/raid1/www/Hosts/bankrupt/TCRAP_Public/160511.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, May 11, 2016, Vol. 19, No. 92
Headlines
A U S T R A L I A
AMAROO EARLY: Placed Into Liquidation
FARGO INVESTMENTS: First Creditors' Meeting Set For May 19
FLEXI ABS 2014-1: Fitch Affirms 'BBsf' Rating on Class E Notes
PIVOTAL REIT: First Creditors' Meeting Set For May 18
RICTON PTY: First Creditors' Meeting Set For May 18
TERRAMUNDI PTY: First Creditors' Meeting Set For May 18
VJR PTY: Clifton Hall Appointed as Liquidator
C H I N A
ZHONGRONG INTERNATIONAL: S&P Cuts ICR to 'BB-'; Outlook Negative
H O N G K O N G
MELCO CROWN: Moody's Retains MCE's Ba3 CFR on Share Repurchase
I N D I A
ADITYA RICE: ICRA Reaffirms B+ Rating on INR10.41cr Loan
AESTHETIC STAMPINGS: ICRA Assigns 'B+' Rating to INR.5cr Loan
ANIL CONSTRUCTION: Ind-Ra Assigns 'IND BB-' LT Issuer Rating
BABANRAOJI SHINDE: ICRA Assigns 'D' Rating to INR164.31cr Loan
BHAGAT FORGE: CARE Reaffirms B+ Rating on INR12.63cr LT Loan
BHALERAO BROTHERS: Ind-Ra Assigns IND B- Long-Term Issuer Rating
BINDAL IRON: ICRA Suspends B/A4 Rating on INR20cr Loan
BSCPL AURANG: Ind-Ra Cuts INR8,560MM Bank Loan Rating to 'IND B+'
CAPARO ENGINEERING: CARE Raises Rating on INR269.38cr Loan to B
CITI CENTRE: CARE Reaffirms 'B' Rating on INR20cr LT Loan
COLOR GRANITO: CARE Assigns B+ Rating to INR30cr LT Loan
EASUN REYROLLE: ICRA Suspends 'D' Rating on INR174cr Loan
GOPAL SHIVHARE: CARE Assigns 'C' Rating to INR5.0cr LT Loan
H. P. RAJYAGURU: CARE Assigns B+ Rating to INR6cr LT Loan
INDO DUTCH: ICRA Reaffirms B- Rating on INR8.50cr Term Loan
JAIPRAKASH ASSOCIATES: CARE Reaffirms D INR21,786.3cr Loan Rating
K. M. SUGAR: Ind-Ra Affirms 'IND BB' Long-Term Issuer Rating
K S VENKATRAMAN: ICRA Suspends 'B' Rating on INR12cr Loan
KAMLA SHIVHARE: CARE Assigns 'C' Rating to INR4.70cr LT Loan
KOGTA INTERNATIONAL: ICRA Suspends D Rating on INR3.14cr Loan
KURMI ENERGY: CARE Lowers Rating on INR40.26cr LT Loan to 'D'
KUT ENERGY: CARE Lowers Rating on INR257.14cr LT Loan to 'D'
LAXMI NARAYAN: CARE Assigns 'C' Rating to INR7.0cr LT Loan
MAHARSHI RICE: ICRA Reaffirms B+ Rating on INR13.25cr Loan
MARUTI COTTON: ICRA Assigns 'B' Rating to INR6.0cr Cash Loan
MONY PRINTS: ICRA Assigns 'B' Rating to INR3.95cr Loan
N.D. PLASTICS: ICRA Assigns B- Rating to INR6.0cr Cash Loan
NILKANTH COTTON: ICRA Reaffirms 'B' Rating on INR6.0cr Loan
OGUN STEELS: ICRA Suspends 'C' Rating on INR7.0cr Loan
PRIYHEER INFRA: ICRA Assigns 'B' Rating to INR15cr Term Loan
S.K. HEIGHTS: ICRA Assigns B+ Rating to INR15cr LT Loan
SALASAR BALAJI: ICRA Assigns 'B' Rating to INR5.60cr Term Loan
SATMAN AUTOMOBILES: CARE Reaffirms B+ Rating on INR15cr Loan
SHAKTI COMPONENT: Ind-Ra Assigns IND BB- Long-Term Issuer Rating
SMIT DEVELOPERS: ICRA Suspends 'B+' Rating on INR9.18cr Loan
SMLASH ISPAT: ICRA Suspends B+ Rating on INR4cr Loan
SOUTHERN AUTO: Ind-Ra Assigns 'IND B+' Long-Term Issuer Rating
SRI KALEESWARA: ICRA Assigns B- Rating to INR5.0cr LT Loan
STEEL MAX: ICRA Revises Rating on INR9.0cr LT Loan to 'B'
STEEL PRODUCTS: ICRA Reaffirms 'C-' Rating on INR11.5cr Loan
STEELMAX ALLOYS: ICRA Revises Rating on INR4.0cr LT Loan to B
STRAIGHT EDGE: CARE Reaffirms 'B' Rating on INR10cr LT Loan
SUPREME POWER: ICRA Reaffirms 'B+' Rating on INR3.7cr LT Loan
TEHRI PULP: CARE Lowers Rating on INR67.35cr LT Loan to 'D'
THE WOODIND: ICRA Reaffirms 'B' Rating on INR6cr LT Loan
TRIBHUVAN SPINTEX: ICRA Suspends B+ Rating on INR26.5cr Loan
U. S. AGRAWAL: ICRA Suspends 'B' Rating on INR6.5cr Bank Loan
UTTAM GALVA: CARE Lowers Rating on INR3,933.94cr Term Loan to D
UTTAM VALUE: CARE Lowers Rating on INR1,390cr Loan to 'D'
UTTARANCHAL IRON: CARE Lowers Rating on INR22.36cr LT Loan to D
VARSHA CABLES: ICRA Reaffirms B+ Rating on INR8.0cr Cash Loan
VINAYAK HATCHERIES: ICRA Suspends 'B' Rating on INR7.11cr Loan
WORLD RETAILS: ICRA Suspends B+ Rating on INR9.5cr Cash Loan
I N D O N E S I A
PAKUWON JATI: S&P Raises CCR to 'BB-'; Outlook Stable
J A P A N
KAWASAKI KISEN: Moody's Lowers CFR to Ba3; Outlook Stable
MITSUI OSK: Moody's Puts Ba1 CFR Under Review for Downgrade
TAKATA CORP: Five Million New Recalls Ordered in Japan
M A C A U
MELCO CROWN (MACAU): S&P Affirms 'BB' CCR; Outlook Stable
M A L A Y S I A
1MALAYSIA: Calls For Meeting With Bondholders on May 23
P H I L I P P I N E S
LOYOLA PLANS: Can't Operate Yet, Insurance Commission Says
S I N G A P O R E
GLOBAL A&T: Moody's Retains Caa3 CFR on Appellate Ruling
S O U T H K O R E A
EXPORT-IMPORT BANK: KDB to Inject Capital Through KAI shares
T A I W A N
HTC CORP: Posts NT$2.6BB Net Loss in Quarter Ended March
X X X X X X X X
FIJI: Moody's Affirms B1 Rating; Outlook Positive
- - - - -
=================
A U S T R A L I A
=================
AMAROO EARLY: Placed Into Liquidation
-------------------------------------
Cliff Sanderson at Dissolve.com.au reports that Amaroo Early
Learning Centre Pty Ltd has been placed into liquidation. John
Gervase Shanahan of Gervase Consulting has been appointed
liquidator of the company on April 28, 2016.
According to the report, the company is expected to operate a new
childcare centre located at 2 Mornington Street in Amaroo that is
currently in development. Dissolve.com.au relates that the
liquidator said the company's debt was limited with 4 unsecured
creditors claiming a total of AUD10,000.
In 2013, the central block was reportedly bought by four
investors for AUD882,000. But the investors sold the block to a
company the next year with a deed offering the company the right
to enter into a lease for running the childcare centre following
its construction, Dissolve.com.au notes.
FARGO INVESTMENTS: First Creditors' Meeting Set For May 19
----------------------------------------------------------
John Bumbak and Cliff Rocke of KordaMentha were appointed as
administrators of Fargo Investments Pty Ltd ATF The Fargo Unit
Trust, trading as Haulex, on May 9, 2016.
A first meeting of the creditors of the Company will be held at
KordaMentha, Level 10, 40 St Georges Terrace, in Perth, on
May 19, 2016, at 11:00 a.m.
FLEXI ABS 2014-1: Fitch Affirms 'BBsf' Rating on Class E Notes
--------------------------------------------------------------
Fitch Ratings has affirmed 10 tranches across Flexi ABS Trust
2014-1 (Flexi 2014-1) and Flexi ABS Trust 2015-2 (Flexi 2015-2).
The Outlook on three tranches of Flexi 2014-1 has been revised to
Stable from Positive. The transactions are securitisations backed
by small balance consumer loan receivables. The notes were issued
by Perpetual Corporate Trust Limited in its capacity as trustee.
A full list of rating actions follows at the end of this ratings
action commentary.
KEY RATING DRIVERS
The affirmations reflect Fitch's view that initial sequential
amortisation has resulted in a build-up of credit enhancement for
the rated notes and the transactions' strong performance compared
with Fitch's expectations. Total net losses have been well below
Fitch's base cases to date and excess spread has been more than
sufficient to cover any losses incurred.
The revision of the Outlook to Stable from Positive on the class
C, D and E notes of Flexi 2014-1 reflects the adjustment of base
cases that were applied at the last review. The adjustments to
the base cases reflect higher historic losses in more recent
cohorts in the wider Flexi pool. The higher losses have not
materialised in either transaction.
RATING SENSITIVITIES
Both transactions are currently amortising pro-rata, limiting
additional build-up of subordination. Switch back to sequential
payment is only expected if a charge-off occurs or the 60+ day
arrears average over six months is greater than 4% of the pool.
The prospect of downgrade is considered remote at present, given
the performance of the pool to date, the strong excess spread and
subordination.
The revision of the Outlook to Stable from Positive in the class
C, class D and class E notes of Flexi 2014-1 reflects that future
upgrades are unlikely due to the higher base cases and higher
concentration as the pool shrinks. Both transactions can
withstand additional losses; cumulative losses could increase by
up to 1.5 times to be in line with Fitch's expected losses at the
'Bsf' scenario.
DUE DILIGENCE USAGE
No third party due diligence was provided or reviewed in relation
to this rating action.
DATA ADEQUACY
Fitch conducted a file review of 10 sample loan files focusing on
the underwriting procedures conducted by FlexiGroup compared to
its credit policy at the time of underwriting. Fitch has checked
the consistency and plausibility of the information and no
material discrepancies were noted that would impact Fitch's
rating analysis.
The full list of rating actions is shown below:
Flexi ABS Trust 2014-1
AUD24.2 million Class A2 notes (ISIN AU3FN0023800): affirmed at
'AAAsf'; Outlook Stable;
AUD5.1 million Class B notes (ISIN AU3FN0023818): affirmed at
'AAsf'; Outlook Stable;
AUD2.3 million Class C notes (ISIN AU3FN0023826): affirmed at
'Asf'; Outlook revised to Stable from Positive;
AUD1.7 million Class D notes (ISIN AU3FN0023834): affirmed at
'BBBsf'; Outlook revised to Stable from Positive;
AUD0.9 million Class E notes (ISIN AU3FN0023842): affirmed at
'BBsf'; Outlook revised to Stable from Positive.
Flexi ABS Trust 2015-2
AUD83.5 million Class A2 notes (ISIN AU3FN0027868): affirmed at
'AAAsf'; Outlook Stable;
AUD12.1 million Class B notes (ISIN AU3FN0027876): affirmed at
'AAsf'; Outlook Stable;
AUD9.1 million Class C notes (ISIN AU3FN0027892): affirmed at
'Asf'; Outlook Stable;
AUD7.1 million Class D notes (ISIN AU3FN0027900): affirmed at
'BBBsf'; Outlook Stable;
AUD4.0 million Class E notes (ISIN AU3FN0027918): affirmed at
'BBsf'; Outlook Stable.
PIVOTAL REIT: First Creditors' Meeting Set For May 18
-----------------------------------------------------
Benjamin Carson of Farnsworth Shepard were appointed as
administrators of Pivotal REIT Services Pty. Ltd. on May 6, 2016.
A first meeting of the creditors of the Company will be held at
Farnsworth Shepard, Level 5, 2 Barrack Street, in Sydney, on
May 18, 2016, at 11:00 a.m.
RICTON PTY: First Creditors' Meeting Set For May 18
---------------------------------------------------
Michael Oscar Basedow and Leigh Deveron Prior of Pitcher Partners
were appointed as administrators of Ricton Pty. Ltd., trading as
Hills Towing & Crash Repairs, on May 6, 2016.
A first meeting of the creditors of the Company will be held at
Pitcher Partners, Level 1, 100 Hutt Street, in Adelaide, on
May 18, 2016, at 10:00 a.m.
TERRAMUNDI PTY: First Creditors' Meeting Set For May 18
-------------------------------------------------------
Glenn Douglas Trinick of DCS Advisory was appointed as
administrator of Terramundi Pty Ltd, formerly Traded As "Diamond
Glass", on May 6, 2016.
A first meeting of the creditors of the Company will be held at
DCS Advisory, Level 1, 22 Prowse Street, in West Perth, on
May 18, 2016, at 10:00 a.m.
VJR PTY: Clifton Hall Appointed as Liquidator
---------------------------------------------
Timothy Clifton of Clifton Hall was appointed Official Liquidator
of VJR Pty Ltd on April 20, 2016, by Order of the Federal Court
of Australia.
=========
C H I N A
=========
ZHONGRONG INTERNATIONAL: S&P Cuts ICR to 'BB-'; Outlook Negative
----------------------------------------------------------------
S&P Global Ratings said that it had lowered its long-term issuer
credit rating on Zhongrong International Holdings Ltd. (Zhongrong
BVI) to 'BB-' from 'BB'. The outlook is negative. S&P affirmed
the 'B' short-term issuer credit rating on the company.
At the same time, S&P lowered the long-term issue rating on
Zhongrong BVI's guaranteed debt to 'BB-' from 'BB'. S&P also
lowered the Greater China regional scale ratings on the company
to 'cnBB/cnB' from 'cnBBB-/cnA-3' and on the notes to 'cnBB' from
'cnBBB-'.
S&P also removed all the ratings from CreditWatch, where they
were placed with negative implications on April 25, 2016.
Zhongrong BVI is a British Virgin Islands-incorporated
intermediate holding company under China-based Zhongrong
International Trust Co. Ltd. (ZRITC).
"The downgrade reflects our assessment that extraordinary
government support to Zhongrong BVI's parent company, through
China Trust Industry's Security Fund (CTISF), is unlikely to
extend to Zhongrong BVI," said S&P Global Ratings credit analyst
Harry Hu. This is because Zhongrong BVI's business mix is more
weighted toward non-trust related businesses, which are not
subject to China Banking Regulatory Commission regulations and
the associated subscription to the security fund.
While S&P believes CTISF would provide direct support to Chinese
trust companies and their trust products (there have already been
several cases), the support for non-trust related businesses and
the subsidiaries that run them is uncertain. This is because
non-trust businesses are outside of CTISF's direct mandate. The
high growth in these businesses means CTISF is likely to stick to
its mandate and be more selective in bailing out non-trust
related operations. The extension of such support to overseas
subsidiaries in non-trust businesses adds a further level of
uncertainty, in S&P's view.
S&P continues to view Zhongrong BVI as a highly strategic
subsidiary of Zhongrong group and rate the company one notch
below the unsupported group credit profile (GCP). However, S&P's
assessment of Zhongrong BVI's strategic importance to the group
could reduce if the company's financial performance is
persistently under pressure over the next 12 months. On a stand-
alone level, Zhongrong BVI would then also depend more on
favorable business, financial, and economic conditions to meet
its financial commitments. Zhongrong BVI reported significant
financial losses in 2015, and S&P believes its performance
remains under pressure in 2016.
In S&P's view, Zhongrong BVI remains thinly capitalized and is
vulnerable to investment losses and valuation changes on its
investment portfolio. This is notwithstanding the recent capital
injection of Chinese renminbi (RMB) 220 million from its parent
to help Zhongrong BVI satisfy the minimum-equity covenant under
its guaranteed bond. Zhongrong International Bond 2015 Ltd., a
wholly owned subsidiary of Zhongrong BVI issued the bond.
The rating on Zhongrong BVI is derived from the GCP of ZRITC,
which S&P views as a government-related entity benefitting from
potential extraordinary support through the CTISF.
"The negative outlook on Zhongrong BVI reflects the possibility
that the company's strategic importance to the group and stand-
alone credit profile could deteriorate over the next 12 months,"
said Mr. Hu.
S&P may lower the rating if Zhongrong BVI continues to make
losses over the next year. S&P notes that substantial strategic
deviations from the parent's core asset management business could
also trigger a downgrade.
S&P could revise the outlook to stable if Zhongrong BVI becomes
profitable, demonstrates a track record in meeting business and
financial targets, and maintains strategic alignment with its
parent company.
================
H O N G K O N G
================
MELCO CROWN: Moody's Retains MCE's Ba3 CFR on Share Repurchase
--------------------------------------------------------------
Moody's Investors Service says that Melco Crown Entertainment
Limited's (unrated) share repurchase is credit negative for MCE
Finance Limited, but the move will not immediately affect MCE
Finance's Ba3 corporate family rating, Ba3 senior unsecured
rating, or the stable outlook on the ratings.
On May 4, 2016, Melco Crown Entertainment, the parent of MCE
Finance, entered into an agreement to purchase 155 million Melco
Crown Entertainment ordinary shares from Crown Asia Investments
Pty. Ltd. (unrated), a wholly-owned subsidiary of Crown Resorts
Limited (Baa2 stable), for $801 million.
The transaction, to be funded by internal resources, represents
around 39% of Melco Crown Entertainment's unrestricted cash as of
March 2016.
"The sizable transaction will materially reduce MCE Finance's
balance sheet liquidity for its own working capital and capex
needs, because MCE Finance will provide the majority of the funds
for the share buyback," says Kaven Tsang, a Moody's Vice
President and Senior Credit Officer.
Moody's estimates that approximately $600 million of the funding
will come from MCE Finance.
