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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
Friday, March 4, 2016, Vol. 19, No. 45
Headlines
A U S T R A L I A
ALINTA ENERGY: Moody's Affirms B1 Corporate Family Rating
AUSTRALIAN SHIPPING: First Creditors' Meeting Set For March 11
BEARS CONCRETING: First Creditors' Meeting Set For March 11
BOARDWALK INVESTMENTS: First Creditors' Meeting Set For March 11
GOODALL PTY: First Creditors' Meeting Set For March 10
NATHAN TINKLER: Officially Declared Bankrupt
NEDRILL BLASTING: Placed Into Voluntary Administration
QUEENSLAND NICKEL: Clive Palmer to Press On With Suit vs Citic
TRITON MINERALS: First Creditors' Meeting Set For March 15
C H I N A
AGFEED USA: Gothner's Bid to Dismiss JLL Suit Partially Granted
GENERAL STEEL: Angela He Quits as Director
LIFE MEDIA: F-tuan Losses Raise Going Concern Doubt, Says Groupon
XINYUAN REAL: S&P Affirms 'B' CCR; Outlook Negative
I N D I A
ABEL COLD: Ind-Ra Suspends 'IND B' Long-Term Issuer Rating
ACCORD PLUS: ICRA Reaffirms 'B' Rating on INR13cr Term Loan
AMW MOTORS: CARE Assigns 'D' Rating to INR1,350cr LT Loan
AQUILA CERAMIC: CRISIL Reaffirms B Rating on INR48.5MM Term Loan
ATTIRE DESIGNERS: CRISIL Cuts Rating on INR190MM Loan to 'D'
BHALLA CHEMICAL: ICRA Suspends B+/A4 Rating on INR10cr Bank Loan
CBS TECHNOLOGIES: Ind-Ra Suspends IND B+ Long-Term Issuer Rating
CHANDAK BROTHERS: Ind-Ra Suspends IND B+ Long-Term Issuer Rating
CHRISTY FABRIC: CRISIL Cuts Rating on INR17MM Term Loan to B+
CHRISTY TEXTILE: CRISIL Cuts Rating on INR28.5MM LT Loan to B+
CREATIVE HEALTH: Ind-Ra Suspends 'IND B' Long-Term Issuer Rating
CRIMSON METAL: CARE Reaffirms 'B' Rating on INR10.70cr LT Loan
DARJEELING POWER: ICRA Reaffirms B+ Rating on INR22.75cr Loan
EVER GREEN: CRISIL Cuts Rating on INR31.5MM Term Loan to B+
G.D. METSTEEL: ICRA Assigns B- Rating to INR15cr Cash Loan
G. R. WEAVERS: ICRA Assigns B+ Rating to INR13cr Long Term Loan
GOODONE TRADERS: CRISIL Lowers Rating on INR190MM Loan to 'D'
GOYAL KNITWEARS: CARE Assigns B+ Rating to INR12cr LT Loan
H. S. WEAVERS: ICRA Assigns 'B' Rating to INR4.05cr Term Loan
HIGH VALUE: CRISIL Lowers Rating on INR370MM Loan to 'D'
JSW STEEL: Moody's Cuts Corporate Family Rating to 'Ba3'
K.S.M. BASHIR: Ind-Ra Suspends 'IND BB-' Long-Term Issuer Rating
KST INFRASTRUCTURE: Ind-Ra Suspends 'IND BB-' LT Issuer Rating
LIDCO PROJECTS: CARE Assigns B+ Rating to INR7.50cr LT Loan
LUCKNOW MEDICAL: ICRA Reaffirms 'B' Rating on INR6.50cr Loan
MAHAVEER FIBRES: CARE Reaffirms B+ Rating on INR11.95cr LT Loan
MARUTI HOLOSTIC: ICRA Reaffirms 'B' Rating on INR5.22cr LT Loan
MARYA FROZEN: Ind-Ra Suspends 'IND BB' Long-Term Issuer Rating
MASS-TECH CONTROLS: CRISIL Reaffirms B Rating on INR40MM Loan
MEENA BAZAAR: Ind-Ra Withdraws 'IND B+' Long-Term Issuer Rating
NANDHI DALL: ICRA Suspends 'D' Rating on INR88.72cr Bank Loan
NUWAY ORGANIC: ICRA Suspends 'C' Rating on INR28.37cr Loan
OMICRON POWER: CARE Lowers Rating on INR30.09cr Loan to 'C'
PIONEER FABRICATORS: CRISIL Cuts Rating on INR150MM Loan to B-
R.K. PHARMACEUTICALS: CARE Assigns B+ Rating to INR5cr LT Loan
RBD INTERNATIONAL: CRISIL Lowers Rating on INR160MM Loan to D
RCL PAPER: CARE Lowers Rating on INR7.28cr LT Loan to 'D'
RELIANCE COMMUNICATIONS: Fitch Affirms 'BB-' IDR; Outlook Stable
REXON LABORATORIES: CARE Assigns B+ Rating to INR1cr LT Loan
RR FAB: CARE Reaffirms B+ Rating on INR3.80cr LT Loan
RS GHUMMAN: Ind-Ra Suspends 'IND B' Long-Term Issuer Rating
SARADHAMBIKA PAPER: ICRA Reaffirms B+ Rating on INR6.0cr LT Loan
SEC BUILDTECH: Ind-Ra Suspends 'IND B+' Long-Term Issuer Rating
SH. RANSINGH: CRISIL Assigns B+ Rating on INR80MM Cash Loan
SHAPE ENGINEERING: CRISIL Reaffirms 'B' Rating on INR105MM Loan
SHIVA WHEELS: CARE Assigns B+ Rating to INR5.56cr LT Loan
SIDHI VINAYAK: Ind-Ra Suspends 'IND BB' Long-Term Issuer Rating
SIVA SWATHI: Ind-Ra Withdraws 'IND BB+' Long-Term Issuer Rating
SLMI INFRAPROJECTS: CRISIL Ups Rating on INR150MM Loan to B-
SRI KODURI: ICRA Reaffirms 'B' Rating on INR17cr Fund Based Loan
SSZ COMMODITIES: CRISIL Lowers Rating on INR300MM Loan to B+
SUNGRACIA TILES: CRISIL Lowers Rating on INR150MM Loan to B+
T K INTERNATIONAL: Ind-Ra Suspends IND D Long-Term Issuer Rating
U. B. RICE: CRISIL Upgrades Rating on INR60.4MM LT Loan to 'B'
UNITED COTTON: CARE Reaffirms 'B' Rating on INR6.78cr LT Loan
WELLDONE EXIM: CRISIL Lowers Rating on INR400MM Loan to 'D'
J A P A N
TOSHIBA CORP: Asks Banks For New Restructuring Funds
M A L A Y S I A
1MALAYSIA: Deposits in Malaysian Leaders Said to Top $1 Billion
N E W Z E A L A N D
KAIZUKA LIMITED: Bar in Voluntary Liquidation
SLEEP OVERS: Placed into Receivership
S I N G A P O R E
SINGAPORE: 43 Mainboard Companies to be Placed on SGX Watch-List
S R I L A N K A
BANK OF CEYLON: Fitch Lowers IDR to 'B+'; Outlook Negative
SRILANKAN AIRLINES: Fitch Lowers Rating on Bonds to B+
SRI LANKA INSURANCE: Fitch Cuts IFS Rating to 'B+'; Outlook Neg.
SRI LANKA TELECOM: Fitch Lowers IDR to 'B+'; Outlook Negative
- - - - -
=================
A U S T R A L I A
=================
ALINTA ENERGY: Moody's Affirms B1 Corporate Family Rating
---------------------------------------------------------
Moody's Investors Service has affirmed Alinta Energy Ltd's B1
corporate family rating and of Alinta Energy Finance's (AEF) B1
senior secured debt rating. At the same time, Moody's has
maintained the positive outlook on the ratings.
AEF is a fully owned subsidiary and funding vehicle for Alinta
Holdings Limited, and rated debt obligations are guaranteed by the
parent.
RATING RATIONALE
"The positive outlook reflects our expectation of further
strengthening in Alinta's credit metrics over the next 12-18
months, which mainly results from various management initiatives
to improve operating performance, such as the closure of Flinders
power stations and contract extensions in other key assets," says
Spencer Ng, a Moody's Vice President and senior analyst, adding
"this strengthening is however being counterbalanced by the
deterioration in operating conditions in the company's key
markets".
In particular, the B1 rating factors in the increasing uncertainty
in the commodity and resource sector in West Australia. Alinta
generates more than 75% of its EBITDA from the state, around one-
thirds of which is from contracted electricity sales and pipeline
capacity charges to iron ore mine in the Pilbara region and the
balance from its gas retail business.
Moody's believes that the weak commodity market is increasing
Alinta's counterparty risk exposure and the potential for
renegotiation of key offtake contracts.
Key customers for Alinta's Pilbara assets include BHP Billiton
Limited (A1 review for downgrade) and Roy Hill (unrated).
"Although the retail gas business is not directly exposed to weak
commodity prices, gas demand could be negatively affected by the
macro-economic challenges being experienced in the West Australia
economy, and in the medium term by the opaque and evolving nature
of the gas regulatory framework in the state," adds Ng.
The West Australian state government has stated that it intends to
open the retail gas market to full competition within the next
five years. Such a development could affect Alinta's strong market
position in the sector over time, which has to date been a key
underpin of its earnings. Although such development could also
present additional opportunity to Alinta to compete in the
residential electricity market.
The rating also factors in the potential for changes in the
company's long-term ownership. Around 81% of the company's equity
is currently held by financial investors, including private equity
and financial institutions. Given these shareholders have held
their stakes since 2011 and are generally not long term owners,
Moody's believes that there is a high likelihood of an ownership
change over the next few years, which creates uncertainty over
Alinta's long-term capital structure and financial policy.
The rating could be upgraded if Alinta's funds from operations to
debt ratio rises to the mid-teens range on a sustained basis and
FFO interest strengthens above 2.2x, coupled with stabilization in
the operating environment and improved clarity around the
ownership structure. On the other hand, the outlook on the rating
could revert back to stable if there is a reversal in the positive
trend in the credit metrics, further weakening in the operating
environment and/or adverse regulatory developments. Material
levels of unforeseen capital expenditure associated with the
closure of the Flinders power station in South Australia could
also pressure the rating.
Alinta is an energy retailer based in Australia with a gas and
electricity retail presence in Western Australian and to a lesser
extent in the east coast national electricity market. It has
around 800,000 customers in total. It is also the owner and
operator of seven intermediate or peaking power stations across
the country and a single power station in New Zealand. The
company's generation fleet has a combined generation capacity of
around 2,000 MW.
AUSTRALIAN SHIPPING: First Creditors' Meeting Set For March 11
--------------------------------------------------------------
Steven Gladman of Hall Chadwick of Hall Chadwick was appointed as
administrator of Australian Shipping Services Pty Ltd on March 1,
2016.
A first meeting of the creditors of the Company will be held at
Hall Chadwick, Level 40, 2 Park Street, in Sydney, on March 11,
2016, at 11:00 a.m.
BEARS CONCRETING: First Creditors' Meeting Set For March 11
-----------------------------------------------------------
James Alexander Shaw and Jeffrey Allan Shute of Shaw Gidley were
appointed as administrators of Bears Concreting Pty Limited on
March 1, 2016.
A first meeting of the creditors of the Company will be held at
Shaw Gidley, Level 6, 384 Hunter Street, in Newcastle, on
March 11, 2016, at 10:30 a.m.
BOARDWALK INVESTMENTS: First Creditors' Meeting Set For March 11
---------------------------------------------------------------
Stephen John Michell and David Charles Quin of PCI Partners Pty
Ltd were appointed as administrators of Boardwalk Investments
(Aust) Pty Ltd of on March 1, 2016.
A first meeting of the creditors of the Company will be held at
PCI Partners Pty Ltd, Level 8, 179 Queen Street, in Melbourne, on
March 11, 2016, at 10:00 a.m.
GOODALL PTY: First Creditors' Meeting Set For March 10
------------------------------------------------------
Paul Vartelas of B.K. Taylor & Co. was appointed as administrator
of Goodall Pty Ltd on March 1, 2016.
A first meeting of the creditors of the Company will be held at
B.K. Taylor & Co. Meeting Room, Level 8, 608 St. Kilda Road, in
Melbourne, Victoria, on March 10, 2016, at 4:00 p.m.
NATHAN TINKLER: Officially Declared Bankrupt
--------------------------------------------
Colin Kruger at The Sydney Morning Herald reports that Nathan
Tinkler has made the quick descent from billionaire to bankrupt
after he failed to appeal a court judgment over money owed from
the sale of his private jet.
Mr Tinkler, who became Australia's youngest billionaire at the age
of 35, was declared bankrupt by the courts last month, barely a
week after he turned 40, SMH says.
He told Fairfax Media on March 3 it was unfortunate that his
attempts to create wealth and employment had led to this week's
bankruptcy ruling.
"I would like to apologise to the creditors and my family," the
report quotes Mr. Tinkler as saying.
SMH says the big question now is: What is left for creditors
claiming he owes them AUD250 million?
According to SMH, Mr Tinkler has claimed, in a filing to the
Australian Financial Security Authority (ASFA), that his only
possessions are AUD2,000 cash and a property in Rosglen, NSW he
acquired for AUD665,000.
His bankruptcy will leave a long line of creditors who will not
see a cent from the millions they are owed, including billionaire
Gerry Harvey, who is currently owed AUD9.5 million, SMH relates
citing ASFA document.
His biggest debtor is a trio of global financial firms, including
Credit Suisse, which is owed a combined AUDUS165 million. This
amount is secured against various assets in NSW and Queensland
that were not listed in the document. The Tax Office is owed
AUD2.16 million, SMH notes.
The report notes that it was Mr Tinkler's big punt on thoroughbred
racing that soaked up most of the fortune he made from coal during
the resources boom.
He squandered millions more buying up Newcastle's major sports
teams such as the NRL's Newcastle Knights and the FFA's Newcastle
Jets, which was the last part of his sporting empire to fall in an
all too familiar fashion, according to SMH. His A League licence
for the club was cancelled in May last year after the fallen
mining tycoon placed the club into voluntary administration,
listing debts of AUD2.7 million.
SMH states that the bankruptcy has derailed his great coal
comeback, forcing Mr Tinkler to stand down from Australian Pacific
Coal last month. He is now banned from being a company director in
Australia, the report notes.
He was supposed to continue advising the company, but confirmed on
March 3 that he would no longer be involved with the company in
any way, SMH relates.
NEDRILL BLASTING: Placed Into Voluntary Administration
------------------------------------------------------
Broede Carmody at SmartCompany reports that Nedrill Blasting
Contractors, a drilling company that has been operating for 18
years, has collapsed into voluntary administration.
SmartCompany says the business appointed external managers earlier
this week, with Christopher Powell -- cpowell@duncanpowell.com.au
-- and Nicholas Gyss -- ngyss@duncanpowell.com.au -- from
DuncanPowell acting as joint administrators.
A creditors meeting is due to be held on March 8 in Darwin, the
report discloses.
SmartCompany, citing a notice published by the Australian
Securities and Investments Commission, says an application to
wind-up the company was filed on February 4.
Nedrill Blasting Contractors, which is based in the Northern
Territory, has been providing drill and blast services to the
mining and construction industries across Australia since 1998.
QUEENSLAND NICKEL: Clive Palmer to Press On With Suit vs Citic
-------------------------------------------------------------
Jessica Grewal and Andrew Burrell at The Australian report that
Clive Palmer is pushing ahead with costly legal action against his
estranged Chinese business partner in Western Australia, despite
the likelihood that his Queensland Nickel refinery will close
within days unless its administrators are thrown a AUD10 million
lifeline.
According to The Australian, the federal MP's flagship private
company, Mineralogy, which admitted last year that it was running
short of funds, on March 2 asked the Supreme Court of Western
Australia for the right to pursue a AUD10 billion damages claim
against Chinese company Citic.
The Australian relates that Mineralogy applied to change its
pleadings in the case for the ninth time in three years,
continuing a bitter legal brawl on which it has spent millions.
The move could end speculation that Mineralogy might pull back in
its long legal fight against Citic due to a shortage of cash.
The case came as The Australian confirmed on March 2 that a
request by the administrator of Queensland Nickel to the state
government for a AUD10 million emergency overdraft was a "last
resort" and the plant might close on March 7 without the money.
The Australian says the administrator, FTI Consulting, had
approached "anyone and everyone else", including Mr Palmer, with
no success. An FTI spokesman said the cash was needed to bridge
the gap between the price of nickel and the company's costs, the
report states.
He said administrators continued to seek a solution by way of a
buyer or a deed of company arrangement but conceded the situation
was dire, The Australian relates.
According to The Australian, Queensland Treasurer Curtis Pitt held
talks with the administrators on March 2 but made it clear that
the position of the government, which previously rejected Mr
Palmer's request for a taxpayer-funded bailout, was unlikely to
change.
The Australian relates that Premier Annastacia Palaszczuk said it
was Mr Palmer's responsibility to "let Queenslanders know what
assets he is putting on the table first and foremost". She said
her government had provided support for affected workers and fast-
tracked local infrastructure in response to the refinery's
struggles.
"My commitment to Townsville is very clear; I want to know what
Clive Palmer's commitment to Townsville is," the report quotes Ms.
Palaszczuk as saying.
A QNI source said any closure announcement would not be made until
the administrators had addressed its committee of creditors at a
meeting scheduled for March 7 in Townsville, according to The
Australian.
In Perth, Mineralogy asked Supreme Court judge John Chaney for
permission to alter its AUD10 villion legal claim, The Australian
says. The judge will rule in the next few weeks on whether
Mineralogy can amend its pleadings, ahead of a full hearing on the
matter later this year, the report notes.
Last November, Justice Chaney found that Mineralogy engaged in an
"abuse of process" when it launched its legal claim against Citic,
sparking March 2's application for it to be dealt with as part of
separate case, adds The Australian.
Queensland Nickel operates the Palmer Nickel and Cobalt Refinery
in Queensland, Australia. Queensland Nickel directors appointed
John Park, Stefan Dopking, Kelly-Anne Trenfield and Quentin Olde
of FTI Consulting as voluntary administrators on Jan. 18, 2016.
TRITON MINERALS: First Creditors' Meeting Set For March 15
----------------------------------------------------------
Martin Jones, Andrew Smith and Dermott McVeigh of Ferrier Hodgson
were appointed as administrators of Triton Minerals Limited on
March 2, 2016.
The Administrators now control the Company's trading and are
assessing the Company's financial position.
A first meeting of creditors will be held on 15 March 2016 at
11:00am (AWST) at the offices of Ferrier Hodgson, Level 28, 108 St
Georges Terrace, Perth WA 6000.
Triton Minerals Limited is an ASX listed mineral exploration and
development company focused on exploring and developing the
graphite recourses of their 80% interest in the Cabo Delgado
Province of Mozambique, Grafex Lda (Grafex).
=========
C H I N A
=========
AGFEED USA: Gothner's Bid to Dismiss JLL Suit Partially Granted
--------------------------------------------------------------
Judge Brendan Linehan Shannon of the United States Bankruptcy
Court for the District of Delaware granted in part and denied in
part the motion filed by K. Ivan F. Gothner to dismiss the
complaint filed by JLL Consultants, Inc., as trustee for the
AgFeed Liquidating Trust.
JLL commenced an adversary proceeding on February 23, 2015,
alleging that Gothner's conduct during his time as a director,
Chair of the Audit Committee, Vice-Chairman and Chairman of the
Board of AgFeed Industries, Inc. constituted (i) a breach of
fiduciary duty; (ii) gross mismanagement; (iii) an abuse of
control; (iv) a waste of corporate assets; (v) an unjust
enrichment; (vi) a breach of contract; and (vii) fraudulent
transfers.
Gothner filed a motion to dismiss the complaint in its entirety
for failure to state a claim pursuant to Rule 12(b)(6) of the
Federal Rules of Procedure.
Judge Shannon granted the motion without prejudice as to Counts I
to VIII. The judge found that the complaint failed to state a
claim for breach of fiduciary duty, gross mismanagement, abuse of
control, waste of corporate assets, unjust enrichment, breach of
contract, and for an avoidable fraudulent transfer under 11 U.S.C.
Section 548(a)(1)(B).
As to Count IX, Judge Shannon concluded that this cause of action
failed to state a cause of action against Gothner for actual fraud
under 11 U.S.C. Section 548(a)(1)(A), although the facts alleged
are sufficient to support a claim for constructive fraud under
section 548(a)(1)(B).
