/raid1/www/Hosts/bankrupt/TCRAP_Public/161003.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Monday, October 3, 2016, Vol. 19, No. 195
Headlines
A U S T R A L I A
101 CONSTRUCTION: First Creditors' Meeting Set for Oct. 5
HIGHLANDS BUILDING: First Creditors' Meeting Set for Oct. 11
IM AUSTRALIA: S&P Assigns 'BB' Rating to Proposed AUD250MM Loan
IRON MOUNTAIN: Moody's Assigns Ba3 Rating to AUD250MM Loan
KEYSTONE GROUP: Quadrant Eyes Jamie's Italian Restaurants
MERBYE PINES: First Creditors' Meeting Set for Oct. 12
MIKCON EMPLOYMENT: First Creditors' Meeting Set for Oct. 13
VOCATION LIMITED: ASIC Commences Civil Penalty Proceedings
C H I N A
CHINA EVERGRANDE: Moody's Says Disposal Will Not Affect B2 CFR
XINJIANG GUANGHUI: S&P Assigns 'B' CCR; Outlook Stable
H O N G K O N G
PACIFIC ANDES: Voluntary Chapter 11 Case Summary
I N D I A
ANTONY MOTORS: ICRA Reaffirms B+ Rating on INR8.5cr LT Loan
ARIHANT SHIP: Ind-Ra Suspends B- Long-Term Issuer Rating
ARK BUILDERS: Ind-Ra Assigns B+ Long-Term Issuer Rating
CONTEC SYNDICATE: Ind-Ra Raises Long-Term Issuer Rating to BB
D.S.P. KNITTING: Ind-Ra Suspends BB- Long-Term Issuer Rating
GROWELL CNC: Ind-Ra Suspends B- Long-Term Issuer Rating
HI-TECH RADIATORS: Ind-Ra Raises Long-Term Issuer Rating to BB+
HIGHNESS COTTON: CARE Reaffirms B+ Rating on INR6.50cr LT Loan
INDESYS EQUIPMENTS: CARE Ups Rating on INR4.50cr Loan to B+/A4
JASDEV SINGH: ICRA Suspends B- Rating on INR11cr Fund Based Loan
KST INFRASTRUCTURE: Ind-Ra Withdraws BB- Long-Term Issuer Rating
KUSHAL FOODS: Ind-Ra Affirms BB+ Long-Term Issuer Rating
MARUTI NANDAN: CARE Assigns B+ Rating to INR5.0cr LT Bank Loan
MARYA FROZEN: Ind-Ra Withdraws BB Long-Term Issuer Rating
MN BIO-TECHNOLOGY: Ind-Ra Assigns BB- Rating on INR545MM NCDs
MN TAKSHILA: Ind-Ra Assigns BB- Rating on INR1,675MM NCDs
MURLIDHAR AGRO: ICRA Suspends B+ rating on INR7.0cr Cash Loan
NAHAR TEXTILES: Ind-Ra Raises Long-Term Issuer Rating to BB
P K OVERSEAS: Ind-Ra Assigns BB Long-Term Issuer Rating
RAJESH STEEL: Ind-Ra Suspends BB Long-Term Issuer Rating
RAMKRUPA GINNING: CARE Reaffirms B+ Rating on INR20cr LT Loan
RAMKY ELSAMEX: CARE Reaffirms 'D' Rating on INR196.99cr LT Loan
RECMET ALLOYS: CARE Assigns B+ Rating to INR9.95cr LT Bank Loan
RUCHI SOYA: CARE Lowers Rating on INR3,794.71cr LT Loan to 'B'
RUCHIWORLDWIDE: CARE Cuts INR1,200cr Loan Rating to B(SO)/A(4SO)
S.R. EDUCATIONAL: ICRA Suspends 'D' Rating on INR9.35cr Loan
SAMARA COLD: Ind-Ra Assigns B Long-Term Issuer Rating
SEC BUILDTECH: Ind-Ra Withdraws B+ Long-Term Issuer Rating
SH-HARYANA WIRES: Ind-Ra Withdraws BB+ Long-Term Issuer Rating
SHAKUN GASES: Ind-Ra Suspends B- Long-Term Issuer Rating
SHREE RAMESHWAR: CARE Reaffirms B+ Rating on INR7.30cr LT Loan
SHRI RAM: CARE Assigns B+ Rating to INR32.45cr LT Bank Loan
SIDHI VINAYAK: Ind-Ra Withdraws BB Long-Term Issuer Rating
SINCON INFRASTRUCTURE: Ind-Ra Assigns BB Long-Term Issuer Rating
SNEHA MARKETING: Ind-Ra Suspends B Long-Term Issuer Rating
SOHO LIMITED: ICRA Suspends 'B' Rating on INR6.5cr Loan
SUN SHINE: CARE Assigns B+ Rating to INR10cr Long Term Loan
T K INTERNATIONAL: Ind-Ra Withdraws D Long-Term Issuer Rating
TRIVENI SILK: ICRA Revises Rating on INR10.50cr LT Loan to 'B'
YEDESHWARI AGRO: ICRA Reaffirms B+ Rating on INR62.32cr Loan
I N D O N E S I A
BUMI SERPONG: Fitch Rates Proposed US$ Sr. Unsec. Notes BB-(EXP)
SMARTFREN TELECOM: Fitch Affirms 'CCC' National Long-Term Rating
J A P A N
TAKATA CORP: Bidders Said to Offer at Least $1BB Investments
M A L A Y S I A
PRIME GLOBAL: Stockholders Elect Five Directors
N E W Z E A L A N D
ATMOSPHERIC LTD: SecureCom Acquires Firm
D.C. ROSS: Placed in Receivership; 12 Jobs at Risk
WHITE CLIFFS: Craft Beer Institution Fights Back From Liquidation
P A K I S T A N
PAKISTAN: Fitch Assigns B Rating to US$ Sovereign Certificates
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A U S T R A L I A
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101 CONSTRUCTION: First Creditors' Meeting Set for Oct. 5
---------------------------------------------------------
A first meeting of the creditors in the proceedings of 101
Construction Pty Ltd will be held at the offices of SM Solvency
Accountants, Level 8/490 Upper Edward Street, in Spring Hill,
Queensland, on Oct. 5, 2016, at 11:30 a.m.
Leon Lee and Brendan Nixon of SM Solvency Accountants were
appointed as administrators of 101 Construction on Sept. 26,
2016.
HIGHLANDS BUILDING: First Creditors' Meeting Set for Oct. 11
------------------------------------------------------------
A first meeting of the creditors in the proceedings of Highlands
Building Co. Pty Ltd, trading as Bay Group Civil, Bay Building
and Highlands Property Development, will be held at the offices
of Ernst & Young, Level 11, 121 Marcus Clarke Street, Canberra,
ACT, 2600, on Oct. 11, 2016, at 10:00 a.m.
Aaron Torline & Henry Kazar of Ernst & Young were appointed as
administrators of Highlands Building on Sept. 28, 2016.
IM AUSTRALIA: S&P Assigns 'BB' Rating to Proposed AUD250MM Loan
---------------------------------------------------------------
S&P Global Ratings assigned its 'BB' issue-level rating and '2'
recovery rating to IM Australia Group Pty. Ltd.'s proposed
AUD250 million senior secured term loan B due 2022. IM Australia
Group Pty. Ltd. is a subsidiary of Iron Mountain Inc..
The '2' recovery rating indicates S&P's expectation for
substantial recovery (70%-90%; lower half of the range) of
principal in the event of a payment default. Iron Mountain will
use the proceeds to pay down revolver balances and for general
corporate purposes. The issue-level rating is one notch above
the corporate credit rating on Iron Mountain.
Pro forma for the debt offering, Iron Mountain's adjusted
leverage remains virtually unchanged in the mid-5x area as of
June 30, 2016. S&P expects leverage to decrease to the low-5x
area by the end of 2017 and to below 5x by year-end 2018 as the
company realizes the synergies from the Recall acquisition over
the next few years.
S&P assess Iron Mountain's business risk profile as satisfactory,
reflecting the company's position as the largest records
management company globally. The business benefits from low
customer attrition, high switching costs, and long-term storage
contracts that provide stable and recurring revenue. The threat
of digital storage reducing physical storage volume over time
somewhat offsets these strengths.
The stable rating outlook on Iron Mountain reflects S&P's
expectation that the company will be able to leverage its
increased size, scale, and geographic diversification to generate
low- to mid-single-digit organic revenue growth while improving
its operating margins.
RATINGS LIST
Iron Mountain Inc.
Corporate Credit Rating BB-/Stable/--
New Rating
IM Australia Group Pty. Ltd.
AUD250 mil. term loan B due 2022
Senior Secured BB
Recovery Rating 2L
IRON MOUNTAIN: Moody's Assigns Ba3 Rating to AUD250MM Loan
----------------------------------------------------------
Moody's Investors Service assigned a Ba3 rating to the
AUD250 million term loan facility at Iron Mountain Australia
Group Pty. Ltd., an indirect subsidiary of Iron Mountain
Incorporated. As part of the rating action, Moody's affirmed
Iron Mountain's SGL-3 Speculative Grade Liquidity rating. All
other ratings, including Iron Mountain's Ba3 Corporate Family
Rating (CFR) and the stable rating outlook are not affected. The
company intends to use net proceeds from the new term loan to
refinance a portion of the outstanding revolver borrowings.
RATINGS RATIONALE
Iron Mountain's CFR is weakly positioned in the Ba3 rating
category because of the company's elevated leverage of about 5.8x
(Moody's adjusted, at 2Q 2016), execution risk in integrating the
Recall acquisition and projected free cash flow deficits over the
next 2 to 3 years. The Ba3 CFR incorporates our expectation that
management is committed to reducing leverage toward its target of
below 5x. Moody's expects that modest organic growth, synergies
from the Recall acquisition and cost savings implemented under
Iron Mountain's business transformation initiatives will
gradually drive leverage to below 5x over the next 2 to 3 years.
The Ba3 CFR is supported by Iron Mountain's leading market
position in the North America storage and information management
market, its large base of recurring storage rental revenues, and
its expanded geographical footprint and scale with the
acquisition of Recall. Iron Mountain has a diversified customer
base and its strong brand and market share in North America
create pricing power that support its strong EBITDA margins. At
the same time, the company faces mature demand for its services
in developed markets in North America and Western Europe.
Moody's expects Iron Mountain's free cash flow to remain negative
over the next 2 to 3 years due to its elevated capital
requirements to support growth and sizeable dividends.
The stable outlook reflects Moody's expectations for low single
digit organic revenue growth and progressive declines in
leverage.
The SGL-3's speculative grade liquidity rating reflects our
expectations that Iron Mountain will maintain adequate liquidity,
including sufficient availability under its revolving credit
facility to fund anticipated free cash flow shortfalls.
Moody's expects the new AUD $250 mm term loan to benefit from a
security interest in substantially all Australian assets of the
borrower and its material subsidiaries as well as unsecured
guarantees from Iron Mountain Incorporated and certain of its US
subsidiaries. Moody's rates the new term loan facility on par
with the existing senior credit facilities at Iron Mountain as it
expects the collateral allocation agreement to equalize
recoveries for the lenders to the US and Australian credit
facilities.
Moody's could downgrade Iron Mountain's ratings if deterioration
in earnings or changes in financial policy lead Moody's to
believe that total debt to EBITDA (Moody's adjusted) is unlikely
to be reduced and sustained below 5x. The rating could also be
lowered if Iron Mountain's liquidity weakens materially.
Although not expected in the near term, Moody's could upgrade
Iron Mountain's ratings if the company maintains stable organic
revenue growth and EBITDA margins, and sustains total debt to
EBITDA (Moody's adjusted) below 4.5 times (Moody's adjusted) and
retained cash flow to net debt above 10%.
Assignments:
Issuer: Iron Mountain Australia Group Pty. Ltd.
AUD250 million senior secured term loan facility,
Assigned Ba3
(LGD3)
Outlook, Stable
Affirmation:
Issuer: Iron Mountain Incorporated
Speculative Grade Liquidity -- SGL-3
Iron Mountain is a global provider of information storage and
related services.
The principal methodology used in this rating was Business and
Consumer Service Industry published in December 2014.
KEYSTONE GROUP: Quadrant Eyes Jamie's Italian Restaurants
---------------------------------------------------------
Emma Koehn at SmartCompany reports that administrators have
closed expressions of interest for the purchase of venues owned
by the collapsed Keystone Group amid reports that private equity
firm Quadrant could be considering taking on Jamie Oliver's
restaurant chain.
SmartCompany, citing The Australian, says Quadrant Private Equity
has its eye on Jamie's Italian Australia Restaurants, controlled
by the Keystone Group, which collapsed into receivership in June.
Last week administrator Ferrier Hodgson said indicative bids for
the group, or individual brands within it, had closed, recalls
SmartCompany.
"More than 80 interested parties were provided access to the data
room to conduct due diligence," receiver Morgan Kelly said in a
statement. "The Receivers are now reviewing indicative offers
and entering into negotiations with a range of parties."
According to SmartCompany, the Keystone Hospitality Group was
responsible for the operation of the Jamie's restaurants, as well
as 11 other venues in Sydney, Perth and Brisbane. At the time of
the collapse the receivers told SmartCompany the operation had
1,200 staff.
All businesses have continued to trade while under external
management as receivers put out a call for the purchase of the
entire group, as well as individual venues, SmartCompany notes.
According to reports from News Corp, Quadrant's interest in
Jamie's business comes after a number of other recent acquisition
deals, says SmartCompany. This includes the purchase of Ardent
Leisure's fitness business in August, and the revelation that it
will purchase gym chain Fitness First.
Jamie's Italian had six restaurants across Australia.
SmartCompany says the Adelaide venue had been open just on two
years when Keystone entered receivership. At the time, reports
surfaced that Oliver himself demanded a sit down in London with
the Keystone executive team, "furious" with the failed
hospitality operation.
SmartCompany adds that Ferrier Hodgson said the Keystone sale
timeline has been extended to account for the number of parties
interested.
"Subject to negotiations we expect to provide a further sale
update in the coming weeks," Morgan Kelly said in the statement.
The Keystone group was founded in 2000. The group runs 17
restaurants and pubs across Australia. It employs up to 1,200
staff. On June 28, 2016, Morgan Kelly and Ryan Eagle of Ferrier
Hodgson were appointed Receivers and Managers to the Keystone
Hospitality Group.
MERBYE PINES: First Creditors' Meeting Set for Oct. 12
------------------------------------------------------
A first meeting of the creditors in the proceedings of Merbye
Pines Pty Ltd ATF The Embrey Family Trust, will be held at the
offices of SV Partners, 138 Mary Street, in Brisbane, Queensland,
on Oct. 12, 2016, at 2:00 p.m.
David Michael Stimpson and Anne Meagher of SV Partners were
appointed as administrators of Merbye Pines on Sept. 29, 2016.
MIKCON EMPLOYMENT: First Creditors' Meeting Set for Oct. 13
-----------------------------------------------------------
A first meeting of the creditors in the proceedings of Mikcon
Employment Services Pty Limited will be held at the offices of
Amos Insolvency, 25/ 185 Airds Road, in Leumeah, NSW, on
Oct. 13, 2016, at 11:00 a.m.
Peter A Amos of Amos Insolvency was appointed as administrator of
Mikcon Employment on Sept. 30, 2016.
VOCATION LIMITED: ASIC Commences Civil Penalty Proceedings
-----------------------------------------------------------
Australian Securities and Investments Commission has commenced
proceedings in the Federal Court of Australia in Sydney against
Vocation Limited and the company's former executive managing
director, Mr. Mark Hutchinson; former non-executive chairman,
Mr. John Dawkins; and former company secretary and Chief
Financial Officer, Mr. Manvinder Grewal.
