/raid1/www/Hosts/bankrupt/TCRAP_Public/160314.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Monday, March 14, 2016, Vol. 19, No. 51
Headlines
A U S T R A L I A
ALDIRECT PLUMBING: First Creditors' Meeting Set For March 21
EASTCOAST PLUMBING: Assets, Business Up For Sale
EMOTIONAL RESCUE: First Creditors' Meeting Set For March 18
G8 DISTRIBUTION: First Creditors' Meeting Set For March 23
MELBOURNE INSTITUTE: First Creditors' Meeting Set For March 22
QUEENSLAND NICKEL: Sacked Workers Will Be Rehired, Palmer Says
REDS EHP 2014-1: Fitch Affirms BB Rating on Class E Notes
SLATER & GORDON: ASX Drops Law Firm From ASX200
C H I N A
CHINA SUNERGY: Fails to Regain NASDAQ Listing Compliance
PARKSON RETAIL: S&P Lowers CCR to 'B'; Outlook Negative
SUNTECH AMERICA: District Asks U.S. Court to Allow $418,000 Claim
TEXHONG TEXTILE: S&P Puts 'BB-' CCR on CreditWatch Positive
I N D I A
ADWAITH TEXTILES: ICRA Reaffirms B+ Rating on INR12cr LT Loan
AGGARWAL AND COMPANY: ICRA Reaffirms B Rating on INR10cr Loan
AMON-RA IMPEX: ICRA Reaffirms B+ Rating on INR5.0cr LT Loan
ARM INFRA: Ind-Ra Suspends B- Long-Term Issuer Rating
BUDS TEA: ICRA Lowers Rating on INR14cr Term Loan to D
CHHATTISGARH STEEL: CARE Cuts Rating on INR47cr LT Loan to 'D'
DESAI INFRASTRUCTURE: ICRA Revises Rating on INR4.5cr Loan to B
DEWAN HOUSING: S&P Assigns 'BB' ICR; Outlook Stable
DHARMARATHINA TEXTILE: ICRA Assigns B+ Rating to INR11.5cr Loan
DR. PURAN: ICRA Suspends B- Rating on INR23.5cr Bank Loan
FLEXI CAPS: ICRA Reaffirms 'B' Rating on INR10cr Cash Loan
HARIOM FLEXIPACK: ICRA Suspends 'B' Rating on INR8.05cr Loan
HARMAN COTTEX: Ind-Ra Assigns 'IND BB-' Long-Term Issuer Rating
IHSANULLA DRYERS: ICRA Suspends B Rating on INR4cr Loan
IND-BARATH ENERGY: CARE Lowers Rating on INR2,833cr Loan to D
KACHCHH VENEERS: ICRA Reaffirms B+ Rating on INR2cr Cash Loan
KAMINENI HEALTH: CARE Lowers Rating on INR18.28cr LT Loan to D
KAMINENI STEEL: CARE Lowers Rating on INR1,777.91cr LT Loan to D
KINGFISHER AIRLINES: IDBI Sanctioned KFA Loan Ignoring Alerts
KISAN PROTEINS: CARE Reaffirms B+/A4 Rating on INR9.5cr Loan
KURINJI SPINNING: Ind-Ra Suspends BB- Long-Term Issuer Rating
L.MADANLAL: Ind-Ra Assigns BB- Long-Term Issuer Rating
M2 INDIA: ICRA Suspends B+ Rating on INR9.5cr Fund Based Loan
MAHARAJA SATHYAM: ICRA Revises Rating on INR5.90cr Loan to B+
MARGO PLYWOOD: CARE Revises Rating on INR0.39cr LT Loan to B+
MG HUSSAIN: ICRA Suspends B/A4 Rating on INR6.16cr LT Loan
NATRAJ INDUSTRIES: ICRA Reaffirms 'B' Rating on INR12cr Loan
NEO PAPER: ICRA Assigns B- Rating to INR10cr Fund Based Loan
PANDOUL FLOUR: ICRA Ups Rating on INR4cr Term Loan to B+
PRATHAMESH CONSTRUCTIONS: CARE Rates INR13.40c LT Loan at B+
PRINCE PROPERTIES: ICRA Reaffirms B+ Rating on INR20cr Loan
PROVENTUS AGER: CARE Assigns B+ Rating to INR13cr LT Loan
RAIGANJ DALKHOLA: CARE Reaffirms D Rating on INR321.63cr LT Loan
RAJASTHAN POWERGEN: CARE Reaffirms B+ Rating on INR6.58cr Loan
RAJDA SALES: ICRA Reaffirms B+ Rating on INR3cr Bank Loan
ROYAL PLAZA: ICRA Lowers Rating on INR10cr Term Loan to 'D'
RUPESH KUMAR: Ind-Ra Assigns B+ Long-Term Issuer Rating
SAGAR NUTRIMENTS: ICRA Assigns B+ Rating to INR53.87cr Loan
SATHYA LIFESTYLE: CARE Lowers Rating on INR10cr LT Loan to D
SHREE RAMDEV: Ind-Ra Assigns B+ Long-Term Issuer Rating
SHREE RAMKRISHNA: CARE Reaffirms B+ Rating on INR9.84cr Loan
SHRI HARE: ICRA Assigns 'B' Rating to INR8.0cr Cash Loan
SHRI SODE: ICRA Suspends 'D' Rating on INR33cr LT Loan
SILVER ENTERPRISE: Ind-Ra Assigns BB Long-Term Issuer Rating
SIMPLEX ENGINEERS: CARE Assigns B+ Rating to INR0.50cr LT Loan
SKA INFRASTRUCTURE: ICRA Suspends D Rating on INR16.95cr Loan
SMARTHA ENTERPRISES: Ind-Ra Affirms B+ Long-Term Issuer Rating
SRI MAHARAJA: ICRA Lowers Rating on INR5cr LT Loan to B+
SRI MAHARAJA REFINERIES: ICRA Lowers Rating on INR10cr Loan to B+
SRI SARAVANA: Ind-Ra Suspends BB+ Long-Term Issuer Rating
SRI SOMESHWARA: ICRA Suspends B+ Rating on INR20cr LT Loan
STAGE DOOR: CARE Reaffirms 'B' Rating on INR8cr LT Loan
VEERAJ CONSTRUCTION: ICRA Reaffirms B Rating on INR3.5cr Loan
VIDS OVERSEAS: CARE Revises Rating on INR0.90cr LT Loan to BB-
J A P A N
* JAPAN: China-Related Bankruptcies Rise 70%
S R I L A N K A
NATIONAL DEVELOPMENT: S&P Affirms B+ ICR, Revises Outlook to Neg.
SRI LANKA: S&P Revises Outlook on 'B+' Sov. Credit Rating to Neg.
SRI LANKA TELECOM: S&P Affirms 'B+' CCR & Revises Outlook to Neg.
- - - - -
=================
A U S T R A L I A
=================
ALDIRECT PLUMBING: First Creditors' Meeting Set For March 21
------------------------------------------------------------
Nathan Deppeler and Matthew Jess of Worrells Solvency & Forensic
Accountants were appointed as administrators of Aldirect Plumbing
& Gas Fitting Pty Limited on March 9, 2016.
A first meeting of the creditors of the Company will be held at
Alice Springs Convention Centre, 93 Barrett Drive, in Alice
Springs, on March 21, 2016, at 2:30 p.m.
EASTCOAST PLUMBING: Assets, Business Up For Sale
------------------------------------------------
Cliff Sanderson at Dissolve.com.au reports that expressions of
interest are sought for the recapitalisation or purchase of the
assets and business of EastCoast Plumbing Group. The company
entered administration on March 4, 2016 with Barry Wight and Bruno
A Secatore from Cor Cordis Chartered Accountants being appointed
administrators, the report discloses.
Dissolve.com.au says the sale offers opportunities including
stores in Lakes Entrance, Malfra and Bairnsdale licenced by
Plumbtec and a Lakes Entrance store licenced by Paint Place. The
buyer or investor will also take control of the property freehold
situated in Lakes Entrance and Malfra, the report notes.
EMOTIONAL RESCUE: First Creditors' Meeting Set For March 18
-----------------------------------------------------------
Brendan Nixon of Stanley Morgan Accountants on March 8, 2016, was
appointed as administrator of:
-- Emotional Rescue Pty Ltd;
-- AWOL Adventures Pty Ltd;
-- CivilTeam Plant Hire Pty Ltd;
-- CTE Construction Pty Ltd;
-- CivilTeam Engineering Pty Ltd; and
-- CivilTeam HR Pty Ltd.
A first meeting of the creditors of the Company will be held at
United Services Club, 183 Wickham Tce, in Spring Hill, Queensland,
on March 18, 2016, at 2:00 p.m.
G8 DISTRIBUTION: First Creditors' Meeting Set For March 23
----------------------------------------------------------
Jonathan Paul McLeod of McLeod & Partners was appointed as
administrator of G8 Distribution Pty Ltd, formerly trading as G8
Distribution, on March 11, 2016.
A first meeting of the creditors of the Company will be held at
McLeod & Partners, Hermes Building, Level 1, 215 Elizabeth Street,
in Brisbane, Queensland, on March 23, 2016, at 10:30 a.m.
MELBOURNE INSTITUTE: First Creditors' Meeting Set For March 22
--------------------------------------------------------------
Ivan Glavas and Matthew Jess of Worrells Solvency & Forensic
Accountants were appointed as administrators of Melbourne
Institute of Training and Technology Pty Ltd on March 9, 2016.
A first meeting of the creditors of the Company will be held at
Worrells Solvency & Forensic Accountants, Level 15, 114 William
Street, in Melbourne, Victoria, on March 22, 2016, at 2:30 p.m.
QUEENSLAND NICKEL: Sacked Workers Will Be Rehired, Palmer Says
--------------------------------------------------------------
Australian Associated Press reports that Deputy Premier Jackie
Trad said difficulties with an environmental authority at Clive
Palmer's north Queensland nickel refinery are no reason for
workers to be sacked.
AAP says the 550 workers have been told their positions will be
terminated on March 11, days after Mr Palmer took back control of
the nickel operation from administrators.
But the new management company, Queensland Nickel Sales Pty Ltd,
doesn't yet have environmental authority from the government, and
the process of transferring the existing authority only began on
March 9, the news agency relays.
According to AAP, Ms Trad said it would normally take about 20
business days to transfer such a licence.
"My understanding is that this is not a reason for Queensland
Nickel Sales to stop operating," AAP quotes Ms Trad as saying.
"This is not a reason for the company to shut down and sack
workers, and that needs to be made abundantly clear."
AAP relates that Ms Trad said the fate of the refinery was in Mr
Palmer's hands.
The state government would expedite its Accelerated Works Program
of almost $300 million to ensure displaced workers had jobs on the
ground, she said, AAP relays.
The report notes that Mr Palmer has promised to rehire the
workers, although he is unsure how long it will take to get the
necessary licences.
"We will be sending a letter to workers at noon (Friday) to update
them on the whole situation," he told the Australian Financial
Review, AAP relays. "But in the event it's decided to bring the
workforce back it will be at least the 550 level, not a lower
level."
The Australian Manufacturing Workers Union has said the employees
have been put through a "whirlwind of uncertainty and hurt," adds
AAP.
Queensland Nickel operates the Palmer Nickel and Cobalt Refinery
in Queensland, Australia. Queensland Nickel directors appointed
John Park, Stefan Dopking, Kelly-Anne Trenfield and Quentin Olde
of FTI Consulting as voluntary administrators on Jan. 18, 2016.
REDS EHP 2014-1: Fitch Affirms BB Rating on Class E Notes
---------------------------------------------------------
Fitch Ratings has upgraded four tranches of Series 2013-1 REDS EHP
Trust (Series 2013-1) and affirmed one for the same transaction.
At the same time, Fitch has affirmed the ratings of all Series
2014-1 REDS EHP Trust (Series 2014-1) and Series 2015-1 REDS EHP
(Series 2015-1) tranches. The transactions are securitisations of
first-ranking small balance auto and equipment loans originated by
BOQ Equipment Finance Limited.
KEY RATING DRIVERS
The three notch upgrade to Series 2013-1's Class B, C, D and E
notes reflects: losses that have been substantially lower than
Fitch's stressed assumptions; an increase in available credit
enhancement (CE) due to sequential pay down of the notes; the
stable credit quality and performance of the pool; Fitch's
expectations of Australia's continued benign economic conditions
in the near term; and excess spread has been strong to date. At
Jan. 31, 2016, 30+ days arrears were 2.97%, with net losses since
close at AUD10.5 mil. or 1.18% of the original pool.
Series 2013-1 experienced two charge-offs to the seller note in
April 2014 and December 2015, both of which were fully paid off in
the following month using excess spread. Due to the charge-off in
December 2015 the transaction reverted to sequential pay for one
month, which led to an increase in the subordination available to
the Class A notes.
The affirmations of Series 2014-1 and Series 2015-1 reflect
Fitch's view that: available CE is sufficient to support the notes
at their current rating levels; the stable credit quality and
performance of the pool; and Fitch's expectations of Australia's
economic conditions.
The transactions' performance falls within Fitch's base-case
expectations. At Jan. 31, 2016, net losses experienced since
closing for Series 2014-1 and Series 2015-1 were 0.9% and 0.07%
respectively, and 30+ days arrears were 1.76% and 0.6%,
respectively. To date, excess spread has been more than
sufficient to cover for losses experienced in Series 2014-1 and
Series 2015-1.
RATING SENSITIVITIES
The prospects for downgrades are considered remote given the level
of subordination and excess spread available on all transactions.
A significant and unexpected increase in delinquencies, defaults
and losses would be necessary before any negative rating action
would be considered.
DUE DILIGENCE USAGE
No third party due diligence was provided or reviewed in relation
to this rating action.
DATA ADEQUACY
Fitch conducted a file review of 10 sample loan files focusing on
the underwriting procedures conducted by BOQ Equipment Finance
Limited compared to its credit policy at the time of underwriting.
Fitch has checked the consistency and plausibility of the
information and no material discrepancies were noted that would
impact Fitch's rating analysis.
The rating actions are:
Series 2013-1 REDS EHP Trust:
AUD111.8 mil. Class A (ISIN AU3FN0019097) notes affirmed at
'AAAsf'; Outlook Stable;
AUD11.1 mil. Class B (ISIN AU3FN0019105) notes upgraded to
'AAAsf from 'AAsf'; Outlook Stable;
AUD8.4 mil. Class C (ISIN AU3FN0019113) notes upgraded to 'AAsf'
from 'Asf'; Outlook Stable;
AUD6.2 mil. Class D (ISIN AU3FN0019121) notes upgraded to 'Asf'
from 'BBBsf''; Outlook Stable; and
AUD12.4 mil. Class E (ISIN AU3FN0019139) notes upgraded to
'BBBsf' from 'BBsf''; Outlook Stable.
Series 2014-1 REDS EHP Trust:
AUD382.4 mil. Class A (ISIN AU3FN0024766) notes affirmed at
'AAAsf'; Outlook Stable;
AUD28.0 mil. Class B (ISIN AU3FN0024774) notes affirmed at
'AAsf'; Outlook Stable;
AUD33.1 mil. Class C (ISIN AU3FN0024782) notes affirmed at
'Asf'; Outlook Stable;
AUD15.3 mil. Class D (ISIN AU3FN0024790) notes affirmed at
'BBBsf'; Outlook Stable; and
AUD15.9 mil. Class E (ISIN AU3FN0024808) notes affirmed at
'BBsf'; Outlook Stable.
Series 2015-1 REDS EHP Trust:
AUD495.6 mil. Class A (ISIN AU3FN0028916) notes affirmed at
'AAAsf'; Outlook Stable;
AUD43.5 mil. Class B (ISIN AU3FN0028924) notes affirmed at
'AAsf'; Outlook Stable;
AUD36.0 mil. Class C (ISIN AU3FN0028932) notes affirmed at
'Asf'; Outlook Stable;
AUD18.0 mil. Class D (ISIN AU3FN0028940) notes affirmed at
'BBBsf'; Outlook Stable; and
AUD18.8 mil. Class E (ISIN AU3FN0028957) notes affirmed at
'BBsf'; Outlook Stable.
SLATER & GORDON: ASX Drops Law Firm From ASX200
-----------------------------------------------
Sarah Danckert at The Sydney Morning Herald reports that
struggling listed law firm Slater & Gordon has suffered another
blow after the Australian Securities Exchange dumped the stock
from its top 200 list.
SMH relates that the removal of Slater & Gordon from the ASX 200
is significant because it means some of the index funds which are
required under their self-imposed mandates to hold shares in ASX
200 stocks will exit the stock.
Slater & Gordon's shares were down nearly 3% to 34.5 cents at
close on the ASX on March 11, the report says.
According to the report, the law firm is in a fight for survival
following a horror 2015 that saw its market capitalisation plummet
from more than AUD2.7 billion to AUD121.6 million on
March 11 following an accounting scandal in its UK arm and weaker-
than-expected growth in both its British business and its
Australian arm.
Slater & Gordon has until April 30 to satisfy its bankers it can
remain as a viable organization, SMH relays. Its financial
advisers from insolvency firm McGrath Nicol are delivering weekly
cash-flow updates to the firm's bankers, the report states.
