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T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Wednesday, October 21, 2015, Vol. 18, No. 208
Headlines
A U S T R A L I A
MAYLANDS HOTEL: Placed Into Receivership
S CENTRAL: Former CEO Found Guilty on 33 Charges
SKYPAC AVIATION: First Creditors' Meeting Set For Oct. 27
SOUTH TOWNSVILLE: First Creditors' Meeting Set For Oct. 28
C H I N A
CIFI HOLDINGS: Moody's to Retain Ba3 CFR on Domestic Bond Issue
SINOSTEEL CORP: Regulators Step in to Avert Bond Default
YINGDE GASES: US$ Loan & RMB Bond Support B1 CFR, Moody's Says
I N D I A
ABHAYANJANEYA HEALTH: ICRA Suspends B Rating on INR35cr Loan
ANGEL PIPES: ICRA Reaffirms B- Rating on INR10cr Loan
ASIAN EARTHMOVERS: CRISIL Lowers Rating on INR60MM Loan to D
ASIAN LAKTO: ICRA Assigns B- Rating to INR13cr Long Term Loan
BAHUBALI CASHEWS: CRISIL Assigns B Rating to INR60MM Cash Loan
CHAKRI FISHERIES: CRISIL Assigns B Rating to INR60MM Loan
GALAXY INFRACON: CRISIL Assigns B+ Rating to INR50MM LT Loan
GRAND CONSTRUCTION: ICRA Assigns B Rating to INR5cr LT Loan
GTN INDUSTRIES: ICRA Reaffirms B Rating on INR77.90cr Loan
GUJARAT COTTON: ICRA Suspends 'D' Rating on INR4.0cr Loan
HARIOM AGRI: ICRA Assigns 'B' Rating to INR4.0cr Cash Loan
INDOSOLAR LIMITED: Ind-Ra Withdraws 'IND D' LT Issuer Rating
IVR HOTELS: Ind-Ra Cuts Long-Term Issuer Rating to 'IND D'
IVRCL LIMITED: Ind-Ra Cuts Long-Term Issuer Rating to 'IND D'
JAI HANUMAN: ICRA Reaffirms 'B' Rating on INR7.66cr Loan
JAI MAAKALI: ICRA Revises Rating on INR10cr Cash Loan to B+
K. SADASIVA: Ind-Ra Affirms 'IND BB-' Long-term Issuer Rating
K. VENKATA: ICRA Assigns B+/A4 Rating on INR3.95cr Loan
KANSARA FORGE: ICRA Assigns B+ Rating to INR3.50cr Term Loan
KUTTANADU VIKASANA: CRISIL Assigns 'B' Rating to INR11.5MM Loan
MADHUSUDAN GARAI: ICRA Assigns 'B' Rating to INR3.5cr Loan
MANGLAM COTTON: ICRA Reaffirms B Rating on INR6.30cr Loan
MARUTI BITUMEN: ICRA Assigns B Rating to INR3.50cr Cash Loan
MITTAL COAL: CRISIL Cuts Rating on INR100MM Cash Loan to D
NANDI CPVC: ICRA Suspends B- Rating on INR5.0cr Loan
NAVDURGA AGRO: CRISIL Reaffirms B Rating on INR80MM Cash Loan
NEOLITE ZKW: Ind-Ra Hikes Long-Term Issuer Rating to 'IND BB'
NIRBHAI TEXTILES: ICRA Suspends B+ Rating on INR40cr Bank Loan
NOTANDAS GEMS: Ind-Ra Assigns 'IND BB' Long-Term Issuer Rating
R RAJAN: ICRA Assigns B+ Rating to INR5.0cr LT Loan
RADHESHYAM COTTEX: ICRA Reaffirms B+ Rating on INR8.60cr Loan
RAJPUTANA INDUSTRIES: ICRA Rates INR14.90cr Term Loan at B+
RAVINA HEALTH: CRISIL Reaffirms B Rating on INR160MM Term Loan
RK ELECTRICAL: ICRA Suspends B Rating on INR9cr Bank Loan
S.N.N. TEXTILES: ICRA Assigns B+ Rating to INR10cr Term Loan
SHANKAR INDUSTRIES: CRISIL Reaffirms B Rating on INR69.5MM Loan
SHREE KANKESHWARI: Ind-Ra Assigns 'IND BB+' LT Issuer Rating
SHRI HARKRISHAN: ICRA Assigns B+ Rating to INR4.50cr Loan
SPRINT CARS: ICRA Assigns B Rating to INR30cr LT Loan
SR METALLIZERS: ICRA Assigns B Rating to INR12.57cr Term Loan
SRE VENKATACHALAPATHY: ICRA Rates INR4.50cr LT Loan at B+
SRI POWER: Ind-Ra Affirms 'IND BB' Long-Term Issuer Rating
SVS FOOD: ICRA Revises Rating on INR6.58cr Fund Based Loan to B-
SWASTIK TRADERS: ICRA Assigns B+ Rating to INR4cr Cash Loan
VERSATILE MOBILE: CRISIL Reaffirms B+ Rating on INR88.5MM Loan
VIJAY STEEL: CRISIL Assigns B+ Rating to INR80MM Cash Loan
* INDIA: To Overhaul Century-Old Bankruptcy Laws
N E W Z E A L A N D
NUBIOTICS: SFO Probes Company Director
P H I L I P P I N E S
MONDRAGON: Investors Warned Against Bidding For CDC Estate
S I N G A P O R E
FCI ASIA: S&P Puts 'BB-' CCR on CreditWatch Positive
- - - - -
=================
A U S T R A L I A
=================
MAYLANDS HOTEL: Placed Into Receivership
----------------------------------------
Cliff Sanderson at Dissolve.com.au reports that the Maylands Hotel
has been placed into receivership. The report relates that the
historic pub that operates in the east of Adelaide recently
underwent a major revamp which included making a sound-proof room
for housing gaming machines.
The hotel still operates for the meantime, the report says.
Receivers Ferrier Hodgson has taken control of the hotel,
Dissolve.com.au adds.
S CENTRAL: Former CEO Found Guilty on 33 Charges
------------------------------------------------
Peter Mavridis, the former chief executive of the of S Central
Group, has been found guilty by the County Court of Victoria in
relation to 33 charges brought by Australian Securities and
Investments Commission.
The S Central Group -- which consisted of S Central Pty Ltd, S
Central (NSW) Pty Ltd, S Central Products Pty Ltd, Expressapps Pty
Ltd and Infotronics Software Pty Ltd -- provided information
technology services to customers in Victoria, New South Wales and
Queensland.
Between January and September 2009, Mr Mavridis directed the
financial controller of the group to submit duplicated and/or
falsely inflated invoices to National Australia Bank Ltd under a
debtor factoring agreement, which led to credit totalling
approximately AUD4.8 million being advanced to companies within
the S Central Group.
Debtor factoring involves the assigning of debts that are owed in
exchange for credit advanced by a finance provider. In order to
retain ongoing access to bank credit, Mr Mavridis signed end-of
month reconciliations that disguised the falsifications and had
them submitted to the bank.
The S Central Group companies entered into liquidation at various
times between November 2009 and April 2010, leaving total
deficiencies in excess of AUD7 million.
On October 19, Mr Mavridis was found guilty by a jury of 23 counts
of obtaining a financial advantage by deception and 10 counts of
false accounting under the Victorian Crimes Act.
Mr Mavridis was granted bail and ordered to appear for a
sentencing hearing in the week commencing Nov. 9, 2015.
The matter was prosecuted by the Commonwealth Director of Public
Prosecutions.
In November 2013, David Cologna, the former financial controller
of S Central Pty Ltd (in liquidation) was sentenced to 12 months
jail, suspended for two years, for falsifying the books of
companies in the S Central Group.
SKYPAC AVIATION: First Creditors' Meeting Set For Oct. 27
---------------------------------------------------------
Graeme Beattie & Christopher Darin of Worrells Solvency
were appointed as administrators of Skypac Aviation Pty Ltd on
Oct. 15, 2015.
A first meeting of the creditors of the Company will be held at
Suite 3, Level 1, 96 Phillip Street, in Parramatta, on Oct. 27,
2015, at 3:00 p.m.
SOUTH TOWNSVILLE: First Creditors' Meeting Set For Oct. 28
----------------------------------------------------------
Geoffrey Trent Hancock of Moore Stephens Sydney was appointed as
administrator of South Townsville Developments Pty Limited on Oct.
16, 2015.
A first meeting of the creditors of the Company will be held at
Moore Stephens Sydney, Level 15, 135 King Street, in Sydney, on
Oct. 28, 2015, at 10:30 a.m.
=========
C H I N A
=========
CIFI HOLDINGS: Moody's to Retain Ba3 CFR on Domestic Bond Issue
---------------------------------------------------------------
Moody's Investors Service says that CIFI Holdings (Group) Co.
Ltd.'s domestic bond issuance is credit positive, but will not
immediately impact the company's Ba3 corporate family rating or B1
senior unsecured bond rating.
The ratings outlook remains stable.
On Oct. 16, 2015, CIFI announced that it has completed the issue
of RMB3.495 billion in domestic bonds with a term of 5 years at a
coupon rate of 4.95%. This is the first tranche issue of the
total principal amount of up to RMB4.0 billion.
"The issuance will improve the company's liquidity profile, extend
its debt maturity tenors, and lower its overall average weighted
borrowing cost," says Stephanie Lau, a Moody's Assistance Vice
President and Analyst.
CIFI's liquidity position is adequate. Its cash balance of
RMB10.1 billion at end-June 2015 was sufficient to cover its
committed land payments of RMB3.0 billion and short-term debt of
RMB3.0 billion.
CIFI achieved contracted sales of RMB17.29 billion in January to
September 2015 (including joint venture (JV) contributions),
representing approximately 70% of its full-year target of RMB25
billion. Contracted sales in September reached around RMB3.01
billion, which was a new record high for the Group. Moody's
believes the company is on track to achieve its full-year target,
and its strong sales performance also supports its liquidity.
Moody's expects the majority of the issuance proceeds will be used
to refinance onshore bank borrowings.
Moody's estimates CIFI's pro forma funding costs at around 7.5%
-- compared with the company's weighted average borrowing cost of
7.9% as at 1H2015 -- will mildly enhance the company's interest
coverage metrics.
Moody's expects adjusted EBIT/interest (including JVs) to stay
around 3.0x-3.5x in the next 12 months, following better revenue
recognition in 2H 2015 and a gradual margin recovery. This level
continues to support the company's Ba3 corporate family rating.
The adjusted EBIT/interest coverage (and revenue/debt ratios) are
calculated based on Moody's standard adjustments and the
definition stated in Moody's Homebuilding And Property Development
Industry, published in April 2015.
The interest coverage formula is modified for Chinese developers
to substitute "capitalized interest" in the numerator for
"interest charged to cost of goods sold" as the latter is not
separately disclosed in audited financial statements. Total debt
does not include adjustments for mortgage guarantees.
The principal methodology used in these ratings was Homebuilding
And Property Development Industry published in April 2015.
CIFI Holdings (Group) Co. Ltd. was incorporated in the Cayman
Islands in May 2011 and listed on the Hong Kong Stock Exchange in
November 2012. CIFI develops residential and commercial
properties mainly in the Yangtze River Delta. It has also
expanded to the Pan Bohai Rim and the Central Western Region. At
end-1H 2015, it had more than 70 projects in 13 cities, and an
attributable land bank of 8.1 million square meters.
SINOSTEEL CORP: Regulators Step in to Avert Bond Default
--------------------------------------------------------
The South China Morning Post reports that the National Development
and Reform Commission and the State-owned Assets Supervision and
Administration Commission have, in a rare intervention in the bond
market, pre-empted a potential default by Sinosteel.
SCMP relates that this is the first time state regulators have
intervened in a corporate credit case. In the five previous cases
in the country this year, the companies were bailed out by
shareholders, the report says.
"You can't get to a liberal and open market where nobody fails,"
the report quotes Jini Lee, a partner at law firm Ashurst, as
saying. "There has got to be some controlled defaults along the
way if it is to transform into a market-driven economy.
"It's a question of how that is managed -- and how that doesn't
trip up the whole system."
Mr. Lee previously advised the Ministry of Finance on its first
offshore listed bond issue, the report notes.
After a meeting with NDRC representatives on October 16, Sinosteel
debt holders were first asked not to redeem the bonds and then
told the redemption date would be delayed by a month to November
16, according to SCMP.
SCMP relates that the emergency meeting came as investors could
from October 20 redeem up to CNY2 billion of the principal on the
bond that matures in 2017.
According to the report, Sinosteel has been grappling with its
finances amid the economic slowdown, with its debt-equity ratio
hovering above 90% in recent years. It has earlier brushed off
rumours of it defaulting on its bank loans.
More corporate bond defaults might become the norm as the slowdown
deepened, Nomura China chief economist Yang Zhao warned, the
report relays.
Company issues make up only 4.3% of the country's CNY35 trillion
bond market, the report discloses. Most of the bonds in the
country -- 70% issued by the government and policy banks -- are
still held to maturity.
Cases like Sinosteel's will start to test the robustness of the
nation's bankruptcy laws, information disclosures and the
soundness of its credit rating system, the report adds.
Sinosteel Corporation is a central state owned enterprise,
primarily in mining, trading, equipment manufacturing and
engineering, under the supervision of the State-owned Assets
Supervision and Administration Commission.