The proceedings arise out of ASIC's investigation of events
leading to Vocation's entry into Deeds of Settlement with the
Victorian Department of Education and Early Childhood Development
on Oct. 27, 2014.
ASIC alleges that Vocation made representations in relation to
its securities that were misleading; that it failed to notify the
ASX of information that it was required to disclose; and that it
provided the ASX with a defective cleansing notice relied upon to
raise approximately AUD72.5 million from institutional and
sophisticated investors pursuant to a placement in September
2014.
Further, ASIC contends that Mr. Hutchinson, Mr. Dawkins, Mr.
GrÇwal were either involved in the failure of Vocation to meet
its obligations or otherwise failed to discharge their duties to
Vocation with the requisite degree of care and diligence that a
reasonable person in their respective positions would exercise.
ASIC is seeking:
* declarations that Vocation, Mr. Hutchinson, Mr. Dawkins
and Mr. Grewal contravened provisions of the Corporations
Act
* orders that Mr. Hutchinson, Mr. Dawkins and Mr. Grewal pay
penalties to the Commonwealth, and
* that Mr. Hutchinson, Mr. Dawkins and Mr. Grewal be
prohibited from managing a corporation for such period
as the Court thinks fit.
The matter has been set down for a Case Management Hearing at
9:30 a.m. on Oct. 13, 2016.
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C H I N A
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CHINA EVERGRANDE: Moody's Says Disposal Will Not Affect B2 CFR
--------------------------------------------------------------
Moody's Investors Service says that China Evergrande Group's
disposal of its non-core grains and edible oils, dairy products
and spring water businesses is credit positive, but will not
immediately affect its B2 corporate family rating or B3 senior
unsecured bond rating.
The rating outlook remains negative.
On September 28, Evergrande announced that it had disposed of all
of these businesses to separate independent third parties for an
aggregate consideration of RMB2.7 billion.
"The disposal is credit positive because it will reduce to a
certain extent the distraction for Evergrande's management from
its core property development business," says Franco Leung, a
Moody's Vice President and Senior Credit Officer.
"It will also improve the company's profitability as these non-
core businesses have been loss-making", adds Leung.
Evergrande expects to recognize an unaudited before tax gain of
approximately RMB5.7 billion from the disposal. Such a gain would
represent around 18% of its 2015 profits before tax of around
RMB31.5 billion.
Moody's believes that the financial gain exceeds the disposal
consideration of RMB2.7 billion due to the accumulated operating
losses of those non-core businesses.
In addition, Moody's estimates that the improvement in
Evergrande's annual operating profit margins would be around 2
percentage points in the next 2-3 years due to the material
losses these non-core businesses have generated in the past.
The impact on its revenue will be limited because of the
relatively small size of the non-core businesses when compared
with the core property development business.
At the same time, the proceeds from the disposal will not
materially boost Evergrande's liquidity as they would represent
around 1.3% of its cash holdings of RMB212 billion at end-June
2016.
Evergrande's rating is constrained by the high business and
financial risks associated with its strategy to pursue rapid
debt-funded growth.
The negative rating outlook reflects Evergrande's high levels of
business, financial and liquidity risks, in view of its
aggressive debt-funded acquisitions.
Evergrande says that upon completion of the disposal, it will no
longer have any interests in grains and edible oils, dairy
products and spring water.
However, Moody's notes that Evergrande still has interests in
other businesses -- such as financial, internet and health care
businesses -- after the disposal.
The principal methodology used in these ratings was Homebuilding
And Property Development Industry, published in April 2015.
China Evergrande Group is one of the major residential developers
in China. It has a standardized operating model.
Founded in 1996 in Guangzhou, the company has rapidly expanded
its business across the country over the past few years. At 30
June 2016, its land bank totaled 186 million square meters in
gross floor area across 175 Chinese cities.
XINJIANG GUANGHUI: S&P Assigns 'B' CCR; Outlook Stable
------------------------------------------------------
S&P Global Ratings said that it had assigned its 'B' long-term
corporate credit rating to Xinjiang Guanghui Industry Investment
(Group) Co. Ltd. The outlook is stable. At the same time, S&P
assigned its 'cnBB-' long-term Greater China regional scale
rating to Guanghui. The company is mainly engaged in auto sales
and service, and property and energy development in China.
"The rating on Guanghui reflects the company's operations in
China's highly competitive and fragmented auto retail industry,
and its exposure to the highly volatile energy and cyclical
property segments," said S&P Global credit analyst Shalynn Teo.
"We expect Guanghui's financial leverage to remain high due to
the company's aggressive debt-funded expansion appetite and high
capital investment requirement for the energy and property
businesses. Guanghui's satisfactory market position as the
largest auto retailer in China and its extensive nationwide
network and diversified product offering temper these
weaknesses."
S&P expects Guanghui's auto retailing business to drive its
competitive position. In S&P's view, Guanghui is likely to
sustain its satisfactory market position as the largest auto
retailer in China over the next 12 months, despite intense
competition.
S&P anticipates that the acquisition of Baoxin Auto Group Ltd.
(completed in June 2016) will enhance Guanghui's geographical
presence and brand coverage in China.
Guanghui's diversified product and service offerings enhance its
value proposition to customers and support margin improvement, in
S&P's view. S&P expects the company to continue to diversify its
revenue streams beyond sales of new cars to higher-margin after-
sales services, used car trading, and leasing services. These
businesses are also generally more stable and recurring. S&P
anticipates that Guanghui's profit contribution from after-sales
and commission-based services will continue to increase,
supporting margin improvement. Guanghui's gross profit margin
for the auto segment increased to 9.2% in 2015, from 7.6% in
2012. The contribution of after-sales services and commission-
based services to the company's gross profit rose to about 58.7%
in 2015, from about 52.3% in 2012.
S&P anticipates that intensifying competition in the auto retail
market in China will put pressure on Guanghui to maintain its
profitability and market position. The company may need to incur
higher expenses and capital expenditure for store upgrade or
network expansion, which could weigh on its overall financial
position.
Guanghui's exposure to the energy and property segments may put
pressure on its profitability and cash flows, in S&P's opinion.
The company's competitiveness in these segments is weaker than in
the auto retail segment, given its weak market position, small
scale, regional concentration, and low operating efficiency. S&P
expects the energy segment to remain exposed to volatile and
depressed commodity prices. S&P expects Guanghui's cash flows
from the property business to remain weak, given a slowing
property market in China and despite reduced working capital
requirements. Significant capital requirements for the energy
and property businesses will likely keep Guanghui's financial
leverage high.
S&P expects Guanghui's debt-to-EBITDA ratio to remain high at
8.0x-9.0x over the next 12 months, compared with 8.0x in 2015,
reflecting the company's aggressive debt-funded expansion
appetite. S&P expects Guanghui to continue to have significant
capital expenditure and acquisitions, which its operating cash
flows are unlikely to fully offset.
S&P has not deconsolidated Guanghui's leasing business because
S&P expects the profit contribution to the group to remain
limited. S&P would reassess the impact of the business if we
consider that its contribution to the group could materially
affect the group's creditworthiness.
"The stable outlook on Guanghui reflects our expectation that the
company will continue to shift its focus to higher-margin after-
sales services and maintain its satisfactory market position in
China's auto retailing market over the next 12 months," said
Ms. Teo. "These factors would support its cash flow generation.
However, we expect Guanghui's leverage to remain high due to its
aggressive debt-funded expansion appetite."
S&P could lower the rating if Guanghui's debt-funded expansion
appetite becomes more aggressive than S&P expects. S&P would
also lower the rating if the company's liquidity deteriorates
more than S&P expects or if the company's competitive position or
profitability weakens, possibly due to intense competition.
S&P could upgrade Guanghui if the company materially improves its
leverage, such that is debt-to-EBITDA declines to below 5.0x on a
sustained basis. This could happen if the company: (1) can
improve its profitability, driven by its enlarged scale and
better product mix; or (2) becomes more disciplined in debt-
funded expansion over the next 12 months.
================
H O N G K O N G
================
PACIFIC ANDES: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: Pacific Andes Resources Development Limited
Room 3201-3210
Hong Kong Plaza
188 Connaught Road West
Hong Kong
Case No.: 16-12739
Type of Business: Commercial Fishing
Chapter 11 Petition Date: September 29, 2016
Court: United States Bankruptcy Court
Southern District of New York (Manhattan)
Judge: Hon. James L. Garrity Jr.
Debtor's Counsel: Tracy L. Klestadt, Esq.
KLESTADT WINTERS JURELLER
SOUTHARD & STEVENS, LLP
200 West 41st Street, 17th Floor
New York, NY 10036-7203
Tel: (212) 972-3000
Fax: (212) 972-2245
E-mail: tklestadt@klestadt.com
Estimated Assets: $1 billion to $10 billion
Estimated Debts: $100 million to $500 million
The petition was signed by Ng Puay Yee, Annie (Jessie), executive
chairman.
The Debtor did not include a list of its largest unsecured
creditors when it filed the petition.
Pacific Andes is related to China Fishery Group Limited (Cayman)
which filed for bankruptcy on June 30, 2016 (Bankr. S.D.N.Y. Case
No. 16-11895).
A full-text copy of the petition is available for free at:
http://bankrupt.com/misc/nysb16-12739.pdf
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I N D I A
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ANTONY MOTORS: ICRA Reaffirms B+ Rating on INR8.5cr LT Loan
-----------------------------------------------------------
ICRA has reaffirmed the [ICRA]B+ rating assigned to the INR8.50
crore1 long-term fund based limits of Antony Motors Private
Limited. ICRA has also reaffirmed the [ICRA]A4 rating assigned to
the INR10.00 crore, short-term, non-fund based facilities of
AMPL.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term, fund-
based limits 8.50 [ICRA]B+ reaffirmed
Short-term, non-
fund based Limits 10.00 [ICRA]A4 reaffirmed
The ratings reaffirmation takes into account the long standing
experience of the promoters in the commercial vehicle body parts
manufacturing business and the company's established brand image,
resulting in repeat orders from customers. The ratings also draw
comfort from operational support derived from group companies,
most of which are in the same line of business and AMPL's well
diversified product portfolio comprising of compactors, painted
bins, cement bulker, suction machines, portable cabins, suction
cum jetting machine, tipper, dumper placer, transfer stations,
fire fighting vehicles, refuellers and other fabricated special
purpose vehicles.
The ratings are, however, constrained by the de-growth in
revenues over the last three fiscals on account of demand
slowdown and the weak financial profile as characterized by low
profitability levels and return indicators and high working
capital intensity of operations. The ratings also take into
consideration the susceptibility of the financial profile of the
company to fluctuations in raw material prices.
Incorporated in 1992, Antony Motors Private Limited is engaged in
the business of manufacturing of special purpose vehicles for
Solid Waste Management and Motor Body Fabrication. Initially, the
company started with fabrication of bus bodies on chassis for
various states and corporation owned city buses. Subsequently,
the company diversified into fabricating special purpose vehicles
like fire-fighting equipment, Suction and Jetting machine,
Ambulances. The existing range of products include Compactors,
Painted bins, Cement Bulker, Suction machines, Portable Cabins,
Suction cum Jetting Machine, Tipper, Dumper Placer, Transfer
Stations, Fire Fighting Vehicles, Refuellers and other fabricated
special purpose vehicles. AMPL was one of the first companies in
the body builder and fabricator category to get ISO 9001:2000 and
subsequently ISO 9001:2008 certifications.
Recent Results
For the twelve months ended March 31, 2016, AMPL has reported a
net profit of INR0.67 crore on an operating income of INR26.83
crore as per audited financials as against a net profit of
INR0.93 crore on an operating income of INR37.64 crore for the
twelve months ended March 31, 2015.
ARIHANT SHIP: Ind-Ra Suspends B- Long-Term Issuer Rating
--------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Arihant Ship
Breakers' 'IND B-' Long-Term Issuer Rating to the suspended
category. The Outlook was Stable. The rating will now appear as
'IND B-(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 Arihant.
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.
Arihant's ratings:
-- Long-Term Issuer Rating: migrated to 'IND B-(suspended)'
from 'IND B-'/Stable
-- INR75 mil. fund-based working capital limits: migrated to
'IND B-(suspended)' from 'IND B-'
-- INR16.2 mil. Long-terms loan: migrated to
'IND B-(suspended)' from 'IND B-'
-- INR75 mil. non-fund-based working capital limits: migrated
to 'IND A4(suspended)' from 'IND A4'
ARK BUILDERS: Ind-Ra Assigns B+ Long-Term Issuer Rating
-------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned ARK Builders
(AB) a Long-Term Issuer Rating of 'IND B+. The Outlook is
Stable.
KEY RATING DRIVERS
The ratings reflect AB's small scale of operations and moderate
credit metrics. Provisional FY16 financials indicate revenue of
INR96 mil. (FY15: INR165 mil.). AB had an outstanding order book
of INR354.8 mil. at end-April 2016. EBITDA interest coverage
(operating EBITDA/gross interest expense) was 2.2x in FY16
(FY15: 1.6x) and net financial leverage (total Ind-Ra adjusted
net debt/operating EBITDA) was 3.3x (5.2x)
The ratings factor in AB's tight liquidity profile as reflected
by 94.1% average working capital limit utilization during the 12
months ended August 2016.
EBITDA margin remained volatile and fluctuated between 9.1% and
27.3% over FY12-FY16 on raw material price volatility. The
ratings also factor in the partnership form.
The ratings, however, derive support from the more than three
decades of experience of the founders in the EPC segment and real
estate industry.
RATING SENSITIVITIES
Positive: Substantial growth in the company's top-line and
improvement in the profitability leading to sustained improvement
in credit metrics could lead to a positive rating action
Negative: Any decline in the profitability resulting leading to
further stress on liquidity and sustained deterioration in the
credit metrics could lead to a negative rating action.
COMPANY PROFILE
Incorporated in 1989, AB is a partnership firm set up by Mr. G.
Ram Reddy and Mrs G Sarala. The firm undertakes civil
construction of buildings, roads, hospital and colleges, both for
the government and private players. AB is a Hyderabad-based
residential and commercial real estate developer.
AB's ratings:
-- Long-Term Issuer Rating: assigned 'IND B+'/Stable
-- INR51 mil. long-term loan: assigned 'IND B+'/Stable
-- INR37.5 mil. fund-based facilities: assigned
'IND B+'/Stable/'IND A4'
-- INR15 mil. non- fund-based facilities: assigned 'IND A4'
CONTEC SYNDICATE: Ind-Ra Raises Long-Term Issuer Rating to BB
-------------------------------------------------------------
India Ratings and Research (Ind-Ra) has upgraded Contec Syndicate
Private Limited's (CSPL) Long-Term Issuer Rating to 'IND BB' from
'IND BB-'. The Outlook is Stable.
KEY RATING DRIVERS
The upgrade reflects an improvement in CSPL's revenue and
liquidity, and geographical expansion of its operations.
According to provisional FY16 financials, the company's revenue
grew at a four year CAGR of 34% to INR389.9 mil. in FY16
(FY15:INR291.1 mil.; FY14:INR197.2 mil.) due to timely completion
of projects. Liquidity was comfortable and improved as evident
from 65% average peak utilization of its cash credit limits
during the 12 months ended August 2016 as compared to near full
utilization of its fund-based limits and frequent use of its ad-
hoc limits during the 12 months ended March 2015. The company's
net working capital cycle was negative and remained comfortable
in FY15 and FY16. The company's geographic concentration reduced
as it has expanded its operations to Karnataka, Andhra Pradesh
and Telangana.
