/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/161005.mbx T R O U B L E D C O M P A N Y R E P O R T E R A S I A P A C I F I C Wednesday, October 5, 2016, Vol. 19, No. 197 Headlines A U S T R A L I A EMECO HOLDINGS: Fitch Cuts Long-Term Issuer Default Rating to 'C' GROWTH PLUS: ASIC Files Civil Lawsuit vs. Firm, Ben Jayaweera LOTUS SECURITIES: ASIC Cancels License for Late Filing of Reports MAX MOBILE: First Creditors' Meeting Set For Oct. 12 QUICKFLIX LTD: Karma Media Set to Buy Firm for AUD1.3MM C H I N A AGFEED USA: Court Narrows Claims in Suit vs. Former Director CHINA AOYUAN: Moody's Affirms B2 CFR; Changes Outlook to Positive CHINA BAK: Dismisses Crowe Horwath as Accountants COUNTRY GARDEN: Fitch Assigns BB+ Rating to USD650MM Senior Notes I N D I A A.S. TRADERS: CRISIL Suspends B+ Rating on INR100MM Cash Loan AAVISHKAAR SEP: Ind-Ra Assigns 'IND BB' Rating to INR21MM SLCF ABHIJIT REALTORS: CRISIL Suspends D Rating on INR350MM Cash Loan AGASTHYA COPPER: CRISIL Suspends 'D' Rating on INR90MM Cash Loan AISHWARYA COTTONS: ICRA Suspends B+ Rating on INR12cr Loan ALLIANCE INDUSTRIAL: Ind-Ra Withdraws 'IND BB' LT Issuer Rating ANANTA MEDICARE: CRISIL Assigns B+ Rating to INR100MM Term Loan ARCHANA MOTORS: CRISIL Assigns B- Rating to INR115MM Loan ARSHIT GEMS: ICRA Reaffirms 'D' Rating on INR28cr Loan ATOM CERAMIC: ICRA Revises Rating on INR4.0cr Cash Loan to B BRAHMAPUTRA BIOCHEM: CRISIL Assigns D Rating to INR582MM Loan BRIJ SUGAR: CRISIL Suspends 'D' Rating on INR100MM Term Loan BRISK INFRASTRUCTURE: CRISIL Suspends D Rating on INR450MM Loan CIEMME JEWELS: ICRA Reaffirms 'D' Rating on INR20cr LT Loan COUNTRY CLUB: ICRA Assigns 'D' Rating to INR281.45cr Loan DEEPAK COTTON: Ind-Ra Withdraws 'IND B' Long-Term Issuer Rating E.S. KNIT: CRISIL Assigns B+ Rating to INR12.5MM Loan GREENKO ENERGY: Unaffected by SunEdison Asset Buy, Says Fitch HOTEL JAYAPUSHPAM: Ind-Ra Affirms IND BB Long-Term Issuer Rating ITALVA WOODS: CRISIL Assigns 'B' Rating to INR122.5MM Term Loan JALARAM FLEXO: CRISIL Suspends 'D' Rating on INR60.3MM Term Loan JASAMRAT COTGIN: CRISIL Assigns 'B' Rating to INR70MM Cash Loan JAYCO SYNTHETICS: ICRA Ups Rating on INR6.25cr Cash Loan to B JCL INFRA: Ind-Ra Withdraws 'IND B+' Long-Term Issuer Rating K.C. EDIBLE: Ind-Ra Withdraws 'IND B+' Long-Term Issuer Rating K.C. ROLLER: Ind-Ra Withdraws 'IND B+' Long-Term Issuer Rating K.S.M. BASHIR: Ind-Ra Withdraws 'IND BB-' Long-Term Issuer Rating MANDALIA OVERSEAS: ICRA Lowers Rating on INR8cr ST Loan to D MARUTI COTTON: CRISIL Suspends 'B' Rating on INR50MM Cash Loan NEAT WIND: CRISIL Suspends B+ Rating on INR36.1MM Term Loan NICE MARINE: CRISIL Assigns B+ Rating to INR50MM Cash Loan OLIVE TEX: Ind-Ra Affirms 'IND BB' Long-Term Issuer Rating PNR INFRA: CRISIL Assigns B+ Rating to INR100MM LT Loan PREMIER METCAST: Ind-Ra Withdraws IND BB Long-Term Issuer Rating RATAN SEEDS: Ind-Ra Withdraws 'IND B' Long-Term Issuer Rating RELIANCE INDUSTRIAL: ICRA Reaffirms B- Rating on INR4.7cr Loan SAHAYOG CLEAN: CRISIL Suspends 'B' Rating on INR65MM Term Loan SAI KRUPA: CRISIL Suspends B+ Rating on INR170MM Cash Loan SAMANVAYA HEALTH: CRISIL Assigns B+ Rating to INR32MM LT Loan SARASWATI GUM: CRISIL Assigns B+ Rating to INR60MM Cash Loan SDU BEVERAGES: Ind-Ra Assigns 'IND D' Long-Term Issuer Rating SHIV SHAKTI: ICRA Assigns 'B+' Rating to INR20cr Cash Loan SHRI GANGA: CRISIL Assigns B+ Rating to INR79.5MM Cash Loan SIDDHARTH DEVELOPERS: ICRA Suspends B+ Rating on INR28cr Loan SONPAL EXPORTS: CRISIL Suspends B+ Rating on INR320MM Loan SREE MANJUNATHA: ICRA Suspends 'B' Rating on INR6cr Loan SRI BALAGANAPATHY: ICRA Suspends B/A4 Rating on INR12.82cr Loan ST. JOHNS: CRISIL Assigns B+ Rating to INR70MM Cash Loan SWAMI HITECH: CRISIL Reaffirms 'B' Rating on INR80MM Cash Loan TATA STEEL: Fitch Keeps 'BB' LT IDR on Rating Watch Evolving TIGER CAMP: Ind-Ra Withdraws 'IND B+' Long-Term Issuer Rating TOUCH TONE: Ind-Ra Hikes Long-Term Issuer Rating to 'IND BB-' V. R. GHUGE: CRISIL Assigns B+ Rating to INR100MM Overdraft Loan VEDANGA SOLAR: CRISIL Assigns B+ Rating to INR144.5MM LT Loan VIRTUE INDUSTRIES: CRISIL Assigns B+ Rating to INR44.5MM Loan I N D O N E S I A GAJAH TUNGGAL: Moody's Puts B2 CFR on Review for Downgrade KAWASAN INDUSTRI: Fitch Rates USD186MM Sr. Unsecured Notes 'B+' J A P A N L-STARS ONE: Moody's Raises Rating on Class E Notes to Ba1 M A L A Y S I A PRIME GLOBAL: Terminates Crowe Horwath as Accountants N E W Z E A L A N D SOLID ENERGY: Asset Sales Process Proceeding on Schedule S I N G A P O R E RICKMERS MARITIME: Admits It Is Technically Insolvent S O U T H K O R E A HANJIN SHIPPING: Maersk Unlikely to Buy Container Ship Operators STX OFFSHORE: May Be Sold as Part of a Package Deal - - - - - ================= A U S T R A L I A ================= EMECO HOLDINGS: Fitch Cuts Long-Term Issuer Default Rating to 'C' ----------------------------------------------------------------- Fitch Ratings has downgraded Australia-based mining services provider Emeco Holdings Limited's (Emeco) Long-Term Issuer Default Rating to 'C' from 'CC'. Simultaneously the agency has affirmed the 'C' long-term rating on Emeco's USD282.7 mil. 9.875% senior secured notes due in 2019 with Recovery Rating of 'RR5'. The secured notes are issued by Emeco's wholly owned subsidiary Emeco Pty Ltd, and guaranteed by Emeco. The downgrade reflects the announcement of a prospective debt exchange that Fitch views as a distressed debt exchange (DDE) event, based on the agency's DDE criteria. Fitch expects part of the senior unsecured debt to be converted into subordinated instruments. If the debt exchange goes ahead, Fitch is likely to downgrade Emeco's rating to Restricted Default ('RD'). KEY RATING DRIVERS Debt Restructuring Plan Announced: The proposed restructuring is intended to provide Emeco with a sustainable capital structure by converting part of the senior secured debt into subordinated equity. The restructure agreement also establishes a framework for Emeco to merge with two other entities - Orionstone Pty Ltd (Orionstone, unrated) and Andy's Earthmovers Pty Ltd (Andy's, unrated) - and a recapitalisation of Emeco. The creditors of Orionstone and Andy's will also participate in the debt-for- equity swap. Under the swap, holders of Emeco's USD282.7m 9.875% 144A notes, as well the creditors of Orionstone and Andy's will give up their claims in exchange for 54% of the ordinary shares of the combined group, and a new issue of AUD473m senior secured notes with a five-year maturity and a cash interest rate of 9.25%. The new debt issue will postpone the current maturity of Emeco's notes by two years, and pay its holders a lower cash coupon. Emeco's noteholders accounting for a face value of 45% are party to the restructure agreement. The company requires noteholders of at least 50% by number and 75% by face value to agree to the restructuring plan. As part of the restructuring agreement, Emeco will also seek to refinance its committed asset-backed loan of AUD75m, which expires in December 2017. The company expects the restructuring process to be finalised in December 2016. Liquidity Stress Impacts Operations: Emeco's committed undrawn credit line expires in December 2017, and unless the company is able to negotiate an extension, then liquidity becomes a real concern. At the end of the fiscal year to 30 June 2016 (FYE16), the company had cash of AUD24.8m and up to AUD26m of committed unutilised credit lines that can be drawn without activating maintenance covenants. These sources appear sufficient to cover our estimate of Emeco's FY17 interest cost of AUD37m, and the AUD4m of finance leases maturing over the same period. As part of the restructuring agreement Emeco has also committed to closing out its remaining foreign-currency hedge, potentially releasing a further USD12m in available funds. RATING SENSITIVITIES Negative: Future developments that may, individually or collectively, lead to negative rating action include: -- If the company has experienced an uncured payment default -- Completion of the restructuring Positive: Future developments that may, individually or collectively, lead to positive rating action include: -- The company requires capital to improve its liquidity, but Fitch believes that access to capital will not be available. Therefore, Fitch does not expect the ratings to be upgraded. GROWTH PLUS: ASIC Files Civil Lawsuit vs. Firm, Ben Jayaweera ------------------------------------------------------------- The Australian Securities and Investments Commission has commenced civil proceedings in the Supreme Court of Queensland against Ben Jayaweera and Growth Plus Financial Group Pty Ltd. On March 11, 2016, the Australian Taxation Office wound up Growth Plus in relation to unpaid debts. Andrew Fielding and Matthew Joiner of BDO were appointed the liquidators of Growth Plus. ASIC is seeking declarations that Growth Plus is the trustee of the Australian Diversified Sector Income Fund (ADSIF) and that prior to being wound up, Growth Plus had contravened the Corporations Act by issuing units in the ADSIF contrary to the authorisation of its Australian Financial Services license. ASIC also alleges that Mr. Jayaweera was knowingly concerned in Growth Plus's contravention. ASIC is also seeking a number of injunctions in relation to Mr. Jayaweera's continuing involvement in ADSIF, and on Sept. 26 obtained interim injunctions whereby the Court ordered that Mr. Jayaweera: * be restrained from carrying on a financial services business in this jurisdiction without an AFS licence; * be restrained from managing, directing, controlling or otherwise operating the ADSIF; * be restrained from selling or otherwise disposing of the property of ADSIF or the ADSIF companies; * be restrained from receiving any benefit or other payment from or by any person in relation to any activities of the ADSIF Companies, other than reasonable travel and accommodation expenses, by providing Growth Plus and ASIC with seven days' notice of the expenditure, with supporting documentation evidencing the cost of the expenditure; and * be restrained from obtaining funds by any means from individuals (including their superannuation funds) other than professional investors as defined in section 9 of the Act, for the purpose of applying those funds to or for the use of ADSIF or the ADSIF Companies, or any other company that provides funds to Ocean Abalone Australia. The Court also ordered that certain books and records obtained by ASIC that relate to Growth Plus can be provided to Growth Plus at the Liquidators' request. The matter has been adjourned until 10:00 a.m. on Oct. 17, 2016. Australian Diversified Sector Income Fund was an unregistered managed investment scheme operated by Growth Plus until its liquidation in March 2016. The underlying asset of ADSIF is an abalone farm located in South Australia. The ADSIF Companies are: ADSIF, Growth Plus, Eyre Peninsula Aquaculture Pty Ltd, Laura Cove Australia Pty Ltd, GP NO 3 Pty Ltd, GP NO 4 Pty Ltd, GP NO 5 Pty Ltd, Ocean Abalone Australia No 1 Pty Ltd, Ocean Abalone Australia No 2 Pty Ltd, Ocean Abalone Australia No 3 Pty Ltd, Ocean Australia Food Pty Ltd and ADSIF Pty Ltd). LOTUS SECURITIES: ASIC Cancels License for Late Filing of Reports ----------------------------------------------------------------- Australian Securities and Investments Commission has cancelled the Australian financial services (AFS) licence of Lotus Securities Ltd (AFS licence 306812) for failing to comply with a number of its key obligations as a financial services licensee, including: * lodging its financial reports within the required timeframe; * lodging compliance plan audits and financial reports for the managed investment schemes it operates within the required timeframe; * complying with its financial resource requirements; * complying with a Notice issued by ASIC; * maintaining membership with an external dispute resolution scheme approved by ASIC; and * notifying ASIC of significant breaches within 10 days. ASIC Commissioner Greg Tanzer said, 'A responsible entity has an important gatekeeper role to ensure a managed investment scheme is operated in accordance with the Corporations Act. This is another example that demonstrates we will take action when there is a failure of a responsible entity to perform this gatekeeper role and non-compliance with these key obligations.' Lotus Securities has the right to appeal to the Administrative Appeals Tribunal for a review of ASIC's decision. Background Lotus Securities AFS licence was cancelled with effect from Sept. 26, 2016. MAX MOBILE: First Creditors' Meeting Set For Oct. 12 ---------------------------------------------------- A first meeting of the creditors of Max Mobile Mechanics Pty Limited will be held at the offices of BPS Recovery, Level 18, 201 Kent Street, in Sydney, on Oct. 12, 2016, at 10:00 a.m. David Sampson and Mitchell Ball of BPS Recovery were appointed as administrators of Max Mobile on Sept. 29, 2016. QUICKFLIX LTD: Karma Media Set to Buy Firm for AUD1.3MM ------------------------------------------------------- The Australian reports that Quickflix Ltd has found a new buyer, with US-based Karma Media Holdings set to take full control of the business that went into administration in April for AUD1.3 million. According to The Australian, the sale comes after Quickflix's creditors approved a deed of company arrangement (DOCA) proposed by Karma Media. The arrangement will see Karma Media take control of the Quickflix business and its assets in exchange for payment of AUD1.3 million into a deed fund. The Australian relates that Deloitte's Jason Tracy, who was appointed joint voluntary administrator in May, said the agreement offers the best outcome for Quickflix's creditors, its staff and customers. Karma Media will hold on to the majority of Quickflix's employees, with those let go set to get outstanding entitlements in full, The Australian says. The Australian says unsecured creditors will receive as much as 21.5 cent in the dollar, with services set to continue as normal for Quickflix's customers. "Quickflix has encountered corporate challenges and impediments in a highly competitive environment. As administrators we have been able to continue trading the business since our appointment, reduce costs, retain value, keep employing the majority of staff, and conduct a global sale process," the report quotes Joint Voluntary Administrator, Jason Tracy as saying. "Under new control, the Quickflix business will continue to trade, 24 employees will be retained, departing or already departed employees will receive all relevant entitlements, creditors will get a return and suppliers will have the option of trading with the continuing business. "The result is a good outcome for stakeholders." The DOCA provisions are scheduled to be completed by early February 2017, adds The Australian. Quickflix Limited is an ASX listed company, headquartered in Perth, Western Australia. The Company's principal activities involve the provision of an online movie subscription service and a DVD & Blu-ray delivery service. Dermott McVeigh, Wayne Rushton and Morgan Kelly of Ferrier Hodgson were appointed joint and several Voluntary Administrators of Quickflix Limited on April 26, 2016. ========= C H I N A ========= AGFEED USA: Court Narrows Claims in Suit vs. Former Director ------------------------------------------------------------ Judge Brendan Linehan Shannon of the United States Bankruptcy Court for the District of Delaware granted in part and denied in part the motion filed by K. Ivan F. Gothner to dismiss the adversary proceeding captioned JLL CONSULTANTS, INC., AS TRUSTEE OF THE AGFEED LIQUIDATING TRUST Plaintiff, v. K. IVAN F. GOTHNER, Defendant, Adv. No. 15-50210 (BLS) (Bankr. D. Del.). JLL initiated the adversary proceeding against Gothner for acts committed during his time as a director, Chair of the Audit Committee, Vice-Chairman and Chairman of the Board of AgFeed Industries, Inc. The second amended complaint alleged the following 10 counts against Gothner: (I) Breach of Fiduciary Duty (Duty of Care); (II) Breach of Fiduciary Duty (Duty of Loyalty); (III)-(V) Fraudulent Transfers; (VI) Recovery of Avoidable Transfers; (VII) Disallowance of Claims; (VIII) Recoupment; (IX) Setoff; and (X) Intentional Misrepresentation. Count I of the alleged that Gothner breached his fiduciary duty of care by causing AFI to fail to fully disclose accurate information related to the accounting fraud in China before September 2011, and by "failing to properly supervise and monitor the adequacy of AgFeed's internal controls..." Judge Shannon explained that a director may be liable for breach of fiduciary duty if he "knowingly" or "deliberately" disseminates false information. However, the judge found that the Trustee failed to allege that Gothner had actual knowledge of the falsity of the Company's statements, and that he allegedly made and acted with scienter in making the statements. Count II alleged that Gothner breached his fiduciary duty of loyalty in three ways: (a) by receiving and retaining compensation under the Employment Agreement; and by causing AgFeed to enter into transactions with (b) Minds Islands and (c) Walston DuPont. Judge Shannon found that the amended complaint failed to allege who approved the Employment Agreement and as such, the Trustee cannot rebut the business judgment rule. Additionally, the judge also found that the complaint did not allege that Gothner stood on both sides of the Employment Agreement's approval, therefore it provides no basis for a breach of loyalty claim. Judge Shannon also found that the amended complaint failed to allege whether Gothner had any role in the transactions with Minds Islands and Walston DuPont, or that Gothner stood on both sides of the transaction. As a result, Judge Shannon concluded that the amended complaint failed to allege sufficient facts regarding the Minds Islands and Walston DuPont transactions to support a cause of action for breach of the duty of loyalty. Count III alleged that Gothner received a total of $772,000 in salary and additional health benefits under the Employment Agreement between January 1, 2012, and July 15, 2013, that the transfers were made without fair consideration and that the Debtor was functionally insolvent at the time of each transfer. Judge Shannon, however, found that the complaint did not allege that Gothner received any compensation that he was not owed under the Employment Agreement, and that the Trustee in conclusory fashion merely argued that simply because Gothner made twice as much as the previous CEO, the payments must be excessive. Judge Shannon held that the amended complaint's conclusory allegations are insufficient to survive a motion to dismiss. Judge Shannon also dismissed the actual fraud claim in Count IV of the amended complaint because it alleged no additional facts to cure the defects of the original complaint. The court had previously dismissed the original complaint's claims that the Minds Island Payments constituted actually fraudulent transfers for two reasons because the original complaint did not identify who made the alleged transfers, nor the facts and circumstances of the alleged fraud. However, Judge Shannon denied