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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, February 10, 2016, Vol. 19, No. 28
Headlines
A U S T R A L I A
ASIAFEST PTY: Event Organizer Placed Into Liquidation
AUSSIE TROLLEYS: Grant Thornton Appointed as Administrators
GALLERY HOMEWARES: First Creditors' Meeting Set For Feb. 17
MARTELCO PTY: In Liquidation; First Meeting Set For Feb. 19
SINO AUSTRALIA: Court Declares Administrator Appointment Valid
I N D I A
A D ELECTRO: CRISIL Reaffirms B+ Rating on INR110MM Cash Loan
AADITYA FINECHEM: Ind-Ra Assigns 'IND BB+' LT Issuer Rating
ACCRETE PHARMACEUTICALS: CRISIL Suspends B+ Rating on INR50M Loan
AUM REALITY: ICRA Suspends 'B+' Rating on INR8.0cr LT Loan
BABA BHUMAN: ICRA Assigns 'B' Rating to INR17cr Loan
BAJRANG GINNING: ICRA Assigns B+ Rating to INR8.0cr Cash Loan
BASUDEB AUTO: CRISIL Reaffirms 'B' Rating on INR102.5MM Loan
BHARAT FOOD: ICRA Upgrades Rating on INR20.65cr Cash Loan to B
BITCORP PRIVATE: CRISIL Upgrades Rating on INR127.5MM Loan to B
CABLE CORPORATION: CRISIL Suspends 'D' Rating on INR388.5MM Loan
CHOICE BOARDS: CRISIL Reaffirms B+ Rating on INR57.5MM Cash Loan
COASTAL OIL: Ind-Ra Suspends 'IND D' Rating on INR6.4BB Loan
COREY ORGANICS: CRISIL Ups Rating on INR140MM Cash Loan to 'B'
DESMO EXPORTS: CRISIL Cuts Rating on INR310MM Loan to 'D'
FAROOQ CONSTRUCTIONS: ICRA Ups Rating on INR12cr Loan to B-
FUTURE VISION: CRISIL Reaffirms 'B' Rating on INR50MM Cash Loan
KAMALA TEA: CRISIL Reaffirms 'D' Rating on INR119.4MM Loan
KASTURI MULTI: CRISIL Reaffirms 'B+' Rating on INR60.9MM Loan
KHANNA PROPERTIES: CRISIL Cuts Rating on INR395MM Term Loan to D
KIRI INDUSTRIES: Ind-Ra Withdraws 'IND D' Long-term Issuer Rating
KOMMLABS DESIGN: ICRA Withdraws 'B' Rating on INR5cr Loan
KUBER TEXLEN: ICRA Assigns 'B+' Rating to INR6.25cr LT Loan
KUMAR MOTOR: ICRA Reaffirms 'B' Rating on INR3.90cr Term Loan
KVK BIO: Ind-Ra Downgrades Working Capital Loan Rating to 'IND D'
KWALITY FOUNDRY: ICRA Assigns B+ Rating to INR7.69cr Loan
M/S B. NEHAL: ICRA Cuts Rating on INR66cr Loan to 'D'
MAHALAXMI COAL: CRISIL Cuts Rating on INR30MM Cash Loan to 'B'
MAHAVIR EDUCATIONAL: ICRA Reaffirms B- Rating on INR5.07cr Loan
MOTIA TOWNSHIP: ICRA Upgrades Rating on INR15cr Term Loan to B
N.K. POLYMERS: ICRA Suspends 'B' Rating on INR4.0cr Loan
NAPTHA RESINS: ICRA Suspends 'C' Rating on INR16.50cr Loan
NAVIN COLD: CRISIL Lowers Rating on INR55MM Cash Loan to 'D'
NISARG JEWELS: ICRA Withdraws 'B' Rating on INR8.0cr Loan
PAL SYNTHETICS: ICRA Reaffirms 'B-' Rating on INR8.80cr Loan
PALAK FERRO: ICRA Lowers Rating on INR13.80cr LT Loan to 'D'
PAVAN COTTON: ICRA Reaffirms B+ Rating on INR6.32cr LT Loan
PREMIER POULTRY: Ind-Ra Assigns 'IND BB+' Long-Term Issuer Rating
PRO MINERALS: CRISIL Suspends B+ Rating on INR4.62BB Term Loan
ROCKLAND HOSPITALS: ICRA Suspends 'D' Rating on INR264.96cr Loan
SAI CONSTRUCTION: Ind-Ra Withdraws'IND B+' LT Issuer Rating
SAMHI HOTELS: Ind-Ra Suspends 'IND BB' Long-Term Issuer Rating
SHELAR PROPERTIES: CRISIL Reaffirms B- Rating on INR240MM Loan
SHIV SHAKTI: ICRA Suspends B+ Rating on INR10cr LT Loan
SHREE BADRI: CRISIL Assigns 'B+' Rating to INR150MM Cash Loan
SHREE SAINARAYAN: CRISIL Cuts Rating on INR115MM Cash Loan to D
SHREE SHYAM PULP: Ind-Ra Suspends 'IND D' Long-Term Issuer Rating
SHRI HARI: CRISIL Lowers Rating on INR124.6MM LT Loan to 'B'
SIKSHA - O - ANUSANDHAN: ICRA Assigns B+ Rating to INR115cr Loan
SMSG AUTOMART: CRISIL Assigns B+ Rating to INR35MM Term Loan
SONAKI CERAMIC: CRISIL Suspends B Rating on INR66.5MM Term Loan
SUBHAM ENTERPRISES: CRISIL Assigns 'B' Rating to INR10MM Loan
SUDHIR AGRO: ICRA Reaffirms B+ Rating on INR4cr Cash Loan
SUNDERNAGAR INTEGRATED: ICRA Suspends B+ Rating on INR8.5cr Loan
SUPER HI-TECH: CRISIL Reaffirms B+ Rating on INR50MM Cash Loan
THAKAR DASS: ICRA Assigns B+ Rating to INR6.0cr Loan
THE TRAVANCORE: ICRA Reaffirms 'B' Rating on INR20cr LT Loan
TIJIYA ENGINEERING: CRISIL Reaffirms 'B' Rating on INR10MM Loan
TRANSONS OVERSEAS: CRISIL Reaffirms 'B' Rating on INR25.8MM Loan
TRISTAR TRADELINKS: Ind-Ra Withdraws 'IND BB-' LT Issuer Rating
UNITED BROTHERS: ICRA Assigns 'B+' Rating to INR3.0cr Cash Loan
VIR FOODS: ICRA Ups Rating on INR16cr Cash Loan to 'B'
VIKAS SANITARY: CRISIL Raises Rating on INR32.5MM Loan to B+
WOODVILLE PALACE: CRISIL Assigns 'B-' Rating to INR200MM Loan
J A P A N
TOSHIBA CORP: Faces Tight Deadline for Restructuring Plan
TOSHIBA CORP: May Sell White Goods Business to Foreign Rival
P H I L I P P I N E S
FARMERS' RURAL: Former Officers, Employees Charged With Theft
V I E T N A M
SHIPBUILDING INDUSTRY: Restructures 225 Affiliates
X X X X X X X X
* Steelmakers Face Another Year of Pain With Closures, Job Losses
- - - - -
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A U S T R A L I A
=================
ASIAFEST PTY: Event Organizer Placed Into Liquidation
-----------------------------------------------------
Cliff Sanderson at Dissolve.com.au reports that Asiafest Pty Ltd
has been placed into liquidation. Nicholas David Cooper of
Worrells Solvency and Forensic Accountants has been appointed
liquidators of the company on Feb. 4, 2016, the report discloses.
The company is behind the Asiafest event held in 2015 in Adelaide.
According to the report, some of the event's performers claimed
they have not been paid for their performance. The liquidator has
not yet evaluated the total debts owed, the report notes.
AUSSIE TROLLEYS: Grant Thornton Appointed as Administrators
-----------------------------------------------------------
Stephen Robert Dixon and Ahmed Bise of Grant Thornton were
appointed as administrators of Aussie Trolleys Pty Ltd on Feb. 9,
2016.
GALLERY HOMEWARES: First Creditors' Meeting Set For Feb. 17
-----------------------------------------------------------
Michael Slaven and Henry Kazar of Ernst & Young were appointed as
administrators of The Gallery Homewares Pty Ltd on Feb. 5, 2016.
A first meeting of the creditors of the Company will be held at
Fife Room, Wagga RSL, Corner Kincaid & Dobbs Street, in Wagga
Wagga, on Feb. 17, 2016, at 12:00 p.m.
MARTELCO PTY: In Liquidation; First Meeting Set For Feb. 19
-----------------------------------------------------------
Timothy Clifton and Daniel Lopresti of Clifton Hall were appointed
Joint and Several Liquidators of Martelco Pty Ltd on Feb. 4, 2016.
As a result of the Liquidation, the operations of the Company have
ceased effective immediately.
A meeting of creditors will be held at 2:00 p.m. on Feb. 19, 2016,
at Clifton Hall, Level 3, 431 King William Street, in Adelaide.
SINO AUSTRALIA: Court Declares Administrator Appointment Valid
--------------------------------------------------------------
The Federal Court has delivered its judgment on an application by
the Australian Securities and Investment Commission seeking a
declaration that the appointment of Mr Christopher Darin and Mr
Matthew Jess as administrators of Sino Australia Oil and Gas
Limited (SAO) was invalid, void and of no effect.
Justice Davies made a declaration in the Federal Court in
Melbourne that the appointment of Mr Darin and Mr Jess as
administrators of SAO on May 4, 2015, was valid. It follows that
Mr Darin and Mr Jess are entitled to their remuneration in an
amount to be determined by the Court.
In making the declaration, Justice Davies was satisfied on the
evidence before the Court the SAO board was able to, and did, form
an opinion as to the likely insolvency of the company in the
future, notwithstanding that the board did not have up-to-date
financial accounts for the company. Justice Davies found that at
the time of the Board resolution, the Board did have up-to-date
information about the affairs of SAO and its operating subsidiary,
which was neither shown to be wrong or an inadequate basis upon
which to form an opinion about lack of solvency.
Justice Davies was also satisfied that the Board gave genuine
consideration to the question of solvency and the evidence did not
support the inference that the real purpose of the appointment of
Mr Darin and Mr Jess as administrators of SAO was to deal with the
dysfunction in the management of the company.
On May 4, 2015, the directors of SAO appointed Mr Darin and Mr
Jess as administrators of the company. That appointment was
terminated on 21 May 2015 upon the appointment by the Court of Mr
Peter McCluskey as provisional liquidator to SAO.
ASIC's legal action against SAO and its former chairman, Mr
Tianpeng Shao, is continuing.
About Sino Australia
Sino Australia Oil and Gas Limited is the Australian holding
company of a Chinese operating company providing specialised
drilling services to the oil and gas industry. SAO was listed on
the Australian Securities Exchange Limited (ASX) on Dec. 12, 2013,
after raising nearly AUD13 million under an initial public
offering (IPO).
In March 2013, ASIC obtained an injunction on an urgent basis
arising from concerns that SAO was about to transfer
AUD7.5 million -- representing almost the entire cash held by SAO
in Australia -- to bank accounts in China for purposes that were
not disclosed, or not properly disclosed, in SAO's prospectus
documentation during the IPO. That injunction was extended by the
Court on a number of occasions thereafter.
In November 2014, ASIC commenced proceedings against SAO and and
its former chairman, Mr Tianpeng Shao, seeking financial penalties
against SAO and a disqualification order against Mr Shao.
=========
I N D I A
=========
A D ELECTRO: CRISIL Reaffirms B+ Rating on INR110MM Cash Loan
-------------------------------------------------------------
CRISIL's ratings on the bank facilities of A D Electro Steel Co
Private Limited (ADEC) continue to reflect the company's working
capital-intensive operations and exposure to intense competition
in the steel castings industry.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 30 CRISIL A4 (Reaffirmed)
Cash Credit 110 CRISIL B+/Stable (Reaffirmed)
Export Packing
Credit 10 CRISIL A4 (Reaffirmed)
Proposed Long Term
Bank Loan Facility 30 CRISIL B+/Stable (Reaffirmed)
These rating weaknesses are partially offset by the extensive
industry experience of the company's promoters and a moderate
financial risk profile because of an above-average networth and
low gearing.
Outlook: Stable
CRISIL believes ADEC will continue to benefit over the medium term
from the extensive industry experience of its promoters. The
outlook may be revised to 'Positive' in case of an improvement in
liquidity, primarily led by efficient working capital management
or an increase in scale of operations while stable profitability
is maintained. Conversely, the outlook may be revised to
'Negative' if low net cash accrual, a stretched working capital
cycle, or any large debt-funded capital expenditure weakens the
financial risk profile.
Set up in 1981 and based in Kolkata, ADEC manufactures steel and
iron castings of diverse specifications that comprise low and high
carbon steel, alloy steel, grey iron casting, malleable iron
casting, and ductile iron casting. Operations are managed by Mr. R
N Gupta.
AADITYA FINECHEM: Ind-Ra Assigns 'IND BB+' LT Issuer Rating
-----------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Aaditya Finechem
Private Limited (AFPL) a Long-Term Issuer Rating of 'IND BB+'. The
Outlook is Stable.
KEY RATING DRIVERS
AFPL's ratings reflect its moderate scale of operations as well as
credit profile. In FY15, revenue was INR799.2m (FY14: INR560.6m),
gross interest coverage (operating EBITDA/net interest expenses)
was 4.6x (4.7x), and net financial leverage (total Ind-Ra adjusted
net debt/operating EBITDA) was 0.7x (1.7x). EBITDA margins were
low at 2.1% during FY15 (FY14: 2.0%). The ratings also consider
AFPL's presence in a highly fragmented and intense competitive
chemicals trading industry.
The ratings consider the promoter's two-decade-long experience in
the detergent chemicals trading business. The rating is supported
by the company's strong relationships with its customers and
suppliers.
RATING SENSITIVITIES
Positive: A substantial increase in the revenue along with an
improvement in the credit metrics will be positive for ratings.
Negative: Deterioration in operating profitability leading to
deterioration in the credit metrics will be negative for ratings.
COMPANY PROFILE
AFPL has its registered office in Jaipur. It trades detergent
chemicals used for industrial purposes. The entity has seven
operational branches at various locations and has a wide client
network. The procurement of goods is mainly domestic and it also
imports goods from China, Russia and Thailand. The management of
the company is actively handled by Mr. Deepak Jhunjhunwala, Mr
Bhuvnesh Sharma and Ms. Vandana Jhunjhunwala.
AFPL's ratings:
-- Long-Term Issuer Rating: assigned 'IND BB+'/Stable
-- INR20 million fund-based working capital limit: assigned 'IND
BB+/'Stable/'IND A4+'
-- INR40.0 million non fund-based working capital limit:
assigned 'IND A4+'
ACCRETE PHARMACEUTICALS: CRISIL Suspends B+ Rating on INR50M Loan
-----------------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of Accrete
Pharmaceuticals Private Limited (APPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bill Discounting 2.5 CRISIL A4
Cash Credit 20.0 CRISIL B+/Stable
Letter of Credit 7.5 CRISIL A4
Long Term Loan 20.0 CRISIL B+/Stable
Proposed Long Term
Bank Loan Facility 50.0 CRISIL B+/Stable
The suspension of ratings is on account of non-cooperation by APPL
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, APPL is yet to
provide adequate information to enable CRISIL to assess APPL's
ability to service its debt. The suspension reflects CRISIL's
inability to maintain a valid rating in the absence of adequate
information. CRISIL considers information availability risk as a
key factor in its rating process as outlined in its criteria
'Information Availability - a key risk factor in credit ratings'.
Incorporated in 2004, APPL is engaged in the manufacturing of
oncology related pharmaceutical intermediates. Based out of
Hyderabad in Andhra Pradesh the company is promoted by Mr.A.Shyam
Sunder Reddy, Mr.D.N.Mohan Reddy, Mr.Srinivas Aita and
Mr.P.Maheshwar.
