/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/160721.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 Thursday, July 21, 2016, Vol. 19, No. 143 Headlines A U S T R A L I A EXPRESS ASBESTOS: First Creditors' Meeting Set for July 28 ICBC CAPITAL: ASIC Cancels AFS License LAURA ASHLEY: Buyers Found for 18 Retail Outlets and Online Store MODLIVING HOMES: First Creditors' Meeting Set for July 28 PUMP CORP: First Creditors' Meeting Slated for July 27 VALENCE INDUSTRIES: First Creditors' Meeting Set for July 27 C H I N A HANRUI OVERSEAS: Fitch Gives Final 'BB+' Rating to 2019 Notes * Ruihua's Suspension in Interbank Market Has Minimal Impact H O N G K O N G TITAN PETROCHEMICALS: Trading Resumes After 4-year Halt I N D I A ASIAN SEALING: CRISIL Lowers Rating on INR70MM LT Loan to 'B' ASTER PRIVATE: Ind-Ra Suspends 'IND D' Long-Term Issuer Rating BALA SUNDRI: ICRA Suspends 'B/A4' Rating on INR10cr Bank Loan BHARAT AGRO: ICRA Assigns 'B+' Rating to INR30cr Proposed Loan BHUSHAN AUTOMOBILES: CRISIL Reaffirms B+ Rating on INR74MM Loan CHIRAKEKAREN GLASS: CRISIL Reaffirms B- Rating on INR60MM Loan EL-TE MARINE: CRISIL Reaffirms B+ Rating on INR200MM Packing Loan G M COT FIBERS: CRISIL Reaffirms B+ Rating on INR50MM Cash Loan G S DEVELOPERS: Ind-Ra Assigns 'IND B' Long-Term Issuer Rating G.B. INDUSTRIES: CRISIL Reaffirms B+ Rating on INR69MM Cash Loan GEO AQUATIC: CRISIL Reaffirms B+ Rating on INR49.6MM Bill Disc. GLENMARK PHARMACEUTICALS: Fitch Assigns 'BB' LT FC IDR GOKUL STEELS: CRISIL Lowers Rating on INR65MM Cash Loan to 'D' HEATH VIEW: ICRA Assigns 'B' Rating to INR12.0cr Term Loan HEM MOTOR: CRISIL Suspends B- Rating on INR120MM Channel Loan INOX WORLD: CRISIL Assigns B+ Rating to INR230MM LT Loan J.R.R. CONSTRUCTION: ICRA Suspends B Rating on INR5.6cr Loan JYOTI STEEL: CRISIL Lowers Rating on INR35.2MM Cash Loan to B+ KBC INFRASTRUCTURES: ICRA Suspends B+ Rating on INR7.50cr Loan MADURAI TUTICORIN: ICRA Reaffirms 'D' Rating on INR577.38cr Loan MAGUS METALS: ICRA Suspends B+ Rating on INR9.0cr Bank Loan MEHTA & ASSOCIATES: ICRA Cuts Rating on INR8.0cr Loan to 'B' MURLI COLD: ICRA Assigns B+ Rating to INR10cr Cash Loan NANDA SALES: ICRA Lowers Rating on INR7.5cr Loan to B+ NANDI PLASTICISERS: ICRA Suspends B+ Rating on INR8.0cr Loan NATURAL ORGANIC: CRISIL Reaffirms 'B' Rating on INR140MM Loan NAVHARI FOOD: ICRA Reaffirms B+ Rating on INR7.0cr Cash Loan NIPSO POLYFABRIKS: ICRA Suspends C+/A4 Rating on INR7.72cr Loan POONAM ENTERPRISES: CRISIL Reaffirms 'B' Rating on INR100MM Loan R.F. EXPORTS: CRISIL Assigns 'B' Rating to INR50MM Term Loan RAJ DEALERS: ICRA Suspends B+ Rating on INR6.0cr Bank Loan RAMESH CHANDRA: Ind-Ra Withdraws LT 'Provisional IND B+' Ratings RIDDHI CASTING: CRISIL Cuts Rating on INR150MM Term Loan to B SAKETH EDUCATIONAL: CRISIL Suspends 'D' Rating on INR300MM Loan SCHABLONA INDIA: CRISIL Lowers Rating on INR50MM Cash Loan to B SHANKAR PARVATI: ICRA Reaffirms B+ Rating on INR7.0cr Cash Loan SHRADHA APPARELS: CRISIL Reaffirms B+ Rating on INR5MM Loan SHREE KHODAL: ICRA Reaffirms B+ Rating on INR6.50cr Cash Loan SILVER SPRING: CRISIL Reaffirms 'B' Rating on INR67.5MM Loan SJLT SPINNING: Ind-Ra Suspends 'IND BB+' Long-Term Issuer Rating SONY PYRO: CRISIL Suspends B+ Rating on INR70MM Cash Loan SREE HARICHARAN: CRISIL Reaffirms B- Rating on INR25MM Cash Loan SRI BALAJI: ICRA Suspends B+ Rating on INR7.10cr Loan SRI JAGDAMBA: CRISIL Suspends 'D' Rating on INR500MM Cash Loan SRIJAN PUBLISHERS: Ind-Ra Withdraws Provisional 'IND BB-' Rating SRINIVASA RICE: ICRA Ups Rating on INR9.65cr LT Loan to B+ SUPREME AUDIOTRONICS: ICRA Suspends 'B' Rating on INR5.80cr Loan TAPTI AGRO: ICRA Assigns 'B' Rating to INR14cr Term Loan TRICHY THANJAVUR: ICRA Reaffirms 'D' Rating on INR238.29cr Loan UNION ENTERPRISES: ICRA Reaffirms 'D' Rating on INR9.57cr Loan VAKRATUND COLD: CRISIL Suspends 'B' Rating on INR49.5MM Loan VENKATESHKRUPA SUGAR: CRISIL Suspends B+ Rating on INR300MM Loan VINAYAK POLYMERS: CRISIL Cuts Rating on INR150MM Loan to B+ M A L A Y S I A 1MALAYSIA: US Seeks to Seize More than $1B in Assets from Fund N E W Z E A L A N D Q CARD: Fitch Affirms 'Bsf' Rating on Series F 2014-1 Debt P H I L I P P I N E S GSIS FAMILY: PDIC Invites Investors to Rehabilitate Bank LBC EXPRESS: PDIC Order Garnishing Araneta Assets Lifted RB LABRADOR: PDIC Files Criminal Charges vs. Former President SECURITY BANK: Fitch Hikes LT Issuer Default Ratings to 'BB+' - - - - - ================= A U S T R A L I A ================= EXPRESS ASBESTOS: First Creditors' Meeting Set for July 28 ---------------------------------------------------------- David Iannuzzi and Steve Naidenov of Veritas Advisory were appointed as administrators of Express Asbestos Removalist Pty Ltd on July 18, 2016. A first meeting of the creditors of the Company will be held at Level 12, 88 Pitt Street, in Sydney, on July 28, 2016, at 11:00 a.m. ICBC CAPITAL: ASIC Cancels AFS License -------------------------------------- Australian Securities and Investment Commission has cancelled the Australian Financial Services (AFS) license of ICBC Capital Pty Ltd. ICBC was formerly known as Komodo Capital Pty Ltd. ASIC took this action as ICBC had been placed in liquidation by the Supreme Court of New South Wales on March 18, 2016. The application to place ICBC in liquidation was made by a creditor of the company on the basis that ICBC was insolvent. As a consequence of this cancellation, ICBC is no longer able to provide financial services that it was previously authorised to provide under the AFS licence No. 344234. Similarly, any authorised representative of ICBC is also unable to continue to provide financial services under ICBC's AFS license. The AFS license was cancelled on June 1, 2016. LAURA ASHLEY: Buyers Found for 18 Retail Outlets and Online Store ----------------------------------------------------------------- Eloise Keating at SmartCompany reports that the Laura Ashley brand will continue in Australia, after a buyer was found for 18 of the brand's local retail outlets and its online store. SmartCompany says the Australian arm of Laura Ashley collapsed into voluntary administration on January 7, with Ross Blakeley, Quentin Olde and John Park of FTI Consulting appointed to manage the administration and find a buyer for the business. That search was successful, with a private buyer purchasing the business from the administrators as a going concern, SmartCompany relates. SmartCompany understands a purchase agreement for business has been finalised with a company called L Ashley Pty Ltd. The purchase price is undisclosed, as are the conditions of the agreement. However, SmartCompany understands the sale includes 18 Laura Ashley retail outlets and the brand's online store in Australia. In January, Laura Ashley Australia was operating 38 stores across the country under a licence agreement from Laura Ashley UK, the report notes. Seven stores were closed at the end of January, with another five outlets earmarked for closure in mid-February. At that time, there were 25 Laura Ashley stores trading in Australia, SmartCompany discloses. The Australian operations of Laura Ashley were established in 1971 and the business specialises in selling clothing, homewares and furniture from the iconic brand. The business was also operating four stores in New Zealand. While the New Zealand operations were not included in the voluntary administration of the Australian operations, administrators from Gerry Rea Partners were subsequently appointed to LA (New Zealand) in early June, SmartCompany relates citing Stuff.co.nz. The four New Zealand stores ceased trading at the end of last month and owe unsecured creditors more than NZ$2.3 million, with Stuff reporting the buyer of the Australian operations was not "in a position to look at New Zealand," adds SmartCompany. About Laura Ashley Laura Ashley Australia sells fashion, homewares and furniture. Laura Ashley was a Welsh fashion designer who first launched her furnishings business in the 1950s, before expanding into clothing. The company was founded in Australia in 1971 and operates 38 stores in Australia and four in New Zealand under a licence agreement from Laura Ashely UK. As reported in the Troubled Company Reporter-Asia Pacific on Jan. 8, 2016, SmartCompany said external directors were called in on Jan. 7 to manage the business, with Ross Blakeley, Quentin Olde and John Park from FTI Consulting appointed as administrators. The appointment of administrators only applies to the retailer's Australian stores. Laura Ashley's New Zealand stores and Laura Ashley UK are not affected by the collapse of the Australian business, SmartCompany said. MODLIVING HOMES: First Creditors' Meeting Set for July 28 --------------------------------------------------------- David Iannuzzi and Steve Naidenov of Veritas Advisory were appointed as administrators of Modliving Homes Pty Ltd on July 18, 2016. A first meeting of the creditors of the Company will be held at CTA Business Club, MLC Centre, in Martin Place, Sydney, on July 28, 2016, at 10:00 a.m. PUMP CORP: First Creditors' Meeting Slated for July 27 ------------------------------------------------------ Stephen Robert Dixon and Shaun McKinnon of Grant Thornton were appointed as administrators of Pump Corp (Queensland) Pty Ltd on July 15, 2016. A first meeting of the creditors of the Company will be held at King George Central, Level 18, 145-147 Ann Street, in Brisbane, Queensland, on July 27, 2016, at 11:00 a.m. VALENCE INDUSTRIES: First Creditors' Meeting Set for July 27 ------------------------------------------------------------ Laurence Fitzgerald & Michael Humphris of William Buck were appointed as administrators of Valence Industries Ltd, Valence Industries Operations Pty Ltd, and Valence Industries Services Pty Ltd on July 15, 2016. A first meeting of the creditors of the Company will be held at Chartered Accountants Australia New Zealand, Level 3, 600 Bourke Street, in Melbourne, on July 27, 2016, at 10:00 a.m. ========= C H I N A ========= HANRUI OVERSEAS: Fitch Gives Final 'BB+' Rating to 2019 Notes ------------------------------------------------------------- Fitch Ratings has assigned Hanrui Overseas Investment Co., Ltd's $US300 million 4.90% senior unsecured notes due 2019 a final rating of 'BB+'. The assignment of the final ratings follows the receipt of documents conforming to information already received. The final ratings are in line with the expected ratings assigned on 21 June 2016. The offshore notes are unconditionally and irrevocably guaranteed by Hanrui International Investment Company Limited (HII), which is a direct, wholly owned subsidiary of Jiangsu HanRui Investment Holding Co., Ltd (Hanrui; BB+/Stable). The notes are senior unsecured obligations of HII and rank pari passu with its other senior unsecured obligations. Net proceeds will be used for general corporate purposes. KEY RATING DRIVERS Hanrui has granted a keepwell and liquidity support deed and a deed of equity interest purchase in place of a guarantee, undertaking to ensure HII has sufficient assets and liquidity to meet its obligations under HII's guarantee for the US dollar notes. The notes are rated at the same level as Hanrui's Issuer Default Ratings due to the strong linkage between HII and Hanrui and because the keepwell and liquidity support deed and deed of equity interest purchase transfers the ultimate responsibility of payment to Hanrui. Fitch believes this signals a strong intention from Hanrui to ensure HII has sufficient funds to honour its debt obligations. Hanrui's ratings are credit-linked with, but are not equalised to, Fitch's assessment of Zhenjiang Municipality's credit profile. The link reflects strong oversight and supervision of Hanrui by the Zhenjiang municipal government, integration of multi-year funding for the company with the municipal budget and the strategic importance of Hanrui's public-sector construction projects and social housing construction to the municipality. Hanrui is classified as a credit-linked public-sector entity under Fitch's criteria. RATING SENSITIVITIES Any rating action on Hanrui will result in a similar rating action on the rated bond issued by Hanrui Overseas Investment Co., Ltd. Stronger or more explicit support from Zhenjiang Municipality may trigger positive rating action on Hanrui. Significant changes to Hanrui's strategic importance to the municipality, dilution of the municipality's shareholding or lower explicit and implicit municipality support could lead to a wider rating gap between Hanrui and Zhenjiang. An upgrade of Fitch's internal credit view on Zhenjiang Municipality may trigger positive rating action on Hanrui. Weaker fiscal performance or higher municipality debt could lead to a lowering of Fitch's internal assessment of Zhenjiang Municipality's creditworthiness and may trigger negative rating action on Hanrui. * Ruihua's Suspension in Interbank Market Has Minimal Impact ------------------------------------------------------------ The Chinese interbank market regulator's suspension of Ruihua Certified Public Accounts (Ruihua) has minimal impact on Fitch- rated corporates' access to the domestic debt market in 2016 as financial statements audited by Ruihua for 2015 and previous years will still stand, Fitch Ratings says. Corporates should have sufficient time to switch auditors to complete their 2016 annual audits for interbank issuance in 2017. On June 16, 2016, the National Association of Financial Market Institutional Investors (NAFMII), the regulator of China's interbank bond market, said Ruihua would be barred from providing services to the interbank market for one year. This was the penalty for Ruihua's failure to provide working documents for Shanghai Yunfeng (Group) Co., Ltd (Yunfeng) as part of its annual audit for Green Land Holding Group Company Limited (Greenland, BB+/Negative). Yunfeng is a 20.5%-owned associate of Greenland. Both Greenland and Yunfeng have bonds outstanding in the interbank market. Fitch said, "Based on communication with industry participants, it is our understanding that corporates can still use annual financial statements audited by Ruihua for 2015 and earlier to issue bonds in the interbank market until 30 April 2017, the deadline for publishing Chinese corporates' annual financial statements for 2016. Ruihua needs to issue a written statement confirming that the historical audited statements reflect the issuer's true financial positon. The underwriter, legal counsel, and domestic rating agency involved in the bond issuance also need to issue similar written statements." Fitch said, "However, issuers will need to present 2016 annual financial statements audited by a different auditor when they issue interbank bonds after 30 April 2017. We believe corporates have sufficient time to switch auditors to complete the audit." In addition, NAFMII's suspension does not affect corporates' access to the exchange corporate bond market, which is regulated by the China Securities Regulatory Commission (CSRC). Over 90% China's domestic bond issuance comes from interbank bond market, with the rest from the exchange bond market. Ruihua is a Chinese auditor for the following Fitch-rated corporates: -- Greenland Holding Group Company Limited (BB+/Negative) -- China Southern Power Grid Co., Ltd (A+/Stable) -- Anhui Transportation Holding Group Company Limited (BBB+/Stable) -- Beijing Energy Investment Holding Co., Ltd (A+/Stable) ================ H O N G K O N G ================ TITAN PETROCHEMICALS: Trading Resumes After 4-year Halt ------------------------------------------------------- South China Morning Post reports that shares of debt-troubled petroleum fuel storage and logistics firm Titan Petrochemicals dived as trading resumed following four years of suspension, after it escaped liquidation upon restructuring over US$400 million of debt and clinching Singaporean oil rig giant Keppel as its business partner. SCMP relates that the Fujian-based firm, controlled by fuel and metals trader Guangdong Zhenrong Energy (GZE) -- a unit of state- owned commodities trader Zhuhai Zhenrong -- will resume its vessel building and maintenance business and diversify into oil rig production and offshore engineering, by cooperating with Keppel, the world's largest drilling rig maker by market share. "The board is pleased to announce that the winding up petition has been withdrawn and the joint and several provisional liquidators have been discharged at midnight on [Thursday, July 14]," Titan said in a statement on July 15, SCMP relays. Withdrawal of the petition, completion of various debt restructuring agreements, various shares subscription deals and an internal control review indicating no material deficiency are among the conditions for trading to resume, according to SCMP. SCMP notes that after completion of a one share-for-every three existing shares open offer at 10 HK cents a share that raised some HK$259 million, the company is now 64.7 per cent owned by GZE. Titan shares traded at 9.8 HK cents at 10:56 a.m., July 15, slightly below the open offer price, and 53.3 per cent below the last trading price of 21 cents before trading was halted in June 2012 pending the restructuring, notes the report. According to SCMP, holders of its various debt instruments together have a 6.5 per cent stake as a result of a debt-to- shares deal as part of the debt restructuring exercise, and Shanghai-based Chang Xin Asset Management owns 8.5 per cent of the firm. After completing the restructuring, Titan said it would reactivate the shipbuilding and repair business at its mothballed yard in Quanzhou, Fujian, and expand into offshore and marine engineering services, the report relates. The latter involves the construction, repair, conversion and upgrading of oil rigs and other support vessels used in offshore oil and gas drilling. SCMP says Titan signed a long-term cooperation agreement two years ago with Keppel, which agreed to send managers to the shipyard to operate it, subject to Titan's successful restructuring and the resumption of trading in its shares. SCMP notes that under the deal, Keppel will earn management fees, turnover-based fees and bonuses, and would be granted bonds convertible into a 9.9 per cent equity stake in Titan. Hong Kong-listed Titan, a fuel-trading and logistics firm, was founded in 2002 by Fujian businessman Tsoi Tin-chun. It expanded aggressively by buying tankers, building fuel storage tank farms and a shipyard, after selling US$400 million of high-yield bonds in 2005. According to the report, the global financial crisis and the oil trading and shipping downturn forced Titan to restructure its debt in 2010 and sell the shipyard for HK$1.8 billion. But the buyer failed to pay half the amount citing problems with the shipyard, causing Titan to default on its debt again. About Titan Petrochemicals Headquartered in Hong Kong, Titan Petrochemicals Group Limited (HKG:1192) -- http://www.petrotitan.com/-- is an investment holding. The Company is engaged in supply of oil products and provision of bunker refueling services; provision of logistic services, including oil storage and oil transportation, and shipbuilding and commencement of building of ship repair facilities. The Company operates in three business segments: supply of oil products and provision of bunker refueling services; provision of logistic services (including oil transportation and oil storage), and shipbuilding. Titan's wholly owned subsidiaries include Titan Oil (Asia) Ltd., Titan FSU Investment Limited, Titan Oil Storage Investment Limited, Titan Oil Trading (Asia) Limited, Titan Bunkering Investment Limited, Harbour Sky Investments Limited and Titan Shipyard Holdings Limited. ========= I N D I A ========= ASIAN SEALING: CRISIL Lowers Rating on INR70MM LT Loan to 'B' ------------------------------------------------------------- CRISIL has downgraded its ratings on the bank facilities of Asian Sealing Products Private Limited (ASPPL) to 'CRISIL B/Stable/CRISIL A4' from 'CRISIL BB-/Stable/CRISIL A4+. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Long Term Loan 70 CRISIL B/Stable (Downgraded from 'CRISIL BB-/Stable') Packing Credit 80 CRISIL A4 (Downgraded from 'CRISIL A4+') The downgrade reflects deterioration in the business and financial risk profiles, and liquidity, of the company due to decline in revenue and operating margin as a result of the downturn in the global oil and gas industry. The downgrade also factors in continuing exposure to project risks related to a large capital expenditure (capex) programme being undertaken. However, debt obligations are expected to be met by unsecured loans from promoters over the medium term. The ratings reflect a modest scale and working capital-intensive nature of operations and a below-average financial risk profile. These ratings weaknesses are partially offset by the extensive experience of the promoters in the industrial gaskets segment and support received from them. Outlook: Stable CRISIL believes ASPPL 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 a significant increase in scale of operations, while profitability improves, leading to a better capital structure. The outlook may be revised to 'Negative' in case of deterioration in the financial risk profile, most likely because of increase in debt-funded capex, or low cash accrual. ASPPL was originally set up in 2009 as a proprietorship firm, which was reconstituted as a private Limited company in 2011. The company manufactures industrial gaskets used in the oil and gas industry and in other industrial projects. Its product profile primarily consists of ring-joint gaskets and other related gasket products such as graphite gaskets, teflon gaskets and non- asbestos gaskets. ASPPL is based in Chennai and managed by Mr. Venkatakrishnan Net profit was INR6 million on net sales of INR527 million for 2014-15 (refers to financial year, April 1 to March 31), against net profit of INR8 million on net sales of INR395 million for fiscal 2014. Turnover is estimated at INR390 million for 2015-16. ASTER PRIVATE: Ind-Ra Suspends 'IND D' Long-Term Issuer Rating ---------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated Aster Private Limited's (Aster) 'IND D' Long-Term Issuer Rating to the suspended category. This rating will now appear as 'IND D(suspended)' on the agency's website. The ratings have been migrated to the suspended category due to lack of adequate information. Ind-Ra will no longer provide ratings or analytical coverage for Aster. The ratings will remain in the suspended category for a period of six months and be withdrawn at the end of that period. However, in the event the issuer starts furnishing information during the six-month period, the ratings could be reinstated and will be communicated through a rating action commentary Aster's ratings: -- Long-Term Issuer Rating: migrated to 'IND D(Suspended)' from 'IND D' -- INR2,250 million of fund-based working capital limits: migrated to Long-Term/Short-Term 'IND D(Suspended)' from 'IND D' -- INR11,039.5 million non-fund-based working capital limits: migrated to Short-Term 'IND D(Suspended)' from 'IND D' BALA SUNDRI: ICRA Suspends 'B/A4' Rating on INR10cr Bank Loan ------------------------------------------------------------- ICRA has suspended the long term rating of [ICRA] B and the short term rating of [ICRA] A4 assigned to the INR10.00 crore bank facilities of Bala Sundri Foods. The suspension follows ICRA's inability to carry out rating surveillance in the absence of requisite information from the company. According to its suspension policy, ICRA may suspend any rating outstanding if in its opinion there is insufficient information to assess such rating during the surveillance exercise. BHARAT AGRO: ICRA Assigns 'B+' Rating to INR30cr Proposed Loan -------------------------------------------------------------- ICRA has assigned its long-term rating of [ICRA]B+ to the INR30.00 crore proposed bank facilities of Bharat Agro Impex. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Proposed Limits 30.00 [ICRA]B+; Assigned ICRA's rating centrally factors in the execution and implementation risks that are inherent to under construction projects and the high debt-equity ratio for the project, that reduces the firm's financial flexibility. Moreover, the rating is constrained by the high intensity of competition in the rice milling industry that limits the company's profitability, along with agro-climatic risks that can affect the availability of semi processed rice in adverse weather conditions. ICRA also takes note of the partnership constitution of the firm, which exposes it to risks of capital withdrawal and of dissolution, among others. The rating, however, favourably takes into account the benefits BAI derives from being a part of the Bharat Group of Taraori (Karnal), with promoters who have rich experience in the rice milling business, which ensures well-established relationships with several customers and suppliers. Furthermore, ICRA draws comfort from the proximity of the mill to a major rice milling area, resulting in easy availability of semi processed rice. Going forward, BAI's ability to achieve commercial production as per schedule and achieve desired operating parameters will be the key rating sensitivities. BAI was established in 2015 for the production of semi processed Basmati rice through sortex machineries. The company's active promoters are Mr. Naresh Gupta and Mr. Rakesh Gupta. With a sorting capacity of 16 tonnes per hour (TPH), the firm's sorting machinery is expected to commence commercial production from December 2016. In FY2016, BAI primarily undertook trading of rice. BAI is a part of the Taraori-based Bharat Group from Haryana, which is engaged in the rice milling business and dry/liquid glucose manufacturing. The group has well-established relationships with several customers in the Middle East. The total project cost estimated at ~INR8.60 crore is being funded through a term loan of INR5.25 crore, whose sanction is pending from the bank, and the rest ~INR3.35 crore, to be infused by the promoters. Recent Results In FY2016, the firm reported a profit after tax of INR0.38 crore on an operating income of INR8.34 crore. BHUSHAN AUTOMOBILES: CRISIL Reaffirms B+ Rating on INR74MM Loan --------------------------------------------------------------- CRISIL's rating on the long-term bank facilities of Bhushan Automobiles Private LimitedBhushan Automobiles Pvt Ltd (BAPL) continues to reflect limited bargaining power of the company with its principal, Escorts Ltd (Escorts), exposure to intense competition in the automotive dealership industry, and below- average financial risk profile. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 74 CRISIL B+/Stable (Reaffirmed) Proposed Long Term Bank Loan Facility 10 CRISIL B+/Stable (Reaffirmed) These rating weaknesses are partially offset by an established relationship with the principal and extensive industry experience of promoters. Outlook: Stable CRISIL believes BAPL will continue to benefit over the medium term from its established relationship with its principal. The outlook may be revised to 'Positive' in case of improvement in the financial risk profile, supported by equity infusion by promoters or a higher operating margin leading to large cash accrual. The outlook may be revised to 'Negative' in case of a significant slowdown in revenue, or large, debt-funded capital expenditure, resulting in deterioration in the financial risk profile. BAPL was set up in 2005, promoted by Mr. Bhushan Kumar and his family members. The company is a distributor of Escorts farm vehicles in Bihar. CHIRAKEKAREN GLASS: CRISIL Reaffirms B- Rating on INR60MM Loan -------------------------------------------------------------- CRISIL's ratings on the bank facilities of Chirakekaren Glass House Private Limited (CGHPL) continue to reflect CGHPL's large working capital requirements and its modest scale of operations in the fragmented glass and plywood trading segments. These rating weaknesses are partially offset by the extensive industry experience of the promoters. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 60 CRISIL B-/Stable (Reaffirmed) Long Term Loan 40 CRISIL B-/Stable (Reaffirmed) Outlook: Stable CRISIL believes that CGHPL will continue to benefit from its established relations with the suppliers and customers, and the promoters' extensive industry experience. The outlook may be revised to 'Positive' if the company reports significant growth in its revenues and profitability, resulting in sizeable cash accruals, thereby improving its liquidity. Conversely, the outlook may be revised to 'Negative' if CGHPL reports lower than expected revenues or profitability, or if it undertakes large debt-funded capital expenditure thereby weakening its financial risk profile. CGHPL, reconstituted as a private company in 2005, is engaged in the dealership and distribution of glass, plywood, and hardware fittings such as bathroom fittings, adhesives and other modern sanitary items. CGHPL's day-to-day operations are managed by Mr. Sunny Anto Chirakekaren along with his brothers Mr. Ceejo Joy Chirakekaren, Mr. Sinto Joy Chirakekaren, and Mr. Lenish Chirakekaren. EL-TE MARINE: CRISIL Reaffirms B+ Rating on INR200MM Packing Loan ----------------------------------------------------------------- CRISIL has assigned its 'CRISIL B+/Stable' rating to the long term bank facilities of El-Te Marine Products (ELTE) while reaffirming the short term ratings at 'CRISIL A4'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Packing Credit 200 CRISIL B+/Stable (Reaffirmed) Post Shipment Credit 140 CRISIL A4 (Reaffirmed) CRISIL's ratings on the bank facilities of EL-TE Marine Products (ELTE) reflect the firm's below-average financial risk profile because of aggressive capital structure, and modest scale of operations in the intensely competitive seafood industry. These weaknesses are partially offset by extensive industry experience of its proprietor. Outlook: Stable CRISIL believes ELTE will continue to benefit over the medium term from the extensive industry experience of its proprietor. The outlook may be revised to 'Positive' if significant and sustained increase in revenue and profitability leads to improvement in financial risk profile. Conversely, the outlook may be revised to 'Negative' if financial risk profile deteriorates because of decline in cash accrual, or large debt- funded capital expenditure, or sizeable capital withdrawal. ELTE, set up in Alappuzha, Kerala, in 2007, exports frozen shrimp and squids. Its daily operations are managed by proprietor Mr. Primal Thomas. G M COT FIBERS: CRISIL Reaffirms B+ Rating on INR50MM Cash Loan --------------------------------------------------------------- CRISIL rating on the bank facilities of G M Cot Fibers (GMCF)'s continues to reflect its initial stage of operations, and intense competition in the segment. These weaknesses are partially offset by its promoters' extensive experience in the cotton industry. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 50 CRISIL B+/Stable (Reaffirmed) Term Loan 28 CRISIL B+/Stable (Reaffirmed) Outlook: Stable CRISIL believes that GMCF will continue to benefit from its promoters' extensive industry experience. The outlook may be revised to 'Positive' if revenue or profitability increases, leading to improved financial risk profile and liquidity. Conversely, the outlook may be revised to 'Negative' if low revenue or profitability or stretched working capital cycle weaken liquidity. Update The firm achieved revenues of INR 303 million in 2015-16 (refer to financial year ending 31st March) against INR 350 million in 2014-15 impacted mainly due to the ongoing volatility in cotton prices. Further, with low value addition and conversion nature of business; the firm's operating margins continue to remain low at 3.5 to 4.0 per cent. CRISIL believes that the firm's scale of operations will continue to remain constrained on account of subdued business environment and demand. GMCF has average financial risk reflected by low networth along with high interest expense leading to weak interest coverage of 1.3 to 1.5 times continues to constrain the firm's liquidity profile. With low accretion to reserves, absence of equity infusion plans along with sustained dependence on external borrowings; the firm's financial profile is expected to continue to remain at similar level over the medium term. GMCF is expected to generate sufficient cash accruals to meet repayment obligations of INR4.5 million over medium term. GMCF was set up in 2014 as a partnership firm by Mr. Govind Agarwal and his nephews, Mr. Pratish Agarwal and Mr. Ashish Agarwal. The firm operates a cotton ginning unit in Sendhwa (Madhya Pradesh). G S DEVELOPERS: Ind-Ra Assigns 'IND B' Long-Term Issuer Rating ---------------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned G S Developers & Contractors Private Limited (GSDC) a Long-Term Issuer Rating of 'IND B' with Outlook Stable. A full list of rating actions is at the end of this commentary. KEY RATING DRIVERS The ratings are constrained by GSDC's small and declining scale of operations, weak credit metrics and low profitability margins. In FY15, the overall revenue stood at INR464.33 million (FY14: INR555.19 million; FY13: INR1,463.44 million), interest coverage (operating EBITDA/gross interest expense) was 0.07x, net financial leverage (total Ind-Ra adjusted net debt/operating EBITDAR) was 80.59x, and EBITDA margins were 0.53%. The ratings are also constrained by the company's elongated working capital cycle of 95 days in FY15. The ratings are supported by the company's promoter's experience and company's established track record of more than three decades in the civil construction business. RATING SENSITIVITIES Negative: A significant decline in profitability leading to deterioration in the credit profile of the company will be negative for the ratings. Positive: A significant improvement in overall revenue while maintaining the credit profile and working capital cycle will be positive for the ratings. COMPANY PROFILE Incorporated in 1987 as a private limited company, GSDC executes tender-based civil construction orders for educational institutions, corporates, and real estate builders. The company executes projects across India. In FY16, the company's management restructured its business strategies by repaying term loans and executing higher margins projects, resulting in an improvement in the credit profile. Interest coverage was 2.90x, net financial leverage was 0.74x and EBITDA margin was 22.27% in FY16 according to the provisional financial statement. GSDC's Ratings: -- Long-Term Issuer Rating: assigned 'IND B'; Outlook Stable -- INR55.00 million fund-based working capital limit: assigned 'IND B'/Stable/'IND A4' -- INR72.50 million non-fund-based limit: assigned 'IND A4' G.B. INDUSTRIES: CRISIL Reaffirms B+ Rating on INR69MM Cash Loan ---------------------------------------------------------------- CRISIL's rating on the long-term bank loan facilities of G.B. Industries (GB) continues to reflect a small scale of operations in a fragmented and competitive business, and low profitability. These rating weaknesses are partially offset by the extensive experience of the partners of the firm in processing of rice and dal. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 69 CRISIL B+/Stable (Reaffirmed) Rupee Term Loan 10.6 CRISIL B+/Stable (Reaffirmed) Outlook: Stable CRISIL believes GB will continue to benefit over the medium term from the extensive industry experience of its partners. The outlook may be revised to 'Positive' in case of a substantial increase in revenue and profitability, leading to a better business risk profile. Conversely, the outlook may be revised to 'Negative' in case of low cash accrual, a substantial increase in working capital requirement, or large, debt-funded capital expenditure, resulting in weakening of liquidity. Originally established in 1991, GB was taken over by Mr. Hukum Chand Agarwal and Mr. Sanjay Agarwal in 2003. The firm processes rice and mills dal in Lakhimpur, Uttar Pradesh. It also trades in other agro-commodities. GEO AQUATIC: CRISIL Reaffirms B+ Rating on INR49.6MM Bill Disc. --------------------------------------------------------------- CRISIL's ratings on the bank facilities of Geo Aquatic Products Private Limited (GAPPL) continues to reflect its modest scale of operations in the highly fragmented seafood industry. These rating weaknesses are partially offset by the experience of the promoters in the seafood industry. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bill Discounting 49.6 CRISIL B+/Stable (Reaffirmed) Packing Credit 20.0 CRISIL A4 (Reaffirmed) Term Loan 37.8 CRISIL B+/Stable (Reaffirmed) The rating also factors in the company's efficient working capital management and above-average financial risk profile marked by low gearing and above average debt protection metrics. Outlook: Stable CRISIL believes that GAPPL will benefit over the medium term from its promoters' extensive experience in the seafood business. The outlook may be revised to 'Positive' if the company significantly increases its scale of operations and profitability, leading to larger-than-expected cash accruals. Conversely, the outlook may be revised to 'Negative' if GAPPL records lower than expected accruals due to decline in profitability, or if it's financial risk profile deteriorates, most likely because substantial debt- funded capital expenditure or stretch in working capital requirements. GAPPL was incorporated in 1998, by Kerala based Mr. C.M. Ahammedkutty, the company is engaged in the business of processing and export of shrimp. The company essentially deals in Vannamei type of shrimps and the entire products are sold in the export market, mainly in Europe and Gulf countries. Its processing facility is located in located at Alappuzha (Kerala). GLENMARK PHARMACEUTICALS: Fitch Assigns 'BB' LT FC IDR ------------------------------------------------------ Fitch Ratings has assigned India-based Glenmark Pharmaceuticals Ltd (Glenmark) a Long-Term Foreign-Currency Issuer Default Rating (IDR) of 'BB'. The Outlook is Positive. Fitch has also assigned Glenmark's proposed Reg S notes an expected rating of 'BB(EXP)'. Glenmark's rating incorporates its geographically diversified profile, a demonstrated track record in regulatory compliance and its healthy product pipeline. Glenmark is smaller than other global generic drug makers, but it has achieved above-market growth rates in the US and India and benefits from its in-house R&D capabilities, which support its novel drug development programme and generic business. Glenmark's key shareholders as of 31 March 2016 include the founding Saldanha family with a 46.5% stake, Singapore's Aranda Investments (a subsidiary of Temasek Holdings (Private) Limited) with 3.99%, Oppenheimer Developing Markets Fund (2.66%) and government of Singapore (1.08%). The Positive Outlook reflects Fitch's expectation that Glenmark's financial profile will improve over the next one to two years, with healthy growth in revenue and operating income supported by launches of new products, especially the launch of a generic version of Ezetimibe, which is used to treat high cholesterol, in the financial year ending 31 March 2017 (FY17). However, this improvement will depend on the generation of free cash. Free cash generation in the past two fiscal years was constrained due to expansion capex (mostly for a new plant in the US), a larger working capital position and a high level of cash taxes. Fitch believes the improvement in free cash generation will depend on successful new product launches in the US and effective implementation of a tax optimisation strategy. KEY RATING DRIVERS Small but Diversified: Glenmark's revenue and operating EBITDAR are small compared with those of global majors, but the risk of its small size is counterbalanced by its good diversification in products and geographies. Scale and diversification are important for generic drug companies to maintain stable and durable margins. The company also enjoys a strong competitive position in its core therapy areas of dermatology and respiratory. Above-Market Growth: The company's revenue in the US rose by CAGR of 20% in FY12-FY16 while revenue in India increased by CAGR of 24% over the same period. Glenmark's share of total prescriptions filled in the competitive US market increased to 1.4% in FY16 from 0.9% in FY12, reflecting higher growth than the market. In India, sales increased 1.5x faster than the market average over FY12-16. Robust Domestic Position: Glenmark is the 12th-largest player by prescription share (17th largest by value) in the highly fragmented Indian market, with a market share of 2.1% in FY16. The Indian market is largely physician-driven and focused on branded generics. Pharmaceutical companies tend to compete through focused marketing efforts in certain therapies rather than using a volume-based strategy. Glenmark has strong market positions in its focus areas of dermatology (second largest), respiratory (sixth largest) and cardiovascular (eighth largest). The company has a nation-wide presence with a network of over 3,500 stockists and over 3,700 medical representatives. The company also aims to expand in the over-the-counter (OTC) segment. Strong Product Pipeline: Glenmark has a good track record, as reflected in the company's robust US growth, of launching new products to augment growth and to provide a wide range of products within each of its targeted therapy categories. The company's R&D unit received 24 abbreviated new drug application (ANDA) approvals (including tentative nods) from the US Food and Drug Administration (FDA) in FY16. The company has nearly 60 ANDAs in various stages of the approval process with the US FDA, 23 of which are Paragraph IV applications (implying with a challenge to existing patents) and several others where it has "first to file" status. Notably, Glenmark expects revenue from generic Ezetimibe, to account for almost 10% of sales in FY17, as it will enjoy a period of exclusivity associated with its "first to file" status following its launch in December 2016. Fitch expects new product launches, particularly in the US, to drive sales growth and support margins in the medium term. Strong Production Base: Glenmark has a strong record of maintaining compliance - the company has successfully cleared all inspections with major regulatory agencies (such as US FDA and the UK's Medicines and Healthcare products Regulatory Agency) over the years, leading to sustained business operations. This has also enhanced Glenmark's reputation and strengthened its brand equity. Stable Financial Profile: Glenmark's financial profile is supported by robust growth and moderate diversification in revenue, an average EBITDAR margin of around 19% in the last five fiscal years, moderate financial leverage (net adjusted debt/EBITDAR) of around 2.7x (after excluding INR3billion of cash in Venezuela) and a solid fixed-charge cover of 4.0x. Dividend payout has been modest for the last five years, ranging from 9% to 13% of net income. The company says the annual dividend payout is unlikely to exceed 15% of net income in the medium term. Capital Management Improves Maturity Profile: Glenmark has embarked on a significant debt refinancing programme to lengthen its existing debt maturity profile through the issuance of $US200m of convertible notes, completed in June 2016, and the proposed Reg S notes. On completion of the proposed Reg S issuance, the majority of the debt will be centralised at the parent company, thus reducing structural subordination risk. KEY ASSUMPTIONS Fitch's key assumptions within the rating case for Glenmark include: -- FY17 consolidated revenue to increase by about 24%, driven by generic Ezetimibe sales and growth in key markets -- Average EBITDAR margin of about 24% during FY17-FY19 -- Annual capex of INR7billion-8billion in FY17-FY19 -- Annual dividend payout in line with Glenmark's guidance of 10%-15% of net income RATING SENSITIVITIES Positive: Future developments that may, individually or collectively, lead to positive rating action include: -- Maintaining EBITDAR margin in excess of 21% while achieving the targeted revenue growth of about 24% in FY17 -- Sustained positive level of free cash flow Negative: Future developments that may, individually or collectively, lead to the Outlook being revised to Stable: -- Failure to maintain EBITDAR margin in excess of 21% and/or achieving its revenue growth target of about 24% in FY17 -- Failure to generate sustained positive free cash flow LIQUIDITY Glenmark has robust liquidity with cash balance at 31 March 2016 of INR5.6billion (excluding INR3.0billion of cash held in Venezuela) and projected cash flow from operations in FY17 of INR9.1billion, which are sufficient to fund capex and dividends in FY17. Further, Glenmark proposes to refinance debt maturing in FY17 and FY18 and fund capex through the issuance of $US200m (INR13.5billion) of convertible bonds due 2022 and proposed issue of Reg S fixed-rate notes. The convertible bonds and Reg S notes would serve to improve the average tenor of Glenmark's debt and enhance its liquidity. GOKUL STEELS: CRISIL Lowers Rating on INR65MM Cash Loan to 'D' -------------------------------------------------------------- CRISIL has downgraded its ratings on the bank facilities of Gokul Steels Private Limited (GSPL) to 'CRISIL D' from 'CRISIL B+/Stable. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 65 CRISIL D (Downgraded from 'CRISIL B+/Stable') Proposed Long Term 30.5 CRISIL D (Downgraded from Bank Loan Facility 'CRISIL B+/Stable') The rating downgrade reflects instances of delay by GSPL in servicing its debt. The rating reflects the small scale of GSPL's operations and exposure to risk related to fluctuation in iron and steel prices. These rating weaknesses are partially offset by GSPL's promoter's extensive experience in the iron and steel industry. GSPL, promoted by the Bihar-based Mr. Vivek Kasera, recently set up a steel structural rolling mill in Fatwa, Patna District. The mill commenced operations in May 2014. The Kasera family does not have any prior experience of operating a rolling mill. However, the family has extensive experience of over two decades in trading in iron and steel products. HEATH VIEW: ICRA Assigns 'B' Rating to INR12.0cr Term Loan ---------------------------------------------------------- ICRA has assigned the long term rating of [ICRA]B for INR15.0 crore long term bank facilities of Heath View Holiday Resorts Limited (HVHRL). ICRA has also assigned the short term rating of [ICRA]A4 for INR0.5 crore short term bank facilities of HVHRL. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund based limits- Overdraft 3.0 [ICRA]B assigned Fund based limits- Term Loans 12.0 [ICRA]B assigned Non fund based limits- Bank Guarantee 0.5 [ICRA]A4 assigned The ratings assigned take into account the Heath View Holiday Resorts Limited's (HVHRL) long-term association with association with Berggruen Hotels Private Limited (BHPL), which has experienced professionals operating hotels under the Keys brand, which renders brand recognition and marketing support to the company. ICRA takes into account the favourable location of the property in the tourist hub of Mahabaleshwar and also the high entry barriers for new entrants due to restrictions in the region for construction of new hotel property, which provides competitive advantage to the company. The ratings, however, are constrained by the single asset concentration risk for the company as it is operating a single hotel in Mahabaleshwar, which exposes it to any adverse demand scenario in the region. The ratings also take note of low net profitability for the hotel with significant depreciation and interest costs for the company, though fiscal incentives in the form of luxury tax exemptions and reduced electricity tariffs are likely to render some support to profit metrics. The ratings also factor in the company's leveraged capital structure and weak coverage ratio. Also, moderate occupancy levels with exposure to a single asset given the cyclical nature of tourism industry remain a concern for the company. ICRA expects HVHRL's occupancy levels and Average Room Rates (ARR) to improve gradually resulting in moderate growth in operating income; however any deterioration in occupancy levels and ARR will be a concern for the company. The company's capital structure is expected to remain leveraged in near term in wake of significant debt levels; however infusion of significant equity may result in moderation of capital structure. Incorporated in 1993, Heath View Holiday Resorts Limited (HVHRL) was established with the purpose of construction and operation of a hotel at Mahabaleshwar. The company was established by the Patel Group and was taken over by Evershine Builders in 2004. Evershine Group then commenced construction of the hotel property, which was completed by May 2010. Meanwhile, a hotel operating agreement was signed between HVHRL and Berggruen Hotels Private Limited (BHPL) assigning the rights of management and operations of hotel to BHPL under the Keys brand name. The hotel commenced operations in October 2010. Currently, the company is operating an 86 room four star hotel property at Mahabaleshwar by the name of Evershine Keys Prima Resort. Recent Results: HVHRL reported a profit after tax of INR0.5 crore on an operating income of INR18.2 crore for the year ending March 31, 2015 (audited) and net losses of INR0.3 crore on an operating income of INR15.8 crore as on March 31, 2014 (audited). HEM MOTOR: CRISIL Suspends B- Rating on INR120MM Channel Loan ------------------------------------------------------------- CRISIL has suspended its rating on the bank facilities of Hem Motor Division Private Limited (HMDPL). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 42.5 CRISIL B-/Stable Channel Financing 120.0 CRISIL B-/Stable The suspension of rating is on account of non-cooperation by HMDPL with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, HMDPL is yet to provide adequate information to enable CRISIL to assess HMDPL'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 1999, HMDPL has been an authorised dealer of the entire range of passenger vehicles (except Jaguar and Land Rover) of TML since 2006 for Satara (Maharashtra). HMDPL is a part of the Hem group of companies promoted by Mr. Bipin Shaha and his family. INOX WORLD: CRISIL Assigns B+ Rating to INR230MM LT Loan -------------------------------------------------------- CRISIL has revoked the suspension of its ratings on the bank facilities of Inox World Industries Private Limited (Inox; part of the Worldfa group) and has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to Inox's bank facilities. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 2 CRISIL A4 (Assigned; Suspension Revoked) Long Term Loan 230 CRISIL B+/Stable (Assigned; Suspension Revoked) Packing Credit 62.5 CRISIL A4 (Assigned; Suspension Revoked) Proposed Long Term 20.0 CRISIL B+/Stable (Assigned; Bank Loan Facility Suspension Revoked) Post Shipment Credit 20.0 CRISIL A4 (Assigned; Suspension Revoked) The rating was 'Suspended' by CRISIL vide the Rating Rationale dated December 28, 2015 since Inox had not provided necessary information required to take the rating review. Inox has now shared the requisite information enabling CRISIL to assign a rating on its bank facilities. The rating reflects the Worldfa group's promoters' extensive experience in the stainless steel (SS) products industry, its established relationships with its customers, and the financial support the group gets from the promoters. These rating strengths are partially offset by the group's weak financial risk profile marked by high gearing and weak debt protection metrics, modest scale of operations, and large working capital requirements, and susceptibility of the group's operating margin to raw material price volatility and to intense competition. The rating also reflects Inox's nascent stage of operations. For arriving at its ratings, CRISIL has combined the business and financial risk profiles of Inox, Worldfa Exports Pvt Ltd (Worldfa) and Trishul Exotic Pvt Ltd (Trishul). This is because all the three companies, together referred to as the Worldfa group, are promoted by the same family and have common management, and have operational and business synergies. Outlook: Stable CRISIL believes the Worldfa group will benefit over the medium term from the extensive experience of the promoters. The outlook may be revised to 'Positive' if significant improvement in scale of operations and profitability leads to higher-than-expected cash accrual, thereby improving financial risk profile. Conversely, the outlook may be revised to 'Negative' if large working capital requirement or capital expenditure, constrains financial risk profile, particularly liquidity. The Worldfa group, promoted by brothers, Mr. Pramod Kumar Gupta and Mr. Ram Babu Gupta and their wives, manufactures stainless steel (SS) products, including utensils and bathroom accessories. INOX was set up in 2012 by Mr. Ram Babu Gupta and Mr Pramod Gupta. It started commercial operations in 2015 and is in the same line of business as its group companies. Worldfa was set up in 1986 as a proprietorship firm and in 2004, was converted to a private limited company. Mr. Pramod Kumar Gupta and Mrs. Kalpana Gupta, wife of Mr. Ram Babu Gupta are the directors in the company. The company derives its revenue entirely from sale of SS products to USA, Europe, and the Middle East. Trishul was set up in 1986 as a proprietorship firm and in 2003, was converted to a private limited company. Mr. Ram Babu Gupta and Mrs. Nirmal Gupta, wife of Mr. Pramod Kumar Gupta are the directors. J.R.R. CONSTRUCTION: ICRA Suspends B Rating on INR5.6cr Loan ------------------------------------------------------------ ICRA has suspended the long term rating of [ICRA] B on INR5.60 crore bank lines of J.R.R. Construction (P) Limited. The suspension