Judge Shannon also concluded that with respect to Count X, the
facts alleged by the Trustee are sufficient to support a claim for
constructive fraud under section 544 and the applicable state law.
The motion was denied with respect to Counts XI and XII because
the ninth and tenth causes of action were not being dismissed in
their entirety.
The case is In re: AgFeed USA, LLC, et al, Chapter 11, Debtors.
JLL CONSULTANTS, INC., AS TRUSTEE OF THE AGFEED LIQUIDATING TRUST
Plaintiff, v. K. IVAN F. GOTHNER, Defendant, Case No. 13-11761
(BLS), Adv. No. 15-50210 (BLS) (Bankr. D. Del.).
A full-text copy of Judge Shannon's February 19, 2016 opinion is
available at http://is.gd/kuNtYtfrom Leagle.com.
JLL Consultants, Inc., Not Individually but Solely as Trustee of
the AgFeed Liquidating Trustd is represented by:
Eric Michael Sutty, Esq.
ELLIOTT GREENLEAF
1105 Market Street, Suite 1700
Wilmington, DE 19801
Tel: (302)384-9400
Fax: (302)384-9399
Email: ems@elliotgreenleaf.com
K. Ivan F. Gothner is represented by:
William Pierce Bowden, Esq.
Stacy L. Newman, Esq.
ASHBY & GEDDES
500 Delaware Avenue
Wilmington, DE 19899
Tel: (302)654-1888
Fax: (302)654-2067
Email: wbowden@ashby-geddes.com
snewman@ashby-geddes.com
About AgFeed Industries
AgFeed Industries, Inc., has 21 farms and five feed mills in China
producing more than 250,000 hogs annually. In the U.S., the
business included 10 sow farms in three states and two feed mills
producing more than one million hogs a year. AgFeed's revenue in
2012 was $244 million.
AgFeed and its affiliates filed voluntary petitions under Chapter
11 of the Bankruptcy Code (Bankr. D. Del. Case No. 13-11761) on
July 15, 2013, with a deal to sell most of its subsidiaries to The
Maschhoffs, LLC, for cash proceeds of $79 million, absent higher
and better offers. The Debtors estimated assets of at least $100
million and debts of at least $50 million.
Keith A. Maib signed the petition as chief restructuring officer.
Hon. Brendan Linehan Shannon presides over the case. Donald J.
Bowman, Jr., and Robert S. Brady, Esq., at Young, Conaway,
Stargatt & Taylor, serve as the Debtors' counsel. BDA Advisors
Inc. acts as the Debtors' financial advisor. The Debtors' claims
and noticing agent is BMC Group, Inc.
The U.S. Trustee has appointed a five-member official committee of
unsecured creditors to the Chapter 11 cases. The Creditors'
Committee tapped Lowenstein Sandler as lead bankruptcy counsel and
Greenberg Traurig, LLP, as co-counsel. CohnReznick LLP serves as
the Creditors' Committee's financial advisor.
An official committee of equity security holders was also
appointed to the Chapter 11 cases. The Equity Committee tapped
Sugar Felsenthal Grais & Hammer LLP and Elliott Greenleaf as
co-counsel.
Jefferies Leveraged Credit Products and Claims Recovery Group are
represented by Lawrence J. Kotler, Esq., and Catherine B.
Heitzenrater, Esq., at Duane Morris, LLP.
AgFeed USA, LLC, et al., notified the Bankruptcy Court that the
Effective Date of the Revised Second Amended Plan of Liquidation
occurred on Nov. 10, 2014.
As reported in the Troubled Company Reporter on Nov. 7, 2014, the
Court confirmed the revised second amended plan, which was
supported by the Official Committee of Equity Security Holders.
GENERAL STEEL: Angela He Quits as Director
------------------------------------------
Angela He has resigned as a member of the Board of Directors of
General Steel Holdings, Inc., effective Feb. 15, 2016, according
to a Form 8-K report filed with the Securities and Exchange
Commission. The resignation was not due to any disagreement on
any matter relating to the Company's operations, policies or
practices, the filing stated.
On Feb. 28, 2016, the remaining members of the Board appointed Ms.
Tong Yin, to serve as a member of the Board, effective
immediately, and to assume the position of Ms. He on the Audit,
Compensation and Governance and Nominating Committees of the
Board.
Ms. Yin has 20 years accounting, finance and management experience
in the manufacturing and mining sectors. Ms. Yin served as
corporate controller and subsequently VP Corporate Development of
RB Energy Inc. (formerly Canada Lithium Corp., a TSX listed
lithium producer) from 2011 to 2015. She served as corporate
controller of Torex Gold Resources Inc., a TSX listed gold
producer, from 2010 to 2011. Prior to that, Ms. Yin practiced
public accounting serving public and private audit clients in the
industrial, automotive and energy sectors. She was staff
accountant, senior auditor and audit manager with KPMG Toronto
office from 2001 to 2010. Ms. Yin also has experience in the
management and finance of Sino-foreign joint venture companies.
Ms. Yin is a Canadian Chartered Public Accountant (CPA, CA) and
holds a Master of Management and Professional Accounting degree
from the University of Toronto and a Bachelor of Science degree
from Qingdao University.
About General Steel Holdings
General Steel Holdings, Inc., headquartered in Beijing, China,
produces a variety of steel products including rebar, high-speed
wire and spiral-weld pipe. General Steel --
http://www.gshi-steel.com/-- has operations in China's Shaanxi
and Guangdong provinces, Inner Mongolia Autonomous Region and
Tianjin municipality with seven million metric tons of crude steel
production capacity under management.
General Steel reported a net loss of $78.3 million on $1.9 billion
of sales for the year ended Dec. 31, 2014, compared with a net
loss of $42.6 million on $2 billion of sales for the year ended
Dec. 31, 2013.
As of March 31, 2015, the Company had $2.5 billion in total
assets, $3.14 billion in total liabilities and a $637 million
total deficiency.
Friedman LLP, in New York, issued a "going concern" qualification
on the consolidated financial statements for the year ended
Dec. 31, 2014, citing that the Company has an accumulated deficit,
has incurred a gross loss from operations, and has a working
capital deficiency at Dec. 31, 2014. These conditions raise
substantial doubt about the Company's ability to continue as a
going concern.
LIFE MEDIA: F-tuan Losses Raise Going Concern Doubt, Says Groupon
-----------------------------------------------------------------
Groupon, Inc. concluded that there was substantial doubt about
Life Media Limited (F-tuan)'s ability to continue as a going
concern for the foreseeable future. F-tuan is a minority investee
with operations in China.
Groupon Chief Executive Officer Rich Williams in a regulatory
filing with the U.S. Securities and Exchange Commission on
February 11, 2016 noted that for the year ended December 31, 2013,
Groupon recorded an $85.5 million other-than-temporary impairment
of its investments in F-tuan.
Mr. Williams elaborated: "F-tuan had operated at a loss since its
inception and had used proceeds from equity offerings to fund
investments in marketing and other initiatives to grow its
business. Groupon participated in an equity funding round in 2013
and the aggregate cash proceeds raised by F-tuan in that round,
which were funded in two installments in September and October
2013 and included proceeds received from another investor, were
intended to fund its operations for approximately six months, at
which time additional financing would be required. In December
2013, Groupon was notified by F-tuan's largest shareholder, which
had served as a source of funding and operational support, that
they had made a strategic decision to cease providing support to
F-tuan. At its December 12, 2013 meeting, Groupon's Board of
Directors discussed its strategy with respect to the Chinese
market in light of this information.
"After that meeting, management pursued opportunities to divest
its minority investment in F-tuan either for cash or in exchange
for a minority equity investment in a larger competitor, but no
agreement was ultimately reached. At its February 11, 2014
meeting, the Board of Directors determined that Groupon should not
provide funding to F-tuan in future periods. At that time, F-tuan
required additional financing to continue its operations. Given
the uncertainty as to whether it would be able to obtain such
financing and Groupon's decision not to provide significant
funding itself, Groupon concluded that there was substantial doubt
as to F-tuan's ability to operate as a going concern for the
foreseeable future.
"Groupon's evaluation of other-than-temporary impairments involves
consideration of qualitative and quantitative factors regarding
the severity and duration of the unrealized loss, as well as
Groupon's intent and ability to hold the investment for a period
of time that is sufficient to allow for an anticipated recovery in
value. As a result of F-tuan's liquidity needs, the decision by
existing shareholders to cease providing support, Groupon's
inability to find a buyer for its minority investment, Groupon's
decision not to be a source of significant funding itself and the
expectation that any subsequent third party investment would
substantially dilute the existing shareholders, Groupon concluded
that its investment in F-tuan was other-than-temporarily impaired
and its best estimate of fair value was zero. Accordingly,
Groupon recognized an $85.5 million impairment charge in earnings
for the year ended December 31, 2013, bringing the fair value of
the investment to zero. Groupon's investments in F-tuan continue
to have an estimated fair value of zero as of December 31, 2015."
At December 31, 2015, Groupon had total assets of $1,796.3
million, total liabilities of $1,325.7 million and total equity of
$470.6 million.
For the year ended December 31, 2015, Groupon posted a net income
of $33.7 million as compared with a net loss of $63.9 million for
the same period in 2014.
A full-text copy of Groupon's annual report is available for free
at: http://tinyurl.com/j3wa38a
Chicago-based Groupon, Inc. is one of the global leaders in local
commerce, enabling people around the world to search and discover
great businesses and merchandise. Groupon operates online local
commerce marketplaces throughout the world that connect merchants
to consumers by offering goods and services, generally at a
discount.
In 2012, China-based group-buying site Life Media Limited (F-tuan)
merged with Gaopeng, an e-commerce joint venture between Groupon
and Tencent Holdings Ltd.
XINYUAN REAL: S&P Affirms 'B' CCR; Outlook Negative
---------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B' long-term
corporate credit rating on China-based property developer Xinyuan
Real Estate Co. Ltd. The outlook is negative. At the same time,
S&P also affirmed its 'cnB+' long-term Greater China regional
scale rating on Xinyuan. S&P also affirmed its 'B-' long-term
issue rating and 'cnB' long-term Greater China regional scale
rating on the company's senior unsecured notes.
"We affirmed the rating with a negative outlook to reflect our
view that Xinyuan's financial leverage will remain high over the
coming 12 months despite the company's moderate deleveraging in
2016-2017. Nevertheless, we anticipate that contracted sales will
improve in 2016 due to increased project launches," said Standard
& Poor's credit analyst Esther Liu.
S&P expects Xinyuan's debt-to-EBITDA ratio to remain high at 9x-
11x in 2016 and 7x-9x in 2017, mainly because the company's
capital expenditure will remain steep at Chinese renminbi (RMB) 9
billion-RMB10 billion (US$1.4 billion-US$1.5 billion) in 2016.
While S&P expects the company's land costs to moderate to about
RMB3 billion-RMB4 billion in 2016, Xinyuan's construction costs
will likely grow to RMB6 billion-RMB7 billion to reflect its
aggressive land acquisitions in 2014.
Xinyuan's EBITDA margin is likely to only moderately improve to
11%-13% in 2016 and 13%-17% in 2017, the 2014 level. The
company's profitability deteriorated throughout 2015 partly
because of its price cuts during the market downturn in late 2014
to early 2015. An additional reason was Xinyuan's high selling,
general, and administrative (SG&A) expenses related to its broader
geographic scale, including in the U.S. Xinyuan's SG&A as a
percentage of revenue remained 14.4% in 2015, compared with 15.8%
in 2014. Although S&P anticipates that the company can control
these expenses, the extensive expansion of projects into new
cities and continuing pressure on selling prices are likely to
lead to only modest improvements in expenses over the next two
years.
At the same time, S&P believes Xinyuan is likely grow. S&P
estimates that the company could achieve contracted sales of about
US$1.6 billion in 2016, supported by increasing resources from
aggressive land acquisitions in 2014. Contracted sales totaled
US$1.4 billion in 2015, up from US$1.0 billion in 2014.
S&P believes Xinyuan's expansion will be moderate in 2016, given
that its leverage has deteriorated following aggressive land
acquisitions in 2014. The company reined in its land acquisition
appetite in 2015.
S&P do not expect Xinyuan to substantially reduce its current debt
level, given the funds that the company needs to grow. Xinyuan's
total borrowings increased in 2015 to reach US$1.7 billion, from
US$1.5 billion in 2014. S&P has lowered the anchor to 'b-' from
'b' because the debt-to-EBITDA ratio is no longer at the lower end
of a highly leverage financial risk profile. Positively, S&P
believes Xinyuan will continue to benefit from its larger
operating scale and stronger liquidity than peers that S&P rates
'B-'.
The negative outlook reflects S&P's view that Xinyuan's financial
leverage will remain high in the coming 12 months despite moderate
deleveraging. S&P anticipates downside risk to its base case if
the company's land acquisitions are more aggressive than S&P
expects. However, the situation could improve if Xinyuan better
controls its borrowings and pace of expenditure for expansion.
S&P could lower the rating if Xinyuan fails to deleverage in 2016
and its debt-servicing ability worsens, as indicated by an EBITDA
interest coverage ratio of less than 1.0x. This could happen if:
(1) the company's debt-funded expansion from land acquisitions
continues to be more aggressive than S&P estimates; and (2) its
contracted sales are materially below S&P's base case for 2016.
S&P may also downgrade Xinyuan if the company's access to
financing weakens materially, such that its refinancing risk
increases.
S&P could revise the outlook to stable if Xinyuan's financial
management becomes more disciplined. This could be shown in the
company's tighter control over debt-funded growth and satisfactory
cash inflow from contracted sales. At the same time, Xinyuan's
debt-to-EBITDA ratio and profitability will need to materially
improve while the company executes its expansion plans.
=========
I N D I A
=========
ABEL COLD: Ind-Ra Suspends 'IND B' Long-Term Issuer Rating
----------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Abel Cold Stores'
(ACS; an entity of R S Ghumman Group) 'IND B' Long-Term Issuer
Rating to the suspended category. The Outlook was Stable. The
rating will now appear as 'IND B(suspended)' on the agency's
website. The agency has migrated ACS' INR90 million fund-based
working capital limit to 'IND B(suspended)' from 'IND B'.
The ratings have been migrated to the suspended category due to
lack of information. Ind-Ra will no longer provide ratings or
analytical coverage for ACS.
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 the six-
month period, the ratings could be reinstated and will be
communicated through a rating action commentary.
ACCORD PLUS: ICRA Reaffirms 'B' Rating on INR13cr Term Loan
-----------------------------------------------------------
ICRA has reaffirmed the long term rating of [ICRA]B to the
INR13.00 crore term loan and INR5.00 crore cash credit facility of
Accord Plus Ceramics Private Limited. ICRA has also reaffirmed the
short term rating of [ICRA]A4 to the INR2.30 crore non fund based
bank guarantees facility of APCPL.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based-Term Loan 13.00 [ICRA]B reaffirmed
Fund Based-Cash Credit 5.00 [ICRA]B reaffirmed
Non Fund Based Bank
Guarantees 2.30 [ICRA]A4 reaffirmed
The ratings remain constrained by Accord Plus Ceramics Private
Limited's (APCPL) high financial risk profile given its initial
stage of operations and high debt funded capex which in turn will
pressurise the debt coverage and capitalization indicators. In the
backdrop of high debt repayments, the ability of the company to
achieve desired levels of revenues and profitability will be
crucial for the timely servicing of debt obligations. The ratings
also continue to factor in the company's exposure to intense
competition in ceramic tile industry characterised from the
presence of established organized and unorganized tiles players.
While assigning the ratings, ICRA also takes note of the
dependence of operations and cash flows on the performance of the
real estate industry (which is the main consuming sector for the
company's products), the vulnerability to volatility in raw
material prices and availability of coal.
The ratings, however, favorably take note of the experience of the
key promoters in the ceramic industry through presence of Group
Company in porcelain floor tiles and the location advantage
enjoyed by APCPL, giving it easy access to raw material.
Accord Plus Ceramics Private Limited is a digitally printed
ceramic wall tiles manufacturer with its plant situated at Morbi,
Gujarat. The company was incorporated in October 2013 with
commencement of commercial operation in April 2015. Five directors
namely Mr. Kishorbhai Saradava, Mr. Bharatbhai Saidva, Mr.
Narbherm Patel, Mr. Khimjibhai Saidva and Mr. Jay Saidva manage
the operations of the company. Currently, the company has an
installed capacity to produce 2.50 lacs boxes of ceramic wall
tiles per month in four different sizes i.e. 12"X12", 12"X18",
12"X24" and 10"X30".
Recent Results
During FY16, till end of December 2015, APCPL reported an
operating income of INR16.21 crore and operating profit (OPBDITA)
of INR3.13 crore.
AMW MOTORS: CARE Assigns 'D' Rating to INR1,350cr LT Loan
---------------------------------------------------------
CARE assigns 'CARE D' ratings to the bank facilities of AMW Motors
Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities
(Term Loan) 1,350 CARE D Assigned
Long term Bank Facilities
(Term Loan) Proposed 150 CARE D Assigned
Long-term Fund-based
(Working Capital Limits) 100 CARE D Assigned
Short term Non fund-based
(Working Capital Limits)
Rating Rationale
The rating assigned to the bank facilities of AMW Motors Limited
(AML) takes into account ongoing delays in the servicing of its
debt obligations in FY15 (refers to the period April 1 to
March 31) as well as 9MFY16 (refers to the period April 1 to
December 31) due to severe deterioration in the liquidity and weak
capital structure. The liquidity profile of the company worsened
triggered by overall downturn in the Heavy Commercial Vehicle
(HCV) industry in last couple of years thereby impacting the off
take.
AMW Group ventured in HCV business in 2005 through Asia Motor
Works Ltd (AMW). AMW is subsidiary of Asia Motor Works Holdings
Ltd (AMWH). Mr. Aniruddha Bhuwalka is the Promoter, Managing
Director & Chief Executive Officer of AMW. Subsequently, AMW also
ventured into Auto Component industry by manufacturing steel wheel
rims for cars, tractors and trucks. AMW later demerged both
businesses into separate companies by transferring HCV division
into AMW Motors Ltd (AML) and auto component division into AMW
Auto Component Ltd (AACL). AML was incorporated on September 19,
2011 and is held as wholly owned of AMWH. AML has integrated
manufacturing facility for HCVs at Bhuj, Gujarat spread
approximately 155 acres area. It is located in close proximity to
two major ports, Kandla and Mundra. The capex to build this
capacity was initiated in FY09 and was completed by December 2010,
leading to increase in installed capacity of HCV assembling
facility from 15,000 vehicles per annum to 50,000 vehicles per
annum. The facilities include assembly line, frame shop, paint
shop, fully built vehicles facility, Axle Assembly, Vendor Park
and warehouse facilities.
AML specializes in the manufacturing of HCVs (Tippers, Trailers,
Haulage Trucks etc) majorly catering to construction and
mining industry, cement industry and steel Industry. AMLs vehicles
are exported to various countries like Nepal, Bhutan, Oman,
Bangladesh etc. However, currently exports forms small share of
total turnover. AML has the two subsidiaries viz: AMW Commercial
Vehicle Applications Ltd (ACVAL) and Tranztar Commercial Vehicle
Applications Ltd (TCVAL).
During FY15 (refers to the period April 01 to March 31), AML
posted a net loss of INR78.82 crore on the total operating
income of INR580.61crore as against a loss of INR102.84crore on
the total income of INR842.10crore during FY14.
AQUILA CERAMIC: CRISIL Reaffirms B Rating on INR48.5MM Term Loan
----------------------------------------------------------------
CRISIL's ratings on the bank facilities of Aquila Ceramic Private
Limited (ACPL) continue to reflect a modest scale of operations in
the highly competitive ceramics industry, and large working
capital requirement. These rating weaknesses are partially offset
by the extensive industry experience of the company's promoters
and proximity of its manufacturing facilities to raw material and
labour sources.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 11 CRISIL A4 (Reaffirmed)
Cash Credit 25 CRISIL B/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility 40.5 CRISIL B/Stable (Reaffirmed)
Term Loan 48.5 CRISIL B/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes ACPL 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 improvement in
revenue and profitability, leading to a substantial increase in
cash accrual and hence to a better financial risk profile.
Conversely, the outlook may be revised to 'Negative' if the
company's operating margin is lower than expected, or working
capital management deteriorates, significantly weakening its
financial risk profile.
