/raid1/www/Hosts/bankrupt/TCRAP_Public/150729.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, July 29, 2015, Vol. 18, No. 148
Headlines
A U S T R A L I A
ACT-SOUTHERN HIGHLANDS: First Creditors' Meeting Set For Aug. 6
ASTRA RESOURCES: Court Backs ASIC Illegal Fundraising Claims
BO-JEAN PTY: Ferrier Hodgson to Sell Assets and Operations
DYNAMIC PLATINUM: First Creditors' Meeting Set For Aug. 4
ON-LINE COMMUNICATIONS: First Creditors' Meeting Set For Aug. 5
PROVIDENT CAPITAL: ASIC Bans Former Director for 3 Years
SOTA EVENT: First Creditors' Meeting Slated For Aug. 6
VAN EYK: Investors Take Legal Action in Cayman Islands
WINEINC PTY: First Creditors' Meeting Slated For Aug. 6
C H I N A
CHINA GINSENG: Closes $1.6 Million Purchase Agreement
EHI CAR: Fitch Publishes 'BB-' Long-Term Foreign Currency IDR
EHI CAR: S&P Assigns 'BB' Corporate Credit Rating; Outlook Stable
FANTASIA HOLDINGS: Moody's Keeps B2 CFR ff. Consent Solicitation
I N D I A
ADITI RICE: ICRA Suspends 'D' Rating on INR14.05cr LT Loan
ALAMELU BALAJI: CRISIL Cuts Rating on INR124.5MM Loan to 'B'
AMGC LOGISTICS: CRISIL Assigns 'B' Rating to INR78MM Cash Loan
ARIHANTH JEWELLERS: CRISIL Assigns B+ Rating to INR100MM Loan
CHENDURAN COTSPIN: Ind-Ra Assigns 'IND BB+' LT Issuer Rating
CROSS COUNTRY: CARE Assigns B+ Rating to INR11.92cr LT Loan
DHARAM EXPORT: ICRA Suspends B+ Rating on INR4.75cr Loan
DIAMOND FOOTCARE: ICRA Ups Rating on INR40cr Cash Credit to BB-
EARTHEN TREASURES: CARE Assigns 'B' Rating to INR5cr LT Loan
HARAGOURI HIMGHAR: CARE Assigns 'B' Rating to INR9.61cr LT Loan
HARSHGEET OVERSEAS: CRISIL Assigns 'B' Rating to INR100MM Loan
HOTEL AIRPORT: ICRA Lowers Rating on INR15cr Term Loan to 'D'
JAI AMBEY: CRISIL Ups Rating on INR50MM Cash Loan to B+
JAI MAHARASHTRA: ICRA Lowers Rating on INR100cr NCD to 'D'
JAM HOTELS: ICRA Assigns 'B' Rating to INR15cr Term Loan
JAMSHEDPUR MINERALS: CRISIL Rates INR30MM Letter of Credit at B+
KAILASH ROLLING: CRISIL Raises Rating on INR45MM Cash Loan to B+
KIRTI SOLAR: CRISIL Reaffirms B+ Rating on INR60MM Cash Loan
LAGGAR INDUSTRIES: CRISIL Assigns 'B' Rating to INR140MM LT Loan
MADRAS HARD: Ind-Ra Cuts Long-Term Issuer Rating to 'IND B+'
MAHESHWAR MULTITRADE: CARE Assigns B+ Rating to INR9cr LT Loan
MANGALAM METALS: ICRA Reaffirms B- Rating on INR12cr Cash Credit
MANISH FLOUR: ICRA Suspends B+ Rating on INR12cr Cash Credit
MEGHA GRANULES: Ind-Ra Corrects Commentary Published on June 17
MOHANA COTTON: CRISIL Cuts Rating on INR150MM Cash Loan to 'B'
NARESH SINGHAL: CARE Reaffirms B+ Rating on INR2.5cr LT Loan
NAVA BHARATH: Ind-Ra Assigns IND BB+' to INR55.37MM Bank Loans
NEWTON ENGINEERING: ICRA Suspends D Rating on INR14cr Loan
NORTH EASTERN: CRISIL Reaffirms B- Rating on INR265MM Term Loan
PIONEER AGRO: CRISIL Cuts Rating on INR62.5MM Cash Loan to B-
RAJASTHAN ISPAT: ICRA Suspends B+ Rating on INR25cr Loan
SAHANA JEWELLERY: CARE Assigns B+ Rating to INR14cr LT Loan
SAI SRINIVASA: CRISIL Ups Rating on INR67MM Cash Loan to 'B'
SDR POLYMERS: CRISIL Reaffirms 'D' Rating on INR32.5MM Loan
SHREE SIDDHI: CARE Reaffirms 'B' Rating on INR10cr LT Loan
SHRINI SOFTEX: Ind-Ra Assigns 'IND BB' Long-Term Issuer Rating
SHYAM STEELS: CRISIL Lowers Rating on INR38MM Cash Loan to B-
SLC PROJECTS: CRISIL Reaffirms B+ Rating on INR180MM Cash Loan
SOMESHWAR ORGANISORS: CRISIL Rates INR230MM Term Loan at B+
SONEX TV: CRISIL Reaffirms 'B' Rating on INR110MM Cash Loan
SRI DHARMA: CRISIL Reaffirms 'B' Rating on INR37.5MM Cash Loan
T. KANAGARAJ: CRISIL Assigns 'B' Rating to INR50MM Cash Loan
TARAWADE LOGISTICS: CRISIL Reaffirms B+ Rating on INR10MM Loan
VEERANARAYANA METAL: CRISIL Reaffirms B+ Rating on INR52MM Loan
J A P A N
TOSHIBA CORP: U.S. Investors File Class Suit for Stock Losses
M A L A Y S I A
1MALAYSIA DEVELOPMENT: Despatch Clerk Held in 1MDB probe
N E W Z E A L A N D
ARENA CAPITAL: Placed Into Liquidation
CAPITAL + MERCHANT: FMA Civil Proceedings Discontinued
GREEN GARDENS: FMA Issues First Stop Order
T A I W A N
KGI BANK: Fitch Affirms 'bb+' Viability Rating
T H A I L A N D
THAI AIRWAYS: To Cut 1,401 Jobs, Suspend Flights to L.A., Rome
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A U S T R A L I A
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ACT-SOUTHERN HIGHLANDS: First Creditors' Meeting Set For Aug. 6
----------------------------------------------------------------
Stephen Hundy & Morgan Lane of Worrells Solvency & Forensic
Accountants were appointed as administrators of ACT-Southern
Highlands Motor Loss Assessing Pty Limited on July 27, 2015.
A first meeting of the creditors of the Company will be held at
Worrells Solvency & Forensic Accountants, Level 2, AMP Building
1 Hobart Place, in Canberra, on Aug. 6, 2015, at 10:30 a.m.
ASTRA RESOURCES: Court Backs ASIC Illegal Fundraising Claims
------------------------------------------------------------
The Federal Court has found that Astra Resources PLC and its
subsidiary, Astra Consolidated Nominees Pty Ltd, breached the
fundraising provisions of the Corporations Act, as part of civil
proceedings brought by Australian Securities and Investment
Commission.
In his judgment delivered on July 24, Justice White upheld ASIC's
claims that Astra Resources and Astra Nominees breached the
Corporations Act by raising funds from investors without a
prospectus or similar disclosure document, as required under the
law. His Honour was satisfied that Astra Nominees made offers of
Astra Resources shares, as alleged by ASIC, while Astra Resources
distributed share application forms to investors.
The Judge indicated that he will make declarations of
contravention against the companies, as sought by ASIC, after
further hearing from the parties about the precise terms of those
declarations.
In concluding that declarations are appropriate in this case,
Justice White said, 'They will constitute a clear finding of the
contravening conduct of the defendants and will mark the Court's
disapproval of their behaviour. It is appropriate that those
involved in making offers of shares to the public and in
distributing application forms for the offer of shares comply with
the requirements of the Act, and the making of the declarations
should reinforce that obligation'.
The matter has been listed for a directions hearing on
Sept. 14, 2015, to hear submissions about the precise terms of the
declarations against Astra Resources and Astra Nominees.
The remainder of ASIC's claims against the companies and its
former directors, Jaydeep Biswas, Barrie Meerkin and Silvana De
Cianni will be determined in the next stage of the proceeding.
ASIC launched its legal action in May 2014.
In its claim against Astra Resources and Astra Nominees, ASIC
alleges that those companies illegally raised more than
AUD6.5 million from almost 300 Australian investors between
September 2011 and September 2012.
ASIC also alleges that the former directors, Mr Biswas, Mr Meerkin
and Ms De Cianni failed to take reasonable steps to prevent the
illegal fundraising.
ASIC is seeking orders to have Astra Resources and Astra Nominees
inform affected shareholders that they may elect to have their
share purchase contracts set aside and claim a refund or damages.
ASIC is also seeking orders that the former directors be
disqualified from managing corporations.
BO-JEAN PTY: Ferrier Hodgson to Sell Assets and Operations
----------------------------------------------------------
Ryan Eagle and Morgan Kelly of Ferrier Hodgson were appointed as
Agents for the Mortgagee in Possession on July 15, 2015, over Bo-
Jean Pty Ltd's assets and undertakings by the Commonwealth Bank of
Australia trading as Bankwest, the holder of an all present and
after acquired property security interest.
"The effect of the appointment is that the Agents are now in
control of the Company's assets, undertakings and operations,"
Ferrier Hodgson said.
Bo-Jean Pty Ltd operated the following venues: Henry Kendall
Tavern; Kariong Tavern; Duttons Tavern; and The Gosford Bottle
Shop.
On July 16, 2015, the Agents sold the Kariong Tavern at auction.
The sale is due to settle in the final week of August.
On July 19, 2015, the Agents ceased trading the Henry Kendall
Tavern. The Agents have engaged Grays Online to sell the fixtures
and fittings of the Henry Kendall Tavern. You can access the
auction at the following link: http://is.gd/jhHbDd
The Agents intend to trade Duttons Tavern and the Settlers Bottle
Shop in the ordinary course while the Company's financial position
is assessed.
"At this stage, it is too early to advise creditors of the likely
outcome of the appointment," Ferrier Hodgson added.
Payment of unsecured creditors' accounts as at April 9, 2015, is
deferred.
Messrs. Kelly and Eagle of Ferrier Hodgson were appointed
Receivers and Managers to the assets and undertakings of the Bo-
Jean Pty Limited on April 9, 2015.
DYNAMIC PLATINUM: First Creditors' Meeting Set For Aug. 4
---------------------------------------------------------
Anthony Robert Cant of Romanis Cant was appointed as administrator
of Dynamic Platinum Group Pty. Ltd. on July 23, 2015.
A first meeting of the creditors of the Company will be held at
the offices of Romanis Cant, 106 Hardware Street, Melbourne, in
Victoria, on Aug. 4, 2015, at 11:00 a.m.
ON-LINE COMMUNICATIONS: First Creditors' Meeting Set For Aug. 5
---------------------------------------------------------------
Bradd William Morelli of Jirsch Sutherland was appointed as
administrators of On-line Communications Systems Pty Ltd on
July 24, 2015.
A first meeting of the creditors of the Company will be held at
Level 4, 55 Hunter Street, in Sydney, on Aug. 5, 2015, at
10:00 a.m.
PROVIDENT CAPITAL: ASIC Bans Former Director for 3 Years
--------------------------------------------------------
Australian Securities and Investment Commission has banned Trevor
John Seymour, a former director of Provident Capital Limited, from
managing corporations for three years and providing financial
services for three years.
The ban follows an ASIC investigation which found Mr Seymour
breached his duties as a director and failed to comply with
financial services laws.
Mr Seymour, of Campbelltown, New South Wales, was a director of
Provident Capital from May 25, 1998 to Dec. 17, 2013. Provident
Capital went into receivership on July 3, 2012 and into
liquidation on Oct. 24, 2012.
ASIC's investigation found Mr Seymour breached his obligations as
a director of Provident Capital and engaged in conduct that was
misleading or deceptive in relation to financial products by
approving a number of documents issued by Provident Capital,
namely:
-- 15 Quarterly and 7 Benchmark Reports issued to ASIC and
Australian Executor Trustees Limited, which contained
misleading statements and which were misleading or
deceptive, and
-- a Debenture Prospectus in December 2010, issued to raise
funds from the public, which contained misleading
statements and which were misleading or deceptive; and
-- Information Booklets in 2012, which were deficient.
ASIC Commissioner John Price said, 'Directors of financial
services companies have a clear responsibility to ensure the
company provides accurate and credible information upon which
investors can rely. ASIC will act to remove people who fail in
their corporate governance and compliance obligations, for the
protection of the public'.
Mr Seymour has been granted permission by ASIC to manage Raintron
Pty Ltd (the trustee of his self-managed superannuation fund) and
Garde Pty Ltd (a trustee company which acts as an executor of an
estate) on the basis that altering the arrangements to accommodate
his disqualification is disproportionate to the risk to the public
given the limited activities of these companies. He is also
permitted to act as a director of trading company of his
accountancy practice -- Bretnalls NSW Pty Ltd -- so long as he is
not the sole director and on the basis that he continues to be
involved in its day to day business.
Mr Seymour has filed an application with the Administrative
Appeals Tribunal (AAT) for a review of ASIC's decision.
ASIC's investigation is continuing.
On Feb. 20, 2015, ASIC banned managing director of Provident
Capital, Mr Michael Roger O'Sullivan, of Sydney, from managing
corporations for five years and from providing financial services
for seven years. Mr O'Sullivan sought a review of ASIC's decision
in the AAT. The hearing commenced 14 July 2015 and is continuing.
On July 1, 2015, ASIC banned former non-executive director of
Provident Capital, Mr John Patrick Sweeney, of Sydney, from
providing financial services for two years. ASIC found Mr Sweeney
failed to comply with financial services laws. Mr Sweeney has also
sought a review of ASIC's decision in the AAT.
The liquidators of Provident Capital (McGrath+Nicol) assisted
ASIC's actions by preparing a detailed report on their
investigation into the company. ASIC funded the liquidators'
investigation and report via the Assetless Administration Fund.
Provident Capital issued debentures to retail investors through
their Fixed Term Investment Portfolio and advanced the debenture
funds to third party borrowers, including property developers, on
a first mortgage basis.
Provident Capital also operated a mortgage fund under a wholesale
facility with Bendigo and Adelaide Bank and two managed investment
schemes.
On June 29, 2012, on an application by the Australian Executor
Trustees Limited, the trustee for Provident Capital debenture
holders, the Court ordered that receivers be appointed to
Provident Capital. ASIC appeared as a 'friend of the court' in
these proceedings.
ASIC suspended Provident Capital's Australian financial services
licence on Oct. 15, 2012.
When Provident Capital went into liquidation on Oct. 24, 2012,
over 3,000 Provident Capital debenture holders were owed
approximately AUD130 million.
Provident Capital's receivers (PPB Advisory) have estimated that
the likely return to debenture holders will be in the range of
AUD0.17 to AUD0.19 in the dollar.
SOTA EVENT: First Creditors' Meeting Slated For Aug. 6
------------------------------------------------------
Katherine Barnet and Hugh Armenis of Bentleys Corporate Recovery
were appointed as administrators of Sota Event Productions Pty Ltd
on July 27, 2015.
A first meeting of the creditors of the Company will be held at
Bentleys Corporate Recovery, Level 3, 1 Castlereagh Street, in
Sydney, on Aug. 6, 2015, at 11:00 a.m.
VAN EYK: Investors Take Legal Action in Cayman Islands
------------------------------------------------------
The Australian reports that the hunt for assets belonging to
failed funds management empire Van Eyk has moved to tax haven the
Cayman Islands.
According to the report, investors have launched legal action in
the Grand Court of the Cayman Islands to wind up a partnership in
which Van Eyk was an investor, the Torchlight Fund, run by Kiwi
businessmen George Kerr and Russell Naylor.