YINGDE GASES: US$ Loan & RMB Bond Support B1 CFR, Moody's Says
--------------------------------------------------------------
Moody's Investors Service says Yingde Gases Group Co Ltd's new US
dollar syndicated loan and RMB bond issuance are credit positive
and support the B1 corporate family ratings and B2 senior
unsecured rating on the bonds issued by Yingde Gases Investment
Limited and guaranteed by Yingde Gases.
The outlook for the ratings remain stable.
On Oct. 14, 2015, Yingde Gases announced that it had raised $100m
in syndicated facilities from various banks. The announcement was
made a day after the issuance of the RMB980 million bond by its
wholly-owned subsidiary Hunan Yingde Gases Co Ltd.
"The newly raised funds will improve Yingde Gases' liquidity.
This capital raising also demonstrates the company's sound
relationship with offshore banks and its ability to tap the
domestic bond market," says Jiming Zou, a Moody's Vice President
and Senior Analyst.
Those long term debts will help Yingde Gases' refinance its short
term borrowings. The syndicated loan together with the RMB bond
accounted for 55% of Yingde Gases' short-term debt at end-June
2015, and will likely lower its short-term debt/total debt to
about 20% at the time of completion from 29% at end-June 2015.
The company's short-term debt, including finance leases, increased
by about RMB900 million during 1H 2015 to RMB2.9 billion at end-
June 2015 and was almost three times its RMB1.1 billion cash
balance.
The company plans to use part of these debt facilities for
refinancing or debt repayments. As a result, Moody's does not
expect the company's debt leverage to materially change. Yingde
Gases' adjusted debt/EBITDA was about 3.9x for the 12 months to
June 2015, which position the company solidly at the B1 corporate
family rating level.
"We also expect these funding activities to lower Yingde Gases'
interest costs," adds Jiming Zou.
The syndicated loan has a tenor of 3.5 years and a margin of 330
basis points over Libor, with an average life of 2.875 years. The
domestic bond also pays a lower coupon rate of 5.48% with a 5-year
tenor. These interest rates are lower than the company's average
borrowing costs of 6.5%-7.5% at June 2015.
Moody's expects Yingde Gases' to continue to improve its financial
flexibility and lower its financing costs against the backdrop of
a slowing economy and a weak steel industry. Those measures may
include slowing capital spending and accelerating cash collection.
In the first half of 2015, Yingde Gases' operating cash flow to
debt grew to 12% from 9.6% in 2014. The company strengthened its
receivables collection, reduced its capital spending and improved
its operating cash flow to RMB545 million from RMB292 million a
year ago.
Moody's will continue to monitor Yingde Gases' financial policies,
cash generation and funding plans, as well as the performance of
its key underlying businesses.
The principal methodology used in these ratings was Global
Chemical Industry Rating Methodology published in December 2013.
Yingde Gases Group Co Ltd is one of the largest players in the
independent on-site industrial gas market in China. The company
reported RMB7.7 billion in revenues in 2014. It had a total of 65
production facilities in operation and another 14 under
development as of June 2015. On-site gas production accounted for
about 80%-90% of Yingde Gases' revenues, with the rest coming from
merchant sales.
=========
I N D I A
=========
ABHAYANJANEYA HEALTH: ICRA Suspends B Rating on INR35cr Loan
------------------------------------------------------------
ICRA has suspended [ICRA]B assigned to INR35.00 crore bank
facilities of Abhayanjaneya Health Care Private Limited. The
suspension follows ICRA's inability to carry out a rating
surveillance in the absence of the requisite information from the
company.
ANGEL PIPES: ICRA Reaffirms B- Rating on INR10cr Loan
-----------------------------------------------------
ICRA has reaffirmed its long term rating of [ICRA]B- on the INR7
crore fund based limits and INR10 crore unallocated limits of
Angel Pipes and Tubes Private Limited (APT).
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit
(LT scale) 7.00 [ICRA]B-; reaffirmed
Unallocated
(LT scale) 10.00 [ICRA]B-; reaffirmed
ICRA's rating continues to take into account the modest scale of
APT's operations and the unorganized and highly competitive nature
of the industry it operates in. The rating also continues to
factor in the company's low capacity utilization levels and the
vulnerability of the company's profitability to raw material price
fluctuations. ICRA takes note of the working capital intensive
nature of the company's operations, which has been funded through
high amount of payables to a group company, from which raw
materials are sourced. The rating also takes into account the
company's stretched liquidity position as evidenced by the near
full utilization of its working capital limits. The rating
however, derives comfort from the extensive experience of the
management, spanning close to a decade, and the repayment of a
large portion of the unsecured borrowings, which has resulted in
the gearing improving to 3.03x as on March 31, 2015 from 5.39x, an
year ago.
Going forward, the company's ability to improve its scale of
operations through improved capacity utilization while improving
its profitability metrics, along with attaining an optimal working
capital cycle, will be the key rating sensitivities.
APT was incorporated in 2006 and manufactures stainless steel
pipes and tubes at its manufacturing facility at Sanchor,
Rajasthan which has a production capacity of 9,600 metric tonnes
per annum. The company's products find application across sectors
like -petrochemicals, chemicals, pharmaceuticals, fertilizers, oil
processing, furniture, and automobiles.
Recent Results
APT, on a provisional basis, reported an operating income of
INR55.02 crore in FY15 and a net profit of INR0.57 crore, as
against an operating income of INR53.45 crore and a net profit of
INR0.23 crore in the previous year.
ASIAN EARTHMOVERS: CRISIL Lowers Rating on INR60MM Loan to D
------------------------------------------------------------
CRISIL has downgraded its rating on the bank facility of Asian
Earthmovers (AE) to 'CRISIL D' from 'CRISIL BB-/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 60 CRISIL D (Downgraded from
'CRISIL BB-/Stable')
The rating downgrade reflects instances of delay by AE in
servicing its term debt; the delays have been caused by stretched
liquidity on account of minimal operations. The bank lines have
been over-utilised and have not been regularised due to weak
business risk profile.
The rating continues to factor in AE's below-average financial
risk profile, with a high total outstanding liabilities to
tangible net worth (TOLTNW) ratio. The scale of operations remains
modest, with principal and geographic concentration risks in the
revenue profile. These rating weaknesses are partially offset by
AE's established market position in the dealership of earth-moving
equipment of JCB India Ltd (JCB) in North and North-East
Karnataka.
Set up in 2007 and based in Bellary (Karnataka), AE is the sole
authorised dealer for JCB's earth-moving equipment in North
Karnataka. The firm operates seven showrooms with sales, service,
and spares facilities. AE is promoted by Mr. Mukthar Ahmed K
Dasankop, his friend Mr. Syed Shahbuddin B, and brother-in-law Mr.
Mohamed Muktharuddin Khan.
ASIAN LAKTO: ICRA Assigns B- Rating to INR13cr Long Term Loan
-------------------------------------------------------------
ICRA has assigned its long term rating of [ICRA]B- to the INR13.00
crore fund-based bank facilities of Asian Lakto Industries
Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term-fund
based 13.00 [ICRA]B-; Assigned
ICRA's rating is constrained on account of ALIL's low profit
margins on account of the intense competition in the industry. The
rating also takes into account the seasonal nature of the business
and the company's relatively modest scale of operations. The
rating also factors in the company's high working capital
intensity on account of high inventory levels. The reliance on
bank borrowings for funding the working capital requirements has
resulted in a leveraged capital structure. The low profitability
coupled with the high debt levels has resulted in weak coverage
indicators with elevated TD/OPBDITA and weak NCA/TD. However, the
rating factors in positively the extensive experience of the
promoters in the beverage industry, the company's long track
record of operations, its wide distribution network and
established relationships with reputed clients.
Going forward, the ability of the company to improve its margins,
scale up its operations and strengthen its coverage indicators
will be the key rating sensitivities.
Incorporated in 1994, by Mr. Radhe Shyam Poddar, Mr. Gopal Poddar
and Mr. Neeraj Poddar, ALIL was originally engaged in processing
of flavoured milk. In 2007, the company diversified its business
and started processing of fruit juice. In 2010, ALIL exited the
flavoured milk business owing to continued losses. The company
sells its fruit juices through various distributors and retail
chains under the brand name of 'Mr. Fresh' in various flavours,
viz. mango, apple, lichi, guava, mixed fruit, etc.
Recent Results
On a provisional basis, ALIL registered a profit after tax (PAT)
of INR1.3 crore on an operating income (OI) of INR74.3 crore in
FY15, as against a PAT of INR1.01 crore on an OI of INR70.76 crore
in the previous year.
BAHUBALI CASHEWS: CRISIL Assigns B Rating to INR60MM Cash Loan
--------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable' rating to the long-term
bank facility of Bahubali Cashews (BC).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 60 CRISIL B/Stable
The rating reflects modest scale of operations in the intensely
competitive cashew industry, and below-average financial risk
profile because of small net worth and high total outside
liabilities to tangible net worth ratio. These weaknesses are
partially offset by promoter's extensive industry experience.
Outlook: Stable
CRISIL believes BC will continue to benefit over the medium term
from its promoter's extensive industry experience. The outlook may
be revised to 'Positive' if considerable increase in revenue and
profitability leads to higher cash accrual and improved financial
risk profile. Conversely, the outlook may be revised to 'Negative'
in case of low revenue or profitability, or weakening of working
capital management, or large debt-funded capital expenditure,
leading to deterioration in financial risk profile, particularly
liquidity.
Set up as a proprietorship firm in 2000, BC processes raw cashew
nuts and sells cashew kernels. Its facility in Udupi (Karnataka)
has installed processing capacity of 4 metric tonnes per day of
cashew kernels. Its operations are managed by proprietor Ms.
Nirmala Mahaveer Hegde.
BC, on a provisional basis, reported profit after tax (PAT) of
INR1.4 million on net sales of INR130.8 million for 2014-15
(refers to financial year, April 1 to March 31); it had PAT of
INR0.9 million on net sales of INR84.5 million for 2013-14.
CHAKRI FISHERIES: CRISIL Assigns B Rating to INR60MM Loan
---------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable/CRISIL A4' ratings to the
bank facilities of Chakri Fisheries Private Limited (CFPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term
Bank Loan Facility 0.5 CRISIL B/Stable
Packing Credit 60.0 CRISIL A4
Long Term Loan 12.0 CRISIL B/Stable
Bank Guarantee 2.5 CRISIL A4
Foreign Bill
Discounting 60.0 CRISIL B/Stable
The ratings reflect CFPL's modest scale of operations, large
working capital requirements, and its below-average financial risk
profile marked by high gearing, modest debt protection metrics,
and small net worth. The ratings also factor in the company's
susceptibility to volatility in raw material prices and foreign
exchange rates, and to inherent risks in the seafood industry.
These rating weaknesses are partially offset by the benefits
derived from the extensive industry experience of its promoters
and its established customer relationships.
Outlook: Stable
CRISIL believes that CFPL will continue to benefit from its
promoters' extensive industry experience and its established
customer relationships. The outlook may be revised to 'Positive'
if the company significantly scales up operations or if its
profitability improves substantially. Conversely, the outlook may
be revised to 'Negative' in case of decline in revenue and
operating margin, or large debt-funded capital expenditure,
leading to deterioration in financial risk profile.
Established in 2014, CFPL is engaged in trading of seafood
products. CFPL is promoted by Mr.P. Shashadri Chowdary and Ms.P.
Sireesha.
GALAXY INFRACON: CRISIL Assigns B+ Rating to INR50MM LT Loan
------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-term
bank facility of Galaxy Infracon (GI).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term
Bank Loan Facility 50 CRISIL B+/Stable
The rating reflects the extensive experience of GI's promoters in
the real estate industry and the firm's limited exposure to
implementation and funding risks on its project. These rating
strengths are partially offset by susceptibility of GI's operating
performance to timeliness in execution of the project and flow of
customer advances from bookings, and exposure to cyclicality in
the real estate sector.
Outlook: Stable
CRISIL believes GI will maintain its credit risk profile on the
back of the extensive experience of the partners in the real
estate sector. The outlook may be revised to 'Positive' if the
offtake of units in the project exceeds expectations, leading to
strong cash accrual. Conversely, the outlook may be revised to
'Negative' if delay in project completion or low offtake of units
weakens the financial risk profile.
GI belongs to the Galaxy Group established in 1989 by the Patel
family based inof Surat city. The company is developing a
residential real estate project, Galaxy Aventura, at Pal (Surat).
GRAND CONSTRUCTION: ICRA Assigns B Rating to INR5cr LT Loan
-----------------------------------------------------------
ICRA has assigned a long term rating of [ICRA]B to the INR5.00
crore fund based facilities of Grand Construction Co. ICRA has
also assigned a long term/short term rating of [ICRA]B/[ICRA]A4 to
the INR1.00 crore proposed facilities of Grand Construction Co.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Fund
Based Facilities 5.00 [ICRA]B assigned
Long Term/Short
Term Proposed
facilities 1.00 [ICRA]B/[ICRA]A4 assigned
The ratings assigned take into account the extensive experience of
the promoters in construction sector spanning over a decade, the
healthy track record of the its promoters in completing several
projects in and around Ernakulam district and the healthy order
book of the firm providing revenue visibility for the near to
medium term. However, the ratings are constrained by the modest
scale of operations of the firm; the high geographic, customer and
sectoral concentration risks faced by the firm with piling and
fabrication works from DMRC for Kochi Metro rail forming a major
portion of contracts undertaken; high working capital intensity
resulting from the stretched receivable position of the firm due
to delays in payments from contractors and minimal credit received
from suppliers.