The ratings are supported by CSPL's continued comfortable credit
metrics with EBITDA interest coverage (operating EBITDA/gross
interest expense) of 5.3x in FY16 (FY15: 2.9x; FY14: 5.1x)
resulted from lower interest expenses of INR8.6 mil. (INR17.7
mil., INR5.9 mil.) due to lower utilization of cash credit
limits. Net financial leverage (Ind-Ra adjusted net
debt/operating EBITDAR) deteriorated to 1.6x in FY16 (FY15: 0.2x;
FY14: 1.4x) but still remained comfortable. The deterioration
was due to increase in term loan in the last quarter of FY16.
Ind-Ra expects net financial leverage to improve in FY17 due to
scheduled repayment coupled with no major short term capex.
The ratings are further supported by strong unexecuted order book
of INR1,349.86 mil. as at the beginning of April 2016 which is
about 3.5x of FY16 revenue. It provides CSPL revenue visibility
for the next two to three years. The ratings also benefit from
the founders' experience of around two decades in civil
construction.
The ratings, however, are constrained by a decline in EBITDA
margin to 11.7% in FY16 (FY15:17.5%; FY14:15.3%) on account of
closure of toll collection contract and improving but still
moderate scale of operations.
RATING SENSITIVITIES
Positive: A significant increase in the revenue while maintaining
the operating profitability could lead to a positive rating
action.
Negative: Any deterioration in the liquidity and/or sustained
deterioration in the credit profile could lead to a negative
rating action.
COMPANY PROFILE
CSPL, incorporated in 1996, is managed by Vemulapalli Vishnupriya
and Vunnam Vishnupriya. The company is involved in the
construction of bridges, roads, earthworks and other
infrastructure work. It belongs to the category of special class
civil contractors with the governments of Andhra Pradesh and
Telangana.
CSPL's ratings:
-- Long-Term Issuer Rating: upgraded to 'IND BB' from
'IND BB-'/Stable
-- INR30 mil. fund-based working capital limits (increased
from INR20 mil.): upgraded to 'IND BB'/Stable from
'IND BB-'/Stable
-- INR120 mil. non-fund-based working capital limits: affirmed
at 'IND A4+'
D.S.P. KNITTING: Ind-Ra Suspends BB- Long-Term Issuer Rating
------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated D.S.P. Knitting
Company's (DSPKC) 'IND BB-' Long-Term Issuer Rating to the
suspended category. The Outlook was Stable. The rating will now
appear as 'IND BB-(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 DSPKC.
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
DSPKC's ratings:
-- Long-Term Issuer Rating: migrated to 'IND BB-(suspended)'
from 'IND BB-'/Stable
-- INR15 mil. Long-term loan: migrated to 'IND BB-(suspended)'
from 'IND BB-'/Stable
-- INR52.5 mil. non-fund-based working capital limits:
migrated to 'IND BB-(suspended)' from 'IND BB-'/Stable
GROWELL CNC: Ind-Ra Suspends B- Long-Term Issuer Rating
-------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Growell CNC
Systems' (GCS) 'IND B-' Long-Term Issuer Rating to the suspended
category. The Outlook was Stable. The rating will now appear as
'IND B-(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 GCS.
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 this
six-month period, the ratings could be reinstated and will be
communicated through a rating action commentary.
GCS' ratings:
-- Long Term Issuer Rating: migrated to 'IND B-(suspended)'
from 'IND B-'/Stable,
-- INR44.0 mil. fund-based limits: migrated to
'IND B-(suspended)' from 'IND B-'/Stable
-- INR20.1 mil. long-term loan: migrated to
'IND B-(suspended)' from 'IND B-'/Stable
-- INR12.5 mil. non-fund-based limits: migrated to
'A4(suspended)' from 'IND A4'
HI-TECH RADIATORS: Ind-Ra Raises Long-Term Issuer Rating to BB+
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has upgraded Hi-Tech
Radiators Private Limited's (HTRPL) Long-Term Issuer Rating to
'IND BB+' from 'IND BB'. The Outlook is Stable.
KEY RATING DRIVERS
The upgrade reflects improvement in the business and financial
profile of HTRPL. Revenue grew at a three year CAGR of 19.5%
over FY13-FY16 and increased 38.7% yoy to INR870 mil. in FY16.
The company's margins improved to 6.2% in FY16 from 5.3% in FY15
by achieving economies of scale with the growth in revenue.
EBITDA interest coverage (Operating EBITDA/gross interest
expense) improved to 2.6x from 1.5x in FY15 and net leverage
(total adjusted net debt/operating EBITDAR) improved to 3.9x from
7.0x in FY15. Improvement in coverage and net leverage was on
account of improved margins and scale of operations.
The company has a planned capex of INR172 mil. for manufacturing
hot dip galvanized radiators, which will be funded through the
term loans of INR129.14 mil. and the remaining will be funded by
promoter. The capex is expected to commence by July 2017
according to the timeline given by the management. The capex
will enable HTRPL to expand into high margin yielding hot dip
galvanizing of radiators while continuing the existing painted
radiators business.
The ratings, however, continue to remain constrained by
volatility in raw material prices of cold rolled coil steel and
foreign currency risk as the company is majorly an exporter of
radiators and corrugated tanks.
RATING SENSITIVITIES
Negative: A decline in profitability and/or significant delay in
the successful execution of the planned capex leading to
deterioration in the credit metrics could be negative for the
ratings.
Positive: Substantial revenue growth along with improvement in
profitability as a result of successful implementation of planned
capex, leading to an improvement in the credit metrics would be
positive for the ratings.
COMPANY PROFILE
Established in 1989, HTRPL manufactures corrugated tanks and fin-
type radiators for power and distribution transformers. The
company has two manufacturing plants located in Rabale (Navi
Mumbai) and Khopoli (Raigad) with a total manufacturing capacity
of 1,200mt/month.
HTRPL's ratings:
-- Long-Term Issuer Rating: upgraded to 'IND BB+'/Stable from
'IND BB'/Stable
-- INR56.6 mil. long-term loans (reduced from INR75.6 mil.):
upgraded to 'IND BB+' from 'IND BB'; Outlook Stable
-- Proposed INR129.14 mil. long-term loans: assigned
'Provisional IND BB+'/Stable
-- INR118.9 mil. cash credit limits: upgraded to 'IND BB+'
from 'IND BB'; Outlook Stable
-- INR40 mil. Usance bills discounted (UBD) under letter of
credit (LC) (reduced from INR85 mil.): upgraded to
'IND BB+' from 'IND BB'; Outlook Stable
-- INR140 mil. letter of credit (increased from INR100 mil.):
affirmed at 'IND A4+'
HIGHNESS COTTON: CARE Reaffirms B+ Rating on INR6.50cr LT Loan
--------------------------------------------------------------
CARE reaffirms the rating assigned to bank facilities of Highness
Cotton Industries.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 6.50 CARE B+ Reaffirmed
Rating Rationale
The rating assigned to the bank facilities of Highness Cotton
Industries continues to remain constrained on account of
consistent decline in its scale of operations, leveraged capital
structure and weak debt coverage indicators and working capital
intensive nature of operations during FY16 (refers to the period
April 1 to March 31) (Provisional). The rating also continues to
remain constrained due to constitution as a proprietorship firm
and presence in highly fragmented cotton processing industry.
The rating, however, continues to derive strength from recent
improvement in profitability, the experience of the partners in
cotton ginning business and strategic location within the cotton-
producing belt of Gujarat.
The ability of HCI to increase its scale of operations, increase
profitability and improve debt coverage indicators and solvency
position with efficient utilization of the working capital
requirements are the key rating sensitivities.
Amreli-based HCI is a partnership firm engaged in the business of
cotton ginning and pressing. The firm was established in the year
1999, by five partners led by Mr. Ajijali Badrudinbhai. HCI is
operating from its plant located at Amreli-Gujarat. HCI has
installed capacity of processing 270 cotton bales per day as
onMarch 31, 2016.
HCI has registered a total operating income (TOI) of INR14 crore
and PAT of INR0.07 crore during FY16 (Provisional) as against TOI
of INR21.33 crore and PAT of INR0.01 crore during FY15. As per
the provisional results for 5MFY17, HCI has registered TOI of
INR4 crore.
INDESYS EQUIPMENTS: CARE Ups Rating on INR4.50cr Loan to B+/A4
--------------------------------------------------------------
CARE revises ratings assigned to bank facilities of Indesys
Equipments Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term/Short-term Bank 4.50 CARE B+/CARE A4
Facilities Revised from CARE D
Short term Bank Facilities 2.00 CARE A4
Rating Rationale
The revision in the ratings assigned to the bank facilities of
Indesys Equipments Private Limited factors in the timely
repayment of debt obligations since April 1, 2016.
The ratings continue to remain constrained on account of modest
scale of operations with fluctuating income and profitability
during the last three years ending FY16 (refers to the period
April 1 to March 31), weak liquidity profile marked by stretched
operating cycle, risk associated with tender-driven nature of
business coupled with presence in the competitive industry.
However, the ratings derive strength from established presence of
the entity along with experienced directors, long association
with reputed clientele, moderate capital structure and moderate
order book in hand providing medium term revenue visibility.
Entity's ability to increase its scale of operations while
strengthening its order book and improvement in profitability and
capital structure along with improvement in liquidity position
with better working capital management are the key rating
sensitivities.
IEPL was incorporated in February 1995 and is based out of
Lonavla (Pune). Prior to 2012, the company was known as Intel
Design Systems India Private Limited.
IEPL is engaged in the trading and manufacturing of CBRN
(chemical, biological, radiological and nuclear) protection
systems. The company is engaged in designing, developing,
manufacturing and supply of electronic, electrical, electro
mechanical systems, automatic fire detection systems and others
for various defence applications. Particularly, the company
provides military and non-military technologies in the armored
fighting vehicles, other special vehicle, on-board ships & air-
borne equipment's for civil and other defence applications. The
company also offers services which include overhauling, up-
gradation and modernization of military equipment.
The company is registered and approved supplier to DGQA
(Directorate General of Quality Assurance), DRDO (Defence
Research and Development Organization), Ordinance factories and
other Ministry of Defence organizations.
Raw material required for manufacturing includes connectors,
relay, capacitors, printed circuit boards, which are sourced
domestically and also imported from Russia and UK. During the
past 3 years ending FY16, domestic purchases contributed about
90% to the total purchases, while imports contributed about 10%.
Customers of the company have been DASS Hitachi Limited,
Ordinance Factories, Defence Laboratories, Heavy Vehicles
Factory, L & T Limited and others. In FY16, trading constituted
49% of the revenues, while manufacturing constituted 51%.
In FY16 (Provisional), IEPL earned PAT of INR0.03 crore on a
total operating income of INR7.08 crore against PAT of INR0.05
crore on a total operating income of INR10.65 crore in FY15 (A).
JASDEV SINGH: ICRA Suspends B- Rating on INR11cr Fund Based Loan
----------------------------------------------------------------
ICRA has suspended the long term rating of [ICRA] B- assigned to
the INR11.00 crore fund based facilities of Jasdev Singh Sandhu
Foundation. The suspension follows ICRA's inability to carry out
rating surveillance in the absence of requisite information from
the company.
KST INFRASTRUCTURE: Ind-Ra Withdraws BB- Long-Term Issuer Rating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has withdrawn KST
Infrastructure Limited's 'IND BB-(suspended)' Long-Term Issuer
Rating.
The ratings have been withdrawn due to lack of information. Ind-
Ra will no provide ratings or analytical coverage for KST.
Ind-Ra suspended KST's ratings on March 1, 2016.
KST's ratings:
-- Long-Term Issuer Rating: 'IND BB-(suspended)'; rating
withdrawn
-- INR28 mil. term loans: 'IND BB-(suspended)'; rating
withdrawn
-- INR100 mil. fund-based limits: 'IND BB-(suspended)'/
'IND A4+(suspended)'; ratings withdrawn
-- INR50 mil. non-fund-based bank guarantee:
'IND A4+(suspended)'; ratings withdrawn
-- INR422 mil. proposed term loans: 'Provisional IND BB-
(suspended)'; ratings withdrawn
KUSHAL FOODS: Ind-Ra Affirms BB+ Long-Term Issuer Rating
--------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed Kushal Foods
Private Limited's (KFPL) Long-Term Issuer Rating at 'IND BB+'.
The Outlook is Stable.
KEY RATING DRIVERS
The affirmation reflects KFPL's small scale of operations. Ever
since FY13, the company has retained its topline around 950 mil.
(FY16: INR959 mil., FY15: INR980 mil., FY14: INR1,043 mil.) and
there are no growth plans in the future. EBITDA margins improved
during FY14-FY16 at a CAGR of 4% to 4.24% in FY16 (FY15: 3.81%,
FY14:3.75%) due to improved realization.
The ratings reflect KFPL's moderate credit metrics with interest
coverage (EBITDA/gross interest expense) of 4.74x in FY16 (FY15:
5.05x, FY14: 4.33x) and net leverage (total adjusted net
debt /EBITDA) of 1.41x (2.56x, 3.21x). A fresh 'atta chakki'
plant was set up at the end of FY15 which led to the current
coverage but Ind-Ra expects the coverage to improve in the near
to medium-term due to stable EBITDA margins and repayment of term
loans. There are no further plans of any additional debt led
capacity expansion which shall keep the leverage levels
unaffected.
The ratings, however, factor in KFPL's comfortable liquidity with
around 86% utilization of its cash credit limits on average
during the 12 months ended August 2016. The working capital
cycle remains stable at 33 days in FY16 (FY15: 35 days; FY14: 42
days).
KFPL is a part of larger 'Mayur Group' which has average brand
recall in and around Uttar Pradesh (U.P.). The group's flagship
company Kanpur Edible Oils Pvt. Ltd. (IND BBB-/Stable) has an
established presence in U.P. in the edible oil industry. Thus,
it has access to group's strong distribution and marketing
network and moderate brand visibility.
RATING SENSITIVITIES
Positive: Substantial increase in size of operations and
diversification in the business line while maintaining current
credit metrics could be positive for the ratings.
Negative: Substantial decline in the profitability leading to
sustained deterioration in credit metrics could be negative for
the ratings.
COMPANY PROFILE
KFPL, incorporated in 2000, is a part of Mayur group based out of
U.P. KFPL has two business segments - bakery and flour. Under
flour division, KFPL produces Atta, Suji, Maida, Rawa and Bran
and sells under the brand name 'Mayur'. Under the bakery
division, it does contract manufacturing for Parle Biscuits
Private Limited wherein it produces various sub-brands of Parle
biscuits such as Parle-G, 20-20 cookies and Hide & Seek biscuits.
KFPL's ratings:
-- Long-Term Issuer Rating: affirmed at 'IND BB+'/Stable
-- INR21.2 term loans: assigned 'IND BB+'/Stable
-- INR95 mil. fund-based limit: affirmed at
'IND BB+'/Stable/'IND A4+'
-- Proposed INR33.8 mil. fund-based Limit: assigned
'Provisional IND BB+'/Stable/'Provisional IND A4+'
MARUTI NANDAN: CARE Assigns B+ Rating to INR5.0cr LT Bank Loan
--------------------------------------------------------------
CARE assigns 'CARE B+' and 'CARE A4' ratings to bank facilities
of Maruti Nandan Spinning Mill.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 5.00 CARE B+ Assigned
Long term/Short term Bank
Facilities 30.00 CARE B+/CARE A4
Assigned
Short term Bank Facilities 2.90 CARE A4
Rating Rationale
The ratings assigned to the bank facilities of Maruti Nandan
Spinning Mill are primarily constrained on account of
implementation risk associated with its new project. The ratings
also remain constrained due to its constitution as a partnership
firm, susceptibility of profitability to volatility in cotton
prices; along with inherent cyclicality associated with the
textile industry and presence in the highly fragmented textile
industry and limited presence in textile value chain.
The ratings, however, derive strength from the experience of the
promoters along with benefits derived from their engagement in
textile industry, location advantage of presence in Gujarat state
and fiscal benefits from government.