Nevertheless, MCE Finance's liquidity will remain adequate after
the completion of the transaction.
MCE Finance held cash and deposits of around $1.6 billion at end-
2015. This amount can fully cover its capex of about $350-$400
million and debt repayments of about $23 million in 2016, the
$350 million special dividends announced in February 2016 and
this share buyback.
Moody's also expects that MCE Finance will continue to generate
positive free cash flow, supported by an estimated annual EBITDA
of $700-$800 million from City of Dreams, its flagship gaming
property in Macau, and based on its moderate amount of capex.
The company also has access to undrawn committed banking
facilities of $1.25 billion as backup liquidity.
Apart from liquidity, MCE Finance's established operations in
Macau and strong financial metrics continue to support its Ba3
ratings.
MCE Finance's adjusted debt/EBITDA registered 2.0x in 2015 and
its EBITDA/interest was at 12.2x in the same period. Moody's
expects that these ratios will remain largely stable over the
next 12-18 months, with adjusted debt/EBITDA at 2.0x-2.5x and
EBITDA/interest exceeding 10x. These ratios are strong for its
Ba3 ratings.
Moody's notes that the repurchased shares will be canceled in due
course, after the completion of the transaction.
As a result, Crown Resorts' shareholding will fall to about 27.4%
from 34.3%, after the completion of the transaction.
Nevertheless, Crown Resorts will remain Melco Crown
Entertainment's second largest shareholder. Moody's does not
expect this change in shareholding to materially affect MCE
Finance's operations or credit profile.
MCE Finance Limited is a subsidiary of Melco Crown Entertainment
Limited (unrated), which is in turn majority-owned by the
Australian-based gaming operator, Crown Resorts Limited (Baa2
stable) and the Hong Kong-listed Melco International Development
Limited (unrated), with each company holding an approximately
34.3% equity stake as of 5 April 2016.
=========
I N D I A
=========
ADITYA RICE: ICRA Reaffirms B+ Rating on INR10.41cr Loan
--------------------------------------------------------
ICRA has reaffirmed the long term rating of [ICRA]B+ assigned to
INR10.41 crore fund based limits of Aditya Rice Industries. ICRA
has also reaffirmed the rating of [ICRA]B+ assigned to INR2.59
crore unallocated limits of ARI.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based limits 10.41 [ICRA]B+ re-affirmed
Unallocated limits 2.59 [ICRA]B+ re-affirmed
The reaffirmation of rating continues to be constrained by ARI's
small scale of operations in the rice milling industry, its weak
financial profile characterized by low profitability indicators,
high gearing of 2.96 times, moderate coverage indicators with
interest coverage ratio of 2.03 times and NCA/total debt at 13%
and risks arising from partnership nature of the firm. The rating
is further constrained by intense competitive nature of the rice
milling industry restricting operating margins and agro climatic
risks, which can affect the availability of the paddy in adverse
weather conditions. The rating is however supported by the long
track record of the promoters in the rice mill business and ease
in paddy procurement due to plant location in major paddy
cultivating region of the country. Further, favorable demand
prospects of the industry with India being the second largest
producer and consumer of rice internationally augurs well for the
firm.
Going forward, the firm's ability to improve its profitability
and manage its working capital requirements will be key rating
sensitivities from credit perspective.
Aditya Rice Industries (ARI) was founded in the year 2011 as a
partnership firm and is engaged in the milling of paddy and
produces raw and boiled rice. The firm started its operations
from February 2012. The firm has a milling unit in Settipalem
village of Nalgonda district of Telangana with an installed
capacity of 8 tons per hour.
Recent Results
ARI has reported an operating income of INR24.73 crore and net
profit of 0.14 crore respectively in FY2015 as against an
operating income and net profit of INR41.19 crore and INR0.34
crore in FY2014.
AESTHETIC STAMPINGS: ICRA Assigns 'B+' Rating to INR.5cr Loan
-------------------------------------------------------------
ICRA has assigned a long term rating of [ICRA]B+ to the INR0.50
crore cash credit facility of Aesthetic Stampings and Laminations
Limited (ASLL). ICRA has also assigned a short term rating of
[ICRA]A4 to the INR6.00 crore fund based facility and to the
INR5.50 crore non-fund based facility of ASLL. The combined
utilization of non-fund based and short-term fund based facility
should not exceed INR6.00 crore.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based limits
Cash Credit 0.50 [ICRA]B+ assigned
Fund based limits
Bill of Exchange 6.00 [ICRA]A4 assigned
Non Fund Based
limits Letter of
credit 5.50 [ICRA]A4 assigned
The assigned ratings are constrained by Aesthetic Stampings and
Laminations Limited's (ASLL) moderate scale of operations which
limits economies of scale and the company's limited track record
in manufacture of motor stampings and electrical laminations
business. Nevertheless, ICRA considers the promoter's long
experience in the steel trading and processing activities. ICRA
takes note of the company's low value additive nature of the
manufacturing operation with considerable dependence on leased
capacity alongwith significant revenue contribution from steel
trading activity which has led to weak operating profit margin.
Despite a moderate capital structure, the company's thin
profitability has led to weak coverage indicators, with elevated
total debt/OPBDITA. While the company's capital structure is
moderate at present, the debt-funded capex plan is likely to
impinge on the debt servicing capabilities of the company in the
short term. Further, the ratings are constrained by the
susceptibility of the company's profitability to inventory risks
since the key raw materials (CRNO and CRGNO) are price sensitive
metals as well as adverse foreign exchange fluctuations, with no
firm hedging policy in place. The ratings further incorporate the
risks arising from high customer concentration, albeit the
reputed ones and highly competitive nature of the industry which
leads to pressure on profit margins.
The ratings, however, derives comfort from the healthy ramp-up of
operations in the last three years and presence of secured orders
through monthly off-take arrangement with a reputed original
equipment manufacturer (OEM) which lends visibility to the
revenues of the company in the near to medium term .
Going forward, the company's ability to ramp up its scale of
operations while improving its operating profitability in the
backdrop of competitive pricing pressure will be critical for
improvement in debt coverage indicators and sustenance of its
moderate capital structure in the midst of the near term planned
debt funded capex will be the key rating sensitivities.
Incorporated in the year 2006, Aesthetic Stampings & Laminations
Limited (ASLL) is jointly promoted by Mr. Harsh Choudhary, Mr.
Mohan Nair and Mr Omprakash Trivedi. The company is closely held
by the promoters and their family owned companies. Initially, the
company was mainly engaged in trading of cold rolled grain
oriented (CRGO), cold rolled (CR) steel, hot Rolled (HR) steel
and non grain oriented steel sheets. Gradually, in May 2014, the
company commenced manufacturing of motor stampings for rotating
machines and electrical laminations. The company has setup its
manufacturing facility in Palghar, Maharashtra and also has
leased capacity from an ISO 9001 and 14001 certified company
located at Kanchad Wada in Maharashtra. The aggregate installed
capacity is 9000 MTPA.
Recent Results:
ASLL has reported a net profit of INR0.29 crore on an operating
income of INR52.19 crore for the year ending 31st March 2015
(audited) and a profit before tax of INR0.80 crore on an
operating income of INR44.32 crore for the nine month period
ending 31st December 2015 (provisional statements).
ANIL CONSTRUCTION: Ind-Ra Assigns 'IND BB-' LT Issuer Rating
------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Anil
Construction Company (ACC) a Long-Term Issuer Rating of
'IND BB-'. The Outlook is Stable.
KEY RATING DRIVERS
The ratings reflect ACC's small scale of operations and moderate
outstanding order book. In FY15, the company reported revenue of
INR159m and in FY16, as per provisional figures from management,
revenue was INR198 million. Currently, ACC has an outstanding
order book of INR230 million.
The ratings are also constrained on account of the company's
presence in the highly competitive and fragmented construction
industry, coupled with its susceptibility to volatile raw
material prices and high customer concentration, since it mainly
executes road construction and maintenance contracts for the
Madhya Pradesh Rural Road Development Authority (MPRDA).
However, the ratings are supported by ACC's moderate credit
profile, with EBITDA interest coverage being 2.2x in FY15 (FY14:
3.4x), net financial leverage being 2.0x (negative 1.0x) and
operating EBITDA margins of 4.8% (4.3%). The ratings also take
into account its partners' experience of almost two and a half
decades in the road construction and maintenance segment. ACC's
liquidity was comfortable, as seen in the 76% average utilisation
of working capital limits in the 12 months ended March 2016.
RATING SENSITIVITIES
Positive: An improvement in the scale of operations and overall
credit metrics would lead to a positive rating action.
Negative: A decline in the scale of operations and deterioration
in its credit profile may lead to a negative rating action.
Incorporated in 2000, ACC is a partnership firm engaged in road
construction and maintenance for MPRDA, with whom it has a 'Class
A' contractor status.
ACC's ratings:
-- Long-Term Issuer Rating: assigned 'IND BB-'; Outlook Stable
-- INR30.0 million fund-based facilities: assigned 'IND BB-';
Outlook Stable
-- INR70.0 million non-fund based facilities: assigned 'IND A4+'
BABANRAOJI SHINDE: ICRA Assigns 'D' Rating to INR164.31cr Loan
--------------------------------------------------------------
ICRA has assigned the long term rating of [ICRA]D to the
INR300.00 crore (enhanced from INR230.00 crore) long term fund
based facilities of Babanraoji Shinde Sugar and Allied Industries
Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term, Fund
based limits
Cash Credit 164.31 [ICRA] D assigned/outstanding
Long term, Fund
based limits
Term Loan 127.32 [ICRA] D outstanding
Long term Unallocated 8.37 [ICRA] D outstanding
The assigned rating reflects recent delays by the company in
servicing its debt obligations owing to time overrun in the
projects resulting into delays in starting cane crushing which
along with high inventory maintained at the previous year end
resulting into stretched liquidity position. The rating continues
to factor in regulatory risks in the industry regarding cane
pricing, export regulations and agro climatic risks inherent in
the industry. However, forward integrated sugar plant with co-
generation unit will provide an additional source of revenue and
some cushion against the cyclicality in sugar business. ICRA has
taken a note of established track record of promoters in sugar
industry along with location advantage with mill located in cane
surplus region. Going forward, timely repayment of debt
obligations, ensuring adequate crushing period and maintaining
adequate working capital cycle will remain key rating sensitivity
factors.
BSS was incorporated in 2011 and is involved in manufacturing of
sugar and its allied products. The company has 5000 TCD (tonnes
crushed per day) sugar plant integrated with co-generation unit
25 MW (mega watt). The plant is located in Solapur district of
Maharashtra. The company commenced its operations in Feb'15 while
co-generation operations began in Mar'15.
BHAGAT FORGE: CARE Reaffirms B+ Rating on INR12.63cr LT Loan
------------------------------------------------------------
CARE reaffirms the ratings assigned to the Bank Facilities of
Bhagat Forge Limited Ratings.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 12.63 CARE B+ Reaffirmed
Short-term Bank Facilities 1.10 CARE A4 Reaffirmed
Rating Rationale
The ratings assigned to the bank facilities of Bhagat Forge
Limited (BFL) continue to be constrained by its small scale of
operations, weak solvency position and working capital intensive
nature of operations. The ratings are further constrained by the
susceptibility of margins to fluctuations in raw material prices
& foreign exchange rates and BFL's presence in a highly
fragmented industry characterized by intense competition. The
ratings, however, derive strength from the experienced promoters,
healthy operating profit margins and the company's presence in
different segments of the automobile industry. Going forward, the
ability of the company to profitably scale up its operations
along with improvement in overall solvency position and efficient
working capital management would remain the key rating
sensitivities.
BFL was initially incorporated by the name Bharat Cam Private
Limited, in June 1996. In June 2002, the constitution was changed
to a closely-held public limited company and the name was changed
to BFL. The company is currently being managed by Mr Harbans
Singh, Mr Kamaljit Singh and Mrs Komalpreet Kaur. BFL is engaged
in the manufacturing of automobile camshafts used in two
wheelers, four wheelers, tractors and railways. The company has
its manufacturing facility located at Ludhiana, Punjab with total
installed capacity of manufacturing 120,000 pieces per annum as
on January 31, 2015. The company sells its products to Original
Equipment Manufacturers (OEMs) and to various wholesalers located
in Punjab, Delhi and Maharashtra. Furthermore, BFL also exports
the products to Germany and Arab countries (exports constituted
around 6% of the total operating income in FY15 [refers to the
period April 01 to March31]). The main raw materials for BFL are
steel rounds and steel sheets which are procured directly from
domestic steel manufacturers. The company is ISO 9001:2008
certified for quality and manufacturing process.
BFL reported a PAT of INR0.03 crore on a total income of INR10.20
crore in FY15 as against the PAT of INR0.12 crore on a total
income of INR9.26 crore in FY14. In FY16 (as per the unaudited
results), BFL achieved a total income of INR16.82 crore till
March 29, 2016.
BHALERAO BROTHERS: Ind-Ra Assigns IND B- Long-Term Issuer Rating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Bhalerao
Brothers & Associates (BBA) a Long-Term Issuer Rating of
'IND B-'. The Outlook is Stable. The agency has also assigned the
company's proposed INR75 million long-term loans a Long-term
'Provisional IND B-' rating with a Stable outlook.
KEY RATING DRIVERS
The ratings reflect the execution risks associated with BBA's
project -- Savannah Hills -- construction for which is likely to
start in 1QFY17. This project is scheduled to be completed by
end-FY20.
The ratings benefit from BBA's promoters' extensive track record
of 22 completed projects in Pune and their combined experience of
more than four decades in the real estate segment.
RATING SENSITIVITIES
Positive: Commencement of sales and construction after the
sanction of the INR75m long-term loans, leading to strong
visibility of cash flows, will be positive for the ratings.
Negative: Delays in the project's monetisation, leading to impact
on the company's debt-servicing ability, will be negative for the
ratings.
COMPANY PROFILE
Pune-based BBA was incorporated in 2015. Its current project --
Savannah Hills -- consists of three residential building with 64
flats and one commercial building; they combined cover a total
saleable area of 82,088 sq. ft. The construction has received
approvals from various regulatory authorities and the project is
slated for completion by November 2019.
BINDAL IRON: ICRA Suspends B/A4 Rating on INR20cr Loan
------------------------------------------------------
ICRA has suspended [ICRA]B/[ICRA]A4 ratings assigned to the
INR20.00 crore fund based and non fund based facilities of Bindal
Iron and Steel Company. The suspension follows ICRA's inability
to carry out a rating surveillance in the absence of the
requisite information from the company.
According to its suspension policy, ICRA may suspend any rating
outstanding if in its opinion there is insufficient information
to assess such rating during the surveillance exercise.
BSCPL AURANG: Ind-Ra Cuts INR8,560MM Bank Loan Rating to 'IND B+'
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has downgraded the rating on
BSCPL Aurang Tollway Limited's (BATL) INR8,560 million senior
project bank loan to 'IND B+' from 'IND BB+'. The Outlook is
Negative.
KEY RATING DRIVERS
The downgrade reflects a delay in project completion beyond the
revised deadline for the commencement of operations (March 2016),
management's lowered expectations for toll collections and
consequent impact on BATL's debt service coverage ratios. The
Negative Outlook reflects the risks in timely receipt of
approvals for premium deferment, given that the first principal
repayment is scheduled for September 2016.
BATL had completed 84.72% of the project as at January 2016 and
is awaiting a provisional commercial operation date (PCOD) from
the National Highways Authority of India (NHAI; 'IND
AAA'/Stable). Toll collection is slated to begin upon receipt of
the PCOD. The expected shortfall in revenue exerts pressure on
BATL's debt service metrics, leading to an elevated dependence on
the financially weak sponsor. Additionally, management's plans to
apply for premium deferment could materialise only after receipt
of the PCOD.
The sponsors, BSCPL Infrastructure Limited and BSCPL Infra
Projects Ltd, a subsidiary of BSCPL Infrastructure Limited, have
infused 87% of the total committed equity of INR3,800m into BATL.
Debt equivalent to 83% of the sanctioned loans was drawn down as
at 11 February 2016.
The rating is constrained by patronage-related risks as in any
toll road project. Management has revised its toll estimates
downward and expects overloading charges to contribute to some
part of revenue; however, traffic and toll revenue will be clear
only upon completion of the project and the commencement of
tolling. Some comfort is drawn from the fact that the project
stretch is an arterial part of National Highway 6 (NH-6), a major
connecting link between West Bengal, Orissa, Chhattisgarh,
Maharashtra and Gujarat. The project road also passes through
Barnawapara sanctuary, one of the major tourist attractions in
the region. Price risk is mitigated as toll rates are partially
linked to inflation indices.
Given the likely revenue shortfall, BATL's fixed monthly premium
payable to NHAI poses significant risk, since non-payment of this
premium is an event of default under the concession agreement.
The premium amounts to INR297 million in the first year, with an
annual escalation of 5%.
The project is also exposed to refinance risks given the
amortisation schedule of the rated debt, which consists of two
tranches, Tranche I of INR5,400m and Tranche II of INR3,160m.
Tranche II is scheduled to fully amortise through 54 unequal
repayments from September 2016 to December 2029. Around 80% of
Tranche I is scheduled to amortise through 46 unequal repayments
from September 2016 to December 2027, with 20% bullet repayment
in December 2027. Despite the lower base-year revenue estimates,
Ind-Ra believes that the project has enough economic capacity to
retire debt through its long tail of over 10 years. Thus, BATL
has potential to refinancing the debt with an increase in debt
tenor, to gain relief from stress in cash flows.
RATING SENSITIVITIES
Positive: Successful project completion with positive traffic
ramp-up, resulting in revenue above management forecasts, could
result in a rating upgrade.
Negative: Delay in receipt of a PCOD and/or traffic
underperformance and/or lack of visibility in premium deferment
could be negative for the rating.
BATL is a special purpose vehicle that has been incorporated to
implement a 150.40km lane expansion (four-laning) between
Sambalpur in Orissa and Aurang in Chhattisgarh on NH-6, under a
28-year concession from NHAI. The estimated project cost of
INR12,360 million is being funded by a term loan of INR8,560
million and sponsor's equity of INR3,800 million.
