/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/160706.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, July 6, 2016, Vol. 19, No. 132 Headlines A U S T R A L I A ABBONDARE PTY: First Creditors' Meeting Set For July 12 GUVERA AUSTRALIA: Has Until July 7 to Present Rescue Plan JOHANNA JOHNSON: Designer Sells Home for AUD3.2 Million SAM MANAGEMENT: First Creditors' Meeting Set For July 13 SRM PLUMBING: First Creditors' Meeting Slated For July 13 TEECEE TRANSPORT: First Creditors' Meeting Set For July 13 TRITON MINERALS: Gets Two Competing Recapitalization Bids UGLII GROUP: Provides Undertaking to Court C H I N A WEST CHINA: Moody's Confirms Ba3 CFR; Outlook Negative I N D I A ANANT EDUCATIONAL: CRISIL Reaffirms B- Rating on INR77.5MM Loan B.J. GRAIN: CARE Assigns B+ Rating to INR6cr Long Term Loan BIRBAL INTERNATIONAL: Ind-Ra Affirms 'IND B+' LT Issuer Rating CONCORD HOSPITALITY: Ind-Ra Affirms 'IND D' LT Issuer Rating ECO SAND: CRISIL Assigns 'B' Rating to INR89.4MM Term Loan ELECON CONDUCTORS: CRISIL Reaffirms B+ Rating on INR55MM Loan ETA ENGINEERING: CRISIL Lowers Rating on INR4.41BB Loan to 'D' G AND G ISPAT: CRISIL Suspends B- Rating on INR70MM Cash Loan GOYA AGRO: CRISIL Assigns B+ Rating to INR45MM Cash Loan GM SUGAR: CARE Assigns B+ Rating to INR40cr LT Bank Loan GOYAL KNITWEARS: CARE Lowers Rating on INR20.53cr ST Loan to 'D' INDO GERMAN: Ind-Ra Assigns 'IND BB-' LT Issuer Rating NAMDHARI RICE: CARE Assigns 'B-' Rating to INR11.50cr LT Loan JASMER PACK: Ind-Ra Affirms 'IND BB' LT Issuer Rating KESHAV ENTERPRISES: CRISIL Lowers Rating on INR110MM Loan to D KJ ISPAT: CRISIL Lowers Rating on INR80MM Cash Loan to B- KONDUSKAR TRAVELS: CRISIL Lowers Rating on INR115MM Loan to B- MAHESHWAR MULTITRADE: CARE Reaffirms B+ Rating on INR8.91cr Loan OASIS COMMERCIAL: Ind-Ra Assigns 'IND BB+' LT Issuer Rating OASIS OVERSEAS: Ind-Ra Assigns 'IND BB+' LT Issuer Rating P.D. AGRO: CRISIL Reaffirms 'B' Rating on INR80.0MM Cash Loan PRAKASH STEELAGE: CARE Lowers Rating on INR150cr LT Loan to 'D' RAMALINGESHWARA COTTON: CARE Puts B+ Rating on INR5.80cr LT Loan PROMINENT METAL: CARE Assigns B+ Rating to INR15cr LT Bank Loan RAMCO INTERNATIONAL: Ind-Ra Assigns 'IND BB-' LT Issuer Rating SARTHAK ENTERPRISE: CRISIL Reaffirms B+ Rating on INR27.5MM Loan SATYAM COTTEX: CARE Reaffirms B+ Rating on INR5.81cr LT Loan SEVEN SEAS: CRISIL Reaffirms B+ Rating on INR2.18BB Term Loan SHAKUNTALA WARE: CRISIL Suspends 'B' Rating on INR160MM Loan SHIVALIK I.B.: CRISIL Assigns B+ Rating to INR150MM e-DFS SHIVPRASAD FOODS: Ind-Ra Assigns 'IND BB-' LT Issuer Rating SHRI GARGI: CARE Revises Rating on INR20cr LT Loan to 'B' SHRINET AND SHANDILYA: CARE Assigns B+ Rating to INR3.0cr LT Loan SHUBHYAN MOTORS: CRISIL Reaffirms B- Rating on INR63MM LT Loan SILVER STAR: Ind-Ra Assigns 'IND B' LT Issuer Rating SINGH AUTOMOBILE: Ind-Ra Assigns 'IND BB-' LT Issuer Rating SKC INFRATECH: CRISIL Suspends B+ Rating on INR80MM Loan SRI VIJAYA: Ind-Ra Affirms 'IND B+' Long Term Issuer Rating STERLING GATED: CARE Upgrades Rating on INR60cr LT Loan to B+ SUBIZZ TRAVEL: CARE Assigns B+ Rating to INR0.44cr LT Loan TAMILNADU STATE: CARE Reaffirms 'B' Rating on INR15cr LT Loan TROY IFMR: Ind-Ra Rates INR24.1MM Series A2 PTCs at IND BB-(SO) UNIVERSAL HEAT: CRISIL Assigns B- Rating to INR140MM Cash Loan V. G. SHIPBREAKERS: CRISIL Cuts Rating on INR80MM Loan to 'D' VAISHNODEVI OIL: CRISIL Reaffirms B+ Rating on INR85MM Loan I N D O N E S I A MULTIPOLAR TBK: Fitch Cuts LT Issuer Default Rating to 'B' MODERNLAND REALTY: Fitch Affirmed 'B' LT IDR; Outlook Negative S O U T H K O R E A KOREA: Troubled Shippers, Shipbuilders Suffer Rating Downgrades S R I L A N K A SIERRA CABLES: Fitch Assigns 'BB+(lka)' Long-Term Rating X X X X X X X X FIJI REPUBLIC: S&P Affirms 'B+' Sovereign Ratings; Outlook Stable * Unenforced & Arbitration Judgments Cost 14% of Cos. Over $50M - - - - - ================= A U S T R A L I A ================= ABBONDARE PTY: First Creditors' Meeting Set For July 12 ------------------------------------------------------- Jason Bettles and Raj Khatri of Worrells Solvency & Forensic Accountants were appointed as administrators of Abbondare Pty Ltd on July 4, 2016. A first meeting of the creditors of the Company will be held at Level 5, HQ@Robina, 58 Riverwalk Avenue, in Robina, on July 12, 2016, 2:30 p.m. GUVERA AUSTRALIA: Has Until July 7 to Present Rescue Plan --------------------------------------------------------- Ben Butler and Christine Lacy at The Australian reports that directors of cash-strapped music streaming service Guvera have been given until July 7 to come up with a rescue plan acceptable to creditors owed AUD15 million. According to The Australian, the future of the group, headed by Gold Coast entrepreneur Darren Herft, was plunged into doubt on June 27 when it put two subsidiaries into administration after the ASX knocked back Guvera's bold plan to list with a valuation of more than AUD1 billion. And while the move was designed to provide Guvera with time to restructure, it may end up costing the company AUD15,000 a day -- almost AUD5.5m a year -- in music licensing fees, the report says. The Australian relates that an IPO would have provided the loss- making Guvera with essential capital to pay its debts, including to the Tax Office and music copyright collection society APRA AMCOS. At risk is about AUD180m pumped into the group by about 3000 investors, most of whom are believed to be clients of accountants signed up to Mr Herft's AMMA Private Equity network, according to the report. Last week, Guvera launched a final effort to raise AUD15m-AUD20m over the next fortnight, the report recalls. Asked about progress of the fundraising attempt, Mr Herft said: "All going well," The Australian relays. He did not respond to further queries. According to The Australian, Deloitte partner Neil Cussen, the administrator of the two subsidiaries, Guvera Australia and Guv Services, said he hoped Guvera management would propose a deed of company arrangement under which sacked employees would receive their full entitlements and other creditors would receive full or part payment over time. He said about 60 workers employed by Guv Services were sacked last week, but about a third had been re-employed elsewhere in the Guvera group. Workers and 90 trade creditors are owed a total of about AUD15m and are to meet on July 7, the report relates. "We're working with Guvera management; we're hoping we receive a proposal on or around the creditors' meeting that we can discuss," the report quotes Mr Cussen as saying. If creditors do not approve a deal, the two companies are likely to be liquidated. "If there's liquidation, that's not a good result and we'd probably have to refer employees to FEG (the Fair Entitlements Guarantee Scheme)," Mr Cussen said. JOHANNA JOHNSON: Designer Sells Home for AUD3.2 Million ------------------------------------------------------- Lucy Macken at Domain reports that celebrity bridal designer Johanna Johnson has some good news for her many creditors and the tax office thanks to a secret off-market sale of her Vaucluse home. But news of the high-end sale came as a surprise to the company liquidator this week when notified about the result by Domain. Domain relates that Ms Johnson, who is known for dressing the likes of Hollywood's Christina Hendricks and Foreign Affairs Minister Julie Bishop, secured about AUD3.2 million from a local buyer for the recently renovated home she owns with her husband Andrew Johnson. According to the report, the Johnsons' Cambridge Avenue semi is spread over two storeys on 445 square metres with an open-plan living and dining area and lock-up garage. Domain relates that records show the result offers a windfall of more than AUD1 million to the couple given their purchase price of AUD2 million three years ago. However, liquidator Tim Cook, of Balance Insolvency, said the sale was unlikely to save the fashion house from insolvency given there are more than 100 creditors owed money from the company, including about 70 brides-to-be with outstanding orders, according to Domain. Earlier last week, much of the company's remaining stock was sold off, including more than 100 dresses, some of which sold for more than AUD1,000 each, Domain recalls. In April, voluntary administrator Adam Shepard recommended to the Supreme Court that a liquidator be appointed and the company wound up given the "substantial liabilities" and an outstanding debt to the tax office of AUD1.1 million. That tax debt included AUD300,000 in superannuation charges payable on behalf of staff over many years, according to Domain. Ms Johnson had disputed the tax office assessment of her liability, adds Domain. Adam Shepard of Farnsworth Shepard was appointed as administrator of Johanna Johnson Pty Ltd on April 13, 2016. Tim Cook of Balance Insolvency was appointed as liquidator two weeks following the appointment of administrator. SAM MANAGEMENT: First Creditors' Meeting Set For July 13 -------------------------------------------------------- Bradley John Tonks & John Vouris of PKF were appointed as administrators of Sam Management Pty Limited on July 1, 2016. A first meeting of the creditors of the Company will be held at PKF, Level 8, 1 O'Connell Street, in Sydney, on July 13, 2016, at 2:30 p.m. SRM PLUMBING: First Creditors' Meeting Slated For July 13 --------------------------------------------------------- David Ingram and Cameron Shaw of Hall Chadwick Chartered Accountants were appointed as administrators of SRM Plumbing Pty Ltd on July 1, 2016. A first meeting of the creditors of the Company will be held at Hall Chadwick Chartered Accountants, Level 11, 16 St Georges Terrace, in Perth, on July 13, 2016, at 11:00 a.m. TEECEE TRANSPORT: First Creditors' Meeting Set For July 13 ---------------------------------------------------------- Richard Albarran and Cameron Shaw of Hall Chadwick were appointed as administrators of Teecee Transport Pty Ltd ATF TC Discretionary Trust on July 1, 2016. A first meeting of the creditors of the Company will be held at The Duxton Hotel, 1 St Georges Terrace, in Perth, on July 13, 2016, at 10:00 a.m. TRITON MINERALS: Gets Two Competing Recapitalization Bids --------------------------------------------------------- Fraser Beattie of BusinessNews report that a corporate finance firm and a private gold company have put forward competing proposals to recapitalize Triton Minerals. According to the report, administrators Ferrier Hodgson said it had received a deed of company arrangement proposal from Somers & Partners and a recapitalization deed proposal by Minjar Gold. BusinessNews relates that Somers & Partners has proposed a fully underwritten entitlements issue of 226.7 million shares at 6 cents each to raise about AUD13.6 million. The firm has paid a AUD1 million deposit, AUD300,000 of which is non-refundable, and it expects to take up to four months to raise the funds, BusinessNews says. If successful, Somers & Partners will have the right to nomimate one director to Triton's board, while all existing directors except Garth Higgo and Paula Ferreira would resign, the report says. BusinessNews says Minjar, meanwhile, is offering a placement of 105.2 million shares at 8 cents each to raise AUD8.4 million, and following that it plans to conduct an entitlement offer at 4 cents each to raise a further AUD7 million. According to BusinessNews, Ferrier Hodgson said while Minjar's proposal quoted a shorter timeframe for completion (of one-to-two months), it warned that it could actually take closer to six months to receive the funds. "The terms of recapitalization deed and the subsequent underwriting agreement (proposed by Minjar) have not been agreed by the administrators of the company," the administrator said, BusinessNews relays. Martin Jones, Andrew Smith and Dermott McVeigh of Ferrier Hodgson were appointed as administrators of Triton Minerals Limited on March 2, 2016. Triton Minerals Limited is an ASX listed mineral exploration and development company focused on exploring and developing the graphite recourses of their 80% interest in the Cabo Delgado Province of Mozambique, Grafex Lda (Grafex). UGLII GROUP: Provides Undertaking to Court ------------------------------------------ As part of proceedings commenced by Australian Securities and Investments Commission to appoint provisional liquidators to six companies within the Uglii Group, the defendant companies have given an undertaking to the Federal Court relating to the offer of shares. In particular, the defendant companies, upon ASIC's request, have given an undertaking to the Court that they will not make any offer of shares in the companies except: -- to sophisticated or professional investors as defined in the Corporations Act; -- to persons who are associated with the defendant companies as defined in the Corporations Act; -- to existing shareholders who have invested AUD100,000 or more; -- to persons who are outside Australia and who are neither Australian residents or citizens; or -- through the holder an Australian Financial Services Licence who has given advice to the investor prior to the purchase of shares. At a hearing on July 1, 2016, ASIC consented to an adjournment of its application for the appointment of provisional liquidators to the defendant companies until 10:15 a.m. on July 29, 2016, upon the provision of the undertaking. The adjournment was sought to give the defendants time to file any affidavits that they wish to rely in opposition to ASIC's applications and are to be filed by no later 4:00 p.m. on July 22, 2016. As reported in the Troubled Company Reporter-Asia Pacific on June 21, 2016, ASIC applied to the Federal Court of Australia for the appointment of provisional liquidators to six companies within the Uglii Group, namely: * Uglii Corporation Limited (ACN 085 265 309); * Traralgon Technology Holdings Limited (ACN 130 403 520); * Uglii Find Australia Limited (ACN 101 790 505); * BizMio Limited (ACN 123 172 412); * Projects Discovery Services Pty Ltd (ACN 112 690 347); and * Uglii Ads System Pty Ltd (ACN 604 405 263) Uglii Corporation Limited is an information technology development company that is based in Traralgon, Victoria. Uglii is an unlisted public company with approximately 2,500 shareholders. ========= C H I N A ========= WEST CHINA: Moody's Confirms Ba3 CFR; Outlook Negative ------------------------------------------------------ Moody's Investors Service has confirmed West China Cement Limited's (WCC) Ba3 corporate family and senior unsecured ratings. The ratings outlook is negative. This concludes the ratings review initiated on Dec. 1, 2015. On June 30, 2016, WCC and Anhui Conch Cement Company Limited (Conch, A3 stable) jointly announced that the transaction agreement announced on Nov. 27, 2015, had been terminated. The termination was because of the fact that certain conditions had not been satisfied or waived before the transaction's long stop date of June 30, 2016, including and not limited to the approval by Chinese commerce authorities. Under the original agreement, WCC was to receive four of Conch's cement-producing companies based in Shaanxi Province in exchange for its issuance of new shares to Conch. Under this scenario, WCC would have seen Conch become its largest shareholder, with an equity stake of 51.6% from the current 21.2%. RATINGS RATIONALE "The rating confirmation reflects WCC's financial performance and Moody's expectation that its operation and access to funding have been strengthened by its association with Conch, even though the latter's equity stake in WCC has not risen because of the transaction's termination," says Gerwin Ho, a Moody's Vice President and Senior Analyst. WCC's adjusted EBITDA margin is expected to remain stable at 27- 28% over the next 12-18 months -- compared with 27.7% in 2015 -- as lower production costs for its products partially offset the effects of downward pricing pressure. Moody's expects WCC to generate positive free cash flow in 2016, which will help reduce debt, given its reduced capital spending. As a result, we expect debt/EBITDA to decline to 3.7-4.0x over the next 12-18 months from 4.0x in 2015. This level of leverage positions WCC in the Ba-rating level. On the other hand, Moody's expects WCC's revenues to fall moderately due to weak market fundamentals. Moody's expects that the consolidation in China's cement manufacturing industry will continue over the next 1-2 years, with surviving producers benefiting from a reduced level of production capacity against the backdrop of difficult market conditions. In this context, Moody's believes that WCC has the opportunity to become one of the surviving producers over the long term because of Conch's investment. Thus, Moody's expects WCC to benefit from the achievement of business synergies with Conch, a development which will likely include operating support to reduce costs; better management of supply; reductions in borrowing costs; and improvements in access to the bank and capital markets. The negative outlook reflects Moody's concerns over WCC's weak liquidity position against the backdrop of weak pricing in the cement manufacturing industry. Reported cash/short-term debt was at a low level, measuring only 39% at end-2015. Upgrade pressure in the near term is unlikely, given the negative outlook. However, the ratings outlook could return to stable, if (1) WCC achieves a sound liquidity position, such that its cash balance fully covers its short-term debt; (2) WCC is disciplined in its capital expenditure; (3) WCC does not undertake acquisitions over the next 12 months, given the difficult nature of the market; and (4) Conch does not reduce its investment in WCC. On the other hand, downward rating pressure could emerge, if WCC's financial and/or liquidity position weakens because of falling revenues; rising costs; aggressive acquisitions; or unexpected shareholder distributions. Financial indicators of a rating downgrade include EBITDA margins below 20% -25%, or debt/EBITDA exceeding 3.5x - 4.0x on a sustained basis. Any reduction in WCC of Conch's level of ownership will also be negative for WCC's ratings. The principal methodology used in these ratings was Building Materials Industry published in September 2014. West China Cement Limited (WCC) is one of the leading cement producers by capacity in China's Shaanxi province. At end-2015, the company's annual production of cement was 29.2 million tons. Its revenues totaled RMB3.5 billion in 2015. Anhui Conch Cement Company Limited -- listed on Hong Kong Stock Exchange since 1997 and the Shanghai Stock Exchange since 2002 -- is the second-largest cement producer in China by production volume. The company had about 229 million tons per annum (mtpa) clinker capacity and 290 mtpa cement capacity in 2015. In FY2015, it recorded RMB51 billion in sales. The Anhui Provincial Government indirectly owned an 18.8% equity stake in the company at end 2015. ========= I N D I A ========= ANANT EDUCATIONAL: CRISIL Reaffirms B- Rating on INR77.5MM Loan --------------------------------------------------------------- CRISIL's ratings on the bank facilities of Anant Educational Trust (AET) continue to reflect AET's below-average financial risk profile because of a leveraged capital structure and muted debt protection metrics, constraining its financial flexibility. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Overdraft Facility 7.5 CRISIL A4 (Reaffirmed) Proposed Long Term Bank Loan Facility 5.0 CRISIL B-/Stable (Reaffirmed) Term Loan 77.5 CRISIL B-/Stable (Reaffirmed) The ratings also factor in the trust's exposure to risks related to restrictions imposed by regulatory bodies and to intense competition in the education sector. These rating weaknesses are partially offset by the benefits AET derives from the extensive experience of its trustees in the education sector. Outlook: Stable CRISIL believes AET will continue to benefit over the medium term from the extensive industry experience of its trustees and its association with Delhi Public School (DPS). The outlook may be revised to 'Positive' if continued significant ramp-up in scale of operations, with an increase in student intake while improving its profitability, leads to positive accrual and significant improvement in liquidity. Conversely, the outlook may be revised to 'Negative' in the event of further dip in occupancy and profitability, or significant deterioration in liquidity because of large capital expenditure. AET was set up in 2011. The trust set up a school under the DPS brand in Patiala (Punjab) in 2012-13 (refers to financial year, April 1 to March 31). Mr. Ramesh Talwar is the key promoter- trustee who looks after AET's operations. AET's estimated net deficit stood at INR6.0 million on estimated net sales of INR40.7 million for 2015-16, as against net deficit of INR12.7 million on net sales of INR27.6 million for 2014-15. B.J. GRAIN: CARE Assigns B+ Rating to INR6cr Long Term Loan ----------------------------------------------------------- CARE assigns 'CARE B+' rating to the bank facilities of B.J. Grain. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank Facilities 6 CARE B+ Assigned Rating Rationale The rating assigned to the bank facilities of B.J. Grain (BJG) is constrained by the proprietorship nature of constitution, nascent stage of operations, presence in the highly competitive and fragmented agro-trading industry along with exposure to commodity price fluctuation risk and seasonal nature of availability of trading material resulting in working capital intensive nature of business. The above weaknesses are partially offset by the proprietor's satisfactory experience in liquor trading business. Attainment of stability of operations and managing the working capital needs during the initial stage of operations will be the key rating sensitivity. Established in October 2015 as a proprietorship entity, BJG is engaged in trading of grains and pulses. The firm started its commercial operations from February, 2016. BJG procures the raw material primarily from the domestic market partly through various brokers, processing mills and partly from farmers present in the vicinity of Nagpur and adjoining region. The entity's sales are entirely domestic with majority sales to distilleries located in and around Vidarbha region directly or via various brokers. The firm sells its products mainly to distilleries like Radico Distilleries (Aurangabad), Anand Distilleries (Nagpur), etc. The firm does not have owned storage facilities to store the traded goods; instead the facilities are leased as and when required. BIRBAL INTERNATIONAL: Ind-Ra Affirms 'IND B+' LT Issuer Rating -------------------------------------------------------------- India Ratings & Research (Ind-Ra) has affirmed Birbal International Private Limited's (BIPL) Long-Term Issuer Rating at 'IND B+'. The Outlook is Stable. A full list of rating actions is at the end of the commentary. KEY RATING DRIVERS The ratings continue to reflect BIPL's small scale of operations and a dip in its EBITDA margins. The company's FY16 provisional financials indicate revenue of INR417.89m with deterioration in the company's operating EBITDA margins to 8.38% from 9.67% in FY15. The ratings are constrained by BIPL's presence in a highly fragmented and competitive textile industry and its working capital intensive nature of business. The ratings, however, reflect BIPL's improved credit metrics in FY16 as reflected by its gross interest coverage (operating EBITDA/gross interest expense) of 2.00x (FY15: 1.79x) and financial leverage (total adjusted debt/ operating EBITDAR) of4.58x (5.44x). The ratings are supported by three decades of operating experience of BIPL's promoters in the textile business and its strong relationships with the customers and suppliers. The ratings are further supported by comfortable liquidity position of the company with the average utilisation of its packing credit limit being at 56.44% during the 12 months ended May 2016. RATING SENSITIVITIES Positive: A substantial growth in the revenue, while maintaining the profitability leading to a sustained improvement in the credit profile could lead to a positive rating action. Negative: Any deterioration in the credit metrics could lead to a negative rating action. COMPANY PROFILE BIPL was incorporated in 1995 in New Delhi. The company is engaged in the manufacturing of garments and their export. The company manufactures kidswear, shirts, t-shirts, jeans, trousers etc. The company is a 100% export house. BIPL has a production capacity of 30,000 garments per day and is managed by Surender Gupta and Sunita Gupta. BIPL's ratings: -- Long-Term Issuer Rating: affirmed at 'IND B+'/Stable -- INR100 million fund-based limits: affirmed at 'IND B+'/Stable /'IND A4' -- INR20 million term loan: 'IND B+'/Stable; rating withdrawn CONCORD HOSPITALITY: Ind-Ra Affirms 'IND D' LT Issuer Rating ------------------------------------------------------------ India Ratings and Research (Ind-Ra) has affirmed Concord Hospitality Private Limited's (CHPL) Long-Term Issuer Rating at 'IND D'. The agency has also affirmed CHPL's INR516.5m term loans (reduced from INR600m) at Long-Term 'IND D' rating. KEY RATING DRIVERS The affirmation reflects CHPL's continued delays in servicing of term loans during April, May and June 2016 due to its stressed liquidity. RATING SENSITIVITIES Positive: Timely debt servicing for at least three consecutive months will be positive for the ratings. COMPANY PROFILE Incorporated on 29 September 2005, CHPL has set-up a five-star hotel in Amritsar. The company has tied up with Radisson Hotels International Inc. (through its parent company Carlson Hotels Asia Pacific, Singapore). The five-star hotel is branded as Radisson Blu. In total , it has 161 rooms, two deluxe suites, five executive lounges and 18 junior suites with all the amenities. Additionally, the hotel has one multi-cuisine-all-day dining restaurant, two specialty restaurants, lounges, bar with dance floor, banquet hall, meeting rooms, business centre with boardrooms, executive/crew lounges, swimming pool and a health club / spa. CHPL has also entered into an agreement with reputed companies for interior designing, structural designing, landscaping and designing backspaces for kitchen, house-keeping and other utilities. The company is promoted by Sh. Harpinder Singh Gill and Sh. Abhay Singh. ECO SAND: CRISIL Assigns 'B' Rating to INR89.4MM Term Loan ---------------------------------------------------------- CRISIL has assigned its 'CRISIL B/Stable' rating to the long-term bank facilities of Eco Sand (ES). The rating reflects the start- up nature of operations, and an average financial risk profile because of a modest networth. These rating weaknesses are partially offset by the extensive entrepreneurial experience of the company's promoters. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Term Loan 89.4 CRISIL B/Stable Bill Discounting 15.6 CRISIL B/Stable Secured Overdraft Facility 20.0 CRISIL B/Stable Outlook: Stable CRISIL believes ES will continue to benefit over the medium term from the extensive entrepreneurial experience of its promoters. The outlook may be revised to 'Positive' if substantial ramp up in revenue and profitability result in better-than-expected cash accrual, while working capital requirement is efficiently managed. The outlook may be revised to 'Negative' in the event of lower-than-expected ramp-up in capacity utilisation resulting in depressed cash accrual, or sizeable working capital requirement leading to deterioration in debt protection metrics. ES was established in 2014 as a partnership firm, promoted by Mrs. Sunitha Raghuveer and six others. The firm manufactures sand and aggregates. It is has a crushing unit at Chikkaballapur, Karnataka. ELECON CONDUCTORS: CRISIL Reaffirms B+ Rating on INR55MM Loan ------------------------------------------------------------- CRISIL's ratings on the bank facilities of Elecon Conductors Limited (ECL) continue to reflect ECL's below-average financial risk profile because of a modest networth and weak debt protection metrics, along with a modest scale of operations in the intensely competitive power distribution equipment industry and working capital-intensive operations. These rating weaknesses are partially offset by the extensive industry experience of promoter. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 27.5 CRISIL A4 (Reaffirmed) Cash Credit 55.0 CRISIL B+/Stable (Reaffirmed) Letter of Credit 35.0 CRISIL A4 (Reaffirmed) Proposed Long Term Bank Loan Facility 2.5 CRISIL B+/Stable (Reaffirmed) Outlook: Stable CRISIL believes ECL will continue to benefit from the extensive industry experience of promoter. The outlook may be revised to 'Positive' if significant improvement in scale of operations and profitability leads to better-than-expected cash accrual, while improving its working capital cycle and financial risk profile. Conversely, the outlook may be revised to 'Negative' if revenue or margin declines, adversely impacting cash accrual, or if working capital cycle stretches, constraining liquidity, or if sizeable, debt-funded capital expenditure (capex) weakens financial risk profile. Update Scale of operations is small, with operating revenue of INR290 million in 2015-16 (refers to financial year, April 1 to March 31). Revenue is expected to remain at INR295-300 million, primarily supported by order book of INR140 million from Uttar Pradesh and Uttarakhand which is to be executed in 2016-17. Operating margin is estimated at 5.4 percent for 2015-16 (provisional), and is expected to remain at similar levels over the medium term, though it will remain susceptible to competition in a tender-driven business. Financial risk profile should be below average because of modest networth, estimated at INR70 million as on March 31, 2016, over the medium term owing low accretion to reserves. Gearing is estimated at 1.06 times as on March 31, 2016, and is expected to improve to below 1 time over the medium term. Interest coverage ratio is expected to remain weak at 1.5-1.7 times over this period. Operations are working capital intensive as reflected in high gross current assets at 250 days as on March 31, 2016. The same is mainly due to high debtors and inventory levels, estimated at 96 days and 130 days, respectively, on account of delay in receipts from government institutions and maintaining stock of variety of products such as high-value transformers and distribution equipment. This leads to high dependence on bank borrowings1, averagely utilised at 90 percent over the 12 months through March 2016. However, liquidity is supported by net cash accrual, absence of capex plan and debt obligation over the medium term. Established in 1995, ECL manufactures power transformer, all alloy aluminium conductors (AAAC), aluminium conductor steel- reinforced (ACSR) cables, DPC wiring and distribution transformer. The company operates two plants in Meerut (Uttar Pradesh) and Roorkee (Uttarakhand). The operations are managed by Mr. Atul Jain. ETA ENGINEERING: CRISIL Lowers Rating on INR4.41BB Loan to 'D' -------------------------------------------------------------- CRISIL has downgraded its ratings on the bank facilities of ETA Engineering Private Limited (ETAE) to 'CRISIL D/CRISIL D' from 'CRISIL BB-/Stable/CRISIL A4+'. The downgrade reflects devolvement of the company's non-fund-based bank facilities and overutilization of its fund-based facilities for more than 30 consecutive days. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 950 CRISIL D (Downgraded from 'CRISIL BB-/Stable') Letter of credit & 4412.5 CRISIL D (Downgraded from Bank Guarantee 'CRISIL A4+') Proposed Short Term 974.0 CRISIL D (Downgraded from Bank Loan Facility 'CRISIL A4+') ETAE's financial risk profile is weak because of stretched liquidity, modest cash accrual, and subdued debt protection metrics. However, the company benefits from its established position in the mechanical, electrical, and plumbing (MEP) solutions market. ETAE, incorporated in 1994, is a part of the Dubai-based ETA group. The company undertakes heating, ventilating, and air- conditioning (HVAC) projects; electromechanical projects and services (EMPS); and MEP works. In 2006, the ETA group entered the multi-modal logistics business by obtaining a licence from Indian Railways through ETAE. It sold the license in 2012-13 (refers to financial year, April 1 to March 31). For 2013-14, ETAE had net loss of INR494 million on net sales of INR9.4 billion, against profit after tax of INR367 million on net sales of INR6.6 billion for 2012-13. G AND G ISPAT: CRISIL Suspends B- Rating on INR70MM Cash Loan ------------------------------------------------------------- CRISIL has suspended its rating on the bank facility of G and G Ispat Private Limited (GGPL). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 70 CRISIL B-/Stable The suspension of rating is on account of non-cooperation by GGPL with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, GGPL is yet to provide adequate information to enable CRISIL to assess GGPL's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key factor in its rating process as outlined in its criteria 'Information Availability - a key risk factor in credit ratings' GGPL was established in April 2011 by members of the Chhattisgarh-based Agarwal family. The company manufactures mild steel channels and angles at its facility in Raipur. GOYA AGRO: CRISIL Assigns B+ Rating to INR45MM Cash Loan -------------------------------------------------------- CRISIL has assigned its 'CRISIL B+/Stable' rating to the long- term bank facilities of Goya Agro Industries Limited (GAIL). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 45 CRISIL B+/Stable Term Loan 20 CRISIL B+/Stable The rating reflects high working capital intensity, and a modest scale of operations in the highly fragmented edible oil industry. The rating also factors in a moderate capital structure driven by a small net worth, however overall gearing remains moderate. These weaknesses are mitigated by the extensive experience of the promoters of the company in the solvent extraction business. Outlook: Stable CRISIL believes GAIL will continue to benefit over the medium term from the extensive industry experience of its promoters. The outlook may be revised to 'Positive' in case of higher-than- expected growth in revenue and improvement in profitability, resulting in significantly better business and financial risk profiles. The outlook may be revised to 'Negative' in case of a large quantum of debt contracted to fund capital expenditure, leading to significant increase in gearing, or profitability is lower-than-expected, resulting in further deterioration in the financial risk profile. GAIL, based in Haryana, was established in 1989 by Mr. Ramesh Chandra Goyal. It is presently managed by his son, Mr. Madhur Goyal. The company extracts rice bran oil and its residual de- oiled cake for supply in the local market. Net profit was INR2.00 million on net sales of INR289.9 million in 2014-15 (refers to financial year, April 1 to March 31) against net profit of INR1.4 million on net sales of INR335.4 million in 2013-14. Net sales are estimated at INR255.1 million for 2015-16. GM SUGAR: CARE Assigns B+ Rating to INR40cr LT Bank Loan -------------------------------------------------------- CARE assigns 'CARE B+' ratings to the bank facilities of GM Sugar And Energy Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank Facilities 40 CARE B+ Assigned Rating Rationale The rating assigned to the bank facilities of GM Sugar and Energy Ltd. (GMSEL) is constrained by highly leveraged capital structure, stretched operating cycle, cyclical & seasonal nature of the sugar industry and associated agro-climatic risks. The rating also factors in volatility in profitability margins and weak liquidity position of the company. The rating, however, derives strength from experience of GMSEL's promoters, established track record of GMSEL in the sugar industry, partially integrated operations with captive source of power and stable operating income. The ability of the company to protect its profit margin amidst volatile sugar prices and highly regulated environment and deleverage its capital structure are the key rating sensitivities. Incorporated on November 2007 as a Private Ltd. company, GM Sugar and Energy Ltd. (GMSEL) was later reconstituted as a Public Ltd. company on February 11, 2010. GMSEL is engaged in the production of sugar & molasses from sugarcane. The company commenced commercial operations in February 2008 with cane crushing capacity of 1,250 TCD at its partially integrated sugar plant taken on lease from Karnataka Sahakari Sakkare Karkahane Niyamit (Karnataka Cooperative Sugar Factory) for a period of 32 years. Subsequently, the crushing capacity was enhanced to 2,500 TCD in October 2012. GMSEL also operates a multi-fuel co-generation unit of 18 MW. The plant is located at Sangur, Haveri District, Karnataka, which falls under the well irrigated belt (River Varada Belt) of the Central Karnataka. The company is promoted by Mr G. M. Lingaraju, Mr G. M. Prasannakumar and Mr G. S. Anithkumar. For FY16 Prov. (refers to the period April 1 to March 31), GMSEL reported a total operating income of INR150.33 crore and PAT of INR0.67 crore as against operating income of INR169.03 crore and net loss of INR6.89 crore in FY15. GOYAL KNITWEARS: CARE Lowers Rating on INR20.53cr ST Loan to 