/raid1/www/Hosts/bankrupt/TCRAP_Public/160323.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
Wednesday, March 23, 2016, Vol. 19, No. 58
Headlines
A U S T R A L I A
ASSET INTERIORS: Placed in Administration
AUSTRALIAN CAREERS: Placed Into Voluntary Administration
CONSOLIDATED GLOBAL: First Creditors' Meeting Set For April 1
DICK SMITH: Workers Uncertain Over Future
E GLOBAL: First Creditors' Meeting Set For March 30
GLOBAL CONSTRUCTIONS: First Creditors' Meeting Set For March 30
QUEENSLAND NICKEL: Workers Hope to Take Control of Business
* AUSTRALIA: SMEs at Risk of Closure on Woolworths Payment Terms
B A N G L A D E S H
EASTERN BANK: Moody's Assigns Ba3 Issuer Ratings, Outlook Stable
C H I N A
CHINA SCE: Moody's to Retain B1 CFR on Modest 2015 Results
NEXTEER AUTOMOTIVE: 2015 Results Supports Moody's Ba1 CFR
WEST CHINA: Weaker Operations Outweighed by Takeover, Fitch Says
I N D I A
AARVEE COLD: Ind-Ra Assigns BB+ LT Issuer Rating; Outlook Stable
ACCORD COMMUNICATIONS: CARE Reaffirms B- Rating on INR5.24cr Loan
AMLAGORA COLD: CARE Reaffirms 'B' Rating on INR6.25cr LT Loan
ASAN MEMORIAL: CARE Reaffirms 'D' Rating on INR8.38cr LT Loan
BABOO RICE: CRISIL Suspends B Rating on INR70MM Cash Loan
BEARDSELL LIMITED: CRISIL Reaffirms FB+ Fixed Deposit Rating
BHOOMIDHAN COLD: CRISIL Assigns B Rating to INR46MM Term Loan
BYREDDY VISHNUVARDHAN: CARE Reaffirms B+ Rating on INR6.5cr Loan
DELTA JEWELLERS: Ind-Ra Assigns BB Rating to INR70MM Loan
DGP STEEL: CRISIL Lowers Rating on INR40MM Bank Loan to 'D'
EASTMAN RECLAMATIONS: CARE Assigns B+ Rating to INR7.60cr LT Loan
GARV UDYOG: CRISIL Reaffirms B Rating on INR42.5MM Cash Loan
GOVINDA IMPEX: CRISIL Suspends 'D' Rating on INR400MM Cash Loan
INFUTEC HEALTHCARE: CARE Reaffirms B+ Rating on INR71.62cr Loan
J M MHATRE: Ind-Ra Assigns 'IND BB' LT Issuer Rating
JAGMOHAN LAL: CRISIL Suspends D Rating on INR392.6MM Term Loan
JAI JALARAM: CRISIL Reaffirms B Rating on INR55MM Cash Loan
JAYBAJRANG AGRO: CARE Assigns B+ Rating to INR5.0cr LT Loan
JDC INDIA: CRISIL Lowers Rating on INR70MM Cash Loan to 'B'
KARTIK CONSTRUCTION: CRISIL Assigns B Rating to INR40MM Loan
M. S. LABELS: CRISIL Suspends B+ Rating on INR52MM LT Loan
MONGIA STEEL: CRISIL Suspends B+ Rating on INR260MM Cash Loan
NARAYANA REDDY: CRISIL Assigns B+ Rating to INR49.5MM Cash Loan
NORTECH POWER: CARE Reaffirms 'C' Rating on INR2.0cr LT Loan
OM SAI: CARE Assigns 'D' Rating to INR5.55cr LT Loan
ORBIT TECHNOLOGIES: Ind-Ra Affirms 'IND BB-' LT Issuer Rating
P.S. EDUCATIONAL: CRISIL Assigns B+ Rating to INR50MM Term Loan
PRAKASH CORRUGATED: CRISIL Suspends B- Rating on INR80MM Loan
PVN TEX: Ind-Ra Downgrades Long-Term Issuer Rating to 'IND D'
R. M. METALS: CRISIL Reaffirms 'B' Rating on INR70MM Cash Loan
RADHA INDUSTRIES: CRISIL Suspends B+ Rating on INR40MM Cash Loan
RAMA ARTS: CARE Assigns B+ Rating to INR6.21cr LT Loan
RANGOLI INDUSTRIES: CRISIL Cuts Rating on INR52.5MM Loan to B-
SAINOR LABORATORIES: ICRA Ups Rating on INR6.50cr Loan to BB-
SAMRIDDHI AGRO: CRISIL Suspends B- Rating on INR46.1MM LT Loan
SANTPURIA ALLOYS: CRISIL Suspends B+ Rating on INR150MM Loan
SEYA PATE: CARE Assigns 'B' Rating to INR7.50cr LT Loan
SHREE VALI: CRISIL Suspends 'B' Rating on INR48MM Cash Loan
SLV SPINNING: CRISIL Suspends B Rating on INR172MM LT Loan
SR ALCOBEV: CRISIL Suspends B- Rating on INR730MM LT Loan
SR VAPORS: CRISIL Suspends 'D' Rating on INR115MM LT Loan
SRI NANGALI: CRISIL Lowers Rating on INR220MM Loan to 'D'
SRI NANGALI RICE: CRISIL Cuts Rating on INR540MM Loan to 'D'
SUNRISE AGRO: CRISIL Lowers Rating on INR30MM Cash Loan to B-
SWARNAA TECHNO: CRISIL Suspends 'D' Rating on INR75MM Bank Loan
TAKEDA IFMR: Ind-Ra Confirms IND B+(SO) Rating on Series A2 PTCs
TALWAR MOBILES: CRISIL Suspends B+ Rating on INR150MM LT Loan
TRV GLOBAL: CARE Assigns 'C' Rating to INR3cr LT Loan
VAIBHAV COTTON: CRISIL Assigns B+ Rating to INR140MM Cash Loan
I N D O N E S I A
ENERGI MEGA: Moody's Confirms B2 CFR; Outlook Stable
INDONESIA: Will No Longer Bail Out Troubled Commercial Banks
MASKAPAI REASURANSI: Fitch Upgrades IFS Rating to 'BB'
J A P A N
TAKATA CORP: To Sell Most of Its Shares in Other Firms
TOKYO ELECTRIC: Moody's Affirms Ba3 CFR; Outlook Stable
T H A I L A N D
IRPC PUBLIC: Moody's Confirms Ba1 Corporate Family Rating
- - - - -
=================
A U S T R A L I A
=================
ASSET INTERIORS: Placed in Administration
-----------------------------------------
Brent Leigh Morgan of Rodgers Reidy was appointed as administrator
of Asset Interiors Pty. Ltd. on March 21, 2016.
AUSTRALIAN CAREERS: Placed Into Voluntary Administration
--------------------------------------------------------
Kylar Loussikian at The Australian reports that Australian Careers
Network, once one of the country's largest vocational training
providers, has been placed into voluntary administration.
According to the report, the Australian Securities Exchange-listed
company (ACO) owns Phoenix Institute, which has been mired in
controversy over alleged misuse of the federal government's VET
Fee-Help loan scheme and which was unsuccessful in clawing back
AUD40 million in funding earlier this month.
Although it has been barred from enrolling new students for
several months, Phoenix Institute and other ACN companies are
still training 15,000 students -- all of whom will now be left in
limbo, the Australian says.
John Lindholm and George Georges of Ferrier Hodgson have been
appointed to act as voluntary administrators, the report
discloses.
The Australian revealed earlier this month that the financially
stricken company had received legal advice it could target
thousands of students to repay AUD300 million in course fees if
government funding was not forthcoming.
While the government has been able to defer the AUD40 million in
loan payments, it will conduct a reconciliation with training
providers at the end of the month, when colleges submit funding
requests for the past year, the report states.
In July, the Department of Education decided Phoenix Institute
should be eligible for AUD160 million in funding for the 2015
calendar year. It subsequently deferred three payments of AUD13.3
million each due in October, November and December, The Australian
recalls.
The report notes that the VET FEE-HELP program allows students to
receive up to AUD100,000 in college tuition loans, which are
intended to be repaid after the students begin earning about
AUD55,000 a year.
Poor quality tuition, the mass enrolment of unsuitable candidates
and very low completion rates have led to significant concerns
that many of those loans may never be repaid, leaving taxpayers
with a substantial bill, The Australian says.
ACN shares last traded in October at AUD3.43, a record high, but
have been suspended ever since, the report notes.
In a statement, ACN chief executive Ivan Brown said the company
"anticipates every effort will be made by the voluntary
administers to protect stakeholder interests by ensuring that all
avenues are pursued to recover outstanding monies owed . . . by
federal and state agencies," adds The Australian.
CONSOLIDATED GLOBAL: First Creditors' Meeting Set For April 1
-------------------------------------------------------------
Timothy MS Holden of Foremans Business Services was appointed as
administrator of Consolidated Global Investments Limited on
March 18, 2016.
A first meeting of the creditors of the Company will be held at
Foremans Business Services, 314A Bay Road, in Cheltenham,
Victoria, on April 1, 2016, at 1:30 p.m.
DICK SMITH: Workers Uncertain Over Future
-----------------------------------------
The Sydney Morning Herald reports that Dick Smith workers say they
are stuck in employment purgatory, unable to move on with their
careers until told exactly when the collapsed retailer's stores
will close.
According to SMH, The chain is about half way through an eight-
week fire sale, with receiver Ferrier Hodgson suggesting all
stores will close their doors around the end of April. But
uncertainty has taken a toll on workers, who say they cannot find
new jobs without knowing when Dick Smith will terminate them as
they will potentially be giving up thousands of dollars in
entitlements.
SMH says frustration boiled over at a store in Melbourne's east
last week, with employees erecting signs telling customers they
did not know when the store would close.
When are we closing? How long is a piece of string?" read one of
the signs, which a customer photographed and posted on social
media website Reddit, according to SMH.
"Most of us have not found jobs yet so feel free to recommend us
to anyone you might know that has something going," read another.
SMH relates that a full-time Dick Smith employee from another
store, who asked not to be identified, said he started hunting for
a new job but was hamstrung by not knowing when his store would
close.
"The problem is because we haven't received our notice of
redundancy, and without a notice of redundancy you basically void
your entitlements [if you leave]," he said, notes the report.
"I would only take a new job if they were willing to wait until
Dick Smith closes, because I'm not missing out on potentially
thousands of dollars of redundancy."
According to SMH, a spokeswoman for Ferrier Hodgson said employees
would receive redundancy notices and final work dates "closer to
the closure date of their store".
The worker said this had left him and his colleagues with feelings
of "disappointment, uncertainty and frustration," SMH relays.
He said Dick Smith had to give him four weeks' notice if made
redundant, but he expected to be told just days before his store
closed. That is what happened at Dick Smith's Move airport stores
and David Jones concession stores when they closed, according to
SMH.
SMH relates that a spokeswoman for Ferrier Hodgson said it
anticipated the current stock sale to generate enough cash to pay
all workers their entitlements.
"Employee entitlements are priority claims that rank ahead of the
secured and unsecured creditors and are expected to be paid in
full," the spokeswoman, as cited by SMH, said. "The timing of the
individual store closures will be dependent on the outcome of the
stock realisation sale. Not all stores are expected to close on
the same date."
SMH relates that the spokeswoman said workers would be paid the
equivalent of their full notice period regardless of when they
were told their store was closing.
"The receivers are endeavouring to provide employees with as much
notice as possible of the exact date that their store will close,"
she said, notes the report.
On March 21 the Australian Securities and Investments Commission
said it would investigate why Dick Smith collapsed, SMH discloses.
SMH relates that ASIC chairman Greg Medcraft said there were
issues of "administered trust and confidence".
About Dick Smith
Dick Smith Holdings Limited Ltd (ASX:DSH) --
http://dicksmithholdings.com.au/-- is a retailer of consumer
electronics products. The Company sells a range of products across
four categories: office, mobility, entertainment, and other
products and services. The Company has two segments: Dick Smith
Australia and Dick Smith New Zealand. The Company connects with
its customers through four physical store formats, catering for
three distinct consumer demographics: Dick Smith, MOVE, David
Jones Electronics Powered by Dick Smith and MOVE by Dick Smith
Sydney International Airport. The Company's store network consists
of approximately 393 stores across Australia and
New Zealand, which include approximately 351 Dick Smith stores,
approximately 10 MOVE stores, approximately four MOVE by Dick
Smith stores and approximately 28 David Jones Electronics Powered
by Dick Smith stores.
As reported in the Troubled Company Reporter-Asia Pacific on
Jan. 6, 2016, Dick Smith Holdings Ltd was placed in receivership
on Jan. 5 following the appointment of Voluntary Administrators.
Ferrier Hodgson partners Mr James Stewart, Mr Jim Sarantinos and
Mr Ryan Eagle were appointed Receivers and Managers over DSH and
an number of associated entities. The appointment was made by a
syndicate of lenders which hold security over the group.
E GLOBAL: First Creditors' Meeting Set For March 30
---------------------------------------------------
Brendan Nixon at Stanley Morgan Accountants was appointed as
administrator of E Global Consulting Pty Ltd on March 18, 2016.
A first meeting of the creditors of the Company will be held at
Stanley Morgan Accountants, Level 8/490 Upper Edward Street, in
Spring Hill, Queensland, on March 30, 2016, at 11:00 a.m.
GLOBAL CONSTRUCTIONS: First Creditors' Meeting Set For March 30
---------------------------------------------------------------
Robert Allan Jacobs of Auxilium Partners was appointed as
administrators of Global Constructions Australia Pty Ltd on
March 15, 2016.
A first meeting of the creditors of the Company will be held at
Auxilium Partners, Level 3, 1060 Hay Street, in West Perth, on
March 30, 2016, at 2:00 p.m.
QUEENSLAND NICKEL: Workers Hope to Take Control of Business
-----------------------------------------------------------
Tony Raggatt at The Courier-Mail reports that retrenched employees
behind a creditor-worker buyback plan for collapsed Yabulu nickel
refinery are continuing to work on a proposal to take control of
the business.
This is despite analysis suggesting they have no prospect of
success and that the plant is a relic of the 1970s, the report
says.
Also, economist Warwick Powell, who is helping the buyback and was
named this week as a former Australian Workers' Union foot soldier
involved in Labor Party electoral fraud in the 1990s, said he was
ignoring the politics, The Courier-Mail relates.
"What we are concentrating on is preparing a Deed of Company
Arrangement and preparing a financial business model," The
Courier-Mail quotes Mr. Powell as saying.
The Courier-Mail says the buyback consortium will be competing
with refinery owner Clive Palmer, the only other party who has
indicated an intention to submit a deed proposal.
Gavin Mudd, a Monash University environmental engineer with
experience in mineral processing, said that the refinery was
clearly an expensive and energy-intensive producer, adds The
Courier-Mail.
Queensland Nickel operates the Palmer Nickel and Cobalt Refinery
in Queensland, Australia. Queensland Nickel directors appointed
John Park, Stefan Dopking, Kelly-Anne Trenfield and Quentin Olde
of FTI Consulting as voluntary administrators on Jan. 18, 2016.
* AUSTRALIA: SMEs at Risk of Closure on Woolworths Payment Terms
----------------------------------------------------------------
SmartCompany reports that the small business community is furious
at the prospect of Woolworths moving towards paying the majority
of its suppliers within 60 days, despite the supermarket giant
demanding its own debtors cough up cash within a 30-day period.