CAPARO ENGINEERING: CARE Raises Rating on INR269.38cr Loan to B
---------------------------------------------------------------
CARE revises ratings assigned to the bank facilities of Caparo
Engineering India Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 269.38 CARE B Revised from
CARE B to CARE D and
then upgraded to
CARE B
Short term Bank Facilities 118.50 CARE A4 Revised from
CARE A4 to CARE D and
then upgraded to
CARE A4
Rating Rationale
The revision in the ratings assigned to the bank facilities of
Caparo Engineering India Ltd. (CEIL) to 'CARE D' (Single D)
factors in instances of past delays in servicing of debt
obligations. The subsequent revision in the rating to CARE B/CARE
A4 takes into account the improvement in the debt-servicing track
record of the company.
The ratings continue to derive strength from its experienced and
resourceful promoters with demonstrated continuous funding
support over the years and CEIL's strong business association
with major auto manufactures in India.
The rating also takes cognizance of INR227 crore being infused by
holding company during FY16. The ratings, however, continued to
be constrained by the weak financial risk profile marked by
continued decline in operating income along with losses at net
level, leveraged capital structure, weak debt coverage indicators
and liquidity position.
The rating is also constrained by the working capital intensive
nature of business operations and cyclicality associated with the
auto industry.
Going forward, ability of the company to profitably scale up the
operations, while managing its working capital requirements and
register an improvement in its capital structure shall remain the
key rating sensitivities.
Caparo Engineering India Ltd. (CEIL) incorporated in May 2000, is
engaged in the manufacturing of auto components including sheet
metal components, tubes and fasteners. The company's product
range includes outer body panel, large inner panels, brackets,
frame add-on parts, fasteners, electric resistance welded tubes
and cold-drawn welded tubes for automobile OEMs.Currently, the
company has 19 manufacturing plants located at various locations
across India.CEIL has diversified operations and caters to the
demand of Original Equipment Manufacturers (OEMs) in the
passenger vehicles, commercial vehicles and three wheelers
segment viz. Nissan Motors, Honda Motors, JCB, Tata Motors etc.
During FY15 (refers to the period April 1 to March 31), CEIL
registered a operating loss of INR119.80 crore and a net loss of
INR228.46 crore, respectively, on a total operating income of
INR636.22 crore.
CITI CENTRE: CARE Reaffirms 'B' Rating on INR20cr LT Loan
---------------------------------------------------------
CARE reaffirms the rating assigned to the Bank Facilities of
Citi Centre Developers.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 20 CARE B Reaffirmed
Rating Rationale
The rating assigned to the bank facilities of Citi Centre
Developers (CCD) continue to be constrained by the nascent stage
of the project with significant increase in its scope, low
booking status reflecting marketing risk associated with the
project and non-achievement of complete financial closure for the
project, and high dependence on customer advances.
The rating is also constrained by CCD's exposure to local demand-
supply dynamics, inherent risks associated with the real estate
industry and partnership nature of constitution. The rating,
however, derives strength from the experience of the promoters in
the real estate industry and well-connected location of the
project. Going forward, the ability of the firm to achieve the
financial closure, execute the project within the revised time &
cost estimates along with the timely sale of the project space at
envisaged prices and timely receipt of customer advances would
remain the key rating sensitivities.
CCD is a partnership concern established in 2013 by Mr Vijay
Kumar Jindal, Mr Deepak Aggarwal Mr Tejpal Gupta as its partners
having 30%, 35% and 35% share in profit and loss, respectively.
The firm is currently developing its maiden commercial-cum-
residential complex project named 'Chandigarh Citi Centre' at
Zirakpur, Punjab, which was launched in November 2013. The
project consists of a total of 1,545 saleable units including
1,437 shops and 108 residential apartments. There has been a
change in the scope of the project whereby the firm now plans to
construct 1,437 shops and 108 residential apartments instead of
152 shops planned earlier. Subsequently, there has been a cost
overrun and the project is now expected to be completed at a
total project cost of INR343 crore (Rs.43.75 crore planned
earlier).
The project cost is expected to be met through the promoters'
contribution of INR35 crore (Rs.20 crore in the form of capital
and remaining in the form of unsecured loans), term loan of INR70
crore (Rs.20 crore sanctioned as on March 31, 2016) and balance
INR238 crore through customer advances. The project is now
expected to be completed by November 2017 (instead of September
2015 planned earlier).
As on March 12, 2016, INR119.62 crore has been incurred on the
project funded through promoters' contribution of INR25.00 crore
(INR10.00 crore in the form of capital and INR15.00 crore. in the
form of unsecured loans), term loan of INR18.00 crore and
advances from customers of INR76.62 crore. Additionally, out of
the total saleable area of 9.38 lakh square feet (lsf), the area
sold stood at 3.09 lsf (33%).
COLOR GRANITO: CARE Assigns B+ Rating to INR30cr LT Loan
--------------------------------------------------------
CARE assigns 'CARE B+' and 'CARE A4' ratings to the bank
facilities of Color Granito Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 30.00 CARE B+ Assigned
Long-term/Short-term Bank 10.00 CARE B+/CARE A4
Facilities Assigned
Short-term Bank Facilities 4.45 CARE A4 Assigned
Rating Rationale
The ratings assigned to the bank facilities of Color Granito
Private Limited (CGPL) are constrained on account of
implementation and stabilization risk associated with the ongoing
leveraged project, presence in highly competitive ceramic
industry and fortune linked with demand from real estate along
with susceptibility of profit margins to volatility in raw
material prices.
The ratings, however, derive strength from experienced promoters,
location advantage and benefits from established marketing
network of associate concerns. CGPL's ability to complete the
project within time and cost parameters and achievement of
envisaged sales and profitability while managing its working
capital efficiently post completion of project would be key
rating sensitivity.
Wankaner-based (Gujarat), CGPL was incorporated in September 2015
by Mr. Vipul Patel and Mr. NishantuAghara to setup a green field
project of manufacturing of vitrified tiles with installed
capacity of 72,000 MTPA. Total cost of project is estimated at
INR51 crore, which is proposed to be funded through a term loan
of INR 30 crore, promoters' contribution of INR16.75 crore and
remaining through unsecured loan of INR4.25 crore (subordinated
to bank debt). The commercial operations are expected to start
from October, 2016. Promoters have decade long experience in
ceramics industry and had promoted M/s. Color Tiles Pvt. Ltd.
(CTPL; started in 2005) and M/s. Senis Ceramic Pvt. Ltd. (SCPL;
started in 2007) which are engaged into manufacturing of wall
tiles. Both jointly had reported TOI of INR55 crore in FY15.
EASUN REYROLLE: ICRA Suspends 'D' Rating on INR174cr Loan
---------------------------------------------------------
ICRA has suspended the [ICRA]D rating assigned to the INR174.00
Crore long term fund based facilities of Easun Reyrolle Limited.
ICRA also suspends the [ICRA]D rating assigned to the INR245
crore non fund based facilities of the company. The suspension
follows ICRA's inability to carry out a rating surveillance in
the absence of the requisite information from the Company.
GOPAL SHIVHARE: CARE Assigns 'C' Rating to INR5.0cr LT Loan
-----------------------------------------------------------
CARE assigns 'CARE C' and 'CARE A4' ratings to the bank
facilities of Gopal Shivhare.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 5.00 CARE C Assigned
Long/Short term Bank 3.00 CARE C/CARE A4
Facilities Assigned
Rating assigned by CARE is based on the capital deployed by the
proprietor and the financial strength of the firm at present. The
rating may undergo change in case of withdrawal of capital or the
unsecured loans brought in by the proprietor in addition to the
financial performance and other relevant factors.
Rating Rationale
The ratings assigned to the bank facilities of Gopal Shivhare
(GSH) are constrained on account of the stressed liquidity
arising out of working capital intensive operations leading to
delay in servicing of its interest on working capital loans in
the past.
The ratings are also constrained on account of its weak debt
coverage indicators, high leverage and its operations in a highly
regulated liquor industry. The ratings, however, derive strength
from its experienced promoters. GSH's ability to improve its
liquidity by managing its working capital requirement efficiently
and improvement in the debt protection indicators are the key
rating sensitivities.
Established in 2006, GSH is a proprietorship firm which is into
the business of retailing of alcohol. GSH is part of Shivhare
liquor group based in Madhya Pradesh (MP). GSH holds retail
liquor supplier license in MP and undertakes retail trade of
Indian Made Foreign Liquor (IMFL), beer, country liquor (CL),
wine etc. The firm enters into open tendering process every year
to avail license for the retailing of the liquor. Depending upon
the allotment of shops during tendering, the number of shops held
by the firm varies every year. The shops are allotted in MP by
the state government through a competitive bidding process and
for FY15 (refers to the period April 1 to March 31), the firm had
received license for three shops. Of these three shops, two were
of IMFL and one of CL. As per FY15 (audited), GSH has reported
total operating income (TOI) of INR31.42 crore (FY14: INR27.57
crore) and profit after tax (PAT) of INR0.25 crore (FY14: INR0.20
crore).
H. P. RAJYAGURU: CARE Assigns B+ Rating to INR6cr LT Loan
---------------------------------------------------------
CARE assigns 'CARE B+' and 'CARE A4' ratings to the bank
facilities of H. P. Rajyaguru.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 6 CARE B+ Assigned
Short term Bank Facilities 4 CARE A4 Assigned
Rating Rationale
The ratings assigned to the bank facilities of H. P. Rajyaguru
(HPR) are primarily constrained on account of its constitution as
a proprietorship firm along with small scale of operations with
low profitability.
The ratings are also constrained on account of geographical
concentration risk, modest order book position, leveraged capital
structure, modest debt coverage indicators, moderate liquidity
position and low net worth position. The ratings, however, derive
comfort from the extensive experience of the proprietor and
established track record of operations in the construction
industry. The ability of the firm to tap more projects and
diversify the client base geographically as well increasing its
scale of operations will be the key rating sensitivities.
Furthermore, improving profit margins, capital structure and debt
coverage indicators would also remain crucial.
Rajkot-based (Gujarat) HPR was established in June 2002 as a
proprietorship firm by Mr. Hetalbhai Pravinchandra Rajyaguru. The
entity is engaged in the civil construction work for various
state government departments located in the Gujarat state. The
firm is a registered 'AA' class contractor and is a special
category 'I' class contractor with the government of Gujarat R &
B department for construction work.
During FY15 (refers to the period April 1 to March 31), HPR
reported PAT of INR0.86 crore on a TOI of INR27.07 crore as
against PAT of INR0.33 crore on a TOI of INR10.69 crore during
FY14.
INDO DUTCH: ICRA Reaffirms B- Rating on INR8.50cr Term Loan
-----------------------------------------------------------
ICRA has reaffirmed the [ICRA]B- rating to the INR8.50 crore term
loan and INR1.50 crore open cash credit facility of Indo Dutch
Carpet Mfg. Pvt. Ltd.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based Limit
Term Loan 8.50 [ICRA]B- reaffirmed
Fund Based Limit
Open Cash Credit 1.50 [ICRA]B- reaffirmed
The rating reaffirmation continues to be constrained by IDCMPL's
small scale of operations and its weak financial profile,
reflected by its nominal profits and depressed coverage
indicators. The rating also takes into account the company's
stretched liquidity position, as reflected by high utilisation of
working capital bank limits. ICRA notes the limited bargaining
power of the company as it acts as a backward integration unit
for an established associated group company; though it mitigates
the off-take risk to a large extent. Also, debt has gradually
reduced over the years, however, debt repayments continue to
remain high relative to cash accruals of the company,
notwithstanding the fact that a substantial portion of the
company's debt has already been repaid.
The rating however, favourably factors in the promoter's
experience in the auto component industry and its proximity to
raw material sources that reduces freight costs.
ICRA expects IDCMPL's revenues to improve marginally in FY2016
compared to FY2015. IDCMPL's operating profits are likely to
remain vulnerable to adverse movements in prices of key input
materials and decline in realisation due to change in the group's
transfer-pricing policy. Further, the relatively lower interest
expenses and the increase in rental income are expected to
positively impact the net margins. IDCMPL's capital structure is
likely to improve due to a decline in long-term debt obligation.
In ICRA's opinion, the ability of the company to increase its
scale of operations and profitability while managing its working
capital requirements efficiently and the continuity of rental
income for the timely servicing of debt would be key rating
sensitivities, going forward.
Incorporated in 2006 as PCP Infrastructure Private Ltd, the
company changed its name to Indo Dutch Carpet Manufacturing
Private Ltd in 2008. The manufacturing facilities of the company
are at Pathredi and Khuskhera in Rajasthan's Bhiwadi district.
Commercial production from the two facilities began in December
2010 and July 2011 respectively. The plants have a combined
capacity of 500 metric tonne per annum (MTPA) of cotton felt and
around 28 lakh pieces of felt auto parts.
Recent Results
IDCMPL has reported profit before tax of INR0.11 crore
(provisional) on an operating income of INR7.05 crore
(provisional) during 9M FY2015-16 as compared to a net profit of
INR0.26 crore on an operating income of INR8.61 crore during
2014-15.
JAIPRAKASH ASSOCIATES: CARE Reaffirms D INR21,786.3cr Loan Rating
-----------------------------------------------------------------
CARE reaffirms the ratings assigned to the bank facilities and
instruments of Jaiprakash Associates Ltd.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 21,786.30 CARE D Reaffirmed
Short-term Bank Facilities 2,776.31 CARE D Reaffirmed
Long/Short-term Bank 5,387.97 CARE D/CARE D
Facilities Reaffirmed
Rating Rationale
The ratings of the bank facilities and instruments of Jaiprakash
Associates Ltd (JAL) continue to factor in delays in debt
servicing by the company due to its weak liquidity.
JAL is the flagship company of the Jaypee group and is engaged in
engineering and construction, cement, real estate and hospitality
businesses. JAL is a dominant player in the construction business
in the specialized field of civil engineering, design and
construction of hydro-power, river valley projects. JAL is also
one of the leading cement manufacturers in India. However, it has
entered into a definitive agreement to sell 17.2 mn tonnes per
annum (MTPA) of operational cement capacity besides 4 MTPA of
under implementation grinding unit to Ultratech Cement Ltd (rated
'CARE AAA') and the group would retain 10.6 MTPA of capacity. JAL
is also undertaking power generation, power transmission, real
estate, road BOT and fertilizer businesses through its various
subsidiaries/SPVs. Pursuant to order dated September 14, 2015, of
Hon'ble High court of Allahabad, Jaypee Sports International Ltd
(JPSI, a wholly-owned subsidiary of JAL) got merged into JAL. The
said order/scheme has become effective on October 16, 2015, ie,
the date when it has been filed with the registrar of companies,
the appointed date of amalgamation being April 01, 2014. With the
said amalgamation, all assets, liabilities, obligations etc of
JPSI have become the assets, liabilities, obligations of JAL from
the appointed date. As such, the results of JPSI stand merged in
the financial statements of JAL.
On account of deterioration in the company's financial
performance, increased debt levels and delay in receipt of funds
through monetization of assets, the liquidity position of the
company has been impacted, leading to delays in debt servicing by
the company.
For FY15 (refers to the period April 1 to March 31), JAL
(Standalone) reported net loss of INR1,278.74 crore on a total
operating income of INR11,175.46 crore. For 9MFY16, JAL reported
net loss of INR1,852.60 crore on operating income of INR6,887.66
crore.
K. M. SUGAR: Ind-Ra Affirms 'IND BB' Long-Term Issuer Rating
------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed K. M. Sugar
Mills Limited's (KMS) Long-Term Issuer Rating at 'IND BB' with a
Stable Outlook. A full list of rating actions is at the end of
this commentary.
KEY RATING DRIVERS
The affirmation reflects KMS' continued high leverage levels
(total adjusted net debt/operating EBITDAR: 4.7x in FY15; 3.4x in
FY13) and moderate interest coverage (2.1x; 2.5x). The ratings
factor in KMS' moderate profitability with EBITDA margin of 5.5%
in FY15 (FY13: 11.8%). In 2015, KMS changed its financial year
end to March from September. Thus, FY15 was an 18-month period.
The ratings, however, are supported by KMS' continued large scale
of operations as visible in its revenue of INR5,504 million in
FY15. 9MFY16 provisional financials indicate revenue of
INR2,353.1 million.
The ratings factor in KMS' moderate liquidity profile as
reflected by its average maximum working capital limits
utilisation of close to 43% during the 12 months ended March
2016.
The ratings are also supported by the five-decade-long experience
of one of KMS' founders in the sugar industry.
Ind-Ra does not consider the grants KMS receives from Sugar
Development Fund for the ratings.
RATING SENSITIVITIES
Positive: A further improvement in the credit metrics will be
positive for the ratings.
Negative: Deterioration in the credit metrics, as well as the
overall liquidity profile, will be negative for the ratings.
COMPANY PROFILE
KMS manufactures sugar, distillery products and bio-fertilizers
at its plant in Faizabad (Uttar Pradesh). The company started its
operations as a partnership firm in 1942 and was converted into a
private limited company in 1971. KMS was converted into a public
limited company in 2005. Its sugar segment includes sugar,
molasses, and bio-compost manufactured fertilisers.
The company is managed by three directors - L.K. Jhunjhunwala,
Aditya Jhunjhunwala and Sanjay Jhunjhunwala.
KMS' ratings:
-- Long-Term Issuer Rating: affirmed at 'IND BB'; Outlook Stable
-- INR1,005.1 million fund-based facilities: affirmed at 'IND
BB'/Stable
-- INR544 million term loans (increased from INR317.2 million):
affirmed at 'IND BB'/Stable
-- INR20 million non-fund-based facilities: affirmed at
'IND A4+'
K S VENKATRAMAN: ICRA Suspends 'B' Rating on INR12cr Loan
---------------------------------------------------------
ICRA has suspended the long term rating of [ICRA]B assigned to
the INR12.00 Crore Fund based facility and the short term rating
of [ICRA]A4 assigned to the INR13.00 Crore Non-fund based
facility of K S Venkatraman & Co Private Limited. The suspension
follows ICRA's inability to carry out a rating surveillance, in
the absence of the requisite information from the company.
KAMLA SHIVHARE: CARE Assigns 'C' Rating to INR4.70cr LT Loan
------------------------------------------------------------
CARE assigns 'CARE C' and 'CARE A4' ratings to the bank
facilities of Kamla Shivhare.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 4.70 CARE C Assigned
Long/Short term Bank
Facilities 3.00 CARE C/CARE A4 Assigned
Rating assigned by CARE is based on the capital deployed by the
proprietor and the financial strength of the firm at present. The
rating may undergo change in case of withdrawal of capital or the
unsecured loans brought in by the proprietor in addition to the
financial performance and other relevant factors.