The ability of MNSM to complete the project in time within
envisaged cost parameters along with achieving projected scale of
operations and profitability with maintaining moderate financial
risk profile are the key rating sensitivities.
Ahmedabad-based (Gujarat) MNSM was formed in April 2015 by Mr.
Anuj Mittal, Mr. Gunjan Mittal, Mr. Gaurav Mittal and Mr. Pratik
Mittal. The firm is setting up a yarn spinning mill for
manufacturing open ended yarn having counts of 9s, 16s and 20s.
The greenfield project of setting up manufacturing facilities is
in process as on date. The firm will operate with 1,440 rotors
having an installed capacity of 5,411 TPA per annum. Total
expected project cost is INR47.74 crore that will be financed by
term loan of INR30 crore and balance by the promoters' funds.
Total cost of the proposed project incurred till the date of
August 20, 2016, was INR6.38 crore financed entirely by
promoters' contribution. The plant is expected to commence from
January 2017.
The partners are also associated with four other partnership
firms namely Shri Ram Cot Fab (SRCF, 'CARE B+'), Mahek Synthetics
Mills Private Limited, Balaji Polycot Private Limited and Shri
Laxmi Polycot Private Limited. SRCF is also a project phase
entity and has proposed to engage into manufacturing of grey
fabrics. BPPL and SLPPL are into manufacturing of denim fabric
and supply 100% of their production to MSMPL.
MARYA FROZEN: Ind-Ra Withdraws BB Long-Term Issuer Rating
---------------------------------------------------------
India Ratings and Research (Ind-Ra) has withdrawn Marya Frozen
Agro Foods Private Limited's 'IND BB(suspended)' Long-Term Issuer
Rating.
The ratings have been withdrawn due to lack of information. Ind-
Ra will no provide ratings or analytical coverage for Marya
Frozen Agro Foods.
Ind-Ra suspended Marya Frozen Agro Food's ratings on March 1,
2016.
Marya Frozen Agro Foods' ratings:
-- Long-Term Issuer Rating: 'IND BB(suspended)'; rating
withdrawn
-- INR80 mil. term loans: 'IND BB(suspended)'; rating
withdrawn
-- INR200 mil. fund-based limits: 'IND BB(suspended)'/
'IND A4+(suspended)'; ratings withdrawn
MN BIO-TECHNOLOGY: Ind-Ra Assigns BB- Rating on INR545MM NCDs
-------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned MN Bio-
Technology Private Limited's INR545 mil. of single class non-
convertible debentures (NCDs) a final 'IND BB-(SO)' rating with
Stable Outlook. The transaction is a commercial mortgage-backed
securities (CMBS) issuance with a five-year tenor.
The final rating addresses the timely payment of interest and
principal on each payment due date until the scheduled maturity,
in accordance with the transaction documentation. The NCDs are
backed by pari passu charge on receivables from existing
commercial leases at the rent generating properties in
Turkapally, Telangana; these are held in four different
companies: Genome Valley Tech Parks & Incubators Private Limited,
Takshila Tech Parks & Incubators (India) Private Limited,
Alexandria Life Science Center Private Limited (Pragnapur) and
Alexandria Knowledge Park Private Limited (Alexandria). The
charge of NCDs issued by MNBTPL on the receivables of the
aforementioned companies is pari passu with INR1,675 mil. NCDs
issuance by a group company: MN Takshila Industries Private
Limited (MNTIPL).
The NCDs will mature in five years with approximately 28.4%
scheduled amortization through quarterly installments prior to
the final maturity date. However, MNBTPL also has a call option
to redeem the NCDs any time between the end of the third year and
fifth year. Additionally, debenture holders shall also have a
put option to require the issuer to redeem the NCDs during this
period.
KEY RATING DRIVERS
Adequate Security Package: The NCDs to be issued by MNTIPL and
MNBTPL are backed by pari passu charge on the securities
mentioned below to be created in favor of a common security
trustee:
-- Fixed assets, receivables, current assets, movable assets
and bank accounts of MNBTPL and MNTIPL
-- Fixed assets, receivables, current assets, movable assets
and bank accounts of Genome, Takshila, Pragnapur,
Alexandria, Alexandria Gachibowli Tech park Pvt. Ltd.
(Gachibowli I), Alexandria Gachibowli II Tech park Pvt.
Ltd. (Gachibowli II) and Deccan Bio Ventures Pvt. Ltd.
These companies houses buildings with a total leasable area
of .534m sq. ft, in addition to land parcels admeasuring
107 Acres
-- A pledge of 93.05% shareholding of Alexandria, 97.96%
shareholding of Takshila, 66.82% shareholding of Genome and
100% shareholding of Pragnapur
The NCDs shall also be guaranteed by MNTIPL, Alexandria, Genome,
Takshila, Pragnapur, Gachibowli I, Gachibowli II and Deccan Bio.
Low Debt Service Coverage and moderate LTV: At the current level
of operating income, the issuer would be able to service the
interest obligations but there could be significant stress in
repayment of principal instalments as envisaged. However, as per
transaction documents, the, debt service coverage ratio (DSCR)
for any financial quarter shall not be less than 1.3x and in the
agency's stabilised scenario, average DSCR is 1.01x over the
first three years from transaction closing.
Loan-to-value (LTV) as per the valuation provided by Colliers
International (India) Property Services Pvt. Ltd. (Colliers
International) is 51.3%; but in Ind-Ra's stabilised scenario, the
LTV for the transaction is about 60%. However, the agency
estimates that the LTV on the basis of the value of the rent
yielding assets alone would be about 78%. These credit metrics
are commensurate with the assigned rating.
Moderate Occupancy; Expected to Improve: The issuer shall ensure
that Alexandria, Pragnapur, Takshila and Genome will, by no later
than the earlier of (i) the expiry of 24 months from transaction
closing, and (ii) 31 October 2018, lease, sub-lease or rent not
less than 75% of the total leasable area. The current occupancy
rate is about 65% according to the valuation report by Colliers
International dated April 2016. The rental rates are slightly
higher than the average rates in the micro-market owing to the
specialised nature of Grade A office/laboratory spaces in
biological clusters.
DSRA: The debt holders benefit from the presence of a pre-funded
debt service reserve account (DSRA) equivalent to following three
months' interest service and principal repayments. The DSRA
shall be available throughout the tenor of the transaction.
RATING SENSITIVITIES
Negative: A 10% decline on Ind-Ra's consolidated adjusted net
operating income (of INR314.1 mil. for MNTIPL and MNBTPL) could
result in a one-notch rating downgrade.
COMPANY PROFILE
MNBTPL is a wholly-owned subsidiary of LC Cerestra Core
Opportunities Fund (LC Cerestra), which owns two buildings with a
total leasable area of 0.145m sq. ft., along with land parcels in
Genome Valley in a bio-tech cluster located 45km from Hyderabad.
LC Cerestra is a private limited company incorporated in
Singapore on March 24, 2016, as an Exempt Private Company Limited
by Shares. The registered office of the Fund is situated in the
Republic of Singapore and it shall act as a pooling vehicle for
investments to be made as per the transaction.
MN TAKSHILA: Ind-Ra Assigns BB- Rating on INR1,675MM NCDs
---------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned MN Takshila
Industries Private Limited's (MNTIPL) INR1,675 mil. single class
fixed rate non-convertible debentures (NCDs) a final 'IND BB-
(SO)' rating with Stable Outlook. The transaction is a
commercial mortgage-backed securities (CMBS) issuance with a
five-year tenor.
The final rating addresses the timely payment of interest and
principal on each payment due date until the scheduled maturity,
in accordance with the transaction documentation. The NCDs are
backed by receivables from existing commercial leases at the rent
generating properties of three asset special purpose vehicles
(SPVs) proposed to be acquired by MNTIPL. These three asset SPVs
are Genome Valley Tech Parks & Incubators Private Limited,
Takshila Tech Parks & Incubators (India) Private Limited and
Alexandria Life Science Center (Pragnapur) Private Limited.
These asset SPVs shall be indirectly held by LC Cerestra Core
Opportunities Fund Pte. Ltd. (LC Cerestra) via MNTIPL subsequent
to the acquisition through the NCD issuance proceeds.
KEY RATING DRIVERS
Sponsorship and Management: MNTIPL's key sponsor is LC Cerestra
which has appointed Cerestra Advisors Limited (Cerestra) as the
Asset Advisor. Vishal Goel, Partner at Cerestra, has significant
experience, conceptualising and developing the Genome Valley
knowledge cluster, which is spread over 10,000 acres in Hyderabad
and houses the three rent generating properties.
Moderate-to-Low EBITDA and DSCR; Moderate-to-High LTV: As per
transaction documents, net debt-to-EBITDA shall not be greater
than 6.5x during the transaction tenor. Additionally, loan-to-
value (LTV) shall not be more than 60% at transaction closing and
at any time during the transaction tenor and debt service
coverage ratio (DSCR) for any financial quarter shall not be less
than 1.3x. In the agency's stabilized scenario, net cash flow
has an average DSCR of 1.1x over the first three years from
transaction closing. Any improvement in the coverage level is
predicted on additional leasing as the current occupancy of the
three assets on a consolidated basis is close to 65%.
Additionally, the NCD issuance amount is 52.3% LTV of the
consolidated property's estimated value (value of rent generating
properties plus value of common land parcels) by Colliers
International, a real estate consultancy; this is below the
covenanted level. However, the agency estimates that the LTV on
the basis of the value of the rental asset alone would be about
74%. These credit metrics are commensurate with the assigned
rating.
Partial Amortisation Reduces Refinancing Risk: Ind-Ra views the
amortizing structure of the NCDs as less risky than the one that
pays interest only, as amortization reduces the size of the
balloon payment and potential refinancing risk. With 16.1%
scheduled amortisation built in the transaction structure in the
first four years from the issuance date, the balloon LTV is close
to 46.4% based on agency's estimations. However, unless the
asset occupancy increases from the current level of 65%,
mandatory amortization may be onerous, which constrains the
rating to the current level.
Adequate Security Package: The security package in favour of the
debenture trustee includes a pledge of 100% shares of
Pragnapur,97.96% shares of Takshila and 66.82% shares of Genome.
Additionally, it includes pari-passu charge on equitable mortgage
of the three rent generating properties and common land parcels
admeasuring 107 acres and pari-passu charge on all receivables
and related accounts of all the rent generating properties. The
charge on total receivables and other security available is pari
passu with proposed INR545m NCDs issuance by a group company MN
Bio-Technology Private Limited (MNBTPL).
Moderate Occupancy; Expected to Improve: Issuer shall ensure that
the three asset SPVs will, by no later than the earlier of (i)
the expiry of 24 months from transaction closing, and (ii) 31
October 2018, lease, sub-lease or rent not less than 75% of the
total leasable area. The current occupancy rate is about 65%,
according to the valuation report by Colliers International dated
April 2016. The rental rates are slightly higher than the
average rates in the micro-market owing to the specialised nature
of Grade A office/laboratory spaces in biological clusters.
Concentrated Tenant Mix: Takshila, which contributes
approximately 76% of the consolidated net operating income of the
three asset SPVs in the agency's stabilized scenario, is highly
concentrated with the top tenant accounting for 64% of its total
rental income in FY16 (among four tenants). The concentration
risk is mitigated by the remaining lease period of the tenant
being 4.9 years and the tenant having a seasoning of 4.3 years as
at August 2016. However, the remaining lock-in period of the top
tenant is only close to 0.8 years as at August 2016, and hence,
there still exists a certain risk of early termination of lease
by the tenant after the expiry of the lock-in period.
DSRA: Debt holders benefit from the presence of a pre-funded debt
service reserve account (DSRA) equivalent to the following three
months' of interest service and principal repayments at the
transaction closing. The DSRA shall be available throughout the
tenor of the transaction.
RATING SENSITIVITIES
Negative: An decline of over 10% from the stabilized net
operating income assumed by the agency (INR254.5 mil.) for the
three assets - Genome, Takshila and Pragnapur - on a consolidated
basis for the entire tenor of the transaction could result in a
one-notch rating downgrade.
TRANSACTION STRUCTURE
The NCD will mature in five years with approximately 16.1%
scheduled amortization proposed in the first four years from
transaction closing. However, MNTIPL also has a call option to
redeem the NCDs anytime between the end of the third year and
fifth year. Additionally, debenture holders shall also have a
put option to require the issuer to redeem the NCDs during this
period.
LC Cerestra proposes to raise a total of INR2,220 mil. through
two NCD issuances -- INR1,675 mil. and INR545 mil. -- through its
wholly-owned subsidiaries MNTIPL and MNBTPL for acquiring four
asset SPVs having rent generating properties - Genome, Takshila,
Pragnapur and Alexandra Knowledge Park Private Limited and three
land SPVs: Deccan Bio Ventures Private Limited (Deccan),
Alexandria Gachibowli Tech Park Private Limited (Gachibowli-I),
Alexandria Gachibowli II Tech Park Private Limited (Gachibowli-
II).
The total leasable area of all the four rent generating
properties is 0.567m sq. ft. as per valuation the report by
Colliers International; the current occupancy rate is 65%. The
total land area of the four asset SPVs and three land SPVs is 107
acres.
The total combined LTV for the consolidated debt of INR2,220 mil.
proposed to be raised through two NCD issuances is 51.3%, as per
the valuation report by Colliers International and the average
DSCR is 1.01x over the first three years from transaction closing
in Ind-Ra's stabilized scenario. Proposed NCDs are expected to
amortize by 16.7% in the first four years and the balloon LTV is
close to 50.3%, based on agency's estimations.
COMPANY PROFILE
LC Cerestra is a private limited company incorporated in
Singapore on March 24, 2016, as an Exempt Private Company Limited
by Shares. The registered office of the Fund is situated in the
Republic of Singapore. The Fund shall act as a pooling vehicle
for investments to be made as per the proposed transaction.
Lighthouse Canton Pte. Ltd. (LCPL) is the fund manager of LC
Cerestra, while Cerestra shall act as the Asset Advisor. LCPL is
a private limited company incorporated in Singapore on 29 July
2014 and has been appointed by the Fund to manage, supervise,
select and evaluate investments; it will perform fund management,
capital raising, investor relations and other fund related
functions.
Cerestra was incorporated in 2007 as Religare Finance Limited.
Cerestra is currently an affiliate of The Capital Partnership and
is an investment advisor to real estate private equity funds
targeting investments in India. It is driven by professionals
with a cumulative real estate exposure of over 40 years.
MURLIDHAR AGRO: ICRA Suspends B+ rating on INR7.0cr Cash Loan
-------------------------------------------------------------
ICRA has suspended the [ICRA]B+ rating assigned to the INR7.11
crore long term - term loan and cash credit facilities of
Murlidhar Agro Food Private Limited. The suspension follows ICRAs
inability to carry out a rating surveillance in the absence of
the requisite information from the company.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based-Term loan 0.11 [ICRA]B+; Suspended
Fund Based-Cash Credit 7.00 [ICRA]B+; Suspended
Murlidhar Agro Food Private Limited was incorporated in 2005 and
is engaged in the business of milling par boiled rice. The
company operates from its plant located at Kheda in the state of
Gujarat, with an installed capacity of 18000 MTPA (Metric Tonne
Per Annum). The company is promoted by Mr. Hitesh Patel, Mr.
Hareshkumar Bhavani, Mr. Ashok Makwana and Mr. Neelangi Patel,
who set up the unit in 2005 as a private limited company.
NAHAR TEXTILES: Ind-Ra Raises Long-Term Issuer Rating to BB
-----------------------------------------------------------
India Ratings and Research (Ind-Ra) has upgraded Nahar Textiles
Pvt Ltd's (NTPL) Long-Term Issuer Rating to 'IND BB' from
'IND BB-'. The Outlook is Stable.
KEY RATING DRIVERS
The upgrade reflects an improvement in NTPL's credit metrics.