According to SmartCompany, Fairfax said Woolworths has tasked an
internal team with the job of reviewing suppliers still on 30-day
contract terms.
The retail giant has said the move is to "simplify" its internal
processes given a large number of suppliers are already on 60-day
terms. However, Peter Strong, chief executive of the Council of
Small Business of Australia, told SmartCompany the changes could
mean some Woolworths suppliers will soon have to go an extra month
without getting paid.
SmartCompany relates that Mr. Strong said this kind of disruption
to cashflow is highly damaging for any business, but particularly
a small business.
"They are using small businesses as their bank," SmartCompany
quotes Mr. Strong as saying. "This shows their own lack of
understanding of the world beyond Woolworths. These are people who
need to put food on the table. And it's putting companies at risk
of closure because they can't pay their bills, even though they've
done the work."
According to the report, Mr. Strong said he knows firsthand how
stressful it can be when invoices are not paid within a short
timeframe.
To make matters worse, the COSBOA chief executive says Woolworths
demands stricter deadlines from its own debtors, the report
relays.
"It's extremely stressful [for small business owners] as there's
other people on your back saying 'where's my money?'," Mr. Strong
told SmartCompany. "All of a sudden, it goes down the supply chain
-- but they [Woolworths] don't seem to care. This is a real
problem."
SmartCompany recalls that Woolworths announced in June last year
it was signing up to the Food and Grocery Code of Conduct.
The code of conduct states retailers must pay suppliers within a
"reasonable" timeframe or a time previously agreed to, the report
discloses.
A spokesperson for Woolworths told SmartCompany the supermarket
has had 60-day terms for "many years".
"Sixty-day terms are not new both at Woolworths and in the broader
industry," the spokesperson told SmartCompany. "We have a number
of suppliers who mainly for legacy reasons have different terms.
We are always looking to simplify our arrangements so have been
negotiating with some suppliers to move to our standard terms."
===================
B A N G L A D E S H
===================
EASTERN BANK: Moody's Assigns Ba3 Issuer Ratings, Outlook Stable
----------------------------------------------------------------
Moody's Investors Service has assigned these first-time ratings to
the Bangladesh-based Eastern Bank Limited:
Global local and foreign currency issuer ratings of Ba3/NP;
Local and foreign currency deposit ratings of Ba3/NP;
A standalone baseline credit assessment (BCA) of b1; and
An adjusted BCA of b1
The ratings outlook is stable.
Moody's has also assigned a Counterparty Risk Assessment (CR
Assessment) of Ba3(cr)/NP(cr) to the bank.
RATINGS RATIONALE
The Ba3 long-term ratings assigned to Eastern Bank incorporate its
BCA of b1 and a one notch uplift to reflect Moody's assumption of
moderate systemic support to the bank in case of stress.
Eastern Bank is a corporate-focused bank, with around a 2%-3%
share of total loans in the domestic market. Its key credit
strengths comprise its profitability profile, strong balance sheet
buffers and record of good asset quality. On the other hand, its
liquidity profile is weak.
The bank's asset quality has been consistently better than its
peers, as measured by gross non-performing loans (NPLs). However,
as is the case with other banks in the system, Eastern Bank has
seen a pickup in its NPL ratio since 2011.
Moody's notes that in the case of Eastern Bank, its rise in NPLs
has consistently registered at lower levels than its peers.
Importantly, asset quality is stabilizing, with a better
performance during the nine months to Sept. 30, 2015, when
compared to the same period in 2014.
The bank's reported core Tier 1 ratio was at 10.2% at end-2014,
and its loan loss coverage stood at 109% at 30 September 2015.
The bank should be able to maintain its Tier 1 ratio at current
levels, because it can support loan growth with retained earnings.
However, management's aim of maintaining a high payout ratio could
limit improvements to the Tier 1 ratio.
Eastern Bank's profitability metrics are healthy, its net interest
margins (NIMs) are high on an absolute basis, but the persistently
low inflation rates in Bangladesh (Ba3 stable) could lead to lower
interest rates and downward margin pressure.
The bank's liquidity profile is weak. It has consistently
demonstrated one of the highest loan-to-deposit ratios among its
domestic peers, leading to the weakness in its liquidity profile.
Eastern Bank is primarily retail deposit funded, with around 65%
of its deposits from its retail segment.
Moody's assumption of a moderate level of systemic support for
Eastern Bank reflects the bank's modest 2%-3% share of system
advances and deposits in a fragmented banking system, as well as
the country's central bank's -- Bangladesh Bank's -- record of
providing regulatory support to the banking system.
Moody's assessment of systemic support results in a one-notch
uplift to Eastern Bank's ratings to Ba3, a result which is higher
than the bank's BCA of b1.
COUNTERPARTY RISK ASSESSMENT
Eastern Bank's CR Assessment is positioned at Ba3(cr)/NP(cr).
Such assessments are opinions of how counterparty obligations are
likely to be treated if a bank fails and relates to a bank's
contractual performance obligations (servicing), derivatives
(e.g., swaps), letters of credit, guarantees and liquidity
facilities. Senior obligations represented by the CR Assessments
will be more likely preserved to limit contagion, minimize losses
and avoid disruption of critical functions.
What Could Change the Rating Up/Down
An improvement in the bank's asset quality -- to levels better
than Moody's expects -- which in turn leads to higher
profitability by way of lower credit costs, could provide upward
pressure on the ratings.
The bank shows a significant borrower concentration. If some of
the large accounts turn into NPLs, Eastern Bank's NPL ratios will
deteriorate materially, thereby putting downward pressure on the
ratings.
Moreover, a decline in its net interest margins to levels lower
than Moody's expects will lead to a reduction in profitability and
put downward pressure on the bank's ratings.
A summary of Eastern Bank's first-time ratings as assigned by
Moody's is:
-- Ba3 local currency and foreign currency long-term deposit
ratings; outlook stable
-- Ba3 local currency and foreign currency long-term issuer
ratings; outlook stable
-- b1 BCA and b1 adjusted BCA
-- Ba3(cr)/NP(cr) long-term and short term counterparty risk
Assessments
-- NP local currency and foreign currency short-term deposit
ratings
-- NP local currency and foreign currency short-term issuer
Ratings
The principal methodology used in these was Banks published in
January 2016.
Headquartered in Dhaka, Eastern Bank Limited's consolidated assets
totaled BDT173 billion (approximately $2.2 billion) at Dec. 31,
2014.
=========
C H I N A
=========
CHINA SCE: Moody's to Retain B1 CFR on Modest 2015 Results
----------------------------------------------------------
Moody's Investors Service says that China SCE Property Holdings
Limited's modest 2015 results will not immediately affect its B1
corporate family rating, B2 senior unsecured rating, or the stable
outlook on the ratings.
"China SCE's 2015 results were weak for its ratings, but its
strong sales growth and improved liquidity profile continued to
support its ratings," says Franco Leung, a Moody's Vice President
and Senior Analyst, and also the International Lead Analyst for
China SCE.
China SCE's strong contracted sales performance, which grew 22%
year-on-year to RMB14.5 billion during 2015, strengthened the
company's liquidity position. Its cash to short-term debt
improved to 163% at end-2015 from 128% at end-2014.
However, China SCE's EBIT interest coverage weakened slightly to
2.4x in 2015 from 2.5x in 2014 mainly due to a contraction in
gross profit margin, despite a strong year-on-year revenue growth
of 55% to RMB10.7 billion in 2015.
China SCE's gross profit margin weakened notably to 28.2% in 2015
from 34.9% in 2014, primarily due to the recognition of mid-end
products with relatively lower gross profit margin and the
properties that were sold at reduced prices during the property
downcycle in 2014.
Moody's expects the company's EBIT interest coverage to recover to
2.6x-2.8x in 2016, based on Moody's expectation of the company's
continued revenue growth, stable gross profit margins, and lower
funding costs. Such a level of EBIT interest coverage would be
appropriate for China SCE's ratings categories.
The company's strong contracted sales growth in 2015 will support
its revenue growth over the next 12-18 months. In the two months
between January and February 2016, it achieved contracted sales of
RMB2.6 billion.
Moody's expects that the company's gross profit margin in 2016
will stabilize at levels seen in 2015. The pressure from rising
land costs can be partly mitigated by the improvement in its
average selling price (ASP) in 2015. The company's ASP for
contracted sales in 2015 was at RMB11,632 per square meter (sqm)
versus RMB9,128 per sqm in 2014.
China SCE has also actively managed down its financing costs by
issuing onshore corporate bonds and offshore syndicated loans at
lower-cost and over a longer term.
During the six months between July and December 2015, the company
issued a total of RMB3.5 billion in onshore corporate bonds, with
interest rates of 5.18%-5.3%. These bonds can help the company
refinance its high-cost trust loans and perpetual securities. The
company also obtained a USD400 million offshore syndicated loan at
LIBOR+4.2% to redeem its USD350 million 11.5% notes in January
2016.
"China SCE's land acquisitions will likely increase in 2016, and
its debt levels will rise moderately," says Cindy Yang, a Moody's
Analyst, and also the Local Market Analyst for China SCE.
Moody's says China SCE demonstrated prudence in its land
acquisitions during 2015. In particular, it purchased six plots
of land for a total consideration attributable to the company of
RMB3.6 billion, an amount which was equivalent to around 25% of
its total contracted sales.
However, Moody's expects that the company will step up its land
acquisitions in 2016, expanding its presence in Tier-1 and strong
Tier-2 cities. In February 2016, China SCE acquired a plot of
land in Mentougou, Beijing for a total consideration of RMB3.95
billion.
Its adjusted debt -- including perpetual securities and a
guarantee provided for a joint venture -- increased to RMB17.7
billion at end-2015 from RMB15.1 billion at end-2014, and its debt
leverage -- as measured by revenue/adjusted debt -- was at 60% for
the fiscal year ended Dec. 31, 2015, improving from 46% at end-
2014, but still relatively weak for its current ratings.
Moody's estimates that China SCE's adjusted debt will increase
moderately to around RMB20 billion by end-2016 to meet the funding
needs for construction and land acquisition activities.
Accordingly, its revenue/adjusted debt will likely stay at around
60% over the next 12-18 months.
The company's liquidity position is adequate. Its cash balance of
RMB6.2 billion at end-2015 together with its operating cash flow
will be sufficient to cover its short-term debt of RMB3.8 billion
and committed land premiums in 2016.
The principal methodology used in these ratings was Homebuilding
And Property Development Industry published in April 2015.
Founded in 1996, China SCE Property Holdings Limited is a leading
property developer in China's Fujian Province. The company has
also expanded into Shanghai, Shenzhen, Nanchang and cities around
the Bohai Rim region, including Beijing, Tianjin, Anshan (Liaoning
Province), Langfang (Hebei Province), and Linfen (Shanxi
Province), but the majority of its development projects are in
Fujian Province.
The company listed on the Hong Kong Stock Exchange in February
2010, and is 57.6% owned by its chairman, Mr. Wong Chiu Yeung.
NEXTEER AUTOMOTIVE: 2015 Results Supports Moody's Ba1 CFR
---------------------------------------------------------
Moody's Investors Service says that Nexteer Automotive Group
Limited's improved financial results for 2015 support its Ba1
corporate family rating and senior unsecured debt rating as well
as the stable rating outlook.
"Nexteer's healthy revenue growth, improved EBITA margin and lower
debt leverage in 2015 are in line with our expectations," says
Gerwin Ho, a Moody's Vice President and Senior Analyst.
The company's revenue grew 13% year-on-year in 2015 to USD3.4
billion on the back of 20% year-on-year revenue growth from its
electric power steering (EPS) product, which accounted for about
60% of the company's revenue.
The company's adjusted EBITA margin also improved to about 8.4%
from 5.9%, benefitting from gross margin expansion as a result of
an improved product mix.
The increase in earnings and decline in debt helped improve
Nexteer's debt/EBITDA to about 1.8x in 2015 from 2.9x in 2014.
This level of debt leverage positions the company at the stronger
end of the Ba1 rating.
Looking ahead, Moody's expects Nexteer's annual revenue to grow by
high-single digits over the next 12-18 months. This is based upon
continued favourable growth in EPS revenue, supported by strong
demand for fuel efficiency improvements in new auto models and
further penetration of EPS to developing auto markets such as
China (Aa3 negative) and Brazil (Ba2 negative).
Moody's also expects Nexteer to maintain its EBITA margin at
current levels as it expands the scale of its operations and
continues with cost improvements to counter the impact of price
reduction demands from automakers.
Moody's expects Nexteer's adjusted debt/EBITDA to improve to about
1.5x-1.7x over the next 12-18 months.
In addition, Nexteer has made progress in reducing concentration
risk in geography and clients.
The company's revenue from North America declined to 66% in 2015
from 69% in 2014, while revenue from China rose to 22% in 2015
from 16% in 2014.
Nexteer also reduced its revenue from General Motors Company (GM,
senior unsecured bank credit facility Baa3 positive) and its
affiliates to 48% in 2015 from 54% in 2014 by expanding its
revenue contribution from other customers.
The principal methodology used in these ratings was Global
Automotive Supplier Industry published in May 2013.
Headquartered in Saginaw, Michigan, and listed on the Hong Kong
Stock Exchange in October 2013, Nexteer Automotive Group Limited
manufactures steering and driveline systems. The company has
manufacturing plants across North and South America, Europe and
Asia.
On Nov. 24, 2015, Nexteer was 67.3%-owned by Pacific Century
Motors, Inc. (unrated), which is in turn 51%-owned by AVIC
Automotive Systems Holding Co., Ltd. (AVIC Auto, unrated), and 49%
owned by Beijing E-Town International Investment & Development Co.
Ltd. (Beijing E-Town, unrated), which is controlled by Beijing's
municipal government.
AVIC Auto is wholly owned by Aviation Industry Corporation of
China (unrated), a Chinese central government owned enterprise.
WEST CHINA: Weaker Operations Outweighed by Takeover, Fitch Says
----------------------------------------------------------------
Fitch Ratings believes West China Cement Limited's (WCC, BB-,
Rating Watch Positive) weaker operations -- as reflected in the
2015 results -- is outweighed by its pending takeover by Anhui
Conch Cement Company Limited (Conch, A-/Stable). Fitch's Rating
Watch Positive on WCC is driven by the potential further
integration between Conch and WCC, which will be resolved once the
transaction is completed.
WCC's performance in 2015 was a reflection of the weak cement
market throughout the year. Its EBITDA margin narrowed to 26.6%
in 2015 from 27.8% in 2014, caused by a lower average selling
price (ASP) and production volume, which have declined by 9% and
3% to CNY200/ton and 17 million tons, respectively. The ASP of
Shaanxi province-wide cement declined by 8%, and production volume
was down by 4%. WCC's market share in Shaanxi has remained
unchanged. Fitch expects WCC's ASP and volume to remain flat in
2016 due to the market weakness, but for the EBITDA margin to
improve slightly due to cost-synergies deriving from the
integration with Conch.
Fitch estimates that WCC's FFO net leverage increased to 4.2x in
2015 from 3.5x in 2014 - caused by lower profitability, high capex
and longer cash cycle. WCC spent CNY767m in acquiring Yaowangshan
Cement (a cement plant in Shaanxi) in November 2015. In addition,
the company's cash cycle has extended from -6 days to 18 days, due
to longer inventory and receivable days, which increased working-
capital requirements.
WCC's credit profile in 2016 will be driven more by its pending
acquisition by Conch. Conch acquired 16.67% of WCC for HKD1.5 bil.