The Australian relates that documents filed with the court
investors represented by Aurora Funds Management, a subsidiary of
the Nicholas Bolton-controlled Keybridge Capital, make serious
allegations of wrongdoing against Mr Kerr and the New Zealand-
listed group he runs with Mr Naylor, Pyne Gould Corporation.
The report says Mr Kerr and Mr Naylor are accused of having
Torchlight buy NZ property from Mr Kerr and sell it back to him at
a loss, engaging in share trades with PGC to the fund's detriment,
failing to provide fund accounts and paying themselves inflated
management fees totalling AUD25 million.
The legal action sets the scene for a stoush over Torchlight's
assets between investors and WorleyParsons chairman John Grill,
who made a short-term, high-interest loan of AUD37 million to the
fund, the report states.
Mr. Kerr said the allegations were false and threatened to sue The
Australian if it published them. "All claims are without merit in
Torchlight's opinion and will be vigorously defended or actioned
by the fund," the report quotes Mr. Kerr as saying.
Mr Naylor and Mr Grill could not be reached, the report notes.
According to the report, Aurora lodged the lawsuit on June 25 as
trustee of three entities who together have pumped AUD90 million
into Torchlight: the Bear Real Opportunities Fund, a fund in which
Van Eyk's Blueprint High Growth Fund was an investor, and two NZ
government bodies, Crown Asset Management, which was set up in
2012 to hold the assets of the country's collapsed finance company
sector, and the Accident Compensation Corporation. It is supported
by two investors who have put in an additional
AUD5.88 million: Logic Fund Management, a Kiwi outfit run by
former Bain trader Greg Marshall, and another NZ state entity,
Public Trust, the report discloses.
The Australian relates that Aurora wants the court to wind up the
fund because it has "a justifiable lack of confidence in the
conduct and management of the partnership's affairs caused by the
lack of probity in the actions (and inactions)" of Mr Kerr and the
general partner, a Caymanian company controlled by Mr Kerr and Mr
Naylor that runs Torchlight. "Further, there has been a total
breakdown of trust and confidence between the general partner
and/or Mr Kerr and the petitioners," Aurora said in its winding-up
petition, the report relays.
Aurora said it estimated the total size of the Torchlight fund at
between AUD216 million and AUD259 million, but could not be more
precise as it had not received information from the general
partner "for some time and the figures that have been provided are
unreliable," The Australian relays.
It said Torchlight was originally domiciled in New Zealand, but in
December 2012 investors' interests were transferred "without
consultation or approval" to the Cayman Islands by giving them
equivalent stakes in the Caymanian fund, the Australian says.
The report relates that Mr Grill's private company, Walaci, put
the shell that was left behind in New Zealand into receivership in
June last year after it failed to repay a AUD33.6 million debt.
According to the report, the debt arose after Walaci gave
Torchlight a AUD37 million loan in August 2012 that attracted
interest of AUD500,000 a week after its two-month term expired.
The Australian relates that Aurora said the receivers of the NZ
shell, McGrathNicol, had launched action laying claim to the
Cayman fund's assets.
Under attack in Aurora's lawsuit is a real estate deal in which
Torchlight bought NZ land from one company associated with Mr Kerr
in 2010 for NZ$17 million and two years later sold it to "a
purchaser associated with Mr Kerr" for NZ$3.25 million, causing
the fund a loss of NZ$13.75 million, the Australian reports. It is
alleged that in 2010 Mr Kerr also tried to hide the fact he had
sold shares he indirectly owned in IEF Real Estate Group, the
former name of pub empire Lantern Hotels, to Torchlight by washing
the deal through Mr Marshall's Logic, the report adds.
WINEINC PTY: First Creditors' Meeting Slated For Aug. 6
-------------------------------------------------------
Nicholas Crouch and John Mcinerney of Crouch Amirbeaggi were
appointed as administrators of Wineinc Pty Limited on July 27,
2015.
A first meeting of the creditors of the Company will be held at
the Institute of Chartered Accountants Australia, Blaxland Room,
Level 9, 33 Erskine Street, in Sydney, on Aug. 6, 2015, at
11:00 a.m.
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C H I N A
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CHINA GINSENG: Closes $1.6 Million Purchase Agreement
-----------------------------------------------------
In connection with a security purchase agreement between China
Ginseng Holdings, Inc. and an investor, the Company closed a
private placement to sell a Series A Convertible Debenture for a
price of $1,600,000. The Debenture is convertible into 4,000,000
shares of the Company's common stock, par value $0.001 per share
at a price of $0.40 per share. The Offering was made in reliance
upon the exemption from securities registration afforded by
Regulation S as promulgated under the Securities Act of 1933, as
amended.
On the Closing, the Company issued a Convertible Debenture that is
convertible into 4,000,000 shares of Common Stock. The Convertible
Debenture will, by its principal terms:
(a) Carry no interest;
(b) Mature on the 36 month anniversary of the Closing
(c) Convert at any time after the issuance until the Maturity
Date into shares of Common Stock at an initial conversion
price of $0.40 per share, subject to adjustment pursuant
to the terms of the Convertible Debenture; and
(d) Carry a prepayment clause pursuant to which the Company may
repurchase all or a portion of the outstanding Convertible
Debenture in cash for 100% of the face value on 10 business
days' notice at any time after the 12 month anniversary of
the Closing; provided that the Investor shall have the
right to convert the Convertible Debenture within five
business days after written notice of such prepayment.
The proceeds of the Offering will be used for working capital and
general corporate purposes.
About China Ginseng
Changchun City, China-based China Ginseng Holdings, Inc., conducts
business through its four wholly-owned subsidiaries located in
China. The Company has been granted 20-year land use rights to
3,705 acres of lands by the Chinese government for ginseng
planting and it controls, through lease, approximately 750 acres
of grape vineyards. However, recent harvests of grapes showed poor
quality for wine production which indicates that the
vineyards are no longer suitable for planting grapes for wine
production. Therefore, the Company has decided not to renew its
lease for the vineyards with the Chinese government upon
expiration in 2013 and, going forward, it intends to purchase
grapes from the open market in order to produce grape juice and
wine.
China Ginseng reported a net loss of $4.76 million on $2.61
million of revenue for the year ended June 30, 2014, compared to a
net loss of $3.64 million on $3.56 million of revenue for the year
ended June 30, 2013.
As of March 31, 2015, the Company had $8.92 million in total
assets, $16.2 million in total liabilities, and a $7.24 million
total stockholders' deficit.
Cowan, Gunteski & Co., P.A., in Tinton Falls, NJ, issued a "going
concern" qualification on the consolidated financial statements
for the year ended June 30, 2014. The independent auditors noted
that the Company has incurred an accumulated deficit of
$14.2 million since inception, has a working capital deficit of
$11.6 million, and there are existing uncertain conditions the
Company faces relative to its ability to obtain working capital
and operate successfully. These conditions raise substantial
doubt about its ability to continue as a going concern.
EHI CAR: Fitch Publishes 'BB-' Long-Term Foreign Currency IDR
-------------------------------------------------------------
Fitch Ratings has published eHi Car Service Limited's (eHi) Long-
Term Foreign-Currency Issuer Default Rating (IDR) of 'BB-' and
senior unsecured rating of 'BB-'. The Outlook is Stable. Fitch has
also assigned eHi's proposed US dollar senior unsecured notes an
expected rating of 'BB-(EXP)'.
eHi's ratings are supported by the increasing economies of scale
it enjoys in a fast-growing Chinese car rental and car service
industry. It is the second-largest company by fleet size in the
combined car rental and car service industry, and is extending
this lead over smaller competitors given its stronger funding
position through substantial equity funding. Having predictable
contractual income from its B2B car service business further
supports its ratings. eHi's ratings are, however, constrained by
its small scale, large capex needs, and the industry's sensitivity
to regulatory changes. The company also lacks a long track record
of disposing of used cars without incurring significant losses.
eHi's Stable Outlook reflects its improved profitability during
expansion, which will help to keep its leverage below 2.5x and FFO
fixed charge coverage above 3x, despite rising debt levels.
The notes are rated at the same level as eHi's senior unsecured
rating because they constitute direct, general, unsubordinated and
unconditional obligations to eHi. The final ratings are contingent
upon the receipt of final documents conforming to information
already received.
KEY RATING DRIVERS
Adequate Funding for Fast Expansion: Fitch expects eHi to expand
its fleet size to 39,000 vehicles at end-2015 from 19,746 at end-
2014 after having raised USD304m in equity funding from an IPO in
November 2014 and other sources. The near-doubling of its fleet in
2015 follows a 71% increase in 2014. This rapid increase in
business scale drove revenue 50% higher to CNY851m in 2014 and
revenue is likely to reach CNY1.5bn in 2015.
Improving Operating Leverage: eHi is set to benefit from wider
margins following the significant increase in scale. The
improvement in operational efficiency is mainly due to the
combined effect of increasing fleet size per service location and
decreasing staff numbers per vehicle. Fitch expects EBITDA margin
(excluding gain/loss on car disposal) to increase from 33% to
above 40% in 2015. This will help to drive EBITDA growth of over
40% in each of the next two years, and help to keep FFO net
leverage below 2.5x (2014: 1.9x).
Predictable Contractual Service Income: eHi has a well-established
reputation in B2B car services (including short term and long
term) and also provides long-term self-drive car rentals, which
together accounted for more than 30% of its net revenue in 2014.
It has more than 32,000 corporate long-term clients, some of which
are large multinational companies. Fitch believes eHi's B2B
business will continue to generate CNY300m-600m in revenue in
2015-2016, which will provide a cushion to the company in case of
distress.
Competitive Pressure: eHi has a smaller fleet size than industry
leader, CAR Inc. (CAR, BB+/Stable), which had a fleet size of
69,000 as of March 2015. This puts pressure on eHi to expand to
narrow the market share gap with CAR, which continues to expand
aggressively. Competition for market share will put more pressure
on eHi's financial profile than on its bigger competitor. eHi
generated EBITDA of CNY270m versus CAR's CNY1,597m in 2014.
Unproven Car Disposal Track Record: eHi has not needed to dispose
of a large number of vehicles because the fleet is still very
young. eHi is currently relying on auction companies to dispose of
its vehicles but it has explored other channels, including working
with third-party online platforms and establishing a repurchase
programme with auto manufacturers. eHi has yet to prove it is able
to dispose of a large number of venhicles and create a sustainable
fleet renewal cycle. Considering the immature used-car market in
China, car disposal will be one of the main challenges facing eHi
in the future.
Regulation Risk: The Chinese car rental and car service industry
is mainly regulated by local government authorities without a
national governing law. The regulations often vary by geography
and are subject to changes and practical deviations. Any
unexpected change in regulations could adversely impact eHi's
operations. Although these risks are not imminent, the industry is
at an early stage of development in China and there are likely to
be regulatory changes before the industry matures and stabilises.
KEY ASSUMPTIONS
Fitch's key assumptions within our rating case for the issuer
include:
-- Total fleet size will almost double to 39,000 in 2015. 2015-
2019 total fleet size will have a CAGR of 30%.
-- Net revenue will increase more than 75% in 2015 and enjoy a
CAGR of more than 30% in 2015-2019.
-- Fleet depreciation schedule: 15% of gross fleet value.
-- Existing vehicles purchased before June 2014 will be disposed
in 3.5 years; new vehicles purchased after June 2014 will be
disposed in 2.75 years.
-- Capex/car rental vehicle is CNY100,000 and capex/car service
vehicle is CNY225,000.
-- EBITDA margin will increase to more than 45% in 2015 and
reach 59% in 2019.
RATING SENSITIVITIES
Negative: Future developments that may, individually or
collectively, lead to negative rating action include:
-- FFO adjusted net leverage sustained above 3x;
-- EBITDA margin (excluding gain/(loss) from car disposal)
sustained below 45%;
-- EBIT margin (excluding gain/(loss) from car disposal)
sustained below 20% (2014: -2.1%);
-- Significant loss from car disposals or evidence of difficulty
in establishing a track record of selling used cars at
reasonable terms; and
-- Evidence of greater government, regulatory or legal
intervention leading to an adverse change in the company's
operation and business profile.
Positive: Future developments that may, individually or
collectively, lead to positive rating action include;
-- No positive rating pressure in the next 12-18 months until
the company achieves significant increase in scale while
keeping FFO adjusted net leverage below 2.5x during the
growth stage.
EHI CAR: S&P Assigns 'BB' Corporate Credit Rating; Outlook Stable
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB' long-term
corporate credit rating to eHi Car Services Ltd. The outlook is
stable. S&P also assigned its 'cnBBB-' long-term Greater China
regional scale rating to the company.
At the same time, S&P assigned its 'BB-' long-term issue rating
and 'cnBB+' long-term Greater China regional scale rating to eHi's
proposed issue of U.S. dollar-denominated senior unsecured bonds.
The issue ratings on the notes are subject to S&P's review of the
final issuance documentation.
"The rating on eHi reflects the company's small scale compared
with global peers, aggressive capital expenditure through external
funding, and its operations in a fragmented and highly competitive
car rental and chauffeur services industry in China," said
Standard & Poor's credit analyst Gloria Lu. "These factors are
mitigated by eHi's relatively good market position in China,
improving profitability and cash flow generation, and the
country's favorable long-term growth."
eHi is small when compared with our global leading car rental
companies. eHi is the second-largest car rental company and the
biggest chauffeur services provider in China. But it only
accounts for about 2% of market share by revenues in China's
highly fragmented operating environment and is well behind the
first player in scale. The aggregate revenues of the top three
Chinese players in rental and chauffeur services in 2013 accounted
for only about 11% of the market share, compared with 95% in U.S.,
32% in Japan, and 27% in Brazil.
The industry fragmentation in China indicates strong competition
and potential challenges in execution. These factors,
nevertheless, can be mitigated by the favorable long-term growth
in China's car rental and chauffeur services industry, where eHi's
good position offers an advantage in grabbing growth
opportunities.
S&P has rated the proposed notes one notch below the long-term
corporate credit rating on eHi. The company's ratio of priority
claims is likely to exceed S&P's 15% threshold in the coming 12
months, in expectation of rising debt in the subsidiaries. In
S&P's view, its assets' geographic diversity and the downstream
loan from the company to subsidiaries moderate the structural
subordination risk of the senior unsecured debt at the holding
company level. eHi will use the net proceeds from the proposed
notes primarily for the group's capital expenditures and other
general corporate purposes.
"eHi will rely on external funding to support its growth in the
next two years. Although the company has quickly improved its
core cash flow ratios and EBITDA margin, we expect negative free
operating cash flow and rising debt over the next two years.
Nevertheless, eHi's flexibility to reduce capital expenditure and
its IPO in late 2014 offer some financial flexibility," Ms. Lu
said.
The stable outlook reflects S&P's expectation that eHi will
continue to improve its profit and cash flow. Given its
aggressive growth plan, S&P expects its EBITDA margin will range
40%-45% and its ratio of debt to EBITDA will stay below 3.5x over
the next 12 months. In addition, S&P do not expect any material
acquisitions over the period.
S&P may lower the rating if the company's ratio of debt to EBITDA
approaches 4x. This could happen if eHi borrows significantly for
acquisition or capital expenditures, or if its business
underperforms against S&P's forecast.
Rating upside is unlikely in the coming 12 months, due to eHi's
limited operating and financial track records in executing an
aggressive growth plan. S&P may review the chance of its rating
upside if eHi expands successfully in China, demonstrates a
prudent financial management track record, and maintains its
operating margin and financial strength.
FANTASIA HOLDINGS: Moody's Keeps B2 CFR ff. Consent Solicitation
-----------------------------------------------------------------
Moody's Investors Service says that Fantasia Holdings Group Co.,
Limited's consent solicitation has no immediate impact on its B2
corporate family rating and B3 senior unsecured debt rating, or on
its stable ratings outlook.