Update
ACPL commenced operations from February 2014, and for 2014-15
(refers to financial year, April 1 to March 31), revenue was
INR111.2 million. Revenue for the eight months through November
2015 was INR63.3 million led by modest demand; revenue is expected
at INR100-105 million in 2015-16. Operating profitability margin
increased to 13.8 percent in 2014-15 from 11.1 percent because of
stabilisation of operations. The margin is expected at 17-18 per
cent over medium term. Operating cycle is expected to remain
stable at 200-205 days over this period, driven higher working
capital requirement, particularly inventory, to meet an increasing
scale of operations.
The financial risk profile remains constrained by a modest
networth, high gearing, average debt protection metrics, and
stretched liquidity. As on March 31, 2015, gearing was at 1.9
times on a networth of INR33 million, due to high dependence on
bank lines for working capital requirement and debt contracted for
setting up the company's unit. With gradual repayment of the term
loan, gearing is expected to improve to 1.2-1.5 times over the
medium term. Liquidity is constrained by barely sufficient cash
accrual to meet debt obligation, limiting financial flexibility
due to a leveraged capital structure, moderately working capital-
intensive operations, and low current ratio; however, liquidity
continues to be supported by promoter funding.
Incorporated in 2013, ACPL is promoted by Morbi, Gujarat-based Mr.
Rajeshbhai Kasundra, Mr. Sureshkumar N Kothiya, and others. The
company manufactures non-vitrified wall tiles. It started
commercial operations from February 2014. The key promoters, Mr.
Kasundra and Mr. Kothiya, have been in the ceramic tiles
manufacturing industry through other group companies for more than
a decade.
ATTIRE DESIGNERS: CRISIL Cuts Rating on INR190MM Loan to 'D'
------------------------------------------------------------
CRISIL has downgraded its ratings on the bank facilities of Attire
Designers Private Limited (part of the RBD group) to 'CRISIL
D/CRISIL D' from 'CRISIL B+/Stable/CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Foreign Bill Purchase 190 CRISIL D (Downgraded
from 'CRISIL A4')
Packing Credit 60 CRISIL D (Downgraded
from 'CRISIL B+/Stable')
The downgrade reflects default by the group in servicing its bank
debt. Currently, there are no operations in any of the group
entities.
For arriving at the rating, CRISIL has combined the business and
financial risk profiles of Attire Designers Pvt Ltd, Welldone Exim
Pvt Ltd, High Value Exim Pvt Ltd, RBD International, and Goodone
Traders Pvt Ltd. This is because all these entities, together
referred to as the RBD group, have the same board of directors and
senior management team with common procurement, marketing, and
finance functions.
The RBD group started trading in 1993. All the entities in the
group were trading in readymade garments (more than 80 percent of
revenue), hosiery, handicrafts, fabrics, leather goods, and
miscellaneous products. They have common customers and suppliers,
and also the same banker, Punjab National Bank, and auditors.
BHALLA CHEMICAL: ICRA Suspends B+/A4 Rating on INR10cr Bank Loan
----------------------------------------------------------------
ICRA has suspended its long-term rating of [ICRA]B+ and short term
rating of [ICRA]A4 assigned to the INR10 crore bank facilities of
Bhalla Chemical Works Pvt Ltd. The suspension follows ICRA's
inability to carry out a rating surveillance in the absence of the
requisite information from the company.
CBS TECHNOLOGIES: Ind-Ra Suspends IND B+ Long-Term Issuer Rating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated CBS Technologies
Pvt Ltd's 'IND B+' Long-Term Issuer Rating to the suspended
category. The Outlook was Stable. This rating will now appear as
'IND B+(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 of CBS Technologies Private
Limited.
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.
CBS Technologies Private Limited's ratings:
-- Long-Term Issuer Rating: migrated to 'IND B+ (suspended)'
from 'IND B+/Stable'
-- INR32.5 million fund-based limits: migrated to 'IND B+
(suspended)' from 'IND B+' and 'IND A4 (suspended)' from 'IND
A4'
-- INR4.6 million Term-loan limits: migrated to 'IND B+
(suspended)' from 'IND B+'
-- INR18 million Non-fund-based limits: migrated to 'IND A4
(suspended)' from 'IND A4'
CHANDAK BROTHERS: Ind-Ra Suspends IND B+ Long-Term Issuer Rating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Chandak
Brothers's (Chandak) 'IND B+' Long-Term Issuer Rating to the
suspended category. The Outlook was Stable. This rating will now
appear as 'IND B+(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 Chandak.
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 the six-
month period, the ratings could be reinstated and will be
communicated through a rating action commentary.
Chandak's ratings are as follows:
-- Long-Term Issuer Rating: migrated to 'IND B+(suspended)' from
'IND B+'/Stable
-- INR264.00 million fund-based limits: migrated to 'IND
B+(suspended)'/'IND A4 (suspended)' from 'IND B+'/ 'IND A4'
-- INR84.00 million non-fund-based limits: migrated to 'IND
A4(suspended)' from 'IND A4'
CHRISTY FABRIC: CRISIL Cuts Rating on INR17MM Term Loan to B+
-------------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facilities
of Christy Fabric Pvt Ltd (CTPL; part of the Christy Textile
group) to 'CRISIL B+/Stable/CRISIL A4' from 'CRISIL BB-
/Stable/CRISIL A4+'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 10 CRISIL B+/Stable (Downgraded
from 'CRISIL BB-/Stable')
Letter of Credit 16 CRISIL A4 (Downgraded from
'CRISIL A4+')
Proposed Long Term 7 CRISIL B+/Stable (Downgraded
Bank Loan Facility from 'CRISIL BB-/Stable')
Term Loan 17 CRISIL B+/Stable (Downgraded
from 'CRISIL BB-/Stable')
The rating downgrade reflects deterioration in Christy Textile
group's liquidity owing to delays in payment from customers. The
group's debtors stood at around 123 days as on March 31, 2015
against 84 days as on March 31, 2014. This has resulted in
extensive utilization of bank lines and stretch in payables. The
group's working capital limits were fully utilized over the 12
months through October 2015, with instances of overdrawals. CRISIL
expects the group's liquidity to remain constrained over the
medium term on account of large working capital requirements.
The rating reflects the group's small scale of operations in an
intensely competitive industry and susceptibility of operating
margins to volatility in raw material prices. The rating also
factors in the group's modest net worth. These rating weaknesses
are partially offset by the extensive experience of the group's
promoters in the textile industry.
For arriving at the rating, CRISIL has combined the business and
financial risk profiles of CTPL and its group entities, Christy
Fabric Pvt Ltd (CFPL) and Evergreen Fabric Process Pvt Ltd (EFPL).
This is because all the entities are in similar lines of business,
have common management, and share significant business synergies.
Outlook: Stable
CRISIL believes that the Christy Textile group will continue to
benefit over the medium term from the promoters' extensive
industry experience. The outlook may be revised to 'Positive' in
case of a sustainable increase in revenue and operating
profitability leading to better-than-expected net cash accrual
thereby an improved financial risk profile and liquidity.
Conversely, the outlook may be revised to 'Negative' if the
financial risk profile weakens, resulting from a considerable
decline in accrual, sizeable, debt-funded capital expenditure, or
a further stretch in the working capital cycle.
CTPL, set up in 2004, manufactures terry towels. CFPL, set up in
2013, manufactures bed linen, pillow covers, and duvets. EFPL, set
up in 2014, processes fabric and yarn. The group is based in
Tiruchengodu and its operations are managed by Mr. N
Mohanasundaram and Mr. T S Kumarasamy.
CHRISTY TEXTILE: CRISIL Cuts Rating on INR28.5MM LT Loan to B+
--------------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facilities
of Christy Textile Products Private Limited (CTPL; part of the
Christy Textile group) to 'CRISIL B+/Stable' from 'CRISIL BB-
/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 20 CRISIL B+/Stable (Downgraded
from 'CRISIL BB-/Stable')
Proposed Long Term 28.5 CRISIL B+/Stable (Downgraded
Bank Loan Facility from 'CRISIL BB-/Stable')
Term Loan 1.5 CRISIL B+/Stable (Downgraded
from 'CRISIL BB-/Stable')
The rating downgrade reflects deterioration in Christy Textile
group's liquidity owing to delays in payment from customers. The
group's debtors stood at around 123 days as on March 31, 2015
against 84 days as on March 31, 2014. This has resulted in
extensive utilization of bank lines and stretch in payables. The
group's working capital limits were fully utilized over the 12
months through October 2015, with instances of overdrawals. CRISIL
expects the group's liquidity to remain constrained over the
medium term on account of large working capital requirements.
The rating reflects the group's small scale of operations in an
intensely competitive industry and susceptibility of operating
margins to volatility in raw material prices. The rating also
factors in the group's modest net worth. These rating weaknesses
are partially offset by the extensive experience of the group's
promoters in the textile industry.
For arriving at the rating, CRISIL has combined the business and
financial risk profiles of CTPL and its group entities, Christy
Fabric Pvt Ltd (CFPL) and Evergreen Fabric Process Pvt Ltd (EFPL).
This is because all the entities are in similar lines of business,
have common management, and share significant business synergies.
Outlook: Stable
CRISIL believes that the Christy Textile group will continue to
benefit over the medium term from the promoters' extensive
industry experience. The outlook may be revised to 'Positive' in
case of a sustainable increase in revenue and operating
profitability leading to better-than-expected net cash accrual
thereby an improved financial risk profile and liquidity.
Conversely, the outlook may be revised to 'Negative' if the
financial risk profile weakens, resulting from a considerable
decline in accrual, sizeable, debt-funded capital expenditure, or
a further stretch in the working capital cycle.
CTPL, set up in 2004, manufactures terry towels. CFPL, set up in
2013, manufactures bed linen, pillow covers, and duvets. EFPL, set
up in 2014, processes fabric and yarn. The group is based in
Tiruchengodu and its operations are managed by Mr. N
Mohanasundaram and Mr. T S Kumarasamy.
CREATIVE HEALTH: Ind-Ra Suspends 'IND B' Long-Term Issuer Rating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Creative Health
Care Pvt Ltd's (CHCPL) 'IND B' Long-Term Issuer Rating to the
suspended category. The Outlook was Stable. This rating will now
appear as 'IND B(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 CHCPL.
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 the six-
month period, the ratings could be reinstated and will be
communicated through a rating action commentary
CHCPL's ratings are as follows,
-- Long-Term Issuer Rating: migrated to 'IND B(suspended)' from
'IND B'
-- INR120 million fund-based limits: migrated to 'IND
B(suspended)' from 'IND B'
-- INR24.7 million term loan: migrated to 'IND B(suspended)'
from 'IND B'
-- Proposed INR115.3 million fund-based limits: 'Provisional IND
B'; rating withdrawn as the company did not proceed with the
instrument as envisaged.
-- INR20 million non-fund-based limits: migrated to 'IND
A4(suspended)' from 'IND A4'
CRIMSON METAL: CARE Reaffirms 'B' Rating on INR10.70cr LT Loan
--------------------------------------------------------------
CARE reaffirms the ratings assigned to bank facilities of Crimson
Metal Engineering Company Limtied.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 10.70 CARE B Reaffirmed
Short term Bank Facilities 3.50 CARE A4 Reaffirmed
Rating Rationale
The ratings assigned to the bank facilities of Crimson Metal
Engineering Company Limited (CMECL) continue to factor in the
small scale of operations, declining trend in total operating
income, susceptibility of profitability to raw material prices and
the weak capital structure as well as coverage indicators. The
ratings, however, take note of the improved PBILDT margin aided by
higher proportion of job work for a group company and declining
commodity prices in FY15 (refers to the period April 1 to March
31).
The ratings factor in the long experience of the promoters and the
favorable demand for pipes & tubes.
Going forward, the company's ability to scale up its operations in
the job work segment, improve its profitability and effectively
manage its working capital requirements will be the key rating
sensitivities.
CMECL, formerly known as Sri Saarbati Steel Tubes Limited, was
incorporated as a public limited company in February 1985 by Mr
Vinay Kumar Goyal in Chennai. CMECL is engaged in manufacture of
Electrical Resistance Welded (ERW) pipes and tubes like Black & GI
pipes, GP coils, square & rectangular pipes, etc. Mr Vinay Kumar
Goyal is a graduate, having over two decades of experience in the
steel industry. He looks after the overall day-to-day affairs of
the company with assistance from a board of Directors who have
experience of more than a decade in the industry.
CMECL is a manufacturer of both Galvanized and Black Pipes from
1/2" to 10" sizes as per BIS standards with a pipe manufacturing
capacity of 55,000 metric tonnes per annum (MTPA), skelp
production capacity of 36,000 MTPA, rolling mill with capacity of
24,000 metric ton per annum (MTPA) and galvanising plant of 18,000
MTPA.
The company started incurring huge losses (resulting in erosion of
its net worth) since FY01 due to the heavy input & interest costs,
worldwide economic recession, the depression in the steel
industry, liberalization of government policy pursuant to the
GATT/WTO, etc. Consequently, the company was referred to BIFR in
September 2001. However, through restructuring of the capital base
of the company & infusion of fresh capital by the promoters & Mr
A. J. Menon (independent director of the company) the company came
out of the purview of BIFR in October 2011.
As per the audited results of FY15, CMECL has achieved PAT of
INR0.86 crore on total operating income of INR44.45 crore, as
compared with PAT of INR0.63 crore on total operating income of
INR62.34 crore in FY14. The company has achieved revenues of about
INR25.58 crores in 9MFY16 (provisional, refers to the period April
1 to December 31).
DARJEELING POWER: ICRA Reaffirms B+ Rating on INR22.75cr Loan
-------------------------------------------------------------
ICRA has reaffirmed the long term rating outstanding on the
INR22.75 crore Term Loans, INR0.78 crore Fund based (Cash Credit)
and INR1.47 crore proposed bank facilities of Darjeeling Power
Limited (DPL) at [ICRA]B+.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term Loan 22.75 [ICRA]B+ reaffirmed
Cash Credit 0.78 [ICRA]B+ reaffirmed
Unallocated 1.47 [ICRA]B+ reaffirmed
The rating continues to remain constrained by high gearing levels
of the project, limiting financial flexibility, significant delays
in execution of the project, primarily on account of change in
evacuation system design and delays in receipt of certain
approvals, restricting smooth execution. The rating also factors
in the exposure to hydrology risks given the unavailability of
long term flow series data at the project site, leading to lack of
discharge calculation data based on downstream site.
The rating however favourably factors in the proven track record
of the EPC contractor and the finalisation of PPA with Himachal
Pradesh State Electricity Commission which limits off take risks.
Darjeeling Power Limited (DPL) is a Special Purpose Vehicle (SPV)
incorporated to develop, own and operate a 3 MW small hydro power
(SHP) project known as Shaung Mini Hydropower Project (referred to
as Shaung Project). With the company utilizing equipment with 33%
overload capacity, the project capacity can effectively be taken
to 4 MW. The project is located in Kinnaur District of Himachal
Pradesh (HP). DPL was promoted by the Mumbai based Somani Group
which is engaged in education as well as hydro power having an
executed four projects in the past aggregating to 15.9 MW. The
company signed the Implementation Agreement (IA) with the
Government of Himachal Pradesh (GoHP) in June 2005 for carrying
out the project on "Build Own Operate & Transfer" (BOOT) basis for
a period of 40 years. The project is currently in advanced stages,
with the expected Commercial Operation Date (COD) to be in March
2016
EVER GREEN: CRISIL Cuts Rating on INR31.5MM Term Loan to B+
-----------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facilities
of Ever Green Fabric Process Private Limited (CTPL; part of the
Christy Textile group) to 'CRISIL B+/Stable' from 'CRISIL BB-
/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 15 CRISIL B+/Stable (Downgraded
from 'CRISIL BB-/Stable')
Proposed Long Term 3.5 CRISIL B+/Stable (Downgraded
Bank Loan Facility from 'CRISIL BB-/Stable')
Term Loan 31.5 CRISIL B+/Stable (Downgraded
from 'CRISIL BB-/Stable')
The rating downgrade reflects deterioration in Christy Textile
group's liquidity owing to delays in payment from customers. The
group's debtors stood at around 123 days as on March 31, 2015
against 84 days as on March 31, 2014. This has resulted in
extensive utilization of bank lines and stretch in payables. The
group's working capital limits were fully utilized over the 12
months through October 2015, with instances of overdrawals. CRISIL
expects the group's liquidity to remain constrained over the
medium term on account of large working capital requirements.
The rating reflects the group's small scale of operations in an
intensely competitive industry and susceptibility of operating
margins to volatility in raw material prices. The rating also
factors in the group's modest net worth. These rating weaknesses
are partially offset by the extensive experience of the group's
promoters in the textile industry.
For arriving at the rating, CRISIL has combined the business and
financial risk profiles of CTPL and its group entities, Christy
Fabric Pvt Ltd (CFPL) and Evergreen Fabric Process Pvt Ltd (EFPL).
This is because all the entities are in similar lines of business,
have common management, and share significant business synergies.
Outlook: Stable
CRISIL believes that the Christy Textile group will continue to
benefit over the medium term from the promoters' extensive
industry experience. The outlook may be revised to 'Positive' in
case of a sustainable increase in revenue and operating
profitability leading to better-than-expected net cash accrual
thereby an improved financial risk profile and liquidity.
Conversely, the outlook may be revised to 'Negative' if the
financial risk profile weakens, resulting from a considerable
decline in accrual, sizeable, debt-funded capital expenditure, or
a further stretch in the working capital cycle.
CTPL, set up in 2004, manufactures terry towels. CFPL, set up in
2013, manufactures bed linen, pillow covers, and duvets. EFPL, set
up in 2014, processes fabric and yarn. The group is based in
Tiruchengodu and its operations are managed by Mr. N
Mohanasundaram and Mr. T S Kumarasamy.
G.D. METSTEEL: ICRA Assigns B- Rating to INR15cr Cash Loan
----------------------------------------------------------
ICRA has assigned [ICRA]B- rating to the INR15.00 crore fund based
working capital facilities, INR5.00 crore term loan and INR3.00
crore long term unallocated facilities of G.D. Metsteel Private
Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term fund based
Limits-Cash Credit 15.00 [ICRA]B- assigned
Long term fund based
Limits- Term Loan 5.00 [ICRA]B- assigned
Long term unallocated 3.00 [ICRA]B- assigned
The assigned ratings take into consideration long standing
experience of promoters in the steel industry along with the
improvement in revenues over the years backed by increase in
production volumes. The ratings assigned are however constrained
on account of its weak financial profile characterized by
aggressive capital structure and weak coverage indicators though
the same are supported by unsecured loans from promoters to an
extent. Despite the increase in revenues over the years, the
overall scale of operations remains at a modest level with low
capacity utilization leading to low profitability. ICRA also notes
the vulnerability of margins to fluctuations in the raw material
prices as well as inherent demand cyclicality risk for the steel
industry. Going forward, the company's ability to maintain healthy
capacity utilization along with managing the impact of raw
material price changes on its profitability remains the key rating
sensitivities.
Incorporated in 1984, G.D. Metsteel Private Limited (GDM) is
engaged in the manufacturing of rolled steel products like angles,
channels, flat and beams which find end usage in various auto,
electrical manufacturing and construction companies. The company
has an installed capacity of 72,000 TPA for the manufacturing of
rolled products. The promoters of the company have two decades of
experience in the steel industry.
G. R. WEAVERS: ICRA Assigns B+ Rating to INR13cr Long Term Loan
---------------------------------------------------------------
ICRA has assigned its long-term rating of [ICRA]B+ and short term
rating of [ICRA]A4 to the INR23.75 crore, fund based and non fund
based bank facilities of G. R. Weavers Private Limited (GRW).
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Fund-
based bank
facilities 5.75 [ICRA]B+; Assigned
Long Term loans 13.00 [ICRA]B+; Assigned
Short Term Non-Fund
based bank facilities 5.00 [ICRA]A4; Assigned
ICRA's ratings are constrained on account of GRW's modest scale of
operations; high competitive intensity in the industry with low
entry barriers and limited product differentiation. Further, the
rating is also constrained on account of its high supplier
concentration risk as well as low bargaining power with them; high
customer concentration risk with most of its sales to few large
cement manufacturers and vulnerability of profitability to
fluctuations in polymer prices. Further, the rating also takes
note of its high debt level utilized to fund its capex and the
working capital requirements which results in high gearing for the
company. This apart, the rating also takes note of its recent
commencement of operations which coupled with its scheduled
repayments from January 2016 may further stretch its liquidity.