Gothner's motion to dismiss the constructive fraud claim under Count IV of the amended complaint. The judge's denial was for the same reasons as stated by the court when it previously denied Gothner's motion to dismiss with regard to this claim. Count V of the amended complaint alleged that numerous transfers are constructively fraudulent transfers under applicable state law. Gothner's motion to dismiss with regard to this claim in the original complaint was previously denied by the court. Judge Shannon again denied the motion with respect to the amended complaint for the same reasons stated in the court's prior ruling. Because Counts IV and V are not being dismissed in their entirety, Judge Shannon held that Counts VI and VII do not fail to state a claim upon which relief may be granted. Count VIII of the amended complaint alleged that the Trustee is able to "recoup the damages awarded to the Trustee under Counts I through VI against any amounts owed to Gothner under his Employment Agreement." However, Judge Shannon explained that recoupment is a defense, not a cause of action. Thus, the judge held that it is improper for the Trustee to allege recoupment as a cause of action. Count IX of the amended complaint alleged that the "[u]nder both Nevada and Massachusetts state law, the Trustee may setoff any amounts owed to Gothner under his Employment Agreement against the damages awarded to the Trustee on Counts I through V." Judge Shannon held that because setoff is a defense available to the debtor - rather than a cause of action - it is improper for the Trustee to allege setoff in the amended complaint. Count X of the amended complaint alleged that Gothner engaged in intentional misrepresentation by nondisclosure. The Trustee brought Count X under the theory of common law fraud. However, Judge Shannon held that fraud claims are personal claims that belong to affected stockholders, not the Company and thus, Count X must be dismissed. In summary, Judge Shannon granted Gothner's motion to dismiss with respect to Counts I, II, III, VIII, IX and X in their entirety, and granted the motion with respect to Count IV's claims for actual fraud. Judge Shannon denied the motion with regards to the remainder of Count IV, and the entirety of Counts V, VI, and VII. The bankruptcy case is In re: AgFeed USA, LLC, et al, Chapter 11, Debtors, Case No. 13-11761 (BLS) Jointly Administered (Bankr. D. Del.). A full-text copy of Judge Shannon's September 13, 2016 opinion is available at https://is.gd/jIn70q from Leagle.com. JLL Consultants, Inc., Not Individually but Solely as Trustee of the AgFeed Liquidating Trust is represented by: Shelley A. Kinsella, Esq. Jonathan M. Stemerman, Esq. Eric Michael Sutty, Esq. ELLIOTT GREENLEAF 1105 Market Street, Suite 1700 Wilmington, DE 19801 Tel: (302)384-9400 Fax: (302)384-9399 Email: sak@elliottgreenleaf.com jms@elliottgreenleaf.com ems@elliottgreenleaf.com K. Ivan F. Gothner is represented by: William Pierce Bowden, Esq. Frederick T. Mickler, IV, Esq. Stacy L. Newman, Esq. ASHBY & GEDDES 500 Delaware Avenue Wilmington, DE 19899 Tel: (302)654-1888 Fax: (302)654-2067 Email: wbowden@ashby-geddes.com snewman@ashby-geddes.com About AgFeed Industries AgFeed Industries, Inc., has 21 farms and five feed mills in China producing more than 250,000 hogs annually. In the U.S., the business included 10 sow farms in three states and two feed mills producing more than one million hogs a year. AgFeed's revenue in 2012 was $244 million. AgFeed and its affiliates filed voluntary petitions under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case No. 13-11761) on July 15, 2013, with a deal to sell most of its subsidiaries to The Maschhoffs, LLC, for cash proceeds of $79 million, absent higher and better offers. The Debtors estimated assets of at least $100 million and debts of at least $50 million. Keith A. Maib signed the petition as chief restructuring officer. Hon. Brendan Linehan Shannon presides over the case. Donald J. Bowman, Jr., and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor, serve as the Debtors' counsel. BDA Advisors Inc. acts as the Debtors' financial advisor. The Debtors' claims and noticing agent is BMC Group, Inc. The U.S. Trustee has appointed a five-member official committee of unsecured creditors to the Chapter 11 cases. The Creditors' Committee tapped Lowenstein Sandler as lead bankruptcy counsel and Greenberg Traurig, LLP, as co-counsel. CohnReznick LLP serves as the Creditors' Committee's financial advisor. An official committee of equity security holders was also appointed to the Chapter 11 cases. The Equity Committee tapped Sugar Felsenthal Grais & Hammer LLP and Elliott Greenleaf as co-counsel. Jefferies Leveraged Credit Products and Claims Recovery Group are represented by Lawrence J. Kotler, Esq., and Catherine B. Heitzenrater, Esq., at Duane Morris, LLP. AgFeed USA, LLC, et al., notified the Bankruptcy Court that the Effective Date of the Revised Second Amended Plan of Liquidation occurred on Nov. 10, 2014. As reported in the Troubled Company Reporter on Nov. 7, 2014, the Court confirmed the revised second amended plan, which was supported by the Official Committee of Equity Security Holders. CHINA AOYUAN: Moody's Affirms B2 CFR; Changes Outlook to Positive ----------------------------------------------------------------- Moody's Investors Service has changed to positive from stable the rating outlook of China Aoyuan Property Group Limited. At the same time, Moody's has affirmed China Aoyuan's B2 corporate family rating and B3 senior unsecured debt ratings. RATINGS RATIONALE "The change in outlook reflects the improving trend in China Aoyuan's credit profile, stemming in turn from its strengthened level of sales execution, lower borrowing costs, and disciplined approach in land acquisitions," says Kaven Tsang, a Moody's Vice President and Senior Credit Officer. China Aoyuan has exhibited robust sales execution, as reflected in contracted sales of RMB13.2 billion in the first eight months of 2016 -- on track to achieving its RMB18 billion target for the year -- and up 55% year on year. This growth is also higher than the national average of 40% year on year for China's residential sales for the same period. Moody's expects the company to maintain this improving trend because it has been strengthening its brand in its core market in Guangdong Province, especially in Guangzhou city, where demand for its properties has been favorable. China Aoyuan will likely maintain growth in contracted sales of around 10%-15% per annum in the next 12-18 months, supporting the positive ratings outlook. At the same time, the company has demonstrated discipline in land acquisitions and business expansion. China Aoyuan has kept the proportion of its annual land acquisitions at levels equivalent to 30%-40% of contracted sales in the past 2-3 years. Moody's expects the company will maintain such a disciplined approach in its acquisitions. Additionally, the company has benefited from its access to the domestic bond market and the lower cost funding environment existent in China. Moody's estimates that the average borrowing costs will fall to around 8% in the next 6-12 months from around 8.4% in 1H 2016 and 9.5% in 2015 as its high cost offshore bonds and trust loans are refinanced. Moody's expects that China Aoyuan will sustain these improvements and show credit metrics better than those of its B2 peers. Revenue/adjusted debt will likely to improve to above 70% in 2017 from 61.6% in the 12 months to June 2016, while EBIT/interest coverage will rise to about 2.5x in 2017 from about 2.25x. China Aoyuan's B2 corporate family rating continues to reflect its track record in property development in economically strong Guangdong Province, a record that has helped the company secure projects in prime locations within and outside the province. On the other hand, the B2 corporate family rating is constrained by the firm's small scale and fairly high geographic concentration in Guangdong. China Aoyuan's liquidity position is sufficient. Its cash and deposit balances totaled RMB10.2 billion at end-June 2016 which are enough to cover its short-term debt of around RMB4.1 billion and unpaid committed land premium of around RMB1 billion. The company's bond rating is notched down to B3, reflecting structural and legal subordination. Secured and subsidiary debt/total assets was estimated at around 22% as of June 2016. This ratio will likely stay above 15% over the next 12-18 months, as the company will continue to draw on onshore and/or secured bank loans to fund construction and expansion. Upward rating pressure could emerge in the medium term if the company demonstrates: (1) a track record of strong contracted sales and revenue recognition; (2) a consistently prudent pace of land acquisitions and improved cash flow planning; (3) improvements in credit metrics, such that EBIT/interest exceeds 2.5x-3.0x and revenue/adjusted debt exceeds 70%-75%; and (4) good liquidity, such that cash consistently covers short-term debt. On the other hand, the rating could return to stable if the company shows slower growth in contracted and its credit metrics are unlikely to reach upgrade levels over the medium term. In such a situation, EBIT/interest will fall below 2.0x-2.5x and/or revenue/adjusted debt will fall below 65%-70%. The principal methodology used in these ratings was Homebuilding And Property Development Industry published in April 2015. Listed on the Hong Kong Stock Exchange in October 2007, China Aoyuan Property Group Limited was founded in 1998 by Mr. Guo Zi Wen. At end-2015, the company had 57 projects in nine provinces in China, including Guangdong Province and Chongqing city, as well as in Sydney, Australia. It has a total land bank of 13.33 million square meters in gross floor area. CHINA BAK: Dismisses Crowe Horwath as Accountants ------------------------------------------------- China BAK Battery, Inc., was advised that the Company's independent registered public accounting firm, Crowe Horwath (HK) CPA Limited, will no longer provide audit and assurances services to public companies subject to the statutes and regulations of the United States effective as of Oct. 1, 2016. Accordingly, the Company, with the approval of its audit committee of Board of Directors, dismissed CHHK as its independent registered public accounting firm, effective Sept. 29, 2016. CHHK's reports on the financial statements of the Company for the fiscal years ended Sept. 30, 2015, and 2014 did not contain any adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting principles, except that its report for each of the fiscal years ended Sept. 30, 2015 and 2014 contained an emphasis of matter paragraph regarding the Company's ability to continue as a going concern. During the Company's fiscal years ended Sept. 30, 2015, and 2014 and through Sept. 29, 2016, there were no disagreements with CHHK on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure which disagreements, if not resolved to CHHK's satisfaction, would have caused them to make reference to the subject matter in connection with their report on the Company's consolidated financial statements for those periods. Furthermore, no reportable events as described in paragraphs (a)(1)(v)(A)-(D) of Item 304 of Regulation S-K occurred within the periods covered by CHHK's reports on the Company's consolidated financial statements, or subsequently up to the date of CHHK's dismissal. On Sept. 29, 2016, concurrent with the dismissal of CHHK, the Company, upon the approval of the Audit Committee, engaged DCAW (CPA) Limited as the Company's independent registered public accounting firm, effective immediately. The director formerly responsible for the Company's account at CHHK will join DCAW, and will be the director responsible for the Company's account at that firm. During the Company's two most recent fiscal years ended Sept. 30, 2015, and 2014 and through Sept. 29, 2016, neither the Company nor anyone on its behalf consulted DCAW. About China BAK China BAK Battery conducted business through BAK International Limited and its subsidiaries that produced prismatic cells, cylindrical cells, lithium polymer cells and high power lithium batters. The BAK International business was foreclosed on June 30, 2014. Consequently, China BAK is looking to develop, manufacture and sell energy high power lithium batteries primarily for electric vehicles when its Dalian, China manufacturing facilities start to operate in the first quarter of 2015. China BAK reported net profit of US$15.9 million for the year ended Sept. 30, 2015, compared to net profit of US$37.8 million for the year ended Sept. 30, 2014. As of June 30, 2016, the Company had US$82.5 million in total assets, US$67.4 million in total liabilities and US$15.1 million in total shareholders' equity. Crowe Horwath (HK) CPA Limited, in Hong Kong, China, issued a "going concern" qualification on the consolidated financial statements for the year ended Sept. 30, 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 Sept. 30, 2015. All these factors raise substantial doubt about its ability to continue as a going concern. COUNTRY GARDEN: Fitch Assigns BB+ Rating to USD650MM Senior Notes ----------------------------------------------------------------- Fitch Ratings has assigned Country Garden Holdings Co. Ltd.'s (BB+/Stable) USD650 million 4.75% senior notes due 2023 a final rating 'BB+'. The notes are rated at the same level as Country Garden's senior unsecured rating because they constitute direct and senior unsecured obligations of the company. The assignment of the final rating follows the receipt of documents conforming to information already received and the final rating is in line with the expected rating assigned on Sept. 19, 2016. Country Garden's ratings are supported by cash inflow from annual contracted sales of over CNY100bn, strong financial flexibility with low interest cost, and a track record of strong execution. Moving into the higher-tier cities is a positive development in Country Garden's progression towards becoming a nationwide homebuilder. However, this process may take another one to two years to reach fruition if the company continues on its current trajectory. KEY RATING DRIVERS Ongoing Land Bank Adjustment: Fitch believes Country Garden will continue to reposition its land bank in the next 12 to 24 months. The repositioning in 2015 was to boost the contribution from products targeted at Tier 1 and 2 cities; 52% of the CNY140bn contracted sales came from products targeting these cities. Out of the CNY56bn of land acquired in 2015, 67% is in Tier 1 and 2 cities and 75% is aimed at residents of these cities. Aggressive Expansion Pressures Leverage: Fitch expects net debt to rise to CNY70bn-95bn in 2016 with the expansion of the land bank. The total land premium of CNY56bn (CNY43bn on an attributable basis) was far beyond its budget of CNY20bn at the start of 2015. This resulted in leverage (as measured by net debt/adjusted inventory) rising to 40% from 36% in 2014. Higher end-2015 gross debt has also lowered its churn - as measured by contracted sales to total debt - to 1.1x from 2.0x in 2014. This is less of an issue, since the higher available cash of CNY36.2bn at end-2015 (from CNY18.7bn at end-2014) will reduce pressure from higher debt. Gradual Recovery in Margins: Fitch expects the EBITDA margin to improve to 16% in 2016 from 14% in 2015 with recognition of wider-margin contracted sales. The 2015 EBITDA margin was at its historical low, as the company recognised lower-margin products, such as high-rise residential apartments, and recognised average selling price (ASP) fell to CNY6,194 per square metre (sq m) compared with the average recognised ASP of CNY6,611 in 2013 and 2014, as well as average contracted sales ASP of CNY6,658 in 2013-2015. However, Fitch believes EBITDA margin will improve after 2016 due to recognition of the wider-margin contracted sales and continued de-stocking of low-margin products. Successful product repositioning will be a positive development - given the better margins, churn and liquidity of the products targeting at Tier 1 and 2 cities. Financial Control Remains Intact: Fitch believes Country Garden continues to exercise reasonable control of its financial profile even as its land acquisition exceeded its initial budget by a factor of 2.8x. It has demonstrated a financial record of improving funding flexibility and falling interest costs, where the average borrowing cost decreased to 6.2% in 2015 from 7.6% in 2014. Corporate Action Potential: Country Garden has stated its share buyback plans, and has made two acquisitions of auxiliary businesses related to homebuilding. Fitch expects the company will continue to make bolt-on acquisitions to strengthen these auxiliary businesses. KEY ASSUMPTIONS Fitch's key assumptions within our rating case include: -- Contracted sales by gross floor area to increase by 5% over 2016-2017; -- Average selling price for contracted sales to increase by 8% over 2016-2017; -- EBITDA margin improves to 16%-17% in 2016 and to 20%-23% in 2017; -- Total land cost around CNY35bn-45bn in 2016-2017; -- Net debt including perpetuals to be around CNY70bn-95bn in 2016. RATING SENSITIVITIES Positive: Developments that may, individually or collectively, lead to positive rating action include: -- Sustaining trend of neutral or positive cash flow from operating activities -- Maintaining the ratio of net debt to adjusted inventory below 35% on a sustained basis (2015: 40.3%) -- Maintaining the ratio of contracted sales to gross debt above 1.5x on a sustained basis (2015: 1.12x) Negative: Developments that may individually or collectively, lead to negative rating action include: -- EBITDA margin below 20% on a sustained basis (2015: 13.9%) -- Maintaining the ratio of net debt to adjusted inventory above 45% on a sustained basis -- Maintaining the ratio of contracted sales to gross debt below 1.2x on a sustained basis ========= I N D I A ========= A.S. TRADERS: CRISIL Suspends B+ Rating on INR100MM Cash Loan ------------------------------------------------------------- CRISIL has suspended its ratings on the bank facilities of A.S. Traders. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 100 CRISIL B+/Stable The suspension of ratings is on account of non-cooperation by AST with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, AST is yet to provide adequate information to enable CRISIL to assess AST's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL views information availability risk as a key factor in its assessment of credit risk. AST, is a partnership firm incorporated in June 21, 2013 and a distributor for the UB group's Kingfisher Beer for the Punjab region. The firm was also awarded with Heineken beer agency during November 2014. The firm is promoted by the Grover family which has been in the liquor business for over three decades. AAVISHKAAR SEP: Ind-Ra Assigns 'IND BB' Rating to INR21MM SLCF -------------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned Aavishkaar Sep 2016 Trust (an ABS transaction) provisional ratings as follows: -- INR350.1 million Series A1 pass through certificates (PTCs): 'Provisional IND A-(SO)'; Outlook Stable -- INR21.0 million second loss credit facility (SLCF): 'Provisional IND BB(SO)'; Outlook Stable The final rating is contingent upon the receipt of final documents conforming to the information already received. The micro finance loan pool to be assigned to the trust has been originated by Arohan Financial Services Pvt Ltd. (AFSPL). KEY RATING DRIVERS The provisional ratings are based on Arohan Financial Services' origination, servicing, collection and recovery expertise, the legal and financial structure of the transaction and the credit enhancement (CE) provided in the transaction. The provisional rating of Series A PTCs addresses the timely payment of interest and principal on monthly payment dates by the final maturity date of June 2018 in accordance with the transaction documentation. The transaction benefits from the internal CE on account of excess interest spread. The total excess cash flow or the internal CE available to Series A PTCs is 8.41% of the initial pool principal outstanding (POS). The transaction also benefits from the external CE of 11.0% of the initial POS. The total available CE consists of a first loss credit facility of 5.00% and an SLCF of 6.00%. The first loss credit facility is likely to be provided in the form of fixed deposits in the name of the originator with a lien marked in favour of the trustee. Furthermore, the SLCF is likely to be either in the form of fixed deposits with a bank or in the form of an unconditional and irrevocable bank guarantee. The collateral pool to be assigned to the trust at par had the initial POS of INR350.1m, as of the pool cut-off date of Aug. 31, 2016. RATING SENSITIVITIES As part of its analysis, Ind-Ra built a pool cash flow model based on the transaction's financial structure. The agency also analysed historical data to determine the base values of key variables that would influence the level of expected losses in this transaction. The base values of the default rate, recovery rate, time to recovery, collection efficiency, prepayment rate and pool yield were stressed to assess whether the level of CE was sufficient for the current rating levels. Ind-Ra also conducted rating sensitivity tests. If the assumptions of the base case default rate worsen by 30%, the model-implied rating sensitivity suggests that the rating will be downgraded by three notches. ABHIJIT REALTORS: CRISIL Suspends D Rating on INR350MM Cash Loan ---------------------------------------------------------------- CRISIL has suspended its ratings on the bank facilities of Abhijit Realtors and Infraventures Pvt Ltd (ARIPL). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 350 CRISIL D Proposed Long Term Bank Loan Facility 70 CRISIL D The suspension of ratings is on account of non-cooperation by ARIPL with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, ARIPL is yet to provide adequate information to enable CRISIL to assess ARIPL's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL views information availability risk as a key factor in its assessment of credit risk. ARIPL, incorporated in 2007, is a real estate developer based in Nagpur (Maharashtra) and is promoted by Mr. Abhijit Majumdar. The promoter has been in the real estate business since 1997 and has completed about 30 projects till date. AGASTHYA COPPER: CRISIL Suspends 'D' Rating on INR90MM Cash Loan ---------------------------------------------------------------- CRISIL has suspended its ratings on the bank facilities of Agasthya Copper Pvt Ltd. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 90 CRISIL D Proposed Long Term Bank Loan Facility 40 CRISIL D The suspension of ratings is on account of non-cooperation by ACPL with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, ACPL is yet to provide adequate information to enable CRISIL to assess ACPL's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL views information availability risk as a key factor in its assessment of credit risk. ACPL is promoted by Mr. Sidharth Shah and his wife, Ms. Hetal Shah. It was initially established in 2005 as a proprietorship firm, Agasthya Enterprises, by Mr. Sidharth Shah; and was reconstituted as a private limited company under the current name in 2010. ACPL manufactures (through its associate company, Arje Copper Pvt Ltd) and trades in copper alloy products such as copper tubes, terminals, pipes, strips, sections, and bus bars. AISHWARYA COTTONS: ICRA Suspends B+ Rating on INR12cr Loan ----------------------------------------------------------- ICRA has suspended long-term rating of [ICRA]B+ to INR12.00 crore fund based facilities of Aishwarya Cottons. The suspension follows ICRA's inability to carry out a rating surveillance in the absence of the requisite information from the company. Aishwarya Cotton is engaged in cotton trading, ginning & pressing. The firm's major products include cotton seed and cotton lint. It was established in 2012 and commenced operations in April 2013. The firm was promoted by Mr. B. Muddubasavan Gowd and his family; the promoters of the firm have longstanding experience in the business through their other group entities. ALLIANCE INDUSTRIAL: Ind-Ra Withdraws 'IND BB' LT Issuer Rating --------------------------------------------------------------- India Ratings and Research (Ind-Ra) has withdrawn Alliance Industrial Marketing's (AIM) 'IND BB(suspended)' Long-Term Issuer Rating. The agency has also withdrawn the 'IND BB(suspended)'/'IND A4+(suspended)' ratings on the company's INR108m fund-based working capital limits. The ratings have been withdrawn due to lack of adequate information. Ind-Ra will no longer provide ratings or analytical coverage for AIM. Ind-Ra had suspended AIM's ratings on March 4, 2016. ANANTA MEDICARE: CRISIL Assigns B+ Rating to INR100MM Term Loan --------------------------------------------------------------- CRISIL has assigned its 'CRISIL B+/Stable' rating to the long- term bank facilities of Ananta Medicare Limited (AML). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 20 CRISIL B+/Stable Term Loan 100 CRISIL B+/Stable The ratings reflect the initial stage and small scale of operations, working capital intensity and customer concentration in revenue profile along with its exposure to ongoing project implementation risk. These rating weaknesses are partially offset by extensive experience of promoters, funding support received from them and moderate networth. Outlook: Stable CRISIL believes Ananta Medicare Ltd will benefit from extensive experience of promoters and funding support received from them, over the medium term. The outlook may be revised to 'Positive' if the company reports substantial improvement in scale of operations and stable profitability leading to higher-than- expected cash accrual. The outlook may be revised to 'Negative', if lower-than-expected revenue and profitability, larger than expected, debt-funded capital expenditure, or stretch in the working capital cycle, weakens the financial risk profile, especially liquidity. AML was incorporated in 2008, by promoters, Mr. Pradeep Jain, Mr. Rajesh Jain, Mr. Sanjay Jain and Mr. Sanjeev Kumar. The company manufactures and exports herbal pharmaceutical products to Ukraine, Moldova and Azerbaijan etc. The company has its manufacturing facility at Ganganagar, Rajasthan. It is also setting up a new capacity for allopathic drugs. ARCHANA MOTORS: CRISIL Assigns B- Rating to INR115MM Loan --------------------------------------------------------- CRISIL has assigned its 'CRISIL B-/Stable' rating on bank facilities of Archana Motors Private Limited. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 5 CRISIL B-/Stable Electronic Dealer Financing Scheme(e-DFS) 115 CRISIL B-/Stable The rating reflects the weak financial risk profile, marked by small networth, high total outside liabilities to tangible networth ratio, and sub-par debt protection metrics. These rating weaknesses are offset by extensive experience of promoters, healthy relationship with principal, Tata Motors Ltd (TML), and low debtor and inventory risk. Outlook: Stable CRISIL believes AMPL will continue to benefit from its established relationship with TML and extensive experience of promoters. The outlook may be revised to 'Positive' if improvement in scale of operations and profitability leads to sizeable cash accrual and stronger debt protection metrics. The outlook may be revised to 'Negative' if large debt contracted to fund working capital or capital expenditure, weakens the financial risk profile, especially liquidity. AMPL was established in 2011 by promoter, Mr. Shibu Job C. The company is an authorised dealer of commercial vehicles of TML, in Thrissur and Palakkad, and has 11 showrooms and 6 service centres. ARSHIT GEMS: ICRA Reaffirms 'D' Rating on INR28cr Loan ------------------------------------------------------ ICRA has reaffirmed the long term rating assigned to the INR28 crore fund based bank limits of Arshit Gems at [ICRA]D. ICRA has also reaffirmed the short term rating assigned to the abovementioned bank limits of the company at [ICRA]D. The reaffirmation of ratings reflects current delays in debt servicing by the company. The company has been classified as a non performing asset by its bankers. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term/Short term fund based limits 28 [ICRA]D/[ICRA]D reaffirmed Arshit Gems was incorporated in 1988 as a partnership firm by five partners (all family members).The firm is engaged in importing rough diamonds, cutting, polishing and marketing them in India as well as to various destinations globally. The firm has manufacturing units situated at Surat (2 units), Bhavnagar (3 units) and Rajkot (1 unit). ATOM CERAMIC: ICRA Revises Rating on INR4.0cr Cash Loan to B ------------------------------------------------------------ ICRA has revised the long-term rating to [ICRA]B from [ICRA]B+ for the INR4.00-crore fund-based cash credit facility and INR2.11-crore term loan of Atom Ceramic. ICRA has also reaffirmed the short-term rating to INR1.80-crore non-fund based bank guarantee facility of AC. ICRA has further assigned an [ICRA]B/[ICRA]A4 rating to the INR1.23-crore unallocated limits of AC. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund-based Limit- Cash Credit 4.00 Revised to [ICRA]B from [ICRA]B+ Fund-based Limit- Term Loan 2.11 Revised to [ICRA]B from [ICRA]B+ Non-fund Based Limit Bank Guarantee 1.80 [ICRA]A4; re-affirmed Unallocated Limits 1.23 [ICRA]B/[ICRA]A4; assigned The rating revision takes into account the decline in revenue from INR15.2 crore during FY2015 to INR8.1 crore during FY2016 registering 46.7% de-growth. Dip in revenue is on account of a shutdown of manufacturing activity for ~4-5 months on account of improper functioning of newly installed customised kiln. ICRA also takes note of weak profitability at the net level along with low return indicators, low coverage indicators and stretched capital structure, resulting in high gearing. During March 2016, nine partners retired from the firm and their share of capital was transferred to the unsecured loan resulting in an increase in debt levels and a simultaneous decline in net worth. This transaction has resulted in a high gearing level of 5.8 times as on March 31, 2016 as against 1.4 times as on March 31, 2015. The ratings are further constrained by the high working capital intensity at 75% as on March 31, 2016 resulting from elongated receivables from debtors and high inventory holding. The ratings also take note of the highly competitive nature of the ceramic tile industry. The ratings, however, positively consider the promoters' extensive experience in the ceramic industry and favorable location of the plant with its proximity to the raw material sources. ICRA further notes that the declining gas prices and the installation of a coal-based gasifier, results in considerable savings in fuel cost and helps alleviate cost pressures to some extent. ICRA thinks AC's profitability is vulnerable to the volatility in raw material and fuel prices along with the cyclicality of demand from its end-user industry i.e. construction. However, improving profitability with increased scale of operations, strengthening capital structure by way of infusion of capital and its ability to manage working capital requirement will be the key rating sensitivities. Atom Ceramic was incorporated in July 2009. The company is into manufacturing of digitally printed ceramic wall tiles. It commenced its commercial operations from May 2010. It was dealing in two sizes of tiles i.e. 12" X 18" and 8" X 18". During March 2016, the firm started manufacturing larger sized tiles i.e. 12"X24". The manufacturing facility is located in Morbi, Gujarat with an installed capacity of 15000 Metric Tonnes Per Annum (MTPA). The company markets its tiles under the brand name of 'Atom Ceramic'. During March 2016, with the reconstitution of the partnership firm by way of admission of six new partners and retirement of nine old partners - at present it has eight partners. Recent Results During the financial year FY2016, the company registered a net profit of INR0.01 crore on an operating income of INR8.1 crore. BRAHMAPUTRA BIOCHEM: CRISIL Assigns D Rating to INR582MM Loan ------------------------------------------------------------- CRISIL has assigned its 'CRISIL D' ratings to bank facilities of Brahmaputra Biochem Pvt Ltd. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Term Loan 582 CRISIL D Proposed Term Loan 200 CRISIL D Cash Credit 179.1 CRISIL D Proposed Long Term Bank Loan Facility 39.0 CRISIL D The rating reflects instances of delay in servicing interest obligations on account of weak liquidity. The rating also reflects the nascent stage of operations and the exposure to commensurate ramp-up in scale, below-average financial risk profile due to large debt-funded capital expenditure, and sizeable working capital requirement. These ratings weaknesses are partly mitigated by entrepreneurial experience of promoters and their funding support, and moderate operating efficiency expected, due to higher regional demand and fiscal benefits available. Incorporated in August 2010 by Mr. Jagmohan Singh Arora, Mr. Kuljeet Singh Arora, Mr. Hari Singh Arora, Mr. Avinash Deewan and Mr. Mrigaraj Das, BBPL manufactures grain-based extra neutral alcohol (ENA). The company has set up a plant in Guwahati, with a capacity to manufacture 60,000 litres of ENA per day. It also has a 2 MW cogeneration power plant and a CO2 recovery plant, with capacity of 40 MT per day. The project was commissioned and commercial operations started in the first quarter of fiscal 2017. Apart from BBPL, promoters have business interests in hospitality, dairy, and granite mining industries. BRIJ SUGAR: CRISIL Suspends 'D' Rating on INR100MM Term Loan ------------------------------------------------------------ CRISIL has suspended its rating on the bank facilities of Brij Sugar Industries Private Limited. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 30 CRISIL D Proposed Long Term Bank Loan Facility 40 CRISIL D Term Loan 100 CRISIL D The suspension of ratings is on account of non-cooperation by BSIPL with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, BSIPL is yet to provide adequate information to enable CRISIL to assess BSIPL's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL views information availability risk as a key factor in its assessment of credit risk. BSIPL was incorporated in 2010, promoted by Mr. Mahindra Goel is a sugar manufacturing unit at Jyotiba Phule Nagar (Uttar Pradesh). BRISK INFRASTRUCTURE: CRISIL Suspends D Rating on INR450MM Loan --------------------------------------------------------------- CRISIL has suspended its ratings on the bank facilities of Brisk Infrastructure and Developers Private Limited (Brisk). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Proposed Long Term Bank Loan Facility 45 CRISIL D Term Loan 450 CRISIL D The suspension of ratings is on account of non-cooperation by Brisk with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, Brisk is yet to provide adequate information to enable CRISIL to assess Brisk's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL views information availability risk as a key factor in its assessment of credit risk. Incorporated in 1996, Brisk undertakes real estate construction. The company is promoted and managed by Mr. Harish Gehlot and his brother, Mr. Kailash Gehlot. It is implementing a group housing project, Lumbini Terrace Homes, in Gurgaon (Haryana). CIEMME JEWELS: ICRA Reaffirms 'D' Rating on INR20cr LT Loan ----------------------------------------------------------- ICRA has reaffirmed the long term rating of [ICRA]D for the INR37.9 crore fund based and INR0.4 crore non fund based bank limits of Ciemme Jewels Limited. The rating reaffirmation reflects current delays in debt servicing by the company. The company has been classified as a non performing asset by its bankers. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term, fund based limits (CC) 20.0 [ICRA]D reaffirmed Long term, fund based limits 4.0 [ICRA]D reaffirmed Long term, fund based limits (WCTL) 13.9 [ICRA]D reaffirmed Long term, non fund based limits 0.4 [ICRA]D reaffirmed Ciemme Jewels Limited is a wholly owned subsidiary of C Mahendra International Limited. CMIL is in turn a wholly owned subsidiary of C Mahendra Exports Limited which is the flagship company of the C Mahendra Group. CMIL is the holding company for all other C Mahendra group companies. CJL was incorporated on April 03, 2003 as C.M. Jewels Private Limited to buy, sell, export, import, deal, market and manufacture diamonds, precious stones, semi- precious stones and jewellery. The name of the company was changed to Ciemme Jewels Private Limited on June 06, 2003. The company was converted into a public limited company and name was further changed to Ciemme Jewels Limited with effect from June 28, 2007. The company is engaged in the manufacturing and marketing of Diamond studded jewellery. It also engages in trading of diamonds. COUNTRY CLUB: ICRA Assigns 'D' Rating to INR281.45cr Loan --------------------------------------------------------- ICRA has assigned the long-term rating of [ICRA]D to the INR281.45-crore fund-based limits and the INR18.55-crore unallocated limits of Country Club Hospitality & Holidays Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund-based limits 281.45 [ICRA]D; assigned Unallocated Limits 18.55 [ICRA]D; assigned The assigned rating reflects the delays in debt-servicing by the company owing to its stretched liquidity position. Given the high operating leverage, the slowdown in new membership addition and decline in average membership fee during the last two years has resulted in net losses. Although the company has reported cash profits during this period, the debt repayment obligation was higher than the net cash accruals. Further, the company has been able to get its entire debt restructured by June 2016. Post restructuring, the principal repayment obligation over next two years stands at INR30.57 crore as against INR72.51 crore earlier thereby easing the burden on CCHHL's cash flows. ICRA notes that CCHHL is the largest chain of family clubs in India through a network of 223 clubs of which 49 are owned and with a membership base of 436,933 as on March 31, 2016. Notwithstanding the healthy growth in the annual subscription fee at a CAGR of 26% during FY2012-FY2016 to INR45.51 crore, indicating annual renewals of ~ 35% against ~21% in FY2012, the dependence on new membership addition continues to remain high, which contributes ~72% to its operating income. Going forward, CCHHL's ability to service its debt obligations in a timely manner will be the key rating sensitivity. Incorporated in 1989, CCHHL is in the holiday and leisure services business providing family clubbing facilities and timeshare vacations to its members spread across 51 properties (33 owned, 16 associated properties and 2 leased) reinforced by 220-plus India and global affiliations (via Country Vacations) and 3900 resorts (via RCI affiliation). It has 436,933 individual members and 600 corporate members comprising brands like Microsoft, Tech Mahindra, CMC Limited (now merged with TCS Limited) and Dr. Reddy's Labs, among others. CCHHL started its operations under the banner Amrutha Estates in 1981 as a real estate development company in South India. In 1989, the company entered the clubbing business with the objective to make clubbing accessible and affordable to the upwardly population in India. Recent Results As per audited financials on a standalone basis, the company reported a net loss of INR10.65 crore on an operating income of INR281.06 crore during FY2016 as against a net loss of INR11.29 crore on an operating income of INR271.21 crore during FY2015. DEEPAK COTTON: Ind-Ra Withdraws 'IND B' Long-Term Issuer Rating --------------------------------------------------------------- India Ratings and Research (Ind-Ra) has withdrawn Deepak Cotton Factory's (DCF) 'IND B(suspended)' Long-Term Issuer Rating. The agency has also withdrawn the 'IND B(suspended)'/IND A4(suspended)' ratings on the company's INR100 million fund-based working capital limits. The ratings have been withdrawn due to lack of adequate information. Ind-Ra will no longer provide ratings or analytical coverage for DCF. Ind-Ra had suspended DCF's ratings on 02 March 2016. E.S. KNIT: CRISIL Assigns B+ Rating to INR12.5MM Loan ----------------------------------------------------- CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' rating to the bank facilities of E.S. Knit Wear. The ratings reflect ESK's modest scale of operations in a highly fragmented industry and working capital intensive operations. These rating weaknesses are partially offset by the promoter's extensive experience in the textile industry. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Working Capital Facility 11 CRISIL B+/Stable Term Loan 4 CRISIL B+/Stable Foreign Bill Discounting 12.5 CRISIL B+/Stable Packing Credit 32.5 CRISIL A4 Outlook: Stable CRISIL believes that ESK will continue to benefit over the medium term from its promoters' extensive industry experience. The outlook may be revised to 'Positive' if the firm achieves a substantial increase in its revenues resulting in higher than expected accruals, while maintaining its capital structure. Conversely, the outlook may be revised to 'Negative' if ESK's revenue or profitability decline or if the firm undertakes a larger than expected debt-funded capital expenditure programme, resulting in weakening of its financial risk profile. ESK was set up in 1985 as a proprietorship firm by Mr. Easwaran. The firm is engaged in manufacturing of readymade garments. ESK, on a provisional basis, reported profit after tax (PAT) of INR2.6 million on net sales of INR72.5 million for 2015-16 (refers to financial year, April 1 to March 31), against PAT of INR4.44 million on net sales of INR131.4 million for 2014-15 GREENKO ENERGY: Unaffected by SunEdison Asset Buy, Says Fitch ------------------------------------------------------------- Greenko Energy Holdings' credit profile is not affected by its acquisition of SunEdison's India portfolio, Fitch Ratings says. The agency expects GEH's leverage to increase temporarily at the end of the financial year to March 2017 (FY17), before improving from FY18 as the acquired assets chalk up a full year of operations. GEH announced on 30 September 2016 that it will acquire about 390MW of SunEdison's solar and wind power generation assets in India that are operational or close to coming on line. The acquisition has an enterprise value of USD392m, which GEH will meet by making a cash payment of USD42m and assuming project- level debt of USD350m (at an 11.3% of average interest cost). As a part of the transaction agreement, GEH will take over SunEdison's pipeline of solar generation projects in India at no additional cost. These projects in the pipeline have total capacity of 653MW. About 83% of the total capacity that GEH will acquire is in its current regions of operations - Andhra Pradesh, Telangana and Karnataka - while the rest is mainly in Tamil Nadu. This may provide certain operational synergies if this solar capacity is combined with its largely wind-based generation portfolio in these regions. The assets that are operational or close-to-operational include 343MW of solar power generation assets - marking GEH's entry into India's solar market. About 249MW of this solar power capacity started operations in FY16 and another 52MW (48MW wind and 4MW solar) started over May-July 2016. GEH expects the balance 90MW of solar power plants to start operations over October-November 2016. Most of these projects benefit from power purchase agreements with 20-25 year terms and tariffs ranging from INR5.10/kWh to INR7.01/kWh for the solar projects, which Fitch views as attractive, relative to tariffs for projects that have been offered recently in India. GEH may eventually allocate the acquired assets to its two restricted groups that were created to raise US dollar debt in the capital markets - Greenko Dutch BV (USD550m 8% senior notes due 2019 rated 'B+'; capacity of 623MW) and Greenko Investment Company (USD500m 4.875% senior notes due 2023 rated 'B+'; capacity of 403MW). However, this will be subject to terms and conditions in the bond indentures, including debt to EBITDA incurrence tests. GEH may be able to reduce the interest costs of the debt assumed via a future refinancing exercise. Nevertheless, Fitch expects the newly acquired assets to be able to service their debt obligations with their own cash generation, so they will not put pressure on the GEH group's liquidity. Fitch expects GEH's financial performance to benefit from improved operating conditions as the effect of El Nino on wind patterns and monsoon subsides, the full-year contribution from existing assets and from commencement of operations of assets currently under construction. The new 390MW generation portfolio is forecast to generate a steady state EBITDA of about USD75m a year from FY18 (FY17: USD37m), according to the management, placing the debt/EBITDA of the transaction slightly under 5x. Fitch expects GEH's consolidated financial leverage, as measured by debt to EBITDA, to remain around 5x in the medium term. Fitch said, "We expect GEH to take a conservative approach in relation to the development of the 653MW of pipeline projects, only pursuing projects that are economically sound. Fitch had included in its assumptions about 900MW of capacity additions by GEH through FY22; the acquired pipeline can support part of this growth target, in our view. We also believe GEH will seek to raise funds via equity issues if it seeks a higher growth target after this transaction." HOTEL JAYAPUSHPAM: Ind-Ra Affirms IND BB Long-Term Issuer Rating ---------------------------------------------------------------- India Ratings and Research (Ind-Ra) has affirmed Hotel Jayapushpam Private Limited's (Hotel JP) Long-Term Issuer Rating at 'IND BB'. The Outlook is Stable. The agency has also affirmed Hotel JP's INR84.6 million (reduced from INR120.9 million) long- term loan at 'IND BB' with a Stable Outlook. Ind-Ra suspended Hotel JP's ratings on July 25, 2016. KEY RATING DRIVERS The affirmation reflects Hotel JP's marginal growth in revenue while maintaining the credit metrics at similar levels. In FY16 the company's revenue was INR160 million (FY15: INR150 million; FY14: INR146 million). Interest coverage (operating EBITDA/gross interest expense) was 3.0x in FY16 (FY15: 2.3x, FY14:2.5x) and net financial leverage (total Ind-Ra adjusted net debt/operating EBITDAR) was 3.6x (3.3x, 2.5x). Hotel JP's ratings are constrained by continued deterioration in its EBITDA margin over FY14-FY16 (FY16:22%, FY15:23% and FY14:33%) due to increase in the administrative and maintenance cost. The management expects the credit metrics to improve further on scheduled repayment of term loan. Net leverage is expected to reach less than 2.5x by end of FY17 with improved profitability on reduction in wastage of food (reduced items on the menu size to avoid wastage). The ratings continue to be constrained by the company's small size and its single-property dependent operations. RATING SENSITIVITIES Positive: A significant increase in revenue and profitability leading to sustained improvement in the credit metrics could be positive for the ratings. Negative: A significant decline in revenue and profitability leading to sustained deterioration in the credit metrics could be negative for the ratings. COMPANY PROFILE Hotel JP, founded by J.Ashok, is a three-star hotel with 94 rooms in Chennai. As of March 2016, 90 of its rooms were operational. The hotel has a restaurant, a lounge bar, two pubs, a roof top restaurant and seven banquets halls. ITALVA WOODS: CRISIL Assigns 'B' Rating to INR122.5MM Term Loan --------------------------------------------------------------- CRISIL has assigned its 'CRISIL B/Stable/CRISIL A4' rating to the bank facilities of Italva Woods Industries. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Proposed Working Capital Facility 30 CRISIL B/Stable Proposed Bank Guarantee 5 CRISIL A4 Proposed Term Loan 122.5 CRISIL B/Stable The rating reflects the risks associated with the implementation of the project, subsequent ramp up and stabilisation of operations. The rating also factors in Italva's presence in the intensely competitive particle board segment, and its high reliance on debt. These weaknesses are partially offset by the extensive experience of the partners and their funding support. Outlook: Stable CRISIL believes Italva will benefit over the medium term from the extensive experience and funding support of its partners. The outlook may be revised to 'Positive' in case of timely project completion and higher-than-expected accrual. The outlook may be revised to 'Negative' if any time or cost overrun, or low accrual weaken the financial risk profile. Italva Woods Industries (Italva) is a partnership concern established as M/s Italva Wood Industries on April 24, 2016 and reconstituted on April 27, 2016. Mr. Sharang D Patel, Mr. Kirtikumar J Ughreja, Mrs Kanchanben A Ughreja, Mr. Amrutlal H Menpara, Mrs Hansaben A Menpara, Mr. Jaydeepbhai L Moradiya, Mr. Khimjibhai G Sadatiya, Mr. Jayantilal M Ughreja, Mrs Manekben J Ughreja and Mr. Sanjaykumar C Patel are the partners. The firm is setting up a wood particle board manufacturing unit with a capacity 562,500 particle boards of 8'x6' size & 17 mm thickness at Maliya, dist: Morbi. Gujarat. JALARAM FLEXO: CRISIL Suspends 'D' Rating on INR60.3MM Term Loan ---------------------------------------------------------------- CRISIL has suspended its rating on the bank facilities of Jalaram Flexo Laminates Private Limited. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 60 CRISIL D Proposed Long Term Bank Loan Facility 24.7 CRISIL D Term Loan 60.3 CRISIL D The suspension of ratings is on account of non-cooperation by JFL with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, JFL is yet to provide adequate information to enable CRISIL to assess JFL's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL views information availability risk as a key factor in its assessment of credit risk. JFL was incorporated in 1992 by Mr. Vasant Kumar Khakkhar and his wife, Mrs. Renuka Khakkhar. The company manufactures plastic and paper flexible packaging for a wide range of industries. Its manufacturing facilities are in Nagpur (Maharashtra). JASAMRAT COTGIN: CRISIL Assigns 'B' Rating to INR70MM Cash Loan --------------------------------------------------------------- CRISIL has assigned its 'CRISIL B/Stable' rating to the long-term bank facilities of Jasamrat Cotgin Private Limited (JCPL). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 70 CRISIL B/Stable Term Loan 34.5 CRISIL B/Stable The rating reflects the company's exposure to risks related to implementation of its project and stabilisation of its operations, and to intense competition in the cotton ginning industry. These weaknesses are partially offset by its promoters' extensive experience in the cotton industry. Outlook: Stable CRISIL believes JCPL will benefit over the medium term from the extensive industry experience of its promoters. The outlook may be revised to 'Positive' in case of successful commissioning of the company's project, and strong revenue and profitability. The outlook may be revised to 'Negative' in case of lower-than- expected revenue or profitability. JCPL was set up in June 2016 by Mr. Jaideep Singh Rajpal and his brother, Mr. Paramjeet Singh Rajpal. It is setting up a cotton ginning and oil extraction unit in Sendhwa, Madhya Pradesh, and will commence operations in December 2016. Its unit will have capacity to process 30,000 cotton bales per year. JAYCO SYNTHETICS: ICRA Ups Rating on INR6.25cr Cash Loan to B ------------------------------------------------------------- ICRA has upgraded the long-term rating to [ICRA]B from [ICRA]B- and has re-affirmed the short-term rating at [ICRA]A4 for the INR13.70 crore (enhanced from INR8.89 crore) line of credit of Jayco Synthetics. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Bank of Baroda- Term Loan I 3.64 [ICRA]B upgraded from ICRA]B- Bank of Baroda- Term Loan II 3.81 [ICRA]B upgraded from ICRA]B- Bank of Baroda- Cash Credit 6.25 [ICRA]B upgraded from ICRA]B- Non-Fund Based-One- time Letter of credit (4.82) [ICRA]A4 re-affirmed The long-term rating upgrade of JS takes into account the successful project commissioning, which has aided the transition of the firm from core trading/processing entity to a manufacturing unit and the consequent improvement in the operating scale witnessed in FY2016. The ratings continue to favourably factor in the experience of promoters/partners in the textile industry, while the presence of group companies in the same industry provides operational comfort. The ratings also take into account the easy accessibility to key raw materials along with proximity to downstream processing units from its presence in Surat, Gujarat. The ratings, however, are constrained by the leveraged capital structure due to debt funded capex and the modest net-worth base, which is vulnerable to capital withdrawal risks associated with the partnership constitution. Nevertheless, some comfort can be drawn from ~32% of the debt being constituted by unsecured loans from the promoters' family. The net profitability continues to remain weak and may remain under pressure due to depreciation and interest costs on account of implementation of the recent debt funded capital expenditure. Moreover, there are pricing pressures from an intensely competitive business environment and fragmented industry structure, characterised by unorganised players. ICRA also notes JS's exposure to adverse movements in yarn prices. Since prices of polyester yarn are directly linked to the prices of Monoethylene Glycol (MEG) and Pure Terepthalic Acid (PTA), which are crude oil derivatives, the firm's profitability is vulnerable to any adverse fluctuation in the same. Furthermore, the business operations are susceptible to cyclicality inherent in textile industry. The sanction of application of TUFS for interest and capital subsidy will be critical to lower the interest burden to an extent, and improve the net profits from current levels, going forward. On the back of stabilisation of capex undertaken, ICRA expects moderate revenue growth over the next three years from anticipated improvement in the capacity utilisation levels by employing the second leg of capex, which has been operational from FY2017. The stretched capital structure of the firm is projected to moderate to an extent over the next three years owing to the repayments pertaining to the term loans sought subject to an improving net-worth base. However, given the partnership constitution, risk of capital withdrawals is inherent. Established in June 2006 and promoted by the Sachdev family, Jayco Synthetics (JS or the firm) is a family managed partnership firm engaged in manufacturing art silk (artificial silk or rayon) greige cloth. JS was a core trading/processing company employing its group companies -- BK Tex, Hari Synth (currently defunct), Kiah Silk, Perint Industries and R.K. Text -- for processing job- works. Recently, in Q1 FY2016, to move up the value chain, the firm integrated backward by setting up its own manufacturing unit and forayed into manufacturing (weaving). In addition to employing its own capacities, the firm continues to employ the capacities of its group companies for yarn processing, such as twisting, warping as well as weaving. Based out of the Sachin district of Surat, Gujarat, JS operates a manufacturing facility in the Gujarat Industrial Development Corporation (GIDC) area with an installed manufacturing capacity of 1,12,75,200 (1,04,97,600 own capacity and 7,77,600 acquired from Hari Synth) metres of greige cloth per annum. The key partners of JS are Mr. Bharatkumar Sachdev, Mrs. Kokilaben Bharatkumar Sachdev and Mr. Rahul Bharatkumar Sachdev, who collectively look after the business. Mr. Bharatkumar Sachdev has an experience of more than 40 years, while his son, Mr. Rahul Bharatkumar Sachdev, has an experience of over eight years in the textile industry. Recent results JS recorded a net profit of INR0.09 crore on an operating income of INR34.33 crore for the year ending March 31, 2016. JCL INFRA: Ind-Ra Withdraws 'IND B+' Long-Term Issuer Rating ------------------------------------------------------------ India Ratings and Research (Ind-Ra) has withdrawn JCL Infra Limited's 'IND B+(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 JCL. Ind-Ra suspended JCL's ratings on 02 March 2016. JCL's ratings: -- Long-Term Issuer Rating: 'IND B+(suspended)'; rating withdrawn -- INR65 million fund-based working capital limits: Long-term 'IND B+(suspended)'and Short-term 'IND A4(suspended)'; ratings withdrawn -- INR240 million non-fund-based bank guarantee: Short-term 'IND A4(suspended)'; ratings withdrawn K.C. EDIBLE: Ind-Ra Withdraws 'IND B+' Long-Term Issuer Rating -------------------------------------------------------------- India Ratings and Research (Ind-Ra) has withdrawn K.C. Edible Oils Pvt Ltd's (KCOP) 'IND B+(suspended)' Long-Term Issuer Rating. The ratings have been withdrawn due to lack of adequate information. Ind-Ra will no provide ratings or analytical coverage for KCOP. Ind-Ra suspended KCOP's ratings on 02 March 2016. KCOP's ratings: -- Long-Term Issuer Rating: 'IND B+(suspended)'; rating withdrawn -- INR90 million fund-based limits: 'IND B+(suspended)'/ 'IND A4(suspended)'; ratings withdrawn -- Proposed INR35 million fund-based limits: 'Provisional IND B+(suspended)'/'Provisional IND A4(suspended)'; ratings withdrawn K.C. ROLLER: Ind-Ra Withdraws 'IND B+' Long-Term Issuer Rating -------------------------------------------------------------- India Ratings and Research (Ind-Ra) has withdrawn K.C. Roller Flour Mills (P) Ltd's (KCRO) 'IND B+(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 KCRO. Ind-Ra suspended KCRO's ratings on 2 March 2016. KCRO's ratings: -- Long-Term Issuer Rating: 'IND B+(suspended)'; rating withdrawn -- INR90 million fund-based limits: 'IND B+(suspended)'/ 'IND A4(suspended)'; ratings withdrawn -- Proposed INR9 million fund-based limits: 'Provisional IND B+(suspended)'/'Provisional IND A4(suspended)'; ratings Withdrawn K.S.M. BASHIR: Ind-Ra Withdraws 'IND BB-' Long-Term Issuer Rating ----------------------------------------------------------------- India Ratings and Research (Ind-Ra) has withdrawn K.S.M. Bashir Mohammad & Sons' (KSM) 'IND BB-(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 KSM. Ind-Ra suspended KSM's ratings on 1 March 2016. KSM's ratings: -- Long-Term Issuer Rating: 'IND BB-(suspended)'; rating withdrawn -- INR77 million fund-based limits: 'IND BB-(suspended)'/'IND A4+(suspended)'; ratings withdrawn -- INR11 million term loan: 'IND BB-(suspended)'; rating withdrawn MANDALIA OVERSEAS: ICRA Lowers Rating on INR8cr ST Loan to D ------------------------------------------------------------ ICRA has revised the long-term rating from [ICRA]B to [ICRA]B for the INR1.05-crore fund-based bank facilities of Mandalia Overseas Corporation. ICRA has also revised the short-term rating from [ICRA]A4 to [ICRA]D for the INR8.00-crore fund-based facilities of the company. ICRA has also revised the [ICRA]B/[ICRA]A4 ratings to [ICRA]D, assigned to the unallocated amount of INR0.95 crore. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Fund 1.05 [ICRA]D; downgraded Based-Overdraft from [ICRA]B facility Short-term Fund (4.00) [ICRA]D; downgraded Based-Packing Credit from [ICRA]A4 Short-term Fund 8.00 [ICRA]D; downgraded Based-FBP/UFBP from [ICRA]A4 Unallocated amount 0.95 [ICRA]D; downgraded from [ICRA]B/[ICRA]A4 The downward revision of ratings primarily incorporates the recent delays in debt servicing, reflecting highly stressed liquidity position due to delays in realising receivables. The ratings also factor in the small scale of operations amid a highly fragmented industry structure, thereby increasing vulnerability to demand fluctuations. The company has a weak financial profile, reflected by thin profitability, high working capital intensity and highly leveraged capital structure, coupled with weak coverage indicators. ICRA also takes note of the vulnerability of earnings to any change in regulatory policies in India and importing countries and exposure to price fluctuation and foreign exchange fluctuation risks. Established in 1971 as a partnership firm, Mandalia Overseas Corporation is engaged in exports various agro products as well as packed foods. The firm has its registered office located at Masjid, Mumbai and has two rented warehouses in Navi Mumbai. The firm is registered with various government organisations like National Agricultural Cooperative Marketing Federation (NAFED), Agricultural and Processed Food Products Export Development Authority (APEDA) and is also a export house recognised by the Government of India. MARUTI COTTON: CRISIL Suspends 'B' Rating on INR50MM Cash Loan -------------------------------------------------------------- CRISIL has suspended its rating on the bank facilities of Maruti Cotton Ind - Kadi. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 50 CRISIL B/Stable Long Term Loan 19.5 CRISIL B/Stable The suspension of ratings is on account of non-cooperation by MCI with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, MCI is yet to provide adequate information to enable CRISIL to assess MCI's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL views information availability risk as a key factor in its assessment of credit risk. Incorporated in 2013, MCI is promoted by Kadi (Gujarat)-based Bhavsar and Prajapati family. The firm is engaged in cotton ginning and pressing. Commercial operations for the firm have started from the year 2014-15. NEAT WIND: CRISIL Suspends B+ Rating on INR36.1MM Term Loan ----------------------------------------------------------- CRISIL has suspended its ratings on the bank facilities of Neat Wind Industries. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 10 CRISIL A4 Cash Credit 20 CRISIL B+/Stable Proposed Long Term Bank Loan Facility 23.9 CRISIL B+/Stable Term Loan 36.1 CRISIL B+/Stable The suspension of ratings is on account of non-cooperation by NWI with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, NWI is yet to provide adequate information to enable CRISIL to assess NWI's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL views information availability risk as a key factor in its assessment of credit risk. NWI was established in 1996 by Mr. G M Balkrishna, Mrs. Sunita Bopardikar, and Mrs. Kanchan Mulay. The firm manufactures industrial ovens, electrical panels, furnaces, material handling equipment, and cable convey systems. It also processes sheet metal. The firm's manufacturing facilities are in Ahmednagar (Maharashtra). Its day-to-day operations are managed by Mr. Avinash Bopardikar (husband of Mrs. Sunita Bopardikar) and Mr. Suhas Mulay (husband of Mrs. Kanchan Mulay). NICE MARINE: CRISIL Assigns B+ Rating to INR50MM Cash Loan ---------------------------------------------------------- CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to the bank facilities of Nice Marine Exports (India) Private Limited. The ratings reflect the firm's modest scale of operations and low operating margins. These rating weaknesses are partially offset by the extensive experience of the promoters in the fish industry. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Packing Credit 30 CRISIL A4 Bill Discounting 20 CRISIL B+/Stable Cash Credit 50 CRISIL B+/Stable Outlook: Stable CRISIL believes NMEPL will continue to benefit over the medium term from the extensive experience of its promoters. The outlook may be revised to 'Positive' if higher-than-expected revenue and profitability leads to improvement in cash accruals. The outlook may be revised to 'Negative' if low cash accrual due to fall in revenue, or stretch in working capital cycle weakens liquidity. Incorporated in April 2012, NMEPL is based in Hyderabad, and trades in shrimp and other fishes. OLIVE TEX: Ind-Ra Affirms 'IND BB' Long-Term Issuer Rating ---------------------------------------------------------- India Ratings and Research (Ind-Ra) has affirmed Olive Tex Silk Mills Private Limited's Long-Term Issuer Rating at 'IND BB'. The Outlook is Stable. KEY RATING DRIVERS The affirmation reflects OTSMPL's continued moderate scale of operations and moderate credit metrics. Provisional FY16 financials indicate a slight year-on-year revenue growth to INR1,381 million (FY15: INR1,307 million). Its Net leverage (total adjusted net debt/operating EBITDAR) was 4.9x at FYE16 (FYE15: 4.4x) and interest coverage (operating EBITDA/gross interest expense) was 1.9x (2.0x). The company is likely to report revenue of around INR610 million in 1HFY17. The ratings also factor in the fall in OTSMPL's EBITDA margins to 6.9% in FY16 (FY15: 8%) on account of fluctuation in raw materials prices. The company's liquidity has remained tight, with 93.7% average utilisation of its fund-based facilities over the 12 months ended August 2016. OTSMPL is a commodity-based (polyester and cotton) manufacturing business and is exposed to raw material price volatility, which is the primary rating constraint. However, the ratings are supported by the company's promoters' operating experience of more than a decade in the garment manufacturing industry. RATING SENSITIVITIES Positive: Substantial growth in revenue and profitability, resulting in improved credit metrics, could result in a positive rating action. Negative: A decline in profitability, resulting in deterioration in credit metrics, could result in a negative rating action. COMPANY PROFILE Incorporated in 2007, Mumbai-based OTSMPL is engaged in the manufacture of garments. The company has two manufacturing units at Vapi (Daman and Diu district) and two parcels of land at Tarapur (Mumbai) for fabric weaving. OTSMPL's ratings: -- Long-Term Issuer Rating: affirmed at 'IND BB'; Outlook Stable -- INR12.8 million (reduced from INR27.5m) long-term loans: affirmed at 'IND BB'/Stable -- INR343.4 million fund based facilities (increased from INR270 million): affirmed at 'IND BB'/Stable/'IND A4+' -- INR22.5 million non-fund-based facilities: affirmed at 'IND A4+' PNR INFRA: CRISIL Assigns B+ Rating to INR100MM LT Loan ------------------------------------------------------- CRISIL has assigned its 'CRISIL B+/Stable' rating to the long- term bank facility of PNR Infra India Private Limited (PNR). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Long Term Loan 100 CRISIL B+/Stable The ratings reflect PNR's modest scale of operations and exposure to intense competition in the real estate segment. The rating weaknesses are partially offset by the moderate bookings and cash flows from its ongoing projects, and the extensive experience of its promoter in the real estate segment. Outlook: Stable CRISIL believes PNR will benefit from its promoters' extensive industry experience over the medium term. The outlook may be revised to 'Positive' if PNR undertakes projects of larger size, generates larger cash flows, aided by sooner-than-expected completion of its ongoing projects, improving the company's business and financial risk profile. Conversely, the outlook may be revised to 'Negative' in case of time and cost overruns in its projects, or lower-than-expected bookings resulting in deterioration of financial risk profile. PNR, was initially incorporated in the name of Nagarjuna Homes Pvt. Ltd. in 1993 and subsequently changed its name to PNR Infra India Private Limited in 2006. The company is promoted by Mr.P.Naga Raju and is based in Hyderabad. PREMIER METCAST: Ind-Ra Withdraws IND BB Long-Term Issuer Rating ---------------------------------------------------------------- India Ratings and Research (Ind-Ra) has withdrawn Premier Metcast Private Limited's (PMPL) 'IND BB(suspended)' Long-Term Issuer Rating. The ratings have been withdrawn due to lack of adequate information. Ind-Ra will no provide ratings or analytical coverage for PMPL. Ind-Ra suspended PMPL's ratings on 02 March 2016. PMPL's ratings: -- Long-Term Issuer Rating: 'IND BB(suspended)'; rating withdrawn -- INR110 million fund-based limits: 'IND BB(suspended)'/'IND A4+(suspended)'; ratings withdrawn -- INR15 million non-fund-based limits: 'IND A4+(suspended)'; ratings withdrawn -- Proposed INR65 million fund-based limits: 'Provisional IND BB(suspended)'/'Provisional IND A4+(suspended)'; ratings withdrawn -- Proposed INR10 million non-fund-based limits: 'Provisional IND A4+(suspended)'; ratings withdrawn RATAN SEEDS: Ind-Ra Withdraws 'IND B' Long-Term Issuer Rating ------------------------------------------------------------- India Ratings and Research (Ind-Ra) has withdrawn Ratan Seeds Private Limited's 'IND B(suspended)' Long-Term Issuer Rating. The agency has also withdrawn the 'IND B(suspended)'/'IND A4(suspended)' ratings on the company's INR50m fund-based working capital limits. The ratings have been withdrawn due to lack of adequate information. Ind-Ra will no provide ratings or analytical coverage for RASPL. Ind-Ra suspended RASPL's ratings on March 4, 2016. RELIANCE INDUSTRIAL: ICRA Reaffirms B- Rating on INR4.7cr Loan -------------------------------------------------------------- ICRA has reaffirmed the long-term rating of [ICRA]B- assigned to the INR4.70 crore e-DFS (reduced from INR8.50 crore earlier) and INR1.50 crore cash credit facilities (reduced from INR2.00 crore earlier) of Reliance Industrial Consortium Limited. ICRA has also assigned a long-term rating of [ICRA]B- to the INR4.30 crore unallocated limits of RICL. Amount Facilities (INR crore) Ratings ---------- ----------- ------- e- DFS 4.70 [ICRA]B-/Reaffirmed Cash Credit 1.50 [ICRA]B-/Reaffirmed Unallocated Limits 4.30 [ICRA]B-/Assigned The reaffirmation of the rating takes into account the relatively small scale of RICL's operations and inherently low margins of the company on account of industry dynamics and commission structure decided by the principal. Its weak financial profile is reflected by an aggressive capital structure and subdued level of coverage indicators. The rating also considers RICL's exposure to the cyclical nature of the Indian passenger vehicle industry and the competition faced from other automobile (passenger car segment) dealers in the region. RICL faces high geographical concentration risk as its presence is limited to the state of West Bengal. The liquidity position of the company has remained stretched in view of high utilization of working capital limits. The rating, however, derives comfort from the extensive experience of the promoters in the automobile dealership business and RICL's established market position as the company is one of the two authorised dealers of Tata Motors Limited (TML) in Siliguri and Behrampore and sole dealer in Malda, West Bengal. Besides, the company has a diversified revenue stream through the sale of new vehicles and spare parts/ accessories and service income. In ICRA's opinion, the ability of the company to improve its capital structure and profitability besides managing its working capital requirement efficiently would remain key rating sensitivities, going forward. Incorporated in 1985, Reliance Industrial Consortium Limited is an authorised dealer of Tata Motors Limited. The company sells and services vehicles along with spare parts and accessories. RICL has three 3-S facilities (sales-services-spares), located in Malda, Siliguri and Behrampore in West Bengal. The company is promoted by the Kolkata-based Himatsingka family. Recent Results During FY2016 (provisional), RICL reported a net profit of INR0.12 crore on an operating income (OI) of INR25.38 crore, as against a net profit of INR0.11 crore and OI of INR23.50 crore during FY2015. SAHAYOG CLEAN: CRISIL Suspends 'B' Rating on INR65MM Term Loan -------------------------------------------------------------- CRISIL has suspended its rating on the bank facility of Sahayog Clean Milk Private Limited. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Rupee Term Loan 65 CRISIL B/Stable The suspension of ratings is on account of non-cooperation by SCMPL with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, SCMPL is yet to provide adequate information to enable CRISIL to assess SCMPL's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL views information availability risk as a key factor in its assessment of credit risk. Established in 2009 under the name of Induja Energy Pvt Ltd by the Patidar family, it was renamed as Harvest Green Fuels Pvt Ltd in 2011. In 2013, the company was again renamed as SCMPL. SCMPL commenced operations in September 2013 and is engaged in processing of milk. Its operations are managed by Mr. Anand Patidar. SAI KRUPA: CRISIL Suspends B+ Rating on INR170MM Cash Loan ---------------------------------------------------------- CRISIL has suspended its ratings on the bank facilities of Sai Krupa Construction. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 150 CRISIL A4 Cash Credit 170 CRISIL B+/Stable Proposed Long Term Bank Loan Facility 19 CRISIL B+/Stable Term Loan 11 CRISIL B+/Stable The suspension of ratings is on account of non-cooperation by SKC with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, SKC is yet to provide adequate information to enable CRISIL to assess SKC's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL views information availability risk as a key factor in its assessment of credit risk. Set up in 1996 as a proprietary concern, Sai undertakes infrastructure projects as a government-approved civil contractor. It specialises in sewage lines, drainage systems, canals, and pipe lines. Based in Vadodara (Gujarat), it is empanelled as a Class AA government contractor and is owned and managed by Mr. Jawahar Parekh. SAMANVAYA HEALTH: CRISIL Assigns B+ Rating to INR32MM LT Loan ------------------------------------------------------------- CRISIL has assigned its 'CRISIL B+/Stable' rating to the long- term bank facilities of Samanvaya Health Care Private Limited (SHCPL). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 13 CRISIL B+/Stable Long Term Loan 32 CRISIL B+/Stable The rating reflects the company's modest scale of operations, the geographic concentration in its revenue, and moderate financial risk profile. These weaknesses are partially offset by its promoters' extensive experience in the healthcare industry. Outlook: Stable CRISIL believes SHCPL will benefit from its promoters' extensive industry experience. The outlook may be revised to 'Positive' if the company scales up operations significantly while maintaining profitability, resulting in substantial cash accrual. The outlook may be revised to 'Negative' in case of a decline in cash accrual, or large, debt-funded capital expenditure, weakening the financial risk profile. SHCPL was incorporated by Dr Prakash Dharana and Dr Vijay Neelgund in 2013. It manages a 100-bed multi-specialty hospital in Gadag, Karnataka, named Mahatma Gandhi Multispecialty Hospital and Research Centre. On a provisional basis, SHCPL's profit after tax (PAT) was INR11.4 million on revenue of INR65.0 million for fiscal 2016, against a PAT of INR4.2 million on revenue of INR57.8 million for fiscal 2015. SARASWATI GUM: CRISIL Assigns B+ Rating to INR60MM Cash Loan ------------------------------------------------------------ CRISIL has revoked the suspension of its ratings on the bank facilities of Saraswati Gum and Chemicals and has assigned its 'CRISIL B+/Stable' rating to the long-term bank facilities of Saraswati Gum & Chemicals. CRISIL had suspended the ratings on August 22, 2016, as SGC had not provided information required for a rating review. The company has now shared the requisite information, enabling CRISIL to assign ratings to the bank facilities. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 60 CRISIL B+/Stable (Assigned; Suspension Revoked) Proposed Long Term 40 CRISIL B+/Stable (Assigned; Bank Loan Facility Suspension Revoked) The rating reflects SGC's thin profitability, susceptibility of profitability to sharp fluctuations in raw material prices and to regulatory changes. These rating weaknesses are partially offset by moderate financial risk profile, and extensive experience of SGC's promoters in the guar gum industry. Outlook: Stable CRISIL believes SGC will continue to benefit from the extensive experience of its promoters. The outlook may be revised to 'Positive' in case of improvement in the scale of operations and operating profitability while the capital structure is maintained. The outlook may be revised to 'Negative' if there is significant deterioration in the financial risk profile due to large, debt-funded working capital requirement or pressure on profitability or revenue. SGC, established in 1998, is a partnership firm based in Bhiwani (Haryana). The firm is managed by Mr. Gobind Ram Bansal and his family. The firm manufactures refined guar gum splits, guar korma, and guar churi. The manufacturing unit is located at Bhiwani (Haryana). SGC reported a profit after tax (PAT) of INR0.1 million on net sales of INR0.43 billion for fiscal 2016, against a PAT of INR0.5 million on net sales of INR0.97 billion for fiscal 2015. SDU BEVERAGES: Ind-Ra Assigns 'IND D' Long-Term Issuer Rating ------------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned SDU Beverages Private Limited a Long-Term Issuer Rating of 'IND D'. The agency has also assigned SDU's INR210 million long-term loans a long- term 'IND D' rating. KEY RATING DRIVERS The ratings reflect delays by SDU in the repayment of interest on the term loan over the 12 months ended August 2016. The delays were due to tight liquidity position of the company. RATING SENSITIVITIES Positive: Timely payment of interest consecutively for three months could result in a positive rating action. COMPANY PROFILE SDU manufactures packaged fruit juices of four flavours - mango, apple, orange and mixed fruit. SHIV SHAKTI: ICRA Assigns 'B+' Rating to INR20cr Cash Loan ---------------------------------------------------------- ICRA has assigned a rating of [ICRA]B+ to the INR20.00 crore cash credit and INR3.75 crore term loan facility of Shiv Shakti Industries. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Cash Credit 20.00 [ICRA]B+; assigned Term Loan 3.75 [ICRA]B+; assigned However, the ratings are constrained by the company's susceptibility towards price fluctuation risk, witnessed in the recent past as cotton prices were highly volatile and SSI could not fully pass on the increased price burden to customers due to intense competition and fragmented nature of the industry. ICRA also notes the vulnerability of the company's growth towards cyclicality prevailing in the textile industry, which is likely to lead to fluctuations in demand. Moreover, as the company derives a significant part of its revenue through exports; it is also vulnerable to foreign exchange fluctuation risks despite it mitigating the risk through partial hedging. The ratings, however, favorably takes into account the location of the firm, giving it access to high quality raw cotton. The rating also considers the forward integration in crushing facilities providing diversification in terms of revenue. Established in 2013, Shiv Shakti Industries has set up a cotton ginning and pressing facility at Kadi in Gujarat. The plant is equipped with 24 ginning machines and a pressing machine with the manufacturing capacity of 250 bales per day. The firm is also equipped with 10 expellers with the capacity to produce 10,500 kg of cottonseed oil per day. Recent Results For the year ended March 31, 2015, Shiv Shakti Industries reported an operating income of INR35.79 crore and profit after tax of INR0.04 crore. SHRI GANGA: CRISIL Assigns B+ Rating to INR79.5MM Cash Loan ----------------------------------------------------------- CRISIL has assigned its 'CRISIL B+/Stable' rating to the long- term bank facility of Shri Ganga Vehicles Private Limited. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 79.5 CRISIL B+/Stable The rating reflects SGVPL's average scale of operations, coupled with weak financial risk profile, marked by large debt and low networth. These weaknesses are partially offset by the promoters' extensive experience, and the company's established position as a dealer for Hyundai Motor India Ltd (Hyundai, rated 'CRISIL A1+') and Suzuki Motorcycles Private Ltd (Suzuki's) motorcycles. Outlook: Stable CRISIL believes SGVPL will maintain a stable business risk profile backed by its promoters' extensive industry experience. The outlook may be revised to 'Positive' if substantial growth in revenue and profitability results in stronger credit metrics. Conversely, the outlook may be revised to 'Negative' if slowdown in revenue, or any large debt-funded capital expenditure, weakens financial risk profile. Incorporated in 1984, SGVPL is an authorised dealer for Suzuki's motorcycles (with one showroom) and the passenger cars of Hyundai (2 showrooms) in Sikar and Nangod District of Rajasthan. It is promoted by Mr. Sukhbir Singh (Sikar showroom) and Mr. Ratan Lal Burdak (Nangod showroom). SIDDHARTH DEVELOPERS: ICRA Suspends B+ Rating on INR28cr Loan ------------------------------------------------------------- ICRA has suspended the long term rating of [ICRA]B+ assigned to the INR28.00 crore bank limits of Siddharth Developers. The suspension follows ICRA's inability to carry out a rating surveillance in the absence of the requisite information from the company. Incorporated in 2006, Siddharth Developers (SD) is a Mumbai based developer currently undertaking the construction of a residential redevelopment project at Lower Parel, Mumbai. The project name is "Siddharth Enclave" and consists of 68 saleable units with a total saleable area of 47,760 sq. ft. Further, about 44,400 sqft of carpet area will be provided to the existing tenants. The promoters of SD have an established track record of executing residential projects in the past, mainly in the Thane region. Some of the projects completed by the promoters are Sita Complex, Sita-Smruti, Sita-Park, Sita-Swapna, Chandresh-Mahel, Chandresh- Tower, Palash Tower, River-Wood Park (Phase I), Chandresh-Chaya (1, 2), Kanchan-Jangha, Chandresh-Niketan, Chandresh-Mandir, Chandresh-Abhishek and Chandresh-Abhinandan. The same ensures adequate planning and execution capability of the partners in completing the present project as well. Apart from "Siddharth Enclave", the group is also executing other projects like River- Wood Park (Phase II), Siddharth Plaza, Siddharth Grandeur and Siddharth Green Acres in Mumbai. SONPAL EXPORTS: CRISIL Suspends B+ Rating on INR320MM Loan ---------------------------------------------------------- CRISIL has suspended its rating on the bank facilities of Sonpal Exports Private Limited (SEPL; part of the Sonpal group). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 40 CRISIL B+/Stable Export Packing Credit 320 CRISIL B+/Stable Proposed Long Term Bank Loan Facility 290 CRISIL B+/Stable Standby Line of Credit 20 CRISIL B+/Stable The suspension of ratings is on account of non-cooperation by SEPL with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, SEPL is yet to provide adequate information to enable CRISIL to assess SEPL's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL views information availability risk as a key factor in its assessment of credit risk. For arriving at the ratings, CRISIL has combined the business and financial risk profiles of Shiv Shankar Oil Industries Pvt Ltd (SSOIPL), SEPL, and Hanuman Industries (HI). This is because all these entities, together referred to as the Sonpal group, are engaged in similar lines of business and have a common promoter and fungible cash flows. SEPL, incorporated in 2004, hulls natural sesame seeds for the export market. HI was set up in 2003 as a proprietorship concern; it was reconstituted as a partnership firm in 2007. Apart from sorting, the firm trades in sesame seeds and other agricultural products in the export market. SSOIPL was incorporated in 2011 and is in the same line of business. The group is promoted by Mr. Manojkumar Sonpal. SREE MANJUNATHA: ICRA Suspends 'B' Rating on INR6cr Loan -------------------------------------------------------- ICRA has suspended long-term rating of [ICRA]B to INR6.00 crore fund based facilities of Sree Manjunatha Cotton Mills. The suspension follows ICRA's inability to carry out a rating surveillance in the absence of the requisite information from the company. Sree Manjunatha Cotton Mills is a partnership firm that was formed in 2007; based in Adoni, Andhra Pradesh the firm is engaged in cotton ginning and trading. The firm purchases kappas from local market/farmers and processes them in its ginning unit by separating cotton seeds and waste from the cotton. The finished products are the cotton bales which are sold in the local markets of AP & Tamilnadu. The firm was promoted by Mr. B. Muddubasavan Gowd and his family; the partners of the firm have longstanding experience in the business through their other group entities SRI BALAGANAPATHY: ICRA Suspends B/A4 Rating on INR12.82cr Loan -------------------------------------------------------------- ICRA has suspended the long term rating of [ICRA]B and short term rating of [ICRA]A4 outstanding on the INR12.82 crore bank facilities of Sri Balaganapathy Spinning Mills. The suspension follows ICRA's inability to carry out a rating surveillance in the absence of the requisite information from the company. ST. JOHNS: CRISIL Assigns B+ Rating to INR70MM Cash Loan -------------------------------------------------------- CRISIL has assigned its 'CRISIL B+/Stable' rating to the long- term bank facility of St. Johns Cashew Company. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 70 CRISIL B+/Stable The rating reflects a small scale and working capital-intensive operations, and exposure to intense competition in the cashew industry. These strengths are partially offset by the extensive experience of promoter in the cashew industry. Outlook: Stable CRISIL believes SJCC will continue to benefit from the promoter's extensive experience. The outlook may be revised to 'Positive', if scaling up of revenue and profitability result in better-than- expected cash accrual. Conversely, the outlook may be revised to 'Negative' if lower-than-expected accrual or larger-than- expected, debt-funded capital expenditure or a stretch in working capital cycle weakens liquidity. Set up as a proprietorship firm in 2001, SJCC processes raw cashew nuts and sells cashew kernels. The firm, based in Kollam, Kerala, is promoted by Mr. Sajan P Y. SWAMI HITECH: CRISIL Reaffirms 'B' Rating on INR80MM Cash Loan -------------------------------------------------------------- CRISIL's rating on the long-term bank facility of Swami Hitech Projects Limited continues to reflect SHTPL's continuous losses in the past, low operating profitability owing to trading nature of business, weak financial risk profile marked by below-average debt protection metrics and high gearing, and constrained liquidity owing to high dependence on external funding to meet working capital requirements. These rating weaknesses are partially offset by SHTPL's established relationships with its customers and suppliers. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 80 CRISIL B/Stable Outlook: Stable CRISIL believes that SHTPL will continue to benefit over the medium term from its established relationships with customers and suppliers. The outlook may be revised to 'Positive' if significant improvement in profitability and capital structure strengthens financial risk profile. Conversely, the outlook may be revised to 'Negative' in case of deterioration in profitability, capital structure, or debt protection metrics. Incorporated in 1997 as Swami Infratrade Ltd, SHTPL got its present name in 2008. It is a closely held public limited company, trading in building materials such as thermo- mechanically treated (TMT) bars and other steel products, and cement. Small proportion revenue also comes from civil construction. Currently, operations are managed by Mr. Anil Mittal. The company began operations by trading in shares, which it continued till fiscal 2008. In fiscal 2011, it discontinued securities trading and commenced trading in building material. TATA STEEL: Fitch Keeps 'BB' LT IDR on Rating Watch Evolving ------------------------------------------------------------ Fitch Ratings has maintained the Rating Watch Evolving on the 'BB' Long-Term Issuer Default Rating (IDR) of Tata Steel Limited (TSL) and 'B' Long-Term IDR of Tata Steel UK Holdings Limited (TSUKH). The steel producers' ratings were placed on Rating Watch Evolving on 1 April 2016 after TSL's announced on 29 March 2016 that it is exploring options for portfolio restructuring in Europe, including the potential divestment of its UK operations. TSL managed to sell a key loss-making asset in May 2016, but the final structure of the group and its debt remains unclear and will affect TSL's ratings. KEY RATING DRIVERS Uncertainty for European Operations: TSL announced the completion of the sale of its unprofitable Long Products Europe business centred in Scunthorpe, UK, on 31 May 2016. However, uncertainty remains around the company's plans to restructure its remaining key assets in Port Talbot, UK, and IJmuiden, Netherlands, with issues, including UK pension liabilities, remaining unresolved. TSL is in discussions with strategic players, including thyssenkrupp AG (BB+/Stable), to explore the feasibility of a joint venture for its remaining European business. Fitch said, "We assume the status quo remains, and hence, a further restructuring of assets presents a risk to our estimates." Indian Operations Remain Under Pressure: The profitability of TSL's Indian operations declined by around 35% yoy to INR7,560 per tonne (t) in the financial year ending-March 2016 (FY16), due to weak steel prices and competition from imports. TSL's 1QFY17 EBITDA/t remains significantly less than the FY15 average, although profitability has improved following an upswing in realisations after the government imposed protectionist minimum import prices in February 2016. Domestic demand growth has been anaemic so far in FY17, with consumption over April to August 2016 increasing at just 1.3% (FY16: 5.9%). Meanwhile, producers, including TSL, are looking to increase sales volume following recent capacity expansion. TSL's profitability could also come under pressure from the sharp increase in international coking coal prices since August 2016. There is also uncertainty on how long regulatory protection from imports will be sustained. The government lowered the number of products under MIP from 173 to 66 in August 2016 and extended the duration until 4 October 2016. Anti-dumping duties have been imposed on the remaining products; however, the duration is six months. High Leverage: TSL's FFO-adjusted net leverage jumped to 10.9x in FY16, from 6.2x in FY15, due to poor profitability. Fitch said, "We estimate leverage will decline over FY17-FY18, but remain relatively high at above 5x. Our forecast factors in improved realisations and better profitability at TSL's overseas operations post-sale of its Long Products Europe business. However, a decline in steel prices and a large rise in input costs are risks to our estimates." Greenfield Plant Starts Operations: TSL has started commercial operations for the first phase of its greenfield plant at Kalinganagar in Odisha, India, with a capacity of 3 million tonnes per annum (mtpa). TSL expects to ramp up output gradually and is targeting volume of 1 mtpa in FY17. Apart from higher sales, the new plant will improve TSL's product-mix, as it specialises in producing high-grade flat products. It is also one of India's leanest steel plants. Capex is likely to moderate from FY17 with the plant's commencement. TSL Support for TSUKH: TSUKH has high debt and modest profitability, leading to a weak standalone credit profile. The business also faces weak local demand and high costs. However, TSUKH benefits from strategic ties with its parent, TSL. This provides its IDR with a two-notch uplift in line with Fitch's Parent and Subsidiary Linkage methodology. Tata Group Support for TSL: TSL's ratings benefit from a one- notch uplift due to potential support from the Tata Group based on TSL's strategic importance to the group. KEY ASSUMPTIONS Fitch's key assumptions within our rating case for the issuer include: -- Sales volume to decline 10% in FY17 due to lower steel production in the UK. Thereafter, volume to grow by around 6% annually as a result of higher production in India. -- Average sales realisation to improve 5% in FY17 and by 3% each year thereafter. -- Consolidated operating EBITDA margin to improve to 10% in FY17 then to 14% in FY18 (FY16: 6%). -- Average annual capex of around INR70bn from FY17. RATING SENSITIVITIES TSL The Rating Watch Evolving will be resolved following a review of TSL's credit profile once Fitch has more clarity around the portfolio restructuring exercise in Europe. An upgrade is probable if the proceeds of potential asset sales are used to repay debt, reducing leverage. However, if leverage increases due to significant closure costs for the UK operations, Fitch will downgrade the rating. TSUKH The Rating Watch Evolving will be resolved following a review of TSUKH's credit profile as well as the linkages between TSUKH and TSL once Fitch has more clarity around the portfolio restructuring exercise in Europe. An upgrade is probable if Fitch concludes that linkage is enhanced or if TSUKH's standalone profile improves. A downgrade is probable if Fitch deems that linkage has weakened. FULL LIST OF RATING ACTIONS Fitch has maintained the Rating Watch Evolving for the following ratings: TSL -- Long-Term Foreign-Currency IDR is 'BB' -- Senior unsecured rating is 'BB' -- USD500 million 4.85% senior unsecured guaranteed notes due 2020 and USD1 billion 5.95% senior -- unsecured guaranteed notes due 2024 issued by ABJA Investments Co Pte Ltd, a wholly owned subsidiary of TSL, is 'BB' TSUKH: -- Long-Term Foreign-Currency IDR is 'B' TIGER CAMP: Ind-Ra Withdraws 'IND B+' Long-Term Issuer Rating ------------------------------------------------------------- India Ratings and Research (Ind-Ra) has withdrawn The Tiger Camp's 'IND B+(suspended)' Long-Term Issuer Rating. The ratings have been withdrawn due to lack of adequate information. Ind-Ra will no provide ratings or analytical coverage for The Tiger Camp. Ind-Ra suspended The Tiger Camp's ratings on 02 March 2016. The Tiger Camp's ratings: -- Long-Term Issuer Rating: 'IND B+(suspended)'; rating withdrawn -- INR2.50 million fund-based limits: 'IND B+(suspended)'/ 'IND A4(suspended)'; ratings withdrawn -- INR67.5 million term loans: 'IND B+(suspended)'; rating withdrawn TOUCH TONE: Ind-Ra Hikes Long-Term Issuer Rating to 'IND BB-' ------------------------------------------------------------- India Ratings and Research (Ind-Ra) has upgraded Touch Tone Teleservices' (TTS) Long-Term Issuer Rating to 'IND BB-' from 'IND B+'. The Outlook is Stable. KEY RATING DRIVERS The upgrade reflects TTS' improved profitability and moderate credit metrics. According to FY16 provisional financials the company's revenue was INR290 million (FY15: INR280 million). TTS has a current order book of INR335.3m (1.15x of FY16 provisional revenue) as on 31 August 2016. Net leverage (total adjusted net debt/operating EBITDAR ) in FY16 was 2.6x (FY15:2.6x) and interest coverage (operating EBITDA/Gross interest expense) was 3.3x (2.3x). The firm's credit metrics improved due to improvement in profitability. EBITDA margins improved to 12.2% in FY16 (FY15: 10%) on account of improved orders. The ratings derive support from the founder's experience of more than a decade in the telecom business. The ratings benefit from TTS' strong customer profile with Power Grid Corporation of India Limited and Bharat Sanchar Nigam Limited contributing more than 75% to its FY16 revenue (INR290m). The ratings, however, factor in the firm's tight liquidity position with the fund-based facilities being utilised at an average of 98% during the 12 months ended July 2016. RATING SENSITIVITIES Positive: Substantial growth in the top-line and profitability improvement leading to a sustained improvement in the credit metrics could be positive rating action Negative: A substantial decline in the top-line and profitability resulting in sustained deterioration in the credit metrics could lead to a negative rating action COMPANY PROFILE Set up in 2002, TTS is engaged in the laying and maintenance of telecommunication lines. TTS also undertakes civil construction work in relation to the telecom lines that it lays down. TTS's ratings: -- Long-Term Issuer Rating: upgraded to 'IND BB-/Stable -- INR60 million fund-based working capital facilities (increased from INR50 million): upgraded to 'IND BB- '/Stable from 'IND B+'/Stable -- INR60 million non-fund-based facilities: upgraded to 'IND A4+' from 'IND A4' V. R. GHUGE: CRISIL Assigns B+ Rating to INR100MM Overdraft Loan ---------------------------------------------------------------- CRISIL has assigned its 'CRISIL B+/Stable' ratings to bank facilities of V. R. Ghuge - Aurangabad. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Term Loan 9.5 CRISIL B+/Stable Overdraft Facility 100.0 CRISIL B+/Stable Proposed Long Term Bank Loan Facility 0.5 CRISIL B+/Stable The rating reflects the small scale of operations in the highly competitive civil construction industry and below-average financial risk profile, which is constrained by modest networth and average capital structure. These ratings weakness are partially offset by extensive experience of the proprietor and the moderate order book position. Outlook: Stable CRISIL believes that VRG will continue to benefit from extensive experience of the proprietor. The outlook may be revised to 'Positive' if substantial growth in scale of operations and stable profitability lead to higher-than-expected cash accrual. The outlook may be revised to 'Negative' in case of decline in revenue and cash accrual, or if weak profitability, stretch in the working capital cycle or large, debt-funded capex, weakens the financial risk profile, especially liquidity. VRG was established in 1979 as a proprietorship concern by Mr. VR Ghuge. The firm is registered as a Class I contractor and undertakes irrigation projects for the government of Maharashtra. These projects include construction of earthen dams, and irrigation sluices and canals. VEDANGA SOLAR: CRISIL Assigns B+ Rating to INR144.5MM LT Loan ------------------------------------------------------------- CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to the bank facility of Vedanga Solar Energy Private Limited (VSPL). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Foreign Exchange Forward 0.5 CRISIL A4 Long Term Loan 144.5 CRISIL B+/Stable The rating reflects VSPL's exposure to risks related to implementation and stabilization of its ongoing project, which involves setting up of 3 Mega Watts (MW) Solar power plant in Dhavangere District, Karnataka. These rating weakness are partially offset by its stable business risk profile, driven by its 25-year power purchase agreement (PPA) with its customers, and its low demand and technology risks. Outlook: Stable CRISIL believes that VSPL's credit risk profile will benefit from its power purchase agreement with Mangalore Electricity Supply Company Limited (MESCOM).The outlook may be revised to 'Positive' if the project is completed and stabilized in a timely fashion and within budgeted cost, leading to improvement in VSPL's business risk profile. Conversely, the outlook may be revised to 'Negative' if there are delays in execution of project or if there are lower-than-expected cash accruals leading to stretched liquidity position. VSPL, set up in 2015, will operate a 3 (MW) Solar power plant in Dhavangere District, Karnataka. VSPL is promoted by Datta Venkata Kiran Yeluri and Baladatta Kumar Yeluri. VIRTUE INDUSTRIES: CRISIL Assigns B+ Rating to INR44.5MM Loan ------------------------------------------------------------- CRISIL has assigned its 'CRISIL B+/Stable' rating to the long- term bank facilities of Virtue Industries. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 20 CRISIL B+/Stable Long Term Loan 44.5 CRISIL B+/Stable The rating reflects the firm's small scale of operations in the highly competitive and fragmented stone crushing industry, its exposure to risks related to its ongoing project, and its expected below-average financial risk profile in the initial phase of operations. These weaknesses are partially offset by its promoters' extensive industry experience and its established customer relationships. Outlook: Stable CRISIL believes VI will benefit over the medium term from the extensive industry experience of its promoters. The outlook may be revised to 'Positive' if the firm completes its project on time and ramps up operations earlier than expected. The outlook may be revised to 'Negative' in case of a cost or time overrun in the project, or slower-than-expected ramp-up in operations. VI, established in 2016 as a partnership firm, is setting up a stone crushing facility in Paritala near Vijayawada, Andhra Pradesh. It is likely to commence operations in January 2017. The firm is promoted by Mr. Sivarama Krishnan and his family. ================= I N D O N E S I A ================= GAJAH TUNGGAL: Moody's Puts B2 CFR on Review for Downgrade ---------------------------------------------------------- Moody's Investors Service has placed on review for downgrade the B2 corporate family rating of Gajah Tunggal Tbk (P.T.) and the B2 rating on its $500 million senior secured notes due 2018. RATING RATIONALE "The ratings review reflects the likelihood of a downgrade if the company fails to make substantial progress over the next three months in refinancing its $500 million senior secured notes coming due in February 2018," says Brian Grieser, a Moody's Vice President and Senior Analyst. GT is exploring various funding options to address this maturity, as well as to diversify its debt structure away from the single currency, bullet maturity profile of its existing notes. However, the company has yet to publicly announce a formal plan. GT had IDR758 million in cash on hand at June 30, and is projected to generate modest free cash flow in 2016 and 2017. As such, GT is entirely reliant on its ability to refinance its debt. The $500 million bond represents the majority of GT's capital structure. "We could maintain GT's rating at the current level if it is successful in raising funds that are earmarked for the refinancing of its 2018 notes, or if it can provide clear and achievable plans to raise the funds necessary to fully repay the notes by the end of 2016," says Grieser. Despite the increasing refinancing risk, GT's credit metrics have seen marked improvement in recent quarters on the back of strong revenue and margin performance. Debt/EBITDA improved to 3.3x for the 12 months ended June 2016 from 4.35x at December 2015, while EBIT-to-interest strengthened to 2.1x from 1.6x. "We expect underlying market conditions, particularly growth in US and Indonesian replacement tire demand, to support continued improvement in its credit metrics, such that debt/EBITDA will approach 3.0x in 2017," says Grieser. The ratings are unlikely to be upgraded or the outlook stabilized prior to the completion of its refinancing of the 2018 notes. The principal methodology used in these ratings was Global Automotive Supplier Industry published in June 2016. Indonesia-based Gajah Tunggal (GT) is Southeast Asia's largest integrated tire manufacturer with capacity to produce 55,000 tires/day of radial, 14,500 tires/day of bias, 95,000 tires/day of motorcycle tires and 600 tires/day of truck and bus radial tires (TBR). GT's key shareholders include Denham Pte Ltd (49.5%), a subsidiary of Chinese Tire Manufacturer Giti Tire (unrated) and Compagnie Financiere Michelin (10%, A3 stable). The remaining shares are publicly traded on the Indonesian Stock Exchange. KAWASAN INDUSTRI: Fitch Rates USD186MM Sr. Unsecured Notes 'B+' --------------------------------------------------------------- Fitch Ratings has assigned Indonesia-based PT Kawasan Industri Jababeka Tbk's (Jababeka, B+/A(idn)/Stable) USD186m 6.5% senior unsecured notes due in 2023 a final rating of 'B+' with a Recovery Rating of 'RR4'. The notes are issued by Jababeka's wholly owned subsidiary, Jababeka International B.V., and guaranteed by Jababeka and certain subsidiaries. The final rating follows the receipt of documents conforming to information already received and is in line with the expected rating assigned on 13 September 2016. The new 2023 notes will primarily be used to exchange Jababeka's existing USD260m 7.5% notes maturing in 2019 to extend the maturity profile of the company's debt and the new money from the exchange offer is intended for general corporate purposes. Jababeka sought consent of the 2019 note holders who participated in the exchange for the removal of substantially all the restrictive covenants, all reporting requirements and certain events of default in the residual 2019 notes. Fitch believes the exchange and removal of restrictive covenants will not affect surviving 2019 bondholders and the 2023 notes include all the restrictive covenants Jababeka sought to remove from the 2019 notes. The surviving 2019 bondholders will also continue to benefit from the cross-acceleration clause in the 2019 notes. Fitch deems Jababeka's financial profile as unchanged and consistent with its ratings, as the new notes allow more flexibility to cash flow management. The notes are rated at the same level as Jababeka's senior unsecured debt rating, as they represent the company's unconditional, unsecured and unsubordinated obligations. KEY RATING DRIVERS Weak Start; Presales Improving: Jababeka reported a slight 1% decline in its presales in 2015, to IDR1trn, due to weaker sales in its industrial segment. Demand remained weak in 1Q16, but improved significantly in 2Q16, with presales increasing by 88% yoy. Fitch expects the recovery to be sustained and forecasts Jababeka to book presales of IDR1.2trn in 2016 and IDR1.5trn in 2017. Solid Recurring Coverage: Jababeka's rating reflects strong recurring interest coverage from its 130 megawatt power plant (PP1), which is operated under a 20-year power purchase agreement with the state electricity company, PT Perusahaan Listrik Negara (Persero) (BBB-/Stable). This business provides earnings visibility and a natural hedge for Jababeka's US dollar- denominated borrowings, as it operates under a cost pass-through mechanism and revenues are pegged to US dollars. Fitch expects Jababeka's recurring interest cover to temporarily decline in 2016 because of leakage in PP1. The company says permanent repairs have been completed and all machinery is operating at the same capacity and efficiency as before the leakage. Fitch expects Jababeka's recurring interest cover to be 0.8x in 2016 and 1.3x in 2017. Flexible Capex: Jababeka's capex for the next few years will be limited to developing its infrastructure facilities and increasing the efficiency of PP1. This, coupled with the discretionary nature of land acquisitions, allows Jababeka to accumulate cash buffers and strengthen its liquidity profile. However, this could change markedly should the company decide to proceed with investment in a second power plant. Growing Residential, Commercial Property Segment: Jababeka's residential and commercial property business accounted for 55% of total marketing sales in 2015, compared with 14% in 2011. There is increasing demand in this segment and Fitch expects it to remain robust, due to the strategic location of the company's Cikarang estate in West Java and rising need for homes for the additional industrial workers in the area. Long-Term Diversification Benefits: Jababeka, together with Singapore's Sembcorp, is developing a new industrial complex in Kendal, Central Java, which is modelled after Cikarang. Relocating labour-intensive production out from Cikarang makes sense in the long-run due to the lower minimum wage in Central Java. Kendal will provide Jababeka with diversification benefits and traction for future growth upon successful execution. Project Concentration and Forex Risks: Jababeka's rating is primarily constrained by the high concentration of its business in Cikarang, which Fitch expects to account for 70%-80% of presales in the next two to three years. Fitch believes concentration risk will gradually decrease as contribution from the Kendal estate grows. Jababeka hedged USD200m out of its USD260m bonds at various upper strike prices as at June 2016, the highest of which is at IDR15,000 to USD1. Fitch said, "We believe risk is manageable, even though the company is still exposed to currency fluctuations, as there are no immediate liquidity concerns since the notes are due only in 2019 and its interest expenses are sufficiently covered by its recurring income stream." KEY ASSUMPTIONS Fitch's key assumptions within the rating case for Jababeka include: -- presales of IDR1.2trn in 2016 and IDR1.5trn in 2017 -- land acquisition capex of IDR400bn-500bn in 2016-2017 -- construction capex of IDR400bn-500bn in 2016-2017 RATING SENSITIVITIES Positive rating action is not expected due to the company's limited project scale and exposure to the highly cyclical industrial development business. Negative: Future developments that may, individually or collectively, lead to negative rating action include: -- recurring-EBITDA/interest-expense at less than 1x for the IDR, or less than 1.2x for the National Long-Term Rating, on a sustained basis (2016F: 0.8x) -- presales/gross-debt at less than 40% on a sustained basis (2016F: 35%) -- net-debt/net-inventory at more than 60% on a sustained basis (2016F: 48%) ========= J A P A N ========= L-STARS ONE: Moody's Raises Rating on Class E Notes to Ba1 ---------------------------------------------------------- Moody's Japan K.K. has upgraded the rating of Class E Notes issued by L-STaRS One Funding Limited. The affected rating is: Class E, Upgraded to Ba1 (sf); previously on Aug. 22, 2011, Downgraded to Ba3 (sf) Deal Name: L-STaRS One Funding Limited Class: Class E Issue Amount: JPY100 million Coupon: None Issue Date: November 29, 2006 Final Maturity Date: October 27, 2043 Underlying Assets: Investment-purpose condominium loans and residential mortgages Originators (Sellers): Libertus Jutaku Loan K.K. and New Century Finance Co., Ltd. Servicer/Special Servicer: Capital servicing Co., Ltd. Note/Bond Trustee: Deutsche Trustee Company Limited Arranger: Lehman Brothers Japan Inc. (as of the Issue Date) RATINGS RATIONALE The rating upgrade reflects the increased credit enhancement to the Class E Notes from the redemption of the classes senior to Class E. The increase was prompted by the recent high prepayment rate and by the use of excess spread to redeem the Class A to Class C Notes. The Class A to Class C Notes are redeemed until each class' credit enhancement reaches its target level. Any collection amount left over after these target levels are reached will be used to redeem the notes in reverse sequential manner (from Class C to Class A), while maintaining the target levels (target subordination payment). Class E will not be redeemed until Class A to Class C are fully redeemed. Class F will not be redeemed until Class E is fully redeemed. Currently, Class D and N are already fully redeemed. The loans have been performing within our revised gross loss expectation set out in August 2011, when Moody's increased the assumption. The principal methodology used in this rating was "Moody's Approach to Rating RMBS Using the MILAN Framework" (Japanese) published in September 2016. Factors that would lead to an upgrade or downgrade of the rating: Factors that could lead to an upgrade or downgrade of the ratings include an improvement or deterioration in the credit quality of the collateral pool, and the amount of credit enhancement available for each tranche. =============== M A L A Y S I A =============== PRIME GLOBAL: Terminates Crowe Horwath as Accountants ----------------------------------------------------- Prime Global Capital Group Incorporated was advised that the Company's independent registered public accounting firm, Crowe Horwath (HK) CPA Limited, will no longer provide audit and assurance services to public companies subject to the statutes and regulations of the United States effective as of Oct. 1, 2016. Accordingly, the Company, with the approval of its audit committee and board of directors, terminated the services of CHHK effective Sept. 30, 2016. CHHK's reports on the financial statements of the Company for the fiscal year ended Oct. 31, 2015, did not contain any adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting principles, except that its report for the fiscal year ended Oct. 31, 2015, contained an emphasis of matter paragraph regarding the Company's ability to continue as a going concern. During the Company's fiscal year ended Oct. 31, 2015, and through Sept. 30, 2016, there were no disagreements with CHHK on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure which disagreements, if not resolved to CHHK's satisfaction, would have caused them to make reference to the subject matter in connection with their report on the Company's consolidated financial statements for those periods. 