Grand Construction Co is a partnership firm founded in 2013. GCC
is mainly engaged in undertaking subcontracted work from large EPC
contractors who undertake contract work from DMRC for the Kochi
Metro Rail Project. The firm mostly undertakes piling and
fabrication works and subcontracts part of the work to other
contractors. The core competency of the firm is in overseeing and
completing the work using own labourers and subcontractors. The
firm traces its roots to M/s Sreebhadra Constructions, which has
completed several civil contract works in and around Ernakulam
since 2000. The firm is managed by Mrs. Sreedevi Mohanan and Mr.
Kunjunni Mohanan, wife and son respectively of Mr. Mohanan, the
sole proprietor of M/s Sreebhadra Constructions. The firm's
registered office is located in Ernakulam.
Recent results
Grand Construction Co recorded a net profit of INR0.30 crore on an
operating income of INR5.42 crore during FY 2014-15 as per
unaudited financial statements; as against a net profit of INR0.01
crore on an operating income of INR0.14 crore during FY 2013-14 as
per the audited financial statements.
GTN INDUSTRIES: ICRA Reaffirms B Rating on INR77.90cr Loan
----------------------------------------------------------
ICRA has reaffirmed the long term rating of [ICRA]B outstanding on
the INR77.90 crore (revised from INR83.23) term loan facilities of
GTN Industries Limited. ICRA has also reaffirmed the short term
rating of [ICRA]A4 outstanding on the INR84.40 crore (enhanced
from INR70.94) fund based facilities and INR26.20 crore non-fund
based facilities.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term: Term
loan facilities 77.90 [ICRA]B; reaffirmed
Short term: Fund
based facilities 84.40 [ICRA]A4; reaffirmed
Short term: Non-
fund based
facilities 26.20 [ICRA]A4; reaffirmed
The reaffirmation of the ratings take into account the operational
and financial flexibility enjoyed by the company being a part of
the GTN group, which has varied business interests ranging from
textiles to engineering. The ratings also consider the promoter's
long-standing industry experience, established relationships with
reputed customers, diversified revenue profile and the company's
presence in the value-added yarn (compacting) segment. The ratings
however remain constrained by the leveraged capital structure due
to net losses, weak debt-protection metrics and the susceptibility
of company's earnings to fluctuation in cotton and yarn prices and
stiff competition in the highly fragmented spinning industry.
During FY15, GIL's sales declined due to drop in trading income on
the back of weak demand for yarn from overseas market, led by
China. Further, the company's operating margins were impacted
(decline of 290 bps y-o-y) due to the decline in yarn realization
and usage of high-cost inventory. While the same led to weakening
of coverage indicators, the company's liquidity was supported to
an extent by way of preference shares and unsecured loans from
promoter/ group entities (infusion of INR12.3 crore during FY15).
With yarn demand continuing to remain subdued during the current
fiscal, the company's operating income declined by 15% during Q1
FY16 (on q-o-q basis). Nevertheless, operating margin improved to
6.4% in Q1 FY16 from 3.2% in FY15 supported by increase in
contribution levels due to relatively stable cotton and yarn
prices.
ICRA takes note of the ongoing VRS scheme implemented by GIL to
optimize employee costs in the long run. The scheme entails total
expenditure of INR10.0 crore, of which the company incurred INR1.8
crore during Q1 FY16, and the balance is likely to be incurred
during the remainder of the year, and the same is expected to be
debt-funded. This apart, the company intends to undertake debt-
funded capex at a cost of INR18.0 crore to increase its spinning
capacities by 8,640 spindles over the next 6-12 months. While the
benefits from the aforesaid plans are likely to accrue over the
long-term, the same is likely to exert stress on the Company's
near-term debt indicators. The company has a large repayment
obligation over the next two years, it is imperative for the
company to improve the accruals position by way of improvement in
the scale of operations and expansion of margins, in the absence
of which, the financial support from the promoters is expected to
continue to service the aforesaid debt obligations and the same
will remain key rating sensitivities.
GIL, the flagship company of the Hyderabad-based GTN Industries
Group, is primarily engaged in manufacturing and trading of cotton
yarn, in the count range of 30's to 140's. GIL has an installed
capacity of 85,344 spindles across its two spinning units at Medak
(Telengana) and Nagpur (Maharashtra). The company was founded by
Late M L Patodia and is currently managed by Mr. M K Patodia. In
Sep'14, GIL hived-off its yarn processing and knitting division to
GTN Engineering (India) Limited ([ICRA]BBB (Stable)/ [ICRA]A2) for
a sale consideration of INR30.5 crore. Its shares are listed in
the Bombay Stock Exchange and National Stock Exchange, and the
promoters hold 74.6 per cent stake in the company (as on June 30,
2015).
GUJARAT COTTON: ICRA Suspends 'D' Rating on INR4.0cr Loan
---------------------------------------------------------
ICRA has suspended the long term rating of [ICRA]D assigned to the
INR4.00 crore cash credit facility and the INR1.00 crore term loan
facility of Gujarat Cotton Industries (GCI). ICRA has also
suspended the short term rating of [ICRA]D assigned to the INR1.00
crore short-term non-fund based facility of GCI. 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
Term Loan 1.00 [ICRA]D Suspended
Short-term fund
based facility 1.00 [ICRA]D Suspended
Gujarat Cotton Industries (GCI) was established as a partnership
firm in December 2010 and is engaged in the business of ginning &
pressing of raw cotton and crushing of cotton oil seeds. The
firm's manufacturing facility is located at Mahuva, Bhavnagar in
Gujarat and is equipped with eighteen ginning machines, one
pressing machine and three expeller machines. The firm is
currently promoted by six partners who have long-standing
experience in the cotton industry.
HARIOM AGRI: ICRA Assigns 'B' Rating to INR4.0cr Cash Loan
----------------------------------------------------------
The long-term rating of [ICRA]B has been assigned to the INR4.00
crore cash credit facility and INR1.31 crore term loan facility of
Hariom Agri International Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 4.00 [ICRA]B assigned
Term Loan 1.31 [ICRA]B assigned
The assigned rating is constrained by the start up nature of the
company and vulnerability of future cash flows to the product
establishment and company's pricing flexibility in a highly
competitive and fragmented industry with low value addition in the
products. Further, HAIPL's revenues and margins would also remain
exposed to foreign exchange rate fluctuations, given the company's
high reliance on imports to meet its raw material requirements, as
well as volatility in cashew price movements, which are subject to
seasonality and crop harvest. The rating also takes into account
the possible stress on the entity's financial profile given the
debt funded initial capital expenditure and debt repayments
scheduled in the near term.
The rating, however, positively factors in stable demand outlook
for cashew processing industry in India driven by the account of
increasing consumption of the cashew kernels in the country and
derives comfort from the timely commissioning of the operations
without any major cost overruns.
Incorporated in July 2014, Hariom Agri International Private
Limited (HAIPL) commenced commercial operations in March 2015. The
company is promoted by the Gajera family and is engaged in
processing of raw cashew nuts (RCN) to obtain cashew kernels,
cashew nut shell and cashew husk. The processing unit of the
company is located at Amreli, Gujarat and is equipped to process
~9 MT of raw cashew nuts per day with working of 12 hrs per day.
Recent Results
During its two months of operations, the company has reported an
operating income of INR5.13 crore and profit before tax of INR0.45
lakhs for FY15 (as per unaudited numbers).
INDOSOLAR LIMITED: Ind-Ra Withdraws 'IND D' LT Issuer Rating
------------------------------------------------------------
India Ratings and Research (Ind-Ra) has withdrawn Indosolar
Limited's (ISL) 'IND D(suspended)' Long-Term Issuer Rating. The
agency has also withdrawn the 'IND D(suspended)' rating on ISL's
INR2.75bn long-term loans.
The ratings have been withdrawn due to lack of adequate
information. Ind-Ra will no longer provide ratings or analytical
coverage for ISL.
Ind-Ra suspended ISL's ratings on 25 September 2014.
IVR HOTELS: Ind-Ra Cuts Long-Term Issuer Rating to 'IND D'
---------------------------------------------------------
India Ratings and Research (Ind-Ra) has downgraded IVR Hotels and
Resorts Limited's (IVRHRL) Long-Term Issuer Rating to 'IND D' from
'IND B+'. The Outlook was Stable. The agency has also downgraded
the rating on IVRHRL's INR450m term loans to Long-term 'IND D'
from 'IND B+'.
KEY RATING DRIVERS
The ratings have been downgraded due to delays in the servicing of
interest on IVRHRL's term loans, due to low sales and cash flow.
RATING SENSITIVITES
Timely debt servicing for three consecutive months will be
positive for the ratings.
COMPANY PROFILE
IVRHRL is a subsidiary of IVRCL Limited ('IND D') and is
developing a golf township project in Sriperumbudur, Chennai.
IVRCL LIMITED: Ind-Ra Cuts Long-Term Issuer Rating to 'IND D'
-------------------------------------------------------------
India Ratings and Research (Ind-Ra) has downgraded IVRCL Limited's
Long-Term Issuer Rating to 'IND D' from 'IND B+'. The Outlook was
Stable.
KEY RATING DRIVERS
The downgrade reflects IVRCL's non-payment of interest due to
banks on the cash credit facilities during August and September
2015. The default was mainly due to the non-release of funds
approved under the corporate debt restructuring (CDR) package by
certain banks.
Under the CDR package, approved in June 2014, IVRCL was to receive
a fresh term loan (termed priority loan) of INR1.75bn to clear
statutory and employee dues and kick-start execution, of which
only INR750m was released by FYE15. This resulted in revenue being
much below expectations at INR31.17bn as against the target of
INR57.28bn under the CDR package and EBITDA losses.
RATING SENSITIVITES
Timely debt servicing for three consecutive months will be
positive for the ratings.
COMPANY PROFILE
IVRCL is based in Hyderabad and provides engineering, procurement
and construction services to the sectors of irrigation, water
supply, transportation, buildings and industrial structures. It is
listed on the National Stock Exchange and Bombay Stock Exchange.
In FY15, the company reported revenue of INR31.17bn (FY14:
INR43.05bn), operating EBITDA loss of INR0.29bn (profit of
INR1.59bn) and net loss of INR6.72bn (INR7.17bn). According to the
provisional results for 1QFY16, the company reported revenue of
INR6.20bn (1QFY15: INR8.34bn), operating EBITDA loss of INR196m
(profit of INR130m) and net loss of INR1.87bn (INR1.58bn).
IVRCL's ratings:
-- Long-Term Issuer Rating: downgraded to 'IND D' from 'IND B+'
-- INR16.8bn consortium fund-based limits: downgraded to Long-
term 'IND D' from 'IND B+'
-- INR19.46bn long-term loans: downgraded to Long-term 'IND D'
from 'IND B+'
-- INR2bn non-convertible debentures: downgraded to Long-term
'IND D' from 'IND B+'
-- INR48.5bn consortium non-fund based limits: downgraded to
Long-term/Short-term 'IND D' from 'IND B+'/'IND A4'
JAI HANUMAN: ICRA Reaffirms 'B' Rating on INR7.66cr Loan
--------------------------------------------------------
ICRA has re-affirmed the [ICRA]B rating for INR7.66 crore fund
based facilities and INR1.32 crore proposed limits of Jai Hanuman
Rice Industries. ICRA has also re-affirmed [ICRA]A4 rating for
INR0.02 crore non-fund based facilities of JHRI.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based limits 7.66 [ICRA]B (re-affirmed)
Non-fund based limits 0.02 [ICRA]A4 (re-affirmed)
Unallocated (Proposed
Limits) 1.32 [ICRA]B (re-affirmed)
The rating action factors in JHRI's weak financial profile,
reflected by thin profitability and consequently weak debt
coverage indicators coupled with high gearing level, nevertheless
the same has improved in FY15 it still remains high. The rating
also takes into account high intensity of competition in the
industry and agro climatic risks, which can affect the
availability of paddy in adverse weather conditions. The rating,
however favorably takes into account long standing experience of
promoters in rice industry, proximity of the mill to major rice
growing area which results in easy availability of paddy.
Jai Hanuman Rice Industries (JHRI) was set up as a proprietorship
firm, in 1998, by Mr. Rishhi Pal. The firm is primarily engaged in
the milling of rice with an installed capacity of 2 Tonnes per
hour in Taraori, Karnal District (Haryana). The firm's
constitution has been changed to a partnership, with Mr Rishipal
and Mr. Tara Chand as equal profit sharing partners.
Recent Results
During the financial year 2014-15, the firm reported a profit
after tax (PAT) of INR0.01 crore on an Operating income of
INR31.69 crore as against PAT of INR0.11 crore on an operating
income of INR30.16 crore in 2013-14.
JAI MAAKALI: ICRA Revises Rating on INR10cr Cash Loan to B+
-----------------------------------------------------------
ICRA has revised the long-term rating assigned to the INR10.00
crore cash credit limits of Jai Maakali Poultry Products Private
Limited to [ICRA]B+ from [ICRA]BB-.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 10.00 ICRA]B+; Revised
from [ICRA]BB-(Stable)
The revision in rating takes into account the stretched liquidity
position of the company as reflected by the high utilization of
cash credit limits due to delayed receivables; low profitability
levels inherent in the egg trading business and leveraged capital
structure with gearing of 1.72 times as on March 31, 2015. The
rating is also constrained by the exposure of revenues and
profitability to inherent risks associated with the poultry
industry, such as disease outbreaks, the seasonal nature of the
business, and the high competitive intensity emanating from both
organized as well as unorganized players. The rating, however,
favorably factors in the experience of the management in the
poultry industry and healthy demand outlook for the layer segment
of the industry because of increasing acceptance of eggs as a
daily meal component.