The ratings, however favorably factors in its significant ramp up
of operations in the initial phases of operations and experience
of its promoters in related businesses.
Going forward, the company's ability to achieve adequate capacity
utilization and generate adequate accruals to meet the debt
servicing requirements, will be the key rating sensitivities.
Meanwhile, timely infusion of funds by promoters to meet any cash
shortfalls will be critical to ensure debt servicing as per the
stipulated terms.
Incorporated in March 2013, GRW is into manufacturing of
Polypropylene (PP) and High Density Ploy Ethylene (HDPE) woven
bags. Its manufacturing facility is located in Morena district of
Madhya Pradesh and has an installed capacity of 4,400 MT per
annum. The company started its operations in April 2015 and
primarily supplies the bags to cement manufacturers.
Recent Results
GRW has reported an operating income of INR11.84 Crore in the H-1
of FY16 on a provisional basis.
GOODONE TRADERS: CRISIL Lowers Rating on INR190MM Loan to 'D'
-------------------------------------------------------------
CRISIL has downgraded its ratings on the bank facilities of
Goodone Traders Private Limited (part of the RBD group) to 'CRISIL
D/ CRISIL D' from 'CRISIL B+/Stable/CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Foreign Bill Purchase 190 CRISIL D (Downgraded
from 'CRISIL A4')
Packing Credit 60 CRISIL D (Downgraded
from 'CRISIL B+/Stable')
The downgrade reflects default by the group in servicing its bank
debt. Currently, there are no operations in any of the group
entities.
For arriving at the rating, CRISIL has combined the business and
financial risk profiles of Goodone Traders Pvt Ltd, Welldone Exim
Pvt Ltd, High Value Exim Pvt Ltd, Attire Designers Pvt Ltd, and
RBD International. This is because all these entities, together
referred to as the RBD group, have the same board of directors and
senior management team with common procurement, marketing, and
finance functions.
The RBD group started trading in 1993. All the entities in the
group were trading in readymade garments (more than 80 percent of
revenue), hosiery, handicrafts, fabrics, leather goods, and
miscellaneous products. They have common customers and suppliers,
and also the same banker, Punjab National Bank, and auditors.
GOYAL KNITWEARS: CARE Assigns B+ Rating to INR12cr LT Loan
----------------------------------------------------------
CARE assigns 'CARE B+' and 'CARE A4' ratings to the bank
facilities of Goyal Knitwears Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 12.00 CARE B+ Assigned
Short term Bank Facilities 20.53 CARE A4 Assigned
Rating Rationale
The ratings assigned to the bank facilities of Goyal Knitwears
Private Limited (GKPL) are constrained by the weak financial
risk profile marked by low profitability margins, weak overall
solvency position and working capital intensive nature of
operations. The ratings are further constrained by the presence of
the company in a highly competitive industry along with
susceptibility of profitability margins to volatility in the
prices of the key raw material and adverse foreign exchange
movements. The ratings, however, derive strength from the healthy
scale-up of operations, established track record of operations,
diversified product profile, established distribution channels &
brand name and favorable location of operations.
Going forward, the ability of the company to profitably scale-up
its operations while improving its solvency position and managing
the working capital requirements efficiently will be the key
rating sensitivities.
Goyal Knitwears Private Limited (GKPL) was incorporated in year
1999 as a public limited company (closely held) by Mr Kamal
Prakash Goyal and his brothers. The company was later
reconstituted as a private limited company in 2005. GKPL is
primarily engaged in the manufacturing and export of hosiery
garments and knitwear for children, men and women at its
manufacturing unit located in Ludhiana, Punjab with an installed
capacity of 33 lakhs pieces, as on March 31, 2015.
Furthermore, the company is also engaged in the trading of yarn
and knitted cloth which constituted about 2.30% and around 28.71%,
of the total operating income in FY15 (refers to the period April
1 to March 31), respectively. GKPL has a diversified product mix
catering to all the segments viz. children (0-14 years of age) to
adults .The product range comprises of complete range of children
wear (upper and lower body), sweaters, T Shirts, lowers, gloves,
caps, for men and women. The company manufactures and sells
kidswear and women apparels domestically under its own brand
'Yellow Apple' and 'Riverside' to wholesalers and retailers who
are serviced by a network of dealers and distributors and the
company's own sales team.
GKPL registered a total operating income of INR167.99 crore during
FY15with PAT of INR0.79 crore as against a total operating income
of INR133.95 crore with PAT of INR0.60 crore in FY14. In 8MFY16
(Provisional), the company has achieved total operating income of
INR100 crore.
H. S. WEAVERS: ICRA Assigns 'B' Rating to INR4.05cr Term Loan
-------------------------------------------------------------
ICRA has assigned the long-term rating of [ICRA]B and the short-
term rating of [ICRA]A4 to the INR8.50 crore bank facilities of H.
S. Weavers Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based-Term
Loan 4.05 [ICRA]B ; Assigned
Fund Based-Cash
Credit 4.00 [ICRA]B ; Assigned
Non-fund Based FLC 0.90 [ICRA]A4 ; Assigned
Unallocated Limited 0.45 [ICRA]B/[ICRA]A4 ; Assigned
The assigned rating takes into account H. S. Weavers Private
Limited's (HSWPL) initial stage of manufacturing operation,
coupled with a highly competitive domestic market in which the
ability of the company to operate with desired operational
parameters remains critical. The rating also takes into
consideration the debt-funded capital expenditure, which will lead
to stretched credit metrics for the next few years. ICRA also
takes note of the fluctuating raw material prices, which shall in
turn affect the profitability of the company to some extent.
The rating, however, draws comfort from the long track record of
the promoters and their group concerns within textile industry and
government support through various subsidies during initial years
of operations. ICRA also takes note of the locational advantage of
the company due to its presence in the outskirts of Surat, which
is a textile hub of Gujarat.
H. S. Weavers Pvt Ltd was incorporated in July 2014, with the
objective of manufacturing grey fabrics. Mr. Shreshth Patodia, Mr.
Sagar Patodia, Mr. Vaibhav Kanodia & Mr. Hariprakash Kanodia are
the key directors and promoters of the company and holding 25%
shareholding each. The company has undertaken a land area of
~4425.80 Sq mtrs in Tantithya village, Palsana taluka of Surat
district for a long term lease of 30 years to develop a factory
unit for manufacturing of grey fabrics.
HIGH VALUE: CRISIL Lowers Rating on INR370MM Loan to 'D'
--------------------------------------------------------
CRISIL has downgraded its rating on the bank facilities of
High Value Exim Private Limited (part of the RBD group) to 'CRISIL
D/ CRISIL D' from 'CRISIL B+/Stable/CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Foreign Bill Purchase 370 CRISIL D (Downgraded from
'CRISIL A4')
Packing Credit 80 CRISIL D (Downgraded from
'CRISIL B+/Stable')
The downgrade reflects default by the group in servicing its bank
debt. Currently, there are no operations in any of the group
entities.
For arriving at the rating, CRISIL has combined the business and
financial risk profiles of High Value Exim Pvt Ltd, Welldone Exim
Pvt Ltd, Attire Designers Pvt Ltd, RBD International, and Goodone
Traders Pvt Ltd. This is because all these entities, together
referred to as the RBD group, have the same board of directors and
senior management team with common procurement, marketing, and
finance functions.
The RBD group started trading in 1993. All the entities in the
group were trading in readymade garments (more than 80 percent of
revenue), hosiery, handicrafts, fabrics, leather goods, and
miscellaneous products. They have common customers and suppliers,
and also the same banker, Punjab National Bank, and auditors.
JSW STEEL: Moody's Cuts Corporate Family Rating to 'Ba3'
--------------------------------------------------------
Moody's Investors Service has downgraded JSW Steel Limited's (JSW)
corporate family rating (CFR) and senior unsecured notes ratings
to Ba3 from Ba1.
The outlook on all ratings remains negative.
RATINGS RATIONALE
"The two-notch downgrade reflects JSW's weaker than expected
operating performance as a result of persistently weak steel
prices, and our expectation that this low steel price environment
will continue over the next 12 to 18 months", says Kaustubh
Chaubal, a Moody's Vice President and Senior Analyst.
JSW's results for the nine months of the fiscal year ending March
2016 (April-December 2015) were extremely weak, with reported
consolidated net sales of INR307.5 billion, down 23% from a year
ago, and consolidated operating EBITDA of INR42.5 billion, down
45%.
Moody's remains concerned about the persistence of downward
pressure on steel prices with the continuation of imports into
India from China, Korea and Japan. Such imports -- on a volume
basis -- were up 30% for April-December 2015 from the same period
last year, despite the implementation of protectionist measures
against imports.
As a result, Indian hot rolled coil (HRC) prices fell 24% during
the third quarter of the fiscal year ending March 2016 (Q3
FY2016), prompting JSW's blended realizations to fall 24% to
INR28,263/tonne from INR37,327/tonne a year ago. EBITDA/tonne fell
more sharply by 51% in the said quarter to INR3,443 from INR6,987
a year ago.
While JSW has undertaken several measures to reduce costs,
conserve cash flow, and minimize the rise in debt, the severe drop
in steel prices has strained earnings and increased leverage.
"In particular, today's downgrade reflects the higher-than-
expected deterioration in JSW's interest cover metrics and
increasing leverage, as evidenced by EBIT/interest coverage of
less than 1x and debt/EBITDA of 6.8x for the 12 months ended
December 2015," adds Chaubal, who is also Moody's Lead Analyst for
JSW.
Looking ahead, we expect an increase in the company's shipments
with commencement of the incremental 4 mtpa brownfield expansions
and the continued growth of retail sales through the expansion of
its "Shoppe" outlets -- both benefiting from relatively strong
domestic demand. As a result, we estimate leverage to improve in
FY2017, although it will still be weakly positioned for the
rating.
Moody's does not expect EBITDA per tonne to return to levels seen
in prior years.
Rather, Moody's notes that the roll-over of safeguard duties
beyond March 2016 and the maintenance of at least current prices
are necessary if domestic steel companies are to record any
improvement in their EBITDA per tonne.
JSW's ratings continue to reflect the company's large scale and
competitive conversion costs, supported by its wide range of
furnace technology and the coastal locations of its operations.
The ratings draw support from management's successful track record
of managing growth and the effects of cyclical downturns.
JSW's balance sheet liquidity position remains weak with cash and
cash equivalents of INR11.61 billion at December 2015 against a
higher amount of short term debt and maturities over the next 12
months. While the company has access to undrawn short-term lines
of some INR60 billion, these facilities are renewable and
reevaluated each year, based on the company's estimated working
capital requirements.
Furthermore, JSW's weak operating performance required it to
obtain waivers on bank credit facilities in respect of its
leverage covenants for the September 2015 testing date. The
company has been proactive in managing this risk and has also
received relaxations for future periods from some of its major
lenders, and is in the process of obtaining similar relaxations on
the balance for the next covenant testing date in March 2016.
The negative outlook reflects the potential for industry
conditions to weaken further and the company proving unable to
improve its operating and financial performance over the next 12
to 18 months.
In particular, the negative outlook incorporates our assessment
that while the company may well take measures to conserve cash,
the increase in EBITDA following commencement of the brownfield
expansions may not, in isolation, be sufficient to materially
reduce leverage from current levels.
Further downward pressure on the ratings is possible if: (1) JSW's
profitability weakens from current levels, with EBIT margins
falling below 5% - 7% on a sustained basis; (2) its generation of
operating cash flow deteriorates because of weak sales and
unfavorable market dynamics, thereby dampening liquidity; and as a
result, (3) its financial metrics further deteriorate from current
levels; or (4) the company fails to receive approvals under its
relevant facilities for a relaxation on its financial covenants.
The ratings could also come under pressure if JSW adopts an overly
acquisitive or capex policy.
Specific financial metrics that Moody's would consider for a
downgrade include adjusted debt/EBITDA remaining above 5x, or
EBIT/interest coverage remaining below 2x, through the cycle.
Following its maiden bond issuance of $500 million in 2014, the
secured debt/total assets ratio on JSW's standalone balance sheet
improved to 19% at 31 March 2015, down from 27% in March 2014.
However, we note that the bond rating could be notched down if the
proportion of secured debt to total assets trends up from current
levels.
Given today's multi-notch ratings downgrade and the negative
outlook, and the company's weak credit metrics, a ratings upgrade
is not expected over the medium term.
That said, the outlook could revert to stable if: (1) domestic
steel prices recover, and/or on the back of an increase in steel
volumes, the company shows a substantial improvement in
profitability with EBITDA/tonne in the INR6,000 area; or if (2)
the company is successful in preserving cash flow during the
current downturn by reducing capex, with free cash flows returning
to positive territory.
Adjusted leverage returning to below 4.0x would also be a key
indicator for a change in the outlook.
JSW Steel Ltd. is a leading manufacturer of a wide range of steel
products. It has an installed steel-making capacity of 14.3
million tonnes per annum (mtpa), and is one of India's largest
steel producers. In FY2015, the company's revenue increased by 3%
year-on-year to INR529.7 billion from INR512.2 billion a year ago.
Crude steel volumes increased 4% year-on-year to 12.6 mtpa,
equivalent to capacity utilization of 88%.
K.S.M. BASHIR: Ind-Ra Suspends 'IND BB-' Long-Term Issuer Rating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated K.S.M. Bashir
Mohammad & Sons's (KSM) 'IND BB-' Long-Term Issuer Rating to the
suspended category. The Outlook was Stable. This rating will now
appear as 'IND BB-(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 KSM.
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 the six-
month period, the ratings could be reinstated and will be
communicated through a rating action commentary.
KSM's ratings are as follows:
-- Long-Term Issuer Rating: migrated to 'IND BB-(suspended)'
from 'IND BB-'/Stable
-- INR11.00 million term loans: migrated to 'IND BB-(suspended)'
from 'IND BB-'
-- INR77.00 million fund-based limits: migrated to 'IND BB-
(suspended)'/'IND A4+(suspended)' from 'IND BB-'/ 'INDA4+'
KST INFRASTRUCTURE: Ind-Ra Suspends 'IND BB-' LT Issuer Rating
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated KST
Infrastructure Limited's (KST) 'IND BB-' Long-Term Issuer Rating
to the suspended category. The Outlook was Stable. This rating
will now appear as 'IND BB-(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 KST.
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 the six-
month period, the ratings could be reinstated and will be
communicated through a rating action commentary.
KST's ratings:
-- Long-Term Issuer Rating: migrated to 'IND BB-(suspended)'
from 'IND BB-'/Stable
-- INR28.00 million term loans: migrated to 'IND BB-(suspended)'
from 'IND BB-'
-- INR422.00 million proposed term loans: migrated to
'Provisional IND BB-(suspended)' from 'Provisional IND BB-'
-- INR100.00 million fund-based limits: migrated to 'IND BB-
(suspended)'/'IND A4+(suspended)' from 'IND BB'/'IND A4+'
-- INR50.00 million non-fund-based bank guarantee: migrated to
'IND A4+(suspended)' from 'IND A4+'
LIDCO PROJECTS: CARE Assigns B+ Rating to INR7.50cr LT Loan
-----------------------------------------------------------
CARE assigns 'CARE B+' rating to the bank facilities of Lidco
Projects (India) Pvt. Ltd.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 7.50 CARE B+ Assigned
Rating Rationale
The rating assigned to the bank facilities of Lidco Projects
(India) Private Limited (LPPL) is constrained by LPPL's limited
track record of project execution, dependence on performance of
its group company Vajram Estates Private Limited (VEPL), thin
profit margins, leveraged capital structure, working capital
intensive nature of business with high inventory holding, and
inherent cyclicality associated with the real estate sector.
The rating, however, derives strength from revenue visibility over
the medium term and comfortable interest coverage indicators.
The ability of the company to diversify revenue base and
deleveraging capital structure forms the key rating sensitivities.
LPPL was incorporated in the year 2009 as Vajram Resorts (India)
Pvt. Ltd. and was not engaged in any commercial activity
till FY12 (refers to the period April 1 to March 31). Later, in
2012, the name was changed. LPPL is part of the Vajram Group
and undertakes construction activities for residential projects of
the group company, viz, VEPL in Bangalore, Karnataka.
During FY15 (refers to the period April 1 to March 31), the
company reported PAT of INR0.56 crore (provisional) on the
total operating income of INR26.81 crore (provisional) as against
PAT of INR0.30 crore on the total operating income of INR13.73
crore in FY14.
LUCKNOW MEDICAL: ICRA Reaffirms 'B' Rating on INR6.50cr Loan
------------------------------------------------------------
ICRA has reaffirmed the long-term rating of [ICRA]B for INR6.5
Crore bank facilities of Lucknow Medical Agencies.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 6.50 [ICRA]B reaffirmed
The rating reaffirmation continues takes into account the long
track record of operations of the firm, spanning more than a
decade as a pharmaceutical drugs distributor in Delhi region,
growing top line supported by a diversified product portfolio; and
the firm's long-term association with a large customer and
supplier base. The rating is however constrained by the intense
competition in the pharmaceuticals distribution space given the
large number of players owing to low entry barriers which exerts
pressure on margins. Further,the rating takes into account the
risks associated with partnership nature of business as evident in
regular withdrawals by the partners. This has resulted in low
networth and thus weak capital structure with gearing position
standing at 4.0 times as on March 31, 2015 and modest debt
coverage indicators. LMA's average working capital utilization has
remained moderately high at 86% in the period from Apr 14 to Mar
15 as compared to 82% during FY14. The working capital limits had
been enhanced in Sept-13 from INR4.8 cr. to INR6.5 cr. The limits
have remained utilized throughout the 12 months owing to trading
nature of business. Going forward, LMA's ability to maintain the
revenue growth as well as profitability margins, manage its
working capital intensity and improve its capital structure would
remain key rating sensitivities.
Established in 1999 as a partnership firm, LMA has been engaged in
the wholesale distribution of pharmaceutical drugs in the domestic
market for more than a decade. The firm is managed by Mr. Vinod
Kumar and Mr. Rajiv Kumar, with operations concentrated in the
Delhi region. LMA is a wholesale distributor catering mainly to
the retail chemist stores/organized retail pharmacy chains. The
pharmaceutical drugs are stocked in a rented government facility
at Lajpat Nagar (Delhi).
Recent Results
For FY2015, the company has achieved an operating income of
INR54.4 crore and a Profit After Tax of INR0.5 crore as compared
to an operating income of INR50.1 crore and a Profit After Tax of
INR0.5 crore.
MAHAVEER FIBRES: CARE Reaffirms B+ Rating on INR11.95cr LT Loan
---------------------------------------------------------------
CARE reaffirms the rating assigned to the bank facilities of
Mahaveer Fibres Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term bank facilities 11.95 CARE B+ Reaffirmed
Rating Rationale
The rating assigned to the bank facilities of Mahaveer Fibres
Private Limited (MFPL) is constrained by low profitability
margins inherent to the cotton ginning business, seasonal
availability of raw material (raw cotton) and associated
volatility in raw material prices, working capital intensive
nature of operations and presence in a highly fragmented
cotton ginning industry. The rating further takes a note of de-
growth in total operating income during FY15 (refers to the
period April 1 to March 31).
The rating, however, continues to derive strength from experience
of the promoters in the cotton industry, strategic location of the
manufacturing unit with proximity to the source of cotton. The
rating further takes a note of improvement in profitability margin
during FY15.
Going forward, the ability of MFPL to improve its scale of
operations, improvement in the profitability margin along-with
effective management of working capital is the key rating
sensitivities.
MFPL was established in October 2011 as a Private Limited Company
and is managed by Mr. Arvind Shantilal Jain and Mr. Ajay Shantilal
Jain. MFPL was primarily engaged in trading of cotton bales and
cotton seed. Further since April 2015, MFPL is engaged in the
processing of raw cotton and pressing the same into cotton bales,
trading in cotton, cotton seeds and cotton seeds oil extraction.
The manufacturing unit is located in Jalgaon region of Maharashtra
with an installed capacity of processing 2,16,000 cotton bales per
annum and 24,000 (MTPA) of cottonseed oil.
During FY15 (Audited), MFPL reported total operating income of
INR12.52 crore, PBILDT of INR0.48 crore and PAT of INR0.07 crore
as against total operating income of INR19.80 crore, PBILDT of
INR0.34 crore and PAT of INR0.07 crore in FY14 (Audited).