Fantasia is seeking consent from its 2016 CNY notes and 2017, 2019
and 2020 USD senior note holders to amend the terms of the notes,
including amendments in relation to debt incurrence, restricted
payments, permitted investments, and certain defined terms, that
would conform with the covenants of its most recent 2018 USD
bonds.
"The proposed amendments will provide Fantasia with more
flexibility in financial management and in incurring debt.
Consequently, the amendments -- if approved -- will loosen
existing restrictions on the company's ability to raise debt,"
says Stephanie Lau, a Moody's Assistant Vice President and
Analyst.
"Furthermore, although the amended terms with respect to debt
incurrence would loosen, Moody's does not expect the company to
change its financial policies and profile to an extent that would
pressure its ratings," says Lau, who is also the lead analyst for
Fantasia.
Moody's expects Fantasia's revenue/adjusted debt to remain weak at
50%-55% in the next 12 months, based on revenue growth to around
RMB8.5 billion in 2015, supported in part by unbooked contracted
sales of around RMB 4.6 billion at end-2014 and targeted
contracted sales growth of 8% in 2015 to RMB11 billion.
The company's EBIT/interest coverage of 2.2x for 2014 positions it
at a B2 rating. Moody's expects its EBIT interest coverage will
remain at around 2.0x - 2.2x through to the end of 2015.
Fantasia's successful issuance of USD200 million in offshore bonds
in May 2015 have slightly improve its cash to short-term debt
ratio to around 1.0x-1.1x from 0.95x at end-2014, and extended its
debt maturity profile.
Moody's also expects that Fantasia will achieve its sales target
of RMB11 billion for 2015. This target has been set only slightly
above the RMB10.2 billion achieved in 2014, while 1H 2015 sales of
RMB4.047 billion showed a 125% year-on-year increase.
Given the strong growth seen in Fantasia's year-to-date sales --
while also noting that the company has generally achieved a more
backend-loaded contracted sales pattern -- Moody's believes it is
on track to achieve its target for 2015.
Fantasia's B2 corporate family rating reflects its long track
record in Chengdu and Shenzhen, as well as a diversified
development product line in commercial complexes and high-end
residential properties.
The rating is constrained by execution risks in new markets, the
unproven track record of its asset-light model, and its weak
credit metrics and liquidity.
Fantasia's B3 senior unsecured debt rating is one notch below its
B2 corporate family rating, reflecting legal and structural
subordination risks.
The principal methodology used in these ratings was Homebuilding
And Property Development Industry published in April 2015.
Fantasia Holdings Group Co., Limited, is a property developer.
Established in 1996, it listed on the Hong Kong Stock Exchange in
November 2009. As of Dec. 31, 2014, its land bank totaled 14.6
million square meters of gross floor area (GFA), mainly in the
Chengdu-Chongqing Economic Zone and the Pearl River Delta.
=========
I N D I A
=========
ADITI RICE: ICRA Suspends 'D' Rating on INR14.05cr LT Loan
----------------------------------------------------------
ICRA has withdrawn the suspended rating of [ICRA]D assigned to the
INR14.05 crore, long term loans and working capital facilities of
Aditi Rice Mills Private Limited. As per ICRA's policy on
withdrawals, ICRA can withdraw the ratings in case the ratings
remain suspended for more than three years.
ALAMELU BALAJI: CRISIL Cuts Rating on INR124.5MM Loan to 'B'
------------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facilities
of Alamelu Balaji Spg Mills Private Limited (ABSM) to 'CRISIL
B/Stable' from 'CRISIL B+/Stable', while reaffirming its rating on
the company's short-term bank facility at 'CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 124.5 CRISIL B/Stable (Downgraded
from 'CRISIL B+/Stable')
Letter of Credit 2.0 CRISIL A4 (Reaffirmed)
Long Term Loan 64.8 CRISIL B/Stable (Downgraded
from 'CRISIL B+/Stable')
The rating downgrade reflects CRISIL's belief that ABSM's
liquidity will remain weak over the medium term due to sizeable
working capital borrowings. The cash accruals are expected to be
just about adequate to service maturing debt in 2015-16 (refers to
financial year, April 1 to March 31), keeping working capital
borrowings high. The bank lines were utilised at 97 per cent on
average in the 12 months through March 2015.
The rating continues to reflect ABSM's modest scale of operations
in the fragmented textile industry, and the company's below-
average financial risk profile, marked by a highly leveraged
capital structure. These rating weaknesses are partially offset by
the extensive experience of ABSM's promoter in the textile
industry.
Outlook: Stable
CRISIL believes that ABSM will continue to benefit over the medium
term from its promoter's extensive industry experience. The
outlook may be revised to 'Positive' if a considerable increase in
revenue and profitability leads to substantially stronger cash
accruals and improved liquidity for ABSM. Conversely, the outlook
may be revised to 'Negative' if power shortage and low operating
rates result in a steep decline in ABSM's accruals and
profitability; or if deterioration in working capital management
or any large capital expenditure weakens its financial risk
profile.
ABSM, set up in 1993, manufactures cotton yarn. Its operations are
managed by Mr. Venkataswamy.
AMGC LOGISTICS: CRISIL Assigns 'B' Rating to INR78MM Cash Loan
--------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable' rating on the long term
bank facilities of AMGC Logistics Private Limited (ALPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 78 CRISIL B/Stable
Proposed Long Term
Bank Loan Facility 2 CRISIL B/Stable
The rating reflects ALPL's susceptibility to regulatory framework
governing trade in agricultural commodities and its below-average
financial risk profile, marked by high external indebtedness and
modest net worth. These rating weaknesses are partially offset by
the extensive experience of ALPL's promoter's in the agro
commodities industry.
Outlook: Stable
CRISIL believes that the ALPL will continue to benefit over the
medium term from its promoters extensive experience in the
industry. The outlook may be revised to 'Positive' in case the
firm achieves significant and sustained improvement in its
revenues while improving its margins and capital structure.
Conversely, the outlook may be revised to 'Negative' in case ALPL
registers significant decline in its revenues or margins, or if
there is elongation in the working capital cycle, or if the
company undertakes a larger than expected debt funded capex
programme resulting in weakening in its financial risk profile.
ALPL was established in 2012 based out Nagpur (Maharashtra) by Mr
DTS Moorthy , engaged in export of agro commodities such as rice
and sugar. The day to day operations of the company are managed by
Mr. DTS Moorthy.
ARIHANTH JEWELLERS: CRISIL Assigns B+ Rating to INR100MM Loan
-------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-term
bank facility of Arihanth Jewellers Private Limited (AJPL). The
rating reflects AJPL's small scale of operations, large working
capital requirements, and low profitability. These rating
weaknesses are partially offset by the extensive industry
experience of AJPL's promoters.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 100 CRISIL B+/Stable
Outlook: Stable
CRISIL believes that AJPL will benefit over the medium term from
its improving market position. The outlook may be revised to
'Positive' in case of sustainable improvement in the company's
revenue and profitability, resulting in considerably large cash
accruals, or better inventory management leading to improved
liquidity. Conversely, the outlook may be revised to 'Negative' if
the company reports low cash accruals or if its working capital
cycle lengthens, weakening its financial risk profile,
particularly its liquidity.
AJPL, incorporated in 2013-14 (refers to financial year, April 1
to March 31), is engaged in the wholesaling of gold jewellery. The
company is promoted by Chennai-based Bokadia family.
CHENDURAN COTSPIN: Ind-Ra Assigns 'IND BB+' LT Issuer Rating
------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Chenduran Cotspin
(India) Private Limited (CCIPL) a Long-Term Issuer Rating of 'IND
BB+'. The Outlook is Stable.
The agency has also assigned ratings to CCIPL's bank loans as
follows:
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Fund-based working 193.64 Assigned 'IND BB+'/Stable;
capital limits 'IND A4+'
Long-term loans 56.36 Assigned 'IND BB+'/Stable
KEY RATING DRIVERS
The ratings reflect CCIPL's moderate credit metrics and tight
liquidity. Unaudited FY15 financials indicate net leverage of 4.1x
(FY14: 2.9x) and EBITDA interest cover of 2.4x (2.2x). The
company's working capital utilisation was almost-full for the 12
months ended May 2015. The ratings also consider the commodity
nature of business. EBITDA margins are volatile and fluctuated
between 5.7% and 14.4% over FY11-FY15 due to raw material price
fluctuations.
The ratings also factor in the company's moderate scale of
operations with revenue of INR945m in FY15. The revenue grew at a
CAGR of 4.48% over FY11-FY15, with an increase in orders from
regular customers.
The ratings are supported by the promoter's two-decade-long
experience in the cotton yarn manufacturing business.
RATING SENSITIVITIES
Positive: Substantial growth in the top-line with an improvement
in the EBITDA margins leading to a sustained improvement in the
credit metrics could be positive for the ratings.
Negative: Any deterioration in the EBITDA margins leading to
sustained deterioration in the credit metrics could be negative
for the ratings.
CCIPL was established in 1991. The company manufactures cotton
yarn in the count range of Ne 10s to Ne 120s. CCIPL's EBITDA
margins were 10.5% in FY15.
CROSS COUNTRY: CARE Assigns B+ Rating to INR11.92cr LT Loan
-----------------------------------------------------------
CARE assigns 'CARE B+' and 'CARE A4' ratings to the bank
facilities of Cross Country Apparels.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 11.92 CARE B+ Assigned
Short term Bank Facilities 4.55 CARE A4 Assigned
Rating Rationale
The ratings assigned to the bank facilities of Cross Country
Apparels (CCA) are constrained by its small scale of operations,
low profitability margins, working capital intense nature of
operations and foreign exchange fluctuation risk. The ratings are
further constrained by partnership nature of constitution, highly
fragmented market resulting in intense competition from the
unorganized and organised players as well competition from foreign
players. The ratings, however, favourably take into account
experienced partners and moderate capital structure of CCA.
The ability of the firm to increase the scale of operations while
improving its profitability margins, improving its capital
structure further and managing the working capital requirements
efficiently would be the key rating sensitivities.
Cross Country Apparels (CCA) was established in 2004 by Mr Kamal
Prakash Goyal and his brothers. The firm is engaged in
the manufacturing of knitted hosiery garments like T-shirts,
dresses, pullovers, sweaters, etc. The firm is also engaged in
trading of knitted cloths, hosiery goods and yarn. It has its
manufacturing facilities in Ludhiana, Punjab with varying
installed capacity for each product. The main raw materials like
polyester yarn, cotton yarn, wool yarn and knitted cotton cloth
are procured directly from manufacturers located in Ludhiana,
Punjab. The firm sells its products in the domestic market mainly
to wholesalers and traders. The firm has four group concerns
namely Piyush Overseas Private Limited, Goyal Knitwear Private
Limited, Krishna Goyal HosieryWorks and Geetu Overseas Private
Limited engaged in the same line of business.
For FY15 (provisional; refers to the period April 1 to March 31),
CCA reported a total income of INR71.01 crore with PBILDT
and PAT of INR2.29 crore and INR0.74 crore, respectively, as
against the total income of INR79.36 crore with PBILDT and PAT
of INR3.08 crore and INR0.68 crore, respectively, in FY14.
DHARAM EXPORT: ICRA Suspends B+ Rating on INR4.75cr Loan
--------------------------------------------------------
ICRA has suspended the [ICRA]B+ rating assigned to the INR4.75
crore long term fund based bank facilities and INR2.75 crore
unallocated bank facilities of Dharam Export (India) Private
Limited. The suspension follows ICRA's inability to carry out a
rating surveillance in the absence of the requisite information
from the company.
DIAMOND FOOTCARE: ICRA Ups Rating on INR40cr Cash Credit to BB-
---------------------------------------------------------------
ICRA has upgraded its long term rating on the INR48.5 crore fund
based bank facilities and term loans of Diamond Footcare Udyog
Private Limited (DFUPL) to [ICRA]BB- from [ICRA]B. ICRA has
reaffirmed its short term rating on the INR6.5 crore non fund
based bank facilities of DFUPL at [ICRA]A4. The outlook on the
long term rating is 'Stable'.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit Facility 40.0 [ICRA]BB-(Stable);Upgraded
Term Loan Facility 8.5 [ICRA]BB-(Stable);Upgraded
Non-Fund Based Facility 6.5 [ICRA]A4;Re-affirmed
The upgrade in ratings is driven by the continued improvement in
DFUPL's performance, with the company sustaining higher operating
margins in FY 2014 and FY 2015, subsequent to the stabilization of
its operations on an expanded scale. In FY2014, the company had
moved to, and consolidated its facilities in, Bahadurgarh,
Haryana, which resulted in ease of operations as well as economies
of scale. The stabilization of operations at the Bahadurgarh
facility has led to improved operating margins, while repayment of
debt and extraordinary income from sale of assets has led to an
improved capital structure and coverage indicators. The ratings
continue to factor in the extensive experience of the promoters
and the company's established distribution network.
The ratings however remain constrained on account of the company's
significant working capital requirements on account of an
elongated receivables period and the need to maintain high
inventory levels. While the working capital intensity has improved
slightly in FY 2015 to 27% from 29% in FY 2014; the company's
working capital limits remain highly utilized, resulting in a
modest liquidity position. The ratings continue to be constrained
by the fragmented and thus competitive nature of the industry and
the vulnerability of the company's profitability to volatility in
raw material prices and adverse movements in exchange rates, as a
part of the company's raw material requirements are met through
imports.
Going forward, the ability of the company to ramp up its scale of
operations while maintaining its profitability and improving its
liquidity position will remain the key rating sensitivities.
DFUPL was set up by Mr. Om Prakash Gupta in 1978 as Diamond Toys
Company Private Limited (its name was changed to its present name
in 2010). The company is currently headed by Mr. Ramesh Kumar
Gupta (Managing Director), who has more than two decades of
experience in the industry. DFUPL is engaged in manufacturing and
sale of non-leather footwear products like rubber slippers, light
weight slippers, sandals and shoes. In FY14 two group companies
Diamond Footstep Private Limited and Hooda Finance and Investment
Private Limited were amalgamated with DFUPL.
Recent Results
DFUPL reported an operating income (OI) of INR135.55 crore and a
net profit of INR16.90 crore for FY15, as against an operating
income (OI) of INR133.34 crore and a net loss of INR0.35 crore for
the previous year.
EARTHEN TREASURES: CARE Assigns 'B' Rating to INR5cr LT Loan
------------------------------------------------------------
CARE assigns 'CARE B' rating to the bank facilities of Earthen
Treasures Natural Resources Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 5 CARE B Assigned
Rating Rationale
The rating assigned to the bank facilities of Earthen Treasures
Natural Resources Private Limited (ETNR) is constrained on
account of its short track record of operations of two years
coupled with modest scale of operations, leveraged capital
structure with weak profitability margins, working capital
intensive nature of operations and risk associated with
availability of raw material.
The rating, also, takes into account the wide experience of the
promoters and location advantage of the company in close
proximity to sources of raw material.
The ability of the company to improve its scale of operations
while achieving the envisaged level of profitability is the key
rating sensitivity.
Earthen Treasures Natural Resources Private Limited (ETNR), a Pune
(Maharashtra) based company, incorporated in April, 2013 by Mr.
Anikant Jain and Mr. Pratyush Bharatiya. ETNR is engaged in
quarrying, production and trading of granite.
ETNR operates from its leased quarry measuring 2.13 acres in
Chamrajnagar, Karnataka. The company has acquired rights of
selling, supplying, and transporting of black granite blocks for a
lease period of seven years ending 2020.
ETNR caters to the Indian domestic market as well as international
markets of Russia and South East Asian countries. Key raw
materials include granite rough blocks, which are procured from
its leased quarries, and are processed further. The company has a
varied range of granite products to cater to the requirements of
construction industry including buildings, hospitals, hotels and
other housing projects.
In FY15(Prov.), ETNR earned PAT of INR0.23 crore on a total
operating income of INR13.57 crore against PAT of INR0.04
crore on a total operating income of INR0.46 crore in FY14
(Audited).