Fairfax Media earlier this month revealed the firm was under
pressure to settle more cases more quickly to be able to bring
money into the business to improve its cash-flow position.
Earlier this month, Slater & Gordon revealed a AUD958 million
half-year loss as a result of a AUD876 million of write downs, the
majority of which related to its British business Quindell, SMH
recalls.
The report notes that Slater & Gordon now faces the prospect of
two separate class actions over its disclosure record.
Australia-based Slater & Gordon Limited (ASX:SGH) --
https://www.slatergordon.com.au/ -- is engaged in operating legal
practices in Australia and the United Kingdom. The Company
operates through segments, including Slater and Gordon Australia
(AUS), Slater and Gordon UK (UK) and Slater Gordon Solutions
(SGS). The AUS segment conducts a range of legal services within a
geographical area of Australia. The AUS segment also includes
investments, borrowing and capital rising activities. The
Company's UK segment conducts a range of legal services in in the
United Kingdom. The UK segment also includes the investments in
SGS. The SGS segment offers legal services relating to road
traffic accidents, employee liability and noise, including hearing
loss. The SGS segment also provides complementary services in
health and motor services. The Company's business and specialized
litigation services include commercial, estate and professional
negligence litigation and class actions.
=========
C H I N A
=========
CHINA SUNERGY: Fails to Regain NASDAQ Listing Compliance
--------------------------------------------------------
China Sunergy Co., Ltd. on March 9 disclosed that it had received
a letter from the Listing Qualifications Department of the NASDAQ
Stock Market, on March 3, 2016, informing the Company that it
failed to regain compliance with the Listing Rule related to the
maintenance of minimum Market Value of Publicly Held Shares of
US$15,000,000 within a compliance period of 180 calendar days.
As previously disclosed, on Sept. 3, 2015, NASDAQ notified the
Company that for the previous 30 consecutive trading days, the
market value of its publicly held shares had been below the
minimum $15,000,000 required for continued listing as set forth in
Listing Rule 5450(b)(3)(C). Therefore, in accordance with
Marketplace Rule 5810(c)(3)(D), the Company was provided 180
calendar days, or until March 1, 2016, to regain compliance with
the Rule. However, the Company has not regained compliance with
the Rule. Accordingly, its securities will be delisted from The
Nasdaq Global Select Market. In that regard, unless the Company
requests an appeal of this determination, trading of the Company's
American Depositary Shares will be suspended at the opening of
business on March 14, 2016, and a Form 25-NSE will be filed with
the Securities and Exchange Commission, which will remove the
Company's securities from listing and registration on the Nasdaq
Stock Market.
The Company is considering whether it will appeal NASDAQ's
determination to a Hearings Panel. A hearing request will stay
the suspension of the Company's securities and the filing of the
Form 25-NSE pending the Panel's decision. If the Company does not
appeal NASDAQ's determination to the Panel, the Company's
securities may be eligible to continue to be quoted on the OTC
Bulletin Board or in the "Pink Sheets."
China Sunergy Co., Ltd. -- http://www.csun-solar.com-- is a
specialized solar cell and module manufacturer.
PARKSON RETAIL: S&P Lowers CCR to 'B'; Outlook Negative
-------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term corporate
credit rating on China-based department store operator Parkson
Retail Group Ltd. to 'B' from 'BB-'. The outlook is negative. In
line with the rating change, S&P lowered its long-term Greater
China regional scale rating on Parkson to 'cnB+' from 'cnBB+'.
"We lowered the rating because we expect Parkson's leverage to
stay high and profitability to weaken over the next 12 months due
to a weak operating performance amid a challenging retail
environment," said Standard & Poor's credit analyst Shalynn Teo.
"Parkson's cash flows have deteriorated more than we expected over
the past year, and we do not anticipate any material improvement
over the next 12 months."
Parkson's leverage could further increase because S&P expects
intensifying competition and rising labor costs to undermine the
margins. The company's cash flows could also deteriorate over the
next 12 months due to weak same-store sales growth potential,
further reducing its interest coverage. S&P expects Parkson's
debt-to-EBITDA ratio to increase to 7.4x in 2016, from S&P's
estimate of 6.6x in 2015 and 4.9x in 2014. S&P also estimates
that Parkson's EBITDA interest ratio will weaken to 1.5x-2.0x in
2016 and 2017, from about 2.0x in 2015.
In S&P's opinion, Parkson's rapidly reducing cash balance weakens
its debt-repayment capability and liquidity position. S&P expects
the company to continue to incur negative free operating cash
flows due to net working capital cash outflows and continued,
albeit lower, capital expenditure for expansion. As such, S&P
anticipates the company's cash balance could decline to Chinese
renminbi (RMB) 2.4 billion (US$369 million) in 2016, from RMB3.4
billion in 2015 and RMB 4.9 billion in 2014.
In S&P's view, Parkson's weakened operating performance points to
deteriorating operating efficiency amid a slowing economy. S&P
therefore expects growth in same-store sales to stay negative in
2016, following deterioration to a record-low of -8.0% in 2015, a
third consecutive year of decline. S&P expects the company to
close down more underperforming stores in 2016 to improve
efficiency as about 25 out of its existing 56 stores are still
loss-making. On the other hand, Parkson's new stores are facing a
longer breakeven cycle, while sales growth of its mature stores
remains slow due to intense competition and weak consumer demand.
As a result, S&P expects Parkson's EBITDA margin to decline to
34%-36% for the next 12 months from 42.8% in 2014 and S&P's
estimate of about 37% in 2015.
The outlook for the Chinese department store sector remains
challenging over the next 12 months due to rising competition.
While Parkson has been accelerating its strategic transformation,
with increasing direct sales and introduction of lifestyle
concepts, S&P sees limited benefits at this stage and expect
Parkson to continue to face lower margins from the opening of new
stores. However, S&P believes the company's satisfactory brand
name and nationwide store network will continue to support its
business risk profile.
Parkson's cash-generative concessionaire business model may not
work in its favor over the next 12 months, in S&P's opinion. The
company's working capital cash outflows continued to deteriorate
to RMB540 million in 2015, from RMB290 million in 2014, mainly due
to slower concessionaire sales in addition to weak sales of
prepaid cards, which did not offset the redemption of these cards.
The negative outlook for the next 12 months reflects S&P's view
that Parkson's operating performance may further deteriorate amid
slowing consumption growth and intense competition in China. S&P
expects Parkson's leverage to remain high due to weaker operating
cash flows, which cannot fully cover its capital expenditure and
dividend payments.
S&P could lower the rating if Parkson's profitability continues to
deteriorate or cash flow generation remains weak due to high
operating costs and weak store performance. The company's EBITDA
margin dropping consistently below 35% or revenue declining
materially with no signs of improvement would indicate this trend.
A lower group credit profile could also constrain the rating on
Parkson.
S&P could revise the outlook to stable if Parkson's revenue growth
and profitability stabilize and cash flow generation improves.
Improving same-store sales growth and a turnaround of loss-making
stores would be a sign of such a trend.
SUNTECH AMERICA: District Asks U.S. Court to Allow $418,000 Claim
-----------------------------------------------------------------
Banning Unified School District asks the U.S. Bankruptcy Court to
temporarily allow its Claim No. 39 against Suntech America,
Inc., et al., in the amount of $418,000 for the purpose of voting
to accept or reject the Debtors' Plan.
The District tells the Court that Suntech Power Holding Co., Ltd.,
supplied the 220 solar panels that fried and cracked one year
after being installed on the District's new classroom building
roof, which prompted the District to file its claim against the
Debtors on April 13, 2015.
However, the Debtors have not set forth any reason for their delay
in filing an objection until Feb. 19, 2016, after the District has
invested in resources in reviewing and analyzing the Plan and
Disclosure Statement, the District contends.
Furthermore, the Objection provides no evidence to refute the
facts set forth in the Claim, the District added.
Banning Unified School District is represented by:
Lynn Beekman, Esq.
FAGEN FRIEDMAN & FULFROST, LLP
1525 Faraday Avenue, Suite 300
Carlsbad, CA 92008
Telephone: (760) 304-6000
Facsimile: (760) 304-6011
Email: lbeekman@f3law.com
About Suntech America
Suntech America, Inc., and Suntech Arizona, Inc. filed for Chapter
11 bankruptcy protection (Bankr. D. Del. Case Nos. 15-10054 and
15-10056) on Jan. 12, 2015. Judge Christopher S. Sontchi presides
over the case.
Mark D. Collins, Esq., Paul Noble Heath, Esq., William A.
Romanowicz, Esq., Zachary I Shapiro, Esq., at Richards, Layton &
Finger, P.A., serve as the Debtors' bankruptcy counsel. Upshot
Services LLC is the Debtors' claims and noticing agent.
The Debtors estimated their assets at between $100 million and
$500 million, and their debts at between $100 million and $500
million.
Headquartered in San Francisco, California, Suntech America, aka
Suntech Power, an affiliate of Wuxi, China-based Suntech Power
Holdings Corp., was the main operating subsidiary of the Suntech
Group in the Americas and its primary business purpose was acting
as an intermediary for marketing, selling and distributing Suntech
Group manufactured products.
* * *
Judge Christopher Sontchi of the U.S. Bankruptcy Court for the
District of Delaware will convene a hearing on Feb. 25, 2016, at
2:00 p.m. (ET) to consider confirmation of Suntech America, Inc.,
et al.'s Chapter 11 Plan of Liquidation.
The Debtors filed on Feb. 2, 2016, a plan supplement disclosing
that a Plan Administrator to be appointed under the Plan will
receive a flat fee of $20,000 per month. The Plan calls for the
appointment on the Effective Date of Robert Moon, or another
person jointly selected by the Debtors and the Committee as Plan
Administrator. The Plan Administrator is tasked to make
distributions in accordance with the Plan.
Majority of the Debtors' assets have already been liquidated to
cash. The Debtor has $16.3 million in cash and cash equivalents.
A plan settlement provides for the resolution of two significant
disputed claims against the Debtors (The Solyndra Residual Trust's
$1.5 billion Claim and Wuxi Suntech Power Co.'s approximate $145
million Claim). The general unsecured claims of Solyndra and Wuxi
are allowed at $360,441,916 and these claimants have agreed to a
payment of $10,312,500 plus 60% of the total value of any
additional assets, for a 2.86% recovery. Holders of other general
unsecured claims totaling $6 million are slated to recover 30%.
Holders of equity interests will receive the remaining cash after
distribution to holders of allowed claims have been made.
TEXHONG TEXTILE: S&P Puts 'BB-' CCR on CreditWatch Positive
-----------------------------------------------------------
Standard & Poor's Ratings Services placed its 'BB-' long-term
corporate credit rating on Texhong Textile Group Ltd. and the
'BB-' long-term issue rating on its senior unsecured notes on
CreditWatch with positive implications. At the same time, S&P
placed its 'cnBB+' long-term Greater China regional scale rating
on Texhong and the notes on CreditWatch with positive
implications. Texhong is a China-based textile manufacturer with
production bases in China and Vietnam.
"We placed our ratings on Texhong on CreditWatch with positive
implications because the company's financial results for 2015 were
better than we expected," said Standard & Poor's credit analyst
Sophie Lin. "The company's start-up textile project in Xinjiang
is also proceeding faster than we anticipated, with operations
likely to start in the second half of 2016."
S&P estimates Texhong's debt leverage will improve to about 1.8x
in 2015, which will surpass S&P's previous upgrade trigger of
2.0x. Reported gross margin quickly recovered to 18% in 2015 from
12.4% in 2014 after the digestion of higher-cost inventories. The
recovery is also attributable to cotton prices falling more than
the sales price of the company's products. Texhong's proactive
improvement of its product mix also supported the margin
enhancement. S&P will review and revise its base-case assumptions
to reflect the company's updated growth prospects and gross margin
trend.
S&P will also reassess the impact of Texhong's investment and
consolidation of its Xinjiang project. S&P has factored in the
risks of potential deterioration in debt leverage and cash flow
adequacy due to aggressive capacity expansion and operational
challenges related to the entity, but have not directly
consolidated the entity's financials into S&P's base-case
assumptions. Hence, any material discrepancy between S&P's
previous assessments and management's updated expansion plan could
affect the rating.
Texhong's rising exposure to Vietnam may constrain the rating.
S&P will need to assess the company's ability to meet its
obligations in a scenario of Vietnam sovereign stress to evaluate
whether the rating on the company can be higher than that on the
sovereign (BB-/Stable/B). This is because about 45% of Texhong's
capacity and assets are located in Vietnam as of 2015, although
the company generates the vast majority of its revenue in China.
Texhong's capacity and assets in Vietnam will increase, given its
plans to add new capacity of 250,000 spindles in Vietnam in 2016
and to expand into downstream textile business.
"We aim to resolve the CreditWatch placement within the next three
months, once we assess the impact of the consolidation of its
Xinjiang startup entity and its rising exposure to the country and
regulatory risks in Vietnam," said Ms. Lin.
S&P could affirm the rating if it believes Texhong could not meet
all its obligations in a scenario of sovereign stress in Vietnam.
In a less-likely scenario, S&P could also affirm the rating if it
expects Texhong's credit metrics to materially weaken beyond S&P's
estimates due to the more aggressive debt-funded investment in its
Xinjiang entity or a substantial deterioration of its profit
margin.
S&P could raise the rating if: (1) S&P believes Texhong can meet
all its obligations even in a scenario of sovereign stress in
Vietnam; and (2) the company can demonstrate financial discipline
and operational progress in expanding its capacity in Xinjiang,
while maintaining its debt-to-EBITDA ratio at below 3.0x on a
sustained basis on a consolidated basis.
=========
I N D I A
=========
ADWAITH TEXTILES: ICRA Reaffirms B+ Rating on INR12cr LT Loan
-------------------------------------------------------------
ICRA has reaffirmed the long-term rating of [ICRA]B+ outstanding
on the INR4.77 crore (revised from INR14.35) term loans and
INR12.00 crore (revised from nil) fund based facilities of Adwaith
Textiles Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term: Term
loans 4.77 [ICRA]B+/reaffirmed
Long-term: Fund
based facilities 12.00 [ICRA]B+/reaffirmed
The rating continues to factor in the significant experience of
the promoters in the textile industry and the Company's
association with the renowned Lakshmi Machine Works group. The
rating also draws comfort from the improvement in the capital
structure with gearing reducing to 2.9 times as on March 31, 2015
from 4.0 times previously on the back of accruals aiding in term
loan repayment and shoring up the net worth position. The rating
further takes into account the change in the Company's operations
from being a job-work unit for its group company Lakshmi Ring
Travellers (Coimbatore) Limited (LRTCL) to commencement of own
manufacturing operations from the current fiscal which is working
capital intensive. The rating is however, constrained by the
Company's small scale of operations which limits the benefits from
scale economies and financial flexibility. Further, there was a
marginal deterioration in the debt coverage metrics on account of
decline in profit levels during the period. Going forward, the
Company's ability to scale up its operations while protecting its
profit margins and efficiently managing its working capital cycle
will be critical to improving its credit profile.
Incorporated in 1956, ATL is engaged in the manufacturing of
cotton yarn, majorly in the medium to finer counts segment. The
Company is part of the Coimbatore based LMW group. The Company's
manufacturing facility is located in Coimbatore (Tamil Nadu) and
operates with an installed capacity of 28,325 spindles. ATL also
operates a wind mill near Tirupur, Tamil Nadu with a capacity of
1.25 MW. The promoters and their relatives, together, hold the
entire share capital of the Company.
Recent Results
The Company reported a net profit of INR1.2 crore on an operating
income of INR21.7 crore during 2014-15 as against a net profit of
INR1.2 crore on an operating income of INR22.4 crore during 2013-
14.
AGGARWAL AND COMPANY: ICRA Reaffirms B Rating on INR10cr Loan
-------------------------------------------------------------
ICRA has reaffirmed an [ICRA]B rating for the INR10.00 crore cash
credit facility (sublimit of Letter of Credit facility )of
Aggarwal and Company. A rating of [ICRA]A4 has also been
reaffirmed to INR20.00 crore letter of credit facility of AAC.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-Based Limits 10.00 [ICRA]B; reaffirmed
Non-Fund Based Limits 20.00 [ICRA]A4;reaffirmed
The reaffirmation of rating takes into account modest scale of
operation coupled with weak financial profile characterized by low
operating profitability which has further resulted in modest
coverage indicators. The ratings are further constrained by
vulnerability of profitability to fluctuation in prices of steel
scrap which is the key raw material in steel rolling mill. The
ratings are also constrained by vulnerability to risk of exchange
rate fluctuations given the substantial dependence on import of
coking coal. ICRA also notes that AAC is a partnership firm and
any significant withdrawals from the capital account would affect
its net worth and thereby its capital structure.
The ratings, however, favourably takes into account vertically
integrated nature of operations with involvement of group entities
in steel rolling business as well as manufacture of low ash
metallurgical coke.
Aggarwal and Company (AAC) is a partnership firm and part of the
Bhavnagar based Aggarwal group which is promoted and managed by
Mr. Balkrishna Aggarwal and other family members. AAC is currently
engaged in steel rolling business as well as trading of coking
coal. Apart from AAC, other Aggarwal group entities are involved
in steel re-rolling, ship breaking as well as manufacturing of low
ash metallurgical coke.
