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T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Wednesday, March 9, 2016, Vol. 19, No. 48
Headlines
A U S T R A L I A
BANK MANSION: First Creditors' Meeting Set For March 15
INDUSTRIAL BLASTING: First Creditors' Meeting Set For March 17
K-BAR & MEZE: Owner Admits Not Paying Wages to Staff
LIBERTY FUNDING: Moody's Assigns B2 Rating to Class F Notes
LINK ELECTRICAL: First Creditors' Meeting Set For March 17
LINK ENGINEERING: First Creditors' Meeting Set For March 17
MIDDLEBROOK ESTATE: Director Jailed for Not Assisting Liquidator
C H I N A
* Prolonged Fall in Oil Means Weaker Global Growth, Moody's Says
I N D I A
AD MERCHANT: CRISIL Upgrades Rating on INR25MM Cash Loan to B+
ALAM CONSTRUCTIONS: CARE Reaffirms B+ Rating on INR6cr LT Loan
ALLIANCE INDUSTRIAL: Ind-Ra Suspends 'IND BB' LT Issuer Rating
ANANTHA PVC: CARE Reaffirms B Rating on INR8cr LT Loan
B.R. OIL: Ind-Ra Assigns 'IND BB' Long-Term Issuer Rating
BEST FOODS: CRISIL Lowers Rating on INR15BB Cash Loan to 'D'
BIOPAC INDIA: Ind-Ra Withdraws IND B(suspended) LT Issuer Rating
CANON ENGINEERING: Ind-Ra Assigns IND B+ Long-Term Issuer Rating
CAREER COACHING: CRISIL Assigns 'D' Rating to INR100MM Term Loan
CHETAN INDUSTRIES: Ind-Ra Suspends 'IND BB' LT Issuer Rating
CONN APPLIANCES: Fitch Expects to Rate Class B Notes at BBsf(EXP)
CONSOLIDATED CONST'N: CARE Reaffirms INR1,077.9cr Loan D Rating
DATTAKALA SHIKSHAN: CRISIL Assigns 'D' Rating to INR175MM Loan
DHARIYA CONSTRUCTION: CRISIL Assigns B- Rating to INR80MM Loan
DRD TRUCKS: Ind-Ra Withdraws 'IND BB-' Long-Term Issuer Rating
FABWORTH PROMOTERS: CARE Revises Rating on INR400cr Loan to BB-
GOPI TEXFAB: CARE Reaffirms B+/A4 Rating on INR5.5cr Loan
GR POWER: CARE Assigns 'B+' Rating to INR22cr LT Loan
HYCONS INFRASTRUCTURES: Ind-Ra Withdraws 'IND BB-' Issuer Rating
K2 METALS: ICRA Assigns 'B' Rating to INR5cr Term Loan
K. G. ISPAT: CARE Assigns B+ Rating to INR4cr LT Loan
KINGFISHER AIRLINES: Banks Ask Court to Stop Mallya From Leaving
KLT AUTOMOTIVE: Ind-Ra Withdraws 'IND BB+' LT Issuer Rating
LEZORA VITRIFIED: CARE Reaffirms 'B+' Rating on INR32cr LT Loan
LIBERTY MARKETING: Ind-Ra Suspends 'IND B+' LT Issuer Rating
M.T. PATIL: Ind-Ra Assigns 'IND BB' Long-Term Issuer Rating
MAHALAXMI OILMILL: CARE Assigns B+ Rating to INR6.03cr LT Loan
MAJESTIC BASMATI: CARE Assigns 'B+' Rating to INR37.63cr Loan
MANORAMA HOSPITEX: ICRA Assigns 'D' Rating to INR11.40cr Loan
MARIGOLD CONSTRUCTIONS: CRISIL Cuts Rating on INR98.4MM Loan to D
MATHIYAN CONSTRUCTION: ICRA Revises Rating on INR10cr Loan to B-
MINERVA POULTRY: CARE Reaffirms 'B' Rating on INR6.02cr Loan
MINEX INDIA: CRISIL Reaffirms 'D' Rating on INR90MM Cash Loan
MIR BUILDERS: CRISIL Assigns B+ Rating to INR180MM LT Loan
NEXT RETAIL: Ind-Ra Withdraws 'IND BB+' Long-Term Issuer Rating
NIMRA EDUCATIONAL: ICRA Assigns 'D' Rating to INR35cr Loan
RAJVIR INDUSTRIES: CRISIL Cuts Rating on INR547.2MM Loan to 'D'
RANGA RAJU: CRISIL Reaffirms B+ Rating on INR180MM Cash Loan
RANI AQUA: CARE Reaffirms B+ Rating on INR15.67cr LT Loan
RATAN SEEDS: Ind-Ra Suspends 'IND B' Long-Term Issuer Rating
RENEWSYS INDIA: Ind-Ra Assigns 'IND BB+' Long-Term Issuer Rating
RIONA LAMINATES: ICRA Suspends 'B' Rating on INR5.01cr Loan
SANCO INDUSTRIES: Ind-Ra Assigns IND BB- Long-Term Issuer Rating
SATGURU AGRO: CARE Assigns 'B' Rating to INR20.50cr Loan
SHAKTI INDIA: Ind-Ra Suspends 'IND B+' Long-Term Issuer Rating
SHANKARANARAYAN JEWELLERS: ICRA Rates INR0.75cr LT Loan at B-
SHREE GANESH: Ind-Ra Suspends 'IND BB' Long-Term Issuer Rating
SHREE NATH: CRISIL Assigns 'B+' Rating to INR49.8MM Loan
SRI V. N. S.: ICRA Reaffirms C+ Rating on INR12.57cr Loan
TEMPLE CITY: CRISIL Reaffirms 'D' Rating on INR95MM Cash Loan
TERACOM LIMITED: CRISIL Suspends D Rating on INR2.77BB LOC
TOSHNIWAL INDUSTRIES: CRISIL Assigns 'B' Rating to INR80MM Loan
TULIP TELECOM: ICRA Reaffirms 'D' Rating on INR150cr Loan
TULSA GAS: CRISIL Reaffirms B+ Rating on INR40MM LT Loan
VASWANI INDUSTRIES: Ind-Ra Assigns 'IND BB+' LT Issuer Rating
VATIKA AGRITECH: Ind-Ra Suspends 'IND B+' Long-Term Issuer Rating
VEDANTA RESOURCES: Moody's Lowers CFR to B2; Outlook Negative
VIRENDRA KUMAR: ICRA Reaffirms 'B+' Rating on INR4cr Cash Loan
VISHAL FABRICS: Ind-Ra Suspends 'IND BB+' Long-Term Issuer Rating
J A P A N
TOSHIBA CORP: To Narrow Down Medical Unit's Possible Buyers
N E W Z E A L A N D
SOLID ENERGY: 41 Jobs Axed at Firm's West Coast Mine
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A U S T R A L I A
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BANK MANSION: First Creditors' Meeting Set For March 15
-------------------------------------------------------
Gideon Isaac Rathner of Lowe Lippmann was appointed as
administrator of Bank Mansion Pty Ltd on March 3, 2016.
A first meeting of the creditors of the Company will be held at
Level 7, 616 St Kilda Road, in Melbourne, on March 15, 2016, at
11:00 a.m.
INDUSTRIAL BLASTING: First Creditors' Meeting Set For March 17
--------------------------------------------------------------
Brent Kijurina, David Ross and Richard Albarran of Hall Chadwick
were appointed as administrators of Industrial Blasting & Coatings
Pty Ltd on March 4, 2016.
A first meeting of the creditors of the Company will be held at
Quest Whyalla, 4 Moran Street, in Whyalla, on March 17, 2016, at
11:00 a.m.
K-BAR & MEZE: Owner Admits Not Paying Wages to Staff
----------------------------------------------------
Jack Harbour at Gold Coast Bulletin reports that the owner of a
popular Mermaid Beach eatery has admitted owing thousands in
unpaid staff wages after business took a dive in late 2015.
The Bulletin relates that former K-Bar & Meze manager Andy Yang
said business owner Tobias Diamandopoulos shut the venue for
renovations on January 31, allegedly owing a handful of staff more
than AUD10,000 in wages dating back to December. But
Mr. Diamandopoulos said he only owed about AUD7,000 after an
unprecedented drop in business in late 2015.
He admitted he had been contacted by Fair Work Ombudsman
investigators over the pay dispute but said he hoped to have
finance to pay his staff soon, according to the Bulletin.
"I'm still waiting on some financing to come through to fix
everybody up before we reopen. I've still got the last week of
trading to pay a couple of staff out. I've got about one more pay
run to do -- it would be about AUD7,000 all up," the report quotes
Mr. Yang as saying. "I've been promised financing since the day I
closed but I'm hoping to have everything squared by the end of the
week. There was a downturn in business and . . . the overheads
were costing a lot of money. We realised we had to rejig a few
things and come up with a better, more profitable concept."
The Bulletin says a spokeswoman for the Fair Work Ombudsman
confirmed K-Bar was under investigation.
"I . . . can confirm that the Fair Work Ombudsman's investigation
into a company trading as K & K Mermaid Beach Pty Ltd is ongoing,"
she said, notes the report. "As such, it is not appropriate to
comment further at this time."
Mr Diamandopoulos said he hoped to have the matter resolved
quickly, adds the Bulletin.
LIBERTY FUNDING: Moody's Assigns B2 Rating to Class F Notes
-----------------------------------------------------------
Moody's Investors Service has assigned these provisional ratings
to notes to be issued by Liberty Funding Pty Ltd:
Issuer: Liberty Funding Pty Ltd in respect of the Liberty Series
2016-1
AUD40.0 million Class A1a Notes, Assigned (P)Aaa (sf)
AUD176.0 million Class A1b Notes, Assigned (P)Aaa (sf)
AUD42.0 million Class A2 Notes, Assigned (P)Aaa (sf)
AUD21.9 million Class B Notes, Assigned (P)Aa2 (sf)
AUD4.8 million Class C Notes, Assigned (P)A2 (sf)
AUD5.1 million Class D Notes, Assigned (P)Baa2 (sf)
AUD3.9 million Class E Notes, Assigned (P)Ba2 (sf)
AUD3.3 million Class F Notes, Assigned (P)B2 (sf)
The AUD 3.0 million Class G Notes are not rated by Moody's.
The ratings address the expected loss posed to investors by the
legal final maturity. The structure allows for timely payment of
interest and ultimate payment of principal by the legal final
maturity.
RATINGS RATIONALE
The transaction is an Australian prime and non-conforming RMBS
secured by a portfolio of residential mortgage loans. A portion
of the portfolio consists of loans extended to borrowers with
impaired credit histories (9.6%) or made on a limited
documentation basis (10.8%).
This is the 18th non-conforming RMBS transaction sponsored by
Liberty Financial Pty Ltd ("Liberty").
The ratings take account of, among other factors:
-- Class A1a and Class A1b Notes benefit from 28.0% credit
enhancement (CE) and Class A2 Notes benefit from 14.0% CE,
while Moody's MILAN CE assumption, the loss Moody's expects
the portfolio to suffer in the event of a severe recession
scenario, is at 14.0%. Moody's expected loss for this
transaction is 1.4%. The subordination strengthens ratings
stability, should the pool experience losses above
expectations.
-- A liquidity facility provided by National Australia Bank
Limited, with a required limit equal to 3.6% of the
aggregate invested amount of the notes less the redemption
fund balance. The facility is subject to a floor of
AUD600,000. If the facility provider loses its P-1(cr), it
must within 30 days either: (1) Procure a replacement
facility provider; or (2) Deposit an amount of the undrawn
liquidity commitment at the time into an account with P-1
rated bank.
-- The guarantee fee reserve account. The reserve account is
unfunded at closing and will build up to a limit of 0.40%
of the issued notional from proceeds paid to Liberty Credit
Enhancement Company Pty Limited as Guarantor, from the
bottom of the interest waterfall prior to interest paid to
the Class G noteholders. The reserve account will firstly
be available to meet losses on the loans and charge-offs
against the notes. Secondly, it can be used to cover any
liquidity shortfalls that remain uncovered after drawing on
the liquidity facility and principal. Any reserve account
balance used can be reimbursed to its limit from future
excess income.
-- The experience of Liberty in servicing residential mortgage
portfolios. This is Liberty's 18th non-conforming
securitization, which highlights the lender's experience as
a manager and servicer of securitized transactions.
-- Interest rate mismatch arises when the movements of the 30-
day BBSW are not (simultaneously) passed on to the variable
rate loans. To mitigate the basis risk, the threshold rate
mechanism obligates the Servicer to set interest rates on
the mortgage loans at a minimum rate above 1mBBSW, or
higher if the trust's income is insufficient to cover the
obligations of the Trustee under the transaction documents.
The key transactional and pool features are:
-- The notes will initially be repaid on a sequential basis
(however Class A1b and Class A2 Notes will be pari passu)
until, amongst other stepdown conditions, the later of: (1)
the second anniversary from closing; or (2) the
subordination to the Class A & Class B Notes doubling from
closing. Upon satisfaction of all stepdown conditions,
Class A1b, Class A2, Class B, Class C, Class D, Class E,
and Class F Notes will receive a pro-rata share of
principal payments (subject to additional conditions). The
Class A1a Notes will always receive principal payments
ahead of any other Notes. The Class G Notes do not step
down and will only receive principal payments once all
other notes have been repaid.
-- The principal pay-down switches back to sequential pay
across all notes (Class A1b to be senior to Class A2), once
the aggregate loan amount falls below 20% of the aggregate
loan amount at closing, or following the fourth anniversary
of the closing date.
-- The weighted average current loan to value ratio of the
pool of 71.86%.
-- The pool has only 10.51 months seasoning. As a result, the
portfolio is carrying a large exposure to loans originated
in 2014 and 2015 (13.51% & 73.36% respectively), a
historically low interest rate and increasing property
value environment. These loans will be more exposed to
interest rate rises and affordability issues than more
seasoned pools. Liberty stresses interest rates at 2%
above standard variable rates to test serviceability in a
higher interest rate environment. Moody's analysis
incorporates a house price stress rate of 41.81% to
determine portfolio losses in a severe economic downturn.
-- The portfolio is geographically well diversified due to
Liberty's wide distribution network.
-- The portfolio contains 9.6% exposure with respect to
borrowers with prior credit impairment (default, judgement
or bankruptcy). Moody's assesses these borrowers as having
a significantly higher default probability.
-- 10.8% of loans in the portfolio were extended to borrowers
on a limited documentation basis. Of the 10.8% low
documentation loans, 99.0% are classified as 'alternative
documentation'. For these alternative documentation loans
Liberty performs additional verification checks over and
above the typical checks for a traditional low
documentation product. These checks include a declaration
of financial position and six months of bank statements, 2
quarters of Business Accounting Statements or GST returns.
Liberty's alternative documentation loans have stronger
arrears performance when compared to traditional low
documentation loans. Given the additional verification
checks and the stronger arrears performance, these
alternative documentation loans have been assessed to have
a lower default frequency than standard low documentation
loans.
-- 24.1% of the loans in the portfolio were extended to self-
employed borrowers. Moody's analysis of historical
delinquency and default data has indicated that loans
granted to self-employed borrowers have a greater
propensity to default compared to loans granted to employed
PAYG borrowers.
Methodology Underlying the Rating Action:
The principal methodology used in these ratings was "Moody's
Approach to Rating RMBS Using the MILAN Framework" published in
January 2015.