Rating Rationale
The ratings assigned to the bank facilities of Kamla Shivhare
(KSH) are constrained on account of the stressed liquidity
arising out of working capital intensive operations leading to
delay in servicing of its interest on working capital loans in
the past. The ratings are also constrained on account of its weak
debt coverage indicators, high leverage and its operations in a
highly regulated liquor industry.
The ratings, however, derive strength from its experienced
promoters. KSH's ability to improve its liquidity by managing its
working capital requirement efficiently and improvement in the
debt protection indicators are the key rating sensitivities.
Established in 1995, KSH is a sole proprietorship firm which is
into the business of retailing of alcohol. KSH is part of
Shivhare liquor group based in Madhya Pradesh (MP). KSH holds
retail liquor supplier license in MP and undertakes retail trade
of Indian made foreign liquor (IMFL), beer, country liquor (CL),
wine etc. The firm enters into open tendering process every year
to avail license for the retailing of the liquor. Depending upon
the allotment of shops during tendering, the number of shops held
by the firm varies every year. The shops are allotted in MP by
the state government through a competitive bidding process and
for FY15 (refers to the period April 1 to March 31), the firm has
received license for six shops. Of these six shops, two are of
IMFL and four of CL. As per FY15 (audited) financials, KSH has
reported total operating income (TOI) of INR43.71 crore (FY14:
INR28.12 crore) and profit after tax (PAT) of INR0.41 crore
(FY14: INR0.25 crore).
KOGTA INTERNATIONAL: ICRA Suspends D Rating on INR3.14cr Loan
-------------------------------------------------------------
ICRA has suspended [ICRA]D rating assigned to the INR4.14 crore,
long term loans & working capital facilities & [ICRA]D rating to
the INR3.86 crore, short term, fund based and unallocated
facilities of Kogta International Pvt Ltd. The suspension follows
ICRA's inability to carry out a rating surveillance in the
absence of the requisite information from the company.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term, fund
based limits
Cash credit 1.00 [ICRA]D Suspended
Long Term, fund
based limits
Term Loans 3.14 [ICRA]D Suspended
Long Term,
Unallocated 0.21 [ICRA]D Suspended
Short Term, fund
based limits 3.65 [ICRA]D Suspended
KIPL is a part of the Kogta group which undertakes manufacturing,
processing and trading of dals & pulses domestically through its
six group companies. The group has processing units in Jalgaon
and deals in all types of dals and pulses like Moong, Tur, Udad,
Masoor, Gram Flour etc. The group markets its commodities under
the brand 'Dal Parivar' throughout India.
KURMI ENERGY: CARE Lowers Rating on INR40.26cr LT Loan to 'D'
-------------------------------------------------------------
CARE revises ratings assigned to the bank facilities of Kurmi
Energy Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 40.26 CARE D Revised from
CARE BB-
Long term/Short term Bank 2.50 CARE D/CARE D Revised
Facilities from CARE BB-/ CARE A4
Rating Rationale
The revision in the ratings of the bank facilities of Kurmi
Energy Pvt Ltd (KEPL) takes into account the delays in servicing
of debt obligations by the company. Background KEPL is a special
purpose vehicle (SPV) formed for setting up a hydroelectric power
project of 7 MW with three turbines each of 2.33 MW at NantiKhad
in district Shimla, Himachal Pradesh (HP). The company is owned
by Kurmi Non-Conventional Energy Pvt Ltd (KNEPL) which is an
investment company promoted by Chandigarh Distillers & Bottlers
Ltd (CDBL, rated 'CARE A-') and Aqua Power Pvt Ltd.
KEPL has been given the right to establish, own, operate and
maintain the said project for a period of 40 years from the
Commercial Operation Date (COD). The project became fully
operational on May 23, 2015 with the commissioning of remaining 2
turbines.
During FY15 (refers to the period April 1 to March 31), on a
total operating income of INR2.63 crore, the company reported a
PBILDT and net loss of INR2.95 crore and INR7.63 crore
respectively.
KUT ENERGY: CARE Lowers Rating on INR257.14cr LT Loan to 'D'
------------------------------------------------------------
CARE revises ratings assigned to the bank facilities of Kut
Energy Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 257.14 CARE D Revised from
CARE BB-
Rating Rationale
The revision in the ratings of the bank facilities of Kut Energy
Pvt Ltd (KEPL) takes into account the delays in servicing of debt
obligations by the company.
KEPL is a Special Purpose Vehicle (SPV), set-up for the purpose
of setting up a hydro electric power project of 24 MW at KutKhad
in district Shimla, Himachal Pradesh. The company is a joint
venture between Kut Investments Pvt Ltd (KIPL, holds 51% stake)
and Kut Non-conventional Energy Pvt Ltd (KNEPL, holds 49% stake).
KEPL has rights to establish, own, operate and maintain the said
project for a period of 40 years from the Commercial Operation
Date (COD). The commissioning of the project has been revised
four times, earlier from June 2012 to April 2013, from April 2013
to May 2014, from May 2014 to April 2015, and further from April
2015 to March 2016. Due to unfavorable weather conditions
experienced at the project site and certain geological surprises
encountered during construction with an estimated project cost of
INR379.60 crore (revised from INR337.16crore).
LAXMI NARAYAN: CARE Assigns 'C' Rating to INR7.0cr LT Loan
----------------------------------------------------------
CARE assigns 'CARE C' and 'CARE A4' ratings to bank facilities of
Laxmi Narayan Shivhare.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 7.00 CARE C Assigned
Long/Short term Bank
Facilities 3.00 CARE C/CARE A4 Assigned
Rating assigned by CARE is based on the capital deployed by the
proprietor and the financial strength of the firm at present. The
rating may undergo change in case of withdrawal of capital or the
unsecured loans brought in by the proprietor in addition to the
financial performance and other relevant factors.
Rating Rationale
The ratings assigned to the bank facilities of Laxmi Narayan
Shivhare (LNSH) are constrained on account of the stressed
liquidity arising out of working capital intensive operations
leading to delay in servicing of its interest on working capital
loans in the past. The ratings are also constrained on account of
its weak debt coverage indicators, high leverage and its
operations in a highly regulated liquor industry.
The ratings, however, derive strength from its experienced
promoters. LNSH's ability to improve its liquidity by managing
its working capital requirement efficiently and improvement in
the debt protection indicators are the key rating sensitivities.
Established in 1990, LNSH is a sole proprietorship firm which is
into the business of retailing of alcohol. The firm also operates
a warehouse named M/s Maa Kaila Devi Warehouse. LNSH is part of
Shivhare liquor group based in Madhya Pradesh (MP). LNSH holds
retail liquor supplier license in MP and undertakes retail trade
of Indian made foreign liquor (IMFL), beer, country liquor (CL),
wine etc. The firm enters into open tendering process every year
to avail license for the retailing of the liquor. Depending upon
the allotment of shops during tendering, the number of shops held
by the firm varies every year. The shops are allotted in MP by
the state government through a competitive bidding process and
for FY15 (refers to the period April 1 to March 31), the firm has
received license for thirty six shops. Of these Thirty six shops,
nine are of IMFL and 25 of CL.
As per FY15 (audited), LNSH has reported total operating income
(TOI) of INR133.42 crore (FY14: INR99.07 crore) and profit after
tax (PAT) of INR0.98 crore (FY14: INR0.80 crore).
MAHARSHI RICE: ICRA Reaffirms B+ Rating on INR13.25cr Loan
----------------------------------------------------------
ICRA has reaffirmed the long term rating of [ICRA]B+ assigned to
INR13.25 crore fund based limits, [ICRA}A4 for INR0.35 crore non
fund based limits of Maharshi Rice Mills Private Limited. ICRA
has also reaffirmed the ratings of [ICRA]B+/[ICRA]A4 assigned to
INR2.80 crore unallocated limits of MRMPL.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based limits 13.25 [ICRA]B+ re-affirmed
Non fund Based Limits 0.35 [ICRA]A4 re-affirmed
Unallocated limits 2.80 [ICRA]B+ re-affirmed
The reaffirmation of ratings continues to be constrained by
MRMPL's small scale of operations in the rice milling industry,
its weak financial profile characterized by net losses in FY2015;
high gearing of 2.96 times, moderate coverage indicators with
interest coverage ratio of 2.82 times and NCA/total debt at 10%
as on March 31, 2015. The ratings are further constrained by
intensive competitive nature of the rice milling industry
restricting operating margins and agro climatic risks, which can
affect the availability of the paddy in adverse weather
conditions. The ratings are however supported by the long track
record of the promoters in the rice mill business and ease in
paddy procurement due to plant location in major paddy
cultivating region of the country. Further, favorable demand
prospects of the industry with India being the second largest
producer and consumer of rice internationally augurs well for the
firm.
Going forward, the company's ability to improve its profitability
and manage its working capital requirements will be key rating
sensitivities from credit perspective.
Incorporated in the year 2005, Maharshi Rice Mills Private
Limited (MRML) is engaged in milling of paddy and produces raw
rice and boiled rice. The rice mill is located at Settipalem
village of Nalgonda district, Andhra Pradesh. The installed
production capacity of the rice mill is 16 tons per hour. The
company is promoted by Mr. G. Srinivas and his wife Mrs. G.
Anitha who have more than 13 years experience in rice milling
business.
Recent Results
MRMPL has reported an operating income of INR48.55 crore and net
losses of 0.01 crore respectively in FY2015 as against an
operating income and net profit of INR39.50 crore and INR0.44
crore in FY2014.
MARUTI COTTON: ICRA Assigns 'B' Rating to INR6.0cr Cash Loan
------------------------------------------------------------
The long term rating of [ICRA]B has been assigned to the INR6.00
crore1 cash credit and INR1.95 crore term loan facilities of
Maruti Cotton Industries.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit Facility 6.00 [ICRA]B assigned
Term Loans 1.95 [ICRA]B assigned
The assigned rating is constrained by MCI's limited track record
of operations with small scale of operations and low
profitability levels, arising from the limited value added nature
of operations and highly competitive and fragmented industry
structure. The firm's financial profile is characterized by high
gearing and average coverage indicators with its capital
structure expected to remain highly leveraged in the near term
owing to the debt funded project set up and the highly working
capital intensive nature of operations. The rating is also
constrained by the vulnerability of the firm's profitability to
raw material prices which are subject to seasonality and crop
harvest; and the regulatory risks with regard to Minimum Support
Price (MSP) fixed by GoI and imposition of any restrictions on
cotton exports. Further, ICRA notes that MCI is a partnership
firm and any withdrawals from the capital account could impact
the net worth and thereby the gearing levels; this remains a key
rating sensitivity.
The rating, however, favourably factors in the longstanding
experience of the partners in the cotton ginning industry and the
advantage the firm enjoys by virtue of its manufacturing facility
located in the cotton producing belt of Mehsana (Gujarat).
Maruti Cotton Industries (MCI), promoted by the bhavsar and
prajapati family, was established as a partnership firm. It
commenced commercial operations from 28th December 2014 and is
engaged in manufacturing of pressed cotton bales through ginning
and pressing of raw cotton with production capacity of 250 cotton
bales per day.
Recent Results
During FY 2015 (3 months of operations), the firm reported an
operating income of INR12.62 crore and profit after tax of
INR0.10 crore.
MONY PRINTS: ICRA Assigns 'B' Rating to INR3.95cr Loan
------------------------------------------------------
ICRA has assigned a long-term rating of [ICRA]B to the INR3.95
crore fund-based limits and INR10.05 crore term loans of Mony
Prints Private Limited.
The ratings are constrained by MPPL's weak financial profile
characterized by thin profitability, leveraged capital structure,
weak debt coverage indicators and stretched liquidity profile as
reflected in consistently high utilization of working capital
limits. ICRA further notes that there is limited value addition
in the business and the company's overall bargaining power with
customers remains weak owing to intense competitive pressures
from domestic and global textile manufacturers. The ratings also
take into account the vulnerability of the company's operations
to cyclicality in the textile industry and exposure to regulatory
changes in the importing countries. The ratings, however,
favourably consider the strengths derived from the longstanding
experience of the company's promoters in the textile business,
the company's established relationships with dealers and export
processing units and the limited exposure to fluctuations in
prices of grey fabric as majority of its revenues are generated
from job-work activity.
Mony Prints Private Limited (MPPL) was formed in year 2011 by
merging of two proprietary firms viz. Mony Prints and Mony
Fashion promoted by Mr. Jeetendra Gupta. The company is engaged
in sales of dyed and printed polyester grey fabric on direct sale
as well as on job work basis and the fabrics so processed are
used for making saris and dress materials. The dyeing and
printing unit has an installed capacity to process 1.25 lakh
meters of fabric per day and was set up at a total cost of ~Rs.
20 crore. The unit commenced commercial production in year 2012
and has steadily ramped up capacity utilisation levels.
Recent Results
During FY 2015, the company reported a profit before tax of
INR0.3 crore on an OI of INR37.5 crore. For FY 2014, the company
reported profit after tax (PAT) of INR0.1 crore on an operating
income (OI) of INR23.1 crore.
N.D. PLASTICS: ICRA Assigns B- Rating to INR6.0cr Cash Loan
-----------------------------------------------------------
ICRA has assigned the long term rating of [ICRA]B- and the short
term rating of [ICRA]A4 to the INR10.00 crore Line of Credit of
N.D. Plastics.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 6.00 Assigned at [ICRA]B-
FLC/ILC 3.00 Assigned at [ICRA]A4
Long Term/Short
Term-Unallocated 1.00 Assigned at [ICRA]B-/
[ICRA]A4
The assigned ratings are constrained by NDP's stretched financial
risk profile indicated by high gearing levels, weak debt
protection metrics and high utilization of working capital
limits. The ratings are further constrained by vulnerability of
margins to foreign currency fluctuations on account of high
proportion of imports. The ratings continue to factor in the high
competitive intensity in the fragmented polymer and chemical
trading business and thin margins in business because of limited
value addition.
The assigned ratings positively takes into account the experience
of NDP's promoters in polymer trading business; established
customer base and long association with suppliers.
N.D. Plastics was established as a proprietorship firm in 1987
with the objective of trading in Polypropylene. The firm is
engaged in the business of import and trading of polymer products
like LDPE (Low-density polyethylene), LLDPE (Linear low-density
polyethylene), HDPE (High-density polyethylene), PVC (Poly Vinyl
Chloride) etc. The company has a warehouse located in Bhiwandi,
Thane.
The proprietor of the firm, Mr. Niraj Kothari has an experience
of more than two decades in trading activities of chemicals,
polymers and related products and is involved in the management
of the day to day operations of the firm.
NILKANTH COTTON: ICRA Reaffirms 'B' Rating on INR6.0cr Loan
-----------------------------------------------------------
ICRA has reaffirmed the [ICRA]B rating assigned to the INR8.05
crore long term fund based facilities of Nilkanth Cotton
Industries.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 6.00 [ICRA]B reaffirmed
Term loan 2.05 [ICRA]B reaffirmed
The reaffirmation of rating factors in Nilkanth Cotton
Industries' (NCI) the limited track record of operations,
relatively small scale of operations and weak financial profile
of the firm as reflected in its low profitability, stretched
capital structure and weak coverage indicators. The rating
continues to be constrained by the vulnerability of profitability
to movement in raw material prices which are subject to
seasonality, and crop harvest; and the regulatory risks with
regard to MSP fixed by GoI and restrictions on cotton exports.
Further, ICRA notes that NCI is a partnership firm and any
significant withdrawals from the capital account would affect its
net worth and thereby its capital structure.
The rating however, continues to favourably factor in the
longstanding experience of the partners in the business,
favourable location of NCI's manufacturing facility in Rajkot
giving it easy access to raw cotton and the presence in the oil
expelling business providing diversification to some extent.
Nilkanth Cotton Industries (NCI) was set up as a partnership firm
in the year 2014. It is engaged in the business of manufacturing
cotton bales and cotton seed oil through ginning and pressing of
raw cotton (kapas) and cotton seed crushing activity. The firm's
manufacturing facility is located at Rajkot, Gujarat and is
equipped with 24 ginning, 1 pressing machines and 5 expellers for
crushing of cotton seeds.
Recent Results
For the year ended on March 31, 2015, the firm reported an
operating income of INR10.75 crore and profit before tax of
INR0.01 crore. Further, the firm has achieved a turnover of
INR29.93 crore till 31st January 2016 (provisional numbers).
OGUN STEELS: ICRA Suspends 'C' Rating on INR7.0cr Loan
------------------------------------------------------
ICRA has suspended the long term rating of [ICRA]C assigned to
the INR7.00 Crore Fund based facility and the short term rating
of [ICRA]A4 assigned to the INR6.00 Crore Non-fund based facility
of Ogun Steels Private Limited. The suspension follows ICRA's
inability to carry out a rating surveillance, in the absence of
the requisite information from the company.
PRIYHEER INFRA: ICRA Assigns 'B' Rating to INR15cr Term Loan
------------------------------------------------------------
ICRA has assigned a long-term rating of [ICRA]B to the INR15.001
crore term loan of Priyheer Infrastructures Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based-LRD
Term loan 15.00 [ICRA]B; assigned
The rating is constrained by the company's modest scale of
operations and its highly leveraged capital structure as evinced
by gearing of 14.23 times as on 31st December, 2015. Though the
debt levels of the company have steadily declined over the years
with the repayment of debt, its net worth base continues to
remain weak owing to the accumulation of losses incurred during
the initial stage of operations. The revenues of the company are
dependent on a single project which exposes PIPL's operations to
project concentration risks.
The assigned rating however, takes into account the experience of
PIPL's promoters in the real estate sector.
ICRA expects PIPL's revenues comprising entirely of the land
development proceeds received from Samanvay Saptarshi to remain
at INR6.00 crore in FY 2016-17. The operating profit margins are
expected to increase with a decline in the direct costs and
operational overheads while the net profit margins would continue
to remain subdued by the high interest and depreciation costs.