According to FY16 financials, interest coverage (operating
EBITDA/gross interest expense) was 4.4x (FY15:1.48x), net
financial leverage (total adjusted net debt/operating EBITDAR)
was 1.5x (5x) and EBITDA margin was 13.4% (12.3%). EBITDA margin
improved mainly on account of lower raw material costs. The
improvement in the credit metrics is mainly on account of
improved profitability and reduced debt. The liquidity profile
of the company is moderate with average utilization of around 71%
of its working capital limits during the 12 months August 2016.
The ratings are supported by over three decades of experience of
NTPL's founders in the garments manufacturing and exports
business.
The ratings, however, are constrained on account of its small
scale of operations as indicated by its revenue of INR546 mil.
during FY16 (FY15:INR472 mil.).
RATING SENSITIVITIES
Positive: Any further improvement in the scale of operations
while maintaining the credit profile could be positive for the
ratings.
Negative: A decline in the scale of operations on a sustained
basis could be negative for the ratings.
COMPANY PROFILE
Incorporated in 1982, NTPL manufactures and exports fabrics. The
company is managed by Ashwin Nahar and family. Its registered
office is in Mumbai.
NTPL' ratings:
-- Long-Term Issuer Rating: upgraded to 'IND BB' from
'IND BB-'; Outlook Stable
-- INR115 mil. fund-based working capital limits: upgraded to
'IND BB'/Stable from 'IND BB-'/Stable
-- INR50 mil. non-fund-based limit: affirmed at 'IND A4+'
P K OVERSEAS: Ind-Ra Assigns BB Long-Term Issuer Rating
-------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned P K Overseas
Private Limited (PKO) a Long-Term Issuer Rating of 'IND BB'. The
Outlook is Stable.
KEY RATING DRIVERS
The ratings reflect PKO's weak credit metrics and volatile EBITDA
margins over FY14-FY16 due to its presence in the commoditized
agribusiness sector. FY16 financial indicate EBITDA margins of
.15% (FY15:2.34%; FY14:2.04%), net interest coverage (operating
EBITDAR/net interest expense) of 1.55x (1.32x; 1.38x) and
financial leverage (total adjusted debt/operating EBITDA) of
5.80x (6.94x; 9.18x).
The ratings further reflect nominal growth in the company's
revenue in FY16 despite growth in the quantity of rice sold on
account of poor realization; revenue in FY16 stood at INR1,933
mil. (FY15: INR1,907 mil.; FY14: INR1521 mil.).
The ratings, however, are supported by PKO's comfortable
liquidity position as evident from around 80% average utilization
of its fund-based working capital limits during the 12 months
ended
June 2016. The ratings are further supported by over 35 years of
experience of PKO's promoters in rice processing.
RATING SENSITIVITIES
Positive: Overall improvement in the operating margins and credit
profile could be positive for the ratings.
Negative: Further dip in the operating margins and/or stretch on
the overall liquidity profile could be negative for the ratings.
COMPANY PROFILE
PKO, an ISO 22000:2005 company incorporated in May 1994, is
engaged in processing and exporting of both basmati and non-
basmati rice. It has an installed capacity to process eight tons
rice hourly with four prominent basmati rice brands named India
Salaam Basmati Rice, Mansa Basmati Rice, Trimurti Basmati Rice
and Rajshahi Basmati Rice. Basmati rice produced by the company
complies with the international standard; the company was also
awarded 'Export House' by ministry of Commerce and Industry, the
government of India.
PKO's ratings:
-- Long-Term Issuer Rating: assigned 'IND BB'/Stable
-- INR380 mil. fund-based working capital limits: assigned
'IND BB' (Stable)/'IND A4+'
-- Proposed INR170 mil. fund-based working capital limits:
assigned 'Provisional IND BB'/Stable/'Provisional IND A4+'
RAJESH STEEL: Ind-Ra Suspends BB Long-Term Issuer Rating
--------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Rajesh Steel &
Wire Industries' (RSWI) 'IND BB' Long-Term Issuer Rating to the
suspended category. The Outlook was Stable. The rating will now
appear as 'IND BB(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 RSWI.
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.
RSWI's ratings:
-- Long-Term Issuer Rating: migrated to 'IND BB(suspended)'
from 'IND BB'/Stable
-- INR50 mil. fund-based working capital limits: migrated to
'IND BB(suspended)'/ 'IND A4+(suspended)' from
'IND BB'/Stable/'IND A4+'.
-- Proposed INR120 mil. fund-based working capital limits:
'Provisional IND BB'/Stable/'Provisional IND A4+'; ratings
withdrawn as the company did not proceed with the
instrument envisaged
-- INR30 mil. non-fund-based working capital limits: migrated
to 'IND A4+(suspended)' from 'IND A4+'
RAMKRUPA GINNING: CARE Reaffirms B+ Rating on INR20cr LT Loan
-------------------------------------------------------------
CARE reaffirms the rating assigned to bank facilities of Ramkrupa
Ginning And Pressing Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 20.00 CARE B+ Reaffirmed
Rating Rationale
The rating assigned to the bank facilities of Ramkrupa Ginning &
Pressing Private Limited continues to be constrained on account
of its thin profit margins, high financial leverage and weak debt
coverage indicators. The rating continues to take cognizance of
RGPPL's presence in single segment of cotton ginning in the
entire textile value chain that involves limited value addition
and seasonality associated with the procurement of raw material
resulting into working capital intensive nature of operations.
The rating, however, continues to draw strength from the wide
experience of the promoters in the cotton industry coupled with
location advantage in terms of proximity to the cotton growing
regions of Gujarat, which is the largest cotton growing region in
India.
The ability of RGPPL to increase its scale of operations, improve
profitability, financial structure and efficiently manage working
capital would be the key rating sensitivities.
Incorporated in 2006, RGPPL is promoted by Mr. Bipinbhai
Gondaliya. It is into the business of cotton ginning and pressing
and trading of clean cotton. RGPPL is a family centric business
which is owned and managed by the family members with four
directors, who have average experience of over 15 years in the
cotton industry. RGPPL produces cotton bales and cotton seeds
with its manufacturing facility located at Gondal region, Gujarat
which is one of the leading cotton producing states in India. As
on March 31, 2016, RGPPL has an installed capacity to produce
8,500 metric tonnes per annum (MTPA) of cotton bales.
As per FY16 (refers to the period April 1 to March 31)
provisional results, RGPPL reported total operating income (TOI)
of INR65.28 crore and PAT of INR0.17 crore as against TOI of
INR102.73 crore and PAT of INR0.05 crore during FY15 (audited).
RAMKY ELSAMEX: CARE Reaffirms 'D' Rating on INR196.99cr LT Loan
---------------------------------------------------------------
CARE reaffirms the rating assigned to the bank facilities of
Ramky Elsamex Hyderabad Ring Road Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 196.99 CARE D Reaffirmed
Rating Rationale
The rating assigned to the bank facilities of Ramky Elsamex
Hyderabad Ring Road Limited continues to remain constrained by
delays in debt servicing owing to delays in receiving annuities
from HMDA (Hyderabad Metropolitan Development Authority).
REL is a Special Purpose Vehicle (SPV) incorporated on July 18,
2007, to design, construct, develop, finance, operate and
maintain eight-lane access-controlled expressway under Phase II -
A program in the Hyderabad city for a stretch of 12.63 km from
Tukkuguda (Km 121) to Shamshabad (Km 133.63), under the Build,
Operate & Transfer (BOT) Annuity Basis. The project has been
awarded under annuity scheme by HMDA (erstwhile Hyderabad Urban
Development Authority - HUDA).
REL is promoted by the Hyderabad-based Ramky Infrastructure Ltd
and Elsamex SA, a Spanish engineering and construction company,
and a subsidiary of IL&FS Transportation Networks Limited.
The concession is for a period of 15 years, including a 30-month
implementation period. The project was completed and awarded
Provisional Completion Certificate (PCC) on March 31, 2010 (with
retrospective effect from November 26, 2009). Considering the
PCC, the company is eligible for bonus for early completion.
However, REL received Final Completion Certificate retroactive
from September 16, 2010. The company is in dispute with HMDA with
respect to the date of final completion and has invoked
arbitration for the same. But during the year FY15 (refers to the
period April 1 to March 31) Arbitral Tribunal terminated the
arbitration proceedings because of disagreement of fees. During
FY16, both the company and HMDA have appointed Arbitrators and
the matter is now pending before the Arbitral Tribunal.
During FY16 (A), REL reported a total income of INR63.13 crore
(INR63.04 crore in FY15) and a net profit of INR4.27 crore
(INR1.19 crore in FY15).
RECMET ALLOYS: CARE Assigns B+ Rating to INR9.95cr LT Bank Loan
---------------------------------------------------------------
CARE assigns 'CARE B+' rating to the bank facilities of Recmet
Alloys Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 9.95 CARE B+ Assigned
Rating Rationale
The rating assigned to the bank facilities of Recmet Alloys
Private Limited is constrained primarily on account of
stabilization risk associated with recently completed capex, its
presence in fragmented lead recycling and smelting industry with
limited pricing flexibility and inherent cyclicality associated
with the end-user industry. The rating is also constrained by
regulatory risk pertaining to duty structure and compliance with
environmental norms.
The rating, however, derive comfort from the experience of its
qualified promoters and key management personnel having vast
experience in the industry and locational advantage of its
manufacturing facility.
The ability of RAPL to stabilize the operations and achieve the
envisaged revenue and profit margins would be the key rating
sensitivities.
RAPL was incorporated in October 2010 with an objective of
setting up a Lead refining and smelting unit at Jambusar, Bharuch
district (Gujarat), at a proposed refining capacity of 24,000 MT
per annum. RAPL's registered office is in New Delhi but all its
operations are carried out from its Vadodara (Gujarat) office as
this is near to its plant in Jambusar, Bharuch district
(Gujarat). RAPL is promoted by Mr. Rabindra Agarwal, Mr. Sanjay
Saini, Mr. Kunj Behari Sarraf andMr Anup Agarwal with the first
three directors having experience of more than a decade into Non-
ferrous metal industry. RAPL has completed its project of setting
up lead refining and smelting unit in April 2016. The total cost
of the project was INR12.85 core which was funded through debt to
equity of 0.45 times.
RUCHI SOYA: CARE Lowers Rating on INR3,794.71cr LT Loan to 'B'
---------------------------------------------------------------
CARE revises the ratings assigned to bank facilities of Ruchi
Soya Industries Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 3,794.71 CARE B Revised from
Facilities CARE BB+
Long Term/Short Term
Bank Facilities 6,931.40 CARE B/CARE A4 Revised
from CARE BB+/CARE A4+
Rating Rationale
The revision in the ratings of the bank facilities of Ruchi Soya
Industries Ltd. is on account of its continued subdued operating
performance in Q1FY17 which has resulted in deterioration in its
debt coverage indicators and stress on its liquidity.
The ratings continue to remain constrained on account of RSIL's
very high leverage due to significant erosion of its net worth in
FY16, its working capital intensive operations with an elongated
operating cycle; and its presence in an intensely competitive
agri-commodity business with inherently thin profitability that
is susceptible to volatility in commodity prices, foreign
exchange rates and changes in duty structure for edible oil
imports.
The ratings, however, continue to derive strength from RSIL's
established operations in the domestic edible oil market with a
good mix of inland and port-based manufacturing facilities and
its widespread marketing and distribution network.
CARE has also noted the announcement made by RSIL to set-up a new
Joint Venture (JV) company with Adani Wilmar Ltd.
(AWL) which will have exclusive procurement, marketing and
distribution rights in the domestic market for various products
of the JV partners, utilizing the combined portfolio of their
brands. As of now, there is only a non-binding understanding
between the proposed JV partners and the talks are presently at a
nascent stage and would be subject to definitive binding
documentation along with approval by various statutory and
regulatory authorities.
CARE has also taken note of the ban imposed on RSIL to buy, sell
or deal in the securities market by the Securities and Exchange
Board of India (SEBI) vide its ex-parte ad-interim order dated
May 24, 2016.
The ability of RSIL to significantly improve and protect its
profitability with effective hedging of commodity price risk and
foreign exchange risk, raise adequate quantum of long-term funds
to alleviate the present stress on the liquidity of the company
in a time bound manner and significantly improve its capital
structure would be the key rating sensitivities.
Incorporated in January 1986, Ruchi Soya Industries Ltd. (RSIL)
is engaged in crushing of oil seeds and extraction/refining of
edible oil along with manufacturing of related products like
vanaspati, textured proteins and lecithin. It is also engaged in
import/export as well as domestic trading of various agri-
commodities. It is the flagship entity of the Indore, Madhya
Pradesh based Ruchi Group, which has business interests spread
across various sectors including edible oil, agricommodity
trading, liquid and dry storage warehousing for agri-products and
real estate. RSIL has manufacturing presence at 20 locations
across the country.
Based on the published financials on stock exchanges, RSIL
registered a net loss of INR879 crore on a total operating
income of INR27,805 crore in FY16 (refers to the period from
April 1 to March 31), compared with a net profit of INR61 crore
on a total operating income of INR28,402 crore in FY15 (based on
audited financials). Further, as per provisional financials,
during Q1FY17, RSIL reported a net profit of INR1 crore on a
total operating income of INR5,016 crore, compared with a PAT of
INR89 crore on a total operating income of INR6,110 crore during
Q1FY16. In fact, it incurred an operating loss before tax of
INR45 crore in Q1FY17; the net profit was largely on account of
exceptional income of INR45 crore on account of sale of its
investment in one of its JVs.
RUCHIWORLDWIDE: CARE Cuts INR1,200cr Loan Rating to B(SO)/A(4SO)
----------------------------------------------------------------
CARE revises the ratings assigned to bank facilities of
Ruchiworldwide Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term/Short Term 1,200 CARE B(SO)/CARE A4(SO)
Bank Facilities Revised from
CARE BB+(SO)/CARE A4+(SO)
Rating Rationale
The ratings of the bank facilities of Ruchi Worldwide Ltd.
continue to factor the unconditional and irrevocable corporate
guarantee of Ruchi Soya Industries Ltd. (RSIL; rated CARE B/CARE
A4) to the extent of its shareholding in Ruchi Worldwide Ltd.,
i.e., 52.48%.
The standalone credit profile of RWL continues to remain
constrained on account of its high leverage due to significant
erosion of its networth in FY16.
The standalone credit quality of RWL also continues to remain
constrained on account of its low profitability inherent to its
trading operations, its exposure to volatility associated with
commodity prices and foreign exchange rates.
The standalone credit profile of RWL, however, continues to
factor in its position as a part of the Ruchi Group which is
well-established in the soya and edible oil processing industry
and its operational synergies with RSIL, its parent and flagship
entity of the group.
The ability of RWL to protect and improve its profitability in
the light of volatility in agri-commodity prices and raise
adequate quantum of long-term funds would be the key rating
sensitivities for its standalone credit quality.
The revision in the ratings of the bank facilities of RWL follows
the revision in the ratings of the bank facilities of RSIL from
'CARE BB+/CARE A4+' to 'CARE B/CARE A4'.
The revision in the ratings of the bank facilities of Ruchi Soya
Industries Ltd. (RSIL) is on account of its continued subdued
operating performance in Q1FY17 which has resulted in
deterioration in its debt coverage indicators and stress on its
liquidity.
The ratings continue to remain constrained on account of RSIL's
very high leverage due to significant erosion of its net
worth in FY16, its working capital intensive operations with an
elongated operating cycle; and its presence in an intensely
competitive agri-commodity business with inherently thin
profitability that is susceptible to volatility in commodity
prices, foreign exchange rates and changes in duty structure for
edible oil imports.
The ratings, however, continue to derive strength from RSIL's
established operations in the domestic edible oil market with a
good mix of inland and port-based manufacturing facilities and
its widespread marketing and distribution network.