Factors that would lead to an upgrade or downgrade of the ratings:
Levels of credit protection that are greater than necessary to
protect investors against current expectations of loss could lead
to an upgrade of the rating. Moody's current expectations of loss
could be better than its original expectations because of fewer
defaults by underlying obligors or higher recoveries on defaulted
loans. The Australian job market and the housing market are
primary drivers of performance.
A factor that could lead to a downgrade of the notes is worse-
than-expected collateral performance. Other reasons for
performance worse than Moody's expects include poor servicing,
error on the part of transaction parties, a deterioration in
credit quality of transaction counterparties, fraud and lack of
transactional governance.
Moody's Parameter Sensitivities:
Parameter Sensitivities are designed to provide a quantitative
calculation of how the initial rating might change if key input
parameters used in the initial rating process -- here the MILAN CE
and mean expected loss -- differed. The analysis assumes that the
deal has not aged. Parameter Sensitivities only reflect the
ratings impact of each scenario from a quantitative/model-
indicated standpoint.
Based on the current structure, if the MILAN CE losses were to
increase to 28.0% from 14.0%, and the mean expected loss were to
increase to 2.8% from 1.4%, the model-indicated rating for the
Class A1b Notes would drop one notch to Aa1. The excess
subordination at closing reduces the probability of ratings
migration. Using these same assumptions, the ratings on the Class
A2, Class B and Class C Notes drop 2, 5 and 5 notches to Aa2, Baa1
and Ba1 respectively.
Moody's ratings address only the credit risks associated with the
transaction. Other non-credit risks have not been addressed, but
may have a significant effect on yield to investors. Moody's
ratings are subject to revision, suspension or withdrawal at any
time at our absolute discretion. The ratings are expressions of
opinion and not recommendations to purchase, sell or hold
securities. Moody's issues provisional ratings in advance of the
final sale of securities and these ratings reflect Moody's
preliminary credit opinion regarding the transaction. Upon a
conclusive review of the final versions of all the documents and
legal opinions, Moody's will endeavour to assign a definitive
rating to the transaction. A definitive rating may differ from a
provisional rating.
LINK ELECTRICAL: First Creditors' Meeting Set For March 17
----------------------------------------------------------
Brent Kijurina, David Ross and Richard Albarran of Hall Chadwick
were appointed as administrators of Link Electrical Services Pty
Ltd on March 4, 2016.
A first meeting of the creditors of the Company will be held at
Quest Whyalla, 4 Moran Street, in Whyalla, on March 17, 2016, at
10:00 a.m.
LINK ENGINEERING: First Creditors' Meeting Set For March 17
-----------------------------------------------------------
Brent Kijurina, David Ross and Richard Albarran of of Hall
Chadwick were appointed as administrators of Link Engineering
Trading Pty Ltd on March 4, 2016.
A first meeting of the creditors of the Company will be held at
Quest Whyalla, 4 Moran Street, in Whyalla, on March 17, 2016, at
12:00 p.m.
MIDDLEBROOK ESTATE: Director Jailed for Not Assisting Liquidator
----------------------------------------------------------------
Joseph Cogno, director of Middlebrook Estate Pty Ltd has been
sentenced in the Adelaide Magistrates' Court after pleading guilty
to three charges brought by Australian Securities and Investment
Commission for failing to provide a Report as to Affairs and
deliver books and records to the liquidator of the company.
Middlebrook Estate Pty Ltd was wound up by order of the Federal
Court of Australia on Feb. 26, 2014, on application of the Deputy
Commissioner of Taxation.
Mr Cogno was convicted and sentenced on 1 March 2016 to a total of
three months imprisonment, wholly suspended, upon entering into a
good behaviour bond which included a condition that he complies
with his obligations to the liquidator.
ASIC Commissioner Greg Tanzer said, 'If a company is placed into
liquidation, the company officers and other related individuals
have a statutory obligation to provide assistance to the
liquidator. This is an important part of maximising the
opportunity for returns to creditors and identifying any
misconduct which may have contributed to the company's collapse.
'ASIC will act against company directors and other officeholders
who fail to meet their obligations once a company has been placed
into liquidation', Mr Tanzer said.
In 2014-15, ASIC successfully prosecuted 355 individuals for 680
offences relating to this type of misconduct, resulting in fines
of approximately AUD915,000.
=========
C H I N A
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* Prolonged Fall in Oil Means Weaker Global Growth, Moody's Says
----------------------------------------------------------------
The protracted decline in oil prices and weaker growth in China
have prompted a reappraisal of global economic growth prospects,
causing risk aversion to rise and financial market conditions to
tighten. However, while the current environment will curb growth
in specific regions, it does not presage a global recession, says
Moody's Investors Service.
Following our global forecast revision earlier in February,
Moody's has taken negative rating actions for a large number of
corporates, banks and sovereigns whose revenues, loan portfolio
performance, and tax receipts are heavily dependent on the
production of oil and other commodities. Moody's rating actions
have been focused on those issuers directly exposed to the prices
of oil and commodities because at present we believe that the
positive impact of lower commodity prices on global growth helps
mitigate the negative effects from the financial markets
turbulence.
However, market volatility has recently spread beyond the energy
and commodity sectors, leading to a broad decline in global equity
prices and a surge in high-yield corporate bond spreads. As a
result, financial market conditions have worsened significantly --
a development the rating agency is closely monitoring.
Moody's still expects growth in G-20 advanced countries' to be
broadly stable at 1.8 percent for 2016 and 2.0 percent for 2017.
Moody's believes that the positive effects of lower commodity
prices to a large extent will mitigate negative factors, such as
weaker consumer and business confidence levels caused by increased
financial market volatility, and deteriorating trade linkages with
emerging markets. The most recent real economic indicators for
the advanced economies, such as strong employment growth in the
US, have been indicative of more sustained, albeit modest, growth
than suggested by the shift in bond and equity markets.
"Risks to global growth have increased, but despite the recent
market volatility, we don't believe that the world's advanced
economies will enter into recession," said Elena Duggar, a Senior
Vice President at Moody's in the report, "Global Credit Strategy
and Macro Outlook FAQ: Lower Oil Prices and Recent Market Turmoil
Support Rating Actions on Oil- and Commodity-Dependent Credits."
"For example, over the last 30 years, we have seen 16 quarters
with a similar or larger fall in the stock market and 25 quarters
with similar or larger widening in the average corporate 10-year
Baa spread -- in most cases this volatility did not lead to a
recession," added Duggar.
The FAQ addresses investors questions about how lower oil prices
and financial market tightening affect Moody's economic growth
forecasts and its view of evolving credit risks. The report also
addresses whether financial market leading indicators are
signaling a US recession.
Moody's believes that the current macro-credit environment is
similar to conditions in 1987 or 1998 when credit problems within
certain sectors of the global economy were very severe, but the
rest of the global economy experienced only a modest slowdown in
economic activity.
The report is available to Moody's subscribers at:
http://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1
018979
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I N D I A
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AD MERCHANT: CRISIL Upgrades Rating on INR25MM Cash Loan to B+
--------------------------------------------------------------
CRISIL has upgraded its long-term rating on the bank facilities of
AD Merchant India Private Limited (AMIPL) to 'CRISIL B+/Stable'
from 'CRISIL B/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 25 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
Proposed Long Term 25 CRISIL B+/Stable (Upgraded
Bank Loan Facility from 'CRISIL B/Stable')
The upgrade reflects expected improvement in business risk profile
and liquidity over the medium term, backed by significant ramp-up
in scale of operation and higher operating profitability.
Revenue'at INR257 million in the eight months through November
2015'is expected at INR360-390 million in 2015-16 (refers to
financial year, April 1 to March 31). Operating margin improved to
3.9 percent in 2014-15 from 2.2 percent in 2012-13, and should
improve further over the medium term, backed by higher commission
charges. Cash accrual should, therefore, be at INR14-15 million in
2015-16, up from INR5.4 million the previous year, enhancing
liquidity.
The ratings continues to reflect AMIPL's modest scale of
operations in the intensely competitive advertising industry,
small Networth limiting its financial flexibility, and working
capital intensive operations on account of sizeable debtors. These
rating weaknesses are partially offset by the promoters'
established track record in the advertising industry.
Outlook: Stable
CRISIL believes AMIPL will continue to benefit over the medium
term from its strong track record in the advertising and
communications industry. The outlook may be revised to 'Positive'
if considerable ramp-up in scale of operations, improving
operating margin, and efficient working capital management
strengthen key credit metrics. Conversely the outlook may be
revised to 'Negative' if stretch in working capital cycle, or any
large debt-funded capital expenditure weakens financial risk
profile.
Set up in 2000, AMIPL is an advertising and communications agency.
It offers advertising services across media categories, including
electronic media (such as radio and television) and print media
(such as newspapers, magazines, danglers, and posters), and
outdoor publicity in Kolkata. The company also provides content
and concept development solutions to customers. It is promoted by
Mr. Satyajit Shah and his brother, Mr. Suman Shah.
ALAM CONSTRUCTIONS: CARE Reaffirms B+ Rating on INR6cr LT Loan
--------------------------------------------------------------
CARE reaffirms the ratings assigned to the bank facilities of
Alam Constructions.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 6.00 CARE B+ Reaffirmed
Short-term Bank Facilities 2.00 CARE A4 Reaffirmed
Rating Rationale
The ratings assigned to the bank facilities of Alam Construction
(AC) continue to remain constrained by relatively small scale of
operations, high client concentration risk, working capital-
intensive nature of operations, limited financial flexibility
owing to partnership nature of constitution and presence in
highly competitive and fragmented construction industry. The
ratings, however, derive strength from established track record
and experienced partners, moderate debt coverage indicators,
moderate operating cycle and satisfactory orders in hand providing
short term revenue visibility. The ratings also factor in growth
in total operating income albeit marginal decline in PAT margin in
FY15 (refers to period April 1 to March 31) and improvement in
overall gearing.
The ability of the firm to improve its scale of operations,
profitability margins and manage working capital requirements
without deterioration in capital structure are the key rating
sensitivities.
Alam Constructions (AC) was established in the year 1996 and
promoted by Mr. A. VenkataNarayana, Mr. E. VenkatNaryana, Mrs. A.
Visiala and Mr. A. Ranadeep. The firm is engaged in construction
of bridges and earth works for divisions of Indian Railways (IR)
like South Western Railways, Southern Railways and South Central
Railways. The firm had an order book of INR45 crore as on
Feb. 15, 2016.
During FY15, AC reported a PAT of INR0.61 crore on a total
operating income of INR8.99 crore compared to PAT of INR0.33 crore
on a total operating income of INR4.29 crore in FY14. Furthermore,
as per the provisional financials for 10MFY16, the firm has
reported sales of INR10.00 crore during the period.
ALLIANCE INDUSTRIAL: Ind-Ra Suspends 'IND BB' LT Issuer Rating
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Alliance
Industrial Marketing's (AIM) 'IND BB' Long-Term Issuer Rating to
the suspended category. The Outlook was Stable. The rating will
now appear as 'IND BB(suspended)' on the agency's website. The
agency has also migrated AIM's INR108m fund-based limits to 'IND
BB(suspended)' from 'IND BB' and 'IND A4+(suspended)' from 'IND
A4+'.
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 AIM.
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.
ANANTHA PVC: CARE Reaffirms B Rating on INR8cr LT Loan
------------------------------------------------------
CARE reaffirms the ratings assigned to the bank facilities of
Anantha Pvc Pipes Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 8 CARE B Reaffirmed
Short-term Bank Facilities 7 CARE A4 Reaffirmed
Rating Rationale
The ratings assigned to the bank facilities of Anantha PVC Pipes
Private Limited (Anantha PVC) continues to remain constrained by
relatively small scale of operation relatively low profitability
margins, risk associated with volatility in raw material prices,
working capital-intensive nature of business and fragmented nature
of the industry with the presence of a large number of unorganized
players which results in intense competition. The rating also
factors in decline in revenue during FY15 (refers to the period
April 1 to March 31) and deterioration in capital structure and
other coverage indicators. The ratings are, however, underpinned
by experienced promoter group and moderate industry growth
prospects. The ability of the company to improve its scale of
operations thereby improving its profitability and improve the
liquidity position with efficient management of the working
capital are the key rating sensitivities.
Anantha PVC, incorporated in 2006, is part of the Nandyal-based
(Andhra Pradesh) Nandi group of companies. Promoted by Mr Sajjala
Sreedhar Reddy, Anantha PVC is engaged in the business of
manufacturing of rigid polyvinyl chloride (PVC) pipes and fittings
(installed capacity of 12,800 MTPA) at its facilities located at
Hampapuram (Andhra Pradesh). The products are widely used in
irrigation, telecommunication, potable water supplies, electrical
industry, construction industry, sewerage and drainage, etc.
Besides, the company is also engaged in trading of resins and
chemicals.
The Nandi group, promoted by Mr S Pedda Yerikal Reddy, is a South
India-based industrial house having diversified business interest
such as cement, dairy, PVC pipes, construction, etc.
During FY15, Anantha PVC reported PBILDT of INR1.60 crore (as
against INR3.50 crore in FY14) and net loss of INR0.90 crore
(as against net profit of INR0.48 crore in FY14) on a total
operating income of INR57.68 crore (as against INR60.71 crore in
FY14).
B.R. OIL: Ind-Ra Assigns 'IND BB' Long-Term Issuer Rating
---------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned B.R. Oil
Industries Private Limited (BROIPL) a Long-Term Issuer Rating of
'IND BB+'. The Outlook is Stable.
KEY RATING DRIVERS
BROIPL's ratings reflect its moderate credit profile as it
operates in a highly fragmented and competitive industry. In FY15,
its net financial leverage (total adjusted net debt/operating
EBITDA) was 2.5x (FY14: 2.6x) and gross interest coverage
(operating EBITDA/net interest expenses) was 3.3x (3.2x).
Additionally, its EBITDA margins were low at 1.4% during FY15
(FY14: 2.4%).
The ratings consider BROIPL's promoters' experience of two decades
in the edible oil trading business; its proprietors managed their
own respective companies before BROIPL's incorporation. The
ratings are also supported by the company's strong relationships
with its customers and suppliers.
RATING SENSITIVITIES
Positive: A substantial improvement in operating profitability,
along with improvement in other credit metrics, will be positive
for the ratings.
Negative: Deterioration in operating profitability, leading to
deterioration in other credit metrics, will be negative for the
ratings.
COMPANY PROFILE
BROIPL was incorporated in October 2009 and commenced commercial
operations in 2013. Its registered office is located in Morena,
Madhya Pradesh. The company manufactures, processes and trades
edible oils, such as mustard, soya, etc. BROIPL has a solvent
extraction plant with an installed daily capacity of 500mt and a
refinery with an installed daily capacity of 75mt. BROIPL mainly
operates in the domestic market, through wholesalers, dealers and
distributors across India. It is managed by Mr. Suresh Chand
Agrawal, Mr. Sanjeev Agrawal, Mr. Jugal Kishore Agrawal and Mrs.
Meera Devi. Its FY15 revenue was INR2,162.5 million.