PIPL is entitled to receive a consideration of INR48.75 crore
from Samanvay Saptarshi in lieu of the land provided for
developing the residential project which would be apportioned
between FY2015-16 and FY2019-20. Of the total consideration,
INR1.50 crore to be received every quarter from April, 2016 to
March, 2019 will be entirely utilised by PIPL for servicing its
term loan. Any delays in the receipt of payments from Samanvay
Saptarshi would thus, expose the company to possible cash-flow
mismatches and re-financing risk.
Priyheer Infrastructures Private Limited (PIPL) develops and
leases out property to corporate clients. The company which was
incorporated in 2006 is managed by Mr. Ajit Patel, who is a Civil
Engineer having an experience of over a decade in the real estate
industry. PIPL has completed one real estate project since its
inception. The project was completed in 2008 and encompassed the
construction of the Hyper Mall (renamed MORE Megastore by Aditya
Birla Retail Ltd) at Vadodara Gujarat. The mall was leased out to
Aditya Birla Retail Ltd (ABRL) in July, 2007 for a period of ten
years with a lock-in period of five years. Following the decision
of both the companies to mutually terminate the lease agreement
in FY2015-16 PIPL entered into an agreement with a real estate
developer -- Samanvay Saptarshi for demolishing the mall and
developing a residential project on the land.
PIPL has a group company -- Avia Construction Group Pvt Ltd
(ACGPL) in which Mr. Ajit Patel is a common director. ACGPL was
incorporated in 1981 and is engaged in undertaking civil
construction projects.
S.K. HEIGHTS: ICRA Assigns B+ Rating to INR15cr LT Loan
-------------------------------------------------------
ICRA has assigned a long-term rating of [ICRA]B+ to the INR15.00
crore fund based facility of S.K. Heights Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term-Fund
Based Term Loan 15.00 [ICRA]B+/assigned
The assigned rating takes into account the experience of more
than 25 years of SKHPL's promoters in the real estate development
business in Mumbai and also the proven track record of the
management in construction of hotels, residential and commercial
projects. The rating also factors in the favourable location of
the project in proximity to key areas in the region; clear land
title; and receipt of all critical approvals required for the
project. ICRA also notes that the bank funding for the project
has been tied up and the entire promoter funding as estimated is
in place.
The rating, however, is constrained by SKHPL's exposure to
execution related risks in terms of time and cost overrun with
completion expected by March 2017; exposure to market risks for
the unsold portion of the ongoing project and funding risk with
~71% of the balance cost to be borne by customer advances, which
in turn are contingent upon the timings of bookings and
collections from customers. Additionally, the company is exposed
to the risk of slowdown in demand, falling property prices and
inherent cyclicality in the sector and competition from other
ongoing projects from established developers in the surrounding
areas.
Incorporated in December 2009, S.K. Heights Private Limited is a
Mumbai based developer currently undertaking the construction of
a residential project at Dahisar East, Mumbai called "Imperial
Heights".
The promoters Mr. Karim J. Maredia and Mr. Amirali J. Maredia
have more than 25 years experience in the construction business
and have interest in the real estate and the hospitality sector
and are partners and directors at various retail showrooms like
Nike, and hotels like Comfort Inn Heritage Hotel, Hotel Fariyas,
Hotel Sahil etc.
SALASAR BALAJI: ICRA Assigns 'B' Rating to INR5.60cr Term Loan
--------------------------------------------------------------
ICRA has assigned an [ICRA]B rating to the INR5.60 crore1 term
loan and INR3.13 crore cash credit facilities of Salasar Balaji
Cold Storage.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based-Term
loan 5.60 [ICRA]B assigned
Fund Based-Cash
Credit Pledge 2.88 [ICRA]B assigned
Fund Based-Cash
Credit Clean 0.25 [ICRA]B assigned
The rating assigned is, constrained by the fact that the scale of
operations of Salasar Balaji Cold Storage (SBCS) is envisaged
small, creating an operational stability risk. Further the rating
assigned takes into account the undertaken capex for setting up
cold storage in FY 2016 with a total capex outlay of INR8.07
crore. The debt-funded capex will expose the firm to possible
stress on debt servicing capability in case of slower than
expected ramp up of cash flows. ICRA also takes into
consideration that SBCS is a partnership firm and any significant
withdrawals from the capital account could adversely impact its
net worth and thereby the capital structure.
The rating assigned, however, favourably considers the experience
of partners in the cultivation of storing potatoes. The rating
also considers the favourable location of the unit in Deesa
(Gujarat), as area with a high potato output.
ICRA expects SBCS to achieve the anticipated utilization levels
given its proximity to a potato cultivation belt and the
favourable outlook on the crop output for FY2017. However, SBCS's
operating profits will remain vulnerable to any significant fall
in potato prices. Also, the relatively higher depreciation and
interest expenses as a consequence of capex will pressurize the
net margins in the initial two years of operation. Due to debt-
funded capex, the capital structure will remain stretched due to
high debt equity ratio in the initial years of operation that
will gradually improve in line of repayment of term loan. ICRA
also takes into consideration high working capital intensity of
operations due to advances given to farmers and traders using
storage facility.
Salasar Balaji Cold Storage (SBCS) was established in May 2015 as
a partnership firm. SBCS is engaged in providing hi-tech cold
storage facilities to potato farmers and potato processors on a
rental basis. The firm started commercial operations in mid
February 2016 and is located in Deesa, Gujarat, with a storage
capacity for 161,000 bags of 50 kilogram (kg.) each. The firm is
owned and managed by Mr. Motilal Jat and three other partners.
SATMAN AUTOMOBILES: CARE Reaffirms B+ Rating on INR15cr Loan
------------------------------------------------------------
CARE reaffirms the rating assigned to the bank facilities of
Satman Automobiles Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 15 CARE B+ Reaffirmed
Rating Rationale
The rating assigned to Satman Automobiles Private Limited (SAP)
continues to be constrained by its modest scale of operations,
low profitability margin, leverage capital structure and weak
coverage indicators.
The rating is further constrained by working capital intensive
nature of business operations, pricing restrictions & margin
pressure arising out of competition from various auto dealers in
the market along with fortunes linked to performance of Skoda
Auto India Private Limited. The rating, however, draws comfort
from the experienced promoter in the automobile dealership
industry and growing scale of operations.
Going forward, the ability of the company to increase its scale
of operations while improving its profitability margins and
capital structure with effective working capital management shall
be the key rating sensitivities.
Satman Automobiles Private Limited (SAP) was incorporated in 2012
by MsMeghnaHarenChoksey and MrKonark Nanda. The company is
currently being managed by MsMeghnaHarenChoksey, MrKonark Nanda
and Mr Kunal Ramchandani. It is engaged in the business of
automobile dealership. SAP is an authorized 3S (sales, service
and spares) dealer of Skoda Auto India Private Limited (SAIPL).
The company commenced operations with its showroom located at
Okhla, New Delhi in June 2012. The showroom has attached workshop
facility for the post sales services of cars.
In FY15, SAP achieved a total operating income (TOI) of INR102.70
crore with PBILDT and PAT of INR3.39 crore and INR0.28 crore,
respectively, as against TOI of INR95.19 crore with PBILDT and
PAT of INR2.98 crore and INR0.10 crore, respectively, in FY14.
The company has achieved total operating income of INR94 crore
till 11MFY16 (refers to the period April 1 to February 29) (as
per unaudited results).
SHAKTI COMPONENT: Ind-Ra Assigns IND BB- Long-Term Issuer Rating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Shakti Component
Ventures Private Limited (Shakti) a Long-Term Issuer Rating of
'IND BB-'. The Outlook is Stable. A full list rating actions is
at the end of this commentary.
KEY RATING DRIVERS
The ratings reflect Shakti's moderate credit profile and tight
liquidity. Revenue was INR260 million in FY15 (FY14: INR212
million) while EBITDA margin reduced to 14.1% (16.0%) on account
of incentives given to customers to improve the top line. Revenue
increased at a CAGR of 4.8% between FY12 and FY15. 11MFY16
financials indicate revenue of INR242 million, supported by an
order book worth INR300 million to be executed until March 2017.
EBITDA interest coverage was 1.8x in FYE15 (FYE14: 1.7x) and net
financial leverage was 3.9x (4.5x). EBITDA margin fluctuated
between 14.1% and 16.0% during FY12-FY15 on account of movements
in raw material prices.
The company's liquidity was tight, with 95.4% average utilisation
of its fund-based working capital facilities over the 12 months
ended February 2016.
The ratings derive support from its promoter's experience of two
decades in the engine components manufacturing business.
RATING SENSITIVITIES
Negative: A stretched working capital cycle or margin
contraction, leading to further stress on liquidity or margins
will be negative for the ratings.
Positive: A substantial increase in the scale of operations and
profitability, leading to sustained improvement in credit
metrics, could be positive for the ratings.
COMPANY PROFILE
Incorporated in 2006, Faridabad-based Shakti is a manufacturer of
engine components that are used in several industries such as
automobile, automotive, agriculture, etc. The company's plant has
an installed capacity of 150 tonnes per month, of which it
utilises 85%.
Shakti's ratings:
-- Long-Term Issuer Rating: assigned 'IND BB-'; Outlook Stable
-- INR0.85 million long-term loans: assigned 'IND BB-'/Stable
-- INR70 million fund-based facilities: assigned 'IND BB-
'/Stable/'IND A4+'
-- INR15 million non-fund-based facilities: assigned 'IND A4+'
SMIT DEVELOPERS: ICRA Suspends 'B+' Rating on INR9.18cr Loan
------------------------------------------------------------
ICRA has suspended the [ICRA]B+ rating assigned to the INR9.18
crore long term fund based limits of Smit Developers. The
suspension follows ICRA's inability to carry out a rating
surveillance in the absence of the requisite information from the
company.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term Loan 9.18 [ICRA]B+ suspended
Smit Developers (SD) was incorporated in 2008 to engage in
construction of residential cum commercial buildings and is
currently managed by Shri Susmit S. Rokad and his wife Smt.
Varsha S. Rokad (both sharing 42.25% profitability in the firm),
along with six other partners. The partners of SD have an
established track record of constructing around 596 flats, 207
bungalows and 18 shops in the Ahmedabad city through different
associate entities.The firm is currently working on two
residential project based in Vatva, Ahmedabad having saleable
area of over 3.07 lakh square feet at a cost of ~Rs. 29.50 Cr.
SMLASH ISPAT: ICRA Suspends B+ Rating on INR4cr Loan
----------------------------------------------------
ICRA has suspended the long term rating of [ICRA]B+ assigned to
the INR4.00 Crore Fund based facility and the short term rating
of [ICRA]A4 assigned to the INR4.00 Crore Non-fund based facility
of Smlash Ispat Private Limited. The suspension follows ICRA's
inability to carry out a rating surveillance, in the absence of
the requisite information from the company.
SOUTHERN AUTO: Ind-Ra Assigns 'IND B+' Long-Term Issuer Rating
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Southern Auto
Products (SAP) a Long-Term Issuer Rating of 'IND B+'. The Outlook
is Stable.
KEY RATING DRIVERS
SAP's ratings reflect its small scale of operations and weak
financial profile. It reported revenue of INR271 million in FY15
(FY14: INR299 million) with EBITDA margins of 4.8% (8.0%), gross
interest coverage (operating EBITDA/gross interest expense) of
0.8x (1.2x) and net financial leverage (total adjusted net
debt/operating EBITDA) of 10.8x (4.5x). Its liquidity remained
tight, with 93% average utilisation of its fund-based facilities
over the 12 months ended February 2016. The company indicated
revenue of INR245 million until 11MFY16.
However, the ratings are supported by its promoter's three-
decade-long experience in the glass processing industry.
RATING SENSITIVITIES
Positive: Substantial growth in its top line and profitability
improvement, leading to sustained improvement in its overall
credit metrics, will lead to a positive rating action.
Negative: A substantial decline in profitability, resulting in a
sustained deterioration in its overall credit metrics, will lead
to a negative rating action.
COMPANY PROFILE
Bangalore-based SAP was established as a partnership firm in 1987
by Mr. Deepak Malik, Mr. H P Malik and Ms. Madhu Malik. It
processes glass to make laminated, toughened and insulated glass
for architectural use.
SAP ratings:
-- Long-Term Issuer Rating: assigned 'IND B+'; Outlook Stable
-- INR48.44 million Long term loans: assigned 'IND B+'/Stable
-- INR103 million fund-based facilities: assigned 'IND
B+'/Stable/'IND A4'
-- INR 60 million non-fund-based facilities: assigned 'IND A4'
SRI KALEESWARA: ICRA Assigns B- Rating to INR5.0cr LT Loan
----------------------------------------------------------
ICRA has assigned a long-term rating of [ICRA]B- to the INR5.00
crore fund based facilities of Sri Kaleeswara Ginning Mills. ICRA
has also assigned ratings of [ICRA]B- and [ICRA]A4 to the INR1.00
crore unallocated facilities of Sri Kaleeswara Ginning Mills.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term-Fund
based facilities 5.00 [ICRA]B-/assigned
Unallocated-Short
term/Long term 1.00 [ICRA]B-/[ICRA]A4 assigned
The assigned rating takes into consideration the experience of
the proprietor and key management executives in the cotton
ginning industry for over a decade and the increasing trend of
operating income with CAGR of ~20% in past three fiscals. The
rating is, however, constrained by the low value addition in the
business leading to low margins and returns. The rating is
further constrained by the modest scale of operations of the
entity in a highly competitive industry environment restricting
the pricing flexibility, and the susceptibility of the concern's
profitability to fluctuations in cotton prices due to seasonality
and regulatory risks.
Moreover, the concern's financial profile is characterized by
high gearing, weak coverage indicators, and stretched liquidity
position due to high inventory holding. ICRA also notes the
capital continuity risks associated with proprietorship entities
and any significant withdrawals from the capital account will
affect its net worth and thereby the gearing levels.
Sri Kaleeswara Ginning Mills is a proprietorship concern started
in the year 2002 by Mrs. Kokilavani. The concern operates a
cotton ginning, pressing unit in Coimbatore, Tamilnadu. SKGM is
engaged in separating cotton fibre (lint) from cotton kappas. The
cotton are then packed in bales and sold to customers. The
concern procures BT variety of cotton and DCH variety of cotton
from its suppliers. SKGM operates in two shifts and has 10
employees on permanent rolls and 20 employees on contractual
basis. Mr. Shanmugam, husband of the proprietor takes care of the
overall operations of the concern.
Recent Results
The concern reported a net profit of INR0.1 crore on an operating
income of INR23.1 crore during 2014-15 as against a net profit of
INR0.1 crore on an operating income of INR18.2 crore during 2013-
14.
STEEL MAX: ICRA Revises Rating on INR9.0cr LT Loan to 'B'
---------------------------------------------------------
ICRA has revised the long-term rating of [ICRA]B+ outstanding on
the INR9.00 crore fund based facility of Steel Max Rolling Mills
Limited to [ICRA]B. ICRA has also reaffirmed the short-term
rating of [ICRA]A4 outstanding on the INR0.50 crore non-fund
based facility of SMRML.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term fund
based facility 9.00 [ICRA]B; Revised
from [ICRA]B+
Short term non-
fund based facility 0.50 [ICRA]A4; Reaffirmed
ICRA has considered the consolidated business and financial
profiles of SMRML and its group entity, SteelMax Alloys Limited,
for the purpose of ratings, on account of the integrated nature
of operations of these two entities and their common promoter
group & management.
The revision in ratings consider the weakened financial profile
of the company over the past eighteen months, with increased
working capital intensity on the back of stretched receivable
position, and thin margins due to low value-added nature of
business in a highly competitive industry. Accordingly, the
capital structure and debt coverage indicators of the company
deteriorated during the period. The ratings remain constrained
given the volatility in steel prices, off-take risks associated
with weak demand conditions and high customer concentration risk,
partly mitigated by longstanding customer relationships.
Nevertheless, the ratings take into account the long standing
experience of promoters spanning nearly two decades in the steel
sector.
Incorporated in 2004, SMRML is primarily engaged in the
manufacture of TMT bars. Its manufacturing facility is located in
Palakkad (Kerala), which has a capacity of 36,000 TPA. In
December 2012, SMRML was converted from a private limited company
to a public limited company. Its group entity, SAL, operates an
induction furnace in Palakkad, with a capacity to manufacture MS
ingots of 21,000 TPA.
Recent results
SMRML reported a net loss of INR0.9 crore on an operating income
of INR72.3 crore during FY 2014-15, against a net profit of
INR1.1 crore on an operating income of INR83.7 crore during FY
2013-14.
STEEL PRODUCTS: ICRA Reaffirms 'C-' Rating on INR11.5cr Loan
------------------------------------------------------------
ICRA has reaffirmed the long term rating of [ICRA]C- to the
INR21.5 crore fund based and non fund based bank limits of Steel
Products Limited. ICRA has also reaffirmed the short term rating
of [ICRA]A4 to the INR1.15 crore non fund based bank limits of
the company.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based-Cash
Credit 11.50 Reaffirmed at [ICRA]C-
Non Fund Based-
Bank Guarantee 10.00 Reaffirmed at [ICRA]C-
Non Fund Based-
Letter of Credit 1.15 Reaffirmed at [ICRA]A4
The reaffirmation of ratings takes into account SPL's high
working capital intensity of business that has a stretched
liquidity position, reflected by the continuous over utilisation
in the working capital facility and its weak financial profile.
The declining turnover, coupled with continuous losses from
operations, have eroded the net worth leading to unfavourable
capital structure and depressed debt coverage indicators. The
ratings also factor in the cash losses registered by the entity
over the past two years till FY2014 and in H1 FY2016,
notwithstanding the cash profit earned in FY2015, primarily due
to the investment surplus generated from the sale of a unit in
Raipur, Chhattisgarh. The sub-optimal level of capacity
utilisation has also constrained the scale of operations as well
as the return on capital employed.
The ratings, however, favourably factor in the long track record
of the company in the transmission tower fabrication business,
its reputed client base, comprising major engineering procurement
construction players in the industry and the moderate order book
of INR49 crore as on December 31, 2015, which provides revenue
visibility in the near term.
ICRA expects an increase in the capacity utilisation of the
company while scaling up of operations, along with an improvement
in the profit margins, in the near future, on account of the
company's diversification in the higher margin live line
installation of optical wire projects.