HARAGOURI HIMGHAR: CARE Assigns 'B' Rating to INR9.61cr LT Loan
---------------------------------------------------------------
CARE assigns 'CARE B' rating to the bank facilities of Haragouri
Himghar Private Ltd.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 9.61 CARE B Assigned
Rating Rationale
The rating assigned to the bank facilities of Haragouri Himghar
Private Ltd (HHPL) is constrained by its relatively small scale of
operations with moderately low profitability margins, regulated
nature of business with competition from other local players,
seasonality of the business with susceptibility to vagaries of
nature, risk of delinquency in loans extended to farmers, working
capital intensive nature of business resulting in leveraged
capital structure and weak debt service coverage indicators. The
aforesaid constraints are partially offset by the experience of
the promoters and proximity to the potato-growing area.
The ability to increase its scale of operations with increase in
net profit margins & improvement in capital structure and
efficient management of working capital are the key rating
sensitivities.
Haragouri Himghar Private Ltd. (HHPL), incorporated on
September 19, 2012, was initially established as a partnership
firm namedM/s Hara Gouri Himghar in 2008 by Mr Haradhan Samanta
and Mrs Tapasi Samanta of Hooghly, West Bengal.
The partnership firm was converted to a private Limited Company on
September 19, 2012. HHPL is currently engaged in the business of
providing cold storage facility at Mukhtarpur village of Hooghly,
West Bengal, primarily for potatoes and is operating with a
storage capacity of 143,470 quintals. Besides providing cold
storage facility the unit also works as a mediator between the
farmers and marketers of potato, to facilitate sale of potatoes
stored and also provides interest free advances to farmers for
farming purposes of potato against potato stored. HHPL is also
engaged in trading of potatoes and the same accounted for around
21% of the total income in FY14 (refers to the period April 1 to
March 31).
During FY14, HHPL undertook a capacity expansion project thereby
enhancing the capacity from 57,742 quintals to 143,470 quintals.
Mr Haradhan Samanta is the main promoter and he looks after the
day to day operations of the unit.
As per the audited results of FY14, HHPL reported a PBILDT of
INR0.81 crore and net loss of INR0.03 crore, on a total operating
income of INR3.02 crore. Furthermore, during FY15 (Provisional),
HHPL is stated to have achieved a total operating income of
INR2.68 crore per annum.
HARSHGEET OVERSEAS: CRISIL Assigns 'B' Rating to INR100MM Loan
--------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable' rating to the long-term
bank facility of Harshgeet Overseas (Harshgeet).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 100 CRISIL B/Stable
The rating reflects Harshgeet's modest scale of operations in the
intensely competitive and highly fragmented cotton trading
industry, and its below-average financial risk profile, marked by
a high total outside liabilities to tangible net worth ratio and
moderate debt protection metrics. These rating weaknesses are
partially offset by the extensive business experience of promoter
in the cotton trading industry through their family business.
Outlook: Stable
CRISIL believes that Harshgeet will continue to benefit over the
medium term from its promoter extensive experience in the cotton
trading industry. The outlook may be revised to 'Positive' if the
firm significantly increases its scale of operation and
profitability or if the promoters infuse substantial capital,
leading to improvement in its financial risk profile. Conversely,
the outlook may be revised to 'Negative' if the firm reports low
accruals because of decline in revenue or profitability, or if its
working capital requirements increase leading to deterioration in
its liquidity, or if the firm undertakes any debt-funded capital
expenditure programme.
Set up in 2011, Harshgeet trades in raw cotton. Based in Sendhwa
(Madhya Pradesh), the firm is promoted by Mr. Jaideep Singh
Rajpal.
HOTEL AIRPORT: ICRA Lowers Rating on INR15cr Term Loan to 'D'
-------------------------------------------------------------
ICRA has revised the rating assigned to the INR15.00 crore term
loan facility of Hotel Airport Kohinoor Private Limited from
[ICRA]B to [ICRA]D.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term Loan 15.00 Revised to [ICRA]D
from [ICRA]B
The rating revision factors in the delays in debt servicing by the
company owing to its stretched liquidity position. Furthermore,
the liquidity profile at a group level remains stretched, brought
around by slow sales of commercial projects, particularly the
large scale project in Mumbai, wherein a significant quantum of
group funds have been deployed. The start up nature of operations
of the group's recent ventures in healthcare, education and
hospitality segments has also resulted in the company's stretched
liquidity profile.
HAKPL is part of Kohinoor Group promoted by Mr. Manohar Joshi and
currently managed by Mr. Unmesh Joshi. The company operates in two
segments, namely, hospitality and education. HAKPL operates a 137
room 4 Star hotel in Mumbai named Kohinoor Continental. The hotel
is located in at a 2 kms distance from the international airport
and at 4 kms distance from the domestic airport on Andheri Kurla
Road, Andheri (East). HAKPL made a foray in the education business
in FY 2009 setting up a hospitality management institute at
Khandala, Maharashtra. Hospitality business remains the primary
business segment of the company attributing to ~90% of the total
revenue stream, with the balance coming from the education
business.
JAI AMBEY: CRISIL Ups Rating on INR50MM Cash Loan to B+
-------------------------------------------------------
CRISIL has upgraded its rating on the long-term bank facilities of
Jai Ambey Wire Exim Pvt Ltd (JAWE) to 'CRISIL B+/ Stable' from
'CRISIL B/Stable'. The company's short-term rating has been
reaffirmed at 'CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 50 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
Composite Working
Capital Limit 30 CRISIL A4 (Reaffirmed)
Overdraft Facility 40 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
The rating upgrade reflects successful off-take of JAWE's
operations in 2014-15 (refers to financial year, April 1 to March
31), which was the first full year of its operations. The ramp-up
was driven by the promoters' healthy relationships with suppliers
and customers and extensive experience in a similar line of
business through their manufacturing operations under Jai Ambey
Wire Pvt Ltd. Therefore, while JAWE registered a low operating
margin of around 1.6 per cent, a significant increase in its sales
to INR520 million in 2014-15 from INR282 million in 2013-14,
resulted in improved cash accruals. CRISIL believes JAWE will
report a sustained increase in its scale of operations, resulting
in expected improvement in its business and financial risk
profiles.
The ratings reflect JAWE's modest scale of operations and low
profitability on account of its trading nature of operations. The
ratings also factor in the company's below-average financial risk
profile, marked by weak debt protection metrics. These rating
weaknesses are offset by the extensive experience of its promoters
in the wire & rods industry.
Outlook: Stable
CRISIL believes that JAWE will maintain its business risk profile
over the medium term supported by the extensive industry
experience of its promoters. The outlook may be revised to
'Positive' in case of a healthy ramp-up of the company's
operations and sustained growth and profitability. Conversely, the
outlook may be revised to 'Negative' if JAWE reports lower-than-
expected revenue or profitability, resulting in weakening in its
financial risk profile.
JAWE was incorporated in February 2014 and is based in Raipur,
Chhattisgarh. The company trades in wire rods, Hard Bright (HB)
wires, and Galvanized Iron (GI) wires.
JAWE reported a profit after tax (PAT) of INR2.0 million on net
sales of INR520.7 million for 2014-15, against a PAT of INR0.03
million on net sales of INR40 million for 2013-14.
JAI MAHARASHTRA: ICRA Lowers Rating on INR100cr NCD to 'D'
----------------------------------------------------------
ICRA has revised the long-term rating assigned to INR100 crore
Non-Convertible Debenture (NCD) programme of Jai Maharashtra Nagar
Development Private Limited (JMNDPL) to [ICRA]D from [ICRA]C+.
The rating revision factors in delays in debt servicing coupled
with failure to comply with the covenants of the debenture trust
deed within the stipulated timelines leading to occurrence of
default.
JMNDPL is a special purpose vehicle (SPV) promoted by a Mumbai-
based promoter group for undertaking the redevelopment of the Jai
Maharashtra Nagar Co-operative Housing Federation Limited -- a
federation of eight societies at Borivali (east), near Magathane
bus depot in Mumbai. 54.55% of the company's equity is held by the
promoter group (Shubh Group), 44.62% is held by a private equity
investor (Signature Realty Advisory India Pvt. Ltd.) and remainder
0.83% is held by Volsacom Services Limited. The land is owned by
the Maharashtra Housing and Area Development Authority (MHADA); of
the ten societies, eight are covered under the redevelopment
project being undertaken by the company. The remaining two
societies have not yet received the conveyance from MHADA; and are
hence not covered under the project.
The promoters, Shubh Group, are a Mumbai-based real estate
development group, with 15 years experience in the redevelopment
space. The promoter group has developed over 1 million sq.ft.
across projects executed at Andheri and Borivali; and has over 2.5
million sq.ft. under development.
JAM HOTELS: ICRA Assigns 'B' Rating to INR15cr Term Loan
--------------------------------------------------------
ICRA has assigned a long term rating of [ICRA]B to the INR15.00
crore term loan facilities of Jam Hotels and Resorts Private
Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term Loan facilities 15.00 [ICRA]B/assigned
The assigned rating considers the vast experience of the promoters
in hotel industry and the Company being part of the Accord Group
(which has diversified presence in education, distillery and
brewery, among other). The rating is constrained by the weak
financial profile marked by net losses, stretched capital
structure and inadequate coverage indicators necessitating the
Group's financial support in the form of non-interest bearing
unsecured loans to meet its debt repayment obligations in a timely
manner. Having completed three full years of operations, the
performance of the Company has steadily improved over the years
with stabilization of operations reflected by growth in revenues
and operating profits, although the company continues to post net
losses. The rating also factors in the Company's small scale of
operations with a single hotel property of 105 rooms and the
intense competition from other major players in Puducherry. While
the Company is expected to generate sufficient accruals to meet
its repayment obligations on its own in the near term, it is
crucial for the Group to continue extending financial support in
case of any shortfall.
Jam Hotels and Resorts Private Limited, incorporated in 2008-09
was promoted by Mr. S Jagathratchagan and is held by his family
members and other Group entities. The Company owns and operates a
single hotel property under the brand "Accord Puducherry", which
was launched in late 2011-12. The hotel has 105 rooms, two
restaurants and one bar. The Company is part of diversified Accord
Group, which has presence in education, hospitality, distillery,
brewery etc.
Recent Results (un-audited)
As per the un-audited financials for 2014-15, the Company incurred
net loss of INR1.8 crore on an operating income of INR14.0 crore
as against net loss of INR3.7 crore on an operating income of
INR11.5 crore for 2013-14.
JAMSHEDPUR MINERALS: CRISIL Rates INR30MM Letter of Credit at B+
-----------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' to the bank
facilities of Jamshedpur Minerals & Chemicals (JMC).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 10 CRISIL B+/Stable
Letter of Credit 10 CRISIL A4
Cash Credit 20 CRISIL B+/Stable
Foreign Letter of
Credit 30 CRISIL B+/Stable
The ratings reflect JMC's susceptibility to volatility in raw
material prices and cyclicality in the steel industry and small
scale of operations in the fragmented ferroalloys industry. These
rating weaknesses are mitigated by the promoters' extensive
experience in the ferroalloys industry.
Outlook: Stable
CRISIL believes that JMC will benefit from its promoters'
extensive industry experience. The outlook may be revised to
'Positive' in case of a significant increase in the firm's revenue
and cash accruals, or if it improves its working capital
management, or if its promoters infuse substantial capital,
leading to a better financial risk profile. Conversely, the
outlook may be revised to 'Negative' if JMC's accruals are low, or
its working capital management weakens, or it undertakes a large
unexpected debt-funded capital expenditure programme, leading to
deterioration in its financial risk profile, particularly its
liquidity.
JMC was established in 2014 by Janshedpur (Jharkhand)-based Mr.
Manoj Kumar Gutgutia, Mr. A K Gutgutia, Mr. Shiv Kumar Agarwal and
Mr. Ramjanam Singh. The firm started its commercial operations
from February 2015 and manufactures ferro alloys such as low
carbon ferro manganese, ferro molybdenum and ferro titanium.
KAILASH ROLLING: CRISIL Raises Rating on INR45MM Cash Loan to B+
----------------------------------------------------------------
CRISIL has upgraded its rating on the long-term bank facilities of
Kailash Rolling Steel Mills (KRSM) to 'CRISIL B+/Stable' from
'CRISIL B/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 45 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
Term Loan 35 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
The rating upgrade is driven by successful ramp-up in KRSM's
operations, coupled with sustained operating profit leading to
adequate cash accruals. The firm's debt protection metrics have
improved during the year; these are expected to improve further
driven by payment of existing term debt and absence of significant
debt-funded capital expenditure (capex) in the near term. KSRM is
expected to generate annual cash accruals of INR12 million to
INR15 million against debt obligations of INR9.0 million a year,
over the medium term.
The rating reflects KSRM's modest financial risk profile, marked
by high gearing and small net worth, and its susceptibility to
intense industry competition and to volatility in raw material
prices. These rating weaknesses are partially offset by the
extensive experience of KSRM's promoters, and its established
customer base, in the iron and steel industry.
Outlook: Stable
CRISIL believes that KSRM will continue to benefit over the medium
term from its promoters' extensive experience, and its established
customer base, in the iron and steel industry. The outlook may be
revised to 'Positive' in case of continued growth in the firm's
scale of operations along with sustained operating margin, leading
to better financial risk profile. Conversely, the outlook may be
revised to 'Negative' if KSRM's revenue and operating margin
decline significantly, or if its working capital cycle increases,
leading to further deterioration in the financial risk profile.
KSRM was set up in 2008 by Mr. Tilak Raj Bardeja. The firm
manufactures mild-steel (MS) flats and MS bars. It has been
operating a rolling mill on lease till March 2013. In 2012-13
(refers to financial year, April 1 to March 31), the firm set up a
manufacturing facility at Mandi in Gobindgarh (Punjab) which
started operations in 2013-14. It has capacity of 120 tonnes per
day.
KSRM reported book profit of INR1.8 million on net sales of INR704
million for 2014-15 as against book profit of INR1.1 million on
net sales of INR380 million for 2013-14.
KIRTI SOLAR: CRISIL Reaffirms B+ Rating on INR60MM Cash Loan
------------------------------------------------------------
CRISIL's ratings on the bank facilities of Kirti Solar Limited
(KSL) continue to reflect KSL's below-average financial risk
profile and its modest scale of operations. These rating
weaknesses are partially offset by the benefits that KSL derives
from the growth prospects of the solar power industry in India.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 25 CRISIL A4 (Reaffirmed)
Cash Credit 60 CRISIL B+/Stable (Reaffirmed)
Letter of Credit 15 CRISIL A4 (Reaffirmed)
Outlook: Stable
CRISIL believes that KSL will benefit from the growth prospects of
the solar power industry, over the medium term. The outlook may be
revised to 'Positive' if the company achieves sustained and
substantial growth in its scale of operations and profitability,
while it improves its capital structure. Conversely, the outlook
may be revised to 'Negative' in case of a sharp decline in KSL's
profitability or stretch in its working capital cycle, or if it
undertakes any large, debt-funded capital expenditure (capex)
programme, resulting in deterioration in its financial risk
profile.
Update
KSL's revenue increased by 26 per cent to INR269 million in 2014
15 (refers to financial year, April 1 to March 31) compared to
INR212 million in 2013-14. The company's revenue is expected to
maintain its steady growth over the medium term. KSL had a low
operating margin of 2.3 per cent in 2014-15. The company's
financial risk profile is below average, marked by small net worth
of INR 20 million as on March 31, 2015. Also, KSL's gearing was
high for the same period, and its debt protection metrics were
below average for 2014-15. The company's liquidity is marked by
small accruals, moderate bank limit utilisation of 74 per cent
over the 12 months ended April 2015, and absence of any term debt
obligations or debt-funded capex plans.
KSL was incorporated in 2001, and is promoted by Mr. Dhiraj
Bhagchandka and his family members. The company manufactures and
assembles solar power equipment and systems. It also executes
engineering, procuring, and construction projects for government
agencies.