CARE has also noted the announcement made by RSIL to set-up a new
Joint Venture (JV) company with Adani Wilmar Ltd. which will have
exclusive procurement, marketing and distribution rights in the
domestic market for various products of the JV partners,
utilizing the combined portfolio of their brands. As of now,
there is only a non-binding understanding between the proposed JV
partners and the talks are presently at a nascent stage and would
be subject to definitive binding documentation along with
approval by various statutory and regulatory authorities.
CARE has also taken note of the ban imposed on RSIL to buy, sell
or deal in the securities market by the Securities and
Exchange Board of India (SEBI) vide its ex-parte ad-interim order
dated May 24, 2016.
The ability of RSIL to significantly improve and protect its
profitability with effective hedging of commodity price risk and
foreign exchange risk, raise adequate quantum of long-term funds
to alleviate the present stress on the liquidity of the
company in a time bound manner and significantly improve its
capital structure would be the key rating sensitivities.
RWL is a subsidiary of RSIL and a part of the Indore, Madhya
Pradesh based Ruchi Group of industries. RWL is the international
trading arm of Ruchi Group involved in trading of various agri-
commodities including edible oil, raw cotton, castor seeds and
oil, coffee, grain and pulses. As on March 31, 2015, RSIL held
52.48% equity in RWL and the balance was with the Shahra family,
the promoters of RSIL.
Based on the provisional financials, RWL registered a net loss of
INR55 crore on a total operating income of INR2,685 crore in FY16
(refers to the period from April 1 to March 31), compared with a
net profit of INR2 crore on a total operating income of INR2,414
crore in FY15 (based on audited financials). During Q4FY16, RWL
incurred a net loss of INR58 crore on a TOI of INR1,353 crore.
About the Guarantor, Ruchi Soya Industries Ltd.
Incorporated in January 1986, Ruchi Soya Industries Ltd. is
engaged in crushing of oil seeds and extraction/refining of
edible oil along with manufacturing of related products like
vanaspati, textured proteins and lecithin. It is also engaged in
import/export as well as domestic trading of various agri-
commodities. It is the flagship entity of the Indore, Madhya
Pradesh based Ruchi Group, which has business interests spread
across various sectors including edible oil, agricommodity
trading, liquid and dry storage warehousing for agri-products and
real estate. RSIL has manufacturing presence at 20 locations
across the country.
Based on the published financials on stock exchanges, RSIL
registered a net loss of INR879 crore on a total operating
income of INR27,805 crore in FY16 (refers to the period from
April 1 to March 31), compared with a net profit of INR61 crore
on a total operating income of INR28,402 crore in FY15 (based on
audited financials). Further, as per provisional financials,
during Q1FY17, RSIL reported a net profit of INR1 crore on a
total operating income of INR5,016 crore, compared with a PAT of
INR89 crore on a total operating income of INR6,110 crore during
Q1FY16. In fact, it incurred an operating loss before tax of
INR45 crore in Q1FY17; the net profit was largely on account of
exceptional income of INR45 crore on account of sale of its
investment in one of its JVs.
S.R. EDUCATIONAL: ICRA Suspends 'D' Rating on INR9.35cr Loan
------------------------------------------------------------
ICRA has suspended the long term rating of [ICRA] D assigned to
the INR9.35 crore term loan facilities of S.R. Educational Trust.
The suspension follows ICRA's inability to carry out rating
surveillance in the absence of requisite information from the
company.
SAMARA COLD: Ind-Ra Assigns B Long-Term Issuer Rating
-----------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Samara Cold
Chain (SCC) a Long-Term Issuer Rating of 'IND B'. The Outlook is
Stable. The agency has also assigned SCC's INR188 mil. term loan
a Long-term 'IND B' rating with a Stable Outlook.
KEY RATING DRIVERS
The ratings reflect SCC's lack of operational track record in
cold storage business and its presence in a highly competitive
and fragmented food industry with low entry barriers. The
ratings are constrained by the substantial term loan of INR188
mil. availed by the company for the installation of plant and
machinery. The cash flow will come under strain if operating
performance is below the expected level of SCC.
The ratings, however, are supported by promoter's experience of
more than two decades in providing cold storage services.
RATING SENSITIVITIES
Negative: Any additional debt-led capex and/or delay in achieving
stability in the operating performance after the commencement of
operations impacting the debt serviceability capability of the
company could be negative for the ratings.
Positive: The ability to timely ramp up the operations of the
cold stores along with achieving stable operating profitability
will be positive for the ratings.
COMPANY PROFILE
SCC was established in November 2015 as a partnership firm and
has proposed to engage in cold storage of apple and other fruits.
SCC is installing a 5500 MT controlled atmosphere cold storage
and 2700 MT normal cold storage at Kundli in Sonipat (Haryana).
The firm expects to commence operations by October 2016.
SEC BUILDTECH: Ind-Ra Withdraws B+ Long-Term Issuer Rating
----------------------------------------------------------
India Ratings and Research (Ind-Ra) has withdrawn SEC Buildtech
Private Limited's 'IND B+(suspended)' Long-Term Issuer Rating.
The ratings have been withdrawn due to lack of information. Ind-
Ra will not provide ratings or analytical coverage for SEC
Buildtech Private Limited.
Ind-Ra suspended SEC Buildtech Private Limited's ratings on
March 1, 2016.
SEC Builtech Private Limited's ratings:
-- Long-Term Issuer Rating: 'IND B+(suspended)'; rating
withdrawn
-- INR10 mil. fund-based limits: 'IND B+(suspended)'/
'IND A4(suspended)'; ratings withdrawn
-- INR45 mil. non-fund-based limits: 'IND A4(suspended)';
ratings withdrawn
SH-HARYANA WIRES: Ind-Ra Withdraws BB+ Long-Term Issuer Rating
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) has withdrawn SH-Haryana
Wires Limited's (SHW) IND BB+(suspended)' Long-Term Issuer
Rating.
The ratings have been withdrawn due to lack of information. Ind-
Ra will no provide ratings or analytical coverage for SHW.
Ind-Ra suspended SHW's ratings on March 2, 2016.
SHW's ratings:
-- Long-Term Issuer Rating: 'IND BB+(suspended)'; rating
withdrawn
-- INR31.6 mil. term loans: 'IND BB+(suspended)'; rating
withdrawn
-- INR110 mil. fund-based working capital limits:
'IND BB+(suspended)'/'IND A4+(suspended)'; ratings
withdrawn
-- INR171.2 mil. non-fund-based working capital limits:
'IND BB+(suspended)'/'IND A4+(suspended)'; ratings
withdrawn
SHAKUN GASES: Ind-Ra Suspends B- Long-Term Issuer Rating
--------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Shakun Gases
Private Limited's (SGPL) 'IND B-' Long-Term Issuer Rating to the
suspended category. The Outlook was Stable. The rating will now
appear as 'IND B-(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 SGPL.
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.
SGPL's ratings:
-- Long-Term Issuer Rating: migrated to 'IND B-(suspended)'
from 'IND B-'/Stable
-- INR40 mil. fund-based working capital limits: migrated to
'IND B-(suspended)' from 'IND B-'
-- INR190 mil. non-fund-based working capital limits: migrated
to 'IND A4(suspended)' from 'IND A4'
SHREE RAMESHWAR: CARE Reaffirms B+ Rating on INR7.30cr LT Loan
--------------------------------------------------------------
CARE reaffirms the rating assigned to bank facilities of Shree
Rameshwar Cotex Industries.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 7.30 CARE B+ Reaffirmed
Rating Rationale
The rating assigned to the bank facilities of Shree Rameshwar
Cotex Industries continues to remain constrained on account of
its small scale of operations, thin profit margins, leveraged
capital structure and weak debt coverage indicators during FY16
(refers to the period April 1 to March 31) along with partnership
nature of constitution. The rating also remained constrained on
account of susceptibility of its profit margins to volatility in
prices of cotton and seasonality associated with cotton industry
along with its presence in highly fragmented cotton industry with
limited value addition and prices and supply for cotton being
highly regulated by government.
The rating, however, continues to derive benefit from the
moderate experience of partners and the firm being strategically
located in cotton-producing belt of Gujarat.
The ability of SRCI to increase its scale of operations with an
improvement in profit margins, improvement in the capital
structure, debt coverage indicators and liquidity are the key
rating sensitivities.
Jamnagar-based (Gujarat) SRCI was established during May 2013 as
a partnership firm by 11 partners. During July 2013, two more
partners were admitted to the partnership firm and one partner
voluntarily retired from partnership firm. SRCI is engaged into
the business of cotton ginning pressing and it commenced
commercial production from January 2014.
SRCI operates from its manufacturing facility located at Jamnagar
(Gujarat) with an installed capacity of 14,112 MTPA of cotton
bales and cotton seeds as onMarch 31, 2016.
During FY16 (A), SRCI reported nil PAT on a TOI of INR22.01 crore
as against PAT of INR0.10 crore on a TOI of INR22.96 crore during
FY15. During 5MFY17 (provisional), SRCI has reported TOI of
INR7.04 crore.
SHRI RAM: CARE Assigns B+ Rating to INR32.45cr LT Bank Loan
-----------------------------------------------------------
CARE assigns 'CARE B+' rating to the bank facilities of Shri Ram
Cot Fab.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 32.45 CARE B+ Assigned
Rating Rationale
The rating assigned to the bank facilities of Shri Ram Cot Fab is
constrained on account of implementation and stabilization risk
associated with the highly leveraged project, operations in a
highly fragmented textile industry and limited presence in
textile value chain, susceptibility of operating margins to raw
material price fluctuation and constitution as a partnership
firm.
The rating, however, derives strength from experienced promoters,
benefits derived from their engagement in the textile industry
through other group entities, location advantage and receipt of
fiscal benefits from the Government.
SRCF's ability to stabilize its business operations by commencing
commercial production within specified timeline and cost
parameters and establishing customer base would be key rating
sensitivity. Furthermore, achieving envisaged level of sales and
profitability in volatile raw material pricing scenario and
highly competitive industry would also remain crucial.
Ahmedabad-based (Gujarat) SRCF was formed in April 2016 as a
partnership firm by Mr. Anuj Mittal, Mr. Gunjan Mittal, Mr.
Gaurav Mittal andMr Pratik Mittal to undertake green field
project for manufacturing of finished grey fabrics. SRCF is
setting-up plant in Ahmedabad (Gujarat) with an installed
capacity of 50 lakhMTPA of grey fabrics. SRCF would install 96
Nos. of 54 imported Japanese Air Jet Looms for manufacturing of
grey fabrics.
The total project cost is envisaged at INR42.25 crore, which is
to be funded through term loan of INR32.45 crore, promoter's
capital of INR5.00 crore and balance from unsecured loan. SRCF
has envisaged commencing commercial production from end of
Q3FY17.
The partners are also associated with other three partnership
firms, namely, Maruti Nandan Spinning Mill (rated, 'CARE B+/CARE
A4'), Mahek Synthetics Mills Private Limited, Balaji Polycot
Private Limited and Shri Laxmi Polycot Private Limited.
SIDHI VINAYAK: Ind-Ra Withdraws BB Long-Term Issuer Rating
----------------------------------------------------------
India Ratings and Research (Ind-Ra) has withdrawn Sidhi Vinayak
Cotspin Limited's (SVCL) 'IND BB(suspended)' Long-Term Issuer
Rating.
The ratings have been withdrawn due to lack of information. Ind-
Ra will no provide ratings or analytical coverage for SVCL.
Ind-Ra suspended SVCL's ratings on March 1, 2016.
SVCL's ratings:
-- Long-Term Issuer Rating: 'IND BB(suspended)'; rating
withdrawn
-- INR1.20 mil. term loans: 'IND BB(suspended)'; rating
withdrawn
-- INR65 mil. fund-based limits: 'IND BB(suspended)'/
'IND A4+(suspended)'; ratings withdrawn
SINCON INFRASTRUCTURE: Ind-Ra Assigns BB Long-Term Issuer Rating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Sincon
Infrastructure Private Limited (SIPL) a Long-Term Issuer Rating
of 'IND BB'. The Outlook is Stable.
KEY RATING DRIVERS
The ratings reflect SIPL's small scale of operations and moderate
credit profile. According to the FY16 provisional statement,
revenue was INR364 mil. (FY15: INR300 mil.), net financial
leverage (net debt/EBITDA) was 1.3x (2x), gross interest coverage
(EBITDA/gross interest) was 2.5x (2.5x) and operating profit was
INR23.29 mil. (INR20.70 mil.). The company's EBITDA margin
deteriorated to 10.4% in FY16 (FY15: 10.9%) due to fluctuations
in raw material prices.
The ratings factor in SIPL's tight liquidity profile as reflected
by the company's overutilization of the working capital limits
during the 12 months ended August 2016.
The ratings, however, are supported by the decade-long experience
of its founders in the government's construction projects. The
ratings are also supported by SIPL's order book of INR756.97
mil., which is 2x of FY16 revenue.
RATING SENSITIVITIES
Positive: An increase in the revenue and operating profit, along
with an improvement in the credit metrics, will be positive for
the ratings.
Negative: A decline in the operating profitability, resulting in
deterioration in the interest coverage, will be negative for the
ratings.
COMPANY PROFILE
SIPL, previously known as M/S Vishal Builtech Pvt. Ltd, was
incorporated in April 1989 by Mr. Kartik Kumar in Patna, Bihar.
The company undertakes construction activities for bridges,
railways, roads and flyovers.
SIPL is managed by two of its directors Mr. Vishal Kumar and
Mr. Tarun Kumar.
SIPL's ratings:
-- Long-Term Issuer Rating 'IND BB'/Stable
-- INR40 mil. fund-based working capital: assigned 'IND BB'/
Outlook Stable
-- INR210 mil. non-fund-based working capital: assigned
'IND A4+'
SNEHA MARKETING: Ind-Ra Suspends B Long-Term Issuer Rating
----------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Sneha
Marketing's (SM) 'IND B' Long-Term Issuer Rating to the suspended
category. The Outlook was Stable. The rating will now appear as
'IND B(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 SM.
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
SM's ratings:
-- Long-Term Issuer Rating: migrated to 'IND B(suspended)'
from 'IND B'/Stable
-- INR39.5 mil. fund-based working capital limits: migrated to
'IND B(suspended)' from 'IND B'/Stable.
-- INR60 mil. non-fund-based working capital limits: migrated
to 'IND A4(suspended)' from 'IND A4'
SOHO LIMITED: ICRA Suspends 'B' Rating on INR6.5cr Loan
-------------------------------------------------------
ICRA has suspended the long term rating of [ICRA] B assigned to
the INR6.50 crore fund based facilities and INR2.50 crore of
unallocated limits of Soho Limited. The suspension follows ICRA's
inability to carry out rating surveillance in the absence of
requisite information from the company.
SUN SHINE: CARE Assigns B+ Rating to INR10cr Long Term Loan
-----------------------------------------------------------
CARE assigns 'CARE B+' rating to the bank facilities of Sun Shine
Autos Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 10 CARE B+ Assigned
Rating Rationale
The rating assigned to the bank facilities of Sun Shine Autos
Private Limited is constrained by modest scale of operations, low
profitability margins inherent to auto dealership business,
leveraged capital structure, weak debt coverage indicators and
working capital intensive nature of operations. The rating is
further constrained by its presence in competitive and cyclical
auto industry and fortunes linked with Mahindra & Mahindra
Limited.
These factors far offset the benefits derived from the experience
of the promoters in automobile dealership industry. The ability
of SAPL to continue its relationship with the principal and
success of new models launched by the principal thereby increase
its scale of operations as envisaged and improve profitability
along with improvement in capital structure and efficient
management of working capital requirement are the key rating
sensitivities.