Incorporated in 1917, Steel Products Limited (SPL) makes tower
parts and steel structural for transmission towers, telecom
towers and substation transmission systems. The company also
undertakes engineering procurement and construction (EPC) work to
lay optic fibre cables over the transmission towers. SPL at
present has two manufacturing units in Howrah, West Bengal, with
a total installed capacity of 18,000 MTPA; post the sale of its
loss-making unit in Raipur, which had an installed capacity of
24,000 MTPA.
Recent Results
SPL reported a net loss of INR0.99 crore during 2014-15 on an
operating income of INR39.17 crore as compared to a net loss of
INR1.74 crore and an operating income of INR79.97 crore during
2013-14.
STEELMAX ALLOYS: ICRA Revises Rating on INR4.0cr LT Loan to B
-------------------------------------------------------------
ICRA has revised the long-term rating of [ICRA]B+ outstanding on
the INR9.00 crore fund based facility of SteelMax Alloys Limited
to [ICRA]B. ICRA has also reaffirmed the short-term rating of
[ICRA]A4 outstanding on the INR5.00 crore fund based facility and
INR6.00 crore non-fund based facility of SAL.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term fund
based facility 4.00 [ICRA]B; Revised from
[ICRA]B+
Short term fund
based facility 5.00 [ICRA]A4; Reaffirmed
Short term non-
fund based facility 6.00 [ICRA]A4; Reaffirmed
ICRA has considered the consolidated business and financial
profiles of SAL and its group entity, Steel Max Rolling Mills
Limited, for the purpose of ratings, on account of the integrated
nature of operations of these two entities and their common
promoter group & management.
The revision in ratings consider the weakened financial profile
of the company over the past eighteen months, with increased
working capital intensity on the back of stretched receivable
position, and thin margins due to low value-added nature of
business in a highly competitive industry. Accordingly, the
capital structure and debt coverage indicators of the company
deteriorated during the period. The ratings remain constrained
given the volatility in steel prices, off-take risks associated
with weak demand conditions and high customer concentration risk,
partly mitigated by longstanding customer relationships.
Nevertheless, the ratings take into account the long standing
experience of promoters spanning nearly two decades in the steel
sector.
Incorporated in 1994, SAL is primarily engaged in manufacturing
steel ingots. The manufacturing facility, located in Palakkad
(Kerala), has a capacity to manufacture 21,000 TPA of MS ingots.
During 2007-08, the promoter group of SMRML acquired equity stake
in SAL, as a part of backward integration. Its group entity,
SMRML, operates a rolling mill at Palakkad, with a capacity to
manufacture 36,000 TPA of TMT bars.
Recent results
SAL reported a net loss of INR0.9 crore on an operating income of
INR72.3 crore during FY 2014-15, against a net profit of INR1.1
crore on an operating income of INR83.7 crore during FY 2013-14.
STRAIGHT EDGE: CARE Reaffirms 'B' Rating on INR10cr LT Loan
-----------------------------------------------------------
CARE reaffirms the rating assigned to the bank facilities of
Straight Edge Contracts Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 10 CARE B Reaffirmed
Rating Rationale
The rating assigned to the bank facilities of Straight Edge
Contracts Private Limited (SECPL) continues to remain constrained
by its limited track record of operations, low revenue
visibility, highly leveraged capital structure and working
capital-intensive nature of operations. The rating is further
constrained by stiff competition from organized as well as
unorganized players and cyclicality of the real estate sector.
The ratings, however, continue to derive strength from the
experienced promoters of SECPL. Going forward, the ability of the
company to increase its order book and register improvement in
the capital structure shall remain as the key rating
sensitivities. Background SECPL was incorporated in 2009 by Mr
Rajesh Nagpal, MrSahilNagpal and MrDivamKapoor in 2009. Mr Rajesh
Nagpal has an experience of more than a decade in the civil
construction business.
The company is engaged in the civil construction mainly of multi-
storied residential buildings. The company operates in the Delhi-
NCR region. The company procures orders through bidding process.
The company is currently executing a contract worth INR275 crore
for AGC Realty Private Limited involving construction of
residential flats in Sector 121, Noida. AGC Realty Pvt. Ltd. is a
joint venture between Ajnara India Ltd. and GulshanHomz Pvt.
Ltd., which is its associate concern. The project was started in
FY10 (refers to the period April 1 to March 31) and is currently
under construction with 90% of the project completed, while the
balance is expected to be completed by December 2016. Apart from
the existing contract the company has executed contract worth
INR15.51 crore from its associate Gulshan Homes and
Infrastructure Pvt Ltd for construction of non tower area and
commercial space at Project Gulshan Ikebana, Sector 143- Noida.
For FY15 (refers to the period April 01 to March 31), SECPL
achieved a total operating income (TOI) of INR36.48 crore with
PBILDT and profit after tax (PAT) of INR9.99 crore and INR0.14
crore, respectively as against TOI of INR55.57 crore with PBILDT
and PAT of INR9.98 crore and INR0.68 crore, respectively, in
FY14. The company has achieved a TOI of INR13.61 crore in FY16
till February 29, 2016 (as per unaudited results).
SUPREME POWER: ICRA Reaffirms 'B+' Rating on INR3.7cr LT Loan
-------------------------------------------------------------
ICRA has reaffirmed the long-term rating outstanding on the
INR3.70 crore fund based facility of Supreme Power Equipment
Private Limited at [ICRA]B+. ICRA has also reaffirmed the short-
term rating of [ICRA]A4 outstanding on the INR0.50 crore fund
based facility and INR5.00 crore non-fund based facility of
SPEPL.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term fund
based facility 3.70 [ICRA]B+; Reaffirmed
Short term fund
based facility 0.50 [ICRA]A4; Reaffirmed
Short term non-
fund based facility 5.00 [ICRA]A4; Reaffirmed
The reaffirmation of ratings considers the company's moderate
scale of operations, the high customer concentration risk, and
the fragmented industry structure characterised by intense
competition and limited pricing power. The ratings are also
constrained by the increase in working capital intensity on the
back of stretched receivable position and high inventory levels
due to the nature of business. Nevertheless, the ratings take
into account the experience of the promoters in the business of
manufacture of transformers for more than a decade; the company's
healthy order book position, its established relationships with
its key customers and the favourable demand outlook for the
segment, with planned investments in power transmission
infrastructure, which are expected to support business growth in
medium term.
Incorporated in 2005, SPEPL is primarily engaged in the
manufacture of transformers, mainly distribution, power and
windmill transformers. Its customer profile includes TNEB, Vestas
and Gamesa, and its manufacturing facility is located near
Chennai (Tamil Nadu). The company is promoted by Mr. Vee Rajmohan
and Mr. K V Pradeep, who have been in the business of transformer
manufacturing since 2000.
Recent results
SPEPL reported a net profit of INR0.3 crore on an operating
income of INR16.7 crore during 10M FY 2015-16, against a net
profit of INR0.3 crore on an operating income of INR30.3 crore
during FY 2014-15.
TEHRI PULP: CARE Lowers Rating on INR67.35cr LT Loan to 'D'
-----------------------------------------------------------
CARE revises ratings assigned to bank facilities of Tehri Pulp &
Paper Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 67.35 CARE D Revised from
CARE C
Short term Bank Facilities 18.75 CARE D Revised from
CARE A4
Rating Rationale
The revision in the ratings of the bank facilities of Tehri Pulp
& Paper Ltd (TPPL) takes into account the delays in servicing of
debt obligations by the company.
Tehri Pulp & Paper Limited (TPPL), incorporated in year 1993, is
engaged in manufacturing of Kraft Paper and Kraft Liner in
Muzaffarnagar, Uttar Pradesh. TPPL has waste paper and agro based
Kraft paper manufacturing facilities located at its units in
Muzaffarnagar, Uttar Pradesh with a total installed capacity of
78,000 metric tonne per annum (MTPA. It is a packaging item and
used for manufacturing of corrugated boxes, cartons and other
packaging purpose.
TPPL is a part of the Bindal Group of companies, which includes
other companies like Neeraj Paper Marketing Ltd, Agarwal Duplex
Board Mills Ltd (CARE BB+/ CARE A4) and Bindals Papers Mills Ltd
(CARE D/ CARE D).
In FY15 (refers to the period April 1 to March 31), TPPL has
reported a total income of INR177.40 crore and PAT of INR5.12
crore as compared with INR140.75 crore of total income and
INR1.86 crore of PAT in FY14.
THE WOODIND: ICRA Reaffirms 'B' Rating on INR6cr LT Loan
--------------------------------------------------------
ICRA has reaffirmed the long term rating of [ICRA]B to INR6.00
crore cash credit (sub limit) facilities of The WoodInd. ICRA has
also reaffirmed the short term rating of [ICRA]A4 to INR10.00
crore non fund based facilities the firm.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term fund
based facility (6.00) [ICRA]B/reaffirmed
Short term non
fund based facility 10.00 [ICRA]A4/reaffirmed
The reaffirmation of ratings considers the experience of
promoters in the timber trading industry for over a decade and
its established relationship with customers. However, the ratings
remain constrained by firm's small scale of operations in a
highly competitive industry which restricts the benefits of scale
economies and weak financial profile characterized by thin profit
margins owing to trading nature of business and high working
capital intensity on the back of large inventory holding period.
Going forward, the firm's ability to improve its scale of
operations with adequate profits and better inventory management
will be key credit monitorables.
The WoodInd initially established as proprietorship concern in
2006 by Mr. Russal M Easa was later converted in to a partnership
firm in December 2013. The firm is engaged in trading of timber.
The firm imports timber mainly from Latin American countries and
also from African countries. The timber imported belongs to two
main categories -- Teak and Pincoda. The firm is located in Kochi
(Kerala), caters to the needs of the wholesalers as well as the
retailers in North Kerala. Prior to establishing the firm, the
promoter was engaged in similar business (of trading in timber)
with his brother since the year 2000.
Recent Results
During the year 2014-15, the company has reported a net profit of
INR0.1 crore on an operating income of INR11.3 crore as against a
net profit of INR0.02 crore on an operating income of INR10.2
crore during the corresponding previous year.
TRIBHUVAN SPINTEX: ICRA Suspends B+ Rating on INR26.5cr Loan
------------------------------------------------------------
ICRA has suspended the [ICRA]B+ rating assigned to the INR35.50
crore long term fund based limits and [ICRA]A4 rating assigned to
the INR1.46 crore short term non fund based limits of Tribhuvan
Spintex Private Limited. The suspension follows ICRA's inability
to carry out a rating surveillance in the absence of the
requisite information from the company.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term Loan 26.50 [ICRA]B+ suspended
Cash Credit 9.00 [ICRA]B+ suspended
Bank Guarantee 1.30 [ICRA]A4 suspended
Credit Exposure Limit 0.16 [ICRA]A4 suspended
Tribhuvan Spintex Private Limited (TSPL) was incorporated in May
2011 by Mr. Pankaj Talati and Mr. Devjibhai Kanani along with
other shareholders. TSPL is engaged in cotton yarn spinning with
installed capacity to manufacture 2473 TPA of 30 count combed
hosiery cotton yarn.
U. S. AGRAWAL: ICRA Suspends 'B' Rating on INR6.5cr Bank Loan
-------------------------------------------------------------
ICRA has suspended its long-term rating of [ICRA]B assigned to
the INR6.5 crores bank facility of U. S. Agrawal & Co. The
suspension follows ICRA's inability to carry out a rating
surveillance in absence of requisite information from the
company.
UTTAM GALVA: CARE Lowers Rating on INR3,933.94cr Term Loan to D
---------------------------------------------------------------
CARE revises the ratings assigned to the bank facilities of Uttam
Galva Metallics Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 3,933.94 CARE D Revised from
(Term Loan) CARE BBB-
Long-term Bank Facilities 170.00 CARE C Revised from
(Fund-based Limits) CARE BBB-
Short-term Bank Facilities 910.00 CARE D Revised from
CARE A3
Rating Rationale
The revision in the ratings assigned to the bank facilities of
Uttam Galva Metallics Limited (UGML) is on account of the ongoing
delays in the servicing of debt obligations. UGML incurred losses
in Q3FY16 due to subdued industry scenario for steel products.
UGML, Group Company of the Uttam group promoted by Mr Rajinder
Miglani, is engaged in the manufacturing of Hot Metal / Pig Iron
from iron ore, which are intermediate products for manufacturing
of value added steel. The company has a capacity of Hot metal
(600,00 tonnes per annum (tpa)], sinter (802,000 tpa), Coke oven
(500,000 tpa), Top Gas Recovery Turbine [3 Mega Watts (MW)] and a
CPP (15 MW) (Gas-based power plant, which uses blast furnace gas
as input). The entire hot metal (which constitutes around 60% of
the total sales) is supplied to the group company Uttam Value
Steels Limited, which is located near UGML's factory site.
During FY15 (refers to the period April 1 to March 31) UGML
reported PAT of INR27 crore on total operating income of
INR2,564 crore against PAT of INR40 crore on total operating
income of INR2,575 crore in FY14.
UTTAM VALUE: CARE Lowers Rating on INR1,390cr Loan to 'D'
---------------------------------------------------------
CARE revises the ratings assigned to the bank facilities of Uttam
Value Steels Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 640.07 CARE D Revised from
CARE BB+
Short-term Bank Facilities 1,390.00 CARE D Revised from
CARE A4+
Rating Rationale
The revision in the ratings assigned to the bank facilities of
Uttam Value Steels Limited (UVSL) is on account of the ongoing
delays in the servicing of debt obligations. UVSL incurred heavy
losses in Q3FY16 due to subdued industry scenario for steel
products.
UVSL, previously known as Lloyds Steel Industries Ltd (LSIL), was
incorporated on April 27, 1970, under the name of Gupta Tubes and
Pipes. In July 2012, Uttam group entered into an investment
agreement with LSIL for allotment of 38 crore equity shares on
preferential basis to raise its shareholding to 51.99% and
provide the group with a controlling stake in LSIL for an
additional investment of INR380 crore. The name of the company
was consequently changed from Lloyds Steel Industries Limited
(LSIL) to Uttam Value Steels Limited (UVSL) on March 18, 2013.
UVSL is engaged in the manufacturing of steel products,
engineering equipment and executing turnkey projects. UVSL has
set up a rolling mill with an installed capacity of 1.00 Million
Tonnes Per Annum (MTPA) of Hot Rolled (HR) coil along with
Steel Melting Shop (SMS) to produce 1.08 MTPA of steel through
Electric Arc Furnace (EAF) route. The downstream facilities
include Cold Rolled (CR) coil mill (0.37 MTPA capacity) and
Galvanized Plain (GP)/Galvanized Corrugated (GC) sheets/coil line
(0.25 MTPA capacity). The engineering division located in Murbad,
Thane, Maharashtra, is engaged in steel fabrication, design and
manufacturing of heavy equipments for hydrocarbon, oil & gas,
steel and power plants as well as executing projects on turnkey
basis.
In FY15 (refers to the period April 1 to March 31), the company
reported net loss of INR31 crore (PY: net loss of INR99 crore) on
a total operating income of INR5040 crore (PY: INR6,036 crore).
During 9MFY16, net loss was reported at INR301 crore on a total
operating income of INR2,751 crore as compared with net loss of
INR17 crore on a total operating income of INR3,739 crore during
9MFY15.
UTTARANCHAL IRON: CARE Lowers Rating on INR22.36cr LT Loan to D
---------------------------------------------------------------
CARE revises ratings assigned to the bank facilities of
Uttaranchal Iron & Ispat Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 22.36 CARE D Revised from
CARE BB
Short term Bank Facilities 8.50 CARE D Revised from
CARE A4
Rating Rationale
The revision in the ratings of the bank facilities of Uttaranchal
Iron &Ispat Ltd (UIIL) takes into account the instances of delays
in debt servicing by the company.
UIIL, incorporated on August 16, 2002, is engaged in the
manufacturing of steel ingot and MS bars/ TMT. It has an
installed capacity of 22,000 MT for steel ingots and 60,024 MT
for TMT bars at its manufacturing facility in Kotdwara, district
Pauri in Uttarakhand. During FY14 (refers to the period April 1
to March 31), the ownership of UIIL has been sold to Mr Avnish
Agarwal after which the company sells its products under the
brand name of PrayanSaria. The group companies of UIIL are
PrayanIspat & Steel Private Limited and Prayan Casting Private
Limited that are in the business of manufacturing & trading of
iron and steel products.
During FY15 (refers to the period April 01 to March 31), UIIL has
reported the total operating income of INR 232.13 crore with
PBILDT of INR6.09 crore and PAT of INR 1.02crore.
VARSHA CABLES: ICRA Reaffirms B+ Rating on INR8.0cr Cash Loan
-------------------------------------------------------------
ICRA has reaffirmed the long term rating of [ICRA]B+ for the
INR8.00 crore fund based limits and the short term rating of
[ICRA]A4 for the INR4.00 crore non fund based limits of Varsha
Cables Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based Limits/
Cash Credit 8.00 [ICRA]B+/Reaffirmed
Non Fund Based/
Bank Guarantee 4.00 [ICRA]A4/Reaffirmed
The rating reaffirmation continues to be constrained by the
firm's small scale of operations limiting its bargaining power
and economies of scale and thin margins due to the highly
fragmented and competition intensive nature of the cables
industry in which the company operates. ICRA also takes note of
the stretched capital structure characterised by high gearing and
the weak coverage indicators; the high working capital intensity
and stretched cash flows; and the vulnerability of the margins to
adverse movements in raw material prices and labour costs.
The rating reaffirmation, however, continues to positively factor
in the established track record and strong experience of the
company in the cable manufacturing industry; the qualification
and the experience of the management of the company; the excess
capacity available with the company which will enable the company
to expand its operations without significant capital
expenditures; and the diversified customer profile with low
geographic and sectoral concentration.
VCPL is engaged in the manufacturing of low tension copper and
aluminium electrical cables. It was established in 1995 by Mr.
Puttaraju. The company is located in Mysore and has a
manufacturing capacity of 12.5 million meters per annum.
Recent Results
The company recorded a profit ater tax (PAT) of INR0.07 crore on
an operating income (OI) of INR18.30 crore in FY 2014-15 against
a PAT of INR0.06 crore on an OI of INR15.53 crore in FY2013-14.
VINAYAK HATCHERIES: ICRA Suspends 'B' Rating on INR7.11cr Loan
--------------------------------------------------------------
ICRA has suspended its long-term rating of [ICRA]B assigned to
the INR7.11 crores bank facilities of Vinayak Hatcheries. The
suspension follows ICRA's inability to carry out a rating
surveillance in absence of requisite information from the
company.