MARUTI HOLOSTIC: ICRA Reaffirms 'B' Rating on INR5.22cr LT Loan
---------------------------------------------------------------
ICRA has reaffirmed the long-term rating of [ICRA]B to the INR5.22
crore fund based bank limits and the short-term rating of [ICRA]A4
to the INR0.35 crore non-fund based bank limit of Maruti Holostic
Private Limited. ICRA has also reaffirmed the ratings of [ICRA]B
and/or [ICRA]A4 to the INR6.15 crore (enhanced from INR4.82 crore)
unallocated limits of the company.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Fund
Based Limits 5.22 [ICRA]B Reaffirmed
Short-term Non-
Fund Based Limit 0.35 [ICRA]A4 Reaffirmed
Unallocated Limit 6.15 [ICRA]B and [ICRA]A4
Reaffirmed
The re-affirmation of ratings takes into account MHPL's stretched
liquidity position owing to high working capital intensity of
operations as evident from the high utilization of bank limits,
and the risks associated with the company's operations of the
holography business given its nascent stage of operations. The
ratings also factor in the highly competitive business environment
the company operates in. ICRA also notes the vulnerability of
profitability margins to adverse fluctuations in raw material
costs, the prices of which are linked to crude oil.
However, the ratings take comfort from the long standing
experience of the management in the textile business through its
group companies, its technically qualified team and the easy
access to raw material suppliers and customers by virtue of its
location in Surat. The improvement in capital structure of the
company followed by repayment of buyers credit limit was also
favourably taken into account while reaffirming the ratings.
Incorporated in the year 1993, Guajrat Hiflow Yarn Limited was
engaged in the business of manufacturing holographic items,
sequins foil, hot stamping foil and metalized films. The company
changed its name to Maruti Holostic Private Limited (MHPL) in
April 2015. MHPL is based out of Gujarat with its manufacturing
facility located in Karanj Village of Surat District, having a
total installed capacity of 2300 TPA (Tonnes per annum).
Recent results
MHPL recorded a profit after tax (PAT) of INR0.19 crore on an
operating income of INR24.81 crore for the year ending March 31,
2015.
MARYA FROZEN: Ind-Ra Suspends 'IND BB' Long-Term Issuer Rating
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Marya Frozen Agro
Foods Private Limited's 'IND BB' Long-Term Issuer Rating to the
suspended category. The Outlook was Stable. This rating will now
appear as 'IND BB(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 of Marya Frozen Agro Foods.
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.
Marya Frozen Agro Foods' ratings:
-- Long-Term Issuer Rating: migrated to 'IND BB(suspended)' from
'IND BB'
-- INR80 million term loans: migrated to 'IND BB(suspended)'
from 'IND BB'
-- INR200 million fund-based limits: migrated to 'IND
BB(suspended)' from 'IND BB' and 'IND A4+(suspended)' from
'IND A4+'
MASS-TECH CONTROLS: CRISIL Reaffirms B Rating on INR40MM Loan
-------------------------------------------------------------
CRISIL's rating on the bank facilities of Mass-Tech Controls
Private Limited (MTCPL) continue to reflect MTCPL's modest scale
of operation and working capital-intensive nature of operations.
These rating weaknesses are partially offset by the extensive
experience of the company's promoters in the electrical tools
manufacturing industry.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 60 CRISIL A4 (Reaffirmed)
Cash Credit 40 CRISIL B/Stable (Reaffirmed)
Letter of Credit 12.5 CRISIL A4 (Reaffirmed)
Term Loan 2 CRISIL B/Stable (Reaffirmed)
CRISIL had downgraded its rating on the long term bank facilities
of MTCPL to CRISIL B/Stable from CRISIL B+/stable while
reaffirming the short term bank facilities at CRISIL A4 dated 18th
February 2016.
Outlook: Stable
CRISIL believes MTCPL 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 a significant
increase in scale of operations and profitability, leading to
more-than-expected cash accrual, or efficient working capital
management, thereby improving liquidity. Conversely, the outlook
may be revised to 'Negative' in case of any significant debt-
funded capital expenditure, decline in revenue and operating
profitability, or a stretched working capital cycle, resulting in
weakening of the company's financial risk profile.
Mass-Tech Controls Private Limited (MTCPL) was set up as
partnership in the year 1993 by Mr. Subash Patil. The company is
into assembling and designing of D.C Power systems, Battery
chargers, Convertors and Low voltage switch gear and Control
panels used in industrial set up. The company's manufacturing unit
is based out of Jalgaon, Maharashtra.
MEENA BAZAAR: Ind-Ra Withdraws 'IND B+' Long-Term Issuer Rating
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has withdrawn Meena Bazar's
Long-Term Issuer Rating of 'IND B+(suspended)'. The agency has
also withdrawn Meena Bazaar's INR50 million fund-based working
capital limits' 'IND B+(suspended)/'IND A4(suspended) ' ratings.
The ratings have been withdrawn due to lack of adequate
information. Ind-Ra will no longer provide ratings or analytical
coverage for Meena Bazaar.
Ind-Ra suspended Meena Bazaar's ratings on 24 March 2015.
NANDHI DALL: ICRA Suspends 'D' Rating on INR88.72cr Bank Loan
-------------------------------------------------------------
ICRA has suspended the long-term/short-term rating of [ICRA]D
assigned to the INR88.72 crore bank facilities of Nandhi Dall
Mills. The suspension follows ICRA's inability to carry out a
rating surveillance in the absence of the requisite information
from the firm.
NUWAY ORGANIC: ICRA Suspends 'C' Rating on INR28.37cr Loan
----------------------------------------------------------
ICRA has suspended its long-term rating of [ICRA]C assigned to the
INR28.37 crore bank facilities of Nuway Organic Naturals India
Ltd. The suspension follows ICRA's inability to carry out a rating
surveillance in the absence of the requisite information from the
company.
OMICRON POWER: CARE Lowers Rating on INR30.09cr Loan to 'C'
-----------------------------------------------------------
CARE revises the rating assigned to the long term bank facilities
of Omicron Power Engineers Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 30.09 CARE C Revised from
CARE B+
Rating Rationale
The revision in rating assigned to the long term bank facilities
of Omicron Power Engineers Private Limited (OPEL) is driven
by the stretched liquidity position of the company and weak
financial performance during FY15. The rating continues to
remain constrained by the raw material price fluctuation risk,
weak solvency position and intense competition due to exposure to
tender driven nature of business along with working capital
intensive nature of business operations.
The rating draws strength from extensive experience of the
promoters in execution of transmission lines and substation
projects, with established presence in Engineering, Procurement
and Construction (EPC) services along with diversified customer
base and medium-term revenue visibility on the back of comfortable
order book position.
The ability of the firm to improve its ability to execute orders
in a timely manner and efficient management of the working capital
and improve profitability margins are the key rating
sensitivities.
OPEL, ISO 9001 certified company, is based out of Aurangabad,
Maharashtra and was initially established as a partnership
firm in 1990 by Mr. Ramniranjan Agarwal. The entity was
reconstituted into a private limited company in 2010 with Mr.
Ramniranjan Agarwal designated as Managing Director and Mr. Manish
Agarwal as Executive Director. OPEL is a turnkey power
infrastructure development company engaged in execution of power
infrastructure works like erection and commissioning of
substations, transmission line setup for government, semi-
government and private organizations. The company initially
executed contracts for Maharashtra State Electricity Board and
later they also started executing substation erection and
commission work on turnkey basis for other state electricity
boards.
OPEL registered a total operating income of INR26.98 crore during
FY15 and a Profit After Tax (PAT) of INR0.04 crore as compared to
total operating income of INR22.72 crore and PAT of INR0.09 crore
during FY14.
PIONEER FABRICATORS: CRISIL Cuts Rating on INR150MM Loan to B-
--------------------------------------------------------------
CRISIL has downgraded the long term rating of Pioneer Fabricators
Private Limited (PFPL) to 'CRISIL B-/Stable' from 'CRISIL
B/Stable'; and reaffirmed the short term rating at 'CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 110 CRISIL A4 (Reaffirmed)
Cash Credit 150 CRISIL B-/Stable (Downgraded
from 'CRISIL B/Stable')
Letter of Credit 30 CRISIL A4 (Reaffirmed)
Proposed Long Term 10 CRISIL B-/Stable (Downgraded
Bank Loan Facility from 'CRISIL B/Stable')
The rating downgrade reflects CRISIL's belief that financial risk
profile is expected to deteriorate over the medium term marked by
weak debt protection metrics and high TOLTNW. The interest
coverage has declined to 0.62 times in 2014-15 from 2.26 times in
2013-14 on account of significant decline in operating
profitability to 2.4% in 2014-15 from 8.4% in 2013-14. The decline
in operating margin is attributable to subcontracting work
undertaken in 2014-15. CRISIL believes that the financial risk
profile will remain weak over the medium term on account of modest
debt protection metrics.
The rating downgrade also reflects expected deterioration in
liquidity, on account of low net cash accruals expected against
incremental working capital requirements leading to high reliance
on external borrowings. CRISIL believes that liquidity will remain
weak over the medium term on account of working capital intensive
operations.
The rating reflects PFPL's weak financial risk profile marked by
low interest coverage and its large working capital requirements.
These rating weaknesses are partially offset by extensive industry
experience of the promoters.
Outlook: Stable
CRISIL believes that PFPL will continue to benefit over the medium
term from its promoters extensive industry experience. The outlook
may be revised to 'Positive' in case of significant improvement in
its scale of operations, while maintaining its profitability, or
improvement in PFPL's working capital management. Conversely, the
outlook may be revised to 'Negative' in case of deterioration in
the company's financial risk profile, most-likely because of
lower-than-expected cash accruals, driven by decline in revenues
and profitability, or further elongation in the working capital
cycle, or any significant debt-funded capex plans.
PFPL was set up in 1988 by Mr. Ramesh Chandra Agarwal in Uttar
Pradesh. It offers engineering services and is involved in
designing and fabrication of iron and steel structures, such as
steel bridge girders, metal crash barriers, railway-track girders,
building structures, guard rails, chain-link fencing, and road
infrastructure. The company also trades in mild steel and
stainless steel in the domestic market.
R.K. PHARMACEUTICALS: CARE Assigns B+ Rating to INR5cr LT Loan
--------------------------------------------------------------
CARE assigns 'CARE B+' and 'CARE A4' ratings to the bank
facilities of R.K. Pharmaceuticals.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 5 CARE B+ Assigned
Short-term Bank Facilities 10 CARE A4 Assigned
Rating Rationale
The ratings assigned to the bank facilities of R.K.
Pharmaceuticals (RKP) are constrained by its small scale of
operations with low networth base, weak solvency position and the
firm's presence in a highly fragmented & competitive industry. The
ratings are further constrained by RKP's exposure to foreign
exchange fluctuation risk and constitution of the entity being a
proprietorship firm. The ratings, however, derive strength from
the experienced proprietor, low profitability margins and
positive outlook for the packaging industry.
Going forward, the ability of the firm to profitably scale-up its
operations and improve its overall solvency position would remain
the key rating sensitivities.
R. K Pharmaceuticals (RKP) is a proprietorship firm established in
1997 by Mr Rakesh Sharma. The firm is engaged in the trading of
aluminium foil, PVC film and raw rubber which finds application in
packaging industry. RKP operates through its three offices located
in Punjab, Himachal Pradesh and Uttarakhand. RKP mainly imports
goods from Korea, Thailand, China and Vietnam [imports constituted
around 59% of the total purchases in FY15 (refers to the period
April 01 to March 31)] and also purchases the raw material from
suppliers based in Punjab. The products are supplied mainly to
pharmaceutical companies located in Punjab, Himachal Pradesh,
Jammu & Kashmir and Uttarakhand. Besides RKP, the proprietor is
also one of the promoters of Rexon Laboratories Limited (rated
'CARE B+/CARE A4'), incorporated in 1995 and engaged in the
manufacturing of pharmaceutical formulations and trading of
diversified products, including Packaging material.
RBD INTERNATIONAL: CRISIL Lowers Rating on INR160MM Loan to D
-------------------------------------------------------------
CRISIL has downgraded its ratings on the bank facilities of
RBD International (part of the RBD Group) to 'CRISIL D/CRISIL D'
from 'CRISIL B+/Stable/CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Foreign Bill Purchase 160 CRISIL D (Downgraded from
'CRISIL A4')
Packing Credit 40 CRISIL D (Downgraded from
'CRISIL B+/Stable')
The downgrade reflects default by the group in servicing its bank
debt. Currently, there are no operations in any of the group
entities.
For arriving at the rating, CRISIL has combined the business and
financial risk profiles of RBD International, Welldone Exim Pvt
Ltd, High Value Exim Pvt Ltd, Attire Designers Pvt Ltd, and
Goodone Traders Pvt Ltd. This is because all these entities,
together referred to as the RBD group, have the same board of
directors and senior management team with common procurement,
marketing, and finance functions.
The RBD group started trading in 1993. All the entities in the
group were trading in readymade garments (more than 80 percent of
revenue), hosiery, handicrafts, fabrics, leather goods, and
miscellaneous products. They have common customers and suppliers,
and also the same banker, Punjab National Bank, and auditors.
RCL PAPER: CARE Lowers Rating on INR7.28cr LT Loan to 'D'
---------------------------------------------------------
CARE revises the rating assigned to the bank facilities of
RCL Paper and Packaging Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 7.28 CARE D Revised from
CARE BB
Short-term Bank Facilities 2.75 CARE D Revised from
CARE A4
Rating Rationale
The revision in the ratings assigned to the bank facilities of RCL
Paper and Packaging Limited (RPPL) takes into account delays in
servicing of debt obligations on account of cash flow mismatch.
RCL Paper and Packaging Limited (RPPL) formerly known as RCL
Technologies Limited was incorporated in 1993 as Reddy Computers
Limited and subsequently its name was changed to RCL Technologies
Limited in the year 2000. Furthermore, on November 05, 2014, the
name of the company was changed to RCL Paper and Packaging
Limited. The company is engaged in the business of digital
printing of letter heads, bus tickets, account books, pin mailers
and other printed documents. Initially, RCL used to outsource the
printing works, after receiving order from its clients, to various
third parties, on a job-work basis till 2011. However, the company
started its own printing unit in 2011. Recently, the company is
planning to purchase new packing and printing equipments to start
manufacturing of paper gift boxes and other packaging boxes.
During FY14 (refers to the period April 1 to March 31), RPPL
reported a net profit of INR0.32 crore on a total operating income
of INR24.69 crore as against a profit of INR0.13 crore on a total
operating income of INR8.65 crore in FY13.
RELIANCE COMMUNICATIONS: Fitch Affirms 'BB-' IDR; Outlook Stable
----------------------------------------------------------------
Fitch Ratings has affirmed India-based telecoms service provider
Reliance Communications Limited's (Rcom) Long-Term Foreign- and
Local-Currency Issuer Default Ratings (IDR) of 'BB-'. The Outlook
is Stable. Fitch has simultaneously affirmed the 'BB-' rating on
Rcom's USD300 mil. 6.5% senior secured notes due 2020.
KEY RATING DRIVERS
Deleveraging is Likely: The affirmation factors in Rcom's
commitment to deleverage in a timely manner by using the proceeds
from the sale of its tower business by its subsidiary, Reliance
Infratel Ltd (Infratel). Management has committed to repay a part
of its USD6.1 bil. of debt and to achieve a target debt/EBITDA of
below 3.0x by end-March 2017. Fitch would likely downgrade the
rating if the company is unable to demonstrate in a timely manner
that it has the ability to pay down debt such that FFO-adjusted
net leverage will fall to below 4.5x.
Excluding any non-core asset sales, Rcom's FFO-adjusted net
leverage could remain high at around 5.5x, as Fitch expects it to
generate limited FCF due to stagnant EBITDA and a rise in capex
requirements during the financial year ending March 31, 2017,
(FY17). The company has insufficient liquidity to meet its
obligations due in FY17, and will have to rely on banks to
refinance facilities if it does not sell any assets. Rcom has
breached some debt covenants, and hence has limited ability to
raise further debt to improve liquidity. It has received waiver
consents from most of its lenders for breach of covenants.
Asset Sale to Support Ratings: Rcom has a non-binding arrangement
to sell Infratel's tower business to Tillman Global Holdings, LLC
and TPG Asia, Inc. Should this transaction proceed and sale
proceeds are used to pay down debt, Rcom's FFO-adjusted net
leverage could improve to below 4.0x as the indicative enterprise
value will more than offset the additional lease-adjusted debt.
Apart from the sale of tower business, Rcom is also considering
deleveraging via a sale of its non-core assets, including its
under-sea cable subsidiary Global Cloud Xchange (GCX; B+/Stable),
real estate and its pay-TV business. However, progress on these
asset sales has been slow to date.
Weak Market Position: Rcom's IDR is constrained by its weak market
position as the fourth-largest telco in India with a revenue
market share of around 8% and a subscriber base of mostly low-
revenue customers. Rcom could face further challenges due to
higher competition in the data market as Reliance Jio - part of
Reliance Industries Ltd (RIL; BBB-/Stable) - enters the market in
2H16. However, Rcom's ownership of a pan-India spectrum in
800MHz/850MHz and its ability to offer faster 4G data services
could help it fend off the competition, to some extent.
The top-three telcos - Bharti Airtel (BBB-/Stable), Vodafone
India, a subsidiary of Vodafone Group Plc (BBB+/Stable), and Idea
Cellular Ltd - have been gradually gaining market share and now
account for about 70% of wireless revenue in India's telecoms
market.
Negative FCF on Larger Capex: We forecast FCF will be limited in
FY17 as Rcom needs to invest around INR40bn (FY16: INR34bn -
excluding a one-off spectrum payment of INR11bn) on capex to
support its fast-growing data traffic and to improve the quality
of voice services. However, its capex/revenue of around 17%-18%
will still be below than top-three telcos' average of 19%-20% due
to its infrastructure and spectrum-sharing arrangement with
Reliance Jio.
In January 2016, Rcom said that it would share and pool its 800MHz
spectrum with Reliance Jio in 17 regions (known as "circles" in
India). Rcom has future plans to share 800MHz spectrum in the
remaining five circles. Spectrum sharing will give Rcom access to
a wider band of spectrum and Jio's network to provide faster 4G
data services and provide capex and operating costs savings. Rcom
and Reliance Jio signed reciprocal infrastructure agreements
during FY14-15 to share Rcom's 43,000 towers, 120,000km of inter-
city fibre, and 70,000km intra-city fibre network for the next 17-
20 years. Under the agreements, Rcom also has access to existing
and future towers and fibre assets of Reliance Jio.
SSTL Acquisition: Fitch believes that Rcom's acquisition of
Sistema Shyam Teleservices Ltd (SSTL), the Indian mobile
subsidiary of Russia's Sistema JSFC (BB-/Stable), in an all-stock
deal is credit neutral for Rcom, at least in the short term. Rcom
will benefit from additional nine million subscribers and
INR15 bil. revenue and also will be able to extend the life of its
800MHz spectrum in eight Indian circles.
However, Fitch believes that in FY17 incremental EBITDA from the
acquisition will likely fall short of SSTL's annual spectrum cost
of INR3.9 bil. - the cost of the spectrum SSTL acquired in the
March 2013 auction will be paid annually over 10 years starting
FY17. In the longer term Fitch expects that growth in incremental
EBITDA may make the transaction cash-flow positive. SSTL will pay
off its existing debt before the acquisition.
Competition to Intensify: Fitch expects competition to intensify
as Reliance Jio enters the market with cheaper tariff plans and
faster data speeds, and armed with sufficient spectrum and access
to funds. Fitch expects the industry blended monthly average
revenue per user (ARPU) to fall due to a decline in data tariffs,
which will more than offset the rise in data usage. Rcom's FY17
blended ARPU, however, is likely to decline by 1%-2% compared with
a 5%-6% decline in the industry's blended ARPU. This is because
Rcom's ARPU of INR140 is already lower than the industry average
of INR170.
Weak Liquidity: Rcom's liquidity is dependent on its ability to
refinance its maturing debt because its cash generation and
unrestricted cash of INR22 bil. are insufficient to pay its short-
term debt of INR143 bil. Banks have been willing to lend on a
secured basis with licenses and immovable assets as collateral.
KEY ASSUMPTIONS
Fitch's key assumptions within its rating case for the issuer
include:
-- The sale of Infratel's tower business will happen in a
timely manner and Rcom will use the sale proceeds to reduce
its debt.
-- FY17 revenue to rise by 2%-3%, which will be below the
industry average of 5% - due mainly to its loss of
customers in five Indian circles.
-- EBITDA margin to narrow by 100bp in FY17 to 31.5% due to
competition, especially in data services.