AUM REALITY: ICRA Suspends 'B+' Rating on INR8.0cr LT Loan
----------------------------------------------------------
ICRA has suspended the [ICRA]B+ rating, assigned to the INR8.00
crore of fund based facility of Aum Reality. The suspension
follows ICRA's inability to carry out a rating surveillance in the
absence of the requisite information from the firm.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Fund
based limit 8.00 [ICRA]B+ suspended
Established as a partnership firm in February 2013, M/s Aum
Reality commenced the development of its first project viz. Veer
Exotica in April 2013. The project is a residential project
housing 96 two BHK flats with a saleable area of 1335 sq.ft and
and 14 shops with a saleable area of 643sq.ft.The project is
located in the Pal-Adajan area of Surat and the management is
targeting the service class population employed in companies
located in Hajira industrial belt as prospective buyers.
BABA BHUMAN: ICRA Assigns 'B' Rating to INR17cr Loan
----------------------------------------------------
ICRA has assigned its long-term rating of [ICRA]B to the INR3.0
crore term loan and INR17.0 crore working capital facilities of
Baba Bhuman Shah Ji Rice Mills.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term Loan 3.0 [ICRA]B; assigned
Working Capital 17.0 [ICRA]B; assigned
ICRA's rating is constrained by the intensely competitive nature
of the industry in which BSJR operates, which exerts pressure on
its operating margins. The ratings also take into account the
firm's high working capital intensity, with NWC/OI* at 90% for
2014-15. This has resulted in high reliance on bank borrowings,
which coupled with the company's low profitability has resulted in
elevated gearing and weak debt coverage indicators. The firm's
gearing has deteriorated to 8.48 times in 2014-15 from 3.64 times
in 2013-14. ICRA also take note of subdued demand for basmati rice
from overseas markets, coupled with declining prices during the
current financial year. ICRA also takes note of the partnership
constitution of the firm which exposes it to risks of withdrawal
of capital, dissolution etc.
The ratings however, continue to derive support from the firm's
experienced management and its presence in the paddy producing
belt of India, which ensures easy availability of raw material.
The rating also factors in the firm's established relationships
with its customers and the favorable demand outlook for the rice
industry, with India being the second largest producer and
consumer of rice in the world.
Incorporated in 2013, BSJR is a partnership firm engaged in
milling, processing and sorting of basmati and non basmati rice.
The firm has its plant at Fazilka (Punjab) with a milling capacity
and sorting capacity of 6 tonnes per hour each. It undertakes
milling of basmati as well as non-basmati rice, however ~80% of
its revenue is derived from basmati rice. The firm sells its
products directly to its customers as well as through commission
agents. BSJR supplies rice mainly in Delhi, Haryana and Punjab.
The firm sells its products mainly to wholesalers in domestic
markets who further export the same to overseas markets.
Recent Results
The firm achieved an operating income of INR35.66 crore and a net
profit INR0.38 crore in 2014-15, as against an operating income of
INR27.30 crore and a net profit of INR0.40 crore in the previous
year.
BAJRANG GINNING: ICRA Assigns B+ Rating to INR8.0cr Cash Loan
-------------------------------------------------------------
ICRA has assigned a long term rating of [ICRA]B to the INR8.00
crore fund based working capital facility of Bajrang Ginning &
Pressing Factory.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit Limits 8.00 [ICRA]B+;assigned
The assigned rating factors in the weak financial risk profile of
the firm characterized by the modest scale of operations, low
profitability, relatively high gearing levels and weak coverage
indicators. The rating is also constrained on account of the
highly competitive and fragmented industry structure with low
entry barriers leading to suppressed margins and the vulnerability
of the firm's profitability to movements in cotton prices on
account of seasonality. The rating also takes into account the
firm's exposure to regulatory risks, specifically with respect to
minimum support prices and export restrictions. ICRA also notes
that BGPF is a partnership firm and any significant withdrawals
from the capital account would affect its net worth and thereby
its capital structure.
The rating, however, positively factors in the experience of over
three decades of the partners in the cotton industry and the
location advantage enjoyed by the firm by virtue of its location
in the cotton producing belt in Gujarat, an area with easy
availability of raw cotton.
Established in the year 2009, BGPF is a partnership concern
engaged in the business of ginning and pressing of cotton. It is
managed by six partners having an experience of over three decades
in the field of cotton industry. The factory is located at Jasdan
having land area of 2 acres. It is equipped with 24 ginning
machines and 1 pressing machine having capacity to manufacture
~180 cotton bales per day. It also has two group concerns engaged
in trading of raw cotton.
Recent Results
During the financial year FY15, BGPF registered a profit after tax
(PAT) of INR0.13 crore on an operating income of INR47.50 crore.
BASUDEB AUTO: CRISIL Reaffirms 'B' Rating on INR102.5MM Loan
------------------------------------------------------------
CRISIL's rating on the long-term bank facilities of Basudeb Auto
Limited (BAL) continues to reflect below-average financial risk
profile because of small networth and subdued debt protection
measures, and exposure to intense competition in the automotive
dealership business leading to pressure on profitability. These
weaknesses are partially offset by promoters' extensive industry
experience and established relationship with principal Tata Motors
Ltd (TML).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 42.5 CRISIL B/Stable (Reaffirmed)
Channel Financing 102.5 CRISIL B/Stable (Reaffirmed)
Working Capital
Term Loan 5.0 CRISIL B/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes BAL will continue to benefit over the medium term
from its promoters' extensive industry experience and established
relationship with TML. The outlook may be revised to 'Positive' if
financial risk profile improves on account of higher-than-expected
accrual and better working capital management. Conversely, the
outlook may be revised to 'Negative' if financial risk profile,
particularly liquidity, deteriorates because of lower-than-
expected cash accrual, or larger-than-expected working capital
requirement, or sizeable debt-funded capital expenditure.
Update
For 2014-15 (refers to financial year, April 1 to March 31), BAL's
operating income increased 11 percent year-on-year to INR591
million, in line with CRISIL's expectation, driven by higher sales
of TML's passenger vehicles and increase in prices. Revenue is
expected to grow by 5-8 percent in 2015-16, and was at INR435
million till December 31, 2015, during the year. Operating margin
declined to 3.6 percent in 2014-15 from 4.3 percent in 2013-14 on
account of heavy discounts offered to reduce inventory, and
increase in overhead expenses.
Working capital requirement remained large, with gross current
assets of 139 days as on March 31, 2015, driven by inventory and
receivables of 90 days and 37 days, respectively.
BAL's financial risk profile was modest, in line with CRISIL's
expectation. Networth and total outside liabilities to tangible
net worth (TOLTNW) ratio were INR65 million and 3.14 times,
respectively, as on March 31, 2015. Debt protection metrics were
subdued, with interest coverage and net cash accrual to total debt
ratios of 1.2 times and 0.03 time, respectively, for 2014-15. The
financial risk profile is expected to remain modest over the
medium term. Liquidity remained under pressure with insufficient
cash accrual of INR4.7 million against term debt obligation of
INR15 million, and large working capital requirement leading to
high utilisation of working capital line (average of 97 percent
over the 12 months through November 2015).
BAL is based in Ranchi (Jharkhand) was incorporated in 2000 as a
closely held limited company by the Kataruka family. The company
is an authorised dealer of passenger vehicles of TML in four
districts of Jharkhand: Ranchi, Hazaribagh, Ramgarh, and
Daltonganj.
BHARAT FOOD: ICRA Upgrades Rating on INR20.65cr Cash Loan to B
--------------------------------------------------------------
ICRA has revised its long term rating on the INR22.65 crore
(reduced from INR27 crore) fund based limits and INR4.35 crore
(enhanced from nil) unallocated limits of Bharat Food & Agro
Products from [ICRA]BB- to [ICRA]D and has thereafter revised the
rating to [ICRA]B.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 20.65 [ICRA]B; downgraded from
[ICRA]BB-(Stable) to [ICRA]D
and then upgraded to [ICRA]B
Term Loan 2.00 [ICRA]B; downgraded from
[ICRA]BB-(Stable) to [ICRA]D
and then upgraded to [ICRA]B
Long Term Unallocated 4.35 [ICRA]B; downgraded from
[ICRA]BB-(Stable) to [ICRA]D
and then upgraded to [ICRA]B
ICRA's rating action is driven by delays in debt servicing by BFAP
and persistent overutilization of working capital limits, due to
the stretched liquidity position of the company, which had
necessitated restructuring of the working capital limits. However,
following the restructuring, the debt repayment will now commence
from April, 2016 and the utilisation of the working capital limits
has been regularised, ICRA has hence revised the rating from
[ICRA]D to [ICRA]B.
The rating of [ICRA]B reflects the decline in scale of operations
in BFAP's rice milling business, which coupled with the high
intensity of competition in the industry has resulted in net
losses in the past two years .The rating also takes into account
the high working capital intensity of the rice milling business
due to the need to maintain substantial inventories; the resultant
working capital requirements have been funded mainly through bank
borrowings, leading to a highly leveraged capital structure and
weak coverage indicators. The rating also factors in agro climatic
risks, which can affect the availability of paddy in adverse
conditions.
ICRA, however, draws comfort from the extensive experience of the
promoters in the rice industry, proximity of the mill to major
rice growing areas which results in easy availability of paddy and
stable demand outlook, with rice being an important part of the
staple Indian diet.
Going forward, the ability of the firm to increase its scale of
operations in a profitable manner, while maintaining a prudent
capital structure and an optimal working capital intensity, will
be the key rating sensitivities.
Incorporated in 2008, BFAP is a partnership firm engaged in
milling and processing of basmati and non basmati rice. The firm's
plant at Payal, Ludhiana (Punjab) has a milling capacity of 6
tonnes/hour. The firm sells its products under its registered
brand names 'Nature Gold', and 'Royal Taste of India'.
Recent Results
The firm reported a net loss of INR1.24 crore on an operating
income of INR80.29 crore in FY2015, as against a net loss of
INR0.17 crore on an operating income of INR216.48 crore in the
previous year.
BITCORP PRIVATE: CRISIL Upgrades Rating on INR127.5MM Loan to B
---------------------------------------------------------------
CRISIL has upgraded its rating on the long-term bank facilities of
Bitcorp Private Limited (BPL) to 'CRISIL B/Stable' from 'CRISIL B-
/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 127.5 CRISIL B/Stable (Upgraded
from 'CRISIL B-/Stable')
Proposed Long Term 2.5 CRISIL B/Stable (Upgraded
Bank Loan Facility from 'CRISIL B-/Stable')
The upgrade reflects the improvement in BPL's business risk
profile driven by successful ramp-up in its scale of operations,
while it registered moderate profitability margins. The upgrade
also reflects the expectation of a continued improvement in the
company's capital structure on the back of consistent growth in
its net-worth, and absence of any large debt-funded capital
expenditure programme.
In its first full year of operation, BPL is expected to register
revenues of around INR400 million in 2015-16 (refers to financial
year, April 1 to March 31); the operating profit margins of the
company would remain moderate at around 9.0 per cent. There has
also been an improvement in BPL's capital structure with its
gearing expected to decline to 2.9 times as on March 31, 2016 from
4.1 times as on March 31, 2015 on the back of moderate growth in
its net-worth. The gearing is expected to further decline to 2.5
times as on March 31, 2017 on the back of consistent growth in its
net-worth and the absence of any large debt-funded capex plan.
The ratings continue to reflect the company's limited track record
of operations, high degree of customer concentration in its
revenue profile, its large working capital requirements, and its
exposure to intense competition in the tobacco processing
industry. The ratings of the company are also constrained on
account of the susceptibility of its profitability margins to
volatility in tobacco prices, and regulatory risks in the tobacco
industry. The ratings of the company are also constrained on
account of its below-average financial risk profile marked by its
small net worth, high gearing, and below-average debt protection
metrics. These rating weaknesses are partially offset by the
benefits that BPL derives from its promoters' extensive industry
experience in the tobacco industry.
Outlook: Stable
CRISIL believes that BPL will continue to benefit over the medium
term from its promoters extensive experience in the tobacco
industry. The outlook may be revised to 'Positive' if there is a
substantial and sustained improvement in the company's working
capital management, or there is a substantial improvement in its
capital structure on the back of sizeable equity infusion from its
promoters. Conversely, the outlook may be revised to 'Negative' in
case of a steep decline in the company's profitability margins, or
significant deterioration in its capital structure caused most
likely by a stretch in its working capital cycle.
BPL was set up in 1971 by Mr R Hanumantha Rao. The company, based
in the Guntur district of Andhra Pradesh, processes tobacco
leaves. It commenced operations in 2014.
CABLE CORPORATION: CRISIL Suspends 'D' Rating on INR388.5MM Loan
----------------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of Cable
Corporation of India Limited (CCIL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 388.5 CRISIL D
Letter of Credit 300 CRISIL D
Letter of Credit 125 CRISIL D
Letter of Credit 125 CRISIL D
Bank Guarantee 277 CRISIL D
Bank Guarantee 226 CRISIL D
The suspension of ratings is on account of non-cooperation by CCIL
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, CCIL is yet to
provide adequate information to enable CRISIL to assess CCIL's
ability to service its debt. The suspension reflects CRISIL's
inability to maintain a valid rating in the absence of adequate
information. CRISIL considers information availability risk as a
key factor in its rating process as outlined in its criteria
'Information Availability - a key risk factor in credit ratings'.
CCIL, incorporated in 1957, is currently promoted by Hiten Khatau
Group. It manufactures low-tension cables, high-tension cables,
and extra-high-voltage cables. Its manufacturing facility is in
Nashik (Maharashtra). It is also involved in joint development of
a residential and commercial project named Rivali Park in Borivali
(Mumbai); it received income of around INR889 million from this
venture in 2012-13 (refers to financial year, April 1 to March
31). The aforementioned income was utilised to retire the
company's long-term debt.
CHOICE BOARDS: CRISIL Reaffirms B+ Rating on INR57.5MM Cash Loan
----------------------------------------------------------------
CRISIL's ratings on the bank facilities of Choice Boards Private
Limited (CBPL) continue to reflect the company's below-average
financial risk profile marked by its small net worth, moderate
total outside liabilities to tangible net worth ratio, and weak
debt protection metrics.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 57.5 CRISIL B+/Stable (Reaffirmed)
Inland/Import
Letter of Credit 30.0 CRISIL A4 (Reaffirmed)
Proposed Long Term
Bank Loan Facility 12.5 CRISIL B+/Stable (Reaffirmed)
The ratings are also constrained on account of its modest scale of
operations and its exposure to intense competition in the steel
trading business resulting in its low profitability margins. These
rating weaknesses are partially offset by the benefit that the
company derives from its promoters' extensive experience in the
steel and timber industry, and its efficient working capital
management.
Outlook: Stable
CRISIL believes that CBPL will continue to benefit over the medium
term from its promoters' extensive industry experience and its
established relations with customers. The outlook may be revised
to 'Positive' if there is a substantial and sustained increase in
the company's scale of operations and profitability margins, and
if there is substantial improvement in its capital structure on
the back of sizeable equity infusion by its promoters. Conversely,
the outlook may be revised to Negative' in case of a steep decline
in CBPL's profitability margins, or significant deterioration in
its capital structure caused most likely by a stretch in its
working capital cycle or large debt funded capital expenditure.
CBPL was promoted in 1997 by Mrs. Buji Devi Agarwal and her family
members. The company trades in various steel products such as
billets, mild-steel plates, thermo-mechanically treated bars and
timber logs.
For 2014-15 (refers to financial year April1 to March 31), CBPL
reported profit after tax (PAT) of INR1.3 million on net sales of
INR380 million against PAT of INR2 million on net sales of
INR455 million for 2013-14.
COASTAL OIL: Ind-Ra Suspends 'IND D' Rating on INR6.4BB Loan
------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Coastal Oil and
Gas Infrastructure Pvt Limited's (COGIL) INR6,418.5 million senior
project bank loan to 'IND D (suspended)' from 'IND D'.
The rating has been suspended due to lack of adequate information.
Ind-Ra will no longer provide ratings or analytical coverage for
COGIL.