WORLD RETAILS: ICRA Suspends B+ Rating on INR9.5cr Cash Loan
------------------------------------------------------------
ICRA has suspended the [ICRA]B+ rating assigned to the INR9.50
crore cash credit facility of The World Retails Private Limited.
The suspension follows ICRA's inability to carry out a rating
surveillance in the absence of the requisite information from the
company.
=================
I N D O N E S I A
=================
PAKUWON JATI: S&P Raises CCR to 'BB-'; Outlook Stable
-----------------------------------------------------
S&P Global Ratings said that it had raised its long-term
corporate credit rating on PT Pakuwon Jati Tbk. to 'BB-' from
'B+'. The outlook is stable. At the same time, S&P raised the
long-term issue rating on the senior unsecured notes that the
Indonesia-based property developer and investor guarantees to
'BB-' from 'B+'. S&P also raised the long-term ASEAN regional
scale rating on Pakuwon Jati to 'axBB+' from 'axBB'.
"The upgrade reflects our view that Pakuwon Jati will continue to
maintain a prudent financial policy and moderate debt while
expanding over the next 24 months," said S&P Global Ratings
credit analyst Kah Ling Chan.
Compared to other rated Indonesian real estate peers, Pakuwon
Jati has been more disciplined in setting realistic sales targets
and achieving them in the past two years. Amid a volatile and
subdued property market in Indonesia, the company's strategy of
deriving about half of its EBITDA from leasing income has
provided a solid recurring earnings base and improved its
earnings resilience compared with other developers. The company
has also been more conservative in its strategy by limiting
growth on ambitious new greenfield projects, choosing instead to
expand its current development. S&P believes this will translate
into credits metrics that are more stable through a real estate
cycle.
S&P believes Pakuwon Jati can sustain a debt-to-EBITDA ratio
below 2.0x and EBITDA interest coverage of about 5.6x in the next
12 months based on the record of financial prudence it has
demonstrated since 2012.
S&P's base-case projections do not factor in further sizable
debt-funded acquisitions or land purchases. Also, S&P do
incorporate any purchases from related parties. In tune with
sluggish market conditions, Pakuwon Jati has lowered its capital
outlay for the next 24 months. S&P forecasts capital expenditure
of about Indonesian rupiah (IDR) 1.5 trillion in 2016 and IDR900
billion in 2017, which S&P expects the company to use primarily
for land purchases and constructing investment properties. S&P
expects this spending to be predominantly financed by growing
cash flows in 2016 and 2017. Given the lower capital expenditure
estimate, S&P expects the company's debt to remain stable in the
next 24 months, at about IDR6 trillion.
"The stable outlook reflects our expectation that Pakuwon Jati
will conservatively manage its growth over the next 24 months,
and that satisfactory project execution will support stable cash
flow adequacy over the period," said Ms. Chan.
S&P could lower the rating if Pakuwon Jati increases its appetite
for debt beyond S&P's expectation and its articulated financial
policies such that the debt-to-EBITDA ratio approaches 3.0x.
Given the high share of recurring income, S&P believes that would
require a step change in the company's capital spending or
larger-than-expected land acquisition. S&P could also lower the
rating if Pakuwon Jati's liquidity erodes due higher adverse
working capital movements.
Rating upside in the next 12 months is unlikely, given the
subdued property market in Indonesia. However, S&P may raise the
rating if Pakuwon Jati expands its operations and improves its
scale and diversity while remaining within its articulated
financial parameters.
=========
J A P A N
=========
KAWASAKI KISEN: Moody's Lowers CFR to Ba3; Outlook Stable
---------------------------------------------------------
Moody's Japan K.K. downgraded Kawasaki Kisen Kaisha, Ltd.'s (K-
Line) corporate family rating to Ba3 from Ba2. The outlook is
stable.
This action concludes the review for possible downgrade initiated
on Feb. 4, 2016.
RATINGS RATIONALE
"The rating action reflects our expectation that the environment
in which K-Line operates will remain challenging, making it
difficult for the company to quickly deleverage," said Moody's
Vice President and Senior Analyst Mariko Semetko.
Since Moody's placed the company's rating under review in
February, the company further lowered its earnings for the fiscal
year ending March 31, 2016, citing very low freight rates in
container ships and dry bulk. In addition, K-Line has lowered
its medium-term targets, which it had originally published a year
ago. It has reduced its ordinary profit target for the fiscal
year ending March 31, 2020, by 47% to JPY45 billion compared to
its plans set a year ago. The lower earnings level will reduce
the speed at which the company deleverages.
At the same time, Moody's expects that the company's
restructuring (including reducing operating expenses and exiting
unprofitable routes) will help turn around its earnings. These
cost efficiencies should over time improve the company's
profitability, barring further material declines in freight
rates. Moody's also notes that K-Line has amassed JPY241.1
billion of cash on hand as of 31 March 2016, providing the
company with liquidity. These factors combined are reflected in
the stable outlook.
The Ba3 corporate family rating reflects our expectations for
protracted high leverage and low profitability as a result of
continued industry-wide overcapacity and depressed freight rates.
At the same time, the rating reflects the company's relatively
large scale compared to global peers and the importance of the
shipping industry to the Japanese economy.
The rating includes uplift to its fundamental credit profile
based on the Japanese support system. Moody's corporate ratings
in Japan account for the country's unusual system of support for
large and important organizations. The uplift balances the
importance of ocean trade to the Japanese economy and K-Line's
third largest position after the two largest shipping companies.
The stable outlook reflects Moody's expectations for gradual
profitability improvements through cost reductions and
restructuring, which in turn should lead to deleveraging though
over the longer term.
The principal methodology used in this rating was the Global
Shipping Industry (Japanese) published in April 2014.
Kawasaki Kisen Kaisha, Ltd., headquartered in Kobe, is the third-
largest shipping company in Japan with revenues of JPY1.2
trillion for the fiscal year ended March 31, 2016. Its
operations are diversified and cover almost all ocean shipping
segments, including containerships, bulk carriers, car carriers,
and energy transports. It operates a fleet of more than 500
vessels, including spot-chartered ships.
MITSUI OSK: Moody's Puts Ba1 CFR Under Review for Downgrade
-----------------------------------------------------------
Moody's Japan K.K. has placed Mitsui O.S.K. Lines, Ltd.'s (MOL)
Ba1 Corporate Family Rating under review for downgrade.
RATINGS RATIONALE
The review stems from MOL's anticipated earnings decline for the
fiscal year ending on March 31, 2017. "Similar to many players
in the shipping industry, we expect MOL will continue to face low
freight rates in the near and medium term," says Moody's Vice
President -- Senior Analyst, Mariko Semetko. The company's
earnings recovery has been, and will likely continue to be, much
slower than Moody's previously anticipated.
Based on MOL's latest guidance released on April 28, 2016,
Moody's now expects debt/EBITDA will remain materially above 7x
in the next 12 to 18 months, a level Moody's previously indicated
that could lead to downward ratings pressures. Moody's also
previously cited that MOL's rating could come under pressure if
there are any signs that profitability will not turn around or if
leverage does not commence to decrease, which now appears to be
the case.
The review will focus on (i) the likelihood of MOL's
containership segment becoming profitable, (ii) the speed at
which the earnings of the bulk ship segment will recover
including the effects of the restructuring, (iii) MOL's financial
policies and plans for managing its capital structure, and (iv)
its ability and willingness to take concrete countermeasures to
lower leverage and improve profitability and cash flow on a
consistent basis. Moody's expects MOL's earnings and cash flow
will be volatile over the next few quarters due to restructuring
activities, and will consider the long term stability of MOL's
earnings and cash flow.
If MOL were to be downgraded as a result of this ratings' review,
Moody's currently expects that the possible outcome will be a
downgrade of no more than one notch.
The principal methodology used in this rating was Global Shipping
Industry (Japanese) published in April 2014.
Mitsui O.S.K. Lines Ltd., headquartered in Tokyo, is one of the
world's largest shipping companies by fleet size with about 900
vessels including spot-chartered ships and vessels owned through
joint ventures. The company is a shipping conglomerate with its
diversified operations covering all shipping segments:
containerships, dry bulkers, car carriers, tankers and LNG
carriers. MOL reported revenues of about JPY1.7 trillion for the
fiscal year ended March 31, 2016.
TAKATA CORP: Five Million New Recalls Ordered in Japan
------------------------------------------------------
Kyodo News reports that the transport ministry has ordered
Japan's automakers to make further recalls of vehicles fitted
with Takata Corp. air bag inflators of the kind being replaced in
the United States, ministry officials said May 10.
Kyodo relates that the instruction made by the Ministry of Land,
Infrastructure, Transport and Tourism could result in a recall of
over 5 million units in Japan. This could push the cumulative
number of domestic recalls to 20 million, the report relays.
According to Kyodo, the move comes after the U.S. road safety
regulator on May 4 ordered Takata to expand its recall to include
all air bag inflators that use ammonium nitrate as propellant and
lack a drying agent.
Kyodo relates that the additional order came on top of 28.8
million inflators already recalled in the United States, making
the Takata inflator recall the largest product safety recall the
U.S. auto industry has ever seen, it said.
The size of the auto parts supplier's global inflator recall is
expected to reach over 100 million units, Kyodo notes.
According to the report, the targeted air bag inflators are
mainly used in front passenger seats. Japanese automakers are
required to tell the transport ministry how they plan to tackle
the recalls by May 20.
"It's a critically important safety issue so we will do
everything we can," transport minister Keiichi Ishii told
reporters on May 10, Kyodo relays.
Kyodo noees that in the face of growing recall-linked costs,
Takata cut its earnings outlook for fiscal 2015 on Monday. It now
expects JPY13 billion in group net loss rather than JPY5 billion
in profit projected earlier.
Takata and automakers such as Honda Motor Co. are expected to
determine how much of the recall-related costs each should share,
adds Kyodo.
As reported in the Troubled Company Reporter-Asia Pacific on
April 14, 2016, Nikkei Asian Review said that Takata Corp, mired
in a deepening air bag scandal, hopes to select a sponsor by
August to pursue restructuring under new management. A third-
party committee of outside attorneys and others had briefed
automakers and banks on the plan by April 19, Nikkei said.
Takata hopes to select a sponsor by the end of August and draw up
fresh rehabilitation plans. It likely will accept a management
team from the sponsor.
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.
=========
M A C A U
=========
MELCO CROWN (MACAU): S&P Affirms 'BB' CCR; Outlook Stable
---------------------------------------------------------
S&P Global Ratings said it affirmed its 'BB' long-term corporate
credit rating on Melco Crown (Macau) Ltd. The outlook is stable.
S&P also affirmed its 'cnBBB-' long-term Greater China regional
scale rating on the Macau-based gaming company. In addition, S&P
affirmed its 'BB-' long-term issue rating and 'cnBB+' long-term
Greater China regional scale rating on the senior notes issued by
MCE Finance Ltd. Melco Crown guarantees the notes.
"We affirmed the ratings on Melco Crown because we expect
continuing good cash flow generation from the group's existing
properties. This strength should offset the risks associated
with the ramp-up of the company's Macau resort, Studio City, the
challenging operating conditions in Macau, and the impact of
recent shareholding changes in the group," said S&P Global
Ratings credit analyst Sophie Lin.
The rating affirmation also reflects S&P's expectation that a
recently announced US$800 million share repurchase will not
affect MCE's credit metrics. S&P takes a consolidated view of
the Melco Crown Entertainment Ltd. (MCE) group when rating its
subsidiary, Melco Crown.
On May 4, 2016, Crown Resorts Ltd. announced that it had sold
down its ownership interest in MCE to 27.4% from 34.3% and
reduced its representation on the MCE board to two members from
three. Crown representative James Packer has also moved to a
deputy chairperson role, from his previous role as co-chair. As
a result, S&P considers that Crown has a reduced level of control
over MCE's cash flows. Accordingly, S&P no longer considers MCE
to be part of the Consolidated Press Holdings Ltd. (the ultimate
parent of Crown) group under S&P's group rating methodology.
Nonetheless, S&P expects MCE to remain an important investment of
Crown and CPH over the next 12 months, and S&P believes Crown
will retain an economic and strategic incentive to provide some
extraordinary support to MCE in the future if required.
Accordingly, S&P do not believe that this ownership change and
the moderating ramp-up risks associated with Studio City have
materially changed the company's credit profile. In S&P's view,
the potential for support from Crown counterbalances the ramp-up
risks from Studio City, and S&P is therefore revising its
comparable rating analysis assessment to neutral from negative.
S&P expects MCE's debt-to-EBITDA ratio to stay below S&P's
downgrade trigger of 4.0x for the company in 2016-2017, despite
some deterioration due to the share repurchase. The full-year
profit contribution from Studio City, MCE's high cash balance,
and a stabilization of Macau gaming industry, underpin S&P's
estimates.
In S&P's view, MCE group will continue to face execution risks in
ramping up Studio City over the next six to 12 months. Weaker
demand or higher operational expenses than S&P expects will
likely hurt the company's profitability and cash flow.
Nevertheless, S&P believes the ramp-up of Studio City is
progressively moderating and should enhance MCE's market position
in Macau, enlarge its operating scale, and sustain the long-term
growth of the MCE Group.
"The stable outlook on Melco Crown reflects our expectation that
MCE's existing casinos will continue to generate good cash flow
and the Macau gaming industry will stabilize, such that MCE's
debt-to-EBITDA ratio will remain below 4.0x over the next 12
months. Nonetheless, we anticipate a slow ramp-up of MCE's new
projects in Macau, given the still-tough operating environment
for the gaming industry in Macau," said Ms. Lin.
S&P may lower the rating on Melco Crown if MCE's financial
performance materially weakens, such that the ratio of debt to
EBITDA exceeds 4.0x on a sustained basis. This could happen if
MCE undertakes additional aggressive shareholder-friendly capital
management or significant debt-funded investments; or the
deterioration in Macau's gaming industry is more severe and
prolonged than anticipated.
S&P could raise the rating on Melco Crown if MCE's ratio of debt
to EBITDA improves to below 3x on a sustained basis, supported by
a robust financial policy framework and prudent approach to
capital management.
===============
M A L A Y S I A
===============
1MALAYSIA: Calls For Meeting With Bondholders on May 23
-------------------------------------------------------
Denise Wee at Bloomberg News reports that as Malaysia's state-
owned investment company reaches out to bondholders to explain
why it has defaulted, some investors say they can't wait to hear
the end of the saga.
Bloomberg relates that 1Malaysia Development Bhd., which
defaulted on dollar-denominated bonds last month and faces
another coupon payment May 10, said it plans a call on May 23 to
explain its dispute with a co-guarantor and how it plans to meet
future obligations. According to Bloomberg, returns on debt from
Malaysian issuers have cooled amid probes into financial
irregularities at 1MDB, whose advisory board has been headed by
Prime Minister Najib Razak.
"The political situation in Malaysia continues to be one of the
biggest, I would say, hurdles for foreign investors," Bloomberg
quotes Arthur Lau, co-head of emerging-market fixed income in
Hong Kong at PineBridge Investments, which manages about $83
billion globally, as saying. "In terms of fundamentals everything
points to be quite O.K., especially now with oil prices
rebounding. The only one thing that really drags is the political
noise."
The ringgit has slumped 3.9% this quarter, turning to Asia's
worst performer from its best in the first quarter, the report
discloses. Bloomberg says the cost of insuring the nation's
sovereign debt against default has risen 8 basis points since
March 31 to 161. Malaysia's corporate dollar bonds returned 1
percent in the period, slipping to eighth place from third place
in the first three months, based on Bank of America Merrill Lynch
indexes, according to Bloomberg.
Bloomberg says dollar bonds from Malaysian issuers are
underperforming even as this quarter's 13 percent crude rally
brightens the outlook for the net oil exporter. While the finance
ministry announced last week that 1MDB's board will resign on
May 31, previous efforts to draw a line under the scandal have
failed. The fund announced plans last year to unwind assets.
"Headlines about 1MDB that keep coming back would probably be
kind of a dampener and may give investors less reason to focus on
the fundamentals," the report quotes Euben Paracuelles, a
Singapore-based economist at Nomura Holdings Inc. "It's very hard
for investors, given their experience last year, to kind of put
it to bed, as saying."
According to Bloomberg, the fund didn't meet a $50 million coupon
payment last month amid a dispute with co-guarantor Abu Dhabi's
International Petroleum Investment Co., which triggered cross
defaults on MYR7.4 billion ($1.85 billion) of 1MDB debt. The
company is due to pay another $52.4 million of interest on
Wednesday on its 5.99 percent notes maturing in 2022, according
to calculations based on Bloomberg data.
"1MDB will now actively engage with all holders in order to
outline the next steps of the process," the company said in a
statement on May 9, Bloomberg relays. It is also asking investors
to hold off any request for early repayment on its Islamic debt,
a person familiar with the matter said last week, Bloomberg
relays.
Bloomberg relates that Pheona Tsang, head of fixed income at BEA
Union Investment Management Ltd., which manages $6.8 billion,
said that the ringgit has already priced in "a lot of political
risk" and she is waiting for a further pullback to buy more.
Christian de Guzman, senior analyst at Moody's Investors Service,
said that Malaysia is buffeted by the same shocks as other
countries and all things considered, seems to be doing "somewhat
alright," the report relays.
The default is the latest episode in financial scandals that have
rocked 1MDB, already the target of investigations in Switzerland,
the U.S. and Singapore into allegations ranging from money
laundering to embezzlement. Both 1MDB and the premier have
consistently denied wrongdoing, the report notes.
AllianceBernstein has been underweight on Malaysia for "a while"
and has a bearish view, said Jenny Zeng, Hong Kong-based
portfolio manager for Asian credit, which manages about
$479 billion, says Bloomberg.
"The 1MDB default is highlighting the risks of contingent
liabilities on the sovereign," Bloomberg quotes Ms. Zeng as
saying. "If I look at Malaysia's banking system and the
sovereign, it's on a gradually deteriorating trend."
About 1MDB
Kuala Lumpur-based 1Malaysia Development Bhd (1MDB) operates as a
government agency. The Company offers financial assistance,
analysis, and advice through investors, corporations, and
consultants to startups and growth companies. 1MDB focuses on
investments with strategic value and high multiplier effects on
the economy, particularly in energy, real estate, tourism, and
agribusiness.