follows ICRA's inability to carry out a rating surveillance in the absence of the requisite information from the company. JYOTI STEEL: CRISIL Lowers Rating on INR35.2MM Cash Loan to B+ -------------------------------------------------------------- CRISIL has downgraded its rating on the bank facilities of Jyoti Steel Industries (JSI) to 'CRISIL B+/Stable/CRISIL A4' from 'CRISIL BB-/Stable/CRISIL A4+'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 20 CRISIL B+/Stable (Downgraded from 'CRISIL BB-/Stable') Letter of Credit 107.3 CRISIL A4 (Downgraded from 'CRISIL A4+') Packing Credit 107.5 CRISIL A4 (Downgraded from 'CRISIL A4+') Term Loan 35.2 CRISIL B+/Stable (Downgraded from 'CRISIL BB-/Stable') The downgrade reflects stretch in JSI's liquidity, due to a stretched working capital cycle. Delay in receivables from government authorities led to high utilisation of the bank limit for 12 months ended March 2016. Further the company has also incurred capital expenditure of around INR 76 million over last 2 years ended 2015-16; 40 per cent of which was funded by internal accruals which has weakened JSL's liquidity further. The ratings continue to reflect the average financial risk profile, marked by modest networth and average debt-protection metrics, despite the moderate gearing and scale of operations. These weaknesses are partially offset by extensive industry experience and funding support of promoters. Outlook: Stable CRISIL believes the firm will continue to benefit from the extensive industry experience of promoters. The outlook may be revised to 'Positive' if significant increase in scale of operations and profitability leads to higher cash accrual and improves working capital management. The outlook may be revised to 'Negative' if lower-than expected cash accrual, stretch in the working capital requirement or debt-funded capital expenditure, weakens liquidity. The firm, established as a partnership concern in 1973, manufactures stainless steel and mild steel long products, which are mainly exported to Latin America, Europe, Africa, Middle East Asia and South East Asia. Two manufacturing facilities, with installed capacities of 19,000 tonnes per annum (tpa) each, are located at Dahisar (Mumbai) and Khopoli (Maharashtra). Mr. Pankaj Chadha and his brother Mr. Manoj Chadha are promoters of the firm. KBC INFRASTRUCTURES: ICRA Suspends B+ Rating on INR7.50cr Loan -------------------------------------------------------------- ICRA has suspended the long term rating of [ICRA]B+ assigned to the INR7.50 crore fund based limits and INR2.50 crore non fund based limits of KBC Infrastructures Private Limited. The suspension follows ICRA's inability to carry out a rating surveillance in the absence of the requisite information from the company. KBC Infrastructures Private Limited (KBCIPL) is a Guntur based special class civil contractor involved in executing civil works orders for road and bridge constructions. The company, started as a partnership firm, was converted into a private limited company in 2007. The company also has a ready mix batching plant and a stone crusher unit, operational from September 2012, at Perecherla, 10 kms away from Guntur, AP. The present capacity of the batching plant is 3500 cubic metre per month while that of the crusher unit is 200 TPH (tonnes per hour). KBCIPL is promoted by Mr Kanneganti Butchaiah who has an experience of more than 2 decades in the civil construction industry. MADURAI TUTICORIN: ICRA Reaffirms 'D' Rating on INR577.38cr Loan ---------------------------------------------------------------- ICRA has reaffirmed the long-term rating assigned to the INR577.38 crore (INR598.00 crore earlier) term loans of Madurai Tuticorin Expressways Limited (MTEL) at [ICRA]D. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Term Loans 577.38 [ICRA]D Reaffirmed The rating reaffirmation takes into account continued delays in repayment of debt obligations, as MTEL's toll collections have been significantly below expectations on account of weak traffic flow even though the toll road is a key feeder route for Tuticorin port. Although the company had gone for debt restructuring in December 2012, the continued under performance of traffic has constrained the liquidity of MTEL. Since COD, the project stretch suffered due to toll leakages at three locations. MTEL was able to plug leakages at some of these locations resulting in pick up in traffic volumes from Q4 FY 15 onwards. Traffic grew by 13% in PCU terms during FY2016 primarily driven by significant rise in multi-axle vehicular movement along the project stretch. Owing to low toll collections, major maintenance reserve could not be created, as a result MTEL would be required to raise additional debt for major maintenance which falls due in the current year. Going forward, ramp up in traffic volumes thereby increase in toll collections and timely debt servicing will be the key rating sensitivities. MTEL is a special purpose vehicle (SPV) promoted by Madhucon Group3 (87.77%) and Global Investment Trust Limited (12.23%) to improve and widen a 128.15 km stretch on National Highway (NH) - 45B between Km 138/800 and 264/500, connecting the cities of Madurai & Tuticorin in the State of Tamil Nadu. The project has been awarded by National Highway Authority of India (NHAI) on Build-Operate-Toll (BOT) (Toll) basis, with a concession period of 20 years starting July 2006.The scheduled Commercial Operations Date (COD) of the project was January 2010; however, after a delay of more than 16 months, tolling has started in July 2011. The project road is a key arterial route connecting Tuticorin to Madurai and the rest of India. The only other highway that connects Tuticorin is NH-7A, which goes towards Tirunelveli, & southern Tamil Nadu. MAGUS METALS: ICRA Suspends B+ Rating on INR9.0cr Bank Loan ----------------------------------------------------------- ICRA has suspended rating of [ICRA]B+ assigned to the INR9.00 crore bank facilities of Magus Metals Private Limited. The suspension follows ICRA's inability to carry out a rating surveillance in the absence of the requisite information from the company. MEHTA & ASSOCIATES: ICRA Cuts Rating on INR8.0cr Loan to 'B' ------------------------------------------------------------ ICRA has revised the long term rating assigned to the INR12.00 crore bank facilities of Mehta & Associates Fire Protection Systems Private Limited from [ICRA]B+ to [ICRA]B. ICRA has reaffirmed the short term rating assigned to the INR2.25 crore short-term non-fund based facilities of MAFPSPL at [ICRA]A4. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Cash Credit 4.00 Revised to [ICRA]B from [ICRA]B+ Bank guarantee 8.00 Revised to [ICRA]B from [ICRA]B+ Non-fund Based, 2.25 [ICRA]A4 reaffirmed Short-term facilities Rating Rationale The ratings revision takes into account the weak financial risk profile of the company, characterised by revenue de-growth in FY2016, leveraged capital structure and weak coverage indicators. ICRA notes the significantly increased working capital intensity in FY2016 mainly owing to elongated receivables. The ratings continue to be constrained by the high customer concentration risks, with BHEL generating 37% of the revenues in FY2016, as well as company's high dependence on projects from the power sector making it vulnerable to the performance of that sector alone. The ratings also take note of the impact of the on-site constraints of end-customers on the company's growth in the last three fiscal years. The ratings however, continue to favourably consider the established track record of the company in the fire protection systems industry and its reputed clientele developed over the years. Going forward, the operating income of the company is expected to moderate, given the slow execution pace of projects noticed in the past, coupled with moderate orders in hand. The ability of the company to improve its liquidity position by improving its receivables position, along with its ability to generate new contracts to scale up operations, will remain the key rating sensitivities. Incorporated in 1984, Mehta & Associates Fire Protection Systems Private Limited (MAFPS) is engaged in providing turnkey solutions for fire detection and protection systems. Its core business involves design, supply, and installation, testing and commissioning of fire detection and protection systems. The company has been in the fire protection business for more than three decades, and its clientele includes state electricity boards and other reputed entities such as NTPC Ltd., Larsen & Turbo Limited (L&T), and Bharat Heavy Electricals Limited (BHEL). The company is promoted and managed by the Mehta family. Recent Results For the year ended March 31, 2015, the company reported an operating income of INR20.53 crore and profit after tax of INR0.25 crore against operating income of INR20.83 crore and profit after tax of INR0.42 crore for the year ended March 31, 2014. For the year ended March 31, 2016, the company reported an operating income of INR13.01 crore and profit after tax of INR0.18 crore (as per provisional financials). MURLI COLD: ICRA Assigns B+ Rating to INR10cr Cash Loan ------------------------------------------------------- ICRA has assigned a long-term rating of [ICRA]B+ to the INR10- crore cash credit facilities of Murli Cold Storage Private Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based Limits- Cash Credit 10 [ICRA]B+ assigned The assigned rating takes into account the regulated nature of the cold storage industry and competition from the peers operating in the vicinity, limiting pricing flexibility. Besides, the company has a small scale of operations with a single cold storage unit, and it remains exposed to agro-climatic risks arising from dependence upon a single agro commodity - potato. The rating is also constrained by the company's weak financial risk profile as reflected by low net profit and cash accrual at an absolute level, subdued return on capital employed, high gearing and depressed debt coverage metrics in most of the recent years. ICRA also takes note of the company's vulnerability to delinquency risks associated with the loans extended to farmers and traders against potatoes stored by them in the cold storage, if potato prices fall significantly. The rating, however, derives support from the established track record of the company and the promoters' more than four decades of experience in the cold-storage business. Besides, the company's cold storage is located in Hooghly district of West Bengal, a region where a huge quantity of potato is produced. ICRA has also evaluated the consolidated business risk profile of Murli Cold Storage along with its group company Mahima Cold Storage Private Limited (Mahima Cold Storage, rated [ICRA]B+ and [ICRA]A4), which is also engaged in the same line of business and shares a common management. In ICRA's opinion, going forward, the company's ability to improve profitability while managing the occupancy levels would be the key rating sensitivity. Murli Cold Storage Private Limited (Murli Cold Storage) operates a potato cold storage facility at Boinchi in Hooghly district of West Bengal, with the current storage capacity of 241,836 quintal. Incorporated in 1976 by the Kolkata-based Agarwal family, the company commenced commercial operations in 1977 with an initial capacity of 38,000 quintal, which has been gradually raised to the current level. Another group company, Mahima Cold Storage Private Limited, runs a potato cold storage facility with the capacity of 149,664 quintal in Cooch Behar district of West Bengal. Recent Results The company reported a net profit of INR0.10 crore on an operating income of INR3.14 crore during FY2015 compared to a net profit of INR0.02 crore on an operating income of INR3.11 crore in FY2014. NANDA SALES: ICRA Lowers Rating on INR7.5cr Loan to B+ ------------------------------------------------------ ICRA has revised its long term rating earlier assigned to INR7.5 crore fund-based Nanda Sales Corporation (NSC) to [ICRA]B+ from [ICRA]BB- (Stable). Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based Facility 7.5 [ICRA]B+; (Revised) ICRA's rating revision takes into account NSC's stretched liquidity position pursuant to elongation in its receivable cycle which has resulted in sharp increase in working capital intensity from NWC/OI of 28% in FY2014 to 42% in FY 2015. NSC's margins have further remained under pressure (Operating margins declined from 4.91% in FY 2014 to 3.82% in FY2015) on account of weak demand outlook, the fragmented nature of the non-ferrous metals trading industry as well as the low value additive nature of the business, further NSC has also witnessed volumetric decline in FY2016. NSC's significant reliance on working capital borrowings and thin profitability has resulted in subdued debt coverage indicators as characterized by Debt/OPBDITA of 6.8 times as on March 31, 2015 as against 4.56 times as on March 31, 2014). ICRA's rating also factors in the firm's vulnerability to adverse movements in foreign exchange rates, in the absence of a hedging mechanism and the risk associated with the partnership constitution of the firm like withdrawal of capital, dissolution etc. However the rating favorably factors in the experience of the promoters in the non-ferrous metals trading business and their established client relationships resulting in repeat business. The ability of the firm to ramp up its scale of operations, improve its working capital cycle and debt coverage indicators will be the key rating sensitivities. Nandan Sales Corporation (NSC) is a registered partnership firm set up in April 1994 by three partners. The firm is engaged in import and trading of non-ferrous metals like Brass, Copper, Nickel, Tin, Zinc, etc. It undertakes segregation, melting and grading of imported non ferrous metals and after that selling the same to end users. The firm has its operating office in Mathura, Uttar Pradesh. Mr. Dina Nath Agrwal and Mr. Narendra Agrawal are the active partners and have more than two decades of experience in the trading industry. Recent Results In FY 2015, NSC registered an operating income (OI) of INR35.80 crore and a Net Profit of INR0.87 crore, as against an OI of INR39.80 crore, net profit of INR0.35 crore in the previous year. Further the company reported Operating Income of INR28.0 cr on provisional basis in FY 2016. NANDI PLASTICISERS: ICRA Suspends B+ Rating on INR8.0cr Loan ------------------------------------------------------------ ICRA has suspended [ICRA]B+ rating assigned to the INR5.00 crore fund based facilities and INR8.00 crore non-fund based facilities of Nandi Plasticisers and Pipes Industries. ICRA has also suspended [ICRA]A4 rating assigned to INR6.00 crore non-fund based facilities of NPPI. The suspension follows ICRA's inability to carry out a rating surveillance in the absence of the requisite information from the company. Nandi Plasticisers and Pipes Industries (NPPI) has been in the business of producing drippers and Sprinklers since 2002. The proprietor of the unit is Mr. S.P.Y. Reddy, B.E (Mechanical), who is a member of parliament from Nandyal. Mr. Reddy has 3-decade experience in various industrial activities in and is the Chairman of Nandi Group of Industries. NATURAL ORGANIC: CRISIL Reaffirms 'B' Rating on INR140MM Loan ------------------------------------------------------------- CRISIL's rating on the bank facilities of Natural Organic Farms (NOF) continues to reflect its below-average financial risk profile, with moderate net worth and below-average debt protection metrics; modest scale of operations, and exposure to risks relating to unfavourable changes in government policy. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 140.0 CRISIL B/Stable (Reaffirmed) Term Loan 9.2 CRISIL B/Stable (Reaffirmed) These weaknesses are partially offset by the proprietor's experience in the cotton ginning industry and the firm's proximity to the cotton-growing belt. Outlook: Stable CRISIL believes NOF will benefit from extensive experience of promoters and established relationships with customers, though the financial risk profile may remain constrained by large working capital requirements and moderate net worth. The outlook may be revised to 'Positive', if higher-than-expected accrual or infusion of funds by the proprietor strengthens the financial risk profile. Conversely, the outlook may be revised to 'Negative', if large working capital requirements or debt-funded capital expenditure programmes weaken the financial risk profile. NOF is a sole proprietorship that gins and presses cotton. Mr. Manjeet Chawla is the proprietor. The firm's ginning unit is at Kesinga (Kalahandi District, Odisha). NAVHARI FOOD: ICRA Reaffirms B+ Rating on INR7.0cr Cash Loan ------------------------------------------------------------ ICRA has reaffirmed its long term rating of [ICRA]B+ on the INR7.00 crore cash credit facility of Navhari Food Products (P) Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Cash Credit 7.00 [ICRA]B+; reaffirmed In arriving at the rating, ICRA has taken a consolidated view of the group concerns namely, NFPPL and Sun-Shine Food Products (SSFP - rated [ICRA] B+), as both the entities are in the same line of business and have common promoters, and customers. The rating reaffirmation takes into account the relatively modest scale of operations of the company, albeit the 28% (year-on-year) increase in the operating income (on a provisional basis) of the company in FY2016. The rating continues to be constrained by the company's weak financial profile as characterized by low profitability, given the intensely competitive nature of the industry and high gearing levels on account of the high working capital intensity of operations. The rating also considers the exposure of the company's profitability to any adverse fluctuations in raw material prices. However, the rating favourably takes into account the extensive experience and the long track record of the promoters in the sweets industry and company's strong regional presence in and around areas of Rajasthan. The company's ability to increase its scale of operations, improve its profitability and efficiently manage its working capital requirements will be the key rating sensitivities, going forward. Navhari Food Products Private Limited (NFPPL) was established in 1996 to manufacture traditional Indian sweets. The company is located in Bikaner, Rajasthan and is promoted by Mr. Hari Ram Agarwal and Mr. Madan Agarwal. The promoters are also associated with another group concern, Sun-Shine Food Products (SSFP) which was established in 1990 to manufacture traditional Indian snacks i.e. namkeen. The group sells its products under the brand 'Bhikharam Chandmal'. SSFP was established in 1990 to manufacture traditional Indian snacks i.e. namkeen. The firm is located in Bikaner, Rajasthan and has three partners- (i) Mr. Hari Ram Agarwal (ii) Mr. Jai Prakash Agarwal and (iii) Ms. Lalita Agarwal. Recent Results In FY2015, NFPPL recorded a net profit of INR0.15 crore on an operating income (OI) of INR35.15 crore, as against a net loss of INR0.03 crore on an OI of INR26.48 crore in the previous year. NIPSO POLYFABRIKS: ICRA Suspends C+/A4 Rating on INR7.72cr Loan --------------------------------------------------------------- ICRA has suspended its long-term rating of [ICRA]C+ and short- term rating of [ICRA] A4 assigned to the INR7.72 crore bank facilities of Nipso Polyfabriks Limited. The suspension follows ICRA's inability to carry out a rating surveillance in the absence of the requisite information from the company. POONAM ENTERPRISES: CRISIL Reaffirms 'B' Rating on INR100MM Loan ---------------------------------------------------------------- CRISIL ratings on long-term bank facility of Poonam Enterprises (PE) continues to reflect PE's modest scale of operations, susceptibility to volatility in foreign exchange rates, and large working capital requirements. The rating also factors in the firm's below-average financial risk profile marked by high total outside liabilities to tangible net worth ratio, modest net worth, and weak interest coverage ratio. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 100 CRISIL B/Stable (Reaffirmed) These rating weaknesses are partially offset by the extensive experience of PE's proprietor in the steel products trading business. Outlook: Stable CRISIL believes that PE will continue to benefit over the medium term from its proprietor's industry experience. The outlook may be revised to 'Positive' if the firm's financial risk profile improves, driven by increased cash accruals, efficient working capital management, or capital infusion by its proprietor. Conversely, the outlook may be revised to 'Negative' if the firm's financial risk profile, particularly liquidity, deteriorates because of low cash accruals or large working capital requirements. Established in 1982 as a proprietorship firm, PE trades in stainless steel pipes, flanges and fittings. The firm is based in Mumbai and its daily operations are managed by its proprietor Mr. Ravindra Angara. R.F. EXPORTS: CRISIL Assigns 'B' Rating to INR50MM Term Loan ------------------------------------------------------------ CRISIL has revoked the suspension of its ratings on the bank facilities of R.F. Exports (RFE) and has assigned its 'CRISIL B/Stable/CRISIL A4' ratings to these facilities. CRISIL had suspended the ratings on March 14, 2016, as RFE had not provided the necessary information for a rating review. The company has now shared the requisite information, enabling CRISIL to assign ratings to its bank facilities. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Foreign Discounting 150 CRISIL A4 (Assigned; Bill Purchase Suspension Revoked) Packing Credit 150 CRISIL A4 (Assigned; Suspension Revoked) Rupee Term Loan 50 CRISIL B/Stable (Assigned; Suspension Revoked) The ratings reflect RFE's weak financial risk profile marked by modest net worth and weak debt protection metrics. These weaknesses are partially offset by RFE's promoter's long standing experience in sea food industry. Outlook: Stable CRISIL believes that RFE will continue to benefit from promoters long standing industry experience. The outlook may be revised to 'Positive' in case of sustainable increase in the firm's scale of operations, and profitability or improvement in the capital structure on account of infusion of capital. Conversely, the outlook may be revised to 'Negative' if the company undertakes a large, debt-funded capital expenditure programme or in case of significant withdrawal of the capital, leading to deterioration in its capital structure, or if its revenues or margins decline steeply. Established in 1995 by Mr. F M Farook, R F Exports processes and exports various kinds of marine products like shrimps, squids, cuttlefish, octopus and fish to various countries like Japan, USA, and European countries. RAJ DEALERS: ICRA Suspends B+ Rating on INR6.0cr Bank Loan ---------------------------------------------------------- ICRA has suspended rating of [ICRA]B+ assigned to the INR6.00 crore bank facilities of Raj Dealers and distributors. The suspension follows ICRA's inability to carry out a rating surveillance in the absence of the requisite information from the company. Raj Dealers & Distributors promoted by Mr. Ramesh Kumar Bangur in 1971 is a sole proprietorship firm and is primarily engaged in trading and distribution of all types of papers and news print. The entity's warehouse facilities are located in Gazipur, Delhi- NCR. The entity procures paper from domestic market primarily from Paper mills like Andhra Paper Mills Private Limited & Century Pulp & Paper, and trades it in domestic market to book sellers, corporate entities and retailers. RAMESH CHANDRA: Ind-Ra Withdraws LT 'Provisional IND B+' Ratings ---------------------------------------------------------------- India Ratings and Research (Ind-Ra) has withdrawn the Long-term 'Provisional IND B+' and Short-term 'Provisional IND A4' ratings on Ramesh Chandra Rai's (RCR) proposed INR20.00 million fund- based limits. The Outlook was Stable. RCR's provisional ratings have been withdrawn as the company did not proceed with the instrument as envisaged. RCR's outstanding ratings are as follows: -- Long-Term Issuer Rating: 'IND B+'/Stable -- INR20.00 million fund-based limit: 'IND B+'/Stable/'IND A4' -- INR45.00 million non-fund-based limits: 'IND A4' RIDDHI CASTING: CRISIL Cuts Rating on INR150MM Term Loan to B ------------------------------------------------------------- CRISIL has downgraded its rating on the long-term bank facilities of Riddhi Casting Private Limited (RCPL) to 'CRISIL B/Negative' from 'CRISIL BB-/Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 15 CRISIL B/Negative (Downgraded from 'CRISIL BB-/Stable') Term Loan 150 CRISIL B/Negative (Downgraded from 'CRISIL BB-/Stable') The downgrade reflects weakening of RCPL's financial risk profile, especially liquidity, because of net loss of INR17.3 million in fiscal 2015 and estimated loss of INR20.2 million in fiscal 2016 due to initial phase of operations, leading to inadequate accrual to service debt. Revenue increased in fiscal 2016, but profitability remained modest, leading to cash loss. As a result, networth declined and debt protection measures weakened further. The company continues to fund debt obligation through unsecured loans from promoters. The rating reflects RCPL's small scale of operations in the highly competitive steel casting industry, its susceptibility to volatility in raw material prices, and weak financial risk profile. These weaknesses are partially offset by the extensive industry experience of its promoters, their funding support, and established relationships with customers. Outlook: Negative CRISIL believes RCPL's financial risk profile, particularly liquidity, will remain under pressure over the medium term due to inadequate accrual for debt servicing. The rating may be downgraded if lower than expected funding support from promoters or stretch in working capital cycle, leads to further deterioration in liquidity. The outlook may be revised to 'Stable' if RCPL generates sufficient cash accrual to meet debt obligation, or if its promoters extend sizeable funding support, improving liquidity. RCPL, incorporated in 2013, manufactures spheroidal graphite iron and cast iron castings. Its facility is at Ichalkaranji in Kolhapur, Maharashtra, and started commercial production in April 2014. SAKETH EDUCATIONAL: CRISIL Suspends 'D' Rating on INR300MM Loan --------------------------------------------------------------- CRISIL has suspended its rating on the bank facility of Saketh Educational Trust (SET). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Term Loan 300 CRISIL D The suspension of rating is on account of non-cooperation by SET with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, SET is yet to provide adequate information to enable CRISIL to assess SET's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key factor in its rating process as outlined in its criteria 'Information Availability - a key risk factor in credit ratings' SET was founded in 2009, by the Reddy family, to set up an international School, Candor International School (CIS), at Bengaluru, near Electronic City. The international school offers International Baccalaureate programme from preparatory 1 to grade 10. SCHABLONA INDIA: CRISIL Lowers Rating on INR50MM Cash Loan to B --------------------------------------------------------------- CRISIL has downgraded its rating on the long-term bank facilities of Schablona India Limited (SIL) to 'CRISIL B/Negative' from 'CRISIL BB-/Negative', and has reaffirmed its rating on the short-term bank facility at 'CRISIL A4'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 50 CRISIL B/Negative (Downgraded from 'CRISIL BB-/Negative') Letter of credit & Bank Guarantee 40 CRISIL A4 (Reaffirmed) Proposed Long Term 23.9 CRISIL B/Negative (Downgraded Bank Loan Facility from 'CRISIL BB-/Negative') Term Loan 9.1 CRISIL B/Negative (Downgraded from 'CRISIL BB-/Negative') The downgrade reflects CRISIL's belief that SIL's business and financial risk profiles will remain under pressure on account of intense industry competition and modest demand conditions resulting in subdued revenue growth and muted profitability in the near term. For Fiscal 2016, net sales declined to INR231.5 million from INR439.1 million the previous year on account of decline in demand for its designer tiles. Furthermore, it reported cash loss of INR52 million as against a cash loss of INR33 million in the previous year due to high fixed cost. Due to sustained cash losses over the past four years, its capital structure has weakened significantly. Furthermore, liquidity remains constrained as reflected in gross current assets of around 200 days and is supported by stretching its creditors from its group company. CRISIL believes that company's liquidity will remain under pressure marred by cash losses and stretched working capital cycle. The ratings reflect SIL's working capital-intensive operations, weak capital structure, and vulnerability to raw material price volatility. These rating weaknesses are partially offset by the extensive experience of promoters in the steel industry and their established relationships with suppliers and customers. Outlook: Negative CRISIL believes that SIL's credit risk profile will continue to be constrained by intense competition and modest demand conditions, resulting in subdued revenue growth and muted profitability over the near term. The rating may be downgraded if liquidity weakens further due to high cash losses or a stretch in its working capital cycle. Conversely, the outlook may be revised to 'Stable' in case of a sustainable increase in sales and profitability thereby mitigating cash losses. Established in 1983 as Soma Finance & Leasing, it was renamed SIL in 1993. The company manufactures designer tiles and decals, and also trades in ceramic tiles. The company is listed on the Bombay Stock Exchange. The company was founded by Mr. H L Somany, who is also the promoter of Somany Ceramics Limited (SCL). The operations of SIL are currently led by its chairman, Mr. N. Goenka. SIL has two factories, at Bahadurgarh (Haryana) and Kadi (Mehsana, Gujarat). The company reported a net loss of INR41.5 million on net sales of INR231.5 million for Fiscal 2016 against a net loss of INR25.1 million on net sales of INR439 million the previous year. SHANKAR PARVATI: ICRA Reaffirms B+ Rating on INR7.0cr Cash Loan --------------------------------------------------------------- ICRA has reaffirmed the long-term rating of [ICRA]B+ to the INR7.00 crore cash credit facility, INR0.62 crore term loan facility and INR0.69 crore unallocated limits of Shankar Parvati Industries. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Cash Credit 7.00 [ICRA]B+ reaffirmed Term Loan 0.62 [ICRA]B+ reaffirmed Unallocated Limits 0.69 [ICRA]B+ reaffirmed The rating reaffirmation takes into account the SPI's weak financial risk profile characterised by thin margins, adverse capital structure and modest debt coverage indicators. The rating also takes into account the limited value addition in the cotton ginning business, the highly fragmented and competitive nature of the industry and the vulnerability of the firm's profitability to movements in cotton prices which are subject to seasonality and crop harvest as well as the regulatory risk with regard to MSP. The rating also considers adverse potential impact on net worth and gearing levels in case of any substantial withdrawal from capital account given the constitution as a partnership firm. The rating, however, continues to favourably factor in the long experience of the promoters in the cotton ginning and pressing industry and the favourable location of the firm's plant with respect to raw material procurement. Shankar Parvati Industries (SPI) was established as a partnership firm in 2005, and manufactures cotton bales and cottonseeds through ginning and pressing of raw cotton. The firm markets cotton bales to merchant traders and cottonseeds to local oil mills. SPI operates from its plant located in Kadi, Mehsana and is equipped with 39 ginning machines with a total installed input capacity of processing 20,160 Metric Tonnes (MT) of cotton per annum. The promoters of the firm have a long experience in the cotton ginning industry. Recent Results During FY2015, SPI reported an operating income of INR93.27 crore and profit after tax of INR0.29 crore as against the operating income of INR99.58 crore and profit after tax of INR0.12 crore during FY2014. As per provisional financials, the firm reported an operating income of INR74.74 crore and profit before tax of INR0.30 crore during FY2016. SHRADHA APPARELS: CRISIL Reaffirms B+ Rating on INR5MM Loan ----------------------------------------------------------- CRISIL ratings on the bank facilities of Shradha Apparels Worldwide (SAW) continue to reflect a below-average financial risk profile because of weak capital structure and modest debt protection metrics. The ratings also factor in a small scale of operations in the highly fragmented readymade garments industry. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Foreign Bill 25 CRISIL A4 (Reaffirmed) Negotiation Foreign Bill Purchase 5 CRISIL B+/Stable (Reaffirmed) These rating weaknesses are partially offset by the extensive experience of partners in the textile industry and their established relationships with customers and suppliers. Outlook: Stable CRISIL believes SAW will continue to benefit over the medium term from the extensive experience of its partners and their established relationships with customers. The outlook may be revised to 'Positive' if significantly higher-than-expected accrual and improvement in working capital cycle leads to improvement in the financial risk profile. Conversely, the outlook may be revised to 'Negative' in case of a decline in profitability or a stretch in the working capital cycle or any unanticipated capital expenditure weakening its liquidity. Update Revenue increased at a modest year-on-year growth of 6% to INR 279 million for fiscal 2016. The revenues are expected to grow at a healthy rate of 15-20% backed by steady order flow. However, the scale of operations will remain small in the highly fragmented ready-made garments industry. Operating margin is likely to remain at 5% over the medium term. Operations remained working capital intensive, with gross current assets of 166 days as on March 31, 2016, due to stretched receivables of 87 days. Financial risk profile was below average because of modest estimated net worth of INR26 million as on March, 2016 following low accretion to reserves. Gearing was moderate at 2.3 times, while debt protection metrics were muted, with interest coverage and net cash accrual to total debt ratios of 1.62 times and 0.07 time, respectively, for fiscal 2016. Liquidity is expected to be moderate over the medium term, backed by bank limit utilisation averaging 84% over the 12 months ended March 2016. Also, cash accrual is expected to be INR6.0-7.6 million per annum against debt obligation of INR1 million over the medium term. Unsecured loan from the promoters was INR14.7 million as of March 2016. SAW was set up in 2006-07 as a partnership between Mr. Mahendra Lulla and his son Mr. Vishal Lulla. It manufactures and exports ready-made garments under the label of its customers. SHREE KHODAL: ICRA Reaffirms B+ Rating on INR6.50cr Cash Loan ------------------------------------------------------------- ICRA has reaffirmed the long-term rating of [ICRA]B+ assigned to the INR8.351 crore line of credit of Shree Khodal Cot-Gin Private Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund based limit- Term loan 1.85 [ICRA]B+; reaffirmed Fund based limit- Cash Credit 6.50 [ICRA]B+; reaffirmed The reaffirmation of rating takes into account the limited track record of the company's operations with SKCPL having commenced commercial production from January, 2015. The rating also factors in the weak financial profile of the firm characterised by the low profitability, adverse capital structure and weak coverage indicators. Further, the limited value-added nature of operations coupled with the highly competitive and fragmented industry structure, arising from low entry barriers exert further pressure on the firm's profitability margins. The rating, however, continues to favourably factor in the past experience of the promoters in the cotton ginning and pressing industry. Further, the location of the firm's manufacturing facility in Rajkot, Gujarat ensures the ready availability of the key raw material viz. high quality raw cotton. ICRA expects SKCPL's revenues to increase by 5% in FY2017 compared to that during FY2016. The company's capital structure though leveraged is expected improve in FY2016-17 as supported by the repayment of term loan and increase in the net worth base, following an increase in the retained earnings. The company's ability to scale up its operations, while improving its profitability, and effectively managing its working capital requirements, will be a rating positive. SKCPL's operating profits would, however, remain vulnerable to adverse movement in raw cotton prices, which are subject to seasonality, crop harvest and government regulations regarding MSP of raw cotton and export of cotton bales. Shree Khodal Cot-Gin Private Limited (SKCPL) was incorporated in 2012. The company commenced ginning and pressing operations in January 2015 by setting up a manufacturing facility at Rajkot, Gujarat. The company's facility is equipped with 30 ginning machines and a pressing machine with a total capacity to process 28,000 MT of raw cotton annually. The operations of the firm are managed by Mr. Kamleshbhai Vekaria and Mr. Bharatbhai Vekaria who have an experience of over five years in the cotton industry. SILVER SPRING: CRISIL Reaffirms 'B' Rating on INR67.5MM Loan ------------------------------------------------------------ CRISIL has assigned its 'CRISIL A4' rating to the short-term bank facilities of Silver Spring Spinners India Private Limited (SSSPL), and reaffirmed its 'CRISIL B/Stable' rating on the company's long-term bank facilities. The ratings reflect the company's modest scale of operations in the intensely competitive textile industry, the susceptibility of its operating margin to volatility in raw material prices, and its below-average financial risk profile. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 1.5 CRISIL A4 (Reassigned) Cash Credit 67.5 CRISIL B/Stable (Reaffirmed) Letter of Credit 10.5 CRISIL A4 (Reassigned) Rupee Term Loan 25.0 CRISIL B/Stable (Reaffirmed) Proposed Long Term Bank Loan Facility 20.5 CRISIL B/Stable (Reaffirmed) These weaknesses are partially offset by the extensive experience of its promoters in the yarn segment. Outlook: Stable CRISIL believes SSSPL will continue to benefit from the extensive industry experience of its promoters. The outlook may be revised to 'Positive' if there is a considerable increase in its revenue and profitability, resulting in a better financial risk profile. The outlook may be revised to 'Negative' in case of a steep fall in its revenue, or any large debt-funded capital expenditure, resulting in deterioration in its financial risk profile. Update SSSPL's revenue is estimated to increase by 8% year-on-year to INR410 million in fiscal 2016, in line with CRISIL's expectation, led by increase in volume. Operating margins are likely to remain stable at 4.5 percent in 2015-16 because of its ability to pass- through any volatility in input prices. Its working capital cycle is expected to remain in-line with CRISILs expectations. Its inventory is estimated to be at 70 days as on March 31, 2016, and receivables collection to remain efficient. The company will maintain prudent working capital management over the medium term, with steady inventory and receivables. SSSPL's financial risk profile remained constrained by weak debt protection metrics. In fiscal 2016, its net cash accrual to total debt and interest coverage ratios are estimated at 5% and 1.4 times, respectively while the networth and gearing are expected to be at INR98.4 million and gearing at 1.22 times respectively. SSSPL's liquidity will remain sufficient over the medium term, driven by adequate cash accrual to meet long-term debt obligations. Its bank line utilisation averaged 93% over the 12 months through March 2016. SSSPL was incorporated in 1997 at Srivilliputhur in Tamil Nadu. The company manufactures cotton yarn. It is managed by Mr. Rajendran Sridhar and Ms. Menaka. For fiscal 2015, SSSPL has reported a net loss of INR2.8 million on revenue of INR375.5 million as against a Profit After Tax of INR1.6 million on revenue of INR 412 million in fiscal 2014. SJLT SPINNING: Ind-Ra Suspends 'IND BB+' Long-Term Issuer Rating ---------------------------------------------------------------- India Ratings and Research (Ind-Ra) has suspended SJLT Spinning Mills Private Limited's (SJLT) 'IND BB+' Long-Term Issuer Rating. The Outlook was Stable. This rating will now appear as 'IND BB+(suspended)' on the agency's website. A full list of rating actions is at the end of this commentary. The ratings have been migrated to the suspended category due to lack of adequate information. Ind-Ra will no longer provide ratings or analytical coverage for SJLT. The ratings will remain in the suspended category for a period of six months and be withdrawn at the end of that period. However, in the event the issuer starts furnishing information during the six-month period, the ratings could be reinstated and will be communicated through a rating action commentary. SJLT's ratings are as follows: -- Long-Term Issuer Rating: migrated to 'IND BB+(suspended)' from 'IND BB+'/Stable -- INR215.7 million Long-term loan: migrated to 'IND BB+(suspended)' from 'IND BB+' -- INR230 million fund-based working capital limits: migrated to 'IND BB+(suspended)' and 'IND A4+(suspended)' from 'IND BB+' and 'IND A4+' -- INR100 million non-fund-based limits: migrated to 'IND A4+(suspended)' from 'IND A4+' SONY PYRO: CRISIL Suspends B+ Rating on INR70MM Cash Loan --------------------------------------------------------- CRISIL has suspended its rating on the bank facilities of Sony Pyro International (SPI; part of the Sony Fireworks group). The suspension of rating is on account of non-cooperation by SPI with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, SPI is yet to provide adequate information to enable CRISIL to assess SPI's ability to service its debt. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 70 CRISIL B+/Stable Long Term Loan 10 CRISIL B+/Stable The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key factor in its rating process as outlined in its criteria 'Information Availability - a key risk factor in credit ratings' For arriving at the ratings, CRISIL has combined the business and financial risk profiles of Sony Fireworks Private Limited (SFPL), Sqny Fireworks (SF), SPI, Micky Paper Caps Works (MPCW), Vinayaga Fireworks (VF), and Vinayaga Fireworks Industries (VFI). SFPL, incorporated in 1991 and based in Sivakasi (Tamil Nadu), is promoted by Mr. P Karvannan and Mr. P Ganesan. The company manufactures and distributes fireworks. VF, SF, SPI, MPCW and VFI were established as partnership firms and are engaged in the same business. SREE HARICHARAN: CRISIL Reaffirms B- Rating on INR25MM Cash Loan ---------------------------------------------------------------- CRISIL's ratings on the bank facilities of Sree Haricharan Granite Exports India Private Limited (SHGEIPL) continue to reflect geographical concentration in the company's revenue profile, and its large working capital requirement. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 25 CRISIL B-/Stable (Reaffirmed) Export Packing Credit 50 CRISIL A4 (Reaffirmed) Letter of Credit 5 CRISIL A4 (Reaffirmed) The ratings also factor in below-average financial risk profile because of small networth, high gearing, and modest debt protection metrics. These weaknesses are partially offset by its promoters' extensive experience in the granite industry. Outlook: Stable CRISIL believes SHGEIPL will continue to benefit from its promoters' extensive industry experience. The outlook may be revised to 'Positive' if there is a substantial and sustained improvement in revenue and profitability, or in working capital management. The outlook may be revised to 'Negative' in case of steep decline in profitability, or significant deterioration in capital structure because of large debt-funded capital expenditure or stretch in working capital cycle. SHGEIPL was set up in 2010 by Andhra Pradesh-based Mr. Damodara Rao Potturi and Ms. Sulochana Potturi. The company has set up a facility to process, polish, and export rough granite blocks to make granite slabs and monumental slabs of different specifications. It commenced commercial operations in February 2013. SRI BALAJI: ICRA Suspends B+ Rating on INR7.10cr Loan ----------------------------------------------------- ICRA has suspended [ICRA]B+ rating assigned to the INR7.10 crore fund based and non fund based facilities of Sri Balaji Industries. The suspension follows ICRA's inability to carry out a rating surveillance in the absence of the requisite information from the company. According to its suspension policy, ICRA may suspend any rating outstanding if in its opinion there is insufficient information to assess such rating during the surveillance exercise. SRI JAGDAMBA: CRISIL Suspends 'D' Rating on INR500MM Cash Loan -------------------------------------------------------------- CRISIL has suspended its ratings on the bank facilities of Sri Jagdamba Ginning and Pressing Private Limited (Part Ix Company) (SJG). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bill Discounting 100 CRISIL D Cash Credit 500 CRISIL D Long Term Loan 10 CRISIL D Standby Line of Credit 40 CRISIL D The suspension of ratings is on account of non-cooperation by SJG with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, SJG is yet to provide adequate information to enable CRISIL to assess SJG'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' SJG was set up in 2007 by Mr. Raj Kumar Agarwal and his family members. SJG is engaged in ginning and pressing of raw cotton. The company's ginning unit is located in Adilabad district in Telangana. SRIJAN PUBLISHERS: Ind-Ra Withdraws Provisional 'IND BB-' Rating ---------------------------------------------------------------- India Ratings and Research (Ind-Ra) has withdrawn the 'Provisional IND BB-' and 'Provisional IND A4+' ratings on Srijan Publishers Pvt Ltd's (SPPL) proposed INR40m fund-based working capital limits. The Outlook on the Long-term rating was Stable. A full list of rating actions is at the end of this commentary. The provisional rating has been withdrawn as the company did not proceed with the instrument as envisaged. SPPL's outstanding ratings are as follows: -- Long-Term Issuer Rating: 'IND BB-'; Outlook Stable -- INR40 million fund-based working capital limits: 'IND BB- '/Stable and 'IND A4+' SRINIVASA RICE: ICRA Ups Rating on INR9.65cr LT Loan to B+ ---------------------------------------------------------- ICRA has upgraded the long-term rating assigned to the INR9.65 crore fund based limits and INR0.83 crore non fund based limits of Srinivasa Rice Industries (SRI) to [ICRA]B+ from [ICRA]B. ICRA has retained the short term rating on INR0.83 crore non-fund based limits at [ICRA]A4. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term fund based 9.65 [ICRA]B+; Upgraded from [ICRA]B Long term/Short term 0.83 [ICRA]B+/A4;Upgraded from non fund based [ICRA]B/A4 The rating action primarily factors in the stabilization of operations of the firm and increase in the scale of operations of the company with revenues increasing from INR25.88 crore in FY15 to that of INR44.87 crore in FY16 higher volumes sold with increase in capacity utilization. The assigned rating considers the vast experience of promoters and presence of Rice Mill in one of the key paddy growing areas of Andhra Pradesh resulting in easy availability and procurement of paddy. However, the rating is constrained by the small scale of operations, highly fragmented and competitive nature of the industry which limits the pricing flexibility. The rating also factors in agro-climatic risks which could affect the availability of paddy and regulatory risk with respect to Minimum Support Price Policy of the paddy. ICRA also notes the risks associated with the partnership nature of the firm. Going forward, the ability of the firm to increase its sales, improve the profitability in the highly competitive industry, and effectively manage its working capital requirements would be the key rating sensitivities. Srinivasa Rice Industries was established as February FY2013, and the current management has taken over the mill in August 2014, and, under the new management, the company has started its operations on 24th November 2014. The firm is engaged in milling of paddy to produce raw and boiled rice. It is located in Gurazala, Guntur Dsitrict of Andhra Pradesh. The current milling capacity is 8 tonnes of paddy per hour. The day to day operations of the firm are looked after by Gudipati Srinivas and Gudipati Lingaiah. Recent Result As per provisional FY16 financials, the firm registered PAT levels of INR0.23 crore on an Operating income of INR44.87 crore as against PAT levels of INR0.13 crore on an Operating income of INR25.88 crore in FY15. SUPREME AUDIOTRONICS: ICRA Suspends 'B' Rating on INR5.80cr Loan ---------------------------------------------------------------- ICRA has suspended rating of [ICRA]B assigned to the INR5.80 crore bank facilities of Supreme Audiotronics Private Limited (SAPL). The suspension follows ICRA's inability to carry out a rating surveillance in the absence of the requisite information from the company. SAPL is a Delhi based company, engaged in distributing and servicing car audio systems and also in manufacturing of plastic parts for cars. The company mainly caters to Tata Motors Limited for car audio systems and to Maruti Suzuki India Limited (MSIL) for plastic consoles. It is the sole distributor and service provider for Clarion Audio Systems in India. The entity was incorporated in 1956 as a partnership firm, Supreme Electronics, and was later converted into a private limited company- Supreme Audiotronics Private Limited. TAPTI AGRO: ICRA Assigns 'B' Rating to INR14cr Term Loan -------------------------------------------------------- ICRA has assigned the long term rating of [ICRA]B to the INR14.50 crore (enhanced from INR10.00 crore) proposed term loan of Tapti Agro Industries. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Proposed Term Loan 14.00 [ICRA]B (Assigned) The rating assigned is constrained by implementation risks associated with the project as the financial closure is yet to be achieved and with scheduled commissioning targeted for December 2016. Further, planned debt-funded capital expenditure (capex) exposes the firm to possible stress on debt servicing capability in case of slower than expected ramp up of cash flows. The rating is also constrained by the competitive pressures from other sugar manufacturing players in the market; the firm's relatively modest envisaged scale of operations; and vulnerability of profitability to adverse fluctuations in the prices of sugarcane post commissioning. ICRA also notes that TAI is a partnership firm and any significant withdrawals from the capital account would affect its net worth and thereby its capital structure. The rating, however, favourably considers the established experience of TAI's promoters in the sugar industry and location advantage by virtue of the factory being located in a cane growing region, giving it easy access to raw material. M/s Tapti Agro Industries (TAI) incorporated in 2015 is setting up a Khandsari (semi-white centrifugal sugar) manufacturing facility having crushing capacity of 1,500 Tonnes of Cane per Day (TCD) at Betul District of Madhya Pradesh. The firm plans to commence the operations of the facility by December 2016. The firm is promoted by Mr. Rahul Kumar Sao and Mr. Dharmveer Juneja who have significant experience in the sugar industry through their association with other firms which are also engaged in sugar manufacturing. TRICHY THANJAVUR: ICRA Reaffirms 'D' Rating on INR238.29cr Loan --------------------------------------------------------------- ICRA has reaffirmed the long-term rating assigned to the INR238.29 crore (INR261.00 crore earlier) term loans of Trichy Thanjavur Expressways Limited (TTEL) at [ICRA]D. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Term Loan 238.29 [ICRA]D Reaffirmed The rating reaffirmation takes into account continued delays in repayment of debt obligations, as TTEL's toll collections have been significantly below expectations on account of weak traffic flow. Although the company had gone for debt restructuring in December 2012, the continued under performance of traffic has constrained the liquidity of TTEL. ICRA notes that the prospects for traffic growth along the route are moderate, given that the route is not an arterial one and that it does not connect any major ports or commercial centres as some highways do. Given the poor toll collections, major maintenance reserve could not be created, as a result TTEL would be required to raise additional debt to fund the major maintenance (MM). Given the weak traffic along the stretch and consequently lower damage to the road, TTEL is in discussions with NHAI for deferment of MM. Response from NHAI is awaited. Going forward, ramp up in traffic volumes thereby increase in toll collections and timely debt servicing will be the key rating sensitivities. TTEL is a special purpose vehicle (SPV) promoted by Madhucon Projects Ltd (MPL) for the strengthening and widening of an existing 55.75km long stretch between Trichy-Thanjavur on National Highway (NH) - 67. The project has been awarded by NHAI on Build-Operate-Toll (BOT) (Toll) basis, with a concession period of 20 years starting June 2006. The scheduled Commercial Operations Date (COD) of the project was June 2009; however, after a delay of more than 22 months, the actual COD was May 2011. The project road connects Thanjavur, a prominent tourist city to Trichy and other places in the western part of South India. UNION ENTERPRISES: ICRA Reaffirms 'D' Rating on INR9.57cr Loan -------------------------------------------------------------- ICRA has reaffirmed the [ICRA]D rating assigned to the INR6.40 crore1 cash credit facility and INR9.57 crore (reduced from INR11.65 crore) term loan facilities of Union Enterprises (Sachdev Steel Works Private Limited). ICRA has also reaffirmed the [ICRA]D rating assigned to the INR6.92 crore (enhanced from INR4.84 crore) unallocated limits of UE. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based Limits- Cash Credit 6.40 [ICRA]D reaffirmed Fund Based Limits- Term Loans 9.57 [ICRA]D reaffirmed Unallocated 6.92 [ICRA]D/[ICRA]D reaffirmed The reaffirmation of the ratings take into account delays in debt repayment by UE in the past and nominal expected cash accruals in FY2016 which is likely to exert pressure on the debt-repayment ability of the company in the future as well. Besides, the company has poor liquidity position as reflected by high utilisation of its bank limits and significant deterioration in the financial profile with continuous losses posted over the last three years. The ratings are also constrained by vulnerability of UE's cash flows and profitability to cyclicality inherent in the steel industry, its small scale of current operations and low capacity utilisation of the mills. The ratings, however, favourably take into account experience of the promoters in operating rolling mills for more than three and a half decades. Union Enterprises (UE) has been in the business of manufacturing TMT bar and rod since 1975. The production facility is located in the Adityapur Industrial Area in Jamshedpur, Jharkhand. UE currently produces TMT bars where billets/pencil ingots are used as the major raw material. The company has recently installed a fully automated structural mill with a capacity of 57,600 tpa. This is in addition to the existing 14,400 tpa rebar mill. VAKRATUND COLD: CRISIL Suspends 'B' Rating on INR49.5MM Loan ------------------------------------------------------------ CRISIL has suspended its rating on the bank facility of M/s. Vakratund Cold Storage & Warehouse (VCSW). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Term Loan 49.5 CRISIL B/Stable The suspension of rating is on account of non-cooperation by VCSW with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, VCSW is yet to provide adequate information to enable CRISIL to assess VCSW's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key factor in its rating process as outlined in its criteria 'Information Availability - a key risk factor in credit ratings' Established in 2013-14 (refers to financial year, April 1 to March 31) as a partnership firm by Mr. Ashok Gaikwad and Mr. Pritam Chopada, VCSW operates a cold storage unit primarily for raisins and grapes in Nashik (Maharashtra). VENKATESHKRUPA SUGAR: CRISIL Suspends B+ Rating on INR300MM Loan ---------------------------------------------------------------- CRISIL has suspended its rating on the bank facility of Venkateshkrupa Sugar Mills Limited (VSML). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Proposed Long Term Bank Loan Facility 300 CRISIL B+/Stable The suspension of rating is on account of non-cooperation by VSML with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, VSML is yet to provide adequate information to enable CRISIL to assess VSML'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' VSML, based in Shirur, Pune (Maharashtra), manufactures sugar; its plant has a sugarcane crushing capacity of 2500 tonnes per day. The company is promoted by Mr. Sandeep Taur and his friends and relatives. It has been set up recently, with 2012-13 (refers to financial year, April 1 to March 31) being is first full year of operations. VINAYAK POLYMERS: CRISIL Cuts Rating on INR150MM Loan to B+ ----------------------------------------------------------- CRISIL has downgraded its ratings on the bank facilities of Vinayak Polymers Inc. (VPI) to 'CRISIL B+/Stable/CRISIL A4' from 'CRISIL BB-/Stable/CRISIL A4+'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 150 CRISIL B+/Stable (Downgraded from 'CRISIL BB-/Stable') Letter of Credit 50 CRISIL A4 (Downgraded from 'CRISIL A4+') The rating downgrade follows CRISIL's belief that VPI's financial risk profile, particularly its liquidity and debt protection metrics, will be weaker than previous expectation, over the near term, because of stretched working capital cycle. The company's debtor and inventory days increased sharply as on March 31, 2016, leading to spike of gross current assets of more than 159 days as on that date. As a result the bank limit utilisation increased to 99% for past twelve months ending March 31, 2016, the firm is also availing ad-hoc limit of INR25 million. Financial risk profile deteriorated as total outside liabilities to adjusted networth increased to 9.9 times from previous year 3.7 times, this was primarily due to increased creditor days to 117 days (previous year; 41 days) and high bank debt. Debt protection metrics of the firm remain weak with interest cover at 1.4 times. Although market position of VPI improved in FY16, backed by healthy sales growth from INR1250 million in FY15 to INR1992 million in FY16. Sales improved due to opening of new branches in Kanpur and Hyderabad. Also the firm has taken pet resin dealership in four states viz; South Maharashtra, Karnataka, Telangna and Andhra Pradesh. Business risk profile is further supported by having a diversified customer base in plastic industry. Operating margins remained in the vicinity of 1.5-2 per cent owing to trading nature of the concern, however remain in line with industry peer. The rating reflects firm's weak financial risk profile, marked by a high leverage and weak debt protection metrics. The rating is also constrained by the firm's exposure to volatility in raw material prices, and its working-capital-intensive operations. These rating weaknesses are partially offset by extensive experience of VPI's promoters in the petrochemical trading industry, its moderate scale of operations and diversified customer base. Outlook: Stable CRISIL believes that VPI will continue to benefit over the medium term from the extensive industry experience of its promoters. The outlook may be revised to 'Positive' if there is substantial and sustained improvement in the firm's financial risk profile, most likely through fresh capital infusion or higher-than-expected cash accruals. Conversely, the outlook may be revised to 'Negative' if VPI's liquidity weakens significantly, most likely because of lengthening of its working capital cycle or lower- than-expected cash accruals, or if it undertakes a debt-funded capital expenditure programme, leading to weakening of its capital structure. Set up in 2007 by Mr. Rahul Agarwal and his family members, VPI trades in polymers such as PP, PE, and HDP. The firm, based in Delhi, The firm, based in Delhi and serves to customers in Uttar Pradesh, Hyderabad and Delhi-NCR. It has also started dealership of Indorama Ventures Public Co. Ltd (Micro Polypet Pvt Ltd) in Jan 2016 in South Maharashtra, Karnataka, Telangna and Andhra Pradesh. =============== M A L A Y S I A =============== 1MALAYSIA: US Seeks to Seize More than $1B in Assets from Fund -------------------------------------------------------------- The Associated Press reports that the United States on July 20 moved to recover more than $1 billion that federal officials say was stolen from a Malaysian sovereign wealth fund and that was used for high-end real estate, fancy artwork and production of the Hollywood film, "The Wolf of Wall Street." AP says Justice Department civil forfeiture complaints seek the forfeiture of property including a Manhattan penthouse and a Beverly Hills mansion, a $35 million private jet and paintings by Vincent Van Gogh and Claude Monet. The report relates that the complaint, filed in Los Angeles, alleges a complex money laundering scheme that the Justice Department said was intended to enrich top-level officials of a government-controlled Malaysian wealth fund. That fund, known informally as 1MDB, was created in 2009 by the Malaysian government with the goal of promoting economic development projects in the Asian nation. Instead, officials at the fund diverted more than $3.5 billion over the next several years through a web of shell companies and bank accounts in Singapore, Switzerland, Luxembourg and the US, the complaint alleges, according to AP. "In seeking to seize these forfeited items, the Department of Justice is sending a message that we will not allow the United States to become a playground for the corrupt," AP quotes United States Attorney Eileen Decker, the US Attorney in Los Angeles, as saying at a news conference. "And we will not allow it to be a platform for money laundering or a place to hide and invest in stolen riches." Federal officials say more than $1 billion was laundered into the US for the personal benefit of 1MDB officials and their associates. The funds were used to pay for luxury real estate in the US and Europe, gambling debts in Las Vegas casinos, a London interior designer, expensive paintings and the production of films, including the 2013 Oscar-nominated movie "The Wolf of Wall Street." According to the news agency, the Justice Department said it was the largest forfeiture demand under an initiative that seeks to recover foreign bribery proceeds and embezzled funds. AP says the complaint identifies by name multiple Malaysian nationals that the government alleges profited from the scheme. Among them is Riza Shahriz Bin Abdul Aziz, who co-founded Red Granite Pictures, a movie production studio whose films include "The Wolf of Wall Street," AP relays. Eleven wire transfers totaling $64 million were used to fund the studio's operations, including the production of the movie starring Leonardo DiCaprio, according to the complaint cited by AP. AP notes that the complaint identified Riza as a relative of a Malaysian official, but did not name the official. He is the stepson of Prime Minister Najib Razak, says AP. "Neither 1MDB nor the Malaysian people ever saw a penny of profit from that film or from any of the other assets that were purchased with funds that were siphoned from 1MDB," the report quotes Assistant Attorney General Leslie Caldwell, head of the Justice Department's criminal division, as saying. "Instead, that money went to relatives and associates of the corrupt officials of 1MDB and others." The Justice Department is seeking to seize any royalties and fees owed to Red Granite in the future, adds AP. About 1MDB Kuala Lumpur-based 1Malaysia Development Bhd (1MDB) operates as a government agency. The Company offers financial assistance, analysis, and advice through investors, corporations, and consultants to startups and growth companies. 1MDB focuses on investments with strategic value and high multiplier effects on the economy, particularly in energy, real estate, tourism, and agribusiness. As reported in the Troubled Company Reporter-Asia Pacific on July 23, 2015, Reuters said Singapore Police Force has frozen two bank accounts to help with an investigation in to Malaysia's troubled state-owned investment fund 1Malaysia Development Bhd (1MDB), which is being probed by authorities in Malaysia for financial mismanagement and graft. Reuters said the freezing of the Singapore bank accounts follows a similar move in Malaysia where a task force investigating 1MDB said earlier in July that it had frozen half a dozen bank accounts following a media report that nearly $700 million had been transferred to an account of Malaysia's Prime Minister Najib Razak. The Wall Street Journal reported on July 3, 2015, that investigators looking into 1MDB had traced close to US$700 million of deposits moving through Falcon Bank in Singapore into personal bank accounts in Malaysia belonging to Najib. The TCR-AP, citing Bloomberg News, reported on Nov. 26, 2015, that 1MDB agreed to sell its power assets to China General Nuclear Power Corp. for MYR9.83 billion ($2.3 billion) as the state investment company moved one step closer to winding down operations after its mounting debt raised investor concern. Bloomberg related that the company faced cash-flow problems after a planned initial public offering of Edra faced delays amid unfavorable market conditions, President Arul Kanda said Oct. 31, 2015. The listing plan was later canceled as the company opted for a sale of the assets, Bloomberg noted. The TCR-AP, citing The Wall Street Journal, reported on April 27, 2016, that the company defaulted on a $1.75 billion bond issue, triggering cross defaults on two other Islamic notes totaling MYR7.4 billion ($1.9 billion). Asian Nikkei Review reported last month that Malaysia has replaced the board of 1Malaysia Development Berhad with treasury officials, paving the way for the dissolution of the troubled state investment fund. ==================== N E W Z E A L A N D ==================== Q CARD: Fitch Affirms 'Bsf' Rating on Series F 2014-1 Debt ----------------------------------------------------------- Fitch Ratings affirms the ratings of notes issued by The New Zealand Guardian Trust Company Limited in its capacity as trustee of the Q Card Trust. The transaction is a securitisation of New Zealand credit card receivables. The transaction is a revolving, asset backed note program featuring a multi-class structure that will purchase eligible receivables from the seller on a revolving basis. The rating actions are as follows: NZD10.0 million, VFN affirmed at 'AAAsf'; Outlook Stable NZD89.5 million, Series A 2014-1 affirmed at 'AAAsf'; Outlook Stable NZD89.0 million, Series A 2014-2 affirmed at 'AAAsf'; Outlook Stable NZD58.0 million, Series A 2014-3 affirmed at 'AAAsf'; Outlook Stable NZD37.5 million, Series B 2014-1 affirmed at 'AAsf'; Outlook Stable NZD26.3 million, Series C 2014-1 affirmed at 'Asf'; Outlook Stable NZD18.8 million, Series D 2014-1 affirmed at 'BBBsf'; Outlook Stable NZD20.8 million, Series E 2014-1 affirmed at 'BBsf'; Outlook Stable NZD7.3 million, Series F 2014-1 affirmed at 'Bsf'; Outlook Stable. KEY RATING DRIVERS The affirmation reflects Fitch's view that available credit enhancement is sufficient to support the notes' current rating and the agency's expectations of New Zealand's economic conditions. Credit quality and the performance of underlying receivables remain within the agency's expectations. The transaction was modelled with a base case gross yield rate of 17.3%, a base case monthly payment rate (MPR) of 6.8% and a base case charge-off rate of 4.5%. The transaction has performed better than Fitch expected, with an average gross yield of 18.7%, an average MPR of 8.0% and an average charge-off rate of 2.6% during the year to June 2016. Arrears greater than 120 days are low, at 3.98% at end-June 2016. Arrears greater than 120 days have been stable in the 3%-4% range, well below the excess spread trapping trigger of 8%. Fitch has revised its steady case assumption for the charge-off rate to 4.5% from 5.0%, reflecting the better-than-historical performance of the asset in the trust since closing. The steady cases for the MPR and yield remain unchanged. RATING SENSITIVITIES The transaction can withstand multiples of the current charge-off rates, ranging from 5.56x in a 'AAAsf' scenario to 2.69x in a 'Bsf' scenario at the base case of the gross yield rate, MPR and revised charge-off rate. The transaction can withstand higher multiples of the current charge-off rates, ranging from 13.47x in a 'AAAsf' scenario to 6.38x in a 'Bsf' scenario, at the average gross yield rate, MPR and charge-off rate during the year to June 2016. DUE DILIGENCE USAGE No third party due diligence was provided or reviewed in relation to this rating action. DATA ADEQUACY Fitch conducted a review of 10 sample loan files, focusing on the underwriting procedures conducted by Fisher & Paykel Finance Limited compared with its credit policy at the time of underwriting. Fitch checked the consistency and plausibility of the information and no material discrepancies were noted that would affect Fitch's rating analysis. Initial key rating drivers and rating sensitivity are described further in the new issue report, Q Card Trust, dated 12 August 2014. ===================== P H I L I P P I N E S ===================== GSIS FAMILY: PDIC Invites Investors to Rehabilitate Bank -------------------------------------------------------- The Philippine Deposit Insurance Corporation (PDIC), Receiver of the closed GSIS Family Bank, called on interested investors to participate in the pre-qualification process for the rehabilitation of the bank. Interested parties had until July 20, 2016 to submit their letters of intent to rehabilitate the bank and the required supporting documents. Investors may be banks or non-bank corporations. Meanwhile, supporting documents include full name, address, and contact details; business overview; list of shareholders and their respective shareholdings and nationalities; evidence of financial capacity. In case the investor is a consortium, all the supporting documents for each member of the consortium are required to be submitted. As earlier published, documentary requirements should be submitted on July 20, 2016 to Ms. Ana Rosa E. Viray, Department Manager of PDIC's Receivership and Bank Management Department I located at the 5th Floor, SSS Building, Ayala Avenue corner V.A. Rufino St., Makati City. Investors will be evaluated based on a set of pre-qualification criteria. Banks that intend to participate in the rehabilitation of the GSIS Family Bank shall be required to