The rating will remain suspended for a period of six months and be
withdrawn at the end of that period. However, in the event the
issuer starts furnishing information during this six-month period,
the rating could be reinstated and will be communicated through a
rating action commentary.
COREY ORGANICS: CRISIL Ups Rating on INR140MM Cash Loan to 'B'
--------------------------------------------------------------
CRISIL has upgraded its rating on the long-term bank facilities of
Corey Organics Private Limited (Corey) to 'CRISIL B/Stable' from
'CRISIL B-/Stable', and has reaffirmed its 'CRISIL A4' rating to
the company's short-term bank facilities.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 140 CRISIL B/Stable (Upgraded
from 'CRISIL B-/Stable')
Letter of Credit 30 CRISIL A4 (Reaffirmed)
Proposed Long Term 88 CRISIL B/Stable (Upgraded
Bank Loan Facility from 'CRISIL B-/Stable')
Term Loan 7 CRISIL B/Stable (Upgraded
from 'CRISIL B-/Stable')
The rating upgrade reflects improvement in Corey's business risk
profile driven by a sustained increase in its scale of operations,
while maintaining its profitability margins. There has been a
sizeable increase in the company's net worth, which has enhanced
financial flexibility, and resulted in subsequent improvement in
the capital structure. Despite a debt-funded capital expenditure
(capex), CRISIL believes that Corey will sustain the improvement
in its financial risk profile over the medium term on the back of
consistent growth in net worth and the sustenance of the
improvement in its working capital cycle.
Corey's revenue is expected to register a year-on-year growth rate
of around 25 per cent to INR500 million in 2015-16 (refers to
financial year, April 1 to March 31), and its operating profit
margin would remain stable at around 10.0 per cent. The company is
undertaking a debt-funded capex of INR80 million in 2016-17
towards enhancing its capacity; 75 per cent of the cost would be
funded by debt and the balance would be funded through equity
infusion. CRISIL believes that the revenues of the company would
register an annual growth of around 15 per cent over the next two
years post the stabilization of its enhanced capacity.
The company's net worth is likely to increase to around INR110
million as on March 31, 2016 from INR79 million as on March 31,
2015 on the back of its moderate accretion to reserves. There has
also been improvement in the company's working capital cycle as
reflected in a decline in its gross current assets to an expected
230 days as on March 31, 2016 from 255 days as on March 31, 2015.
Consequently, the company's gearing is expected to decline to
around 1.5 times as on March 31, 2016 from 2.1 times as on
March 31, 2015. Despite the debt-funded capex, the gearing of the
company is expected to remain moderate at around 1.9 times as on
March 31, 2017 with consistent growth in its net worth and the
sustenance of the improvement in its working capital cycle.
The ratings reflect Corey's modest scale of operations in the
intensely competitive bulk drug and intermediaries industry, its
large working capital requirements, and its exposure to intense
competition in the bulk drugs industry. The ratings of the company
are also constrained on account of its average financial risk
profile, marked by its small net worth, moderate gearing, and
average debt protection metrics. These rating weaknesses are
partially offset by the extensive experience of Corey's promoters
in the pharmaceuticals segment, and its established relations with
customers.
Outlook: Stable
CRISIL believes that Corey will continue to benefit over the
medium term from its promoters' extensive industry experience and
its established relations with customers. The outlook may be
revised to 'Positive' if there is a substantial and sustained
increase in the company's profitability margins, or there is a
further improvement in its working capital management. Conversely,
the outlook may be revised to 'Negative' in case of a steep
decline in the company's profitability margins, or significant
deterioration in its capital structure caused most likely by a
stretch in its working capital cycle.
Corey was set up in 1996 by Mr. Raja Kumar Reddy and his family
members. The company manufactures fine chemicals, pyridine
compounds, and intermediates. The company is based in Hyderabad
(Telangana).
DESMO EXPORTS: CRISIL Cuts Rating on INR310MM Loan to 'D'
---------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facilities
of Desmo Exports Ltd (DEL) to 'CRISIL D' from 'CRISIL BB-/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Letter of Credit 310 CRISIL D (Downgraded from
'CRISIL BB-/Stable')
Letter of Credit 230 CRISIL D (Downgraded from
'CRISIL BB-/Stable')
Cash Credit 50 CRISIL D (Downgraded from
'CRISIL BB-/Stable')
The downgrade reflects devolvement of letter of credit for over 30
consecutive days by DEL. The delays have been caused by weak
liquidity due to a stretch in the working capital cycle.
DEL has a weak financial risk profile because of its small
networth, high total outside liabilities to tangible networth
ratio, and below-average debt protection metrics. The company has
large working capital requirement, and is also exposed to intense
competition in the chemical trading industry resulting in low
profitability margins. However, DEL benefits from the extensive
experience of promoters in the chemicals industry.
Set up in 1993, DEL is promoted by Mr. Dilipkumar Jindal and his
family members. The company trades in chemicals, including citric
acid, phosphoric acid, and paraffin wax, among others. It is based
in Mumbai.
FAROOQ CONSTRUCTIONS: ICRA Ups Rating on INR12cr Loan to B-
-----------------------------------------------------------
ICRA has upgraded the long term ratings assigned to the INR12.0
crore long term fund based facilities of Farooq Constructions from
[ICRA]C to [ICRA]B-. ICRA has also withdrawn the [ICRA]A4 short
term rating outstanding on the short term limits of the firm.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term, fund
based facilities 12.0 [ICRA]B- upgraded
Short Term, non- 0.0 [ICRA]A4 Rating withdrawn
fund based (reduced from 2.5)
facilities
The rating upgrade takes into account the improvement in the
financial profile of the firm with improved gearing on account of
infusion of funds from the partners. The rating also positively
factors in the firm's and the promoter's long standing presence
and established track record in the construction industry in
Kerala, the availability of orders in hand providing visibility to
the revenues in the short term, going forward and the adequate man
power and equipments available with the firm to execute the orders
in hand.
The ratings are, however, constrained by the moderate scale and
profitability of its operations and significant competitive
intensity prevailing in the road construction segment in Kerala as
reflected in its low bid success ratios in the past. The ratings
also consider the geographical and sectoral concentration of the
firm with presence limited to road projects in and around
Alappuzha in Kerala, the vulnerability of profit margins to
fluctuations in raw material and labour costs and the working
capital intensive nature of operations. These apart, ICRA also
notes that being a partnership firm, any significant withdrawals
from the capital account by the promoters would have an adverse
bearing on the firm's gearing levels and thus remains a key rating
sensitivity.
Farooq Constructions is a civil works contracting firm based in
Alappuzha town and was established in the year 2000 as a
proprietorship concern owned and promoted by Mr. Baiju Rasheed. In
the year 2009, it was converted to a partnership firm with Mr.
Baiju Rasheed and Mrs. Sajeela Baiju as its partners. The office
functions at North of Vazhicherry Bridge, Alappuzha. Farooq
undertakes Kerala State Public Works Department (PWD) contract
works especially roads, bridges and other major civil works.
For FY 2015, as per audited results, the company has reported an
operating income of INR14.2 crore and Profit After Tax (PAT) of
INR0.7 crore.
FUTURE VISION: CRISIL Reaffirms 'B' Rating on INR50MM Cash Loan
---------------------------------------------------------------
CRISIL's rating on the long-term bank facilities of Future Vision
Corporation (FVC) continues to reflect the below-average financial
risk profile because of a modest net worth and high total outside
liabilities to tangible net worth ratio. These rating weaknesses
are partially offset by the extensive experience of partners in
the mobile phone dealership business, and the efficient working
capital management.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 50 CRISIL B/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility 10 CRISIL B/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes FVC will continue to benefit over the medium term
from the partners' extensive business experience. The outlook may
be revised to 'Positive' in case of a significant and sustainable
growth in cash accrual, leading to an improvement in the capital
structure and debt protection metrics. Conversely, the outlook may
be revised to 'Negative' in case of a decline in the revenue or
profitability, or a significant stretch in the working capital
cycle, resulting in deterioration in the financial risk profile,
particularly liquidity.
Update
FVC reported revenue of INR694 million for 2014-15 (refers to
financial year, April 1 to March 31), which is line with CRISIL's
expectation of INR670 million. This is on account of better demand
for Samsung phones during the year. In 2015-16, growth is likely
to be muted, as reflected in revenue of about INR300 million in
the first six months of the year. The operating margin which stood
at 2 per cent in 2014-15, slightly higher than CRISIL's
expectation of 1.7 per cent, and is expected to remain at similar
levels over the medium term.
The working capital continues to be efficiently managed as
reflected in gross current asset (GCA) days at 35 as on March 31,
2015, which is almost in line with CRISIL's expectation of 44
days. The GCA days are likely to be at similar levels over the
medium term.
The total outside liabilities to tangible net worth (TOLTNW) ratio
of 7.0 times as on March 31, 2015, is line with CRISIL's
expectation of 7.0 times on account of a small net worth; the
ratio will remain high at 7-8 times over the medium term. The
liquidity continues to be moderate with fully utilised bank lines
and no debt obligation over the medium term.
FVC, set up in 2008, is a proprietorship firm of Mr. Deepak Patel.
It is a distributor of the Samsung brand of mobile handsets and
accessories in Indore, Madhya Pradesh. The firm is part of the P
Patel group, which has interests in varied sectors such as
automobile dealership, paint distribution, and financial services,
among others.
KAMALA TEA: CRISIL Reaffirms 'D' Rating on INR119.4MM Loan
----------------------------------------------------------
CRISIL's ratings on the bank facilities of Kamala Tea Co Limited
(KTCL) continue to reflect the company's overdrawn cash credit
limit for more than 30 days.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 6 CRISIL D (Reaffirmed)
Proposed Fund-
Based Bank Limits 119.4 CRISIL D (Reaffirmed)
Tea Hypothecation 105.3 CRISIL D (Reaffirmed)
Term Loan 10.3 CRISIL D (Reaffirmed)
The overdrawing is due to high working capital requirement and
weak liquidity. KTCL also has a constrained financial risk profile
because of weak debt protection metrics, and is exposed to risks
related to seasonality in tea production. However, it benefits
from the extensive industry experience of its promoters.
KTCL, set up in 1913, cultivates and processes tea leaves. It
produces cut, tear, and curl, and orthodox black tea in West
Bengal and Tripura. The company is managed by Mr. Sajjan Kumar
Agarwalla and his brother, Mr. Suresh Kumar Agarwalla.
KASTURI MULTI: CRISIL Reaffirms 'B+' Rating on INR60.9MM Loan
-------------------------------------------------------------
CRISIL's rating on the long-term bank facilities of Kasturi Multi
Solutions Private Limited (KMPL) continues to reflect KMPL's
nascent stage of operations in a fragmented industry, and subdued
financial risk profile because of large working capital
requirement and modest networth. These weaknesses are partially
offset by its promoters' extensive experience in the agricultural
products industry.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 60 CRISIL B+/Stable (Reaffirmed)
Proposed Fund-
Based Bank Limits 39.4 CRISIL B+/Stable (Reaffirmed)
Term Loan 60.9 CRISIL B+/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes KMPL will benefit over the medium term from its
promoters' industry experience. The outlook may be revised to
'Positive' if the company generates substantial cash accrual and
manages working capital requirement efficiently. Conversely, the
outlook may be revised to 'Negative' in case of low cash accrual
or large working capital requirement during the initial phase of
operations resulting in pressure on liquidity.
KMPL, incorporated in 2005 and promoted by Mr. Ratan Kumar
Dokania, Mr. Rajesh Dokania, Mr. Ravi Dokania, and Mr. Nikhil
Dokania, is setting up a plant for processing parboiled rice, with
installed capacity of 8 tonnes per hour, in Giridih (Jharkhand).
The promoter family has experience of more than a decade in the
agricultural commodities business.
KHANNA PROPERTIES: CRISIL Cuts Rating on INR395MM Term Loan to D
----------------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facilities
of Khanna Properties and Infrastructures Private Limited (KPIPL)
to 'CRISIL D' from 'CRISIL B/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term 7 CRISIL D (Downgraded from
Bank Loan Facility 'CRISIL B/Stable')
Term Loan 395 CRISIL D (Downgraded from
'CRISIL B/Stable')
The downgrade reflects instances of delay by KPIPL in servicing
its debt because of weak liquidity.
KPIPL faces implementation and demand risks for its projects,
accentuated by slow pace of construction and bookings for most of
its projects. The company is also vulnerable to cyclicality in the
Indian real estate sector. However, it benefits from its
promoters' extensive industry experience, brand recognition in
Jabalpur (Madhya Pradesh), and financial support from promoters
leading to limited funding risk for projects.
KPIPL was set up in 2006 and is a part of the Jabalpur-based
Khanna group. The company develops residential real estate,
primarily in Jabalpur. It has six ongoing projects, with a total
of 649 units in Jabalpur: Sukh Sagar Blue, Sukh Sagar Solitaire,
Sukh Sagar Platinum, Sukh Sagar Sapphire, Sukh Sagar Lifestyle,
and Sukh Sagar Lifespace.
KIRI INDUSTRIES: Ind-Ra Withdraws 'IND D' Long-term Issuer Rating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has withdrawn Kiri Industries
Limited's (KCL) 'IND D(suspended)' Long-Term Issuer Rating. A full
list of rating actions is at the end of this commentary. The
ratings have been withdrawn due to lack of adequate information.
Ind-Ra will no longer provide ratings or analytical coverage for
KCL.
Ind-Ra suspended KCL's ratings on 15 June 2015.
KCL's ratings:
-- Long-Term Issuer Rating: 'IND D(suspended)'; rating withdrawn
-- Proposed INR1,000 million non-convertible debentures
programme: Long-term 'IND D(suspended)'; rating withdrawn
-- INR666.4 million long-term loans: Long-term 'IND
D(suspended)'; rating withdrawn
-- INR1,700 million fund-based bank limits: Long-term 'IND
D(suspended)'; rating withdrawn
-- INR365 million non-fund-based bank limits: 'Short-term IND
D(suspended)'; rating withdrawn
KOMMLABS DESIGN: ICRA Withdraws 'B' Rating on INR5cr Loan
---------------------------------------------------------
ICRA has withdrawn the suspended rating of [ICRA]B for the INR5.0
crore fund based facilities and short term rating of [ICRA]A4 for
INR3.0 crore non fund based facilities of Kommlabs Design Pvt
Limited. As per ICRA's policy on withdrawals, ICRA can withdraw
the rating in case the rating remains suspended for more than
three years.
KUBER TEXLEN: ICRA Assigns 'B+' Rating to INR6.25cr LT Loan
-----------------------------------------------------------
ICRA has assigned a long-term rating of [ICRA]B+ and to INR10.50
crore fund based facilities of Kuber Texlen Private Limited and
the short-term rating of [ICRA]A4 to INR0.25 crore non-fund based
limits of the company.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term loan 4.25 [ICRA]B+ ; assigned
Long Term cash
credit facility 6.25 [ICRA]B+ ; assigned
Short Term Bank
Guarantee 0.25 [ICRA]A4 ; assigned
The ratings assigned take into consideration Kuber Texlen Pvt
Ltd's (KTPL) limited operational track record, its weak financial
risk profile as is evident from the low net profitability levels
due to the limited value-additive nature of the texturising
activity, highly leveraged capital structure, and subdued debt
coverage indicators. The ratings are further constrained by the
vulnerability of the company's profitability to the volatility in
raw material prices given its linkages with crude prices, and also
the weak bargaining power with suppliers. The ratings further
incorporate the intense competitive pressures inherent in the
industry given the low entry barriers and fragmented structure.
The ratings, however, draw comfort from the long track record of
the promoters in the field of manufacturing and marketing of
texturised yarn and the established relations of the company with
a diversified clientele, by way of its association with group
concerns. ICRA also takes note of the locational advantage of the
company due to its presence in Surat, which is a textile hub of
Gujarat rendering proximity towards a large customer and supplier
base.
Kuber Texlen Private Limited (KTPL) was established in 2010,
though it commenced operations in May 2013. The company is engaged
in the production of Draw Texturised Yarn (DTY), viz. Crimp Yarn
and Kota Yarn from Partially Oriented Yarn (POY). The
manufacturing unit of the company is located at Pipodara, near
Surat (Gujarat). Sruti filatex Pvt Ltd and chokshi Texlen Pvt Ltd
are the sister concerns of the company, which are engaged in same
line of business.