Recent Results
For the year ended 31st March 2015, Aggarwal and company reported
an operating income of INR50.09 crore and profit after tax of
INR0.09 crore.
AMON-RA IMPEX: ICRA Reaffirms B+ Rating on INR5.0cr LT Loan
-----------------------------------------------------------
ICRA has reaffirmed the long term rating of [ICRA]B+ for INR0.50
crore, long-term, fund based facilities and INR11.67 crore,
unallocated bank lines of Amon-Ra Impex Private Limited. ICRA has
also reaffirmed a rating of [ICRA]A4 for INR7.83 crore, short-
term, non-fund based facilities and INR11.67 crore, unallocated
bank lines of the company.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term, fund
based facilities 5.00 [ICRA]B+ Reaffirmed
Long-term/Short-
term unallocated 11.67 [ICRA]B+/[ICRA]A4 Reaffirmed
Short-term, non-
fund based 7.83 [ICRA]A4 Reaffirmed
The rating reaffirmation continues to take into account the long
experience of promoters in the trading business and low working
capital intensive nature of business ensuring low dependence on
external borrowings. The ratings, however, are constrained by the
small scale of trading operations, limited bargaining power with
the trade partners and low-value add, import-based trading
operations with weak margins. Further, the margins remain
susceptible to raw material price movements during shipping and
forex volatility on unhedged payables.
Amon-Ra Impex Private Limited was incorporated in 1995 as a
trading partner and an indenting agent for Hanhwa Group (based in
Korea) of Companies' products in India (Fortune 500 Company). The
company imported tiles and floorings initially and thereafter
started importing other products namely PVC co-polymer resings
such as CP-450 and P-450 and battery separation chemical KBM-4,
all manufactured by the Hanhwa Group companies. The company has
recently started importing fabrics used in structural designs like
canopies and frame / air supported structures found at Hotel
entrances, stadiums and airports from Hiraoka, Japan. The company
has two warehouses in Bhiwandi on lease basis.
Recent Results
As per audited results for FY 2015, Amon-Ra reported a profit
after tax (PAT) of INR0.11 crore over an operating income of
INR20.87 crore as against a loss of INR0.32 crore on an OI of
INR19 crore in FY 2014.
ARM INFRA: Ind-Ra Suspends B- Long-Term Issuer Rating
-----------------------------------------------------
India Ratings and Research (Ind-Ra) has suspended ARM Infra
Projects Private Limited's Long-Term Issuer Rating of 'IND B-'
with a Stable Outlook. The rating will now appear as 'IND B-
(suspended)' on the agency's website. The agency has also
migrated ARM's INR250.00 mil. long-term loans to 'IND B-
(suspended)' from 'IND B-'.
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 ARM.
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.
BUDS TEA: ICRA Lowers Rating on INR14cr Term Loan to D
------------------------------------------------------
ICRA has revised the long-term rating for the INR14.00 crore term
loan facilities, the INR12.75 crore fund based facilities and the
INR0.50 crore non-fund based facilities of Buds Tea Industries
Limited from [ICRA]B+ to [ICRA]D.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term Loan 14.00 [ICRA]D downgraded from
[ICRA]B+
Fund Based 12.75 [ICRA]D downgraded from
[ICRA]B+
Non Fund Based 0.50 [ICRA]D downgraded from
[ICRA]B+
The revision in the ratings primarily considers the delays
observed in timely servicing of debt obligations by the company.
The rating also takes into consideration the significant
deterioration in the financial risk profile of the Limtex Group as
a whole, and primarily the flagship company, Limtex India Limited
(rated at [ICRA]D/D), which incurred significant cash losses
during FY2015. This was mainly due to an increase in tea
procurement cost relative to its tea realization. The rating also
factors in the decline in the net profit margins of BTIL during
FY2015 on account of high financial costs charged during FY2015,
which were capitalized till FY2016. The rating is further
constrained by the aggressive capital structure of the company;
although a large part of the debt is in the form of interest free
unsecured loans from promoters. The highly working capital
intensive nature of operations, which exerts pressure on the
liquidity position of the company, as reflected by almost full
utilization of the working capital limits every month is yet
another credit concern. The ratings also continue to factor in the
experience of the promoters in the tea industry, coupled with a
diversified Group profile with four tea gardens and seven bought
leaf factories along with tea trading operations and its
established distribution network in eastern India, which supports
revenue growth.
Buds Tea Industries Limited was established in the year 2006 and
is engaged in manufacturing CTC variety of tea. The plant is
located near Jalpaiguri, West Bengal. At present the annual
capacity of the company is 5.5 million lakh kg of tea.
Recent Results
The company reported an operating income (OI) of INR58.33 crore
and a net profit of INR0.08 crore during FY2015, as compared to an
OI of INR27.81 crore and a PAT of INR0.23 crore during FY2014.
CHHATTISGARH STEEL: CARE Cuts Rating on INR47cr LT Loan to 'D'
--------------------------------------------------------------
CARE revises ratings assigned to bank facilities of Chhattisgarh
Steel & Power Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 47 CARE D Revised from
CARE B+
Short term Bank Facilities 15 CARE D Revised from
CARE A4
Rating Rationale
The revision in the ratings to the bank facilities of Chhattisgarh
Steel & Power Ltd (CSPL) factors in the instances of the on-going
delay in servicing of its debt obligations on account of the
stressed liquidity position of the company. The ability of the
company to improve its liquidity and regularize its debt servicing
will be the key rating sensitivity.
Incorporated in 2003, CSPL belongs to the Raipur-based SBL group.
The company is currently running a thermal power plant of 30 MW
and a Ferro Alloy Plant of 30,000 MTPA.
During FY14 (refers to the period April 1 to March 31), CSPL
reported a loss of INR15.41 crore (loss of INR12.05 crore in FY13)
on a total operating income of INR37.89 crore (INR27.77 crore in
FY13). In M11FY15, CSPL reported a PAT of INR0.22 crore on a total
operating income of INR116.92 crore.
DESAI INFRASTRUCTURE: ICRA Revises Rating on INR4.5cr Loan to B
---------------------------------------------------------------
ICRA has revised the long-term rating to [ICRA]B from [ICRA]B+ for
INR4.50 crore fund-based cash credit facility of Desai
Infrastructure Private Limited. ICRA has also reaffirmed the
short-term rating to INR5.50 crore non fund based bank guarantee
facility of DIPL.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Fund 4.50 Revised to [ICRA]B
Based-Cash Credit from [ICRA]B+
Short Term Non 5.50 [ICRA]A4; reaffirmed
Fund Based-Bank
Guarantee
The ratings revision takes into consideration the consistent
delays in project execution and billings over the last two fiscals
which has resulted in low revenue booking and accumulating
inventory and debtors. As a result, working capital intensity has
shot up in FY15 resulting in high reliance on working capital
borrowing which in turn has led to increase in financial charges
and losses. The ratings however also remained constrained by high
competitive intensity in the construction space resulting in
pressure on margins, geographical concentration risk due to
concentration of most of ongoing and future projects in Gujarat
and vulnerability of profitability to raw material price
variation, although the same is mitigated to a large extent on
account of the presence of a price escalation clause in the
contracts. Further, the ability of the company to maintain
execution timelines and performance parameters because of the
Liquidated Damages (LD) clause present in the contracts remains
critical.
The ratings however favorably factors in the past experience of
the promoters in the civil construction business, status of "AA"
class registration with Surat Municipal Corporation as well as the
reputed client portfolio consisting of government, semi government
agencies and private sector players.
Desai Infrastructure Private Limited was incorporated in the year
2001 as private limited company by Mr. Kirtidev Desai, Mr. Sanjay
Desai, and Mr. Jatin Naik. DIPL is primarily engaged in the civil
construction projects such as construction of commercial
buildings, factory outlet building, residential buildings
(township), corporate club etc. It provides construction service
to corporate, government, semi government and private sector
clients.
Recent Results
For the year ended March 31, 2015, the company reported an
operating income of INR11.57 crore with losses at net level of
INR0.07 crore.
DEWAN HOUSING: S&P Assigns 'BB' ICR; Outlook Stable
---------------------------------------------------
Standard & Poor's Ratings Services said it has assigned its 'BB'
long-term issuer credit rating to India-based Dewan Housing
Finance Corp. Ltd. (DHFL) The outlook is stable.
The rating on DHFL reflects the company's adequate capitalization,
average earnings, and sound risk management practices. The
company's high reliance on wholesale borrowing, small size, and
limited diversity, in part due to its monoline business nature,
temper these strengths.
Similar to other financial institutions operating in India, DHFL
benefits from the country's low economic imbalances, intermediate
private sector leverage, and moderate competition. However, these
financial institutions are exposed to challenges posed by a low-
income economy, weak foreclosure law, and lack of access to
central bank funding. S&P assess DHFL's stand-alone credit
profile to be 'bb'.
S&P's 'bb' anchor for finance companies (fincos) in India is two
notches below the bank anchor derived from S&P's Banking Industry
Country Risk Assessment for India. The two notches reflect S&P's
view that fincos in India face greater industry risk than banks
because fincos usually have no access to central bank funding,
have lower barriers to entry, and less stable revenues. Fincos
are also subject to less onerous bank regulations, notwithstanding
some requirements on capital adequacy, liquidity, and asset-
liability management.
S&P's assessment of DHFL's business position reflects the
company's small market share in the housing finance industry and
average earnings. DHFL is the third-largest housing finance
company in India in terms of assets under management. Its current
market share is about 4% in terms of outstanding housing loans by
banks and housing finance companies. It also offers life insurance
products through DHFL Pramerica Life Insurance Ltd. (a joint
venture with Prudential Financial Inc. of USA) and education loans
through an associate company, Avanse Financial Services Ltd. The
DHFL promoter has interests in the real estate business too.
However, S&P currently do not factor in any contingent liability
from this business because it is under a different holding
company. Wadhawan Global Capital Pvt. Ltd. (DHFL's immediate
parent) holds only the finance businesses. Additionally, S&P
understands that DHFL doesn't have any business dealings with the
real estate arm. The branding of both entities is also different.
DHFL's revenue profile is average, with interest income and fee
income together accounting for more than 90% of net revenue over
the past five years. The company's management and governance is
fair, in S&P's view. DHFL has grown aggressively in the past via
acquisitions, although growth has moderated in the past two years.
Also, in S&P's view, there have been instances of the use of
relaxed accounting, such as using share premiums to write off the
interest on a part of its zero-coupon bonds. While DHFL's
accounting policy related to interest income on zero-coupon bonds
complies with the local regulatory requirement and is in line with
the industry practice, it is not in line with international best
practices, wherein all charges are taken via the profit and loss
statement.
The stable outlook on DHFL reflects S&P's view that the company
will maintain its financial performance over the next 12-24
months.
S&P may downgrade DHFL if the company's RAC ratio falls below 7%
on a sustained basis. This could happen if DHFL grows
aggressively--either organically or inorganically--and is unable
to support this growth with sufficient capital infusion, or if
economic risk in India rises. S&P may also lower the rating if
DHFL's asset quality weakens substantially, which S&P views as
unlikely over the next 12-18 months.
The rating has no upside potential in the next 12-24 months, in
S&P's view.
DHARMARATHINA TEXTILE: ICRA Assigns B+ Rating to INR11.5cr Loan
---------------------------------------------------------------
ICRA has assigned a long-term rating of [ICRA]B+ to the INR11.50
crore term loan facilities and INR5.50 fund based facilities of
Dharmarathina Textile Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term- Term
Loans 11.50 [ICRA]B+ assigned
Long term- Fund
based facilities 5.50 [ICRA]B+ assigned
The assigned rating takes into account the significant experience
of the promoters in the textile industry and the healthy growth in
the Company's operating income (albeit on a low base). The rating
also factors in the healthy operating profit margins given the
Company's considerable presence in the finer counts segment. The
rating is however, constrained by the Company's stretched debt
metrics on account of the high debt-funded capex incurred towards
capacity expansion. The rating is also constrained by the
relatively small scale of operations which limits the benefits
from scale economies and financial flexibility. Coupled with the
intense competition arising from the highly fragmented nature of
the domestic spinning industry, this also limits the Company's
pricing flexibility. The rating also considers the high geographic
and customer concentration risk as top customers account for more
than 50% to total sales. However, the Company has established
long-term relationship with the customers who have been giving
repeat order mitigates the risk to an extent. Going forward, the
key rating consideration would be the Company's ability to improve
its profit margins while sustaining the growth momentum.
Dharmarathina Textile Private Limited was established in the year
2005 as a private limited company and is engaged in the business
of manufacturing of cotton yarn. The Company manufactures medium
counts to finer counts yarn and mainly caters to domestic market.
The Company's manufacturing facility is located in Aruppukkottai
(Tamilnadu) and operates with an installed capacity of 21,600
spindles. Mr. Raj Naveen is the director of the company and looks
after entire operations.
Recent Results
The Company reported a net profit of INR0.4 crore on an operating
income of INR25.0 crore during 2014-15 as against a net profit of
INR0.2 crore on an operating income of INR17.1 crore during 2013-
14.
DR. PURAN: ICRA Suspends B- Rating on INR23.5cr Bank Loan
---------------------------------------------------------
ICRA has suspended the [ICRA]B- rating for the INR23.50 Crore bank
facilities of Dr. Puran Chand Dharmarth Trust. The suspension
follows ICRA's inability to carry out a rating surveillance in the
absence of the requisite information from the company.
FLEXI CAPS: ICRA Reaffirms 'B' Rating on INR10cr Cash Loan
----------------------------------------------------------
ICRA has reaffirmed its long-term rating at [ICRA]B on the
INR19.30 crore long term fund based facilities and its rating of
[ICRA]A4 on the INR5 crore short-term non fund based facilities of
Flexi Caps and Polymers Private Limited (FCPPL). ICRA has also
reaffirmed its rating at [ICRA]B/A4 to the INR0.45 crore
unallocated limits of FCPPL.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based Limits-
Term Loan 9.30 [ICRA]B; reaffirmed
Fund Based Limits-
Cash Credit 10.00 [ICRA]B; reaffirmed
Non Fund Based
Limits- Letter of
Credit 5.00 [ICRA]A4; reaffirmed
Unallocated Limits-
Long Term/Short Term 0.45 [ICRA]B/A4; reaffirmed
The ratings reaffirmation of Flexi Caps and Polymers Private
Limited (FCPPL) takes into account the delay in the commencement
of the project due to the delay in the installation of machinery
from October 2015 to February 2016. The ratings are constrained by
the start-up nature of the company and high reliance on debt for
funding the initial project cost (D/E of 2.19:1). The company's
debt servicing capability remains vulnerable to a slower than
expected ramp up of sales. The rating is also constrained by the
modest size of the company's envisaged operations, the
vulnerability to fluctuation in raw material prices, exposure to
foreign exchange fluctuation risk and the competition from
organised as well as unorganised players in the fragmented
flexible packaging industry.
However, the ratings favourably factor in the long and established
track record of promoters through presence of group companies in
packaging business and also favourable demand prospects for the
packaging industry driven by increasing consumerism, fast growing
retail sector, changing lifestyle and rising demand from the rural
sector.
Going forward, the ability of the company to stabilise operations,
establish its product in the domestic market and generate healthy
profit margins would be some of the key rating drivers.
Incorporated in August 2012, FCPPL is promoted by Chordia Family
of Indore with Mr Rajesh Chordia and Mr Ajay Chordia as its
directors. The company belongs to a well established group having
long standing of around two decades in packaging industry. The
company proposes to manufacture low-density polyethylene (LDPE)
and poly-vinyl chloride (PVC) films which will find application in
the pharmaceutical and food packing industry. The plant will be
located in Indore with proposed installed capacity of 7500 metric
tonnes per annum (MTPA). The company will be shall eligible for
various sops & fiscal benefits from the state government viz.
Capital Investment Subsidy @15%, maximum INR10 Lac from State
Government, Exemption from Electricity Duty for 5 years, 75% VAT
Refund for 10 years under Industry Investment Promotion Scheme,
Entry Tax Exemption for 5 years etc.
HARIOM FLEXIPACK: ICRA Suspends 'B' Rating on INR8.05cr Loan
------------------------------------------------------------
ICRA has suspended the long term rating of [ICRA]B assigned to the
INR8.05 crore long term fund based facilities of Hariom Flexipack
Industries. The suspension follows ICRA's inability to carry out a
rating surveillance in the absence of the requisite information
from the company.
Established in 2010, HFI is engaged in manufacturing of laminated
packaging material such as Printed Laminated Rolls, Pouches, Soap
Wrappers and Poly Coated Papers. The firm mainly caters to the
FMCG industry and the products manufactured by the firm find their
application in packaging of soaps, spices, grocery, wafers, and
food products etc. The manufacturing facility of the firm is
located in Kolhapur, Maharashtra. The firm is promoted by Mr.
Vijay Rohida and Mr. Sham Rohida. Rohida group is based out of
Kolhapur and has established track record in plastic bags and
flexible packaging business.