(CNY 1.2 bil.) in June 2015, and became WCC's second-largest
shareholder. After that, Conch increased its shareholding to
21.2%, and has placed two non-executive directors on WCC's board.
Conch announced in December 2015 that it would increase its
ownership to 51.6% by injecting four of its plants in Shaanxi into
WCC. Once the acquisition is complete, Conch will have to make a
mandatory unconditional cash offer for the remaining WCC shares.
The acquisition was approved by the shareholders in January 2016,
but still pending regulatory approval.
Once Conch injects its four plants in Shaanxi into WCC, WCC's
market share will improve to 40%-50%, well above the second-place
operator Jidong Cement, which had a 23% market share in 2015.
This will significantly improve WCC's pricing power even in a
depressed demand environment. Fitch believes the stronger
business profile compensates for the structurally weaker demand
for cement in the long term.
Future rating action will be determined by the degree of
integration between Conch and WCC. If WCC continues to operate
independently with its own brand and operational and financial
management, we would be likely to apply the bottom-up approach of
the criteria - with WCC's rating uplifted by one or more notches.
The uplift will be higher if WCC is more integrated into Conch,
for instance, if Conch refinances WCC's debt with its own cheaper
borrowing.
=========
I N D I A
=========
AARVEE COLD: Ind-Ra Assigns BB+ LT Issuer Rating; Outlook Stable
----------------------------------------------------------------
India Rating and Research (Ind-Ra) has assigned Aarvee Cold Chain
Logistics Private Limited (ACCL) a Long-Term Issuer Rating to 'IND
BB+'. The Outlook is Stable. Ind-Ra has also assigned the
company's INR120.00 mil. long-term loans an 'IND BB+' rating with
a Stable Outlook.
KEY RATING DRIVERS
The ratings reflect ACCL's lack of operational track record and
the likelihood of a gap in debt service (from rental income) in
the interim. The cold storage building was leased to Snowman
Logistics Limited ('IND A+'/Stable) in December 2015. The
interest payment on the term debt started in December 2015.
The lease agreement stipulates a phased handover of the building
which leads to a gradual increase in rental receipts. This may
put pressure on debt service during the first few months as rental
income will fall short of debt service requirement. The interest
earned on the rental advance received from the lessee will be used
to support debt service. Aarvee had made a fixed deposit of the
INR42.5 mil. rental advance at a 9% interest rate payable monthly.
The ratings benefit from Aarvee's comfortable debt service
coverage ratio (minimum of 1.15x over the term of the lease),
strong escrow arrangement with a bank for the repayment of term
loans, lock-in period of 10 years with the lessee with a strong
termination clause which protects debt service.
RATING SENSITIVITIES
Negative: Any debt-led capex leading to stress on debt service
will be negative for the ratings.
Positive: Timely collection of lease rentals leading to timely
debt service and rent escalation leading to an improvement in debt
service coverage ratio will be positive for the ratings.
COMPANY PROFILE
Aarvee has leased its cold chain building in Pune to Snowman
Logistics. The company claims to have handed over 80% of the
building to the lessee as against the stipulation of a minimum of
60% by February 2016.
ACCORD COMMUNICATIONS: CARE Reaffirms B- Rating on INR5.24cr Loan
-----------------------------------------------------------------
CARE reaffirms the ratings assigned to the bank facilities of
Accord Communications Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 5.24 CARE B- Reaffirmed
Short term Bank Facilities 2.00 CARE A4 Reaffirmed
Rating Rationale
The ratings assigned to the bank facilities of Accord
Communications Limited (ACL) continue to remain constrained by the
small scale of operations continuous erosion in its net-worth, low
profitability margins and the working capital-intensive nature of
operations. The ratings are further constrained by its presence in
an unorganized market and stiff competition from many small
players.
The ratings, however, continues to take comfort from the vast
experience of the promoters in the existing line of business.
Going forward, the ability of ACL to improve the overall financial
risk profile would be the key rating sensitivity.
ACL was incorporated in 1990 by Mr P.K. Mohta, Mr A.K. Mohta, Mrs
Sushma Mohta and Mrs Shailly Mohta who have an experience of over
two decades in the manufacturing of EPABX system industry. ACL is
engaged in designing, manufacturing and marketing of Electronic
Private Automatic Branch Exchange (EPABX) systems. Apart from
manufacturing, the company is also engaged into the trading of
EPABX systems, intercom, phone and phone accessories.
The manufacturing facility of ACL is located in Meerut, UP, with
an installed capacity of 20,000 units as on March 31, 2015, for
EPABX systems. The manufacturing process of ACL is ISO 9001
certified. The main customers of ACL are government agencies like
CRPF, BSF, Northern Command, etc. The raw material includes IC
(Integrated circuit), PCB (Printed circuit board), transformers,
capacitors, resistance, etc, which is procured from Delhi,
Haryana, Bangalore, etc.
CLD Electronics & Communication and Digital Electronics & Telecom
are associate concern of ACL which are engaged in the
manufacturing spare parts for mobile phone.
ACL achieved a total operating income (TOI) of INR15.61 crore with
net loss of INR1.72 crore, in FY15 (refers to the period April 1
to March 31) as against TOI of INR21.40 crore with PAT of INR0.09
crore, respectively, in FY14. During 9MFY16, the company has
achieved a total operating income of INR12.00 crore.
AMLAGORA COLD: CARE Reaffirms 'B' Rating on INR6.25cr LT Loan
-------------------------------------------------------------
CARE reaffirms the ratings assigned to the bank facilities of
Amlagora Cold Storage Pvt. Ltd.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 6.25 CARE B Reaffirmed
Short-term Bank Facilities 0.18 CARE A4 Reaffirmed
Rating Rationale
The ratings of Amlagora Cold Storage Pvt. Ltd. (ACSPL) continue to
remain constrained by small scale of operation, highly regulated
industry, competitive scenario, risk of delinquency in loans
extended to farmers, leveraged capital structure, power supply
issues, dependence on the vagaries of nature & seasonality of
business.
The ratings, however, continue to draw comfort from its
experienced management, long track record of operations and
proximity to potato-growing areas.
The ability of the company to further grow its scale of operations
along with improvement in profitability margins and manage its
working capital requirements efficiently shall remain the key
rating sensitivities.
ACSPL, was incorporated in February 28, 1967, by Mr Ramdhone Dey
of Amlagora, West Bengal, to set up a cold storage facility.
Subsequently, in 2006, the company was acquired by Mr Rabindranath
Chatterjee & his family members to carry out the same business.
The company is engaged in the business of providing cold storage
facility for potatoes to local potato farmers and traders on a
rental basis, having a storage capacity of 302,431 quintals of
potatoes in Paschim Medinipur district of West Bengal. Besides
providing cold storage facility, the company also works as a
mediator between the farmers and marketers of potato by taking
advances from marketers on behalf of the farmers in order to
facilitate sale of potato stored and it also provides interest
bearing advances to farmers for farming of potato against potato
stored. This apart it also provides additional services to farmers
such as insurance of potatoes stored & drying of potatoes.
During FY15 (refers to the period April 1 to March 31), ACSPL had
reported a total operating income of INR288.10 lakh (as against
INR332.36 lakh in FY14) and PAT of INR4.99 lakh (as against
INR5.17 lakh in FY14). Furthermore, in 10MFY16, the management has
maintained to have achieved a turnover of INR300.00 lakh.
ASAN MEMORIAL: CARE Reaffirms 'D' Rating on INR8.38cr LT Loan
-------------------------------------------------------------
CARE reaffirms the ratings assigned to bank facilities of Asan
Memorial Association.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 8.38 CARE D Reaffirmed
Rating Rationale
The ratings assigned to the bank facilities of Asan Memorial
Association (AMA) factors in the ongoing delays in servicing the
debt obligations of the society owing to the tight liquidity
position arising out of delays in fees collections.
AMA was founded on October 18, 1965, by Mr A. K Gopalan and
registered under the Societies' Registration Act XXI of 1860. The
main objective of AMA was to promote interest in Malayalam
literature and render educational services. AMA manages nine
educational institutions at various locations at Chennai and
Chengelpet in Tamil Nadu, comprising one engineering college, two
management colleges, arts & science college, three schools as well
as a dental college and hospital.
AMA has recorded a loss of INR2.02 crore on a total income of
INR32.71 crore in FY15 (refers to the period April 1 toMarch 31)
as compared with a PAT of INR16.09 crore on a total income of
INR28.70 crore in FY14.
BABOO RICE: CRISIL Suspends B Rating on INR70MM Cash Loan
---------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of
Baboo Rice and General Mills (BRGM).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 70 CRISIL B/Stable
Export Packing Credit 10 CRISIL B/Stable
Proposed Export
Packing Credit 16 CRISIL A4
Proposed Long Term
Bank Loan Facility 4.5 CRISIL B/Stable
Term Loan 4.5 CRISIL B/Stable
Warehouse Receipts 15 CRISIL B/Stable
The suspension of ratings is on account of non-cooperation by BRGM
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, BRGM is yet to
provide adequate information to enable CRISIL to assess BRGM'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 1978 and located at Amritsar (Punjab), by Mr. Vijay
Kumar Sethi and his brother Mr. Surinder Sethi, BRGM is a
partnership firm that processes basmati rice.
BEARDSELL LIMITED: CRISIL Reaffirms FB+ Fixed Deposit Rating
------------------------------------------------------------
CRISIL's rating on the fixed deposits of Beardsell Limited
(Beardsell) continues to reflect its moderate financial risk
profile and operating efficiencies, susceptibility of its
operating margins to volatility in raw material prices and intense
competition in the industry.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Fixed Deposit Programme 50 FB+/Stable (Reaffirmed)
These rating weaknesses are partially offset by the benefits
derived from the extensive industry experience of its promoters,
and its long standing customer relationships.
Outlook: Stable
CRISIL believes Beardsell will continue to benefit from the
extensive industry experience of its promoters. The outlook may be
revised to 'Positive' if the company diversifies and scales up its
operations and sustainably improves its profitability, while
maintaining its capital structure. Conversely, the outlook may be
revised to 'Negative' if Beardsell's financial risk profile
weakens because of a significant decline in operating margin and
revenues; or if the company undertakes a large, debt-funded
capital expenditure (capex) programme or in case of deterioration
in its liquidity because of a stretch in its working capital
cycle.
Based in Chennai (Tamil Nadu) and incorporated in 1936, Beardsell
is engaged in manufacturing of polystyrene sheets and
prefabricated panels. The day-to-day operations of the company are
managed by Mr.Bharat Anumolu. The company is listed on the
National Stock Exchange (NSE) and Bombay Stock Exchange (BSE).
Beardsell reported a net loss of INR0.9 million on net sales of
INR1.3 billion for 2014-15 (refers to financial year, April 1 to
March 31), vis-a-vis a PAT (profit after tax) of INR13 million on
net sales of INR1.1 billion for 2013-14. The company reported, on
a provisional basis, a PAT of INR20.5 million on net sales of
INR1.03 billion for the nine months ended December 2015.
BHOOMIDHAN COLD: CRISIL Assigns B Rating to INR46MM Term Loan
-------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable' rating to the long-term
bank loan facilities of Bhoomidhan Cold Storage (BCS). The rating
reflects BCS's early stage and expected modest scale of operations
in the highly fragmented agriculture industry. The rating also
factors in average financial risk profile because of modest
capital structure. These weaknesses are mitigated by the
promoter's experience in the agriculture related industry.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 46 CRISIL B/Stable
Cash Credit 24.5 CRISIL B/Stable
Proposed Long Term
Bank Loan Facility 29.5 CRISIL B/Stable
Outlook: Stable
CRISIL believes BCS will benefit over the medium term from its
promoter's experience, and moderate financial risk profile. The
outlook may be revised to 'Positive' if scale of operations and
profitability increase significantly, improving cash accrual and
debt protection metrics. Conversely, the outlook may be revised to
'Negative' if profitability declines steeply because of intense
competition, or substantial capital withdrawal by promoter or
large working capital requirement weakens capital structure.
BCS is a cold storage chain providing cold storage facilities for
various vegetables. It will become operational in March 2016 and
will be managed by Mr. Amrutlal Parmar. BCS is based in Dantiwada,
Gujarat and has four chambers in its cold storage.
BYREDDY VISHNUVARDHAN: CARE Reaffirms B+ Rating on INR6.5cr Loan
----------------------------------------------------------------
CARE reaffirms the rating assigned to the bank facilities of
Byreddy Vishnuvardhan Reddy.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 6.50 CARE B+ Reaffirmed
Rating Rationale
The rating assigned to the bank facilities of Byreddy
Vishnuvardhan Reddy (BVR) continues to remain constrained by the
relatively small scale of operation, declining profitability
margins, highly leveraged capital structure, moderate debt
coverage indicators and constitution of entity being a
proprietorship concern. The rating, however, derives strength from
long experience of the proprietor for more than two decades in the
industry, growth in the total operating income in FY15 (refers to
the period April 1 to March 31) and improvement in working capital
cycle during the year.
The ability of the firm to improve the profitability margins,
leverage indicators and working capital cycle are the key rating
sensitivities.
Kurnool-based BVR was established by an engineering graduate, Mr
Byreddy Vishnu Vardhan Reddy in the year 1996 as a proprietorship
concern. The firm is engaged in civil construction works such as
laying roads and irrigation works for government organizations
covering Road & Buildings Department (R&B) and Panchayat Raj which
are procured through tenders. Mr Byreddy Vishnu Vardhan Reddy is a
Class I contractor and has experience of more than two decades in
civil contract works. The firm has executed several contracts
since its inception and currently has an order book worth around
INR18 crore as on March 03, 2016, to be executed by August 2016.
During FY15, BVR has reported a PAT of INR0.73 crore on a total
operating income of INR13.99 crore as against a PAT of INR0.61
crore on a total operating income of INR10.07 crore in FY14.
DELTA JEWELLERS: Ind-Ra Assigns BB Rating to INR70MM Loan
---------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Delta Jewellers
Pvt Ltd's (DJPL) additional INR30 mil. fund-based limits an 'IND
A4+' rating.
DJPL's outstanding ratings (including the above) are:
-- Long-Term Issuer Rating: 'IND BB'; Outlook Stable
-- INR70 mil. fund-based limits: 'IND BB'/Stable
-- INR30 mil. fund-based limits: 'IND A4+'3
DGP STEEL: CRISIL Lowers Rating on INR40MM Bank Loan to 'D'
-----------------------------------------------------------
CRISIL has downgraded its ratings on the bank facilities of
DGP Steel Star Engineering Private Limited (DGP) to 'CRISIL
D/CRISIL D' from 'CRISIL B-/Stable/CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 40 CRISIL D (Downgraded from
'CRISIL A4')
Cash Credit 20 CRISIL D (Downgraded from
'CRISIL B-/Stable')
Proposed Long Term 2.5 CRISIL D (Downgraded from
Bank Loan Facility 'CRISIL B-/Stable')
Term Loan 5 CRISIL D (Downgraded from
'CRISIL B-/Stable')
The rating downgrade reflects delays by the company in servicing
of its term debt; the delays were caused by weak liquidity.
DGP has a small scale, and working capital-intensive nature, of
operations. However, it benefits from the extensive experience of
its promoters in the industrial construction industry.
DGP was originally set up in 1973 as a proprietorship firm. In
1990, the firm was reconstituted as a corporate entity. It
primarily undertakes industrial construction, including
construction of industrial buildings, setting up and commissioning
of industrial machinery and equipment such as boilers in power
plants, and fabrication and erection of rolling mill structures.
