maritime University-a Central University run by the Government of India. LADO CERAMIC: CRISIL Assigns B+ Rating to INR37.5MM Term Loan ------------------------------------------------------------- CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to the bank facilities of Lado Ceramic Pvt Ltd (LACPL). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Term Loan 37.5 CRISIL B+/Stable Bank Guarantee 10 CRISIL A4 Cash Credit 20 CRISIL B+/Stable The ratings reflect the extensive experience of the company's promoters in marketing ceramic tiles, and the strategic location of its plant at Morbi, Gujarat ensuring availability of raw materials and labour. These rating strengths are partially offset by LACPL's exposure to risks relating to project implementation and modest scale of operations. Outlook: Stable CRISIL believes that LACPL will maintain its business risk profile backed by its promoters' industry experience. However, the company's financial risk profile is expected to remain average over the medium term, with high gearing and average debt protection metrics because of low accruals during the project stabilisation phase. The outlook may be revised to 'Positive' if the company stabilises its operations earlier than expected, leading to improvement in its financial risk profile. Conversely, the outlook may be revised to 'Negative' if LACPL reports low operating margin or it undertakes any large debt-funded expansion, or due to stretch in its working capital cycle weakening its financial risk profile. LACPL was incorporated in September 2014. The company is setting up a facility to manufacture ceramic tiles with annual capacity of 24,000 tonnes per annum. LACPL is promoted by Mr. Piyushbhai Kalariya and others. LAKSHMIGRAHA ENTERPRISES: CRISIL Reaffirms B+ INR150M Loan Rating ----------------------------------------------------------------- CRISIL's rating on the bank facilities of Lakshmigraha Enterprises (LE) continue to reflect its below-average financial risk profile, marked by modest net worth, high gearing, and average debt protection metrics. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bill Discounting 100 CRISIL B+/Stable (Reaffirmed) Cash Credit 150 CRISIL B+/Stable (Reaffirmed) Channel Financing 50 CRISIL B+/Stable (Reaffirmed) Proposed Long Term Bank Loan Facility 15 CRISIL B+/Stable (Reaffirmed) The rating also factor in its low profitability due to its trading nature of operations. These rating weaknesses are partially offset by the benefits that LE derives from its promoters' extensive industry experience. Outlook: Stable CRISIL believes that LE will continue to benefit over the medium term from its established position as a distributor of Reliance Industries Ltd (RIL) in South India. The outlook may be revised to 'Positive' if the firm registers significant and sustainable improvement in its financial risk profile, driven by improvement in cash accruals or capital infusion. Conversely, the outlook may be revised to 'Negative' if LE records significant decline in cash accruals due to decline in sales or profitability or if there is significant weakening in its capital structure on account of larger-than-expected debt-funded working capital borrowings. LE, set up in 1986, is a partnership firm, with Ms. R Nandini and Ms. N Nivedita as its partners. The firm is a distributor of RIL for its polyester fibre, including polyester-filament yarn, polyester-stable fibre, polyester-textured yarn, and related products. The firm is based in South India. The day-to-day operations are managed by Ms. R Nandini and family. LIGHTCITY CERAMIC: CRISIL Reaffirms 'B' Rating on INR52.7MM Loan ---------------------------------------------------------------- CRISIL's ratings on the bank facilities of Lightcity Ceramic Pvt Ltd (LCPL) continue to reflect LCPL's modest scale of operations in the highly competitive ceramic industry, its large working capital requirements and average capital structure. These rating weaknesses are partially offset by the extensive experience of LCPL's promoters, and the proximity of its manufacturing facilities to raw material and labour resources. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 7.5 CRISIL A4 (Reaffirmed) Cash Credit 25.0 CRISIL B/Stable (Reaffirmed) Proposed Long Term Bank Loan Facility 52.7 CRISIL B/Stable (Reaffirmed) Term Loan 34.8 CRISIL B/Stable (Reaffirmed) Outlook: Stable CRISIL believes that LCPL will benefit over the medium term from its promoters' extensive experience in the ceramics industry. The outlook may be revised to 'Positive' if LCPL improves its scale of operations while maintaining its profitability, leading to large cash accruals, or if it improves its working capital management. Conversely, the outlook maybe revised to 'Negative' if the company's cash accruals are low due to reduced order flow or profitability, or if its financial risk profile deteriorates, most likely because of a stretch in its working capital cycle or substantial debt-funded capital expenditure. Update LCPL's revenue is estimated to have declined by about 25 per cent year-on year to INR80 million in 2014-15 (refers to financial year, April 1 to March 31) on account of challenging environment in the real estate sector, which is its end-user industry. The profitability is estimated to be near constant at about 15 per cent in 2014-15. Consequently, it is estimated to have cash accruals of INR5.80 million in 2014-15. CRISIL believes that LCPL's business risk profile will remain constrained on account of its modest scale of operations. The company's operations continue to be working capital intensive owing to high inventory requirements. Its gross current asset (GCA) is estimated to be around 504 days as on March 31, 2015 as against 409 days as on March 31, 2014. CRISIL believes that LCPL's operations will remain working-capital-intensive over the medium term. The company's adjusted gearing is estimated to be around 3 times as on March 31, 2015, considering unsecured loans of INR9.60 million extended by promoters as neither debt nor equity (since they are expected to remain in the business over the medium term). The gearing remains high due to a modest net worth of INR19 million as on March 31, 2015 and high dependence on bank debt for funding the working capital requirements. The debt protection metrics are, however, estimated to be moderate with interest coverage and net cash accruals to total debt ratios of 1.7 times and 0.10 times, respectively, for 2014-15, on the back of moderate operating profitability. CRISIL believes that LCPL's financial risk profile will remain average over the medium term on account of modest accretion to reserves and near stable debt levels. LCPL has average liquidity marked by just sufficient cash accruals to meet its term debt obligations. The company's bank limit utilisation has been high at 90 per cent. The liquidity is, however, supported by unsecured loans from promoters amounting to INR9.6 million as on March 31, 2014. CRISIL expects the company to generate cash accruals of about INR6.9 million against repayment obligations of INR5.8 million in 2015-16. LCPL, incorporated in 2011, is promoted by Morbi (Gujarat)-based Mr. Durlabhjibhai Ramjibhai Patel, Mr. Sanjaybhai Loriya, Mr. Piyush Kumar Merja, and others. The company manufactures digital wall tiles at its facilities in Morbi. It has an installed capacity of 18,000 tonnes per annum. MAHADEV GINNING: ICRA Reaffirms B Rating on INR7cr Cash Credit -------------------------------------------------------------- ICRA has reaffirmed an [ICRA]B) rating to the INR7.00 crore fund based cash credit facilities of Mahadev Ginning Pressing Co. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Cash Credit 7.00 [ICRA]B reaffirmed The assigned rating continues to be constrained by Mahadev Ginning Pressing Co.'s (MGPC) weak financial risk profile as reflected bya leveraged capital structure along with weak debt coverage indicators and stretched liquidity position. The rating, further takes into account the vulnerability of MGPL's profitability to adverse fluctuations in raw material prices, which are subject to the seasonal availability of raw cotton and government regulations on MSP and export quota. The rating also factor in the low value additive nature of operations and intense competition on account of the fragmented industry structure which leads to thin profit margins. Further, being a partnership firm, any substantial withdrawal from the capital account may have an adverse impact on the capital structure of the firm. The rating, however, positively considers the long experience of the partners in the cotton industry and the advantages arising from the firm's proximity to the raw material sources which ensures regular and easy availability of raw cotton. Established in 2007, Mahadev Ginning Pressing Co. (MGPC) is promoted by Mr. Anirudh Jadav, Mr. Balvant Jadav, and Mr, Harish Jadav. The firm is engaged in cotton ginning and pressing business to produce cotton bales and cotton seeds. The firm has installed 24 ginning machines with an installed capacity of producing 220 cotton bales per day. Recent Results For the year ended 31st March, 2015, as per provisional results, the firm reported an operating income of INR33.34 crore with profit before tax (PBT) of INR0.18 crore. MAMTA TRANSFORMERS: CRISIL Assigns B Rating to INR40MM Cash Loan ----------------------------------------------------------------- CRISIL has assigned its 'CRISIL B/Stable/CRISIL A4' ratings to the bank facilities of Mamta Transformers Private Limited (MTPL). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 30 CRISIL A4 Cash Credit 40 CRISIL B/Stable The ratings reflect the company's below-average financial risk profile marked by high gearing and weak debt protection metrics. The ratings also factor in MTPL's modest scale and working- capital-intensive nature of operations. These rating weaknesses are partially offset by its promoters' extensive experience in the transformer industry. Outlook: Stable CRISIL believes that MTPL will continue to benefit from its promoters' extensive industry experience over the medium term. The outlook maybe revised to 'Positive' in case of significantly higher-than-expected cash accruals or capital infusion along with efficient working capital management. Conversely, the outlook maybe revised to 'Negative' in case of low cash accruals or large working capital requirements or if MTPL undertakes a large debt- funded capital expenditure, exerting pressure on its liquidity. Incorporated in 1995, MTPL is based in Indore (Madhya Pradesh) and is primarily engaged in the manufacturing and repairing of distribution transformers. The company is promoted by Mr. R L Ora, Mr. Vineet Ora and their family members. MANALTHEERAM AYURVEDIC: CRISIL Rates INR20MM LT Loan at 'B' ----------------------------------------------------------- CRISIL has assigned its 'CRISIL B/Stable' rating to the long term bank facilities of Manaltheeram Ayurvedic Hospital & Research Centre Pvt. Ltd. (Manaltheeram). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit/Overdraft 6.6 CRISIL B/Stable facility Long Term Loan 20.0 CRISIL B/Stable The rating reflects Manaltheeram's small scale of operations in a highly competitive hospitality segment and its weak financial risk profile marked by high gearing and small net worth. These rating weaknesses are partially offset by the extensive industry experience of its promoters in the hospitality segment. Outlook: Stable CRISIL believes that Manaltheeram will benefit from the extensive industry experience of the promoters over the medium term. The outlook may be revised to 'Positive' if company reports sustainable increase in revenues and profitability leading to improvement in its financial risk profile. Conversely the outlook may be revised to 'Negative' if the financial risk profile of the company deteriorates mostly driven by significantly larger than debt funded capex or further support extended to promoters or affiliates, or in case of a significant decline in cash accruals due to low occupancy levels. Manaltheeram Ayurveda Hospital & Research Centre Private Limited (Manaltheeram) was set up in 2005 in Trivandrum (Kerala). The company runs two resorts that offer stay and treatments for various ailments using Ayurveda and Yoga. The company is promoted by Mr. Baby Matthew. Manaltheeram reported, on a provisional basis, net profit of INR5.3 million on operating income of INR162.7 million for 2014- 15. The company reported a net loss of INR1.9 million on operating income of INR153 million for 2013-14. MASCOT ENGITECH: CRISIL Assigns B+ Rating to INR70MM Cash Loan -------------------------------------------------------------- CRISIL has assigned its 'CRISIL B+/Stable' rating to the bank facilities of Mascot Engitech Pvt Ltd (MEPL). The rating reflects MEPL's working capital intensive and modest scale of operations. These rating weaknesses are partially offset by its promoters' extensive experience and above-average financial risk profile. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 70 CRISIL B+/Stable Outlook: Stable CRISIL believes that the company will continue to benefit over the medium term from its promoters' extensive industry experience. The outlook may be revised to 'Positive' if the company achieves higher scale of operations and profitability along with better working capital management. Conversely, the outlook may be revised to 'Negative' if it does not achieve the expected sales or profitability, or its working capital requirements increase, thus leading to weak business and financial risk profiles. MEPL, is a Bhavnagar (Gujarat) based company. The company is owned and managed by Mr. Mehul Patel and his family members. The company is engaged into providing fabrication services on job work basis to ship building companies as well as the industrial segment. MEPL reported a profit after tax (PAT) of about INR8.5 million on revenue of INR305.5 million for 2013-14 (refers to financial year, April 1 to March 31), against a net profit of INR12.5 million on revenue of INR376 million for 2012-13. MIRRIKH MOTORS: CRISIL Assigns B+ Rating to INR150MM Cash Loan -------------------------------------------------------------- CRISIL has assigned its 'CRISIL B+/Stable' rating to bank facilities of Mirrikh Motors Private Limited (Mirrikh). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 150 CRISIL B+/Stable CRISIL's rating on the bank loan facilities of Mirrikh's reflects its modest financial risk profile, marked by leveraged capital structure and modest interest coverage ratio, and intense competition in auto dealership industry. These rating weaknesses are partially offset by its established market position as Hyundai Motors India Limited (HMIL) dealer in Surat (Gujarat). Outlook: Stable CRISIL believes that Mirrikh will benefit over the medium term from its promoters' extensive experience in automobile dealership business and its established relationship with its principal, HMIL. The outlook may be revised to 'Positive' if the company's financial risk profile improves, led by improvement in scale and operating profitability. Conversely, the outlook may be revised to 'Negative' if Mirrikh's working capital cycle lengthens significantly, or it undertakes any large debt-funded capital expenditure plans, leading to further deterioration in its overall financial risk profile. Mirrikh is a Surat based authorised dealer for HMIL in Surat and Bardoli, Gujarat. It also deals in spares and accessories and carries out servicing of vehicles. Mirrikh reported a profit after tax (PAT) of INR5.2 million on net sales of INR 884.3 million for 2013-14 (refers to financial year, April 1 to March 31), against a PAT of INR5.7 million on net sales of INR896.7 million for 2012-13. MSR INFRAA: ICRA Reaffirms 'B' Rating on INR20cr Term Loan ---------------------------------------------------------- ICRA has reaffirmed the long term rating of [ICRA]B assigned to the INR20 crore term loan limits of MSR Infraa (erstwhile RR Constructions). Amount Facilities (INR crore) Ratings ---------- ----------- ------- Term Loan 20.00 [ICRA]B/reaffirmed The rating continues to positively factor in the long standing experience of the promoters of more than 15 years in the real estate industry and the favorable location of the entity's only ongoing project, R.R. Signature, which is in close proximity to various IT companies and educational institutions. The rating is, however, constrained on account of execution risk as this project is first ever high rise development by the firm and the size of the project is significantly larger than the past projects executed by the firm. The rating factors in the funding risk associated with the project as significant portion of the project cost is expected to be met through customer advances, which will be contingent upon the firm's ability to sell the remaining space as well as maintain healthy collection efficiency. MSR's high debt level has resulted in a stretched capital structure as reflected by a gearing of 8.62x as on 30th September, 2014. Besides, the rating also takes into account the risks inherent in partnership nature of the firm, inter alia, the limited ability to raise capital and the exposure to personal liabilities of the partners. ICRA also takes note of significant competition in the region from various other established real estate developers. Going forward, ability of the company to achieve healthy booking levels, maintain high collection efficiency and execute its ongoing project in a timely manner would be the key rating sensitivities. MSR Infraa was founded in the year 1996 by Mrs. M. Sunitha as a proprietorship firm. The firm was reconstituted as a partnership firm in September, 2013 with Mrs. M Sunitha and Mr. M Sanjeeva Raju as partners. The entity is engaged in the business of real estate development and has completed many residential projects in Nellore and Bangalore since its inception. They are currently developing a residential apartment project, "R.R. Signature" at Hegde Nagar - Thanisandra Road, Bangalore. The project will consist of 2 blocks of 14 floors each excluding two basements and ground floor for parking, with a total of 248 2-BHK and 3-BHK apartments. The total project cost is INR133 crore which is to be funded through bank loans to the tune of INR20 crore, INR35 crore through promoter contribution and balance INR78 crore through customer advances. Recent Results The entity reported net profit of INR0.96 crore on operating income of INR4.58 crore for FY 2014 as compared to a net profit of INR0.93 crore on operating income of INR7.64 crore for FY 2013. NAVKAR WHEELS: CRISIL Assigns B+ Rating to INR49MM Term Loan ------------------------------------------------------------ CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-term bank facilities of Navkar Wheels (NW). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 41 CRISIL B+/Stable Term Loan 49 CRISIL B+/Stable The rating reflects NW's geographical concentration in revenue, and its below-average financial risk profile marked by below average debt protection metrics. The rating also factors in the firm's limited bargaining power with its suppliers and exposure to intense competition in the automotive dealership market. These rating weaknesses are partially offset by the extensive industry experience of NW's promoters and the firm's established relationship with Hero MotoCorp Ltd (Hero MotoCorp). Outlook: Stable CRISIL believes that NW will continue to benefit over the medium term from its promoters' relationship with Hero MotoCorp and the established position of Hero MotoCorp in the motorcycles segment. The outlook may be revised to 'Positive' if NW's business risk profile improves with the new dealership of Hyundai Motors India leading to improvement in NW's scale of operations and profitability. Conversely, the outlook may be revised to 'Negative' in case of pressure on NW's financial risk profile, particularly its liquidity, because of low cash accruals or large working capital requirements or debt-funded capital expenditure. NW is an authorised and exclusive dealer for all two-wheelers of Hero Moto Corp in Dhule (Maharashtra). NW operates one 3S (sales- service-spares) showroom in Dhule. It is also starting dealership of Hyundai in May 2015. NEW DIAMOND: ICRA Ups Rating on INR37.50cr Term Loan From 'B+' -------------------------------------------------------------- ICRA has upgraded the long-term rating to [ICRA]BB- from [ICRA]B for the fund based bank facilities of New Diamond Era aggregating to INR44.00 crore. The long-term rating has a 'Stable' outlook. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based Limit- 37.50 [ICRA]BB- (Stable); Term Loan upgraded from [ICRA]B+ Fund Based Limit- 6.50 [ICRA]BB- (Stable); Cash Credit upgraded from [ICRA]B+ The rating upgrade takes into account the firm's healthy growth in operating revenues along with sound profitability margins, supported by favorable demand for lab-grown diamonds in the international market. The rating also considers NDE's improvement in gearing levels due to infusion of capital during FY 2015. The rating is, however, constrained by the firm's working capital intensive nature of operations as a result of high inventory levels and receivable cycle. The vulnerability of the firm's profitability to adverse fluctuations in foreign exchange in the absence of a formal hedging policy and exposure to project implementation risk, given the large scale of capacity expansion planned in the near term, is a concern too. The rating also factors in the risk of capital withdrawals in a partnership firm, which may impact its capital structure. Established in 2011, New Diamond Era (NDE) is engaged in the production of Chemical Vapor Deposition (CVD) Carbon Stones (i.e., lab-grown diamonds or man-made diamonds). These may be used for cutting tools, as semi-conductors, as high-power transistors, as well as in the jewelry industry. The firm is part of the Bhatvari Group (Surat) with business interests across restaurants, textile manufacturing, engineering and diamond manufacturing. The firm has a manufacturing facility at Sachin SEZ in Surat, Gujarat, wherein it has installed 48 new CVD machines (imported from Germany) with an installed capacity to manufacture 19,200 carats of lab-grown diamonds per annum. The company reported a Profit before Tax (PBT) of INR3.59 crore on an operating income of INR16.99 crore in FY 2014. For FY 2015, the company has reported a PBT of INR11.56 crore on an operating income of INR32.15 crore (provisional). PARVATI COTTON: ICRA Suspends 'B' Rating on INR6cr LT Loan ---------------------------------------------------------- ICRA has suspended the [ICRA]B rating assigned to the INR6.00 crore long term fund based facilities of Parvati Cotton Industries. The suspension follows ICRAs inability to carry out a rating surveillance in the absence of the requisite information from the company. Parvati Cotton Industries (PCI) was incorporated in the year 2006 as a partnership firm having ten partners. The firm is engaged in the ginning and pressing of raw cotton and crushing cotton seeds to extract cotton seed oil and cotton seed oil cake. The firm's manufacturing facility is located at Mehsana, Gujarat and is equipped with 24 ginning, 1 pressing machine and 6 expellers with total production capacity of 200 bales per day and 36 MT of cotton seed oil assuming the operations are carried out 24 hours a day. The partnership was reconstituted in 2012 with retirement of five partners and admission of six new partners. PAVAS POLYCHEM: CRISIL Reaffirms 'B' Rating on INR5MM Cash Loan --------------------------------------------------------------- CRISIL's ratings on the bank loan facilities of Pavas Polychem Pvt Ltd (PPPL) continues to reflect the company's average financial risk profile, small scale of operations in the fragmented polyvinyl chloride (PVC) resin trading industry, and vulnerability to its operating margin to fluctuations in PVC prices. These rating weaknesses are partially offset by the extensive industry experience of PPPL's promoters and financial support received from them. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 5 CRISIL B/Stable (Reaffirmed) Letter of Credit 70 CRISIL A4 (Reaffirmed) Outlook: Stable CRISIL believes that PPPL will continue to benefit over the medium term from the extensive industry experience of its promoters. The outlook may be revised to 'Positive' if the company's scale of operations increases significantly, along with improvement in the financial risk profile. Conversely, the outlook may be revised to 'Negative' if PPPL's financial risk profile deteriorates, most likely due to increase in working capital requirements or large debt-funded capital expenditure. Incorporated in 2011, PPPL is a Kanpur (Uttar Pradesh)-based company engaged in the trading of PVC resin. The company is promoted by Mr. Pavan Khatri and started its commercial operation from September 2011. PIONEER SPINNING: ICRA Assigns 'B+' Rating to INR6.0cr LT Loan -------------------------------------------------------------- ICRA has assigned a long-term rating of [ICRA]B+ to the INR6.00 crore fund based facilities and INR4.00 crore proposed facilities of Pioneer Spinning & Weaving Mills Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund based facilities- (long-term) 6.00 [ICRA]B+ assigned Fund based facilities- Proposed (long-term) 4.00 [ICRA]B+ assigned The rating considers the small scale of operations of the company, which coupled with high competition results in limited pricing flexibility, exposing the company to volatility in cotton and yarn prices. ICRA also takes note of the on-going debt-funded capex, which is expected to exert pressure on capital structure and stretch the company's debt metrics over the medium term. The rating however draws comfort from the long-standing experience of the promoters and moderate working capital intensity of operations, aided by prompt collection of payments from its customers. Pioneer Spinning and Weaving Mills Limited was established in the year 1979. The company is engaged in manufacturing of cotton yarn of 40s, 60s, 80s, 92s and 100s counts. It initially started with a capacity of 9,000 spindles and following the steady addition of spindles over the years the capacity at present is 38,160 spindles and 400 rotors. The company's manufacturing facility is located in Chittoor district of Andhra Pradesh. It has ~610 employees (including temporary workers of ~300).The company procures cotton of MCU-5 and DCH-32 varieties from Andhra Pradesh, Madhya Pradesh and Gujarat, and sells the produce in the domestic markets. Recent Results For the financial year 2013-14, the company reported net profit of INR1.6 crore on an operating income of INR59.1 crore as against a net profit of INR3.6 crore on an operating income of INR51.7 crore for the financial year 2012-13. PNP ENGINEERING: CRISIL Ups Rating on INR110MM Bank Loan to B- -------------------------------------------------------------- CRISIL has upgraded its rating on the long-term bank facilities of PNP Engineering Works Pvt Ltd (PNP) to 'CRISIL B-/Stable' from 'CRISIL C', and has reaffirmed its rating on the company's short- term bank facility at 'CRISIL A4'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 50 CRISIL A4 (Reaffirmed) Cash Credit 40 CRISIL B-/Stable (Upgraded from 'CRISIL C') Proposed Long Term 110 CRISIL B-/Stable (Upgraded Bank Loan Facility from 'CRISIL C') The rating upgrade reflects PNP's timely repayment of debt (not rated by CRISIL) over the three months ended April 30, 2015, aided by improvement in liquidity, which was driven by large orders in 2014-15 (refers to financial year, April 1 to March 31); the orders are to be executed in 2015-16. However, the company's cash credit account continues to be overdrawn, though the same is regularized in less than 30 days. The rating upgrade also reflects the improvement in PNP's business and financial risk profiles, marked by increase in operating income and improvement in debt protection metrics and gearing. PNP's operating income for 2014-15 is estimated at INR220 million as against INR60 million in 2013-14, driven by higher orders received from Reliance Industries Ltd, Indian Oil Corporation Ltd, and Expo Gas Containers Ltd. CRISIL expects PNP's operating income to remain at similar levels over the medium term. Its operating margin, however, is estimated to decline to 5.6 per cent in 2014- 15 from 7.2 per cent in 2013-14 on account of the company's inability to pass on the increase in cost of raw materials to the end customers. CRISIL expects the operating margin to remain at current levels over the medium term. The company's estimated interest coverage and net cash accruals to total debt ratios were at 1.8 times and 0.08 times, respectively, for 2014-15, as against 0.5 times and -0.04 times, respectively, for 2013-14 on account of improvement in net cash accruals to around INR5 million in 2014-15 as against negative cash accruals in 2013-14; the improvement in cash accruals is backed by improvement in liquidity, which was, in turn, driven by better orders in 2014-15 and expected execution of these orders in 2015-16. CRISIL expects PNP's debt protection metrics to remain at similar levels over the medium term. The company's estimated gearing was at 1.57 times as on March 31, 2015, as against 1.74 times as on March 31, 2014, on account of reduction in debt level and accretion to reserves. The same is expected to improve over the medium term on account of repayments and accretion to reserves. In addition, the company's estimated net worth was at around INR40 million as on March 31, 2015. CRISIL expects PNP's net worth to increase marginally over the medium term backed by increase in cash accruals. The ratings reflect PNP's modest financial risk profile and modest scale of operations. These rating weaknesses are partially offset by the extensive experience of PNP's promoters in the engineering and construction services business. Outlook: Stable CRISIL believes that PNP's management of its liquidity will remain a key sensitivity factor over the medium term on the back of tender-based orders being received by the company. The outlook may be revised to 'Positive' if there is substantial improvement in PNP's cash accruals. Conversely, the outlook may be revised to 'Negative' if the company delays servicing its debt on time or if its financial risk profile deteriorates on the back of decline in expected cash accruals or any major debt-funded capital expenditure programme undertaken by the company over the medium term. PNP was set up by Mr. Subhas Chandra Panja in Haldia (West Bengal) in 1998. The company provides engineering and construction services such as installation of storage tanks, industrial piping, and structures for oil refineries, petrochemical companies, and the steel industry. PRINT SOLUTIONS: ICRA Assigns 'D' Rating to INR11cr Term Loan ------------------------------------------------------------- ICRA has assigned its long term rating of [ICRA] D to the INR11.0 Crore bank facilities of Print Solutions Private Limited (PSPL). Amount Facilities (INR crore) Ratings ---------- ----------- ------- Term Loan 11.0 ICRA]D; assigned ICRA's rating is driven by delays in debt servicing by PSPL, on account of its weak liquidity position. ICRA also takes note of the revenue concentration risk to which the company is exposed, as most of its revenues emanate from a single property, accentuating the risk of delays in debt servicing due to delay in payment of lease rent by the lessee. ICRA also takes cognizance of the established track record of the promoters in the real estate business. Going forward, the ability of the company to build up a satisfactory track record of timely debt servicing and maintain a satisfactory liquidity position will be the key rating sensitivities. PSPL was promoted by Mr.Dushyant Pahare and was later acquired by its current owners Mr. Gurjeet Singh Chhabra and family . The company is a part of the Century 21 group which is involved in real estate development in the Indore region. PSPL has leased out land and the building constructed on it to Malwa Hospitalities Pvt. Ltd. which has in turn has developed a 181 room hotel - Effotel Hotels on the same. PSPL earns an annual rent of INR2.4 crore from this property. The Century 21 group has been promoted by Mr. Gurjeet Singh Chhabra and includes companies like M.P. Entertainment and Developers Private Limited (MPED), Ria Hotels Pvt. Ltd (RHPL) and Century 21 Town Planners Private Limited (CTPL). Mr. Chhabra has been involved in real estate development in and around Indore. He started his business by operating gardens which were let out for marriages and parties. He later ventured into development of shopping malls. Currently the group has two operational malls under CTPL and MPED. Both these malls are located on A.B. Road, Indore (Madhya Pradesh). RHPL has leased out land to Bestech Hospitalities Pvt. Ltd. (Bestech), which in turn has developed and constructed a five star hotel Radisson on the same. Recent Results PSPL has reported Profit after tax of INR1.08 crore against an operating income of INR2.0 crore 2014-15. PUREWAL STONE: ICRA Assigns 'B' Rating to INR8.60r LT Loan ---------------------------------------------------------- ICRA has assigned its long term rating of [ICRA]B to the INR8.60 crore fund based bank facilities and INR0.40 crore unallocated long term limits of Purewal Stone Crusher. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based Limits- Long Term 8.60 [ICRA]B; assigned Unallocated- Long Term 0.40 [ICRA]B; assigned ICRA's rating takes into account PSC's limited track record of operations, owing to its nascent stage of operations and the high level of competitive intensity due to the presence of a large number of crushers in the vicinity. The rating also factors in the regulatory restrictions on the river bed mining industry which might impact raw material availability. ICRA also takes into account the vulnerability of PSC's profitability to a slowdown in the real estate and construction sectors, which are its key off takers. Further, the rating is also constrained by the firm's high expected gearing levels, due to the expected high working capital intensity of the firm, given the substantial inventory levels it is required to maintain. The rating also takes into account the firm's scheduled debt repayment obligations, which are large relative to its projected cash accruals. However, the rating derives comfort from the experience of the promoters in the industry, and favorable demand outlook for stone grits given the healthy level of construction activity in the surrounding areas. Going forward, the firm's ability to ramp up its operations and maintain an optimal working capital cycle will be the key rating sensitivities. PSC is engaged in the business of screening and crushing of stones which are sourced from river-beds in the Kashipur region of Uttarakhand. The firm is duly licensed and authorized by the Geology and Mining Department, Forest Department and the State Government of Uttarakhand for the same. The stone crushing site of the firm is located in village Veerpur, Lachhi, Ramnagar, Uttarakhand, over an area of 12 acres, with an installed annual processing capacity of 8,60,000 Metric Tonnes (MT) and an installed annual crushing capacity of 9,000 MT. The plant commenced operations from March, 2015. PURPLE ADVERTISING: ICRA Suspends 'D' Rating on INR24cr Term Loan ----------------------------------------------------------------- ICRA has suspended the long term rating of [ICRA]D assigned to the INR24 crore term loans of Purple Advertising Services Pvt. Ltd. The suspension follows ICRA's inability to carry out a rating surveillance in the absence of the requisite information from the entity. RACHIT CREATION: CRISIL Reaffirms B+ Rating on INR60.3MM Loan ------------------------------------------------------------- CRISIL's ratings on the bank facilities of Rachit Creation (RC) continues to reflect RC's weak financial risk profile, marked by a small net worth and high gearing, and its modest scale of operations in the intensely competitive embroidery designing business. These rating weaknesses are partially offset by RC's established track record in the textile industry. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 3.3 CRISIL A4 (Reaffirmed) Cash Credit 20.0 CRISIL B+/Stable (Reaffirmed) Proposed Long Term Bank Loan Facility 33.9 CRISIL B+/Stable (Reaffirmed) Rupee Term Loan 60.3 CRISIL B+/Stable (Reaffirmed) Outlook: Stable CRISIL believes that RC will continue to benefit over the medium term from its established relationship with its customers, and the superior quality of its embroidery designs. The outlook may be revised to 'Positive' if the firm's financial risk profile improves, most likely driven by infusion of fresh capital by the proprietor or significant increase in its scale of operation and profitability. Conversely, the outlook may be revised to 'Negative' if there is a significant deterioration in RC's working capital management or a decline in its profitability, leading to lower-than-expected net cash accruals, or the firm undertakes a large debt-funded capital expenditure, constraining its financial risk profile. Update RC reported net sales of INR124.7 million in 2013-14 (refers to financial year, April 1 to March 31) as against INR96.1 million in the previous year led by improved contribution from fabrics sales. The firm, on a provisional basis, reported net sales of INR100 million (fabric sales contributes 35 per cent) till January 31, 2015 and is expected to report sales of INR130 million to INR140 million for the full year. RC's operating margin was at 15.7 per cent during 2013-14 as against 20.1 per cent in the previous year on account of rise in material cost. CRISIL believes that with improved contribution from fabric sales, the firm's operating margin will remain at 18 to 20 per cent for 2014-15. With similar revenue mix, CRISIL expects the operating margin to be at around 20 per cent over the medium term. RC's gross current assets were at 123 days as on March 31, 2014 led by high receivables of 93 days. RC's liquidity profile remains stretched, marked by expected moderate cash accruals of INR14 million to INR16 million a year over the medium term against maturing term debt obligation of around INR13.2 million; this is on account of lower accretion to reserves, withdrawal of capital, and absence of equity infusion by promoters. The firm's debt protection metrics remain moderate with net cash accruals to total debt (NCATD) ratio of 0.16 times and interest coverage ratio of 3.8 times for 2013-14. CRISIL expects the firm to maintain its NCATD and interest coverage ratios at 0.3 to 0.4 times and 4.8 to 5.0 times, respectively, over the medium term. RC reported a profit after tax (PAT) of INR3.9 million on net sales of INR124.7 million for 2013-14 as against a PAT of INR3.5 million on net sales of INR96.1 million for 2012-13. RC, a proprietorship concern set up by Mr. Ramniwas Gupta in 2005 in Surat (Gujarat), is engaged in designing embroidery on fabric. The firm operates embroidery machines and customises its designs according to its customers' requirements. RAJENDRA GEARS: ICRA Suspends B+ Rating on INR4cr Fund Based Loan ----------------------------------------------------------------- ICRA has suspended [ICRA]B+ as rating assigned to the INR4.0 crores fund based facilities and [ICRA]A4 rating assigned to INR1.0 crore fund based and INR1.0 crore non-fund based facilities of Rajendra Gears. The suspension follows ICRA's inability to carry out a rating surveillance in the absence of the requisite information from the company. RANCHI EXPRESSWAYS: ICRA Reaffirms D Rating on INR1,191.6cr Loan ---------------------------------------------------------------- ICRA has reaffirmed the long-term rating assigned to the INR1191.60 crore term loan facilities of Ranchi Expressways Limited at [ICRA]D. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Term loans 1191.60 [ICRA]D re-affirmed The re-affirmation of rating takes into account the continued delays in servicing its term loan obligations. In terms of financial progress, REL achieved a progress of 16% of the total Engineering, Procurement and Construction (EPC) cost as against the scheduled target of 93% as on Mar, 2015 due to unavailability of RoW and delayed equity infusion. Further, there has been cost escalation which is estimated to be around INR85 crore for which funding is yet to be tied up. ICRA notes that owing to delays in securing RoW by the authority, REL has sought extension of timeline for completion of project till March, 2016 as against scheduled COD of June, 2015. The rating continues to take into account the implementation risks, pending land acquisition and susceptibility to adverse movement of the interest rates. The rating is further constrained by REL's exposure to funding risk in the light of deteriorated financial risk profile of Madhucon Projects Limited (MPL) and given that MPL is yet to bring in around INR200 crore of equity and would be required to part fund the cost escalation, which gets further accentuated by group's significant funding commitments towards various on-going BOT projects. While reaffirming the rating, ICRA has noted the operational strength of the promoter (MPL), who is also the EPC contractor, fixed-price EPC contract; absence of traffic risk and low revenue risk due to annuity nature of the project and the deferment in repayment schedule by 24 months from Mar 2015 to Mar 2017. Going forward, REL's ability to service its debt obligations in a timely manner will be the key rating sensitivity. Further, timely infusion of remaining equity and tying up funds for the escalation in cost, timely execution of the project as per revised schedule will be the other rating sensitivities. Ranchi Expressways Limited (REL) has been incorporated in the year 2011 as a special purpose vehicle promoted by Madhucon Infra Limited (MIL) and Madhucon Projects Limited (MPL) through their Road BOT (Build, Operate, Transfer) projects holding company Madhucon Toll Highways Limited (MTHL) to carry out the four-laning of Ranchi-Jamshedpur Highway section. Four laning of Ranchi to Jamshedpur section of NH-33 from km 114.000 to km 277.500 in the state of Jharkhand under NHDP Phase III on Design, Build, Finance, Operate, Transfer (DBFOT) Annuity basis. The total cost of the project is INR1655.0 crore, including the Interest During Construction (IDC) component of INR147.64 crore. The total concession period is 15 years including the construction period of 2.5 years. The appointed date for the project has been announced as 4th Dec 2012 and the scheduled date of completion of the project is 3rd June 2015. REL will receive a fixed annuity payment of INR133.2 crore semi-annually for a period of 12.5 years. The project is being funded by INR1191.6 crore debt and INR463.4 crore of promoter's contribution in the form of INR182.05 crore equity and INR281.35 crore interest free unsecured loans. As on 31st Mar 2015, promoters have brought in INR262.28 crore and INR567.61 crore of the total 1191.60 crore tied-up debt has been drawn down. As per the Lenders Independent Engineer (LIE)'s report for the dated April'15, 154 Km (94.2%) of the total length of 163.5 Km was available to REL without any encumbrances. RANGER COTTON: CRISIL Reaffirms 'B' Rating on INR185MM Loan ----------------------------------------------------------- CRISIL has assigned its 'CRISIL A4' rating to the short-term bank loan facilities and has reaffirmed 'CRISIL B/Stable' rating for long-term bank facilities of Ranger Cotton Mills (India) Pvt Ltd (Ranger Cotton). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 14.6 CRISIL A4 (Assigned) Term Loan 116.4 CRISIL B/Stable (Reaffirmed) Cash Credit 185 CRISIL B/Stable (Reaffirmed) The ratings continue to reflect the company's below-average financial risk profile, marked by high gearing and susceptibility of operating margins to volatility in raw material prices. These rating weaknesses are partially offset by the promoters' experience in the textile business. On May 11, 2015, CRISIL had assigned its 'CRISIL B/Stable' ratings to the long-term bank facilities of Ranger Cotton. Outlook: Stable CRISIL believes that Ranger Cotton will benefit over the medium term from the experience of the promoters in the textile business. The outlook may be revised to 'Positive' if the company posts higher-than-expected revenue and profitability and improves its capital structure. Conversely, the outlook may be revised to 'Negative' if Ranger Cotton underutilises its capacities, thereby reducing its cash accruals and lengthening its working capital cycle, or if it undertakes a large debt-funded capital expenditure programme. Ranger Cotton was set up in 2004 by Mr. A Arumugam. It manufactures cotton yarn in counts ranging from 20s to 40s, and grey cotton. The company's facilities are located at Gobichettipalayam (Tamil Nadu). S.K.M COLD: CARE Assigns 'B' Rating to INR5.15cr LT Loan -------------------------------------------------------- CARE assigns 'CARE B' the long-term rating to bank facilities of S.K.M Cold Chain And Logistics. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 5.15 CARE B Assigned Rating Rationale The rating assigned to the bank facilities of S. K. M Cold Chain & Logistics (SKM) is primarily constrained on account of its nascent stage of operations coupled with stabilization risk associated with the recently completed debt-funded capex and its presence in the highly competitive and fragmented cold storage industry. However, the rating derives strength from the long experience of the promoters in the agricultural industry and eligibility for government benefits for setting up cold storage unit. The ability of SKM to quickly stabilize its operations and achieve the envisaged level of capacity utilisation and cash accruals are the key rating sensitivities. SKM was incorporated on April 1, 2014 as a partnership firm by its five key partners namely Mr Sanjiv Laxmichand Hinduja, Mr Bharatsingh Lalsinh Raheva, Mr Mahendrasinh Lalsinh Rahevar, Mr Dhirajsinh Lalsinh Rehavr and Mr Omkar Ramlakhan Mahto with an objective of setting up cold storage facility in the food preservation business segment along with carrying out business of trading of fruits and vegetables. The storage plant is spread over an area of 8,000 Sq. meters at Rupal village of Sabarkantha district in Gujarat with total storage capacity of 1.40 lakh bags per annum (LBPA). Moreover, four storage chambers are constructed in the plant to store and preserve vegetables; mainly potatoes to maintain and preserve its quality for a longer period of time. The commercial operations started from February 2015. SADIK ENTERPRISE: CRISIL Reaffirms B- Rating on INR50MM Loan ------------------------------------------------------------ CRISIL's rating on the long-term bank facility of M/S. Sadik Enterprise (SE) continues to reflect SE's small scale of operations, below-average financial risk profile, and customer concentration in its revenue profile. These rating weaknesses are partially offset by the extensive experience of the firm's promoters in the coal trading industry. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bill Discounting 50 CRISIL B-/Stable (Reaffirmed) Outlook: Stable CRISIL believes that SE will benefit over the medium term from its promoters' extensive industry experience. The outlook may be revised to 'Positive' if the firm increases its scale of operations and improves its cash accruals. Conversely, the outlook may be revised to 'Negative' if SE undertakes any large debt- funded capital expenditure and reports low revenue and profitability, leading to deterioration in its financial risk profile, particularly liquidity. SE was set up in 1998 in Hailakandi (Assam) by the Choudhury family. The firm trades in coal and bamboo, and sells its products primarily to Hindustan Paper Corporation Ltd. SE's day-to-day operations are managed by Mr. Nizam Uddin Choudhury. SANJOO PRINTS: ICRA Suspends 'D' Rating on INR6.77cr LT Loan ------------------------------------------------------------ ICRA has suspended the [ICRA]D rating assigned to the INR6.77 crore long term fund based bank facilities and INR0.96 crore unallocated bank facilities of Sanjoo Prints Private Limited. The suspension follows ICRA's inability to carry out a rating surveillance in the absence of the requisite information from the company. SEMI EXPORTS: CRISIL Reaffirms B+ Rating on INR40MM Cash Loan ------------------------------------------------------------- CRISIL's ratings on the bank facilities of Semi Exports (SE) continue to reflect SE's modest scale of operations in the intensely competitive cashew industry, and below-average financial risk profile, marked by high total outside liabilities to tangible net worth (TOLTNW) ratio. These rating weaknesses are partially offset by the extensive experience of SE's proprietor in the cashew industry. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 40 CRISIL B+/Stable (Reaffirmed) Letter of Credit 50 CRISIL A4 (Reaffirmed) Outlook: Stable CRISIL believes that SE will continue to benefit over the medium term from its established track record and stable demand prospects in the cashew industry. The outlook may be revised to 'Positive' if firm generates large cash accruals resulting in an improvement in financial risk profile for SE. Conversely, the outlook may be revised to 'Negative' if the firm reports low revenue and profitability, large debt-funded capital expenditure, or significant withdrawals of capital by the proprietor. Update SE reported an estimated operating income of INR230 million for 2014-15 (refers to financial year, April 1 to March 31), up 14 per cent over the previous year, driven by steady demand from the domestic market. The operating margin ranged from 2.5 to 3 per cent over the two years through 2014-15. The business risk profile is expected to remain moderate over the medium term driven by steady demand. The financial risk profile is below average, marked by high TOLTNW ratio and low net worth. The TOL/TNW ratio and net worth were estimated at 6.6 times and INR15 million as on March 31, 2015. The TOL/TNW is expected to remain high on account of sizeable working capital borrowings. The debt protection metrics are weak, with interest coverage ratio of 1.66 times on account of subdued profitability. CRISIL believes that SE's financial risk profile will remain below-average over the medium term owing to the large working capital requirement met with its bank lines. The liquidity is adequate, with moderate bank limit utilisation at 64 per cent on average over the 12 months through March 2015. The cash accruals are adequate-estimated at INR2.8 million to INR2.9 million-to over maturing debt, including vehicle loan obligations of INR1.1 million over the medium term. CRISIL believes that SE will maintain adequate liquidity over the medium term, supported by moderate bank limit utilisation. SE, a proprietorship firm of Mrs. Laija Navabudeen, processes and trades in raw cashew nuts. The firm is based in Kollam (Kerala). SEVEN-11 INDUSTRIES: ICRA Reaffirms B+ Rating on INR5.50cr Loan --------------------------------------------------------------- ICRA has reaffirmed the rating of [ICRA]B+ to the INR5.50 crore fund-based cash credit facility and INR0.18 crore term loan facility of Seven-11 Industries. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Cash Credit 5.50 [ICRA]B+; Reaffirmed Term Loan 0.18 [ICRA]B+; Reaffirmed The rating reaffirmation continues to factor in Seven-11 Industries (SI) modest scale of operations and susceptibility to variations in raw material prices due to limited ability to pass on the raw material price increase to the customers. The rating is further constrained by the firm's highly competitive business environment given the fragmented industry structure as well as high working capital intensity due to slow realization from debtors, leading to high reliance on working capital borrowings and a stretched capital structure. The rating, however, favorably factors in the long standing experience of promoter in line of business as well as eestablished relationship with reputed suppliers. Seven-11 Industries was established as a proprietorship firm in 2005. In 1991, Mr. Rajkumar Lodha started a proprietorship firm named Shell Colours & Chemicals. The firm is engaged in trading water based inks, retarder, adhesives, etc. However, in 2005, he closed this firm and started a new firm in the name of Seven-11 Industries of which, his wife Mrs. Shelloo Lodha was the proprietor. This firm was started to engage in the manufacturing of water based printing inks, adhesives and retarder. The manufacturing facilities are situated in Dhabhel Daman with an installed capacity to manufacture 3560 MTPA. In 2011, the firm opened its branch in Sarigam Gujarat which is engage in manufacturing of emulsion paints for walls. The manufacturing facility of the firm is located in Nani Daman. The plant has an installed capacity to manufacture 3560 MTPA of its products. Recent Results For the year ended 31st March, 2014, the firm reported an operating income of INR25.59 crore with profit after tax (PAT) of INR0.83 crore. SREE VIJAYALAKSHMI: ICRA Assigns 'IrB+' Issuer Rating ----------------------------------------------------- ICRA has assigned the issuer rating of IrB+ to Sree Vijayalakshmi Rice Industries (SVRI). The assigned rating is constrained by the modest scale of operations coupled with thin profitability levels and high working capital requirements, which is inherent to the nature of the industry. The rating factors in the intensely competitive nature of the rice milling industry with presence of several small and large scale players which puts further pressure on the profitability. Further, the rating is constrained by the susceptibility of operations to agro-climatic risks which may impact the availability of the paddy in adverse weather conditions. The rating, however, positively factors in the long track record of the promoters in rice industry, proximity of the mill to major rice growing area which results in easy availability of paddy and stable demand outlook with rice being an important part of the staple Indian diet. The rating also takes comfort from the healthy growth in revenues witnessed over past four years with sustained margins and absence of scheduled debt repayment obligations. Sree Vijayalakshmi Rice Industries (SVRI) started operations in the year 1982 as a partnership firm. The firm is engaged in the milling of paddy for producing raw and steamed rice. The firm is promoted by Mr. A. Venkatraj and Mr. A. Saibaba who have significant experience in the rice milling industry. The rice mill is located at Raichur, Karnataka. The installed capacity of the plant is 5tph (tons per hour). Recent results In FY14, the company reported a net profit (PAT) of INR0.40 crore on an operating income (OI) of INR26.50 crore as against a PAT of INR0.39 crore on an OI of INR23.91crore in FY13. SUMER SONS: CRISIL Reaffirms 'B-' Rating on INR165MM Cash Loan -------------------------------------------------------------- CRISIL's ratings on the bank facilities of Sumer Sons Private Limited (SSPL) reflects its modest financial risk profile, marked by high total outside liabilities to tangible net worth (TOLTNW) and weak interest coverage ratio, and exposure to risks related to limited value-addition in operations, and volatility in steel prices. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 30 CRISIL A4 (Reaffirmed) Cash Credit 165 CRISIL B-/Stable (Reaffirmed) Proposed Long Term Bank Loan Facility 5 CRISIL B-/Stable (Reaffirmed) These rating weaknesses are partially offset by the benefits that SSPL derives from its established relationship with its major supplier, Rastriya Ispat Nigam Ltd, and its diversified customer base. Outlook: Stable CRISIL believes that SSPL's financial risk profile will remain weak over the medium term owing to incremental working capital requirement and planned debt-funded capex. However, SSPL will continue to be benefit from its diversified product offering and established relationships with suppliers and customers. The outlook may be revised to 'Positive' in case of significant improvement in net worth most likely through equity infusion or significant increase in scale of operations coupled with improvement in profitability levels leading to larger than expected cash accruals and thereby healthy liquidity. Conversely, the outlook may be revised to 'Negative' if SSPL's profitability or working capital management deteriorates significantly impacting its liquidity. SSPL was established in 1995-96 as a partnership firm by Mr. Rajeev Jain and family. In 2002, it has been converted into a private limited company. SSPL's core activity involves trading in wide range of steel steel long products such as thermo- mechanically treated bars, round bars; structural steel like angles, beams, and channels having applications in construction and infrastructure sector. It also trades in sponge iron and pig iron and generates less than 5 per cent of its revenues by providing services as a consignment agent for Jindal Steel Power Ltd and Rashtriya Ispat Nigam Limited (rated 'CRISIL AA-/Stable'). SUNHILL HOMES: CRISIL Assigns 'B' Rating to INR1.75BB Term Loan --------------------------------------------------------------- CRISIL has assigned its 'CRISIL B/Stable' rating to the bank facilities of Sunhill Homes Pvt Ltd (Sunhill). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Term Loan 1,750 CRISIL B/Stable The rating reflects the promoters' extensive experience in the real estate industry. These rating strengths are partially offset by Sunhill's exposure to execution and offtake risks, and its susceptibility to risks and cyclicality inherent in India's real estate sector. Outlook: Stable CRISIL believes that Sunhill will continue to benefit over the medium term from its promoters' extensive experience in the real estate sector. The outlook may be revised to 'Positive' in case of significant improvement in Sunhill's credit risk profile, backed by timely funding support from promoters and bank, and timely completion and high saleability of its ongoing project, leading to healthy and sustainable cash accruals. The outlook may be revised to 'Negative' if there are time and cost overruns in ongoing projects or if Sunhill's liquidity is significantly constrained by delays in receiving funding for the projects, thereby weakening its debt-servicing ability. Sunhill was incorporated in 2012 by New Delhi-based Mr. Ajay Khetarpal and Mr. Pardeep Jain. Sunhill is a residential real estate developer in Gurgaon (Haryana). Sunhill has a development agreement with HS Realty Pvt Ltd for setting up 804-flats group housing project in Sector 67, Gurgaon. Mr. Ajay Khetarpal and Mr. Pardeep Jain are the key promoters and are also the directors in the company. TRANS FAB: CRISIL Reaffirms B+ Rating on INR85MM Cash Credit ------------------------------------------------------------ CRISIL's ratings on the bank facilities of Trans Fab Power India Private Limited (TPIPL) continue to reflect its below-average financial risk profile, marked by small net worth, high gearing, and below-average debt protection metrics. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 62.5 CRISIL A4 (Reaffirmed) Cash Credit 85 CRISIL B+/Stable (Reaffirmed) Letter of Credit 12.5 CRISIL A4 (Reaffirmed) The ratings also factor in the company's modest scale of operations in the fragmented transformer manufacturing industry, and large working capital requirements. These rating weaknesses are partially offset by the extensive industry experience and funding support of the promoters, and TPIPL's moderate order book and healthy customer relationships. Outlook: Stable CRISIL believes that TPIPL will continue to benefit over the medium term from its promoters' extensive experience in the electrical transformer industry and their funding support. The outlook may be revised to 'Positive' if significant improvement in scale of operations and profitability results in stronger cash accruals for TPIPL; or if efficient working capital management and continued funding support from the promoters strengthen its financial risk profile. Conversely, the outlook may be revised to 'Negative' if low cash accruals, large working capital requirements, or any sizeable capital expenditure weakens the company's financial risk profile, particularly liquidity. Incorporated in 2006, TPIPL manufactures distribution and power transformers ranging from 25 kilovolt amperes to 25 megavolt amperes. Its manufacturing facilities are in Pirangut, near Pune (Maharashtra). TPIPL mainly caters to engineering, procurement, and construction (EPC) players in the power sector and to other industrial customers. The company is promoted by Mr. R B Shinde, who has nearly two decades of experience in the electrical transformers industry. UNIBIOS LABORATORIES: ICRA Suspends 'D' Rating on INR36cr Loan -------------------------------------------------------------- ICRA has suspended the [ICRA]D rating assigned to the INR1.36 crore term loans, INR36.00 crore, long-term, fund based facilities and INR6.50 crore, short-term, non-fund based facilities of Unibios Laboratories Limited. The suspension follows ICRA's inability to carry out a rating surveillance in the absence of the requisite information from the company. VIDYA POLYMER: ICRA Reaffirms 'B+' Rating on INR4.50cr Cash Loan ---------------------------------------------------------------- ICRA has reaffirmed its [ICRA]B+ rating on the INR4.50 crore cash credit limit and INR3.50 crore term loan of Vidya Polymer Private Limited. ICRA has also reaffirmed its [ICRA]A4 rating on the INR1.50 crore non-fund based limits of VPPL. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Cash Credit Limit 4.50 [ICRA]B+; reaffirmed Term Loan 3.50 [ICRA]B+; reaffirmed Non Fund Based Limits 1.50 [ICRA]A4; reaffirmed ICRA's ratings continue to take into account VPPL's small scale of operations, its low profitability and modest financial profile as reflected in its weak coverage indicators. The liquidity position of the company remains stretched as reflected in frequent overdrawals of fund based limits in the last 12 months. The ratings also factor in the intensely competitive nature of the packaging industry and the vulnerability of the company's profitability to adverse fluctuations in raw material prices. Nevertheless, the ratings derive comfort from the extensive experience of the promoters in the packaging business, and its established relationships with key customers. Going forward, the ability of the company to increase its scale of operations in a profitable manner while attaining an optimal working capital intensity will be the key rating sensitivities. VVPL, incorporated in 2006, manufactures packaging materials, mainly for the food and pan masala industries. The manufacturing facility of the company is located in Noida, Uttar Pradesh. Recent Results The company reported a net profit of INR0.10 crore on an operating income of INR46.20 crore in FY14, as against a net loss of INR0.03 crore on an operating income of INR18.14 crore in the previous year. The company, on a provisional basis, reported revenues of INR53.61 crore in FY15. VIJAYATEJ HOSPITALITY: CRISIL Ups Rating on INR62MM Loan to B+ -------------------------------------------------------------- CRISIL' has upgraded its rating on the long-term bank facilities of Vijayatej Hospitality Pvt Ltd (VHPL) to CRISIL B+/Stable from CRISIL B/Stable. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Proposed Long Term 21.1 CRISIL B+/Stable (Upgraded Bank Loan Facility from 'CRISIL B/Stable') Term Loan 62.0 CRISIL B+/Stable (Upgraded from 'CRISIL B/Stable') The rating upgrade factors in the improved accruals generated by VHPL on an increased revenue base. In 2014-15 (refers to financial year, April 1 to March 31), VHPL's is estimated to register operating income of over INR63 million up from INR49 million in 2013-14. This has facilitated better absorption of fixed costs, and therefore, improvement in operating margin to over 35 per cent. Consequently the accruals of close to INR15 million in 2014- 15 from INR1.6 million in the previous year. Ramp-up in scale of operations and the promoters' continued support in the form of unsecured loans are expected to further strengthen the liquidity over the medium term. The rating continues to reflect VHPL's modest scale of operations and subdued financial risk profile marked by modest net worth and weak debt protection metrics. These rating weaknesses are partially offset by the promoters' extensive business experience and continued fund support. Outlook: Stable CRISIL believes that VHPL will benefit from the promoters' extensive business experience and qualified management team. The outlook may be revised to 'Positive' if ramp-up in scale of operations and healthy demand for its services translate into stronger cash accruals for VHPL. Conversely, the outlook may be revised to 'Negative' in case of dip in profitability or absence of timely fund support from promoters. VHPL was incorporated in 2010 by Mr. Prakash Jha and his family. The company is in the hospitality business and operates a hotel and banquet hall 'Clarks Inn' at P&M Mall in Patna (Bihar). The hotel has around 30 rooms and started operations in January 2013. The company's business operations are managed by its CEO, Mr. Sunil Agarwal. VHPL is estimated to report net loss of INR3.7 million on sales of INR63 million in 2014-15 against net loss of INR13 million on net sales of INR45 million for 2013-14. YOGIRAJ SPINNING: ICRA Suspends B+ Rating on INR44.40cr Loan ------------------------------------------------------------ ICRA has suspended the [ICRA]B+ rating assigned to the INR44.40 crore limits of Yogiraj Spinning Private Limited. The suspension follows ICRA's inability to carry out a rating surveillance in the absence of the requisite information from the company. Incorporated in September 2012, Yogiraj Spinning Pvt. Ltd. (YSPL) is setting up a plant in Rajkot, Gujarat, to engage in ginning and pressing raw cotton and spinning of cotton yarn. The plant has a ginning unit with 24 ginning machines with an input capacity of 16,896 MTPA and a spinning unit having 17,280 spindles with an input capacity of processing 4,594 MT of ginned cotton to produce combed and carded yarn. The company is promoted and managed by the members of the Chudasama family, who have extensive experience in the cotton industry through associate concerns like Shree Gangeshwar Enterprise, Yogiraj Ginning & Oil Industries and Yogikrupa Trading Co. ================= I N D O N E S I A ================= STAR ENERGY: Fitch Affirms 'B+' Long-Term Issuer Default Rating --------------------------------------------------------------- Fitch Ratings has affirmed Indonesia-based Star Energy Geothermal (Wayang Windu) Limited's (SEG) Long-Term Issuer Default Rating (IDR) at 'B+'. The Outlook is Stable. At the same time, the agency has affirmed its USD350m of senior secured notes at 'B+' with a Recovery Rating of 'RR4'. KEY RATING DRIVERS Single-Site Risk: SEG's ratings reflect the geological risks present in operating in a seismically active area and the risk of operating at only one site. The single-site risk was evident when one of its pipelines was damaged following a landslide on 5 May 2015. The ratings of the company are, however, not impacted given the one-off and short-lived nature of the damage caused by the incident. The damage halted operations of its two power plants, which SEG expects to remain shut for up to four weeks. SEG said its power plants were not damaged by the landslide. Fitch believes SEG's liquidity is robust enough to support the loss of cash generation during the outage; the company had cash balances of USD75m at end- 2014, which should be adequate to cover its operational expenses and finance costs until operations resume. Insurance Mitigates Risk: SEG's insurance policies cover most plant costs, and we expect SEG's insurance to cover the costs of repairs to the damaged pipeline. Although SEG's insurance also includes business interruption coverage of USD75m over two years, it would only apply if operations are interrupted for more than 45 days. High Earnings Visibility: SEG's energy sales are based on an energy sales contract expiring in 2039 with the state power utility, PT Perusahaan Listrik Negara (Persero) (PLN; BBB- /Stable), which provides for tariff adjustments as exchange rates and inflation change. The sales contract requires PLN to offtake up to 400MW (current capacity is 227MW). Stable Operations: SEG has operated at an average net capacity factor of broadly over 95% - above the industry average - since it started operations in 2000. Its geothermal resources, which were independently verified, are able to support 287MW of power generation (its existing capacity is 227MW) up to 2039. That said, steam supply was on average less than the optimal amount needed - 450 kilogrammes per second (kg/s) - throughout 2014, which resulted in a slightly lower capacity factor of 95%. SEG's capacity factor averaged about 98% from 2009 to 2013. The company would need to continue to invest in new steam wells to compensate for the decline. Uncertain Expansion: Currently there are uncertainties associated with SEG's potential expansion. Capex in relation to any significant capacity additions could be substantial in relation to SEG's balance sheet. SEG's geothermal resources support the addition of new capacity, and the company continues to assess the viability of more additions in light of both negotiations to raise tariffs with PLN and subject to results of tests of the permeability of its sub-surface rock. Adequate Financial Profile: Fitch expects SEG's EBITDA to decline to about USD70m in 2015 from USD87m in 2014 due to the damage to its pipeline, and a two-week scheduled shutdown for maintenance, which happens once in three years. Fitch expects SEG to generate EBITDA of about USD80m-85m a year after 2015. Its recurring capex can be comfortably covered by operating cash flows, and SEG said that it would not pay out any substantial dividends in the medium term, which should help it gradually deleverage over the next few years. SEG's internal cash flows and cash accumulation will be adequate to meet its bond maturities of USD30m to USD40m a year between 2017 and 2019. Short-Term Rise in Leverage: SEG's funds from operations (FFO)- adjusted net leverage in 2015 will temporarily increase above 5x, the level at which negative rating action may be considered. However Fitch expects SEG to reduce the leverage ratio below 5x by 2016 and continue to deleverage due to positive FCF generation, provided it has no large capex for a new power plant. Should SEG go ahead with an expansion of its capacity, its credit metrics will weaken; however, we anticipate the company to be able to improve its credit metrics within a reasonable period to levels appropriate for its 'B+' ratings. However, negative rating pressure can arise if the company has to spend a substantial amount of capex on drilling new wells to sustain its current level of production and cash generation from existing units. KEY ASSUMPTIONS Fitch's key assumptions within our rating case for the issuer include: -- A 10% decline in annual power generation to 1,660GwH in 2015 from 1,847GwH in 2014, owing to a four-week plant shutdown due to the landslide and two weeks of scheduled maintenance -- Generation recovers to over 1,800GWh in 2016 and 2017 -- Capex of USD40m in 2015, and about USD30m a year thereafter, most of which would be incurred for drilling new steam wells to maintain production -- No investments in new capacity additions RATING SENSITIVITIES Negative: Future developments that may, individually or collectively, lead to negative rating action include: -- FFO-adjusted net leverage exceeding 5.0x (3.9x in 2014) and FFO interest coverage falling below 2.0x (3.11x at 2014), both on a sustained basis. -- A continued decline in SEG's capacity factor -- Material increase in capex to maintain production, leading to weaker cash generation from existing operations. Positive: Positive rating action is unlikely due to SEG's small scale and single-site operation. ========= J A P A N ========= SHARP CORP: Face Dire Prospects of Turnaround --------------------------------------------- The Japan Times reports that several electronics makers have regained profitability largely thanks to restructuring measures and the weakening of the yen, but Sharp Corp. and Toshiba Corp. are unlikely to catch up with their domestic rivals soon. According to the report, struggling Sharp's latest rehabilitation plan got a cold reception from the financial markets, while Toshiba faces the risk of being delisted in light of accounting irregularities that have emerged in connection with past infrastructure projects. The Japan Times relates that the stock prices of the two well- established enterprises have come under selling pressure recently, with fears growing that they will lose global competitiveness and face a tougher predicament down the road. "Sharp has yet to stand at the starting line to grow again, although some Japanese electronics makers have shown signs of a full-fledged recovery," the report quotes Kentaro Harada, a credit analyst at SMBC Nikko Securities Inc. in Tokyo, as saying. An industry source also said that if Toshiba is found to have cooked its books, the latest problem could "undermine credibility" in the company and "deal a crushing blow" to its corporate performance, the report relays. Among Japan's top electronics makers, Hitachi Ltd. and Mitsubishi Electric Corp. have posted record group operating profits, while Panasonic Corp. enjoyed a strong earnings improvement in fiscal 2014 ended March 31, thanks to the yen's plunge under "Abenomics," the Japan Times notes. Sony Corp. logged a group net loss for the same year but it expects to return to the black for the first time in three years in the business year ending in March 2016, sparking hopes for the icon's revival, according to the report. But Osaka-based Sharp said it returned to the red in fiscal 2014 with a group net loss of JPY222.35 billion ($1.8 billion), erasing the JPY11.56 billion profit logged the previous year, the report notes. Vowing to repair its precarious financial situation triggered by poor showings from its core liquid crystal display and solar panel businesses, Sharp on May 14 unveiled a new business plan that entails selling its head office in Osaka and cutting around 3,500 jobs in Japan, according to the report. It will also receive a JPY200 billion bailout from its two main creditor banks - Mizuho Bank and Bank of Tokyo-Mitsubishi UFJ - and JPY25 billion from a corporate reconstruction fund the two banks have invested in, the Japan Times says. By sticking to the plan for three years, Sharp aims to move into the black in fiscal 2016 and expand net profit in fiscal 2017 ending in March 2018, President Kozo Takahashi has said, the report relates. But the strategy is not aggressive enough to turn around Sharp's stagnant business, as it is still uncertain in which fields it can profit, many experts said, the report adds. Tokyo-based Toshiba meanwhile said it may have to downgrade operating profit by at least JPY50 billion for the three years through March 2014 over improper accounting in its infrastructure business, the Japan Times reports. The report relates that Toshiba has said in a statement that the major causes of the irregularities were its corporate culture, which placed high priority on budgetary achievement, and the "imperfect function of internal controls for accounting reports." An equity analyst at a foreign brokerage said many analysts "had already realized" that some of Toshiba's businesses were "obviously" being tasked with high profit goals, the report relays. The Japan Times reports that Toshiba has to report its annual earnings by the end of June to abide by Tokyo Stock Exchange rules. Failure to do so could place it on a "watch list" for delisting. The possibility cannot be ruled out that Toshiba will really be delisted if serious accounting frauds are spotted, the report adds. About Sharp Corp. Based in Osaka, Japan, Sharp Corporation (TYO:6753) -- http://sharp-world.com/-- manufactures and sells electronic telecommunication devices, electronic machines and components. As reported in Troubled Company Reporter-Asia Pacific on May 18, 2015, Standard & Poor's Ratings Services said that it has lowered by two notches to 'CCC-' its long-term corporate credit rating on Japan-based electronics company Sharp Corp. S&P kept the rating on CreditWatch with negative implications. At the same time, S&P's 'CCC+' long-term debt rating and its 'C' short-term corporate credit and commercial paper program ratings remain on CreditWatch with negative implications. In addition, S&P lowered its long-term corporate credit rating on Sharp's overseas subsidiary Sharp International Finance (U.K.) PLC to 'CCC-' and kept it on CreditWatch with negative implications. Our 'C' short- term corporate credit and commercial paper program ratings on Sharp International Finance remain on CreditWatch with negative implications. TOSHIBA CORP: Expands Accounting Probe to TV, Chip, Comp. Units --------------------------------------------------------------- Japan Today reports that Toshiba Corp said it is expanding an accounting probe to its television, memory chip, and computer divisions, after earlier warning the investigation would take a toll on its balance sheet. Japan