HARMAN COTTEX: Ind-Ra Assigns 'IND BB-' Long-Term Issuer Rating
---------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Harman Cottex
(HC) a Long-Term Issuer Rating of 'IND BB-'. The Outlook is
Stable.
KEY RATING DRIVERS
The ratings reflect Ind-Ra's expectation of a sustainable
improvement in HC's scale of operations and credit profile by
FYE16 on the back of steady revenue growth owing to the increase
in the company's sales volume and improvement in credit metrics.
In FY15, the company reported revenue of INR616 mil., EBITDA
interest coverage of 1.8x and net financial leverage of 4.8x. The
EBITDA margins were 2.5%. Liquidity has been comfortable as
reflected by the company's average utilization of working capital
limits being 80% in the last 12 months ended December 2016.
The ratings also take into account the company's presence in a
highly competitive industry which is vulnerable to fluctuations in
the price of raw cotton.
The ratings however benefit from its founders' experience of more
than two decades in the cotton ginning business.
RATING SENSITIVITIES
Positive: A positive rating action could result from substantial
improvement in the scale of operations along with improvement in
the credit metrics of the company.
Negative: A negative rating action could result from deterioration
in the credit metrics.
COMPANY PROFILE
Incorporated in 2007,HC is promoted by Puneet Group of Khargone,
Madhya Pradesh, and is a proprietorship concern of Mr. Rasdeep
Singh Chawla. It is primarily engaged in ginning and pressing of
cotton at its manufacturing unit on Bistan Road, Khargone. It has
44 ginning machines and can process 30000 tonnes of seed cotton
every year.
SIPL's ratings:
-- Long-Term Issuer Rating: 'IND BB-'; Outlook Stable.
-- INR140.00 mil. fund-based working capital limits: assigned
'IND BB-'/Stable.
IHSANULLA DRYERS: ICRA Suspends B Rating on INR4cr Loan
-------------------------------------------------------
ICRA has suspended the long term rating of [ICRA]B assigned to the
INR4.00 crore fund based facilities of Ihsanulla Dryers.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based limits 4.00 [ICRA]B suspended
The suspension follows ICRA's inability to carry out a rating
surveillance in the absence of the requisite information from the
company. According to its suspension policy, ICRA may suspend any
rating outstanding if in its opinion there is insufficient
information to assess such rating during the surveillance
exercise.
IND-BARATH ENERGY: CARE Lowers Rating on INR2,833cr Loan to D
-------------------------------------------------------------
CARE revises the rating assigned to bank facilities of Ind-Barath
Energy (Utkal) Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 2,833 CARE D Revised from
CARE BB+
Rating Rationale
The revision in the ratings assigned to the bank facilities of
Ind-Barath Energy (Utkal) Limited (IBEUL) is on account of
stretched liquidity position led by delay in commencement of
operations and delay in debt tie up for funding the cost overrun
in the project resulting in delays in servicing of debt
obligations.
Ind- Barath Energy (Utkal) Limited (IBEUL) belongs to Ind-Barath
group and is a subsidiary (64%) of Ind- Barath Power Infra Limited
(IBPIL), the flagship company of the group. IBEUL incorporated in
April 2008 with the objective of setting up a 700 MW (2*350 MW)
coal based thermal power plant at Sahajbahal, Jharsuguda District
in Orissa. The project was earlier envisaged to achieve Commercial
Operations Date (COD) on June 30, 2013. However, due to delay in
civil works and due to delay in completion of transmission lines &
grid synchronization, the project COD was further revised to March
31, 2015.The project got further delayed and subsequently the grid
synchronization for Unit I was completed on June 27, 2015 and the
expected date of COD for Unit I was revised to January 15, 2016
and that for Unit II was revised to March 31, 2016. Unit I was
fired with coal on June 27, 2015 and is operational under low load
and has been supplying power to GRIDCO since then on variable cost
basis. However Unit I is yet to ramp up the capacity to full load
and is expected to achieve COD by end of March 31, 2016.
The aggregate project cost is INR4464.20 crore (revised from
INR4001.30 crore) being financed through debt of INR3310.66 crore
(revised from INR2968.91crore) and equity of INR1153.54 crore
(revised from INR1032.39crore) with debt to equity of 2.87:1. As
per CA certificate dated December 16, 2015, IBEUL incurred total
cost of INR4157.9 crore (93.67% of the revised total project cost)
funded from debt of INR3050.11 crore and equity of INR1131.55
crore. Promoters have brought in equity of INR1131.55 crore up to
December 15, 2015.
KACHCHH VENEERS: ICRA Reaffirms B+ Rating on INR2cr Cash Loan
-------------------------------------------------------------
ICRA has reaffirmed the long-term rating assigned to the INR2.00
crore cash credit facility (sublimit to cash credit) of Kachchh
Veneers Private Limited at [ICRA]B+. ICRA has also reaffirmed the
short term rating of [ICRA]A4 assigned to INR17.00 crore short
term facility of KVPL.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit (2.00) [ICRA]B+ reaffirmed
Letter of Credit 17.00 [ICRA]A4 reaffirmed
The reaffirmation of the ratings takes into account the weak
financial risk profile of Kachchh Veneers Private Limited (KVPL),
characterized by weak profitability, low return indicators and
moderate coverage indicators as well as modest scale of company's
operations. The ratings also factor in the highly competitive
business environment on account of the fragmented industry
structure and low entry barriers for new players as well as
availability of cheaper substitutes like domestic pine and poplar
in case of core veneer. The ratings are further constrained by the
vulnerability of profitability to adverse fluctuations in imported
timber prices and exposure to currency fluctuations in the absence
of a formal hedging policy given the company's high dependence on
imports.
The ratings, however, favourably factor in the long track record
of the promoter group in the timber business coupled with the
group presence across the timber value chain which benefits in
terms of marketing and cross selling activities. The ratings also
take into consideration the location advantage in terms of
sourcing of timber, arising due to the presence of the
manufacturing facility in close proximity to Kandla port.
Incorporated in 1997, Kachchh Veneers Private Limited (KVPL) is
engaged in the business of trading timber logs and manufacturing
of veneer, plywood, block board, flush door and other related
products. The company is part of the "Goyal Group" who have long-
standing experience in the manufacture of timber products, plywood
and veneers and is based out of Gandhidham (Kutch District of
Gujarat), near Kandla Port. The other entities operating under the
"Goyal Group" includes, Lohit Boards & Panels Private Limited,
Dolby Plyboards Private Limited, Prestige Veneers Private Limited,
Goyal Timber Trades, Cha Indica Private Limited, and Loang Tong
Tea Company.
Recent Results
For the year ended March 31, 2015, the company reported an
operating income of INR20.61 crore and profit after tax of INR0.23
crore against operating income of INR30.25 crore and profit after
tax of INR0.23 crore for the year ended March 31, 2014. For
10MFY16 (provisional financials), the company has reported an
operating income of INR20.61 crore and profit before depreciation
and tax of INR0.28 crore.
KAMINENI HEALTH: CARE Lowers Rating on INR18.28cr LT Loan to D
--------------------------------------------------------------
CARE revises ratings assigned to bank facilities of Kamineni
Health Care Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 18.28 CARE D Revised from
CARE BB
Rating Rationale
The revision in the rating assigned to the bank facilities of
Kamineni Health Care Private Limited (KHC) takes into account the
delays in debt servicing on account of stressed liquidity
position. The ability of the company to improve its liquidity and
regularize its debt servicing will be the key rating sensitivity.
Kamineni Health Care Private Limited (KHC), was incorporated in
December 2007 and has been promoted by Mr Kamineni Shashidhar. KHC
started its operations in August 2014 by setting up a super-
specialty hospital in Vijayawada, Andhra Pradesh. Currently, the
hospital has operating capacity of 300 beds (20 beds in Intensive
Care Unit (ICU), 100 for critical care treatment and 180
beds in General ward). The hospital is equipped with state of the
art equipment and well qualified & experienced doctors/surgeons.
KHC is a part of the Hyderabad-based Kamineni group which has
presence in manufacturing of steel billets, steel pipes,
healthcare and education sectors.
During FY15 (FY refers to April 1 to March 31), Kamineni steel and
Power Private Limited reported net loss of INR76.71 crore on a
total operating income of INR79.34 crore.
KAMINENI STEEL: CARE Lowers Rating on INR1,777.91cr LT Loan to D
----------------------------------------------------------------
CARE revises ratings assigned to bank facilities of Kamineni Steel
and Power India Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 1777.91 CARE D Revised from
CARE BB-
Rating Rationale
The revision in the rating assigned to the bank facilities of
Kamineni Steel and Power India Private Limited (KSP) takes into
account the delays in debt servicing on account of stressed
liquidity position.
The ability of the company to improve its liquidity and regularize
its debt servicing will be the key rating sensitivity
KSP is a part of the Hyderabad-based Kamineni group which has
presence in steel pipes, healthcare and education sectors. KSP has
set up a 360,000 MT round billet manufacturing plant at
Narketpally, Nalgonda district, Andhra Pradesh, with a total
project cost of INR657.30 crore, funded with debt of INR530.52
crore and equity of INR126.78 crore. The plant is adjacent to its
group companies, namely, Oil Country Tubular Limited and United
Seamless Tubular Private Limited (USTPL). KSP was promoted
as a backward integration of the group and will be supplying
billets to USTPL, which has capacity of 300,000 MT and also to
USAI Forge (group's forging unit).
During FY15 (refers to the period April 01 to March 31), KSP
reported net loss of INR76.71 crore on a total operating income of
INR79.34 crore.
KINGFISHER AIRLINES: IDBI Sanctioned KFA Loan Ignoring Alerts
-------------------------------------------------------------
The Times of India reports that IDBI Bank may have missed more
than one alert while sanctioning a INR200-crore short-term loan to
Kingfisher Airlines (KFA) in November 2009.
The report relates that while the entire focus is on the sub-par
credit rating to the now-grounded airline, the note moved by
general manager R S Sridhar on November 4 has clearly stated that
the auditors had observed that INR4,630 crore raised on short-term
basis had been used for long-term investment at the end of March
2009. Further, it said, "undisputed TDS (tax deducted at source)
amount of INR111 crore had not been deposited for over six
months". The two points were in addition to several other
financial parameters, including a negative net worth of INR3,800
crore, TOI relays.
On the same day, B K Batra, then the group head of corporate
banking, sent the note to CMD Yogesh Aggarwal saying he "may
kindly approve the proposal," according to TOI. Aggarwal then
cleared the proposal, on which an executive committee stamp was
taken later. TOI says the committee cleared the proposal to
"relax the norm of minimum internal credit rating of 'BBB'", with
Aggarwal chairing the meeting with other members deputy MD O V
Bundellu, and three independent directors H L Zutshi, K Narasimha
Murthy and Subhash Tuli present.
The seven-page note signed by Sridhar has several handwritten
notings, including one to "expedite" the rating, TOI adds.
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 the
operating 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.
KISAN PROTEINS: CARE Reaffirms B+/A4 Rating on INR9.5cr Loan
------------------------------------------------------------
CARE reaffirms ratings assigned to bank facilities of Kisan
Proteins Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term/Short-term 9.50 CARE B+/CARE A4
Bank Facilities Reaffirmed
Rating Rationale
The ratings assigned to the bank facilities of Kisan Proteins
Private Limited (KPPL) continue to be constrained on account
of its low operating income, leveraged capital structure and weak
debt coverage indicators. Furthermore, the ratings are also
constrained on account of its highly working capital intensive
nature of operations, its presence in the fragmented rapeseed De-
Oiled Cake (DOC) and mustard oil industry, and susceptibility of
its profitability to the fluctuations in rapeseed price.
The ratings, however, derive strength from the vast experience of
the promoters with an established track record of operation and
easy availability of raw materials along with diversified customer
base having presence in the domestic and overseas markets.
The ability of KPPL to increase its total operating income (TOI)
along with improvement in the profitability and capital structure
through efficient working capital management are the key rating
sensitivities.
KPPL is a group entity of the Palanpur-based (Gujarat) Kisan
group. KPPL is a private limited company incorporated in
2005 by Mr Manubhai Patel and other members of the Patel family.
The company is primarily engaged in solvent extraction from the
rapeseed and mustard seed. It also carries out the trading of
castor seed, castor oil and castor DOC. KPPL has an installed
capacity of 6,000 metric tonnes per annum (MTPA) for solvent
extraction as onMarch 31, 2015. The promoters of the group are
also engaged in similar line of business through their other group
entity named Kisan Oleochem & Derivatives Private Limited (KODPL;
rated 'CARE BB-/CARE A4').
During FY15 (refers to the period April 1 to March 31), KPPL
reported a TOI of INR25.03 crore (FY14: INR55.15 crore) with a
PAT of INR0.13 crore (FY14: INR0.13 crore).
As per the provisional results, during 9MFY16, KPPL reported TOI
of INR37.61 crore.
KURINJI SPINNING: Ind-Ra Suspends BB- Long-Term Issuer Rating
-------------------------------------------------------------
India Ratings and Research (Ind-Ra) has suspended Kurinji Spinning
Mills P Ltd's (KSMPL) Long-Term Issuer Rating of 'IND BB-' with a
Stable Outlook. 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 KSMPL.
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.
KSMPL's ratings are:
-- Long-Term Issuer Rating: migrated to 'IND BB-(suspended)'
from 'IND BB-'/Stable
-- INR145.90 mil. long-term loans: migrated to 'IND BB-
(suspended)' from 'IND BB-'
-- INR130.00 mil. fund-based limits: migrated to 'IND BB-
(suspended)' from 'IND BB-'
L.MADANLAL: Ind-Ra Assigns BB- Long-Term Issuer Rating
------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned L.Madanlal
(Aluminium) Ltd (LMAL) a Long-Term Issuer Rating of 'IND BB-'.
The Outlook is Stable. The agency has also assigned LMAL's
INR60.00 mil. fund-based working capital limit 'IND BB-'/Stable
and 'IND A4+' ratings.
KEY RATING DRIVERS
The ratings reflect LMAL's small scale of operations as reflected
in its revenue of INR347 mil. during FY15 (FY14: INR556 mil.).
Also, the credit metrics of the entity are moderate, with interest
coverage of 1.5x in FY15 (FY14: 1.7x) and net financial leverage
of 4.4x (5.5x) and EBITDA margin of 2.7% (1.5%).
The ratings factor in LMAL's tight liquidity position as reflected
from its average maximum fund based utilization of close to 95%
for the 12 months ended January 2016. The ratings also factor in
the company's high customer concentration as the top 10 customers
contributed 72.02% to its total revenue during FY15.
The ratings are supported LMAL's founders' five decades of
experience in the present line of business.
RATING SENSITIVITIES
Positive: An improvement in the overall credit metrics would lead
to a positive rating action.
Negative: Deterioration in the overall credit metrics would lead
to a negative rating action.
COMPANY PROFILE
LMAL was formed in 1953 as a partnership firm in the name of
Lachhminarain Madanlal. It was converted into a closely held
limited company in 1967. The company is into the manufacturing
and supply of aluminum utensils, aluminum notch bar, aluminum
wire, aluminum ingot, aluminum shots, aluminum cubes etc. LMAL
imports its main raw material aluminum scrap. The main head
office is situated in Camac Street Kolkata and its production unit
is situated in Belur, Howrah.
M2 INDIA: ICRA Suspends B+ Rating on INR9.5cr Fund Based Loan
-------------------------------------------------------------
ICRA has suspended the long term rating of [ICRA]B+ assigned to
the INR9.50 crore fund based facilities of M2 India Electric
Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based limits 9.50 [ICRA]B+ suspended
The suspension follows ICRA's inability to carry out a rating
surveillance in the absence of the requisite information from the
company. According to its suspension policy, ICRA may suspend any
rating outstanding if in its opinion there is insufficient
information to assess such rating during the surveillance
exercise.
MAHARAJA SATHYAM: ICRA Revises Rating on INR5.90cr Loan to B+
-------------------------------------------------------------
ICRA has revised the rating for the INR5.90 crore fund based
facility of Maharaja Sathyam Industries Private Limited to
[ICRA]B+ from [ICRA]BB-.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term: fund 5.90 [ICRA]B+/revised
based facility from [ICRA] BB-
The revision in the rating considers the weaker than expected
operational and financial performance of the company over the last
two years, due to subdued yarn demand and weak contribution
margins. During FY2015, the company's sales de-grew by 20% (y-o-y)
while operating margin contracted to 11.4% (800 bps decline)
leading to net losses. Consequently, the company's financial
profile weakened reflected in decline in interest coverage metric
from 1.6 times in FY2014 to 1.1 times in FY2015. In addition, the
company's receivables rose sharply to 113 days of sales as on
March 31st 2015 (from 45 days as on March 31st 2014) resulting in
high utilization of working capital limits (93% on an average of
sanctioned limits) over the past twelve months ended December 2015
thus straining the company's liquidity profile. The rating also
takes note of the company's small scale of operations in a highly
fragmented industry which limits scale economies and vulnerability
of margins to fluctuation in cotton/ polyester and yarn prices.
These weaknesses are offset to an extent by the promoter's long
standing presence in the textile industry and their support to the
company in the form of interest-free unsecured loans.