The company's operations are managed by its current promoter-
director, Mr. P S Mukherjee.
EASTMAN RECLAMATIONS: CARE Assigns B+ Rating to INR7.60cr LT Loan
-----------------------------------------------------------------
CARE assigns CARE B+/CARE A4 ratings to the bank facilities of
Eastman Reclamations.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 7.60 CARE B+ Assigned
Short term Bank Facilities 3.55 CARE A4 Assigned
Rating Rationale
The ratings assigned to the bank facilities of Eastman
Reclamations (ER) are constrained by short track record
of operations with small scale of operations and weak solvency
position. The ratings are further constrained by the working
capital intensive nature of operations, susceptibility of
profitability margins to raw material prices & foreign exchange
fluctuations and constitution of the entity as a partnership firm.
The ratings, however, derive strength from the experienced
promoters, association with reputed client base and increasing
scale of operations. Going forward, the ability of the entity to
profitably scale up its operations, improve the overall solvency
position and manage the working capital requirements efficiently
will remain the key rating sensitivities.
Established in 2012, Eastman Reclamations (ER) is a Kathua, Jammu
and Kashmir (J &K) based partnership firm, currently being managed
by Mr. Nippun Jain and Mrs. Swarn Prabha Jain, sharing profit and
loss in the ratio 60:40. The firm started its commercial
operations in Jan-13. ER is engaged in the manufacturing of
reclaimed rubber (recycled rubber) and rubber compounds (rubber
tyres and tubes) of various types and sizes. The main raw material
of the firm includes used rubber and various chemicals such as
carbon, tyre cord, etc. ER sells, its finished products (reclaimed
rubber) to reputed clients as Hero Cycles Limited, Ludhiana, Metro
Tyres Limited and Hindustan Tyres Company, etc. The associate
concerns of ER include Kohinoor Reclamations (KR; established in
2011, CARE B+/A4) and Kohinoor India Private Limited (KIPL;
established in 1970) engaged in the similar line of business.
ER registered a total operating income of INR19.03 crore during
FY15 (refers to the period of April 1 to March 31) with PAT of
INR1.24 crore as against total operating income of INR2.05 crore
with net loss of INR2.12 crore in FY14.
GARV UDYOG: CRISIL Reaffirms B Rating on INR42.5MM Cash Loan
------------------------------------------------------------
CRISIL's ratings on the bank facilities of Garv Udyog (Garv)
continues to reflect the firm's exposure to risks related to low
entry barriers in the copper wire business leading to intense
competition, working capital intensive nature of operations and
its weak financial risk profile marked by a small net worth and
average debt protection metrics.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 42.5 CRISIL B/Stable (Reaffirmed)
Letter of Credit 65 CRISIL A4 (Reaffirmed)
Term Loan 37.5 CRISIL B/Stable (Reaffirmed)
These weaknesses are partially offset by the extensive experience
of the partners in the copper wire manufacturing business and
funding support from them and their affiliates.
Outlook: Stable
CRISIL believes that Garv will continue to benefit over the medium
term backed by the partners' extensive industry experience. The
outlook may be revised to 'Positive' if the firm improve its scale
of operations resulting in better profitability and improved debt
protection metrics, and improves its working capital management
and capital structure. Conversely, the outlook may be revised to
'Negative' in case of large debt-funded capex or low cash accruals
or a stretch in working capital cycle, resulting in deterioration
of its financial risk profile.
Garv is a partnership firm, manufacturing copper wires, which are
used in electrical products. The firm's manufacturing facility is
located in Shiv Ganga Industrial Estate, Haridwar. Its daily
operations are managed by its current partners Mr. Mukesh Dhawan
and Mr. Sumit Magan.
GOVINDA IMPEX: CRISIL Suspends 'D' Rating on INR400MM Cash Loan
---------------------------------------------------------------
CRISIL has suspended its rating on the bank facilities of
Govinda Impex Limited (GIL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 30 CRISIL D
Cash Credit 400 CRISIL D
Letter of Credit 70 CRISIL D
The suspension of ratings is on account of non-cooperation by GIL
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, GIL is yet to
provide adequate information to enable CRISIL to assess GIL'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'
GIL, incorporated in 2000, is promoted by Mr. Rajesh Singhi. The
company trades in iron and steel products. It also has a sponge
iron manufacturing unit at Barjora (West Bengal).
INFUTEC HEALTHCARE: CARE Reaffirms B+ Rating on INR71.62cr Loan
---------------------------------------------------------------
CARE reaffirms ratings assigned to bank facilities of Infutec
Healthcare Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 71.62 CARE B+ Reaffirmed
Long term/Short term Bank 14.50 CARE B+/CARE A4
Facilities Reaffirmed
Rating Rationale
The ratings assigned to the bank facilities of Infutec Healthcare
Limited (IHL) continue to be constrained by its subdued
profitability resulted in modest debt protection indicators during
FY15 (refers to the period April 1 to March 31) and 9MFY16 (refers
to the period April 1 to December 31). The ratings of IHL continue
to takes the note of weak liquidity of its parent, Parenteral
Drugs (India) Limited (PDIL, rated CARE D).
Ratings however, continue to factor in the moderate capital base
and its track record of operations in pharmaceutical industry. The
ratings further take into account the stabilization of added
capacity leading to growth in scale of operations of IHL during
9MFY16.
The ability of IHL to improve its profitability while efficiently
managing the working capital is the key rating sensitivities.
Extent of exposure to PDIL or other non-core venture shall also be
the key rating monitorable.
IHL, (erstwhile Goa Formulations Ltd (GFL)) is a wholly owned
subsidiary of Indore based PDIL. IHL was engaged in manufacturing
of Intravenous Fluid (IVF), wherein its assets were sold to
Fresenius Kabi India Private Limited for a consideration of INR200
crore inMarch 2013 and its entire debt was repaid.
With effect from January 1, 2014 the operations of Punjab
Formulations Limited (PFL, PDIL's another wholly owned subsidiary)
engaged in manufacturing of IVF have been merged with IHL. IHL has
an installed capacity of manufacturing 780 lakh IV Transfusion
Fluid Bottles per annum as on March 31, 2015.
Based on the audited financials for FY15 (refers to the period
April 1 to March 31), IHL reported a total operating income
(TOI) of INR59.69 crore (P.Y: INR45.49 crore) and net loss of
INR9.48 crore (P.Y: PATof INR20.96 crore). Based on provisional
result of 9MFY16 (refers to the period April 1 to December 31),
IHL reported TOI of INR75.78 crore and net loss of INR3.46 crore.
J M MHATRE: Ind-Ra Assigns 'IND BB' LT Issuer Rating
----------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned J M Mhatre Infra
Pvt. Ltd. (JMMIPL) a Long-Term Issuer Rating of 'IND BB'. The
Outlook is Stable.
KEY RATING DRIVERS
The ratings reflect JMMIPL's moderate credit profile with interest
coverage (operating EBITDA/gross interest expenses) of 3.4x in
FY15 (FY14: 3.3x) and net leverage (total adjusted debt/operating
EBITDAR) of 2.19x (2.09x) as well as its stretched liquidity
position, as evident from the ~98% average maximum utilization of
its fund-based limits during the 12 months ended February 2016.
The ratings also factor in the company's working-capital-intensive
nature of operations, with high levels of security and earnest
money deposits, along with high capital expenditure (about 7% of
revenues in FY15; FY14: 6%) as well as the customer concentration
(around 80%) and geographic concentration (100% in Maharashtra) of
its revenues.
The ratings are, however, supported by JMMIPL's healthy order book
worth INR22.86 bil. and the three-decade-long experience of its
promoters in the infrastructure business. The ratings also
consider the company's strong presence in Maharashtra as well as
the scale of its operations. Its FY15 revenue was INR3,778 mil.
(FY14: INR4,162 mil.).
RATING SENSITIVITIES
Positive: Improvement in liquidity, reflected in better working
capital management, could lead to a positive rating action.
Negative: Deterioration in liquidity from current working capital
levels could lead to a negative rating action.
COMPANY PROFILE
JMMIPL began operations in 1985 as a partnership firm and was
converted to a private limited company in 2010. It is engaged in
the construction of roads water supply systems, storm water
management systems, sewage works, railway over bridges, etc. It
is registered as an AA Class contractor with the Maharashtra State
Public Works Department.
MMIPL's ratings:
-- Long-Term Issuer Rating: assigned 'IND BB'; Outlook Stable
-- INR700 mil. fund-based limits: assigned 'IND BB'/Stable
-- INR1,550 mil. non-fund-based limits: assigned 'IND A4+'
JAGMOHAN LAL: CRISIL Suspends D Rating on INR392.6MM Term Loan
--------------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of
Jagmohan Lal Gupta Estates Private Limited (JGEPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 14.4 CRISIL D
Cash Credit 16.7 CRISIL D
Proposed Term Loan 2.9 CRISIL D
Term Loan 392.6 CRISIL D
The suspension of ratings is on account of non-cooperation by
JGEPL with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, JGEPL is yet to
provide adequate information to enable CRISIL to assess JGEPL'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'.
JGEPL, incorporated in 1981, runs a 5-star hotel in Ranchi
(Jharkhand). The hotel has been set up in collaboration with
Radisson International, an international chain of hotels under the
Radisson Blu brand.
JAI JALARAM: CRISIL Reaffirms B Rating on INR55MM Cash Loan
-----------------------------------------------------------
CRISIL's rating on the long-term bank facilities of Jai Jalaram
Ceramic Works Private Limited (JJCWPL) continues to reflect the
company's below-average financial risk profile because of a modest
net worth, high gearing, and weak debt protection metrics. The
rating also factors in exposure to the fragmented and intensely
competitive cotton industry, restricting scale of operations, and
susceptibility to any changes in government policies related to
cotton.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 55 CRISIL B/Stable (Reaffirmed)
These rating weaknesses are partially offset by the extensive
industry experience of the company's promoter.
Outlook: Stable
CRISIL believes JJCWPL will continue to benefit over the medium
term from the extensive industry experience of its promoter. The
outlook may be revised to 'Positive' in case of infusion of
capital, leading to a better capital structure, and/or significant
increase in scale of operations and profitability, thereby
improving the debt protection metrics. Conversely, the outlook may
be revised to 'Negative' in case of more-than-expected debt
contracted to fund incremental working capital requirement or
capital expenditure.
JJCWPL, originally set up in 1973, was purchased by its present
promoter, Mr. Raman Patel, in 2007. The company undertakes cotton
ginning, which contributes the major portion of its revenue, and
also manufactures ceramic pipes. It is located in Vijapur,
Gujarat, and is managed by Mr. Patel.
Profit after tax (PAT) was INR0.6 million on sales of INR287
million in 2014-15 (refers to financial year, April 1 to
March 31), against a PAT of INR0.6 million on net sales of INR249
million for 2013-14.
JAYBAJRANG AGRO: CARE Assigns B+ Rating to INR5.0cr LT Loan
-----------------------------------------------------------
CARE assigns 'CARE B+' ratings to the bank facilities of
Jaybajrang Agro Processing Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 5.00 CARE B+ Assigned
Rating Rationale
The ratings assigned to the bank facilities of Jaybajrang Agro
Processing Private Limited (JAPPL) are constrained on account of
small scale of operations, moderate financial risk profile
characterized moderate revenue growth, thin profitability margins
and weak solvency ratios, presence in highly regulated cotton
industry in the form of Minimum Support Price (MSP) of paddy and
fragmented nature of the cotton ginning business.
The above weaknesses are partially offset by the established track
record of fifteen years operations and efficient operations marked
by high capacity utilization.
The ability of the company to improve its scale of operations and
manage volatility associated with cotton price are thereby improve
its profitability are the key rating sensitivities.
Established in July 2001, JAPPL is a Nagpur (Maharashtra) based
company engaged in cotton ginning and pressing. JAPPL is promoted
by Mr. Sundarlal Surana who has an extensive experience of 15
years with JAPPL in the cotton ginning industry. The cotton
ginning unit is spread over an area of 6 acres with the land being
owned by the promoters.
JAPPL procures its raw material i.e. cotton and cotton seeds from
local farmers in the Wardha region of Maharashtra. JAPPL sells
its products to agents, who in-turn sell cotton bales in different
states viz. Telangana, Andhra Pradesh, Tamil Nadu and some
northern states of India. The customer profile is diversified with
top three customers accounting for 15% of total sales in FY15.
JAPPL registered a total operating income of INR 62.18 crore with
PBILDT of INR 1.64 crore during FY15 (refers to period from
April 1, 2014 to March 31, 2015). However, due to higher
depreciation and interest cost, it reported a net loss of INR0.06
crore, though its Gross Cash Accruals (GCA) stood at INR0.31 crore
during FY15.
JDC INDIA: CRISIL Lowers Rating on INR70MM Cash Loan to 'B'
-----------------------------------------------------------
CRISIL has downgraded its ratings on the bank facilities of
JDC India Limited (JDC) to 'CRISIL B/Stable/CRISIL A4' from
'CRISIL BB-/Stable/CRISIL A4+'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 5 CRISIL A4 (Downgraded from
'CRISIL A4+')
Cash Credit 70 CRISIL B/Stable (Downgraded
from 'CRISIL BB-/Stable')
Cash Credit 44 CRISIL A4 (Downgraded from
'CRISIL A4+')
Proposed Long Term 33 CRISIL B/Stable (Downgraded
Bank Loan Facility from 'CRISIL BB-/Stable')
Term Loan 17 CRISIL B/Stable (Downgraded
from 'CRISIL BB-/Stable')
The downgrade reflects deterioration in JDC's business risk
profile on account of decline in turnover and profitability, and
deterioration in liquidity profile. The company had cash loss of
INR19.8 million and net margin of negative 11.6 percent in 2014-15
(refers to financial year, April 1 to March 31) on account of
lower realisations from rice milling and sharp rise in cost of raw
material, paddy. It had sales of INR75.6 million till January 31,
2016. Its liquidity continues to remain stretched in 2015-16 on
account of lower turnover and profitability. The company was non-
operative from September to November 2015 due to unavailability of
labour and insufficient power supply, leading to low capacity
utilisation.
The ratings continue to reflect JDC's small scale of operations in
the fragmented rice industry, and susceptibility of its operating
performance to regulatory changes. These weaknesses are partially
offset by its promoters' extensive experience in the agricultural
products industry and their financial support.
Outlook: Stable
CRISIL believes JDC will continue to benefit over the medium term
from its promoters' industry experience and financial support. The
outlook may be revised to 'Positive' if the company reports
higher-than-expected revenue and profitability while maintaining
capital structure, and if its liquidity improves and it has
adequate cash accrual to cover debt obligation. Conversely, the
outlook may be revised to 'Negative' in case of decline in revenue
or profitability, or large debt-funded capital expenditure, or
lengthening of working capital cycle, weakening financial risk
profile.
JDC was incorporated in 1995 by Mr. Aloke Basu and his brother Mr.
Ajay Basu. It mills non-basmati rice. Its facility is at Ausgram
in Burdwan, West Bengal. The company also has a cold storage
facility in Ausgram for potato traders and farmers.
KARTIK CONSTRUCTION: CRISIL Assigns B Rating to INR40MM Loan
------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable/CRISIL A4' ratings to the
bank facilities of Kartik Construction Company (Kartik).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 30 CRISIL A4
Cash Credit 40 CRISIL B/Stable
The ratings reflect Kartik's small scale of operations in the
fragmented civil construction industry, large working capital
requirement, and geographical concentration in the revenue
profile. These weaknesses are partially offset by the extensive
experience of proprietor in the construction industry.