BROIPL's ratings:
-- Long-Term Issuer Rating: assigned 'IND BB+'/Stable
-- INR24.40 million long-term loans: assigned 'IND BB+'/Stable
-- INR60.0 million fund-based working capital limits: assigned
'IND BB+'/Stable
BEST FOODS: CRISIL Lowers Rating on INR15BB Cash Loan to 'D'
------------------------------------------------------------
CRISIL has downgraded its ratings on the bank facilities of
Best Foods Limited (Best Foods) to 'CRISIL D/CRISIL D' from
'CRISIL BBB/Stable/CRISIL A3+'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 15000 CRISIL D (Downgraded from
'CRISIL BBB/Stable')
Proposed Long Term 1145.7 CRISIL D (Downgraded from
Bank Loan Facility 'CRISIL BBB/Stable')
Proposed Short Term 209.7 CRISIL D (Downgraded from
Bank Loan Facility 'CRISIL A3+')
Standby Line of 1000.0 CRISIL D (Downgraded from
Credit 'CRISIL BBB/Stable')
Term Loan 632.8 CRISIL D (Downgraded from
'CRISIL BBB/Stable')
The rating downgrade reflects delays in servicing terms loans by
Best Foods in the recent past due to weakened liquidity, arising
from a lower basmati rice prices, stretch in export receivables
and large stock of inventory. Moderation in profitability during
2015-16 (refers to the financial year, April 1 to March 31) and
high working capital borrowings have resulted in almost complete
utilisation of its working capital bank lines in the second half
of the current fiscal. The company has serviced its most recent
debt obligations in a timely manner. CRISIL will continue to
monitor Best Foods' track record of timely debt servicing.
Best Foods is also susceptible to volatility in raw material
prices and regulatory risks. However, the company benefits from
its established position in the basmati rice industry.
Set up by Mr. Mohinder Pal Jindal and his son, Mr. Dinesh Gupta,
in 2003-04, Best Foods (formerly, Best Food International Pvt Ltd)
mills and processes basmati rice for the global and domestic
markets. Processing units in Karnal, Haryana; Hamidpur, Delhi; and
Faridkot, Punjab, have total rice milling capacity of 101 tonne
per hour (tph) and sorting and grading capacity of 149 tph.
Profit after tax (PAT) was INR540 million on an operating income
of INR27.4 billion for 2014-15, against a PAT of INR670 million on
an operating income of INR26.2 billion for 2013-14. Best Foods
reported a PAT of INR381 million on an operating income of INR19.5
billion for the nine months ended Dec. 31, 2015.
BIOPAC INDIA: Ind-Ra Withdraws IND B(suspended) LT Issuer Rating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has withdrawn Biopac India
Corporation Limited's (BICPL) 'IND B(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 BICPL. Ind-Ra suspended BICPL's ratings on 20 August
2013.
BICPL's ratings are as follows:
-- Long-Term Issuer Rating: 'IND B(suspended)'; rating withdrawn
-- INR24 million term loan limit: 'IND B(suspended)'; ratings
withdrawn
-- INR56 million fund based limits: 'IND B(suspended)'/'IND
A4(suspended)'; ratings withdrawn
CANON ENGINEERING: Ind-Ra Assigns IND B+ Long-Term Issuer Rating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Canon Engineering
Constructions (Canon Engineering) a Long-Term Issuer Rating of
'IND B+'. The Outlook is Stable.
KEY RATING DRIVERS
The ratings reflect Cannon Engineering's small scale of operations
and moderate credit metrics. In FY15, revenue was INR133.7 million
(FY14: INR212.3 million), net leverage (Ind-Ra total adjusted net
debt/operating EBITDAR) was 4.6x (9.3x) and EBITDA interest cover
was 1.2x (1.4x). EBITDA margin has been in the range of 1.7%-2.1%
since FY12.
Ind-Ra expects the credit metrics to improve from FY16 as the
company has already achieved a turnover of around INR180.0 million
up to January 2016 (provisional), and had an unexecuted order book
of INR776.5 million (5.8x of FY15 revenue) as of April 2015.
A comfortable liquidity position and vintage of more than three
decades in the civil contracting business benefit the ratings.
CAREER COACHING: CRISIL Assigns 'D' Rating to INR100MM Term Loan
----------------------------------------------------------------
CRISIL has assigned 'CRISIL D' rating to the long-term bank
facility of Career Coaching (Alld) Private Limited (CCPL). The
rating reflects instances of delays in repayment of term debt
obligation. The delays are on account of constrained liquidity due
to cash flow mismatches.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 100 CRISIL D
CCPL also has modest scale of operations, low networth and is also
exposed to any changes in government regulations. However, it
benefits from its promoters' extensive experience in the education
industry.
CCPL, established in 2004 by Mr. Zafar Bakht and Mr. Saeed Fatima,
provides coaching services for various entrance examinations at
its coaching institutes located in Allahabad (Uttar Pradesh).
CCPL's net profit was INR17 million on net sales of INR136.2
million for 2014-15 (refers to financial year, April 1 to
March 31), against a net profit of INR11.1 million on net sales of
INR93.4 million for 2013-14.
CHETAN INDUSTRIES: Ind-Ra Suspends 'IND BB' LT Issuer Rating
------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Chetan Industries
Limited's (CIL) 'IND BB' Long-Term Issuer Rating to the suspended
category. The Outlook was Stable. The rating will now appear as
'IND BB(suspended)' on the agency's website.
The 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 CIL.
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.
CIL's ratings:
-- Long-Term Issuer rating: migrated to 'IND BB(suspended)' from
'IND BB'/Stable
-- INR250 million fund-based working capital facilities:
migrated to 'IND BB(suspended)' from 'IND BB' and 'IND
A4+(suspended)' from 'IND A4+'
-- INR28.5 million term loans: migrated to 'IND BB(suspended)'
from 'IND BB'
CONN APPLIANCES: Fitch Expects to Rate Class B Notes at BBsf(EXP)
-----------------------------------------------------------------
Fitch Ratings expects to assigns the following ratings to Conn's
Receivables Funding 2016-A, LLC (Conn's 2016-A), which consists of
notes backed by retail loans originated and serviced by Conn
Appliances, Inc. (Conn's):
-- $423,030,000 class A notes at 'BBBsf(EXP)'; Outlook Stable;
-- $70,510,000 class B notes at 'BBsf(EXP)'; Outlook Stable;
-- $70,510,000 class C notes at 'Bsf(EXP)'; Outlook Stable;
-- $100 class R notes at 'NR'.
KEY RATING DRIVERS
Adequate Collateral Quality: The 2016-A trust pool consists of
100% fixed-rate consumer loans originated and serviced by Conn's
Appliances, Inc. The pool exhibits a weighted average FICO score
of 611 and a weighted average borrower rate of 21.54%.
Sufficient Credit Enhancement: The initial hard credit enhancement
(CE) for class A, B and C is expected to be 41.50%, 31.50% and
21.50%, respectively, including the reserve account. Additionally,
the class A notes will benefit from subordination provided by the
class B and C notes, and the class B notes will benefit from
subordination provided by the class C notes. Transaction cash
flows were satisfactory under all stressed scenarios, commensurate
with the ratings.
Rating Cap at 'BBBsf': Due to higher loan defaults in recent
years, management changes at Conn's, and the credit risk profile
of Conn's, Fitch placed a rating cap on this transaction at the
'BBBsf' category.
Adequate Liquidity Support: Liquidity support is provided by a
non-declining reserve account, which will be fully funded at
closing at 1.50% of the initial pool balance.
Acceptable Servicing Capabilities: Conn Appliances, Inc.
demonstrates adequate abilities as originator, underwriter, and
servicer. The credit risk profile of the entity is mitigated by
the backup servicing provided by Systems & Services Technologies,
Inc. (SST).
Legal Structure Integrity: The legal structure of the transaction
should provide that a bankruptcy of Conn's would not impair the
timeliness of payments on the securities.
RATING SENSITIVITIES
Unanticipated increases in the frequency of defaults or chargeoffs
on customer accounts could produce loss levels higher than the
base case and would likely result in declines of CE and remaining
loss coverage levels available to the investments. Decreased CE
may make certain ratings on the investments susceptible to
potential negative rating actions, depending on the extent of the
decline in coverage.
Fitch conducts sensitivity analysis by stressing a transaction's
initial base case chargeoff assumption by 1.5x, 2.0x and 2.5x, and
examining the rating implications. The 1.5x, 2.0x and 2.5x
increase of the base case chargeoffs are intended to provide an
indication of the rating sensitivity of the notes to unexpected
deterioration of a transaction's performance.
During the sensitivity analysis, Fitch examines the magnitude of
the multiplier compression by projecting the expected cash flows
and loss coverage levels over the life of investments under higher
than the initial base case chargeoff assumptions. Fitch models
cash flows with the revised chargeoff estimates while holding
constant all other modeling assumptions.
Under the 1.5x base case stress scenario, class A notes would
retain the current rating, while class B notes would experience a
one-notch downgrade. Under the 2.0x base case stress scenario,
class A notes would be downgraded one notch, while class B notes
would downgraded one category to Bsf. Under the 2.5x base case
stress scenario, class A notes would be downgraded to 'B+sf', and
class B and class C notes would fall to 'CCCsf'.
DUE DILIGENCE USAGE
No third-party due diligence was provided or reviewed in relation
to this rating action.
Fitch's analysis of the Representations and Warranties (R&W) of
this transaction can be found in 'Conn's Receivables Funding 2016-
A, LLC - Appendix'. These R&Ws are compared to those of typical
R&W for the asset class as detailed in the special report
'Representations, Warranties, and Enforcement Mechanisms in Global
Structured Finance Transactions' dated June 2015.
CONSOLIDATED CONST'N: CARE Reaffirms INR1,077.9cr Loan D Rating
---------------------------------------------------------------
CARE reaffirms the rating assigned to the bank facilities of
Consolidated Construction Consortium Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 1077.90 CARE D Reaffirmed
Short term Bank Facilities 874.11 CARE D Reaffirmed
Rating Rationale
The rating assigned to the bank facilities of Consolidated
Construction Consortium Limited (CCCL) continue to factor in the
on-going delays in debt servicing by the company.
CCCL was incorporated in 1997 by first generation entrepreneurs
Mr. R. Sarabeswar, Mr. S. Sivaramakrishnan and Mr. V G
Janarthanam. CCCL is primarily engaged in construction activities
in commercial, infrastructure, industrial and residential
domain. CCCL has other subsidiaries namely Consolidated Interiors
Ltd (interior contracts and fit out services), Noble Consolidated
Glazing Ltd (Glazing Services) and CCCL Power Infrastructure Ltd
(BOP Orders for Power Projects and food processing).
In FY15 (refers to the period April 1 to March 31), CCCL had a
total operating income of INR655 crore and a net loss of INR154
crore.
DATTAKALA SHIKSHAN: CRISIL Assigns 'D' Rating to INR175MM Loan
--------------------------------------------------------------
CRISIL has assigned its 'CRISIL D' rating to the long-term bank
facilities of Dattakala Shikshan Sanstha (DSS).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 175 CRISIL D
Proposed Long Term
Bank Loan Facility 37.4 CRISIL D
Cash Credit 5.0 CRISIL D
Funded Interest
Term Loan 22.6 CRISIL D
The rating reflects instances of delay by DSS in servicing its
debt, caused by weak liquidity. The delay in receipt of grants/re-
imbursements from government along with average occupancy levels
and modest cash accruals has impacted DSS' liquidity.
DSS has a below-average financial risk profile because of high
gearing and subdued debt protection metrics, and is exposed to
inherent regulatory risks and intense competition in the education
sector. However, it benefits from its promoter's extensive
industry experience and its diversified revenue streams.
Established in 2009 by Mr. R M Zol, DSS provides engineering,
management, pharmacy, and computer science courses. The trust also
manages schools offering education from standard I to XII. It has
two campuses, one at Bhigwan near Pune and the other at Karmala
near Solapur.
DHARIYA CONSTRUCTION: CRISIL Assigns B- Rating to INR80MM Loan
--------------------------------------------------------------
CRISIL has revoked the suspension of its rating on the long-term
bank facilities of Dhariya Construction Private Limited (DCPL) and
has assigned its 'CRISIL B-/Stable' rating to the current
facility. CRISIL had, on September 3, 2015, suspended the rating,
as the company had not provided the necessary information for
taking a rating view. It has now shared the requisite information,
enabling CRISIL to assign a rating to the bank facility.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 40 CRISIL B-/Stable (Assigned;
Suspension Revoked)
Working Capital 80 CRISIL B-/Stable (Assigned;
Term Loan Suspension Revoked)
The rating reflects DCPL's weak financial risk profile because of
a modest networth, weak debt protection metrics, and constrained
liquidity, driven by significant working capital requirement. The
rating also factors in a modest scale of operations, and project
and customer concentration in revenue profile. These rating
weaknesses are partially offset by the extensive experience of the
company's promoters in the civil construction business.
Outlook: Stable
CRISIL believes DCPL 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 significantly
higher-than-expected cash accrual, and successful realisation of
idle charges due from the Maharashtra state irrigation department.
Conversely, the outlook may be revised to 'Negative' if there are
further delays in project execution, resulting in lower-than-
expected cash accrual, or a stretched working capital cycle,
weakening liquidity.
Set up in 2003 by Mr. Mukund Dhariya, DCPL undertakes civil work
contracts involving construction of dams, roads, tunnels, and
others for the Kumbhe hydroelectric project in Maharashtra. In
March 2005, the company won the bid for construction of the Kumbhe
dam, and since then has been awarded several other assignments
related to the same project.
DRD TRUCKS: Ind-Ra Withdraws 'IND BB-' Long-Term Issuer Rating
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) has withdrawn DRD Trucks India
Private Limited's (DRD) '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 DRD.
Ind-Ra suspended DRD's ratings on 23 March 2015.
DRD's ratings:
-- Long-Term Issuer Rating: 'IND BB-(suspended)'; rating
withdrawn
-- INR72.5 million fund-based working capital limits: 'IND BB-
(suspended)' and 'IND 'A4+(suspended)'; ratings withdrawn
-- INR70 million non-fund-based working capital limits: 'IND
A4+(suspended)'; rating withdrawn
-- INR39.4 million long-term loans: 'IND BB-(suspended)'; rating
withdrawn
FABWORTH PROMOTERS: CARE Revises Rating on INR400cr Loan to BB-
---------------------------------------------------------------
CARE revises ratings assigned to bank facilities of Fabworth
Promoters Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 400 CARE BB- Revised from
CARE BB+ to CARE D
and then revised to
CARE BB-
Rating Rationale
The revision in the rating assigned to Fabworth Promoters Pvt Ltd
(FPPL) to 'CARE D' reflects delays in interest servicing by the
company as highlighted in the auditor's report for the year ended
March 31, 2015. The ratings were revised as per CARE's policy of
recognising default.
However, following the regularization in interest servicing, the
rating has been revised to 'CARE BB-'. The rating of FPPL is
constrained by delay in the execution of the project, cost
overrun, delay in infusion of funds by the promoters and lower
than envisaged booking of service apartments. The rating is
further constrained by inherent seasonal nature of the hotel
industry and competition from existing and new hotel ventures
coming up in Kolkata. The above rating weaknesses are partly
offset by experience of the promoters, tie-up of debt,
construction work outsourced to renowned contractors, favourable
location of the project and technical & marketing tie-up with a
leading global hospitality group (JW Marriott).
The ability of the company to successfully execute the project
without any further time and cost overrun and achieving
optimum occupancy and average room rent thereafter shall remain
the key rating sensitivities.
FPPL was initially incorporated in 2006 by Emaar MGF Land Limited
(Emaar) of Delhi. In August 2010, FPPL was converted into a joint
venture company, with other business groups (Salarpuria-Sattva
Group of Bangalore, Mani group of Kolkata and SPS Group of
Kolkata) taking stake in the company. Emaar and SPS group have
exited the JV.