Going forward, the company has annual repayment obligation of
INR2.0 crore over the next two years (FY2016-2018); hence, it is
imperative for the company to improve the accruals position by way
of improvement in the scale of operations and expansion of
margins, in the absence of which, the financial support from the
promoters is expected to continue to service the aforesaid debt
obligations and the same will remain key rating sensitivities.
Maharaja Sathyam Industries Private Limited (MSIPL), incorporated
in 1981, is a small scale yarn manufacturer with a spindle
capacity of 22,944 spindles. The company predominantly produces
polyester-cotton blended yarn (65:35) and manufactures polyester-
viscose blended yarn and cotton yarn in minor quantities. The
company caters to traders in the domestic market mostly to weavers
around Erode, Ichalkaranji, Surat and Kolkata. MSIPL largely
produces cotton and blended yarn in the coarse-to-medium count
range with average count being 40s count.
Recent Results
During the financial year 2014-15, the Company reported net loss
of INR0.8 crore on an operating income of INR21.5 crore as against
a net profit INR0.3 crore on an operating income of INR26.7 crore
for the year 2013-14.
MARGO PLYWOOD: CARE Revises Rating on INR0.39cr LT Loan to B+
-------------------------------------------------------------
CARE revises the lt rating and reaffirms the st rating assigned to
bank facilities of Margo Plywood Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 0.39 CARE B+ Revised from
CARE B
Long-term/ Short-term 10.00 CARE B+/ CARE A4
Bank Facilities Revised from CARE B/
Reaffirmed CARE A4
Short-term Bank Facilities 4.21 CARE A4 Reaffirmed
Rating Rationale
The revision in the long-term rating assigned to the bank
facilities of Margo Plywood Private Limited (MPPL) is primarily
on account of increasing scale of operations during FY15 (refers
to the period April 1 to March 31) and 10MFY16 (provisional) along
with overall improvement in financial risk profile. The ratings
continue to take comfort from the vast experience of the promoters
in the wood and wood products industry.
The ratings, however, continue to remain constrained on account of
moderate capital structure, moderately weak debt coverage
indicators and stressed liquidity position. Furthermore, the
ratings are also constrained due to its presence in the highly
competitive and fragmented wood and wood product industry and
vulnerability of profitability to fluctuations in raw material
prices along with the fortunes of the company linked to the
cyclical and currently subdued real estate sector and adverse
changes in export policies of timber exporting countries.
The ability of MPPL to increase its scale of operations, improve
profit margins and capital structure via efficient management of
its working capital requirements remain the key rating
sensitivities.
Kutch-based (Gujarat) MPPL, incorporated on August 26, 2008 is
promoted by Mr Sandeep Gupta and Mr Ajay Gupta. It is engaged in
manufacturing of plywood, block board and flush door with an
installed capacity of 20,00,000 square meters per month. The
company procures raw material (timber logs) from Taiwan and sells
its final products in local market in the state of Gujarat,
Rajasthan, Punjab, Uttar Pradesh and Maharashtra etc. MPPL has a
team of over 15 marketing professionals in different states of
India to support sales and marketing of its products.
During FY15, MPPL reported a total operating income (TOI) of
INR35.99 crore with a PAT of INR0.87 crore as against a TOI
of INR30.86 crore and PAT of INR0.18 crore during FY14. During
10MFY16 (provisional), MPPL has achieved a turnover of INR41.18
crore.
MG HUSSAIN: ICRA Suspends B/A4 Rating on INR6.16cr LT Loan
----------------------------------------------------------
ICRA has suspended the [ICRA]B and [ICRA]A4 rating assigned to the
INR6.16 crore long term and short term fund based facilities of MG
Hussain. The suspension follows ICRA's inability to carry out a
rating surveillance in the absence of the requisite information
from the company.
NATRAJ INDUSTRIES: ICRA Reaffirms 'B' Rating on INR12cr Loan
------------------------------------------------------------
ICRA has reaffirmed the long-term rating assigned to the INR12.00
crore (enhanced from INR9.00 crore) cash credit facility of Natraj
Industries at [ICRA]B. ICRA has withdrawn the short term rating of
[ICRA]A4 assigned to INR9.00 crore short term facility (sublimit
to cash credit) of NI.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 12.00 [ICRA]B reaffirmed
PC/FDBP/FUDBP (9.00) [ICRA] A4 withdrawn
The reaffirmation of the rating continues to take into account the
firm's weak high financial risk profile characterized by limited
profit margins on account of the low value additive nature of
firm's operations, its leveraged capital structure on account of
high working capital requirements and weak coverage indicators as
well as moderate scale of firm's operation. The rating also takes
into account the vulnerability of the firm's profitability to
fluctuations in commodities prices and the highly fragmented
nature of industry with a large number of organised and
unorganised units resulting in high competitive intensity. ICRA
also notes that NI is a partnership firm and any withdrawals from
the capital account would affect its credit profile and the
continuity of operations.
The rating continues to favourably factor in the long standing
experience of the partners in agro commodity trading business and
firm's diversified product profile with presence in trading of
agro commodities, peanut processing and oilseed crushing
operations.
Established in 1995, Natraj Industries is owned and managed by the
Patel family and is engaged in trading of agro commodities,
processing of groundnuts and crushing of oilseeds. The operations
are carried out from firm's manufacturing facility located at
Junagadh, Gujarat. The processing operations primarily consist of
cleaning, shelling, processing, grading, sorting and packing of
peanuts with an installed capacity of processing 25-30 Metric Tons
per day (MTPD) with 24 hours of operations. The crushing
operations consist of crushing oilseeds such as cotton seeds,
groundnut seeds, castor seeds to extract oil and oil cake with an
installed output capacity of crushing 25-35 MT oil per day with 24
hours of operations. The main commodities traded by the firm
include castor seeds and oil, groundnut seeds and oil, wheat,
cotton etc.
Recent Results
For the year ended March 31, 2015, the company reported an
operating income of INR48.21 crore and profit before tax of
INR0.29 crore as against operating income of INR45.57 crore and
profit before tax of INR0.24 crore for the year ended March 31,
2014.
NEO PAPER: ICRA Assigns B- Rating to INR10cr Fund Based Loan
------------------------------------------------------------
ICRA has assigned a long term rating of '[ICRA]B-' to the INR10.0
crore proposed fund based facility of Neo Paper Mills Private
Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Proposed Fund
based facilities 10.00 [ICRA]B- (Assigned)
The assigned rating is constrained by the high project execution
risk with only 4% of the cost incurred till December, 2015 and
high reliance on debt for funding the initial project cost
(debt/equity ratio of 3:1), with debt yet to be tied up. Further,
debt repayment is expected to start from April, 2017 and the
expected commercial operation date (COD) is April, 2017, thereby,
any delay in commencements of operations could stretch the
liquidity position of the company and affect timely debt servicing
by the company. ICRA notes the small size of the company's
envisaged operations, vulnerability of profitability to adverse
fluctuations in the prices of the key raw material and the high
fragmentation and competition prevalent in the Kraft paper
industry.
The rating, however, takes comfort from the established presence
of the directors in similar line of business resulting in
established relationship with customers, the stable demand outlook
for Kraft paper, driven by growth in packaging applications and
easy availability of recycled waste paper which is the key raw
material.
Incorporated in March 2012, Neo Paper Mills Private Limited
(NPMPL) has been promoted by Mr. Sanjiv Kadapatti. The company
proposes to manufacture Kraft paper in the range of Burst Factor
of 14-16 and expects to commence commercial operations from April
2017. NPMPL's proposed manufacturing facility will have an
installed capacity of 13,500 MTPA and is located in Halkarni in
the Kolhapur District of Maharashtra. The total estimated project
cost is INR11.92 crore which is proposed to be funded through a
term loan of INR8.94 crore and promoter's contribution of INR2.98
crore.
PANDOUL FLOUR: ICRA Ups Rating on INR4cr Term Loan to B+
--------------------------------------------------------
ICRA has revised upwards the rating of the INR4.00 crore (revised
from INR6.50 crore) term loan, the INR3.50 crore (revised from
INR5.78 crore) fund based facilities and the INR5.52 crore
(revised from INR0.74 crore) unallocated facilities of Pandoul
Flour Mills Private Limited from [ICRA]B to [ICRA]B+. ICRA has re-
affirmed the [ICRA]A4 rating of the INR0.13 crore non-fund based
facilities and the INR5.52 crore unallocated facilities of PFMPL.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term Loan Facilities 4.00 [ICRA]B+ upgraded from
[ICRA]B
Long-term Fund Based 3.50 [ICRA]B+ upgraded from
Cash Credit [ICRA]B
Short-term Non-fund
based 0.13 [ICRA]A4 re-affirmed
Unallocated Limit 5.52 [ICRA]B+/A4 from [ICRA]B/A4
The revision in the long term rating primarily considers the
commencement of PFMPL's operations from November 2014, with
capacity utilization of around 78% achieved during 9M FY 2016, and
part receipt of the capital subsidy in the current financial year,
which eases the liquidity position to an extent. However, the high
debt repayment obligation relative to cash accruals is likely to
exert pressure on the cash flow position of the company in the
short to medium term. The ratings also factor in the highly
competitive nature of the food processing industry on account of
low barriers to entry, and limited value addition, which exert
pressure on PFMPL's profitability, and in turn impacts business
returns.
ICRA also notes PFMPL's vulnerability to agro-climatic conditions
and Government regulations on pricing, distribution and export of
agricultural commodities. In addition, the company is exposed to
margin risks on account of volatility in the price of wheat. The
ratings also incorporate the established track record of the
promoters in the flour processing business, and the favourable
location of PFMPL's plant at Darbhanga in Bihar, which is in
proximity to wheat growing regions, thereby leading to low freight
costs. The ratings further factor in the support from the State
Government of Bihar under the 'Integrated Development of Food
Processing Sector' scheme, leading to support in debt repayments
and PFMPL's stable market position given that flour and semolina
form an essential constituent of the Indian diet.
PFMPL was established in the year 2010 by Mr. Sunil Murarka, Mr.
Niketan Gupta and Mr. Pawan Kumar. The company has a flour mill in
Darbhanga, Bihar, which has an installed production capacity of
150 tons per day (TPD). The plant has been operational since
November 2014.
Recent Results
The company reported an operating income of INR14.69 crore and a
net loss of INR0.42 crore during FY2015.
PRATHAMESH CONSTRUCTIONS: CARE Rates INR13.40c LT Loan at B+
------------------------------------------------------------
CARE assigns 'CARE B+' rating to the bank facilities of Prathamesh
Constructions.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 13.40 CARE B+ Assigned
Rating Rationale
The rating assigned to the bank facilities of Prathamesh
Constructions (PC) is constrained by project execution risk
associated with the ongoing real estate projects, presence in a
highly competitive real estate sector, cyclical nature of industry
and partnership nature of its constitution.
However, the rating derives strength from the experience of the
partners in real estate development, receipts all approvals and
clearances for the ongoing projects and strategic location of the
projects. The ability of the firm to execute construction
activities as per the schedule, thereby enabling timely inflow of
the receivables and sell the inventory as estimated are the key
rating sensitivities.
Established in the year 2002, PC is the part of Prathamesh Group
of Pune. The group is in the business of real estate development
since last fourteen years and manages five entities including PC,
Atmaja Constructions (ACS), Utkarsha Buildcon (UBN), Jupiter
Builders (JBS) and Shubham Realtors (SRS).
Currently, PC is developing three residential projects namely
Novellus, Sylvetica and Gallardo in Pune, which are targeted to
customer segment of middle income.
The total cost of the projects is INR21.36 crore which is to be
funded by the promoter's contribution of INR3.50 crore, cash
credit from bank of INR13.40 crore and customer advance of INR4.46
crore. As on December 31, 2015, the firm has incurred a total cost
of INR6.80 crore, ie, 32% of the total project cost (funded
through promoter's contribution of INR2.24 crore, cash credit from
bank of INR4.00 crore and customer advances of INR0.56 crore).
Furthermore, as on December 31, 2015, the firm has sold 9% of the
saleable area.
PRINCE PROPERTIES: ICRA Reaffirms B+ Rating on INR20cr Loan
-----------------------------------------------------------
ICRA has reaffirmed its long-term rating of [ICRA]B+ to the
INR20.0 crore bank facility of Prince Properties.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term Loan 20.0 [ICRA]B+; reaffirmed
ICRA's rating centrally factors in the residual completion risks
for the hotel project given that its commercial operation date
(COD) is scheduled in April 2016 (revised from November 2015
earlier), with about 80% of the total cost having been incurred by
December 31, 2015. With the company planning to make the hotel
operational by April 2016, significant execution pick up is
required to meet the projected completion date. Further given the
competitive intensity of the market as well as the cyclical nature
of the hotel industry, the company's ability to ramp up the
occupancies and room revenues will be critical, as the
commencement of repayments from April 2016.
However, the rating favorably factors in the management agreement
entered with the Marriott Group for their "Fairfield by Marriott"
brand, which is expected to lend the project an established global
brand name and provide it with operational and management
expertise. Further, the rating also derives comfort from the
project's favorable location- being in the vicinity of the Umaid
Bhawan Palace and the Jodhpur railway station and airport. The
rating also takes into account the lightly leveraged capital
structure of the project (gearing of 0.66 times) and the benefits
the firm derives from being a part of the Rajasthan-based Purohit
and Soni groups.
The company's ability to complete the project within the budgeted
time and cost and achieve the projected operating metrics will be
the key rating sensitivities.
Prince Properties is a partnership firm established in 2009 and is
setting up a 3 star hotel, with 137 rooms in Jodhpur, Rajasthan at
an estimated project cost of INR50.25 crore, of which ~Rs 40 crore
had been incurred by December 31, 2015. The firm has been promoted
by the Rajasthan-based Soni and Purohit Groups, with equal profit
sharing in the firm and with each firm being represented by three
partners each. The Soni group has extensive experience in the guar
gum and powder industry in Rajasthan and members of the group also
manage another 4 star hotel at Jodhpur, with 54 rooms (Shree Ram
International). This group also has diversified experience in
commodity trading, warehousing and power generation (wind mill and
solar project). The Purohit group has rich experience in
handicraft and commodity trading businesses.
PROVENTUS AGER: CARE Assigns B+ Rating to INR13cr LT Loan
---------------------------------------------------------
CARE assigns 'CARE B+' rating to the bank facilities of Proventus
Ager India Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 13 CARE B+ Assigned
Rating Rationale
The rating assigned to the bank facilities of Proventus Ager India
Private Limited (PAPL) is constrained primarily on account of its
nascent stage of operations with high working capital intensity
coupled with its presence in the highly fragmented and competitive
agro chemicals trading industry.
The rating, however, derives strength from the experienced
promoters in the agro chemical industry and access to the
established marketing network of the group.
The ability of PAPL to increase its scale of operations and
achieve the envisaged level of revenue and margins along with
efficient working capital management would be the key rating
sensitivity.
Vadodara-based PAPL is promoted by Mr Doraprasad Nimmagada
(promoter of Jay Polypack Private Limited and Jay Agro Industries)
in January 2015. The board of directors of PAPL comprises of Mr
Doraprasad Nimmagada, his wife Mrs Aruna Nimmagada and his son
MrVijay Nimmagada.
PAIPL has commenced the trading operations during FY16 (refers to
the period April 1 to March 31) from May 2015. The company
primarily procures Agrochemicals, Pesticides and Insecticides from
its group entity i.e Jay Agro Industries (JAI, rated CARE B+ in
April 2015) and markets it through dealers across the country.
During 9MFY16, the company has registered the TOI of INR49.28
crore.
RAIGANJ DALKHOLA: CARE Reaffirms D Rating on INR321.63cr LT Loan
----------------------------------------------------------------
CARE reaffirms the rating assigned to the bank facilities of
Raiganj Dalkhola Highways Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 321.63 CARE D Reaffirmed
Rating Rationale
The rating assigned to the bank facilities of Raiganj Dalkhola
Highways Limited (RDHL) continues to be constrained on account of
the recent delays in servicing of debt obligations owing to delays
in project implementation due to pending receipt of right of way
(RoW) for balance stretch of the land and pending financial
closure for funding additional cost overrun.
Timely servicing of debt obligations, obtaining RoW for balance
stretch of the road and obtaining financial closure for additional
cost overrun remain the key rating monitorables.
Background
Incorporated on March 11, 2010, RDHL is a special purpose vehicle
(SPV) promoted by Hindustan Construction Company Limited (HCC;
rated CARE C/CARE A4/CARE D for its bank facilities and
instruments) and HCC Concessions Limited (HCL)- step-down
subsidiary of HCC - to undertake the augmentation of the existing
stretch of 50 km from 398 km to 452 km on the Raiganj-Dalkhola
section of NH-34 under the National Highway Development program
(NHDP) Phase III in the state of theWest Bengal by 4-Laning on
Design, Build, Finance, Operate and Transfer (DBFOT) - Toll basis.
The concession agreement (CA) was executed between RDHL and
National Highways Authority of India (NHAI) on June 28,
2010 and for a concession period of 30 years from the appointed
date i.e. Feb. 3, 2011.