Outlook: Stable
CRISIL believes Kartik will benefit over the medium term from the
proprietor's industry experience. The outlook may be revised to
'Positive' if the firm diversifies and improves its scale of
operations and betters its working capital management on a
sustainable basis, leading to improvement in the financial risk
profile, particularly liquidity. Conversely, the outlook may be
revised to 'Negative' if a decline in revenue and profitability,
or any large, debt-funded capital expenditure, or a delay in
realisation of receivables from customers weakens the financial
risk profile particularly liquidity.
Set up in 1994, Kartik, is a Delhi based proprietorship firm
promoted by Mr. D K Singh. It undertakes civil construction work
for Central Public Works Department, Public Works Department,
Delhi Metro Rail Corporation, Indian Oil Corporation Ltd, and
other public sector undertakings.
M. S. LABELS: CRISIL Suspends B+ Rating on INR52MM LT Loan
----------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of
M. S. Labels (MSL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 3 CRISIL A4
Cash Credit 10 CRISIL B+/Stable
Proposed Long Term
Bank Loan Facility 52 CRISIL B+/Stable
Term Loan 35 CRISIL B+/Stable
The suspension of ratings is on account of non-cooperation by MSL
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, MSL is yet to
provide adequate information to enable CRISIL to assess MSL'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'.
MSL, established in 2006 and based in Tirupur (Tamil Nadu),
manufactures labels.
MONGIA STEEL: CRISIL Suspends B+ Rating on INR260MM Cash Loan
-------------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of
Mongia Steel Limited (MSL; part of the Mongia group).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 260 CRISIL B+/Stable
Foreign Currency
Term Loan 56 CRISIL B+/Stable
Letter of Credit 25 CRISIL A4
Proposed Long Term
Bank Loan Facility 76.5 CRISIL B+/Stable
Rupee Term Loan 87.5 CRISIL B+/Stable
The suspension of ratings is on account of non-cooperation by MSL
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, MSL is yet to
provide adequate information to enable CRISIL to assess MSL's
ability to service its debt. The suspension reflects CRISIL's
inability to maintain a valid rating in the absence of adequate
information. CRISIL considers information availability risk as a
key factor in its rating process as outlined in its criteria
'Information Availability - a key risk factor in credit ratings'.
For arriving at its ratings, CRISIL has combined the business and
financial risk profiles of MSL and Santpuria Alloys Pvt Ltd
(SAPL). This is because the two companies, together referred to as
the Mongia group, are under a common management, are in similar
lines of business, and have inter-company financial transactions.
Moreover, there are strong operational linkages between the two
companies as SAPL sells all its output to MSL.
SAPL, incorporated in 1983, manufactures sponge iron, around 90
per cent of which is sold to MSL. MSL manufactures steel products
such as ingots, thermo-mechanically treated bars, and other long
products.
NARAYANA REDDY: CRISIL Assigns B+ Rating to INR49.5MM Cash Loan
---------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to
the bank facilities of Narayana Reddy and Others (NR)
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 20 CRISIL A4
Cash Credit 49.5 CRISIL B+/Stable
The rating reflects NR's modest scale- and working capital
intensive nature- of operations in the fragmented rice industry,
its average financial risk profile marked by modest net worth and
modest debt protection metrics. The rating also factors in the
firm's exposure to intense competition and susceptibility to
changes in regulations governing export of agricultural
commodities. These rating weaknesses are partially offset by the
benefits derived from the promoters' extensive experience in the
rice milling industry and its established relationships with its
customers and suppliers.
Outlook: Stable
CRISIL believes that the NR will continue to benefit over the
medium term from its management's extensive industry experience.
The outlook may be revised to 'Positive' if the firm increases its
revenues and improves its profitability significantly, while
improving its capital structure. Conversely, the outlook may be
revised to 'Negative' if the firm undertakes a larger than
expected debt-funded capital expenditure plan or its sales volumes
and profitability decline sharply, or, if there is a stretch in
the working capital cycle, leading to deterioration in its
financial and liquidity risk profiles.
Set up in 2002 as a partnership firm, Narayana Reddy and Others is
engaged in milling and processing of paddy into rice, rice bran,
broken rice and husk. Its rice mill is located in East Godavari
District (Andhra Pradesh) .The firm is promoted by Mr. Narayana
Reddy.
NR reported profit after tax (PAT) of INR 0.50 million on net
sales of INR 229.40 million for 2014-15 (refers to financial year,
April 1 to March 31) as against PAT of INR 0.80 million on net
sales of INR 343.80 million for 2013-14.
NORTECH POWER: CARE Reaffirms 'C' Rating on INR2.0cr LT Loan
------------------------------------------------------------
CARE reaffirms the ratings assigned to the bank facilities of
Nortech Power Projects Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 2.00 CARE C Reaffirmed
Long/Short term Bank
Facilities 10.00 CARE A4 Reaffirmed
Rating Rationale
The aforesaid ratings continue to be constrained by instances of
overdrawals in cash credit account in the past, relatively
small size of the company, high average collection period leading
to working capital intensiveness of the business, vulnerability of
margins to volatile input prices, NPPL's moderate order book
position, significant exposure in group companies, moderate
financial performance with high gearing ratio. However, the above
constraints are partially offset by satisfactory experience of
promoters in execution of hydroelectric power projects and major
clients being government departments/enterprises leading to
relatively low counterparty credit risk. Ability of the company to
effectively manage the working capital and restrict its drawings
within the sanctioned line of credit from banks, increase its
scale of operations and improve profitability along with timely
execution of orders and receipt of contract proceeds on time would
remain the key rating sensitivities.
Nortech Power Projects Pvt. Ltd. (NPPL) was incorporated in
January, 1999, by Shri Praveen Agarwal and Shri Vineet
Agarwal. NPPL is engaged in setting up hydroelectric power plants
and infrastructure projects in the North-Eastern States
of India on a turnkey basis. It has experience in setting up
various mini, micro & small hydroelectric turbo alternator sets
along with other allied equipments and control systems in remote
rural areas. This apart, NPPL has also been awarded contracts
under Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) for rural
electrification.
NPPL earned PAT of INR1.43 crore on total operating income of
INR32.40 crore in FY15 (refers to the period April 1 to March 31)
as compared to PAT of INR0.79 crore on a total operating income of
INR28.39 crore in FY14.
OM SAI: CARE Assigns 'D' Rating to INR5.55cr LT Loan
----------------------------------------------------
CARE assigns 'CARE D' to the bank facilities of Om Sai
Hospitality.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 5.55 CARE D Assigned
Rating Rationale
The rating assigned to the bank facilities of Om Sai Hospitality
(OSH) is constrained due to delays in repayment obligations
owing to stressed liquidity position.
Ability of OSH to establish a clear track record of timely payment
of its debt obligations with improvement in liquidity position is
the key rating sensitivity.
Established in the year 2012 by Mr. Shekhar Shetty and Mr.
Padmanabh Shetty, Om Sai Hospitality (OSH) is a partnership
firm engaged in the hospitality business and operates a 3-star
hotel "Dhiraj Hotel" at Thane. The hotel currently has 35
executive deluxe rooms, 2 suite rooms and a banquet hall and
provides amenities such as WiFi, doctor on call, laundry
service and valet parking for its guests. The hotel mainly caters
to corporate customers and also leisure travelers looking
for a budget hotel.
ORBIT TECHNOLOGIES: Ind-Ra Affirms 'IND BB-' LT Issuer Rating
-------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed Orbit
Technologies Pvt Ltd's (OTPL) Long-Term Issuer Rating at
'IND BB-'. The Outlook is Stable. A full list of rating actions is
at the end of the commentary.
KEY RATING DRIVERS
The affirmation reflects Ind-Ra's expectation of an improvement in
OTPL's scale of operations and credit profile from the current
levels, on steady revenue growth owing to an increase in its sales
volume and scheduled debt repayments. In FY15, the company
reported revenue of INR175 million (FY14: INR189 million), EBITDA
interest coverage of 1.5x (1.4x), and net financial leverage of
2.9x (5.2x). The EBITDA margins were 8.0% (5.3%).
Liquidity has been tight as reflected by the company's full
utilisation of working capital limits in the 12 months ended
January 2016 owing to a stretched working capital cycle.
The ratings, however, are supported by over two decades of
experience of OTPL's promoters in the lab instruments trading
business along with the company's strong customer and supplier
base.
RATING SENSITIVITIES
Positive: A positive rating action could result from a substantial
increase in the scale of operations along with an improvement in
the credit profile.
Negative: A negative rating action could result from further
deterioration in the credit profile.
COMPANY PROFILE
OTPL was established in 1988 by Venkat Prasad. The company
supplies, installs, commissions and services chemical lab analysis
and monitoring instruments sourced from its overseas business
associates. The company also undertakes supply and commissioning
of chemical lab instruments used for water, soil coal and oil
analyses along with other chemicals and glassware.
OTPL's ratings:
-- Long-Term Issuer Rating: affirmed at 'IND BB-'; Outlook Stable
-- INR27.50 million fund-based working capital limits: affirmed
at 'IND BB-'/Stable
-- INR5.69 million long-term loans (reduced from INR6.26
million): affirmed 'IND BB-'/Stable
-- INR27.50 million non-fund-based working capital limits:
affirmed at 'IND A4+'
P.S. EDUCATIONAL: CRISIL Assigns B+ Rating to INR50MM Term Loan
---------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-term
bank facilities of P.S. Educational and Charitable Trust (PSE).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Rupee
Term Loan 30 CRISIL B+/Stable
Rupee Term Loan 50 CRISIL B+/Stable
The rating factors the modest scale of operations due to the
single stream of educational course offered and limited number of
seats. It also factors the below-average financial risk profile
because of small net worth and a leveraged capital structure. This
rating strength is partially offset by stability in revenues
supported by healthy demand for the dentistry course resulting in
nearly full utilisation of seats.
Outlook: Stable
CRISIL believes PSE will continue to have a high demand for the
dentistry course it offers, leading to full capacity utilisation.
The outlook may be revised to 'Positive' in case of substantial
scaling up of operations by increasing the student intake, while
maintaining operating efficiency. Conversely, the outlook may be
revised to 'Negative' if lower-than-expected cash accrual, or
large, debt-funded capital expenditure leads to deterioration in
the financial risk profile.
Registered in 2005 as a trust, PSE runs a dental college, PSM
College of Dental Science & Research (PSM College), in Trichur.
The college has an intake capacity of 100 students and offers
Bachelor of Dental Surgery course. The course is affiliated to the
Calicut University. PSM College is also planning to start Master
of Dental Surgery course; however, it is in the initial stages.
PRAKASH CORRUGATED: CRISIL Suspends B- Rating on INR80MM Loan
-------------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of
Prakash Corrugated Pune Private Limited (PCPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 3 CRISIL A4
Cash Credit 30 CRISIL B-/Stable
Proposed Long Term
Bank Loan Facility 35 CRISIL B-/Stable
Term Loan 80 CRISIL B-/Stable
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'.
Incorporated in 2011, PCPL manufactures corrugated packaging
material. The company is a part of the Prakash group, which has
been in the packaging industry for more than 40 years and operates
in diverse segments, such as thermocol packaging, corrugated
boxes, and paper tubes. PCPL commenced commercial operations at
its 4000-tonne-per-month manufacturing unit in April 2012.
PVN TEX: Ind-Ra Downgrades Long-Term Issuer Rating to 'IND D'
-------------------------------------------------------------
India Ratings and Research (Ind-Ra) has downgraded PVN Tex
Industries' (PVN Tex) Long-Term Issuer Rating to 'IND D' from 'IND
B+(suspended)'. The Outlook was Stable. A full list of rating
actions is at the end of this commentary.
KEY RATING DRIVERS
The downgrade reflects PVN Tex's intermittent delays in debt
repayments over the 12 months ended February 2016, due to
stretched liquidity. This can be attributed to a continuous
decline in revenue since FY12 (FY15: INR155 million; FY14: INR439
million; FY13: INR545 million; FY12: INR818 million) coupled with
an increase in its net working capital cycle to 406 days in FY15
from 163 days in FY14.
RATING SENSITIVITIES
Positive: Timely debt servicing for at least three consecutive
months could lead to a positive rating action.
COMPANY PROFILE
PVN Tex is a partnership firm, owned and managed by Mr. Arvind
Agarwal and family. It manufactures polypropylene and high-density
polyethylene woven sacks and fabrics.
PVN Tex's ratings:
-- Long-Term Issuer Rating: downgraded to 'IND D' from 'IND
B+(suspended)'
-- INR120.0 million fund-based working capital limits:
downgraded to 'IND D' from 'IND B+(suspended)'
-- INR13.3 million term loan limits (increased from INR2.58
million): downgraded to 'IND D' from 'IND B+(suspended)'
-- INR60.0 million non-fund-based working capital limits:
downgraded to 'IND D' from 'IND A4(suspended)'
R. M. METALS: CRISIL Reaffirms 'B' Rating on INR70MM Cash Loan
--------------------------------------------------------------
CRISIL's rating on the long-term bank facility of R. M. Metals
(RMM) continues to reflect its below-average financial risk
profile, because of small networth, moderate total outside
liabilities to tangible net worth (TOLTNW) ratio, and average debt
protection metrics, working capital-intensive operations, and
large advances extended to affiliates. The rating also factors in
RMM's small scale of operations with low profitability in the
intensely competitive and fragmented non-ferrous metals and alloys
trading segment. These weaknesses are partially offset by the
partners' extensive experience in the segment.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 70 CRISIL B/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that RMM will benefit from the partners' extensive
experience in the segment, over the medium term. The outlook may
be revised to 'Positive' if the financial risk profile
significantly improves with sizeable fund infusion from the
partners and increase in cash accrual. Conversely, the outlook may
be revised to 'Negative' if the financial risk profile and
liquidity weaken with substantial working capital requirements or
significantly low cash accrual or additional unrelated advances.
Update
In 2014-15 (refers to financial year, April 1 to March 31), RMM
had sales of INR420 million, a 24 percent year-on-year increase.
The increase in sales is on account of higher quantity of metals
been traded. The sales were around INR360 million as on January
31, 2016. The company sustained operating margin at 3.3 percent in
2014-15.
The financial risk profile continues to remain below average with
small networth of INR37.7 million, a high TOLTNW ratio of 4.9
times, and a risk coverage ratio of 2.39 times as on March 31,
2015; the interest coverage ratio was 1.5 times in 2014-15. The
cash accrual is expected to be INR3 million in 2015-16, adequate
against repayment obligations of INR0.3 million for the year. The
cash credit limit was utilised by 94 percent during the 12 months
through October 2015. The firm has given large advances to
suppliers, customers, friends and relatives that stood at INR120
million as on March 31, 2015. The unsecured loans from promoters
were INR47 million as on March 31, 2015, having an interest rate
of 10 percent per annum. Any significant increment in unrelated
advances will remain a key rating sensitivity factor.
RMM was set up as a proprietorship firm by Mr. Ravi Ramniklal
Kothari in 2000. In 2003, its legal status was changed to a
partnership firm and Mrs. Manjula Kothari was added as a partner.
RMM trades in brass foils, brass sheets, copper foils, copper
tubes, stainless steel sheet, stainless steel rounds, and nickel
alloy pipes.