SAPL was incorporated in 2008 by Mr. Sunil Kumar Singh and family
members. SAPL is a dealer of passenger cars, spares & accessories
of Mahindra & Mahindra Limited for Aurangabad (Bihar) having a
showroom and services center located at Aurangabad and stockyard
at M.G. road (Aurangabad city). SAPL is the sole Mahindra
vehicles' dealer in Aurangabad, Bihar.
SAPL has two group companies, namely, Pushpanjali Coal and Coke
Private Limited (started in 1988 and engaged in coke production
and Sun Shine Fuels (started in 1994 and runs petrol pump in
Bihar.
During FY15 (refers to the period April 01 to March 31) SAPL
posted total income of INR 75.09 crore (vis-Ö-vis INR 74.35
crore in FY14) and PAT of INR 0.15 crore (vis-Ö-vis Net loss of
INR0.23 crore in FY14). Furthermore, for FY16 (provisional),
SAPL registered total sales of INR 93.82 with PAT of INR 0.45
crore. Moreover, it has booked total sales of INR35.97 crore
for the period April 2016 to August 24, 2016 as against 585 cars
sold.
T K INTERNATIONAL: Ind-Ra Withdraws D Long-Term Issuer Rating
-------------------------------------------------------------
India Ratings and Research (Ind-Ra) has withdrawn T K
International Limited's (TKIL) 'IND D(suspended)' Long-Term
Issuer Rating.
The ratings have been withdrawn due to lack of adequate
information. Ind-Ra will no longer provide ratings or analytical
coverage for TKIL.
Ind-Ra had suspended TKIL's ratings on March 1, 2016.
TKIL's ratings:
-- Long-Term Issuer Rating: 'IND D(suspended)'; rating
withdrawn
-- INR65.5 mil. fund-based limits: Long-term
'IND D(suspended)'/Short-term 'IND D(suspended)'; ratings
withdrawn
-- INR5 mil. non-fund-based limits: Long-term
'IND D(suspended)'/Short-term 'IND D(suspended)'; ratings
withdrawn
-- INR54.7 mil. term-loan: Long-term 'IND D(suspended)';
rating withdrawn
TRIVENI SILK: ICRA Revises Rating on INR10.50cr LT Loan to 'B'
--------------------------------------------------------------
ICRA has revised the long term rating from [ICRA]B+ to [ICRA]B on
the INR10.50 crore fund-based facilities of Triveni Silk Mills.
ICRA had earlier suspended the rating in June 2016, which stands
revoked.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-Term Fund 10.50 [ICRA]B; Revised;
Based Limits Suspension Revoked
The rating revision takes in to account the weakening of TSM's
liquidity and decline in profitability, The leveraged capital
structure as reflected in gearing of 4.33 times as on March 31,
2016 along with low profitability continues to result in weak
debt coverage indicators. Although TSM is present in the industry
since 1990; however despite this, the scale of operations
remained modest as reflected in Operating Income (OI) of around
INR51.62 crore for FY2016, which along with fragmented nature of
the industry limits the bargaining power. The operations continue
to be working capital intensive thereby resulting in stretched
liquidity profile as reflected in consistently high utilization
of sanctioned limits. The rating however continues to favorably
take into account the long track record of the promoters in the
fabric weaving business leveraging on which the firm maintains
established relationship with its customers. Further, the weaving
facility of the firm being located in Ludhiana (Punjab) ensures
easy access to raw-materials and manpower.
Going forward, the ability of the firm to grow its operations in
a profitable manner, maintaining adequate liquidity and improve
its capital structure will remain the key rating sensitivities.
Triveni Silk Mills, a partnership firm established in 1990 is
managed by Mr. Bhupinder Jaggi and Mr. Shakti Jaggi. The firm is
engaged in the production of cotton and synthetic fabrics which
is used in making ladies suits, dress materials, shawls, etc. The
firm's manufacturing unit is located in Ludhiana and comprises of
7 looms, 30 embroidery machines and 4 printing machine.
Recent Results
The company on a provisional basis reported an Operating Income
(OI) of INR51.62 crore and Profit after Tax (PAT) of INR0.21
crore in 2015-16 as compared to an OI of INR44.33 crore and PAT
of INR0.17 crore in the previous year
YEDESHWARI AGRO: ICRA Reaffirms B+ Rating on INR62.32cr Loan
------------------------------------------------------------
ICRA has reaffirmed the long term rating of [ICRA]B+ assigned to
the INR62.32 crore term loan facility and INR0.68 crore
unallocated amount of Yedeshwari Agro Products Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term, Fund
Based-Term Loan 62.32 [ICRA]B+/reaffirmed
Long Term-Unallocated 0.68 [ICRA]B+/reaffirmed
The rating reaffirmation takes into account depressed sugar
realisation during FY 2015-16 and lesser operational days on
account of low cane availability following drought like
conditions for last 2-3 years. The rating is also constrained by
YAPL's weak financial profile characterized by loss making
operations, leveraged capital structure and weak coverage
indicators. Further, high working capital intensity mainly due to
sugar inventory buildup of close to 500 days also exposes the
company to sugar price fluctuation risks. The company also faces
significant repayment obligations over the next few fiscals. ICRA
notes that business remains exposed to agro climatic and
regulatory risks like cane pricing which remains state government
determined.
The rating however, favorable factors in improved outlook for
sugar sector supported by healthier demand- supply position and
steady accretion in sugar price since last fiscal. Forward
integration of the company operations into power cogeneration
provides some cushion from the cyclicality in sugar industry.
ICRA also notes the government support to the sector in the form
of soft loans among others.
Incorporated in 2007, Yedeshwari Agro Products Limited (YAPL) was
promoted by Mr. Bajarang Sonawane and is a closely held company
with majority of the shareholding with the Sonwane family. The
company is involved in manufacturing of sugar with total crushing
capacity of 3500 TCD (tonnes crushed per day). The plant is
forward integrated with a 10 MW cogeneration unit. The plant is
located at Anandgaon, Tehsil Kaij, District Beed, Maharashtra.
=================
I N D O N E S I A
=================
BUMI SERPONG: Fitch Rates Proposed US$ Sr. Unsec. Notes BB-(EXP)
----------------------------------------------------------------
Fitch Ratings has assigned Indonesia-based PT Bumi Serpong Damai
Tbk's (BSD, BB-/Stable) proposed US dollar-denominated senior
unsecured notes due in 2023 an expected rating of 'BB-(EXP)'.
The notes will be issued by BSD's wholly owned subsidiary, Global
Prime Capital Pte Ltd, and guaranteed by BSD and its
subsidiaries.
The notes are rated at the same level as BSD's senior unsecured
rating as they represent the company's unconditional, unsecured
and unsubordinated obligations. The final rating on the notes is
contingent upon the receipt of final documents conforming to
information already received.
BSD intends to use part of the notes' proceeds to refinance its
existing USD225 mil. 6.75% senior unsecured notes due in 2020 and
any balance to expand its businesses and for working capital.
The proposed notes, which have a seven-year tenor, will lengthen
BSD's debt maturity profile. Fitch expects BSD's financial
profile to remain within the parameters of its 'BB-' Long-Term
Issuer Default Rating, based on the company's appetite for
raising additional debt via this issuance.
KEY RATING DRIVERS
Presales Outperform Peers: BSD's marketing sales improved 8% yoy
in 2Q16, but fell 27% in 1H16 compared with the same period last
year due to a weak 1Q16, as most Indonesian developers delayed
property launches due to weak demand. Fitch continues to expect
the homebuilder to sell around IDR6.4 tril. of properties in
2016, which is close to the company's own target of IDR6.8 tril.
Marketing sales of the other six Fitch-rated Indonesian
homebuilders fell by 47% in 1H16 and 32% in 2Q16, compared with
their corresponding periods in 2015. BSD's diversity across
property products and price points is a key driver of its
performance, allowing the company to adjust its sales plans to
match demand.
Strong Recurring Cash Flow: Investment properties (IP) generated
around USD67 mil. in EBITDA in 2015. The company owns 18 assets,
including suburban retail malls catering to the mass market, a
mix of prime and suburban office space and two resort hotels.
While IP EBITDA growth has lagged Fitch's expectations due to
slower ramp-up of some of BSD's newer properties, overall
occupancy was strong at 95%. Asset concentration is modest, with
the five largest IP assets accounting for 62% of IP revenue in
2015.
Subsidiary Owns Investment Property: Most of BSD's investment
property is held through its 88.56%-owned listed subsidiary, PT
Duta Pertiwi Tbk (DUTI). A significant dilution in BSD's
ownership of DUTI, although not expected in the medium-term, may
reduce BSD's access to DUTI's recurring cash flow and increase
risk to BSD's creditors.
Solid Balance Sheet and Land Bank: BSD has a record of
maintaining a strong balance sheet. Its leverage was just 16.8%
at end-June 2016 and Fitch expects leverage to remain below 25%
over the medium term. BSD's land bank amounted to 39.5 million
square meters at end-2015. Uniquely, the title to around 63% of
BSD's land bank is under the company founders' names, an
arrangement dating back to the company's inception. A legally
binding agreement confers the rights to developing the land to
BSD. Fitch has excluded the portion of land under the founders'
names from its leverage calculation to be conservative, but it
should be noted that this agreement has not been breached since
inception.
High Capex; Geographically Concentrated Sales: BSD expects to
spend around IDR7trn between 2016 and 2018 on expanding its
investment property portfolio to over 30 properties. Fitch
expects execution risk to be mitigated by the company's record of
successfully developing similar properties. BSD anticipates
spending a further IDR1.5 tril. - IDR2.5 tril. on land banking
annually until 2018. Nearly 70% of the company's presales were
in within the BSD City township in the Serpong region outside
Jakarta in 2015, but have been diversified across residential and
commercial clusters.
KEY ASSUMPTIONS
Fitch's key assumptions include:
-- Presales of IDR6.4trn in 2016
-- Cash collection cycle on development projects to remain
between two to three years on average, in line with current
trends
-- Investment properties to generate around IDR1.2 tril.
EBITDA in 2016
-- BSD to spend over IDR4 tril. on capex over 2016 and 2017
and around IDR4 tril. on land banking over the same period.
RATING SENSITIVITIES
Positive: Fitch does not expect BSD's ratings to be upgraded in
the next two years due to its evolving investment property
portfolio compared with higher-rated international peers and high
capex and execution risks related to its investment property
expansion.
These factors may result in an upgrade over the longer-term:
-- increased scale and granularity of BSD's investment
property portfolio, so it generates EBITDA of more than
USD120 mil., with the five largest assets accounting for
less than 50% of revenue in this segment
-- investment property EBITDA/net-interest expense higher than
2.5x (end-June 2016: 2.0x)
-- leverage sustained below 30% (end-June 2016: 16.8%).
Negative: Future developments that may, individually or
collectively, lead to negative rating action include:
-- investment property EBITDA/net-interest expense sustained
below 1.75x
-- leverage sustained above 40%.
LIQUIDITY
Strong Liquidity: BSD had IDR5.6 tril. of readily available cash
against IDR8.8 tril. of gross debt at end-June 2016, with IDR2
tril. of debt consisting of short-term secured working capital
facilities, and a further IDR403 bil. of current maturities and
capital leases. The company also has a further IDR750 bil. of
approved but unutilized credit facilities outstanding.
SMARTFREN TELECOM: Fitch Affirms 'CCC' National Long-Term Rating
----------------------------------------------------------------
Fitch Ratings has affirmed Indonesia-based PT Smartfren Telecom
Tbk's National Long-Term Rating at 'CCC(idn)'. At the same time,
Fitch has affirmed Smartfren's IDR675 bil. bond at 'CCC(idn)'.
The bond was originally issued in 2007 by PT Mobile-8 Telecom
Tbk.
The rating affirmation reflects Smartfren's weak cash flow
generation, with EBITDA likely to continue to fall short of its
interest expense. The rating also reflects the company's
continued reliance on the issuance of mandatory convertible bonds
(MCB) to cover its cash shortfall.
'CCC' National Ratings denote that default is a real possibility.
Capacity for meeting financial commitments is solely reliant upon
sustained, favourable business or economic conditions.
KEY RATING DRIVERS
Increasing Costs Pressure EBITDA: Fitch forecasts Smartfren to
generate lower EBITDA of less than IDR150 bil. (USD11.5 mil.) in
2016 and 2017 (2015: IDR210 bil.). Smartfren's continued
investment in long-term evolution (LTE) networks will translate
into higher operational costs (such as sales and marketing costs
to attract customers) and increased tower rentals from additional
base transceiver stations (BTS), but Fitch expects subscribers to
remain relatively flat. The company's strategy has been to enter
the LTE segment early by investing significantly. The number of
BTS has more than doubled to 15,140 in 2015 (2014: 6,115).
Subscriber Growth Tough: Smartfren's successful return on its LTE
investment will depend on its ability to significantly increase
subscribers above its current level of 10.5 million. Fitch
thinks this will be a challenge given the dominance of GSM
operators. Smartfren's subscriber base has been stagnant at
around 10-11 million since 2011, although a larger proportion of
LTE subscribers has helped average revenue per user to grow. In
comparison, we estimate its closest competitor PT Hutchison 3
Indonesia has a subscriber base of more than 40 million.
The challenge will be exacerbated by the price competitive nature
of the Indonesian telecommunication industry, where telcos
compete for subscribers by offering cheap data packages. The
three largest GSM operators have greater financial flexibility in
the event of another tariff war - with solid EBITDA margins of
above 35%, funds flow from operations (FFO) adjusted net leverage
below 3.5x and solid funding access.
Available Facilities for Capex: Smartfren's strategy to
significantly expand its LTE network will require new capital to
fund the capex. Fitch forecasts Smartfren to continue to spend
more than IDR2.5 tril. per annum in 2016 and 2017 on its LTE
network. The company still has not utilized USD170.6 mil. from
Chinese Development Bank (CDB) loan phase III, USD131.9 mil. from
CDB handset loan phase II and USD147.9 mil. from a facility from
Nokia Solutions and Networks, which total about IDR5.9 tril.
Reliance on MCB: EBITDA of less than IDR150bn will not be
sufficient to cover annual interest expense of more than
IDR450 bil. in 2016 and 2017. The company will have to issue
additional MCB in the next 18-24 months to cover its interest
burden and debt principal repayment - including the maturity of
IDR675 bil. of Indonesian rupiah bonds in June 2017. The company
still has IDR2.4 tril. remaining of IDR9 tril. MCB series II and
has not utilized a USD39 mil. (IDR514 bil.) working capital
facility from Cascade Gold Limited.
Fitch does not give credit for future MCB injections despite its
successful issuances in the past. This is due to the uncertainty
that stems from Smartfren's low equity value and the inability to
assess the willingness and ability of the MCB investors to
continue funding the company. So far the company has managed to
issue IDR4.7 tril. of MCB I and IDR6.6trn of MCB II.
KEY ASSUMPTIONS
Fitch's key assumptions within the rating case for Smartfren
include:
-- Stagnant subscriber base of around 10-11 million in 2016
and 2017
-- Blended average revenue per user of IDR25,000 - IDR35,000
in 2016 and 2017
-- Annual capex above IDR2.5 tril. in 2016 and 2017
RATING SENSITIVITIES
Positive: Future developments that may, individually or
collectively, lead to positive rating action include:
-- The company's ability to fund its operations without any
reliance on further MCB issuance
Negative: Future developments that may, individually or
collectively, lead to negative rating include:
-- Weakening liquidity or operating performance such that the
company's ability to meet obligations appears unlikely
=========
J A P A N
=========
TAKATA CORP: Bidders Said to Offer at Least $1BB Investments
------------------------------------------------------------
Bloomberg News reports that Takata Corp. received offers for
initial investment of $1 billion to $2 billion from each of the
five suitors seeking to buy the troubled air bag maker, according
to a person with knowledge of the matter.