LAGGAR INDUSTRIES: CRISIL Assigns 'B' Rating to INR140MM LT Loan
----------------------------------------------------------------
CRISIL has revoked the suspension of its rating on the long-term
bank facility of Laggar Industries Limited (LIL) and has assigned
its 'CRISIL B/Stable' rating to the long term bank loan facility.
CRISIL had suspended the rating on February 10, 2015, as LIL had
not provided the necessary information for a rating review. The
company has now shared the requisite information, enabling CRISIL
to assign a rating to the company's bank facility.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term 140 CRISIL B/Stable (Assigned;
Bank Loan Facility Suspension revoked)
The rating reflects LIL's weak financial risk profile, marked by
high gearing and weak debt protection metrics. The rating also
factors in the company's exposure to regulatory risks associated
with the manufacture and sale of defence equipment, and its low
profitability because of intense competition in its tender-based
business. These rating weaknesses are partially offset by the
extensive experience of LIL's promoters in steel trading and in
manufacturing of ballistic steel.
Outlook: Stable
CRISIL believes that LIL will continue to benefit over the medium
term from the extensive industry experience of its promoters.
However, the company's financial risk profile is expected to
remain constrained over this period by its low cash accruals. The
outlook may be revised to 'Positive' if there is a significant
increase in LIL's cash accruals most likely through increase in
scale of operations and operating profitability, leading to
improvement in its financial risk profile. Conversely, the outlook
may be revised to 'Negative' in case of a decline in the company's
revenue or cash accruals or if the company undertakes debt-funded
capex, leading to deterioration in its financial risk profile,
particularly its liquidity.
LIL was incorporated in 1990, promoted by Mr. Sandeep Sobti. The
company manufactures and trades in bullet-proof steel which is
used primarily in bullet-proof jackets, patkas, and morchas, and
in armoured vehicles. The company has a rolling mill with
installed capacity of 30,000 tonnes per annum in Jalandhar
(Punjab).
LIL, on a provisional basis, reported a profit after tax (PAT) of
INR5 million on net sales of INR822.69 million for 2014-15 (refers
to financial year, April 1 to March 31); it had reported a PAT of
INR1.33 million on net sales of INR605.5 million for 2013-14.
MADRAS HARD: Ind-Ra Cuts Long-Term Issuer Rating to 'IND B+'
------------------------------------------------------------
India Ratings and Research (Ind-Ra) has downgraded Madras Hard
Tools Pvt Ltd's (MAPL) Long-Term Issuer Rating to 'IND B+' from
'IND BB-'. The Outlook is Stable. The agency has also downgraded
the company's following facilities:
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Long-term loans 32.86 Downgraded to 'IND B+'/Stable
from 'IND BB-'
Fund-based 275.00 Downgraded to 'IND B+'/Stable
working capital /'IND A4' from 'IND 'BB-'/
limits 'IND A4+'
Non-fund-based 10.00 Downgraded to 'IND A4' from
Facility 'IND A4+'
KEY RATING DRIVERS
The downgrade reflects MAPL's tight liquidity position, and
margins and credit metrics deterioration in FY15 because of a fall
in the amount of trade discounts offered by its counterparty. The
company overused its working capital facility thrice during the
six months ended June 2015. Provisional financials for FY15
indicate interest coverage of 1.5x (FY14: 1.8x), net leverage of
8.7x (7x) and EBITDA margins of 4.6% (5.8%).
The ratings are supported by over four-decade-long experience of
MAPL's promoter in the trading business.
RATING SENSITIVITIES
Positive: An improvement in the liquidity position will lead to a
positive rating action.
Negative: A negative rating action could result from further
deterioration in the EBITDA interest coverage ratio.
COMPANY PROFILE
MHPL was incorporated in 1972. The company is an authorised
distributor of steel wire ropes for Usha Martin Ltd ('IND
A+'/Negative). MHPL is also an authorised distributor for eight-
strand mooring ropes for Tuff Ropes Pvt. Ltd. Apart from the
distributorship business, MHPL manufactures slings from steel
ropes and aluminum ferrules. The company has a production unit in
Puduvoil Village. During FY15, the company added a new 5.5mt per
day manufacturing division of pet preforms and bottles. The pet
bottle division has started production from June 2014.
MAHESHWAR MULTITRADE: CARE Assigns B+ Rating to INR9cr LT Loan
--------------------------------------------------------------
CARE assigns 'CARE B+' rating to the bank facilities of Maheshwar
Multitrade Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 9 CARE B+ Assigned
Rating Rationale
The rating assigned to the bank facilities of Maheshwar Multitrade
Private Limited is constrained on account of its small scale and
working capital intensive nature of operations, leveraged capital
structure with weak profitability margin, susceptibility of
margins to fluctuations in raw material prices, exposure to
vagaries of nature and presence in a fragmented industry segment.
The rating however supported by wide experience of the promoters
in the agro processing business, operational and financial
synergies with associate firm Maheshwar OilMill (MOM) and
association with a diversified clientele base.
The ability of the company to increase its scale of operations and
improve profitability margin are key rating sensitivities.
MMPL is a Kolhapur (Maharashtra) based company engaged in the
trading and manufacturing of edible oils, primarily groundnut,
cotton seed and palm. The company was established in November
2010. The company was engaged in trading of edible oil from
January 2010 till January 2015, while manufacturing operations
relating to edible oil began from January 2015, on transfer of
business activities from MOM. MOM, is a partnership firm
established in 1992 and is engaged in the business of trading and
manufacturing of edible oils. MMPL was incorporated by the
management to expand the existing operations of MOM. Although
MOMcontinues to exist, operations of MOMare being transferred to
MMPL.
MMPL has an installed capacity of 50 Metric tonnes per day (MTPD).
The key raw materials include groundnut seeds and cotton seeds,
which are procured from MOM and other suppliers, while the
processed product is sold to domestic oil trading companies. The
operations of MMPL are managed by Mr. Shivanand Banchode (25 %
stake), Mr. Shrikant Banchode (25% stake), Mr. Sudhakar Banchode,
Mr. Ganesh Banchode (25% stake) and Mr. Shashikant Banchode (25%
stake) in the strength of Directors.
In FY15 (Prov.), MMPL earned PAT of INR 0.10 crore on a total
operating income of INR15.15 crore against PAT of INR 0.002
crore on a total operating income of INR4.21 crore in FY14
(Audited).
MANGALAM METALS: ICRA Reaffirms B- Rating on INR12cr Cash Credit
----------------------------------------------------------------
ICRA has reaffirmed the long term rating of [ICRA]B- assigned to
the INR12.0 crore fund based bank limits of Mangalam Metals & Ores
Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based Limits-
Cash Credit 12.0 [ICRA]B- Reaffirmed
The reaffirmation of the rating takes into account MMOL's high
working capital intensity of its operations due to high
receivables that has stretched its liquidity position. ICRA notes
that a significant portion of the receivables has been outstanding
for a long time, and timely recovery of the same would be critical
to ease its liquidity position. The rating also factors in the low
absolute profits attributable to its small scale of operations as
well as low value addition in iron ore trading operations, which
in turn has led to moderate debt coverage indicators as well,
notwithstanding a conservative capital structure of the company.
With the company's operations being limited to Odisha and
neighbouring states, the company remains exposed to geographical
concentration risks, and the cyclicality inherent in the iron ore
and steel industries. Moreover, the diktat regarding mining
operations had adversely impacted the turnover of MMOL in the past
reflecting significant exposure to regulatory risks. However, with
the removal of ban on the mining of iron ore in Odisha, the
turnover witnessed some improvement during FY15.The rating also
takes note of the longstanding experience of the promoters of over
a decade in the iron and steel industry, and the close proximity
of MMOL's operations to iron ore mines and its customer base,
which provides cost advantage in terms of lower freight costs. In
ICRA's opinion, MMOL's ability to manage its working capital
requirements and recover its receivables in a timely manner would
be key rating sensitivities going forward.
Established in the year 2003, Mangalam Metals & Ores Limited
(MMOL) was involved in the crushing of iron ore. However, the
crushing unit has been shutdown since December, 2010 due to lack
of government permissions for operating such units across the
state of Odisha. Thus, the company which had diversified into iron
ore trading from 2007-08 is now focusing only on this segment.
Since FY14, MMOL has also started entering into service contracts
with its clients for providing transportation and monitoring
services for procurement of iron ore.
Recent Results
During FY15, as per the provisional results, MMOL has reported a
PAT of INR0.50 crore on an OI of INR35.87 crore. The company
reported a profit after tax (PAT) of INR0.09 crore on an operating
income (OI) of INR14.86 crore during FY14 as compared to a PAT of
INR0.97 crore on an OI of INR74.72 crore during FY13.
MANISH FLOUR: ICRA Suspends B+ Rating on INR12cr Cash Credit
------------------------------------------------------------
ICRA has suspended the [ICRA]B+ rating assigned to INR12.00 crore
long term fund based cash credit limits and to INR1.00 crore long
term fund based term loan limits of Manish Flour Mills Private
Limited. The suspension follows ICRA's inability to carry out a
rating surveillance in the absence of the requisite information
from the company.
Promoted by Mr. Ratanlal Jain and his son Mr. Manish Jain, Manish
Flour Mills Private Limited is engaged in the milling of wheat
into maida, atta, suji and bran. The company has its registered
office in Opera House, Mumbai and a flour mill in Surat, Gujarat.
MEGHA GRANULES: Ind-Ra Corrects Commentary Published on June 17
---------------------------------------------------------------
This version corrects the commentary published on June 17, 2015,
which incorrectly stated the long-term loans and non-fund-based
working capital limits.
An amended version follows:
India Ratings and Research (Ind-Ra) has affirmed Megha Granules
Private Limited's (MGPL) Long-Term Issuer Rating at 'IND D'. The
agency has also affirmed MGPL's bank loan ratings as follows:
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Long-term loans 654 Affirmed at Long-Term 'IND D'
Fund-based working 268.8 Affirmed at Long-Term 'IND D'
capital limits
Non-fund-based 30.0 Affirmed at Short-Term 'IND D'
working capital limits
KEY RATING DRIVERS
The ratings continue to reflect MGPL's tight liquidity leading to
delays in debt servicing for the 12 months ended May 2015.
RATING SENSITIVITIES
Timely debt servicing and the use of working capital facilities
within limits for three consecutive months will be positive for
the ratings.
COMPANY PROFILE
Assam-based MGPL was incorporated in May 2005 and belongs to the
Agarwal group of Industries. The company manufactures woven sacks,
ferro alloys, etc. It has set up a 13,620mtpa manufacturing unit
of polypropene/high-density polyethylene woven sacks and woven
poly-propene block bottom valve bags at Chaygaon Industrial Growth
Centre, Kamrup (Assam).
MOHANA COTTON: CRISIL Cuts Rating on INR150MM Cash Loan to 'B'
--------------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facilities
of Mohana Cotton Ginning Private Limited (MCG) to 'CRISIL
B/Stable' from 'CRISIL B+/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 150 CRISIL B/Stable (Downgraded
from 'CRISIL B+/Stable')
Term Loan 65 CRISIL B/Stable (Downgraded
from 'CRISIL B+/Stable')
The rating downgrade reflects deterioration in MCG's liquidity,
with a stretch in its working capital cycle resulting in almost
full utilization of its bank limits. CRISIL believes that the
company will need capital infusion from its promoters, or will
have to register sustained improvement in its working capital
cycle, to alleviate the pressure on its liquidity.
MCG's stretched working capital cycle is indicated by the increase
in its gross current assets to around 275 days as on March 31,
2015, from 158 days as on March 31, 2014. The increase was on
account of a longer credit period extended to its customers. The
stretch in the company's working capital cycle resulted in almost
full utilization of its bank limits over the six months ended May
31, 2015.
The rating reflects MCG's below-average financial risk profile,
marked by a small net worth, high gearing, and below-average debt
protection metrics. The rating also factors in the company's
modest scale of operations, the susceptibility of its
profitability margins to volatility in cotton prices, and its
exposure to regulatory changes and intense competition in the
cotton ginning industry. These rating weaknesses are partially
offset by the extensive industry experience of MCG's promoters.
Outlook: Stable
CRISIL believes that MCG will continue to benefit over the medium
term from its promoters' extensive industry experience. The
outlook may be revised to 'Positive' if there is sustained
improvement in the company's working capital cycle or if its
liquidity improves on the back of sizable capital infusion by its
promoters. Conversely, the outlook may be revised to 'Negative' in
case of a steep decline in MCG's profitability margins, or
significant weakening of its liquidity caused most likely by a
further stretch in its working capital cycle.
MCG, formerly known as Mohana Cotton Ginning, was set up in Guntur
district (Andhra Pradesh) in 2010, by Mr. A Subramanyam along with
his friends and relatives. The company gins and presses raw
cotton, and also trades in cotton lint. It derives around 60 per
cent of its revenue from cotton bales, and the balance 40 per cent
from trading in cotton lint. MCG's ginning unit is located in
Guntur district (Andhra Pradesh).
NARESH SINGHAL: CARE Reaffirms B+ Rating on INR2.5cr LT Loan
------------------------------------------------------------
CARE reaffirms the ratings assigned to the bank facilities of
Naresh Singhal & Company.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 2.50 CARE B+ Reaffirmed
Short-term Bank Facilities 4.50 CARE A4 Reaffirmed
Rating Rationale
The ratings assigned to the bank facilities of Naresh Singhal &
Company (NSC) continue to remain constrained by its small scale of
operations and leveraged capital structure. The ratings are
further constrained by customer concentration risk coupled with
concentrated order book and proprietorship nature of constitution
and its presence in the highly fragmented and competitive
industry.
The ratings, however, continue to draw strength from the
experienced proprietor in execution of civil contracts and long
track record of operations of the firm, moderate profitability
margins and operating cycle.
Going forward, NSC's ability to scale-up its operations while
stabilizing its profitability margins and capital structure along
with successful execution of projects within the estimated time
and costs would be the key rating sensitivities.
NSC was established as a proprietorship firm in 1992 by Mr Naresh
Singhal. The firm is engaged in execution of civil contracts, viz,
laying of sewage water pipelines, construction of overhead tanks
and water treatment facilities mainly in the Noida region. The
majority of the contracts are obtained from Public Works
Department (PWD) and Municipal Corporation through competitive
bidding process. Most of the contracts are fixed price contracts
with an execution tenor of 6-18 months.
For FY15 (refers to the period April 1 to March 31), NSC achieved
a total operating income (TOI) of INR18.12 crore with profit after
tax (PAT) of INR1 crore , as against TOI of INR12.10 crore with
PAT of INR0.71 crore in FY14.
NAVA BHARATH: Ind-Ra Assigns IND BB+' to INR55.37MM Bank Loans
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Nava Bharath
Educational Trust's (NBET) INR55.37m bank loans and INR30m fund-
based working capital an 'IND BB+' rating with Stable Outlook.
KEY RATING DRIVERS
The rating is constrained by NBET's limited available funds - cash
and unrestricted investments, providing minimal financial cushion
to cover the financial leverage and operating expenditure.
Available funds (FY14: INR3.59m) covered only 2.52% of total debt
and 4.33% of operating expenditure in FY14.
NBET undertook debt-funded capex of INR235.09m during FY10-FY14
for the construction of schools and hostel. Ind-Ra expects the
liquidity position to improve marginally as institutes are fully
built and in the absence of any major capex in the near term.
The rating reflects the trust's moderately high leveraged capital
structure with debt 2.67x of total capital at FYE14. Also, NBET's
debt burden (debt/current balance before interest and depreciation
(CBBID)) was 4.07x in FY14. Debt increased 23.33% yoy to
INR142.70m in FY14 on capital improvement plans.
The trust's enrolments increased during FY09-FY14 with students'
headcount doubling to 1,152 students in FY14 from 521 in FY09.