have a minimum capital adequacy ratio (CAR) of 12% before the acquisition, the capacity to infuse necessary capital to ensure that the 12% CAR requirement is complied with if it falls below 12% after acquiring GSIS Family Bank, and a CAMELS composite rating of at least "3" with a Management rating of not lower than "3". Interested investor-banks must have no findings of unsafe and unsound banking practices and are not under the Prompt Corrective Action (PCA) framework of the Bangko Sentral ng Pilipinas (BSP). In case of foreign banks, these must be authorized to operate as a bank in the Philippines. On the other hand, investors which are non-bank corporations must be authorized to do business in the Philippines, profitable for the last three years of operation and compliant with foreign ownership limit/ceiling in a bank as stated in the General Banking Law. In addition, they should have capital of at least PHP2 billion or adequate to meet the capital requirement for the rehabilitation of GSIS Family Bank; current asset to current liability ratio of 2:1; and unqualified audit opinion by independent auditors on the results of operations for the last three years. In the Invitation to Prequalify as earlier published and as posted in its website, PDIC advised that after the pre- qualification process, investors which met the pre-qualification criteria shall be notified of their eligibility to further participate in the rehabilitation of GSIS Family Bank. It also enjoined interested investors to ensure that all supporting documents are duly certified/signed by their authorized representative. PDIC said that it shall not consider any document that is not certified/signed. PDIC reserves the right to terminate the rehabilitation process at any time. Qualified third party investors shall be required to execute a confidentiality agreement and post a PHP5 million bond prior to the conduct of the due diligence on August 1, 2016. Letters of Intent submitted after the July 20, 2016 deadline shall no longer be entertained. Interested investors may visit www.pdic.gov.ph for further information or communicate with Ms. Viray at (02) 841-4751 or at e-mail address, aeviray@pdic.gov.ph. A 22-unit thrift bank, GSIS Family Bank was ordered closed by the Monetary Board of the BSP and taken over by PDIC on May 13, 2016. LBC EXPRESS: PDIC Order Garnishing Araneta Assets Lifted -------------------------------------------------------- Doris Dumlao-Abadilla at Philippine Daily Inquirer reports that key assets of the Araneta family, including a controlling stake in publicly listed courier and remittance service firm LBC Express Holdings Inc., have been freed up. This follows the execution of an earlier court order lifting the Philippine Deposit Insurance Corp.'s PHP1.8-billion attachment and garnishment initiative, the Inquirer relates. The Inquirer says the counter-bond delivered by the defendants will stand in place of the released properties and serve as security to satisfy any final judgment in the legal case. This development frees up crucial assets and thereby eases the liquidity, administrative and operational challenges that had confronted the group following the attachment and garnishment order issued on Dec. 7, 2015, according to the Inquirer. The PDIC's move was part of a collection claim on behalf of a defunct LBC banking affiliate. Last February, however, the Makati Regional Trial Court issued an order to lift and set aside the writ of preliminary attachment and the garnishment after the defendants delivered a counter- bond. The defendants to this case are: LBC Express Inc., LBC Development Corp., LBC Properties, Inc., Juan Carlos Araneta, Santiago Araneta, Fernando Araneta, Monica Araneta, Carlos Araneta, Ma. Eliza Berenguer, Ofelia Cuevas, Apolonia Ilio, Joseph Jeffrey Rodriguez and Arlan Jurado. LBC Express is a subsidiary of LBC Express Holdings while LBC Development is its parent company. In line with the order, says the report, LBC Express Holdings disclosed to the Philippine Stock Exchange on July 14 that RCBC Stock Transfer Department had effected as of July 13 the lifting of the attachment and garnishment tag on 1.2 billion shares in LBC Express Holdings -- equivalent to an 84.5 percent stake -- alongside the lifting of the garnishment of PLDT Inc. preferred shares held by LBC Development Corp. The sheriff of Makati RTC also served the lifting of garnishment upon the main offices of the following banks: Landbank of the Philippines, BDO Unibank, Inc., Metropolitan Bank and Trust Company, Bank of the Philippine Islands, Rizal Commercial Banking Corporation and Philippine National Bank. LBC Bank is a 20-unit thrift bank that was ordered closed by the Monetary Board of the Bangko Sentral ng Pilipinas on September 9, 2011. LBC Bank's closure affected 33,191 accounts with total estimated deposits of PHP5.95 billion, PHP2.97 billion of which are insured by the PDIC up to the maximum deposit insurance coverage of PHP500,000. Of the total insured deposits, 98% or PHP2.91 billion have been paid by PDIC drawn from the Deposit Insurance Fund (DIF). The DIF is PDIC's funding source for payment of deposit insurance. RB LABRADOR: PDIC Files Criminal Charges vs. Former President ------------------------------------------------------------- The Philippine Deposit Insurance Corporation (PDIC) filed on June 27, 2016 with the Department of Justice (DOJ) a criminal complaint against Mark Ernest D. Rosario, former President/Manager of the closed Rural Bank of Labrador, Inc. (RB Labrador), for estafa. RB Labrador is a single-unit bank ordered closed by the Monetary Board and placed under receivership of the PDIC on April 16, 2015. The respondent is facing charges of estafa through falsification of documents pursuant to Articles 315 (2) (a) and (1) (b), in relation to Articles 171 and 172 of the Revised Penal Code. In its complaint, PDIC alleged that Rosario sold two (2) motor vehicles owned by RB Labrador for PHP225,000 in 2013 without authority from the Bank's Board of Directors. Investigation showed that subject vehicles were sold by Rosario using Secretary's Certificates supposedly authorized by the Bank's Board. Proceeds from the sale were found to have not been turned over to and not recorded in the books or records of RB Labrador. Further investigation by PDIC revealed that the signatory to the Secretary's Certificates was neither elected nor designated as the Bank's Assistant Corporate Secretary, but was the Bank's appraiser who pointed to Rosario as the one who instructed him to sign the certificates. PDIC alleged that Rosario did not have authority to sell or dispose the properties of RB Labrador without approval from its Board and deliberately concealed from the Bank the sale transactions covering the vehicles. To date, the respondent has not turned over the proceeds from the sale of the subject vehicles. He also failed to provide any explanation or reply about the sale transactions. Under Article 315 of the Revised Penal Code, estafa involving more than PHP22,000 is punishable with prision mayor (6 years and 1 day to 12 years imprisonment) or reclusion temporal (12 years and 1 day to 20 years imprisonment). Filing of charges against erring bank officers and employees is in support of PDIC's efforts to bring to justice parties who engage in acts that will put depositors and the Deposit Insurance Fund (DIF) at risk. The PDIC continues to pursue legal actions against bank officials and personnel who engage in unsafe and unsound banking practices that pose grave threats to the stability of the country's banking system. The PDIC is mandated to generate, preserve, maintain faith and confidence in the country's banking system, and protect it from illegal schemes and machinations. SECURITY BANK: Fitch Hikes LT Issuer Default Ratings to 'BB+' ------------------------------------------------------------- Fitch Ratings has upgraded the Long-Term Issuer Default Ratings (IDRs) of four Philippine banks -- China Banking Corporation (CBC), Philippine National Bank (PNB), Rizal Commercial Banking Corp. (RCBC) and Security Bank Corporation (SBC) -- to 'BB+' from 'BB', and their Viability Ratings (VRs) to 'bb+' from 'bb'. The banks' Outlooks are Stable. Fitch has concurrently upgraded the National Long-Term Rating on PNB to 'AA-(phl)', in line with those of CBC and SBC. Fitch believes steady growth in the Philippine economy and enhancements to banking regulations over the last few years has strengthened the domestic operating environment, notwithstanding long-standing structural issues, such as concentrated loan portfolios, developing corporate governance standards and family control and conglomerate ownership of the banks. This drives Fitch's upgrade of the Operating Environment factor to 'bbb-' from 'bb+'. Fitch said, "We expect continued economic improvement and pro- active regulatory oversight alongside gradually-improving regulatory frameworks to benefit banks' asset quality and ultimately their credit profiles through the cycle. This is an important factor underlying today's ratings upgrades." RCBC's medium-term note programme, as well as RCBC's and SBC's senior notes, have been upgraded in tandem. A full list of rating actions is at the end of this rating action commentary. KEY RATING DRIVERS VRS, IDRS and NATIONAL RATINGS The IDRs of the four Philippine banks and the National Long-Term Ratings of CBC, PNB and SBC are driven by their VRs. The upgrade of PNB's National Long-Term Rating reflects an improved credit profile relative to those of other Philippine entities. The ratings reflect the banks' higher growth appetite amid a broadly-favourable backdrop and their smaller but still meaningful local franchises as mid-sized banks in the Philippines. They also incorporate Fitch's expectation that the banks will maintain broadly-steady asset quality, adequate capital buffers and stable funding and liquidity profiles as they grow and potentially gain market share. Fitch said, "The Stable Outlooks reflect Fitch's expectation that the banks' financial profiles will remain steady over the near- to medium-term. We believe continued economic growth, a relatively conservative regulatory environment and a liquid banking system - backed by a growing middle-class population and strong remittances from overseas workers - will support the banks' rating profiles." Fitch expects the four banks to continue growing their branch footprints as they allocate more resources to consumer-centric portfolios. The banks continue to target high loan growth in the mid-teens to high-20s and may also undertake acquisitions as they build their franchises and enhance their market positions. The four banks' asset quality should remain broadly steady, aided by a favourable macroeconomic environment and rising incomes. Asset quality improvements have been most pronounced for PNB and RCBC, whose NPL ratios fell to 2.5% and 1.8% at end-2015 from 8.1% and 7.2% at end-2010, respectively. Fitch considers SBC's asset quality to be the strongest amongst the four banks, as it has a steady record and low NPL ratio of 0.8% at end-2015, lower large-loan concentration relative to capital, lower exposure to higher-risk consumer loans and larger investment securities portfolio mostly held in Philippine government bonds. This is balanced against Fitch's expectations that SBC's asset mix will change over the medium-term, particularly in light of accelerated growth plans following a partnership deal in 1H16 with the Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU; 'A'/Negative). Under the arrangement, BTMU invested PHP36.9billion in SBC in return for a 20% stake in SBC and two board seats. SBC aims for above-industry loan growth of 25%-30%, subject to net interest margins, and has raised its branch growth targets for the next five years following the BTMU partnership. Over- ambitious growth could weaken SBC's asset quality, funding and capitalisation if poorly-managed. Fitch's upgrade of SBC is based on the expectation that the bank will maintain appropriate underwriting standards and sustain a satisfactory financial profile as it expands. Fitch said, "CBC's consolidated asset quality has deteriorated in the last few quarters, with its NPL ratio rising to 2.7% and loan loss provisions declining to 78% of NPLs at end-March 2016 (end- 2013: 2.0% and 147%, respectively). This was only partly due to the acquisition of the weaker Planters Development Bank in 2014, as pockets of asset quality weakness emerged in the bank's existing portfolio. The upgrade of CBC's ratings are supported by Fitch's assessment that recent negative trends in the bank's asset quality have been modest on a consolidated group level, and the agency's broader expectation of more stable through-cycle asset quality for the banking sector, including for CBC. We also expect the bank to remediate its loan quality and improve its provision coverage over the next few years. "We believe the four mid-size banks would qualify as mid-tier domestic systemically important banks and incur a minimum common equity Tier 1 (CET1) ratio of 10.0% by January 2019. The CET1 ratios of CBC, PNB, RCBC and SBC (13.1%, 16.9%, 13.1% and 12.1%, respectively) at end-March 2016 comfortably met the higher incoming minimum requirement. The capital injection from BTMU increased SBC's CET1 ratio to about 20.7% at end-March 2016 on a pro-forma basis, further boosting its capital position." Ambitions for market share gains and high risk-weighted asset growth - exceeding internal capital generation - are likely to erode existing capital ratios, but Fitch expects the banks to maintain adequate capital buffers to support growth targets and offset rapid-growth risks. A money-laundering case involving RCBC and other Philippine and international entities in 1H16 highlighted existing gaps in domestic anti money-laundering standards. Fitch believes such issues are in line with the Philippine banks' rating levels and expects regulators to take action to deter similar incidents. SUPPORT RATINGS AND SUPPORT RATING FLOORS The banks' Support Ratings of 3 and Support Rating Floors of 'BB- ' reflect Fitch's expectation of a moderate probability of extraordinary state support for the banks, if needed. This takes into account the Philippine sovereign's fiscal position - captured in its rating of 'BBB-/Positive', and the banks' moderate systemic importance, stemming from their 3%-6% market shares of system assets, loans and deposits. This places them within the top-10 banks in the Philippines. MEDIUM-TERM NOTE PROGRAMME AND SENIOR DEBT Fitch has upgraded the ratings on RCBC's medium-term note programme and RCBC's and SBC's senior notes to 'BB+' from 'BB'. The ratings are the same as the banks' IDRs because the senior notes constitute the banks' direct, unsubordinated and unsecured obligations and rank equally with all their other unsecured and unsubordinated obligations. RATING SENSITIVITIES VIABILITY RATINGS, IDRS AND NATIONAL RATINGS A further upgrade of the four banks' IDRs and Viability Ratings is not probable in the near-term in light of the recent upgrade. Fitch may downgrade the banks' ratings if their higher risk appetites result in significant asset quality deterioration and earnings volatility. The ratings would also come under pressure with increasing concentration risk, excessive growth in riskier, more volatile sectors, such as real estate, unsecured personal loans or unsecured project finance, or if their capitalisation, funding and liquidity strengths diminished, potentially as a result of rapid growth. Continued improvements in risk frameworks, greater earnings diversity, lower concentration risk and, in some cases, strengthened corporate governance would be positive for the banks' ratings, although Fitch expects such developments to materialise only gradually over the longer-term. CBC, RCBC and PNB are more vulnerable to negative rating action due to their weaker asset quality. In particular, CBC's rating could be downgraded if its asset quality and provisioning continues to deteriorate or if it executes poorly on its growth strategy, including on the remaining portions of its integration of Planters Development Bank. SUPPORT RATINGS AND SUPPORT RATING FLOORS The banks' Support Ratings and Support Rating Floors would be affected by any change in Fitch's perception of the sovereign's ability or propensity to provide extraordinary support to the banks in a timely manner. An upgrade of the sovereign IDRs could lift the banks' Support Ratings and Support Rating Floors. Fitch does not foresee significant risk of reduced implicit state support for the banks in the near-term. The rating actions are as follows: CBC -- Long-Term Foreign- and Local-Currency IDRs upgraded to 'BB+' from 'BB'; Outlook Stable -- National Long-Term Rating affirmed at 'AA-(phl)'; Outlook Stable -- Viability Rating upgraded to 'bb+' from 'bb' -- Support Rating affirmed at '3' -- Support Rating Floor affirmed at 'BB-' PNB -- Long-Term Foreign-Currency IDR upgraded to 'BB+' from 'BB'; Outlook Stable -- Short-Term Foreign-Currency IDR affirmed at 'B' -- National Long-Term Rating upgraded to 'AA-(phl)' from 'A+(phl)'; Outlook Stable -- Viability Rating upgraded to 'bb+' from 'bb' -- Support Rating affirmed at '3' -- Support Rating Floor affirmed at 'BB-' RCBC -- Long-Term Foreign- and Local-Currency IDR upgraded to 'BB+' from 'BB'; Outlook Stable -- Viability Rating upgraded to 'bb+' from 'bb' -- Support Rating affirmed at '3' -- Support Rating Floor affirmed at 'BB-' -- Ratings on medium-term note programme and senior notes upgraded to 'BB+' from 'BB' SBC -- Long-Term Foreign- and Local-Currency IDR upgraded to 'BB+' from 'BB'; Outlook Stable -- Short-Term Foreign-Currency IDR affirmed at 'B' -- National Long-Term Rating affirmed at 'AA-(phl)'; Outlook Stable -- Viability Rating upgraded to 'bb+' from 'bb' -- Support Rating affirmed at '3' -- Support Rating Floor affirmed at 'BB-' -- Rating on senior notes upgraded to 'BB+' from 'BB' ********* 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 ***