Today relates that the huge conglomerate, which makes everything from batteries to nuclear reactors, said earlier it was revoking its earnings forecast for the past fiscal year and would not pay a dividend. Initially, Toshiba said it was focusing on suspect accounting linked to unspecified infrastructure projects and that the problems would likely force it to cut its reported operating profit over the last few years by JPY50 billion, the report relates. According to the report, the Japanese firm said it underestimated the cost of "certain" projects, along with other accounting irregularities. But on May 22, the company said that some other businesses would also need to go under the microscope, although the extent of the problems -- and who is responsible for them -- remains unclear, Japan Today says. The report relates that Toshiba said it has hired an outside team of investigators. "The company has decided that these concerns also require thorough investigation by the independent investigation committee," the report quotes Toshiba as saying in a statement, referring to its TV, semiconductor and computer businesses. Toshiba earlier this month cancelled its projection for a JPY120 billion net profit on sales of JPY6.7 trillion in its latest fiscal year to March. It has not given a date for the release of its revised results, Japan Today adds. About Toshiba Corp. Toshiba Corporation (TYO:6502) -- http://www.toshiba.co.jp/-- is a Japan-based manufacturer involved in five business segments. The Digital Products segment offers cellular phones, hard disc devices, optical disc devices, liquid crystal televisions, camera systems, digital versatile disc (DVD) players and recorders, personal computers (PCs) and business phones, among others. The Electronic Device segment provides general logic integrated circuits (ICs), optical semiconductors, power devices, large-scale integrated (LSI) circuits for image information systems and liquid crystal displays (LCDs), among others. The Social Infrastructure segment offers various generators, power distribution systems, water and sewer systems, transportation systems and station automation systems, among others. The Home Appliance segment offers refrigerators, drying machines, washing machines, cooking utensils, cleaners and lighting equipment. The Others segment leases and sells real estate. As reported in the Troubled Company Reporter-Asia Pacific on June 25, 2014, Moody's Japan K.K. assigned a rating of Ba1 to the JPY180 billion in subordinated loans issued by Toshiba Corporation. At the same time, Moody's has affirmed all of Toshiba's ratings. Senior Unsecured Baa2 Senior Unsecured Shelf (P)Baa2 Subordinate Ba1 Commercial Paper P-2 The ratings outlook is stable. ==================== N E W Z E A L A N D ==================== TRUE GREEN: Placed In Liquidation; Couple Left Out of Pocket ------------------------------------------------------------ Martin Van Beynen at Stuff.co.nz reports that when their builder went bust, a Christchurch couple thought they could at least pick up the pieces and start again. That is when they found out they had also lost their windows and doors, for which they had paid about NZ$50,000. According to the report, Denise and Neil Wiggins last year entered a contract with True Green Homes Ltd to build a low-energy home on their block in Fernside, near Rangiora. Completion was expected in April, the report says. The report says the Wiggins wanted to create an old-style farm house that had superior build standards. "It was our dream home. We wanted to bring up our daughter in a farming area," the report Denise Wiggins as saying. Problems with the house started early, with the builders not preparing the foundations according to consented plans. After the concrete pad was down nothing much seemed to happen, she said, the report relates. "Then I looked on the companies website and saw True Green was in liquidation," Mrs. Wiggins, as cited by Stuff.co.nz, said. Stuff.co.nz says the Wiggins met with the liquidators about a week later to find their windows and doors had been sold. True Green Homes Ltd specialised in low-energy, pre-fabricated homes built to "German standards" and build panels for the houses at a factory in Amberley. True Green was placed in voluntary liquidation by the shareholders on April 15. Errol Bailey and Brenton Hunt, of the Taurus Group, were appointed liquidators. ===================== P H I L I P P I N E S ===================== PHILIPPINE NATIONAL: Moody's Ups Deposit Ratings From Ba2 --------------------------------------------------------- Moody's Investors Service upgraded the long-term and short-term deposit ratings of Philippine National Bank (PNB) and Rizal Commercial Banking Corporation (RCBC) to Baa3/P-3 from Ba2/NP. Moody's also affirmed the Baa2/P-2 long-term and short-term deposit ratings of Land Bank of the Philippines (LBP). In addition, Moody's has upgraded the baseline credit assessment (BCA) and Adjusted BCA of PNB and RCBC to ba1 from ba3 respectively. LBP's BCA was upgraded to ba2 from ba3. Moody's upgraded RCBC's senior unsecured debt, senior unsecured euro medium term notes (MTN) program, non-cumulative preferred stock and other short-term ratings to Baa3, (P)Baa3, B1(hyb) and (P)P-3 from Ba2, (P)Ba2, B3(hyb) and (P)NP respectively. At the same time, Moody's also affirmed the following ratings of Metropolitan Bank & Trust Company (MBT): baa2 Baseline Credit Assessment (BCA) and Adjusted BCA, Baa2/P-2 long-term and short- term deposit ratings, Baa3 long-term local currency subordinated debt rating, and Ba2 (hyb) foreign currency preferred stock rating. Furthermore, Moody's has assigned a Counterparty Risk Assessment (CR Assessment) to all rated Philippine banks as follows: (1) Bank of the Philippine Islands (BPI) -- Baa1(cr)/P-2(cr), (2) BDO UNIBANK, INC (BDO) -- Baa1(cr)/P-2(cr), (3) LBP -- Baa2(cr)/P- 2(cr), (4) MBT -- Baa1(cr)/P-2(cr), (5) PNB -- Baa2(cr)/P-2(cr), (6) RCBC -- Baa2(cr)/P-2(cr), (7) United Coconut Planters Bank (UCPB) -- B1(cr)/NP(cr). These actions follows the conclusion of the rating agency's reviews initiated on 17 March, 2015 that was prompted by changes arising from the implementation of Moody's new methodology for rating banks globally (see "Banks", published on 16 March 2015). In the case of RCBC, the action also concludes the review initiated on 18 December 2014 that was prompted by the company's announcement on 17 December that it had entered into a definitive agreement with Cathay Life Insurance Co., Ltd (Cathay Life, Baa2 positive), whereby Cathay Life will acquire an approximate 20% stake in RCBC. Moody's has withdrawn the outlooks on all junior instrument ratings for its own business reasons. Please refer to Moody's Investors Service's Policy for Withdrawal of Credit Ratings. Outlooks, which provide an opinion on the likely rating direction over the medium term, are now assigned only to long-term deposit and senior unsecured debt ratings. The outlook on all the long- term deposit and senior unsecured debt ratings of these banks is stable. UPGRADE OF LONG-TERM RATINGS AND BCA/ADJUSTED BCA OF PNB AND RCBC: The upgrade of the long-term and short-term ratings of PNB and RCBC reflects the consistent improvement in the credit profiles of these banks, backed by favorable operating conditions in the Philippines. The upgrade of the bank's BCAs and adjusted BCA to ba1 from ba3 reflects improvements in their asset quality profiles during a period in which new non-performing loans (NPL) formation has remained low in the Philippines. In addition, the bank's capital buffers have improved, following PNB's PHP 11.6 billion in new equity raising in early 2014 and Cathay Life's PHP 7.95 billion investment in new equity of RCBC, which was completed in April 2015. Although PNB's asset quality remains weaker than the rated Philippine banks average, its high levels of capitalization and loan-loss coverage provide sufficient loss absorption capacity at its current rating levels to withstand systemic stresses over the next 12-18 months. UPGRADE OF BCA AND ADJUSTED BCA of LBP: LBP's BCA, its stand-alone credit assessment, was upgraded to ba2 from ba3 reflecting the bank's improved credit fundamentals. Over the past three years, the bank's asset quality, profitability, and cost efficiency improved on the back of robust domestic operating conditions. The bank continues to maintain a strong funding profile that is supported by its sizable distribution network and status as the primary depository institution for the government and its agencies. At the same time, the bank's ba2 BCA also takes into account its high credit concentrations, weakening capital position from credit growth and poorer financial transparency relative to other rated banks in the Philippines. The bank's adjusted BCA was upgraded to ba2 from ba3, following the upgrade of its BCA. AFFIRMATION OF RATINGS OF MBT: The affirmation of MBT's BCA and Adjusted BCA of baa2 reflects its strong domestic franchise, robust capital and liquidity profiles and improving asset quality, which reflect discipline and prudence in business growth. MBT's Baa2 deposit rating is positioned at the same level as the sovereign rating of Baa2 to reflect the high correlation between banking and sovereign credit risk in the Philippines. ASSIGNING OF COUNTERPARTY RISK ASSESSMENTS: The CR Assessment is an opinion of the counterparty risk related to a bank's covered bonds, contractual performance obligations (servicing), derivatives (e.g., swaps), letters of credit, guarantees and liquidity facilities. CR assessments reflect Moody's opinion of how counterparty obligations are likely to be treated if a bank fails, and are distinct from debt and deposit ratings in that they (1) consider only the probability of default, rather than the expected loss; and (2) apply to counterparty obligations and contractual commitments rather than to debt or deposit instruments. In most cases, the starting point for the CR Assessment -- which is an assessment of the bank's ability to avoid defaulting on its operating obligations -- is one notch above the bank's adjusted BCA, to which Moody's then adds the same notches of support uplift as applied to deposit and senior unsecured debt ratings. As a result, the CR Assessment for most rated banks in the Philippines is 1 notch higher than their deposit ratings, reflecting Moody's view that authorities are likely to honor the operating obligations the CR Assessment refers to in order to preserve a bank's critical functions and reduce potential for contagion. However, in the case of LBP, given its very high deposit rating, which is aligned with the Philippine government bond rating at Baa2, Moody's has also assigned a CR Assessment of Baa2(cr). WHAT COULD CHANGE THE RATINGS UP: PNB An upward revision of PNB's BCA would likely lead to an upgrade of its ratings, assuming that its credit metrics remain robust. The following factors could result in an upward revision of the BCA: (1) proven ability to maintain its nonperforming assets -- NPLs and foreclosed assets; and/or; (2) evidence that it can reduce its operating expenses and improve its risk-adjusted profitability and/or; (3) a high level of loss-absorption capacity. RCBC An upward revision of RCBC's BCA would likely lead to an upgrade of its ratings, assuming that its credit metrics remain robust. The following factors could result in an upward revision of the BCA: (1) proven ability to contain or reduce nonperforming assets -- NPLs and foreclosed assets; (2) an ability to maintain its capitalization level in line with the peers; and/or (3) evidence that it can continue to reduce credit costs and improve its risk- adjusted profitability to support capital generation. RCBC's preferred stock rating is linked to its BCA, and could be upgraded if its BCA is raised. LBP LBP's deposit rating of Baa2 is at the same level as the Philippines' sovereign rating. It is unlikely that LBP will be rated above the sovereign as Moody's view the correlation of risk between the bank and the sovereign to be high. The stable outlook on the sovereign's rating suggests that the upside and downside risks are balanced. Nonetheless, an upgrade of the sovereign rating would likely lead to an upgrade of the bank's deposit ratings, assuming its credit metrics remain robust. The following factors could result in an upward revision of the BCA: (1) improvements in the timeliness and transparency of financial reporting; and/or (2) significant reductions in credit risk concentrations in individual borrowers and industry groups; and/or (3) a significant diversification of its funding sources, reducing its reliance on government-related funding and exposure to policy risks. MBT MBT's deposit rating of Baa2 is at the same level as the Philippines' sovereign rating. It is unlikely for MBT to be rated above the sovereign as Moody's view the correlation of risk between the banks and the sovereign to be high. The stable outlook on the sovereign's rating