As per the initial schedule, the company had envisaged completion
of the entire project by August 1, 2013. However, the project work
is stalled since November 2011 owing to delays in receipt of right
of way (RoW). The cumulative physical progress achieved in the
project as onMay 30, 2015 is 8.73%.
However, there is development in receipt of RoW in the past few
months and currently, out of the total 50 km, the company has
received RoW for 46 km of the stretch. The company expects to
receive ROW for the balance stretch by the end of FY16 (refers to
the period April 1 to March 31) and expects project work to re-
commence.
On account of delays in handing over land, the DCCO for the
project has been shifted to March 2017 and consequent to
the same there has been a shift in the repayment schedule
commencing from June 2018. The interest obligations are to
be serviced monthly by the company.
RAJASTHAN POWERGEN: CARE Reaffirms B+ Rating on INR6.58cr Loan
--------------------------------------------------------------
CARE reaffirms the ratings assigned to the bank facilities of
Rajasthan Powergen Transformers Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 6.58 CARE B+ Reaffirmed
Short-term Bank Facilities 4.00 CARE A4 Reaffirmed
Rating Rationale
The ratings assigned to the bank facilities of Rajasthan Powergen
Transformers Private Limited (RPTL) continue to remain
constrained primarily on account of its leveraged capital
structure, moderate liquidity position and the susceptibility of
its profitability margins to volatile raw material prices. The
ratings further continue to remain constrained due to the
fragmented nature of industry leading to stiff competition from
the organized and unorganized players. The ratings, however,
continue to derive strength from the experienced management of the
company and moderate profit margins.
RPTL's ability to ramp up its sales volume leading to further
increase in the scale of operations while maintaining/improving
its profitability margins and improvement in liquidity position
are the key rating sensitivities.
RPTL was incorporated in 2010 with an objective to set up a
greenfield plant for the manufacturing of transformers for
power transmission and distribution ranging from 10 Kilovolt
Ampere (KVA) to 1,000 KVA and cross arm angles. RTPL has
completed its project and started commercial operation from
January, 2013. The manufacturing plant of the company is
located at Sanchore (Dist. Jalore, Rajasthan) with the total
installed capacity of 18,000 pieces per annum for transformers
and 120,000 sets per annum for cross arm angles as on March 31,
2015. RPTL participates in the tenders for supply and repair of
transformers invited by State Electricity Boards (SEBs) in
Rajasthan and Gujarat.
As per the audited results of FY15 (refers to the period April 1
to March 31), RPTL reported a total income of INR20.06
crore (FY14: INR10.38 crore) with a PAT of INR0.32 crore (FY14:
net loss of INR0.10 crore).
RAJDA SALES: ICRA Reaffirms B+ Rating on INR3cr Bank Loan
---------------------------------------------------------
ICRA has re-affirmed the long-term rating of [ICRA]B+ for the
INR1.50 crore cash credit and the INR3 crore bank guarantee
facilities of Rajda Sales (Calcutta) Private Limited. ICRA has
also assigned a short-term rating of [ICRA]A4 to the INR14 crore
bill discounting facility of RSCPL.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 1.50 [ICRA]B+/Re-affirmed
Bank Guarantee 3.00 [ICRA]B+/Re-affirmed
Bills Discounting 14.00 [ICRA]A4/Re-affirmed
The re-affirmation of ratings takes into account RSCPL's weak
financial profile, characterized by a low net-worth base,
notwithstanding the equity infusion during FY2015 and the high
reliance on external debt to fund receivables, which has adversely
impacted the capital structure and debt coverage indicators. ICRA
notes that the company's high exposure to counterparty credit
risks, since credit risk is transferred by RIL to RSCPL in its DCA
business. However, adequate risk management framework put in by
the company, as also reflected by the fact that 94% of receivables
had an ageing of less than 30 days as on March 2015, provides some
comfort. The ratings are further constrained by the company's high
working capital requirements, which are inherent in the polymer
distribution business. The high competitive intensity of the
business, with presence of a large number of organized and
unorganized players in the market, is another credit concern.
The ratings, however, take note of the longstanding experience of
more than three decades of the promoters in the polymer business
as a Del Credere Agent (DCA) for Reliance Industries Ltd. (RIL).
ICRA notes RSCPL's established relationships with its customers,
with majority of sales being made to repeat customers. The healthy
demand outlook for polymers in India due to growth of plastic
processing industries is a reassuring factor.
RSCPL was incorporated in 1961 as a partnership firm, before being
converted into a private limited company in March 1974. The
company is engaged in the business of indenting, consignment
sales, stock and trade of various polymers, organic and inorganic
chemicals, solvents and intermediates. The company has been a DCA
of RIL in West Bengal for the distribution of polymer granules
since 1978, and for rubber products from October 2015. In
addition, the company is also an indenting agent for Transpek -
Silox Industry Ltd., Anupam Colours & Chemicals Industries, Anupam
Colours (P) Ltd., Windsor Machines Ltd., etc. Another important
revenue source for RSCPL is direct trading activities.
Recent Results
During 8M FY16, as per provisional financials, RSCPL reported
profit before tax of INR0.34 crore on an OI of INR7.16 crore as
against a net profit of INR0.31 crore and OI of INR10.51 crore
during FY15.
ROYAL PLAZA: ICRA Lowers Rating on INR10cr Term Loan to 'D'
-----------------------------------------------------------
ICRA has downgraded the long-term rating of Royal Plaza Inn from
[ICRA]B to [ICRA]D.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term loan facilities 10.00 [ICRA]D downgraded
The revision of the rating results from the delays observed in
debt servicing by the entity, owing to weak liquidity following
the delay in project completion.
Royal Plaza Inn, a sole proprietorship entity set up in 2010 by
Mr. M P Shamsudheen, is currently constructing a 108 room hotel at
Arayidathupalam, Kozhikode. The proposed hotel which is expected
to apply for a 4-star category rating for the Department of
Tourism (DoT) and will operate under the brand "Royal Plaza Inn".
Mr. M P Shamsudheen has other business interests in Kerala where
he holds several companies which hold land parcels across Kerala,
rent out commercial real estate space and is also in the process
of setting up of a rock and metal crusher unit at Palakkad in
partnership with four other individuals. The promoter also holds a
"Class A" license from the Govt. Of Kerala for executing civil
contracts and is planning to bid for tenders in the near future.
RUPESH KUMAR: Ind-Ra Assigns B+ Long-Term Issuer Rating
-------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Rupesh Kumar &
Sons (RKS) a Long-Term Issuer Rating of 'IND B+'. The Outlook is
Stable. The agency has also assigned the company's INR125 mil.
fund-based working capital limits 'IND B+'/Stable/'IND A4'
ratings.
KEY RATING DRIVERS
The ratings reflect RKS's weak credit metrics and small scale of
operations in FY15, with interest coverage (operating EBITDA/gross
interest expense) of 1.61x (1.79x), net leverage (adjusted net
debt/operating EBITDAR) of 3.92x (4.39x) and revenue of
INR335.3 mil. (INR239.10 mil).
The ratings also reflect the company's long working capital cycle
of 227 days in FY15 (FY14: 280 days) due to its nature of
business, and tight liquidity as reflected in its almost full
utilization of the working capital facilities on average during
the 12 months ended January 2016. The ratings are constrained by
the partnership structure of the firm.
However, the ratings are supported by the firm's moderate
operating margins of 10.74% in FY15 (FY14: 12.48%) on the back of
other operating income in the form of duty drawbacks, sale of
import licenses and forex income. and its partners' extensive
experience in the carpet manufacturing business.
RATING SENSITIVITIES
Positive: Substantial growth in the revenue, and operating margins
being sustained or improving leading to an improvement in the
credit metrics will be positive for the ratings.
Negative: Further deterioration in the operating margins leading
to deterioration in the credit metrics and/or deterioration in the
liquidity profile will be negative for the ratings.
COMPANY PROFILE
Incorporated in March 2012, RKS manufactures carpets and druggets.
The firm is situated at Bhadohi-Mirzapur belt, Uttar Pradesh, the
hub of carpet manufacturing; the partners of the firm are Rupesh
Kumar Baranwal and Beena Baranwal.
SAGAR NUTRIMENTS: ICRA Assigns B+ Rating to INR53.87cr Loan
-----------------------------------------------------------
ICRA has assigned its long term rating of [ICRA]B+ to the INR54.00
crore fund based, non fund based and proposed bank facilities of
Sagar Nutriments Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based facilities 53.87 [ICRA]B+; assigned
Non fund based
facilities (3.91) [ICRA]B+; assigned
Unallocated (Proposed
Limits) 0.13 [ICRA]B+; assigned
ICRA's rating centrally factors in the execution and
implementation risks which are generally inherent to projects
under construction. Further the rating is also constrained by the
high intensity of competition in the rice milling industry which
will limit the company's profitability, and agro climatic risks
which can affect the availability of paddy in adverse weather
conditions.
The rating, however, favourably takes into account SNPL being a
part of the Sagar group of Bhopal (Madhya Pradesh) which has
diversified businesses ranging from real estate, education and
spinning, and the proximity of the mill to a major rice growing
area which results in easy availability of paddy.
Going forward, SNPL's ability to achieve commercial production as
per schedule and achieve desired operating parameters will be the
key rating sensitivities.
SNPL was established in 2015 and will process basmati paddy
coupled with trading of rice. The company's active promoters are
Mr. Sudhir Agrawal and Mr. Siddharth Agrawal. The company's rice
mill with a milling capacity of 10 tons per hour (tph) is expected
to commence commercial production from December 2016.
SNPL is a part of the Bhopal based Sagar group, which is engaged
in spinning, education, construction and real estate sectors. The
group has set up various colleges and schools in Bhopal under two
societies, Shri Agrawal Educational and Cultural Society and Shri
Agrawal Educational and Welfare Society. Two group companies,
Agrawal Builders and Agrawal Builders & Colonizers are engaged in
civil construction and real estate development over the last three
decades in Bhopal, and Sagar Manufacturers Pvt. Ltd. is engaged in
manufacturing of cotton spun yarn.
The total project cost is estimated at ~INR23 crore, of which term
loan of INR14.87 crore has been sanctioned by the bank and the
rest ~INR8 crore is to be infused as capital by the promoters.
SATHYA LIFESTYLE: CARE Lowers Rating on INR10cr LT Loan to D
------------------------------------------------------------
CARE revises the rating assigned to bank facilities of
Sathya Lifestyle Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 10 CARE D Revised from
CARE BB
Rating Rationale
The revision in the rating assigned to the bank facilities of
Sathya Lifestyle Private Limited (SLPL) takes into consideration
the delay in debt servicing.
SLPL's ability to established clear track of servicing of its debt
obligations with improvement in liquidity position is the key
rating sensitivity.
Incorporated in 2011, SLPL is into developing of real estate
properties. Currently, the company is executing a residential-cum-
commercial project named "Sathya Lifestyles" at Palghar East,
Thane.
Estimated cost for the project amounts to INR80.80 crore to be
funded in the ratio of 0.12:0.19:0.69 (debt: equity: customer
advances). As on March 31, 2014, the company has already incurred
cost of INR57.13 crore (71% of the total estimated project cost),
which has been funded through customer advances (of INR44.68
crore), equity (amounting to INR7.45 crore) and bank debt (of INR5
crore).
Furthermore, as on July 14, 2014, SLPL has monetized 401 flats
(out of the total 589 flats) and received advances amounting to
INR44.71 crore.
SHREE RAMDEV: Ind-Ra Assigns B+ Long-Term Issuer Rating
-------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Shree Ramdev
Cotton Industries a Long-Term Issuer Rating of 'IND B+'. The
Outlook is Stable.
KEY RATING DRIVERS
The ratings reflect Ramdev's moderate credit profile and small
scale of operations. The revenue was INR473 mil. in FY15 (FY14:
INR384 mil.), net leverage was 5.6x in FY15 (FY14: 2.6x), and
EBITDA interest cover was 1.4x (1.3x). The EBITDA margin remained
characteristically low and ranged from 1.2%-1.8% over FY12-FY15
for its cotton ginning and pressing business. The company has
comfortable liquidity with average 50.8% use of the fund-based
facilities during the 12 months ended January 2016. The firm
posted revenue of INR400 mil. for 10MFY16.
The ratings are supported by the promoter's more than a decade-
long experience in the cotton ginning and pressing industry.
RATING SENSITIVITIES
Negative: A substantial decline in the firm's profitability
leading to sustained deterioration in the credit metrics will be
negative for the ratings.
Positive: An increase in the scale of operations while maintaining
the profitability leading to a sustained improvement in the credit
metrics will be positive for the ratings.
COMPANY PROFILE
Ramdev was established as a proprietary concern in 2007 by Mrs.
Sangitaben Kapuriya. In 2009 it was converted into a partnership
firm. It has the capacity to press 100-200 cotton bales per day.
The firm directly procures raw materials from the wholesalers by
paying cash on delivery. The firm is located in Vijaypur, which
ensures easy availability of cotton.
SHREE RAMKRISHNA: CARE Reaffirms B+ Rating on INR9.84cr Loan
------------------------------------------------------------
CARE reaffirms the rating assigned to the bank facilities of
Shree Ramkrishna Oil Industries.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 9.84 CARE B+ Reaffirmed
Rating Rationale
The rating assigned to the bank facilities of Shree Ramkrishna Oil
Industries (SROI) continues to remain constrained on account of
its modest scale of operations with low profitability, modest
liquidity position, leveraged capital structure and moderate debt
coverage indicators. The rating is further constrained on account
of volatility associated with the raw material prices,
susceptibility to the change in the government policies, seasonal
and fragmented nature of the cotton industry and partnership
nature of constitution with inherent risk of capital withdrawal by
the partners.
The rating, however, continues to derive benefit from completion
of project, vast experience of promoters and locational advantage
in terms of proximity to the cotton-growing region in Gujarat.
The ability of SROI to improve its capital structure, increase its
scale of operations and margins along with overall improvement in
financial risk profile are the key rating sensitivities.
SROI was established in the year 1986 as a partnership firm by 11
partners with Mr Bharatbhai Bhudarbhai Patel, Mr Manjibhai
Narshibhai Patel, Mr Bhudarbhai Shankarbhai Patel and Mr Laljibhai
Chaturdas Patel being the key partners who are actively involved
in business operations. SROI is engaged in cotton ginning &
pressing and seed crushing with a manufacturing facility located
at Kadi, Gujarat. SROI has installed capacity to manufacture 52.48
MT of cotton bales per day, 49.5 MT of oil cake per day and 7.00
MT of cotton seed wash oil per day. The firm sells the products
under the registered brand name 'Shree Rama'.
During FY15 (refers to the period April 1 to March 31), SROI
reported a TOI of INR64.06 crore and a PAT of 0.06 crore as
against TOI of INR71.09 crore and PAT of INR0.12 crore during
FY14. As per the provisional results for 9MFY16 (April 1, 2015 to
December 31, 2015), SROI registered a TOI of INR30 crore.
SHRI HARE: ICRA Assigns 'B' Rating to INR8.0cr Cash Loan
--------------------------------------------------------
ICRA has assigned a long term rating of [ICRA]B to the INR8.00
crore cash credit facility of Shri Hare Krishna Sponge Iron Ltd.
ICRA has also assigned a short term rating of [ICRA]A4 to the
INR5.00 crore letter of credit and INR0.50 crore bank guarantee
facilities of SHKSIL.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based Limit
Cash Credit 8.00 [ICRA]B assigned
Non fund Based
Limit-Letter of
Credit 5.00 [ICRA]A4 assigned
Non fund Based
Limit Bank
Guarantee 0.50 [ICRA]A4 assigned
The assigned ratings take into consideration the weak financial
profile of the company characterized by significant cash losses
incurred during 2014-15 and also in the current financial year,
resulting in depressed level of coverage indicators, and the high
working capital intensity of operations owing to significant
stocking requirements. The ratings are also impacted by the
cyclicality inherent in the steel industry, which is going through
a difficult phase, resulting in the suspension of operations at
some of the units (currently operating only the sponge iron unit)
of the company. The ratings also factor in the company's
dependence on external sources for procurement of raw materials,
exposing SHKSIL to volatility in raw material and finished goods
prices, which are likely to keep SHKSIL's profitability and cash
flows volatile. The ratings, however, derive comfort from the
experience of the promoters in the steel industry and low reliance
on external debt, leading to a comfortable capital structure of
the company.
Incorporated in 2003, Shri Hare Krishna Sponge Iron Ltd. is
currently engaged in the manufacturing of sponge iron with an
installed capacity of 30,000 metric tonne per annum(MTPA).
Besides, the company has the production capacities for
manufacturing of mild steel ingots and steel shots with an
installed capacity of 16,200 MTPA and 5,100 MTPA respectively;
although the operations of the same is currently suspended. The
manufacturing facilities of the company are located at Siltara,
Raipur, Chhattisgarh.
Recent Results
During the first six months of 2015-16, the company reported a net
loss of INR3.13 crore (provisional) on an operating income of
INR21.19 crore (provisional), against a net loss of INR1.97 crore
on an operating income of INR64.72 crore in 2014-15
SHRI SODE: ICRA Suspends 'D' Rating on INR33cr LT Loan
------------------------------------------------------
ICRA has suspended the [ICRA]D rating assigned to the INR33 crore
long term fund based facilities of Shri Sode Vadiraja Mutt
Education Trust. The suspension follows ICRA's inability to carry
out a rating surveillance in the absence of the requisite
information from the company.