Going forward, the company's ability to manage its working capital
requirements would be the key rating sensitivity from the credit
perspective.
Jai Maakali Poultry Products Private Limited (JMPPL) is the
flagship company of the Jai Maakali Group, with its operations
based at Tanuku in the West Godavari district of Andhra Pradesh.
Incorporated in 1998, JMPPL deals in the trading of table eggs.
The company procures eggs from poultry farmers in the districts of
East Godavari, West Godavari, Visakhapatnam, Krishna and Guntur
districts of Andhra Pradesh, and sells them to buyers in Assam,
West Bengal, Meghalaya, Bihar, Jharkhand, Odisha, Tamil Nadu,
Nagaland and Mizoram.
Recent Results
The company reported an operating income of INR313.15 crore and
net profit of INR1.72 crore in FY2015 (provisional and unaudited)
as against operating income and net profit of INR279.64 crore and
INR0.83 crore respectively in FY2014.
K. SADASIVA: Ind-Ra Affirms 'IND BB-' Long-term Issuer Rating
-------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed K. Sadasiva
Reddy's (KSR) Long-term Issuer Rating at 'IND BB-' with a Stable
Outlook. The agency has also taken the following rating actions on
KSR's bank facilities:
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Fund-based working 40 Affirmed at 'IND BB-'/Stable
capital limits
Bank guarantee 20 Affirmed at 'IND A4+'
KEY RATING DRIVERS
The affirmation reflects KSR's continued moderate credit profile
and small scale of operations. According to the provisional
financials for FY15, revenue was INR124m (FY14: INR 119m),
interest coverage was 2.4x (2.4x) and net leverage was 2.9x
(2.8x). The company's operating margins continued to be moderate
at 11.6% in FY15 (FY14: 12.3%).
KSR's liquidity position continued to be tight with the almost-
full use of its working capital limits during the 12 months ended
September 2015.
The ratings continue to benefit from KSR's promoter's decade-long
experience in the construction business and the company's
established track record of executing contracts for the government
and railways. The ratings also benefit from KSR being a Class 1
contractor for the Public Works Department and Indian Railways in
Hospet, Karnataka.
RATING SENSITIVITIES
Positive: A substantial improvement in the scale of operations
while maintaining the credit metrics will be positive for the
ratings.
Negative: Detoriation in the profitability will be negative for
the ratings.
COMPANY PROFILE
Formed in 1954, KSR is a proprietorship entity engaged in civil
construction work. It executes several government and Indian
railway orders on tender basis. The main customers of the entity
are Public Works Department and Indian Railways. The company is
managed by K. Sadasiva Reddy.
K. VENKATA: ICRA Assigns B+/A4 Rating on INR3.95cr Loan
-------------------------------------------------------
ICRA has assigned the short term rating of [ICRA]A4 to INR0.55
crore non fund based (enhanced from 0.25 crore) facilities of
K. Venkata Ramana Murthy & Others. ICRA has also assigned the
ratings of [ICRA]B+/[ICRA]A4 to INR3.95 crore unallocated
(enhanced from 0.00 crore) limits of KVRMO. ICRA also has long
term rating of [ICRA]B+ outstanding for INR5.50 crore fund based
limits of KVRMO and short rating of [ICRA]A4 outstanding on
INR0.25 crore non fund based limits of the firm.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based Limits 5.50 [ICRA]B+ (outstanding)
Non Fund Based Limits 0.55 [ICRA]A4 (assigned/
outstanding)
Unallocated Limits 3.95 [ICRA]B+/[ICRA]A4
(assigned)
The reaffirmation of the ratings continues to be constrained by
KVRMO's weak financial profile characterized by low profitability
indicators, high gearing and modest coverage indicators, small
scale of operations in the intensely competitive rice milling
industry restricting operating margins and risks arising from
partnership nature of the firm. The rating is further constrained
agro climatic risks, which can affect the availability of the
paddy in adverse weather conditions. ICRA also notes that change
in government policy on levy rice also has adversely affected the
firm's revenues. The rating is however supported by the long track
record of the promoters in the rice mill business, ease in paddy
procurement due to proximity of the plant in major paddy
cultivating region of the country, and favorable demand prospects
of the industry with India being the second largest producer and
consumer of rice internationally augurs well for the firm.
Going forward, the firm's ability to increase its scale of
operation and improve its profitability while managing its working
capital requirements will be key rating sensitivities from credit
perspective.
Founded in 1985 as a partnership firm, K. Venkata Ramana Murthy &
Others (KVRMO) is engaged in the milling of paddy and produces raw
rice. KVMRO has taken the production facility of Sri Ratna Rice
Mill on lease, which was founded in 1984 as a proprietorship
concern with K.V. Ramana Murthy as proprietor. Since 1985, the
mill has been leased to K.Venkata Ramana Murthy & Others at a
lease rental of INR3.00 lakh per annum (revised from INR1.50 lakh
per annum in April 2013). The lease term is renewed every 5 years.
The rice mill is located at Pithapuram village of East Godavari
district, Andhra Pradesh with milling capacity of 8 tons per hour.
Recent Results
KVRMO has reported an operating income of INR27.29 crore and net
profit of INR0.06 crore respectively in FY2014 as against an
operating income and net profit of INR27.84 crore and INR0.11
crore in FY2015 (provisional and unaudited).
KANSARA FORGE: ICRA Assigns B+ Rating to INR3.50cr Term Loan
------------------------------------------------------------
ICRA has assigned its long-term rating of [ICRA]B+ to the INR6
crore fund based facilities and short term rating of [ICRA]A4 to
the INR2 crore non fund based facilities of Kansara Forge & Wires
Private Limited (KFWPL).
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based Limits-
Cash Credit 2.50 [ICRA]B+; assigned
Fund Based Limits-
Term Loan 3.50 [ICRA]B+; assigned
Non Fund Based
Limits- Letter of
Credit 2.00 [ICRA]A4; assigned
ICRA's ratings are constrained by the relatively small scale of
operations of the company with operating income of INR12.54 crore
in 2014-15 and the weak financial profile characterized by low
profitability, moderate gearing and coverage indicators. The
ratings also take into account the highly fragmented and
competitive industry structure which limits the pricing
flexibility of the company and the vulnerability of the company's
profitability to any adverse fluctuations in the raw material
prices. The ratings, however, favourably factor in the extensive
experience of the promoters in rollers and bearings industry and
the diverse and reputed client base of the Kansara Group.
Going forward, the ability of the company to increase its scale of
operations and bring about a sustained improvement in its
profitability and coverage ratios will be the key rating
sensitivities.
KFWPL, incorporated in 2000, is engaged in manufacturing of steel
drawn wires used for the manufacturing of rollers for bearings.
The company was founded by the Kansara Group and began its
commercial operations from January 2013. The manufacturing unit is
located at Jodhpur with an annual production capacity of 12 metric
tonnes (MT) per day as on 31st March 2015.
The Kansara Group (also known as Sewaram Kansara Group) has 5
units engaged in manufacturing of rollers and bearings, which are
further used for automotive applications. The company manufactures
all types of rollers, like cylindrical, spherical, tapered and
flat-end needles for bearings with the brand name 'SK' engraved.
The promoter group has long standing experience in manufacturing
of rollers, with presence in the domain since 1964. The five
running plants of the promoter group are certified as Quality
Management System (QMS) ISO 9001:2008 and TS 16949 by TUV
(Germany).
Recent Results
As per its provisional financials for 2014-15, the company
reported a net profit of INR0.03 crore on an operating income of
INR12.54 crore, as against a net profit of INR0.02 crore on an
operating income of INR9.82 crore in the previous year.
KUTTANADU VIKASANA: CRISIL Assigns 'B' Rating to INR11.5MM Loan
---------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable' rating to the long-term
bank facility of Kuttanadu Vikasana Samithy (KVS).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term
Bank Loan Facility 11.5 CRISIL B/Stable
The rating reflects KVS's small scale of operations with
geographic concentration, modest capitalisation, and exposure to
risks inherent in the microfinance industry. These weaknesses are
partially offset by strong track record in Kuttanadu (Kerala).
Outlook: Stable
CRISIL believes KVS's scale of operations will remain small and
geographically concentrated, and capitalisation will remain
modest, over the medium term. The outlook may be revised to
'Positive' if KVS significantly improves scale of operations and
capitalisation. Conversely, the outlook may be revised to
'Negative' if asset quality and profitability deteriorate,
impacting capitalisation.
KVS is a non-profit organisation based in Kuttanadu. It is
registered under the Travancore'Cochin Literary, Scientific &
Charitable Societies Registration Act 12 of 1955, and is owned and
controlled by the Archdiocese of Changanasserry. Father Thomas
Peelianickal oversees its operations. KVS was registered in 1979
It forms self-help groups and joint liability groups and links
them to banks for loans for income-generating activities such as
backyard poultry, kitchen gardening, dairying, goat rearing, paddy
farming, and fish farming. KVS also runs Government of India's
programmes for development of villages in Kuttanadu.
For 2014-15 (refers to financial year, April 1 to March 31), KVS
reported surplus of INR0.09 million on total income of INR3.0
million, against surplus of INR0.07 million on total income of
INR1.2 million for the previous year.
MADHUSUDAN GARAI: ICRA Assigns 'B' Rating to INR3.5cr Loan
----------------------------------------------------------
ICRA has assigned a long term rating of [ICRA]B to the INR3 crore
cash credit limit and INR3.5 crore bank guarantee facility of
Madhusudan Garai.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based Limit-
Cash Credit 3.0 [ICRA]B Assigned
Non-Fund Based
Limit-Bank Guarantee 3.5 [ICRA]B Assigned
The assigned rating takes into account MG's small scale of
operations at present with limited profits and cash accruals from
core operations, the high working capital intensity of business
that adversely impacts the liquidity situation as reflected by
fully utilized working capital limits and the highly competitive
nature of the industry, coupled with a tender based contract
awarding system followed by Government departments that keeps
margins for the entity under check. Moreover, ICRA notes that net
profitability for the entity is largely supported by income
received from its group entity. The rating also takes into
consideration the entity's exposure to high geographical
concentration risks, with operations being primarily limited to
the state of West Bengal and the vulnerability of its
profitability to adverse movement in raw material prices, although
presence of price variation clause in most of the contracts
mitigates this risk to an extent. The rating also takes note of
the experience of the promoter of over three decades in the civil
construction business, the moderate financial risk profile of MG
as reflected by low gearing and modest debt coverage indicators,
and the favourable customer profile consisting of government and
semi-government bodies leading to limited counter party credit
risks. Moreover, the entity has a moderate outstanding order book
position of around INR41.36 crore (2.55 times of OI of FY15) as in
August 2015, which provides revenue visibility for the short to
medium term. However, the entity remains exposed to risks
associated with its status as a proprietorship concern, including
the risk of capital withdrawal. In ICRA's opinion, MG's ability to
increase its scale of operations and profit levels from its core
operations while managing its working capital requirements
efficiently would be key rating sensitivities going forward.
Established in the year 1979 as a proprietorship concern,
Madhusudan Garai is engaged in the business of civil construction
for various Government departments in the state of West Bengal.
The firm is registered as a class I contractor with Central Public
Works Department (CPWD) of New Delhi. The registered office for
the entity is located in Nadia district in West Bengal.
Recent Results
During FY15, as per the provisional results, MG has reported a
profit before tax (PBT) of INR0.95 crore on an operating income
(OI) of INR16.23 crore as compared to a PBT of INR0.79 crore on an
OI of INR12.41 crore during FY14.
MANGLAM COTTON: ICRA Reaffirms B Rating on INR6.30cr Loan
---------------------------------------------------------
ICRA has reaffirmed the [ICRA]B rating assigned to the long term
fund based facilities of INR6.30 crore of Manglam Cotton
Industries.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Tern Fund
Based-Cash Credit 6.30 [ICRA]B reaffirmed
The reaffirmation of rating takes into account MCI's weak
financial profile characterized by low profitability, stretched
capital structure and modest debt coverage indicators as well as
modest scale of operations coupled with de-growth in operating
income in FY2014 and FY2015. The rating further takes into account
limited value additive nature of operations and the highly
competitive and fragmented industry structure. The rating also
continues to remain constrained by the vulnerability of the firm's
profitability to raw material prices which are subject to
seasonality, and crop harvest; and the regulatory risks with
regard to MSP fixed by GoI and restrictions on cotton exports.
Further, ICRA notes that MCI is a partnership firm and any
withdrawals from the capital account could impact the net worth
and thereby the gearing levels.
The rating, however, continues to favourably factor in the
experience of the firm's promoters in the cotton ginning industry
and the advantage the firm enjoys by virtue of its location in the
cotton producing belt of Mehsana (Gujarat).
Established in 2008, Manglam Cotton Industires (MCI) is as a
partnership firm and is engaged in the ginning and pressing of raw
cotton. The firm also trades in cotton bales. The firm's
manufacturing facility is located at Mehsana, Gujarat and is
equipped with 24 ginning and 1 pressing machine with total
production capacity of 225 bales per day (assuming three shifts of
operations). Two of the partners namely; Mr. Mayur Patel and Mr.
