/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/160321.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 21, 2016, Vol. 19, No. 56 Headlines A U S T R A L I A AMAROO EARLY: First Creditors' Meeting Set For March 30 CAKES GALORE: Placed Into Voluntary Administration DEVOTED DVD: First Creditors' Meeting Set For April 1 PHONE HOSPITAL: First Creditors' Meeting Set For March 24 PIE FACE: Hoarded Ingredients Before Collapse, ASIC Inquiring PROFESSIONAL CLIENT: First Creditors' Meeting Set For March 30 SPONSORSHIP DNA: First Creditors' Meeting Set For March 30 C H I N A COUNTRY GARDEN: S&P Lowers CCR to 'BB'; Outlook Stable FUFENG GROUP: Fitch to Retain BB Rating on Weaker 2015 EBITDA MAOYE INTERNATIONAL: S&P Lowers Corporate Credit Rating to 'B-' H O N G K O N G BANK OF EAST: Moody's Affirms Ba1(hyb) PONV Sub. Debt Rating POWERLONG REAL: Moody's Says 2015 Results Support B2 CFR Outlook I N D I A ADIG JEMTEX: ICRA Reaffirms B+ Rating on INR5.50cr Term Loan ADITYA PRINTS: CRISIL Suspends 'B' Rating on INR283.6MM Loan ALUPAN COMPOSITE: CRISIL Reaffirms B- Rating on INR160MM Loan APEX CONSUMER: CRISIL Suspends B+ Rating on INR67.5MM LT Loan ASHIRWAD CHAIN: CRISIL Suspends 'D' Rating on INR90MM Cash Loan ASHWAMEGH INFRA: CRISIL Suspends B+ Rating on INR50MM Term Loan BOSS PHARMA: CRISIL Assigns 'B' Rating to INR40MM Cash Loan BRILLIANT INTERNATIONAL: CRISIL Suspends B+ Rating on INR30M Loan CHAHAL SPINTEX: CRISIL Reaffirms D Rating on INR228.1MM Loan CONVEYOR AND ROPEWAY: CRISIL Cuts Rating on INR40MM Loan to 'D' DNH PROJECTS: ICRA Reaffirms 'C' Rating on INR12cr Cash Loan DOOR SANCHAR: ICRA Lowers Rating on INR24.15cr Term Loan to D G-TECH STONE: ICRA Suspends C+ Rating on INR18.5cr LT Loan K. P. INDUSTRIES: CRISIL Suspends 'B' Rating on INR50MM Loan KINGFISHER AIRLINES: No Bids for Kingfisher House KOKONUT CLOTHING: CRISIL Suspends B Rating on INR74MM Cash Loan KWAL PRO: ICRA Assigns B+ Rating to INR4.35cr Loan LAKSHMI STEEL: CRISIL Lowers Rating on INR85MM Cash Loan to B+ LENZ CERAMIC: CRISIL Suspends 'D' Rating on INR120MM Term Loan MAHALAXMI ASSOCIATES: ICRA Reaffirms B+ Rating on INR6cr Loan MAHALAXMI INDIA: ICRA Reaffirms B+ Rating on INR4cr LT Loan MAHARASHTRA ALUMINIUM: CRISIL Assigns B Rating to INR100MM Loan MAHAVIR SHIP: ICRA Lowers Rating on INR34.80cr Loan to 'D' MG HOUSING: CRISIL Suspends B+ Rating on INR300M Term Loan NRI ACADEMY: CRISIL Suspends 'D' Rating on INR70MM Cash Loan PASUPATI RICE: CRISIL Assigns B+ Rating to INR80MM Cash Loan PEARSON DRUMS: ICRA Assigns B+ Rating to INR16cr Cash Loan PURULIA CHEMICALS: CRISIL Suspends 'D' Rating on INR30MM Loan RNS POWER: CRISIL Assigns 'B+' Rating to INR290MM LT Loan ROCKY DHAR: ICRA Lowers Rating on INR12cr Cash Loan to 'B' S.M. COLD: ICRA Suspends 'B' Rating on INR5.03cr Loan SAINOR PHARMA: ICRA Reaffirms B+ Rating on INR4.40cr LT Loan SANJAY RICE: ICRA Reaffirms 'D' Rating on INR4.16cr Term Loan SHAFEEQ SHAMEEL: CRISIL Cuts Rating on INR50MM Loan to B+ SHANTAI EXIM: ICRA Revises Rating on INR7cr LT Loan to B- SHIVKRUPA COTTON: CRISIL Suspends D Rating on INR30MM Cash Loan SHREE GAJKESHRI: CRISIL Assigns B Rating to INR56.5MM LT Loan SHRIRAM TRANSPORT: S&P Assigns 'BB+' ICR; Outlook Stable SIGMA GALVANIZING: CRISIL Reaffirms B- Rating on INR117.6MM Loan SRIKARA PACKAGING: ICRA Suspends B+ Rating on INR4cr Loan TARUN SHREE: CRISIL Suspends B- Rating on INR1.23BB Term Loan TRIVENI SHIP: CRISIL Reaffirms B+ Rating on INR50MM Cash Loan TUFFWARE INDUSTRIES: CRISIL Lowers Rating on INR80MM Loan to D VEDIC AND FUTURISTIC: CRISIL Rates INR1.0BB Term Loan at 'B' VIDYA POLYMER: ICRA Reaffirms B+ Rating on INR4.5cr Loan WATER SYSTEMS: ICRA Suspends B+ Issuer Rating WESTERN CONSTRUCTION: ICRA Assigns B+ Rating to INR140cr Loan I N D O N E S I A BUMI SERPONG: Fitch Affirms 'BB-' LT FC IDR; Outlook Stable J A P A N TOSHIBA CORP: Sells Medical Devices Unit to Canon For JPY665.5BB TOSHIBA CORP: Says US Units Are Investigated Over Accounting - - - - - ================= A U S T R A L I A ================= AMAROO EARLY: First Creditors' Meeting Set For March 30 ------------------------------------------------------- John Shanahan of Gervase Consulting was appointed as administrator of Amaroo Early Learning Centre Pty Ltd on March 17, 2016. A first meeting of the creditors of the Company will be held at Novotel Canberra, 65 Northbourne Avenue, in Canberra, on March 30, 2016, at 9:30 a.m. CAKES GALORE: Placed Into Voluntary Administration -------------------------------------------------- Broede Carmody at SmartCompany reports that a family-owned dessert business operating for more than 20 years is facing an uncertain future after its parent company collapsed into voluntary administration. Cakes Galore appointed external managers earlier this month, with Anne Meagher and Terry van der Velde acting as joint administrators, the report says. A creditors' meeting was held last week in Toowoomba, SmartCompany relates. According to the report, Cakes Galore chief executive Julian Lancaster-Smith told The Toowoomba Chronicle it was a sad day for the family-run business. "The management team and I will be working closely with the administrators to determine the next steps but we are confident that we can trade our way out of the current situation and be back to normal trading condition in the short to medium term," the report quotes Mr. Lancaster-Smith as saying. SmartCompany contacted SV Partners for comment, but did not receive a response prior to publication. Cakes Galore is continuing to trade, the report notes. About Care Galore Cakes Galore operates the family business Quality Desserts, a Queensland company that supplies puddings, cakes, lamingtons and mince pies to supermarkets across Australia. Quality Desserts was founded in 1992 and initially supplied puddings to Eagle Boys. The business then picked up contracts with a number of hamper companies, before eventually finding its way onto supermarket shelves. Quality Desserts also has contracts with hospitals and a number of airlines, and exports its products to New Zealand and Singapore. DEVOTED DVD: First Creditors' Meeting Set For April 1 ----------------------------------------------------- Richard Trygve Rohrt of Hamilton Murphy was appointed as administrator of Devoted DVD Pty Ltd on March 18, 2016. A first meeting of the creditors of the Company will be held at Hamilton Murphy, Certified Practising Accountants, 237 Swan Street, in Richmond, on April 1, 2016, at 10:30 a.m. PHONE HOSPITAL: First Creditors' Meeting Set For March 24 --------------------------------------------------------- Justin James Cadman -- justin@mclarenknight.com.au -- of McLaren Knight was appointed as administrator of Phone Hospital Pty Ltd, trading as Mobile Phone Hospital, on March 15, 2016. A first meeting of the creditors of the Company will be held at the Boardroom of McLaren Knight, First Floor, 63 Abbott Street, in Cairns, Queensland, on March 24, 2016, at 2:30 p.m. PIE FACE: Hoarded Ingredients Before Collapse, ASIC Inquiring ------------------------------------------------------------- The Australian reports that the corporate regulator is looking into an apparent build-up of ingredients held by fast food chain Pie Face in the weeks before its directors put it into administration in November 2014. Any such stock procurement would have provided administrators with a buffer to help tide them through the company's restructure, The Australian says. It would also have increased the amount owed to suppliers, who, as unsecured creditors, would be ranked last to be paid in the administration, according to the report. Managing director Kevin Waite explained the "stock ramp up" in a November 3, 2014, email, seen by The Australian, to other Pie Face executives, including co-founder Wayne Homschek. The Australian relates that Mr. Waite said he had been given a "mandate" that was very clear. "Ensure that we have 1 months of stock without alarming the suppliers with one-off big hit orders," The Australian quotes Mr. Waite as saying. "We normally carry roughly two weeks of stock." The Australian says the email is believed to be part of a chain also involving Mr Homschek, who was chief executive at the time, and a factory manager. To the disappointment of investors, including retail mogul Brett Blundy, Fat Prophets founder Angus Geddes and Rothschild Australia chairman Trevor Rowe, who had tipped AUD35 million into the venture, Pie Face's directors pulled the plug on the struggling company 2-1/2 weeks later, on November 21, appointing administrators Sule Arnautovic and Rod Sutherland of Jirsch Sutherland, according to the report. The Australian relates that despite his managing director title, Mr Waite was not among directors of the top company in the group, Pie Face Holdings, at the time, although Mr Homschek was. In the past fortnight the Australian Securities and Investments Commission has been seeking further information about the allegation, but it is believed the agency has yet to decide whether any action should be taken, The Australian says. One large supplier said he had moved on since the alleged stock build-up, the report says. "I get along with a lot of people there and I don't want to burn any bridges," the report quotes the supplier as saying. "That was the previous management." At the time of its collapse, creditors included noteholders owed $7.5 million and the directors of Pie Face Holdings owed a total of $33 million, the report notes. Pie Face has endured further turmoil since emerging from administration under a deed of company arrangement, agreed to by creditors on December 30, 2014. Mr Homschek, a former Wall Street financier, resigned from the board in early February last year after unhappy shareholders moved to sack him. Last month, creditors agreed to give the main operating entity, Pie Face Pty Ltd, a six-month holiday from payments of $125,000 a month required under the deed of company arrangement. This would give the company some "breathing space", Mr Arnautovic told creditors, adds The Australian. PROFESSIONAL CLIENT: First Creditors' Meeting Set For March 30 -------------------------------------------------------------- Richard Albarran and Brent Kijurina of Hall Chadwick were appointed as administrators of Professional Client Recruitment Solutions Pty Ltd on March 16, 2016. A first meeting of the creditors of the Company will be held at Chartered Accountants Australia and New Zealand, Level 1,King Room, 33 Erskine St, in Sydney, on March 30, 2016, at 11:00 a.m. SPONSORSHIP DNA: First Creditors' Meeting Set For March 30 ---------------------------------------------------------- Steven Gladman of Hall Chadwick Chartered Accountants was appointed as administrators of Sponsorship DNA Pty Limited on March 16, 2016. A first meeting of the creditors of the Company will be held at Hall Chadwick Chartered Accountants, Level 40, 2 Park Street, in Sydney, on March 30, 2016, at 10:00 a.m. ========= C H I N A ========= COUNTRY GARDEN: S&P Lowers CCR to 'BB'; Outlook Stable ------------------------------------------------------ Standard & Poor's Ratings Services lowered its long-term corporate credit rating on China-based property developer Country Garden Holdings Co. Ltd. to 'BB' from 'BB+'. The outlook is stable. S&P also lowered its issue rating on the company's outstanding senior unsecured notes to 'BB' from 'BB+'. At the same time, S&P lowered its long-term Greater China regional scale ratings on the company and its notes to 'cnBBB-' from 'cnBBB+'. "We downgraded Country Garden because of its deteriorating margins and leverage. In 2015, the margin compression was greater than we expected, and leverage notably weakened because of aggressive land acquisitions," said Standard & Poor's credit analyst Brian Huang. "We believe Country Garden's leverage is unlikely to recover to the levels we previously anticipated since the company continues to aggressively acquire land and maintains a high level of saleable resources." Toward the end of the second half of last year, the company became significantly more aggressive towards land purchase and potential acquisitions. As such, the company needed to utilize high-cost funding channels, including perpetual securities. During the year, the company acquired land with a gross floor area (GFA) of 38 million square meters (sqm) for Chinese renminbi (RMB) 56 billion (about US$8.9 billion), which was much higher than its RMB20 billion budget. S&P believes that Country Garden's high leverage will improve only slightly in 2016, given the company's aggressive land acquisitions and growth targets. In 2015, total debt (including perpetual securities of RMB19.5 billion, which S&P treats as debts) increased by about 71% to RMB109 billion. The company's debt-to- EBITDA ratio weakened to 5.8x from 3.6x in 2014. S&P also estimates that Country Garden's EBITDA margin will only recover moderately to 18%-19% in 2016 from 17% in 2015. This is because a sizable portion of unrecognized sales may also carry margins in the low teens. In 2015, Country Garden's margin significantly weakened due to the recognition of a large number of sales from 2014 when it offered discounts amid a slow market. Margins for new projects earmarked for sales will likely be higher due to improved property prices, but this will be offset by Country Garden's considerable exposure to low-tier cities, which have a large inventory overhang. S&P's base-case forecast is that Country Garden's cash payment for land acquisitions in 2016 to remain high at about RMB60 billion- RMB65 billion (including RMB20 billion in unpaid land premiums from 2015). At the same time, Country Garden's land bank increased by almost 50% last year, and the company's follow-on construction capital expenditure therefore should also increase considerably this year. S&P expects these factors to increase total borrowings by about 13%-18% to RMB125 billion-RMB130 billion by the end of 2016. Country Garden's sales will likely increase rapidly on the back of its increasing saleable resources. In 2016, these resources should increase by 22% to RMB300 billion, of which RMB191.5 billion will be from newly launched sales during the year. Therefore, Country Garden's sales target of RMB168 billion looks achievable to S&P. In 2015, the sales were RMB140 billion. However, the high capital expenditure for construction and land acquisitions will largely temper the fast sales growth and moderately improving margins. S&P remains cautious about Country Garden's newly launched Forest City Project in Malaysia. S&P believes the sales target is somewhat ambitious given this is a new large-scale project and targets primarily mainland overseas buyers. In 2016, the company plans to launch at least RMB30 billion in saleable resources for this project. "The stable outlook reflects our expectation that Country Garden's leverage will improve moderately because a modest improvement in margin and sales execution in 2016 should offset increased construction spending and land acquisitions. We also expect Country Garden's funding costs to decrease due to access to cheaper onshore funding, but leverage will only improve gradually towards 5x over the next 12 months," said Mr. Huang. S&P could lower the rating if Country Garden's leverage shows no sign of improvement and that its EBITDA interest coverage falls below 3x. This could happen if the company's debt-funded expansion, including land acquisitions, becomes more aggressive than we expect or if its profitability continues to decline. The potential for upgrade is limited over the next 12 months. S&P could upgrade Country Garden if the company's profitability recovers significantly, its contracted sales improves substantially, and its leverage declines because of a more disciplined financial policy, such that the debt-to-EBITDA ratio is lower than 4x on a sustained basis. FUFENG GROUP: Fitch to Retain BB Rating on Weaker 2015 EBITDA ------------------------------------------------------------- Fitch Ratings says that China-based Fufeng Group Limited's (Fufeng, BB/Stable) ratings are not affected by its weaker 2015 EBITDA, which was due to lower xanthan gum (XG) prices. Ratings on the maker of monosodium glutamate (MSG) and XG continue to be supported by its market leadership in its key product categories, as well as the company's improving free cash flow (FCF) profile as capex requirements fall. Fufeng's EBITDA margin dropped to 14.5% in 2015 from 16.3% in 2014, driven by falling XG and fertiliser prices and higher administration costs. However, Fitch estimates that the company turned FCF positive in 2015 as capital expenditure fell. Fufeng reduced its net debt by 24% to CNY2.8 bil. at the end of 2015. Fitch expects Fufeng to continue generating positive FCF in 2016 and 2017 as capex needs remain low. Fufeng's MSG business recorded