KUMAR MOTOR: ICRA Reaffirms 'B' Rating on INR3.90cr Term Loan
-------------------------------------------------------------
ICRA has reaffirmed the long-term rating of [ICRA]B to the INR1.60
crore (reduced from INR8.60 crore) cash credit facility and
INR3.90 crore (reduced from INR6.40 crore) term loan facility of
Kumar Motor Corporation Private Limited. ICRA has also reaffirmed
the short-term rating of [ICRA]A4 to the INR0.31 crore (reduced
from INR1.50 crore) non fund-based limit of KMCPL. ICRA has
assigned a rating of [ICRA]B/[ICRA]A4 to the INR10.69 crore
(enhanced from nil) unallocated limits of the company.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 1.60 [ICRA]B Reaffirmed
Term Loan 3.90 [ICRA]B Reaffirmed
Bank Guarantee 0.31 [ICRA]A4 Reaffirmed
Unallocated Limits 10.69 [ICRA]B/[ICRA]A4 Assigned
The ratings continue to remain constrained by the moderate scale
of the company's operations that limits economies of scale and the
high working capital requirements in the automobile dealership
business leading to a stretched liquidity position. The ratings
consider the vulnerability of the sales to the cyclicality of
passenger vehicle industry and intense competition from other OEM
dealerships in the region thereby limiting growth to an extent.
The ratings also factor in the company's financial profile
characterized by net losses, stretched capital structure and
stressed cash flows. The ratings are, however, supported by the
long track record and experience of the promoters in automobile
dealership business spanning for over two decades and established
presence of the company as a sole dealer for Volkswagen for the
entire North Karnataka region. Despite concerns related to the
Volkswagen emission scandal and decline in the formers domestic
market share of passenger vehicle industry, KMCPL has sold 325
cars during 9M FY 2016 against 302 cars during the same period in
FY 2015. The company's revenue stream remains diversified across
sales, services and spares thereby lending stability to revenues
to an extent.
Going forward, ICRA expects high margin revenue segments i.e
service income, sale of spare parts and dealer's incentives to
support the profitability of the company. The company's ability to
scale up its operations and efficient management of working
capital requirement and capital structure will remain the key
rating sensitivities. Further, the impact of Volkswagen's recent
emission scandal in India remains to be seen besides its upcoming
launches in the country.
Incorporated in 2009, KMCPL is an authorized dealer for passenger
cars of Volkswagen India Private Limited for the entire North
Karnataka region. The target market of the company includes
Davangere, Dharwar, Karwar, Haveri, Gadag, Koppal, Bellary,
Raichur, Belgaum and Hubli. KMCPL presently has two showrooms, one
each at Hubli and Belgaum, with 3S (i.e. sales, spares and
service) facility. In addition, the company also has two
stockyards, one each at Hubli and Belgaum. The company was
promoted by Mr Shashikumar Desai who has more than 22 years of
experience in the automotive dealership business. The current work
force of the company is around 155 employees.
Recent Results
During 2014-15, the company reported a net loss of INR0.16 crore
on an operating income of INR38.75 crore as against a net loss of
INR0.90 crore on an operating income of INR39.46 crore during
2013-14.
KVK BIO: Ind-Ra Downgrades Working Capital Loan Rating to 'IND D'
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has downgraded KVK Bio Energy
Private Limited's (KBEPL) INR50 million working capital loan
rating to 'IND D' from 'IND C'.
KEY RATING DRIVERS
The downgrade reflects KBEPL's continuous overutilisation of the
working capital facility beyond 30 days, indicating its stretched
liquidity condition. According to the company, the plant has not
been operational since June 2014. Ind-Ra expects the liquidity
position of the company to remain stretched until the plant
becomes operational.
RATING SENSITIVITIES
A positive rating action could result from the regularisation of
cash credit use within the sanctioned limits and evidence that the
project will be able to generate the forecasted levels of cash
flow, resulting in sustained and timely debt service.
COMPANY PROFILE
KBEPL, sponsored by MMS Steel & Power Pvt Ltd ('IND BB+'/Stable;
95% stake) and KVK Energy & Infrastructure Private Limited (5%
stake), owns a 15MW biomass-based power plant in Chhattisgarh. The
boiler set up at the plant works with a mix of rice husk and coal
in the ratio of 75:25. The company has a 20 years power purchase
agreement with Chhattisgarh State Electricity Board which will
remain in force up to 2026.
KWALITY FOUNDRY: ICRA Assigns B+ Rating to INR7.69cr Loan
---------------------------------------------------------
ICRA has assigned an [ICRA]B+ rating to the INR7.69 crore fund-
based bank facilities of Kwality Foundry Industries. ICRA has also
assigned an [ICRA]A4 rating to the INR2.31 crore non-fund based
bank facilities of KFI.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based Bank
Limits 7.69 [ICRA]B+; assigned
Non-Fund Based
Bank Limits 2.31 [ICRA]A4; assigned
The assigned ratings take into consideration the long track record
of the proprietor in the steel business. The ratings are, however,
constrained by the relatively small size of operations of the firm
with nominal profits and cash accruals, high gearing on account of
high working capital utilisation and KFI's exposure to cyclicality
associated with steel industry, which is likely to keep
profitability and cash flows volatile. The ratings are also
impacted by ongoing slowdown in the steel sector, which is likely
to impact KFI's growth and profitability in the short term.
KFI is a proprietorship concern. The proprietor of the firm is Mr.
Ravi Vaswani. The firm is engaged in manufacturing of cast
articles, moulds and machinery parts with an annual capacity of
12,000 MT. The plant of the firm is located at Raipur
(Chhattisgarh). The proprietor is also involved in steel
manufacturing through its two companies, Vaswani Industries
Limited and CG Ispat Private Limited.
Recent Results
In 2014-15, as per the audited financial statements, KFI reported
an operating income of INR34.73 crore and a net profit of INR0.09
crore, as against an operating income of INR37.70 crore and a net
profit of INR0.05 crore in 2013-14. During the first eight months
in 2015-16, the firm reported an operating income of INR34.73
crore and a profit before tax of INR0.04 crore.
M/S B. NEHAL: ICRA Cuts Rating on INR66cr Loan to 'D'
-----------------------------------------------------
ICRA has revised the ratings assigned to fund based limits of
INR66.00 crore to [ICRA]D from [ICRA]B+ and [ICRA]A4 of M/s B.
Nehal. ICRA has also revised the rating assigned to the term loan
facility of INR0.38 crore to [ICRA]D from [ICRA]B+.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based Limits 66.00 Revised to [ICRA]D from
[ICRA]B+/[ICRA]A4
Term Loan 0.38 Revised to [ICRA]D from
[ICRA]B+
The rating revision factors in BN's recent instances of delays in
debt servicing. The ratings however favourably incorporate the
long experience of the partners in the cut and polished diamond
business.
M/s. B. Nehal (BN) was established in 1988 and is engaged in the
import of rough diamonds and processing and export of Cut and
Polished Diamonds. The firm was reconstituted in 1993 and later in
1999 by its current partners. The firm has its head office at
Mumbai and a production facility at Surat. BN primarily procures
rough diamonds from Belgium and the local market and deals in
smaller, medium and large size diamonds which lie in the range of
20 cents to 5 carats.
Recent Results
For the year ended 31st March, 2014, BN reported an operating
income of INR154.91 crore and profit after tax of INR1.57 crore.
MAHALAXMI COAL: CRISIL Cuts Rating on INR30MM Cash Loan to 'B'
--------------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facilities
of Mahalaxmi Coal Private Limited (MCPL) to 'CRISIL B/Stable' from
'CRISIL B+/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 30 CRISIL B/Stable (Downgraded
from 'CRISIL B+/Stable')
Proposed Long Term 20 CRISIL B/Stable (Downgraded
Bank Loan Facility from 'CRISIL B+/Stable')
Working Capital 25 CRISIL B/Stable (Downgraded
Term Loan from 'CRISIL B+/Stable')
The rating downgrade reflects deterioration in the company's
liquidity, driven by significant net losses in the past two years.
The losses have resulted in a significant stretch in liquidity
leading to full utilisation of the company's bank lines during the
ten months through Jan 2015. Its financial risk profile has also
deteriorated with high gearing and weak debt protection metrics.
CRISIL believes liquidity will remain stretched over the medium
term on account of low cash accrual against term debt obligations.
The rating reflects MCPL's below-average financial risk profile
because of a small net worth, high gearing, and weak debt
protection metrics. The rating also factors in a small scale and
working capital-intensive nature of operations, and exposure to
cyclicality in demand from end-user industries. These rating
weaknesses are partially offset by the extensive experience of the
company's promoters in the wire and electrode manufacturing
industry and the funding support it receives from them.
Outlook: Stable
CRISIL believes MCPL will continue to benefit over the medium term
from its promoters' extensive industry experience. The outlook may
be revised to 'Positive' in case of a significant and sustained
increase in revenue along with improvement in profitability,
leading to higher-than-expected cash accrual and hence to better
liquidity. Conversely, the outlook may be revised to 'Negative' in
case of further deterioration in the financial risk profile,
particularly liquidity, most likely because of substantial
increase in working capital requirement, a decline in cash
accrual, or large debt-funded capital expenditure.
MCPL was incorporated in 1996 and commenced commercial operations
in 2002. The company manufactures welding electrodes, binding
wires, drawn wires, submerged arc welding wires, galvanised iron
wires, CO2 MIG wires, copper-coated mild steel wires, and other
such items. Its manufacturing facilities are in
Nagpur,Maharashtra.
MAHAVIR EDUCATIONAL: ICRA Reaffirms B- Rating on INR5.07cr Loan
---------------------------------------------------------------
ICRA has reaffirmed its long term rating on the INR7.12 crore bank
facilities of Mahavir Educational Society at [ICRA] B-.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term fund
based limits
Term Loan 5.07 [ICRA] B-; reaffirmed
Unallocated Limits 2.05 [ICRA] B-; reaffirmed
ICRA's rating continues to derive strength from MES' experienced
management profile as well as the society's agreement with the
Delhi Public School (DPS) society, which apart from lending the
school an established brand name, also provides operational
expertise. While the society witnessed moderate improvement in
enrolments to 593 students from 535 students in Academic year
(AY)15-16, given the relatively high fixed establishment expenses;
and significant interest expenses resulting from stretched capital
structure, the society continues to incur cash losses and is
dependent on timely funding support from members for servicing its
debt obligations.
ICRA also notes that while the continuous increase in revenue
receipts, on the back of addition of a new standard every year
along with reducing interest expenses is likely to result in the
society posting a net cash profit for the first time in FY16, cash
accrulas are expected to reamina inadequate compared to funding
requirements. The extent of funding requirements will continue to
remain determined by the society's ability to attract fresh
enrolments (on consistent basis) over the next few years.
In ICRA's view, increase in revenue receipts leading to reduction
in dependency on contribution from society members and scale of
any further expansion and debt funding thereof, will be the key
rating sensitivities going forward.
Incorporated in 2011, MES is a single asset society which runs and
operates 'Delhi Public School' in Kurukshetra (Haryana). The
school commenced operations in AY 2012-13 and presently caters to
students till Standard IX. The school proposes to commence
admissions for Standard XI from AY 2016-17 onwards. The society is
managed by a board of seven members and is headed by Mr. Subhash
Chand Jain. The members have significant experience in the
education sector and are associated with other educational
institutions as well.
Recent Results
The society reported a cash loss of INR0.89 crore on revenue
receipts (RR) of INR3.44 crore in 2014-15 as against a cash loss
of INR0.94 crore on RR of INR3.01 crore in the previous year.
MOTIA TOWNSHIP: ICRA Upgrades Rating on INR15cr Term Loan to B
--------------------------------------------------------------
ICRA has upgraded the long term rating assigned to INR23.0 crore
fund based facilities of Motia Township Private Limited to [ICRA]B
from [ICRA]D.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term Loan Facility 15.0 [ICRA]B; Upgraded
Un-allocated Facility 8.0 [ICRA]B; Upgraded
The upgrade in ratings positively factor in the improved debt
servicing track record of MTPL, also the long experience of
promoters in the real estate sector in and around Chandigarh
region albeit through their group companies. The rating further
derives comfort from the refinancing of the term loan facility
which has elongated the tenure of loan and is expected to ease out
the cash flow management of the company and also the low approval
risk for their Phase I of their ongoing project "Motia Oasis".
The rating however remains constrained on account of significant
execution risks given its vast size compared to the scale of
projects completed in the past. The ratings further take into
consideration the modest sales velocity as evident from the 27%
area booked as on date despite its appealing offering in the
economy class segment and its corresponding exposure to market
risks for the un-booked area, which is further accentuated on
account of sluggish real estate demand and rising competition.
Going forward, ability of the company to successfully market
unsold apartment inventory while maintaining healthy collection
efficiency would remain key rating sensitivity besides execution
of the project as per scheduled timelines.
Motia Township Private Limited (MTPL), promoted by 'Motia Group',
is developing an integrated township named 'Motia Oasis' at
Zirakpur (Punjab). The project is spread across 24 acres and
encompassing a saleable area of about 2.4 million square feet
(msf). The aforesaid project is being developed in phased manner
wherein about 627 residential units and 69 retail units have been
launched till date. The estimated project cost for ongoing phases
is about INR231 crore, which the company is partially funding with
a term loan of INR23.00 crore.
Recent results
In FY15, MTPL had an operating income of INR7.58 crore on which it
earned a Profit after Tax (PAT) of INR0.15 crore, as compared to
an operating income of INR7.94 crore on which it earned a PAT of
INR0.41 crore in FY14.
N.K. POLYMERS: ICRA Suspends 'B' Rating on INR4.0cr Loan
--------------------------------------------------------
ICRA has suspended the long term rating of [ICRA]B assigned to the
INR4.00 crore fund based bank facilities of N.K. Polymers &
Additives Manufacturing Company. ICRA has also suspended the short
term rating of [ICRA]A4 assigned to the INR11.00 crore non fund
based facilities of N.K. Polymers & Additives Manufacturing
Company. The suspension follows ICRA's inability to carry out a
rating surveillance in the absence of the requisite information
from the company.
NAPTHA RESINS: ICRA Suspends 'C' Rating on INR16.50cr Loan
----------------------------------------------------------
ICRA has suspended [ICRA]C rating assigned to the INR16.50 crore
long term fund based facilities and [ICRA]A4 rating assigned to
the INR6.00 crore short term non fund based facilities of Naptha
Resins & Chemicals Private Limited. The suspension follows ICRA's
inability to carry out a rating surveillance in the absence of the
requisite information from the company.
According to its suspension policy, ICRA may suspend any rating
outstanding if in its opinion there is insufficient information to
assess such rating during the surveillance exercise.
NAVIN COLD: CRISIL Lowers Rating on INR55MM Cash Loan to 'D'
------------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facilities
of Navin Cold Storage Private Limited (NCSPL) to 'CRISIL D' from
'CRISIL C'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 55 CRISIL D (Downgraded from
'CRISIL C')
Proposed Long Term 19 CRISIL D (Downgraded from
Bank Loan Facility 'CRISIL C')
Term Loan 21.7 CRISIL D (Downgraded from
'CRISIL C')
Working Capital 12.0 CRISIL D (Downgraded from
Facility 'CRISIL C')
The downgrade reflects instances of delay by the company in
servicing its debt. The delays have been caused by weakening
liquidity.
The company has a weak financial risk profile because of a small
net worth, high gearing, and weak debt protection metrics, and is
exposed to intense competition in the cold storage industry in
West Bengal. However, it benefits from its promoter's extensive
industry experience.
NCSPL, incorporated in 1977, operates a cold storage facility for
potatoes in Garbeta, West Bengal, with a capacity of 20,000 tonnes
per annum. The Agarwal family acquired a controlling stake in the
company in the late 1990s. Mr. Sushil Kumar Agarwal manages
operations.