However, the faded demand of NBET-run institutes and tough
competition resulted in a decline in student strength to 923 in
FY15. It grew to 1,046 students for FY16. The trust's acceptance
rate was high at around 88% and 86% in FY14 and FY15,
respectively, and capacity use rate was 77% in FY15.
The trust's revenue consists of tuition fee income and income from
hostel, both driven by enrolments. Tuition fee income constituted
averagely 47.27% of the total revenue over FY10-FY14. Other
operating income such as income from the trust's hostel also
provides cushion to the financial quality. Nearly 40% of NBET's
revenue originated from hostel income over FY10-FY14. Other
operating expenditure (average FY10-FY14: 48.85%) accounted for
most of the total expenditure followed by staff costs (21.92%) and
depreciation of 16.62%. The trust booked a surplus of INR4.31m in
FY14 as against INR11.74m in FY13.
NBET posted a comfortable debt service coverage ratio during the
five years ended in FY14. The ratio has been improving since FY10;
however, it marginally declined to 1.60x in FY13 and 1.20x in FY14
on increased debt service obligations. Debt service in relation to
the total income increased to 24.44% and 24.64% in FY13 and FY14,
respectively, from 18.46% in FY12. The trust's cash flow from
operations to cover debt service was 2.04x in FY14 (FY13: 2.11x).
RATING SENSITIVITIES
Positive: A significant increase in the student enrolment leading
to improvements in the operational and financial performance and
liquidity ratios could trigger a positive rating action.
Negative: Any unexpected fall in the student enrolment in
conjunction with a quantum jump in the debt resulting in weak
coverage ratios could trigger a negative rating action.
COMPANY PROFILE
NBET, established in 2007, is registered as a public charitable
trust under the Indian Trusts Act 1882. Its registered office and
schools are situated in Annur, Coimbatore. NBET operates two K-12
schools including a residential school in Coimbatore under its
management.
NEWTON ENGINEERING: ICRA Suspends D Rating on INR14cr Loan
----------------------------------------------------------
ICRA has suspended [ICRA]D rating assigned to the INR4.00 crore
cash credit facility and [ICRA]D rating assigned to the INR4.00
crore Letter of credit facility and the INR14.00 crore Bank
Guarantee facility of Newton Engineering and Chemicals Limited.
The suspension follows ICRA's inability to carry out a rating
surveillance in the absence of the requisite information from the
company.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 4.00 [ICRA]D Suspended
Letter of Credit
Facility 4.00 [ICRA]D Suspended
Bank Guarantee
Facility 14.00 [ICRA]D Suspended
Newton Engineering & Chemicals Limited (NECL) was incorporated in
1996 as a result of amalgamation of Hitech Orgochem Limited (HOL)
and Newton Engineering and Construction Company Limited (NECCL).
NECCL was established in 1979 as a Proprietorship firm by the name
of Newton Engineering and Construction Company. The same was
converted in to Private Limited Company in 1982 (15/04/1982) with
Mr. N. Gopinath as its Managing Director. HOL was incorporated in
the year 1992 in the State of Gujarat with an object to
manufacture chemicals, fine chemicals. Currently, NECL is managed
by Mr. N. Gopinath and his wife Mrs. N. Vijayalakshmi.
NECL has three divisions: Project Division, Manufacturing Division
and Chemicals Division. The Project Division undertakes various
types of projects including lump sum turnkey projects, shut down
maintenance / plant revamping, installation of tanks (with cone or
floating roof), piping projects (unit, offsite, cross country and
underground piping) and machinery & equipment erection. The
Manufacturing Division is located at Vadodara and is engaged in
manufacturing of unit operating equipments like heat exchangers,
pressure vessels, tall columns and various other fabricated items.
This division is certified by KPMG for ISO 9002. The Chemical
Division currently remains non operational.
NORTH EASTERN: CRISIL Reaffirms B- Rating on INR265MM Term Loan
---------------------------------------------------------------
CRISIL's rating on the bank facility of North Eastern Knowledge
Foundation (NEKF; a part of the Kaziranga group) continues to
reflect the Kaziranga group's below-average financial risk
profile, marked by high gearing, small net worth, and weak debt
protection metrics.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 265 CRISIL B-/Stable (Reaffirmed)
The rating also factors in the limited track record of the
Kaziranga University promoted by the group and the intense
regulation in the education segment in India. These rating
weaknesses are, however, mitigated by healthy demand for education
in North-East India.
For arriving at the rating, CRISIL has combined the business and
financial risk profiles of NEKF and North Eastern Educare &
Research Pvt Ltd (NEER). This is because the entities, together
referred to as the Kaziranga group, have a common management team
and operational linkages.
Outlook: Stable
CRISIL believes that the Kaziranga group will continue to benefit
from the promoters' financial support; however, the group's
liquidity will remain constrained by low cash accruals in its
initial stage of operations. The outlook will be revised to
'Positive' if the group's liquidity significantly improves, driven
by an increase in net cash accruals and controlled capital
investments or sizeable capital infusion by the promoters.
Conversely, the outlook may be revised to 'Negative' if the group
records a slower-than-anticipated ramp up in student intake
resulting in low cash accruals, adversely affecting its liquidity.
The outlook may also be revised to 'Negative' if the group's
capital structure weakens because of a large debt-funded capital
expenditure (capex) programme.
The Kaziranga group is promoted by Assam-based Khetan group and
West Bengal-based Goel group. In 2012, the promoter group
registered NEKF under the Indian Trust Act. The trust founded the
Kaziranga University, a private university approved by the All
India Council for Technical Education. The university offers
graduate and postgraduate educational programmes.
The promoter group also established NEER in 2012 to provide
boarding facilities to students enrolled in Kaziranga University.
The facilities include accommodation, cafeteria, pharmacy, and
transport.
PIONEER AGRO: CRISIL Cuts Rating on INR62.5MM Cash Loan to B-
-------------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facilities
of Pioneer Agro Extracts Limited (PAEL) to 'CRISIL B-/Stable' from
'CRISIL B/Stable', while reaffirming its rating on the company's
short-term facilities at 'CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 62.5 CRISIL B-/Stable (Downgraded
from 'CRISIL B/Stable')
Letter of Credit 50 CRISIL A4 (Reaffirmed)
Proposed Long Term 10 CRISIL B-/Stable (Downgraded
Bank Loan Facility from 'CRISIL B/Stable')
The downgrade in rating reflects CRISIL's belief that PAEL's
business and financial risk profiles will remain weak over the
medium term. The company continued to report operating losses in
2014-15 (refers to financial year, April 1 to March 31), in line
with 2013-14. Sustained losses have resulted in erosion in PAEL's
net worth and weak financial risk profile. The deterioration in
business performance was mainly due to intense competition from
other major edible oil players, which have economies of scale and
cost advantage. Consequently, PAEL suspended its manufacturing
operations in 2014-15 and is currently engaged in only oil-trading
activities. CRISIL believes that the increase in PAEL's scale of
operations as well as improvement in operating profitability will
remain key rating sensitivity factors over the medium term.
The ratings reflect PAEL's weak financial risk profile, marked by
modest debt protection metrics and declining net worth, and modest
scale of operations in the highly fragmented edible oil industry.
These rating weaknesses are partially offset by the extensive
experience of PAEL's promoters.
Outlook: Stable
CRISIL believes that PAEL's credit profile will remain weak over
the medium term on account of its modest scale of operations and
weak financial risk profile. The outlook may be revised to
'Positive' if the company reports significant growth in its
revenue and profitability, along with improvement in the financial
risk profile. Conversely, the outlook may be revised to 'Negative'
if PAEL's financial risk profile weakens owing to further
deterioration in demand for its products, or decline in
profitability, or increase in working capital requirements.
Incorporated in 1993, PAEL is owned and managed by Mr. Jagat
Aggarwal. The company used to manufacture vanaspati (50 tonnes per
day [tpd]) and refined oil (90 tpd) at its facility in Pathankot
(Punjab). With effect from June 30, 2015, the company has
suspended its manufacturing operations and is conducting only
trading in oil. The company is listed on the Bombay Stock
Exchange.
RAJASTHAN ISPAT: ICRA Suspends B+ Rating on INR25cr Loan
--------------------------------------------------------
ICRA has suspended [ICRA]B+ rating assigned to the INR25.00 crore
fund based facilities of Rajasthan Ispat Udyog. The suspension
follows ICRA's inability to carry out a rating surveillance in the
absence of the requisite information from the company.
SAHANA JEWELLERY: CARE Assigns B+ Rating to INR14cr LT Loan
-----------------------------------------------------------
CARE assigns 'CARE B+' ratings to the bank facilities of Sahana
Jewellery Exports Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 14 CARE B+ Assigned
Rating Rationale
The rating assigned to the bank facilities of Sahana Jewellery
Exports Private Limited (SJEPL) is constrained by the fluctuating
income from operations over the period, thin profit margin and
cash accruals and leveraged capital structure.
The rating is further constrained by the susceptibility of
profitability to the volatility in gold prices, forex fluctuation
risk, intense competition, dependence on skilled labour and
susceptibility of the business to the economic cycles and trade
policies of the government.
The ratings, however, derive comfort from the long experience of
the promoter of over four decades, long operational track record
of the company of two decades, established relationship with
customers and suppliers and favourable demand outlook for
jewellery given the traditional preference for the same.
Going forward, ability of the company to effectively manage the
forex risk and raw material price risk, prudently manage its
working capital requirements and its ability to scale up the
operations would be the key rating sensitivities.
Sahana Jewellery Exports Private Limited (SJEPL) was incorporated
in 1993 by Mr D R Ragunath and his wife Mrs D R Anandha Lakshmi to
manufacture gold jewellery. SJEPL purchases
gold/platinum/silver/diamond from wholesalers/dealers, it
purchases gold also from banks (Bank of Croatia) based on the
orders from customers. SJEPL has its own manufacturing facility
with 20 gold smiths to manufacture gold jewellery as per the
design specification of customers. The company also gets a portion
of finished jewellery done through job work. The customers are
gold jewellery retail outlets spread across Tamil Nadu, Kerala and
UAE.
SJEPL has achieved a PAT of INR0.46 crore on a total operating
income of INR119.54 crore in FY14 (refers to the period April 1 to
March 31) as compared with a PAT of INR0.86 crore on a total
operating income of INR127.39 crore in FY13.
SAI SRINIVASA: CRISIL Ups Rating on INR67MM Cash Loan to 'B'
------------------------------------------------------------
CRISIL has upgraded its rating on the long-term bank facilities of
Sai Srinivasa Ginning Mill (SSGM) to 'CRISIL B/Stable' from
'CRISIL B-/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 67 CRISIL B/Stable (Upgraded
from 'CRISIL B-/Stable')
Term Loan 23 CRISIL B/Stable (Upgraded
from 'CRISIL B-/Stable')
The rating upgrade reflects CRISIL's belief that SSGM will
maintain its improved net cash accruals over the medium term,
leading to adequate liquidity vis-a-vis its maturing term debt
obligations. In the absence of any major capital expenditure plan,
the firm's cash accruals will support its working capital
requirements, thus improving its financial risk profile over this
period.
The rating reflects SSGM's modest scale of operations and below-
average financial risk profile, marked by high gearing, and modest
debt protection metrics and net worth. These rating weaknesses are
partially offset by the established relationship of SSGM's
partners with cotton farmers in and around Warangal (Telangana),
and its efficient working capital management.
Outlook: Stable
CRISIL believes that SSGM will continue to benefit over the medium
term from the established relationship of its partners with cotton
farmers in and around Warangal. The outlook may be revised to
'Positive' if the firm achieves substantial revenue growth while
improving its profitability and capital structure. Conversely, the
outlook may be revised to 'Negative' if SSGM reports lower-than-
expected revenue or profitability or faces a significant stretch
in its working capital cycle, thereby adversely impacting its
financial risk profile.
Established as a partnership firm in February 2011 and based in
Warangal (Telangana), SSGM is promoted by Mr. Sanjeeva Reddy and
his family. It is engaged in the ginning and pressing of cotton.
The firm commenced ginning operations in January 2012.
SSGM reported a profit after tax (PAT) of INR5 million on net
sales of INR691 million for 2013-14 (refers to financial year,
April 1 to March 31), against a PAT of INR3 million on net sales
of INR670 million for 2012-13.
SDR POLYMERS: CRISIL Reaffirms 'D' Rating on INR32.5MM Loan
-----------------------------------------------------------
CRISIL's ratings on the bank facilities of SDR Polymers Pvt Ltd
(SDR) continue to reflect instances of delay by SDR in servicing
its debt; the delays have been caused by the company's weak
liquidity, owing to its working-capital-intensive nature of
operations.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bill Discounting 15 CRISIL D (Reaffirmed)
Cash Credit 32.5 CRISIL D (Reaffirmed)
Letter of Credit 29.5 CRISIL D (Reaffirmed)
Long Term Loan 24 CRISIL D (Reaffirmed)
SDR also has a weak financial risk profile, marked by high gearing
and a small net worth. However, the company benefits from its
promoters' extensive entrepreneurial experience.
Update
SDR continues to delay its debt servicing owing to its weak
liquidity. This is primarily on account of the working-capital-
intensive nature of its operations CRISIL believes that SDR's
liquidity will remain weak over the medium term on account of its
working-capital-intensive operations.
SDR, incorporated in May 2010, is promoted by Mr. S D R Vijay
Seelan and his wife, Ms. Reena Seelan. It manufactures high-
density polyethylene and polypropylene circular woven sacks and
flexible intermediate bulk carrier bags.
SHREE SIDDHI: CARE Reaffirms 'B' Rating on INR10cr LT Loan
----------------------------------------------------------
CARE reaffirms the rating assigned to the bank facilities of
Shree Siddhi Vinayak Creations Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 10 CARE B Rating
suspension revoked
and reaffirmed at
CARE B
Rating Rationale
The rating assigned to the bank facilities of Shree Siddhi Vinayak
Creations Private Limited (SSV) continues to be constrained by its
modest scale of operations and weak financial risk profile as
reflected by its low profitability margins, highly leveraged
capital structure and weak coverage indicators. The rating is
further constrained by its working capital-intensive nature of
operations and its presence in a highly fragmented and competitive
textiles industry.
The rating continues to draw strength from the experienced
promoters and growing scale of operations. Going forward, the
ability of the company to profitably scale up its operations with
an improvement in the capital structure while managing its working
capital requirements would be the key rating sensitivities.
Promoted by Mr Anupam Kapoor and Mr Anubhav Kapoor, SSPL was
incorporated in 1999. The company is engaged in the wholesale
trading of ladies garment, mainly sari and suits. The company is
carrying out its business operations from Bareilly (Uttar
Pradesh). SSPL procures mainly from garment manufactures of
Gujarat, Maharashtra, and also through agents. The company caters
to the garment retailers mainly in the regions of Uttarakhand and
Uttar Pradesh.
SSV reported a PAT of INR0.08 crore and PBILDT of INR2.03 crore on
a total income of INR63.58 crore in FY14 (refers to the period
April 1 to March 31). SSSV has achieved a total operating income
of INR64.87 crore and PAT of INR0.14 crore in FY15.
SHRINI SOFTEX: Ind-Ra Assigns 'IND BB' Long-Term Issuer Rating
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Shrini Softex
India Ltd (SSIL) a Long-Term Issuer Rating of 'IND BB'. The
Outlook is Stable. The agency has also assigned the company's bank
loans the following ratings:
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Long-term loans 122 'IND BB'/Stable
Fund-based facilities 120 'IND BB'/Stable/'IND A4+'
Non-fund-based 20 'IND A4+'
facilities
KEY RATING DRIVERS
The ratings reflect SSIL's moderate credit metrics, volatile
profitability and small scale of operations. Unaudited FY15
financials indicate net leverage of 3.6x (FY14: 3.7x) and EBITDA
interest cover of 2.3x (2.7x). EBITDA margins fluctuated between
11.4%-18.2% over FY12-FY15 due to raw material price volatility.