FPPL is currently setting up a 5-star hotel cum service apartment
(with 281 rooms and 50 service apartments) at E.M. Bypass, Kolkata
at a cost of INR1,236 crore (revised from INR1,013.4 crore). The
project is being financed at a debt-equity ratio of 0.8:1 (term
debt of INR555.0 crore and promoter's contribution/customer
advances of INR681 crore). The project is expected to partially
commence operation by July 2016 (revised from December 2015).
Till January 31, 2016, FPPL has incurred an aggregate cost of
INR1,040 crore on the project, financed through term loan
from banks (Rs.527 crore), and balance through promoters'
contribution, and advances from sale of service apartments.
The company has entered into marketing-cum-management agreement
withMarriott International Inc. of USA to operate
the hotel under the 'JWMariott' brand.
GOPI TEXFAB: CARE Reaffirms B+/A4 Rating on INR5.5cr Loan
---------------------------------------------------------
CARE reaffirms the ratings assigned to the bank facilities of
Gopi Texfab Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term/ Short-term 5.50 CARE B+/ CARE A4
Bank Facilities Reaffirmed
Rating Rationale
The ratings assigned to the bank facilities of Gopi Texfab Private
Limited (GTPL) continue to remain constrained on account of the
nascent stage of operations of the company, its presence in a
highly competitive and fragmented textile industry with low entry
barriers, working capital intensive nature of operations and
susceptibility of profitability to volatility in raw material
costs. The ratings also factor in the gradual stabilization of its
trading operations, low profit margins along with moderately
leveraged capital structure and weak debt protection metrics.
However, the above constraints are partly offset by the extensive
industry experience of the promoters in textile business, robust
demand in the end user market and group support.
The ability of GTPL to increase its scale of operations and
profitability while improving its capital structure and debt
coverage indicators by managing its working capital requirements
efficiently are the key rating sensitivities.
Ahmedabad-based (Gujarat) GTPL, a part of the Narayani group, was
incorporated on March 31, 2014, by Mr Gopiram Gordhandas Gupta, Mr
Sanjiv Gopiram Gupta, Mr Anand Gopiram Gupta and Mr Rajiv Gopiram
Gupta for the purpose of trading in cotton fabrics. GTPL commenced
trading activities in June 2014 and trades in approximately 15-20
types of cloth fabrics both processed and un-processed (grey)
fabrics, with different processing and weaving patterns. Both
purchase and sales of GTPL are within India.
During FY15 (refers to the period April 1 to March 31), GTPL
reported a total operating income (TOI) of INR15.42 crore with a
PAT of INR0.08 crore. During 10MFY16 (Provisional), GTPL achieved
a TOI of INR18.01 crore.
GR POWER: CARE Assigns 'B+' Rating to INR22cr LT Loan
-----------------------------------------------------
CARE assigns LT rating of 'CARE B+' and reaffirms the rating
assigned to the st bank facilities of GR Power Switchgear Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 22 CARE B+ Assigned
Short term Bank Facilities 16 CARE A4 Reaffirmed
Rating Rationale
The ratings of GR Power Switchgear Limited (GRPSL) continue to
remain constrained by fluctuating profit margins, leveraged
capital structure and weak debt coverage indicators, elongated
operating cycle resulting in working capital-intensive nature of
operations and presence in the highly fragmented and competitive
electrical goods industry. The ratings, however, derive strength
from established track record and experienced promoter, reputed
clientele and satisfactory order book position with short-term
revenue visibility. The ratings also factor in growth in total
operating income in FY15 (refers to the period April 1 to
March 31).
The ability of the company to increase scale of operations improve
the capital structure and recover contract proceeds in a timely
manner thereby improving the working capital cycle are the key
rating sensitivities.
GR Power Switchgears (GRPS) was established in the year 1986 as a
proprietorship concern. Later on, the constitution was changed and
the name of the company was changed to current nomenclature,
i.e., GR Power Switchgear Limited (GRPSL) in 1992. GRPSL is
promoted by Mr Gopal Reddy along with other three directors. The
company is engaged in designing and manufacturing of high voltage
isolators ranging from 11 KVA to 420 KVA which are used in the
power sector.
During FY15, GRPSL reported a PAT of INR0.64 crore on a total
operating income of INR72.01 crore as compared to PAT of INR0.13
crore on a total operating income of INR44.06 crore in FY14.
Furthermore, as per the provisional financials for 10MFY16, the
company has reported total operating income of INR65 crore during
the period.
HYCONS INFRASTRUCTURES: Ind-Ra Withdraws 'IND BB-' Issuer Rating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has withdrawn Hycons
Infrastructures India Limited's (Hycons) Long-Term Issuer Rating
of 'IND BB-(suspended)'.
The ratings have been withdrawn due to lack of adequate
information. Ind-Ra will no longer provide ratings or analytical
coverage for Hycons.
Ind-Ra suspended Hycons' ratings on 23 March 2015.
Hycon's ratings:
-- Long-Term Issuer rating: 'IND BB-(suspended)'; rating
withdrawn
-- INR30.0 million fund-based working capital limits: 'IND BB-
(suspended)' and 'IND 'A4+(suspended)'; ratings withdrawn
-- INR70.0 million non-fund-based limits: 'IND A4+(suspended)';
ratings withdrawn
K2 METALS: ICRA Assigns 'B' Rating to INR5cr Term Loan
------------------------------------------------------
ICRA has assigned a long-term rating of [ICRA]B and the short-term
rating of [ICRA]A4 to INR14.50 crore bank facilities of K2 Metals
Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term loan 5.00 [ICRA]B; assigned
Cash credit facility 5.00 [ICRA]B; assigned
Letter of credit 4.50 [ICRA]A4; assigned
Buyers credit (Sublimit) 4.50 [ICRA]A4; assigned
The assigned ratings take into account K2 Metals Pvt Ltd's initial
stage of manufacturing operations, coupled with a highly
competitive domestic and international market in which the ability
of the company to operate within desired operational parameters
remains critical. Further, profitability remains vulnerable raw
material price rise due to limited scope to pass on price
fluctuations in highly competitive market. The assigned rating
also takes into consideration debt-funded capital expenditure -
which shall lead to stretched credit metrics of the company for
next few years.
The rating, however, draws comfort from the long track record of
the promoters and their group concerns in the field of trading
steel products 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 Pune, which is a manufacturing hub.
Mr Rahul Kulkarni and his wife Mrs Megha Kulkarni founded the
company K2 Metals Private Limited in 2009; they both hold equal
shareholding in the company. The company was incorporated with the
objective of engaging in the manufacturing of Bright Steel Bars
and wires particularly targeting the auto, construction,
Infrastructure, and engineering sector.
K. G. ISPAT: CARE Assigns B+ Rating to INR4cr LT Loan
-----------------------------------------------------
CARE assigns 'CARE B+/CARE A4' ratings assigned to bank facilities
of K. G. Ispat Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 4 CARE B+ Assigned
Short-term Bank Facilities 1.25 CARE A4 Assigned
Rating Rationale
The ratings assigned to the bank facilities of K.G. Ispat Private
Limited (KIPL) were constrained primarily on account of its
financial risk profile marked by modest scale of operations and
thin profitability, leveraged capital structure, weak debt
coverage indicators and liquidity position, its operations in a
highly fragmented steel industry and susceptibility of profit
margins to fluctuations in raw material prices. The ratings,
however, continue to derive benefit from vast experience of the
promoters in the steel industry.
The ability of KIPL to increase its scale of operations along with
improvement in profitability, improvement in capital structure and
liquidity position while managing working capital requirement
efficiently thus improving the overall financial risk profile are
the key rating sensitivities.
Indore-based (Madhya Pradesh), KIPL was incorporated in 2004, is
promoted by MrRajkumar Gupta & Ms Deepti Gupta. They both jointly
manage the operations of the company. KIPL is engaged in trading
of iron & steel scrap and products. KIPL primarily purchase MS
scrap and MS bars, angles, plates, ingots and other MS products
and primarily sells to manufacturers of MS products and dealers.
KIPL primarily sells in the state of Madhya Pradesh.
During FY15 ( refers to the period April 1 to March 31), KIPL
reported a TOI of INR76.65 crore and a PAT of 0.25 crore as
against TOI of INR96.97 crore and PAT of INR0.20 crore during
FY14. As per the provisional results for 6MFY16 (April 1,
2015 to September 30, 2015), KIPL registered a TOI of INR26.50
crore.
KINGFISHER AIRLINES: Banks Ask Court to Stop Mallya From Leaving
----------------------------------------------------------------
Amit Anand Choudhary at The Times of India reports that the SBI
and other banks on March 8 moved the Supreme Court with a plea to
prevent Vijay Mallya from leaving India.
According to the report, the SBI leads a consortium of 17 lenders
to the grounded Kingfisher Airlines, which has defaulted on loans
worth over INR7,000 crore.
TOI says the top court agreed to give urgent hearing to the banks'
plea and has listed it for March 9 after attorney general said it
would be difficult to catch Mallya, an NRI, if he leaves country.
"List it for hearing tomorrow," a bench comprising Chief Justice T
S Thakur and Justice U U Lalit said, when attorney general Mukul
Rohatgi, appearing for PSU banks, mentioned the matter for urgent
hearing, TOI relays.
The report relates that Mr. Mallya, who recently clinched an exit
deal worth INR515 crore with Diageo, had indicated that he was
likely to relocate to the UK.
On March 7, the Enforcement Directorate (ED) registered a case of
money laundering against Mr. Mallya and later in the day a Debt
Recovery Tribunal (DRT) said the liquor baron can't access the
INR515 crore he got from the recent sale of his spirits business
to Diageo, until a loan default case with the State Bank of India
is settled, TOI recalls.
In what was called a 'sweetheart deal', Mr. Mallya sold his
business to Diageo last month. According to the report, the SBI
had asked for the DRT's intervention in seeking the lenders' first
right to the INR515 crore payout from Diageo to Mr. Mallya. The
DRT took up the request on a priority bsis.
State Bank of India had approached the Debt Recovery Tribunal
(DRT) seeking arrest of Vijay Mallya in a bid to recover loans to
Kingfisher Airlines, which was promoted by the liquor baron,
according to the report.
TOI adds that SBI also wanted his passport impounded and a
complete disclosure of his personal assets.
About Kingfisher Airlines
Headquartered in Mumbai, India, Kingfisher Airlines --
http://www.flykingfisher.com/-- formerly known as Deccan
Aviation Ltd., served about 35 domestic destinations with a fleet
of more than 40 aircraft, including Airbus jets and ATR 72
turboprops.
As reported in the Troubled Company Reporter-Asia Pacific on
Jan. 15, 2014, Bloomberg News said Kingfisher has grounded planes
since October 2012. The airline lost its operating license in
January last year after failing to convince authorities it
has enough funds to restart flights.
The airline defaulted on payments to lessors, creditors and
airports as losses widened amid rising fuel costs and competition.
According to Bloomberg News, Mr. Mirpuri said in an e-mail on
January 13 the airline continues its efforts to recapitalize and
restart services.
As reported in the TCR-AP on May 18, 2015, CRISIL's ratings on
bank loan facilities of Kingfisher Airlines Ltd (KFAL) continue to
reflect delays by KFAL in servicing its debt; the delays have been
caused by the company's weak liquidity and continued losses at
theoperating level.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 8940 CRISIL D (Reaffirmed)
Funded Interest
Term Loan 2260 CRISIL D (Reaffirmed)
Long Term Loan 5970 CRISIL D (Reaffirmed)
Rupee Term Loan 35270 CRISIL D (Reaffirmed)
Short Term Loan 390 CRISIL D (Reaffirmed)
Working Capital
Term Loan 2990 CRISIL D (Reaffirmed)
Losses in the past seven years have resulted in a complete erosion
of KFAL's net worth, leading to its weak financial risk profile.
Presently, the company does not carry out any commercial
operations.
KLT AUTOMOTIVE: Ind-Ra Withdraws 'IND BB+' LT Issuer Rating
-----------------------------------------------------------
India Ratings and Research (Ind-Ra) has withdrawn KLT Automotive &
Tubular Products Limited's (KLT) '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 KLT.
Ind-Ra suspended KLT's ratings on 4 January 2013.
KLT's ratings are as follows:
-- Long-Term Issuer Rating: 'IND BB+(suspended)'; rating
withdrawn
-- Outstanding INR2.33billion long-term debt, undrawn debt of
INR1.1billion: 'IND BB+(suspended)'; rating withdrawn
-- INR1.39billion fund-based working capital facilities: `IND
BB+(suspended)'; rating withdrawn
-- INR1.02 billion non-fund based working capital facilities:
'IND A4+(suspended)'; rating withdrawn
-- Adhoc INR100 million working capital limits: `IND
A4+(suspended)'; rating withdrawn
LEZORA VITRIFIED: CARE Reaffirms 'B+' Rating on INR32cr LT Loan
---------------------------------------------------------------
CARE reaffirms the ratings assigned to the bank facilities of
Lezora Vitrified Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 32.00 CARE B+ Reaffirmed
Short-term Bank Facilities 2.70 CARE A4 Reaffirmed
Rating Rationale
The ratings assigned to the bank facilities of Lezora Vitrified
Private Limited (LVPL) are constrained primarily on account of its
nascent stage of operations coupled with its presence in the
highly fragmented and competitive nature of the ceramic industry
and its linkages to the cyclical real estate industry. The ratings
are further constrained on account of susceptibility of operating
margins to volatility in raw material and natural gas prices
coupled with foreign exchange fluctuation risk.
The ratings, however, derives strength from the experienced
promoters in the ceramic industry, location advantage such as easy
access to raw material, fuel and labour and reputed clientele.
The ability of LVPL to stabilize the operations and achieve the
envisaged level of revenue and margins would be the key rating
sensitivity.
Morbi-based (Gujarat) LVPL was incorporated in March, 2014 by Mr
Vinodbhai Bhoraniya along with three other promoters namely Mr
Rajnikant Becharbhai Chikani, Mr Shaileshbhai Shirvi and Mr Anil
Bavarva. LVPL is an ISO 9001:2008 certified company engaged in the
business of manufacturing glazed vitrified tiles. The promoters
have set-up a state-of-the-art manufacturing facility at Wankaner,
Gujarat, which is equipped to manufacture 30.24 lakh square meters
of tiles per annum.
LVPL sells its products under the brand name of "Lezora" across
country and in the overseas market i.e. Middle East countries,
Korea and in European countries. LVPL has started commercial
operations from installed machinery from June, 2015.
The promoters are also associated with the entities namely M/s.
Sisam Ceramics Private Limited (manufacturing of ceramic glazed
tiles), Shivalika Ceramic Private Limited (engaged in
manufacturing of ceramic glazed tiles) and Shreem Vitrified
Private Limited (engaged in manufacturing of vitrified
tiles).
During 7MFY16, LVPL achieved a total operating income (TOI) of
INR24.82 crore and PBILDT of INR1.46 crore.
LIBERTY MARKETING: Ind-Ra Suspends 'IND B+' LT Issuer Rating
------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Liberty Marketing
Company's (LMC) '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 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 LMC.
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.