RADHA INDUSTRIES: CRISIL Suspends B+ Rating on INR40MM Cash Loan
----------------------------------------------------------------
CRISIL has suspended its rating on the bank facilities of
Radha Industries (RI).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 40 CRISIL B+/Stable
Term Loan 20 CRISIL B+/Stable
The suspension of rating is on account of non-cooperation by RI
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, RI is yet to
provide adequate information to enable CRISIL to assess RI'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'.
RI was established in 2012 as a partnership firm by Mr. Anil Kumar
Agrawal and Mr. Piyush Agrawal and is headquartered in Lakhimpur
(Uttar Pradesh). The firm processes and markets non-basmati rice;
it commenced commercial operations in January 2013. It also trades
in other agricultural commodities such as pulses, jaggery, and
mollases, depending on business viability.
RAMA ARTS: CARE Assigns B+ Rating to INR6.21cr LT Loan
------------------------------------------------------
CARE assigns 'CARE B+/CARE A4' rating to the bank facilities of
Rama Arts & Exports.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 6.21 CARE B+ Assigned
Short-term Bank Facilities 0.10 CARE A4 Assigned
Long-term/Short-term
Bank Facilities 0.62 CARE B+ Assigned
Rating Rationale
The ratings assigned to the bank facilities of Rama Arts & Exports
(Rama) are primarily constrained on account of its small
scale of operations in the highly competitive and fragmented
industry, high leveraged capital structure along with its
working capital intensive nature of operations. The ratings are,
further, constrained on account of its constitution as a
proprietorship concern and vulnerability of margins to fluctuation
in the raw material prices and foreign exchange rates.
The ratings, however, favourably take into account experienced
management and healthy profitability margins along with tax
benefits available to Rama being 100% export-oriented unit (EOU).
The ability of the company to Increase its scale of operations
while maintaining profitability along with improvement in
capital structure are the key rating sensitivities.
Rama was formed in 2006 as a proprietorship concern, promoted by
Mr Anshul Dwivedi. Initially, Rama was engaged in the trading of
processed gem stones and started processing of gem stones from
2011. Furthermore, in FY15 (refers to the period April 1 to
March 31), the firm undertook a project for set up a plant for
processing of marble and granites. It has completed its project in
December 2015 and has incurred total cost of INR8.79 crore towards
the project and funded through term loan of INR5.30 crore and
remaining through unsecured loans and internal accruals. The plant
of the firm is located in Udaipur and has 100% EOU Status. It has
total installed capacity of 18.00 lakh Sq. feet per annum (LSFPA)
for processing of marbles and granites blocks to manufacture
slabs. It exports its product mainly to USA and Dubai.
During FY15, Rama has registered TOI of INR3.65 crore with net
profit of INR0.26 crore as against INR3.29 crore with PAT of
INR0.21 crore in FY14.
RANGOLI INDUSTRIES: CRISIL Cuts Rating on INR52.5MM Loan to B-
--------------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank loan
facilities of Rangoli Industries - Banaskantha (RI) to 'CRISIL B-
/Stable' from 'CRISIL B+/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 52.5 CRISIL B-/Stable (Downgraded
from 'CRISIL B+/Stable')
Long Term Loan 21.4 CRISIL B-/Stable (Downgraded
from 'CRISIL B+/Stable')
Proposed Long Term 1.1 CRISIL B-/Stable (Downgraded
Bank Loan Facility from 'CRISIL B+/Stable')
The rating downgrade reflects CRISIL's belief that RI's business
and financial risk profiles will be under pressure due to a
decline in sales along with low profitability. In 2015-16 (refers
to financial year, April 1 to March 31), the firm's revenue is
likely decline by 30 to 40 percent in 2015-16 on account of low
demand along with a decline in cotton prices. Operating margin
reduced to around 5.70 percent in 2014-15 from 10.13 percent a
year ago because of a decline in average realisation along with
fragmentation and intense competition in the cotton industry.
CRISIL expects operating margin to be in the range of 4.0 to 5.0
percent over the medium term. The decline in revenue and
profitability has led to deterioration in the debt protection
metrics. In 2014-15, the interest coverage ratio reduced to 1.80
times from 2.60 times a year earlier. CRISIL expects debt
protection metrics will remain weak with the interest coverage and
Net cash accruals to total debt (NCATD) ratios are expected to be
in the range of 1.0 to 2.0 times and 0.02 to 0.10 times,
respectively, over the medium term.
The rating reflects RI's exposure to risks pertaining a modest
scale of operations in the highly competitive cotton industry, its
large working capital requirements, and below-average financial
risk profile because of high gearing and weak debt protection
metrics. The company, however, benefits from the promoters'
extensive experience and the proximity of the firm's unit to the
cotton-growing belt in Gujarat.
Outlook: Stable
CRISIL believes that RI will benefit over the medium term from the
promoters' extensive industry experience. The outlook may be
revised to 'Positive' if there is a substantial improvement in
revenue along with profitability resulting in better debt
protection metrics. Conversely, the outlook may be revised to
'Negative' in case of a considerable decline profitability, or
deterioration in working capital management impacting liquidity,
or large, debt-funded capital expenditure weakening the financial
risk profile.
Set up in 2013, RI is a partnership firm promoted by the Thakkar
family. The firm undertakes cotton ginning and pressing operations
at its production facility in Bhabhar (Gujarat).
SAINOR LABORATORIES: ICRA Ups Rating on INR6.50cr Loan to BB-
-------------------------------------------------------------
ICRA has upgraded the long term rating assigned to the INR6.50
crore (revised from INR7.47 crore) fund based limits of Sainor
Laboratories Pvt. Ltd. from [ICRA]B+ to [ICRA]BB-. ICRA has
reaffirmed the short term rating assigned to the INR5.00 crore
non-fund based limits of SLPL at [ICRA]A4. ICRA has also
upgraded/reaffirmed ratings of [ICRA]BB-/[ICRA]A4 to the INR6.50
crore (Revised from INR5.53 crore) unallocated limits of SLPL. The
outlook on the long term rating is Stable.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Fund
Based Limits 6.50 [ICRA]BB- (Stable); upgraded
Short Term Non-
Fund Based Limits 5.00 [ICRA]A4; reaffirmed
Long/Short Term 6.50 [ICRA]BB- (Stable) upgraded/
Unallocated Limits [ICRA]A4 reaffirmed
The upgrade in rating takes into account the long standing
experience of the promoters in the pharmaceutical industry;
established relationships with reputed clients like Aurobindo
Pharma Ltd., Hetero Labs Ltd., Dr. Reddy's Laboratories Ltd. etc;
and moderate financial profile with low gearing of 0.22 times and
comfortable debt coverage indicators as on March 31, 2015.
Further, the increase in volumes from its existing products
coupled with introduction of many new products during the last two
years lead to increase in revenues and profitability which is
expected to continue in the medium term. However, the ratings are
constrained by small scale of operations of the company; high
exposure of the company to forex risk in the absence of any
hedging mechanism with ~40-50% of raw material being imported and
majority of sales being domestic; and high customer concentration
with top 10 customers contributing ~69% of sales in FY2015. The
ratings also consider high utilization of working capital limits
on the back of high debtor days during FY2015.
Going forward, ability of the company to increase its revenue and
profitability by launching of new products, and improvement its
liquidity position will be the key rating sensitivities from
credit perspective.
Sainor Laboratories Private Limited (SLPL) is part of Hyderabad
based Sainor Group; the company was incorporated in 2003 and is
into manufacture of fine chemicals like Alkyl Lithiums, Alkyl
Aluminiums etc. The company's manufacturing facility is located in
Jeedimetala, Hyderabad and is ISO 9001:2008 certified. The company
is promoted by Mr. Ch. A.P. Rameshwar Rao who is the chairman and
Managing Director, Mr. S.P. Naidu and Mr. U. Tata Rao who are the
directors of the company and have vast experience in the
pharmaceutical industry.
Recent Results
As per audited financials for FY2015, SLPL reported an operating
income of INR59.98 crore with profit after tax of INR4.26 crore as
against INR51.27 crore of operating income with profit after tax
of INR2.74 crore in FY2014. As per provisional numbers for 6M
FY2016, SLPL reported an operating income of INR41.30 crore with
OPBDIT of INR6.70 crore (unaudited and provisional).
SAMRIDDHI AGRO: CRISIL Suspends B- Rating on INR46.1MM LT Loan
--------------------------------------------------------------
CRISIL has suspended its rating on the bank facilities of
Samriddhi Agro Foods Private Limited (SAFPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 30 CRISIL B-/Stable
Proposed Long Term
Bank Loan Facility 46.1 CRISIL B-/Stable
Term Loan 43.9 CRISIL B-/Stable
The suspension of rating is on account of non-cooperation by SAFPL
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, SAFPL is yet to
provide adequate information to enable CRISIL to assess SAFPL'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'.
SAFPL, incorporated in 2012, has a flour mill in Ranchi
(Jharkhand). The day-to-day operations of the mill are managed by
Mr. Amit Sekhsaria.
SANTPURIA ALLOYS: CRISIL Suspends B+ Rating on INR150MM Loan
------------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of
Santpuria Alloys Private Limited (SAPL; part of the Mongia group).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 30 CRISIL A4
Cash Credit 150 CRISIL B+/Stable
Letter of Credit 30 CRISIL A4
Term Loan 65 CRISIL B+/Stable
The suspension of ratings is on account of non-cooperation by SAPL
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, SAPL is yet to
provide adequate information to enable CRISIL to assess SAPL's
ability to service its debt. The suspension reflects CRISIL's
inability to maintain a valid rating in the absence of adequate
information. CRISIL considers information availability risk as a
key factor in its rating process as outlined in its criteria
'Information Availability - a key risk factor in credit ratings'.
For arriving at its ratings, CRISIL has combined the business and
financial risk profiles of Mongia Steel Ltd (MSL) and SAPL. This
is because the two companies, together referred to as the Mongia
group, are under a common management, in similar line of business,
and have inter-company financial transactions. Moreover, there are
strong operational linkages between the two companies as SAPL
sells all its output to MSL.
SAPL, incorporated in 1983, manufactures sponge iron, around 90
per cent of which is sold to MSL. MSL manufactures steel products
such as ingots, thermo-mechanically treated bars, and other long
products.
SEYA PATE: CARE Assigns 'B' Rating to INR7.50cr LT Loan
-------------------------------------------------------
CARE assigns 'CARE B' rating to the long-term bank facilities of
Seya Pate Constructions LLP.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 7.50 CARE B Assigned
Rating Rationale
The rating assigned to the bank facilities of Seya Pate
Constructions LLP (SPC) factors in project execution risk with
high dependence on customer advances along with pending financial
closure, partial receipt of approvals and clearances for the
project, nascent stage of project with limited geographical
presence of the group in the Pune region. Furthermore, the rating
is constrained by competition from other real estate players in
the region coupled with inherent cyclicality associated
with the real estate sector.
The rating factors in experience of the promoter group in real
estate development in Pune, strategic location of the project
having proximity to key areas of Pune city.
Ability of the company to execute construction activities as per
the schedule supported by timely inflow of customer receivables
and sale of the inventory as envisaged are the key rating
sensitivities.
SPC is a limited liability partnership firm formed in January,
2015 and belongs to Pune-based Pate Developers. The project is
being sold under the brand name of 'Pate Developers'.
SPC is formed for developing a budget residential development
under the name "Seya" over a saleable area of 0.61 lakh square
feet (lsf). As on January 31, 2016, the company has received all
the clearances and approvals for 0.37 lsf of saleable area while
that of remaining 0.24 lsf is pending to be received and are
expected to be received by April, 2016. The project with total
saleable area of 0.61 lsf, consists of one building with 43 units,
having 2/2.5/3 BHK with average saleable area ranging from
1,254 sq. ft. to 1,594 sq. ft. of a unit flat.
The entire land has been acquired by entering into the joint
development agreement (JDA) with the landowners (Kiwalkar family).
As per JDA, the sale revenue from the project is to be shared in
the ratio of 55% to land owner including INR8 crore of land
acquisition cost and 45% will be the share of SPC. The company has
paid the land acquisition cost of INR8 crore for both phases and
the same will be adjusted from 55% of the revenue share of the
land owner. Also, the land owner will execute all the clearances
of TDR and bear the costs of the same as per the agreement.
SHREE VALI: CRISIL Suspends 'B' Rating on INR48MM Cash Loan
-----------------------------------------------------------
CRISIL has suspended its rating on the bank facilities of
Shree Vali Metals Private Limited (SVMPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 48 CRISIL B/Stable
Proposed Cash
Credit Limit 12 CRISIL B/Stable
Proposed Long Term
Bank Loan Facility 20 CRISIL B/Stable
The suspension of rating is on account of non-cooperation by SVMPL
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, SVMPL is yet to
provide adequate information to enable CRISIL to assess SVMPL'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'.
Set up in 1995 as a proprietorship firm and reconstituted as a
private limited company in 2005, SVMPL processes steel coils and
plates and is based in Bokaro, Jharkhand. SVMPL caters to the
requirements of the automobile, household and other industries.
Mr. Sidharth Parakh along with his father Mr. Kamal Singh Parakh
manages the company's daily operations. SVMPL benefits from the
extensive experience of around two decades of the promoters in the
steel industry.
SLV SPINNING: CRISIL Suspends B Rating on INR172MM LT Loan
----------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of
SLV Spinning Mills Limited (SLV).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 4.5 CRISIL A4
Cash Credit 150 CRISIL B/Stable
Long Term Loan 172 CRISIL B/Stable
Term Loan 0.5 CRISIL B/Stable
Working Capital
Term Loan 50.0 CRISIL B/Stable
The suspension of ratings is on account of non-cooperation by SLV
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, SLV is yet to
provide adequate information to enable CRISIL to assess SLV's
ability to service its debt. The suspension reflects CRISIL's
inability to maintain a valid rating in the absence of adequate
information. CRISIL considers information availability risk as a
key factor in its rating process as outlined in its criteria
'Information Availability - a key risk factor in credit ratings'
Incorporated in 2003, SLV, based in Bellary (Karnataka), was
founded by Mr. T Shivarama Prasad. The company manufactures cotton
yarn of 40s and 60s count. SLV has a manufacturing unit in Nagari
(Andhra Pradesh), and has an installed capacity of 33,000
spindles.
SR ALCOBEV: CRISIL Suspends B- Rating on INR730MM LT Loan
---------------------------------------------------------
CRISIL has suspended its ratings on the bank facility of
SR Alcobev Private Limited (SRAPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Long Term Loan 730 CRISIL B-/Stable
The suspension of ratings 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'.
SRAPL was incorporated in May 2011, promoted by Mr. Ranjan Kumar
Padhi and his wife, Dr. Saina Kar, with the main objective of
brewing beer. The company is presently setting up a plant in Bihar
to manufacture beer, with an installed capacity of 300,000
hectolitres per annum.
SR VAPORS: CRISIL Suspends 'D' Rating on INR115MM LT Loan
---------------------------------------------------------
CRISIL has suspended its rating on the bank facilities of
SR Vapors Private Limited (SRVPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 4.6 CRISIL D
Long Term Loan 115 CRISIL D
The suspension of rating is on account of non-cooperation by SRVPL
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, SRVPL is yet to
provide adequate information to enable CRISIL to assess SRVPL'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'.
SRVPL was set up in June 2011 by Mr. Ranjan Kumar Padhi and his
wife Dr. Saina Kar with the main objective to manufacture and
bottle CO2. The company is currently setting up a plant to
manufacture and bottle CO2 in both liquid as well as gaseous
forms.