NISARG JEWELS: ICRA Withdraws 'B' Rating on INR8.0cr Loan
---------------------------------------------------------
ICRA has withdrawn the rating of [ICRA]B assigned to the INR8.00
crore bank limit of Nisarg Jewels Private Limited, which was under
'notice of withdrawal'.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 8.00 [ICRA]B (withdrawn)
The rating is withdrawn as the period of notice of withdrawal is
completed.
PAL SYNTHETICS: ICRA Reaffirms 'B-' Rating on INR8.80cr Loan
------------------------------------------------------------
ICRA has reaffirmed the long-term rating of [ICRA]B- assigned to
the INR8.80 crore fund-based facilities of Pal Synthetics Limited.
ICRA has also reaffirmed the short-term rating of [ICRA]A4
assigned to the INR0.10 crore fund-based and INR0.50 crore non-
fund based (sub-limit of long-term fund based limits) facilities
of PSL.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term fund
based Cash Credit 8.80 [ICRA]B- re-affirmed
Short-term
Interchangeable (0.50) [ICRA]A4 re-affirmed
Short-term fund
based 0.10 [ICRA]A4 re-affirmed
The re-affirmation of the ratings favourably factors in the long
standing experience of the promoters in the textile industry.
Nonetheless, the ratings are constrained by the weak financial
profile of the company characterized by losses at net level, high
gearing and weak coverage indicators. The ratings also take into
account the high inventory levels resulting in high working
capital intensity of operations, the company's modest scale of
operation and the fragmented industry structure which, in turn,
limits the pricing power of the company.
Incorporated in 1981, Pal Synthetics Limited (PSL) is the flagship
company of the Pal group. The promoters, prior to incorporation of
this company, had extensive experience in trading of textile
products. The company was incorporated as a manufacturing arm of
the group. Another group company -- Angadpal Industries Private
Limited (AIPL), incorporated in 1993 ([ICRA]BB+(Stable)/A4+) is
currently engaged in processing of fabric woven at Pal's factory
and also undertakes processing contract work from external
parties.
Recent Results
As per the provisional results for 9MFY2016, PSL reported sales of
INR14.20 crore as against operating income of INR20.41 crore and
net losses of INR1.45 crore during the full year of FY2015.
PALAK FERRO: ICRA Lowers Rating on INR13.80cr LT Loan to 'D'
------------------------------------------------------------
ICRA has downgraded the ratings assigned to the INR20.00 crore
bank facilities of Palak Ferro Alloys to [ICRA]D.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term-Fund
Based/ CC 6.10 [ICRA]D downgraded
Long Term-Fund
Based TL 0.10 [ICRA]D downgraded
Long Term/Short
Term Unallocated 13.80 [ICRA]D downgraded
The rating downgrade is on account of delays in the debt servicing
by the firm due to its stretched liquidity position.
Established in 2008 as a proprietorship firm by Mr. Rahul Parwani,
PFA is engaged in the manufacturing of ferro alloys and manganese
oxides. The firm has its manufacturing facility located at Nagpur,
Maharashtra. PFA has an installed capacity of 1500 MTPA for
manufacturing ferro alloys such as medium carbon (MC) -- ferro
manganese, low carbon (LC) -- ferro manganese and silico
manganese, and 1500 MT for manufacturing manganese oxides. Ferro
alloys find application in the steel industry whereas manganese
oxides are used in the fertilizer industry.
PAVAN COTTON: ICRA Reaffirms B+ Rating on INR6.32cr LT Loan
-----------------------------------------------------------
ICRA has reaffirmed the long-term rating at [ICRA]B+ to the
INR6.32 crore (revised from INR7.55 crore) fund based limits and
INR3.97 crore (revised from INR2.74 crore) unallocated limits of
Pavan Cotton Products Pvt. Ltd. ICRA has reaffirmed the short
term rating at [ICRA]A4 to the INR0.24 crore non-fund based limits
of PCPPL.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Fund
Based Limits 6.32 [ICRA]B+ reaffirmed
Short Term Non-
Fund Based Limits 0.24 [ICRA]A4 reaffirmed
Long Term Un-
allocated Limits 3.97 [ICRA]B+ reaffirmed
The re-affirmation of ratings take into account the small scale of
PCPPL's operations in highly fragmented and competitive spinning
industry, where revenue growth and profitability is susceptible to
fluctuations in cotton and yarn prices and regulatory risks. In
FY2015, the company witnessed significant decline in operating
margins on account of decline in realizations and volatility in
raw material prices leading to net loss of INR0.13 crore during
FY2015. ICRA also notes that the non-availability of power subsidy
from April 2016 could adversely impact the profitability on
account of higher power charges. The ratings are further
constrained by moderate financial profile as reflected in gearing
of 1.51 times as on 31st March 2015, stretched debt coverage
metrics, and moderate customer concentration with top 10 customers
contributing 69% of total sales as on 31st March 2015. The ratings
however, favourably take into account the healthy growth in
production levels by 18% leading to revenue growth of 6% in FY15.
The ratings also takes comfort from over two decades of experience
of promoters in the cotton industry and its proximity to cotton
growing areas of Guntur in the state of Andhra Pradesh which
provides the company competitive advantage along with Technology
Upgradation Fund Scheme (TUFS) subsidy supporting net margins.
Going forward, the ability of the company to enhance its scale of
operations, improve profitability and capital structure will be
the key rating sensitivities.
Incorporated in 1992, PCPPL is a cotton spinning mill based in the
Guntur district of Andhra Pradesh. Promoted by Mr. V. Gopal Rao,
PCPPL is a 100% promoter held company which was initially engaged
in cotton ginning and trading. The company diversified into
manufacturing of cotton yarn in 2001 by setting up a spinning mill
with an installed capacity of 3,024 spindles. In 2007, the company
undertook a major expansion drive by installing additional 10,224
spindles thereby increasing the total installed spindle capacity
to 13,248. Subsequent to the expansion of its spindle capacity,
the company ceased all its ginning and trading activities and is
focused only on the manufacture of yarn. While the current
installed machinery is capable of producing a count range of 30s
to 60s, the 40s count has dominated PCPPL's product profile in all
the past financial years.
Recent Results
As per audited financials for FY15, PCPPL reported an operating
income of INR22.94 crore with net loss of INR0.13 crore as against
INR21.74 crore of operating income with net profit of INR0.85
crore in FY14.
PREMIER POULTRY: Ind-Ra Assigns 'IND BB+' Long-Term Issuer Rating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Premier Poultry
Products Limited (PPPL) a Long-Term Issuer Rating of 'IND BB+'.
The Outlook is Stable.
KEY RATING DRIVERS
The ratings reflect PPPL's weak credit profile and tight
liquidity. Net leverage (total Ind-Ra adjusted net debt/operating
EBITDAR) was 4.6x (2.5x) in FY15 and EBITDA interest cover
(operating EBITDA/gross interest expense) was 2.1x (2.4x). EBITDA
margins, though on an increasing trend over the last four years,
were low at 2.5% in FY15 characteristic of the trading nature of
business. Liquidity was tight as reflected by its 94.5% average
use of the fund-based working capital facilities during the 12
months ended November 2015.
The ratings are supported by the more than four decades of
experience of the company's promoter in the same line of business
of trading of table eggs.
RATING SENSITIVITIES
Positive: A significant increase in the profitability leading to a
sustained improvement in the credit metrics would be positive for
the ratings.
Negative: Any deterioration in the EBITDA margin leading to
sustained deterioration in the credit metrics could be negative
for the ratings.
COMPANY PROFILE
PPPL was established in 1986. It deals in the trading of table
eggs. The company procures eggs from poultry farmers in Hyderabad,
and sells them to buyers in Mumbai. FY15 revenue was INR1,004
million (FY14: INR870 million).
PPPL's ratings are as follows:
-- Long-term Issuer Rating: assigned 'IND BB+'; Outlook Stable
-- INR26.6 million long-term loans: assigned 'IND BB+'; Outlook
Stable
-- INR74 million fund-based facilities: assigned 'IND BB+';
Outlook Stable; 'IND A4+'
-- INR5 million non-fund-based facilities: assigned 'IND A4+'
PRO MINERALS: CRISIL Suspends B+ Rating on INR4.62BB Term Loan
--------------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of
Pro Minerals Private Limited (PMPL; a part of the Dalmia group).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 120 CRISIL A4
Cash Credit 850 CRISIL B+/Stable
Proposed Long Term
Bank Loan Facility 370 CRISIL B+/Stable
Term Loan 4620 CRISIL B+/Stable
The suspension of ratings is on account of non-cooperation by PMPL
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, PMPL is yet to
provide adequate information to enable CRISIL to assess PMPL's
ability to service its debt. The suspension reflects CRISIL's
inability to maintain a valid rating in the absence of adequate
information. CRISIL considers information availability risk as a
key factor in its rating process as outlined in its criteria
'Information Availability - a key risk factor in credit ratings'.
PMPL was incorporated in September 2010 by the Dalmia Group of
Kolkata. The company is setting up an integrated pellet
manufacturing plant at Keonjhar (Orissa). The project also
involves setting up an iron ore beneficiation plant, which will
convert non-usable low grade iron ore fines in to usable grade of
iron ore fines to be fed directly into the pellet manufacturing
plant as raw material. The project also includes a captive power
plant of 20 megawatts capacity.
ROCKLAND HOSPITALS: ICRA Suspends 'D' Rating on INR264.96cr Loan
----------------------------------------------------------------
ICRA has suspended [ICRA]D rating assigned to the INR264.96 crore
bank facilities of Rockland Hospitals Limited. The suspension
follows ICRA's inability to carry out a rating surveillance in the
absence of the requisite information from the company.
SAI CONSTRUCTION: Ind-Ra Withdraws'IND B+' LT Issuer Rating
-----------------------------------------------------------
India Ratings and Research (Ind-Ra) has withdrawn Sai Construction
Pvt Ltd's (SCPL) 'IND B+(suspended)' Long-Term Issuer Rating. Ind-
Ra has also withdrawn the 'IND B+(suspended)' rating on the
company's INR900 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 SCPL.
Ind-Ra suspended SCPL's ratings on 24 June 2014.
SAMHI HOTELS: Ind-Ra Suspends 'IND BB' Long-Term Issuer Rating
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated SAMHI Hotels
(Gurgaon) Pvt Ltd's 'IND BB' Long-Term Issuer Rating to the
suspended category. The Outlook was Stable. The rating will now
appear as 'IND BB(suspended)' on the agency's website. The agency
has also migrated the company's INR1,100 million long-term loans
to 'IND BB(suspended)' from 'IND BB'.
The ratings have been migrated to the suspended category due to
lack of adequate information. Ind-Ra will no longer provide
ratings or analytical coverage for SAMHI Hotels (Gurgaon) Pvt Ltd.
The ratings will remain in the suspended category for a period of
six months and be withdrawn at the end of that period. However, in
the event the issuer starts furnishing information during this
six-month period, the ratings could be reinstated and will be
communicated through a rating action commentary.
SHELAR PROPERTIES: CRISIL Reaffirms B- Rating on INR240MM Loan
--------------------------------------------------------------
CRISIL's rating on the long-term bank facilities of Shelar
Properties Private Limited (SPPL) continues to reflect the
company's exposure to intense competition in the hospitality
industry, investments in group entities, and below-average
financial risk profile because of a modest net worth, high
gearing, and weak debt protection metrics.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 25 CRISIL B-/Stable (Reaffirmed)
Long Term Loan 69.5 CRISIL B-/Stable (Reaffirmed)
Proposed Long Term 55.5 CRISIL B-/Stable (Reaffirmed)
Bank Loan Facility
Term Loan 240.0 CRISIL B-/Stable (Reaffirmed)
These rating weaknesses are partially offset by the extensive
industry experience of SPPL's promoter and healthy cash generation
from operations.
Outlook: Stable
CRISIL believes SPPL will continue to benefit over the medium term
from its promoter's extensive industry experience and the prime
location of its hotels. The outlook may be revised to 'Positive'
in case of significant increase in cash accrual, resulting in
better liquidity. Conversely, the outlook may be revised to
'Negative' in case of deterioration in the financial risk profile,
especially liquidity, most likely because of low occupancy or
large debt-funded capital expenditure.
SPPL, incorporated in 1999, operates two multi-facility hotels at
Nashik and Thane, both in Maharashtra, under the Express-Inn
brand. Its operations are managed by the promoter, Mr. Narayan
Shelar.
SHIV SHAKTI: ICRA Suspends B+ Rating on INR10cr LT Loan
-------------------------------------------------------
ICRA has suspended the [ICRA]B+ rating, assigned to the INR10.00
crore of fund based facility of Shiv Shakti Enterprise. The
suspension follows ICRA's inability to carry out a rating
surveillance in the absence of the requisite information from the
firm.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Fund
based limit 10.00 [ICRA]B+ suspended
Established as a partnership firm in February 2014, M/s Shiv
Shakti Enterprise commenced the development of its first project
viz. 'Siddhi Vinayak Heights' in April 2014. The project is a
residential project housing 152 nos. 2 BHK flats with a saleable
area in the range of 1138sq.ft to 1186sq.ft.The project is located
in the Pal-Adajan area of Surat and the management is targeting
service class population employed in companies located in Hajira
industrial belt as prospective buyers.
SHREE BADRI: CRISIL Assigns 'B+' Rating to INR150MM Cash Loan
-------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-term
bank loan facility of Shree Badri Kedar Udyog Private Limited
(SBKUPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 150 CRISIL B+/Stable
The rating reflects SBKUPL's modest scale of operations in the
highly competitive textile trading business, weak financial risk
profile because of small networth and subdued debt protection
measures, and large working capital requirement. These weaknesses
are partially offset by its promoters' extensive experience in the
textile industry.
Outlook: Stable
CRISIL believes SBKUPL will continue to benefit over the medium
term from its promoters' extensive industry experience. The
outlook may be revised to 'Positive' if revenue and profitability
increase substantially, while working capital management remains
efficient, leading to a better financial risk profile. Conversely,
the outlook may be revised to 'Negative' if working capital
requirement increases, leading to deterioration in liquidity, or
if the company undertakes a large debt-funded capital expenditure
programme, weakening its capital structure.
SBKUPL, incorporated in 2011 by Mr. Amit Sarawgi and based in
Ranchi (Jharkhand), trades in fabrics in the domestic market.
Initially, the company was in the civil construction business.
However, the promoters decided to discontinue the construction
business and entered the trading business in 2013-14 (refers to
financial year, April 1 to March 31).
SHREE SAINARAYAN: CRISIL Cuts Rating on INR115MM Cash Loan to D
---------------------------------------------------------------
CRISIL has downgraded its rating on the bank facilities of
Shree Sainarayan Plastics Private Limited (SSPPL) to 'CRISIL D'
from 'CRISIL B/Stable.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 115 CRISIL D (Downgraded from
'CRISIL B/Stable')
Proposed Long Term 15 CRISIL D (Downgraded from
Bank Loan Facility 'CRISIL B/Stable')
The downgrade reflects the company's continuously overdrawn
working capital limit for more than 30 consecutive days; this was
because of weak liquidity.
SSPPL has a modest scale of operations and large working capital
requirement, and is exposed to intense competition in the
fragmented polyvinyl chloride (PVC) pipe industry.
However, the company benefits from its promoters' extensive
industry experience.
Set up in 1986, SSPPL manufactures household items, quality tanks,
cans, containers, pots, buckets, and water tanks. It has a
manufacturing facility in Aurangabad and Pune, Operations are
managed by its directors, Mr. Somnath Sakre and Mr. Santosh
Gangwal.
SHREE SHYAM PULP: Ind-Ra Suspends 'IND D' Long-Term Issuer Rating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Shree Shyam Pulp
and Board Mills Limited (SSPBML) 'IND D' Long-Term Issuer Rating
to the suspended category. The rating will now appear as 'IND
D(suspended)' on the agency's website.
The ratings have been migrated to the suspended category due to
lack of adequate information. Ind-Ra will no longer provide
ratings or analytical coverage for SSPBML.