SILVER ENTERPRISE: Ind-Ra Assigns BB Long-Term Issuer Rating
------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Silver Enterprise
a Long-Term Issuer Rating of 'IND BB'. The Outlook is Stable.
The agency has also assigned the company's INR250.0 mil. long-term
loan a rating of 'IND BB'/Stable.
KEY RATING DRIVERS
The ratings reflect the execution and saleability risks associated
with Silver Enterprises' ongoing project (Silver Maxima). By end-
February 2016, the company has sold only 20 flats out of the total
192 flats. The ratings also consider the financial risk
associated with the project as customer advances and bank funding
are the major source of funds for project execution. The rating
also factors in the partnership structure of the organization.
The ratings benefit from the promoters' track record of completing
18 projects in Surat and their experience of around a decade in
the real estate segment.
RATING SENSITIVITIES
Positive: Successful completion of the project and sale of units
as planned, leading to strong visibility of cash flows could lead
to a positive rating action.
Negative: Any delays in the completion of the project and/or
further leveraging the existing business for new projects leading
to cash flow mismatches could be negative for the ratings.
COMPANY PROFILE
Incorporated in 2010, Silver Enterprise is a partnership firm,
engaged in residential and commercial real estate development. It
belongs to Silver group. The project consists of eight blocks and
each block has 12 floors. It has a total saleable area of 499,392
sqft.
SIMPLEX ENGINEERS: CARE Assigns B+ Rating to INR0.50cr LT Loan
--------------------------------------------------------------
CARE assigns 'CARE B+/CARE A4' ratings to the bank facilities of
Simplex Engineers & Traders.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 0.50 CARE B+ Assigned
Short-term Bank Facilities 14.50 CARE A4 Assigned
Rating Rationale
The ratings assigned to the bank facilities Simplex Engineers &
Traders (SET) are primarily constrained by its small scale of
operations & low networth base along with low and fluctuating
profitability margins. The ratings are further constrained
by foreign exchange fluctuation risk with intense competition in
the industry due to low entry barriers and constitution of the
entity as a partnership concern.
The ratings, however, draw comfort from the experience of the
partners, and moderate capital structure and coverage indicators.
Going forward, the ability of the firm to increase its scale of
operations while improving its profitability margins and maintain
its capital structure shall be the key rating sensitivities.
SET was established as a proprietorship firm in 1965 by Mr K.M.
Mehra. The firm is currently being managed by Mr K.M. Mehra, Mr
Vijay Mehra and Mr Nischint Mehra sharing profit and losses in the
ratio 40%, 40% and 20%, respectively. The firm is engaged in the
manufacturing of machinery parts such as vacuum filters and
clarifiers which are primarily used in sugar mills. The firm sells
the machinery parts to customers located domestically as well as
overseas. The major raw material being steel (stainless steel to
carbon steel) is mainly procured from domestic manufacturers and
traders.
Moreover, the firm will start merchant trading of agro commodities
which include cashew nuts by the end of current financial year,
ie, FY16 (refers to the period April 1 to March 31). The traded
products will be procured from Dubai and the same will be sold in
overseas countries like Singapore, Vietnam, etc.
During FY15, SET has achieved a total operating income (TOI) of
INR5.91 crore with PBILDT and PAT of INR0.19 crore and INR0.11
crore, respectively, as against TOI of INR4.34 crore with PBILDT
and PAT of INR0.13 crore and INR0.02 crore, respectively, for
FY14. Moreover, the firm has achieved sales of INR2.70 crore in
9MFY16 (refers to the period April 1 to December 31) (as per the
unaudited results).
SKA INFRASTRUCTURE: ICRA Suspends D Rating on INR16.95cr Loan
-------------------------------------------------------------
ICRA has suspended the [ICRA]D rating for the INR16.95 Crore bank
facilities of SKA Infrastructure Private Limited. The suspension
follows ICRA's inability to carry out a rating surveillance in the
absence of the requisite information from the company.
SMARTHA ENTERPRISES: Ind-Ra Affirms B+ Long-Term Issuer Rating
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed Smartha
Enterprises Private Limited's (SEPL) Long-Term Issuer Rating at
'IND B+'. The Outlook is Stable.
KEY RATING DRIVERS
The affirmation reflects SEPL's small scale of operations and weak
credit metrics. The company's operating profitability remains
under pressure due to the trading nature of business. FY15
financials indicate revenue of INR378.13 mil. (FY14: INR421.51
mil.), interest coverage (operating EBITDA/gross interest expense)
of 0.91x (0.40x), financial leverage (adjusted net debt/operating
EBITDAR) of 28.60x (7.85x) and EBITDA margins of 1.01% (1.24%).
The ratings factor in SEPL's satisfactory liquidity as evident
from its 45.94% average utilization of the working capital limits
for the seven months ended February 2016.
The ratings are, however, supported by the over three decades of
experience of the company's founders in the trading business and
its established customer relationships.
RATING SENSITIVITIES
Negative: A decline in the operating profitability resulting in
deterioration in the interest coverage will be negative for the
ratings.
Positive: An improvement in the profitability leading to an
improvement in the interest coverage will lead to a positive
rating action.
COMPANY PROFILE
SEPL was incorporated in November 2010, and started its operations
from February 2011. It is engaged in the trading of edible oils,
fertilisers, pulses and metal scraps.
SEPL's ratings:
-- Long-Term Issuer Rating: affirmed at 'IND B+'/Stable
-- INR15.00 mil. fund-based limits: assigned final 'IND
B+'/Stable/'IND A4'
-- INR150.00 mil. non-fund-based limit: affirmed at 'IND A4'
SRI MAHARAJA: ICRA Lowers Rating on INR5cr LT Loan to B+
--------------------------------------------------------
ICRA has revised the long-term rating for the INR5.00 crore fund
based facility of Sri Maharaja Industries to [ICRA]B+ from
[ICRA]BB-. ICRA has also reaffirmed the short-term rating
outstanding on the INR33.75 crore Non Fund Based Facility at
[ICRA]A4.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term: Fund
Based facility 5.00 [ICRA]B+/downgraded
Short Term: Non
Fund Based Facility 33.75 [ICRA]A4/reaffirmed
While arriving at the ratings, ICRA has taken a consolidated view
on Sri Maharaja Industries and Sri Maharaja Refineries ([ICRA]B+/
[ICRA]A4), herein referred to as Maharaja Group, since both the
entities are managed by the same promoter, operate in the same
line of business and have significant financial linkages between
them.
The revision in the long-term rating takes into account the
deterioration in the group's financial risk profile following
sharp correction in palm oil prices over the past two years.
During FY2015, the group reported flat sales growth owing to
steady demand, while operating margin declined from 1.4% in FY2014
to 0.4% in FY2015 on the back of inventory losses stemming from
sharp correction in RBD palmolein prices. As a result, the group's
operating profitability (return on capital employed) and interest
coverage declined from 10.0% and 1.3x respective in FY2014 to 5.7%
and 0.6x respectively in FY2015. With continued moderation in palm
oil prices over the first nine months of current fiscal, scope for
margin recovery remains limited over the near term. The ratings
also factor in the susceptibility of group's operating income and
margins to volatility in commodity prices, exchange rates and
changes in duty structure, imposed by Government of India and key
palm oil exporting nations (Malaysia and Indonesia). The ratings
however derive comfort from the promoters established track record
in the edible oil trading business spanning five decades,
favorable demand outlook for palm oil in the domestic market and
the recurrent revenue stream from theme-park operations. The
ratings also draw comfort from the financial support extended by
promoters and associate entities in the form of unsecured loan,
which cushions the group's liquidity profile to some extent.
Established in 1996 by Mr. K. Paramasivam, SMI is engaged in
trading of refined, bleached and deodorized (RBD) Palm oil. Based
out of Erode (Tamil Nadu), the entity sells refined palm oil to
wholesalers across Southern states such as Tamil Nadu, Andhra
Pradesh and Kerala. Besides this, the entity also operates a
theatre and theme park (facilities leased from Maharaja Theme
Parks Private Limited, associate entity) in Erode. The group's
promoters also have diverse business interests across sectors such
as textiles, educational institutions, and hospitality and
entertainment among others.
Recent Results
During the financial year 2014-15, the Company reported a net
profit of INR0.2 crore on an operating income of INR543.6 crore as
against a net profit INR0.3 crore on an operating income of
INR469.9 crore for the year 2013-14. On a consolidated basis, the
group reported a net profit of INR0.5 crore on an operating income
of INR644.7 crore during 2014-15 as against a net profit of INR0.6
crore on an operating income of INR571.9 crore for the year 2013-
14.
SRI MAHARAJA REFINERIES: ICRA Lowers Rating on INR10cr Loan to B+
-----------------------------------------------------------------
ICRA has revised the long-term rating outstanding on the INR10.00
crore fund based facility/ CC of Sri Maharaja Refineries to
[ICRA]B+ from [ICRA]BB-. ICRA has also reaffirmed the short-term
rating outstanding on the INR39.38 crore Non Fund Based Facility
at [ICRA]A4.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term: Fund
Based facility 10.00 [ICRA]B+/downgraded
Short Term: Non
Fund Based Facility 39.38 [ICRA]A4/reaffirmed
While arriving at the ratings, ICRA has taken a consolidated view
on Sri Maharaja Refineries and Sri Maharaja Industries ([ICRA]B+/
[ICRA]A4), herein referred to as Maharaja Group, since both the
entities are managed by the same promoter, operate in the same
line of business and have significant financial linkages between
them.
The revision in the long-term rating takes into account the
deterioration in the group's financial risk profile following
sharp correction in palm oil prices over the past two years.
During FY2015, the group reported flat sales growth owing to
steady demand, while operating margin declined from 1.4% in FY2014
to 0.4% in FY2015 on the back of inventory losses stemming from
sharp correction in RBD palmolein prices. As a result, the group's
operating profitability (return on capital employed) and interest
coverage declined from 10.0% and 1.3x respective in FY2014 to 5.7%
and 0.6x respectively in FY2015. With continued moderation in palm
oil prices over the first nine months of current fiscal, scope for
margin recovery remains limited over the near term. The ratings
also factor in the susceptibility of group's operating income and
margins to volatility in commodity prices, exchange rates and
changes in duty structure, imposed by Government of India and key
palm oil exporting nations (Malaysia and Indonesia). The ratings
however derive comfort from the promoters established track record
in the edible oil trading business spanning five decades,
favorable demand outlook for palm oil in the domestic market and
the recurrent revenue stream from theme-park operations. The
ratings also draw comfort from the financial support extended by
promoters and associate entities in the form of unsecured loan,
which cushions the group's liquidity profile to some extent.
Established in 1977, the firm operates from Erode (Tamil Nadu),
where it has a refining capacity of 100 tonnes per day. SMR sells
the refined palm oil, either imported from Malaysia and Indonesia
or bought from other traders, across the southern states. SMR also
procures crude groundnut oil, refines it, and sells it in Tamil
Nadu, either directly or through commission agents; however, the
sales of refined groundnut oil constitute less than 5% of total
sales (2014-15). The group's promoters also have diverse business
interests across sectors such as textiles, educational
institutions, and hospitality and entertainment among others.
Recent Results
During the financial year 2014-15, the Company reported a net
profit of INR0.3 crore on an operating income of INR101.2 crore as
against a net profit INR0.3 crore on an operating income of
INR150.2 crore for the year 2013-14. On a consolidated basis, the
group reported a net profit of INR0.5 crore on an operating income
of INR644.7 crore during 2014-15 as against a net profit of INR0.6
crore on an operating income of INR571.9 crore for the year 2013-
14.
SRI SARAVANA: Ind-Ra Suspends BB+ Long-Term Issuer Rating
---------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Sri Saravana
Spinning Mills Private Limited's (SSM) 'IND BB+' Long-Term Issuer
Rating which was placed on Rating Watch Evolving (RWE) to the
suspended category. This rating will now appear as 'IND
BB+(suspended)' on the agency's website.
The ratings have been migrated to the suspended category due to
lack of adequate information. Ind-Ra will no longer provide
ratings or analytical coverage for SSM.
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.
SSM's ratings are:
-- Long-Term Issuer Rating: migrated to 'IND BB+(suspended)'
from 'IND BB+'/RWE
-- INR2,132.5 mil. fund-based working capital facilities:
migrated to 'IND BB+(suspended)' from 'IND BB+'/RWE and
'IND A4+(suspended)' from 'IND A4+'/RWE
-- INR52.5 mil. non-fund based working capital limits:
migrated to 'IND A4+(suspended)' from 'IND A4+'/RWE
-- INR460.4 mil. term loan limits: migrated to
'IND BB+(suspended)' from 'IND BB+'/RWE
SRI SOMESHWARA: ICRA Suspends B+ Rating on INR20cr LT Loan
----------------------------------------------------------
ICRA has suspended the [ICRA]B+ rating assigned to the INR20.0
crore long term fund based facilities of Sri Someshwara Projects
Private Limited. The suspension follows ICRA's inability to carry
out a rating surveillance in the absence of the requisite
information from the company.
STAGE DOOR: CARE Reaffirms 'B' Rating on INR8cr LT Loan
-------------------------------------------------------
CARE reaffirms the rating assigned to bank facilities of Stage
Door.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 8 CARE B Reaffirmed
Rating Rationale
The rating assigned to the bank facilities of Stage Door (SDR)
continues to remain constrained by its small and fluctuating
scale of operations, concentration in specific segment limiting
its revenue base, declining profitability margins and weak
coverage indicators. The rating is further constrained by residual
project execution risk, debt-funded capital expenditure and
competition from other sources of entertainment.
The rating, however, continues to take comfort from the
experienced management in arts and theatre along with long
track record of operations and advance revenue receipts from
corporates.
Going forward, the ability of SDR to attract corporate
sponsorships, increase its scale of operations by increasing
targeted audience along with diversification of business model
shall be the key rating sensitivities. Furthermore, the ability of
the society to improve its capital structure shall remain to be
crucial.
SDR was established as a society in 1975 under Societies
Registration Act 1860. The society was established with the aim
of promoting arts and culture and the present chairman of SDR is
Retired Major Gen. S.K. Talwar. SDR organizes theatre plays in
Hindi and English for various corporates all over India. These
plays are directed in-house by Mr Aamir Raza Husain (Creative
Director of SDR), honored with Padam Shri and they are based on
varied themes focusing on national - social issues and
mythological stories, etc. SDR has organized plays for various
corporates like Airtel, ITC and Aircel, etc. The society also
receives grants from Ministry of Human Resource Development for
promoting arts and culture in the country.
Also, the society has undertaken construction of two auditoriums
and office space at District Centre, Saket (Delhi).
For FY15 (refers to the period April 01 to March 31), SDR achieved
a total revenue of INR1.16 crore with SBID and Surplus of INR0.07
crore and INR0.02 crore, respectively, in FY15, as against the
total revenue of INR1.83 crore with SBID and surplus of INR0.07
crore and INR0.04 crore, respectively, in FY14. During 10FY16
(unaudited results), the society has achieved a total revenue of
INR0.80 crore.
VEERAJ CONSTRUCTION: ICRA Reaffirms B Rating on INR3.5cr Loan
-------------------------------------------------------------
ICRA has reaffirmed the long-term rating of [ICRA]B to the INR3.50
crore long-term, fund based limits of Veeraj Construction. ICRA
has also reaffirmed the short-term rating of [ICRA]A4 to the
INR6.50 crore (enhanced from INR4.50 crore) short-term, non-fund
based limits of VC.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term, Fund
based limits
Cash Credit 3.50 [ICRA]B reaffirmed
Short Term, Non-
Fund based limits 6.50 [ICRA]A4 reaffirmed
The reaffirmation of ratings factor in the long standing
experience of promoters in the field of irrigation and water
supply projects execution and healthy order book of ~ INR105 crore
as of Dec'15, equivalent to ~7.0 times operating income of FY15,
however, sizable share of these orders are slow moving and it is
one of the key concerns for business risk profile of the firm. The
assigned ratings are also constrained by geographic concentration
of the firm with presence in only few districts of Maharashtra and
hence making it susceptible to delays in ordering from the
authorities. The ratings are also constrained by high working
capital intensive nature of the business marked by the firm's
extended receivable cycle as well as high inventory days primarily
due to slow moving projects. The firm is also exposed to inherent
risks of contractual nature of business with susceptibility to
delays in project execution as evidenced in the past. Going
forward, the rating will remain sensitive to timely execution of
orders in hand which to a large extent depends on funding
availability with the authorities.
Veeraj Construction, a partnership firm based out of Nashik,
Maharashtra, is involved in executing irrigation and water supply
projects on a turnkey basis. The firm was established as a
proprietorship firm by Mr. Sanjay Kotecha in 2006, which was then
converted into a partnership firm in 2009, with Mrs. Vandana
Kotecha, wife of Mr. Sanjay, as the partner.