SRI NANGALI: CRISIL Lowers Rating on INR220MM Loan to 'D'
---------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facility of
Sri Nangali Agro Tech Private Limited to 'CRISIL D' from 'CRISIL
B/Stable'. The rating downgrade reflects irregularities in
servicing bank debt.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 220 CRISIL D (Downgraded from
'CRISIL B/Stable')
Incorporated in 1996 and promoted by Mr. Vijay Kumar, Mr. Satish
Kumar, and Mr. Anil Kumar, SNA manufactures wheat-based products
such as flour, maida, and sooji. Unit in Gurdaspur has processing
capacity of 120 tonne per day for each product.
SRI NANGALI RICE: CRISIL Cuts Rating on INR540MM Loan to 'D'
------------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facilities
of Sri Nangali Rice Mills Private Limited (SNRL) to 'CRISIL D'
from 'CRISIL BB-/Stable'. The downgrade is because of delays by
the company in servicing its bank debt.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 540 CRISIL D (Downgraded from
'CRISIL BB-/Stable')
Term Loan 40 CRISIL D (Downgraded from
'CRISIL BB-/Stable')
SNRL was established in 2004 by Mr. Anil Aggarwal and his
brothers, Mr. Vijay Aggarwal and Mr. Satish Aggarwal, in
Gurdaspur, Punjab. The company mills and markets rice, mainly
basmati rice, under its Sri Nangali, Raj Mahal, White, and Swami
brands. It is managed by the three Aggarwal brothers, and their
nephew, Mr. Manoj Aggarwal.
SUNRISE AGRO: CRISIL Lowers Rating on INR30MM Cash Loan to B-
-------------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facilities
of Sunrise Agro Industries (SAI) to 'CRISIL B-/Stable' from
'CRISIL B/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 30 CRISIL B-/Stable (Downgraded
from 'CRISIL B/Stable')
Term Loan 20 CRISIL B-/Stable (Downgraded
from 'CRISIL B/Stable')
The rating downgrade reflects deterioration in the firm's
financial risk profile, especially liquidity. With ongoing
stabilization in operations and intense industry competition, the
firm is expected to generate insufficient cash accruals against
term loan repayment obligations of INR 3.3 million for 2015-16
(refers to financial year, April 1 to March 31). Further, SAI's
operations continue to remain working capital intensive with
expected gross current asset (GCA) days of over 150 days as on
March 31, 2016, emanating primarily from high levels of inventory.
However, periodic fund infusion from promoters in the form of
unsecured loans will continue to support SAI's liquidity. With
high dependence on external borrowings along with low accretion to
reserves, CRISIL believes that SAI will continue to exhibit a
below-average financial risk profile.
The ratings continue to reflect SAI's below-average financial risk
profile, marked by high gearing and a small net worth, and its
working-capital-intensive nature of operations. These rating
weaknesses are partially offset by the entrepreneurial and
industry experience of the firm's partners.
Outlook: Stable
CRISIL believes that SAI will continue to benefit over the medium
term from its partners' extensive experience in the cotton seed
and de-oiled cake trading business. The outlook may be revised to
'Positive' if the firm achieves a significant increase in its
revenue and profitability, leading to better cash accrual and
financial risk profile. Conversely, the outlook may be revised to
'Negative' if SAI's financial risk profile, particularly its
liquidity, weakens, because of a stretch in its working capital
cycle or large debt-funded capital expenditure.
SAI was set up in May 2013 in Nagpur (Maharashtra) by Mr. Rangarao
Gechode, Mr. Dhananjay Adsad, and Mr. Manik Thakre. The firm
extracts oil from cotton seeds.
SWARNAA TECHNO: CRISIL Suspends 'D' Rating on INR75MM Bank Loan
---------------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of Swarnaa
Techno Constructions Private Limited (STCPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 75 CRISIL D
Cash Credit 25 CRISIL D
Secured Overdraft
Facility 50 CRISIL D
The suspension of ratings is on account of non-cooperation by
STCPL with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, STCPL is yet to
provide adequate information to enable CRISIL to assess STCPL'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'
STCPL was set up in 2008 by Mr. V S V Prasad. In 2009, STCPL took
over the business of a partnership firm, Swarnaa Construction,
which was also promoted by Mr. Prasad. STCPL undertakes civil
construction work and manufactures sleepers for the South-Western
Railways. The company is based in Hubli (Karnataka).
TAKEDA IFMR: Ind-Ra Confirms IND B+(SO) Rating on Series A2 PTCs
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has confirmed Takeda IFMR
Capital 2016's (an ABS transaction) ratings as follows:
- INR254.2 million Series A1 pass through certificates (PTCs):
'Provisional IND BBB+(SO)'; Outlook Stable
- INR22.6 million Series A2 PTCs: 'Provisional IND B+(SO)';
Outlook Stable
The initial POS of the collateral pool to be assigned to the trust
at par as of the pool cut-off date of 29 February 2016 has been
reduced to INR282.5 million from INR296.8 million.The size of the
Series A1 PTCs has been reduced to INR254.2 million from INR267.2
million. The size of the Series A2 PTCs has been reduced to
INR22.6 million from INR23.8 million. The Outlook for both the
Series A1 PTCs and Series A2 PTCs is Stable.
Final ratings are contingent upon the receipt of final documents
conforming to the information already received.
The micro finance loan pool to be assigned to the trust is
originated by Future Financial Services Private Limited.
TALWAR MOBILES: CRISIL Suspends B+ Rating on INR150MM LT Loan
-------------------------------------------------------------
CRISIL has suspended its rating on the bank facilities of
Talwar Mobiles Private Limited (TMPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 90 CRISIL B+/Stable
Proposed Long Term
Bank Loan Facility 150 CRISIL B+/Stable
The suspension of rating is on account of non-cooperation by TMPL
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, TMPL is yet to
provide adequate information to enable CRISIL to assess TMPL'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'
TMPL is promoted by the Hyderabad-based Talwar family, which has
two decades of experience in the automobile dealership business.
The company is an authorised dealer for Hyundai Motors India Ltd
vehicles in Hyderabad. It has three showrooms and four workshops.
The company is currently managed by Mr. Sunil Talwar and his son,
Mr. Saral Talwar.
TRV GLOBAL: CARE Assigns 'C' Rating to INR3cr LT Loan
-----------------------------------------------------
CARE assigns 'CARE C' rating to the lt bank facilities and
reaffirms the rating assigned to the st bank facilities of
TRV Global Exports Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 3 CARE C Assigned
Short-term Bank Facilities 14 CARE A4 Reaffirmed
Rating Rationale
The ratings assigned to the bank facilities of TRV Global Exports
Private Limited (TGEPL) continue to be constrained by the modest
scale of operations, working capital-intensive nature of
operations and financial risk profile marked by highly leveraged
capital structure with elongated operating cycle. The ratings are
further constrained by exposure of TGEPL's margins to volatility
in foreign exchange rates and dependence on the real estate
sector.
The ratings, however, continue to derive strength from the
established track record of the company with experienced promoters
in the granite industry, location advantage with its presence in a
granite processing cluster with substantial captive quarries and
mining rights and diversifying its client base domestically as
well as in export market.
The ability of the company to scale up its operations with
improved profitability and capital structure while managing its
working capital requirements efficiently remains the key rating
sensitivity.
TGEPL, formerly known as TRV Exports was started in the year 1999
by Mr N. Shiva Kumar and others as a partnership firm.
Subsequently, TRV Exports was converted into private limited
company on August 28, 2007. TGEPL is a 100% export-oriented unit
(EOU) and is engaged in processing, trading & exporting of granite
slabs and blocks. TGEPL exports its products to countries like
China and Hong Kong. The company's key raw materials, namely,
granite rough blocks, are mainly procured from its owned & leased
quarries located at Karimnagar, Andhra Pradesh. The operation of
the quarries is highly mechanized with TGEPL deploying a host of
machineries/equipment, viz, Volvo Excavators, Diamond Wire Saws,
Hydraulic Multi-drilling Rod Compressors, Dumpers, Loaders and
Tippers.
Company's major product, raw granite blocks, are dressed on wire-
saws and mono-blade dressers before transporting from stockyard to
the ports for export. TGEPL provides a varied range of quality
granite products to its clients that cater to the requirements of
constructions like buildings, hospitals, hotels and other housing
projects.
As per the audited results, TGEPL reported a total operating
income of INR20.69 crore and net profit of INR0.19 crore in FY15
(refers to the period of April 1 to March 31) as against a total
operating income of INR33.36 crore and net profit of INR0.21 crore
in FY14.
VAIBHAV COTTON: CRISIL Assigns B+ Rating to INR140MM Cash Loan
--------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long term
bank facility of Vaibhav Cotton Corporation (VCC).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 140 CRISIL B+/Stable
The rating reflects VCC's weak financial risk profile marked by
high gearing, modest debt protection metrics and net worth and its
exposure to risks relating to volatility in cotton prices and
government regulations. The rating also factors in the firm's
modest scale of operations and low profitability in the intensely
competitive cotton ginning industry. These rating strengths are
partially offset by the benefits derived from its partner's
extensive experience in the cotton ginning industry and
established relation with its suppliers and customers.
Outlook: Stable
CRISIL believes that the VCC will continue to benefit over the
medium term from the extensive industry experience of its
partners. The outlook may be revised to 'Positive' if there is
significant increase in VCC's scale of operations, while improving
its profitability margin and capital structure. Conversely, the
outlook may be revised to 'Negative' in case of a significant
decline in the firm's revenue or profitability or if its capital
structure deteriorates on account of high working capital
requirements or a large debt-funded capital expenditure.
Established in 1997 as a partnership firm, VCC is engaged in
cotton ginning and processing of cotton seed to produce cotton
seed oil and cotton seed oil cake. Based in Karimnagar
(Telangana), VCC is promoted by Mr. Shiva Mukka Kumar, Mr. Mukka
Narayana and Mr. Mukka Rajalaxmaiah.
For 2014-15 (refers to financial year, April 1 to March 31), VCC
reported profit after tax (PAT) of INR2.5 million on net sales of
INR882 million against PAT of INR3.2 million on net sales of
INR1.3 billion for 2013-14.
=================
I N D O N E S I A
=================
ENERGI MEGA: Moody's Confirms B2 CFR; Outlook Stable
----------------------------------------------------
Moody's Investors Service has concluded the rating review of
Energi Mega Persada Tbk (P.T.) (EMP) with the confirmation of its
B2 corporate family rating. The rating outlook is stable. This
action concludes the rating review for downgrade initiated on
Jan. 22, 2016.
Oil prices have dropped substantially reflecting continued
oversupply in the global oil markets, very high inventory levels
and additional Iranian oil exports coming on line. Moody's
lowered its oil price estimates on January 21 and expects a slow
recovery for oil prices over the next several years.
The drop in oil prices and weak natural gas prices has caused a
fundamental change in the energy industry, and its ability to
generate cash flow has fallen substantially. Moody's believes
this condition will persist for several years. As a result,
Moody's is recalibrating the ratings of many energy companies to
reflect this industry shift.
RATINGS RATIONALE
"The confirmation of EMP's B2 corporate family rating is supported
by its increasing proportion of earnings and cash flows from
stable gas producing blocks in Indonesia, underpinned by long-term
sales contracts and solid local market fundamentals," says Brian
Grieser a Moody's Vice President and Senior Analyst.
While the ratings also reflect EMP's solid credit metrics, the B2
CFR is constrained by the company's reliance on short term
funding, relatively small scale, both in terms of revenue and
reserves, and its dependence on a concentrated group of oil and
gas producing blocks.
EMP's reliance on short term debt, and resultant weak liquidity
profile, remains a key ratings consideration. Moody's anticipates
that EMP will continue to successfully manage its short term debt
by allocating free cash flow to debt reduction, refinancing
maturities or potentially selling assets. EMP's reliance on short
term debt has declined in 2016 with its execution of a new 5-year
$60 million bank loan and subsequent repayment of high interest
short term debt.
The stable outlook incorporates Moody's expectation that EMP will
achieve its production growth targets within budget and to the
planned time frames. Further, Moody's expects weak earnings to
continue in 2016 and that debt reduction will occur allowing the
company to maintain low leverage and high interest coverage
levels.
Ratings could come under downward rating pressure if oil prices
are lower than Moody's current expectations or the company is
unable to refinance or repay its near term debt maturities.
Alternatively, if the company pursues a debt-financed growth
strategy, the ratings could come under pressure.
Upward rating pressure is limited given EMP's scale and reliance
on short term funding but may evolve if the company: 1) succeeds
in implementing its expansion plans and ramping up its production,
particularly at the Kangean block; 2) significantly reduces its
reliance on short term funding; and 3) demonstrates consistent
positive free cash flows.
The principal methodology used in this rating was Global
Independent Exploration and Production Industry published in
Decemebr 2011.
EMP is an independent oil & gas exploration and production company
primarily located in Indonesia. EMP had an estimated total proved
and probable reserves (2P) of 11.63 million barrels of oil and
138.9 million barrels of oil equivalent (mmboe) of gas. The
company holds working interests in 12 oil and gas blocks, 8 of
which are producing. In 2015, EMP reported average daily oil
production of 11.2 thousand barrels per day (12.8 in 2014) and gas
production of 35.8 thousand barrels of oil equivalent per day
(37.7 in 2014).
INDONESIA: Will No Longer Bail Out Troubled Commercial Banks
------------------------------------------------------------
I Made Sentana, writing for The Wall Street Journal, reports that
the Indonesian government will no longer bail out commercial banks
when they face financial problems, but will instead force the
institutions to use their own assets or those belonging to
shareholders to raise funds in a crisis, according to a new
regulation Parliament passed late last week.
If those assets are insufficient, the Indonesia Deposit Insurance
Corporation, the country's official insurer of bank deposits, will
loan money to troubled institutions using the premiums and other
funds it collects from commercial lenders operating in the
country, according to the Journal.
The Journal relates that the new law, which was passed after eight
years of discussion in the legislature, forbids the use of
taxpayer funds to stabilize the banking system, which has become a
politically sensitive matter after past bailouts.
"This is a common practice adopted in the G-20 countries, of which
Indonesia is a member," the Journal quotes Finance Minister
Bambang Brodjonegoro as saying in a statement over the weekend.
According to the Journal, the government spent around $60 billion
to bail out the nation's banking system when it was crippled by
the 1997-98 Asian financial crisis. The financial costs arising
from the measures taken nearly two decades ago continue to burden
the state's coffers, the report says.
In late 2008 the government injected around $600 million to save
the medium-sized PT Bank Century -- now called PT Bank Mutiara --
from bankruptcy, the Journal recalls. The report says finance
officials argued that closing down a bank in the middle of the
global financial crisis would have caused a loss of confidence in
the banking system, even though the bank wasn't a systemically-
important lender.
The Journal notes that the move sparked heated public debate and
triggered an investigation into the actions of top central bankers
and government officials to find out whether corruption was
involved in the bailout. One central bank official was jailed as a
result of the investigation.
According to the Journal, Mr. Brodjonegoro called last week's
legislation, which the central bank and government had been
lobbying for, "an optimum result." The Journal says the
compromise allowing the official deposit insurer to lend to
troubled banks out of its own funds came after Parliament earlier
rejected the government's proposal that the government could lend
to the Indonesia Deposit Insurance Corporation, which would then
use those funds to stabilize lenders.
Some economists criticized the law as it limits the policy options
available to the government during any future financial crisis,
the Journal states.