Vijaybhai Ganatara are involved into the day to day operations of
the firm.
Recent Results
For the year ended March 31, 2015 (provisional financials), the
firm reported an operating income of INR22.49 crore and profit
before tax of INR0.05 crore against operating income of INR30.70
crore and profit before tax of INR0.26 crore for the year ended
March 31, 2014.
MARUTI BITUMEN: ICRA Assigns B Rating to INR3.50cr Cash Loan
------------------------------------------------------------
The long term rating of [ICRA]B has been assigned to the INR5.85
crore long term fund based facilities of Maruti Bitumen Private
Limited (MBPL). ICRA has also assigned short term rating of
[ICRA]A4 to the INR4.00 crore short term non fund based facilities
(sublimit of long term fund based facility) of MBPL.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 3.50 [ICRA]B assigned
Invoice Finance
Facility 1.00 [ICRA]B assigned
Term Loan 0.60 [ICRA]B assigned
Working Capital
Demand Loan 0.75 [ICRA]B assigned
Letter of Credit 2.00 [ICRA]A4 assigned
Bank Guarantee 2.00 [ICRA]A4 assigned
The assigned ratings are constrained by the weak financial profile
of the company characterized by weak profitability indicators,
aggressive capital structure and modest size of operations which
is largely dependent on the pace at which new projects are awarded
and delays faced by the on-going projects. ICRA further notes that
the profitability remains exposed to adverse movement in bitumen
prices, however the risk is partly mitigated as prices are revised
every two weeks. ICRA also notes high customer concentration with
top ten customer contributing ~90 % of total sales during FY 2015,
the vulnerability of profitability of the company to volatility in
foreign currency as well as stiff competition faced by MBPL from
organized and unorganized players in the industry.
The ratings, however, favourably factor in the longstanding
experience of the promoters in the allied businesses like road
construction and manufacturing of construction chemicals, reputed
and established client profile which comprises of medium and large
sized civil contractors and favorable long term demand of bitumen
supported by government impetus on road construction activity.
Incorporated in 2009, Maruti Bitumen Private Limited (MBPL) is
engaged in manufacturing of various grades of modified bitumen,
emulsions and construction chemicals. The company is currently
managed by Mr. Tehsingh Chowdhary and Mr. Chaitanya Shah who hold
more than a decade of experience in road and dam construction and
manufacturing of construction chemicals. MBPL carries out its
operations from Chhatral, Gujarat whereby it has installed plant
to process 3,60,000 MTPA of bitumen.
Recent Results
For the year ended 31st March 2015 (provisional financials), MBPL
has reported an operating income of INR78.75 crore and profit
before tax of INR0.59 crore as against an operating income of
INR19.32 crore and PAT of INR0.25 crore for the year ended 31st
March 2014.
MITTAL COAL: CRISIL Cuts Rating on INR100MM Cash Loan to D
----------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facility of
Mittal Coal Traders (MCT; part of the Mittal Coal group) to
'CRISIL D' from 'CRISIL B+/Stable'. The downgrade reflects recent
instances of delay by MCT in servicing its debt because of weak
liquidity.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 100 CRISIL D (Downgraded from
'CRISIL B+/Stable')
The Mittal Coal group has a weak financial risk profile because of
high gearing and below-average debt protection metrics. However,
it benefits from promoters' extensive experience in the coal
trading industry.
For arriving at its rating, CRISIL has combined the business and
financial risk profiles of Mittal Coal Co. (MCC) and MCT. This is
because the two entities, together referred to as the Mittal Coal
group, are in the same line of business, and are owned and managed
by the same promoter family.
MCC and MCT are proprietorship firms based in Zirakhpur (Punjab)
and established in 2000 and 2005, respectively. They primarily
trade in coal. MCC's operations are managed by Mr. Ramesh Mittal.
His wife Ms. Anita Mittal manages MCT.
NANDI CPVC: ICRA Suspends B- Rating on INR5.0cr Loan
----------------------------------------------------
ICRA has suspended [ICRA]B- rating assigned to the INR5.00 crore
fund based facilities, [ICRA]A4 rating assigned to the INR5.00
crore non-fund based facilities and [ICRA]A4 rating assigned to
the INR2.50 crore fund based/non fund based limits of Nandi CPVC
Pipe Products 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.
Flagship enterprise of Nandi Group. The company manufactures PVC
pipes, Ring Fit pipes, agricultural pipes HDPE pipes, Water
Storage containers, flexible hoses, casing pipes, Electrical,
Plumbing and submersible pipes.
NAVDURGA AGRO: CRISIL Reaffirms B Rating on INR80MM Cash Loan
-------------------------------------------------------------
CRISIL's rating on the long-term bank facility of Navdurga Agro
Industries (NAI) continues to reflect its modest scale of
operations in the highly competitive agricultural commodities
industry, and its weak financial risk profile marked by high
gearing and below-average debt protection metrics. These rating
weaknesses are partially offset by the extensive industry
experience of NAI's proprietor in the agricultural commodity
industry.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 80 CRISIL B/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes NAI will continue to benefit over the medium term
from its proprietor's industry experience. The outlook may be
revised to 'Positive' if the firm reports large cash accrual or if
its capital structure improves significantly due to equity
infusion. Conversely, the outlook may be revised to 'Negative' if
NAI's accrual is lower than expectation because of reduced order
flow or profitability, or if its financial risk profile
deteriorates, most likely because of a stretch in the working
capital cycle or substantial debt-funded capital expenditure.
Update
In 2014-15 (refers to financial year, April 1 to March 31), NAI's
sales were around INR416 million against INR256 million in 2013-
14. Operating margin, however, declined to 2.65 per cent from 4.9
per cent over this period on account of competitive pricing by the
firm in order to increase market share and customer base. The
working capital requirements continue to remain high driven by
higher debtor and inventory days. CRISIL expects NAI's business
risk profile to remain constrained due to the modest scale of its
operations. The financial risk profile continues to remain weak
because of high gearing of over 4 times as on March 31, 2015. Its
interest coverage and net cash accruals to total debt ratios were
1.3 times and 0.04 time, respectively, in 2014-15. The firm's bank
lines were highly utilised at an average of 90 per cent during the
12 months through August 2015. NAI is expected to report accrual
of INR 3.5 million as against no repayment obligation, over the
medium term.
Set up in 2009, NAI is a proprietorship firm promoted by Unjha
(Gujarat)-based Mrs. Dakshaben Patel. The firm processes melon
seed kernels and trades in cattle feed.
NEOLITE ZKW: Ind-Ra Hikes Long-Term Issuer Rating to 'IND BB'
-------------------------------------------------------------
India Ratings and Research (Ind-Ra) has upgraded Neolite ZKW
Lightings Private Limited's (NZKWL) Long-Term Issuer Rating to
'IND BB' from 'IND BB-'. The Outlook is Stable. Rating actions on
NZKWL's bank loans are as follows:
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term loan 340 Upgraded to Long-term
'IND BB'/Stable from 'IND BB-'
Fund-based limits 280 Upgraded to Long-term 'IND
BB'/Stable from 'IND BB-' and
affirmed at Short-term
'IND A4+'
Non-fund-based 87.50 Affirmed at Short-term
Facility 'IND A4+'
KEY RATING DRIVERS
The upgrade reflects Ind-Ra's expectation of a significant
increase in NZKWL's revenue and EBITDA margins in FY16 on healthy
monthly work orders due to the efficient utilisation of machinery
leading to better operating leverage.
The upgrade also reflects an improvement in the company's
financial and credit profile. According to the provisional
financials for FY15 (year end March), NZWKL's revenue was
INR1,186.49m (FY14: 957.92m), EBITDA margins were 7.08% (6.55%),
interest coverage ratio (operating EBITDA/gross interest expense)
was 1.05x (0.95x) and leverage ratio (total Ind-Ra adjusted net
debt/operating EBITDAR) was 7.85x (10.36x).
The ratings continue to draw support from the promoter's over two-
decade-long experience in manufacturing automotive lighting and
from the company's strong clientele.
The ratings remained constrained by NZKWL's stressed liquidity
position as evident from its almost-full use of the working
capital limits for the 12 months ended September 2015.
RATING SENSITIVITIES
Negative: A decline in the operating margins leading to weak
credit metrics will be negative for the ratings.
Positive: A significant increase in the revenue along with an
improvement in the credit profile will be positive for the
ratings.
COMPANY PROFILE
Incorporated in October 1992, NZWKL is a leading manufacturer of
automotive lighting systems. The company has its head office as
well as a new plant in Bahadurgarh (Haryana). This new plant is
dedicated to manufacturing supplies for its large original
equipment manufacturer customer segment. This state-of-the-art
factory is equipped to meet the specifications of high end
passenger cars and has an in house R&D facility to increase the
speed of prototype development. The company has an aftermarket in
Gurgaon (Haryana) which provides supplies for nearly all makes and
models in the retail market.
NIRBHAI TEXTILES: ICRA Suspends B+ Rating on INR40cr Bank Loan
-------------------------------------------------------------
ICRA has suspended the [ICRA]B+ ratings assigned to the INR40.00
crore bank limits of Nirbhai Textiles Private Limited. The
suspension follows ICRA's inability to carry out a rating
surveillance in the absence of the requisite information from the
company.
Nirbhai Textiles Private Limited, promoted by Mr. Parmod Kumar
Sukhija and his family, is engaged in manufacture of woven fabric
primarily for suitings and shirtings. The company was incorporated
in 1994 and acquired by current promoters in 1997, who were
earlier engaged in outsource of fabric manufacturing since 1987.
NTPL's manufacturing unit is located in Ludhiana (Punjab) which is
equipped with 82 looms with annual production capacity of 6.9
million meter. The company sells the fabric in domestic market
through a network of distributors.
NOTANDAS GEMS: Ind-Ra Assigns 'IND BB' Long-Term Issuer Rating
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Notandas Gems
Private Limited (NGPL) a Long-Term Issuer Rating of 'IND BB'. The
Outlook is Stable. The agency has also assigned the company's
INR80m fund-based facilities an 'IND BB' rating with a Stable
outlook and an 'IND A4+' rating.
KEY RATING DRIVERS
The ratings reflect NGPL's small scale of operations and moderate
credit metrics. According to the unaudited financials for FY15,
revenue was INR412m (FY14: INR350m), net leverage was 4.6x (7.6x)
and EBITDA interest coverage was 2.3x (1.4x). However, the company
has no long-term debt on its books.
The ratings also factor in the company's moderate liquidity
position with the fund-based facilities being utilised at an
average of 96% over the 12 months ended August 2015. EBITDA
margins have been stable at around 4%-6% over the four years ended
March 2015.
The ratings benefit from the over nine decades of experience of
the founders in the gold and diamond jewellery trading segment and
the established brand Notandas under which the company sells its
jewellery.
RATING SENSITIVITIES
Positive: Substantial growth in the revenue with improvement in
the profitability resulting in the credit profile being sustained
could be positive for the ratings.
Negative: A substantial decline in the revenue or profitability
leading to deterioration in the credit profile could be negative
for the ratings.
COMPANY PROFILE
NGPL was incorporated in 1984 by Mr Harikishan Jagwani and his
family. The company manufactures and trades gold and diamond
studded gold jewelry.
R RAJAN: ICRA Assigns B+ Rating to INR5.0cr LT Loan
---------------------------------------------------
ICRA has assigned a long-term rating of [ICRA]B+ to the INR5.00
crore fund based facility of R Rajan (Government Contractor) BRK
Constructions. ICRA has also assigned a short-term rating of
ICRA]A4 to the INR1.50 crore non fund based facilities of BRK.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Fund
Based Facility 5.00 [ICRA]B+ assigned
Short Term Non
Fund Based Facility 1.50 [ICRA]A4 assigned
The ratings assigned take into account the extensive experience of
the promoter in the construction sector spanning over two decades,
the healthy track record of the firm in completing several
projects in and around Trivandrum district as well as the
diversified nature of BRK's operations with capability to
undertake construction of buildings, bridges and roads etc. The
ratings also take into account the healthy order book position of
the firm as on September 2015, providing revenue visibility in the
near to medium term with limited counterparty risks as majority of
contracts are with government entities. However, the ratings are
constrained by the modest scale of operations of the firm with
thin operating and net profitability; high geographical
concentration risks with major portion of contracts undertaken in
and around Trivandrum district and the high working capital
intensity of the firm driven by a high receivable position owing
to delay in payments from customers. The ratings also take into
consideration the stretched capital structure of the firm with
elevated gearing and stretched coverage indicators as well as the
weak cash flows resulting from the weak profitability during
FY2014-15 and increase in working capital facilities.
BRK is a proprietorship concern firm founded in 2000. The firm is
a Class A registered contractor, carrying out major construction
works for organizations like PWD, CPWD, ISRO, IISER, KPHCC Ltd.,
etc for the past 15 years. Mr. Rajan, the proprietor of the firm,
has an experience of 25 years in the construction sector. The firm
mostly undertakes work in an around Trivandrum district though
they have undertaken works in other districts of Kerala and Tamil
Nadu as well. BRK employs over 100 employees and owns all the
necessary machines and equipments required for its operations. The
firm also owns an asphalt drum mixing plant.