Bloomberg relates that the Japanese company behind the auto
industry's biggest recall ever may be leaning toward three bids:
one by air-bag inflator maker Daicel Corp. and Bain Capital, and
the others by buyout firm KKR & Co. and bumper supplier Flex-N-
Gate Corp., said the person, who asked not to be identified
because the discussions are confidential.
While all five groups have proposed bankruptcy for Takata, air
bag makers Autoliv Inc. and Key Safety Systems Inc. are insisting
on that option, making their bids less favorable, the person
said. Discussions are ongoing and a buyer may not be decided
soon, the person said, Bloomberg relays.
According to Bloomberg, Takata met last week with officials from
Honda Motor Co. and about a dozen other customers affected by air
bag recalls that could exceed 100 million devices worldwide. The
number of fatalities tied to Takata's inflators -- which can
rupture and spray plastic and metal shards at vehicle occupants
-- reached at least 16 worldwide following the death of a Honda
City driver last week in Malaysia.
Bloomberg says the central issue facing Takata's customers, which
also include General Motors Co. and Volkswagen AG, is how to
divvy up responsibility for billions of dollars in recall costs
and potential legal liabilities stemming from its faulty air
bags.
Lazard has proposed setting up an independent legal fund using
contributions from Takata, new investors and automakers, people
familiar with the proposal have said, Bloomberg reports. Honda,
which owns about 1.2 percent of Takata shares and is its largest
customer, has been said to have resisted the idea.
While automakers have been reluctant to help pay Takata's legal
bills, sharing that burden may help the company solidify a sale
and would factor in whether bankruptcy would be necessary. The
top priority for automakers is to ensure a steady supply of
Takata air bags, seat belts and other components that generated
JPY718 billion ($6 billion) in sales for the fiscal year ended in
March.
Takata shares have lost nearly three-quarters of their value
during the past year, dropping the company's market
capitalization to about $290 million, Bloomberg discloses.
Japan-based Takata Corporation (TYO:7312) --
http://www.takata.com/en/-- develops, manufactures and sells
safety products for automobiles. The Company offers seatbelts,
airbags, steering wheels, child seats and trim parts. The Company
has subsidiaries located in Japan, the United States, Brazil,
Germany, Thailand, Philippines, Romania, Singapore, Korea, China
and other countries.
===============
M A L A Y S I A
===============
PRIME GLOBAL: Stockholders Elect Five Directors
-----------------------------------------------
An annual meeting of stockholders of Prime Global Capital Group
Incorporated was held on Sept. 22, 2016, at which the
stockholders:
(a) elected Weng Kung Wong, Liong Tat Teh, Maylee Gan Suat Lee,
James E. Scheifley and Ham Poh Chai as directors for terms
expiring at the Company's 2017 Annual Meeting of the
Stockholders; and
(b) ratified the appointment of Crowe Horwath (HK) CPA Limited
as the Company's independent auditors for the fiscal year
ending Oct. 31, 2016.
About Prime Global
Kuala Lumpur, Malaysia-based Prime Global Capital Group operated
in the following three business segments during fiscal year 2014:
(i) software business (the provision of IT consulting,
programming and website development services); (ii) plantation
business (including oilseeds and castor seeds business); and
(iii) its real estate business. In the fourth quarter of fiscal
2014, the Company discontinued its castor seeds business in
China, and in December 2014 it discontinued the software business
(the provision of IT consulting, programming and website
services) in Malaysia. As a result, the Company no longer conduct
business operations in China and anticipate winding down or
otherwise selling its interests in the following entities: Power
Green Investments Limited; Max Trend International Limited and
Shenzhen Max Trend Green Energy Co Ltd.
Prime Global reported a net loss US$1.59 million for the year
ended Oct. 31, 2015, compared to a net loss of US$1.33 million
for the year ended Oct. 31, 2014.
As of July 31, 2016, the Company had US$48.2 million in total
assets, U$18.3 million in total liabilities and US$29.8 million
in total equity.
Crowe Horwath (HK) CPA Limited, in Hong Kong, China, issued a
"going concern" qualification on the consolidated financial
statements for the year ended Oct. 31, 2015, citing that the
Company has a working capital deficiency, accumulated deficit
from recurring net losses and significant short-term debt
obligations maturing in less than one year as of Oct. 31, 2015.
All these factors raise substantial doubt about its ability to
continue as a going concern.
====================
N E W Z E A L A N D
====================
ATMOSPHERIC LTD: SecureCom Acquires Firm
----------------------------------------
Privately-held IT services provider SecureCom has acquired
Atmospheric Ltd.
Atmospheric is an Auckland-based technology company that was
recently placed in receivership. Five of Atmospheric's staff will
join SecureCom's team at its Auckland site, taking SecureCom's
total employee numbers to over 50 people.
Greg Mikkelsen, director of SecureCom, says that the acquisition
adds further momentum to the growth strategy of SecureCom,
expanding its market reach and strengthening its cloud and
managed services offerings.
"We are pleased to bring Atmospheric's cloud services capability
and its terrific team into SecureCom to accelerate our plans for
growth," says Mikkelsen. "Our goal is to help firms and
organisations with their digital transformation, to not only
satisfy customer demands but to also drive the agility and
operational efficiency they need to stay competitive. This
acquisition better positions us to assist New Zealand businesses
in the areas of platform IT services and cloud computing."
The acquisition is highly complementary to SecureCom's existing
managed ICT and cloud services business.
"By acquiring Atmospheric we now have an even deeper capability
to deliver innovative end-to-end cloud solutions and managed
services for our clients, which span SMEs through to mid-sized
and larger corporate businesses," he adds.
Mikkelsen says that Atmospheric's team are highly skilled,
experienced and qualified in the implementation and support of
Microsoft cloud solutions.
"We gain effective and immediate access to the skills of the
talented people who have been supporting Atmospheric's customers
over recent years. Atmospheric has a reputation for high quality
service which has attracted clients nationally, including
organisations with branch sites in Australia, the US and the UK."
"We are proud to be a Microsoft partner and we look forward to
working more closely with Microsoft in the future," Mikkelsen
adds.
The deal provides long-term security for Atmospheric's existing
customers and remaining staff.
"SecureCom has over 13 years of cloud and managed service
experience, and our team will ensure the transition is smooth and
seamless, working with the Atmospheric team to ensure that each
client's business carries on without any interruption."
The transaction also has cost and revenue synergies.
"The benefit for us is that we will achieve synergies by
combining these businesses, through economies of scale gained
from our 24x7 service desk and engineering capability, the
consolidation of premises and rationalisation of costs. In
addition, there are significant revenue synergies available,
including the potential to attract new customers and cross-sell
opportunities to existing clients," says Mikkelsen.
Microsoft New Zealand Partner Group Director Brent Kendrick says
that the acquisition will provide a positive solution for
Atmospheric's clients and staff, and builds on SecureCom's
existing Microsoft cloud capability.
"This is a good solution for SecureCom and Atmospheric, and more
importantly, for clients of both companies," says Kendrick. "It
combines the skills, experience and qualifications of the two
organisations to offer kiwi businesses a highly competent
provider for the implementation and support of Microsoft cloud
solutions.
"We are working closely with SecureCom to ensure that there is
minimal disruption to Atmospheric's services and customers during
the transition," adds Kendrick.
About Atmospheric Ltd
As reported in Troubled Company Reporter-Asia Pacific on
Sept. 23, 2016, Stuff.co.nz said that Atmospheric Ltd goes into
receivership just 18 months after winning an award from
Microsoft. Stuff.co.nz related that Staples Rodway business
recovery specialist Tony Maginness said he was appointed as
receiver of the Auckland firm. According to Stuff.co.nz, Mr.
Maginness said some staff had been let go but seven had been
retained and he hoped Atmospheric would be sold as a going
concern.
D.C. ROSS: Placed in Receivership; 12 Jobs at Risk
--------------------------------------------------
Simon Hartley at Otago Daily Times reports that 12 jobs are under
threat at specialist Dunedin engineering company D.C. Ross, after
its shareholders placed the company, more than 50 years old, into
receivership.
The McConnon family of Dunedin, who had a sizeable fortune from
dairy interests in the days before and after Fonterra's
formation, are the majority 72.5% shareholders. Their Aorangi
Laboratories Ltd holds 1.77million shares, split into five wider,
equal, family allocations, ODT discloses.
D.C. Ross chief executive Peter Deans, a 12% shareholder along
with co-director Robert Houliston, also with 12%, confirmed on
Sept. 20 the Kaikorai Valley Rd company was placed in voluntary
receivership, by its shareholders, not creditors.
"Hopefully, a buyer can be found in the next couple of weeks
. . . we have work to be going on with," the report quotes Mr.
Deans as saying.
He was unable to give details, not wanting to pre-empt the
receiver's first report, due next month, ODT notes.
ODT relates that Mr. Deans, who has been with the company for
almost 18 years, said there had been "poor governance" since the
aftermath of the 2007-08 global financial crisis and the company
was "left to meander".
"The irony is we're picking up new orders and having a growth
spurt," Mr. Deans said.
There were other compounding factors, such as the strength of the
New Zealand dollar, increasing raw material costs and the state
of the Australian automotive industry.
Ford's last Australian car has just rolled off the assembly line
and Holden and Toyota will close by the end of next year.
About 50% of D.C. Ross' work was for the automotive industry, but
not exclusively Australian, and 30% to 40% was for Chinese
company Haier, which owns Fisher & Paykel Appliances and its
whiteware production.
D.C. Ross had other contracts in Australia, Thailand, China,
Mexico and "potentially" Serbia, Mr. Deans, as cited by ODT,
said.
D.C. Ross evolved from the early 1900s Dunedin company William
Wilson, which started out repairing bicycles and printing
machines before getting some Cadbury contracts. In 1962, Doug
Ross took over Wilson & Wilson, as it was then, with colleague
Gerald Hoare, and formed D.C. Ross Ltd in 1963.
WHITE CLIFFS: Craft Beer Institution Fights Back From Liquidation
-----------------------------------------------------------------
Hannah Lee at Stuff.co.nz reports that Taranaki's craft beer
pioneers have avoided having to shut their doors after going into
liquidation earlier this year.
In June, White Cliffs Organic Brewery Ltd, which operates Mike's
Organic Brewery just north of Urenui, went into voluntary
liquidation -- however thanks to some out-of-the-box accounting
owner Ron Trigg fought back from the brink and last week took the
reins back.
They weren't entirely in the clear yet, Trigg said, they still
needed to get back their control customs licence -- which allowed
them to brew on site, but he remained an eternal optimist,
Stuff.co.nz relates.
"The big unknown is we've got to prove to New Zealand Customs the
operation's being run differently to as it was in the past," he
said, notes Stuff.co.nz.
According to the report, Mr. Trigg said the decision to go into
liquidation had been a long time coming and was largely due to a
customs and excise debt accrued four to five years ago that the
company could not pay.
When the additional duty on the debt became one and half times
the amount of the original debt, he knew they had to do the
responsible thing and call in liquidators to help them get in
control of the situation, Mr. Trigg, as cited by Stuff.co.nz,
said. "In our case it's a different game now than it was --
people look at craft brewing now and say 'it's booming', but 10
years ago it wasn't like that. We couldn't sell our beer in the
provinces we sold all of our beer in Wellington."
Stuff.co.nz relates that Mr. Trigg said the residual strain of
that slow start is what compounded their issues, but in the last
four years they had went from being in the red, to turning a
profit.
Since their announcement in June however, he had run into a bit
of trouble convincing people they were still open, Mr. Trigg
said, Stuff.co.nz relays. When people hear the word liquidation,
they lump it in with receivership and bankruptcy but that doesn't
have to be the case, he said.
Mr. Trigg said the brewery was now gearing up for its 10th
Oktoberfest on the 29th of this month and they had filled every
vessel and tank they could to make sure they could cover the time
between the liquidator's brewing licence running out and being
able to get a new licence themselves, relates Stuff.co.nz.
His plan now was to focus on making Mike's a destination brewery,
rather than trying to stretch themselves too thin.
"The plan has always been to be a viable, valuable member of the
community," he said, adds Stuff.co.nz.
===============
P A K I S T A N
===============
PAKISTAN: Fitch Assigns B Rating to US$ Sovereign Certificates
--------------------------------------------------------------
Fitch Ratings has assigned Pakistan's proposed US dollar-
denominated sovereign global sukuk trust certificates, to be
issued by Third Pakistan International Sukuk Company Limited
(3rdPIS), an expected 'B(EXP)' rating. The expected rating is in
line with Pakistan's Long-Term Foreign-Currency Issuer Default
Rating (IDR) of 'B' with a Stable Outlook.
3rdPIS is the issuer and trustee of the Sukuk, incorporated
primarily for the purpose of participating in the sukuk
transactions. 3rdPIS is wholly owned by Pakistan.
KEY RATING DRIVERS
The trust certificate issuance programme's rating is driven
solely by Pakistan's IDR of 'B', which Fitch affirmed on 12 April
2016 along with the Stable Outlook. The programme's rating is
based on Fitch's view that a default of these senior unsecured
obligations would reflect a default of Pakistan in accordance
with Fitch's rating definition.
Fitch has not considered any underlying assets or collateral
provided, as we believe the issuer's ability to satisfy payments
due on the certificates will ultimately depend on the Pakistan
government satisfying its unsecured payment obligations to the
issuer under the transaction documents described in the
prospectus and other supplementary documents.
In addition to the Pakistan government's propensity to ensure
repayment of the 3rdPIS sukuk, Fitch believes it would also be
required to ensure full and timely repayment of 3rdPIS's
obligations due to its various roles and obligations under the
sukuk structure and documentation, especially - but not limited
to the features below:
-- On each periodic distribution date, Pakistan, acting as a
lessee, will pay to the trustee an amount reflecting the
rental due in respect of the lease assets, which is
intended to be sufficient to fund the periodic distribution
amounts payable by the issuer under the certificates and
shall be applied by the trustee for that purpose.
-- On the scheduled dissolution date or following the
occurrence of any dissolution event or total loss event,
the trustee will have the right to require the obligor,
under the purchase undertaking, to purchase the lease
assets from the trustee for an amount equal to the
exercise price, intended to fund the dissolution
distribution amount payable by the issuer under the
certificates.
-- The dissolution distribution amount equals (i) the
outstanding face amount of such certificate; and (ii) all
accrued and unpaid periodic distribution amounts in respect
of such certificate.
-- In addition, the Pakistan government will be required to
pay any shortfall in insurance proceeds and the dissolution
distribution amount directly to the transaction account on
the occurrence of the total loss event unless the lease
assets are replaced.
-- The payment obligations of the Pakistan government (acting
in any capacity) under the Transaction Documents are
direct, unconditional and unsecured obligations and rank
pari passu, without preference among themselves, with all
of Pakistan's other outstanding present and future
unsecured and unsubordinated obligations.
The programme includes a negative pledge provision that is
binding on the Pakistan government, as well as financial
reporting obligations, covenants, government event and cross
acceleration terms with external indebtedness. The documentation
does not contain a change of control clause.
Certain aspects of the transaction will be governed by English
law, while other aspects will be governed by the laws of
Pakistan. Fitch does not express an opinion on whether the
relevant transaction documents are enforceable under any
applicable law. However, Fitch's rating on the certificates
reflects its belief that the Pakistan government would stand
behind its obligations.
When assigning ratings to the programme and certificates to be
issued under it, Fitch does not express an opinion on the
programme's compliance with sharia principles. There is no
assurance that notes issued in the future under the programme
will be assigned a rating or that the rating assigned to a
specific issue under the programme will have the same rating as
the programme rating.
RATING SENSITIVITIES
The rating will be sensitive to any changes in Pakistan's Long-
Term Foreign-Currency IDR and any changes to the roles and
obligations of Pakistan under the sukuk's structure and
documents.
*********
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 ***