The ratings will remain in the suspended category for a period of
six months and be withdrawn at the end of that period. However, in
the event the issuer starts furnishing information during this
six-month period, the ratings could be reinstated and will be
communicated through a rating action commentary.
SSPBML 's ratings:
-- Long-Term Issuer Rating: migrated to 'IND D(suspended)' from
'IND D'
-- INR3,427.5 million term loans: migrated to 'IND D(suspended)'
from Long-term 'IND D'
-- INR2,559.8 million fund-based limits: migrated to 'IND
D(suspended)' from Long-term 'IND D'
-- INR700 million non-fund-based limits: migrated to 'IND
D(suspended)' from Short-term 'IND D'
SHRI HARI: CRISIL Lowers Rating on INR124.6MM LT Loan to 'B'
------------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facilities
of Shri Hari Forging Products (SHFP) to 'CRISIL B/Stable' from
'CRISIL B+/Stable', while reaffirming its rating on the short-term
bank facility at 'CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 8.5 CRISIL A4 (Reaffirmed)
Bill Discounting 100.0 CRISIL B/Stable (Downgraded
from 'CRISIL B+/Stable')
Cash Credit 32.5 CRISIL B/Stable (Downgraded
from 'CRISIL B+/Stable')
Proposed Long Term 124.6 CRISIL B/Stable (Downgraded
Bank Loan Facility from 'CRISIL B+/Stable')
Term Loan 38.5 CRISIL B/Stable (Downgraded
from 'CRISIL B+/Stable')
The downgrade reflects CRISIL's belief that SHFP's financial risk
profile will remain weak over the medium term because of high
leverage and modest debt protection metrics. As on March 31, 2015,
the total outside liabilities to adjusted net worth ratio
increased to 5.9 times from 4.9 times as on March 31, 2014 and is
expected to remain high at around 5 times over the medium term.
Also, debt protection metrics remained modest with interest
coverage ratio of 1.5 times in 2014-15 (refers to financial year,
April 1 to March 31) against 1.7 times in 2013-14. Over the medium
term, interest coverage ratio is expected to remain modest at less
than 2 times over the medium term. The working capital cycle was
stretched significantly in 2014-15, with gross current assets
increasing to over 200 days as on March 31, 2015, from around 150
days as on March 31, 2014. This was driven by an increase in
debtor days to 144 days as on March 31, 2015 from 36 days as on
March 31, 2014. The increase in debtor days was on account of some
customers taking longer to pay. However, business risk profile is
expected to improve gradually over the medium term as the company
is undertaking a capex in 2015-16 to enhance its fabrication
capacity and also install a zinc coating plant.
CRISIL believes SHFP's revenue will increase upon successful
completion and commissioning of the new plants. However, the
working capital-intensive operations are likely to result in weak
financial risk profile over the near term.
The ratings continue to reflect SHFP's modest scale of operations
and exposure to intense competition in the highly fragmented
transmission and distribution products industry, and the modest
financial risk profile because of high leverage and modest debt
protection metrics. These rating weaknesses are partially offset
by the extensive industry experience of the firm's proprietor.
Outlook: Stable
CRISIL believes SHFP's financial risk profile will remain modest
over the medium term marked by high leverage. The outlook may be
revised to 'Positive' in case of a substantial improvement in the
leverage, or scaling up of operations while improving the
profitability. Conversely, the outlook may be revised to
'Negative' if liquidity deteriorates, most likely because of
large, debt-funded working capital requirement or capital
expenditure, or low cash accrual.
SHFP, a sole proprietorship firm set up in 2006, manufactures and
fabricates various components such as transformer structures, top
brackets, and guarding cross arms, which are used in the power
distribution sector. The firm, promoted by Mr. Shrikant Sharma, is
based in Jaipur (Rajasthan).
SIKSHA - O - ANUSANDHAN: ICRA Assigns B+ Rating to INR115cr Loan
----------------------------------------------------------------
ICRA has assigned the long term rating of [ICRA]B+ to the INR351
crore (INR115 crore enhanced from INR80 crore) term loan facility
of Siksha - O - Anusandhan. ICRA also has long term rating of
[ICRA]B+ outstanding for the INR80 crore term loan facility of the
entity.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based (Term
Loan) 115 [ICRA]B+ outstanding/assigned
The rating takes into consideration the significant decline in
SOA's profitability and return indicators during FY14 and FY15 on
the back of significant increase in operating costs and its large
debt funded capital expenditure plans going forward, which could
impact cash flows in the near term. The rating take into account
the large number of courses offered and the deemed university
status granted to SOA University, which provides it with
operational flexibility and the accreditation from National
Assessment and Accreditation Council (an autonomous body,
established by the University Grants Commission) at the highest
grade of A (on a scale of A to D) demonstrating the university's
academic capability. Also, the rating takes note of SOA's
favourable financial risk profile characterised by a conservative
capital structure and modest debt coverage indicators. Going
forward, the ability of the society to maintain its favourable
financial risk profile in the light of continuous capital
expenditure plans would remain a key rating sensitivity.
SOA was established in 1995 as a society in Bhubaneswar, Orissa
and manages SOA University (deemed University). SOA University
offers under and post graduate courses across different
disciplines like engineering, medicine, law, management and also
manages a 750 bed hospital. Currently, it has strength of more
than 12,000 students.
Recent Results
During FY15, SOA reported a net surplus (NS) of INR1.85 crore on
revenue receipts of INR246.28 crore, as against a net surplus of
INR6.71 crore on revenue receipts of INR215.78 crore during FY14.
SMSG AUTOMART: CRISIL Assigns B+ Rating to INR35MM Term Loan
------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-term
bank facilities of SMSG Automart Private Limited (SAPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 35 CRISIL B+/Stable
Cash Credit 30 CRISIL B+/Stable
Proposed Long Term
Bank Loan Facility 5 CRISIL B+/Stable
The rating reflects the company's exposure to project
implementation and stabilisation risks and below-average financial
risk profile because of expected small networth and moderate
gearing. These weaknesses are partially offset by the extensive
experience of SAPL's promoters.
Outlook: Stable
CRISIL believes SAPL will benefit over the medium term from
promoters' extensive experience. The outlook may be revised to
'Positive' if operations of proposed showroom stabilises in a
timely manner, and if higher-than-expected revenue and
profitability leads to healthy cash accrual. Conversely, the
outlook may be revised to 'Negative' in case of delays in
commencement of operations, or if lower-than-expected cash accrual
during initial phase puts pressure on liquidity.
Incorporated in May 2015 and promoted by Mr. Sanjay Kumar Singh
and his family members, SAPL is setting up an auto dealership
business for passenger vehicles of Renault Indian Pvt Ltd at
Asansol and Durgapur, West Bengal. The company is the sole dealer
for Renault in six districts of West Bengal. Operations are
expected to start from April 2016.
SONAKI CERAMIC: CRISIL Suspends B Rating on INR66.5MM Term Loan
---------------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of Sonaki
Ceramic (SC). The suspension of ratings is on account of non-
cooperation by SC with CRISIL's efforts to undertake a review of
the ratings outstanding.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 6.5 CRISIL A4
Cash Credit 30 CRISIL B/Stable
Term Loan 66.5 CRISIL B/Stable
Despite repeated requests by CRISIL, SC is yet to provide adequate
information to enable CRISIL to assess SC's ability to service its
debt. The suspension reflects CRISIL's inability to maintain a
valid rating in the absence of adequate information. CRISIL
considers information availability risk as a key factor in its
rating process as outlined in its criteria 'Information
Availability - a key risk factor in credit ratings'.
About the Firm
Set up in 2008, SC manufactures bone-china-based crockery items
such as cups, plates, and saucers. It has been promoted by Mr.
Kishore Patel and his family as a partnership firm.
SUBHAM ENTERPRISES: CRISIL Assigns 'B' Rating to INR10MM Loan
-------------------------------------------------------------
CRISIL has revoked the suspension of its ratings on the bank
facilities of Subham Enterprises (SE) and has assigned its 'CRISIL
B/Stable/CRISIL A4' ratings to the facilities. CRISIL had, on
January 6, 2016, suspended the ratings as SE had not provided the
necessary information required for a rating review. The company
has now shared the requisite information, enabling CRISIL to
assign ratings to its bank facilities.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 10 CRISIL B/Stable (Assigned;
Suspension Revoked)
Letter of Credit 90 CRISIL A4 (Assigned;
Suspension Revoked)
The ratings reflect SE's below-average financial risk profile
because of a high total outside liabilities to tangible networth
ratio and weak debt protection metrics, and the susceptibility of
its margins to volatility in foreign exchange (forex) rates. These
rating weaknesses are partially offset by the extensive experience
of the firm's promoter in the silk yarn trading industry.
Outlook: Stable
CRISIL believes SE will continue to benefit over the medium term
from its established position in the silk yarn trading industry
and large customer base. The outlook may be revised to 'Positive'
in case of a sustainable increase in scale of operations and
profitability, leading to a better financial risk profile.
Conversely, the outlook may be revised to 'Negative' in case of
lower-than-expected cash accrual, resulting from low revenue, or
adverse forex rate movements, or deterioration in working capital
management.
Set up in 2000 and based in Bengaluru, SE trades in imported silk
yarn. It is a proprietorship firm of Mr. Rakesh Mishra.
SUDHIR AGRO: ICRA Reaffirms B+ Rating on INR4cr Cash Loan
---------------------------------------------------------
ICRA has reaffirmed its long-term rating of [ICRA]B+ and short-
term rating of [ICRA]A4 on the INR20.00 crore bank facilities of
Sudhir Agro Oils Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit Limit 4.00 [ICRA]B+; reaffirmed
Non-Fund Based Limits 16.00 [ICRA]A4; reaffirmed
The ratings reaffirmation takes into account the 60% year on year
increase in SAOPL's operating income in 2014-15, on account of
higher volumes of trading activities during the year; however, the
company's operating profitability continues to decline given the
increasing competition in the edible oils trading business.
ICRA's ratings continue to be constrained by the business risks
associated with the edible oils industry, including high
competitive intensity and the fragmentation therein; the
vulnerability of SAOPL's profitability to volatility in global
edible oil prices and the agro-climatic risks associated with the
availability of the raw materials. ICRA also takes note of the
company's weak coverage indicators and elevated gearing levels.
The ratings, however, take comfort from the long experience of the
promoters in the edible oil industry; the favorable demand outlook
for edible oils and related products in the domestic market.
Going forward, the company's ability to improve its operating
margins and optimally manage its working capital requirements will
remain the key rating sensitivities.
Incorporated in 1993, SAOPL is engaged in the trading of edible
oils. It trades primarily in Crude Palm Oil, Mustard Oil, Cotton
Seed Oil, Sunflower Oil and Soya Oil. The company does not have
any warehousing facility for storage of traded products. The
promoter Mr. Prem Kumar's family has been involved in the edible
oil trading business for three generations.
Recent Results
In 2014-15, SAOPL reported a net profit of INR0.48 crore on an
operating income (OI) of INR109.09 crore as against a net profit
of INR0.31 crore on an OI of INR68.20 crore in 2013-14.
SUNDERNAGAR INTEGRATED: ICRA Suspends B+ Rating on INR8.5cr Loan
----------------------------------------------------------------
ICRA has suspended the long term rating of [ICRA] B+ assigned to
the INR8.50 crore long term fund based facilities of Sundernagar
Integrated Rural Development Association. The suspension follows
ICRA's inability to carry out rating surveillance in the absence
of requisite information from the company.
SUPER HI-TECH: CRISIL Reaffirms B+ Rating on INR50MM Cash Loan
--------------------------------------------------------------
CRISIL's ratings on the bank facilities of Super Hi-Tech Engineers
and Contractors (SHEC) continue to reflect the firm's modest scale
of operations in the intensely competitive construction industry,
high degree of geographical and project concentration in its order
book, working-capital-intensive operations, and small networth
limiting financial flexibility. These weaknesses are partially
offset by the extensive experience of SHEC's promoters in the
construction industry.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 45 CRISIL A4 (Reaffirmed)
Cash Credit 50 CRISIL B+/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes SHEC will continue to benefit over the medium term
from its promoters' extensive industry experience. The outlook may
be revised to 'Positive' if there is substantial and sustained
improvement in the firm's profitability margin, while registering
healthy revenue growth, or there is a substantial increase in its
networth on the back of sizeable capital addition by the partners.
Conversely, the outlook may be revised to 'Negative' if a steep
decline in profitability margin, any large, debt-funded capital
expenditure, or stretch in working capital cycle weakens key
credit metrics.
SHEC was set up in 1997 as a partnership firm by Mr. Mohammed
Nazeeruddin and his sons, Mr. Mohammed Zaheeruddin, Mr. K M
Salahuddin, and Mr. Mohammed Nayeemuddin. The firm, based in
Hyderabad, undertakes construction of roads, primarily for
government undertakings.
THAKAR DASS: ICRA Assigns B+ Rating to INR6.0cr Loan
----------------------------------------------------
ICRA has assigned its long-term rating of [ICRA]B+ and short-term
rating of [ICRA]A4 to the INR12.50 crore* bank facilities of
Thakar Dass & Co.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Over Draft Facility 6.00 [ICRA]B+; assigned
Letter Of Credit 6.00 [ICRA]A4; assigned
Bank Gurantee 0.50 [ICRA]A4; assigned
ICRA's ratings are constrained by low entry barriers and the high
competitive intensity in trading in rubber chemicals, which
results in TDC's thin profit margins. The rating also takes into
account the exposure of the firm's profitability to adverse
fluctuations in foreign exchange rates and volatility in prices of
rubber chemicals, as ~31% of the firm's traded goods requirements
are met through imports. ICRA also takes note of the firm's weak
coverage indicators with interest coverage of 1.48 times and
NCA/Debt of 8.2% in 2014-15. ICRA also takes note of the
partnership constitution of the firm which exposes it to risks of
dissolution, withdrawal of capital etc. The ratings, however,
favourably factor in the extensive experience of TDC's promoters
in the rubber chemicals trading business; the established
relationship of the firm with its suppliers, as well as its
customer base, and its network of regional sales offices and
dealers, which facilitates its sales.
Going forward, the firm's ability to ramp up its scale of
operations in a profitable manner and improve its capital
structure by efficiently managing the working capital
requirements, thereby leading to an improvement in the coverage
metrics will be the key rating sensitivities.
Firm Profile Established in 1950, TDC is a partnership firm. The
firm is primarily engaged in the trading of rubber chemicals,
synthetic rubbers, carbon black etc. The firm is based in New
Delhi with regional sales offices in Faridabad, Ghaziabad, Meerut,
Agra, Kanpur, Rudrapur and Punjab. The firm also has warehouses in
Faridabad and New Delhi. The firm sources its products from
domestic suppliers as well as through imports, and sells the
products to both traders as well as manufacturers of automobiles,
footwear etc.
Recent Results
In 2014-15, TDC reported a net profit of INR0.60 crore on an
operating income (OI) of INR68.91 crore, as against a net profit
of INR0.36 crore on an OI of INR56.50 crore in the previous year.
THE TRAVANCORE: ICRA Reaffirms 'B' Rating on INR20cr LT Loan
------------------------------------------------------------
ICRA has reaffirmed the [ICRA]B rating to INR20.0 crore long term
fund based facilities of The Travancore Cochin Chemicals Limited
and the [ICRA]A4 rating to INR9.0 crore short term non fund based
facilities and to the INR1.0 crore short term fund based
facilities of TCC.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term: Fund
Based Facilities 20.0 [ICRA]B reaffirmed
Short term: Fund
based 1.0 [ICRA]A4 reaffirmed
Short term: Non
fund based 9.0 [ICRA]A4 reaffirmed
The reaffirmation of the ratings reflects the company's continuing
adverse financial position with stressed cash flows, weak
profitability and low net worth. The ratings also consider TCCL's
significant contingent liabilities, mostly arising from disputed
power charges payable to KSEB. The profitability of the company's
operations continue to remain constrained by the high cost
structure in chlor-alkali operations due to lack of access to cost
effective power, and TCCL's logistical disadvantage with respect
to key raw materials. The ratings are also constrained by the
inherent cyclicality in the chlor-alkali industry, and the
vulnerability of profitability to import duty levels & exchange
fluctuations.