Recent results
BRK recorded a net profit of INR0.60 crore on an operating income
of INR18.0 crore during FY 2014-15 as per the provisional
financial statements; as against a net profit of INR0.5 crore on
an operating income of INR10.4 crore during FY 2013-14 as per the
audited financial statements.
RADHESHYAM COTTEX: ICRA Reaffirms B+ Rating on INR8.60cr Loan
-------------------------------------------------------------
ICRA has reaffirmed the long term rating of [ICRA]B+ to the
INR8.60 crore cash credit facility and INR0.37 crore term loan
facility of Radheshyam Cottex.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based-Cash
Credit 8.60 [ICRA]B+ reaffirmed
Fund Based-Term
Loan 0.37 [ICRA]B+ reaffirmed
The reaffirmation of rating continues to factor in Radheshyam
Cottex's (RC) modest scale of operations and financial profile
characterized by thin profitability and weak debt coverage
indicators. ICRA also takes note of the highly competitive and
fragmented industry structure and the limited value additive
nature of operations, which leads to pressure on profitability.
The rating further incorporates the vulnerability of margins to
adverse movement in agricultural produce prices as reflected by
current low cotton prices on account of reduced imports by China,
as well as slow domestic demand from spinning units. Also, being a
partnership firm, any substantial withdrawal by the partners can
have an adverse impact on the capital structure of the firm.
The rating, however, continues to factor in the experience of
partners in the cotton industry and the favorable location of the
firm giving it easy access to high quality raw cotton. The rating
also considers the supply arrangement made with Arvind Limited
thereby supporting the increased volumes.
Radheshyam Cottex was acquired from M/s Shah Govardhandas
Bhikharidas and established in November 2010 as a partnership firm
by Mr. Mahavirsinh Vala and four other partners. It is engaged in
the ginning and pressing of raw cotton. The manufacturing unit is
located at Jasdan, Dist. Rajkot in Gujarat. It is equipped with 20
ginning machines and one pressing machine with an installed
capacity to produce 15780 cotton bales per annum. Partners namely,
Mr. Ashokbhai Chanv, Mr. Ghanshyambhai Chanv and Mr. Pradeepbhai
Chanv actively manage the operations of the firm.
Recent Results
In FY15 (unaudited provisional financials), the firm reported an
operating income of INR53.07 crore and net profit of INR0.21 crore
against an operating income of INR46.87 crore and net profit of
INR0.15 crore in FY14.
RAJPUTANA INDUSTRIES: ICRA Rates INR14.90cr Term Loan at B+
-----------------------------------------------------------
ICRA has assigned its long term rating of [ICRA]B+ to the INR18.50
crore fund based bank facilities of Rajputana Industries Private
Limited. ICRA has assigned its short term rating of [ICRA]A4 to
the INR8.25 crore non fund based bank facilities of RIPL. ICRA has
also assigned its long-term rating of [ICRA]B+ and its short term
rating of [ICRA]A4 to the INR8.25 crore unallocated bank
facilities of RIPL.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Fund Based
Facility-Term Loan 14.90 [ICRA]B+; Assigned
Long-term Fund Based
Facility- Cash Credit 3.60 [ICRA]B+; Assigned
Non Fund Based Limits
LC 8.00 [ICRA]A4; Assigned
Non Fund Based Limits
Bank Guarantee 0.25 [ICRA]A4; Assigned
Unallocated 8.25 [ICRA]B+/[ICRA]A4;
Assigned
ICRA's ratings take into account RIPL's nascent stage of
operations as commercial production started recently, in July
2015; the debt funding of the capital expenditure towards setting
up the manufacturing facility which has resulted in a leveraged
capital structure and weak debt protection metrics. The limited
value additive products along with the fragmented nature of the
industry are expected to result in low profitability and cash
accruals from operations. The profitability is further susceptible
to fluctuations in copper prices, however sale arrangements with
sister concerns and the company's policy of maintaining low
inventory levels, limits the risk. The assigned ratings, however,
positively factor in the extensive experience of the promoters in
copper rod/wire manufacturing in other concerns, to which RIPL is
expected to sell majority of its products. The products of the
company have numerous applications across diverse industries such
as power transmission and distribution, telecommunications and
electrical equipments, which are expected to result in steady
demand.
Going forward, the company's ability to ramp up its scale of
operations in a profitable manner and attain optimal levels of
working capital intensity will be the key rating sensitivities.
Established in June 2011, RIPL has been promoted by Mrs. Shivani
Sheikh and is a part of the Shera Group. The company is engaged in
manufacturing of copper and copper alloy products viz. Mother
tubes, Rods and wires, etc along with PCC poles (Pre-stressed
Cement Concrete poles) and transformers at its facility located at
Sikar (Rajasthan). The commercial production has started in July
2015. The aggregate capacity of metal products is 6,360 metric
tonnes per annum (MTPA) while the capacity for manufacturing of
PCC poles is 18,000 pieces per annum and transformer (upto 40KVA)
is 3,000 units per annum. RIPL was primarily set up as a backward
integration measure to support the other group concerns viz. Shera
Energy Private Limited and Shera Metal Private Limited.
RAVINA HEALTH: CRISIL Reaffirms B Rating on INR160MM Term Loan
--------------------------------------------------------------
CRISIL's rating on the long-term bank facility of Ravina Health
Care Private Limited (RHPL) continues to reflect RHPL's exposure
to risks related to the implementation of its hospital project in
Chennai. This weakness is partially offset by its promoters'
extensive experience in the healthcare industry.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Term Loan 160 CRISIL B/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes RHPL will benefit over the medium term from its
promoters' extensive industry experience. The outlook may be
revised to 'Positive' if the hospital stabilises its operations
earlier than expected, resulting in higher-than-expected accrual.
Conversely, the outlook may be revised to 'Negative' if
significant cost or time overrun is reported in the project, thus
weakening the financial risk profile.
RHPL, incorporated in 2011, is promoted by five doctors: Dr. K
Senthil, Dr. A Sreenivasulu, Dr. M A Srinivasarao, Dr. M V
Sathyanarayana, and Dr. Surya Prakash Irakam. The company is
constructing a multi-speciality hospital in Chennai.
RK ELECTRICAL: ICRA Suspends B Rating on INR9cr Bank Loan
---------------------------------------------------------
ICRA has suspended [ICRA]B assigned to INR9.00 crore bank
facilities of RK Electrical Industries. The suspension follows
ICRA's inability to carry out a rating surveillance in the absence
of the requisite information from the company.
S.N.N. TEXTILES: ICRA Assigns B+ Rating to INR10cr Term Loan
------------------------------------------------------------
ICRA has assigned a long-term rating of [ICRA]B+ to the INR10.00
crore term loan facilities and INR5.00 crore fund based facilities
of S.N.N. Textiles Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term loan facilities 10.00 [ICRA]B+ assigned
LT-Fund based facilities 5.00 [ICRA]B+ assigned
The assigned rating factors in the experience of promoter in the
textile industry andthe fiscal benefits in terms of interest
subsidy under the RR-TUF (Revised Restructured Technology Up-
gradation Fund) scheme. However, the rating is constrained by
STPL's limited operational history with company commencing
operations from early H2, FY15 and its small scale of operations
which limits benefits from economies of scale. Further, limited
product diversification in a highly fragmented industry
characterised by intense competition restricts the company's
pricing flexibility thereby exposing the margins to volatility in
cotton and yarn prices. The company's financial profile is
characterised by stretched capital structure and coverage
indicators with the manufacturing facilities set up being
primarily debt-funded. ICRA also takes note of the commencement of
commercials operations of its expansion project of 4,800 spindles
towards the end of September 2015. Going forward, the ability of
the company to stabilise its operations and generate sufficient
accruals from business to meet the debt obligations remain key
rating sensitivities.
STPL, incorporated in 2013 at Coimbatore, is engaged in the
manufacturing and selling of cotton yarn. The company manufactures
carded cotton yarn in the relatively coarser count range of 30s to
40s. Its manufacturing facility is located in Coimbatore (Tamil
Nadu) and operateswith a total installed capacity of 14,400
spindles. The company also has installed wind turbines with a
generation capacity of 600 kW.
Recent Results
According to the unaudited financials, the Company reported a net
loss of INR0.1 crore on an operating income of INR10.1 crore
during 2014-15.
SHANKAR INDUSTRIES: CRISIL Reaffirms B Rating on INR69.5MM Loan
---------------------------------------------------------------
CRISIL's rating on the long-term bank facilities of Shankar
Industries Rice Mill (SIRM) continues to reflect SIRM's below-
average financial risk profile because of high gearing, weak debt
protection metrics, and moderate scale of operations in the
intensely competitive and regulated rice processing industry.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 69.5 CRISIL B/Stable (Reaffirmed)
The rating also factors in the susceptibility to vagaries of the
monsoons, and volatility in raw material prices. These weaknesses
are partially offset by the promoters' extensive industry
experience.
Outlook: Stable
CRISIL believes SIRM will benefit over the medium term from its
promoters' extensive industry experience. The outlook may be
revised to 'Positive' if the scale of operations improves with
better working capital management, resulting in higher-than-
expected net cash accrual, and a consequent enhancement in the
financial risk profile. Conversely, the outlook may be revised to
'Negative' if any large, debt-funded capital expenditure programme
is undertaken, or an increase in the working capital cycle is
reported, thereby weakening the liquidity. Any decline in
profitability weakening the financial risk profile may also result
in a 'Negative' outlook revision.
SIRM was established as a partnership firm in Raichur (Karnataka)
in 1977. The firm is a rice mill and is currently managed by the
promoters - Ms. R Vijayalakshmi and her sons, Mr. R Pavan Kumar
and Mr. R Raghavendra.
SIRM on a provisional basis reported profit after tax (PAT) of
INR3.12 million on total revenue of INR478.43 million in 2014-15
(refers to financial year, April 1 to March 31) as against PAT of
INR3.9 million on net sales of INR345.53 million in 2013-14.
SHREE KANKESHWARI: Ind-Ra Assigns 'IND BB+' LT Issuer Rating
------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Shree Kankeshwari
Agro Private Limited (SKAPL) a Long-Term Issuer Rating of 'IND
BB+'. The Outlook is Stable. The agency has also assigned the
following ratings to SKAPL's bank loans:
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed fund-based 200 'Provisional IND BB+'/Stable
facilities
Proposed long-term
Loan 75 'Provisional IND BB+'/Stable
Proposed non-fund-based 8.5 'Provisional IND A4+'
Facility
Fund-based facilities 150 'IND BB+/Stable'
KEY RATING DRIVERS
The ratings reflect SKAPL's moderate credit metrics and tight
liquidity position. According to the provisional financials for
FY15, net leverage (total adjusted net debt/operating EBITDAR) was
5.9x (FY14:6.4x) and interest coverage (operating EBITDA/gross
interest expense) was 1.6x (1.6x). The company's use of the fund-
based facilities was 98.3% on average over the 12 months ended May
2015.
The ratings also consider the ongoing capex towards increasing the
capacity to 17 tonnes of rice processing per hour (tph) (current
capacity of 5 tph) which is likely to commercialise during the
last quarter of FY16. Revenue for FY15 was INR801m (FY14: INR768m)
and profitability ranged from 1.5%-3% over FY11-FY14.The ratings
derive support from the promoters' experience of over two decades
in the same line of business.
RATING SENSITIVITIES
Positive: Stabilisation of operations of the new capacity leading
to a substantial increase in the scale and a sustained increase in
the profitability and credit metrics will be positive for the
ratings.
Negative: Failure to improve the profitability leading to
deterioration in EBITDA interest coverage will be negative for the
ratings.
COMPANY PROFILE
SKAPL was originally incorporated as a proprietorship concern in
2005 under the name Shree Kankeshwari Agro Industries. It was
converted into a private limited company in 2012. The company
manufactures and trades basmati rice, non-basmati rice, and other
related products. Its manufacturing unit is located in Bavla in
Ahmedabad.
SHRI HARKRISHAN: ICRA Assigns B+ Rating to INR4.50cr Loan
---------------------------------------------------------
ICRA has assigned its long-term rating of [ICRA]B+ to INR6.00
crore bank facilities of Shri Harkrishan Sahib Public Sr. Sec.
School (SHS).
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term loans 1.50 [ICRA]B+; assigned
Overdraft 4.50 [ICRA]B+; assigned
ICRA's rating factors in the experience of the society members in
operating the schools and track record of stable revenue growth
backed by growing occupancy levels lending revenue visibility with
the existing student base. Despite no major fee hikes in the last
three years, gradual increase in occupancy level (currently ~80%)
has resulted in a growing student base and as a result,
consistently increasing revenue receipts over the last three years
leading to yearly net cash surpluses and self sufficiency in terms
of operations. Further, monthly fee collection and unutilized
sanctioned CC limits provide additional comfort with respect to
timeliness of debt repayment.
The rating is however constrained by SHS's modest scale of
operations and declining profitability margins over the last three
years. Given the lower fees charged in accordance with Punjab
State Board norms and fee remittances given to students from the
financially weaker sections, the overall scale of operations is
low as compared to CBSE in the vicinity. The society's capital
structure is also weak with moderate coverage indicators (Gearing
of 2.85x as on March 31, 2015, TD/OS of 5.19x and interest
coverage of 2.37x in FY15). Going forward, the society's ability
to increase the student strength to improve occupancy ratio while
improving margins will remain the key rating sensitivities.