Revenue grew at a CAGR of 41.7% over FY12-FY15 to INR586m. The
company is exposed to the risks associated with the agricultural
commodity based manufacturing business.
The ratings are, however, supported by the promoter's two-decade-
long experience in the cotton yarn manufacturing business.
Moreover, liquidity is comfortable with 71.5% average fund-based
limits utilisation for the 12 months ended July 2015.
RATING SENSITIVITIES
Positive: A substantial improvement in the top-line along with a
rise in the EBITDA margins, leading to a sustained improvement in
the credit metrics could be positive for the ratings.
Negative: A substantial decline in the profitability leading to
sustained deterioration in the credit metrics could be negative
for the ratings.
COMPANY PROFILE
SSIL started commercials operations in 2012. It has 12,000
spindles capacity with latest state-of-the-art machinery. The
company manufactures ring spun combed yarn, compact and double
yarn in the count ranges of Ne 30/1 to Ne 50/1.
SHYAM STEELS: CRISIL Lowers Rating on INR38MM Cash Loan to B-
-------------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facilities
of Shyam Steels Private Limited (SSPL) to 'CRISIL B-/Stable' from
'CRISIL B/Stable' and has reassigned its 'CRISIL A4' rating on the
company's short-term bank facility.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 38 CRISIL B-/Stable (Downgraded
from 'CRISIL B/Stable')
Letter of Credit 34.5 CRISIL A4 (Reassigned)
Term Loan 20 CRISIL B-/Stable (Downgraded
from 'CRISIL B/Stable')
The rating downgrade reflects CRISIL's belief that SSPL's business
and financial risk profiles will remain under pressure over the
medium term on account of the company's stretched working capital
cycle. The company's gross current assets increased to more than
500 days as on March 31, 2015, on account of stretched receivables
and large inventory. Consequently, SSPL's bank limits are fully
utilised, leaving no headroom to absorb any increase in working
capital requirements. CRISIL believes that SSPL's liquidity will
remain stretched on account of large working capital requirements
over the medium term.
The ratings also reflect SSPL's weak financial risk profile marked
by high gearing, small net worth, weak debt protection metrics and
working-capital-intensive operations. These rating weaknesses are
partially offset by the extensive experience of SSPL's promoters
in the capital goods industry.
Outlook: Stable
CRISIL believes that SSPL will continue to benefit over the medium
term from its promoters' extensive experience in the capital goods
industry. The outlook may be revised to 'Positive' if the
company's capital structure strengthens, either through infusion
of capital or increased accretion to reserves with improvement in
its scale of operations and profitability. Conversely, the outlook
may be revised to 'Negative' if SSPL's financial risk profile
deteriorates, most likely because of weakening of working capital
management or large debt-funded capital expenditure, or if the
company posts low cash accruals leading to weak liquidity.
Set up as a partnership firm named Shyam Steels in 1984 and
reconstituted as a private limited company with the current name
in 1987, SSPL fabricates and sells temporary power supply
solutions for industrial use. The company is based in Bhavnagar
(Gujarat) and is promoted by Mr. Shyam Bhushan Khillan and Ms.
Shashi Shyambhushan Khillan.
SLC PROJECTS: CRISIL Reaffirms B+ Rating on INR180MM Cash Loan
--------------------------------------------------------------
CRISIL's ratings on the bank facilities of SLC Projects Pvt Ltd
(SLCPL) continue to reflect SLCPL's working-capital-intensive
operations and its below-average financial risk profile, with high
gearing. These weaknesses are partially offset by the extensive
industry experience of SLCPL's promoters in the construction
industry and its established relationships with its customers and
suppliers.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 120 CRISIL A4 (Reaffirmed)
Cash Credit 180 CRISIL B+/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that SLCPL will benefit, over the medium term,
from its promoters' extensive industry experience. The outlook may
be revised to 'Positive', if SLCPL's working capital management
improves or there is a significant increase in its scale of
operations and operating profitability, improving its financial
risk profile. Conversely, the outlook may be revised to
'Negative', if SLCPL undertakes any significant debt-funded
capital expenditure or if its revenue and operating profitability
decline or if its working capital cycle elongates, weakening its
financial profile.
Set up as a partnership entity in 1974 and later incorporated as a
private-limited company in 2004, SLCPL is promoted by Mr. P
Subbaraju. The company undertakes construction, electrical and
mechanical works for government defense-related projects.
For 2014-15 (refers to financial year, April 1 to March 31), SLCPL
reported provisional profit after tax (PAT) of INR6.78 million on
total revenue of INR1.09 billion against PAT of INR5.69 million on
total revenue of INR1.10 billion for 2013-14.
SOMESHWAR ORGANISORS: CRISIL Rates INR230MM Term Loan at B+
-----------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-term
bank facility of Someshwar Organisors (SO).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 230 CRISIL B+/Stable
The rating factors in the firm's exposure to geographical
concentration in its revenue profile and susceptibility to
inherent risks and cyclicality in the real estate industry. These
rating weaknesses are partially offset by the extensive industry
experience of SO's promoters and their moderate track record in
Surat (Gujarat).
Outlook: Stable
CRISIL believes that SO will benefit over the medium term from its
promoters' extensive experience in the real estate sector and
moderate market position in Surat. The outlook may be revised to
'Positive' if the firm records better-than-expected booking of
units at its ongoing project, along with receipt of customer
advances, resulting in sizeable cash inflows. Conversely, the
outlook may be revised to 'Negative' if SO records a substantial
decline in its cash accruals because of reduced demand in Surat's
real estate sector, or if its promoters withdraw sizeable capital
from the firm, or if it incurs time or cost overruns in project
execution.
SO, set up in 2014, undertakes real estate development in Surat.
At present, the firm is executing one project in Surat. SO is
managed by partners Mr. Satyanarayan Rathi and his son, Mr.
Abhishek Rathi.
SONEX TV: CRISIL Reaffirms 'B' Rating on INR110MM Cash Loan
-----------------------------------------------------------
CRISIL's ratings on the bank facilities of Sonex TV Appliances Pvt
Ltd (STAPL) continue to reflect STAPL's below-average financial
risk profile, marked by small net worth, high total outside
liabilities to tangible net worth ratio, and below-average debt
protection metrics.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 30 CRISIL A4 (Reaffirmed)
Cash Credit 110 CRISIL B/Stable (Reaffirmed)
Letter of Credit 35 CRISIL A4 (Reaffirmed)
Proposed Long Term
Bank Loan Facility 25 CRISIL B/Stable (Reaffirmed)
The ratings also factor in STAPL's modest scale of operations and
exposure to intense competition in the consumer electronics
industry, resulting in low profitability margins. These rating
weaknesses are partially offset by the extensive experience of
STAPL's promoters in the consumer electronics distributorship
business.
Outlook: Stable
CRISIL believes that STAPL will continue to benefit over the
medium term from its promoters' extensive industry experience and
its established relationships with customers. The outlook may be
revised to 'Positive' in case of increase in the company's scale
of operations and profitability, along with improvement in its
capital structure, resulting in significantly better financial
risk profile. Conversely, the outlook may be revised to Negative'
in case of steep decline in STAPL's profitability margins or
significant deterioration in its capital structure caused most
likely by a stretch in its working capital cycle.
STAPL was established as a partnership firm in 1992 in Kolkata;
the firm was reconstituted as a private limited company in 2000.
STAPL distributes various consumer electronic products in West
Bengal. Its promoters, Mr. Arun Poddar and Mr. Chandra Lal
Chowdhury, manage its day-to-day operations.
SRI DHARMA: CRISIL Reaffirms 'B' Rating on INR37.5MM Cash Loan
--------------------------------------------------------------
CRISIL's ratings on the bank facilities of Sri Dharma Spinners Pvt
Ltd continue to reflect Sri Dharma's small scale of operations in
the fragmented cotton yarn spinning industry and regional
concentration in its revenue profile.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 3 CRISIL A4 (Reaffirmed)
Cash Credit 37.5 CRISIL B/Stable (Reaffirmed)
Letter of Credit 10 CRISIL A4 (Reaffirmed)
Proposed Long Term
Bank Loan Facility 3.8 CRISIL B/Stable (Reaffirmed)
Term Loan 12.5 CRISIL B/Stable (Reaffirmed)
The ratings also factor in the susceptibility of the company's
margins to volatility in input prices. These rating weaknesses are
partially offset by the extensive industry experience of Sri
Dharma's promoters.
Outlook: Stable
CRISIL believes that Sri Dharma will continue to benefit over the
medium term from its promoters' extensive industry experience. The
outlook may be revised to 'Positive' if Sri Dharma reports higher
revenue and profitability along with improvement in its working
capital management leading to improved liquidity. Conversely, the
outlook may be revised to 'Negative' if the company's business
performance weakens, constraining its financial risk profile,
particularly its liquidity.
Update
Sri Dharma's revenues were estimated at around INR148 million for
2014-15 (refers to financial year, April 1 to March 31), a year-
on-year growth of about 4.6 per cent. The company's operating
margin remained stable at around 12.4 per cent in 2014-15
supported by established customer relationship. CRISIL believes
that Sri Dharma's business risk profile will benefit from the
extensive industry experience of the promoters over the medium
term.
Sri Dharma's financial risk profile is average marked by modest
net worth of INR40.2 million as on March 31, 2015. The company's
gearing is estimated to be moderate at around 1.05 times as on the
same date. The debt protection metrics are average marked by
estimated interest coverage of around 2.50 times and net cash
accruals to total debt ratio of around 23 percent for 2014-15.
CRISIL believes that Sri Dharma's financial risk profile will
remain average over the medium term marked by limited operating
profitability.
Sri Dharma's liquidity is stretched marked by high utilisation of
bank limits. The bank lines have been highly utilised at around 95
percent for the 12 month period through March 2015 owing to
working capital intensive operations. The company is expected to
generate cash accruals of INR12.4 million to INR13.8 million per
annum, sufficient to meet annual debt obligations of INR6.4
million to INR7.2 million, over the medium term. The company's
liquidity is supported by unsecured loans from promoters, the
balance of which was around INR4.8 million as on March 31, 2015.
Sri Dharma was incorporated in June 1999. The company's spinning
unit, in Rajapalyam (Tamil Nadu), started operations in July 2001.
T. KANAGARAJ: CRISIL Assigns 'B' Rating to INR50MM Cash Loan
------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable/CRISIL A4' ratings to the
bank facilities of T. Kanagaraj (TK).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 3.3 CRISIL A4
Cash Credit 50.0 CRISIL B/Stable
The ratings reflect TK's below-average financial risk profile,
marked by weak capital structure and debt protection metrics, its
modest scale of operations with geographical concentration risks
in its revenue profile, and exposure to risks related to tender-
based operations in an intensely competitive civil construction
segment. These rating weaknesses are partially offset by the
extensive experience of TK's proprietor in the civil construction
industry.
Outlook: Stable
CRISIL believes that TK will continue to benefit over the medium
term from its proprietor's extensive industry experience. The
outlook may be revised to 'Positive' in case of significant
improvement in the firm's scale of operations and profitability,
leading to improvement in its financial risk profile. Conversely,
the outlook may be revised to 'Negative' if TK's working capital
management weakens or if the firm undertakes a large debt-funded
capital expenditure programme, resulting in weakening of its
capital structure and liquidity.
TK was established in 1998 as a proprietorship by Mr. T Kanagaraj.
The firm undertakes civil construction works in Palani (Tamil Nadu
[TN]), and functions primarily as a contractor for TN's Public
Works Department. TK lays and repairs roads.
TARAWADE LOGISTICS: CRISIL Reaffirms B+ Rating on INR10MM Loan
--------------------------------------------------------------
CRISIL's ratings on the bank facilities of Tarawade Logistics
Private Limited (TLPL) continue to reflect TLPL's below-average
financial risk profile marked by small net worth and modest scale
of operations with high customer concentration in revenue profile.
These rating weaknesses are partially offset by the extensive
industry experience of TLPL's promoters and its established
relationship with customers.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 50 CRISIL A4 (Reaffirmed)
Cash Credit 10 CRISIL B+/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that TLPL will continue to benefit over the medium
term from its promoters' extensive industry experience and its
established relationship with customers. The outlook may be
revised to 'Positive' in case of significantly higher cash
accruals or substantial equity infusion by promoters, along with
efficient working capital management. Conversely, the outlook may
be revised to 'Negative' in case of weakening of liquidity, driven
by low cash accruals or large working capital requirements, or any
large financial exposure to group entities.
Update
TLPL`s revenue declined by around 20 per cent year-on-year to
INR40 million in 2014-15 (refers to financial year, April 1 to
March 31) affected by the discontinuation of one of the customers
and weaker demand from its principal customer. However, the
company got renewal of its 7-year contract with its principal
customer from 2014-15, which provides stability in revenue over
the medium term. TLPL's operating margin has been moderate at
around 14 per cent for 2014-15, in line with earlier years, and
any significant growth in scale of operation is expected to
improve its operating profitability. Its`s working capital cycle
improved significantly, driven by improvement in debtors to around
125 days in 2014-15 from 354 days in 2013-14. Better realisation
from debtors, which is likely to be sustainable, will lead to
working capital cycle remaining moderately stretched over the
medium term. The company's financial risk profile has been below-
average with modest net worth of around INR13 million as on March
31, 2015; however, the gearing is expected to remain comfortable
at around 1 time over the medium term. The company's liquidity is
constrained by high bank limit utilisation of more than 95 per
cent for the 12 months ended March 31, 2015. However, the
liquidity is supported by absence of any significant capital
expenditure plans in the near term and expected annual cash
accruals of around INR4 million, against which it has a annual
term debt repayment obligations of around INR1 million.
Established in 2009, TLPL is engaged in material handling and
transportation. The company is headquartered in Pune and is owned
and managed by Mr. P D Tarawade and his family. It was formed to
take over the business of proprietorship concern M/s PD Tarawade,
which was engaged in the same business.
VEERANARAYANA METAL: CRISIL Reaffirms B+ Rating on INR52MM Loan
---------------------------------------------------------------
CRISIL's ratings on the bank facilities of Veeranarayana Metal
Alloys Private Limited (VMAPL; part of Veeranarayana group)
continues to reflect below average financial risk profile marked
by modest net worth, high gearing and weak debt protection
metrics. These rating weaknesses are partially offset by its
promoters' extensive industry experience and their established
track record.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 5 CRISIL A4 (Reaffirmed)
Cash Credit 52 CRISIL B+/Stable (Reaffirmed)
Letter of Credit 30 CRISIL A4 (Reaffirmed)
CRISIL has combined the business and financial risk profiles of
VMAPL and Mekala Metal Works Private Limited (MMWPL), together
referred to as Veeranarayana group. This is because both the
entities are in the same line of business and have fungible
finances, along with common management.
Outlook: Stable
CRISIL believes that Veeranarayana group will continue to benefit
over the medium term from its promoters' extensive industry
experience and its established track record. The outlook may be
revised to 'Positive' if the company increases its scale of
operations and operating profitability on a sustained basis
leading to an improvement in its financial risk profile.
Conversely, the outlook may be revised to 'Negative', in case of
deterioration in the group's liquidity profile due to decline in
the cash generation or stretch in the working capital cycle or a
large debt funded capital expenditure.
Established in 1990 as a private limited company, MMWPL
manufactures pure lead ingots. The company is promoted and managed
by Mr. K Rajendra Chettiar and his son Mr. K R Mohan Kumar.
Established in 1990 as a private limited company, VMAPL also
manufactures pure lead ingots. The company is owned by the same
promoters.
=========
J A P A N
=========
TOSHIBA CORP: U.S. Investors File Class Suit for Stock Losses
--------------------------------------------------------------
Daisuke Igarashi at The Asahi Shimbun reports that investors in
the United States filed a class action suit in California against
Toshiba Corp. for stock losses resulting from the accounting
fiasco at the Japanese electronics giant.