-- Blended ARPU to fall by 1%-2% from INR140, which is below
the industry average of INR170
-- Industry revenue market share to decline to around 6%-7%
from 7.5%-8%
-- SSTL acquisition will be completed and consolidated from
FY17. SSTL will have a lower FY17 EBITDA margin of 15%
compared with Rcom's 32%.
-- Effective interest rate of about 7.5%-8%.
RATING SENSITIVITIES
Negative: Developments that may, individually or collectively,
lead to a negative rating action include:
-- Inability to demonstrate on a timely basis that funds will
be available to improve liquidity and pay down debt such
that FFO-adjusted net leverage falls below 4.5x on a
sustained basis;
Positive: Rcom's IDR has a limited upside as its business risk
profile caps the IDR at 'BB-'.
In accordance with Fitch's policies, Rcom appealed and provided
additional information to Fitch that resulted in a rating action
different than the original rating committee outcome.
REXON LABORATORIES: CARE Assigns B+ Rating to INR1cr LT Loan
------------------------------------------------------------
CARE assigns 'CARE B+/CARE A4' ratings to the bank facilities of
Rexon Laboratories Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 1 CARE B+ Assigned
Short-term Bank Facilities 7 CARE A4 assigned
Rating Rationale
The ratings assigned to the bank facilities of Rexon Laboratories
Limited (RXL) are primarily constrained by its fluctuating and
small scale of operations with low net-worth base and weak
financial risk profile characterised by low profitability margins
and moderately leveraged capital structure. The ratings are
further constrained by the fragmented and competitive nature of
the trading industry and company's exposure to foreign exchange
fluctuation risk. The ratings, however, derive strength from the
experienced promoters and positive outlook for the industries in
which RXL has its presence.
Going forward, the ability of the company to profitably scale-up
its operations and improve its overall solvency position shall be
the key rating sensitivities.
The entity was initially established as a public limited company
under the name of 'Priya Drugs Limited' in 1995. Later on, in
2002, the company got renamed to 'Rexon Laboratories Limited'
(RXL). The company is currently being managed by Mr Rakesh
Sharma, Mr Vijay Bharat and Mr Pankaj Sharma. RXL is mainly
engaged in the trading of diversified products such as packaging
material (PVC film & Aluminum foil), allopathic medicines and
construction material (PVC panel) and is also involved
in manufacturing of pharmaceutical formulations which are
available in the form of injections at its manufacturing facility
located in Jalandhar, Punjab [income from manufacturing
constituted around 22% of the total sales in FY15 (refers to the
period April 01 to March 31)]. The company is present across
various therapy areas including antibacterial, cardiovascular,
anti-diabetic, skin care, antacids, etc, through manufacturing and
trading of pharmaceutical formulations. The company procures its
main raw material, ie, active pharmaceutical ingredients (API) and
other requirements like bottles, tubes, syringes, etc, from
Maharashtra, Delhi and Punjab, while the traded goods are imported
from China (imports constituted approximately 36% of the total
purchases in FY15) and also procured from other suppliers based in
Himachal Pradesh. The pharmaceutical formulations are sold to
various pharmaceutical companies based in Uttar Pradesh though
RXL's network of three distributors while the packaging and
construction material are supplied to various companies located in
North India.
Besides RXL, one of the directors-Mr Rakesh Sharma is also
promoter in another group concern, namely, R. K Pharmaceuticals
(rated 'CARE B+/CARE A4'), established in 1997 and engaged in
trading of packaging material.
In FY15, RXL achieved a total operating income of INR10.83 crore
with PBILDT and PAT of INR0.30 crore and INR0.14 crore,
respectively, as against the total operating income of INR12.56
crore with PBILDT and PAT of INR0.33 crore and INR0.08 crore,
respectively, in FY14. In 7MFY16 (Provisional), the company
achieved a total income of INR11.90 crore.
RR FAB: CARE Reaffirms B+ Rating on INR3.80cr LT Loan
-----------------------------------------------------
CARE reaffirms the ratings assigned to the bank facilities of
RR Fab Constructions.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 3.80 CARE B+ Reaffirmed
Short term Bank Facilities 4.50 CARE A4 Reaffirmed
Rating Rationale
The ratings assigned to the bank facilities of RR Fab
Constructions (RFC) continues to be constrained by its small scale
of operations, volatility in operating margins (due to absence of
price escalation clause), working capital intensive nature of
operations with stretched operating cycle and geographical
concentration risk.
However, the ratings take into account the experience of the
partners, stable operating income during FY15 (refers to the
period from April 1 to March 31), adequate order book position and
comfortable capital structure.
The ability of the company to increase it scale of operations and
manage its working capital efficiently are the key rating
sensitivities.
RFC, formerly known as R&R Fabricators, was established in 1985 by
Mr. S. Ramachandra as a proprietorship concern, for executing
civil construction works. Subsequently, it was reconstituted as a
partnership firm on May 05, 2010 with Mr. R. Somesh joining as
partner. RFC is engaged in execution of civil construction works
like construction of buildings, residential apartments in the
state of Karnataka. The firm undertakes civil construction works
for private as well as public entities and has an outstanding
order book worth of INR22 crore as on February 15, 2016.
During FY15, RFC registered total operating income of INR11.16
crores and PAT of INR0.31 crores as compared to PAT of INR0.32
crores on a total operating income of INR10.59 crores in FY14.
RS GHUMMAN: Ind-Ra Suspends 'IND B' Long-Term Issuer Rating
-----------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated INRGhumman India
Enterprises' (RSGIE; an entity of R S Ghumman Group) 'IND B' Long-
Term Issuer Rating to the suspended category. The Outlook was
Stable. The rating will now appear as 'IND B(suspended)' on the
agency's website. The agency has also migrated RSGIE's INR90m
fund-based working capital limit to 'IND B(suspended)' from 'IND
B'.
The ratings have been migrated to the suspended category due to
lack of information. Ind-Ra will no longer provide ratings or
analytical coverage for RSGIE.
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 the six-
month period, the ratings could be reinstated and will be
communicated through a rating action commentary.
SARADHAMBIKA PAPER: ICRA Reaffirms B+ Rating on INR6.0cr LT Loan
----------------------------------------------------------------
ICRA has reaffirmed the long-term rating outstanding on the
INR0.23 crore (revised from INR0.65 crore) term loans, INR6.00
crore fund based facilities and INR0.77 crore (revised from
INR0.35 crore) proposed facilities of Saradhambika Paper & Board
Mills Private Limited at [ICRA]B+.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term: Term
loans 0.23 [ICRA]B+ reaffirmed
Long-term: Fund
based facilities 6.00 [ICRA]B+ reaffirmed
Long-term: Proposed
facilities 0.77 [ICRA]B+ reaffirmed
The rating continues to factor in the significant experience of
the promoters of over two decades in the paper industry and the
favorable demand scenario for kraft paper boards in the medium
term. The rating also takes into account the growth in the
operating income and the expansion in the profit margins on the
back of improvement in capacity utilization aided by healthy order
flows. The ratings are however, constrained by the small scale of
operations which limits the Company's financial flexibility and
the benefits from economies of scale. The rating also takes into
account the intense competition arising from excess capacity and
the highly fragmented nature of the domestic paper industry which
limits its bargaining power and pricing flexibility. The rating is
further constrained by the moderate capital structure and coverage
indicators. Going forward, the Company does not have any major
debt-funded capital expenditure plans over the medium term. Hence,
its ability improve its revenues by scaling up the operations and
its profit margins while efficiently managing its working capital
cycle will be critical to improving its credit profile.
Incorporated in 1994 and commencing operations in 1996,
Saradhambika Paper & Board Mills Private Limited is engaged in the
manufacture of kraft paperboard with GSM in the range of 250 to
450 and burst factor of 8 to 10, and caters to packaging
requirements of entities across industries. The paperboards find
application as packing materials in various forms including paper
cones, tubes and cores, fiber drums, etc. The Company's
manufacturing facility is located in Gobichettipalayam, Erode
(Tamil Nadu) and operates with an installed capacity of 70MT per
day. The Company sells its produce in the domestic markets,
primarily to entities located in South India. The Company has a
wind mill with an installed capacity of 750kW which contributes to
~60.0% of its annual power requirements.
Recent Results
The Company reported a net profit of INR0.9 crore on an operating
income of INR30.4 crore during 2014-15 as against a net loss of
INR0.3 crore on an operating income of INR22.5 crore during 2013-
14.
SEC BUILDTECH: Ind-Ra Suspends 'IND B+' Long-Term Issuer Rating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated SEC Buildtech
Private Limited's 'IND B+' Long-Term Issuer Rating to the
suspended category. The Outlook was Stable. This rating will now
appear as 'IND B+(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 of SEC Buildtech Private Limited.
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.
SEC Buildtech Private Limited's ratings:
-- Long-Term Issuer Rating: migrated to 'IND B+(suspended)' from
'IND B+/Stable'
-- INR10 million fund-based limits: migrated to 'IND
B+(suspended)' from 'IND B+' and 'IND A4(suspended)' from
'IND A4'
-- INR45 million non-fund-based limits: migrated to 'IND
A4(suspended)' from 'IND A4'
SH. RANSINGH: CRISIL Assigns B+ Rating on INR80MM Cash Loan
-----------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable 'to the long-term bank
facility of Sh. Ransingh Bohra Fuels. The rating reflects the
firm's average financial risk profile marked by moderate debt
protection indicators, modest scale of operations and
vulnerability to any unfavourable regulatory change. These rating
weaknesses are partially offset by the extensive experience of the
proprietor in the industry and tie-up with Indian Oil Corporation
Ltd (IOCL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 80 CRISIL B+/Stable
Outlook: Stable
CRISIL believes RSB will continue to benefit from the promoter's
long standing industry experience and established relationships
with clients. The outlook may be revised to 'Positive' in case of
improvement in the capital structure due to equity infusion by the
promoters and significant ramp-up in the scale of operations.
Conversely, the outlook may be revised to 'Negative' in case of
pressure on liquidity on account of low cash accrual or an
increase in working capital requirement or any considerable, debt-
funded capital expenditure.
Established in 2011, RSB is a Haryana-based proprietorship firm
that runs a petrol pump. The firm has a tie-up with IOCL. The firm
is promoted by Ms. Kusum Bala; however, the operations are looked
after by Mr. Hirdey Ram.
The firm recorded book profit of INR2.64 million on an operating
income of INR782 million in 2014-15 (refers to financial year,
April 1 to March 31) as against book profit of INR2.55 million on
an operating income of INR745 million in 2013-14.
SHAPE ENGINEERING: CRISIL Reaffirms 'B' Rating on INR105MM Loan
---------------------------------------------------------------
CRISIL's ratings on the bank facilities of Shape Engineering
Company Private Limited (SECPL) continue to reflect customer
concentration in the company's revenue, its small scale of
operations, and susceptibility to economic cycles. These
weaknesses are partially offset by promoters' extensive experience
in the engineering and capital goods industry, and healthy
financial risk profile because of adequate networth/low
gearing/comfortable debt protection metrics.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 10 CRISIL A4 (Reaffirmed)
Cash Credit 105 CRISIL B/Stable (Reaffirmed)
Letter of Credit 10 CRISIL A4 (Reaffirmed)
Proposed Long Term
Bank Loan Facility 35 CRISIL B/Stable (Reaffirmed)
Term Loan 15 CRISIL B/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes SECPL will continue to benefit over the medium
term from its promoters' extensive industry experience. The
outlook may be revised to 'Positive' in case of substantial and
sustained improvement in revenue and profitability, or better
working capital management. Conversely, the outlook may be revised
to 'Negative' in case of low revenue and profitability, weakening
liquidity.
SECPL, incorporated in 1984 in Haridwar, is promoted by Mr. Sudhir
Jain and his family members. It manufactures components of
turbines, generators, and heat exchangers. It has installed
capacity of 2400 tonne per annum.
SHIVA WHEELS: CARE Assigns B+ Rating to INR5.56cr LT Loan
---------------------------------------------------------
CARE assigns 'CARE B+' rating to the bank facilities of Shiva
Wheels Pvt. Ltd.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 5.56 CARE B+ Assigned
Rating Rationale
The ratings assigned to the bank facilities of Shiva Wheels Pvt.
Ltd. (SWPL) are primarily constrained by its small scale of
operation, risk of non-renewal of dealership agreement, pricing
constraints and margin pressure arising out of competition from
other auto dealers in the market, working capital intensive nature
of operation and thin profit margins, leveraged capital structure
& moderate debt protection metrics. The ratings, however, derive
strength from its experienced promoters with long track record of
operation, authorised dealership of Honda Motorcycle and Scooter
India Pvt. Ltd (HMSI) and integrated nature of business.
Going forward, ability to increase its scale of operation and
profitability margins and ability to manage working capital
effectively are the key rating sensitivities.
Shiva Wheels Pvt. Ltd. (SWPL) was established as a partnership
firm namely Shiva Auto in 1988. Since inception, the firm
has been in two wheelers selling business. Later, in the year
2003, the firm was converted into a company and rechristened as
SWPL. Presently, the company has two showrooms in and around
Kolkata. The showroom at Ramgarh in Kolkata sells multi brand two
wheelers, spare parts and accessories and the other showroom at
B.T. Road is an authorized dealership of HMSI for the north part
of Kolkata. Apart from this, the company has a workshop along with
B.T. Road showroom. The day-to-day affairs of the company are
looked after by Mr Sanjib Paul, Director, with adequate support
from other three directors and a team of experienced personnel.
During FY15 (refers to the period April 01 to March 31), the
company reported a total operating income of INR17.85 crore
(FY14: INR18.44 crore) and a net loss of INR0.08 crore (in FY14
net profit: INR0.02 crore). Furthermore, the company has achieved
a total operating income of INR17.39 crore during 8MFY16 (refers
to the period April 1 to November 30).
SIDHI VINAYAK: Ind-Ra Suspends 'IND BB' Long-Term Issuer Rating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Sidhi Vinayak
Cotspin Limited's (SVCL) 'IND BB' Long-Term Issuer Rating to the
suspended category. The Outlook was Stable. This rating will now
appear as 'IND BB (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 SVCL.
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 the six-
month period, the ratings could be reinstated and will be
communicated through a rating action commentary.
SVCL's ratings are as follows,
-- Long-Term Issuer Rating: migrated to 'IND BB(suspended)' from
'IND BB'/Stable
-- INR1.20 million term loans: migrated to 'IND BB(suspended)'
from 'IND BB'
-- INR65.00 million fund-based limits: migrated to 'IND
BB(suspended)'/'IND A4+(suspended)' from 'IND BB'/ 'IND A4+
SIVA SWATHI: Ind-Ra Withdraws 'IND BB+' Long-Term Issuer Rating
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has withdrawn Siva Swathi
Constructions Private Limited's (SSCPL) 'IND BB+(suspended)' Long-
Term Issuer Rating.
The ratings have been withdrawn due to lack of adequate
information. Ind-Ra will no longer provide ratings or analytical
coverage for SSCPL.
Ind-Ra suspended SSCPL's ratings on 1 July 2015.
SSCPL's ratings are as follows:
-- Long-Term Issuer Rating: 'IND BB+(suspended)'; rating
withdrawn
-- INR520 million fund-based facility: 'IND BB+(suspended)';
rating withdrawn
-- INR1, 400 million non-fund-based facility: 'IND
A4+(suspended)'; rating withdrawn
-- INR14.8 million term loan: 'IND BB+(suspended)'; rating
withdrawn
SLMI INFRAPROJECTS: CRISIL Ups Rating on INR150MM Loan to B-
------------------------------------------------------------
CRISIL has upgraded its rating on the long-term bank facility of
SLMI Infraprojects Private Limited (SLMI) to 'CRISIL B-/Stable'
from 'CRISIL C', while reaffirming its rating on the short-term
facility at 'CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 370 CRISIL A4 (Reaffirmed)
Overdraft Facility 150 CRISIL B-/Stable (Upgraded
from 'CRISIL C')
The upgrade reflects timely servicing of debt by SLMI over the six
months through January 2016. The upgrade also factors in CRISIL's
belief that the company will service its debt in a timely manner,
as its cash accrual is expected to be adequate to meet debt
obligation, over the medium term.
The ratings reflect SLMI's large working capital requirement,
exposure to intense competition in the construction industry, and
the high degree of customer and project concentration in its order
book. These rating weaknesses are partially offset by the
extensive industry experience of the company's promoters.
Outlook: Stable
CRISIL believes SLMI will continue to benefit over the medium term
from its promoters' extensive industry experience and established
relationship with customers. The outlook may be revised to
'Positive' if there is a substantial and sustained increase in
profitability margins, or continued improvement in working capital
management. Conversely, the outlook may be revised to 'Negative'
in case of a steep decline in profitability margins, or
significant deterioration in the company's capital structure
because of large debt-funded capital expenditure or a stretched
working capital cycle.
SLMI (formerly, Sree Lakshmi Metal Industries and Constructions)
was originally set up in 1992 by Mr. B Venkat Reddy as a
proprietorship firm, which was reconstituted as a private limited
company in 2011. The company, based in Secunderabad, constructs
roads in Hyderabad.
SRI KODURI: ICRA Reaffirms 'B' Rating on INR17cr Fund Based Loan
----------------------------------------------------------------
ICRA has reaffirmed the long-term rating assigned to INR17.00
crore fund based limits and INR0.50 crore non fund based limits of
Sri Koduri Enterprises Private Limited at [ICRA]B. ICRA has also
reaffirmed the long term rating assigned to INR2.50 crore
unallocated limits of SKEPL at [ICRA]B.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based Limits 17.00 [ICRA]B reaffirmed
Non Fund Based Limits 0.50 [ICRA]B reaffirmed
Unallocated limits 2.50 [ICRA]B reaffirmed
The reaffirmation of the rating is constrained by stagnation in
revenues at ~INR50 crore in the last six years due to limited
addition in showrooms and high competition levels; expected
decline in volume of vehicles sold in the near term with closure
of Honda Motorcycles dealership business due to increased
competition; and highly competitive two-wheeler and three-wheeler
market due to the presence of multiple Original Equipment
Manufacturers (OEMs) which pressurizes the margins. The rating is
further constrained by the significant drop in operating margins
to 4.82% in FY2015 from 6.57% in FY2014 owing to increased
discounts; weak capital structure and coverage metrics of the
company with gearing at 5.17 times and interest coverage ratio of
0.83 times for FY2015; and tight liquidity position of the company
as indicated by full utilization of the working capital borrowings
for the last 15 months.
The rating reaffirmation however favourably factors in the
longstanding experience of the management in the vehicle
dealership business; established position of the company as an
authorized dealer for Piaggio Vehicles Private Limited in Andhra
Pradesh; and diversification of the business into mining
operations since December 2015 supporting the revenues of the
company in the near term.
Going forward, the company's ability to increase its profitability
and capital structure while managing its working capital
requirements effectively will be the key credit rating
sensitivities.
Sri Koduri Enterprises Private Limited (SKEPL) is an authorized
auto dealer of three wheelers and four wheelers manufactured by
Piaggio Vehicles Private Limited (subsidiary of Piaggio S.P.A, an
Italy-based manufacturer), Case New Holland Construction Equipment
(India) Pvt. Ltd and MRF Tyres in Andhra Pradesh. The company is
also engaged in servicing of vehicles along with sale of spare
parts. SKEPL has 17 showrooms in East Godavari district for its
various dealerships.
Recent Results
As per the audited results for FY2015, the company reported net
loss of INR1.47 crore on turnover of INR51.56 crore as against net
loss of INR0.18 crore on turnover of INR48.06 crore during FY2014.
SSZ COMMODITIES: CRISIL Lowers Rating on INR300MM Loan to B+
------------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facility of
SSZ Commodities Private Limited (SSZ) to 'CRISIL B+/Stable' from
'CRISIL BB-/Stable' and has assigned its 'CRISIL A4' rating to the
company's short-term facility.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Import Letter of
Credit Limit 150 CRISIL A4 (Assigned)
Import Letter of 300 CRISIL B+/Stable (Downgraded
Credit Limit from 'CRISIL BB-/Stable')
The downgrade reflects deterioration in SSZ's financial risk
profile. Increased working capital cycle because of delays in
payments by customers has resulted in stretch in payables. As a
result, the company's total outside liabilities to tangible
networth (TOLTNW) ratio increased to 4.86 times as on March 31,
2015, from 1.07 times a year earlier. CRISIL expects the TOLTNW
ratio to remain high over the medium term. The downgrade also
factors in lower-than-expected operating performance due to fall
in operating margin to 1.9 percent in 2014-15 (refers to financial
year, April 1 to March 31) from 4.0 percent the previous year.