suggests that the upside and downside risks are balanced. Nonetheless, an upgrade of the sovereign rating would likely lead to an upgrade of the banks' deposit ratings, assuming its credit metrics remain robust. If the sovereign is upgraded, the following factors could result in an upward revision of the bank's BCA: (1) a consistent reduction in non-performing assets (non-performing loans and foreclosed assets); (2) steady improvement in profitability levels, as reflected by improvements in core earnings and reductions in credit costs; and/or (3) higher levels of loss- absorption capacity, as reflected by steady improvements in its capitalization. MBT's subordinated debt and hybrid ratings are linked to its BCA, and could be upgraded when its BCA is upgraded. WHAT COULD CHANGE THE RATINGS DOWN: PNB The bank's BCA and consequently its ratings could be lowered if: (1) aggressive organic expansion or acquisitions result in a significant increase in its risk profile; and/or (2) its operating environment weakens significantly or underwriting practices become lax, resulting in a significant increase in nonperforming assets (NPLs and foreclosed assets); and/or (3) there is a material decline in its capital buffers. RCBC The bank's BCA and consequently its ratings could be lowered if: (1) aggressive organic expansion or acquisitions result in a significant increase in its risk profile; and/or (2) its operating environment weakens significantly or underwriting practices become lax, resulting in a significant increase in nonperforming assets (NPLs and foreclosed assets); and/or (3) there is a material decline in its capital buffers, such that its Tangible Common Equity/ Risk Weighted Assets (TCE/RWA) ratio falls below 10%. LBP The bank's BCA and consequently its ratings could be lowered if: (1) the operating environment weakens significantly or underwriting practices become loose, resulting in a significant deterioration in its asset quality; and/or (2) if non-performing loans rise without a corresponding increase in loan-loss provisions; and/or (3) its capital buffer declines materially, as a result of balance sheet or credit losses. MBT The bank's BCA could be lowered if: (1) aggressive organic expansion or acquisitions result in a significant increase in their risk profiles; and/or (2) the operating environment weakens significantly, or underwriting practices loosen, resulting in a steady increase in non-performing assets which erodes loss- absorbing buffers; and/or (3) there is a material decline in the banks' capital buffers, as a result of strong balance sheet growth or credit losses. Taking into account the announcement, the bank's ratings are as follows: BPI -- BCA and Adjusted BCA remains unchanged at baa2; -- Local and foreign currency deposits rating remains unchanged at Baa2/P-2; stable outlook on long-term rating; -- CR Assessment of Baa1(cr)/P-2(cr). BDO -- BCA and Adjusted BCA remains unchanged at baa2; -- Local and foreign currency deposit rating remains unchanged at Baa2/P-2; stable outlook on long-term rating; -- Foreign currency senior unsecured rating remains unchanged at Baa2; stable outlook on long-term rating; -- CR Assessment of Baa1(cr)/P-2(cr). LBP -- BCA and Adjusted BCA upgraded to ba2 from ba3; -- Local and foreign currency deposit ratings affirmed at Baa2/P-2; stable outlook on long-term rating; -- CR Assessment of Baa2(cr)/P-2(cr). MBT -- BCA and Adjusted BCA affirmed at baa2 -- Local and foreign currency deposit rating affirmed at Baa2/P-2; stable outlook on long-term rating; -- Local currency subordinated debt affirmed at Baa3; -- Foreign currency pref. stock non-cumulative rating affirmed at Ba2 (hyb); -- CR Assessment of Baa1(cr)/P-2(cr). PNB -- BCA and Adjusted BCA upgraded to ba1 from ba3 -- Local and foreign currency deposit ratings upgraded to Baa3/P-3 from Ba2/NP; outlook on long-term rating changed to stable from ratings under review; -- CR Assessment of Baa2(cr)/P-2(cr). RCBC -- BCA and Adjusted BCA upgraded to ba1 from ba3; -- Foreign currency deposits rating upgraded to Baa3/P-3 from Ba2/NP; outlook on long-term rating changed to stable from ratings under review; -- Foreign currency MTN program rating upgraded to (P)Baa3 from (P)Ba2; -- Foreign currency senior unsecured debt rating upgraded to Baa3 from Ba2; outlook on long-term rating changed to stable from ratings under review; -- Foreign currency preferred stock rating upgraded to B1(hyb) from B3(hyb); -- Foreign currency other short term rating upgraded to (P)P-3 from (P)NP; -- CR Assessment of Baa2(cr)/P-2(cr). UCPB -- BCA and Adjusted BCA remains unchanged at caa1; -- Foreign currency bank deposits remains unchanged at B2/NP; stable outlook on long-term rating; -- Foreign currency deposit note/CD program remains unchanged at (P)B2/(P)NP; -- CR Assessment of B1(cr)/NP(cr). The principal methodology used in these ratings was Banks published in March 2015. Headquartered in Manila, BPI reported total assets of PHP1,450 billion as of 31 December 2014. Headquartered in Manila, BDO reported total assets of PHP1,864 billion as of 31 December 2014. Headquartered in Manila, LBP reported total assets of PHP849 billion as of 31 December 2013. Headquartered in Manila, MBT reported total assets of PHP1,616 billion as of 30 March 2015. Headquartered in Manila, PNB reported total assets of PHP625 billion as of 31 December 2014. Headquartered in Manila, RCBC reported total assets of PHP458 billion as of 31 December 2014. Headquartered in Manila, UCPB reported total assets of PHP277 billion as of 31 December 2013. ==================== S O U T H K O R E A ==================== HYUNDAI HEAVY: Restructures Financial Units as Part of Revamp ------------------------------------------------------------- The Korea Herald reports that Hyundai Heavy Industries is streamlining its financial units as part of an ongoing group-wide restructuring to ride out financial difficulties. The Korea Herald relates that the shipbuilder said May 22 that it would realign the businesses of Hyundai Finance Corp., Hyundai Venture Investment and Hyundai Futures as part of its large-scale restructuring efforts to streamline business operations and combat the group's financial crisis. According to the report, the company said Hyundai Finance chairman Chung Mong-il, the eighth son of the late Hyundai Group founder Chung Ju-yung, also stepped down from his post to take responsibility for the firms' continued losses. While he is also resigning from his position at Hyundai Venture, Hyundai Venture CEO Kim Jae-geun is also stepping down, the report notes. The report relates that the shipbuilder said Hyundai Heavy executives would fill in for the exiting executives until the positions are filled. Hyundai recorded losses for the sixth consecutive quarter earlier this year, posting an operating loss of KRW189 billion and a net loss of KRW91 billion in the January-April period, the report adds. Hyundai Heavy Industries builds ships for commercial, and military purposes. The Company manufactures oil tankers, cargo and passenger vessels, and warships. Hyundai Heavy Industries also produces heavy industrial machineries, wind turbines, solar panels, electrical components for engines and power trains, and industrial vehicles, such as cranes and bulldozers. POSCO PLANTEC: Applies For Debt-Restructuring Program ----------------------------------------------------- Yonhap News Agency reports that POSCO Plantec Co., a unit of South Korea's top steelmaker POSCO, said on May 26 it decided to apply for a debt-restructuring program in an effort to tide over a cash crunch. POSCO Plantec said in a regulatory filing that the decision to request the workout program to its creditors, led by the Korea Development Bank, was made during a board meeting, Yonhap relates. By law, creditors who hold more than 75 percent of debt owed by POSCO Plantec are required to give the okay to the workout plan, according to the report. Yonhap relates that the plant parts maker said that its overdue loan payments totaled KRW89.2 billion (US$81.08 million) as of May 26. According to the report, POSCO Plantec has been struggling in the red for the last two years amid an overall slump in the shipbuilding and other maritime industries. Last year, the company posted an operating loss of KRW189.1 billion, the report relays. POSCO and its construction arm, POSCO Engineering and Construction Co., had injected KRW290 billion late last year into the cash- strapped affiliate via paid-in capital contributions, the report notes. Yonhap notes that the latest workout request marks the first time for a POSCO affiliate to apply for a debt-restructuring scheme, but the conglomerate, which is currently carrying out measures to boost financial soundness, said additional funding for its ailing unit is unlikely at the moment. "Additional financial support for POSCO Plantec, which has been suggested by some, is difficult," Yonhap quotes a POSCO official as saying. "Considering the current situation in which it is unclear whether financial firms and lenders are willing to cooperate, extra funding in the short term may go against the interests of POSCO's shareholders." Posco Plantec, formerly Sungjin Geotec Co., Ltd, is a Korea-based company engaged in the manufacture of industrial equipment for petrochemical, refinery, power, steel and other industries. =============== T H A I L A N D =============== THAI AIRWAYS: Posts THB9.1 Billon in First Nine Months This Year ---------------------------------------------------------------- ThailandBusiness News reports that Thai Airways International has reported a consolidated net loss of THB9,117 million for the first nine months of this year. The loss represented a THB2,864 million increase from the same period last year, said THAI acting president ACM Siwakiat Jayema, the report relates. However, he said the third quarterly performance of this year showed THAI and its subsidiaries have recorded profits of THB1,097 million, breaking down to THB1,086 million generated by THAI, as compared with THB6,182 million net loss of the third quarter in 2013, according to the report. He attributed the loss for the past nine months to the tourism industry which is still not returning normal and tough competition in the industry, particularly from low cost airlines, fleet expansions, and opening of new routes, the report relates. As a consequence, THAI suffered a 15% drop in passengers from 16.20 million in the same period last year to 13.77 million this year. The average number of seats sold per flight slipped to 70%, down nearly 10 percentage points from one year earlier. He also said the average number of seats sold per flight in the third quarter also slipped to 71.1% from 75.3% last year. Besides loss from asset depreciation also rose 66.2% or THB2,086 million higher than last year to THB5,237 million, he added, ThailandBusiness News reports. Thai Airways International PCL (BAK:THAI) -- http://www.thaiairways.co.th/-- is the national carrier of Thailand. The company operates domestic, regional and intercontinental flights radiating from its home base in Bangkok to key destinations around the world and within Thailand. During the fiscal year ended September 30, 2007, the company owned a total of 90 aircrafts and provided flights to 11 destinations domestically, excluding Bangkok, and 62 destinations in 35 countries throughout the world. Through its subsidiaries, THAI provides a variety of services, including cargo and mail services, technical services, catering services, ground support equipment services and ground customer services. In addition, the company offers support services such as dispatch services, sales on board and Thai shop. Headquartered in Bangkok, THAI has a subsidiary and 10 affiliated companies. ********* Tuesday's edition of the TCR-AP delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR-AP editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Tuesday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR-AP constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR-AP editor holds some position in the issuers' public debt and equity securities about which we report. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR-AP. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com Friday's edition of the TCR-AP features a list of companies with insolvent balance sheets obtained by our editors based on the latest balance sheets publicly available a day prior to publication. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Asia Pacific is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Valerie U. Pascual, Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Julie Anne L. Toledo, and Peter A. Chapman, Editors. Copyright 2015. All rights reserved. ISSN: 1520-9482. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. TCR-AP subscription rate is US$775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter Chapman at 215-945-7000 or Nina Novak at 202-362-8552. *** End of Transmission ***