However, ICRA takes into account the process optimisations
undertaken by the company to reduce its power requirements which
are expected to improve the cost structure of the company and lead
to an improvement in the its profitability going forward. The
ratings also favourably factor the company's established track
record in the chlor-alkali business in Kerala as the sole caustic
soda manufacturer with a reputed customer profile and implicit
financial support from GoKL, arising from its status as a state-
level Public Sector Undertaking.
The Travancore Cochin Chemicals Ltd (TCC) is a state-level public
sector undertaking owned by Government of Kerala (GoKL) and its
entities situated at Udyogamandal, Cochin. The company was
originally started as Travancore & Mettur Chemical Co (TMCC) in
1949 as a partnership between FACT Limited and Mettur Chemical &
Industrial Corporation Limited. In 1960, the Government of Kerala
(GoKL) acquired TMCC and it was renamed The Travancore Cochin
Chemicals Limited. TCC manufactures basic industrial chemicals
viz., Caustic Soda and Chlorine products. The current licensed
capacity of TCC is 175 tpd (tons per day) of caustic soda.
Recent Results
For FY 2014-15 the company has recorded a net profit of INR0.7 Cr
on an operating income of INR156.6 Cr against a net loss of INR3.6
Cr on an operating income of INR163.7 Cr in FY 2013-14.
TIJIYA ENGINEERING: CRISIL Reaffirms 'B' Rating on INR10MM Loan
---------------------------------------------------------------
CRISIL's ratings on the bank facilities of Tijiya Engineering
Private Limited (TEPL) continue to reflect the company's weak
market position in the mild steel (MS) products industry, average
financial risk profile because of a small net worth and modest
debt protection metrics despite low gearing, and working capital-
intensive operations. These rating weaknesses are partially offset
by the extensive experience of TEPL's promoters in the MS products
industry, and the company's partially integrated operations,
involving cutting, moulding, welding, finishing, and packaging of
its in-house manufactured products.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bill Discounting 50 CRISIL A4 (Reaffirmed)
Cash Credit 10 CRISIL B/Stable (Reaffirmed)
Packing Credit 40 CRISIL A4 (Reaffirmed)
Standby Line of Credit 10 CRISIL A4 (Reaffirmed)
Outlook: Stable
CRISIL believes TEPL will continue to benefit from extensive
experience of promoters in the MS products industry and the
company's partially integrated operations over the medium term.
The outlook may be revised to 'Positive' in case of a significant
increase in scale of operations, along with sustained improvement
in profitability. Conversely, the outlook may be revised to
'Negative' in case of deterioration in the financial risk profile,
most likely because of lower-than-expected profitability,
substantial increase in working capital requirement, or large
debt-funded capital expenditure.
TEPL, incorporated in 1983, is managed by Mr. Rajesh Poddar and
Mr. Rajiv Poddar. The company manufactures various MS products
such as barbed wire arms, flat and round stakes, clamps, and rods
for the construction and fencing industries.
TRANSONS OVERSEAS: CRISIL Reaffirms 'B' Rating on INR25.8MM Loan
----------------------------------------------------------------
CRISIL's ratings on the bank facilities of Transons Overseas India
Private Limited (TOPL) continue to reflect the company's modest
scale of operations, and the high customer concentration in its
revenue profile. These rating weaknesses are partially offset by
the extensive experience of its promoters in the transformer
manufacturing industry and funding support received from them.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 10 CRISIL B/Stable (Reaffirmed)
Letter of Credit 65 CRISIL A4 (Reaffirmed)
Proposed Long Term
Bank Loan Facility 25.8 CRISIL B/Stable (Reaffirmed)
Outlook: Stable
CRSIL believes TOPL will continue to benefit over the medium term
from its promoters' extensive industry experience. The outlook may
be revised to 'Positive' in case of an increase in scale of
operations while operating margin is maintained, and if customer
base is significantly diversified thereby reducing dependence on
its group company for revenue. Conversely, the outlook may be
revised to 'Negative' in case of large, debt-funded capital
expenditure, or weakening of working capital management, leading
to deterioration in the company's financial risk profile,
particularly liquidity.
Update
Revenue increased at a healthy pace of 57 percent year-on-year to
INR155 million in 2014-15 (refers to financial year, April 1 to
March 31). For the 10 months through January 2016, revenue was
INR124 million and is likely to increase to INR180-200 million in
2015-16. Most of the revenue (90-95 percent) was derived from
Group Company, Kotsons Pvt Ltd. Operating profitability was at
6.56 percent in 2014-15, largely in line with the previous year
and is expected to remain at a similar level over the medium term.
Operations are working capital-intensive in nature as reflected in
gross current assets of 190 days as on March 31, 2015, largely
driven by high debtor days. This has resulted in high bank limit
utilisation at an average of around 97 percent during the 12
months ended September 30, 2015. Moreover, the financial risk
profile remains average; gearing was 1.5 times as on March 31,
2015, due to high reliance on bank debt to meet working capital
requirement. Debt protection metrics were average with interest
coverage and net cash accrual to total debt ratios at 1.60 times
and 0.09 times, respectively, in 2014-15. The financial risk
profile is expected to remain average over the medium term.
Liquidity is supported by sufficient cash accrual of INR3.4-4.0
million in 2015-16, with similar amount expected in 2016-17,
against debt repayment obligation of around INR0.09 million for
the same period, and funding support of around INR11.1 million in
the form of unsecured loan as of March 31, 2015, from promoters.
Established in 2011 and based in Alwar, Rajasthan, TOPL
manufactures copper wires, corrugated wall panels, and circuit
breakers used in transformers. The company was originally set up
as P & M Electricals and Transformers Pvt Ltd and got its present
name in 2012. Its manufacturing facility is in Alwar. TOPL is
managed by Mr. Pawan Kumar Jain and his son Mr. Mohnish Jain.
TRISTAR TRADELINKS: Ind-Ra Withdraws 'IND BB-' LT Issuer Rating
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has withdrawn Tristar
Tradelinks Private Limited's (TTPL) Long Term Issuer Rating of
'IND BB-(suspended)'.
The ratings have been withdrawn due to lack of adequate
information. Ind-Ra will no longer provide ratings or analytical
coverage for TTPL.
Ind-Ra suspended TTPL's ratings on 30 September 2013.
TTPL's ratings:
-- Long Term Issuer Rating: 'IND BB-(suspended)'; rating
withdrawn
-- INR150 million fund-based limits: 'IND BB-(suspended)';
rating withdrawn
-- INR40 million term loans: 'IND BB-(suspended)'; rating
withdrawn
-- INR2.5 million non-fund-based limits: 'IND A4+(suspended)';
rating withdrawn
UNITED BROTHERS: ICRA Assigns 'B+' Rating to INR3.0cr Cash Loan
---------------------------------------------------------------
ICRA has assigned a long-term rating of [ICRA]B+ to the INR3.00
crore long term fund based facility of United Brothers PolyTech
LLP. ICRA has also assigned a short-term rating of [ICRA]A4 to the
INR5.00 crore short term fund based and the INR5.00 crore non-fund
based bank facilities of the firm. The outlook on the long term
rating is Stable.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based-Cash
Credit 3.00 [ICRA]B+ Assigned
Fund based-Bill
Discounting 5.00 [ICRA]A4 Assigned
Non Fund based-
Bank Guarantee 5.00 [ICRA]A4 Assigned
Rating Rationale
The assigned ratings takes into account the firm's long track
record in the polymers distribution business and the healthy
demand prospects for the polymer products marketed by the firm.
However, the ratings are constrained due to modest financial risk
profile as reflected by low cash accruals and weak debt-protection
metrics and exposure to counter-party credit risk given the nature
of business and the low networth base of the firm. Moreover, the
ratings also factor in the exposure of the profitability of the
firm to interest income from debtors, given the interest spread
against borrowing cost. The ratings are also constrained by the
partnership nature of entity, exposing the firm to risk of capital
withdrawals.
United Brothers Polytech LLP (UBPL) was established as a
partnership firm in August 2012 with the object of distribution
and marketing of in Polypropylene products. The firm is an agent
and a consignment stockist for distribution of polypropylene (PP)
in the Western region, supplied by HPCL Mittal Energy Ltd (HMEL)
which is rated at [ICRA]AA-(Stable)/[ICRA]A1+. A group company,
United Brothers (UB) is also a Del Credere Agent (DCA) and
consignment stockist of GAIL India Limited (GIL) for distribution
of polymer products in Western India.
Recent Results
For the full year FY2015, the company reported a net profit of
INR0.28 crore on an operating income of INR1.53 crore, as compared
to a net profit of INR0.03 crore on an operating income of INR0.50
crore during the previous year. On a provisional basis, the
company reported an operating income of 1.49 crore during 8M
FY2016.
VIR FOODS: ICRA Ups Rating on INR16cr Cash Loan to 'B'
------------------------------------------------------
ICRA has revised its long term rating on the INR18 crore fund
based limits of V.I.R Foods Limited (VIR) from [ICRA]BB- to
[ICRA]D and has thereafter revised it to [ICRA]B.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 16.00 ICRA]B; downgraded from
[ICRA]BB-(Stable) to [ICRA]D
and then upgraded to [ICRA]B
Term Loan 2.00 ICRA]B; downgraded from
[ICRA]BB-(Stable) to [ICRA]D
and then upgraded to [ICRA]B
ICRA's rating action is driven by delays in debt servicing by VIR
and persistent overutilization of working capital limits, due to
the stretched liquidity position of the company, which had
necessitated restructuring of the working capital limits. However,
following the restructuring, the debt repayment will now commence
from April, 2016 and the utilisation of the working capital limits
has been regularised, ICRA has hence revised the rating from
[ICRA]D to [ICRA]B.
The rating of [ICRA]B reflects the decline in scale of operations
in VIR's rice milling business, which coupled with the high
intensity of competition in the industry has resulted in net
losses in the past two years .The rating also takes into account
the high working capital intensity of the rice milling business
due to the need to maintain substantial inventories; the resultant
working capital requirements have been funded mainly through bank
borrowings, leading to a highly leveraged capital structure and
weak coverage indicators. The rating also factors in agro climatic
risks, which can affect the availability of paddy in adverse
conditions.
ICRA, however, draws comfort from the extensive experience of the
promoters in the rice industry, proximity of the mill to major
rice growing areas which results in easy availability of paddy and
stable demand outlook, with rice being an important part of the
staple Indian diet.
Going forward, the ability of the company to increase its scale of
operations in a profitable manner, while maintaining a prudent
capital structure, would remain the key rating sensitivities.
Incorporated in the year 2005, V.I.R Foods Limited is a public
limited company engaged in milling of basmati and non basmati
rice. The company's plant at Payal, Ludhiana (Punjab) has a
milling capacity of 15 tons/hour. The company sells its products
under its registered brand names "Nature Gold", and "Royal Taste
of India".
Recent Results
The company reported a net loss of INR0.99 crore on an operating
income of INR60.86 crore in FY2015 as against a net loss of
INR0.28 crore on an operating income of INR221.24 crore in the
previous year.
VIKAS SANITARY: CRISIL Raises Rating on INR32.5MM Loan to B+
------------------------------------------------------------
CRISIL has upgraded its rating on the long-term bank facilities of
Vikas Sanitary Wares (VSW) to 'CRISIL B+/Stable' from 'CRISIL
B/Stable'. The rating on the firm's short-term facility has been
reaffirmed at 'CRISIL A4.'
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 10 CRISIL A4 (Reaffirmed)
Cash Credit 32.5 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
Term Loan 29 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
The rating upgrade reflects improvement in the firm's financial
risk profile and liquidity, following capital infusion of INR30
million by the partners in 2014-15 (refers to financial year,
April 1 to March 31). Gearing, therefore, reduced to around 1.15
times as of March 2015 from over 3 times a year ago. Although
liquidity and financial risk profile are expected to remain stable
over the medium term, any withdrawals of capital by the partners
will constitute a key rating sensitivity factor.
The ratings continue to reflect VSW's modest scale of operations,
and large working capital requirements in the intensely
competitive ceramics industry. These rating weaknesses are
partially offset by the extensive experience of VSW's partners in
the ceramics industry and the proximity of its manufacturing
facilities to raw material and labor sources.
Outlook: Stable
CRISIL believes VSW will continue to benefit over the medium term
from its partners' extensive experience. The outlook may be
revised to 'Positive' if significant increase in scale of
operations and profitability considerably strengthens cash accrual
and net worth. Conversely, the outlook may be revised to
'Negative' if low accrual, reduced profitability, stretch in
working capital cycle, or any large debt-funded capital
expenditure weakens key credit metrics.
VSW, established in 1995, is promoted by the Morbi (Gujarat)-based
Mr. Bhavesh Patel, Mr. Harjivanbhai Patel, and Mr. Priteshbhai
Patel. The company manufactures ceramic wall and floor tiles, and
has a capacity of 36,500 tonnes per annum.
WOODVILLE PALACE: CRISIL Assigns 'B-' Rating to INR200MM Loan
-------------------------------------------------------------
CRISIL has assigned its rating of 'CRISIL B-/Stable' to the long-
term bank loan facility of Woodville Palace Hotel (WHP).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 200 CRISIL B-/Stable
The rating reflects high off-take risk of the proposed project on
account of intense competition in hospitality industry, and weak
liquidity position of the firm. These rating weaknesses are offset
by the moderate funding and completion risk of the project and the
extensive experience of promoter in hospitality industry.
Outlook: Stable
CRISIL believes that WHP will benefit from its promoter's
extensive experience of over three decades in hospitality
industry. The outlook may be revised to 'Positive' in case the
company executes its project on time and within the estimated
cost, or has higher-than-expected average room rates and occupancy
levels and hence, reports higher-than-expected accruals.
Conversely, the outlook may be revised to 'Negative' in case WPH
reports a significant time or cost overrun, which would adversely
impact its debt servicing ability.
WHP is a proprietorship firm incorporated by Mr. Raj Kumar Uday
Singh and operates a hotel in Shimla under the name 'Woodville
Palace'. The property comprises of 24 rooms and the firm is in
process of expanding and renovating the same. The project is
expected to get completed by financial year 2015-16 and the hotel
is expected to house 50 rooms post completion.
=========
J A P A N
=========
TOSHIBA CORP: Faces Tight Deadline for Restructuring Plan
---------------------------------------------------------
Atsuko Fukase at The Wall Street Journal reports that Toshiba
Corp. is facing a tight deadline for mapping out a restructuring
plan that could be made more difficult by the ambiguous role of
the Japanese government.
Sharp Corp. of Japan, last week made a surprise decision to favor
a takeover offer from Taiwanese electronics assembler Foxconn over
a bailout by a government-led investment fund. That fund, called
the Innovation Network Corp. of Japan, or INCJ, has also been
talking to Toshiba executives, according to people familiar with
the matter, but its inability to land the Sharp deal has made its
role at Toshiba uncertain, the Journal relates.
The Journal says Toshiba needs a speedy rescue in the wake of an
accounting scandal last year and rapid deterioration of its core
units. The company's share price hit an intraday low of JPY167
($1.43) on Feb. 8, the lowest level since November 1979, the
Journal discloses citing data provider CQG. Toshiba last week
projected a loss of JPY710 billion ($6.1 billion) for its fiscal
year ending in March, the report notes.
On Feb. 5, Standard & Poor's downgraded Toshiba's corporate credit
rating three notches deeper into junk-bond territory. The Journal
relates that the ratings firm said Toshiba's short-term borrowing
has "jumped considerably" and "support from main creditor banks
will remain essential to maintain liquidity."
According to the Journal, Toshiba Chief Executive Masashi
Muromachi said last week that he hoped to outline key parts of a
restructuring plan by the end of February. The company has said it
is looking to sell all or part of units making medical devices,
semiconductors and "white goods" such as refrigerators and washing
machines, the Journal relays.