LMC's ratings:
-- Long-Term Issuer rating: migrated to 'IND B+(suspended)' from
'IND B+'/Stable
-- INR40 million Fund-based limit: migrated to Long-term 'IND
B+(suspended)' from 'IND B+' and Short-term 'IND
A4(suspended)' from 'IND A4'
-- INR30 million Non-fund-based limit: migrated to Short-term
'IND A4(suspended)' from 'IND A4'
M.T. PATIL: Ind-Ra Assigns 'IND BB' Long-Term Issuer Rating
-----------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned M.T. Patil
Builders and Constructors Private Limited (Patil) a Long-Term
Issuer Rating of 'IND BB'. The Outlook is Stable.
KEY RATING DRIVERS
The ratings reflect Patil's small scale of operations. 9MFY16
provisional financials indicate a substantial revenue decline to
INR350 million (full year FY15: INR775 million) as in the previous
year the company executed work orders related to the organisation
of 'Kumbh Mela' in Nashik which are non-recurring.
The company's weak outstanding order book position of INR138.3m
(0.18x of FY15 revenue) also underlines the ratings. Moreover,
liquidity is tight with the fund-based facilities being fully
utilised during the 12 months ended December 2015.
The ratings also factor in Patil's comfortable credit metrics with
net leverage of 1.7x in FY15 (FY14: 2.9x) and EBITDA interest
coverage of 5.3x (2.7x). The ratings are supported by the more
than two decades of experience of the company's promoters in the
civil construction business.
RATING SENSITIVITIES
Positive: Substantial growth in the top line continues similar to
FY15's and an improvement in the profitability leading to a
sustained improvement in the credit metrics will lead to a
positive rating action.
Negative: Any further decline profitability resulting in a
sustained deterioration in the credit profile of the company will
lead to a negative rating action.
COMPANY PROFILE
Incorporated in 1997, Patil is engaged in the business of civil
construction in and around Nashik.
Patil's ratings:
-- Long-Term Issuer Rating: assigned 'IND BB'; Outlook Stable
-- INR45.0 million fund-based facilities: assigned 'IND
BB'/Stable
-- INR65.0 million non-fund based facilities: assigned 'IND A4+'
MAHALAXMI OILMILL: CARE Assigns B+ Rating to INR6.03cr LT Loan
--------------------------------------------------------------
CARE assigns 'CARE B+' rating to the bank facilities of Mahalaxmi
Oilmill.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 6.03 CARE B+ Assigned
The rating assigned by CARE is based on the capital deployed by
the partners and the financial strength of the firm at present.
The rating may undergo a change in case of withdrawal of the
capital or the unsecured loans brought in by the partners, in
addition to the changes in the financial performance and other
relevant factors.
Rating Rationale
The rating assigned to the bank facilities of Mahalaxmi Oil Mill
(MOM) is constrained by its leveraged capital structure,
working capital intensive nature of operations and susceptibility
of profitability to fluctuations in raw material prices.
The rating derives strength from its experienced partners, sales
network consisting of dealers and direct channel and fund infusion
by partners to support growth in its scale of operations. MOM's
ability to increase its scale of operations and improve
profitability and overall gearing would be the key rating
sensitivities.
MOM is a partnership firm engaged in manufacturing maize oil and
maize oil cake used as cattle feed. The partners of the firm are
Mr Mansukh Bhagat (65% share), Mr Premchand Patel (15% share), Mr
Hitesh Patel (10% share) and Mr Manoj Velani (10% share). Their
earlier partnership firm Laxmi Oil Mill was dissolved and a new
partnership firm (MOM) was created in February 2014 with new set
of machinery. The manufacturing facility of the firm is located in
Dhansura Taluka of Gujarat with an installed capacity of 100 tonne
crushing per day (TCD). MOM sells its product variants under the
brand name of 'Mewad King'.
As per FY15 (refers to the period April 01 to March 31) figures,
MOM reported a total operating income of INR2.80 crore with a PAT
of INR0.09 crore. As per provisional ten month figures (refers to
the period April 01 to January 31), MOM reported a total operating
income of INR21.71 crore.
MAJESTIC BASMATI: CARE Assigns 'B+' Rating to INR37.63cr Loan
-------------------------------------------------------------
CARE assigns 'CARE B+' rating to the bank facilities of Majestic
Basmati Rice Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 37.63 CARE B+ Assigned
Rating Rationale
The rating assigned to the bank facilities of Majestic Basmati
Rice Private Limited (MBRPL) is constrained on account of
stabilization risk associated with its debt-funded capex,
leveraged capital structure and working capital intensive
operations. The rating is further constrained on account of risk
associated with the raw material price fluctuations along with its
presence in highly fragmented and competitive industry with high
degree of government control.
The rating, however, derives benefits from experienced and
qualified promoters along with established selling and
distribution network.
The ability of MBRPL to stabilize its operations by achieving
envisaged sales and profitability along amidst competitive and
working capital intensive nature of industry are the key rating
sensitivities.
Raisen-based MBRPL was incorporated on June 9, 2010, for the
purpose of processing paddy. MBRPL acquired another company Sigma
Newtech Fabricators & Engineering Private Limited (SNFPL) in
October 2014, for a sales consideration of INR0.50 crore. SNFPL
was engaged in the manufacturing of engineering components at
Mandideep, Madhya Pradesh, and its plant is now being used by
MBRPL for the processing of paddy. The key promoters of the
company are Mr Pramod ChandManot, Mr Samkit Hirawat andMr Vigyan
Lodha.
MBRPL had undertaken a project for installation of machinery for
processing of paddy and flour during Q3FY15 (refers to a period of
October 1 to December 31) which got completed in August 2015. The
plant started commercial production on September 6, 2015. FY16
will be the first year of commercial operation for MBRPL. The
turnover in FY15 pertains to trading of rice. The total cost of
the project was INR14.02 crore which was funded through term debt
of INR8 crore and unsecured loans of INR6.02 crore. The plant is
located at Mandideep, Madhya Pradesh, and is spread across an area
of 20,000 square meters. The company will sell its basmati rice
under the brand name of 'DILNOOR'. The installed capacity of the
plant is 8 tonnes of paddy processing per hour.
MBRPL reported a net loss of INR0.30 crore on a total operating
income (TOI) of INR0.61 crore during FY15 (refers to the
period April 1 to March 31).
MANORAMA HOSPITEX: ICRA Assigns 'D' Rating to INR11.40cr Loan
-------------------------------------------------------------
ICRA has assigned a long term rating of [ICRA]D to the INR11.40
crore term loan of Manorama Hospitex Private Limited. ICRA has
also assigned a short term rating of [ICRA]D to the INR0.60 crore
overdraft facilities of MHPL.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based Limit
Term Loan 11.40 [ICRA]D Assigned
Fund Based
Overdraft 0.60 [ICRA]D Assigned
The assigned ratings primarily take into account MHPL's recent
delays in timely servicing of debt obligations. ICRA notes that
the high debt repayment and interest servicing obligations are
likely to keep the liquidity position tight at least over the near
term. The ratings take into consideration the limited track record
of operations and nominal turnover registered during FY2015 due to
moderate occupancy levels. The ratings also take into account the
company's low tangible net-worth and partly debt funded capital
expenditure that has led to a high gearing of 6.86 times as on
March 31, 2015. The ratings take note of the high geographical
concentration risks, with operations being limited to a single
hospital in Ranaghat and risk of retention of doctors which
remains a key challenge in view of heightened competition.
The ratings, however, take cognizance of the longstanding
experience of the promoters in the medical industry, through group
entities, for more than two decades. ICRA further notes the
positive demand outlook for healthcare services in the country,
due to factors such as better affordability through increasing per
capita income, change in demographic profile, and increase in
health insurance penetration. The lack of hospitals offering
advanced medical facilities in the proximity, leads to low
competition risk.
Going forward, the ability of the company to service its debt
obligations in a timely manner and improve its occupancy levels
would be the key rating sensitivities.
Manorama Hospitex Private Limited (MHPL) was established in 2004,
with the objective of setting up a hospital at Ranaghat, West
Bengal, for the advanced healthcare needs of patients in the Nadia
district, and adjoining areas of West Bengal. MHPL was established
under the norms of the National Accreditation Board for Hospitals
& Healthcare Providers (NABH), with a sanctioned approval for a
100-bedded hospital. The hospital commenced operations in January
2015. Currently it operates a multi-specialty hospital, with a
total capacity of 65 beds, treating patients from the districts of
Nadia, Burdwan, South 24 Parganas, and adjoining areas. Major
medical facilities offered by the hospital include consultations,
treatments and surgeries across various medical disciplines.
Recent Results
MHPL reported a profit after tax (PAT) of INR0.30 crore
(provisional) in 6M FY2016 on an operating income (OI) of INR5.91
crore, as compared to a PAT of INR0.34 crore on an OI of INR3.70
crore during FY2015.
MARIGOLD CONSTRUCTIONS: CRISIL Cuts Rating on INR98.4MM Loan to D
-----------------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facilities
of Marigold Constructions (Marigold) to 'CRISIL D' from 'CRISIL
BB-/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Project Loan 98.4 CRISIL D (Downgraded from
'CRISIL BB-/Stable')
Proposed Long Term 1.6 CRISIL D (Downgraded from
Bank Loan Facility 'CRISIL BB-/Stable')
The downgrade reflects delay by Marigold in payment of its project
loan installment on account of weak liquidity driven by low sales
in its ongoing real estate project, Marigold Exotic.
MC faces geographical concentration risk in revenue, and is
susceptible to risks and cyclicality inherent in the Indian real
estate industry. However, it benefits from advanced stage of its
project, and moderate saleability and receipt of customer
advances. Also, its promoters have extensive experience in real
estate development in Mumbai.
MC, set up by Mr. Bharat Prajapati and Mr. Bhavin Sheth in Mumbai,
is a real estate developer. It is developing Marigold Exotic, a
residential project with 30 units at Mulund in Mumbai.
MATHIYAN CONSTRUCTION: ICRA Revises Rating on INR10cr Loan to B-
----------------------------------------------------------------
ICRA has revised its long term rating of [ICRA]B+ to [ICRA]B- on
the INR10.0 crore fund-based facilities of Mathiyan Construction
Pvt Ltd. ICRA has reaffirmed its short term rating of [ICRA]A4 on
the INR24.0 crore non-fund-based facilities of MCPL.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based Limits 10.0 [ICRA]B-; revised
Non Fund Based Limits 24.0 [ICRA]A4; reaffirmed
The ratings revision takes into account the slow pace of execution
owing to approval and site availability related delays, which has
resulted in muted revenue growth in FY15 and also decline in
revenue in 10mFY16. The ratings are also constrained by weak debt
service indicators as depicted by DSCR of 0.86x in FY15 as
compared to DSCR of 1.41x in FY14 resulting from higher repayment
obligations. Further, the ratings take into account MCPL's
stretched liquidity position as reflected in full or over
utilization of working capital limits on account of high inventory
and receivable days (NWC/OI stood at 44% in FY15). The ratings
continue to factor the vulnerability of MCPL's margins to
fluctuations in raw material prices.
The ratings however draws comfort from MCPL's pending order book
of INR81.9 crore which provides revenue visibility over the medium
term, with order backlog/Operating Income (OI) of 1.54x. The
ratings continue to favorably factor in the experience of the
promoters in the field of road construction and the company's
status as a 'Class A' contractor under the Public Works
Departments (PWD) of Uttar Pradesh (U.P.) and Uttarakhand state
governments, which enables it to get repeat orders.
The ability of the company to improve its liquidity position, ramp
up its operating scale while improving its coverage metrics will
be the key rating sensitivities.
Based in Muzaffarnagar, U.P, MCPL was incorporated in 2007 by Mr.
Rajeev Kumar and his brother, Mr. Subhash Chand. The promoters
have experience of more than a decade in the field of
construction. The company mainly undertakes work related to road
construction and maintenance mainly for the PWD.
Recent Results
The company reported an OI of INR58.17 crore and a profit after
tax (PAT) of INR1.78 crore in FY15, as compared to an OI of
INR53.07 crore and a PAT of INR1.51 crore in the previous year.
The company, on a provisional basis, reported an OI of INR35.0
crore for 10m FY16.
MINERVA POULTRY: CARE Reaffirms 'B' Rating on INR6.02cr Loan
------------------------------------------------------------
CARE reaffirms the rating assigned to the bank facilities of
Minerva Poultry Pvt Ltd.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 6.02 CARE B Reaffirmed
Rating Rationale
The rating for the bank facilities of Minerva Poultry Pvt. Ltd.
(MPPL) continued to remain constrained by its small size of
operations, vulnerability of profits to raw material price
movements, its working capital intensive nature of operations and
presence in a highly competitive and fragmented nature of
industry. These factors far outweigh the benefits derived from the
rich experience of the promoters with long track record of
operation and favourable demand prospects for the poultry sector
across India.
The ability of the company to increase its scale of operations
with improvement in profit levels and margins and effective
management of the working capital would be the key rating
sensitivities.
Minerva Poultry Private Limited (MPPL), incorporated in Dec. 2,
1991, was promoted by Meher family of Bolangir (Odisha). The
company is engaged in the business of sale of layer birds and
eggs. MPPL started as a poultry firm in December 1991 and
commenced commercial production in the year 1993. It has its unit
located at Bhadrapali, Dist Bolangir (Odisha) with a present
capacity of 3.0 lacs layer birds with per bird producing around
300 eggs (approx) yearly.
MPPL is basically a family managed business with Mr Dinesh Meher
(B.com), aged 44 years, Managing Director, being at the helm of
affairs. He has an experience of around two decades in this
trade. The day-to-day affairs of the company are looked after by
him, with adequate support from his co-director, Mr Brijesh Meher
[younger brother of Mr Dinesh Meher, (MBA), aged 36 years]
having an experience of over 10 years.
During FY15 [refers to the period April 1 to March 31], the
company reported a total operating income of INR15.49 crore (FY13:
INR11.61 crore) and a net loss of INR0.59 crore (FY13: net loss of
INR0.06 crore). Furthermore, the entity has generated a total
operating income of about INR15.10 crore during 10MFY16.
MINEX INDIA: CRISIL Reaffirms 'D' Rating on INR90MM Cash Loan
-------------------------------------------------------------
CRISIL's rating on the bank loan facility of Minex India continue
to reflect the overutilisation of Minex India's cash credit limits
for more than 30 days owing to the firm's weak liquidity.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 90 CRISIL D (Reaffirmed)
Minex India is vulnerable to cyclical downturns due to the firm's
modest scale of operations in the iron ore industry and its
susceptibility of operating performance to government regulation.
These rating weaknesses are mitigated by the benefits that the
firm is expected to derive from its proprietor's extensive
experience in the steel industry.
About the Firm
Minex was established by Mr. Sabyasachi Pattnaik and his brother,
Mr. Subhrakanta Pattnaik, as a partnership firm in 2005. The firm
trades in iron ore fines. Mr. Sabyasachi Pattnaik manages the
firm's day-to-day operations.
MIR BUILDERS: CRISIL Assigns B+ Rating to INR180MM LT Loan
----------------------------------------------------------
CRISIL has assigned 'CRISIL B+/Stable ' rating to long-term bank
facility of MIR Builders and Developers Private Limited (MIRBDL;
part of MIR group).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term
Bank Loan Facility 180 CRISIL B+/Stable
The rating reflects MIR group's exposure to risks related to
project implementation and saleability of the on-going projects.
The rating also reflects its below-average financial risk profile
marked by high gearing and low networth levels. These rating
weaknesses are partially offset by promoters' extensive industry
experience and established regional presence in Kerala.