'D' ---------------------------------------------------------------- CARE revises the ratings assigned to the bank facilities of Goyal Knitwears Private Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank Facilities 12.00 CARE D Revised from CARE B+ Short term Bank Facilities 20.53 CARE D Revised from CARE A4 Rating Rationale The revision in the ratings assigned to the bank facilities of Goyal Knitwears Private Limited (GKPL) takes into account the ongoing overdrawals in the fund-based working capital limits and devolvement of the Letter of Credit limit availed due to stressed liquidity position of the company. Goyal Knitwears Private Limited (GKPL) was incorporated in year 1999 as a public limited company (closely held) by Mr Kamal Prakash Goyal and his brothers. The company was later reconstituted as a private limited company in 2005. GKPL is primarily engaged in the manufacturing and export of hosiery garments and knitwear for children, men and women at its manufacturing unit located in Ludhiana, Punjab, with an installed capacity of 33 lakhs pieces, per annum as on March 31, 2015. Furthermore, the company is also engaged in the trading of yarn and knitted cloth which constituted about 2.30% and 28.71% respectively, of the total operating income in FY15 (refers to the period April 1 to March 31). GKPL has a diversified product mix catering to all the segments viz. children (0-14 years of age) to adults. The product range comprises of complete range of children wear (upper and lower body), sweaters, T Shirts, lowers, gloves, caps, for men and women. The company manufactures and sells kidswear and women apparels domestically under its own brand 'Yellow Apple' and 'Riverside' to wholesalers and retailers who are serviced by a network of dealers and distributors and the company's own sales team. GKPL registered a total operating income of INR167.99 crore during FY15 (refers to the period April 1 to March 31)with PAT of INR0.79 crore as against a total operating income of INR133.95 crore with PAT of INR0.60 crore in FY14. INDO GERMAN: Ind-Ra Assigns 'IND BB-' LT Issuer Rating ------------------------------------------------------ India Ratings and Research (Ind-Ra) has assigned Indo German International Private Limited (IGIPL) a Long-Term Issuer Rating of 'IND BB-'. The Outlook is Stable. KEY RATING DRIVERS The ratings reflect IGIPL's moderate scale of operations along with very thin EBITDA margins. According to the company's provisional FY16 financials its revenue dipped to INR1,164m (FY15: INR1,222.71m) on account of a decline in the steel prices in FY15 and FY16 and its operating margins were 0.14% (0.12%).; IGIPL's operating margins were low due to its weak bargaining power in the intensely competitive steel industry and the trading nature of its business. The ratings factor in company's weak credit metrics with the net interest coverage (operating EBITDA/gross interest expense) of negative 0.20x in FY16 (FY15: negative 0.17x), offset by the company's interest income of INR8.59m (INR10.52m) against the interest expenses of INR0.19m (INR1.85m). IGIPL's net financial leverage (total adjusted net debt/operating EBITDA) was negative 24.24x in FY16 (FY15: negative 9.28x). The ratings, however, are supported by more than four decades of extensive experience of its promoters in the steel trading business, which has resulted in the company's long-standing relationships with its clientele and suppliers. The ratings are also supported by the proper measures taken by IGIPL to mitigate the forex risk. The ratings further reflect the company's comfortable liquidity profile with its average utilisation of the working capital limits being around 62.88% during the 12 months ended May 2016. RATING SENSITIVITIES Positive: An improvement in the operating profitability leading to a sustained improvement in the gross interest coverage could lead to a positive rating action. Negative: A decline in the operating profitability resulting in deterioration in the interest coverage could lead to a negative rating action. COMPANY PROFILE IGIPL, incorporated in 1995 by its promoter Mr. T.K. Somani, is engaged in the export and import of iron and steel, their alloys and other allied products. The company has its head office in New Delhi. IGIPL's ratings: -- Long-Term Issuer Rating: assigned 'IND BB-'/Stable -- INR150 million fund-based limits: assigned 'IND BB- '/Stable/'IND A4+' -- INR80 million non-fund-based limits: assigned 'IND A4+' NAMDHARI RICE: CARE Assigns 'B-' Rating to INR11.50cr LT Loan ------------------------------------------------------------- CARE assigns 'CARE B-'/'CARE A4' ratings to the bank facilities of Namdhari Rice And General Mills. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank Facilities 11.50 CARE B- Assigned Short term Bank Facilities 1.50 CARE A4 Assigned Rating Rationale The rating assigned to Namdhari Rice and General Mills (NRGM) is primarily constrained by its small and declining scale of operations, weak financial risk profile marked by highly leveraged capital structure, weak coverage indicators and working capital intensive nature of operations with stressed liquidity position. The ratings are, further constrained by its presence in the fragmented and competitive nature of industry, dependence on the vagaries of nature, high level of government regulation and partnership nature of its constitution. The ratings, however, draw comfort from experienced partners in processing of rice with long track record of operations, moderate profitability margins and favorable manufacturing location. Going forward, the ability of the firm to increase its scale of operations while maintaining its profitability margins, improve its capital structure and effective management of working capital shall be the key rating sensitivities. Sirsa-based (Haryana) Namdhari Rice & General Mills (NRGM) was established in 1986 as partnership concern by Mr Daljit Singh andMr Jaspal Singh sharing profits and losses equally. The firm is engaged in milling and processing and trading of both basmati and non-basmati rice with an installed capacity of 320 tonnes per day as on March 31, 2016. The firm procures the raw material (unprocessed rice/de-husked paddy) from grain markets located in Haryana through commission agents. The firm sells its products under the brand name "Namdhari", "Paras", "Sant" to wholesalers in Haryana, Delhi, Pune, Hyderabad, Bangalore, Chennai etc. Also the firm exports 15% of its sale to Europe. The by-product of rice viz husk, rice bran, and 'phak' are sold in the domestic market. During FY15 (refers to the period April 01 to March 31), NRGM has achieved a total operating income (TOI) of INR28.85 crore with PBILDT and PAT of INR3.17 crore and INR0.99 crore respectively, as against TOI of INR73.85 crore with operating loss of INR3.94 crore and net loss of INR6.73 crore. In FY16 NRGM has achieved a total operating income of INR30 crore (as per the unaudited results). JASMER PACK: Ind-Ra Affirms 'IND BB' LT Issuer Rating ----------------------------------------------------- India Ratings and Research (Ind-Ra) has affirmed Jasmer Pack Limited's (JPL) Long-Term Issuer Rating at 'IND BB'. The Outlook is Stable. A full list of rating actions is at the end of this commentary. KEY RATING DRIVERS The affirmation reflects JPL's continued small scale of operations and moderate credit metrics. Provisional (P) FY16 financials provided by the company indicate that revenue was INR540.7m (FY15: INR537.1m; FY14: INR397.22m), financial leverage (Ind-Ra adjusted debt/operating EBITDAR) was 4.98x (5.21x) and interest coverage (operating EBITDA/gross interest expense) was 1.58x (1.54x). The ratings continued to be constrained on account of JPL's tight liquidity position, as reflected in the 99.3% average utilisation of its fund-based limits for the 12 months ended May 2016. However, the ratings continue to benefit from the company's strong EBITDA margins of 10.55% in FY16 (P) (FY15: 8.71%; FY14: 10.15%) as well as its promoters' experience of more than 15 years in the paper and packaging industry. RATING SENSITIVITIES Negative: Inability to improve credit metrics and/or deterioration in its liquidity profile could lead to a negative rating action. Positive: Substantial improvement in revenue and credit metrics could lead to a positive rating action. COMPANY PROFILE JPL was established in 2000 as a proprietorship concern and incorporated in to a closely held public limited company in 2009. It manufactures corrugated boxes and rolls at Kala-Amb, Himachal Pradesh and caters mainly to companies in the fast-moving consumer goods, pharmaceutical and consumer products sectors. JPL's ratings: -- Long-term Issuer Rating: affirmed at 'IND BB'/Stable -- INR145 million fund-based working capital limits: affirmed at 'IND BB'/Stable/'IND A4+' -- INR2.3 million non-fund-based working capital limits: affirmed at 'IND BB'/Stable/'IND A4+' KESHAV ENTERPRISES: CRISIL Lowers Rating on INR110MM Loan to D -------------------------------------------------------------- CRISIL has downgraded its ratings on the bank facilities of Keshav Enterprises (KE) to 'CRISIL D/CRISIL D' from 'CRISIL B- /Stable/CRISIL A4'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Letter of Credit 110 CRISIL D (Downgraded from 'CRISIL A4') Letter of Credit 30 CRISIL D (Downgraded from 'CRISIL B-/Stable') The rating downgrade reflects devolvement of letter of credits for more than 30 days. The delays have been caused by weak liquidity due to slowdown in the shipbreaking industry resulting in stretched receivables. Keshav Enterprises (KE) has a weak financial risk profile marked by a small net worth, high total outside liabilities to tangible networth ratio, and weak debt protection metrics. Further, the firm is susceptible to cyclicality in the ship-breaking industry, and to volatility in steel scrap prices and foreign exchange rates. However, the firm benefits from the extensive experience of its proprietor and his family in the ship-breaking industry. KE was set up in 2006 as a proprietorship firm by Mr. Vikrant Prajapati. The firm is engaged in ship-breaking and trading of scrap metal. It started operations with trading of scrap metal procured from other ship-breakers; in 2012-13, it procured its first ship for breaking. KJ ISPAT: CRISIL Lowers Rating on INR80MM Cash Loan to B- --------------------------------------------------------- CRISIL has downgraded its rating on the long-term bank facilities of KJ Ispat Limited (KJIL) to 'CRISIL B-/Stable' from 'CRISIL B+/Stable'. The rating on the company's short-term facility has been reaffirmed at 'CRISIL A4'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 4 CRISIL A4 (Reaffirmed) Cash Credit 80 CRISIL B-/Stable (Downgraded from 'CRISIL B+/Stable') Proposed Long Term 35.8 CRISIL B-/Stable (Downgraded Bank Loan Facility from 'CRISIL B+/Stable') Term Loan 3.0 CRISIL B-/Stable (Downgraded from 'CRISIL B+/Stable') The rating downgrade reflects weaker-than expected revenue and accruals in 2015-16 owing to subdued demand, low sales realisations, and high industry competition. KJIL is estimated to report operating income of INR212.5 million and negligible cash accruals of just INR1.3 million which is substantially lower than CRISIL's expectation. Further, the company is estimated to report net loss of INR10.4 million in 2015-16. Continued losses has resulted in complete erosion of company's net worth which is estimated to be just INR0.1 million as on March 31, 2016. However, unsecured loan of INR205 million, as on March 31, 2016, extended by the promoters over the year provides some support to liquidity and financial risk profile. These loans have been treated as neither debt nor equity by CRISIL while arriving at the rating of KJIL. Large working capital requirement, negligible accruals, and high interest and finance charges continue to exert pressure on company's liquidity profile. Its bank lines has been highly utilised at around 95 percent, on an average, over the last 12 months ended through March 2016. The situation is not likely to improve in 2016-17 owing to continued subdued demand for sponge iron. KJIL has taken maintenance shut-down at its factory on April 07, 2016 and the same was continuing till May 31, 2016 (latest details available till May 31, 2016). The same is likely to further impact company's revenue, accruals, and financial profile during the current year. The ratings continue to factor in small scale of operations, marginal market share in the intensely competitive sponge iron business, and stretched liquidity owing to large working capital requirement, continued losses, and insignificant accruals. These rating weaknesses are partially offset by the extensive industry experience of the promoters. Outlook: Stable CRISIL believes KJIL will continue to benefit over the medium term from the extensive experience of the promoters in the sponge iron industry. The outlook may be revised to 'Positive' in case of substantial and sustainable improvement in company's scale of operation and cash accruals, improved working capital management, or substantial capital infusion by promoters leading to improvement in liquidity and financial risk profile. Conversely, further weakening in liquidity and financial profile on account of substantial cash losses or, any large capital expenditure, or increase in working capital requirement, may result in the outlook being revised to 'Negative'. Incorporated in 2003, KJIL manufactures sponge iron, and began commercial operations in March 2006. The company is equally owned by the Kandoi and Jalan families. Promoter-director, Mr. PL Kandoi, has experience of about 28 years in the steel industry. KONDUSKAR TRAVELS: CRISIL Lowers Rating on INR115MM Loan to B- -------------------------------------------------------------- CRISIL has downgraded its rating on the long-term bank facilities of Konduskar Travels Private Limited (KTPL) to 'CRISIL B-/Stable' from 'CRISIL B/Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Drop Line Overdraft Facility 115 CRISIL B-/Stable (Downgraded from 'CRISIL B/Stable') Proposed Term Loan 65 CRISIL B-/Stable (Downgraded from 'CRISIL B/Stable') The rating downgrade reflects CRISIL's belief that KTPL's liquidity will remain under pressure over the medium term due to stagnant revenue, declining profitability and large maturing debt. Revenue, on a provisional basis, has marginally declined to INR467.5 million in 2015-16 (refers to financial year, April 1 to March 31), from INR 479.7 million in the previous year while operating margin declined to 20.8 percent from 24.7 percent in the same period. Operating margin is expected to remain under pressure over the medium term on account of intensifying competition among the domestic passenger transport operators. Furthermore, the company is expected to incur sizeable debt- funded capital expenditure for acquiring new buses which is expected to result in large maturing debt. Hence, liquidity will remain under pressure over the medium term on account of barely sufficient cash accrual against maturing debt. The rating reflects weak financial risk profile because of modest networth and leveraged capital structure. The rating also factors in exposure to geographical concentration in revenue and intense competition in passenger transport industry. These rating weaknesses are mitigated by an established regional presence developed under the guidance of an experienced management and moderate operating efficiency. Outlook: Stable CRISIL believes KTPL will continue to benefit from an established regional position in passenger transport business and experienced management. The outlook may be revised to 'Positive' if sizable cash accrual or large capital infusion by promoters leads to improvement in capital structure and liquidity. Conversely, the outlook may be revised to 'Negative' if lower-than-expected revenue and profitability or higher-than-anticipated capital expenditure or further funding support to associates weaken the financial risk profile especially liquidity. Incorporated in 1994, KTPL is based in Kolhapur (Maharashtra). The company has been promoted by Konduskar and family and provides passenger transport services mainly in Maharashtra, Goa, Karnataka and Gujarat. MAHESHWAR MULTITRADE: CARE Reaffirms B+ Rating on INR8.91cr Loan ---------------------------------------------------------------- CARE reaffirms rating to the bank facilities of Maheshwar Multitrade Private Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank Facilities 8.91 CARE B+ Suspension Revoked and Reaffirmed Rating Rationale The rating assigned to the bank facilities of Maheshwar Multitrade Private Limited (MMPL) is constrained on account of modest scale of operations along with seasonal nature of availability of trading material resulting in working capital intensive nature of business along with exposure to material price fluctuation risk, presence in the highly fragmented industry, thin profitability margins, moderate capital structure and weak debt coverage indicators. The rating draws support from the experience of the promoters for around three decades, support from group concern along with long- term association with diversified clientele. Established in 2010, MMPL is engaged in the trading of edible oils. MMPL belongs to the Maheshwar group of Kolhapur. MMPL is promoted by the Banchode family who has also setup another group entity Maheshwar Oil Mills (MOM) (a partnership firm) which was incorporated in 1992, and is engaged in the manufacturing and trading of edible oils. The product profile of MMPL comprises groundnut oil, ground nut seed, makkachuni, cattlefeed, palm oil and cotton seed oil. MMPL procures groundnut oil and groundnut seeds from MOM, while other raw material is procured from suppliers based in Maharashtra. MMPL has a diversified customer base and the top three customers were Bodke Oil Mill, Kamani Oil Company and S.K. Oil Indusries which contributed around 20% of the total sales in FY16 (refers to the period April 1 to March 31). OASIS COMMERCIAL: Ind-Ra Assigns 'IND BB+' LT Issuer Rating ----------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned Oasis Commercial Private Limited (OCPL) a Long-Term Issuer Rating of 'IND BB+'. The Outlook is Stable. The ratings are based on a consolidated view of OCPL and its 55% subsidiary Oasis Overseas Exports Private Limited (OOEPL; 'IND BB+'/Stable) due to the strong operational and legal linkages between them. OCPL has provided a corporate guarantee for OOEPL's debt. Both the parent and the subsidiary have their extra neutral alcohol (ENA) manufacturing facilities at the same location and share the same suppliers, customers and Indian made foreign liquor (IMFL) brands of the Oasis group promoted by the