The Journal notes that the Ministry of Economy, Trade and Industry
believes that the de facto dissolution of Toshiba could be a good
opportunity for consolidating Japanese industry and creating a
smaller number of stronger players, according to people close to
the matter. At one point, the ministry and INCJ, the investment
fund that it oversees, envisioned combining the white-goods
businesses of Toshiba and Sharp, they said, the Journal relays.
But Foxconn's plan to take control of Sharp has likely nixed that
plan, because Foxconn, also known as Hon Hai Precision Industry
Co., has said it wants to keep Sharp intact. Toshiba's Mr.
Muromachi said he would consider selling his company's white-goods
unit to a non-Japanese company, with other Asian manufacturers
considered the most likely bidders.
Within the Japanese government, opinions are divided as to whether
it should take the lead in addressing Toshiba's woes, the report
notes. The Journal recalls that the Japan Fair Trade Commission
said in late January that the "incentive to improve business
efficiency is weakened when those whose operations have fallen
into a difficult situation anticipate that they will be able to
receive public aid for revival."
Toshiba's case is more delicate because it has a sizable nuclear-
power business both in Japan and overseas through its Westinghouse
Electric Co. unit, making its fate in part a matter of national
security for Tokyo, the Journal states.
The Journal relates that Standard & Poor's said the danger of a
liquidity crunch might ebb if Toshiba can bring in a good price
for its medical-systems business, which makes X-ray machines and
other types of scanners. Toshiba has said it plans to sell a
controlling stake in the profitable business.
People familiar with the sale said it could fetch more than $3
billion, the Journal relays. One of those people said the leading
bidders include Canon Inc., Fujifilm Holdings Corp., and a joint
effort by Konica Minolta Inc. and private-equity fund Permira,
according to the Journal. Canon's chief financial officer said
last month the company was interested in Toshiba's medical
business. The companies declined to comment on whether they are
bidders, the Journal notes.
The report says Canon, Fujifilm and Konica Minolta, once known as
leaders in the Japanese camera industry, now have significant
medical-imaging businesses. A deal by any of the three would keep
Toshiba's technology under domestic control.
"If the buyer is purely a foreign investment fund which could make
money from selling the business to outsiders, it may not make much
sense for Toshiba and Japanese industry," the Journal quotes a
government official as saying.
About Toshiba Corp.
The Troubled Company Reporter-Asia Pacific, citing Reuters,
reported on July 22, 2015, that an independent investigation said
in a report on July 21 that Toshiba Corp. overstated its operating
profit by JPY151.8 billion ($1.22 billion) over several years in
accounting irregularities involving top management.
The investigating committee said in a report filed by Toshiba to
the Tokyo Stock Exchange that Toshiba President and Chief
Executive Hisao Tanaka and his predecessor, Vice Chairman Norio
Sasaki, were aware of the overstatement of profits and delay in
reporting losses in a corporate culture that "avoided going
against superiors' wishes," according to Reuters.
The TCR-AP, citing Bloomberg News, reported on July 22, 2015, that
Toshiba Corp. President Hisao Tanaka and two other executives quit
to take responsibility for a $1.2 billion accounting scandal that
caused the maker of nuclear reactors and household appliances to
restate earnings for more than six years.
Norio Sasaki, the vice chairman, and Atsutoshi Nishida, a former
president who was serving as adviser, also resigned, the Tokyo-
based company said July 21, more than two months after announcing
it was investigating possible accounting irregularities, according
to Bloomberg.
On Dec. 28, 2015, Moody's Japan K.K. has downgraded Toshiba
Corporation's long-term senior unsecured bond ratings to Ba2 from
Baa3. Moody's has also downgraded Toshiba's subordinated debt
rating to B1 from Ba2, and short-term rating to Not Prime from
Prime-3. At the same time, Moody's has downgraded Toshiba's Baa3
issuer rating to a corporate family rating (CFR) of Ba2, and has
therefore withdrawn the issuer rating. In addition, Moody's has
placed Toshiba's Ba2 CFR and long-term senior unsecured bond
ratings, as well as its B1 subordinated debt rating under review
for downgrade.
Toshiba Corporation (TYO:6502) -- http://www.toshiba.co.jp/-- is
a Japan-based manufacturer involved in five business segments.
The Digital Products segment offers cellular phones, hard disc
devices, optical disc devices, liquid crystal televisions, camera
systems, digital versatile disc (DVD) players and recorders,
personal computers (PCs) and business phones, among others. The
Electronic Device segment provides general logic integrated
circuits (ICs), optical semiconductors, power devices, large-scale
integrated (LSI) circuits for image information systems and liquid
crystal displays (LCDs), among others. The Social Infrastructure
segment offers various generators, power distribution systems,
water and sewer systems, transportation systems and station
automation systems, among others. The Home Appliance segment
offers refrigerators, drying machines, washing machines, cooking
utensils, cleaners and lighting equipment. The Others segment
leases and sells real estate.
TOSHIBA CORP: May Sell White Goods Business to Foreign Rival
------------------------------------------------------------
Jiji Press reports that with Sharp Corp. increasing its chances of
making turnaround under the sponsorship of Taiwan's Hon Hai
Precision Industry Co., another troubled Japanese electronics
manufacturer, Toshiba Corp., is now seen as more likely to sell
its white goods business to a foreign rival.
According to the report, Innovation Network Corp. of Japan, a
government-backed investment fund which is seen losing out in the
bidding for Sharp to Hon Hai, has been planning to integrate the
white goods operations between Sharp and Toshiba.
The INCJ plan appears to reflect the eagerness of the industry
ministry, which oversees the turnaround assistance fund, to
promote a realignment in the domestic consumer electronics
industry under the initiative of "Japan Inc.," Jiji Press relates.
"There are too many domestic home electronics makers," a senior
ministry official has said, the report relays.
But the envisioned integration now seems unlikely to be realized,
against a backdrop of the Taiwanese maker's lead in the bailout
talks with Sharp. Toshiba President Masashi Muromachi said on Feb.
4, "It's an option to sell (the firm's white goods unit) to an
overseas maker," Jiji Press reports.
Jiji Press notes that in the first place, there were doubts about
the effectiveness of a merger of white goods operations between
the two ailing Japanese makers. "It would end up being an alliance
of the weak," an industry observer said.
Even a Toshiba executive questioned the idea, saying, "There are
too many overlapping operations."
Other domestic makers, including Hitachi Ltd., have been reluctant
to take over Toshiba's white goods division, the report states.
According to Jiji Press, the production of white goods, which
spearheaded the economy's rapid growth decades ago, is falling as
Japanese makers struggle to cope with global competition and the
shrinking domestic market on the back of the nation's declining
population.
In 2012, China's Haier Group purchased the refrigerator and
washing machine businesses of Sanyo Electric Co., a Panasonic
Corp. subsidiary. With development bases in Kyoto Prefecture and
Saitama Prefecture, the Chinese maker now releases products under
the Aqua brand, which it took over from Sanyo, the report notes.
In 2014, Haier's sales in Japan totaled some JPY50 billion, the
report discloses, the report discloses. Its products, including
refrigerators with liquid crystal display panels and featuring
designs from the popular movie series "Star Wars," are attaining
considerable popularity in Japan.
About Toshiba Corp.
The Troubled Company Reporter-Asia Pacific, citing Reuters,
reported on July 22, 2015, that an independent investigation said
in a report on July 21 that Toshiba Corp. overstated its operating
profit by JPY151.8 billion ($1.22 billion) over several years in
accounting irregularities involving top management.
The investigating committee said in a report filed by Toshiba to
the Tokyo Stock Exchange that Toshiba President and Chief
Executive Hisao Tanaka and his predecessor, Vice Chairman Norio
Sasaki, were aware of the overstatement of profits and delay in
reporting losses in a corporate culture that "avoided going
against superiors' wishes," according to Reuters.
The TCR-AP, citing Bloomberg News, reported on July 22, 2015, that
Toshiba Corp. President Hisao Tanaka and two other executives quit
to take responsibility for a $1.2 billion accounting scandal that
caused the maker of nuclear reactors and household appliances to
restate earnings for more than six years.
Norio Sasaki, the vice chairman, and Atsutoshi Nishida, a former
president who was serving as adviser, also resigned, the Tokyo-
based company said July 21, more than two months after announcing
it was investigating possible accounting irregularities, according
to Bloomberg.
On Dec. 28, 2015, Moody's Japan K.K. has downgraded Toshiba
Corporation's long-term senior unsecured bond ratings to Ba2 from
Baa3. Moody's has also downgraded Toshiba's subordinated debt
rating to B1 from Ba2, and short-term rating to Not Prime from
Prime-3. At the same time, Moody's has downgraded Toshiba's Baa3
issuer rating to a corporate family rating (CFR) of Ba2, and has
therefore withdrawn the issuer rating. In addition, Moody's has
placed Toshiba's Ba2 CFR and long-term senior unsecured bond
ratings, as well as its B1 subordinated debt rating under review
for downgrade.
Toshiba Corporation (TYO:6502) -- http://www.toshiba.co.jp/-- is
a Japan-based manufacturer involved in five business segments.
The Digital Products segment offers cellular phones, hard disc
devices, optical disc devices, liquid crystal televisions, camera
systems, digital versatile disc (DVD) players and recorders,
personal computers (PCs) and business phones, among others. The
Electronic Device segment provides general logic integrated
circuits (ICs), optical semiconductors, power devices, large-scale
integrated (LSI) circuits for image information systems and liquid
crystal displays (LCDs), among others. The Social Infrastructure
segment offers various generators, power distribution systems,
water and sewer systems, transportation systems and station
automation systems, among others. The Home Appliance segment
offers refrigerators, drying machines, washing machines, cooking
utensils, cleaners and lighting equipment. The Others segment
leases and sells real estate.
=====================
P H I L I P P I N E S
=====================
FARMERS' RURAL: Former Officers, Employees Charged With Theft
-------------------------------------------------------------
The Philippine Deposit Insurance Corporation (PDIC) filed criminal
charges of qualified theft against five former officers and
employees of the closed Farmers' Rural Bank before the Office of
the Provincial Prosecutor of Batangas on January 13, 2016.
Farmers' Rural Bank is a single-unit bank located in Lian,
Batangas and placed under PDIC receivership by virtue of Monetary
Board Resolution No. 1266.B dated August 14, 2015.
Respondents were also charged for conducting business in an unsafe
and unsound manner in violation of Republic Act 3591, as amended,
or the PDIC Charter, and falsification of commercial documents
under the Revised Penal Code.
The complaint alleged that from 2006 to 2015, the respondents made
several unlawful advances from the bank's coffers aggregating
PHP17.7 million, and to cover up, forged withdrawal slips, issued
bank certificates to depositors reflecting the actual amounts but
retained counterpart copies that reflected lower amounts for the
bank's file, and made unauthorized withdrawals from other deposit
accounts whenever a depositor made a legitimate withdrawal from
his account. Unauthorized withdrawals were transacted against 88
deposit accounts, consisting of 66 savings and 22 time deposit
accounts.
Charged were respondents Nenette L. Medrano (former Manager/
Compliance Officer), Rubenita R. Catamin (former Cashier), Narcisa
A. Abergos (former Bookkeeper), Angelina D. Mateo (former Internal
Auditor) and Soledad A. Jonson (former Loans Bookkeeper), who
allegedly took advantage of their positions, knowledge of the
bank's records, and familiarity with the depositors to siphon off
the bank's funds aggregating PHP17.7 million.
The PDIC remains relentless in its pursuit of legal action against
erring bank owners, officers and personnel to serve justice,
protect the interests of the depositors and creditors, and send a
stern warning against unscrupulous individuals who intend to take
advantage of the deposit insurance system.
=============
V I E T N A M
=============
SHIPBUILDING INDUSTRY: Restructures 225 Affiliates
--------------------------------------------------
Vietnamnet reports that Shipbuilding Industry Corporation (SBIC),
formerly known as the Vietnam Shipbuilding Industry Group
(Vinashin), has restructured 225 out of 272 affiliates over the
past five years.
Vietnamnet relates that Nguyen Ngoc Su, chairman of SBIC, said at
a conference on SBIC's plans for 2016 in Hanoi on Feb. 9 that the
number of restructured firms represented 82.7% of the target and
that they were merged, dissolved or let to go bankrupt. The
remaining 47 companies will be restructured this year, the report
says.
Many firms have yet to be restructured due to their huge debt. For
instance, Halong Shipbuilding saw its negative equity amounting to
VND2.6 trillion (US$115.5 million), according to Vietnamnet.
At present, SBIC has eight businesses under its umbrella and
operating in the shipbuilding sector, the report notes.
According to Vietnamnet, SBIC obtained VND5.9 trillion in revenue
and VND1 trillion in net profit last year.
SBIC will continue restructuring debt this year. It has to pay the
original loan of US$750 million provided by the Government in 2010
and restructure international bonds issued in 2015 and another
VND7 trillion of domestic debt, Vietnamnet discloses.
Vietnamnet says the Government has allowed SBIC to issue
Government-guaranteed bonds with a tenor of 10 years on
international and domestic markets as part of a plan to reduce 70%
of its original debt.
===============
X X X X X X X X
===============
* Steelmakers Face Another Year of Pain With Closures, Job Losses
-----------------------------------------------------------------
Maytaal Angel at Reuters reports that global steelmakers face
another year of pain with more capacity closures and job losses
expected, even as steel prices start to stabilise thanks to
painful production cuts, depleted stockpiles and rising trade
barriers.
Reuters relates that capacity closures and bankruptcies picked up
across the globe last year and top producers like ArcelorMittal
and Nippon Steel slashed earnings forecasts as prices ST-CRU-IDX
lost a third of their value, sliding to 12-year lows.
In January, prices finally edged up, but experts said a strong and
sustained recovery is not yet within reach, meaning well over half
the industry will remain lossmaking, according to Reuters.
"We see steel prices stabilising this year but the industry as a
whole is still burning cash," Reuters quotes Patrick Morton,
analyst at Macquarie, as saying. "Without some unforeseen event to
help prices rebound strongly, the likelihood of western world
shutdowns continues to rise."
Reuters notes that some 50 million tonnes of excess steel capacity
was shut last year in China, which produces about half the world's
1.6 billion tonnes of steel, and whose major steelmakers lost
CNY53.1 billion ($8.07 billion) from January to November.
China steel rebar prices have gained 1.7 percent this year to
1,826 yuan ($277.62) a tonne following the cutbacks, Reuters
discloses.
Outside China, another 20 millions tonnes of capacity was shut
last year, Reuters relates citing consultants CRU. But analysts
said that to balance the market, another 200-300 million tonnes
still needs to be cut, mostly in China, Reuters relates.
According to Reuters, Beijing said last month it will cut steel
capacity by 100-150 million tonnes, a move expected to lead to
400,000 job losses. There was no timeframe given for the cuts.
Reuters says China is facing growing trade tensions after
exporting a record 112 million tonnes of steel last year,
equivalent to total North American output. Its trade partners have
instituted dozens of anti-dumping measures against it, with many
more in the pipeline.
"China's steel industry is huge, making it difficult to manage and
direct. News of capacity cuts might offer short term price support
. . . but we've seen announcements like this before which never
really delivered," Reuters quotes Morgan Stanley analyst Tom Price
as saying.
According to Reuters, the World Steel Association (Worldsteel)
said steel demand is expected to grow by 0.7 percent this year to
1.52 billion tonnes.
Global capacity, however, remains a whopping 2.3 billion tones,
the report notes.
"Nearly any Western producer making commodity-grade steel will not
be profitable at these price levels," Ben Orhan, senior economist
at IHS Global Insight, Reuters relays. "Profits can be made only
in specialty steels. We expect prices will recover slightly this
year but there will be further mill shutdowns."
*********
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 2016. All rights reserved. ISSN: 1520-9482.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding,
electronic re-mailing and photocopying) is strictly prohibited
without prior written permission of the publishers.
Information contained herein is obtained from sources believed
to be reliable, but is not guaranteed.
TCR-AP subscription rate is US$775 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance
thereof are US$25 each. For subscription information, contact
Peter Chapman at 215-945-7000 or Nina Novak at 202-362-8552.
*** End of Transmission ***