For arriving at the rating, CRISIL has combined the business and
financial risk profiles of MIRBDL with its group company MIR
Realtors Pvt Ltd (MIRRPL). This is because the two companies,
together referred to as the MIR group, have business and financial
linkages and a common management.
Outlook: Stable
CRISIL believes that MIR group will continue to benefit, over the
medium term, from the extensive experience and established track
record of its promoters in Kerala's real estate industry. The
outlook may be revised to 'Positive' if MIR group reports higher
than expected customer advances and sale of its projects, thus
improving its financial risk profile. Conversely, the outlook may
be revised to 'Negative' if there are any delays in the
implementation of its upcoming project leading to cost overruns
and significant decline in realisations, or if the MIR group
contracts more-than-expected debt, weakening its financial risk
profile.
Incorporated in the year 2006, MIRRPL is engaged primarily in
residential real estate development in Kerala. Incorporated in the
year 2008, MIRBDL is also engaged in residential real estate
development in Kerala. The group is promoted by Mr. K. Arun Kumar.
NEXT RETAIL: Ind-Ra Withdraws 'IND BB+' Long-Term Issuer Rating
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has withdrawn Next Retail
Ltd's (Next) 'IND BB+(suspended)' Long-Term Issuer Rating. The
agency has also withdrawn the `IND BB+(suspended)' rating on
Next's INR2662.5 million fund-based working capital limits.
The ratings have been withdrawn due to lack of adequate
information. Ind-Ra will no longer provide ratings or analytical
coverage for NRL.
Ind-Ra suspended NRL's ratings on 21 March 2013.
NIMRA EDUCATIONAL: ICRA Assigns 'D' Rating to INR35cr Loan
----------------------------------------------------------
ICRA has assigned the long-term rating of [ICRA]D to INR4.00 crore
cash credit (enhanced from INR3.00 crore) and INR35.00 crore term
loans(enhanced from INR15.00 crore) bank facilities of Nimra
Educational society.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 4.00 [ICRA]D assigned/outstanding
Term Loan 35.00 [ICRA]D assigned/outstanding
The rating action takes into account the constrained liquidity
position on account of significant delays in receivables from the
state government towards fee reimbursement scheme amidst huge
repayments of term loans in near term. The rating also takes note
of intense competition in the industry which could impact the
occupancy in the colleges managed by the society and regulatory
risks involved in the education sector. The assigned rating also
considers small scale of operations of the society, significant
decline in operating margin in FY15 on account of higher employee
costs and decline in revenues, significant repayment obligations
going forward and high working capital intensity leading to
stretched liquidity position. The rating however, takes note of
the significant experience of the promoters, and diversified
portfolio of courses offered by the society from graduation to
masters.
NES was set up in 1991 by Dr. Mohammed Vizarath Rasool Khan under
the Andhra Pradesh Societies Registration Act, 1350 Fasli. The
society operates four colleges in and around Vijayawada in Andhra
Pradesh, offering varied courses, such as bachelor of technology,
bachelor of pharmacy, Master of technology, Master of computer
application, Master of pharmacy and Master of business
administration. Currently, NES operates two engineering colleges,
one pharmacy college, and one business Management College, with
total student strength of 1584. All the colleges are affiliated to
the Jawaharlal Nehru Technical University, Kakinada (Andhra
Pradesh).
Recent Results
The society reported net profit of INR1.24 crore on operating
income of INR12.95 crore during FY2015 as against net profit of
INR4.33 crore on operating income of INR15.77 crore during FY
2014.
RAJVIR INDUSTRIES: CRISIL Cuts Rating on INR547.2MM Loan to 'D'
---------------------------------------------------------------
CRISIL has downgraded its ratings on the bank facilities of Rajvir
Industries Limited (Rajvir) to 'CRISIL D/CRISIL D' from 'CRISIL
B/Stable/CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 495.2 CRISIL D (Downgraded from
'CRISIL B/Stable')
Corporate Loan 61.6 CRISIL D (Downgraded from
'CRISIL B/Stable')
Funded Interest 143.4 CRISIL D (Downgraded from
Term Loan 'CRISIL B/Stable')
Letter of Credit 100.0 CRISIL D (Downgraded from
'CRISIL A4')
Long Term Bank 512.6 CRISIL D (Downgraded from
Facility 'CRISIL B/Stable')
Working Capital 547.2 CRISIL D (Downgraded from
Term Loan 'CRISIL B/Stable')
The downgrade reflects the delays in servicing debt. The delays
are due to weakening of the liquidity with its depressed cash
accrual not being sufficient to meet its debt obligation.
Rajvir has a weak financial risk profile because of high gearing
and subpar debt protection metrics. It has large working capital
requirement, is exposed to intense competition in the cotton and
synthetic yarn business, and susceptibility to volatility in raw
material prices. However, the company benefits from the extensive
experience of the promoters in the textiles industry.
Rajvir was set up in 2004 by Mr. U K Agarwal, Mr. Ritesh Kumar
Agarwal, and their family members. The company manufactures cotton
yarn, synthetic yarn, blended yarn, and melange yarn. It is based
in Hyderabad, Telangana.
RANGA RAJU: CRISIL Reaffirms B+ Rating on INR180MM Cash Loan
------------------------------------------------------------
CRISIL's rating on the long-term bank facilities of Ranga Raju
Rice Mill (RRRM) continues to reflect RRRM's below-average
financial risk profile marked by a small net-worth, high gearing,
and below-average debt protection metrics. The rating also
reflects the firm's modest scale of operations in the intensely
competitive rice milling industry, and susceptibility of its
profitability margins to changes in government regulations and
paddy prices. These rating weaknesses are partially offset by the
extensive experience of RRRM's partners in the rice milling
industry.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 180 CRISIL B+/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that RRRM will continue to benefit over the medium
term from its partners' extensive industry experience. The outlook
may be revised to 'Positive' if the firm registers a sustained
increase in the profitability margins, or there is a substantial
increase in its net-worth on the back of sizeable capital
additions by its partners. Conversely, the outlook may be revised
to 'Negative' in case of a steep decline in the firm's
profitability margins, or significant deterioration in its capital
structure caused most likely by a stretch in its working capital
cycle.
RRRM was set up in 1983 as a partnership firm by Mr. Ranga Raju
and his family members. The firm mills and process paddy into rice
and generates by-products such as broken rice, bran, and husk. Its
rice milling unit is in Palakol, Andhra Pradesh.
RANI AQUA: CARE Reaffirms B+ Rating on INR15.67cr LT Loan
---------------------------------------------------------
CARE reaffirms the rating assigned to the bank facilities of
Rani Aqua Feeds Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 15.67 CARE B+ Re-affirmed
Rating Rationale
The rating assigned to the bank facilities of Rani Aqua Feeds
Private Limited (RAFL) remains constrained by the short track
record and small scale of operations, profitability susceptible to
volatility in the raw material prices, working capital intensive
nature of the business, weak debt coverage ratios and intense
competition in the industry. The rating also factors in decline in
operating income and low cash accruals during FY15 (refers to the
period April 1 to March 31) and debt-funded capex. The rating is,
however, underpinned by the satisfactory track record of the
promoters, proximity to the raw material sources, diversified
product portfolio, moderate capital structure and industry growth
prospects. The ability of the company to increase the operational
efficiency, capacity utilization & profitability and efficiently
manage the working capital are the key rating sensitivities.
RAFL, promoted by Mr K V Surendra and Mr N Ravi, was incorporated
as Pallavi Industries Private Limited (PIPL) on April 2, 2006, and
was subsequently renamed as RAFL on September 2, 2013. RAFL
manufactures and sells paddy (A grade), processed rice, rice bran
crude oil (for further processing to edible oils) and De-Oiled
rice bran (DOB), primarily from rice purchased in the region. The
installed capacity of the plant is 100 Tons per day (TPD) for rice
milling and 150 TPD for the solvent extraction plant.
PIPL was dormant from the date of inception and commenced
operation from November, 2012 with acquisition of assets
of Chaitanya Oil Ltd. (COL), a company engaged in rice milling and
solvent extraction.
During FY15 (refers to the period April 01 to March 31), RAFL
reported PBILDT of INR1.34 crore (FY14 INR 1.48 crore) and APAT of
INR0.07 crore (FY14 INR1.40 crore) on a total operating income of
INR13.44 crore (FY14 INR 19.75 crore).
RATAN SEEDS: Ind-Ra Suspends 'IND B' Long-Term Issuer Rating
------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Ratan Seeds
Private Limited's (RASPL) '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 INR50.00 million fund-based working capital
limits to Long-term 'IND B(suspended)' from 'IND B' and Short-term
'IND A4(suspended)' from 'IND A4'.
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 RASPL.
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.
RENEWSYS INDIA: Ind-Ra Assigns 'IND BB+' Long-Term Issuer Rating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Renewsys India
Private Limited (RIPL) a Long-Term Issuer Rating of 'IND BB+'. The
Outlook is Stable. A full list of rating actions is at the end of
the commentary.
KEY RATING DRIVERS
The ratings reflect the risks associated with the large capex
planned by RIPL and the funding risk as the management proposes to
fund it primarily by equity. The company plans to establish an
integrated solar cell manufacturing set up in India over the next
five years, adding to the current set up of manufacturing a total
of four cell parts currently.
The ratings also reflect RIPL's short operational track record and
moderate credit profile. In its first year of operations in FY15,
revenue was INR719m, net leverage was 5.1x and EBITDA interest
coverage was 4.7x. EBITDA margin was 10.3%. The company has
indicated revenue of INR665 million in 9MFY16 and EBITDA of
INR58m. The credit metrics are likely to deteriorate as the
ongoing capex at the new facility in Hyderabad is funded by
unsecured loans from promoters (INR850m so far) along with equity
(INR1,057m).
However, liquidity is comfortable with RIPL's average peak
utilisation of the fund-based working capital facilities being
78.58% during the 12 months ended December 2015.
RATING SENSITIVITIES
Positive: Commencement of profitable operations at the Hyderabad
plant leading to a substantial increase in the scale while
maintaining the current credit metrics will be positive for the
ratings.
Negative: Time and cost overruns in the ongoing project leading to
sustained stress on the credit metrics or liquidity could be
negative for the ratings.
COMPANY PROFILE
Established in 2014, RIPL manufactures of different solar panel
components.
RIPL's ratings:
-- Long-Term Issuer Rating: assigned 'IND BB+', Outlook Stable
-- INR124.50 million long-term loans: assigned 'IND BB+'/Stable
-- INR5.50 million fund-based facilities: assigned 'IND
BB+'/Stable/'IND A4+'
RIONA LAMINATES: ICRA Suspends 'B' Rating on INR5.01cr Loan
-----------------------------------------------------------
ICRA has suspended [ICRA]B rating reaffirmed to the INR8.01 crore
long term loans & working capital facilities of Riona Laminates
Private Limited. The suspension follows ICRA's inability to carry
out a rating surveillance in the absence of the requisite
information from the company.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based Term Loan 5.01 [ICRA]B suspended
Fund Based Cash Credit 3.00 [ICRA]B suspended
According to its suspension policy, ICRA may suspend any rating
outstanding if in its opinion there is insufficient information to
assess such rating during the surveillance exercise.
Incorporated in 2011, RLPL is promoted by Mr. Kishan Bhalodiya,
Mr. Jayantilal Kanani and Mr. Jaydeep Kanani. The company
manufactures decorative laminates and white inner laminates. The
company's factory premises are located in Morbi (Gujarat) with a
proposed manufacturing capacity of around 90,000 sheets per month.
SANCO INDUSTRIES: Ind-Ra Assigns IND BB- Long-Term Issuer Rating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Sanco Industries
Limited (SIL) a Long-Term Issuer Rating of 'IND BB-'. The Outlook
is Stable.
KEY RATING DRIVERS
The ratings reflect SIL's moderate scale of operations and
moderate-to-weak credit profile. The revenue grew at a CAGR of
38.01% over FY12-FY15 and was INR1,054.15 million in FY15.
Interest coverage (operating EBITDA/gross interest expense) was
1.68x in FY15 (FY14: 1.69x), net leverage (adjusted net
debt/operating EBITDAR) was 3.10x (2.7x) and EBITDA margin were
7.59% (9.63%).
The ratings are constrained by the company's tight liquidity
position with its average maximum utilisation of the fund-based
working capital limit being 100.38% during the 12 months ended
February 2016.
The ratings are however supported by over 25 years of experience
of SIL's promoters in manufacturing PVC pipes, wires and cables
and its established brands namely SATYAM VIKRANT, MARSHALL,
SUPERPLAST and SANCO.
RATING SENSITIVITIES
Negative: Further stress on the liquidity and a decline in the
operating profitability leading to deterioration in the overall
credit metrics could lead to a negative rating action.
Positive: An improvement in the liquidity and operating
profitability along with an improvement in the overall credit
metrics could lead to a positive rating action.
COMPANY PROFILE
SIL manufactures PVC conduit pipes, PVC casing & capping, PVC/ PP-
R Plumbing Pipes, and PVC insulated domestic wires & cables. The
company is also in to the trading of PVC resins and other related
chemicals. The manufacturing facility of SIL is located in Paonta
Sahib, Himachal Pradesh with installed capacities of 6,000MT for
PVC pipes and 36,000km for PVC wires & cables.
SIL's ratings:
-- Long-Term Issuer Rating: assigned 'IND BB-'; Outlook Stable
-- INR180 million fund-based limit: assigned 'IND BB-'/Stable
and 'IND A4+'
-- INR154 million non-fund-based limit: assigned 'IND A4+'
SATGURU AGRO: CARE Assigns 'B' Rating to INR20.50cr Loan
--------------------------------------------------------
CARE assigns 'CARE B' rating to the bank facilities of Satguru
Agro Industries Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term bank facilities 20.50 CARE B Assigned
Rating Rationale
The rating assigned to the bank facilities of Satguru Agro
Industries Limited (Satguru) is constrained by financial risk
profile marked by declining scale of operation, thin profitability
margins, high overall gearing, customer and geographical
concentration, seasonal availibity of raw material (soya bean) and
associated volatility in raw material prices, working capital
intensive nature of operations and presence in the highly
fragmented soya sector leading to competition.
However, the rating derives strength from operational track record
of the company of over 25 years in the soya industry and location
advantage with respect to close proximity of the raw material.
The ability of SATGURU to increase its scale of operations,
improvement in profitability margin, improvement in capital
structure along with effective management of working capital
requirement are the key rating sensitivities.
SATGURU was incorporated in November 1991 at Sholapur
(Maharashtra) which was promoted by the Khaitan family.
During 2004, SATGURU was acquired by current management which
includes- Mr Praffulbhai G. Kalavadia , Mr Dinesh Kumar M.
Kalavadia, Mr Bharatbhai V. Changela, Mr Paresh Kiran Parmar, Mr
Kantilal Naranbhai Padodar and Mr Ashiwin Kumar Dayabhai Zalawadi
(directors).
SATGURU is engaged in the crushing and processing of soya bean
seed for extraction of soya de-oiled-cake (DOC), soya wash oil and
soya refinery with an installed capacity of 250 metric tonnes per
day (MTPD) for soya DOC and 50 MTDP for soya refinery.
During FY15 (Audited; refers to the period April 1 to March 31),
SATGURU reported a total operating income of INR112.48 crore,
PBILDT of INR1.74 crore and a net loss of INR0.47 crore as against
a total operating income of INR130.59 crore, PBILDT of INR2.44
crore and PAT of INR0.15 crore in FY14 (Audited).