stable performance in 2015, with revenue rising 6% and selling prices increasing 4%. The MSG business accounted for over 50% of Fufeng's consolidated gross profit. Fufeng is the biggest MSG producer globally by capacity, and it enjoys economies of scale, integrated facilities and proximity to raw materials, all of which are difficult to replicate. Fitch expects Fufeng to further strengthen its cost leadership in MSG products as enhanced production technology will be rolled out in all its manufacturing bases in 2016. Fufeng cut XG prices by 27% in 2015 due to fierce price competition and weak demand from the oil and gas sector. As a result, the gross margin of XG products dropped to 37% in 2015 from 53% in 2014. The company will in 2016 continue to optimise its customer base in the food processing sector, which accounts for 50% of its gross XG sales volume. Fitch does not expect to see a meaningful turnaround in the next 12 months given the oversupply in the market and the depressed oil and gas market. MAOYE INTERNATIONAL: S&P Lowers Corporate Credit Rating to 'B-' --------------------------------------------------------------- Standard & Poor's Ratings Services said that it had lowered its long-term corporate credit rating on China-based department store operator Maoye International Holdings Ltd. to 'B-' from 'B'. S&P also lowered its long-term issue rating on the company's senior unsecured notes to 'CCC+' from 'B-'. At the same time, S&P lowered its long-term Greater China regional scale rating on the company to 'cnB-' from 'cnB+' and on the notes to 'cnCCC+' from 'cnB'. S&P placed all the ratings on CreditWatch with negative implications. "We lowered the rating and placed it on CreditWatch to reflect Maoye's heightened refinancing risk, given the lack of improvement in its liquidity position," said Standard & Poor's credit analyst Shalynn Teo. "The scale of the company's potential asset disposals is uncertain, and any improvement in liquidity will largely depend on issuance of domestic bonds or notes." Maoye's liquidity remains burdened by weakening revenues from its department-store operations and property sales, which are unlikely to improve materially in the next 12 months. S&P therefore revised its assessment of its liquidity to weak from less than adequate. Although Maoye has a large portfolio of self-owned commercial properties in good locations, the company has a limited track record of selling assets to reduce debt and improve liquidity, in S&P's view. In addition, Maoye's high reliance on the domestic bond markets may put further pressure on its refinancing in the event of a liquidity crunch in China. Maoye's liquidity risk is likely to remain high, with its substantial short-term debt maturities, low cash balance, and weak operating performance. Nevertheless, the company has established good access to the domestic bond markets. "We expect Maoye's operating performance to remain sluggish over the next 12 months, given weak retail sales and rising competition," said Ms. Teo. "As a result, we anticipate that the company will not generate significant operating cash flows to repay debt." In addition, S&P anticipates property sales will remain weak because the company may not be able to expedite sales and rapidly reduce inventory levels in times of distress. However, S&P expects the company to be able to meet its interest payments. S&P anticipates that Maoye's EBITDA interest coverage will be 1.5x- 2.0x in the next 12 months, compared with S&P's estimate of 2.0x as of Dec. 31, 2015. S&P aims to resolve the CreditWatch within three months, depending on Maoye's ability to execute a concrete refinancing plan for its near-term debt maturities. S&P may lower the ratings by one or more notches if Maoye does not present a credible and comprehensive refinancing plan to address its short-term debt maturities and sustainably improve its liquidity profile. A downgrade could materialize if: (1) Maoye fails to secure refinancing with longer tenor debt; (2) the company's reduction in property inventory is slower than S&P expects; (3) its operating cash flows are substantially lower than S&P estimates; or (4) Maoye takes on more debt-funded expansion or acquisitions. S&P may affirm the rating if Maoye's liquidity position improves materially and on a sustainable basis. This could happen if the company: (1) raises debt through bank loans or long-term bonds to improve its debt maturity profile; and (2) materially reduces its inventory on property development while improving its operating performance and cash flows. ================ H O N G K O N G ================ BANK OF EAST: Moody's Affirms Ba1(hyb) PONV Sub. Debt Rating ------------------------------------------------------------ Moody's Investors Service has revised to negative from stable the rating outlook on three Hong Kong banks. The rating action reflects Moody's expectations of a more challenging operating environment for banks in Hong Kong. "On 12 March 2016, Moody's changed the outlook on Hong Kong government's Aa1 sovereign rating to negative from stable. The revision of the sovereign outlook reflects our concern that Hong Kong's increasing economic and financial linkages with China (Aa3, negative) give rise to potential negative spillovers from China and ultimately weaker growth." In addition, Hong Kong banks continue to operate in an environment with pronounced imbalances, including high private-sector leverage and elevated property prices. The more challenging operating environment has been reflected in Moody's change of Hong Kong's Macro Profile to "Strong" from "Strong+". The banks affected are The Hongkong and Shanghai Banking Corporation Limited (HSBC), Hang Seng Bank Limited, and Dah Sing Bank, Limited. At the same time, Moody's has affirmed their baseline credit assessments (BCA), adjusted BCAs, counterparty risk assessments (CR Assessments), and ratings at current levels. In addition, Moody's has downgraded Bank of East Asia's long-term and short-term deposit ratings to A3/Prime-2 from A2/Prime-1. Moody's has also downgraded its long-term senior unsecured debt rating to A3; senior unsecured commercial paper rating to Prime-2; and long-term CR Assessments to A2(cr). The outlook on all ratings remains negative. Concurrently, Moody's has affirmed the bank's BCA, adjusted BCA, subordinated debt and non-cumulative preference stock ratings, and short-term CR Assessment. Outlooks, which provide an opinion on likely rating direction over the medium term, are assigned only to banks' long-term deposit, issuer and senior unsecured debt ratings. The list of affected ratings follows at the end of the press release. MACRO PROFILE CHANGE "The change in Moody's assessment of Hong Kong's Macro Profile to "Strong" from "Strong+" takes into account our expectation of a deterioration in the operating conditions for Hong Kong banks." Hong Kong's increasing economic and financial linkages with Mainland China suggest that negative spillover effects from the slowing economic growth and challenging credit conditions in China will likely lead to more difficult operating conditions for banks in Hong Kong. In addition, high levels of private-sector borrowing and elevated property prices continue to pose risks to the macro-economy and weigh on the banks' credit profiles. RATINGS RATIONALE The expected more challenging operating conditions weigh on the credit profiles of most rated Hong Kong banks and led Moody's to revise the outlook to negative from stable for HSBC, Hang Seng Bank, and Dah Sing Bank. These three banks' current impaired loan ratios are exceptionally low at below 0.6%, due to benign operating conditions in Hong Kong since the global financial crisis. However, the expected deterioration in operating conditions will likely lead them to report increases in impaired loans in coming years. For HSBC and Hang Seng Bank, their overall performances have been resilient in the last few years. In addition, their earnings could benefit from rises in interest rates. However, Moody's expects any increases in interest rates to be gradual and modest over the next two years. Moreover, a weakening operating environment in HSBC's and Hang Seng Bank's key markets -- including Hong Kong, China and some other economies in Asia Pacific -- would likely pressure asset quality and profitability from their current strong levels over the next 12-18 months. Meanwhile, the deposit and senior unsecured debt ratings of Bank of East Asia incorporate multiple notches of support from the Hong Kong government. The downgrade of its deposit and senior unsecured ratings therefore considers that the government's support for the bank could be weaker than what Moody's had previously assessed. Moody's expectation of the reduced capacity of the Hong Kong government to provide support, as reflected in its negative outlook -- and the high level of support received from the Hong Kong government relative to other Hong Kong banks -- led Moody's to lower its support assumption. In addition, the negative outlook on Bank of East Asia takes into account both the expected weaker operating conditions and potentially lower level of government support, given the likelihood that Hong Kong will adopt a bail-in resolution regime. In view of their negative outlooks, Moody's does not expect any upward rating pressure on these four banks in the near term. However, their outlooks could be revised to stable if macro- economic conditions in Hong Kong improve and these banks -- HSBC, Hang Seng Bank, Dah Sing Bank, and Bank of East Asia -- maintain sound financial metrics. The affected banks' ratings could be downgraded if their fundamentals weaken, as evidenced by an even more challenging operating environment and/or deterioration in their financial metrics. Moody's had revised the outlooks on six Hong Kong subsidiaries of Chinese banks to negative from stable on 2 March 2016 (https://www.moodys.com/research/Moodys-changes-to-negative- outlook-of-Hong-Kong-and-Macau--PR_344756). These banks are Bank of China (Hong Kong) Limited (Aa3, negative), Chiyu Banking Corporation, Ltd. (A1, negative), China Construction Bank (Asia) Corp. Ltd. (A2, negative), China CITIC Bank International Limited (Baa1, negative), Industrial & Commercial Bank of China (Asia) Ltd. (A2, negative), and Wing Lung Bank Limited (A3, negative). As these banks' outlooks are already negative, their ratings are not further impacted by the change in Hong Kong's Macro Profile. The ratings and outlooks for Chong Hing Bank Limited (Baa2, stable) and Shanghai Commercial Bank (A2, stable) are unaffected. While these banks' performances would likely weaken as well, in line with the more challenging operating environment, Moody's also expects their performances to remain consistent with their current rating levels. The ratings and outlooks for DBS Bank (Hong Kong) Limited (Aa3, stable), OCBC Wing Hang Bank Limited (Aa3, stable) and Public Bank (Hong Kong) Limited (A3, stable) also remain unchanged, because Moody's expects parental support to mitigate the negative pressure on their standalone credit profiles. LIST OF AFFECTED RATINGS Issuer: Bank of East Asia, Limited -- BCA affirmed at baa2 -- Adjusted BCA affirmed at baa2 -- Deposit Rating downgraded to A3/P-2 from A2/P-1 -- Long-term CR Assessment downgraded to A2(cr) from A1(cr) -- Short-term CR Assessment affirmed at P-1(cr) -- Senior Unsecured Debt downgraded to A3 from A2 -- Senior Unsecured MTN Program downgraded to (P)A3 from (P)A2 -- Senior Unsecured Commercial Paper downgraded to P-2 from P-1 -- Legacy Subordinated Debt affirmed at Baa3 -- PONV Subordinated Debt affirmed at Ba1(hyb) -- Subordinate MTN Program affirmed at (P)Ba1 -- Non-cumulative Preferred Stock affirmed at Ba2(hyb) -- Outlook for bank remains negative Bank of East Asia Ltd, Singapore Branch -- Long-term CR Assessment downgraded to A2(cr) from A1(cr) -- Short-term CR Assessment affirmed at P-1(cr) -- Senior Unsecured Debt downgraded to A3 from A2 -- Senior Unsecured MTN Program downgraded to (P)A3 from (P)A2 -- Outlook for the branch remains negative Issuer: Innovate Holdings Limited -- Pref. Stock Non-cumulative Preferred Stock affirmed at Ba3(hyb) Issuer: Dah Sing Bank, Limited -- BCA affirmed at a3 -- Adjusted BCA affirmed at a3 -- CR Assessment affirmed at A2(cr)/P-1(cr) -- Deposit Rating affirmed at A3/P-2 -- Senior Unsecured MTN Program affirmed at (P)A3 -- Legacy Subordinate Debt affirmed at Baa1 -- PONV Subordinated Debt affirmed at Baa2(hyb) -- Subordinate MTN Program affirmed at (P)Baa2 -- Junior Subordinate Debt affirmed at Baa2(hyb) -- Junior Subordinate MTN Program affirmed at (P)Baa2 -- Outlook for the bank revised to negative from stable Issuer: Hang Seng Bank Limited -- BCA affirmed at aa3 -- Adjusted BCA affirmed at aa3 -- CR Assessment affirmed at Aa1(cr)/P-1(cr) -- Deposit Rating affirmed at Aa2/P-1 -- Deposit Note/CD Program affirmed at (P)Aa2 -- Outlook for the bank revised to negative from stable Issuer: Hongkong and Shanghai Banking Corp. Ltd (The) -- BCA affirmed at aa3 -- Adjusted BCA affirmed at aa3 -- CR Assessment affirmed at Aa1(cr)/P-1(cr) -- Deposit Rating affirmed at Aa2/P-1 -- Issuer Rating affirmed at Aa2 -- Senior Unsecured Debt affirmed at Aa2 -- Senior Unsecured MTN Program affirmed at (P)Aa2 -- Deposit Note/CD Program affirmed at (P)Aa2 -- Senior Unsecured Commercial Paper affirmed at P-1 -- Other Short-term Program affirmed at (P)P-1 -- Junior Subordinated Debt affirmed at A1(hyb) -- Outlook for the bank revised to negative from stable Issuer: Hongkong & Shanghai Bank.Corp. (Sydney) -- CR Assessment affirmed at Aa1(cr)/P-1(cr) -- Issuer Rating affirmed at Aa2/P-1 -- Deposit Rating affirmed at Aa2/P-1 -- Senior Unsecured Debt affirmed at Aa2 -- Senior Unsecured MTN Program affirmed at (P)Aa2 -- Outlook for the branch revised to negative from stable Issuer: Hongkong & Shanghai Banking Corp.(Singapore) -- CR Assessment affirmed at Aa1(cr)/P-1(cr) -- Senior Unsecured Debt affirmed at Aa2 -- Senior Unsecured MTN Program affirmed at (P)Aa2 -- Other Short-term Program affirmed at (P)P-1 -- Outlook for the branch revised to negative from stable Issuer: Hongkong and Shanghai Banking Corp Ltd (NZ) -- CR Assessment affirmed at Aa1(cr)/P-1(cr) -- Senior Unsecured Debt affirmed at Aa2 -- Senior Unsecured MTN Program affirmed at (P)Aa2 -- Outlook for the branch revised to negative from stable POWERLONG REAL: Moody's Says 2015 Results Support B2 CFR Outlook ---------------------------------------------------------------- Moody's Investors Service says that Powerlong Real Estate Holdings Limited's improved 2015 results are in line with expectation and support the positive ratings outlook on its B2 corporate family rating and B3 senior unsecured ratings. "Powerlong's improved credit metrics in 2015 reflect the successful implementation of its business strategy and active debt management, and supports the positive ratings outlook," says Dylan Yeo, a Moody's Analyst. Powerlong exhibited strong sales execution in 2015 with contracted sales growing 34% year-on-year to RMB14.3 billion. Revenue recognition also remained healthy with 23% growth in total revenue to RMB11.9 billion during the year. The sales growth reflects the success of its strategy to focus on commercial property development in higher tier cities, as commercial sales accounted for 58% of contracted sales compared to 53% in 2014. Moody's expects the company to maintain this improving trend, with contracted sales estimated to grow at more than 5% in 2016, owing to its good sales record in China's higher-tier cities, such as Shanghai and Hangzhou, where demand for its properties has been favorable. The rising commercial property contribution caused Powerlong's gross margin to climb to 32.9% from 28.8%, because the higher average selling prices and lower land costs for these properties resulted in higher margins than for its residential properties. Moody's expect the company's gross margin will remain above 30% in 2016 as the contribution of commercial property development should increase to around 65%-70%. Its gross margin is also supported by its low average land cost of RMB1,215 per square meter, or 13% of its average selling price in 2015. Powerlong's key credit metrics improved in 2015, with EBIT interest coverage rising to 2.6x from 2.0x and revenue/adjusted debt increasing slightly to 45.5% from 44.7%, although revenue/adjusted debt remained weak for its rating level. The improvements were due to its strong sales performance and active management of funding costs, which caused its effective interest rate to decline to 7.8% in 2015 from 9.3% in 2014. Moody's expects EBIT interest coverage and revenue/debt to increase to 2.6x-2.8x and 55%-60% respectively in 2016, assuming strong growth in revenue recognition, lower borrowing costs and continued