The new law will leave Indonesia's deposit insurer to rely on its
own funds or try to raise cash from the market in the event of a
crisis, which could be difficult or costly to do, economists said,
the Journal relays.
"This will cut off one source of funds, but it will force banks to
be more prudent," the Journal quotes Bank Permata economist Josua
Pardede as saying.
MASKAPAI REASURANSI: Fitch Upgrades IFS Rating to 'BB'
------------------------------------------------------
Fitch Ratings has upgraded the ratings of three insurance
companies in Indonesia, following a portfolio review of the
country's insurance sector.
The review focused on the application of Fitch's recently updated
criteria for Country-Specific Treatment of Recovery Ratings, and
the purpose was to identify any ratings that should be changed as
a result of the application of the updated criteria. Fitch has
also considered the appropriateness of the relative ranking of
ratings in the Indonesian insurance sector, where relevant, after
initial consideration of updated recovery guidelines, as part of
the portfolio review.
Fitch upgraded by one notch the Insurer Financial Strength (IFS)
ratings of PT (Persero) Asuransi Kredit Indonesia (to 'BBB-'), PT
Maskapai Reasuransi Indonesia Tbk (to 'BB') and PT Reasuransi
Nasional Indonesia (to 'BB'). The ratings upgrade reflects a
higher recovery assumption of 'RR3' under an effective insurance
regulatory regime, despite Indonesia's country grouping in 'D'.
Fitch views the Indonesian insurance regulatory regime as
effective, given the strengthening authority and monitoring of the
OJK (Financial Services Authority). The OJK has actively
introduced new policies and regulations in recent years. This
includes a new insurance law in 2014 that gives policyholders
priority if a conventional or sharia insurer or reinsurer is
liquidated or becomes bankrupt. Other changes include optimising
domestic reinsurance capacity and regulating tariffs for property
and motor insurance.
A 'RR3' recovery rating typically assumes good recovery prospects
given default. Standard notching is applied between the insurance
operating company's IFS Rating and Issuer Default Rating (IDR)
when insurance regulations are viewed as effective. In such cases,
Fitch assumes regulators will intervene early enough in a
distressed scenario to preserve assets to support an above-average
recovery for the insurer as a whole and thus policyholders.
Fitch published the updated criteria for Country-Specific
Treatment of Recovery Ratings on 22 February 2016. This followed
the publication of an exposure draft of proposed criteria on 16
December 2015. The updated criteria retain the primacy of existing
jurisdictional caps, while Fitch changed the reference data when
determining country groupings.
KEY RATING DRIVERS
The key rating driver was the impact of updated criteria for
Country-Specific Treatment of Recovery Ratings. See most recently
published rating action commentaries or research reports for
additional information on other key ratings drivers pertinent to
specific entity ratings.
RATING SENSITIVITIES
Not applicable to this portfolio review, given its limited focus
on implementing updated criteria for Country-Specific Treatment of
Recovery Ratings. (See most recently published rating action
commentaries or research reports for additional information on
rating sensitivities pertinent to specific entity ratings).
FULL LIST OF RATING ACTIONS
PT (Persero) Asuransi Kredit Indonesia
-- IFS Rating upgraded to 'BBB-' from 'BB+'; Outlook Stable
PT Maskapai Reasuransi Indonesia Tbk
-- IFS Rating upgraded to 'BB' from 'BB-'; Outlook Stable
PT Reasuransi Nasional Indonesia
-- IFS Rating upgraded to 'BB' from 'BB-'; Outlook Stable
LIMITATIONS
The portfolio review was limited in scope, only including an
assessment of updated criteria for Country-Specific Treatment of
Recovery Ratings. The updated criteria report does not apply to
National Ratings. None of the factors outlined in Section I (Key
Rating Factors), or any other elements discussed in Fitch's
insurance master criteria were reviewed. Where relevant, Fitch
considered the appropriateness of the relative ranking of ratings
within Indonesian insurance sector, after initial consideration of
updated criteria for Country-Specific Treatment of Recovery
Ratings, as part of the review.
=========
J A P A N
=========
TAKATA CORP: To Sell Most of Its Shares in Other Firms
------------------------------------------------------
Jiji Press reports that embattled air bag manufacturer Takata
Corp. plans to sell most of its shares in other companies,
including automakers, as it covers the costs of recalling
defective air bags, informed sources said March 22.
As of the end of March last year, Takata held shares in Honda
Motor Co., Toyota Motor Corp., Nissan Motor Co. and other
companies. The value of Takata's shareholdings booked on the
balance sheet totaled JPY16.3 billion, Jiji discloses.
Jiji says Takata is also considering selling U.S. unit Irvin
Automotive Products Inc., which was acquired in 1989.
The Pontiac, Michigan-based unit manufactures auto interior
products such as seat materials and armrests. Its annual sales are
between JPY50 billion and JPY60 billion, the sources said.
As reported in the Troubled Company Reporter-Asia Pacific on
Nov. 24, 2014, 24/7 Wall St. said Takata Corporation faces huge
fines, and almost certainly lawsuits (which have already begun),
over its defective airbags. The report related that some experts
believe that the Japanese company was not forthcoming about the
technical failure that caused several serious accidents and
deaths. If Takata goes bankrupt, which could certainly happen,
claims against the company would be in limbo, 24/7 Wall St. said.
Takata Corporation (TYO:7312) develops, manufactures and sells
safety products for automobiles. The Company offers seatbelts,
airbags, steering wheels, child seats and trim parts. The Company
has subsidiaries located in Japan, the United States, Brazil,
Germany, Thailand, Philippines, Romania, Singapore, Korea, China
and other countries.
TOKYO ELECTRIC: Moody's Affirms Ba3 CFR; Outlook Stable
-------------------------------------------------------
Moody's Japan K.K. has affirmed Tokyo Electric Power Company,
Incorporated's (TEPCO) Ba3 corporate family rating.
At the same time, Moody's has revised the rating outlook to stable
from negative.
Concurrently, Moody's has withdrawn TEPCO's B1 issuer rating, in
line with our practice on other speculative grade issuers.
These ratings were affirmed:
-- Corporate family rating at Ba3
-- Senior secured debt ratings at Ba2
-- Commercial paper program at NP
RATINGS RATIONALE
"The change in outlook reflects Moody's view that TEPCO's credit
profile now shows a greater degree of stability, in view of
increased visibility on the costs related to the accident at its
Fukushima Daiichi nuclear power plant in March 2011; the effects
of the implementation of the government's support scheme for such
costs; and the support TEPCO has been receiving from its
relationship banks," says Motoki Yanase, a Moody's Vice President
- Senior Analyst.
"In addition, Moody's considers that TEPCO's operations -- despite
the fact that its nuclear reactors are still inactive -- has shown
evidence of improvement that would warrant a slightly higher
estimation of the underlying credit, government support aside,"
adds Yanase.
Although Moody's expects that the total compensation that TEPCO
will pay out for the accident -- which followed the earthquake in
March 2011 -- may still increase to some extent, it recognizes
that the rate of increase is slowing.
Moody's also believes that the scale of the compensation will be
manageable because -- under the government's support scheme --
initial payments to victims are funded by the Nuclear Damage
Compensation and Decommissioning Facilitation Corporation (NDF),
which in turn is financed by the government. These funds will
then be gradually paid back by special contributions from TEPCO
and general contributions from nuclear-dependent electric power
companies over the years.
Moody's acknowledges that the total amount for decommissioning the
Fukushima Daiichi plant remains uncertain, but TEPCO has so far
set aside JPY1 trillion for currently known costs, a part of which
has already been paid out. To the extent that the total expenses
for decommissioning will increase in future, Moody's understands
that TEPCO will reflect such costs into its operating plans in
consultation with the NDF.
Moody's also recognizes that TEPCO has received reasonable levels
of support from its relationship banks, which have been providing
ongoing refinancing of existing loans and some additional lending.
Moody's expects that the ongoing payments stemming from Fukushima
Daiichi nuclear accident will weigh on TEPCO's profitability.
However, Moody's also expects that the government support
framework -- as outlined above -- will prevent the company's
metrics from deteriorating significantly.
For calendar 2015, TEPCO's margin and cash flow coverage rose on a
temporary basis because of declining fuel prices and showed
favorable levels, with its adjusted operating margin at 7.2% and
(cash flow from operation pre-working capital)/debt at 11.1%.
TEPCO's continuous efforts on cost cuts and tariff hikes after the
earthquake have also helped improve profitability and enabled the
company to secure profits on an ongoing basis without an immediate
restart of its nuclear reactors.
Nevertheless, when Moody's excludes such temporary gains, Moody's
expects that TEPCO's adjusted operating margin will remain in the
low single-digits and (cash flow from operation pre-working
capital)/debt at around 10% at least for the next few years.
Moody's also expects that the increased level of competition after
the complete deregulation of electricity retail market on 1 April
2016 could also pressure prices. However, it also believes that
its impact on TEPCO's profitability and credit quality will be
manageable, considering the limited level of electricity supply
from competitors and the counter-measures TEPCO is taking.
As a government-related issuer (GRI), TEPCO's Ba3 corporate family
rating reflects a baseline credit assessment (BCA) of caa1. While
the corporate family rating is affirmed at Ba3, the BCA has been
upgraded by one notch from caa2 to indicate a higher weighting for
the fundamental improvement in TEPCO's operations. Government
support -- as reflected in the rating -- continues to consider the
very high dependence of TEPCO on the Government of Japan (A1
stable) and the high probability of ongoing support from the
government under Moody's joint default analysis (JDA) approach.
Although improved, TEPCO's standalone financial profile remains
weak -- as reflected in its caa1 BCA -- and government support
remains critical to the rating.
Upward pressure on the rating could increase if we conclude that
the company can achieve both sustainable and appropriate
profitability and financial metrics, developments which are
influenced by factors such as the continued commitment and support
of the government and creditors; increased clarity on
profitability in Japan's future deregulated electricity market;
and improvements in TEPCO's cost base once the nuclear reactors at
its Kashiwazaki-Kariwa power plant restart.
The ratings could face downward pressure if TEPCO's margin or cash
flow coverage weakens due to competition in the deregulated
electricity market, adverse changes in the government's support
for TEPCO, or the timing for a restart of its nuclear power plant
becomes even more protracted. Depending upon our assessment at
the time, the ratings could also be impacted by any change in the
rating or outlook of the Government of Japan, or our assessment of
any negative changes in the GRI factors.
The principal methodology used in these ratings was Regulated
Electric and Gas Utilities (Japanese) published in February 2014.
Other methodologies used include the Government-Related Issuers
methodology (Japanese) published in November 2014.
Tokyo Electric Power Company, Incorporated is the largest power
company in Japan with consolidated revenues of JPY6.8 trillion and
an electricity sales volume of 257.0 billion kWh for the fiscal
year that ended in March 2015.
===============
T H A I L A N D
===============
IRPC PUBLIC: Moody's Confirms Ba1 Corporate Family Rating
---------------------------------------------------------
Moody's Investors Service has concluded rating reviews for Thai
Oil Public Company Limited (Thai Oil), PTT Global Chemical Public
Company Limited (PTTGC) and IRPC Public Company Limited (IRPC).
Moody's confirmed the ratings of all three companies.
These actions conclude the rating reviews started on Jan. 26,
2016.
RATINGS RATIONALE
The confirmation on the ratings of the aforementioned related
entities follows the confirmation on the ratings of parent, PTT
Public Company Limited (PTT) on March 17, 2016. Moody's rating
rationale was set out in the press release titled "Moody's
concludes reviews of six South and Southeast Asian national oil
companies", which was published on the same day.
Thai Oil
Thai Oil's Baa1 senior unsecured rating incorporates a one-notch
uplift, based on the expected support from PTT, considering the
close business integration between the two companies and the
important role that Thai Oil plays in PTT's downstream oil
business. Its underlying credit strength reflects its position as
Thailand's largest and most complex refiner, strong operating
profile, and conservative financial leverage against the backdrop
of the concentrated nature of its operations and the cyclical
nature of refining and petrochemical margins. The outlook is
stable, reflecting Moody's expectations of Thai Oil maintaining
its operational competiveness, conservative investment strategy,
and prudent financial profile.
PTTGC
PTTGC's Baa2 rating incorporates a one-notch uplift, reflecting
the likelihood of PTT providing credit support in the event of
distress. PTTGC is strategically important within PTT's energy
value chain, as it is the `chemical flagship', and there is close
business integration between the companies. The rating reflects
1) PTTGC's position as the largest diversified petrochemical
company in Thailand; 2) its competitive cost structure; and 3) its
long-term feedstock supply and product off-take agreements with
PTT; At the same time, the rating is constrained by its high
operating and execution risk, inherent volatility in the refining
and petrochemical sectors as well as increasing appetite for
capital investments. The rating outlook is stable, reflecting
Moody's expectation that PTTGC will maintain its leading position
in Thailand's petrochemical sector and its solid financial
profile, while carrying out its capex plans.
IRPC
IRPC's Ba1 ratings incorporate a two-notch uplift that reflects 1)
PTT's willingness to provide additional working capital and
intercompany funding support to reduce IRPC's financial burden
while carrying out the large-scale Phoenix Project; and 2) the
likelihood of PTT providing extraordinary credit support in a
situation of stress. IRPC's underlying credit strength is
supported by: 1) the moderate diversity of its profits, which are
derived from its large oil refining and fuel-producing business,
and its petrochemicals business; and 2) the ongoing operational
support from PTT in the form of crude procurement, and
intercompany loans to support its short-term liquidity needs. The
rating outlook is stable, reflecting Moody's expectations that the
company's financial performance will remain improve in 2016-17
upon full completion of its large-scale refinery upgrading project
and maintain a prudent approach towards further investments.
The principal methodology used in rating Thai Oil Public Company
Limited and IRPC Public Company Limited was Refining and Marketing
Industry published in August 2015. The principal methodology used
in rating PTT Global Chemical Public Company Limited was Global
Chemical Industry Rating Methodology published in December 2013.
Issuer: Thai Oil Public Company Limited
Senior Unsecured Regular Bond/Debenture, Baa1
Senior Unsecured MTN Program, (P)Baa1
Outlook is stable
Issuer: PTT Global Chemical Public Company Limited
Issuer Rating, Baa2
Senior Unsecured Regular Bond/Debenture, Baa2
Outlook is stable
Issuer: IRPC Public Company Limited
Corporate Family Rating, Ba1
Senior Unsecured Regular Bond/Debenture, Ba1
Outlook is stable
Thai Oil Public Company Limited is the leading refining and
petrochemical company in Thailand. It operates the largest
single-site refinery in the country with a nameplate capacity of
275,000 barrels per day. Thai Oil is 49.1% owned by PTT Public
Company Limited.
PTT Global Chemical Public Company Limited (PTTGC) is the largest
diversified petrochemical company in Thailand, with 8.75 million
tons of petrochemical production capacity and 280,000 barrels per
day (bpd) of upstream distillation capacity. PTTGC is 48.9% owned
by PTT Public Company Limited.
IRPC Public Company Limited (IRPC) is a domestic crude oil refiner
and supplier of petroleum products in Thailand. It operates the
country's second largest oil refinery with a nameplate capacity of
215,000 barrels per day. IRPC is 38.51% owned by PTT Public
Company Limited.
PTT Public Company Limited is an integrated oil, gas and
petrochemical company based in Thailand. Its largest shareholder
is the Ministry of Finance, which owns 51.1% of its total share
capital, while the government-invested Vayupak Mutual Funds owns a
further 14.9% stake in the company.
*********
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 ***