CRISIL expects the operating margin at 1-2 percent over the medium
term. The margin will remain susceptible to fluctuations in
foreign exchange (forex) rates and in steel prices.
The ratings reflect SSZ's weak financial risk profile because of
high TOLTNW ratio, modest scale of operations in an intensely
competitive industry, and susceptibility to volatility in raw
material prices. These weaknesses are partially offset by the
company's established presence and its promoters' extensive
experience in the steel trading business.
Outlook: Stable
SSZ will continue to benefit from its promoters' extensive
industry experience and its diversified customer base. The outlook
may be revised to 'Positive' if the company reports significantly
better-than-expected revenue growth and healthy operating margin
and cash accrual, or if its capital structure improves because of
substantial fund infusion. Conversely, the outlook may be revised
to 'Negative' if cash accrual declines because of dip in operating
margin or forex loss, or if liquidity weakens due to stretch in
working capital cycle.
SSZ was incorporated by Mr. Sanjay Gupta, Mr. Zaheer Lokhandwala,
and Mr. Mohanlal Jatia in 2009, and is based in Mumbai. It trades
in steel plates and coils.
SUNGRACIA TILES: CRISIL Lowers Rating on INR150MM Loan to B+
------------------------------------------------------------
CRISIL has downgraded its rating on the bank loan facilities of
Sungracia Tiles Private Limited (STPL) to 'CRISIL B+/Stable/CRISIL
A4' from 'CRISIL BB-/Stable/CRISIL A4+'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 31 CRISIL A4 (Downgraded from
'CRISIL A4+')
Cash Credit 150 CRISIL B+/Stable (Downgraded
from 'CRISIL BB-/Stable')
Corporate Loan 60 CRISIL B+/Stable (Downgraded
from 'CRISIL BB-/Stable')
Letter of Credit 20 CRISIL A4 (Downgraded from
'CRISIL A4+')
Proposed Long Term 2.4 CRISIL B+/Stable (Downgraded
Bank Loan Facility from 'CRISIL BB-/Stable')
Term Loan 67.9 CRISIL B+/Stable (Downgraded
from 'CRISIL BB-/Stable')
The rating downgrade reflects CRISIL's belief that STPL's business
and financial risk profile will be constrained due to decline in
sales, profitability, and debt protection metrics over the medium
term. In year 2014-15 (refers 1st April to 31st March), the
company's profitability at operating level has reduced at around
3.69 per cent against 13.69 per cent a year ago because of intense
competition in wall tiles segment coupled with slowdown prevailing
in end user industry. The impacted profitability along with
increasing working capital requirements reflected in high gross
current asset (GCA) days of around 244 days as of March 2015 has
led to deterioration in its debt protection metrics. In the year
2014-15, and its interest coverage ratio reduced to 0.6 times vs.
2.7 times a year earlier and its net cash accruals to total debt
(NCATD) ratio reduced to 0.13 times against 0.21 times a year
earlier. With the company's operating margins are likely to be
under pressure; its interest coverage and NCATD ratio are expected
to be in the range of 1.5 to 2.0 times and 0.13 to 0.20 times
respectively over the medium term.
STPL also remains exposed to risks pertaining to modest scale of
operations in the wall tiles industry, and large working capital
requirements. The company, however, benefits from the promoters'
extensive experience.
Outlook: Stable
CRISIL believes STPL will continue to benefit over the medium term
from its promoters' extensive experience. The outlook may be
revised to 'Positive' if significant improvement in scale of
operations or profitability leads to stronger-than-expected debt
protection metrics. Conversely, the outlook may be revised to
'Negative' if the profitability declines further, or the financial
risk profile deteriorates owing to stretch in working capital or
large, debt-funded capital expenditure.
Incorporated in 2012, STPL is promoted by Mr. Bharat Dhirajlal
Sarsavadiya, Mr Manojkumar Govindbhai Patel and Mr Jainendra
Kapoorchand Malesha. The company manufactures digitally printed
wall tiles.
Net profit and sales reduced to INR0.8 million and INR310 million,
respectively in 2014-15 from INR10.3 million and INR349 million
the previous year.
T K INTERNATIONAL: Ind-Ra Suspends IND D Long-Term Issuer Rating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated T K International
Limited's (TKIL) 'IND D' Long-Term Issuer Rating to the suspended
category. This 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 TKIL.
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 the six-
month period, the ratings could be reinstated and will be
communicated through a rating action commentary.
TKIL's ratings:
-- Long-Term Issuer Rating: migrated to 'IND D(suspended)' from
'IND D'
-- INR54.7 million long-term loans: migrated to Long-term 'IND
D(suspended)' from 'IND D'
-- INR65.5 million fund-based limits: migrated to Long-term 'IND
D(suspended)'/Short-term 'IND D(suspended)' from 'IND D'/'IND
D'
-- INR5.0 million non-fund-based limits: migrated to Long-term
'IND D(suspended)'/Short-term 'IND D(suspended)' from 'IND
D'/'IND D'
U. B. RICE: CRISIL Upgrades Rating on INR60.4MM LT Loan to 'B'
--------------------------------------------------------------
CRISIL has upgraded its rating on the long-term bank facilities of
U. B. Rice Mill Private Limited (UBRMPL) to 'CRISIL B/Stable' from
'CRISIL B-/Stable' while reaffirming the rating on the short-term
facility at 'CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 3.5 CRISIL A4 (Reaffirmed)
Cash Credit 35.2 CRISIL B/Stable (Upgraded from
'CRISIL B-/Stable')
Proposed Long Term 60.4 CRISIL B/Stable (Upgraded from
Bank Loan Facility 'CRISIL B-/Stable')
Term Loan 20.9 CRISIL B/Stable (Upgraded from
'CRISIL B-/Stable')
The rating upgrade reflects steady growth in net sales with a
compound annual growth rate (CAGR) of around 14 percent between
2010-11 (refers to financial year, April 1 to March 31) and 2014-
15, with year-on-year growth of around 12 percent in 2014-15
driven by increased demand and better capacity utilisation of the
rice rolling mill. The rating upgrade also takes into account
improvement in gearing to 2.08 times as on March 31, 2015, from
2.39 times as on March 31, 2014. The ratio is expected to further
improve over the medium term with gradual repayment of term loan
and accretion to reserve.
The rating continues to reflect UBRMPL's small scale of operations
in the highly fragmented rice industry and its average financial
risk profile because of small networth. These weaknesses are
partially offset by the extensive industry experience of the
promoters and the moderate working capital requirements.
Outlook: Stable
CRISIL believes UBRMPL will continue to benefit over the medium
term from the promoters' extensive industry experience. The
outlook may be revised to 'Positive' if the capital structure
improves, either due to equity infusion or a substantial increase
in its cash accrual, backed by improvement in the scale of
operations and operating profitability along with prudent working
capital management. Conversely, the outlook may be revised to
'Negative' if the financial risk profile, particularly liquidity,
deteriorates most likely on account of a further decline in
revenue and profitability, or large, debt-funded capital
expenditure, or an increase in its working capital requirements.
UBRMPL was incorporated in 2006, promoted by West Bengal-based
Bajaj family. The company mills and processes paddy and
manufactures reclaim rubber. Mr. Aditya Bajaj and his father Mr.
Sushil Kumar Bajaj, the company's key promoters, manage the
operations.
UNITED COTTON: CARE Reaffirms 'B' Rating on INR6.78cr LT Loan
-------------------------------------------------------------
CARE reaffirms the rating assigned to the bank facilities of
United Cotton Extract Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 6.78 CARE B Reaffirmed
Rating Rationale
The rating assigned to the bank facilities of United Cotton
Extract Private Limited (UCEPL) continues to be constrained by
relatively small scale of operations, low profit margins,
leveraged capital structure, weak debt coverage indicators and
working capital intensive nature of operations. The rating is
further constrained by operations in the highly fragmented
cotton ginning industry and susceptibility of operating margins to
volatile cotton prices, seasonality associated with cotton and
changes in the government policies. The reaffirmation of ratings
factor in the improvement in capital structure and debt coverage
indicators albeit decline in operating income and elongation of
operating cycle during FY15 (refers to the period April 1 to
March 31).
The rating however continues to derive strength from the
experience of the promoters, benefits in terms of subsidy and
tax concession and location advantage.
Ability of the company to increase the overall scale of operations
and improve profitability and capital structure amidst intense
competition and efficient management of working capital cycle are
the key rating sensitivities.
United Cotton Extract Private Limited (UCEPL) was incorporated in
2007 by Mr Ghansham M Bafna, Mr Naseem M Yaqub and Mr Upendra V.
Mehta and is engaged in cotton ginning & pressing (since 2008) and
processing of cotton seeds to produce cotton seed oil and oil cake
since (since 2011). It's plant is located at Malegaon, Nasik with
an installed capacity for cotton lint - 4,000 metric tonnes per
annum (MTPA) (utilisation 60% during FY15), cotton seeds - 7,000
MTPA (utilisation 60% during FY14), cotton seed oil - 700 MTPA
(utilisation 60% during FY14) and oil cake 5,600 MTPA
(utilisation 60% during FY14).
During FY15, UCEPL reported total operating income of INR15.07
crore (viz INR25.70 crore in FY14) and PAT of INR0.04 crore
(against net profit of the INR0.08 crore in FY14). Furthermore,
the company has posted sales of INR11 crore for the period of
April, 2015 to January, 2016.
WELLDONE EXIM: CRISIL Lowers Rating on INR400MM Loan to 'D'
-----------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facilities
of Welldone Exim Private Limited (WEPL; part of the RBD group) to
'CRISIL D' from 'CRISIL B+/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Foreign Bill Purchase 400 CRISIL D (Downgraded from
'CRISIL B+/Stable')
Packing Credit 50 CRISIL D (Downgraded from
'CRISIL B+/Stable')
The downgrade reflects default by the group in servicing its bank
debt. Currently, there are no operations in any of the group
entities.
For arriving at the rating, CRISIL has combined the business and
financial risk profiles of WEPL, High Value Exim Pvt Ltd, Attire
Designers Pvt Ltd, RBD International, and Goodone Traders Pvt Ltd.
This is because all these entities, together referred to as the
RBD group, have the same board of directors and senior management
team with common procurement, marketing, and finance functions.
The RBD group started trading in 1993. All the entities in the
group were trading in readymade garments (more than 80 percent of
revenue), hosiery, handicrafts, fabrics, leather goods, and
miscellaneous products. They have common customers and suppliers,
and also the same banker, Punjab National Bank, and auditors.
=========
J A P A N
=========
TOSHIBA CORP: Asks Banks For New Restructuring Funds
----------------------------------------------------
Nikkei Asian Review reports that Toshiba Corp. is seeking an
estimated JPY200 billion to JPY250 billion ($1.75 billion to $2.19
billion) in additional loans from three key lenders to cover the
costs of streamlining its home electronics and semiconductor
businesses.
Nikkei relates that Sumitomo Mitsui Banking Corp., Mizuho Bank and
Sumitomo Mitsui Trust Bank likely will heed the request and
provide the funds as early as this month. The Japanese
conglomerate is working to overhaul operations by the end of the
current fiscal year March 31, aiming for a recovery in
profitability next fiscal year, the report notes.
Nikkei says the company expects to book a net loss of JPY710
billion for fiscal 2015. Toshiba will cut staff and take other
steps in home electronics, which includes personal computers and
televisions. The company's restructuring costs are seen totaling
JPY248 billion.
According to the report, Toshiba secured a credit line of
JPY400 billion from key lenders in late September, but this was
mainly to be used when the company has fundraising problems.
Toshiba's interest-bearing debt totals around JPY1.6 trillion. To
improve the declining capital ratio, the company is selling unit
Toshiba Medical Systems, with plans to use part of the proceeds to
repay the new loans.
Toshiba on March 2 met with more than 40 banks with which it does
business, the report says. The company asked, among other things,
to renew contracts on credit lines to expire in March, sources
from the banks said, Nikkei relays.
About Toshiba Corp.
The Troubled Company Reporter-Asia Pacific, citing Reuters,
reported on July 22, 2015, that an independent investigation said
in a report dated 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 Feb. 12, 2016, Moody's Japan K.K. has downgraded Toshiba
Corporation's corporate family rating (CFR) and senior unsecured
rating by three notches to B2 from Ba2. Moody's has also
downgraded Toshiba's subordinated debt rating by 4 notches to Caa2
from B1, and affirmed its short-term rating of Not Prime.
At the same time, B2 CFR and long-term senior unsecured bond
ratings, as well as its Caa2 subordinated debt rating remain under
review for further downgrade.
On Feb. 9, 2016, Standard & Poor's Ratings Services said that it
has lowered its long-term corporate credit rating on Japan-based
diversified electronics company Toshiba Corp. three notches to
'B+' from 'BB+' and its long-term senior unsecured debt rating two
notches to 'BB' from 'BBB-'. The debt rating is two notches
higher than the corporate credit rating, reflecting S&P's view
that the probability of default in Toshiba's bonds is lower than
that in its bank borrowings. S&P is keeping its long-term ratings
on Toshiba on CreditWatch with negative implications, where S&P
placed them Dec. 22, 2015, when it lowered the long-term corporate
credit rating. S&P has affirmed its short-term corporate credit
and commercial paper ratings on Toshiba.
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.
===============
M A L A Y S I A
===============
1MALAYSIA: Deposits in Malaysian Leaders Said to Top $1 Billion
---------------------------------------------------------------
Bradley Hope and Tom Wright at The Wall Street Journal report that
deposits into personal accounts of Malaysia's prime minister
totaled more than $1 billion -- hundreds of millions more than
previously identified -- and global investigators believe much of
it originated with a Malaysian state fund, people familiar with
the matter said.
The investigators' belief contradicts a conclusion reached
recently by Malaysia's attorney general, the Journal says.
According to the Journal, the attorney general said $681 million
deposited to Prime Minister Najib Razak's account -- identified by
The Wall Street Journal last year -- was a legal donation from a
member of Saudi Arabia's royal family, and most was returned. The
attorney general said there was nothing improper and it was time
to stop scrutinizing the deposits, a notion echoed by Mr. Najib.
Investigators in two other countries, while agreeing most of the
$681 million ultimately was returned, believe the money originated
with a Malaysian state development fund called 1MDB that the prime
minister founded, according to people familiar with the probes,
the Journal relates.
The Journal says the investigators believe the money moved through
a complex web of transactions in several countries and with the
help of two former officials of Abu Dhabi, a Persian Gulf emirate
with which 1MDB has deep ties.
According to the report, the investigators are focusing on an
entity they believe was a crucial conduit: a firm with a name
almost identical to that of a state-owned Abu Dhabi company called
Aabar Investments PJS.
In filings, the 1MDB fund has reported paying more than a billion
dollars to Aabar -- not specifying a full name. Rather than going
to the state-owned Abu Dhabi company, investigators believe the
money flowed to the similarly named firm, which was registered in
the British Virgin Islands, and $681 million made its way
circuitously from there to Mr. Najib's account, the Journal says.
The Journal notes that Prime Minister Najib set up 1MDB -- short
for 1Malaysia Development Bhd. -- several years ago to spur
economic growth. He heads its board of advisers and often has been
involved in its decision making, according to board minutes from
several years.
The Journal recalls that the fund became the subject of
investigations about a year ago after it ran up $11 billion of
debt. Probes began not just in Malaysia but eventually also in the
U.S., Switzerland, Singapore, Hong Kong and, said people familiar
with the matter, in Abu Dhabi too, the Journal relays.
The Journal reported last year that some of the fund's money went
for projects that helped Mr. Najib's party retain power in a close
2013 election. Mr. Najib dismissed this description as a claim by
political foes, and 1MDB denied playing a role in politics, the
Journal says.
In a rare public comment about an active investigation, the Swiss
attorney general said in January he suspected that $4 billion had
been misappropriated from 1MDB through "complex financial
structures," the Journal recalls. The 1MDB fund said it hadn't
been contacted by any foreign investigators but stood ready to
cooperate, the Journal relays..
Mr. Najib has denied wrongdoing or taking any money for personal
gain, the Journal notes.
His office declined to comment on the assertion the money
deposited in his accounts exceeded $1 billion, adds the Journal.
Most money beyond the previously identified $681 million arrived
in 2011 and 2012, the Journal reports citing two people familiar
with flows into his accounts and a person familiar with one
overseas probe. The $681 million arrived in 2013.
According to the Journal, Mr. Najib's office also wouldn't comment
on overseas investigators' belief that the $681 million originated
with 1MDB. That description of its origin is based on bank
transfer and loan documents, on interviews with people familiar
with the probes in two countries, and on interviews with one of
the people familiar with the flows into Mr. Najib's accounts, says
the Journal.
In a statement after the publication of this article, Mr. Najib's
office pointed out the attorney general said the funds came from
Saudi Arabia. The office said the Journal's reporting was part of
an opposition campaign to unseat Mr. Najib.
"The Wall Street Journal has become a willing vehicle for certain
political actors who are seeking to damage the Prime Minister and
Malaysia for personal gain," the statement said. "But this
politically motivated Anti-Najib Campaign, which sought to use
Western media, has failed."
The 1MDB fund declined to comment for this article. Also after
this story's publication 1MDB in a statement repeated its
statement from Feb. 19 that it "has not paid any funds to the
personal accounts of the Prime Minister."
The fund also pointed out that the attorney general said the
deposits came from Saudi Arabia. "Despite this, the Wall Street
Journal continues to repeat the same disproven allegations," the
statement said.
The newspaper's reliance on anonymous sources, "who may or may not
exist, betrays a lack of basic journalistic standards on the part
of the Wall Street Journal and the fact that the publication has
lost all semblance of balanced reporting," the 1MDB fund's
statement, as cited by the Journal, said.
A spokeswoman for Dow Jones, which owns the Journal, said, "We
continue to stand behind our fair and accurate reporting of this
evolving story."
Malaysia's attorney general, Mohamed Apandi Ali, didn't respond to
requests for comment, adds the Journal.
About 1MDB
Kuala Lumpur-based 1Malaysia Development Bhd (1MDB) operates as a
government agency. The Company offers financial assistance,
analysis, and advice through investors, corporations, and
consultants to startups and growth companies. 1MDB focuses on
investments with strategic value and high multiplier effects on
the economy, particularly in energy, real estate, tourism, and
agribusiness.
As reported in the Troubled Company Reporter-Asia Pacific on
July 23, 2015, Reuters said Singapore Police Force has frozen two
bank accounts to help with an investigation in to Malaysia's
troubled state-owned investment fund 1Malaysia Development Bhd
(1MDB), which is being probed by authorities in Malaysia for
financial mismanagement and graft. Reuters said the freezing of
the Singapore bank accounts follows a similar move in Malaysia
where a task force investigating 1MDB said earlier in July that it
had frozen half a dozen bank accounts following a media report
that nearly $700 million had been transferred to an account of
Malaysia's Prime Minister Najib Razak.
The Wall Street Journal reported on July 3, 2015, that
investigators looking into 1MDB had traced close to US$700 million
of deposits moving through Falcon Bank in Singapore into personal
bank accounts in Malaysia belonging to Najib, Reuters related.
The TCR-AP, citing Bloomberg News, reported on Nov. 26, 2015, that
1MDB agreed to sell its power assets to China General Nuclear
Power Corp. for MYR9.83 billion ($2.3 billion) as the state
investment company moved one step closer to winding down
operations after its mounting debt raised investor concern.
Bloomberg related that the company faced cash-flow problems after
a planned initial public offering of Edra faced delays amid
unfavorable market conditions, President Arul Kanda said Oct. 31,
2015. The listing plan was later canceled as the company opted
for a sale of the assets, Bloomberg noted.
====================
N E W Z E A L A N D
====================
KAIZUKA LIMITED: Bar in Voluntary Liquidation
---------------------------------------------
Nick Truebridge at Stuff.co.nz reports that the Christchurch bar
that closed on Feb. 28 following a stoush with the city council is
in liquidation.
Stuff.co.nz relates that the owners of Cashmere establishment
Kaizuka Eatery and Garden Bar closed the doors with a "bitter
taste" in their mouths on Feb. 28, blaming a battle with the
council.
The council ruled the bar needed an additional 21 car parks to
comply with the City Plan.
On March 3 co-owner Dwayne Vaughan confirmed the company had been
placed in voluntary liquidation after receiving legal advice to do
so.