As reported in the Troubled Company Reporter-Asia Pacific on
July 23, 2015, Reuters said Singapore Police Force has frozen two
bank accounts to help with an investigation in to Malaysia's
troubled state-owned investment fund 1Malaysia Development Bhd
(1MDB), which is being probed by authorities in Malaysia for
financial mismanagement and graft. Reuters said the freezing of
the Singapore bank accounts follows a similar move in Malaysia
where a task force investigating 1MDB said earlier in July that
it had frozen half a dozen bank accounts following a media report
that nearly $700 million had been transferred to an account of
Malaysia's Prime Minister Najib Razak.
The Wall Street Journal reported on July 3, 2015, that
investigators looking into 1MDB had traced close to US$700
million of deposits moving through Falcon Bank in Singapore into
personal bank accounts in Malaysia belonging to Najib.
The TCR-AP, citing Bloomberg News, reported on Nov. 26, 2015,
that 1MDB agreed to sell its power assets to China General
Nuclear Power Corp. for MYR9.83 billion ($2.3 billion) as the
state investment company moved one step closer to winding down
operations after its mounting debt raised investor concern.
Bloomberg related that the company faced cash-flow problems after
a planned initial public offering of Edra faced delays amid
unfavorable market conditions, President Arul Kanda said Oct. 31,
2015. The listing plan was later canceled as the company opted
for a sale of the assets, Bloomberg noted.
The TCR-AP, citing The Wall Street Journal, reported on April 27,
2016, that the company defaulted on a $1.75 billion bond issue,
triggering cross defaults on two other Islamic notes totaling
MYR7.4 billion ($1.9 billion).
=====================
P H I L I P P I N E S
=====================
LOYOLA PLANS: Can't Operate Yet, Insurance Commission Says
----------------------------------------------------------
Ben O. de Vera at The Philippine Daily Inquirer reports that the
Insurance Commission (IC) still won't give Loyola Plans
Consolidated Inc. a license to operate even if it has already
paid its dues to several of its planholders.
According to the Inquirer, the latest list of pre-need firms with
certificates of authority for license year 2016 as of May 4
showed 14 companies offering education, life and pension plans,
but troubled Loyola Plans was not on the IC's list.
"We are still monitoring their compliance. For instance, we were
still getting some complaints from some planholders," the report
quotes Insurance Commissioner Emmanuel F. Dooc as saying in a
text message on May 7.
The Inquirer relates that the IC received 95 complaints regarding
the pre-need firm's non-payment of matured benefits. Last month,
the regulator ordered Loyola Plans to immediately settle the
claims, the report recalls.
"We continue to meet with the owner and its management to ensure
that claimants were duly paid," the Inquirer quotes Mr. Dooc as
saying. "We have been pressing them to speed up the sales of
their assets to generate enough cash to be able to pay the claims
as they fall due. They have sold more than a couple of assets and
we expected Loyola to sell more to achieve the desired liquidity
level."
The Inquirer notes that the firm avoided being placed under
conservatorship after its owner, Jesusa Puyat-Concepcion, offered
to sell real estate assets worth PHP1.8 billion to cover a
PHP238.3-million deficiency.
According to the report, Mr. Dooc said IC would only release
Loyola Plans' license once operations were "back to normal."
"The company is not insolvent, but illiquid," Mr. Dooc clarified,
the report relays.
Loyola Plans' trust fund stood at PHP1.5 billion, but
PHP1.7 billion was needed to cover obligations to planholders,
the report notes.
Loyola Plans has major investments in real estate, such as
memorial parks. It had total assets of PHP3.75 billion as of
end-2015.
=================
S I N G A P O R E
=================
GLOBAL A&T: Moody's Retains Caa3 CFR on Appellate Ruling
--------------------------------------------------------
Moody's Investors Service says that the Appellate Division of the
New York Supreme Court's ruling has no impact on Global A&T
Electronics Ltd.'s (GATE) Caa3 corporate family and first lien
senior secured ratings and negative outlook.
On May 3, the Appellate reinstated several claims by certain
bondholders against GATE for its privately negotiated debt
exchange offer.
The Court had previously ruled in favor of GATE to dismiss all
claims made by the plaintiffs against the company's privately
negotiated exchange offer through which it issued $502.3 million
of new notes due February 2019 in exchange for all of its
outstanding second-lien debt totaling $543 million due October
2015.
"While we recognize that the Court's ruling is negative for the
company, GATE's Caa3 rating and negative outlook incorporates the
continued uncertainty regarding a final outcome of the ongoing
legal dispute," says Annalisa DiChiara, a Moody's Vice President
and Senior Credit Officer.
An adverse resolution could result in a material cash outflow due
to an unwinding of the transaction and a potential acceleration
of up to $1.1 billion in debt under a default scenario.
In addition, should a default occur, Moody's estimates the
prospect of recovery of full principal and interest for first
lien bondholders to be low.
"GATE's tangible assets value has been declining as the company
has been consolidating facilities. Cash will also decline in
2016 based on our expectation of a muted operating performance,
high cash costs and negative free cash flow, adds DiChiara.
The company had about $135 million cash on hand and about $587
million of tangible assets (cash on balance sheet plus reported
plant, property and equipment) as of March 2016. Moody's has
outlined its views on GATE's liquidity position and recovery
values in a report titled 'Global A&T Electronics Ltd.: High Cash
Burn Rate, Liquidity Squeeze Point to Untenable Capital
Structure' published on March 31, 2016.
The ultimate outcome of the dispute remains uncertain. GATE
announced on May 5, it is considering appealing the Appellate
Division's decision, which could result in a continued and
prolonged litigation.
The negative outlook reflects ongoing pressure on GATE's
operating performance and increasing liquidity pressure. It also
considers the uncertainty regarding the outcome of the dispute
with some if its bondholders.
The outlook could revert to stable or the ratings could be
upgraded if the bondholder dispute is resolved with limited
adverse impact on the company's operating performance, including
its market share, revenue growth and cash flows. Moody's would
also need to see a sustained improvement in liquidity with
positive free cash flow.
Downward pressure would emerge if (1) an event of default is
declared, triggering an acceleration of up to $1.1 billion in
debt; (2) the exchange transaction unwinds, creating significant
near-term default risk; or (3) its cash balance falls below $100
million,
The principal methodology used in these ratings was Semiconductor
Industry Methodology published in December 2015.
Global A&T Electronics Ltd. is a leading provider of
semiconductor assembly and test services. It operates under the
name UTAC, with manufacturing facilities in Singapore, Taiwan,
Thailand and China. UTAC was privatized through a leveraged buy-
out by a private equity group led by TPG Capital (47.7%) and
Affinity Equity Partners (47.7%) in October 2007.
====================
S O U T H K O R E A
====================
EXPORT-IMPORT BANK: KDB to Inject Capital Through KAI shares
------------------------------------------------------------
Park Hyong-ki at The Korea Herald reports that the state-run
Korea Development Bank said May 10 that it will hand over its
shares of Korea Aerospace Industries to the Export-Import Bank of
Korea as part of an emergency financial relief.
"We have decided to give our KAI shares to Eximbank," KDB chief
executive Lee Dong-geol told reporters ahead of a meeting with
the Financial Services Commission on May 10, the report relays.
According to the report, KDB will hand over its 7.86 percent
stake in KAI worth about KRW500 billion ($426 million) to boost
the capital base of Eximbank Korea, whose BIS adequacy ratio has
been falling on growing exposure to the bad debts of shipping and
shipbuilding companies.
KDB is the biggest shareholder of KAI with a 26.75 percent stake,
the Korea Herald discloses citing KAI's annual audit filing.
Eximbank's BIS ratio stands at around 10 percent, well below the
standard threshold of 15 percent, despite receiving a capital
injection of some 1 trillion won through shares of the state-run
Korea Land & Housing Corp. by the government last year, according
to the report.
The Korea Herald notes that the shares of KAI that KDB gives to
Eximbank Korea will be credited on the policy bank's balance
sheet, boosting its capital. The report says the government has
been debating with the central bank on how to provide liquidity
to both KDB and Eximbank, which will have to finance massive
restructuring of companies under heavy debt. According to the
report, the Bank of Korea said that it would be appropriate to
recapitalize banks through a fund using bank bonds as collateral
as it did in the aftermath of the global financial crisis of
2008, instead of directly providing liquidity through money-
printing measures, to minimize losses.
The Export-Import Bank of Korea operates as an official export
credit agency that provides export credit and guarantee programs
to support Korean enterprises conducting overseas business. The
company provides export, import, and overseas business related
loans; rediscount on trade bills; financial and performance
guarantees; equity and bond financing; and structural trade
finance services. It also offers service industry finance;
environment-friendly energy industry financing; Natural resources
development financing; and investment banking services including
project development, financial advisory, financial arrangement,
and equity participation for transactions or projects related to
Korean firms' export, overseas investment, natural resource
development, and M&A of overseas companies.
===========
T A I W A N
===========
HTC CORP: Posts NT$2.6BB Net Loss in Quarter Ended March
--------------------------------------------------------
Nikkei Asian Review reports that embattled smartphone maker HTC
Corp. on May 9 reported losses for the fourth consecutive quarter
amid a slump in global demand for mobile gadgets. Nikkei relates
that the company said it would continue to cut costs in an
attempt to arrest the losses and it also hinted at spinning off
its virtual reality unit.
For the three-month period ended in March, HTC lost NT$2.6
billion ($80.14 million), or NT$3.16 per share, on revenue of
NT$14.8 billion, down 64.33% year-over-year Nikkei relays.
According to Nikkei, the Taiwanese company had been pouring
resources into the nascent virtual reality field over the past
few months, a move that has yet to significantly boost its
performance. HTC only began to ship its first virtual reality
headset model, HTC Vive, in April.
"Within this very high potential market, we are going to put in
resources to make sure that we have a long-term success in this
sector and industry and hopefully it will benefit the
shareholders," Nikkei quotes HTC Chief Financial Officer Chang
Chalin as saying. "There are various ways we are thinking about
it."
Mr. Chang was replying to queries about whether his company was
mulling a possible spinoff of its expanding virtual reality
business during an earnings call, Nikkei says.
"You probably won't be able to control your revenue, but you can
somewhat control your operating expenses, in terms of R&D
[research and development], marketing, sales and infrastructure
expenses," Mr. Chang said when asked how HTC will balance its
revenue and costs later this year, Nikkei relays. A HTC
spokeswoman denied the company is starting a new round of
layoffs.
According to Nikkei, HTC announced last August it would cut 15%
of its workforce, or roughly some 2,300 positions. The layoffs
were completed at the end of 2015, the report notes.
Whether HTC shareholders can benefit a virtual reality spinoff
remains doubtful, says Nikkei.
"HTC's smartphone business is deteriorating and it is entering a
vicious cycle as the company is looking to slash expenses for
research, development and marketing," the report quotes Jeff Pu,
an analyst at Yuanta Investment Consulting, as saying. "If HTC
spins off its virtual reality unit, the company will only suffer
a greater decline due to its flagging core smartphone business."
Taiwan-based HTC Corp. engages in the design and manufacture of
mobile devices. It engages through the Smartphone and Others
divisions.
===============
X X X X X X X X
===============
FIJI: Moody's Affirms B1 Rating; Outlook Positive
-------------------------------------------------
Moody's Investors Service has affirmed the Government of Fiji's
foreign currency and local currency issuer ratings at B1. The
outlook on these ratings have been revised to positive from
stable.
The key drivers of the outlook revision are:
The expectation that higher economic growth and macro-economic
stability will endure over the medium-term, notwithstanding
the near-term impact from Tropical Cyclone Winston.
The likelihood that the sovereign credit profile will continue
to strengthen due to lower political risk, policy reforms, and
improved funding conditions
Fiji's foreign currency senior unsecured rating has also been
affirmed at B1.
The local currency bond and deposit ceilings were raised to Ba1
from Ba2. The foreign currency bond ceiling is Ba3 and the
foreign currency deposit ceiling is B2.
RATINGS RATIONALE
RATIONALE FOR THE POSITIVE OUTLOOK
First driver: Improving economic strength illustrated by robust
growth and stability in inflation and the balance of payments
Fiji's recent economic performance suggests that it has
transitioned to higher, more stable growth. In 2015, Fiji's real
GDP grew above 4% for the third consecutive year, which also
represented the sixth straight year of expansion. In contrast,
the 10-year period up to 2009 was marked by low and volatile
growth, with real GDP rising by an average of 1.3%.
Moreover, rapid growth in recent years has been accompanied by
low inflation, stability in the balance of payments and robust
foreign exchange reserves. Increased government spending on
infrastructure and education, coupled with robust private sector
sentiment, will support ongoing improvements in the capital stock
and potential growth.
Moody's expects the impact of Tropical Cyclone Winston to be
short-lived and unlikely to derail Fiji's economic momentum.
Although sugar production will decline this year, Fiji's critical
infrastructure, urban areas, and tourism assets were largely
unaffected. Rehabilitation and reconstruction activity will
partly offset the damage to agricultural production in cyclone-
affected areas, while assistance provided through withdrawals
from the Fiji National Provident Fund may help to boost
consumption more broadly. International aid flows and a likely
boost to inward remittances from overseas Fijians will also
mitigate the potential drag from exports on the balance of
payments.
Weaker energy prices have passed through to lower inflation and
have contained import costs, supporting consumers' purchasing
power and the current account, respectively. Moreover, Fiji's
tourism sector has been resilient to softer economic conditions
in its key international markets, Australia (Aaa stable) and New
Zealand (Aaa stable), both of which have been negatively impacted
by the terms of trade shock from the commodities downturn.
Tourist arrivals reached a record high in 2015, and continued to
post solid year-on-year gains through the first quarter of 2016
in spite of the cyclone. Growth in arrivals from relatively new
markets, such as China, will sustain the prospects for tourism.
Second driver: Political stability, policy reforms and improved
funding conditions following the recent political transition
The government has implemented policies that are likely to
support improvements in Fiji's sovereign credit profile. Robust
economic growth has bolstered the government's legitimacy and
provides a favorable context in which to implement policy change.
Since the return to electoral democracy in 2014, the government
under Prime Minister Josaia Voreqe Bainimarama has continued some
of the reforms initiated during the previous military
administration, including those related to the pension system and
the sugar industry. The restructuring of the civil service and
public enterprises have accelerated recently. Regulatory
refinements over the past year, including the modernization of
both the companies act and the income tax act, bolster the
investment climate.
Tax reform has increased compliance and revenue buoyancy.
Revenue as a share of GDP excluding privatization receipts
reached multi-year highs in 2015. Coupled with the lower
domestic interest rates that have resulted from broad
macroeconomic stability in recent years, the rise in revenue has
enhanced debt affordability. Interest payments have trended
downwards as a share of revenue since a recent peak in 2011,
while the government's debt burden has concurrently declined.
The government has also reengaged the international community, in
particular, regaining access to the funding and expertise of
multilateral development banks, such as the World Bank (IBRD, Aaa
stable) and the Asian Development Bank (ADB, Aaa stable).
Notably, these two institutions have supplied technical
assistance for the government's privatization of certain public
enterprises, while also providing direct lending for
infrastructure development. The World Bank has set aside up to
$125 million in loans, while the ADB has indicated a much larger
envelope of $350 million through 2018. These lines of financing
will help to diversify and lower the costs of government funding,
which has been largely market-based over the past decade.
RATIONALE FOR AFFIRMATION OF THE B1 RATING
The balance of Fiji's credit strengths and challenges compared to
similarly rated peers keep its sovereign credit profile
consistent with a B1 rating currently. But, improving economic
and institutional strength suggest upward pressure over time.
The government's debt burden is high compared to similarly rated
countries, although this is mitigated by stable domestic
financing from the Fiji National Provident Fund. Moreover, the
proportion of debt denominated in foreign currency has risen
significantly over the past five years and, along with higher
current account deficits relative to rating peers, indicate a
degree of vulnerability to external shocks. Robust economic
performance in recent years has also been accompanied by both
wider fiscal deficits and rapid credit growth.
Progress in addressing these constraints will determine future
rating actions. In particular, the government will face
challenges in managing the near-term fiscal impact of Tropical
Cyclone Winston against its medium-term goal of fiscal and debt
consolidation.
WHAT COULD CHANGE THE RATING UP
An upgrade would be predicated on evidence that economic recovery
following Tropical Cycle Winston will endure and allow a return
to fiscal consolidation. Continued strengthening in Fiji's
fiscal metrics and external payments position would be credit
positive.
WHAT COULD CHANGE THE RATING DOWN
In view of the positive outlook, a downward rating movement is
unlikely over the short term, but the outlook could move back to
stable if growth, fiscal and debt trends are weaker than we
anticipate. The reemergence of domestic political risks or
balance of payments strains, both of which have contributed to
downward ratings pressure in the past, would be credit negative.
GDP per capita (PPP basis, US$): 9,044 (2015 Estimate) (also
known as Per Capita Income)
Real GDP growth (% change): 4% (2015 Estimate) (also known as
GDP Growth)
Inflation Rate (CPI, % change Dec/Dec): 1.6% (2015 Actual)
Gen. Gov. Financial Balance/GDP: -4.1% (2015 Actual) (also
known
as Fiscal Balance)
Current Account Balance/GDP: -2.8% (2015 Estimate) (also known
as External Balance)
External debt/GDP: 20.7% (2015 Estimate)
Level of economic development: Low level of economic resilience
Default history: No default events (on bonds or loans) have
been recorded since 1983.
On May 4, 2016, a rating committee was called to discuss the
rating of the Fiji, Government of. The main points raised during
the discussion were: The issuer's economic fundamentals,
including its economic strength, have materially increased. The
issuer's institutional strength/framework, have materially
increased. Other views raised included: The issuer's fiscal or
financial strength, including its debt profile, has not
materially changed. The issuer's susceptibility to event risks
has materially decreased. An analysis of this issuer, relative
to its peers, indicates that a repositioning of its rating would
be appropriate.
The principal methodology used in these ratings was Sovereign
Bond Ratings published in December 2015.
The weighting of all rating factors is described in the
methodology used in this credit rating action, if applicable.
*********
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
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latest balance sheets publicly available a day prior to
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Don't be fooled. Assets, for example, reported at historical
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*********
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,
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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
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*** End of Transmission ***