VIDS OVERSEAS: CARE Revises Rating on INR0.90cr LT Loan to BB-
--------------------------------------------------------------
CARE revises/reaffirms the ratings assigned to bank facilities of
Vids Overseas.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 0.90 CARE BB- Revised from
CARE B+
Short term Bank Facilities 7.50 CARE A4 Reaffirmed
Rating Rationale
The revision in the long-term rating assigned to the bank
facilities of Vids Overseas (VO) factors in the significant
improvement in the scale of operation, improvement in the capital
structure and debt coverage indicators and working capital cycle
albeit marginal decline in profit margin during FY15 (refers to
the period April 1 to March 31).
The ratings continue to be constrained by relatively small scale
of operation, thin profitability inherent to trading nature of
operations, low capitalization and working capital intensive
nature of operation. The ratings are further constrained by
presence in highly fragmented industry leading to intense
competition, susceptibility of profitability margins to volatile
prices of traded material and constitution of entity as a
partnership firm.
The aforesaid constraints are partially offset by the strengths
derived from the experienced partners along with their financial
support extended in past.
The ability of VO to increase its scale of operation and improve
profitability amidst intense competition and volatility in traded
goods prices while efficiently managing its working capital
requirement are the key rating sensitivities.
VO was established in 2005 as a partnership firm by Mr Anand
Agarwal and Mr Sandeep Goyal. VO is engaged into the trading of
fabrics (polyester, denim, viscose and others). During FY15, VD
earned its entire revenue from domestic market (majorly Mumbai),
whereas purchases included 20% imports (of total purchases) mainly
from China and Korea. VD has its own warehouse located at Bhiwandi
(Thane).
=========
J A P A N
=========
* JAPAN: China-Related Bankruptcies Rise 70%
--------------------------------------------
Asian Nikkei Review reports that the Chinese economy's woes are
rippling toward Japan and the rest of the world, triggering a wave
of bankruptcies among companies dependent on the Asian giant.
Tokyo Shoko Research said that from April 2015 to February 2016,
Japan saw 80 bankruptcies caused by such factors as China's
slowing economy and higher production costs, with liabilities
totaling more than JPY230 billion ($2.01 billion), Nikkei relates.
The number of cases jumped 70% compared with a year earlier.
Total liabilities rose by roughly a factor of 10 to account for
about 13% of the total among all Japanese corporations that went
bankrupt in the period as opposed to just over 1% in all of fiscal
2014, Nikkei relates.
There were 10 China-related bankruptcies in February alone, with
net liabilities of about JPY3 billion, the report relays.
Nikkei notes that China has reported that gross domestic product
expanded 6.9% in 2015 -- the slowest in 25 years. Growth in
industrial output and capital investment has also sagged. Many see
the deceleration continuing on excess production capacity and
other structural factors. Resource-based companies and parts
makers counting on robust Chinese demand now face headwinds.
Until fiscal 2014, China-related bankruptcies were seen primarily
among apparel makers and other smaller businesses and caused
mainly by rising wages and other costs, Tokyo Shoko Research, as
cited by Nikkei. The trend is now spreading to larger enterprises,
adds Nikkei.
================
S R I L A N K A
================
NATIONAL DEVELOPMENT: S&P Affirms B+ ICR, Revises Outlook to Neg.
-----------------------------------------------------------------
Standard & Poor's Ratings Services said that it had revised its
outlook on the long-term issuer credit ratings on National
Development Bank PLC (NDB), National Savings Bank (NSB), People's
Leasing & Finance PLC (PLC), and DFCC Bank to negative from
stable. At the same, S&P affirmed the ratings on these Sri Lankan
financial institutions and on their outstanding notes.
S&P's rating actions on these financial institutions reflect the
potential deterioration in the operating environment for these
entities and the revision in the outlook on the sovereign long-
term credit rating on Sri Lanka (B+/Negative/B) to negative from
stable earlier because of rising fiscal and external imbalances in
the country.
S&P expects operating conditions for Sri Lankan financial
institutions to deteriorate along with the sovereign's weakening
external and fiscal performance. S&P affirmed the ratings on
these entities because it believes credit factors specific to them
are broadly unchanged.
S&P do not rate financial institutions in Sri Lanka above the
sovereign because of the direct and indirect influence that the
sovereign in distress would have on their operations, including
their ability to service foreign-currency obligations. S&P's
ratings on NDB, NSB, and PLC are the same as the sovereign credit
rating on Sri Lanka.
In S&P's view, the sovereign credit factors are also relevant for
financial institutions in Sri Lanka because: (1) these entities
are subject to government policy and regulation; (2) they invest a
sizable portion of their assets in government securities or
credit; (3) a high proportion of their revenue comes from domestic
operations that are susceptible to deterioration in macroeconomic
environment typically associated with sovereign stress; and (4)
some of them rely on the government to derive foreign currency to
repay or hedge their foreign currency liabilities.
S&P considers it unlikely that Sri Lankan financial institutions
would be immune to increasing credit pressures on the sovereign
and the broader operating environment. S&P reflects these risks
in our view that the economic risk trend and industry risk trend
for Sri Lanka's banking sector have become negative.
The weak operating environment could manifest in the form of
rising credit risk in Sri Lanka, particularly if remittances into
Sri Lanka remain weak or the country's economic growth is lower
than our current base-case expectations. The funding profile of
the system may also deteriorate, leading to an increase in
competition among banks for funds.
Moreover, as economic risk in Sri Lanka increases, the capital
that banks in the country need to hold to maintain their risk-
adjusted capital ratio (RAC) will increase. That's because S&P
calibrates risk weights for banks based on the economic risk in
that country.
S&P could lower its ratings on Sri Lanka in the next 12 months if
S&P sees no tangible signs of a substantial and sustained reversal
of the weakening of external and fiscal credit metrics S&P
currently projects. In this scenario, S&P believes that the
systemic risks facing Sri Lankan banks would also have increased,
and consequently, S&P would expect to revise the assessment of the
banking sector's anchor stand-alone credit profile to 'b+' from
'bb-'. S&P would lower its long-term ratings on DFCC, NSB, NDB,
and PLC in this case.
S&P also expects to lower the ratings on DFCC and NDB if their
capitalization weakens, such that their pre-diversification RAC
ratio falls below 5%, even if the systemic risks facing Sri
Lanka's banking sector remain unchanged, in S&P's view.
S&P expects to revise the rating outlook on these financial
institutions to stable if the above risks subside.
RATINGS LIST
Ratings Affirmed; Outlook Action
To From
National Development Bank PLC
Counterparty Credit Rating B+/Negative/B B+/Stable/B
DFCC Bank
Counterparty Credit Rating B/Negative/B B/Stable/B
People's Leasing & Finance PLC
Counterparty Credit Rating B+/Negative/B B+/Stable/B
National Savings Bank
Counterparty Credit Rating B+/Negative/B B+/Stable/B
Ratings Affirmed
DFCC Bank
Senior Unsecured B
National Savings Bank
Senior Unsecured B+
BICRA SCORE SNAPSHOT
SCORE
To From
BICRA* 8 8
Economic Risk* 8 8
Economic Risk Trend Negative Stable
Economic Resilience** 5 5
Economic Imbalances** 4 4
Credit Risk In The Economy** 5 5
Industry Risk* 7 7
Industry Risk Trend Negative Stable
Institutional Framework** 5 5
Competitive Dynamics** 4 4
Systemwide Funding** 4 4
*On a scale of 1 (lowest risk) to 10 (highest risk)
**On a scale of 1 (lowest risk) to 6 (highest risk)
SRI LANKA: S&P Revises Outlook on 'B+' Sov. Credit Rating to Neg.
-----------------------------------------------------------------
Standard & Poor's Ratings Services revised the outlook on its 'B+'
long-term sovereign credit ratings on the Democratic Socialist
Republic of Sri Lanka to negative from stable. S&P also affirmed
the long-term rating and the 'B' short-term credit rating and left
its transfer and convertibility risk assessment on Sri Lanka
unchanged at 'B+'.
RATIONALE
The negative outlook reflects rising pressure on Sri Lanka's
external liquidity resulting from a weaker trade balance and
remittances, and short-term capital outflows that have eroded its
reserve buffers. The outlook also reflects the country's weakened
public finances. S&P expects sizable and rising projected fiscal
deficits to push borrowings higher in 2016-2019. In S&P's view,
the authorities face significant challenges in effectively
addressing the rising imbalance due to institutional constraints
and a fragmented political landscape.
The rating constraints on Sri Lanka are the country's weak
external liquidity and a high general government net debt burden
(at 72% of GDP in 2015). Sri Lanka's general government dedicates
a higher share of its revenues to interest payments and it is
among the highest in the world (39% in 2015). With GDP per capita
at US$4,000 (2016), Sri Lanka's level of prosperity is low.
Another credit weakness lies in what we consider as an uncertain
commitment and capacity to fiscal consolidation following the
Aug. 17, 2015, parliamentary elections and the 2016 budget
delivered on Nov. 20, 2015. Institutional capacity remains low by
international standards and poses risks to the effectiveness and
predictability of Sri Lanka's policy choices. These rating
constraints weigh against Sri Lanka's robust growth prospects,
which are above average for sovereigns at similar levels of
development.
Sri Lanka's weakening external liquidity has been driven, inter
alia, by these trends:
-- S&P's expectation of the trade deficit widening to an
estimated 11.4% of GDP in 2016, versus 10.2% in 2013-2015.
This development is due partly to a sharp rise in motor
vehicle imports for investment purposes and personal use.
A reduction in import-related taxes on motor vehicles in
the 2016 budget, low interest rates for leasing facilities,
and increases in public sector salaries were reasons for
the higher demand.
-- S&P's projection of net current transfers--mostly workers'
remittances, of which more than half come from the Gulf
states--dropping to 7.2% of GDP in 2016 versus an average
7.7% in the three preceding years.
-- A pickup in short-term capital outflows.
-- On the financing side, negative net portfolio inflows in
2015. S&P currently do not expect a recovery before 2017.
S&P expects external liquidity (measured by gross external
financing needs as a percentage of current account receipts [CAR]
plus usable reserves) will average 122% over 2016-2019, compared
with 111% in 2014-2015. S&P also forecasts that the country's
external debt (net of official reserves and financial sector
external assets) will be about 143% of CAR this year but will rise
gradually to a little below 146% by 2019.
The risks associated with Sri Lanka's weak external settings had
previously been mitigated by growing reserve buffers that
buttressed the country's external resilience. S&P estimates,
however, that Sri Lanka's gross international reserves (excluding
gold deposits) were US$5.5 billion as of January 2016 (over two
months coverage of current account payments), compared with an
average of US$8.2 billion in 2014 (3.5 months of current account
payments). These reserves include a fully drawn contingent
currency-swap facility of US$1.1 billion with the Reserve Bank of
India (RBI; due for repayment in March 2016) and the US$2.15
billion proceeds from bonds issued in May and October 2015 (both
maturing in 2025)
S&P believes the attendant risks could be mitigated by extending
the maturity of the currency-swap facility with the RBI,
increasing a US$1.6 billion facility with the People's Bank of
China, and a US$400 million financing facility for South Asian
Association for Regional Cooperation member country Central Banks.
Securing external liquidity support from the IMF could also ease
rising external funding pressure. Other factors that mitigate Sri
Lanka's external risks include its low banking sector external
borrowings and some exchange rate flexibility (the rupee fell
about 9% in 2015, although this has yet to translate into higher
export demand).
Fundamental weaknesses remain in the government's fiscal metrics.
S&P projects annual growth in general government debt to average
6.2% of GDP for 2016-2019. In view of Sri Lanka's robust nominal
GDP growth, S&P expects net general government debt to remain near
current levels of close to 70% of GDP through 2019. Should the
rupee depreciate further against the U.S. dollar, the net debt
ratio may rise further, given about 60% of government debt is
denominated in foreign currencies. In addition, S&P expects only
slow progress in reducing debt-servicing costs, which S&P projects
to account for more than 40% of government revenue in 2016. This
is the second-highest ratio among all 131 sovereigns that Standard
& Poor's currently rates, second only to Lebanon.
The gaps S&P observes in Sri Lanka's policymaking capacity partly
reflect the political uncertainty associated with two elections
within seven months. S&P believes this hinders responsiveness and
predictability in policymaking and weighs particularly on business
confidence, investment plans, and overall growth prospects.
Elsewhere, S&P believes the Central Bank of Sri Lanka's (CBSL)
ability to sustain economic growth while attenuating economic or
financial shocks has improved somewhat. Although CBSL is not
independent of other policymaking institutions and S&P continues
to consider monetary policy credibility and effectiveness as a
weakness, the central bank is building a record of credibility,
shown in reducing inflation through the use of market-based
instruments to conduct monetary policy.
Sri Lanka's growth outlook continues to be underpinned by
government investment (including rebuilding the war-torn northern
districts), rising tourist arrivals, and declining inflation,
which S&P expects to remain in the single digits.
S&P continues to expect Sri Lanka's growth prospects to be
favorable. S&P believes the country will most likely maintain
growth in real per capita GDP of 5.5% per year over 2016-2019
(equivalent to 6.2% real GDP growth). Stronger growth, in S&P's
view, would require an improved business environment and a pick-up
in export markets.
Combining S&P's view of Sri Lanka's state-owned enterprises and
its small financial system (banks' loans to the private sector
account for only a third of GDP), S&P views the government's
contingent liabilities as limited.
OUTLOOK
The negative outlook indicates that S&P could lower its rating on
Sri Lanka in the next 12 months if S&P sees no tangible signs of a
substantial and sustained reversal of the weakening of external
and fiscal credit metrics S&P currently projects.
S&P may revise the outlook back to stable if Sri Lanka's external
and fiscal indicators improve significantly, or if S&P concludes
that the strength of Sri Lanka's institutions and governance
practices is on a significant and sustained improving trend.
In accordance with S&P's relevant policies and procedures, the
Rating Committee was composed of analysts that are qualified to
vote in the committee, with sufficient experience to convey the
appropriate level of knowledge and understanding of the
methodology applicable. At the onset of the committee, the chair
confirmed that the information provided to the Rating Committee by
the primary analyst had been distributed in a timely manner and
was sufficient for Committee members to make an informed decision.
After the primary analyst gave opening remarks and explained the
recommendation, the Committee discussed key rating factors and
critical issues in accordance with the relevant criteria.
Qualitative and quantitative risk factors were considered and
discussed, looking at track-record and forecasts.
The committee agreed that the external profile had deteriorated.
All other key rating factors were unchanged.
The chair ensured every voting member was given the opportunity to
articulate his/her opinion. The chair or designee reviewed the
draft report to ensure consistency with the Committee decision.
The views and the decision of the rating committee are summarized
in the above rationale and outlook. The weighting of all rating
factors is described in the methodology used in this rating
action.
RATINGS LIST
Ratings Affirmed; Outlook Action
To From
Sri Lanka (Democratic Socialist Republic of)
Sovereign Credit Rating B+/Negative/B B+/Stable/B
Sri Lanka (Democratic Socialist Republic of)
Senior Unsecured B+
SRI LANKA TELECOM: S&P Affirms 'B+' CCR & Revises Outlook to Neg.
-----------------------------------------------------------------
Standard & Poor's Ratings Services said that it had revised its
outlook on Sri Lanka Telecom PLC (SLT) to negative from stable.
At the same time, S&P affirmed its 'B+' long-term corporate credit
rating on the Sri Lanka-based wireless service provider.
"The outlook revision reflects our view that the rating on SLT
remains constrained by the sovereign credit rating and transfer
and convertibility assessments on Sri Lanka," said Standard &
Poor's credit analyst Ashutosh Sharma.
S&P's rating action on SLT follows a similar action on the
sovereign credit rating on Sri Lanka (B+/Negative/B). The
negative outlook on Sri Lanka reflects rising pressure on the
country's external liquidity resulting from a weaker trade balance
and remittances, and short-term capital outflows that have eroded
its reserve buffers. The outlook also reflects the country's
weakened public finances.
Sri Lanka's high country and macroeconomic risk continues to
constrain SLT's business risk profile. However, S&P sees a low
likelihood of negative intervention by the Sri Lankan government
and therefore S&P do not expect the country's fiscal imbalances to
immediately affect its view of the company's stand-alone credit
profile (SACP). The rating on SLT remains three notches below its
SACP of 'bb+'.
S&P expects SLT's good brand presence to enable it to maintain its
No. 2 position in the highly competitive Sri Lankan telecom
market, after Dialog Axiata PLC and ahead of Etisalat Lanka (Pvt.)
Ltd. Over the next two years, S&P expects data-led services to
drive growth for Sri Lankan telecom operators. However, SLT's
elevated capital spending on rolling out a country-wide
information and communications technology infrastructure will
result in negative free operating cash flows during that time.
The negative outlook on SLT reflects the outlook on the sovereign
credit rating on Sri Lanka.
S&P could lower its rating on SLT if S&P lowers the sovereign
rating or the transfer and convertibility assessment on Sri Lanka.
This could happen if Sri Lanka's external and fiscal performance
further weakens. However, S&P is unlikely to lower the rating
even if SLT's operating and financial performances deteriorate
significantly because the company's 'bb+' SACP is three notches
above the sovereign credit rating.
S&P could revise the outlook to stable if it revises the sovereign
rating outlook back to stable.
*********
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 ***