financial discipline in its land acquisitions. These estimates also factor in Moody's expectation that total debt will grow by more than 10% in 2016 because of land replenishment, particularly in Shanghai, and the company's plan to expand its investment property portfolio, which entails high upfront capital investment. "Powerlong's expanding recurring income base is credit positive because it provides some stability to the company's debt servicing capacity," says Yeo. Recurring income, which comprises rental, management service and hotel revenue, increased in 2015 due to the commencement of seven retail malls and five hotels during the year. As a result, adjusted recurring income interest coverage improved to 0.8x from 0.7x. Moody's estimates that the ratio will improve to 0.8x-1.0x in the next two years based on the company's plan to open five retail malls per year in 2016 and 2017. "Powerlong's liquidity profile remained adequate, aided by its recent issuances in both the onshore and offshore bond markets," says Yeo. Powerlong's cash balance, including restricted cash, increased to RMB6.7 billion in 2015 from RMB4.9 billion. Its cash to short-term debt ratio was stable at 112% in 2015 from 115% in 2014, despite the proportion of short-term debt increasing modestly to 26.5% from 23.1%. Together with its operating cash flow, Powerlong has sufficient liquidity for its committed land premiums and debt-servicing requirements in the next 12 months, after the early repayment of its $250 million bond in January 2016. The $250 million 11.25% bond was refinanced using proceeds from the $200 million 7.625% offshore bond issued in November 2015, which reduced the company's foreign currency exposure and borrowing costs. Powerlong also issued RMB3.2 billion of onshore corporate bonds in two tranches with an interest rate of 6.2% in January 2016 and 6.0% in March 2016, boosting its liquidity and lowering its average interest costs. The company was also cautious in its land purchases in 2015, with acquisitions totaling RMB2.9 billion or 20% of its contracted sales. However, Moody's expects its land acquisitions to rise in 2016 because of a greater need for land replenishment in Shanghai, its key operating region, where its existing land bank is only sufficient for approximately three years of development. The ratings could be upgraded if Powerlong: (1) achieves stable sales growth in line with its targets and further increases its exposure to higher tier cities; (2) improves its financial flexibility and liquidity position; and (3) materially increases its recurring rental income. Credit metrics that could trigger an upgrade include: (1) adjusted EBIT/interest above 2.25x; (2) recurring income/interest above 1.0x; and (3) revenue-to-debt above 55% on a sustained basis. On the other hand, the ratings could return to stable if: (1) Powerlong's sales or revenue growth, cash collection rate, and/or profit margin fall below expectation; (2) its non-development revenue/interest falls below 0.7-0.8x; (3) its balance-sheet liquidity declines; or (4) the company steps up its land acquisitions. Credit metrics that could change the outlook to stable include: (1) adjusted EBIT/interest below 2.0x; or (2) revenue-to-debt below 45%. The principal methodology used in these ratings was Homebuilding And Property Development Industry published in April 2015. Please see the Ratings Methodologies page on www.moodys.com for a copy of this methodology. Powerlong Real Estate Holdings Limited is a Chinese developer focused on building large-scale integrated residential and commercial properties in China. As of December 31, 2015, it had a development land bank of around 10 million square meters in gross floor area in nine provinces, and 25 commercial properties in operation. The company listed on the Hong Kong Exchange in October 2009. The Hoi family, the founders, had the majority stake in the company. ========= I N D I A ========= ADIG JEMTEX: ICRA Reaffirms B+ Rating on INR5.50cr Term Loan ------------------------------------------------------------ ICRA has reaffirmed its long term rating of [ICRA]B+ on the INR5.50 Crore term loans, INR1.50 crore fund-based facilities and INR3.00 crore unallocated limits of Adig Jemtex Private Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term Fund- Based Limits Term Loans 5.50 [ICRA]B+; Reaffirmed Long Term Fund Based Limits Cash Credit 1.50 [ICRA]B+; Reaffirmed Long Term Fund Based Limits Unallocated 3.00 [ICRA]B+, Reaffirmed ICRA's rating reaffirmation takes into account the scale up of operations after the commencement of the plant in June 2014. In FY15, the company reported an operating income of INR5.10 crore including a job work income of INR1.23 crore and remaining by trading activities. Given the profitability and scheduled repayments of the borrowings as well as incremental working capital requirements, the liquidity of the company is likely to remain under pressure. The rating is also constrained on account of fragmented industry and the commoditized nature of the product, which limits the company's pricing power. The rating, however, derives comfort from the group presence in fabric weaving (through Aarti Suiting and R.S. Spuntex, both rated [ICRA]BB-), which partially mitigates the off take risk for AGPL. The group concerns being established players in fabric processing mitigates market risks for AJPL and facilitates backward integration benefits by virtue of AJPL's sizing unit being a supplier to the group concerns. AJPL's ability to keep its capacity utilization levels high while maintaining adequate profitability and liquidity, will be the key rating sensitivities. Incorporated in 2010, AJPL is promoted by Jindal family of Bhilwara who are also managing two other group companies - RSPL and ASPL. AJPL has set up a high speed sizing unit in Bhilwara in the vicinity of group concerns. The processing plant commenced operations in FY15. Prior to the setting up of the processing unit, the company was trading in fabric and yarn on a small scale. Recent Results The company reported an Operating Income (OI) of INR5.10 crore and a net profit of INR0.01 crore for FY15, as against an OI of INR0.82 crore and a net profit of INR0.00 crore for the previous year. ADITYA PRINTS: CRISIL Suspends 'B' Rating on INR283.6MM Loan ------------------------------------------------------------ CRISIL has suspended its ratings on the bank facilities of Aditya Prints Private Limited (APPL). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 6.4 CRISIL A4 Cash Credit 160 CRISIL B/Stable Term Loan 283.6 CRISIL B/Stable The suspension of ratings is on account of non-cooperation by APPL with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, APPL is yet to provide adequate information to enable CRISIL to assess APPL's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key factor in its rating process as outlined in its criteria 'Information Availability - a key risk factor in credit ratings'. The company is engaged in embroidery designing on viscous and pure silk-based fabrics. The promoter, Mr. Pankaj Chugh manages the overall operations of the company. It has its manufacturing facilities located at Surat (Gujarat). ALUPAN COMPOSITE: CRISIL Reaffirms B- Rating on INR160MM Loan ------------------------------------------------------------- CRISIL's ratings on the bank facilities of Alupan Composite Panels Private Limited (ACPPL) continue to reflect ACPPL's weak financial risk profile marked by subdued debt protection metrics and stretched liquidity position due to large working capital requirement, and its small scale of operations. These weaknesses are partially offset by its promoter's extensive experience in the aluminium composite panels industry. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 160 CRISIL B-/Stable (Reaffirmed) Letter of Credit 80 CRISIL A4 (Reaffirmed) Proposed Long Term Bank Loan Facility 10 CRISIL B-/Stable (Reaffirmed) Outlook: Stable CRISIL believes ACPPL's liquidity will remain stretched over the medium term because of large inventory and stretched receivables. The outlook may be revised to 'Positive' if the company improves working capital management, resulting in better liquidity management. Conversely, the outlook may be revised to 'Negative' if profitability declines, or working capital requirement increases considerably, leading to pressure on debt protection metrics and liquidity. ACPPL, promoted by Mr. Vinod Kumar Garg in 2003, manufactures aluminium composite panels. Its manufacturing facility is in Haridwar, Uttarakhand. APEX CONSUMER: CRISIL Suspends B+ Rating on INR67.5MM LT Loan ------------------------------------------------------------- CRISIL has suspended its ratings on the bank facilities of Apex Consumer Appliances Private Limited (Apex). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 30 CRISIL B+/Stable Letter of Credit 15 CRISIL A4 Proposed Long Term Bank Loan Facility 67.5 CRISIL B+/Stable Term Loan 7.5 CRISIL B+/Stable The suspension of ratings is on account of non-cooperation by Apex with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, Apex is yet to provide adequate information to enable CRISIL to assess Apex's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key factor in its rating process as outlined in its criteria 'Information Availability - a key risk factor in credit ratings'. Apex was incorporated in June 2010, by Mr. Dhaval Shah and his wife, Mrs. Kinjal Shah, and took over the business of the erstwhile firm 'Apex Home Appliances' which was operational since 1990. Apex is engaged in manufacturing of home and kitchen appliances. The company's manufacturing facilities are located in Mumbai and Bhiwandi (Maharashtra). ASHIRWAD CHAIN: CRISIL Suspends 'D' Rating on INR90MM Cash Loan --------------------------------------------------------------- CRISIL has suspended its rating on the bank facilities of Ashirwad Chain House Private Limited (ACHPL, part of the Ashirwad group). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 90 CRISIL D Proposed Long Term Bank Loan Facility 85 CRISIL D Term Loan 25 CRISIL D The suspension of ratings is on account of non-cooperation by ACHPL with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, ACHPL is yet to provide adequate information to enable CRISIL to assess ACHPL's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key factor in its rating process as outlined in its criteria 'Information Availability - a key risk factor in credit ratings'. ACHPL, set up in 2012 by Mr. Amit Singla and his family, commenced operations in April 2012 after taking over the operations of Ashirwad Jewellery House (AJH). The company manufactures and wholesales gold jewellery, particularly gold chains, in Delhi. Like ACHPL, Ashirwad Chain Company (ACC) is also in the gems and jewellery business. ASHWAMEGH INFRA: CRISIL Suspends B+ Rating on INR50MM Term Loan --------------------------------------------------------------- CRISIL has suspended its rating on the bank facility of Ashwamegh Infra (AI). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Term Loan 50 CRISIL B+/Stable The suspension of rating is on account of non-cooperation by AI with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, AI is yet to provide adequate information to enable CRISIL to assess AI's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key factor in its rating process as outlined in its criteria 'Information Availability - a key risk factor in credit ratings'. Established in 2010, AI is promoted by Gandhinagar (Gujarat)-based Mr. Shailesh Patel. The firm is developing a commercial real estate project, Ashwamegh Arcade, in Kadi in North Gujarat. BOSS PHARMA: CRISIL Assigns 'B' Rating to INR40MM Cash Loan ----------------------------------------------------------- CRISIL has assigned its 'CRISIL B/Stable/CRISIL A4' ratings to the bank facilities of Boss Pharma (BOSS). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 40 CRISIL B/Stable Letter of Credit 40 CRISIL A4 The ratings reflect BOSS's working capital-intensive operations and exposure to intense competition in the bulk drugs manufacturing industry, leading to highly volatile operating profitability. These rating weaknesses are partially offset by the extensive experience of partners in the pharmaceutical industry and an above-average financial risk profile because of low gearing. Outlook: Stable CRISIL believes BOSS will continue to benefit from the promoters' extensive industry experience and proximity of the manufacturing facility to the pharmaceutical belt of India. The outlook may be revised to 'Positive' in case of more-than-expected accrual, driven by improvement in scale of operations and operating margin, and better working capital management, leading to an improved financial risk profile. Conversely, the outlook may be revised to 'Negative' if lower-than-expected accrual, or any decline in operating margin, or a stretch in the working capital cycle, or large, debt-funded capital expenditure leads to deterioration in the financial risk profile. Set up in 2007 as a partnership firm, BOSS manufactures and trades in bulk drugs. Its manufacturing facility in Baddi has an installed capacity of 4500 tonnes per annum. The firm manufactures paracetamol, ascorbic acid (Vitamin C) with other vitamin components such as Niacin amide, and supplies them to formulators and trading houses across India. BOSS reported a book profit of INR0.04 million on sales of INR323.2 million for 2014-15 (refers to financial year, April 1 to March 31), against a book profit of INR0.09 million on sales of INR400.0 million for 2013-14. BRILLIANT INTERNATIONAL: CRISIL Suspends B+ Rating on INR30M Loan ----------------------------------------------------------------- CRISIL has suspended its ratings on the bank facilities of Brilliant International (BI). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bill Purchase- Discounting Facility 20 CRISIL A4 Cash Credit 30 CRISIL B+/Stable Letter of Credit 25 CRISIL A4 Long Term Loan 2.5 CRISIL B+/Stable Overdraft Facility 7.5 CRISIL A4 Packing Credit 25 CRISIL A4 The suspension of ratings is on account of non-cooperation by BI with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, BI is yet to provide adequate information to enable CRISIL to assess BI's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key factor in its rating process as outlined in its criteria 'Information Availability - a key risk factor in credit ratings'. BI, based in Mumbai, is a partnership firm established in 1992 by Mr. Ram Chainani and his son, Mr. Bipin Chainani. The firm manufactures and trades in electronic and household products such as door bells, switches, distribution boxes, miniature circuit breaker boxes, home appliances, and plugs. It also trades in sarees and imitation jewellery. CHAHAL SPINTEX: CRISIL Reaffirms D Rating on INR228.1MM Loan ------------------------------------------------------------ CRISIL's ratings on the bank facilities of Chahal Spintex Limited (CSL) continue to reflect instances of delay by the company in servicing its term debt; the delays have been caused by weak liquidity. CRISIL believes liquidity will remain stretched over the medium term due to no significant improvement expected in topline and profitability. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 12.9 CRISIL D (Reaffirmed) Cash Credit 160.0 CRISIL D (Reaffirmed) Term Loan 228.1 CRISIL D (Reaffirmed) Also, CSL's financial risk profile is constrained by a decline in export demand and volatility in raw material prices, resulting in pressure on prices of cotton yarn and hence impacting the company's operating margin. However, it benefits from the extensive experience of its promoters in the cotton yarn industry. CSL, incorporated in 2007, is promoted by Mr. Sukhdev Singh and his family members. The company manufactures cotton yarn in counts of 20 to 30 at its unit in Bhatinda, Punjab; it sells to traders and merchant exporters. The promoters also manage a ginning and oil unit under group concern, Chahal Cotton Factory. CONVEYOR AND ROPEWAY: CRISIL Cuts Rating on INR40MM Loan to 'D' --------------------------------------------------------------- CRISIL has downgraded its ratings on the bank facilities of Conveyor and Ropeway Services Private Limited (CRSPL) to 'CRISIL D/CRISIL D' from 'CRISIL B+/Stable/CRISIL A4'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 30 CRISIL D (Downgraded from 'CRISIL A4') Cash Credit 10 CRISIL D (Downgraded from 'CRISIL B+/Stable') Letter of Credit 4 CRISIL D (Downgraded from 'CRISIL A4') Long Term Loan 40 CRISIL D (Downgraded from 'CRISIL B+/Stable') Proposed Long Term 9.4 CRISIL D (Downgraded from Bank Loan Facility 'CRISIL B+/Stable') Standby Line of 1.5 CRISIL D (Downgraded from Credit 'CRISIL B+/Stable') The downgrade reflects instances of delay by the company in servicing its debt. The delays have been caused by weakening liquidity. The company has a weak financial risk profile because of a small net worth and high gearing, and a modest scale of operations despite a healthy order book. However, it has an established track record in the aerial ropeways segment and moderate revenue visibility. Conveyor & Ropeway Services Private Limited (CRSPL), established in 1975, is engaged in the designing, manufacturing, erection and commissioning of aerial ropeway systems, material handling plants and coal washing plants apart from providing techno feasibility studies for ropeway systems. DNH PROJECTS: ICRA Reaffirms 'C' Rating on INR12cr Cash Loan ------------------------------------------------------------ ICRA has reaffirmed the long-term rating of [ICRA]C assigned to the INR15.50 crore fund based limit of DNH Projects Limited. ICRA has also reaffirmed the short-term rating of [ICRA]A4 assigned to the Rs.6.00 crore non-fund based limit of the company. ICRA has also reaffirmed the [ICRA]C and [ICRA]A4 ratings assigned to the Rs.6.50 crore un-allocated limits of the company. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based Limit- Cash Credit 12.00 [ICRA]C; reaffirmed Fund Based Limit- Working capital Term Loan 3.50 [ICRA]C; reaffirmed Non-Fund Based Limit Bank Guarantee 6.00 [ICRA]A4; reaffirmed Un-allocated limits 6.50 [ICRA]C/[ICRA]A4; reaffirmed The assigned ratings take into account DNH Projects Limited's financial profile which is characterized by the modest scale of operations, highly leveraged capital structure and weak debt coverage indicators. The ratings are further constrained by the company's stretched liquidity position arising from the high inventory holdings and delayed collections from customers, which has necessitated high reliance on external borrowings. Further, the ratings continue to factor in the high competitive intensity in the construction space resulting in pressure on the profitability margins, the geographical concentration risk due to the concentration of most ongoing and future projects in Dadra & Nagar Haveli and Chhattisgarh, and the vulnerability of profits to raw material price variation in the absence of price variation clauses in majority of the orders. The ratings however, favorably factor in the established experience of the directors in the construction industry and the company's clientele mainly comprising of government and semi government bodies leading to limited counter-party risk. DNH Projects Ltd (DNH) was initially incorporated as a private limited company engaged in real estate development Nagar Haveli Real Estate Pvt Ltd in 1996. It was subsequently renamed and converted to a closely held public limited company in 2009. The operations of the company are collectively managed by Mr. Vijay and Mr. Ajay Desai who have an experience of over two decades in the construction industry. The company is registered as an 'AA' Class contractor with Roads & Buildings division, of the Government of Gujarat and is engaged in undertaking the construction of industrial units, factories and corporate and institutional buildings for private companies and public sector undertakings. DNH has three group concerns - Ajay Enterprises, Morai Infrastructure Pvt Ltd and Drexel Pharma Pvt Ltd. DOOR SANCHAR: ICRA Lowers Rating on INR24.15cr Term Loan to D ------------------------------------------------------------- ICRA has downgraded the long-term rating assigned to the INR24.33 crores of term loans and unallocated limits of Door Sanchar Hydro Power Private Limited from [ICRA]BB- to [ICRA]D. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Term Loans 24.15 [ICRA]D; Downgraded Unallocated Limits 0.18 [ICRA]D; Downgraded Rating Rationale ICRA's rating downgrade factors in the delays in debt servicing by Door Sanchar Hydro Power Private Limited which has developed a 5MW (2*2.5 MW) power plant in Himachal Pradesh. The plant has been operating at a lower than expected PLF on account of inadequate evacuation infrastructure which had led to inadequate cash flows to service debt. The rating has also taken in account weak financial profile of the company in FY15 as reflected by net losses, high gearing and weak debt protection indicators. The rating continues factor in absence of deemed generation clause which exposes the firm to hydrology risks and stretched liquidity position of Sravanthi group which has a 49% stake in the project. There has been some improvement in the existing evacuation infrastructure owing to some maintenance work done recently and an alternate transmission line is also expected to get operational by FY17. Going forward, the ability of the company to achieve higher PLF and timely servicing of debt will remain the key rating sensitivities. Door Sanchar Hydro Power Private Limited (DSHPPL) has been promoted by Mr. Rajiv Batra and Sravanthi Group. Mr. Batra and his wife are the majority share-holders with 51% stake while Sravanthi group is the minority share-holder holding the remaining 49% share capital. Sravanthi group is actively involved in the operation of the project. The group has been founded by Mr. DV Rao, ex-Joint Managing Director of Lanco Infratech Ltd, where he was instrumental in developing the power vertical with aggregate capacity of over 12000MW. Apart from power generation, the group is also present in EPC business (through Sravanthi Infratech Private Limited) and power consultancy business (Sravanthi Consultancy Services Pvt Ltd). DSHPPL has developed a 5MW (2*2.5 MW) power plant in Himachal Pradesh. This project is located on Rukti Khad, a tributary of River Baspa which in turn in a tributary of River Satluj. The project became operational in November 2011 at a total project cost of INR34.85 crores which has been funded through INR24.15 crores of debt, INR4.34 crore of redeemable preference capital and INR4.36 crores of equity/compulsory convertible debentures; INR1.99 crores as unsecured loans from promoters. The company has entered into PPA with HPSEB for supplying power for a period of 40 years at a tariff of INR2.95/unit. Recent Results The company reported loss of INR1.30 crores on operating income of INR6.39 crores in FY15 as against loss of INR0.32 crores on operating income of INR6.37 crores in FY14. G-TECH STONE: ICRA Suspends C+ Rating on INR18.5cr LT Loan ---------------------------------------------------------- ICRA has suspended [ICRA]C+ ratings; assigned to the INR11.5 crore term loans and the INR18.50 crore long term fund based facilities and the short term rating of [ICRA]A4 assigned to the INR3.0 crore short-term, non-fund based facilities and INR1.00 crore short-term fund based facilities of G-Tech Stone Limited. The suspension follows ICRA's inability to carry out a rating surveillance in the absence of the requisite information from the entity. 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. K. P. INDUSTRIES: CRISIL Suspends 'B' Rating on INR50MM Loan ------------------------------------------------------------ CRISIL has suspended its rating on the bank facility of K. P. Industries (KPI). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 50 CRISIL B/Stable The suspension of rating is on account of non-cooperation by Code with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, Code is yet to provide adequate information to enable CRISIL to assess Code's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key factor in its rating process as outlined in its criteria 'Information Availability - a key risk factor in credit ratings'. KPI was set up in 2010 as a partnership firm in Ahmedabad (Gujarat) by the Prajapati family. The firm is engaged in rice and wheat processing with a total capacity of 3.25 tonnes per hour. The processing facilities are in Ahmedabad. KPI's day-to-day operations are managed by Mr. Dhaval Prajapati and Mr. Atul Prajapati. KINGFISHER AIRLINES: No Bids for Kingfisher House ------------------------------------------------- The Times of India reports that nobody wanted to bid for loans defaulter Vijay Mallya's Kingfisher House. According to the report, the Mumbai property was put on e-auction on March 17 by a 17-bank consortium that the former 'King of Good Times' owes INR6,963 crores to. TOI relates that the base price for the property was set at INR150 crores and the auction was conducted online. The consortium is led by the State Bank of India. The Vile Parle building, with a built-up area of over 17,000 sq ft, was auctioned by SBICAPS Trustee, a subsidiary of SBI Caps, says TOI. The consortium took over the property in February 2015, the report recalls. 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. KOKONUT CLOTHING: CRISIL Suspends B Rating on INR74MM Cash Loan --------------------------------------------------------------- CRISIL has suspended its rating on the bank facility of Kokonut Clothing (KC). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 74 CRISIL B/Stable The suspension of rating is on account of non-cooperation by KC with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, KC is yet to provide adequate information to enable CRISIL to assess KC's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key factor in its rating process as outlined in its criteria 'Information Availability - a key risk factor in credit ratings'. KC, set up in 2002-03 (refers to financial year, April 1 to March 31), trades in shirting fabric. Its overall operations are managed by Mr. Pawan Kumar Barasia and his son Mr. Pratik Barasia. Its office is in Mumbai (Maharashtra). KWAL PRO: ICRA Assigns B+ Rating to INR4.35cr Loan -------------------------------------------------- ICRA has assigned its long term rating of [ICRA]B+ to the INR9.30 crore fund based bank facilities of Kwal Pro Exports. ICRA has also assigned its short term rating of [ICRA]A4 to the INR0.1 crore non fund based facilities of the firm. Amount Facilities (INR crore) Ratings ---------- ----------- ------- EPC 3.50 [ICRA]B+; assigned FBP 4.35 [ICRA]B+; assigned SLC 1.15 [ICRA]B+; assigned Term Loan 0.30 [ICRA]B+; assigned FC 0.10 [ICRA]A4; assigned ICRA's ratings are constrained by KPE's modest scale of operations and the intensely competitive nature of the industry in which it operates given the low capital requirements and low entry barriers. The ratings also factor in the firm's relatively high working capital intensity of business and the vulnerability of the firm's profitability to adverse movement in foreign exchange rates, given the sizeable portion of export income. ICRA also takes note of the partnership constitution of the firm and the risks inherent in a partnership firm, like limited ability to raise capital, risk of dissolution, withdrawal of capital, etc. The ratings however, derive comfort from the extensive experience of the promoters, the advantages from having the marketing office in overseas location and the company's established relationships with its key customers, enabling it to procure repeat orders. The ratings also factor in the firm's lightly leveraged capital structure with comfortable gearing levels as on March 31, 2015. Going forward, the firm's ability to attain a sustained improvement in scale in a profitable manner, while optimally managing its working capital intensity, will be the key rating sensitivities. KPE is a partnership concern engaged in the manufacturing and export of handicraft items including gift and furniture. The firm also has a marketing office in Holland which is being looked after by Mr Narendra Kumar Borad; the overseas office primarily helps the firm tap the European market, with main focus on Holland and Germany. Recent Results KPE reported a net profit of INR0.14 crore on an operating income of INR10.55 crore in FY15, as against a net profit of INR0.09 crore on an operating income of INR10.40 crore in FY14. The firm, on a provisional basis, reported an operating income of INR10.99 crore for eleven months ending February 29, 2016. LAKSHMI STEEL: CRISIL Lowers Rating on INR85MM Cash Loan to B+ -------------------------------------------------------------- CRISIL has downgraded its ratings on the bank facilities of Lakshmi Steel Rolling Mills - Unit II (LSRM) to 'CRISIL B+/Stable/CRISIL A4' from 'CRISIL BB-/Stable/CRISIL A4+'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 85 CRISIL B+/Stable (Downgraded from 'CRISIL BB-/Stable') Foreign Exchange 14 CRISIL A4 (Downgraded from Forward 'CRISIL A4+') Letter of Credit 700 CRISIL A4 (Downgraded from 'CRISIL A4+') The downgrade reflects CRISIL's belief that LSRM's business risk profile will remain under pressure over the medium term on account of the slowdown in ship-breaking activity. Operating margin declined in 2014-15 (refers to financial year, April 1 to March 31) to 0.7 percent (4.1 per cent in 2013-14). LSRM has not purchased any ship in 2015-16 on account of volatility in steel scrap prices and foreign exchange (forex) rate; Sales for the year is expected at less than INR10-20 million. The ratings reflect LSRM's small scale of operations and susceptibility to volatility in forex rates and steel prices. These rating weaknesses are partially offset by its promoters' extensive experience in the ship-breaking industry. Outlook: Stable LSRM will continue to benefit over the medium term from its promoters' extensive industry experience. The outlook may be revised to 'Positive' if the firm reports substantial growth in topline and profitability, backed by an increase in ship-breaking activity. Conversely, the outlook may be revised to 'Negative' if LSRM's liquidity weakens because of any adverse movement in steel scrap prices, or unfavourable movements in forex rates, leading to substantial losses. Set up in 1994, LSRM is a partnership firm engaged in ship- breaking activities. It has a yard area of 2250 square metres in Alang (Gujarat), one of the leading centres of the ship-breaking and recycling industry in Asia. LSRM purchases old ships, breaks them into steel plates, and supplies the plates to rolling mills in Gujarat. LENZ CERAMIC: CRISIL Suspends 'D' Rating on INR120MM Term Loan -------------------------------------------------------------- CRISIL has suspended its ratings on the bank facilities of Lenz Ceramic Private Limited (LCPL). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 19 CRISIL D Cash Credit 50 CRISIL D Rupee Term Loan 120 CRISIL D The suspension of ratings is on account of non-cooperation by LCPL with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, LCPL is yet to provide adequate information to enable CRISIL to assess LCPL's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key factor in its rating process as outlined in its criteria 'Information Availability - a key risk factor in credit ratings'. LCPL, incorporated on February 26, 2010, is promoted by Mr. Jayendra Sanja. The company mainly manufactures vitrified tiles in dimensions of 24x24 inches. In May 2012, it began manufacturing glazed vitrified tiles (a high-end product) in similar dimensions; its manufacturing facility is at Morbi (Gujarat). MAHALAXMI ASSOCIATES: ICRA Reaffirms B+ Rating on INR6cr Loan ------------------------------------------------------------- ICRA has re-affirmed the [ICRA]B+ rating to the INR6.00 crore fund based bank facility of Mahalaxmi Associates Private Limited. ICRA has also re-affirmed the [ICRA]A4 rating to the INR10.00 crore non-fund based facilities of MAPL. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Fund Based Limits 6.00 [ICRA]B+/Re-affirmed Short-term Non- fund Based Limits 10.00 [ICRA]A4/Re-affirmed The re-affirmation of the ratings takes into account MAPL's thin profitability due to the limited value addition nature of its business, which witnessed a decline to 1.23% in FY2015 from 2.21% in FY2014. ICRA notes the high total outside liabilities relative to tangible net-worth ratio of 6.06 times as on March 31, 2015, because of significant creditor funding as well as advance from customers, high competitive intensity of the business with presence of a large number of players in the unorganized segment owing to low entry barriers, which further keeps margins under pressure. The susceptibility of the company's profitability to fluctuations in foreign currency exchange rates owing to high dependence on imports is another concern. The ratings, however, take comfort from the experience of the company's promoters in the coal trading business, with a number of group entities also engaged in similar businesses. Other credit strengths include MAPL's moderate scale of operations, which witnessed a significant improvement in FY2015, as reflected by an OI of INR69.54 crore in FY2015 over INR32.82 crore in FY2014, and comfortable capital structure as reflected by a gearing of 0.96 time as on March 31, 2015. Incorporated in 1998, MAPL is engaged in trading of coking and non-coking coal primarily in the northern and north-eastern states of India. The company commenced trading in sugar and rice from FY2015 onwards. Its registered office is located at Beltola in Guwahati, Assam, with branches at Ludhiana (Punjab), Kutch (Gujarat) and Paradip (Odisha). The company has a number of group entities, including Mahalaxmi India Private Limited (MIPL, rated [ICRA]B+ & [ICRA]A4), which are also engaged in coal trading. Recent Results During the first eight months of 2015-16, the company has reported an operating income of INR91.25 crore (provisional). The company reported a net profit of INR0.38 crore on an operating income of INR69.54 crore in 2014-15, as compared to a net profit of INR0.18 crore on an operating income of INR32.82 crore in 2013-14. MAHALAXMI INDIA: ICRA Reaffirms B+ Rating on INR4cr LT Loan ----------------------------------------------------------- ICRA has re-affirmed the [ICRA]B+ rating to the INR4.00 crore fund based bank facility of Mahalaxmi India Private Limited. ICRA has also re-affirmed the [ICRA]A4 rating to the INR12.00 crore non- fund based facilities of MIPL. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Fund Based Limits 4.00 [ICRA]B+/Re-affirmed Short-term Non- fund Based Limits 12.00 [ICRA]A4/Re-affirmed The re-affirmation of the ratings takes into account MIPL's thin profitability due to the limited value addition nature of the business, which witnessed a decline to 0.80% in FY2015 from 1.35% in FY2014, thus deteriorating the debt coverage indicators, and high total outside liabilities relative to tangible net worth ratio of 16.82 times as on March 31, 2015, on account of significant creditor funding and advance from customers. ICRA also takes note of the high competitive intensity of the business with the presence of a large number of players in the unorganized segment owing to low entry barriers which keeps the margins under pressure. The susceptibility of the company's profitability to fluctuations in foreign currency exchange rates owing to high dependence on imports is another concern. The ratings, however, take comfort from the experience of the company's promoters in the coal trading business with a number of group entities also engaged in similar businesses. Other credit strengths include MIPL's moderate scale of operations, which witnessed a significant improvement in FY2015, as reflected by an OI of INR78.80 crore in FY2015 compared to INR28.92 crore in FY2014. Incorporated in 2000, MIPL is engaged in trading of coking and non-coking coal primarily in the northern and north-eastern states of India. The company commenced trading in sugar from FY2015 onwards. Its registered office is located at Beltola in Guwahati, Assam, with branches at Ludhiana (Punjab), Kutch (Gujarat), Paradip (Odisha), Meerut (Uttar Pradesh) and Goalpara (Assam). The company has a number of group entities, including Mahalaxmi Associates Private Limited (MAPL, rated [ICRA]B+ & [ICRA]A4), which are also engaged in coal trading. Recent Results During the first eight months of 2015-16, the company reported an operating income of INR53.15 crore (provisional). The company reported a net profit of INR0.37 crore on an operating income of INR78.80 crore in 2014-15, as compared to a net profit of INR0.19 crore on an operating income of INR28.92 crore in 2013-14. MAHARASHTRA ALUMINIUM: CRISIL Assigns B Rating to INR100MM Loan --------------------------------------------------------------- CRISIL has assigned its 'CRISIL B/Stable/CRISIL A4' to the bank facilities of Maharashtra Aluminium and Alloys Private Limited. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Proposed Long Term Bank Loan Facility 30 CRISIL B/Stable Cash Credit 100 CRISIL B/Stable Letter of Credit 20 CRISIL A4 The ratings reflect modest scale of operations and low profitability susceptible to intense competition in the industry and below average financial risk profile constrained by small networth and weak interest coverage. These weaknesses are partially offset by the extensive experience of promoters and well established relations with key suppliers and clients and efficient working capital management. Outlook: Stable CRISIL believes that MAAPL will continue to benefit over the medium term from its promoters extensive experience and the well established relationships with its key suppliers and customers. The outlook may be revised to 'Positive' in case of significant improvement in its cash accrual supported by sustained improvement in its scale of operations and profitability while maintaining its efficient working capital management. The outlook may be revised to 'Negative' in case if the scale of operations and/or operating profitability declines significantly or in case if the company incurs larger than expected debt-funded capital expenditure (capex) plans or increases its exposure to its affiliated entities leading to worsening of its financial risk profile. MAAPL was initially set up as a proprietorship firm Maharashtra Steels in 1982. The firm was converted to a private limited company in the year 2000 under its current name. The company is engaged in trading of galvanized and colour coated sheets (MS) in Latur district. Mr. Manji Patel and Mr. Mandan Patel look after the day-to-day operations of the company. MAHAVIR SHIP: ICRA Lowers Rating on INR34.80cr Loan to 'D' ---------------------------------------------------------- ICRA has revised the long term rating assigned to the INR4.00 crore (reduced from INR8.00 crore) cash credit facilities of Mahavir Ship Breakers from [ICRA]B to [ICRA]D. ICRA has also assigned long term rating of [ICRA]D to the INR27.00 crore working capital term loan and INR2.20 crore funded interest term loan facilities. ICRA has also revised the short-term rating assigned to the INR34.80 crore (reduced from INR60.00 crore) non fund based Letter of Credit facility and INR0.70 crore (reduced from INR1.20 crore) forward contract limit from [ICRA]A4 to [ICRA]D. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Working Capital 4.00 Revised to [ICRA]D from [ICRA]B Working Capital 27.00 [ICRA]D; Assigned Term Loan Funded Interest Term Loan 2.20 [ICRA]D; Assigned Letter of Credit 34.80 Revised to [ICRA]D from [ICRA]A4 Forward Contract 0.70 Revised to [ICRA]D Limit from [ICRA]A4 The rating revision reflects the pressure on company's liquidity arising out of inventory losses as well as recent instances of devolvement of letter of credit bank facility availed by MSB which has necessitated restructuring of bank facilities. The ratings also continue to be constrained by MSB's vulnerability to adverse fluctuations in foreign exchange rates and exposure to adverse fluctuations in domestic steel scrap prices, the price risks are compounded because of the long lead time involved in the entire operations. Further the profitability has witnessed a decline over previous years on account of rising ship prices and forex losses booked by the firm. ICRA also notes that the operations remain exposed to cyclicality inherent in the ship breaking business and regulatory risks in obtaining requisite approvals prior to commencement of ship breaking. However, the ratings favourably factor in the established presence of MSB in the ship breaking business and strong top line as compared to its peers. Incorporated as a partnership firm in 1983, Mahavir Ship Breakers (MSB) is promoted by Mr. Mukesh Jain. MSB is engaged in the business of ship breaking and operates on a plot no. 18 leased from Gujarat Maritime Board at the Alang ship breaking yard. The firm is involved only in ship breaking activity and does not have any associate concern. Recent Results As per audited results for the year ended March 31, 2015, the firm reported an operating income of INR128.00 crore with a net loss of Rs.20.65 crore. MG HOUSING: CRISIL Suspends B+ Rating on INR300M Term Loan ---------------------------------------------------------- CRISIL has suspended its ratings on the bank facilities of MG Housing Private Limited (MGPL). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 100 CRISIL A4 Proposed Bank Guarantee 150 CRISIL B+/Stable Proposed Term Loan 300 CRISIL B+/Stable Term Loan 300 CRISIL B+/Stable The suspension of ratings is on account of non-cooperation by MGPL with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, MGPL is yet to provide adequate information to enable CRISIL to assess MGPL's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key factor in its rating process as outlined in its criteria 'Information Availability - a key risk factor in credit ratings'. MGPL was established in October 2012 by Mr. Ajay Mangal and Mr. Dinesh Chand Gupta by reconstituting Mangalmay Constructions Pvt Ltd. The company is developing a residential township (Mulberry County) in Faridabad and a plotted township in Dharuhera (Haryana). Mulberry County is its maiden project. NRI ACADEMY: CRISIL Suspends 'D' Rating on INR70MM Cash Loan ------------------------------------------------------------ CRISIL has suspended its rating on the bank facilities of NRI Academy (NRI). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 70 CRISIL D Long Term Loan 40 CRISIL D The suspension of rating is on account of non-cooperation by NRI with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, NRI is yet to provide adequate information to enable CRISIL to assess NRI's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key factor in its rating process as outlined in its criteria 'Information Availability - a key risk factor in credit ratings'. NRI was set up as a partnership firm in 2008 by Mr. Alapati Rajendra Prasad and his wife, Mrs. Alapati Madhavi. NRI offers intermediate education, and has colleges in Andhra Pradesh in Guntur, Vijayawada, Visakhapatnam, Vizianagaram, Eluru, and Hyderabad. PASUPATI RICE: CRISIL Assigns B+ Rating to INR80MM Cash Loan ------------------------------------------------------------ CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-term bank loan facility of Pasupati Rice Mills Private Limited. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 80 CRISIL B+/Stable The rating reflects the company's small scale of operations in the highly fragmented rice-milling industry, raw material price risk, dependence on monsoon, and vulnerability to regulations. These weaknesses are partially offset by the promoters' extensive experience in rice milling and a diversified customer base. Outlook: Stable CRISIL believes that PRMPL will maintain its business risk profile backed by the promoters' extensive experience in the rice-milling industry and its diversified customer base. The outlook may be revised to 'Positive' if the company substantially scales up its operations along with improvement in profitability resulting in higher-than-expected cash accrual or if there is infusion of substantial capital by the promoters leading to significant improvement in the financial risk profile, particularly liquidity. Conversely, the outlook may be revised to 'Negative' in case of lower-than-expected accrual, higher-than-expected stretch in the working capital cycle, or if PRMPL undertakes any large, debt- funded capital expenditure leading to deterioration in the financial risk profile, particularly liquidity. Incorporated in 2011, PRMPL has set up an 8-tonne-per-hour, non- basmati rice mill at Patna; the mill commenced operations in November 2014. The company is promoted by the Singh family (based in Bihar) that also manages the operations. PEARSON DRUMS: ICRA Assigns B+ Rating to INR16cr Cash Loan ---------------------------------------------------------- ICRA has assigned a long term rating of [ICRA]B+ to the INR1.96 crore term loan, INR16 crore cash credit facility and INR0.04 crore unallocated limits of Pearson Drums & Barrels Private Limited. ICRA has also assigned a short term rating of [ICRA]A4 to the INR3.5 crore bank guarantee facility, INR1.5 crore letter of credit facility and INR2.4 crore stand by line of credit facility of PDBPL. The above unallocated limits of INR0.04 crore have also been rated at [ICRA]A4 on the short term scale. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based Limit Cash Credit 16.00 [ICRA]B+ assigned Fund Based Limit Term Loan 1.96 [ICRA]B+ assigned Fund Based Limit Stand by Line of Credit 2.40 [ICRA]A4 assigned Non Fund Based Limit Bank Guarantee 3.50 [ICRA]A4 assigned Non Fund Based Limit Letter of Credit 1.50 [ICRA]A4 assigned Unallocated Limit 0.04 [ICRA]B+/[ICRA]A4 assigned The assigned ratings take into account PDBPL's weak financial risk profile characterized by low net margins, unfavourable capital structure and depressed debt coverage indicators, and high working capital intensity of business operations, which has adversely impacted the company's liquidity position as reflected by fully utilized working capital limits. The ratings also take note of the low capacity utilization of the manufacturing facilities which has kept the return on capital employed at moderate levels and the highly fragmented and competitive nature of the metal drums manufacturing industry that keeps a check on the profitability. The ratings also take into consideration the vulnerability of PDBPL's profitability arising from fluctuation in raw material prices, accentuated by high level of raw material inventory maintained by the company; although presence of price variation clause minimizes the risk to some extent. The ratings also take into account the experience of the promoters in the packaging industry, the favourable location of the manufacturing units in close proximity to raw material sources and end user industries, which provides cost advantage on account of reduced freight costs, and the diversified and reputed clientele largely consisting of PSU's leading to limited counter party credit risks. Moreover, the notification from the Government, which enable purchase of steel barrels from the MSME (Micro Small & Medium Enterprises) is likely to support the turnover of the company going forward. However, PDBPL will remain exposed to regulatory risks. In ICRA's opinion, the ability of the company to improve its profitability while managing its working capital requirements efficiently would be key rating sensitivities going forward. Established in 1991, PDBPL was initially engaged in the trading of steel drums. Subsequently in 1993 and 1999, the company set up manufacturing facilities in Kolkata and Mumbai respectively to manufacture steel barrels and engineering goods including clamps, barrier fences, rubber support inserts, and other related accessories. The annual installed capacities of drums at the Kolkata and Mumbai units are 4,86,000 and 6,00,000 pieces respectively. PURULIA CHEMICALS: CRISIL Suspends 'D' Rating on INR30MM Loan ------------------------------------------------------------- CRISIL has suspended its ratings on the bank facilities of Purulia Chemicals Private Limited. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 30 CRISIL D Cash Credit 18 CRISIL D The suspension of ratings is on account of non-cooperation by PCPL with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, PCPL is yet to provide adequate information to enable CRISIL to assess PCPL's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key factor in its rating process as outlined in its criteria 'Information Availability - a key risk factor in credit ratings'. PCPL was originally set up as a partnership firm by Mr. Rajesh Kumar Lath and his brother Mr. Satish Kumar Lath in 2003; the firm was reconstituted as a private limited company in November 2010. PCPL commenced commercial production in 2005 and produces seedlac, shellac/aleuritic acid, and button lac, which are used in processes such as leather polish, varnish, perfume, and food coating. Nearly 55 per cent of PCPL's revenue comes from shellac, about 30 per cent from seedlac, and the remainder from button lac. RNS POWER: CRISIL Assigns 'B+' Rating to INR290MM LT Loan --------------------------------------------------------- CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-term bank facility of RNS Power Limited. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Long Term Loan 290 CRISIL B+/Stable The rating reflects RNSPL's modest liquidity on account of absence of debt service reserve account (DSRA), and exposure of revenues to variability in long-term wind speeds and pattern, and geographic concentration in the location of its wind electric generators. These rating weaknesses are partially offset by its healthy revenue visibility aided by the long-term power purchase agreement (PPA) with customers and moderate debt service coverage ratio. Outlook: Stable CRISIL believes that RNSPL will continue to benefit over the medium term from its stable cash accruals backed by its PPA. The outlook may be revised to 'Positive' if RNSPL's plant load factor (PLF) consistently exceeds CRISIL's expectations, or if the company maintains higher than expected DSRA, resulting in improvement in liquidity. Conversely, the outlook may be revised to 'Negative' if RNSPL reports low cash accruals, most likely because of low PLF, or if it undertakes any large debt-funded capital expenditure, weakening its financial risk profile. Incorporated in the year 2012, RNSPL operates wind mills in Karnataka. Based out of Bengaluru, RNSPL belongs to the R.N.Shetty group of companies. ROCKY DHAR: ICRA Lowers Rating on INR12cr Cash Loan to 'B' ---------------------------------------------------------- ICRA has revised downwards the long term rating assigned to the Rs.12 crore cash credit facility and INR3.00 crore untied fund based limit of Rocky Dhar from [ICRA]BB+ to [ICRA]B. ICRA has also revised downwards the short term rating assigned to the INR10.00 crore non-fund based bank facility of RD from [ICRA]A4+ to [ICRA]A4. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based Limit Cash Credit 12.00 [ICRA]B downgraded Fund Based Limit Untied Limit 3.00 [ICRA]B downgraded Non Fund Based Limit Bank Guarantee 10.00 [ICRA]A4 downgraded The downward revision in the ratings primarily take into account increase in working capital intensity of operations in the current fiscal, on account of significant built up of receivables and reduced creditors, which also led to a stretched liquidity profile of the firm. The ratings are also constrained by high utilisation of working capital limits, which restricts its financial flexibility and significant debt repayment obligations of the firm, which is likely to impact the overall cash flow position, going ahead. The ratings also consider the RD's exposure to high sectoral and geographical concentration risks, and fragmented nature of the road construction business, which coupled with a tender based contract awarding system leads to intense competition from peers and keeps the margins under check. ICRA notes the top- line growth achieved by the firm in last two fiscals; though the current scale of operations still remains modest. Moreover, the firm is exposed to risk associated with RD's legal status as a proprietorship firm, including the risk of withdrawal of capital by the proprietor. The ratings, however, derives comfort from RD's status as a registered Class I contractor with the Public Works Department (PWD), Meghalaya, which enables the firm to bid for large Government contracts across the state, moderate level of order book position of the firm, providing revenue visibility in the near term at least, and comfortable level of profitability and coverage indicators; although the same witnessed deterioration over the past few years. Mr. Rocky Dhar, proprietor of M/s Rocky Dhar (RD) forayed into civil construction business in 2009. The proprietor was earlier involved in trading of coal, limestone, stone chips, etc in Meghalaya region. The firm is primarily engaged into road construction activities and is also involved in the construction of hotels, office and residential complexes. In 2013, the firm has also set-up a stone crushing unit in Meghalaya. The firm operates through its registered office in Shillong, Meghalaya. RD is registered as a Class I contractor with Public & Works Department (PWD), Meghalaya and is also enlisted with major Government departments and public sector undertakings. Recent Results During the first 10 months of 2015-16, RD posted a net profit of INR5.14 crore (provisional) on an operating income of INR89.56 crore (provisional). The firm reported a net profit of INR5.39 crore on an operating income of INR82.55 crore in 2014-15. S.M. COLD: ICRA Suspends 'B' Rating on INR5.03cr Loan ----------------------------------------------------- ICRA has suspended the long term rating of [ICRA]B assigned to the INR0.52 crore term loan and has suspended the short term rating of [ICRA]A4 assigned to the INR5.03 crore fund based and INR0.26 crore non fund limit of S.M. Cold Storage Private Limited. The proposed amount of INR0.19 crore rated on long term/short term scale has also been suspended. The suspension follows ICRA's inability to carry out a rating surveillance in the absence of the requisite information from the company. SAINOR PHARMA: ICRA Reaffirms B+ Rating on INR4.40cr LT Loan ------------------------------------------------------------ ICRA has reaffirmed the long-term rating assigned to the INR3.60 crore (revised from INR3.81 crore) fund based limits and INR4.40 crore (revised from INR4.19 crore) unallocated limits of Sainor Pharma Pvt. Ltd. at [ICRA]B+. ICRA has also reaffirmed the short term rating assigned to the INR2.00 crore fund based and INR2.00 crore non-fund based limits of SPPL at [ICRA]A4. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term Fund Based Limits 3.60 [ICRA]B+; reaffirmed Short Term Fund Based Limits 2.00 [ICRA]A4; reaffirmed Short Term Non- Fund Based Limits 2.00 [ICRA]A4; reaffirmed Long Term Un- allocated Limits 4.40 [ICRA]B+; reaffirmed The rating reaffirmation continues to be constrained by small scale of SPPL's operations in the pharmaceutical industry; high product concentration with ~75% of revenues being contributed by single product Omeprazole and high exposure to mature anti- ulcerative therapeutic segment resulting in limited pricing power and thereby constraining the margins. The ratings also consider high exposure of the company to forex risk in the absence of any hedging mechanism in place; high customer concentration with top 10 customers contributing 63% of total sales in FY2015; and decline in realizations from Omeprazole led to dip in contribution from this product, however, with change in product mix coupled with enhanced capacity, the revenue has increased over the last two years. The ratings however positively takes into account long standing experience of the promoters in the pharmaceutical industry; established relationships with reputed domestic and international clientele with repeated orders over the last two years; and moderate financial profile of the company with gearing of 0.84 times and moderate coverage indicators as on March 31, 2015. Going forward, ability of the company to diversify its product portfolio, increase its scale and profitability by introducing new products, and managing of working capital requirements will be the key rating sensitivities from credit perspective. Sainor Pharma Private Limited (SPPL), incorporated in March 2004, is involved in the manufacture of drug loaded pellets (Semi formulation/Pelletisation). The company is primarily engaged in pelletisation of anti-ulcer drugs like Omeprazole, Lansoprazole etc. The company markets its products to domestic pharmaceutical companies, pharmaceutical traders for exports besides direct exports to countries like Thailand, Bangladesh and China. The company's facility is CGMP (Current Good Manufacturing Practice) and WHO GMP certified. The company's manufacturing facility is located in Jeedimetala, Hyderabad and is promoted by Mr. U. Tata Rao who is the chairman and Managing Director, Mr. S.P. Naidu, Mr. Ch A.P. Rameshwar Rao and Mr. T Venkateswara Rao who are the directors of the company and have vast experience in the pharmaceutical industry. Recent Results As per audited financials for FY2015, SPPL reported an operating income of INR48.07 crore with profit after tax of INR0.40 crore as against INR39.35 crore of operating income with profit after tax of INR0.24 crore in FY2014. As per provisional no's for 6m, FY2016, SLPL reported an operating income of INR22.68 crore with OPBDIT of INR0.87 crore (unaudited and provisional). SANJAY RICE: ICRA Reaffirms 'D' Rating on INR4.16cr Term Loan ------------------------------------------------------------- ICRA has reaffirmed the long-term rating of [ICRA]D assigned to the INR4.16 crore term loan, INR2.75 crore cash credit and INR1.27 crore untied limit of Sanjay Rice Mills Private Limited. ICRA has also reaffirmed the short-term rating of [ICRA]D assigned to the INR0.32 crore bank guarantee limit of SRMPL. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based Limit- Cash Credit 2.75 [ICRA]D reaffirmed Fund Based Limit- Term Loan 4.16 [ICRA]D reaffirmed Fund Based Limit- Untied 1.27 [ICRA]D reaffirmed Non-Fund Based Limit Bank Guarantee 0.32 [ICRA]D reaffirmed The reaffirmation of the rating primarily takes into account the continuing delays in servicing of debt obligations by the company on account of its stretched liquidity position, leading to overdue principal and interest on term loans. The rating also takes into account the small scale of current operations, low entry barriers and highly fragmented industry, characterized by intense competition among a large number of players, which keep margins under check and exposure to the inherent risks of agro-based businesses, such as changes in Government policies and agro- climatic conditions affecting the harvest. The rating also factors in the highly working capital intensive nature of operations on the back of high receivables and inventory holding, which exert pressure on the liquidity of the company. The rating, however, favourably considers the experience of the promoters in the rice milling business through one of its group entities and proximity to raw material sources, as the plant is favourably located amid a major paddy growing area. Incorporated in 2011, SRMPL is engaged in milling non-basmati rice with a de-husking capacity of 6 metric tonne per hour (MTPA). The manufacturing facility of the company is located at Cooch Behar, West Bengal. The company commenced its commercial operation from October 2014. Recent Results The company has achieved a turnover of INR22.74 crore during the first nine months of 2015-16 (provisional). The company reported a net loss of INR0.03 crore on an operating income of INR8.05 crore in 2014-15. SHAFEEQ SHAMEEL: CRISIL Cuts Rating on INR50MM Loan to B+ --------------------------------------------------------- CRISIL has downgraded its ratings on the bank facilities of Shafeeq Shameel and Co. (SSC) to 'CRISIL B+/Stable/CRISIL A4' from 'CRISIL BB-/Stable/CRISIL A4+. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 2.5 CRISIL A4 (Downgraded from 'CRISIL A4+') Export Packing 50.0 CRISIL B+/Stable (Downgraded Credit from 'CRISIL BB-/Stable') Foreign Bill 110.0 CRISIL A4 (Downgraded from Discounting 'CRISIL A4+') Letter of Credit 20.0 CRISIL A4 (Downgraded from 'CRISIL A4+') Standby Line of 27.5 CRISIL B+/Stable (Downgraded Credit from 'CRISIL BB-/Stable') The downgrade reflects the deterioration of SSC's business risk profile, because of decline in operating margins and lower than expected operating income. The company is estimated to report revenues of INR 890 million during 2015-16 (refers to FY April 1 to March 31) as against CRISIL's expectations of around INR1.1 billion. Further operating margins have also declined to around 5 percent for 2015-16 from 7 percent for 2014-15. The decline in operating performance is primarily on account of sluggish demand for leather products in the export market and intense competition in the industry. The decline in operating performance shall weaken the financial risk profile as will be reflected in the high gearing and weak debt protection metrics. CRISIL believes that SSC's operating performance shall remain under pressure over the medium term on account of intense competition and muted demand for finished leather. Outlook: Stable CRISIL believes SSC will continue to benefit over the medium term from its promoters' extensive industry experience. The outlook may be revised to 'Positive' if the firm significantly improves its financial risk profile, either through substantial cash accrual backed by increased scale of operations and operating profitability, or through equity infusion. Conversely, the outlook may be revised to 'Negative' if liquidity weakens because of sizeable capital withdrawal, or significant debt-funded capital expenditure, or stretch in working capital cycle. SSC, set up in 1967 by Mr. N Mohammed Sayeed and based in Chennai, undertakes vegetable tanning of raw hides (goat skin) to produce finished leather. SHANTAI EXIM: ICRA Revises Rating on INR7cr LT Loan to B- --------------------------------------------------------- ICRA has revised the long-term rating assigned to the INR7.00 crore fund-based bank facility of Shantai Exim Limited from [ICRA]B+ to [ICRA]B-. ICRA has reaffirmed the short-term rating of [ICRA]A4 assigned to the INR23.00 crore fund-based bank facilities of the company. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term Fund Based Limit 7.00 [ICRA]B- Revised from [ICRA]B+ Short Term Fund Based Limits 23.00 [ICRA]A4 Reaffirmed The revision in rating takes into account the weakness in financial performance of the company in 2014-15 characterized by sharp fall in profit margins and stretched liquidity position of the company as depicted by increased working capital requirements with significant increase in debtor days which was managed by stretched creditors. This has also resulted in deterioration in capital structure, and weakened coverage indicators. ICRA also notes that the company's operating performance has deteriorated in 2014-15 owing to weak demand conditions, intense competitive pressure in the business and also on account of inventory losses due to sharp decline in prices of raw materials (which are linked to crude oil). The profitability is also exposed to foreign exchange fluctuations risk due to the company's exposure to international markets. However, the ratings favorably factor in the long experience of the promoters in the textile industry and the location advantages arising from its presence in the textile hub of Surat thus giving the company access to a large base of suppliers. Incorporated in 2004, Shantai Exim Limited (SEL) is engaged in the manufacture and export of women's fashion wear, mainly sarees and dress materials to Indonesia, Pakistan, Vietnam, Turkey, etc. The company is also engaged in the trading of fancy yarn. The company has its registered office and manufacturing facility at Surat. Recent Results In the financial year 2014-15, SEL registered a profit after tax (PAT) of INR2.17 crore on an operating income of INR269.11 crore. SHIVKRUPA COTTON: CRISIL Suspends D Rating on INR30MM Cash Loan --------------------------------------------------------------- CRISIL has suspended its rating on the bank facilities of Shivkrupa Cotton Industries (SCI). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 30 CRISIL D Proposed Long Term Bank Loan Facility 20 CRISIL D Term Loan 30 CRISIL D The suspension of rating is on account of non-cooperation by SCI with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, SCI is yet to provide adequate information to enable CRISIL to assess SCI's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key factor in its rating process as outlined in its criteria 'Information Availability - a key risk factor in credit ratings'. Established in May 2011, SCI is promoted by the Patan (Gujarat)- based Mr. Kirtibhai Sambhubhai Thakkar and Mr. Somaji Sardarjji Thakur. It manufactures and de-lints cotton black seed and cotton lint from unprocessed cotton seeds. SHREE GAJKESHRI: CRISIL Assigns B Rating to INR56.5MM LT Loan ------------------------------------------------------------- CRISIL has assigned its 'CRISIL B/Stable' rating to the long-term bank facilities of Shree Gajkeshri Fabrics (SGF). The rating reflects the firm's start-up phase of operations in the highly fragmented textile industry, and high gearing. These rating weaknesses are partially offset by the extensive industry experience of the firm's promoter and funding support received from him. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Proposed Long Term Bank Loan Facility 23.5 CRISIL B/Stable Cash Credit 30 CRISIL B/Stable Long Term Loan 56.5 CRISIL B/Stable Outlook: Stable CRISIL believes SGF will continue to receive funding support from its promoter over the medium term. The outlook may be revised to 'Positive' in case of earlier-than-expected ramp-up of operational income, leading to better-than-expected cash accrual. Conversely, the outlook may be revised to 'Negative' in case of lower-than- anticipated capacity utilisation, pressure on profitability negatively affecting cash accrual, or more-than-expected reliance on debt to fund working capital requirement, leading to weakening of the firm's financial risk profile. SGF was established in August 2015 by Mr. Keshri Chhajer. It was formed to manufacture and supply ready-to-stich material for sarees, suits, and other garments. Its manufacturing facility is being set up in Pali, Rajasthan. SHRIRAM TRANSPORT: S&P Assigns 'BB+' ICR; Outlook Stable -------------------------------------------------------- Standard & Poor's Ratings Services said it has assigned its 'BB+' long-term and 'B' short-term issuer credit ratings to India-based Shriram Transport Finance Co. Ltd. (STFC). The outlook on the long-term rating is stable. "The rating on STFC reflects the company's good business position, capitalization, and earnings profile," said Amit Pandey, a credit analyst at Standard & Poor's. "However, the company's inherently high credit costs temper these strengths. We assess STFC's stand- alone credit profile as 'bb+'." S&P believes that Indian finance companies (fincos) like STFC face greater industry risk relative to banks because fincos usually have no access to central bank funding, and have lower barriers to entry and less stable revenues. Fincos also have less onerous regulations, notwithstanding some requirements on capital adequacy, asset quality, and asset-liability management. S&P's 'bb' anchor for STFC is therefore two notches below the bank anchor derived from our Banking Industry Country Risk Assessment for India. Like other Indian financial institutions, fincos benefit from low economic imbalances, intermediate private sector leverage, and relatively limited competition. India's low income economy and weak foreclosure laws temper these advantages. S&P expects STFC to maintain its dominant position in its niche market for pre-owned commercial vehicles (CV). STFC's asset base accounts for less than 1% of the Indian financial system; however, the company has a strong market position as the largest CV financier in India. In the pre-owned segment, STFC has a 25%-27% share (92% of assets under management). The company has good customer loyalty, given its long track record (of over 30 years) in the business and distribution network of 822 branches and 779 rural centers as of December 2015; STFC has also set up a secondary CV sales market place. S&P expects STFC to continue to generate most of its operating revenues from interest income (more than 90% on average over the past five years). Although most of its earnings are derived from vehicle financing within India, the company has some diversification, given its pan- India presence and focus on different vehicle categories. Heavy CVs account for 48% of assets under management, compared with medium and light CVs (21%), and passenger vehicles (23%). The management and governance of STFC is satisfactory, in S&P's view. The board includes a majority of independent directors, and the company has a track record of identifying a market niche with limited competition from organized financiers (including banks) and increasing its portfolio with satisfactory profitability. S&P's assessment of STFC's capital, leverage, and earnings reflects S&P's expectation that the company's pre-diversification risk-adjusted capital (RAC) ratio will remain above 10% over the next 12-18 months, compared with 11.4% as of March 2015. STFC's earnings are characterized by higher yield on the pre-owned CV portfolio and low operating costs to compensate for high cost of wholesale borrowings and credit costs. STFC's return on assets of 3.2% in the past five years is higher than the banking industry average of 1% and comparable to some of the other fincos that S&P rates in India, such as Power Finance Corp. Ltd. and Kotak Mahindra Prime Ltd. S&P expects STFC's assets to grow at 13%-14% on average over the next 12-18 months, with some improvement in net interest margins. S&P's view reflects a reduction of interest rates in India, resulting in improving profitability. Credit costs for STFC are likely to remain high. The company's profitability has declined in the past three to four years due to higher wholesale funding rates in India, lower income from securitization, and higher credit costs. S&P's assessment of STFC's risk position reflects the company's elevated credit costs due to inherent weakness in its borrowers and asset profile, and cyclical weakness in the rural economy and infrastructure activity in India. STFC caters to small road transport owners, which typically own two to three trucks and rely on the financed assets to generate income for debt servicing. The cash flows of such borrowers could be erratic. STFC's portfolio has been further affected by weak infrastructure activity in India over the past few years and two consecutive below-par monsoon seasons that have undermined the rural economy. S&P expects the credit provisions for STFC to remain high over the next 12-18 months as: (1) the company moves to tighter recognition norms for nonperforming assets (NPAs) (the regulator has tightened the NPA recognition from 180 days past due to 90 days by March 2018); and (2) recovery in the rural economy remains contingent on a normal monsoon season this year. The commercial equipment business of STFC's subsidiary may also require provisioning. Despite such challenges and to mitigate the risks, the company has relied on domain knowledge of the CV market in valuing the pre- owned vehicles and ascertaining the debt-servicing ability of borrowers, granularity of loan ticket size, relationship-based new customer referrals, and tight collection mechanism. S&P's stable outlook reflects its expectation that STFC will sustain its good market position in the pre-owned CV financing segment along with stable growth, capitalization, and earnings over next 12-18 months. S&P may lower the rating if STFC's RAC ratio declines below 10%, which could happen if: (1) the company grows more than S&P's expectations; (2) its profitability deteriorates and credit costs increase sharply; or (3) economic risk in India increases. S&P is unlikely to raise the rating in the outlook horizon because used CVs, which comprise a majority of STFC's assets, are highly sensitive to economic fluctuations, in S&P's view. SIGMA GALVANIZING: CRISIL Reaffirms B- Rating on INR117.6MM Loan ---------------------------------------------------------------- CRISIL's ratings on the bank facilities of Sigma Galvanizing Pvt Ltd (SGPL) continue to reflect its modest scale of operations, large working capital requirements, and a weak financial risk profile because of modest net worth, high gearing,below-average debt protection metrics, and stretched liquidity. These weaknesses are partially offset by the extensive experience of the promoters in the galvanisation industry. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 5 CRISIL A4 (Reaffirmed) Cash Credit 75 CRISIL B-/Stable (Reaffirmed) Letter of Credit 20 CRISIL A4 (Reaffirmed) Long Term Loan 117.6 CRISIL B-/Stable (Reaffirmed) Outlook: Stable CRISIL believes that SGPL will continue to benefit from the promoters' extensive industry experience and their funding support. The outlook may be revised to 'Positive' if there is substantial and sustained improvement in revenues and operating margin, leading to higher-than-expected cash accrual, along with efficient working capital management. Conversely, the outlook may be revised to 'Negative' in case of lower-than-expected cash accrual or larger-than-expected working capital requirements or if large,debt-funded capital expenditure leads to deterioration in the financial risk profile, particularly liquidity. Incorporated in 1989, SGPL is a Navi Mumbai-based company that is engaged in the galvanisation of iron and steel products, roll forming, and manufacturing electroforged gratings. Promoted by a group of technocrats, its facilities have a galvanization capacity of 2400 tonnes per month. SRIKARA PACKAGING: ICRA Suspends B+ Rating on INR4cr Loan --------------------------------------------------------- ICRA has suspended the long-term rating of [ICRA]B+ outstanding on the INR4.00 crore term-loans and on the INR4.00 crore fund based limits of Srikara Packaging Private Limited. The suspension follows ICRA's inability to carry out a rating surveillance in the absence of the requisite information from the company. According to its suspension policy, ICRA may suspend any rating outstanding if in its opinion there is insufficient information to assess such rating during the surveillance exercise. TARUN SHREE: CRISIL Suspends B- Rating on INR1.23BB Term Loan ------------------------------------------------------------- CRISIL has suspended its ratings on the bank facilities of Tarun Shree Cotton Spintex Private Limited (TCSPL). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Proposed Bank Guarantee 100 CRISIL A4 Proposed Cash Credit Limit 600 CRISIL B-/Stable Proposed Term Loan 1234.8 CRISIL B-/Stable Term Loan 235.2 CRISIL B-/Stable The suspension of ratings is on account of non-cooperation by TCSPL with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, TCSPL is yet to provide adequate information to enable CRISIL to assess TCSPL's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key factor in its rating process as outlined in its criteria 'Information Availability - a key risk factor in credit ratings'. TCSPL was incorporated in June 2012 by Mr. Chava Sivarama Krishna and his family members. The company is setting up a cotton spinning unit with 34,560 spindles in Rayagada (Odisha). The construction commenced in September 2012 and commercial production is expected to begin by May 2015. TRIVENI SHIP: CRISIL Reaffirms B+ Rating on INR50MM Cash Loan ------------------------------------------------------------- CRISIL's ratings on the bank facilities of Triveni Ship Breakers (Triveni) continue to reflect Triveni's small scale of operations, and susceptibility to volatility in foreign exchange (forex) rates and steel prices. These weaknesses are partially offset by its promoters' extensive experience in the ship-breaking industry. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 50 CRISIL B+/Stable (Reaffirmed) Letter of Credit 440 CRISIL A4 (Reaffirmed) Proposed Long Term Bank Loan Facility 9.8 CRISIL B+/Stable (Reaffirmed) Outlook: Stable CRISIL believes Triveni will continue to benefit over the medium term from its promoters' extensive industry experience. The outlook may be revised to 'Positive' if the firm reports substantial growth in topline and profitability, backed by increase in ship-breaking activity. Conversely, the outlook may be revised to 'Negative' if its liquidity is constrained on account of inability to recover cost of ship purchase because of sharp fall in steel scrap prices or adverse movement in forex rates. Triveni was established in 1983 by Mr. Yogesh Kanakiya and his brother Mr. Nitin Kanakiya in Bhavnagar. The firm has capacity to break various types of ships, such as general cargo ships, oil tankers, reefers, and bulk carriers, at its unit in Alang. For 2014-15 (refers to financial year, April 1 to March 31), its net profit was Rs.1.31 million on net sales of Rs.5.70 million, against net profit of Rs.3.58 million on net sales of Rs.190.5 million for 2013-14. TUFFWARE INDUSTRIES: CRISIL Lowers Rating on INR80MM Loan to D -------------------------------------------------------------- CRISIL has downgraded its rating on the short-term bank facilities of Tuffware Industries (TI) to 'CRISIL D' from 'CRISIL A4'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 0.5 CRISIL D (Downgraded from 'CRISIL A4') Bill Discounting 80.0 CRISIL D (Downgraded from 'CRISIL A4') Letter of Credit 5.0 CRISIL D (Downgraded from 'CRISIL A4') Overdraft Facility 2.6 CRISIL D (Downgraded from 'CRISIL A4') Packing Credit 47.5 CRISIL D (Downgraded from 'CRISIL A4') Proposed Short Term Bank Loan Facility 5.4 CRISIL D (Downgraded from 'CRISIL A4') The downgrade reflects irregularities in TI's packing credit limit for more than 30 days as on February 29, 2016. TI also has a modest scale of operations, is susceptible to raw material price volatility, and has a weak financial risk profile However, TI benefits from the promoters' extensive experience in the stainless steel utensil industry and their established customer relationships. TI was established in 1994 by the Mumbai-based Ganger family. The firm manufactures and exports stainless steel utensils and non- stick cookware. It sells its products primarily to Latin American and African countries through agents and traders based in these countries. TI has its manufacturing unit at Vasai, Maharashtra. VEDIC AND FUTURISTIC: CRISIL Rates INR1.0BB Term Loan at 'B' ------------------------------------------------------------ CRISIL has assigned its 'CRISIL B/Stable' rating to the long-term bank facility of Vedic And Futuristic Edutech (VAFE). The rating reflects VAFE's exposure to implementation risks on the hospital project, with stabilisation of operations. These rating weaknesses are partially offset by the extensive experience of promoters in managing hospital operations and benefits expected from robust growth prospects for the healthcare industry, with location advantage. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Term Loan 1000 CRISIL B/Stable Outlook: Stable CRISIL believes VAFE will maintain its credit risk profile, backed by the promoters' funding support, and location advantage. The outlook may be revised to 'Positive' in case of timely execution of the project within the projected cost or higher-than-expected occupancy levels and profitability, resulting in higher-than- expected accrual and thus better financial risk profile. Conversely, the outlook may be revised to 'Negative' in case of any time or cost overrun, adversely impacting the financial risk profile and thus the debt-servicing ability. VAFE was set up in October 2012 by Mr. Kapil Mishra and Dr. Shubhshree. It proposes to set up a hospital, TSM Hospital and Medical College, with 400 beds, along with a number of key medical facilities nearby Amausi railway station Lucknow. The hospital is proposed to be expanded to 700 beds in future. VIDYA POLYMER: ICRA Reaffirms B+ Rating on INR4.5cr Loan -------------------------------------------------------- ICRA has reaffirmed its long-term rating of [ICRA]B+ on the INR8.00 crore fund based facilities of Vidya Polymer Private Limited. ICRA has also reaffirmed its short-term rating of [ICRA]A4 on the INR1.50 crore non-fund based bank facilities of the company. Amount Facilities (INR crore) Ratings ---------- ----------- ------- CC 4.50 [ICRA]B+; reaffirmed Term Loan 3.50 [ICRA]B+; reaffirmed LC 1.50 [ICRA]A4; reaffirmed The rating reaffirmation takes into account the ~16% year-on-year increase in VPPL's operating income in FY15, on account of high demand from its major client, Haldiram Snacks Pvt Ltd, however this has been accompanied by a deterioration in the company's capital structure on account of increase in long term borrowings for enhancement in the production capacity. ICRA also takes note of the high utilization of the company's working capital limits. ICRA's ratings continues to factor in VPPL's modest scale of operations and the highly competitive and fragmented nature of the industry in which it operates, which limits the pricing flexibility of the company. VPPL's profitability is also vulnerable to raw material price volatility. These factors have led to thin profitability and weak debt protection indicators for VPPL. Nevertheless, the ratings derive comfort from the extensive experience of the promoters in the packaging business, and its established relationships with its key customers; these factors have supported the strong growth registered by the company over the years. Going forward, the ability of the company to increase its scale of operations in a profitable manner while attaining optimal working capital intensity will be the key rating sensitivities. VVPL, incorporated in 2006, manufactures packaging materials, mainly for the food and pan masala industries. The manufacturing facility of the company is located in Noida, Uttar Pradesh. Recent Results The company reported a net profit of INR0.26 crore on an operating income of INR53.59 crore in FY15, as against a net profit of INR0.10 crore on an operating income of INR46.20 crore in the previous year. The company, on a provisional basis, reported an operating income of INR57.11 crore for the nine months ending December 31, 2015. WATER SYSTEMS: ICRA Suspends B+ Issuer Rating --------------------------------------------- ICRA has suspended the issuer rating of Ir B+ of Water Systems India Private Limited. The suspension follows ICRA's inability to carry out a rating surveillance in the absence of the requisite information from the entity. 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. WESTERN CONSTRUCTION: ICRA Assigns B+ Rating to INR140cr Loan ------------------------------------------------------------- ICRA has assigned a long-term rating of [ICRA]B+ to the INR140.00 crore long term loans of Western Construction Co. (Gujarat) LLP. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Term Loan 140.00 [ICRA]B+ assigned The assigned rating takes into account the long experience of the promoters of Western Construction Co. (Gujarat) LLP (WCC) in the real estate development sector and the favorable location of ongoing commercial project. The rating, however, is constrained by high execution risks and market risks related to the ongoing commercial project, given the nascent stage of development of the project. ICRA also notes the firm's exposure to increasing competition from the upcoming projects in the vicinity. The rating also takes into account the high funding risks as the secured debt funding has not been tied up and unsecured loans inflow has not commenced yet. Hence timely inflow of secured debt funding, unsecured loans and collection of advances remains critical for project completion. Besides, ICRA also takes into account the risks associated with the legal status as a partnership firm, including the risks of withdrawal of capital. Western Construction Company (Gujarat) LLP has been into the business of development of commercial projects and is a part of the Western Group which has completed many residential and commercial projects till date. The group has completed 14 projects in Surat till date with a total saleable area of 54.66 lakh sq. ft. WCC has its registered office located in Surat, Gujarat. ================= I N D O N E S I A ================= BUMI SERPONG: Fitch Affirms 'BB-' LT FC IDR; Outlook Stable ----------------------------------------------------------- Fitch Ratings has affirmed Indonesia-based homebuilder PT Bumi Serpong Damai Tbk's (BSD) Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BB-'. The Outlook is Stable. The agency has also affirmed the company's 'BB-' senior unsecured rating and the 'BB-' rating on its outstanding USD225 mil. 6.75% senior unsecured bond, which is due in 2020. The US dollar bond is issued by BSD's subsidiary, Global Prime Capital Pte Ltd, and guaranteed by BSD. The ratings affirmation reflects BSD's business profile as one of the largest Indonesian homebuilders, a strong recurring cash flow from its granular investment property portfolio and robust balance sheet with low leverage. The senior unsecured ratings reflect low subordination risk to this debt class because of the high coverage provided by BSD's unencumbered assets. This is why the senior unsecured rating is at the same level as the Long-Term IDR. KEY RATING DRIVERS 2015 Presales Outperformed Peers: BSD's presales increased 5% during 2015 to IDR6.7trn, despite weak domestic property demand. In contrast, most domestic peers recorded decreases in presales amid challenging macroeconomic conditions. However, BSD's presales were 6% lower than its own targets, as the company postponed three condominium launches to 2016. BSD's diversity across property products and price points is a key driver of its performance, allowing the company to adjust sales plans to match demand. Strong Recurring Cash Flow: Investment property generated around USD67m in EBITDA during 2015. The company owns 18 assets, including suburban retail malls catering to the mass market, a mix of prime and suburban office space and two resort hotels. While 2015 investment property EBITDA was 15% lower than Fitch's expectations due to slower ramp up of some of BSD's newer properties, overall occupancy was strong at 95%. Asset concentration is modest, with the five largest assets accounting for 62% of income. Subsidiary Owns Investment Property: Most of BSD's investment property is held through its 88.56% owned listed subsidiary, PT Duta Pertiwi Tbk (DUTI). A significant dilution in BSD's ownership of DUTI, although not expected in the medium term, may reduce BSD's access to DUTI's recurring cash flow and increase risk to BSD's creditors. Strong Balance Sheet, Large Land Bank: BSD has a track record of maintaining a strong balance sheet. At the end of December 2015, its leverage, measured as net debt/adjusted inventory, was just 10.2%. Fitch expects leverage to remain below 25% over the medium term. Its land bank amounted to 39.5 million square meters at the end of 2015. Uniquely, the title to 63% of BSD's land bank is under the company founders' names, an arrangement dating back to BSD's inception. A legally binding agreement confers the rights to developing the land to BSD. To be conservative, Fitch has excluded the portion of land under the founders' names from its leverage calculation. But it should be noted that this agreement has not been breached since its inception. High Capex, Geographically Concentrated Sales: BSD expects to spend around IDR8trn between 2016 and 2018 on expanding its investment property portfolio to over 30 properties. Fitch expects execution risk to be mitigated by the company's track record of successfully developing similar properties. BSD anticipates spending a further IDR2trn on land banking annually until 2018. In 2015, nearly 70% of BSD's presales were in within the BSD City township in the Serpong region outside Jakarta, but were diversified across various residential and commercial clusters. KEY ASSUMPTIONS Fitch's key assumptions include: -- Presales of IDR6.4trn in 2016 -- Cash collection cycle on development projects to remain between two to three years on average, in line with current trends -- Investment properties to generate around IDR1.2trn EBITDA in 2016 (2015: IDR904 bil.) -- BSD to spend over IDR6trn on capex in 2016 and 2017 and around IDR4trn on land banking over the same period RATING SENSITIVITIES Positive: Fitch does not expect BSD's ratings to be upgraded in the next 24 months, given the company's evolving investment property portfolio compared to higher rated international peers and high capex and execution risks related to the investment property expansion. Over the longer-term, the following may result in an upgrade: -- Increased scale and granularity of the investment property portfolio, so it generates over USD120m, with the five largest assets accounting for less than 50% of revenue in this segment -- Investment property EBITDA/net interest expense higher than 2.5x (2015: 2.9x) -- Leverage sustained below 30% Negative: Future developments that may, individually or collectively, lead to negative rating action include: -- Investment property EBITDA/net interest expense sustained below 1.75x -- Leverage sustained above 40% LIQUIDITY Strong Liquidity: At the end of 2015 BSD had IDR6.1trn of readily available cash against IDR7.9trn of gross debt. IDR1.8trn of debt consists of short-term secured working capital facilities, with a further IDR159bn of current maturities and capital leases. Fitch expects BSD to generate a free cash outflow of around IDR800 bil. in 2016, after factoring in capex and land banking. The company also has a further IDR750bn of approved but unutilised credit facilities outstanding. ========= J A P A N ========= TOSHIBA CORP: Sells Medical Devices Unit to Canon For JPY665.5BB ---------------------------------------------------------------- Japan Today reports that Toshiba Corp. has sold its medical devices unit to camera and office equipment maker Canon for JPY665.5 billion, it said March 17, as it sheds businesses to recover from a major accounting scandal. The report relates that the deal came as Toshiba's share price plunged nearly eight percent after a report it was under investigation by U.S. authorities over allegations it hid losses in its nuclear business. It comes as Toshiba expects a whopping loss of about JPY650 billion for the year to March due to sagging global demand and a profit-padding scandal, in which high-handed bosses for years systematically pushed their subordinates to cover-up weak financial figures, according to Japan Today. Japan Today notes that following the scandal, Toshiba has ushered in thousands of job cuts and plans to sell various business units in a bid to revive its fortunes. Under the deal, Toshiba sold all its shares in Toshiba Medical Systems, a major producer of medical imaging tools such as MRI and CT scans, to Canon, the report states. Separately, Toshiba said it had reached a basic accord to sell a majority interest in its home appliance business to China's Midea, though a Toshiba spokeswoman said a price for the deal had yet to be announced, Japan Today reports. She said the two sides were scheduled to reach a final accord by the end of March, the report relates. Japan Today says sales in Toshiba's home appliance business came to JPY225.4 billion for the fiscal year to March 2015, the most recent annual figure available. In December, Japan's Securities and Exchange Surveillance Commission said Toshiba should be slapped with a record JPY7.37 billion fine over the profit-padding scheme that hammered the reputation of one of Japan's best-known firms, according to Japan Today. About Toshiba Corp. The Troubled Company Reporter-Asia Pacific, citing Reuters, reported on July 22, 2015, that an independent investigation said in a report dated July 21 that Toshiba Corp. overstated its operating profit by JPY151.8 billion ($1.22 billion) over several years in accounting irregularities involving top management. The investigating committee said in a report filed by Toshiba to the Tokyo Stock Exchange that Toshiba President and Chief Executive Hisao Tanaka and his predecessor, Vice Chairman Norio Sasaki, were aware of the overstatement of profits and delay in reporting losses in a corporate culture that "avoided going against superiors' wishes," according to Reuters. The TCR-AP, citing Bloomberg News, reported on July 22, 2015, that Toshiba Corp. President Hisao Tanaka and two other executives quit to take responsibility for a $1.2 billion accounting scandal that caused the maker of nuclear reactors and household appliances to restate earnings for more than six years. Norio Sasaki, the vice chairman, and Atsutoshi Nishida, a former president who was serving as adviser, also resigned, the Tokyo- based company said July 21, more than two months after announcing it was investigating possible accounting irregularities, according to Bloomberg. On Feb. 12, 2016, Moody's Japan K.K. has downgraded Toshiba Corporation's corporate family rating (CFR) and senior unsecured rating by three notches to B2 from Ba2. Moody's has also downgraded Toshiba's subordinated debt rating by 4 notches to Caa2 from B1, and affirmed its short-term rating of Not Prime. At the same time, B2 CFR and long-term senior unsecured bond ratings, as well as its Caa2 subordinated debt rating remain under review for further downgrade. On Feb. 9, 2016, Standard & Poor's Ratings Services said that it has lowered its long-term corporate credit rating on Japan-based diversified electronics company Toshiba Corp. three notches to 'B+' from 'BB+' and its long-term senior unsecured debt rating two notches to 'BB' from 'BBB-'. The debt rating is two notches higher than the corporate credit rating, reflecting S&P's view that the probability of default in Toshiba's bonds is lower than that in its bank borrowings. S&P is keeping its long-term ratings on Toshiba on CreditWatch with negative implications, where S&P placed them Dec. 22, 2015, when it lowered the long-term corporate credit rating. S&P has affirmed its short-term corporate credit and commercial paper ratings on Toshiba. Toshiba Corporation (TYO:6502) -- http://www.toshiba.co.jp/-- is a Japan-based manufacturer involved in five business segments. The Digital Products segment offers cellular phones, hard disc devices, optical disc devices, liquid crystal televisions, camera systems, digital versatile disc (DVD) players and recorders, personal computers (PCs) and business phones, among others. The Electronic Device segment provides general logic integrated circuits (ICs), optical semiconductors, power devices, large-scale integrated (LSI) circuits for image information systems and liquid crystal displays (LCDs), among others. The Social Infrastructure segment offers various generators, power distribution systems, water and sewer systems, transportation systems and station automation systems, among others. The Home Appliance segment offers refrigerators, drying machines, washing machines, cooking utensils, cleaners and lighting equipment. The Others segment leases and sells real estate. TOSHIBA CORP: Says US Units Are Investigated Over Accounting ------------------------------------------------------------ Kyodo News reports that Toshiba Corp. said on March 18 its U.S. units are being investigated by the U.S. Justice Department and Securities and Exchange Commission over accounting practices. According to the report, the companies, including Toshiba's U.S. nuclear unit Westinghouse Electric Co., have received a request from the U.S. authorities to provide certain information. Toshiba declined to elaborate on the investigation, Kyodo says. In November, Toshiba revealed that Westinghouse had written down assets by $1.3 billion in total for the 2012 and 2013 business years, Kyodo recalls. The revelation came after the Tokyo Stock Exchange urged Toshiba to disclose information about the loss in the 2012 business year, Kyodo notes. Kyodo says Toshiba has been engulfed in an accounting scandal that led to downward revisions totaling 224.8 billion yen to its past earnings on a pretax basis over nearly seven years, and a revamp of its money-losing businesses. About Toshiba Corp. The Troubled Company Reporter-Asia Pacific, citing Reuters, reported on July 22, 2015, that an independent investigation said in a report dated July 21 that Toshiba Corp. overstated its operating profit by JPY151.8 billion ($1.22 billion) over several years in accounting irregularities involving top management. The investigating committee said in a report filed by Toshiba to the Tokyo Stock Exchange that Toshiba President and Chief Executive Hisao Tanaka and his predecessor, Vice Chairman Norio Sasaki, were aware of the overstatement of profits and delay in reporting losses in a corporate culture that "avoided going against superiors' wishes," according to Reuters. The TCR-AP, citing Bloomberg News, reported on July 22, 2015, that Toshiba Corp. President Hisao Tanaka and two other executives quit to take responsibility for a $1.2 billion accounting scandal that caused the maker of nuclear reactors and household appliances to restate earnings for more than six years. Norio Sasaki, the vice chairman, and Atsutoshi Nishida, a former president who was serving as adviser, also resigned, the Tokyo- based company said July 21, more than two months after announcing it was investigating possible accounting irregularities, according to Bloomberg. On Feb. 12, 2016, Moody's Japan K.K. has downgraded Toshiba Corporation's corporate family rating (CFR) and senior unsecured rating by three notches to B2 from Ba2. Moody's has also downgraded Toshiba's subordinated debt rating by 4 notches to Caa2 from B1, and affirmed its short-term rating of Not Prime. At the same time, B2 CFR and long-term senior unsecured bond ratings, as well as its Caa2 subordinated debt rating remain under review for further downgrade. On Feb. 9, 2016, Standard & Poor's Ratings Services said that it has lowered its long-term corporate credit rating on Japan-based diversified electronics company Toshiba Corp. three notches to 'B+' from 'BB+' and its long-term senior unsecured debt rating two notches to 'BB' from 'BBB-'. The debt rating is two notches higher than the corporate credit rating, reflecting S&P's view that the probability of default in Toshiba's bonds is lower than that in its bank borrowings. S&P is keeping its long-term ratings on Toshiba on CreditWatch with negative implications, where S&P placed them Dec. 22, 2015, when it lowered the long-term corporate credit rating. S&P has affirmed its short-term corporate credit and commercial paper ratings on Toshiba. Toshiba Corporation (TYO:6502) -- http://www.toshiba.co.jp/-- is a Japan-based manufacturer involved in five business segments. The Digital Products segment offers cellular phones, hard disc devices, optical disc devices, liquid crystal televisions, camera systems, digital versatile disc (DVD) players and recorders, personal computers (PCs) and business phones, among others. The Electronic Device segment provides general logic integrated circuits (ICs), optical semiconductors, power devices, large-scale integrated (LSI) circuits for image information systems and liquid crystal displays (LCDs), among others. The Social Infrastructure segment offers various generators, power distribution systems, water and sewer systems, transportation systems and station automation systems, among others. The Home Appliance segment offers refrigerators, drying machines, washing machines, cooking utensils, cleaners and lighting equipment. The Others segment leases and sells real estate. ********* 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 ***