SHAKTI INDIA: Ind-Ra Suspends 'IND B+' Long-Term Issuer Rating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Shakti India's
(Shakti) '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 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 Shakti.
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.
Shakti's ratings:
-- Long-Term Issuer Rating: migrated to 'IND B+(suspended)' from
'IND B+'/Stable
-- INR8.54 million term loan outstanding on 31 March 2014:
migrated to 'IND B+(suspended)' from 'IND B+'
-- INR40 million fund-based limits: migrated to 'IND
B+(suspended)' from 'IND B+' and 'IND A4(suspended)' from
'IND A4'
SHANKARANARAYAN JEWELLERS: ICRA Rates INR0.75cr LT Loan at B-
-------------------------------------------------------------
ICRA has assigned a long term rating of [ICRA]B- to the INR0.75
crore fund based facilities of Shankaranarayan Jewellers. ICRA has
also assigned a short term rating of [ICRA]A4 to the INR11.25
crore of non-fund based facilities of SJ.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based facilities
Long Term 0.75 [ICRA]B- (Assigned)
Fund based facilities
Short term 5.50 [ICRA]A4 (Assigned)
Non-fund based
facilities- Short term 5.75 [ICRA]A4 (Assigned)
The assigned rating are constrained by SJ's small scale of
operations and weak financial profile characterized by low
profitability, aggressive capital structure, weak coverage
indicators and high working capital intensity due to high
inventory requirement in wholesale jewellery business and long
operating cycle for manufacture of gold jewellery. Further, the
ratings are constrained by the vulnerability of profitability to
volatility in gold prices; however, mitigated to an extent owing
to back to back purchases against sales and order backed purchase
of gold made by the firm. The ratings factor in the highly
competitive and fragmented nature of the industry with a large
number of organized and unorganized players. The ratings also
factor in the export dominated revenue profile of the firm, which
makes it vulnerable to the volatility in the foreign exchange rate
and also to the risk related to the economic scenario of the
export countries. ICRA takes note of the inherent risks in a
partnership concern including the risk of capital withdrawal as
evident by a withdrawal of INR0.65 Cr in FY15.
The ratings, however, take comfort from the established track
record of the firm and the long standing experience of the
promoters of more than two decades in the jewellery manufacturing
and wholesale business. The ratings also take into account the
strong reputation of the firm in the jewellery business and
established brand presence and customer base in Bangalore and in
Middle East as well as Far East countries. Further, the ratings
factor in the positive demand outlook supported by the recent
positive developments in the industry.
Shankaranarayan Jewellers (SJ) was established in 2001 by Mr. P V
Mahesh as a partnership firm, for manufacturing and wholesale of
gold jewellery with operations based out of Bangalore. The firm
also operates in retail space through its outlet based in
Basavanagudi, Bangalore. The business operations are managed
jointly by Mr. P V Mahesh and his son, Mr. Tejas.
Recent Results
In FY15, the company reported a net profit of INR0.14 crore on an
operating income (OI) of INR45.75 crore as against a net profit
(PAT) of INR0.15 crore on an OI of INR45.94 crore in FY14.
SHREE GANESH: Ind-Ra Suspends 'IND BB' Long-Term Issuer Rating
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Shree Ganesh Feed
Industries' (SGFI) 'IND BB' Long-Term Issuer Rating to the
suspended category. The Outlook was Stable. The rating will now
appear as 'IND BB(suspended)' on the agency's website.
The 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 SGFI.
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.
SGFI's ratings:
-- Long-Term Issuer Rating: migrated to 'IND BB(suspended)' from
'IND BB'/Stable
-- INR2.11 million Term loans: migrated to 'IND BB(suspended)'
from 'IND BB'
-- INR177.00 million Fund-based limits: migrated to 'IND
BB(suspended)' from 'IND BB' and 'IND A4+(suspended)' from
'IND A4+'
SHREE NATH: CRISIL Assigns 'B+' Rating to INR49.8MM Loan
--------------------------------------------------------
CRISIL has assigned 'CRISIL B+/Stable' rating to the long-term
bank facilities of Shree Nath Jee Bakers Private Limited (SNBPL).
The rating reflects SNBPL's average financial risk profile and
modest scale of operations. These weaknesses are mitigated by
promoters' experience, their funding support and low demand risk
due to long-term agreement with established fast-moving consumer
goods company.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 20 CRISIL B+/Stable
Long Term Loan 49.8 CRISIL B+/Stable
Outlook: Stable
CRISIL believes SNBPL will maintain its business risk profile due
to established relationship with key principal. The outlook may be
revised to 'Positive' if financial risk profile improves because
of higher-than-expected cash accrual or infusion of fresh equity
by promoters. Conversely, the outlook may be revised to 'Negative'
if there is any decline in turnover or margins because of reduced
demand from its customer, or if large capital expenditure
constrains cash accrual and debt protection metrics.
Incorporated in 2007, SNBPL is promoted and managed by the Agarwal
family. It commenced commercial operations from March 2009 and is
engaged in contract manufacturing of cookies/biscuits for
customers. The company's manufacturing facility is in Varanasi.
SRI V. N. S.: ICRA Reaffirms C+ Rating on INR12.57cr Loan
---------------------------------------------------------
ICRA has re-affirmed the long-term rating of [ICRA]C+ to the
INR12.57 crore term loan facilities, the INR7.00 crore cash credit
facility, and the INR4.42 crore unallocated facilities of Sri V.
N. S. Spinning Mills India Private Limited. ICRA has also assigned
the short-term rating of [ICRA]A4 to the INR0.50 crore
interchangeable non-fund based facilities and the INR1.01 crore of
Bank Guarantee facilities of SVNS.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
LT-Term loan facilities 12.57 [ICRA]C+/ Re-affirmed
LT- Cash credit facility 7.00 [ICRA]C+/ Re-affirmed
LT-Unallocated facility 4.42 [ICRA]C+/ Re-affirmed
ST-Letter of Credit
facility (0.50) [ICRA]A4/ Assigned
ST-Bank Guarantee
facility 1.01 [ICRA]A4/ Assigned
The ratings take into account the longstanding experience of the
promoters in the textile industry, current order flow from group
entities (into manufacture and export of garments) and SVNS's
presence in both yarn and fabric segments, supporting its
operations through stable order flow. The rating, however, remains
constrained by the weak financial profile, characterized by
stretched capital structure and weak debt coverage indicators
owing to huge accumulated loss and moderate profitability. The
operating margins declined in 2014-15 owing to the increase in
power costs on account of hike in tariff rates. The rating also
considers the company's modest scale of operations, restricting
scale economics and the intense competition prevalent in the
highly fragmented industry, restricting pricing flexibility to an
extent. Going forward, the ability of the company to diversify its
customer base, demonstrate healthy growth in accruals and improve
the debt coverage indicators, would be critical to improve its
overall credit profile and also service the moderately high annual
debt repayment obligation of ~Rs. 3.0 crore in a timely manner.
Sri V.N.S. Spinning Mills India Private Limited (SVNS),
incorporated in the year 2007 by Mr. A. Nataraj and family, is
engaged in manufacturing combed and semi-combed varieties of
cotton yarn in counts ranging from 20s to 40s. SVNS also sells
cotton gray fabric, with the fabric conversion job-work being
completely outsourced. The company has its manufacturing facility
at Tiruppur, Tamil Nadu, with an installed capacity of 14,500
spindles, and is part of the VN Group of Companies with a presence
in the garment industry. SVNS sells nearly 30 - 40% of its
production to its associate concerns, Sri VNS Textiles and VN
Export, and completely caters to the domestic market with a major
focus on Tiruppur and its nearby markets.
TEMPLE CITY: CRISIL Reaffirms 'D' Rating on INR95MM Cash Loan
-------------------------------------------------------------
CRISIL's ratings on the bank loan facility of Temple City
Developers Private Limited (TCDPL) continue to reflect the
overutilisation of TCDPL's cash credit limits for more than 30
days owing to the firm's weak liquidity.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 95 CRISIL D (Reaffirmed)
TCDPL's operating performance is susceptible to government
regulations along with its weak financial risk profile marked by a
small net worth and weak capital structure. These rating
weaknesses are mitigated by the benefits that the firm is expected
to derive from its proprietor's extensive experience.
TCDPL, based in Odisha, was established in 1995 and was taken over
by Mr. Pradeep Kumar Mangaraja in 2003-04 (refers to financial
year, April 1 to March 31) from its earlier promoters. The company
commenced operations in April 2013. TCDPL trades in iron ore fines
and construction materials; its operations are managed by Mr.
Pradeep Kumar Mangaraja and Mr. Bijaya Kumar Pradhan.
TERACOM LIMITED: CRISIL Suspends D Rating on INR2.77BB LOC
----------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of Teracom
Limited (Teracom; part of the Teracom group).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 2615.6 CRISIL D
Cash Credit 1406.3 CRISIL D
Letter of Credit 2778.1 CRISIL D
Long Term Loan 200.0 CRISIL D
The suspension of ratings is on account of non-cooperation by
Teracom with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, Teracom is yet
to provide adequate information to enable CRISIL to assess
Teracom's ability to service its debt. The suspension reflects
CRISIL's inability to maintain a valid rating in the absence of
adequate information. CRISIL considers information availability
risk as a key factor in its rating process as outlined in its
criteria 'Information Availability - a key risk factor in credit
ratings'.
For arriving at its ratings, CRISIL has combined the business and
financial risk profiles of Teracom and its wholly owned
subsidiaries, Nextera Telecom Pvt Ltd (Nextera) and Scantec India
Pvt Ltd (Scantec). The three companies are collectively referred
to herein as the Teracom group.
Teracom was incorporated in March 2002, and promoted by Mr. Mukesh
Arora and Mr. Rajeev Venkatraman. The company commenced operations
by manufacturing optical fibre cables. It diversified into the
telecommunication equipment sector in 2003, by assembling wireless
phones, mobile handsets, modems, and routers. The company has
technical and sourcing tie-ups with many foreign organisations,
such as Huawei Technologies Company Ltd (China) and Sojitz
Corporation (Japan). The assembling operations are carried out
under tenders awarded by telecommunication companies such as
Bharat Sanchar Nigam Ltd, Tata Communications Ltd, and Mahanagar
Telephone Nigam Ltd.
Teracom entered the power sector in 2006-07 (refers to financial
year, April 1 to March 31) with production of low-tension cables
at its Goa facility, and conductors at its Pantnagar (Uttarakhand)
facility, with a combined capacity of 67,000 core kilometres
(ckm). In 2009-10, the company also set up a 5000-ckm high-tension
cable facility in Goa, thereby diversifying its product portfolio.
Teracom also started executing telecommunication and power turnkey
projects in 2006-07.
Scantec is engaged in the power engineering, procurement, and
construction business. Nextera trades in communication equipment,
and procures almost all of its traded goods from Teracom.
TOSHNIWAL INDUSTRIES: CRISIL Assigns 'B' Rating to INR80MM Loan
---------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable/CRISIL A4' ratings to the
bank facilities of Toshniwal Industries Private Limited (TIPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 25 CRISIL B/Stable
Bank Guarantee 40 CRISIL A4
Cash Credit 80 CRISIL B/Stable
The ratings reflects the company's modest scale of operations,
large working capital requirement, and exposure to intense
competition resulting in low profitability margins, and the
susceptibility of its profitability margins to volatility in raw
material prices. The ratings of the company are also constrained
on account of its small net-worth limiting its financial
flexibility and its below-average debt protection metrics. These
rating weaknesses are partially offset by the extensive experience
of the company's promoters in the electronic equipment and
instruments industry.
Outlook: Stable
CRISIL believes that TIPL will continue to benefit over the medium
term from its promoters' extensive industry experience. The
outlook may be revised to 'Positive' if the company registers a
substantial and sustained increase in its profitability margins,
or there is a sustained improvement in its working capital cycle.
Conversely, the outlook may be revised to 'Negative' in case of a
steep decline in the company's profitability margins, or
significant deterioration in its capital structure caused most
likely by a large debt-funded capital expenditure or a stretch in
its working capital cycle.
TIPL was incorporated in 1959 at Mumbai, promoted by the late Dr.
G R Toshniwal and his family members. Currently, the company is
being managed by Mr. Rajeev Toshniwal, Mr. Abhinav Toshniwal, Mrs.
Manju Toshniwal, and Mrs. Priti Toshniwal.
The company manufactures industrial process measurement and
control instruments. It is based in Ajmer, Rajasthan.
TULIP TELECOM: ICRA Reaffirms 'D' Rating on INR150cr Loan
---------------------------------------------------------
ICRA has re-affirmed the long term rating for the INR150 crore NCD
program of Tulip Telecom Limited at [ICRA]D.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Non Convertible
Debentures (NCD) 150.0 [ICRA]D (reaffirmed)
The re-affirmation of the rating takes into account continued
delays on ICRA rated obligations on account of pressure on
liquidity position of the company and significant downscaling of
business. ICRA does not have any latest operational and financial
information on account of lack of co-operation from the company
and absence of any latest updates on stock exchanges.
Incorporated in 1992, by Retd .Lt. Col. H.S. Bedi, as a private
limited company involved in trading of software, Tulip Telecom
Limited (Tulip), formerly Tulip IT Services Limited has since
diversified its operations to other related areas such as selling
of hardware products, network integration, VPN data connectivity
and managed services. The company became a public limited company
and was renamed to Tulip Software Ltd.; the name was further
changed to Tulip IT Services Ltd. in 2002 and to Tulip Telecom
Limited in 2008.
TULSA GAS: CRISIL Reaffirms B+ Rating on INR40MM LT Loan
--------------------------------------------------------
CRISIL's ratings on the bank facilities of Tulsa Gas Technologies
India Private Limited (TGT) continue to reflect the company's
small scale of operations and large working capital requirement.
These rating weaknesses are partially offset by a moderate
financial risk profile because of adequate debt protection
metrics, and promoters' extensive experience in the compressed
natural gas (CNG) dispenser industry.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 30 CRISIL A4 (Reaffirmed)
Cash Credit 20 CRISIL B+/Stable (Reaffirmed)
Inland/Import
Letter of Credit 10 CRISIL A4 (Reaffirmed)
Proposed Long Term
Bank Loan Facility 40 CRISIL B+/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes TGT 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 operating income
resulting in large net cash accrual, moderation in working capital
requirement, and an increase in networth. Conversely, the outlook
may be revised to 'Negative' in case of significant weakening in
liquidity or capital structure on account of a decline in revenue
or pressure on profitability.
Incorporated in 2005, TGT primarily manufactures CNG dispensers,
hydraulic booster compressors, and CNG provers, and assembles
synflex hoses and retail automation software. The company is
promoted by Mr. Ashok Anand. Its factory is in Sonipat, Haryana.
VASWANI INDUSTRIES: Ind-Ra Assigns 'IND BB+' LT Issuer Rating
-------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Vaswani
Industries Limited. (VIL) a Long-Term Issuer Rating of 'IND BB+'.
The Outlook is Stable.
KEY RATING DRIVERS
The ratings reflect VIL's moderate scale of operations as well as
credit metrics, as reflected in its revenue of INR2,548m in FY15
(FY14: INR2,264 million), operating EBITDA interest coverage
(operating EBITDA/gross interest expense) of 1.7x (1.4x) and net
financial leverage (adjusted net debt/operating EBITDAR) of 2.4x
(3.7x).