SHS operates two schools in Ludhiana, Punjab; the first K-12
school started operations in 1986 and the second Nur-10th class
school started in the year 2004. SHS has been incorporated by Mr.
Prem Sokhi and his family members. The schools has been affiliated
to Punjab School Education Board (PSEB) and is capable of catering
4640 students, with 2580 students for K-12 school and 2040
students for other school.
Recent results
SHS reported a net surplus of INR0.30 crore on an revenue receipts
(RR) of INR6.56 crore in FY 2014, as compared to a net surplus of
INR0.18 crore on an RR of INR5.32 crore in the previous year.
SPRINT CARS: ICRA Assigns B Rating to INR30cr LT Loan
-----------------------------------------------------
ICRA has assigned its long term rating of [ICRA]B to the INR30
crore bank facilities of Sprint Cars Private Limited. ICRA has
also withdrawn the short term rating of [ICRA]A4 earlier assigned
to the INR30 crore short term facility of SCPL.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Inventory funding
(LT Scale) 30.00 [ICRA]B; assigned
Inventory funding
(ST Scale) - [ICRA]A4; withdrawn
ICRA's rating takes into account the high intensity of competition
SCPL faces from dealers of other passenger car manufacturers such
as Maruti Suzuki India Limited, Hyundai Motors India Limited, Tata
Motors Limited, etc, in the vicinity of the company's area of
operations. The rating also factors in the company's working
capital intensive nature of operations and the company's reliance
on bank borrowings for funding the working capital requirements,
which along with the low net worth base of the company, has
resulted in a highly leveraged capital structure with gearing of
7.84x as on March 31, 2015. The elevated leverage, combined with
modest profitability has resulted in weak coverage indicators,
with interest coverage at 1.18x and NCA/TD at 2% for FY15. The
rating however derives comfort from the extensive experience of
the management in the automobile dealership industry and the
consistent improvement in the operating profit margins over the
years.
Going forward, the company's ability to increase its scale of
operations and register a sustained improvement in its
profitability, while optimally managing its working capital cycle
will be the key rating sensitivities.
SCPL was incorporated in 2012 and is an authorized dealer of
Renault India Private Limited (RIPL). SCPL is engaged in the sale
of vehicles, spares and also provides after sales support.
Presently, the company has sales facilities in the National
Capital Region (NCR) - at Gurgaon (Haryana) and Delhi. Further,
SCPL has two workshops in the NCR, one in Gurgaon and the other in
Delhi.
Recent Results
SCPL, on a provisional basis, reported an operating income of
INR126.22 crore in FY15 and a net profit of INR0.26 crore, as
against an operating income of INR247.63 crore and a net profit of
INR0.30 crore in the previous year.
SR METALLIZERS: ICRA Assigns B Rating to INR12.57cr Term Loan
-------------------------------------------------------------
ICRA has assigned a long-term rating of [ICRA]B to the INR12.57
crore term loan and INR3.5 crore fund-based limits of SR
Metallizers (SRM).
The ratings are constrained by SRM's weak financial profile
characterized by fluctuating profitability, highly leveraged
capital structure and moderate debt coverage indicators. The
ratings also factor in the highly competitive business environment
on account of the fragmented industry structure with limited entry
barriers. The ratings also take into consideration the
susceptibility of the company's profitability and cash flows to
adverse fluctuations in prices of raw materials on account of high
inventory holding period. ICRA notes that the firm's large debt
funded capital expenditure plans may limit the improvement in debt
metrics in the near to medium term. The ratings, however,
favourably take into account the experienced management of the
firm with long track record in textile business, its locational
advantage by the virtue of proximity to raw material sources and
healthy growth in the firm's scale of operations over past few
years.
Established in 2011 by Mr Parasmal Ranka, his brother Mr. Manak
Chand Ranka and their sons, SR Metallizers is a partnership firm
engaged in the business of manufacturing metallic film, lacquer
and kasab jari. The family has been engaged in this activity for
generations and has over the years built a strong customers base
across various product categories in Surat, Gujarat and other
textile markets. The firm's manufacturing facility is located in
Surat and the plant is equipped with one metalizer unit used for
aluminum coating of polyester films, two lacquer coating machines
and 18 slitting machines for production of synthetic jari.
Recent Results
During FY 2015, the company reported Profit after Tax (PAT) of
INR2.2 crore on an operating income of INR52.3 crore. For FY 2014,
the company has reported net loss of INR3.4 crore on an operating
income of INR44.9 crore.
SRE VENKATACHALAPATHY: ICRA Rates INR4.50cr LT Loan at B+
---------------------------------------------------------
ICRA has assigned a long-term rating of [ICRA]B+ to the INR3.95
crore term loans, the INR4.50 crore fund based facilities and
INR2.05 crore proposed facilities of Sre Venkatachalapathy
Textiles. ICRA has also assigned a short-term rating of [ICRA]A4
to the INR1.50 crore non-fund based facilities of the firm.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term-Fund
based facilities 4.50 [ICRA]B+/assigned
Long term-Term Loan 3.95 [ICRA]B+/assigned
Long term-Unallocated 2.05 [ICRA]B+/assigned
Short term-Non fund
based facilities 1.50 [ICRA]A4/assigned
The assigned ratings take into consideration the significant
experience of the promoters in the textile industry, long-standing
relationship with customers and expanding product line which are
expected to support revenue growth. The ratings are, however,
constrained by the moderate financial profile characterized by
high gearing and moderate coverage indicators. Moreover, the
firm's small scale of operations limits the benefits from
economies of scale, which coupled with high competition limits its
pricing flexibility and exposes the margins to volatility in raw
material prices. ICRA also takes note of the risks of capital
continuity and issues of limited disclosures associated with
partnership firms.
Sre Venkatachalapathy Textiles was started by late Mr.
Venkataswamy Naidu in 1988 as a sole proprietorship and was
converted into a partnership firm in 1999. The firm started its
operations as a manufacturer of cotton yarn in 40s count and has
expanded its operations to weaving and yarn dyeing. The firm
currently operates with 13,200 spindles and has a capacity to
manufacture 50,000 meters of grey cloth per week. About 50% of the
yarn manufactured by the firm is sold directly to customers while
the rest is processed further to make fabric.
Recent Results
As per unaudited results, the firm reported a net profit of INR0.1
crore on an operating income of INR24.4 crore during 2014-15 as
against a net profit of INR0.2 crore on an operating income of
INR25.1 crore during 2013-14.
SRI POWER: Ind-Ra Affirms 'IND BB' Long-Term Issuer Rating
----------------------------------------------------------
India Ratings and Research (Ind-Ra) has revised Sri Power
Generation (India) Private Limited's (Sri Power) Outlook to Stable
from Negative while affirming its Long-Term Issuer Rating at 'IND
BB'. Ind-Ra has also affirmed Sri Power's bank loan ratings as
follows:
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Long-term loans 51 Affirmed at 'IND BB'/Stable
Non-fund-based limit 31.5 Affirmed at 'IND A4+'
KEY RATING DRIVERS
The Outlook revision reflects the removal of constraints placed on
Sri Power's plant due to the unavailability of grid. This resulted
in an increase in the plant load factor (PLF) and consequently, an
increase in revenue. Unaudited FY15 financials indicate revenue of
INR70m (FY14: INR64m) and PLF in the range of 18%-20% (14%-15%).
However, the scale of operations remains small.
The Stable Outlook also reflects the receipt of dues from Indian
Renewable Energy Development Agency Limited (IREDA) in September
2014 (due since April 2013) which were used to reduce debt. Total
outstanding debt at FYE15 reduced to INR188m from INR242m at
FYE14.
The affirmation reflects the continued profitable operations of
Sri Power's two solar power generation plants. The ratings also
factor in the continuing improvement in Sri Power's credit metrics
with FY15 unaudited financials indicating interest coverage of
2.6x (FY14: 2.0x) and net leverage of 2.4x (3.8x). Liquidity
remains comfortable as the company continues to work without any
fund-based facilities.
The ratings continue to derive support from the company's long-
term power purchase agreements with Southern Power Distribution
Company of Andhra Pradesh Ltd, Central Power Distribution Company
of Andhra Pradesh Ltd and IREDA.
The ratings remain constrained by the dependence of the PLF on
climatic conditions.
RATING SENSITIVITIES
Positive: An increase in the PLF leading to the interest coverage
being sustained above 3.0x could lead to a positive rating action.
Negative: A sustained reduction in the revenue or profitability
leading to deterioration in the credit metrics and liquidity
profile will be negative for the ratings
COMPANY PROFILE
Sri Power develops solar power projects using photo voltaic
technology. It has two solar power plants in Andhra Pradesh, one
in Varadaipalem, Chittor District with a 2MW capacity and another
of 1MW capacity in Kadiri, Anantapur District.
SVS FOOD: ICRA Revises Rating on INR6.58cr Fund Based Loan to B-
----------------------------------------------------------------
ICRA has revised the long-term rating to [ICRA]B- from [ICRA]B to
INR6.58 crore fund based limits (revised from INR7.00 crore) for
bank limits of SVS Food Processors Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based limits 6.58 [ICRA]B- revised from
[ICRA]B
The rating revision takes into account the weak financial profile
of the company characterized by modest scale of operations,
operating losses incurred in FY15 resulting from low capacity
utilizations and higher operating overheads, highly geared capital
structure and stretched liquidity position, given significant
repayment obligations in the near term. The rating continues to be
constrained by inherently low value additive nature of food
processing industry; and risks inherent in an agro based business
like flour milling including vulnerability towards the changes in
government policies and raw material supply risks as the level of
harvest and quality of wheat are highly dependent on agro climatic
conditions. The rating, however, favourably factors demand outlook
of wheat products in India and the location of plant in proximity
to end user industry with sales profile dominated by institutional
customers.
Going forward, ability of the company to scale up its operations,
improve profitability and capital structure is the key rating
sensitivity from credit perspective.
SVS Food Processors Private Limited (SVSPL) is incorporated as a
private limited company in the year 2012. The company had set up a
flour mill with 60000 TPA capacity and the unit is located on a 3
acres land at Singannaguda Village, Medak district, Telangana,
which is around 43 kms from the Hyderabad. The company is promoted
by Mr. D. Narendra Reddy and Mr.CH. Narsimha Reddy.
Recent Results
According to unaudited results, the company reported net loss of
2.17 crore on an operating income of 22.89 crore for FY2015 as
against net loss of INR0.51 crore on an operating income of
INR0.77 crore during FY2014.
SWASTIK TRADERS: ICRA Assigns B+ Rating to INR4cr Cash Loan
-----------------------------------------------------------
ICRA has assigned its long term rating of [ICRA]B+ and its short
term rating of [ICRA]A4 to the INR13 crore bank limits of Swastik
Traders.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 4.00 [ICRA]B+; (Assigned)
Letter of Credit 9.00 [ICRA]A4; (Assigned)
ICRA's ratings are constrained by the intensely competitive,
limited value additive and fragmented nature of Swastik's trading
business which limits its pricing flexibility and results in thin
profit margins. The ratings are further constrained by the
vulnerability of the firm's profitability to fluctuations in raw
material prices and variations in foreign exchange rates. The
ratings also take into account Swastik's weak financial profile
characterised by low cash accruals and high TOL/TNW. ICRA also
takes into account the risks associated with the partnership
constitution of the firm which exposes it to risks in terms of
continuity, capital infusions and withdrawals. The ratings,
however, derive comfort from the extensive experience of the
promoters in trading of polymers; the firm's long standing
association with its customers and suppliers and the low working
capital intensity of its operations.
Going forward, the ability of the firm to attain a sustained
improvement in its profitability will be the key rating
sensitivity.
Swastik was established as a partnership firm in 1981 by Mr
Sukhbir Singh Agarwal, Mr Prashant Agarwal and Ms Neeta Agarwal
for trading in polymers. It is an established importer and trader
of commodity polymers like poly vinyl chloride (PVC), Low-density
polyethylene (LDPE), High-density polyethylene (HDPE), Linear Low-
density polyethylene (LLDPE) fillers, master batches, poly
ethylene terephthalate (PET) and plasticizers, having its network
across the National Capital Region and Uttar Pradesh.
Recent Results
In 2014-15, Swastik reported a net profit of INR0.20 crore on an
operating income of INR60.20 crore, as against a net profit of
INR0.15 crore on an operating income of INR63.90 crore in the
previous year.
VERSATILE MOBILE: CRISIL Reaffirms B+ Rating on INR88.5MM Loan
--------------------------------------------------------------
CRISIL's ratings on the bank facilities of Versatile Mobile
Distributors Pvt Ltd (VMDPL) continue to reflect VMDPL's
established regional presence in the mobile phone distribution
business, aided by the promoters' extensive industry experience.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 51.5 CRISIL A4 (Reaffirmed)
Cash Credit 88.5 CRISIL B+/Stable (Reaffirmed)
The ratings also reflect improved business risk profile driven by
increased scale of operations and strong financial risk profile
because of high total outside liabilities to tangible net worth.
These weaknesses are partially offset by VMDPL's weak debt
protection metrics because of low interest coverage ratio and
insufficient liquidity because of high bank limit utilization.
Outlook: Stable
CRISIL believes VMDPL will benefit over the medium term from its
promoters' extensive industry experience. The outlook may be
revised to 'Positive' if the scale of operations and profitability
significantly increase, thus improving the debt protection
metrics, or if large equity is infused by its promoters.