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 ==================== SOLID ENERGY: Asset Sales Process Proceeding on Schedule -------------------------------------------------------- A milestone step in the sale of Solid Energy's assets has been reached with the receipt of bids, beginning the final stage of the sale process as scheduled. Solid Energy has been operating under a Deed of Company Arrangement since September 2015 and is working through an orderly sale of its assets. All land, mines and other assets have been offered for sale. This is seen as offering the best outcome for creditors, staff and the regional communities in which the company operates. Announcing the close of bids, Solid Energy Chairman Andy Coupe said that, as previously signaled, the company expects to be in a position to make a statement about the successful bidder or bidders from late October. "This first phase has run to schedule and has delivered an encouraging level of interest in the company's assets," said Mr. Coupe. "There is now a complex bid evaluation process to work through, to assess the most favourable option. Because assets have been offered for sale as a whole or in parts various sale configurations are possible, each with different outcomes. We will be making a further statement, including the next steps for the company wind down, once that evaluation process has concluded." Mr. Coupe noted that the recent rise in coal prices has been helpful for the sales process. "However the fact remains that there are a significant number of coal mining assets for sale around the globe, coal prices remain highly volatile and the market fundamentals have not changed. Against this backdrop we have worked very hard to put the company in the best possible financial and operational position for sale, building on the efficiencies gained through successive restructures." Mr. Coupe acknowledged the support of a number of stakeholders. The Government agreeing to make Solid Energy's environmental indemnity funding available to new owners, and also the local authorities' co-operation in relation to the environmental indemnity negotiation, were both critical. The co-operation of the participant creditors during what has been an extremely complex process has also been extremely important. He also acknowledged the long period of uncertainty under which staff have operated, and that the company is endeavouring to ensure that as many jobs as possible are retained under new ownership. He added that the effect of future employment uncertainty could very easily have seen a deterioration in production efficiency and health and safety observance. Concurrent with the conclusion of the bid process, Chief Executive Dan Clifford has announced his resignation effective mid-November. Current COO Tony King will step into the Chief Executive role, providing continuity through the sales process and the eventual wind up of the company, which is likely to take many months. Mr. Coupe noted the Board's appreciation that Mr. Clifford has led the company through to this significant milestone before tendering his resignation. "Dan was appointed in 2014 at a time when the company was confronting significant financial pressures and continued deterioration in its trading environment. He inherited immense challenges, including the assessment of safe re-entry into, and imminent sealing of, the Pike River Mine (which the company had purchased following the fatal 2010 mine explosion). In the face of these very complex challenges he has made an outstanding contribution to the company, achieving both improved health and safety performance and increased operational efficiency. He will be returning to Australia with his young family, and will leave with the very best wishes of the Board. "Tony King has a long history with Solid Energy. He has been closely involved in the asset sales process, and is widely respected in the coal mining industry. The Board is very pleased that it can turn to someone of Tony's calibre to take up the Chief Executive role in mid-November." A comprehensive announcement regarding the company's asset sales progress is expected to be made in mid to late October. Background - Asset Sales Process Solid Energy entered Voluntary Administration in August 2015 after the directors concluded that the company had no realistic prospect of refinancing significant debt. Under the Deed of Company Arrangement agreed with creditors in September 2015 the directors are responsible for running an orderly sell down process to sell the assets of the company. All land, mines and other assets have been offered for sale either as a whole or in parts, presenting an opportunity for those assets that are economically viable to continue trading under new ownership; delivering the best outcome for creditors and staff. The company has focused on ensuring its assets are in the strongest possible financial position for sale. The Crown has supported the sales process by agreeing that the environmental indemnity funding currently available to Solid Energy would also be available to any new owner. This provides certainty for affected local authorities, who have also supported the sales process by agreeing to cap any environmental claims at the indemnity level. Background - Circumstances leading to the Voluntary Administration of Solid Energy in August 2012 Solid Energy announced a NZ$200 million decline in revenue on the back of significant deterioration in market conditions. A sharp and sustained drop in the international coal price, coupled with softened domestic demand and the strengthening of the NZ dollar against the US dollar saw a FY 2012 loss of NZ$40M - down 146% from the previous year. By June 2013 Solid Energy was carrying debt of NZ$395m which it had taken on to support investment in new energy projects. In response to the market downturn the company announced a review of all aspects of its business. The Board and senior management also underwent substantial change.The new Board drove a strategy to focus on areas of core mining capability, closure of unprofitable operations and sale of non-core assets. Prior investments in lignite conversion, coal seam gas, underground coal gasification and renewable energy were stopped and assets in these non-core businesses sold. The strategy offset declines in revenue in the depressed market; but despite stabilisation of the domestic market, global trading conditions remained challenging and the company's financial position continued to deteriorate. In October 2013, Solid Energy agreed a financial restructuring package with the Crown and commercial lenders designed to give the company a chance to trade its way back to a viable and financially stable position over the following three years. At that time, then-Chairman Mark Ford noted that success would "depend on a gradual improvement in market demand for steel- making coal." Through the FY 2014 the company continued to pursue its strategy of divesting in non-core assets, and repositioning the business as a competitive conventional coal company. Over this period the company continued to contend with challenging market conditions: low prices, low demand and a high NZ dollar. The continuing weak forecast markets required further write downs in the carrying value of its assets. A further decline in coking coal prices (representing a 54% fall from peak prices in 2011) resulted in the need for further cost reductions throughout the company in order to preserve cash and for the company to seek shareholder and bank support for funding. The Board secured an agreement with the Government to cover Solid Energy's land remediation obligations to prevent the company from falling into negative equity. Despite improved operational performance as a result of a concerted strategy to refocus the business on core mining activities and reduce and contain costs across the organisation, the decline in the carrying value of assets outpaced the improved operational performance, and international market conditions continued to decline. By mid FY16 coking coal prices had dropped by 74% from the 2011 highs. Through continued restructure, mine rationalisation and stabilisation the company's domestic operations have maintained profitability however fundamentally the company had previously taken on too much debt through the top of the commodity price cycle and had insufficient equity to continue trading viably through the bottom of the cycle. In August 2015 the company entered Voluntary Administration, concluding a period of intense negotiations with lenders and its shareholder the Crown. In September the creditors voted overwhelmingly in favour of the Deed of Company Arrangement. Background - Solid Energy and Pike River Solid Energy bought the assets of Pike River Coal Ltd (in receivership) in July 2012, following the fatal mine explosion that occurred in November 2010 under the previous mine ownership. Following extensive investigation of the feasibility of conducting a safe re- entry project, in November 2014, Solid Energy announced that it would not continue with the project to re-enter the drift (main access tunnel) in the Grey District because the company considered that the risks to life remained too high. The mine is currently in the process of being sealed. The sales process has no impact on future plans for Pike River mine, which are funded by the Crown. ================= S I N G A P O R E ================= RICKMERS MARITIME: Admits It Is Technically Insolvent ----------------------------------------------------- GlobalTrade reports that Hanjin Shipping isn't the only player in the ocean shipping world that has become insolvent. According to GlobalTrade, Rickmers Maritime Trust (RMT), a Singapore-listed owner of containerships has become the latest casualty in a growing list of containership owners with toxic vessel assets that are unable to generate sufficient funds to pay their outstanding debt obligations. GlobalTrade relates that while a number of privately-owned shipowning concerns have filed for bankruptcy in the last three years due to the collapse in containership charter rates and asset values, RMT is the first publicly listed owner to admit that it is technically insolvent and that its assets are currently only worth their scrap values. According to the report, RMT sadi its fleet of 16 panamax containerships of 3,400 TEU to 5,000 TEU, with an average age of only nine years, would be worth a maximum of $140 million in a distressed sale, against a book value of $640 million. GlobalTrade, citing a recent report from Alphaliner, discloses that secured lenders will likely recover only 50% to 65% of the debt owed, while bondholders and shareholders will suffer total losses if the assets are liquidated. In an attempt to buy time, RMT has proposed that its bondholders exchange $100 million of notes due in May 2017 to $28 million with no maturity date that are convertible to 20 percent of the shares of the company, says GlobalTrade. If the bondholders don't accept the proposal, according to the Alphaliner report, RMT says it will not be able to obtain the secured lenders' agreement to refinance the rest of its outstanding senior debt of $281 million, $180 million of which is due in March of next year, GlobalTrade relates. "The proposal will likely be resisted by the bondholders as it favors the equity owners, who will still retain 80 percent of the company shares," Alphaliner, as cited by GlobalTrade, concluded. Trying to buy additional time in the hope that the panamax containership market will enjoy an "improbable recovery," the report suggested, is a lost cause, reports GlobalTrade. Rickmers Maritime (SGX:B1ZU) -- http://www.rickmers-maritime.com/ -- is a Singapore-based business trust that owns and operates containerships mainly under fixed-rate time charters to global container liner companies. The Trust owns a portfolio of approximately 20 containerships ranging from 3,450 twenty foot equivalent unit (TEU) to 5,060 TEU, offering a total capacity of approximately 66,410 TEU. The Company's subsidiaries include Kaethe Navigation Limited, Richard II Navigation Limited, Henry II Navigation Limited, Moni II Navigation Limited, Vicki Rickmers Navigation Limited, Maja Rickmers Navigation Limited, Laranna Rickmers Navigation Limited, Sabine Rickmers Navigation Limited, Clan Navigation Limited and Ebba Navigation Limited. The Trust is managed by Rickmers Trust Management Pte. Ltd. ==================== S O U T H K O R E A ==================== HANJIN SHIPPING: Maersk Unlikely to Buy Container Ship Operators ---------------------------------------------------------------- Costas Paris at The Wall Street Journal reports that Danish conglomerate A.P. Moller-Maersk A/S isn't likely to move to buy either Hyundai Merchant Marine Co. or Hanjin Shipping Co. contrary to industry speculation that it would take over either one or both of the troubled Korean cargo ship operators, according to people familiar with the matter. Instead, the company is likely to wait for other distressed operators to seek buyout deals as they try to avoid bankruptcy, the people said, the Journal says. The Journal notes that shares of both Korean carriers have swung widely since Hanjin filed for bankruptcy protection at the end of August on investor expectations that Maersk would come to their rescue. Maersk is the world's biggest container operator in terms of capacity, the Journal says. According to the Journal, the speculation of Maersk takeover activity has intensified since Maersk announced late last month that it plans to break up the group into transportation and energy units. An executive of Maersk Line, the group's container operator, has said it is on the lookout for acquisitions, the report relates. The Journal says Hanjin's shares rose more than 40% in the week after the executive said on Sept. 22 that acquisitions would be Maersk Line's preferred growth option. "Buying Hanjin or HMM are rumors invented out of thin air," the report quotes one of the people involved in the matter as saying. "Maersk isn't really interested in the Korean operators." According to the report, Hyundai Merchant Marine is seeking to acquire at least five of Hanjin's biggest container ships out of a fleet of 37 and the Korean government has said it would back Hyundai to buy Hanjin assets. But Hyundai is also in the midst of a creditor-led restructuring program and must get approval of its creditors to make the purchase. It also is a takeover target. "The Korea government will fight tooth and nail to keep at least one national carrier," said a second person with knowledge of the matter, the report relays. "It's a matter of principle to have a flag carrier moving Korean exports around the world." If Hanjin is able to avoid liquidation, it is expected to emerge from bankruptcy protection as a much smaller regional Asian ship operator, the Journal notes. About Hanjin Shipping Hanjin Shipping Co., Ltd., is mainly engaged in the transportation business through containerships, transportation business through bulk carriers and terminal operation business. The Debtor is a stock-listed corporation with a total of 245,269,947 issued shares (common shares, KRW 5000 per share) and paid-in capital totaling KRW 1,226,349,735,000. Of these shares 33.23% is owned by Korean Air Lines Co., Ltd., 3.08% by Debtor and 0.34% by employee shareholders' association. The Company operates approximately 60 regular lines worldwide, with 140 container or bulk vessels transporting over 100 million tons of cargo per year. It also operates 13 terminals specialized for containers, two distribution centers and six Off Dock Container Yards in major ports and inland areas around the world. The Company is a member of "CKYHE," a global shipping conference and also a partner of "The Alliance," another global shipping conference to be launched in April 2017. Hanjin Shipping listed total current liabilities of KRW 6,028,543 million and total current assets of KRW 6,624,326 million as of June 30, 2016. As a result of the severe lack of liquidity, Hanjin applied to the Seoul Central District Court 6th Bench of Bankruptcy Division for the commencement of rehabilitation under the Debtor Rehabilitation and Bankruptcy Act on Aug. 31, 2016. On the same day, it requested and was granted a general injunction and the preservation of disposition of the Company's assets. The Korean Court's decision to commence the rehabilitation was made on Sept. 1, 2016. Tai-Soo Suk was appointed as the Debtor's custodian. The Chapter 15 case is pending in the U.S. Bankruptcy Court for the District of New Jersey (Bankr. D.N.J. Case No. 16-27041) before Judge John K. Sherwood. Cole Schotz P.C. serves as counsel to Tai-Soo Suk, the Chapter 15 petitioner and the duly appointed foreign representative of Hanjin Shipping. STX OFFSHORE: May Be Sold as Part of a Package Deal --------------------------------------------------- In-Soo Nam at The Wall Street Journal reports that the South Korean bankruptcy court handling the insolvency proceedings of STX Offshore & Shipbuilding Co. said on Oct. 4 it may sell the troubled shipyard together with its French unit that makes profitable cruise ships. "A foreign company has shown interest in buying three STX companies together. We're looking into such a possibility," the Journal quotes Choi Ung-young, a judge and a spokesman for the Seoul Central District Court, as saying. Mr. Choi declined to identify the foreign company, the Journal says. A final decision will come after the creditors and bondholders of STX Offshore decide on a rehabilitation plan to be presented by the company later next week, the judge said, the Journal relates. If rejected, STX could face liquidation. The Journal notes that STX, which filed for receivership in May, is Korea's fourth-largest shipyard and a unit of conglomerate STX Corp. STX is active in shipping, construction and energy around the world. As part of a restructuring plan, the company has been looking to sell STX France, which specializes in building cruise ships and is the only profitable unit of the parent, with a full order book for the next seven years, the Journal says. Italian shipbuilding giant Fincantieri SpA and Dutch counterpart Damen Shipyards Group are in the running to buy STX France, a person with direct knowledge of the matter told The Wall Street Journal last month. The Journal relates that the Seoul court judge said a package deal, if implemented, would include the sale of STX Offshore, its French unit and Goseong Offshore & Shipbuilding Co., a Korea- based unit that manufactures container ships and ship components. "It's too early to say we'll proceed with a package sale because many firms initially express their interests in companies under court receivership, but never bid when it's up for sale," the report quotes Mr. Choi as saying. The Journal says Korean shipyards, including the world's three largest -- Hyundai Heavy Industries Co., Daewoo Shipbuilding & Marine Engineering Co. and Samsung Heavy Industries Co. -- are restructuring, led by creditor banks that have struggled to rehabilitate the embattled shipbuilders through the sale of noncore assets. Profits at Korean shipbuilders began sliding when the 2008 global economic crisis damped orders from shipping companies, and lower- cost Chinese rivals made market inroads, according to the Journal. STX Offshore creditors have injected billions of dollars to bail it out, but it still ran a KRW314 billion ($284.4 million) operating loss last year, following a KRW1.5 trillion loss in 2014. The company owes financial institutions nearly KRW6 trillion, the Journal discloses. STX Offshore & Shipbuilding Co. Ltd. is a Korea-based company mainly engaged in the shipbuilding and offshore business. The company operates its business through five segments: merchant vessel, cruise, offshore and specialized vessel (OSV), vessel apparatus and other segment. The merchant vessel segment engages in the manufacture of liquefied natural gas (LNG) and liquefied petroleum gas (LPG) carriers, container ships, tankers, very large ore carriers (VLOCs), bulk carriers as well as pure cars and truck carriers. The cruise segment provides cruise ships. The OSV segment engages in the manufacture of offshore patrol vessels, corvettes and others. The vessel apparatus segment produces vessel engines, deck houses and others. The other segment mainly engages in the plant construction business, rental business, crane business and others. ********* 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 ***