Delhi- based Malhotra family. OCPL also provides power and steam (for operations) to its subsidiary OOEPL. KEY RATING DRIVERS The ratings reflect the moderately leveraged consolidated credit profile of OCPL. According to the estimated consolidated FY16 financials provided by the company, net adjusted leverage (total adjusted net debt/operating EBITDAR) was high at 4.2x (FY15: 4.7x) due to the outstanding project term loans of INR880.2m (INR1,079m), unsecured loans from the promoters of INR955m (INR898m) and a long net cash cycle of 75 days (75 days). However, gross interest coverage has been relatively comfortable (FY16 estimates: 2.9x, FY15: 2.5x) due to low interest expenses, because the unsecured loans from the promoters are interest free. The ratings factor in the susceptibility of the company's margins to volatility in raw material prices whereas the end product prices are fixed and regulated by the state government. However, EBITDA margins were maintained at 14.0% in FY16 (FY15: 14.1%) as the average input costs were contained at INR14,560/MT (INR14,676/MT). The other operational challenges faced by the company include the renewal of license for IMFL manufacturing and sales and regional concentration of operations and customers as it has presence in only a single state (Haryana). The ratings are constrained by the highly regulated nature of the liquor business with varying regulatory frameworks across different states in India regarding consumption, sale, inter- state transfers, and taxes. More than 95% of OCPL's domestic ENA sales are to liquor companies. ENA sales to liquor companies are highly susceptible to any complete or partial ban on liquor in the state or a revision of excise duties. The ratings, however, are supported by the Oasis group's operating experience of around five decades in the liquor business through other group companies which offsets OCPL's limited record of operations of two years. Experienced promoters and management, along with an established supplier and customer base, has enabled both OCPL and OOEPL to stabilise its new manufacturing facilities and sell effectively in their first full year of operations in FY15. Both the facilities have been running at a capacity utilisation rate of about 80% and have been profitable from the first full year of operations. Liquidity has been moderate with average fund-based working capital utilisation at 91% of the drawing power for the 12 months ended May 2016. RATING SENSITIVITIES Positive: An improvement in the EBITDA margins leading to net debt/EBITDA being sustained below 3x will result in a positive rating action. Negative: Any unplanned capex and/or deterioration in the EBITDA margins leading to net debt/EBITDA being sustained above 4.5x will result in a negative rating action. COMPANY PROFILE OCPL was incorporated in 2006 to manufacture and sell liquor and allied products. In 2013, the company acquired an ENA manufacturing facility of capacity 120,000 litres/day along with a 9MW biomass power co-generation plant from A.B. Grain Spirits Pvt. Limited. The unit is located in Ambala, Haryana. According to the estimated standalone FY16 financials provided by the company, OCPL reported revenue of INR1,968m (FY15: INR1,872m), EBITDA of INR329m (INR303m) and net income of INR88m (INR59m). At consolidated level, OCPL had revenue of INR3,911m (FY15: INR3,649m), EBITDA of INR549m (INR515m) and net income of INR178m (INR139m). OCPL belongs to the Oasis Group that has been manufacturing and selling liquor over the past five decades in Punjab. The Oasis group comprises OCPL, OOEPL, Oasis Distilleries Limited, Malbros International (P) Limited and Vijeta Beverages (P) Limited. The group has five distilleries and three bottling units with a combined spirit production capacity of around 485,000 litres/day. OCPL's ratings: -- Long-Term Issuer Rating: assigned 'IND BB+'/Stable -- INR591.3 million term loans: assigned 'IND BB+'/Stable -- INR450 million fund-based working capital limits: assigned 'IND BB+'/Stable/'IND A4+' -- INR50 million non-fund-based working capital limits: assigned 'IND BB+'/Stable/'IND A4+' OASIS OVERSEAS: Ind-Ra Assigns 'IND BB+' LT Issuer Rating --------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned Oasis Overseas Exports Private Limited (OOEPL) a Long-Term Issuer Rating of 'IND BB+'. The Outlook is Stable. The ratings are based on a consolidated view of OOEPL and its parent Oasis Commercial Private Limited (OCPL; 'IND BB+'/Stable) due to the strong operational and legal linkages between them. OCPL has provided a corporate guarantee for OOEPL's debt. Both the parent and the subsidiary have their extra neutral alcohol (ENA) manufacturing facilities at the same location and share the same suppliers, customers and Indian made foreign liquor (IMFL) brands of the Oasis group promoted by the Delhi-based Malhotra family. OCPL also provides power and steam (for operations) to its subsidiary OOEPL. KEY RATING DRIVERS The ratings reflect the moderately leveraged consolidated credit profile. According to the estimated consolidated FY16 financials provided by the company, net adjusted leverage (total adjusted net debt/operating EBITDAR) was high at 4.2x (FY15: 4.7x) due to the outstanding project term loans of INR880.2m (INR1,079m), unsecured loans from the promoters of INR955m (INR898m) and a long net cash cycle of 75 days (75 days). However, gross interest coverage has been relatively comfortable (FY16 estimates: 2.9x, FY15: 2.5x) due to low interest expenses, because the unsecured loans from the promoters are interest free. The ratings factor in the susceptibility of the company's margins to volatility in raw material prices whereas the end product prices are fixed and regulated by the state government. However, EBITDA margins were maintained at 14.0% in FY16 (FY15: 14.1%) as the average input costs were contained at INR14,560/MT (INR14,676/MT). The other operational challenges faced by the company include the renewal of license for IMFL manufacturing and sales and regional concentration of operations and customers as it has presence in only a single state (Haryana). The ratings are constrained by the highly regulated nature of the liquor business with varying regulatory frameworks across different states in India regarding consumption, sale, inter- state transfers and taxes. More than 95% of OOEPL's domestic ENA sales are to liquor companies. ENA sales to liquor companies are highly susceptible to any complete or partial ban on liquor in the state or a revision of excise duties. The ratings, however, are supported by the Oasis group's operating experience of around five decades in the liquor business though other group companies which offsets OOEPL's limited record of operations of two years. Experienced promoters and management, along with an established supplier and customer base, has enabled both OCPL and OOEPL to stabilise its new manufacturing facilities and sell effectively in their first full year of operations in FY15. Both the facilities have been running at capacity utilisation of about 80% and have been profitable from the first full year of operations. Liquidity has been moderate with average fund-based working capital utilisation at 83% of the drawing power for the 12 months ended May 2016. RATING SENSITIVITIES Positive: An improvement in the EBITDA margins leading to net debt/EBITDA being sustained below 3x will result in a positive rating action. Negative: Any unplanned capex and/or deterioration in the EBITDA margins leading to net debt/EBITDA being sustained above 4.5x will result in a negative rating action. COMPANY PROFILE OOEPL was incorporated in 2007 to manufacture and sell liquor and allied products. In 2013, the company acquired Adie Broswon Distillers & Bottlers Pvt. Ltd. from Chadha Group of Companies, which was constructing a 120,000 litres/day ENA manufacturing facility in Ambala, Haryana at that time. After acquisition, Oasis group finished the balance commissioning of the plant and started commercial operations in May 2014. According to the estimated standalone FY16 financials provided by the company, OOEPL reported revenue of INR1,943m (FY15: INR1,887m), EBITDA of INR220m (INR212m) and net income of INR90m (INR80m). At a consolidated level, revenue was INR3,911m (FY15: INR3,649m), EBITDA was INR549m (INR515m) and net income was INR178m (INR139m). OOEPL belongs to the Oasis Group that has been manufacturing and selling liquor over the past five decades in Punjab. The Oasis group comprises OCPL, OOEPL, Oasis Distilleries Limited, Malbros International (P) Limited and Vijeta Beverages (P) Limited. The group has five distilleries and three bottling units with a combined spirit production capacity of around 485,000 litres/day. OOEPL's ratings: -- Long-Term Issuer Rating: assigned 'IND BB+'/Stable -- INR288.9 million term loans: assigned 'IND BB+'/Stable -- INR202.6 million fund-based working capital limits: assigned 'IND BB+'/Stable/'IND A4+' -- INR23.6m non-fund-based working capital limits: assigned 'IND BB+'/Stable/'IND A4+' P.D. AGRO: CRISIL Reaffirms 'B' Rating on INR80.0MM Cash Loan ------------------------------------------------------------- CRISIL's rating on the long-term bank facilities of P.D. Agro Processors (PDAP) continues to reflect the firm's subdued financial risk profile because of modest networth and high gearing, and its small scale of operations. These weaknesses are partially offset by extensive experience of its partners in the rice industry. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 80.0 CRISIL B/Stable (Reaffirmed) Term Loan 45.5 CRISIL B/Stable (Reaffirmed) Outlook: Stable CRISIL believes PDAP will continue to benefit over the medium term from its partners' extensive industry experience. The outlook may be revised to 'Positive' if there are significantly high sales or profitability, or substantial improvement in financial risk profile driven by higher-than-expected cash accrual or capital infusion, and efficient working capital management. The outlook may be revised to 'Negative' in case of lower-than-expected cash accrual, or sizeable working capital requirement or debt funded capital expenditure, leading to increased pressure on liquidity. PDAP was established in July 2013 as a partnership firm by Mr. Bhupender Agarwal and Ms. Kamla Agarwal. The firm processes non- basmati rice (Sona Masuri, Samba Masuri, HMT) at its unit in Rae Bareilly, Uttar Pradesh, which has installed milling and sorting capacity of 15 tonne per hour. PDAP commenced operations in January 2014. PRAKASH STEELAGE: CARE Lowers Rating on INR150cr LT Loan to 'D' --------------------------------------------------------------- CARE revises the ratings to the bank facilities of Prakash Steelage Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 150 CARE D Revised from (Fund-based) CARE BBB+ Short-term Bank Facilities 70 CARE D Revised from (Non-fund based) CARE A3+ Rating Rationale The revision in the ratings assigned to the bank facilities of Prakash Steelage Limited (PSL) takes into account unexpected deterioration in credit profile of the company during Q4FY16 leading to delays in meeting debt obligations. In July 2015, the company hived-off its seamless steel division for a consideration of INR209.16 crore which was primarily utilized to reduce bank loans. Furthermore, the company reported net profit of INR11.87 crore on the operating income of Rs.366.84 crore during nine months ended December 31, 2015. However, during Q4FY16, the company reported operating loss of INR47.45 crore on account of high raw material prices than compared with sales price, resulting into total operating loss of INR41.38 crore for FY16 (refers to the period April 1 to March 31). Furthermore, due to unexpected provisioning of INR24.65 crore towards doubtful debtors, the company registered net loss of INR87.88 crore in FY16. This resulted into stretched liquidity position and the company was unable to meet its financial obligations. PSL, incorporated on May 9, 1991, was converted into a public limited company on August 12, 1997, and was listed on the stock exchange in August 2010. PSL started its business with trading in the stainless steel (SS) sheets, coils, plates and scrap. Presently, the company is engaged in the manufacturing of welded stainless steel pipes and tubes and trades into stainless steel sheets and coils. The company's products are used in heat exchanger, evaporators, heating elements, fluid piping, pumps, valves, condensers and in other instrumentation equipment. Presently, installed capacity of PSL stands at 10,000 metric tonnes (MT). During FY16 (audited), PSL reported net loss of INR87.88 crore on a total operating income of INR560.84 crore. RAMALINGESHWARA COTTON: CARE Puts B+ Rating on INR5.80cr LT Loan ---------------------------------------------------------------- CARE assigns 'CARE B+' rating to the bank facilities of Ramalingeshwara Cotton Industries. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 5.80 CARE B+ Assigned Rating Rationale The rating assigned to the bank facilities of Ramalingeshwara Cotton Industries (RCI) is constrained by limited track record and relatively small scale of operations, the highly fragmented cotton industry coupled with seasonal nature of business resulting in dependence on working capital borrowings, profitability margins susceptible to fluctuation in raw material prices and constitution of the entity as a partnership firm. However, the rating is underpinned by the experience of the partner for a decade in the cotton industry, locational advantage, growth in total operating income albeit decline in profit margin, moderate capital structure and debt coverage indicators, comfortable operating cycle, and stable outlook of the textile industry. The ability of the firm to increase its scale of operations, profitability margins with the ability to manage the raw material price fluctuation risk are the key rating sensitivities. Ramalingeshwara Cotton Industries (RCI) was established in the year 2013 and promoted by Mr T Jagadeeswar and their friends and relatives. The firm is engaged in manufacturing of cotton bales and cotton seeds. The firm procures the raw cotton from the farmers located in and around Warangal. The firm sells its products i.e. cotton bales and cotton seeds to various textile manufacturers located in Maharashtra, Pune, Tamil Nadu and Pondicherry. During FY16 (Provisional) (refers to the period April 1 to March 31), RCI reported a PAT of INR0.14 crore on a total operating income of INR34.57 crore as against a PAT of INR0.12 crore on a total operating income of INR25.35 crore in FY15. PROMINENT METAL: CARE Assigns B+ Rating to INR15cr LT Bank Loan --------------------------------------------------------------- CARE assigns 'CARE B+' rating to the bank facilities of Prominent Metal Private Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 15 CARE B+ Assigned Rating Rationale The rating assigned to the bank facilities of Prominent Metal Private Limited (PMP) is primarily constrained by the nascent stage of operations, modest scale of operations, highly leveraged capital structure and weak coverage indicators. The rating is further constrained by working capital intensive nature of operations and PMP's presence in the highly competitive metal trading segment. The rating, however, draws comfort from experienced promoters, moderate profitability margins and established distribution network and customer base. Going forward, ability of the company to increase its scale of operations while maintaining its profitability margins and registering improvement in its capital structure shall be the key rating sensitivity. Prominent Metal Private Limited (PMP) was incorporated in February, 2014 by Mr Prem Chand Gupta and his wife Ms Madhu Lata. PMP is engaged in trading of aluminium ingots, aluminium wire rods & all types of aluminium products & scraps which find application in various industries including cables, aluminium extrusion, automobile industry, utensils industry and fabrication industry. OMP procures the traded goods from Bharat Aluminium Company Ltd, Sesa Sterlite Limited, Hindustan Aluminium Company, National Aluminium Company Limited etc. It markets the products in different states across India with major presence in northern India, viz Delhi, Haryana, Punjab, Ghaziabad and Jammu & Kashmir. The company sell its products directly to manufacturers & dealers and its consignment agents, with whom the company has an agreement to sell its goods on a commission basis. The company has associate concerns i.e. Worldwide Metals Private Limited (CARE BB-/ CARE A4), Olympus Metal Private Limited (CARE BB-/ CARE A4), Oyster Steel & Iron Private Limited and Duke Sponge and Iron Private Limited, all engaged in trading of aluminium and copper components. In FY15 ( refers to the period April 1 to March 31), PMP has achieved a TOI of INR49.89 crore with PBILDT and PAT of INR2.68 crore and INR0.21 crore respectively. Furthermore, the company has achieved a total operating income of INR64 crore for FY16 (unaudited). RAMCO INTERNATIONAL: Ind-Ra Assigns 'IND BB-' LT Issuer Rating -------------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned Ramco International (RI) a Long-Term Issuer Rating of 'IND BB-'. The Outlook is Stable. A full list of rating actions is at the end of this commentary. KEY RATING DRIVERS The ratings reflect RI's small to moderate scale of operations and a decline in its EBITDA margins. According to the company's FY16 provisional financials, its revenue was INR783.02m (FY15:INR661.33m), and EBITDA margins were 3.05% (5.44%). The deterioration in margins was due to the intense competition in the garden hand tools market. The ratings further reflect RI's moderate to weak credit metrics in FY16 with the interest coverage (operating EBITDA/gross interest expense) of 2.77x (FY15:1.77x) and net financial leverage (total adjusted net debt/operating EBITDAR) of 4.54x (4.62x). The ratings factor in RI's partnership-based organisational structure. The ratings, however, are supported by RI's long operational record and its promoter's experience of more than two decades in the garden hand tools industry. The ratings are further supported by the company's comfortable liquidity as indicated by the average utilisation of its fund based working capital limits being 52% during the 12 months ended June 2016. RATING SENSITIVITIES Negative: Any deterioration in the operating EBITDA margin leading to weaker credit metrics could be negative for the ratings. Positive: An improvement in the topline along with an improvement in the credit metrics could be positive for the ratings. COMPANY PROFILE RI, incorporated in 1995, is involved in the manufacturing of garden hand tools and selling its products in the international markets such as the UK and Australia. It has its manufacturing unit in Jalandhar, Punjab. RI's ratings: -- Long-Term Issuer Rating; assigned 'IND BB-'/Stable -- INR160 million fund-based working capital limit: assigned 'IND BB- '/Stable/ 'IND A4+' -- INR7.5 million non-fund-based limit: assigned 'IND A4+' SARTHAK ENTERPRISE: CRISIL Reaffirms B+ Rating on INR27.5MM Loan ---------------------------------------------------------------- CRISIL ratings to the bank facilities of Sarthak Enterprise (SE) continues to reflect SE's modest scale of operations with high customer concentration and low profitability due to limited value addition and working capital intensive operations. These weaknesses are partially offset by the extensive industry experience of the promoters and established relationship with customers and suppliers. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 22.5 CRISIL A4 (Reaffirmed) Letter of Credit 50.0 CRISIL A4 (Reaffirmed) Proposed Long Term Bank Loan Facility 27.5 CRISIL B+/Stable (Reaffirmed) Update SE's sales remained moderate at around INR170 million in 2015-16 (refers to financial year, April 1 to March 31). The company's sales are expected to remain modest over the medium term, in keeping with past trends and a well-established relationship with suppliers and contractors for raw material supply while operating margin are estimated to be around 8 percent in 2015-16 and expected to remain moderate over the medium term. Operations remain working capital intensive marked by Gross current assets of 133 days led by debtor of 75 days and inventory levels maintained at around 32 days in 2015-16. The financial risk profile is marked by gearing at 0.03 time due to moderate networth levels of about INR40 million as on March 31, 2016 is expected to remain at similar levels over the medium term, with moderate accrual, growing networth and no capital expenditure over the medium term. Outlook: Stable CRISIL believes SE will benefit from the extensive industry experience of its promoters over the medium term. The outlook may be revised to 'Positive' if higher than expected sales revenue or improvement in profitability with some more value addition to the product results in higher cash accrual.The outlook may be revised to 'Negative' if considerable delay in order execution, or any stretch in working capital cycle, weakens the financial risk profile, particularly liquidity. SE is Ahmedabad, Gujarat based entity; set up in 2011 as a partnership firm. The firm deals in provision of fault detection instruments and its installation in electric power systems. SATYAM COTTEX: CARE Reaffirms B+ Rating on INR5.81cr LT Loan ------------------------------------------------------------ CARE reaffirms the rating assigned to the bank facilities of Satyam Cottex. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank Facilities 5.81 CARE B+ Suspension revoked and Rating Reaffirmed Rating Rationale The rating assigned to the bank facilities of Satyam Cottex (Satyam) continues to remain constrained on account of thin profit margins, moderately leveraged capital structure and weak debt coverage indicators. The rating is also constrained by moderate liquidity amidst working capital intensive nature of operations, susceptibility of profit margins to raw material price fluctuations and presence into the highly fragmented cotton industry. The rating also takes into consideration healthy growth in total operating income (TOI) during FY15 (refers to the period April 1 to March 31). The rating, however, continues to derive comfort from the experience of the promoters and proximity to raw material growing region of Gujarat. Satyam's ability to improve its scale of operations in volatile industry scenario coupled with an improvement in overall financial risk profile marked by improving profit margins, capital structure and debt coverage indicators remains the key rating sensitivities. Satyam was setup as a partnership firm in April 2013 by Mr Mehul R. Sanghani, Mr Ashok K. Bhagiya, Mr Mansukhbhai V. Sanghani and Mr Bhaveshbhal G. Chandat, along with five other non-executive partners, based out of Rajkot, Gujarat. The firm is engaged in the business of cotton ginning and pressing to produce cotton bales and cotton seeds. The products are mainly used in the manufacturing of cotton yarn in the textile industry and oil extraction companies. The manufacturing unit of the firm is located at Tankara, Gujarat. The unit commenced commercial production from November 2013 with an installed capacity to produce 5,850 metric tonnes per annum (MTPA) for cotton bales and 11,925 MTPA for cotton seeds. During FY15, Satyam reported a total operating income (TOI) of INR40.30 crore with a PAT of INR0.04 crore as against TOI of INR17.42 crore with a PAT of INR0.02 crore in FY14. During FY16 (provisional), Satyam achieved a TOI of INR31.83 crore. SEVEN SEAS: CRISIL Reaffirms B+ Rating on INR2.18BB Term Loan ------------------------------------------------------------- CRISIL's rating on long-term bank facilities of Seven Seas Hospitality Private Limited (SSHPL) continues to reflect exposure to demand-related risks, associated with the new five-star hotel, and the weak financial risk profile, as debt contracted to fund the project led to a highly leveraged capital structure. These weaknesses are partially offset by extensive industry experience of promoters and the well-established brand image in the banqueting and catering segment. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 40 CRISIL B+/Stable (Reaffirmed) Term Loan 2180 CRISIL B+/Stable (Reaffirmed) Outlook: Stable CRISIL believes banquet halls that are currently operational will continue to generate healthy revenue and maintain healthy profitability. CRISIL also believes that the company will remain exposed to demand-related risks arising from the new project at Rohini. The outlook may be revised to 'Positive' if healthy accrual strengthens the capital structure. The outlook may be revised to 'Negative' if delays in project completion or larger- than-expected debt, significantly weakens the financial risk profile. SSHPL was incorporated in 2006 and is promoted by the Dang group. The hotel offers banqueting and catering services at three banquet halls at Lawrence Road, Delhi, with a combined seating capacity for 1,500 people. The company has set up a five-star hotel-cum-restaurant-cum-banquet-hall at Rohini, Delhi, at an estimated cost of INR3.36 billion which commenced operations in March 2016. SHAKUNTALA WARE: CRISIL Suspends 'B' Rating on INR160MM Loan ------------------------------------------------------------ CRISIL has suspended its rating on the bank facilities of Shakuntala Ware House (Shakuntala). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 160 CRISIL B/Stable Overdraft Facility 30 CRISIL B/Stable Proposed Long Term Bank Loan Facility 10 CRISIL B/Stable The suspension of rating is on account of non-cooperation by Shakuntala with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, Shakuntala is yet to provide adequate information to enable CRISIL to assess Shakuntala's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key factor in its rating process as outlined in its criteria 'Information Availability - a key risk factor in credit ratings' Incorporated in 2006, Shakuntala is a partnership firm promoted by Mr. Kamlesh Kumar Argal and his family members. The firm is engaged in trading of rice and provides warehousing services for agro-commodities. Its operations are based in Obedullaganj, Madhya Pradesh and it owns a warehouse, with a storage capacity of 10,000 tonnes per annum. SHIVALIK I.B.: CRISIL Assigns B+ Rating to INR150MM e-DFS --------------------------------------------------------- CRISIL has assigned its 'CRISIL B+/Stable' rating to the long- term bank facility of Shivalik I.B. Autogem Private Limited (SAPL). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Electronic Dealer Financing Scheme (e-DFS) 150 CRISIL B+/Stable The rating reflects exposure to intense competition in the automobile dealership market, geographic concentration in revenue profile, and a weak financial risk profile because of an eroded networth and subdued debt protection metrics. These rating weaknesses are partially offset by a healthy scale of operations and established relationship with the principal, Hyundai Motors India Ltd (HMIL). Outlook: Stable CRISIL believes SAPL will continue to benefit over the medium term from its healthy relationship with HMIL. The outlook may be revised to 'Positive' if there is any significant infusion of equity, and/or higher-than-expected cash accrual due to increase in scale of operations and improved operating margin, leading to a better capital structure. Conversely, the outlook may be revised to 'Negative' if the financial risk profile, particularly liquidity, weakens, most likely because of significant decline in revenue and profitability, increased dependence on bank limit, or higher-than-expected capital expenditure. Incorporated in 2013 and promoted by Mr. Vishnu Patel and his family, SAPL is an authorised dealer of passenger vehicles of HMIL. The company operates a showroom in Ahmedabad with 3S (sales, service, and spares) facilities. SHIVPRASAD FOODS: Ind-Ra Assigns 'IND BB-' LT Issuer Rating ----------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned Shivprasad Foods and Milk Products (SFMP) a Long-Term Issuer Rating of 'IND BB-'. The Outlook is Stable. KEY RATING DRIVERS The ratings reflect SFMP's moderate credit profile and liquidity. According to FY16 provisional financials the firm's revenue was INR753m (FY15:INR880.6m). The decline in the revenue was due to a decrease in the milk prices since January 2015, leading to a lower realisation. The firm's net leverage (Ind-Ra adjusted net debt/operating EBITDAR) was 7.1x at FYE16 (FYE15: 4.2x) and EBITDA interest cover (operating EBITDA/gross interest expense) was 2.0x (2.6x). The firm's fund-based working capital facilities were fully utilised during the 12 months ending May 2016. The deterioration in the credit metrics was primarily due to the debt-led capex for the milk processing capacity expansion at its unit to 0.6 megalitres of milk/day from 0.4 megalitres of milk/day. The expansion which started in FY16 is likely to have been completed by June 2016. Ind-Ra believes the credit metrics will improve in FY17 due to the utilisation of increased capacity which will drive the revenue growth coupled with scheduled repayment of term loan. The ratings also factor in a decline in the firm's EBITDA margin to 3.4% in FY16 from 3.6% in FY15 (FY14: 4.3%) due to the fluctuation in the milk prices. More than 50% of the total sales to single corporate customer leading to customer concentration also moderate the rating. The ratings, however, are supported by over two decades of operating experience of the firm's proprietor in the food industry and its seven year-long operational history. The ratings are further supported by SFMP's strong relationships with its customers and suppliers. RATING SENSITIVITIES Negative: A decline in the EBITDA margin leading to deterioration in the credit metrics and/or liquidity could lead to a negative rating action. Positive: A substantial revenue growth along with an improvement in the profitability leading to improved credit metrics could lead to a positive rating action. COMPANY PROFILE Established in 2009 in Malshiras taluka of Solapur district, SFMP is into the processing of milk and manufacturing of other milk products such as ghee, butter, curd etc. Currently it has an installed capacity to process 0.4 megalitres of milk/day. Additionally, the company also has an installed capacity at its unit to process 0.15 megalitres of milk/day for manufacturing skimmed milk powder. SFMP's ratings: -- Long-Term Issuer Rating: assigned 'IND BB-'/Stable -- INR70 million fund-based working capital limits: assigned 'IND BB-'/Stable/'IND A4+' -- INR48.4 million term loan limits: assigned 'IND BB-'/Stable -- Proposed INR80 million fund-based working capital limits: assigned 'Provisional IND BB-'/Stable/'Provisional IND A4+' SHRI GARGI: CARE Revises Rating on INR20cr LT Loan to 'B' --------------------------------------------------------- CARE revises rating assigned to the bank facilities of Shri Gargi Buildcon Private Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank Facilities 20.00 CARE B Revised from CARE B+ Rating Rationale The revision in the rating of Shri Gargi Buildcon Private Limited (SGBPL) takes into account delay in project implementation by more than one year which led to reschedulement of term loans and decline in booking of residential flats. The rating continues to remain constrained on account of project implementation risk and moderate customer advances in view of subdued outlook for the cyclical real estate sector. The rating, however, continues to be favourable taking into account the experience of the promoters in executing construction contracts mainly water supply projects. The ability of the company to timely complete its ongoing real estate project without any cost overrun along with adequate bookings and timely receipt of booking advances as envisaged would be the key rating sensitivities. SGBPL was incorporated in October 2008 by the Sharma family of Jaipur. However, the present promoter group acquired the company in 2010. SGBPL is engaged in the development of housing projects in Jaipur, Rajasthan. SGBPL is a part of the Lahoty group which is mainly engaged in the construction and real estate business. The group concerns include Lahoty Buildcon Limited (rated 'CARE BB+/CARE A4+'; engaged in construction business mainly executing government water supply projects), Gendi Real Estate Private Limited (engaged in real estate business) and Saffron Vyapaar Private Limited (engaged in real estate business). SGBPL is mainly engaged in the real estate development activities and is currently working on one residential project namely 'Square Arcade' in Jaipur with total saleable area of 316,009.83 Square Feet (Sq Ft). The project consists of total 216 flats which include 81 2BHK flats and 135 3BHK flats. SGBPL started construction of this project from October 2012 with envisaged cost of INR51.27 crore funded through debt-equity ratio of 1.60 times. The project was originally envisaged to be completed by September 2015. However, the project has been delayed by more than one year and will be completed by December 2016. SHRINET AND SHANDILYA: CARE Assigns B+ Rating to INR3.0cr LT Loan ----------------------------------------------------------------- CARE assigns 'CARE B+' and 'CARE A4' ratings to the bank facilities of Shrinet And Shandilya Construction Pvt Ltd. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank Facilities 3.00 CARE B+ Assigned Short term Bank Facilities 38.00 CARE A4 Assigned Rating Rationale The ratings assigned to the bank facilities of Shrinet and Shandilya Construction Private Limited (SSPL) are primarily constrained by small scale of operations, declining operating margin, moderately leveraged capital structure, weak coverage indicators, working capital intensive nature of operations and SSPL's presence in a highly competitive construction industry. The rating constraints are partially offset by the experienced promoters and healthy order book. Going forward, the ability of SSPL to increase its scale of operations while improving its profitability margins while managing its working capital requirements shall be the key rating sensitivities. Shrinet and Shandilya Construction Private Limited (SSPL) was incorporated in July 10, 1998 by Mr Sanjay Partap Singh. The company is engaged in construction of roads and development work like construction of drains and culvert. SSPL executes contracts mainly for government departments like New Okhla Industrial Development Authority (NOIDA), Office of Executive Engineer-Irrigation Division, Road Division and Superintending Engineer-Rural Engineering Department. The main raw material for the company includes bitumen, crushed stone, dust sand, cement and tar which the company procures mainly from local dealers where the project is located. The company procures bitumen from Indian Oil Corporation. SSPL reported a PBILDT of INR2.93 crore and PAT of INR0.61 crore on a total operating income of INR26.15 crore in FY15 (refers to the period April 1 to March 31) as against PBILDT of INR4.63 crore and PAT of INR1.07 crore on a total operating income of INR29.55 crore in FY14. The company had achieved a total operating income of INR28.50 crore in FY16 (based on unaudited results). SHUBHYAN MOTORS: CRISIL Reaffirms B- Rating on INR63MM LT Loan -------------------------------------------------------------- CRISIL's ratings continue to reflect Shubhyan Motors Private Limited (SMPL) weak financial risk profile, because of modest networth, aggressive gearing, and weak debt protection metrics. The ratings reflect unrelated diversification, investments/loans to group companies, and exposure to intense competition in the automobile industry. These weaknesses are mitigated by the extensive experience of promoters in the automobile dealership business. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 35 CRISIL B-/Stable (Reaffirmed) Channel Financing 50 CRISIL B-/Stable (Reaffirmed) Inventory Funding Facility 50 CRISIL A4 (Reaffirmed) Term Loan 20 CRISIL B-/Stable (Reaffirmed) Proposed Long Term Bank Loan Facility 2 CRISIL B-/Stable (Reaffirmed) Long Term Loan 63 CRISIL B-/Stable (Reaffirmed) Outlook: Stable CRISIL believes SMPL's financial risk profile will remain constrained by unrelated diversification and investments. The outlook may be revised to 'Positive' if financial risk profile improves significantly, most likely through infusion of funds by the promoters, coupled with liquidation of investments/loans to group companies. Conversely, the outlook may be revised to 'Negative' if investment in unrelated businesses increases further, or if there is a stretch in the working capital cycle, or if operating margin declines. SMPL, incorporated in 1998, is promoted by Mr. Ranjeet Pawar. It is an authorised dealer of commercial vehicles (CVs) manufactured by Tata Motors Ltd (TML) and two wheelers manufactured by Hero Motocorp Ltd (Hero Motocorp). The company operates three showrooms, all in Maharashtra, one each in Ahmednagar and Satara for TML's CVs and one for Hero Motocorp's two wheelers in Pune. SMPL also deals in spares and provides vehicle servicing. SILVER STAR: Ind-Ra Assigns 'IND B' LT Issuer Rating ---------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned Silver Star Group (SSG) a Long-Term Issuer Rating of 'IND B'. The Outlook is Stable. The agency has also assigned SSG's proposed INR100m fund- based facilities a 'Provisional IND B' rating with a Stable Outlook. KEY RATING DRIVERS The ratings reflect the execution and funding risks associated with Silver Palm Grove, SSG's ongoing project. While 30% of the construction has already been completed, the project is scheduled to be completed by FYE19. The funding risk emanates from the firm's substantial dependence on the customer advances which is 58% of the total project cost of INR417m (excluding the land cost). Under a joint development agreement, the firm needs to pay the amount equivalent to the 50,000 sq. ft. of total saleable area or the number of flats to the land owners. The firm is selling all the flats and will pay the land owners in cash. Out of the total 142 flats being built, as on 31 March 2016, SSG had received bookings for the 93 flats while the remaining 35% expose the firm to saleability risk and possible cash flow mismatches. The ratings, however, are supported by over a decade of operating experience of the company's promoters in the real estate segment and a track record of four completed projects (residential and commercial) in Pune. RATING SENSITIVITIES Positive: The sale of flats as planned, leading to strong visibility of cash flow could lead to a positive rating action. Negative: Further leveraging of the existing business for new projects and/or time and cost overruns stressing cash flows for debt service could lead to a negative rating action. COMPANY PROFILE Pune-based SSG, incorporated in 2013, is a partnership firm. SSG's current project Silver Palm Grove consists of five building having a total of 142 saleable flats covering the total saleable area of 1,69,477 Sq. ft. The construction of the project has already started and the whole project is likely to be completed by December 2018. SINGH AUTOMOBILE: Ind-Ra Assigns 'IND BB-' LT Issuer Rating ----------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned Singh Automobile (SA) a Long-Term Issuer Rating of 'IND BB-'. The Outlook is Stable. A full list of rating actions is at the end of this commentary. KEY RATING DRIVERS The ratings reflect SA's small scale of operations and moderate credit profile. According to the unaudited FY16 financials, revenue was INR230.80m (FY15: INR285.69m), net leverage (net debt/EBITDA) was 3.33x (3.70x), interest coverage was 1.99x (2.06x) and EBITDA margin was 4.59% (3.20%). The ratings factor in the proprietorship nature of the organisation. The ratings, however, are supported by the firm's comfortable liquidity profile as indicated by its average working capital utilisation of 57.12% for the 12 months ended June 2016. The ratings are also supported by over 15 years of experience of SA's promoters in the dealership business coupled with the company's established presence in Fatehpur, Uttar Pradesh as an authorised dealer of Mahindra and Mahindra Limited ('IND AAA'/Stable) and Bajaj Auto Limited's vehicles. RATING SENSITIVITIES Negative: A decline in the operating profitability resulting in deterioration in the credit metrics would be negative for the ratings. Positive: Substantial growth in the revenue along with an improvement in the profitability leading to an improvement in the overall credit metrics will be a positive for the ratings. COMPANY PROFILE Established in 1999, SA holds dealership for vehicles of Mahindra and Mahindra and Bajaj Auto. SA's ratings: -- Long-Term Issuer Rating: assigned 'IND BB-'/Stable -- INR42m fund-based working capital limits: assigned 'IND BB- '/Stable/'IND A4+' -- INR18m non-fund-based working capital limit: assigned 'IND A4+' SKC INFRATECH: CRISIL Suspends B+ Rating on INR80MM Loan -------------------------------------------------------- CRISIL has suspended its ratings on the bank facilities of SKC Infratech Private Limited (SKC). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 150 CRISIL A4 Overdraft Facility 80 CRISIL B+/Stable The suspension of ratings is on account of non-cooperation by SKC with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, SKC is yet to provide adequate information to enable CRISIL to assess SKC's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key factor in its rating process as outlined in its criteria 'Information Availability - a key risk factor in credit ratings' SKC undertakes civil construction works and was set up as a proprietorship concern, Seth Kishan Chand, in 1985 by Mr. Kishan Chand Bansal. The firm was reconstituted as a private limited company, Seth Kishan Chand & Associates Pvt Ltd, in 1996. The company was renamed SKC in 2012. SKC's registered office is in Gurgaon (Haryana). SRI VIJAYA: Ind-Ra Affirms 'IND B+' Long Term Issuer Rating ----------------------------------------------------------- India Ratings and Research (Ind-Ra) has affirmed Sri Vijaya Venkateswara Cotton Mills Private Limited's (SVVCM) Long-Term Issuer Rating at 'IND B+'. The Outlook is Stable. The agency has also affirmed SVVCM's INR100m fund-based limits (reduced from INR110m) at 'IND B+' with a Stable Outlook. KEY RATING DRIVERS The affirmation reflects SVVCM's continued small scale of operations and weak credit profile. Provisional (P) FY16 numbers shared by management indicated revenue of INR533m (FY15: INR592m), EBITDA interest coverage (EBITDA/interest) of 1.6x (1.9x), net financial leverage (net debt/operating EBITDA) of 10.2x (5.6x) and operating EBITDA margins of 2.6% (3.3%). SVVCM's liquidity was comfortable, with 89% average utilisation of its working capital limits during the 12 months ended May 2016. The ratings continue to remain constrained on account of SVVCM's presence in the highly competitive cotton industry, which is vulnerable to fluctuations in the price of raw cotton. However, the ratings continue to benefit from SVVCM's founders' experience of more than three decades in the cotton ginning business. RATING SENSITIVITIES Positive: An improvement in the scale of operations and overall credit metrics could lead to a positive rating action. Negative: Further deterioration in credit metrics could lead to a negative rating action. COMPANY PROFILE SVVCM was incorporated in 2006 by Mr. M. Nagamalleswara Rao and Mr. M. Rajasekhara Rao. It is engaged in the ginning and pressing of cotton. Its processes are completely automated, with the capacity to process 300 bales of cotton per day and operate 42 double roller gins. STERLING GATED: CARE Upgrades Rating on INR60cr LT Loan to B+ ------------------------------------------------------------- CARE revises rating assigned to the ncd issue of Sterling Gated Community Private Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Instruments- Non Convertible Debentures 60 CARE B+ Revised from CARE D Rating Rationale The revision in the rating of Sterling Gated Community Private Limited (SGCPL) factors in amendment in the debenture trust agreement with the investors on extending the coupon payment dates and that the coupon payments shall be only out of the surplus funds available with the company. The rating of SGCPL continue to factor in high project execution risk as the project is at a very nascent stage and yet to be launched for booking, apart from moderate dependency on customer advances. The rating, however, derives strength from the promoter's extensive experience in the real estate industry, favorable location of the project and receipt of key statutory approvals. The ability of the company to complete the project on-time and mobilize the required customer advances for the project would be the key rating sensitivities. SGCPL is a special purpose vehicle (SPV) formed by Mr Ramani Sastri and Mr Shankar Sastri, who have more than 30 years' experience of developing real estate projects in Bangalore and founders of the Sterling group. The Sterling group has an experience in developing apartments, villas and commercial complexes across Bangalore. The Sterling developers group till date has developed over 28 projects in total. SGPCL is developing a real estate apartment project in Whitefield, Bangalore. The project is residential project with total 147 units of 3BHK and 4BHK configurations, planned over a part of larger land parcel owned by an associate company, Sterling Urban development Private Limited (SUDPL). The project is a Joint Development with SUDPL as the land owner with a share of 25% in revenue and the balance 75% with SGCPL as developer of the project. The remaining land of SUDPL is being developed as Villa Grande project comprising total 250 villas with Phase-I completed and Phase-II ongoing. SUBIZZ TRAVEL: CARE Assigns B+ Rating to INR0.44cr LT Loan ---------------------------------------------------------- CARE assigns 'CARE B+/CAREA4' ratings to the bank facilities of Subizz Travel Solutions Private Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank Facilities 0.44 CARE B+ Assigned Short term Bank Facilities 0.48 CARE A4 Assigned Long term /Short term Bank Facilities 1.08 CARE B+/CARE A4 Assigned Rating Rationale The ratings assigned to the bank facilities of Subizz Travel Solution Private Limited (STSPL) are constrained by its nascent stage of operations, small scale of operations, highly leveraged capital structure, and working capital intensive nature of operations. The ratings are further constrained by its presence in a highly fragmented and competitive industry. The ratings, however, draw comfort from experience of the promoters, and moderate profitability margins and coverage indicators. Going forward, the ability of the company to increase its scale of operations while improving its capital structure and effective management of working capital requirements shall be the key rating sensitivities. Pune-based STSPL, a private limited company, was incorporated in June 20, 2012. It is promoted by Mr Maninder Uppal, andMs Priyadatta Uppal. STSPL is engaged in travel and tours business wherein it provide domestic and international tour packages which includes air & rail tickets, hotel packages and cab services. The company's clientele includes corporate and individuals. STSPL is registered with the International Air Transport Association (IATA) and is also a member of Travel Agents Federation of India (TAFI). The company generates around 85% of the revenue from booking air tickets and the remaining 15% from other services. The company gets contracts from corporates and has around 15 corporate contracts in hand. For each corporate client the company has one travel consultant exclusively dealing with the corporate client. The company generates 90% of the revenue from corporate clients and the remaining 10% from individual customers. In FY15, MWPL has achieved a total operating income (TOI) of INR1.04 crore with PBILDT and PAT of INR0.23 crore and INR0.14 crore, respectively, as against TOI of INR0.65 crore with PBILDT and PAT of INR0.11 crore and INR0.08 crore, respectively, in FY14. In FY16 (unaudited) (refers to the period April 2015 to March 2016), the company achieved TOI of INR1.04 crore. TAMILNADU STATE: CARE Reaffirms 'B' Rating on INR15cr LT Loan ------------------------------------------------------------- CARE reaffirms rating to the bank facilities of Tamilnadu State Transport Corporation (Coimbatore) Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank Facilities 15 CARE B Reaffirmed Rating Rationale The rating assigned to the bank facilities of Tamilnadu State Transport Corporation (Coimbatore) Limited (TNSTC-CBE) continues to be constrained by the delays in debt servicing of term loans (not rated by CARE) from the Government of Tamilnadu (GoTN) and continued losses incurred by the Corporation during FY16 (refers to the period April 1 to March 31) resulting in erosion of Networth. The rating is also constrained by the company's high dependence on debt funding and weak liquidity profile of the company with high working capital utilization. The rating, however, favourably takes into account the established track record of operations and funding support received from GoTN, being the state's public transport undertaking in the Coimbatore region. Going forward, the continual support from GoTN for day-to-day operations and the ability of the company to manage working capital efficiently would be the key rating sensitivities. TNSTC-CBE, a Government of Tamilnadu Undertaking, began its operation of public transportation in 1972 under the name of Cheran Transport Corporation Limited (CTC) in Coimbatore, Tamil Nadu. CTC was bifurcated into Jeeva Transport Corporation Limited (JTC) and Mahakavi Bharathiar Transport Corporation Limited (MKBTC) in 1983 and 1994, respectively. JTC and MKBTC have operational jurisdiction over Erode and Udhagamandalam districts of Tamil Nadu, respectively. In February 2004, all three companies (CTC, JTC &MKBTC) were merged and renamed as TNSTC-CBE. As on March 31, 2015, TNSTC-CBE had a fleet of 3,295 buses with 44 branches operating in Coimbatore, Tiruppur, Udhagamandalam and Erode districts of Tamil Nadu. It also operates long distance services to Chennai, Bangalore, Mysore, Pondicherry, Thiruchendur, Marthandam, Sengottai, Guruvayoor, Hassan, etc. The Corporation is operating 12.6 lakh km per day carrying around 25 lakh passengers every day. TNSTC-CBE has its own body building units and production facilities for paints and Tyre flaps. During FY16 (Provisional), the Corporation reported after tax loss of INR411 crore on total operating income of INR1,206 crore as against after tax loss of INR431 crore and operating income of INR1,213 crore in FY15. TROY IFMR: Ind-Ra Rates INR24.1MM Series A2 PTCs at IND BB-(SO) --------------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned Troy IFMR Capital 2016 (an ABS transaction) final ratings as follows: -- INR357.5 million Series A1 pass through certificates (PTCs): 'IND A-(SO)'; Outlook Stable -- INR24.1 million Series A2 PTCs: 'IND BB-(SO)'; Outlook Stable The micro finance loan pool assigned to the trust has been originated by Satin Creditcare Network Limited ('IND BBB+'/Stable). KEY RATING DRIVERS The final ratings are based on the origination, servicing, collection and recovery expertise of Satin Creditcare Network, the legal and financial structure of the transaction and the credit enhancement (CE) provided in the transaction. The final rating of Series A1 PTCs addresses the timely payment of interest on monthly payment dates and ultimate payment of principal by the final maturity date on 20 December 2017 in accordance with the transaction documentation. The final rating of Series A2 PTCs addresses the timely payment of interest on monthly payment dates only after the complete redemption of Series A1 PTCs and ultimate payment of principal by the final maturity date on 20 December 2017, in accordance with the transaction documentation. The transaction benefits from the internal CE on account of excess interest spread, subordination and over-collateralisation. The levels of overcollateralisation available to Series A1 and A2 PTCs are 11% and 5%, respectively, of the initial pool principal outstanding (POS). The total excess cash flow or the internal CE available to Series A1 and A2 PTCs is 21.96% and 14.85% respectively, of the initial POS. The transaction also benefits from the external CE of 3.00% of the initial POS in the form of fixed deposits with RBL Bank in the name of the originator with a lien marked in favour of the trustee. The collateral pool assigned to the trust at par had the initial POS of INR401.7m, as of the pool cut-off date of 1 February 2016. The external CE will be used in case of a shortfall in a) complete redemption of all Series of PTCs on the final maturity date, b) monthly interest payment to Series A1 investors and c) monthly interest payment of Series A2 investors after the complete redemption of Series A1 investors. RATING SENSITIVITIES As part of its analysis, Ind-Ra built a pool cash flow model based on the transaction's financial structure. The agency also analysed historical data to determine the base values of key variables that would influence the level of expected losses in this transaction. The base values of the default rate, recovery rate, time to recovery, collection efficiency, prepayment rate and pool yield were stressed to assess whether the level of CE was sufficient for the current rating levels. Ind-Ra also conducted rating sensitivity tests. If the assumptions of the base case default rate worsen by 30%, the model-implied rating sensitivity suggests that the rating of the Series A1 will be downgraded by two notches. If the assumptions of the base case default rate worsen by 30%, the model-implied rating sensitivity suggests that the rating of the Series A2 PTCs will not be downgraded from its current rating level. UNIVERSAL HEAT: CRISIL Assigns B- Rating to INR140MM Cash Loan -------------------------------------------------------------- CRISIL has revoked the suspension of its ratings and assigned its 'CRISIL B-/Stable/CRISIL A4' ratings to the bank facilities of Universal Heat Exchangers Limited (UHEL). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 140 CRISIL B-/Stable (Assigned; Suspension Revoked) Letter of credit & 195 CRISIL A4 (Assigned; Bank Guarantee Suspension Revoked) The ratings were previously 'Suspended' by CRISIL vide the Rating Rationale dated March 14, 2016, since UHEL had not provided necessary information required to maintain a valid rating. UHEL has now shared the requisite information, enabling CRISIL to assign ratings to the bank facilities. CRISIL's ratings on the long term bank facilities of UHEL continue to reflect the company's below-average financial risk profile of the company, its large working capital requirements and susceptibility to economic cycles given the nature of the business. These weaknesses are partially offset by established regional market position in heat exchangers and pressure vessels segment. Outlook: Stable CRISIL believes that UHEL will continue to benefit over the medium term from its promoter's extensive industry experience and established customer relationships. The outlook may be revised to 'Positive' if UHEL reports a sustainable and significant improvement in its profitability, leading to cash profits, or its promoter infuses significant capital leading to better capital structure. Conversely, the outlook may be revised to 'Negative' if there is a slowdown in order inflow, its margins decline, or it undertakes any large, debt-funded capex, weakening its financial risk profile. Established in 1972, Universal Heat Exchangers Limited (UHEL) is engaged in design and manufacture of Heat Exchangers, Pressure Vessels and Columns. The company's plant at Coimbatore, Tamil Nadu has installed capacity of manufacturing 2000MT per annum, its fixed Handling Capacity at 70 MT and it also has Fabrication capabilities. The facilities carry ASME 'U' & 'U2' Stamp Certification. V. G. SHIPBREAKERS: CRISIL Cuts Rating on INR80MM Loan to 'D' ------------------------------------------------------------- CRISIL has downgraded its ratings on the bank facilities of V. G. Shipbreakers Private Limited (VGS) to 'CRISIL D/CRISIL D' from 'CRISIL B-/Stable/ CRISIL A4'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 70 CRISIL D (Downgraded from 'CRISIL B-/Stable') Letter of Credit 80 CRISIL D (Downgraded from 'CRISIL A4') The rating downgrade reflects devolvement of letter of credits for more than 30 days. The delays have been caused by weak liquidity due to slowdown in the shipbreaking industry resulting in stretched receivables. V. G. Shipbreakers Pvt Ltd (VGS) has a weak financial risk profile, marked by a modest net worth, a high total outside liabilities to tangible net worth ratio, and weak debt protection metrics. Further, the company has large working capital requirements and is susceptible to cyclicality in the ship breaking industry and to volatility in steel scrap prices. However, the company benefits from the extensive experience of its proprietor and his family in shipbreaking and steel trading businesses. VGS, incorporated in 2006, is primarily engaged in ship breaking and steel trading businesses. The company is owned and managed by the Prajapati family based in Mumbai, Maharashtra. VAISHNODEVI OIL: CRISIL Reaffirms B+ Rating on INR85MM Loan ----------------------------------------------------------- CRISIL rating on the long-term bank facility of Vaishnodevi Oil Seeds Processing Industries (VOSPI) continues to reflect VOSPI's below-average financial risk profile marked by high gearing and weak debt protection metrics. The rating also reflects the firm's modest scale of operations, and its vulnerability to volatility in raw material prices and to changes in government policies. These rating weaknesses are partially offset by the extensive experience of VOSPI's promoters in the edible oil industry and the firm's proximity to raw material sources. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 85 CRISIL B+/Stable (Reaffirmed) Proposed Long Term Bank Loan Facility 15 CRISIL B+/Stable (Reaffirmed) Outlook: Stable CRISIL believes that VOSPI will continue to benefit over the medium term from its promoters' extensive industry experience. The outlook may be revised to 'Positive' if the firm increases its revenue and improves its profitability significantly, while improving its financial risk profile. Conversely, the outlook may be revised to 'Negative' in case of deterioration in VOSPI's financial risk profile, particularly its liquidity, most likely because of a stretch in its working capital cycle, low accruals, or large debt-funded capital expenditure (capex). Update For 2015-16(refers to financial year, April 1 to March 31), VOSPI's sales are estimated to be around INR590million and are expected to grow at moderate pace with support of increasing volumes in the range of 15 to 18 per cent over the medium term. Over the medium term, the operating margins are expected to remain range bound at 2 to 3 per cent. Over the medium term, CRISIL expects the firm'soperating cycle measured by gross current assets (GCA) in the range of 85 to 90 days and the overall working capital requirements are expected to rise in scale of operations.VOSPI's financial risk profile is supported by moderate gearing and average debt protection metrics. The liquidity continues to be marked by moderate cushion between its accruals and term debt repayment obligations; no plans of major capex over the medium term and working capital intensive operations. VOSPI, set up in 2006, is promoted by Mr. Praful Kumar Thakkar and his brother Mr. Deepak Kumar Thakkar. The firm manufactures unrefined mustard oil, and also sells its by-product, mustard de- oiled cakes. Its seed crushing unit is in Banaskantha (Gujarat) and has installed capacity of 250 tonnes per day. VOSPI reported a profit after tax (PAT) of INR7 million on sales of INR592 million for 2014-15; it had reported a PAT of INR3.4 million on sales of INR486 million for 2013-14. ================= I N D O N E S I A ================= MULTIPOLAR TBK: Fitch Cuts LT Issuer Default Rating to 'B' ---------------------------------------------------------- Fitch Ratings has downgraded Indonesian holding company PT Multipolar Tbk's (Multipolar) Long-Term Issuer Default Rating to 'B' from 'B+'. The Outlook is Stable. The agency has also downgraded Multipolar's senior unsecured rating and USD230m notes due in 2018 to 'B' from 'B+' with Recovery Rating of 'RR4'. The notes are issued by Pacific Emerald Pte Ltd, a wholly owned subsidiary, and guaranteed by Multipolar and certain subsidiaries. At the same time, Fitch Ratings Indonesia has downgraded the National Long-Term Rating to 'BBB+(idn)' from 'A(idn)'. The Outlook is Stable. The downgrade reflects Multipolar's weaker overall business profile, which stems from the change in Fitch's assessment of the credit profile of Indonesian retailer PT Matahari Putra Prima Tbk (MPPA, not rated), in which Multipolar owns a 50.23% stake. Sustained pressure on MPPA's credit profile will result in lower and less reliable dividends paid to Multipolar, the holding company, to cover its operational expenses and interest servicing. Fitch forecasts Multipolar's fixed-charge coverage ratio to remain below 1.25x, which is not consistent with a 'B+/A(idn)' rating. 'BBB' National Ratings denote a moderate default risk relative to other issuers or obligations in the same country. However, changes in circumstances or economic conditions are more likely to affect the capacity for timely repayment than is the case for financial commitments denoted by a higher rated category. KEY RATING DRIVERS Weaker MPPA Performance: The downgrade reflects Fitch's expectation of lower and less reliable dividends from MPPA on account of MPPA's weaker credit profile. MPPA has experienced a challenging operating environment, with slower economic growth, weaker consumer sentiment and higher competition from smaller retail formats, which has weakened its cash generation. This has seen MPPA's leverage as measured by total adjusted debt/operating EBITDAR increase to 3.2x in FY15 from 1.8x in the previous year. Free cash flow will likely remain negative given MPPA's dividend target and capex plan as well as the challenging environment, which Fitch expects to persist for at least 24 months. Structural Subordination: The rating of Multipolar reflects the structural subordination that arises from its group structure. Multipolar is a holding company that owns majority stakes in companies involved in businesses, such as retail, IT service and pay-TV. Most of the company's cash flows are generated from its stakes in Indonesian retailers MPPA and PT Matahari Department Store Tbk (MDS), in which Multipolar owns 20.48%. Lower Sustainable Dividends: MPPA's weaker performance and the absence of a special dividend that was paid in 2015 will reduce Multipolar's dividend receipts to around IDR70 billion a year in 2016 and 2017 (2015: IDR218 billion). However, we estimate higher dividends of IDR200 billion -- 250 billion a year in 2016-2017 (2015: IDR175 billion) from MDS -- which is debt-free, has a solid financial performance and faces less competition - will help to make up for the reduced dividends from MPPA. Fitch said, "Decreasing Fixed-Charge Coverage: Lower dividend receipts and weak performance by subsidiaries (especially PT Indonesia Media Televisi and Multipolar's China retail operations) will result in decreasing fixed-charge coverage. Fitch expects fixed-charge coverage, as measured by the ratio of (adjusted EBITDA + dividend + rent) to (adjusted interest + rent), to decline to around 1.0x in 2017 and 2018, below our previous 1.25x threshold for negative rating action." Weaker Liqudity at Holding Company: The lower dividend from MPPA will have to be compensated by dividends from smaller and less established subsidiaries, such as PT Matahari Pacific and PT Nadya Putra Investama. Fitch estimates the ratio of dividends from subsidiaries to interest will decline to around 1.0x in 2016 and 2017 (2015: 1.1x). The holding company will also need to rely on other measures, such as capital reduction and subsidiaries' repayment of shareholders loans, to cover its operational expenses, if dividend receipts fall short of Mutlipolar's expectations. Liquidity at the holding company is supported by the existing IDR120 billion undrawn working capital facility. KEY ASSUMPTIONS Fitch's key assumptions within its rating case for Multipolar include: -- Deconsolidation of MPPA figures from Multipolar's consolidated financials; proportionate consolidation of IMTV's EBITDA in accordance with Multipolar's ownership of 65% -- Dividend from MPPA of around IDR70 billion and dividend from MDS of around IDR200 billion- IDR300 billion each year in 2016 and 2017 -- MPPA-adjusted capex at around IDR300 billion- IDR500 billion a year in 2016-2017 -- Multipolar Technology to generate around IDR230 billion - IDR260 billion of EBITDA a year in 2016 and 2017 RATING SENSITIVITIES Positive: Future developments that may, individually or collectively, lead to positive rating action include: -- Overall improvement in business profile that results in sustainable fixed-charge coverage of above 1.3x, which may be from the divestment of weak subsidiaries or higher sustainable dividends from established subsidiaries or investments. -- Turnaround in MPPA's credit profile as indicated by free cash flow turning neutral or positive. Negative: Future developments that may, individually or collectively, lead to negative rating action include: -- Fixed-charge coverage falls below 1.0x on a sustained basis. -- Material weakening in liquidity that results from lower dividend receipts or deterioration in subsidiaries' performance or significant reduction in the cash balance of Multipolar (excluding MPPA) or if Multipolar receives increasingly unfavourable terms on its financing MODERNLAND REALTY: Fitch Affirmed 'B' LT IDR; Outlook Negative -------------------------------------------------------------- Fitch Ratings has revised Indonesia-based homebuilder PT Modernland Realty Tbk's (Modernland) Outlook to Negative from Stable. At the same time the agency has affirmed the company's Long-Term Issuer Default Rating at 'B'. A full list of the rating actions is provided at the end of this commentary. The Negative Outlook reflects the risk that Modernland could breach a number of its local-currency debt covenants in 2017, as EBITDA may remain weak unless presales improve in the next six to 12 months. Modernland may not be able to achieve its presales target for 2016 due to the slow domestic macroeconomic environment and its dependence on cyclical industrial land sales, which may put a strain on its cash collection. The IDR was affirmed at 'B' as the company may take measures to improve the recognition of EBITDA or alternatively obtain waivers on covenant breaches. KEY RATING DRIVERS Weak Presales; Covenant Breach: Modernland's 1Q16 presales fell 86% yoy to IDR197 billion, which accounted for less than 10% of its 2016 target. The decline was driven by slow economic growth and the government's crackdown on tax evasion, which has left buyers cautious. Fitch forecasts this may lead to Modernland breaching a number of its local-currency debt covenants in 2017, as EBITDA declines following the weakness in presales. The implementation of a tax amnesty in Indonesia on 1 July may boost demand for property, although Modernland's overall credit profile is not likely to benefit in the short term given the potential surge in new property launches in the market once the amnesty takes effect and Modernland's major exposure towards the industrial segment. Volatile Industrial Cashflows: Modernland's exposure to industrial land sales results in more volatile cash flows than peers that depend on residential sales. Nevertheless, this remains an important contributor to Modernland's cash flows, and the volatility is mitigated by the low development risks of the industrial segment. Modernland has a good 20-year track record in developing industrial estates, and has built strong relationships with tenants. Its flagship Cikande industrial estate has a very low average land cost compared with the current average selling price (ASP) of around IDR1.5m per square metre (sqm), and Modernland has sufficient land to continue developing there for around five years, assuming no further land acquisitions. Fitch believes Modernland can build on its success in Cikande and use a similar business model for future developments in Bekasi. Limited Residential Track Record: Fitch expects Modernland's residential and commercial segment to account for more than 60% of presales by 2018, driven by the Jakarta Garden City (JGC) project and the new launches in Bekasi. The growing proportion of residential sales will counterbalance volatility in industrial land sales, but Modernland's track record in developing an integrated, large-scale residential project is still limited relative to the other rated developers. ASRI Land Sales Delayed: Fitch expects cash collection from land sales to PT Alam Sutera Realty Tbk (ASRI, B+/Negative) to lag behind management's expectation. Fitch's rating case assumes majority of the proceeds that was expected to be received this year to be delayed to 2017, mainly due to ASRI's weak presales. Nevertheless, Modernland believes ASRI remains committed to completing the acquisition, given the strategic location of the land and the low acquisition price compared with the current market price in the area. Manageable Forex Risk: Modernland has entered into a few call- spread options to fully hedge the principal of its USD191 million bond due 2019, covering rupiah depreciation of up to IDR15,500 per US dollar. The company has also entered into a similar hedging arrangement for its USD57 million outstanding bond due 2016, covering rupiah depreciation of up to IDR14,000 per US dollar. In addition, Fitch believes that Modernland's thick margins are sufficient to absorb short-term currency volatility. KEY ASSUMPTIONS Fitch's key assumptions within its rating case for the issuer include: -- Presales (excluding one-off sales) of IDR1.5trn and IDR3.6trn in 2016 and 2017, respectively -- Average ASP growth of 5%-10% year on year -- Land acquisition capex of IDR825 billion and IDR743 billion in 2016 and 2017, respectively -- Majority of ASRI's land sale proceeds to be delayed to 2017 RATING SENSITIVITIES Negative: Future developments that may, individually or collectively, lead to negative rating action include: -- If the company fails to achieve its 2016 presales target and there is heightened risk it may breach covenants on its local-currency debt, or the company fails to negotiate waivers on covenant breaches -- Presales/ gross debt sustained at less than 40% (2016F: 77%) Positive: Future developments that may, individually or collectively, lead the Outlook to be revised back to Stable include: -- The company achieves its 2016 presales target and the risk of it breaching its local-currency debt covenants is reduced, or the company successfully manages to negotiate waivers on covenant breaches LIQUIDITY Adequate Liquidity: Modernland had IDR519 billion of cash and IDR999 billion of current maturities at end-2015. Of the IDR999 billion, management extended the maturity on IDR150 billion of working capital facilities to 2017. Furthermore, Fitch's rating case expects Modernland to be able to repay its upcoming USD57 million bond maturity (part of the current maturities) in October 2016 using a combination of cash collected from previous years' presales and the proceeds from a planned rupiah bond issuance. Part of Modernland's cash balance is held in US dollars, which mitigates some currency risk on the repayment. Liquidity is also supported by Modernland's access to local and international capital markets. FULL LIST OF RATING ACTIONS PT Modernland Realty Tbk Long-Term IDR affirmed at 'B'; Outlook revised to Negative from Stable Senior unsecured rating affirmed at 'B' Modernland Overseas Pte Ltd USD57 million outstanding 11% senior unsecured notes due 2016 affirmed at 'B' and Recovery Rating of 'RR4' (original principal amount was USD150 million prior to the exchange in 2014) Marquee Land Pte Ltd USD191 million outstanding 9.75% senior unsecured notes due 2019 affirmed at 'B' and Recovery Rating of 'RR4' ==================== S O U T H K O R E A ==================== KOREA: Troubled Shippers, Shipbuilders Suffer Rating Downgrades --------------------------------------------------------------- Yonhap News Agency reports that South Korea's troubled firms, mostly shipbuilders and shippers, have faced rating downgrades amid their deepening financial woes and ongoing corporate overhaul efforts, industry sources said. Korea Ratings Corp. said a total of 31 firms suffered a rating downgrade in the first half of the year, compared with 43 companies a year earlier, according to Yonhap. But Daewoo Shipbuilding & Marine Engineering Co. and other shipbuilders, along with the country's major shipping lines such as Hanjin Shipping Co. saw their ratings take a downgrade, says Yonhap. For one, Hanjin Shipping, the country's top shipping line, was rated BB+ in March, but suffered a further downgrade to CCC in June, Yonhap discloses. Its smaller local rival, Hyundai Merchant Marine Co., also suffered a sharp drop in its credit rating to D in April, from B+ in February, according to Korea Ratings. Yonhap relates that rating downgrades were also made for the country's major shipbuilders. Daewoo Shipbuilding suffered a drop in its rating to BB from BB+ in June, with ratings for Samsung Heavy Industries Co. and Hyundai Heavy Industries Co. cut by two notches and one notch, respectively, to A- and A. "The overall outlook for the country's shipbuilding sector is negative, and further downgrades may be made if their slump continues," Yonhap quotes Seo Kang-min, an analyst at Korea Ratings, as saying. Yonhap notes that South Korean shipbuilders have been under severe financial strain since the 2008 global economic crisis which sent new orders tumbling amid a glut of vessels and tougher competition from Chinese rivals. The country's top three shipyards -- Hyundai Heavy Industries, Samsung Heavy Industries Co. and Daewoo Shipbuilding & Marine Engineering Co. -- suffered a combined operating loss of KRW8.5 trillion (US$7.4 billion) last year due largely to increased costs stemming from a delay in the construction of offshore facilities and an industrywide slump, with the Daewoo Shipbuilding alone posting a KRW5.5 trillion