The ratings are also constrained by the company's tight liquidity
as reflected by its near full working capital utilisation during
the 12 months ended January 2016.
The ratings, however, are supported by VIL's founders' experience
of over two decades in the iron and steel manufacturing business.
RATING SENSITIVITIES
Positive: A substantial improvement in VIL's overall credit
metrics will be positive for the ratings.
Negative: Any deterioration in its overall liquidity profile along
with credit metrics could lead to a negative rating action.
COMPANY PROFILE
Incorporated in 2003 VIL is engaged in power generation and
manufactures sponge iron, steel billets and in Raipur. [SB1] Its
sponge iron is mainly used as raw material to manufacture mild
steel billets/ingots and its captive power plant is used to
provide uninterrupted power supply to its manufacturing plant.
RIIPL's ratings:
-- Long-Term Issuer Rating: assigned 'IND BB+'; Outlook Stable
-- INR400 million fund-based facilities: assigned 'IND BB+';
Outlook Stable
-- INR81.6 million long-term loans: assigned 'IND BB+'; Outlook
Stable
-- INR320 million non-fund-based facilities: assigned 'IND A4+'
VATIKA AGRITECH: Ind-Ra Suspends 'IND B+' Long-Term Issuer Rating
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India Ratings and Research (Ind-Ra) has migrated Vatika Agritech
Pvt Ltd's (VAPL) '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 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 VAPL.
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.
VAPL's ratings:
-- Long-Term Issuer Rating: migrated to 'IND B+(suspended)' from
'IND B+'/Stable
-- INR39.04 million Term loans: migrated to long term 'IND
B+(suspended)' from 'IND B+'
-- INR30 million fund-based cash credit limits: migrated to 'IND
B+(suspended)' from 'IND B+' and 'IND A4(suspended)'
from 'IND A4'
VEDANTA RESOURCES: Moody's Lowers CFR to B2; Outlook Negative
-------------------------------------------------------------
Moody's Investors Service has downgraded Vedanta Resources plc's
corporate family rating to B2 from Ba2.
Moody's has also downgraded the company's senior unsecured rating
to Caa1 from B1.
The outlook on all ratings is negative.
RATINGS RATIONALE
"The downgrade of Vedanta's ratings is driven by the low commodity
price environment that will keep earnings improvement distant, and
a slower correction in leverage metrics than initially
anticipated," says Kaustubh Chaubal, a Moody's Vice President and
Senior Analyst.
The rating actions also incorporate the refinancing risk that the
company faces, in particular, in relation to its debt maturities
during the financial year ending March 2017 (FY2017).
The rating actions reflect Moody's view that there has been a
fundamental downward shift in the mining sector, with the downturn
being deeper and the recovery longer than Moody's had previously
expected, resulting in increased credit risk and weaker credit
metrics for Vedanta, as well as the global mining sector.
Consequently, ratings need to be recalibrated to reflect the
companies' expected performance over a more protracted challenging
operating environment.
Slowing economic growth rates in China materially impact the
demand for base metals and prices globally. Even as the
Government of India's (Baa3 positive) move to raise duties on
imports of aluminum and zinc will raise selling prices in India,
the impact will be modest.
At the same time, the reduction in taxes on the production of oil
to 20% ad valorem ($6-$7 per barrel at current prices) from
INR4,500 per tonne ($9/barrel) will lower the cash cost of
production by some $2-$3/barrel. However, the decline in oil
prices has been so sharp that the reduction in taxes on production
will have a muted impact on Vedanta's earnings.
Vedanta's B2 CFR also reflects refinancing risks associated with
its $2.67 billion debt maturities in FY2017. The company's FY
2017 maturities include $1.9 billion due in the April -- July 2016
period and the balance $0.77 billion due in the remainder of the
year. While the company has so far secured financing for a part
of these debt maturities, the absence of a completely executed
refinancing plan keeps near term liquidity risk imminent.
Moody's recognizes that on a consolidated basis Vedanta has large
cash balances of $8.9 bil. although almost 90% of which is held at
its two listed subsidiaries Hindustan Zinc Ltd (unrated) and Cairn
India Ltd. (unrated).
Furthermore, Vedanta's weak operating performance will result in a
potential breach of some of its covenants in March 2016, requiring
it to request that its lenders provide waivers and relaxations.
While the company has confirmed that it has received lender
approvals for waivers for the next covenant testing date on
March 31, 2016, and relaxations for the periods beyond that date,
the timely receipt of confirmations from its balance lenders is
critical.
The CFR also reflects Vedanta's exposure to volatile commodity
prices, which has led to a sharp decline in its earnings and a
deterioration in its financial profile.
The CFR incorporates Moody's expectation that the weak commodity
price environment will persist and delay any meaningful
improvement in Vedanta's credit metrics, at least over the next 12
months. Absent any improvement in commodity prices beyond Moody's
expectations, equity issuance -- which management has ruled out --
an improvement in leverage will remain contingent on the company's
ability to continue to reduce costs and ramp up production.
Moody's estimates that Vedanta's leverage will be around 5.7x at
March 2016, up from 4.3x at March 2015, and Moody's estimate of
5.2x at Dec. 31, 2015. Looking ahead, Moody's expects production
ramp ups, especially in aluminum in India and copper in Zambia,
and the company's cost reduction initiatives to drive leverage
correction towards 5.0x by March 2017, while remaining free cash
flow positive.
The negative outlook is based on our view that commodity prices
will remain pressured by weakening global macroeconomic growth,
especially in China, and despite Vedanta's low cash cost position,
this will continue to pressure earnings and slower the pace of
leverage correction. The negative outlook also incorporates the
refinancing risk with respect to the group's FY2017 maturities and
rising covenant pressure.
What Could Change the Rating -- Up
A ratings upgrade is unlikely over the next 12-18 months, given
that the ratings outlook is negative.
The ratings outlook could return to stable if commodity prices
recover, or if the company's profits recover close to previous
high levels through cost saving initiatives.
Metrics that could lead to a change in outlook to stable include
adjusted leverage below 4.5x, EBIT/interest above 2.0x, and cash
flow from operations (CFO) less dividends/adjusted debt above
12.5%, all on a sustained basis, while generating positive free
cash flow.
The timely completion of the merger of Vedanta Ltd. with CIL
followed by a substantial debt repayment would also be key for a
revision in the outlook to stable.
What Could Change the Rating -- Down
Failure to complete the refinancing of its FY2017 maturities on a
timely basis or a delay in obtaining covenant waivers or
relaxations from its lenders would result in further downgrades.
Fundamentally Moody's could consider downgrading the ratings if:
(1) weak commodity prices persist, such that Vedanta's
consolidated adjusted 12-month EBITDA drops below $3.5 billion,
despite its efforts to ramp up shipments; (2) the company is
unable to sustain and improve its cost-reduction initiatives, such
that profitability weakens, with consolidated EBIT margins falling
below 10% on a sustained basis; and/or (3) its financial metrics
fail to improve from their current weak levels.
Credit metrics indicative of a downgrade include adjusted
debt/EBITDA in excess of 5.0x-5.5x, EBIT/interest coverage below
1.5x, or cash flow from operations less dividends/adjusted debt
below 12.5%.
An adverse ruling with respect to Cairn India Ltd's (CIL) disputed
$3.2 billion tax liability would also exert negative pressure on
the ratings. CIL is an independent oil exploration and production
company in India, which is 59.9%-owned by Vedanta's subsidiary,
Vedanta Ltd (unrated).
The principal methodology used in these ratings was Global Mining
Industry published in August 2014.
Headquartered in London, Vedanta Resources plc is a diversified
resources company with interests mainly in India. Its core
operations are held by Vedanta Ltd, a 62.9%-owned subsidiary which
produces zinc, lead, silver, aluminum, iron ore and power.
In December 2011, Vedanta acquired control of Cairn India Ltd
(CIL), an independent oil exploration and production company in
India. CIL is a 59.9%-owned subsidiary of Vedanta Ltd.
On June 14, 2015, Vedanta Ltd announced the proposed merger of
Vedanta Ltd and CIL, in a cashless all stock transaction, subject
to approvals. If the merger goes ahead as announced, Vedanta's
shareholding in Vedanta Ltd will fall to 50.1%.
Listed on the London Stock Exchange, Vedanta is 69.8% owned by
Volcan Investments Ltd. For the year ended March 31, 2015,
Vedanta reported revenues of $12.9 billion and EBITDA of $3.7
billion.
VIRENDRA KUMAR: ICRA Reaffirms 'B+' Rating on INR4cr Cash Loan
--------------------------------------------------------------
ICRA has re-affirmed the long-term rating of [ICRA]B+ assigned to
the INR4.00 crore fund based, the INR2.00 crore non-fund based
bank facilities, and the INR0.50 crore untied limits of Virendra
Kumar Singh.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based Limit
Cash Credit 4.00 [ICRA]B+ reaffirmed
Non Fund Based
Limit Bank
Guarantee 2.00 [ICRA]B+ reaffirmed
Untied Limit 0.50 [ICRA]B+ reaffirmed
The re-affirmation of the rating primarily takes into account the
consistent decline in the top-line of the firm during the past two
years along with a moderate order book position, which provides
limited revenue visibility in the near term at least. ICRA notes
the firm's high working capital intensity of operations, owing to
a significant receivables position. The rating continues to be
constrained by a highly competitive business environment,
characterized by the presence of a large number of players along
with a tender-based contract award system, both of which keep
profitability under check. ICRA also notes the high geographical
concentration risk, with the firm's operations being limited to
the state of Chhattisgarh alone.
The rating, however, favorably considers the experience of the
promoter for around four decades in the civil construction
business and its clientele comprising Government and semi-
Government bodies, leading to a relatively low counterparty risk.
Nevertheless, the risks associated with VKS's status as a
proprietorship firm, including the risk of withdrawal of capital,
will remain a credit concern, going forward.
Established in 1972 as a proprietorship firm, VKS is primarily
engaged in the civil construction business. VKS's core area of
operation includes construction of roads, dams and canals. The
firm's operations are limited to the state of Chhattisgarh, with
the firm executing contracts for various Government and Semi-
Government agencies.
Recent Results
VKS reported a net profit of INR0.69 crore (provisional) on an
operating income of INR13.38 crore (provisional) during the first
nine months of 2015-16, as against a net profit of INR0.89 crore
on an operating income of INR17.76 crore during 2014-15.
VISHAL FABRICS: Ind-Ra Suspends 'IND BB+' Long-Term Issuer Rating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Vishal Fabrics
Limited's 'IND BB+' Long-Term Issuer Rating to suspended category.
The Outlook was Stable. The 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 Vishal Fabrics.
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.
Vishal Fabrics' ratings:
-- Long-Term Issuer Rating: migrated to 'IND BB+(suspended)'
from 'IND BB+'
-- IND250 million fund-based limits: migrated to 'IND
BB+(suspended)' from 'IND BB+' and 'IND A4+(suspended)' from
'INDA4+"
-- IND90 million non-fund-based limits: migrated to
'INDA4+(suspended)' from 'IND A4+'
-- IND113.9 million term loan: migrated to 'IND BB+(suspended)'
from 'IND BB+'
=========
J A P A N
=========
TOSHIBA CORP: To Narrow Down Medical Unit's Possible Buyers
-----------------------------------------------------------
Jiji Press reports that Toshiba Corp., mired in an accounting
scandal, is expected today, March 9, to narrow down candidates to
acquire its medical devices unit.
Fujifilm Holdings Corp. and Canon Inc., two of the three bidders
that took part in the second round of tender closed on March 4,
seem to be promising, sources said, Jiji Press relates.
According to the report, sources said the acquisition price
proposed by the third bidder, a consortium of Japanese camera
maker Konica Minolta Inc. and British investment fund Permira, is
lower than those offered by Fujifilm and Canon.
Jiji Press relates that the sources said the value of the
acquisition of Toshiba Medical Systems Corp., based in the city of
Otawara, Tochigi Prefecture, is expected to reach about JPY700
billion.
The report notes that Toshiba's financial health is substantially
deteriorating due to massive costs related to structural reform
measures the company is taking following the accounting fraud.
The company will accelerate its turnaround efforts using the
proceeds from the sale of Toshiba Medical Systems, Jiji Press
says.
A condition attached by Toshiba in the tender is that any winning
bidder should pay 20% of the acquisition price early so that the
company can secure funds necessary for settlements and other
purposes toward the March 31 end of fiscal 2015, the sources, as
cited by Jiji Press, said.
Besides the three bidders, the pair of Japanese trader Mitsui &
Co. and U.S. investment fund Kohlberg Kravis Roberts & Co. also
passed the first round of tender held in late January, but
refrained from taking part in the second round, the report
discloses.
In fiscal 2015, Toshiba expects to report the worst-ever group net
loss of JPY710 billion. Its capital ratio, a gauge for financial
health, is expected to dive to a critical level of 2.6 percent at
the end of March from 17.1 percent a year before, adds Jiji Press.
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.
====================
N E W Z E A L A N D
====================
SOLID ENERGY: 41 Jobs Axed at Firm's West Coast Mine
----------------------------------------------------
Joanne Carroll at Stuff.co.nz reports that Solid Energy will cut
another 41 jobs at its West Coast open-cast Stockton mine.
Current employee numbers at Stockton are 225, down from around
1,100 four years ago, the report notes.
Stuff.co.nz relates that all workers were called to a meeting in
Westport March 8 where managers announced 41 people would be made
redundant.
According to the report, Buller mayor Garry Howard said the
company was restructuring to make it more financially viable for a
buyer.
"I feel for the workers and the families and it's a further hit
for the community but the cuts are necessary so that the company
is in a stronger financial position for sale," the report quotes
Mr. Howard as saying.
He was still hopeful a buyer could be found to keep some jobs in
the community, Stuff.co.nz says.
Stuff.co.nz relates that a statement from Solid Energy said the 41
redundancies were part of "ongoing efforts to improve financial
performance".
Consultation between the mine's workers and management began
Monday afternoon, the company confirmed.
"The proposed changes are part of Solid Energy's ongoing response
to falls in the international price of hard coking coal.
"They build on substantial efficiencies already gained at the mine
and will further strengthen the financial performance of the
operations," the statement said.
Staff members have until March 22 to provide any feedback on the
proposal before a final decision is announced around March 30.
Solid Energy is reviewing whether the Stockton Mine should be
closed due to plunging global coal prices, and has hinted a
decision will be made soon.
The state-owned company, which entered voluntary administration in
August 2015 in a bid to minimise loses to creditors, is undergoing
a complete sale of its assets across New Zealand.
Solid Energy New Zealand Ltd is New Zealand's largest coal mining
company and an investor in research and commercialisation of
sustainable forms of energy that use coal, coal seam gas, biomass,
biodiesel and solar. Solid Energy's core mining business
includes hard coking coal, primarily for export to steel mills
throughout Asia, and thermal coal for the Huntly power station
and other domestic customers in the steel, dairy and cement
industries.
As reported in the Troubled Company Reporter-Asia Pacific on
Aug. 13, 2015, the Board of Solid Energy New Zealand Limited
(SENZ) has placed the company and all associated companies into
voluntary administration, a process which allows the company to
continue trading while creditors consider the best way forward.
KordaMentha partners, Brendon Gibson and Grant Graham have been
appointed Administrators.
Creditors of the Solid Energy Group on September 17 approved a
Deed of Company Arrangement (DOCA) with the Group.
*********
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 ***