Conversely, the outlook may be revised to 'Negative' if the
working capital requirement is more than expected or if a large,
debt-funded capital expenditure programme is undertaken, thus
weakening the financial risk profile.
VDMPL, incorporated in 2008, is a distributor of mobile phones of
brands such as Apple and HTC. It operates mainly in Hyderabad and
is promoted by Mr. V Ramesh and Mr. T Manohara Rao.
For 2014-15 (refers to financial year, April 1 to March 31), VMDPL
a provisional profit after tax (PAT) of INR1.7 million on revenue
of INR1.12 billion (INR1.3 million and INR 740 million,
respectively, for 2013-14).
VIJAY STEEL: CRISIL Assigns B+ Rating to INR80MM Cash Loan
----------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-term
bank facility of Vijay Steel Traders (VST).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 80 CRISIL B+/Stable
The rating reflects VST's below-average financial risk profile,
because of a small net worth, an aggressive capital structure and
subdued debt protection metrics. The rating also factors in the
low profitability and susceptibility to intense competition and to
volatility in prices of traded goods. These rating weaknesses are
mitigated by the partners' extensive experience in trading of
structural steel products and funding support.
For arriving at the ratings, CRISIL has treated unsecured loans of
INR45.3 million from partners, family members and associates as
neither debt nor equity. This is because these are sub-ordinated
to bank debt and are expected to be retained in the business over
the medium term.
Outlook: Stable
CRISIL believes that VST will benefit over the medium term from
its partners' extensive industry experience. The outlook may be
revised to 'Positive' in case VST's financial risk profile
improves significantly, due to sizable cash accrual or equity
infusion from partners. Conversely, the outlook may be revised to
'Negative' if the financial risk profile, particularly liquidity
deteriorates due to decline in cash accrual or stretched working
capital cycle.
VST was incorporated in 2012, in Pune as a partnership firm by Mr.
Vikram Bansal, Mr. Hansraj Singal and Ms. Neetu Bansal. It trades
in structural steel products like hot-rolled coils and sheets,
cold-rolled coils and sheets, mild steel plates, angles, channels,
flats, tubes and thermo-mechanically treated bars.
* INDIA: To Overhaul Century-Old Bankruptcy Laws
------------------------------------------------
Vrishti Beniwal at Bloomberg News reports that Prime Minister
Narendra Modi is poised to overhaul Indian bankruptcy laws that
date back a century in a bid to get his reform agenda back on
track after a series of setbacks.
This week, a government-backed committee plans to submit
recommendations to the Finance Ministry for a bill that may be
tabled during the parliament session starting next month,
Bloomberg relates. Unifying more than four overlapping sets of
rules, the code aims to slash the time it takes to wind up a dying
company or recover dues from a defaulter, according to Bloomberg.
"People who thrive on delays will suffer," Bloomberg quotes T.K.
Vishwanathan, head of the drafting panel, as saying in an
interview in New Delhi. "The current law is creditor-unfriendly.
We will balance it."
According to Bloomberg, Modi has seen his reform agenda stall in
recent months, leading to declines in stocks and the currency as
China's slowdown leads to increased global volatility. Opponents
have blocked a vote on a national sales tax first proposed in
2006, and Modi backtracked in August on moves to make it easier
for companies to acquire land for development projects, Bloomberg
recalls.
"Investor patience is running out and the government needs to push
through at least one big-banner reform," Kaushik Das, an economist
at Deutsche Bank AG, wrote in an Oct. 15 report, Bloomberg relays.
"The bankruptcy code will help reorganize a stressed business in a
short span of time without endless litigation which erodes the
viability of an enterprise."
Under India's current bankruptcy laws, individuals can go to jail
for failing to repay just INR500 ($8), the cost of about two
Starbucks espressos, Bloomberg discloses. Under what passes for
insolvency protection for companies, firms need to wait until at
least half of their value is wiped out before seeking any help
from the government.
Creditors in India recover about 25.7 cents on the dollar in the
4.3 years that it takes to resolve insolvency, World Bank data
show, compared with 80.4 cents in the U.S. after less than half
that time, according to Bloomberg. The inability to collect on
dues has also locked up funds at banks, with stressed assets at
the highest level in more than a decade, Bloomberg notes.
The new law will tackle this by providing information on
creditworthiness "at the touch of a button," Vishwanathan, as
cited by Bloomberg, said. Experts brought in to revive or wind up
an ailing company would be strictly regulated to avoid
malpractices, such as support for management that's out to defraud
creditors or deny employees their rights, the report says.
A crucial aspect of the bankruptcy code is protection for
unsecured creditors. Bringing such investors under the law would
give them more confidence to lend to long-term projects such as
building roads, ports and power plants, according to Raghuram
Rajan, governor of India's central bank, Bloomberg relays.
"Failure is inevitable in a free enterprise system," Rajan said in
a speech last month. He called for a "speedy bankruptcy code" to
resolve distress while still maintaining the priority structure of
claims, Bloomberg relays.
About half of India's 575 stalled projects are stuck due to policy
related issues, HSBC Holdings Plc estimates. Formalizing an
effective bankruptcy code, setting up tribunals to tackle
financial distress and recover debt are therefore among critical
reforms needed, economists Pranjul Bhandari wrote in an Oct. 5
report cited by Bloomberg.
Companies in India now can only get help if they've been operating
for at least five years, Bloomberg discloses. They are declared
"sick" only if they've accumulated losses exceeding net worth, and
identified as ailing if they lose 50 percent of its value or fail
to repay debts for three consecutive quarters, Bloomberg notes.
====================
N E W Z E A L A N D
====================
NUBIOTICS: SFO Probes Company Director
--------------------------------------
The New Zealand Herald reports that the Serious Fraud Office is
investigating an exporter of infant milk powder and manuka honey
that receivers said collapsed owing more than NZ$1 million.
The Herald recalls that Nubiotics, owned and directed by Waikato
businessman Trevor Lock, entered receivership and liquidation in
August last year after falling behind on payments to boutique
lender Waikawau Finance.
Nubiotics marketed a range of colostrum-based cosmetics, active
manuka honey and infant formula accompanied by impressive-sounding
health and scientific claims.
Lock, 54, is described in company literature as having a masters
degree in biotechnology and bio-engineering from Waikato
University and formerly employed by Anchor as a nutraceuticals
development manager, according to the Herald. Reports prepared by
receiver McDonald Vague show the company had been accepting
deposits to provide products, but "had failed to complete" the
agreements, the Herald discloses.
According to the Herald, the company's main asset was listed as
NZ$5.1 million of trade debtors, but on further investigation this
number rapidly shrank.
"The director initially advised that the cashbook was incorrect,
and there was only one debtor who owed $363,314, and that the
balance related to contracts that had not been commenced or been
completed. He subsequently advised that the remaining balance was
irrecoverable, confirming that no supply had been made to the
associated debtor," McDonald Vague's first report into Nubiotics
said, the Herald relays.
The Herald notes that financing statements filed with the
companies office show the NZ$400,000 loan from Waikawau was
secured against accounts receivable.
According to the report, Waikawau director Sharon Connolly, who
owns the boutique financier with her husband, said the loan made
in March 2014 was intended to be short-term and its defaulting was
part of the reason her company had moved out of lending and into
property development.
"It was supposed to be only for four weeks, but 18 months later
we're still in court with him trying to get paid," the Herald
quotes Ms. Connolly as saying.
She said Lock made various excuses as to why his debtors weren't
paying up -- first that produce was stuck on the wharf in
Tauranga, then China -- but it was later revealed these excuses
were hollow, the report relates.
According to the Herald, Ms. Connolly said they were pursuing Lock
in bankruptcy proceedings -- the next hearing will be in the High
Court at Hamilton on November 2 -- in order to protect the public.
"We're never going to see our costs back from it -- or our
original capital back from him," she said.
The Herald has spoken to a number of Nubiotics customers based in
New Zealand, Australia and further abroad -- owed nearly
NZ$800,000 in total -- who told a similar tale of incomplete
contracts following agreements to export infant milk formula for
sale in China. They said Mr. Lock's repeated stories promising
delivery of the product or refunds of deposits -- ranging from
imminent logging contracts in India to honey sales in Egypt --
repeatedly fell through, the Herald says.
The Herald relates that a spokesperson for the Serious Fraud
Office confirmed the white-collar crime agency was investigating
the case, but there was no further comment as the case was still
active.
Receiver Jared Booth of McDonald Vague said there would be a
considerable shortfall to creditors, but proceeds from the sale of
Mr. Lock's home were still to be distributed, the Herald relays.
Mr. Lock did not return calls or emails, and his residence in
Morrinsville was recently sold by receivers. The four-bedroom
property sold for NZ$392,000 at auction in August, but mortgages
and prior charges will see less than NZ$100,000 made available to
Nubiotics creditors, according to the Herald.
Since Nubiotics collapsed, Mr. Lock has registered two new
entities with the companies office, Central Brokers and Oak On Elm
Holdings. According to information provided to the companies
office, these companies, respectively, provide mortgaging broking
and management consultancy services, adds the Herald.
=====================
P H I L I P P I N E S
=====================
MONDRAGON: Investors Warned Against Bidding For CDC Estate
----------------------------------------------------------
Vince Alvic Alexis F. Nonato of BusinessWorld Online reports that
creditors of the Mimosa Leisure Estate's (MLE) original developer
warned investors against joining the privatization efforts
launched by the Clark Development Corp.
In a notice published in a major newspaper, the developer's
creditors said any lease agreement with the CDC would be null and
void due to the government's failure to take prior agreements with
them into account, BusinessWorld relates.
On Oct. 27, CDC is due to bid out the property, which it took over
in 1999 after developer Mondragon Leisure and Resorts Corp.
defaulted on its rental payments, the report says.
BusinessWorld relates that the special purpose vehicle for secured
creditors, however, said it would be forced to foreclose on MLE's
assets and pursue legal action "to protect (their) rights,
including that against the colluding winning bidder."
The notice, signed by Asset Pool "A" (SPV-AMC), Inc. legal counsel
Mary Jane G. Rile, claimed the Terms of Reference violated the
2004 memorandum of agreement with CDC on the protection of
creditors' rights, according to the report.
BusinessWorld says the creditors, who funded the MLE, held their
claims in abeyance in exchange for CDC's assurance of a percentage
of casino proceeds and the protection of their rights in the
privatization.
"The present Terms of Reference violates the MOA and not even the
Indemnification clause . . . took into consideration the rights
and interest of the secured creditors," the notice read, the
report relays.
It added that CDC did not inform the public of the existence of
liens and encumbrances, and pending foreclosure cases, says
BusinessWorld.
BusinessWorld notes that the notice pointed out to the Supreme
Court's 2005 decision in the case of G.R. No. 154188, where it
upheld creditors' rights to foreclose the collateral leasehold
rights over the MLE.
"While the secured creditors continue to support the privatization
efforts of MLE by CDC, it can only do so under conditions that its
rights, liens and interests in MLE are protected," the notice, as
cited by BusinessWorld, read.
At filing time, BusinessWorld could not reach for comment CDC
Vice-President Evangeline G. Tejada, who chairs the agency's
Special Asset Privatization Committee.
=================
S I N G A P O R E
=================
FCI ASIA: S&P Puts 'BB-' CCR on CreditWatch Positive
----------------------------------------------------
Standard & Poor's Ratings Services said that it had placed its
'BB-' long-term corporate credit rating and 'axBB+' long-term
ASEAN regional scale rating on FCI Asia Pte Ltd. on CreditWatch
with positive implications. S&P also placed its 'BB-' long-term
issue ratings on FCI Asia's senior secured revolving credit
facility and guaranteed term loan on CreditWatch with positive
implications. FCI Asia is a Singapore-based connector
manufacturer.
The CreditWatch placement follows S&P's expectation that Amphenol
Corp. (BBB+/Stable/A-2), a U.S.-based manufacturer of connectors
and interconnect systems, will complete its acquisition of FCI
Asia within the next three months. Most of the regulatory
approvals have been obtained, FCI Asia's worker councils support
the transaction, and both companies expect to complete the deal by
the end of 2015 (subject to obtaining all regulatory approvals).
"We expect FCI Asia to benefit from its strategic relationship
with a higher-rated parent," said Standard & Poor's credit analyst
Katsuyuki Nakai. "We see FCI Asia as a strategic fit with
Amphenol, which will own 100% of the company. We anticipate that
Amphenol will repay FCI Asia's debt. In addition, the change in
ownership could positively affect our assessment of FCI Asia's
financial policy."
The acquisition will not materially change Amphenol's credit
profile. In S&P's view, the acquisition will bring revenue and
cost synergies because the two companies have complementary
connector product offerings and could leverage on their existing
sales channels. Although Amphenol's ratio of debt to EBITDA is
likely to increase to about 2x, given the likely use of cash and
debt to fund the transaction, S&P expects leverage to decline
modestly to the high-1x area over the next two years based on the
company's good free operating cash generation.
S&P expects to resolve the CreditWatch placement on FCI Asia in
the next three months on the completion of the acquisition by
Amphenol.
"We will consider Amphenol's group strategy and its commitment to
FCI Asia to assess the level of group support," said Mr. Nakai.
"We will also consider Amphenol's business integration policy
after the acquisition."
S&P believes that the rating on FCI Asia can go up by at least one
notch if the acquisition is completed in the next three months.
S&P will affirm the rating if the acquisition does not happen.
*********
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
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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 ***