According to the written complaint to the federal court released
by the New York-based law firm representing the investors, Toshiba
released fraudulent reports on its business results and financial
situations between May 8, 2012, and May 7, the report relates.
Asahi Shimbun says the plaintiffs contend that the Toshiba shares
they acquired were "artificially inflated." They are demanding
compensation for significant damages that occurred when the stock
prices plummeted after the company announced May 8 that a third-
party panel will be investigating accounting irregularities,
according to the report.
According to the panel's investigation, profits were inflated at
the behest of Toshiba executives between April 2008 and December
2014. The company padded its profits by JPY151.8 billion ($1.22
billion), Asahi Shimbun discloses.
The report says the defendants include Toshiba's former President
Hisao Tanaka and former Vice Chairman Norio Sasaki, both of whom
resigned July 21.
The plaintiffs are inviting other investors in the action, adds
Asahi Shimbun.
As reported in the Troubled Company Reporter-Asia Pacific on
July 22, 2015, Bloomberg News said Toshiba Corp. President Hisao
Tanaka and two other executives quit to take responsibility for a
$1.2 billion accounting scandal that caused the company to restate
earnings for more than six years.
Norio Sasaki, the vice chairman, and Atsutoshi Nishida, a former
president who was serving as adviser, also resigned, the Tokyo-
based company said July 21, more than two months after announcing
it was investigating possible accounting irregularities, according
to Bloomberg. The company said earlier it would correct earnings
by at least JPY152 billion, based on the results of a third-party
investigation of its books, Bloomberg related.
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.
===============
M A L A Y S I A
===============
1MALAYSIA DEVELOPMENT: Despatch Clerk Held in 1MDB probe
---------------------------------------------------------
The Star reports that a despatch clerk is the latest person to be
nabbed in connection with the 1Malaysia Development Bhd (1MDB)
scandal.
Malaysian Anti-Corruption Commission (MACC) officers arrested the
27-year-old man at his home in Bentong on July 25. He was brought
to a magistrate's court on July 26, The Star says.
Magistrate Nik Isfahanie Tasnim Ab Rahman allowed for a four-day
remand, the report relates.
The Star relates that MACC deputy public prosecutor Ahmad Sazilee
Abdul Khairi had initially requested for seven days.
According to the report, the despatch clerk is being investigated
under Section 16(a) on bribery of the MACC Act.
The Star notes that a special task force investigating 1MDB has
begun a series of arrests since July 21 with the despatch clerk
becoming the fifth person sought to help in the probe.
The despatch clerk, who works in Kuala Lumpur, is believed to be
linked to the third person who was remanded -- a 28-year-old
business owner who was hauled up on July 24, says The Star.
Two of those arrested have been released on bail, the report says.
A 39-year-old executive director of a construction firm and a 54-
year-old managing director from a 1MDB-linked company were freed
on bail on July 24 and July 25. They were nabbed on July 21 and
July 22.
Still under MACC's custody is the 28-year-old business owner and a
48-year-old Datuk, who is the managing director of the same
construction firm mentioned, according to the report.
The Star says the 28-year-old business owner's remand expires on
July 27 but the MACC could not confirm whether they would seek to
extend his remand or release him.
An MACC spokesman said those remanded were to assist the task
force in its investigation on SRC International Sdn Bhd, the
report relates.
The Star reports that The Wall Street Journal had alleged, among
others, that some money transferred to Prime Minister Datuk Seri
Najib Tun Razak's personal account came from SRC International, an
energy company originally controlled by 1MDB.
The duty of the special task force is to probe the financial
affairs of the debt-ridden 1MDB, the report adds.
As reported in the Troubled Company Reporter-Asia Pacific on
July 23, 2015, Reuters said Singapore Police Force has frozen two
bank accounts to help with an investigation in to Malaysia's
troubled state-owned investment fund 1Malaysia Development Bhd
(1MDB), which is being probed by authorities in Malaysia for
financial mismanagement and graft. Reuters said the freezing of
the Singapore bank accounts follows a similar move in Malaysia
where a task force investigating 1MDB said earlier this month that
it had frozen half a dozen bank accounts following a media report
that nearly $700 million had been transferred to an account of
Malaysia's Prime Minister Najib Razak.
The Wall Street Journal reported on July 3 that investigators
looking into 1MDB had traced close to US$700 million of deposits
moving through Falcon Bank in Singapore into personal bank
accounts in Malaysia belonging to Najib, Reuters related.
Kuala Lumpur-based 1Malaysia Development Bhd (1MDB) operates as a
government agency. The Company offers financial assistance,
analysis, and advice through investors, corporations, and
consultants to startups and growth companies. 1MDB focuses on
investments with strategic value and high multiplier effects on
the economy, particularly in energy, real estate, tourism, and
agribusiness.
====================
N E W Z E A L A N D
====================
ARENA CAPITAL: Placed Into Liquidation
--------------------------------------
Cliff Sanderson at Dissolve.com.au reports that Arena Capital
Limited has fallen into liquidation. Neale Jackson and Grant
Graham from KordaMentha have been appointed liquidators of the
company, the report says.
The Forex company is said to owe its 1,100 clients around NZ$7
million (US$4.6 million). However, the company's bank account
reportedly holds just NZ$728,000, Dissolve.com.au says.
According to the report, four vehicles of the company are
currently under the possession of the liquidators who are pursuing
a number of other minor possible assets of the company.
Arena Capital Limited, trading as Blackfort FX, is a Christchurch-
based investment company. Grant Robert Graham and Neale Jackson
were appointed Joint and Several Receivers and Managers of the
assets and undertaking of Arena Capital Limited, trading as
Blackfort FX, on May 27, 2015.
CAPITAL + MERCHANT: FMA Civil Proceedings Discontinued
------------------------------------------------------
The Financial Markets Authority (FMA) has discontinued its civil
proceedings against the directors of Capital + Merchant Finance
Limited (CMF).
In 2009, the FMA's predecessor, the Securities Commission, laid
criminal charges against five directors of CMF, Neal Nicholls,
Owen Tallentire, Colin Ryan, Wayne Douglas and Robert Sutherland,
under the Securities Act. These charges related to untrue
statements in offer documents distributed in 2006.
At the same time, civil proceedings were filed against four of the
directors -- Messrs Nicholls, Tallentire, Ryan, and Sutherland --
seeking declarations of civil liability and civil pecuniary
penalties. The civil proceedings were stayed pending the outcome
of the criminal proceedings.
The FMA assumed responsibility for the criminal proceedings
alongside the Crown Solicitor in 2011. In 2013, the five
directors pleaded guilty to the criminal charges and received
varying sentences of imprisonment, home detention, community work
and some directors made reparation payments of between $60,000 and
NZ$100,000.
Earlier this year, CMF's liquidators settled their claim against
the company's former auditors for NZ$18.5M. This sum is subject to
claims from a number of other parties and the balance will be
available for distribution to investors. The receivers' claim
against CMF's former trustee and former solicitor is currently
before the courts. The receivers hope to write to investors within
the next two months to start the distribution process.
The FMA has determined that in light of the outcome of the
criminal proceedings, the actions taken by the receivers and
liquidators, and the limited personal assets of the directors,
there would be little prospect of any recovery for investors if it
were to pursue its civil claim.
The FMA considers that the misconduct that was the subject of the
civil proceedings has been adequately addressed through the
criminal process and the further time and cost of pursing the
civil proceeding would not be justified or in the public interest.
CMF owed NZ$167 million to approximately 7,500 investors when it
was placed in receivership in November 2007.
About Capital + Merchant
Capital + Merchant Finance Limited was placed into receivership on
Nov. 23, 2007, with the appointment of Timothy Downes and Richard
Simpson of Grant Thornton as Receivers. A second receivership also
commenced on Nov. 29, 2007, with the appointment of Grant Graham
and Brendon Gibson of Korda Mentha as Receivers. The first
receivership was concluded on March 21, 2012, and the second
receivership continues. The Official Assignee was appointed
liquidator of the company on Dec. 15, 2009, on the petition of the
Registrar of Companies.
Three former directors of C+M (Nicholls, Douglas and Tallentire)
were convicted of offences under the Crimes Act and the Securities
Act as a result of prosecutions by the Serious Fraud Office (SFO)
and the Financial Markets Authority (FMA). They received total
prison sentences of between six and eight and a half years'
imprisonment. Two of the directors (Ryan and Sutherland) were
ordered to pay reparation totaling NZ$160,000.
GREEN GARDENS: FMA Issues First Stop Order
------------------------------------------
The Financial Markets Authority (FMA) has issued a Stop Order
against Green Gardens Finance Trust Limited (GGFT) and warns the
public to be wary of doing business or depositing money with this
company.
The Stop Order is published here and prohibits GGFT from:
* offering, issuing, accepting applications for or advertising
debt securities
* accepting further contributions, investments or deposits for
debt securities.
The Stop Order is in response to concerns regarding the website
http://ggfinance.co.nzand the offers of debt securities
advertised on the website.
The FMA can issue a Stop Order under the Financial Markets Conduct
Act, if someone is offering investments without complying with the
law. This is the first Stop Order the FMA has issued.
Liam Mason, FMA's director of regulation said, "Green Gardens
Finance is offering investments illegally and this Stop Order
requires the company to comply with the relevant laws and warns
people not to give money to the company. It is an offence to fail
to comply with a Stop Order."
===========
T A I W A N
===========
KGI BANK: Fitch Affirms 'bb+' Viability Rating
----------------------------------------------
Fitch Ratings affirmed KGI Bank's ratings and at the same time
revised the Outlook on its Long-Term Issuer Default Rating (IDR)
of 'BBB' to Negative from Stable.
KEY RATING DRIVERS
IDRS AND NATIONAL RATINGS
The Negative Outlook on KGI Bank's Long-Term IDR and Long-Term
National Rating reflects Fitch's assessment that the credit
strength of its sole parent - China Development Financial Holding
Corporation (CDFHC) - is decreasing as KGI Bank grows in
importance within the group and leverage at KGI Securities, one of
the other main subsidiaries of CDFHC, increases. China Development
Industrial Bank (CDIB) is the other significant subsidiary of
CDFHC. Fitch views KGI Bank as having the weakest intrinsic credit
profile (Viability Rating at bb+) of all group entities.
Fitch estimates that KGI Bank will expand to account for roughly
40%-45% of group equity and 65%-70% of the group's assets by end-
2017 from about 34% of group's equity and 61% of the group's
assets on a pro-forma basis at end-2014. As KGI Bank's size
relative to the group increases, its weaker standalone profile
will put pressure on the group's credit strength, unless KGI Bank
materially strengthens its own credit profile.
KGI Bank expects the capital for future growth to be sourced from
profit and through the planned divestment of CDIB's direct
investment portfolio. The quality and liquidity of the portfolio
could affect the realisation of the plan. In Fitch's opinion there
could be some pressure on group capitalisation if the realisation
programme were to be slower than expected and strong growth at the
bank were to occur in line with its targets. Overall, CDFHC's
credit profile takes into consideration its strong franchise in
brokerage and principal investments and adequate capitalisation
relative to its business mix. But it also factors in influence
from KGI Bank, which has a modest franchise in Taiwan.
KGI Bank's IDRs are driven by institutional support from CDFHC,
which at the moment is more heavily influenced by the standalone
profile of KGI Securities and CDIB. In Fitch's opinion, support
from CDFHC is highly likely, if needed, because the agency
considers KGI Bank to be a core part of CDFHC and its commercial
banking business is essential to the group's strategy of building
a diversified universal banking franchise and to consolidate its
funding and liquidity profile.
VIABILITY RATING (VR)
KGI Bank's VR primarily reflects its above-average risk appetite
and aggressive growth target. The VR also considers the bank's
modest domestic commercial banking franchise (which stems from its
acquisition of Cosmos Bank) within Taiwan's fragmented and
competitive banking system, although this will be enhanced by the
assumption of CDIB's corporate banking assets and transfer of
group capital to fund growth. Fitch estimated the Fitch Core
Capital ratio was at 13% on a pro-forma basis at end-2014. This
may rise further through a combination of retained profits and
capital transferred from CDIB, but there is uncertainty how
capital will be managed and sustained in future in light of the
bank's appetite for growth and risk.
RATING SENSITIVITIES
IDRS AND NATIONAL RATINGS
KGI Bank's IDRs and National Ratings are sensitive to changes in
the credit profile of CDFHC, which is largely underpinned by the
strength of KGI Securities and CDIB, but increasingly influenced
by KGI Bank itself. CDFHC's credit profile would be negatively
affected, and thus result in a downgrade of KGI Bank's Long-Term
IDR and National Long-Term Rating, if the group's capital buffer
were to weaken notably and if, at the same time, KGI Bank's loans
were to grow rapidly, particularly in more risky segments such as
China (and other emerging markets). This rapid loan growth could
lead to deteriorating asset quality at KGI Bank and material
weakening of its standalone capitalisation.
Fitch would revise the Outlook on KGI Bank's Long-Term IDRs and
National Long-Term Ratings to Stable if the group's asset growth
tapers off to a more moderate level and the expansion strengthens
the bank's intrinsic credit profile overall.
VIABILITY RATING
KGI Bank's VR already considered double-digit annual loan growth
and potential increases in risk-taking in the next couple of
years. An upgrade is likely with a prudent expansion that
generates robust internal capital while maintaining healthy loan
quality.
The rating actions are as follows:
KGI Bank:
Long-Term IDR affirmed at 'BBB'; Outlook Revised to Negative from
Stable
Short-Term IDR affirmed at 'F3'
National Long-Term rating affirmed at 'A+(twn)'; Outlook Revised
to Negative from Stable
National Short-Term rating affirmed at 'F1'
Viability Rating affirmed at 'bb+'
===============
T H A I L A N D
===============
THAI AIRWAYS: To Cut 1,401 Jobs, Suspend Flights to L.A., Rome
--------------------------------------------------------------
Reuters reports that Thai Airways International Pcl plans to cut
1,401 jobs through voluntary retirement this year and suspend its
loss-making flights to Los Angeles and Rome as it pushes ahead
with a restructuring plan, its president said on July 26.
Reuters relates that Thailand's national carrier aims to reduce
operating costs and capacity by 20 per cent under the two-year
plan, which also calls for aircraft sales and a reduction in
staffing.
The firm is one of several state-controlled companies that the
military government has targeted for reform since seizing power in
May 2014, the report notes.
The flight suspension will reduce Thai Air capacity by 5%,
President Charumporn Jotikasthira told Reuters in a telephone
interview. The company aims to cut capacity by 15% in 2015.
"It's normal that we have to cut costs and adjust flights to suit
changing situation," he said adding the airline has set budget of
THB5.3 billion (US$151.86 million) for the voluntary retirement
scheme, Reuters relays. The number leaving excludes those that
will reach retirement age in 2015, he said.
Reuters relates that Charumporn said Thai Airways aims to cut
operating costs by up to THB9 billion this year.
From October 25, the carrier will stop flying from Bangkok to Los
Angeles and to Rome. The loss-making routes cost the company more
than THB100 million a year, Mr. Charumporn, as cited by Reuters,
said.
Reuters says the flight suspension to Los Angeles will close Thai
Airways operations in the United States. The firm suspended
flights to New York in 2008, also because the route was
unprofitable. But Thailand's flagship carrier will double the
number of flights from Bangkok to London and Bangkok to Frankfurt
to twice daily, he said.
Mr. Charumporn said that to further reduce costs, Thai Airways
will cut the frequency of its flights to Kolkata, India. It will
also transfer operations of three routes, Hyderabad in India,
Changsha in China and Luang Prabang in Laos, to its Thai Smile
mid-range unit, the president said.
Reuters adds that Mr. Charumporn reiterated his expectation that
Thai Airways' operation will break even at the end of this year,
although the bottom line would be impacted by rising restructuring
costs.
Thai Airways still has 50 routes that are either loss-making or
have low returns, the company said in a statement on July 26,
Reuters 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 ***