"Council has still been our number one problem. It's affected
everything," the report quotes Mr. Vaughan as saying.
He was "hoping" all creditors would be paid back in full.
Asked about the financial state of his company, Mr. Vaughan said
he and his wife, co-owner Tiffany Vaughan, had been propping the
business up for seven years, Stuff.co.nz relays.
"We would be the biggest creditors by about 20 times. We could
keep throwing money in, but there's no point," he said. "We
couldn't actually sell because we don't have a planning consent
[for the car parks needed]."
According to Stuff.co.nz, liquidator Grant Reynolds said the
Vaughans had poured in the vicinity of NZ$700,000 to NZ$800,000 in
"advances that they've made to the company".
He said it was too early to know how many creditors were affected
by the company's liquidation. However, he had established about
NZ$100,000 was owed to secured creditors, Stuff.co.nz relays.
"We are sort of working through those issues now . . . one of the
main issues is the building. I've just been made aware it's being
demolished," Stuff.co.nz quotes Mr. Reynolds as saying.
The building, which is not owned by the Vaughans, suffered
earthquake damage in 2011, but no decisions had been made about
the building's future, Stuff.co.nz states.
He said the Vaughans had been "looking at getting repairs done,
which were instantly going to make them close down for three
months, Stuff.co.nz relays.
"They weren't going to be able to trade," Reynolds said.
According to Stuff.co.nz, Mr. Vaughan said the company had also
taken a hit after being ordered by the Employment Relations
Authority to pay a former employee.
Kaizuka Limited was ordered to pay Evelyn Michalewska NZ$30,000
after she was dismissed in April 2014 for speaking to other staff
about her dream of opening her own cafe.
SLEEP OVERS: Placed into Receivership
-------------------------------------
Cliff Sanderson at Dissolve.com.au reports that Sleep Overs Ltd
has been placed into receivership on February 4. Andrew Hawkes of
KPMG has been appointed receiver of the company, the report says.
Dissolve.com.au relates that this development has resulted in
Evergreen Lodge and Remarkable Mountain Lodge being put up for
sale.
The lodges are expected to continue to trade while being marketed
by Bayleys Queenstown in a tender process, adds Dissolve.com.au.
=================
S I N G A P O R E
=================
SINGAPORE: 43 Mainboard Companies to be Placed on SGX Watch-List
----------------------------------------------------------------
Channel News Asia reports that a total of 41 mainboard companies
will be placed on the Singapore Exchange's (SGX) watch-list
starting March 3 because they do not comply with the minimum
trading price (MTP) requirement of 20 cents per share for
mainboard companies, the bourse said on March 2.
Additionally, two other companies were also added to the watch-
list on March 3 because they triggered the financial entry
criteria, which entails pre-tax losses for three most recently
completed financial years and an average daily market
capitalisation of less than S$40 million over the last six months,
the news agency relates.
Before March 2, the watch-list already had 33 companies on it
because they had triggered the financial entry criteria, SGX said
in the news release, the report relays. Of these, 16 were not
compliant with the MTP rule.
According to CNA, SGX said companies placed on the watch-list then
have three years to carry out actions to improve their share price
if they are non-compliant with the MTP, or improve their financial
performance if they triggered the financial entry criteria.
The report relates that Head of Listing Compliance at SGX June Sim
said companies placed on the watch-list should focus on improving
their fundamentals and financial performance during this period.
"Putting these companies on a watch-list increases transparency
for investors, enabling them to more easily monitor the companies
they have invested in," the report quotes Ms Sim as saying.
Since the introduction of the watch-list effective March 2008, a
significant number of companies were able to improve their
financial performance and exit the watch-list, Ms Sim, as cited by
CNA, added.
CNA meanwhile reports that the Securities Investors Association
(Singapore) said that such a watch-list makes it easier for
investors to monitor their investments.
"It's an indication of the company's financial position and its
performance as well as its inability to maintain the required
minimum price. That sends a signal to investors on the state of
affairs and it puts a sense of urgency to the company to act," the
report quotes the association's president and CEO David Gerald as
saying. "We need to maintain the quality in the market (and) we
need to maintain the minimum price, for better governance and to
give assurance to investors."
In a teleconference, SGX said it gives companies enough time to
exit the watch-list should they meet the criteria, adds CNA.
The report relates that Mr Chew Sutat, head of equities and fixed
income at SGX, said: "It is of ample opportunity for companies to
actually be able to come out of the watch-list, and past
experience does show that about a third of watch-list companies
eventually exit because they are able to meet the requirements
they need to comply with."
According to SGX, the companies on the watch-list account for
about 0.3 per cent of the mainboard market capitalisation, and 0.4
per cent of trading turnover, CNA relays.
SGX also gave an update, saying that a total of 69 companies were
granted an extension till Sep 1 this year, to comply with the MTP
requirement. These companies were given an extension as most had
already started on corporate action to reach the MTP but either
had not completed it yet or were affected by recent market
volatility, adds CNA.
================
S R I L A N K A
================
BANK OF CEYLON: Fitch Lowers IDR to 'B+'; Outlook Negative
----------------------------------------------------------
Fitch Ratings has downgraded the Issuer Default Ratings of Bank of
Ceylon and National Savings Bank (NSB) to 'B+' from 'BB-' and
downgraded the IDRs of People's Leasing & Finance PLC's (PLC) IDRs
to 'B' from 'B+'. The IDRs of DFCC Bank PLC (DFCC) were affirmed
at 'B+'. The Outlooks on all the IDRs are Negative to reflect the
Negative Outlook on the sovereign.
Fitch took the rating actions after it downgraded the Sri Lankan
sovereign to 'B+' from 'BB-' and assigned a Negative Outlook on
Feb. 29, 2016.
Fitch has also assigned Recovery Ratings of 'RR4' to the US dollar
senior unsecured notes issued by BOC and NSB to reflect average
recovery prospects. At the same time Fitch affirmed the Recovery
Rating on DFCC's US dollar senior unsecured notes at 'RR4'. The
National Ratings of BOC, NSB, DFCC and PLC have not been reviewed
at this time.
Fitch maintains a stable sector outlook for the Sri Lankan banking
sector for 2016 as Fitch do not expect the sector's credit profile
to deteriorate materially even though operating conditions could
become more challenging. The operating environment remains a key
rating driver for the Sri Lankan banking sector given its
potential volatility.
KEY RATING DRIVERS
IDRS, VRS AND SENIOR DEBT
The downgrades of the IDRs on BOC and NSB are driven by the
state's reduced ability to provide support while Fitch's
expectation of the state's propensity to provide support remains
unchanged.
Fitch expects the state to extend support to BOC because of its
high systemic importance, quasi-sovereign status, role as a key
lender to the government and full government ownership. The state
is likely to provide support for NSB because of its policy mandate
of mobilizing retail savings and primarily investing them in
government securities. The ratings of all foreign-currency
denominated senior debt issued by BOC and NSB have been downgraded
by one notch to reflect the downgrades of the IDRs.
BOC's Viability Rating (VR) is at the same level as its support-
driven IDR. The VR captures its thin capitalization and weak
asset quality, which are counterbalanced by its strong domestic
funding franchise that is underpinned by its state linkages.
Fitch has not assigned a VR to National Savings Bank as it is a
policy bank.
PLC's ratings continue to reflect Fitch's view that its parent,
the state-owned and systemically important People's Bank (Sri
Lanka) (AA+(lka)/Stable), has a high propensity but limited
ability to provide extraordinary support to PLC, if required.
People's Bank's propensity to support PLC remains unchanged and
stems from its 75% shareholding in PLC, their common brand and
PLC's position as a strategic subsidiary of the bank. People's
Bank's reduced ability to provide support is reflected in the
sovereign's rating.
DFCC's IDRs are driven by its intrinsic strength as indicated by
its 'b+' VR. The Negative Outlook, however, reflects Fitch's
approach of generally capping bank ratings at the sovereign rating
level due to the likely adverse impact on its credit profile from
the Sri Lankan sovereign's deteriorating credit profile and
increasing risks in the domestic operating environment. DFCC's VR
captures its adequate capitalization and developing commercial
banking franchise.
The ratings on DFCC's senior debt have been affirmed in line with
the affirmation of the bank's Long-Term Foreign-Currency IDRs as
the notes rank equally with the bank's other senior unsecured
obligations.
SUPPORT RATINGS AND SUPPORT RATING FLOORS
The downgrade of the Support Ratings (SRs) and Support Rating
Floors (SRFs) of BOC and NSB follows the downgrade of the
sovereign's ratings as this indicates the state's reduced ability
to provide support and consequently, limited probability that
timely support would be extended to the banks. This is despite
Fitch's expectation of the government's propensity to provide
support to the banks has not reduced given their high importance
to the government and high systemic importance.
The SR of DFCC has been affirmed at '4' to reflect its moderate
size and systemic significance and linkages with the sovereign
through indirect ownership. The bank continues to have a lower
SRF of 'B' relative to state-owned and more systemically important
banks.
RATING SENSITIVITIES
IDRS, VRS AND SENIOR DEBT
Any changes in Sri Lanka's sovereign rating or the perception of
state support to BOC could result in a change in its IDRs.
Further deterioration in the operating environment that is
reflected in the decline in the bank's key credit metrics could
also negatively affect the Viability Rating (VR) of BOC. BOC's
IDRs would be downgraded only if Fitch were to downgrade its VR
and Support Rating Floor (SRF).
Similarly for NSB, the expectation of state support remains the
primary rating driver, and as such any change in Sri Lanka's
sovereign rating or the perception of state support to NSB could
result in a change in its IDRs.
An upgrade of DFCC's ratings would be contingent on a materially
stronger commercial banking franchise while maintaining strong
credit metrics. However, DFCC's ratings are unlikely to be
upgraded to higher than the sovereign rating. DFCC's ratings
could be downgraded if there is a sustained and substantial
increase in risk appetite that could materially weaken its capital
position. Further deterioration in the operating environment
could also negatively affect the ratings.
PLC's IDRs will be sensitive to changes in the sovereign rating,
which reflects People's Bank's ability to provide support to its
subsidiary. PLC's ratings are also sensitive to People's Bank's
propensity to provide support due to changes in PLC's strategic
importance to its parent.
The assigned senior debt ratings are primarily sensitive to
changes in the entities' Long-Term IDRs.
The Recovery Ratings are sensitive to Fitch's assessment of
potential recoveries for creditors in case of default/non-
performance.
SUPPORT RATINGS AND SUPPORT RATING FLOORS
The banks' Support Ratings and SRFs are sensitive to the
sovereign's ability and propensity to provide support, as
expressed in any change in the sovereign ratings of Sri Lanka.
The rating actions are:
BOC:
Long-Term Foreign-Currency IDR downgraded to 'B+' from 'BB-';
Outlook Negative
Long-Term Local-Currency IDR downgraded to 'B+' from 'BB-';
Outlook Negative
Short-Term Foreign-Currency IDR affirmed at 'B'
Viability Rating affirmed at 'b+'
Support Rating downgraded to '4' from '3'
Support Rating Floor revised to 'B+' from 'BB-'
US dollar senior unsecured notes downgraded to 'B+' from 'BB-';
Recovery Rating assigned at 'RR4'
National Savings Bank:
Long-Term Foreign-Currency IDR downgraded to 'B+' from 'BB-';
Outlook Negative
Long-Term Local-Currency IDR downgraded to 'B+' from 'BB-';
Outlook Negative
Short-Term Foreign-Currency IDR affirmed at 'B'
Support Rating downgraded to '4' from '3'
Support Rating Floor revised to 'B+' from 'BB-'
US dollar senior unsecured notes downgraded to 'B+' from 'BB-';
Recovery Rating assigned at 'RR4'
DFCC:
Long-Term Foreign-Currency IDRs affirmed at 'B+'; Outlook
Negative
Long-Term Local-Currency IDRs affirmed at 'B+'; Outlook Negative
Short-Term Foreign-Currency IDR affirmed at 'B'
Viability Rating affirmed at 'b+'
Support Rating affirmed at '4'
Support Rating Floor affirmed at 'B'
US dollar senior unsecured notes affirmed at 'B+'; Recovery
Rating affirmed at 'RR4'
People's Leasing & Finance PLC:
Long-Term Foreign-Currency IDR downgraded to 'B' from 'B+';
Outlook Negative
Long-Term Local-Currency IDR downgraded to 'B' from 'B+';
Outlook Negative
SRILANKAN AIRLINES: Fitch Lowers Rating on Bonds to B+
------------------------------------------------------
Fitch Ratings has downgraded the rating on SriLankan Airlines
Limited's (SLA) US dollar-denominated government-guaranteed bonds
to 'B+' from 'BB-'.
This follows the downgrade of Sri Lanka's Long-Term Foreign and
Local-Currency Issuer Default Ratings to 'B+' with a Negative
Outlook. The national carrier's bonds are rated at the same level
as SLA's parent, the state of Sri Lanka, due to the unconditional
and irrevocable guarantee provided by the state.
KEY RATING DRIVERS
The Sri Lankan sovereign faces increased refinancing risks on
account of high upcoming external debt maturities amid the
country's vulnerability to a shift in investor sentiment.
Furthermore, the sovereign's external liquidity position remains
strained, reflecting pressure on foreign-exchange reserves. The
recent downgrade also reflects deteriorating public finances
driven partly by consistently low general government revenues.
Government has identified tourism as a key economic growth driver
in the medium term, and state support for SLA reflects its
strategic importance as the leading airline to drive growth in the
tourism sector. Tourist arrivals to Sri Lanka rose to 1.8 million
in 2015 from 1.0 million in 2012.
The state held 99.5% of SLA through direct and indirect holdings
at end-2015.
RATING SENSITIVITIES
Developments that may, individually or collectively, lead to
negative rating action would include a downgrade of the Sri Lankan
sovereign. Conversely, positive rating action could follow an
upgrade of the sovereign.
SRI LANKA INSURANCE: Fitch Cuts IFS Rating to 'B+'; Outlook Neg.
----------------------------------------------------------------
Fitch Ratings has downgraded the Insurer Financial Strength rating
of Sri Lanka Insurance Corporation to 'B+' from 'BB-'. The
Outlook is Negative.
The rating actions follow the downgrade of Sri Lanka's Long-Term
Local-Currency Issuer Default Rating (IDR) to 'B+' from 'BB-'. A
Negative Outlook was also assigned to the ratings. SLIC's IFS is
now constrained by Sri Lanka's Long-Term Local-Currency IDR.
The National Ratings of SLIC have not been reviewed at this time.
KEY RATING DRIVERS
In selected cases, Fitch would allow insurers with very strong
credit profiles, coupled with sizeable international business
diversification, to exceed the sovereign rating. However, SLIC
business is concentrated in Sri Lanka and as a result, its rating
is constrained by the rating of the sovereign.
SLIC's ratings reflect its well-established franchise and market
position in Sri Lanka, 99.9% state ownership, and its importance
to the government as the largest state-owned insurer.
RATING SENSITIVITIES
A downgrade of Sri Lanka's ratings will lead to a downgrade of
SLIC's Insurer Financial Strength rating.
Conversely, if the Outlook on the sovereign rating is revised to
Stable and or the sovereign rating is upgraded in the future, and
the constraints relieved, Fitch would take a similar rating action
on SLIC.
The IFS rating may also be downgraded if there is:
-- Significant weakening in SLIC's market position,
-- Deterioration in the non-life combined ratio to above 100%
on a sustained basis,
-- Weakening in SLIC's importance to the government, increased
pressure from the state for higher dividend payouts or a
significant increase in non-core investments.
SRI LANKA TELECOM: Fitch Lowers IDR to 'B+'; Outlook Negative
-------------------------------------------------------------
Fitch Ratings has downgraded Sri Lanka Telecom PLC's Long-Term
Foreign- and Local-Currency Issuer Default Ratings to 'B+' from
'BB-'. The Outlook on the IDRs is Negative. The agency has
affirmed SLT's National Long-Term Rating at 'AAA(lka)' with a
Stable Outlook.
The rating action follows Fitch's downgrade of Sri Lanka's Long-
Term Foreign- and Local-Currency IDRs to 'B+' from 'BB-' and
assignment of a Negative Outlook.
SLT's IDRs are constrained by Sri Lanka's IDRs as the government
directly and indirectly holds a majority stake in SLT and exercise
significant influence on its operating and financial profile.
Also, SLT's second-biggest shareholder, Malaysia's Usaha Tegas -
which owns 44.9% of SLT - does not have any special provisions in
its shareholder agreement to dilute the government's significant
influence over SLT.
KEY RATING DRIVERS
Recurring Taxes Scrapped: We revised the outlook on Sri-Lanka's
telco sector to stable from negative on 18 January 2016 following
the new government budget, which scrapped the recurring taxes that
could have diluted the industry's EBITDA margin significantly.
Fitch believes that SLT's standalone credit profile will remain
strong despite a gradual increase in FFO-adjusted net leverage
during 2016-2018 (2015: 1.2x). SLT's current ratings have
sufficient headroom to absorb a small decline in profitability and
small FCF deficits on high capex requirements.
Acquisition Risk: SLT's National Rating could be threatened if it
were to do a debt-funded acquisition of a smaller operator.
However, a rating action would depend on the acquisition price,
funding mix and forecast financial profile of the combined entity.
Fitch believe that SLT could acquire one of the two unprofitable
operators willing to exit the industry. Hutchison Lanka and
Bharti Airtel Limited's (BBB-/Stable) Sri Lankan subsidiary,
Airtel Lanka, are struggling to gain market share and could sell
their operations. The international ratings have sufficient
headroom to absorb any acquisition.
Solid Market Position: SLT's ratings are underpinned by its
market-leading position in fixed-line, second-largest position in
the mobile market and its ownership of a large optical fibre
network. SLT's market position will strengthen as it plans to
expand its mobile and fibre infrastructure. Fitch also believes
that the industry will consolidate, with two telcos exiting during
2016-17 to leave three remaining operators.
Mild Profit Dilution: Fitch forecasts SLT's EBITDA margin to
narrow by 50bp each year during 2016-17 as rising fixed-broadband
and mobile internet usage will only partly offset margin dilution
due to a change in revenue mix and higher international telecom
taxes. SLT's EBITDA margin will narrow as less profitable data
revenue replaces more profitable fixed-voice and international
revenue. The government budget announced in January 2016 doubled
the international telco levy to USD0.06 per minute from USD0.03.
Fitch also forecasts SLT's 2016 revenue to rise by mid-single-
digit percentage driven mainly by mobile data and fixed-broadband
services.
Negative FCF to Continue: Fitch forecasts SLT to have negative FCF
during 2016-2018 as cash flow from operations will not be enough
to fund its ongoing large capex plan. SLT will continue to invest
about 28%-30% of its revenue in capex each year to expand its
optical fibre infrastructure and 3G/4G mobile networks. Dividends
are likely to remain similar to the historical levels at LKR1.5bn-
1.6bn.
KEY ASSUMPTIONS
Fitch's key assumptions within its rating case for the issuer
include:
-- Revenue to rise by mid-single-digit driven by fixed-
broadband and mobile data services.
-- Operating EBITDAR margin to dilute by about 50bp in 2016-
2017.
-- Capex/revenue to remain high around 28%-30% as SLT expands
it fibre and 3G/4G networks.
-- FCF deficit during 2016-2018 resulting in gradual increase
in FFO-adjusted net leverage.
RATING SENSITIVITIES
Negative: Future developments that may individually, or
collectively, lead to negative rating action include:
-- A downgrade in the rating on the Sri Lanka sovereign
(B+/Negative) will result in a corresponding action
on SLT's IDRs.
-- A debt-funded acquisition of a smaller operator could
threaten SLT's National Long-Term Rating, depending on the
acquisition price and the financial profile of the combined
entity.
Positive: Future developments that may individually or
collectively lead to the Outlook on SLT's IDRs being revised to
Stable include:
-- A revision in Sri Lanka's Outlook to Stable from Negative.
-- An upgrade of Sri Lanka's IDRs will result in a
corresponding action on SLT's IDRs.
-- A weakening of links between SLT and the sovereign could
result in SLT's Local-Currency IDR being upgraded above Sri
Lanka's Local-Currency IDR of 'B+'. However, SLT's
Foreign-Currency IDR will remain constrained by the Country
Ceiling of 'B+'.
LIQUIDITY
Liquidity was adequate at end-2015, with cash and equivalents
along with committed undrawn bank lines comfortably covering its
short-term debt.
*********
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 ***