loss, Yonhap relates. According to the report, the shipbuilders have recently drawn up sweeping self-rescue programs worth KRW10.35 trillion in their desperate bids to overcome a protracted slump and mounting losses. Separately, local shippers are also placed under a tough restructuring drive as falling freight rates and a protracted slump squeezed their margins, the report states. ================ S R I L A N K A ================ SIERRA CABLES: Fitch Assigns 'BB+(lka)' Long-Term Rating -------------------------------------------------------- Fitch Ratings has assigned Sri Lanka-based cable manufacturer Sierra Cables PLC (Sierra) a National Long-Term Rating of 'BB+(lka)'. The Outlook is Stable. Sierra's rating reflects its established core business, which has an extensive product portfolio, modest but expanding market share and stable EBITDA margins. This is counterbalanced by exposure to cyclical end-markets, risks associated with international expansion and losses at subsidiaries. The rating is also supported by Fitch's expectation that the company will maintain net leverage, measured as net adjusted debt/operating EBITDAR, at less than 2.5x over the medium term, despite planned capacity expansions. Leverage was 2.4x in the financial year ended 31 March 2016 (FY16). KEY RATING DRIVERS Recovery in End-Markets: Sierra's customers are mostly in cyclical industries, including construction and infrastructure development, which substantially slowed down in the past 12-18 months. However, the government's decision to resume work on many of the suspended projects and to launch a few new large-scale developments in 2016 will boost demand for the cable industry. Growth in construction of housing due to rapid urbanisation in Sri Lanka and gradual expansion in the manufacturing sector should also drive demand for cables. Modest but Increasing Market Share: Sierra is the third-largest cable manufacturer in Sri Lanka based on revenue. Its market share has increased steadily to 22%. The company has an extensive product portfolio that is similar to that of much larger peers to meet the needs of domestic industrial and retail customers. Strong EBITDA Margins: Sierra's EBITDA margin improved steadily over the past few years due to increases in high-margin sales to institutional customers, low raw-material prices and use of efficient machinery in the production process. Aluminium and copper account for about 70% of the company's cost of goods sold, and Sierra can pass on any price increases to its customers if necessary, which allows the company to maintain stable margins. Fitch said, "Strengthening Balance Sheet: Sierra's net leverage improved to 2.4x at FYE16 from 5.1x at FYE13 due to significant improvements in its core operations. We expect the company to maintain net leverage below 2.5x over the medium term, despite planned expansions both domestically and internationally, which we expect to be primarily funded through internally generated funds." Drag from Unprofitable Subsidiaries: Sierra's two subsidiaries Sierra Industries Limited (SIL) and Sierra Power Limited (SPL) are still unprofitable. The potential divestment of the power business during FY17 and a possible turnaround in SIL's profitability in the next 12-18 months as a result of significant contract wins from institutional customers should have a positive impact Sierra's margins and leverage in the medium term. Risky International Expansions: Sierra will invest LKR375m to set up cable manufacturing plants in Kenya and Fiji in the next couple of years. Kenya provides strong growth potential for the company - given electrification is below 30% - but the investment carries high political and economic risk. Disruptions to production, delays in payments or additional capital calls could adversely impact Sierra's future cash flows. In Fiji, Sierra has tied up with the two largest hardware product distributors in the country, which mitigates risks associated with foreign expansion. KEY ASSUMPTIONS Fitch's key assumptions within its rating case for the issuer include: -- Annual revenue growth to average 20% from FY17-FY18, partly due to a low base and partly due to international expansion and new contract wins from institutional clients. Annual revenue growth to stabilise in the high-single-digit range in the medium term. -- EBITDA margins to expand by 100bps over FY17-FY20 due to a bigger proportion of institutional and international sales in the sales mix, and due to the restructuring of unprofitable subsidiaries. -- Average capex of LKR150m a year over FY17-FY20 -- Dividend pay-out ratio to average 30% over FY17-FY20 RATING SENSITIVITIES Positive: An upgrade is not anticipated in the short to medium term due to Sierra's current size and scale of operations, however future developments that may, individually or collectively, lead to positive rating action over the longer term include: - An improvement in company's size and scale of operations while maintaining the current credit profile Negative: Future developments that may, individually or collectively, lead to negative rating action include: -- Adjusted net debt/EBITDAR over 3.5x on a sustained basis -- EBITDAR coverage (as measured by EBITDAR to (Gross Interest + Rent)) reducing below 3.0x on a sustained basis -- Delays or disruptions in its planned Kenyan of Fiji expansion, which could result in additional capital calls or reduce profitability LIQUIDITY Manageable Liquidity Position: As at end-March 2016, Sierra had LKR73m of unrestricted cash and LKR840m in unutilised credit lines to meet LKR945m of short-term debt falling due in the next 12 months, placing the company in a tight but manageable liquidity position. The planned divestments of the power subsidiary should also boost cash. =============== X X X X X X X X =============== FIJI REPUBLIC: S&P Affirms 'B+' Sovereign Ratings; Outlook Stable ----------------------------------------------------------------- S&P Global Ratings affirmed its long-term foreign and local currency sovereign ratings on the Republic of Fiji at 'B+'. S&P also affirmed the short-term rating on Fiji at 'B'. The outlook remains stable. Fiji's transfer and convertibility remains at 'B+'. RATIONALE The rating affirmation on Fiji reflects S&P's view of the country's weak institutional settings, limited monetary policy flexibility, income levels, and weakening fiscal metrics that constrain the government's credit-standing. Mitigating these weaknesses are the government's falling interest costs and its sound external position. S&P also expects Fiji's credit quality to remain stable as the impact of Cyclone Winston on the economy is likely to be temporary. On Feb. 20, 2016, tropical Cyclone Winston caused major damage and disruptions to the economy. Estimates put the damage bill at more than 10% of GDP (more than US$500 million), with private property including housing making up a significant proportion of the damage, rather than public infrastructure. Roads, agriculture, and the sugar industry also incurred damage. The central business district in Suva and key tourism areas around Nadi avoided the brunt of the cyclone and incurred relatively limited damage to key infrastructure. In addition, the damage is more concentrated to rural areas, while tourism arrivals continue to grow, resulting in less risk to the economy than S&P previously thought. Real economic growth will still slow to about 2.5% in fiscal 2016, before rebounding to 4% in 2017 and 3.8% in 2018. This will drive Fiji's GDP per capita toward US$5,400 and improve the country's economic outlook over the medium-term. Reconstruction works, Fiji National Provident Fund's (FNPF) assistance that allows members to withdraw up to Fiji dollar (FJ$) 5,000 for home repairs (projected to reach about FJ$250 million-FJ$300 million in total), government assistance, and donor and multi-lateral agency aid will support economic growth and offset any potential temporary impacts to the agriculture and sugar industries. Fiji's economy has grown by an average of 4.8% per year since 2013 and has improved income levels, with GDP per capita of about US$5,000 in 2015. This level may not fully capture the impact of Cyclone Winston. The government's fiscal position is likely to weaken, resulting in higher borrowings in the near-term. Immediately following Cyclone Winston, the government faces higher current expenditure requirements and potentially lower growth in tax receipts. This scenario will weaken the government's fiscal position and has led to higher borrowings. S&P forecasts deficits to average about 4% of GDP over the next three years, resulting in the annual change in general government debt rising to more than 3% of GDP between 2016 and 2018. This will increase net general government debt to 46% of GDP in 2016 and 2017, from 42% in 2015, before returning to its downward trend as deficits narrow and growth accelerates. In contrast, interest expenditure is falling and will average less than 10% of government revenues. Falling interest costs reflect improved market pricing on the refinancing of the government's US$250 million bond (5% of GDP) in September 2015, and a higher proportion of concessional borrowings from the Asian Development Bank and World Bank. Shortcomings in infrastructure and basic services, and the urgent need for reconstruction following Cyclone Winston constrain the government's budgetary flexibility, in S&P's view. Fiji's external metrics are likely to remain supportive of the sovereign ratings. External liquidity (measured by gross external financing needs as a percentage of current account receipts [CAR] and usable reserves) is likely to average about 96% over 2016-2019. Meanwhile, external borrowings (measured by narrow net external debt) are likely to rise to 10% of CAR during the period. The current account deficit may widen in 2016 and 2017, reflecting higher imports as reconstruction activity picks up. S&P expects tourism receipts to support Fiji's services receipts and external position. During 2016, inward remittances to support affected relatives will fund a large proportion of the current account deficit. Official reserves remain comfortable at more than US$900 million (about three and a half months of import coverage) in 2016, and will receive support from Asian Development Bank and World Bank loans. Weighing on its external metrics is Fiji's high reliance on foreign financing, as indicated by its much greater level of net external liabilities relative to narrow net external debt. S&P regards the Reserve Banks of Fiji's ability to support sustainable economic growth while attenuating economic or financial shocks to be constrained. The pegged currency arrangements restrict the country's monetary flexibility. This policy requires the authorities to focus on exchange rate stability at the expense of stability in domestic prices and economic growth. Further limiting flexibility is the lack of effective monetary policy transmission to the economy, which is a result of Fiji's underdeveloped financial system. Extensive foreign exchange restrictions are a further hindrance, although these have been gradually easing in recent years as Fiji rebuilt its official reserves. The political state in Fiji appears to have stabilized following democratic elections in 2014. This is reflected in improved relations with the international community including donor agencies. The effectiveness of policymaking remains mixed with limited checks and balances, and deficiencies in producing timely and reliable data. OUTLOOK The stable outlook reflects S&P's expectations that the Fiji government will ensure the impact of Cyclone Winston on its fiscal position and economy is temporary, while safeguarding the country's external position and reserve levels. S&P may lower the ratings within the next 12 months if the impact of Cyclone Winston was substantially worse than S&P forecasts. A downgrade could also occur if the political and policy environment becomes unpredictable, causing a decline in domestic and foreign investor confidence, and the withdrawal of donor and multilateral support. S&P may raise the ratings if Fiji's economic growth remains strong, enabling the government to replace lost capital following Cyclone Winston while improving its fiscal position. At the same time, an upgrade would be predicated on the government reducing its foreign exchange restrictions and maintaining a healthy level of reserves. In accordance with S&P's relevant policies and procedures, the Rating Committee was composed of analysts that are qualified to vote in the committee, with sufficient experience to convey the appropriate level of knowledge and understanding of the methodology applicable. At the onset of the committee, the chair confirmed that the information provided to the Rating Committee by the primary analyst had been distributed in a timely manner and was sufficient for Committee members to make an informed decision. After the primary analyst gave opening remarks and explained the recommendation, the Committee discussed key rating factors and critical issues in accordance with the relevant criteria. Qualitative and quantitative risk factors were considered and discussed, looking at track-record and forecasts. The committee agreed that "key rating factor" had improved/deteriorated and that the "key rating factor" had improved/deteriorated. All other key rating factors were unchanged. The chair ensured every voting member was given the opportunity to articulate his/her opinion. The chair or designee reviewed the draft report to ensure consistency with the Committee decision. The views and the decision of the rating committee are summarized in the above rationale and outlook. The weighting of all rating factors is described in the methodology used in this rating action. RATINGS LIST Ratings Affirmed Republic of Fiji Sovereign Credit Rating B+/Stable/B Transfer & Convertibility Assessment Local Currency B+ Republic of Fiji Senior Unsecured B+ * Unenforced & Arbitration Judgments Cost 14% of Cos. Over $50M --------------------------------------------------------------- Burford Capital, a global finance firm focused on law, on June 29, 2016, announced research showing the troubling scale of damages and awards left unpaid by judgment evaders. A new Burford study shows that 86 percent of private practice lawyers have clients who in the last five years have not been paid the full value of a successful litigation or arbitration judgment or award. Almost one in five lawyers (19 percent) said their clients' unenforced judgments were worth between $10 and $50 million (GBP7 to GBP35 million); 14 percent said that their client's unenforced judgments were worth more than $50 million. "If one were to add up the lost value to companies around the world when they cannot enforce judgments, the collective sum would be billions," said Christopher Bogart, CEO of Burford Capital. The study, conducted by Burford in conjunction with the Lawyer Research Service, points to a significant global problem. After securing justice in court, often at a cost of millions in legal fees and years of effort, companies can be left hanging when judgment debtors -- individuals, corporations or foreign governments -- simply fail to pay what they owe. Collecting is even more problematic when these judgment debtors take steps to bury assets in offshore structures. The majority of corporate executives surveyed (58 percent) confirmed that their companies have not been paid the full value of litigation and arbitration judgments in the past five years. The majority of lawyers (62 percent) said the prime reason judgments or awards could not be satisfied was because debtors' assets were hidden offshore. They identified the regions most likely to erect barriers to securing judgment awards as Russia and the former Soviet states (37 percent), followed by the Caribbean (20 percent) and Asia (16 percent). Corporations may, however, leverage professional judgment enforcement and asset tracing partners to recover judgment awards. Mr. Bogart continued: "Given the scale of the problem, businesses are increasingly turning to enforcement partners -- and the savviest companies are also utilizing litigation finance to turn those unenforced judgment debts into capital for the business, without adding cost or risk to corporate balance sheets." According to the survey, more than half of private practice lawyers (52 percent) said clients have worked with judgment enforcement and asset tracing professionals to recover judgment awards the past five years. However, only 11 percent have clients who have sought and secured financing to fund these enforcement services, moving these costs off their balance sheets -- signalling both an opportunity for businesses and a need for law firms to educate clients. The study is based on a survey of over 200 private practice lawyers, in-house counsel and corporate C-level executives in the UK, US, Europe and Asia. A copy of the report is available at: http://bankrupt.com/misc/Burford_WhitePaper_NY_Final.pdf About Burford Capital Burford -- http://www.burfordcapital.com/-- is a global finance firm focused on law. Burford's businesses include litigation finance, insurance and risk transfer, law firm lending, corporate intelligence and judgment enforcement, and a wide range of investment activities. Burford's equity and debt securities are publicly traded on the London Stock Exchange. The firm works with lawyers and clients around the world from its principal offices in New York and London. ********* Tuesday's edition of the TCR-AP delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR-AP editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Tuesday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR-AP constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR-AP editor holds some position in the issuers' public debt and equity securities about which we report. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR-AP. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com Friday's edition of the TCR-AP features a list of companies with insolvent balance sheets obtained by our editors based on the latest balance sheets publicly available a day prior to publication. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Asia Pacific is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Valerie U. Pascual, Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Julie Anne L. Toledo, and Peter A. Chapman, Editors. Copyright 2016. All rights reserved. ISSN: 1520-9482. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. TCR-AP subscription rate is US$775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter Chapman at 215-945-7000 or Nina Novak at 202-362-8552. *** End of Transmission ***